Problems and solutions

            Last week I gave step by step instructions on how to flip a house for profit. The real estate market is very unpredictable indeed. Buyers and sellers are often uncertain of the proper times to buy and sell. This is for good reason. How can anyone dealing in the real estate market be certain of anything when our own federal government cannot even make up their mind on major decisions that will effect anyone and everyone in this market.  Every week the federal government is changing its mind and going back on their words, which essentially destroys the trust between the public and its government.  One week Mr. Bernanke says he will begin decreasing bond buying slowly, the next he is stopping it all together, and the following week after that he is not touching it. These words influence the market so much. Mortgage rates, builders, buyers, and sellers, all march to the words of the federal reserve because they are looking out for their own good.

            So the real question is how do we deal with this uncertainty and lack of trust in the federal reserve's actions? Mortgage rates by historical standards are still very low, they may have seen rises recently but they are still very affordable. People need to understand that they need to work with the situation that is presented in front of them and only focus on the things that they can control. When the market struggles and mortgage rates are low people have a tendency to become very cynical and negative, losing site of massive opportunities that are in front of them. The real estate market has seen some of the lowest mortgage rates it has ever seen in recent past months. Think long term people! This is undoubtedly a time to buy and hold on to property for a longer time period. Snatch up these low mortgage rates and see it as an opportunity to become rich! This is obviously easier said than done. It does require some cash on hand to purchase a property that some people don't have. This means you have to shop within your means. Finance as many projects as you can with the low mortgage rates that are in front of you.

            This leads people to the question of how do you finance purchasing a house or multiple houses. There are a few ways that many people who are successful in the industry take advantage of. The first is renting out the properties that you own. This rent money will pay the mortgage for you, you are essentially having someone else pay your mortgage and over time this property will pay for itself. This will allow you to hold on to this property during a time where the real estate market is so unstable and unpredictable. It can also generate a profit for you if the property is in high demand to rent.

             Another way to finance projects if you may not have the cash on hand or are hesitant to obtain such a large risk at once is work with people you trust. The power in numbers is much greater than the power that one person can generate. Work with people you trust and purchase homes together by splitting up the cost between the people that are interested. This not only divides up the cost, it also drives down the risk because it will be spread out over several people and it will make this risk a lot less intimidating and manageable. If you find a core group of trust worthy people (family members, close friends) to work with, you can then start thinking bigger, purchasing properties that have more value and purchasing more properties all together.