Here's a quick quiz for you: in fact, it's so quick, it's only one question: Who will make the most money in a real estate transaction?
A.The realtor
B.The seller
C.The buyer
D.None of the above
What do you think?
A. The realtor makes a commission, a percentage of the total selling price usually equal to about six percent.
B. The seller hopefully makes a profit after subtracting the amount originally paid for the property, and all the costs and expenses of
owning the property for the time of possession from the selling price.
C. The buyer usually makes money when becoming the seller at a later date. Sure, you can make some money buying and selling real estate. In fact many millionaires have made their entire, or a major portion of, their money from owning real estate.
Owning real estate usually involves:
*Associations
*Insurance
*Building Maintenance
*Grounds Maintenance
*Management
*Mortgages
*Neighbors
*Ordinance awareness
*Property Liability
*Taxes
*Utility bills
Many of these items need attention on a monthly basis and sometimes daily.
D. This is the answer. There is one party who usually makes more than any other in a real estate transaction. In most any real estate
transactions involving a mortgage, the lender or bank stands to make the most money by a landslide. Lending money for real estate
will beat the other three hands down almost every time.
Here's the interesting thing about being the party that makes the most money: the lender often does the least. Lenders have almost none of the duties and responsibilities of the property owner.
Buyers hold property, lenders hold paper.
Paper is a lot lighter than property.
When you become a private mortgage lender you become a paper holder. You do the least and can make the most. Investing a portion of your portfolio in private mortgage lending can be smart. Divert your real estate equity holdings or stock funds into private mortgage lending rather than buying more real estate and you could have the right answer as to who makes the most profit in real estate transactions - YOU.
When you become a private mortgage lender you need a professional to show you the ropes. Your real estate lending becomes like changing your address -- to easy street.
