Imagine purchasing a property like this for a fraction of the fair market value either to live in or as an investment. Well it is certainly possible if you consider buying a HUD home. Most of these gorgeous homes are in very good condition and ready to be occupied or maybe you are interested in buying it and then reselling at some point in the future. These gorgeous homes also are great rental properties that you will be proud to call your investment. There are many options for investors when it comes to purchasing REO and/or distressed homes but HUD stands above the rest in my opinion. Cash Flow achieved through Real Estate Investing has been consistently higher than most other types of investments. Cash Flow is the difference between your income and your expenses on a piece of property. By keeping a strong positive cash flow, you will have more options, and will be able to take advantage of more deals that come your way!
Real Estate has always been considered a great investment, because historically it has not only kept up or surpassed the inflation rate, but it also allows great tax shelter opportunities. Even in today’s uneven market, owning the right kind of real estate is still a solid proposition, which will serve to stabilize your current income and bring you wealth for your retirement years. But even more importantly, becoming a Real Estate Investor offers several key advantages, which cannot be found in any other job or business. Equity Buildup can run as high as 12-20% per year in today's market. This is created with the combination of inflation and appreciation. You can now think of inflation as a GOOD thing! Also, when you improve a property (through renovation), you are, in effect, increasing its value. A property that is in need of repairs when you buy it and is brought up to neighborhood standards or slightly higher will also quickly increase the appreciation. Yes, even in today’s market and in this economic climate.
Leveraging, which allows you to control large sums of money with only a small amount of money. This is created by the proper use of OPM (Other People's Money!). Real estate, as compared to other investments, offers the highest degree of leverage. Take for example a couple who buys a single-family home - they can usually obtain 95% financing for this purchase, allowing them to purchase a large amount of real estate with little, if any, of their own money. Can you think of any other investments that offer such a high degree of leverage?
Real estate continues to be one of the best tax strategies for most Americans by using mortgage interest deductions, depreciation, paper write-offs, deductible expenses and “tax-free” cash-out refinancing.
However, it's important to note that you shouldn't buy real estate solely for the tax advantages; but only when it makes economic and financial sense to do it.
