Let’s get right into it, and start with the basics. The first step is to determine what part of the business appeals to you, and also what part of the business you can get into at this moment based on your circumstances. Let’s start by reviewing a couple of options for those of you that have very little money to start with, or even no money. Later, we will discuss options for those of you with money to invest.

Getting Started with no Money

There are a few ways to get your foot in the door in the real estate business without actually having your own investment funds. The quickest and easiest way into the business is to become a “birddog” for investors. This simply means you find the deals, they buy them. You can earn a fee from bringing them what they are looking for. I recommend looking in the phone book, on the internet, and watching for signs that belong to an investor. Call these people and tell them what you are looking to do. Ask them exactly what they are looking for, and ask if they will work with you if you bring them a great deal. Nine times out of ten, they will say yes, and give you a good idea of what their investment formula is. Pay close attention, even if they don’t buy a property you bring them, you have just gained valuable knowledge about what local investors are looking for! Be sure to get something in writing regarding your payment, before you give them all the details of the deal!

Another way to start with little or no money is wholesaling. I don’t recommend this if you are a complete novice. Most wholesalers have this strategy: Tie up the property with a contract, find a buyer that will pay more than your contract, and you make the difference when it closes. Be sure your contract has an out in case your buyer does not close. If you have no money, you don’t want to have the seller try to force you to close on the property.

The third no money technique, and the way I broke into the business, is to create a partnership with someone that has money, but not the time to search for a property and put the deal together. Again, this is not for a complete beginner, you need to know the basics to ensure you actually profit from the deal! Form a “LLC” with the partner, and use that to hold the property you have chosen to purchase. Be sure to treat it as a business. Everything to do with the business is to be kept separate from your personal funds. If you are getting paid for anything, write an invoice, and “submit” it to the business. Keep good records, you will need these for tax time!

Investing With Your Money

OK, I realize there are still people out there that have money, and many investment books leave you out! Let’s look at a few options for you to get started.

First, you need to build a solid team. There are a lot of people that will work for you, for FREE! Truthfully, it’s not actually for free, but a lot of this business is based on commissions, so it is not costing you anything to have people working for you. In fact they are getting paid when they bring you a deal that will make you money. So you need to build a solid team. I recommend having a real estate agent on your team. They have access to bank owned foreclosure listings, and are your best bet to gain access to these properties. Foreclosures and REO’s are at an all time high right now, so it would be foolish to miss this opportunity.

Second, find a good “birddog”. Read above for details on that term. Find a young aggressive person that is really looking to make it in the investing business. Please be sure if they bring you a great deal that you actually close on it! Most people starting in the bird-dogging business don’t have money. Help them out, and they will be loyal to you. This is how you get the best of the best. They have the time, you have the money. It is a win – win relationship.

The next person to add is a banker. You may have money, but the more of your own money you can keep, the better. I suggest getting in with a local bank or credit union early on. As you move on to more deals, they will be comfortable continuing to lend to you. Be sure to speak with residential and commercial lenders to find who may be the best fit for your personal investing strategy.

Conclusion

This article barely touches the surface of getting started in the real estate and foreclosure investing business. Proceed with caution, double check all your numbers, and be extra conservative. Pass up a deal if it is not what you expected. Don’t get emotionally involved, remember that every property is just numbers in your spreadsheet! With that said, get excited, and go flip some houses. -Justin Razmus

Offshore

It is debatable if Mexico is cheaper than Panama but they do tax offshore income in Mexico so it is probably more expensive for this reason alone and the crime situation makes it hazardous. Costa Rica is not really cheaper and has a serious crime problem plus there are no longer benefits for Expats and you would have to pay income tax on your offshore income like retirement, social security etc in Costa Rica. Unless you open a business that does business in Panama within the local economy or take a job in Panama you can plan on your income being tax exempt as offshore income.

Investment

The real estate investment in Panama is increasing because of the natural beauty of ocean view property in Panama. Don’t let your real estate agent tell you where to buychances are, they’ll be pushing you into the investment where they get the biggest or fastest commission check. As more and more people discover the Azuero Peninsula Panama investment in this area continues to increase. Everyday more and more people are making an investment in Real Estate in the Azuero Peninsula of Panama. The Azuero Peninsula Panama should be on the list for all those seeking excellent investment opportunities and a tranquil, beautiful living environment. The coming year is looking good for recent investments in Panama’s real estate and tourism industries. Here are a few reasons why Panama real estate is a boom in investments: Panama has a stable government and an economy growing greater with time.

Panama Beach Property

The beach is ideal for swimming, snorkeling, and just relaxing. Real Estate Values in Panama and primarily in these Pacific Coast Beach areas has been appreciating very steadily, and as interest and growth increases so to do the real estate values. Real Estate in the Azuero Peninsula have unimaginable views, access to unspoiled beaches, and all for very affordable prices. This Azuero Peninsula Ocean View Real Estate is only a distance to many excellent beaches.

The arrival of Nikki Beach may attract a new crowd to Panama. However, the concept of Nikki Beach is quite distinct from these other groups. Nikki Beach is focused towards an exclusive market: People over 30 with purchasing power that want to have a good time in an exotic, unique environment. Nikki Beach is exclusive property of Michael Penrod and his family, though at some of their clubs and hotels they do maintain strategic alliances with local investors. Regarding waterfront property, by law all beaches are public hence all beach-front properties must provided a right of way, starting from the highest tide line to the property line.

Living

Panama has one of the lowest costs of living in all of Central and South America. When thinking of the best places to retire, it is important to understand that Panama has a very low cost of living combined with amazing beaches and scenery that propels Panama to the number one spot to consider for those wishing to retire abroad. There are numerous benefits to living the Expatriate lifestyle. Town Living – There are nice neighborhoods that offer convenience and proximity to shopping and restaurants.

Legal

Factor in obscure Panamanian laws, crafty scam artists, andthe newcomer’s relative inexperience to Panamanian culture, and thefirst-time investor is faced with a troublesome and confusing puzzle. A lot of legal problems arise with use rights and this includes litigation. Once your attorney has confirmed the property title is legal and free of liens or other restrictions, the final closing is scheduled and the buyer/seller signs the final Buy/Sell Contract. The law does not require a Buy/Sell Contract to be in Spanish to be legally enforceable.

Retirement

There is something for every taste in retirement living in panama real estate. A welcoming community, safe environment, low crime statistics, excellent incentives for retirees, together with the natural beauty and ethnic diversity that is Panama, all appeal to the increasing number of baby boomers from North America and Europe who are looking for a different option for retirement. During the past several years Panama has been consistently rated in the top ten for the best retirement locations worldwide. With a little homework and due diligence, you will find that Panama has all the criteria for a solid investment or retirement destination.

Impacts of the Panama Canal

The Panama Canal is also about to undergo an expansion. Now Panama a country of 3 million people has an annual income of one billion dollars from the Panama Canal revenue. The Canal expansion, another major boost to the economy, is expected to bring tens of thousands of new jobs along with long-term incremental revenue for the country. With the expansion of the Panama Canal there are a lot of high paid executive coming through for a short time. Panama is a hot tourist destination for many reasons, least of which is the Panama Canal, though it’s certainly still a popular visitors site. If the project of building the extra canal goes through it is expected to result in an apartment shortage due to extra workers being sent here by their companies which of course means you could buy an investment unit furnish it and rent it out for big bucks for many years while the new canal is being built, not kidding about this.

Panama Real Estate is a great investment. Panama is currently one of the most considered and researched locations with many investors. Panama could be the new destination for this exclusive market of “jet setters. Panama’s modern amenities are similar to that of North America, making life a bit easier day to day. Panama has one of the lowest costs of living in all Central and South America. Panama real estate is hot right now…don’t wait to stake your claim.

Apart from maximizing profits, an exit strategy can also help a real estate investor in Maryland cut losses if anything falls out of place. An investor can make an exit strategy for all contingencies like slump in the real estate market of Maryland, not finding the right buyer or tenant.

Various factors can affect the selection of the right exit strategy. The first thing that an investor needs to select the right exit strategy for his real estate investment in Maryland is clarity of goal. The investor must decide the nature of income he wants from his property and the time when he wants to cash his real estate investment in Maryland. External factors that affect the selection of an exit strategy include local infrastructural development, market behavior, nature of investment etc. Depending on these factors the investor can consider all options available to exit a real estate investment in Maryland. Some of the exit strategy options could be tax deferred exchanges, creating trusts, joint ownerships, installment sales etc. Let us see using an example how an investor can choose from these options.

Consider an investor who had invested in real estate in Maryland and has sold a property now. The sale has given him huge profits, but after making some calculations he realizes that he might lose a huge chink of this profit in tax. In this case the investor can opt for internal revenue code (IRC) section 1031. This exchange can be used for “property help for productive use in business”. Under this exchange the investor has the advantage of tax deferral on capital gains earned from the sale if he exchanges the property for a “like kind” property. This way the investor is not liable for paying the tax on his profit and can use his money to invest in other properties.

The investor can even plan for his heirs to inherit the property. He can gift it to them in portions don’t exceed the limit of annual gift tax exclusion, i.e. $12000 or even set up a Family Limited Partnership (FLP) and gift limited partnership interests to his heirs.

Let’s study a case where the investor is not looking for immediate liquidation of his real estate investment in Maryland. The investor has the option of opting for ‘tenancy in common’. Usually, investors opt for tenancy in common when they want to own a portion in a fast-developing high-end commercial property. It could be a multiplex, mall or even an office building. This way they also get rid of the liability to maintain the property and are free to sell it whenever they want.

An investor looking to create a regular stream of income from his property in Maryland can opt for installment sale options. This way he also ensures that the tax due on his sale is not payable at once and is divided on a yearly basis.

Another way of avoiding lump sum payment of tax is creation of trusts such as Annuity Trust (PAT) or Charitable Remainder Trust (CRT). These options also ensure a regular stream of income and the investor can also earn interest of the tax deferred over a span of time.

These are just a few examples. A real estate investor in Maryland can opt for various other exit strategies, alone or in combination. But he must take financial advice from an attorney and a tax advisor while selecting a strategy.

With years of experience down in Mexico in ensuring safe real estate transactions through their services such as title insurance, escrow services and closing coordination activities, the Stewart Title group has now opted to include a strategically complimentary product being that of Mexico mortgages.  “Loans obtained by Americans, Canadians, and Europeans have represented less than 10% of the purchases for second homes in Mexico. If you include to this scenario the current U.S. credit crisis, the access to financed capital has reduced substantially across the board” states

Ivan Castillo regional manager of Stewart Title of the Yucatan Peninsula, but quickly adds “Financing in Mexico using the Mexican property as guarantee has become more readily available through the services that we offer, with interest rates that have become very accessible in the last several months.” 

The program has been designed to ensure a simple and efficient process for the American, Canadian or European to obtain approval for loans with clarity and with ease of mind.  Working with several lenders, the group is able to find various programs that best suit the borrower and his needs with an increased probability of qualification for the Mexico home mortgage.  “This is where our network of offices and years of expertise comes to play” added Ivan Castillo.

Mexico mortgage loan options

Mexico Home Purchase Loans

Refinancing your Mexico Property

Property cash out (raising cash on a percentage of the total amount qualified from your property)

Construction Loans

Lot loans are also available

The loans are offered against the collateral on the property in Mexico and the lenders are located in either the United States or from Mexico.  Fico scores of 680 or above with the requirement of making a down payment of 25%.   

There are estimates that nearly one million Americans have already purchased a home or future retirement property down in Mexico.  This amount is projected to increase as more Canadians and Americans begin retiring in the next decade.   New services and tools to help this expanding market obtain and maintain their Mexican homes will become more accessible with the years.  This can be seen with companies such as Stewart Title whose new program has been introduced with their adjustment to the market and projection of substantial increases in the amount of Mexico Real Estate property acquisitions that will begin utilizing these new channels and sources of financing. 

The focus is usually on specific strategies and the step-by-step process by which to execute that strategy. The idea is that this gives you a repeatable, easy to understand process that you can learn and implement quickly.

But after years of learning about real estate and then years of teaching and consulting I have realized that this approach can inhibit your ability to understand how real estate investing works at the most basic, fundamental level.

It is sort of like teaching a kid how to play baseball by saying:

1. Get a hit.

2. Get on Base.

3. Score a Run.

While this is an easy “strategy” for scoring, it leaves the player with no understanding of the fundamental skills necessary to get a hit.

It’s exciting to think about scoring the winning run, or making $50,000 on one real estate deal. However, most people who can do that on a regular basis have been working at their craft, diligently practicing and mastering fundamental skills.

These fundamentals are really the keys that unlock the door to investing success.

Home run king Hank Aaron’s success was in his mastery of the fundamentals of a proper batting swing. That swing gave him the ability to break the most famous record in all of Baseball.

A real estate investor faces the same challenge when trying to “hit a home run” and make big money with real estate.

Like star athletes, you must master the fundamental skills of your craft, and learn to apply those fundamentals to every prospective deal. The bottom line is if you want to be a star in the “game” and make the big money you have to be good at the right things. But strategy based training tends to divert our attention away from the fundamentals.

Back in the early 1990’s I heard Carleton sheets saying that rental property was the way to go. I went to a seminar and heard another guy named Russ Whitney saying that I should be finding houses that were in bad shape and fixing them up.

Then I saw another guy on TV talking about how he got cash back at a closing, and actually made money by buying a house! It certainly seemed that there were plenty of ways to make money in real estate. Still I had what some people refer to as “Analysis Paralysis “.

Today I realize that my “analysis paralysis” was caused by a lack of understanding. The plain fact was that I simply did not know the fundamentals of real estate investing. You might say I knew I needed to “get on base”, but I simply did not know how to “swing the bat properly”.

After a few months of reading articles, searching real estate websites, buying books and tapes, and going to seminars, I piled in the car and started looking at houses. But every time I looked at a house, I felt confused and unsure about what to do and how to know if this really was a decent investment property. For some reason, I just could not seem to connect all the dots

It seemed like my “career” was going nowhere. I went from one seminar to another hoping that each one would be the one that would clear up all my questions. Finally, out of sheer frustration I decided to get my agent’s license. As a new agent I was required to take some classes on Real Estate Finance.

We learned to calculate net profits on a sale, buyer’s payments, and how to do comparable market analysis. These calculations were not such exciting stuff at the time, but several years later, when I made the jump to become a full time buyer for an investment company, this gave me the ability to adapt to the investment market quickly.

Using my baseball analogy, you might say “I was working on my swing.”

I did not know it at the time, but I was honing those fundamental skills that would later enable me to get involved in bigger deals with higher level investors.

Looking back on all this experience I can’t help but notice that the most successful investors, the ones who are truly financially independent as a result of their real estate activity, are those who have mastered these fundamental skills.

Every property has a value, location and character all its own. Mastering the fundamentals means being able to obtain key pieces of information, and then let that information dictate the investment strategy options based on that information.

The greatest single problem facing most investors in the current market is a lack of adaptability to changing circumstances. I believe that this lack of adaptability is primarily the result of not understanding the fundamentals of Real Estate Economics. It sounds pretty highfalutin’ but all we’re really talking about are the Real Time Market Value, income potential, and costs.

Each property will dictate to you what your best investment options are if you can gather those key pieces of information.

Your starting point is to understand your market well enough to define an average of property values by the square foot – NOT house to house, as with comparable market analysis.

In a stable to improving market as we had from 1995 to 2005, it is easier to avoid mistakes when calculating value. But in a changing market where prices are tending to shift down because demand is changing or slowing, it is essential to be aware of what I call the Real Time Market Value. Learning this fundamental skill is critical for hitting “home runs” with real estate deals.

Fundamental Skill number one: Know Your Real Time Market Value, and use this value to calculate your offer price.

When you pay too much going in, few, if any, strategies will keep you from losing money.