People who have recently entered the real estate investment market are all aware that there is a wealth of information out there, all pointing the way to success. You’ve probably already attended a few meetings of your local Property Owner’s Association, perused the internet, maybe even taken out a few good books written by investors that have the financial success to back up their strategic claims. All of these sources are loaded with facts, figures, tips and strategies, the intention of which is to help you to create successful investors.

The big problem with all of this information is that it gets very confusing and can even be contradictory. One instructor will tell you only to buy foreclosure properties, while another will tell you to stay as far away from foreclosure s as possible. Some will suggest refinancing a group of properties in order to get some quick cash for offers when you buy more property, while some will tell you that refinancing is a financial death knell, and no good will come of it. Holding or flipping, tenancy or the vacant rehab, the list of opinions goes on and on. New investors can be left with their heads spinning.

So what exactly is the deal here? Are all of these resources even written by people who know what they are talking about, or is it all just a bit of a paper scam?

The answer is, almost all of the advice given out by real estate investment gurus is sound, and has been proven to work. What you as the individual investor have to realize is that what they are teaching worked for them. They believe in the methods they extol because in their experience, flipping worked like a charm but holding tenant properties left them treading water.

What you as an individual need to do is not to follow this advice as if it were gospel, but rather take it in and file it away for reference. If you try to implement all of the steps you read or hear about, you’ll never get started simply because you are trying to make a decision about what to buy and how to buy it on information that is contradictory. The key is to understand your own situation and implement strategies accordingly. In other words, narrow it down to the things you need to know in order to buy property. And like any expert would do, here is our opinion on what those things are.

• Have an idea of how you want this real estate investment to work. Once you decide on what you want out of the investment, other parts of the plan such as exit strategies and financing, as well as the type and conditions of the properties you want, will fall into place. For example, say that all you really want is a flip for quick cash. Single family dwellings that look bad now but with a few aesthetic changes are what you need to look at; you don’t have to worry about tenancy, appreciation, or anything else. In and out. Knowing ahead of time what you want out of the property will help to narrow a lot of your choices down.
• Never use just one strategy at a time when it comes to finding properties. Instead, try two or three different methods at a time (any more than this will be overwhelming, and you may lose track of what’s going on). Try using a bird dog, placing advertisements in the paper, and looking online for houses in your area. You’ll quickly find out what works and what doesn’t for you, but never have less than two lines in the water.
• You’ll want to have one solid exit strategy that you stick to in any specific type of deal, but you should also have a back up plan. Use your first plan to determine your offer and your exit strategy. For instance, if you decide that you want to wholesale, you know right away that you need to start looking for house buyers immediately. Further, the golden rule in wholesaling is never to offer more than 70% of the value after repairs – this rule will help you put an offer together.
• You should be very confident in your ability to evaluate the value of the properties that you are looking at. This is something that takes a bit of practice, and you don’t want to blow it here; paying too much, because you over estimated the after market price will take a huge bite out of your bottom line. If you’re looking to flip, you don’t have to worry about how much money you can make on a rent. If you are looking for a steady cash flow, you’ll have to figure out tenancy specifics in order to create a positive return.
• Don’t overestimate your abilities. A lot of new investors will be tempted to cut costs by doing most of the work themselves – they go to banks for financing, do their own repairs to a rehab property, do their own title searches. Usually the thinking is that money saved is money earned, but in reality doing too much yourself in real estate investing can end up costing you quite a lot. Instead of approaching your business alone, focus on creating a team that consists of several different experts to help you get the work done.

The first deals that you make are going to set the stage for the rest of your investing career, so don’t sit around paralyzed by the amount of information that you receive. Instead, take the basics out of any piece of information and start working with those to guide you. Everything else you can learn as you go.

There are several ways as a home owner that you can become precariously close to foreclosure on your property: mounting debts, a failed business, the loss of a job, and simple bad luck are all common reasons why a person finds themselves in danger of losing their home altogether when they fail to make the mortgage payments. Being in a state of pre- foreclosure, however, does not mean that all is lost. There may still be a chance to avoid the horrible effects a foreclosure will have on your credit, and maybe even gain some quick cash through the sale of your house. Let’s look at some of the options you have when facing a foreclosure.

1. Sit tight. This is a terrible decision for any home owner facing a foreclosure, but one which is often chosen nonetheless. Basically, the home owner chooses to live in the same way that caused the situation in the first place, making no payments on the mortgage and basically living in the house waiting for either the lenders or the winning bidder at the auction to evict. Taking this road means the total demise of your credit record, likely beyond repair in your lifetime.
2. Cash sale. Foreclosure has not yet occurred, therefore the title to your property is still in your name, and you have the ability to sell the house for quick cash and pay off the loan. You may even be able to net some cash out of the deal. The key to success with this option is being able to sell your home as quickly as possible, before that final foreclosure takes place. You will also want to be sure to get as much money through the sale as possible, and this will mean you do not want to use a realtor for the sale. You’ll need to find an individual or company who can facilitate a quick sale through an extensive network of contacts, most likely real estate investor s who say something like “ we buy houses pretty or ugly!”.
3. Short sale. This option allows the owner of the home to sell it, but at a price that is lower than the original amount paid. Shorts sales come about through an agreement between the investor and the home owner, and are subject to the approval of any lien holders. While the home owner will gain nothing from the sale, the taint on the credit record can be avoided as the foreclosure will not become complete.
4. Refinancing. As a home owner you may be able to apply to have your loan refinanced, but this method is rarely successful, because the equity on the home is low and the credit rating poor. In addition, the new loan will probably have much higher payments than the original loan, which may mean all that happens is a postponement of the foreclosure for a little while.
5. Cure. Curing the loan, as with a cash sale, will mean that a real estate investor must be found. The investor agrees to front the money to the home owner, who must then pay off the loan to the original lender in one lump sum. This sum will include any of the monthly payments missed by the owner as well as late fees incurred, foreclosure fees, attorney fees, and the principal. In exchange for the loan, the lender gains title to the house as security. Often the loan payments will be accelerated by the lender, and the home owner is extremely vulnerable in the event the lender doesn’t pay the loans.
6. Loan modification. Loan modification occurs when one or more terms of the loan are renegotiated. Interest rates may be adjusted, payments rescheduled as well as increased or decreased, and the mortgage term (fixed or variable) may also be switched. The problem with loan modifications is that they are virtually unattainable, as institutions will not accept most reasons for modifications as justified.
7. Repayment plan. In a repayment scenario, the home owner has managed to get his or her feet back under after a precarious time, and the lender agrees not to foreclose. Repayments are scheduled which incorporate the delinquent payments, as well as any interest incurred, into regular installments. These higher payments will recur until the mortgage has been brought up to date.
8. Forbearance. In this scenario, the lender will agree to either minimal payments or none at all for a short period of time on the part of the borrower. Once the term has expired, the home owner must pay higher payments until the mortgage loan has been brought up to date.

A quick look at most of these options should show you that for the most part, the inevitable is only being delayed. In most cases, a delaying of the payments will actually result in you making higher payments on your home than you were in the first place, or else risking everything (including title) in order to keep the roof over your head.

In order to keep your credit rating positive, and to avoid compounding the problem through higher future payments, only one of the above options is feasible, and that is the getting quick cash from the sale of your home. Not only will you avoid damage to future financial scenarios, but you may also be able to make a small amount of profit on your home due to equity. The key will be in ensuring that the sale goes through as quickly as possible, with a minimum of fees (realtor commissions and other fees) incurred.