Follow these 7 tips to start investing in real estate today:

1. Look In Your Own Backyard
The grass is always greener in the other neighborhood, and it’s easy to keep looking for the “right” area. The bottom line is that any area is the “right” area. In order to be effective in the steps 2 through 7, you’ve got to get over the idea that real estate deals only exist in other areas. It sounds clich

To those who are afraid of the big bad contractor, beware of the investor who cries “wolf” because no matter what form of real estate investing you do, sooner or later you will need to hire a contractor.

Whether your doing full blown rehabs, subject to, agreement for deeds, buying apartment buildings, lease option or even wholesaling, you are going to need to use a contractor and you want to know a secret? They’re not that hard to work with.

Actually if you follow some very simple rules you will substantially decree the risk of getting screwed by any contractor.

Those you have been mistreated and had a contractor walk off the job with thier money and not return or had a contractor who would rarely show up, never trained themselves properly to work with these tradesmen.

Now don’t get me wrong. I say tradesmen because those are the only type of contractors that I have work for me. There are many people out there who claim to be tradesmen but are nothing more than thieves in the night.

The first rule or working with contractors is to ask for and check his/her references. Too many people skip this step because they are in hurry to get someone, anyone on the job so that they can get finished. This is their number one priority.

They soon find out that this is not the contractors number one priority, especially since they already got a good chunk of money up front.

Even if you check thier references and your “gut” tells you that this may not be the person for your job, listen to your gut. Your going to have to be married to this person until the job is finished. Make sure it’s a marriage made in heaven.

You must then have the contractor sign a Contractor Agreement. You must have a binding contract that spells out the rules that both you and the contractor will follow as the job progesses towards completion.

If you do not have a Contractors Agreement signed, you have just set yourself up for failure.

Here are the key clauses and addendums that you need in your contract:

1) Scope Of Work – make sure all of your contractors bid on the same job. A lot of contractors omit items from thier bid so that they can charge you “overages” later.
Be as specific as possible when describing the scope of work. For example, if it is a roof that is being replaced, make sure the contract specifies the type of shingle, the style, the manufacturer of the shingle you want to use, how it will be fastened down… the more specific you get, the more protection you will have.

2) Draw Schedule – Never give a contractor 50% up front! You drastically increase your chances of never seeing him again. I give enough to cover the supplies and to pay his guys for one week, then I split the rest up into thirds.

3) Change Order – Be clear with your contractor that if any additional work is done on the property, if he doesn’t fill out your Change Order and have you both sign it, (I will only sign it after I have inspected the proposed additional work) you will not pay for the work.

This is a common tactic with less scrupulous contractors.

4) Penalty Clause – I have a penalty clause in my contracts that charges a contractor a certain amount per day for each day he is over the date that he said he would be done. The amount is usually $100 but it depends on the job size. This clause is a must!

5) Damage Clause – This states that the contractor will pay for any damage that he or his workers do to any other part of the property when they are on site. Contractors are always damaging other contractors work. Why should you have to pay? You save money with this clause over and over again.

6) Contractors Home Address And Phone Number – If he knows that you know where he lives, the chances of him disappearing go down drastically.

7) Clean Up Clause – You want your job site broom swept clean at the end of every day. You never know when a potential buyer will be coming through and if you don’t keep the place clean it will quickly look like a dump. Nothing attract trash like trash!

If you treat your business like the business it is, you will be treated like a businessman from your contractors.

Contractors are not hard to deal with if dealt with properly. Consider yourself informed.

There is a lot, A LOT of money to be made in real estate investing. Go out and get your share!

David Lindahl has renovated over 475 houses in 6 1/2 years and is the author of “How To Estimate And Renovate Houses For Huge Profits“.

Nothing Down – A Few Ways

Sometimes sellers are able to offer terms and a low or no downpayment, but often you have to find a way to get at least 70% of the price to them in cash. This is not only so they can get some of their equity out, but also because they will probably need to pay off the existing loan. So to get in with nothing down, you need to think in terms of how to get a primary loan, then how to raise the money for the remainder. A couple examples follow.

A few banks still do “no doc” loans, meaning they don’t require any verification of income, source of downpayment, etc. Since they generally loan only 70% to 80% of the property value, you need a seller who is willing to take a second mortgage from you for the other 20% to 30%, to make it a nothing down deal. They get 70% or 80% in cash, and payments for years to come. Since you’ll have two payments, you need to be sure the numbers work.

Another way to buy with none of your own money is to borrow against your home or other property to come up with downpayment. You might borrow for a “vacation,” and leave whatever you don’t spend in your checking account for a while. In this way, you can use it without violating bankers rules about borrowing for a downpayment.

Most towns have a few “note buyers.” These investors buy land contracts, mortgage loans and other “notes” at a discount. When a seller takes a purchase money mortgage from you for $100,000, for example, a note buyer might pay him $85,000 for it. How does that help you or him? I’ll explain with an example.

Suppose a seller prices his property at $195,000, expecting to sell it for $180,000. You offer $205,000 in the form of a mortgage for $160,000, and another for $45,000. As part of the offer, you have arranged for the sale of the first mortgage at closing for $136,000 to a note buyer. The seller gets that cash now, plus payments from you on the second loan for $45,000. $136,000 plus the $45,000 adds up to $181,000, which is about what he expected to get out of the deal.

A Personal Example

At the moment, I’m selling a small rental property, and will recieve payments of $400 per month. The buyer has good credit, and the $5,000 downpayment covers the closing costs and even the legal cost of a foreclosure, if necessary. So at this point, I really don’t care where he gets the downpayment. Suppose he took a $6000 cash advance on a low-interest credit card? This would cost him about $135 per month, and give him enough for the downpayment and his closing costs.

The rent is around $600 per month in this case, so he would be okay. However, in some cases, that extra $135 might cause negative cash-flow. You have to be sure that however you do it, the numbers work. I should mention though, that I would have accepted payments of $350, if he had asked, because it’s the price and the interest rate that mattered to me.

Are ther other methods? You bet. Creative real estate investing is all about making the deal work for all parties. If you can find a way to get the seller what he wants, you can buy with nothing down.

Steve Gillman has invested in real estate for years. To learn more, get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

And if you are an investor, then you too may be wondering which sections of the economy will be the best performers in the near future.

And if you are a real estate investor who is thinking of buying even more real estate in light of the current trends in the real estate markets in the hope that these trends will stay strong for a long time to come, then you might want to pause and consider this …

Will the precious yellow metal become the darling of investors all over the world now?

Well, in case you have not already read about it, gold prices have are at a 25 year high, and it is only in the last few months or so that this metal has become a super star performer …

Considering that gold was called a “barbaric relic” by none other than the great John Maynard Keynes and has long been given up an a benchmark of currency by every country, does it not come as some surprise that the people of the world still choose to love this metal so much that many want to hoard as much of it as they can, even while they can buy other forms of assets?

And if the people are right in choosing gold over other forms of money offered by their Governments, does it imply that people are wiser than their Governments are? And …

Why do people prefer gold to other forms of money anyway?

The first question may best be left unanswered and to answer the second question, we may want to take a look at the factors favoring gold as a shining investment option…

Gold is regarded as a storehouse of value: Gold, unlike other currencies, shows a remarkable tendency to hold its value and is not subject to inflation like most other currencies. Its purchasing power does not seem to diminish with time.

Gold is rare: Gold production rarely grows by more than 2% a year and unlike most other currencies, little can be done to increase its production rate.

Gold is not controlled by Governments: Gold is free from Government control and Governments cannot change the value of gold in any way.

One question to ask now would be…

Can gold prices keep increasing for a long time?

Well, the answer to that question may not be very clear cut. Some analysts feel gold is overbought and its prices may fall soon, some others see a long term bull market for gold regardless of any short term fluctuations in the gold market.

And in case you are really interested in gold and would like to know what could drive gold prices, well…

Here’s one thing that can drive gold prices wild

If people get tired of stocks, mutual funds and currencies which are susceptible to inflation due to any number of things and start looking for a safe haven for their money, then there could be a record influx of capital into gold market as people scramble to hoard as much gold as they can, then this can drive the market to dizzying heights never seen before.

And now, let’s take a look at …

The factors that favor real estate…

With a relatively healthy economy and well paying jobs, more people are now able to realize the dream of owning a home, and this is creating a huge demand for housing.

With the amount of usable land being limited, an increasing population with better paying jobs can mean the housing market will stay healthy for a long time.

But if you want to decide whether to invest in gold or invest in real estate and would like to hear a definitive answer, then you might want to remind yourself that no analysis can claim to be fully accurate … and even the best analysis may be only a little better than a opinion at times …

So when it comes to choosing gold over real estate or the other way around, then only your intuition may be your best guide!

Gurubhakt is a writer who has written several articles on real estate investing. For some of the best luxury real estate, visit http://www.beautifulhomesandproperty.com which discusses a wide range of real estate investment options like Lake Havasu property and more.