Real estate investing: 2 Manuscripts – How to Become a Real Estate Investor – Real Estate Investment by Henderson A. Fiddler

Chapter One: Real Estate 101
Knowledge is power and with real estate investing the more knowledge you
have, the more successful you can be. You don’t need a college education to
hold a diverse, performing portfolio; however, knowledge of how the
market works and knowing the demographics will help tremendously for
making solid investments.
Many interested in the possibility of investing in the real estate market have
likely read about Warren Buffet, Tony Robbins and Jason Hartman, all
successful real estate gurus. While they each have their own secrets to
success, they are cashing in on the most tax-favored asset in the worl d —
income property.
These three real estate gurus, and many more, started at the beginning.
Diving into the market without first learning the how-to’s is too big a risk to
take, especially if you’re investing your retirement fund. You need to be on
solid ground and that means knowing everything there is to know about real
estate investing.
This book will teach you how to be a savvy real estate investor and build a
diverse portfolio without breaking the bank.
The importance of Real Estate Investment Education
Understanding key terms
The first step for new investors is to learn the terminology used in real
estate. Adjustable rate mortgage, amortization, appraisal, contingencies,
equity, and private mortgage insurance are some of the words frequently
used in real estate transactions.
Knowing the jargon is important so when brokering your first deal,
everything is understood. Real estate closings can be complicated, with a lot
of legal talk and plenty of paperwork to read over and sign. Although most
investors have a lawyer to handle closings, you’ll still need to sign all the
necessary paperwork and understand exactly what you’re signing and why.
An example of the importance of understanding the terminology can be
found with private mortgage insurance, more commonly known as PMI.
This insurance is a monthly premium tacked onto a mortgage to guarantee
the loan. PMI insurance is often required when the lender has an average or
below average credit score.
If you sign an agreement you don't understand, it can put your investment
portfolio in jeopardy, therefore knowing exactly what is said and what is
signed is paramount.
The following are words you will frequently hear:
Adjustable-rate mortgage
An adjustable-rate mortgage means the interest rate can change over the
course of the loan at five, seven, or ten year intervals.
Amortization
Amortization combines interest and principal into monthly payments, rather
than paying off the interest at the start.

Real estate investing: 2 Manuscripts – How to Become a Real Estate Investor – Real Estate Investment by Henderson A. Fiddler