As the aim of the wealth-creation game is to
control not own assets, the single main mistake you can make in real estate is
to buy possessions in your own name. It is always wise to think the reasons why
property investment in a corporation or business name is perhaps a smarter
alternative.
While it may be cheaper to buy assets in the
name of a person, purchasing an investment property in your own name has the
potentially risky effect of mixing your personal and investment assets. As such,
if you are sued by a tenant, all of your private assets may be up for grabs. If
you are sued personally then all your investment assets will likely be at risk
also.
The end result is that you could work
extremely hard for many years to build up substantial personal wealth only to
lose it all too some unfortunate event. When property is purchased in your own
name, the credit will also be registered in your own name.
Once you have reached your borrowing edge, it
won't matter how many other lenders you approach, they will all consider your condition
the same way because they all apply the same rules to the lending evaluation. JeffAdams Scam prevention strategies provide effective ideas to all in the real
estate field. The banks will look at how much debt you are previously carrying
and it won't take them long to conclude that you're already at your limit.
The truth is though; if you had been properly
structured in the first place you could avoid this problem all together. If you
are set up correctly for borrowing you should be able to borrow against your
income and asset statement over and over again, not just once. The secret is to
carry the investment debt as a guarantor rather than in your own name. This
way, when you max out with a lender you can head up the road to the next one
and start all over again.
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