How To Build A Million Pound Property Portfolio
Looking to quickly build a million pound property portfolio? You could try a high risk and speculative technique that has been used over recent years by investors hoping to make big profits from property.
The technique relies on re-mortgaging and negotiating good discounts on off-plan property to take a ?50,000 deposit and turn it into a million pound property portfolio within a couple of years or less.
How does it work?
The technique only works in areas where house prices are rising fast and opportunities exist to purchase off-plan properties, where discounts of up to 15% are not uncommon.
Investors begin by purchasing one or two off-plan properties. These are properties that are not yet fully developed or have only just received planning permission. Developers tend to offer larger discounts to people who are prepared to buy properties at this stage of the build.
On completion, the investor will refinance the properties. A combination of rising house prices and the discounts gained at purchase, ensure that the property is refinanced at a higher figure than the original purchase price. The extra money gained through refinancing is then be used as a deposit for another two properties.
This cycle will be repeated a number of times by the investor until they have built up a strong portfolio of investment properties, with a combined value of more than a million pounds.
High-risk strategy
Sounds easy, so why doesn't everyone do it? Although many investors have made a lot of money using this technique over recent years, it does contain a very high element of risk and relies on a number of market conditions being right.
Potential obstacles include:
-- Falling house prices
-- Inability to obtain genuine off-plan discounts
-- Poor quality or undesirable developments
-- Difficulty in finding tenants to maintain rental income that in turn pays the mortgage costs
-- Potential capital gains tax problems if the properties are sold
Further advice
Before deciding to use this property investment technique, it is essential to get further advice on the legal, tax and financial issues.
A number of property investment companies exist to help advise their members on these very speculative investments, but be wary of the less scrupulous companies that charge their members ?1,000s to attend seminars or build portfolios on their behalf..
Escrow Accounts - Are You Paying Too Much?
Money in escrow is "dead money". It doesn't earn interest for you and it doesn't reduce your mortgage interest payments. Therefore every cent in your escrow account is costing you money. Make sure there is no more tied up in escrow than there needs to be!
Here is a brief summary of what lenders can and cannot do regarding escrow. I'll also explain how to check your own escrow account to make sure you are not paying too much.
State laws vary; you should consult your own attorney to determine what your local laws allow.
The way lenders handle escrow is regulated by the Federal Real Estate Settlement Procedures Act, which applies to all "federally related mortgage loans".
Unless local law says otherwise, at settlement the lender can require a borrower to deposit funds in an escrow account set up for the payment of taxes or insurance premiums. The sum deposited cannot exceed the actual amount of the taxes 
Mortgage calculator > Escrow Accounts - Are You Paying Too Much?
Houston Mortgage Companies
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Houston based companies offer home refinancing, home equity loans and pre-qualification for your mortgage. These companies also allow lucrative mortgage schemes, like a conventional Mortgage (Fannie Mae) that is not guaranteed or insured by the Federal Government; FHA that is insured by the Federal Housing Administration against default, and VA that is guaranteed by the Department of Veterans Affairs against default.
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