Important beginner questions from overseas! - Posted by Asaf

Posted by PJ on September 14, 2004 at 24:54:51:

approximate interest rate for HELOC will be around 5% or 6% right now - depends on what rate the US govt. sets.

My HELOC is Prime + .5% , which is total of 4.5% for now.

If I were you, I would definately get a JOB when you move to US and get settled in for a year or so before you get into any business.

You have a LOT to learn about the country, US laws n regulations, not to mention real estate investing

If you can get a MBA at Harvard - I say go for it! You will always have time later to work on REI

Important beginner questions from overseas! - Posted by Asaf

Posted by Asaf on September 12, 2004 at 12:22:00:


My name is Asaf and I`m from Israel.

Im 21 years old right now, studying for a Bachelors degree in Law & Economics.

In a couple of years when I get my degree, my wife and I are moving to the US (she is a

citizen), and we plan to get into the real estate investing “business”.

Now, living in Israel, Im afraid there are some basic things I dont know, and was

wondering if you could enlighten me…

  1. What is a LEASE OPTION?

  2. What is a “Section 8 tenant”?

  3. What is a MOBILE HOME (…)? Is it the same as a trailer?

  4. What does “taking a line of credit against your house” mean? do you get that easily?

  5. Final and most important question - reading the success stories in this and other

websites, and Robert Kiyosakis books, Im left to wonder - is it really that easy to get

started and become wealthy in the Real Estate business in the US?

Thanks so much,


Re: Important beginner questions from overseas! - Posted by ifindyoubuy

Posted by ifindyoubuy on September 12, 2004 at 20:46:43:

Hello Asaf:

Although it’s listed on this site, I’ll answer as many as I can.

  1. A Lease Option is basically controlling without owning…that means that the owner controls (has rights to it) the property, but doesn’t own up to (or isn’t responsible for)the expenses that the property incurs. The Tenant aka Buyer is responsible for all expenses. It’s also referred to as a “Rent to Own.”

  2. A Section 8 Tenant is one who receives assistance for rent or mortgage. The Government pays it. Section 8 is perfect if you want to collect top dollar for rent/mortgage payments. Just be sure to check out the Tenant.

  3. Yes, a mobile home is a trailer.

  4. A line of credit is also known as a HELOC (Home Equity Line of Credit). Yes,it’s easy to get as long as your credit is good and there’s equity in your home. It’s like having a credit card based on your home’s worth.

  5. I’m not familiar with that course. I can tell you that it’s hard work. It’s not an overnight cash out. Nonetheless, when you become good at it, you’ll make the money. Education is everything. The more you know…the more your pocket grows.

Hope this helps.

Re: Important beginner questions from overseas! - Posted by Roy-hi

Posted by Roy-hi on September 12, 2004 at 20:13:53:

Hi Asaf ,
I too am a new to this. The answer you are looking for, are all on this website. If you look in the “How To Section”. As you start to read more of this site you will start to get a better understanding of the real estate buisness. After you have finished reading that section all your questions would have been answered many time’s over. What i have done, while reading is to save the post that i found informative, so i can re read then at a later date. Reading the "How To Section " took me about a month and a half with putting in an hour or two each day.

Good Luck

Re: Important beginner questions from overseas! - Posted by Asaf

Posted by Asaf on September 13, 2004 at 09:36:10:

Thanks for the answers.

Another question though - what`s the approximate interest rate of the Home Equity loan? If I take one, when do I need to pay it back?

The reason why I asked if its “easy” to become successful in Real Estate in the US is that Im not really sure what to do after I finish my degree…
Like I said it will be a Law & Economics degree, but the problem is that the LAW part wont be worth much in the US (I didnt do college and its not a J.D. - so I understand no one will hire me as a lawyer?). Well have about $20K when well get to the US, and Im asking myself if I should just get a job (something to do with Economics) that will not pay much but will leave me free time to try to get started with real estate, or maybe I should get an MBA at Harvard or something, work for a few years, save the big money and then start investing seriously? thats why I asked if it was “easy”…

Is it true that in the US the bank will give you a mortgage (if you have good credit) based on the PROPERTYs value and not your own equity? if thats true you don`t need any money - just the time and dedication to find good deals?

Thanks again,


yes you do need money to get a mortgage - Posted by PJ

Posted by PJ on September 14, 2004 at 24:57:41:

US Banks will give you a mortgage on a property based on value of property - usually 95% of value for a house u will be living in as a primary residence. You will come up with a minimum of 5% as cash down payment - which could be $20,000 easily on a nice house

For investments, banks will loan only 80% of the value, meaning you have to come up with 20% CASH as downpayment.