Beginning Real Estate Investing - Understanding Market Values

Another in a series of articles on beginning real estate investing. A crucial step to becoming a wise real estate investor is getting to know your local market, and learning to put a value on the properties within your target neighborhoods.

Beginning real estate investing involves learning a new set of skills, one of the most important of which is valuing property. For the limited scope of this article, we?ll limit our discussion to residential single-family and duplex homes.

When you are just beginning real estate investing, it?s helpful to set a goal for yourself to become the market value expert in one or two select neighborhoods. When choosing these neighborhoods, look for locations close to your home with a good selection of homes in the lower-middle to middle price range for your market. This is where you?ll find the best combination of working-class homeowners and what I call ?aspirational? renters- those renters who aspire to homeownership. These will become your best customers.

Once you?ve found one or two of these neighborhoods, start driving through at least twice a week, looking for all real estate activity, including listed sales, For Sale By Owner, auctions, estate sales, vacant property, even moving van activity. As someone who is beginning real estate investing you should get tuned in to the pulse of the neighborhood.

Look for and get to know the local Realtors. Stop in to the Realty offices and introduce yourself. Find out who the most active listing agents are, who sells the most houses, who deals with the most foreclosures, and who works with the investors. These are the best Realtors to work with as you are beginning real estate investing.

Also, beginning real estate investing means getting to know local service people, especially contractors. Talk to as many of these as you can, and find the ones that do a lot of work in your target neighborhood, especially plumbers. Ask them what kinds of recurring problems they see. They will provide you a wealth of information.

Give yourself a timetable to learn property values in your target neighborhood. Three to six months is probably realistic. When you are just beginning real estate investing you will need to work closely with a Realtor. Ask for all the listings in your target neighborhood, and try to see them all. Ask also for the listings of comparable sales (Comps) so you can see what similar properties have sold for recently.

Build a spreadsheet, database, or even just a handwritten notebook so you can refer back to it from time to time. This will become a valuable resource for you as you progress beyond beginning real estate investing. Slowly but surely you will become an expert on property values in your target neighborhoods. You will be able to look at most any property and know, within a few hundred dollars, exactly what it?s market value is. This knowledge will serve you very well as you progress in your real estate investing activities.

For more in-depth information, visit my website and read more about beginning real estate investing.

Now, go make more offers!

How To Get Started In Commercial Real Estate Investing

Commercial real estate investing can be very rewarding for those who take the time and effort to approach it wisely, but it can be a trap for those who rush in without doing their homework properly.

Too often, investors rush into buying a property for all the wrong reasons ? “it’s a good deal,” a “bargain opportunity” and the list goes on. Then they wonder what happened when the investment either goes pear shaped or becomes a full time job.

If you are serious about building significant wealth from commercial property investment, you must have a proper investment strategy. This is a get rich slow business that requires patience, planning and persistence.

The key elements to any property investment strategy are:

* Get your personal financial affairs in order and make sure they are geared towards building wealth, not paying off consumer debt. Also, check your credit rating to make sure it is in order.

* Draw up a list of your criteria for property type, size and location. Be aware that each type of property requires a different set of skills to manage and offers varying rates of return. It is much easier to fit the property to your strengths rather than you try and change to fit the property.

* Study your local market so you can quickly identify opportunities that are within your capacity to act on. It’s no use looking to invest in an area where you don’t have on the ground knowledge.

* Be prepared to study and learn. Once you’ve spotted a possible deal, you need to be able to accurately value a property based on its condition, your return expectation, and your borrowing power. You need to understand why “what is it worth” is the wrong question to ask, and how to answer the right question “what is it worth to me?”

* Last, you need to learn how to structure deals and make offers too good to refuse.

When you have done this homework properly, you will be in a position to act decisively, reap the profits and keep them. Of course, you will need to consult regularly with your accountant on tax planning and asset protection, which are cornerstones of any wealth building plan.

You also need to consider what your overall portfolio will look like. Don’t fall into the trap of buying all sorts of different properties and then end up with it being a full time job as you juggle dealing with evictions, skips, delinquencies, maintenance and bills.

Once your overall planning is done, the next step is to select your real estate team. You will need a good real estate agent, loan officer, tax advisor, and lawyer. These people are critical to your success because the investor with the best knowledge can quickly identify the properties to ignore and those worth considering.

Remember the old adage, “the quick and the dead” ? the speed at which you can close a deal will give you the edge in any type of market. In addition, your advisors can point you in the right direction regarding finance, tax and legal issues.

Also, there is a good reason behind the catch cry, “location, location, value”. You want a return on your dollar so you are looking for a property that requires some attention so you can add value.
One strategy is to buy real estate in up-and-coming area with new developments or renovated properties. This makes it easy to attract and keep good tenants and leads to greater returns.

Another tactic to add value is to buy properties in solid locations but require some maintenance or upgrading, such as improving the aesthetic appeal of the building, thus instantly improving its value with little outlay.

In regard to financing, banks are the most obvious first lender, but commercial loans are not quite as simple as the more commonly known residential loans and you should always seek professional advice from your accountant and legal advisor.

You should also understand the various methods of financing, such as double closing, lease options, and contract for deed.

Double closing has attracted negative publicity lately, but only because it is misunderstood. This is a perfectly legal, moral and ethical method of trading that has been around for 100 years or more.

A double closing is simply two back-to-back closings wherein the proceeds from the second closing are used to fund the first closing. Both closings are done in escrow, so the “middleman” can buy and resell a property for profit without putting up their own cash.

The main downside you have to be careful of is that the closing rarely goes to plan and there are delays of up to a few weeks, which can cause the plan to unravel. Make sure any contract allows for this and you should be covered.

Contract for deed is an agreement whereby the buyer makes installment payments on an arrangement similar to car financing. That is, the seller holds the title to the property while the buyer has the equitable title.

Lease options consist of two elements, the first of which is the lease. This is a contract for use and possession of the property, thus creating a lessor/lessee relationship.

The second element provides a purchase option, which is a unilateral agreement where the seller agrees to give the buyer the exclusive right to the leased property. This is NOT a sale.

Make the effort to prepare your own income and expenses pro formas from the beginning, or get your accountant to do it. Don’t rely on operating results or projections presented by the agent or the seller ? chances are the seller will overstate income and understate expenses, then claim ignorance if challenged.

The only way to know the investment value of what the property is worth to you, is to develop an accurate projection of income and expenses, which can only be obtained by researching the market and determining in advance what the cash flow will be once your investment and management plan is in place.

Also, you need at least a 20-25 % down payment to get access to the best financing terms. You can still get finance on a payment down to 10% but you will pay more interest, loan fees and private mortgage insurance.

Remember, borrowing to cover the majority of your acquisition costs can boost your rates of return, but too much debt expense can be dangerous if the market takes a downturn.

About the Author:

Specializing in commercial and investment real estate, Tony Seruga, Yolanda Seruga and Yolanda Bishop are always searching for new and profitable commercial properties across the U.S. Visit http://www.maverickrei.com for more great information

Real Estate Investing: Rehabs

For an experienced and clever investor, creative real estate investing is a technique that can bring in profits beyond our imagination. Many investors use rehabbing to build fortunes. These investors seek run down, neglected, ugly properties for very less, sometimes lot less than their market value because of their decrepit condition. They then fix the property keeping costs of repair as low as possible, repaint the property, giving them a face lift and manage to sell the property at an amazing price bringing them huge profits!

How to Rehab a Property: This field of investing in real estate is good for experienced and knowledgeable investors not recommended for novices. The investor seeking to rehab a property should study the location as well as the structural design of the house, paying attention to the kind of neighborhood it is located in, shopping facilities as well as transport facilities available in that locale. The investors should have a good idea of the local market, the current land value, must be experienced in rehabbing to judge what needs fixing, the ability to estimate the cost of rehabbing a property, should decide if he wants to rehab it himself or let a contractor do it for him. Consider all aspects to try and get the house at a greater profit and work things out that with minimum costs the property gets to look presentable and try and sell it for its current value or higher. The investor should have a good idea about the latest trends in color and interior decorations spending within a preplanned budget that will help make the rehabbed property more desirable to the buyers. It is better to do the rehabbing yourself as you can significantly lower costs cutting it buy nearly 50% than when a contractor is hired to do the job. It will be better if the investor is trained professionally to fix houses, as he will have a clear idea of the work that needs to be done and how to get it done at lowest costs possible.

Some investors make major money investing in and rehabbing commercial real estate, others are experts in rehabbing obsolete homes and make huge profits by selecting properties near a lake, yet others specialize in rehabbing condos in places, where there is significant demand for condos. Some investors rehab and sell their property at a good profit usually yet others rehab, refinance and rent the property to get better returns on investments. There are investors who acquire homes for say $100,000, rehab it for say $20,000 and sell it for $300,000! The sky is the limit for experienced real estate investors who invest in rehabs!

There are several firms available online to help you with rehabbing properties.

You Can Succeed With Real Estate Investing

You?ve decided you would like to enter into the world of real estate investing, but you?re not sure how to get started. You?re wondering if there are specific things you need to do to achieve real estate investing success. Read on.

For myself and most of the people I know who enjoy real estate investing success, there are a few things we can point to with assurance and say, ?Do these things consistently, and you can succeed. Fail to do them, and you will continue to struggle.? What are they? I have boiled them down to just four.

First, you need to be oriented toward taking action. It?s all well and good to learn and study what others have done, and there?s plenty of material on the internet and elsewhere on how to achieve real estate investing success. You can have too much of a good thing, however, especially when it prevents you from taking action. Only action will get you where you want to go.

Second, you need to conquer the fear that holds you back. Yes, you probably will make a few mistakes along the way, but those who are successful know that they can?t allow their fear of making mistakes to keep them from moving forward. If you?re in the midst of what I call ?fear paralysis? ? shake it off and do something!

Third, the smartest investors I know keep their investing activities simple. By doing that, they maximize their knowledge and limit the possibility and severity of the mistakes they inevitably will make. Real estate investing success, like success in other endeavors, requires mastering the basics, a few simple and repeatable skills that will get you well on the road to the top of the heap.

Fourth, understand your market. Those who enjoy real estate investing success are masters of their local market. How? By taking the same actions over and over they get to know how things work in the market they invest in. They learn market values, who the players are, and what works, as well as what doesn?t work. They become specialists rather than generalists.

Take action, overcome your fear, keep it simple, and understand your market. Apply these four things consistently and you will certainly achieve real estate investing success on a level most people only dream about. That?s how to get started in real estate investing.

Know the Real Estate Industry Before Investing

Although many ruthless brokerages and developers publish information on the profitability of real estate investment that conveys the faulty notion that anyone–even if these wannabe entrepreneurs are deficient in either start-up capital or mental capacity–real estate investment is not suitable for everyone. Popular myths lead the na?ve public to believe that investing in today’s hot real estate market guarantees overnight profit, but earning a significant cash flow from an investment property is only a possibility for experienced and/ or educated investors well versed in the truth about the real estate market and the steps they must follow to obtain success.

Prospective investors must carefully research the property they’re interested in, and learn everything about the local market, its trends, and investment returns on properties similar in price and quality to gauge the profit potential of the property in question. The ability to finance the investment–and have enough money left over in case the investment backfires–is essential for obvious reasons. Real estate investing is not a surefire get-rich-quick scheme (these do not exist), nor is it a gamble on a table with a minimum of $5. Real estate investment requires a significant amount of start-up capital and enough money in savings to provide a cushion, but savvy investors are constantly finding ways–via working with reputable brokerages and obtaining good financing plans–to minimize down payment costs.

Different types of investment properties are suited to investors with different goals for their investments and the amount of time and energy they wish to devote to the properties. The length of time the investors wants to hold the property is an essential variable to consider, as both options yield great potential for profit with varied amounts of time and effort devoted to maintaining the properties in question. Investors also must choose between commercial or residential investment and carefully research the sub-categories within these two general investment options.

Although learning all about the real estate market to invest with knowledge is the most important aspect to achieve success in the real estate investment market, acting quickly is also essential. Buying before the competition is key to getting the best deals and selling quickly is just as important to avoid having to pay a second mortgage on an investment property that is difficult for most people to afford. Joining with a respected, experienced brokerage allows a novice investor to purchase expertise that can help make the most profitable investments as quickly as possible while the market is still hot.

About the Author

YAERD offers real estate investing advice, Hernando Preconstruction information, and tips to new and veterans in the real estate industry. You will also find information on Jroberts New Construction Homes, and Florida Spec Homes.

Real Estate Investing In Multi-Family Apartments

Some investors find investing in multi-family apartments rewarding as they yield more long-term returns. An average individual investor cannot invest in multi-family apartments by himself; they make use of specialized REIT?S to do it for them or form a partnership with an experienced associate as it takes up time and needs an experienced person to see to the due-diligence, to take control and manage the property wisely.

Tips on How to Invest In Multi-Family Apartments:

It is necessary to identify a stable, profitable multi-family apartment, have a good idea of the local market and the have the ability to estimate the land value as well as the building value properly.

It is essential to make a financial as well as marketing analysis of the property.

Present a well thought out irresistible offer to the seller once you have made sure the necessary finances are in order.

Proceed with the due diligence and not be satisfied until you have studied in detail every document relating to the building and the maintenance of its equipments etc. The title deeds, tax returns of last 3 years if possible, insurance policies, financial records, information of any existing liens, all leases and all contracts for equipment maintenance, parking lot contracts, all utility bills, fire systems, litigation history, tenant and associated problem records etc. will be appraised. Engineering inspection, environmental inspection etc. will be conducted on site.

Have an attorney study all the documents and explain them to you.

Once the due diligence matters have been cleared it is time to bargain for as low a price as possible and legally purchase the property if it suits your needs and seems a profitable venture.

Try, and get a triple net multi-family apartment, as it could be a hassle-free investment as the owner just has to receive monthly rental checks and does not have to worry about maintenance etc. as the tenants are in charge of that!

People like investing in multi-family apartments because of increased cash flow, competition is less, if indeed you are in charge of maintenance because of the big cash flow it will be easier to hire a manger to take care of the property and deal with its problems. Multi-family apartments are also in demand because the property appreciates better than a single-family property. Some creative real state investors make fortunes rehabbing run down condos and giving them a face-lift! Thus, multi-family apartments are ideal suited for those who have large sums of money on hand to buy and invest in high yielding properties. They should have the expertise to deal with tenants and collecting rents on time and know what action to take incase the tenant defaults on payments.

There are firms offering products as well as services to help run businesses successfully.

Beginning Real Estate Investing - Understanding Market Values

Another in a series of articles on beginning real estate investing. A crucial step to becoming a wise real estate investor is getting to know your local market, and learning to put a value on the properties within your target neighborhoods.

Beginning real estate investing involves learning a new set of skills, one of the most important of which is valuing property. For the limited scope of this article, we?ll limit our discussion to residential single-family and duplex homes.

When you are just beginning real estate investing, it?s helpful to set a goal for yourself to become the market value expert in one or two select neighborhoods. When choosing these neighborhoods, look for locations close to your home with a good selection of homes in the lower-middle to middle price range for your market. This is where you?ll find the best combination of working-class homeowners and what I call ?aspirational? renters- those renters who aspire to homeownership. These will become your best customers.

Once you?ve found one or two of these neighborhoods, start driving through at least twice a week, looking for all real estate activity, including listed sales, For Sale By Owner, auctions, estate sales, vacant property, even moving van activity. As someone who is beginning real estate investing you should get tuned in to the pulse of the neighborhood.

Look for and get to know the local Realtors. Stop in to the Realty offices and introduce yourself. Find out who the most active listing agents are, who sells the most houses, who deals with the most foreclosures, and who works with the investors. These are the best Realtors to work with as you are beginning real estate investing.

Also, beginning real estate investing means getting to know local service people, especially contractors. Talk to as many of these as you can, and find the ones that do a lot of work in your target neighborhood, especially plumbers. Ask them what kinds of recurring problems they see. They will provide you a wealth of information.

Give yourself a timetable to learn property values in your target neighborhood. Three to six months is probably realistic. When you are just beginning real estate investing you will need to work closely with a Realtor. Ask for all the listings in your target neighborhood, and try to see them all. Ask also for the listings of comparable sales (Comps) so you can see what similar properties have sold for recently.

Build a spreadsheet, database, or even just a handwritten notebook so you can refer back to it from time to time. This will become a valuable resource for you as you progress beyond beginning real estate investing. Slowly but surely you will become an expert on property values in your target neighborhoods. You will be able to look at most any property and know, within a few hundred dollars, exactly what it?s market value is. This knowledge will serve you very well as you progress in your real estate investing activities.

For more in-depth information, visit my website and read more about beginning real estate investing.

Now, go make more offers!

Real Estate Investing In Multi-Family Apartments

Some investors find investing in multi-family apartments rewarding as they yield more long-term returns. An average individual investor cannot invest in multi-family apartments by himself; they make use of specialized REIT?S to do it for them or form a partnership with an experienced associate as it takes up time and needs an experienced person to see to the due-diligence, to take control and manage the property wisely.

Tips on How to Invest In Multi-Family Apartments:

It is necessary to identify a stable, profitable multi-family apartment, have a good idea of the local market and the have the ability to estimate the land value as well as the building value properly.

It is essential to make a financial as well as marketing analysis of the property.

Present a well thought out irresistible offer to the seller once you have made sure the necessary finances are in order.

Proceed with the due diligence and not be satisfied until you have studied in detail every document relating to the building and the maintenance of its equipments etc. The title deeds, tax returns of last 3 years if possible, insurance policies, financial records, information of any existing liens, all leases and all contracts for equipment maintenance, parking lot contracts, all utility bills, fire systems, litigation history, tenant and associated problem records etc. will be appraised. Engineering inspection, environmental inspection etc. will be conducted on site.

Have an attorney study all the documents and explain them to you.

Once the due diligence matters have been cleared it is time to bargain for as low a price as possible and legally purchase the property if it suits your needs and seems a profitable venture.

Try, and get a triple net multi-family apartment, as it could be a hassle-free investment as the owner just has to receive monthly rental checks and does not have to worry about maintenance etc. as the tenants are in charge of that!

People like investing in multi-family apartments because of increased cash flow, competition is less, if indeed you are in charge of maintenance because of the big cash flow it will be easier to hire a manger to take care of the property and deal with its problems. Multi-family apartments are also in demand because the property appreciates better than a single-family property. Some creative real state investors make fortunes rehabbing run down condos and giving them a face-lift! Thus, multi-family apartments are ideal suited for those who have large sums of money on hand to buy and invest in high yielding properties. They should have the expertise to deal with tenants and collecting rents on time and know what action to take incase the tenant defaults on payments.

There are firms offering products as well as services to help run businesses successfully.

Beginning Real Estate Investing - Understanding Market Values

Another in a series of articles on beginning real estate investing. A crucial step to becoming a wise real estate investor is getting to know your local market, and learning to put a value on the properties within your target neighborhoods.

Beginning real estate investing involves learning a new set of skills, one of the most important of which is valuing property. For the limited scope of this article, we?ll limit our discussion to residential single-family and duplex homes.

When you are just beginning real estate investing, it?s helpful to set a goal for yourself to become the market value expert in one or two select neighborhoods. When choosing these neighborhoods, look for locations close to your home with a good selection of homes in the lower-middle to middle price range for your market. This is where you?ll find the best combination of working-class homeowners and what I call ?aspirational? renters- those renters who aspire to homeownership. These will become your best customers.

Once you?ve found one or two of these neighborhoods, start driving through at least twice a week, looking for all real estate activity, including listed sales, For Sale By Owner, auctions, estate sales, vacant property, even moving van activity. As someone who is beginning real estate investing you should get tuned in to the pulse of the neighborhood.

Look for and get to know the local Realtors. Stop in to the Realty offices and introduce yourself. Find out who the most active listing agents are, who sells the most houses, who deals with the most foreclosures, and who works with the investors. These are the best Realtors to work with as you are beginning real estate investing.

Also, beginning real estate investing means getting to know local service people, especially contractors. Talk to as many of these as you can, and find the ones that do a lot of work in your target neighborhood, especially plumbers. Ask them what kinds of recurring problems they see. They will provide you a wealth of information.

Give yourself a timetable to learn property values in your target neighborhood. Three to six months is probably realistic. When you are just beginning real estate investing you will need to work closely with a Realtor. Ask for all the listings in your target neighborhood, and try to see them all. Ask also for the listings of comparable sales (Comps) so you can see what similar properties have sold for recently.

Build a spreadsheet, database, or even just a handwritten notebook so you can refer back to it from time to time. This will become a valuable resource for you as you progress beyond beginning real estate investing. Slowly but surely you will become an expert on property values in your target neighborhoods. You will be able to look at most any property and know, within a few hundred dollars, exactly what it?s market value is. This knowledge will serve you very well as you progress in your real estate investing activities.

For more in-depth information, visit my website and read more about beginning real estate investing.

Now, go make more offers!

Is Real Estate Investing still solid in todays market?

Opportunities to make big, quick profits in residential real estate tend to come and go in cycles. When a local market is hot, families may find it possible to buy a house at an attractive price, fix it up, and watch its value rise in just a few years.

When the same local market is at the low end of the appreciation cycle, reaping a profit on the family home can take a good deal more time but the reward can be just as satisfying if price and location and carefully considered.

Even in uncertain economic times like these, history shows that real estate is one of the soundest investments a family can make. During the Great Depression of the 1930s when the stock market plummeted as much as 89 percent, housing prices dropped only 39 percent. According to most of the research on housing trends, prices continually stay at the same level as, and most often appreciate faster than, the rate of inflation. Housing prices actually rose an average of 10 percent during the recessions of the mid-1970’s and early 1980s.

CENTURY 21 statisticians report that the rate of home appreciation since 1990 has been around five percent nationally, with inflation hovering around four percent. Homeowners, obviously, are still staying ahead in the real estate game on average.

And, with mortgage interest rates the lowest they’ve been in two decades, real estate today is a more attractive investment than it’s been in years.

First-time buyers are the big winners in this environment. Drawing up a budget can help you and your family decide on what you can afford. Once you’ve determined a price and picked your desired community, shop around to find the best house you can buy for your money. This strategy can help you realize greater appreciation two or three years down the road.

This is also a good time to purchase a second or vacation home. A bargain cabin in the woods today might bring an excellent return when housing prices move upward. Affordable second-home prices also allow you to purchase a vacation home that can serve as a stepping-stone to a larger retreat in the future.

But appreciation isn’t the only advantage to buying a home. The federal government thinks home ownership is so important to the future of our country that it allows mortgage interest to remain the last substantial tax shelter for families. Owners can also take deductions on their property taxes. And, the profit on the sale of your home remains tax free as long s you buy a house for a greater or equal price.

So before you decide that this is not a good time to invest in residential property, re-examine the financial benefits of owning your own home and put them to work for you.

About the Author

Joaquin Fagundo is a part time real estate investor and operator of www.browsedaily.com a website devoted to new and experienced real estate investors.

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