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Tags: Agreement Contract, Banks, Condos, Construction Value, Developer, Good Understanding, Handsome Profit, Home Buyers, Investment Strategy, Magnitude, Money, Naked Eyes, Nbsp, Pre Construction, Profitable Investing, Purchase Agreement, Real Estate Investing, Real Estate Investors, Risk And Reward, Unit Condominium Development
Three things that you need to know to succeed
Are you new to the world of real estate investing? There are many key points involved in real estate investment that can help you make your deals more profitable. Real estate investing is all about facing the challenges and pitfalls you may encounter along the ways. If you are new to this venture there is definitely a lot to learn. Once you have groomed yourself and have gained some experience, you can become the master of the art and can surely make more profits.
Here are some useful Real estate investing tips
1. Selecting a right location:
Selecting a right location is very important to achieve success in your real estate investment deals. The better the location, the better the chances that the value of your property will increase over time. It would be advisable to select a location where the demand for the property is high and the property prices are always rising. You need to consider many prospects before selecting a location for your real estate. One of the key points you have to consider is about the major developments that are planned for the area in the future.
2. Pay Market Value:
Never pay more for a property than what it is worth. It is very important to access the market value of a property before you actually consider buying it. Buying a property in a good location can be a good option as you can expect the value to double every 7 to 10 years. You can also ask an agent on information on price growth in a suburb.
3. Attracting tenants:
One of the most important point you need to consider while buying a property is whether it will attract tenants or not. It would be advisable to buy a property in an attractive location where other people wants to live as tenants. You need to put yourself in the tenant’s position as to what they will consider buying from you. You need to work out on certain points to attract tenants this includes good access to transportation, education facilities, health, community facilities and adequate parking.
Copyright ? 2006 Joel Teo. All rights reserved.
About the Author
Joel Teo writes on arizona estate goodyear investment real . Learn more about Property Investment by signing up for his free Property Investment Ezine
Tags: 10 Years, Attractive Location, Buying A Property, Challenges, Important Point, Investing Tip, Investment Help, Lot, People, Pitfalls, Profitable Investing, Profits, Prospects, Real Estate Investing, Real Estate Investing Tips, Real Estate Investment, Real Estate One, Suburb, Success, Useful Real Estate
Don’t you just love finding money where you didn’t expect it? Real estate investing with RRSP’s is a whole lot better than finding a twenty dollar bill in your old jacket, and much more profitable!
We have to start thinking like the bank and realize that profit is not a dirty word. We put our funds into a safe savings account at the bank and they go about making money by investing it while giving us a ridiculously low return on those funds. Why not skip the middleman and do the investing yourself? Your first thought will be “I don’t have that kind of money!” That is where your found money comes in. If you have Registered Retirement Savings Plan money you can use it, to fund a mortgage or investing loans with a far better return than the bank will give you. If your RRSP money is not in a Self Directed form you will have to make that your first step in this investing journey. Your agent will help you make this transition (although he probably won’t like it very much!).
There are a few options in the way you want to go about using this investment vehicle and what you choose will determine who can help you on the road to profitable investing. Most financial institutions will have a mortgage pool that you can opt into. It is kind of a slush fund where everyone who is interested puts their money into the same pot and then the bank takes money out of that pot and invests it in various real estate properties. Those investors share in the profits or losses accordingly. Most RRSP funds are based in the mutual funds market but historically you will get a much better return on your money in this mortgage pool fund. However, there is still a more profitable option if you look a little further.
You can put up a second mortgage loan on a property and realize profit in the form of up to 15% return on the use of your money. When was the last time your bank offered you a deal like that? You can invest in properties that you yourself buy or you don’t have to buy the property yourself but rather use the mortgage loan as your form of investing and let a sophisticated investor do the rest. The Alberta Real Estate Investment Network is a good place to find a reputable investor so that you can start seeing a healthy return on your funds. www.albertarein.com
Real estate investment in Alberta is a goldmine right now as the market is red-hot and provides a fantastic vehicle to help build your future. There are many options available to you as an investor and it is important to do your due diligence in investigating each one. Look at what is being offered and then spend some time finding out about it and seeing if it is right for you. It takes a shift in your investing mindset to step out of the norm and what we have come to expect as acceptable returns on our money and venture into a new and profitable way of thinking. We haven’t been taught about our options but have mostly followed the banks with the rest of the sheep who took a meager return on the chin thinking we had no other choices. Your savings account at the bank is safe but a poor vehicle to realize financial freedom or the dreams that freedom can bring. You can make money like the banks do. Property investment in the form of purchasing property or a mortgage loan is a good way to make a profit far better than your savings account will give you. You owe it to yourself to look into it.
About the Author
Rhonda Hoffman is a successful author and regular contributor to www.iwebinvestor.com
Tags: Dirty Word, Dollar Bill, Financial Institutions, First Thought, Investment Vehicle, Middleman, Money Investing, Mortgage Loan, Mortgage Loans, Mortgage Pool, Mutual Funds, Plan Money, Pot, Profitable Investing, Profits, Retirement Savings Plan, Second Mortgage, Slush Fund, When Was The Last Time, Whole Lot
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What Is Pre-construction Real Estate Investing?
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| Submitted By: Karen Kusumakar |
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Investing in pre-construction real estate is one of the most profitable investing opportunities available in the market today. Even though it?s a fairly old strategy, very few investors have a good understanding of it. Preconstruction real estate investing can be best explained with an example:
A developer is planning to build a 100 unit condominium development in a very popular location. The developer has already worked out the numbers and thinks that the project will make a handsome profit. Since he doesn?t have the required amount of capital to complete a project of such magnitude, he approaches banks to request financing.
But before banks lend out millions of dollars to the developer, they want to know that the project has the potential to sell after completion. Since there is no way to know the future and banks like to reduce risk as much as possible, they require the developer to pre-sell a certain number of the units (usually 25%-50%) before they will lend money. In this example a bank agrees to finance the developer if 40% of the units are sold before construction begins.
There are very few home buyers who are going to commit to buying something without actually seeing it with their naked eyes. So the developer has no choice but to approach real estate investors who understand the risk and reward of such ventures. In order to reward these investors for their risk, the developer gives them a 10% discount off the appraised value (after construction value) of the condos if they sign a purchase agreement (contract).
This creates a win-win situation where the developer is able to secure financing and the investors are able to get built-in equity by getting the property below appraised value. The investors who buy these condos before the construction is completed are called pre-construction investors, and this investment strategy is called preconstruction investing.
In this example it was a development from the ground up, but the term ?pre-construction investing? can be used for any purchase made before the actual completion of a real estate development. The development may be from ground up or just a renovation project i.e. A condo conversion project where preconstruction investors buy before the renovation is complete is also an example of pre construction investing.
In general, pre construction pricing is 5% - 15% lower than the market value of the finished property. Sometimes the developer may offer other financial incentives instead of a price discount. Some examples include cash back after closing, closing cost credit, free upgrades, rental guarantee or lease back, paid property taxes, waive assessments waived, management fees waived, etc. However, in most cases the developer will offer a combination of a price discount and other financial incentives in order make the deal sweeter for preconstruction investors.
After the construction or renovation is complete, pre construction investors? have two options to exit. Either they sell their property and make a quick profit, or they can hold the property as a long term investment and build equity. Sometimes investors can also profit by assigning the contract to a fellow investor for a small profit even before assuming title to the property.
Below is summary of the process of preconstruction investing:
The pre construction investor buys a house, condo or townhouse from a reputed developer in the preconstruction phase at a price discount and/or other financial incentives.
The pre-construction investor waits for the construction or renovations to be completed.
After completion of the construction or renovation, the preconstruction investor sells the property immediately for a profit. Or the pre construction investor holds the property to build additional equity due to appreciation and by paying off principal using the rental income. In some cases, exit by assignments is also possible.
Article Tags: investors, preconstruction, property
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Tags: Agreement Contract, Banks, Condos, Construction Value, Developer, Good Understanding, Handsome Profit, Home Buyers, Investment Strategy, Magnitude, Money, Naked Eyes, Nbsp, Pre Construction, Profitable Investing, Purchase Agreement, Real Estate Investing, Real Estate Investors, Risk And Reward, Unit Condominium Development
We’ve seen all the claims that have been made by many late night real estate informational gurus. They all talk off making thousands of dollars when you buy a property. But is it really possible? Is it really possible to buy a house and pay no money down and walk away with cash at the closing table?
It’s because of these late night infomercials that no money down real estate to pull cash out at closing has become one of the most sought after topics on the net and late night television. Most everyone has seen these commercials or even bought these real estate investing courses. Most of these courses get filled with dust, then to only find their way to the yard sale. Now, you may be asking, ” is it really possible and if so, how’s it done?”
Honestly, the one technique that gets talked about the most is the least creative way to do a deal and the most risky. There are many more profitable ways to real estate investing without the personal risk and the liability. See, what happens is you find an undervalued property, then you go to the bank to acquire financing. Many lenders will loan 80% of the appraised value on real estate investments. Many investors will then borrow the 80% even if they only paid 65% of the fair market value of the property. The crucial factor that investors must realize is that this is borrowed money and you can’t live off of borrowed money. Also, you are personally guaranteeing that you will pay back the loan. Therefore, if something goes wrong, then you are on the hook with the bank.
Not only is this very possible to pull cash out when you buy, this one method to real estate investing could be the single worst mistake that investors make when buying properties. It’s a financial disaster waiting to happen. See, when you buy to pull cash out at the closing table, you are pulling the equity out of the deal. The equity is the value of the property beyond what is owed against the property. When an investor buys a property using this method, they are truly risking their financial stability because they trust that properties will always go up in value. This myth couldn’t be farther from the truth. Most don’t even care to think about “what if the fair market value goes down? Or what if the tenants that I have completely destroys the home?”
So, are there other ways to create profitable real estate deals?
The answer is a very loud “YES”. There are numerous ways to hedge your risk of these scenarios while you avoid personal liability and financial risk all together. You should seek out a mentor or a trainer that will show you the ins and outs to real estate investing without costing you a fortune. Also, when you decide to use a mentor or buy a course of any kind, you should look at what the guru’s previous students have to say before you decide to give up your hard earned money. We’ve outlined the most popular real estate gurus and allow real life consumers to give reviews on many of the top real estate investing programs selling today. To read these reviews, then go to www.101Gurus.com.
About the Author
Discover what others have to say about the Real Estate Investing Gurus as you read the latest Real Estate Course Reviews by visiting http://www.101gurus.com
Tags: Commercials, Estate Investing Courses, Financial Disaster, Hook, Investor, Investors, Late Night Television, Lenders, Mistake, Money Cash, Night Infomercials, Personal Risk, Profitable Investing, Real Estate Investing, Real Estate Investing Courses, Real Estate Investing Gurus, Real Estate Investments, Thousands Of Dollars, Yard Sale
Three things that you need to know to succeed
Are you new to the world of real estate investing? There are many key points involved in real estate investment that can help you make your deals more profitable. Real estate investing is all about facing the challenges and pitfalls you may encounter along the ways. If you are new to this venture there is definitely a lot to learn. Once you have groomed yourself and have gained some experience, you can become the master of the art and can surely make more profits.
Here are some useful Real estate investing tips
1. Selecting a right location:
Selecting a right location is very important to achieve success in your real estate investment deals. The better the location, the better the chances that the value of your property will increase over time. It would be advisable to select a location where the demand for the property is high and the property prices are always rising. You need to consider many prospects before selecting a location for your real estate. One of the key points you have to consider is about the major developments that are planned for the area in the future.
2. Pay Market Value:
Never pay more for a property than what it is worth. It is very important to access the market value of a property before you actually consider buying it. Buying a property in a good location can be a good option as you can expect the value to double every 7 to 10 years. You can also ask an agent on information on price growth in a suburb.
3. Attracting tenants:
One of the most important point you need to consider while buying a property is whether it will attract tenants or not. It would be advisable to buy a property in an attractive location where other people wants to live as tenants. You need to put yourself in the tenant’s position as to what they will consider buying from you. You need to work out on certain points to attract tenants this includes good access to transportation, education facilities, health, community facilities and adequate parking.
Copyright ? 2006 Joel Teo. All rights reserved.
About the Author
Joel Teo writes on arizona estate goodyear investment real . Learn more about Property Investment by signing up for his free Property Investment Ezine
Tags: 10 Years, Attractive Location, Buying A Property, Challenges, Important Point, Investing Tip, Investment Help, Lot, People, Pitfalls, Profitable Investing, Profits, Prospects, Real Estate Investing, Real Estate Investing Tips, Real Estate Investment, Real Estate One, Suburb, Success, Useful Real Estate
| |
What Is Pre-construction Real Estate Investing?
|
| Submitted By: Karen Kusumakar |
| |
| |
|
Investing in pre-construction real estate is one of the most profitable investing opportunities available in the market today. Even though it?s a fairly old strategy, very few investors have a good understanding of it. Preconstruction real estate investing can be best explained with an example:
A developer is planning to build a 100 unit condominium development in a very popular location. The developer has already worked out the numbers and thinks that the project will make a handsome profit. Since he doesn?t have the required amount of capital to complete a project of such magnitude, he approaches banks to request financing.
But before banks lend out millions of dollars to the developer, they want to know that the project has the potential to sell after completion. Since there is no way to know the future and banks like to reduce risk as much as possible, they require the developer to pre-sell a certain number of the units (usually 25%-50%) before they will lend money. In this example a bank agrees to finance the developer if 40% of the units are sold before construction begins.
There are very few home buyers who are going to commit to buying something without actually seeing it with their naked eyes. So the developer has no choice but to approach real estate investors who understand the risk and reward of such ventures. In order to reward these investors for their risk, the developer gives them a 10% discount off the appraised value (after construction value) of the condos if they sign a purchase agreement (contract).
This creates a win-win situation where the developer is able to secure financing and the investors are able to get built-in equity by getting the property below appraised value. The investors who buy these condos before the construction is completed are called pre-construction investors, and this investment strategy is called preconstruction investing.
In this example it was a development from the ground up, but the term ?pre-construction investing? can be used for any purchase made before the actual completion of a real estate development. The development may be from ground up or just a renovation project i.e. A condo conversion project where preconstruction investors buy before the renovation is complete is also an example of pre construction investing.
In general, pre construction pricing is 5% - 15% lower than the market value of the finished property. Sometimes the developer may offer other financial incentives instead of a price discount. Some examples include cash back after closing, closing cost credit, free upgrades, rental guarantee or lease back, paid property taxes, waive assessments waived, management fees waived, etc. However, in most cases the developer will offer a combination of a price discount and other financial incentives in order make the deal sweeter for preconstruction investors.
After the construction or renovation is complete, pre construction investors? have two options to exit. Either they sell their property and make a quick profit, or they can hold the property as a long term investment and build equity. Sometimes investors can also profit by assigning the contract to a fellow investor for a small profit even before assuming title to the property.
Below is summary of the process of preconstruction investing:
The pre construction investor buys a house, condo or townhouse from a reputed developer in the preconstruction phase at a price discount and/or other financial incentives.
The pre-construction investor waits for the construction or renovations to be completed.
After completion of the construction or renovation, the preconstruction investor sells the property immediately for a profit. Or the pre construction investor holds the property to build additional equity due to appreciation and by paying off principal using the rental income. In some cases, exit by assignments is also possible.
Article Tags: investors, preconstruction, property
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Tags: Agreement Contract, Banks, Condos, Construction Value, Developer, Good Understanding, Handsome Profit, Home Buyers, Investment Strategy, Magnitude, Money, Naked Eyes, Nbsp, Pre Construction, Profitable Investing, Purchase Agreement, Real Estate Investing, Real Estate Investors, Risk And Reward, Unit Condominium Development
Flipping through late-night infomercials recently, I saw two real estate get-rich quick schemes, and I couldn’t help but wonder why people still fall for those old scams? Has anyone really talked a seller out of his home for no money down with owner financing lately?
Real estate infomercials do great harm to beginning investors, who waste hundreds of dollars on old information. Worse yet, those beginners soon get discouraged and miss out on the true (and profitable) adventure of real estate investing.
One of the most popular late night infomercial shows tells beginners that it’s possible to make a fortune by buying houses with no money down and then renting them out to cover the monthly payments. It’s true that you can buy a home for no money down, but the requirements include having good credit, good income, and the home should be owner-occupied.
Rentals don’t normally qualify for no money down financing. Institutional lenders aren’t supposed to make no money down loans on investment properties, and even if you could buy an investment home with no money down, the monthly payments would generally eat up the rent.
Late-night scammers also claim that investors can get owners to pay the closing costs, including the down payment. But when a lender asks where your down payment will be coming from, saying, “the seller” is not the right answer! Today’s sellers are also fairly savvy, and understand that with no money invested in a property, a buyer could easily walk away and leave them with a home that’s been ruined by careless tenants.
Another TV program offers a bogus system for buying houses at ridiculous prices, but think about it: has anyone bought a home, free and clear, for $345.00 at a tax sale recently? Hordes of investors flock to the tax sales in the area where I live, bidding up the prices of foreclosure properties far beyond a few cents on the dollar. It just doesn’t happen.
Today, another real estate investment scam is popular in Southern California. Here?s how it works: a young person we’ll call Charles charged $4,000 on his credit card to hire a real estate “mentor,” after the mentor wined and dined him at a fancy Beverly Hills restaurant.
In exchange for the fee, the mentor instructed Charles to find distressed houses by driving around the area and writing down the addresses of ugly houses in nice neighborhoods. Once Charles had given him the addresses, the mentor obtained the owner’s address and sometimes a phone number. Then it was up to Charles to call the owners and talk them into selling their houses for no money down, and carrying the paper, too!
I met Charles when he called me about buying a property that my husband and I had on the market for $1.2 million. When I asked him how such a young man was going to make the payments on $1.2 million home, he told me that he planned to rent the house out for enough to make the payments.
As a real estate investor myself, I tried not to laugh at his naivete, and after talking to Charles and listening to his frustration about trying so hard to follow his mentor’s advice, I offered to help him find a property, and I’m happy to say that Charles now owns his own home. But he’ll still have to spend years paying off a $4,000 credit card bill.
If you want to make money as a real estate investor, a good first step is to buy your own home, like Charles did. You can do that for no money down if you have good credit, or for a relatively little amount of money down if your credit is poor. Once you’ve purchased your own home, fix it up and then either sell it or refinance it and use your profits as the down payment on an investment property.
Don’t pay hundreds of dollars for out-dated methods that may have worked in the middle of last century! They’re a waste of your time and money. Real estate investing is truly a great way to make a fortune, but you must stick to tried-and-true proven strategies, ones that work in today?s real estate market.
Copyright ? 2006 Jeanette J. Fisher
About the Author: Jeanette Fisher offers FREE How to Start Real Estate Investing Teleseminar, free ebook, The Truth about Making Money Flipping Houses http://doghousetodollhousefordollars.com/
Tags: Buying Houses, Closing Costs, Foreclosure Properties, Fortune, Hordes, Institutional Lenders, Investment Properties, Investment Scam, Investors Flock, Late Night, Loans, Money, Owner Financing, Profitable Investing, Real Estate Investment, Renting, Ridiculous Prices, Scammers, Scams, Tv Program
Flipping through late-night infomercials recently, I saw two real estate get-rich quick schemes, and I couldn’t help but wonder why people still fall for those old scams? Has anyone really talked a seller out of his home for no money down with owner financing lately?
Real estate infomercials do great harm to beginning investors, who waste hundreds of dollars on old information. Worse yet, those beginners soon get discouraged and miss out on the true (and profitable) adventure of real estate investing.
One of the most popular late night infomercial shows tells beginners that it’s possible to make a fortune by buying houses with no money down and then renting them out to cover the monthly payments. It’s true that you can buy a home for no money down, but the requirements include having good credit, good income, and the home should be owner-occupied.
Rentals don’t normally qualify for no money down financing. Institutional lenders aren’t supposed to make no money down loans on investment properties, and even if you could buy an investment home with no money down, the monthly payments would generally eat up the rent.
Late-night scammers also claim that investors can get owners to pay the closing costs, including the down payment. But when a lender asks where your down payment will be coming from, saying, “the seller” is not the right answer! Today’s sellers are also fairly savvy, and understand that with no money invested in a property, a buyer could easily walk away and leave them with a home that’s been ruined by careless tenants.
Another TV program offers a bogus system for buying houses at ridiculous prices, but think about it: has anyone bought a home, free and clear, for $345.00 at a tax sale recently? Hordes of investors flock to the tax sales in the area where I live, bidding up the prices of foreclosure properties far beyond a few cents on the dollar. It just doesn’t happen.
Today, another real estate investment scam is popular in Southern California. Here?s how it works: a young person we’ll call Charles charged $4,000 on his credit card to hire a real estate “mentor,” after the mentor wined and dined him at a fancy Beverly Hills restaurant.
In exchange for the fee, the mentor instructed Charles to find distressed houses by driving around the area and writing down the addresses of ugly houses in nice neighborhoods. Once Charles had given him the addresses, the mentor obtained the owner’s address and sometimes a phone number. Then it was up to Charles to call the owners and talk them into selling their houses for no money down, and carrying the paper, too!
I met Charles when he called me about buying a property that my husband and I had on the market for $1.2 million. When I asked him how such a young man was going to make the payments on $1.2 million home, he told me that he planned to rent the house out for enough to make the payments.
As a real estate investor myself, I tried not to laugh at his naivete, and after talking to Charles and listening to his frustration about trying so hard to follow his mentor’s advice, I offered to help him find a property, and I’m happy to say that Charles now owns his own home. But he’ll still have to spend years paying off a $4,000 credit card bill.
If you want to make money as a real estate investor, a good first step is to buy your own home, like Charles did. You can do that for no money down if you have good credit, or for a relatively little amount of money down if your credit is poor. Once you’ve purchased your own home, fix it up and then either sell it or refinance it and use your profits as the down payment on an investment property.
Don’t pay hundreds of dollars for out-dated methods that may have worked in the middle of last century! They’re a waste of your time and money. Real estate investing is truly a great way to make a fortune, but you must stick to tried-and-true proven strategies, ones that work in today?s real estate market.
Copyright ? 2006 Jeanette J. Fisher
About the Author: Jeanette Fisher offers FREE How to Start Real Estate Investing Teleseminar, free ebook, The Truth about Making Money Flipping Houses http://doghousetodollhousefordollars.com/
Tags: Buying Houses, Closing Costs, Foreclosure Properties, Fortune, Hordes, Institutional Lenders, Investment Properties, Investment Scam, Investors Flock, Late Night, Loans, Money, Owner Financing, Profitable Investing, Real Estate Investment, Renting, Ridiculous Prices, Scammers, Scams, Tv Program
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