Real Estate Investing: Income, Leverage, Appreciation And Depreciation

Real Estate investing is not nearly as legally complicated, financially burdensome, or time consuming as you might think.

Every investor can invest for leverage, appreciation, income, equity and appreciation. The challenge facing every transaction is learning to recognize value.

Educated real estate investing is often knowing how to do deals. It does take time to get educated in this arena.

A typical real estate transaction involves understanding financing, negotitation and reognizing the risk and reward parameters of the investment. The truth is, real estate investing is a tough business, and even tougher if you’re not fully aware of the time. However, when approached correctly this is a very exciting and lucrative business.

Several years ago a very good friend of mine purchased a duplex which needed a great deal of repairs. My friend fixed the property up themselves and rented out one part of the duplex and lived in the other part. The tennants rent payment covered the entire mortgage which alloweed my friend to live rent free. Since the time fo the purchase the property has also appreciated considerably. This experience has led my friend to really get educated in real estate investing.

Real estate investing is a business that you can run yourself, with little overhead, and finally achieve the financial freedom you desperately desire. It is not limited to wealthy tycoons. To be successful in real estate investing is to build long-term wealth. Sensible investing is a sure way to wealth, but not necessarily overnight.

For the prepared individual, foreclosures give rise to circumstances for profit. In some cities competition for foreclosures is fierce. Investing in foreclosures is a very popular subject, especially with new investors. Learning the foreclosure market requires a great deal of time and energy but the rewards are certainly well worth it.

Done correctly, real estate investing is a great way to take control of your life, and gain financial freedom. Crunch the numbers and learn as much as you can about this exciting arena. There are opportunities to profit for almost every type of investing style.

About the Author:

David Medley is an active real estate investor and webmaster of http://www.aboutreal-estate.info/

Insider Secrets to Real Estate Investing

Have you ever wondered about investing in realestate? Maybe one sleepless night you tunedin to one of those infomercials that promises you the moon.

You know the ones we’re talking about. They always show “Joe Slick” and his blonde wife and 1.5 kids basking by their Olympic sized swimmingpool behind a mansion that makes the Taj Majal look like a chicken coop!

They go on to tell you how you can do the samething almost immediately and all it will cost you to find out is five thousand dol*lars!

Yeah right and there’s a bridge for sale too!
Well, here’s your chance to get the real deal.
Real Estate Investment for Beginners is written by a successful veteran of real world Real Estate.
Get the answers to all your questions and do it without “Joe Slick” and all his phoney garbage.
If you’ve ever wondered whether it’s really possible to make mon*ey in real estate, here’s your chance to find out.

Check it out at: http://real-estate.web-reviews.org/

About the Author

Sal Vannutini has actively invested in real estate for almost 20 years.

His love of real estate and renovating has allowed him to secure financial freedom by the age of 40, and at the time of writing, he is retired from his “real job”, and spends his time renovating for fun and profit, as well as hanging out with his wife and children.

Sal’s experience also comes as a result of 11 years in the real estate profession where he has witne

Real Estate Investing Training - Real Estate Investing Training Guide

Real estate is everywhere. New homes being built, old homes being renovated, empty lots being sold all over the place. Real estate is even on reality TV. Many people know the merits and the potential of real estate investing. But is there some real estate investing training that might make the learning a little easier?

There are no hard and fast rules of real estate investing, but there are some tricks that can be learned to make the potential for success rise. You can even start training yourself to learn the ins and outs of real estate investing. If you?re looking for information on how you can get involved in this exciting, lucrative field, then your training has really already begun.

Investing, especially real estate investing, isn?t something that you can just jump into. It?s important to know about the real estate market in general, and have some ideas for investing in particular, before you get started. After all, if you don?t know what you?re doing then you probably won?t succeed. This is where real estate investing training comes in handy.

Train yourself by studying the market. Notice when and where properties are being bought and sold, and which properties take longer to sell than others. Some areas will be more popular than others ? know where these are, and know what might become available soon. When you get familiar with property values in your area, you have a much better chance of making a smart real estate investment. After all, the property you invest in is everything ? your entire investment depends on it! The good news is, most real estate investing training can be done by you, on your own time. All it takes is a little learning, and paying attention.

Real estate investing is also about knowing not just how much to spend buying the property, but knowing how much to spend getting it ready for sale. You want to have a budget that you can stick to, with room for extras because surprises always happen. Be prepared to go over budget, but try to stay on track with time. Have a time line (that?s realistic) and do what you can to maintain that time frame. After all, your profits depend on the sale. The sooner you can get your sale on, the better.

To learn more about real estate in general, or real estate investing in particular, there are online training courses and information that you can make use of. The Internet is always a great source of information, and a great place to connect with others. For those who want to learn more, or go through more formalized training, the Internet can offer you endless possibilities.

Real Estate Investing By the Numbers:Part 2

As we now recover from the long holiday and consuming way too much turkey and stuffing, real estate investor minds come back to the plans that they will be making for 2007. Having talked to many investors during our recent appearance in NYC, I have discovered that many people have been in active in 2006 but are really planning on gearing up in 2007. Why? It seems to be a combination of a strong believe among experts and novices alike that 2008 will be the return of solid real estate market conditions and thus 2007 is a great year to pick up good values. Quite frankly, we concur.

In addition to the normal New Year’s resolutions that you make, I highly encourage you to add one more to your list that you will actually keep?.. LEARN TO BECOME A GOOD INVESTOR. During the time that our web site has been in existence, I have met many clients and investors who are all very bright and I know that they do some complicated things in their day job like surgery, education, law, etc., etc. What surprises me however is that many people feel that investing is rocket science. Having been a scientist and actually worked on a rocket, trust me when I tell you that investing is far, far from rocket science on the complexity scale. Most of real estate investing is just good old common sense that once you see it, you feel kind of silly for thinking that it was so complicated.

One of the common themes among many professional people I meet is that they are just too busy to learn what is needed. They go on to tell us that all they want to do is find somebody they trust and then take their advice?.. Kind of like I don’t want to learn medicine if I have a threatening ailment. While I agree with that for many things in life, for important issues like your health, your family’s financial future, your children’s education, etc., I believe a much healthier approach is to find a provider that you trust but learn enough to get comfortable with what they tell you. That way you have a much stronger conviction when you make a decision other than “gee, this doctor recommends this approach” or “wow, I will buy this property because Dr. Anderson sounded really excited”. ? I hate to be the bearer of bad news but for both those decisions, you will wake up one morning a few months down the road going “did I make the right choice?” If you understand why you made that choice, then that thought will rapidly disappear and not be a hurdle. On the other hand, if you don’t understand why you made that choice, you are in for some mental roller coasters.

As part of our push in 2007 to create a small, but extremely well educated investor community, let me now get off my soapbox and describe the next piece of investing by the numbers.

What You Need To Know

In our last article, we described the four key parameters that any real estate investor needs to know to evaluate a project. Just as a reminder, they are

1. Purchase Equity.

2. Annual Appreciation (%)

3. Annual Cashflow

4. Special Tax Situations

In our live workshop in NYC, we recently covered how you can sit at your desktop and get this information. For our projects, we provide this information to you but I believe it is really good to see one time how to actually do that and that it makes sense. Then, when you are looking at a property where information has been provided to you, then you can always go back and double check any piece that may not make sense. In late January early February, we will be conducting multi-city tours where you can come out and meet us live and we will teach this content. Please go to this page to tell us the large city that you live next to and give us a contact email if you would like to attend.

Calculating Cash On Cash Returns And Yearly Returns

One of the standard measures of many investments is what is called cash-on-cash returns. This is just a fancy word that says what % gain do I get for holding an investment. For example, let’s say that you plunk down $20,000 in down payment and closing costs on a real estate investment and let’s say in 2 years, you get back $65,000 after reselling with all expenses included; i.e., you have a $45,000 net profit.

The cash on cash return for this is simply:

COC(%) = 100%* 45000/20000 = 225%

One problem of this measure is that it does not take into account the time-value of money; that is, if I made that in 2 years versus 20 years, it makes a huge difference. So suppose in this example we plunked down $20K, got a simple interest return the first year, and then reinvested that gain with the same interest. Now what interest rate would accomplish this? A little more complicated to calculate but the annual rate of return to produce this is just a little of 80%. To see this, you can do the following:

Year 0: $20,000

Year 1: $20000*(1+80.2%) = $36,055

Year 2: $36055*(1+80.2%) = $65,000

If you are still in the mindset of 2004/2005 that you can plunk down $5,000 on something and make $75,000 in 6 months by flipping, then I wish you the best of luck. This is just not realistic except for a few needles in the haystack. On the other hand, if you are comfortable with making 30-40% per year on your money over a 2-5 year time frame, then that is very realistic and can be done with low risk.

So when we evaluate potential opportunities, one of the first parameters that we are looking at is this yearly return and we like to see 30%+. As we will discuss next week, this is not the only factor to consider but it is certainly one of the top 3.

Great Source of Private Money For Real Estate Investing

How would it be to have access to over a million dollars in private money for real estate investing? That?s just what a good friend of mine stumbled into when he did a very simple thing? something you can do in an afternoon.

My friend, Jim, has been investing in real estate for several years. One day, after a family get together, he decided to let his family know about his investing. He had been pretty successful with small apartment buildings, so he decided to send out a simple postcard to all the members of his family, telling them to call him if they knew of anyone wanting to sell rental property.

Lo and behold, Jim got a call the very next week from an uncle he barely knew. The uncle didn?t know of any property for sale, but he expressed curiosity in what Jim was doing, so the two men made an appointment to get together for lunch.

At lunch, Jim explained his investing strategy, and outlined some of the successes he had enjoyed. He talked about the simple things in his business, like buying value, and looking for positive cash flow. He enjoyed talking about it, and Jim?s uncle seemed genuinely interested.

Then Jim got the surprise of his life.

As they were leaving, Jim?s uncle leaned into the car window and said, ?Could you use a silent partner to help with the financing end of things??

Jim says, ?I think my heart skipped several beats before I answered.?

After Jim?s heart started again, he told his uncle he?d be happy to put his money to work. It turned out that Jim?s uncle was sitting on nearly $1,000,000 in liquid assets, assets Jim has used over and over again during the last few years to build a rental real estate empire.

The funny thing is, Jim didn?t set out to find relatives with money. He was just looking for some property, and along the way he found one of the greatest private lenders I?ve ever heard about.

What can we take away from this story? Well, you may not have a relative with anywhere near the available cash Jim?s uncle has, but the question is, how do you know? More importantly, how easy would it be to find out? My guess is, pretty easy. Could you find a creative way to ask, and let your family know what you?re doing? Of course you could!

Chicago Real Estate Investing

Donald Trump and countless other moguls built their empires on real estate, and, lately, a lot of people have realized the wisdom behind real estate investments. Chicago real estate investing is a formidable, yet very feasible, business. Chicago is a booming city that is economically sound with prime real estate everywhere. Owning a piece of land at the right location is like owning a gold mine: In just a few years, its value may jump to double the amount you started with in the first place.

But as with any business venture, jumping on the real estate investing bandwagon should be more than just a split-second decision. You must be well prepared before you commit to this daunting task.

First, you have to study Chicago real estate investing. Ask significant questions:

Where is the ideal location?

How is the market doing?

How much start-up capital should I have?

What are the different aspects of real estate investing should I be familiar with?

What type of property do I want to deal in?

When you have the answers to all these questions, then you can start thinking of Chicago real estate investment as a possibility.

When you start your business make sure you cover the important facets of promoting your Chicago real estate investment. Know the importance of advertising and how beneficial it can be for your business. You need to constantly let people know what is out there by advertising your property. There’s no such thing as too much advertising-it’s the lack of it that can hurt you.

You must also have reliable real estate agents handling your Chicago real estate investing business. If you surround yourself with hardworking and smart people, chances are you’ll be in it for the long haul.

Sitting at the negotiation table can be intimidating, but you must realize that you’re in this to win. Start your bargains at the lowest possible price: not too low, as this could be insulting for the seller, but low enough so that you’ll have a lot of room for haggling.

Be pro-active. Be on the watch for the smallest movements in the market and make sure you are ready to pounce when prime real estate is suddenly brought to the market.

Chicago real estate investing can be a lot of hard work but it can also be very rewarding in the end.

Why Real Estate Investing Is For Skeptics

According to the American Heritage Dictionary, a skeptic can be defined as, ?one who instinctively or habitually doubts, questions, or disagrees with assertions or generally accepted conclusions.?

People generally use a derisive tone to call someone who questions things a skeptic, because it is easier for them to bully someone out of having a scientific approach to things, than to back up their own assertions. However, being a skeptic is not a bad thing, especially when it comes to money.

Skeptics make exceptionally good real estate investors. Why? Because skeptics like to investigate things. They don’t make assumptions, and they don’t let other people’s assumptions steer them. Real estate investing requires plenty of investigation.

For one thing, a skeptic doesn’t want to just nod and take everything his accountant or lawyer says, hands down. Therefore, he will learn a little bit about real estate law and about reading financial documents. A skeptic doesn’t like to be completely dependent on his team of experts, even though he knows it would be very difficult, if not impossible, to carry on without them. But his skepticism makes it easier for him to ask intelligent questions of his team, and they appreciate them for it if they are worth their salt.

The skeptic will do more than a cursory examination of a particular real estate market. He will begin with questions. He will find answers. Answers will lead to more questions, and so on, until he thinks he might have a pretty good idea of what a given area is like, real estate-wise.

The skeptic, however, doesn’t trust this idea he has developed. He wants to make sure. And so he will visit the city he is considering purchasing in. He will interview the local experts. He will interview local businessmen and politicians. He will, of course, have them back up their glowing reviews of their city. He takes nothing on face value. He digs.

When it is time to talk to actual property owners, he will use these same tactics to ferret out every possible scrap of information about a property that he can. He will annoy people who want him to simply believe what they have to say and go away. He will not believe, and he will not go away. In the end, he will have the information he came for, or he will walk away. Chances are, he will walk away anyway. A skeptic knows that most deals are not worth having.

Ken McElroy, author of ?The ABCs of Real Estate Investing,? applauds the skeptic. In fact, he approaches investing in just that manner, with levels upon levels of research, and by insisting that assertions are backed up. So far, it has worked for him.

About the Author:

Alex Anderson Represents Real Estate For Sale In Minnesota, and Minnesota Investment Property for Buying Investment Property.

Getting Started in Real Estate Investing

Investors need to realize that, as they embark on their real estate investing venture, although they’ll be doing most of the work and (hopefully) seeing a nice profit, the entire process is a collaborative effort.

No one would successfully be able to start a new job without the proper training, and only a fool would be able to turn a solid profit on the stock market without the proper guidance. So it is with real estate investing. Gone are the days of quick-and-easy buying and flipping with enormous profits. Investors need a plan if they’re going to succeed, and they’re also going to need some help.

Investing as a collaborative effort

It’s possible to know a great deal about real estate and be particularly savvy, but there are some things that need to be left to the professionals. While the Internet can be a tremendous source of information and help with research, it just will not tell anyone what is really going on with a house. It’s important to actually get out there and see the property.

An online home appraisal will not detail the quality of the house and the condition that its features are in. Internet reports will not indicate if there are new carpets or no carpets, or what sort of fixtures are in the bathroom, or what sort of kitchen and what sort of appliances there are. In order to do this, investors need to get out there - and often times, call in the pros for another opinion.

Throughout the investing process - and not just the first one, but with each and every property purchased, professionals are needed to aid investors:

An attorney. A lawyer will help an investor wrangle through any/all legalities of buying real estate. Any contracts that come as a result of the transaction must be written up by a lawyer.

Title or escrow company. The best ones to go with are the ones that work mostly with investors; they’ll speak the same language.

An insurance agent. Not just any insurance agent, but one that specifically deals with real estate contracts and such.

A CPA. Since investing should be treated as a business, an accountant is needed to help with finances and profits. The theme here is to find one that understands real estate and investors.

A mortgage broker. Again, it’s good to stick to one that understands investors and has experience with investors.

A contractor and a plumber. If the investment property is a fixer-upper, a contractor will need to come in to determine if any structural or cosmetic repairs are needed. A plumber should also be referenced as they will determine the conditions of the pipes, (if there are any leaks or major problems). Overhauling the plumbing for a house can be an enormous undertaking, just like with making structural repairs. Investors should keep a fair distance from houses with structural issues as these tend to kill the profit.

Just as lawyers specialize in an area, so should the pros that work with investors. This helps to keep everyone on the same page - and operating in harmony.

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.

Real Estate Investing : Simple Mistakes The Population Makes

Real Estate Investing : Simple Mistakes The Population Makes Submitted By: Tom Beaty

People involved with real estate investing often wonder which came first, the deal or the plan. New investors frequently make the mistake of buying a property before they know what they plan on doing with it. The dilemma starts here. Investing in this manner is completely backwards and will force you into a corner. The correct way of doing things is formulating a proposal before finding an appropriate house to fit in your scheme. Planning comes naturally to most people. College education and retirement are just two examples of the future circumstances that we plan for. It is only natural for us to plan for real estate deals as well. A rookie investor may get in over his head and forget to forge a plan. You have to elect what you will do in the real estate market. How will you sell the houses you want to pay for? Having a proposal is very beneficial. Overnight success simply does not occur in real estate. People often envision closing a million dollar deal in order to retire. The reality of the matter is that real estate investing is a gradual process for accumulating wealth. Traveling at a slow pace will gradually help you reach your goal. Although you will make a decent amount of money, overnight success is not a realistic goal. A veteran investor can average between sixty and one hundred thousand per year with good real estate investments. This income will occur with a steady forward progress while assuming that not everything will go as planned. You must remain practical with your real estate goals. You cannot do everything alone. There are key people who play crucial roles for you to succeed at real estate investing. The smart investor will be assisted by a team of specialists. You will need a reliable real estate agent who will help you analyze the properties. In order to make sure the house is worth the investment you will need an appraiser and a contractor or an inspector. You positively must have an attorney to make sure there will be no hidden surprises popping up during the deal. There is no approach that encompasses all situations you will encounter in the business. You must prepare a few different approaches. Sometimes people have to resell a home urgently after buying it. The housing market can be unpredictable and change rapidly. If the window for you to make a profit passes because you can’t get your investment completed for the market, you still have the option of renting. Even this market can become void or stall. If you are in this position and you have no choice but to get rid of the property, you could offer a lease option or perhaps a land contract. If all else fails you may have to sell to another investor to cut your losses. When the time comes to bail, a smart investor doesn’t hesitate. A rookie investor doesn’t have to make these common mistakes. He can avoid them by doing a little research and planning. Don’t elect what real estate to invest in until you understand the business. Purchase one of the many available books and research some of the approaches used by the pros. Find out where the free seminars are and learn the proper way to invest. In order to avoid these common mistakes, you must be sure to make smart decisions in your real estate investing. Article Tags: estate, investor, make Tags: Accumulating Wealth, Amount Of Money, Beaty, Buying A Property, College Education, Dilemma, Dollar Deal, Estate Deals, Estate Goals, Forward Progress, Hundred Thousand, Overnight Success, Proposal, Real Estate Agent, Real Estate Investing, Real Estate Investments, Realistic Goal, Retirement, Slow Pace, Smart Investor Next Page » eNews & Updates Sign up to receive breaking news as well as receive other site updates! 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