How Does Real Estate Investing Work
March 10, 2010 by Kenny Santos
Filed under Real Estate Investing
A question often raised by brand new real estate investors, and those who would like to be, is ?How does real estate investing work?? I will attempt to provide you with a brief overview in this article, and hopefully you will have a better understanding of real estate investing and how you might become involved.
First of all, when answering the question, ?How does real estate investing work?? it?s important to begin by stating that there are almost as many different types of investing as there are investors.
You could become involved in commercial real estate investing. This would include many different kinds of property and types of investing, from strip malls to mobile home parks, from malls to apartment complexes. You could buy commercial property at bargain prices, and sell for immediate gain, or you could buy income property and hold for the long term. You could also combine the two, and realize income from both the increase in value and the month-to-month rent. Commercial property is an important consideration when answering the question, ?How does real estate investing work??
You could also get involved in any of a number of different strategies involving residential property, from single family homes, duplexes, small apartment houses, even mobile homes. When it comes to answering the question, ?How does real estate investing work?? the possibilities are limited only by your imagination.
If you?re the type of person who enjoys projects, you might enjoy buying ?fixer-uppers? and rehabbing them. You could become a wholesaler or a bird-dog and find deals for other, more experienced investors, some of whom have already worked out the answer to the question, ?How does real estate investing work??
Maybe you like helping people? If so, working with buyers and sellers to solve their credit or payment problems will provide you with ample opportunity to profit from their dilemmas. You could also negotiate directly with the mortgage lender to buy houses, either in foreclosure or ?short sale? investing. A little investigation of these terms will give you a clearer picture of the answer to the question, ?How does real estate investing work??
Alternatively, you may have money to invest, but little or no time. You may find that investing as part of a group, or ?trust? is a good fit for you. These trusts can be very lucrative, and a good option for the less hands-on investor. Even very busy professionals find REIT?s (Real Estate Investment Trusts) a good choice when deciding for themselves, ?How does real estate investing work??
Hopefully, you?re curiosity has been piqued by this brief introduction to the question, ?How does real estate investing work??
Now, go make more offers!
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Commercial Real Estate Investing
March 9, 2010 by Kenny Santos
Filed under Real Estate Investing
Real estate investing has been made out in the media to seem like it’s the best thing since sliced bread. This in no small part due to late night cable television infomercials espousing the high deals of no money down or next to nothing down real estate investing. They make it look like anybody can do these commercial real estate investing deals easily. You will be shown, how by just writing things down on the back of napkins, you have the makings of a real estate fortune. Things will reach boiling point when supposedly real interviews are held with people who have succeeded wildly after using the promoter’s commercial real estate investing system.
It is a fact that real estate fortunes can be made. More often however, the person who’s making it is the guru owner of the real estate course! Truth be told, real estate investing is a lot harder than what you are led to believe. Every buy, sell or renting of real estate involves dealing with people directly. Unlike stock transactions, there are no organized exchanges to keep things standardized. Furthermore, the courts are more sympathetic and protective toward delinquent family tenants. Another common problem is many real estate rehabbers take on drifters to do odd jobs. Instead of fixing up the properties, they do more damage than good and usually end up disappearing after getting paid an initial amount. Lots of real estate investors are burned this way.
You still have to take many years to learn how to assess the value of properties in a town or neighborhood. You also need the street experience in negotiations so that you don’t lose out the profits that you originally thought you had. The main point here is real estate investing, whether commercial or residential, is best thought of as a business. It needs your dedication and constant education. Moreover, if you are working full time and you invest in real estates, you will be losing your free time to collecting rentals and doing rehabs. You will need to cover the mortgage out of your own pocket if the property does not sell, or when tenants are not able to pay up on time. You want to enjoy the fruits of your labor, not leaking out your time and salary to patching up hiccups in your real estate investments. If you enjoy cookouts and trips to the beaches, you might want to consider the stock market rather than real estate investment. Both are part-time businesses, but which one leaves you with more free time and less income fluctuation?
About the Author:
Jim Banks has over 15 years investing experience investing in everything from real estate to commodity futures and is a frequent contributor to http://www.profit-mountain.com
Make Money In Real Estate Investing By Using Other People’s Money
March 7, 2010 by Kenny Santos
Filed under Real Estate Investing
What is the first rule of real estate investing. Most real estate experts tell you “Leverage - Using Other People’s Money?.
Most real estate investors want 100% financing for a hand full of houses they intend to purchase or they request that the owner finance the property. The strategy is to buy and hold a handful of rental properties for a few years until the equity in the property has increased.
Then they either refinance all the properties or sell all the properties of take all the equity out and then retire rich with millions of dollars in equity or a healthy cash flow to sustain the lifestyle.
Within a thirty year period of time real estate market will have at least five downturns. The value of property in some areas can hit the bottom just as you decide to retire. The real estate investor of today does not want to wait thirty years to cash in and live the life.
Real estate investors diversifying their investment activities. Some are doing quick turn around transactions in addition to the long term buy and hold. If you are an investor. The theory of quick turn around transactions is finding distressed property get it under contract and sell it to another investor for a quick $5,000 - $15,000.
Some investors are doing short sales and pocketing more cash. Being house rich and cash poor can put many investors in a crunch if some crisis happens. Not having the money to close a good deal prevents some investors from cashing in on lucrative transactions. The first thing new investors need to understand is that lack of money should never be an issue when you plan.
Combine the buy and hold method with the quick-turn-around investment strategy to put cash in your pocket within a matter of weeks rather than years. If you find a good deal with lots of equity sitting in the property be sure you can re-finance within a short period of time to get the equity out and into another high yield interest investment fund that you can access when you find the next good deal.
Use ARMs with low start rates that give you 3 - 5 year before they reach their max. Refinance all your property with low start ARM?s and put the excess money in an account that builds your equity twice as fast. This financing alternative allows your tenant to make the full house payment while you pocketing Your money. No negative cash flow.
Set up lines of credit for your business. You may never need them but in case you do the money is sitting there waiting for you to use it to create more wealth. With a line of credit versus a loan, you only have to pay for the money you actually use.
To implement the strategies, you need to align yourself with as many funding sources that you can find. This strategy will insure that you can continue to add to your real estate empire or to maintain the empire that you have already built.
So, when you are building your real estate empire consider buy and hold strategies in addition to a quick turn-around transaction approach to investing. Build your funding sources so that you are ready to make the offer and close the deal.
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Real Estate Investing For Newbies - Intro To Foreclosure Basics
March 4, 2010 by Kenny Santos
Filed under Real Estate Investing
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By now of course you know foreclosures are at an all-time high in our country. Nevertheless it is another Real Estate Investing niche that has given many people great potential for making money. One of the most important things to remember about foreclosure investing is that there are many details to consider. It is not difficult, per se, and once you become familiar with all of the small details you can achieve success in no time at all. The first thing you need to know about foreclosure investing is how it works. Basically, a foreclosure is a property that the bank owns due to the fact that the owner of the property neglected to follow the terms and conditions of his/her mortgage, which usually means a failure pay his or her mortgage. In turn, the bank that owns these properties is forced to sell them back to the public in order to recover the money that they lost. And to go along with this, the bank often attempts to sell foreclosures quickly because they are not making any money by holding onto them. All of this works out to the advantage of a foreclosure investor. Because homeowners have heard or read about the profit potential, most people facing foreclosure will usually try every option available before selling to a Real Estate Investor. Let’s face it, they know that as Real Estate Investors we are only going to offer a certain percentage of what the property is worth on the open market, but look at the alternative. The home will be auctioned off. The homeowner will get nothing in terms of money, will lose all of their equity in the house, and have a foreclosure on their credit report. This will probably prevent the homeowner from being able to qualify for another loan for several years. Depending on the situation the Real Estate Investor, in exchange for control of the property may offer the homeowner a cash payment, make up the missed mortgage payments, and pay all of the penalties and legal costs that have accumulated. In essence the property is brought to a current status and the foreclosure process is effectively stopped. Real Estate Investors have really helped homeowners in this situation whether they realize and appreciate it or not. So our job is to find homeowners who are facing foreclosure and either pass on or work the lead to see if we can buy the property. The main thing that makes the foreclosure process very complicated is that it varies from state to state.
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