Real Estate Investment Profit
July 29, 2008
Real estate investment is both fun and exciting. Ans it is almost a guarantee profit if you make the right choice.
The real estate price just keeps going up.
There is no 100% sure investment. However, it is still one of the best investment one can have.
I got into real estate almost by accident. Me and my friends were renting this old place when the landlord wanted to sell it.
The owner is having problem making ends meet and decided to sell his place. We took the offer and bought the place.
It was hard to get together money for a down payment, but once we did, we never regretted it.
That area was undergoing through urban renewal program and soon the city is filled with people. Our place also begin to worth more and more.
My friends wanted to stay there, but after a couple of years I get sick of living there. I decided to sell my share in the place and invest my money somewhere else.
Naturally, I took the money to real estate investing. It was something that I am familiar with.
I invested in new construction downtown, buying a small share in a large commercial space. It cost me a lot of money, but I was getting checks from them every month.
I knew that, within a year, it would pay off. Sure enough, it did.
One of the things that people don’t realize about real estate investing is that you don’t necessarily have to buy a whole property to invest money in real estate.
You can buy a small portion of the real estate and get a portion of returns. This is in fact a good way to do investing.
The good thing is that you need not be responsible as it does not take alot to buy part of the shares.
You can also diversify your portfolio, buying a piece of a lot of different properties in different areas.
Wisely Choose a Property Manager and Avoid These 7 Mistakes
July 29, 2008
So you have a great new property - a vacation home, a business lot you inherited, or just a second home you’re renting out instead of selling in today’s market - and you just hired a property manager. You may have a surprise coming.
The problem with property managers is that many of them are not professionals. While it’s true they may have some management experience under their belt, it may not be for the type of property that you have; or they may not take the job seriously; or they may palm it off onto someone else to care for, which happens often when they have many properties to manage. So how can you be sure to get a property manager that is right for you?
You can begin by looking out for these 7 problems that are common among property managers.
1. NO COMMUNICATION: You should ask for references from each person that you are considering as a property manager and then check with the references on their communication skills. A property manager who doesn’t contact you at the end beginning of any rental period or at least a few times throughout the year, will probably end up costing you more time and money than if you managed the property on your own.
2. LACK OF ACCOUNTABILITY: Is your property manager bonded? Does he or she have a professional reputation to maintain - for instance, is he or she a licensed realtor or other real estate professional? If your new property manager has nothing to lose, then they have no incentive to manage your property well.
3. OVER PROMISING: When you are interviewing, does one of the potential manager seem to be overly eager for the job? So much so that they seem to be making more promises that the others? Be careful here, this is not a good thing.
4. TREATING YOU LIKE A NUMBER: Property management companies that don’t guarantee you a specific property manager, who you meet yourself, are likely to treat your property as just another number. You want a single property manager or small company with a small management load to ensure your property is given proper attention.
5. LACK OF EXPERIENCE OR EXPERTISE: You should make sure to select a property manager that specialises in the type of property that you are listing. They should also have a good record when it comes to property management, both their own properties and other people’s.
6. LACK OF RESPECT FOR THE TENANTS, YOU AND THE CLIENT: This is a part of being treated like a number with some slight differences. How does the property manager strike you? Do you feel as if they will treat you with the respect you deserve? If they don’t make you comfortable, then your client won’t be comfortable either. There is a way to check this. Do they allow you to ask the questions you want answers to and then treat each question with the utmost importance? Or do they fly past it as if it really doesn’t matter?
7. COMPLACENCY WITH TENANTS AND YOUR PROPERTY’S MAINTENANCE: You really want a property manager that will be not just active, but proactive, when renting your property and caring for it. Ask about their vacancy percentage and their turnover rate. Both numbers should be very low.
Remember that you should interview and screen any property manager that you are considering for all of the above issues. You need to have a manager that is experienced, professional and proactive; one that will treat your property as if it were their own and keep in touch with you on a regular basis. You will find that a good property manager will increase your revenues while saving you time and stress. They will turn your property into an asset instead of a liability that it could become in the wrong hands.
Learn how to Buy a Home with a No Money Down Mortgage
July 29, 2008
People are under the confused notion that they need thousands of dollars for a down payment on their dream home because of the problems in the mortgage industry. That is absolutely false! A HUD approved government program allows any buyer to take advantage of the amazing buyers market we are in and buy their dream home with No Money Down.
Here is a step by step process to BUY a home with ZERO down payment and ZERO out of pocket expenses using an FHA approved mortgage and time tested principles.
Find an FHA/VA approved Mortgage Planner that specializes in working with a DPA. A DPA is a down payment assistance program. One of the more popular DPA’s is the Nehemiah program. Nehemiah has assisted in funding over 275,000 real estate transactions since 1998 and is completely HUD approved and RESPA compliant.
Next you will get pre-qualified for a down payment assistance program with a certified specialist. The most important part of qualifying is income verification. You must provide your last 2 years of income verification. Fortunately, credit is flexible. Typically credit scores must be around 580 to qualify but in some cases you can go as low as 550. This is NOT a first time homebuyer program. Anyone buying an owner occupied property is eligble.
Now the fun part begins - looking for your new home. Due to current market conditions this is easier than ever. FHA limits have increased and typically they are around $423,000 for most areas. In certain areas, like Los Angeles county, they go as high as $729,000. These limits should give you plenty of flexiblity to buy your dream home.
Now your realtor must begin the negotiations with the seller. The sellers assistance is vital. They must participate in the DPA by funding the closing costs to you and down payment to Nehemiah (or whatever DPA you choose). The seller will be required to contribute 7-10% to you through Nehemiah and closing costs. Expect to offer closer to the list price of the property since you are requesting a large contribution. The seller is generally concerned with how much they are walking away with so the contribution is not important to them.
Make application for a mortgage with a DPA specialist. Make sure that you choose someone that has experience working with the FHA and especially a DPA. This is not the time to risk working with an inexperienced “loan officer”. You will lose valuable time and perhaps the deal as well.
You will be required to bring 2 years W-2’s and/or tax returns as well as your most recent paystubs. Even though no money down is required you will also need your most recent bank statements. If currently renting, copies of your last 12 cancelled checks or a letter from the management company will be needed.
Now it’s time to celebrate! The closing is the simpliest part - if your realtor and mortgage planner have done their jobs. There should never be any surprises and all your questions should have already been answered. It is amazing to see clients walk away from closing with a 5.8% Fixed rate mortgage and a new home - all with no money down! Anyone can do it, even you. Don’t miss out on the greatest buyers market of our generation.
Credit Crunch - What to do if you own a small business
July 29, 2008
The current financial situation in the UK not looking good with more and more being spent on credit cards, the credit crunch doesn’t look like it will be over away any time soon. For most people this is a big problem, but what if you own a small business? You can be most at risk of going bankrupt over the next 12 months, but by following a few easy points you could avoid bankruptcy all together and beat the credit crunch.
How did the credit crunch start? With the American mortgage holders on low incomes unable to meet their loan repayments, many homes have been repossessed and banks now have to write off the so-called sub-prime loans. These loans are what a lot of banks in the US and in Europe have bought packaged up in collateralised debt obligations which are basically pools of debt. These debt pools are now worth a lot less than when the banks paid for them and are very difficult to sell and have forced some banks to close funds that were exposed to these loans and the US sub-prime sector.
This has caused the banks to increase the cost of borrowing to its customers which is now well above the target rates set by institutions E.g. the Bank of England. This means that people, especially those with poor credit ratings are finding it harder and more expensive to borrow money or get a mortgage.
How will it affect my business? The main problem will be the distinct lack of loans any business can make from the bank. If your business relies heavily on overdrafts and bank loans then you can be most at risk due to banks declining people and businesses loans. The credit crunch could claim jobs although these seem to be limited to relatively well paid members of staff in large international banks, but there is also a threat of job losses from employers in other parts of the economy, and is seen as the next step.
So what can I do? Obviously the first step is to cut down on spending and borrowing. Loans are now coming with an interest rate in excess of 10% which will put business in more debt so try to cut back on the items and products you don’t need at home and for your business, you could try switching to supermarkets own brand products and take advantage of two for one offers and buy one get one free. Make sure you produce plausible and accurate month by month cash flow forecasts as these will help you to be prepared to take tough decisions if the credit crunch hits you harder then you first thought.
But if you are desperate for money consider releasing equity in your home. This will allow you to get access to funds and also have the peace of mind that your home is secure. Sell and rent back companies work by buying your house and then renting it back to you over a period of ten years. You can get companies which will give you 100% of the value of your home by giving you 70% when you sign up and the remaining 30% at the end of the tenancy. Some sell and rent back companies will offer a buy back service if you think you will have the financial security in a few years to purchase your house back from the company.
Looking forward. The credit crunch is a problem for everyone, but if you make you manage your finances carefully you and your business won’t have a problem.
Foreclosures and Pre-foreclosures - Nightmare or Opportunity
July 29, 2008
The United States real estate market is suffering great losses due to bank foreclosures. Both bank foreclosures and pre-foreclosures are at all time highs and the homeowners and lenders are in serious trouble. Many honest American homeowners are suffering financial crisis and could lose their homes. Some homeowners face bank foreclosure after getting behind on just a few payments. The banks are not going easy on these struggling homeowners, but of course they are suffering as well. The extremely high interest rates and late fees only seem to be making things worse on both sides.
However, with every person that suffers a material loss, someone else will gain from it. These foreclosed homes will be put up for sell or for bid for very, very low prices. The lenders sell the foreclosed homes for factions of the real estate market price in order to get rid of it quickly and to regain at least some of the money back. This makes it easier and more affordable for many people who would like to buy a home. Young, first time home buyers for instance, can easily afford a home because of the bank foreclosures.
The homeowners have a chance to earn a little money as well when facing pre-foreclosure. Pre-foreclosure is a grace period after the time they made their last payment and before they’re officially facing foreclosure. The public is notified ahead of time that a home is facing foreclosure, which gives interested buyers time to make a deal with the homeowners before the bank officially takes the home back. Pre-foreclosures give homeowners enough time to sell the home at a very low price as well. They money they receive can help them in affording another place to live.
Bank foreclosures and pre-foreclosures also provide an excellent opportunities to earn a lot of money. Even those Americans who have never been interested in the real estate market are learning that investing in bank foreclosure and pre-foreclosure homes can bring them a lot of money. For instance, you can buy foreclosure homes for as low as 10% of their worth, and then resell them for much more! Imagine all the money you can profit from purchasing bank foreclosure and pre-foreclosure homes! This is an excellent time to invest in foreclosure homes!
So how can you find them? The public is usually notified of the homes that are facing foreclosure. You can always look through your newspaper and local advertisements, but there are also listings that can be found on the internet! There are probably many homes in your state right now that are facing bank foreclosure. There are many foreclosure and pre-foreclosure listings on the web and you will be allowed to bid and purchase electronically. Be careful though, there are many scams on the internet. Some so called “foreclosure” and “pre-foreclosure” listing sites will promise you access to many legitimate listings, but they won’t deliver. Many of their listings will be expired or false.
Fortunately there are plenty of honest foreclosure and pre-foreclosure listings. Some can be found on real estate sites and some on government auction sites. So how can you tell the good from the bad? Well, you don’t have to! There are government auction review sites that will do the dirty work for you. Experts that oversee government auction reviews go digging into government auction offers and test their legitimacy based on certain criteria. They have tested and scored the top government auction membership sites that offer real government auction listings.
Many of these membership sites offer real, top deals on real estate, bank foreclosures, and pre-foreclosures. Make sure you read the government auction reviews before you venture into foreclosure and pre-foreclosure listings. You will be ahead of the foreclosure buying game and will be provided with the best real estate advice!
Wholesaling in a dead real estate market- is it possible?
July 29, 2008
The Sky is falling! That is the news you here about the Real Estate market every time you turn it on lately.
I don?t blame them (sort of) there are some definite issue?s that have come out of the resent credit crunch, Banks going under and the gov. having to bail out Fred an Fan but overall if you are an investor you should be excited about what is going on.
What is the old phrase about buying when everyone says that it is not the time to buy and sell when everyone says it is time to hold.
Stop waiting and buy now, if you miss this opportunity to buy you are going to be kicking yourself in a few years. Many savvy buyers know this and that means you can still wholesale in todays market.
People say that nobody is going to buy in this market, everyone is scared or no one can get qualified. I say bullcrap, I have wholesaled 50 properties in the last 6 months.
Does that surprise you?
Look, don?t get caught up in all the gloom and doom that is in the news surrounding the Real Estate market. Find out what the savvy investors are buying in your market (and I guarantee they are buying, you just have not talked to the right people if you don?t know who is buying) and once you find them or see what they are buying, then go find a deal that matches their criteria and sell it to them. It is not hard to do.
Up and down that is the way it works and continues to repeat. The market is constantly changing. In a decline the big dawgs that know what they are doing are the ones that are the buyers. You position your self in between a good meal and the big dawg and he wants that meal (deal) bad he will pay for you to move out of the way and you can be the one saying cha ching!
Find the buyer then find the deal, not the other way around.
Big and Serviceable is the New Home Motto
July 29, 2008
Though we have this image of families from yesteryear living in large Victorian-style houses, the truth is that homes across the developed world are getting larger on average than they’ve ever been. In Australia the average home size has increased nearly 40% in just the past two decades, to an average of approximately 2,450 square feet. The numbers are similar in the U.S, where the average home sits at around 2,343 square feet, a jump of over 50% in the last 35 years.
These rates are not so much a result of houses across the income barrier getting progressively larger, but main houses in the upper tier getting much larger. 3,000 square feet new homes are now considered on the smallish side, with 5,000 to 8,000 being the norm. Whereas old style large homes were all quite unique from each other, this new crop of large, mini mansions are now dubbed McMansions, for their cookie cutter design and assembly line style production, often being crammed together closer than these homes would’ve been in the past.
The average house now has four or more bedrooms, despite the average family size in developed countries dropping drastically in the past 50 years. These large homes inevitably also get filled with larger everything. Larger appliances, multiple heating and cooling systems, professional-grade stoves and fridges, larger sofas, etc are just the beginning.
It’s all about interior space with these houses, which is their main selling point. You may find yourself feeling claustrophobic after being in one of these behemoths and then returning to a smaller home. The ceilings tower and the rooms are massive, with large walk-in closets, tons of large windows, wide hallways, etc. If the human race evolves to the point where we’re all eight feet tall with massive wingspans, these homes will not need to be renovated to accommodate them one inch.
A home of this size will all but surely be the most expensive item you’ll ever purchase, and therefore needs a good deal of thought but into it beforehand. This begins with the neighbour, and not only the way the neighbourhood is now, but the way it’s expected to be in ten, twenty or more years when you’re looking for a debt consolidation equity loan.
If you’re building a new custom home, you should certainly look into incorporating energy efficient designs into the home. Proper insulation, lighting, and heating and cooling systems will all play a major role in your utilities bill. You may also wish to give the house a more complete feel by having the brick or stucco facades that only face the front of most McMansions encircle your entire home. It’s small touches like these that make a home unique and valuable.
Freud would be aghast at our preoccupation and obsession with size, but it’s undeniable that we do love things bigger and more extravagant as we can get it, regardless of need or worth. This trend will surely continue in the years to come, at least until we eventually run out of land and are forced to cram into tiny apartments and sleep in containers like the Japanese.
Three Real Estate Investment Techniques to Boost Your Income
July 29, 2008
Planning is the key to any investment strategy. You can look at properties all you want but until you have a plan and act on it you won’t get very far. You must think long term, short term and middle term.
Planning is the key to any investment strategy. You can look at properties all you want but until you have a plan and act on it you won’t get very far. You must think long term, short term and middle term. These three approaches can help you invest profitably.
Holding rental homes over the long term is a proven investment strategy that works. While you provide proper housing at fair rates the renters themselves are paying off your mortgage. You can avoid the hassle of day to day duties by using a property management company.
Long term rental properties are a good way to provide a stream of income in later years. A professional agent can be a power boost to your investment career. Their knowledge of subdivisions, homes and values can help you buy great homes that will appreciate as your renters pay off your mortgage. Owning several of these free and clear when you retire is a no brainer in my book.
Re-habbing properties is another great property investment approach. I didn’t learn this until I was older after I had become a real estate agent. We bought run down properties and repaired them ourselves. Once we got them into great shape we sold them off again, using the profits to fund another deal.
There are a lot of people flipping houses these days. You have to be smart about it. You make your profit when you buy, you collect it when you sell.Once the repair work is done you have many options. You could sell it immediately, put it into rental or lease option the property.
Do you need to earn money to invest? Many of us do and a great technique for doing that is wholesaling. Basically you find a great deal and get it under contract. You can then assign the contract to an investor or retail buyer. When they close they pay your fee. The idea is simple really.
This enables you to make a profit on a home without all the hassles of buying it yourself. It puts cash into your pocket so you can invest it in a flipper or rental. It helps increase your investment capital. You can always do the reverse when buying. Look for a great wholesale property from an investor.
The trick here is to do it on a consistent basis. These three techniques can make you very well off in the long run. By combining the three investment techniques you can develop money to invest, provide current income and invest for the long term stream of income.
Pre-foreclosures - Are they Real Estate’s Most Profitable Gem?
July 29, 2008
Pre-foreclosures properties are homes that are about to go into foreclosure. Some of the best real estate deals are made this way, before they hit the mainstream foreclosure market. Negotiations are usually with the owner directly, who would like to work out a deal before the bank forces them to leave the property.
The number of pre-foreclosures is growing every day. If you’ve kept up with the media recently, you know that investing in pre-foreclosure homes is one of the best ways to make a substantial profit. There are virtually a limitless number of these discounted homes on the market, due to the sub-prime mortgage crisis and the current economic slowdown.
Rather than going to an auction, buying a pre-foreclosure home may be a better option. At an auction, you usually require the necessary cash on hand in order to participate. Without the down payment, you cannot bid. Buying pre-foreclosure homes, however, doesn’t necessarily require any deposit. This is ideal for anyone with limited liquidity, while still enabling them to purchase the home.
The number one benefit of a pre-foreclosure sale is that you communicate directly with the homeowner whose house you may be purchasing, in a more comfortable setting then at an auction. The home owner will likely be anxious about having their home close to being repossessed, however, they should see you as a potential last hope to receive at least something for their house.
As compared to an auction not only can you see the condition of the outside property ahead of time you can also see the inside of the house to determine what kind of shape it is in. In many cases, because the owner has nothing to loose, you will be able to have a conversation with them about any problems you won’t otherwise know about. Depending on timing and willingness of the owner you may be able get a house inspector to look around as well.
This allows you to determine how much effort, if any, will be required to repair the house and at what cost. This will eliminate much of the risk and will help you make a better decision about if the property would be a good investment or not.
So now you can see that buying at the pre-foreclosure stage has some nice advantages over buying at auctions or from a realtor. It really comes down having the right information to make the right choice, at the right price.
Easy Ways of Landscaping Around a Patio
July 29, 2008
You will want to do some landscaping around the patio in order to give it a finished look. This will give off a better effect to the already wonderful addition to your yard. Taking the patio and making a complete transformation into something wonderful can be an exciting job. There are a wide variety of things that can be done to make the patio appear more exciting. Here are just a few to take into consideration.
Of course when you are going to do some landscaping around a patio, you need to take some time and consider how much room you have for your landscaping. Do you have a small yard or a large open space to work with? This will definitely affect what you’ll be able to do with your patio.
Also take into account the amount of money that you have to spend on landscaping. There are many ideas out there, but you can’t act on them unless you can afford them. Before you decide upon how you want to landscape your backyard patio, have a set aside budget for you to follow so you know how much money realistically you have to spend on this project.
One of the cheapest and easiest ways to landscape your patio area is to add bright colored flowers all around. You can easily create a few flower beds on all sides of the patio. If you do not want to do a lot of work, you can find plants that are already potted that you can set around the patio. This will add color too, but you don’t have to worry about planting the flowers.
If you want a more tropical look to relax in on your back patio, there are some landscaping ideas that will help you create your own tropical paradise. Consider adding some tropical greenery, such as some small tropical trees and a few potted tropical flowers as well. No doubt, they’ll look great and make you feel like you’re in an exotic location, right on your back patio.
The use of an herb garden is a great idea for the landscaping of the patio. You can choose between a potted herbs or planting the herbs in the ground around the patio. Herbs are not only useful in cooking but they look and smell great as well.
You can choose to add a waterfall around your patio area. A nice waterfall and a pond next to the patio will allow you enjoy the beauty of the waterfall which will allow you to relax and listen to the sounds of the water. If you can’t afford to buy a large waterfall, a small portable fountain works just as well. This provides you with a beautiful landscape that allows you to relax without having to pay a lot of money.
As you see, there are many great ideas that you can play off of when you decide to landscape around your patio. From tropical ideas to the simple yet beautiful addition of colorful flowers, there is an endless amount of things you can do to make your patio look great. Look at the space you have, make a budget, and decide which ideas work best for you and then start landscaping.
