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A good form of real estate investing

June 15th, 2008
Most of us who want to invest in real estate and are total amateurs in the field, suffer from a huge dilemma regarding the field in which they want to make their debut. There are basically two different avenues of real estate investing in which you can make a lot of money and make respectable income every year. These two avenues include the rehabbing and the wholesale sector. You can also try renting your real estate and become a property owner.
 
While wholesaling and rehabbing may provide you wit huge sums of money at irregular intervals, renting the property gives you the opportunity to get a steady source of income. You can actually consider the entire real estate investing market as a triangle and the three avenues mentioned before are at the edge of this triangle. One can consider the wholesaling business as the bottom of this triangle.
 
Wholesaling is the base of the triangle that assures the investor with a huge amount of money at regular intervals and this method of investing also injects a huge amount of money into the capital of the investor thereby increasing the capacity of the investor. For starter it is ideal to star off with a wholesaling business, since the wholesaling business increases your capital by a great degree and enhances the confidence of the investor.
 
Wholesaling is also known as flipping the property and it is most certainly the best way to increase the capital of the investor by a great amount within a span of about thirty to forty five days. This is considered as one of the most interesting things about wholesaling real estate.
 
Once you have earned the list of investors who are going to help you with finance in this project then all you need is to buy a house with a good bargain and then you can get the buyers to pay for the house and sell it off in a cash price. The whole procedure does not take more than 1fifteen to twenty days. Besides who would want to repair properties that are in bad condition, and put them up for sale? Wholesaling properties is the most hassle free way to make the maximum profit within the shortest of times.
 
This process takes a lesser amount of time than when you sell the property off a buyer who does not pay with cash but needs financing. Suppose the financing will require you to certify it, you may also have to get he appraisal before you can go on with the sale.
 
The basic fact why people prefer wholesaling rather than rehabbing is that all the time that we spend in repair and maintaining the house, money keeps flowing from your pockets , but when it comes to wholesaling the property all you need to do is find the best way to sell off the property in a smaller amount of time. So, most of the investors opt for the wholesale business.

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All You Need To Know About Real Estate Foreclosure

April 21st, 2008
If you want to invest in the foreclosure market then it is the right time to do so, the number of foreclosures has increased to great degree in the last year. So in case you want to start a foreclosure investing business, all you have to do is just jump into the wagon.  Here is what you can do to beat competition and emerge victorious at the foreclosure market.
 
The entire foreclosure market depends entirely upon the rate at which you bu the houses, unless the rates are very low you cannot make a substantial amount of profit from this business.
 
Usually most of the home owners who have mortgage loans for their houses and are defaulters for the payment of the principal and the interest for more than 120 days are legally foreclosed.
 
Here are some tips that will help you make better deals in the foreclosure market.
 
Ø Ruthlessness: generally home owners whose houses are going to be foreclosed most often are going through financial crisis so it is better to give them the hops of obtaining money the fast way. One way will be to run advertisements like “houses bought for cash” etc.
 
Ø Considering the requirements of the homeowners:  in case you chance upon a homeowner whose foreclosing date is drawing near, and they have not been able to maintain the house to normal standards. Then a good deal will be to offer the homeowner with fifty percent or less than that out of the total equity of the house.
 
Ø Get a pre approval: in case of properties where you are not provided with the pre existing finances then the best possible thing to do will be to get a pre approval. This will hasten the process of acquisition of the property.
 
Ø Do your homework: before you go about making offers to the homeowners, make sure that you have done your homework well enough. Always make sure that the buy will be a good one and you will be able to sell it off at a larger price. One way to determine the equity of the property will be to determine the market value of comparable properties in the area. Another important factor to consider is whether the market is inclined towards the buyer, the seller or even for both of them; this will largely determine the nature of your dealings.
 
You can also add up the debt and the expenses of the repair and other expense that may accompany the equity. Most of the dealers usually make the mistake of over bidding on a certain property tat will surely lead to losses in the later stages.
 
The foreclosure bandwagon is getting filled up as time progresses but the fact remains that even though there are many competitors out there, but profit making is purely determined by the dexterity of the investor.
 
Always remember that if you are well researched and well educated in this field then you will surely succeed and try to keep a watchful eye on the foreclosure listings on the Internet at all times. The Internet is a very useful resource and careful use of it will provide you with numerous houses that are to be foreclosed.
 
 

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Recognize A Good Investment

January 16th, 2008
Many people get excited at the thought of investing in real estate. Everyone knows you can not make a bad investment when it comes to buying property. This is not the case. It is a myth created in the real estate world. You need to learn how to recognize a good investment.
 
There are many signs when you look for them. To recognize a good investment you must first know your market. This is done by researching the sales in the area. You may find a property for sale with the asking price of $100,000.   It may seem like a good investment. If the properties in the area are selling for $95,000 this means the property in question is not a good investment. Should you find the properties are selling for $135,000 the property may still not be so good. You need to know how long it took the other properties to sell. When the market is moving slow, like six months to a year, the properties in this area would not be worth the effort. You should find another area.
 
You will learn to recognize a good investment when you start checking the neighborhoods where you want to buy. Areas full of empty lots, run down buildings, and other signs of recession should be avoided. Areas where there is new construction or signs of growth should be looked at.
 
Once you find a potential investment property, the real investigating begins. You will want to determine if there have been any upgrades or major structure changes in the property. The best way to do this is to check the permit office for any permits that have been pulled for the property. This will give you a better idea of what the property owner feels the home is worth. The reason you want to know this is because when you make an offer, you will want to know if the owner will stick to what they are asking.
 
You will also want to know if there are any plans to change the zoning in the area. This can make a big difference on whether the property is a good investment. If there is growth in the area, you may find the zoning is due to be changed from multi-family to commercial. This could make the property go up in value. The opposite is true with other zoning changes.
 
To recognize a good investment make sure the property is being sold under market value, the area is growing, and the zoning is going to be in accordance with what you are buying. Have a contractor inspect the property to determine if there are any major repairs which may need to be done. You do not want to buy something to sink money into it.
 
There are some properties in depreciated areas that can be bought for a song. These are the types of properties you may want to look at if you are planning on selling by land contract. Some of them can be bought for as little as $500 in certain areas of the country. You can fix up the outside and sell them for $1500 down and a set monthly amount. This can generate a positive cash flow very quickly. Take note the only thing you should fix on a property like this is the outside. The new owner will take care of the inside. These types of properties can be a good investment for the experienced investor.
 
As you make more and more deals, you will recognize a good investment when you see one. A good one can make you money. A bad one can cost you a fortune. You must know what you are looking for then investing in real estate.

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Investment Properties

January 10th, 2008
Investment properties must be looked at for what they are, investments. You are buying the properties to make money. When you find a property which looks like a sound investment, do some research. It may sound like a good deal, but with some research into the market you may find it is overpriced for the area. Overpriced to an investor may not be overpriced for the market.
 
A home may be on the market for X amount of dollars, say $50,000. The home has 2 ½ baths and four bedrooms. There is 2,700 square feet of living space. In some markets this is a steal. In other markets this could be a rip off. You will need to know your market. Once you do then you can run a market analysis on the property. You may find it is the only house in the neighborhood like it. All the others are two bedroom bungalows. 
 
If the market the home is located in is strictly a senior retirement area, you will have a hard time selling this property. It is not a good investment property. Could you move it a mile or two it might be. Where it is located makes it undesirable. You do not want a home no one else wants either. Do not waste your money.
 
Drive around the areas in which you would like to invest. Look at the other properties. Watch the people.  You can tell quite a bit just from this action. You will know if the neighborhood has a lot of children and if it’s someplace a family might want to live. You may notice it is all young people. These might be college students or newlyweds. It may be the perfect area to find a rental investment. Until you know the market, there is no sense in even looking at properties. You could find yourself stuck with an albatross.
 
When you are looking for investment properties pay attention to the amenities. Some areas have homes with pools that sell quickly. Other areas may have a home with a pool you could not give away. The market will dictate what sells and what sits. You want to find a house that will sell. If the three and four bedroom two story is what is selling, it would not be smart to buy a two bedroom ranch.
 
The amenities can overprice a home. Someone who thought they were going to grow old and die in a home may have went to town with remodeling. They may have put in solid cedar closets in the bedrooms. Cherry cabinets went into the kitchen. They may have installed a central vacuum system. This may have been a great thought when it was done. The price will reflect these improvements. The seller will most likely never get out of the house what they want because the amenities are too much.
 
You need to pay close attention to the appraisal value of the home. With the housing crisis spreading across America, some of the values have been over inflated. You will want to hire a private appraiser to determine what the true value of the home really is. You may be surprised at what this reveals.
 
Investment properties can make money for you if you understand the strategy behind investing. If you are just wanting to buy and sell because you think this is how it is done, then you may be in for a shock. Research what some of the more successful investors do to make their money. Experience can be a great teacher. Learn from their’s not yours.

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Home Inspection Extras

December 16th, 2007
When you pay for a home inspection, you are going to get a professional who can take a comprehensive look at your home and then provide you with a detailed report. But guess what? Your home inspector can do more than just that. There are several extras that a home inspection company may offer. If you do not know about these, you may be missing the boat when inspection time rolls around.
 
So what are some of these extras? First off, and quite important, is a radon test. Radon is a harmful substance that can leak into your home from the foundation. This is not necessarily common, but certain areas of the country have been known to have many homes affected by this. Over the long term, it is believed that excess exposure to radon can cause some sorts of cancer. Obviously, this is something that you want to protect against. Luckily, most home inspection companies will also offer a radon test. This is something that you should definitely consider buying if offered. For only another $100 or so, you can get your home tested for this problem.
 
Another common extra is a wood infestation test. Again, this may not be a common problem, but depending on where you live it could be a problem nonetheless. As you probably know, termites and other wood damaging insects can cause a lot of problems. This is especially true if they have taken over the interior walls of a home, or have moved into an attic or other crawl space. For a relatively reasonable fee, you should be able to add this to your basic home inspection. Just like the radon test, this is something that you should consider buying.
 
As you can see, you are going to have to pay extra to have a home tested for radon and wood infestation, but it is well worth it. If these problems are present, you want to make sure that they are taken care of before you move in. This way, you can either fix the problem before you move in full time, or negotiate with the seller to have them taken care of. Either way, paying the extra money at the time of a home inspection for these extra tests is a good idea.
 

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Do you need a Property Manager?

October 16th, 2007
Do you need a property manager? This is a question that a lot of new real estate investors struggle with. While there are some people who think that a property manager is a necessity, others will tell you that this is nothing more than an added expense. The fact of the matter is that you need to make this decision on your own. It is up to you to decide whether or not hiring a property manager would help your situation, or do nothing more than get in your way. Either way, you need to make your mind up on this as soon as possible.
 
In most cases, the investors who need a property manager are the ones who own more than one property. After all, trying to keep all of your investment homes organized can be difficult to do. But with the help of a property manager you will always have somebody on your side to lend some assistance.
 
Of course, even if you only have a couple of rentals you can still hire a property manager to work on your behalf. But remember, you will have to pay him or her to do the work for you. This means that your profits are going to be cut into before you know it. To some people this is well worth the money because it saves them from having to deal with the day to day grind of staying up to date with investment properties.
 
So what are some of the things that a property manager can do for you? All in all, their main goal is to manage your property on a daily basis. Managing real estate means doing everything from collecting rent to answering questions about repairs and maintenance. Are these things that you would rather not handle on your own? If so, it is time for you to consider hiring a property manager. For the most part, you can tell them what you need done, and if you find the right person they can help you out with every last task that comes up.
 
A property manager can also be a major asset if you are thinking about expanding your portfolio of real estate properties. Remember, as you buy more and more homes your workload is going to increase. So even if you are handling one or two homes just fine, if this number increases to three or four you may begin to slow down quite a bit. This is when a property manager can move in and really take over all of the day to day tasks that have been holding you back.
 
Finally, an experienced property manager can also help you with any questions that you may have. And as a new real estate investor this is very important. When you hire somebody who has been around the industry for a while, it is safe to say that they have seen just about everything. Not only will this help you, but it will do the same for your tenants. For this reason, you need to hire a property manager that knows a bit about the area you are located in.


Overall, the decision to hire a property manager is up to you. If you are getting along fine without one, you may want to keep things this way for the time being. But if you are struggling to keep up with all of your work, what is the point in waiting? You would be much better off hiring a property manager that knows what they are doing. You will have to pay them for the services that they offer, but it will go a long way in helping to keep all of your properties organized. And when you are organized it is safe to say that you are going to have a better chance of growing your investment business in the future.

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Never Settle When Negotiating

October 11th, 2007
Negotiating a real estate deal is where you will make or break future profits. The less money that you pay for a home, the more money you are going to make when you begin to rent it out at a later date. But with that being said, negotiating is not quite as easy as it sounds. Sure, you are going to do your best to get a low price, but guess what? The seller is going to be working hard to get the most money possible as well. To get past this, you should strive to strike a deal that suits both you and the seller. When both parties mutually agree upon a deal, it is safe to say that you will get what you want while the seller will as well.
 
The biggest mistake that you could make when negotiating real estate is to settle on something that you are not comfortable with. In other words, you do not want the seller to pressure you into doing something that does not suit your buying power. Instead, you should have an idea of what you want to do in your mind, and then stick to this no matter what.
 
So what does it mean to settle when negotiating a real estate deal? Simply put, if you do something that is not what you want, you are settling for the sake of buying the property. This may end up working out for you in the end, but at the same time, it could end up being a mistake that you regret.
 
Is settling always a bad thing? This all depends on how bad you want to buy the property. Do you think that you can make a good profit even if you do settle and end up paying a higher price? If so, you may simply want to bite the bullet and move forward.
 
Before you decide to settle and more or less give into the seller, you will want to take one last crack at bringing the price down. Try something to the effect of, “if you take $1,000 more off the price we have a deal.” This will usually show the seller how close you are as well as how serious you are about making a deal. More times than not, if you make an offer like this, you will close the deal.
 
Do not settle when buying real estate unless you are 100 percent sure of what you are doing. You never want to regret your purchase at a later date.
How to form a Counter Offer
 
Forming a counter offer is part of buying a home. This holds true no matter if you are buying real estate to live in, or if you plan on using it as an investment. The fact of the matter is that the counter offer you make will have a lot to do with whether or not you get the home that you are interested in.
 
There are many steps that go into efficiently forming a counter offer. You may think that there is no art to this, but nothing could be further from the truth. When you deal appropriately with a counter offer you will have the best chance of closing a deal in the end.
 
Here are three steps to consider if you are faced with putting a counter offer together. By following these in order, you should have no problems having something to send back to the seller.
 
1. Before you do anything, consider the offer that the seller came back with after your original. In many cases you may find out that this offer is good enough to make a deal. But remember, you should be 100 percent comfortable with this before you decide to accept it. After you sign your name on the dotted line there is no opening discussions back up.
 
2. When forming a counter offer you want to remember that insulting the seller is a bad thing. Luckily, if they have already countered once, you know for sure that you are at least in the ballpark. For instance, if the list price was $115,000 and your original offer was $100,000, the seller may come back to you with a counter of $110,000. It is now your job to choose a number in between that you think is fair. Most people will agree that countering a bit more than the halfway point is a good idea. In the above case this would be an offer in the $106,000 range.
 
3. If you are tired of negotiating, and have done everything possible, you may want to consider a “take it or leave it” counter offer. In other words, you will counter with a final number while telling the seller that you cannot do any better. There is nothing wrong with doing this, but remember that you may get turned down. The seller has every right to say thanks but no thanks to a take it or leave it counter. As long as you are prepared to possibly lose the deal, you will not have any problems doing this.
 
As you can imagine, you do not have to follow the above steps in order when forming a counter offer. You may want to start out thinking about a take it or leave it offer; especially if you have gone back and forth with the seller on several occasions.
 

No matter what you do, make sure that you keep two things in mind when negotiating via counter offers. First off, you need to respect the seller at all times. They are going to try to get the best deal, and so are you. Additionally, you want to make your counter offer with mutual negotiations in mind. This means that while you want to get the lower price,

you will still want to do what is best for both parties. In other words, try to be as fair as possible without compromising your position.
 

Overall, the counter offer that you make on a piece of real estate will determine how much money you ultimately pay. In turn, this will have a large effect on how long it takes you to profit on your investment.

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Negotiating a Deal

October 8th, 2007
Investing in real estate is not all about buying, and then making money immediately. There are many details between the first step and profits, and you need to be aware of these. One of the most important details is the art of negotiating a good deal. If you overpay for a property you are not doing yourself any favors. All this means is that it is going to take you longer to earn your money back. And who wants to wait longer than they should to see profits?
 
When negotiating a real estate deal there are several things that you should keep in mind. Here are three of the most important aspects of negotiating with a high level of success.
 
1. When negotiating a real estate deal you should never insult the seller. Some people think that they know so much that they really insult the seller during the process. If you do this, there is a good chance that the seller will pull the plug, which means that you will miss out on a potentially profitable deal. Even if you are not being treated greatly, during negotiating you should always respect the other party. It will get you what you want in the end.
 
2. Even though you want to get the best deal for yourself, you need to realize that the seller is trying to do the same thing. Your goal should be to agree on a price that is mutually accepted. If you feel that you are being ripped off you will not want to go through with the transaction. And guess what? This same credo holds true for the seller. This is why you need to negotiate with a win-win situation in mind. When you do this, both parties will be happy with the end result. You will be surprised to find out just how much easier things will be if you work to find a mutually agreed upon price.
 
3. Never feel that you have to make a deal. Until you sign on the dotted line you are not obligated to do anything. There may be times when you think that you are negotiating a good deal, just to get cold feet at the end of the process. If you run into this situation, take a step back until you get in a better position. You should never purchase real estate unless you are 100 percent sure of what you are doing. If you do, this could end up as a huge mistake that could cost you a lot of money.
 

There is no way of knowing what you will run into when negotiating a real estate deal. Sometimes the negotiating process will go quick and easy, but other times you will be dealing with a difficult seller who is making your life miserable. You need to be prepared for every situation that you come across. When you are ready for anything, you will find that negotiating turns into one of your strong points. And as a real estate investor this is definitely a good thing.

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The Ins and Outs of For Sale by Owner Real Estate

September 12th, 2007
Knowing the ins and outs of for sale by owner real estate may be of great interest to you. When it comes down to it, there are two sectors of people who may feel that learning about this type of real estate will be advantageous to them. Do you know who these two groups are?
 
Obviously, if you are thinking about putting your home on the market, you may want to learn more about for sale by owner real estate. There are many people who would only sell with an agent, but this number is dwindling as each year goes by. In today’s day and age it has become easier than ever before for owners to sell on their own. This does not mean that selling by owner is easy, but all in all, it is more than possible.
 
On the other side of the market, there are those people who are interested in buying a piece of for sale by owner real estate. As a consumer you may not find yourself searching for these homes, but there is a good chance that you will come across one that you like. If you do, you will want to make sure that you know just how to move forward with the buying process. After all, when there is no real estate agent involved you are going to have to make sure that you know exactly what you doing. Remember, a real estate transaction is not always self explanatory.
 
Any time that a for sale by owner real estate transaction is taking place things can get a bit tricky. Not only is there a lot that the seller needs to be aware of, but the buyer is in the same shoes as well. The fact of the matter is that even though money can be saved by not hiring an agent, there is a lot more work that is called for. No matter if you are a buyer or seller you need to make sure that you are ready for this added responsibility. Some people think they are just to find themselves hiring an agent after a few weeks of stress.
 
For sale by owner real estate is nothing to be afraid of. As long as you know the facts that surround these transactions you should be able to move forward with buying or selling.

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What is For Sale by Owner Real Estate?

August 20th, 2007
If you do not know what for sale by owner real estate is you must not be living in the United States. Over the past five years, this type of real estate has really taken off. This is not to say that it is better than using an agent in order to sell, because this is based on opinion, but it is becoming more popular. There is not a lot that you need to know about for sale by owner real estate, but just like everything in this industry, there are some things that you will want to know before getting started.
 
First off, this type of real estate is just what it sounds like. When you sell your home by owner you are going to take care of everything on your own; without the help of a real estate agent. As you can imagine, this will put you in a very different position than if you were to use an agent. After all, you will be on your own, which can often times be both a good and a bad thing. It is nice to be able to do what you want, when you want, but at the same time, you will not be able to ask an agent questions if you need assistance.
 
When you are selling your home by owner you will be in charge of any detail that you can think of. You will have to get all of the signs that you need for your yard, and then begin to market your property as you see fit. Even though this may sound like a lot of work, it is not something that should scare you away from for sale by owner real estate. You may be the type that likes to do things without help, and if so, you are definitely moving in the right direction.
 
As you can see, there are no secrets that hide the details of for sale by owner real estate. You need to know that this is a way of doing business, and that it is beneficial depending on the situation that you are in. The only thing that you want to do is make sure that you compare selling on your own to using an agent. If you do this, you will find out soon enough which one is best for you.

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