7 Simple Steps To Real Estate Investing

7 Simple Steps To Real Estate Investing

Whether you are BRAND NEW to real estate investing or an expert in the game, it’s critical that you understand these 7 Simple Steps to real estate investing.

First things first…

• Real Estate is NOT a get rich quick scheme. However, if you learn the foundations and put them into practice, you will make more than enough money to realize any and all of your dreams and goals.

• The real estate bubble is not going to burst! The real estate market will, however, shift and the real estate market will change – just as it always has! What’s “hot” now may turn ice cold in the next 3 years (or perhaps even 3 months). But, there are ways to “bubble proof” your real estate investments. It’s actually quite simple.

Did you know that in the United States, in 1975, the median home price was ,300? In 2005, the median home price was 5,000. Historically, the average home doubled every 7 years. If you do the math, it should be well over 0,000.

OK… Now, having said that… The real estate market WILL change and what is “working” today in real estate may not in the future…  The rental market was strong a decade ago, but has been soft in recent years. We are getting ready for a turn once again.

Real Estate IS a cycle… and cycles have some degree of predictability. With predictability, you can grow your real estate business into a cash-producing, profit-pulling machine that runs itself WITH the changing real estate market trends. It is still possible to make money in real estate. In fact, now is just as good a time as any to get started in real estate investing.

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But, you’ve got to make wise investments. Sure, you may make some SERIOUS cash in pre-construction, but what happens if (no, not if – when) the market shifts and there are suddenly 35 identical properties on the market for sale in the same building? How long can you afford to carry a negative cash flow on the property?

Or how about taking over property ‘subject to’? Sure, it’s a great strategy and lenders may be inclined to turn the other way and not exercise the “due on sale” clause as long as the interest rates are at rock bottom prices (You know, those sellers that you’re usually taking property subject to from usually don’t have the lowest interest rates, right?)

If the interest rates spike to 10-11%, don’t you think lenders might be MUCH MORE inclined to exercise their option to make you pay off the 6.5% note?

What this means is simply that you must be experienced in the basics – the tried and true techniques, strategies and systems that have worked in the past, are STILL working and will work in the future.

You’ve got to have all the tools in your bag so that you can go with the flow and not be affected when real estate markets begin to shift (which they are already in the process of doing, in case you’ve missed that memo!

Step #1 – Set your plan: Figure out what your long term real estate goals are (aka retirement and wealth building) and figure out what your short term needs are with regard to making money in real estate. Then, set up the proper entities and put the plan in place.

Step #2 – Determine what your target market will be: You cannot be all things to all real estate markets. If foreclosures appeal to you, start investing in the foreclosure market. If you want to be a landlord, look to out of state owners to focus your real estate marketing efforts.

Step #3 – Be consistent and persistent: Real Estate is not a get rich quick scheme. Real Estate is get wealthy over time and put some quick cash in your pocket today. You’ve got to follow your plan and stick with it to see real results in real estate. You’ve also got to continue to increase your education and your experience.

Step 4 – Don’t fall into the “Analysis Paralysis”: Learn to analyze properties quickly. Don’t get caught up overthinking. It’s quite simple actually: What’s the property worth? What does the property need for repairs? And how much can you get the property for? It all comes down to numbers!

Step 5 – Become a master of finance!: Real estate is the business of marketing and finance. You must learn about mortgages and interest rates and loan programs that are out there. You must know how to use finance to negotiate your deals and to sell your properties.

Step #6 – Become a skilled problem solver: The reason you will get real estate deals that others don’t, is because you are able to solve people’s problems. Anything goes on the real estate playing field. You’ve got to be ready!

Step #7 – You must continue your education: It is important that you are always investing in your education and learning new tactics, strategies and tips that will help you make more in real estate.

If you enjoyed this article, make sure to look up the other articles discussing The 7 Simple Steps To Making Money on Real Estate.  The next article discusses Step #1 – set your plan in further detail!

7 Simple Steps To Real Estate Investing

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Real Estate Investing Tips Beginners in Real Estate Investment Need to Be Aware Of

Real Estate Investing Tips Beginners in Real Estate Investment Need to Be Aware Of

If you would care to research, you would notice that most of the wealthy and successful businessmen and tycoons have joined the bandwagon of real estate investorsinvesting some of their millions in real estate. The real estate market of well-known cities provide sufficient investment opportunities for low, average, and high budgeted investors. Some of these cities include New York, Los Angeles, and Alexandria; homes for sale in these areas similar with other key cities of the country are waiting for interested buyers who appreciate their nice features and designs. If you are among those who are interested to venture in real estate investing, it would be ideal that you become aware of the valuable real estate investing tips that all novice real estate investors need to understand and keep in mind.

Tip # 1- Thorough learning can be acquired through profound research endeavors

Straightforwardly, you need to beforehand where you should be investing your money and this means you have to research so as to learn the right information and real estate investment tools needed for this undertaking. Without knowing everything first, penetrating the real estate market would be a lot more difficult.

You should also research on particular places like for example  Cibolo or Alexandria real estate and start looking at the potentials of the place when it comes to being attractive investment pieces. If research shows no promising outcomes, do not immediately plunge into it. When investing in real estate, it is important that you are aware of the locations of the best spots. It would be worthy if you create a list listing the best prospects so that you have a clear idea on where you can possible spend or invest your money smartly.

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Tip # 2 – Learn and put into play the power of proper negotiation techniques

One of the most important real estate investing tips that you should always keep in mind when you are negotiating with the seller is do not back down and easily give in. Make it a point to stay within what you have earlier offered and be firm with it. By the way, you should be certain that you have carefully thought about the offer price taking into consideration the important aspects that can determine a good deal from a bad one.

There is nothing wrong with negotiating with the actual seller because this might be the ultimate method on making the better deal. Do not just buy outright because doing so would put your money at the greater risk of not making big profits later on. Keep in mind that in this business, making big profit is the key to being successful, losing money is the way to failure.

Tip # 3 – Know and realize that you may need the assistance of other professionals in the real estate industry

Just like the saying that goes like ” No man is an island,” learning how to make use of the assistance of different real estate professionals like mortgage brokers, real estate lawyers, and real estate agents in the area that you want to invest in. Take for example; you want to invest in Alexandria homes for sale, trying to seek the help of Alexandria real estate agents or brokers when you need some information and guidance would be more ideal that pushing through on your own with much difficulty. You might even be surprised how easily you have accomplished your goals with their guidance and assistance.

Indeed, it is true that investing in real estate is one of the very effective ways to increase profits and many have proven this. However, it can be quite a tricky adventure and would require a certain level of work and effort. Following some of these useful real estate investing tips can help take you to the realization of an investment that is really paying out good and attractive.

Alfred Duncan is a seasoned writer. He wants to share with you how you can find quality Alexandria homes for sale and Alexandria real estate listings in our website.

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Real Estate Investment ? The Brighter Side And Its Indisputable Benefits

Real Estate Investment ? The Brighter Side And Its Indisputable Benefits

From risk factors to rewarding benefits, Real Estate investment has been a booming industry and a magnetic attraction for good number of individuals. With escalating growth in the housing market and financial uncertainty cropping up, a large number of investors are finding Real Estate investment safe and attractive. Frankly speaking, it has got three times more prospects of making money in relation to other business. Land investment, rental properties and personal Real Estate ventures are usually seen as safe choices in the investment arena. However, like everything else, it also invites some risks and hence it is advised to tread on the path of caution prior to plunging into the possibilities. Lets discuss some advantages related to Real Estate Investing.

A real estate property can be procured for a low amount, while the left over sum can be taken on holding the property as security. This is what is known as High Ratio Financing. The remaining amount can be financed against the property. For example if you buy a lavish house worth 0,000 then you are required to just pay the initial amount 10% of the actual sum. The remaining amount that is 90% can be financed against the real property.

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Just like other investments, investing is real Estate is less risky and less affected by financial slowdown. Frankly speaking, Real estate investments are conventionally considered as safe and stable, provided if one considers it with full-heart. When real estate properties and resale profits are at their height, the risks of real Estate investments better sinks. The reason behind its less risky affair may be due to various socio-economic factors, market behavior, location, mortgage interest rate stability, population density of a particular area and more. General rule says, if you have a geographical area, with lots of resource availability and low stable mortgage rates, there is always a greater chance of Real Estate investment.

In Real Estate investment, there is no need to take out all your energies and efforts, until and unless you are foresighted to take the adventure in full throttle. Hence it is necessary to be careful enough, knowing the techniques of making the judicious investments in the right time and manner. Apart from doing bit of a research, you can also rely upon various ways and methodologies, better known as Real Estate strategies that can guide you in the right way.

The government realizes that Real Estate ownership & development is good for everyone. That’s why you will find multiple tax advantages to investing in Real Estate. In addition you will find Mortgage interest pretty much deductible in most situations. In some situations, based on how you finance and handle your Real estate investments, Profits can be considered tax deductible.

Hence, a Real Estate investment can be described as the commitment of financial resources for the sole aim of preserving and increasing capital and reaping huge profit margin.

Cyrano is an investor and real estate agent who believes Real Estate investment with its benefits and stability makes it one of the best choices for the starting up of investment portfolio.

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Trading Up Using the 1031 Exchange

Trading Up Using the 1031 Exchange

In spite of decreasing real estate values across the nation, real estate investors continue to come up with innovative ways to make their investment turn out profitably.

 A powerful method for building real estate holdings is the use of 1031 Exchanges, which lets investors defer capital-gains assessment on investment property by reinvesting sale proceeds into the purchase of new property within a set time period.  Though 1031 Exchanges have grown in popularity as the number of active real estate investors has grown, 1031 misperceptions continue.  Here are some basic 1031 Exchange questions.

What is a 1031 Exchange?

A 1031 Exchange is a tax avoidance tool that allows you to defer capital gains tax to a later date when selling investment real estate, permitting you to reinvest money  from the sale of one property to another.  You are, essentially, ‘exchanging” one property for another investment property of equal or greater value.  When the replacement property is ultimately sold (not as part of another exchange), the original deferred gain, plus any additional gain realized since the purchase of the replacement property, is subject to tax.

Why do a 1031 Exchange?

There are three basic advantages to investors in making an exchange:
1. To grow your portfolio:  In deferring your tax burden, you are getting an interest-free loan on the tax dollars you might have owed on your property sale. Your immediate tax savings is, thereby, employed instead as investment capital in a replacement property.

2. To convert your “gain” into immediate equity and tax-free cash:  The 1031 Exchange provides more equity, which lets you to move up into properties of increasingly higher appraisal every time you perform a 1031.  Also, there’s an another benefit:  Once your old property is sold and the succeeding property is purchased, you can turn around and refinance the new property, taking cash out as a loan for anything you want, and the money tax-exempt as income.

3. To utilize as an estate planning tool:  Families that intend to pass along real estate holdings typically deed them into a family partnership or LLC (limited liability company).  Management income can continue to be drawn from the properties by the parent or principle, but heirs will inherit the property without taxation .and “can continue to 1031 Exchange the property and grow a real estate portfolio,” according to attorney David P. Greenberger.

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How do I get started?

The opening move is to identify real estate to purchase, and contract to sell your property.  Although you can sell your property to anyone you want for an exchange, you must identify in a written document signed by you and executed with a qualified exchange agent, the property you plan to buy within 45 days of giving up your original property.  The exchange, or final sale of the property, must be completed within 180 days after the transfer of your property.  Sale proceeds must be escrowed in an account with a qualified intermediary, until your “exchange” is complete.

What if you can’t locate a property within 45 days?

There are no extensions allowable.  So, it is important that you start researching your acquisition as soon as you anticipate your sale is close at hand, and try to time the closings accordingly, since 45 days goes by very quickly.

Is there a limit to number of properties that are identified in the 45-day period?

You may identify more than one property as a potential replacement property, but be aware of the rules.  You can identify up to three properties without consideration to fair market value or you may identify any number of properties provided that the total value does not exceed 200% of the value of the original property sold.  You don’t have to close on all properties – and you may prefer to identify several just in case the sale of any one falls through.  But you must be in compliance with these rules … or you pay taxes!

Is there a limit to the number of properties I can “exchange?”

You may “exchange” a single property for multiple properties. Or, you can buy a single property from the proceeds of several, as long as all the related timeline, identification and value rules are met. However: proceeds not used to purchase new investment property are taxed as a cash sale.  So, if you “exchange” only part of your original sale profits, you will be taxed on the rest.

What are “qualifying properties”?

* Exchanged property must be of “like-kind,” which broadly speaking means property of greater or equal value.  You can exchange a duplex for a five-story building or even a vacant lot, as long as you meet all other 1031 requirements, including the holding time required before re-selling real estate.

* Property exchanged must be held for productive use in trade, business or investing, which may include a residential rental property, strip mall, warehouse or land held for speculation.  Private residences or land in a developer’s inventory to sell later are not permissible.  It is possible for property purchased in an exchange to be converted at a later date to a primary residence or a vacant lot may ultimately be sold to a developer, but it is tricky.  Therefore, it’s advisable  to consult with a 1031 expert and wait at least two full tax years before to do this.

Trading Up with a 1031 Exchange

It should be apparent, the tax-deferred exchange is a excellent way to build up your net-worth and maximize your investment dollars.  There are many more aspects to the 1031 exchange instrument that are not discussed in this article that advanced property investors regularly utilize, such as using them in concurrence with “triple net leases.”

However, the regulations regarding 1031 exchanges are complex, they vary from state to state, and are subject to change by the IRS.  It’s best for property investors of all skill levels to consult with a professional trained in these transactions on a regular basis, as well as with your accountant, before engaging in a 1031 exchange.  Once done, you will be able to trade-up on a tax-free basis and accumulate a significant real estate portfolio applying the tax code to your best advantage.

* Excerpted from “Real Estate Flipping: Growing Rich Buying and Selling Property,” by Mark B. Weiss, C.C.I.M., published by Adams Media.

 

WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this complete statement with it: ‘“The Investment Property Insider” is published by Craig S. Higdon, a veteran commercial mortgage banker. He publishes the e-zine and blog, http://www.InvestmentPropertyInsider.com, for commercial real estate investors, developers, and industry professionals. Visit the blog and get this free report: “The 7 Biggest Loan Mistakes Real Estate Investors Make And How To Avoid Them.” ’

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Learning Secrets Through A Real Estate Investing Seminar

Learning Secrets Through A Real Estate Investing Seminar

If you are a real estate investor, beginner or experienced, it is important for you to learn about real estate investing. One of the ways you can learn about real estate investing is through a real estate investing seminar.

When many people first become interested in real estate investing, they think of it in the same way as investing in stocks and bonds.

Just as must as real estate investing is similar to other kinds of investments, it is also very much different from these traditional types of investments. In a real estate investing seminar you will learn about how you can invest in real estate and make a profit.

Before you attend a real estate investing seminar, you should be forewarned that sometimes these seminars are not what you would expect. In many cases, the seminars do not have a lot of funding for speakers.

In addition, real estate seminars do not operate for a profit. Because of this, speakers often are not paid. When you attending a real estate investing seminar you might notice that many of the speakers seem to be attempting to sell some kind of merchandise. Although this might not what you expected, keep in mind that even these seemingly salespeople also have a vast amount of experience that you can learn from.

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Even though you might experience these sales pitches at some real estate investing seminars, this certainly doesn’t take place at all seminars.

One of the things you will learn at a real estate investing seminar is current market trends. Speakers will tell you everything you need to know about the current real estate market.

In addition to market trends, you will also learn tactics and strategies that will be useful in your real estate investing endeavors.

You might hear of several different kinds of strategies depending on the speaker. Keep in mind that what worked for one investor might not necessarily work for all.

Still, it is good to take notes on what each speaker has to say. This way you get a full picture of strategies you might add to your investing portfolio.

Depending on the purpose of the real estate investing seminar, you might hear any of an assortment of different topics. There is much to the world of real estate investing, far more than can be covered in a few days or even a week.

Some topics at the real estate investing seminar might be covered in detail, while others might only be glossed over with a provision of high level concepts.

When you attend a real estate investing seminar, you should take the opportunity to network with other real estate investors. Unless you work for a real estate investing company, you might not get the chance to meet other investors.

Attending a real estate investing seminar gives you the chance to make contact with real estate investors that might be of some benefit to you in the future. While you might learn a lot during the real estate investing seminar, you can learn much more outside of a seminar type setting. The contacts you make at the seminar will serve as resources in the future.

If you have something that experienced real estate investors can gain from you, they will be more willing to pass on valuable information to you. Just going to the meeting will be stimulating and help give your business a boost.

Claim a free e-book that will show you a system used to control .1million worth of real estate for just – and you can follow this system to do the same. Comes with resale rights from: Free Real Estate Fortunes Ebook

Ways To Maximizing Your Commercial Real Estate Financing

Ways To Maximizing Your Commercial Real Estate Financing

Locating financing for every commercial project is not always an easy feat. Many items can affect the acceptance of a loan, how much is loaned, and under what specific terms the loan is given. As a commercial real estate insider, it is important to always be completely prepared when approaching a lender, whether it is a commercial bank, savings and loan company, or a private investor.

The key to success in commercial real estate is maximizing all aspects of the business. This includes resources, energy, time, return on investment, as well as financing. Without good financing and a dependable lender, commercial real estate is not a business to be in, unless, of course, you have your own multi-million dollars lying around just waiting to be invested. In some cases this may be true, and congratulations! However, for most of us, we rely on other people’s money (OPM) to build the wealth and riches we dream about every day.

In order to get the financing you need absolutely every time you apply for it, you must take some necessary steps and precautions that prove your project is worthy of the money loaned to you.

I must insert here, that because of the amounts of money that are loaned in commercial real estate, almost everything can be non-recourse, and written that way in the contract. Non-recourse means that no one must personally sign for the loan. In fact, the borrower is often secondary to the actual property and project in question. The property acts as the guarantor of the loan. After all, this is where the actual money and value lies, not in the borrower’s pockets.

Always remember that the property is responsible for returning the money loaned to the lender, because that is where the value is found. The lender must trust the borrower and his or her assessment of the property, its intended use and projected income or profit of the property in order to feel completely comfortable with loaning the money.

So what are some steps and precautions you need to take in order to yield the results you want with the lender every time?

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What you want to do is build a development or loan package for every property for which you want money. This package is much like a business proposal, and must be done professionally, accurately, and clearly. This loan package should have everything the lender needs to make a decision whether or not money should be lent on the project.

The most important aspect of this loan package is the reason for the loan. Generally, it must be a solid, economic reason that shows the income projected and exactly what funds will be available to pay the lender back. After all, the number one concern of the lender is that the loan will be paid in full, with the interest agreed upon in the contract.

This economically solid reason may be shown through income and expense sheets, comparisons to other properties similar to the one you will be working on, and any other important economic information that proves you can pay the money back.

Because every project is different, it may require varying criteria that must be met. For example, if it is a corner lot for a shopping center, traffic counts, whether or not there is a light on the corner or a four lane road, and the location of the closest residential development that will support this shopping center area are all facts that must be included in this loan package. Population, growth, any future changes in infrastructure that might affect your project and so on must all be addressed, as it is necessary to your specific project.

Bottom line, you must have every ounce of supporting detail regarding your property, project and projected income. This loan package should be like you are optioning your first born child, and he means everything to you. I know this simile is extreme, but that is how money is borrowed by the commercial real estate insider.

Impress the lender with a profitable project, quality and accurate information, and you will get your money.

Many lenders, especially if they are local, may know an area well, and will automatically be able to assess your project as something they will or will not support. There may be other lenders that are thousands of miles away, and know nothing about your area of interest. The distance of the lenders can affect the feasibility of a project, and some would say you would not need to provide as much information for the local lender as you would the far distanced lender. However, I say, if you want the money, do it the same for each lender.

Look at it this way. If your local lender does not finance the project, then you can easily transfer your loan package to another lender no matter where they are located.

Consistency in quality will earn you a reputation as someone to do business with. This is exactly where you want to be in this business: reputable, honest, and one good real estate insider.

As you increase the amount of financing you need, build rapport with the lenders you have and will work with. Always present yourself to these lenders in a professional, intelligent manner, and be perfectly prepared to do business.

Always follow a specific lender’s application process and guidelines. If you do everything the way they want you to do it, they look to you as someone who is dependable and willing to make things easy and straightforward, without a lot of road blocks along the way. The smoother you can facilitate the process, the more likely you are to get the money you need.

Lenders are concerned with one thing, making profits by getting their money back with interest. The object is simple. Show them your project can do this, and you will get your money. Have a defined amount of money you need, and stick to it. Don’t ever be wishy-washy, and stand your ground on what it is you want to accomplish.

Maximizing your financing is an asset to the commercial real estate insider. Your ability to conquer more and more opportunities relies greatly on your ability to get funding; so master this skill, and you will be on your way to a real estate fortune!

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