Friday, April 27, 2012
The Benefits Of Working With A Real Estate Mentor
Chances are, you could learn the ropes of real estate investing yourself, without a real estate mentor. However, a mentor will help you avoid the pitfalls that can cost you time and money. A trained expert will teach you to uncover more opportunities for new deals that will increase your income and success in real estate. Your relationship with a consultant is not really about coming up with great concepts and ideas, but more about making sure you execute a solid game plan that produces results for you. Its the same reason why some people hire a personal trainer to workout with them at the gym. You know what you should be doing, but you're just not getting the job done on your own. And once you hire someone to coach you, guide you, suddenly you find yourself getting more productive and accomplishing your goals much easier. Many beginning real estate investors fail because they don't understand the basics of investing. A real estate consultant can help you figure out exactly what you need to understand, what skills you need to acquire, and how to apply what you learned helping you develop self-confidence and self-trust. A mentor will give you realistic advice on what you should be doing, what to stay away from, and how to manage your time effectively in order to get it all done. Successful business owners recognize that they need to work with professionals who can give them a more objective perspective on what they're doing all the time, and in doing so they know they'll maximize their effectiveness.
Top Reasons to Hire a Property Management Company
A good property management company is one of your greatest assets, and necessary tools that can confidently help you maximize the return on your investment property safely. While every landlord or investor situation is different, there are certain questions you should consider that will help you determine if you should hire a property manager. (1) How far do you live from your rental property? Depending on your work schedule, and distance from your property, it can easily become tempting to not keep a close eye on things, and that can be a recipe for disaster. (2) Do you have experience with maintenance repairs? Maintenance is an important component of land lording. By hiring a management company you gain access to their in house maintenance crew, as well as their network of contractors who have already been vetted for good pricing and quality work. (3) Do you have local knowledge of rental rates? Overpriced properties sit vacant while other properties get rented. Knowledge of rental rates is a key factor to fast rentals and quick cash flow. (4) Do you have a system or strategy to collect rent? The way you handle rent collection can be the difference between success and failure as a property owner. By hiring a PM, you put a buffer between yourself and the tenants making collections easier. (5) Do you know the proper way to screen and evict tenants? Property managers have set standards and requirements for accepting or declining an applicant ensuring you comply with fair housing rules and state regulations. Additionally, regarding evictions, there are strict laws concerning the eviction process, and doing it incorrectly when trying to evict a tenant can be a MAJOR Fiasco costing you time and money. A good property management company will help free up your time for doing deals that make money as opposed to dealing with non-money producing activities like tenant placement, eviction, repairs, and collections.
Friday, January 13, 2012
Buying Real Estate with Self-Directed IRAs
Today I would like to share with you another investment tool used in real estate. This tool is called a Self-Directed IRA. We will only cover a few basics about what is a SDIRA, and how you can accelerate your investment career using it. A self-directed IRA is an individual retirement account that gives the IRA owner greater control over their investment decisions. Simply put, a self-directed IRA allows you to use your retirement fund to invest in nontraditional investments, like real estate, trust or mortgage deeds, private placements, tax liens and so on. This allows you to compound your assets quickly with investments you select. The profits made from your real estate investments are tax-free, as long as those investments are held by your self-directed IRA.
The first thing you need to do is find a custodian, preferably a bank or trust company, which accepts real estate in a self directed IRA or real estate IRA. Once you have selected one, set up a self-directed IRA with your IRA custodian. You then finance the self-directed IRA account with funds, or transfer money from either a previously held retirement account or one that an employer is currently funding.
One great vehicle that can accelerate the value of your IRA would be Income Producing Property. If the property generates any income through sell, rental or lease of the property, the income must flow back into the IRA. This is because the purpose of your IRA is to provide for your retirement in the future, not to benefit you now. Using a Real Estate IRA to purchase real estate is one of the best ways to add to your portfolio and save for your future. With cash-flow and appreciation, real estate has a potential higher rate of return than stocks and mutual funds. Also the profits you make from these investments have huge tax benefits. Another great benefit is that the property or properties can be sold at any time to an unrelated party and the proceeds from selling an IRA-owned property roll back into the IRA without facing capital-gains taxes. You can then invest the proceeds in another property or any other asset within your IRA.
Given the uncertainty in today’s mainstream investments, real estate is gaining a great deal of interest as an investment option. Whether your investment strategy is to buy & hold, or buy & sell for gain, real estate investing through your IRA can yield unbelievable profits towards your retirement.
The first thing you need to do is find a custodian, preferably a bank or trust company, which accepts real estate in a self directed IRA or real estate IRA. Once you have selected one, set up a self-directed IRA with your IRA custodian. You then finance the self-directed IRA account with funds, or transfer money from either a previously held retirement account or one that an employer is currently funding.
One great vehicle that can accelerate the value of your IRA would be Income Producing Property. If the property generates any income through sell, rental or lease of the property, the income must flow back into the IRA. This is because the purpose of your IRA is to provide for your retirement in the future, not to benefit you now. Using a Real Estate IRA to purchase real estate is one of the best ways to add to your portfolio and save for your future. With cash-flow and appreciation, real estate has a potential higher rate of return than stocks and mutual funds. Also the profits you make from these investments have huge tax benefits. Another great benefit is that the property or properties can be sold at any time to an unrelated party and the proceeds from selling an IRA-owned property roll back into the IRA without facing capital-gains taxes. You can then invest the proceeds in another property or any other asset within your IRA.
Given the uncertainty in today’s mainstream investments, real estate is gaining a great deal of interest as an investment option. Whether your investment strategy is to buy & hold, or buy & sell for gain, real estate investing through your IRA can yield unbelievable profits towards your retirement.
Thursday, January 12, 2012
Should I Invest In Real Estate In Todays' Market?
While the timing may be right, there are several common questions that can help first-time investors take advantage of what might be the opportunity of a lifetime.
1. Is this a good time to invest in real estate?
2. What’s the best strategy for this market?
3. How can I protect myself in this economy?
When the money is cheap to borrow and the houses are cheap to buy, it's a great time to invest in real estate. While the timing may be right, first time investors should partner with experience. If you find an experienced real estate agent / investor who would be willing to work with you in exchange for the capital you can provide, this will give you the opportunity to acquire investment knowledge and experience firsthand. Not only will they help you locate promising properties, the agent will be very careful with what they recommend and expect to do business with you again in the future.
Everyone want to know the best strategy for the market or how to make the most money with the least amount of time and effort. This depends on many factors such as are you looking to build a long-term wealth portfolio? Do you have money to put into the deal? Do you have credit? Or are you looking to generate quick cash? If you are looking to buy property in hopes of renting it out, location is always key. Homes with multiple bedrooms and bathrooms in highly populated areas are ideal neighborhoods. Renters gravitate to good school districts in safe neighborhoods. The more you have to offer in amenities, the more likely you are to please potential renters and buyers if you ever choose to sell.
A good way to protect yourself when investing is to lay aside your emotions! Sorry, but investing in real estate involves risk. In order to minimize your risk, you always need to evaluate deals carefully and look at the long-term picture. There’s a clear, but big difference between taking a risk on a well-researched investment and being tricked into losing your money. Know your source! If you take the time to find a good adviser who is right for you, you are much more likely to make good investment decisions. Don’t buy an investment that you don’t understand. Your chances of losing money are greater. The bottom line is that you need to get educated, evaluate deals objectively, and proceed with healthy caution. Happy Investing!
1. Is this a good time to invest in real estate?
2. What’s the best strategy for this market?
3. How can I protect myself in this economy?
When the money is cheap to borrow and the houses are cheap to buy, it's a great time to invest in real estate. While the timing may be right, first time investors should partner with experience. If you find an experienced real estate agent / investor who would be willing to work with you in exchange for the capital you can provide, this will give you the opportunity to acquire investment knowledge and experience firsthand. Not only will they help you locate promising properties, the agent will be very careful with what they recommend and expect to do business with you again in the future.
Everyone want to know the best strategy for the market or how to make the most money with the least amount of time and effort. This depends on many factors such as are you looking to build a long-term wealth portfolio? Do you have money to put into the deal? Do you have credit? Or are you looking to generate quick cash? If you are looking to buy property in hopes of renting it out, location is always key. Homes with multiple bedrooms and bathrooms in highly populated areas are ideal neighborhoods. Renters gravitate to good school districts in safe neighborhoods. The more you have to offer in amenities, the more likely you are to please potential renters and buyers if you ever choose to sell.
A good way to protect yourself when investing is to lay aside your emotions! Sorry, but investing in real estate involves risk. In order to minimize your risk, you always need to evaluate deals carefully and look at the long-term picture. There’s a clear, but big difference between taking a risk on a well-researched investment and being tricked into losing your money. Know your source! If you take the time to find a good adviser who is right for you, you are much more likely to make good investment decisions. Don’t buy an investment that you don’t understand. Your chances of losing money are greater. The bottom line is that you need to get educated, evaluate deals objectively, and proceed with healthy caution. Happy Investing!
Tuesday, February 15, 2011
Real Estate Deal Making:
Another way to get great real estate deals is by pre tax sales. I am not interested in buying a property at a tax sell , but before it make its way to a tax sell. In the Memphis area, our local newspaper has a published listing of these properties that will be heading toward a tax sale approximately 4-6 weeks before the date actually arrives. The surprising thing to me is that when you start contacting owners of properties with delinquent taxes, some of them actually don’t know that the property was going to tax sale. PLENTY of time for me to make a deal with a motivated seller. Contacting them and explaining how you can help out their situation that needs immediate attention will have you looking like the knight on the white horse. Our Local municipalities cares absolutely nothing about the equity involved, they only want the tax situation resolved. What a win win situation, you helped a home owner sell fast and bought a home with a significant amount of equity for pennies on a dollar.
Friday, February 11, 2011
Lethal Investing Mistakes
I wanted to share with you all several common mistakes new investors make when buying real estate.
(1) Having no exit strategy and planning as you go: Many new investors look at real estate as a transaction instead of an investment strategy. You create value when you buy well below market, and make money when you sell. You must have a solid plan in place to profit from it. (2) Paying too much: You can not use the bank sale price to determine what to offer on a foreclosed home. We have been buying and selling foreclose properties for a long time, I am here to tell you that the banks list price may or may not have anything to do with the value of the home. Know the market value, take into account the amount of repairs needed and cost, what is my exit strategy, your offer should reflect real numbers and your built in profit.
(3) No resources: You have got to be working with a company that is in the know. You will almost never do a real estate deal if the company or person you are using relay on one source of information. I call them part timers. You can be a part timer, but the company you work with needs to be active in the market. The best deals are the ones that the public has no knowledge about.You can create wealth and solve problems by becoming a distribution center for people who need to sell fast, and buyers who are loooking for a great deal. If you work with the right team, they can save you time, money and minimize rookie mistakes.
(1) Having no exit strategy and planning as you go: Many new investors look at real estate as a transaction instead of an investment strategy. You create value when you buy well below market, and make money when you sell. You must have a solid plan in place to profit from it. (2) Paying too much: You can not use the bank sale price to determine what to offer on a foreclosed home. We have been buying and selling foreclose properties for a long time, I am here to tell you that the banks list price may or may not have anything to do with the value of the home. Know the market value, take into account the amount of repairs needed and cost, what is my exit strategy, your offer should reflect real numbers and your built in profit.
(3) No resources: You have got to be working with a company that is in the know. You will almost never do a real estate deal if the company or person you are using relay on one source of information. I call them part timers. You can be a part timer, but the company you work with needs to be active in the market. The best deals are the ones that the public has no knowledge about.You can create wealth and solve problems by becoming a distribution center for people who need to sell fast, and buyers who are loooking for a great deal. If you work with the right team, they can save you time, money and minimize rookie mistakes.
Tuesday, January 25, 2011
Cash Flowing in a Down Market!
Today I would like to share with you a great technique on how to cash flow in real estate in a down market. In todays market, there are a lot of homes for sale that will continue to sit and become COLD LISTINGS. But with the right leverage and technique, you can turn a cold listing to a hot cash flowing property. To own real estate is great, but to control it with out ownership is even better. Let me show you how. You find a seller that has trouble selling their home. Maybe they took a job in another state, divorce, or inherited the home from a family member. For whatever reason the property is vacant, and needs to sell quick. Lets say they are asking for $50,000 for the home, and it will appraise for $65,000 easy in a down economy. For this to work, you will need to be open and honest with the sellers about your intentions for the home. Now pay attention! You offer them the full asking price of $50,000. They owe $25,000 with a monthly mortgage of $400. You are sure that you can rent the property for $650 a month. You explain to the seller that you would like to lease the property with the option to buy and the right to sublet the home. You all come to a written agreement allowing you to lease the home for 2 to 3 years with the option to buy,with a down payment of $1,000 nonrefundable and monthly payment of $400. You now find a buyer who would like to lease the property from you, who now has full control of it. You lease it to them for 1 year at $650 a month with a nonrefundable down payment of $2,500, and selling price of $65,000. They now have 1 year to aquire financing to purchase the home from you who control the deal. Now you have turn a cold listing into a cash flowing home. You made $1500 off the option fee, $250 for 12 months in rental income, and $15,000 when the home sells to your end buyer. Now everyone is happy!
Subscribe to:
Posts (Atom)