Online Trading Systems

Real Estate Investing - Working With Your Real Estate Attorney

admin — Wed, 05 Jul 2006 04:27:02 +0000

Purchasing or selling a home will probably be one of your largest and most important financial transactions. Before signing a contract to purchase or sell a home, both buyer and seller should consult an attorney to assure that the real estate transaction will be handled legally and professionally.

Although an attorney is not a required part of the process, particularly in many states where escrow companies will attend to all closing transaction details, an attorney can protect your interests and help you resolve any potential legal problems before entering a legally binding contract.

Sometimes buyers feel the need to sign a contract quickly and don t have time to initially consult an attorney. In these cases, buyers can include language in the contract that will allow their attorney time to give final approval on the agreement usually within three to five business days. This allows both buyers and sellers to expedite the contract process without fear of inadequate legal representation.

Sellers and buyers alike should familiarize themselves with the real estate transaction process before selecting an attorney. Learning the formal steps in the transaction will help buyers and sellers choose the right attorney and proceed with confidence. Throughout the process, attorneys should attend to a variety of responsibilities, including consultation prior to the signing of the contract, preparing or approving the contract, examining documents and supervising the closing of the transaction.

The attorney should be responsible for preparing or evaluating documents which may be necessary for completing transfer of the property. There are usually several documents to prepare in any real estate transaction, and the attorney can evaluate and explain each document to the buyer or seller whom he or she represents. The deed, the bill of sale, mortgage, promissory note, title commitment and the closing statement are only a few of the important documents that an attorney should review with the seller or buyer prior to the closing.

One of the attorney s most important responsibilities in the real estate transaction is to determine the condition of the seller s title to the property. Through this process, the attorney will discover if the seller is the legal owner of the property and if there is an unpaid mortgage or lien which must be settled before the title to the property can be properly transferred. The attorney will also discover any restrictions or easements which are on the property and the status of any unpaid property taxes or assessments.

The buyer, the seller and their attorneys usually appear together at a final meeting to review all closing documents. As this meeting, usually referred to as the closing, the attorneys help explain, sign and exchange the documents and approve or clear up any remaining financial matters relating to the transaction. After the transaction is closed, an attorney will attend to any final details such as properly recording the deed, mortgage or other necessary documents and issuing title insurance policies.

Many attorneys are specialized, and it is important that you choose one who knows real estate terminology and real estate transaction processes. Before hiring someone, you should discuss all the details of the transaction with your possible candidate, including all legal costs you will incur.

The attorney s duty in any real estate transaction is to provide legal expertise. Through sound advice and thorough execution of all legal responsibilities, a good attorney will help you complete your transaction swiftly and with confidence.

W. Troy Swezey is the author of WORKING WITH YOUR REAL ESTATE ATTORNEY.” As a Realtor at Century 21 Paul & Associates, he has helped many individuals with their real estate needs. Visit his web site to download his free e-book, REAL ESTATE SECRETS EXPOSED. http://www.TroyIsMyRealtor.com or mail to: TroyC21@usa.net

That was another interesting and enlightening article about real estate investment, both commercial and domestic investment properties, investing in tax lien certificates and 401k investing. We also report on the latest real estate investment portfolios and look at some real live investing scenarios. We hope you find this information useful.

We consider all articles published on this site to be republished with the permission of their author whose copyright we acknowledge. All articles are reproduced in the form originally provided. If you are the author of this article and consider there to be material errors, please advise us.

We are constantly requiring new material related to real estate investing, tax lien systems and 401k investing in general. If you are an investing professional in the real estate industry, or have examples of successful real estate investment strategies and have original written material available for publication, we would be pleased to hear from you at Real Estate Investing.

Real Estate Investing - Will You Be the Next Virtual Real Estate Millionaire?

admin — Tue, 04 Jul 2006 10:27:08 +0000

Have you heard the term Virtual Real Estate?

This is a buzz word or catch phrase commonly used by
renowned traffic guru, John Reese. If you haven’t yet
heard of it, then mark my words and take note, you WILL be
hearing a lot about it in the coming weeks, months and
years!

Virtual Real Estate, or VRE as it is commonly known, is a
marketing technique used to profit from your website
traffic. This term is derived from using the space
(virtual real estate) on your webpages for the purpose of
inserting pay-per-click advertising, such as with Google
Adsense.

For example, here’s how Google Adsense can be used to
generate an online income… http://www.wltrc.com/

This is a pure content site that does not promote a single
affiliat product. But notice how Google ads are interweaved
within the content of each page? This makes the ads more
relevant to what the visitor is looking for and as a
result, the reader is more likely to click on the links to
gain more information about his topic.

And here’s the good part… everytime someone clicks on
one of these links the site owner generates an income. The
level of income is determined by a number of factors, of
which the most important factor is the price that the
advertiser was willing to pay for each click-thru as you
earn a percentage of this amount.

You can get more detailed information about how Google
Adsense works by taking the quick guide tour at…
http://www.google.com/services/adsense_tour/

For the next few years internet marketing is about to
experience an explosion of the likes not seen before and it
will all be centered around Virtual Real Estate. And just
as with property real estate, there will be many
millionaires created from Virtual Real Estate.

The only question you need to ask yourself is… do you
want to be part of it? Do you want to begin making huge
sums of money from one of the most opportunistic and
exciting times in internet marketing history?

The growth of internet marketing in the last few years has
been phenomenal as more and more people join the queue in
an effort to supplement their existing income. As a result
thousands of new marketers are looking for the fastest and
most cost effective methods to drive traffic to their
websites to either generate sales or leads (most times
both).

While organic search engine traffic is still the most
effective method available for generating free traffic,
it can take many months, even years, before you begin to
see results (if any at all). New marketers simple haven’t
got the luxury of waiting this long. In order to survive
they need traffic cheap… and they need it now!

So the next best option of grabbing the fastest and
cheapest traffic is via online advertising, as provided
by various pay-per-click auctions. This option is quickly
becoming the number one method of traffic generation on
the net as it is a fantastic medium for generating instant
targeted traffic/leads for virtually any niche market on
the planet.

However, as with any business, price is determined by
supply and demand and as such the open market sets the
price. In other words, the greater the demand… the
greater the price. We are now seeing the effects of this
struggle between supply and demand as people are becoming
more and more willing to pay a higher price for each
keyword so they can keep one step ahead of the competition.

As a result of this competition, this traffic (leads)
are only going to become more and more valuable, which
means the in.come generated from each keyword is also going
to become more valuable. The smart marketers quickly
realized this and have been effectively using Google
Adsense to generate huge sums of mon.ey on a monthly basis.

But the real beauty about this technique is that it’s
totally hands-free and can be set up to run on complete
autopilot with minimal manual input. This leaves time for
you to do the things you want to do and not having to spend
countless hours in front of a computer screen handling
customer concerns, questions or complaints.

With the popularity of Google’s AdSense program, Virtual
Real Estate is poised for major growth and there’s never
been a better time to develop and create content-rich web
sites so that you can be well placed to grab a good size
helping of the Adsense marketing pie!

Not only that, but rumors are that Yahoo will shortly
release it’s own pay-per-click version to combat the
success of Adsense. This means that even more profits will
be able to be gleaned from online advertising, but only if
you’re ready for the profit onslaught!

The Virtual Real Estate Boom is coming… are you ready
for it?

Will you be the next Virtual Real Estate Millionaire? About the Author… Dave Isaacs is the co-author of “Your Journey to Freedom”, an online marketing newsletter where even if you only went to school to eat your lunch, have no income and you’re deep in debt, you can learn how to really succeed online… http://www.infinite-revenue.com/ezine/

Real Estate Investing - Why You Should Invest In Real Estate

admin — Mon, 03 Jul 2006 18:27:02 +0000

Why real estate, or why property, some people ask when looking for an investment. Well, as far as I am concerned, real estate/property investment is, and always has been, the most powerful type of investment for building wealth. It has been said that over 90% of the world’s millionaires got there by owning property. The reason property is such a powerful way to build wealth is due to one key concept: leverage.

Once I realised this, I didn’t look back. Now if you are an experienced investor this may be obvious, but for the benefit of those who haven’t seen the light, let me explain … Leverage is your ability to magnify your returns by using other peoples’ money (in this case, it’s usually the bank’s money).

To give a clear example, say you have 20,000 to invest. This can be a lump sum or by releasing equity in your main residency.

So what is the best way of investing this money?

Option 1

Stick it in your local bank - by some considered the safest option, “at least you can’t lose it, and you get some guaranteed increase in value” usually goes the argument.

Money in the Bank - assumed return: 4%
Now 20,000
1 Year 20,800
5 Years 24,333
10 Years 29,605

As you can see, after 10 years, you’ve made virtually no progress at all, especially when you consider the effects of tax and inflation.

Option 2 Stocks and Shares

Now over the last 10 years, although admittedly not in last 4 years, the stock market has been very popular. However I cannot accept it is a better bet. When I read that the stock market is a better bet over the next 2 years as will go up by 15% a year, as opposed to the property market that may go up by 5% a year this does not take leverage into account and so paints a very distorted picture!!

And I will show you why. It’s hard to say what sort of return you might get on the stockmarket, but let’s say you get 12% a year for the next 10 years - very unlikely, but let’s just go with this. So if you could beat the odds and get a 12% return every year ……

Money in the Stockmarket - assumed return: 12%
Now 20,000
1 Year 22,400
5 Years 35,247
10 Years 62,117

Now that s a big increase on sticking the money in the bank, but clearly is not guaranteed. But can you do better?? I think you know what I m going to say?!

Option 3 Property

One of the great things about property is it enables you to leverage the ?20,000 to purchase a ?100,000 investment property (in other words, borrow the remaining ?80,000 from the bank). Now say the property market slows down to an average of only 6% return for the next 10 years. This would probably be a fair estimate in the UK, although there are plenty of markets which are growing more rapidly, lets concentrate on UK for this example.

Money in Property - assumed return: 6%
Now 20,000 ( 100,000 property value 80,000 mortgage)
1 Year 26,000 ( 106,000 property value 80,000 mortgage)
5 Years 53,823 ( 133,823 property value 80,000 mortgage)
10 Years 99,085 ( 179,085 property value 80,000 mortgage)

Make sense? So you make 6% increase on the full value of the property, not just the 20,000 which you initially had. This is the power of leverage. In effect you have increased your initial investment 5 fold in 10 years! So even if the stock market increases by twice as much per annum as the property market over the next 10 years, you can make far more money from property.

Now for simplification, I have not included lawyers fees, agents fees or stamp duty. Admittedly buying a property has more additional costs than buying shares, but this would not make a significant difference on your profits - around 4% in the UK, higher overseas.

One thing to point out is that in the short term you have greatly increased your potential loss i.e. if the property went down by 10% in value, you would lose more of your initial investment, because the property value would go down to 90,000, you still owe the bank 80,000, so you now have 10,000. In comparison if the stock market dropped by 10%, your investment would be worth 18,000, as only lose 10% of 20,000.

However over a length of time, using leverage to good effect and using all the other skills you need when buying property, property is by far the best investment, for the majority of individuals.

The figures I have used have been very conservative, many individuals are making far more than this on property, whereas anyone making the same returns on the stock market, will generally be benefiting from some sort of insider dealing or be very high up in the company, I would imagine!

About The Author

Alan Forsyth is a full time property investor and developer with 10 years experience in UK and overseas. He is managing director of http://www.property-investment-tips.com which offers free independent advice and tips on property investment, courses, countries, strategies, mortgages and much more - with a free newsletter every 3 weeks giving latest tips and offers to over 1000 investors. Sign up today at the site for free independent advice!

alan@property-investment-tips.com

Real Estate Investing - Why Real Estate Investment?

admin — Mon, 03 Jul 2006 17:27:03 +0000

Why should you invest in real estate? Well, investing in real estate for profit is one of the most popular approaches to generating additional income in the United States today. In fact, if you pay attention to recent press you will have seen numerous reports about the real estate investment craze that seems to be sweeping the Nation.

When done carefully and intelligently, real estate can yield fantastic benefits that can not be achieved through any other type of investment. Here are just a few examples of why real estate investing can be such a powerful wealth generator.

1. Real Estate Markets Are Slow to React - Although real estate, like everything else, has ups and downs, it is generally a lot slower to react than the stock market. For example, you won t get up in the morning and discover that your real estate investment is worth ten or twenty percent less than it was yesterday.

2. Leverage. You can borrow money to buy real estate, whereas, generally you can not borrow money to buy stocks. You can control a large dollar value of real estate with a small amount of your own money by using loans and mortgages. The stock market, by law, limits the amount of leverage (margin) you can use to buy stock. There are no such limits with real estate.

3. You Can Purchase Real Estate For Less Than Its Market Value. In many cases you can purchase a property for as low as 60 to 70 percent of the market value. When buying stocks, you may be able to find a stock that is considered under valued but generally that s tough to do.

4. Real Estate Offers A Tremendous Amount Of Tax Advantages Through Depreciation. Real estate basically has two values, the land and the building(s) on the land. For example, if a property is valued at $250,000 and the assessed value of the land is $75,000, the building would be worth $175,000.

The government allows real estate investors to depreciate the value of the building in equal parts over its useful life which is defined as 27.5 years. So for example, based on the $175,000 building value above, the annual depreciation value would be $6,363.63 ($175,000 divided by 27.5). This means that for tax purposes, the investor would be able to reduce his/her annual income by $6,363.63!

Many people find the notion of depreciation to be confusing since it s not really a loss of money. I recommend you check with a qualified tax professional for more details and how this can benefit you.

5. Real Estate Markets Are Insulated Local Markets. For instance, when the stock market falls, it takes down just about everybody and everything involved with it. When home values drop in one city such as New York, generally it does not affect property values in other cities like Boston or Chicago. To protect yourself, you can have a geographically diversified portfolio of real estate investments to hedge against these types events.

6. You The Investor Can Control The Value. Another aspect of real estate investment is that unlike any other investment, this investment is controlled by the investor. For example, as an investor, you can increase the value of your investment property by making some modifications to the property such as adding a garage or replacing the carpet, etc. With stocks or any other investment, the investor can t do anything to increase the value of the investment.

7. The Efficient Market Hypothesis (EMH). When a market has prices that always “fully reflect” available information, it is called “efficient . The stock market for example is considered by most to be an efficient market. When you call your broker to purchase or sell a stock, you can be sure of one thing the price you bought or sold the stock for was indeed the correct price for that stock on that day and at that time. Why? Because the existing price for the stock will already incorporate and reflect all relevant available information about the company such as earnings, and other metrics.

With real estate, the market is very inefficient. Unlike the stock market, with real estate, the correct price discovery mechanism is left to each buyer and seller to figure out on their own. There is the almost always uncertainty as to whether the price offered by the seller is too high or too low. Moreover, there is typically little to no help available from analysts and research agencies (like when dealing with stocks) in this respect. This inefficiency is the very reason why real estate offers such a great investment opportunity to be smart and win! But it requires experience and a sharp eye for good deals and great negotiation skill. This expertise can be developed.

If done correctly, real estate is probably one of the smartest investments you could ever make. Hopefully this short rambling has provided you with a fresh perspective of the many benefits of real estate investing. So be smart, continue to learn and above all don’t wait for some magic moment, just get started.

To Your Success!

Rik Foote

About The Author

Rik Foote is the President & CEO of The Dorian Group, Inc. Dorian is a software company that develops affordable software applications designed to help beginners get off to a realistic and practical start as real estate investors. To learn more about Dorian s products and services visit www.reiscouts.com.

Real Estate Investing - Why Invest in Real Estate in Asheville, North Carolina?

admin — Sun, 02 Jul 2006 21:27:03 +0000

Asheville, North Carolina, home of Vanderbilt s Biltmore Estate and the five star resort hotel, The Grove Park Inn, is now one of the most popular places to retire, relocate, or purchase a second home in the Eastern United States. In the early part of the 20th Century, millionaires and well-healed tourists chose Asheville as their getaway. West Asheville, once the downtown district, is undergoing an exciting revitalization. The quiet streets of Montford, close to present day downtown, have undergone an extraordinary facelift over the past five years, revealing well-crafted architectural and building techniques of early 20th Century America.
Asheville ranks high on the list for many who want to purchase new homes, buy existing homes, or invest in or renovate historic residential properties. Asheville Board of Realtors1 states (www.abr-nc.com) In 2004 the average selling price of homes, condos and town homes increased by some 15 percent in the area served by the Western North Carolina Regional MLS, according to Regional MLS figures. Geraldine Melendez, Director of the Home Buying Program for the Affordable Housing Coalition in Asheville stated, Housing costs in Asheville have risen 85% in the last 10 years. This is the fastest appreciation rate in the state of North Carolina.
Asheville is in the midst of a real estate boom, and is gearing up to gather more momentum, with no signs of slowing down progress. Just ten years ago, Asheville was a sleepy little mountain town on the cusp of the Blue Ridge and Smokey Mountains, with tourism and health care as main industries and a downtown district that was mostly boarded up.
In 2005, downtown Asheville is thriving with restaurants serving international, continental, southern, and fusion cuisines and boasting a hip bar scene which is attractive to the young professional set. Young high tech professionals longing to escape crowded urban areas such as the Raleigh Triad or Charlotte are choosing Asheville as a better alternative. Why? Asheville is a growing town, not a big city. The clean outdoorsy lifestyle is appealing, there is culture and fine dining here, and housing costs are still less expensive than other metropolitan areas. Asheville s mountainous landscape is appealing, and rural Appalachian towns are a mere 15-30 minute drive from downtown.
Asheville has also become a mecca for retirement. In June 2003, University of North Carolina Asheville (UNCA) achieved a long sought after goal since the early 1980s. UNCA recognized the trend for retired individuals to relocate here, and opened the North Carolina Center for Creative Retirement or Reuters Center.
On the outskirts of Asheville and in the city itself, new homes are being built and sold to retired individuals from the Northeast who cut their property tax bill by two thirds, and take equity from their lifelong dwellings to make cash purchases of new homes in the shadow of the high mountains.
Many families who have either lost their homes or have tired of boarding them up repeatedly are fleeing hurricane season in places such as Florida, Southern Alabama, and Mississippi are on the move to the Asheville area.
Coming from places such as New Mexico and California, and other areas, artists, musicians and writers seeking a new life in a culturally diverse environment have chosen Asheville as their new locale.
When my clients ask me Why invest in real estate in Asheville, North Carolina? I have many reasons to give them. Asheville is the Land of the Sky and thrives because of its diverse population. Asheville s historic downtown is well preserved and manicured with delightful gardens. Because of this, Asheville s nickname is garden city.
If Asheville s statistics and relocation trends are not enough proof, just look around the city. People are investing their money in houses and commercial buildings dating from the roaring twenties and pre-World War II, and renovating these structures with flair and an eye for historic detail. With paint, new siding, refurbished flooring, new flowerbeds and a variety of tools, many, like myself, have embarked upon renovation projects downtown, in Montford, West Asheville, and other locations.
Call me at 828-255-VIEW (8439) or e-mail me at noelledumas@charter.net
to discuss some of the best areas within and outside of Asheville to retire, relocate or purchase a second home. I can provide some excellent details on available housing in the trendy desirable locations like Highlands, Boone, or Lake Lure or help homebuyers relocate inside city limits.

1Asheville Board of Realtors captured the percentages on real estate appreciation in the Western North Carolina area, which includes Asheville, for 2004

About the Author

Noelle E. Dumas grew up with an appreciation for food, family and historic properties. She earned her degree in industrial design and began to work with historic real estate investment, renovation preservation, and interiors. In 2000, Noelle moved to Asheville, North Carolina and began her real estate career at Keller Williams. Visit http://www.3Datkw.com or e-mail noelledumas@charter.net for more information.

Real Estate Investing - Why A Team For Real Estate Investment?

admin — Sun, 02 Jul 2006 14:27:02 +0000

I had a hard time at first with real estate investment. One of the reasons was that I tended to be a “lone wolf,” trying to do too much myself. I’ve since learned that to really do well investing in real estate, you need to have a team of people you can trust and rely on. Here are some possible team members, and what they need to be on the team.

1. Real estate agent. A licensed agent with experience in the area you invest in and access to the MLS (Multiple Listing Service), can be a great help. If she is a seller’s agent, she can still ethically bring the best deals to you once she knows you’re a serious buyer.

2. Real estate attorney. This should be someone familiar with the laws and legal customs of your area, and have experience with the type of deals you intend to do (If you are buying rentals, she should be familiar with doing evictions, for example.)

3. Accountant or bookkeeper. Keeping proper books for real estate investments is getting more complicated with all the tax-law changes. Find someone that understands the law, and what you want.

4. Mortgage broker or banker. The first can offer many options, but the second can make the loan decision. Each has their advantages, and you could use both. In either case it’s important that they understand what you want (fast closings, lower interest, corporate loans?)

5. Appraiser. Not only can a good appraiser give you an accurate valuation of a property, but they should be able to suggest ways in which you can raise the value of a property. Use someone that will talk to you.

6. Inspector. In some areas it is easy to become an inspector with little experience. It’s best if you use one that is or used to be a contractor, so he can find the problems AND give you some idea of the cost of repairs.

7. Insurance agent. A good one will understand what you want, and find ways to save you money. Insure all your properties with one agent, and you’re likely to have discounts available, and better service.

8. Escrow officer. They will usually be with a closing company. Look for someone that’s efficient, and can explain things clearly to both sides. If he is confused by a slightly creative contract, he should educate easily or be replaced.

9. Cleaning person. Having a trusted person or crew ready means a fast turn around when you buy a rental or rehab project.

10. Property manager. Be sure that the company you hire has exerience, is responsive, and will have time when you call. A good property manager can tell you BEFORE you buy, what you should get for rent in a given area.

Real estate investment is less stressful and more profitable with a good team on your side.

About the Author

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

Real Estate Investing - Wholesale Real Estate Investing

admin — Sun, 02 Jul 2006 02:27:02 +0000

Consider these parameters for a real estate deal:

Property Value: $250,000 Purchase Price: $160,000 Repairs: $2,500

If you analyze the numbers, you see that the equity available in this deal is $87,500 (Property Value minus Purchase Price minus Repairs).

So here’s a hypothetical question for you: Assuming that the information above is accurate, and the property is located in an area that you view as acceptable and/or favorable, then:

If I offered to give you this deal in exchange for $10,000 in cash, would you do it?

Remember - this is hypothetical. The real question here is this:

Would you exchange $10,000 in cash for $87,500 in equity?

For most savvy investors, the answer is: Absolutely YES!

This is called “Wholesale Real Estate Investing” - the process of buying a lot of equity at a very significant discount from another real estate investor who has already done the hard work of finding a deal and getting it under contract.

Just think about that - consider how easy real estate investing would be for you if you had a network of real estate investors in your area (and maybe even all over the country) who, several times each month, offered you the opportunity to purchase significant amounts of equity for a severe discount…

…It would be quite easy to become wealthy, fairly quickly, wouldn’t it?

The answer again, is: Absolutely Yes, it will.

It is through smart “wholesale real estate investing” that you can increase your net worth by $20,000 to $100,000 on every real estate deal that you do.

…Now the burning question becomes, “Where exactly do I find these wholesale real estate investing deals?”

I know of at least 3 solid sources…

You’ve got to admit - it will be a pretty wonderful thing when you know how to find great real estates deals in which you can trade a small amount of cash for a large amount of equity without even having to find the deals yourself…

…And that’s exactly what “wholesale real estate investing” is all about.

So let’s get right to it. Here are 3 places to find wholesale real estate deals:

1.) Visit the local real estate investing club in your area. Almost all of these clubs have networking opportunities to work with other investors who wholesale deals regularly, and this is an easy way to find great opportunities.

2.) Watch for ads in the newspaper, television, and in other media that advertise slogans like, “We Buy Houses”, or “Sell Your House in 9 Days” or anything similar to that. Most of the time, these people are real estate investors, and they are happy to wholesale deals to people like you.

3.) Watch your email-box. Why? Because if and when you choose enrollment in various free e-courses online, such as that via tm-RealEstateInvesting.com, you’ll be provided with automatic notification about great local and national deals as they become available. But be forewarned - you’ve got to act quickly whenever these deals are announced, because obviously the response is always significant.

Happy Hunting!
About the Author

Brad Eden is a Entrepreneurial Sciences expert with 14 years of industry experience in real estate, marketing and technical communication. Brad owns & operates a free traffic resource for entrepreneurs. http://www.americanfreetraffic.com/home.html

Real Estate Investing - Which Type Of Real Estate To Invest In

admin — Sat, 01 Jul 2006 16:27:03 +0000

There are different types of real estate, and different ways to invest in them. Which way is best is for you to decide, according to your particular needs. Here are a few ways to consider, with their advantages and disadvantages.

1. Rental houses. Advantages: One of the easier ways to get started, and good long term return on investment. Disadvantages: Being a landlord isn’t much fun, and you typically wait a long time for the big pay-off.

2. Rent-to-own houses. Advantages: When you buy, then sell on a rent-to-own arrangement, you get higher rent, and the buyer is usually responsible for maintenance. Disadvantages: The bookkeeping is tricky, and most tenants don’t complete the purchase (this can be an advantage too, but it does mean more work for you).

3. Low income rentals. Advantages: The same as with any rentals, but with higher cash flow. Disadvantages: The same as with other rentals, but with more repairs and tenant problems.

4. Fixer-uppers. Advantages: A quick return on your investment, and it can be more creative work. Disadvantages: Higher risk (many unpredictables) and you get taxed heavily on the gain.

5. Buy for cash, sell for terms. Advantages: You get a high rate of return by paying cash to get a good price, and selling on easy terms to get a high price AND high interest. Disadvantages: You tie up your capital for a long time.

6. Buy land, split it and sell it. Advantages: It is simpler than most real estate investments, with the possibility of great profits. Disadvantages: It can take a long time, and you have expenses, but no cash flow while you wait.

7. Boarding houses. Advantages: You can get a lot more cash flow renting a house by the room, especially in a college town. Disadvantages: You can get a lot more headaches renting a house by the room, especially in a college town.

8. Commercial real estate. Advantages: Long term triple-net leases mean little management and high returns. Disadvantages: Tough market to break into, and you can lose income on vacant storefronts for a year at a time.

9. Buy, live in it, and sell. Advantages: The new tax law means you can fix it up, and sell for a big tax-free profit after two years, then start the process again. Disadvantages: You have to move a lot.

10. Speculation. Advantages: Buying in the path of growth and holding until values rise can yield large profits, especially if you buy low to start. Disadvantages: Prices aren’t that predictable, you have expenses with no income while you’re waiting, and transaction costs can eat much of the profits.

About the Author

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

Real Estate Investing - Where To Invest In Real Estate

admin — Sat, 01 Jul 2006 01:27:03 +0000

Where should you invest in real estate? If you know an area well, and have enough experience investing in real estate, you can make money almost anywhere. However, there are always places that are better or worse for real estate investments - places that have a better demand/supply ratio. Use the questions below to find them.

Demand Questions

1. Is the population growing fast? Check the US Census figures online, or ask the local government if they have the statistics. Stay away from areas that have little growth.

2. Is job growth decent? Again, ask local authorities or use the census information. You want to see job growth equal to or exceeding population growth. The people have to have money to pay for housing.

3. Decent quality of life? This is subjective, but important. Are there theaters and bookstores? Count coffee shops and cafes. Trendy areas usually have increasing demand for housing. It’s also a good indication of a high quality-of-life if people are willing to take lower-paying jobs just to live there.

4. Wealth in the area? It is always a good sign when there is some degree of wealth in a town. Count rich homes. Wealth means everything doesn’t die when the economy slows.

Supply Questions

1. How much new construction? The census figures can tell you what’s happened over the last ten years. Then check with the local authorities to see if the the number of housing units they’ve issued permits for is more or less than the expected population growth.

2. How many homes for sale? A lower supply of homes for sale means upward pressure on prices. This indirectly drives up rents as well, which makes for better investing.

3. Rent and vacancy levels? Are rents high enough to justify investing? Are vacancies low? When we first came to Tucson, every building had vacancies, and we saw a man holding a sign that read, “Apartment - $250 Per Month.” Great place for renters, but not a great place to invest in real estate.

4. Available land that is buildable? Less is better for future appreciation. When the land runs out, the prices start accelerating upwards.

Use these questions to compare various towns and cities, and you’ll see the differences more clearly. You’ll see how housing demand compares to supply in each. Finally, you’ll see where it is better to invest in real estate.

About the Author

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

Real Estate Investing - Where Real Estate Investing and Speculation Collide

admin — Fri, 30 Jun 2006 06:29:04 +0000

Investing vs. Speculation is a collision of epic proportions! What’s the difference? Lots. Read on. The difference can be the difference between big money and big trouble!

Some uninformed folks would describe someone who rehabs distressed property as a “speculator” or even a “property speculator.” Don’t be fooled! There is a VAST CHASM of difference between rehabbing and property speculation.

Let me explain. According to Dictionary.com, the definition of speculation where business is concerned is:

“Engagement in risky business transactions on the _chance_ of quick or considerable profit.”

“A commercial or financial transaction involving speculation.”

While all investing…in anything… has some element of risk to it, I want to highlight a key difference between speculation and investment. When you speculate, risk is higher and by the nature of the word speculation, more risk than usual is implied.

So, in that context speculation doesn’t fit what I advocate at all. I’ll explain further, but first let me illustrate the difference between investment and speculation in real estate rehabber terms from something that happened to me just this week.

I got a call; a “hot” lead from my wholesaler. The property was located on the fringes of a hot area of my town called Riverside. Riverside is an area where historic homes are being bought at inflated prices and fixed up very nicely! Put simply, properties in Riverside at in demand. Well, that’s in the heart of Riverside, but this house was on the distant edge of that part of town.

The house was 934 square feet. Great area, yadda yadda. My wholesaler needs $81,900 and he was the house’s “repaired value” will come in at around $120,000. He continually repeated something he heard from an appraiser about values “around” Riverside being a great investment over the coming years.

I agreed to go and take a look. Before I did, I do some of my own checking. From the tax records available online, I learned that the house was built in 1942, just changed hands last year for $72,000 and was of wood construction with asbestos shingling on the outside.

It didn’t look good when I looked at the numbers. IF…and in my mind a big if…the appraisal came back at $120,000, then the 70% I can get a hard-money mortgage for is $84,000. So, my mortgage would only cover a portion of my closing costs, but none of the rehab. In addition, a few months ago, I bought a property a few blocks away for $38,000. I’m just not seeing the value in this property BEFORE I look at it.

When I looked at the property, it had some things going for it. It looked to be in pretty good shape and was on a corner lot. In truth, it needed $10-12K rehab. One negative is that it was square and there is no porch under the roofline to easily add square footage for increased value. The neighborhood is fair but two things jumped out at me:

- There is a couple of very old apartment buildings on the street. Normally this would not bother me in the least, but these will prevent the yuppie crowd from rushing into the area in a buying frenzy.

- Every other house within sight was also very small and of simlar construction. This means the houses on this street are not the architectural gems in the historic and sought-after areas of Riverside.

If the money situation would have been better, that is to say, if this was a better investment, I would buy, Buy BUY! If the spread allowed me to buy and rehab it with little or none of my own money, I would have.

But, if I bought this house and rehabbed it with considerable out-of-pocket investment, I would be speculating on the area, and I had my doubts.

Of course I didn’t buy it, but if I had, that would be speculating!

So, how would I define speculating?

- Speculating involves taking on more than usual risk.

- Speculating involve banking on values that aren’t there today, and aren’t projected to be there based on NORMAL conservative appreciation rates.

- Speculating is banking on external or environmental factors to make you money.

***External and Environmental Factors (that pertain to property) are factors that are not part of the property itself such as neighborhood, infrastucture, city, the paper mill down the road, rental demand, etc. ***

What is investing, but not speculating?

- Buying property that you are “safe” in, meaning you could rehab it and sell it in the short term and make money.

- Buying property that will make you money based on what you bought it for, current environmental factors, and conservative appreciation rates.

- Buying property such that hope is not part of the strategy!

One of the key factors in STAYING a successful real estate investor is strict adherence to your investment strategy and criteria which are tied closely to your investment goals.

A good real estate investor does what works over and over again and does not take on more and more risk as they go. Smart investors only ventures into other, uncharted investment areas (e.g., single family homes to commercial property) after careful investigation.

I think I can safely speculate that the most successful real estate investors incrementally decrease their risk as they gain experience. Not the other way around.

ABOUT THE AUTHOR
Bruce W. Ford is the editor of Rehab-Real-Estate.com and an ACTIVE rehab real estate investor. Click here to get Bruce’s important Special Report entitled “12 Things Real Estate Gurus Won’t Tell You!”