No Picture
General Article

How to Make Money in Real Estate Without Ever Buying Any Property

How to Make Money in Real Estate Without Ever Buying Any Property

Tip: Shortcuts to Success

1. Read real estate investments books

2. Join a local real estate investing club

3. Find a mentor to hold you accountable who has already “been there and done that”

4. Hire a training coach

5. Continue adding resources, lenders, money, etc.

6. Build a successful team

7. Take action

Tip: The True Cost of Procrastination

Failing to take action can create many problems.

Loss of Time- During this time period, other assets could have grown in value.

Loss of Additional Capital – You also lose the opportunity to create additional capital; for example, you could have invested in a joint venture.

Loss of Education – Sophisticated investors find properties and sell them to people who play it safe or to unsophisticated investors. Remember Ray Kroc’s advice: “Define your profession, and define your business. They’re not the same thing.”

What did he mean? Well, his profession was always a salesman. He was continuously selling his franchises. However, what was his business – the accumulation of real estate. Too often, we become what we study. You study law and become an attorney. What is your business? Your business builds your assets. Your assets buy your lifestyle and luxuries. Either do that yourself or partner with someone else to build your assets.

Tip: Mentors Steps to Success

1. Define your dreams. Write them down. Visualize.

2. Read about the wealthy, the world-changers, then begin investing. However, don’t spend forever educating yourself. Take action.

3. Associate with people in life where you want to be. This includes financially, marriage, relationship-wise, business-wise, health-wise and spiritual.

4. Master a formula and then learn a new one. Learn fast and apply it.

5. Pay yourself first.

6. Pay your advisors well. What you pay your advisor is small compared to the money you can make based on their knowledge and connections. Your advisor will also save you time. Your advisor is your ears and eyes in the marketplace. Ironically, most people tip 10-15% in a restaurant to a person they don’t know, for a bill that will not affect their life. Then they complain about having to pay their advisor full earned commissions, people who can add to their income and asset column. That is not financially intelligent.

7. Get your money working quickly. Buy a property. Use it yourself or refinance and put the money to work again. Every dollar is a little investment. Always seek the up-side of the deal and invest more dollars.

8. Assets buy luxuries. Focus on assets first.

9. Look for heroes to inspire you. Realize that if they can do it, so can you.

10. Teach what you learn. Whatever you’re in need of, give it out.

Action Steps

1. Take an investor or mentor to lunch.

2. Take classes and seminars.

3. Make lots of offers. In those offers, always include an escape clause subject to the approval of your business partner or lawyer.

4. Visit your area of interest at least once a month. Look for changes in the real estate, the signage, vacant homes and moving trucks. Watch for complete neighborhood change – is it getting better or worse?

5. Watch for sales. When a supermarket has a sale on toilet paper, people run out and load up on toilet paper. The real estate market in Canada and in worldwide is currently having a sale. Are you loading up on cash-flowing properties?

6. Look for buyers first, then find a big pie and sell them a piece of that pie. What they pay you will allow you to keep the remainders.…

No Picture
General Article

Distressed Real Estate Investing 101

Distressed Real Estate Investing 101

As someone with a Masters Degree in Real Estate from Columbia University who also has first-hand knowledge investing in distressed real estate, I’m frequently asked by people how to make their fortune in today’s difficult real estate environment. Due to the economic crisis there are once in a lifetime opportunities to be had. For those that really know what they are doing, a financial killing can be made in foreclosure, REO and Short Sale properties. But where do you start? Read this article and you’ll be on your way.

Foreclosure Properties

The most commonly heard of distressed property type is the foreclosure. A foreclosure is a property in which the bank has initiated a process of taking back ownership of a property from a private party. This usually occurs when a home’s owner has fallen behind on his mortgage and can no longer afford to make payments yet has a balance left on his note.  

The purpose of foreclosure is for the bank to be able to recover the money it has lent to the owner by selling the property. This is done through an auction process which is overseen by a court with the starting price of the property equal to the amount still owed on the property. While sometimes this is much less than the actual value of the property, usually bidding ends up raising the eventual sale price to at or above the ‘market’ value and thus it can be tricky to get a great deal.

REO Properties    

If a property fails to sell during the foreclosure auction process the property reverts to ownership by the bank or lender on the property. The property is then called a REO or ‘Real Estate Owned’ property.  Typically the property fails to sell at auction because the value of the asset (property) does not cover the liabilities (amount owed the bank) and no one was willing to pay enough to cover the debt. This can happen for a variety of reasons such as the property being in poor physical condition, a bad location or if the real estate market has gone down since the purchase of the property.  

After a property becomes an REO, it is typically put back up for sale by a realtor just as if it were for sale by a private party. First, however, the bank goes through the work of clearing existing liens and other obligations to make a ‘clean title’. REO properties can be an opportunity to get a great value because often they can be purchased for less than if someone were to bid on the foreclosure auction.  

Short Sale Properties  

Finally, there is another kind of distressed situation called a Short Sale Property. In a Short Sale situation the value of a property won’t cover the loan that is on the property yet the property has not yet entered foreclosure. The seller is under financial distress and usually in a situation where they need to be ‘bailed out’.  

In a Short Sale, sometimes a highly qualified buyer can convince a lender or bank to agree to take less than the full amount to satisfy the debt on the property in order to avoid the original owner from defaulting and having to go through the entire foreclosure and REO process.

This is sometimes possible because it is quite an expensive and time consuming ordeal to go through foreclosure and all the ensuing complications and management of the property. A bank’s job is not property management and they would prefer not to tie up valuable staff and financial resources if they can get out quickly, take a manageable loss and get back to their business of lending money. …

No Picture
General Article

Real Estate Investing And How You Can Get Into It

Investing in real estate is something that can reward you handsomely and create wealth over a very short time period. It is essential to increase your knowledge of the subject as much as possible before you begin. The information gathered here is the first step to take before becoming a genius in the field.

Learn all you can before you start investing in real estate. You are going to learn many techniques and strategies that can help you when investing in real estate. It is recommended that you research as much information as possible to better your chances of success.

If you have made the decision to get into real estate investments, it’s a smart idea to set yourself up as an LLC. The purpose of this is to make sure that you and your investments are protected. It will also give you tax benefits.

Figure out what you want to focus on in your investment plans prior to purchasing any property. Flipping real estate could work well for you. Perhaps, you’re more suited to doing rehab projects that need rebuilt from the ground up. Different ways require different work, so understand what suits your skills best.

There are a couple of things to consider when purchasing property. You don’t want to pay too much for the land. Second, avoid overpaying for the business. Look at the property value as it stands and compare this with the amount of rent you feel you could earn on it. Both numbers need to be good for you to buy this property.

Location is definitely the most important aspect of real estate investing. You can change a lot of other factors. Neighborhoods with dropping property values are generally not a sound investment. When looking to purchase real estate, always make sure you investigate the area and its property value.

Be sure that you pick out properties that are in good areas that will have a lot of attention from prospective buyers. You increase the potential resale value of your initial investment. Try finding property that can easily be maintained.

When buying a rental property, make certain the rent you charge is going to cover the mortgage in its entirety. When you do this, you’ll be making better choices. Few things are worse than needing to pay your own money to cover the mortgage, because the payment you receive from your renters isn’t enough.

Stay away from purchasing real estate in neighborhoods that are bad. Pay close attention to where your property is located. Research it. If a deal seems too good, that may mean it’s located in a bad neighborhood. Not only will it be harder to sell, it is at risk of being broken into or vandalized.

Be sure that you’re able to get the money back that you invest in the property, plus a little extra. There’s no reason to invest if all you’re going to do is break even. Always ask more than you spent so that you recoup the money you spent fixing it up.

Clearly there is good money to be made with intelligent real estate investments. However, when you don’t have the right information, you can struggle to do do it. With any luck, this article can help new investors get started.…

No Picture
General Article

Self-Directed IRA – Prohibitions and Permissions

Self-Directed IRA – Prohibitions and Permissions

The Self-Directed IRA is an IRA account used for investments regarding the retirement plan of an individual to make investments and assessment regarding investments. The IRS or Internal Revenue Service has regulations that require a capable custodian or trustee for handling the IRA properties of the IRA proprietor. A capable trustee or custodian will have to preserve the properties for the owner; he will have to preserve transactions and records regarding the IRA account, he will subject client reports, he will organize necessary IRS reports, the trustee or custodian will be executing some executive tasks for the Self-Directed IRA proprietor and will be supporting clients perceiving the systems rules and regulations regarding some prohibited transactions. The trustee or custodian gives the IRA owner a variety of regular beneficial categories wherein the IRA owner will have a wide selection in which he can invest in, like investing in stocks, mutual funds and bonds. The IRS regulations prohibit some transactions types and also some asset types that are involved in an IRA account that bounds types of investment opportunities. With such regulations the custodian or trustee will still permit the IRA account owner to have some other types possible to invest in and also additional investments regarding his Self-Directed IRA account.

The Self-Directed IRA have varieties of investment options that are allowed by regulations like stocks, mortgages, partnerships, real estate, tax liens and private equity. It also includes varieties in residential properties that is internationally done, commercial properties also internationally executed, new constructions, farmlands, property renovations, raw lands, passive rentals income and land or property developments. Real estate acquired using a Self-Directed IRA will have mortgages set in the assets, and will give the benefit of having discounts or less total cash required for each purchase. Some financial investments regarding the IRA system take account of having an investment with joint ventures, investments concerning private stocks and investments that take in partnerships; with these methods of investing it can raise the business or investment to finance a starting business, income projects and many more that will be handled by the business partner or some other qualified person besides the IRA account proprietor. There are many varieties of investing in a Self-Directed IRA system; some ways to invest take in commodities, hedge funds, royalty rights, equipments and leases, American depository receipts, commercial papers, U.S.T-bill and foreign stocks.

However in an IRA account, the IRS regulations forbid some IRA investments like within life insurances and with collectibles like rugs, artworks, some kinds of metals, antiques, some types of coins, some kinds of tangible personal properties, gems and alcoholic beverages. The IRS regulations also forbid dealings with inappropriate utilization of the worth for the financial credit or pension of the account proprietor, the account proprietor’s benefactor, or some additional ineligible individual. These policies were intended to avoid self-dealing; ineligible individuals take account of your fiduciary and members of an account owner’s family, like your ancestors, your wife, your children, your children’s children and wife of your child. Rather inconvenient, there are some other kinds of Self-Directed IRA’s like a corporation IRA, partnership IRA, limited liability company IRA, trust IRA and real estate IRA and many more wherein some of these IRA plans are not affected by the IRS regulations by having them already tried in court. To make it simple, the Self-Directed IRA is a plan that follows the rules and regulations or rather has proven its legitimacy through court trials or has undergone legal legitimacy and is a plan for each individual to use for their future with the use of their retirement funds.…

No Picture
General Article

Tips To Help You Buy Or Sell Commercial Properties

So, after much deliberation, you have decided that you want to enter the commercial real estate market? You may not be sure how to begin or may have questions about the process. Here is some advice to get you on your way in commercial real estate.

Try practicing patience and remain calm, if you are considering purchasing any commercial real estate. Don’t enter into any investment opportunity without doing the proper amount of research. You could end up finding that the property falls short of your total goals, making it a regretful purchase. Realize that it can sometimes take at least one year for the proper investment opportunity to present itself.

For a commercial property you plan to rent out, make sure it is a solid construction with a simple design. These spaces are more likely to fill quickly with paying tenants who are drawn towards something that is well maintained. These buildings also provide much easier maintenance for both the tenants and the owner, as they are less likely to require repairs.

Try to keep your properties occupied. Having unoccupied spaces mean that you have to pay for their upkeep. If you have lost several tenants or can’t seem to attract them in the first place, there must be a reason. It is your job to figure out the problem and correct it.

Get your commercial property inspected before you try to sell it. If they should discover even a single issue with the property, repair or resolve it immediately.

Advertise commercial property both to local and distant buyers. Too many sellers assume that their property is likely to only sell to someone local. This is a way of thinking you should avoid. In fact, the interest level can expand far beyond the local scene as private investors expand their interest. These investors are searching for affordable property and may be interested in yours.

Take a look around properties you are interested in. When looking at a property that you are thinking of purchasing, it’s a good idea to have a licensed contractor accompany you. Once you have all the details, start drafting proposals and enter negotiations with the seller. Evaluate and reevaluate the counteroffers before making any kind of decision one way or another.

If there is more then one property you are considering, acquire the house survey checklist for each one during your site tour. Collect responses from everyone that offers one, but inform the property owners before you do anything else. Letting the property owners know that you are looking at other properties can help, too. It may help get you a better deal.

You should always know how to get in touch with emergency maintenance. Find out from the landlord who you should call if the worst happens, and you need immediate repairs. Learn the phone numbers and response times. Protect your employees, customers, merchandise, and even your reputation by having a good emergency plan in place that will allow you to handle unexpected events without chaos.

Hopefully, now that you have read this article, you are ready to tackle the world of commercial real estate. You might have thought you had enough knowledge to get started before reading this article; now you should be even more prepared. These tips should give you a firm foundation from which to spring into a successful commercial real estate career.…

No Picture
General Article

Choosing Leveraged Real Estate Investments Over Leveraged Stock Investments

Choosing Leveraged Real Estate Investments Over Leveraged Stock Investments

In a depressed economy, people pay much careful attention to their investments. Before opting to invest more, so too must they weigh their options. Leveraged investments in either real estate or stock are two popular investment options. All leveraged investments are not made equal, however. Continue reading.

You should first have a general idea of what leverage is in its most simple terms. Leveraging, in its simplest form, involves managing or controlling of an asset, despite having paid less money on it compared to what it would cost to own it full-out. This relates both to real estate investments and stock investments, although in somewhat different ways.

In terms of leveraged real estate investments, this comes up most often with home mortgages. To obtain ownership of a house from the establishment that is lending you money to buy it, it only takes about 20% of a house’s total purchase price. Most US citizens can’t afford to acquire a house for its total asking price, so the majority of them just end up owning a house by this means. Or else, can any one of your friends who owns their house claim they paid the total asking price upfront for their home?

You usually don’t borrow money to purchase stock options, on the opposite end of the spectrum. By buying the individual stock option, you automatically get the right to manage the asset without the cost of actually purchasing it on the whole. What you’re basically doing instead is obtaining the right, at some specific forthcoming date and price, to purchase a particular number of shares of stock.

Motivation is oftentimes the main difference in choosing between real estate investments and stock investments. While people purchase real estate investments for a myriad of reasons such as home ownership or as a second investment property, stock investments are bought exclusively for earnings. This also makes the risk of owning them that much higher. If the market decreases the value of your house, you can usually wait it out, while still living within it, for instance. With respect to stock investments, if the stock price drops, the money you put into the option originally may wind up being higher than you can probably hope to cash out with. In this way, if you’re trying to narrow down your alternatives, leveraged real estate investments are often the secure bets.…

No Picture
General Article

Selling Your House Without A Real Estate Agent

Selling Your House Without A Real Estate Agent

If the whole idea of giving commission to a person dealing with real estate does not excite you, just do some hard work and sell your house without taking help of any agent. To sell your house on your own, you need to be proactive. Not only you need to schedule appointments but also conduct negotiations and give advertisements in the media.

The most important thing that you need to do is to be clear in your mind whether it is all right on a financial front to do all these things on your own. In other words, see how much you are going to save if you do not take the services of a real estate agent. In terms of statistics, on a $200,000 home, you’ll save 50 percent of the 5 to 6 percent real estate commission ($6,000 to $7,500), assuming that your buyer takes the services of an agent.

In case if both of you are not taking the services of an agent, you can easily save anything in the range of $5,000 to $6,000 per $100,000. But point to be noted here is that you need to spend on additional marketing expenses like flyers and newspaper listings.

You need to keep in mind that when you do not take the services of a real estate agent, you need to devote plenty of your time as potential buyer can contact you anytime. You need to be at the house all the time as buyer may be interested in a tour of your house. If you cannot follow this tight schedule, it is recommended that you opt for a real estate agent.

It is always a good idea to carry out a bit of research and see what the price tag of other houses near your locality. Find out what may have sold for in the last four or five months in order to come up with a right kind of asking price. Your county tax department can play a pivotal role in this regard as they have details of such comparable sales. Before setting the asking price, take into perspective closing fees and cash amount you want after the sale. Your house will sell quicker if you priced it correctly. You can also take the help of your friends and family members especially if they have good contacts. They can play a significant part in selling your house.…