Steps to Freedom

Important Property Investment Secrets

2012-02-11T07:00:00.000+11:00

There are times in your life when you have the opportunity of getting really good advice that has the potential of changing your life and to give you the encouragement to achieve your dreams. I recommend that you investigate the full potential of investing in property and perhaps if you are serious about changing your financial future then you may consider taking some really good advice from the experts. Once you have received all the necessary information, then you can make an educated decision about whether this is for you and if so, avoid making all the most common property investing mistakes that could lose you a fair bit of money in the process and not have the need to say if only I had have taken some advice.

Six Property Terminologies Every Investor Should Know

By Elly Graham

Important Property Investment Secrets
I am aware there are a lot of real estate investors who say that they will go it alone with their property investing and that they know how it is done, but these people tend to make many if not all of the most common property investing mistakes, which has the potential to lead them to either financial ruin, or else they may be totally oblivious to the money they are losing along the way, through ignorance. Do you want to retire early and have a fun and exciting life with lots of investment properties in your portfolio? Just imagine what it would be like for you if at the end of your property journey you have loads of cash to live a life of freedom with no money worries. Let's investigate and consider the following real estate investing strategies.

STRATEGY 1: MAKE A PLAN

The first thing that is very important is that you need a plan. In other words have a big dream, know where you are going and start mapping out where you want to be. It is so important to have a goal to work towards, therefore:

Set goals
Develop a plan for achieving those goals
Remain focused and take action on implementing your plan.

With clearly defined goals you can easily devise a plan and with an end result in mind you can easily work towards your dream. This dream must be your dream and not someone else's this will ensure you stay focused and motivated at all times even when things may not be going quite as planned. However in order to turn your dreams into reality consistent action is required. And a plan will enable you to do so and can be achieved by following these steps:

Set your property goals and write them down.
Set a time-frame for your goals.
Identify the things you need to do to achieve your goals and put these into little bite size pieces.
Take immediate action and remember to review your plan on a regular basis to make sure you are on track.

STRATEGY 2 - GET A MENTOR

It would be a good idea not to ask family and friends unless they are expert property investors. I would recommend that when it comes to financial decisions and investment planning you need a proper coach. Just think about all the famous sports stars and millionaire identities and you will realise one important thing about them and that is, one of the reasons these people are mega-rich and successful is because they all have a mentor or coach. They fully understand that seeking the personal guidance of those who are experts in their field to assist them in getting to the next level. A mentor is accessible to you either in person or through books and you can be in contact with them either by email and phone calls or else you can follow them around by attending their seminars or talks.
Mentors use their experience and knowledge to guide and motivate you towards the goals you set yourself and generally they are happy to do so encouraging you to reach for the stars and often assist you to get out of your comfort zone and move you to the next level of success. They are happy to support you every step you take on your journey to the top! In order to find a mentor you need to start by keeping your eyes and ears open to identify the best people from whom you can learn professionally. Funny thing, when you seek you will find. No point in saying who will mentor me and why would they anyway? Simply be on the lookout and ask lot of questions. Find a mentor that has a good reputation and who has a proven track record a real estate investor and has built long term wealth, obviously, someone you look up to and is successful in the field.

STRATEGY 3 - FIND A REALLY GOOD PROPERTY INVESTING NETWORK

Align yourself with a property investing network or group consisting of experienced people and professionals. Here are some simple measures you might want to take to help you easily identify a good Network.

Find out what the network, are they ethical do they share your core values.
Check and ensure those professionals in the network are all registered in their field of expertise.
Speak with other property investors to find out the reputation of the property network and get the network to provide you with testimonies from past clients.
Make sure to conduct your research into any information the network provides you.

These measures will go a long way in protecting you and help you identify the best advice and support that you can find.

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STRATEGY 4 - DO NOT LISTEN TO NEGATIVE FRIENDS AND FAMILY

Although friends and family may have your best intentions at heart the advice they give is not always the best for achieving your personal goals and realising your dreams. Therefore you would be well advised to:

Remember your personal and financial position will be quite different from others therefore you may want to consider this when someone gives you advice based on their own financial position.
Think twice about taking advice from someone who has made bad financial decisions.
Be aware of the area of expertise your advice giver has and see how that relates to the advice they are giving.
Only ever take advice from people who have already achieved the goals that you are aiming for as these are the people with the experience to help you navigate any obstacles you will face.
Refer back to your investment plan and be sure to keep on track.
Find yourself an experienced property investor to act as your guide and mentor and keep abreast of the current property market.

STRATEGY 5 - DO YOUR HOMEWORK

You are taking the right step in reading articles such as this one, we are in the age where timely, accurate information is a highly prized and sought after but remember that information is always changing. To be confident in all your investment decisions you need to have instant access to relevant, up-to-date information obtained from reliable sources. Keep in mind also that you will always find what you are looking for therefore look for positive things about the property investment market don't look for negative because there are always people out there with negative input and negative experiences. As with most things, information gathering and analysis is a time-consuming process. It also requires a certain level of expertise to be able to sift through all available information to find which is relevant to your requirements. In an age where we are constantly bombarded by information from all angles, this activity can become overwhelming and coupled with our everyday responsibilities such as family, jobs and social activities the tendency is to drop the ball. Therefore to learn from the experiences of others it would be recommended to:

Always investigate every opportunity before investing.
Ensure you have every detail of the investment thoroughly explained.
Ensure you understand your legal documents and that they are accurate.
Once you have secured your properties then continue to conduct your due diligence remembering that your investment is your responsibility and only yours so you will then not point the finger at others if things go wrong.

STRATEGY 6 - ENSURE YOUR REAL ESTATE INVESTING STRATEGY IS DONE FROM THE HEAD AND NOT THE HEART.

In other words, investing has nothing to do with emotions and everything to do with financial returns. For instance it does not matter if you prefer to live in a quiet country lane or in an older house away from railway stations, big malls and entertainment. You are not going to live in it - it is an investment and you have to look at it from that point of view. Good idea for instance to purchase your property when everyone else is selling and sell when everyone is buying! Remember: it's all about your return on investment - let the figures and supportive information do the talking and not your personal preferences. Therefore:

Obtain and assess relevant information.
Refer to your investment plan.
Never lose sight of the reason you are investing, to make money - preferably loads!!

If you have read Robert Kiyosaki's bestselling book 'Rich Dad, Poor Dad' you will understand that profit is made at the time of buying and realised at the point of selling! The housing market can go up as well as down and when the market is on a downward trend you need not worry so long as you hold on to your property for the long term. Do not do what the majority of people do which is sell.

Adopt the purchasing at below the 10% below market value mindset whenever possible.
Look into wholesale real estate investing, e.g., direct from the developer.
Sharpen up your negotiating skills. Read Donald Trumps' bestseller 'The Art of The Deal', get good assistance with finding the ideal property and close the deal.
Do not sell; remember this is a long-term investment; use your current property as equity to purchase the next property, or else if you sell only do so to purchase another property or appreciating asset.

Right - you are now one step away from being well ahead of the pack. Final Word: Follow these strategies, the earlier in life the better and one day you too will have your name listed above with the mega rich and very successful real estate investors and have for yourself long-term wealth. You will find the above strategies a very good start to see you safely on your way to success so take your newly obtained knowledge and have the edge on others: 'Knowledge is power but only when combined with action!' Start today, right now and take the necessary actions required, go on it isn't as hard as you think it is.
Author Elly Graham is a mentor who provides free information, she has a mentor too, Jim Downs, Author Appreciating Assets. Elly provides support and guidance on personal development and personal empowerment for people looking into property investment advice

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Six Property Terminologies Every Investor Should Know

2012-02-04T15:38:00.000+11:00

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Six Property Terminologies Every Investor Should Know

By Orit Gadish

Taking a shot at investments in the housing market for the first time can be quite daunting. If you want to be at par with the best investors in the industry, learning the necessary terminology comes with the territory. While it might be confusing at first, some bit of patience and practice will see you get the hang of it. The following are some of the terminologies you will frequently come across.

Floor Loan: This refers to the minimum amount of money a lender will provide to finance a building project. Most lenders will offer part but not 100 percent financing at the start of the project. The remainder is accessed when certain agreed milestones are achieved. Your lender might agree to lend you 65 percent to start the project with the rest to be committed when some flats are sold.
Alligator Properties: It is possible to earn less from a property than it cost to manage it. Costs like mortgage repayments, maintenance and taxes can be greater than rental income. Alligator properties will lose you a lot of money over time.
Assumable Mortgage: This is a financing agreement to transfer a mortgage and all its terms from the seller to the buyer. This is a great way of avoiding taking on a mortgage yourself. You will benefit from an assumable mortgage if interest rates are high.
Curb Appeal: A property is generally gauged by its attractiveness. Some of the factors that will influence attractiveness include: painting, landscaping and any visible improvements to the property. This can play a major part in determining the fair market value of a property.
Blanket Mortgage: You are likely to come across this term as an investor and not a single home buyer. It is a loan advanced to you to cover more than one piece of property. This is the perfect mortgage to go for if you would like to build many properties for sale. The main advantage associated with this type of mortgage is being able to sell individual properties without affecting the blanket mortgage.
Broker Price Opinion: This is a rough estimate of a property's value and is usually given by brokers. There are several factors the broker will take into account before making the final estimate. This includes: renovations, prices of neighboring properties as well as location.

If this is a bit mind-bending for you, an experienced real estate company can help. Gadish Properties is a real estate company with experience in short sales, property management, and REO sales. It is advisable to use a professional like Orit Gadish to take care of all the necessary property transactions. You will have at your disposal a team of people with access to numerous financial institutions and lenders such as Wells Fargo Bank.
As President and CEO of Gadish Properties, Orit Gadish has assembled a team of highly qualified real estate professionals who manage hundreds of REO deals throughout California. Orit Gadish has implemented technological innovations at Gadish Properties to create an efficient and effective sales process from start to finish. Working with a variety of banks and moneylenders, such as Wells Fargo Bank and One West Bank (IndyMac), Orit Gadish has secured essential business relationships for the facilitation of the sale of REO real estate. Orit Gadish is a California Real Estate Broker and a member of the Beverly Hills Greater Los Angeles Association of Realtors. Committed to her clients, Orit Gadish also operates Gadish Financial, an affiliate of Gadish Properties, which pairs property buyers with the best financing options at the lowest interest rates possible.

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2012-01-28T15:16:00.000+11:00

Factors to Consider When Buying Investment Property

By A. Kappauf

Investments can be a great way to get ahead, and more and more people are jumping into the market of buying investment property. However, this decision should not be taken lightly. If certain tricks of the trade are ignored, you might find yourself deeper in debt than before. There is a lot to gain from buying property to either flip or hold and rent. That said, first time investors should consider buying for the long term, as this is generally more of a sure thing than a short term flip strategy.

First and foremost, take a look at the numbers. You want to make sure that the monthly rental income will cover all of the property expenses such as property taxes, insurance, financing, repairs and maintenance, and everything else. When you analyze the numbers, remember to be conservative with any estimates you make, and always bake in a 10% vacancy rate. If the property appears to be cash flow positive on a monthly basis, you can continue on with the due diligence process.

The second thing to consider when buying property is the location. Location is everything, and the general rule of thumb is to buy rental properties in the best neighborhoods you can afford. The neighborhood will determine the type of tenant you can expect, as well as the amount of rent that can be charged. Another aspect of the neighborhood relates to fixer uppers, and the degree to which you make the necessary improvements. Avoid improving a property so much that it is far better than the surrounding homes on the block. Keep the home comfortable and user friendly. People will choose the neighborhood for a reason, so make sure the home is fixed up to fit in.

Another tip is when looking at potential houses to buy, look at the property for what it could be, instead of what it is. Spot the potential of the property and keep the renovations at a reasonable level. Make sure that the vision is reasonable for the labor that is needed to be done, and the price of the needed materials. Remember that hiring professionals to do the labor can help to assure things are done correctly the first time -saving money for things that may need to be fixed later. Hiring professionals shouldn't be taken lightly, either. Make sure all references are checked out to ensure that all your contractors have the experience and qualifications to do the job appropriately and in full compliance with municipal codes.

Once all the hard work is done and the home is ready for a tenant, make sure that a screening process is used. Run a credit check, call old landlords and references, and verify income and employment. After all the sweat and money that was poured into the property, it's only natural to want to keep it from being destroyed by deadbeats.

The bottom line is that buying a property requires a fair amount of due diligence. Do the homework that goes with being a great property investor, and also read up on landlord and tenant rights. It's one of the most important steps in protecting the investment. Study eviction processes, and understand all the laws to help keep the profits flowing for the long haul.

Visit free-rental-property-investing-info.com for free landlord forms, tools, and no-hype educational info focusing solely on investing in rental properties. Browse topics like how to find good landlord insurance, how to remove PMI, how to buy property, and much more.

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4 Important Reasons Why People Prefer To Stay In Rental Properties

2012-01-21T07:00:00.000+11:00

In this article, I have shared the 4 main reasons why people in United States like to stay in houses for rent. Every single individual in United States prefer to stay in houses for rent.

4 Important Reasons Why People Prefer To Stay In Rental Properties

By Sharon Cooper Lee

In United States, in previous year i.e. in 2011, it has been seen that, the demand of rental homes were increased like anything and many Americans were not at all interested in buying the properties. So this year also i.e. in 2012, the scenario will almost be the same.
There are several reasons why people in United States prefer to stay in rental homes and over here, below I am sharing the top most 4 reasons that makes people to stay in a rental property.
4 Main Reasons Why People Like To Stay In Homes For Rent
1) It Is Affordable:
Homeownership is the dream of every single American. But if we think practically, then to buy the own house is not the cup of tea for everyone. Why I am telling so, because it is very expensive to buy the house in United States. Hence, many people over there simply avoid to buy a property and they opt for the home rentals because it very economical.
So people are doing right thing, that they are not buying a property keeping in mind their financial conditions. To stay in rental houses is a great decision from financial point of view. So that's why, more and more people in United States select house rentals for staying as it less expensive.
2) No Maintenance And Repairs Expenses:
When you purchase your own house then it is quiet natural that all the expenses of your home, you have to pay. Every time if something breaks in your house, then you have to do expenses in order to repair it properly. So to own a house is really very costly and these kinds of expenditures will make your pockets empty.
But if you renting a home, then these types of expenditures will be paid by your homeowner. As a tenant, you need not to pay any kind of maintenance and repairs expenses. So due to this benefit, almost every American loves to stay in house rentals.
3) Tenants Insurance Is Very Affordable:
Tenants insurance is very much cheaper as compared to homeowners insurance. So due to this reason people give high priority to rental properties.
4) Tenants Can Easily Change Their Location When They Want:
Well, suppose if you are a homeowner and you have to change your location then first of all you have to sell your home and then only you will able to move to other area. You never know when your home going to sold, it may take some time because these days everyone gives more preference to rental houses and many individuals are not at all interested in buying a property.
But if you are a tenant and you are migrating to other location for a job or for some other purpose, then comfortably you can change your location and that too very easily. Just you have to inform your homeowner that's it. So because of this, rental properties have gained higher popularity among the Americans.
So due to all these reasons, the demand of rental homes has been reached on peak.
In coming days, the popularity of duplex for rent, single family home rentals and apartment rentals will be rising more and more.

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How to Buy Your First Rental Property

2012-01-14T14:26:00.000+11:00

Image by lucasfoxbcn via Flickr

How to Buy Your First Rental Property

By A. Kappauf

Due to the present economy and the low prices on homes, the time to buy rentals could not be better. 99.9% of everyone interviewed who has rental properties say that there are some headaches that come with renting out properties, however, they all added that the positive aspects of having rental properties far outweighs these headaches. Now the question is how does one go about getting into this type of business?

The most important first step to real estate investing is to explore why you want to do this. What is your primary goal? Is the goal to pay off debt? Is the goal to bring in income to live off of during your retirement years? Is the goal money for college? There are many reasons why you might want to be a real estate investor, and whatever the reason, you must understand and stay focused on this goal. As stated above, it is not always going to be smooth sailing, but if you keep focused on the goal at hand, it will help you get through some of the hard times as they arise.

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The next step is to figure out how you are going to actually buy the rental property. Although many people put in an offer and then try to find financing, it is much more efficient to visit a mortgage broker or lending institution and get pre-qualified for a loan. Find out in advance how much they are willing to loan you, and what the down payment requirement is. This will allow you to have a general idea of your targeted price range, which will save you time because you can simply ignore properties that are too expensive for your financial position. A good rule to remember is that if you can put at least 20% down you have a better chance of obtaining the loan.

Next, decide on your location. Make sure that the area you have chosen has growth potential. If not, then go look at another area. There are many issues to consider in this step, such as, is it possible to change the rental property from a single to multiple dwelling property? Like I mentioned previously, there are many foreclosed homes at this time that are selling below market value, so you must always ask yourself if a given property can be purchased at a bargain price. You will also want to consider whether or not you going to able to increase the rent annually, as well as the impact that small improvements might have on the property values within the neighborhood.

The final step is to get a good real estate agent and start checking out actual properties. Your agent will send you MLS listings, which you can then run the numbers on to see which ones make financial sense. You can then have your agent schedule physical property showings for those listings in which the preliminary numbers look good. Also, get in the habit of always soliciting feedback from your agent, as he or she will ideally have a lot of experience. Your agent can give you good tips on the best locations, as well as property pitfalls to avoid. Good luck and happy investing!

Visit free-rental-property-investing-info.com for free landlord forms, tools, and no-hype educational info focusing solely on investing in rental property. Browse topics like how to find good landlord insurance, how to buy property, how to be an effective landlord, and much more.

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2012-01-09T13:45:00.000+11:00

2012 is set to be a year of many changes, including many new trends continuing to evolve in the world of real estate investing. So what can we expect in the new year and how can real estate investors stay ahead of the curve? Government Programs It is quite likely that we will see a new round of government initiatives or two before the 2012 Presidential Election.

The Future Of Real Estate Investing In 2012

By Duane Ortega
2012 is set to be a year of many changes, including many new trends continuing to evolve in the world of real estate investing. So what can we expect in the new year and how can real estate investors stay ahead of the curve?

Government Programs

It is quite likely that we will see a new round of government initiatives or two before the 2012 Presidential Election. However, as with the last few they are unlikely to directly help many homeowners and if anything will further restrict conventional mortgage lending rather than loosen it up. Perhaps the one exception is the FHA extension of the waiver of the 90 day rule. This investors can continue to flip houses with ease to new buyers who can use low down payment financing immediately.

Inventory

Inventory levels should continue to decline, despite a final clear out of the remaining foreclosures in the works right now. Banks will continue their strategies to maintain rising home prices and a continued uptick will balance new listings. However, in many parts of the country real estate investors will find the shortage of REOs and short sales continues. This will mean needing to work with major bulk REO buyers to get a hold of a significant amount of wholesale properties, meaning that forging new contacts and partnerships now is critical.

Growth

The current improvements in the US housing market are likely to continue and expand exponentially. Home ownership will continue to rise gradually and new confidence from US buyers should offset any slow down in demand from foreign investors who see their own local markets turning around too. As far as hot spots go, coastal resort areas and cities with the best job markets should produce the highest returns. Among the top picks for 2012 are New York, Miami, San Francisco, San Jose and Washington.

Mortgage Lending

With conventional mortgages still hard to get, especially for higher priced properties we will probably see more growth in lower price ranges. As real estate investors become more aware of the availability of transactional funding and focus more of their marketing on attracting buyers, transactional lenders will likely be among the biggest winners in the new year.

Marketing

Marketing will see some of the biggest swings for real estate investors throughout 2012. Investors should not just be sitting down to plan out budgets and dates for next year's marketing but focusing on developing more permission based and mobile marketing initiatives as well as local search. Trying to catch up on new trends next year is going to mean an uphill battle. The time to start developing is now so that the huge number of cash rich buyers at tax time can be cashed in on.

Duane Ortega has been enabling real estate investors to increase their volume and make real profits from real estate in both good times and bad over the last 10 years with no hassle transactional funding through http://www.BestTransactionFunding.com.

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Three Steps to Getting Financing for a Home in Tough Times

2012-01-07T07:00:00.000+11:00

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Three Steps to Getting <a class="zem_slink" href="http://en.wikipedia.org/wiki/Finance" title="Finance" rel="wikipedia">Financing</a> for a Home in Tough Times
Three Steps to Getting Financing for a Home in Tough Times

By Juhlin Youlien

Getting into a home, especially for the first time, is a legitimate challenge. Almost everyone who buys a home will have to take out a loan for the home given the fact that it could take a lot of Americans their entire lifetime to save up enough money to get into a home which are often the highest priced things to buy in any market. Getting a lone can complicate things, but just buying a home is tough with our without a loan. Here are three steps to getting into a home using a loan..
The first thing a potential buyer can do is to dramatically increase their credit. By law, anyone can view their credit score for free twice a year. It is a wise thing to take advantage of that free service.

If a potential buyer has had identity theft or a crazy out of control spouse who somehow has racked up a ton of credit cards that one was not aware of, then the credit report will make one aware of these potential credit hazards and allow for the situation to be rectified. Credit scores are a measure of an individual's ability to handle responsibility. Some great examples of responsibility is making the rent payment on time, making the utility payments and other bills on time, paying the car loan every month any other form of repayment such as paying the credit card down or making the credit payments on time. When time has passed and a person has made good on their payments, and make sure no funny business is taking place, then the credit score will start to be good.

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The second thing one can do is save up as much money as possible to use as a down payment. A down payment should be somewhere between ten to twenty percent of the entire bill for the home. So if one saves up an incredible amount of money, they could potentially buy an incredible amount of home. For example, if a buyer has fifty thousand dollars saved up, then they could buy a home anywhere between five hundred thousand dollars and a million. More realistically though, a buyer will have ten thousand dollars saved up, and given their debt ratio, they can buy a home between one hundred to two hundred thousand dollars. The important thing though is having the highest amount possible of the home saved up and used as a down payment as it will lower the monthly payment by lowering the interest on the mortgage.

The last thing a person can do is to get pre-approval. Establishing a healthy relationship with the lender or bank or whoever is going to front the money for the loan. When a buyer really is ready to buy a home, they have their credit score looking great, and they have a lot of money saved up, not to mention they have a steady job with a steady income, then they are ready to meet with a banker and to get totally ready to buy a home. A banker will go through everything they can about the banker and then write a letter of approval outlining how much they can probably get approved for as a total amount on a home.

Juhlin Youlien writes about homes for sale like Paradise Valley AZ homes for sale and other real estate like Fountain Hills AZ homes for sale. Juhlin is a good source for all your home needs.

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I Lost Thousands Of Dollars By Trying To Save A Dollar Day

2012-01-06T13:25:00.000+11:00

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Here's the interesting thing about this property. The home was priced right however, we saw the property at 8pm in the evening, there were multiple bids on the home and we were creeping up to the irrevocable date and time of midnight very fast. We had two choices... let this deal pass us by or take action and get our offer in. We paid $5000 over the asking price!

I Lost Thousands Of Dollars By Trying To Save A Dollar Day

By Gary Anthony Hibbert

Some weeks can be a roller coaster ride. The good thing with our adventures is we acquire some valuable lessons, and as a result put necessary fail safes in place to ensure things go much smoother the next time.

One of the things that we are continually focusing on are our checklists. By creating a good checklist system you're creating a step by step process that can be passed on to others to produce the same positive results without even having to think.

The other day one of our investors purchased another rent to own home. A beautiful detached home with a finished basement and tons of upgrades.

Here's the interesting thing about this property. The home was priced right however, we saw the property at 8pm in the evening, there were multiple bids on the home and we were creeping up to the irrevocable date and time of midnight very fast. We had two choices... let this deal pass us by or take action and get our offer in.

Knowing the value of the home, the type of tenants we could get and the positive cash flow this property could produce, we put in an offer that couldn't be refused.
...$5000 over the asking price!!

Crazy or what!! ...or is it?

Lets do the math; Now, the home was priced at $265,000 and we put in an offer at $270,000. If the home is amortized over 35 years the difference works out to approx. $17.00 a month. You can't even get a coffee a day in the month of February during a leap year for that price.

I'm not a mathematician by any means but for $17.00 a month, we couldn't let a deal like that slip through our fingers. Especially knowing that this home can easily cash flow. So who actually pays for this additional $17.00 a month if you have a property that's cash flowing? Some people may argue this, but as long as you're making money from your property each month, that $17.00 is passed on to your tenants. In other words, you don't have to go to your bank to withdraw your money to make a payment for it right? So... if you are not a numbers person here is the key things to remember. When your purchasing an investment property using our strategies, what you are really doing is providing a service for your tenants. If the public see value in your home, they will pay top dollar for it. Many people miss this valuable insight.

By trying to save a penny today, many people miss the big picture and lose out on tens of thousands of dollars a few years from now on a great investment property.

Now, I'm not promoting to over pay for every house that you come across. I love a great deal like anyone else does. What I am saying is this... understand every deal on the table in depth before you walk away from it. You could be leaving your kid's education, your trip around the world or simple a coffee and a bagel a day that you do not have to worry about for a very long time.

Gary Hibbert is a Canadian Real Estate investor. He uses a very smart and proven Rent to Own technique that provides a win win scenario for both the investor and the tenant. His technique of buying beautiful homes in beautiful neighbourhoods has proven to be a great strategy. Visit Gary and his team at http://shcinvestor.ca

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Lesser Known Real Estate Investments

2012-01-05T11:57:00.001+11:00

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Lesser Known <a class="zem_slink" href="http://en.wikipedia.org/wiki/Real_estate" title="Real estate" rel="wikipedia"><a class="zem_slink" href="http://en.wikipedia.org/wiki/Real_estate" title="Real estate" rel="wikipedia">Real Estate</a></a> <a class="zem_slink" href="http://www.wikinvest.com/metric/<a class=" zem_slink"="" title="Investment" rel="wikipedia">Investments</a>" title="Investments" rel="wikinvest">Investments
Lesser Known Real Estate Investments

By Juhlin Youlien

Ever since the 1940's the world of real estate has consistently seen small but steady increases in value each year. Real estate is a legal term for property possessed by an individual as part of their "estate" that is "real" or tangible and is fixed like the land, the landscape, the fencing and other permanent fixtures. Because real estate has been a dependable asset, more and more investors have invested part of their portfolio in real estate. The most common type of investment is buying rental property. Renters pay a rent to live in property owned by the investor and they usually will pay enough for the owner to pay the mortgage, the taxes, the repairs, and other home expenses. Although renting is the most common and popular form of real estate investing, it is not the only.

A solid way to try and down play the negative side of renting, which is a lot of one on one contact with the tenants, doing the repairs, finding renters to fill a vacancy, is to be part of a investment group. A real estate investment group is a group of investors who want to be involved in the property world but do not want to have the usual negative side of renting. The group is a company that will pool the investors money and then buy a block of homes, condos and apartments and divide the properties up fairly according to the share that the different investors invest. The return is cumulative so even if one of the condos that is under the investors name is vacant, the money will still be delivered to the investor. The groups company will be in charge of the repairs, the renting out of vacancies and the other detailed work management must do.

Another type of investor is the property trader. Trading in property can be a risky venture. Trading real estate is comparable to a stock market day trader who is mostly gambling that stocks they buy low will increase during the day and that stocks they short sale on will lose value during the day. This is opposite from any investor who wishes to make money in the long run. A real estate trader is someone who buys a home or land with the intention of selling it quickly. They are called flippers because they flip a home. Flipping is only successful when a home is purchased that is greatly undervalued and can be resold at a high price. It also works when the market is extremely good and the prices are increasing by the day and month. The problem comes when the two scenarios don't pan out and the investor is committed to an expensive enterprise and they have no way of getting out of it and are sunk by the fact that they do not have long term ability to make mortgage payments and keep the house a float. The other type of trader are those who buy homes that are by no means over priced and they renovate them and fix them up and then resale them at a higher price and make money.

This article is brought to you by Juhlin Youlien who writes articles about Paradise Valley AZ homes and Fountain Hills Real Estate. Paradise Valley real estate is the premier real estate in Arizona.

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2012-01-05T11:05:00.001+11:00

Should You Consider Rent to Own?
Should You Consider Rent to Own?
By Jacquelyn B Marks
Rent to own homes present a perfect solution for homebuyers and sellers when it comes to the surplus of pre-foreclosures, foreclosed and REO properties along with stringent credit policies. This alternative offers cash-strapped homebuyers a chance to save on the down payment as well as increase their credit standing. On the other hand, equally cash-strapped pre-foreclosure sellers will be able to relieve himself or herself with the impending foreclosure with someone else assuming mortgage payments. Then ultimately, the new owners will take the property off one's hands.
While rent to own homes are no doubt an ideal alternative plan, the theory may not carry out in real life scenarios. If seriously considering this option, what are the key aspects to look for? Alternatively, is a rent to own arrangement ideal for you?
Ideal Factors that Can Work to Your Advantage
The great aspect of this trend is most of the underwater homeowners are now willing to take lesser upfront payments. This means a buyer or renter is at a lesser loss when deciding to push through with the purchase. In addition, with the flood of pre-foreclosures and foreclosed properties, one can take a pick from the numerous choices available. In most cases, home sellers who consider a rent to own purchase are actually well into the desperation stage.
Potential Risks
As with any type of real estate purchase, these arrangements come with its own set of risks. It is possible for the buyer to find out that the homeowner has actually stopped making the mortgage payments while property is under the lease term period. On the other hand, owners/landlords can also potentially end up with a tenant who is remiss in making payments on time and completing the purchase.
Who Should Consider Rent to Own?
Even with risks, one can foresee these arrangements becoming more popular in the upcoming years. It presents one of the best transitional steps to curing the housing market crisis. Despite the set of risks, it is still one of the better options available for both homeowners and homebuyers. If executed flawlessly, it can be the best pre-foreclosure deals one can find.
However, here are some of the factors that need to take into account:

Rent to own is not recommended for individuals who require time to repair their credit standing to make a purchase.
It is ideal if both parties involved have good track records or those who have something more at stake, such as a long time tenant, a family member or maybe a friend who is very interested in assuming the property.

A lease to purchase agreement should be prepared by an attorney or real estate professional to ensure the protection of the homeowner and potential buyer. Moreover, as we all know when it comes to dealing with contracts, the devil is in the details. This means one needs to take the necessary precautions such as knowing everything about the homeowner. By doing so, requesting for a home inspection and discussing thoroughly the stipulations of the agreement with a fully outlined 'conditions precedent.'
If one has a potentially ideal rent to own opportunity, go ahead and explore the possibility. If keeping oneself well protected all through the transaction process, it can turn out to be the perfect investment opportunity.
Renttoownhomes.cc is the leading online listing service for Rent to Own Homes.
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Smart Guide to Investment Property

2010-10-29T16:24:00.000+11:00

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Smart Guide to Investment Property

Source: www.moneymanager.com.au

Buying a small apartment to rent out can be a good way to accumulate funds so you can eventually buy your own place, in an area where you want to live.
What you'll learn in this step: Sensible investments in property residential or non-residential have many benefits, including capital growth.
Property has been a popular route to wealth for many Australians for many years.
Buying their own home is often the first investment many people make; purchasing another property may well be the second even before shares and other assets.
But your first investment in property neednt be your home.
Indeed, buying a small apartment to rent out can be a good way to accumulate funds so you can eventually buy your own place, in an area where you want to live.
Increasing numbers of young Australians are choosing this route, buying in one suburb while renting in a more desirable and expensive area or living at home for a while longer.
Still others are diversifying into non-residential property via property trusts and syndicates.
Sensible investments in property have many attractions.
Property can be less volatile than shares though not always and it tends to be regarded as a safe haven when other assets are declining in value.
It has the potential to generate capital growth (an increase in the value of your asset) as well as rental income.
Then theres the tax advantages associated with negative gearing (more about that later).
However, as with any investment, there are no guarantees.
Property prices go down, as well as up, and sometimes tenants are hard to find especially good ones who pay on time and take care of your investment.
Investors need to have a keen awareness of the interest rate environment how higher rates might affect their expected net return and the market for their property should they wish to sell.
They also need to make sure the return or yield from their property stands up against the return they might have achieved had they invested in shares, for example.
Of course, you dont have to make a direct investment in property.
Pooling your funds with other investors in managed funds with a property focus, listed property trusts or property syndicates provides exposure to a broader range of property including commercial, industrial and retail as well as residential often with a smaller investment required.
Many financial advisers would argue that too many Australians let direct investment in residential property dominate their portfolios.
In theory and this is far from reality for most people property should account for perhaps 10 per cent of an investment portfolio.

Concepts: investment, Smart Guide, loans, buying, funds, shares, font, savings, FINANCE, assets, Australians, property trusts, syndicates, rent, portfolios.

Real Estate Investors Discover Forex to be a Better Deal During Bubble

2010-06-01T14:52:00.002+10:00

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Real Estate Investors Discover Forex to be a Better Deal During Bubble

By Scott Shubert

Every day we read more news about the real estate "bubble" and how prices are leveling off or even dropping around the country. Naturally this news makes many real estate investors more cautious about buying. Flippers are no longer able to rely on rapid appreciation in order to make their profits. Investors who buy and hold or lease option properties are wondering if their deals will earn any profit in the next 2 to 3 years and many wonder how long they will have to hold a property to realize any profit. Many investors have discovered that they may be stuck with a property they cannot sell for a profit and cannot rent with a positive or break even cash flow now that real estate is just not selling the way it was in the recent boom cycle. Some investors are considering other alternatives and either holding off on further buying or getting out of the business altogether until there are signals that the market has reached the bottom of its current correction.

Accelerated Wealth Through Forex Trading

While it is currently uncertain as to whether real estate prices will see any rise over the next few years some investors have chosen to postpone any further buying activity and look at other alternatives. One of these alternatives that has become quite appealing to some is Forex trading. Investors who have been taught the power of leverage through "no money down" buying strategies quickly understand the power of leverage in the Forex market. Forex trading is one of the few businesses in which one can start with a relatively small amount of capital and within a short period of time begin multiplying that capital into a larger and larger numbers. Some traders who have mastered this business have taken accounts from $1000 to over a million in one year. Not only would that be extremely difficult to achieve in real estate, in most cases the equity that is achieved in real estate is not necessarily liquid.

No "Down" or "Bear" Market in Forex

"Forex" is short for Foreign Exchange or the currency market. Because currencies are traded in pairs such as the Euro vs. the U.S. Dollar traders are never stuck with a downward trending market. If the Euro's value is falling relative to the U.S. Dollar the dollar is rising relative to the Euro and vice versa. A trader may buy or sell the currency pair at any time and profit is earned by trading in the direction of the movement whether it be up or down. If a Forex trader believes the Euro vs. the U.S. Dollar pair will rise she will enter a trade position of buying the pair. In this case Euros are being bought and dollars are being sold. If the trader believes the pair will fall he will simply enter a trade position of selling the pair. For trading purposes it makes no difference whether the pair is rising or falling. Buying and selling are both executed the same with the click of a button and profits can be seen immediately as the pair moves in the direction of your trade.

100% Liquid Market

The Forex market is the largest market in the world and it is driven by banks and institutions as well as managed funds and individual investors. A currency represents and entire nation's economy and it is not possible to manipulate the value of a currency the way it sometimes happens in the stock market. Because banks throughout the world always have an exchange rate for currencies there is never a time when a Forex trade is not totally liquid. A Forex trader does not need to wait for a broker to locate a buyer because a trade is always immediately closed with the click of a mouse. Transactions are settled in cash that appears in the trading account immediately when the trade is closed.

What is the Risk?

Often we may hear that trading Forex is risky business. There are risks and expenses involved in any business. One of the benefits of starting a Forex trading business is that a trader can open a demo account and trade while learning the business without ever risking any real money. Only when the ability to trade profitably consistently over time has been demonstrated should a live account be opened. One of the most important aspects of learning to trade is using proper money management and risk management. Successful traders know how to identify trading opportunities and they know exactly how much to risk on a given trade. Win to loss ratios and risk to reward ratios are a part of trading just like knowing what products to stock are an important part of the retail business. If you hear of people who lost their trading capital while learning to trade you can be assured that they did not 1. learn to trade before opening a live account and 2. use proper money management and risk management.

How to Learn More about the Forex Trading Business

There are many sources of information on Forex trading available all over the internet. Unfortunately, very little of it is really effective in helping people to master the business of trading. Most of the information available is connected either directly or indirectly with the Forex Broker industry. And as many traders have discovered, the methods being promoted are often designed to benefit the brokers more than the trader. Is there any way to bypass the process of trial and error and really save time on the learning curve that is required in Forex trading? Entrepreneurs who have been successful in other businesses know the answer to this question.

Find people who are already successful in the business of what you intend to do and do what they do. Mentors and mastermind groups provide the key to the fastest route to success. Just be aware that many "mentors" and training companies are connected with the broker industry as Introducing Brokers and they have a vested interest in teaching trading strategies that may not be in your best interest. For more information you may want to discuss the credibility of training programs with other traders in a trading discussion forum or at a trading club in your local area.

Scott Shubert is the founder of www.TradingMasterMind.com , a community of traders who share insights and results to contribute to the success of the entire community.

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Investment Property Jargon Explained - CAP Rates

2010-04-15T16:32:00.001+10:00

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Investment Property Jargon Explained - CAP Rates

By Ian F. Campbell

If you are looking to buy some investment property you are sure to meet a barrage of jargon, from R.O.I. to A.P.R., to capitalization rates to net operating income.

Finding your way round the accountant-speak is essential if you are going to plan your property purchase thoroughly.

Doing a little research could make a big difference to the rental income you can achieve or the capital gain you can expect, two important factors for any investment property.

Of course, you could pay a financial adviser, lawyer or notary to do all the work for you, but it's actually not that complicated and this short investment property glossary series should help as a reference guide.

In each part we look at a different piece of investment property jargon. In this, the first in the series, we look at CAP or Capitalization Rates.

CAP or Capitalization Rates

CAP or Capitalization Rates are a way of calculating how fast an investment property will pay for itself. The higher it is, the quicker you make your money back.

The first step is to work out the sales price, if you have bought the property already you can just use the total price you paid for the investment property including closing costs and other fees.

If you haven't bought it yet, use the asking price and add your expected costs.

The next step is to calculate the property's Net Operating Income (N.O.I.). Take the monthly rent that you hope to charge and times it by 12 months, to work out the annual rental income.

Next, work out the monthly operating expenses per month and also multiply them by to find the yearly cost. Then, simply subtract the operating expenses from the rent total to find the Net Operating Income or N.O.I.

When listing expenses be sure to include everything, including maintenance, reserve fund, trusts fees (if applicable), association fees, reserve fund, management, property taxes, insurance, etc.

Finally, all you need to do is take the N.O.I., divide it by the investment property price and multiply by 100 to turn it into a percentage.

Let's take an example: if you think you can rent your property for $3,000 per month, then your annual income would be 12 x $3,000 = $36,000.

Then, if your expenses are $600 per month, that would be $7,200 per year and your N.O.I. would be $36,000 - $7,200 = $28,800.

Divide 28,800 by the purchase price, say $300,000, multiply it by 100 and you find your CAP rate is 9.6%.

This CAP rate is essential for comparing the profitability for your choices of investment property.

Article by Ian F. Campbell at Investment Properties Mexico, experts in Mexico real estate.

Visit their website to find out more about the what Mexico can offer you in terms of investment property.

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Six Rules When Buying an Investment Property

2010-02-14T20:14:00.005+11:00

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Six Rules When Buying an Investment Property

By Mark A Walker

Investing in properties is a good way to make money and build up your net worth. It is a very safe option of getting rich over the long term, as real estate values generally increase over time. However, returns are not very fast and you have to wait for considerable time before you make substantial money from real estate. To make the most of your investment into real estate, follow the six simple rules below.

: When purchasing investment property, look into your areas expertise and knowledge. Do you know about vacation homes, single-family homes, multi-family buildings, or commercial properties? You should know how and when to sell the property to earn the highest returns. If you are unaware of all rules and regulations relating to that property type, you may not be able to sell the property at a high profit.
: It is not essential to sell an investment property immediately after purchase. You can hold on to your investment until real estate values increase and then sell the property. Sometimes, it is best to bide your time and wait for real estate booms to sell and earn good profits on your investment. Another opportunity is to make suitable renovations and sell the property at an escalated price to earn very good returns. Property values increase over time and net worth of your investment increases. You can invest in real estate to receive a regular income from rent while you are waiting for property values to rise.
: Purchase your investment property in an area experiencing higher growth than other local areas. Inspect properties in different areas and choose those that satisfy necessary requirements. If you plan to invest in the property for several years, look into how the area will develop in the next few years and whether you can receive desired returns. You should have sufficient foresight and knowledge of the area.
Visit local councils and research what developments are happening in the vicinity in the near future. Drive around and scout for development and other area investments. Check the property is located near essential amenities like schools, hospitals, banks, transport, and supermarkets.
: Your investment property yields good returns if there is sufficient rental demand for the property. Renters should be interested in renting the property. Normally, rental demand is high in densely populated areas like cities. Countryside locations do not have high demand and rental income could be substantially less.
: If you want to make money from real estate investing, choose properties that are being sold for less than the current market value. These properties may not be in the best shape and condition, so plan to incur repair and renovation costs. Before buying, hire a renovation consultant or home inspector to evaluate the cost of all repairs and renovations. Decide on the purchase price after deducting all additional costs. Ensure you can make a good profit when you sell the property after the renovation is complete.
: Investment property purchase requires strong financing. You may not be able to pool the entire cost, so consider the options for property loans. Assess all your mortgage options, so that you do not have excessive burden of repayments. If you are renting the property, apply the rent directly to the mortgage. Select a mortgage that can be repaid from the sale of property without additional fees or penalties for early repayment, especially if you plan to resell the property quickly.

Real estate investing for profit is a good option to earn money if you are an educated real estate investor. Investing in real estate is wise and can give even conservative investors high returns in the long-term. Renting the property while waiting for the best time to sell will increase your current income and cover the mortgage repayment costs.

Real estate is a complicated market. Even more so thanks to economic slips and slides.

The best way to survive it is to save thousands buying a home. We've got the ultimate inside scoop on http://www.EdmontonHomesBlog.com.

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2009-12-28T18:37:00.003+11:00

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SiteMap For Freedom Steps With Property Investing

2009-12-09T05:43:00.004+11:00

SiteMap For Freedom Steps With Property Investing

Home Page
Begin Real Estate Investing the Easy Way
Discover how easy it is to begin real estate investing and build wealth with property. An experienced property investor shares his knowledge and experiences with you.

How To Start
Your Real Estate Investment Guide
Use this real estate investment guide to help you get your first investment property and then move on to set yourself free with real estate investing.

Finance
Real Estate Investment Financing, 7 Tips To Help With Getting The Best Result.
Real Estate Investment Financing - These 7 tips can enthusiastic and hopeful applicant in to an long term client of any financial institution.

Statement Of Financial Position - facilitate your property finance application
Statement Of Financial Position - give your self the best chance for a real estate investment loan by having a list of your assets and liabilities.

Refinancing Real Estate Investment, Your First Step To Freedom
By refinancing real estate investment, you gain access to money that is lying dormant and put it to use.

Loan to Value Ratio - learn what it is and how it affects you
Loan to value ratio (LVR) is a ratio that the banks and financial institutions use to assess the level of debt that a certain asset should have. The LVR for property is higher than the LVR that banks

Lenders Mortgage Insurance - use it to increase your investing power
Lenders mortgage insurance is a great tool in the arsenal of any potential investor. It will help you to borrow more when purchasing property, improving your return on equity.

Line Of Credit, The Sophisticated Way To Finance Your Real Estate Investments
A Line Of Credit will give you the freedom and flexibility to repidly move towards your property investing goals.

Use Your Home Equity To Finance Your Real Estate Investments
Your home equity will enable you to begin investing in property, and then it can make you wealthy. Read on to see how.

Other Finance
Property Investment Finance
Real estate investment finance puts power in your hands. It's an opportunity to vastly multiply your return on investment and be way more creative in your wealth building.

Property Selection
Use these Property Selection Tips to Help You Find Long Term Success
Investment Property Selection is vital to your ongoing success. Use these tips to help you find the easiest to manage and most profitable properties.

Business Plan
Use this business Plan to Keep you Focused and Moving Forward
Here is a simple business plan to guide you as you build your property portfolio and wealth through investment property.

Real Estate Investing Primer
Real Estate Investing Primer - Investing in real estate does not have to be complilcated. Here are some easy strategies to begin investing in property. property investing is not a get ricH scheme.

Why Property
Why Property Investing - Compelling Reasons to Invest in Property
Why property investing as a vehicle for creating your financial freedom? Here are three good reasons to invest in property, plus several others you may not have thought of.

Financial Freedom Can Be Yours With Real Estate Investment Property
You can have financial freedom, sooner than you think. Here is a picture of how to do it.

Flipping Property
Flipping Real Estate - Follow these 7 Simple Steps to Making Money
Flipping real estate - This outline shows two ways to do it and outlines 7 simple steps to follow

Make Money Flipping Property - Discover the real way to make money property.
Make money flipping property - This articles outlines 10 principles you need to be aware of if you want to flip real estate.

Flipping Real Estate Contracts To Build Your Capital Base
Flipping Real Estate Contracts is a low cost way for beginner investors to accumulate capital.

Tips For Flipping - 7 Simple tips for flipping real estate.
7 Tips For Flipping Houses that will help find and analyze the right property to flip and avoid the mishaps.

Calculate profits flipping real estate by understanding your costs.
Calculate Profits Flipping - This article outlines how to calculate your profits for any particular flip or contract assignment by understanding the costs involved in making a deal.

Risks Flipping Property - Be aware of the risks involved in flipping real estate
Risks Flipping Property - There are risks involved in flipping real estate, be aware of what can happen and you will avoid setbacks. This article gives a typical example of what can happen.

Real Estate Bubble Aftermath -, Disregard talk of a terrible aftermath....
Real Estate Bubble Aftermath - The end of the real estate bubble has been talked up by a number of sources, but who really benifits and should you pay any attention.

Wholesale Real Estate Investing - Skyrocket your net worth $20,000 to $100,000..
Wholesale Real Estate Investing - discover how you can find and acquire large chunks of equity for cents in the dollar and skyrocket your net worth by $20,000 to $100,000 on every real estate deal ...

Software
Real estate investment software package s - Help with property investing
Real estate investment software package s can be divided into 2 groups. Those that help you before you buy and those that help you after you purchase a property.

Real Estate Analysis - How to Construct an APOD and Nail Your Next Investment
A must-read if you are working with or want to work with rental property. Learn what you need to know about an APOD, how to use it to evaluate the property's first-year performance, and how to constru

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Freedom Steps With Property Investing

11 Things You Want in Real Estate Investment Software

2009-12-08T21:14:00.006+11:00

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Real Estate Investment Software

11 Things You Want in Real Estate Investment Software

By James Kobzeff

Real estate investment software is one of the best tools real estate investors and professionals can use to analyze and evaluate multifamily property.

Here's why.

Good real estate investment software provides the forms, makes the computations, and creates the reports required for a real estate analysis. Any user (experienced or not) can create professional-quality rental property reports for a myriad of reasons, such as decision-making, or as property presentations to buyers, sellers, colleagues, partners, or to lenders. All within minutes.

Moreover, real estate investing is all about the numbers. Therefore, real estate investors who are considering real estate investment opportunities look for and make their investment decisions based upon the bottom line. So real estate investment software becomes an essential tool for real estate analysis because it provides quick and concise cash flow, rate of return, and property valuation numbers.

Though most real estate analysts prefer to buy real estate investment software, it should be pointed out, though, that you do have other options.

You can, for instance, scratch out the numbers with a pad and pencil, or perhaps make a hasty rule-of-thumb calculation off the top of your head. But it should be obvious that these approaches, although maybe useful in limited cases, do not provide the best solution. They clearly do not provide the deep property analysis required to make a smart investment decision, nor do they include the data likely to sway the opinion of any other person, entity, or institution like a partner or lender.

You can also use Excel and develop your own spreadsheet. The problem here is time. It takes countless hours to embed the computations properly, and to format the forms and reports, even if you're familiar with Excel. If you're not familiar with Excel, then triple the time.

Before you pursue those options, though, be mindful that successful real estate professionals do not waste time or effort reinventing the wheel. They prefer to invest in real estate software so they can spend their time generating moneymaking deals.

But I digress. So let's get back on topic and look at what you should expect in good real estate investment software.

: You want simply to enter the values and have the software do the rest. You never want to look and wonder, "What do I do next?" To check, examine the website. Remember that the same company praising their software publishes the website. If the website is not well organized and informative, or if its lack-luster and confusing, the software might not be what you want.
: You want the ability to analyze one unit or a thousand units, or even more units if necessary.
: You want ample control over the financing assumptions. For example, you want the ability to enter multiple loans, the flexibility to enter the loan either as a loan assumption or as a new loan, and then have it computed as either a fixed or interest-only rate.
: You want the real estate investment software to calculate cash flow returns and loan ratios such as cap rate, gross rent multiplier, cash on cash, operating expense ratio, net operating income, debt coverage ratio, loan-to-value ratio, break-even ratio, and profitability index.
: You want the ability to determine cash flow after tax as well as your tax benefit or loss. To do this, the real estate investment software must include computations for tax shelter elements such as cost recovery and mortgage interest.
: You want the software to create computations involving the time value of money such as internal rate of return and net present value. Why? Because you will discover that in real estate investing, the timing of cash receipts can be as important as the amount.
: You want printable reports that are easy to read and have eye-catching appeal. Remember, you might be trying to influence the opinion of a buyer, seller, colleague, or lender regarding this property, and they might have to make their decision based on the reports even before seeing the property.
: You want the ability to "upgrade" from a less-than-platinum-grade-version to a platinum-grade-version without having to re-purchase the platinum-grade version at full retail price.
: You want to have open access to tech support in the event of a question or problem. Preferably, email and telephone support . Exercise caution if the company or developer appears overly allusive--there is nothing more frustrating than encountering a problem and then not being able to talk to the software developer about it.
: You should be able to find very good real estate investment software on the web for about $300. Which is very affordable given the fact that you will be able to start working with income-producing property immediately.
: You should examine the names, professions, and titles of customers who have submitted a testimonial. If you can relate, then you may have a winner.

There are other things you want real estate investment software to provide such as seamless printing, picture function, branding and name-rider integration, email capability, help file, Windows compatibility, and so on. The point is not to be hasty. Spend time on each website looking around to be sure you get the essentials and perhaps a little extra at the best price possible.

About the Author

James Kobzeff developed ProAPOD to make real estate investment software easy and affordable for real estate professionals and investors. Discover how you can create cash flow analysis and rate of return presentations in minutes! Go to => http://www.proapod.com

Article Source: http://EzineArticles.com/?expert=James_Kobzeff
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A Simple Real Estate Investing Primer

2009-12-08T17:11:00.000+11:00

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A Simple Real Estate Investing Primer

Adem Hamidovic

In this real estate investing primer I hape to give you a simple view into the basic principles that underlie investing in real estate.

There are a great many books and web sites devoted to real estate investing out there, but most of them concentrate on one specific area of investing. It's often hard to find a general description of real estate investing, one that lists the various real estate investing strategies and how to get started. That's what this article will set out to do.

Before beginning, you must understand that real estate investing is not a get rich quick scheme. Real estate investing can, and will, make you wealthy, but it certainly won't happen overnight and it will require work. As you perfect your technique and gain experience, the amount of work needed to gain a lot of money will reduce, but it will take effort and persistance to make it there.

If you're completely new to real estate investing then the only sort of investing strategy you're likely aware of is rental properties.

Landlording has been around since there have been houses and people to rent them to, and it will continue to be a wealth builder. In fact, most of the 'no money down' real estate strategies you hear about still include rentals as part of their plan. Still, there are other ways to make money from real estate investing out there.

The next most 'traditional' method is to buy a fixer-upper, fix it up, and then sell it for a profit. This is commonly referred to as 'rehabbing' and is a very good way to make a lot of money in a relatively short period of time. Most rehabbers won't even look at a property unless they can make at least $20,000 of profit, and this is usually within 3-4 months time. Rehabbers tend to be experienced investors with available money, or have partners who help provide any extra cash required.

But if you're just starting out you likely won't have access to large amounts of money. One way to get involved in this area of real estate investing without needing any money at all is to 'flip' houses to these rehabbers. What this entails is you going out and finding these fixer-uppers, noting all the work required to fix the place up. You then place a low offer in to the owner, taking into account the fix up price and some built in profit. Once you have the house under contract you then flip it to a rehabber for a small fee. This can result in several thousand dollars for you, without you having to spend a dime. 'Flipping' properties can be a great way to start your real estate investing career.

Another 'no money down' technique that's popular on the late night infomercials is called 'lease optioning'. This is basically a rent to own strategy that allows you to control a property without ever taking ownership of it. It's a slightly more complicated strategy that warrents its own article, but it does allow you to make money in several different ways, each without ever having to spend any of your own money. If you're not put off by longer term investments then lease options are definately worth more research.

There are other strategies that involve foreclosures and getting the home owner to sign the deed over to you, but for now I'd suggest learning more about flipping and lease options as entry-level real estate investing strategies.

How do you find properties that would make good real estate investments? Again, an entire article can be devoted to that, but there are basically two ways: you go looking for them, or you get them to come to you. The first way involves reading the newspaper classifieds and scanning the Multiple Listing Service (MLS). This is where having a great real estate agent is a must - they can get you more details on homes than you can view on the mls website, and can often let you know of great deals before they even become available to the general public.

Having home owners contact you means setting up an advertising campaign. This can involve placing ads in the newspaper, placing bandit signs at strategic locations around town, starting a direct mail campaign, etc. There are many ways to let people know that there's a new real estate investor in town, and it would be in your best interest to try each of them to see which ones work best for you.

Whether you decide to go looking for deals, have them come to you, or both, they key is to be persistant. Real estate investing is a numbers game - most of the time you won't be able to make the deal work, but every time you do it translates into thousands of dollars for you. The more owners you talk to, the more deals you'll be able to do, the more money you'll make.

I hope this article gives you a bit of an idea of what the world of real estate investing is like. There's a lot to learn out there, and all of it is very interesting. Find the area that interests you the most, then get out there and start talking to home owners. Don't be discouraged if you're getting turned down a lot - just remember that when it does pay off, it will pay off big!

Adem Hamidovic is a part time real estate investor and operator of www.ProfitPiggy.com, a website devoted to new and experienced real estate investors alike. - admin@profitpiggy.com

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The Real Estate Bubble Aftermath

2009-12-07T18:41:00.002+11:00

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The Real Estate Bubble Aftermath

The End Of The Real Estate Bubble - What Does It Mean To You

Jeanette Joy Fisher

Last spring, I was invited to go to Philadelphia and participate in a "real estate bubble" discussion on Ch 8's "Money Matters Today".

Television reporters, newspapers, and media hype love scaring you to grab your attention. On the TV show, I defended the real estate market.

What's behind all this bubble talk?

Before you give any substance to warnings about a "real estate bubble", look closely at the source.

Many stock brokers jump on the bandwagon of real estate doom to get investors back into the stock market. Also, many negative reports originate from mortgage lenders who want to keep the mortgage insurance rates high and keep the insurance premiums coming in for loans on houses that have appreciated.

So, What Happened To The Real Estate Bubble?

I can't speak for all real estate investors. If my family had been scared into discounting our investments, selling out, and not buying more property in 2005, we would have lost a million dollars.

We bought and held houses.

All of our property increased by 20% - 35% and the ones we fixed increased in value even more.

In particular, for one home we paid $120,000 and spent $10,000 in repairs - within the year it appraised for $325,000.

Who profits from the real estate bubble?

Besides media scaremongers, mortgage insurance providers, and stock brokers, real estate investors make even more money. What's that? How do real estate investors make money from the real estate bubble? They take advantage of desperate home sellers scared by the media.

In January 2006, we bought an investment property that the home seller, in the midst of a divorce, discounted for a quick sale. The $340,000 property appraised for fifty thousand more than the purchase price.

Now, we could quick sale the property for fast cash, but we're in for the long haul.

The property has great development potential.

So, we'll let the tenants pay for the mortgage and maybe tear the small house down in a few years. A half acre, one lot away from a future marina near new condos, has many possibilities.

Keep the bubble talk. People always need housing.

The more you hear about the pending burst, the more money real estate investors CAN make.

About the author: Jeanette J. Fisher

Jeanette offers a FREE "How to Start Real Estate Investing" teleseminar and a free ebook, "The Truth about Making Money Flipping Houses"

Visit www.doghousetodollhousefordollars.com

Property Investment Finance

2009-12-07T17:39:00.000+11:00

Property Investment Finance

Your Express Elevator to Real Estate Investing Success

The way in which you obtain and use property investment finance can make a sizeable impact on the rate at which your property portfolio grows.

I'm sure you've heard it said before but it is absolutely true that

The golden rule in real estate investing is other people's money (OPM).

This is the most important lesson you can learn!

Yes it's true, the golden rule in real estate investing is other people's money.

Use Other peoples Money

What this means is that whenever you are buying an investment property you should be aiming to pay as little as possible from out of your pocket, and obtain real estate investment finance for as much of the purchase price as you can. This is a vital factor in real estate investment property purchasing.

"I'd Rather not have any Debt"

"I have enough money, I'd rather pay cash."

OR
"I'd rather not have any debt."

This is not the way to build your property empire.

Even if you have $100,000 sitting in the bank right now, you could go and buy one real estate investment property but with the system that I am going to show you, you will be able to acquire multiple properties and reap the harvest of exponential capital gains and increasing rents for many years to come!

Gain Leverage by Using Real Estate Investment Finance

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Net Present Value - How to Use NPV to Evaluate the Price of a Property

2009-12-05T16:49:00.000+11:00

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Net Present Value - How to Use NPV to Evaluate the Price of a Property

By James Kobzeff

Net Present Value, is often used by a real estate investor to try to evaluate the price for a rental property with time value of money consideration has undoubtedly used .

Although it should not be used as the only factor to decide whether a real estate investment provides a good buying opportunity, Net Present Value does provide the investor with a quick and easy way to determine whether the price that will be paid for the property will yield the investor's desired rate of return (discount rate).

What is net present value?

NPV is the difference between the present value (PV) of all future cash flows produced by a rental property and the amount of cash investment (or, initial investment; i.e., down payment and closing costs) required to purchase the property. For example, let's assume that the real investor desires a 10% yield on all future cash flows, must invest $100,000 cash to purchase the rental property that might produce those cash flows, and wants to know whether the price he will pay achieves his desired yield. He would calculate NPV.

Here's how it works.

First, all future cash flows would be discounted back at 10% to determine the present value of those cash flows. Secondly, the $100,000 initial investment would be deducted from the PV. The difference between the two is the NPV. For example, if the present value winds up equaling $110,000, the $100,000 would be subtracted to determine a net present value of $10,000 ($110,000 - 100,000 = 10,000). Whereas, if the PV calculates at $90,000, the NPV would be -$10,000 ($90,000 - 100,000 = -10,000).

What does it mean?

Whenever the NPV is greater than zero, it means that the discounted value of the future cash flows is greater than the initial investment. In other words, you're getting a good deal and getting a rate of return that is actually higher than the discount rate you desire (in fact, you can pay $10,000 more for the property and still achieve a 10% yield). Likewise, any NPV less than zero means the opposite. You're getting a lower rate of return than you desire, and would have to pay $10,000 less for the property to get a 10% rate of return.

About the Author - James R Kobzeff

James is the developer of ProAPOD, a very affordable real estate investment software solution that includes computations for NPV. Discover how to create rental property analysis presentations with automatic calculations for net present value and other rates of return in minutes! Go to => http://www.proapod.com

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Loan to Value Ratio - LVR, What Is It, How Can It Help You?

2009-12-05T16:19:00.000+11:00

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Loan to Value Ratio - What Is It & How Can It Help You?

Simply put loan to value ratio(LVR) is a ratio that the banks and financial institutions use to assess the level of debt that a certain asset should have.

What does it mean if a bank will give you a HIGH loan value ratio when you are applying for a loan on a particular investment property?

What does it mean if a bank will only give you a LOW loan value ratio when making a morgtage application.

What Does A High LVR Mean To You?

If you can get a high LVR then that means that the bank or financial institution is willing to loan you more of the purchase price of your property.

For example, the loan to value ratio for property is higher than the LVR that banks will give for say shares.

So for example say you wanted to purchase a $100,000 investment.

A bank will be happy to lend you $80,000 on a $100,000 property giving an LVR of 80%

If you were investing in shares the margin loan (LVR) they would give you is usually about 50% and some times less. This would give you an LVR of 50% or less! So that means they would only loan you $50,000 of the $100,000 worth of shares you wanted to buy.

Lenders Mortgage Insurance - Overcome a Low LVR?

If you are given a low LVR by the bank when applying for a loan, then they are giving you a measure of what the level of debt or risk on that property that they are willing to support.

In the case of property, this means that you will either need to fund the difference out of your available cash or find further finance to purchase.

The alternate method to overcoming the situation where you are given a low LVR is to use lenders mortgage insurance.

The Differences between Financial Institutions

There are differences between financial institutions.

Different banks and other mortgage originators will use different valuers and have different methods of assigning or determining value.

Some will be more keen to get your business and so be willing to offer you a higher LVR. This is better for you.

So shop around when looking for a loan and find the lender that will give you the best loan to value ratio that you can get and preserve your available capital reserves.

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Real Estate Investment Financing

2009-12-04T04:44:00.002+11:00

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Real Estate Investment Financing

Use These Finance Techniques To Increase Your Net Worth

The area of Real Estate Investment Financing, is one that can have a huge impact on your progress as a property investor.

Starting from approaching a lending institution for a loan for your first REAL ESTATE INVESTMENT PROPERTY to building your property portfolio, the plan I recommend HERE is one that will see your net worth increase considerably and within a short time the banks will be treating you with the utmost respect.

Of course the way in which you obtain and use Property Investment Finance will have a bearing on how fast you progress and just how soon you can retire!?!

These real estate investment financing ideas and concepts will take you from uncertain initial contact with the bank to a seasoned property investment finance pro.

Be Prepared

This is an important step towards obtaining the best terms & conditions for your your real estate investment financing.

Right from your very first approach to any bank or lending institution you should be armed with a document that clearly shows your current assets and liabilities and your income and expenses.

So transform yourself from an hopeful applicant into a knowledgeable long term cliant. This is what banks love.

This has proved to be an extremely positive factor for me on numerous occasions in negotions with various loan officers. For our first two investment properties, we didn't have one and we were treated like amatuers.For the next time we approached the banks to apply for a loan, we went equipped with a document I had produced that gave a clear Statement of Financial Positionand showed our income and expenditure.

Avoid Cross Collateralisation

What is cross collateralization and why should I avoid it?

Cross Collateralizationoccurs when the bank uses the security for one loan to secure another loan. The advantage of doing this is that you can borrow a greater percentage of the purchase price of the next property, perhaps even 100%.

The disadvantage of cross collateralization is that it can bring your real estate investment financing strategy to a standstill.

You may find that because of cross collateralization you are restricted or unable to purchase another investment property.

For example it is usually mandatory that the properties being cross collateralized be in the same state. If you want to be free of restrictive banks Cross Collateralization rules then use a line of credit to borrow the funds you need instead.

Refinancing Real Estate Investment

This is one of the best ways to begin real estate investing and to keep your real estate investment financing moving freely. The best thing is that you can arrainge things so that any one property is not held ransom by a bank or financier (which can really put a dent in your property investing plans).

Refinancing real estate investment provides the perfect method for any property investor to extract capital from the increased value of a property without selling it.

This is a great way to move forward with your property investing plans and keep your real estate investment financing options open.

If you were to sell sell an investment property you immediately lose the future capital gains, income stream and taxation benefits that property would bring.

What's a HELOC and What Can It Do For Me?

A HELOC is a Home Equity Line of Credit.

This is where a bank values your home and determines the available equity you have in your home and then makes funds available up to a perentage of that amount.
This is the most flexible and effilcient way to get started with your real estate investment financing!

How can a home equity line of credit help you with your real estate investment financing you ask?

Once you have established a line of credit you can use it to fund any shortfall that you may have when purchasing an investment property, that includes deposit amount and purchase costs.

This is by far the most preferable way to purchase your first and successive investment properties.

Investment Property Mortgage Rates

Should you be concerned with investment property mortgage rates?

Many "property experts" say that INVESTMENT PROPERTY MORTGAGE RATES should not be of primary concern when looking for a PROPERTY INVESTMENT LOAN. This is only true if you are not concerned with your immediate cash flow situation. Read a more detailed analysis HERE.

No Down Payment Investment Property

This is tied in to the previous tips on refinancing and use of a line of credit.

The general ides is that you purchase a no down payment investment property using the equity you have in another asset, usually your home.

Real Estate Investment Trusts

If you prefer a hands off approach you can invest in a REAL ESTATE INVESTMENT TRUST. You can find more details HERE.

However, in my opinion, there are many more advantages to INVESTING IN REAL ESTATE directly.

For more information about a Home Equity Line of Credit see this article:
Steps to Freedom: What Is A Line Of Credit

A Home Equity Line of Credit (often called HELOC, pronounced HEE-lock) is a loan in which the lender agrees to lend a maximum amount within an agreed period ...

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What Is A Line Of Credit

2009-12-03T16:34:00.003+11:00

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Line Of Credit

What Is It?

A line of credit is a type of loan, where the bank determines a limit amount. It differs from a normal loan in that it allows you the borrower to use the money available in the line of credit (LOC) at any time and then repay the amount outstanding at the your discretion.

Home Equity Line of Credit

Often the first form of this type of loan that a property investor discovers is the home equity line of credit. A home equity line of credit is sometimes referred to as a HELOC.

This is where the lending institution vvalues your home and uses the difference between the current value and the amount you owe on your home to calculate how much they will make available to you based on the equity you have in your home.

For example if you have a home valued at $500,000 and you owe $200,000 on it, the equity you have available would be $300,000. Your lending institution will then agree to loan you up to a limit amount determined by their lending criteria.

Why Would You Want One?

The first and most compelling reason why you would want to have and use a line of credit is the freedom and flexibility it gives you.

A conventional loan is linked to a specific purpose.

With a line of credit the lender has agreed to loan you a certain amount of money, but you are free to use that money for any purpose you decide, and you have the flexibility to draw upon your available balance at a time that suits you best.

You can use "draw downs" to fund the deposit and purchase costs for the purchase of property to meet a temporary shortfall in cashflow for funding the monthly payments on your property loans or to fund a tax free life style that the increasing values of your property portfolio will enable you to live.

See These Related Articles For More Information

Using The Equity in Your Home

Wikipedia - Line Of Credit

Wikipedia - Home Equity Line of Credit

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APOD - How to Construct an Annual Property Operating Data Statement

2009-12-03T14:03:00.001+11:00

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APOD - How to Construct an Annual Property Operating Data Statement

By James Kobzeff

The APOD (an acronym for "Annual Property Operating Data") is one of the most popular reports in real estate investing because it gives the real estate analyst a quick evaluation of property performance for the first year of ownership. In fact, it would be surprising not to encounter an APOD in the pursuit of real estate investment property because of its popularity.

In daily life, the Annual Property Operating Data essentially serves as the real estate equivalent of an annual income and expense statement, but more in the capacity of a "snapshot" of a property's income and expenses.

Characteristics

Projects property performance for the first year of ownership only

Ignores tax shelter consideration

The bottom line is cash flow before tax (CFBT), not cash flow after tax (CFAT)

Reveals income, operating expenses, net operating income, debt service, and cash flow concisely and therefore serves investors well as a good "first-glimpse" of the investment opportunity

A well-constructed APOD is best for comprehension, obviously, and the clearer annual property operating data is presented the easier the determination of property performance. In truth, however, the emphasis is on correct numbers, not style. Here's the procedure.

Show the Gross Scheduled Income (GSI) This is the income derived from rents and should represent the annual sum of all rents as if the units were 100% occupied. Include an annual rent even for vacant units; you can use any rent you like (perhaps market rent) just as long as it is realistic.

Show an amount for vacancy and credit loss Deduct this amount from GSI to compute the Effective Gross Income (or EGI).

Show the income generated from other sources (if any) Include things such as laundry income, rents from storage units or garages (if any) and add the total to EGI to compute Gross Operating Income (GOI).

Show the individual operating expenses and total Include expenses required to run the property such as property taxes, property insurance, utilities, trash, repairs and maintenance, property management, advertising, landscaping, and so on. Do not include debt service. Compute a total and label it Annual Operating Expenses.

Deduct the annual debt service (mortgage payment) from NOI This computes the investment property's bottom line, cash flow, or more specifically Cash Flow Before Taxes (CFBT).

Deduct the annual debt service (mortgage payment) from NOI This computes the investment property's bottom line, cash flow, or more specifically Cash Flow Before Taxes (CFBT).

Format of the Annual Property Operating Data statement

Okay, let's consider the entire list from top to bottom so you can see a typical format used in an annual property operating data:

  Gross Scheduled Income (GSI)

  - Vacancy Allowance

  = Effective Gross Income (EGI)

  + Other Income

  = Gross Operating Income (GOI)

  - Operating Expenses

  = Net Operating Income (NOI)

  - Debt Service

  = Cash Flow Before Tax (CFBT)

Special Features

As stated earlier, an APOD is more about substance (accurate financial data) than it is about style and panache. Nonetheless, annual property operating data that also includes computations for cap rate, gross rent multiplier, price per square foot, and cash on cash return are help. Yes, you can exclude the extra effort to include these computations, but it does create annual property operating data that will make you proud to present to customers and lenders.

Please feel free to preview a sample APOD on our website.

Recommended Resources:
ProAPOD Real Estate Investment Software: www.proapod.com

About the author: James R Kobzeff

James developed ProAPOD Real Estate Investment Software to make rental property cash flow, rates of return, and profitability analysis presentations possible in minutes. Discover all the benefits and reports at www.proapod.com

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Use a Cash Flow Proforma to Evaluate A Rental Property's Future Cash Flow Performance

2009-12-01T05:27:00.000+11:00

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Use a Cash Flow Proforma to Evaluate A Rental Property's Future Cash Flow Performance

By James Kobzeff

A cash flow proforma is a useful way for real estate investors to evaluate an investment property's future cash flow performance. Unlike an APOD, which merely gives a snap shot of the property's first year cash flow, proforma income statements look at revenue and expense projections typically up to ten years, enabling the investor to evaluate the investment real estate's cash flow, tax benefit (or loss), sales proceeds, and other financial projections.

The cash flow proforma income statements is generated by looking at the financial performance of the rental property the year before and then using a variable to make projections into the future.

For example, if:

    Last year's income was $30,000, 
    The operating expenses $12,000, and 
    The net operating income was $18,000 ($30,000 - 12,000),

And you would like to determine next year's net operating income in the event revenue increases 5% and operating expenses increases 4%, you would compute as follows:

Revenue (next year) less Expenses (next year) = Net Operating Income (next year)

Revenue (next year) = $30,000 + (30,000 x .05) = $31,500

Expense (next year) = $12,000 + (12,000 x .04) = $12,480

Net Operating Income (next year) = $31,500 - 12,480 = $19,020

In other words, now you know what net operating income (NOI) you can expect the property to generate in the event that next year, the property's rental income increases (inflates) 5% and its operating expenses increases (inflates) 4%.

This is the essentially the pattern for each year in the proforma, starting with the end of year one and extending out through the end of year ten (i.e., EOY1, EOY2, EOY3, and so on up through EOY10). This year's data is inflated by some variable to compute next year's data.

Moreover, its exactly the same way the computations are made each year for the other returns such as cash flow before tax (CFBT), cash flow after tax (CFAT), sale proceeds after tax (generally requires an inflation rate for property value), cap rate, return on equity, and other returns provided by your specific cash flow proforma. Returns are recalculated annually based on changes made to income, expenses, and property value.

How do I create a proforma income statement?

Software You can invest in a real estate investment software that will automatically create a cash flow proforma income state for you. Bear in mind, however, that software solutions tend to vary and whereas one might include computations for tax shelter, another might not.

Manually You can use an Excel spreadsheet to create a Proforma Income Statement. In this case, it helps to have some knowledge of Excel, and you should allow yourself several hours to create a good proforma.

Whatever method you choose, though, real estate investment software or a spreadsheet, here are a few important considerations to keep in mind about your statement.

Consider what you are seeking to accomplish with the proforma. You want to analyze the cash flow and other performance measures resulting from changes to such variables as income, operating expenses, and property value over future years.

The pro forma is just an estimate (a guess). Do not rely solely upon a proforma income statement to make your investment decision.

Though a proforma can be constructed to project any number of future years, because a it's speculative, you might not want to go out further then ten years (I wouldn't).

Be sure to use realistic numbers. Start with the current income and expenses and inflate them annually by a reasonable amount. Don't inflate income 10%, for instance, when 2-3% has been normal for your market over the past several years.

As stated earlier, a proforma is a good way for a real estate investor or analysts to evaluate the future financial performance of investment real estate. Moreover, it makes a good presentation to other investors and lenders because it does peek into the future.

You can see a sample Proforma on my website at http://www.proapod.com. Follow Software Reports --> Proforma Income Statement.

About the Author

James Kobzeff developed ProAPOD Real Estate Investment Software to help you succeed with rental property analysis. Want to learn more about how to create cash flow and rates of returns in minutes? See it at => http://www.proapod.com

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Creative Financing - Use it To Get A Better Real Estate Deal

2009-11-30T17:22:00.001+11:00

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Creative Real Estate Finance

Use it To Get A Better Real Estate Deal

Peg Holland - Dec 4th, 2007

When it comes to real estate investing, there are plenty of reliable resources that provide some creative financing options:

Get A Seller's Concession: In a slow market, such as we have today, a motivated seller may readily concede a portion of the closing costs to offset the buyer's financial burden at the closing. For example, if you, as the buyer, are purchasing a property for $100K, ask for a seller's concession of 3 to 5 percent, which is within the guidelines that most banks allow, depending on the amount financed. If you ask for a 3 per cent concession, which in this case is $3,000, the seller is agreeing to receive $97,000 at closing. Once you have this agreement in place, be sure to include it in the contract.
Get 100% Financing: Because of the slow market we are in today, you will find many in the lending industry tightening up their practices. However, there are still plenty of mortgage products to meet most buyers' needs. As an example, there is an 80/20 mortgage that allows for the entire cost of the property to be financed by the bank. This is especially beneficial if you do not have a down payment. Here's how it works: The primary loan (i.e. the first mortgage) represents 80% of the mortgage and the secondary loan (i.e. second mortgage) represents the remaining 20%. It's best to try to get a fixed rate on the first mortgage because more than likely you may have to pay a higher adjustable rate on the second mortgage. Go to banks who have been in business for a long time or mortgage brokers who have access to a wide number of lenders and ask them what type of mortgage products they offer. Recognize that although this will be 100% financing, you still may need to pay closing costs for the loan, so ask, at the very beginning, what fees are involved with the funding.
Find A Program Or Organization: National programs abound for first time homeowners and investors also. There are programs that offer down payment assistance to first time home buyers with low to moderate income. Look up the Neighborhood Assistance Corp of America (naca.com) which offers its members counseling, low interest mortgages with no down payment or closing costs and also renovation assistance. There may be rules and restrictions, so be sure to do your due diligence before making a decision.
Use OPM: That's right...buyers can use other people's money by partnering with investors, friends, colleagues and even family as well as your traditional bankers and mortgage brokers. Your agreement with your partner should specify the loan amount, the interest rate, the payback period and any other stipulations you might make. It's best to set up the proper paperwork through a real estate attorney.

Return from Creative Real Estate Finance

To Refinancing Real Estate Investment, Your First Step To Freedom

Or Return To the Home Page Freedom Steps With Property Investing

About the author: Peg Holland

Peg, owner and CEO of Paragon Enrichment Group, a consulting firm for home based internet businesses, has been involved with network marketing for several years.

Prior to that she had held corporate managerial positions where her financial skills were used daily as she forecasted various new business opportunities.

Also, Peg had previously been a licensed Realtor, hence her continued interest in the Real Estate/Mortgage Industry. http://www.6figuresasap.info

Visit www.6figuresasap.info

3 Reasons to Hire a Property Management Company to Run Your Real Estate Investment Property

2009-11-25T18:19:00.017+11:00

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3 Reasons to Hire a Property Management Company to Run Your Real Estate Investment Property

By Joel Teo

The recent downturn of the global stock market saw millions of 'every day' investors having their fingers badly burned. Overnight life savings were eaten away, retirement funds went into decline and the economic forecast for all of us who had any money invested in stocks and shares was gloomy to say the very least.

Real Estate Investment sounds like a cool thing to do during the weekend but the problem arises when you start having to many properties to handle. The solution to your real estate investment problem would be to hire a property manager who can then run your property for you and deal with any problems that may arise. The key is to get a reliable person who can then do any repairs or maintenance work for you.

This article will highlight three additional reasons why you might want to hire a property management company to look after your real estate investment property for you.

The Time Element

Firstly, you might be a busy professional or business person during the weekdays and you do not want to run around looking for a plumber or roof repairer sometime during the week. Time is valuable also if you have several properties that you own and it does not make sense to baby sit your properties.

Opportunity Cost

Thus you would do well to remember that your monthly income is dependent on the number of deals that you can find to add to your real estate investment portfolio. Get your focus right and you will make more money from your real estate investments.

Proximity Is A Key Issue

Secondly, proximity is a key issue. One real estate investment author states that he does not own property unless it is within one mile from his own residence. If you want to look after your own properties it is fine but you must be able to go down and take a look if there is any issue arising from your properties.

Note that returns from both offshore rentals and capital appreciation currently in places like Dubai might prove more lucrative so if you are looking into offshore real estate investment, hiring a property management company is a must. Similarly, if you are looking at investing in property outside the state that you reside in, it will be necessary for you to hire a property management company to look after your property.

Familiarity With The Documentation, The Procedures

Thirdly, if you are new to the type of property class, you might want to consider employing the services of a property management company. For example if you have been involved in residential real estate for a long time and you decide to expand to commercial real estate, you might not be familiar with the documentation, the procedures and the possible problems that may arise from such real estate. Hiring a property management company therefore may help you solve some of your transition problems and like mentioned earlier free you to explore other real estate investments.

In conclusion, real estate investment property when done on a small scale in your locality may be okay for a while but when your investments start getting numerous and unwieldy, you might want to tap on the services of a property management company to help you manage your properties thus freeing you to look for more property deals.

Joel Teo is the owner of several websites and takes a keen interest in real estate investment.
Learn more about real estate investment at http://www.realestateinvestment101.info

Article Source: http://EzineArticles.com/?expert=Joel_Teo
http://EzineArticles.com/?3-Reasons-to-Hire-a-Property-Management-Company-to-Run-Your-Real-Estate-Investment-Property&id=197571

Home Equity Loan: What You Should Know

2009-11-25T18:01:00.001+11:00

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Home Equity Loan: What You Should Know

By Bill Darken

Many people are talking about a home equity loan, at work, weekends and even at the dinner table. Why is it the flavor of the month and what should you know about a home equity loan to ensure you stay out of strife if you decide to enter this realm.

Owning your home is a valuable asset for anyone in a lifetime. If you agree to a home equity loan, you are in fact putting this great asset at risk. Home equity loans are appealing due to the low interest rates and (in some cases) the tax deductibility of interest, but they also represent a risky business.

It sometimes has to be faced, if things don’t work out. Consider a significant expense and not to having the necessary cash to cover it. Examples of such expenses are medical bills, major house repairs or a child’s college education. A home equity loan could be the solution to your financial problems, at least for a short term. By using the equity you’ve built in your home over time you can borrow a significant amount of money. You have to repay the amount borrowed plus a (usually) low interest over a fixed period of time. If you fail to do this, you may lose your house.

Usually, in order to pay off the entire loan until the fixed time, you are required to make equal monthly payments. The lenders are obliged to disclose all important facts of their home equity plan, all terms and costs, such as the APR, different charges, and payment terms. After you have received this information, lenders do not normally charge any other fee that has not been specified in the plan. When you take on a home equity loan, you have normally had a few days from the day the account was opened to cancel it.

There are some basic although important things you should consider when you’re considering a home equity loan, in order to avoid a life changing mistake sometimes.

Firstly, if you have money problems, you must consider other options too, before using the equity in your home. Talk to your creditors or contact a budget counseling organization. A plan that would consolidate or reduce your payments might be enough to get you out-of-trouble. Also ask the opinion of someone other than the lender offering the home equity loan. someone you trust and who is reasonably knowledgeable.

If you decide a home equity loan is what you want, you should research the offers of several lenders, including banks or a credit union.

There are many lenders who make use of abusive lending practices and you must be aware of these practices if you want to minimize your risks. Here are some scenarios of such practices.

• Equity stripping. You have built up equity in your home but you don’t have much income coming each month and you need money. A lender encourages you to make a home equity loan, even if you explain that your income is not enough to keep up with it. Of course, the lender doesn’t care if you are not able to pay, he has nothing to lose, on the contrary, he wins a lot. If you are not cerebral enough to get a realistic view of things and let yourself be easily persuaded you will probably lose your home.

• The balloon payment. You’ve already made a home equity loan and, fail to pay the mortgages and you’re very close to losing your home. Another lender offers to save you by refinancing and lowering your monthly payment. You have to be very attentive regarding the loan terms. The reason why the payments are lower may be that he asks you to repay only the interest rate each month. At the end of the term, you may find you still have to pay the entire amount that you borrowed. This sum is called a balloon payment.

• The home improvement loan. A contractor offers to remodel your kitchen, or install a new roof at a low price. You explain you can’t afford this, but he offers to arrange finance through a lender he knows. You agree and he begins work. At some point, you are being asked to sign a lot of papers without having enough time to read them and you sign them. Later, you realize you’ve signed a home equity loan, and even one with aberrant terms and interest rates.

By using the equity in your home, you can benefit by receiving a significant fixed amount of money, repayable over a fixed period, available for any kind of use and at a low interest rate. You may also be allowed to deduct the interest, under the tax law. At a first glance, the home equity loan sounds appealing. But, on the other hand, if you fail to repay, for one reason or another, you may lose your home. Bottom line is that a home equity loan is a good thing if managed and used carefully. If you are considering a home equity loan, you should carefully balance costs vs. benefits, before charging ahead.

About the author:Bill Darken

There are highly informative eye opening articles and up-to-date loans news as well, see it here at home equity loan or if the previous link is not working, you can paste this link in your browser - http://loans-only.com

Article Source: http://EzineArticles.com/?expert=Bill_Darken
http://EzineArticles.com/?Home-Equity-Loan:-What-You-Should-Know&id=332459

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Exposed! The Real Estate Wholesale Quick-Turn Flipping Deal

2009-11-23T23:43:00.001+11:00

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Exposed! The Real Estate Wholesale Quick-Turn Flipping Deal

Alain Diza

Wholesale real estate investing (i.e. "quick-turn" or "flipping" real estate property) is conceptually very simple. Here's how it works:

First, "Investor A" finds a great real estate deal with a lot of equity.

Typically, Investor A will have spent a significant amount of time, money, and expertise to find the deal, negotiate the terms, and get the property under contract. By putting the property under contract, Investor A now has control of the property, and the equity in the property.

(For this example, imagine that Investor A has found a property worth $200,000 and has set a purchase price of $115,000 and he also knows that there are $15,000 in repairs, which leaves an equity position of $70,000).

Second,"Investor A" finds another party, "Investor B".

Investor B recognizes that the contract that Investor A has established is worth $70,000 in equity, and so he strikes a deal with Investor A to turn the deal over to Investor B in exchange for some amount of cash, called an "assignment fee" (we'll use the value of $12,000 in this example).

So Investor A is giving up $70,000 in "potential" profit in exchange for $12,000 in current profit. And Investor B is paying $12,000 because he believes he can make more than that on the deal, since there's a full $70,000 of equity built in.

This deal between Investor A and Investor B is called an "Assignment", because Investor A is assigning the contract to Investor B.

Third, Investor B does his "due diligence"

Due diligence in this case consists of inspections, appraisals, etc. to confirm that the deal is as good as he/she thinks it is.

Finally, at closing, Investor B closes the purchase of the property.

At this point, upon closing or completion, Investor A receives the assignment fee from Investor B.

This is obviously, a simplification of the process. But this is essentially how the "quick-turn", real estate flip deal works - not so difficult now, is it?

Now, get out there and hunt them deals down!

What? Not sure where or how? I can show you 3 quick sources to get you started right away...

About the Author

Alain Diza makes it easy to understand the mechanics of the real estate wholesale quick-turn flip. Learn this principle and private strategies the 'gurus' are charging thousands for. Get your free e-course at: Free Course

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Don't Cross Collateralize Your Loans

2009-11-23T23:00:00.001+11:00

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Cross Collateralization - there is a better way

Does It help or hinder you?

Cross collateralization occurs when the bank uses the security for one loan to secure another loan.

What you want to aim for is to have any property you own, investment or otherwise, financed with free standing finance.

How Can It Help You

For property investors just starting out, using your home equity can help you get your first investment property most easily. The advantage of using cross collateralization is that you can borrow 100% or more of the price of your next property plus the costs of purchasing (usually about 5% - 6%).

How Can It Hinder You

The biggest disadvantage of crossing your collateralization is that it ties you to one financial institution.

I'm not saying your current bank is a bad bank, they may have served you faithfully and well for many years, but you are embarking on a new business venture here and your current bank may not be able or willing to meet your needs going forward.

Yes you heard me right, every piece of investment real estate you buy is like a new business venture. It works for you producing a cash flow week in week out and will produce long term capital gains profits that are reliable, rock solid and way beyond what you could earn by working or saving.

However cross collateralisation can bring your real estate investment financing plans to a standstill.

For example it is usually mandatory that the properties being cross collateralized be in the same state. If you want to be free of restrictive banks lending rules then use a line of credit to borrow the funds you need instead.

When you are planning to purchase a real estate investment and you approach the bank to get a loan amount pre approval, the bank will usually assume that you are going to cross collateralize your home to purchase the investment property.

Why Should You Avoid It

For most property investors this is not what you want. By asking that the equity you have in your home or other real assets be made available to you as a LINE OF CREDIT you are put in a much more flexible position.

If you are sure that you only want to purchase one investment property, cross collateralizing your home may serve your purpose.

No Money Down property Investment

This is usually achieved by using a cross collateralization. But using the techniques on discussed on the REFINANCEING REAL ESTATE INVESTMENT and HOME EQUITY LINE OF CREDIT pages you can use more advanced techniques to buy investment property with no money down.

Remember, what you are aiming for is to have any property you own, investment or otherwise, financed with free standing finance. This is achieved by making use of a line of credit secured against your home initially. As the value of your property investment portfolio increases you can set up more lines of credit to access the available equity you have in your real estate investment portfolio.

See these related related articles in
Wikipedia and EzineArticles for more information

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Cross Collateralization
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Real Estate Investment Property can give you Financial Freedom

2009-11-23T14:14:00.011+11:00

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Financial Freedom Is Within Your Reach With Real Estate Investment Property

Financial freedom can be yours with real estate investment property.
You can have financial freedom, sooner than you think. Here is a quick overview of how to do it.

Start with an evaluation of your current financial position. See this real estate investment finance for an effective strategy to get favourable (lending) results from a bank or other financial institution.

How To Build A Cash Flow Model For Your Real Estate Investment Property

By Joe Tosolt

About To Start Investing In Real Estate?

Are you about to start investing in real estate? Or perhaps you've already put your toe in the water but want to learn more. Here is an overview of the factors you need to take a look at in order to project your potential return on an investment.

Purchase price - obviously, the amount of money you put out for the property is significant in determining your investment outcome.

The annual appreciation rate at which you expect the property's value to increase.

How many years you expect to hold the property. Combined with the 2 figures above, this will enable you to estimate a future selling price.

Number of rental units, and rent you expect to receive from each unit.

Annual rate of rent appreciation.

Expected unoccupancy rate - it's important to remember that tenants come and go, and will occasionally leave you with empty rental units. It's best to plan that into your projection.

Any miscellaneous revenue you anticipate (laundry facilities, etc.), and the rate at which you expect those revenues to grow.

Property management fees. Even if you expect to manage the property yourself, it's best to budget in an allowance for professional property management. First, this rewards you for the time and effort you invest. Second, it ensures that you are covered if for some unanticipated reason you need to turn the management over to a pro at some point in the future.

Last, but not least, you need to know your opportunity cost, something that big investors would call the 'cost of capital'. For example, if you can earn 5% by keeping your money in the bank, you're going to want a lot more than 5% for taking on the risk and time investments required by a rental property!

Annual operating expenses, and the rate at which you expect those expenses to increase over your term of ownership.

Property taxes and rate of annual increase.

Insurance and rate of annual increase. It's critical to insure your substantial investment!

Any miscellaneous expenses, and rate of annual increase.

Depreciation expense. To determine this, you'll need to estimate the building's assessed value as a percent of the total purchase price.

Your annual capital investments in the property. You were planning to budget on capital improvements, weren't you?

Downpayment - how much cash are you putting in upfront?

Bank fees - how many points do you expect to pay, and what closing fees do you expect to incur if you will putting a mortgage on the property?

What mortgage interest rate do you expect? And how long will the payback period be?

Now that you've got all the numbers laid out in front of you, you 'just' need to build a financial model which will allow you to project cash flow throughout your ownership term, and then use time value of money calculations to create a present value of those flows. Compare the present value of your future cash receipts against the amount of cash you will outlay upfront. If it's greater, congratulations- you have positive Net Present Value, and this property looks attractive. If the result is negative, it's a red flag-- you need to take another look, because this may not be a good deal for you.

The obvious comment you might have is... "This all sounds awful hard! Aren't there tools which can help me?"

The good news is that there are! In fact you can use an online investment property calculator which will do all of the heavy calculating for you. You simply plug in the numbers, and review the results. Now THAT's some smart investing!

Here's some great news: thorough financial analysis doesn’t need to cost a lot of money or take up much of your time. The Real Estate Genius investment property calculator runs the numbers and calculates the cash flow instantly– you just gather the facts, and plug in your assumptions.

Joe Tosolt is the president of Real Estate Genius, LLC, which empowers property investors with fast, powerful tools for performing discount cash flow analysis and projecting financial returns on prospective property investments. Learn more about this easy-to-use tool at Real Estate Genius.

Article Source: http://EzineArticles.com/?expert=Joe_Tosolt
http://EzineArticles.com/?How-To-Build-A-Cash-Flow-Model-For-Your-Real-Estate-Investment-Property&id=510360

Make Money Flipping Property

2009-11-17T17:50:00.016+11:00

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Make Money Flipping Property

Would You Like to Make Money Flipping property?

Many beginning real estate investors get started by flipping real estate to make quick cash.

If you would like to make more money by investing in real estate, you need to know a few essentials.

A Simple Definition of Flipping: Buying property and reselling quickly, hopefully for a large profit. Usually, people think of flipping houses, or the buying and selling of a home fast, as the only way to make money flipping real estate. However, some investors specialize in other types of real estate such as land or strip centers.

Some confusion arises over the process of making money flipping property.

People who specialize in finding bargain real estate, obtain a purchase contract, and then sell the contract before taking title to the property are known as Bird Dogs.

These beginning real estate investors get started with no money down by:

Finding a seller under stress with a bargain property
Securing a sales contract
Selling their contract for roughly $500 to $5,000 to a seasoned real estate investor

Isn't real estate flipping illegal?

Flipping real estate isn't illegal. However, many unscrupulous investors committed mortgage fraud to make fast money.

Some of these investors, working with mortgage brokers and appraisers, resold houses to unqualified buyers inflating the property value and home buyer's qualifications. Often these home purchasers had no money or little money down.

When these new home owners defaulted on the mortgage payment, the mortgage lenders lost money because the house wasn't worth the inflated purchase price.

To avoid legal problems in real estate flipping, don't commit mortgage fraud.

To Make Money Real Estate Flipping

Prepare your financing so you can close on a deal quickly.
Learn your market so you know what makes a good deal.
Find a bargain property owned by a seller under stress to sell.
Secure a purchase contract in your favor.
During escrow, plan your selling actions.
Close on the property on time.
Immediately set your selling plan into action. If the property needs fixing, be prepared to get this done right away.
Market your property to your target market. Don't just list the property and hope for the best.
Find a qualified buyer. Have a loan officer check to make sure your buyer meets all the mortgage requirements.
Stay legal. Don't use an inflated appraisal. Don't help your buyer create false W2s, write phony credit letters, or prepare any false documents. You can pay many of your buyer's closing costs to make the purchase easier.

Buy low, sell for full-market value, avoid mortgage fraud, and enjoy your profits!

You can make money Flipping property.

Buy low, sell for full-market value, avoid mortgage fraud, and enjoy your profits! See the article on
Equity Discount Property Investing -- to discover how you can increase your net worth by $20,000 to $100,000 on every deal that you do.

About the author: Jeanette J. Fisher

Jeanette teaches beginning real estate investors how to find, finance, fix, and sell houses for top dollar.

To find out how to make more money using interior design and get a free ebook on Flipping Houses, see: www.doghousetodollhousefordollars.com.

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Succeed Financially by Using Credit Wisely

2009-11-16T14:58:00.000+11:00

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No Debt Is Good: Aiming For A Debt-Free Life

Did you know that you're being deceived? Right now, everywhere. On TV. In the newspaper. On the radio. In magazines. You're getting the same message over and over again: "buy now, pay later"; "consolidate your debt into one easy monthly payment"; "get a secure line of credit". Or the perennial favorite, "don't worry, it's good debt".

The truth is, there is no such thing as good debt. Debt is debt. It's money you owe someone, money that needs to be paid back at some point in the future. "Good debt" is a misnomer. There's better debt, sure, because there's also really bad debt. But debt is never good. Not really.

We Live In A Debt-Ridden Society

We're encouraged to buy things on credit all the time. Why? Because it's a profitable business for lenders. They're not doing it out of the goodness of their hearts. They're in it to make money, and their target is you.

Of course, it's hard to live entirely without debt. To buy a home these days you almost always need some kind of mortgage, this is true -- few people can afford a house outright, especially at the beginning of their careers and families. But you don't have to be in debt for the rest of your life. A mortgage is meant to be a temporary debt, one backed by the (normally) stable value of the property you purchased with it. It should be for a reasonable, affordable amount that can be paid back within 10 to 20 years of the purchase. And you should have some of your own equity in the house right from the start. But that's not what people do anymore. They get mortgages for 100% of the appraised value of the house. Worse yet, they get interest-only mortgages that leave the principal -- the amount you borrowed -- untouched. Is it no wonder that these people eventually find themselves drowning in debt?

It Goes Beyond Mortgages

But it goes beyond mortgages. A debt mentality pervades our society. Once you have equity in your home, for example, the banks urge you to "free up" the money with home equity loans and secured credit lines. Use the money to better your life, they say, by renovating the house, taking that big vacation you've always wanted, or -- here it comes -- consolidating your other debt.

Your Other Debt?

Your other debt? Sure. You think the only debt people have is mortgage debt? No, they have plenty of other debt. It's a banker's wet dream out there today... Credit lines. Cash advances. Overdraft coverage. Automatic credit card limit increases. Pay nothing now. If you're not careful, you can build up a lot of debt very quickly.

That's The Problem

And that's the problem: those debts have to be repaid sometime. Rack up too much debt and soon you'll be worrying about the monthly payments. Your peace of mind will suffer, and possibly other things like your marriage and your job. Is that the kind of price you're willing to pay in order to have things you couldn't otherwise afford?

The Solution

The solution isn't debt relief or debt consolidation. It's debt avoidance. You should do everything in your power to avoid debt. Because too much debt will tear you down, physically and mentally.

What if you already have a lot of debt? There are things you can do. Yes, you can consider consolidating the debt, but that will only work if you're able to stop accumulating more debt once your current payments are lowered. Otherwise, you need to attack your debt using a step-by-step plan that involves paying off the highest-interest debt as quickly as possible, then using the money you free from that debt payment to pay the next-highest debt, and so on. It's the snowball debt reduction method, and it works.

The key to all of this is willpower. Make the commitment today to be debt free as soon as possible. The peace of mind it gives you will make it all worthwhile in the end.

Eric Giguere is a proponent of debt-free living. Visit NoDebtIsGood.com for more debt avoidance tips and resources.

Article Directory: EzineArticles

Property Investing Success Begins With Your Your Attitude

2009-11-11T14:23:00.007+11:00

Property Investing Success Begins With Your Your Attitude

To Your Success

Your property investing success starts with your attitude to your investments. Look at each piece of real-estate you buy as a long term investment & it will turn into a new stream of income and work for you all the time making you wealthy.

Starting with the real estate financing and property refinancing techniques that I have discovered and will talk to you about and continuing with the real estate selection methods and property criteria that I have used to become financially independent along with all the other techniques I will cover here, you will see that successful real estate investing does not depend on picking the lows and highs of the real estate market but rather it depends on your basic attitude.

People who have become rich by investing in property all have the basic belief that selectively investing in property is the best investment they can make and the best long term use of their money.

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To Use this Easy Business Plan
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What Are The Top 3 Real Estate Investing Strategies?

2009-11-11T06:08:00.013+11:00

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Real Estate Investment Methods

What Are The Top 3 Real Estate Investing Strategies?

By Eric Mabo

There is a lot of information out there about real estate investing strategies. This information can be sometimes confusing, because it is never really clear what the best investment strategies are. This article focuses more on the best strategies that will work in the current real estate market. This is a biased market skewed more towards buyers. There are many homes for sale out there, however, they have very few people currently looking for a home to buy. Therefore, every investor in the market today needs to use those strategies that are most likely going to succeed in this market. He or she needs to focus more on strategies that are most likely to attract buyers or renters to their properties. Here are the 3 best options.

Buying for long-term hold: this involves buying a property with the intention of renting it out for several years prior to selling the property. They real estate investor in the situation looks for homes that have been deeply discounted, buys these homes, and then turns around and rents them out with positive cash flow. Their goal here is to make at least $200 a month after paying all of the expenses, which include the mortgage payment on the home, taxes, insurance and any other expenses related to maintaining the property. The advantage of using this strategy is that the tenants end up paying down the mortgage for the landlord. The home builds equity with time and is eventually owned free and clear by the landlord after several years of renting the property. The key here is to buy the property at a discounted price and rent it out with positive cash flow.

Buying for short-term flip: this involves buying a property at a great discount with the intention of selling it right away for a quick profit. The investor here buys the property with at least a 30% equity. He or she then turns around and sells the property to another investor leaving a 10 to 20% equity for the new owner. This is called wholesaling. (See Flipping the Contract or Wholesale Real Estate Investing) This strategy used to be very popular a few years ago. It is still being used today but it's not as popular as before. The key here is to buy the property only after you have already located a buyer. The best way to do this is to build an e-mail list of potential buyers. Another option is to borrow a list from someone else. Here is the step-by-step process: you build an e-mail list or you locate the list owner, now you locate a property with significant equity, you collect details about the property and send out an e-mail to your list, you now close on the deal and then turn around and sell it to the end buyer for a profit.

Using the lease purchase as an exit strategy: in this situation, you are buying a property with the intention of renting it out for one or two years prior to selling it. The first step here is to buy a property at a discount. You then locate a buy/renter who signs two agreements: the first is a lease agreement for 1-2 years, the second agreement is an option agreement. The buyer has the option to actually close on the deal within one or two we years. The investor cashes out at the end of the option agreement. The advantage of using this strategy is that you get very good tenants who actually take care of the property while paying a higher than usual rent. Thus you get positive cash flow and you serve the property at a huge profit within one to two years. The Investor also gets a good downpayment for the option agreement. So you make money up-front, during the 1-2 year lease term, and finally cash out a huge profit ($25-50K on a home selling for less than $200K). This is one of the best investing strategies in the current market.

Eric Mabo is an an Atlanta-based Discounted Foreclosures Expert. He helps people find discounted real estate deals.

http://www.AtlantaforeclosureDeals.com

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Wholesale Real Estate Investing - Deals That Can SkyRocket Your Net Worth 10-Fold

2009-11-10T16:25:00.008+11:00

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Wholesale Real Estate Investing

Deals That SkyRocket Your Net Worth 10-Fold

Alain Diza

So what is wholesale real estate investing? Why should you be interested in learning about it?

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).


          Property Value:  $250,000
            Less
          Purchase Price:  $160,000
          Repairs:           $2,500
            Leaves
         Available Equity:  $87,500

: 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!

Wholesale Real Estate Investing

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.

Finding Deals Like This

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

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.
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.
Watch your email-inbox. Why? Because if and when you choose to enroll 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: Alain Diza

Alain makes it easy to step into the world of Wholesale Real Estate Investing. Learn the principles and private strategies the 'gurus' are charging thousands for.

Get your free e-course at: www.tm-RealEstateInvesting.com

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How To Value Investment Real Estate Using Gross Rent Multiplier & Cap Rate

2009-11-10T15:04:00.001+11:00

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How To Value Investment Real Estate

Using Gross Rent Multiplier & Cap Rate

By Bryce Beattie

There seems to be a lot of confusion about how much investment real estate is really worth. Let’s talk about three common ways people figure the worth of their property. Utilizing the Gross Rent Multiplier and Cap Rate are two ways in which property values can be determined.

Pick a Price

This is how most home owners establish a price when the are ready to sell. They simply pick a price based on what they want. Sometimes, they use other area sales as a guide, but mostly it boils down to the fact that they want $200,000 for it and so that’s what they’re asking. If someone else is willing to pay the price, that’s what it’s worth. Factors like “it’s cute” and “it’s so close to the junior high” play a big part.

Inexperienced investors and agents that primarily deal with single family residential properties usually treat apartment buildings, office space, and any other investment-type property in the same way. They just pull a price out of thin air, or say “Well, that ten unit building across town sold for that much, so this one should be worth that much, too.”

This is a dangerous proposition, as these prices are not based on how well the property operates. If you buy into an investment whose price is pulled out of thin air, you are almost always going to end up in a world of hurt. Never invest because you "fall in love" with how cute a property is. Sure, buy a house that way, but never invest that way.

Gross Rent Multiplier

Many times, the price of investment property is based on the gross income times some number. That “some number” is called the gross rent multiplier.

For example, if a seller can get some comps from similar type properties that were recently sold, they can see what those properties sold for. If they can identify how much money the properties were taking in, the seller can take the average and say, “In this area, comparable properties are selling for 3 times their yearly gross income.” That produces a gross rent multiplier of 3. They then take that multiplier and say, “My property takes in $500,000 per year, so it must be worth 1.5 million.”

This is better than just picking a price, but it is still flawed. You see, it doesn’t take into account all of the necessary operating information, notably expenses.

Cap rates

Cap rates are a third (and even better) way to figure the value. They take into account the actual operation of the property. A cap rate is based on the net operating income (NOI) of a property. The NOI is the property income minus expenses, and you don’t count mortgage payments as an expense.

The formula for finding the cap rate is simple:

Net Operating Income / Value = Cap rate

Example:
Let’s say that a property has a net income of $50,000 a year, and it is sold for $700,000.

50,000 / 700,000 = .0714…

.0714 = 7%

So that property was sold with a 7% cap rate.

If you figure out the cap rates for several properties in your area, you can figure out the average cap rate, and use it as a guide when you are looking to buy.

Once you have established a market cap rate, you can figure what the current market value of a property should be. The formula is simple.

Property Value = NOI / Cap Rate

Example:
The average cap rate in your area is 8%, you have an apartment complex that has a net operating income of $43,200.

What can you estimate the market value of your property to be?

43,000 (value) / .08 (cap rate) = $537,500

That of course doesn’t guarantee that you can actually get that much (or pay that little), but it it does show what your property would sell for if it followed you current market trends.

So go practice figuring cap rates and prices. It’s how the real investor figures things.

Bryce Beattie is a real estate investor and the webmaster at http://www.middleclassmillionaires.com

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Using Cap Rates For Valuation Can Be Misleading

2009-11-10T12:29:00.000+11:00

Using Cap Rates For Valuation Can Be Misleading

By Karen Hanover

In a commercial real estate (CRE) discussion you will likely hear the term Capitalization Rate (Cap Rate). You will see that buyers, sellers and lenders use this term to determine the value of a property. You need to know that making an investment decision solely on Cap Rate can mislead you into making a bad investment.

Cap Rate can be considered the percentage return earned on your real estate investment during the first year of operations. It is calculated by dividing the first year Net Operating Income (NOI) by the value of the real estate which is usually expressed as the price of the property. If you're not sure what NOI means, please refer to my previous article "Determining the Value of Commercial Property."

Net Operating Income / Value of Property = Cap Rate

Cap Rate considers the first year NOI in a property. In the same property, the higher the Cap Rate, the greater the NOI from the property will be relative to the price of the property. Think about that for a second. The greater the NOI a property produces, the less money you need for a down payment. This is because lenders base their lending decisions by looking at the NOI a property produces because it is from the NOI that the debt service is paid.

In other words, when a property produces $100,000 of NOI, if the price for that property is $1,000,000, based on a 10% Cap Rate, your payment will be lower than if you had paid $2,000,000 for that property, based on a 5% Cap Rate, right? Absolutely. The payment on $1,000,000 of debt will be less than on $2,000,000. Here, NOI is the same, but the payment will differ based on price. So, for simplicity, the higher the Cap Rate, the greater the cash flows.

Cap Rates can be used as a cursory evaluation of a commercial property. Experienced investors often look at the cap rate to screen properties with low NOI relative to the price, as those properties may not produce enough cash flow to make the mortgage payment. Sellers will quote Cap Rates differently and investors must determine which type of Cap Rate is being advertised by the seller.

There is the actual Cap Rate which is based on the current NOI of the property. That means that the Cap Rate is based on actual NOI the property is currently producing and assumes that no changes to that number will occur.

Sellers will sometimes quote pro-forma or potential Cap Rate to reflect what the purchaser will receive during their first year of operations after certain changes have been made (like increased occupancy for instance). What this means is that after purchase, with certain changes made (increase in rents or decrease in expenses) the property could potentially yield a greater NOI. When the seller has quoted a pro-forma or potential Cap Rate and it is on that potential NOI that price is being determined. DON"T EVER BUY ON PROFORMA CAP RATE!

You wouldn't buy a junker car that's all beat up because after you put money into it to fix it up it will be worth more. Of course not! You would pay for the car in the condition it's in and if you fix it up and can sell it for more, you receive those profits. The same is true in real estate. If the property is only 70% occupied and therefore the income is low, you value it based on that income at 70% occupancy (again see the above referenced article for greater explanation on valuing property).

Let's say that a property could potentially generate $100,000 NOI with zero vacancy (100% leased). If the asking price is $1,000,000 for those cash flows (NOI) then the Cap Rate or return is 10%. On the other hand, let's assume that the property is actually only 80% leased and therefore only generating $80,000 NOI. If the asking price is still the same $1,000,000 for these lesser cash flows (NOI), the Cap Rate or return is only 8%.

The debt service on the $1,000,000 is the same in both examples, but the amount of NOI from which to pay that debt is less in the second example. Again, the higher the cap rate, the greater the cash flow. The greater the cash flow, the more likely the lender will make the loan.

Let's look at it another way: A property is listed for $1,000,000 and is currently 80% leased and generates $80,000 NOI. Rents are $120,000 and expenses are $40,000. Assume that the pro forma income is $100,000 per year when it's 100% leased at current rental rates and that, if rents are increased, the NOI could be $140,000. The seller could display three different Cap Rates for the same property: 1. The seller could use NOI of $80,000 per year making the Cap Rate 8%. This is the correct way to calculate the current Cap Rate. 2. The seller could use NOI of $100 and advertise a 10% Cap Rate. . 3. The sellers could use the pro forma NOI of $140,000 and advertise a Cap Rate of 14%. Although this takes NOI into consideration, it is not actual NOI but potential NOI.

As an investor, you must know which Cap Rate the seller is quoting. The returns of a CRE property come from: appreciation, cash flow, depreciation (tax write-offs), and principal reduction and the use of leverage. Despite all of this analysis of cash flow, often, the biggest chunk of your investment return comes from appreciation. This is in addition to positive cash flows! That's what makes commercial real estate so attractive.

Often properties with the greatest potential for strong appreciation are newer or in good locations and are offered at lower Cap Rates. In other words, they are priced higher. On the other hand, properties that are in poor condition, or have ground leases, are much harder to sell. As a result, a seller may try to attract buyers by advertising a higher Cap Rate. Buyer beware!

The calculation of Cap Rate only considers the first year of NOI. It considers the year after purchase and either bases it on actual or pro-forma NOI. But what if you own the property for longer than 1 year? The Cap Rate doesn't account for multiple year holdings and cash flows and you will therefore want to look at other metrics including cash on cash return and internal rate of return. Again, my article on Determining the Value of Commercial Real Estate touches upon these metrics and their usefulness in insuring a profitable and wealth building investment.

The Cap Rate should not be the only factor considered to determine whether to buy and how much to pay for a property but it is a good way to quickly weed out investments not meeting the investor's criteria or to quickly qualify investments that warrant further analysis.

Take a FREE Online Course! http://www.cieinst.com

Karen Hanover is well known as a Certified Commercial Real Estate Advisor, President of the National Apartment Investors Association, Chairman of the National Commercial Real Estate Advisory Board and Senior Instructor for both the Self Storage Education Institute and the Apartments Education Institute.

As a CCIM Candidate, a highly prestigious designation, often called the "Ph.D. of commercial real estate" Karen works as a busy commercial real estate agent with Marcus and Millichap one of the nation's largest and most highly regarded commercial brokerage firms.

Sought by industry insiders for their toughest deals, Karen has helped thousands to create wealth in commercial real estate with less risk even in today's uncertain economy.

Karen founded the Commercial Investment Education Institute which provides educational instruction for investors on multiple subjects including apartments, self storage, office buildings, retail centers, mobile home parks and more. Her courses are taught in a friendly and easy to understand manner.

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STRATEGY 1: MAKE A PLAN

STRATEGY 2 - GET A MENTOR

STRATEGY 3 - FIND A REALLY GOOD PROPERTY INVESTING NETWORK

STRATEGY 4 - DO NOT LISTEN TO NEGATIVE FRIENDS AND FAMILY

STRATEGY 5 - DO YOUR HOMEWORK

STRATEGY 6 - ENSURE YOUR REAL ESTATE INVESTING STRATEGY IS DONE FROM THE HEAD AND NOT THE HEART.

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