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Six Rules When Buying an Investment Property

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By Mark A Walker

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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.

1. Use Your Expertise and Knowledge

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.

2. Study Your Options

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.

3. Consider the Benefits of the Location

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.

4. Reflect on Rental Demand

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.

5. Buy Property for Less than the Current Value

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.

6. Gather Financial Support

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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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 ...

Go from this page Real Estate Investment Financing To the Freedom Steps With Property Investing

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Make Money Flipping Property

Copyright © Jeanette J. Fisher

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

1. Prepare your financing so you can close on a deal quickly.
   
2. Learn your market so you know what makes a good deal.
   
3. Find a bargain property owned by a seller under stress to sell.
   
4. Secure a purchase contract in your favor.
   
5. During escrow, plan your selling actions.
   
6. Close on the property on time.
   
7. Immediately set your selling plan into action. If the property needs fixing, be prepared to get this done right away.
   
8. Market your property to your target market. Don't just list the property and hope for the best.
   
9. Find a qualified buyer. Have a loan officer check to make sure your buyer meets all the mortgage requirements.
   
10. 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.

Return from Make Money Flippiong Property To Flipping Real Estate Or to Freedom Steps With Property Investing

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

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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

So here's a hypothetical question for you: Assuming that the information above is accurate, and the property is located in an area that you view as acceptable and/or favorable, then: If I offered to give you this deal in exchange for $10,000 in cash, would you do it? Remember - this is hypothetical. The real question here is this: Would you exchange $10,000 in cash for $87,500 in equity? For most savvy investors, the answer is: Absolutely YES!

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:

1. Visit the local real estate investing club in your area. Almost all of these clubs have networking opportunities to work with other investors who wholesale deals regularly, and this is an easy way to find great opportunities.
2. Watch for ads in the newspaper, television, and in other media that advertise slogans like, "We Buy Houses", or "Sell Your House in 9 Days" or anything similar to that. Most of the time, these people are real estate investors, and they are happy to wholesale deals to people like you.
3. Watch your email-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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Return From Wholesale Real Estate Investing To Flipping Real Estate  Or go to Freedom Steps With Property Investing

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Related Pages

Home Page

Flipping Real Estate | Make Money Flipping Property | Flipping the Contract | 7 Tips for Flipping Real Estate | Calculating Costs & Profits when Flipping Real Estate | The Risks Involved in Flipping Real Estate | Wholesale Real Estate Investing | The End Of The Real Estate Bubble - Is It As Bad As They Say?

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A Property Investing Business Plan

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Use this Business Plan to
Keep You Focussed on
Your End Goal

The Big Picture

The end state you want is to be able to retire wealthy with your wealth guaranteed to continue to grow.

This business plan will help you progressively increase your net worth to the point where you can retire.

The best part is that this process can take as little as seven years.

This plan presents an attitude of optimism. Your future is assured as you progress through the various stages of building your property investment business.

Business Plan for Property Investors

Your starting position right now may vary slightly in detail, but the execution of the plan does not change greatly. :You may be a home owner right now or currently renting where you are living. It doesn't matter.

What matters most to your success is your attitude right now!

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Stop looking at yourself as a person who works for a living. I want you to start seeing yourself as a person who has a property investing business. I will show you how to acheive this!

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Home Owners With Equity

For home owners with equity the steps are as follows:

• Set a goal
• Do initial financial research
• Do property search
• Select target property
• Finalise financing
• Finalise Purchase
• Find a tenant
• Start collecting the rent
• Manage the property
• Move on to next property

All of these steps are expanded on in the sections below. For now the important thing is to start changing your focus from a worker to an investor, in particular a property investor.

If you Don't Have Equity

If you don't have equity the steps are very similar to those listed above. The difference is in a small variation in how you finance the property.

You can read more about it on this page:
Financing your very first property starting from nothing

And remember you only have to do this for the first property or so. After that you will have some equity on your side.

Return From Business Plan for Property Investors To Freedom Steps With Property Investing

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