Archive for April, 2011
April 28th, 2011 -- Posted in Apartment |
Apartment investments provide low risk compared to residential investing. A $250,000 home can rent up to $2500 a month. While a $250,000 10 unit apartment building at $500 per unit can rent for $5000 a month. If your tenant moves out of your home, all cash flow is immediately gone until new tenant is found. It would take all of your tenants to move out of your Apartment Building. Short-term leases allow the potential for increasing income as the market rises. Apartment investing may produce both cash flow and equity appreciation returns. In many areas single-family home prices are often beyond affordability for a majority of the population, which make apartments a permanent necessity.
How much cash/equity is required to get started?
The average down payment required for investing in apartment buildings is anywhere from 0%-30% of the purchase price of the building depending on your knowledge. The lower the amount of your money you invest in an apartment can change the risk associated with an investment and explode your returns on the investment. There are tricks of the trade on how to buy apartments without using any of your money or credit.
How do I qualify for a loan for the balance of the purchase price?
The building qualifies for the loan; it has nothing to do with your personal credit, employment, or financial statement. You just provide additional security to the lender. Most lenders for apartment buildings require you to personally guarantee the loan; however, they won’t issue the loan unless the building generates sufficient cash flow and provides a margin for error. Lenders have a lot to say about how much cash is invested in an apartment offering.
How do you manage the investment?
It is not recommended that you manage any property, however, there are some people who prefer to manage their properties themselves while others feel their time is more productive elsewhere and turn the management of the property over to a professional. A basic rule of thumb is that any building with 20 or more units will support the cost of professional management and a live-in manager. A 10 to 20 unit building will usually support a live-in manager only who will perform routine maintenance tasks, leasing, and banking. So, the larger the building the more management you can afford. Professional management companies are plentiful and there are ways for you to find the right one for your property and screen out the bad ones.
How do you analyze a possible investment?
This part can be very complex to a beginning investor or someone who has never invested in apartment buildings. This detailed analysis, is commonly referred to as the “due diligence”. Main factors will include at least the following: gross rental income, vacancy loss, operating expenses, debt service, and cash flow. The object of the detailed analysis is to get the understanding of the likely performance of the investment and to identify areas of concern.
You can replace your income with one deal – Financial Freedom
Apartments are the fastest way to leaving your (J.O.B.) ‘Just Over Broke’. It is one of the only businesses that you are literally one deal away from retirement and the fastest way to build wealth than any other real estate business out there. Commercial real estate investors play by a different set of rules slanted in their favor and designed to make them rich.
April 25th, 2011 -- Posted in Apartment |
Wow! Some real estate agents pay $300.00-$400.00 per month for leads.
Is there a cheaper, yet equally effective way to get leads to grow your business?
Absolutely, but how do you find them?
Below are three simple, but proven real estate marketing tools and strategies that’ll get you securing more leads than you’ll be able to handle. In fact, you could end up with so many you’ll start your own “Team Dynamo”.
Build A List
The name of the real estate marketing game nowadays is capturing the names and email addresses of everybody you meet to develop your own list of responsive buyers and sellers.
Why? Because with email addresses you can market to folk on your mailing list until the cows come home…and for a little of nothing.
Regular postage is .41 cents a letter, sending the same letter via email is free. If you mail 500 letters it would cost $205.00 in postage, plus the cost of printing, paper and envelopes. You could easily be out of $225.00 – $250.00 for so for just one mailing.
Now, contrast that with emailing the same list of folk; no postage, paper or envelopes required.
Total cost? Nothing.
Hopefully the point is understood. While there are certainly times and places for direct mail campaigns, so too are there for email marketing campaigns.
But list building is a slow process and typically doesn’t result in quick sales. Instead, know that as you acquire names over a period of months, then years, you’ll have long term prospects who’ll come to trust you and your opinions and seek you out when they’re ready to make real estate transactions.
Real Estate Marketing Reports
The buzz on the internet is all about content marketing. The premise is that internet surfers are looking for information, and are not necessarily looking for you and/or otherwise interested in what you have to sell.
Instead, they are wanting and seeking information to help guide them in their quests to buy and sell real estate. No wonder the most successful lead generating web sites are those that offer an abundance and diversity of information.
There’s an old saying that goes “he who gives shall receive” and it is as true today as ever.
Agents who give away information, like information found in pre-written real estate marketing reports, are rewarded by prospects eagerly exchanging their email addresses for the information contained in the reports.
And the outcome? Prospects will continue to come back to you again and again until they’re ready to buy or sell real estate. And guess who’ll be there ready and able to help them?
Multiple Streams of Leads
Perhaps the best advice I can give anybody is this; do not put all of your leads in one basket. Instead, diversify your lead generating strategies for more listings and sales.
Leads and listings can be gotten via nearly every way imaginable, including but not limited to direct mail campaigns, real estate marketing flyers, post card marketing, networking, buyer and seller seminars, fsbos, etc.
While each approach offers its unique advantages and disadvantages they all work.
Conclusion
There you have it, three real estate marketing tools and strategies that can push your marketing success to new heights.
April 23rd, 2011 -- Posted in Real Estate |
Here in the United States, “fair market value” on any item is determined by what a buyer is willing to pay a seller for the item. Simply put, if I have a stick of gum, and I offer it to you for ten cents, and you want to purchase it for ten cents, then the fair market value of the stick of gum is ten cents.
While real estate also has a fair market value, it is a bit harder to determine because of all the factors which go into the valuation. A property, unlike the simple stick of gum in the above example, has multiple aspects for a seller and buyer to put different valuations on. Introduce a lender into the picture, and then you have a third option on valuation to deal with as well.
Determining commercial property market value is different than determining market value for a residential property. In a residential valuation you can simply look at other recent comparable sales in the area, of similar homes and lot sizes, and determine about what a property is worth at any given time. The issue you will find with commercial property is that they tend to be one-of-a-kind properties, and you may not be able to find many local comparable sales in recent times.
One major difference between residential and commercial properties is their location and their use. If you own a large lot inside of the city limits, with a huge warehouse store built on it, with a 10 year lease to a big box store, then you have a very valuable property. If you have the same lot size, with the same store on it, same lease, but it is located 30 miles from the only local town where most people in the area live, then you have a lesser valued property. Location, also known as market area, is more important in commercial real estate because businesses need to be near to their workers and to their customers as well.
Another consideration when looking at market value of a commercial property is the availability of similar properties on the market. By looking at as many properties as possible, you can start to get an idea of what different properties are selling for in your local area. This gives you some leverage to point out differences and better negotiate the price you are willing to pay. This will also give you some idea of how difficult it will be to find a tenant for your property.
If you are tying to determine the market value of a piece of commercial real estate, one of the factors you should always consider is how well other properties in the area are renting and what they are renting for. You will need the rental income to cover your investment funding as well as your day to day costs of owning the property. If you purchase a property at an agreed upon price, will the rents support the costs? What if your property sits vacant for a month or two? These are things you need to think about prior to purchase.
When trying to determine commercial property market value there are many factors which come into play. The biggest being the market area, local property costs, rental income potential, and the property condition itself. By determining what you are willing to pay for a property, and having a professional commercial real estate market analysis completed for you, you can avoid many of the mistakes new commercial property investors make.
April 21st, 2011 -- Posted in Buying Real Estate |
If you are planning to buy a house then a homebuyer checklist can be of great help to you. It will help you organize everything and remember even the smallest detail. There are few things that you need to consider when you are creating a homebuyer checklist:
. You should always arrange for finance before you start looking for a house. Get in contact with the loan officer or your bank before you see a real estate agent. This is necessary to know whether you qualify for mortgage or not and what amount you will need to close. Once you are done with this, get to know the price range under which you can shop. Check your credit report and if it does not seem very good take the necessary actions to improve your credit scores. It is also essential to gather your pay stubs, bank statements, w-2 forms and tax return papers for the last few months and prepare a pre-approval letter that can be submitted with the offer you make to any financial institution.
. The next step you need to take is to know about the location where you want to buy your house and its projected economic outlook. Choose some areas where you would like to focus and make a list of the important factors you need to look into in a neighborhood or town. You can easily investigate about a town on the Internet or go through the local online newspapers for more information. You can shop around and compare the features, price, houses and demographics in a particular location so that you get the best deal.
. To cover your interest, do not forget to purchase an Owners Title Policy. Although you will need a title policy for your mortgage lender, this will just cover the amount of loan. The cost of the policy is not only less, but it will also protect your equity.
. You need to know the boundaries of your property. This means that you will have to conduct a survey so that you get an idea of what you are buying.
. If you want to seek legal advice on some matters, you can always get in touch with an attorney because most of the real estate agents can help you regarding local trends and not legal issues.
. The most important thing you need to do is to read the conditions, covenants and restrictions mentioned in the subdivision (CC&R). You should know about your legal rights and associated fees when you purchase a condominium.
. Never forget to do a walk through finally before you make down payment and put your signature on the closing documents. All the contracts should be checked twice and ensure that the documents for mortgage match with the charges and interest rates that have been promised to you.
. You need to ensure that the seller moves out of the property in time. Once the person receives the money and there is a change in the ownership of the house, you will have no leverage if the seller does not leave or damages something.
April 18th, 2011 -- Posted in Real Estate Investment |
Real estate leads generation is serious business. Just how serious? Well, if you get it right you can have a successful and rewarding career in real estate sales and investments. Get it wrong and you could be facing yet another career change.
It begs the question. “what is the best way to generate leads?” Well, the truth of the matter is that there is no one right way.
Possible ways to generate leads include farming expired listings, real estate leads generation through email marketing, newsletters, direct mail campaigns, networking and on and on.
There really is no limit to the many ways you can generate leads, both buyers and sellers, and convert them to paying customers.
Lets take a closer look at three of these lead generating strategies.
Real Estate Lead Generation via Expired Listings.
If you’re looking for a cost effective way to generate leads you should consider farming expired listings.
Why? Because in many instances owners of expired listings are realtor friendly, are easy to find and are often very motivated to sell their properties after having had at least one listing period where their properties didn’t sell.
That’s where you come in. With a good expired listing system you stand as good a chance as anybody else getting the property relisted. Sometimes just having a good expired listing letter is all you’ll need to convert expireds to new listings.
Personally, I think expireds are one of the worst kept secrets in the business. Most agents know about them, but few pursue them, and fewer still market them consistently and over long periods of time.
Real Estate Lead Generation via Real Estate Web Site Content.
Imagine this. It’s 3:00 AM and an Internet surfer has just found your web site, stays on it long enough to read 3 or 4 pages then requests via your web subscription a special report on buying a home with low money down. Bam! That’s the power of web site content as a lead generator.
Web sites work around the clock promoting you and the services you provide and the bait that attracts visitors is good content.
If you don’t have time to create your own and devote time to everything else that you need to be doing, and who does, you can use pre-written content. However, a good rule of thumb is to always personalize it to make it uniquely yours.
There’s an abundance of pre-written real estate marketing content on the Internet that is easily found and can be used in a variety of ways. Specifically, it can be used as real estate marketing reports, articles, web site content, etc.
In fact, you may be surprised at the amount and diversity of information you find and the many ways you can use it to generate leads. But above all content offers a way to provide useful information and gain the trust of your readers and site visitors.
Real Estate Lead Generation via List Building.
List building is the most important aspect of any online business, including real estate sales.
And no matter which business model you follow your top priority should be to build a list of prospects to send information to on a regular basis.
One key to your success will be over delivering valuable, useful information. Treat your list members well and you’ll have a pool of candidates that will convert to paying customers at some point in time.
Give them free reports once a month or every other week as an enticement to stay on your list. This will give you a reason to contact them and them in turn a good reason to open your emails when they see them in their inbox because they never know when you may send them another useful piece of information.
Finally, the biggest key to profiting from your lists is to not hard sell them.
Do not bombard them sales pitches and advertising, as it will lead to them unsubscribing faster than you can write your next sales pitch. Instead, gently plug your services and know that they’ll contact you when they’re ready to make a real estate transaction.
There you have it, 3 solid low to no cost Real Estate Leads Generation strategies that are guaranteed to fill up your leads pipeling – starting today.
April 15th, 2011 -- Posted in Real Estate |
Many investors are not interested in becoming a landlord; unfortunately, unless they have another stream of income, investing in real estate requires financial support from somewhere. Investors that are not open to becoming a landlord may be losing money.
There are some basic guidelines to be an effective and profitable landlord. You have to have the right tenant, collect and maintain deposits, inspect the property, collect rents, and possibly evict tenants. We will cover some of the basics you need in order to be an effective landlord.
Choosing tenants is probably the single most important thing that you can do to save yourself both time and money. Your single most responsibility is your property use and the maintenance. While it is illegal to discriminate against any applicant, this is still your property and you have the right to pick who you want to live there. Renting to the first applicant through the door may not be the best idea; prospective tenants look will hunt for the right property and you should for the right tenant.
You need to have a completely filled out “Applications for Rental”, you can get these at your local office supply store or you can have your attorney draft one for you. At a minimum, make sure that an attorney reviews the paperwork to be sure your property and you personally are protected.
Perform a background check on all potential applicants. Call their employer, contact previous landlord; this may be the most important step. Verify credit references, if necessary, you can even do a full background check on someone using a number of different websites available today. Remember, do not cut corners here, this could cost you a great deal of money and time.
Posting a “For Rent” sign and running ads in the newspaper are not a very good way to attract trustworthy tenants. If this is what you use to find tenants then make sure that, you properly screen them. Finding a family friend or acquaintance is usually the best avenue to finding the “perfect tenant”; offer them an incentive to find you a good, solid tenant.
To avoid a lot of “tire kickers” when posting ads in the newspaper, be sure to include accurate descriptions, rent amount, any deposit requirements, and restrictions you maintain, such as kids, pets, total occupants allowed. Without this information, you are opening your phone to a long list of people that are “just looking”.
Assure all applicants that full consideration will be given to them, however do not be too eager to get a tenant in the property. Finding the tenant, one that meets your requirements is the best approach to being an effective landlord.
Start with the right tenants to effectively mange your properties. You need to make sure that the tenant that you have chosen is a good fit; you can save yourself from a great deal of expense and ultimately have the perfect situation if you are a real estate investor.
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April 14th, 2011 -- Posted in Real Estate |
Whenever you are dealing in real estate, it is always important to do it through a good attorney, to avoid potential problems cropping up later. However, it is also important to read and understand a few basic terms of the contract, before you sign any document. Real estate contracts are between two parties, namely the ‘buyer’ and ‘seller’. And therefore, they are called ‘bi-lateral contracts’. These are some of the essential points, which should be present in any real estate contract.
The first section should have information about the names of both the buyer and the seller. The next section should mention the details of the property including the address, such as the street, area, county or district, state, etc. If a survey of the mentioned property has to be done, then that too should be mentioned and also whether the payment would be made by the buyer or the seller. This section should also mention anything, which could be included or excluded from the property.
The next section should contain the financial details of the contract, i.e. the purchase price of the property and also the details as to how the buyer would be paying for the property. If there are some contingencies regarding finance, then that also has to be mentioned. Appraisals, if any should also be mentioned along with details, as to who would be paying for it. The next section should mention the exact date as to when the buyer will be taking actual possession of the mentioned property. The next section should mention inspections, if any, which could be requested by the buyer such as inspections to detect termites, rats, paint condition or even a full home inspection.
The next section should mention the details, as to how the seller is planning to convey the title of the property to the buyer. If any title policy is to be provided to the buyer by the seller, then the details should be mentioned here. If the buyer wants to conduct a walk through of the property, then that should be mentioned in this next section, provided he gives the seller an advance notice.
Finally, a contract would not be valid, if the parties involved in the contract, namely the buyer and seller of the property, do not sign it. So, the last section should mention the names and signatures of both the parties. Once the contract is signed, then as per the law, both the buyer and seller are bound by the terms mentioned in the contract and action could be taken against any party, which violates the terms of the contract.
Most of the states have standard real estate contract forms. So, except for signing the contract not much is to be studied. Since, most properties might have some or the other individual feature or if the financial terms of the contract are different, then they have to be mentioned specifically in the contract.
So, the above-mentioned are normally the basic requirements of any real estate contract. You could have many additions or alterations to this contract, provided both the parties involved, and their attorneys mutually agree upon it.
April 5th, 2011 -- Posted in Real Estate |
A prosperous real estate investor or retailer works out many others difficulties and that is the way you turn out to be successful in life. The more you gain with the resources that you have, knowledge, contacts, ability and experience, you have a better chance of providing solutions to people and assist them in difficulty. Moreover, you would be one step forward if you have people calling you or coming to you first when in difficulty.
This implies that you must publicize the information that you are capable to be assistance of and at the same time be reasonable, reliable, and precise in making quick choices before the competitors make an attempt to convince your clientele. You need to be aware of marketing. This means that you need to make up your mind on what you would like to specialize in, building up a technique to define your target audience, and then drawing them with a properly framed strategy based on the various mediums available. There are quite a few choices and the list below will give you an idea of what is available.
. Condominiums, holiday homes
. Nuclear family homes
. Apartments meant for one to four families i.e. residential duplex, triplex, etc.
. Commercial sector that includes hotels/motels, narrow shopping centers, office structures, portable residential playgrounds, storage divisions, parking areas, garages, restaurants/diners/cafes, stores, apartments designed for five or more families etc.
. Industrial sector that includes factories, processing plants, manufacturing plants, etc.
. Farming sector as per the zone includes business, manufacturing, or agricultural.
. Land that can be used for making vacation resorts or homes, recreational centers, residential that could be further divided into commercial, industrial, agricultural, and special purposes.
. Special purposes like constructing harbors, churches, golf courses, schools, sports arenas, hospitals, theaters, and power plants etc.
There are a few guidelines that would help you get hold of some good real estate deals.
. Go through notice boards, local newspapers and small autonomous publications. This can be done for each publication you get hold of. Make it a point to get hold of the first copies from the press. Be the first one to know what is going on and do not allow any other person beat you to it.
. What could be better than publicizing all on your own and getting in touch with sellers? Ensure that they give you a call and contact you before they go ahead and make it public by putting up an advertisement.
. Go through the legal segment of the newspapers. Get in touch with beneficiaries and legal representatives, as well as salespersons in the estate sale or garage segments. In addition, 20 percent of people who have garage sales are preparing to shift in a little while. Make inquiries regarding their home or their neighboring houses. At all times keep your eyes and ears open, be alert.
. Your chances of success will increase as you select places that are densely populated.
April 2nd, 2011 -- Posted in Real Estate |
Investing in real estate is one of the best long-term investments available. It is also one of the easiest investments to understand in comparison to mutual funds and stocks. There are so many ways in which real estate can bring money, apart from the initial investment. So if you invest to let the property on rent or to fix it up and sell for a higher price, it is still considered an investment and there are simple ways in which you can earn more from such investments.
A simple way by which you can increase the value of your property is by painting. You can paint the fence and the rest of the exteriors and interiors. A painted house will make a lot of difference to the buyer. An old building with a worn out look will not appeal to anyone. So get a good paint job done, as this will increase not only the value but also the demand for the property. When making the decision to paint you must also decide on the type and color of paint, depending on the use of the property. If the property is for residential use then you should stick to colors that are neutral or warm and inviting. In this way the tenants or buyers feel an instant attraction towards the new home making them more likely to make the purchase. So not only do you get a sale, but also raise the value to make a profit.
Fixing up the windows or the front door is another way by which you can increase the value of real estate. This is because when the prospective customers, either to rent the place or purchase it, have the tendency to look out of the windows. So the nice new windows will add to the value and also complement the property.
If the property is located in an area where the crime rate is high, then it would be wise to install grills on the front door and where necessary. This will distinguish your property from that of others and at the same time show the customers that you are concerned about their safety. But when installing the grills, check with the customers if they want the improvement to the house, unless of course they were already there when you made the purchase. Many may not like the idea, but you can offer to install it.
If the property is in an area where the neighborhood is untidy and unkempt, no matter what improvements you make to your property, the value will increase only marginally. On the other hand if the neighborhood is well maintained and your property is in a slightly bad shape, then yes improvements will raise the stakes here. Before making your purchase, check if the foundation of the building is good. If so, then you can take this property and give it a new look by spending time and effort mowing the lawn and landscaping. This will help you make more money out of your investment.
April 2nd, 2011 -- Posted in Real Estate |
You might have frequently heard of people making fortunes by investing in real estate, but you must have also heard about people losing their shirts playing this game. The real estate market is risky till you master the game. So before entering into the ring, please grasp some knowledge about it. Wise investment in real estate business can lead you towards an upgraded lifestyle. Investing in real estate business is interesting as well as tricky, so think well before you take risk.
In real estate investing you hear terms like bargain, distressed property etc. Distressed property is a property of a distressed seller. A property owner becomes distressed due to job loss, transfer, divorce, pending payments, death, foreclosure and these issues leaves the seller without any finance and thus forces him to sell his property as soon as possible. Understanding the sellers plight, finding a solution is the key to buying such a bargain property. Distressed property can be a doghouse, dump, fixer home etc.
Steps to find a bargain property
. The best way to find such properties is by talking to people in a particular area.
. Try and have a word with your bankers as they have a REO department that handles real estate and then ask your bankers to notify you about the availability of such properties.
. Learn and seek good advice from experienced and successful investors. Discuss with friends and real estate agent for referrals to investors.
. Understand your investment goals, like for example- why you want to buy a home or why do you want to invest or why do you wish to hold on to it till the market prices increases etc.
. Get all your credit reports and scores in place and create an individual file for each credit-reporting agency. Handle and clear all credit issues.
. Go through all real estate investing articles and books and attend workshops and seminars to learn about bargain house investments. Avoid learning out of date information from television.
. Select a good lender, who offers the best service, has a good closing record and fair costs. Arrange all the finances to purchase the property.
. Select your target locations and then learn the market around. Study about the area through real estate newspaper or pick up Home for Sale flyers. While noting down the specifications, please stress on the sales, note prices, amenities and conditions. Follow the HUD sales specified in your area.
. Before you select a real estate agency, interview the options. Do not sign any agreement with those agents who limit their search to bargain property.
. Select agents who are well versed with the local market and those who can provide you with a wider choice.
. If you get a good bargain property dont forget to get your terms and conditions clear from the seller.
People generally like to get away from their problem houses, so you can really click a good deal if you focus. Investing in real estate requires time, as you might need to deal with many issues, good and bad. Real estate investment is a business where hard earned money is involved, so think well before bidding.
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