Investing in real estate some points to consider

When you are first starting out with investing in houses, you should always look for ugly or bad houses that need a lot of work. These homes are much cheaper to purchase, although they will take some work to improve. You should start out by looking for houses that need some work, such as clean up, painting, and in some cases new carpet. You don’t want to buy something too run down, as it could cost a fortune to repair.

If you think of yourself as a handyman and feel that you can do the repairs yourself, you can save a lot of money. On the other hand, if you need to hire someone, you should always make sure that the individual or company that you hire is qualified to do the repairs. If you aren’t comfortable with doing any of the repairs, you should inquire about a subcontractor or company that will do it for a reasonable price, or perhaps a share of the money once you have resold the house.

If the house you are thinking to purchase and resell has any type of structural problems, you should always get an estimate from a reliable contractor before you make the purchase. If you decide to stay in the business, you’ll learn a lot more over the years, although you should always hire a contractor when you first start out. Once you get all of the estimates together, you can make that final decision on how much of an offer you want to put down on the property.

After you have a team together and successfully renovated and resold several homes, you’ll begin to feel quite a bit more confident with buying homes that need repairs. All it takes is time and practice – and you’ll be buying homes that the average investor wouldn’t think twice about. This can be a huge advantage when you are looking for homes to buy and resell, as there will be less competition to worry about. You’ll also be able to get a lower price when buying the home, simply because you can use the cost of the repairs to your advantage.

Once you are able to do repairs on homes, including structural problems, you’ll have a huge advantage in the market. You’ll be able to buy virtually any home, including those that other investors choose to ignore. Doing so can be very profitable for you, especially if the house is in a well known and well desired neighborhood. After you have done the repairs, you can resell the home for a much higher price than you paid to acquire the home.

When you start looking for houses that you can repair and resale, you should always take your time and buy the right homes. You won’t have the money, time, experience, or support to buy the bigger houses at first, which means you won’t have any room for mistakes. Once you have purchased and resold a few smaller homes, you’ll eventually be able to work your way up to the bigger homes – which is where the big profits will come into play.

Always keep in mind that when you first start out, you’ll need to take things slow. You can expect profits to come overnight, as it will take you some time to learn. Once you have been at it a few years and have several houses to your credit, you’ll be ready to tackle anything. At that point – you’ll make a lot of money in a career that is truly exciting.

Is it good time to invest now?

I know many investors are thinking whether we should buy a home or rental property now so that we can sell it for a profit later. Investors like us always buy and sell properties. Here are some tips which is valid for any time of the year.

Closing on a home can be a difficult process for both the buyer and the seller. Both parties are interested in doing what is best for them, but this can often times lead to issues in the long run. After all, something that the buyer wants may conflict with what the seller wants, and vice versa. No matter if you are buying or selling, it is important to keep the needs of the other party in mind. This is not to say that you should harm yourself, but you should try to make things as mutually agreed upon as possible.

During the closing process, things are pretty much the same for the buyer and the seller. Sure, there are some minor changes based on your position, but for the most part you will be working within the same set of standards.

At closing the buyer and seller will meet with their agents. There may be other parties present as well. Generally speaking, the buyer is the one who will do the most work. Of course, the buyer usually spends the most money at this time as well.

The nice thing about closing is that the buyer and seller can follow the lead of the agent and closing representative that is no hand. Each party will be asked to sign a large number of papers. Even though it can be easy to skip these over without reading them, this is something that you want to avoid. Remember, one wrong signature could end up costing you a lot of money in the end.

Sooner or later, both the buyer and seller have to pay their closing costs. For the buyer, this number is almost always bigger. Additionally, if the buyer is making a down payment on the property, this is the time to give that money up as well.

The last step in the closing process is when the seller gives the buyer the keys. This should close the deal, and from there everybody is free to go.

No matter if you are buying or selling, feel free to ask questions during the closing. You want to make sure that you know just what you are doing before you leave the room. This way you will not run into any problems once you get into your new home.

Real Estate Investing Tips, Dos and Donts

In this slowly declining real estate market many of our readers were asking about real estate tips. Here it is.

There are one hundred ways to be successful and one hundred times that many ways to fail when it comes to real estate investing, or any number of career ventures for that matter. Use a couple of mind training techniques and follow some very important steps to make sure this doesn’t happen to you to. So how do you keep from failing and make a fortune by real estate investing? Start out by not taking no for an answer and being a charming sales individual that never forgets the purpose.

It seems simple, but determination is the biggest key in succeeding at real estate investing in that you must continually work, massage, and care for your potential clients to make sure that they haven’t moved on to something big without you knowing. Don’t simply forget about the potential of your client on your list because they said “no” this time or you think that they will say “no” this time, every number is a potential money maker whether they have previously rejected you or not.

While there are a million ways that could work for you to succeed in real estate investing, those who have done extremely well have done so for a reason, they found what worked and continued to repeat it for more success. At the same time, don’t get too bogged down in doing the same old thing because you will inevitably become yet another “investor” that is like the others and has virtually no competitive advantage over them. Don’t let this happen! Be your own person and your own success story, just slightly alter the formulas that are tried and true!

The most important thing to remember when you are attempting to become a wealthy proprietor through real estate investing is that you must not stretch yourself too thin. Don’t just be selective in your purchases, but be selective in marketing in a field that consistently gives you solid returns. For instance, if television doesn’t work for you, stop spending money on it, it will likely never get the right returns for you. Invest in local areas and see your fortune skyrocket.

Free Real Estate Investing Course with Video

The millionaire mind is like a sponge, it’s always absorbing new information and new ideas. You can never have too much knowledge. Real estate investing is one of those subject on the internet where you will always find loads of information. Thanks to Mike Smullin for pointing me to the American Success Institute site. Here you will find the Master Real Estate Course. This is a 10 lesson online course which also includes 17 videos.

The course lessons include the following:

1. Begin now: an introduction.
2. Collecting Municipal And Online Information.
3. Deal With The Best: Working with a good team (Real Estate Agents, inspectors, lenders etc.)
4. Look At Properties: Evaluating properties.
5. Negotiate The Deal: Negotiating techniques
6. Be a person of action: I like this lesson as I have always believed knowledge without action won’t get you far. You have to act.
7 .Highest And Best Use: This is a lesson I learned a lot from. For me it’s a new way of looking at real estate.
8. Live, Rent or Convert: Good info on whether to make the purchase your residence, or rent it out.
9. Buying and Selling: The title says it all.
10. Value-Oriented System: This lesson is a quick review and discusses values you should have when dealing with others. (Integrity, honesty, etc.)

After the lessons is a link to the 17 videos he has on this subject.

If you are a novice real estate investor or experienced one you will find something useful in this course. To read the course and view the videos click here.

Regards

Tax Credit for Developers of Affordable Housing

There is a bill circulating through Congress which will give tax credit to developers of rental housing for low- to middle-income tenants. The Bill was introduced in April by Rep. Ben Cardin, D-Md. and Rep. Thomas Reynolds, R-Texas, and referred to the Committee on Ways and Means, which deals with tax issues. The bill has 184 co-sponsors so far. If you are a real estate investor/developer who has ignored this market due to low profit potential you may want to reconsider.

Investors could receive a tax credit of up to 50 percent of the cost of developing each home.

“What the credit does is fill in the gaps between what the property can sell for and what it costs to develop,” saidbLinda Goold, tax counsel to the National Association of Realtors.

A tax credit is considered more valuable than a tax deduction because it is subtracted, dollar-for-dollar, from the total amount of federal income taxes owed. A tax deduction, on the other hand, is subtracted from gross income before federal income taxes are calculated.

In my opinion there is more to real estate investing than just profits. At some point we need to give back to the community. Building and rehabbing low-income rental housing is sometimes not profitable, but with this proposed tax credit we can give back to the community and still realize some profits. It’s a win-win situation.

Read the rest of this artice here.

The Real Estate Bubble May Burst, Don’t Be Afraid!

Everywhere you look these days you either hear or read an article about the bursting of the real estate bubble. Some investors become frightened as they tend to believe the burst of the bubble will have an impact on their bottom line. Well it might, but for the smart investor it won’t.

The type of investing that I have always believed in is flipping ugly houses, also known as rehabbing. If you are doing your homework and buying these properties at 60%-70% of after repair value you would have added enough cushion to soften the blow should the real estate bubble burst. Smart investor really do make their fortunes when they buy.

As a rehab investor your biggest enemy is time. If the market takes a bad turn and you have to wait 1-3 months longer to sell you property you should still be fine as you’ve added a cushion when you bought the property at a discount.

Another thing to remember is if the pool of buyers shrink then you have two very good advantages going for you.

1) The pool of renters, depending on your local economy, usually rises. You can rent properties, lease with option to buy, seller finance etc.
2) The market becomes a buyers market. As there are less buyers, sellers become more flexible with their terms. This allows you, as an investor, to pick up some really good deals.

So don’t be afraid if the real estate bubble bursts. Look for new opportunities, new revenue streams and new ways to take advantage while others hide.

Regards

Pump Up The Value Of Your Rehab Real Estate Investment

There are two legal ways to increase your wealth.

1. Keep more of what you have (e.g., tax strategies, rehab efficiencies, cost savings)

2. Add value to something (e.g., a real estate investment, stocks, bonds)

Let’s focus on adding value to your rehab investments.

The most obvious is certainly bring it back up to standards. We HAVE to do the obvious things such as:

- Ensure there are no plumbing leaks and the entire plumbing system is in good working order, including potable water and sewage/septic and water heater.

- Ensure the electrical system is safe and working. This may require an upgrade. This includes all outlets, breakers, heat and AC.

- There can be no leaks in the roof! Obvious, but sometimes this is hard to determine if it isn’t a rainy season. You might have to take a garden hose to the roof to be sure. Station someone in the attic with a flashlight.

- Get rid of any rotted wood or termite damage, repair walls, etc.

Those items I’ve listed and others like it are no-brainers. But how do we really add value to the eye? We make it pretty!

- We paint all walls and ceilings (usually bright white)

- We replace flooring, or if there is acceptable carpet or tile, we professionally clean and restore it. – We hang mini blinds on the windows.

- We trim trees and bushes, paint the outside make the exterior look fresh.

Now, to get the sale, or to get it rented immediately we do some of these things that really make a difference (notice the emphasis on kitchen and bathrooms!):

- Replace or refinish the kitchen cabinets, sink and countertop.

- Replace the toilet, vanity, and resurface or replace the tub.

What if we want to really make OUR property stand out on the market? What if we want there to be NO question as to what a great house this is in the buyer’s mind? What if want TOP DOLLAR? Try these inexpensive upgrades!

EXTERIOR

- Put a decorative fence in front. Plant some shrubs along the front of the house with attractive landscaping bark around it for color

- Replace the front windows with something more attractive.

- Install lighting along the walkway

- Plant a tree

- Install a new mailbox

- Build a deck in the back

- Increase the exterior lighting. Motion sensor lights are a nice touch.

INTERIOR

- Install a security system. Sometimes the system is installed free with a year’s monitoring. Make the first year of free monitoring (prepaid by you) a selling point.

- Install a garage door opener

- Install a used hot tub. You might be surprised the amount of folks who no longer want their hot tub!

- Include a microwave.

- Buy new appliances. Kind of expensive, but a deal maker. Try making this an incentive for a full price offer.

- Lay ceramic tile instead of vinyl.

- Go with snap-and-lock hardwood flooring instead of carpet especially in a great or living room.

- Upgrade the faucet to something sleek and modern. There are hundreds to choose from. Go with an extra large sink.

- Replace the cabinet and drawer hardware to something extra fancy. This can make an average kitchen POP for little extra cost!

- Add ceiling fans instead of just new overhead lighting fixtures.

- Add chair rail molding in the dining and living rooms.

- Buy the attractive switch and outlet covers instead of the basic contractor grade covers.

We, as investors, need to make the rehab fit our strategies. If we want to rent the property, you probably won’t add as many upgrades. If you are looking to sell, and you need to get that property noticed, you should add as many of the upgrades as possible within your budget, especially the visual upgrades.

I hope this list has got you thinking creatively about how to pump of the value of your next project!

About the Author
Bruce W. Ford is the editor of Rehab-Real-Estate.com. Get his important Special Report entitled “12 Things Real Estate Investment Gurus Won’t Tell You” at Rehab-Real-Estate.com.

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