Archive for March, 2012

Real Estate Investment Issues

Friday, March 30th, 2012

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After you have been real estate investing for a while, there are little issues that pop up. Each one is frustrating, but easily manageable if you are prepared ahead of time. To keep you on your real estate investing game, here are a few issue preventing ideas.

Strategy

Success is always the result of careful planning and strategizing. Ask every profitable major business. Before you make any purchases, have a plan. Are you going to keep the properties or sell them? How long are you going to keep them before you decide to exit? Write it down and keep it posted where you can refer it to it often. This helps you to stay focused and make decisions that follow along with your pre-established plan.

Team

It takes a lot of specialties to make real estate investments successful. Unless you have a lot of amazing skills, it is important to develop a good network or team of individuals that can make up for the skills that you lack. You will need financial specialists, legal advisors, construction specialists, etc.

Keep Current and Relevant

It is difficult to fulfill buyers’ and renters’ needs and desires if you don’t know what they are. Watch the news. Read blogs, journals, and magazines. Watch those design and do-it-yourself shows on television. They will help you to keep current on technology and the latest in design trends. In addition, you must stay on top of all new legislation changes that affect your real estate business. This will help you to be proactive in your real estate business decisions instead of reactive.

Savings

You never know what expenses are going to pop up or when a client is going to flake on you. By having money in a major asset repair fund or savings account, you have back up funding to cover the unexpected. The best game plan is to keep two to three months’ worth of mortgage payments and other expenses ready for emergencies.

Separation

It is extremely difficult to do, but you must keep as much separation between your personal and business finances. This includes using your personal credit to finance your business investment properties. Any overlapping can cause huge financial difficulties and legal liabilities latter on.

Keep a cool real estate investing head by strategizing and preparing before you invest. For more ideas on real estate investment, call or visit us today at Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience buying and selling properties. Our company has a wide assortment of real estate investments and real estate franchise opportunities available to help you grow your real estate investment business. For more information, call or see us today.

Hidden Landlord Costs

Wednesday, March 28th, 2012

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Landlords and real estate investors have the potential to make a lot of money with rental properties. However, there are a huge amount of hidden fees and expenses that can quickly offset the amount of profit you can make if you don’t know about them ahead of time. Before you let expenses eat away at your profits, here’s a list to help you adjust your bottom lines ahead of time.

Property costs and expenses – Most real estate investors know they have to purchase the property, but just like your home, you have other costs and expenses you will be responsible for. You will have property taxes due for each property, in addition to utilities.

Maintenance – The upkeep of each property always takes real estate investors by surprise. Just like your home, you will be responsible for replacing any broken and nonfunctioning fixtures, features, and appliances. This is in addition to cleaning, painting, and maintaining the yard as well as the exterior and interior of the home. The best way to do this is to set up a Major Asset Repair Fund where you tuck away extra money every month to save until you need it.

Insurance – It is vitally important that you protect your real estate investment assets. Insurance will cover a large portion of replacing your structure if something should happen to it. You may consider getting an additional liability insurance policy as well. This will keep you from being liable if anything should happen on one of your properties.

Landlord Costs – Depending on the local government, there may be specific licenses you may have to have or specific fines and fees you have to pay. The local business associations, tax assessors, and real estate attorneys should be able to advice you on the local business codes you will need to address.

Taxes – An account or tax professional is a must if you have real estate investment properties. Not only will you owe property taxes and personal income taxes, but you will also have business taxes you will owe every year. A professional will walk you through what you will owe and the steps you can take to get valuable personal and business tax breaks.

These are just a few of the hidden costs that can greatly affect your real estate business bottom line. Getting a handle on them now will help you avoid being short later. For more information on real estate investing, call or visit us Homevestorsfranchise.com. We have a large assortment of real estate investing and real estate franchise opportunities available. Come let us help you grow your real estate investment business.

Apartments Are the Future

Friday, March 23rd, 2012

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Apartment buildings are a great long term investment for real estate investors. Managed properly, apartments can provide high yields at moderate or low risk and can help you to save for your retirement. The great news is banks love to finance them due to their great cash flow and return on investment. If you want to establish a future for yourself with real estate investment, apartment buildings are the avenue for you.
Return on Investment

The expenses on an apartment building may seem endless. The short list includes taxes, insurance, repair, upkeep, and management. However after all of the expenses, real estate investors can expect a typical return of six percent or higher from the monthly rentals . This includes the cost of a professional property management team to take care of renters’ needs and desires. In addition, apartment buildings are known to appreciate over time. They usually average around three percent.

The Plan
Acquire a nice apartment building. Look for one that can be easily paid off by your retirement age.

Set monthly rents at a level that will fill the units and still make up for empty units, lost rent, or abandonment.

Use monthly rent to pay building expenses and mortgage.

Take part of the monthly remainder and pay yourself now. Then, either invest/save the remainder or apply it to the mortgage.

When the building is paid off, your monthly cash profit after expenses will increase the amount of the mortgage every month.

Easy Learning Curve

Apartment buildings are easy to find since they are everywhere, and most people can understand the operation of them pretty easily. Managing an apartment is straightforward. Most of it can be handed over to a property management team or automated to make it less stressful.

How to Begin

The benefit of buying an apartment building is their value is based on the current building rent and occupancy. Due to the current economy, buildings everywhere are cheap. The best thing to do is start with a small or medium apartment building. As you experience success, you can buy more or larger apartment buildings.

Apartments are a great way to set up a retirement for yourself. They are not the only way to start a retirement plan with real estate investment. For more ideas or opportunities available for real estate investment, visit us at Homevestorsfranchise.com. We also have fabulous real estate franchise opportunities available for serious real estate investors.

Multi-Family Properties Are Winners!

Thursday, March 22nd, 2012

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Single family homes are great real estate investments. They are easy to maintain individually, and since there is only one family at a time to deal with, managing the property is usually easier for beginning real estate investors. Although renting one dingle family home at a time is a good place to start, it usually takes multiple single family homes for real estate investors to start making decent profits.

Multi-family properties take the same number of single family homes you would need to make a decent profit and squishes them together in one location. This solves a lot of problems that many real estate investors have with owning several single family homes.

Benefits of a Multi-Family Property

Less driving

When you own several single family homes, there is no guarantee that they will be in one single location. The majority of time they are spread over miles. This means that in order to maintain and properly manage them, you will spread enormous amounts of money on gas and lots of time traveling. Multifamily homes eliminate the necessity to drive miles and spend hours traveling.

Less percentage of vacancy

Every time one of your single family homes becomes vacant, you are earning zero dollars for that property, and you are at 100 percent vacancy. That means you have to come up with 100 percent of the money to pay for that property. In a multi-family property, unless every single one of the units is empty, you are going to at least have some income generated to help pay for the property. Your vacancy rate may only be 25 percent which means you will only be out of pocket only 25 percent of the amount for the property.

Less Repair Expense

When you are dealing with single family homes, you are responsible for 1 roof for every property in addition to 1 HVAC unit, plumbing, and electrical wiring per property. For one property this isn’t a terrible expense but when you own 7, 10, or 25 properties, this number can start creeping up quickly. With a multi-family home property, you are responsible for fewer roofs, less plumbing and wiring, as fewer HVAC units depending on the type/design of the properties.

Fewer Restrictions by Banks

Many times banks will limit the amount of single family homes that an individual can own. In some places, this number is anywhere from 4 to 6 residences. By owning multi-family units, you can get around this type of restriction.

Single family homes are fine for being investors, but the real money is to be made in multi-family properties. For more information, call or visit us at Homevestorsfranchise.com. We are the nation’s number one home buying franchise. We have the tools and resources to help you grow your real estate business. For more information on real estate investing or real estate franchises, call or visit us today.

Real Estate, More Strategy than Luck

Thursday, March 22nd, 2012

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Lots of people feel they aren’t lucky enough to go into real estate investment. They mistakenly believe that real estate investing requires a visit by Lady Luck every day in order for you to have any amount of success. Although this is an interesting theory, the majority of the success real estate investors have in investing is through strategy more than luck.

Think Long Term!

Most stock holders don’t make their money by buying a stock today and selling it tomorrow. They carefully select their stocks based on previous performance and then buy a select number of stocks to hold onto over time. This is exactly where most real estate investors get it wrong.

Real estate investment is actually a long term investment with a property. These properties can be rented, leased, or sold. However, investors really get their money back plus a decent amount of profit if they hold on to them for an average of 3 to 5 years. Buying low to mid-range properties usually will pay for themselves very quickly once they are rented out.

Don’t Plan on Quick Money

Contrary to the popular guru, You should not count on quick money and quick access to money in real estate investment. Some properties will sell quickly once they are put on the market. However, most do not.

Less Risk

By hanging on to your investment properties, you reduce your risk for failure in your real estate investments. Trying to sell them fast actually decreases your chances of receiving the maximum amount of profit. By keeping your properties for multiple years, you earn monthly cash flow for immediate profit. Then, selling it years later, you earn additional profit above what you have already earned.

In addition, low- and moderate-income properties usually appreciate slowly instead of depreciate. This reduces your risk over time as well. By using these types of properties as real estate rentals, you are going to get your money back monthly whether the property values go up or down. This kind of guaranteed income makes it easier to budget and balance your finances.

Real estate investing is all about strategy. Buy low to moderate income properties and use them for rentals. This gets your money back over time with very little risk. For more information on real estate investing, call or visit us at Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience buying and selling properties. We have a vast assortment of real estate investments and real estate franchise opportunities available to meet your business’s needs. Come let us help you grow your real estate business.

Shopping Around

Tuesday, March 20th, 2012

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Not all properties are good candidates for rental properties.  There are certain characteristics that make some homes more appropriate than others. Before you simply by a property as a real estate investment, make sure it is rental appropriate.

 

Outdated, older homes

These homes have good bones. Since they are older, they will require a lot of work before they will be appropriate for renting out. In addition,  they are more likely to need a lot of repair in the near future to repair and replace pieces, appliances, and fixtures that have just worn out with time.

With older homes you can choose not to mess with addressing problems beforehand. This is a very risky situation. It leaves the possibility of a lot of problems going wrong after the tenant is in place.

Your other choice is fix the property before you let tenants in. This means you may be fixing plumbing issues, roof leaks, cracks, foundation settling, electrical problems, and outdated or broken appliances.

 

High-maintenance Homes

Larger homes or large yards can be beautiful, but no one wants to spend all of their spare time maintaining their home. This includes weeding, mowing, pruning, and watering, as well as washing windows and cleaning gutters.  very few tenants are willing to do all of this for a property they don’t own. If you want it done, you will probably have to hire a service and include their fees in the monthly rent.

 

Pools

Although pools are desired by a lot of families, homes with pools aren’t good candidates for rentals. A pool rules out a lot of potential tenants as contenders. Some families with small children will consider your home too risky a place to live. In addition, you would have to be really clear on who, how, and when the pool was to be maintained. Not all renters are willing and able to mess with pool maintenance, and that can turn into a messy affair. It also raises your liability too.

 

Proximity

Good rental properties are ones that are near to local amenities and services. People need these services anyway, and they are willing to may a little more to be near them. Properties that are in the middle of nowhere are generally less desirable. Your tenants will have to drive farther to get to the resources they need.

 

These four details will help you pick the best real estate investment properties when you are shopping around. For more information on real estate investing, call or visit us at Homevestorsfranchise.com. We have a large assortment of real estate investment and real estate franchise opportunities available to help you grow your business. Come see what opportunities we have for your real estate business.

 

Developing Your Own Purchase Strategies

Monday, March 19th, 2012

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As you venture further into real estate investment, you will discover that certain situations need more than the standard or traditional routine or solution. Many times, these situations require a little more creativity. It is quite all right for you to develop your own solutions to some of real estate investment’s problems, like purchasing properties.

 

One possible solution to the lack of funds in purchasing properties would be a partnership. Although it sounds strange, a partnership between you and the seller of the property is the perfect solution. Sellers want money and to be able to be rid of their property. While you can’t afford to pay them outright for their property and fix it up, you can turn them into partnering investors.

 

As a partnering investor, the seller receives a partial payment for their property. In turn, they add your name onto the title or trust so you have some legal rights to the property. In return,  they receive a percentage of the profit from the property. Once the property rents, you are reimbursed expenses  first. Then, any remaining amount is split 50/50 with the seller.

 

Your Role

After the partnership is formed, you are the one responsible for cleaning and preparing the property for rental or leasing. Then, you must advertise, screen tenants, choose tenants, and manage the properties. As you choose tenants, look for long term ones or those that desire a lease-to-own relationship. You will set the terms and interest rates of the loans used, and that’s where your partnership will make its profit.

 

Requirements:

Make sure the property is one that is in decent condition and very little work will need to be done to it.

Do your due diligence on the property before making any offers or partnerships. You never know what will show up..

Make sure the seller is one that really is interested in the money but does not have an immediate need for the full amount. Also, the seller has to move out and stay out. You can’t fix the property up if they are there, and you can’t rent it either.

Make sure that there is a contract between the two parties. It should explain in detail what each party is responsible for. This includes handling of expenses, division of profits, and experience reimbursement.

 

A little creative problem solving like this will have your real estate business growing by leaps and bounds. For more information on real estate investment, call or visit us at Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years experience buying and selling properties. We have an abundant assortment of real estate investment and real estate franchise opportunities to help you grow your business. Call or visit us today to see how we can help you real estate business grow.

 

 

The Real Purchaser

Monday, March 19th, 2012

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Over the years, there have been a lot of wild stories that have popped up in real estate investment. Some of them are make believe. However, there are some pretty wild sounding ones that have turned out to be true.

In one such story, a homeowner sold his house to one buyer, and turned around and sold it to a second buyer. The second buyer rushed to the courthouse and registered the deed before the first buyer had a chance. The good news if this actually happens to you there is hope.

Giving notice or recording the deed is not the true transfer of ownership. It is a legal requirement for tax purposes. Recording the deed tells the world and the county clerk’s office who the title of the property transferred to.

In order to buy a property, there must be a signed deed which passes ownership of the property from the seller to the buyer. If by chance a disreputable seller gives two separate deeds, most states already have legislation in place to handle it.

The Real Buyer
In the US, most states use a race-notice rule. The first person to record his document is the rightful owner as long as he is the bona fide purchaser or real buyer. A bona fide purchaser is defined as:

• one who received title and made record of it in good faith

• Paid value for the home, and

• Was not aware or had notice of a prior transfer.

Foreclosure

Foreclosures is one situation where this double buyer scenario happens frequently. In foreclosures, a real estate investor can get a quitclaim deed for free.

If the 2nd buyer or real estate investor receives a deed without any money transfer and records  his first, he does not qualify as a bona fide purchaser  or real buyer.

If the 2nd buyer knew of the existence of a first buyer , even an unrecorded one, the 2nd buyer is not the real buyer or bona fide purchaser.

If the 2nd buyer acts in bad faith, he does not qualify as the bona fide purchaser.

If you are an innocent buyer and you pay for a property and receive a deed, there are laws to protect you. The hard part will be in proving your case.  The professional real estate lawyer on your real estate business team will be your biggest asset in cleaning mess this up.

There is always risk in real estate, but states are trying to protect the honest real estate investor. For more information on real estate investment or real estate franchise opportunities, visit us at, Homevestorsfranchise.com.

What Real Estate Investors wish Homeowners and Real Estate Agents Knew, Part 2

Friday, March 16th, 2012

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Imagine if you could really see what someone else was thinking. It could open up a world of possibilities to you and them. Real estate investors feel this way all of the time. Really great deals get passed on due to misunderstandings and miscommunication. In the last segment we looked at pricing, financing, and transaction misconceptions. Today, we are going to take a look a few more things real estate investors really wish real estate agents and homeowners.

 

Creative Thinking

Being your own business person means you get to explore more creative avenues for solving problems than the ones that are normally taken. This is one of the many perks of real estate investment. However, not every person can appreciate a creative solution, like dropping ping pong balls from a helicopter to sell properties. A good real estate agent is one that will be able to see the ingenuity involved in these creative solutions and can offer advice or maybe even come up with some creative solutions of their own.

 

Number

Real estate investors work with a startling number of offers all at one time.  Not every offer will be accepted, but the possibility of working with their large volume should be motivating for real estate agents. on average, a beginning real estate investor buys a new property every couple months. Larger real estate investing businesses buy multiple properties a week. The real estate agent working with an investor will do more calls and submitting offers than they would with a normal buyer. However, they usually end up saving money on gas since they don’t have to drive real estate investors around to properties all over town that they don’t put an offer on.

 

 

Multiple Agents

Real estate investors target areas all over the city, state, and country. Each one offers a different investment opportunity. Most real estate agents are specialists. they have a particular type of property, neighborhood, or area that they work in. Since investors need a broad assortment of specialties, they often resort to working with more than one real estate agent at a time. This isn’t because one of their agents is doing a terrible job. It is generally due to the inability or lack of knowledge in a particular area that the real estate investor needs.

 

The most important fact to remember from all of this is real estate investors need open minded, creative real estate agents to work with them to find investment opportunities. For more information on real estate investing, call or visit us today at Homevestorsfranchise.com. We have a vast assortment of real estate franchise and real estate investment opportunities available to help you grow your real estate business. Call or visit us today to see how we can help your business grow!

Beginning Real Estate Investing Mistakes (part 2)

Friday, March 16th, 2012

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In the beginning of this series, there were the pitfalls of screening, contracts, and refinancing. These are some of the mistakes most real estate investors try to avoid, but their efforts tend to fall to the wayside. Budgeting, avoiding responsibility, and proper maintenance are three more beginner investor mistakes that can cost you tenants.

 

Budgeting

No one likes to do hear it or do it, but establishing and sticking to a budget does make your real estate business run smoother. That doesn’t mean that there will always be a surplus of money lying around. On the contrary, budgeting takes the funds you do have and divides them according to their purpose and saves them for that. If you keep surpassing your business’s budget, you are not going to gain any profit. To avoid this situation, try to maintain your monthly expenditures at less than fifty percent of your monthly incoming cash flow.

 

Proper Maintenance

Your real estate investment properties have to be properly maintained and serviced. This takes time and money. However, not maintaining your properties will actually cost you more money in the long run, especially when washers, roofs, and HVAC units have to be replaced at the same time.

 

Tenants can tend to be pretty picky about the state of their rental property. Make sure their needs are met as soon as possible to avoid frustration and disheartening 3 a.m. phone calls. If you haven’t hired a maintenance person or company, now is the time to start looking.

 

Avoiding Responsibility

The biggest mistake that real estate investors make is avoiding responsibility and allowing your tenants to avoid it as well. As a person, you can be understanding when an individual is having a hard time and cannot make their payments. However when you fail to uphold your contract policy on payment or payment arrangements, you are also setting up a bad pattern of behavior for your tenants. You are allowing them to avoid their monthly responsibility, which is to pay your rent. This sets up a chain reaction where other renters will avoid their responsibilities too.

 

You can have a successful real estate business year if you can navigate your way successfully through these real estate rental nightmares. For more ideas on real estate investing, call or visit us today at Homevestorsfranchise.com. We have a large variety of real estate investment properties as well as real estate franchise opportunities available. Come see what opportunities we have to help your real estate business grow.