Archive for April, 2012

Buy Second Homes Now

Monday, April 30th, 2012

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The housing market is down, and current prices are low.  Now is a great time to buy a second home. Many people question this, but it is the perfect way to start a career in real estate investing. Unless you plan on staying there a lot, your second home can actually make you money as a real estate investment property.

Rental Opportunities

There are several different types of rentals. For your property, you should pick the one that best suits your property needs and your responsibility/liability. A short-term rental is a furnished property with a contract for less than 30 days. A corporate lease is a fully furnished property with a contract for greater than 30 days. Traditional renting allows you to rent the property furnished or unfurnished for any period of time. Usually, contracts are signed for a period of 6 or 12 months. Real estate investors can use any of these to generate funds. The nice thing about short term rentals is you can easily generate enough to cover your monthly mortgage payment in just one or two visits without the yucky part of coping with the same problematic tenant for 12 months at a time.

Where to Find One

Finding the perfect spot for your second home may be a little bit of a challenge. In your local community, talk to the banks to find out what is available in short sales, foreclosures, and bank owned properties. If you want to venture outside your local community, start by looking online to find real estate agents in the areas you are interested in. These real estate agents will be able to give you background information on the area and can point you in the direction you need to go.

When you are talking to agents, look for areas that typically draw tourists, including ski areas, beaches, and tropical islands. Homes in tourist locations tend to rent more often and for a higher rate.

Keep in mind that short term rental properties need plenty of bedrooms and bathrooms and a nice kitchen. Even though families are on vacation, they will probably want to cook to help cut their expenses.

Advice

Be sure to seek out the advice of your mentor/adviser and a lawyer. They will help you figure out if something is a good deal, and look for potential legal issues that could complicate your buying/renting process. For more ideas in real estate investing, call or visit us at Homevestorsfranchise.com. We have a large assortment of real estate franchise and real estate investment opportunities to help you grow your real estate business. Come let us help your business grow today.

 

HomeVestors Reveals Top Reasons Real Estate Profits are Inconsistent

Thursday, April 26th, 2012

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Real estate investors have difficulty making consistent money through investing. The nation’s largest home buying franchise has pinpointed some of the problems in the investment process.

 

Dallas, Texas – Fifteen years ago, HomeVestors® discovered the necessity for real estate investors to buy, sell, and rent properties at a profit. The company has spent the last decade fine tuning their real estate investment approach. This has eliminated many of the common mistakes that investors when getting started.

Not Watching Trends

Although day traders spend day and night glued to news station, most real estate investors simply flip to something more interesting to watch. These investors get in trouble due to a lack of knowledge about the economy and its trickle down effects. Out of ignorance, they make moves that  are not financially feasible given the current market condition for their area.

Too Many Deals Passed

A second place investor get in trouble is by passing on smaller deals. Fishing shows are filled with sportsman that catch and release those nice, tasty pan-sized fish in hopes of bringing in the big one.  Most real estate investors work under the same hope of landing the ultimate real estate deal, and they miss out on lots of filling smaller transactions. Smart investors know that several small profit transactions can add up  to one large profit transaction.

Long Pauses in Business

Some investors buy property and then have nothing else to do accept wait for its value to go up. In the meantime, they pay for the maintenance as well as the mortgage, insurance, and property taxes. A monthly income can be generated by renting or leasing these same properties. The money can be used to pay for the property’s bills or to create a consistent monthly income for the investor.

Not Staying Within Their Areas of Expertise

Many real estate investors have a niche market that guarantees a client base of some kind.  They learn these properties, and what their customers expect. They know what quality rehab is required for their customer base, and get good at buying that level. When they get in trouble is when they venture outside their level of expertise. They get good at lower priced houses, so they decide to buy a more expensive house, but do not understand what quality that customer expects. Or, if they are used to buying more quality house, and buy in a lower market, they spend too much on the rehab making the house unprofitable.

About HomeVestors:
HomeVestors is the number one ranked home buyer and real estate franchise in America. They are the well-established real estate brand also known as the We Buy Ugly Houses people. Their marketing and real estate investing strategies have proven successful, and have resulted in over 50,000 properties bought across the United States.

 

Real Estate Tricks and Traps

Wednesday, April 25th, 2012

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It doesn’t matter if you are a beginner real estate investor or a pro, sometimes it is easy to fall prey to tricks and traps that others lay for you. Instead of letting a little tricky situation get in your way, here are some tips to help you avoid getting trapped.

Don’t fall prey to pressure. It is very easy to be pushed into a deal or venture because you are a nice person. Never sign a deal without sleeping on it and talking to the people in your real estate team trusted mentor/advisor. If it can’t wait, it isn’t worth venturing into, and you know what they say if it sounds too good to be true, it probably is.

Only invest what you feel comfortable investing. By the same token, do not invest more money than what you have available. Good deals come along all the time. If you can’t afford to pay your rent, you can’t afford to put any money into an investment. If the deal feels like it isn’t on the up and up, don’t invest a lot of money in it. Your gut is probably telling you something your head just hadn’t realized yet, and ignoring it could cost you thousands.

Get everything in writing. Although it would be nice to be able to do business on a handshake, our world just isn’t made that way anymore. A man’s word is no longer is bond, and unfortunately, it also doesn’t stand up in court like it used to either. Make sure that everything is spelled out in black and white, and get signatures, notaries, and witnesses whenever possible. It sounds silly, but you can never have too much proof or substantiating evidence if things should turn out poorly.

Don’t count your chickens before they hatch. In other words, don’t invest or spend money you don’t have yet either. When those great real estate investment opportunities come along, they will either still be there when the money comes through from the last investment sale or another great one will come along. Otherwise, you may be in the red up to your eyeballs with no way to pay it down.

These are basic ideas that have been passed along for generations, but when it comes to real estate business, they sometimes get forgotten. For more ideas on real estate investing success, call or visit us at Homevestorsfranchise.com. We have a wide variety of real estate franchise and real estate investment opportunities available to help you grow your real estate business. For more information, call or visit us today.

 

Real Estate Investments are about Attitude

Tuesday, April 24th, 2012

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You have heard the phrase some people get all the luck. The fact is you create your own Luck. It starts with your attitude. You have to think positively, work positively, and be positive. Positive things will start to happen. A positive attitude is the fastest way to get on the right road to luck and happiness.

Where are you headed?

Your success with life or even simply real estate investing is determined by the plans you have for yourself. If you haven’t, write down what you’d like to do in a year, five years, and even ten. How do they all relate? Is there a pattern that seems to connect them all or are they just random? After identifying your plans, start making smaller goals for yourself. You are going to have success. In order to get there, you are going to Put out 1,000 flyers a weekend, knock on 50 doors a day for references, etc. Your goals and plans are achievable. Knocking them out daily ensures your future success.

Just Keep Working.

It sounds like a halfhearted answer. However, successful real estate investing requires more than a halfhearted attempt. With real estate, you have to commit yourself 24 hours, seven days a week. The investment is more than just a few words. It’s a commitment of time as well as effort. Even when things look hopeless or like they aren’t getting better, just keep going. Over time, all of the right pieces will fall into place, and amazing real estate deals will come your way.

Follow Your Instincts.

Many real estate investment opportunities will arise over time. There are times when the financial numbers will be perfect, and there are times when they will not. It is up to you to listen to your gut. There will be many times that you will feel good about a deal, and you follow it. There are other times when you feel uncertain about a deal. That’s when you should not follow through with it.  The main thing to remember is you should follow your instincts, especially if they are particularly strong.

Don’t be afraid to make your own real estate luck. It’s the key to your real estate success. To help your real estate business grow, 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 homes. Our company has a vast assortment of real estate investment and real estate franchise opportunities available. Call or visit us today for more information.

 

Cut Your Losses

Monday, April 23rd, 2012

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Not every property is going to be a workable, worthwhile purchase. Sometimes, they are a dud, but you don’t realize it until after you get into it. If this has happened to you, there are a few things you can do to save yourself from a bad real estate investment purchase.

Contact Your Network.

The valuable part of having a network is the ability to ask questions, bounce ideas off people, and learn from one another. Ask around your network and find out if there is anyone else experiencing problems now. If they have experienced similar problems in the past, they may have ideas you have not tried. By talking with them, you may find out your marketing plan and business plan may need small adjustments in order for your real estate business to prosper.

Check out the demographics.

Who is in the area? Sometimes when you get into a neighborhood, you start having tunnel vision. You only see what is in front of you. Your local demographics should tell you the number of single parent families, married couples, young people, and old. These numbers should help you to closely examine your marketing strategy. Which individual types are more likely to rent a home? Then reexamine your marketing strategy. Can you make any changes to pull in these other  individuals and families as clients?

Have you tried everything?

There is a point of no return. You have tried everything,. You’ve talked to all the right people. Nothing seems to be changing. In fact, everything just continually gets worse. If that is the case, it is perfectly acceptable to cut your losses. At this time, it is perfectly acceptable because you have put everything into the real estate investment property to make it a success.

Letting Go!

When you are ready to let go, that part is the easiest. You simply have to set up a traditional home sale. If the property is a nice one, someone is bound to buy it for a personal home. If it has potential, another real estate investor may be willing to buy it an investment property. Other investors may want to see your previous reports on the income brought in by the property and your expenses before they buy.

If you have an investment property that is losing money, check your numbers and your options, then look us up at Homevestorsfranchise.com. We are the nation’s number one home buying franchise with a large assortment of real estate investment and real estate franchise opportunities. Our company has the tools and resources you need to grow your real estate business. Call or visit us today for more information.

Vacation Managers

Monday, April 23rd, 2012

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Real estate investors have a tough time balancing their personal life with their business life, especially if they own a lot of real estate investment properties. Most experienced investors turn to property managers to help take care of the management problems, like collecting rent, taking care of maintenance requests, etc. If those real estate investment properties are vacation properties, what are real estate investors supposed to do?

There is a division of property management that deals specifically with the needs associated with vacation property rentals. Unlike normal property management companies that deal with long term customers, these companies specialize in the short term aspect of property rentals. They know that these properties are turned over quickly, and the investment properties may get used by a tenant for a day, a week, or even a month. Vacation rental property management companies also know that in order to have people come back or make recommendations to others that the customer’s experience must be fabulous!

How to Choose the Best One

Interview friends, family, and any testimonials for yourself. If real people can recommend the management company and they have personally had great experiences, you have found a place to start. If anyone has a hesitation, scratch that company from your list.

Go to other properties they manage and observe how they interact with people. If their customer service is not something you would look forward to experiencing, that company is not for your investment property. If they provide service comparable to the Ritz, the vacation property management company  is definitely worth investigating.

Interview and ask questions. The people that manage your property should already have a plan and policies in place for just about every situation. Talk to them and ask how they might handle different situations. Typical questions are what to do with guests still in residence after their lease is up, what to do with trashed properties, etc. Their answers should reflect logic and experience. If they don’t, you should probably reconsider your choice.

Most importantly, the company you choose should reflect your personal management style. If it doesn’t, there is the possibility that you will disagree or have problems with some of the decisions that the vacation property rental company makes.

For more information on real estate investing, call or visit us at Homevestorsfranchise.com. We have a long list of real estate investment and real estate franchise opportunities. Our company can provide your real estate business the tools and resources it needs to be successful. For more information on real estate investing, call or visit us today.

Seller Financing, a Great Source of Funds

Thursday, April 19th, 2012

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Seller financing is one of the best sources of financing for real estate investments. Since banks aren’t lending nearly as much, seller financing allows individuals and real estate investors to purchase properties with greater ease. Income properties run down properties, etc. beat-up properties that we want to target. If sellers want to sell right now, many times they have to hold the financing, which is good news for you. Sellers are more willing to try creative financing arrangements, especially in slow or low economic situations.

What is it?

Seller financing is an arrangement where the buyer borrows the money for the sale from the property owner. This avoids the need to have great credit or to get approval from a bank. Sometimes this purchasing arrangement is known as owner financing or a purchase-money mortgage.

How to Explain It

Traditional home sales give the seller all of the money upfront from the sale. This also leaves the seller responsible for the capital gains tax. That is the tax on the difference between the amount the house was originally bought for by the seller and the amount it sold for. That can end up being a rather large chunk of money.

In a seller financing arrangement, the seller receives a down payment for the home. In addition, he sets the terms and conditions for loan. This includes the length of the loan, the loan amount, and the percentage of interest. Instead of the seller having to pay taxes on the entire amount of the home, he is only responsible for taxes on the amount he receives during the year (i.e. the down payment and the mortgage payments).

Here is an example for skeptics:

A $55,000 is seller financed. The terms of the loan are for 15 years at 5% interest. The buyer puts $5,000 down. The monthly payment is $300. Every year the seller would receive $3,600 in mortgage payments. After 15 years, he would receive over $59,000. This actually makes the seller an extra $4,000. In addition, the seller would only pay taxes on the $3,600 he received every year in payment. This amount is much less than paying for the entire $55,000 at once.

HomeVestors is a national home buying franchise with over 15 years of experience buying and selling as is properties. They have a large variety of real estate investing and real estate franchise opportunities available to help a real estate business grow. Visit www.HomeVestorsfranchise.com for more information.

Negotiating, Part 2

Wednesday, April 18th, 2012

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Negotiating is a skill that is best learned over time. However, with a little preparation and consideration, you can successfully get through the negotiation process and end up with a sale at the end. In the last article on negotiating we looked at the backup, multiple options, and think about it techniques. For inexperienced or new real estate investors, these next three techniques should walk you through the negotiation process pretty easily.

Share your Subject Knowledge

Honest, upfront sellers and buyers are more likely to sell their properties. By sharing your knowledge about the property or real estate investment, it creates a bound with the other person.  They begin to trust you and feel better about working with you on the sale. It also helps the other person to understand exactly what they are getting into so they do not walk into a situation blind. This reduces the chances of remorse or the felling of getting a lemon.

Other Person’s Benefit

We are unfortunately a culture that is centered on “me”. How does this look on me? How does this reflect on me? How will this benefit me? Another way to get through the negotiation process is to highlight or feature how the sale of this property will benefit the other person or “me”. Everyone wants to get best deal possible. Tell the person how he will benefit, and make the transaction seem like it is better than the other person could get anywhere else. This will make the other person feel like those extreme couponers. They have to get that a once in a life time offer.

Urgency

Many real estate investors use a sense of urgency to speed along a sale. Although this technique works, hesitate and only use it as a last resort. This technique tends to leave people with buyer’s or seller’s remorse. Usually to create urgency, an offer is accompanied by remarks about low pricing, the economy, and potential loss of profit. It also appeals to addicted couponers. They have to get it now!

People get frustrated or scared at the thought of talking to and working out the details with another person. It doesn’t’ have to be a scary situation. Prepping your mind and using these techniques can help you get through any situation. For more information on real estate investing, call or visit us at Homevestorsfranchise.com. We have a large assortment of real estate investments and real estate franchise opportunities available. Call or visit us today to see how we can help you grow your real estate business.

New ADA Regulations Real Estate Investors Need to Know

Tuesday, April 17th, 2012

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The importance for real estate investors to keep up on the latest legislation is never more apparent than now. The newest Americans with Disabilities Act (ADA) regulations went into effect on March 15, 2012. The new regulations affect every commercial building. Originally passed in 2010, it has slowly been phased in over the last few years. 2011 was the year for implementing the sections on anti-discriminatory hiring. 2012 is the year of accessibility standards for commercial buildings.

As of March 15, all buildings must comply with the 2010 accessibility standards. Any time improvements are made on a building, the structure must be modified to meet the new accessibility standards. This includes normal maintenance or replacement changes, like restriping parking lots, changing flooring, and moving walls. Even buildings constructed prior to 1991 are not exempted.

Major Changes to be Made

Some of the changes are pretty basic ones. There must be a three foot wide clearance or accessible route throughout the space. This includes between shelves and in office areas. All light switches and counters must adapt to the new height regulations.

Parking lots aren’t exempt from these changes. The new act requires 1 van accessible space per 6 required handicapped spaces. Parking lots would need to be changed to accommodate the 11′ wide parking space with a 5′ wide access aisle or the 8′ wide space with an 8′ wide access aisle.

ADA Compliance Tax Benefits

Section 190 of the IRS Code provides a tax deduction for businesses removing architectural barriers or alterations in existing facilities to comply with the new ADA regulations. For most companies, the maximum tax deduction is $15,000. For businesses with less than $1 million in revenue and fewer than 30 employees, all costs of compliance are deductible.

Commercial real estate investors need to maintain careful watch over their property compliance. New tenants and rental renewal contracts require new flooring every couple of years. The same applies to parking lot striping. Commercial real estate investors will have to make sure they set aside extra funds and carefully inspect their properties for compliance before they make minor routine renovations.

For more information on real estate investing, call or visit us at Homevestorsfranchise.com. We have a large assortment of real estate franchise and real estate investment opportunities available to grow your real estate business. Call or visit us today for more information.

Emergency Investment Money

Tuesday, April 17th, 2012

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There are a large number of old sayings that promote the importance of savings and good money management. A bird in the hand is worth two in the bush. Don’t count one’s chicks before they hatch. Don’t put all one’s eggs in one basket. The list goes on and on. Although each saying has a slightly different slant, the message is clear. People need to save their money and spend it wisely.

Real estate investors deal with large amounts of money frequently, and they have also have properties they must maintain. It is vitally important that they practice good stewardship in their business practices. The reason is things can go wrong at any time. If a roof caves in, where is the money going to come from to fix it? If the electricity goes out, where’s the money to replace the circuit breaker?  As a result, real estate investors must keep some money in savings for those emergencies that are unbudgeted for.

The best idea for real estate investors is to set up a major asset repair fund at the bank.  This is money that is earmarked specifically for the purpose of repairing and maintaining investment properties every month. If the money isn’t used, it can be moved into a higher interest savings or time deposit account. This helps to keep the temptations from business to make extra expenditures that may to be needed.

Unfortunately, emergencies can happen at any time, even before one can get an emergency cash fund stashed away. When this happens, there are still a few places that may be tapped for money. Everyone always recommends friends and family. These are okay sources if the other person doesn’t have to have the money to survive. There should always be notarized, signed documents between the two of you spelling out all of the terms and conditions. Otherwise, friends and family can turn into very sticky, tricky situations.

Another option is to visit a real estate network or club. Many times these have people willing to invest their personal funds, but they aren’t sure how or they are unsure about the time and money to find, obtain, and maintain an investment. Becoming an active member of the club will help to identify which individuals may be interested in personally investing.

Lucky people with spotless credit may qualify for a signature loan at the bank. These loans are wonderful for small emergencies. The rest of the world may try using a hard money lender or finding a new business partner. Hard money lenders are great sources for cash, but their interest rates are astronomical. Business partners are wonderful resources, but usually profits are split 50-50 between partners. For some people, that is too much sharing.

Emergencies in real estate properties can happen at a moment’s notice. It’s important to prepare now for the inevitable. For more information on real estate investing, call or visit Homevestorsfranchise.com today. There is a large number of real estate franchise and real estate investment opportunities available for real estate investors that want to grow their business.