Archive for September, 2012

Investing In Wholesale Properties Can Earn Quick Profits

Friday, September 28th, 2012

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One of the most exciting aspects of real estate investing is purchasing and flipping wholesale properties. In order to wholesale properties successfully, an investor must do the necessary research to find the “diamond in the rough” properties and get them under contract. They must be equipped with a solid understanding of the costs that go into the rehab and be able to mathematically calculate the top dollar that they can pay for a property. They must establish many connections in the industry, especially with retailers so they can flip properties with one or two phone calls.

It just seems too easy. People often hear about real estate investors who recently made $5,000 in 3 days just by finding a property and flipping it. These investors don’t usually divulge into the details of how many hours it took them to study the real estate industry and search through property after property before finding that one diamond in the rough.

Most wholesalers are finding properties by searching databases like the MLS and searching out FSBO sellers who have been on the market for a while. They are looking for certain phrases to indicate that a property needs work like, “investors’ dream” and “needs a little TLC.” To these investors these phrases mean, willing to sell for cheap and take my problem property off my hands.

After finding the perfect investment property contact the owner and ask few questions to determine their level of seller desperation. Only meet with sellers who want to sell and want to sell now. Check out the property and determine the level of work necessary to get the property rehabbed and back on the market. This estimate is where the investor makes their bank. They need to understand the amount of money that the rehabber has to put into the property to get it back on the market and turn a profit.

When negotiating the property, point out the things that need to be fixed and explain that it is going to take some time. Realize that time is money and many rehabbers are relying on hard moneylenders to invest in a property. Take into account these interest rates when making an offer and always give yourself a cushion for any unexpected expenses.

After getting the property under contract, contact retailers who may be interested in it. Get them to take a look at the property and allow them to put in an offer. Assuming that the offer nets a wholesaler around $5000 or more, sign the contract over to them and search out more diamond in the rough wholesale properties.

Asking questions with these few tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

Investors Who Invest In REITs Stand To Make Consistent Income

Friday, September 28th, 2012

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Real estate investors who have chosen to invest their money in Real Estate Investment Trusts (REIT) make a very solid investment decision. They can count on consistent cash dividends throughout the course of the investment and can take those dividends to purchase more stock in REITs. REITs allow for a large group of people to own powerful properties and keeps extremely wealthy real estate investors in check. REITs possess their strength in numbers and their shareholders have roughly the same amount of shares each.

Real Estate Investment Trusts must follow certain rules that other real estate investments are not subject to. They must be made up of at least 100 different share holders and theses shares must be distributed relatively equally so no one person possess a dominant majority. 50% of the shares cannot be held by 5 or fewer people and in turn, every shareholder has a voice in the investment.

A REIT must pay out 90% of its income to its shareholders. This allows them to remain in a non-profit status and gives investors a reason to get involved in the action. REITs have remained relatively stable in comparison with many other investments.

REITs are for investors who want to get into the real estate industry but don’t want to dive into the deep end. There is no work required after the initial deposit and the corporation takes care of all the manual work. They search out properties, purchase them and then they hire a management team who in turn take care of all the day-to-day work.

Real Estate Investment Trusts can be a good choice for retired individuals who want to invest their money, but are not interested in actively managing their investments. They can sit back and enjoy the cash dividend payouts a REIT provides.

REITs are a great way to diversify an investment portfolio. Diversification can ease an investor through the current economic slump. If an investor has a few different real estate investments, adding an REIT could be a great way to obtain some security in the industry. The profits are not as powerful as other tangible real estate investments but the amount of effort needed to earn money is close to zero.

Consider investing in Real Estate Investment Trusts and test the waters of the real estate investment industry. If this industry is something you wish to pursue consider adding more aggressive investment strategies in the future.

Asking questions with these few tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

Investors Who Leverage Money From Hard Moneylenders Can Earn Quick Profits

Friday, September 28th, 2012

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When getting into the real estate investment field it’s best to possess a great deal of capital and have flawless credit to secure loans. Unfortunately, most of us don’t live in a perfect world. If an investor wishes to begin in the real estate investment industry and doesn’t have much capital or good credit, they can turn to hard moneylenders to obtain the funding to purchase a property. The goal here is to secure the property and flip it. An investor must have a solid exit strategy or the payments and interest will bury them before they can get it sold.

Most hard moneylenders will offer a short-term loan, also known as a bridge loan and put up 65% of the purchase price, but no more. They are willing to look past poor credit and a lack of serious capital, income or equity because they charge extremely high interest rates. They aren’t too worried if an investor can’t make the payments because they are more than happy to foreclose on the property and possess it for themselves.

Investors who have to go this direction are taking a bit of a risk and should have the capital to make at least 6 monthly payments. This will give an investor time to rehab and market a property. If they can sell the property quickly, they can secure a decent profit by effectively leveraging a hard moneylender’s capital.

Now that a real estate investor has 65% of the property paid for, how are they going to fund the other 35% of the property? Investors who own other properties can put these properties up as collateral on the remaining balance and the hard moneylender will fund the entire cost of the property. This process is called cross collateralization. Obvious, the risk an investor takes is substantial but if everything pans out, a serious profit can be made.

Many times a hard moneylender will ask to see an investors’ exit strategy. Most of these investors are retail property investors and plan to fix up a property, get it back on the market and sell it. These properties need to be purchased well below market value and not cost a great deal to fix up. Make sure that the property can be sold a bit below market value and still turn a profit. Don’t get stuck with a property that you can’t pay for or sell, without losing money.

If you are up for the challenge, consider securing a loan through a hard moneylender and put in the work to get it sold through a preplanned exit strategy.

Asking questions with these few tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

Investors Who Rehab Properties Need To Know the Tips of the Trade

Friday, September 28th, 2012

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Investing in Rehab Properties can net a retail investor serious profit. These real estate investors need to be able to find the perfect investment properties. They need to accurately calculate the amount of work and money it will take to get a property back on the market. They need to have a well planned out exit strategy and if they can, they should line up a buyer before the rehab work begins.

Rehab investors need to establish solid connections in the real estate industry, especially with wholesalers to ensure that they are getting first dibs on rehab properties that are on the market. They can also do their own research by actively searching out rehab properties on the MLS and scouting FSBO properties. When starting in the retail property industry, it is best to start out with a property that doesn’t need any major work. It is important to start small in order to be able to accurate judge how much money will need to be spent.

Hiring a professional inspector may help establish the project improvements to their entirety. Hiring a professional contractor who has experience in accurately pricing rehab work is also a good idea. They can get a retail property investor started and enable them to eventually make accurate estimates themselves.

Now make all the calculations necessary to understand what is the top dollar that can be offered for this property. Take into account the amount of time the property will take to get ready. Many retail property investors borrow money from a hard moneylender and are willing to pay 15%+ short-term interest rates on the purchase. They know that they will only own the rehab property for a period of 3 to 4 months, so this won’t be a long-term issue. Now take into account the amount of money for repairs and the cost of contractors. Make sure to allow a few thousand dollars for unexpected expenses and factor in the profit you should to earn.

Make sure to understand where the market value of the property is and make an offer accordingly. Have the exit strategy all planned out before making an offer. How do you plan to sell the property quickly? If you can, find a buyer before making an offer. Have a contract set up and ready go, allowing them to move in immediately after the project is completed.

Asking questions with these few tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

HomeVestors Knows What Investment Properties To Stay Away From

Friday, September 21st, 2012

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When looking for an investment property, make sure to analyze the major systems for problems.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years. The company knows how to avoid properties that are bad for investors. As a first time real estate investor, do not invest in properties that have electrical, foundation, plumbing, attic issues or landscaping problems. Leave these issues to the experienced rehabber because they will be able to accurately calculate the amount of money it will take to get these issues fixed.

If you aren’t an electrician, don’t get involved in an investment property with electrical issues. Even when a house is brand new, do not assume that the electrical system is good to go. Make sure to have an inspector ok the electrical work.

An issue with a foundation is certainly not a project that most investors want to take on. A foundation issue can happen by something as simple as bushes that have sprouted up around the house and effectively change the way the house sits. This could result in a cracked foundation that would cost thousands to fix. Over time houses will crack so don’t mistake these cracks for foundation cracks.

Plumbing issues are not something that first time investors want to take on their own. Once a pipe is damaged it may leak a bit of water and offer mold the perfect conditions to multiply. Now, not only does a house have a plumbing problem, it has a mold problem as well.

Many investors neglect to check out the attic but this is where valuable insight into the property can be attained. This could tell an investor if there was ever a leaky roof by traces of water damage. Sure the owner may have fixed the ceiling, but the attic still displays the remnants of this problem. A bug infestation in the attic can also spell trouble for an investor. These properties scream, “Stay Away!”

Any landscaping that is placed close to the house is of concern and purchasing a property with landscaping here could be a serious mistake. Make sure that rain water from the roof is routed away from the foundation because this can lead to damage over time.

Any houses that display any of these issues could create havoc for a first time investor. It is better to look elsewhere and find an investment property that won’t cost too much to fix and enable the investor to get the property back on the market rapidly.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties.  Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community.  In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction.  For more information, visit www.HomeVestors.com.

 

Investor Tips On Getting Involved in The Rental Industry

Friday, September 21st, 2012

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Real Estate Investors getting involved in the rental industry need to know the pros and cons before considering this pursuit. Some of the richest people in the world owe their fortunes to investing in the rental industry. Rental property is a tangible asset that can accrue appreciation, but dealing with bad tenants, a lack of tenants, and unexpected expenses makes it a risk. When going into the rental industry, be sure to have reasonable expectations and an emergency fund to cover any problems that may arise.

Owning real estate is great for people who want to have something to show for their hard work. Having a tangible asset is important and owning a rental property is one way to achieve this. Rental properties usually allow the owner to leverage money. Obtaining a loan from a lender is the first way that leverage is employed. Then, the tenants pay off this mortgage and any profits go to the owner.

Make sure to pick a rental in an area that appears to be stable in order to take full advantage of general inflation. Make sure that this area has a host of potential tenants who will likely be able to pay for their rent.

Now with any investment there are bound to be risks. Make sure and purchase a decent insurance policy that covers any lawsuits. If one of your tenants happens to fall and break their leg, you could be at fault. Make sure that the building is up to code in order to give no reason for potential lawsuits.

Make sure to have an emergency fund to deal with any expenses that may pop up. If the furnace breaks in the middle of winter, an owner of a rental property needs to deal with the issue immediately. Don’t give your tenants a reason to leave, fix anything that they request, as fast as possible.

When dealing with rental properties you are going to have bad tenants from time to time. Have a policy when dealing with non-paying tenants and make sure to deal with them diligently. Get some new quality tenants to fill their shoes. Make sure to have a mandatory credit and reference check on all applicants.

Make sure to obtain a standard lease contract from a real estate lawyer. Don’t get stuck with a lease that isn’t legally binding and have to deal with these problems. Join a rental association in your area and meet the other real estate investors in the area.

Asking questions with these few tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

 

Investor Tips to Investing In Paper Real Estate

Friday, September 14th, 2012

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When getting into real estate investing most investors don’t consider the benefits that investing in paper real estate can provide them. Some expert investors consider paper real estate the only way to invest because it is easier and they don’t have to deal with the physical details of a property. Paper real estate involves investing on the administrative side of real estate and these investors act as a lender. They finance wraparound mortgages, second trusts, and purchase mortgages at a discount. These documents are collectively known as notes.

Investors who choose to purchase notes, purchase them at a bit below the value and they are able to earn a high interest return on their money. Now at the same time, every investment comes at a risk. What happens when a borrower doesn’t have the funds to pay the monthly payment on the note? These investors get stuck waiting for the property to foreclose before they are paid off on their investment.

If a buyer and seller are unable to close a deal because the buyer doesn’t have enough money for a down payment an investor can come in and pay a portion of the down payment to the seller. The investor would secure a promissory note from the buyer and collect monthly payments with interest in order to pay for the down payment over time. Since most of the buyers are unable to fully qualify with a typical lender, the interest rates that a paper investor can charge are high and are a great investment with no grunt work required.

Investors can set up these promissory notes any way they want. If an investor wants to add a balloon payment date in order to recoup their investment on a certain date, they can. The beauty of these notes is that an investor can create different financing techniques because they leverage the power by borrowing the money.

These promissory notes add a lien to the property so if there is a problem with payment, the home will eventually go to the foreclosure process. This is a mess and investors don’t want to be involved with this but it is nice to know that their investment is a safe bet either way.

Investing in paper is only possible if an investor has a great deal of expendable cash. It certainly beats the rehab and flip philosophy because there is less work and greater returns. Invest in paper and take the role of the bank.

Asking questions with these few tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

Investor Tips to Decide Which Real Estate Investment is The Best For Your Needs

Friday, September 14th, 2012

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There are so many different avenues available to an individual who wants to get started in the real estate investment field. Some investments can be as little $500 so there is something for everyone in this vast field. There are Real Estate Investment Trust (REITs), Real Estate Investment Groups (REIGs), wholesale, retail, and rental options. In deciding which one is right for you, make sure to understand the how each investment differs.

Real Estate Investment Trusts (REITs) are the cheapest and easiest way to get started in the real estate industry. Many first time investors consider these before all other options because they offer a relatively secure and solid investment platform. Some REITs have investment options that begin at $500. This investment is a liquid investment and some REITs offer a Dividend Reinvestment Plan (DRIPs). This allows an investor to invest their cash dividends back into new investments or more shares of their current investment.

Real Estate Investment Groups (REIGs) are another investment consideration for individuals who are just getting involved in real estate and don’t want to invest too much money. Some REIGs have an initial investment around $5000 and are ideal for investors who don’t want to deal with the legwork of the rental industry. An investment in an REIG, invests money into one or more apartment units while the company handles all the daily operations. This includes all the maintenance and tenant issues. The company takes a portion of the monthly rent in exchange for this service.

Almost all investors are familiar with investing in rental property. This is not for everyone and before considering this option make sure that you have the money and time to do this correctly. Purchasing a rental property will generally require a 20% down payment to the lender. Also consider the monthly mortgage, insurance costs, maintenance costs and the hassle of dealing with tenants.

The beauty of owning a rental is that the money is leveraged and the tenants pay down the mortgage. This can leave a real estate investor with an excellent long-term investment that makes money month after month, possibly for a lifetime.

More ambitious real estate investors can consider wholesaling or retailing a property. Wholesaling a property involves finding the perfect investment property and flipping it to another investor or buyer. A retailer holds onto a wholesale property and puts in the necessary rehab work in order get it back on the market. Both can be profitable enterprises but carry a certain degree of risk.

Asking questions with these few tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

 

Investor Tips to Determining a Property Value with Ease

Thursday, September 13th, 2012

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Individuals who are looking towards beginning a real estate investment career should carefully analyze houses and know how to accurate determine the property values. Take time to check out houses on the market and practice coming up with a value to see how close you come to the future selling value. Do what the Realtors do; analyze comps, market trends, and take some time to learn what goes into a home inspection so you can become an expert in determining property values.

The first thing that most Realtors do when determining the value of a property is to look at comps. Comps or comparisons take into account all the houses that have sold in the area that are similar to the house being analyzed. This process is more complex than it seems because many houses on the market don’t have a similar comparison.

Unique houses need to be valued based on comps and their special amenities. For instance, a house in neighborhood of similar houses that has an indoor pool is going to be a difficult house to appraise. First off, the right buyer will need to be found who is willing to pay for this amenity. As such, it may be best for beginning real estate investors to stick with houses that are very similar to the others in the area in order to accurately determine the property value.

When looking at investment properties many times a property will have a problem or two. Many beginning investors are looking for this exact property because they believe they can fix it up and get it back on the market quickly. For example, pricing a house that needs new flooring needs to be done accurately. The only way to do this is to get a solid estimate on the cost of the flooring, including labor. Now subtract that cost from the other comps in the area to determine the property value.

Now, if an investor can offer a value that is 15% under this property value and get the owners to go along with it, this may be a property worth investing in. An investor then purchases the property, makes the necessary rehab and gets the property back on the market.

Make sure that you are the only investor on the scene. Don’t get involved in a bidding war with another investor because this will drive the price out of the range that makes it worthwhile. There are plenty of other investment properties on the market so move on, make an accurate property value analysis and obtain a solid investment property.

Asking questions with these few tips in mind will help save real estate investors thousands. For more ideas related to real estate investing, call or visit us a Homevestorsfranchise.com. We are the nation’s number one home buying franchise with over 15 years of experience. Our company has a vast assortment of real estate investment and real estate franchise opportunities available to help you grow your real estate business. Come see us for more information.

 

HomeVestors Understands Beginning Real Estate Investment Strategies

Wednesday, September 12th, 2012

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Beginning real estate investors need to start from the bottom and work up to the advanced real estate investment strategies.

Dallas, Texas HomeVestors is the nation’s number one home buying franchise and has helped real estate investors purchase 50,000 properties over the years.   The company knows that there are many different avenues to success in the real estate investment field.  A beginning real estate investor should start off wholesaling a property, retailing it, or renting it out.  Which technique is best, depends on the investor and the specific situation.

Wholesaling could be the simplest, most logical way to invest in real estate.  It essentially comes down to finding a great deal on a property and purchasing it only to immediately flip it to another investor or interested buyer.  Many of these properties may require a little work to get them back to their optimal market value.  Be certain to market with professional rehabbers in order to secure a quick flip.  Make sure to only deal with investors who have cash or hard money and are willing to close quickly.

Retailing is another option available to investors.  Many people begin their real estate investment career as a retailer because it is a common no nonsense approach to buying and selling.  These investors buy a property with the intention of fixing it and selling it.  This type of project can net some serious money if everything goes as planned.  Inexperience retailers need to understand the necessity of calculating rehab costs properly.  Many under estimate the cost of a job and get in way over their heads.  Make sure to have the capital to ensure completion of the rehab and always have an exit strategy.

Purchasing a property with the intent of renting it out is another commonly used real estate strategy.  This investment strategy is for the long-term investor who understands the value of leveraging other peoples’ money.  A rental investor secures a loan for the balance of the rental and in turn, the tenants pay for the mortgage month after month until the balance reaches zero.  At this point the rental is almost all profit and the investor secures a monthly income for years to come.

Of course there are all sorts of advanced real estate strategies like options and Subject To deals.  It is recommended that a beginning real estate investor start with the time tested strategies of wholesaling, retailing and renting out properties.  This will give the investor an understanding of the game and build a platform of income that will propel them into more advanced real estate investment strategies.

About HomeVestors of America Inc.

Dallas-based HomeVestors of America, Inc. is the largest buyer of houses in the U.S., with 50,000 houses bought since 1996. HomeVestors trains and supports its independently owned and operated franchisees that specialize in buying and rehabbing residential properties.  Most commonly known as the “We Buy Ugly Houses®” company, HomeVestors strives to make a positive impact in each community.  In 2012, for the seventh consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction.  For more information, visit www.HomeVestors.com.