Archive for September, 2012

Investor Tips to Real Estate Retirement Investing

Monday, September 10th, 2012

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Individuals who are looking towards retirement should consider securing their future by investing in a rental property. Rental properties are ideal investment properties for people who are looking for steady income over the course of their golden years. Make sure and take into account all of the details when dealing with a rental. Be sure to do research on how to get the best mortgage rate, how to use your IRA to fund your investment, and all the expenses that go along with an investment in rental property.

Look for a rental property three years before considering retirement. It may be best to get into the business around this time because many mortgage companies only give mortgages to people who are employed and have been employed with the same employer for the past two years. In order to get the best interest rate on a mortgage it may be best to put 30% down on the property.

Consider using the money in your IRA to pay for the down payment and mortgage payments. This will enable an investor to avoid taxes on the profits brought in from the rental. All the profits from the rental will go right back into the IRA fund. It is important to aim for an income rate at 8% when beginning in the rental industry. Make sure and do the math and decide if this goal can be reached.

When calculating the costs involved in a owning a rental property do the calculations assuming a 90% occupancy rate. Make sure that the rental is located in an area where this goal is feasible. Consult with a CPA, real estate attorney and an insurance agent so you know how all these expenses are going to add up.

When going over these numbers know how much the monthly mortgage payment, the insurance, the maintenance, and the management fees are going to be. The management fee is generally going to cost about 10% of the money the property takes in. Decide if this is acceptable and consider running property yourself, if you are up to it.

A rental owner can claim depreciation and deduct it on their federal income taxes. Make sure and discuss this and other tax issues with a tax advisor.

All in all, investing in a rental property is a great long-term investment for investors who are considering retirement. You may look back and wonder why you didn’t get involved in the real estate industry sooner.

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 Creating an Exit Strategy

Thursday, September 6th, 2012

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When getting into real estate investing, always know how you are going to get out and don’t get stuck in a property with no way to recoup your investment. Consider the exit strategy before purchasing a property and rest assured that you made the correct decision. Purchase property where people are currently buying up property in order to get out fast, if you need to. Lease options, owner financing, wholesaling a property, retailing a property, or renting a property are all viable exit strategies and need to planned accordingly.

The most common exit strategies are wholesaling and retailing because they allow an investor to get in and out rather quickly. If wholesaling is the goal, make sure to consider how much time it will take to get the property flipped. Have many retailers lined up and get the property into their hands fast.

Retailing is another good exit strategy and while it takes more time then wholesaling, it can net more profit as well. Be sure to accurately calculate the amount of time and money it will take to get this property back on the market. Consider hiring contractors because this will generally reduce the amount of time the entire process will take. Make sure that the house is located in an area where selling the property won’t be a hassle.

If for some reason the house doesn’t sell, consider renting, owner financing and rent to own exit strategies. These are suited for the long-term investor and many retailers don’t want to end up in this position. The good news is that they are making money and covering their investment, an investment that will pay out a great deal more in the long-term.

When offering owner financing and rent to own options consider getting a large down payment. Make sure to charge a bit more than the price of the house and make sure that the monthly payments have interest rates around 7%-9%. If you don’t want to sit on this investment long term, consider utilizing an early balloon payment date when the entire balance needs to be paid off.

Investors who consider renting out a property as their exit strategy stand to make the most money over the long term. If you are a fast paced investor that gets stuck into the slow pace rental industry, there were some calculation errors with your exit strategy. Don’t get stuck with an investment you don’t want, plan according and do research before diving into an investment.

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 Rent To Own Properties

Thursday, September 6th, 2012

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Rent to own properties also known as lease purchase options are a hot commodity right now because many people don’t have access to typical lending solutions. Many of these people don’t want to continue renting and would prefer to step in to the shoes of a homeowner. Real estate investors who work with these people make a decent profit and help others obtain the dream of homeownership.

Many sellers are faced with a serious dilemma because they are not able to compete with the sales prices being offered by foreclosed and short sale homes. As a buyer why would I pay market value for a house, when I can get another one for way below market value? The only way I would purchase a house for market value is if I could get that house in a rent to own option.

Many people aren’t qualified to receive a mortgage but have the capital to fund a down payment and pay for the monthly payments. Sellers who aren’t able to sell their house in the standard way are offered a unique way to sell their home to someone who can’t qualify for a bank issued loan.

This is where you, the investor comes in. Just find a way to match these people up and get a contract in writing with the seller regarding your fee. Most of these rent to own properties require a down payment of $5000-$10,000. Make sure the contract states that you get a portion of this down payment.

In this case, no money is invested and you are simply playing the middleman. Understand that most of these sellers have very little idea of what a lease purchase option is so it is your job to educate them. Take a look through the MLS and FSBOs to find houses that have been on the market for a long time. Many of these sellers are just looking for a way sell their house and any option works at this point in time.

Next set up a general ad in the paper that advertises rent to own properties and qualify the people that respond by making sure that they can put down a respectable down payment. Now just match these individuals up and collect the profit.

Working with rent to own properties could be the easiest way to profit in the real estate business. These purchase lease options take very little risk and very little up front capital to perform.

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 Wholesale Properties Can Make Profits Fast

Wednesday, September 5th, 2012

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When getting into real estate investing you might as well just dive into the deep end and learn to swim. Real estate investors who invest in wholesale properties do just that so understand how to do it properly and remain afloat. Wholesaling is certainly exciting because it can make money fast, doesn’t require a whole lot of upfront money, has little risk if done correctly and doesn’t require years of expertise. It just takes some research to find that perfect property and a buyer.

This process goes smoothly when you take a proactive stance throughout the entire process. Make sure to line up everything and don’t expect that anyone will follow through on their word. Make sure that all the contracts are written by an attorney and have the whole process mediated through them.

Searching for the perfect investment property will require talking to many FSBOs and searching through the MLS, if it is available to you. When you have found the right property keep the buyer you plan to flip the property to, in mind. Before making an offer, consider the money needed for repairs, holding costs, closing costs, and the profit margin for both you and the rehabber. Make the calculations and make sure to give yourself a $5000-$10,000 profit margin for your work.

Assuming that the offer is accepted, sign the contract and put down a monetary deposit. Make sure to hire an attorney and title company. Have them verify that the title is correct and legal. Set up a settlement date and be ready to settle quickly.

Now find an interested buyer. It may not be easy the first time but after a few deals you should have built up a quality contact list. Make sure to network with rehabbers and investors because you want to flip this property as fast as possible. Place an ad in the newspaper and online about the investment property to find the right buyer.

Make sure to qualify potential buyers and ensure that they have cash or credit to close on the sale. After you have proof of their financial competency, sign a contract with they buyer and collect a deposit.

Give the title company both the original contract from the original seller and the contract just received from the new buyer. Schedule a settlement date and return on that date to pick up the check. Flipping wholesale properties can bring great wealth to a beginning investor.

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.

 

Add REITs to Your Investment Portfolio

Wednesday, September 5th, 2012

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Real estate investing comes in all different risk to reward ratios. Real estate investments trusts (REIT) offer some of the lowest risks in the investing industry. A REIT contains a group of 100 or more investors and the shares in the company are divided between the investors rather equally. This ensures that no one party becomes a shareholder with extreme dominance. The company pays out 90% of their profits in cash dividends and investors can earn tax-free profits by sending these dividends directly into a retirement IRA. REITs are a sure bet and are best suited for an investor with the slow yet steady approach to investing.

A real estate investments trust was first formed in 1960 in order to give common Americans access to ownership in grand assets. They create a balance of power between the real estate tycoons and the small time investor. These small time investors invest in these stocks and share in the profits that the company generates.

Real estate investors can invest in REITs and take little risks while securing profits. Many investors consider them only for people who are saving for retirement due to their slow yet steady earnings. During the economic downturn, many investors are placing their funds into REITs to obtain a sense of financial security. Most average REITs are still earning profits of around 10%.

Investors who invest in REITs don’t have to deal with tenants or property maintenance. Investors don’t have to borrow money to secure mortgaged property and don’t have to worry about paying monthly mortgage payments. This is one of the easiest ways to invest in real estate. Investors don’t have to worry about getting in over their heads or taking outlandish financial risks, they invest what they want and rake in profits.

Investors are encouraged to invest in a variety of different REITs and become diversified. There are REITs in residential, retail, hotels, office, industrial and self-storage. Purchase shares in each one of these options and take comfort in being diversified. Of these options, self-storage is extremely recession proof so if investment safety is of concern, consider this first.

Real estate investment trusts are perfectly suited for individuals who are saving for retirement due to the long-term approach they provide. All profits from the cash dividend can be placed into a retirement IRA, effectively sheltering an investor from taxes.

In a volatile investment market, REITs are the eye of the storm. Consider investing a portion of your portfolio in the security of a REIT. Make sure to diversify through out the different REITs and weather the current economic storm.

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 Finding Deals In a Buyer’s Market

Tuesday, September 4th, 2012

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Being a real estate investor at the current time gives one a great deal of leverage over sellers. Take full advantage of this fact by following a few tips. First off, stay up to date on all the recent changes and focus your interest on houses that have been on the market a while. Get sellers to offer you credit for remodeling and get the seller to pay for closing costs. Get a home warranty and a few extras thrown into the deal. Make sure to create urgency with a short acceptance time frame. Desperate sellers will agree to almost any deal.

In order to be armed with the most up to date listings in the area, opt-in or have your agent opt you in to the MLS email list and receive information as quick as possible. This can save you time and hassle, while keeping you on even footing with Realtors.

Make a point to check out houses that have recently been reduced in price. These individuals are generally desperate sellers and may be willing to accept an offer even further below their new asking price. Another good idea is to check out houses that have been on the market for a while. These listings have gone stagnant and you may be the first person they talk to in weeks.

If there is a property that strikes your interest make sure to find out about other property sales with in the area. This should give you an idea of what the value is in that area. If sellers are willing to take an offer below these values, it may be in your favor to purchase it.

Have the buyer set you up with a credit for items that need to be remodeled or fixed. They should deduct the cost and labor from their asking price. Using this method pays for the rehab necessary to get the house back on the market.

Convince the buyer to pay for closing costs because saving money on these fees can really make a difference in the bottom line. Not only that but have a buyer throw in a home warranty that covers the plumbing and electric. This greatly minimizes your risks when investing in this property.

If you want the pool table in the basement thrown into the deal, ask for it. Explain how much effort they will save by not having to move it.

Make sure to make the offer and allow a short window of time for the buyer to accept your offer. A period of 24 hours is generally sufficient. Don’t let them think it over too long because they may think themselves out of selling.

Follow these tips and set the value where you want to set it. There are desperate sellers out there who will have little choice but to take the offer you give them.

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.