Archive for April, 2013

HomeVestors Knows How To Use the Cash on Cash Investment Formula

Wednesday, April 24th, 2013

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Rental property investors need to focus on the mathematics regarding cash flow when considering buying a rental property.

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 rental property owners need to understand their cash on cash investment and their cash flow. Determining this figure before purchasing a rental property allows investors to look around at different properties and pick the one with the highest cash on cash investment potential. This can categorize rental properties and allow investors to determine which properties are likely to be profitable and which need to be negotiated down before even considering them.

The cash on cash investment formula is quite simple and effective in determining the positive potential of an investment. The expected profit is divided by the cost of the investment and multiplied by 100. This gives us a figure that should at least be 8% in order to even consider investing in a property. Properties in the double digits can greatly reduce the risk and increase the profit potential of a property.

For example, if a rental property investor paid $500,000 for a rental property, they would need to make $40,000 a year in positive cash flow to obtain the magic 8% on their cash on cash investment. Anything greater than $40,000 a year in cash flow puts an investor in a desirable territory.

While the cash on cash investment formula is simple to use, finding the correct numbers to plug into the formula may be challenging. If a previous rental owner has accurate numbers regarding their cash flow, it could greatly alleviate the trouble of trying to estimate how much rent can be charged while taking the cost of maintenance into consideration.

Rental property investors could use the cash on cash investment formula to negotiate with individuals selling rental property, as they could likely relate to these numbers. Some may be willing to consider offers below their asking price in order to sell at a fair price.

Real estate rental property investors who use the cash on cash investment formula are likely to make a logical choice regarding rental properties they are interested in. This formula takes all emotion out of the decision and lets the numbers do all the work. This can greatly expedite the time spent considering which rental property is the best choice and gives an investor an idea of their positive cash flow throughout the term of the investment.

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.

Big Money Is Investing In Single Family Houses – Why Aren’t You?

Wednesday, April 24th, 2013

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In many cases, copying is the sincerest form of flattery and when big real estate companies are investing their resources in something, smart investors follow suit. Following what big businesses do are not usually in the scope of what most investors can accomplish, but in this case, investing in single family houses, is a pursuit most real estate investors can take on.

Huge real estate companies like Black Stone Group and Colony Capital Group have put most of their eggs in the residential sector basket, in hopes of huge gains. This makes sense when considering the prices of some of these properties. These huge companies are able to earn a discount when buying in bulk and typically purchase properties from REO auctions. These companies are not only doing that, but purchasing single family houses from the MLS and local investors, as well.

Most people associate these gigantic corporations with huge commercial complexes and hotels. While many of these companies have focused on this pursuit in the past, their analysts have determined that the money is currently in single family houses. This is where they are placing their bet and investors who jump on board, are likely making a logical choice.

They are purchasing these single family houses for prices that are way, way below market value and putting in the effort to fix them up. They are likely planning to wait for a little while before listing these properties on the market, as they are most likely expecting property values to continue climbing.

Black Stone Group and Colony Capital Group are focusing on single family houses in AZ, CA, FL, GA, NC, and NV. These states were the hardest hit by the market crash and many homes in these states are still under water. These companies are purchasing these homes from the banks and alleviating them of their excess inventory.

In order to have an understanding of the general scale that these real estate companies have pursued, consider that Black Stone Group has purchased 6,500 single family houses valued at $1 billion and Colony Capital Group, 4,000 houses. This is no small undertaking and small time investors are probably asking themselves if there are any properties left.

Real estate investors are lucky because, yes, there are more single family houses on the market that can be purchased for way under market value. An investor, who wishes to pursue this type of property and put in the necessary rehab, can earn a profit. Follow the big real estate companies and take advantage of their market analysis by investing in single family houses.

Asking questions with these 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 – How To Decide On The Right Property?

Wednesday, April 24th, 2013

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Good investors analyze the market and invest their capital in areas that are likely to offer the greatest return on their money, while having the lowest risks. In order to do this, a great deal of research is necessary and investors should always be willing to walk away from a property that doesn’t make the mark. In order to find the right property, be willing to put in the time.

Real estate investing really comes down to research and negotiation. First, research 100 properties and see them before deciding on the top 5. Obviously, most real estate investors don’t put their effort into viewing 100 different properties because this takes a great deal of time. Those investors who are beginning in the field should follow this rule because this first deal will determine if one can take the next step or be doomed from the start.

Real estate investing really comes down to research and negotiation. First, research 100 properties and see them before deciding on the top 5. Obviously, most real estate investors don’t put their effort into viewing 100 different properties because this takes a great deal of time. Those investors who are beginning in the field should follow this rule because this first deal will determine if one can take the next step or be doomed from the start.

At this point, consider moving a bit faster because these 5 properties are likely to move quickly if they have made the cut. When deciding which is the right property to invest in, take time to determine the expected yields it should produce by determining the ROI. Work with sellers who are willing to negotiate and don’t become involved with sellers who aren’t flexible.

If this is the right property, make them an offer that will be able to generate a respectable ROI because the profit a property generates is based on the original selling price. Once a seller agrees to the selling price, terms and conditions, create a professional contract and purchase the property.

Most investors who purchase a property generally choose to leverage their capital by obtaining a loan from the bank. Most banks require 20% down and finance the remaining 80%, giving an investor the ability to pursue the investment.

After finding and financing the right property, the majority of the work has already been done. Investors who wish to flip the property or rent the property can do so while taking advantage of their dedicated research. Don’t leave real estate investing to chance, put in the necessary work in order to be successful.

Asking questions with these 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 The Right Locations Stand To Earn Profits In Real Estate

Wednesday, April 24th, 2013

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In 2013 investors who choose to invest in certain locations are likely to earn profits in real estate. Real estate investing comes down to location and those investors who understand the locations that are bound to be profitable this year stand to earn a great deal. The overall value of the market in these areas is creating investment potential for investors.

Those who earn profits in real estate this year are likely to do it in Tucson, AZ, Austin, TX, or Kansas City, MO. These markets have begun to develop new jobs and have no shortage of individuals who want to purchase houses or rent, giving investors reason to become involved.

Property values in Tucson, AZ fell 31% during the bust, but are now increasing. The mean value for a house located here is $170,000 up 12% from a year ago, indicating a market that is on the rebound. 33% of all sales here are cash sales, meaning that investors have taken note of this market and are pouncing on it.

Tucson, AZ has a large population of renters and investors who purchase apartment complexes stand to do well here. They can purchase these complexes now, while they are still priced low, rent them out and consider selling in the near future for a respectable return on their investment.

Austin, TX is another great city for investors to consider, as it is has a great deal of careers with in the tech sector. This is creating an influx of immigration to the area and giving many individuals the capital to purchase housing. Unemployment is down to 6.3% and is continuing to drop, as jobs continue to pop up. The median value of homes in Austin is $229,500 making it affordable to those with decent careers. In order to earn profits in real estate, investors need to put Austin, TX at the top of their list.

Kansas City, MO is third on the list of cities that allow investors to earn profits in real estate. The median value for housing is $134,950 and has increased 4% over the last year. The overall inventory here is down 21% from last year and will lead to an increase in property values all across the board.

Investors who are looking to earn profits in real estate in 2013 should consider these three markets, as they are increasing in value due to job growth within these regions.

Asking questions with these 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 How To Properly Screen Tenants

Wednesday, April 24th, 2013

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Screening tenants is important for rental property owners who want to ensure that their tenants will pay the rent on time and remain trouble free.

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 rental property owners who take the time to screen tenants generally have fewer problems over the long-term and earn greater profits.

In order to screen tenants, many different parameters can be used. Most rental property owners request a copy of a credit report, a criminal background report and employment history. While these three items can give a rental property owner a fair assessment of a potential tenant, these all cost money and time. Most potential renters expect these three checks and would be surprised if these are not included in the accepting process. This can give potential renters the feeling that an apartment is run professionally and that they won’t have to deal with unruly neighbors.

Rental property owners who use outside companies to screen tenants end up paying a great deal, but can receive many more reports in order to verify a tenant’s records. These include, the credit report, criminal background report, state criminal check, nationwide criminal check, county criminal check, global check, eviction reports, statewide evictions, nationwide evictions, tax return verifications, driver’s license history, employment verification, and social security number verification.

All of these verifications should certainly give a rental property owner a good understanding of whom they are dealing with. Unfortunately, in order to screen tenants on this level,it is likely to cost a great deal. Consider passing the costs down to the tenants themselves, as many already do for obtaining a credit report and criminal background verification.

When a tenant has to pay to have their credit report pulled, they generally think twice about applying and this keeps most bad apples away. Rental properties that don’t pull a credit report are asking for problems from the beginning. These investors who choose not to screen tenants are basically saying that anyone with a down payment and the first month’s rent money are able to call this place home. While this might be acceptable for rental properties located in undesirable locations, it certainly isn’t acceptable in most places.

Those residential property owners who take the time and money to screen tenants make a logical choice that is likely to keep the rent money coming in every month. Show tenants that they are in a group of others who are responsible and like-minded.

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.

HomeVestors Knows That Beginning Investors Need To Watch Out For Common Scams

Wednesday, April 24th, 2013

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Become educated on some common scams in the real estate industry in order to side step any unnecessary 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 that many beginning real estate investors look for help from mentors and some end up getting scammed because they don’t know the industry. It is important for beginning investors to obtain a wealth of knowledge and know the common scams that circulate the industry so they don’t end up becoming a victim.

Knowledge is king in the real estate industry and those that understand what they are getting into don’t get coerced into deals that sound too good to be true. Beginning Investors on the lookout for common scams should stay clear of others who are promising something for nothing.

The most common scam in the industry is the forgery of documents. Beginning investors need to check each document carefully and make sure that the person selling the property is the same person who is on the title. Always hire a title insurance company who can verify that the title is in fact, correct and legal.

Beginning investors who are investing in empty lots in rural areas should make sure they are getting all that is promised. Another common scam involves selling a lot and convincing a buyer that they will be receiving utility service when this is in fact, not true. The seller charges a premium for this false advertisement. Be sure to verify any future utility service with local officials.

Always see the property before buying it. Many investors start their property search online but shouldn’t end it there. After viewing a property online, take a trip to see it in person. A common scam involves putting a fake property online and convincing someone to purchase it. They are then asked to wire the money to a certain location and will in turn mail the keys and title. Obviously, the seller doesn’t end up mailing anything and keeps the money for him or herself.

When securing funding, beginning investors need to find out how long a “fixed rate” mortgage is actually fixed for. Some unscrupulous lenders only have the rate fixed for 30 days and a buyer is astounded by the increase in their mortgage when the second payment is required.

When lenders advertise low rates, find out if they are payment rates or interest rates, as they are completely different. Be sure to understand all the fine print, including the fees for processing the loan.

Beginning investors who can stay away from these common scams should be able to start in the industry without falling prey to scam artists.

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.

HomeVestors Knows That Investors Need To Know The Demographics Of Real Estate

Wednesday, April 24th, 2013

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When considering an investment location, it is important to consider employment and population growth.

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 real estate investors need to understand the demographics of real estate before diving into a deal. They should ask themselves a variety of questions before becoming involved in a certain area and should know a great deal about the area before even considering an investment there.

One of the most important aspects regarding the demographics of real estate is the population flux. Is the area growing in population or shrinking in population? If an area is growing in population, the prices are likely to be on the rise. If an investor can purchase an investment at a good price, they are likely to earn a profit over the long run. Investors must be almost certain that the population will continue its upward trend. Take a look at the industries in the area and decide whether they are likely to be in business for a while or are likely to fizzle out within a couple of years, before considering an investment in this location.

If the population is declining, prices are likely to reflect this trend. When deciding whether to invest in an area like this, look at the long-term picture. Is there hope for this area in the near future? Are any big companies prospecting this area? If this answer is yes, it might be best to purchase a property at near rock bottom prices and hold it for a couple of years. When industry returns to the area, it can be flipped for a profit.

When investing in real estate that is located in city center, consider the demographic of real estate in this area. Many locations within city center tend to become vacant, as people move into the suburbs. On the other hand, some locations within city center are bustling with energy and investors who can get a foothold there, stand to do well.

When considering the demographics of real estate, it all comes down to population growth and employment. As more businesses move into an area, employment grows and in turn, population grows. These people need a location to stay and investors who have staked claim in these areas stand to earn a profit on their research and investment.

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.

HomeVestors Knows That Sequestration May Have An Affect On Real Estate In 2013

Wednesday, April 24th, 2013

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Real estate investors who have been waiting for a deal to be reached on sequestration before getting involved in the market should consider their options.

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 many real estate investors are watching both the real estate market, the overall economy and are waiting for the results of sequestration before deciding whether to enter the market. While the negative potential that sequestration could have upon the real estate industry is closely approaching, investing in real estate in 2013 is still likely to be a good investment decision.

The real estate market is directly tied to the employment market and things have been going well in both markets as of late. There were 100,000 new jobs nationally in February and with the way things are going, the GDP is expected to grow 2.5% this year, adding 1.9 million jobs total. This gives investors something to smile about.

On the other hand, if a favorable deal isn’t met regarding sequestration, the employment market is likely to head in the other direction, along with the real estate market. It is estimated that 750,000 jobs will be lost due to sequestration and that 100 of the largest government contractors will vacate 19 million square feet of office space.

At this point, single-family houses and commercial properties are driving the real estate market upwards. This should continue if a deal is made on sequestration and investors who invest in these two aspects of real estate should do well over the year.

If a deal is not reached on sequestration the overall job market is going to suffer and those who invested in commercial property might end up regretting their decision. Many renters could end up vacating if they are directly affected by sequestration so some thought should be given as to what area of the country to invest in.

Single-family houses will likely remain in demand and those who invest in these should do well throughout 2013 no matter what. Even though the pool of renters who are interested in renting single-family houses might go down, there will still be demand for these houses throughout the United States.

Investors who are sitting on the fence regarding whether to invest in real estate in 2013 may be wise to wait until a deal has been made on sequestration before diving into the market. On the other hand, those who wait too long won’t be able to get their hands on great deals, as they will already be off the market.

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.

Beginning Investors Need To Creatively Target Desperate Sellers

Wednesday, April 24th, 2013

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Everyone in the real estate industry talks about targeting desperate sellers, but where are they exactly and how do we get to them? The simple answer to this is – everywhere, but most beginning investors don’t have clue on where to start. This should be the focal point to any good investment strategy because after these individuals are targeted, the rest of the process is just a numbers game.

First, understand what constitutes a desperate seller and why they want to be relieved of their houses. Either, they can’t pay the mortgage, don’t like their house, have obligations elsewhere, have to pay bills, or don’t use the house. After knowing this, find out the tell tale signs of these desperate sellers and market to them.

Sellers who can’t pay the mortgage usually can’t pay their taxes either. Search through the online tax record database for those who haven’t paid their taxes. The longer the period of non-payment, the better, as an investor can use this as a bargaining chip. After creating a long list of individuals who haven’t paid their taxes, send them all a marketing letter that explains of your interest in purchasing houses.

Those who have obligations elsewhere or don’t use the house may just want to be relieved of their house as painlessly as possible. Often times these individuals received their house through inheritance. Many times they don’t want to deal with the extra hassle of having to keep up the house,and don’t want to deal with the hassle of selling it in the traditional way, either. They may not know it, but they are looking for someone to purchase their house and are likely interested in working with the first investor who comes their way. In order to find these people look through the probate records and write letters to these individuals, offering to buy their house for cash.

Look for vacant houses in the area; many times their owners are just looking for a way out of their property. Many of these individuals are toying with the idea of selling their home but just haven’t got to it yet. Investors who find these sellers can get them back on track and give them an easy way to get rid of their property. These individuals can again be found through tax records and sent a marketing letter.

Follow up with letters month after month because most people need to be targeted more then once before they decide to take action. Allow individuals to be able to initiate contact in many different ways so it is convenient for them. Make a nice looking website where they can go for more information and give them a phone number. If these three types of desperate sellers are pursued, there is almost no limit to the amount of deals that can be achieved.

Asking questions with these 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 – Focus On Creative Real Estate Investments

Wednesday, April 24th, 2013

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Creative real estate investments allow investors to use their wealth of knowledge and obtain deals that could never be formed the traditional way. In order to have the opportunity to get involved with creative real estate it is imperative that one markets to motivated sellers. These motivated sellers are looking for a quick way out their house and investors who have the education can work with these individuals.

The problem with traditional real estate deals is that they require a great deal of capital to perform. Even investors who are leveraging money still have to fund about 20% of the sale. Traditional real estate investments are appropriate for long-term deals, like investing in commercial property. Creative real estate investments on the other hand, require education and convincing.

Real estate investors who wish to pursue creative real estate deals need to understand what these entail and how they can be utilized. After finding a desperate seller, ask them if they would be willing to go through with a deal that allows one to not have to invest any cash or credit.

Investors should also build up a great deal of contacts so if a property is offered, they are able to flip it almost immediately to an interested investor. An understanding of wholesaling properties is mandatory. Consider using both the assignment of contract and the double closing method. With this, very little money is required and a wholesaler is investing sweat equity only. Using this creative real estate method allows one to be able to put a property under contract and flip it to another investor, securing a profit on the transaction.

Investors should also be well versed in conditions of seller financing. This could allow an investor to create and obtain a property on their terms. As such, they could bypass working with the banks and determine what conditions work best for them and a seller. This can open the doors to a whole bunch of different potential deals that investors need to become educated on, as well.

Creative real estate deals are necessary for investors who don’t have a great deal of capital. It requires an education to understand how these deals work so that they can be explained easily to someone else, in this case a seller. Negotiation skills are an absolute must and an investor must be able to convince the other party of the deal. This is why it is necessary to find sellers who are extremely motivated, as it is then in their best interest to consider creative selling methods because they no longer want to deal with the property.

Asking questions with these 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.