Posts Tagged ‘bad real estate investments’

HomeVestors Knows How To Identify Bad Real Estate Investments

Monday, September 22nd, 2014

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Investors who are able to identify bad real estate investments should avoid them and stick with positive cash flow properties. 

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 one of the biggest challenges facing a new investor is how to identify bad real estate investments.  Less experienced investors are prone to ending up with losing investments, due to limited knowledgeregarding the factors that signify a bad investment.  The first thing that a new investor must learn is how to stay far away from problem real estate investments.

A new investor should begin by focusing on the basics of bad real estate investments and avoid them.  An ideal property is one that generates cash flow, so that an investor can benefit from a steady stream of income.  Many new investors want to buy and flip property, as the appeal of fast money is desirable, but new investors should consider a more stable type of real estate venture.

The right rental property could produce constant cash flow for a new investor.  In order to stay away from bad real estate investments, a new investor should thoroughly research the cash flow of a property and ensure that it is positive.  Many new investors take a seller at their word with regards to a property’s profitability.  It is important to remember that a seller is selling a property for a reason, often due to the fact that they are losing money.  Be certain to obtain accurate numbers in order to properly calculate potential cash flow by asking a seller to see their tax receipts.  A seller has little reason to doctor these numbers, as it would result in higher taxes.  Utilizing these receipts can greatly assist an investor from making a bad investment.

Prior to purchasing a property, an investor must ensure that a property is in good condition.  A property should be scrutinized before an investor should consider making a deal.  Those who are not thorough when investigating a property can find themselves with bad real estate investments.  An investor should hire a professional inspector to go through a property and take note of the problem areas.  Having carefully checked a property, an investor can use the information to bargain with a seller, potentially being able to purchase a property for below the asking price.

Real estate investmentsare a great way to earn money.  If an investor takes the time to ensure that they are purchasing quality properties, they will be able to avoid bad real estate investments.

Stay Away From Bad Real Estate Investments

Wednesday, June 25th, 2014

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Beginning investors need to understand how to distinguish and stay away from bad real estate investments.  While many of the factors that signify a bad investment will be obvious to experienced real estate investors, beginners are susceptible to ending up with an investment that turns into a losing matter.

In order for beginning real estate investors to stay away from bad real estate investments, they should simply focus on the basics.  Ideally, look for a property that generates cash flow in order to capitalize on a steady stream of income.  Many beginners want to buy and flip property or rehab property.  While both of these real estate niches can be extremely lucrative, beginners should focus on rental property, if they want to avoid a large number of errors.

A beginning real estate investor who has decided that they want to purchase a cash flow investment should make sure that they are purchasing the right rental property.  Investors who are looking to stay away from bad real estate investments should make sure that the cash flow on a certain property is positive.  Many beginning investors take a seller at their word when discussing the profitability of a property.  Remember, these sellers are selling their property for a reason, often times due to the fact that they are losing money.

When negotiating with a seller of a rental property, be certain to obtain accurate numbers in order to properly use cash flow calculations.  The best way to do this is to ask a seller for their tax receipts.  Sellers will have little use for doctoring these numbers, as it would result in paying higher taxes.  Investors who are able to obtain these tax receipts should use these numbers when calculating cash flow in order to stay away from bad real estate investments.

Before deciding on purchasing a property, beginning investors need to properly analyze it in order to make sure that it is in decent shape.  Investors who look at properties briefly and decide that they are in good condition will likely end up with a number of bad real estate investments.  Look at a property with scrutiny before even considering it.  After this, hire a professional inspector to go through a property and point out any problem areas.  This will give an investor negotiating power if they are looking to obtain a deal or give them a reason to move onto the next property.

Beginning investors who are able to stay away from bad real estate investments allow themselves the potential to earn a profit in the business.

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.

Avoid Bad Real Estate Investments

Tuesday, May 13th, 2014

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Real estate investors who understand how to avoid bad real estate investments should be able to move forward with success.  Generally, any real estate investment that is based on speculation should be avoided.  Ideally, any real estate investment will increase in value, but those who have cash flow investments are able to earn equity in their investment, while leveraging capital.

Investors should be able to avoid bad real estate investments if they choose to invest in cash flow properties in a growing area.  Since rental property has been the staple of the real estate industry, choosing to join this niche is a great idea.  Look for areas of the country that are growing in size due to a strong economic sector and property values that are just beginning to escalate.

Investors who want to avoid bad real estate investments shouldn’t purchase raw land with the intention of reselling it at a profit.  Again, this is another speculative investment that may or may not work out.  The holding period on this type of investment could measure in decades and an investor isn’t able to earn cash flow throughout this time frame.  While an investor could earn a great deal when they sell this land, having funds tied up in this investment for a long time period is generally a bad idea.

While it is advised to invest in rental property, rentals in a high crime, high vacancy area is generally considered a bad real estate investment.  While the prices on such properties are attractive, they generally aren’t worth the risk.  Investors who are looking at an extremely high potential cap rate often get caught dreaming about the potential profits they could make without giving enough thought to the amount of problems they are going to have to deal with.

When investing in rental property, know the true cash flow and have a good understanding of the price of comparables.  Investors should never take a seller on their word when it comes to the amount of cash flow they are receiving.  Ideally, an investor should ask a seller for their tax returns in order to have a good understanding of the amount of positive and negative cash flow they are going to be dealing with.

Investors need to understand the price of comparables in the area in order to avoid bad real estate investments.  In this way, an investor can properly negotiate with sellers and reach an agreement with them that is bound to be profitable.

Investors who avoid bad real estate investments should be able to find an investment that turns out to be profitable.

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.