Posts Tagged ‘Estate’

Advantages to Real Estate Flipping

Saturday, August 21st, 2010

The most obvious advantage to flipping your real estate property is obviously the profit. Profit is the most tangible benefit to flipping real estate as a the profit can be sizable and quick if you can turn the property around quickly. There are definitely risks associated with flipping real estate. Any venture that promises high profits also comes with a sizable level of risk. Profits are not the only benefit associated with flipping your real estate property, although, this is the one many investors are concentrated on when they consider getting into the field of real estate investment flipping.

Let’s discuss the profit first. Most people decide to start flipping real estate because of the potential profit. You will put in a lot of long hours and you will be working really hard. You don’t want to get into this kind of work if you are just looking for an excuse to get your hands dirty. You will be working incredibly hard and will be exhausted at the end of each day. But once you have put in all of your hard work and you place the house on the market, and successfully complete the sale, you will find that the work you put into it is definitely worth the profit you will walk away with.

Even when the situation doesn’t work out exactly as you planned it a decent investor can still turn their work into a successful flip and make money. This is another advantage of getting into flipping real estate. If you are unable to flip the property, you could still hold the property as a rental or lease it to someone for a period of time. While you will not make the same level of money you would earn on a direct flip, it can keep you from completely losing out and ruining yourself financially. The fact that you have some options on what to do with your property at the end of a flip is another advantage to this line of work. There are few investment opportunities which give you the opportunity to rescue yourself like real estate does.

Another advantage to this line of work is that you are essentially your own boss. No need to worry about clocking in each day or the amount of overtime you might have to put in, although, there will probably be overtime associated with flipping houses. However, if you are not disciplined enough to schedule yourself and complete the work, then this is the wrong job for you. There has never been a better time to invest in your future, study the market and make smart investments, you will be glad you did in the years to come.

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Real Estate Investing With a Green Twist!

Wednesday, August 11th, 2010

What? You are still stuck trying to tie home buyers with home sellers, or land owners to land buyers? Shame, shame! You are missing out on one of the biggest booming real estate investments in this century, possibly in our lifetimes!

Green Real Estate Investments! That’s where the next generations of people are going to go! What exactly do I mean?

We all know how the housing market works. We all know how traditional Real Estate buying and selling works. But, what if whole communities, like a sub-division of sorts were sold all at once, Green Communities? How would you fare as a Real Estate Agent? Say, if you could show a Land Owner a way that he or she could make a permanent monthly income from the lease of their land and you could show a way that home Owner’s could own their own home in less than ten years–what do you think the potential would be?

There’s a growing trend out there–one that involves renewable energy. Being self sufficient, being independent, being financially free.

Remember the way a house was sold fifty years ago? Well, probably not, heck I don’t even remember it, but I do remember the tailing sales pitch that continued on in the 70′s, 80′s, and even 90′s before the big housing boom and bust. Remember it went something like this, “Buy your home, because renting is a waste of money!”, “Buy your home, it’s the quickest way to financial freedom, owning your own home gives you freedom!” Slogans along those lines, remember? Well, the reality of these slogans coming true for the average Home Owner was slim to zero. First of all MOST first time Home Owner’s were talked into 30 year loans, first mistake they made and the Real Estate Agencies made. The Bank’s fared great with this concept for many years (approximately 30+ years), well they fared well until the housing bust, massive foreclosures occurred. This should be a WAKE UP CALL to everyone in the housing, real estate and banking industry. The BIG QUESTION everyone of these people should be asking themselves is “Why?”. Why did this happen? If WE can answer that question then we can avoid the same mistakes in years to come right?

That’s exactly what many Home Owner’s asked themselves as they filed bankruptcy and went into foreclosure. They asked, “WHY?”.

You know it use to be that when someone went into foreclosure it was because they had fallen onto hard times, lost the bread winner of the family, or were just plain lazy. It was not very socially acceptable to lose a house. In-fact, it was down-right embarrassing!

But, nowadays–people feel sorry and try to help those that are experiencing such an awful thing–things are changing in our society. People are beginning to look for a more solid way of owning a home, being able to raise their families safely, in a healthy environment, where they can be a part of raising their children instead of a Day Care center or babysitter. People want more room to breath and be themselves, they are getting sick of the rat race type of living. Get up, go to work, go home, live for a few hours, go to bed, get up, go to work, and back around to the same old thing, over and over, and over again! At the end of the tread-mill what do they end up with? Paying taxes, insurance and really NOT owning anything because they still have a mortgage on their home, their vehicle’s are getting older and they have to run faster to try and keep up with the depreciation of everything they own. Lessons of our not to distant past have been learned by some, and should be learned by EVERYONE!

The past way of developing Real Estate has slipped, and is NOT as solid as it use to be! We should listen to our past to avoid the same mistakes in our future.

Now, for the first time in history, Real Estate is making a full circle. What I mean by that statement is Real Estate Investing is going back to the way it use to be when George Washington was alive, it wasn’t simply an investment, it was a means of living and raising a family. Look all around you, what do you see? Doesn’t matter where you live at you will find land owned by someone that is just sitting there–collecting dust so to speak. They are doing nothing with it–sure some of this land may be in CRP or other Government programs, and it’s there for a good reason–the Land Owner’s don’t want to just pay taxes on the land without getting something back, and with lack of knowing what else to do with the property they put it into these programs. Well, guess what, with the information in this article YOU as a Real Estate Agent, or Land Owner, or Home Buyer will be armed with another way that a Land Owner, Home Buyer or Real Estate Agency can produce and income and/or own a home in less than ten years!

Imagine, if you will, back when George Washington built his home. Did he build it all by himself? Probably not, he had help from other people that were going to live on his land and in turn he helped them build their homes also and they would work on his ‘plantation’ as they called, a ‘farm or ranch’ now as it is called, and some places back East and in the South still call their parcels of land ‘plantations’, but the point being here, the people who were going to live in these homes–they were an instrumental part in developing and building the homes. They took raw material and THEY built them. They didn’t hire a Construction Company to do this–they did the work.

If you are a Land Owner, you can be your own General Contractor. And, if you are a prospective Home Owner, YOU can be your own General Contractor and YOU can be very instrumental in building your own home for way cheaper than if you hired everything out. Did you know that a General Contractor tacks on anywhere from 10 to 40% onto the actual cost of building a home? Most people don’t have a clue. So, being a General of your own project will save you thousands of dollars right off the bat! Now, the City and County Inspectors will want everything from blueprints to sub-Contractor’s names and license numbers, like the Plumber, the Electrician, the Concrete Company, etc. But, what-if you had a group of people that built these homes at cost and they were Plumber’s, Electrician’s, and Concrete men/women? What-if they were going to live on this land? What-if they simply helped each other out–at NO COST? They did it to cut the cost of the home down and to be able to pay it off in a shorter amount of time? Now, what-if this group of people went even further than that? What-if, they took their talents, knowledge, crafts, and hobbies to the outside world and sold them at whatever people would pay? What-if the Land Owner agreed to these activities on his land for a piece of the action? A land lease? Now, you are probably starting to see a bigger picture–one that can and will change the way Real Estate, Home Buyer’s and Land Owner’s do business together.

It’s a better fit, with less risks from every party involved. Why, with the rising taxes (to pay for the none-ending bail-outs that occurred and will continue), the rising costs of labor due to rising taxes and rising insurance cost, thus causing the cost of building a house to go up, this idea that is growing is very appealing to ALL involved, don’t you think?

The time in history has come when major shifts in the way people live their lives will change the way people buy homes, cars, food, clothing, the necessities. Green Living is here, here to stay and it comes in many different forms–this is just one form–Green Real Estate Buying and Selling!

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Real Estate Investment Precautions

Monday, June 21st, 2010

Arizona always has been very popular for the real estate investor. Canadian investors are having a tremendous impact on our current market. The influx of distressed properties, including short sales and REO’s, are attracting investors by the thousands. There are some precautions every investor should heed to prior to investing in any real estate venture.

Do not go it alone. Educating yourself as much as possible is always encouraged. Each State has different laws and every market is different than another. Hiring a real estate professional who works in the market full-time is a real plus. You should consider hiring a real estate attorney and CPA for concerns outside the boundaries of a real estate agent. Investing with the help of these consultants could save your thousands of dollars in your investment strategy.

Patience is your best virtue, especially in today’s market. It can take months to get an accepted contract from the seller or bank. If you make an offer on a property that appears to be a great bargain, plan on waiting it out. Impatience could cause you to lose that great investment.

Be sure to work with an exclusive buyer’s agent. One of their fiduciary duties is to make sure you get the best possible price. We never want to overpay for property. On the flip side of the coin, if we get greedy and make too low an offer, we could lose a potentially great investment, even at a higher price. Another factor to consider is the fix-up or repair cost. If you underestimate these costs it could eliminate your equity rather quickly.

A fair warning to investors is “do not believe everything you hear”. There are no get rich quick schemes. Investing in real estate costs money and requires patience. If these decisions were quick and easy, everyone would be rich and the economy would be booming.

Once you have located some good investments, there will be some homework on your part. First you will need to determine an offer price. The condition of the property will also play a part in determining the price you are willing to offer. Miscalculating repair costs could easily eat into any profits. If you plan on turning around quickly and re-selling the property, be sure the home falls within all the guidelines with the current laws and the Landlord Tenant Act. An unexpected delay could cost you more out of pocket expense.

The oxygen tube to survival in real estate investing is cash flow. Successful investing requires a steady flow of money, purchasing below market properties, and lots of stamina. Be sure you have several resources available at your immediate disposal. This will allow you to make ongoing offers while waiting for responses on prior offers. If you end up short of funds, you will end up at the short end of the “deal”.

These precautions do not require a rocket scientist. Explore all your options with careful diligence and patience and you will come out a winner nearly every time.

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Who Controls the Real Estate Process?

Saturday, June 12th, 2010

Let’s narrow that definition down a bit by taking a look at the components. Real Estate markets usually segment into commercial, industrial, new home construction, residential resale, leasing, vacation destinations and time share. These broad categories identify specific market segments with each having a unique group of participants. Conceptually, when we talk about the real estate market in the broadest sense, it includes all of these and other uniquely identifiable business models that support and enable the process.

Parallel business models that take part in the process are: Mortgage & Financing, Title and Escrow services and a broad category of additional providers called Ancillary Services. Ancillary Services include: homeowner insurance products, flood insurance, tax certification, home owners warranty (HOW), legal services and documentation, home improvement and repair, painting, heating and air conditioning (HVAC) landscaping, appliances, property and mechanical inspection, municipal utility districts (MUDS), home owners associations, notice to the public – I’m running out of breath. You get the idea. Improved real estate is a complex animal, and there are many participants that comprise the process by which real estate is bought, sold, financed, transferred and ultimately occupied.

In looking for the “who” or “what” that exercises control of the industry; we should consider the role of government regulatory or quasi-governmental entities. Fannie Mae and Freddie Mack were created to stimulate and control the flow of mortgage financing dollars and to provide stability within the mortgage industry. Oops! Ginny Mae guarantees the timely repayment to the investor on loans that it guarantees. These guarantees are provided through Mortgage Backed Securities (MBS) or pools of loans that contain VA and FHA originated mortgages. The Department of Housing and Urban Development (HUD) provides regulatory oversight, and the Treasury provides an occasional bail out. This group of entities is introduced because they have certain powers and influence over technical, legal and procedural aspects of the industry. They do not control the “how” things are done within the process. The private sector determines “how” things are done.

Any control or “ownership” of this market then will exist within the private sector. Identifying the “who” (forgive me Dr. Seuss) can be done intuitively. The components of the broad real estate industry fit more or less into four primary areas. Let’s call them:

1. New Construction

· Commercial

· Industrial

· Single Family Residential

· Multifamily

· Pre-fabricated Structures

2. Resale

· Existing Buildings

· Existing Homes

· Other

3. Mortgage and Financing

· Construction Financing

· Mortgage Financing

· Refinancing

4. Title, Escrow and Ancillary Services

· Title Insurance Companies

· Title Insurance and Escrow Agents

· Legal and Documentation

· Recordation or Registration

· All Ancillary Services

These four categories are industries or business models within the real estate game. The major companies that operate within these categories would have insight and knowledge as to how to connect the dots and to accomplish the transaction. Each of them, in turn, exercises certain control or influence over their part of the process. There are multiple large players in each of these arenas, and they compete aggressively. There exists no such thing as an industry accepted solution that defines “how” the component business models integrate, but there should be. The level of redundancies and inefficiencies keep the process paper bound, disparate and errors are often time consuming to correct. The labor intensity of the process alone makes it more expensive and requires more management. A seamlessly integrated solution can change all that, and as a byproduct can achieve what others cannot – a commoditization of the real estate market.

The terms “transaction coordination,” “transaction facilitation,” and “transaction integration” were coined along with an effort to streamline and to integrate this process. This was an ill fated attempt to gain some level of control over the process. Working to gain an edge, each player offers partial solutions toward an industry standard. These solutions are often tied to their specific software architecture with bridges that invite their customers and agents to participate. They are not comprehensive, do not reach a large enough cross section of the market, and they do not provide an acceptable global solution.

Homebuilders are focused on competing with other home builders; realtors compete with other realtors; mortgage lenders compete with other mortgage lenders and competition is intense between the title and escrow providers. Should one player come up with a solution that improves the process, they would want it to be proprietary. Competitors would be reluctant to adopt it, and would not constitute a solution.

Fannie, Freddie, Ginny, HUD and any governmental entity has a different mission. A concept age visionary will be the one to combine the attributes that provide a more global solution, and in the doing of it, ownership of the thread and commoditization of real estate can be created. The right platform will benefit all participants. The idea is to facilitate the process to the level that its use will be natural, almost viral. By not using it, you are opting out. Soft Sell has the concept, vision, and the knowledge to create this platform.

With the right development partner, this platform and solution can be brought to market in real time. As the real estate and financial markets make a sustained recovery, Soft Sells solution would be in place to provide the structure for revolutionary change. As a side note, Fannie, Freddie and virtually every large bank has a portfolio of short sales and foreclosures that will continue to grow. It will be several years before these are recycled. Soft Sell would be an ideal platform for managing these assets through the process.

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All About Property Investment Advice

Thursday, April 22nd, 2010

You would be much delighted if investment of your hard earned money pays off. A sound planning is essential while investing your money in the real estate because of the ups and downs in the market. It thus becomes necessary to get sound property investment advice before you plan to investment in the real estate. You need to take into account various factors like rising prices in the market, shortage of rental properties, demand for properties in a specific location and more before devising your investment plan.

Planning

You should study and monitor the market with utmost care as it will help you in understanding the position and direction of prices in the properties market. Understanding this is very crucial as the prices vary consistently. It will also help you to estimate the actual value of proposed property investment by monitoring the market. Apart from that, you also get an idea on the future of the investment and mortgage dealings.

Various Aspects of Investment

When you wish to invest in a property, there are certain peripheral expenses than the actual cost. Real estate investment gets taxed according to its value. This is over and above the money spent for the maintaining and repairing the property. You will have to take into account all these factors when you actually project the incomes and resale value for the proposed property. Positive or negative gearing means the profits or the loss incurred from the investment. The additional income also gets taxed while the deductions are from the surplus amount and not the bare minimum amount.

Multitask with Equity

You can arrange sufficient capital for your new investment from the real estate equity which you own already, which is advisable instead of going for a financial assistance from a bank. This method is an ideal way to start your new investment. But you have to allocate only certain percentage of the price for new investment if there is no problem in repayment.

Identify and Pool your resources

Quite often, it becomes difficult for a new investor to completely own a property with his money. It is not possible always to fund for the entire investment from your pocket as most are common investors. Hence, using the collective property deal is a better and wise idea. Identify likeminded friends, family, relatives or colleagues and pool your resources in order to fund the investment in a new property. But ensure to make an agreement among your partners regarding the method of sharing the benefits and losses, so that there would not be any hassles in the future. It is advisable to go for a legal agreement depicting the proportion of investment and sharing methodology to prevent problems. Sharing of benefits or liabilities is generally proportional to the investment ratio.

Help from Professionals

A professional counselor or a real estate agent can provide you the required Property investment advice to plan your investment methodology. They will also assist in assessing the scope and future value of your investment as they have more knowledge about the market.

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