Real Estate Genius Investment Software Blog

By Virginia Wherland

Investing in real estate can be one of the most profitable investments around. Whether the investment makes you money through resale or through rental, it can be very lucrative. But it isn’t without its challenges, and a big investment can also mean a big loss. However there are a few simple ways to play it smart.

Investing in real estate for re-sale is similar to how people buy stocks and bonds. There is a risk involved. This type of investment requires a good sense of timing, and also a keen eye for trends and good bargains. The goal is to buy low and sell high. Investing for resale can mean buying foreclosed properties at a discounted rate, then fixing them up or just waiting until the market is a little better, and then selling them for far more money. Oftentimes, the money earned from one sale is used to buy another property. Having fluid assets allows one to buy a deal whenever it comes up. The key to success with this investing is truly timing. As a general rule, the longer you can afford to hang on to a property, the more money you can earn when you sell it. For while the market has constant ups and downs, these are all, baring any major disasters, set within a generally constant movement upwards. So keeping your investment property for at least ten years is a good rule of thumb for earning a nice profit. That doesn’t mean it can hurt you if you find yourself the owner of a super hot piece of real estate in a total sellers market. If you can make a good profit sooner, do it, but for most investments, the longer you sit, the more you’ll earn.

This brings us to the next way of investing, the way that makes a real estate investment at least pay for itself, and that is renting your property. Ideally, this can earn you a good income while you wait to sell for a profit, so it can really be a win/win situation. But managing a rental isn’t easy. Tenants can be a pain, and can cause your property damage. On the other hand, stable tenants will provide you with a steady income, and can even gradually improve your investment.

If you think you’d have trouble being a landlord, it is possible to hire a property manager, but this is an added expense. If you are planning to purchase a property to rent out, do your research. You need to be fully informed about your legal responsibilities. Finally, be sure to screen your tenants. While you never know a person’s tendencies from one short meeting, you will be able to weed out some of the problem-types from the start. Managing a rental property isn’t hard to do, it just takes keen judgment.

By researching all of your obligations carefully, and paying careful attention to the market, property investment can be an exciting and profitable venture. Finding an experienced real estate agent you can work with helps make it more reliable.

Virginia Wherland, experienced Minneapolis real estate agent. Visit her web site for help finding Bloomington MN homes for sale.

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http://EzineArticles.com/?Investment-Property—Ways-to-Earn&id=1012625

By Kurtis Squyres

There literally has never been one single year over the time that we have flipped houses that I haven’t heard the statement (or some variation, and 90% of them came from agents), “oh, you can’t flip in this market”.

And each year, I answer, “Maybe so”, or “Hmm, could be”, as I wait for our latest escrow check to arrive.

You will never hear that statement come out of my mouth.

This being said, I will say that flipping in a declining market does sort of remind me of learning to snowboard on a black diamond slope. In 2002, 2003, and 2004 if you had started flipping then it was more like learning to ski or snowboard on a bunny slope.

The reason is that if you had miscalculated during 2002, 2003, or 2004, the rapid appreciation of the market combined with the greater fool theory bailed you out every time. Leased land, floor-plans that resemble a labyrinth, war zones, glop ons (really bad add ons), overestimating value, underestimating repair and carrying costs, taking 3 months longer than you thought to make your repairs…all of these sins were quickly forgiven by the voracity of the market.

In this market, if you commit these sins, you can and will be punished, “Thank you sir, may I have another?!”

Right now, it is raining foreclosures. You have to be spot on…spot on with your rehab, spot on with your repair estimates, and one of the most important factors, aggressive in your marketing of the property…in other words, you better have some idea of what you are doing.

If not, the risk is that in the time it takes to fix up that property, 3 or 4 new foreclosures go up on your street that are priced $50,000 below the last lowest priced property. There is a LOT for a buyer to choose from.

Without espousing all gloom and doom, there is still a SHORTAGE of freshly remodeled homes out there. Even more exciting than that, every month more and more families can afford a home who could not for the previous 5 years (and chance are their families are bigger!).

There is a lot to be excited about…but you have got to be focused, you have to be accurate on your repair costs and timetable, it has to look GOOD (or why wouldn’t a family save $50k and pick the REO across the street?)…

You need to get creative and put something like a plasma HD flat screen with an Xbox in the living room, a spa in the backyard, or something that makes a family emotionally attached.

You need to make the property enticing to agents and add at least 2% to the commission of the agent or a free trip to Catalina Island (not as pricey as you might think) for the agent who finds you a buyer……AND, you need to factor these costs in advance!

If you are a beginner and you are saying, “no sweat, I can do that”, then I will always reply, “Go for it!”.

Really, no matter how much advice we or anyone else gives you, the only way to get to consistent success is to get that pesky falling-flat-on-your-face part out of the way…unfortunately, there is no way to avoid it that I know of. It is the only way to get a deep understanding of the game the same as any other hobby, business, or sport. You can read hours of books and videos about snowboarding, it’s not going to prevent you from feeling like a complete jackass the second you click your boots in and try to stand up!

This doesn’t mean you will have an unmitigated disaster, it does mean that at the end of each project if you don’t slap your forehead at least once and say, “Dohh, I should’ve”, or “I could’ve”, or “Why did I….?” then you didn’t really learn anything, and there is ALWAYS something you could have done better.

……..hey!….image how easy the rest of your snowboarding or skiing trip will be when you do learn how to get down a double black diamond!

If you don’t like snow up your nose, and you want to take a more balanced approach, then I have another suggestion for you: consider wholesaling. The money can still be great and the risk is considerably less.

Again, CONSIDER WHOLESALING. The money can still be great and the risk is considerably less.

If you are looking to change careers, get out of your current line of work so you can have your own hours and be your own boss, but you aren’t crazy about going down a black diamond right away, don’t you dare give up that dream or tell yourself that you’ll do it when the market changes.

Wholesaling means you go on the hunt for amazing deals, but then you take what amounts to a small finder’s fee, pass the lion share of the profit to another investor, and go on to the next one.

But do NOT stop there - make it part of the deal that you can check out what your investor buyer does (or doesn’t do) to the property, how they market it, what it costs, and learn everything you can from it. Who knows? …you may just get hooked on the thrill of the hunt and never even care about fixing them up.

I’m torn between the two. The feeling you get when you take a trashed, smelly, abandoned pile of wood and turn it into a beautiful home….there is no feeling like it. No matter how many times we’ve done it, my jaw hits the floor when I see the work my brilliant and artistic wife pulls off time and time again..

….BUT, for me, I’m all about the fun of the treasure hunt. I’m not a fix up guy. I tried to put in a doggy door once. The box said 15 minutes. It took me two hours and put me in a really bad mood, and Cindy basically redid it anyway…sorry, I just suck at it. I admit it. But if you want a direct mail marketing system to absentee owners or a screening system to find the best repos fast, stand back!…Cindy often struggles with email….if we were good at the exact same thing we’d be in big trouble.

But the number one reason is risk…no repair costs at stake, no mortgage payments, no agents and picky end user buyers to deal with…if you are bound and determined to get out of your job, don’t have a lot of money, and not a lot of contractor experience, give wholesaling a serious thought to launch your investing career……….and as always, call us if we can help you in anyway. You can wholesale a deal to us if it’s good enough, or we can wholesale a deal to you if you are bent on fixing it up yourself, just don’t try and add a doggy door, it’s impossible.

Be Happy and Prosper,

Kurtis

http://www.FarBelowMarket.com

Kurtis Squyres lives in The Coachella Valley in Southern CA, about 30 minutes from Downtown Palm Springs.

Kurtis has personally bought and “flipped” over 300 homes in San Bernardino, Orange County, and Riverside Counties over the past 12 years.

For six years, Kurtis served as a Merrill Lynch Financial Advisor to high net worth clients and managed over 25 million dollars of financial assets. Kurtis left the finance industry to pursue real estate in 1999, and is now a leading authority of the non-judicial foreclosure process in California.
Kurtis continues to invest in and teach real estate investing full time. http://www.farbelowmarket.com

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Check out the free 2008 Internet Real Estate Yellow Pages (pdf). It contains all the names and contact info for all the players you need to know about if you want to make money in real estate. This is published by MagicBullets.com.

By James Orr

When investing in real estate, you might encounter negative cash flow in your market. Why?

When the mortgage payments you have on a property for the amount you are putting down are higher than what you could collect for rent on the property, you have negative cash flow.

Some people include taxes, insurance, management, maintenance and other expenses for their property when calculating their cash flow, but for the sake of this discussion we will use a comparison of rent and mortgage payment.

So, what can you do when you find yourself in a real estate market, like the one we have here in Colorado, where the rents are not nearly enough to cover the mortgage payment on a reasonably low sized down payment?

Well, one solution is to offer the house on a rent-to-own.

By finding someone who is willing to purchase the house and not rent it, you can have them pay you an amount that is more like a mortgage payment and less like a rent amount.

They would also be responsible for taxes, insurance, maintenance and any other housing related costs like HOA.

This, combined with purchasing the property below market, can give you a positive cash flow where you would have a negative cash flow in that market with a straight rental.

For example, you may buy a house for $180,000 (at a $20,000 discount) with an interest rate of 6.5% and sell the house to a tenant-buyer on a rent-to-own for $200,000 (its actual full market value) with a payment that is the equivalent of a 7.5% interest rate.

You now are collecting payments on $200,000 at 7.5% when you are only paying payments on $180,000 at 6.5%.

Is charging someone who can not get a traditional loan one percentage point higher than the rate someone like you with good credit can get unfair? No, I think one percent is actually a good difference for them. Check the rates for good credit and poor credit at your lender to see what a fair difference would be in the current credit market.

Take a few minutes, on your own, to calculate out what the payments would be for buying a median priced home in your market at a 10% discount and selling it for full price on a rent-to-own with a 1% difference in interest rate and see how that changes the cash flow on that property.

James Orr is a professional real estate investor, marketing expert and founder of the LearnToBeRich.com on-line investment game.

You can get a free real estate course and fully analyzed real estate deals and his blog by e-mailing him at freerecourse@learntoberich.com or visit the Learn To Be Rich Blog for more great articles and information.

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http://EzineArticles.com/?How-To-Eliminate-Negative-Cash-Flow&id=1015112

By C Small

Every news story in print these days related to the real estate and housing market seems to predict disaster. Home prices diving, out of this world foreclosure rates, mortgage meltdowns, and stagnating market stories govern the headlines. As a real estate entrepreneur, shouldn’t this news keep you awake at night? Shouldn’t it make you rethink getting into house flipping in the first place? Shouldn’t it cause some serious concerns?

The short answer, to put it frankly, is not really. The housing market should have little to do with your success as a house flipper. Your success as a flipper depends on many things: acquiring undervalued homes; making the right fixes; keeping costs small; making your property the best in its neighborhood; but it does not depend on the market itself.

Why then, are all the house flippers saying the sky is falling and the real estate business is hopeless? Because they aren’t in this business with the right mindset. They are speculators, hoping to acquire a property and let the market itself boost its value. When the market stops going up, these speculators unexpectedly experience their profit dry up (or turn into huge debt) and they think the flipping business is over. When the market stops increasing for flippers, it can be a bonus, as the price for buying properties stops going up, making high end homes more affordable, making the market for the less desirable homes more saturated, and providing you with a great vehicle to sell your great home and purchase your fixer upper. The prospects for success can actually go up in a stagnant or declining housing market.

If you are beginning in this business your perspective should be one of creating equity. See your property flip as an opportunity to take something that is not worth much, add something to it, and get it to someone who will pay top dollar. It shouldn’t matter that the market itself is not appreciating in value, because you are creating value and equity completely separate and apart from the market!

Remember this any time a naysayer tells you your real estate dreams are farfetched: you don’t need market improvement to flourish. All market increases do is enhance your profit margins. All that is required is the right property in the right neighborhood that needs the right fixes. Find those three things and it doesn’t matter what the market does, you can be successful.

C Small

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http://EzineArticles.com/?Does-the-Housing-Market-Affect-Property-Flipping-Success?&id=1013359

By John Krajewski

Real estate investing isn’t just for retirees looking to earn income. The promise of guaranteed earnings and the huge earning potential make REI one of the more popular ventures for many younger folks as well. With REI, the old adage of starting with the end in mind rings very true.

To begin, decide what type of REI you want to do before you ever look at your first house. Are you looking for a property to flip? Are you planning to renovate the property for some other use? Will you rent it out as an income-producing property? What kind of area are you looking to buy in - rural, urban, or suburban? Knowing which direction to head in will save you some time and help you find the professionals and funding that are right for you.

Once you know what type of real estate investment you want to make, start talking to area real estate agents. The right agent will know the market, and be able to offer guidance from an investment perspective. Depending of the type of REI you have chosen, a knowledgeable real estate agent will be able to help you quickly locate properties that fit your needs and your budget. Don’t be afraid to let the agents know you are talking to others… REI is a huge money-maker. The promise of commission on a huge sale will be more than enough to make the real estate agents compete for your business.

Once you have an idea of what’s out there for the type of real estate investment you want, start shopping around for financing. Have no credit or bad credit? Consider creative financing through private money lenders. PML’s are often the funding choice for companies and well established real estate investors. They offer flexible funding terms, and can also put up money fast … two very important things to keep in mind on deals that must close quickly. Otherwise, talk to banks and other financing companies to find out what’s out there. It is best to prequalify for funding before going house hunting. This will prevent headaches later for everyone!

Real estate investing is not as hard as people might have you believe. It does take research and persistence. The income potential is amazing… there are tons of true stories out there of everyday, normal people making thousands of dollars through REI. It is possible, and it can be you. If you do your homework, and master the basics, it won’t be long before people are reading your story of excellence and success.

About the Author:

John Krajewski is a 33-year old real estate investor who has spent several years building a successful REI portfolio. After facing and conquering the common REI trials and tribulations that most new investors deal with, John has poured his wealth of valuable information into one amazing e-book: Secrets to Foreclosure Profits. This powerful e-book teaches real estate investors of any level how to profitably invest in foreclosure properties using the insider secrets and little-known tips discovered by John during his direct experience with foreclosure REI. Besides real estate investing, John also enjoys snowboarding, mountain biking, networking with other investors, and spending time with his family. Learn more about John’s e-book Secrets to Foreclosure Profits at http://www.4closuresecrets.com

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http://EzineArticles.com/?Foreclosure-Real-Estate—What-You-Need-to-Know-Before-Investing&id=1014032

By Simon Volkov

If you play your cards right, investing in foreclosed properties can be a very profitable venture. Although it’s not quite as simple as the late-night infomercials lead you to believe, the following tips can help you prepare for what lies ahead.

Before property is labeled “Foreclosed” it must first be placed for sale through a real estate auction. In order to purchase property through the foreclosure auction, individuals must place a minimum bid equal to the amount of the loan balance, along with any other costs associated with the process, such as accrued interest and attorney fees.

Typically, foreclosed real estate is sold “as is”. Occasionally, the ex-homeowner may still reside in the home and individuals who purchase the property will have to deal with having them evicted. This is not a pleasant experience, so conduct research on any foreclosed property you are interested in to determine if the home is vacant or occupied.

If your bid is accepted, it will be your responsibility to pay-off any liens and/or back taxes attached to the property. You will also be responsible for taking care of necessary repairs or renovations.

While it is true foreclosed property can yield a good return on your investment, it is imperative you engage in due diligence. Learn as much about the property as possible before placing your bid at auction. Keep in mind much of the real estate placed on the auction block is not worth the amount owed on the note. Therefore, you want to look for properties that do not have tax or creditor liens attached or those in need of extensive repairs or renovations.

If the foreclosed property is not sold through auction, it is returned to the mortgage company, who returns it to the bank. At this point, foreclosed property becomes real estate owned (REO) property.

Once foreclosed real estate becomes bank owned, the mortgage note no longer exists. Generally, the bank will negotiate with lien holders to remove or reduce liens placed against the property. They will also take care of evicting individuals still residing in the home. Occasionally, they will invest in repairs and renovations.

REO properties are frequently listed on bank websites. Included will be the name of the contact person, along with their phone number or e-mail address. Prior to contacting the specialist, thoroughly investigate the property and conduct research on the market value of other homes in the area where the foreclosed home is located.

If possible, obtain estimates to determine the cost of repairs or renovations. If you plan to do the work yourself, determine the length of time it will take to complete the repairs along with the cost of materials.

Keep in mind banks are just like any other business. Their eyes are on the bottom line. If you want a good deal on an REO foreclosed property, make a respectable offer and leave room for negotiation. More often than not, the bank will respond to your original offer with a counter-offer. You may have to submit several counter-offers to obtain the price you want. Be persistent and remember, virtually everything in a real estate transaction is negotiable.

Not every foreclosed property will be a good deal. You will probably have to sort through quite a bit of rubbish in order to find your diamond. But, it can and does happen and there’s no reason you can’t grab your slice of the real estate pie.

Simon Volkov is a private Real Estate Note Investor in Orange, California. He offers nationwide investment opportunities for serious investors via RSS feed and email subscription. His website provides resources and articles focused on today’s real estate market. Subscribe to his free investment opportunities by visiting www.SimonVolkov.com.

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By K. Kleinholter

You usually don’t hear people talking about “hidden” costs when flipping houses, rather, you hear about how much money they made.

“And we really didn’t have to do much either!”, you’ll hear them say.

While there are flipping jewels that do indeed fall into people’s laps, the reality is that those flips are few and far between. If you’re considering flipping, you certainly want to go into it with a lot of enthusiasm, but with a healthy dose of caution as well. Learning to “read” houses when inspecting them before buying will help you see more clearly what possible repairs might be needed to make the house ready for the market. Not paying attention to certain warning signs of structural problems could mean the difference of making, or losing money altogether.

If you’re relatively inexperienced at flipping, or considering your first flip, pay attention to what the house is “telling you”. You could go into it thinking you will make some great money, only to spend any profits on major repairs. Remember, in many flips, you are buying foreclosure property, property with tax liens against them, etc. So, understand that you are buying the property as is, warts and all.

Some major repair signs to be on the lookout for, are the following:

Having this particular increased-awareness mindset makes good business sense when evaluating any piece of property. Consult with a professional such as a general contractor or realtor and have them help you assess any possible repairs and related costs. When you have all of the facts and figures in front of you, can you then make an informed decision. When you do, in fact, submit a bid, you’re price will reflect any necessary repair expense.

If you’re relatively new or considering entering the house flipping business for the first time, please visit http://www.House-Flipping-Helper.com for more information regarding all things house flipping and remodeling.

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http://EzineArticles.com/?House-Flipping—Become–Aware-Of-Hidden-Repairs&id=893705

By Jonathon Hardcastle

Investment in property is seen as one of the best ways to earn money from your existing capital, with stable yields year on year. But why is it that property is such a worthwhile investment, and isn’t investing in property tying you down and your money up in bricks and mortar? In this article we will look at exactly why property is considered to be a wise investment, and the factors to consider when investing your money.

Investing in property can be a very beneficial endeavor. Working around basic accounting principles, the property you acquire is a capital asset, thus hopefully increasing your overall net worth. This doesn’t seem the case when you consider the amount of money you can plough into property with no immediate return. However, property usually appreciates in value, rather than depreciating, year on year, which slowly increases the value of your total assets for when you eventually sell. Furthermore, this overall gain doesn’t fall within the parameters of income for tax purposes, and so can escape this burden to a large extent in your annual tax returns.

Investing in property also has the added bonus of allowing you to grant charges and standard securities against borrowing, over a property that isn’t your home. That means you can raise finance from your property without risking your home, so even if you default on the loan repayments, you’ll still have a roof over your head. Furthermore, if you negotiate a lease with a tenant for your property, you can expect a return of 8% of the value of the property each year in rental income, which would certainly be sufficient to pay off any mortgage and leave some nice profits to play with. Just remember to let the taxman know, because he has a claim on that as extra income.

A potential way to secure property investment is to act through an incorporated company, to raise finance from investors and institutional lenders alike. Of course, this has the great advantage of limited personal liability, although you may still find yourself granting personal securities over money you borrow. Whether or not you choose this vehicle, it is certainly one of the most popular for large scale property investments the world over.

Investing in property isn’t a guaranteed return on investment, but you’re almost as good as it gets. Property has the potential for high earnings and big profits, but with all this big money floating around, remember the scale of risk involved.

Jonathon Hardcastle writes articles on many topics including Investing, Finance, and Business.

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http://EzineArticles.com/?Property-Investment&id=898459

By Bryan Benson

An over leverage home is one that you want to stay away from… meaning that the amount owed is more than what the house is worth, even more than the AVR. About the only thing you can do with these homes is list them.

An exception might be if there is significant damage to the home, for example if there is fire damage. Under these circumstances, selling the home by traditional means may not be an option. The average buyer does not want to buy a house that needs repairs, they want a house that is ready to go… ready to move into and start making it a home.

But people in this business are not the average buyer. In fact, homes in this condition are exactly what is sought after. Spending a couple thousand dollars in repairs is all that is needed, and then the house is back in shape to sell to that average buyer, which is what generates our profit.

Complications can creep in when it is a HUD home. They usually insist on listing the home, which only a realtor can do. But again, we’re dealing with a home with excessive damage which can’t be listed the traditional way. So, do you just tell the mortgage company the place had a fire so there’s no point in listing it because no body’s going to buy it, or should you play the game for a while?

That’s really the question. Well, the answer is you’re going to need to play the game. HUD mortgage companies have a set of parameters that they have to push this thing through in order to get it to meet their criteria. Because even lost mediators are subject to internal audit and if a deal ever comes up down the road as having not been done by the book, their butts are on the line. One of the most common parts of a short sale is for the seller to have had the house listed at one time previous to your negotiation with the bank. The bank wants to know that all normal methods of selling this house for some value greater than what you would presumably offer have been exhausted.

You may also be wondering if you should let the bank know that the place is vacant until they’ve figured out for themselves via the VPO or something. It is preferred that the house be vacant and you having the control of it and being the VPO contact. So at that point you’re going to have to disclose the fact that it is vacant because they are going to need to get in it to do the VPO.

For additional information on real estate investing and the hot foreclosure market, I recommend joining Ron LeGrand’s href=”http://www.MillionaireMakerNewsletter.com” mce_href=”http://www.MillionaireMakerNewsletter.com”>Millionaire Maker Newsletter The newsletter itself is loaded with great tips and resources, and he’s usually giving away something free like a CD or something that generally has a lot of great information on it.

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