Real Estate Genius Investment Software Blog

By Tom Dunn

If you’re an aspiring real estate investor, or even an experienced one, and you would like to learn to market for motivated sellers and get them calling you, read on!

There are lots of ways to market for motivated sellers, and get them calling you on the telephone. Some cost lots of money, like classified ads. Others are virtually free. Your budget will determine which marketing methods you start out with, but the important thing to remember is, if you’re not doing some form of marketing, your business is dead in the water.

If you have little or no budget, one of the first things you SHOULD spend a little money on is business cards. You can get a box of a thousand simple cards with your contact information and “I Buy Houses” emblazoned on them for under thirty dollars. If you pass them out, they’ll bring you contacts and business.

The sad thing about business cards is, many people never take them out of the box, or they hand them only to people they already know. What good does that do? Each card is like a little salesperson, waiting to introduce you to the world. Leaving them in the box is like telling your salesman he can stay home in bed.

Pass your cards out everywhere, and leave them places where people will see them. Leave them with tips at restaurants, on the gas pump after you’re finished, hang them on community bulletin boards and in local businesses. In short, get them out there doing there job. Slowly but surely, people will find out about you, and they will call you when the need to sell a house.

Real estate investors also use things like hats, key rings, mugs, pens, and even t-shirts with their “I Buy Houses” message printed on them. These are great, but can get pretty expensive. Use them after you have a couple of deals under your belt, so they won’t break your budget.

Classified ads are probably the most often used method for attracting business. Unfortunately, in my market at least, they are overused and therefore it’s hard to stand out. Try ad copy that’s a little different. My ad reads, “I Buy Houses – Sell Your House Today, Move On With Your Life Tomorrow.” It stands out a little from the rest, and it’s been effective for me.

Where you put your ad can make a big difference, too. In my area, we have one major daily newspaper, which is widely read, but very expensive. I have had good success with a couple of the small, weekly “Pennysaver” type classified ad papers. My suggestion is to test your results and keep careful track of where your calls are coming from. You’ll soon find out what works and what doesn’t.

I’ve got more on how real estate investors can find motivated sellers, including two kick-butt methods that few investors have ever thought about. You’ll find it at Marketing For Real Estate Investors.

Crush The Biggest Obstacle to Your Success in Real Estate… or Anything Else! Download my FREE report and Start Investing In Real Estate! Tom Dunn is a successful real estate investor and author of the popular DealFiles Real Estate Investor Stories free newsletter. You are welcome to share this report, unedited and in it’s entirety, with anyone you like. This text, and all live text links, must remain intact. © 2007 by Tom Dunn.

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By Alexander Tran

Through every cycle, many real estate investors forget why they invested in real estate in the first place.  When the market appreciates, we all come to expect that real estate prices will rise forever.  Why not pay full asking price for a property when it will appreciate 20% in one year?

If you put 10% down on a $200,000 house, for example, you could earn 200% return on your money.  Never mind that the house could only rent for $900 a month.  Assuming a 7% interest rate, the interest only payment is $1050 per month.  Add taxes and insurance into the mix, and you’re looking at a negative cash flow of $250 a month.  Ouch!

The logic of the last few years was that the appreciation would wipe out all negative cash flow sins.  The reality of today is very different as many wannabe real estate investors are experiencing.

Ask any grizzled real estate investor and he would tell you that positive cash flow from a single family rental house is an elusive beast.

But what about all those other investors who live off their income properties?  First of all, notice how it’s always “other investors” who are finding success?  Those “other investors” paid down their mortgage to the point where their payments are less than their rental income.  So if they own a house that is worth $200,000 but they only owe $50,000 to the bank, their payment would be $333 a month, fully amortized.  Since we assumed that the rental rate is $900 per month, their net income is $900 - $333 = $567.

That’s positive cash flow, is it not?

The answer is yes, but at what price?  If they only owe $50,000 to the bank, they have $150,000 of their money in the property.  What is their return on investment?

Let’s work it out.  $567 per month in net profit equals $6,804 per year.  Divide $6,804 by $150,000 and you’ll get 4.54%.  That’s right folks.  The “other investor” is getting a whopping 4.54% return on their investment.  Can you think of another investment vehicle that can beat 4.54% returns?  Stop when you get to 100.

Did I mention that being a landlord is hard work, yet?  You’ve heard of collecting rents and clogged toilets, haven’t you?  Nuff said.

So why the heck would anyone want to invest in real estate?

That’s a really good question.  In fact, it should be the first question that any wannabe real estate investor should ask.  The second question should also be the same as the first question.  Wannabes should ask themselves this question at least three times.

If they pass this preliminary screening process, they will see that the true answer to why they or anyone else would invest in anything is…cash flow.

What?!?

We all invest for cash flow.  I don’t care if it’s a stream of cash flows or one big cash flow (cash chunk?) in the end when we sell; we all invest for the cash flow.  And this cash flow has a price.  Find the right price and the cash flow becomes that much sweeter.

For example, let’s say that we bought the rental house mentioned above for $110,000 instead of $200,000.  Our interest payment would be $578 per month based on 10% down.  Add taxes, insurance and property management fees, and we’ll be looking at $853 per month.  All of a sudden, we’d be looking at $900 - $853 = $47 per month.  Yippee!!

Not only that, but our return on investment is ($47 x 12) / $11,000 = 5.13%.  The number is not stellar but it took a lot less money to earn that return.  By the way, $97 a month in positive cash flow on a single family house based on 10% down is nirvana in real estate investing land.  Don’t believe me?  Go ask your local grizzled investor.

All right, so how do you find the $110,000 house?  That is a question for another article.

Like I said, “Positive cash flow in real estate is an elusive beast.”

Alex Tran is the publisher of http://www.ezsuggestions.com/blog
For many years, Alex worked very hard so that he could become a lazy bum some day. Then he realized — why wait until he turns 65 to become a lazy bum? Why not find ways to invest for time today? That question was the genesis for http://www.EZSuggestions.com, where Alex shares ways to invest and not have to work so hard.  Go read his often irreverent, but insightful, writing on how to invest for time instead of money. After all, what good is money if you haven’t got the time to spend it?

Article Source: http://EzineArticles.com/?expert=Alexander_Tran http://EzineArticles.com/?Positive-Cash-Flow-is-The-Elusive-Beast-in-Real-Estate&id=618190

By Ryan Lewis

Positive cash flow means that you have money left over after you’ve collected the rent, paid the mortgage, taxes and utility bills right?  That’s the common misconception for first-time real estate investors.  The reason it’s a misconception is because the true cost of owning a rental property includes many additional expenses that are often overlooked.

Insurance

This may be the most obvious monthly expense but one that is regularly missed in the initial analysis.  Buying insurance on your property is a must, especially since you are generally allowing strangers to live in your huge investment.

Depending on what type of property you own and where you are located, you can expect to pay between $25 and $75 per month for an average property.  To make a general calculation, I usually use 0.02% of the total purchase price for the monthly cost; which will work for standard rental homes.

Condo Fees

A $100,000 condo with rental income of $1,000 per month and PIT (Payment, Interest and Taxes) of $800 looks great until you add that small $300 per month condo fee!  Make sure you know EXACTLY what the condo fees will be before you buy the property.  This also means that you should check the reserve fund and any recent decisions made by the condo board.

Vacancy

Now we’re getting into the expenses that don’t show up as a monthly withdrawal but will knock a dent in your dreams of early retirement.  The first question is: do you know the vacancy rate in your area?

To get these numbers check with local realtors, business groups and even other landlords.  If you’re confident that you will have not trouble renting the unit, I’d suggest you still leave at least 5% (approximately two weeks) as a minimum and include it as a monthly expense.  This does not mean that you write it down; it means that you keep it in the bank!  Once you have the equivalent of about 1 month’s rent saved, then you can consider other uses for the money.

Maintenance

Here is yet another expense that thrives on Murphy’s Law.  If you are diligent and keep an ongoing account for maintenance and repairs, you’ll probably rarely need to use your reserve; however, if you do not plan ahead there’s a good chance all the appliances will break in the same week!

 The maintenance fund is a crucial part of your real estate management strategy.  I would suggest you put aside between 2% and 8% of the monthly rent depending on the age and condition of your property.  As this reserve fund grows you can feel more secure and not need to pay high interest when the roof needs repair or the bathtub goes.

Management Fees

I leave management fees to the end because this seems to be the least likely expense people are willing to set aside.  The common reaction is, “I manage the property myself, why would I need to set money aside for management?”  My reply is based on the theory of duplication.  If you are planning to start a real estate empire (and not end with just one property) then you will need to have good quality managers running your buildings.

If you only have a positive cash flow without factoring in any real estate management expense, then your plans better include carrying costs as your portfolio grows.  Based on my experience, management of single or smaller units will run about 10% of the monthly rent; dropping to 5% or less as the buildings increase in size and value.

Final Thoughts

The list of property expenses above means that, as a good rule of thumb, you should include a premium of between 10% and 20% of the total expected rent for non-PIT costs.  While this may seem like an extremely high number at first, a solid property that will give a continuous monthly cash flow will almost always support this adjustment.

Did you find these tips on Real Estate Investing helpful?  You can learn more about  
making money with real estate by visiting http://www.lewisempire.com

You can also receive a regular posting updates for  
making money online and leave comments about current topics with the RSS feed.

Lewis is an Author and Real Estate expert with years of experience, research and training in Real Estate Investing, Wealth Creation and Goal Setting.  Dynamic, intelligent and exciting, Lewis holds a bachelor of commerce degree and years of experience in Consultative Sales, Web Development, Internet Marketing and Business Start-ups.

Article Source: http://EzineArticles.com/?expert=Ryan_Lewis http://EzineArticles.com/?Real-Estate-Investing-Mistakes—5-Expenses-to-Include-in-Your-Property-Analysis&id=621533

By Robert Gavin

It’s true, 90% of the world’s richest people became rich through property. But did you also know that it doesn’t take an advanced degree, millions in the bank or a super high IQ.

NO, what separates the rich form the poor, is understanding how to set and achieve your financial goals.

ANYONE who can understand money and how to make it work for them, rather than them working for it, can become financially independent within 5 years.

Finding the time It is often said that we live in a world where “the richer keep getting richer and the poorer keep getting poorer”. To some extent this is true, but there is no time like now where people with the right information and skill can change their predicament

Here is a question for you? Have you ever wondered why you are always working and never seem to have enough money?

So how do you find the time?

Let’s have a look at some of the things that really takes up a lot of our time:

1- Watching TV.

2- Do less work and overtime

3- Plan your time more carefully.

Surveys show that after work and sleep, watching TV is the third main use of people’s time.

What with the age of retirement continuing to rise and then pensions not being large enough for out retirements, people are increasingly thinking more and more about securing their financial future.

You owe it to yourself and your family.

Setting goals

Lets imagine that two people are driving somewhere they have never been before.

The first driver sets off straight away as fast as he can.

The second driver first spends some time looking at a map and deciding on the best route to go.

Which driver do you think will get there quicker and easier?

This is exactly the same way with property investment. In order for be successful you have to declare where you are heading and set your targets.

Goals are important for many reasons:

1.They call you to action. 2.They help you make choices. Go for some things and reject others. 3.They introduce accountability. 4.They motivate you. 5.They increase your confidence to get you where you want to be.

When setting your own goals be honest with yourself. A great tip is to write them down on paper and refer to them. It’s a proven fact that those with written goals perform better than those without.

A goal is a tangible result that is unambiguous and measurable. Let’s use the example of Thomas Edison

2- Thomas Edison was one of the most brilliant inventors and scientists that ever lived. He did not get up every morning thinking “I will invest something”. No. Instead he woke up every morning with the goal of “making the world a better place for all”. Each day he did this and during his life he created hundreds of invention, including the electric light bulb.

Let have a look at some goals that some people might use: “I want to own 50 properties as soon as possible” -that’s not a goal.

“I want 3,000,000 in my hank account by December 31, 2007″ — now, that’s a goal!

Set yourself a clear, measurable goal now.

Then break it up into smaller, more manageable tasks so you know exactly what you need to do in order to achieve it.

Deciding on your strategy

Goals are WHAT you want. Strategy is HOW to get them

Here are some of the questions you need to be asking yourself when setting your strategy.

1. Have I got my goals clear?
2. Has someone I know double checked that my goals are realistic and properly set out and written down?
3. How much do I need to make financially to hit my yearly goals? Break down your overall goal into smaller chunks..
4. What kind of property investment meets my risk profile?
5. What kind of property investments are going to help me reach my goals?
6. Property investments I can choose from include off-plans; buy-to-let; renovations;
7. How much time do I have on a weekly basis to make my goals happen?
8. To whom am I accountable for reaching my weekly and monthly goals?
9. What reading and researching do I need to do each week?
10. What support do I need to buy in or nurture such as accountants, lawyers, finders, lenders and brokers? Have I prepared a budget and a business plan?

Once you have set your goals, review them every 2 weeks or so to see if you are going. To achieve them or not.

Good financial ground work

If you are managing your personal finances badly to start with, getting involved with property will not help.

Manage your property accounts and personal accounts separately. Use separate bank accounts.

If your personal income is subsidising your property income or vice versa, be clear about how much and in which direction the money is flowing. You need to have a firm grasp on your finances to prevent problems

The simple answer that will solve all your money problems is to spend less than you earn and invest the difference!

Summary

Make time for your financial freedom. It’s well worth it. You will be surprised to find that securing your financial future can be done in less than 10 hours a week. Consider that this is less than a third of the time that the average adult watches TV each week.

Make goals that you are happy with and create a strategy to show how you are going to achieve it.

As a famous philosopher once said “procrastination of the thief of time”. Start now, save more and plan each step carefully and check.

And in a few years time, your financial future will be secured.

Robert Gavin is a self made professional property investor who in 8 years has gone from renting a studio apartment to owning and managing a highly successful property portfolio, all by the age of 26. He now spends his time helping other like minded investors. If you want to find out why prpoerty is THE greatest investment you can ever make, go to::http://www.invest-in-sofia.com/property.html

Article Source: http://EzineArticles.com/?expert=Robert_Gavin
http://EzineArticles.com/?Can-You-Earn-Millions-Through-Property-Investment?-Yes,-But-Only-With-The-Right-Planning&id=419880

The real estate investing calculator site Real Estate Genius has just launched an affiliate program. If you have your own site or blog, this is an opportunity for you to start earning money from your visitors. Real Estate Genius Affiliates will earn 50% of revenue generated by the customers they refer… that also includes 50% of the customers’ ongoing monthly membership fees! If you refer other affiliates to the program, you’ll also earn 25% of any revenue those affiliates earn.

As an additional incentive, you earn $5.00 just for joining! 

To check out the details and join, visit:
Real Estate Genius Affiliate Program

By Tyler Fawcett

Real estate investing has become almost a national pastime. Millions are made every year on the buying and selling of homes. Many of the smartest investors know the secret to realizing a great profit in real estate lies in what is known as “The Fixer Upper.” Have you ever noticed that one home on your street that could be so much more than it is with only a little work? Chances are that home is an undiscovered gold mine.

It is truly amazing what a run-down home can become with a little time, a little money and some TLC. Here are a few great ideas to think about when purchasing a fixer upper.

1. Paint. It is no real secret that a new coat of paint can bring new life to a home both inside and out. A different color scheme can also dramatically change the atmosphere and feeling of an older home.

2. Fixtures. Are the fixtures in the home old and outdated? This can be a large drawback when selling a home. Old out of style fixtures show disinterest in the upkeep of a home. This applies to all fixtures, lights, faucets, toilets and sinks. Take some time and find elegant new fixtures that fit the new identity of the home.

3. Floors. Are the home’s floor tragically out of date or in poor shape? Stained linoleum and chipped tiles are never a attractive feature. A quality laminate can do wonders for a home’s appearance. New tiles in high-traffic areas like the kitchen or bathroom are also a good idea.

4. Appliances. Nothing attracts the interest of buyers like brand new appliances. This can also serve as a safety upgrade if the old appliances have fallen into disrepair. New appliance can also drastically increase your asking price.

5. Landscaping. This is one of the most important aspects of improving the fixer upper. Curb appeal is critical when buyers come to view a home. If the curb appeal is neglected and the property is not attended to, many prospective buyers can be lost before they even step into the home. Tidy up the yard and plant some flowers. Ensure that hedges and bushes are neatly trimmed and that all walkways and access points are clear and uncluttered. Another good idea is to resurface the driveway if it is showing cracks and wear. A simple asphalt is easy to apply and adds a neat and tidy air to the entrance.

Don’t forget that many homes sales are decided within the first few minutes of seeing a home. The cosmetic presentation of a home is the single most important factor in attracting prospective buyers. Most of the above mentioned fixes can be done quite easily and without hiring a contractor or professional. Although it is never a good idea to do electrical work yourself unless it is your profession. The same caution definitely applies to working with and around natural gas. So be careful, and give your fixer upper the attention that it needs to bring you the profit that you desire.

REW Writers is a collective publication network facilitated by Real Estate Webmasters each article is contributed by a member of our real estate community. This particular article was submitted on behalf of Calum & Kathleen MacKenzie, your elite Tampa Realtors.

Article Source: http://EzineArticles.com/?expert=Tyler_Fawcett
http://EzineArticles.com/?The-Fixer-Upper&id=422806

So what if the real estate bubble exists only in your mind? That’s the thought examined by Roger Lowenstein in a really thought-provoking piece in the New York Times called Pop Psychology. It’s become really pretty trendy to accept the obviousness of the real estate bubble which has swelled up in the US, and to accept the inevitability of it ‘popping’. So it’s really pretty contrarian to suggest that there might be no bubble- especially when those words aren’t coming from a wild-eyed risk-seeking investment maniac, or a glad-handed realtor trying to upsell you.

Lowenstein points out that for most homeowners, houses have appreciate at a much lower rate than the stock market in past years. It’s only in certain hot markets where things seem to have gotten out of hand.

So then, how have so many people made so much money in real estate?

The answer lies in leverage. The typical home buyer only puts up 10-20% of the value of the house purchased. The rest is borrowed from the bank. Leverage lets you play with other people’s money. The more leverage, the more you can accelerate your potential earnings (or losses).

Unlike with the stock market, in real estate you can borrow a much higher percent of your investment, and you also don’t have to worry about margin calls. Values may plunge, but as long as you can keep up your monthly payments, the bank isn’t going to come knocking for more equity from you.

A brief example of the leverage effect. Let’s say you buy a house for $100,000, and sell it a year later for $105,000. Ridiculous example, but we’ll keep it simple. Your return is 5%. That’s pretty paltry.

However, if you bought the house with a $10,000 downpayment, then your actual ROI is 50%! (You put in 10, you get back 105 - 90 = 15). Not too shabby a return.

It’s an interesting article with some points well worth reading, check it out. And if you want to run some numbers on some potential deals, check out the Real Estate Genius investment property calculator, which will break out your actual economic return on any potential real estate investment.

The terms and conditions of loan are varied, codified according to the specific company. The insurance quote is provided by the multitude of insurance service providers for the customers. There are a lot of free insurance quotes which can be searched out via different web directories. The bank charges of different banks are varied according to the amount of the money which is given as loan. Now the customers are facilitated to get online credit card from all reliable companies. The debt is owed according to the value of the properties of the customers. The loan corporation has introduced the variety of credit cards, having different kinds of packages.

 Interesting article from Saturday’s Wall St Journal, and incredibly on-topic for the Real Estate Genius site! In Learning To Be a Landlord, Jeff Opdyke covers the pros and cons of getting into the landlording business by talking to a number of novice property investors. Some of the challenges faced by the investors he spoke with included:

• repairs taking much longer than expected, leaving properties unrentable in the meantime
• overpaying for the property, meaning the landlord could never get to positive cash flow
• the problem tenant, full of daily complaints
• underbudgeting for repairs
• the dreaded Christmas Eve “my toilet is broken” phone call

Opdyke speaks with an expert who points out that “You’re buying an income stream, not a pretty house”. And that pretty much nails it right there– it’s all about the cash flow!!!

You’ve got to have a good sense that the cash flow will work in your favor right upfront. That’s why you should always run the numbers with a real estate cash flow analyzer. It might only take a few minutes and cost you a few bucks, but it could save you from getting into a bad deal.

Very though-provoking article from the Wall St Journal this past week - Why Your Home Isn’t the Investment You Think It Is. Writer David Crook raises a number of reasons why it may not be appropriate to think of your house as a great investment, maintaining that people do not accurately calculate the returns on their homes– and if they did, they would find those returns to be unacceptedly low. Based on these misconceptions, people justify ‘maximizing their home investment’ by purchasing the largest house they can possibly afford, believing this will result in a larger gain.

A few of his reasons to dispute the crowd’s wisdom:

• Real estate recessions occur, and could cost you all of your profits and then some if one were to occur when you want to sell. Some recessions endure for years, limiting your ability to wait it out.
• It’s bad portfolio planning to put too many of your eggs in any one basket. If 60-70% of your net worth is tied up in your house, you are carrying an acceptably high amount of risk.
• Unlike other investments (stocks), homes have very high carrying costs. Even when compared with the annual fees on mutual funds and ETF’s, homes can come out as more expensive. Taxes, bills, fees, maintenance all add up.  People tend not to include these expenses when they calculate their profit on sale.
• Further, capital improvements can be very expensive, and usually are not fully recouped at sale, which may not even be until years later.
• Rent vs. own? Remember that owning is expensive to even get into- the real estate purchasing process is very inefficient, with broker’s fees, mortgage points, title searches, and all kinds of other miscellaneous charges which increase the cost.
• Appreciation may occasionally take off in certain areas, but that’s entirely dependent on where you live. It doesn’t do you any good that prices are soaring in California if you own in Iowa.
• Your profits on sale aren’t really profits, in that you don’t get to keep them. That’s because you have to live somewhere, so you’ll just wind up reinvesting your profits in another home… and meanwhile, home prices have been rising, so it’s going to cost you.

Interesting article, and worth thinking about. I don’t think he even raised the issue of the time value of money, ie. the downpayment you’ll eventually reclaim at sale will be worth a lot less to you due to your opportunity cost.

By Parsa Sepahi

1. Location: Your real estate investment’s location is arguably the most important component of your real estate investment portfolio. A good location, in terms of demographics, local economy and wealth distribution among other factors is critical for a success.

2. Value: the value of the property in terms of equity and growth is also critical to the overall investment portfolio. The property value needs to increase as time passes on and you always need to have a liquidation option that will minimize your risk potential of loss.

The general formula for calculating value is the Cap Rate. The higher the rate the better the investment, the formula is as follows:

Yearly Net Income of the Subject Property / Current Price of the Property

3. Financing: last but not least important factor in your real estate investment efforts is financing, a right investment loan will exponentially grow your wealth. The right leverage will allow you to acquire more properties and after one or two successful investments you can save your cash and grow your portfolio by using the right financial products.

The general formula for financing feasibility is the Debt Service Ration (DSR), which is simply:

Yearly income from rent collection - (Mortgage payments + other related property expenses)

These principles apply to both residential and commercial properties. Although there are several strategies to invest in real estate such as short term flipping or long term holding, these 3 mentioned components remain the same no matter which investment strategy you use.

Parsa Sepahi is the Co-Founder of INVESLOAN a Real Estate Investment Financing company. In the past several years he has helped many people use real estate investments to their best advantage and grow their wealth.

Article Source: http://EzineArticles.com/?expert=Parsa_Sepahi
http://EzineArticles.com/?Real-Estate-Investment-Financing&id=423706

The loan of various kinds is offered by the different money lenders and banks for the potential customers. For the growth of business investment, there is a need of adopting such useful strategies for flourishing the business. The cheap insurance leads are available by the different insurance companies. The creditcard is very valuable way of payment in the modern age. With the advent of internet age, the people are facilitated to work from home. The policies of debt are different from place to place and company to company. The pet insurance provides full security to the pets of the pet owners