Real Estate Investing Is A Better Gamble Than The Lottery
February 21, 2008
Real estate investing begins when you move to the starting point.
Get ready.
Get set.
GO…
Are you ready to begin a real estate investing career? Or, are you already investing in real estate some, and want to expand your holdings? Or, are you investing in real estate a lot, but want to streamline your operation?
If you prefer real estate investing to a J-O-B, here’s a tip on the real estate investing gamble for hitting the jackpot, striking it rich, and quitting that day job!!!
As one of my professors use to say, “Let’s commence, to begin, to start, to get ready, to GO.”
Do you bet on the lottery?
I am amazed at how many people throw their money away buying lottery tickets with such slim chances at winning!
Real Estate Investing - Free Vacations While Searching for Real Estate Acquisitions
February 20, 2008
Real estate investing professionals look for all possible tax deductions because of the generous profits derived from real estate investing.
For example, real estate investors are concerned whether the sale of their real estate is subject to capital gains taxation or qualifies as ordinary income. Determining this status in the sale of real estate investments affects net profit.
In addition to this consideration, tax deductions are allowed for expenses incurred in the normal operation of any real estate investing transaction. These deductible expenses include the costs of office supplies, professional fees, property repairs, and depreciation.
This article is not a legal or accounting commentary on IRS Code regulations, so you should ask your personal professionals about your qualifications for any specific deductions regarding real estate investing.
Consult with your accountant to determine if the search for new real estate acquisitions away from home would allow you tax deductions for travel, meals, and lodging.
If so, why not combine a vacation with a search for new real estate investing opportunities?
Tax deductible expenses always require that you obtain and keep all receipts relating to the property investment search while on vacation. Pick up newspapers, and mark properties investigated in the classifieds. Collect business cards of realtors contacted. Keep copies of submitted offers.
Basic Real Estate Valuation
February 19, 2008
Given the current interest (dare I say hysteria) associated with investing in dirt and buildings, I thought it might be interesting for our readers to have a quick, dirty manual on real estate valuation. My perspective comes from years in the industry as well as some time learning at the knee of some of the better real estate minds in academia.
I will separate (to some degree) investing in one’s residence, for consumption, from investing in real estate for fun and profit. The reason for this separation is that much of the utility or value of one’s home is locked in the pleasure one gets from living in it, or consuming it. Although there are certain ego strokes to owning large buildings, an edifice complex - if you will, the value associated with land, apartments, office buildings and warehouses is locked in the cash flow they provide or will provide. [That edifice complex comes in to play with large, trophy assets - I wouldn’t expect any of our readers to be buying the TransAmerica Pyramid or the Sears Tower, but there is an interesting argument as to why those buildings deserve premiums over their nearby competitors - that discussion will have to take place at another time.]
Real Estate Investing - Maximum Leveraging of Your Money
February 19, 2008
At this moment, you have access to some amount of money, from the extremes of only pocket change to the reserves of Bill Gates or Warren Buffet.
Suppose you want to invest your funds into some vehicle that will multiply the return.
You look around for the Return on Investment of various investment instruments. For every investment tool, varying deposit amounts of your funds are required. You must either put up your cash or guarantee payment from specified resources.
Real estate investing offers the maximum leverage potential possible for your funds.
I found a large house for sale 25 years ago. It was listed for $150,000, but had been on the market for an extended period of time because of its large size with an awkward layout. But when I walked through the house for the first time, I immediately envisioned how the layout was conducive to three living units instead of the single family home as it was constructed. I offered $10,000 down payment for the house for a reduced sales price of $100,000, and my offer was accepted. The upscale house is now worth $500,000 and has been refinanced numerous times to pull out cash. Yet, the three units have consistently returned a cash flow of much more than the mortgage payment for 25 years. Leverage from the $10,000 down payment is astronomical.
Buying and Selling Real Estate: Negotiating to Win-Win
February 18, 2008
You don’t get what you deserve - you get what you negotiate for.
If you’ve spent some time on homekeys.net, you probably noticed we generally don’t carry a torch for tradition or conventional wisdom. Having said that, the well-worn cliché above still holds true, especially in real estate transactions.
Many buyers and sellers put in countless hours carefully searching properties or preparing their homes for sale, only to see their sweet deals vanish at the negotiating table. Even if you’re not an experienced negotiator, there are steps you can take to improve results whether you’re buying or selling property. Negotiation doesn’t need to be a confrontational process if you set priorities, plan ahead and stay focused on issues, not personalities.
By far the largest expense related to traditional real estate transactions is the agent/brokers’ commission, and independent buyers and sellers should take advantage of this fact. Without the "overhead" of a 5-6 percent commission, both buyer and seller have a little more flexibility to come to an agreement that’s acceptable to both parties. Here are some negotiation tips for independent buyers and sellers.
Seller negotiating tips:
Set realistic priorities before you start.
Real Estate Investing ? FSBOs vs. Agent Listings?
February 17, 2008
Many would-be real estate investing professionals face discouragement because of the assumption that acquisitions require deep-pockets. Some even believe the myth that nothing-down purchases are impossible.
The early 1980s era in real estate investing known as the Zero Down Real Estate Movement was initiated by Robert Allen with his best-seller, “Nothing Down.” After observing how commercial properties were acquired with no money down, Allen applied 50 techniques from the commercial real estate industry to the residential property marketplace. He was reportedly paid $1 million advance royalties for his publication, and began holding real estate investing conventions across the country.
The Nothing Down era was a startling eye-opener to the public. Very few were aware of Allen’s predecessors, like Nick Nickerson, Al Lowry and Mark Haroldsen who wrote books on real estate investing requiring no money. Allen popularized the notion, and it was a strong public draw for his real estate investing seminars.
However, some of Allen’s convention speakers were ultimately revealed as “con men,” and some bellied up. Robert Allen himself went bankrupt in 1996. The public generally concluded that Allen was probably a fraud, and that real estate investing was impossible without deep-pockets.
The Art & Science of Property Valuation — Automated Valuation Models
February 16, 2008
It is no secret that sellers want to sell high and buyers want to buy low. But they often arrive at the negotiating table with very different ideas on price. A fair and objective property valuation can help buyers and sellers find common ground and streamline the negotiation process.
In the end, the property is worth what a buyer is willing to pay. But to help both buyers and sellers achieve their goals, both should have a fair and objective estimate of property value. Unfortunately, even objective estimates are still estimates, and there is no way to assure 100% accuracy:
* Appraisals performed by a certified appraiser are not 100 percent accurate.
* CMA’s (Comparable Market Analysis) and BPOs (Broker Price Opinions) performed by a licensed broker or agent are not 100 percent accurate.
* AVM (Automated Valuation Model) technology is not 100 percent accurate.
All these methods, when properly executed, can provide a good indication of value. Estimating value is a combination of art and science. Regardless of how scientific the approach, the actual sale price is subject to the unique variables of each property transaction: property condition, upgrades, current market conditions, circumstances of the sale and individual tastes.
Investment Property Part 2 of 2: What You Need to Know Before You Buy
February 15, 2008
Welcome to the second portion of a two-part series on investment property. In the first installment, "How Not to Become a Slumlord", we discussed a little of what it takes to own and operate a property as well as some of the do’s and don’ts of the property management trade. In this second segment, we will be discussing some pre-investment principles that will help you maximize your ROI.
There are three basic principles of investment property that you should know before you buy an investment property in order to avoid overpaying:
Time
How long do you plan on owning the investment property? As with stocks and bonds, the value of your investment may change significantly during the time you own it. While most real estate will appreciate in value over time, there are frequent fluctuations in the short-term market. If you plan on selling your investment property after less than five years, be prepared to accept the investment risk inherent in a shorter time horizon. This is especially true if you bought your property in an overheated real estate market. If this is the case, you could find yourself losing money if the market has taken a temporary downturn, especially if you’ve had to make major repairs to the property.
The Secret Jewel in the Mediterranean Crown
February 14, 2008
Since the Northern Cypriots famously voted ‘yes’ to the UN backed Annan plan for the peaceful reunification of Cyprus in 2004 the world has awoken to the secret and hidden beauty of this untouched jewel in the Mediterranean crown. Those open-minded and individual thinkers seeking elegant living, unrivalled Mediterranean-region investment property opportunities or their own hideaway are today embracing Northern Cyprus.
Discover a new world, discover a new opportunity, discover North Cyprus.
Basking in the beautiful Mediterranean, enjoying 320 days sunshine a year, with stunning natural beauty, a rich and diverse 10,000 year history, rare and abundant flora and fauna is Aphrodite’s island of Cyprus. The Northern third of this island paradise has the most beautiful and unspoilt coastline on the Mediterranean because during the 1960s and 1970s when bad building practices in the rest of the world allowed for ugly concrete high-rise buildings on every beach, Northern Cyprus remained completely untouched.
Today the forward thinking Turkish Cypriot people have been rewarded for their hard work in protecting their paradise and they’re proud to welcome visitors to their uniquely preserved island haven, to introduce new residents to their incredible quality of life and to embrace investors looking to nurture and develop this corner of heaven on earth.
10 Top Considerations For Those Buying Property Abroad
February 14, 2008
Are you one of a growing number of people considering buying a second home in the sun, an idyllic home from home abroad or a lucrative investment property overseas? If so you’re not alone! Statistics show that globally we’re all on the move with a recent survey by YouGov revealing that 55% of adult Britons were "seriously considering settling in another country" and the British Centre for Future Studies predicting that by 2020 one tenth of the current British population will be living or working abroad!
Add to this the fact that there was a 250% increase between 2000 and 2004 in the number of Britons buying property abroad solely for investment purposes, that over one and a quarter million Brits own second homes in Spain and France already and that the Office for National Statistics in the UK recently revealed that 200,000 Britons go overseas yearly with the intention of remaining for at least twelve months, and you can see that the passion for buying that dream home abroad is universal.
But what’s fuelling this ever growing interest in the overseas property market?
