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Articles
on Real Estate Investing
Unbelievable but true – more than two million citizens of the United States are facing foreclosure due to a missed payment or delay in repayment of there mortgages secured giants their property every year! The phenomenon of property foreclosure is escalating in the United States and more and consequently more people are selling off their homes at lower prices than their actual market value to avoid this unfortunate predicament of real estate foreclosure and seizure of the property by the lender organization. This is providing the real estate investors with magnificent opportunities of buying off property at much reduced prices and selling them at normal industry rates, thereby being able to keep a massive profit margin on each transaction. The phenomenon is given more impetus by the property short sale option that more and more homeowners are availing these days, which helps them avoid foreclosure and losing home. Since the homeowners can conveniently avoid and overcome foreclosure and the consequent forfeiture of their property by the lender entity, short sale is coming by as a very viable option. Short sale in most cases equips the homeowners with the authority of selling their homes at a rate less than what they owe the lender institution, that is, less than the loan balance, thereby clearing off the mortgage balance at a single go. The homeowner, instead of losing one’s entire property to the bank or the mortgage company, becomes entitled to receive whatever remains excess from the short sale proceedings after paying off to the mortgage company. This, combined with the bank’s willingness to short sale a property, has contributed towards the excess of short sale properties in the market. The bank, by encouraging short sale, also saves a lot of its effort and money, which otherwise would have been spent on conducting a foreclosure auction, refurbishing the property, finding an investor, and so on and so forth. The two factors have flooded the market with valuable property options, which provides the ideal platform for the US realtors and foreign investors to invest here. As a real estate investor, you can find yourself some good short sale companies, who will assist you in every aspect involved in closing a successful short sale deal. The short sale experts also offer you assistance in negotiating with the seller party and save you the otherwise involved hassles. You can simply relax and take count of the money the industry can fetch you. All you need to do here is simply contact the best short sale expert company and supply him with all the needed information that will help them negotiate each aspect of the deal. You can initiate with buying some of these properties and see what benefits and profits each of them reaps you in no time at all. The further impetus is provided by the increasing demand of real estate in the United States, which foresees no decline in the recent future. Possibilities are abundant in real estate in the US and greater are they if the property under consideration is a product of short sale. Massive interests and huge benefits – this is what the industry believes and this is what you to can get. Labels: Real Estate Investor - Investments
The foremost benefit of real estate investments is it is a steadily rising market as compared to the speculative stock market with its ups and downs. It is too well-known to need any reiteration that the stock markets range from quick highs to sudden drops. One can assert, without any fear of contradiction, that there is no other market is as profitable with such a low level of risk as investment real estate market. Since real estate investing is extremely profitable and equally safe, a large amount of amateur investors are entering the real estate market everyday. Almost every traditional investment opportunity requires the investor to have an excellent credit rating. In addition to an excellent credit rating, a real estate investor needs a fair amount of money for down payment.
The biggest incentive is the United States government has setup multiple tax breaks for real estate investors including the very popular 1031 exchange that states: "A 1031 exchange or Like kind exchange is defined by section 1031 of the Internal Revenue Code. This code specifies that if an asset, usually some form of real estate (i.e. land or a building), is sold and the proceeds of the sale are then reinvested in a like kind of an asset. By this occurring no gain or loss is recognized, allowing the deferment of capital gains taxes." The simple explanation of 1031 is that as long as you reinvest the money you made from your real estate investment into another investment you are not required to pay taxes on said profit. This makes a real estate opportunity a highly attractive proposition and it is evident that no other form of investment offers you such freedom with taxes.
There are potential rewards and the effort you put forth can yield disproportionately large monetary returns on your investment bringing in an attractive ROI. Please remember to acquire as much experience as you possibly can if you become an investment real estate investor or choose investment real estate as a career. Your confidence level will substantially increase when you have gained some experience and successfully closed the first few real estate deals. But, do not be carried away by any initial euphoria but continue to learn about real estate investing and learn to develop your investment skills by getting real world experience. In a short time you may find yourself managing a profitable and growing real estate portfolio of investment properties.
Do not fail to take advantage of outside finance as banks are willingly coming forward to lend money to buy houses. This is because unlike other forms of investing, banks have enough money to keep if you decide to foreclose. Banks are usually not as willing to give loans for stock or gold investing because the value of your stocks may dwindle by the time you sell them. And gold prices fluctuate. The worth of real estate, on the other hand, is always steady and may increase in value every year. Several hundreds of lucrative real estate investment opportunities are available in the market and with a little experience, knowledge, and desire, you can exploit them.
There is no denying the fact that real estate is today becoming a fast-paced and rewarding business proposition. Due to the high dollar amount of home sales, agents commissions are often very high which is what drives so many new people to into real estate every year. When you compare the time and money you spend for getting a real estate license, the potential yearly income you will make as a real estate agent, is formidable. Labels: Real Estate Investor - Investments
If a lender is willing to accept a discount on a mortgage to avert a possible foreclosure auction or bankruptcy, then it is known as a short sale. In other words, you are buying the property directly from the lender for a discount instead of from the seller. To clarify further, imagine a homeowner is facing foreclosure and has an existing first mortgage of $400,000, you directly make an offer to the lender for $320,000, which is to be treated as full settlement of the loan. This, in a nutshell, is called a short sale.
The question that obviously arises is why the lender should be willing to accept such a discount. One reason is banks or lending agencies do not like excess inventory and bad loans on their books. Thus, when they get a chance to sell the property without a huge loss, they may as well do it. Secondly, lenders are fully aware they could be bigger losers if the property goes to auction. They feel would be better off accepting the discount rather than the cumbersome route of auction.
Foreclosures are steadily on the increase, which means more and more opportunities for the real estate investor. It is advisable to accomplish a short sale when the property is in the pre-foreclosure stage.
One can visualize two different stages within pre-foreclosure. The first stage is when borrowers are behind on payments and the second stage is when those behind on payments are facing a notice of default. In order for you to successfully get a short sale, you must seek the homeowners who are in the second stage of pre-foreclosure. Once the notice of default has been recorded, banks also become agitated and so you are more likely to get a discount. All mortgages can be discounted immaterial what type of condition the property is in. You should more appropriately perform a short sale on the houses that need renovation and repairs because lenders will be more forthcoming in offering bigger discount.
However, foreclosure investment in real estate is not without its pitfalls. Foreclosure investing is certainly not a good approach for beginners. It is more for investors who have at least a couple of years' experience in real estate market. The profits from foreclosure investing are bound to be huge and that makes foreclosures attractive. But one disastrous foreclosure investment can wipe out your capital and your enthusiasm for all future investments.
There are three stages to buying properties in foreclosure process - buying at the pre-foreclosures, buying at the foreclosure auction, and buying from lender post the foreclosure sale. If you buy from the property owner before it goes to auction, you will be a beneficiary. Buying at the auction means if nobody bids, the lender gets the property. Buying from the lender after the auction is called buying REO (real estate owned) or Repossession. REO is less risky than in buying at the auction as REO is somewhat similar to a regular sale. The foreclosure purchase can also be risky. A pre-foreclosure seller might be desperate and mislead you about the condition of the property and the neighborhood. There might also be liens on the property that the seller may claim he forgot to mention. The big utility bills become the buyer's responsibility if the pre-foreclosure investor failed to check them out.
Labels: Real Estate Investor - Investments
It is everybody's knowledge that the value of a house is the cost of the land plus the cost of construction of the house. You can certainly add a premium if the house is architect-designed or has any extraordinary features.
Ascertaining the market value of land will not be difficult as any real state investor consultant will know the regularly updated cost of land. It may not be easy evaluating the value of the house as several factors like the age of the house, the structure of the house, the present condition of the house etc.
An old structure in a dilapidated condition will fetch nil value. Again if a structure is in poor condition and needs extensive repairs, it is quite likely that the cost of renovation may exceed constructing a new house.
The structure of a house can be of two kinds. It can either be a load-bearing structure or a Reinforced Cement Concrete (RCC) structure. A building where merely the brick walls support the roof, it is called a load-bearing structure. A house where the roof is supported on columns and beams is called a RCC structure. It is generally believed that the total cost of a RCC structure will be 10 to 12 per cent more than the cost of a load-bearing structure as the cost of the columns and beams have to be taken into account. The other items that add up to the value of the house are the doors and other wooden fittings, windows, flooring tiles, painting, metal fabrication, plumbing sanitary and electrical fixtures. The value of each of these items can alter the value of the house.
For instance, the windows can be made out of iron, aluminum or any other alloy. The flooring may be with marble, granite, vitrified or ceramic tiles. So the value of these items when taken collectively can drastically change the valuation figures.
In all such cases, you will certainly require professional help in ascertaining the value of the house. You have to invariably consult an architect, real estate valuer or an experienced civil engineer to assess the total cost of the construction and its present day value. If the house is a few years old, then consider the then cost of construction and add today's land value to evaluate the worth. The value of the building depreciates with every passing year. Verify with the banks the depreciation value and deduct the same from the total assessed value.
If the building contains rare materials or any other antique which are not available today, you will have to necessarily add a premium value for the same. Further premium may have to be added if a reputed architect has designed the house. Some houses have full landscaping, while others might lack any foliage or gardens which mean there should be value addition.
We can possibly reduce the whole process of evaluation to a simple formula. Ascertain the market value of the site, add the cost of construction, add premium, if any, to the value and deduct the depreciation. You can arrive at the value of the property.
Labels: Real Estate Investor - Investments
 Many consider property investment as the best method for wealth accumulation. Buying own home is often the first property investments many people make. Many analysts opine that buying your own home need not be first investment. When buying the first property you may have financial constraints and therefore would be compromising on several factors like locality, neighborhood, and lack of schools, shopping and hospital in the vicinity. It is preferable to buy a small apartment and start getting rental revenue. After accumulating the rental revenue over a period of time, you can buy your own place in an area where you want to live and commanding all facilities. Lately, most people belonging to the younger generation are opting for this method.
Property investments are attractive, risk-free and the value  appreciates rapidly and unlike stock markets there is no volatility. It has inherent potential to generate capital growth by way of an increase in the value of your asset as well as rental income. Property prices seldom decline but the real problem is the right tenants are difficult to find especially those who pay rent promptly and take care of the property. Property investors should study if higher rates of interest might affect their expected net return. They also need to make sure the return from their property is more than the return they might have got, had they made alternate investments. The primary or rather the only motive of all types of investors is to buy cheap and sell dear. This is especially true in the case of property investment where a substantial amount of capital gains can be realized when the value of the property appreciates over time  Real estate investment can be extremely profitable if treated as a business opportunity. The many advantages are - it can generate rental income, it can be used as collateral for raising fresh capital, it carries lot of tax benefits. Investment professionals advise that at least 15%-20% of an investor's portfolio should be in property or real estate. People who enter property management business are those who want to accumulate wealth and to do that well, they have to develop a plan and regularly calculate their income, their expenses and the returns on their investment. A good financier will be able to assist you with quick calculations over the phone if you have any allergy foe numbers. Nearly all investment properties are bought only with borrowed money given the leverage it offers the serious investor. Once you have decided on the type and quantum of loan, you will be able to estimate your borrowing costs over time and factor these into your cash-flow calculations. One of the major key to success in property investment is finding a good and reliable financier. As long as the interest rates are competitive, a good relationship with your lender can yield attractive returns.  If your financier has a full understanding of your financial position, he will be in a better position to lend you more money than one does not understand your business plans. You don't have to go through the tedious loan approval process because the lender already knows you and knows your business. If you succeed in tying up with a financier who truly understands your investment plans, you would have won half the battle in property investment business. Labels: Real Estate Investor - Investments
 The valuable real estate market for Fresno/Clovis/Central Valley/California, United States still burns brightly to attract investors. Real estate investment in USA will expand your real estate income.
Thinking of real estate investment in Fresno, Clovis, Madera, Sanger, Selma California, and Central Valley - Then don't divert your attention and take a risk before your vision travels through the following sentences. Research the United States Foreclosure Laws and Sales rules - do not forget to have an eye on the new laws and the revised foreclosure laws. Research the real estate market every time you think of investing in real estate. First-time investors must not excuse this procedure.  Be careful with "negative gearing" - a property investment method, extensively promoted as a genuine method of deferring tax and owing property, but this proves to be dreadful method. Avoid negative cash flow. This means you should avoid the property that is expected to consume your cash every month. Always select the investment option which tells 'You Pay the Taxman' as this results in positive cash flow. The Industrial properties, Shopping Centers, Office, and Multi-Family properties in USA proves too worthy for investment because of their increasing rents. Be sure to research each property you plan to buy. Research your buyers and renters thoroughly for a safe deal. Research the possibility of a Limited Liability Company (LLC) in US and the special rules of foreign LLCs. Thorough inspection, approval, and confirmation of all essential documents are a real must. Remember to get a bill of sale for all the properties involved. Take time to evaluate your needs such as financial statement, capital appreciation, tax benefits, home equity pay down, pride of ownership, and insurance claims for management of loss which includes financial loss, people loss, property and asset loss, information/ data loss, etc,.  Look out for the right property expert real estate agent for proper guidance in order to eliminate high risks, even if you are not the first-time investors. Remember to check out the seller or seller's agent Numbers - Be sure to have the right agent. Check the details such as rents, payment history, taxes, expenses, deposits, future modifications, etc. You may avoid your head- ache if you make a careful inspection of the property you decide to buy - about unusual or reoccurring pest problems, structural damage or reoccurring problems, and other associated problems. You must adopt a satisfactory insurance coverage. Before that, seek the advice from an expert insurance officer in order to protect your assets. Request the guidance of a right professional to choose the right property expert real estate agent. This is essential for a smooth transaction in all aspect. Opt for first-class tenants. This is quite simple if you enquire their previous house owners, employers, financial references, credit card judgments, etc., before choosing your tenants. This ensures to relieve you from unwanted problems in the future. Charge reasonable rents for your property. Have good terms with your tenants. Never fail to satisfy their reasonable needs. Make sure to get rental or lease agreement letter from the tenants for confirming the status of tenancy. Be careful with the contents of the rental or lease agreement. Be careful with your negative aspects before you invest. You must aim to decrease your debt load and increase your equity for a worthy investment. Labels: Real Estate Investor - Investments
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