As the real estate market begins to calm down, many worry about making a profit on their homes. Here's an example of the "follow the builder" profit strategy.Follow That BuilderIn many areas of the country, there are builders who build hundreds of houses each year within a fifty mile radius of each other. They build entire communities, or are one of three to five builders who build entire communities around big employment centers. This is...more
I didn't understand the concept of a real estate team at first, so I had a hard time with real estate investment. I tended to be a "lone wolf," trying to do too much myself. I have since learned that in real estate, you need a team of people you can trust and rely on. Here are some possible team members, and what they need to be on the team. 1. A mortgage broker or banker. A broker can offer many options, but a banker can make the loan decision....more
Below are ten categories of real estate, and different ways to invest in them. The best one for you is something only you can decide, according to your particular needs. To help you do that, I list a couple good points and bad points for each type.1. Renting single family homes. Good points: An easier way to get started, and good long term return on investment. Bad points: Being a landlord isn't much fun, and you typically wait a long time for the big pay-off. You also lose all your income when a house is vacant.2. Fixer-uppers. Good points: Fast return on your investment, and it can be more creative work. Bad points: More risk (many unpredictables), and you get taxed heavily on the gain.3. Low income housing. Good points: Similar to any other rentals, but with higher cash flow. Bad points: Similar to any other rentals, but with more repairs and tenant problems.4. Selling rent-to-own houses. Good points: If you buy, then sell on a rent-to-own arrangement, you get higher rent, and the buyer is usually responsible for maintenance. Bad points: Bookkeeping can be tricky, and most tenants don't complete the purchase (this can be an advantage too, but it does mean more work for you).5....more
Why should you consider refinancing real estate investments instead of selling them? Maybe you've owned a rental property for years, you've paid down the mortgage, the value is up, and you want to cash in on that equity. You will do better to refinance. Here's why.There are two problems with selling. First, selling means paying a large capital...more
It was a simple real estate formula. The ads ran in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. Maybe a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments. When a friend...more
Nothing down? Exactly why would a seller want to walk away from closing with nothing? The truth is, they normally wouldn't, and that brings up the most important point about real estate investing with no downpayment: A seller almost always needs cash at closing, but it doesn't have to be YOUR cash. Nothing Down - A Few WaysSometimes sellers are able to offer terms and a low or no down payment, but often you have to find a way to get at least 70% of the price to them in cash. This is not only so they can get some of their equity out, but also because they will probably need to pay off the existing loan. So to get in with nothing down, you need to think in terms of how to get a primary loan, then how to raise the money for the remainder. A couple examples follow.A few banks still do "no doc" loans, meaning they don't require any verification of income, source of down payment, etc. Since they generally loan only 70% to 80% of the property value, you need a seller who is willing to take a second mortgage from you for the other 20% to 30%, to make it a nothing down deal. They get 70% or 80% in cash, and payments for years to come. Since you'll have two payments, you need to be sure the...more
There is nothing worse than putting house up for sale and watching it sit on the market. Here are a few tips to sell your house fast. Sell Your House FastThe following tips will help you sell your house fast, but we need to cover something first. If...more
Hiring a property management company is a great idea if you have even a small apartment building. Having someone taking care of all the small details of a rental property means you'll have more time to find the next good investment. Also, trying to...more
So many people think that by getting into the franchise business, they are setting themselves up for an easy way to make money, with a safety net under them the whole time. The only real advantage is that you are buying into a business model that...more
Buying FSBO real estate, or houses for sale by owner, has its own particular problems and opportunities. Dealing with an uninformed seller who thought he knew enough to handle everything by himself can be frustrating, but it can also be very...more
For months, Joe Cline (not his real name) kept his frustration over longhours, cramped quarters and rushed deadlines at an Internet company underwraps. But last month, when his boss needled him one time too many, heerupted, lashing out with an...more
Mike M. was a senior manager for one of my large corporate clients, butyou wouldn't know he was on the fast track if you looked at his office. Heworked long hours, felt pressured, and was always playing catch up. Mike wasunresponsive to requests and...more