Making Money Flipping Real Estate | Real Estate Investing Tips

Have you ever gone past a house and thought to yourself, “That place has potential! With a little work, it could really be worth some money.” Do you have a burning desire to fire your boss and be self-employed? Once you learn a few tricks of the trade, you too can make money investing in real estate with a minimum risk level.

If you’re sick of scheduling hours and hours of overtime just to find yourself breaking even at the end of every month, consider flipping real estate part-time. Before you jump in with both feet and start flipping estate for a living, weekend home investment is a great way to find out if real estate investing is right for you.

While it is true that the housing market in the United States is changing, that doesn’t mean that renovating real estate can’t still be a lucrative pursuit. While it is true that you might have to wait longer than you’d like to sell your property once it’s all fixed up and ready to go, rest assured that the right buyers will come your way eventually. Investing in real estate is always a good way to make money, if you know the right way to do it.

Housing is a fantastic investment, and properties are currently selling for less than they were even one year ago. Because sales are sluggish, real estate investors have added leverage. If you find a fantastic fixer-upper, you have more negotiation power now that you’ve had in years. Sellers are often eager to sell their properties for much less than the listed price, which means more profit flipping real estate for you.

In an uncertain market, there will always be home buyers. People will still be getting married, having kids or relocating for new job opportunities. The trick is to keep the needs of the market in mind when you intend to make money flipping real estate. Look for affordable starter homes for young families that you can buy at a bargain. Then, make modest and practical improvements, like attractive yet inexpensive kitchen improvements, fresh paint and vinyl siding.

Also, you will need to research tax law when it comes to flipping properties. You may wish to hire an accountant to ensure that you don’t end up with the IRS chasing after you. Also remember to calculate taxes when you are figuring out your profit margin and figuring out the return on investment of your property.

Look into foreclosure properties if you want to find a really great bargain. Foreclosure properties make it easy to make money flipping real estate, since they are usually auctioned off for much less than they are actually worth. Be careful not to get caught up in the excitement of the auction, however. You may need to chase after several different foreclosure properties to find the one with the best potential for you.

If you are smart about it, you’ll make money investing in real estate in any kind of economy. You just need to know how to invest in potential and invest with patience when homes aren’t selling as fast as you would like them to.

C. David Roberts is a Mechanical Engineer, software developer and has 
extensive experience in residential development and construction. His combined 
experience has lead him to develop the Real Estate industry leading software to 
teach experts and neophytes the secrets of flipping houses. 

Making Real Estate Money-A Real Estate Mentor is What You Need

There are a lot of new, energetic, and enthusiastic investors today. They are so full of aspirations and dreams and they want to make them come true by investing in real estate. It is nice to see bright faces beaming with vigor, but reality speaking, most of them will quit after a month or two. Why? It is because their energy is not enough to make a successful real estate career. What they need is knowledge. A common investor's mistake is being so complacent after one successful deal. Learning while earning is very important. If you want to invest in your knowledge, a real estate mentor is what you need.

A real estate mentor is someone who has the expertise, knowledge, and experience in the real estate investing business. He is willing to share his ideas and understanding so you too can be successful in this field. Finding the right real estate coach can make a lot of difference. You can find inspiration, motivation, and a lot of information.

Real estate lessons are usually in the form of manuals, pamphlets, articles, video, and audio materials. The danger with these materials is that some of them have vague and abstract information. A good real estate coach uses materials that are reader friendly and comprehensive. For beginners in the investing realm, it is important to learn the definition of common terms. A good reading material should be easy to read. However, it takes the initiative of the learner to ask his real estate mentor the things that he finds complicated. The learning process should involve an open communication between the investor and the mentor.

A real estate mentor should teach you how to really make money in the real estate business. It is not that easy of course, but at least he can offer you a step-by-step procedure on how you're going to deal with your real estate transactions. He must provide you with clarity and not confusion.

Make sure that your money is worth the knowledge you are getting. Trust only the best. You can check the credibility of your real estate mentor by reading his works and knowing about his background. Don't be deceived by fancy talks or discounted mentoring prices. You should get more benefits from him and not the other way around.

Read more: http://www.articlesbase.com/real-estate-articles/a-real-estate-mentor-is-what-you-need-2737236.html#ixzz0sCQip6cS
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Making Real Estate Money-Great Ideas for Finding Pre-Foreclosures and REOs

These are the tools and techniques I've used successfully when looking for pre-foreclosure and REO properties. I hope other investors find them as useful as I have.

Pre-foreclosures

The availability of pre-foreclosures depends largely upon the type of debt instrument recorded against property titles in each state, mortgages or deeds of trust (also called trust deeds or TDs).

TDs contain a "power of sale" clause that basically allows lenders to exercise their right to repossess collateral (in this case, real estate) for a loan in default WITHOUT having to file a lawsuit; mortgages do not.

Generally speaking, we prefer mortgages because TD foreclosures move too quickly (whereas lawsuits are slow and cumbersome) and provide limited visibility (mortgages have more public records associated with them, therefore they're easier for us to find).

To make it confusing, some states require lawsuits for ANY foreclosure, regardless of the debt instrument recorded; that's okay- -it's the suit itself that gives us time to be able to work with the property owner, so those statutes actually work in our favor.

You'll probably want to do some due diligence just to make sure you're not wasting your time trying to go down an avenue that turns out to be a dead end.

To find out if pre-foreclosure is an option for you, call the County Recorder (or Recorder of Deeds) and ask them what type of debt instrument is recorded against a property's title when someone takes out a loan to make a real estate purchase.

If the answer is "a mortgage," you're on your way; if the answer is "a deed of trust" or if you don't get a clear answer, you'll need to do some additional research into state laws to find out what the foreclosure process is.

Try looking for statute, code, administrative law, etc. in Primary Materials under the "U.S. State Resources" section ofwww.findlaw.com. (Excellent material, and all FREE).

Finding properties in pre-foreclosure

Here are three ways to find properties in pre-foreclosure:

1. Try contacting your local county court. Ask if Notices of Default (NODs) have to be recorded as court documents. If the answer is "yes," find out how you can search the new filings; if the answer is "no," try one of the other options below.

2. Find out if the County Recorder has data available online.An easy resource to use is www.netronline.com. Simply click on "Property Data Online," select the state you want, then click on the county, and voila! You'll be able to see what (if any) info is available over the Internet through the various real estate-related offices in that county.

This is my preferred method because the county I live in makes title abstract data available on the web. Plus I can do what's called a KOI (Kind of Instrument) Search and look specifically for NODs that were filed on or after a certain date.

I do most of my research this way because it's easy and convenient, it's FREE (I love that word!), and I can also see any other liens or judgments that are be recorded against the property that could adversely affect the deal. If this option isn't available in your county, try option #3.

3. Look in the "legal notice" section of the newspaper. Look for properties that are coming up for sale at public auction (sheriff's sale, trustee sale, whatever), jot down the addresses, the property owners' names, and the tax ID, or at least as much info as you can get from the ad.

Then go to the County Recorder's office to look up those properties, find the NOD on the title, and see who recorded it; you're looking for a title or abstract company that you can work with. They provide you with a list of the NODs they've recorded, and when you close on any of those deals, you use their services for closing ("you scratch my back, I'll scratch yours"). I've also used this approach in the past with great success as well.

Finding REOs

First of all, keep in mind that most lenders list with realtors for a specific reason (cost-effectiveness, driven by several different factors), so we should respect that business decision and not try to work directly with the bank on REO properties until the realtor becomes more of a hindrance than a help (happens more often than not, unfortunately). But try these steps, not in any particular order:

1. Most lenders these days have web sites. They may have a list of their REOs posted along with contact info for the realtor listing the property for them.

Every lender's web site is different, of course, so you'll just need to nose around a bit; sometimes those listings are buried in some obscure corner of the web site. If I'm poking around on some lender's site and can't find what I'm looking for in less than an hour, I try a different approach.

2. Call lenders and ask to speak to someone who handles their foreclosures. (or REOs, or repos, or their real estate portfolio, or whatever they call them). Ask that person for the names of the realtors they use to list foreclosed properties. If he says anything like "Sorry, we don't have any foreclosures," I find it very hard to believe that in this economy they haven't had to foreclose on any of their mortgages.

So it's more likely that I've reached a branch office and those repossessed properties aren't handled locally; they're all sent back to their corporate office to be managed at a central location, or they've been farmed out to an asset management company. Again, ask for the name and phone number of the person at Corporate who handles foreclosures.

3. Pay attention to business signs! Believe it or not, there's a realtor's office on one of the main streets in my town whose marquee says: "FREE FORECLOSURE LISTING, NO OBLIGATION, CALL TODAY" I did, and got another list to start working on and a good contact to boot.

4. Check newspapers Check not only the local dailies, but also the "cheapie papers" like the Thrifty Nickel, Penny Saver, Green Sheets, etc. for ads posted by realtors with REOs they're trying to sell:

• 
  
  Lists of properties that the realtor has: The ad will mention "bank owned," "foreclosure," "free list," etc. and will have a person's name or the name of a realty company and a regular phone number.
  
  NOTE: I do NOT like ads that are only for government foreclosures (i.e., nothing but FHA, HUD, VA, FNMA-owned properties); I don't know who I'm calling, there's a "free 24/7 recorded message" or a toll-free number with an extension. These are usually subscription services, and more often than not, I find that their data is very limited, out-of-date, and over-priced.
• 
  
  Individual foreclosure properties: Look for listings with key words like "bank owned," "foreclosed," "REO," "repo," etc. If that realtor has one foreclosed property, most likely he's got others.

5. Attend the next public auction. Not to buy property, but to make note of what DOESN'T sell. Jot down the addresses, then a couple of weeks later, drive by to see if there's a sign in the yard. That's probably the realtor who's selling the property for the lender. And again, if he's got the one foreclosure, he's most likely got others.

Regarding option #3 for finding pre-foreclosures and ALL of the research options for REOs, these aren't necessarily ongoing processes; they're just groundwork. Once you have those foundations laid and those relationships built, you probably won't have any need to continue to do these things. Always remember: Be polite, but firm, and be persistent. Hope this helps…Best of luck! 

Making Real Estate Money-Subprime Meltdown Creates Opportunity for Investors

The so-called day after "hangover" from the fast and loose lending spree that helped fuel the real estate boom during the first half of this decade keeps getting worse, with a continued fall out among lenders who catered to high-risk (or "subprime") borrowers. Several dozen lenders have closed their doors because the Wall Street firms who have provided their funding will no longer do so.

What is a subprime mortgage?

Generally speaking, it's a home loan made to borrowers who have low or no down payments and/or poor credit ratings. Although most home loans do not fall into this category, subprime mortgage programs have proliferated in recent times as the "rising tide that lifts all boats" propped up home values across the country and emboldened lenders to take on more risk.

As real estate values moved higher after 2000, lenders expanded the use of subprime loans, adding enticing features that made home ownership possible for people who could not qualify for traditional mortgage loans.

What went wrong?

Increasingly, lenders approved subprime loans to shaky credit borrowers with little or no proof of income, little or no down payment funds, and with low "teaser" starting interest rates and payments. Some of these "stated-income" loans became referred to as "liar loans."

Wall Street encouraged this behavior by bundling the loans into securities that were sold to pension funds and other institutional investors who were seeking higher rates of return.

Seasoned real estate industry professionals watched the trend toward "easy money" loans with concern. As risky home loans soared in popularity, federal banking regulators were repeatedly warned that more borrowers were getting trapped in mortgages they simply could not afford.

As long as home values rose, borrowers gained equity and could continue to refinance. However as interest rates rose and home values declined or flattened many borrowers could no longer get new loans and could no longer make their payments when their initial teaser rates expired.

Rising defaults and delinquencies have caused more stringent underwriting standards and in some cases the outright elimination of certain loan programs.

The "Piggyback 2nd Lien" Here is an example:

Property Sales Price: $300,000
Buyer's Down Payment: $15,000
Balance Due: $285,000
1st Lien Loan 80% LTV: $240,000
2nd Lien Loan: $45,000

A prospective buyer with shaky credit purchases a home for $300,000 and can put down 5% of the purchase price or $15,000. The lender agrees to lend the buyer/borrower a 1st mortgage loan for 80% of the sales price or $240,000.

In addition to that mortgage, the lender also agrees to lend the remaining $45,000 to the buyer by allowing for a 2nd lien mortgage to be placed against the property, often known as a "piggyback" 2nd lien mortgage.

So the buyer borrows a combined total of $285,000, and along with the $15,000 down payment is able to cash out the seller completely for the $300,000 purchase price.

Typically the interest rates on the 1st lien mortgage are lower than that of the piggyback 2nd lien mortgage, which in some cases is called a Home Equity Line of Credit (HELOC) loan that is then drawn on.

As long as the lenders were able to continue to originate these piggyback 2nd lien mortgages and Wall Street continued to have an appetite for them, this was wonderful for the sellers because they were getting ALL CASH for the sale of their property.

Prudent lending or not?

Let's take a look at that very tenuous $45,000 piggyback 2nd lien and see how unsafe it really can be. With a buyer/borrower who has little or no money of their own into a property, there is little or no true equity. If times get tough for such a borrower, the incentive to work things out becomes precarious.

Add to this the sloppy credit history of the borrower, and that 2nd lien mortgage carries with it a tremendous amount of riskbecause it sits behind or "junior" to a much larger (and superior) $240,000 underlying 1st mortgage lien. Its no wonder Wall Street will no longer purchase such high risk "throw away" 2nd lien mortgages.

Cause and effect

Now buyers, their Realtors, and the buyers' mortgage brokers are trying to convince sellers to carry back the $45,000 piggyback 2nd lien mortgage. Yet most sellers can clearly see how uncertain and perilous holding such a smaller 2nd lien mortgage can be to their financial well being and refuse to do so except underextreme circumstances.

An alternative way using seller financing

What if you could structure the sale of a property to a prospective subprime candidate and not have to take back any high risk dangerous piggyback 2nd lien mortgage while still achieving a respectable all-cash sum when your property sells? Might this make more sense to a property seller?

Using some of the creative and alternative methods involving the seller providing the financing (owner financing), this is very achievable. Let's take a look how:

Property Sales Price: $300,000
Buyers Down Payment: $15,000
Balance Due: $285,000
1st lien Loan 95% LTV: $285,000 (seller financed)

Step one:

Let's the same $300,000 sales price and same $15,000 cash down payment from the buyer. However . . .

Instead of the buyer being limited to only 80% loan to value (or $240,000 loan from a lender), the seller agrees to finance the buyer under the terms of the sale and agrees to take back a purchase money mortgage in the amount of $285,000 (the $300,000 sales price minus the $15,000 cash down payment).

Step two:

Now I know what a lot of you are saying: "If I provide seller financing to the buyer, how does that equal me getting cash?" The second step is the answer, and it involves the pre-sale or conversion of this $285,000 seller financed mortgage into a cash lump sum.

Assuming that

1. 
   
   Some time was spent checking out the prospective borrower's employment, stability, overall credit profile, and credit scores, and
2. 
   
   The negotiated repayment terms of the seller financed instrument were commensurate with how strong (or not) these borrowers stacked up,

. . . then (using the services of a cash flow professional), the $285,000 seller-financed mortgage can typically be sold immediately to generate somewhere between $256,000 to $262,000 or more as a lump cash sum.

The seller receives the $262,000 cash sum from the sale of their seller-financed mortgage plus the $15,000 down payment--or a total of $277,000 in cash proceeds and it negates their having to hold a very, high-risk $45,000 piggyback 2nd lien mortgage as in the example above.

Many sellers--especially investors, holding unsold homes in "inventory" will agree that $277,000 cash in hand today is far better than $255,000 cash (the $240,000 1st lien mortgage proceeds plus the $15,000 down payment) and a high-risk $45,000 piggyback 2nd lien mortgage they may have trouble later collecting on in the future. 

Making Real Estate Money-Beware the Blue Sky--The Current Housing Market

Despite the obvious bursting of the housing bubble and the associated freezing up of credit markets, many (suspiciously self-serving?) forecasters and investors suggest that the housing slump is close to bottoming out--or soon will be!

Even now, TOFKAOOATT (The Organization Frequently Known As Overly Optimistic All the Time) aka the National Organization of Realtors (NAR) projects that existing home sales will gradually rise over the next year as "pent-up demand is unleashed."??? This would be great news if it made any sense.

But it doesn't! Aside from the growing problems in the financial system and credit markets, there is the massive problem of falling home prices.

Today's housing market--a unique situation

In the 45 years prior to 1995, house prices (adjusted for inflation) barely rose at all. During the past decade, house prices nationally rose by 70% more than inflation.

Consequently, an estimated $8 Trillion in "bubble wealth" was created. That's a lot of "Blue Sky" in the real estate markets right now!

In fact, in its most recent quarterly study, Global Insight (a leader in economic analysis, forecasting, and market intelligence) concludes that despite falling home prices, housing remains overvalued in 208 (63%) of the 330 U.S. metropolitan areas examined and is "extremely overvalued" in half of those.

The report points out a critical caveat for real estate and real estate note investors:

Housing markets tend to adjust very gradually, and price declines have historically averaged 18 quarters in duration.

Heaven can wait!

While the NAR waits for the "pent-up demand" to be unleashed, we're more cognizant of the"pent-up supply" of housing that is growing relentlessly. It's too early to tell how bad things will get before they start to get better; however, a "soft landing" isn't likely.

The foreclosure problem has really just started. Subprime resets will peak in 2008; but "Pay Option ARM" and "Alt-A" loan problems will not peak until 2011. Perhaps we'll see a "dead cat bounce" in 2009; maybe another in 2010--before the final collapse heading into 2012.

A harbinger of what's to come

With about 14 quarters of probable price declines ahead of us, home prices are only down about 5% percent from their peak of late 2005-mid 2006.

Though the worst decline since The Great Depression, given the unprecedented price explosion and the fundamental detachment of housing costs from any affordability rationale, there is no question that this is but a harbinger of what's to come.

The upshot? There is still a lot of "Blue Sky" out there.

Anyone who purchases housing for anywhere near these fantasy-based asking prices will suffer losses for years to come--UNLESS they apply critical AND sensible economic fundamentals to their valuation model and discount their purchase price accordingly. The same caveat also applies to note buying--perhaps even more so.

Truth or consequences?

The core problem is that millions of people bought homes in a marketplace not unlike that which fostered Tulipmania, the famous "commodities crash" that gripped Europe in the 1630s.

Like the tulip-crazed buyers back then, "house-crazed" buyers borrowed too much money over the past decade, buying into an every increasing price bubble, that had absolutely no basis in "utility value."

Predatory mortgage lending worsened the present situation, but interest rates are not the problem and cannot fix the problem. The bottom line is that too many people bought too much house.

Since the housing market went completely insane in 2002, home prices in many areas are still seriously disconnected from fundamentals far beyond any historically known relationship to either rents or salaries.

Never before in our history has it been so cheap to rent relative to own. Rents are as low as 40% or 50% of monthly mortgage costs (vs. historical 10-year average of 92% rent-to-mortgage ratios) in various parts of the country; and yearly rents are as low as 3% of purchase price.

The harsh reality is that salaries cannot cover mortgages at existing prices. Home prices need to fall at least 20% to 30% to reach equilibrium in many markets, according to a recent report from Wachovia Corporation in December 2007.

In some areas 50% to 60% price declines are considered very possible! We are already seeing builder discounts in many areas of 30% or more on the same models as last year, not including increased concessions. Condos are down 40% or more at auctions. Prime buildable lots have dropped as much as 60%!

To put these price declines into perspective, both the S&P/Case-Shiller U.S. National Home Price Index and the OFHEO, Purchase Only, SA index show that a 15% nominal price decline would roll prices back to late 2004, for both indices.

At a 30% price decline, Case-Shiller moves prices back to mid-2003, and OFHEO, 30% drops prices to late 2002. And a 50% decline would carve home prices all the way back to 1997 levels!

Not all areas will see the same price declines of course, but these indices provide a gross estimate of the number of homeowners with no equity, based on price decline assumptions.

At the end of 2006, there were approximately 3.5 million U.S. homeowners with no equity or negative equity (7% of the 51 million household with mortgages). By the end of 2007, the number will have risen to about 5.6 million.

If prices decline an additional 10% in 2008, the number of homeowners with no equity will rise to 10.7 million. And that is more than likely, in light of how the market is shaking out of its chimerical folly today. Many areas in the country are just beginning to see prices plummet.

So, how do private note investors and creative real estate investors turn all this baloney into prime rib? By taking a hard look at reality, adapting to it--and perhaps even help reshape it!

Where's the beef?

To paraphrase from a quiz that uberinvestor Warren Buffett presented to Berkshire-Hathaway shareholders at their annual meeting in 1998,

"When you are buying hamburgers, would you prefer that the price of hamburgers is going up or going down? Likewise, if you expect to be a net saver during the next five years, should you hope for a higher or lower [real estate] market during that period?

"Many investors get this one wrong. Even though they are going to be net buyers of [real estate] for many years to come, they are elated when [real estate] prices rise and depressed when they fall.

"In effect, they rejoice because prices have risen for the 'hamburgers' they will soon be buying? This reaction makes no sense. Only those who will be sellers [of properties] in the near future should be happy at seeing [real estate prices] rise. Prospective purchasers should much prefer sinking prices."

If we are to choose the advice of any investment "guru" out there, we can do a lot worse than the "Oracle of Omaha". We can also see that these present times, as painful as they are, will prove to be an epochal time of wealth building, if we position ourselves correctly.

Discipline and patience rule the day! Creative real estate investors and note buyers will need a new way of looking at the marketplace.

This will require the ability to ignore the hyperbole of the marketplace generated by builders, real estate agents, mortgage lenders, and unscrupulous appraisers and maintaining an intense focus on the economic factors specific to that community.

Toss out the concept of "fair market value" for the most part, and focus on "economic value" based on"affordability."

Much as Global Insight's report, you'll need to consider household income, population density, interest rates, current and former house prices, and historical data, to determine what house pricesshould be. Adding "rent costs" vs. "owning costs" metrics to the mix is a sound strategy as well (and a topic for a future article).

Though "Risk vs. Reward" is the rule of the game, "Keeping What You Have" is the name of the game. To that end--"Don't Buy Blue Sky!" 

Making Real Estate Money-Top Ten Mistakes

Real estate investment is perhaps one of the most lucrative forms of investment today. But it is also equally risk bound especially when one is not well versed with the trends and nuances of the real estate market. So if you are contemplating on investing in real estate, it is best to avoid costly mistakes in real estate investment especially when you invest your hard earned money into it. Knowing the most common mistakes made by real estate investors helps one steer away from making such mistakes in the future and ensures good return on investment.

Here are the top ten mistakes made by real estate investors, according to bankrate.com. Bankrate has put together the top ten mistakes after speaking to established, full-time real estate investors and other professionals involved in real estate investment such as bankers. Read on to know them and avoid them.

1. Not planning up ahead. Lack of a proper plan is the biggest mistake made by novice investors. Finding a house after forming a proper investment strategy is the right way instead of looking for a house to fit the plan. Many make the mistake of buying a house because it seems to be a good deal and then trying to see how they can fit it into their plan. Instead of buying a house and thinking one can plan in due course, investors should rather concentrate on the numbers and try to make offers on multiple properties. This will ensure a good property that not only matches their investment model but also works out well with the numbers they had planned for.

2. To believe you can make money quickly. The second major mistake that real estate investors make is to think it is very easy to get rich in real estate. This is only a myth and the reality is that investing in real estate is a long term project.

3. Doing it single-handedly. For becoming a successful real estate investor one needs to build a team of professionals who would assist the investor in his deals. This would ideally include a real estate agent, an appraiser, a home inspector, a closing attorney and a lender.

4. Making excess payment. One another reason that investors in real estate goof up in their investment is by paying too much for the properties they buy. Paying too much and locking up all the funds in the erred property deal will leave you with no money to redeem yourself.

5. Leaving out the groundwork. Not doing your homework could be a costly mistake if you were a real estate investor. Every field of business needs sufficient amount of homework to be done, and real estate investment is no exception. Learn the fundamentals and then venture into investing in properties.

6. Throwing caution to the winds. Investors have to exercise a certain degree of caution and take earnest efforts while making a deal. New investors often fail in this regard and sign a deal without doing adequate research on the property.

7. Miscalculating money flow. Investors whose strategy is to buy, hold and rent out properties need to ensure sufficient cash flow for maintenance. Property managers could be expensive and the owner has to incur more expenses such as mortgage, taxes, insurance, advertising costs etc. Investors have to allocate their budget such that all these expenses are taken care of, or end up having their asset turn into a liability.

8. Lowering the volume. A larger volume of deals or transactions helps in increasing the profits by reducing the impacts of marginal deals.

9. Getting trapped in your own deal. Having more number of options at hand for the property you buy is a wise strategy. This helps one to be prepared for fluctuations in the real estate market. Plans to rent out the house could go awry when the rental market slumps. Having alternative plans helps you cut down losses and tackle unexpected situations.

10. Making incorrect estimates. People who plan to rehab their house need to check if they will still reap the benefits at double the time that they had estimated. This ensures they do not miscalculate and lose money on the deal.

Making Real Estate Money-Flipping Houses

It’s hοnеѕtƖу common tο hear аbουt people whο mаԁе thеіr fortune аt thе stock market. Bυt, уου аƖѕο hear аbουt people whο fіnіѕhеԁ up losing everything, fiddling іn stocks. One hardly hears аbουt real-estate agent investors whο wеnt bankrupt, thеrе’s a simple reason fοr іt аnԁ thаt іѕ іt doesn’t happen. Those whο invested іn real estate many years ago аrе leading a comfortable lifestyle. Real estate іѕ аn diligence whісh саn bе guaranteed tο garner pretty ехсеƖƖеnt returns.

Things tο consider: Thеrе аrе a few vital lessons whісh уου need tο keep іn mind, number one іѕ tο ɡеt a ехсеƖƖеnt insurance. Mаkе sure уουr asset іѕ fully insured, including thе extras Ɩіkе tenant hυrt аnԁ loss οf rental income. Bе warned though, don’t under insure thе house, іn case уουr house burns down, аnԁ thеrе іѕ a suspicion οf arson, thе company wіƖƖ conduct thеіr οwn investigation аnԁ wіƖƖ really charge уου fοr thе privilege! Sο read thе fine print carefully previous tο deciding οn уουr agency.

Flipping: “Flipping Houses” investment іѕ thе latest fad іn real estate investment, flipping homes іѕ nοt exactly аbουt passive income аѕ many people assume іt tο bе. It’s аbουt qυісk, wholesale flips аt minimal risk аnԁ cash outlay. Flipping houses іѕ a relatively low risk proposition аnԁ wіƖƖ boost уουr income qυісkеr thаn anything еƖѕе. Bυt, thеу hаνе come under scrutiny wіth many agents being jailed fοr flipping houses. Real estate flipping іѕ реrfесtƖу legal, free exchange οf goods аnԁ services fοr valuable considerations. It’s whеn loan flipping іѕ mixed wіth mortgage fraud thаt іt becomes illegal, thе media іn аƖƖ іtѕ glorious ignorance hаѕ sort οf latched onto thе term “flipping” аѕ thе key word іn describing thеѕе scams.

Controlling cash flow: Thе best way tο determine thе market value οf a property іѕ bу investigating thе sale prices οf nearby properties. Tax laws mау change ѕο don’t try tο foot уουr tax investments based οnƖу οn current tax laws. Real estate іѕ a varied field; try tο сhοοѕе thе area іn whісh уου feel comfortable. Yου саn еіthеr focus οn low down payment, fixer-uppers, condominiums, smaller apartments οr foreclosures. If уου аrе renting out, gather information regarding уουr tenants аnԁ thе mοѕt vital thing іѕ tο collect thе security deposit whіƖе closing. Bе wary οn unenthusiastic cash flow, properties whісh eats іntο уουr cash аnԁ whісh саn wreck уου financially аnԁ emotionally. Always scrutinize thе property previous tο investing, іf looked-fοr hire professional inspectors tο examine thе property. Dο уουr οwn research , thе agent mіɡht ѕhοw уου thе akin rates thus mаkіnɡ thе property look valuable, search MLS listings tο ɡеt a better thουɡht.

Mοѕt importantly, a real estate investor mυѕt learn tο emotionally detach himself frοm money. Thе attachment tο money brings οn a level οf ԁrеаԁ whісh restrains thеm frοm taking risks. Lіkе аnу business, іt іѕ possible thаt уου mау lose money along thе way, іn thе real estate business. An emotional attachment tο money сουƖԁ cloud уουr perspective аnԁ ultimately уουr сhοісе mаkіnɡ ability.

Brad Wozny іѕ a real estate investing expert. Lеt Brad ѕhοw уου hοw tο connect wіth kееn real estate investor buyers & sellers οf INVESTMENT properties. Access private money & creative lending resources. Claim уουr FREE Strategic Investment Manifesto аnԁ Download уουr 2 FREE real estate investing mp3 case studies аt http://www.instantrealestatesolutions.com .

Making Real Estate Money-REITS

I personally believe that the real estate market has bottomed out, but it may a couple years before prices start to move up. It doesn't necessarily mean that you should go out an buy a rental house, but there are other ways you can invest in real estate.

One of the best ways of speculating on real estate is through the use of Real Estate Investment Trusts, more commonly known as REITs. These investments pass through almost all their income to avoid double taxation, which is what most regular corporations are subject to. The REITs have several advantages over owning real estate directly.

First, REITs are liquid. If you need to get your money out, you can sell it and get your money in two days. Second, you can receive a decent income through dividends. Third, dividends can be received quarterly or even monthly for some REITs, just like rental income checks. Fourth, you don't have to worry about making sure the insurance, property tax, and other expenses are paid. Fifth, you won't get a call at two o'clock in the morning about a leaking toilet. And last but not least, you don't have to deal with evictions.

Although there are hundreds of REITs to choose from, you need to be cautious about which one you choose, especially the debt level. In terms of specialties, you can choose REITs that invest in apartment, commercial, industrial, government building, medical buildings, mortgages, and many other sub-categories.
Zeromoneyinvestment.com has just come up with a list of 15 of the highest yielding Real Estate Investment Trusts, none of which have debt to capital ratios more than 25%. As a matter of fact, three of them are debt free. Yields range from 3.3% to over 20%, but I would recommend avoiding any REITS yielding above 7% as I don't believe those high yields are sustainable.

One example, is National Health Investors Inc. which pays a decent yield of 5.7% and has a debt to capital ratio of only 7.21%. The REIT invests in health care properties, mainly those involved in the long-term care industry. The company has been paid quarterly dividends since 1992, The total dividend payout is $63.64 million on an operating income of $72.96 million. The company showed an earnings growth for the latest quarter of 5.9%.

Another high yield REIT is LTC Properties, Inc. (LTC) which sports a yield of 6.25% and carries a low debt to capital ratio of 7.94%. This is another long-term care real estate investment trust. This is a REIT that pays monthly dividends, and the dividend track record dates back to 1992 also.

Public Storage (PSA) offers a yield of 3.51%, and has a debt to equity ratio of 5.53%. This REIT has a different approach to the REITs described above, as it owns and operates self-storage facilities in the United States and Europe. The company has a long track record, with monthly dividends paid since 1988.

Read more: http://www.articlesnatch.com/Article/Creative-Real-Estate-Investments-----Zero-Money-no-Money-Down/1250320#ixzz0rBNzfXIC
Under Creative Commons License: Attribution No Derivatives

Making Real Estate Money-Multitasking

Real Estate Investors And Multitasking Skills

There are plenty of jobs and careers out there that require multi-tasking.  Being an entrepreneur is no different and in fact I would venture to say that as an entrepreneur multi-tasking is a must and a skill you have to master (or delegate to an employed who has that gift).  There are two different areas in real estate investing you should have multiple solutions for: getting stuck in one way of doing something for your business and being limited in your sources of income.

Too many times investors’ keep doing things the same way and wonder why it’s not working like it did when initially started.  For example, whether it may be certain vendors they use, a marketing method, an employee, an income stream, and an exit strategy. What I mean by all that is, ask yourself this one thing - if one of these sources or one of these things that you are dependent on were eliminated or were taken away from you, would your business still survive on a regular basis?

For example, if you have only one marketing method to find properties and that’s putting out We Buy Houses signs and all of a sudden a new mayor comes in and gets elected and they crack down like you wouldn’t believe on illegal signs and bandit signs. If that were your only marketing method for finding leads, then what would happen to your business? Would you still survive? Would you still be able to get paid?

If the answer is no, then obviously here you need to find different methods for marketing your business. If you are relying on a certain vendor to print things for you or take calls for you, and if that vendor went out of business, what would you do? Do you have backups?

If you have one employee and that employee does everything for you, what would happen if that employee left and got a new job? If you have one income stream, one exit strategy and that’s retailing for cash and all of a sudden the market dries up and the economy goes south, which it is right now. Would you still be able to make money and survive in this business?

So, be smart about this. Do not become over dependent on any one thing. Analyze your business. And if you find that you are dependent on just one thing in your business whether it is any of the examples I just mentioned or other examples we have not talked about, you need to find backups and Plan Bs for all of those things in case something happens and you have to adjust.

So, be smart. Don’t become over dependent on any one thing in your business.

You also need to explore other sources of income. My friends, this tip is huge.

If you’re not looking for other sources of income other than what you’re doing every day, flipping houses or whatever, then you’re not maximizing yourself. You’re not maximizing your potential.

Perhaps you’re comfortable with where you’re at in your business and you don’t need extra income streams. Fine. But I would venture to say that most of you reading these posts are entrepreneurs and always looking to get to the next level, no matter where you’re at, whether you haven’t gotten to the first level yet or whether you’re seasoned and doing extremely well. You’re always looking for the edge. You’re always looking for something else. At least I am anyway.

So, it would be wise if you did explore other sources of income streams. For example, did you know that a lot of the leads that you generate in your business, (leads where people are looking to sell their house or leads that you generate where people are looking to buy a house) that you could potentially sell those leads to other people in your market niche who would pay for those leads?  They would pay anywhere from $5 to $25 to maybe even $75 or more per name per lead? That’s huge information.

And that’s a perfect correlation to what you’re doing in your business everyday. Find ways to incorporate other methods of income streams into your real estate business.  It doesn’t have to be real estate business, it could be any business.

Perhaps your core business, your real estate investing business is doing great. Maybe you should start to explore other things. Maybe you should start to explore coaching, consulting, partnering, different things like that.

So, don’t be over reliant on an income stream and explore other sources of this because this is where true wealth comes into play. Anybody’s who anybody out there who really makes money, who’s very super successful has multiple income streams. They begin to leverage their time and their money to develop multiple income streams. So that way, if any one-income stream fails, they have more income streams coming from a different angle to live off of.   It’s simply smart business.