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Real Estate Deal
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Tips When Buying A New Home
v(1.) Make sure you are dealing with a reputable builder.....
You have to understand that it is buyers beware.... You have to make sure that the builder has been around for a while.... In Texas I've see so many new builders that are building homes..... Make sure that they are not a fly in the wall company.
(2.) Don't be afraid to ask questions.....
When you deal wi... Read real estate article
Federal Housing Grants
If you want to own your own home but you think that you can't afford it then you may want to look into federal housing grants. The first types of government grants that are available to help low income families buy a home are Urban Development Grants. To qualify for these grants both you, and the home that you are interested in, will need to meet basic qualifications. You will need to make enough ... Read real estate article
Real Estate Deal
Every real estate investment consists of eight parts: generating leads, initial examination, decision making, negotiating, professional inspection, closing the deal, improving the value, and re-selling.
1: Finding potential deals
Finding suitable properties is the first part of the real estate investment process. During this phase you look for potential deals, employing whatever tactics works best - from reading magazines to car trips around your neighborhood looking for promising properties.
2: Research and initial property examination
When you find a potentially interesting target for your real estate investment, perform some initial research about the property in order to check if the deal is possible and potentially profitable. During that phase you have to (1) take a closer look at the property and its neighborhood, (2) ask around about the property and its status, (3) meet the seller(s), (4) research market values for similar properties.
3: Making up your mind
At this stage of a real estate investment process you must make a decision - buy the property or leave it for another real estate investor. Take the time and write down all pros and cons of the deal. If you determine that the profit potential is large enough and you can cope with everything involved, proceed to negotiations with the seller.
4: Negotiating with the seller
Negotiating is the critical part of every real estate investment. Here your profit margin is determined and the whole deal takes its (almost) final form. It is very probable that negotiations will involve making several offers and counteroffers. When you and the seller finally agree on the price and terms of the contract, the offer is put down in writing and you can start preparing to close the deal.
5: Professional inspection
However, before you close any real estate deal, you have to perform a professional inspection of the property in order to find any potential problems that may affect your plans/profits. It is recommended to hire a professional to do that. Even the most experienced real estate investors cannot find everything, especially if problems are deeply hidden.
6: Closing
If the inspection goes well, it is time for you to close the deal. For the agreed price you will become the owner of the property. Then, you may proceed to the next phase of a real estate deal - renovation.
7: Improving the value
A quality rehab is crucial for increasing the profit of every real estate investment. Unless you are really good at it, you should leave this job to hired professionals. It takes up your precious time and there is always a chance that you won't be able to fix everything right, which will cost you more money than you save in the long run.
8: Marketing campaign
When the renovation is over, the property is ready for sale. It is time for you to start your real estate marketing campaign, find a buyer and then finalize the real estate investment by SELLING THE PROPERTY! As you see, the construction of a real estate investment is relatively easy. If you do it step-by-step always remembering about the final goal (selling the property for a profit), your chances for the success grow. On the other hand, if you decide to skip or swap places of any of the phases, you will fail 9 times out of 10. For instance, if you start your marketing campaign before you improve the property's value, additional costs of a prolonged campaign may all of the sudden make the deal unprofitable.
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Commercial Real Estate Investment
Investing in commercial real estate is riskier and more costly than investing in residential property - but ultimately it can be far more profitable. Whereas the stocks of major housing manufacturers have decreased over the last few months, retail and institutional investors have been investing heavily in commercial real estate, through both operating companies and investment trusts.
The profits from commercial real estate are linked to a large degree to the state of the overall economy - today, commercial property is a $4 trillion market, having increased in volume around 20% over the last five years. Most smaller investors are able to profit from commercial real estate.
The potential profits to be made from investing in commercial real estates are affected by several factors. Apart from the overall economy, the local economy and market can have a huge impact, as can the terms and length of any lease, the reliability of tenants and the overheads involved with your property.
Generally speaking, when investing in commercial real estate, to make a profit you should ideally have a long term lease from a major tenant. Finding the right tenant isn't always easy - most commercial real estate has relatively few potential tenants unlike residential property.
During a recession, commercial foreclosures and vacancies tend to increase significantly more than residential properties. And if commercial properties remain vacant for a long period of time, owners may lose a lot of income and be forced to resell for less than the property is worth.
One method of generating a profit from commercial real estate is to look at REITs (Real Estate Investment Trusts). These are traded securities which allow an investor to take part in large scale commercial projects. REITs were created in 1960 by Congress and can be a practical alternative to bonds.
Most REITs specialize in certain types of property such as office buildings, hospitals or shopping centers. There are several benefits of REITs: they trade in the same way as stocks, so you can buy and sell them. The share price can increase in value as the property appreciates in value and shareholders also get income from rents.
Not surprisingly, REITS have become extremely popular over the last few years. Another big advantage of them is the tax benefits - by law, REITs must distribute 90% of their income as dividends.
There are several ways to invest in commercial real estate without actually having any capital. Subordination is the term for the situation in which the current owner actually takes out a second mortgage on the property to cover the difference of the amount that the purchaser has available in the form of a loan.
Another method is to persuade the owner of the property to release some acreage. That section of land can then be used to borrow money to cover a down payment on the rest of the property. Many property owners don't even know this option exists and it can be an effective strategy when dealing with raw land.
Another method is to purchase commercial property by means of a partnership. If you are able and willing to do the work, you may be able to find a partnership that is willing to finance your deal - in exchange for a percentage of the profits, of course.
Investing in commercial real estate isn't for everyone. But the profits can certainly be made for those who are prepared to take a calculated risk, have the expertise - and perhaps a little bit of luck.
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