You’re a Real Estate Investor and Market Sucks – Now What

It’s 2010 and the big hot topic on the news as the current economy. What is a real estate investor to do in a down market? What can a real estate investor do to increase their portfolio? Can I continue being a real estate investor in this economy/market? What are we going to do to fix the current economy? Who’s going to fix the current economy? How much money do we have to give large companies in order to fix their bottom line? Who’s to blame? How was the President-elect going to save us? Which new political party is going to come in and save the day? And most importantly, who is in the steer this boat to the Promised Land?

Here’s the answer: You the Real Estate investor/small business owner!

In the last 200 years of the economic growth of the United States of America, we have never faced an economic challenge like the one we have now. Our economy the last 50 to 60 years has slowly started to phase out from being in a commie based on manufacturing goods to becoming a service driven economy. Perfect example of this is the Internet. In the last 10 years that the Internet has been available to us, more millionaires have been made by offering information-based services than by actually manufacturing a physical product.

If we go back and look at our history. The past recessions, such as the 1920s as well as the more recent tastes and feelings of recession in the 70s 80s and a brief touch in the 90s. Most of these recessions were stopped or drastically shortened by the American worker getting out and putting their nose to the grindstone.

While government work programs and social projects can operate Band-Aid fix to the current economic crisis there and not the long-term solution. That comes down to the investor.

I’m going to be focusing on the real estate investor for one simple reason, the most immediate fusion of labor ready jobs across the nation falls into the real estate and the real estate services category. Real estate investors, for decades have made money, and in some case, the vast wealth by buying low income properties and fixing them and flipping them to other buyers were holding onto them and using them as the stable of their investments portfolio.

Let’s take a look at just of few examples of the basic services that are going to be used in utilized in order to accomplish a typical small-scale real estate investment. For the sake of discussion, we are going to use a single-family residence with a fix and flip tactic.

R.E. investor finds a property that would fall within a fix and flip category with a profit margin of say 30,000 after renovations and repair. Once a project has been purchased, the investor then sets out to increase curb appeal as well as make any renovations necessary to increase the property’s value. Now let’s look at some of the people that would be hired to accomplish this task.

The exterior of the house: we could be looking at a basic gardener to a landscaper all the way up to a landscape architect. Obviously the costs of each one of these individuals would increase depending on the severity and extensiveness of the project which their contracted.

For the interior of the house: we could have a handyman, a contractor/remodeler, electric contractor, heating and cooling specialist, drywall specialist, plumber, demolition crew, and any subcontractors needed to fill in the necessary skill base in order to increase the value of this investment property.(In the event of a room addition. Let’s not forget the necessary permits and inspectors required to bring the property up to code).

Now without getting into the ins and outs of who hires whom, be a contractor using day labor or a professionally managed and staffed crew, the point being made here is the immediate stimulus to the local working economy of the community.

Banks and lending institutions

Since the subprime lending crisis became top news in the middle of 2008, real estate investors have been scrambling to find funds to continue with their real estate investing operations. At the beginning of 2009 we have yet to see the banks who received bailouts, lift lending restrictions to small real estate investors, let alone the service companies that support them. This lack of available capital, which was so plentiful for the last several years, has caused a dramatic reduction in real estate investments. Which has helped put a stranglehold on economic recovery within the select area of national concern?

So how does the small time investor get around this problem?

Answer: Find new and alternate methods of funding.

This is where you have to break from that mold that you used. Just a short time ago with them last few years you could find an investment property walk into a bank and if you had a fairly decent credit score and the numbers made sense you could walk out with the loan. This is obviously no longer the case.

In the current economic climate the real estate investor needs to be more than savvy on just finding good real estate investments, he needs to be savvy on finding good networking contacts. This has never been more important than it is now. Few years ago during the height of the real estate surge. You could walk into a local real estate investment group. Maybe sit down at one of their meetings, and basically walk away with potential good solid leads on real estate investments. That’s because at the time the focus was on the property and not on procuring the funding.

The current economic climate forces us to change our focus. While property investments abound due to short sales and foreclosures, it is the funding that is in short supply. However, the funding is available.

Real estate investment groups have been around for decades. These groups are saturated with both traditional real estate lenders, as well as private and hard money lenders.

To many the term “hard money lender” conjures up evil pictures of greedy baseball bat wielding clubs that are prepared to cause you physical bodily harm in the event you don’t pay. While I’m sure these men exists in my many years of real estate investing. I have yet to actually meet one.

The most common trade-off of using a hard money lender or private money lender versus traditional lending is interest rate. Due to the fact that the interest rate is normally several points higher than a traditional loan. It becomes that much more critical of the real estate investor to do his due diligence and homework. When considering the property for investment.

Investment groups are also of extreme value to R.E. investor due to the networking opportunities beyond just funding. The new real estate investor has the opportunity to network and a vast amount of various with people at share the same common goals as their own, as well as greatly increases their learning curve without having to pay for it out of their own pocket.

For the investor, information is the greatest wealth they can achieve. Once you have learned to tap into the information sources available both online and in face-to-face meetings with other investors. You will be able to map out a course of action to allow you to prosper no matter what the economic climate.

The investor/small business owner is a much more long-term answer to stimulating our current economic crisis.

Doc Schmyz has worked with investors all over the US and Mexico. His free website shares Real estate investing [http://www.joeinvestoronline.com] information for all over the US. Find Real estate investing [http://www.joeinvestoronline.com/states] information by state.

Article Source: http://EzineArticles.com/expert/Doc_Schmyz/280045

 

Real Estate Mailings – Get More Expired Real Estate Listings

Every real estate agent has used some form of real estate postcard marketing over the span of their career. Yet many of these agents waste thousands of dollars a year because they don’t make smart decisions about who to send their real estate mailings to and what the mailings should contain.

As an agent for the past decade, I have made a fantastic living by using real estate mailings to generate expired real estate listings. This article will explain how I do it and how you can use real estate postcard marketing to beat your competition and dominate your local market. The best part is, if you use these steps, you’ll save thousands of dollars every year on your mailings and sell more houses than you ever have!

Step 1: Target Your Real Estate Mailings

The biggest mistake agents make when starting a marketing campaign is to make their address list far too big. The common thinking among agents is that the more people they mail to, the more business they will receive. While this may be true, few agents know how to mail to a much smaller list and still generate the same amount of business.   Over the years, I have steadily reduced my mailing list size while dramatically increasing my revenue. Here are the tricks I use:

  • With rare exception, I no longer mail to entire neighborhoods (or “farm”). Instead, I target only expired real estate listings and those that have been withdrawn from the market.
  • Once I identify the expired and withdrawn homes, I identify the homes I want to market to. If a home is in a slow moving or depressed area, I take them off my list. I only target homes that have a high probability of selling. My knowledge of the market allows me to identify these homes quickly, but some homes I need to do more research on. While this may take 5-10 minutes per home, it will save time and money on the real estate mailings (see below)
  • I scan each of the expired real estate listings for the words “Short Sale.” If the home owner needs to negotiate a short sale with the bank, it is almost never worth my time or the cost to add them to my campaign.

It may seem tedious, but these steps will identify a list of homes in your market that are worth your complete attention. Having a highly targeted list of one to two hundred homes is far more valuable than having a list of thousands of houses that may not be looking to sell.

Step 2: Smart Real Estate Postcard Marketing

Now that you have spent the time to research and identify the withdrawn and expired real estate listings, you’re ready to out-market your competition.

While the rest of the agents in your market will have spent all of their money sending one postcard to thousands of people, you can now spend much less money sending several postcards to the small, targeted list you’ve created. Here’s a list of items I send out to my small list:

  • On the first day the listing comes off of the market, I send a jumbo, full color postcard to the homeowner. This postcard needs to be big and impressive, because the day the home is off the market, many agents will send their one and only postcard to the home. Make yours stand out.
  • On the second day, I send another postcard to the home. This is usually a smaller, full color 6 x 4 postcard. Make this postcard look similar to your first (i.e. same logo, colors, etc). For my real estate postcard marketing campaign, this postcard tells the homeowner that I really want to sell their home and I never give up.
  • On the third day I send another jumbo full color postcard. It uses the same logo, colors etc, and says something to the effect of “See, I told you I never give up.”
  • Two days Later, they receive another postcard asking “Don’t you want to sell your home? Why haven’t you called?” My competition gave up on day two. I now have 4 marketing pieces delivered to this homeowner. The homeowner knows who I am and they know I want to sell their home.

The response to this campaign is incredible and while I do spend the money to send four, full color postcards (and sometimes a fifth follow up), because I was smart about my list, I’m spending much less than my competitors and my real estate postcard marketing campaigns have an unbelievable rate of return!

Step 3: Save Even More Money on Your Real Estate Mailings

If you follow my steps, you’ll already be saving thousands of dollars on your real estate marketing while making more money. Here’s how to save even more on your real estate postcard marketing:

  • Use online printers and use a coupon! Many online printers that provide postcard printing offer promotions and discounts.
  • Order your postcards in bulk all at once. I use the same postcards for every home, so I order all of my real estate postcard marketing materials at the same time. I order them without postage and have them mailed to me. I then print out labels and affix the postage myself for each mailing. Most suppliers give discounts for orders over 500 pieces.

My Real Estate team closes well over 100 transactions a year by using these types of real estate mailings to generate expired real estate listings. We keep a Real Estate Mailing Coupon and Review Website [http://realestate.reviewsanddeals.com/] up to date to help other real estate agents make informed decisions and manage their costs for their marketing expenses.

Article Source: http://EzineArticles.com/expert/Brian_Anthony/6227

 

Selling Real Estate in This Market Can Be Easier With These Home Selling Tips

Selling real estate is always a topic of interest for any home owner. The average American will sell a house every five to seven years. Given a 90 year life expectancy and assuming you buy your first house at age 30. You can expect to selling 8 to 12 houses in your life time.

When it comes to selling a home it can be a very hectic and emotional time. There is a lot of money, memories and family history involved with selling a home. That is why it is best to take an outsider approach to selling real estate. Try to shake off the emotions and think like a potential buyer looking for a new home.

There are typically only 3 ways to sell real estate and some will leave you with more money and create a faster sale than others. There are advantages and disadvantages to each type of home selling process so chose the best option for your particular home selling situation.

Sell your house fast with out a real estate agent

One of the quickest ways to sell real estate is to contact a local real estate investor or home buyer in your area and receive an offer on your house. These real estate professionals exist in every major metropolitan area across the United States and make a living off of investing in real estate.

There is a myth that all real estate investors are out to make a quick buck and take advantage of home owners. Just like any profession there are reputable home buyers and there are dishonest ones. The truth is, real estate investors are a great asset to any home seller.

Most know more about real estate than a typical real estate agent. They are familiar with short sales, helping home owners avoid foreclosure, lease options, rent to own programs, and best of all most can pay cash and create a quick close on your house.

How can it cost you less to sell your home to a real estate investor? Because you are selling real estate directly directly to a buyer there are no real estate agent commissions involved which is typically 6 percent of your sale value. This can add up to tens of thousands of dollars. Instead of paying a real estate agent commissions you are giving some of that money in equity to the new home buyer or investor.

Another awesome advantage of selling your real estate to a local home buyer is the over all home selling process. Through any typical home selling process you would have to spend thousands of dollars staging your home for sale. You have to leave your home every time a potential home buyer wants to view your home. This can make the home selling experience even more emotional than it already is.

When you sell your house fast to a real estate investor they will buy your house as is. You do not have to spend money on fixing up your house to create curb appeal. You don’t have to leave your house every evening so people can walk through your home critiquing your home decorations. A home buyer will quickly wall through your home, ask you a few questions about the homes history and give you an offer then next day.

So if you need to sell your house fast, consider receiving a free, confidential, no obligation offer for your house from a local home buyer. It will not cost you anything, you will receive an offer on your house, you will not have to pay any real estate commissions, and you just may receive an offer you can not refuse.

Selling real estate for sale by owner

The next best way to keep more cash in your pocket when selling real estate is to find a home buyer yourself and skip paying real estate commissions to an agent. This avenue is not for all home sellers. Real estate agents exist because they provide value and service. However if you have extra time, energy and are up to a challenge then selling your home for sale by owner could save you big dollars at the closing table.

One disadvantage of selling your house for sale by owner is the up front costs. Instead of a realtor taking charge of the marketing of your home, you will be the main marketing avenue to get the word out. Some of the out of pocket expenses will be getting your home in great shape to sell, and marketing. The best marketing money you can spend is to pay a for sale by owner company who will list your home on the multiple listing service, MLS.

This way you have captured the same marketing a real estate agent would use. This is also the best way to get thousands of potential home buyers to know your house is for sale. You will also have to pay for signs, internet listings and some paper work.

Selling your house with the help of a real estate agent

The more traditional way to sell real estate is to go through a real estate agent. This home selling option will leave you less money at the closing table but could yield a better experience than selling your home by yourself. After all, you are hiring a professional to take care of all the home selling tasks.

Note than you will still have some out of pocket expenses and some inconvenience. A good realtor will walk through your home and put a list together of things they suggest you do to make your home sell quicker and for a higher price. You will have to pay to upgrade certain items in your house, paint new walls, take down family photos and other tasks.

Typical real estate agents charge 6 percent of the sale price of your home as a commission. So if your home sells for 200,000 the real estate commissions would be 12,000. The agent will receive this payment at the closing table so you do not have to come up with this money out of pocket.

When you are Selling Real Estate get connected with a local home buyer in your area. They can provide you will a free, confidential, no-obligation offer for your house.

Article Source: http://EzineArticles.com/expert/Shaun_Greer/103002

 

Getting Started in Residential Real Estate Investing

Residential real estate investing is a business activity that has waxed and waned in popularity dramatically over the last few years. Ironically, there always seem to be a lot of people jumping on board with investments like stock, gold, and real estate when the market’s going up, and jumping OFF the wagon and pursuing other activities once the market’s slumping. In a way that’s human nature, but it also means a lot of real estate investors are leaving money on the table.

By understanding the dynamics of your residential real estate investment marketplace, and acting in opposition to the rest of the market, you can often make more money, as long as you also stick to the real estate investing fundamentals.

Real estate investing, whether you’re buying residential or commercial property, is not a get-rich-quick scenario. Sure you can make some fast cash flipping houses, if that’s your bag, but that is a full time business activity, not a passive, long term investment. The word “investment” implies that you are committed to the activity for the long haul. Often, that’s just what it takes to make money in real estate.

So, while the pundits are crying about the residential real estate market slump, and the speculators are wondering if this is the bottom, let us return to the fundamentals of residential real estate investing, and learn how to make money investing in real estate for the long term, in good markets, as well as bad.

A Return To The Fundamentals of Residential Real Estate Investing

When real estate is going up, up, up, investing in real estate can seem easy. All ships rise with a rising tide, and even if you’ve bought a deal with no equity and no cash flow, you can still make money if you’re in the right place at the right time.

However, it’s hard to time the market without a lot of research and market knowledge. A better strategy is to make sure you understand the four profit centers for residential real estate investing, and make sure your next residential real estate investment deal takes ALL of these into account.

  1. Cash Flow – How much money does the residential income property bring in every month, after expenses are paid? This seems like it should be easy to calculate if you know how much the rental income is and how much the mortgage payment is. However, once you factor in everything else that goes into taking care of a rental property – things like vacancy, expenses, repairs and maintenance, advertising, bookkeeping, legal fees and the like, it begins to really add up. I like to use a factor of about 40% of the NOI to estimate my property expenses. I use 50% of the NOI as my ballpark goal for debt service. That leaves 10% of the NOI as profit to me. If the deal doesn’t meet those parameters, I am wary.
  2. Appreciation – Having the property go up in value while you own it has historically been the most profitable part about owning real estate. However, as we’ve seen recently, real estate can also go DOWN in value, too. Leverage (your bank loan in this case) is a double-edged sword. It can increase your rate of return if you buy in an appreciating area, but it can also increase your rate of loss when your property goes down in value. For a realistic, low-risk property investment, plan to hold your residential real estate investment property for at least 5 years. This should give you the ability to weather the ups and downs in the market so you can see at a time when it makes sense, from a profit standpoint.
  3. Debt Pay down – Each month when you make that mortgage payment to the bank, a tiny portion of it is going to reduce the balance of your loan. Because of the way mortgages are structured, a normally amortizing loan has a very small amount of debt pay down at the beginning, but if you do manage to keep the loan in place for a number of years, you’ll see that as you get closer to the end of the loan term, more and more of your principle is being used to retire the debt. Of course, all this assumes that you have an amortizing loan in the first place. If you have an interest-only loan, your payments will be lower, but you won’t benefit from any loan pay down. I find that if you are planning to hold the property for 5-7 years or less, it makes sense to look at an interest-only loan, since the debt pay down you’d accrue during this time is minimal, and it can help your cash flow to have an interest-only loan, as long as interest rate adjustments upward don’t increase your payments sooner than you were expecting and ruin your cash flow. If you plan to hold onto the property long term, and/or you have a great interest rate, it makes sense to get an accruing loan that will eventually reduce the balance of your investment loan and make it go away. Make sure you run the numbers on your real estate investing strategy to see if it makes sense for you to get a fixed rate loan or an interest only loan. In some cases, it may make sense to refinance your property to increase your cash flow or your rate of return, rather than selling it.
  4. Tax Write-Offs – For the right person, tax write-offs can be a big benefit of real estate investing. But they’re not the panacea that they’re sometimes made out to be. Individuals who are hit with the AMT (Alternative Minimum Tax), who have a lot of properties but are not real estate professionals, or who are not actively involved in their real estate investments may find that they are cut off from some of the sweetest tax breaks provided by the IRS. Even worse, investors who focus on short-term real estate deals like flips, rehabs, etc. have their income treated like EARNED INCOME. The short term capital gains tax rate that they pay is just the same (high) they’d pay if they earned the income in a W-2 job. After a lot of investors got burned in the 1980’s by the Tax Reform Act, a lot of people decided it was a bad idea to invest in real estate just for the tax breaks. If you qualify, they can be a great profit center, but in general, you should consider them the frosting on the cake, not the cake itself.

Any residential real estate investing deal that stands up under the scrutiny of this fundamentals-oriented lens, should keep your real estate portfolio and your pocketbook healthy, whether the residential real estate investing market goes up, down or sideways. However, if you can use the real estate market trends to give you a boost, that’s fair, too. The key is not to rely on any one “strategy” to try to give you outsized gains. Be realistic with your expectations and stick to the fundamentals. Buy property you can afford and plan to stay invested for the long haul.

Emily Cressey is a residential real estate investing coach, investor and real estate agent living in Seattle, Washington. Visit her personal finance blog to learn more about how residential real estate investing fits into your financial plan. Visit the commercial real estate investor [http://www.therealwealthblog.com] blog for details about getting started buying apartments and shopping centers.

Article Source: http://EzineArticles.com/expert/Emily_Cressey/164012

 

The Five W’s of Real Estate Training

Who?

Who can and who should take the real estate training or course?

Practically anyone who wants to make a career in the property industry can choose to go for the training. If one feels that they can carve their niche in the property sector and have what it takes to excel in the profession, a good real estate course will be of crucial importance.

Amid the current financial recession when all industries appear to be toppling, property industry is still somewhat stable. Although there is an evident slowdown in the industry, yet it is growing. So the requirement for real estate professionals has not eroded and every property company needs a property professional. Today, when career opportunities in other professions show a great deal of saturation, the potential of real estate industry is slowly dawning upon people who are now taking up real estate training courses to enter this vast field of opportunities.

What?

What are the real estate training courses about?

Real estate of course! Every country of the world has its set real estate laws and ordinances. These laws may vary largely from country to country, and also from city to city within in a country. This is one reason why it is important for a real estate professional to not only become aware of, but also have a deep insight into his region’s property laws and regulations. The real estate training courses consist of a series of classes or lectures which cover anything and everything about real estate in your region. The courses are designed, handled and delivered by the area’s real estate experts with vast experience of the local property market. The most common things covered in the property training are the property laws governing your area’s real estate industry, your responsibilities as a real estate agent, and the types of real estate present in your zone of operation. The courses are also designed to hone your buying and selling skills as a property agent.

Where?

Where are the real estate training courses available?

Probably not far from you. These courses are gaining popularity around the world and many established property companies and agencies have taken this initiative. Not only established real estate companies, but also experienced property professionals have started educationg people about the property business and its ethics with a special focus on the latest real estate trends of their own region’s property industry. So it’s very probable that after a brief search, you’ll be able to find a property company, agency or individual offering this course near your house or somewhere else in your city. And if you don’t, there are numerous real estate training courses available online in which anyone can enroll with ease. All it takes is a little online search and you’ll come across innumerable options. Most people consider online course more convenient than the classroom study as you can study at your convenience without having to rush for taking classes. It saves you the time and hassle of the traditional classroom study. Many online universities and institutions have even started bachelor and master degree programs in real estate development and management.

When?

When can you enroll for the course? How long does it take to complete?

It depends on various factors. Your choice between online and classroom study, the mode of training, and the trainer’s discretion, all these factors come into play. The best way to find an answer to this question is to visit the trainer in person if it’s an offline (classroom) course, or to visit the website of the trainer if it’s an online course. The websites of educational institutions bear all the details of the courses they offer including the course objective, outline, duration, and choice. One trainer may offer more than one property training course at a time designed for different individuals as per their requirements, suitability and market exposure.

Why?

Why should you take this course?

Well, we’ve already discussed it in the 1st answer. One definite answer to this question is that the property market is still booming when the other industries appear to be falling down in the current financial recession. As the industry is expanding, there’s more and more room for real estate professionals in it. Taking a real estate training course can help you make a career in this booming sector and excel professionally.

Daniel Marshel is a senior real estate consultant associated with Better Homes, a leading real estate firm in Dubai, UAE. He has more than 25 years of hands on experience of working in Dubai property market. He has helped thousands of his clients to buy property in Dubai. He is a trusted name in getting real estate for rent among property finders. Daniel is well aware of the latest trends in property for sale in Dubai, UAE. His firm Better Homes offers online Dubai property listings, property management and property investment services.

Article Source: http://EzineArticles.com/expert/Daniel_Marshel/50093