Simply Junior » Real Estate Investment

Winning Real Estate Strategies For 2011

admin — Wed, 22 Jun 2011 12:50:29 +0000

There is no doubt that there are now many incredible opportunities for investors in the real estate market, but what are the best strategies looking ahead to 2011 and beyond?

The recent housing boom made many real estate investors over confident and sparked a fury of speculative buying. This lead to investors acquiring and gambling on all types of properties without giving much thought to the core principals of successful real estate investment – buying low and investing in long term rental properties. If these investors had only stayed true to these tried and tested means of building real wealth and income through real estate it wouldn’t have mattered what the market did and we wouldn’t be seeing the economy in such a state as it is now.

Fortunately for those of you looking to invest now and take advantage of the many great opportunities out there you will find many bargain priced homes. Combined with today’s record low interest rates you will also find that they hold the keys to incredible cash flow every month. Looking ahead through the end of 2010, 2011 and beyond investors will see the best returns by acquiring discounted properties and building portfolios of passive income producing rental properties. Those that choose this path will not only enjoy a healthy regular income but will be setting themselves up for a big windfall in equity when the market fully recovers.

One of the best ways for investors whether brand new or extremely experienced to harness this proven strategy for successful real estate investing is to invest in multifamily properties. Duplexes are of course the most common property type in this category that provide easy access and can double as a great first home that pays for itself. However areas like Hudson, Massachusetts also offer many great larger multifamily homes that offer even more cash flow. Investing in properties with a large number of bedrooms in the right areas can be rented out by the room. Hudson, MA has many 6 bedroom properties available at less than $100,000. Do the math. 6 rooms rented out at $100 per week each is $31,200 in annual income from just 1 property. Having four properties like this would mean achieving a healthy six figure income a year. Even if you had to finance your acquisitions today’s interest rates mean monthly mortgage payments of less than $400 a month, leaving plenty of cash flow on the table. You could even still afford to pay off the property within three years and then be sitting on a an incredible debt free, money making machine.

IRA Real Estate Investment

admin — Tue, 21 Jun 2011 13:48:03 +0000

An IRA certainly has greater flexibility than a 401(k) and other plans for one’s retirement. It can be used for virtually any type of investment one chooses, from stocks and bonds to mutual funds to real estate. One might consider whether or not making an IRA real estate investment is a wise move. Many people are under the misconception that doing it at all is illegal. It isn’t illegal, nor, however, is it simple.

Continuing frustration about the phenomenon of low interest rates, coupled with recent memories of the bear market, have caused some investors to seek answers beyond mutual funds, stocks and bonds to plan for a secure retirement savings, and an increasing number of them are beginning to use their IRA funds to purchase real estate. In recent history, they have been quietly picking up everything from single-family homes to tracts of land to commercial apartment buildings with their IRA real estate investment transactions.

While IRA real estate investment is a real possibility, experts are warning that investors exercise caution. The stakes are high and the rules are quite complex. A single mistake can disqualify the tax-deferred status of an IRA in a split second. This forces the investor to shell out the cash for taxes on the full value and penalties.

Property ownership inside of an IRA means forfeiting the better-known tax advantages inherent in investing in real estate. With IRA real estate investments, one is not allowed to deduct mortgage interest nor property taxes. Furthermore, depreciation funds cannot be used. When the property is sold, what would have been a traditional IRA transforms profit into standard income instead of capital gains. Additionally, the IRA has to have enough spare funds to pay all of the expenses related to the property such as taxes, maintenance costs and management frees since the total amount of income has to flow into the IRA and resulting expenses have to be paid out of it.

Research! Research! Research!

If an investor does the research and adheres strictly to common sense policies, he or she can be one of the success stories that are beginning to result from IRA real estate investment strategies. However, if this is the plan, the investor should prepare for a lot of work.

The first step involves finding the right property. The IRA may not be used to purchase one’s own residence or vacation land or home. Next, one has to find a custodian for any IRA that will allow real estate investments. One should not look to one’s own mutual fund company or one’s own local bank for assistance. There are very few IRA custodians who are willing to do this. They can be found by doing a search for “self-directed IRA” or “real estate IRA” on the Web.

There are restrictions involved in selling the property as well. Buying or selling property to oneself, one’s family members or to and from individuals and/or firms that provide services to one’s IRA are, in most cases, also unfortunately, disqualified.

Using Real Estate IRA To Increase Your Retirement Funding

admin — Sat, 18 Jun 2011 08:00:19 +0000

Preparing for your retirement by creating a real estate IRA trust is one of the best ways of ensuring that you have made provision for the future. Facing retirement can be a daunting process especially if you are not sure if the investment that you have in your existing IRA will be able to cover the plans that you have. No one wants to carry on having to work when they could be retired, but the fact is that many people find themselves in this position, which could have been avoided with good financial planning and professional advice from a financial adviser.

Real Estate IRA investment is a way of putting the money in your IRA to work for you before you reach the age of retirement. There are a number of ways of accessing the money and using it to benefit you and your family during your retirement. Real Estate IRA investments are one of the most secure and risk free investments that a person can make. Even in an economy that is struggling to perform, real estate is still one of the sectors of the economy where people can make a lot of money.

Ways of investing in a Real Estate IRA for your future

1. Invest a portion of the funds in your IRA into a real estate IRA Investment Trust. This form of investing allows you to buy the shares and stock in any real estate investment fund in the same way that you would invest in mutual funds or an Exchange Trade Fund (EFT). There is very little risk, and although the shares do trade up and down depending on the prices and the state of the stock market, they are a remarkably safe way of letting your money work for you.

2. Invest in a Real Estate IRA self directed account. This type of investment allows you to set up a self directed IRA fund and to transfer an amount of money from your IRA account directly for use from the self directed IRA account. The freeing up of this money allows you to make a direct investment in a property that can be used to create a residual income that must be paid into the IRA. This method of investing requires some thought, but there are many professional independent lending companies who will be able to find you an investment that will fit your risk profile.

3. Hard Money lending. This form of investing works like a loan. You loan the money in yourself directed IRA to individuals or businesses for a short period of time, with an extremely high return on investment. The return is somewhere in the region of 12 – 15% and it does mean that the rewards are great. The risks however are equal, as you are investing in the potential and the promise of a return that is not guaranteed. It is always wise to consult with a private money lending company who will advise you on the best investment for your IRA funds.

Whichever method you choose, you will be satisfied to know that you and creating a Real Estate IRA that will give your retirement funding a healthy injection of money, so that you are able to enjoy retirement.

Cash Is King in Today’s Real Estate, But Have an Exit Strategy

admin — Sat, 30 Apr 2011 23:29:08 +0000

For cash buyers in today’s real estate market, the power to offer cash funding and a quick close can translate into a better purchase price. Motivated sellers can include banks that have many properties to sell, individuals who need to move and have been unsuccessful in selling for some time, and homeowners in financial distress. While it always feels great to know you got a good price for your home or investment, in today’s market the smart cash buyer will also have an exit strategy before tying up his cash.

Two common real estate investment strategies are: 1. Flip and 2. Buy and Hold.

“Flipping” a property refers to purchasing a property below market value, repairing and renovating it appropriately, and then selling as quickly as possible. An investor’s ability to flip a property depends on timing and keeping costs down, including original purchase price. Some people make good incomes flipping property. However, it is possible that one or more properties purchased to “flip” will not sell, or will not sell in a timely manner. The best way to minimize risk in this scenario is to purchase investment properties only when a realistic market rent will cover your costs, as well as cover a mortgage should you be forced into a long hold. This way, you can recover 60 – 90% of your cash by taking a mortgage on the property, and let rents will cover expenses until the market recovers and you can more easily sell.

Historically, the California market has lofty peaks and deep valleys with an approximately 12 -18 year cycle from one peak to the next. The peak in 1989 was followed by a low around 1994. The next upward climb started gaining momentum around 1998 – 2000, but did not peak until 2006, 18 years from the previous. If the peak was in 2006 and we are close to the bottom in real estate now, there is a long, slow climb ahead before prices heat up once more.

To “Buy and Hold” may be the most common real estate investment strategy. Values go up over time, sometimes with a dip in between peaks. A common error many real estate buyers made during the early 2000′s was buying for appreciation instead of cash flow. When a market is appreciating quickly, it is hard to match the cash on cash return for doing nothing but holding title on a property. However, without an ability to rent that property for at least break even cash flow, the buyer has made a bet on appreciation with a huge risk of carrying heavy costs if the market or events do not go as planned.

Whether in 2011 we are at the bottom of the real estate price fall for this cycle or close to it, real estate purchases made well in the next 2 – 5 years will set investors up for exciting returns over the following decade. If you buy for cash flow when the market is down and people are eager to sell, your investments will serve you well.

Why Real Estate Investment Includes Risk Analysis

admin — Thu, 10 Mar 2011 12:57:47 +0000

The bottom line about any real estate investment analysis is that it is a risk analysis. If risk was not an issue with investing, and all the results of any given investment were known with certainty, than creating an analysis for any type of real estate investment would simply be a matter of arithmetic. But the truth about real estate investing is that many factors come into play (i.e., the economy, tenant trends, etc.) that make it impossible to ever know with absolute certainty enough about a typical property to remove every element of the unknown.

Since the ability to accept varying levels of risk will differ from investor to investor, many simply avoid real estate altogether and opt to put their money only in relatively risk-free investments such as government Treasury bills. But the price for this lower level of insecurity, of course, is a lower rate of return. Why, because a relationship always exists between risk and rate of return. Therefore, when investors are attracted to the certainty, they in effect force down the rate of return they are willing to accept as a trade-off for their unwillingness to accept uncertainty.

Okay, so what about the risk takers? What can investors who prefer to collect the higher rates of return associated with real estate investment do to deal with (and perhaps minimize) the ambiguity? Investors must exploit tools that can potentially measure this risk. One method is by applying what is known as a “probability distribution” to prospective real estate investment opportunities.

For example, rather than using just one set of rents to ascertain potential cash flows and returns for a rental property, the investor should consider several rent scenarios that reflect an estimated probability of their occurrence.

In my real estate investment software, for instance, a form is provided that allows users to apply three different rent scenarios to a rental property. This way, rather than just having to accept whatever rents are presented by the seller, the investor can analyze the cash flows and returns based upon a range of rent probabilities (i.e., most likely, somewhat likely, and not likely but “wow, wouldn’t it be great”).

The logic is straightforward. Say, for example, that you’re doing an analysis on a ten-unit apartment complex made up of ten two-bedroom, one-bath units each reportedly with the potential of renting for $700 per month. My own experience warns me that “potential” rents may (or may not) be likely, so I always prefer to run my own rent scenarios. In this case, then, you would use our Rent Scenarios form and assign three rent probabilities based upon your own measurement of risk, and instantly you are the results so you can analyze what impact each rent might have on cash flows, rates of return, and profitability. The outcome if monthly rents are more likely at $650, for instance, could affect your willingness to chance buying the property.

This is only one of a variety of mathematical and statistical approaches to risk analysis that will help you address the uncertainties of real estate investment. But you get the idea. The best way to deal with uncertainty is to measure it. And the probability distribution we illustrated for rents is a good first step.

Real Estate Investment Network

admin — Tue, 08 Mar 2011 22:30:02 +0000

If you have ever tried to get something that you need and that may not be readily available you know the value of networking. Networking is a basic skill in today’s society. If you want to be successful in any field you need to keep in close contact with people and organizations that can provide you with the skills or information needed. The real estate industry is no different. Success in this industry requires you to be part of a real estate investment network.

Investment networks are numerous and offer various services to their members. Most investment networks charge a minimal fee for membership. Although this may seem like too much to a new real estate investor, the returns outweigh the cost.

Being a member of a investment network allows you to keep abreast with the latest news in the industry. You will also have access to forums where other investors discuss key issues that affect all or most of the investors in that area. You can learn a lot from these forums. You can even form networks and meet people with whom you can enter into joint ventures with.

Real estate investment networks also offer members services such as foreclosure listings in specified regions, real estate agents’ contacts and reviews, information and advice on mortgages and information on the best mortgage rates and lenders. Many networks place members in direct contact with lenders, agents and other real estate professionals. If you are a beginner in the industry without contacts, it would be advisable to join an investment network that offers you a wide range of services all under one roof. This will save you a great deal of time and effort in searching for the right professionals for different jobs.

By joining industry’s investment network, you will gain access to the best deals in the market. Many networks offer their members special deals that they have managed to broker with real estate agents and contractors. You will therefore be able to save a great deal by buying property through your network.

Real Estate Investors Must Diversify Or Die in 2011

admin — Sat, 05 Mar 2011 19:50:00 +0000

Real Estate Investors are in for a tougher time in 2011 unless they adapt their current methods of investing. I’m sorry to be the bearer of bad news today but there’s some data I have in my hands that I must reveal to you.

Short Sale flips are tougher to do than ever. There simply aren’t enough people who can get bank loans to “cash you out” once you get your short sale approval from the bank. Plus title companies are very strict on disclosing back to back flips to both the “A” and “C” lenders. Anyone who’s an active short sale flipper knows this is getting tougher to do.

Rehab flips are tougher to do than ever. Title problems and “robo-signing” scandals have tainted the title to many properties and caused uncertainty about the quality of title when buying an REO. On top of that buyers must have a 700+ credit score on average to qualify for a FHA loan plus a down payment. This means there are less buyer’s to “cash you out” using FHA loans.

Most leads that you will generate into your real estate business will be houses with little or no equity. So if you are an “equity” wholesaler you will have trouble getting “equity” leads in 2011. My prediction is that this is just 5% of the deals I’ll do in 2011.80 -100 million people – roughly 30% of our entire population cannot qualify for a traditional bank loan. Cool thing is there’s a “golden opportunity” that’s been created because of tighter bank lending standards.Credit is expected to tighten in 2011, not loosen, according to Inside Mortgage Finance magazine.

Look at these statistics 10.7 million home owners have no equity according to CoreLogic. Another 4.3 million have very little equity. They are 87% – 100% leveraged. The FHA short refi program has helped just 3 people in 4 months. Just ask the FHA. *52% of all HAMP loan modifications “fall out” within 6 months. Just ask Obama. He knows.

So where are the real estate investment opportunities in 2011? What can you do about this and still be a successful investor in 2011? The answer: Go where the money is and diversify into strategies that do not require banks at all.

There are four simple, fast, safe and easy ways for you to make money that don’t require any banks whatsoever that you can profit from any type of property. Houses with equity, houses with no equity and no default (which are most common) and over-leveraged houses in foreclosure (short sales).The investment strategies are proven and have been used by astute investors since 2004. Just now in late 2010 and 2011 they really going to “blast off” because of the current state of the financial markets.

These four techniques will enable investors to continue to profit for many years to come. Some investors are finding that they can get cash now, cash flow each month, and then cash out down the road without ever owning the home. These types of leads are everywhere and require little to no marketing costs on your part to obtain. This is the easiest, fastest way to make money in real estate with no money, bad credit, and no loans for you or your buyers. So position yourself and your business for massive success in 2011 without any banks, FHA loans, private money or government programs using new “Cash Infusion” strategies.

I personally think the jokers at Fannie Mae, Freddie Mac and FHA are not all bad guys. They just are in over their heads. A recent Fannie Mae study showed 54% of the people surveyed want to buy a home in 2011. They realize there are lower prices than ever out there. Problem is with the current Fannie and Freddie and FHA guidelines they simply won’t qualify. So how are you going to use this to your advantage?

Real Estate: What Are the Ways to Invest in Countrywide Property?

admin — Sat, 26 Feb 2011 12:34:33 +0000

Investing in property is truly popular for producing high market income. Real estate market provides numerous opportunities for making large amounts of gains. That is why there is no wonder why it is gaining prominence for serious businessmen. Although real estate investment offers secured wealth, this is still a hard task to accomplish. Below are the fundamental ideas that you need to bear in mind.

The first thing is the important rental properties. This is the most fundamental investment in real estate industry. This is basically a practice of landownership. A customer will purchase a property like apartment and rent it out to a tenant. The landlord or the owner has the responsibility for paying the taxes, mortgages and costs of maintenance. The owner may also add another payment to gain more profit but the best and usual strategy is to be responsible and honest in charging enough and accurate rent bills. Of course, there are also conflicts that most landlords encounter. Sometimes, they end up with irresponsible tenants who just damage the property. This is very disappointing to your investment because it may negatively affect your monthly cash flow and worst is you can never pay your mortgage which will lead to miserable rental investment.

Next is the rental investment group. This type of investment usually involves small shared money for rental properties. For those who want to invest in a rental property but don’t want to experience too much hassle, rental investment group is the best choice for you. Basically, a company will purchase or establish condos or apartments and sell them through companies which only joined in the group.

Third is the real estate trading. The work of this type of investment goes when the real estate trader purchased properties with the intention of managing them for the short period of time as result of which they sell for a profit. This is also called as flipping properties and is purchased in a hot market value.

These are some of the investment strategies that you must be aware of once you have decided to invest in real estate business.

Playa Del Carmen Real Estate – Investment Update, Dec 2010

admin — Fri, 18 Feb 2011 20:02:05 +0000

Playa del Carmen real estateis a growing market in a healthy tourism area which continues to offer excellent property investment options, with potential for good return. The following are a few of the current developments in the area which will benefit investors.

Highway Bridges- This is one of the area’s most significant current projects, providing rapid movement along the Cancun-Tulum highway over the main intersections for downtown Playa del Carmen and the beach. With frequent ramp access to the main intersections, these 3 long bridges will allow residents of the new gated communities at the north end of the city to have easy access to Playa del Carmen’s malls, downtown area, large supermarkets and the shopping areas and eco-parks at the south of the city. These properties also have the closes access to the Cancun international airport.

New International Airport -The Cancun International Airport is only 45 minutes away from downtown; this new airport is being constructed about an hour south of Playa del Carmen, near the town of Tulum. This will place Playa del Carmen strategically in the middle focal point of the two – an optimal situation growing tourism. Growing tourism means increasing opportunity for income from vacation rentals.

New Walmart- There is already one Walmart downtown, and this new Walmart is just on the west side of the highway across from the community north of downtown. Along with other shopping options appearing in the area, this will benefit both the gentrification of the working class community on the beachfront, and the convenience of the upscale gated communities just a bit farther north mentioned above.

Downtown Repaving -Some of the streets in the south half of downtown still had their original pavement from their construction 15-20 years ago. This repaving will help in a transformation of the south half of downtown from the small fishing village it used to be, to a more upscale Playa del Carmen real estate community with nice condos like the ones which have been appearing in the north half of downtown for the last decade.

New Fifth Avenue Beach Access. This new access will be exactly where the road which runs up to the new Walmart meets with the beach; currently this is the city’s original working class neighborhood, with only a handful of nicer renovated homes. Many features are pointing to an upcoming gentrification; the new beach access will be bricked, with a wooden bike parking and shower area (to wash sand off), as well as a paved and well-designed parking area. There is also a new large hotel being built just up the road.

Each of these points indicates good investment potential in the nearby Playa del Carmen real estate neighborhoods, and investors would do well to investigate buying a property to take advantage of these favorable situations.

IRA Real Estate – Making a Secure Investment For Your Retirement

admin — Wed, 02 Feb 2011 15:02:46 +0000

Making the most of the money in your Independent Retirement Annuity (IRA) is a decision to make the most of the future.IRA Real Estate is one of the best ways of ensuring that your retirement investment is safe and secure while making you extra money. An IRA is an account that is set up by an individual to save and invest for their retirement. It is a way of being able to plan for the future without having to rely on a retirement plan from and employer. Using an IRA for investment purposes to increase the funds in the annuity not only makes good sense, but also it could be a way of doing business by becoming a private moneylender.

Risk Analysis

Although there are people who are hesitant to use the money for fear of losing everything, the risks associated with IRS Real Estate Investment can be carefully assessed before making a decision. It is in fact, one of the best ways of putting your retirement annuity to work. Using an IRA for investment purposes is akin to the buying and selling of share and stocks. There is also a way of creating a self-directed IRA, which will mean that you actually purchase the physical property and not only the IRA Estate stocks.

One of the most secure ways of using your IRA for the benefit of your retirement is to use an IRA real Estate Trust or to invest in IRA Estate Mutual Funds. This is an excellent way of planning for the future because you can choose a mutual fund that is linked to your personal risk profile and the age that you intend to retire. It holds very little risk and you will be able to track the progress of your shares and your investment in the IRA Real Estate Investment Trust at any time that you choose. This trust acts in the same way as any other mutual fund, but it is linked to a fluctuating share price.

Even though the economy is stagnant at the moment, investing in and IRA Real Estate Fund is one of the safest investments that are sure to grow and deliver a financial reward by the time that you retire. Real Estate may have been affected by the economic recession, but it is one of the sectors of the economy that is showing massive signs of growth. President Obama has thrown his weight behind the investors in the commercial property market and is creating new opportunities for investment in this dynamic market.

Retirement should be a time in your life when you are able to enjoy some of the finer things and not worry about where the money is coming from. Investing your retirement funds now means that you are taking an active part in creating the sort of retirement that you want. With careful planning and a sound financial advisor, using an IRA Real Estate investment company to guide and advise you, the future has never looked better.