Ten hot tips to increase your real estate investing profits.
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TIP #1
There are several tried and true methods to uncover sellers who will literally beg you to take their house. They all boil down to finding a seller whose situation has changed.
For various reasons (such as divorce, death or job conditions), they need to get out from under their home fast. You can often buy these homes for pennies on the dollar, then turn around and sell the property at a much higher market value. That translates into BIG real estate profits for you, and jump-starts your real estate investing!
The 'trick' is in finding these sellers. Be patient and keep looking - they are out there and the rewards are well worth it!
TIP #2
Your rehab project may suffer delays and lost profits due to simple things like a rise in gasoline prices, which adds to the cost of materials delivered by truck to your local lumberyard or home improvement store. A few cents per gallon at the gas pump can be enough to erase your potential profits while you work to rehab and "flip" a property.
Take care to calculate into your rehab cost a 'fudge factor' to include funds for such 'emergencies'. A good rule of thumb is to multiply your estimated rehab costs by .2 (20%) and add that to the estimated cost when you are analyzing a potential project.
If this small addition kills the deal for you, it is probably best to move on to another deal.
TIP #3
If you fear Realtors will view you as competition, enlist their help. You can easily have Realtors all over your area working to help you find more and better real estate investment deals.
As they get a commission for each sale, they are eager to find you deals. Be sure and be ready to take those they bring you as you want to work with them in the future too!
TIP #4
Delays in a real estate investment project leaves real estate investors open to vulnerability from shifting economic factors. If the housing market cools off and interest rates spike before you get your house on the market and sold, you could be left with expenses like mortgage payments, insurance premiums, and property tax added to your balance sheet.
Add an additional 10 percent to your initial calculations for these holding costs when analyzing any real estate investment.
Real estate investing is an altogether different kind of business. People just like you and me buy and sell properties and earn tens of thousands of dollars, often within just a few days of getting into the business. ,A good investor knows that a real estate investment property selected with care can be very rewarding. It can render above 100 percent ROI per year, along with good value increase over time. That is why real estate has become the most preferred form of investment by seasoned investors.
TIP #5
An alternative to real estate is paper investment, where an active real estate investor can supplement your portfolio or even make a full-time business in lieu of actual physical ownership of properties.
This offers the real estate investor a way to invest in real estate without the day-to-day logistical headaches of more traditional investing.
TIP #6
You can sell your property on your own and cut out expensive brokerage fees by following these three easy steps.
Step 1. Calculate the asking price for the property
Hire a professional appraiser to price the home or check the sales prices of comparable homes in the same area of your real estate investment. You can visit your local court house and compare similar recent real estate sale prices within a few miles of your property. Many court records are now available on the Internet.
Always take into consideration the current real estate market. If the market is a buyer's market, you may have to lower your price. If it is a seller's market, you might be able to ask more than the market value for the property.
Step 2. Market the property
Advertise the property and show it to perspective buyers. Make sure you have the necessary purchase contract forms. The purchase contract will need to be signed by you and the buyer once you have negotiated the deal.
Step 3. Close the deal.
You will need a closing agent to perform the closing, which may be an escrow company, a title company or real estate attorney, depending on your area. There is a lot of paperwork needed here as you need to provide the buyer with disclosure statements and he will need to provide you with a loan commitment letter.
Inspections are also performed during this time and a title search will be completed by your closing agent. To complete the closing, you will need to meet with the closing agent and buyer to sign the paperwork. pay any closing fees, pay off the mortgage and pay or put aside any taxes owed. Your closing agent will help you with all these details.
The closing phase is the busiest (and most exciting) time of selling your first property in real estate. The closing table is where all of your hard work pays off and you get to walk away with your real estate profits.
TIP #7
Mortgage note investors can earn substantial yields when the real estate market is challenged by steadily rising interest rates.
Those with prior experience as real estate investors can utilize their knowledge of property to choose sound, secure, credit-worthy investments. When the building that serves as collateral on the note has true value, the associated debt carries less risk.
Those investors who are accustomed to doing rehab on a property usually have an eye for what constitutes solid and problem-free construction and can provide a reasonably accurate estimate on any repair costs.
Utilize a team approach to maximize your profits as you learn more and contribute to your own bottom line.
TIP #8
To earn maximum profits from your real estate investing business you simply find owners who are highly motivated to sell (due to a change in their situation like divorce, death or job conditions), buy their property (preferably with other people's money), then sell at a higher price and keep the change. Often that change is $10,000, $20,000, $30,000...and more!
TIP #9
Many real estate investors have incomes that are erratic and difficult to document. There are many legitimate reasons for this, but traditional banks generally do not care. Very few lending institutions will provide real estate investment loans without complete income verification.
An alternative used by some non-traditional lending sources is to use the "Stated Income" approach, which utilizes statements directly from the borrower as to how much money they make. These loans are great for real estate investors because they are simpler to get when you find someone that will do them, however, you must still be certain that the real estate deal will make the expected return or you can get in trouble quickly.
Look for a lender who uses the Stated Income approach and does not require income verification for real estate transactions that really work.
TIP #10
Let's face it, selling or buying your first investment property is probably one of the biggest, most daunting projects you will ever take on in your life. It's a monumental event that could impact the next few years of your life, and it's for that reason that a lot of real estate investors looking to buy or sell homes will turn to a real estate agent or Realtor for help.
Be sure to work with a real investor-friendly Realtor. Not every Realtor understands what investors need. Most of them are trained in buying and selling property to homeowners, not investors, so be sure you interview them before they start sending you property listings or you will wind up wasting a lot of your valuable time.
A good question to ask any prospective Realtor that wants to provide you with real estate listings is "how many investment properties do you have?" This question is a double-edged-sword as it will give you an indication of if the Realtor understands what a good real estate investment deal is, as well as let you know if they tend to keep the best deals for themselves!
Above all, don't be afraid to get into real estate. Thousands of every day people succeed admirably in this industry every year.
Gather the information you need, then get started making money through your real estate investing!
Steve Majors - The Lazy Investor
Profit from Real Estate Investment articles, real estate investing information and DEALS from one of the most creative investors on the planet ~FREE real estate training course~ http://TheLazyInvestor.com
