| |
| |
|
Real Estate Information |
|
|
Secrets of Making Money from Real Estate - Part 3
Great, now how do I actually INVEST in real estate? Investing in real estate will get easier the more you do it. The first deal may take some time, but like anything, the more you do it the better you'll become. Here are some guidelines for investing in real estate. Establish how much you can borrow: Know your limits. Don't go looking for $400,000 houses when you can only afford a $200,000 house. Before you invest real estate you must know how much you can borrow from your lender. This can be anywhere from 80%-100%. If you are investing for the first time, banks will most likely only want to lend you 80%-90%. Once you've established good relations with the bank after five to ten deals, they will most likely be willing to cut you better deals and offer 100% financing. Some private lenders may offer you mortgages and home equity loans of 100%-125%, be careful with these especially if they are individuals. Their motives are often only profit. Most people dread seeing their banker, hoping that THEY will approve your loan application. However from my experience, you need to show the bank who's boss. By this I mean: - Do not deal with only one bank, big mistake. Deal with lots of other banks and let the banks know about it. Send out your loan application to as many banks as you like. The best bank that comes back with the best deal wins. Other things to keep in mind before applying for a loan:Don't lie, you'll get caught and be in a lot of trouble. Try to eliminate liability payments. Or lower payments. Another choice you must make is whether to make the loan an interest only one or a principal and interest loan. I generally prefer to take out interest only loans for several reasons. You will get more cash flow from a property if the payment is interest only. This can go straight to your pocket or cover and unexpected payments with the property. You will also be able to borrow more because you make smaller payments. You may also have the option of paying off the rest of the principal at a later time. Depending where you live, you might also get a tax advantage for taking out an interest only loan. Also, why would you want to pay off debt on something that is already putting money in your pocket and appreciating in value? Wouldn't the money be better spent on a deposit on another rental property which will give you more cash flow. I know I would rather owe 80% on thirty properties earning me $3,000 a year than two or three properties that I have no debt on. Does this mean you can't take out a principal and interest loan? Of course not! If that's what you really want to do and you still make money on the property, go for it. Asset protection: A house will most likely be your biggest and most expensive asset, you'll certainly want to protect it. There are three ways you can do this. Physical protection, corporate protection, and insurance protection. Physical protection is what you can change in the properties structure to protect it. So you could go as far as building a moat around the property! The first step would be to not buy a house in areas of high crime or natural disaster such as earthquakes or landslides. Then think about installing security systems, burglar alarms, and fences. Having your property in a corporate entity such as a limited liability company, corporation, or trust provides legal security and possible tax breaks. This all depends on where you live, so it is important to look into this type of protection if you are thinking about buying a lot of properties. Insurance is the third type of protection. Many insurance companies or even banks will give you good rates for insurance on an investment property. This is because they consider a house a very safe investment! You can get insured on all kinds of things, like earthquakes, depending on how much you want to pay. Be sure to find out the cost of insurance before you buy a property as well so you can input it into your budget calculations. There is no I in team: Before buying a property be sure to have good team. You will definitely need an accountant and a solicitor. It is important to have a team because you can't do everything, you need specialists. Everyone in your team should be passionate about what they do and know that you are passionate about what you are doing ( real estate investing!). People in your team must have experience in buying property! If you feel that anyone in your team is slack, inexperienced, and has questionable motives don't work with them anymore. You may also find It of use to work with a real estate agent who is a property investor themselves. This can be good because If the agent invests in property he or she will have a good idea of what your looking for. However make sure you know the agent's motives. If they are a property investor themselves, why wouldn't they buy the property? Next, Learn how to analyse a deal in Part 4. This article was written by John Whiteside. The original article can be found here http://www.use-your-equity.com/realestateinvesting.html . Use-Your-Equity can show you how to create value in your home, then show you how to use the newly created equity to make money. http://www.use-your-equity.com for more information.
MORE RESOURCES: This RSS feed URL is deprecated, please update. New URLs can be found in the footers at https://news.google.com/news
Google News |
|
|
|
RELATED ARTICLES
Real Estate Investing Skill Acquisition Real estate investing is not in any list of high school electives. You can't get an accredited degree in real estate investing. How to Negotiate a Successful Short Sale Anyone who has ever profited from doing a short sale has also without a doubt had one or two rejected at some point. Guess what? It is just the nature of the beast?As with all types of sales; you're playing a numbers game. Home Loans - Identity Theft Protection Could Hurt Home Sales Identity theft has been a hot topic in the news during the last few years. Just a month or so ago, forty million credit card numbers were compromised due to a computer attack on a credit card processor. Lease Options or Rent to Own? Finding a rent-to-own house is one of the many ways someone with bad or no credit can buy a house. You will often find them called names like lease/options, lease with option to buy, lease purchase, lease 2 purchase, rent with option to buy, rent to own, or rent to buy homes. Making a First Impression When Selling Your Home So you've decided to take advantage of the booming real estate market and put your house up for sale. As you know, buying a house is the most important purchase a consumer can make. Do You Know What Design/Construct (or Design/Build ) Means? I Think You Should! These real questions on 'How To' build are answered by a US Master Builder and myself from the development viewpoint, after I received them from readers of my e-book, "Residential Development Made Easy."Question 1. Selling Houses Fast: Basics of Design & Color Psychology Fixing up houses to ready them for sale includes a design plan for needed changes. Save money on transformation costs by choosing design details right the first time. Real Estate Investing - Protect Your Privacy An irate tenant or disgruntled home-buyer, with the help of a willing attorney, can readily prompt a property search for a property owner in public records. The target of the search becomes someone who has deep-pockets as reflected in real estate assets. Why You Need a Lender to Sell Your Home Home sellers who are prepared to help buyers find financing will sell their homes faster, and for a larger selling price. Think about your potential buyers: some of them will have already arranged for financing, but many don't know how to buy a house. Home Equity Loans - Beware of Appraisal Fraud A new report by the independent Demos group has revealed what may not be a surprise to many people - corruption is rampant in the home appraisal industry. The bust in the dot-com market of some five years ago has left would-be lenders with a surplus of cash to lend. The Best Way To Get Real Estate Listings The Real Estate Industry is HUGE and is a golden opportunity for real estate agents. National average home sales exceed $200,000. How To Negotiate A Higher Price For Your House Negotiation is where many FSBO home sellers really have problems. The wrong attitude or a slip of the tongue could cost you thousands. How to Buy a Property in Bulgaria The CostAlthough the property prices in Bulgaria are quite low compared to the other European countries, there is still a wide variety of prices depending on the property type and location (as a rule the properties in Sofia and at the Black Sea are more expensive). The first thing you will need to figure out is how much you can afford to spend and thereafter to determine the price range for your purchase. Buying and Selling Real Estate: Negotiating to Win-Win You don't get what you deserve - you get what you negotiate for.If you've spent some time on homekeys. Old House? New House? Weighing Your Options Maybe it has something to do with a childhood home we fondly remember. Many of us long for old homes built with solid construction, quality craftsmanship and beautiful details. Cheap, Bargain, Real Estate; Good Deals, Below Market, Low Priced Properties Are Available... Cheap, Bargain, Real Estate; Good Deals, Below Market, Low Priced properties are available if you know how to buy them. By Jody Hudson - Realtor since 1972. Investment Property Part I: How Not to Become a Slumlord After riding the ups and downs of the stock market roller coaster for a while, an increasing number of investors are looking into property investment as a more stable alternative. With hot markets in many parts of the United States, the time may be ripe for you to get into this potentially lucrative trade. The Costs of Transforming Your Home into a Buyers Dream House Turning your house into the home of a buyer's dreams doesn't have to cost a great deal of money. In fact, armed with some paint and the determination to work hard, most home sellers usually need to invest only about $500 to spruce up their homes for a quick sale. Planning for Real Estate with Estate Planning One of the most important considerations you will need to make in regards to your real estate holdings and your estate includes tax planning. If not handled properly, your estate could end up getting hit with significant losses due to taxes after your demise. The Real Estate Agent Alphabet Alphabet Letters after a person's name seem to bestow some kind of special prestige. PHD, MD, ESQ are common.
|
| home | site map |
| © 2006 TIGER MEDIA |