Real estate investing has been one of the best sources of income for many people. Over the last few years, it has provided them with lots of opportunities to make huge profits despite the unfavorable economic conditions in the country. In addition, investing in real estate has helped many individuals reach their dreams and achieve their goals in life.
If you are considering investing in real estate, one of the things that you do first is to educate yourself with proper knowledge about the business. As the saying goes, knowledge is power and having such a power allows you to easily overcome various problems and adversaries. Therefore, if you want to become a successful real estate investor, you should read articles, watch instructional videos, and visit websites that offer various information on real estate investing.
Having a trusted mentor is can also make significant contributions to your career. If you have an experienced colleague who will guide you, it would be easier for you to make tough decisions in case a tricky deal comes your way. In addition, a mentor can also provide you with good advices and various insights.
Another important thing to consider when investing in real estate is your budget. Having a good source of funds and stable cash flow is vital to your business because it can help ensure the completion of a particular project. In addition, it allows you to act quickly in case a good opportunity to make huge profits comes your way.
To ensure a continuous source of funds, you can obtain financing from traditional lenders such as banks, mortgage companies, and credit unions. However, if you don't qualify for a bank loan, securing funds from private money and hard money lenders is a good alternative. It is because these non-traditional financiers are not concerned with a borrower's credit record. As long as you can convince them that a particular deal is worth their time and money, then they would surely provide you with the funds you need.
Indeed, real estate investing is a great way to make money in the housing market. However, being an investor is not a "get rich quick" strategy because just like in any profession, success isn't something that happens overnight. You have to show commitment and dedication to your chosen craft.
By Daniel
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December 24, 2009
Real Estate Investing - Achieve Your Goals in Live
A Quick Guide to Investing in Real Estate
Investing in real estate has been one of most lucrative forms of investment vehicle since time immemorial but it has particularly gained popularity over the last 50 years. While investing in real estate might seem complicated to most people, property investment buying is actually easy if you're armed with the right information and proper guidance while conducting business in the cutthroat world of real estate investing (REI).
To help you get started in the business, outlined below is a list of options that you should consider when investing:
Rental properties. Owning rental properties is one of oldest forms of real estate investing. In this type of investment, you basically purchase a property and lease it to a tenant. You earn profit from the monthly rental fee that the tenant pays. However, as landlord, you are required to pay for the house's mortgage, taxes, and costs of maintaining the property, so there is a lot of calculation that you need to do before deciding on whether you should invest in rental properties.
Wholesaling. Wholesaling is considered one of the easiest and most profitable forms of investing in real estate. Also known as flipping properties, wholesaling involves putting a property under contract and then selling that contract to another wholesaler, rehabber, or end-buyer. When wholesaling houses, you're not buying the property per se; you're just putting it under contract. While there are risks in the business, such as holding the property for too long, flipping properties is considered a low-risk business venture. Many investors prefer wholesaling as they can earn huge profits in a short period of time. There are instances wherein you can receive your pay check for a wholesale deal in as little as a week.
Rehabbing houses. Rehabbing homes is another form of REI that is gaining popularity in recent years. When rehabbing, you basically buy a low-priced property, renovate it, and then resell it for profit. Also called fixing and flipping homes, rehabbing can yield huge profits, especially if you get good education and master the art of renovating houses. This is particularly true in today's economy, which is beset with hundreds of thousands of low-priced houses such as bank owned homes and distressed properties.
Investing in real estate is a very profitable and rewarding business venture, which explains why thousands of people across the country are quitting their day jobs and becoming full-time investors
By John Daniel
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December 17, 2009
Who Are Buyer's Agent and Why They Are Needed?
When a person buys a new home, he or she have several goals. First, the property purchased should be of good quality. Second is to obtain a property at the most economical deal. Third is to buy a property that possesses all the preferred features. Lastly, that is to buy a property situated in the best locations.
Being able to meet these goals can be difficult to do, especially on your own. Not unless you if you have been researching a lot, it is possible to get the perfect house by yourself. You may have to put in an extra legwork to find them, but definitely it is possible. However, there is one skill related to home buying that people may be short of and that is negotiation. Not all people are good with bargaining or even justifying why a property should be priced this way. If you want to get the best property that your money could buy, you better get some representation. And this is where you have to find a buyer's agent.
How Buyer's Agent Work
A buyer's agent works just like any other agent. Their goal is to represent their clients. The only difference is they work to represent buyers. They will work on finding properties for the client. They can face the seller's agent to negotiate prices with them. In return, their clients pay them based on their commissions.
Why You Need to Have One
A buyer's agent is not really necessary but hiring them can be helpful in certain cases. For example, if are a very busy person and you want to get a house but you just do not have the time to shop around, you may as well hire a buyer's agent to do these things for you. You can have a person doing all the necessary legwork and the selection of where to give an offer would still be subject to your approval.
They can also do the processing of documents for you. Anything that is required to be filed for ownership, they can do in your behalf.
Another case to which you may be needing a buyer's agent is when you want to buy your dream house; only it is just a little expensive from your budget. At this case, you really have to negotiate to bring the prices down. However, if you do not possess this skill or you do not like doing this at all, a buyer's agent can do this task for you. He or she can have the knowledge on justifying prices offered. They can work miracles for you since their commission is at stake.
In Selecting Agents
You really have to be careful in selecting a buyer's agent. You want someone who is reputable and knowledgeable about the local real estate. You also have to make sure that they know exactly how to assist you in terms of document processing. And best of all, find an agent, which allows you to bail out the agreement within reasons.
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7 Tips to Know for Home Buyer's
Should you buy a new or used home?
There is no right or wrong answer to this question. Some older homes are still in great shape and some newer homes are a disaster waiting to happen. But one thing is for sure, you need to give this question some serious thought. There are many considerations that will influence your decision. Among them are your goals and life style needs. And how will you wisely allocate your budget?
Many home buyers do not have a plan in place with a list of values and goals. And newly married couples assume their marriage is so perfect that it can withstand any hardship. Well home ownership brings many challenges and hardships. And you need to ask yourself the tough questions and be honest with your answers. Make a list of your values. Do an assessment of your income potential. And define the lifestyle you would like to have. You may believe you want to live in a big and fancy home, but are you willing to pay the price of maintenance and up-keep? Are you willing to become a prisoner of your home? If you don't answer these questions before you buy, life will answer them for you after you buy. So take these tips into consideration.
1.Can you afford to repair and remodel an older home?
The truth is that remodeling is expensive. And many people underestimate how much it is going to cost. You don't want to experience the sticker shock after you have moved in.
Many older homes have been repaired or remodeled without a permit! Often by a home owner that has no idea how to build a home to modern codes. This can be an extremely expensive problem if you make the mistake of buying a home with the intention of remodeling it. You may believe it will only cost you $10,000 to upgrade and remodel a small bathroom. But home owners are often horrified to discover that the plumbing, framing, HVAC and electrical work needs to be removed and upgrading to modern building codes. Often this is not discovered until after the home owner has hired the contractor and the walls, floors and ceiling have been removed. This is a nightmare scenario for many home owners. Their contractor will tell them that the upgrades will be well in excess of the original estimate. And most contractors do not have the skill or the motivation to warn you of potential problems before you hire them. They are understandably only concerned with getting the job. They don't want to scare you away with the possibility of hidden expenses.
So how do know if the home you want to buy can be remodeled without any ugly surprises? The truth is that you have to hire a talented and knowledgeable home inspector with experience remodeling homes. That is the only way you are going to get accurate and wise council about the home you want to buy. Yes it costs money to get an inspection. But putting your foot into a trap that you cannot escape from can affect your lifestyle and pocket book for decades to come. A home that is not right for you can result in years of hardship and heartbreak. The job of a consultant and inspector is to help home owners understand their choices and give them the information they need to make a truly wise choice.
2.Can you cope with a remodeling project?
Remodeling a home can be a very stressful experience. You need to think about whether you can live with the inconvenience and hassle of a remodeling project. Remodeling a home involves the following risks and hardships.
It has an inconvenient impact on the living space. You will be forced to move around building materials. You will be living in more constrained quarters while the remodeling is going on. You may need to set up a smaller alternate kitchen, bedroom or bathroom for awhile.
You will experience a dusty environment no matter how clean you or your contractor is. It will be dusty and at times downright dirty. Can you live with this?
Not all remodelers are created equal. Some are con artists. Some are just real slow. Some are very messy. Some do a poor job. And the ones that do everything right are very expensive because they need to be. So there is no escape from these hard truths. The buyer must beware and you get what you pay for. Sorry, no exceptions.
Do you have good relationship skills? You need to be honest with yourself about this one. If you are married, a remodeling project can test the best relationships. And if you are hiring contractors, you need to be able to communicate with them during times of stress that are inevitable. If you are not good with people, then a remodeling project is not for you. Narrow your home buying choices to newer homes that will require less work.
Utility costs can be much higher in an older home. Here's why.
Older homes were not built with the same modern materials and building techniques that modern homes employ. They retain heat less efficiently and sometimes completely lack insulation altogether. Often older furnaces can be inefficient and consume a great deal of fuel and as a result cost more to heat. Older windows can be very drafty and they often lack the thermal insulating characteristics of a modern window. Between all of these considerations you can expect to pay higher heating and cooling bills. And in time you may need to add insulation like retro-foam that fills empty wall cavities. This can be very expensive. You will also need to upgrade the appliances as well. Will you need a new furnace and water heater before long? Will you save money by purchasing a new furnace right away? Is the water heater old and inefficient? Get these questions answered before you sign the purchase agreement.
3.Should you include the cost of repairs and remodeling in your mortgage?
This question must be answered by your realtor and mortgage consultant. But you need to keep in mind that remodeling and repair cost can be significant. Often you can't remodel without a loan. So it is a good idea to plan for the added cost of the remodeling or repairs. You should at least figure them into the overall cost of the home.
4.It is easy to imagine the possibilities, but can you get permits and is it worth it to remodel?
As a remodeler, I have worked with clients that have remodeled older homes. I also purchased an older home in the Lake Minnetonka area to remodel it to my liking. So I have experienced what it is like to discover the hard truth about remodeling older homes. You must first understand that remodeling projects require a permit and the rules have become very strict and complicated. And many cities have very restricted zoning ordinances which will prevent a home owner from getting a permit because their dream addition will not fit within the setbacks. So before you buy an older home, you need to answer these questions.
5.Do you want to put an addition on the home? If you do, you need to visit the city and learn about restrictions and setbacks. Do your dreams for the home fall within city ordinance limitations?
Will the home require a historical permit? This can often complicate the remodeling process.
6.What did the home inspection reveal? Are there site conditions that will make it difficult to control water flow around the property? Cities can be difficult to work with when channeling water around a home. There are restrictions to water management in some jurisdictions. Are there structural or utilities issues that will make it mandatory to do extensive upgrades to electrical, plumbing, HVAC or structural framing?
Did the previous owners pull the necessary permits when the worked on the home? Did the inspection reveal that the home has been repaired or remodeled? These two issues must be addressed and you need to know the hard truth before you sign the purchase agreement.
7.New homes can be poorly built too. So how do you know?
Often times people assume a new home is very well built and will not need repairs or maintenance for years to come. This is a poor assumption that can get you into trouble. New home builders over the last twenty years have had their margins shrink because of competition from other builders. And new home buyers have been trying to get more houses for less money. Something had to give and that was building quality. The defects that a new home can have are numerous. And the cause of those defects are the result of the following considerations.
Often builders will hire the cheapest sub-contractor they can find so they can make more money or compete in a lower price market. These sub-contractors are then under a great deal of pressure to work very quickly to make a living. This results in corners getting cut and the home not being built to last.
If home buyers want more space for less money, then home builders will use cheaper materials to lower the price. This will have obvious results on building quality.
Often time's city building inspectors are poorly paid and over scheduled. On numerous occasions I have watched city building inspectors spend a few minutes on the job site and then sign off on the permit because they have ten other inspections to get to that day. This happens more times than I would care to admit. But the truth is that many building defects just get overlooked.
State building codes are minimal requirements. And in the past the building codes have defined building methods that have had to be repealed and updated because they trapped too much moisture in the wall cavities. So don't assume that a home that has passed a city building inspection is free from defects.
By Steven
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First-Time Home Buyer Should Know
First time home buying is a very exciting experience for everyone. You could not ignore the feeling of enthusiasm and eagerness. On the other hand, you will also feel a bit worried since purchasing a house involves a huge amount of money. Therefore, it is necessary to put into consideration everything before you decide. Especialy if you are a first time home buyer, there are a lot of things to consider.
Following are some essential facts you need to consider as a first-time homebuyer:
1. When buying a house, normally you have to apply for a loan and have it financed. You must have a stable job since this is a long-term obligation. You must have a job that allows you to survive mortgage payments until the end of the contract. Banks will screen your financial status and the main criterion is a regular income.
2. When the bank gives approval, make sure to bring a prequalification letter to the real estate broker when you being searching for a potential home. The letter will tell you how much loan you can avail. This will also ensure the agent that you have the capacity to purchase a house. This prequalification will help determine the market value of the house you can afford to buy based on your current financial standing.
3. Learn about the first-time homebuyer stimulus. This bill provides credit of up to $8,000 for those who qualify and purchase before Dec. 1, 2009. This can help make your American dream of owning a home into reality. Consult a professional tax adviser for further details on how to benefit from this tax credit.
4. Make a calculation of what you can afford for a home. This is also based on the down payment you have to make and the amount you are allowed to borrow. You can make an estimate by using an affordability or loan calculator on the Internet. However, it is still preferable to consult a financial adviser to determine the exact amount you can afford.
5. Since you have an idea already of the amount you can afford, the moment you found a house, you ca make an offer for it. Normally, you offer less than the price of the house. If you go to places where there is a stiff competition for the same properties, you have to offer a full price or even go higher than the full amount. When a seller or homeowner accepts your offer, the bank will have someone appraise the house. When this is through, the loan proceedings will follow and a closing date is set for signing documents.
6. Think about where you prefer to live. It is your choice to stay in your current neighborhood or you want to start fresh in a different locality. Whatever you choose, make a thorough research of the demographics of that area, consider the distance form your work, and make a research on good schools nearby for your kids.
7. Make a thorough inspection of the house you wish to acquire. You can hire a professional home inspector to guarantee that the property is of good quality. A home inspector's fee is normally at $300. Although this may appear costly, but this is, necessary if you want to be assured that the home you purchase will not give you headaches later on.
8. Don't forget to set aside money for closings costs. It is typically 1 to 2 percent of the purchase price. This goes towards the land transfer tax and lawyer fees.
Remember, real estate never sleeps. If you intend to buy a hot property, you have to make move quickly or lose it.
By Sonia
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Planning to Finding a New Home
When you start thinking about buying a new home, there are lots of things to think through carefully before making the decision to purchase. Some careful thought and pre-planning can help prevent unwanted headaches and hassles down the road.
Unlike when renting a home, if you own your own home then you are responsible for fixing whatever needs to be repaired. Depending on what needs fixing, it can be quite costly, especially if something important like a furnace suddenly needs replacing.
You could hire a company to do a home inspection, but that is still not going to prevent something from needing to be replaced or fixed. This is because the regular use of the home will more than likely require maintenance. A realistic price range for a new home can be determined by adding the money necessary for maintenance to the amount planned for the monthly mortgage payments.
Repossessed properties are often looked into nowadays, because the initial purchase price is lower. However, many of these properties may be worth it only if you can do a lot of renovations on your own or if you have enough money allocated for contractors. Repossessed homes do not come with a guarantee and can end up being more work than expected.
Working with a realtor can be a good idea, as long as certain rules are kept in mind. These might include not seeing any homes that are being sold for more than what you can afford and only taking into consideration the type of floor plan you are looking for. A good realtor, for example, will not suggest you go and look at a home that is considered a two story if you have specified you are only interested in purchasing a ranch style house.
It is possible that the right home may not be found right away because the real estate for sale is not in the right price range, style or location. In this case, just remain patient until the right home is put up for sale.
It can be in your best interest to determine just what you need out of a home before finding a realtor to work with. A list can be made up of what you definitely need, what you would like to have and what you absolutely do not want. It is not uncommon for home-buyers to see only the attractive features of a house and not look further and see if the home offers what is really needed.
Another option is to look into homes being sold by the owner. You can still have professionals take care of the inspection and legal issues before a final decision is made. You should carefully protect your interests when dealing with a for sale by owner situation.
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It's Important to Get Your Home Inspected
Buying your home is a very important purchase, perhaps the most important one you will make. So why take a gamble on your home not being in good condition?
Home inspections can save you from spending tons of money down the road. For example if you get into your home without having an inspection done, what if the home is in need of a new roof? Or maybe there might even be a problem with the foundation, or even the structure. By getting your home inspected, it would make you aware of these problems before it's too late. Here are a few examples on what a home inspection covers;
- Finds any items that need to be replaced or fixed
- Inspects all the major systems, which include; air conditioning, heater, pluming, and gas ext.
- Inspects the structure and mechanical systems as well
Here are some of the areas broken down into detail that the inspector will look at for you; interior, exterior, electric, structure, plumbing, heating, air conditioner. Let's go through some of these one by one and find out why it is very important that they are looked at;
Exterior: Walking around the exterior of the home, the inspector will be looking for any structural faults of the home, as well as looking for any unusual deflections. When we say structural we are mainly talking about the roof, and foundation. These are considered some of the most important parts. Checking out the roof, the things that the inspector will be look at the roof flashing and shingles, chimneys, sky lights etc. making sure there are no water intrusions. Back down on the outside of the home the inspector will check out all the doors, foundation walls, windows, porches, decks, driveways and sidewalks ext,making sure that everything is in good shape to keep you from any future surprises.
Interior: Now moving onto the inside of the home, the inspector will look at ceilings, walls, floors, doors, and windows to insure again that everything is in good shape. The inspection will also make sure there is no interior water damage. Next the inspector will move onto the attic. Making sure that once again, there is no structural damage. As well as making sure the ventilation and insulation are okay. When looking at ventilation and insulation, it is very important because these things can keep you from having to pay extremely high utility bills, not to mention it will keep you and your loved ones warm. They will also check out the basement to make sure that there is no structural or water damage there as well.
After the inspection is complete the inspector will write up a report with everything that was found and reviewed during the inspection.
Now that we have briefed you on some of the pieces of your home inspection, it is important that you keep all of this in mind when buying a home. Don't just go off of any ones good word; go off of an inspector's word. Make sure that you talk to your realtor about this so they can give you a better idea about the process and answer any questions you may have. It's also important that you don't just go with any inspector but that you make sure you do your homework on that as well.
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Dealing With Hard Money Lenders
To invest in real estate, you need a stable source of funds so you can act quickly in case a good deal comes your way. But if you don't qualify for a bank loan, it would be difficult for you to obtain the financing you need. Fortunately, hard money lenders are great alternatives to banks and other traditional lending institutions as they are always ready to provide funding for real estate investors who require financial assistance.
The type of financing being offered by these non-traditional lenders is called hard money loans or HMLs. HMLs are asset-based and hard money lenders base their decision to approve or reject a loan application on the after repair value of a property, for which the loan is being made. If the property can attract a good deal, then they will allow their clients to borrow money from them.
Because HML are asset-based, credit checks are not necessary. An investor can secure financing from these lenders even if they have poor credit rating. In addition, he doesn't have to submit mountains of paperwork, credentials, and other proof of his financial stability.
Negotiating with hard money lenders are easier compared to their institutionalized counterparts. Unlike when applying for bank loans, you don't have to wait at long lines just to talk to the person in charge. You also don't have to deal with a tough loan processing team or panel. And most of all, an investor doesn't have to wait for months or weeks just to determine the results of his loan application. A lender of hard money can assess the eligibility of his loan application and come up with a decision in just a matter of days.
To find hard money lenders, listed below are some of the things that you should do:
1. Unlike credit unions and mortgage companies, lenders of HML don't have storefront offices. They also don't use glaring neon signs to advertise their services. Therefore, a good strategy to finding them is to ask around. Who knows, your neighbor might be willing to provide you with hard money.
2. You can also get referrals from your colleagues in the real estate investing business. Most of them have already experienced working with these non-traditional lenders. Therefore, they can point you to the right direction.
3. Surfing the Internet can help, too, as most lenders nowadays advertise their services online.
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Choosing the Best Option Between Home Buying and Home Renting
The decision on whether to choose home buying or home renting for your housing needs is relevant in the present economic condition that the real estate industry is bombarded with. Furthermore, the massive effects of the financial downturn such as unemployment and instability of jobs and salary wages are instrumental in making that salient decision. What is really the wise option for your housing concerns?
There are several factors to carefully assess when deciding between the two salient entities in real estate investment. Financial resources and time element are vitally important in the productivity of your venture. The availability or limitations of the amount of money you can realistically spend on your house determine which one is the best and wisest option for you.
For instance, if you have abundant resources and you know that you can comply with your monthly payment obligation regarding your home equity loan, then you can opt for home purchase. Furthermore, having the time to spend on your mortgage application, submission of requirements and waiting until your application is found eligible and finally approved is likewise needed. Bear in mind that you cannot easily secure a mortgage loan without painstakingly working for it. Starting from your submission of the loan application, the mortgage provider will require you to pass all the requirements that will prove your eligibility for the loan. For instance, you need to submit your credit report, your certification of employment with the corresponding salary wage, the record of all your liquid assets such as bank accounts and stocks.
The mortgage provider will carefully assess your qualifications to know if a home loan grant is amenable and what type of mortgage to give you among others. Furthermore, you need to pay the different expenses incurred while processing your home loan such as the fees for the home inspector and home appraisal, charge for the title search and insurance, the underwriting and documentation and more. The price of the house you intend to buy is still not included in these sets of expenses.
Renting a building unit or property is another option which is proven to be more affordable and practical in terms of finances and time consumption. For instance, you just have to worry about your monthly rents and maintenance fees for high-rise living. The price or amount of money you needed to pay for the rent is miles and miles different from the hefty cost of your mortgage payment. Furthermore, you do not fear losing the property when missing a payment. It is easier to talk to your landlord to extend your payment dues than to talk to your mortgage provider regarding missed payments and stuff.
Keeping a busy and hectic schedule is likewise one of the viable reasons for home renters to prefer their choice. For instance, you do not need to deal with the home maintenance and repair issues since the landlord or building administration are the ones obliged to take care and address the problem.
The pressing questions and weighing of decision in terms of home buying versus home renting is not at all confusing as long as you know your priorities and realistic enough to deal with your housing needs.
By Rose B
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How Realty Can Be a Wise Investment
If you're looking for a sound investment today, you need look no further than your local realty office. There are many homes available that are perfect for renting out as an income property
Local city real estate is a great investment because it really offers everything a tenant could need. The city itself is full of businesses and shops that are perfect for families and individuals, and of course the surrounding countryside offers anything a person could want by way of outdoor adventure. Whatever a person could want in a rental area, it can be found in your local area.
There are many homes for sale that are also in family friendly neighborhoods with good schools for children of all ages. This is a perfect situation for tenants that have families and need a home large enough to accommodate.
But there are also townhomes and other such properties that are perfect for individuals and couples. This means that no matter what you want by way of rental property, you'll find it for sale locally.
Of course the best way to find investment property is through the use of a realtor or buying agent. He or she can help you find cheap homes, such as bank owned homes and those offered by way of a short sale.
This can save you literally thousands of dollars off the cost of a new home while still offering great properties that are perfect for new tenants.
An agent can also help you through closing and the rest of the purchasing process, which means you can take possession of your home and get tenants in quicker. Remember, every month you're without tenants is a month that you're losing income. So of course you want the process to be as quick and painless as possible.
There are many reasons to consider realty as a potential investment for yourself and your family. Considering how many options you have, it can be a wise financial move to consider, especially with the help of an experienced realtor.
By Micki Ahlo
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Real Estate Investing Choices
In our ever changing markets Real Estate investing is not for the weak of heart. It can be stressful, but it can be rewarding as well. It is usually the new investors that find it the most stressful and that has more to do with lack of knowledge and experience then ability. But it is a great time to be a real estate investor as good deals are everywhere!
So where do you start? Most important is to decide what type of an investor you want to be. There are a number of ways to invest including wholesaling, rehabbing and commercial.
The easiest and quickest way to get into real estate investing is to be a wholesaler. A wholesaler is an investor that buys and sells, or assigns, properties that are usually 30-50% under market. As a wholesaler you can locate properties, put them under contract and assign them to another investor to either fix and flip or hold as a rental. You make your money on the assignment fee. Wholesalers can also have others (bird dogs) bring deals to them. One of the best free sources for wholesalers is word of mouth. Being a friend of a postal worker in the area you invest is always a great idea. They know who's moved and who's getting lots of notices from their mortgage company. So cultivate those friendships and watch the leads come in.
If you're not ready to try wholesaling you can become a "bird dog". A bird dog is someone who finds good deals and turns the lead over to a wholesaler. The bird dog will usually get paid if the deal is put together and closes. Some wholesalers will also take you under their wing and teach you the ropes if they find you are sincere and have a talent for finding the deals.
A Rehab or Fix and Flip investor usually buys the type of homes that wholesalers have. The homes are well below market but in need of some tender loving care. Once they are fixed up they are sold to a retail buyer usually just below market value. The quicker you can sell them the more money you'll make. Being a rehab investor can be very gratifying if you are like me and enjoy watching the transformation you have created. The down side is it takes time and money to do the fix up. And one thing I've learned through the years is it's never as cheap to fix it as you hope it will be. Things always seem to pop up that you didn't budget for. So to be on the safe side always add an extra 10-15% to your rehab budget. And don't forget about holding costs!
Commercial or multi family investing is a more specialized area of real estate investing and should not be undertaken without guidance. Commercial property is evaluated very differently then a single family home. However, it can be quite lucrative when done right. So make a decision and learn all you can then just go out and do it!
By Helene R
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Building Your Real Estate Dream Team
When becoming a real estate investor, whomever you put on your team will decide whether or not you make money in this game. Nobody has reached high summits of success in real estate without the help of others. Here is a list of professionals that you must have on your side before picking up any deal.
Other Wholesalers - Other wholesalers and flippers. Find us on craigslist and Facebook. A wholesaler has already built a list of potential buyers, and may have access to other resources you don't. Just ask them to lunch or meet up somewhere, and offer yourself to help them close a deal. If you could help make a wholesaler 10-14K, not only will you have built up experience, you will have made a few grand
as well!
Hard Money Lenders - The hard money lenders are the guys who can help you fund your transactions quickly and they usually charge a % of the amount borrowed, anywhere from 13-18%. Hard money lenders can also provide transactional funding. Transactional funding is necessary if a bank does not allow you to close a deal with your end buyers cash, so its very important you have this lined up for every deal.
Attorneys - Attorneys who specifically focus on creative real estate. If a lawyer is not familiar with a double closing, or a wholesale deal, lose the number. Many lawyers like to claim they make deals, but end up breaking them. If you run into a lawyer at a real estate networking event, chances are that attorney is someone you should talk to. Take time to visit them at their office and build rapport. If an attorney charges you by the hour can be expensive, make sure you are not getting charged for each second you spend with them talking.
Buyer Agents - Agents hold the key to the most valuable tool in the REO game, the MLS. Once you get a criteria, your agent can create a hot sheet with the specific property your buyers are looking for and automatically generate a email to notify you when a deal is available.
REO Agents - They usually list a property with their contact information in front of the property. Call and ask to be put on their fax or email list. You should have 4-5 agents when you get up and running, but 1-2 should be ok for starters.
Mortgage Brokers - Mortgage brokers are tricky to find because there is no true way to measure good vs. bad brokers. Brokers who work with investors will advertise to them on various classified sites, and will post flyers at local real estate clubs.
By Roberto Jorda-Cid
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