REALESTATE

Tuesday, March 10, 2009

How To Make Money On Pre-Construction Home Investing

As developers try to raise capital through the building
process, they often pre-sell properties, whether condo units or
homes, at a discount when compared to the prospected market
value. While this can be a great opportunity to get into a
property at less than market value, it also carries risks. To
learn how to minimize those risks, keep reading.

Know the Rules

Because most developers don't want to sell pre-construction
units at a discount and then wind up competing against owners
while trying to sell their own units, they may put rules in
place that either restrict the sale price or even your ability
to sell the unit within the confines of a certain timeframe.

Before you invest in a pre-construction property, make sure you
understand whether there are limits, like being unable to sell
the property within one year of construction completion.

Consider Buy-to-Rent

If your builder's don't allow you to sell the unit within a
certain period after construction is completed, consider using
the property as a rental unit. This option will provide you with
rental income and cover your carrying costs while the property
appreciates in value.

Remember though, being a landlord can be hard work. If your
rental income allows it, consider hiring a property management
company to oversee the screening of tenants and maintenance.
Also, some condominium buildings have rules about renting out
units to other tenants, so make sure you understand these before
you start banking on rental income.

Buy the Smallest or Least Expensive Unit

Typically, the smallest or least expensive house or unit in a
complex or community is the one that will appreciate at the
fastest rate and provide the greatest return on your investment.

You may be tempted to splurge on that extra 15 feet of backyard
or 200 square feet of space, but the cost may not yield the
return you're looking for. You must resist the temptation to buy
based on your personal preferences and instead think like an
investor.

Be Careful in a Slow Market

If the local real estate market is sluggish, you could wind up
trying to sell your unit for a price that's higher than what
builders are offering. If the developer or builder can't sell
units, even after construction, they may reduce the price and
effectively undercut you as your competition. Subsequently, you
may wind up reducing your own asking price and actually losing
on the deal or netting less than you expected.

Watch Out for Wholesale Pre-construction Investment Deals

Wholesale pre-construction investment deals work by grouping
together a large number of investors and purchasing a block of
units from developers at a discount. Most wholesale investment
companies offer professional service done with due diligence,
but there are firms out there that don't live up to their word.
For example, Axiom Realty Capitol was recently handed a
class-action lawsuit for defrauding investors.

Wherever lies your area of pre-construction investing, you must
take sufficient time and effort to understand the market and
risks you face. Armed with practical knowledge, this can be a
lucrative investment opportunity.

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Real Estate Investment For Your Retirement

Real estate investment can be a fantastic way to build equity,
gain capital and increase your net worth as you prepare for
retirement. To learn more about the different ways real estate
investment can help you in your retirement and create income
streams, keep reading.

Equity

Acquiring real estate property over your lifetime can be a
great way to build equity. With patience, almost all real estate
will appreciate in value over the course of many years, even in
a sluggish or down market.

You can then borrow against equity in the property or sell the
real estate for cash and use the proceeds for investment
opportunities or more liquid income. Putting some of those
capital gains into a retirement savings fund could even save on
your capital gains taxes while still protecting your nest egg.

Rental Income Streams

A real estate investment property doesn't have to sit empty.
You can earn income on that property through tenants and rent.
By renting out a property with a mortgage on it, you can use the
rental income to pay most or even all your monthly mortgage,
cover maintenance fees and even see a small monthly profit. In
the meantime, you'll be accumulating equity on the home.

Once the property is paid off, that rental income becomes pure
profit after maintenance costs while being a landlord can offer
you tax breaks on everything from property expenditures to fees
for property management companies.

If you're older or simply don't have the time to screen
tenants, shovel snow and ice off walkways or maintain a
property, hiring a property management company can take care of
that need. Certainly doing so will cost you money, but they can
take care of all the duties and obligations associated with
being a landlord.

Flipping Properties

While purchasing low-cost housing, improving it and later
reselling it for a profit involves a lot of sweat and hard work,
it can be a great low stress "job" for the retiree. Before you
invest in real estate flipping, invest your time in location
research, planning and finding a great real estate agent. This
is one area where the virtue of patience can pay off handsomely.

Reverse Mortgages

A reverse mortgage can turn your property equity into liquid
cash while you retain ownership on the property. Typically, no
payments are required on the home equity loan until you are
either no longer resident on the property or you sell it.

However, interest will begin to accumulate on the property as
soon as the reverse mortgage process begins. This means you
won't have to make payments, but your loan will be accruing
interest. The loan is then paid from the proceeds of your estate
or, again, once you move or sell the property. If you pass away
before the loan is paid, the inheritors of you home would need
to do so.

By turning your property equity into cash, you can create an
income for yourself during your retirement years. But remember
that you will be simultaneously depleting your net worth and the
overall value of your estate. So this is a tradeoff that merits
due consideration before jumping in.

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Real Estate Investing: Insider Tips On How It Really Works

Real estate investing is about more than buying a property for
below market value, throwing some paint on the walls, and making
tens of thousands of dollars in profit. It's about more than
sinking a few thousand dollars into a bogus "investment club" or
grabbing a house at a foreclosure auction and selling it. To
learn the reality of real estate investing, keep reading.

You Have to Spend Money

Buying real estate costs money, whether it's borrowing costs,
closing fees, attorney payments, agent commissions or down
payments - you're going to need to spend money to make money.

Any scam or program that claims you can make money on real
estate investing without spending any of your own money is
lying. So if you hear promises along those lines, walk away.

You Will Pay Taxes

While so many real estate and foreclosure investing scams claim
you can make hundreds of thousands of dollars on real estate
investing, none of them ever talk about what happens in April
when you have to pay capital gains tax on those profits. Those
can add up to a significant chunk of change.

Yes, you can make money, but the reality is you will need to
pay tax on that money, particularly if the property was not your
primary residence where federal tax laws differ.

Location is Key

Buying a foreclosure investment property is about more than
snatching the cheapest house at an auction. Rather, it's about
knowing your market and finding a location that's actually a
prime candidate to sell for a good profit in a timely manner.
Picking up a bargain won't seem like such a good deal in two
years if you're still saddled with a property in a location that
simply draws little interest.

You Need Professional Advice

Instead of spending your hard-earned cash on instructional DVDs
and ebooks that are little more than a selling tool for more
products like expensive seminars or one-on-one conference
sessions, invest your money in certified, professional service.

Search for a quality real estate agent that knows your local
foreclosure and short sale market well. Then, spend the money on
a good real estate attorney who understands your state's
foreclosure and redemption laws. Finally, get a great house
inspector who can offer experienced assurance that you're buying
a sound investment which will not cost you more in the long run
and eat up your profit.

Making Money Takes Time

The longer a home appreciates, the more money you're going to
make on your investment. You'll do even better if you're able to
fill the property with quality, reliable rent-paying tenants.
Unfortunately, the majority of real estate investment programs
lure buyers in with the concept of a making quick buck, when the
reality is that the full process of purchasing and resale of a
home can take at least a year, if not longer.

If you enter the world of real estate investments with your
eyes open and realistic expectations, you will find yourself in
a much better position to plan for longer term success and have
the patience to seek the truly good deals rather than jumping in
impetuously to something you'll later regret.

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Monday, March 2, 2009

Foreclosure Investing: What You Need to Know Before Jumping In

Foreclosure investing involves a lot more than picking up a
house for a below market price at an auction and then turning
around to sell it for an amazing profit. Foreclosure is a long
process, as is real estate, and both are bound by laws and tax
regulations that you need to follow. Before you invest in an
expensive how-to program or ebook, keep reading to learn the
basics of what you need to know for investing in foreclosure
properties.

Why Foreclosure Investing is a Good Buy

Because most banks are only looking to regain the value of the
home's unpaid mortgage, foreclosure investors can often obtain a
property for about 70 to 90 percent of its true market value.

And, thanks to today's still low interest rates, the cost of
carrying that property is low. This means if you can hang on to
a property for five to fifteen years you can actually double
your money, depending on the market. And if you have tenants
residing in the property, you can earn even more.

It Takes Capital

Typically, real estate isn't considered a quickie investment,
and your capital can be tied up for a long time. A down payment
on a home can't always be taken out and withdrawn in the case of
a financial emergency or the need for quick cash.

That capital could also be used for other investments. For
example, let's say you invest $20,000 into a home that winds up
not appreciating at the 8 percent annual rate you hoped it
would. Instead, it depreciates and then eventually appreciates
at a low 4 percent rate. That $20,000 could have made more by
investing it wisely in a diversified investment portfolio.

Ask For a Warranty Deed

Do your homework about potential tax liens or outstanding
building code violations on the property. A warranty deed will
ensure you're buying a property with a clear title.

Understand Redemption Period Laws

Many states have what's called a "redemption period" that
allows the previous owner to clear his or her debt and then take
back the home for a period of time that continues even after the
foreclosure is completed.

Buy a Vacant Home

Typically, the bank or lender will evict the previous tenants
before the house is sold at foreclosure auction. If, however,
you buy a home where the previous owners are still living in the
property, you will need to take on the long, arduous, expensive
and emotionally-taxing eviction process. It's hard and
unpleasant, so unless the opportunity is especially appealing,
look for a home that's already vacant.

Hire Professionals, Not Late Night TV Gurus

Don't spend your money on useless "how to" audio books and
videos that are little more than sales tools for another product
that claims to teach you how to do foreclosure investing.

Instead, commit your resources to a good real estate agent, a
quality real estate attorney and a recommended and thorough home
inspector. Most foreclosure investment homes are sold in what's
called "as is" condition, meaning the seller makes no guarantees
about the condition of the property. This is why you need a
fantastic home inspector to let you know if you're walking into
any major potential problems or expenses.

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Making Money – Three Timeless Secrets To Wealth Creation

Are you wondering what it takes to become real rich and wealthy
and successful in your own business? This article highlights
three timeless secrets to wealth creation that people have known
throughout the ages.

Dream Big & Believe in your dreams

When Napoleon Hill wrote his famous book "Think and Grow Rich",
he found that being rich is not dependent on your pre-existing
financial status and found that the common denominator across
all the people he interviewed was the power of their belief and
conviction. All these people had great dreams and believed in
their dreams and as a result made an effort to push and achieve
those dreams. Today, let no one look down on your dreams and
aspirations and success may be yours.

Plan to achieve your goals

Dreams alone cannot make wealth overnight. Spend some time to
chart out your strategy and plan for the longer term. Making
money involves starting a new idea, growing it and thinking on
doubling your output and tracking your expenses. Once you find
that one idea works, start thinking of adding a system to your
business idea and then plan to grow. Planning is important in
making money and you should always spend some time reviewing
your plan daily and then make changes in response to changing
market conditions.

3. Leverage on experts

Napoleon Hill found that most rich people have a team working
for them. This team provides input and ideas that he might not
have within his own company. Attorneys, accountants, bankers and
external consultants are great additions to your team and can
help you navigate serious potholes in your business. Thus a
successful money making system has to have a great team behind
it for it to succeed. Remember that you should always tap on the
collective wisdom of your team and when you do, your financial
output will start increasing very fast.

Making money today has not changed very much and the basic
principles behind it remain the same. What hinders people from
making money today is that they do not spend time dreaming,
planning to achieve their goals and leveraging on talented
people around them to as to achieve greater financial success.
Great success begins with a dream. Do something for your
financial destiny today as Anthony Robins says and you might
find your financial future changing for the better.

About The Author: Joel Teo writes on various financial topics
relating to Ahwatukee Real Estate Investment. Signup for his
free online Real Estate Investing newsletter today and gain
access to the "Six Day Real Estate Investment Profits Course"
now at http://www.realestateinvestment101.info/Ahwatukee.html

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Investment Property And The Wealth Of Nations

Why are rich people rich and how do they retain their wealth
through several generations? In this article we try to examine
how real estate as seen in investment property has played a
large role in generating large amounts of wealth, how it has
also been used to retain wealth to sustain several large clans
and what you can use in offshore investments.

Wealth Generation with Investment Property

Forbes magazine once commissioned a study and found that most
of the rich people today other than a few high tech
entrepreneurs like Bill Gates and the Google founders made their
money in real estate. But remains, why is there an allure of
Investment Property even today?

This is because traditionally, most people consider Investment
Property to be a secure investment and Investment Property
prices rarely fall and prices continue to rise. Since real
estate mimics economic cycles, rich people start building new
properties for others to stay and since the profit margins
associated with properties can be quite substantial so their
wealth increases with each new Investment Property that they
develop and subsequently resell. Thus we learn that at the
highest stage, investment property, real estate development and
finance all move together to make the rich richer then evern
before.

Why the Rich retain their wealth

Many people know of the Hilton empire and think about the taxes
that they save each year because of the legal trust structure
that holds this wealth together. Actually trusts which are legal
devices to shield offshore income from taxes help to protect
wealth and prevent an heir of a rich estate from squandering it.
One way is by having large trust companies to administer the
trust and then allow beneficiaries to get a fixed sum.

But what do most trusts invest in? It is no surprise to note
that cash flow investment properties like the famous Hilton
hotel chain provide a constant source of cash flow into such
structures and as mentioned prevent a few heirs from squandering
the proceeds of the trust. Rental Income and Hotel Income from
investment properties kept in trusts therefore help rich
families retain their wealth from generation to generation. Thus
we note that rental income and cash streams from investment
properties held by trusts can allow for wealth to be transferred
from one generation to the next.

Wealth of Nations and Investment Property

Since property represents a large portion of a nation's wealth
and both the rich and poor people are so enamoured with it, many
countries codes and laws have specific legislations protecting
and regulating Investment Property. The rich have teams of
lawyers working for them when they look for investment property
since some of the property codes and statutes in both local and
offshore jurisdictions can be potentially fraught with legal
loopholes. So if you want to be a wealthy property investor, you
need to have good professional advisors since every rich
businessman today is as good as the team of advisors that he has
working for him.

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Real Estate Investment Trust – Two Dirty Little Secrets That Property Deve

Most Investors have no read idea what to do with their money
and that's why fund managers and loads of investment instruments
have sprung up to cater to this need by the market for "return
on investment". Real Estate Investment Trusts or Asset
Securitization which is the legal term of art used to describe
the phenomenon of convert asset cash streams into tradable
securities and selling them to investors.

This article after a short explanation about REITs, reveals two
dirty little secrets that Property Developers play on
unsuspecting REIT investors.

Asset Securitization as it is known in the legal industry in
its Non-Enron form is legitimate due to the lower cost of
raising funds. Property Developers take the chance to put their
best properties into the REITs at the start as it would be
cheaper for them to raise funds when compared to getting loans
from the Bank which would increase their debt and reduce the
credit rating for the company. These property developers having
effectively sold their properties away, then manage the same
properties through their management companies and charge fees.
They then take the money to develop and purchase other
properties and their capital gets bigger and bigger.

What most REIT investors are not aware of is that, some
unscrupulous Property Developers start sneaking in their
underperforming assets into the REITs so as to get rid of
property duds and the investors in the REITs end up getting
poorer returns on their investments. This can diminish your
returns substantially.

For example, in Singapore which has one of the most thriving
REIT markets in Asia, there was talk that some of the worst
properties almost being sold into one of the REITs, before
someone intervened to stop this trend. Investors should
therefore take more than a perfunctory glance at the Annual
Reports and Market Announcements concerning the REITs that they
are invested in.

Another thing that most investors are unaware of is the basis
of valuation stated in most prospectus documents for REITs. The
prospectus is this large document that states out the basis of
the investment and reasons why you should invest in it and the
risk factors that any reasonable investor should note when
purchasing units in the REIT.

For example, there was this REIT Company that wanted to list
some properties and when one takes a closer look at the basis
that the Financial Analysts calculate the potential rental
income, its all guesswork. It took the historical rental income
and calculated the potential yield for the investor. That's why
investors should remember the adage of past performance is no
indicator of future returns and scrutinize the basis of
valuation of any investment that they make be it shares, bonds
or REITs.

In conclusion, is your money in safe hands? Are you investing
in a REIT today that has ancient property rental return
valuations or are you buying into a REIT that has a few good
properties in its stable with the rest being duds? Take active
control of your money today and you will start seeing more
visible returns on your investment.

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REALESTATE

Tuesday, March 10, 2009

How To Make Money On Pre-Construction Home Investing

Real Estate Investment For Your Retirement

Real Estate Investing: Insider Tips On How It Really Works

Monday, March 2, 2009

Foreclosure Investing: What You Need to Know Before Jumping In

Making Money – Three Timeless Secrets To Wealth Creation

Investment Property And The Wealth Of Nations

Real Estate Investment Trust – Two Dirty Little Secrets That Property Deve

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