Options as a Strategic Investment » real estate investing

Florida Real Estate- A Better Alternative for Investment Retirement or Holidays

admin — Tue, 26 Jan 2010 11:23:59 +0000

Real estate investment in Florida has multiple benefits. The rate of appreciation of property is quite high. Florida is a paradise of vacationer, with its exquisite and lovely beaches, bright sunshine, wildlife, golfing, year round tropical climate and friendly residents. There are a number of options for entertaining nightlife as well. The exclusive nightclubs, film festivals and operas are regular features. Aqua sports, tennis and fishing are activities that you could indulge in all year round. The Eco Safari offers adventure. You could even indulge in a horse back safari.

There are a number of real estate investment options in Florida. Depending on the preference, residential or commercial property can be purchased. A home in Florida is a dream for most people. The options available are vacant land lots, homes and condos. According to your budget and preference, you could also explore the waterfront properties available. A smart investment strategy results in an intelligent purchase.

If you are a hardcore investor, try to invest in the property at a courthouse auction. You may be able to close the deal for less than its worth. In the case of selling a property, renovate it to sell it at a profit or indulge in a rental income. There is a demand for rental accommodation all the year round, owing to the number of people opting for Florida as a holiday destination.

Alternatively, you could scout around for property in areas that have a high rental demand. This may take considerable time and effort, since such opportunities are not available all the time. You need to exercise patience and flexibility. If you manage to avail of such property, you could renovate it. This may include painting, checking the plumbing and electrical fixtures. Rent it out on an as-is basis. If you are patient and careful in the selection, there may not be much to renovate. The rent earned would take care of the mortgage payment, while the value of the property continues to grow.

You could create a vacation home to enjoy your holidays in fabulous Florida. Along with an investment in property, you could generate an earning from the purchase. If you have your retirement plans set, this would be an excellent way to boost them.

Another option is to identify property that is in a run-down state and on sale at a cheaper rate. The property may require major renovation. If the price is right and you are in a position to invest extra time, money and effort to get things in order and give the property a facelift, it would be worth taking a plunge. The research on such properties needs to be conducted meticulously and methodically. The actual repair cost may exceed your estimate.

Sunny Florida offers you the advantage of a beneficial real estate investment. The options available are many and a sale or purchase of property in Florida is extremely profitable. The scope of investment in the properties in Florida is in direct proportion to the time, energy and money invested.

Lease Purchase Investing- How Good Is It

admin — Fri, 15 Jan 2010 11:20:19 +0000

Lease purchase investing is not everyone’s cup of tea. Although not very complicated it does have its nuances. However, if a novice investor is determined to succeed, he can certainly take advantage of the opportunity to make a good cut from a lease purchase investment deal.
All investment avenues are open to situations involving an element of risk. This is true in the case of lease purchase also. But one should not allow the risk to obscure its relative advantage over other types of real estate investment. A lease purchase deal gives all ownership benefits and control to the investor without legal ownership. The position is far beneficial and very different than in any other case. A lease/purchase deal allows the investor to live in the house for a period of one year on payment of rent, with an option to buy the property at a price agreed today. For this he has to pay a nonrefundable deposit of a mutually agreed amount. This deposit is adjustable in the sale price if the investor decides to exercise his option to buy the property. On his decision to buy, a portion of the rent is also adjusted towards the final price.
Lease purchase is a unique real estate investment strategy that can be used to control all types of property whether condos, single family homes, multi-dwellings or other types of real estate. The strategy can be employed in any type of market and allows the investor make a profit by commanding an increased rent/price, anywhere from 15 to 20 percent above market rates while still paying the full price to the initial seller. A serious lease purchase investor can usually close more number of deals every year as compared to other real estate investors.
Here is how a typical lease purchase would work to create a win win situation for all parties. A potential seller rents out and transfers control of the property to a potential buyer/investor with an option to let him buy the property within a specified future date for a price already agreed to. The investor pays a non-refundable down deposit against the future purchase. The seller can use the deposit to avoid a foreclosure on his credit report by clearing any defaulted payment and getting his mortgage a current status or for any other purpose. With the rental income coming in each month, his mortgage payments also start getting paid on time.
The investor on the other hand benefits first by saving on the rent he pays; say $1500/month. The position here is different from that in a traditional rent situation. Here the rent payments are adjustable against the final price. The down deposit he makes is as little as $10000 against a house valued $200,000. This entitles him to get into lease/purchase of the property with another buyer for above market rent, say $2000/month and a down deposit of $15000. He can negotiate for sale of the property for an above market price, perhaps $220,000! If the buyer does not exercise the purchase option, he just keeps the $15000 non-refundable deposit and looks for another buyer who can give another deposit against a fresh lease/purchase deal.

Why You Need an Exit Strategy as a Foreclosure Investor

admin — Mon, 04 Jan 2010 23:39:44 +0000

Research and planning are the keys to great investment decisions. Having knowledge about your investment is the only way to avoid trouble and when it comes to investing in foreclosed homes you need to have a profit plan. The plan should include exactly how you will finance the property as well as studying market trends. One of the most important factors of being a foreclosure investor, but one which is often overlooked, is that of an exit strategy. An exit strategy protects you if the market suddenly goes bad.
Property rental is generally the most common exit strategy amongst foreclosure investors. Compared with selling a property, renting it can be much more profitable in some circumstances. Incoming rental income can mean long tern wealth rather than a quick profit. The goal of positive cash flow is possible if you do your homework correctly because foreclosed properties should be purchased substantially under market value. The best places to buy foreclosed properties are in high rental areas as this gives you more chance of finding tenants.
Finding foreclosure properties can be a challenge but an experienced real estate agent can assist you with your search and by studying market trends with you. Partnering with a great realtor can mean the difference between success and failure when it comes to buying foreclosed homes. They can give you inside information that is not able to be obtained anywhere else. Because they earn a commission from your purchase, they will do everything they can to find the exact property you are looking for. They also have an insight into the rental market and potential yields.
After seeing a few foreclosed homes you will notice that many are worn and torn and in need of repairs. Make sure you get some repair estimates before proceeding with a purchase. Along with major repairs, undertaking minor improvements can also add value to the home and increase your rental return. Small things such as new a coat of paint and new carpet can increase perceived value dramatically.
A good way to gauge the rental market is by looking at median prices in the suburb or area you are interested in buying at. Median prices that are half the normal average generally indicates there will be no problem renting out the property once you purchase.
Why not mix in another real estate investment strategy to maximize profits? Offer up your foreclosure property on a rent-to-own basis and you will not only benefit from monthly rental income, but if the buyer exercises their right to purchase the house you will also see a sizeable profit at closing. If they choose not to buy the house at the price you’ve set, well that’s good too: you not only get to keep the option money they gave you at the beginning of the lease, but now you get to rent it out again and get another option payment from a new buyer.
Having rental as an exit strategy is the best way to safeguard yourself against any potential losses on the purchase of foreclosed properties.

Learn Different Ways Of Real Estate Investing

admin — Thu, 31 Dec 2009 23:39:06 +0000

How does real estate investing work in building wealth? The answer is investment strategies of your own. This scenario can be considered as a long-term investment when you buy and hold property to rent or lease to a tenant together with an option to buying. Rent option involves finding a specific property, making its condition ready for rent, and then marketing it to possible tenants. This investing strategy offers plenty of profit opportunities. When the monthly rental given to you is more than the mortgage and other necessary expenses, you can create cash flow. Wealth will be built through tax advantages, tenants paying down your mortgage, and property appreciation. At the same time, lease options can be created by leasing the property for 12 months or more, also with an option to buy. Income from lease options includes tax advantages, profit from sale, monthly cash flow, and upfront option fee income.The investor will select not to resell the property after purchasing a real estate investing property, but the investor select to give it on rent or lease the house for monthly rent. In many cases immediate profit done not yield this method is a real property investing because the investor still pays a mortgage on the property. There are some instances when an investor has completely paid for the property and then rents or leases the property. In these cases, the monthly rent for the property is all profit for the investor. Few people know what is real property investing entails instead many people have head about it, in fact, most knowledge about investing in real estate only extends to the point that it has something to do with making money in houses. Indeed, the simplest explanation of real property investing is that money is made through the purchase and resale of real property. The commonly used investing strategy that is purchasing foreclosed and pre-foreclosed homes. Investors can purchase foreclosed homes from an auction by bidding on it. The higher the profit an investor is able to make, lower the bid. Investors can provide capital to the homeowners to keep their homes from being foreclosed. In this situation, the investor takes the place of the mortgager and allows the homeowner to pay a lower monthly price for the home this is another real estate investing strategy is offering assistance in pre-foreclosure situations. To do this an investor either has to purchase the property at a price much lower than market value. Or, the investor can make some enhancements to the house to improve its equity and then resell it. Almost every investor has considered putting money into real estate at some point in time. It is an attractive investment because it is easily leveraged through mortgages to maximize the potential returns, tends to consistently appreciate more than stocks, and has predictable cash flows. However, investing in real estate is not that simple. Only 5% of people do something when they attend in investing courses. 95% will never offer a deal for a property.One of the real estate investing secret is to purchasing a distressed property is the most popular ways to purchase a property for cheap keep the properties on track and find the good ones and if you want success, you’ve got to have the interest and time. Because of the appearance, condition, or the financial situation of the owner distressed properties usually have some negative affect on their value. Real property investors can purchase distressed properties for a low price by doing some work to fix them up and then resell the property at market value for a profit.

Real Estate Investing and Lease Options

admin — Thu, 31 Dec 2009 11:16:28 +0000

There is never an ideal market condition to invest in the real estate market. The real estate market is open for investment through out the year. Successful real estate investors always make it their priority to understand what their designated target market is. Besides, it is necessary for an investor to understand the fluctuations in the market. However, there is another strategy that is always underutilized in real estate investing, the option/lease strategy.
A great method to purchase your real estate investments, the lease/option strategy requires very little finance. However, the lease/option is used more as an alternative than a financing strategy because you have not yet received ownership rights on the leased property. A pending foreclosure is one such example where the lease/option is used. There are many reasons why a lease/option is used instead of an outright sale. Home/property owners, looking to auction their property, favor a lease/option, as they do not have appropriate or enough equity for their property through traditional methods. For example, if the property were exceeding its market value, the owner would need to offer an increment in the real estate agent commission. On the other hand, homebuyers who are up against a financial crisis would want to test the profitability of the house or the neighborhood.
The Sandwich lease option is the most commonly practiced strategy in real estate. It requires two lease documents, one between the owner and the investor and the second, between the buyer and the investor. An investor would lease a property with an option to buy it in three years. A tenant/buyer would lease the property from the investor with an option to buy it in two years. When the lease of the tenant/buyer is about to expire, the investor can exercise his option, buy the property and sell it to the tenant/buyer.
Further, a basic lease/option strategy includes two legal documents, a lease agreement and an option. The right to possess the property is offered by the lease document, or, as an investor, you can offer the property to someone else for temporary occupation. Most investors who obtain a lease on a property at lower mortgage rate can sublease it for the appropriate one.
A lease offers the investor the right of possession. Stated under a lease agreement is that the landlord (lessor) offers the tenant (lessee) the right to possess and enjoy the property, which is considered the most important benefit of real estate ownership. Though, the tenant does not handle the property taxes and repairs. Once the right to possession of property has been acquired, an investor can profit by subletting or assigning his right to possession.
An option, which is offered with the lease, is the right to buy a property. It is considered a unilateral (one-way) agreement, where the seller is obligated to sell the property, but the investor is not obligated to buy. The investor receives the right to buy and control the property. The investor can market the property and sell it for a profit. Such a property, if controlled for long in an appreciating market, collects additional value. A lease/option is created combining a lease and an option.

Exit Strategy

admin — Tue, 29 Dec 2009 11:15:55 +0000

The most important consideration that you need to make while investing in Maryland Real Estate is how you will get out of the deal. But it is true. An investor has one target in mind — profit. But earning the desired profit and securing it requires a comprehensive plan, and this is what we call the ‘exit strategy’. Put in simpler words, it means when and how you plan to sell your property.

Apart from maximizing profits, an exit strategy can also help a real estate investor in Maryland cut losses if anything falls out of place. An investor can make an exit strategy for all contingencies like slump in the real estate market of Maryland, not finding the right buyer or tenant.

Various factors can affect the selection of the right exit strategy. The first thing that an investor needs to select the right exit strategy for his real estate investment in Maryland is clarity of goal. The investor must decide the nature of income he wants from his property and the time when he wants to cash his real estate investment in Maryland. External factors that affect the selection of an exit strategy include local infrastructural development, market behavior, nature of investment etc. Depending on these factors the investor can consider all options available to exit a real estate investment in Maryland. Some of the exit strategy options could be tax deferred exchanges, creating trusts, joint ownerships, installment sales etc. Let us see using an example how an investor can choose from these options.

Consider an investor who had invested in real estate in Maryland and has sold a property now. The sale has given him huge profits, but after making some calculations he realizes that he might lose a huge chink of this profit in tax. In this case the investor can opt for internal revenue code (IRC) section 1031. This exchange can be used for “property help for productive use in business”. Under this exchange the investor has the advantage of tax deferral on capital gains earned from the sale if he exchanges the property for a “like kind” property. This way the investor is not liable for paying the tax on his profit and can use his money to invest in other properties.

The investor can even plan for his heirs to inherit the property. He can gift it to them in portions don’t exceed the limit of annual gift tax exclusion, i.e. $12000 or even set up a Family Limited Partnership (FLP) and gift limited partnership interests to his heirs.

Let’s study a case where the investor is not looking for immediate liquidation of his real estate investment in Maryland. The investor has the option of opting for ‘tenancy in common’. Usually, investors opt for tenancy in common when they want to own a portion in a fast-developing high-end commercial property. It could be a multiplex, mall or even an office building. This way they also get rid of the liability to maintain the property and are free to sell it whenever they want.

An investor looking to create a regular stream of income from his property in Maryland can opt for installment sale options. This way he also ensures that the tax due on his sale is not payable at once and is divided on a yearly basis.

Another way of avoiding lump sum payment of tax is creation of trusts such as Annuity Trust (PAT) or Charitable Remainder Trust (CRT). These options also ensure a regular stream of income and the investor can also earn interest of the tax deferred over a span of time.

These are just a few examples. A real estate investor in Maryland can opt for various other exit strategies, alone or in combination. But he must take financial advice from an attorney and a tax advisor while selecting a strategy.

Marketing Methods Used in Real Estate Investments

admin — Thu, 24 Dec 2009 11:40:03 +0000

Finding motivated sellers of real estate property is a challenging task. One has to be innovative & enterprising to locate motivated sellers.Unique Marketing Methods to Find Motivated Sellers:Magnetic Car Signs:You can use your car for this purpose. If you have seen magnetic signs made for your cars expressing your desire to buy homes along with phone numbers, prospective sellers will get in touch with you. You can have similar signs in all the cars of your family members.Door Hangers:You have to create door hangers which suggest that you are interested in buying houses, which should display your phone numbers also. Children of the neighborhood can be utilized for this purpose. This gives direct publicity & word of mouth advertising. As negative fallout, some house owners may get angry. You have to manage the situation. It may bring positive feedback too.Service Professionals:You can print business cards detailing your intention along with e-mail id/phone number/fax number & distribute them to service professionals like electricians, plumbers, painters, masons, etc. there may not be immediate response. But, they may be useful at a later date.Local Internet:Include your website address in all your business cards, flyers, newspaper ads & the like. You should advertise your services on local Internet websites such as community website, local newspaper sites & other websites belonging to local organizations.Annual Promotion:Promotional campaigns every year will boost up the prospects of locating motivated sellers. Something like a big billboard can be placed in a strategic area at a vantage point. It should catch the attention of the passersby. Radio or Television shows may help you in promoting your business. Seminars or symposia can be arranged to publicize your business. The expenditure for all these ventures will be quite high. But, this will bring a fortune. It will shoot up your real estate investment options. Many motivated sellers will knock at your door. People who are new to the profession need not spend huge sums for promotion campaigns. They have to establish in the business initially with a few deals & jump into the foray of big business when the atmosphere is very conducive.For more details, please visit:http://realestatewealthtoday.com/FREE-eBook.htmlThis is a day of online trading. Almost all branches of business activity employ Internet for their business promotion. Real estate is no exception to the trend of online marketing. A good number of house owners search Internet when looking for perfect property. Real estate owners must have an effective web presence.Internet has brought about dramatic & significant changes in the real estate industry. This is to be noted by real estate agents & investors. It is simply astonishing to know that there are over 20 lac hits everyday for the keywords “Real estate” in the major search engines such as Google, Yahoo & MSN. The real estate business will remain open 24/7. The prospects of business promotion will be tremendously bright. You need to ensure that it is placed high on the scale within the results pages of the search engine.If a potential property buyer has to click in your site, you need to appear, normally, within the first two pages of the results. The reason for this is 80% browsers stop with the first page & 95% of the browsers do not cross the second page. So, if your site is not ranked within the first two pages you may not get sufficient business promotion. Through Internet marketing, it can be achieved.Advantages of Internet Marketing: * It offers quicker solutions. * Clients can easily reach their avowed targets. * Most of the younger generation are net-savvy & they can clinch the deal using Internet. * Websites have become more popular than literature, thanks to Internet.So, prospective sellers & expectant buyers – both of you can get the deal performed through Internet.

Top Tips to Make Money through Real Estate Investing â Effective Methods of Profitable Investment

admin — Wed, 23 Dec 2009 23:22:53 +0000

Investment in times of pressing economic situations and financial crisis is a very challenging yet rewarding endeavor to embark on. Hence, to make sure that you are in the right track, you need to know what sector is the most viable to put your hard-earned money into. For instance, real estate is still on top of the list when it comes to making a profitable and productive venture. The very first requirement however to have a successful investment is to have substantial knowledge about the milieu you are dealing with. Furthermore, you need the necessary resources in order start and complete your pursuits.

What are the ways of investing in real estate?

Here are a few of the important methods you can employ in your investment plans and ensure yourself a profitable and sound venture.

â¢ Home rental. If you have the capacity to acquire your very own property, you have all the choices on what to do with your new home. If you are after another or additional means of income generation, you may opt for leasing the house to others who need a temporary shelter through rentals. The money you are going to collect will cover the expenses for the mortgage and other utilities for home maintenance.

â¢ Home ownership. If you have the resources and substantial fund to afford a home acquisition, you may want to invest your money through home ownership. This is a good and reliable venture because it can double your chances of earning more especially through resale in the future. You do not only realize your life-long dream, you also add something to your assets and properties for boosting your credit score. Furthermore, you can do other options to improve the market value of your property by making the proper home renovation and repair. You can double your price rate should you properly enhanced the value of your house. Moreover, you also have the choice to utilize the place if you want it leased or rented for more income generating projects.

â¢ Choosing the right location. It is essential to choose a property that is located in a good venue or place especially where it has a more appreciative value. Never settle for a place that is less desirable or have low chances of being developed in the future. Your homeâs market value is mainly dependent on the kind of location it is strategically situated in. Remember that it is imperative to see the whole package of the property before you finalize your transaction for a more productive investment.

Finding the right resources and methods to make the most out of your money is the most important endeavor you can embark on. If you only have the determination and heart to carry on this very valuable financial venture, you will find that there are countless possibilities that may grant you innumerable chances for profitability and success. Real estate is definitely rewarding hence make the right choices and do something to initiate your plans, work for its progress and sustain your endeavors no matter what the cost.

Real Estate Investing Business Plan

admin — Wed, 23 Dec 2009 12:24:31 +0000

Real estate investment business is basically a profit oriented venture but only if it is done skillfully. There is thus a need for proper real estate investment business plan. This plan actually includes ways of setting, marketing, developing, and running the business. Therefore, the growth of the business and the financial success depends largely on a strategic real estate investing business plan. However, the first real estate investing business plan focuses on creating a powerful team of agents. It is the real estate agents who not only help by lending good credit ratings, money, expertise, and professionalism but also provide information about mortgage rates. Mortgage and contracts generally add to the profit.The next real estate investing business plan includes deciding over the property that is to be bought. It is of basic importance that one should have a clear idea about the property. The property may be a ‘fixer’ to be transformed into a new one for the new buyer. The idea behind this is to increase the value of the property, which will again add to the profit. This is a kind of business quite popular among the investors. One of the key aspects of a real estate investing business plan is to ensure that there are multiple possibilities of properties and investment choices. This is because the selection should be based on the rating point given to the properties. This will enable the investor to choose a property that promises great income potential. Real estate investing business plan is not just a simple deal. But it is a business that needs proper marketing, which will helps more people in finding and discover new opportunities. Therefore, the real estate investing business plan also includes ways and means of promoting the business. For this, an online real estate investing business plan is the best option. This may be achieved by blogs, feeder sites, newsletters, and even through search engines. However, if the real estate investing business plan is done with a professional attitude, it is bound to be successful.

Real Estate Investing Guide â Why Do You Need Them

admin — Fri, 18 Dec 2009 11:18:19 +0000

A profitable form of investment, which will provide high returns at low risk, is something everyone is looking for. Once the stock market was the primary focus for such investors, but presently this market is quite volatile. As a result, the real estate market is becoming a better option for most of the investors. But before investing in a real estate market, you will need to be familiar with some terms and strategies. In fact, following a good real estate investing guide will help you to get high returns at a lower risk.

There are basically two types of properties where you can invest. These are the residential properties and business properties. The major differences between these two types of properties are the finances involved. In addition, there are some different guidelines and rules that you need to follow while obtaining such properties.

The following are some real estate investing guidelines that will help you in obtaining residential as well as business properties:

The location of the property: It is better to opt for properties that are located in the city center or are well connected to major business districts. For residential properties, look for one which is in proximity to supermarkets, schools or train stations.

The market value of the property: Do a proper research before purchasing any property. It is better to study the comparative rates of the neighboring properties. This will help you to identify the real value of your property.

The neighborhood of your property: You also need to consider the neighborhood of the property you are about to invest. Verify its safety from the local police station as well as from the local administrative figure.

Real Estate Investing Guide Books

You can also refer to some real estate investing guide books to learn the tricks of this trade. However, you need to look for certain factors which shopping for such books.

You also need to have a proper exit strategy. It will help you to get out of a deal if things go wrong, before it drains your resources.