Five Ways to Get Started in Real Estate Investing

There are many methods for acquiring wealth available across the globe today. One of the most easily accessible ways even for the new investor is real estate investing. Many people have made millions of dollars by investing in the real estate market in one form or another.

Real estate is a profitable vehicle for the investor who is dedicated to learning about all of the different types of investments, option, risks and potential rewards that come with real estate investing. There are many different ways to invest in real estate. Here are some of the more common ones people use to get started.

1) Rental property. This is one of those rare real estate investments where you can make money even if you pay top dollar for the property. The reason is you are going to hold onto this property for the long term. You're only requirement is the property generate a positive cash flow. This means after you sum up all of your expenses on the property like financing cost, taxes, insurance and a vacancy rate, the amount you are collecting in rent surpasses this figure. This is one of the classic “get rich slow” methods of real estate investing. You are making a small amount of money each month from the property in rental income, and you are also slowly building up equity in the property over time as you pay down the financing.

2) Pre-construction investment. This is also known as buying property on “spec” or on the speculation that when the property is finished it will sell for a much higher price than you have invested in it. This is seen mostly in new condominium projects where investors fight to buy the units before they are built assuming the price will come up once construction is complete. I have known investors who have purchased several condo units in a facility being built and put $5,000 down on each unit as a down payment. Then before the property was even constructed “flipped” their contract to an end buyer who was willing to pay them 4 to 5 times their down payment just to get in on the deal. The problem with this type of investing is it normally only works when a market is going up regularly. In a down market like we are experiencing these types of deals are much harder to find but they are still out there. There are still part of the country that are very desirable to live in and are experiencing market growth.

3) Flipping houses. This is a type of property investment that has made leaps and bounds in the last few years thanks to the popularity of many popular home improvement and house flipping shows on cable networks in the last few years. This has become a very dangerous thing as people who have no idea what it actually takes or costs to renovate and flip a property are buying homes because they think “I saw it on television and I can do that” Television doesn't show you the whole picture. You have to be aware of all of the hidden costs like marketing the property, closing costs, carrying costs if it doesn't sell right away, etc. You need to make sure you are buying the property at a significant discount to cover yourself completely.

4) Buy and hold. As mentioned above, real estate tends to gain value over time. Bad properties in bad neighborhoods will accrue equity if given enough time. You can visit Realtypin.com for info on new homes, foreclosures, home loans and neighborhoods. History has shown us that even when a large market correction occurs like has happened now, properties eventually do recover and increase in value. The secret is to make sure the property is at least covering it's own costs while you wait for the equity to build up in it.

5) Lease options. Not everyone has perfect credit. For those who have credit issues finding a lender to purchase a home can be an impossible task. They need time to get their credit repaired. These people are perfect candidates for lease options. They will pay above market value for the house and put a non-refundable down payment down. They are willing to pay for the privilege of rebuilding their credit while working towards a path of home ownership. For these people, a lease option presents a solution to their lending problem and buys them the time they need to get their credit and/or income ready to go to a traditional lender.

Four Things To Consider Before Selling Your Home

When beginning the process of selling your home normal questions like how to get the best price for my property and whether or not to use a real estate agent immediately come to mind for most sellers. Whether you're a first time home seller or a seasoned home selling veteran the process of selling a home will inevitably be challenging and complex. The best plan for any home seller is to prepare a home selling strategy before putting a home on the market. In this article you will be a given a home sale strategy that will help get you moving in the right direction.

Why Sell Your Home? - Before selling your home, it is essential to know and understand why you’ve decided to sell. Homeowners choose to sell their homes for many different reasons. Common reasons are because they’ve outgrown the home, they’ve changed jobs, or something as simple as they need a change of scenery. No matter what the reason may be, a home-seller should always be aware of what their motivation is to sell their home. Understanding the motives to sell will make difficult parts of the real estate transaction more tolerable.

What’s The Home’s Value? – The first thing every home seller wants to know is how much their home is worth. Knowing the value of your house is usually the most important factor in the decision of whether or not to sell a home. The two most reliable ways to determine a property’s value are 1) opinions from real estate agents and 2) appraisals. A real estate agent can usually tell you what the home will sell for and the appraisal can give you an idea of how much the property will appraise for when the new buyers attempt to obtain a mortgage. Sellers are always shocked and upset when their house appraises below the asking price or agreed upon sale price because the end result is usually a price reduction by the seller. The best way to avoid future disappointment is researching value before listing.

What To Do Before Listing? - To avoid issues with the sale of the home the best course of action is a pre-listing inspection. Home inspections will give the home seller an idea of which items or systems in the house need repairs and allow the opportunity to make the repairs before the home is listed for sale. Pre-listing inspections allow the seller to avoid difficult buyer inspection negotiations and will make the overall transaction smooth.

Choose A Local Real Estate Agent To Represent You - When a home seller finally decides to sell their home the absolute best decision is to use a local real estate agent to list the property and assist with the subsequent negotiation and sale. Local agents have an intimate knowledge of the local market and how to best market and advertise properties to the local community. Good estate agents will show home owners comparable sales, pending sales, and active competition. Once an offer is received your agent will evaluate and present the purchase offer, advise on how to negotiate, and oversee the transaction from contract to close. Find an agent you trust and let them do their job!

Important Things to Evaluate When Buying the Property for the First Time

The decision to purchase real estate is one of the most important that you will make in your lifetime. Although it can be an exciting process, there are a few things that new purchases should know about ahead of time in order to save time, money and possible disasters.

First, enough cannot be said about knowing beforehand what your credit score and track record is. It is a buyer's market right now because of the economic slump so that dictates that there are plenty of residential, commercial and foreclosed properties on the market, some of which buyers can get at an all time amazing rate. However, a slowed economy also means banks are not loaning out money as readily as they once did. Most banks have experienced major setbacks and losses in the past few years and are gun shy about dolling out their money to people who may not be able to pay them back. As a guideline, they are more apt to loaning money to those whose credit score is 650 or higher and who have remarkable credit histories of making payments to other lenders on time. The government offers a once per year free credit report which can be viewed and downloaded online as do other companies. Know where you rate. This will not only give you an idea if you will quality for a loan, but also approximate what kind of interest rate you may qualify for.

Another key to successfully purchasing a property for the first time is to buy a property that is not risky. Particularly for first time buyers, playing it safe in case you need to resell in a short amount of time is the best way to go. Look at properties that do not need a lot of refurbishing or costly fixes. Many things are factored into what makes a property positive or negative and will either raise or lower the resale value. Properties, if they aren't commercial, on busy streets, with minimal upkeep pertaining to roads and landscaping often are considered lower in value. Other things to consider are whether the area has a Home Owners Association, has land attached to the property, and that are in good school zones are considered higher in value. These factors, as well as others will increase the value of the property you are considering.

It is also helpful to seek help from a real estate professional regarding zoning laws within the region. Things like environmental considerations and possible commercial development can quickly increase or decrease property value. Some laws are difficult to understand but professionals can explain them in layman's terms.

If you're purchasing commercial property also ask about land developing costs and utility companies nearby. Some land is not well developed and areas often times are far from utility companies, both of can be expensive and wreck havoc on your budget.

Finally, once you find your dream property, invest the time and money into a certified property inspector. These inspectors can go through the property you have chosen with a fine tooth comb both internally and externally and will alert you to any property malfunctions or improvements that will be required prior to buying. While most properties will have a defeat here and there, some may be in need of involved repairs that could cost a lot of time and money to fix or replace. What may seem like a quick fix to a novice real estate purchaser could end up breaking the bank and your budget. Some home remedies are just not worth the time and money.

Additionally don't be shy about talking to neighbors and locals. They are a wealth of knowledge regarding community safety, local property values and damages and conveniences like stores, doctors and schools nearby.