If you are just getting your start in real estate investing, FAQs will probably pop into your head with stunning regularity. Part of your education lies in answering all of your questions and learning winning techniques that will take you from a wannabe rookie to a seasoned, successful investing veteran with a fat portfolio and an expanding bank account balance.
Regardless of how or where you choose to answer your real estate investing FAQ, the questions you have will likely revolve around:
• How much money you can make
• What techniques you’ll need to learn
• How to overcome objections
• Whether investing will work where you live
The simple truth is, investing is a tremendous way to earn the kind of living that we all dream of – and very few of us actually ever achieve. You can reach all of your hopes and dreams, but there is a certain amount of work involved in the process. It will not happen overnight and current market realities can lengthen the time it takes to reach your destination in real estate investing.
FAQ – while they may sound silly at times – are a necessary part of unlocking the door to your future.
It seems like a lot of people nowadays are interested in getting into real estate as a means of investing. There are many ways to do this including flipping houses, buying fixer upper houses, wholesaling houses or purchasing an investment house to name a few. For someone who wants to start off or for those who simply want one particular type of investment, purchasing a single investment house may be the best way to go. It can be a good start to get your feet wet in the real estate industry. Also, having one solid investment house that turns a tidy profit each month because of rents is a highly lucrative plan.
Before purchasing an investment house there are a few things you should consider. You’re in this to make a profit, right? So, you need to calculate how much of a profit you will actually be making based on the particular investment house you are considering. The first thing to think about is your initial investment. If you are buying an investment house to make money off of rental income, the basic questions you need to have answered are:
• How much will it take to purchase the investment house?
• What will be the monthly mortgage price?
• Are there any repairs or maintenance that need to be performed immediately?
• What is the potential sale price of he home?
• How is the rental market where the house is? How long should I anticipate before the house is rented or how long will it potentially stay vacant?
• What are current rental rates in the area?
Before committing to an investment house make sure that first you are purchasing the home so that in case you have to sell it you will make a profit on the sale whether that is thirty days from now or thirty years. Next, make sure your monthly expenditures on the investment house will be less than the monthly income. As a landlord you will be responsible for the maintenance of the home and you should factor in those expenses each month. You won’t likely have monthly maintenance expenses but over time if you have to have a large purchase, that amount was factored in to the overall profit.
Being well informed and unemotional about the business transaction is the key to finding the ideal investment house. Be patient when looking for an investment house. You want to maximize your profit potential, not get into the first house you find. Most importantly, know when to walk away from a deal. If in your calculations, the investment starts to creep a little too close to earning potential for comfort, reconsider the deal. You want a solid cushion between income and expenses with your income well exceeding the expenses in the long run.
Buying an investment house can be a great deal and a perfect long term investment for those willing to deal with being a landlord. But be aware that, as with all investments there are risks. You can never guarantee your investment house will be rented the entire time you own the home. Make sure to have an exit strategy that accounts for the sale of the investment house at a profit if you need to get out of the deal or if you simply get tired of dealing with rental properties.
Millions of homeowners who are delinquent on their mortgage payments face certain foreclosure if they’re unable to work out an acceptable solution with their lender. Knowing the answer to the all-important question of “What is a short sale?” can help a savvy real estate investor to capitalize on the opportunity to snap up bargain-priced properties at a substantial discount.
The answer to the question of “What is a short sale?” is simple enough: It’s a negotiated discount where a lender agrees to accept less than is owed on a mortgage as payment in full for a property. For instance, if a homeowner owes $194,000 to the lender, the lender might be willing to accept as little as $100,000. This will allow the homeowner to avoid foreclosure, more extensive credit damage, and will also let them begin the process of rebuilding their financial life, while giving a real estate investor the chance to purchase a property at a massive discount.
While most homeowners can grasp the short sale concept, the biggest question they may have is: What is a short sale going to do to solve their short-term financial problem – and how will it keep their credit from being even more severely damaged than it already is? If you can answer this question to their satisfaction, a distressed homeowner will likely take the lifeline that you’re offering them.
By sitting down with the distressed homeowner and clearly explaining just what is a short sale to their financial future, you can provide a solution to their financial trouble and can help them to get on with their lives, you can often convince reluctant homeowners to do business with you, especially when they realize that they have relatively few good options when faced with impending foreclosure.
Are you thinking about how to invest in real estate? Congratulations and welcome to a fun and potentially lucrative industry. But before you jump into how to invest in real estate, make sure you know what exactly you want to do within the industry. There are plenty of choices and some of you will want to specialize in a particular niche while others may want to explore a variety of ways in how to invest in real estate.
Let’s discuss a few options:
• Flipping Houses – One of the most popular ways on how to invest in real estate is to flip houses. This basically means you are purchasing a home at a low cost and then selling it for a profit. There are three main ways this is done. First, you find a house for a bargain because the seller is highly motivated to get rid of the house quickly. This could be for an impending move or because of personal financial issues. Another option is to find foreclosure properties. Often the bank will let a house go for under market value to make themselves whole. The third option is to find a house that needs fixing up.
• Fixer Upper Homes – This brings us to one of the other most popular ways on how to invest in real estate. Fixer upper homes are usually thought of under the same umbrella as flipping houses but because it is a specialized niche, we should discuss it separately as it has its own unique issues. If you are considering fixer upper homes as how to invest in real estate, make sure you have the skills, capital and means to get the job done quickly, efficiently and at the lowest cost available. You need to consider your initial sales price as well as the additional money and time it will take to get the house improved and livable. Then, you need to be sure you can sell the property in a short amount of time and at a profit from your total investment.
• Rental Properties – While this can be a great way on how to invest in real estate, it also has its share of headaches. The initial investment calculations should take into consideration the difference between your investment in the property and your potential income from rentals. But, bear in mind that when using rental property as how to invest in real estate, you have certain responsibilities and hands-on concerns to deal with. You may not be able to rent the home immediately. You will have to deal with advertising the rental. You will have to screen potential renters. You will have to spend money on any major repairs or maintenance in the home. You may have to deal with the nightmare of eviction proceedings if the tenants default on the lease. This can either be done by you personally or via a property management company that charges a fee.
Regardless of what you decide on how to invest in real estate there are pros and cons. You just need to decide which ones you find most appealing. You also need to consider which ones will be most profitable for you and often that is taken on a case by case basis.
