How to Improve Property Value

When it comes to selling your home, there are a number of factors that will determine the success or, indeed, failure of your attempts. For instance, the overall structural integrity of your home will be of extreme importance when it comes to the property value. However, if the art of flipping houses has taught me anything, you can take your home’s property value into your own hands. With some hard work and attention to detail, you can transform your house from a subpar suburban pad to a knockoff Biltmore. Here are a few tips to guide you along.

First and foremost, you need to assess your home for damages and make repairs. This almost goes without saying, but keep in mind that you may gloss over some imperfections just owing to that fact that you’ve seen them so often for so long as to make them virtually invisible to you. However, these lesser damages will still impact resale value, so make sure to do what you can to maintain your home before putting it up for sale. It can also be the cherry on top for a potential buyer who’s on the fence to see a home with little to no damage to it.

Next, you can work on interior design. Assuming your furniture is coming with you, it serves only as a template for now, if that, depending on when you move your furniture. However, other elements of your interior design will remain and could stand to be updated to make for a more stunning display to entice potential buyers. So, consider replacing wallpaper and tiles, as well as repainting walls. Small touches like these are sure to increase resale value to the point that it pays for itself to do the extra work. With these tips in mind, you can increase the property value of your home and recoup some of the cost of your new home.

Guide Investment Property For Beginners

Real estate investing is one of the best ways to build wealth, and you might be surprised to find out that you don’t need to be rich to invest in property. Here are some tips to keep in mind as a beginner in the industry.

Knowledge Is Power
The most important thing you need to invest in property successfully is knowledge. Any investment requires research and information to function efficiently, and an investment property is no different. Working in the real estate industry is the best way to acquire the necessary knowledge, and you can earn an income while learning. There are quite a few professions that may interest you, including real estate agents, appraisers, title company representatives, and property developers. Another advantage to working in real estate is that you can build a strong network of influential people within the industry to lean on once you begin to invest.

Make Money With These Properties
There are more than a dozen types of investment properties that will turn a profit. Most people think that an investment property is a home that is rented out to a tenant, but that isn’t the only case. Real estate developers can make money on vacant land. If the vacant land is large enough, it can be subdivided and sold for profit or can be developed into a subdivision with homes for an even greater profit.

Property investing can also be done with the investor acting as a middleman through contracts and paperwork. For example, there are lease option contracts which allow an investor to tell a seller that they will pay a monthly “rental” amount with the option to buy the home within a certain number of years. The investor then rents out the home with the same option and a shorter time frame to someone else. When the tenant exercises the buy option, the investor pays the seller and has made a profit. The investor never actually lives in the house and gives someone who may not be able to buy a home in the traditional method an option to buy.

Many real estate investors also choose to flip homes. This often involves buying a foreclosed home from the bank. These homes are generally not in the best shape. The investor remodels the house and sells it at a profit over what he paid.

Become Independently Wealthy
Owning an investment property and becoming a real estate guru is a great way to build wealth. Begin slowly by learning about the real estate industry and then dive right into earning profits through your investments.

Tips To Stay Motivated As a Real Estate Investor

So you’ve finally decided to pursue your life-long passion of becoming a real estate investor! More importantly, you’ve educated yourself on several investment strategies (to include exit plans). Although you love what you do, you find it quite challenging to stay motivated on a day-to-day bases. On some days you even ask yourself rather or not you’ve made the right decision. Yet the lure of lucrative passive income has propelled you to take the risk.

Most if not all successful real estate business owners share similar struggles. However, to stay driven and reduce risk, practice the following tips starting today:

1. Have clearly defined investment goals upfront: visualize it, do it and be it!

2. Make a list of your “whys”. Your list should evoke some emotions. In other words, write down the reasons why you want to achieve your list of goals. Your list of “whys” will keep you motivated and unafraid of accomplishing your investment goals. Your “whys” will also help you overcome the hurdles that may stand in your way.

3. Knowledge. Know and understand the latest techniques and investment strategies. Knowledge prevents mistakes and mitigates risk. It will also give you the confidence to be able to influence others.

4. Kick the Tires. Evaluate real estate deals estate deals by talking to brokers and other investors. Fully immerse yourself by learning while doing!

5. Always be grateful. Practicing gratitude and spending some time reflecting on the things you are thankful for gives you a much better perspective and mindset.

6. Focus on the long-term plan. Focus on your long-term goals when you’re feeling unmotivated. Having problems collecting rent from tenants? Just got hit with major repairs for one of your properties? Expenses and problems will happen from time to time. Assess the situation, fix/solve them and move forward with your business.

7. Plan for how you will deal with a lack of drive. Temporary setbacks are bound to happen. You’re only human. Think of what others in more adverse situations have endured. Yet ultimately they have reached their goals, Using them as an example will push you through your most trying times.

Lastly, stay positive! Be positive and surround yourself around positive people. Positive energy will lift you up and increase your motivation and productivity. Being positive will also help you deal with the various changes in your business. This in turn will enable you handle the pressures that come with the real estate investing industry.

Why You Must Consider Owning Rental Properties

I was a 24-year old MBA grad know-it-all. I had life perfectly figured out and I certainly knew everything about investments. Working in the finance industry for a large multi-national firm, I often worked with high networth business owners. Much to my surprise, these multi-millionaires almost always invested in real estate and were generally seeking out new ways to capitalize on real estate opportunities. I was perplexed, didn’t these highly successful business men and women know that the paltry returns of real estate were minuscule compared to the stock market? I mean, I could show them many “Wall-Street” reports that concluded real estate was a really poor investment compared to stocks and mutual funds.

It was almost a full decade later that I would begin to seek to understand real estate investing in earnest. Thankfully, by this point life had taught me the importance of humility and, that much to my surprise, maybe I didn’t know everything. I began to quickly see that with real estate, the “cards are stacked in your favor.” You enjoy the tremendous benefits and advantages that the wealthy have throughout time. The economic structural systems and tax laws are designed for your benefit! I was excited and started learning as quickly as I could.

Rental properties have historically been the #1 wealth building strategy in real estate. You borrow money to buy your asset and then have someone else pay for the costs of your asset as you enjoy the benefits of appreciation, equity build-up, tax advantages, and cash flow. What a system!

Here are the 14 reasons you must consider owning rental properties.

1) Leverage (OPM)

The most powerful tool in real estate! You can typically borrow between 70% – 80% of the cost of the property and yet still receive 100% of the benefit of appreciation. OPM stands for Other People’s Money and is what helps fund your deals.

2) Someone Else Pays the Expenses

A good rental property is one where the rents paid by the tenant more than cover all of the expenses associated with the property and yet you still receive all of the benefits, including appreciation.

3) Appreciation

Typically home prices increase in value over time. According to the Texas A&M Real Estate Center, the median list price for a home in the Austin/Round Rock, TX MSA in 1990 was $72,252. In 2015 it was $260,000!

4) Loan Paydown / Equity Buildup

Even if you do not have much equity when you initially purchase the property, without contributing any additional capital you can build up significant equity. You get the duel benefit of using the rents collected to paydown on your mortgage while simultaneously enjoying appreciation. The house is now worth more in value than when you bought it and your loan balance is now lower than the original amount you borrowed. Over time, these two factors are significant!

5) Tax Benefits / Deductions

Most expenses associated with the cost of ownership can be directly deducted from any income you receive on the property. The tax benefits of owning real estate are extensive and are definitely worth exploring.

6) Depreciation

So even though as we discussed earlier home prices historically rise over time, for tax purposes you get to “depreciate” a certain percentage of the value of the rental property each year. Depreciation, which is an expense for tax purposes, serves as a powerful income shield.

7) Inflation

Inflation normally has a very negative connotation for most people. As a real estate investor, you put the power of inflation on your side. As the cost of living increases, you concurrently increase rent. The loan payment is fixed and you are now paying back the loan with “cheaper” dollars. Inflation is a great ally for debt financed properties!

8) Yield (Passive Income)

One of the key problems facing retirees is where to achieve decent yield on their investments. Real estate offers incredible passive income once the note is paid off.

9) Positive Cash Flow in Interim

Until the note is paid off, a good rental still returns several hundred dollars a month in positive cash flow.

10) Hard asset / Less volatile

With real estate you have the security of a hard asset that you can drive by and inspect at any time of your choosing. Additionally, although property values can go up and down, real estate is typically less volatile than other asset classes.

11) Own Property Free and Clear at End of Note

If you have a positive cash flow rental, other than the initial down payment, the rents collected from tenants have paid for all of the costs associated with the property. Once the loan is paid off, you now have an incredible cash flow producing asset with no debt attached to it.

12) Easy to Refinance

As property values increase over time, rental properties are relatively easy to refinance. This allows you to pull out equity and move it into other great property opportunities as they come along. Your initial down payment on the first property could serve as the equity that springboards you into many others.

13) Timing

With rental properties you decide when you sell. This is critically important for any tax minimization strategy. Additionally, by controlling the timing of a sale, you may also be eligible to capitalize on tremendously positive tax deferment programs like a 1031 Exchange.

14) Financial Freedom

This is the ultimate goal and what makes all of the hard work worth it! With long-term ownership of rental properties, you are able to create enough passive income that all of your living expenses are covered. You have no financial need to work at a job and have the freedom to pursue work (or any activity) for fulfillment.

As you can see from the list above, the economic structural systems and tax laws truly do benefit real estate investors! Is there any wonder why all of the successful, high networth business owners I came in to contact with utilized real estate as a wealth building tool? Real estate truly is an amazing tool you can use to transform your life!

The Secret Of Real Estate

It was the “Wild-West” days of real estate! The market had just cratered, real estate agents were dropping like flies, and the implosion of “liar-loans” was decimating neighborhoods. Looking back, I sure picked one heck of a time to start!

When you begin in and survive a market like this, buying properties at the right price becomes permanently stamped on your being. It is very similar to how many people who survived the Great Depression would always keep an overstocked pantry.

So even though I have been a full-time real estate investor for seven years and the market is thriving, I still diligently seek out opportunities that will be financially sound in any market. In other words, I only buy really good deals!

The key driver of my real estate success has been OFF-MARKET properties. Using proven systems, I have consistently generated exceptional opportunities often on properties I never would have known were even potentially available!

So let’s look at three sources for off-market properties.

The first is working directly with homeowners. This is generally my preferred method and this is where I focus my marketing machine. It takes a little more effort but this is where you find those “once in a lifetime” deals. If you have a great system, you will find exceptional opportunities routinely.

The second is working with high-quality Wholesalers and Wholesale Brokerages. Here you have an entire group of people scouring the area looking for well-priced investor deals. Generally, they understand exactly what investors are looking for, how to estimate repairs, and what price an investor would pay for the property. So in addition to your own lead generation efforts, you have an opportunity to capitalize on the efforts of 10 or 20 other people as well.

Lastly, as counter-intuitive as it may seem, real estate agents can be a great source for off-market properties. You will often hear these properties referred to as “Pocket Listings.” A property where the agent knows the owner has an interest in selling, but for whatever reason prefers the property not be listed “on the open market” yet. This is very common with commercial real estate. If you want to learn about these opportunities before they hit the market, you will definitely need to have developed a strong relationship with the agent.

Off-market properties have incredible potential and can really accelerate your real estate investing success. They are going to take a little more effort but the payoff is definitely worth it. In today’s highly competitive property market, there is a tremendous advantage in being able to talk to potential sellers first!

All About Buying Sale Homes

When homes are listed as short sale homes they are usually the ones that is on the path to becoming a foreclosure home and the lender wants to sell the property, maybe even at a loss. This may sound like a good idea as you may be able to get an excellent home at a fraction of what it would cost if it was being sold on the regular market. As with anything, there are always pros and cons.

Pros

• The current lender and owner are both looking to make a quick deal because both parties involved are finding themselves in a difficult financial situate. There are many real estate agents that will list which homes have a short sale agreement so it is makes it easier on the buyers who are looking for a short-sale. Potential buyers can look through the list to see where the homes are located that are on the list and find one for the best deal.
• Such a house can cost a buyer ten to thirty percent less that the true market value of the home. It will let the buyer buy a larger home with less money.
• The pro of the legal process taking some time is that the mortgage company wants to move quickly in selling the home and will process the paperwork fast.

Cons

• The lender may take some time to respond to an offer on a short sale home. This happens more frequent when short sale homes have more than one mortgage on it. When this happens each of the lenders have to agree to the short sale offer. When short sale homes are selling at a huge discount the lender may be less inclined to sell. They can wait until it goes into foreclosure and receive the property so they can sell it for what they want. Doing it this way they can potentially avoid losing any money.
• The legal paper can be extensive on such types of homes, which can be both a pro and con. The con is that the home can be tangled in legal limbo so the time to process it and be ready to take possession can take some time. The homeowners that are living in the home may not be will to give the lender the information they need so this could extend the process of getting the home.

One of the big pluses of looking at short sale homes is that you can possibly stretch your home budget a little farther and get more house than you thought you could but then it can take some time before you can take possession of it and move in to the home.

All About Buying an Older Home

When looking at houses for sale some prefer newer homes but some prefer the charm of an older home. If you are considering purchasing an older house for sale there are pros and cons of doing so.

Pros

• Architectural details-in some of the older homes for sale you may be able to find some of the intricate woodwork that was carved out or crafted manually by carpenters as was done decades ago because there were none of the modern tools carpenters use today. This makes the architectural work irreplaceable and unique. There are no two older homes that will be similar in their style and look. Older homes are meant for those that enjoy the artisanship of that time.

• Cost-effective-the one reason that older homes are relatively cost-effective is that you can get more square footage for a better price that you would pay for a new home with the same amount of square footage.

• Bigger yards-when older and newer homes for sale you will most often find that the older houses have a bigger yard. This extra space can give you more room for a garden, to put in a swimming pool, and pets and children have more room to move and play. With larger yards, your neighbors are not right next to you as many new homes are.

Cons

• Cost of refurnishing and repairs-sometimes an old home was not maintained properly by the owner so this could mean that you will have to spend more money for refurbishment and repairs. One example is if you bought an older home in a costal area you may have to replace rusty pipes. If it has been awhile since the roof was replaced or check then you may have to put on a new roof. In such homes many times, wallpaper was used instead of paint so you may have to peel layers of this off in order to paint the walls. There may also be weak spots in the floors that you have to repair. You may also have to upgrade appliances.

• Safety and health concerns-if there are no smoke alarms installed you will have to install them. You may also have to have an older home re-wired, which should have been pointed out during the home inspection. There is also no way to determine if the older house is mercury-/lead-/asbestos-free.

When considering buying an older house for sale make sure that you have it inspected before signing the final papers. See what is wrong and then decide if you want to tackle these problems or find another house for sale. An older home may have charm but it could also be expensive to repair.

How To Get Successful Open House

Having an open house is one way for your real estate agent to show the house to several potential buyers at the same time. It can be the difference between receiving few to no offers to having several offers on your home. Before staging and having an open house, you, as the owner, should box up and store most of your personal items like pictures of the family, special heirlooms, etc. This is so the potential buyers can picture themselves living in the home.

When staging an open house look at any problems spots from the buyer’s perspective. If the walls are painted a color that only you might like or that a potential buyer might find unattractive then you should paint the walls a neutral color or some type of off white. This way they can picture the room’s walls painted in a color that they like and would go with their decor that would be in the room.

You should plan fixing areas of the home that seem outdated. One example is kitchen cabinets that may be painted an ugly color or the knobs are mismatched, discolored, or even missing you should replace the knobs with something attractive. You could even remove the paint if you want and re-stain the cabinets a wood color. Make sure that the countertops are not stained or chipped.

Make sure to fix any minor repairs such as a step that is loose on the staircase leading to the basement or outside, a leaky faucet, missing railing on the stairs, etc. You do not want someone to fall and get hurt. Seeing little things like this can make some buyers feel that more things could be wrong with the house and decide not to make an offer on it.

The next step is to pack away any unneeded furniture or items. You should store them away with your personal items. You should keep the furniture to the basics in each room to allow the buyer to imagine their furniture being in the room. You do not have to change the entire layout of the furniture in the room but you might want to rearrange some of it to give the room a more spacious look..

The last thing to do a few days before the open house is make sure that the home has curb appeal. You want to make sure that there are no children’s toys in the front yard, that it is mowed, any bushes are trimmed and neat because when a potential buyer goes to an open house the first thing they see is the front yard and the front of the house. You could also have a small potted plant on the porch.

Before Buying a Lake Home

Bumper-to-bumper traffic. Heavy travel schedule. Job stress. The proverbial ‘rat race’. Ugh. These are just some of the reasons that people dream of owning a lakefront home or cottage, a getaway within a couple hours drive time, where they can unwind from the stress of the work and the city, and have fun. Jet skis, fishing, sun tan lotion, barbecues, and crickets. Ahh!

For those folks looking to live the lake property dream, it’s important to know that there’s more to consider about buying lakefront property than just drive time and whether the water’s wet. In fact, doing a little homework ahead of time will pay huge dividends down the road, maximizing the likelihood that the lakefront cottage may stay in the family for generations to come.

Taking some time up front is critical when it comes to buying lakefront property. It doesn’t take long, but there are some important things to consider. You don’t want to make the mistake of moving too quickly and regretting your purchase.

To help you, we’ve put together this quick read – a primer of sorts.

So, what are those key things to consider?

Well, there are a number of them. Some are about you, and some are about the lake and the property itself. And it’s helpful to be familiar with them before you start looking at properties. That way, you can have yours eyes open to the full range of considerations from the outset.

Let’s start with you. These are the primary questions to ask before you begin your lakefront property search:

What do you want to do at the lake?

This is a simple question, and it may be the most important, so it’s worth taking some time to consider.

Do you want to waterski and jet ski? Do you envision floating around on a pontoon? Is fishing important? Are you a kayaker? A birder?

Do you care what other people do? For example, do you want an all-sports lake, or do you prefer a quieter, no-wake lake?

2. How big of a lake are you looking for?

Size matters. Among other things, it will impact the types of activities you can do. For instance, just within 2-3 hours of Chicago, in southwest Michigan, there are lakes ranging in size from less than 50 acres, to the 2,680-acre Gun Lake. That’s a big range.

3. How close do you want your neighbors to be?

Would it matter if they’re close? Or would you prefer to have more open space between you and your neighbors? Naturally, some lakes are more populated than others.

What kind of lake home do you want?

4. How far are you willing to travel?

Most people have a desired drive time of less than two hours. Does that describe you too? Or are you open to traveling further? Your travel time will define a radius, within which will be your search area.

Now let’s move on to the lake and the property. Let’s say you’ve found the place that seems ideal. Congratulations! But before you move too fast – and you may need to move fast – these are important things to consider:

5. How deep is the lake?

The relevance of this question is that water clarity is a key sign of a younger lake, and is naturally more popular for swimmers, while older lakes will have less clarity, and those nutrients make them more popular for fisherman.

6. What’s the beachfront like?

Is it a sandy bottom or have more clay? Is it weedy or have lily pads? The beachfront will impact whether you can have a dock, and influence what type of dock makes the most sense.

7. Does the property you’re looking at have its own private beach, or is it a common beach?

There are advantages and disadvantages to both, but most importantly, you want to know the details that relate to the property you’re considering buying before you buy it.

8. Is the property in a homeowners association?

It’s not uncommon for lake properties to be in neighborhoods with private roads, and sometimes with other common areas. You’ll want to know these details ahead of time, before making an offer. It’s always a good idea to be comfortable with any by-laws or covenants of the homeowners association before making a purchase.

9. Is there anything of note about the lake?

Does it have a reputation, good or bad? Does it have characteristics that are likely to influence property values?

There are other things to consider, but these are the highlights.

The bottom line is that it’s important to have a good conversation about these things before even looking at individual properties. And later, when you’ve found a place and want to make an offer, be sure that offer includes contingencies that allow you to do your full range of due diligence before closing.

Get Help!

Find an agent that truly understands lake properties – if they don’t know enough about all the unique details that come with the lake lifestyle, they can’t adequately represent your best interests. Do your own due diligence to find an agent with the necessary knowledge.

Take into consideration the full range of questions, do your homework and be careful to do your due diligence. Of course, in that regard, it’s also important to work with a qualified and competent Realtor. With proper planning, you’ll make a great decision, and then it’s good times, here we come!

Tips To Hire for House Flipping

A few years ago, house flipping became a big business. It became so big that there had been more than five reality shows about house flipping and these shows rated high on viewership. In 2015, house flipping is still a very profitable real estate business, which you can get into if you have enough capital. House flipping is basically buying an abandoned house, renovating it then selling it at a good price. If you are interested in getting into the house flipping business, you need to know the people you should hire in order to help you from start to finish.

1. A reliable architect

Architects may be well-known as house designers, but they are also good in checking the state of a building-whether it is well-built, strong and whether you can change some parts of the house without sacrificing stability. Having an architect in your team is an advantage to your flipping business because some of your competitors may not have their own architects. Choose an architect who has a good record and who is willing to do the job based on your budget.

2. A good interior designer and decorator

It’s hard to sell a house if the interior is not well-designed. That is why you definitely should hire an interior designer. Interior designers are artists whose canvas is the interior of buildings. They will help you find the best color to paint the walls, placement of the furnishings and the decorations to make the house attractive to prospective buyers. In order to avoid conflicts about the look of the home interior, make sure the interior designer you choose is someone you feel comfortable with and has the same taste as you when it comes to decorations.

3. A fast renovation company

When choosing a renovation company to do the actual repair and remodeling of the house you are flipping, you have to ensure that they have enough qualified workers who can work fast so you can get your investment back fast. Remember, you have competitors in this business too and if they finish their house faster than you do, they may steal away your potential client. However, don’t sacrifice quality for speed too or else no one will trust you again. Remember, a renovation company with high-quality and efficient builders is what you want.

4. Real estate broker

Having a real estate broker is optional, but is advised. Real estate brokers have the necessary knowledge about finding possible buyers as well as connections that can help them find people looking for homes. The real estate broker you choose should be someone you can trust, and this person should have no past or present involvements in any disputes. You can check on your city for list of real estate brokers who are licensed for this job.

House flipping is a profitable business, especially if you have the right people in your team. The list above should help guide you in finding and choosing reliable teammates on your quest to make profits from house flipping.