Feb 052014

When you are searching for new investment acquisitions, do you know your exit strategy before you close on the deal? What measuring stick do you use to determine if you are going to hold a property short term or long term?

Once you think you’re going to get into real estate investing, you should set up either an LLC or a similar entity. This helps protect you and your investments. It will also help boost your chances of getting tax benefits thanks to your business dealings.

Investors use varying matrix’s to determine how long they are going to hold a property. Depending on your investment strategy, you might achieve your financial goals sooner than later, so a short term hold may be the answer. You might be in a high growth market and want to hold longer to capture more of the appreciation.

Find people that are in this business and learn everything you can from them. There are lots of people that want to get into investing in real estate. There are a lot of people who like to speak about this subject. If none are located in your area, you can find forums online where other investors hang out. Get out there and learn from your peers can teach you.

I recently interviewed one of the successful investor who built large portfolio in short time period. Here’s how he determines if the exit strategy will be short or long term:

Problems with tenants can waste a great deal of time for you.

“If I see property, and I do my rehab, and if my rents per square foot are below 70 cents, that’s going to be what I call the Casa. Casa’s usually are deals that I’m going to hold for two years because I’m below 70 cents (per foot per month), usually I’m in a submarket that – it’s okay. It’s not the strongest, and I don’t believe that submarket is going to actually improve maybe for the next five years. However, I’m buying that property for a very good discount.

Be sure to choose regions that have good reputations and where lots of people want to live. This is very important as it will give you the most amount of resale value when you go about your purchase. Try finding property that you can easily be maintained.

If I’m in a submarket that my rents per square foot are above 70 cents, I call that property a Villa. Villas are properties that my holding time is going to be anywhere between 3 to 5 years, or even more than that. I’m going to be in a submarket that I have a much stronger retail – not only mom and pop – but you’re going to find a Home Depot; maybe we’re going to find a Wal-Mart.

Properties near businesses or water can earn you a lot of money.

If I have a Casa and I have a Villa, my rehab changes a little bit. It’s going to be a little bit cheaper for Casa’s. For villas, everything’s a little bit more expensive because it’s directly related to my tenant profile. All my rehab is going to change a little bit, depending whether it’s a villa or a casa.

Understand that your time is money. You may love rehabbing properties, but is all the manual labor really the most productive use of your time? Or would you be better suited to looking for the next opportunity? This will let you to focus on the important details.

It gives us very good direction. For us, before we buy the property now, we have a very clear plan. If it’s above 70 cents it’s a Villa and below 70 cents it’s going to be a Casa. We always have a plan. “

Be very patient when you are first starting out. Your initial real estate investment transaction may not happen as fast as you expected. Don’t get anxious and the perfect investments. That is not a recipe to waste money. Wait a great investment that’s great.

Decide on a short term or long term plan and exit strategy for your properties. If your properties are in low growth markets, and you can quickly realize value, then a strategy to sell sooner may make sense. If your properties are located in high growth markets, then riding the appreciation tide may be the answer. Whatever matrix you use, make sure you have a strategy and a plan for your properties.

Dec 092013


If you have no good information about real estate investing, it’s impossible to do is successfully. This article has the information you need so you don’t lose money. Spend some time going over this information, and you will be in good shape.

Make sure to gain a thorough understanding of local property values. Mortgages and rent in the area can provide a better idea of a house’s value than any financial statement. It’s easier to make a good decision if you look at things from the street level.

Stick to a niche you are comfortable with. You will find more success by focusing your energies on a particular type of investment. Going with what you know will increase your odds for success.

If you are considering real estate investment, then you need to consider just what kind of personal time you are willing to put into property management. Tenant problems can be extremely time consuming. If you cannot juggle the responsibilities, think about hiring a property manager.

Do not assume that real estate will always go up. This assumption is risky in the real estate market and for any one piece of property. You are better off investing in properties that deliver positive cash flow quickly. Property value appreciation will help you invest in future properties.

When thinking of getting a property to invest in, you should get something you know will go up in value. A lot by water or right in a business district, for example, will most likely mean more to you in the future. Try to think about long term prices and estimate how much they will increase, which will improve your prospect for investment.

Before buying a property, learn the real estate essentials. Mistakes in investing in real estate could leave you in a big ditch. Investing in the right type of training is one of the best things you could do.

When you buy any investment property, make sure you have a handyman that’s good and affordable. If not, you may find you cash going to unnecessary repair expenses. This handyman can also be on call for problems after hours that the new tenants experience.

Stay away from purchasing real estate in neighborhoods that are bad. Look into the history of the area you are considering buying a home in. Thoroughly research any property you are preparing to buy. Try to avoid areas with a lot of crime. Not only will it be harder to sell, it is at risk of being broken into or vandalized.

Location is a big part of real estate. Many times, purchasing a fixer upper in a great location is better than purchasing the perfect house in a location that is undesirable. Think hard about location, and never fail to consider the potential that exists.

You should now have a firmer grasp on real estate investing. Be careful with it, and keep learning, so that you get the best possible results. When you feel ready to take the plunge, do so. This will get you started on the road to success!

Dec 012013

Nowadays, a lot of people want to find out how to make money in real estate. However, most individuals do not know how to do it. There are things you may have been searching for to help with your success in real estate, and these are things you should know. Read on to learn more.

Once you make the decision to invest in real estate, establish an LLC or other such entity. Not only will you receive protection, but all your future investments will as well. Also ,you may be able to get qualified for tax benefits when you do business in certain things.

Connect with fellow investors and learn everything possible. Lots of people want to get involved in real estate investments. Business groups are beginning to form in many areas to serve the needs of real estate enthusiasts. Or you can also find many online as well. Join up and learn what you can.

Make certain you have the time to put into property management before you invest. Issues with tenants can take up a lot of your time. A good property management company can be very helpful if you are pressed for time.

When you invest in a property that you wish to rent, be wary of whom you choose as tenants. The person who is renting out the property should have enough money to come up with a deposit, along with first and last month’s rent. If they can’t get that kind of money together at the start, then odds are good that they are not going to stay current on rent. Look for a different tenant.

When thinking about the value of a potential investment, be realistic about the amount of rent you can charge. Rental income can be quite substantial. Eventually, you can sell the property for even more money overall.

When buying real estate as an investment, it’s good practice to have a dependable and affordable handyman working for you. If you don’t, your profits may be sucked up by repair costs. A reliable handyman is great for tenant issues that may arise during the day or night.

Never purchase properties in bad neighborhoods. Look into the history of the area you are considering buying a home in. Thoroughly research any property you are preparing to buy. Homes in bad neighborhoods are often low-priced. Not only will it be harder to sell, it is at risk of being broken into or vandalized.

Remember that location is the most important aspect of a real estate investment. Even a run down home in a great location is better than a nice home in a bad one. Think about the location and the possible potential.

Always look for properties locally. You know the neighborhood already, which prevents leaps of faith from losing you money. You won’t have to worry, because you will be close to the property. If you can’t see what’s going first hand, you will not have the control you need.

As you can now see, you must know what you’re doing if you’re going to invest in real estate. It is very unwise to plunge ahead without a clue. This article gave you a solid foundation of knowledge. Be sure to study the market, and you will surely have profits.

Oct 282013

Are you going to be investing in real estate investment? If you are, it is necessary to first gain an understanding of the market. Read on to get started the right way.

Find like-minded people that are in this business and see if they will help you. Lots of people want to invest in real estate investments. There are certain community business groups who like to speak about this type of thing. If you cannot find such a group locally, you can find forums online where other investors hang out. Join these groups and learn tips from other investors.

Dedicate some of your time to learning about and making real estate investments. You might have to curtail your time spent on other activities in order to make good profits consistently. Ditch the poker night or another guilty pleasure so you go to in order to become a better investor.

Stick with a niche that you are familiar with. You can have much more success at real estate investing if you stay focused within your market segment. Whether you specialize in flipping homes, only working with starters, or starter homes, stick with the things you are familiar with.

Properties near businesses or water can earn you a lot of money.

Consider rental income when you determine how much a piece of real estate is worth. This could net you a lot of extra money. Then you can resell the home for a bigger profit later on.

When you are buying real estate investment properties, it makes sense to affiliate yourself with a good handyman. If you aren’t familiar with things that need repairs, you might find your profits are eroded by having to pay for pricey repairs. A reliable handyman can also address any emergency that your tenants may spring on you at night.

Don’t buy property in a less than desirable neighborhood. Pay close attention to where your property you are interested in is located.Do your homework in advance. A great deal on a beautiful house may mean that it’s in a bad place. It might be damaged and could be hard to sell.

Try to keep your properties in a similar area. You will save gas this way as you visit your properties. This will also helps you to gain more knowledge about the area.

Don’t purchase property unless you keep a cash reserve. The money you put aside is useful paying for repairs and other costs. This money also helps if you can’t rent the property immediately.You still need to think about costs even when your property is sitting empty.

It is important to jump into the market go sour.You are going to find yourself behind with the market’s changing if you wait too long.

Do not make poor business decisions with such a deal happen. You should make the best business decisions that allow you to retain cash in case of emergencies.

Before you throw away your retirement income, you need to ensure you will make a profit. The advice from this article can help you invest wisely in real estate. Keep this in mind.