Exposing The True Secrets Of Real Estate Investing

Real Estate Investing Success

Real Estate Investing Success is a learning material created to teach you all you need to know about real estate investing. The product, which comes in the format of CDs and PDF covers everything including how to start creating an active-passive income from real estate, how to avoid and eliminate mistakes of typical startup entrepreneurs, and a step-by-step process for starting a profitable business. With many people out there struggling with stagnant income and debt issues, this material can come in handy to help you with your financial problems. Real Estate Investing Success will help you achieve financial freedom and a break from the unhelpful tutorials on the internet that just feels your mind with the information you never apply. This book will help you stop worrying about not having enough money and start increasing your income through real estate. More here...

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Why Real Estate Investing

Maybe you want to buy your own home and learn how to save thousands of dollars on the transaction. Maybe you realize there is no job security in the United States (layoffs, reengineering, and early retirement all equal being fired), so you want to create your own business. Even if you have a great job and things are going well, if you are wealthy and successful, I still challenge you to do real estate investing on the side. If you own a home, you are already a real estate investor. You probably know somebody a friend, a relative, a coworker, a grandparent, an uncle, or an aunt who has made a lot of money in real estate, often by accident. Most people spend 40 to 50 hours a week stressed out, working to make 40,000 a year and then, with one real estate deal, they make 40,000 almost by accident in a short amount of time. This book can give you all of the basic information that you need to get started. Make this book the catalyst to get you started and to find within yourself the desire...

Join a Real Estate Investment Club

Nearly every community offers beginning investors the opportunity to join a locally operated apartment owners' association or real estate investment club. In addition, in most midsized and large cities, real estate and lending pros often offer free (or low-cost) seminars on investing and financing.

Leith Seegers Mc Kahan Real Estate Agent

While the research for this book began in the spring of 2004, the idea was born nearly two years earlier when we interviewed Cristina Martinez for our first book, The Millionaire Real Estate Agent. Cristina had built an amazing real estate sales business that generated over 4 million in gross income each year by catering to residential real estate investors. The stories she told inspired us and pointed us down the winding path that ends with these pages. Thanks, Cristina. We began the search for investor interviewees by focusing on the wonderfully talented and successful real estate agents and investors we've known for years and kept asking for referrals until we expanded our list past those initial contacts. While everyone who agreed to be interviewed was helpful and insightful, several people really stand out because they went above and beyond to introduce us to more investors or supply more information. The first name that springs to mind is Dyches Boddiford, who, even though he...

Real estate investment trusts REITs

Real estate investment trusts (REITs) are a special breed of stock. A REIT is an investment that has the elements of both a stock and a mutual fund (a pool of money received from investors that's managed by an investment company). It's like a stock in that it's a company whose stock is publicly traded on the major stock exchanges, and it has the usual features that you expect from a stock it can be bought and sold easily through a broker, income is given to investors as dividends, and so on. A REIT resembles a mutual fund in that it doesn't make its money selling goods and services it makes its money by buying, selling, and managing an investment portfolio in the case of a REIT, the portfolio is full of real estate investments. It generates revenue from rents and property leases as any landlord does. In addition, some REITs own mortgages, and they gain income from the interest. REITs are called trusts only because they meet the requirements of the Real Estate Investment Trust Act of...

Millionaire Real Estate Investor

Probably the most common question on the tip of every new investor's tongue is Now that I'm ready to invest, how do I find great investment properties The Lead Generation Model of the Millionaire Real Estate Investor answers that question. Without leads prospective properties that look like great opportunities your investment plan can't be accomplished. To be successful, you need leads lots of them in fact, the more, the better. With more leads you get more opportunities, and with more opportunities you get to pick the very best among them. This is what millionaires do. They get the most leads and as a result get the best properties. You could say it's quantity of opportunities first and quality of picks second. This is why millionaires take lead generation seriously and take it big. They know that finding great investment properties is a numbers game and that the quality is in the quantity. Elmer Diaz Millionaire Real Estate Investor ty leads them to find the Houston, tx wrong...

Real Estate Investment Trusts

Real estate investment trusts, or REITs, are corporations or business trusts that meet federal tax law requirements to be a REIT. They function like closed-end mutual funds, which we discuss in Chapter 5. REITs generally invest in real estate and offer their investors marketability, centralized management, limited liability, and continuity of interests. Plus, REITs can avoid corporate income tax because they pass their earnings along to their shareholders. The distributions are taxed as ordinary income to the shareholder. However, they cannot pass along their losses. There are other ways to invest in real estate, including buying and developing land, purchasing rental properties, limited partnerships, etc. However, I usually advise my clients to invest in REITs, when it is appropriate. I feel that the centralized management and the pass-through of income, which has been as high as 11 percent, outweigh the possible advantages of direct ownership.

How to Locate the Owners of Vacant Properties

You should be able to locate the owner of a vacant property by looking up the street address on your county's real property tax roll. The tax roll will have the name of the owner of record along with the post office mailing address where the property tax bill is sent. However, sometimes the address listed on the tax roll is incorrect. When this happens, go to the following sources in the county and state of the property owner's last known address, and check the

Looking for Bargains in a Depressed Real Estate Market

Obviously, the real estate market today is in the dumps. In late 2008, Moody's predicted that the following areas would have the most significant drop in real estate in 2009 (and probably for the next few years) Atlanta, Boston, Chicago, Houston, Los Angeles, Miami, New York, Philadelphia, and Washington, D.C. To add to that bleak forecast, here are a few other statistics For example, if you're thinking about selling a property to buy something else, our suggestion is to wait until 2010. Most economists are predicting that real estate in 2010 should be a bit stronger because inventory will decrease and, therefore, supply and demand will balance again. Because builders aren't building, there won't be a glut of new properties. People still need a place to live, and even the rental market will increase. On the other hand, if you're interested in buying real estate for www.nahb.org hoi. The Web site of the National Association of Home Builders ranks U.S. cities by affordability and how...

How to Find Great Deals on Real Estate Investments

When the real estate market is down, that's obviously a buyer's market which is exactly the market investors should be looking for. It's also a good time to buy real estate if you're interested in renting it out, which is what we, as investors, are personally most interested in. However, just because that's our strategy doesn't mean that strategy is right for you. For example, many investors in the past were interested only in buying property, holding it for a year and a day so that they could get the tax benefit and then turning around and selling it. If you're interested in buying now, absolutely phenomenal deals are out there. You just have to know how to take advantage of them. For example, you can buy now and hold until 2010 (or later) because, as mentioned, everything we're hearing is predicting that in 2010 the real estate market will begin to see an improvement in terms of higher prices and more sales. So until then, we have a buying opportunity, whether you decide to buy...

Buyer Beware New legislation Is Impacting Real Estate Investors

Up until 2008 or so, not many people were familiar with some of the terminology that has (unfortunately) become all too commonplace since the decline in the real estate market. We're referring here to properties that are either short sales or in one of the various stages of foreclosure. These are strategies that investors, as well as homeowners, use to buy property. But, as we've emphasized so many times throughout this book, you need to do your due diligence (look what happened to those who invested with Bernie Madoff ) before you decide to operate in any of these different types of markets. We're going to see more and more such legislation, so to protect yourself, check the current laws before you buy. Some things may be grandfathered into these new laws to allow for investors who bought foreclosed properties a long time ago. You should also check if there are landlord or tenant law changes in your specific real estate market, because not all real estate markets are identical. To...

Best Price Technique Three Introduce a Fictitious Buyer through a Real Estate Agent to Help Knock 3 Percent to 6

If the seller would accept an offer through a real estate agent, he would have to pay the commission to the real estate agent. So, in essence, he is saying the price would be lower by 3 percent to 6 percent to cover the commission. Some sellers will point out that they would be willing to pay for a buyer's agent commission but not for a listing commission. In this case, they are saying that they are willing to knock 3 percent off the purchase price.

Real estate investment trust funds

Do you want to invest in real estate without the hassle of being a landlord Invest in real estate investment trusts (REITs), which are stocks of companies that invest in real estate. These funds typically invest in properties such as apartment buildings, shopping centers, and other rental properties. Of course, it's a hassle to evaluate REIT stocks, but you can always (you guessed it) invest in a mutual fund of REITs

Buy Real Estate Options at Prices 5 Percent or Less of the Propertys Value

To gain maximum leverage when using real estate options and to avoid having all of your working capital tied up in real estate option fees, I recommend that you never pay more than 5 percent of a property's current market value for a real estate option. For example, on a property with a current market value of 250,000, you should never pay more than 12,500 for a one-year real estate option. In fact, I probably would not offer more than 10,000 for a one-year option on a property worth 250,000. And to reiterate what I told you at the beginning of this chapter, the amount that you wind up paying for a real estate option usually depends more on your skills as a negotiator than on the actual value of the property you are buying the option on. Depending on the condition of the property and the owner's circumstances, I usually start the price for a real estate option at 5,000 and increase it in 500 increments until I buy the option or cease negotiations.

Why Most Title Insurers Consider Real Estate Options to Be Risky

Please keep in mind that title insurers, by the very nature of their business, are rather skittish when it comes to what they will insure. And to most title insurers, insuring real estate options is perceived as being risky business. Title insurers generally consider straight or naked real estate options, which are not contained in lease-options, to be more risky than so-called ordinary real estate instruments. Why the greater perceived risk with real estate options There are many reasons. For example, all title insurers fear that an increase in the value of a property under option could cause an optionor to refuse to transfer the property's title after the real estate option has been exercised. In a nutshell, title insurers are leery about being held responsible for the potential cost involved to legally force an optionor to transfer the title to the property under option. Title insurers are also fearful that the title to a property under option may be owned by an individual who...

Achieve 1 Million in Annual Cash Flow through Investing in Real Estate

The interesting thing about investing in real estate is that you have many options for achieving your big income goal. As one of our millionaire investors put it, There are many roads to Rome. For the purposes of this discussion, let's narrow our focus to single-family residential investment homes and attack the issue from four distinct angles Marshall Redder Millionaire Real Estate Investor Grandville, MI

How to Clean Up and Secure a Vacant Property under Option

First things first Always start cleaning a vacant property from the front sidewalk and work your way to the rear property line. You should always start your cleanup from the front sidewalk to enhance the property's curb appeal and make it more visible and enticing to prospective buyers passing by. Here is a sequential listing of how you should clean up and secure a vacant property

Resell Your Real Estate Options for Maximum Profit

Throughout the course of this book, I have given you detailed, step-by-step instructions on how to use real estate options to control undervalued properties with immediate resale profit potential. In this business, you make your profit upfront when you buy low-cost options on properties that are priced well below market value. But you do not get paid until you turn around and resell the option for a profit. And getting paid is what this chapter is all about It should not take a rocket scientist to understand that there is a direct correlation between how well a property is marketed and how fast an option sells. If you do not get anything else from this chapter, please get this Market the property, not the real estate option. Never lose sight of the fact that what you are really selling is not the real estate option agreement itself, but rather the property under option. The fact is, I have never advertised a real estate option per se instead, I have always advertised the property...

Tools for Running Your Real Estate Investment Business

This appendix includes excellent tools to keep you organized and within legal guidelines for your real estate investing business. It includes forms and contract samples used by real estate investors to streamline their business. This selection of forms is not meant to be comprehensive, but rather a sampling of commonly used ones that have been developed and refined over the years. You'll find this extensive appendix is organized in three sections (1) Legal Forms, (2) Sample Forms and Procedures, and (3) Guidelines for Success. If you would like to receive a full set of forms in a CD-ROM format, or if you would like to sign up for advanced seminars in real estate investing seminars, landlording, and asset protection, please call 888-302-8018, or visit www.shemin.com for full details.

Real estate agent Versus real estate broker

Just what is the difference between a real estate agent and a real estate broker This section gives you the facts of the matter, although some answers may differ in your state. Check your state laws if you decide to pursue a career in this field. What distinguishes a real estate broker from a real estate agent is the licensing. There are two types of licenses a salesperson license and a broker's license. A person with a salesperson license (generally called a real estate agent) can only perform salesperson duties, like representing sellers and buyers while earning a commission. Someone with a salesperson license must have a broker's supervision to perform those duties.

Price2555 Value2481 to 1738 Sell General Description of Washington REITa Real Estate Investment Trust

Washington Real Estate Investment Trust (WRE www.writ.com ) is an equity real estate investment trust that owns and operates 59 properties in the Baltimore-Washington corridor. Their properties consist of 24 office buildings, 15 industrial buildings, 11 retail centers, and 9 mul-tifamily properties. WRE's objective is to invest in real properties in prime locations, to improve the properties, and to manage, develop, and lease the projects to improve their economic performance.

How Five Ordinary People Created Extraordinary Lives by Investing in Real Estate and How You Can

We'd like to introduce you to five of our past graduates. They came to real estate investing from a variety of backgrounds. We hope that their examples of what ordinary persons can accomplish when they step out there on faith and go after their dreams will inspire you to put to use all the strategies and techniques you have learned in this book. The next time you feel that there is no way you could ever be successful by investing in real estate, we want you to remember their stories. If these five people could succeed investing in real estate, you can too. All it takes is the conscious decision on your part to get started, to keep going, and to remain open to learning along the way. Our first story is about Marcia, an outgoing investor with a heart of gold from the Midwest. Besides being a woman of great integrity, Marcia is the kind of person who you would turn to if you were ever in trouble. At age 30, Marcia set the goal of buying real estate part time around her hairdressing...

Mary Mcdonald Millionaire Real Estate Investor

Mary McDonald Millionaire Real Estate Investor Coopersburg, PA In the end the primary purpose of the four cash-building strategies is to generate immediate cash, income which can be used as earned income or put back into play along the Path of Money. Many of the investors we talked with at one time or another used all these methods to launch their real estate investing careers. When they did them right, which they will warn you is not as easy as it often is made out to be, they were able to build up some cash savings, which they could use as down payments on income properties. They were taking cash and reinvesting it for cash flow and equity long-term financial wealth building.

Timing the Commercial Real Estate Market

Wouldn't it be great if you could time the commercial real estate market precisely For instance, what if you could predict what the office building market would do five years from now in your town Imagine if you had a process and procedure for knowing the perfect time to buy in a certain market. Well, here's a secret None of this exists. Sorry for bursting your bubble But if we could predict such things, we'd be living on our own islands off of Tahiti.

Qualitative Factors for Real Estate Investment

As is the case with other types of alternative investments, there are a series of qualitative factors that determine success in real estate investment. Real estate, more so than many other types of alternative investments, can be very dependent on local market considerations. For instance, the characteristics that are required to be successful in an urban area in Europe are very different from those that are required in a suburban Washington, D.C., market. Qualitative considerations include access to significant buyers and sellers of properties, experience in local zoning regulations, and knowledge of how to position properties to appeal to local market needs. Often, these issues are so important in determining the success in local real estate markets that national or international real estate investors seek exclusive local market partners in order to facilitate their market penetration. Adept local market partners can make the difference between success and failure in executing an...

Real Estate Options What They Are How They Work and Why You Should Use Them

I first want to thank you for investing your money in a copy of How to Make Money with Real Estate Options. This one-of-a-kind book was written for serious, rational, reasonable, intelligent, reality-based, goal-driven, and action-oriented adults who are willing to take calculated risks in order to profit from the many money-making opportunities that real estate options provide today. I am a firm believer that a real how-to book should tell its readers precisely what to do while providing detailed instructions on exactly how to do it. I also believe that a how-to book should live up to its title. And I am very confident that this unique book will exceed your expectations on both counts As you will soon find out, it is packed with step-by-step instructions, ready-to-use worksheets, checklists, letters and agreements, and practical, no-nonsense advice on how to use real estate options to control undervalued properties with immediate resale profit potential.

How Income from the Sale of Real Estate Options is Treated for Tax Purposes

Income earned from the sale of real estate options is taxed at the same rate as ordinary earned income. And for tax purposes, the IRS will consider you to be a real estate dealer versus an investor because you are buying options with the intent to resell and not as an investment. Real estate options are covered in Section 1234 of the Internal Revenue Code, which is provided for your convenience

Advanced Real Estate Investment Analysis

In the previous chapter, we examined 10 different real estate investment performance measurements, which enabled us to better understand how an income-producing property was performing at a given point in time. These measurements are considered to be static measurements, meaning that they do not take into account a property's performance over more than one time period. Instead, performance is measured at either a specific point in time or over one period of time, for example, one month or one year. This chapter focuses on advanced methods of real estate investment analysis by measuring performance over multiple periods of time. These financial concepts deal with the time value of money and are especially helpful to individuals investing in real estate over a prolonged period of time.

Millionaire Real Estate Investors

Because each person's story of how he or she became a Millionaire Real Estate Investor was compelling and inspirational and because we had a limited amount of space, it was extremely difficult to select only 21 stories to share. We fretted, we scratched our heads, and we wrangled over who to choose before finally deciding. The amazing individuals featured in the pages that follow were chosen because of the breadth, depth, and diversity of their investment journeys. Separately, the thread of their individual stories may not have been the most colorful or the most fantastic, but as a whole their successes weave a rich tapestry that fully illustrates what it takes to become a Millionaire Real Estate Investor. These people see the endless possibilities of wealth building through real estate. They were our inspiration, and we hope they will inspire you. Do you hate infomercials Think people never buy that stuff Or if they do, never do anything with it Joe Arlt will tell you different. The...

Learning about Real Estate Options

When I first got interested in using real estate options in 1985, there were no publications available like this book. The scant amount of information that I was about to scrounge up about real estate options told me just enough to be dangerous, but not enough so that I really knew what I was doing. This lack of solid information meant that I did not have the luxury of learning from someone else's mistakes. I had no choice but to go it alone. So, how did I become my own real estate option expert I did it the old-fashioned way. I went out on my own and learned the hard way how real estate options really work. I did a lot of research, talked to a lot of knowledgeable people, and asked a lot of questions. Then, I went out and bought some real estate options and made the inevitable mistakes, which I learned from. And while all of this was going on, I took copious notes to keep track of my trials, tribulations, numerous mistakes, and firsthand experiences as a real estate option investor....

What You Need to Know about Real Estate Options

Real estate options are a little known and seldom used investment strategy probably because the only time that most people ever read or hear anything about real estate options is when they are bandied about, willy-nilly, on real estate web site message boards or discussed at real estate investment club meetings by people whose collective knowledge of the subject would not fill a thimble. However, when fully understood, properly prepared, and used correctly, real estate options are an excellent way to conserve capital, create leverage, reduce risks, and gain control of properties with immediate resale profit potential. But, to avoid the potential problems and pitfalls that plague most uninformed and unsuspecting real estate option investors, you first need to know 5. The legal status of real estate options in your state.

Real Estate Investors

No matter how much experience you have, this book offers you a keen insight on how to increase your productivity, reduce your risk, and maintain your edge even when you sell in a buyer's market or buy in a seller's market. Dozens of checklists help you quickly and simply calculate data that you might have been missing before, or which came in too late to be of any real use to you. This book shows you how you can anticipate which property is going to go up in value, and even better, which properties are going to go down in value, then turn up again. If you already consider yourself a successful real estate investor, then get ready to get some insight into your system that will take you to higher plateaus.

Getting to Know Commercial Real Estate Investing

This part is where you might just fall in love with commercial real estate investing. Understanding what types of property make up commercial real estate and getting past some of the biggest myths about it will provide a strong foundation that you can use to support all the other in-depth information you get in this book. In this part, you also discover just how simple it is to quickly determine the value of any commercial property. After you understand this formula, you'll be able to confidently hold your own while negotiating your way to your newfound fortune.

Myth 1 You Have to Already Be Wealthy to Invest in Real Estate

People think they need to have a large lump sum of money to invest in real estate. They think it is like saving for their first home or that it's something they can only do once they have made their fortune elsewhere. Both of these thoughts couldn't be further from the truth. You don't need hundreds of thousands of dollars in the bank to invest in real estate and you certainly don't need millions. All you need is a good real estate deal that makes sense one that has profit potential and is based on solid financials. You may be surprised to learn that there are plenty of people interested in investing in real estate, particularly when other investment vehicles like the stock market and bonds are flat or declining. Just look around at a Rich Dad Seminar. There are thousands of people in every city in which we speak who are looking for real estate investment deals that make sense. One of the people in a Rich Dad Seminar could be your first investment partner.

The Legal Status of Real Estate Options Varies from State to State

Unfortunately, there's no Uniform Commercial Code equivalent for real estate options. The legal status of real estate options varies from state to state. In most states, the legal status of real estate options has evolved over the years from a combination of common and case law. The case law that regulates estate options in most states is the result of various lawsuits involving legal disputes between optionees and optionors over the use of real estate options. To know the legal status of real estate options in your state, you should consult with a board-certified real estate attorney who is familiar with how real estate options work in your state. I suggest that you ask your real estate attorney the following four questions In some states, most notably California, courts have ruled that real estate options are personal property rather than real property. For example, in a federal bankruptcy case, In re Merten, 164 B.R. 641 (Bankr. S.D. Cal. 1994), the court ruled that under...

Why You Should Add Real Estate Options to Your Repertoire of Strategies

Typically, many real estate options are bought more on speculation than on anything else. However, buying real estate options on speculation is not what this book is about. If you follow the advice contained in this book, all you should be doing is changing your name from buyer to real estate optionee. When used properly on the right types of undervalued properties, real estate options provide an excellent low-cost, low-risk, high-profit potential property control technique, which knowledgeable, savvy investors should add to their repertoire of real estate investment strategies. The real estate option strategies outlined in this book are based on a very simple concept

Being a Real Estate Agent

What source of income first comes to mind when real estate is mentioned Making money as a real estate agent or broker, the people who put buyers and sellers together and carry offers between them. The average real estate commission in the United States is generally between 5 and 8 percent of the sale. For example, if a sales price is 100,000 with a 6 percent commission, the agent or broker earns 6,000. Often, however, there are two agent brokers, one representing the buyer and the other representing the seller, so the commission gets split, dispersing 3,000 to each. The disadvantages of being a real estate agent broker include a requirement to be licensed, meet educational standards, pay fees, and carry liability insurance coverage. for sale in the retail real estate market. You might have access to a real estate office and its up-to-date technology, and also have contact with other agents and resources who can lead you to sales.

Can I make money at commercial real estate investing

Coauthor Peter Harris started out investing in real estate by purchasing single-family homes. He did quite well in it, but one day he was daydreaming and said to himself, What if I could combine all my rental homes under one roof He felt that would make managing the properties a lot easier because he wouldn't have to drive around the city chasing rents. In fact, he realized that he could make better use of the time that he saved by investing even more When he woke up from his daydream, he realized that he had just described If he can make it starting out where he did as an introverted engineer, and now he's buying commercial properties worth millions, you certainly can too. You see, Peter is simply an average person who applied the ideas in this book to change his life. If he can do it, anyone can use commercial real estate investing to transform his or her life. Throughout this book, we show you what good real estate looks like, and we tell you how to time the real estate market,...

Anyone Can Make Big Money Investing in Real Estate

What would it mean for you and your family if you were able to earn an extra 25,000 this year by investing in real estate How about an extra 50,000 or even 100,000 Wouldn't it take much of the stress and worry out of your life Would it improve your sense of freedom and security But what if you don't make a million dollars during your first year of real estate investing So many beginning investors want it all overnight. Like any other skill, investing takes time and practice to learn. So when you are setting out your investing goals, make sure you think in the long term too. One of our students, Will, set a goal to make 100,000 in cash profits from his real estate investing. It took Will over two-and-one-half years of investing on a part-time basis before he reached that goal. He found his first deal while he was at our three-day real estate training. He found an owner of a rental property who sounded motivated. Will and another student at the training arranged to meet him. They ended...

Use a Real Estate Agent

This method for finding properties and making deals has been, by far, the most productive for me. I acquired at least 60 of my properties with the help of a real estate agent. However, not just any agent will do. I've had You must work hard to find the right real estate agent. Agents won't hang around for long if you're just a looky-loo a person who wants to see everything, but never seems to find anything that meets his or her approval. No agent can afford that nonsense. Fred works for me for one simple reason it's profitable for him. He knows I can close deals fast if he does his job. Fred's job is to know exactly what I will buy. He doesn't call me about every property for sale in Redding. A good agent will immediately qualify the property to determine if it has potential. Fred knows I don't normally want deals that require new bank financing. He also knows I want sellers who will carry paper and that I rate small, multiple-unit properties like four to six houses on a single lot or...

Crash Course in Commercial Real Estate Investing

Hat comes to mind when you think of commercial real estate Downtown skyscrapers Corner strip malls Apartment complexes Okay, that's a good start. But have you thought about being the owner of one Too complex you say Too expensive you think Jumping into commercial real estate investing could be the wisest and most lucrative investment you ever make. To us, the benefits outweigh the risks. But find out for yourself.

The Most Profitable Types of Properties to Buy Real Estate Options On

I ou need to know right from the get-go that, as a real estate option investor, you are not going to have option property deals served up to you on a silver platter by eager sellers and real estate brokers. In this business, the most profitable option deals are usually the ones that investors create from scratch by identifying an unfulfilled need in their local real estate market and putting a property under option, which best fills the need, and then reselling the option to a buyer, who has a use for the property. And unlike conventional real estate transactions, which usually involve properties that have been heavily advertised over a period of time, the most profitable types of properties to buy options on are not generally advertised as being for sale. Instead, they are bought through what is known in the real estate trade as an unsolicited offer to purchase. The best types of option properties are not for sale or listed with real estate brokers because they are vacant and in a...

Savvy Investors Can Use Real Estate Options to Provide Justin Time Property

Last, one of the things that I like most about real estate options is that I can use them to provide just-in-time (JIT) property. Just-in-time inventory management refers to the practice of ordering an inventory of parts or raw materials on an as-needed basis, versus maintaining a large on-hand inventory. The automotive industry in the United States has used JIT inventory management for over a decade. Today, savvy real estate investors can apply the same JIT inventory management principles when using real estate options. All they need to do is to find a particular type of property that is in demand in their local real estate market and then use a real estate option to gain control of a piece of property that fits the bill. Then they flip the option to an end user or buyer who has a need for the property.

Covering Common Real Estate Investments

M f you lack substantial experience investing in real estate, you should avoid more esoteric and complicated properties and strategies. In this chapter, we discuss the more accessible and easy-to-master income-producing property options. In particular, residential income property, which we discuss in the next section, can be an attractive real estate investment for many people. Residential housing is easier to understand, purchase, and manage than most other types of property, such as office, industrial, and retail property. If you're a homeowner, you already have experience locating, purchasing, and maintaining residential property.

Threshold Performance Measures for Real Estate Investment

This chapter deals with the initial measures used in the field to decide if one wants to collect more information and perform further analysis on a real estate investment opportunity. Even at this threshold stage, the analysis of data can enhance decision making. The availability of plentiful data for privately owned real estate investments is relatively new. As with any new tool, using it to full advantage depends on using it correctly. Rules of thumb, having their place in the acquisition of individual properties, can also play a role in data analysis. In that role one can reach preliminary conclusions about the market in which the target acquisition competes.

Real Estate Options Are Not for Dummies

As I alluded to in the introduction to this chapter, real estate options are definitely not for dummies. To make it as a profitable option investor, you need to possess an imaginative, analytical, and creative mind. First, you must have the imagination to be able to visualize various types of properties being put to a myriad of different uses. And then you must be able to put an option deal together from scratch that makes financial sense to all of the parties involved in the transaction. Finally, you must be creative enough to package the property for maximum resale value and market it to a targeted group of prospective buyers who are willing to pay your asking price. Granted, this is not rocket science, but you will not get very far as an option investor if you have no imagination, cannot solve problems, and have zero creativity. Nowadays, too many people fall into the trap of mistaking education for brains. I know of a certain Harvard Business School graduate who flaunts his MBA...

Maintain a Separate Checking Account for Your Real Estate Investment Business

For record keeping and tax purposes, you must maintain a separate checking account for your real estate investment business that you can deposit checks into and pay expenses out of. One of the criteria that the IRS uses to determine whether a business is legitimate and not a sham is bank accounts. A business that claims expenses, losses, and depreciation on federal tax returns but does not maintain a bank checking account is going to be suspect and have a very hard time trying to document expenses if ever questioned or audited by the swell folks at the IRS. And the best method for documenting and recording expenses is to pay them with checks written on your real estate investment business checking account or with a credit card issued in the name of your real estate business. This way, you will not have to worry about confusing personal expenses with business expenses. Plus, working out of one checking account will allow you to easily track expenses on a daily basis. The same holds...

Our Bias in Real Estate Investing

There are many ways to make money by investing in real estate. We want you to understand our bias so that you can take the best ideas in this book and leave behind any you do not like. We've seen many other investors get caught in what we call the Landlord Trap. The Landlord Trap is where a person is so busy managing the properties they have that they don't have the time and energy to go out and acquire more properties. The danger of the Landlord Trap is that even if you are earning a lot of money, you don't have the freedom to enjoy the lifestyle you want. After all, did you get started investing in real estate merely to make money Or did you start investing in real estate so that you could earn enough money to achieve a certain lifestyle of ease and freedom We have spent the last several years perfecting the Purchase Option System so that you don't have to get mired down in the day-to-day oversight of rental properties. Instead, you can sidestep the Landlord Trap and create the...

Using Real Estate Investment Trusts

Real estate investment trusts (REITs) are for-profit companies that own and generally operate different types of property, such as shopping centers, apartments, offices, warehouses, hotels, and other rental buildings (see Figure 4-1). These property-holding REITs are known as equity REITs. Some REITs, known as mortgage REITs, focus on the financing end of the business they lend to real estate property owners and operators or provide credit indirectly through buying loans (mortgage backed securities). Source National Association of Real Estate Investment Trusts. Source National Association of Real Estate Investment Trusts. Equity REIT managers typically identify and negotiate the purchase of properties that they believe are good investments and manage these properties directly or through an affiliated advisory and management company, including all tenant relations. Thus, REITs can be a good way to invest in real estate for people who don't want the hassles and headaches that come with...

Real estate investment clubs

Most of the bigger cities in the United States have a number of local real estate investment clubs. These groups provide great opportunities to network and meet with other investors who have a similar interest in commercial property. The members typically include just about everyone beginning investors, those interested in investing in homes, commercial investors, real estate brokers, real estate attorneys, title company officers, appraisers, and others who make their living from the various real estate investing professions. Most of these associations meet once a month to discuss current events, share information, and have an expert speak to the group. The meetings are actually very educational to attend. We first heard of these clubs years ago through word of mouth. After we started to attend their meetings regularly, we heard of other existing clubs as well as new clubs that we just starting. These days, to find clubs in your city, enter real estate investment club into your...

Why You Must Be Able to Think Outside Your Local Real Estate Market

The key to consistently making money with this strategy and every other option strategy that I have outlined in this book is to be able to think outside your own local real estate market. I say this because in my professional opinion, the number one reason that most vacant commercial and industrial properties usually remain vacant for long periods of time is simply that no one in that particular real estate market has been able to come up with a profitable use for the property. And I attribute this to a general lack of vision, creativity, and foresight on the part of most so-called real estate professionals. The fact of the matter is that many of the people involved in real estate today are afflicted with a bad case of tunnel vision, which prevents them from seeing beyond the borders of their own local real estate market. And for whatever reason, they have not been able to apply the marketing concept of buy locally but sell nationally and globally to their real estate investment...

For Sale and For Sale by Owner Signs

As you drive for dollars, look for For Sale and For Sale by Owner signs. Some of these signs might say, Make Offer, so pay close attention. Because you are still driving neighborhoods, learning about the neighborhoods, and getting suspects, make a point of meeting the Realtors and brokers who are active in that area. You will learn a tremendous amount from talking with them and from carefully reading the signs.

The Bias Of Traditional Real Estate Investors

Traditionally, most real estate investors have chosen to put their money directly into property apartment complexes, shopping centers, malls, office buildings, or industrial properties and not in real estate securities like REITs. In other words, bricks and mortar, not stock certificates. Direct ownership historically has provided the opportunity to use substantial leverage, since lenders have traditionally been willing to lend 60-80 percent of the purchase price of a building. Leverage is a wonderful thing when prices and rents are going up. Since the Great Depression, real estate values pursued a profitable upward bias, notwithstanding a few potholes along the way. Appreciation of 10 percent on a building bought with 25 percent cash down would generate 40 percent in capital gains. In addition, owning a building directly provided the investor with a tax shelter, via depreciation expenses, for other operating income. As a result, real estate continued to appreciate and provide easy...

For Sale through Real Estate Agents

Usually, if a house is listed by a real estate agent, the sellers are not highly motivated. The real estate agent has done an appraisal and run comparable sales, advising the seller to list the property for what it's worth or even more. However, these agents might know of some motivated sellers. And remember, you're always building your team of experts.

Difficult Real Estate Markets Mean Bad News For Reit Investors

A favorite observation among stock traders, after a long bear market that has finally turned around and moved up strongly, is The easy money has already been made. Despite weak real estate markets from 2001 through 2004, property values held up well due to real estate's popularity as an asset class. And now, although a recovery is under way, it is unlikely that in most sectors of the real estate industry, property owners will be able to generate growth in rental rates and operating income much in excess of the rate of inflation, which is 2-3 percent annually. Some pockets of opportunity will always surface from time to time, but today most real estate The rapid industrialization and intense competition occurring today in North America, Europe, Asia, and Latin America seem to be major and perhaps long-lasting phenomena. U.S. companies must now go toe-to-toe with foreign competitors virtually everywhere in the world. This, in turn, requires U.S. businesses to be very cost-efficient....

The Financial Model of the Millionaire Real Estate Investor

There are two ways to build financial wealth by investing in real estate. I know that sounds way too simple, but it's true There are just two. Within those two are a vast array of variations that can give the appearance of massive complexity, and by using those various options you can make real estate investing as complex as you want. Eventually most millionaires do, but not in the beginning. They always start with the basics and build from there. When you truly understand the two basic drivers of financial wealth, you begin to see the fundamental opportunities they present and know how to take advantage of them. If you are like me or any of our Millionaire Real Estate Investors, this is when you really get excited. That's the power of this financial model it both guides you and motivates you.

Learning the Real Estate Market

If you're serious about real estate investing, make a habit of looking through the newspaper. Spend an hour, or more, looking through the Sunday real estate sec Besides having great information about the market (interest rates, players, sellers, and buyers), the newspaper has helpful articles about mortgages, mortgage rates, trends in real estate, and new developments. If you read the newspaper regularly, you'll become an expert on your local real estate market. Many newspapers are also available on the Internet, so if you're interested in another city or area, get online and start reading its real estate section. Commit to educating yourself about your real estate market the different areas and prices so you'll recognize the deals.

Searching for FSBO Properties

The FSBO (for sale by owner) route, so they don't have to pay the standard 6-8 percent real estate commission. This approach, however, often backfires, because selling a home without the assistance of a real estate agent isn't all that easy. The homeowners may find that they have few interested house hunters or they don't have the money to fix the house up to make it marketable, and the house lingers on the market while their financial hole deepens. Of course, FSBO sellers aren't always experiencing financial hardship, but you never know until you knock on the door, take a look around, and talk with the homeowners. You can locate FSBOs by driving around the neighborhood and looking for For Sale or For Sale By Owner signs. These are usually the cheaper looking For Sale signs that you can pick up at your local hardware store, pen in your phone number with a permanent market, and poke into your front lawn. Another way to locate FSBOs is to check any of the many for-sale-by-owner sites on...

Investigating Your Local Real Estate Market

Although everything starts at the regional level, you need to fine-tune your perspective and look at your local real estate market, too. All of the same types of economic data that you collect on a regional basis are important in evaluating your local real estate market. MJOi With real estate investing, deciding where to invest is frequently more important than choosing the specific rental property. You can have a rental property that meets the needs of the market, but if it's located in a declining area where the demand is weak or an area with overbuilding and an excess of available properties, your investment won't perform financially. (These are the properties that perform the worst over time but are typically the types of properties highly touted by the infomercial gurus who love to brag about how much real estate they control but rarely tell you about their long-term investment returns.) In many local real estate markets, the demand for real estate is impacted more by the...

Always Be on the Lookout for Vacant Properties

Finally, in addition to using all five of the property search methods that I have outlined in this chapter, always be on the lookout for vacant properties while driving around town. How do you go about spotting vacant properties with profit potential It is really not that hard to do once you know exactly what to look for. Probably the easiest and quickest way is to simply look for properties exhibiting any of the following telltale signs of blatant neglect. Look for properties that have A sample letter to vacant property owners is shown on page 94. FORM 9.2 Sample Letter to Vacant Property Owners

Real Estate Agent

Real estate agents earn commissions from helping people buy and sell real estate, although it's not the same as being a real estate investor. There are advantages to being an agent (earning commissions, access to a real estate office and listing services, and ability to run comparable sales analyses), but I decided they were greatly outweighed by these disadvantages licensing requirements, fees, long contracts, and lots of regulation. In addition, agents can't pay finder's fees to people who are not real estate agents, while investors can.

You Must Believe It to See It

Rewards that most savvy real estate investors have years, I've often wondered why most people fail to invest in real estate. After much thought and talks with hundreds of would-be investors, I've come to this conclusion Most people simply don't believe in the future and they don't believe in themselves.

The Global Powerhouse

The 1.3 billion Chinese customers present tremendous market opportunities for all kinds of products and services. Multinationals use China not only as a manufacturing base to compete regionally or globally but also to compete in its burgeoning domestic market. The enormous workforce and the low wages give China huge cost advantages. Thus, China has been able to import materials and export products at very competitive terms. This results in trade surpluses year after year. The investment power of the foreign exchange reserves has significant impact on global interest rates. For example, the Chicago Tribune reported on January 14, 2006, that mortgage industry watchers were concerned about China's recent signal to diversify its foreign investments.2 Market watchers were concerned that if China purchased fewer U.S. Treasury securities or agency securities (such as those issued by Freddie Mac and Fannie Mae), it might drive interest rates higher and substantially cool the real estate...

Instead of the Latest Secret Formula Learn Proven Steps to Success

The recent real estate boom has led to an equally great boom in the number of books published on the subject of how to make money in the real estate market. Everywhere you turn whether it's print, television, or the Internet people are talking about real estate. Is it going up or down Do you get in now, later, or is it too late There are many resources some good, some bad, some original, and some just a rehash of old ideas. Occasionally, though, an author writes a special book that really sets him or her apart from the pack. That such writer is William Bill Bronchick. Bill Bronchick is an accomplished author, speaker, commentator, and real estate investor. This book, Defensive Real Estate Investing, is a culmination of his years of practical experience and the experiences of other investors we know. For those of us who view real estate investing as a profession, Bill has produced a book that anyone can use, whether you're a novice or seasoned professional. Defensive Real Estate...

Running your business like a business

Setting your business up correctly in the beginning means you need to meet with several professional people to gain practical knowledge. Consider meeting with a real estate agent, banker or mortgage broker, accountant, insurance agent, attorney, and (if you want someone to manage your property for you) property manager. See the following section for details.

How This Book Is Different

Real Estate Investing For Dummies, 2nd Edition, covers tried and proven real estate investing strategies that real people, just like you, use to build wealth. Specifically, this book explains how to invest in single-family homes detached and attached condominiums small apartments including duplexes, triplexes, and multiple-family residential properties up to 20 to 30 units commercial properties, including office, industrial, and retail and raw (undeveloped) land. We also cover indirect real estate investments such as real estate investment trusts (REITs) that you can purchase through the major stock exchanges or a real estate mutual fund. We've always relied on tried-and-true methods of real estate investing and our core advice is as true today as it was before the real estate downturn in the late-2000s. Our book is an especially solid reference in a down economy and will help you position yourself for the rebound. Unlike so many real estate book authors, we don't have an alternative...

The Myths and the Magic

In every business and every industry there are people who just seem to drip with success. They seem to know all the right people, make all the right decisions, be in all the right places at exactly the right time. They seem destined for success whether they even try or not. Real estate investing is no different. In every city or town, there seem to be real estate tycoons that struck it rich through real estate. Unfortunately, I also see at the seminars some who lack what it takes. They are the ones looking to get rich quick and have little or no idea of the commitment required to achieve business success. Others have a lot of desire, but lack the technical skill and the knowledge that can only come from experience. I wrote this book for them. This is not a get-rich-quick book. It is not a book written to motivate, although I hope you'll be inspired to follow your real estate investment dreams. Instead, it is a book that will disclose proven methods, remove the unknowns, and shorten...

Your Advisorgood Or

I have a client who invested 20,000 in a real estate investment trust. At the time he purchased it, I explained how they work and the pros and cons of investing in one. I made sure he understood the product. Since then, he has asked me a number of times to reexplain the REIT. While other advisors may become irritated at having to explain the same things time and again, I don't. I'm glad my client wants to understand his investments.

To Be Effective Focus On Results

To be effective, you must know what the results should be in very specific ways so that you can remain focused on those desired results. Effective strategies are not fixed, however, and it is essential that, in real estate investing, likely mistakes are acknowledged, and that corrections in the investment plan be implemented.

Why a Straight Real Estate Option Agreement Is Not an Executory Contract

An executory contract is generally defined as a contract where both parties have an obligation to perform in the future. And state and federal courts nationwide have traditionally held the view that straight or naked real estate options are unilateral contracts, under which the obligation to perform rests solely on the op-tionor, while the optionee is under no obligation to do anything whatsoever. The only notable exception to this is when an option agreement is included in a federal bankruptcy petition and the optionee has notified the optionor of his or her intention to exercise the option prior to the bankruptcy petition being filed.

How a Stay at Home Mom Bought 14 Properties and How You Can

My name is Cheryl, and I am just an ordinary mom. My husband works at our church a few blocks from our home, and I home school my three teenage kids. If you were to tell me three years ago that I'd also be a successful real estate investor who had already bought 14 properties, I would have told you that you were crazy My very first experiences in buying real estate were the homes my husband and I bought over the years to live in. I always played the role of his right-hand helper. At the closing he would point to the line and say, Sign here, and I would. I didn't understand any of the details of what was going on. Banks and loans and escrow and title companies were like Greek to me. Then about two-and-one-half years ago things changed for me. My husband had resigned from his job, and we were getting ready to move. I had always had a fascination with real estate. Maybe it was because of all the friends I had had over the years who had made money investing in real estate that I decided...

No Money Down Is Not the Goal

Now let me also explain why it's not always best to buy for no money down. Years ago, a highly popular book directed novice investors to buy real estate for little or no money down. This strategy will often work when employed by savvier, more sophisticated investors however, in the hands of the uneducated, it's almost a sure path to disaster. The inherent problem is that financing 100 of anything will most likely cause the monthly mortgage payment to eat up all the income generated, sometimes even more. Investing is not much fun when you have to pay additional out-of-pocket money each month, just to keep the property operating.

Essence Of Accomplishment

Ultimate success in real estate investing depends on a clear focus of the desired result. As an example, a hotel developer who wishes to own a chain of hotels must first understand what it takes to own and operate such properties. This requires a total commitment to every aspect of hotel operation, starting with what kind of location will best fit the specific type of hotel to be developed. A great location for a convention hotel may not be good at all for a budget stop-for-the-night kind of hotel motel property. However, operational aspects are just a part of the overall picture, and the hotel developer must continually be cautioned to avoid being sidetracked to the green pastures of another category of real estate development. Hotel development requires a very specific and dedicated approach to the economics that make that type of real estate venture work. The same specific knowledge will apply to every category of real estate from rental apartments, shopping centers, mobile home...

Stacking Real Estate Up Against Other Investments

In this part, we explain how real estate compares with other common investments, how to determine whether you've got what it takes to succeed as a real estate investor, how much money you need to invest in various types of real estate, and the tax advantages of real estate. We also cover how to fit real estate investments into your overall financial and personal plans. We discuss the range of real estate investments available to you not only common ones (such as single-family homes and small apartments) but also the more unusual (such as foreclosures and probate sales). An entire chapter is devoted to passive real estate investments, including real estate investment trusts, tenants in common, triple net properties, notes and trust deeds, limited partnerships, and tax lien certificate sales. We also cover the allure of property flipping and buying with no or little money down. Finally, you want to work with the best professionals that you can, so we also detail how to interview and...

Real Estate The Best Wealth Builder in the Universe

Y y hy is real estate investing the best wealth builder in the universe The answer is simple Everyone needs a place to live, and real estate values usually go up over time. I can assure you that, in the next 20 years, your real estate property will probably double, triple, perhaps even quadruple in value. If you are in a hot market, it might even go up 10 to 20 times. When is the time to get into real estate investing Yesterday. Real estate increases its value to build wealth, but there are other reasons why real estate investing, compared with any other investing, is the best.

Location Location Location Is Not The Answer

This introduces the critical factor of location. By location, I mean the specific and well-defined area chosen. The less than perceptive investor will quickly discover that to accept the Wall Street definition of real estate as being a universal commodity is a mistake. Wall Street likes to compare every investment to stocks, which can be treated as universal in nature. However, real estate cannot be so easily defined, so what happens in San Francisco will not equally happen in Miami, or New York, or anywhere else. To forget this is a tragic mistake. Although there will be some events that will be similar in the diverse real estate market, real estate is essentially a local commodity that will rise and fall in long-term value based on what

Beijing 2008 Olympics

In its initial plan, the Beijing Olympics committee proposed 37 facility sites for the 2008 games. Among those sites, 15 are existing facilities with five requiring refurbishment and 22 new facilities. To improve infrastructure, Beijing has budgeted 11 billion for transportation addressing road systems, bus systems, urban rail, and airport. Along with an improved transportation system, China is also working on enhancing infrastructure for utilities and telecommunications, with an additional 5.4 billion budget. The Olympics has been an important stimulus to Beijing's actions to improve the environment in the city. Beijing has budgeted 8.6 billion to bring blue skies back to the city by 2008, promising cleaner air than Paris. Measures target reducing pollution, a new waste treatment system, water and sewage plants, and the 125-kilometer tree belt (the forested area surrounding the city). The tree belt is one component of the larger Green Great Wall to forestall desertification...

The Key to Success is Using Ten Principles of Defensive Investing

Countless people are attempting to become real estate moguls in today's market. All of them, in one way or another, strive to be successful. Gary Licata and I know from our past 40 years of combined experience that, unfortunately, the vast majority of these people will fail. Despite their best efforts, many of them won't be able quit their day job or, if they do, they may not be able to sustain a steady income stream by being a real estate investor. Many of them will go to from one seminar to another, read book after book, and eventually quit the business altogether out of frustration, failure, or impatience. You may know someone like this or you may be that someone. Is there an answer to this dilemma Yes, and you'll find the answer in this book, Defensive Real Estate Investing. Real estate markets go up and down, and every investor, whether novice or experienced, must learn the principles of successful investing to survive. While the title Defensive Real Estate Investing suggests...

Flow Through Tax Treatment

Hedge funds are not taxed like corporations. Instead, all the income, expenses, gains, and losses are passed through to investors. This feature does not define hedge funds because many other investment types are flow-through tax entities. Real estate investment trusts (REITs), mutual funds,

Performance And Returns

During the twenty-year period ending December 2004, equity REITs have delivered an average annual total return to their investors of 12.7 percent. Compared to the performance of the stock market during that period, those returns aren't bad, are they Look at the chart shown below. According to the REIT trade association, the National Association of Real Estate Investment Trusts, or NAREIT, equity REITs have, over long time periods, provided their investors with compounded annual total returns very close to that of the S&P 500 index.

Welcome to Purchase Option Investing

We're not sure if you bought it after attending one of our workshops, or after hearing us interviewed on television or radio, or if a close friend of yours gave the book to you as a gift. Maybe you were just browsing in a bookstore and picked this book off the shelf. However you found this book, it was no accident. Something drew you to learn more about making money investing in real estate. Perhaps you are already investing in real estate and want to pick up a few more ideas to help you fine tune your skills, or maybe you are beginner and want to learn exactly how to get started investing. Whether you are a seasoned investor or a fresh beginner, this book will help you make more money investing in real estate without the hassles associated with traditional real estate investing, such as tenants, banks, or rehab projects. without involved rehab projects. In this book, you'll learn how you can put all that we have learned into action to make money...

Diversification Later Is the Best Strategy

Once you've become established financially and, even more importantly, become more knowledgeable about real estate investing, you may then enjoy the luxury of diversification. You might even venture out and buy several pride of ownership properties. After all, money's not everything. Besides, you might want to own a good-looking property to drive by with friends or your mother-in-law so you can show off a bit. It's important to remember that most of the world judges by looks. Most of my advice is about making money. Once you have all the money you need, who cares what you do You might even consider buying property that just breaks even.

Commit to Invest within Three Months

How many times have you heard people lament You know, we've been thinking about getting started in real estate investing for years. But I don't know. We just never seemed to get around to it. Gosh, would we be set now if we had only done what we were thinking. Action cures regret. Action prevents future regret. Action creates the wealth you want. Regret mires you in a past that cannot change. Set your most important goals now. Commit to making your first real estate investment within the next 90 days. Mark it on your calendar. You will find that once you get started, your progress will accelerate. Not only will experience teach you better than books, but experience will help make your reading pay much larger dividends.

An Overview of the Road to Unlimited Riches in Real Estate

During my first several years of real estate investing, I knew of only one way to make money in real estate buying and holding that is, buying and renting property, and collecting rents. Then I learned about flipping, lease optioning, referring contractors and legal services, and so on. I started getting little checks, then medium-sized checks, and finally big checks. I know a full-time student who makes between 80,000 and 120,000 a year as a part-time real estate investor. He digs up a good deal, puts a property under contract, finds investors, buys the property with their money, fixes it up, then sells it for a profit anywhere in the range of 5,000 to 12,000.

Know What Is Important

Will allow you, or force you, to stay on the right road as you head toward the goal. Not all investors have the same result in mind, and your own goals are likely to vary over a period of time. Therefore, it is important to recognize that ownership and debt structure may also vary. These changes may allow goal adjustments without having to deviate from the actual type of property chosen in the first instance. Any specific property can help its owner attain different goals, depending on the structure and the terms of that debt. This chapter is designed to help you develop a clear understanding of the relationship between financing and the attainment of your financial goals, as they relate to real estate. The financing tools and techniques described in this book will help you enhance your success in real estate investing.

Twenty Four Good Reasons to Buy Options Instead of Properties

I am willing to bet anyone an ice cold case of Beck's Beer that the numerous commercial real estate market meltdowns that have occurred during the past 30 years would not have been so severe if the high rollers had bought more real estate options instead of properties. In this way, if they did not want to exercise their real estate options, they could have simply let them expire, and that would have been the end of it. And they would not have incurred any of the transaction, maintenance, management, holding, and debt service costs that eventually forced them to go belly-up. In other words, they would not have been saddled with the financial responsibility and personal liability that go along with outright property ownership, and they automatically would have avoided having to

The Barter Process and the Evolution of Money

We see an economic system emerging from barter. All the while, however, transactions and relative values must be negotiated. Eventually, the hut builder's tradesmen may decide to go off on their own. Suddenly, there is competition in the real-estate market. With equal certainty, the tribe will have many fisher

Evaluating Real Estate as an Investment

The challenge involved with real estate is that it takes some real planning to get started. Contacting an investment company and purchasing some shares of your favorite mutual fund or stock is a lot easier than acquiring your first rental property. Buying property isn't that difficult, though. You just need a financial and real estate investment plan, a lot of patience, and the willingness to do some hard work, and you're on your way to building your own real estate empire In this chapter, we give you some information that can help you decide whether you have what it takes to make money and be comfortable with investing in real estate. We compare real estate investments to other investments. We provide some questions you need to ask yourself before making any decisions. And finally, we offer guidance on how real estate investments can fit into your overall personal financial plans. Along the way, we share

The Ten Principles Proven and Reliable

These ten principles are not magic bullets they're tried and tested concepts that are proven and reliable. We use these methods in our own real estate investing careers. In addition, we've met thousands of investors who have succeeded and failed. We've elicited a common thread from their successes and failures for this book. Sharon enrolled in one of our coaching programs. She learned the successful principles of the real estate investing business, and in less than three years, has purchased 17 properties with a net worth of over one million dollars Her success was typical of someone who has a sound investing strategy, not just because she had a few hundred thousand dollars to invest. Many people start out with a decent nest egg and lose it because they don't have a plan or squander it in low-yield investments that take too many years to accumulate the sufficient funds for a healthy retirement. You may be thinking, I don't have several hundred thousand dollars. How can I get started...

Consolidate Existing Debt into More Manageable Debt

Consolidation of debt extends beyond real estate investing and should be an important part of anyone's personal financial planning. We live in an age of high credit charges. It is not very smart to carry high cost credit card or installment loan interest rates. Such rates can cost in excess of 18 percent. This is not a good idea especially when you have the potential of refinancing your real estate through more modest rates. In the early 1990s, there was a rash of refinancing. It was not uncommon for people to have refinanced their homes several times between 1989 and 2006. The key here was to be tuned into what was going on. Even a small gain obtained through a refinanced loan, such as the reduction of a monthly payment, or amortizing the new loan quicker for less than the old loan, can be smart investing. Those investors who kept putting that off waiting for the rates to drop even more than they had suddenly came up against a hard brick wall. It was called 2007. A bubble in the...

Introduction to Real Estate Finance

As investors continue to migrate from the stock market to the real estate market, the need for sound financial analysis of income-producing properties is greater than ever. Just as buying high-flying stocks with no regard to intrinsic values resulted in hundreds of thousands of investors losing their life savings, so will buying real estate with reckless disregard to property values result in a similar outcome. While an abundance of books have been written on how to buy and sell houses, the market is virtually devoid of any works that specifically address the topic of the principles of valuation as they apply to real estate. Notable exceptions include more expensive titles such as Real Estate Finance and Investments by Brueggeman and Fisher, with a list price of 125, and Commercial Real Estate Analysis and Investments by Geltner, boasting a list price of 114. The Complete Guide to Real Estate Finance for Investment Properties, on the other hand, is designed to appeal to those...

Just Imagine Commercial Real Estate and

Can you imagine yourself in the world of commercial real estate investing Imagine yourself walking through the lobby of your 100-unit apartment complex. What would it look like and feel like to be pulling into the parking lot of a neighborhood shopping center that's all yours Maybe you can imagine that you're watching your construction crew break ground on your luxury home land development project. What if this project leads to a life where you can live a life of luxury and balance You'd be able to do things such as drive your kids or grandkids to school every day, maybe even in your pajamas, with a big smile on your face because you've invested wisely. Okay, here's one more scenario that may get you excited Imagine yourself impacting the lives of hundreds or thousands of kids here and around the world who benefit from your charities, all funded by wealth-building skills and invaluable relationships developed from your commercial real estate investing. We have two purposes for writing...

Recognizing the Caveats of Real Estate Investing

Despite all its potential, real-estate investing isn't lucrative at all times and for all people here's a quick outline of the biggest caveats that accompany investing in real estate Relatively high transaction costs If you buy a property and then want out a year or two later, you may find that even though it has appreciated in value, much (if not all) of your profit has been wiped away by the high transaction costs. Typically, the costs of buying and selling which include real estate agent commissions, loan fees, title insurance, and other closing costs amount to about 15 percent of the purchase price of a property. So, although you may be elated if your property appreciates 15 percent in value in short order, you may not be so thrilled to realize that if you sell the property, you may not have any greater return than if you had stashed your money in a lowly bank account. Tax implications Last, but not least, when you make a profit on your real estate investment, the federal and...

What Is Commercial Real Estate

Commercial real estate can afford you a wonderful and fulfilling professional career that's second to none. And besides being enjoyable, commercial real estate investors are among the highest paid professionals in the nation. In fact, it isn't uncommon for a commercial investor's check from just one closing to equal one year's salary of an engineer. We see it all the time. We also get to hang out with and see the changes our Commercial Mentorship students are going through. Many of them have joined The Quitters Club by saying goodbye to their 9 to 5 jobs. These friends of ours absolutely love what they do and can't dream of doing anything else.

Use This Book to Become Your Own Real Estate Option Expert

I want you to use this book to educate yourself so that you become your own real estate option expert. I say this because there are very few sources of reliable information and advice, other than this book, available on straight or naked real estate options. My experiences have shown me that many of the people who claim to know all about real estate options really do not know diddly squat about the subject. Case in point When I first started using options, I had a title agent swear up and down to me that I was required to purchase documentary tax stamps whenever I recorded a memorandum of a real estate option agreement in the public records of my county, Hillsborough County, Florida. This sounded rather farfetched to me because in Florida, documentary tax stamps must be purchased only when there is an actual transfer of a property's title. So, I called the manager at the Hillsborough County Clerk of the Circuit Court Recording Department and asked her about it. Guess what Just as I...

Increase the Return on Cash Invested in Income Properties

Most creative financing tricks learned by real estate investors are designed to soften the overall blow of the property debt. There was a time, not so long ago, when it was deemed that the ideal situation for an investor was when the investor could buy a property without putting up any of his or her own money. This use of other people's money (OPM) would create a deal that was 100 percent financed, or at least 100 percent purchased, without the buyer digging around for cash. Before you jump to conclusions that such a transaction can be counterproductive to your healthy attitude about buying or selling real estate, let me state that buying real estate without putting up any cash is not difficult to do. The hard part is being able to make money doing it. In any city in the world, there are sellers of real estate who would gladly accept a solid promise of payment as a down payment to a property that they could not sell, or that was grossly overpriced. Let this statement be a warning to...

Types Of Investors And Their Approaches To Alternative Investments

Any addition of new alternative investments must be considered within the existing asset framework of a high-net-worth individual or family. A principal consideration for most high-net-worth investors is taxation. Some alternative investments, such as higher-turnover hedge funds or trading strategies, can be tax inefficient for tax-paying investors. These strategies generate the majority of their profits through short-term gains. In contrast, other types of alternative investments can be very tax efficient and pass through tax-deductible operating expenses to the limited unit holders in investment trusts and master limited partnership structures, which is the case for certain oil and gas, timber, and real estate investments. Furthermore, private equity investments in venture capital and leveraged buyouts can have favorable tax treatment through generating the majority of their profits in the form of long-term gains. Wealthy individuals and families may have concentrated positions in...

Generate Immediate Cash That Is Tax Free

When a borrower obtains money through financing, such as getting a loan from the local lender, there may be no income tax liability on that money. In essence, the money was not earned but borrowed. The borrower can in many circumstances renew loans from time to time, increasing amounts borrowed as the values of the real estate go up, pulling out capital that is tax-free, at least for the moment. When the borrower ultimately sells the property, an adjustment would be made to determine what amount of the loan still outstanding exceeded the basis (book value) of the property. This excess would be treated as earned income at that time and taxed accordingly. Under present IRS rules, the real estate investor is able to deduct the interest paid on many real estate loans, which makes this technique a very positive approach to real estate investing. For example, if you refinanced a property you had depreciated down to 100,000 but was actually valued by the lender at 500,000, you might be able...

Before You Invest Do Your Homework Obtain a Property Profile

Before you invest one penny, do your homework and check things out. The first thing I do is visit the title company where I do most of my business. I request a parcel map, the tax bill, and copies of all the deeds or mortgages recorded on the property. Many title companies provide this service free for repeat customers and real estate agents. Some folks refer to this information as a property profile. Obtaining the property profile documents is a good way to start a file on property you are interested in, because they will provide you with the following information

Assembling a Team of Experts and Advisors

Flying solo on foreclosures may seem like a good idea. After all, if you get other people involved, they may become rivals and pick up on your carefully guarded secrets. Flying solo, however, is a good way to go bust or at least limit your potential profit. Developing synergistic relationships with top performing specialists has been a key to my success and the success of almost all of the top real estate investors around the world. Real estate agent Real estate attorney Mortgage broker Accountant Title company Home inspector Contractors

Maximize Equity Build Up of a Long Term Investment

Financing has the ability to maximize equity build up when the investor structures the debt in such a way that there are funds that are continually used to improve and enhance the income of the property. By allowing a steady growth of the NOI of an income property, the long-term value is one of the beneficial results. This usually is done at a sacrifice of the cash flow, so this has to be considered and become a part of the long- term outlook for that investment. I often suggest that investors look to long-term enhancement of value by a well thought out landscape plan for their real estate investments. Twenty years of mature tree growth can turn an apartment complex into an attractive garden that not only provides beauty to the renters who live there, but shade and privacy as well.

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Real Estate Planning And Prosperity

Entrepreneurs go against the flow. You've a business idea. Lots of individuals have business themes. The difference is that you, the entrepreneur, take action. Realty investors are the same.

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