Tips On Buying Investment Properties

Posts Tagged ‘real estate investments’

Real Estate Investing During Poor Economic Times

by Doc Schmyz

First let's establish a few ground rules for this article.

1) The market has had a down turn before and people still made money.

2) Not every deal will fall into a cookie cutter format.

3) Not every tactic or idea works in EVERY state/province. Check local laws pertaining to real estate transactions.

Ok..now that we understand the rules...lets move forward.

So home values have fallen in your market, this doesn't mean that you, as a real estate investor/professional, are out of luck. It only means you need to add new tools to your real estate investing tool box. (Be warned I use "tool box" a lot.)

Finding and Marketing property

Besides the normal channels of RE agents and brokers (still the best way to find good investments in my opinion) you have a huge amount or resources at your fingertip with the Internet.

You can join website communities for investors, follow blogs, get in on group discussion etc. All of these things can lead to new and interesting deals.

Several investments have come to me via the web. I also have gotten many tips from other investors on investments and financing issues. Never over look the value of belonging to an "investor community website."

I truly feel that in the future the majority of investing will shift to being web related. Not just in finding investment projects but in doing the research for them as well as the funding process and the marketing/exit strategy as well.

Finance

Everyday we are hearing about how the current market and credit crunch is making getting loans harder for everyone. This is currently a fact. No way around it. The loan process has changed. So what options are left?? The answer is several.

Lease options. Assumable loans. Seller financing.

The above mentioned will become the big trends in the next couple of years. I am waiting to see the lenders change the loan guidelines in the next few months to "re introduce" the assumable loan. We are already seeing a HUGE trend in short sales. (This was a practice that was used only in limited capacity in the last 10 years by most lenders now it seems like every other distressed listing is a short sale in some cities.)

Please do not let the current market conditions scare you in to sitting this investment period out. On the contrary use it to inspire you. Take the time to do the research on finance options, look into building a LLC perhaps. Find out about buying real estate with your IRA. Etc, etc.

Buy books. Read investment strategies of the big names in investing. Use the time to educate yourself and above all be creative.

Don't Let Panic Drive You Off with Everyone Else.

About the Author:

Doc Schmyz has worked with investors all over the U.S.. His website gives thousands of investors up to date real estate investing information Get more info from across the U.S. on Doc's real estate investing resources page.

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What Is A Safe Real Estate Investment?

by Alexandria P. Anderson

Do you have jitters about putting your money towards a real estate investment? After-all, the media LOVES to talk about what tumultuous times we're in right now. Home prices falling! Buyers beware! Protect yourself!

Never believe anyone that tells you an investment is 100% safe and smart. EVERYTHING that you do with your money has a certain amount of risk involved with it, even if it's just putting bills under your mattress; speaking of which, let's talk about what happens if you do NOTHING with the money you save (e.g., putting it under your mattress). That wouldn't be very smart--fire, flood, theft, etc. could make your money disappear very quickly with no hope for return.

But, you say, what if I put my money in a bank safety-deposit box, won't THAT keep my money safe? Yes, it will keep the physical paper currency safe, but remember that the bills are only worth what the current value of the currency is. Over time the buying power of currency goes down (inflation!).

The annual rate of inflation in the United States hovers around 3% ("things" cost about 3% more every year). That means after one year of sitting in the secure bank box doing nothing, your money is worth 3% less. This wouldn't be called "saving" in my opinion; you're constantly losing purchasing power!

What About a Savings Account?

These accounts are almost always protected by the FDIC (Federal Deposit Insurance Corporation) so there's not much risk of your bank going under and you losing your money, but again you're swimming upstream against the current of inflation. Even the best savings accounts out there barely give you enough interest to counteract inflation and often times inflation is outpacing your savings account interest earnings; but at least you're not losing AS much!

How About Stocks?

I like to think of investing in stocks as investing in an "idea". You don't hold claim to any tangible item. You only "own" the fact that you have contributed funds to the "idea" that the entity you contributed your money to will somehow add value to itself and subsequently add a gain to the money you started out with.

The danger here is that you wouldn't surely know how much control you have over such an "idea". In real sense, you actually have almost none. Most people remedy this by doing extensive research on the company or entity's track record as well as the people around it (to predict if the "idea" will work for all of you). Unfortunately, it's hard to tell especially if you are unaware of all the factors involved. Unless you have the desired technical preparation (i.e. its your profession, or you devote your time on research), investing in stocks would save you from much greater risk. This leads us now to the best possible option, the real estate.

What primarily distinguishes real estate from the ones mentioned above is its being "tangible" (this presupposes that you can experience it with all your senses: you can see it, touch it, and even improve it.) Likewise, the risk involved as far as losing the physical asset is concerned seemed distant. If it does, there's a wonderful thing called insurance! Can you apply the same in the case of stocks? Your property's value also grows with inflation unlike paper currency so you do not have to worry about your investment losing its purchasing power every year.

Finally, the best thing in real estate is that the return of your investment is intensified! To name a few, you get huge tax breaks, gained equity through renter-paid debt reduction, equity gained through improvements, and many other surprising benefits. Can real estate investment protect your money? While it is true that no investment is a hundred percent safe, with forethought, I can definitely assure you that this is where you'll find the security you're looking for.

About the Author:

About the Author: Alexandria P. Anderson is a Golden Valley Minnesota Real Estate agent that helps people to find and purchase Golden Valley houses in Minnesota.