Real Estate Investing Basics

by: Richard Rigor
Real estate investments may not be everyone’s cup of tea, but some people who have already tried investing in real estate know that it can be profitable. Real estate investment experts say there are several keys to making significant profits in real estate investment deals. And when the deals are profitable, you will certainly be well on your way to success.
For real estate investment neophytes, don’t be afraid of the challenges and pitfalls you may encounter along the way. There is definitely a lot to learn, but in the long run after you have gained some experience, you’ll hopefully become a master at closing profitable real estate deals.
There are 5 core skills that are necessary for building a real estate investment business. These will be the key factors in creating a profitable real estate investment portfolio.
These are the 5 core skills of real estate investment:
1) You must learn when and where to find the right kind of sellers.
2) You must learn the art of being a master negotiator when it comes to closing your real estate investment deals.
3) You must be able to quickly and accurately analyze each real estate investment deal so you’ll know exactly when to proceed and when to pull the plug.
4) You must become an expert in all areas of real estate investment and understand such terms as lease options, cash sales, wrap mortgages, short sales and other terminology common in the real estate investment trade.
5) You should totally understand the meaning and concept of investing in real estate, including all of the financial risks and benefits.
Now is a great time to consider investing in real estate. There are great potential rewards and the effort you put forth can yield enormous monetary returns on your investment.
Your confidence level will grow when you’ve gained some experience and closed on your first few real estate deals. But, don't stop there...
Continue to learn about real estate investing and to develop your investment skills. In a short time you may find yourself managing a profitable and growing portfolio of investment properties.
Continue to follow your real estate investment "game plan" and always keep an eye out for the hidden investment opportunities. The opportunities are definitely out there and with a little knowledge and desire can be yours for the taking. So, why not get started in what might be a new and exciting (and profitable) career today?

Creative Real Estate Investment

by: Steve Gillman
An example of creative real estate investment? When I was young, I had a job that paid $3.40 an hour, and I somehow saved enough to buy my first piece of real estate - 2 acres near where I lived. It cost $3,500.
I spent a few hours removing brush, outlined a driveway with logs, and hand painted a sign. Two weeks after I bought it I sold the land for $4,750, with $250 down, $100 per month, at 11% interest. With the capital gain, my annual return on investment was over 20%. This was my first real estate investment.
Creative Real Estate Investment - The Key
I bought the land cheap, because the seller needed fast cash. I solved his problem. I sold the land higher than the market value because the buyer needed easy terms. Second problem solved. Solving problems is the key to creative real estate investment.
Cell phone companies, radio stations, police departments and others need hill tops for their towers. The problem is that they can't tie up their capital buying them. One creative investor found a way to solve their problem.
He got six month options on hill top properties for a few hundred dollars. Then, when he found those who needed them, he would get a long term lease signed. They built the tower themselves, of course. With a lease in hand, it was easy to get financing to exercise the option and buy the properties. He invested a few hundred dollars to create years of income.
Trees are needed by lumber mills. A friend of mine solved this problem by letting a company cut half the trees on his small property. They paid $4,500, and I couldn't see the difference when they were done. The property was worth as much the day after the cut as the day before. My friend lived there, but a creative investor could buy property like his, sell half the trees, maybe clay or gravel too, and then re-sell the land.
To solve problems, you have to figure out what they are. Do people need easy terms? Cleared lots? Lumber? Better access to a piece of property? Smaller pieces of land? Condos instead of apartments? The list could go on. Just remember that solving problems is the key to creative real estate investment.

Real Estate Rentals - Sell For More

by: Steve Gillman
Selling real estate rentals isn't like selling houses. You can paint a house, and get a little more because it looks nice. Rental properties, especially larger ones, are different, because they're bought by investors, who look at income more than new paint. Raise the income, and you increase value to investors.
Time to learn about capitalization rates. If investors in your area expect a capitalization rate of .08 it means they want a net return (before loan payments and taxes) of 8% on the purchase price. So if your three-plex generates $12,000 net income annually, they'll value it around $150,000 ($12,000 divided by .08). If you can make it generate $16,000, you make it worth $200,000.
More Income From Real Estate Rentals
Raising rents is the obvious way to boost income, if you can justify it. See what similar units are renting for. If your units are $60 below the going rate, you can raise the rents and not lose your renters. Increasing the rent $60 for three apartments means $2160 more net income annually. With a .08 cap rate, you just added $27,000 to the value of your property.
There are other ways to raise rents. Maybe your tenants will agree to $30 more per month if you have a carport built. That's $1080 more net income annually, meaning roughly $13,500 more value added to your property. ($30 x 3 units x 12 months = $1080 divided by a .08 cap rate = $13,500) If you can build that carport for $4,000, that's a good return on investment right? What else do they want?
Higher rent isn't the only way to get more income. Storage sheds can be rented to tenants or you could put in a coin-operated washer and dryer. With a larger income property, you could install pop machines.
Reduce Expenses Of Real Estate Rentals
Could you add insulation to reduce the heating costs? If you're paying $80/month for lawn care, will one of the tenants do it for $40? Could you buy cheaper insurance? Any way you can reduce expenses raises net income (unless it scares away tenants). A new $4,000 furnace that saves $800/year on heating costs means you just turned $4,000 into a $10,000 higher sales price.
This isn't an exact science, and of course appearance and other factors matter. Increasing that net, though, is the surest way to get more for your rental properties. Make the changes at least several months before you try to sell the property (a year before, if possible). Also, learn how do the math - it really does matter with real estate rentals.

Real Estate Investing for the Beginner

by: Luke Garfield
Real estate investments are often termed low risk investments that can potentially yield good returns. A lot of people think that real estate investing is an easy business where you don't really need to do anything. However, the truth is that real estate investing does need you to put in some effort (if you really want to make profits). The most important thing is to be able to uncover the real estate for sale that will yield the highest profits. So how do you go about looking for real estate for sale? Generally, a lot of people start looking for 'real estate for sale' through the internet. And why not, the internet is after all the hub of all information. So, you could look for real estate for sale using the search engines on the internet. You could also specify your requirements in search criteria on the real estate sites in order to get very specific results on real estate for sale. You can even view images and video of some of the properties thus reducing the need for personal visits for viewing. However, not everyone is tech-savvy and there are a lot of people who still take the approach of putting up an ad in the local newspaper. In fact, there are some newspapers that are dedicated to just that i.e. real estate for sale. You could even go ahead and put up a 'wanted' ad in these newspapers. Sometimes, looking for real estate for sale in old newspapers (like 1-2 months old) can help you get a good deal (in case the property owner has not been able to sell the property and has become a bit more 'motivated' to sell it). MLS, the multiple listing service is one the best ways to look for real estate for sale. These are published by the real estate boards. If you can lay your hands on a MLS book as soon as it is out, you can expect to get really good deals. The key is to act fast. Open houses are another good way of getting the best out of your time. You can see dozens of 'real estate for sale' properties in a very short period of time. And you never know when you might come across a property that is real gold. Investor groups are yet another rich source of real estate for sale information. Of course, how can we forget the real estate brokers? Real estate brokers are one the most popular (and sometimes most effective) information resource for real estate for sale. Not only do they provide information about 'real estate for sale' but also assist in getting the deal finalized and closed. Besides that, you can also get very good deals through public auctions, bank foreclosures, FHA and VA foreclosures and distress sales.