Massachusetts Housing Slows Down, Equity Cash Outs provided 14 Percent of Residents Income
Very interesting post over at The Real Estate Bloggers. As a resident of Massachusetts, I have been expecting a “blood bath” in the real estate market here and it looks like it will be coming soon. While it will be a negative event for many people it will present many opportunities for the smart real estate investor.
It’s been quite a few years since I read RICH DAD, POOR DAD by Robert Kiyosaki; I think it was back in 2000 as a high school freshman. It was one of my first insights into the business world, and after reading it, I was extremely excited!
First, if you have not read the book yet, I strongly urge you to pick-up a copy. Last time I checked Amazon it was $11 – not bad for a life changing book! If you have read the book, continue…
Now I’ll assume you’ve read the book or at least heard something about it. There seem to be two opposite perspectives on the book:
1. It is a great introductory book into the world and business and real estate investing.
2. The book is useless and Kiyosaki is a fraud.
My opinion is along the lines of #1. Kiyosaki has written a wonderful book that will enlighten and motivate almost any individual to take action and better their financial situation.
I can’t say whether or not Kiyosaki’s story of his two dads is true. But if it isn’t, it doesn’t matter. That fact has nothing to do with how good the book is. What matters is that the book is easy-to-read for the average person thanks to Kiyosaki’s style.
If you want detailed how-to information, look elsewhere. RICH DAD, POOR DAD puts the idea of financial independence in your head. That’s the point. If you gave a novice a technical book about flipping properties, he/she would be pretty bored and gain no interest in real estate investing. Those are the books you read after Rich Dad.
Regardless of your stance on this issue, you need to consider this valuable lesson:
Find a mentor.
“Rich Dad” is an example of a mentor, someone who guides you during your investing. Someone you can go to for advice. Someone experienced in your field. Mentors are invaluable when you are starting out and when you are faced with any sort of strategic decision.
Now go find your own “Rich Dad.” (Check out http://www.score.org/ for help.)
The real estate business has been around for a good number of years. More and more people are drawn to it because of the steady influx of money, but there are things you have to consider before entering a real estate business.
First you have to decide whether it would be as a sole proprietor or through a corporation, partnership, or trust. Each has its own pros and cons. Let’s take a look at them.
In a sole proprietorship, everything is “sole” as in managed by a single entity. In terms of splitting the income, it could be divided among family members that have a lower income bracket. A lawsuit that may arise in the future regarding the properties is held personally.
A corporation is a structured legal entity that consists of a group of persons known as shareholders. Investments are high in this type because investors are attracted to the built-in stock structure. This type stays on the market for years until the stockholders decide to split up or merge with other corporations. However, starting a corporation requires a lot of money. Proper corporate formalities should also be followed in order for it to be recognized as a corporation. A huge amount of paperwork is also expected in this type, in the start-up phase and every year of business. This includes reports, bank accounts, financial statements, and records that should be updated from time to time.
In a partnership, partners are generally liable for one another. Though with taxes, an individual may be taxed in terms of his individual level. Administrative and compliance costs incurred through partnership include legal, partnership agreements, accounting, and tax.
Trusts in some cases may be similar to a corporation; however, unlike a corporation, trusts are not held liable to capital taxes. And in case of losses, it remains within the trust and can not be flowed out to the beneficiaries.
When you know what type of management to consider, set your priorities on whether it will be land, apartment buildings, or rental apartments.
Buying a plot of land, like a broker, would be a good investment but one has to wait a long time for the value of the property to go up. However, you could get it for a lower cost to start.
For rental apartments, it would be a fairly easy start and provide a long term return on investment, but would require waiting for the pay-offs.
Apartment buildings mean triple-net income. It is because the tenants are usually tied in a three-year contract. A drawback on this is a vacant space for a long period of time. For every year that it is not leased, it would mean a loss of income.
Real estate business is a vast and varied opportunity. There are many things to consider before playing the game. Take time analyzing terms and conditions that go with it. In the long run, wise decisions could bring in a lot of money and lesser problems.
Realtors Get Their Hands on Technology
This article discusses how real estate agents are leveraging technology to make their job easier. One example is Pathfinder from InternetMLS which integrates MLS listings wirelessly with GPS. A quick search for ‘real estate software’ on Google returns a variety of potentially useful programs for the RE investor and broker a like.
Services like Google Maps and Yahoo! Local allow you to also see what amenities (restaurants, coffee shops, schools, etc.) are near properties. A quick search for “[town name] + census” will generally return the newest census data on that town. Virtual 360 degree tours of houses is also a new but increasingly popular feature requested by potential buyers. The more information and interactivity you can provide over the web, the better. Real Estate is still somewhat of a conservative industry so you can get ahead by leveraging new technologies.
The MLS is a database – an extremely convenient way to know what properties are for sale at any given moment. This makes it very useful to real estate agents and brokers (or basically anyone looking to buy or sell a house.)
Basically, the MLS is like a huge property warehouse. When a property is available for sale, it enters the warehouse. When it is sold, it leaves the warehouse.
The MLS only contains information since real estate cannot actually be stored in a warehouse. This information comes from the various brokers that exist in the scope of the MLS.
Why the MLS works for home buyers
First of all, MLS is very convenient. Buyers can browse through the available properties listed on an MLS.
Using the MLS also does not cost anything. It is a free service that is sponsored by the realtors advertising their available properties.
Options Galore
On the MLS, a buyer is not limited to choosing among a few available properties. Usually, the MLS makes available many properties that are for sale.
In the olden days, when information was limited, a buyer would only be able to visit a few homes per day. He or she would also need to communicate with the agent for details and such.
With MLS, the buyer can start browsing from the comfort of his or her home. Details regarding the property are also listed there.
Aside from the written details, MLS usually provides pictures of the property. Other advanced MLS implementations even have other surveying tools that help buyers come to decisions regarding their desired property.
Fitting the Bill
MLS also helps the buyer by narrowing down choices to those that fit the buyer’s desires. The buyer supplies information on his or her desired property to the MLS site. This information includes desired area, size of property, age, location, and other specifics. The buyer is then given a set of houses that fit that description.
Communication
MLS also makes it easier for the buyer to contact the realtor. Details about the realtor are listed along with the property to allow straightforward communication between buyer and realtor.
Conclusion
It may be hard to believe but the real estate industry has benefited a lot from MLS. MLS is the next step in real estate evolution. It is relatively safe and is very convenient. As the MLS grows in popularity, more and more realtors avail of its listings. For the buyer, this can only mean good things – more choices, better decisions.
Here is a great article by Rik Foote about how to get started as a Real Estate Investor by becoming a ‘scout’. This is the best way to get started, particularly if you are young. There is little to no risk, you learn a great deal, expand your network, all great things. The key is to learn as much as you can and then see if you can leverage your learning with the network you now have to get yourself into a deal with little to no money down. Then build your real estate empire from there.
Here is the article…
When it comes to real estate investing, most beginners find themselves with plenty of desire, a little bit of knowledge (from books, seminars, online message boards or something like that) and in most cases they have little or no money to get started with. Does this sound like you? If so you are not alone. Not by a long shot.
If you’ve spent any time online researching this topic you will have undoubtedly found a countless number of articles, books, CD sets and boot camps out there that all promote some super duper “investing secret or technique” that will teach you everything you need to know to be successful.. even if you have no money or experience in the business. Call me a “kill joy”, but in my experience, these types of things are not very realistic.
I’m NOT saying that these super secret secrets can’t produce success. I’m saying for most normal and sincerely interested people (like my 65 year old single Mother), the sophisticated & sometimes pushy techniques that are often touted by the “gurus” are simply not a viable option for them.
The good news is that there are realistic and practical ways to get started as a real estate investor regardless of your experience level or the amount of cash you have on hand. In my humble opinion the best option is a process called “Scouting”. Scouting is probably one of the most realistic and practical ways to get started available for beginning investors.
What Is Real Estate Investment Scouting
In the medical profession every doctor must complete an internship or residency before they are permitted to become a licensed practicing physician. In some cases that internship can take many years to complete. Now, if you think about real estate investment as a business and not as a “hobby” or a little “side project” a smart question to ask is…”Does an internship for the real estate investment business make as much sense as it does in other fields?” I think the answer is yes, but take some time and think about it for yourself.
I believe that success in this business or any other business requires that you must first learn the basics and develop a firm knowledge of the rules of the game. There are plenty of methods you could use to learn the basics but I believe that the best way to acquire these much-needed essentials is out there in the real world, getting your hands dirty by actually studying the market and evaluating investment results first hand. And more importantly, doing so without risking your own money.
This can be accomplished by becoming a “Real Estate Investment Scout”. Scouting or “Bird Dogging” as some like to call it, is an activity that anyone can do regardless of their age, experience, income or credit history and without having to spend large sums of money. Scouting opportunities for other investors; is a safe way to gather the knowledge that will ensure your success. As well as limit the risk of exposing your own personal money while you’re still trying to get your bearings in this business.
A real estate investment “Scout” is much like a consultant or research analyst, you find potential investment opportunities, do the research and analysis of the deal and then sell the information to other more senior investors for a fee. The fee structure can take many forms. In some cases it can be a flat fee and in other cases it can be a percentage of the purchase price. There are plenty f benefits to scouting which include:
1. It’s completely risk free. Since you are not purchasing the property you have no need for financing or credit. Therefore you have no financial risk.
2. Requires no prior experience. You will undoubtedly find some stink bomb deals in the beginning that you’re going to think are the greatest thing since central air conditioning. Don’t worry about that. It’s part of the learning process. The professional investors will tell you why the opportunities are no good. (Hint: This is how you learn.)
3. As you learn, you will be able to transfer deals to other investors for cash. If you save the money you earn from scouting, you will eventually be able to finance your own deals.
4. As you go about your merry way as a scout, you will develop relationships with investors, brokers and other real estate professionals. This will help you in the long run when you become a full fledged investor yourself.
Whether your goal is to eventually renovate properties for profit or purchase rental properties for cash flow, getting started as a scout is in this guys’ opinion, the smartest, most realistic and lowest risk get started approach out there.
To your success!
Rik Foote
Rik Foote is the President & CEO of The Dorian Group, Inc. Dorian is a software company that develops affordable software applications designed to help beginners get off to a realistic and practical start as real estate investors. To learn more about Dorian’s products and services visit http://www.reiscouts.com
Article Source: http://EzineArticles.com/?expert=Rik_Foote
Here is an article by a friend about the home buying process. Not only can the novice real estate investor benefit from this article, but for a more experienced investor it allows the opportunity to take a step back and look at this process from the other end of the table to gain some perspective…
Buying a house marks a new beginning. How do you know that you’re getting your dream house and not straining your credit limit? Read through the points below to get the answer.
Get yourself a “pre-approved” certificate from a lender.
This certificate gives the seller the assurance that you have enough money to buy their property. Securing a Pre-Approved certificate could take from a few days to a few weeks depending on the status of the request. But it’s worth the trouble of waiting since it increases the chances of you are getting the best deal in the market.
Consider selling your home first.
Selling a property (if you have one) before acquiring a new one would also help. It is because paying for the property upfront could get you a great discount. It is because some property owners think about either selling to a prospective buyer who would buy the property at once, or waiting for a buyer to sell his present property before buying the new one. And in most cases, the seller would not pass up on the chance of having their property bought up at once.
Know what you want.
It all comes down to knowing what you want. Sticking to that is the key to successfully acquiring your dream house. Upon seeing different houses, you will see a whole new picture of everything. But do any of them satisfy what you want in the first place?
At the onset, you may be in awe of the beautifully manicured lawns of a certain estate, but attached to it is the responsibility of maintenance. More so if you’re not really into gardening. It would only cost you more to pay for someone to look after it or suffer the sight of a brown drying lawn. Stick to the basics and what you originally planned on buying.
Don’t be misled by advertisements.
Advertisements only contain positive things about a property. That is why it’s called an advertisement. Many things are left out in putting up an ad. It would not say that crime rates have been high recently or that the neighborhood is plagued by gangsters.
Check out the house itself. Does it suit your needs? Is it well ventilated? Is the house well-built? It will be your haven for a number of years so be sure that it is comfortable to the occupant.
Consider the resale value of the estate.
Things change. Most likely there will come a time that you will have to sell your home. Know how long it will take to sell the estate in the future. Knowing how long the “for sale” sign has already been sitting in the front yard would give you enough knowledge about the market pacing.
Armed with this knowledge of home buying, you should be well on your way to finding the perfect house and making it your home.
A perfect business card for real estate investors
This is a great post over at the Michigan Real Estate Investment Blog. It shows examples of great business card designs for real estate investors and how to use them effectively. Simplicity coupled with all the details people need as well as what you are looking for as an investor makes the perfect real estate investor business card.
Want to buy cards for cheap? Check out Overnightprints.com they are fast, high quality, cheap, and you can design a card right on the site if you want.
Behind the success of a man is a woman, and behind the success of a real estate business is an ideal agent. Indeed, it’s the human resource that is considered to be the most important factor for real estate business to succeed.
Indeed, real estate can be a lucrative activity when managed properly by the right person. But what does it take to be an ideal real estate agent?
1. Have a solid track
Most people who succeed in life know where they want to go, what they want to do, and the reasons behind it. And so, for a person to be a successful real estate agent, he or she must encompass this trait.
2. Knows who you are
Skills, strategies, and marketing tools will all go to waste if the real estate agent does not have a solid assessment of his or her own personality.
Consequently, a successful real agent is honest in his or her endeavors especially those that involve transactions with a client. If, in the first place the real estate agent is not being true to him or herself, then the real estate agent will most likely have difficulty in dealing with other people.
This all boils down to the fact that an achiever is a believer not of any other thing, but in himself.
3. Optimism
A lot of people who succeed in life are optimistic. This means that a person always has a positive outlook on life. An optimistic person believes that there is no such thing as failure. And an ideal real estate agent knows this too.
4. Motivation power
An ideal real estate agent knows how to motivate or move people into action. It’s that unique power of every sales person to devise a strategy that can motivate their clients to buy the product he or she is selling.
5. Awareness of the value of properties
To become an ideal real estate agent, one should be aware of the ebb and flow of the cost of the properties. These should be taken into consideration with utmost care and skill.
6. They should price right
To be an ideal real estate agent is to be considerate with their client’s purchasing capability. They should be sensitive enough to detect if the price of the real estate is reasonable enough to hit their market.
7. Does not engage in hard selling
Be considerate of the buyer’s emotions. Putting someone in a house they don’t want will come back to haunt you later.
8. Know how to make a pleasant showcase of the property
If the house is presented properly, there is a much greater chance of making the sale. In the same vein, even a nice house may appear dull if the agent does not fully describe its appeal.
Buying or selling a house is a thrilling experience. But connected to this is a stressing and overwhelming job. This calls for a good real estate agent. But what do we need to know about hiring an effective real estate agent?
Verifying the real estate agent’s license is very helpful. It pays to be very cautious because this involves the property! This includes his state license in selling a property. Added to this is doing a short background check on the agent. Ask for the previous estates he sold or acquired for a client. Knowing the training and seminars he has attended will also give you a grasp on the abilities of the agent you could be hiring.
Develop a good chemistry with your agent. With the agent knowing what the buyer or seller wants he knows where to start and what to consider. The agent should be able to tell his client the true worth of his property because it is really what it is worth and not because he just wanted to lure the client in doing business with him. Meet up with the agent once in a while to stay updated about the property.
In selling a house, the agent acts as the adviser. He gives the owner advice like the asking price of the property and acts as mediator between the buyer and the owner. And in buying a house, the agent acts as the researcher. He also does the legwork and sorts through which properties best suits the need of his client.
The agent should also show an excellent knowledge about the market. This works well for the client because the agent would be able to give the buyer considerable rates especially if he has sold many estates within the area. And in the case of a seller, the agent could offer them a great deal of asking price for the property.
It is also important for the agent to have plans. Find out the agent’s plans on how to sell the property or in a buyer’s case, see how he plans to help the client in acquiring a new property. Ask him what he plans on doing like will he put up ads for the property (if the client is selling) or would devise house visits on prospective estates (if the client is buying).
Hiring a good agent is easy if you know what to look for. Take these easy steps, ask for his credentials, establish a rapport and work with him in doing marketing plans for the property. Surely, buying or selling an estate would come out as a satisfying experience!
