Thursday, 13 October 2011

Real Estate Investing For Beginners | Your Web Biz Here

As a result I?m sure that you feel ready to throw your hat into the ring and begin your own real estate portfolio. There is certainly nothing wrong with this as an investment strategy though there are many wrong ways in which an investor can go about the process.

?

Flipping properties is my field of experience and a good deal of what will be discussed here will relate to flipping properties though some of the information can be crossed over into rental properties and other types of real estate investment. Even personal property can be a real estate investment.?

?

Real estate is one of the few forms of investment in today?s society in which you can actually see the changes as they are occurring.?

?

It is truly amazing to watch a property that was once neglected and in a state of disrepair suddenly spark back to life right before your very eyes. There is a lot of work involved in this process though and this is often overlooked. Much like labor in light of birth. The pains are quickly forgotten when looking into the face of the outcome.?

?

Keep these things in mind for your first time and you should be well on your way to future success. You should also realize that the first few investments are learning experiences more than anything else. If you do not achieve the success you were hoping for (or success to a lesser degree than hoped) you should not give up on the dream all together simply learn from the mistakes you will make along the way as well as the mistakes that others have made.

?

Real estate investing is not an exact science. There is no formula in this business that guarantees success. Even seasoned professionals will find the occasional bump in the road even on a property for which they had high expectations. Stuff happens along the way that cost money, delay the project, or set the project back.?

?

These things are stumbling blocks no doubt but should not be allowed to derail the entire project. When these things happens go back to your original plan, reassess the situation and create a new plan with the necessary adjustments in mind. The key is in sticking to a plan the entire time and never throwing the plan out the window and flying by the seat of your pants.

?

Your plan will be your lifeline throughout the project. You need to have a plan and a budget in writing. One great rule of thumb is that you set aside double the amount of money you plan for in your budget. This gives you a bit of a safety net for the inevitable things that will go wrong. Things will go wrong on almost every flip you encounter. Even the seasoned professionals that have television shows about their flipping efforts encounter problems in almost every single flip, rehab, or renovation.

?

For your first few investment purchases it is recommended that you purchase properties that need little more than minor cosmetic repair rather than complete rehabs or renovations. This allows you to get your feet wet without the incredible risk of going off the deep end mentally, emotionally, and financially.?

?

These properties represent lower profits but also lower risk. They also allow you to gain valuable experience and raise a little capital in which to invest in properties requiring more extensive work in the future.

?

Keep your eye on the carrot at the end of the project. Far too many would be property investors give up just before they reach the point of true profitability. The goal is the profit at the end of the project.

Written by victornzekwu
victor brown is an expert in business management and investment ideas, and also a consultants in financial investment and money matters. and a writer

As a result I?m sure that you feel ready to throw your hat into the ring and begin your own real estate portfolio. There is certainly nothing wrong with this as an investment strategy though there are many wrong ways in which an investor can go about the process.

?

Flipping properties is my field of experience and a good deal of what will be discussed here will relate to flipping properties though some of the information can be crossed over into rental properties and other types of real estate investment. Even personal property can be a real estate investment.?

?

Real estate is one of the few forms of investment in today?s society in which you can actually see the changes as they are occurring.?

?

It is truly amazing to watch a property that was once neglected and in a state of disrepair suddenly spark back to life right before your very eyes. There is a lot of work involved in this process though and this is often overlooked. Much like labor in light of birth. The pains are quickly forgotten when looking into the face of the outcome.?

?

Keep these things in mind for your first time and you should be well on your way to future success. You should also realize that the first few investments are learning experiences more than anything else. If you do not achieve the success you were hoping for (or success to a lesser degree than hoped) you should not give up on the dream all together simply learn from the mistakes you will make along the way as well as the mistakes that others have made.

?

Real estate investing is not an exact science. There is no formula in this business that guarantees success. Even seasoned professionals will find the occasional bump in the road even on a property for which they had high expectations. Stuff happens along the way that cost money, delay the project, or set the project back.?

?

These things are stumbling blocks no doubt but should not be allowed to derail the entire project. When these things happens go back to your original plan, reassess the situation and create a new plan with the necessary adjustments in mind. The key is in sticking to a plan the entire time and never throwing the plan out the window and flying by the seat of your pants.

?

Your plan will be your lifeline throughout the project. You need to have a plan and a budget in writing. One great rule of thumb is that you set aside double the amount of money you plan for in your budget. This gives you a bit of a safety net for the inevitable things that will go wrong. Things will go wrong on almost every flip you encounter. Even the seasoned professionals that have television shows about their flipping efforts encounter problems in almost every single flip, rehab, or renovation.

?

For your first few investment purchases it is recommended that you purchase properties that need little more than minor cosmetic repair rather than complete rehabs or renovations. This allows you to get your feet wet without the incredible risk of going off the deep end mentally, emotionally, and financially.?

?

These properties represent lower profits but also lower risk. They also allow you to gain valuable experience and raise a little capital in which to invest in properties requiring more extensive work in the future.

?

Keep your eye on the carrot at the end of the project. Far too many would be property investors give up just before they reach the point of true profitability. The goal is the profit at the end of the project.

The biggest challenge that real estate investors face is to make offers that get accepted.?? Buying properties is the basic foundation of real estate investing.

Unless you buy properties, you cannot make any money.

?Here is how to make offers that get accepted.

The offer you make depends on the type of property you are buying.
1)?? ?Buying from motivated sellers
?It is important to have the following pieces of information if you buy houses from motivated sellers:

a)?? ?Market Value
Do your due diligence to find out conservatively how much the house would be worth in a perfect condition.?? You must have this information before you can make any offer.

b)?? ?Mortgage balance
You must get this information before you can make an offer.?? A seller who is not willing to disclose this information is not motivated enough. Move on to a motivated seller.

The mortgage balance must allow you to buy the house and still leave you with a profit.? Thus means that the offer you give must allow you to own the property free and clear and still make money.

c)?? ?Repairs needed
?It is possible to estimate repair costs with the information provided by the seller.

?You must know how much you need to fix up the house before you can make an offer.? Of course I like to see the house and do my own repair estimates.

d)?? ?Asking price
?Given the above 3 pieces of information, if the seller is asking for too much, the deal might not be worth it.

A? good asking price must take into account the market value, mortgage balance and repairs.?? You can then make your offer lower than the asking price.? If at all the mortgage balance and repairs allow you to make an offer that can leave you with a profit, by all means do it.

No offer can be too low, but you also have to take into consideration the seller?s needs.?? If they are facing foreclosure, then they probably need some money to move, or their asking price might be just enough to get away from the property.

?It makes no sense making an offer when mortgage balance is so high you cannot make a profit. Move on to the next deal.

When all is said and done, the only bad offer is the one you have not made.? Make as many offers as you can.?? You?ll be surprised how many get accepted.

2)?? ?Buying foreclosed properties
?The asking price and repairs are the only important considerations to make in this case.? Banks selling these properties are willing to negotiate.

?Most REOs are listed below market value.?? If your numbers look acceptable, by all means make an offer.

Remember the banks are willing to negotiate, so always make an offer lower than the asking price.

In order to be successful in real estate investing, it is necessary to close as many deals as possible while spending as little time, money and effort as possible. Learn how you can achieve this by automating your real estate investing business with an automated real estate investor website.

select: More Real Estate Investing Articles

Source: http://www.yourwebbizhere.com/real-estate-investing-for-beginners/

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