Real Estate Investing Articles

Before we look at the value of a number of late night real estate infomercials, it is important to stress that any source of information that is helpful should be commended. If it was not for presence of valuable resource information on a number of subjects then the ability to learn about a subject – and become successful – would not be possible. Now, there are those who say that those who sell seminar tickets, books, and CDs about real estate investing are frauds. The reason they are frauds is because if they were really “smart” about real estate then they would not need to sell books in order to make money. This is about as faulty as faulty logic can get. Well, a baseball player making $10 million a year does not “need” a raise to $35 million, but we have seen a precedent for that. So, it is not absurd to think someone with investing skill would cross collateralize by expanding their empire to informational products. Then again, if they were earning $500,000 a year with real estate and $1.5 million a year with informational products…well, do the math. There is really nothing wrong with informational products that offer significant value.

So, the real question that needs to be asked is the following: does the product that is being sold actually have value? In many cases, the answer is yes, but you don’t need to spend money for it. Much of the information found in a variety of infomercials is actually common knowledge in the real estate business and not really worth spending money on.

For example, there are tons of real estate infomercials that stress the concepts of buying foreclosed properties, flipping properties and renting properties out higher for more than their mortgage payments. All of these concepts are legitimate ones, but none of them are radical and most of this type of basic information can be found for free on the internet. Actually, IN DEPTH information on this subject can be found for free on the internet. But when a person comes across a sales pitch for this information via an infomercial and it is the first time they have come across the info they have a tendency to elevate the product sold on the infomercial to be a little more valuable than it actually is.

If there was one problem, however, with infomercials it would be the carnival hucksterism that many of them profess. For an infomercial to be successful it must convince you that its concepts are exclusive and unique and that you must act fast. Remember, they won’t be buying time on your local TV station forever so if you don’t act fast they are out of luck! And, of course, the infomercials promise a lot of money with little effort quickly. This is the one aspect of real estate infomercials that are especially egregious. You can make a lot of money in real estate, but only with a lot of effort over an extended period of time. That is the true secret to real estate success whether you pay for the truth or not.

A.M. Caro is a freelance writer from Southern California.

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Posted by RENVEST under Real estate investor resources | No Comments »

The typical real estate investor may be a “jack of all trades,” but that doesn’t necessarily make him successful, it just makes him tired. The successful investor knows that in order to succeed, he has to surround himself with people who are smarter than he – those individuals very knowledgeable in the business and with a good track record. That’s a proven concept, employed by successful businessmen as well as politicians (though not necessarily “good” politicians, just successfully elected ones).

The key to establishing a great team is to put together players who are successful in their own right or have the potential to succeed. Your real estate investment team can have as few or as many individuals as you need – unlike a sports team where you can’t exist without your pitcher, power forward or wide receiver, you can get along with only a couple of players and still succeed.

First String Team Members

Investment Advisor or Certified Financial Consultant – This individual is going to manage your entire investment portfolio, ensuring that the retirement goal that you’ve set remains in focus at all times, and makes recommendations towards achieving that goal. He should always have your best interests at heart.

Real Estate Attorney – A good attorney is invaluable for reading, drafting and understanding legal contracts, knowing the legality of your property deals, and understanding the laws in the state or community in which you own the property.

Certified Public Accountant – Your number cruncher should be well versed in real estate-related accounting transactions. He’s going to be your go-to guy when tax time comes around, and you’re wondering about your deductions and write-offs. This individual may also be an excellent source of referrals for property acquisition.

Real Estate Agent – Unless you have access to the latest MLS updates, your realtor will be your best asset, alerting you to new properties coming onto the market; a realtor with BPO (broker price opinion) experience, provides even more of a benefit.

Traditional Lender or Mortgage Broker – Face it, you can’t do anything without financing; you need to know where or who to turn to for the amount you need, at a competitive interest rate as soon as you find a property.

Insurance Agent – For an investor with a good number of properties, your agent can help you set up policies, advise you to ensure that you have adequate protection at all times, and help you through the red tape of filing a claim.

Title or Escrow Agent – This individual will make your property closings infinitely smoother and relatively stress-free. A competent agent will ensure that your transactional information is accurately recorded, and that you pay only the appropriate fees. They should be looking out for your best interests.

Second String Team Members

Property Manager – When you can’t be everywhere at once, and find the day-to-day tasks of numerous property ownership overwhelming, a qualified property manager will be the best option to run the operation on your behalf, leaving you time to pursue other opportunities.

Property Handyman – A handyman kept on retainer may be a good alternative to a property manager; however, they should have a basic knowledge of what makes a home tick and be available to fix minor repair needs. Your goal is to hire a Ty Pennington or Bob Vila, not a “Tim ‘the Toolman’ Taylor” from the old television comedy, Home Improvement.

Contractors – If you are beyond the need for basic home repairs, and intend to buy and flip properties that may need some “updating,” you need a reputable contractor to assist you with ongoing and new projects. Finding a contractor that contains costs, works to specs, and finishes within the agreed time, is crucial.

Finally, though not officially part of your team, they are the ones who are your real support: your family, friends and mentor. Without their encouragement, would you really be where you are today?

Putting a successful team together may take some time, and it’s important enough a concept that you don’t rush or “settle” for just anyone. Where do you find your team players? Some you may already know, but see them in a different light – as a member of your community, swim club or religious affiliation. You need to ask around, pass around your business cards, get referrals and then interview your candidates.

It’s important to remember the immortal words of the great philosopher-cum-basketball player, Kareem Abdul-Jabbar, “One man can be a crucial ingredient on a team, but one man cannot make a team.”

Barb Zigah is a freelance writer covering real estate and business topics.

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Posted by Barb Zigah under Real estate investor resources & due diligence & real estate investing | No Comments »

Real estate investors may, like many others, believe in the adage, “if you want something done right, then you’ve got to do it yourself.” Generally, that’s true, but at some point, a real estate investor may have too many properties that make the efficient and profitable overseeing of those properties, without the use of a property manager, next to impossible.

The twelve sure-fire signs that you need to hire a property manager to care for your investment properties are:

1. You’ve brought an exterminator to the property on Peterson Street to fix an electric ceiling fan, and you’ve brought an electrician to the property on Peterson Avenue to eliminate a pest problem. Your little mental mix-up resulted in two relatively happy contractors, each of whom charged you for two house calls, and two bewildered tenants, wondering what happened?

2. You’ve been so busy that you forgot to collect the rent in one of the properties you own, and now the tenant informs you that they’ve spent the money and will be late getting it to you.

3. You don’t schedule the new delivery of home heating oil in preparation for the upcoming winter and your tenants are calling to ask you how to light a fire in their fireplace… their faux fireplace.

4. You forgot to run a background check on a potential tenant, and they turn out to be serial evictees with a page full of judgments against them on their credit reports.

5. You don’t panic when the phone rings at 2:00 in the morning, worrying that it’s a family emergency; instead, you mutter an expletive before you answer the call, knowing it’s a tenant with a property-related issue (and not necessarily an emergency).

6. You feel bad about raising the rent, and guiltier still if you have to perform an eviction, because you allowed yourself to get caught up in the drama that is your tenants’ lives.

7. You don’t have the time to inspect your properties on a quarterly basis, much less a monthly one, and the majority of the properties are less than an hour’s drive from your office.

8. Your spouse and/or your kids are complaining that your tenants see you more than they do, and you’re neglecting the maintenance of your own property, because you’re exhausted from your handy-man duties.

9. Several of your properties are vacant, and the word-of-mouth marketing scheme and the FSBO signs you planted on the front lawns are just not working.

10. You have no idea what your local, state or federal landlord/tenancy laws require and whether or not you’re in compliance (“Tenancy law? What tenancy law?” and “Fair Housing Act? What’s that?”). Ignorance of the law is not an excuse.

11. You’ve kept your repair receipts, invoices, insurance policies, tenant application forms and all property related documentation in a big box underneath your desk; at the end of the year, when you need your financial statements prepared, you hand the box to your CPA and he starts to cry.

12. You’ve got no back-bone when it comes to confronting your tenants about NSF checks, noise related complaints from the neighbors and/or police, late rental payments and poor property upkeep. You put off the confrontation until you’ve mustered up enough courage, and then begin your conversations with, “Umm. I really hate to bother you…”

It’s true that no one will love your properties as you do, certainly not your tenant and probably not your property manager, but it is in your property manager’s best interests (after all, he does get paid to do this) to keep your interests at heart. Trust them to know the best way to maximize the income that your property can generate, while minimizing the risks of vacancies, non-paying tenants, property damage and loss of property values.

Let your property manager handle the (sometimes unreasonable) demands of the tenants, the middle of the night phone calls, the confrontations and the evictions. Your property manager will also have the responsibility of preserving and even enhancing your properties, through regularly schedule maintenance and landscaping , alerting you to potential problems before they become serious and costly, and handling the day-to-day minutiae that is so time consuming, such as collecting the rents, and paying the bills, utilities and taxes. When and if your property becomes vacant, the property manager’s role is to market your vacancies, help you to set your rental prices reasonably and fairly for the market environment, and run the background check on all potential tenants.

What’s your responsibility, as the property owner? Ultimately, everything is your responsibility; it is, after all, your property. Provided that you’ve chosen a competent, qualified and responsible property manager, though, you’ll spend less time involved in your properties, leaving you more leisure time to spend pursuing the things that you love. Really, wasn’t that the reason that you got involved in real estate investing in the first place, to have time to enjoy life?

Barb Zigah is a freelance writer covering real estate and business topics.

If you are interested in reprinting this article on your website, newsletter, forum, printed publication or other communication medium, please consult our article licensing policy.

Posted by Barb Zigah under Real estate investor resources & real estate marketing & rentals | No Comments »

Your potential buyer has just pulled up in the realtor’s car. Quick! You only have one chance to make a good first impression, and a potential buyer makes the decision as to whether or not they’re interested in the house within the first 8 seconds of seeing it. So, what do they see when they pull up to the curb in front of your house, even before they alight from the car? Is it a (curb) appealing view? Or do they see window shutters with peeling paint, chipped wrought iron railings, dirt encrusted aluminum siding, patchy brown grass, the remnants of a vegetable garden and the kids’ bicycles and skateboards lying scattered in the driveway? If your answer is yes, then you’ve just lost a sale.

Staging your home for sale is a two part job: inside and outside. Your outside has to be as inviting as your home, because it’s a part of your home. So stand back, and open your eyes. What it will take is probably no more than a pressure washing, a little painting or touch-ups here and there, and a weekend’s worth of landscaping. Your destination should probably be your local home improvement center, where you can get everything you need complete the task.

Let’s look at some of the basics to getting your yard and the outside of your house, properly staged.

Declutter the yard – Remove all trash cans, bikes, building materials, garden fertilizer and the like and stow them neatly in your garage.

Eliminate unnecessary junk – Put away the plastic lawn chairs and tables, the kiddy pool and even the barbecue grill if it’s greasy and nasty looking. If you’ve got a car on your property waiting for rehab, now is not the time to leave it languishing – garage it, donate it or junk it.

Cut back the jungle – Prune or pare down all shrubs, trees and plants, especially those situated directly in front of your house. They should enhance the look of your house, not block a potential buyer from looking at it.

Basic yard maintenance – Depending on the season or need, ensure that your lawn always stays well mowed, weed-wacked or raked, and that your flower or vegetable gardens are well tended and neat. Mulch or fertilize to encourage healthy, vital looking plants.

Clean up the property – Pressure wash dirty aluminum siding or even sooty brick, as well as driveways, decks and patios.

Fix or replace damage – Take a good look at your driveway and walkway. Are there cracks or holes, oil stains, patches of grass coming up between the pavers? If they are beyond the need of a little patch work or a lot of scrubbing, consider having them replaced.

Make it colorful – Consider buying vibrant colorful annuals, and plant them in decorative planters, window boxes or along walkways, or flanking an entryway. A new mailbox, house numbers of hardware are inexpensive touches that translate well.

Scrape and repaint – Freshen up anything that looks dingy or has peeling paint, such as wooden shutters, window trim and railings, and most especially, the entrance way door — it needs to be inviting and welcoming.

Brighten up – Buy and install some solar lighting for night time showings; solar lights are more efficient than ever, easy to install, reposition and remove.

Decorate for the season – Don’t hesitate to pull out a couple of seasonal or holiday trimmings, but nothing should be garish or overwhelming. A holiday wreath or trim on the front door, white lights, a jack-o-lantern, they’re to be expected – you don’t want to create a haunted house or Santa’s workshop.

Real estate agents estimate that, with landscape staging, a seller’s return on investment is between 300 and 400%, depending on the area of the country your property is situated in. That $300 or $400 you “invest” at the home improvement center translates into more than $1,200 on your return. That’s a nice net profit.

If you don’t take it upon yourself to make this kind of “investment,” one of two things will happen. Either your potential buyer will reject your house outright or counter offer your asking price. And it won’t be just $300 or $400 less; no, they’re going to shave a few thousand dollars off of your asking price.

In any economy, especially one that favors a home buyer, you need to add the little touches that will make a house a home, even before your buyer signs the contract.

Barb Zigah is a freelance writer covering real estate and business topics.

If you are interested in reprinting this article on your website, newsletter, forum, printed publication or other communication medium, please consult our article licensing policy.

Posted by Barb Zigah under Real estate investor resources & real estate marketing | 1 Comment »

It doesn’t matter what you call it — “a little sprucing up,” “adding some curb appeal” or “home staging” – the numbers don’t lie. A home that’s been “staged” sells, on average, within one month, while an unstaged house, takes almost 6 months to sell. And if that wasn’t enough to convince you, a staged home often sells for the asking price. In any economy, especially one that’s experiencing a downturn, that’s not too shabby.

So, what is staging? On a very elementary level, a staged house is one that is de-cluttered, with furniture rearranged for easy access and pass-through, and simply but elegantly accessorized. Staging is a way of decorating your home so that when your potential buyer first enters, they immediately get the sense, subliminally, that this house, above all others, is the one.

Every seller wants to show their home in the best possible light. Only a decade or so ago, that simply meant keeping the house and yard clean, neat and presentable at all times, just in case the house was being shown to potential buyers. Now, homeowners are recognizing that their “comfortable, lived-in” look doesn’t sell. And professional stagers are cashing in on that recognition, big time. In North America alone, there are over 20,000 professionals belonging to the Real Estate Staging Association, and that doesn’t take into account Realtors who have certification in staging.

Professional stagers are not simply interior decorators; they are trained to create a warm and welcoming atmosphere, by minimizing a home’s flaws, through depersonalizing and de-cluttering the evidence of human existence, while emphasizing improvements to the property and landscape as a means of adding value. Excuse me? In simple language, they get rid of the junk, and make the most of what you’ve got. If you’ve got nothing or an empty house, they can take care of that, too. Many stagers have access to furniture, rugs, accessories and all manner of decorative household item, and for a fee (of course), can strategically place them in your empty home.

Staging doesn’t have to be expensive; you can get a basic consultation from a professional, who will charge by the hour, and make recommendations that you implement. Fees start at $75 per hour and upwards. For a pull-out-all-the-stops home staging, including provision of furniture and accessories, it might run as high as $4,000. But before you roll your eyes and close this tab, consider this, the return on your staging investment can be as high as 300%, but is almost never less than the initial cost.

It’s possible to stage your home yourself, provided you can be totally objective. The best way to do this is to take pictures of the rooms in your house, both during daylight hours and at night time, and take a good, honest look. Pretend that it’s not your property at all. What would and could you do differently? If you’ve got a friend whose decorating style you’ve always admired, why not ask for their help, as well?

There are some basic steps to staging your home, and getting it ready for sale. Most of them are do-it-yourself jobs, requiring little money, and a little more time.

Reduce clutter – Clear your house of “almost” everything that’s unnecessary; box it and pack or give it away… you’re moving anyway, right? You needn’t pack it all, though, this is still a home, and a “few” personal pictures or a couple of stand-out pieces of a favorite collection will add warmth.

Streamline – Keep only your “essentials” in your essential rooms, such as your kitchen and bathrooms. A potential buyer doesn’t need to know your preferred brand of deodorant.

Reorganize – Move furniture around, if necessary, to create a natural flow or walk through. Too much furniture in a room tends to make the room look smaller, so if you’ve got excess, stash it elsewhere.

Refurbish – Scrub, clean, paint, patch or polish your walls, floors, ceilings and windows. A bucket of soapy water, a can of white paint and some elbow grease may be all you need to revitalize a room.

Let the sun shine in – Open up the drapes and blinds during the day, and be sure you’ve turned on all of your ambient lights whenever the house is being shown in the evening.

Setting the mood – A couple of lightly scented candles (don’t overdo it, it’s a shrine) and music playing softly on your stereo (no hip-hop, rap or opera); if appropriate, light a fire in the fireplace. All of these are subtle but welcoming touches.

Individually, all of these are small, easily attainable improvements. Combined, they’re powerful enough to send the subliminal message that you want to convey: That this is your dream home.

Barb Zigah is a freelance writer covering real estate and business topics.

If you are interested in reprinting this article on your website, newsletter, forum, printed publication or other communication medium, please consult our article licensing policy.

Posted by Barb Zigah under Real estate investor resources & Uncategorized | 2 Comments »

Real estate investment seminars can provide investors with vital knowledge. To say knowledge is power is a dramatic understatement. Knowledge is more than just power; it is a tool for action. Case in point, someone who knows little about real estate investing is clearly not going to be as successful as someone who has developed a great deal of knowledge on the subject. Of course, this brings about the question as how one can increase his or her knowledge about the subject. One of the best ways to learn more about the subject would be to invest (pardon the pun) a little time examining one of the many real estate investment seminars designed to boost one’s knowledge, skill and opportunity in the real estate world.

In the past, if a real estate investment seminar was not coming to your area you either had to travel to the seminar location or you were just flat out of luck. Thankfully, that is not the case today as many seminars are available on DVD, CD and even in downloadable form on the internet. So, if you are looking to increase your real estate investing knowledge there are a number of resources available to you.

Now, there are those who are skeptical in regards to the true value of these seminars. After all, do they not make bold claims that are hard to make a reality? Well, it depends on the focus of the seminar. It is true that there are a number of seminar hosts who make absurd and bold claims but then there are those who offer solid, reliable information and advice that can truly prove helpful. The key to getting the most out of these seminars is to know what material is valuable and what material is hyperbole. For more insight read an article from NuWire Investor called: Real Estate Investment Seminars: The Good, the bad, and the ugly.

Investors should make sure to judge the credibility of the material, if the goal of the seminar is to “make millions of dollars in one month with little or no money down,” then you are probably not receiving much in terms of functional information. These types of over the top seminars are designed to appeal to the inherent laziness in which some in the “infomercial audience” revel. While these over the top seminars can be entertaining they are not good values for obtaining your education.

Conversely, those seminars that deal with topics such as “the basics of real estate investing,” “how property taxes affect investments,” etc can be valuable and helpful. The reason is that they are based on simple and practical information necessary for successful investing. The subject matter is down to earth and real and not prone to excess. Obviously, that is a good thing.

Yes, you can gain a lot of valuable information from a real estate investment seminar provided the seminar is not one that is weighted down with gimmicks and absurd promises. But, those real estate investment seminars that provide simple, basic information will prove quite helpful. Yes, it can be said that with real estate investing less is more.

A.M. Caro is a freelance writer from Southern California.

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Posted by A.M. Caro under Real estate investor resources | No Comments »

Real estate investment clubs can be found throughout the U.S., in most big cities and many small ones. Sometimes free and often for a fee (which varies from club to club), you can participate in their meetings, and learn the basics, the how-tos, and the ins and outs of real estate investing.

A novice real estate investor needs all the help he or she can get. Fortunately, there is a great amount of research available online and off-line. You can read all the success stories in hardcover, paperback and e-books, hear the “Millionaire’” tale of how they made their first million, listen on CDs, or watch them prance and preach on DVD and online “webinars.” Or, you can make a monthly visit to your local Holiday Inn.

The Good:
This is an excellent venue for networking, the life’s blood of real estate investors. You never know who will bring you your next big deal, introduce you to the property manager of your dreams, or find the creative financing you’ve been seeking. Go to your first real estate investment meeting with an open mind, open ears, and plenty of business cards.

If you’re not too shy, and this is not the business for an introvert, introduce yourself, and state your goals and desires. Admit you’re a newbie; no one will shun you. In fact, you’re likely to get more help and information than you’d have thought possible; everyone looks kindly upon the newbie, and can forgive your ignorance and naiveté.

Grab all of the brochures and literature you can, take as many business cards as are thrust into your hand, and pass yours out freely; some clubs have a regular “give-a-way,” so drop your card into the fish bowl — wouldn’t it be nice to go home with a new toaster, in addition to those excellent contacts!

Besides all of the written paraphernalia you’ll pick up, what you’ll glean from these meetings is the testimony, experience and advice of other investors and “experts” in the field; those who have been on the front line, so to speak. Their insight will be invaluable, and you’ll likely learn more from their stories than you ever could from a book or CD-Rom. When you hear how someone “successful” was able to overcome a seemingly insurmountable problem, that’s really what you’ll remember, not how to calculate a Loan-To-Value (LTV) ratio. Take advantage of investment clubs special events and “boot camps,” too. They can be educational and fun, but don’t take them too seriously.

The Bad:
While the primary goal of most real estate investment clubs is to educate you, there are clubs that have a different goal, and that is to sell investment property, chosen “especially” for the investment club. Don’t hesitate to go to see the properties that they’re pushing; it’s always worth at least that. But bear in mind, what you see is only what they want you to see. You might not be surprised to learn that the property that they’re showing to you is worth considerably less than the price that it’s selling at. Here is some common sense advice – keep your checkbook home, and don’t make any commitments. If it’s a property that you’re interested in, do your own homework and research it, outside of the investment club.

The Ugly:
You’ve heard the news reports, about real estate investors scammed out of millions of dollars. How does this happen? Well, it’s part fear, part herd mentality. This is especially effective when the would-be investors are a gathering of retirees with only their Social Security checks and their pensions to their name, rather than savvy business people in power suits.

What happens is that a con artist will espouse the benefit of a property, and the urgent need for everyone to act quickly, or else the deal will blow apart, like so much dust in the wind. Before you know it, you’ve whipped out your checkbook or credit card and are signing and initialing documents left and right. This is not the way it’s supposed to happen. If you find yourself in the middle of a whirl-wind when you thought it would just be a lively meeting, you need to pick yourself up and leave.

The vast majority of real estate investments clubs are legitimate, and a valuable resource, especially as it pertains to your networking. Understand, though, that their agenda is the same as yours — to make money; it’s just that the way to make money differs. You do it through your real estate investments, and they do it through you. Once you’ve got that clear in your head, you won’t have to worry about being hoodwinked.

Barb Zigah is a freelance writer covering real estate and business topics.

If you are interested in reprinting this article on your website, newsletter, forum, printed publication or other communication medium, please consult our article licensing policy.

Posted by Barb Zigah under Real estate investor resources | No Comments »