Results tagged “rehab” from boozwatt.com
The
number one question we're continuously asked by new investors is “how do
I get started investing in real estate without a bunch of money in the
bank?” It’s a legitimate question. Let’s face it, most people that
begin investing in real estate more than likely aren’t happy with their
current financial situation in life, and are looking for and expecting
more. Therefore, most of those people don’t have $10,000 - $40,000 in
the bank to spend on their first property. Even if you happen to have
excess money in the bank, maybe you don’t want to use it to acquire
your investment properties. Whatever the situation, investing in real
estate with no money down is a very important part of growing your real
estate empire.
Continue reading How to Buy Property With No Money Down.
There
are countless changes, upgrades, and updates that can be made to any
given property. What separates successful, long term real estate
investors from the rest is the ability to maximize their resources
(time and money), and in turn, their profits. This has become more
important due to the relatively thin profit margins available in
today’s real estate market compared the margins available over much of
the past decade. Thinner profit margins leave a much smaller margin of
error. In order to assure a much greater chance of success on a flip
property, it’s absolutely crucial to maximize every ounce of your
available resources for your flip project. No matter their timeline or
their bankroll, investors doing flips always have limited resources
because time equals money due to mounting carrying costs, and the more
money expended on renovation equals less available profit on the back
end. Therefore, it is crucial for each real estate investor to
understand how to maximize their profits from a flip project. So let’s
get started. You’ve followed the formula here and the tips and suggestions here, and you’ve identified a potential flip property. Now on to the planning stage.
Continue reading How to Maximize "Flip" Profits Through Smart Renovations.
I recently wrote an article elsewhere on the site discussing investment strategy as it relates to finding potential rental properties.
In that article I discussed the inverse relationship between rental
properties and renovation / “flip” projects, and I received a lot of
emails asking for elaboration on the subject. After clearing it with
our company’s other lead partner, I’ve decided to answer the call for
more elaboration, and describe in detail our company’s investment
strategy. While you’ve already learned elsewhere on this site how our
company evaluates “flip” properties
and rental properties (see link above), this is how we put it all
together. When I was starting out in real estate, one thing I looked
everywhere for was real world success stories, and how individuals and
investment companies got where they were. My thought was, if not
necessary, there’s no reason to re-invent the wheel. The problem is, a
majority of the time you can only find that type of information in
books, and I didn’t feel like having to pay for it. Secondarily, I’ve
always wondered, if you’re so good at real estate investing, why are
you writing books instead? But I digress. Here is our strategy, free of
charge, to the loyal readers of boozwatt.com:
Flipping
properties isn’t the same business as it used to be. Even as short as
two years ago, “lipstick” alterations (meaning cosmetic changes such as
paint and etc.) would yield massive returns. There’s no question that
the market has changed, however. Discussions about the changing real
estate market are on every news channel, every real estate website, and
even within these pages of boozwatt.com. Flipping properties has become
more of an art form now. It requires not only the transformation of a
formerly ugly property to something of uniformly appealing taste
(appealing to uniform taste is harder than it sounds), but also an
efficient maximization of renovation dollars. The reality of today’s
real estate market means that the margins on flipping properties is
smaller. A prudent investor must buy for a good price, spend
efficiently on the renovation, and then list below the market price in
order to sell quickly and avoid carrying costs, which can become
devastating the longer a home goes unsold.
Continue reading How to Find Potential "Flip" Properties.
Today’s
foreclosure market is absolutely record setting. Recent results have shown that foreclosures have increased 93% compared to last year. NINETY THREE PERCENT!!
That’s insane. This is good news for real estate investors for two
reasons. 1) A majority of these properties used to be on the regular
market before they went into foreclosure, soaking up buyer interest and
padding the inventory numbers, thus the foreclosure process will remove
them from the pool, and 2) more foreclosures equals more deals. The
second part is the obvious one. More foreclosures equals more deals.
Duh. But what isn’t so obvious is the impact. Not only are there more
deals to be had, due to foreclosures, but there are less investors to take advantage of these deals.
Continue reading How to Make Money Buying Foreclosures.
Aside
from the implementation of your actual business strategy, there is
nothing more important than being aware of, and utilizing, one of the
greatest provisions of the Internal Revenue Code -- the 1031 exchange.
The 1031 exchange, named, intuitively, after its provision in the Code
itself, allows for the deferral
of income tax on gains from property held for investment purposes by
allowing those gains to be exchanged for similar (“like kind”)
investment properties. I highlight “deferred” because it doesn’t allow
an investor to avoid tax on the gains, but it allows tax on those gains to be deferred
for as long as they are being held in a qualifying property. The great
part about the 1031 exchange is that you can use it over and over
again, as many times as you want. Therefore, you can defer taxes on
your gains theoretically for your entire life. There’s also the
potential, with some creative tax planning from your accountant, to
never have to pay these deferred taxes, if you set it up in a way to
pass it on to your children or even a charity (don’t quote me on this
-- definitely check with your accountant on this one). Either way, the
1031 exchange is the single greatest gift the government has ever
handed real estate investors. So, let’s see how it works:
Continue reading How to Delay Paying Taxes on your Real Estate Profits: the 1031 Exchange.
Congratulations to Stewart Hsu, at stewarthsu.com,
the winner of the October 17 article submission contest!! The article
offers some very good advice on the beginning stages of real estate
investing. His article, “How to Get Started Investing in Real Estate,”
is featured in full below. Enjoy!
Continue reading How to Get Started Investing in Real Estate.
An
extensive and well diversified portfolio of income generating real
estate is a must for the well-rounded, successful real estate investor.
While asset building itself comes from the profits garnered through
various forms of flipping including investing in foreclosures,
the inevitable end game for all real estate investors should be the
funneling of those profits into an ever increasing holding of rental
properties. For example, the strategy our company uses is a rather
aggressive blend of asset generation through flipping various
properties, and then a direct funneling of a set percentage of those
funds into income generating rental properties. The percentage itself
changes with the market.
Continue reading How to Find and Buy Rental Properties.
