Real Estate
Real Estate Tips For Beginning Investors
REAL ESTATE Investors behavior modification leads to a massive 800% increase in rate on investment !! The majority of residential real estate investors invest with their hearts instead of looking at their investment as a business, a business that needs to provide cash flow to cover the operation, these investors are content with a return often in the 2% range or even worse In negative territory. When asked the investor will say that they are looking for capital gain and tax benefits so are comfortable with an investment that is showing a negative return.
This form of investment strategy is endemic in residential real estate investment, and investors are conditioned to believe that this is good. To maximize your profit take note of and avoid the following pitfalls this will require a major adjustment to your thinking and investment behavior.
Behavior pitfalls to modify:
1.Do not fall in love with your investment property: Many property investors make an unnecessary mistake when they start their careers in property investment.They look at their investment property in the same manner and with the same feelings as they do when purchasing their own Home to live in and this is a critical mistake as emotion rather than business acumen takes control, and the principles of investment fly out of the window. Investing should encompass the principles of a sound investment and investors should look at the investment as a vehicle that will deliver the results that they are seeking seamlessly. Let me explain again, when purchasing an investment property it should be all about the numbers and nothing about the emotions, look for the properties financial statement. Certainly let emotions dictate the purchase of the home you intend to live in where, you would ask yourself emotion charged questions such as I "like" the house, will I "enjoy" living in this neighborhood, and numbers will if at all figure last , Liking and enjoying are all emotionally charged issues.
2. Change your behavior and start becoming a successful investor by evaluating the property investment by it's numbers it's financial statement. Start asking your self questions like "Can I purchase this property at a discount, or at a whole sale price", "Is there enough room for a healthy spread if I use this property as a cash flow tool", "How much of a Spread can I get over and above the cost of money to purchase this investment ". TIP: Keep emotions out and the numbers in, you will be glad you did.
3. Do not be Greedy: A major pitfall especially for quick cash investors, is the danger of becoming greedy, very greedy.They get a great wholesale deal on their property investment and then try and flick it for well above retail, instead of at Or slightly below retail.This stymies the sale and the hapless greedy investor has to hold on to the property for a greater length of time and involuntarily will end up taking less than they could have, if they had sold at or just below retail.Greed Costs you more than the gain so quit being greedy. Listen being greedy especially on quick cash deals will come back to bite you.
4. Remember the beauty of quick cash is the quick part. Price your quick deals to move quickly, you will end up making more money than if you were being greedy.
5. Why are some investors susceptible to being greedy? It's because they subconsciously fear that this deal will be their last. I call this the scarcity mindset. Do not fall prey to that. There are plenty of deals out there and this one deal will definitely not be your last, unless of course you want it to be. Start cultivating an abundance mindset, instead of a scarcity mindset move forward by pricing your deals to make you money and sell quickly.
6. Thinking you know it all: No one likes a know it all …. do you? This is an awful pitfall that many investors fall into and is particularly precalent when it comes to investing in real estate, and gets worse after you have been investing for a while. They believe that they know all there is to know about real estate investing.
7. Listen, the market is always changing just because something worked yesterday does not in itself mean that it will work as well today, not only is the market changing but so are the rules and the laws governing real estate.
8. Real Estate is always in a state of flux.There is always something new to learn in the real of active real estate investment for profit. Perhaps the learning curve has gone for those that have learned the basics of real estate investing, maybe there is not as much to learn, rest assured you will never stop learning and there will always be surprises in store for the know it all.
9. Instant Gratification: Remember there is no free lunch and definitely no easy way to wealth.It takes time, effort and hard work, sorry you can not sit on your butt and wish or expect someone else to make you wealthy, it is Just not going to happen. Unfortunately far to many people from all walks of life and sadly those that should know better, all want the "instant fix", the "silver bullet", "The secret", to making millions. They all have one thing in common they crave for the "secret" and even if there was a secret, they would want some one else to do it for them.
10. Sorry to disappoint there are no secrets, just common sense, effort and following the principles of sound investing, now this is where the vast majority fail they do not follow the principles of sound investment and if they did start following these principles, after A few successess they look at taking short cuts which invariably cause them hardship, you often hear these people wail why me … If you seriously want to be financially free and wealthy treat your investment as a business and ensure it creates cash flow.
11. These four major psychological pit falls plague potentially successful investors, to overcome them you need to modify your behavior starting with the way you think.
Not convinced? Want to know some secrets that the wealthy use constantly?
Secrets disclosed below …..
1. Harness your positive thoughts and make them a reality. What you think so it will be
2. Prepare to go beyond your present circumstances.
3. Nurture the ability to believe in your self
4. Set and achieve goals
5. Learn how to have a go
6. Take responsibility for all your actions, stop blaming others when things fail or do not happen as planned
7. The willingness to do what it takes
8. Buy property as a business and not tolerate loss
9. Buy property correctly and never pay to much
10. An aversion to debt, borrow only what can be comfortably repaid and still make a profit
11. Run your investments like successful businesses
12. Speak to and follow successful people
13. Have a positive mental attitude.
14. Take responsibility for your actions, if it goes to be it is up to me.
As you can see there is not much that separates the wealthy from the poor, no it is not the amount of money. I could give a poor person a million dollars and by months end they would be poor again, because they have not developed the fourteen points above. Being wealthy is all about you, your thoughts, your beliefs, your attitudes towards wealth, riches money and your self. Your mind is the secret to you being wealthy or poor.
Real Estate
Miami – A Great Place to Buy Real Estate
Miami has evolved into a cosmopolitan wonder city under the sun. Famous for its great beaches, this city has also earned a reputation of being a sexy, marvelous and trendy place to live. From amazing golf courses like the one at Crandon Park in Key Biscayne to the Miami Metro Zoo, this beautiful city has something to offer to everyone. Owning a piece of paradise is a dream within reach of locals and foreigners as well. People from all parts of the world have already taken advantage of the great opportunities available today in the marketplace.
Miami has some of the most amazing real estate developments like the astonishing Santa Maria located in Brickell, or the unbelievable towers of Icon Brickell. Some other exclusive and impressive Miami condos include, the Jade at Brickell, the 900 Biscayne in downtown Miami, the fabulous Trump Palace in Sunny Isles Beach and the astonishing Icon South Beach just to name a few. These modern Miami luxury condos have all the comforts and amenities only found in five star hotels.
The city of Miami has it all, great golf, amazing beaches, a turquoise beautiful ocean, a warm weather, excellent shopping, an electrifying night life, lots concerts, entertainment and sports events at the famous America Airlines Arena in downtown Miami.
Miami real estate buyers are as diverse as the city culture and population itself. Buyers come from all over the globe, Europeans, Latin Americans, and Asians and of course buyers from all around the United States. Some have chosen this beautiful city to have a second home and some have fallen in love so much that they now call Miami their home making it an exciting melting pot to live in.
Real Estate
Real Estate Investor's Secret Weapon
Real Estate Investors have a unique tool in their arsenal that other types of investors do not. One of the oldest tax code sections is 1031. This secret weapon is called a 1031 exchange. It is one of the few areas of the tax code where the US Government allows taxpayers to sell an asset and not immediately pay the taxes. Even State taxes are deferred. The way a 1031 Exchange works is simple. If you sell piece (s) of investment property, and you are want to buy of another piece (s) of investment real estate of equal value, you can defer indefinitely all taxes (capital gains (15%), recapture tax (25% ) and state income tax). This is the benefit: by not having to pay those taxes, you can keep your money (instead of giving it to Uncle Sam) and smartly reinvest it for yourself to grow your real estate portfolio. 1031 is a free financial tool that let you keep 15-30% of taxes you would have had to pay. In the world of increasing taxes, 1031 is a viable alternative.
There are some guidelines that need to be followed, and I will break them down. First, what is investment real estate? Investment real estate is defined as property used in a trade or business. It could be used to run your office or it could be rental property. One of the nice flexible features of 1031 is that all real estate is exchangeable. This means that a home can be exchanged for a condo or a piece of land can be exchanged for a commercial property. I use the rule of thumb that any property with a deed can be exchanged for another property with a deed. The other nice feature is that you can sell one property and purchase more than one replacement property or vice versa.
There are three main rules that investors need to know about 1031 exchanges. First of all, you must use a Qualified Intermediary (an Independent Middleman) to help facilitate your 1031 exchange. The QI, as they are called will do many things including prepare the Exchange Agreement, Escrow your 1031 proceeds, and most importantly make the exchange go smoothly. The QI must be hired prior to the closing of the relinquished property. Secondly, the Exchangor (the person doing the exchange) has 45 days from the closing date of the relinquished property to identify the replacement property. Identification means to list (not go under contract) up to 3 properties of any value and send them to the QI. Finally, the Exchangor has 180 days (from the date closing on the relinquished property), to close on one of those three identified replacement properties.
I don't want to over simplify 1031. Please consult your tax advisor in addition to your Qualified Intermediary to analyze your exchange and to be sure you are making the best tax decision. I do believe the rule of thumb should be if you want to keep your money invested in real estate, then 1031 is a tool you must consider.
1031 can be a potent weapon for the smart real estate investor. There is nothing worse than having a client not consider 1031 or not have their real estate professional tell them about it and the relinquished real estate closes and the client changes their mind. After the relinquished property closes, it is too late to do an exchange. 1031 is an efficient tool for an investor to build their portfolio. Plan your transactions and watch your real estate fortune grow.
Dave Owens, CPA, CES is the managing Member of Entrust 1031 Exchange. Dave and his staff have successfully performed over 10,000 exchanges since 1997. Entrust has an arsenal of tax free strategies. Feel free to contact Dave for more information or questions at 239-333-1031 or owens66@entrustfreedom.com .
Source by Dave Owens
Real Estate
How to Become a Successful Real Estate Developer
Real estate investment and development has never been a more popular pastime or career changing challenge; if you would like to learn seven secrets for consistently successful real estate investing through development or you would like to know how you can continue to profit from property even if the market takes a downward turn just read on …
1) Do Your Location Homework – did you know that through successful and sustained location research professional property investors actually continue to profit during a market down turn? It's true – whatever the market conditions you can apply their location research approach to your real estate investments and also make consistent profits from property.
Take the necessary time to learn all about a town or city you're considering for your next property development purchase and discover where the up and coming areas of that town are likely to be. If there are inner-city redevelopment projects planned examine the real estate market in the immediate vicinity, if there are areas that are booming right now examine the immediate neighboring areas for their potential for future prices arises for example.
Do not follow the crowd – have the confidence to buck the trend and get ahead of the curve by positioning yourself in a market that is about to boom rather than one in that has already blossomed.
2) Know What You Can Afford – While it can pay to sometimes speculate never be tempted to jeopardize your own home. Work out your finances and be ruthlessly strict about what you can and can not afford as a down payment, for mortgage costs and for the renovation and redevelopment of your next real estate investment. Only proceed within the confines of your tightly allocated budget and do not be tempted to over extend yourself specifically if competition in the property market is tough and the market is slow or stagnant.
3) Identify Your Target Market – Having identified your next location for property investment identify the types of people who buy into renovated assets in that location. Know who your target market are going to be and what they are likely to look for in a property in that location. If for example you're examining inner-city spaces you might identify that your buyers will be young single professionals and that the ideal property type for these people will be luxury low maintenance apartments – seek out suitable properties with the potential for redevelopment into luxury low maintenance apartments and you will fulfill your target market's brief … seek out large homes with substantive gardens in the area and you will have totally missed the market and potentially created a property that will not sell!
4) Renovation Not Rebuild – Know your budget limits and your personal skill restrictions. Do not consider taking on a property that is in need of a complete structural overhaul when your budget is tight or you do not personally have the time, skills or inclining to do the structural work yourself. Be realistic about what you and your budget can achieve and seek properties that fulfil that brief. Pay to have an independent and complete survey done on any property you are seriously considering buying before making a down payment to ensure that there are no hidden surprises waiting for you benefit the floorboards to eat up your budget in its entity.
5) Manage Your Budget – With your survey in hand you can approach builders for statements and seek out prices for fixtures, fittings, finishes and furnishings. Take the prices quoted and sourced and build your budget. Factor in overwriting mortgage and service costs and labor costs as well as your findings and structure and allocate your money accordingly. Watch every single spend and be ruthlessly strict with yourself and your builder. If at all possible have your builder commit to a contract with fixed finish dates and fees and stay on top of every single penny or cent every single day. At the end of each week tally up your outgoings and expenditure and ensure you're not exceeding your budget. If you're overspending rein it in or you will have to shave it off other areas of the development. Remember never to scrimp and save on finishing touches and always give yourself a realistic fall back fund in case of emergencies.
6) Appeal To The Widest Market – Forget putting your personal stamp on any property you develop – you are not going to be living in the property! You should already have identified your target market which will give you a good idea of the level and quality of finish expected, now meet those expectations without adding your own personal taste into the equation. By appealing to the widest market or the lowest common denominator your property will be attractive to the majority of buyers making it faster and easier to sell on and profit from.
7) Make Friends With A Real Estate Agent – Your greatest ally when developing property will be your real estate agent. Make friends with these guys and you will build a beautiful and successful symbiotic relationship in which you both profit to the maximum! Real estate agents are a fountain of untapped knowledge about the local market, who is looking for what property in which area, which additional features cost little to add but which push up the asking price and what a buyer expects from your particular property type. Get the facts from your real estate agent and then apply their advice. You will create a property they can market for top dollar and to the widest market – you will make more profit and they will make a larger commission including a beautiful and lasting friendship!
Finally, remember that when you've bought, renovated and sold on you'll be looking for that next property opportunity and any real estate agent who you've worked with well will be on the hunt for suitable real estate for your next investment making any identical purchases that much easier to source.
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