Real estate > Finance Your Real Estate Investment Properties

Finance Your Real Estate Investment Properties

by: Peter Dobler

Unlike traditional residential real estate mortgages, real estate investment financing is way more creative and offers more options than you think. The golden rule in real estate investment is OPM (Other People?s Money).

I have enough money; shouldn?t I buy my real estate investment for cash? No, I absolutely advice against investing large sums of cash into a single real estate investment. There are two reasons why not. First, you give away most of your profits by not leveraging your real estate investment. Second, it is far too risky to put every egg into one basket.

Let me explain the leverage issue for a moment. I will give you an example of a $100,000 investment property that typically increases its value (appreciates) by 7% average a year. Maybe more, maybe less depending where you live. Paying all cash for this property will yield in a 7% appreciation profit plus the net profit from renting the place. Now you?re looking at roughly 15% of returns.

If you?re conservative with your investments you might be satisfied with this kind of a return. These days you might get equal or better returns with other conservative investments minus the hassle of being a landlord. But you don?t mind being a landlord, because you understand and utilize the leveraging method with financing your real estate investment.

With the example above you will make roughly $15,000 a year in profits from your investment. Now let?s take a closer look at what leveraging can do for you. Today a typical real estate investor can get financing as high as 95% - 97% of the purchase price. Occasionally 100% financing is available as well. But this would be totally unfair in this example to compare this with all cash purchasing.

15% return sounds like a lot, but wait till you see this. Let?s assume that the rental income will cover all your expenses including the mortgage payments. Taking the same example from before your net return would be the 7% appreciation profits of your property. This would translate into a $7,000 a year profit. With a 95% financing in place you would get $7,000 return on $5,000 (your 5% down payment) invested. This is a whopping 140% return on investment.

With the same $100,000 you can go out there and get 20 investment properties, finance 95% of it and make an amazing $140,000 profit a year. This beats the projected $15,000 profits with an all cash transaction any day.

Of course you will have a lot of trouble to get financing for 20 properties in a single year. Typically 5-6 new rental property mortgages are the maximum lenders will allow these days. This is the signal to get creative with your financing structures.

In this case sellers financing would be your key to achieve your goal of maximum leverage of your investment dollars. Despite the message from all these late night infomercials, seller financing is harder to get than they want you to make believe it is.

It all depends on the seller?s ability to offer seller financing and the seller?s motivation. Only about 1 out of 20 properties for sale are able to get seller financing. That means that there?s no mortgage balance on the property. From this narrow selection the seller must be motivated to sell under these conditions. This could be tax reasons, time constraints, personal reasons and many more.

As you can see this translates into a lot of work to achieve your goals. But let me tell you one thing. This separates the tire kicker real estate investors from the real go-getters. Wouldn?t you agree that a little bit of hard work and determination is well worth it to build a real estate empire?

I think it is well worth the trouble and hard work. At the end of the day you keep building your real estate investment portfolio and sooner than later you will be able to cash in.

Sincerely,

Peter Dobler

About The Author

Peter Dobler is a 20+ year veteran in the IT business. He is an active Real Estate Investor and a successful Internet business owner.

Learn more about real estate investments at http://www.suncoastrenttoown.com or send a blank email to mailto:suncoastrenttoown@getresponse.com

Sedona Arizona Real Estate is Red Hot

Sedona Arizona Real Estate is Red Hot

by: John R. Barker

The Sedona, Arizona real estate market is a small market but full of beautiful, luxury houses

Being a first time visitor in Sedona, Arizona is quite a glorious experience as the beautiful sites and mild weather of Sedona can easily make a strong impression on everyone who has never visited Sedona before. In time, many of these visitors will want to settle their primary residence here or maybe they will think to buy a beautiful second home for their families here in Sedona.

Houses are available here for every need and even for the most luxurious tastes. Sedona real estate market is an excellent market for investments; no matter if you invest in a single family home, in a rental or retirement property, or in a commercial area, you will be making a good investment.

If you think of buying a luxury house here in Sedona, Arizona all you have to do is search for a Sedona real estate...

Sedona Arizona Real Estate is Red Hot

Real estate > Sedona Arizona Real Estate is Red Hot

FSBO Real Estate

FSBO Real Estate

by: Steve Gillman

Buying FSBO real estate, or houses for sale by owner, has its own particular problems and opportunities. Dealing with an uninformed seller who thought he knew enough to handle everything by himself can be frustrating, but it can also be very profitable if you are prepared. First you need to understand the FSBO seller.

People try to sell a house on their own for one primary reason: To save the sales commission. Unfortunately for them, they usually underestimate the cost and complexity of going it alone. They'll often get frustrated and tired of the process, and be ready to drop the price and be done with it. If you help them solve their problems, your reward can be a good price on a good investment. Just keep the following in mind:

1. A seller isn't an agent. You have to be more careful in what you say and ask. Avoid negative comments about the house. Like it or not, the truth is that it's difficult to...

FSBO Real Estate

Real estate > FSBO Real Estate

Real Estate - 5 Ways To Advertise

Real Estate - 5 Ways To Advertise

by: Jay Bauder

With the introduction of new products and the growth of the purchasing power of the people continually escalates, it can be said that the advertising industry became fully energized. That's why even with the dawn of the new technology, advertising still continues to dominate the business world. As most business people asserts, business can never succeed without advertising.

And so, in the real estate business, advertising remains to proliferate with more ways that could increase productivity.

However, for those who still don't know how to maximize the potential of advertising in increasing their real estate sales, here are some ways to brood over:

1. Web site listings.

Real estate businesses may consider the benefits of advertising their products or services online. In this manner, they could even increase their market share by accessing those who cannot be reached by simple...

Real Estate - 5 Ways To Advertise

Real estate > Real Estate - 5 Ways To Advertise

For Sale By Owner: Priming the Real Estate Pump

For Sale By Owner: Priming the Real Estate Pump

by: Chris Robertson

Perhaps you've decided to relocate. Or maybe you've outgrown your home and need to find homes for sale that will accommodate your growing family. Or perhaps your children are grown, you've made the decision to downsize, and are in the market for real estate that will better suit your needs. Or maybe you've decided to take the leap, buy some land, and build the home of your dreams. Whatever the reason, you need to sell the home you currently own, and you've decided to bypass real estate agents and go the "for sale by owner" route.

Before taking the plunge and listing your home, there are a number of steps you should take in order to increase your home's market price and save yourself future hassles.

Just as you would dress appropriately to make a good first impression to those you meet, you want your home to make a good first impression on potential buyers. This means...

For Sale By Owner: Priming the Real Estate Pump

Real estate > For Sale By Owner: Priming the Real Estate Pump

Real Estate, How Much Should I Pay For This House?

by: Lou Castillo

We probably answer this question for someone a couple times every week. The problem is that they don?t have a good formula for determining the most they can pay and still make a profit ? so they?re scared to make any offer. Here?s what we use for single family homes:

The (MAO) Maximum Allowable Offer is calculated by first determining what the house will be worth after renovation - the ARV (After Repaired Value); less the rehab dollars required; less the Buy/Sell/Hold (B/S/H) costs; less profit margins.

MAO = ARV ? Rehab ? B/S/H ? Profit

So let?s break that down a little further. To determine the ARV, study comparable sales data. Comparable sales are those properties which sold in the last 6 months to 1 year, and within ? to 1 mile from the subject house. But other factors must be considered as well. The more characteristics between the properties that are similar...

Real Estate, How Much Should I Pay For This House?

Real estate > Real Estate, How Much Should I Pay For This House?

Should You Use an LLC for Your Real Estate Investing? Probably--and Here's Why

by: Stephen L. Nelson, CPA

Should you use an LLC for your real estate investing?

Accountants and attorneys love limited liability companies. But do limited liability companies?LLCs for short?really make sense for real estate investors. Probably they do for two almost unknown reasons.

The Big Legal Benefit of an LLC: Limited Liability?

The big legal benefit of an LLC is that limited liability companies provide all the same liability protection as a corporation?but with much less red tape. A regular corporation, for example, requires regular stockholders meetings, a board of directors, regular board meetings, and of course records of all these activities and bodies. But a limited liability company doesn?t.

This legal liability protection provided by an LLC can be extremely valuable. One local attorney I often collaborate with, for example, tells his...

Should You Use an LLC for Your Real Estate Investing? Probably--and Here's Why

Real estate > Should You Use an LLC for Your Real Estate Investing? Probably--and Here's Why

Real estate pool table Finance Your Real Estate Investment Properties

Get Real-time Adsense Channel Stats And Find Out Which Ads Are Being Clicked

by: Subhendu Sen

If you have multiple sites or multiple directories in your site for different subjects and you have placed Adsense codes in your site, I am sure you would like to know: (a) from which site or directory you are earning the most / least, (b) which Adsense ads are being clicked and (c) from which page?

CREATE CHANNELS FOR EACH SITE

To get separate stats for...

Get Real-time Adsense Channel Stats And Find Out Which Ads Are Being Clicked

Real estate > Get Real-time Adsense Channel Stats And Find Out Which Ads Are Being Clicked

Buying Versus Leasing A Car

by: Jeff Neilan

If you are considering whether to buy or perhaps lease your next car and which would afford you the best deal, most consumer experts agree that from a purely financial aspect you will be better off in buying your next car.

Of course paying cash in full is the best possible scenario since with this option you would avoid any type of finance charge. But for the vast majority of us and for the scope of this article...

Real estate Buying Versus Leasing A Car

Real estate > Buying Versus Leasing A Car

Real estate

How To Get Broadband

by: Neil Shevlin

Getting broadband services getting easy, but research still required

Broadband Internet services have become more the norm today, unlike the dial-up days of the late 1990s. With greater amounts of information needing to travel at faster and faster speeds over the Internet and the greater number of telecommuters every year, the need for broadband Internet has stretched beyond the board room and into the home office....

Real estate dsl

Real estate > How To Get Broadband

Feng Shui Improves Productivity in Cube Farms!

by: Troy Doucet

When decorating work cubicles, a little knowledge of Feng Shui can go a long way. Here are a few helpful hints that will improve your day in the cube. By implementing these simple changes, you will immediately feel dramatic improvement to your work day.

The biggest Feng Shui problem with cubicles is that your back is to the entranceway. You are unable to see when people approach the doorway...

candles

Real estate > Feng Shui Improves Productivity in Cube Farms!

How To Choose The Proper Bicycle

by: Jeff Slokum

There are many different types and styles of bicycles. You will need to decide on the type of biking you will be predominantly doing in order to help you narrow down your choices. Below are just some of the types of bicycles available on the market today.

The first bicycle we will mention here are what are considered by some to be comfort bicycles. These are the type used by most weekend recreational bike...

tires Real estate How To Choose The Proper Bicycle Finance Your Real Estate Investment Properties

Real estate > How To Choose The Proper Bicycle