Beginner’s Mistakes to Avoid in Real Estate Investing

foreclosure-opp4Real estate investing is the newest, shiny toy in town. Every player in the business of investing wants to be a part of this huge market. With an increasing number of people turning to real estate to maximize profits and make long term investments, or even simply to be able to work commercially in this field, it is easy to make mistakes that could cost you.

Not everyone is skilled and trained to be a real estate investor, and you don’t want to make errors in your business that would burn a hole through your own pocket or disappoint your clients.

Jeff Adams believes in educating beginner investors so that they may always stay on track and in this line of business, and make successful deals that would profit them. However, there are some rookie mistakes that beginners make in the real estate arena, and we’d hate if you make them too.

Jeff Adams stresses on exactly what you should avoid as a beginner in the real estate arena.

Speculation
Most beginners feel they have the know-how to speculate and invest and end up making no profits. Start small. Start with homes, land and below market properties that will bring in a flow of cash.

Getting Your Emotions Involved
Don’t let your emotions drive your decisions. Beginners tend to make impulsive decisions at the very sight of property that looks good from the outside and ignore the necessity to study the details making business out of it.

Burning Holes in Your Own Pocket
Real estate investing is an OPM (Other People’s Money) industry. Don’t give away your own money in any deal. You want to be able to have enough saved if a not-so-pleasant surprise come’s your way.

Building a Team
Beginners should try to start with DIY principles in this business. There are a lot of hungry investors out there who might try to cheat you with the disguise of being on your side. DIY investors are more successful than teams. Also, it is tough to work with investors who’ve been in the industry as they do not like taking advice from anyone, and are used to working by themselves.

Quitting your Day Job
You shouldn’t let real estate investing get in the way of daily tasks. Complete your important daily tasks, and start with treating real estate investing as a part time job. Don’t let investing become your only job, especially if you aren’t sure yet if you’re cut out for it or not. You don’t want to fall hard one day, and find you don’t have a job to help you back up.

Underestimating the Importance of Math
Real estate investing is not rocket science. But you cannot deny the fact that it is a numbers’ game. Remember to always work with operating numbers and not potential numbers. Verify all incomes and expenses and you’ll never go wrong.

By avoiding simple mistakes like these, you can prevent huge losses and only grow as a real estate investor.

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Understanding Foreclosures

real-estate-alternativesForeclosures Made Easy in 5 Stages

If you pursue a keen interest in real estate, the term ‘foreclosure’ will immediately ring a bell. For the ones who may not be very well-versed with this arena, foreclosure implies a legal procedure wherein the lender lays claim on an asset that was used as collateral against a loan, the repayment of which has been discontinued or defaulted.

Take a look at the following terms in order to understand the concept of foreclosures:

Equitable Right of Redemption
When a borrower draws a loan from the lender, the courts of equity grant an ‘equitable right of redemption’ to the borrower. As long as this right exists, the lender cannot be completely certain that he can lay a claim on the asset that was used as collateral against the loan. Hence, in the event of a foreclosure, the lender ‘closes’ this right of redemption to obtain a legal and equitable right on the asset.

Security Interest
This is an agreement between the lender and the borrower. It discusses the right of the lender over an asset depending on the performance of the borrower during repayment. If there is a payment default, the lender is entitled to seize or sell the asset to recover the debt.

Non-Recourse Loan
Also known as non-recourse debt, this is a type of loan secured by collateral, usually a real estate asset. The borrower is not liable to any amount beyond the value of the collateral. If there is a default in the repayment, the lender can only recover the amount that can be yielded through the sale of the collateral. At times, this amount may not cover the debt completely. In the event of such an occurrence, the lender may file for a ‘deficiency judgment’.

The process of foreclosures is legally complex but for the ones involved in real estate dealings, this is quite regular. Real estate mogul, Jeff Adams, has explained the entire procedure in a clear 5-stage walk through:

 

Notice of Default
The NOD is a notice issued by the lender if the borrower defaults 3 or more monthly payments. Usually, such missed payments are settled by the end of the mortgage term giving the borrower some time to recover.

Negotiation
Usually, lenders are open to figuring out a working solution with the borrowers. Some state laws make it mandatory to conduct a negotiation process for 30 days. If all such talks fail, the lender informs all the parties involved and issues an NOD.

Post NOD-filing Period
The borrower gets 90 days to either repay the defaulted amount or work out a solution with the lender. If nothing works out, the real estate property will continue into foreclosure.

Trustee Sale
At this stage, the homeowner / borrower can work out with a trustee to check if a short sale is feasible. However, the lender has the right to sell the property right away or refuse negotiation.

Auction
This is the final stage wherein a foreclosed property is sold off by the lender to the highest bidder.

Jeff Adams believes that the current real estate scenarios make investment in foreclosed properties an excellent option. However, he recommends doing this through a reliable foreclosure agent.

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How to Tread Real Estate Tax Investing Without Going Auctions

Jeff Adams Real Estate

Jeff Adams Real Estate

If you need a more secure future, begin constructing a real estate portfolio with property tax contributing. Anybody that is willing to figure out how he/she can turn into a beneficial real estate investor in tax sale- particularly in the present economy can definitely make good profits. Here are the following tips by which you can begin purchasing real estate properties without going to the tax closeout for $200.

1. Get the tax deal out of your head. In the present real estate market, most properties at tax deal sell for near retail esteem. Between new bidders and vast tax firms, real estate properties quite often sell for near what they would available. By the way – if you did win the sell, it would be on a property you haven’t seen the inside of. This is all fine, but you’re going to avoid these issues of property tax investment so as to contribute outside of the foreclosure deal.

2. Wait for a couple of months before the end of the actual redemption period. According to Jeff Adams real estate guru, home loan organizations will have safeguarded the mortgaged properties at this point, so all that is left is liberated property. The remaining proprietors likely don’t want to pay the taxes, for reasons unknown. This is an extraordinary time and circumstance to discover real estate proprietors who are willing to sell for a less amount of money.

3. Discover the proprietors. Weave through the social networking sites, Google, free searches, and skip-following sites make this a simple thing to do on the web. After that, when you have made a list of certain proprietors, call or email them. Making contact by means of telephone is normally your most solid option. This is one of the major real estate investing tips for the property tax investing.

4. After that, converse with the proprietor about the deed. Check whether they’d be willing to deed the property to you, since they aren’t going to keep it – and offer a certain amount of money for the exertion. This is it – they’ll say yes majority of times, and you’ve gotten a deed for $200. It is not really a difficult task than you think.

5. Sell or pay the taxes on the property. If you need to keep the property, it is very good option, just pay the expenses for some maintenance and lease it out or live in it. Alternately if you don’t have the money, value the property low and offer to another real estate investor. In any case, you will be the one who makes the benefits. In case you are wary, try this strategy for property tax contributing for yourself.

You will be amazed what number of deeds you can get in such a process. It does not require a huge amount of money to start off and there are very less possibilities of risks involved in such transactions.

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Building a Buyers List for Your Real Estate Investing Business

brighter_real_estate_future_Venturing into the world of wholesaling can be a very lucrative decision. If there has ever been a time when buying and selling houses is proving to be profitable, it is definitely right now. One of the most important steps to take before you begin the wholesaling process is building your buyers list. It is crucial to have a list of investors already in place for a variety of reasons. It determines what areas of town you should focus on, it ensures that your houses will sell quickly, and it keeps the cash flow positive.

Having a variety of different types of real estate investors can prove to be invaluable.   Making sure to include both high-end and low-end property landlords, contractors, rehabbers, new and seasoned cash buyers, as well as bargain buyers and wholesale buyers in your list puts you in a position to sell houses at every level.

There are several ways to go about finding real estate buyers for your list. Begin building your list of buyers by marketing to the masses. Placing ads in the classified sections of the newspapers and also replying to current classified ads are good ways to start. Sending direct mail to mortgage brokers and realtors can and connect you with potential real estate investors.

Another way to network with potential buyers is by visiting your local Real Estate Investor Association (REIA) clubs. Use your business cards and get as many business cards of others as you can. Visiting local churches and letting the priests, pastors, etc. know what you do and offering your help to parishioners and members of the clergy is another way to connect with possible buyers.

Take advantage of the massive resources technology has to offer. Place ads in online classified sections, Craigslist, and eBay. Peruse specialty websites such Home-Buyers.com, Buyers.com, FindMoreBuyers.com, and We Buy Houses.com. A great resource for finding non owner occupied leads and wholesale buyers is Listsource.com. Leads for landlord type buyers can also be generated via websites such as Socialserve.org or by just Googling the public housing authority for a specific area and viewing the section eight units.

Other buyers can be found on websites such as Kijiji.com, and Backpage.com. Take part in online forums and websites specializing in real estate. Peruse websites like Craigslist and eBay. Join and visit social networking sites such as Facebook, MySpace, and Twitter. Media marketing on television and over the radio is another way to generate leads.

When you do get responses from possible real estate buyers you need to make sure you ask them the right questions to establish your relationship and secure the potential for future deals. Knowing the right questions to ask is key. Besides asking for general information such as name, telephone number, and email address, you should also ask for what areas they prefer and if they can close with cash immediately.

Asking what their price range is and if they would be interested in future deals is beneficial. Investors should also be asked if whether or not they are interested in rental properties and rehabbing opportunities. Inquiring about specific criteria will allow you to create a more clearly defined list of buyers in your database.

Building a buyers list is an ongoing process and should be constantly monitored, refined, and growing. When the list has been established, it is time to find the deal and the money will come.

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Around & Around We Go

predictions_2If you have currently decided to invest in the vast opportunities available in real estate at the moment, the first thing to consider is that you need to have your financing securely in place before you can move forward. Now is an awesome time to invest, as there are so many bank owned properties, foreclosures, and pre-foreclosures out there.

Even though it is December, it is very much apparent that people are basically not able to afford the homes they originally purchased and are losing them left and right. If you have the right funding in place, now is definitely the time to invest and there are a variety of ways to go about when seeking to secure a deal.

Many real estate investors have been recently establishing their financing through revolving accounts. Whether it is through a bank or a credit card, revolving accounts have increasingly become more substantial in the buyers’ market. A revolving account is a type debt associated account where the balance that is outstanding does not have to be paid in full. Rather it is paid in installments, usually on a monthly basis. The borrower is required to make a payment that is dependant on the balance on the accounts. These payments are generally calculated with minimum interest rates and also with no property reduction included.

What a revolving account involves are the customer, the billing cycle, a credit card, and a creditor. The customer is the borrower who has accepted the account and all of the conditions associated with it. The billing cycle is the interval between each billing cycle and when each payment is due. The credit card, whether it is through a bank or other credit card company, is the actual confirmation of the money loaned. It can be in the form of and identification, a check, or other written request that allows the customer to obtain access to the revolving account.

A creditor is the authorized lender who honors the loan amount or extends the credit limit amount. A creditor can be a bank, credit card company, or other party acting on the lender’s behalf. An agreement is established between the lender and the borrower, or customer that provides for the use of the funds.

One such revolving account is a home equity line of credit (HELOC). Qualification for such a loan is a direct result of the amount of equity a homeowner has to offer. He/she can use this home equity as collateral on the loan. It is basically a bank credit card that is secured by a mortgage or deed of trust on the borrowers property. Many times it is taken out as a second lien on an already existing loan.

In addition to assisting individuals dealing with debt consolidation, financing via a HELOC is also beneficial to real estate investors, especially those purchasing real estate owned properties (REOs) and properties in foreclosure. Although it is often more of a high interest loan, it does offer the advantage to the borrower of receiving money fast. One major component to remember if opting to receive financing through a home equity line of credit though, is that it is directly attached your property, and failure to make the payments will inevitable result in loss of your house.

The most commonly used revolving accounts are those available on credit cards. A revolving credit card account incorporates a type of credit that does not define a fixed number of payments. Using credit cards to secure financing is another option that has proven useful to many investors. Credit card holders have the choice to either take out a cash advance or even borrower money from their accounts with checks.

It is genuinely an easy and uncomplicated process, but tapping into the funds that are available to you on a credit card does have a downside. This is because it usually requires a high transaction fee and/or interest rate. On the other hand, advantages of obtaining money in this way include allowing the customer twenty-four hour access to his/her funds.

Also, because the loan is an unsecured loan, other costly factors such as title insurance, appraisals, and inspection costs are eliminated. Receiving financing using this method would be the most cost effective in a real estate investor was planning to incorporate it as a temporary means to an end.

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A Complete Guide for All beginners in Real Estate Investing

wealth-creation2Settling on your budgetary objectives for your real estate investing is your initial phase in beginning a decent business. Do you need a steady month-to-month pay? Are you setting up your savings for retirement? Are you building up a portfolio to use for your kids’ education in the coming years? To meet your objectives, you have to make the correct strategy in the real estate venture.

One way to make some quick money, irrespective of the fact that you don’t have any cash, is finding extraordinary arrangements and offering them to different financial specialists. Real estate investors are continually searching for beneficial arrangements, and if you can offer them some assistance with finding them, they will either purchase the agreement from you, or may pay you a finder’s charge. Register with nearby real estate investing clubs and associations for possible accomplices.

If you need to build up a month-to-month pay, the most well-known investment technique is purchasing real estate properties. It will be essential for you to figure out the cost of the property and the rental pay that can be generated from the property. You need to know what can be your possible expenses for the home loan, insurance, duties, and also the repair spending plan.

One of the major real estate investing tips is– you need to purchase properties which will return more in month-to-month rental installments than the expense of owning the property.

cash-buyers4Most of the times, not purchasing the prime properties and doing minor repairs and touch-ups can make a solitary family home an extraordinary real estate investment property. Your own particular nearby neighborhood may not be the sultriest range for investment properties, so you may need to venture into different neighborhoods and groups to locate the right blend of rental costs, and minimal effort properties.

According to Jeff Adams real estate specialist, rentable houses do have one extra cost, which numerous financial specialists disregard on their first buy, their time. A few occupants can be demanding, while others might pay the rent slowly; and even others quit paying completely and they must be expelled. Picking occupants correctly decreases these issues; however you will always have a few difficulties. If you incline toward not managing occupants, you might need to investigate different choices in real estate investing.

Another famous investment procedure is flipping properties. In this technique you purchase real estate properties under business sector value due to the nature of the property, and you make the important repairs and remodels before selling for a benefit. You might require an experienced professional for your financial plan.

You have to consider all parts of your remodels and renovations, and every single expense to ensure the investment is liable to give back a sizable benefit. Some real estate investors are in for the whole deal, and purchase properties for a more extended time frame, depending on rising costs to expand the value of the property before offering for a higher benefit.

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New 2016 Marketing Strategies for Private Real Estate Investors

foreclosures-3Advancement and usage of real estate advertising systems is an important piece of purchasing and selling houses. Without some kind of promoting plan it is difficult to find real estate properties available to be purchased or purchasers who are prepared to buy. Whether attempting to purchase or sale private homes, business properties or crude area, advertising is the way to achievement.

The primary phase of real estate investing and marketing includes adding to a general arrangement. The plans for marketing offer investors some assistance with establishing their target market and recognize the purchasing propensities for potential customers. People inspired by private properties will have diverse needs than those purchasing commercial real estates.

Retired couples will have distinctive housing needs than newly wedded couples or families with youngsters. For selling properties, real estate investors, must assemble as much data as possible about their customers and the business sector.

A standout mistakes amongst the most real estate investors make is to gear the promoting materials around their own triumphs. The principal guideline for any promoting effort is to expel the marketer from the overall equation.

Despite the fact that the customers may be awed that an investor has 20 years experience or closed a lot of real estate bargains, they truly need to know how the financial specialists can take care of their issues or offer them some assistance with buying or selling property. Thus, a major real estate investing tips is, advertising materials to address speculators take care of issues and overcome challenges.

The most ideal approach to begin is to make a list of normal issues purchasers regularly confront. After the lists of issues have been created, make a list of how your organization can tackle every issue.

These may incorporate the financing alternatives for purchasers with terrible credit and the individuals who have recorded bankruptcy or lost their home to dispossession. Realty promoting materials can offer financial specialists some assistance to establish trust and create connections how they can take care of issues.

Another essential part of marketing plan in real estate market investing is to create the follow up methodologies. Individuals rarely settle on critical money related choices just by reading an advertising pamphlet or direct mail advertisement. In most times, it takes five to seven contacts with an individual before real estate arrangements come to pass.

According to Jeff Adams real estate guru, realty promoting arrangements need to incorporate the different devices financial specialists can use to pull in purchasers. These may incorporate building up a website; conveying letters, deals flyers, or postcards; follow up marketing systems; and promoting techniques, for example, bulletins, signage, park seats, Web advertising, or Classifieds advertisements in neighborhood daily papers or realty magazines.

Real estate advertising is an on-going procedure, so financial specialists need to survey their promoting endeavors on a quarterly premise and make fundamental alterations. Innovation is continually advancing, so financial specialists must attempt to stay updated on the business sector patterns. Real estate investors need to consider hiring specialists to help with showcasing materials.

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