Sudeira Real Estate Investing

Real Estate Investing, Consulting and Education

Posts Tagged investing

What type of Real Estate Investor are You?

Feb 9

Posted by Cliff in Real Estate Investing | No Comments

Guest Post by:  Laurel Lindsay

Real estate investing can be financially rewarding if you have a clear understanding of the ins and outs of this kind of business venture. If you want to invest in properties, then it is essential that you understand the different methods by which you can generate profit. There are several investment options, and it is important that you are able to make an informed decision on which particular option is suited for your financial situation. Your foremost concern will be the establishment of your investment goals and targets. Your potential benefits in owning real estate properties must be consistent with your goals and objectives.

You can opt to become a developer if you plan to go for real estate investment. As a developer, your main focus shall be on development properties. You will purchase the land and build structures on it. If you are going to invest on a land that has an existing structure, you may decide to tear it down and replace it with a new structure. You may also expand or improve the existing structure. This is the type of investment that requires thorough and careful planning. It is also essential that you have a strong background and understanding of development, engineering and construction laws.

As a real estate investor, you can specialize on distressed properties. Your investment options shall include properties that are about to be foreclosed, under foreclosure proceedings and properties that were already foreclosed. This is a good investment option as there are a lot of properties that are sold way below their market value. However, you need to have a keen eye when it comes to assessing the overall state of foreclosed properties. You must also have a clear understanding of the legal aspects of this type of real estate deals. In most cases, you will have to seek the services of a lawyer who has the experience and training in handling such types of transactions.

A fix-upper property is another investment option. This is the type of property which you will have to fix to add value before it is sold for profit. Among all the options available to real estate investors, this is the one that can deliver financial rewards quickly. With proper assessment of the condition of the property and reliable estimate of the cost of repairs, you can be able to turn a home into a high value property which you can either sell or offer for rent.

You can also invest on properties and decide to hold on to these properties for a longer time frame. You are into long term real estate investment if you are going to retain ownership of properties until the value of the property reaches a certain level. You can opt for this type of investment if you are investing on properties in areas where development is in full swing.

Finally, as an investor, you can rent out properties which you have kept for an extended period of time. While you are still waiting for the right time to dispose of these properties, you may opt to rent them out in order to generate income through property rentals.

These are the major investment options that you can consider if you want to become a real estate investor. These are just the bare essentials of this type of business venture. You have to learn other technical details before you can actually make your initial real estate investment. You must also keep yourself updated with latest trends and developments in the real estate market in order for you to become a successful real estate investor.

Learn how to sell your own house here: For Sale By Owner

If you’re looking to buy a home from an FSBO listing check here: FSBO Listings

Article Source: http://EzineArticles.com/?expert=Laurel_R._Lindsay

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Real Estate Investment – The Top Three Questions on Finding Capital, Answered

Feb 3

Posted by Cliff in Financing | No Comments

Question: I know where the deals are; I just don’t have any credit. How do I get investors?
Answer: If you’re a real estate expert and you know where the deals are, and you’re able to find a deal, whether you have excellent or poor credit, you need to find a partner who has complementary skills to those that you have. A significant part of our program is about putting people with complementary skills together. I recognize complementary skills when I see them, and I want you to be able to recognize what your strengths and weaknesses are, so you can find other people who can fill in the gaps where your weaknesses are. There’s no harm or shame in admitting your weaknesses. In fact, great strength comes from acknowledging where your weaknesses are, because it enables you to fill in the gaps with other people who can collaborate with you, who bring different kinds of skills to the table.

Question: Where are the funding sources for lending products?
Answer: Lending products for successful real estate syndications are available through all of the traditional channels. Banks and real estate lenders are the best providers for these products, but depending on the circumstances, and depending on the nature of the collateral, hard-money lenders might be the way to go. There are many hedge funds in New York and in other places that have tremendous pools of capital that are available for you to tap into. If you do not know how to access these pools, I’m happy to make introductions and recommendations. However, I reserve these for people whom I know well, and for people who come through my programs, because these are prized contacts that I do not want to waste on people who are under-prepared to speak with them in the most sophisticated way.

Question: Where do you get investors?
Answer: This is the hardest part of the real estate game. If you don’t have investors, no matter how great the real estate is that you find, you are going to have a difficult time getting the job done. The best way to accumulate investors is to start small, deal with people you know, and grow your investment opportunities as you succeed and begin to develop an investor pool. There really is a lot of money out in the marketplace, and if you have a great deal, there is always somebody who has the money to fund it. You may have to partner or you may have to share, but the money is out there. So, you never really have to worry that you are going to pass up an opportunity. If you find such an opportunity, call my office and we will talk to you about how to get the job done.

Joel-G.-Block_94228 Joel began his career as a CPA with the prestigious firm of Price Waterhouse. During his time with the company’s Entrepreneurial Services Group, Joel immersed himself in the real estate syndication business. After reviewing hundreds of partnership agreements and preparing as many tax returns, he left Price Waterhouse in 1986 to start his own syndication firm, raising several million dollars in three short years. By 1990, Joel had built a property management firm of more than 40 employees with a portfolio exceeding $100 million. Joel continues to syndicate real estate and other assets, as well as counseling other promoters on successful syndication strategies. He is also involved in film financing and invests in early stage companies and other deals. For more information about Joel Block and his upcoming seminar, visit his site at http://syndicatefast.com/

Article Source: http://EzineArticles.com/?expert=Joel_G._Block

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Flipping homes for a profit, but dear God don’t call it that!

Dec 9

Posted by Cliff in Rehabbing | No Comments

Trashed house that needs to be rehabbed and flipped According to a recent Wall Street Journal article, people are back to flipping homes again.  Which is no surprise to us since we are looking for a homes to work on ourselves.  Prices are cheap, lots of homes are in sub-par condition and if the final price is right, they even sell.

Notice though in that last paragraph I didn’t say we are “flipping houses?”  That is because that phrase has become the pariah of the real estate investment game.  While those of us that do it professionally know what is going on, many end buyers hate us now.  They see us as buying homes they could have had for cheap and making a big profit. 

Flipping isn’t a "job".  They aren’t "professionals". They’re *opportunists* who seek to milk a get-rich-quick scheme.  Most flippers tend to effect purely cosmetic repairs on a house (granite countertops) to make it move fast, while purposefully hiding deeper problems from the unsuspecting buyer.  So, add "scam artist" to the list as well.
Comment from Redfin Forums

While I am sure that may be the case in some situations, I guarantee that a lot of houses also wouldn’t make it into the hands of home owners if rehabbers didn’t work on them first.  The first reason is that we can put up with the bank’s short sale lunacy and pay cash.  Real estate flippers gets deals done and gets homes out of the bank’s hands.  Second is that professional rehabbers put houses back together again.

To be honest, I haven’t looked at a project house yet that was move in ready.  I know some people are flipping homes like that, but it isn’t the norm.  The house just down the street is a good example.  Investors bought it at auction (aka all cash), spruced it up a little bit and then sold it in three weeks, for a profit I would assume. 

BUT, if they hadn’t had ~$300,000 in cash on hand to buy it, that house would have wound up in the hands of the bank and probably still be sitting vacant.  Instead I have a new neighbor that I really need to go say hi to.

So real estate flipping has become a negative term and us real estate investors that do it are not smiled upon as brightly as before.  That is ok, we will keep doing it and making a profit, but if anyone asks I rehab properties, not flip them!

If you would like to know more about how to make money rehabbing properties, contact me today!

 

Photo courtesy of Andy De Maesschalck

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How you can make more money with joint venture real estate deals.

Dec 1

Posted by Cliff in Real Estate Investing | No Comments

Did you know that joint venture investment real estate deals can massively swell your retirement account?  I bet your stock broker has never told you that you can take your investment money and make solid returns by doing joint venture (JV) real estate deals.  With the stock market taking hit after hit and with the real estate market holding a fire sale, now is the time to invest in real estate.  However, going it alone is not a good idea.  You may have the capital required to do deals, but do you have the skill and time?  Probably not, so partnering up with someone that has ‘on the ground’ experience is a good idea.

Joint venture real estate deal makes sense because:

  • You can maximize your investment by working with someone that is experienced in investment real estate.  More experience means less risk and better returns.
  • JV deals mean you have less headaches.  If you are the capital partner in a joint venture, your partner is probably going to be in charge of the dirty work involved with finding, negotiating and disposing of investments.
  • Working with a partner on a investment real estate property opens you up to new investment opportunities.  As you do more deals, you will get more contacts and be offered more opportunities to invest in more projects.
  • Properly executed joint venture investment real estate deals are, at least in my opinion, far safer than investing in stocks, and give better returns.

How is this different from lending money on real estate investments?  As a joint venture partner, you have more to gain.  Instead of just accepting a relatively small amount of interest, you gain a larger share of the profit and can even take advantage of some of the tax rewards associated with owning investment real estate.  Can you say depreciation deduction?

You do want to have JV real estate deals set up correctly, and should be written out and placed in the correct corporate structures.  Doing that will minimize the problems that can occur with partnerships.  In my experience, there are generally few problems as long as everyone’s responsibilities and duties are spelled out in writing in advance.  Communication is essential!

If you are thinking of pulling your money out of the stock market, CDs or money market account and are wondering where to invest it, don’t overlook joint venture investment real estate transactions.  The rewards can be excellent!

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Investors at Fault in Housing Collapse – They weren’t alone!

Nov 9

Posted by Cliff in Housing Market | No Comments

Investors blamed in housing collapse Out of the pile of articles to read this morning is one entitles ‘Investors at Fault in Housing Collapse’.  A catchy title and everyone wants to blame us capitalistic money making real estate investors for the current state of the real estate market.  The truth is that there were dozens of factors that played into the current state of the market.

Investors alone could not have crashed the market!

While it is true that builders went insane with how many units they were producing, and that flippers were everywhere, there are two other places that need to be looked at.  These are the loans that were out and out fraudulent and the loan programs lenders were strong armed into making for the subprime market.

Powered by Jimmy Carter’s 1977 Community Reinvestment Act (CRA) ‘community groups like the now deceased and fully discredited ACORN worked for years pushing banks to make loans available to low income families. Using its ties to the government and the Federal Reserve they forced banks do loans they otherwise wouldn’t have.

The Federal Reserve Board has been ACORN’s “partner” in this endeavor ever since 1977, when the Fed was given responsibility (along with the Comptroller of the Currency) for enforcing the CRA. For those who are not yet familiar with the CRA, which was significantly strengthened during the Clinton administration, it works like this: The ostensible purpose of the Act is to get banks to make more mortgage loans in “minority and low-income” neighborhoods. These loans have been defined by the government as “sub-prime” loans, implying that the borrowers have credit ratings just a tiny, tiny smidgen below the “prime” or highest-credit-rating borrowers. This of course is a farce, as nearly everyone now knows. The Fed keeps track of such loans, and gives each lender a CRA ranking. A poor ranking can destroy a bank’s plans for branch expansions, mergers, and other activities.
The Federal Reserve ACORN Racket

So banks were pushed into making loans to high risk individuals.  Not a great business plan, but banks are a business and if they have to play ball with ACORN and the Fed to stay in the game, they will do what they have to do.  Faced with big portfolios of questionable loans, the banks found ways to repackage them and sell them off to investors.  Shady, yes but not surprising.

Fraud on the street had a hand to play as well!

With low income loans available as well as low-doc and no-doc loans, you know fraud was going to show up.  Not nearly enough light has been put on the number of buyers that were put in homes using totally falsified information.  Sometimes these were actually people wanting to buy a home.  I would be willing to bet though that in the areas with the highest home loan default rate, you will find the highest levels of flat out bogus loans. 

Mortgage Loan Fraud
Written way back in 2007 this article touches on a lot of what has happened with the fraudulent loans and scams people pulled

The number of different scams people played with the banks is amazing and bounded only by human ingenuity.  The lowest of our society will always look for ways to scam and defraud those of us that are actually working legitimately to make a profit.

What is the solution to this whole mess? It will be a while before the scars of this crash heal up, but primarily what we need right now is the government to get out of the business of playing with the markets and for banks to start lending again.  If those two things happen, supply and demand will even things out and we will start moving some of these short sale homes off the market and that is what we need to do before things will fully start to turn around.

As for banks doing short sales, as the esteemed cooking show how Alton Brown would put it, “that is another show.”  Right now they seem to be totally insane in musings as to why they are doing what they are would take hours.

Where else and who else do you see at fault for the current state of the real estate market.  Do you have a prediction for when it will turn around and what it will take to make that happen?

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