Friday, October 30, 2009
Thursday, October 29, 2009
Wednesday, October 28, 2009
Tuesday, October 27, 2009
Monday, October 26, 2009
Friday, October 23, 2009
Tuesday, October 20, 2009
"Multi-Unit Investment Property Financing 101"
How to obtain investment property financing is one of the first things you must figure out as a new multifamily investor. Assuming you're not yet equipped to pay cash, your total acquisition costs boil down to three primary components:
The mortgage or loan (traditional bank, mortgage broker, private lender, etc.)
Your down payment (can be out-of-pocket or financed)
Your closing costs (can be out-of-pocket or financed)
THE MORTGAGE
Of course, this is the largest of your investment property financing components, and the specific type of mortgage you get may depend on the nature of the property you are buying. For a functional, fully occupied multifamily structure, a standard 30-year fixed-rate bank mortgage will fit the bill.
A fixer upper, on the other hand, may require a different funding source, because banks do not like the added risk associated with a rehab job. Additionally, the "non-functional" nature of this type of property makes it difficult to appraise. In fact, most times these appraisals are undervalued, which could result in a bank-mandated reduction of the loan amount, or even a voiding of the deal by the lending bank.
Although I am partial to fixer-upper projects, I did not start out this way. My first few acquisitions were of the more traditional, already-functional type, using regular bank mortgages. And unless you have access to a boatload of cash or to a private lender, you will probably have to start out the same way I did – purchasing currently occupied rental properties.
Although you'll miss out on the "fixer-upper discount," an initial focus on fully occupied properties will allow you to learn the ropes before "graduating" to the more advanced fixer-upper stuff. This will also give you time to find a private lender you can trust, which will enable you to execute the rehab strategy.
YOUR DOWN PAYMENT
The largest out of pocket expense associated with investment property financing is usually the down payment. Down payment requirements are more stringent with a traditional bank compared to a private, non-bank lender. For example, many private lenders will finance 100% of the purchase price (not to mention closing & rehab costs), especially if the term of the loan is short (like 6- or 12-months). But if you need to go with a traditional bank mortgage, a down payment of some sort will almost always be required. The bank's down payment requirement is defined by the "loan-to-value" ratio (LTV). For example, an 80% LTV loan requires a 20% down payment.
Right now, lenders require a 20%-30% down payment. As long as you have good credit, most mortgage brokers can hook you up with a 80% or even 85% LTV FHA mortgage (i.e., you put down 15% or 20%, respectively). Of course the upside compared to traditional 70% LTV loans is that you put less money down out of your own pocket, which also drives up your cash-on-cash ROI when you sell. However, high LTV mortgages do have downsides:
Interest rates tend to be higher
You may have to pay for points at closing (calculated as 1% of the mortgage amount)
The appraised value must be higher because there is less of an equity cushion
Any down payment that is less than 20% of the purchase price triggers private mortgage insurance (PMI).
Because of these issues, I would avoid straight-up high-LTV bank mortgages if at all possible. A much better investment property financing alternative is to get an 80% LTV loan, and use a secondary financing source for the 20% down payment. And luckily, you do have a few non-cash funding options for the down payment.
Obviously if you cannot find a secondary funding source for the down payment, then you will indeed have to pursue a high LTV loan even though this is not ideal. That said, this can be viable as long as your projected rental income is enough to cover the higher payments. Then, in a few years, you should have enough built-up equity to refinance into a standard 80% LTV, 30-year fixed-rate mortgage.
CLOSING COSTS
Unfortunately, closing costs are a necessary evil in terms of investment property financing, even when using a private lender (although bank closing costs will always be higher).
FINAL THOUGHTS
The bottom line is that – in most cases – you'll want to get an 80% LTV fixed-rate loan using a secondary financing source to fund the 20% down payment. This gives you the best of all worlds...you minimize your out-of-pocket expense while at the same time minimizing your largest go-forward expense item as well as your risk. This maximizes the odds that you will optimize your profit when you sell years down the road.
So, investment property financing is not overly difficult, but it does take some time to figure it all out and find the best deal. Just follow the advice on these articles and do not waver. Keep moving forward.
Yes, you CAN do this!
The mortgage or loan (traditional bank, mortgage broker, private lender, etc.)
Your down payment (can be out-of-pocket or financed)
Your closing costs (can be out-of-pocket or financed)
THE MORTGAGE
Of course, this is the largest of your investment property financing components, and the specific type of mortgage you get may depend on the nature of the property you are buying. For a functional, fully occupied multifamily structure, a standard 30-year fixed-rate bank mortgage will fit the bill.
A fixer upper, on the other hand, may require a different funding source, because banks do not like the added risk associated with a rehab job. Additionally, the "non-functional" nature of this type of property makes it difficult to appraise. In fact, most times these appraisals are undervalued, which could result in a bank-mandated reduction of the loan amount, or even a voiding of the deal by the lending bank.
Although I am partial to fixer-upper projects, I did not start out this way. My first few acquisitions were of the more traditional, already-functional type, using regular bank mortgages. And unless you have access to a boatload of cash or to a private lender, you will probably have to start out the same way I did – purchasing currently occupied rental properties.
Although you'll miss out on the "fixer-upper discount," an initial focus on fully occupied properties will allow you to learn the ropes before "graduating" to the more advanced fixer-upper stuff. This will also give you time to find a private lender you can trust, which will enable you to execute the rehab strategy.
YOUR DOWN PAYMENT
The largest out of pocket expense associated with investment property financing is usually the down payment. Down payment requirements are more stringent with a traditional bank compared to a private, non-bank lender. For example, many private lenders will finance 100% of the purchase price (not to mention closing & rehab costs), especially if the term of the loan is short (like 6- or 12-months). But if you need to go with a traditional bank mortgage, a down payment of some sort will almost always be required. The bank's down payment requirement is defined by the "loan-to-value" ratio (LTV). For example, an 80% LTV loan requires a 20% down payment.
Right now, lenders require a 20%-30% down payment. As long as you have good credit, most mortgage brokers can hook you up with a 80% or even 85% LTV FHA mortgage (i.e., you put down 15% or 20%, respectively). Of course the upside compared to traditional 70% LTV loans is that you put less money down out of your own pocket, which also drives up your cash-on-cash ROI when you sell. However, high LTV mortgages do have downsides:
Interest rates tend to be higher
You may have to pay for points at closing (calculated as 1% of the mortgage amount)
The appraised value must be higher because there is less of an equity cushion
Any down payment that is less than 20% of the purchase price triggers private mortgage insurance (PMI).
Because of these issues, I would avoid straight-up high-LTV bank mortgages if at all possible. A much better investment property financing alternative is to get an 80% LTV loan, and use a secondary financing source for the 20% down payment. And luckily, you do have a few non-cash funding options for the down payment.
Obviously if you cannot find a secondary funding source for the down payment, then you will indeed have to pursue a high LTV loan even though this is not ideal. That said, this can be viable as long as your projected rental income is enough to cover the higher payments. Then, in a few years, you should have enough built-up equity to refinance into a standard 80% LTV, 30-year fixed-rate mortgage.
CLOSING COSTS
Unfortunately, closing costs are a necessary evil in terms of investment property financing, even when using a private lender (although bank closing costs will always be higher).
FINAL THOUGHTS
The bottom line is that – in most cases – you'll want to get an 80% LTV fixed-rate loan using a secondary financing source to fund the 20% down payment. This gives you the best of all worlds...you minimize your out-of-pocket expense while at the same time minimizing your largest go-forward expense item as well as your risk. This maximizes the odds that you will optimize your profit when you sell years down the road.
So, investment property financing is not overly difficult, but it does take some time to figure it all out and find the best deal. Just follow the advice on these articles and do not waver. Keep moving forward.
Yes, you CAN do this!
Monday, October 19, 2009
Saturday, October 17, 2009
Friday, October 16, 2009
Thursday, October 15, 2009
"Start Buying Rental Property with this 5-Step Framework"
Buying rental property can be time consuming. I literally analyzed more than 100 multifamily properties, and physically inspected maybe 30 or so with my agent over the course of a year, before I made my first bid. And I bid on 3 or 4 different properties before I had one under contract. The bottom line is that buying investment property is definitely a "numbers game."
If you're totally new to all of this, you're probably wondering how to dive in to the wonderful world of buying rental property. I'll share with you what worked for me, and it involves 5 specific steps:
Find a good real estate agent
Practice running the numbers
Conduct physical inspections (drive-by's + showings)
Make an offer & negotiate
Manage the contract process
STEP #1: FIND A GOOD REAL ESTATE AGENT
Eventually, you will need your own "team," including a real estate agent, mortgage broker, insurance broker, title company, attorney, home inspector, and a handful of trustworthy contractors. But with the exception of a real estate agent, your team does not need to be assembled right out of the gate. You will gradually assemble it as you go.
STEP #2: PRACTICE RUNNING THE NUMBERS
Ask your new agent to send you all the active 2-8 unit multifamily rental property listings in your target area, and practice running the numbers to identify the most promising ones. As long as you know a simple formula and have a few key numbers from the property, can use those numbers to do rapid-fire "back of the envelope" calculations to quickly screen properties for financial viability. More on this later.
STEP #3: CONDUCT PHYSICAL INSPECTIONS
Once you have a short list of financially viable multifamily rental properties, take some time to do drive-by's. Whether the numbers work or not, you do not want to purchase any property in an especially bad area (in fact, you'll find that the numbers usually work best in such areas...you get what you pay for!). Plus, while not a perfect science, if the outside looks like it's falling apart you may want to pass.
After this process, you will have a list of maybe 3 or 4 properties to look at with your agent, instead of, say, 10 or 15. Have your agent schedule weekly showings, and bring a notebook to jot down notes so you can later use this info to adjust your bid amount.
Keep physically inspecting properties with your agent in this manner every week and do not get discouraged. The majority of rental properties you come across will be poorly maintained and/or overpriced. Tenants beat them up, and many, many landlords could care less about maintaining their investment.
So, buying rental property takes time. All I can say is be patient, and remember that the more properties you inspect, the better deal you are likely to get when you finally pull the trigger.
STEP #4: MAKE AN OFFER & NEGOTIATE
Ok, so you've run a bunch of initial numbers, did a bunch of drive-by's, and physically inspected a bunch of hot prospects with your agent. Finally, you've found a 2-8 unit multifamily rental property you’d like to purchase. Time to negotiate!
STEP #5: MANAGE THE CONTRACT PROCESS
Yippee, your offer was accepted! So now what? Well, there are various steps that round out the process of buying rental property:
Get the property "under contract"
Initiate title work; note that some states require an attorney
Conduct a property inspection
Get an appraisal Arrange financing
Get property insurance
Get a property survey
Review settlement documents and close the deal
This may seem complicated if you happen to be new to all of this, but it's really not. After you go through the entire process once, you'll be ready to start buying rental property like there's no tomorrow!
If you're totally new to all of this, you're probably wondering how to dive in to the wonderful world of buying rental property. I'll share with you what worked for me, and it involves 5 specific steps:
Find a good real estate agent
Practice running the numbers
Conduct physical inspections (drive-by's + showings)
Make an offer & negotiate
Manage the contract process
STEP #1: FIND A GOOD REAL ESTATE AGENT
Eventually, you will need your own "team," including a real estate agent, mortgage broker, insurance broker, title company, attorney, home inspector, and a handful of trustworthy contractors. But with the exception of a real estate agent, your team does not need to be assembled right out of the gate. You will gradually assemble it as you go.
STEP #2: PRACTICE RUNNING THE NUMBERS
Ask your new agent to send you all the active 2-8 unit multifamily rental property listings in your target area, and practice running the numbers to identify the most promising ones. As long as you know a simple formula and have a few key numbers from the property, can use those numbers to do rapid-fire "back of the envelope" calculations to quickly screen properties for financial viability. More on this later.
STEP #3: CONDUCT PHYSICAL INSPECTIONS
Once you have a short list of financially viable multifamily rental properties, take some time to do drive-by's. Whether the numbers work or not, you do not want to purchase any property in an especially bad area (in fact, you'll find that the numbers usually work best in such areas...you get what you pay for!). Plus, while not a perfect science, if the outside looks like it's falling apart you may want to pass.
After this process, you will have a list of maybe 3 or 4 properties to look at with your agent, instead of, say, 10 or 15. Have your agent schedule weekly showings, and bring a notebook to jot down notes so you can later use this info to adjust your bid amount.
Keep physically inspecting properties with your agent in this manner every week and do not get discouraged. The majority of rental properties you come across will be poorly maintained and/or overpriced. Tenants beat them up, and many, many landlords could care less about maintaining their investment.
So, buying rental property takes time. All I can say is be patient, and remember that the more properties you inspect, the better deal you are likely to get when you finally pull the trigger.
STEP #4: MAKE AN OFFER & NEGOTIATE
Ok, so you've run a bunch of initial numbers, did a bunch of drive-by's, and physically inspected a bunch of hot prospects with your agent. Finally, you've found a 2-8 unit multifamily rental property you’d like to purchase. Time to negotiate!
STEP #5: MANAGE THE CONTRACT PROCESS
Yippee, your offer was accepted! So now what? Well, there are various steps that round out the process of buying rental property:
Get the property "under contract"
Initiate title work; note that some states require an attorney
Conduct a property inspection
Get an appraisal Arrange financing
Get property insurance
Get a property survey
Review settlement documents and close the deal
This may seem complicated if you happen to be new to all of this, but it's really not. After you go through the entire process once, you'll be ready to start buying rental property like there's no tomorrow!
Wednesday, October 14, 2009
Tuesday, October 13, 2009
Wednesday, October 7, 2009
"A Real Estate Investment Strategy Can Take Many Forms..."
...But only one real estate investment strategy clearly stands out in today's market as being the best and safest for "small time" investors like you and me (and no, this is not a sales pitch...just free, unadulterated investment property advice).
PILLAR #1: LONG-TERM STRATEGY
The overarching goal of your real estate investment strategy should be to build up savings over time. Your strategy should not seek monthly income. Your strategy should not seek short-term profits. Unless you really like risk, a long-term strategy is the only way to go.
Your real estate investment strategy should focus on building long-term (free) equity by renting out 2-8 unit multifamily rental properties that you acquire with very little out-of-pocket cash. Whether you are a new or part-time investor, buying and holding for at least 10 years is the best way to optimize the power of leverage, free equity, tax deductibility, and price appreciation.
The bottom line is that unless you have access to a lot of capital (i.e., cash on-hand, or an on-call private lender), you'll find it difficult to execute a profitable short-term strategy. Want to do some flipping? Get a job at Burger King.
In today's market, straight-out flipping simply makes no sense for small timers like you and me. The only viable short-term strategy is to buy a fixer-upper, make the cosmetic improvements, and resell for a profit. But even a strategy focused on fixer-upper homes has challenges, and it too is more likely to succeed if you have a long-term view.
PILLAR #2: DETERMINE YOUR GOAL
Ok, so now you know that rental property investing or any of the other real estate investment strategies work best as a long-term endeavor. But how long? Well, that depends on your specific goals.
If your goal is to fund college for your kids, and the oldest one is 5, then your minimum time horizon is about 13 years. If on the other hand your goal is to help fund your retirement, then subtract your age from 55 (or 60, or 65, or...) to figure out how long to hold your rental properties.
PILLAR #3: TARGETED LOCATION & PROPERTY TYPE
Aside from your goals and time horizon, the final pillars in your real estate investment strategy are what and where to buy. As I've already mentioned, you should target 2-8 unit multifamily rental properties. Regarding location, you’ll want to target a lower income, geographically narrow area – like a single town or county – within a 60-minute drive from your home. Trust me, it makes life easier.
SUMMARY
Ok, so there you go. That's all there is to it. To sum up, the overall framework of your real estate investment strategy is as follows:
Determine your goal, and then how many multifamily rental properties you must acquire to achieve it.
Pick a lower-income town or county no more than 60 minutes from your home.
Look for 2-8 unit, non-owner occupied, older rental properties with cosmetic deficiencies.
Minimize out of pocket expenses by using leverage to the max.
Plan to hold and rent out each rental property for at least 10 years.
...see you on the next article!
PILLAR #1: LONG-TERM STRATEGY
The overarching goal of your real estate investment strategy should be to build up savings over time. Your strategy should not seek monthly income. Your strategy should not seek short-term profits. Unless you really like risk, a long-term strategy is the only way to go.
Your real estate investment strategy should focus on building long-term (free) equity by renting out 2-8 unit multifamily rental properties that you acquire with very little out-of-pocket cash. Whether you are a new or part-time investor, buying and holding for at least 10 years is the best way to optimize the power of leverage, free equity, tax deductibility, and price appreciation.
The bottom line is that unless you have access to a lot of capital (i.e., cash on-hand, or an on-call private lender), you'll find it difficult to execute a profitable short-term strategy. Want to do some flipping? Get a job at Burger King.
In today's market, straight-out flipping simply makes no sense for small timers like you and me. The only viable short-term strategy is to buy a fixer-upper, make the cosmetic improvements, and resell for a profit. But even a strategy focused on fixer-upper homes has challenges, and it too is more likely to succeed if you have a long-term view.
PILLAR #2: DETERMINE YOUR GOAL
Ok, so now you know that rental property investing or any of the other real estate investment strategies work best as a long-term endeavor. But how long? Well, that depends on your specific goals.
If your goal is to fund college for your kids, and the oldest one is 5, then your minimum time horizon is about 13 years. If on the other hand your goal is to help fund your retirement, then subtract your age from 55 (or 60, or 65, or...) to figure out how long to hold your rental properties.
PILLAR #3: TARGETED LOCATION & PROPERTY TYPE
Aside from your goals and time horizon, the final pillars in your real estate investment strategy are what and where to buy. As I've already mentioned, you should target 2-8 unit multifamily rental properties. Regarding location, you’ll want to target a lower income, geographically narrow area – like a single town or county – within a 60-minute drive from your home. Trust me, it makes life easier.
SUMMARY
Ok, so there you go. That's all there is to it. To sum up, the overall framework of your real estate investment strategy is as follows:
Determine your goal, and then how many multifamily rental properties you must acquire to achieve it.
Pick a lower-income town or county no more than 60 minutes from your home.
Look for 2-8 unit, non-owner occupied, older rental properties with cosmetic deficiencies.
Minimize out of pocket expenses by using leverage to the max.
Plan to hold and rent out each rental property for at least 10 years.
...see you on the next article!
Tuesday, October 6, 2009
"Rental Property Valuation: Analyzing an Investment Property"
Multifamily rental property valuation is obviously a critical component of your investment strategy. If you're a buyer then you'll have to "run the numbers" to determine value. Very important, because if you overpay... you lose.
Despite the sluggish market, it is still difficult to find a "steal" in this day and age. A good starting point for negotiations is often 20% below the list price, with a target purchase price of 10-15% below market value.
But even after your bid is accepted and the property is under contract, the property value still may be reduced via the appraisal and/or the home inspection.
For example, if the appraised value comes in too low, you may have to ask the seller to adjust the purchase price or make some alternative arrangement. Similarly, a bad inspection report may force the seller to either make repairs or adjust the price.
GENERAL PROPERTY VALUATION GUIDELINES
Rental property valuation is primarily determined by rental revenue, location, and condition.
Larger units with more bedrooms command higher rent. So all else being equal, you'll want properties with multi-bedroom units. An added benefit is that 2-3 bedroom units tend to have a more stable tenancy. Conversely, 1-bedroom apartments tend to attract more of a transient population, which means the turnover is typically greater.
From a location standpoint, multifamily rental properties in older, lower-middle income neighborhoods usually offer the greatest bang for your buck. Plus, your tenant universe is typically larger in these areas. Avoid densely urban or very low income areas.
In terms of condition, the ideal target property will be older (50 years or more) and will have cosmetic deficiencies or simply look "tired." These properties can provide great value for your dollar. Conceptually, it's sort of the opposite of curb appeal.
COSMETIC VS. STRUCTURAL
General property valuation rule: cosmetic problems = good, structural problems = bad!
By "cosmetic," I'm referring to things like:
Peeling or old paint
Old carpet
Broken light fixtures
Damaged kitchen cabinets
Torn vinyl flooring
Accumulated junk or clutter
An unkempt lawn
Overgrown shrubbery
Dirty siding
Old appliances
Decrepit bathroom fixtures & towel racks
Old doorknobs
Old outlet & switch plate covers
Damaged mini-blinds
Broken windows
Any other "quick fix" you can think of
Structural issues, or issues where you must proceed with extreme caution, include:
A severely cracked foundation or walls
Galvanized piping
Leaning chimney
Outdated electric (i.e., knob & tube wiring)
Severely sloping, cracked or warped floors
Pervasive asbestos
Rotting wood in the frame
Lead paint
A long-running leaky roof
Buried underground oil tanks
HVAC problems
Mold
Note that I am not saying to avoid all of these issues at all cost. Run the numbers to determine feasibility. If you can buy a multifamily rental property on the cheap, then perhaps you'll be able to afford a new roof, an electric upgrade, or even mold remediation and still come out ahead.
It all depends on the purchase price, your property valuation conclusion, your level of experience, and the strength of your stomach. Use my free inspection checklist to help show the way (note: I'll post it on my website).
PROPERTY VALUATION "SQUEEZERS" TO AVOID
And finally, here's a list of things that'll kill property value...avoid them!
Properties with serious structural issues or that are poorly constructed.
Properties where all units are of the single-bedroom variety.
Properties that show "economic obsolescence," such as those with very short ceilings, or those with many bedrooms but only 1 bathroom for example.
Twins, condos, row homes, etc. These types of structures usually do not appreciate as much as detached structures.
Properties with wells and septic systems. These systems could create a lot of problems and added expense down the road.
Properties that do not have separate utilities. I've literally seen tenants crank the heat up to 90 degrees F in the winter but leave the windows wide open. The only utilities you as a landlord should be paying are water and sewer.
Stay tuned for more info...
Despite the sluggish market, it is still difficult to find a "steal" in this day and age. A good starting point for negotiations is often 20% below the list price, with a target purchase price of 10-15% below market value.
But even after your bid is accepted and the property is under contract, the property value still may be reduced via the appraisal and/or the home inspection.
For example, if the appraised value comes in too low, you may have to ask the seller to adjust the purchase price or make some alternative arrangement. Similarly, a bad inspection report may force the seller to either make repairs or adjust the price.
GENERAL PROPERTY VALUATION GUIDELINES
Rental property valuation is primarily determined by rental revenue, location, and condition.
Larger units with more bedrooms command higher rent. So all else being equal, you'll want properties with multi-bedroom units. An added benefit is that 2-3 bedroom units tend to have a more stable tenancy. Conversely, 1-bedroom apartments tend to attract more of a transient population, which means the turnover is typically greater.
From a location standpoint, multifamily rental properties in older, lower-middle income neighborhoods usually offer the greatest bang for your buck. Plus, your tenant universe is typically larger in these areas. Avoid densely urban or very low income areas.
In terms of condition, the ideal target property will be older (50 years or more) and will have cosmetic deficiencies or simply look "tired." These properties can provide great value for your dollar. Conceptually, it's sort of the opposite of curb appeal.
COSMETIC VS. STRUCTURAL
General property valuation rule: cosmetic problems = good, structural problems = bad!
By "cosmetic," I'm referring to things like:
Peeling or old paint
Old carpet
Broken light fixtures
Damaged kitchen cabinets
Torn vinyl flooring
Accumulated junk or clutter
An unkempt lawn
Overgrown shrubbery
Dirty siding
Old appliances
Decrepit bathroom fixtures & towel racks
Old doorknobs
Old outlet & switch plate covers
Damaged mini-blinds
Broken windows
Any other "quick fix" you can think of
Structural issues, or issues where you must proceed with extreme caution, include:
A severely cracked foundation or walls
Galvanized piping
Leaning chimney
Outdated electric (i.e., knob & tube wiring)
Severely sloping, cracked or warped floors
Pervasive asbestos
Rotting wood in the frame
Lead paint
A long-running leaky roof
Buried underground oil tanks
HVAC problems
Mold
Note that I am not saying to avoid all of these issues at all cost. Run the numbers to determine feasibility. If you can buy a multifamily rental property on the cheap, then perhaps you'll be able to afford a new roof, an electric upgrade, or even mold remediation and still come out ahead.
It all depends on the purchase price, your property valuation conclusion, your level of experience, and the strength of your stomach. Use my free inspection checklist to help show the way (note: I'll post it on my website).
PROPERTY VALUATION "SQUEEZERS" TO AVOID
And finally, here's a list of things that'll kill property value...avoid them!
Properties with serious structural issues or that are poorly constructed.
Properties where all units are of the single-bedroom variety.
Properties that show "economic obsolescence," such as those with very short ceilings, or those with many bedrooms but only 1 bathroom for example.
Twins, condos, row homes, etc. These types of structures usually do not appreciate as much as detached structures.
Properties with wells and septic systems. These systems could create a lot of problems and added expense down the road.
Properties that do not have separate utilities. I've literally seen tenants crank the heat up to 90 degrees F in the winter but leave the windows wide open. The only utilities you as a landlord should be paying are water and sewer.
Stay tuned for more info...
Monday, October 5, 2009
"Who Else Wants To Know The Best Way To Learn Real Estate Investing?"
The best way to learn real estate investing is to talk to people in the business and by doing it. While it is true that I will give you comprehensive "textbook" knowledge on the topic, knowing and doing are two different things.
You can't effectively learn anything without gaining both "book smarts" and "street smarts." So after you're done reading this article and studying my website, get away from your computer. Find a real estate agent and start looking at listings. Continue reading valuable articles and web content. Get pre-approved for a mortgage.
Then, and only then, will you begin to get your full blown education in real estate investing.
FIRST THINGS FIRST: RENTAL PROPERTY BASICS
But hey, gotta start somewhere, right? If you're brand-spanking new to all of this, you'll want to start here to learn the real estate investing basics. I'll call it "rental property preschool." And by the way, when I say "rental property," I am referring to 2-8 unit multifamily properties that you'll hold for at least 10 years.
First, why invest in rental properties in the first place? Because there are a TON of benefits of real estate investing, that's why! There are very few investment opportunities out there that combine the powerful benefits of leverage, free equity, tax deductibility, and price appreciation.
Sound good? GREAT! Next question – how can YOU find rental properties? Well the traditional way is to find a real estate agent. That's the method I endorse. But if you're a more adventurous type, there are other ways to find multifamily rental properties, including real estate foreclosures and real estate auctions.
Round out your introductory education in real estate investing by familiarizing yourself with some real estate terminology, and of course read the info on every page of my site. It's as good a place to start as any, and best of all...it's FREE!
ONWARD & UPWARD!
Ok, that's pretty much it for laying the introductory foundation. Now that your mind is in a state of readiness to continue to learn real estate investing, keep exploring my articles and site. I'm going to give you as much investment property know how as I can, including:
Why a LONG-TERM strategy focused on 2-8 unit rental properties is the way to go in today's world.
How to analyze, finance, and execute an investment property purchase.
How to manage your rental property.
How to minimize your risk and optimize your insurance coverage.
Etc...
But for now, preschool's all done.
You can't effectively learn anything without gaining both "book smarts" and "street smarts." So after you're done reading this article and studying my website, get away from your computer. Find a real estate agent and start looking at listings. Continue reading valuable articles and web content. Get pre-approved for a mortgage.
Then, and only then, will you begin to get your full blown education in real estate investing.
FIRST THINGS FIRST: RENTAL PROPERTY BASICS
But hey, gotta start somewhere, right? If you're brand-spanking new to all of this, you'll want to start here to learn the real estate investing basics. I'll call it "rental property preschool." And by the way, when I say "rental property," I am referring to 2-8 unit multifamily properties that you'll hold for at least 10 years.
First, why invest in rental properties in the first place? Because there are a TON of benefits of real estate investing, that's why! There are very few investment opportunities out there that combine the powerful benefits of leverage, free equity, tax deductibility, and price appreciation.
Sound good? GREAT! Next question – how can YOU find rental properties? Well the traditional way is to find a real estate agent. That's the method I endorse. But if you're a more adventurous type, there are other ways to find multifamily rental properties, including real estate foreclosures and real estate auctions.
Round out your introductory education in real estate investing by familiarizing yourself with some real estate terminology, and of course read the info on every page of my site. It's as good a place to start as any, and best of all...it's FREE!
ONWARD & UPWARD!
Ok, that's pretty much it for laying the introductory foundation. Now that your mind is in a state of readiness to continue to learn real estate investing, keep exploring my articles and site. I'm going to give you as much investment property know how as I can, including:
Why a LONG-TERM strategy focused on 2-8 unit rental properties is the way to go in today's world.
How to analyze, finance, and execute an investment property purchase.
How to manage your rental property.
How to minimize your risk and optimize your insurance coverage.
Etc...
But for now, preschool's all done.
Thursday, October 1, 2009
"Have You Considered Multi Unit Rental Property Investing To Automatically Pay Your Monthly Bills? Read on and Learn How."
I strongly believe that rental property investing is a great way to build long-term wealth. And anyone can do it with the right guidance... especially when that guidance is 100% free! Looking to help save for retirement? How about your kid's college education? If so, then investing in rental properties may be the perfect solution.
The combination of leverage, free equity, and price appreciation is a very powerful wealth building formula.
My goal here is to provide a 1-stop source for free tools & realistic advice to help you get started and ultimately succeed with rental property investing. My hope is to help YOU decide if investment properties are for you, and if so, show you the best way to do it.
As I'm sure you know, real estate investing can be done in a variety of ways. But only one strategy clearly stands out as being the best and safest way to dip your toes into the market, and I'll show you why (and how). Buying and holding 2-4 unit multifamily investment properties is allowing me to fund my 5 kids' college educations without impacting our lifestyle.
My website will tell you how to execute this strategy to accomplish whatever long-term goals you may have. Yes, 2-4 unit properties are the focus of my strategy, but the info applies to practically any long-term real estate investment approach. So, read on and say 'goodbye' to the rental property learning curve!
WHAT WILL YOU LEARN AT MY WEBSITE?
•Why real estate investing is a long-term proposition
•Why small, multi-family investment properties win
•How to start buying rental property
•How to “run the numbers” to avoid overpaying
•How to finance your purchase
•What to look for in investment property mortgages
•How to outsource and excel at rental property management
•How to minimize risk
•How to structure your rental property insurance plan
•And much more
WILL YOU SUCCEED IN LONG-TERM RENTAL PROPERTY INVESTING?
Yes, you CAN do this. This site provides all the tools and info you need, but this is not a get-rich-quick approach. As with any lucrative investment strategy, to be successful you must:
•Dedicate ample time to learn the ropes prior to diving in
•Have a long-term view (5-10 years +)
•Have an entrepreneurial spirit
•Already be earning a steady
•Have at least some free
•Have the courage to take on managed but incremental
•Be willing to deal with people from all levels of society
Rental property investing takes time and effort, but it’s extremely straightforward if you know how. And I’m going to show you how. No hype. No nonsense. Just the realistic, actionable information you need to launch your rental property investing business, avoid the common pitfalls, and maximize your odds of success.
Subscribe to:
Posts (Atom)
