Belize Real Estate Links 
| Belize Real Estate Links | |
| |
|
Real Estate Information |
|
|
|
High Profit Real Estate Investing--Make a Good Deal Every Time!
Knowing what a Good Deal is - Is the Key to Success in Real Estate. Dear Investor, Take this little survey: The most important key to Real Estate Success is: 1. Finding Motivated Sellers 2. Funding Your Deals 3. Negotiating 4. Knowing a Good Deal when you see one. Yes all of them are important. And if you answered #4 - you're right on the money. Why, because if your deal is a not good one, all your other skills and marketing and power will not make you money, and may even lead to disaster. On the other hand, if you can unfailingly target good deals, you will always be successful and all the other skills and your marketing methods will serve to increase your success. What is a Good Deal? It's a lot easier to state the question than give the answer. Why? Because it depends on many factors like: - Market value and purchase price - Expenses, carrying costs, repairs - Cashflow and profit - Holding time - Loan terms - Risk factors - And more . . . And most importantly, it depends on the type of deal you're doing. For example, if you have a loan on a property that you intend to rent or sell on a lease option, the terms of the mortgage, future tax increases, and current area rents are critical to consider in insuring a positive cashflow. However, if you are planning to do a short rehab job, and sell or just flip to another investor, rental income is irrelevant as are future tax increases. It's What You Don't Think About that Can Get You The thing that trips up many investors, is that in our enthusiasm to do a deal that we've found, we don't take into consideration "hidden" costs. For example, if you're doing a renovation and you've done your due diligence on contractor costs, have you also considered your carrying costs such as mortgage payments, utilities, etc. not only during the renovation, but also the time it will take to sell and close with a new buyer? Or if you're using a realtor to sell the property, have you calculated the effect of a 6-7% commission and the closing costs the seller will pay on your bottom line. A 10% profit margin can shrink pretty quickly to zero under those circumstances. Read Those Loan Terms Carefully Or have you taken into account, not just your loan to value ratio on the property, but your investment to value ratio (e.g., the total of all outstanding loan balances plus the additional funds you've put in from your own cash or borrowed from your home equity line or friends and family)? And on the income side, have you calculated how long you should hold the property to receive a significant profit from the pay down of the mortgage. With a new 30 yr loan, you may have to wait 5-10yrs to get the same pay down you'd get after a few years from a 30yr loan that's been seasoned for 10 years. And did you carefully read the note contracts to take account of adjustable rates and pre-payment penalties? Checklists aren't Enough A number of courses and real estate gurus will give you checklists. That's helpful in not forgetting something, but it doesn't help you with the laborious and complex task of putting all the numbers together. There's just something about working with the actual real numbers, that brings the reality of the deal into actual focus. Our hopes and wishes dissolve before the actual profit and loss calculations. Moreover, the numbers can pinpoint the weaknesses in a deal, and point the way to a solution. No mere checklist can do that. What About Risk? I think you'll also agree that a Good Deal, is not just High Profit, but also, most importantly Low Risk. Many a dream of a golden future has come crashing down because some little thing went wrong. Many a would-be mogul, is now working at a 9 to 5 because their killer deal was wrecked by an unforseen glitch. This is what we mean by high risk. The successful investors do deals with low risk. Deals that are so robust that even if almost everything went wrong they'd still come out with a profit. Build In A Safety Margin For example, suppose you have a rental with a positive cashflow. Is your cashflow high enough or your option payment big enough, that even if you had to evict your tenant for non-payment and it took you 2 months to fill it with another cash-paying customer, you'd still come out ahead? Or, is your investment to value so low that even if you had to offer your buyer a big discount for a quick sale, you'd still walk away from the closing table with a fat check? In real estate things can and usually do go wrong. It's Normal. So, wouldn't you like all your deals to have these kinds of safety margins? Fixing the Problems with Your Deal Now, if you knew in advance that your risk was too high, or your cashflow was too low, or your profit over the life of the deal wasn't enough, you'd want to think of solutions. This is what is meant by being a "transaction engineer". Find the solution, fix the problem, test it on the numbers, and then negotiate it into the deal. And if you can't find a solution (but there always is one) or the seller won't accept it-NEXT! I can tell you from real experience, a bad or risky deal is NEVER WORTH DOING-no matter how enticing the vision. The personal stress, heartache, and loss of confidence can be even more harmless than the potential financial loss. In the words of an ex-president's wife, if you are faced with doing a bad deal-Just say No! What's the Answer? Some experienced investors have a feel for good deals, and can avoid trouble most of the time. Others only do a particular type of deal and use a rough "rule of thumb" to evaluate their risk and profit. However, what's really needed is a "calculator" or computer program that will take in all the variables and 1) Calculate the exact profit and cashflow for all kinds of deals. 2) Measure and Evaluate the financial risk in the deal 3) Use standard and safe criteria for what constitutes a good deal 4) Suggests alternatives to fix what is wrong The Deal Evaluation Tool We've taken tons of real estate courses and looked at all kinds of real estate software, and nothing has come close to what we as investors need. So we decided to create our own Deal Evaluation Tool. Well after several months of testing and improvement, we now use it for all our deals-short sales, subject to, lease option, rehab, wholesaling, and even some commercial. Since we can try out different "what-if" scenarios, it's kept us away from some real pitfalls, and helped us negotiate better profit margins. We wouldn't "leave home without it". Constantly Meeting The Needs Of Investors Well, some other investors wanted to try it, so we put it on our website. Much to our delight we now have a community of users and a users group that shares their insights about doing deals and creative ways to use the Deal Evaluation Tool. Their suggestions, are leading to a rapid improvement of already incredibly useful tool. There is just nothing out there like it. We've also put a demo up for those investors who would like to get a feel for using it. And we hold classes for new users. Knowing all the numbers, and having evaluated our risks with the Deal Evaluation Tool gives us more confidence in negotiating deals with sellers and more consistent high profit real estate deals. And that's what we all want, isn't it. Richard Odessey along with his wife Michelle have the premier site on the internet - http://www.InvestorWealth.com for training and teaching real estate investors to do high profit deals. They offer regular Free Teleseminars by the top real estate investors in the country, the best tools to enhance your real estate success like the Deal Evaluation tool. They also offer 4-8 hands-on training seminars with personal advice from experts that investors can take from the comfort of their home. Richard and Michelle have been investing for over 5 years and personally teach and mentor other investors.
MORE RESOURCES:
Google News |
|
|
|
RELATED ARTICLES
Buying Property in Bulgaria : How to Avoid Making A Bad Investment Where is it possible to buy a property on your credit card? Bulgaria, of course! With thousands of potential property buyers seduced by Bulgaria's bargain property prices, the temptation is to think that making a solid return is a no-brainer! Searching the Internet, dozens of articles and property websites boast about the 100% capital growth that can be achieved on Bulgarian property investments in the space of 12 months.For first time investors with small budgets looking for a step onto the property ladder, this seems like an opportunity almost too good to be true! The result is that thousands of novice speculators and second homebuyers are flocking to Bulgaria to cash in on the investment opportunities it offers. How to Decrease the Value of Your Own House Owning a house is part of the American Dream. Depending on where you live in the US - home ownership can be around 70%. Real Estate Internet Marketing Is The Way To Go Real estate Internet marketing is a booming business, along with all other forms of Internet businesses. Now, it seems that very little can't be sold over the Internet. Questions To Ask The Landlord Before Renting His Apartment Apartment hunting is not the easiest thing around. You may find places not suited to your tastes or those which do are not to your budget. Types Of Real Estate - An Investors Choice There are different types of real estate, and different ways to invest in them. Which way is best is for you to decide, according to your particular needs. Staging Homes for Top-Dollar Sales Wouldn't it be nice to have Roger Hazard's design team from "Sell This House" come visit for a weekend?Many "redecorators" and designers offer "Staging Homes" services from $250 to $5,000. These services usually give good advice, some help with the actual work involved, and others even move in new furniture for you. Is 100% Annual Return On Investments Possible With Low Risk Land Investments? In last week's article, we discussed how substantial profits could be made by investing where baby boomers may want to relocate or buy a second home. This seemed to confuse readers since they were thinking that our web site is about preconstruction and preconstruction to them means buying condos?? In this article, I hope to broaden your horizons considerably. Selling Investment Houses: Props & Profits New Marketing and Design Psychology ideas help you stage homes for sale to motivate buyers and generate top dollar. Instead of leaving investment houses vacant, my husband and I add a few props to increase our profits. Use Targeted Decorating To Get A Higher Price For Your House This article will show you how to sell your home quicker, get a higher price for it by using smart decorating techniques.The secret is to make your home feel like "my home", for the buyer. Fixing Houses for Resale: Three Beginning Steps to Increase Profits and Have Fun Real estate investors specializing in fixers make higher profits when they have a detailed work plan and know how to get around the future resale appraisal issues.Before you begin your fixer makeover, taking a few extra steps helps you make more money, avoid future appraisal pitfalls, and have more fun. Purchase Your First Home with Confidence If you are making the transition from renter to homeowner, you're not alone. In 2004, 40 percent of homebuyers were purchasing for the first time, according to "The 2004 National Association of REALTORS Profile of Home Buyers and Sellers. Home Inspectors: 5 Tips to Choosing the Right One Choosing the wrong Home Inspector can cost you a lot more than the fee you paid. If you choose a home inspector solely on price alone, your headed down a dangerous highway. Fixing Houses: Mixing Your Own Paint for Savings and Harmony To make the maximum profit on your investment properties, you'll need to save money wherever you can. One way to save significant amounts of money is to mix your own paint. FSBO Novel Preface PrefaceWe are For Sale By Owners, "FSBOs." We spend our time trying to sell ourselves and others on what we are doing or what we want to believe. Selling Your Home: 5 Deal Killers That Are Lurking In Older Homes You've listed your home for sale, you have a Buyer and now their Inspector is performing an inspection. You think you have a pretty good home, but do you really know for sure? What is he finding? Why is it taking so long? Here are 5 deal killers to watch out for when selling your home. Real Estate Investing Myths That Steal Profits From Your Pocket One of the things that distresses us about our industry is the amount of wrong or incomplete information available to investors. Some myths block what otherwise would be a great deal, while others would have you believe that a bad deal is actually great. Buying an Unfinished Home Maybe Your Answer For the first time "want-to-be" homeowner, purchasing an unfinished new home maybe just the answer. With mortgage interest rates still at record lows, there has not been a better time to purchase a home in decades. Negotiating A Short Sale - The High Road to Huge Foreclosure Profits Buying foreclosures can be extremely profitable for real estate investors. However, most of these homeowners are mortgaged to the hilt. Real Estate Local FAQs. There are many frequently asked questions and any local real estate area. In our area here at the local Delaware Beaches, the most frequently asked questions are how to get a good deal and if there are any fixer-uppers available. Equity Equity is the value of your home minus what you owe on your mortgage. For example, If Joe's home is worth $200,000 and Joe still owes $170,000, then Joe's Equity is $30,000.
|
| home | site map | Colorado Log Homes | Homes for Sale in Denver Metro |
| © 2006 |
