Real Estate Investing Blog

When you’re working in real estate investment - whether you’re just getting started and putting your business plan into aaction or you have been involved in the field for a number of years - you’re going to hear a lot about the values of investing in foreclosures and REOS (real estate owned by the bank).

While investing in REOs and foreclosures can be a good idea, you just might find that these properties are not always going to be the best investments that you can make. There are a number of reasons for this, but one that is near the top of the list is simple: many foreclosures and REOs are not well maintained because the previous owners knew that they would be losing the home. As a result, unless you do your research, look at the REOs and foreclosres that you’re thinking about investing in, you may find that what started out sounding like a dream come trie really isn’t what you envisioned that it would be.

Focus on the big things - the state of the property and the rental invome value for the home. With those points, you will be in a better position to evalure REOs and foreclosure properties to made a determonation what is the best way to proceed.

When you’re getting started in real estate investing - or even thinking about getting started - one of the questions that you’re sure to ask yourself is whether or not the time is right to become a real estate investor.

With foreclosures on the rise, the answer may be “yes and no;” but there sure are some great opportunities for those who are ready to take advantage of them:

(source)Foreclosure filings across the country in April increased 65% compared with April 2007 according to RealtyTrac. Another record month!

The West is still leading the way and the wildfires aren’t the only reason Californians are losing homes this year. California’s rate of foreclosure is over twice the national average with places like Riverside County reporting a 161% jump for first quarter of 2008 compared to 2007. Other cities across have even reported that they expect that a third of the real estate market in their area will consist of bank-owned property by the end of the year – one in three … unbelievable.

In other words, if your questions about getting started in real estate investing are questions like “Are there great properties available” or “Will I be able to get a great deal” the answers are a resounding yes. On the other hand, if you’re a little bit concerned about whether or not you’ll be able to turn around and be able to sell or rent out the properties, well, the right mentor can make sure that you get started on the right foot and continue to make great deals.

Which is to say, if you’re thinking about getting started with real estate investing, you’ll find that now is a great time.

Success can mean different things to different people - if only because different real estate investors tend to have different goals. However, when you want to be sure that you are doing everything possible to ensure your real estate investment success, there are a few things that you can do that will help you out along the way:

• Focus on how much time your investments are going to take. There are going to be a number of things that need to be addressed for each investment, make sure that you’re setting aside enough time to get them all done.
• Remember that your real estate business is just that - a business. You need to be sure that you’re treating it as such in order to achieve the success that you’re looking for.
• Know what your financial situation is so that you can avoid negative cashflow. Simply put, money stresses put everyone on edge; when you know what your situation is, you’ll be in a far better position to stick to your budget.
• Be sure that you do a thorough inspection of each property. When you want to ensure success in your real estate business, make sure that you know what you’re getting into.
• Be sure that you read all of the contracts - including the fine print. Real estate purchases have a lot of legal detail; make sure that you know that everything is in order before making an investment.

Obviously, these are just a few keys to real estate investment success; when you’re looking to generate wealth as an investor there are many things that you need to be paying close attention to. Still, what you’re likely to find is that many people skip these steps - and that’s what holds them back and prevents their success.

One of the things that’s interesting about real estate investment - especially when you plan on buying multiple properties - is that it’s just like any other independent business: finding your niche is key.

(source)In real estate, your niche market can be a region or neighborhood in your town, a clientele group (such as vacation renters from Europe), or a property type (like renovating historical homes). When you target a specific area in real estate investment, you become an expert in that area. The more you know about your niche, the easier it will be for you to find the right properties and market them to buyers so you can make the most money from them.

When you’re going to be buying multiple properties - and, in general, when you’re going into business - it’s essential that you have a focus. Rather than simply looking at getting great deals wherever those deals may be, look to a particular area of town, especially if it’s an up and coming, growing neighborhood. Rather than simply buying any properties that can be rented out, look for those where it will be easy to find the types of tenants that you want.

Simply by finding your niche, you’ll discover that it’s easier to get into buying multiple properties. When lenders know that you buy a certain type of property regularly, they will be more willing to work with you. When you’ve established your reputation, you’ll be in a better position to find and make great deals that benefit your business. You’ll be focused and, even when you’re buying multiple properties, you’ll be able to better reach the goals that you’ve set for yourself.

When you’re looking at real estate investment opportunities, it’s key to evaluate each deal so that you can see whether or not it is going to help you to reach your business goals. Of course, evaluating deals means knowing which points you should focus on and consider.

Here are a few key considerations for evaluating deals:

• What is the market value of the property? You may find that a property may have a reasonable list price, but would it really sell for that price on the market? When you consider the market value of the property while evaluating deals, you’ll be able to develop a sense of whether or not you’d be able to really turn the profit you’d like on an investment.


• How much equity will you be able to build from the time of purchase? When you’re evaluating deals, you’re going to find that there needs to be a little bit of a buffer. The instant equity that you’ll be able to build will help to give you a sense of your profit margin - and how it might be affected if it takes longer to sell than you’d anticipated.


• What’s the market like in the area? When you are evaluating real estate deals, it’s important to consider the market in the area where you are making the investment. If properties seem to stay on the market indefinitely, you may want to pass on the opportunity.

By knowing what it takes to evaluate deals, you’ll find that success from real estate invesmtnet is a lot easier to come by.

When you’re looking into getting started in real estate investing, chances are good that you’re going to want to just dive right in - after all, you know that there’s money to be made in real estate investing and you know that there are great bargains out there with the ongoing mortgage crisis. However, before you simply jump right in when you’re getting started, take the time to really make a commitment.

When I say make a commitment to getting started in real estate investing, what I really mean is this: if you want to achieve success as a real estate investor, it is essential that you make a commitment to learning more about the real estate industry and about forming an investment strategy. Simply put, you can’t just jump in and get started as a real estate investor; there’s a learning curve.

When you want to get started, take the time to learn more about the real estate industry on the whole. Learn about how deals are made, what makes a great seller to work with when you’re looking to buy properties and focus on learning the ropes from someone who has been there. When you make a commitment to getting started in real estate investing, one of the best things that you can do is to focus on finding a mentor who can give you guidance and make sure that you’re getting started on the right foot.

One great option for real estate investors is to look into REOs - real estate properties that are owned by the bank. After all, when you’re investing in real estate, there’s a chance that you are going to find some great bargains by talking with the “new owners” - professionals at the bank.

What you’ll quickly discover is that, these days, real estate investors are not the only ones who are turning to REOs and looking for a great deal; the other thing that you’ll discover is that there’s a bit more competition out there - especially once people hear more about REOs:

(source)A short sale occurs when a mortgage lender gives approval to homeowners to sell for less than they owe on their mortgage in an attempt to avoid foreclosure. The trouble is, lenders often take months to okay the transactions, the foreclosure happens after all, and the property becomes an REO.

With more demand for REOs, multiple offers abound, a phenomenon that has stunned some buyers, said Lee.

“It’s a secret nobody knows,” he said. “You have to write a full-price offer. If you want it, everybody wants it.”

The competitive landscape has discouraged the Hernings, who thought they’d have an easy time buying because “all you hear about is ‘Oh, the market is terrible,’” Herning said.

What seems like bad news for the average consumer when it comes to foreclosures and REOs is actually a great learning opportunity for those who want to generate wealth as real estate investors. When you’re planning to invest in real estate and are looking at REOs as an option, it’s important to look at your options.

First, an option that is available to you is to make sure that you have a relationship with someone at the bank; that way you will be in a better position to have your deals approved. Similarly, you’ll have the option to negotiate deals with the bank up front - something that consumer buyers aren’t going to be able to do.

In other words, when you notice that others consumers are having trouble doing something, focus on your perspective as an investor; rather than repeating mistakes that they have made, take the time to learn more about your investments and find those tools that will make you far smarter than the average consumer.

When you’re getting started in real estate investing, it’s important to know which advice will help you to reach the goals that you’ve set for yourself and which advice is going to take you further away from those goals.

For example, if you’re planning to invest in pre-foreclosure single family homes, the following isn’t necessary going to be something that you pay close attention to:

OK, maybe not so much anymore: Lagging consumer confidence, record-setting gas prices, commodity price peaks, yada yada. We know the score on that front.

But this is also the month the major players in U.S. retail real estate and development find themselves at the annual International Council of Shopping Centers convention in Sin City to make deals and talk up projects. And this is the year equity-heavy landlords with creditworthy tenants - or aspirations to attract them - may find it worth the investment to improve their properties now that the pipeline for new construction and suburban residential sprawl is constricting.

While that’s not to say that the advice isn’t good - if that’s a market that you’re interested in, you’ll find that it may be a great time to act - it is to say that, when you’re looking for advice about which investments to make and which to skip, it’s a good idea to look for that advice that matches your interests and efforts.

By knowing which advice to follow, you’ll find that there is a lot less frustration involved in getting started in real estate investing - and in finding the success that you deserve.

When you want to learn more about how to sell properties, chances are good that you’ll come across some topics like home staging - those little, less expensive things that you can do that will have a dramatic impact on your ability to sell. Of course, what you’re likely to find is that while there are a lot of great year round home staging tips out there, there are also some seasonal tips that can help you to sell.

When you want to be sure that you can sell properties during the spring and summer months, there are a few key things that you can do to make sure that you get the interest of prospective buyers - even the ones who may not know that they are looking for a new home.

In order to stage a property that you’re looking to sell during the spring and summer months, take the time to:

• Trim the hedges and get shrubs, trees and bushes looking their best.
• Add mulch around tree stumps and under the hedges.
• Plant flowers
• Keep up with cutting the grass.

Each of those is a relatively simple thing that you can do to make sure that the properties that you are trying to sell - or to rent out - appeal to buyers. And that can make a huge difference when you’re getting ready to sell a property.

One of the “tricks” of real estate investing involves evaluating deals. After all, in order to know that you’re making the right choices - buying the right types of property, selling in the right market - it’s essential that you evaluate the deal and make sure that it will help you to reach your goals.

When we are talking about evaluating deals, however, it’s important to recognize that there are different real estate investment strategies and that, therefore, a deal that might look great to one investor may not be good for another:

(source)When investing in real estate, there are long-term and short-term investments. Rental Properties are long-term investments, while flipping houses would be short-term investing. There are pros and cons to both types of real estate investing. To determine the right real estate investing choice, decide what you want to achieve and have a clear vision of your investment goals.

When it comes to evaluating real estate goals, it is essential that you are taking a look at the goals that you have set for yourself. Whether you are a long term or a short term investor, you’ll find that knowing what you hope to accomplish will be invaluable when it comes time to evaluate the deal.

By evaluating each deal - and looking at your potential investments on a one by one basis - you will stand a far better chance of achieving the real estate investment success that you are looking for.