The Myth of Real Estate Investing and 7 Ways to Make the Most Money From Your Property Investment

Investing in Real Estate has become urban legend the myths abound about how much you can increase your wealth by investing in real estate and in particular residential real estate, so much so that the average Joe believes that making money and creating wealth when it comes to real estate is a given and in alienable right so to speak.

Average mums and dads are jumping onto the real estate bandwagon with no knowledge or training in the fundamentals of investing. These folks are fed the myth that using their equity from their family home will miraculously make them into real estate tycoons, all to often these poor misguided souls end up losing the home and everything else in their pursuit of real estate’s Eldorado.

To perpetuate the myth these naive investors are advised to hold on to their real estate investments for ten years or longer, this is great in theory if you are in your twenties and do not need the profits in the immediate sh rt term to help fund a decent retirement, unfortunately when you look at the demographics of these investors they are in their fifties with plenty of equity in their family homes most usually own their family home and have neglected doing any thing for their retirement till now and in horror discover that they will not be able to have their current lifestyle on the pension.

Little wonder real estate investment seminars are packed with these late bloomers all hoping to make a fortune by investing in residential real estate, the seminar presenters ensure that is all these folks here, after all this is a valuable gravy train.

Try this little trick next time a telemarketer calls and asks you to attend a real estate investment seminar, and the telemarketer asks you if you own your own home and how much equity you have in it, reply by saying that you have none, I will guarantee that before the word none leaves your mouth they have hung up on you, interesting isn’t it?

Tragically no one is told when a real estate investment has gone bad or failed to perform as happens on a daily basis with the stock market, why is this so? One of the major reasons are the volumes of money that Governments, Banks and marketers make from selling the residential investment myth, that is also the reason why Governments have been loathe to legislate that investors under go an investment training program before they can invest, as once the myth is busted the gravy train will not be as plentiful and the flow on effect into allied industries would be catastrophic.

This myth is well and truly busted as you can loose everything from a failed real estate investment and there are no such things as guaranteed growth with out doing some work for it.

Here are 7 simple ways to maximize your money from real estate investment

1. Know your profit before you buy

Do your due diligence and find out if the price you are paying is below market value, a simple rule is can you resell this property today for a profit and if so how much.

2. Type of Neighborhood?

The community surrounding the property can change in a variety of ways that can adversely affect your real estate income property. Increasing vacancy, for instance, can lead to reduced rents, which in turn means reduced maintenance causing building deterioration, This can cause a roll on effect if more properties start to decline in the whole neighborhood,compounding the problem.

The nearby construction of facilities such as prisons, sewer treatment plants, and airports will also likely have an adverse effect on the area. Also, perhaps more subtle and slower in coming, is a decline due to increased crime, perhaps resulting from an adjoining neighborhood spill over. If you still want to invest here find out what it is that makes it special that everyone else has over seen, often gems are discovered with a little digging,

3. Impact of poor or neglected Infrastructure

The impact of being directly under the flight path of airplanes, construction of a major highway or intersection can limit access to the property, cause noise and dirt by the construction and all this can have a negative impact on the property’s ability to attract and keep tenants. The end result may be an increase in your investment real estate value, but construction and major works can take up to a year or more and during that time you could expect your real estate investment value to drop. Or worse still the infrastructure is neglected and the local authority does not have the Tax base to start remedial works to bring it up to standard,

4.Controls

Governmental controls and regulatory changes to zoning can adversely impact real estate investment properties. Real Estate investors that purchase raw land for development, for instance, can see their plans grind to a halt because of a building moratorium or anti-development sentiment. All of which results in downturn in value.

5. Finance

Difficulty obtaining finance or the lenders require more of your capital to top up your borrowings,yers for your rental property if you decide to sell, This type of condition is prevalent at the moment as lenders are devaluing the amount that they are willing to lend against real estate, in most instances I have seen lenders valuations or real estate down by up to 30% to 40% of the contract price depending on the region this could be higher again, this trend should alert the investor that the deal they think is great may not be so great after all, unfortunately marketers have this covered as they are dealing with naive and unsophisticated investors by saying that the lenders always value the property for less, if that is what some one lending you money says about your intended investment wouldn’t it be prudent to listen and renegotiate or if that is not possible walk away from the deal.

6. Lack of or no maintenance.

If your property is the run down, get it brought back up to a good condition. This will make it more appealing to prospective tenants

7. Pressure to sell

Highly motivated sellers may reduce a property to a bargain basement price and smart investors watch for property owners who must sell to take advantage of the owner’s strong motivation to quit the property. Always try to avoid ever reaching the moment when you are forced to sell.

These are just of many tips I use to maximize my profits from my real estate investments and so can you.

Real Estate Investing For Beginners – What Every New Investor Wishes He’d Been Told Before

As a new real estate investor, when you begin researching information on real estate investing for beginners, you’ll find that there are a lot of gurus and mentors out there looking to sell you high priced information. You’ll also find plenty of chatter-boxes at local real estate investing forums and other watering holes that will share (brag?) all day long about their investing trials and tribulations, especially if they have tenants or rehabs. (Those types of projects tend to be fraught with problems, something that can scare beginner real estate investors off – when maybe it should be attracting them!) You can also find some excellent offline resources at the library, bookstore and your local investor club. Maybe you’ll even find someone who’s out in the trenches on a regular basis and is willing to take you out on the streets to show you some of his properties.

What you won’t find as often, especially for free, is a coherent, executable business plan detailing what it takes to get going with real estate investing as a beginner.

What you really need is a handbook entitled: Real Estate Investing For Beginners that lays everything out for you A to Z, with what to do at every step along the way.

Unfortunately, putting together a super and useful reference like that is time consuming and you have to consider that a) If someone is already making money investing in real estate, her time is valuable, and b) if she’s going to invest her valuable time in putting together a real estate investing guide for beginners, she’s got to have an angle.

That’s an excellent thing to keep in mind – everyone in the real estate investing education industry seems to have an angle. They are directly incentivized to make you feel that real estate investing is easy, you can do it, and if you just part with some money, they will give you the handbook with all the answers.

BEWARE: If you can’t figure out how they’re getting paid, you’re missing something… Everyone wants to get paid in this business.

Well, I hate to tell you… I don’t have that comprehensive handbook for you either.

That’s the bad news.

The good news is that I can give you some very important words of wisdom that helped me when I was getting started in real estate investing as a beginner. (And I started right out of college without a good job or anything, so don’t think it can’t be done.)

Real Estate Investing Observations – What Every Real Estate Investing Beginner Needs To Know:

1) You will have to trade time or money to get what you want in real estate. You can’t get something for nothing, so even if you buy an expensive course to get someone else’s experience and shave years off your learning curve, you’ll still HAVE a learning curve. Plus, you’ll need to find leads, and that type of marketing takes (you guessed it) time and/or money.

2) Leverage cuts both ways. When the market is going up, leverage can be a great ally in helping you acquire more property with less of your own money. However, when the market is soft or declining, as also happens with real estate market cycles, having a lot of leverage can put you “upside down” on your equity and cash flow – a very risky situation. Protect yourself by “making your money when you buy” and passing up those “skinny” deals.

3) It’s all about NEGOTIATING with the motivated sellers. A lot of courses make you believe that if you find the motivated sellers, you can just pluck up the deals like daisies in the orchard. That’s almost true. Whether you’re working in commercial or residential real estate, you’ll get much better deals when you negotiate with a motivated seller. However, the key is that you must NEGOTIATE. You have to make offers that will work for you and engage the sellers in conversation. Very rarely will the buildings be lying these listed for 50 cents on the dollar (if they are, they’ll be snapped up by other investors). You have to find sellers that you think may be motivated and offer them your low cash offer or terms offer in order to see if they’re willing to work with you. Engage them in the conversation by making lots of offers, and NEGOTIATING with the ones that are motivated.

4) Figure out your rate of return. Sometimes, when you don’t have a deal, it’s easy to think “any” deal would be good. However, sometimes the best deals are the ones you PASS on – you “make” your money by saving yourself from some expensive mistakes. Don’t waste time on property that doesn’t make sense when you run the numbers. Don’t get emotionally attached just because someone says they’re motivated or willing to work out terms with you. Run the numbers. Always focus on the numbers.

5) You get paid for solving problems. This is a business with a lot of problems. Sellers can get very emotional, or have a lot of financial trouble, at the time that you’ll be working with them. That’s stressful for anyone, especially when the transfer of a large asset like a house, apartment building or office/retail center is involved. Realize that you may go through some challenging emotions of your own. That’s natural. If you can hold it together and survive the up-and-down roller coaster, you should do okay.

No one says real estate is easy unless they have a course to sell you. It can offer some great returns, but there’s a reason not everyone goes after them. Not every property is a winner and finding and acquiring the winners can be a challenge. However, if you are committed to making your real estate investments work for you, then focus on getting yourself educated and staying in for the long run.

If you’d like more information on what it takes to be successful in real estate – From two real people who have done it with single family homes and commercial real estate – then please join in the conversation at TheRealWealthBlog [http://www.TheRealWealthBlog.com]. This is a great guide on Real Estate Investing [http://www.TheRealWealthBlog.com] For Beginners

Now, just to be “authentic” with you, I think it’s fair to share our angle, since I stated that everyone has one. Currently we are offering our services “by the hour” as real estate coaches and consultants if you have any questions on deals you’re working on or if you’d like to get going.

We both have logged hundreds of hours helping students get started with real estate investing across the country, and we’d be happy to help you, too. Without the monthly residual fees or high cost-of-entry coaching programs. If you need help with your investing strategy, let’s see if we’re the ones you need.

Real Estate Investing in Foreclosures

Miami real estate investing is not very hard to learn, even though that there are many facets that are essential to understand before attempting to start investing. While many books and seminars are offered on investing only a few deliver the desired results. Investing is not taught in any university and it is more of an art than an exact science. It requires a lot of perseverance and determination. Many investors learn by trial and error although a mistake could be very expensive and usually devastating. Numerous millionaires made their money through real estate investments. Information, education and research are major considerations for an investor to be successful.

Real estate investing in Miami, Florida is a full time business where investors are constantly trying to maximize their profits and minimize their risks in other to generate wealth over time. Investing is a verified long term wealth creator. It is a numbers game and many of the transactions will not work but it is all worth it when one deal goes through and all your hard work is rewarded. It takes a lot of time and effort to effectively dominate the art of real estate investing. It is a risky business but it is the best way to create lasting financial security. Investing in Miami real estate is an excellent way to make a positive monthly income and built long term wealth and obtain financial independence.

Investors in Miami real estate have recently taken a beating and many have seen their investment properties lose value. An investor should not panic and sell in this market to avoid huge loses. Since it is a long term business an investor should realize that the time is now to rent the property and hold until the market turns around. If an investor requires a predictable and safe return on investment then investing in Miami real estate is not the answer. The business of real estate investing is very risky, and unpredictable but well worth the effort. An investor should consider buying foreclosures and bank owned properties. The Miami real estate market has hit bottom and it should be bouncing back very soon.

Miami real estate investing is different than various types of investing. An investor must overcome many roadblocks and obstacles. Usually finding financing is the single most overwhelming challenge an investor will face when trying to purchase Miami real estate. Using leverage in the business is common so arranging financing is very important. Do not purchase investment property with no money down. Little or no money down has caused many properties to go into foreclosure recently. Investing is not as perplexing, time consuming and financially draining as one might imagine.

Bank owned properties or Reo’s and Short Sales are a good way to start to look for a good deal in Miami real estate to purchase. The list of bank real estate owned (Reo) properties is huge. Not all banks want to discount properties so finding a good property to buy takes a lot of work and patience. Short Sales are the new trend in speculating in Miami real estate. Banks are not very eager to short sale their inventory and it takes usually about two months for the bank to accept or reject the offer. Government foreclosures are another to avenue to search. These properties include HUD, Housing and Urban Development, VA, Veteran Administration, FNMA and Freddie Mac. HUD homes are very popular and usually they will sell to the higher bidder in a weekly online auction. Investors are allowed to bid when the property does not sell to owner occupants. These HUD-FHA foreclosures properties are offer an excellent value. Foreclosures remain the best way for investors to start in the Miami real estate investing business since most of them have instant equity.

The best way to start investing in Miami real estate is buying foreclosures. The tremendous amount of foreclosures now in the Miami real estate market overwhelmingly gives the investor a lot of inventory to choose from in order to purchase the right property at a discounted price. This opportunity will more than likely never be available again and investors should take full advantage. An experienced Miami real estate agent who specializes in foreclosures is essential in order to guide the investor. The agent must have access to current bank owned REOs, foreclosures, short sale properties, pre-foreclosures government foreclosures and other distress listings. Investing in Miami real estate is a very exciting and rewarding business.

Real Estate Investing – Books,TV Infomercials, and Seminars

Real estate investing has become popularized today because of real estate investing TV infomercials and traveling seminar circuits. But real estate investing has not always been so popular.

In the 1960s, William Nickerson wrote, “How I Turned $1000 into Three Million in Real Estate” and “How to Make a Fortune Today Starting from Scratch.” It was one of the first real estate investing books to get national attention. A little later, Al Lowry authored “How You Can Become Financially Independent by Investing in Real Estate.” Al Lowry might be called “the father of the modern-day real estate seminars,” because he was the first to hold seminars as a result of his book sales.

But it was Mark Haroldsen who carried the real estate investing book/seminar thrust to the next level. Haroldsen wrote, “How to Wake Up the Financial Genius Inside You.” If you were tuned in to real estate investing at that time, you remember the newspaper and magazine advertising showing a picture of suave and bald-headed Mark leaning against the front hood of his Mercedes. The picture appeared everywhere in full page ads of major publications. And as Mark began selling his books, he began holding real estate investing seminars. I have had lunch with Mark and Al Lowry as they swapped stories of the advertising blitzes that vaulted them into national prominence for their real estate investing prowess. Mark later wrote “The Courage To Be Rich” and “Tax Free.”

But it was Robert Allen who capitalized on the previous groundwork by Lowry and Haroldsen. Robert Allen was reportedly paid $1 million advance royalties for his best-selling book, “Nothing Down,” a compilation of 50 techniques for buying property with no money. Robert had learned these techniques from several years experience with a commercial real estate firm. He later wrote “Creating Wealth” and “Getting Started in Real Estate Investing.” The Robert Allen Real Estate Investing Seminars became a phenomenal marketing bonanza. Conventions were held in the major cities across the country, like Orlando, LA, Dallas, Chicago and Atlanta. The authors of various real estate investing techniques spoke at these seminars, but their spiel focused on selling packages of real estate investing materials that they offered for sale. Millions of dollars of real estate investing materials were sold at these 3 day conventions. The convention frenzy ushered in what has since become known as “The Nothing Down Real Estate Movement” of the early to mid-1980s.

I keep all of these books in my personal library, and you can probably still find them in your public library and book stores. There’s a lot of great information in these books that can make you very knowledgeable, even though some of the ideas are out-dated.

We are now presented a variety of ways for making money in real estate investing in TV infomercials, books and seminars. Which is best? Who can say? Real estate investing is learned through trial and error. Real estate investing skills and techniques are acquired by practice. I don’t think anyone can dogmatically recommend a technique best for another person. Every real estate investor has unique needs and is in a unique situation. Objectives of real estate investing differs.

However, if you are limited with real estate investing educational dollars and need to generate quick return on investment, I think fixing up cheap houses is an ideal beginning point. Real estate investing in makeover properties generates quick, profitable dollars with low risk.