Investor Hub

For the person who is just starting out knowing how to be a real estate investor, the safest investment is residential income property. This is real estate that can be rented out to a tenant who plans to live in the property. The tenant pays rent on a monthly basis and that should be adequate for you to make your mortgage payment, pay operating expenses, and produce a small cash flow as a return on your property investment.

The types of residential income properties that we think are university beneficial are well constructed fix up properties that can be purchased at below market prices or value.

When you focused on buying residential income property, it gives you cash flow and tax benefits. The best residential income properties to buy are small apartment buildings and single family rental houses.

There are certain types of investment properties that are better than others. Land can be used for many things but it is not income producing and does not provide any means of tax shelter. Land for development is especially risky because it is often speculative and uncertain.

Commercial income property like office buildings, strip centers, retail stores, industrial spaces is a good investment for the seasoned investor, but involves a level of expertise that most beginning real estate investors do not possess.

Unfortunately, commercial property often suffers from over building and high vacancy rates. Commercial property is also vulnerable to swings in the economy. As the economy slows, small businesses go under, leading to more vacancies and less cash flow. [...] Read more!

If you just beginning to learn the nuts and bolts of real estate investing, I hope this article can get you on the right path to change your whole outlook of making good property investments. Working with the real estate market can be very tough at times and what makes it this way can be for a whole lot of reasons. Maybe you are'nt motivated enough to push forward. Maybe you are'nt getting the proper training to feel confident to go out there. Maybe you just dont know where to start. Here are some places where you can locate good investment real estate property:

- You can start off by looking in the classified section for real estate ads. Key words to look for are: desperate, must sell, moving, foreclosure, divorce, illness, transferred or new job. Make sure you check the Property For Rent section. Owners of vacant property are often very motivated to sell.

- Dont never forget that good agents are invaluable to real estate investors. Look for agents who have worked with government foreclosures. Most government seized properties are sold only through real estate agents.

- Ask your real estate agent for permission to look through old Multiple Listing Service Books. These are books that are filled with properties for sale. In back issues you will find properties listed for sale, information on sold properties, and properties that are off the market. Check these properties and make offers to buy.

- Take a different way home where you work everyday. Drive through several neighborhoods to get a feel for good investment areas. Then write down all of the For Sale By Owner signs you see. If a house looks really interesting, pull up, and go inside to meet with the owner. Take a purchase contract along in the event the owner is ready to make a deal.

- Have you ever found a run down, vacant property that you like but you don't know who the owner is? Call the customer service department at your local title company to find the owner's name and address. If your state doesn't have title companies, go to the state, county or city recorder's office to determine the owner.

You must keep in mind that property foreclosures, bankruptcies and probate sales are listed daily. If your city doesn't have this service then go to your county recorder's office and get a list of foreclosures that have been legally file. The information is a public document. The Freedom of Information Act states that you have the right to know. [...] Read more!

We are considering the type of real estate investment that improves with time, so we must quickly and permanently reject any crepehangers who say it's too late now. I've heard it literally hundreds of times, usually followed by "you bought at the right time. There's no such good buys now." While I was learning what not to buy, I learned something that was most significant at the same time. I learned not to be afraid. It was a most important change in my thinking.

When the real estate investment field held many mysteries that I did not understand, I had the usual fear of the unknown, of the things that might hurt me. But with knowledge and experience comes confidence and fear fades. You, too, will soon experience the same thing. You will examine, evaluate, and decide yes or no. After a little experience, you will not be afraid.

Let us choose a typical case among those whose fortunes I've guided. We will study one which has most of the action taking place in 1959, to confound those whose plaint is about this not being the right time.

About two years ago, Ed R. came to one of my classes in Real Estate Investment. He had a driving force behind him. He wanted to leave a killing job he held as an executive in a large firm. He was not negative. Just as most others have done, he asked me the standard question: "Bob, are you sure it's not too late? So many of my relatives and friends insist that the time for buying properties at good prices and with good returns is all over." I told him my standard answer and he decided to go ahead.

True, Ed R. had some money saved, and he was able to accelerate the process much more than one who starts with one to two thousand dollars. But his case still proves that it is never too late. As he acquired each three-decker or six-family property he put it in order and started the flow of income. Ed did not drain income for living expenses. It was not long before the accumulated income showed a balance of $1,500 or so and he bought another. Today, as I write this, about two years after he started, Ed has some 82 tenants. The income grosses some $6,000 per month, and every tenant heats his own quarters. There are no janitors. I am not at liberty to disclose (he is my legal client) the exact net to Ed, but it is obvious what is being paid off on mortgages. Paid off, by whom? By the tenants! Sure, that's what we started out by saying - this is a wonderful business!

The net cash in hand leaves him in a position to take advantage of any new buys that come along - out of his profits. That's what may be termed the pleasantest kind of pyramiding. Because, let me emphasize this, Ed has almost never bought a building in which he was required to invest much more than $1,500.

In almost every case, the bank loaned some 80 per cent of the purchase price, the seller took back a second mortgage for perhaps 10 per cent and Ed put the remaining 10 per cent down in cash. In a few more years the second mortgages will be paid off and the amount cleared each month will rise substantially.

There is truth in my statement that there is still plenty of room. Do not hold back. [...] Read more!