Reasons Now Is a Great Time to Invest in Real Estate

You work hard for your money, but does your money work hard for you? When you store your cash under your mattress (or in a bank if you aren't a weirdo), it will produce next to nothing. However, when you put money into an investment, your dollars go to work for you.

But what is the best "job" for your dollars? How can your money earn the most and offer the least risk? In my opinion, one investment stands head and shoulders above the rest: real estate. 

Yes, real estate is subject to timing; and there are times when real estate is not the wisest investment. However, Erik laine believe that right now might be the greatest time to buy real estate that we'll see for another decade or longer. Here are reasons why. 

-Interest rates are incredibly low.
-Banks are lending once again.
-Prices are reasonable.
-Technology has made investing significantly easier.
-Knowledge is free.
-Your job is unstable.

Ten years from now you'll wish you had started today Of course, we are not telling you that any piece of real estate is going to make sense. You still need to understand what you are doing. You still need to do the math correctly. You still need to hustle to find the 1-in-100 deals that actually makes sense.
Sources:https://www.entrepreneur.com/article/278263

5 Things to Consider When Buy A Multi-Family House

Erik Laine: People have numerous options and/ or alternatives, when it comes to their involvement in real estate. One of the first considerations, of course, is economic, and whether the potential buyer, has committed and made the sacrifices, necessary to have sufficient funds to make a down payment, and maintained a credit record, with sufficient quality, to qualify for funding/ mortgages. One might decide to purchase a multi - family house, either strictly as an investment, or as a vehicle to reduce the cost of home ownership, by living in one unit, and renting out the other. In any case, one must do a personal financial analysis, as well as considering several factors, regarding the subject property. Here are 5 considerations.

Can it be readily rented: 

Unless one seriously considers and addresses this, all other considerations and calculations, become someone limited. Examine the local rental market, and compare your rental units to the competition. If this is an investment property, seek a 6% cash flow, which means the total rents less the taxes, maintenance, etc, come to 6% of the price. If you're living, determine your needs, and which unit might make sense to live in, versus which ones to rent out.

Anticipated realistic rent - roll, and occupancy rate: 

Beware, rental units will occasionally go unoccupied, so factor that into your considerations. Perhaps a good rule of thumb, may be to assume a 75 - 80% occupancy rate, on a yearly basis. It's always better to be conservative! What can you realistically anticipate, in terms of rental income?

Real estate taxes: 

Remember, the owner generally pays the real estate taxes, and collects rents. Usually, these taxes increase somewhat, from year - to - year! Subtract these taxes from your income, when doing any calculations. Generally, they will be collected as part of your mortgage payment.

Carrying charges: 

Carrying charges include utilities, regular/ anticipated maintenance, taxes, etc, as well as regular contributions to a maintenance/ capital reserve fund, for items, such ar roofs, heating/ air conditioning, cement, painting, etc. Have a focused idea on what this will amount to!

Overall condition:

Never purchase unless you first have an engineer or home inspector, take a close look, and issue a report. Know the age of existing roof, heating system, etc. Identify issues which have greater probability of arising, sooner, rather than later. This will assist you in estimating how much to contribute to your capital reserve account, as well as identify issues, which might be deal - breakers!

Article Source: http://EzineArticles.com/9649818

Reasons for Buy & Hold Property

Erik Laine: A few years ago, the concept of owning a portfolio of single family rentals was relatively foreign. However, slowing home price appreciation, the fix and flip market growing more competitive and the availability of low-cost debt financing has given birth to a new class of investor: the owner-operator of single family rental properties. These investors look a lot like traditional commercial real estate investors. They range from large institutional funds, to high net worth individuals to small mom and pop investors. The one critical difference they all share is that, instead of investing in more traditional commercial property types, these investors all invest in residential rental properties, including detached single family homes, condos and town homes and two to four unit real estate investment properties.

Understanding the Buy and Hold Real Estate Strategy

 

Here are a few reasons to consider capitalizing on the new and growing trend of buying and holding residential rental properties:

• Appreciation. Historically,  both residential and commercial real estate have appreciated over time. Buying and holding allows investors to benefit from long-term appreciation. By contrast, fixing and flipping does not offer the same benefit of market appreciation, and it also comes with tremendous pressure to sell properties profitably in a very tight timeframe. Paying too much for a flip property can have quick and significant consequences.

Current Return.  Unlike fix and flip properties, rental properties are income producing assets. They generate stable and predictable monthly cash flows that are attractive relative to bonds and other commercial property types. For cash flow sensitive investors, rental properties are often a more attractive and stable investment option than flip properties.

• Availability of Long Term Financing.  Probably the biggest change in the rental property market – and a key driver of its success – is the new availability of low-cost debt financing provided by Real estate Firms. Investors neither have to rely on raising equity, which can be challenging, nor on hard money lenders, which can be expensive, any longer. Rental property investors can now access five and ten-year non-recourse loans starting at $500,000 with rates starting at 5%.

Sources: https://www.colonyamericanfinance.com/3-reasons-to-buy-and-hold-rental-properties/

Benifits of Our Lease With Right to Purchase Program

1.No obligation to purchase!

2.Ability to purchase the home at any during the 5 year agreement.

3.Only a 12 month lease required, after which you can cancel out as you would in a traditional lease.

4.Security deposit fully refundable.

5.Homes purchased in cash with fast close dates to help assure you get your home at a great price.

6.You choose choose your perfect home from the for sale market, just like you are buying a home!

7.Expands your rental options beyond the low inventory on the rental market.

8.Higher quality homes than you find on the rental market.

9.Foreclosures, short sales & bankruptcies accepted.

10.Stated incomes accepted

11.Up to 3 pets allowed (ask about weight / breed restrictions)

12.We can purchase homes between $100,000 - $550,000.

HOW IT WORKS :

CLICK HERE to read more about the program and search available properties.

Start the application process. ($75 app fee per family, 2-3 days for approval)

Set up showings and tour homes for sale just like you are a home buyer.

Once we find the perfect home, we purchase the home for you in cash.

Sign a 12 month lease, renewable for up to 5 years.

Move into your new home! (typically the whole process takes around 5 weeks)

QUALIFICATIONS :

525 credit score minimum.

$50,000 in combined household income.

No prior felonies or evictions.

Soruces:  http://rcmn.com/resources/lease-homes-for-sale-realtyconnect-realty-connect

How to Negotiate Real Estate

Erik laine: In any real estate negotiation, buyers ask and sellers push back -- because if you're the buyer and you don’t ask, you don’t get.While sellers want the highest price and buyers want the best deal, the two have to meet somewhere in the middle for the deal to close. Negotiating for a home is important since this is the largest asset most people own and there’s potentially a lot of cash at stake.

One party always has the upper hand, however. In a buyer’s market, those looking for a property can walk away if they don’t like the terms, since they have many homes to choose from. In a seller’s market, with bidding wars and multiple offers, the homeowner can be as picky about the myriad terms of the sale as his or her agent allows.

“In any market, a truly motivated seller is less inclined to engage in lengthy negotiations -- they just want to get the deal done,” says Mazen Fawaz, CEO of OpenHouse, in Santa Monica, Calif.

For those new to the real estate dance: The negotiations start once the seller receives a written offer. Since everything is negotiable, Real estate agents for the buyer and seller go back and forth in writing, whether that communication is via email or signed forms.

Closing Costs

 

Buyers have to pay prepaid closing costs for their mortgage, which is money that the mortgage lender holds in escrow, for items like taxes and insurance. “A buyer may ask a seller to pay a flat dollar amount toward their closing costs, or up to a percentage for what’s an allowable contribution for a lender.

Closing date

Sellers can negotiate for speed when they need to get their capital out of the home fast; and closing dates will affect buyers' monthly cash flow once they own the home. “Keep in mind, when a buyer closes on the house, they skip the next month’s mortgage payment,

Price

 

Buyers don’t want to overpay or price themselves out of a resale in the future, while sellers want to make sure the deal makes sense for their financial plan.

Home warranty

A buyer can ask for a home warranty, or a seller can offer one. This protection plan covers the home’s appliances and systems, like the air-conditioning and hot water heater, in the event these things break or need repair.

Furniture

Personal property, like patio furniture, chandeliers, window treatments and cabinets, is also up for grabs. “If the buyer wants all the furniture, it becomes very much of a tradeoff and compromise between what everybody wants.

Originally Posted : https://www.entrepreneur.com/article/253732

Landlord Responsibilities for a Rental Property

Erik Laine : A landlord has the responsibility to keep their tenants and the surrounding community happy. Taking the proper care of the rental property plays a huge role in keeping everyone content. Following health and safety codes, performing regular maintenance, paying bills on time, and maintaining the proper insurance are all part of a landlord’s obligations. Learn ways a landlord can protect their property.

Responsibility to Follow Safety Codes

As a landlord, it is your responsibility to follow all local, state, and federal safety codes for your property. These codes can vary greatly depending on the state your rental property is in. You can find the responsibilities on the state level in your state's landlord tenant law, but your town may have additional requirements, so you should always check your local laws.

Maintain the Proper Insurance

s a landlord, it is in your best interest to maintain the correct amount of insurance on your property. If you have a mortgage on the property, your lender will often require you to obtain certain types of insurance. This is to protect them in case of damage to your property, such as from fires, floods, or even a ‘slip and fall’ claim.

Pay Mortgage
If you have taken out a mortgage on your property or a private loan to buy your property, you are responsible for paying this loan back according to the set payment schedule you agreed on. If a mortgage payment is more than 30 days late, it will negatively impact your credit score.

Responsibility to Pay Taxes

Whether you are an owner-occupant of the property you are renting out or have a stand alone rental property, you are responsible for paying property taxes to the government. You will also have to pay taxes on the income you receive from collecting rent.

Perform Repairs

You must not only perform preventative maintenance, but you must also perform repairs on your property. This includes small repairs such as fixing doors coming off of their hinges or unclogging a shower drain. It also includes large repairs such as replacing a roof or rewiring electric. Of course, if you are not skilled in areas such as plumbing or electric, it is best to hire a licensed professional who will make sure the work is done properly and according to code.

Originally posted: https://www.thebalance.com/landlord-rental-property-responsibilities-2124989

Effective Tips For Better Real Estate Management

Managing rental properties can be a tedious process sometimes landing you into legal issues. As a property manager or owner, you should think about preventing problems even before they occur to have an easier time maintaining order. Apart from making your tenants feel worthy, you should also find ways of making the management process easy for you especially when handling large properties or multiple properties. When you are organized in how you handle your property, it becomes easier to keep everything in check and a few tips can help you put in the best measures into the management process.

Get a professional property manager

If you are a property owner with little knowledge of how to go about management, you should consider getting a professional property manager to ease out the process for you. Professional managers with some knowledge and experience in the real estate industry will know exactly how to go about the process and find organizational solutions to ease everything out.

Embrace technology

There are very effective real estate management solutions available thanks to technological advancements. Real estate management software is among the best solutions you can find to make the process easy and organized. Such a solution can improve communications and payments and data maintenance for the property. With the right system you will have an easy time collecting, returning and holding security deposits, as well as inspecting and documenting rental unit conditions before move-outs.

Keep the property in top shape

Regular inspections are very important so you can make any improvements and changes where need be. Recklessness on your part leading to safety and security issues can lead to hefty losses in terms of compensations. You should therefore make a point of making prompt repairs and consider having a security system in place to give your tenants the sense of security they deserve as well as ensure that their safety is not compromised in any way.

Oversee managers

They should be competent enough to keep your property in check. It is therefore important that as a landlord you choose and supervise property managers. Background checks and clearly spelling out their duties will prevent issues cropping out later.

Article Source: http://EzineArticles.com/9642585