Real Estate Professionals

Category: Real Estate Professionals

holdfolio-plan

Aug 9, 2022

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Real Estate Investment Strategies Every Investor Should Know

Many want to invest in real estate because of the industry's stability and potential. But not everyone has the time or capital to do so. If you've been considering getting into the game, you should know a few things that may help you do well.The real estate business has been on the rise in recent years. Many investors are taking advantage of the opportunity. But finding the right investment opportunities and then coming up with the capital to make those deals happen can be challenging. Several investment strategies work in today's real estate market. But it's essential to learn all the different approaches, including those with the best chance of success.  What to Note About Real Estate Investing Real estate investment is a big deal. This investment often demands time, research, and money. However, not everyone has the knowledge or resources to invest well. There's more to it than just purchasing a house to rent it out. This guide will help you make intelligent decisions about real estate. — Location  The most crucial element for real estate investing is location. Residential property valuations heavily depend on the status of the community, green space, scenic vistas, and proximity to amenities. When valuing commercial real estate, accessibility to markets, warehouses, transportation hubs, freeways, and tax-exempt regions is crucial.A crucial factor in choosing a site for a property is to take a medium- to long-term view of how the neighborhood's projection to change during the investment period. You can get in touch with government organizations in charge of zoning and urban planning to learn more about the prospects for the area around the property you are contemplating. Doing this will help you decide whether the long-term planning in the region is fit for your investment strategy.  — Potential Real Estate Purchases  Consider this: how long does it take to locate the ideal investment property? After that, become familiar with evaluation methods to decide whether a property is a good fit for your portfolio of investments. Usually, potential investors look at the properties in person, examine the surrounding areas, and carefully review the information in Comparative Market Analysis (CMA). — Be Careful with Leverage  Even real estate specialists face difficulties from overleveraging. Real estate ventures might fail due to a lack of cash and significant debt commitments.Although loans are helpful, they could be costly. You make a long-term financial commitment in exchange for service now at the cost of interest. Make sure you are familiar with handling these kinds of loans and that you avoid high debt levels. Take into account the following:Select the mortgage product that most closely matches your circumstances. You should carefully research different types of mortgages because each has a unique risk profile.Look around to find good deals with cheaper interest rates. Know the terms, conditions, and additional fees the mortgage lender may impose.— Pay Attention to Mortgage  Understanding the several types of mortgages available, including the associated risks and benefits, is critical to your success in real estate investing. To be eligible for an investor mortgage, you must have 20% of the property's purchase price. Compare mortgages to identify competitive interest rates and exercise caution when considering investment mortgages that require no down payment, adjustable rates, or balloon payments. — Your Credit Score  Your lender's terms depend on your credit score, which also influences your ability to qualify for a mortgage. You can access better terms if your credit score is higher, which might result in significant savings over time.The finest mortgages are available to you if you have a credit score of over 800. If necessary, find out how to improve your credit score. Real Estate Strategies Every Investor Needs to Know Investing in the real estate market is one of the surest ways to build long-term wealth and generate income. But it's a competitive field, and you need to know what you're doing to get ahead. First, housing values are significantly less erratic than the stock market and have a minor association with real estate. Multiple tax incentives are also available to property owners, which increases the return on investment. With that in mind, here are different investment strategies in real estate. 1. Wholesaling  Finding affordable investment properties is the business of wholesaling, after which you rapidly sell them for a modest profit. The key to this firm is finding good bargains by using your skills in marketing and negotiation.Wholesaling is not a passive investment strategy, just like flipping houses. Wholesaling, sometimes referred to as selling by assignment of the contract, is one of the options open to an investor with poor credit or limited access to finance. Being successful at wholesale investment requires various skills and abilities. Below is a rundown of wholesaling in real estate: Find a property, work out a deal on the price and other terms, then put together a purchase agreement. Identify a purchaser for the property. Sell the property under the conditions of the deal made with the buyer. The seller receives payment. The buyer is now the owner, and the wholesaler is due a finder's or assignment fee.Wholesaling is perfect for you if you're good at making sales. If you don't like the idea of making sales, you probably shouldn't use this investment strategy.  2. Rental Residences For anyone with DIY renovation skills and the willingness to supervise renters, owning rental homes might be a terrific opportunity. However, this tactic needs a sizable amount of funding to cover the void months and the upfront maintenance fees.Employing a property management company is crucial for those seeking passive income. A property management business will manage everything for a charge, including security deposits, tenant upkeep, and evictions.Additionally, knowing what amenities to provide tenants with and how to set rent appropriately with the market is crucial. A home could stay empty if it has insufficient amenities and excessively high rent. 3. Real Estate Investment Trusts (REITs) Real Estate Investment Trusts invest in a range of real estate assets, including office buildings, single-family homes, and everything in between, including data centers and apartments. REITs fund the running expenses for real estate assets.A common and highly liquid way to invest in real estate is through REITs, frequently traded on well-known stock exchanges like stocks. Investors who desire to put money into real estate without engaging in conventional transactions might choose a real estate investment trust.Usually an excellent source of consistent income, REITs are mandated to distribute 90% of their profits to shareholders as dividends. In contrast to a traditional corporation, REITs avoid paying corporate income tax doing this. Conventional corporations get taxed on their profits and have to determine whether or not to distribute their after-tax gains as dividends.Finally, every real estate investor must know the difference between equity REITs and mortgage REITs. Equity REITs are more convenient because they represent building and real estate ownership.Mortgage REITs are about income from real estate mortgage financing and dabble in Mortgage-Backed Securities (MBS).Unlike other investment strategies, REITs are truly passive. They are similar to mutual funds and allow you to own a piece of several bonds or stocks.  4. BRRRR Investing  BRRRR is an acronym for Buy, Remodel, Rent, Refinance, Repeat. It's an excellent method to begin your investment career without incurring losses while building a rental portfolio.Just like the acronym denotes, this strategy comprises carrying out the following actions: Purchasing a property below market value  Repairing it Locating tenants Refinancing Repeating the procedure utilizing the money saved from renting and maybe a cash-out refinance.When purchasing the property with short-term cash or financing, you refinance it with a long-term loan after it has been repaired and stabilized. If done correctly, you can withdraw the majority or the entire amount of your initial investment for the following agreement. 5. Property Flipping  Flipping properties requires significant real estate appraisal, marketing, and renovation expertise. House flipping involves money and the capacity to make or supervise repairs as necessary.Renovations for a long-term rental differ from flips because a flip involves renovations followed by a sale. The speed of sale of the property serves as a barometer for flipping success.One such example is the desire of real estate investors to quickly and successfully resell the undervalued homes they purchase.One drawback of this strategy is that flipped could get into difficult situations if they can't sell the property quickly. Losses may keep mounting if they don't retain enough cash in hand to cover the mortgage on a property over the long term. 6. Real Estate Investment Groups (REIGs) For those who want to own rental property without having to manage it, real estate investment groups (REIGs) are the best option. Groups of private investors pool their resources and expertise to make real estate investments using a variety of tactics.REIGs are flexible in their choice of organizational forms, membership dues (if any), and levels of participation. However, access to capital and funding is necessary for investing in REIGs.REIGs are different from REITs because they are not subject to stringent regulations. Rather than being subject to government laws, private contracts regulate REIGs.The investment group manages the marketing of vacant properties, rent collection, property management, and tenant screening in return for a portion of the monthly rental income. When the properties sell, investors in a Real Estate Investment Group profit from their shares of any equity growth and recurrent rental revenue. 7. House Hacking House hacking involves living in a house that generates revenue. Homes in this category include duplexes, triplexes, and other properties with additional rentable space (like a guest house, basement, or spare bedrooms).Another way investors house-hack is by getting a loan from the Federal Housing Administration (FHA) or the Veterans Affairs (VA). You're good to go with a small down payment to buy a small, multifamily building.This strategy aims to cut your overall housing expenditure by renting out a portion of your property. Savings from home hacking rentals are used as down payments on rental properties till funds are available.One disadvantage of investing in rental property is the potential need for a sizable down payment. However, the fact that you can learn about the rental market while residing in your rental makes house hacking an excellent method. After living there for a while, you can leave and turn the house into a long-term rental. 8. BURLBURL is an acronym for Buy Utility, Rent Luxury. The guiding principle of this strategy is that investing in real estate with a higher cap rate enables investors to recover their initial costs more rapidly and begin turning a profit.Paying attention to this rule is more crucial than ever if you want to enhance your lifestyle and net worth. With this strategy, an investor might be able to rent out luxury properties with a modest cap rate, recouping their original investment and starting to turn a profit gradually. Direct Vs. Indirect Real Estate Investment  Actual property ownership and management are considered direct real estate investments. Purchasing properties through collective institutions that hold and administer them, such as REITs or crowdfunding, is known as indirect real estate.Below are some of the implications of direct and indirect real estate investments. — Direct Real Estate Investment Direct real estate investment entails purchasing a specific property or a share in one, like a residential or commercial building. Rental revenue, property appreciation, and earnings from businesses that depend on real estate are how to direct real estate investors to profit from their investments.Increased control via direct investing—your control over direct investment in total. You can choose everything, including the venue, asset class, financing arrangement, financial strategy, exit strategy, and others.Direct investing has several drawbacks, one of which is that it takes time and effort. An additional drawback is financing. Investors frequently require a mortgage or loan to pay for their assets. There is a possibility that you could stop making payments on the loan if the market collapses or if you have trouble locating quality tenants. — Indirect Real Estate Investment On the other hand, purchasing shares of a fund or a REIT entails investing in the company's overall investment strategy, where the fund managers are in charge of all the choices. You would have very little to no influence over any investing decisions.Yet, it's easy to get started with indirect investing. Real estate investing requires money and effort. However, investing in REIT is similar to purchasing corporate stock. You open a brokerage account and are prepared to fund it with even a small investment amount.Additionally, indirect real estate investments provide better liquidity. Typically, you cannot just turn a rental property into its cash equivalent; you must prepare the property for sale, promote it, receive offers, negotiate the terms of those offers, and then enter escrow and close the deal. Finally, indirect real estate investments offer greater diversification. You can invest in several REITs with varied investment strategies that cover a wide range of asset classes in numerous geographic regions by purchasing shares of REITs.Most investors prefer diversification. To optimize their prospective returns, investors with high-risk tolerance can choose to focus all their investments. The Bottom Line There are many ways to penetrate the real estate market. And one strategy isn't strictly better than the rest. Your strategy choice as a real estate investor will depend on your business plans and objectives. Real estate investing will always need you to weigh your options and choose what is best for you. When you invest directly or indirectly, you must compromise on issues like liquidity, diversification, simplicity of entry, and control.

Jul 11, 2017

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Property Management: Preparing for the Back to School Rush

How can landlords and property managers prepare for the end of summer rush before school starts?Late spring and summer are considered peak season for home buying and selling. This can result in a back to school rush for tenants to relocate and get into new places before school starts.When you’ve got this much action all at once, it can get really crazy. If you aren’t prepared it may become very stressful and expensive. Stay ahead of the game, and you’ll keep earning the loyalty of the best tenants, and keep your returns up.Preparing for Exiting TenantsThe first step is to get ahead of the game on existing tenants. If you have leases renewing you want to touch base early and get new leases signed. You want to keep your good tenants and have a shot at talking them into staying. You also want to know if they are leaving as soon as possible. Then you can capture other movers in the market and get fresh rental property ads up before everyone is locked down for the next year.Prepare for TurnoversOne of the worst blunders real estate investors make is waiting to put property management in place after a new lease is all closed, and it’s time to collect rents. Savvy investors get property management in the game before the change in tenants happens. A good property manager can help with the needs in getting the property ready, the rental process, and ensuring a smooth turnover.Bring in Extra HelpWith more phone calls, move-ins, and repair requests expected at this time of year, it is smart to bring in extra help. This could just be a part-time outsourced assistant. Factor in what it takes to line up additional vendors and backup vendors for landscaping, turning over units, and handling bookkeeping and tenant screening.Home WarrantiesHome warranty plans can be a huge help at this time of year. Between new rental units, new tenants in units with older appliances, and perhaps new appliances being setup, there can be a lot of glitches. These can be a big time and money drain. Home warranty plans can help eliminate or minimize these expenses and disruptions.Inspections and Preventative MaintenanceThis is a smart time of year to set up routine property inspections and tackle any maintenance issues in advance before they get more expensive or disrupt the ability to keep units occupied. Preventive inspections of the heating units and winterizing the A/C unit is good to schedule for early fall.Better Property Management SoftwareBetter software may help streamline bookkeeping, reporting to any investor partners you have, and with accurately tracking property condition. These programs are constantly being updated, with new companies offering better and better solutions. Make sure you know your options and pick the one that suits your business. Preparing ahead of time and getting the proper players in place can get you ahead of the game and help you to deal with the back to school rush. Don’t let the big yellow bus, with the flashing red lights, get in front of you and hold you up in leasing your properties!

Jul 7, 2017

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10 Simple Ways To Save Time Managing Your Properties

 Property management can be a major time drain if you do not find ways to manage your time. Doing so is a crucial part of the bigger picture, of building a highly profitable real estate portfolio. The more efficient you can be in this part of your investing, the better overall returns you can achieve while preserving time to actually enjoy the rewards of real estate investment.Check out these ten simple ways to streamline your managing your properties.....Accept Online Rental PaymentsOne of the ways to most dramatically streamline property management is to start accepting online rental payments. It will help cut down on time spent taking payments in-house or following up with bank statements and deposit slips.  This can also make it easier for tenants to stay on track with their own rent payments.Get a BookkeeperUnless accounting was your major, and you love it, leave it to someone else. Having at least a part-time bookkeeper can really pay off in maximizing annual tax breaks, and countless hours in pulling together receipts and documents at tax filing time.Proactive Inspections & MaintenanceSlash the time involved in fielding complaints and repair requests, dealing with juggling vendors and additional bookkeeping by staying on top of regular property inspections, and tackling maintenance in advance. Small fixes done early can save many weeks and thousands of dollars.Freedom to make RepairsWhether you are a rental property owner with a property management company, or you are doing the DIY thing and are directly dealing with tenants, consider giving them more leeway to make repairs. Do you really need to personally handle every time a tenant locks themselves out, a toilet gets clogged, or a fuse blows? If it is going to cost less than $150 or $250, why not just give them the discretion to fix it?Renew Leases EarlyIdeally, you’ll know whether tenants are staying or leaving at least 60 days before their lease expires. This way you can work with tenants who are on the fence, which can save an enormous amount of time in turnover work. Or at least you know, and can minimize any vacancy periods.Release Deposits on TimeNot handling potentially explosive legal issues fast can quickly create a lot of work and expense. That inevitably snowballs and impacts your finances in many ways over time. Deposits are a great example. If you delay mailing deposits back to exiting renters, that can lead to all types of problems, versus just handing them a check on the day of your move out inspection.Deliver Default Notices on TimeThe same as above applies to late notices. Train your tenants that if they are late you will start the eviction process. If they can come up with the money, that’s great. It’s also less likely they’ll let it go that far, and create a new turnover situation.Pay Vendors FastWhen you drag your feet paying vendors, they drag their feet. It’s going to cost a whole lot more dealing with late penalties, digging up old invoices, and in time on the phone. You may even wind up being limited to only being able to work with the worst local vendors who can’t get employed by anyone else.Streamline Tenant Selection ProcessIn your tenant screening process, go beyond the credit score or background check and choose who you think will maintain your property the best. The tenant selection criteria and screening process have to be process oriented and very cut and dry with no gray areas. By treating all applicants the same and completing the same process for each person it will help avoid fair housing and/or discriminatory issues.Passive Income InvestmentsOne alternative to cut out the need for virtually all the above is simply choosing passive income options, like turnkey rental properties, or investment models like Holdfolio which come with full-service property management.When looking at the time expenditure for managing properties, it is wise to take into consideration all of the factors that eat up the most time for you.  Where can you cut, who can you outsource, and how can you ensure that you aren’t a slave to your properties?  

Jun 27, 2017

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5 Types Of Insurance Coverage Rental Property Owners Need

What type of insurance coverage do you need for your rental properties?Rental property owners need insurance coverage. You may not love making premium payments, but you’ll be glad you’ve got it when something happens. If you plan to finance real estate investments you’ll often also find that insurance is mandatory.Here are five types of insurance coverage you need to know about…1. Title InsuranceTitle insurance covers your rights to ownership and use of the property and helps cover legal defense if issues arise. You do not want to buy property without this. Every dollar of your investment and future income can be on the line. There is a lot of fraud out there today, and without title insurance, you are at risk.2. Hazard InsuranceThis is your basic property insurance. It typically covers fires and other common forms of damage. This is usually based upon the amount of the loan you have on a property, or the cost to rebuild the property. Make sure you keep the amount of coverage updated as your property value increases.3. Special Disaster InsurancesBasic hazard insurance is very limited coverage. It typically does not cover a wide variety of other natural disasters which can destroy your property. If you are in a flood zone you will typically need special flood insurance. This is normally very inexpensive. Those in coastal zones may need windstorm or hurricane insurance which also can be very expensive.4. Renters InsuranceHazard insurance doesn’t cover tenant belongings. You don’t want to be on the hook for your tenants’ furniture and personal items if there is a fire, flood, or break-in. Typically, landlords will require that renters obtain their own renter’s insurance, at their own expense. This should be laid out in your lease.5. Umbrella Policy Insurance CoverageThere is generally a discount when you group all of the properties together and this also provides ease of management. If you do enough deals, and own properties long enough you’ll run into something. Often loopholes in the above policies will mean you aren’t covered by them, or they may not provide enough coverage. An umbrella insurance policy can be used to cover you and act as a second layer of protection across all of your real estate business and assets. This can help cover issues like “dog bite” lawsuits.Keeping in mind the need for all types of insurance coverage and this will make your property management experience a smoother and less risky endeavor.

Jun 23, 2017

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Real Estate Success: 10 Professionals You Need In Your Camp

Who are the essential professionals you need in your camp before you start investing in real estate? It is important to keep up your momentum when getting started in real estate investing. Yet, you also want to make sure you are investing wisely and can enjoy a smooth process which delivers the best possible real estate success.Here are the first five professionals you need to connect with before you invest: CPA Your actual investment returns will depend a lot on taxes. There can easily be a double digit difference in what you get to keep, depending on how you set yourself up, and how you file taxes. A good tax professional can help you strategize and get it right before you wind up with a big income tax bill. Attorney Sooner or later you will want or need an attorney. It is just smart to have one already pre-screened and on call for when that time comes. You may want a specialist real estate attorney who can help negotiate contracts, and aid you in defending against lawsuits. It might also be helpful to have a family law or asset protection lawyer who can help you personally set up the right structures to grow and pass on your legacy. Insurance Agent Part of real estate success is the reduction of risk. Even if you don’t need direct property insurance to cover individual real estate assets, you will probably need an umbrella policy, life insurance, and other types of insurance to cover your assets in various areas.  Capital Partners Even if you don’t plan on needing credit or extra cash to invest, it can be wise to have relationships with these sources in advance. It will help you avoid any cash crunches or missing out on any great opportunities. This may be private lenders, mortgage brokers, or angel investors. You will also want to build relationships with bankers to make your transactions go more smoothly. Experienced Mentor Having someone you can pick up the phone and call or shoot an email to for urgent help or an experienced second opinion can make all the difference in your business decision making. Find someone who is experienced in what you are doing and who shares your values. If you plan to be an active real estate investor, make this a full-time thing, or to start a real estate business, you will also want these five people in your camp before you get going. Contractor Having a trusted contractor on call can be invaluable for fast property inspections, repair estimates, timely turnovers and getting work done quickly. Real Estate Agent Whether or not you actually use a Realtor to help buy, sell, and rent real estate, investors can find them very useful for making sense of the market, and keeping on top of evolving trends. Marketing Expert You simply can’t do it all as an investor. Even if you have a strong marketing background, the most profitable use of your time is probably inking new deals. Still, with 90% of your success relying on your marketing to secure deals, fill them with renters, and resell them, make sure you have an expert on your team. Virtual Assistant An assistant can be used to protect and free up your time so that you are getting the best ROI on every hour of the day. A good assistant can handle a wide variety of time-consuming tasks, including finding the other people on this list. Project Manager As you grow your real estate business, taking on a big multifamily property, or are building new homes to rent out, a project manager can save you time, and help things go smoothly. This could be a true project manager for a specific mission, a property manager, or a general manager for your organization. Putting some thought into what and who you need to have in your camp to be savvy and efficient will help direct you towards the path of success!