Get ready for the turning of the tide.

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In today’s “hostile” financial climate we all need to tighten our belts and hold off on spending. The world is changing and big things await those that have patience. Now is the time to save and get ready for the big turnaround.

If you ever wanted to get into the property market the time is coming soon. As soon as the financial tide turns there will be lots of bargains up for grabs. Now I know that there are bargains out there now, but I would caution any one, that wants to be a real estate investor, from buying now. The market, and this is just my opinion, is not stable yet and we are still in for a rocky ride.

Instead of buying every “bargain” now, rather save up for when the time is right. The more cash you have in hand the better. If you have cash, you have negotiation power and you can get property at even better prices. And once you get a foot in the door, at the right time, your real estate empire will grow.

Now there are lots of ways you can start saving and one affective way is to make sure you have the best credit card deal, you will be amazed how much money you can save, and then pay off debt, if your credit card rate is good. And sooner than you know your debt will be paid off and you are financially free.

So start getting ready today and when the tide turns, you will reap the rewards

Can I really invest in real estate with no money down?

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Real estate is a great long-term investment, especially income producing real estate. The problem most people have when it comes to getting into real estate investments is acquiring the money to purchase real estate. The most common approach is to apply for a mortgage. The problem with this method is that the down payment can be substantial. For example a $100,000 home may need a down payment of 20% or $20,000. However, there are some strategies that can be used to purchase real estate with no money down. Assigning contracts, wholesaling real estate, and leasing with an option to buy are a few of the strategies possible.

Assigning contracts can be accomplished by placing an offer on a house and write up a contract on the property between you the buyer, and the seller of the home. Next you locate an investor who will be willing to purchase the property, so you assign the contract to the investor. The key here is to assign the contract for a sales price greater than what you negotiated with the buyer. So far example, you negotiate $100,000 offer to purchase with the buyer, and you negotiate an assignment of the contract to the investor for $110,000. At closing you will receive a check for $10,000.

Wholesaling property can be done if you have access to a hard money lender. The key here is to purchase the property at a discount. For example a $100,000 property you should offer to purchase for $70,000 or less. The hard money lender will supply 100% of the money to purchase and any fix up cost. Then you turn around and sell the property or refinance for a better rate and lease the property out.

The final strategy is leasing with an option to buy. What you do here is you negotiate a lease with an option to purchase with a homeowner, and then you turn around and sublease the home to a renter giving him an option to buy the property in 12-24 months on average.

So yes, you can invest in real estate with no money down.

Where is the profit in Real Estate Investing?

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One of the first questions a buyer has for a Realtor is, how do you make money investing in Real Estate?
The answer to this very complex question is actually very simple. Buy low and sell high.

Some of the best real estate investors are home owners. When a person has lived in a home that they own, they have a better understanding of maintenance and repairs.

To buy low, there is always a reason that a house has a considerably lower price than similar properties on the market. The most common reason is that the property is in need of repairs. This is where knowledge comes in to the equation. Working with a knowledgeable realtor can be extremely rewarding.

The most successful investors that I have worked with, over the years, do the majority of repairs on the property themselves. This reduces the bottom line considerably. The wise investor also knows when and where it is necessary to bring in a licensed professional. I have also witnessed the owner, prior to the arrival of the licensed professional, doing whatever is possible; to reduce the necessary time the professional has to contribute to the project. In short, they are prepared before the plumber or electrician arrives.

The easiest and most advantageous upgrades are painting the interior and exterior of the home, and adding new flooring. Cleaning inside and out, and a well maintained landscape, is also an inexpensive upgrade that makes the home more marketable, and increases the property value.

Before purchasing the investment property, a wise investor has to do their homework. This includes, investigating the condition of the property, and calculating the cost of each repair realistically. This often includes checking the cost of materials, and bids from contractors for bigger projects or repairs. Once the full cost of repairing the house is estimated. The buyer has to then check the historical high selling price of the similar homes in the area. This will give them a good idea of what they could re-sell it for as soon as the repairs and upgrades are complete.
In the initial calculations prior to the purchase, also have to include what it would cost to sell the property, which can be as high as 8-10% of the sales price.

The largest capital gain in real estate investing comes from owning the property for a number of years. The principal balance of the loan decreases, as the market values slowly increases. That would be in a normal real estate market. Some investors have tenants rent the property till the mortgage is completely paid off.

Currently, the US is not experiencing a normal real estate market. The property values are still decreasing in many areas. There are many foreclosures. When a house has been foreclosed on, the previous owner usually remove many of the fixtures and have even been known to take the kitchen sink. The empty houses are also subject to vandalism. This causes the property values to rapidly drop. Real Estate is definitely driven on the premise of supply and demand. When there are more houses for sale then there are people to buy them, the value drops. This is a buyer’s market. Even the country’s greatest economist, do not know when the prices will hit the bottom, and the market will turn around. In the mean time if you are looking to invest in real estate, it is a great time to do so. As a wise investor once told me, don’t be afraid to make a low offer, it is better than no offer at all.

Create lasting wealth by investing in real estate.

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investing-in-real-estateIf you are looking for a way to secure your future wealth and a way to make an income when you retire the real estate is definitely the way to go. Even though people will say that the stock market has better returns you can make real money and create lasting wealth by investing in real estate. The key is to make sure you know what you are doing and don’t fall for all the hype.

Yes there are people that lose lots of money in real estate but usually it can be because of lack of knowledge. If you do the research and learn before you invest you will come out fine. Don’t listen to gurus that tell you how to get rich quick, do the work and the pay-off will come. There are so many ways you can invest and make money that the sky is the limit.

Be patient and take your time, but don’t wait to long. The internet is full of resources that can show you how to become a successful real estate investor. The great thing about property is that it never goes away and it does, in most cases, weather the storms. You just have to make sure that you cover all the risks and have contingency plans in place. Also make sure you can actually afford to do it. If you can’t, make a plan and start moving towards your goal. Before you know it you’ll be building wealth that will last for generations.

I hope this has been a realistic look at investing in real estate because I really believe that it is one of the safest ways to make money, if you do the work. Remember that nothing can last that comes easy, but working hard is relative. If you love what you do it is not work. If you want to be passionate about something, why not real estate, it will reward you in the end. Read more about Profit in Real Estate Investing.

Is Investment Property Still a Good idea?

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There have been a lot of people that were hit hard with investment property in South Africa during the Global Economic Crisis and this question seems to come up more often now. So is Investment Property Gone Badinvestment property still a good idea and can the ordinary man on the street make a success of it?

Well I’m here to tell you that it is still a great idea and you can make a success of it. If you are one of the people that ran into trouble with investment property here is some advice:

Learn from your mistakes

Being successful with investment property takes experience and patience. There are a number of so called “gurus” who sell you promises but as soon as the tide turns they turn around and blame you, the investor, for your failure. Personally I actually agree with that. You were the one that made the decision so you have to accept responsibility. So the first lesson you need to learn is that you need to do research and calculate if a certain type of investment property strategy can actually last, even through a Global Economic Crisis. A particular method of investing is based on refinancing your properties and as many investors have now learned when the going gets tough, the banks don’t refinance no more…

Don’t give up

Yes, you got burnt, so what. Take a deep breath, sit down, and write out a detailed plan on how you are going to get out of the mess you’re in. Many investors have found the banks to be relatively accommodating, well at least some of them. The important thing is to do proper research on investment property before you get in to it again. You need to bank the experience you got and get back on the horse, but with the right saddle this time.

Yes, it is probably going to take you a couple of years to get back into the market but use this time wisely and learn as much as you can so that when you are ready for investment property again, you’ll have the knowledge and the tools to make a great success of it.

Property 2010.

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Many property owners believe that the worst is behind us and that next year can only get better. This may be a naive assumption  based only on the fact that things have already gotten so bad, people have lost everything they own, credit worthiness has been ruined and suicide rates are on the increase.

Jeez, that’s super depressing!!

Even so, having a totally pessimistic view will be detrimental in the long term as well as you may not see opportunities that come your way. While you are remembering the good times of years gone by you may ignore a lifeline that is cast in front of you.

None of us should give up, we should try and rescue ourselves until the last and not just get washed away to join the others who couldn’t hold on any more.

We should seek out assistance if we need it and not let pride dictate our future and our families futures’.There is no shame in asking for help and surviving.

So make a plan for the event that things may get worse and make sure you are still around to enjoy the Soccer World Cup and the benefits it will bring to the country.

No one knows exactly what is going to happen with property market next year and the general financial crisis but perhaps we will come out the other side better than ever. Here’s hoping!

Prepaid Electricity

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If you are interested in Prepaid Electricity you will find the following articles of interest.

Prepaid Electricity meters the way to go.

Although most properties these days do have these devices,some landlords have been a little slow to catch on.The device I am referring to is a meter installed in the home that one can purchase units for at predetermined outlets.The units are provided to the customer in voucher form and the unique sequence of numbers on the voucher are entered into the meter,the more units you buy the more electricity you will receive.The same basic principle as buying pre-paid airtime for a cellphone…read more.

Prepaid Electricity meters the way to go. – part 2

Getting a pre-paid meter for your home or rental property.

If you own the property and are not part of a body corporate you should contact your specific council/municipality directly and work through them. They will advise you on the steps to follow to change to a pre-paid meter. You should be able to find a helpline number on your last electricity bill aswell. This will be what most people are looking for and most of the time only the municipality has the authority to implement the change for you. … read more.

When will the real estate market turn again?

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When will the real estate market turn again? This is the question of the moment. ABSA seems to think that starting next year the real estate market will start to recover again, let’s hold thumbs.

Well if you are still able to hold on to your property great. Lots of people are unfortunately not so lucky. There were many people who thought they could get in to real estate investing the last couple of years. As soon as they got in, the market trend and they lost everything.

So what do we have to learn from all this? If you are going to invest in property you better be ready for any market. You need an emergency fund for times when the rental won’t cover the bond. If you base your investing strategy solely on refinancing, you will struggle allot. Banks won’t let you refinance in markets like the one we are currently in, so don’t just bargain on them.

Well I hope that you are one of the lucky ones, if you are, please share your views with us and other aspiring investors.

Things can only get better. Hold on. Go check out the National Credit Act

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DontPanic1So the interest rate is down by 100 basis points and Tito Mboweni says we mustn’t expect any further major rate cuts. Our president, Jacob Zuma admitted that we are in for tuff times with the global recession. Now I understand that everything is looking dark and bleak but this is the time when we should stand up, take our lives by the rains and start moving in the right direction.

If you have unmanageable debt and it looks like you are going to lose your house, go speak to someone. If you need to find out what you can do and how to get help go to the NCA site http://www.ncr.org.za there is a lot of information available there. I know it is never easy to ask for help but rather do it sooner than later. Your other options are to go to your bank, write a letter to them as well, but go to them and talk to a HUMAN BEING, and see what they can do for you.

I always say you should try whatever you can and brace yourself for what could happen. As soon as the markets turn, and they will, if you managed to keep your real estate, you will be smiling again.

Real estate investing tips to keep in mind.

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real-estate-investingDon’t fight your market. Listen.

When you have real estate and you plan to rent it out make sure you have an idea of the kind of tastes your target market has. The easiest way to determine this is by looking around the neighbourhood at other houses for sale. Go check out the property and get a feeling for the kind of tenant you are going to attract and what they might like.
Obviously if you intend on selling the real estate you better know what the market wants or your property will stay un-sold for long.

Research. Don’t believe everything you are told.

It is very easy in today’s world to do a bit of research before buying real estate. You can go online and have information about the current owner, the general prices in the area and what is close to the property you intend to buy. Most importantly you will know if you are being taken for a ride. A good source for real estate prices would be sites where people list their property for sale like http://www.yes2property.com/classifieds (i know this is part of Yes2Property, but you get the idea :) ).

If you have to partner up, choose your partner carefully.

If you are a new real estate investor you are probably going to have to partner up with someone to get it to the real estate market. Now it can have it’s benefits but also it pit falls. When you have to choose a partner make sure of the following:

  • You trust them. If you can not trust your partner how are you going to make investments that could run in to the millions.
  • Be the money or the management, don’t be both. Group decisions can cause havoc on real estate investment. A plan should be formulated before hand and then you step away and each partner does what he is responsible for.

Negotiate and ask the straight forward question.

Go ahead, ask the seller exactly what he/she wants out of the deal, you might be surprised. If you find that the seller’s expectations are too high you can move on and save time.

Invest safely and wisely.

When you invest you DO NOT GAMBLE. Yes there are risks but they are calculated risks. The best way to invest wisely is to not invest based on continued price increases but instead on value. The investment needs to make sense in good and bad markets, then you have value. If the price keeps increasing it is a bonus.

Cash flow is king.

Real estate investing is about the numbers. Cash flow keeps the business going. You need to make sure that ALL your expenses are covered and that you have positive cash flow. If you don’t, you better have a BIG piggy bank to pay up.

I think the main rule in real estate investing, and any other type of wealth creation tool, is the following: Plan it, monitor it and grow it. O yes and use your common sense.