The media is currently full of real estate ‘doom and gloom’ – real estate repossessions and arrears are up and real estate prices are down … its almost as if the ‘sky is about to fall’! This situation has seen many real estate developers, and property investors generally, leave the market – and for those thinking of starting out in real estate development, these are scary times indeed.What seems like the worst time to get into real estate development can, in reality, be the best time. Successful real estate developers today realize that they can use time to their advantage – their real estate development projects will typically not be ready for sale or rent for 2 to 4 years from inception. So if they have bought well, they are less likely to be affected by the economic situation at the time of purchasing their real estate development site.In fact, a weak market is a real estate developer’s paradise, because a weak market is a buyer’s market, and one of the first steps to any real estate development project is securing a viable real estate development site on the best possible terms.Although we know that the real estate development business is cyclical, and many parts of the world are in a property downturn, we also know from history that knowledgeable real estate developers are successful in any market – falling, flat or rising.We’re working towards what we believe the economic conditions will be in 12 to 36 months time. Indeed we ourselves are still active in the market – seeking Council permission for a number of real estate development projects. This gives us the opportunity to act quickly and build our approved real estate development projects when the market does become buoyant.It is our opinion that the following market signals are some of the key factors that will lead to increased future opportunities, especially for real estate developers:· The pent up demand for housing. In March 2008 leading Australian economics forecaster, BIS Shrapnel chief economist Dr Frank Gelber argued that housing prices across Australia will rise by 30% to 40% over the next five years because of the built-up shortages of housing.· The current Federal Government has stated that they will work towards increasing Housing Affordability and have begun to announce incentives including Tax Credits of $6000 per year if the housing is rented at 20% below market rent.· We believe that an increasing number of people, in the short to medium term, are likely to require the rental accommodation that we intend to build. This is due to either their financial stress (can’t afford to purchase a home) and/or demographic trends (including Gen-Ys who are less likely to buy Real Estate).Even if our ‘crystal ball’ is incorrect, we know we have the resources to hold real estate development sites during possible further market fluctuations to come, and increasing rents are certainly helping with that!Our belief is that this is a golden time to act – perhaps a once in a generation opportunity. Maybe it is not the time to sell completed real estate development projects at the moment, but it is certainly a great opportunity to secure the development site and obtain development planning approval. Now this strategy is not for everyone – you must have the necessary resources to hold the development site and especially the knowledge of real estate development to take advantage of these opportunities.The best approach for anyone contemplating real estate development will depend on his or her own personal and financial circumstances, but the key message here is that you must do something!There are many strategies that small real estate developers are currently using, if they don’t have the resources to complete a real estate development project right now, including to turn their real estate knowledge into cash by locating ideal property development sites, perhaps taking out an option on the site, and on-selling the ‘Development Permit Approval’ to someone who does have the resources.Successful real estate developers know that times of opportunity like this only come along once in a while, and they’re taking action so they don’t miss the boat.Regardless of your immediate financial situation, this is the perfect time to leverage your real estate development knowledge into current or future income. If you have any doubts about your ability to do this, or you would like an experienced real estate development mentor to guide you, act now to get the knowledge and mentoring that you need. There is no time to waste!
Real estate has always been known as the safest of investments.In fact, real estate investment completed after proper research into and evaluation of the property (to determine actual and future value), can lead to tremendous profit.
This is one reason many people choose real estate investment as their full time job.Discussions about real estate tend to focus on residential real estate; commercial real estate, except to seasoned investors, typically seems to take a back seat.
However, commercial real estate is also a great option for investing in real estate.Commercial real estate includes a large variety of property types.
To a majority of people, commercial real estate is only office complexes or factories or industrial units.
However, that is not all of commercial real estate. There is far more to commercial real estate.
Strip malls, health care centers, retail units and warehouse are all good examples of commercial real estate as is vacant land.
Even residential properties like apartments (or any property that consists of more than four residential units) are considered commercial real estate. In fact, such commercial real estate is very much in demand.So, is commercial real estate really profitable?
Absolutely, in fact if it were not profitable I would not be writing about commercial real estate at all!!
However, with commercial real estate recognizing the opportunity is a bit more difficult when compared to residential real estate.
But commercial real estate profits can be huge (in fact, much bigger than you might realize from a residential real estate transaction of the same size).There are many reasons to delve into commercial real estate investment.
For example you might purchase to resell after a certain appreciation level has occurred or to generate a substantial income by leasing the property out to retailers or other business types or both.In fact, commercial real estate development is treated as a preliminary
indicator of the impending growth of the residential real estate market.
Therefore, once you recognize the probability of significant commercial growth within a region (whatever the reason i.e. municipal tax concessions), you should begin to evaluate the potential for appreciation in commercial real estate prices and implement your investment strategy quickly.Regarding commercial real estate investment strategies it is important that you identify and set investment goals (i.e. immediate income through rental vs later investment income through resale) and that you know what you can afford and how you will effect the purchase.It would be wise to determine your goals then meet with your banker (or financier(s)) prior to viewing and selecting your commercial real estate.Also remain open minded and understand that should the right (perfect)
opportunity present itself, your investment strategy might need to be revisited and altered, sometimes considerably.
For example: If you find that commercial real estate, (i.e. land) is available in big chunks which are too expensive for you to buy alone but represents tremendous opportunity, you could look at forming a small investor group (i.e. with friends or family) and buy it together (then split the profits later).Or in another case (i.e. when a retail boom is expected in a region), though your commercial real estate investment strategy was devised around purchasing vacant land, you might find it more profitable to buy a property such as a strip mall or small plaza that you can lease to retailers or a property that you can convert into a warehouse for the purpose of renting to small businesses.So in a nutshell, commercial real estate presents a veritable plethora of
investing opportunities, you just need to recognize them and go for it.About the Author:
Dave Jarvis is a licensed Real Estate Broker in Florida and is Broker and Owner of Realty Concepts, Inc. a Southwest Florida Real Estate Corporation.
If you are interested in Southwest Florida Properties see his website at [http://www.rciflorida.com]For additional Real Estate information go to: [http://www.realestateseekerusa.com]
For Real Estate Financing information see : [http://www.mortgageseekerusa.com]
Real Estate Flipping – Is Flipping Real Estate the smartest way to get started in real estate investing?”Flip This House”, “Flip That House”, “Property Ladder”,… and on and on…Over the past couple years you and I have been hammered on TV with real estate flipping shows that depict these people making outrageous profits flipping homes and making it look easier than heck.So, is this flipping stuff real? Well… it sure is. There are countless people out there making a darn good living flipping homes. But… the tv shows on flipping are darn deceiving when it comes to the “reality” of real estate flipping.Is flipping real estate the best way to get starting in real estate investing? I’ll let you decide for yourself. However, in my opinion, for most people, especially in today’s down markets (not all markets are down… there are actually some doing really well), real estate flipping is not the best way to get started in real estate investing.Here’s why:First, let’s clarify two kinds of flipping.
The Fix and Flip – Where you buy real estate, rehab it, and sell it to a retail buyer. The kind that is on the TV shows.
The Wholesale Flip – Where you buy real estate (or get it under contract), find a wholesale buyer, and flip the contract. The kind that is less glorious… but has a ton of money in it… with a heck of a lot less risk.
To me, the Fix and Flip method is not for most newbie’s… even though that is the kind of real estate investing you see on TV all of the time.Why?
You need a good understanding of rehab costs
You need to have good funding… either from a private lender or a bank (private lender is preferable)
You need to be able to float the carrying costs if you can’t sell the property quickly
If you don’t calculate your costs just right… there may not be a whole lot of room for error… and room for error means greater risk on you!
The market is in a downturn… so there are less retail buyers out there for middle income houses… which is what most people start out flipping
There are many people out there making a very good living flipping… but most of them started several years ago… and have many flips under their belts.They already have systems down, have marketing channels for getting buyers, have solid lending sources, etc. Not to say that new real estate investors cannot do all of the above… YOU CAN!But, there are better ways to get started in real estate investing that allow you to get in with little or no risk or money, and will allow you to learn the Fix and Flip business before you ever take a huge money commitment to do so.What’s the single best way (in my opinion) to get started in real estate flipping to minimize your risk and shorten your learning curve… all the while making nice money in the process? Well… obviously option #2 from above: The Wholesale Flip – or in other words… wholesaling real estate, flipping houses for quick cash, flipping contracts, etc.When you wholesale real estate you do everything a flipper would normally do… except actually repair the property and sell it to a retail buyer. But, you don’t have the risk or time commitment that a fix and flipper has.Basically, you as a wholesale real estate flipper (or wholesaler for short), find properties that need work that you can purchase at a large discount and flip them for a fee to a rehabber who will do the work.Your job is to find the properties, analyze the numbers to determine the repairs needed, create an offer that enables both you and the rehabber that you will sell to to make a profit, and sell the contract to a rehabber who will actually make the repairs.Often times real estate investors will make between $2,000 and $20,000 on a wholesale deal. So, for a low to no risk way to get started in real estate… there are huge profits to be had.Another reason for starting out doing wholesale real estate deals is that you learn the ropes of what it takes to be a rehabber. After analyzing several deals and talking to rehabbers to find out what they look for… you will have a good grasp on what a good deal is, how to accurately estimate repair costs, who the rehabbers use as contractors, etc.So, you actually make money while you are getting a hands on education on real estate flipping and rehabbing.Anyhow, I didn’t start out to write this article to scare you from the fix and flip mindset. There is good money in it…My motivation to write this article is to help guide new real estate investors away from the glorified version of rehabbing that is plastered all over TV… and point you toward what I believe to be the best way to get started in real estate investing.I have something to confess…I may be a bit of a hypocrite… but I didn’t start with wholesaling. I actually started with buying income properties. But, with today’s markets… wholesaling real estate is the way to go to get your feet wet and make some serious money in the process.There is much more to real estate flipping and wholesaling real estate than the TV “reality shows” show. One of the best ways to learn the ropes is to learn from someone who does it everyday and makes a solid living doing it.
Go to your local REI club and hook up with an experienced mentor
Go out on your own and try to hack it yourself with no instruction (not advised)
Invest in a quality, step by step multimedia course that walks you through A – Z on the exact blueprint that successful wholesalers and real estate flippers use.
If you want to go the route I took, the wholesaling course that I actually still use today is shown below.The real estate wholesaling and real estate flipping course that I think is by far better than any other out there is below. They always way over deliver and they are the only “gurus” out there that I can truly say are trustworthy and good people. I’ve bought a ton of courses, and the Wholesaling for Quick Cash (link below) is the only one I’d recommend.The Wholesaling Course I Recommend – Most Actionable one I’ve seen So, whatever you do to get started in real estate investing, just do it. Taking the wrong action is better than taking no action at all.Good luck… and Cheers!
CHAPTER 1: SOME QUICK BEGINNER’S TIPS• Tip 1: There is a ton of money being made in real estate. It’s just not going to be made by you. In truth, much of it is actually going to come FROM you. The real estate companies themselves make an obscene amount of money in part by churning people through their “programs” and spitting them out with emptier pockets.• Tip 2: There’s no salary. Make sure you have enough money in the bank to eat and pay your bills for six months. And start looking for a real job NOW. By the time you get it, you’ll be out of money. I landed a position at a company six months and 1 day from the day of my layoff. If it wasn’t for Unemployment, I would have been living in a cardboard box waiting for my real estate career to blossom.• Tip 3: Everyone you know will feign support while questioning the decision and making fun of you. I’m serious, and you know this already. You’ve hated every real estate agent you’ve dealt with, didn’t you?CHAPTER 2: THE INTERVIEWReal estate offices are constantly listing open positions, so it’s easy to get an interview. Don’t be too nervous, because guess what? You’re hired. This isn’t an interview, it’s a pep talk. You could walk in and urinate in the lobby, you’re probably still hired.Their ideal agent is someone who is divorced and miserable, sitting on a pile of alimony cash or an available line of credit, and just needs something to keep them busy. Next in line would be someone who is unhappily married, sitting on a pile of cash or an available line of credit, and just needs something to keep them out of the house and away from their spouse. If you’re not one of these two, that’s OK – they’ll take you.CHAPTER 3: LICENSINGHow do you make things better? You get the state involved!This company that “hired” you will now send you to a training “school” (these are companies that, for a price, teach you all about the real estate industry and help you pass the state required test). This is 2 weeks of classes that have very little to do with the actual career.There are laws that say that even though your licensing training is taking place in a Real Estate office, that no one from that office may “recruit” you. Expect to be recruited. One of the instructors was a Company X manager and took a special interest in me. He took me to open houses at expensive homes during the weeks of training, introduced me to everyone in the office, took me to lunches and took me out for beers after the training was over. The entire time, he talked about how Company Y (who had sent me to this training) was horrible, and why Company X was far superior, and definitely the place for me. Ethical? No. Fun? Yes. I still went with the company that sent me to the training because it was the right thing to do.CHAPTER 4: FEES, FEES and MORE FEESYou didn’t think anything was free, did you? Here’s the rundown on fees:• Licensing. If you talk to a real estate company before you take the class and get licensed, they’ll pay for the class. Well, sort of. They’ll pay for it, then take the fee back out of your first commission. Wait, who paid for it then? Yes, you did. You didn’t think that was free, did you?•The Multi-List System. You simply cannot be a real estate agent without access to the MLS. It must be free right? No.• Cardkey. You need this to get into any house that’s up for sale. Yes, you have to pay for it. And they can’t ship it; you need to drive 30 miles to pick it up.• Associations. The County Realtor Association. You have to join it. It costs money…every year. The State Realtor Association. You have to join it. It costs money…every year. The National Realtor Association. You have to join it. It costs money…every year. Join this organization. Join that organization. You’ll get a magazine, and maybe even a pin. It’s all mandatory, and it all costs money. Sometimes they have free cookies at the meetings though.• Signs. Small signs, big signs, plastic signs, metal signs, name signs, for sale signs, open house signs. You have to have them, you have to pay for them, and they cost hundreds of dollars.• Business cards. They’re free! Well, kind of. The basic, crappy versions are free, the ones that scream “I’m new to this!” To get nice ones, with a picture, you have to pay, and you have to pay for the picture.• Automobile. They’ll pay for your car! No, they won’t. If you’re one of the top 2 producers, and are willing to put a God-awful giant sticker on the sides and back of your (correctly colored) car, they’ll pay a nominal amount to you. Why shouldn’t they? It’s the cheapest advertising they could get.• Free trips! 5 years from now, if you beat ALL the odds, work ridiculous hours and sell everything you get near, you might get a free trip. Don’t hold your breath.• Name tag. Good news, the name tag is free. The bad news, you have to wear a name tag. Back when I had a real job, I knew a gentleman who always said “If a man has to wear a name tag during his job, he’s not very successful.”• Realtor fees get you the “Realtor” pin. This is the most expensive pin you’ll ever hate wearing.CHAPTER 5: THE “OLD-TIMERS”They hate you.When I say “old-timers”, I’m referring to the agents that have been working in the office for more than a year. They will rarely make eye contact at first because they expect you to be gone in a few months and they don’t want to waste their time. Once you’ve been there for 2 weeks, they’ll start offering you the “opportunity” to sit in their open houses for them. What they’re actually asking you to do is sit in a house for three hours that no one will visit, and basically sell it for them, on the off-chance that you could get a client out of it.When there aren’t enough newbies in the office, they’ll fight over your house-sitting efforts, and may even offer you cash (don’t get excited, I’m talking about $20.) Get paid FIRST, I never did get paid for helping someone out.And remember, top producers use exclamation points! Lots of them! In everything they do! Just an FYI. I mean: Just an FYI!!!!CHAPTER 6: THE CLIENTSThey hate you.You will be asked to basically alienate everyone you know and make social situations incredibly awkward by begging for referrals. Parties, church, school, the gym – anywhere…you need to be fishing for house buyers or house sellers. It is painfully awkward for all concerned. Don’t forget to wear the little R pin everywhere you go!If you’re lucky enough to get someone to say they’ll use you to sell their house, you should know now that their house is worth much more than the one three doors down that is exactly the same. Why? I don’t know. Maybe they’re delusional. Maybe they’re dumb. Maybe they’re greedy. Maybe they’re upside-down on the house. Maybe they just need the money. It’s probably all of the above.It’s weird to be involved in such a significant financial project for someone you know. They will use you to buy or sell a house, but no one wants you to know their personal financial business, so it’s difficult. Your friends and family might want little favors, like….they’ll want all their money back. Yes, seriously. I had a relative ask if I would give them back all of my commission if they used me to buy a house. I declined, and the request was probably the nail that sealed my real estate coffin shut.CHAPTER 7: YOUR LIFE AS AN AGENTSay goodbye to fun and leisure. Here’s your week:• Monday. Mandatory meetings and house tours, all day. The meeting is useless, which is why you’ll rarely see old-timers there, they veer off after the first house and end up God-knows-where. They’re probably at the bar. The tour is fun, though. You get to hear everyone complain about everyone they work with and everything in the houses. You get to walk through a stranger’s house and hear your co-workers (proudly displaying their name badges) criticize the homeowner’s choices in everything. Examples: What were thinking with this carpet? Have they ever cleaned this room? Wow, those are some ugly kids in that picture. I can’t believe they left Prozac AND Paxil on the sink, what a basket case.• Tuesday. In-house training, or “how to waste 3 solid hours of prime work time.”• Wednesday. “Twilight” open houses. This means your night is shot.• Thursday. Nothing is required. This is your weekend, enjoy. Don’t spend money though, you don’t have it.• Friday. Mailings, client hunting, sitting around.• Saturday. Mandatory training…all freaking day. Done with the mandatory 15 week training? Start ongoing training that repeats what they taught you in the 15 week training!• Sunday. No more football games, family picnics, etc., because you need to sit in Open Houses.At various times during the week, you’ll get a few 2 hour stints answering the phone. The idea is that clients will call in looking for an agent because they have a house they want to buy. I would guess that this has happened once, ever, in the history of real estate. Most of the time you’re sending calls to the old-timers.I had a gorgeous Ford Mustang GT when I got this “job”. I sold it because I was told that you have to take your clients all over the place to view houses. Out with the sports car, in with the Volvo station wagon (in the horrid corporate color, of course.) As it turns out, no one wants to ride with their real estate agent; they want to follow you around in their car. This is for many reasons: so they can escape you when they want, so they can talk about the houses without you hearing them (even though you are their trusted advisor)…oh, and they hate you. I really miss that Mustang.CHAPTER 8: “SUPPORT” (note quotation marks)• Computers. Don’t know a computer from a toaster? Don’t worry, no one else does. I don’t know why, but everyone I worked with was horrible with any technology-related tool. They constantly needed help with the computer, and the PC’s were always down with a virus of some sort.• Your web site. The company has set up a page for you on their website, you need to fill it with useless things that no one cares about, like “resident of (our general area) for umpteen years” and Realtor and “Member of (Our County) Real Estate Club. None of this helps them or you, but it does fill the page, even though no one will look at it. You can put a picture up there too, unless you’re ugly or hideously disfigured.• Mailings. I lucked out with Company Y, they pay for mailings. This means they provide the marketing materials and they pay the postage for a certain amount to be mailed out. The database of addresses that you could send mail to was protected by a Rottweiler in our office, a man I’ll call Travis. Travis was tremendously tan year-round, with slicked-back hair, and he was dressed like a 1970′s JC Penny mannequin every day. I don’t know if he was gay, but I bet his boyfriend was.• Office Help. They hate you. The first day I met Travis, he was in the middle of a full-fledged hissy fit because someone had stolen his Cross pen. This is understandable, as it’s not like they sell them at drug stores for a few dollars. Yes, they do indeed sell them at drug stores for a few dollars. The hissy fit lasted an hour, and included our manager sending a phone message to every agent in the office to please return the pen if they had it. Travis also kept a much-needed eye on the labels that one would use to send out these mailings. To get them, you had to request the exact number of sheets you needed. There were 25 on a sheet and if you were printing 68 labels, you would not get 3 sheets.CHAPTER 9: “ETHICS” (note quote marks)Ethics rule #1 is “just get the listing.”This means that if you have a person that wants to sell their house for $330,000 but you and everyone know it won’t fetch $250,000, you tell them that you will list it for their price, and then slowly let the price drop when people laugh at the house.CHAPTER 10: AFTERTHOUGHTSI am one man. The Realtor’s Association is a huge conglomerate which no doubt has numerous lawyers on the payroll. My brother-in-law is a lawyer….but I still feel outnumbered. So you’ll notice I only refer to real estate agents, not Realtors.Keep in mind though, that you have two choices here: you can either become a Realtor or you can become a Realtor. Yes, you read that right. I’ll make no judgments on the value of the organization, except to say that sitting through the most boring training ever nets you a tiny R pin. Nothing says I’m a success better than a pin with an R on it…right next to your name tag.Referral Status means that you’ve quit the day-to-day grind of trying to sell/buy houses. You become inactive, but now if you point someone who is looking to buy or sell a house to your real estate company, you get a percentage of the commission.All you have to do is pick up the phone, tell the company their name and telephone number and where they’re looking. The irony? NOW it’s payday. I know people who made more on referrals than I did as a real estate agent, many times over. Of course, there’s a fee to be in the program, but you didn’t think that was free, did you? And to stay in “referral status” you need to take ongoing training.This is just my story. Don’t let it change your mind if you want to enter the world of residential real estate. Heck, I had a former real estate agent tell me what a horrible idea it was and I still went forward with my stupid plan.I’m sure it’s completely different in YOUR area though, and they’re telling you the truth when they say so…