Beat the Crowd When Investing in Real Estate

We all are thinking about it and some of us are actually taking action and getting their hands on real estate investment properties. The longer the NY Stock Exchanges doesn’t produce desirable returns the more people are starting with real estate investments.

For most of us the obvious choice of properties are single family homes. Although you can invest in real estate without owning a home, most people follow the experience they made while purchasing their own home. This is familiar ground and the learning curve for doing a real estate deal of this type is pretty slim.

Of course there’s a drawback with this approach. The competition is fierce and there are markets where investors are artificially driving up the cost of the properties while completely discouraging first time home buyers. If this is the case, the burst of the real estate bubble is just a matter of time.

How do you avoid these situations and still successfully invest in real estate? How do you get ahead of the competition and be prepared for bad times in real estate investments as well? The only answer I have is commercial real estate.

Why commercial real estate you might ask? Commercial real estate is a solid investment in good and bad times of the local real estate market. The commercial real estate I’m referring to are multi unit apartment buildings.

Yes you will become a landlord and No you don’t have to do the work by yourself. You are the owner and not the manager of the apartment building. The cost of owning and managing the building is part of your expenses and will be covered by the rent income.

Apartment buildings are considered commercial real estate if there are 5 or more units. To make the numbers work you should consider to either own multiple small apartment buildings or you should opt for bigger buildings. This will keep the expense to income ratio at a positive cash flow. Owning rental properties is all about positive cash flow.

With investing in single family homes it is easy to achieve positive cash flow. Even if your rent income doesn’t cover your expenses 100%, the appreciation of the house will contribute to the positive cash flow. With commercial real estate the rules are different.

While single family homes are appraised by the value of recent sales of similar homes in your neighborhood, commercial real estate doesn’t care about the value appreciation of other buildings. The value of the property is solely based on the rent income. To increase the value of a commercial real estate you need to find a way to increase the rent income. The formula on how this is calculated would be too much for this short article. I listed a few very helpful books where you can find all the details.

What’s another advantage to invest in commercial real estate? Commercial real estate financing is completely different than financing a single family home. While financing a single family home you are at the mercy of lenders who want to make sure that you are in the position to pay for the house with your personal income. Commercial real estate financing is based in the properties ability to produce positive cash flow and to cover the financing cost.

After reading all these information about commercial real estate you want to go out there and dive into the deals. Not so fast. First, you need to learn as much about real estate as possible. In commercial real estate you’re dealing with professionals. If you come across too much as a newbie you will waste these guys’s time and your commercial real estate career ended before it actually started. Second, no commercial real estate lender will lend you any money if you can’t show at least a little bit of real estate investment experience.

What’s the solution to this? Go out there and do one or two single family home deals yourself. It doesn’t matter if you make huge profits to start off with. Most newbie investors are losing money on their first deal anyway. If you can manage to show positive cash flow with your single family home deals you are ahead of the pack.

My advice, buy a small single family home in a decent neighborhood and rent it immediately. This will keep your out of the pocket expenses at a minimum and you will have rent income to cover for your monthly expenses. Bonus, you gain experience as an investor and as a landlord.

Here’s another observation I made during my real estate investment career. Most people like to analyze, learn, discuss and analyze some more. They never actually got to do a real estate deal. They love to talk about real estate investments, but never did it themselves.

My approach to real estate investment was simple.

- I bought some books about real estate investment.

- I read every single one of them.

- I put together a simple plan on how I want to get started.

- I started looking for properties.

- I bought my first investment property 30 days after I started reading my first book.

- I made positive cash flow with all of my properties so far.

What is my point? You have to go out there and practice what you’ve learned. The only valid credential in the real estate business is practical experience. Having a couple of deals under your belt, you can go out there and start looking at commercial real estate and even impress seasoned investors with your knowledge. Because you made this experience by yourself and you know what you’re talking about.

Breaking Into the Real Estate Industry: Real Estate Careers for You

The housing industry plays an important role in the quality of our lives. The industry weaves the tapestry of our lifestyles and maps the blueprint of our cities. Thus, it only makes sense to populate the industry with smart, aggressive and creative people who are concerned and responsible not just because their contracts require them so but because they are of service to the general public as well.

The market industry is not just composed of real estate agents who you think do no more than bug you with untimely phone calls or hand you leaflets. The problem lies in the fact that people are misinformed about the profession and the whole industry in general. Unbeknownst to them, there’s more to the industry than making a sales pitch. In fact, the real estate industry provides a wide range of opportunities for all sorts of individuals.

Thinking of getting into the housing market? Here are some careers to choose from after completing your online real estate courses:

1. Salesperson/Broker

Forbes.com has recently ranked the job of a real estate agent as the number one happiest job in America. Scoring 4.19 percent on CareerBliss’s rankings, survey participants deemed the job as very rewarding due to the amount of control they had over their work, flexibility and everyday tasks.

Being an agent largely involves helping people buy and sell homes. Agents or brokers are adept in carrying out the process of purchasing and selling properties, loan documentation and the policies governing the processes, saving clients their precious time and money. Through training and education, agents become knowledgeable on RE laws, fair housing law and contracts as well as various financing options available to consumers.

Different types of brokers exist in the field:

Commercial Brokers
Commercial brokers specialize in finding a market for revenue-generating properties like apartments and spaces found in malls, shopping centers, office buildings and warehouses. To qualify as a commercial broker should have a keen understanding of the investment value of properties in terms of location, taxes, and market activities.

Industrial or Office Brokers
Industrial and office brokers are in charge of developing, selling or renting out properties for office headquarters and manufacturing. Industrial or office brokers should be keen of zoning laws, tax regulations, and even property management to be able to relate valuable information on the property they’re marketing to buyers.

Land Brokers
Land brokers specialize in brokering land deals for farm, residential, commercial and industrial lots. This kind of broker has a knack for looking for lands that have a potential to be developed or to generate revenues. Land brokers have to be knowledgeable about agriculture and local market economics as well to be able to successful in closing land deals.

2. Land Developer

Land developers are very important in the said industry since without them, there’s no money to be made on real estate. They conceptualize the blueprint for projects and offer a keen insight on whether a property (residential, commercial or industrial) is worthy of being developed for profit or not. Basically, they conduct site selection and cost analysis. Land developers also coordinate with construction companies and oversee the property construction. Sometimes, land developers are also involved in financing the project.

3. Office Manager

The job of a real estate office manager involves meeting with prospective clients, managing a realty or real estate business, marketing, financial management and brokerage. They are also involved in hiring real estate agents to work for a firm. Real estate managers can be self-employed or work full-time for a real estate firm.

4. Property Manager

A property manager plays an important role in-well, you guessed it right-managing and maintaining the structural integrity and usefulness of a property-whether residential (e.g. apartments, houses and condominiums); commercial (e.g. shopping centers, retail stores, offices) or industrial (e.g. factories, manufacturing plants). Their end goal is to ensure a positive cash flow for property investors and make sure they’re making most of their investments. Often times, property managers are on-call 24/7 to attend to emergencies and problems arising from the properties they handle.

5. Appraiser

Appraisers essentially evaluate property values. Their job involves assessing the profitability of properties as well as tax values, rental, insurance and accounting values. Someone who is good with numbers, has a keen knowledge of accounting and economics principles, real estate education and insight of local housing market activities are a good fit for this type of work.

6. Mortgage Specialist

Mortgage specialists help potential owners choose the right kind of loan for them. They also help businesses collect loans they’ve provided to customers. They can work for a firm or independently.

7. Copywriter/Technical Writer/Researcher

Researchers are usually part of the business development department of a real estate firm. They are either technical writers or journalists who have ventured into real estate. Brokers, developers and other types of real estate professionals depend on the data provided by researchers.

Researchers create two types of report on a prospective property: physical, which concerns the building makeup and structures; and economic, which provides forecasts or insight on industry trends, market behavior and financing.

Technical writers are involved in documenting project developments. They have to be adept with construction and planning terminology and concepts.

Copywriters are employed usually by the corporate communications department or business development department of a real estate company.

8. Urban Planner

An urban planner is someone who plans urban development with civic groups, nonprofits and state agencies to improve on the lives of the general public. They design new pathways, buildings and transportation terminals to ease the lives of the city’s inhabitants and to increase tourist receipts in the area.

9. RE Counselor

An RE counselor is not necessarily considered as a career but it is a specialty as well. Counselors are involved mostly in research and analysis and creating economic, fiscal and feasibility studies, but they also perform brokerage, management and appraisal duties. Consultants come in handy for foreigners who wish to invest locally.

10. Real Estate Educator

Real estate educators are crucial in producing the nation’s top real estate agents. They are cogs in the seemingly vast system of the housing industry, keeping it running. Without educators, the industry will be lost, don’t you think?

Like other realtor professionals, educators have would need a real estate license as well. Generally, educators are required to meet the following requirements:

Hold a bachelor’s degree from an accredited educational provider
Must be licensed as a real estate broker
Have been licensed as a broker and practicing for three consecutive years
Was able to meet the credit hour requirement for real estate education

Educators find work in career training providers, institutions and colleges. Seasoned ones can land a job as a subject-matter expert or even author a book on practice.

Hilton Head Real Estate – A Great Time to Buy

Hilton Head Island is truly one of South Carolina’s crown jewels, boasting endless miles of coastline, beautiful salt marshes, world-class dining, nationally-renowned golf courses, and plentiful shopping. While many people visit each year to get away from their daily lives, many others have taken advantage of what the Hilton Head real estate market has to offer so that they can enjoy everything the island has to offer year-round.

As an owner of a choice piece of Hilton Head real estate you have quick access to beaches, tennis courts, bike paths, and golf courses. Golf enthusiasts can also enjoy the Verizon Heritage Classic every year without having to travel and book a hotel. With so many amenities available, many people believe that there is no way they can afford to buy property on the island. Right now, however, it is a buyer’s market. For those looking for a great deal, now is the time to find the perfect home – or second home, for a bargain price.

Much of the real estate on Hilton Head can be found within the island’s many gated communities, including Sea Pines, Port Royal, Wexford, Spanish Wells, Forest Beach, Indigo Run, and many more. Those interested in purchasing a home on Hilton Head should investigate what each of these communities has to offer, as some of the communities have extensive offerings behind their gates.

In fact, some communities offer so much in the way of recreation, shopping, and dining that you may never have to go far from home to meet any of your day-to-day and weekend needs! This makes the properties located in these areas particularly valuable, and an optimal place for empty nesters, retirees, and families alike.

There are many options available for everyone who is interested in owning Hilton Head real estate. Some may be interested in owning a permanent home, others a vacation home. Other buyers may be looking for a lower-maintenance condominium or even a timeshare. With so much to offer at some of the lowest prices in years, now is the perfect time to buy.