- June 27, 2022
- Posted by: Dennis
- Category: Real Estate investing
Anyone who wants to be successful should at least know the rudiments of the industry. One must not only master the ins and outs of the business. The successful investor should also know the market well. It should be treated as a living volatile thing that can change moods from time to time. Any investor, whether they are in real properties or in some other field, should be extremely and externally motivated. They should not only react to the market but they should proactively interact with prevailing market trends. This is one of the forefront characteristics of people engaged in property investing. There is no room for fickle-mindedness in this industry. Those who fail act because of emotional triggers while those who succeed act based on sound judgment. Successful people in the industry are not only knowledgeable, they are also learning the more about the business constantly. They do not merely seek to be entertained. They would rather prefer to learn. New investors in properties should work hard to master consistency in their actions at the onset of their careers. Sporadic effort does not bring about success in this enterprise. It takes constant and consistent effort to bring about the desired results. Real estate work is hard work and there are no shortcuts. Before anyone can ever think of working smart in real estate they should first think of working hard. There is just no easy road in property investing.
Indeed, being in such university, you can gain lots of knowledge and information that can help you in preparing yourself to the real market, to the actual real estate world. Aside from enrolling yourself to university, you can also attend seminars. Yes, indeed, attending seminars can help you obtain ideas and strategies. Actually, with seminars, you can meet lots of real estate investors and you can mingle with them, gain knowledge through their experience and you can even end up having a partner. Surfing the internet can be helpful as well. Reading different ideas, strategies and tips can help you out. You can even read testimonials of different real estate investors to gain knowledge and information not only on how real estate works but also with the market. As soon as you believed that you are armed with knowledge and information, you can go out to the market and do your thing. But, it is recommended to work with a real estate agent in order for you to have someone to assists you especially that you are new in the market. Having a real estate agent can help you out, provided that you are sure that you are working with the right agent. Taking time and putting a little of your effort can help you find the right agent. It is best to contact few agents and interview them in order to find the one with the right expertise and experience. In having proper knowledge, information and the right real estate agent, you will be ready to face the actual real estate world. You can start investing properties in Miami real estate market and earn a lot.
If you did your homework and have an idea of what things cost, you should be able to estimate some values. Make sure you take room measurements so you can better estimate expenses for carpet, tile and similar items. After youre done, its time to crunch the numbers. Go over your notes and start adding up estimated costs. Your goal should be to do this quickly. Often, good rehab projects sell quickly, so you may not have a day or two to think it over. Pay attention to big-ticket items that add up fast like a roof tear-off or foundation repair. These are the expenses that can quickly put a rehab project in the red. At the end of the day, you should have an estimate of what the rehab work should cost. That will give you a good idea of what your bottom line is for purchasing the property. If the investment seems sound and you decide to go forward with the purchase, the next step is to make an offer.
Time Value of Money – This is the underlying assumption that money, over time, will change value. For this reason, investment real estate must be studied from a time value of money standpoint because the timing of receipts might be more important than the amount received. 14. Present Value (PV) – This shows what a cash flow or series of cash flows available in the future is worth in purchasing power today. It’s calculated by “discounting” future cash flows back in time using a given rate of return (i.e., discount rate). 15. Future Value (FV) – This shows what a cash flow or series of cash flows will be worth at a specified time in the future. It’s calculated by “compounding” the original principal sum forward at a given compound rate. 16. Net Present Value (NPV) – This discounts all future cash flows by a desired rate of return to arrive at a present value (PV) of those cash flows, and then deducts it from the investor’s initial capital investment. The result will be negative (return not met), zero (return perfectly met), or positive (return well met).
And what were houses appraising for? Anything you needed them to. Simply tell your appraiser what your buyer needed the house to appraise for and, like magic, that’s what the appraisal would turn out to be, sometimes to the dollar. Fast forward to today and we wonder where those mortgage lenders (and the appraisers) have gone. If you’ve tried to sell a property in the past year, you know that it can be tough for buyers to get a loan and it’s also an effort to get the property to appraise for as much as needed. Lenders have tightened their borrowing requirements and appraisers are under a great deal more scrutiny since the 2008 mortgage meltdown. Not that either of those is a bad thing, just the reality we work with today. And that reality is in constant flux. The ebb and flow of real estate. As you can see, the “best” way to invest in real estate is not necessarily the same year after year. When lending and values are strong, SELL! Flip, wholesale, retail – unload the dogs from your portfolio. For the reverse economy, when lending froze and the economy depressed, we were thankful to be holding rental properties as we had more tenant applications than vacancies. Previous homeowners were losing their homes (for a variety of reasons) and needed to downsize or simply to rent because they no longer qualified for loans. Back when lenders were giving loans without even requiring the borrower to qualify (no doc loans), it was hard to find a tenant. The moral of this story: there is no “right” way or “wrong” way to invest in real estate. There are certainly “better” ways depending on the circumstances discussed above, but don’t wait until you’ve figured out the “right” way to invest or you’ll miss a ton of opportunity!