Dallas Appraiser L.L.C. wants your help and commentary on our Real Estate Blog
How a 1031 Exchange Works
by Dallas Appraiser L.L.C. on 05/02/14
Title:
How a 1031 Exchange Works
Word Count:
410
Summary:
A 1031 exchange can be a great benefit for investors. Learn what they are, and how to easily overcome some obstacles to use this tax deferral to your advantage.
Keywords:
#1031_exchange, tax deferral, real estate, commercial loan, commercial mortgage, #Appraiser, #appraisal, #DFW
Article Body:
A section 1031 tax deferral allows an investor to sell a property, then reinvest the proceeds in a new property and defer all capital gain taxes. Specific conditions for the exchange state that it must be of like-kind and must take place within 45 days of the close of the sale. To understand more about how this exchange works, consider the following example:
ïIf an investor has a $200,000 capital gain and incurs a tax liability of $70,000 in combined taxes when the property is sold, only $130,000 remains to reinvest in another property.
If the investor had, for example, a down payment of 25% and a loan-to-value ratio of 75%, the seller would only be able to purchase a $520,000 property.
If the same investor chose a 1031 exchange, however, and had the same down payment and loan-to-value ratio as above, the entire $200,000 of equity could be reinvested in an $800,000 purchase of real estate.
The exchange offers a powerful protection for investors from capital gain taxes. However, knowledge of what qualifies for a 1031 exchange, and how it works is crucial to receive the full benefits that it can offer. For example, not all real estate qualifies for the exchange. Business property and investment property are the only types that will qualify for the tax deferral.
Both the property sold and received must be of like-kind, which is often mistaken to mean the exact types of properties. The like kind provision for real property is quite broad, and includes land, rental, and business property. A 1031 exchange may actually be mixed as to type and still be like-kind. For example, you may exchange land for a duplex, or a commercial building for a retail store. The like-kind provision for personal property is more restrictive.
One difficult aspect of making a 1031 exchange is finding a new investment property within the 45 day limit. The IRS is very strict about complying with the restriction and rarely allows extensions. Once a replacement property has been found, the next challenge comes in obtaining the extra capital needed to complete the exchange.
Fortunately, there is an easy way to overcome that challenge. Obtaining a bridge loan is an easy and effective way for a commercial borrower to finance a property for a short period of time. Bridge loans are usually offered for terms of 12-36 months, just the amount of time that a property owner would need for a 1031 exchange.
10 Ways To Find Investment Properties
by Dallas Appraiser L.L.C. on 05/02/14
Title:
10 Ways To Find Investment Properties
Word Count:
346
Summary:
If you invest in real estate or hope to, you have to find properties that make sense. Everyone watches signs and newspapers, but what more can you do?
Keywords:
investment properties,real estate,properties,investment, #appraiser, #appraisal, #DFW
Article Body:
If you really want the best deals in investment properties, you have to increase your odds by finding more deals. Who is more likely to get a cheap apartment building, an investor that looks through the MLS listings and calls it a day, or the one that uses ten resources? Here are the ten:
1. Talk. Let people know you are looking and sometimes the properties will come to you. There are a lot of owners out there who want to sell, but haven't yet listed their property.
2. Use the internet. Go to a search engine and enter the type of real estate you are looking for, along with the city you want to invest in. You never know what you might find.
3. Drive around looking for "For Sale By Owner" signs. Owners often don't want to pay to keep the ad in the paper every week, so you won't see all properties there.
4. Find abandoned properties. That's a pretty clear sign that the owner doesn't want to deal with the property. He might sell cheap.
5. Find old "For Rent" ads. Call if they are a few weeks old. Landlords are often ready to sell, especially if the haven't yet rented the units out.
6. Talk to bankers. You might get a foreclosed-on investment property cheaper if you buy it before they list it with a real estate agent.
7. Offer someone a finder's fee. There are people that always seem to hear about the good deals. Have such people coming to you.
8. Eviction notices. If your local papers publish eviction notices, or if you can get the information at the courthouse, it can be useful. A landlord who just went through the proccess of evicting tenants is a likely seller.
9. Old FSBO ads. If you call on two-month-old "For sale By Owner" ads, and they haven't sold, they may be ready to deal. Owners often give up the effort, but still would love to sell. Help them out!
10. Put an ad in the paper. "Looking for investment properties to buy," might be sufficient to generate a few calls.
Learn The Basics Of Income And Expense Statements
by Dallas Appraiser L.L.C. on 05/02/14
Title:
Learn The Basics Of Income And Expense Statements
Word Count:
1111
Summary:
Learn how to read income and expense sheets to evaluate your small real estate business or commercial real estate properties!
Keywords:
commercial real estate, real estate, property, income and expense sheets, real estate business, small business, self employed, #DFW, #appraiser, #appraisal, #arlington
Article Body:
As a commercial real estate insider or a small business owner, you will need to evaluate the annual financials or specific income producing properties. You do this by analyzing the income and expense sheets of the business or subject property in which you are invested.
Income and expense sheets do not involve fancy finance or numbers, and you do not have to take a difficult finance class in order to decipher the numbers and what they mean to the end user.
It is very important for you to understand the basics of income and expense sheets so you can verify how much money the property or business is actually producing, as well as spending on expenses such as maintenance, perhaps utilities, and other such costs.
With most properties you will be able to get the income and expense sheets from the broker or even owner of the property. If the property does not have one, then it is probably extremely mismanaged and is need of many changes. This might be a great fixer upper property, as long as you recognize the risk that comes along with it.
Most income and expense sheets will look similar for real estate. However, if ever there is an item you do not understand, or it seems odd to the property, simply ask the broker or agent for assistance in explaining that item. The item could possibly be something specific to the property, or a scam that the accountant is trying to play to make the property appear either better, or even worse than it really is. Do not pass up an item because you do not understand it. Get the details, and treat it like an important part of your investigation.
The most important aspect of income and expense sheets is the result between the two categories. This is expressed in the following simple equation:
Gross Rents (Income) ñ Operating Expenses= Net Operating Income (NOI)
Net operating income is how you determine how well a property is performing, as well as determine the cap rate, which is used to find the selling price of a property.
So let us look at the income and expense sheet to understand the basic items that you will find.
Income: The income is all the money a property generates through rent, laundry rooms, vending machines, utilities (if tenants pay own utilities), perhaps game rooms, if the property is a hotel, and any source that generates cash for the owner. This is recorded in a specific period, often weekly, monthly, quarterly, or year-to-date. Be sure to know which period the specific income and expense sheet is for because it makes a huge difference if the numbers are from a month or a full year.
When evaluating a property, it is a good idea to view the yearly income and expense sheets, as well as the three to five before it. You want to view how the property has performed overall, and identify any odd changes or trends in the numbers. Remember that income is often separated by each department in which it is generating cash. This is where you might find odd items and need to get clarity before making a decision on the property’s performance.
Operating expenses: Expenses are often divided into two different categories, operating and fixed expenses. Operating expenses are the activities that cost money to operate the actual property. They can differ from month to month, depending on the activity and changes in the property. Management and other such expenses can be considered operating expenses- what ever costs are associated with operating the property itself. When these expenses are reduced, then you can increase your overall income.
Net Operating Income: The NOI is the balance on the property after the Operating Expenses have been subtracted from the total income. Notice the NOI is only the gross income, minus the operating expenses. If the number is negative, as shown in parentheses ($20,000), then it is considered a loss. If the number is positive, $60,000, then it is shown without parentheses. The NOI is the un-leveraged return that any owner or investor would yield if the property were operated in the exact same fashion as it is currently.
Fixed expenses: Fixed expenses are the costs a property has every month, independent of activity and operations. These are expenses outside the business of operations. Debt service and income tax paid are two examples of fixed expenses. Sometimes income and expense items may be in the wrong place, so be sure to put them under the right category yourself, and calculate the results.
Cash at end of year: This is the overall cash that is available to the owner to do with what he or she will, after all expenses have been subtracted from the total income. This amount is determined with depreciation in the equation. So if you had subtracted it earlier, then be sure to add it back to the net income.
A few notes on the expenses found:
Repair and maintenance expenses: By looking at the repair and maintenance expense, you can determine how well a property has been taken care of, in addition to inspecting the property yourself. Each year there should be about 5% of the total income spent on maintenance and repair. If there are bigger jumps than that, the property may have undergone a major change or renovation. You can ask the owner or broker as to why the numbers either drastically increased or decreased during a certain period, and they should be able to tell you.
Management expense: Management expenses should be identified on the income and expense sheet, and if they are not, then the validity of the report needs to be questioned. Always include an amount you would pay someone or yourself to manage the property because it is a viable expense if the owner managed the property as well, then perhaps he or she did not put in a number in the way of management, but it is absolutely necessary.
As you can see, income and expense sheets are not difficult to read. What can be difficult is getting the support for some odd numbers that you will occasionally see on these reports. Ask questions and investigate the numbers if need be, to get a solid idea of how the property is exactly performing, and how much the property is actually worth. To practice, ask a broker for a few income and expense sheets he or she may have from prior properties. Review them and see if you can identify all the major categories, what they mean, and how they are used. You will have the reviewing of income and expense sheets down in no time, and will be successful in determining a property’s value.
Learn How to Construct a Letter of Intent
by Dallas Appraiser L.L.C. on 05/02/14
Title:
Learn How to Construct a Letter of Intent
Word Count:
638
Summary:
Use a letter of intent to present your offer!
Keywords:
commercial real estate, letter of intent, real estate, investments, #home_appraiser, #appraisal, #DFW, #appraisal, #appraiser
Article Body:
A letter of intent is a common way to express your intentions to purchase a property without having to write a formal, legal binding contract. The letter of intent is presented to a seller in the very preliminary stages of a project. The intentions of a buyer are spelled out clearly and simply so the seller knows exactly how the buyer wants to purchase the property, and under what terms.
In my experience, a casual, personal letter to the seller is often the best received way to present your intentions to purchase a property. Some people insist on drafting a formal, multi-page, non-binding contract filled with legal jargon that can often intimidate the seller. A seller wants to easily see how the buyer wants to purchase the property, and determine if he or she can accept the presented terms.
Read on to learn how to construct a letter of intent and what to include.
Let’s investigate the contents of a letter of intent so you, too, can construct one before putting a property under contract.
A letter of intent (LOI) must have five basic elements in its content:
1. The buyer’s name
2. The property address and description
3. Your offer which includes:
a. Purchase price
b. Down payment
c. Terms
d. Conditions
e. Due diligence time
f. Closing time
g. Any other clauses or provisions
h. When a formal contract will be written up if the LOI is approved
4. A clause that makes the LOI non-binding
5. Your signature and a place for the seller’s signature
That is about it for the content, believe it or not; it is direct and straightforward without any fluff or nonsense. You are simply covering each detail so the seller knows exactly what the buyer intends to do.
Having an informal letter of intent also allows for easy negotiations. There is no filtering through legally written clauses and other such unnecessary information at this stage in the project. When the letter of intent spells out each detail clearly, the seller can come back with alternate terms of which he or she would be more accepting. This negotiation can go back and forth without the rewriting of lengthy pages that either party may misconstrue.
If the letter of intent is accepted, then the due diligence period will begin. It will continue until the time agreed upon by both parties in which, at the end of the term, a binding contract is constructed. Terms may change during this time if certain aspects of a property, previously not disclosed, are discovered. For example, there may be soil contamination in which the buyer will not want to purchase the property and will safely option out of the non-binding contract. Or, perhaps the property is in a lot worse condition than originally thought, causing the buyer to negotiate a decreased purchase price.
The letter of intent allows for all facts and figures to be verified so that the buyer understands exactly what he or she is getting in the property. If the buyer finds something that he or she can not accept, or something not originally expected, he or she can back out without any recourse or punishment.
Always use a letter of intent to present your preliminary offer to a seller. This will save you writing time, legal fees, and will be easily read and understood by the seller and any other interested parties who must be made aware of your intention to purchase the subject property.
Always construct the letter of intent with honest and detailed facts. Nothing must be overlooked as it can cause problems in the future. Be prepared to negotiate terms, and always know what you are willing to accept if you should get a counter offer.
Use this tool as an easy and direct way to purchase a property every time. Do not be afraid to consult a professional like a realtor or home appraiser before you take the plunge.
Resale Value On Homes - Never Judge The book By The Cover
by Dallas Appraiser L.L.C. on 05/02/14
Title:
Resale Value On Homes - Never Judge The book By The Cover
Word Count:
597
Summary:
How the professionals in real estate can help you save or make money. Do not be afraid to call a realtor or home appraiser before you even consider selling your advice. A professionals advice may go a long way in helping you make a prudent decision.
Keywords:
resale value,Resale Value on property,selling my home,resale dividends,pound dollar resale value,property buyer,house sales,#appraiser, #appraisal, #DFW, Home_appraiser, #home_appraisal
Article Body:
There are a great many factors that have to be addressed when it comes down to resale value on property. Before making any hasty decisions - do your homework because you can never judge the book by the cover.
Picturesque scenery or industrial surroundings are important matters that can affect the resale value of your home. When buying or selling a house remember to have these issues linger at the back of your mind. Buying a home in fabulous proximities like near to the coast can up the dividends beyond expectations - well who would not want to wake to the call of the ocean waves?
Not every buyer considers pound or dollar value on a view so therefore leaving you in a catch 22 situation - go with your own instincts. Finding a buyer for your home could take longer than anticipated with or without views. In some cases the resale value on house prices have been lowered for a quick sale due the location or neighborhood.
In recent years - attention from potential buyers is drawn more towards the bricks and mortar side of things, but the land is important too. Homes that hold good resale value should sit on land that is as level as possible. If the property is in a typical neighborhood then the land should be square, rectangular, or some type of parralellagram - not odd or unevenly shaped. Size of the backyards are normally found to be a lot smaller in modern homes than in properties built in the days gone by, however, do not lose faith you can still find a decent sized front and back courtyard in smaller properties.
Over-landscaped property is a no go. You would normally expect to pay a premium for this of which you may struggle to claim back when you sell. Best resale values come with premises that are moderately landscaped or under-landscaped. If gardening is your forte then add your own shrubbery bushes and trees.
Houses in residential areas will vary in size. If resale value is an important issue then opt away from buying the largest building in that particular part of the town or village. When determining market value the homes directly aside to yours can hamper a buyers decision so if you buy a small or medium house in that location the larger homes can help pull up your value.
Purchasing property in a more prestigious neighborhood may provide more financial rewards.
Stick to buying property in the size of three to four bedrooms which are the most popular among first time homebuyers. When it comes to the resell deal you have more chance of attracting offers because of the size. Look out for his and her bathrooms - in other words two washrooms. Walk-in spacious closets are extremely desirable in the master bedroom.
Always check out closet space - more space more money in your pocket when you come to selling. Resale Value will increase with a joining garage or conservatory
Have the utility/laundry room located somewhere convenient on the ground floor of the house. Kitchens are about a person`s personal preference but the bigger the better. The serving of meals made easy - is to look for dining and eating places that are adjacent to the cooking area.
Look for easy access to the back yard from the kitchen if you like to entertain in the garden with barbecues. Swimming pools nowadays can deflate the resale price due children and the danger risks. Children should never be left unattended by water. Common sense will help you decide on what priorities come first to help hold the homes resale value.
Relocation To DFW or Austin
by Dallas Appraiser L.L.C. on 05/01/14
Title:
Relocation To DFW or Austin
Word Count:
330
Summary:
If you have found yourself considering a move to Texas, you might be remiss if you overlook the amazingly attractive options offered by DFW or Austin and the surrounding areas. Why are the Dallas area and Austin so attractive? Well, that's an answer that will take a bit of time.
Keywords:
Austin Texas Real Estate, Relocate to Austin, Texas Heritage Homes, Austin Real Estate Market, Silicon Hills in Texas, #Texas_appraiser, #appraisal, #appraiser, #DFW, #Dallas, #Fort_Worth_appraisal,
Article Body:
If you have found yourself considering a move to Texas, you might be remiss if you overlook the amazingly attractive options offered by Dallas-Fort Worth, Austin, and their subsequent surrounding areas. Why are DFW and Austin so attractive? Well, that's an answer that will take a bit of time. For starters, Austin is located along the beautiful Colorado River in the Texas Hills Country. The beauty of this area is hard to beat anywhere in the world. These beautiful hills are home to some of Austin's most luxurious homes which feature amazing views of the city and the surrounding countryside.
Dallas and Fort Worth are located in North Central Texas, and this area is becoming a destination for Corporations around the World. DFW currently caters to the headquarters of over 30 Fortune 500 Companies, and the number of company’s moving to the area is growing annually. DFW is a great home for World travelers, seeing as American Airlines and SouthWest Airlines are headquartered in the area. Dallas and Austin are both young, growing cities, with a bright future in housing.
Many aspects have contributed to DFW and Austin's rise to popularity,but none more so than the excellent business environment discussed prior. DFW also is home to a Federal Reserve bank that sits in downtown Dallas, while Austin’s business niche is in the vast and growing field of technology. The Austin area has followed in the footsteps of Silicon Valley and has become known as the Silicon Hills. This nexus of the technology industry has provided Austin with a great atmosphere for growth and expansion while ensuring the stability of Austin's economy and real estate sector.
Another great reason to consider relocation to the Fort Worth area or Austin is the phenomenal real estate value that is possessed by homes and properties in these areas. In fact, homes in DFW and Austin are priced approximately $50,000 less than the national median.This translates into great opportunity for prospective home buyers. Also, the homes that make up the real estate picture in many Texas cities are of excellent quality and it is possible to find some amazing heritage homes in the beautiful Victorian style that was popularized in the early 1900's. There is also a great selection of new and modern homes and amazing condos and lofts available in many price ranges.
With such a stable real estate market, the services that are offered by DFW and Austin have grown with the increased need. These cities are home to great educational services with multiple public and private University’s. All of these elements have combined to give Austin and North Texas the stable base required to show consist ant growth and stability in the real estate market.
Reasons to Avoid Foreclosure
by Dallas Appraiser L.L.C. on 05/01/14
Title:
Reasons to Avoid Foreclosure
Word Count:
552
Summary:
Real estate is not always an easy venture to be involved in. Mortgages are huge loans, and monthly payments can be extremely steep. Especially with the trend a few years back to give out sub-prime mortgages, there have been a lot of foreclosures lately. But foreclosure should be avoided at all costs.
Keywords:
Home Selling, Home Sales, Foreclosures, Avoid Foreclosures, Real Estate Finance Issues, short sale, #home_appraiser, #home_appraisal, #appraiser, #appraisal, #DFW
Article Body:
Real estate is not always an easy venture to be involved in. Mortgages are huge loans, and monthly payments can be extremely steep. Especially with the trend a few years back to give out sub-prime mortgages, there have been a lot of foreclosures lately. But foreclosure should be avoided at all costs.
So let's assume for a moment that you are unable to make your mortgage payments. You become a defaulted owner. Now what? Well, typically, your lending institution will foreclose its mortgage. If this happens, not only will you lose your property when it goes back to the bank, you will lose all your equity. In addition, foreclosure reduces your credit rating, leaving a permanent stain on your credit account. This can be extremely hard to remove, and may prevent you from ever borrowing again. Finally, you may even have to pay taxes on the debt reduction amount. So in trying to save money, you've only added another expense to your list of bills. All in all, foreclosure is a bad deal for you.
There are two main types of foreclosure, foreclosure by judicial sale and foreclosure by power of sale. In the former, the court supervises the sale of the property. In the latter, the bank or mortgage holder sells the home. In a strict foreclosure, not in use in all states, the bank would assume the deed of the defaulted mortgage, without the obligation to sell. This method is less popular as few banks want to become landlords. Usually, by whatever means, the foreclosure involves the sale of the property.
If you are unable to make your mortgage payments, or in any other way are unable to fulfill the obligations of your lending contract, it is best if you sell your real estate as soon as possible. This may mean selling at a much lower rate than market value, however as a homeowner, you may be able to retain some equity from your home, and you will definitely save your credit rating. This is very important for your future real estate purchases, and just about anything else in your life. By selling your home yourself, with or without the help of an agent, you are keeping the power in your hands. Even if you come out of it with no equity, the chances of losing money is slim unless your home has become totally derelict. Even then, you are still better off selling it yourself than allowing a foreclosure to go ahead.
While in a stressful situation such as mounting debt, it can seem like the easy thing to drop everything and run. But as I've outlined, it is never to your advantage to let a property foreclose. The key to saving yourself from this fate may be an honest analysis of your expenses. If you can see a problem coming, you have more time to act on it. Rather than waiting to the last minute, put your home up for sale as soon as you suspect you will have trouble making payments in the future. The more time you have to sell, the more likely you'll walk away with a fair price for your property. You may even be able to find another, cheaper home, and nobody will have been the wiser that you narrowly escaped financial disaster. Do not be afraid to discuss your scenario with a real estate professional like a realtor or home appraiser before you make a final decision regarding your Mortgage.
Real Estate Forms : Consult a professional
by Dallas Appraiser L.L.C. on 04/30/14Real Estate Forms : Consult a professional
Anytime you spend your hard earned money to buy something, you should always have it documented. During any real estate transaction, it is prudent to consult a real estate professional such as a realtor or home appraiser. On the contrary, when you purchase smaller items, such as items at a convenience store, you typically do not need professional assistance. However, even when buying something small; you will normally be given a receipt. When you purchase larger items, such as televisions and furniture, it will involve a bit more documentation. In exchange for your money, the seller will give you a receipt and in most cases a warranty that will protect your investment.
As you may already know, buying a home involves a lot more paperwork than furniture or even an automobile. Whether you are buying or selling a house, you should always have each step of the process documented. If any revisions are made, they should be recorded as well. Although buyers and sellers can prepare the documentation themselves, most choose not to due to the number of revisions that a single document can have. To help prevent consumers from these types of headaches, ready made real estate forms were introduced.
You can get a ready made form from a real estate agent or download the forms right off the Internet through a real estate website. Ready made real estate forms are easy to use, as they cover virtually all transactions you may encounter - from buying homes to selling them. There are forms that cover just the basics, which are ideal for those with no experience. If you are looking for a more legally binding form, there are also those that cover legal requirements and those that cover disclosure laws as well.
You can choose to purchase these forms on an individual basis as you need them, or buy an entire set instead. Individual forms are ideal for anyone who is involved with short term leases, such as rental property or homes that have been leased out. If you are planning to sell a home or buy a home, you are better of purchasing the entire set of ready made forms. This way, you will have all of the documentation you need and you will not have to worry about purchasing more.
Unlike other types of real estate forms, ready made forms are assured for their accuracy, legality, and even their contents. Manufacturers of these forms spend a lot of time and a lot of energy verifying their documents, and making sure that they are perfect. Although these forms are normally up to date, you should still check with your local law and real estate offices to see if there are any updates.
Real estate laws and regulations aren not revised that often, and normally tend to stay the same for a long period of time.
If you are not sure about what forms you need, you should always ask a real estate agent. Even though ready made real estate forms are easy to understand and use, there are a few types available. If you are selling a home, you certainly would not want to use the same form as someone else who is buying a home. There are also ready made rental forms as well, which are ideal for those who are renting out property or leasing.
With ready made real estate forms, the process of real estate transactions are easier than ever before. By using these forms, you can do everything yourself - without having to forego realtors. You will save a lot of money as well, simply because there is no realtor involved.
The next time you are buying, selling, or leasing out your property, you should look into ready made real estate forms and see just how easy they make real estate transactions. Remember that Real Estate paperwork is always changing, so make sure you contact a real estate professional like a realtor or home appraiser that will know your local market and the ever changing real estate rules and regulations
Dallas Appraiser LLC
Real Estate Investing. Use an Appraiser
by Dallas Appraiser L.L.C. on 04/29/14
Title:
REAL ESTATE
Word Count:
1051
Summary:
Spending thousands of dollars buying books, tapes and attending seminars and then putting all of that information on a bookshelf and never looking at (or using) it. Comment: i am continually amazed at the number of "would be" investors who have spent a bundle of money attending seminars, getting an education and then never using it to start their investment program.
Keywords:
estate, financial, real estate, real, #home_appraiser, comment:, property, investors, money, mistake, investing, investment, mistake, #appraisal first, mistake, income, investor, real estate investing, estate investing, money flow, #appraiser
Article Body:
Mistake # 1. Spending thousands of dollars buying books, tapes and attending seminars and then putting all of that information on a bookshelf and never looking at (or using) it. Comment: i am continually amazed at the number of "would be" investors who have spent a bundle of money attending seminars, getting an education and then never using it to start their investment program. Not only is it a waste of thousand of dollars but it could be the biggest financial mistake you can make.
Twelve Deadly Mistakes Real Estate Investors Make and How You Can and Must Avoid Making Them
Mistake # 2. Failure to learn the basics of real estate investing. Comment: The other extreme to Number 1 above, are potential investors who realize real estate is the best way to accumulate wealth and venture into the purchase of properties without knowing the basics of real estate investing. Those investors are certain to get into financial trouble.
Mistake # 3. Fear of making a huge financial mistake Comment: they all fear making mistakes, especially a large financial one. If you follow the advice in Number 2 above, you won't have to worry about making a financial mistake.
Mistake # 4. Not looking at properties Comment: Don't fall in love with the first property you look at. lots of investors buy properties because they "look nice" or they are to lazy to see what else is currently on the market that may be better. Part of sound real estate investing is in giving yourself a choice so you can select the best one, financially.
Mistake # 5. "A better deal may be around the corner" syndrome Comment: This is the opposite mistake of Number 4. This investor never starts his or her real estate investment program because they always hope a better deal may be out there somewhere if they wait...and wait...and wait.
Mistake # 6. Thinking that real estate investing is strictly a complicated game that only the wealthy can play. Comment: First of all real estate isn't complicated if you learn how to do it first. Did you know that even professional investors use a simple nine step process to analyze the financial feasibility of an investment property?
Here's a brief idea of the nine simple steps they use in analyzing any type or size investment property. A Basic Financial Property Analysis 1. Scheduled Gross Income (Income if 100% leased) 2. Less: Allowance for vacancies 3. Operating Income before expense & Mtg. Pmts. 4. Less Operating Expenses (Taxes, insurance, utilities, repairs and maintenance etc.) 5. Equals: Operating Income (Income before Mtg. Pmts.) 6. Minus: Mortgage Payments 7. Equals money Flow 8. Plus: Mortgage Principle Payment 9. Total Return there is a lot more to it than that, but you read the basic nine step procedure most professional investors use when analyzing any income producing investment property.
Mistake # 7. Falling in love with a property Comment: two times you get your feet wet and become a real estate investor, you'll wonder why you waited so long to begin. Now you'll face another problem. lots of investors fall in love with their property. they've seen how well it is doing, money flow has been going up each year, and they've fallen in love with their tenants (not literally). two big mistakes are made here. First, never fool yourself into thinking your property is doing well to sell or trade up because your money flow is considerably higher than when you purchased the property.
The second part of mistake number 7 is getting so friendly with your tenants that you fail to maintain rental standards based on what the market will bear. This greatly hinders your growth potential.
Mistake # 8. Failure to plan your financial goals Comment: Before you purchase that first property, which, of course, you financially analyzed, determine what you expect from your investments...your financial goals. it is known as "The 'time vs. money'" concept. The more you have of one the less you need of the other in order to reach your financial goals.
Mistake # 9. Trying to purchase properties that the seller isn't motivated to sell Comment: i have seen potential buyers continually try to purchase investment properties that are not on the market. This includes property owners with the attitude that "Sure, it is for sale... for a price". Unfortunately the 'for a price' part usually means it will make no financial sense for a buyer.
Mistake # 10. Believing you can get rich rapid overnight with no money invested of your own. Comment:. Getting rich overnight won't happen . . . (regardless of what a number of the so called "experts" tell you). It takes some time, effort and knowledge of real estate investing to do it with maximum financial risk. The important thing to remember is that YOU can do it, . You can join the millions of investors who generate sizable incomes by investing in real estate.
Mistake # 11. No money down investing usually isn't. Comment: Somewhere, somehow there will be some money required to put a transaction together and make it profitable. It may be closing costs, repairs or upgrading, whatever. But somewhere, some money will be needed. there's ways around this problem without getting into a high risk situation. You may be able to finance every dollar you need, but it can come back to haunt you in the form of mortgage payments you can't afford to make. Again, learn what you are doing first.
Mistake # 12. Not financially analyzing a potential investment property. Comment: This is the most serious mistake an investor, or potential investor, can make. i have seen a few pros in the business rely on a "worthless and inaccurate" rule of thumb to make a huge financial decision to purchase, with total disregard for how well the property will perform.
Oh, yes, there is one more major mistake lots of investor make:
Mistake # 13. Thinking it is important to pay off your mortgage as soon as you can because mortgages are a 'necessary evil'.
Comment: First of all as a real estate investor, mortgages are nice and not a necessary evil. You must learn why this is true. You must learn how, in the right situation, a second or third mortgage can be a nice thing. Second: mortgages are one of the keys to generating wealth in real estate. You must learn how to use financing as one of the keys to generating your own financial estate, without concern for it being "risky". Learn to utilize your local home appraiser or senior broker to make purchase and remodeling decisions.
Dallas Appraiser LLC
Real Estate In Italy
by Dallas Appraiser L.L.C. on 04/29/14
Real Estate In Italy
The visual appeal throughout Italy is something that simply cannot be denied. Italy is a stunning nation, with beautiful lakes, mountains, and ancient cities that are teeming with history. Italy is known as a very romantic nation, with plenty of romantic appeal and activities for your entire family. It also boasts a perfect climate with warm waters that are graced by the Mediterranean Sea.
Throughout Italy, there are no restrictions on foreign ownership on real estate, meaning that buying and selling is pretty much a straightforward process. The first thing you should do however, is to get yourself an independent lawyer, one who will work on your behalf. The lawyer can translate any necessary documents into English so you can understand them. He will also act on your behalf, ensuring that you get a great price for the property you are interested in.
If you are planning to purchase a home in Italy to move to permanently, you may want to sort out your residency status first. Doing so will save you a lot of money in purchase taxes, simply because you will be paying Italian taxes. Residency status in Italy holds several key benefits, which includes property taxes.
There are several real estate agents to choose from in Italy, which makes it in your best interest to contact some of them with your requirements. Doing so will help you get a better prospective on the market and determine what you can purchase for your money. If you have never been to Italy before, you should always allow yourself ample time to get used to the area and check out some of what Italy has to offer.
There are many delights throughout Italy, although you should not let the romance or dream of living in this fine nation steer you away from your task at hand. You should always think about the property you are interested in purchasing, and listen to your real estate agent. If he or she tells you that a property is not worth the purchase, you should listen to what your agent has to say and avoid purchasing a property due to the location.
If you plan to buy rural properties or property that needs renovation, you should be sure to ask the necessary questions, such as the title and deed, access to the property, boundaries, and whether or not the property needs to be surveyed and appraised before you can make an offer. If the property needs renovation, you should always have it estimated. Building expenses in Italy are very high, and they can easily spiral out of control. Before you commit to anything, you should always know your expenses and where you stand with finances.
Once you have found a property that you are interested in, you can make an offer. Keep in mind that if the offer is accepted, it will be valid for 2 weeks, while the preliminary contracts are being created. Once you get the contracts, you should have your lawyer look them over. You wíll need to pay a deposit as well, if your offer is accepted. At that point, you will pretty much own the property and will pay on it until you have it paid for.
Whether you are looking for a second home, vacation home, or just another property, Italy is a great place to invest in real estate. There is always something going on here, and always plenty of romance in the air. For a honeymoon, Italy can’t be beat. If you buy a home here - you will find Italy to be a nation like no other.
