Making Real Estate Investing Work For You

Making Real Estate Investing Work For You

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Home Page > Finance > Real Estate > Making Real Estate Investing Work For You

Making Real Estate Investing Work For You

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Posted: Feb 02, 2010 |Comments: 0
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Real estate investing can be quite profitable, if one is knowledgeable of relevant facts and applies strategies that really work. One needs to be up-to-date in real estate investing market, and this knowledge needs to be reinforced by in-depth analysis and keen observation, a combination of which helps formulate successful strategies. Real estate investing is not a business that rewards you overnight. You need to invest labor, time, patience, and your mind, to taste success.

Novice real estate investors often find themselves losing more in the business than gaining due to their mistakes. However; they are numerous educative resources available that teach real estate investors to identify money-making opportunities.

The first and foremost step to success in real estate investing is planning first and acting next. But this seldom happens in practice. Many Real Estate Investors buy the property first and plan later.

Before taking the plunge, you need to carefully analyze your requirements and decide if you are going to hold the property long term or sell it within a short time. You also need to understand that there can be huge expenses in the form of taxes, mortgages, or maintenance.

The location of the real estate is also a key money-making factor in real estate investing. Make sure that you buy a property that is capable to attract business. However; if the location is not that attention-fetching, you can tempt renters or buyers with appealing facilities. The essence is to transform your property into an attractive real estate that ensures cash inflow.

Purchasing a property at market value doesn’t give much profit in an after-sale. It is essential that you keep yourself abreast of prevailing property prices. Investments in distressed real estate properties that come at a purchase price less than the market value are recommended as they are profit-fetching.

Contacts really matter in real estate investing business. Building good relations with, say, a real estate agent or attorney, adds to the strength of the business.

Success in Real Estate Investing is in understanding that you need to make the real estate property deliver results for you. It is more about careful planning and creating opportunities with what you have.

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Article Tags:
private money, bulk reo, investment property financing, self directed ira, real estate investing, property investing, investment properties, investing real estate, money investing, bulk reo properties, real estate ira investing

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Chuck Sierk from CNSI Enterprises reviews Kenny Rushing’s Bulk REO training. Absolutely the best real life training from a real investor, doing real deals in today’s market. Check out Kenny Rushing and Rush Capital Fund today for your bulk REO and NPN products and training! Check out CNSI Enterprises for “Real Deals Made Easy”!
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More Bulk Reo Articles

How does Bulk REO Investing Work?

There is an myth that needs to be dispelled. The myth going around is that “large bulk REO tapes of billion are readily available”. “Ask yourself this: If you were a bank and had such a valuable asset, would you throw it out on the internet to see if anyone would buy it? NO.And neither will any bank act in this manner.

I would also like to advise that you should also stay away from anyone “advertising” or claiming they “have the product” you need or are “direct with the compiler”, on any real estate forum or any online classified advertising site. They don’t have product and they are not the bank representative.

In the Bulk REO business, there is a process or “protocol” which always must be adhered to. If you don’t know the rules of bulk REO investing, have fun wasting your time. It is essential that you are “connected” to the source as direct as possible, or you will be involved in the biggest exercise in futility known as…”the daisy chain”. There are a number of ways in which to make money with Bulk REO Investing.

The liquidation of “Bulk” REO assets is typically handled by an “Asset Manager”. Most times internally to the institution or servicer. They will typically deliver a pool ( Million to 0 Million) of properties at 50% to 80% of their true value. While the pricing has always been about a percentage, getting to that list of properties is another story. The reason the bulk reo pools are elusive, is simply because they are purchased by well positioned investors before anyone “sees” the list.

Investors must be ready to purchase these pools at a moment’s notice, which means you need to have your buyer’s prepared. The REO process is extremely competitive. New investors to the business will have great difficulties in securing packages if they don’t know “how” the process works. The buyer MUST be identified upfront on the initial LOI or Letter of intent. The seller must know “who” they are going to be doing business with from the beginning because of the US law in regards to the U.S. Patriot Act. \

If you cannot get past the identification disclosure issue with the broker or whoever, then you cannot move forward. Another reason to that critical item is the new “internal” watch lists the banks have in place due to the unbelievable level of fraud attempting to be initiated.

Buyers must be realistic. You need to be working with buyers who clearly understand the current market and price points. Much of the frustration in the bulk reo property investing business occurs when large buyers with deep pockets try to maneuver to get to the front of the line to demand the seller to give the package to them by a certain time and price point. You will find that these types of buyers want the best assets for next to nothing.

Yes, the real estate market is correcting but then again, the buyers must be realistic. This type of behavior does not sit well with banks. These types of buyers/investors will never secure product and more than likely will get themselves blacklisted. This is one of the “hot” topics with bankers and private sellers right now. They are sick and tired of arrogant buyers, uneducated brokers and consultants.

Financial Performance Buyer’s MUST have their financing in order and be able to proof up to get portfolio pools of assets. Cash is still king and a cash buyer will trump any buyer that needs to use credit. Hard money lenders, or Transactional Funding from sketchy lending sources for new investor/buyers does not impress sellers and will more than likely lessen the buyer’s chance of securing a portfolio pool of REO?s.

Recently I have even seen one sketchy company offering new investors a 100 million Proof of Funds letter just to entice them to buy their website investing system. Their proof of funds has already been blacklisted.

The Seller is ultimately the one at the end of the day who decides “who” they will do business with. The Seller will be trading trust deeds for cash and they choose who they will conduct business with. Unfortunately, the buyer’s and involved parties are not in control of the bank?s decision. So let’s all be clear on that…the seller’s are in control of who they sell their asset pools to and at what price!

www.ultimatebulkreo.com FREE 39 page Top Secret Bulk REO Insider Secrets Special Report Ultimate Bulk REO Properties Buy 1 Or 100 Properties For Pennies On The Dollar Listen UP The Old Way To Buy A House Is Dead! What IS Not Dead Is There Is a Stockpile Bank Owned Bulk REO Properties That Is Getting Bigger And Bigger Each Month. The banks need to sell this huge glut of houses in the worst way. The Bulk REO Property Explosion! 273000 foreclosed homes were taken back by banks and lenders in May 2010. These are properties that did not sell as short sales or at the foreclosure auction. The Bankers Problem! Average home price 2500 X 273962 new REO Homes 998065000 That is .98 Billion In New Bank Owned REO Homes Each Month. FREE 39 page Top Secret Bulk REO Insider Secrets Special Report www.ultimatebulkreo.com How Would You Like To… Find Out How You Can Locate These Bulk REO Properties and Buy Them For Pennies on the Dollar? Why Haven’t You Been Told This? I don’t know why all the short sale foreclosure guru’s are still pushing short sales? When it can take up to a year to do just one short sale deal? Do you have a year to waste trying to get a short sale deal closed? NO! Are You Ready? Isn’t it about time you had your own personal bail out? Is It time for you to climb out of this recession? Ready to find out how you can access the 49.98 Billion on new Bank Owned REO Inventory Each month? Here’s What I Got For You… FREE 39 page Top Secret Bulk REO Properties Insider …

When Transactional Funding Alone Won’T Work (Transactional Funding, Part 3)

Now that you understand how transactional funding works, it probably has taken a pretty big load off your mind. Turns out, despite the new laws that require your name to be on the deed of a property that you sell, you can still get funding that is not a risk to you or the lender without having to have perfect credit and a huge down payment on the property.
However, there are times that transactional funding alone will not work to smooth the short sale flipping process. This occurs in a deal in which there is a mandatory â??seasoningâ? process, which requires a buyer to hold a property with their name on the deed for a period of days, weeks or months before they can sell. As you can see, this can seriously slow the flipping process, especially if you are dealing with a buyer who wants to move in immediately. Seasoning is another method that legislatively works to help prevent fraud, but many investors feel that it is also deliberately designed to make flipping difficult and target the real estate investing community. There are two ways to deal with seasoning:
1. Find a way to work with it
2. Only invest in areas that do not have seasoning laws
It appears that many governing bodies are starting to see the flaws in the seasoning process, and many lending and legislative bodies are taking steps to undo the regulations that require seasoning. However, at this point in time, it is still something that you must consider before you flip a short sale. 
If you are required to season a property before selling, then you will have to obtain some source of funding that will enable you to hold the property for the required period. This may involve credit checks, but many investors have found that private money lenders are a good source of funding in these cases, just as they are for construction loans and rehab deals. It is vitally important that you find out the seasoning laws and rules in an area before you set up a short sale deal. Otherwise, you may find that you have devoted a lot of time and energy to a lost cause if you are unable to season the deal as required.
There are some cases in which you can creatively work out a way to enable a buyer to basically take possession of the property during the seasoning process. However, these methods must be carefully checked out with an attorney to insure that you do not jeopardize your own funding or your buyerâ??s in the process. 
Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit www.CoachingByPeter.com.

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How Real Estate Hedge Funds Work

Real estate hedge funds are investment funds designed to invest in and trade stock, debt and commodities in groupings that allow for the greatest dividends, payouts, and gain. Real estate hedge funds must take into account both the intricacies of the real estate market and the volatility inherent in them, and ride out the storms of volatility within the trading market as a whole. Hedge funds have been around since 1949 when Alfred W. Jones created the first ” hedged” fund, believing each investment was affected byy the whole market as well as by its own merit and found unorthodox and varied ways of profiting from that belief.

Hedge funds are open to a limited number of select investors, and each hedge fund has specific and detailed investment strategies, geared toward making the greatest profit possible in a relatively short time. Not as constrained as traditional mutual funds, they employ a wide variety of techniques to reach their goals. A hedge fund seeks to minimize risk by spreading the risk over numerous and various investment potentials, using a variety of methods, including short selling and derivatives. Real estate hedge funds work by understanding the market and taking advantage of expected changes in the market, even finding a profit during an economic downturn. The price for their unorthodox methods and skyrocketing success (or plummeting failure) are fees paid by those who would invest through hedge funds, including management fees, performance fees, high water marks, hurdle fees, and withdrawal/redemption fees. Investors are not always free to withdraw or redeem funds at will, but must wait to redeem based on contracted time tables.

Hedge funds use numerous investments in an overall attempt to turn a profit. They buffer potential loss by fanning out the investments for their investors and watch each market carefully for when to by and sell stocks, bonds, commodities, futures, and the like. Short-selling, or shorting, is the practice of selling off borrowed assets, especially securities in the hope of buying them back at a lower price before returning the borrowed assets to the rightful owner. The investor profits by the asset decreasing in price, not by an increase. Loss can be incurred if the price of the security actually goes up. Derivatives are an agreement between two parties based on the estimated future worth of an asset, and involve no real exchange of ownership or property. These can include any securities, including options, futures, and swaps. There is no inherent value in a derivative, as it is not an asset. Its worth is based on an underlying, an asset to which the two parties agree the investment is tied and therefore guides the value of the security. These securities are commonly traded before their expiration much like assets, basing the price on formulas and theoretical calculations drawn from economic modeling.

Returns for investors in hedge funds are expected to be higher than the relative returns within the greater market, due to their varied investments, innovative investing strategies, and methodology. They are based on the performance of the fund as a whole, less fees and losses incurred by any of the methods employed. Returns on hedge fund investments can be expected in both rising and falling economies, and with good management, in volatile economies. Returns over a sustained period of time shows that most hedge funds with competent leadership out-perform equities and bond indexes, avoiding much of the volatility and loss they commonly incur.

In the present economy, hedge funds expect to make major profits through distressed assets, multi-unit and commercial buildings. Distressed assets have a value severely diminished due to the investor or issuer rather than market in general, but distressed real estate is a rampant problem with values nowhere near previous appraisals. Oftentimes the distressed values mean that mortgage owners owe more than their property is worth, leading to major debt concerns. These hedge funds often invest in such assets with the hope of selling once the market regains much of its previous value. The same is true with commercial and multi-unit real estate that due to market conditions, declining neighborhoods, or poor management have lost much of previous worth.

Real estate hedge funds are indeed varied and intricate investments formulated to turn a profit in any economy through manifold strategies and investment tactics. The risks are great and prices are high, but for those privileged to be included in the investment, great possibilities await.

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