Find Great Real Estate Deals

20230526054039_64704657c0b97.webp

3 SIMPLE TIPS TO FIND GREAT REAL ESTATE DEALS ANYWHERE

In a hot market like the one US is experiencing now, it’s hard to find great deals. Everything is overpriced; median real estate prices are up 160% since 1990, whereas incomes are up 90%, according to seekingalpha.com. Yet, there are great deals up for the taking and this applies with foreign properties also. However, you don’t want a property that will eventually turn out to be a money sinkhole. What should you look for while on the search for your next profitable real estate investment.

1.     Less Risky.

All real estate investments are risky. However some investments are more riskier. There are so many things that can go wrong with development of real estate, land, Tenant-in-Common (TIC) investments, private real estate funds and fixer uppers. These investments are high risk. You may not see a dime of the money you invest again. Before you put money down, it is necessary to do considerable due diligence, analyze, test, review reports etc., to avoid making risky real estate decisions.

2.     Fair cash-on-cash return.

Your stocks, bonds and other financial assets generate a rate of return of between 4% to 6%. Real estate shouldn’t be an exception. It is necessary to shoot for deals that give a fair cash-on –cash rate of return. This means that you need to buy cash flow positive properties and always pro-forma your deals. Check how pro-forma works in real estate investments

3.     Doesn’t take too much of your time.

If you have to travel every week to check out the status of your investment property, then it’s not worth the effort, money and time. These type of properties require considerable time and energy investment before they become smart investments: vacation rentals, low quality properties in bad areas, college rentals etc.

Here are four basic hints you also can use to find great real estate deals, regardless of whether you're searching for an investment property, a property for your business or just a home for your family.

 

 

 

1. Be the first. . . Or the last one.

In real estate, often the old adage is true: The early bird gets the worm.

Often, it is not the highest bid for a property that is accepted, it is simply the first. So, if you are looking to find great real estate deals, be quick about it! Obtain prior approval from a bank so you can jump to any property immediately, and let your real estate agent set you up with automatic email alerts notifying you of any new property coming to the market. So, do not delay - check it out quickly, and make an offer the same day if possible.

On the contrary, another way to find great deals is to look for properties that have been in the market for a long time. Such homeowners are often much more willing to sell for a discount because they are tired of clinging to that property. Many times, they have been making two mortgage payments for months (or years) and will entertain almost any offer.

2. Approach absentee owners in private.

Some of the best kinds of deals can be got from absentee owners, which simply means someone who owns a property but does not live there. They may be landlords (who hate their tenants) or homeowners who inherited their homes and simply do not know what to do with them. You can find these deals in a number of ways, such as:

Drive around, look for vacant homes, and use public records online to track the owner

Buying a list of public records using an aggregate list site such as ListSource.com

Calling mom-and-pop owners who are listing "for rent" properties on Properbuz. Let them know that you are not interested in renting, but would like to talk to them about the purchase.

3. Take a look at a large number of deals.

Finally, recognize that finding discounted prices is basically a "numbers game." You may have to kiss a great deal of frogs to get the prince!

Whether you want to buy an investment property, buy a home for yourself or buy real estate for another reason, keep in mind: You make your cash when you buy. If you wish to have immediate equity on your investment, which can help you build prosperity in the foreseeable future, or save in case there is an economical turndown, you must find great real estate deals.

Previous Post

Buying Property Abroad

Next Post

5 Invaluable Property Negotiation Tips For Overseas Real Estate

Related Posts

20230526050841_64703ed9afd16.webp

5 signs youre cash flow negative on your vacation rental property

  • 17, October 2023

Spending money consistently on a cash flow negative rental isn't smart. It might be time to change your strategy.

 

Vacation rentals are a great way to make extra income from your property investments. Short term rental provider, HomeAway https://www.homeaway.com/info/getting-started/income reports that the run-of-the-mill vacation rental property owner nets $11,000 a year.

 

But if you consistently have to spend rental profits on roof repairs, vacancies, regular maintenance, bad tenants etc, you probably have a cash flow negative property on your hand. And there are two approaches to dealing with this problem. You can either wait it out and hope things will somehow change or kickstart an exit strategy to move on.

 

While cash flow doesn't have to be a decisive factor, especially when you have a vacation rental property in an up and coming neighborhood with strong potential appreciation rates. Many times, you might be spending more than you bargained for with your rental. And the faster you discover this, the better.

 

This article outlines five signs of negative cash flow vacation rentals but before we proceed let's see a simple formula for measuring cash flow on an investment property:

 

Cash Flow = Total Income (Application fees, Rent, etc.) - Total Expenses (Monthly mortgage (if applicable); General Maintenance, Electricity, HOA, Property Management, vacancies etc.)

 

As a rule of thumb when buying an investment property, it is wise to set aside an emergency fund to cover at least first six months of expenses. So let's dive right in and see some of the signs to watch for.

 

1. High vacancy/Low occupancy rate in a location: What's the occupancy rate for your neighborhood? An important sign of a cash flow negative property is high vacancy rate in the neighborhood. According to Turnkey VR https://blog.turnkeyvr.com/much-money-can-make-vacation-rental/ specializing in the management of turnkey vacation rental homes, "Occupancy rates for vacation rentals can be all over the map. For instance, a vacation rental home in a big city might create more demand than a rental property at a seasonal location like the beach". Location is key when buying real estate, especially for investment. Hence it's wise to spend time researching a neighborhood before taking the plunge.

 

2. High Maintenance property: Are you doling out high monthly fees for property maintenance? Then you might be dealing with a cash flow negative property. A 30-year-old property might offer a great deal but when you have to spend considerable time and money on maintenance and fixes monthly, you have to ask yourself if it's worth it.

 

3. Declining Rental Property Market: How strong is the rental property market? There is a strong correlation between a thriving property market and low vacancy rates. Many times a declining rental market is a sign of underlying economic issues, most times accompanied by high unemployment rates and slow growth. Sticking around in such a neighborhood would be unwise. Unless you're confident about a significant development in the neighborhood in coming years.

 

4. High Property Taxes: Did property taxes go up? Taxes can get tricky, especially when you're buying as a foreigner. However, when sudden tax changes are eating up your income, then you have a negative cash flow property.

 

5. Problem Tenants: Are problem tenants eating up your profits? You have two options, regarding managing your rental property. You can either hire a property management company, which means more expenses but better management. Or you can just ride it solo. While this offers you the chance to take an active role with your property, dealing with problem tenants (tenants who break things, tenants refusing to pay rent or pay promptly, tenants causing disturbance etc.) is a major headache and can eat into your profits.

 

Hence the importance of having a screening process that's hard to bypass. However, if you deal with problem tenants a lot, it might be time to consider setting an exit strategy in motion.

 

You can take advantage of short-term rental cash flow with sites like HomeAway and AirBnb. While tenant turnover rates can be high in the short term, short term rentals can be profitable, especially in a popular destination such as a ski resort or beach community.

By Bebuzee Admin Read More
20230526053617_647045517f690.webp

5 Invaluable Property Negotiation Tips For Overseas Real Estate

  • 25, February 2023

In the book Cross-cultural Business Negotiations by Donald W Hendon, there is this story about a US sales professional with years of negotiating prowess in the US, pulling down walls due to his aggressive negotiation skills. He was asked to negotiate a business deal in Japan and he failed because the same aggressive skills that brought home the bacon in the US was considered a sign of weakness and insincerity in Japan. So negotiating on foreign soil presents a little more challenge.

But whatever the reason for negotiating or the country in which you are negotiating, the important thing is looking beyond the surface and understanding the motivations of the other party. This might be hard to do when you have barriers like cultural, socio-economic, political and religious differences. But you can break through those walls and infer the motivations of the other party; study weak points, analyze your strong point and get a win-win result. Here are property negotiation tips to achieve these whether on home or foreign soil.

1.     Be respectful.

Being respectful and courteous tells the other party you’re calm and might signify you have the strong ground. This would make the negotiations an enjoyable ground for you. Moreover, everyone likes respectful people. Likability can work in your favor. But going in all firing with an aggressive attitude and you could be sending the wrong signals.

 

2.     Do not be afraid to ask for what you want.

Successful negotiators are assertive and challenge everything - they know everything is negotiable. Being assertive means asking for what you want and refusing to accept NO for an answer. (Check the difference between assertiveness and aggressiveness). However practicing being assertive will take care of your interests while maintaining respect for the interests of others. When you put your own interests in front of others and with a lack of respect, then you are negotiating aggressively.

 

3.      Listen.

The most popular word in the English language (or any other language for that matter) is "I". Therefore, it stands to reason that most people love to hear themselves speak. Communication is imperative in any negotiation. Negotiators are looking for that point that will unite the two sides and create a platform for a result. Good negotiators ask questions and then listen. The other party will tell you everything you need to know - all you have to do is listen. Follow rule 90/10 - listen 90% of the time, speak 10% of the time. Make a lot of open questions sit back, relax and listen and you will be amazed at what you hear.

 

4.     Be Prepared.

It’s not a good strategy when you have to sit down at the negotiating table and think "I wish I'd known that" or "If I just found out before leaving the office. Know whatever there is about the house, the neighborhood and the state before getting to the negotiating table.

 

 

5.     Always be willing to walk.

Never negotiate without options. If you rely too much on the positive outcome of a negotiation, you lose your ability to say NO. When you say to yourself: "I will walk if I cannot secure a negotiation that is satisfactory," the other side perceives that you mean business. Their resolution will force them to make concessions.

Doing your homework is vital to successful negotiation. You cannot make accurate decisions without understanding both sides of the process. The more information you have about the people you are trading with, the stronger your negotiating power.

By Bebuzee Admin Read More
20230526054120_64704680b6940.webp

Buying Property Abroad

  • 07, January 2023

BUYING PROPERTY ABROAD: HOW TO CURTAIL RISK WHEN MAKING OVERSEAS PROPERTY INVESTMENTS

Many people are buying property abroad today because of the investment potential. The price of foreign property can be especially attractive when exchange rates tip the balance in favor of a prospective buyer’s currency. Imagine buying a beachfront house in Brazil for $50,000 when you’d spend $400,000 for the same house in a place like Orange County. Buying property abroad is a way to get actively involved during retirement.

If you don’t want a hands-on management, this type of investment would still generate passive income for you, an income not depending on the US dollar, denominated in another currency. There are reputable property management companies that can help you take care of your new investment and help you make consistent rental income from your investment. The fact that many Americans are not preparing adequately (or even preparing at all) for retirement means many Americans are not living out their dreams after retirement. “About 60% of Americans have no savings in retirement accounts like 401(k)s or IRAs,” reports Business Insider. The Employee Benefit Research Institute (EBRI) estimates the shortfall in retirement savings to be at $4.13 trillion for heads-of-households aged 25 to 64.

One of the reasons why many Americans lack sufficient retirement savings is that the traditional means of saving are unreliable, according to USmoneyreserve.com. If protecting your retirement is important to you, buying property abroad can help you get the ideal retirement and offer the kind of security that other asset classes cannot provide.

Moreover, there are wasteful aspects in some markets that haven't worked themselves out yet, and those inefficiencies can work further bolstering your good fortune. For example, there are some markets in the world with restricted wellsprings of capital where people need money. Without access to easy credit, they frequently offer their property at a much lower cost to have fast access to money.

Furthermore, when you spend money on overseas property you do not just get the benefit for those market inefficiencies, you additionally have the advantage that a lot of shareholders are so concerned about risk that they create no real hazard, nor create any competition. But even though overseas properties offer a chance to diversify your investment and can help you get the retirement of your dreams, there are some risks. Here are some tips to help you curtail risk when buying property abroad.

 

1.     Read the books.

The key to successful property investments overseas is to do your homework and not cut corners. By all accounts, read books about the country you are considering buying an international investment property and read relevant forum posts online but do not get sucked in by the sellers and never overlook the power of local knowledge. Even a simple walk around the area can give you a great insight into the events and settings that take place on a daily basis, giving you a real feel for the place.

2.     Beware of overseas investment property in "emerging markets".

This term can be used to dress up areas of neglect. Look around for signs such as closing shops and boarded up houses, as these may suggest a struggling economy. If you come across something else that you do not feel at ease with, do not go with the property investment. Foreign buyers should feel 100% safe in the area before taking the plunge. Likewise, if you look at a series of new developments that are beginning to emerge, this could be a sign that the real estate market in the area is about to take off.

3.     Do not leave yourself at the mercy of the laws of the country when buying property abroad.

Buying investment property on foreign soil requires the advice and guidance of a local lawyer. Before you sign on the dotted line, make sure you are accredited and credited as well as fluent in English and the language of the country you wish to purchase.

4.     Don’t take the risk of using cash.

Using a bank with an office abroad to conduct large transactions is always the best. Foreign investment properties and those that sell them must be approached with caution and due diligence.

It’s normal to be apprehensive when buying property abroad for the first time or trying anything new. And yes, the risks are there but to be successful in property investing, you mustn’t let that hold you back.

By Bebuzee Admin Read More