Investing in Real Estate can provide both short term and long term profits. I have built a good portion of my Real Estate business with investors. My clientele consists of those who purchase properties to "fix and flip", those who purchase properties to rent, and those who dabble in a little bit of both. I take a very ethical and no-nonsense approach to Real Estate investing. I also strive to make all my investors comfortable and therefore go above and beyond to ensure great transactions before and after the sale. Read further for more information and clarification about Real Estate investing.
Purchasing Properties to "Fix & Flip" - The term "fix and fllip" refers to the purchase of a property in distress that is remodeled (fix) and sold immediately thereafter (flip). There are a couple of ways to acquire properties in distress. Arizona has a very high foreclosure rate and the homes that are not sold at a Trustee sale will revert back to the bank. The banks will then put these homes on the market for sale. It is possible to purchase distressed homes for far below current market value opening he door to fix and flip yieldin short term profit. Myths Explained: I can offer 50% of what a seller is asking for a distressed property. - You can offer any amount you want, HOWEVER, chances are you may have a difficult time getting an offer accepted. Remember, most homes in distress are priced below market to begin with. Furthermore, Real Esate investing is competive. There are hundreds and hundreds of investors scoping out the same properties. It is not uncommon for good properites to have multiple offers at once. Coming in with a ridiculously low offer is not a good idea if you are serious about purchasing. I can make $20,000 on every house I "fix & flip" - I wish this were true!! If it were there wouldn't be hundred of investors to compete with, but thousands. It is possible to net $20,000 on a transaction but consider yourself very fortunate when you do. A realistic investor will expect to net an average of $7,000 per transaction. That does not mean that Real Esate investing is not lucrative though. If you keep your goals and expectations realistic you can close a deal every 45-60 days. Doesn't it make more sense to close 7 deals a year netting $7,000 per deal ($49,000) than it does to wait for that one a year that might net you $20,000?.
Purchasing Properties as Rentals - This method of investing is pretty straight forward. An investor purchases a property to rent out. The idea is to find the most property for the least amount of money and to rent it for an amount greater than the total costs to keep it monthly. Any home can be purchased as a rental investment. This type of investing will net you long term profit. Some Things To Know: Rental Properties Can Provide Good Tax Benefits - Although rentals provide minimal upfront profits they can be beneficial for tax purposes. You can deduct many costs associated with owning a rental property on your taxes each year. For example, the interst on the loan as well as the costs associated with maintaing the property may be deductible. As always you will want to consult a tax advisor as to the exact benefits. You Can Rent Your Properties Through Government Programs - I am a huge advocate of Arizona's Section 8 program. Many investors I speak with don't know about this program or have derogatory preconcieved notions about it. The truth is, this program can be extremely beneficial for an investor. In a nutshell, Section 8 is a voucher program where the tenant recieves an allowance from the government for rent each month. As a landlord who accepts Section 8 you have the convenience of knowing that your rent will be paid, on time, each month. Furthermore, there is no difference between leasing a home to a Section 8 tenant and a "regular" tenant except for where the monthly payment comes from. All rules and regulations of the Landlord Tenanct Act still apply. Best of all the process is very easy. Email me at www.andreasellsaz@msn.com for a complete information package about the Section 8 program. All Rental Properties Must Be Registered - Pursuant to A.R.S 33-1901 and 33-1902 all owners of rental properties must submit a special form to the Maricopa County Assessor's office designating that property as such. This is a very simple process that is often overlooked. You can read more information or download the form at: http://www.maricopa.gov/assessor/residential_property_form.asp |