How to Make Money in a Bad Real Estate Market!

There is no bad real estate market, only people with problems who happen to own real estate!

To build your own real estate investment company, to become a real estate entrepreneur, you need a system that combines the tools and knowledge to provide solutions to these people’s problems. These are human problems, not real estate problems. People die, they lose their jobs, they get into financial troubles, they get divorced, etc.

These “Trigger” events, combined with the lack of cash savings and little equity most homeowners have in their homes today can lead to extreme financial, emotional and even physical distress; as homeowners struggle to keep up their payments and/or are frustrated by their inability to sell their properties.

Think about it. If the payments on your house were killing you because you were stuck making two mortgage payments; the sale of your old house fell through after you closed on the new one.

Wouldn’t you be lying awake at night, worried sick about running out of money and having to face the embarrassment of foreclosure?

What if you did not have much equity and the costs of a sale, which could be 20% or more of the value of the property, would eat up a good chunk of your remaining savings? Wouldn’t you be praying for someone to come along and solve your problem?

You might even get so desperate that you would actually Give the property away to anyone who would take it, just to be rid of all the stress!

We have just taken a good look at one side of the profit equation, the seller’s side. There is also a buyer’s side.

There exists a Shadow or Phantom market of buyers for real estate. Most are self employed people or small business owners. Others have had recent bankruptcies or foreclosures.

Still others are foreign nationals. They can afford to buy real estate but for various reasons cannot or do not want to qualify for a bank mortgage.

You can solve their problem by selling them the homes you pick up from the desperate homeowners! You sell them with seller financing. The Phantoms will reward your “kindness” by paying you premium prices for your properties!

You can get started as a part time investor with a basic real estate investing system:

· “I Buy Houses” flyers, business cards and ads

· A voicemail system to take calls

· Knowledge to buy properties from distressed sellers “subject to” the mortgages

· A marketing program to develop a pre-qualified list of Phantom buyers

· Knowledge to sell properties to these buyers on Lease Options

If you wanted to build yourself a full time real estate investment business that can generate huge profits, you need a more comprehensive system, which today can be automated and Internet based, but the point is, you can get started today with the basic system!

Luxury Real Estate Marketing Essentials - Specialized Knowledge is Power

How many times have you heard the phrase "knowledge is power"? In the field of luxury real estate, we say, specialized knowledge is power--earning power!

Building a high volume luxury real estate practice begins by acquiring specialized knowledge. Mastery of the fundamentals of real estate sales, negotiation skills and personal integrity is merely the price of admission to the luxury arena. The key to becoming the standout in your market area comes down to your ability to easily and rapidly connect with wealthy individuals. You need to speak their language and comfortably converse on topics that interest them. That's where specialized knowledge converts to earning power.

People like doing business with people like themselves. The more common ground you establish with wealthy individuals the quicker they will be impressed with you and trust you. People also like to talk about what interests them. If you are interested in their interests you can rapidly develop a rapport and create a strong bond.

Many wealthy people have embarked upon "the quest for the best". That is, the best of everything that money can buy. For example, do you know what is considered the best Champagne in the world? If you came up with Dom Perignon or Crystal, which can be purchased for about $120-$200 per bottle you are close. [As an aside, you might impress Dom Perignon lovers with the fact that Costco sells more of that Champagne than any other retail outlet].

The answer is Salon. It distinguishes itself as the only champagne in the world that is bottled to order.

The House of Salon Champagne makes only one wine, the vintage tete-de-cuvee Blanc de Blancs. And, it is only produced in the years when the grapes are at their peak. Since its existence in 1921, it has only made 30 vintages. Salon uses the first pressing from hand selected grapes to assure the highest acidity, aroma, finesse, ripeness and quality. The grapes come from the original 12 acre estate, as well as selected vineyards in three distinct microclimates in Le Mesnil-sur Oger. The distinct difference between Salon and other Champagnes is that Salon does not put its wine through the process of malolactic fermentation. That process involves introducing desirable bacteria that prevents undesirable bacterial strains from producing off-flavors. Instead, eight to ten years of cellaring are required to achieve the perfect balance between fruit and acid.

Salon is kept on its yeasts in deep limestone cellars until a specific order is received. Only then is the yeast removed by hand for each order, with the cellar master inspecting the bouquet of each bottle. The latest 1996 vintage retails for $304. Salon can continue to age for an additional 15-20 years or longer and will develop increased complexity.

Specialized knowledge about subjects such as the making of champagne empowers you to stand out from the crowd. It differentiates you from your competitors. It shows that you have depth. It allows you to confidently engage in conversation on topics other than real estate.

When potential clients discover that you are interested in what interests them (Champagne in this case) they will often invite you to special events such as wine tastings or dinner parties where Champagne is served. Here you will meet others with similar interests.

Be sure to get the contact information from everyone one you meet. In your contact management program (Outlook, Act, Top Producer, etc) make a note about who has what special interest. Build rapport by sending them new discoveries that you make on your personal quest for the best, on this subject. For example, if a certain local restaurant has a particularly good wine list that includes a new Champagne, jot your new contacts a note about it and let them know how well the wine paired with the meal you ordered.

A good place to start learning about Champagne is on www.Wikipedia.org. This is an excellent resource for the luxury realm. Or, go out and buy a bottle. Put it on ice, Invite some friends over. And, celebrate your personal quest for the best, as you embark on your career as a luxury real estate expert.

How do you start building a luxury real estate practice?

Make a commitment to become a perpetual student, someone who continuously acquires specialized knowledge such as the process of making Champagne;

Become passionate about the "quest for the best", yourself.

Become more interested than interesting.

The luxury arena is the realm of relationships. It is just as easy to acquire specialized knowledge about the finer things in life as any other subjects. Your personal quest for the best is the route to building a high volume luxury real estate practice. It can be enlightening, enriching and very much fun!

Sell Your Real Estate Knowledge

Writing a simple e-book on a real estate related topic require no large investment, but has large profit potential. However, this isn't just about passing on your knowledge. You also need to learn marketing skills - perhaps even more than writing skills.

Know something about real estate? You can sell your knowledge. Perhaps the easiest way to do this is with simple e-books. They are cheap to make and unlike with paper books, you can keep most of the money from every sale.

It cost $50 to set up an account with an order processor like ClickBank, and probably less than that to set up a simple web site to sell your e-book on, if you do it yourself. A domain name costs less than $10 per year to register, or about 75 cents per month. Hosting for web sites is as cheap as $6 per month now. If you don't already have internet access, you can get it starting at $10 per month (although I recommend paying $40 for cable internet access).

What other business can you start for a couple hundred dollars or less, and have overhead costs of less than $50 per month? If you use simple articles to promote your web site (as I do), you don't even need to spend a penny on advertising. At 999articles.com, you can even get a free e-book showing you how it is done.

The most common standard now is Adobe PDF. Many will tell you that you have to pay $300 or more for the PDF creation software, but hat isn't true any longer. You can use Adobe PDF online to make your e-books without having to learn nearly so much technical stuff. Get the book right the first time, and you can even do it for free (they usually give free trials). Otherwise, you can pay just $11 per month to use the service as long as you need it.

Selling Real Estate Knowledge - An Example

What can you sell? Try to find a new angle. Books that simply have 70 ways to invest in real estate, or another rehashing of zero-down techniques are tough sells. If you can sell them at all, you probably won't be able to price them very high. People want something new.

Certainly, you can just report on what others have done, and give examples and easy to understand explanations. But is better if you have some personal experience in a specific area of real estate, so you can speak with authority. It is best if you not only have experience making money in some specific way, but it is also a way that can be done in most parts of the country. Leasing cheap land in Northern Michigan to Christmas Tree farmers may have been very profitable for you, but it won't get people in other parts very excited.

Suppose you have learned how to buy houses with basements and convert the basements into legally conforming bedrooms. Basement space adds little to the price of a home until it is carpeted and has proper windows to make it legally habitable space. By doing so you have made a large profit buying and selling several homes. Put your system on paper!

Many areas of the country have homes with basement that are unfinished. There are a lot of investors who can't seem to make any money with their over-priced rental homes - and they would love a new way to make some money. This is a book you could sell.

In the above example, the goal would be to make the e-book as useful as possible. Make it a step-by-step guide and you don't even have to make it very long. Many e-books that sell for as much as $60 or more are less than 100 pages, and why not? One good idea can make or save the reader hundreds of dollars after all. As long as the most crucial information is there, and it is an easy-to-read and easy-to-apply format, you have done your job.

At least you have done your job as a writer. The next important job is as a marketer. This is the job that really makes you the money. In fact, this is so important that you may want to pay for someone to write your sale's page. This can cost as much as $2,000, but you may sell three or ten times as many books as if you did it yourself. Ask for examples of previous successful work.

If you are short on cash, you could try to arrange to pay a nominal fee up front and then a percentage of each sale. This could mean much more in the long run, but keep your initial costs down. It also means that the ad copy writer has a keen interest in making a page that sells.
It is always a good idea to have a bonus or two that go with the book. This can be another short book on a related topic. It can also be something as simple - but useful - as a checklist for inspecting houses or searching for them.

How much can you make? That depends a lot on your marketing efforts. Let's suppose you create a $27 e-book or "e-course". Using ClickBank as an example, you will get to keep about $24 of each sale. You can also offer a commission of say, 50% to other ClickBank affiliates who refer customers to you. These are sales you otherwise almost certainly wouldn't have, so $12 is more than fair.

If, by distributing articles you can generate traffic of 200 visitors daily to your web site, and 1% of them buy the book, you'll sell about 60 books per month, for an income of $1440. If affiliates refer another 20 sales or so your way, for another $240 in revenue, the total would be $1680.Want more income? Promote the book more, or leave the site to do it's thing and write another book.

Real Estate Finance Problems - Go BK or Foreclosure Route?

America is the land of second chances. If you have financial problems, you might be wondering which the better option for you - bankruptcy or foreclosure?

Bankruptcy has been around for a long time. It was the answer to the question of what happens to someone with immense debts. Whereas people were previously imprisoned in debtors' prisons, bankruptcy was based on the idea of modifying or eliminating debts to give people a new start.

Foreclosures, in contrast, have long been viewed as a remedy for a lender, not homeowner. A foreclosure is not about giving a person a second chance. It is about a lender taking back a home that a person has failed to make loan payments on. There is no redeeming element to the foreclosure for the person in question. It is just a disaster.

So, which is route should you go with real estate problems? Well, both are damaging to you. That being said, bankruptcy is probably going to be viewed in a worse light. Why? Bankruptcies typically are filed where you've made a complete habberdash of your finances, not just run into problems with paying a mortgage. Thus, it is seen as a more comprehensive failure on your part and lenders are going to be very hesitant to loan money to you.

There is a second reason foreclosure is more favorable than bankruptcy. It is no secret great swaths of homeowners are in dire financial situations. Millions will end up in foreclosure. These millions, however, are also future homeowners. Once the current mortgage mess and credit crunch cleans up, it is believed that a solution will be created for these foreclosed individuals to borrow again in the future.

If you are facing foreclosure, you have a better option than bankruptcy. Contact your lender and see if they will allow you to do a short sale. Lenders really do not want to own homes, so they will give out forbearance and short sale options like candy. A short sale can hurt your credit, but nothing like a bankruptcy or foreclosure.

How to Finance Investment Property - 4 Key Questions You Need to Ask Yourself!

How to finance investment property is a question that anyone involved with making money from property has to ask themselves at some point. This article will help you to understand some things that you need to understand, and questions you need to keep in mind in order to finance investment property effectively and profitably.

What is the long term goal for the property?

This question is key because if you plan to renovate the property and sell it straight on then you will want to make sure that you have your finance set up in such a way so as not to incur large fees to pay off any loan you have taken out to buy the property. If you plan to rent it out and you are UK based then you will need a buy to let mortgage and you might want to have a fixed rate for a least a couple of years on the mortgage, especially if the interest rates are fluctuating at the time of purchase.

Do you have back up funding in place?

Ideally you want to have more than one lender as an option to fund your purchase; therefore, if the lender you are using gets cold feet or wants to back out for some reason, you have other options already prepared. This is particularly important in the current market place since we are in the midst of a global financial crisis and many lenders are either tightening their purse strings or filing for bankruptcy.

Are you credit worthy?

Even if you have bought investment property before, don't take it for granted that you are credit worthy enough to buy it again. As a professional property investor or developer one of your main priorities should be to make sure that you have an impeccable credit history.

The strange thing is that this actually means having some debt. You could have 10 properties that you pay the mortgage for on time every month without fail, yet when you try to buy another one, they refuse you. There are many potential reasons for this, one of them being that sometimes lenders like to see you with some unsecured debt that you are paying off. If in any doubt as to your credit worthiness check with one of the top credit reference agencies to see what they have on file about you and to get some advice.

What are the tax implications of the purchase?

When thinking about how to finance investment property, you need to have a grasp on what the tax implications are for you personally to invest in the property you are considering buying. Sometimes it is better to buy property as an individual; sometimes it is better to buy as a company.

There is no hard and fast rule. A major consideration, is what are your plans for the future, if you plan to move abroad in five years for good, you might invest with a different strategy than someone who plans to live in their particular country for the rest of their life.

It is advisable to speak to a tax specialist about your plans for buying property and your long-term goals in life in general, so that you buy the right type of property in the right way. By doing this one thing you could be saving yourself hundreds of thousands of pounds in a relatively short period of time.

Thinking Forward Regarding Your Commercial Real Estate Loan

Regardless of what we often have in our business it is always wise to search for what you think will be a big help in your investment. So with that being said let us try to focus on real estate investing. Well there are many types of real estate investing and one of them is Commercial real estate. Well, from that alone we can figure out what types of investment we vaguely want to happen. First there are these known things to consider in its market alone, it is not just a simple thing to know but rather a different one. Securing Miami commercial real estate loan at favorable terms requires some careful work on your part. If you've consulted a good mortgage loan calculator, and figured out what you can swing, there's still the whole application process to take on, first. Applying for small business loans should be done with a careful and well-researched approach. Miami commercial real estate demands high numbers at times and is often noted as another type of situation in the market.

Applying for Miami commercial real estate loans, well it is always figured out that its own market can be treated as a good investment prime at times, so there are several factors in which we should be able to know when we try to apply for a Miami commercial real estate loan. When you want to apply for a Miami real estate loan, you have two choices. You can go to the office of a lender and fill out a questionnaire about your finances. Or, you can visit an Internet-based broker and fill out an online form, which will gain you results far more quickly. The more things you try to embark the market with some strategies that you think would help you a lot, the more times, you’ll have a chance on having a good market value. Be aware that in Miami commercial real estate the value of it can also be measured with the knowledge of the term.

Sometimes there are these pointers that we should consider especially in the market which shows nice potential in Miami real estate. You should always know how to cooperate when asking a loan and one of its terms is filling out these application forms doesn't have to be a trial. You should, of course, strive to convey your financial information as accurately as possible. However, an online form is relatively simple to complete. You have to b honest and accurate on the things that you will pit in these forms because often times than nothing you’ll be able to at least be updated on those kinds of things. Let us be sure that thinking forward the things that you will put in the forms will reflect to you as well.

You should know that when you apply for Miami commercial real estate loans, expect to be asked the following questions. They will want to know all of the details regarding your business finances. You will be asked about your current mortgage payments, including your balance, terms, and so on. You should also be prepared to answer questions about the purpose of your new loan, the amount, etc. The given value for the market can be either good or bad, so you have to at least know the newest update to it. Because if you are aiming to get value on you Miami commercial real estate loan you should always know better.

Net Operating Income And Real Estate Analysis

Net operating income (NOI) represents a rental property's potential income after all vacancy and operating expenses have been subtracted. As a result, because net operating income represents the investment property's productivity, or measure of cash flow, it's one of the most important calculations made in real estate investing.

To help plant the idea, consider net operating income in one of the following two ways, depending on whether or not a mortgage exists.

The investor pays all cash for the property. In this case, since the investment property has no debt, NOI virtually becomes the rate of return expected from a property for any given annual period before taxes and depreciation are considered. In other words, given no deduction for debt service (loan payment), you can regard net operating income as the annual cash flow (cash flow before taxes, or CFBT).

The investor finances the property. Here, since the property has a mortgage, NOI should be regarded as the anticipated amount of cash flow available to pay the mortgage. In this case, subsequently only the remainder of NOI (after subtracting for annual loan payment) becomes the annual cash flow before taxes.

How to Calculate Gross Scheduled Income Less Vacancy and Credit Loss = Gross Operating Income Less Operating Expenses* = Net Operating Income

Example: Assume that you want to do an analysis on an income property that generates a GOI of $100,000 with Operating Expenses of $42,000. What is the NOI?

$100,000 Less $42,000 = $58,000

*Mortgage payments, depreciation, and capital expenditures are not considered operating expenses and therefore have no impact on net operating income.

It's Role in Real Estate Investing

Net operating income plays a large role in a variety of real estate investment and holding period decisions. For instance, capitalization rate (cap rate) is calculated by dividing NOI by sale price. Likewise, property value (or the property's sale price) is calculated by dividing NOI by the cap rate.

Example: Let's continue to assume a net operating income of $58,000 (as in our example above) and a sale price of $580,000. What is the property's capitalization rate?

Net Operating Income Divided by Sale Price = Cap Rate

$58,000 Divided by $580,000 = 10.0%

Okay, now let's assume an NOI of $58,000 of and a cap rate of 8.0%. What is the property value?

Net Operating Income Divided by Cap Rate = Property Value

$58,000 Divided by 10.0% = $580,000

Net operating income also plays a large role with lenders. For example, Debt Coverage Ratio (DCR) is calculated by dividing the net operating income by loan payment.

Net Operating Income Divided by Annual Loan Payment = Debt Coverage Ratio

$58,000 Divided by $46,000 = 1.26

How Credible Is It?

Conceptually, NOI is important because of its use in numerous calculations surrounding property performance. Because it's used to estimate property value and cap rate, as well as useful to lenders, NOI has become an essential component of real estate investment analysis. As a real estate investor, therefore, you should understand net operating income, and recognize what it means to your potential investment valuation.

But be careful.

Remember, NOI is not unlike other calculations typically used for real estate investing purposes. The result is only as good as the numbers are credible, and numbers can be manipulated. Sellers have sometimes been known to become very creative in order to make the relationship between the price and NOI to come out right.

So here's a tip. When a property appears to have a favorable NOI and in turn positive rates of return, don't simply accept the numbers. Spend the time to validate the numbers. Reconstruct the owner's representations for income and operating expenses if necessary, and compute your own NOI. Whatever you do, rely on nothing less then the most credible net operating income possible. You can't afford not to.

What Happens to the Mortgage Debt During the Foreclosure Process

Does foreclosure create a debt when the bank files the lawsuit? What happens if there is a judgment -- do the homeowners owe both the mortgage and the judgment now? These are some of the questions that homeowners have when facing the loss of their homes. Due to the complex nature of credit and finance, it is quite easy to get confused about how mortgages work and what happens during foreclosure.

However, foreclosure is not a debt; it is a legal process taken by a mortgage lender when a debt secured by a property goes into default. The foreclosure itself is the method by which a mortgage company will attempt to use the local court system to take a house back from homeowners who have failed to pay their mortgage as determined by the terms of the original contract. It is not a debt in itself, but it is the legal mechanism by which a bank can collect a debt secured by real estate.

The debt the property owners owe to the bank is the mortgage balance that is currently due on the property. Homeowners take out a loan for a certain principal amount and agree to pay a set interest rate on the money borrowed, plus any other fees or charges that are listed in the loan documents. These extra charges typically have trigger effects, such as paying after the due date will trigger a late payment, or defaulting on the loan will trigger legal fees and court costs that will be added to the balance of the loan.

Taken together, the principal, unpaid interest, and other charges constitute the debt owed to the mortgage company to pay off the loan in full. The bank, when they sue for the foreclosure, are stating that the homeowners need to pay this amount in order to keep the house, or else the house will be auctioned by the government to satisfy this debt. Of course, the court has to agree to this amount -- banks can not just add fees arbitrarily or unreasonably -- but few homeowners defend against the foreclosure lawsuit, which allows banks to get away with adding any fees they wish without justification.

Thus, when a bank pursues a foreclosure on a house, the legal process does not create a debt owed by the homeowners to the lender; this debt already exists as the mortgage on the property. Suing for foreclosure only indicates that the bank is attempting to prove in court that they are unable to collect their payments which the borrowers agreed to make when they took out the loan. Because of this default and the fact that the property was pledged as collateral for the loan, the bank is requesting that the court order the property to be sold to satisfy the debt that already exists as the mortgage.

The judgment that the bank is typically granted against the homeowners is simply the judge's decision that recognizes that the lender is owed a certain amount of money and that the owners have not paid it. Even this does not create a second debt that must be paid back; it is simply a local judge agreeing with the bank and ordering that the house will be auctioned at a sheriff sale to pay off the defaulted loan. The judgment amount is always based on the total payoff amount that the homeowners would need to come up with in order to own their home free and clear.

Homeowners in foreclosure always owe only one debt per mortgage that they have on the house. The foreclosure process can not even begin without a lender or creditor showing that they are owed a specific amount of money on a debt they own, that the owners have not paid this nor made arrangements to pay, and that the property is fair game to auction to satisfy the debt. If a creditor can not prove these facts, as well as the other elements of a foreclosure case, then the homeowners can only lose by not showing up at the court date or by having corrupt government officials overseeing it.

Good Debt, Bad Debt For Real Estate Investors

The most successful real estate investors understand the difference between good debt and bad debt.

From a consumer perspective, no debt is good debt. The basic consumer goal is to be debt free.

This is not the way that the most creative real estate investors think about debt. They regard debt as an investor's best friend.

The reason for this is OPM. OPM is a short-hand way to refer to "Other People's Money." OPM is just another term for good debt.

In addition to OPM, another way that investors talk about using borrowed money is the word, "leverage." Consider using a crowbar to move a heavy object. The crowbar allows you to move the heavy object. Good debt is an example of leverage.

With a lever, you can move something you could not move without it. The lever means that you don't need as much strength to move the object as you would need without the lever.

This concept from physics is relevant to borrowed money. You can use someone else's money as a lever to accomplish a bigger task than you could accomplish with your own money.

Consider a situation when you don't have enough of your own money to buy an investment property. When you treat borrowed money as a lever, you can use the borrowed money to buy the property you could not afford with your own money. This is the power of leverage.

This is an example of good debt. You use borrowed money to create wealth. Debt is a tool you can use to buy what you could not buy with your own money. If the investment creates profit, you create profit from the leverage of good debt.

This is not what happens when you take on consumer debt. If you buy an item, such as a plasma TV for $3000, you have taken on bad debt. The TV costs you money. It does not become a means to create profit. This is the difference between good debt and bad debt.

Consumer debt does not give you leverage. It is not a tool you can use to create wealth. This is why consumer debt is bad debt.

The critical distinction between good debt and bad debt is whether or not the debt is a tool to create more money. If you borrow the $3000 and use it as a tool to create profit, this is the definition of good debt.

If you want an example of using debt to create wealth, consider Donald Trump. He carries tremendous debt, which he leverages to build properties that in turn create even more wealth. Some of the richest people on the planet have the greatest amount of debt.

This means that good debt is one of the fastest routes to creating wealth. You can call it leverage or OPM if you want, but these terms mean the same thing. You are using borrowed money to make money.

Thinking Forward Regarding Your Commercial Real Estate Loan

Regardless of what we often have in our business it is always wise to search for what you think will be a big help in your investment. So with that being said let us try to focus on real estate investing. Well there are many types of real estate investing and one of them is Commercial real estate. Well, from that alone we can figure out what types of investment we vaguely want to happen. First there are these known things to consider in its market alone, it is not just a simple thing to know but rather a different one. Securing Miami commercial real estate loan at favorable terms requires some careful work on your part. If you've consulted a good mortgage loan calculator, and figured out what you can swing, there's still the whole application process to take on, first. Applying for small business loans should be done with a careful and well-researched approach. Miami commercial real estate demands high numbers at times and is often noted as another type of situation in the market.

Applying for Miami commercial real estate loans, well it is always figured out that its own market can be treated as a good investment prime at times, so there are several factors in which we should be able to know when we try to apply for a Miami commercial real estate loan. When you want to apply for a Miami real estate loan, you have two choices. You can go to the office of a lender and fill out a questionnaire about your finances. Or, you can visit an Internet-based broker and fill out an online form, which will gain you results far more quickly. The more things you try to embark the market with some strategies that you think would help you a lot, the more times, you'll have a chance on having a good market value. Be aware that in Miami commercial real estate the value of it can also be measured with the knowledge of the term.

Sometimes there are these pointers that we should consider especially in the market which shows nice potential in Miami real estate. You should always know how to cooperate when asking a loan and one of its terms is filling out these application forms doesn't have to be a trial. You should, of course, strive to convey your financial information as accurately as possible. However, an online form is relatively simple to complete. You have to b honest and accurate on the things that you will pit in these forms because often times than nothing you'll be able to at least be updated on those kinds of things. Let us be sure that thinking forward the things that you will put in the forms will reflect to you as well.

You should know that when you apply for Miami commercial real estate loans, expect to be asked the following questions. They will want to know all of the details regarding your business finances. You will be asked about your current mortgage payments, including your balance, terms, and so on. You should also be prepared to answer questions about the purpose of your new loan, the amount, etc. The given value for the market can be either good or bad, so you have to at least know the newest update to it. Because if you are aiming to get value on you Miami commercial real estate loan you should always know better.

Real Estate Loans - Even With Bad Credit

If you are looking to get started in real estate or business, it's quite possible that you will need a loan to get started. If you have bad credit, you might consider giving up before you've even gotten started. Well, I have good news for you. There are some things you can do to get that first loan while you work on improving your own credit rating for future projects.

One of the things you can do is to get a partner with good credit to join you in your real estate or business venture. This is called an "equity kicker" and is very popular in business. By doing this you use your partner's credit as your own for the project you're involved in. What does your partner get in return? In return for supplying the needed credit, you will give your partner a portion of ownership of the business. Depending on the size of your project and how strongly you need your partner's credit rating to get the needed loan, a reasonable percentage to offer will be in the range of 3% to 5%.

Understand that in most deals, you will be the working partner and your "good credit" partner will be the silent partner. He or she will supply the needed credit and nothing more to the deal. As an added incentive you can also offer your partner a small portion of the profit from the real estate or business project. Again, the amount should be in the range of 3% or 5%, depending on the profitability of your project.

While this is a great way to get started, it's important that you work on improving your own credit rating for future projects. Your goal should be to eventually be able to acquire real estate or business loans on your own without having to use a partner's credit.

The way you build your own credit rating is by paying your bills on time, getting a "secured" credit card and using it actively while paying it off fully each month of the year. By owning an asset such as a building or business, you immediately improve your FICO credit score. By paying off your credit cards each month, your score rises. All of these things will work together to get you a higher future credit rating.

For your real estate or business venture, form a company that will put you on the payroll. This will give you a source of income, a W-2 and an employment history. These things will raise your credit rating because you will have a traceable history. This is something that lenders love to cite when approving the loan that you've applied for at their company.

What other things can you do to improve your credit rating? Try joining respected real estate or business organizations. Not only will being a member contribute to your credibility, making you more credit worthy, but it will provide you with more knowledge about your business and help you to make important contacts within the industry. Remember, any dues you pay are provable and tax deductible.

So, don't give up your dreams of getting started in real estate or business just because you currently don't have the best credit. Try using a partner's credit to get started and then follow the steps above to improve your credit rating. Eventually you will be able to get business or real estate loans using your own good credit.

7 Steps To Choosing The Best Real Estate Loan For You

A home loan will be your financial responsibility for years to come, so it can be one of the most important decisions you make. Even tiny changes in an interest rate – changes as small as half a percent – can cost or save you thousands of dollars over the term of your loan. To enjoy an affordable home, follow these seven simple steps:

1) You’d Better Shop Around!
Any market has thousands of mortgage brokers, and each broker has access to hundreds of home loan programs. Whatever your circumstances, there is a home loan out there to suit you. The more mortgage brokers and financing professionals you speak to, the more likely it is that you will encounter someone who really knows the home loan program right for you.

2) Pick out the TERMS of your loan -- BEFORE comparing rates.
Home loan terms range from 30, 40 to 50 years and some are interest only, meaning that you will only make interest payments each month and will never pay off your mortgage. Another factor to consider when debating terms is rate. Some loans have guaranteed fixed rates for the entire term of your mortgage. Other loans are Adjustable Rate Mortgages (ARMs), meaning that your interest rate will adjust after a guaranteed rate period is over. When considering terms, also think about what pre-payment penalty you are willing to accept. This penalty applies if you decide to refinance your home loan or sell the house within a certain period of time -- usually one to two years or longer.

3) Shop the rate and closing costs -- carefully
Have a mortgage broker pull a tri-merge credit report and then get a copy of the report. Take the report and a copy of your tax returns with you when visiting financing professionals. Be prepared to answer all questions honestly and be prepared to tell the mortgage broker the price range and the home loan terms you will need. Ask for two Good Faith Estimates (GFE) – one with minimal closing costs and one with standard closing costs.

4) Compare Total Monthly Payments.
Your GFEs will estimate TOTAL monthly payments on a home loan. These estimates only guess what your taxes, hazard insurance, homeowner’s association dues and other costs will be. Since mortgage brokers have no control over these costs, some will underestimate them to make their GFEs attractive. For this reason, always compare only the line item costs associated with each loan. Line items costs include principal, interest, and mortgage insurance.

5) Compare Closing Costs.
Closing costs can contribute significantly to the cost of buying a home. Some mortgage brokers will underestimate these costs to make an estimate seem competitive. Worse, closing costs and associated fees have confusing labels, making them harder to compare. In general, compare the “Items Payable in Connection With Loan” or the “Items Payable in Connection With Loan” on your GFE – these are the costs that your broker may have control over.

6) Compare Closing Costs AND Rate.
Does it make sense to choose the home loan with lower interest but higher closing fees? Or would a home loan with much smaller closing costs but higher rates cost you less? To decide, tally up how long it would take to “make up” the difference. For example, if one home loan saves you $100 a month through lower payments but costs $1000 more in closing costs, it would take 10 months to “make up” for the closing costs.

7) Lock Your Rate!
Just because you are quoted a great rate, that does not mean that interest will stay in place until you are ready to buy, so lock in your rate 30-45 days before closing.

Deciding to buy a home is exciting, but choosing a mortgage can be nerve-wracking. To make a smart choice that really will support you financially, be sure to compare smart by following these tips. Then, you can enjoy your new home – with the right financing.

Wealthy Real Estate Investors Use A Process Known As “flipping Properties” To Quickly Make A Real Killing In The Real Estate Market.

Wealthy real estate investors use a process known as “flipping properties” to quickly make a real killing in the real estate market. The process is simple. Flipping properties simply means buying a piece of real estate under contract and then reselling it at a markup within days or months of the initial purchase. In most cases, investors resell these properties to investors rather than homebuyers.

This type of investing offers many benefits for the smart investor:

* It allows for big savings. Since the property passes through hands quickly, the savvy investor will spend less money on managing the property.

* It allows for big profits. Flipping properties is very lucrative because it allows the investor to instantly mark up a property price and enjoy thousands or even tens of thousands of dollars in profits on a single deal. Investors in the know even maximize their profits by purchasing homes that are priced below market value and then reselling for full market value. As you can imagine, the profit potential here is virtually unlimited, since you can buy cut-price properties at tax sales and directly from cash-strapped homeowners and resell at a huge profit.

* It leads to fast cash. Many would-be investors are wary of the real estate market, because they assume that selling, buying, and managing properties takes months and years. Flipping properties allows you to see cash up front – in just a few days on desirable real estate.

* It helps others. Most investors are interested in the bottom line, but flipping properties is actually a very good way to help out others. Investors who are successful at this help other investors by uncovering the valuable properties that can make others money. That’s why the markup makes sense – by flipping properties, you are providing a great finding service for others. In some cases, investors are also able to help out homeowners in financial distress, by helping them to get cash for their homes.

Smart investors are already making incredible profits by making use of this simple investment secret. However, the uninitiated do need to be wary. Profits are not assured. To be a successful investor, you need to be able to spot deals and uncover the homes that will actually sell fast. Telling the real estate gems from the duds is not an easy process, and one that requires a good eye and some skill-building. Luckily, investors can now get expert help at www.FreeRealEstateMentoring.com, which offers free information tha investors can implement instantly for explosive profits.

Helping Your Huge Investment: Real Estate Secured Loan

Buying a real estate has been a business of big investment. Resident of UK finds it to be a better investment option. But, most people do not have such a large amount available to buy a real estate. Real estate secured loans is one of the best options available in …UK to help borrowers getting loan to buy real estate.

As the name suggests, real estate secured loans are secured by nature. And that is why lender doesn’t hesitate in giving this loan to borrowers. The positive point here is that even though it is a secured loan, borrowers don’t need any additional collateral to put against their loan amount. It is because the purchased real estate itself serves as the collateral for their secured property loan.

A borrower needs to prove his credibility before taking real estate secured loan, as there is very large amount involved. Few things, such as, credit history, repayment capacity, size of property and potentiality of borrower’s income are decisive in availing real estate secured loan. If borrower fulfills such conditions positively, he gets the loan easily and at favorable rates. Unless, he might get some problems or will have to pay higher interest rates.

In real estate secured loan, repayment period is longer. Borrower is free to repay the loan in period between 30 to 40 years, which means that monthly installment would be smaller. The amount which can be borrowed through real estate secured loan is usually very large. Normally, amounts ranging from ₤500000 to multi-millions can be availed easily.

Finding a worthy real estate secured loan lender is really tough task. Borrower’s little unawareness about lenders can put him to pay higher interest rate for a very long period. Through applying online, borrower can access various information related to lenders and their interest rate. Several websites provides borrower free quotes, and even application fee to apply for this loan can be saved. Comparing several loan quotes online can help you in finding a better lender to avail real estate secured loan. It also saves borrower from various complicated paper and documentation works.

While lending real estate secured loan, lenders often require borrower to put certain percentage of borrower’s money as real estate down payment. This percentage is generally 10-20% of the total value and can vary from lender to lender. Borrowers are required to consult their loan officer before getting into any such deal. Considering few important point carefully not only saves borrower from paying higher interest rate, but also gives them a better deal to fulfill their need to buy real estate while being at ease.

Real Estate Secrets: The Inside Scoop On Homeowner's Insurance

One of the most important concerns when purchasing real estate is the availability and cost of good homeowners insurance. While new homeowners don't like to think disaster could ever strike their home, there is always a chance that something bad could happen. There are many things that could go wrong with your newly acquired home, such as a malfunction due to structural defects, a fire or an accident that could wipe our everything you ever owned in a blink of the eye. The best way to protect yourself against such situations is through a homeowners insurance policy.

What Is Homeowners Insurance?
Homeowners insurance is coverage designed to protect you from mishaps that happens with your home, including the building and its content. Typically, homeowners insurance covers problems that arise from things like burglaries, fires, natural disasters, and more. Most policies also cover the homeowner for legal charges that might arise from individual injuring themselves on the property.

The Features of Good Homeowners Insurance
All homeowners policies are not created the same. Make sure that the homeowners policy that you select provides adequate coverage before you make a final decision.

Full Coverage
Ensure that you have complete coverage when you take the homeowners insurance. You should be insured for the things you own (everything that is inside your home) and outside (structural part of the real estate property). In this way, no matter what happens, you are always covered. It is in your best interest in most cases to select a policy that offers replacement value coverage, rather than depreciated value.

Additional Living Expenses
In case your real estate property is destroyed by any type of accident, you will need to pay for some kind of accommodations until you find another place to live. You would have to stay at a hotel or guest house where the living expense would double or triple. Ensure that your homeowners insurance covers such expenses as well.

Third Party Liability
There are often possibilities of someone suing you for a reason such as that they fell on your premises and injured themselves. When this happens, you might find yourself legally responsible for paying medical expenses plus compensation. A third party liability policy would have you covered for such eventuality.

Price and Benefits
When you plan to take out homeowners insurance, shop around! Get as many quotations as possible and find out what extra benefits they offer for each quote. Research extensively to get the best quotes from different leading insurance brands. Remember, knowledge is power. This information will help you bargain for the best terms when you take out the homeowners insurance.

Do not rush when you are shopping for homeowners insurance. By shopping around and doing proper diligence, you will be assured of the best coverage at the lowest possible price. Keep in mind that if you find a deal that sounds too good to be true, it probably is. Work only with reputable insurance providers that you can count on to be there for you when you need them. Take your time, gather sufficient information and only when you are fully satisfied, close the deal.

Flood Insurance For Your Home Or Real Estate Investment

Given the recent hurricane and flooding disasters in the country, homeowners, real estate lenders, and insurers are giving flood insurance a lot of attention. There are some basic questions you should ask, and facts you should know about flood insurance, before making any real estate purchase. A great resource for any related questions is the government sponsored flood insurance website at http://www.floodsmart.gov .

First off- if you have a federally backed mortgage, you are required to have flood insurance in high-risk areas. Also, lenders may require flood insurance on real estate properties in high-risk areas. If it’s not required, but the responsible thing to do in your area, here are the basics.

What Do You Get From Real Estate Flood Insurance?

Basic homeowner’s insurance won’t cover flood damage for real estate structural loss, furnaces, water heaters, air conditioning units, carpeting and flooring. Flood insurance does that. You can purchase additional flood insurance for furniture and personal items. The coverage is fairly inexpensive- visit the government website for an estimate based on your real estate holdings.

Don’t think you’re at risk? The NFIP (National Flood Insurance Program) reported that a third of the payments it made last year were to real estate properties in “low-risk” communities. In the course of a 30-year mortgage, your home has a 26% chance of being damaged by a flood (according to NFIP statistics). Your fire risk is only 9%. Having NFIP approved flood insurance guarantees your claim is backed by the government. Knowing that, what questions should you ask before making a real estate purchase?

Questions to Ask Before Buying Real Estate

In addition to the government sponsored website, your real estate agent and your insurance agent should be able to answer some basic questions regarding your chosen property.

• What is the property’s flood risk?
• Does the area participate in the NFIP?
• Is flood insurance required on this property by the lender?
• Is the property near a dam, or levee?
• Does the current real estate owner have flood insurance?

You may also want to ask your insurance agent about a Community Rating System (CRS) discount on your real estate property. Find out exactly what the policy covers, and what additional coverage is available. Finally, ask about premiums for higher deductibles, and associated fees and expenses.

Congressional Issues Affecting Flood Insurance

In June the National Association of Realtors (NAR) testified before the House Subcommittee on Housing and Community Opportunity to support H.R 1682, the Flood Insurance Reform and Modernization Act of 2007. Vince Malta, vice-chair of the NAR’s Public Policy Coordinating Committee said, “To maintain the vitality of residential and commercial real estate, certain safeguards must be made available such as the federally backed flood insurance through the NFIP.”

Reforms to the NFIP are expected to be ongoing as the real estate community, insurers, and government agents come to a consensus on the best ways to protect real estate investors and homeowners.

Using Hard Money to Purchase Detroit Real Estate

Although the credit marks have tightened their belts in lending, savvy investors still have options when it comes to profiting from Detroit real estate. Indeed, there are many investment opportunities of deep value, providing an investor with ample room to create rental properties, flipped homes, or long-term equity holds.

Low cost of foreclosures create ample profits

In today’s market, homeowners facing foreclosure are double in numbers in comparison to a year ago, according to industry data analyzer Realty Trac. Indeed, many economic and historical factors play into the national decline of housing pricing, conspiring against value like a perfect storm.

Consumers were buying into their piece of the American Dream in record numbers, thanks to easy mortgage money from lenders with liberal guidelines. One hundred percent financing, with seller concessions encouraged, meant that nearly anyone could get their name on a deed without any "skin in the game."

Detroit Real Estate has not been spared its share of the pain. In 2007, Michigan was ranked in third place among the states for failing mortgages and impending foreclosure. Almost two percent of Detroit Michigan properties were vulnerable to foreclosure due to mortgage default.

Taking advantage of hard money for investment properties

In Detroit Michigan real estate markets, hard money can be a useful tool in the purchase of Detroit foreclosures, intended flips or rehabs. Traditionally, this would require significant down payment from the investor because of the low loan to value given. However, for an opportunity to buy valuable properties at a distressed price, hard money may be useful.

With hard money, investors have the power of leverage, which multiplies the return on your Detroit investment properties. You only need to invest a small percentage of the house’s value, such as 10%, yet you earn your returns on the entire value of the home.

For example, you want to purchase a $100,000 Detroit investment property, and you have the option of putting 10% or 20% down on the home. If the value of the home grows to $110,000, then only placing $10,000 down on the home will give you a 100% return on equity. Had you placed 20% down on the home, your ROE would only have been 50%. As long as the profit you reap is larger than your interest costs, then in the long-term, using leverage is always more advantageous.

The supply of Detroit real estate, available at less than half of its appraised value just a few years ago, creates the ideal opportunity to accumulate Detroit investment property or flip a fast rehab.

While declining markets can be tricky, a knowledgeable contractor or handyman can renovate a Detroit rehab into a suburban residential viable rental property or flip sale. For would-be buyers of Detroit Michigan real estate, hard money loans may be the fastest kind of loan transaction to closing, since there is usually no verification of income, employment and credit.

Types of Hard Money Loans

There are several different types of hard money loans available for Detroit foreclosures and Detroit investment properties:

Acquisition Loan

This type of hard money loan is used to specifically buy Detroit real estate. It is ideal for short term holdings, such as a flip, as interest is generally in the teens, typically 11% to 18%. Ideally, the loan would be paid off within a few years from a lower cost source of funds.

Mezzanine Loan

A mezzanine loan is subordinate (in second lien position) to another bank or lender who holds first lien position. It is repaid at the same time that the primary lender is paid off. Sometimes equity is given to the lender, in addition to loan repayment. Debt and equity are blended in the terms of this type of loan.

Development Loan

This hard money loan is used for acquisition plus improvement of a property. The total loan amount is based on the fully improved value, and interest-only payments are made to the lender.

Bridge Loan

A hard money bridge loan is an immediate solution for a resolute buyer who must act quickly. For Detroit MI real estate, a plethora of buy opportunities would present the need for such a loan. These might include acquisitions of commercial buildings, including apartment houses, and commercial businesses and properties. Bridge loans are short term by nature, and are usually paid within two years.

Other forms of hard money can be used wherever equity secures the loan, including construction of new improvements on raw land.

In today’s market, it is important that savvy investors of Detroit investment properties sand Detroit real estate act decisively. To hesitate on a great acquisition opportunity is to lose the deal and likely future capital growth. Therefore, hard money can be the right leverage for Detroit Michigan real estate investors, even those who may have flawed credit.

No money down apartment buildings.

A lot of new investors have tried to first invest in other types of commercial properties such as office buildings or shopping centers; only to realize that the transition is just too drastic and it ends up costing them the property, all their money leaving them deep in debt, destroying their credit and it takes years for them to recover.

Apartment buildings are tremendously easier to purchase, maintain & put on auto-pilot simply because most of us already understand how to rent an apartment and tenants are almost always readily available.

The buying process for other commercial properties (like shopping centers or office buildings) is not much different however the financing is much more difficult to obtain and leasing usually requires a team of very experienced individuals to negotiate contracts with business tenants.

If you're a new investor with little or no cash to invest, you MUST first start out with apartment buildings. Once you own at least 2 properties with at least 50 units in each property (which should be more then enough to pay you over $10,000 a month in net passive income cash flow) you can then branch out to other areas of commercial real estate.

After you own a few apartment buildings and have those properties generating you enough monthly cash flow; THEN you can absorb any vacancies that might come from not being able to rent out space in your office building, warehouse or shopping center.

Apartments are where just about all successful commercial real estate investors started out, so why try and fight the odds. Apartments are the fastest, easiest and safest way to create monthly income and massive profits.

While it is technically possible to have your first deal be a warehouse, shopping center or office building... the statistics show that it almost never happens.

Most investors who first try to jump to other commercial properties before they own a couple of apartment buildings, inevitably fail and quit this business never to return...

That's why I teach boot camps training seminars on how to buy apartment buildings with no money at all and create a steady stream of monthly Passive Income each and every month for the Rest of your Life!

The Future – or not – of the Real Estate Industry

A slow housing market is not the only concern for modern Realtors; in fact, it doesn't’t hold a candle to the larger, longer term threat looming. Some call it Web 2.0, and it will surely be the downfall of Realtors who don’t learn to leverage it to their advantage.

The nature of the Real Estate industry is about to change and it’s anyone’s guess who will come out on top.

There are many examples of the effect of the Internet’s change in information distribution in other industries. A few biggies? The major newspapers thought nothing of Craig's List until it was too late; after realizing they were losing millions in advertising revenues they tried to jump on the bandwagon but were too far behind to ever have hope of catching up. The music and movie industry stood idly by while the likes of Napster devastated their profits.

Will the Real Estate industry fall prey next? Any information based industry is in jeopardy. The signs say the Real Estate industry is likely to be the next victim.

There is a general principle changing here, and grasping its meaning makes the future evident. Pre Web 2.0, the thought was that holding onto information tightly was valuable; possessing proprietary information put a business in a position of power. (In Real Estate, of course, this was the MLS.) Realtors had the information and buyers had to come to them to find the right house. Anyone in the industry knows that typical practice was to give out as little information as possible to draw in the buyer.

In today’s world that tactic spells disaster; as information becomes more and more readily available, buyers won't stand for the old tactics. They will simply go to whoever will give out the information. In light of this, all signs point to this one simple fact: whoever packages the information in the best way will be the victor.

Technologies are nearing a point where a buyer can simply shop on line for a house. A myriad of Web 2.0 websites are working hard at becoming efficient packagers of information. Zillow became one of the first to give buyers and sellers quick estimates of Real Estate value, as well as leveraging Google maps to enable potential buyers to see the lay of the land, so to speak. While the accuracy wasn't always right on, the concept most definitely was. Real Estate ABC quickly followed, taking the same concept and enhancing it; while Fisbos uses Craig’s List and it is quickly becoming a strong Real Estate listing site. Trulia is one to watch in the near future; they are attempting to scrape the internet for Real Estate listing information and put it all together in one convenient package. Their technology is growing by leaps and bounds and if it comes together as well as it might, they will become an even bigger player than they currently are. Others like Housing Maps are scraping the Craig’s List data and creating mashups to package the information into a convenient, easy to understand format for consumers.

Possibly of a bigger threat: the latest rumors that Google is working on a Real Estate related project. It’s anyone’s guess what might come from the minds of Google!

There are many possibilities for how this will turn out. Who will wind up on top? A behemoth company with the resources to gather the information through deals with information providers, possibly? That sort of play would take a great deal of negotiating to bring it all together. Maybe a smaller company with a little more people savvy will perfect a system of gathering information from participating Realtors and consumers; similar to the concept of a Craig's List. One thing is for sure: no matter how it happens, when it happens the old school Realtors will quickly become a thing of the past. Buyers are going to skip the middle man and deal with the information providers directly. What a Realtor provides in services will have to far exceed the value of the commission paid, or someone else will step in and do the job.

Amidst all of this there is a large amount of possibility. For those industry professionals who can understand the new concept in information sharing, who truly understand that information held tight is no longer valuable, success will be easy to attain. Today, information that is widespread is valuable. Real Estate professionals who become information providers, able to leverage Web 2.0 technologies to spread that information, will succeed.

The Web 2.0 world allows experts in a niche market to flaunt that expertise to their credit, building huge followings utilizing web technologies. Some of these niche marketers already have readerships which surpass that of major national periodicals. Realtors are definitely niche marketers, experts in a geographical area and a Real Estate specialty. There are as many niche Real Estate markets as there are geographical areas.

If a Realtor develops expertise using Web 2.0 technology, she will develop a loyal following. And we all know that in the Real Estate market, loyalty = money. And the best part of all is that these technologies are very simple to use: blogs are easy to set up and run; RSS feeds are one of the most powerful features of the world of Web 2.0, and they can be totally automated. Real Estate pros can form relationships with buyers and sellers in large numbers, all on their own website. Networking can be done fairly effortlessly and super efficiently from a computer if you have the right tools. A perfect example is myspace. Or facebook. Or LinkedIn. The possibilities are endless if a Realtor knows how to navigate the landscape.

It’s time for Real Estate professionals to take a deep breath and plunge into the world of Web 2.0. Brochure websites do nothing to entice a buyer or seller to use one’s services; it’s time to get involved with the Web 2.0 world or get left behind by it!

How a Proforma Evaluates Investment Real Estate Future Performance

A proforma is a useful way for real estate investors to evaluate an investment property's future cash flow performance. Unlike an APOD, which merely gives a snap shot of the property's first year cash flow, proforma income statements look at revenue and expense projections typically up to ten years, enabling the investor to evaluate the investment real estate's cash flow, tax benefit (or loss), sales proceeds, and other financial projections.

Pro forma income statements are generated by looking at the financial performance of the rental property the year before and then using a variable to make projections into the future.

For example, if last year's income was $30,000, the operating expenses $12,000, and the net operating income was $18,000 ($30,000 - 12,000), and you would like to determine next year's net operating income in the event revenue increases 5% and operating expenses increases 4%, you would compute as follows:

Revenue (next year) less Expenses (next year) = Net Operating Income (next year)

Revenue (next year) = $30,000 + (30,000 x .05) = $31,500

Expense (next year) = $12,000 + (12,000 x .04) = $12,480

Net Operating Income (next year) = $31,500 - 12,480 = $19,020

In other words, now you know what net operating income (NOI) you can expect the property to generate in the event that next year, the property's rental income increases (inflates) 5% and its operating expenses increases (inflates) 4%.

This is the essentially the pattern for each year in the proforma, starting with the end of year one and extending out through the end of year ten (i.e., EOY1, EOY2, EOY3, and so on up through EOY10). This year's data is inflated by some variable to compute next year's data.

Moreover, its exactly the same way the computations are made each year for the other returns such as cash flow before tax (CFBT), cash flow after tax (CFAT), sale proceeds after tax (generally requires an inflation rate for property value), cap rate, return on equity, and other returns provided by your specific proforma. Rates of return are recalculated annually according to the changes made to the property's income, operating expenses, and resale value.

How do I create a proforma income statement?

1. Software You can invest in a real estate investment software that will automatically create a proforma income state for you. Bear in mind, however, that software solutions tend to vary and whereas one might include computations for tax shelter, another might not.

2. Manually You can use an Excel spreadsheet to create a Proforma Income Statement. In this case, it helps to have some knowledge of Excel, and you should allow yourself several hours to create a good proforma.

Whatever method you choose, though, real estate investment software or a spreadsheet, here are a few important considerations to keep in mind about your statement.

1. Understand what you want to accomplish with the proforma. You want to analyze the cash flow and other performance measures resulting from changes to such variables as income, operating expenses, and property value over future years.

2. The pro forma is just an estimate (a guess). Do not rely solely upon a proforma income statement to make your investment decision.

3. Though a proforma can be constructed to reflect any number of future years, it is speculative, therefore you might not want to project out further then ten years (I normally don't).

4. Be sure to use realistic numbers. Start with the current income and expenses and inflate them annually by a reasonable amount. Don't inflate income 10%, for instance, when 2-3% has been normal for your market over the past several years.

As stated earlier, a proforma is a good way for a real estate investor or analysts to evaluate the future financial performance of investment real estate. Whats more, because it does look into the property's future performance, a pro forma makes a good report to present lenders.

5 Tips on How to Buy Investment Property

5 tips on how to buy investment property and make a profit.

Let's get stuck straight into these tips.

1. Do your research. If you are buying a property in the hope of becoming a landlord then make sure you have checked the areas rental potential and make sure the types of properties that you are planning on buying are the ones in demand by tenants. If you are planning on flipping the property, make sure you buy a property that is wanted by homebuyers.

2. Treat what people say with a healthy scepticism and don't blindly trust anyone. This includes so called experts. Talk to a few different property professionals to try and get a balanced view on things such as:

- What type of property to invest in

- What location

- What type of tenant to aim for

Sometimes it is only after canvassing lots of different opinions that you can really formulate you own strategy with confidence and with solid reasons why you plan to do what you plan to do.

3. Get for comparables for everything. Rental comparables, sales comparables - everything you can. Make sure your comparables are as much like for like as possible. For example: if you want to rent out a two bedroom flat next to a railway station, then try to get the rental comparison of other two bedroom flats next to the same railway station.

If you choose to use a flat that has two bedrooms and is located 1/2 a mile away from the station, they the you stand a chance of your comparisons being way off. ½ a mile in a town can be a long distant if it takes you from a desirable part of town to a non-desirable part that nobody wants to live in.

4. Get your finances in place. This might be a good thing to consider even before you go down the route of seriously looking for properties to buy. If your finances are sorted out before you start looking at how to buy investment property, then you will be more likely to be looking with confidence and purpose because you know if you find that bargain property you have the finances already in place to do the deal.

But if you don't have your finances in order there might be doubts in your mind about whether you can finance a deal even if you find it, this in turn may cause you to self sabotage any deal you see even before you put an offer in.

5. Employ the right professionals, whether that means builders, solicitors, contractors, or someone else, skimping on employing qualified people to do a job correctly can cost you a lot more money than you expect. Just because someone is cheap, doesn't mean they can do a good job and just because someone seems expensive doesn't mean that they can do a better job than someone who is cheaper.

The only way to find out for sure is to check references and their qualifications to do the job. Try and speak to real people that they have worked with before. This should preferably be a face face conversation.

Hopefully by reading this article you now have a clearer understanding on how to buy investment property that will make you a long-term profit, as well as perhaps making you a quick buck now.

Tips and Suggestions on How to Sell Real Estate Online

Why is it important to pursue Real Estate Marketing Online efforts? One very important reason is that with the adoption of the Internet by many people for both work and leisure purposes, the online world has become a veritable gold mine of information about prospects.

Thus, Real Estate Marketing Online campaigns by real estate sales specialists have become vital to the survival of the real estate industry and its players. What makes the situation more crucial is that real estate sales specialists claim that the previous Real Estate Marketing Online efforts they undertook (such as putting up websites about their business) have failed to deliver the results they wished for. This leaves such real estate professionals desperate to find Real Estate Marketing Online techniques that will really work for them.

Real Estate Marketing Online will work properly if you know who your target market is – and this means having a niche that you can compete in and where you are at your best. For instance, if you feel you have a knack for selling homes to newly-hired employees, then that is your niche market and you have to organize your Real Estate Marketing Online campaign in that direction to get the results you want.

Real Estate Marketing Online efforts that are based on adequate to superlative knowledge of your niche market are best for getting results out of the prospects out of your niche market. Real Estate Marketing Online then becomes more effective and efficient because you know who will be reading the content on your website so you can select the right photos and text content to address the niche market’s needs.

There are various ways of categorizing Real Estate Marketing Online niche markets. You can define them based on the location of the homes to be sold; their income levels or income range; the types of homes that you can sell to them based on location, income levels, and their personal preferences; the demographics of your niche market (such as what schools they attended and what languages they speak); and other things that make that niche market distinctive.

One very important thing you have to remember when designing websites as part of your Real Estate Marketing Online campaign is that you have to be careful to identify what your target visitors would probably be seeking when they come to take a look around. And presentation counts a lot in a Real Estate Marketing Online campaign. In the same way that people tend to be attracted to beautiful people more than plain-looking or even ugly people, your website should aim to appeal to the aesthetics of your niche market. For instance, if they are Hispanics, then you may want to include aesthetic elements that will remind them of their Hispanic roots. You could also sell homes that have a Hispanic appeal to them, such as homes made of adobe or stucco. Earth tones go well with the skin tones of Hispanics so homes that have predominantly autumn-inspired color hues and tones might appeal to these people more than modernistic houses that are all glass and steel.

Another of the Real Estate Marketing Online tips you may have to take into account is that some website templates you can get from some sources may actually hamper the ability of your visitors to access your website. So for a proper Real Estate Marketing Online campaign to function, you have to make a website that is glitch-free yet still user-friendly enough not to confuse non-techies. Try not to incorporate too many bells and whistles (meaning, try not to make your website too high-tech to the point that people no longer know how to use it.

Your Real Estate Marketing Online campaign will also go much more smoothly if you use a website background that speaks of professionalism. Teddy bears and candy canes may look cute on a personal blogsite but that is not what you will want on your real estate website if you want people to take your site seriously.

To make a long story short, you want Real Estate Marketing Online techniques that tell people that you are a credible real estate professional who has what it takes to meet their needs. That is the whole point behind embarking on a Real Estate Marketing Online campaign anyway.