New Year’s Resolution for Renters: Buy a Home in 2006

Writen by Jeanette Joy Fisher

Are you still renting a home or apartment for yourself or your family?

If so, you’re losing money. Think about these three ways you lose money by renting:

1. You’re paying for someone else’s mortgage payment. You’re missing out on the appreciation that the property gives to the landlord. Appreciation is a term used in accounting relating to the increase in value of an asset, which means in real estate terms, added value to the property. Over the past five years, houses appreciated significantly, making many new real estate investor multimillionaires.

2. Renters don’t get to freeze their monthly housing expenses like home buyers can. Of course, many home buyers get mortgage payments with adjustable interest rates and their payments go up over time. However, these payments will not go up over the long term like rising rents. Just think about how much an apartment costs today compared to ten years ago. A two bedroom apartment in Lake Elsinore, California leases for $1,000 today. The exact same apartment rented for $325 in 1996, when it was brand new. Home buyers who had low monthly payments in 1996, who did not refinance their mortgage, enjoy low payments and don’t have to worry about rising rents.

3. Renters don’t benefit from tax advantages. Home owners get income tax deductions. Tax deductions for interest costs, for instance, save tax payers thousands of dollars.

Emotional Satisfaction of Home Ownership

Besides losing out on making money with real estate, renters don’t get the same satisfaction of home enjoyment that benefits home buyers. Many landlords won’t allow you to paint your walls in colors that you desire. Also, you won’t feel like fixing up the property with custom window coverings and you get little say in flooring materials. Because you can’t make your personal statement, you won’t feel like you’re HOME as much as home owners who feel emotionally connected to their property.

How to Buy Your First Home

The biggest barrier to home ownership is often accumulating funds for a down payment. People think they have to have thousands of dollars for a down payment. However, if you have good credit and a decent job, you can get a mortgage for a home with zero down. And you can finance some of your closing costs as well as ask the seller to help you pay a good portion of your purchase costs. With today’s mortgage finance plans, you may be surprised to find out how much of a home you can afford with payments similar to what you currently pay in rent.

You may have to go out of the major metropolitan areas to buy a home. That’s why so many people commute in Southern California. Affordable housing costs much less in outlying areas. But so do the rents. If you’re renting an apartment for $2,300 in Los Angeles, you could buy a $500,000 home in Wildomar. Our daughter just purchased a home in December 2005 and her mortgage payment, for a 3,000 square foot new home, costs less than $2,300. With her tax savings, she will pay even less than renting a small apartment closer to downtown L A.

If these amounts sound high to you, check your local area. Perhaps your monthly rent is only $1,000 and houses cost less than $200,000. Talk to a mortgage loan officer and see how much of a home you can afford.

If you’re renting, make one of your New Year’s Resolutions to buy your own home.

Copyright © 2006 Jeanette J. Fisher

FREE Special Report “Credit Tips for Mortgage Financing.” Find out the six mortgage requirements and why your credit score isn’t the only thing keeping you from financing your dreams. FREE Credit Help Teleseminar. Get expert advice on building your credit from mortgage expert and real estate college instructor Jeanette Fisher. More free credit tips http://worryfreecredit.com

3 Tips to Staging the Inside of Your Home Like a Pro

Writen by Kathleen Yamauchi

Are you considering putting your house up for sale, but not sure where to start? Afraid it will take too long to sell, or that you won’t get the price you want? Think about “staging” your home, or in other words, setting the scene for immediate buyer interest in your property.

To be really effective, you need to look at both the outside and the inside of your home. Here are 3 tips to get you started with the inside of your home:

1. De clutter. This is one of the most important things you can do. It might be easier to think of de cluttering like this - you’re moving anyway, so why not start packing now?

Pack up everything you don’t need and store the boxes out of sight in the garage (or consider temporarily renting a small storage locker).

2. Organize your closets put similar colors together, pants together, skirts together, shirts together etc. Why? Because it will make the closets look bigger. (Really.) An organized closet appears bigger, and you want your closets to look as spacious as possible.

3. Make your home look like a model. You want to de personalize as much as possible so potential buyers can imagine themselves and their own belongings occupying the space in your house. That means minimizing - putting away everything you don’t need or use. Clear off kitchen counters as much as possible - stash all those appliances you don’t use, and put miscellaneous small clutter in a few attractive baskets or boxes

And the biggest tip of all? Imagine yourself as a potential buyer looking at your property for the very first time. What impressions are you getting? Would YOU buy your house? What would you like to see changed before you put an offer on your house?

And don’t worry about spending several thousand dollars to get your house ready to sell - you’ll get it all back when your house sells. Proper staging helps you sell your house in a shorter time and at the price you want.

~~~
Kathleen Yamauchi is a long time realtor located in Prescott, Arizona. For more free tips and resources on buying and selling your home and other real estate advice, visit her web site at http://www.kathleeny.com.

Buying Turkish Real Estate - Why Buy in Antalya?

Writen by Phillip Keates

There are many benefits to buying Turkish property at this time but where is your money best invested? Are you looking to own a holiday home for quick breaks away or are you looking to generate some rental income by renting to other tourists?

Bodrum

Bodrum is easily one of the most westernised cities in Turkey. It has a mix of cultures and due to it’s position in the west of the country the architectural styles weigh heavily toward Greek white washed walls and old stone town houses. Visitors to any Mediterranean coasts in Spain, France or Italy will feel as though they know this style and quite at home. Therefore the buying market in the west of the country is heavily weighted towards British buyers, in recent years the numbers have swelled to nearly 7000 permanent residents looking for Mediterranean style at a reasonable price. Prices are good and apartments can be found for as little as

Real Estate Investing: Don’t Invest Without a Cash Reserve

Writen by Jeanette Joy Fisher

The number one rule in investing or business is obtain positive cash flow. Everyone knows that, don’t they? But many beginning investors forget a rule that may rank ABOVE that one, especially if you’re planning to invest in real estate over the long haul, and that is the importance of maintaining a CASH RESERVE.

Even some of America’s largest businesses have forgotten about the importance of having a healthy cash reserve. And most of those businesses are either longer with us or have emerged from bankruptcy after having learned a painful lesson. (The most recent example of the latter took place when the once venerable retail Goliath K Mart almost disappeared.)

It goes without saying that no business or individual investor can go on indefinitely with a negative cash flow. But there are times when a particular piece of property only needs some time before the market will catch up to it, and when that happens, an investor will need to feed that property until the circumstances are right for changing that red ink to black and that means calling on cash reserves.

Not having enough cash reserves also means that an investor can’t make the repairs that will be necessary to improve the overall value of the property, both now and in the future. The axiom is simple: if you have the cash reserves to weather the hard times at the beginning, you’ll eventually profit from your investment, and if you don’t, you won’t.

There are times when a property will need to be held for months (or even years, if you buy the wrong property!) before it will finally recoup its initial investment, and if you don’t have the cash reserves to ensure that you’ll be able to hang on to the piece of property, you’ll end up having to sell, or worse yet, having the property foreclosed upon. In either case, all the time, money, effort, and stress you’ve invested in that property will go up in smoke all because you didn’t begin the venture with enough cash reserves to guarantee your success.

If it’s a rental property, having a strong cash reserve can allow you to make the property appealing to a better class of clientele. You can hold out for better qualified tenants, and you can withstand periods of vacancy without having to panic. You also won’t have to be held hostage by poor tenants who threaten to vacate, for fear that the property will sit vacant for some time. All those situations can be avoided by maintaining a strong cash reserve.

You ultimately need to make money on your investment, of course, but there will be a variety of situations that will arise from time to time that will make you glad you also followed the other top rule of real estate investment, which is to maintain a CASH RESERVE.

Copyright © Jeanette J. Fisher

Join our FREE Teleseminar “How to Get Started Investing in Real Estate”. Get expert advice for beginning real estate investors from Jeanette Fisher. More real estate investing tips http://doghousetodollhouse.com/

New Approach in Home Buying and Selling

Writen by Linda Benninghoff

Robert Read’s book, “Risk Hotline for Real Estate,” provides numerous examples of dealings where the real estate agent is not intentionally doing something wrong, but runs the risk of losing a sale, being reprimanded or even losing his or her license. This may happen because he has not put the client’s needs first, or is interested in the short term benefit of making a quick sale, rather than the long term benefit of a good relationship with his clients and the satisfaction of a job honestly done.

At first blush, Read’s book appears written mainly for Realtors

Multi Million Dollar Estates In San Diego

Writen by Greg Hitchcock

Ask anyone what makes purchasing multi million dollar estates different from buying any other house, and invariably he or she will reply, “money.” Greater sums raise the stakes and the stress level. Add to that a limited inventory of luxury homes in any one market, buyers and sellers with fewer incentives to compromise, intense competition for upscale property and multiple offers in hot markets. Clearly, high end buyers need to know what they want, what features are important, and the fair market value of the homes in question.

Who is Involved:

The most notable difference between a transaction for a home that is less than $1 million and one that is above $10 million, other than the price, is the number of people involved. In transactions involving multi million dollar estates, there is a team approach, with the real estate agent working for a business manager in addition to the client and his or her attorney.

Another factor to consider with the high end purchases is that a majority of buyers of multi million dollar estates do not use conventional financing. While cash transactions can speed up the transaction, they can also result in a shorter period of time for completing conditions of the purchase and sale agreement. This could be a problem, since a home inspection for an estate home with multiple buildings, mechanical systems, kitchens and baths can take days or even more than a week to complete.

Potential Snags:

Luxury buyers also frequently purchase larger pieces of land, which bring an additional set of potential problems. Often an easement, whether it is deeded or grandfathered, doesn’t come to the buyer’s attention until it is discovered during a title search. Easements are only one of many land issues that can slow a closing. But, if a buyer knows about an easement ahead of time, it is less likely to become a deal breaker. The best insurance for a smooth closing is having an agent who is knowledgeable about land issues and the type of property being purchased.

Purchases that are being mortgaged will be subject to an appraisal. For multi million dollar estates, good agents, particularly those working with a buyer under a buyer agency agreement, will recommend an independent appraisal. In addition to a limited number of sold properties with comparable price tags for appraisal purposes, the other common concern related to appraisals of homes priced above $1 million dollars is the appraiser’s lack of experience with luxury properties. An appraiser who works in this price range will understand what is and isn’t comparable, just as they are better prepared to value features and finishes in the subject property.

Interesting Tidbits:

In a 2003 study made by The Institute for Luxury Homes Marketing and Unique Homes magazine polling 4000 affluent households, a general profile of a luxury homeowner was produced.

• The owner of homes valued at $2.5 million or above is married
• Under age 55
• Works as a top corporate executive, business owner, or self employed professional
• Makes a million dollars or more annually
• Is “new” money
• Owns multiple residences
• Plays golf
• Volunteers for charity
• Has broadband Internet access at home
• Feels his home is a reflection of his success

The study also showed:

• 89% live in a single family home
• 78% have four or more bedrooms
• 92% have four or more bathrooms
• 84% have a home office
• 59% have a home gym

New construction categorized 26% of the homes while 18% were “custom built for me” and “historic property” described 8% of the homes.

Inside San Diego Real Estate is a network entirely devoted to real estate information. The entire Inside Real Estate network has more than 100,000 pages of real estate for cities allover the United States. Inside Real Estate covers several topics from the basic “how to’s” of real estate to city specific real estate information.

Funding Your Real Estate Investments: Find Money Through Partnerships and Syndications

Writen by Jordan Taylor

Finish this sentence: “I’d like to invest in real estate, but ____________.”

If you said, “I don’t have the money,” bestselling author and internationally recognized real estate expert Russ Whitney has the solution.

“There is no question that it takes money to invest in real estate,” says Whitney. “But keep in mind that it doesn’t have to be your money. If you have a good deal, you’ll find the funding.”

Whitney, who is the CEO of Whitney Education Group, Inc. and author of several bestselling books including Millionaire Real Estate Mentor (Dearborn Trade Press), The Millionaire Real Estate Mindset (Doubleday), and the revised Building Wealth (Simon & Schuster), says that simple partnerships are a great way to invest in real estate.

“There are plenty of people who would like to invest in real estate, but they don’t know how and they don’t really want to take the time to learn or to do the work,” Whitney says. “If you bring them a good deal and present it well, they’ll be happy to use their cash and/or credit to fund the deal, let you do the work, and you split the profits.”

Think you don’t know anyone who has enough money? Think again. You probably know dozens of people who have money in retirement accounts and who would like to see that money earning a higher yield than mutual funds provide. Many high income professionalsdoctors, lawyers, accountants, engineersare looking for strong investments that will provide a level of long term security their jobs do not. Whitney says that if you’re shy about asking these people to invest in your project, use an indirect approach. Simply tell them you have a great deal, you’re looking for a partner, and if they know of anyone to please pass the name along. If they’re interested, they’ll ask questionsand if you have the right answers, you’ll have your funding.

According to Whitney, the key to successful partnerships is a clear and comprehensive written agreement. “You want to clearly state who is responsible for what, who has the authority to do what, and how the profits will be divided and paid,” says Whitney.

A more sophisticated approach to funding is syndication. While the term might sound complicated, Whitney points out that it really is nothing more than bringing together a group of investors to accomplish a common venture. “Syndications build on the principle of strength in numbers,” says Whitney. Keep in mind that some types of syndications and other methods of raising money from outside investors are regulated by state and federal governments, so you should discuss your plans with an attorney before proceeding.

The key to successful syndications is preparation. Whitney advises creating a comprehensive business plan for the project before you approach any potential investors. “You need to demonstrate that you know what you’re doing, that you’ve considered all the risks, and that you know what the rewards are likely to be,” Whitney says. “The plan should spell out who is going to be passive and who is going to be active in the venture, as well as how and when the profits will be distributed.” You don’t need an investor you expected to be passive jumping in and trying to run the showand you don’t need an investor saying “where’s my money?” six months into a two year project. A clear business plan and syndication agreement will help prevent that.

Getting your first partner will likely be the most challenging, but once you do a deal and the partner makes a profit, you’ll have no trouble finding other investors for your partnerships and syndications. “When you make your investors money, they’ll be lining up to give you cash for another deal, and they’ll tell everybody they know about what you did for them,” Whitney says. “The best way to find investors is to satisfy the ones you have.”

A business plan for a development project should include:

An executive summary that captures the essence of the project.

An overview of the project that provides a detailed description of the market opportunity, the financial objectives, the legal form of organization and ownership, the management team, the financing basis, and timetable.

A detailed marketing plan.

A comprehensive financial plan that includes all appropriate financial information so investors can make an informed decision.

Any necessary supplemental documents, including tax reporting requirements, risk identification, employee related regulations, licenses, taxes, zoning, reporting requirements, etc.

Jordan Taylor is the editor of Millionaire Mentor

Utah County Real Estate

Writen by Mark Keller

Utah county real estate is becoming more popular each year. Only recently have we begun to see housing prices rise to match the average national prices. Located 44 miles south of Salt Lake City, Utah County lies in a valley beneath the Wasatch Mountains. Utah County is currently experiencing unprecedented growth. Founded in 1852 Utah County has a long history of being a wonderful community. It has consistently been ranked in the top twenty best places to live in the nation by Money Magazine and was ranked in the top twenty best places to do business in America by Forbes magazine. The County ranked 5th for the fastest growth of out all counties in Utah last year with an 8% percent increase. The total estimated population for the area is 398,056. Provo is the largest city in the county with a population of 153,600. Other cities of note are Orem, Pleasant Grove, and American Fork.

The total number of housing units in the county is 104,315. This number is increasing significantly each year. Several large developments are currently being underway in Lehi and American Fork. New construction can be seen everywhere. It is really an exciting time of growth for the Utah County. A majority of these units are owner occupied. Current estimates show that around 33,137 units are being rented. Utah County real estate is very popular among real estate investors due to the ease of renting in the area. There are several colleges, hair schools and dental hygiene schools in the area providing a large population of student renters. The 71,178 units that are owner occupied have an average monthly mortgage cost of $1,148. Due to the higher appreciation rates seen in other parts of the country those who relocate to Utah are able to buy a home that is much larger and newer than their pervious home. This is another reason for the amount of growth we are seeing in Utah County. Real estate here is a great buy.

Another reason Utah County real estate is so appealing is the low crime rate. An FBI report showed the Provo Orem Area has the second lowest rate of violent crime in the nation for the year 2000. Utah County is also very family oriented. The average family size is 3.86, much higher than the national average. Large families and a high student population are responsible for the county’s low median age of 23.3 (the lowest county median age in the United States). This is a community of active young adults and young families.

Median income for a household in the county is $45,833, and the median income for a family was $50,196. Males had a median income of $37,878 versus $22,656 for females. The per capita income for the county was $15,557. Over 12.00% of the population and 6.80% of families were below the poverty line. The poverty rate for the county is partially due to the large student population in the area. Also because of its younger population many haven’t been in the job long enough to receive raises. The lower income of the area makes buying Utah County real estate possible to everyone. Excluding Alpine City where the homes are large and luxurious. Alpine is know for its incredible real estate. About 88% of Utah County residents are Latter day Saints; this is probably the highest concentration of Saints in the world. The culture and lifestyle of the people here is unique and welcoming. Members of all faiths have found Utah County Real Estate not only a great buy and wise investment but also a cherished place to call home.

Mark Keller is an internet marketer for http://www.10xmarketing.com Learn more about Utah County real estate by visiting the http://www.lucidiagroup.com at http://www.lucidiagroup.com/Index.aspx

Staging a Home for Sale: 10 Easy Ideas You Can Use Part I

Writen by Michael Trust

Staging a home for sale means just thatsetting the stage so that your home may sell faster and often times closer to the listing price than if it were not staged.

Staging allows the home to be presented as a canvas and allow the buyer to paint a picture for them; visualizing what the space will look like if they moved in with their items. But that does not mean showing an empty home; rather staging accentuates spaces within the home by creating vignettes, which enhance positive space while downplaying negative areas within the house.

You could hire a professional stager for about $400 for a consultation and then shell out another $100 per hour for the stager to do the packing and the redecorating, OR you can do it yourself, keep the savings and put it into staging the home if you do it yourself.

In order to create the staging scene, understand that for the next 30 90 days, while the house is for sale, you will need to have removed personal items, collections and clutter, (and keep them ‘gone’ until you have a signed contract). Your home may lose its personal style and warmth, but that will be one of the small sacrifices you will need to make to maximize profit from the sale of your house.

Staging will require some planning as you will pack away items, which you may have kept handy just for the sake of a convenience (i.e., refrigerator door space used as a bulletin board for ‘to do lists,’ coupons, family photos and calendars, etc.) or items which may have been left plugged (indefinitely) into electrical outlets for convenience, such a shavers and hair dryers in the bathroom; all of which add clutter to the home.

If you stage your home for sale on your own, here are 10 easy tips to remember:

1) Make a list of all the spaces, choose one room at a time and tackle each individually. You will be overwhelmed if you choose to do ‘the whole house’ in one afternoon. Start with the bathroom(s) and the kitchen and then move to the common rooms and finally the bedrooms. Basements, hallways and attics are last. Check off each room on your list as you go helping to make you feel as if you have made some accomplishment. Understand that packing up clutter is ‘work’ and it is time consuming (that is why there is a $100 an hour price tag on the hiring a professional), but remember always that the savings outweighs the hard work. By all means, ask family members to pitch in. Even children can pack away their toys and older children can clean a dirty shower. Plug in the Ipod or put on a CD to help the time pass a little more pleasantly.

2) Evaluate the colors of each room individually. Pastel colors do not sell well. Baby blue and princess pink are often gender inspired colors, which are a huge turn off for potential buyers. Even if the buyers have children and will use the baby blue room for their own baby, they may or may not like that particular shade or, in fact may wish to use yellow or green, often considered colors, which can traditionally be used for both boys and girls. Play it safe and simply paint over the pastels with a neutral color like beige or off white. Any wallpaper should be removed or painted over if possible.

3) Go to your neighborhood grocery store and ask them for empty boxes from produce as these usually have side cut outs for easy grabbing. Start storing empty boxes in a place for easy access a few weeks before you begin to stage. You will need the boxes and having them handy will keep the packing momentum moving along.

4) As you go from room to room, remove family pictures from the walls and replace them with used art from a thrift store or simply purchase framed prints from a local dollar store. Pack away all collections including children’s Hot Wheels, baseball cap collections and any other really personal collections you and your family may be fond of. You may leave out neutral items for decorating such as pricey crystal, Lladro, colorful depression glassware to fill in those spaces left behind when the spoon collections, baseball card collections and Formula 1 car collections come off the fireplace mantle and shelves. This may be ‘painful’ but consider that in 30 90 days you will be able to unpack these items in your new home and enjoy them again.

5) Consider at this point whether you will need to rent storage space or whether a neighbor or a friend will allow you to store these items in their home as filled boxes will accumulate quickly. A new storage idea has streamlined storage space in recent years, whereas you rent a container or a pod and store the items in this portable space for as long as you need to. If you should rent this container space, do not store the entire container on your own property. Ask a friend or a neighbor if you can store it there or ask the container company if you can store at their own facility. You do not want to make your home look like a warehouse. Also, do not consider storing any packed items in a spare bedroom or in the basement of your own home as you would simply be de cluttering one room and cluttering another. All rooms should be clear of storage boxes, afterall you are selling a home and not a storage space.

6) Clean, clean, clean.particularly bathrooms and kitchens. No home will sell especially well with grit, mold, dirty tiles and floors. For as much as you will stage each room, the buyers’ eyes will focus on the dirt and not on the hard work you put into staging. People remember dirt and grime and it would only remind them how much more work they would have to do when they moved in themselves. If you need to re grout a dirty tub, then you will need to make that effort.

7) Buyers make a determination of a home within 20 seconds of walking through the front door. Make that experience memorable within that short period of time. If you have an entryway, set up a table, with flowers, a small attractive bowl of expensive mints and add some potpourri somewhere in the area. Scented candles offer a nice smell when you first walk in, so I use them often. I often purchase scented candles at the dollar store or the day after a holiday when the retailers slash holiday item prices. An expensive red Christmas candle can be picked up for half price the day after the holiday season and no one would know it was a holiday candle. The same for Halloweenoften orange, black, yellow and green scented candles go on sale after this event, so I stock up at that time and use those candles throughout the year.

If you have an entryway, open all the doors off the entry to make the space appear larger and brighter.

Go from room to room and pack up clutter. Leave a small basket under the counter or in a closet with items you will need to use while you are still living there. The only items on a bathroom counter should be a small bouquet of flowers, a bar of clean decorative soap in a clean soap dish and a clean hand towel. Toothbrushes, toothpaste, shaving cream, medications and hair products should all be packed away under the counters or in places, which are not noticeable.

9) Go to the supermarket and purchase an inexpensive bouquet of either daisies or carnations. You get many more flowers to work with in these arrangements than you would if you opted to spend money on roses or more expensive flowers. Arrange the flowers in whiskey snifters, small vases, or, if you do not have either take a better drinking glass from your kitchen, tie a small ribbon around the base and fill that with water and a few daisies. Use these arrangements randomly around the home but be sure to place at least one in each room. Change flowers as needed but the daisies and carnations seem to last a long time even if you forget to add more water! Dying flowers MUST be thrown out immediately; they make bad impression to visitors to your home.

10) Move out the bulky furniture and create little seating venues in your home with small tables and chairs. For example, you normally have a large sectional in your TV room with a cocktail table and two side tableshowever, you may also have a large window facing the backyard that is blocked by the sectional. Remove pieces of the sectional to make the space appear larger. Place the cocktail table and one end table near the sectional. Find two chairs, which do not always have to match and place the other end table in front of the window with the 2nd end table in between the chairs. Add your bouquet of flowers, a small lamp and you have another seating area in the room. Pull your curtains away from the window, tie back with decorative rope or ribbon and let the light shine in the room. Add a bowl of lemons (I also like to use colored peppers) to the cocktail table for added color. Find two pillows that DO match and place them on the chairs in front of the window to tie the room together. If you do not have matching pillows, take two unmatching pillows and wrap matching pillow cases around the pills and knot in the center with a piece of ribbon. This is an easy formula to pull together a room which works in every bedroom and common area in the home.

If you do not have a window to showcase, you may use a blank wall and situate the furniture as indicated above, adding two or three framed prints between the chairs and slightly overlapping the seating space to bring the eye toward the seating venue.

For more staging ideas, please click here for Part II of this series. http://mtrust.realtownblogs.com/real estate/staging a home for sale 10 more ideas you can use part ii

Michael Trust is a native Angeleno. Born, raised, and educated in Los Angeles, and a homeowner himself, Michael is familiar with the challenges of buying, selling and owning real estate in the Greater Los Angeles area.

His background is unusual in Realtor

4 Ways To Get Rich in Real Estate

Writen by Marc Rasmussen

1. Find foreclosures

If you have enough cash you can buy homes at the foreclosure auction. Most areas require you to pay cash the day of the auction. The problem with this strategy is that you might run into title problems and many times you cannot see the inside of the home prior to the auction.

My personal favorite is to find people in foreclosure and work a deal with them prior to the auction. This does not require you to pay cash and many times you can buy the home with seller financing.

This situation can be beneficial to both parties. You are helping someone keep a foreclosure off their record and also buying a home at a discount.

2. Pay retail and hold for the long haul.

Paying retail for real estate has worked very well lately. The Sarasota, Florida real estate market, like many areas of the country, has been booming. You could have purchased pretty much anything within the last few years and made money.

There has been alot of talk lately about a real estate bubble. It wil be interesting to see if recent home buyers will keep their price gains. I believe prices to stabilize in areas that are forecasted to have large population growth, like Sarasota, Florida.

In my area almost every property has a negative cash flow if you purchase using a mortgage. I cannot find one property in my area that produces a positive cash flow with any kind of financing.

You have to focus on the time value of money when looking at the long term benefits of real estate. Let’s say you buy a $200,000 house today and the home appreciates at a modest 5% a year. After 20 years that home will be worth more than $530,000! At a 10% appreciation rate for 20 years the home will be worth over $1,345,000! Let’s be negative and say that real estate will only appreciate at 3% a year for the next 20 years. At this slow appreciation rate the home you paid $200,000 for would still be worth $361,222 at the end of 20 years. Keep in mind that at the same time you or your tenants are also paying down the mortgage. Can you imagine if you had 10 20 good long term rentals? After 20 years there is a good chance you would be a multi millionaire.

3. Buy in depressed areas

Find areas that are depressed but have some redeeming quality such as proximity to the beach or waterfront, a thriving downtown or some other desireable place. Many depressed neighborhoods need a pioneer. Someone to come into the neighborhood, pay retail, either tear down and build or rehab the old homes. This kind of activity will eventually attract other investors or home owners with money. Once the money starts rolling into the neighborhood it changes and starts to become a more desireable place, which ultimately attracts more money.

I purchased a home in a depressed neighborhood on the water in Bradenton, Florida. A developer is buying my house and other depressed homes in the neighborhood to build high rise condos. The redeeming quality of the house I purchased is that it was on a river, with a gorgeous view and was convenient to a changing downtown.

4. Fix up houses

As a Realtor I have worked with hundreds of buyers over the years. There are people who just won’t buy homes that need work. They either don’t have the time, patience, knowledge or desire to buy an outdated home and fix it up. This is where the handyman or contractor can make some good money.

I have made money in the past by fixing up and flipping tired homes. However, I have always purchased them at a discount from normal market values. Make sure you either get the house at a good price or have a way of adding some value to the house. Usually, the investors who get their hands dirty make money doing this. I see many wanna be investors get into this game by purchasing homes at retail or slightly below, contracting out all of the fix up work and then trying to sell above what the market will bare. These are the investors who tend to make little or no money in relation to the time and risk associated with the project. Would you want to lay out $30,000 for a downpayment and $40,000 in fix up costs over the course of 6 months to rehab a house only to make $10,000?

Marc Rasmussen a Realtor/investor selling Longboat Key real estate.