10 Keys for Maximum Real Estate Investing Profits

Hot tips for real estate. Ten hot tips to increase your real estate investing business.

TIP #1



There are several tried and true methods to uncover sellers who

will literally beg you to take their house. They all boil down to

finding a seller whose situation has changed.



For various reasons (such as divorce, death or job conditions),

they need to get out from under their home fast. You can often buy

these homes for pennies on the dollar, then turn around and sell

the property at a much higher market value. That translates into

BIG real estate investing profits for you.



The 'trick' is in finding these sellers. Be patient and keep looking -

they are out there and the rewards are well worth it!





TIP #2



Changes in gasoline prices add to labor costs, because contractors

expect to be compensated for the cost of getting to and from the

job site. If you are working on a tight budget, a few cents per

gallon at the gas pump could erase your profits when you rehab

and "flip" a property.



Take care to calculate into your rehab cost a 'fudge factor' to

include funds for such 'emergencies'. A good rule of thumb is to

multiply your estimated rehab costs by .2 (20%) and add that to

the estimated cost when you are analyzing a potential project.



If this small addition kills the deal for you, it is probably best to

move on to another deal.





TIP #3



You can raise the rents on your rental property if you have a

carport built. If you have a three-plex and your tenants agree to

pay you $30 more per month, that is $1080 more net income

annually, meaning roughly $13,500 more value added to your

property.

($30 x 3 units x 12 months = $1080 divided by a .08 cap rate =

$13,500)



If you can build a carport for $4,000 or even $5,000, that's a good

return on investment right? Can you find out what other

improvements the tenants want?





TIP #4



Delays in a real estate project leaves real estate investors open to

vulnerability from shifting economic factors. If the housing market

cools off and interest rates spike before you get your house on the

market and sold, you could be left with expenses like mortgage

payments, insurance premiums, and property tax added to your

balance sheet.



Add an additional 10 percent to your initial calculations for these

holding costs when analyzing any real estate.





Not all real estate investors are bestowed with exceptional

financial qualities. However, there are several techniques to

enable good people with less cash to step into the world of real

estate investing.





TIP #5



All too often real estate investors feel that "A better deal may be

just around the corner" and never starts his or her real estate

program because they always hope a better deal may be out there

somewhere if they just wait...and wait...and wait.



Real estate investing deals do not come knocking on your door and

there will always be another one out there! You can only take

advantage of one at a time anyway, and the good ones will come

to you more often as you have more practice.



Take action and get out there!





TIP #6



When you buy the debt that finances real estate, you participate

without having to roll up your sleeves and deal with the nitty-gritty

details of rehab work as well as avoid the hassles of dealing with

renters and all the other less-than-desirable aspects of real estate

investing.



Those who invest in the loans that fuel projects will always be in

demand, as long as there is a market for buying and selling

property. And, that is likely to be around for a long time!



Become the bank - that is where the money is!





TIP #7



Should you decide to use one, a real estate agent does do a lot of

leg work during a sale, but all of it comes at a cost. Hefty

brokerage commissions of 6% or more turn many investors off of

the idea of using an agent and onto the idea of selling the

property themselves. If this sounds like something you would like

to do, follow these steps for selling your real estate yourself.



Step 1. Calculate the asking price for the property



Hire a professional appraiser to price the home or check the sales

prices of comparable homes in the same area of your real estate.

You can visit your local court house and compare similar recent real

estate sale prices within a few miles of your property. Many court

records are now available on the Internet.



Always take into consideration the current real estate market. If

the market is a buyer's market, you may have to lower your price.

If it is a seller's market, you might be able to ask more than the

market value for the property.



Step 2. Market the property



Advertise the property and show it to perspective buyers. Make

sure you have the necessary purchase contract forms. The

purchase contract will need to be signed by you and the buyer

once you have negotiated the deal.



Step 3. Close the deal.



You will need a closing agent to perform the closing, which may be

an escrow company, a title company or real estate attorney,

depending on your area. There is a lot of paperwork needed here

as you need to provide the buyer with disclosure statements and

he will need to provide you with a loan commitment letter.



Inspections are also performed during this time and a title search

will be completed by your closing agent. To complete the closing,

you will need to meet with the closing agent and buyer to sign the

paperwork. pay any closing fees, pay off the mortgage and pay or

put aside any taxes owed. Your closing agent will help you with all

these details.



The closing phase is the busiest (and most exciting) time of selling

your first property in real estate. The closing table is where all of

your hard work pays off and you get to walk away with your real

estate investing profits.





TIP #8



Once you begin your real estate investing career, you'll wonder

why you waited so long to begin. Do not allow yourself to become

complacent!



Many investors fall in love with their investing once they see how

well it is doing. When cash flow has been going well each year,

they fall in love with their tenants or at least get so friendly with

them that they do not maintain rental standards that keep the

price where the market will bear.



Or, they see how appreciation has worked its course and fail to

watch for signs of falling prices because they want to sell only at

the highest price (yes, they get greedy...)



Never fool yourself into thinking your property is doing too well to

sell or trade up because your cash flow is considerably higher than

when you purchased the property or that the appreciation swing

will never end. It always does and you as a real estate investor

have to pay attention to it.





TIP #9



Many real estate investors continually try to purchase investment

properties that are not really on the market. What I mean by that

is the property owners have the attitude of "Sure, my property is

for sale... for a price". Unfortunately, 'for a price' usually means it

will make no financial sense for an investor.



Be sure to analyze the real estate for its true value and work only

with truly motivated sellers that are willing to work within

parameters that allow you to make a profit for the time, money

and effort you put into it.





TIP #10



Trade items to reduce the down payment. No one says you must

pay the down payment in cash. Valuable items such as musical

instruments, furniture, paintings, and even pets can be used

instead of cash.



Rare species of animals may prove to be a perfect down payment

on your next real estate deal. Some investors have even traded

their precious emeralds, rubies, and other gems.



I once took a pool table as a down payment on one property and

used it as down payment on another even before it was moved!



Be creative in your real estate investing!





Additional real estate investing help. The trick in real estate

investing is to satisfy the seller's needs and win the seller's trust.

Then put together a deal that works for both parties. Write it up,

sign it and reap the profits! You need not be a millionaire to do

real estate, you simply need to be focused on a win-win scenario.