Real Estate: Advantages of Real Estate Investing for Entrepreneurs...
Home Selling
It's been said that the only thing in real estate that is more confusing than purchasing a home is selling one – especially if you've never done it before. Where to start? Who to turn to? SOUTH FLORIDA, CONTACT ANTHONY JEANTY, THE NEIGHBORHOOD FRIENDLY AGENT.
1. Cash flow.
Many people invest in rental properties simply because of the cash flow - the extra money that is left after all the bills have been paid. The cash flow can provide ongoing, monthly income that is mostly passive, allowing you to spend your time building a business, traveling or reinvesting in more real estate.
Cash flow from real estate is stable and far more predictable than most other businesses. That's great for entrepreneurs enduring the ups and downs of start-up life. The cash flow can help float you though the bad times and live well during the good times.
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Home Buying
There is a new generation of real estate investors that have emerged in the last five years making a killing in real estate. Why not trying to be part of it to start making money too.
Welcome to the knowledgefinancialgroup.com // Home Buying information center. This is the place where you'll find comprehensive information on everything connected to purchasing a home – and we mean everything.
What exactly goes on in a home inspection and how is it different from a home appraisal?
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Pretty much Anyone Can Make Money in Real Estate With The Help Of The Staff Of Knowledgefinancial.com
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It’s no secret that real estate is and always has been one of the best investment opportunities, no matter the market condition
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There is a new generation of real estate investors that have emerged in the last five years making a killing in real estate. Why not trying to be part of it to start making money too.
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2. Tax benefits.
Let me ask you a quick question: if you earn $200,000 at your own business and I earn $200,000 through rental properties, who get’s to keep more?
That’s right: I do. Because the government rewards rental property owners.
Not only is the cash flow received from your rentals not subject to self-employment tax, the government offers tax benefits including depreciation and significantly lower tax-rates for long-term profits.
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3. The loan pay down.
When you buy a rental property using a mortgage, your tenant is actually the one paying the mortgage payment, thus increasing your net worth each month. Because of the loan pay down a rental property is essentially a savings account that grows automatically, without you depositing money each month.
Today you might owe $400,000 on a rental property, but next year you might only owe $385,000 because the tenant is making the payment for you, making you $15,000 richer. Thirty years down the road, or whatever the term of your loan, it's paid down to $0. You own a significant asset that you can sell or continue renting, all thanks to your tenant paying the mortgage.
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4. Appreciation.
While the loan is being paid down the value of real estate, generally, goes up. Yes, I know, recessions do happen. Values do go up and down. People buy at the wrong time of the market. I get it.
However...
Over time, values do climb higher and higher. That's why I’m not in this real estate game just for a year or even a decade. I’m in this for life. I know my properties will continue to climb so that 30 years from now, everything will be worth far more than I’m paying for it today.
5. Real Estate Is A hedge against inflation.
Can you imagine paying ten dollars for a gallon of milk? Or five dollars for a candy bar? While those prices seem exorbitant to you, this is the future because of inflation. Inflation is the process by which prices increase due to the value of money decreasing.
While most people fear inflation, as a rental property owner, I look forward to it!
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When the price of a gallon of gas hits high, higher than usual , guess what else is going to shoot through the roof? Everything, including rents and property values!
The one thing that won’t increase, however, is my fixed-rate mortgage payment. As inflation pushes the cost of living higher and higher, my cash flow will only increase. This is why real estate is often called “a hedge against inflation."
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6. Control.
If you don’t like your destiny tied to a board room on Wall Street or a nervous CEO in Silicon Valley, or on China market decisions, or on FED.
This is why many people choose to invest most of my income in real estate, knowing that they are the one who are responsible for their own success or failure.
- If I want a better deal, I need to hustle to find it.
- If the rental market gets more competitive, I can compensate by increasing my advertising.
- If values drop, I can choose to wait it out or improve the property to drive the value back up.
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Don’t think that just by owning some rentals you are instantly going to begin building wealth. Real estate is powerful - but only if you work it right.
You must learn how to find great deals
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Find A Real Estate Agent Who's Capable Of Helping The Right Way.
We combine experience - professionalism and expertise to help you make a confident choice about any real estate transaction you to make..
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No, we're not talking about regular people's homes. The biggest gains have come from so-called real estate investment trusts -- REITs for short.
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REITs are companies that own a lot of different properties. Some REITs specialize in just one type of real estate.
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REITs trade like stocks. REITs give you real estate exposure a lot easier than having to buy and sell actual buildings. It's good for diversification, which is why sophisticated investors usually have about 5% or less of their portfolio in REITs.
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2) REITs win big with an economic recovery. The financial crisis that triggered the Great Recession was caused largely by mortgages gone bad. That caused real estate prices to plunge. But when the economy started recovering, real estate (especially office space and urban apartments) bounced back. REITs benefited big time.
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REITs have high dividends. Quite a few investors, especially retirees, like to have steady income from their investments. Normally they buy bonds to get that income
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Investors have been substituting REITs in their portfolios for bonds. It's been a shrewd move. People have received steady dividend payments while the underlying asset has risen in value nearly as much as stocks.
Investors have been substituting REITs in their portfolios for bonds. It's been a shrewd move. People have received steady dividend payments while the underlying asset has risen in value nearly as much as stocks.
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REITs are typically seen as more risky than bonds since REITs have a lot of the characteristics as stocks.
REITs are typically seen as more risky than bonds since REITs have a lot of the characteristics as stocks.
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Homeowner, Let Us List Your For Sale Property For You Because Homeshoppers can and will be able to see your listing on over 100 differentwebsites and social media pages..Home shoppers receive instant emails about our new listings.
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Why keeping REITs in our portfolios? The reason is simple: The Fed will only raise rates when it believes the economy is thriving again. It's a vote of confidence in America's growth. As the economy improves, real estate typically does well too.
The great thing about real estate is that even in a bad economy, it will usually fare better than stocks. Land, after all, is a finite resource. People need a place to live, work, shop, and play—so real estate is really just a matter of supply and demand.
What's more, real estate will continue to appreciate despite occasional slow-downs in the economy. In fact, it's proven to be the best way to create wealth, and an investor need not be a genius or a millionaire to succeed. Here are some tips, then, for entrepreneurs on getting started and succeeding in real estate investing:
• Net income (income/expenses)
• Cash flow (net income/debt financing payments)
• Return on investment (cash flow/investment)
• Cap rate (net income/property price)
• Cash-on-cash return (cash flow/investment)
• Total ROI (total return/investment)
Homeowner, Let Us List Your For Sale Property For You Because Homeshoppers can and will be able to see your listing on over 100 differentwebsites and social media pages..Home shoppers receive instant emails about our new listings.
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Why keeping REITs in our portfolios? The reason is simple: The Fed will only raise rates when it believes the economy is thriving again. It's a vote of confidence in America's growth. As the economy improves, real estate typically does well too.
What Entrepreneurs Need To Know Before Investing In Real Estate...
Why should entrepreneurs invest in the first place? The answer is: to have enough money to live on when we no longer can or wish to work. To put that money aside, however, we have to accumulate enough to offset inflation and the taxes that erode our savings. And for that purpose, real estate is an excellent solution..
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The great thing about real estate is that even in a bad economy, it will usually fare better than stocks. Land, after all, is a finite resource. People need a place to live, work, shop, and play—so real estate is really just a matter of supply and demand.
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What's more, real estate will continue to appreciate despite occasional slow-downs in the economy. In fact, it's proven to be the best way to create wealth, and an investor need not be a genius or a millionaire to succeed. Here are some tips, then, for entrepreneurs on getting started and succeeding in real estate investing:
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Plan your financial goals.
Before you buy that first property, or do your first analysis, determine what you expect from your investments. What are your financial goals?
You absolutely do need to learn some basics before venturing into investing. So, be sure to do some studying, but don’t let “buying and collecting” information become your endgame. Again, having goals in mind will make the process much more straightforward. It’s easy to get so tied up in the “research” phase that you never actually take action
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Look at plenty of properties.
Don’t just grab the first property you look at. Too many investors buy properties because they “look nice,” or the investors don’t want to put the work in to look at what’s really out there. Remember, you won’t be living there, so don’t make your investment decision based on your personal preferences. While you shouldn’t fall into the trap of analysis paralysis, make sure you are thorough in looking through properties
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Plenty of beginning investors suffer from “a-better-deal-may-be-just-
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Be wary of sellers that try to over-estimate the value of the property through pro-forma (estimated) data. While you can certainly use a pro-forma to start the conversation, make sure you know the real numbers before closing. Look at previous years’ tax returns, property-tax bills, maintenance records, etc. to get a good idea of the real income and expenses.
The most important figures you should know are:
• Cash flow (net income/debt financing payments)
• Return on investment (cash flow/investment)
• Cap rate (net income/property price)
• Cash-on-cash return (cash flow/investment)
• Total ROI (total return/investment)
In each case, “investment” refers to how much you invest in the property. "Debt financing" refers to any loans you may have to take out to buy the property. And "total return" refers to cash flow, equity accrual (i.e., equity gained from your tenants paying their rents), appreciation and taxes.
Once you have understood these figures, you should have enough information to determine whether or not acquiring the property fits with your financial goals.
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Don't—try to buy property that the seller is not motivated to sell.
If the seller is motivated to sell, you’re not likely to get the price best aligned with your financial goals. So, how do you know if a seller is motivated? Look at the asking price. For example, If the property has been on the market for a year for, say, P5 million, with little-to-no price reduction, the seller is clearly not very motivated to move the property. However, if that same property has been on the market for a year and has had its price moved down considerably, the seller most likely wants to do whatever it takes to get the property off his or her hands
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Attending open houses
• Looking for vacant/unattractive properties that are for sale
• Spreading the word about yourself and what properties you are looking for—truly
• Going the old-fashioned route and looking in the classifieds of your local paper
• Looking for vacant/unattractive properties that are for sale
• Spreading the word about yourself and what properties you are looking for—truly
• Going the old-fashioned route and looking in the classifieds of your local paper
These are just a few ways to find sellers, but there are potentially dozens of other methods, depending on what type of property you’re looking for.
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know the difference between real estate investing and the business of real estate.
As an entrepreneur, you already have a business, and real estate investing is best used to support that business, not replace it—unless that’s your intention. In other words, don’t get so caught up in executing transactions that your core business falters. If that happens, you’ll be facing a bumpy road to get back to stability. Unless your business is itself real estate
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Real Estate Investing 101
Why You Should Be Investing Your Money In Real Estate
1.
. Gain more leverage. Real estate is one of the few investment vehicles where using the bank's money couldn't be easier. The ability to make a down payment, leverage your capital, and thus increase your overall return on investment is incredible.
2. Grow, tax-free. Buying rental property based on speculation of its value is a dangerous tactic since cash flow is the key. However, appreciation over the long-run is certainly realistic and at the least you should be considering a tax-deferred strategy. In the future, you may even consider a 1031 exchange, charitable trust, or an installment sale to lesson your tax liability further.
3. Tax free cash flow. It's no secret that because of depreciation and mortgage interest deductions (if you leverage your capital), your cash flow should be tax-free. That's right! The far majority of the time an investor will never pay taxes on their cash flow and can wait for capital gains on the sale of the property in the future
4. The tax write-offs against your other income. Depending on your classification as an Active Investor or Real Estate Professional and your income level, there is a good chance your rental property will not only give you tax-free cash flow, but an overage of tax deductions you can use against your other income. With that said, this is something you want to discuss with your tax professional before investing so your expectations are realistic.
5. Increased tax deduction strategies. Rental property affords investors with another incredible opportunity to convert personal expenses to potentially valid business deductions. Don't forget that rental real estate is a business. This means that travel expenses to check on your properties and payments to family members who manage your properties (such as students away at college) can be deductible and increase the tax benefits when it comes to cash flow and the future sale of the property.
6. Rental real estate is a forced retirement plan. Americans are terrible savers. We lack the self-discipline to put a monthly deposit into our IRA, SEP or 401k as small-business owners. However, buying a rental property is a significant commitment that you are required to commit to and maintain. You will always be grateful in the long-run when you don't give up on it and build future cash flow and wealth.
I meet with a lot of successful entrepreneurs, and almost every one of them has taken profits from their businesses over the years to invest in rental property. Based on this fact and the list above, I have consistently urged my clients to buy one rental property a year and already have clients with rental properties earning them money they never imagined they'd have.
