We’ll cover that in this video plus:
- Yes, cash flow is good, but appreciation is great.
- Investing in multiple cities.
- What moves markets.
- Why markets emerge.
- Rapid appreciation.
- Retaining equity.
See more? Click here —-> LEARN MORE <—-
personal investing
5 Signs Of A Real Estate Market
1. Local government funding
A hefty amount of dollars spent by the local government on local development is a sure sign of the revitalization and further development of an area which means that real estate is about to take off in terms of supply and demand.
2. A jump in commercial funding
The relocation of large businesses, the opening up of offices and an influx of new business in an area is also a clear indication that domestic real estate will take off as all those workers, office personnel and managers will need somewhere to live.
3. Expansion of local transportation
An upgrade of the local transport grid, local transport network and or building of new access routes is an indication of the revitalization of an area.
4. A rise in the local population
An influx of new visitors, a rise in the number of 'out of towners' and a jump in the people who normally live in an area is a sign that the particular market is about to become a real estate hot spot.
5. A rise in investment projects
Any jump in investment projects or any large-scale investment in an area, even if it has nothing to do with real estate is one of the signals that the area is about to become a hotbed of real estate activity and you had better get in there fast.
Want to learn more about real estate markets? Go here.
3 Ways To Determine The Value Of An Apartment Building
There are three ways to determine the value of an apartment building:
- Replacement Cost Approach
- Sales Comparison Approach
- Income Approach
Replacement Cost Approach
The Replacement Cost Approach determines value by calculating how much it would cost to replace an existing structure. This approach is very time consuming to complete as you must obtain pricing for all materials (from 2×4’s to outlet covers) used in the construction of a property and then calculate replacement cost. Because of this, it is very rarely used.
Sales Comparison Approach
For single-family houses and 2 – 6 unit apartment buildings, the most common approach to determining value is the Sales Comparison Approach. This approach compares similar properties that have sold within the last six months, within a certain geographical radius from the subject property (usually no more than two miles, the closer the better) to determine value.
If you’re buying a 3-family apartment and a similar one on the next block oversold for $220,000, then your property will be valued around that area.
The Income Approach
For six units and more, you would use the Income Approach to determine the value of the property. This means that you would determine how much income the property is generating and determine its value based on that number.
There are several formulas that investors use to determine value, though one is more prevalent than others; that is the Cap Rate.
You’ll hear people talk about the “Cap Rate.” It’s what most investors use when comparing one property to another.
The Capitalization Rate is the rate at which the Net Operating Income (the income that is left over after all the expenses are taken out) repays the purchase price on an annual basis. Sounds technical, doesn’t it? Don’t let it scare you.
Cap Rate = Net Operating Income/Value (selling price)
Syndication Is The Secret To Making Big Money In Real Estate
Are you interested in syndication?
First let’s focus on something important: every investment entails some risk and successful investors are great at minimizing the risk not just for themselves but also for everyone else involved with them.
This means that as a real estate investor you must be quick at putting together deals using syndicates.
Essentially, a syndicate is a group of investors representing an interest in breaking into the real estate investment market who put up a certain amount of cash and get fronted by a professional.
If you are clever about it…
And have begun to establish your credentials, built up a reputation and can talk the talk in a way that convinces people to trust you with their money you are then off to a flying start.
It means that you will bring credentials, the ability to close profitable deals and expert negotiating skills to the table.
For the investors who form the syndicate the benefits are twofold:
- First they gain a foothold into the competitive real estate investment market without having to put up a whole lot of money to begin with and this means reduced exposure for them and fewer risks for their money.
- Second they gain someone who will do all the legwork and close the deals and work for their profit. All they have to do is sit back and enjoy it.
Provided you are diligent in your work, capable of paying attention to every detail and good at working under pressure and, hopefully, working at more than one deal at a time then your earning potential should only be limited by your ability to put deals together.
Creating syndicates and using other people’s money to invest in real estate without risking your own allows you to create win-win scenarios which benefit everyone and that is the best way to build a career, a reputation and a personal fortune.
Have you ever wondered how top investors get money to fund their deals? We can show you exactly how and reveal the top techniques of using other people's money to fund your deals.
After that, we'll be looking into…
Success Is Like Planting Corn
If you want to be successful in any endeavor, follow the lead of the Mayans. Learn the
laws of success in your “field” whether it’s a cornfield, or the outfield. Then follow
them diligently. Don’t just sit back and wish for success. That’s like waiting to win the
lottery. Enter it if you want to, but never count on it. That’s the chance world
approach. If you live with unearned wealth as you goal in life, you’ll end up with only
dreams in the bank.
How much corn do you think the Mayans would have grown each year if they had
depended on luck to give them a crop? Probably not much, and in those days, the
price of failure was your head, literally. Napoleon said luck was the ability to exploit
accidents. Very few people become successful accidentally. Try to think of one you
know right now. Can’t, huh? That should be no surprise.
You must understand that every success is governed by a set of recognized success
principles, not by chance or luck or the stars that were shining when you were born.
Master the laws that apply to the area you want to succeed in, and you never have to
depend on luck.
Failure Has Laws, Too
Even in failure people are totally predictable. The laws of failure are just as immutable
as the laws of success, and unfortunately, just as powerful. If your goal is failure, you
can discover the laws and follow them to reach that objective. It’s far more likely,
though, that you’re living those laws by default because it’s easier than working
toward success.
Success is a science and an art. Everybody has to develop their own style of attaining
it. You can’t buy it, you can’t inherit it and you can’t steal it. It knows no divine right.
Success is “non transferable.” It can only be acquired by the personal mastery of its
rules by each person individually. And most important of all, it can never be acquired
by wishing and hoping. Wishing and hoping are the currency of fools, and the first
laws of failure.
Success Is Predictable Through Education
Human nature is very complex, but in many ways very predictable. People who let
chance pervade their lives can never make predictions about the most important thing
in their lives—their own future. They just go along and hope for the best, and often
their best is another failure in a long line of failures. Life does not have to be that
way.
People go to school for years to study medicine so they can be healthy, both physically
and mentally. They study science to find out what makes the world work. They study
history to learn from the mistakes of the past. And some study religion to gain
spiritual health. Is it so difficult, then, to understand that studying success is just like
studying anything else? Having a faculty of coaches who are experts in different niches of real estate is a significant competitive advantage to growing your business.
But people get in a rut. It’s easy to do. There are lots of places where ruts block the
road to success. And if you’re not careful, that rut in front of you can turn into a grave
with openings at each end. Education is the key to avoiding those ruts. With
education, you can learn to be predictable with them. By being predictable with
predictable laws, you will always achieve predictable results. It’s really quite simple.
Think about a brand new compass for a moment. All compasses start with no
predictability. Their needles point in any direction until they are magnetized. When
they’re magnetized they point only to the north. That’s one of those natural laws
we’ve talked about.
Another magnet, or a piece of metal may affect a compass for a few seconds, but the
magnetized needle always returns to face north. People can become magnetized in a
similar way—magnetized by the purpose that they have chosen in life. To be
predictable, you must magnetize your conscience, your brain, and your muscles so
that they constantly revert to the direction of success, no matter the distractions.
When you focus yourself this way and fully support your focus with physical and
spiritual powers, nothing on Earth can stop you from becoming successful.
Magnetic Power
Just imagine what can happen when your life is magnetized by a firm conviction in
what you’re doing. Think how a strong conviction about your goals enhances the
functions of your mind and stimulates all of the other functions of your body. When
you really dedicate your life to its mission, distractions lose their power. Nothing and
no one will have the power to distract you from the north your compass is set on.
But what about those people who have no magnetism? Every little problem causes
their compass needle to spin. Their success, if they have any, is determined by
whoever talked to them in the last five minutes, by whatever they had for breakfast,
or by whichever program they watched on television last night.
Learn The Laws
The power of the laws of success will be lost in your life if you don’t learn which laws
will work for you and then use them accordingly. The golden rule, “do unto others
what you would have them do unto you,” is meaningless if you don’t use it as a
foundation of the laws of success. Your compass will lead you nowhere if you don’t
have the proper direction to begin with.
You must learn all the laws of success—and they are all here in this material. But you
also need to learn the governing laws. If you don’t know that water freezes at 32
degrees, you’re likely to have pipes bursting under your house this winter. Likewise,
even though we keep all the other laws of the universe, we may bring serious
consequences upon ourselves if we do not seek to understand the laws of our own
being.
The most basic of these laws, applicable both in personal development and in business
success, is the law of the harvest. It says that, “as you soweth so also shall you
reap.” All the other laws rest on this single premise. If you keep all the laws of
success and then sow greed, hatred, envy, and dishonestly, you will reap nothing but
the same. It’s as predictable as gravity: If you jump off that chair, you hit the floor;
if you sow misery, you reap misery.
Learn to Sow Success
The law of the harvest is a lot more than that to a person who seeks success. In
essence, the law says, “If you sow success, you shall reap success.” Now that sounds
silly, doesn’t it? If you already have success to sow, you don’t need to sow something
to reap it. If you had your first million dollars already, you wouldn’t need to do
anything to earn it.
Luckily, we can sow success without actually having it first. You see, when you sow
corn, you don’t sow whole ears, you just sow the seeds. And where do you get the
seeds? From somebody who has already had a successful crop, that’s where.
Success seeds work just like corn, and you’ve got a whole batch of good seeds right in front of you. Sow them to reap your success. That’s your first law of success.
Every law of success is a seed that will sprout until you have a whole field full of it.
Then you can reap your harvest and continue the process, because now—guess what?
You’ve got your own seeds, and you can help others plant their crops, and replant
your own for another yield.
When you’ve helped others to succeed in their lives and
their ambitions, that is when you know you have truly succeeded in your life. Nothing
is more satisfying than that feeling of success.
There is no finer vindication of your
efforts than someone else succeeding with your help using your seeds of success, and
that is what we strive for at RE Mentor.
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Listen to real insights for real estate investors from real estate professionals on this week’s Real Insight’s Podcast