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.
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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.
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.
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.
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.
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.
There are three ways to determine the value of an apartment building:
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.
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.
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.
Almost 70% of all households in the U.S. own pets. Charge Fido a small fee and you won't be isolating a large population that could become your tenants, and also the same tenants would love to pay for a convenience upgrade like a pet-sitting or dog walking feature.
Here's a win-win. Set up storage units on the property that a tenant can rent at-will. That way they are not violating their lease and any fire codes by over-stuffing their unit with their keepsakes, toy collections, or seven extra coaches they found on Amazon, or whatever they click-bought yesterday.
Make life a little easier? Sold. Occupied. Laundry services, dry-cleaning, UPS Dropbox, Netflix subscriptions, free WiFi… Pick one or invent your own. Small conveniences go a long way to make a tenant's life even smoother.
Need more ways to increase income? Check this out.
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.
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.
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.
You’ve worked hard, you’ve established yourself. Over time, real estate values have consistently proven that they will go up. We feel one of the safest investments you can make is putting your money in real estate. One of the largest benefits of Multi Family real estate is it gives you cash flow while it appreciates.
When you secure a property, always hire a good quality management company to run it and you can continue to invest in other properties… or enjoy your life in any way you choose. Whether you are traveling the globe or just sitting at home, your management company oversees the day-to-day operations of your investment… delegation is the key to happiness.
Institutional investors understand the power of emerging markets. In fact, MIT offers a course specifically surrounding markets that explode with appreciation. Be sure you study this critical element to success.
Value add properties definitely look less attractive, but that is exactly why they yield a higher return and increase cash flow.
Small properties are good for beginning investors. You’ve earned the status you enjoy today. Larger properties will bring you larger returns with less risk, that’s the irony, but you already know this.
If you are just beginning, get educated, take action, take calculated risks, get the confidence of having your first deal under your belt, and then watch your portfolio grow.
You use systems in your day-to-day life and business; it only makes sense that you should use them in your real estate investing, too. Proven systems bring you proven results and get you to your goals faster.