Commercial Real Estate Investment Articles

Okay, I confess. Once in awhile, I do indulge in McDonald’s burgers. And when I order a #1 combo, they always ask me if I want to “supersize” it. The supersize combo gives me more fries and more soda, which may not be good for my health, but always sounds like a good deal when I’m in the drive-through. When we’re buying houses, we can use a similar strategy when working directly with the owner of the house.

“My lawyer told me umbrella insurance is enough to protect me, so I don’t need an LLC.” An ill-advised Real Estate Investor  With lawyers like the above, who needs enemies? Liability insurance does not protect you from legal disputes with tenants, contractors, partners, and others.

How is the government shutdown affecting real estate investing? Those investors who buy and then resell, or flip, properties to retail buyers are the most affected because the shutdown is playing havoc with the loan origination process. And when buyers can’t get their loans funded, deals don’t close and real estate investors can run into cash flow problems

This is the make or break of your short sale proposal.You must set the stage to show the bank why it is in their best interest to take a discount now rather than later. Prove how they will make more money by releasing the lien now rather than going through a costly foreclosure and terrible resell market. Show the bank why they need to discount now.

A “Lonnie Deal” (named after Lonnie Scruggs) is when you buy an older mobile home for a couple thousand dollars, then resell with seller financing for 2,3,4 times more. Often you get all your money back within a few months. After that, it’s pure cash flow.

Our financial markets and country have changed over the past five years (September 2008 – September 2013). But the true magnitude of the financial chaos became apparent to most Americans in September 2008. Beginning in mid-September 2008, Lehman Brothers, Bear Stearns, AIG, Merrill Lynch, and Washington Mutual were part of the largest banking collapse in U.S. history.Since so many of these banks, investment firms, and insurance companies were interconnected by their various forms of mortgage, stock, bond, and derivatives investments, many economists and financial analysts were concerned about bank runs and severe economic depressions even worse than “The Great Depression” (1929 – 1939).

Flipping houses is the creative investing technique of choice for many beginners. For those brand new to the business, it appears to be the best place to get started because it may require little or no money and appears to contain very little risk.

How to Buy Real Estate with No Money Down and No Banks

Use a Master Lease to control the property.If you are investing in an apartment building with the intent of improving and flipping it within a few years, the Master Lease Option may be the way to go.Instead of going under contract, raising the down payment through syndication, and obtaining a large bank loan (which you may have to sign personally), use a Master Lease to control the property, with an option to purchase it at an agreed upon price for a few years. You then sublease to the existing and new tenants for cash flow.When you have the building performing at its peak potential, you can either exercise your option to purchase and resell it through a double closing, or sell your option to a third party for a profit.

In spite of a tough job market, rising consumer goods prices, challenging mortgage loan underwriting guidelines, and numerous trillion dollar bailouts, home prices have been improving quite well across the nation.What happens if and when mortgage loan underwriting guidelines ease up and become much more flexible for borrowers? What happens when more private, non-governmental entities begin to originate loans and/or purchase them in the secon

You may be overpaying in property taxes without knowing it. Property taxes are based on the value assessed by the local Tax Assessor and, in the aftermath of the biggest real estate collapse in recent history, it’s entirely possible that the current assessed value on your real estate is higher than the current market value.

Is all this positive real estate news actually good for investors? Prices are going up, houses are selling faster, and foreclosures are becoming harder to buy. Less distressed housing inventory brings the next challenge for real estate investors–finding and buying cheap houses.

Mortgage interest rates are moving higher in spite of a sluggish U.S. economy. Mortgage interest rates are rising in spite of a sluggish U.S. economy. The 30-year fixed rate recently increased the most in one week since mid-April 1987.  Freddie Mac reported that the average national Fixed Rate Mortgage (FRM) reached near 4.5% as compared with 3.93% in the previous week in mid-June 2013.

“We don’t need to keep score, let’s just have fun today.”  That is exactly what my wife, Cheryl, said when we went golfing recently.

Asset protection is more important now than ever before because there are 82,000 lawsuits filed DAILY with real estate being a BIG target. There are numerous vehicles to protect you – LLCs, trusts, insurance – including combinations of these. 82,000 lawsuits are filed DAILY and real estate is a BIG target. There’s a also very powerful (but overlooked) asset protection technique called “equity stripping.”

You’re about to discover what NOT to do when investing in real estate. So often, creative real estate investors and educators share their positive experiences. But there are a ton of pitfalls in the world of real estate, too. In fact, I would argue that more people fail than succeed in this business.

From 2012 to 2013, residential home prices have continued to increase in value due to a combination of record low mortgage interest rates, very low home listing inventory levels, and an increased demand from individual buyers and large investment group buyers. Commercial real estate (multi-family, industrial, office, and retail) has begun to follow that lead, with multi-family apartment buildings increasing in sales and value the most. In many prime locations, apartment buildings located in prime coastal and/or big city locations are selling for 3% – 5% cap rates. When Net Operating Incomes (NOIs) are divided by much lower cap rates, then the sales prices or appraised values tend to be much higher.

Have you heard the great news about Google? It has the answers to almost everything these days. Put the words “real estate invest” into Google and you receive 128 million results!

Money-saving entity selection and strategies are not based on arbitrary guess work, but on factual data by examining the three sides of an entity – the LEGAL side governed by state law – the TAX side governed by tax law – and the IRS side governed by statistics as to which entities are audited the most or the least.

I do not like to negotiate with sellers–it just doesn’t fit my personality.But I have found one very strong method for getting people to realize the problems with a house without me having to verbalize the problem. This is important because you never know if the owner did the work himself.I told this story at our local REIA and everyone got a big kick out of it.I got a call from one of my ibuyhomes.com radio commercials from a seller who had inherited a property. He said he wanted $30,000, and that looked good enough to get in the car and check out the home.

When it comes to investments, nothing is more powerful than the magic of compound growth. In today’s world of incredibly low savings rates, it’s challenging to find investment options that provide any decent positive net returns after factoring in taxes, inflation, and bank or investment fees.

At some point, every creative real estate investor wonders: Should I get a real estate license? It’s a good question. Unfortunately, this topic is rarely addressed clearly to the creative investing community.

Setting your real estate investing goals is essential to your success in real estate investing. I hope you won’t require convincing of this fact. Setting goals works. Period

In spite of our shaky economy, residential and commercial property values have improved in many parts of the country. Cheap money and easier lender underwriting guidelines are two of the main reasons why property values have appreciated right along with our increasing rates of inflation. Since the Credit Crisis began in the Summer of 2007, both commercial and residential property values have fallen significantly throughout the U.S. Accordingly, property owners are more likely to walk away from their “upside down” properties if their existing mortgage debt exceeds current market value.

More and more creative real estate investors are switching to the individual 401k and loving their new plan.