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Basic steps when investing in real estate

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Money Talk > Real Estate

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suraja
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Basic steps when investing in real estate  Reply with quote  

1. Find a neighborhood that is stable.

2. Take inventory of the condition of the property.

3. Calculate the time and investment needed to turn the property at a profit and then double it.

4. Negotiate the best price and terms possible with the property owner and your financing source.

5. Once you own a property, immediately put in place your marketing plan to sell the property.

The biggest sticking point most beginning www.travelbie.com investors face is trying to hit a home run with their first project. Instead of purchasing a property that needs a lot of structural changes, go for one that only needs cosmetic changes (i.e. painting and landscaping) and this will allow you to gain experience before moving on to more difficult projects.

Finally, consider finding a property that you can finance over a 15 year period instead of 30 years. By doing this you will cut your cost of capital down by several thousands of dollars and build equity much quicker. This will allow you to move up into more expensive properties faster with much less risk


Last edited by suraja on Thu Sep 17, 2009 4:01 pm; edited 1 time in total
Post Mon Mar 09, 2009 3:01 am
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Zector
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Do the home markets still have growth for flipping homes, or might it be better to rent for a little time untill the home markets rebound? Or by making a plan to sell the property do you mean take into acount rental potential vs sale?
Post Tue Mar 10, 2009 1:23 pm
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samsung123
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Capital Gains  Reply with quote  

You may also benefit by treating it as an installment sale for tax purposes. This allows you to spread out any capital gains taxes that may be due. You do have the option of recognizing the entire gain in the year of the sale if that is more beneficial to you.
Post Wed Mar 11, 2009 6:02 pm
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ukey
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careful when you buy something that requires heavy investment in remodelling your kitchen and bathroom though. Might not pose a big issue, but its additional sunk cost may affect the profit from the property.
Post Thu Mar 12, 2009 10:38 am
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Zector
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Re: Capital Gains  Reply with quote  

quote:
Originally posted by samsung123
You may also benefit by treating it as an installment sale for tax purposes. This allows you to spread out any capital gains taxes that may be due. You do have the option of recognizing the entire gain in the year of the sale if that is more beneficial to you.


Good point. Depending on where you live, by living in the home for a period of time, it becomes your primary residence. Flipping only 1 house per year thats your home, will mean that all the capital gains are tax free.

It means a lot of moving, but after some flipps, you should have one paid off. This could be a good father - son thing or close friend combo to flip a couple homes per year tax free to build some serous capital.
Post Thu Mar 12, 2009 6:59 pm
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coaster
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I have to wonder whether or not this discussion is a sign that the end of this economic mess is in sight. Very Happy

~Tim~
Post Thu Mar 12, 2009 7:24 pm
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Shane Watson
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I am sorry, but I don’t get why I should immediately get ready to sell it? Is it some kind of defensive strategy? In every investment there are some additional costs and I would lose my competitive advantage. Wouldn’t that b a problem for me?
Post Tue May 19, 2009 3:27 pm
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frdsmth9
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One of the most important aspects of real estate investment is to make sure that you get the highest return possible. This means buying properties at the lowest possible price, putting in a minimal amount of money in repairs and upgrades and reselling at the highest price possible. This can be a very delicate balance and will take practice to perfect.

Another important thing to consider when entering the world of real estate investment is how good the housing market is in your area. With today’s economy, many areas have a poor housing market and thus have poor resale value. However, if you have the funds to spare, buying now can result in a higher return when the market rebounds. No one can predict when that is so you need to consider that you may need to hold the house for quite some time.
Post Sun May 24, 2009 5:36 am
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stevegeorge
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Hello

Thanks. Nice tips here. But I want to know If I have three options to Invest something, Which is Safe and Progressive. Real estate, Insurance or Stock Market.

Invest some money In real estate It's really a beneficial for me?
Post Mon May 25, 2009 10:57 am
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Greg Orlando
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Nice informative post. Lots of information. I want to ask one thing, that is the Real Estate business is not always booming it depends on the economic conditions. So what will rational investor do when he/she got money but the economic situation is not that much good to support doing real estate business?
Post Mon May 25, 2009 6:06 pm
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johncena
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Simply purchasing a home and relisting it at a later date is also not advisable. This is especially so if the house was in poor shape when you purchased it. One of the most popular real estate investment strategies today involves flipping homes. This means that you purchase a rundown home that no one wants at a low price, put money into renovations to make the house more appealing and then go on to sell the home for a profit. This can take skill and definitely takes time but it can prove to be the most profitable option.
Post Fri May 29, 2009 8:28 am
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urvi88
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quote:
Originally posted by stevegeorge
Hello

Thanks. Nice tips here. But I want to know If I have three options to Invest something, Which is Safe and Progressive. Real estate, Insurance or Stock Market.

Invest some money In real estate It's really a beneficial for me?



Hello.. according to me insurance is less risky than stock market and real estate. After that real estate is the good option to invest but stock market is very risky so be careful while investing
Post Mon Jun 15, 2009 11:01 am
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weltonmartin
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You can easily get all the information on Real state investing from a site it is
[url removed]..
Post Tue Oct 20, 2009 10:38 am
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Avino
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The best strategy is to buy it outright, no mortgage, rent it out for a few years, invest in maintaining it with its own generated income. Then sell it for a profit or keep it for cash flow.

~A.

Also blogging @ avinos2cents.blogspot.com
Post Tue Oct 20, 2009 3:09 pm
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BillK
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I have a spec home we are sitting on right now. It cost 300k to build and that was with a great deal on the lot on a golf course. 2500 sq ft brick front, whirl pool tubs, wood ceilings, office, sun room and was a featured showcase home. Its value is about 340K.

It is now 3 years old. Since then the bank had us on twenty year P&I and I still owe about 272K on it. With wife getting leukemia I am just trying to get rid of debt. A buyer can get almost 70k equity on a brand new home in a stable neighborhood.

I am sure I am not the only builder hurting. Don't ignore incredible deals on existing new homes built with quality in good neighborhoods.
Post Fri Oct 23, 2009 2:28 am
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