What is the best way to make money investing in real estate? Ideally they would be need to be deals that are less than $75k. Should I buy foreclosures or get a loan from the bank? Do I flip the property, or buy it and rent it out?
Note: I am not clear on the background (time commitments, risk tolerance etc.) of the OP. Hence, I will provide a generic answer. Here it goes:There is no "best way" to make money in Real Estate. Here's a simple analogy to help you understand.What you are asking is like walking into a Chinese buffet for lunch and asking "Which item in the buffet will fill you up?" Answer: Everything will fill you up.It depends on your preferences, and whether you are vegetarian, whether you are allergic, how full you already are, and so on.In real estate, everything makes you money. Also everything makes you losses. Here's the secret to making money in real estate. Learn one or two strategies and get good at them. Get really good at them. And you will make money.Typically, these are the 4 constraints that will impact your ability to decide on a strategy.1. Knowledge - The how tos and the art of investing. Includes underwriting, analysis, negotiation, finding deals and so on. It's about knowing what deals to NOT do, that will impact your ability to make money in the long run. E.g. when flipping, you need to buy a property max at 70-75% of its After Repair Value (ARV). Else, you will likely break even or not make any money.2. Capital - How much capital you have access to. You will approach real estate differently if you have $1 million cash versus $10,000 cash in your bank account.3. Time - How much time you can allocate to investing will determine the type of deals you can find and do. With time on your hands, you can find your own deals and maximize your returns. If you have a family and busy with life, find realtors or wholesalers, give them your investing criteria, and they will find deals for you to invest in. However, there is an expense associated with using middle men. Your returns will be lower.4. Risk tolerance - Short term risk, long term risk, do you need to make money tomorrow or are you ok with waiting 10 years?Finally, here's the pros and cons of a number of investing methods from my experience. I have written these in increasing order of capital (money) required since capital is the biggest constraints for most new investors.1. Wholesaling: You are finding an undervalued deal. E.g. you find a $100k property and negotiate with seller and get it under contract for $80k. Before the deal closes, you sell the contract to another investor for $85k, and pocket $5k at closing. You do not get to own properties. You need to be a hustler.Knowledge required: HighCapital: Low ($3-5k only)Time Commitment: High Risk: Very lowPros- Gets your feet wet in Real Estate. And make risk free moneyCons- Not a consistent source of income, you don't get to build long term wealth, not passive income.2. Creative investing: Doing funky things with real estate finance. Such as buying on terms, vendor take backs, mortgage wraps, rent to own and so on. This is one of the most lucrative ways to invest in Real estate. You become owner of properties with little money down. And you build long term wealth.Knowledge required: Very HighCapital: Low-MedTime commitment: HighRisk: depends on how the deal is being structured / financed3. Flipping - You buy run down properties, and flip them for a profit. You make large chunks of cash when you are able to fix up and sell property. I don't have a construction background so I always partner with contractor buddies for these deals.Knowledge required: Low-medium (one excel sheet is all you need with some rules of thumb. Look at the flipping calculator on bigger pockets.www.Biggerpockets.com)Capital: Med-HighTime commitment: MedRisk: Medium-High4. Buy and hold: You buy rental property and hold on to it. What I have heard from realtor friends is that the wealthiest people they know are buy and hold investors. You are leveraging the banks money and making money on appreciation in the long term. Prep for a 15-20 year hold. You can always refinance and cash out periodically. However, you have to be OK with vacancy periods, tenant headaches and market downturns.Always strive to buy cash flowing offmarket properties. These will typically not be on MLS. (Sorry for the realtors who might disagree - but I am YET to buy a property on MLS which has made me money)Knowledge required: Low-MedCapital: HighTime commitment: LowRisk: Short term risks are high. Over the long term, the risks are low5. Foreclosures - Quite lucrative in the US. Not so much in Canada. Key is to find the foreclosures in excellent areas of town. Low crimes, good schools etc.Knowledge required: Low-MedCapital: Med-HighTime commitment: MedRisk: Short term risks are high. Over the long term, the risks are low.Disclaimer: Some of the creative techniques may or may not be possible depending on the laws in your state or country.
What makes a good real estate agent?
Great question: how about I approach this question what makes a good agent from a different angle: breaking the bad habits before creating good ones!A never-to-do list for successful real estate agents, if you will!It’s a fact that most real estate agents are not successful.Statistics indicate that only 20% of agents are doing 80% of the deals. Yes, read those numbers again!In other words, with 80% of the agents fighting over 20% of the business, it’s no real surprise there’s such a high agent turnover!How do the newbie agents stack the odds in their favor?Besides the importance of selecting the right brokerage to work for, the necessary continuing training, ongoing sharpening of the communication as well as negotiation skills and a healthy dose of ambition, there are a number of less obvious attributes a starting real estate agent must pay attention to!Here are 10 things you’ll probably never see successful real estate agents do:1. Successful real estate agents never avoid confrontationsThe daily agenda of a real estate agent is filled with confrontations in all shapes and forms: whether it be a listing or mandate presentation, contract negotiation, or price counselling, to name but a few, the agent is likely to face opposition.Exactly why great verbal skills will come in very handy!Moments of discomfort are a given during confrontations where silent moments can be used very strategically. Successful real estate agents tend to show no fear of loss during these confrontations.Negotiation is a skill that can be taught. Effective negotiation demands an understanding of both parties’ wants and needs, remaining flexible with a number of options, foreseeing (counter)offers and using the power of persuasion to encourage clients to respond to offers.Successful real estate agents know that confrontation is part of their daily life. Instead of wasting valuable energy and time trying to ‘wing it’ or worse, trying to avoid it, they actually go out of their way by honing their skill set. Hopefully, during the next confrontation, they’ll then be better prepared!One will need to learn to embrace confrontation. Sometimes it’s as simple as actually asking the question!Most agents thrive on it as they see it as yet another challenge to overcome before reaching that final stage: the sale!2. Successful real estate agents never assume perfect circumstancesThe old adage goes, “If it were easy, everyone would do it.”That’s ever so true when it comes to selling real estate. Arriving in a top class car, getting out dressed up in that designer suit, fly through the contract signing without much objection and voilà! It does appear very easy work to take one client through, sign a contract and che-ching the commission!It couldn’t be further from the truth! Even though the overall basics might appear to be the same, there’s no cookie-cutting method, as each buyer and seller will have their own specific circumstance which presents its own challenges that need custom attention. Successful real estate agents know that every single close will be unique.No two deals are alike! Ever!Are we in a buyers’ market? Or is it a sellers’ market? Does it really make a difference, either situation has particular conditions that aren’t perfect. Just look at MacGyver (yes, I’m revealing my age now), and see how he makes the best of every situation. He’s acting with the information at hand and keeps moving forward!Approach every circumstance with the right perspective and don’t assume perfection! Successful real estate agents can differentiate between pains of growing and pains of suffering.3. Successful real estate agents never fall behind the curveIt comes down to one thing: education.Whether one is referring to reading the latest (e-)books, magazines, articles on real estate-related topics, real estate seminars or checking up on the latest technological gadgets and web tools, successful real estate agents realize this is a continuous learning process and that one needs to stay current on the latest technology. And yes, this sometimes means stepping out of your comfort zone!Technology has become a major part in most areas of our lives. Just imagine what would happen to your business if you hung on to the fax machine and refused to work via email?! Or how about waiting for those leads calling from those newspaper ads versus social media leads nowadays?Contrary to popular belief, all these ever-improving tech tools are not narrowing the competency gap between real estate agents, but actually widening it instead! Successful real estate agents know the enormous importance of staying ahead of the curve!Would it be a bold statement to say that by 2020, the Top Performing 5% of real estate agents will consist of 80% agents who have been in the business for less than 5 years?4. Successful real estate agents never forget it is a team effortUnlike what’s being portrayed in shows like Million Dollar Listing New York, most successful real estate agents aren’t looking for the limelight on their special real estate deal du jour.Once estate agents are too busy servicing their current listing mandates to take on new business, it’s time to expand the team. If they’re already working in a partnership, hiring an assistant is likely the first port-of-call.Being surrounded by a well-oiled team makes successful real estate agents even more efficient! They give other people credit for their work and shine the light on their team members. They’re great at letting go and spreading the weight among others. Trusting and believing in one’s teamwork ethic as much as their own.Successful real estate agents know they can’t be doing everything themselves and acknowledge that delegating and outsourcing less (or no) income-producing activities will free up valuable time.5. Successful real estate agents never get jealous or resentfulIn large brokerage offices, the competition can be quite fierce amongst its agents. Successful real estate agents rise above the day-to-day office rumors and get on with their work.Why bother hiding from those slightly better agents? Learn from them! Soak up their knowledge.All that negative energy is too emotionally draining anyway and is much better spent on your own work than resenting the behaviors or actions of others!6. Successful real estate agents never waste anyone’s timeAs busy as most successful real estate agents are and how often their schedules change at a moment’s notice, they don’t break a commitment. They might postpone a meeting on you but cancelling won’t happen.Face to face time is never a lost opportunity to interact with clients.That’s their way of earning respect and building credibility.The best way to give back would be to mentor a starting real estate agent. Nothing more exciting than handing over some fun/creative assignments and letting them run with it! New talent will rise and eventually assist in putting together important projects.In the background, successful real estate agents are checking off an extensive list of rather boring assignments, because when you do what nobody else wants to do, you’ve become indispensable!7. Successful real estate agents never lose track of the bigger pictureSome mistakes were perhaps plainly bad calls and/or even very expensive lessons. Whatever may be the case, one needs to see them as opportunities to learn something new.Why are the successful real estate agents so knowledgeable? They know the price of their mistakes and don’t plan on making them again!Working in teams will bring with it frictions at times, but that’s part of the learning! Successful real estate agents focus on the bigger picture and are quick to point out that those teething problems are stages one needs to cross onto the next big phase.8. Successful real estate agents never skimp on marketingAre most new real estate agents aware that the toughest part of the business is finding the business?Having paid all the license fees, board dues, starter kits etc, the last thing they’re thinking of at this point is spending more money on marketing!Unfortunately, it doesn’t work that way. As in any other business, it takes money to make money or the amount spent on marketing will be in direct proportion to the amount of business you’ll see. As if it wasn’t already tough until now, the marketing efforts need to be properly focused.How easy is it to spend it on the wrong tools, such as traditional print marketing (weekly newspaper, monthly real estate magazine etc), which have a very low return on investment. The brokerage office itself can do so as it promotes its current stock inventory, as well as draws in new buyer lead for its agents.Successful real estate agents are quick on the mark in getting their name out as the person to contact to buy or sell from the get-go! As their financial means improve, they make sure to reinvest in marketing themselves.9. Successful real estate agents never say that something isn’t in their job descriptionWhen you arrive nicely on time at your Sunday open house and realize that the floor needs a good mopping, what are the odds you’ll quickly do it? Or the kitchen sink is still filled with dishes – will you make an attempt at cleaning it up?Just because one’s job description didn’t mention anything about the above doesn’t mean it isn’t part of your job! As basic as it may appear at times, successful real estate agents aren’t lonely wolves. They’ll find opportunities to be useful and add value!Only when an entire team understands and empathizes in such situations, will it result in people feeling appreciated and being excited in the morning getting ready to work!10. Successful real estate agents never forget it’s all about doing the basicsHow many agents started in the real estate business thinking they’ll have two lives: a personal and professional one?Guess what? It’s one and the same!People don’t just want to see your emails. They want to see you work. They like to put a voice and face on that business card you dropped off at their home earlier in the week.Successful real estate agents know that 20 years of experience is just Year One repeated 20 times! Non-stop time to learn, time to adapt and time to get comfortable with the newest tools and technology. Planning is a big portion of that and it being a business, it’ll require you to put together a detailed business plan with medium-term targets, short-term goals etc!Benjamin Franklin supposedly once said, “If you fail to plan, you’re planning to fail.”Consistently and pro-actively lead-generating is a must, even for experienced agents. They can’t just get busy servicing existing clients until all those transactions are closed before starting to look for new business. They will actually block time for a few hours every day to prospect for new clients!The key is to decide on a system that works for you and stick to it. Real estate truly is a numbers game!An average estate agent and a successful one differ in the way they view their customers. The former will be focused on getting that one commission cheque in, while the latter will be aiming for repeat or pipeline business.Make a client happy and they’ll come back again and again. Make a client very happy and they’ll be an ambassador for you to their friends and family!Having covered the basics correctly, successful real estate agents know more (referral) business will come their way. All it takes is a handful of years in the business to start seeing people call back for your services!Closing thoughtsMistakes will be made along the way, regardless of your level of experience. As a newer real estate agent, this never-to-dolist will hopefully save you a lot of time, sweat, money and frustration.If you agree with what we spoke about above and follow what these successful real estate agents never do, you’re a big step closer on the road to success to becoming a successful real estate agent yourself!I hope this different angle of answering your question was a helpful one.Good luck
How can you tell whether someone is smarter than you?
I reproduce a recent blog post of mine on this topic:They don’t talk as much as you, because they know they got smart by listening.They know lots of things other than what they’re specialised in. Theirs is the gift of a broad mind, constantly fed with the stimulant of being interested in what everyone else is doing.They juggle home, work and personal interests with dexterity and never fall back on the tired old refrain about “work life balance”. And when they’re juggling, they somehow manage to seem 100% engaged with what they’re doing, on all fronts simultaneously, even though you know they’re taking appropriate steps behind the scenes to make sure their lives are perfectly, serenely balanced.They probably do social media. Not always, but probably. It is not only another chance to listen, but one they use to ensure they can feed their brains with things they otherwise wouldn’t have come across.Even when things go very badly wrong, they’ll be smiling. Smart people never get ruffled because their smart brains present them with alternatives faster than the bad stuff can happen.They know they are usually the smartest person in the room, but they don’t spend their time dwelling on that. Instead, they take it as a personal challenge to see if they can make everyone else the smartest person in the room too.If they are managers, they will make every effort to get people smarter, more connected and more popular than them in their teams. They’re not threatened because they know that smartness is synergistic. They also make sure that their smart people get to look smarter than them for the same reason.They have hidden skills that never get rolled out until they’re needed. They don’t have any need to show their full capabilities for reasons of proving they’re better than others. They may or may not have expensive educations. You’d never know, just by being with them unless you had their CV in front of you.They never, ever, under any circumstances, make you look stupid, even though it would be easy to do so. They’ve learnt through bitter experience that the only thing that happens when you make someone look bad is you look bad yourself.My intent was slightly humorous at the time I wrote this.From:http://innovatorinside.com/2010/...
What will it cost a buyer to get out of a real estate contract?
Get advice from a lawyer.There are consumer laws that give time to change your mind, however, there is much of the process that don't. The first thing you will owe directly andor indirectly will be the ENORMOUS commission of the marketing & advertising agent for real estate, aka. “the real estate agent”. This list could go on and on… get advice from a lawyer.Best of luck.
How likely is it for me to win a lawsuit where a seller wants to back out of a signed commercial real estate offer/contract?
Obligatory legalese: I’m not a lawyer and you should consult one for legal advice.Generally speaking, if you have performed as specified in the contract, including putting in deposit, removing any applicable contingencies, and informing seller of your intent to close, then I think you have a pretty good case.However, in practical terms, it’s not clear if you should go to court. Lawyers are expensive and, depending on the contract and the state you’re in, you may not be able to get back your expenses, even if you win. And any case, even a winning one, is going to take a long time to complete, is it really worth your time and aggravation?
How can I get out of a real estate contract when I priced the property too low and really feel it is a mistake to sell it?
Number one thing is to step back and think objectively talking to your listing agent. Hopefully, you did use an experienced Realtor to help you set the price. If a home is priced correctly, you should expect to have interest and offers early. You may have to wait a while before you get another similar offer. When a home first goes on the market, you get both the people who’ve been looking for possibly weeks or more plus new buyers just starting.If you truly want to get out of the contract talk to a real estate attorney. As a seller contracts really don’t give you much out unless a buyer defaults. If this your homesteaded home, you may be able to avoid being forced to sell but could be held liable for buyers costs and possibly damages. Your home may even be held up from being sold to someone else. If you have a listing agreement, you may be responsible for commissions.Think carefully, then talk to an attorney.
As a real estate professional I need a software other than Adobe to easily fill in text, sign and send contracts. So which?
If you are looking for software that will allow you to complete details in contracts and request signatures from clients (even multiple parties) try FileInvite - File Requests, Document Collection on Autopilot!It’s a great way to manage the flow of documents and access to property files (titles, building inspections, LIM, HOA details etc) .We help thousands of companies and individuals to manage the collection of sensitive documents through our cloud based platform. You can choose to store them on Dropbox, Google Drive, Box, OneDrive or your own preferred storage platform.
How will blockchain change real estate contracts?
Blockchain is gradually taking over the business world by storm. After cryptocurrency success, blockchain is making its way into other industries like healthcare, real estate, finance, gaming, social media, and so on.The unprecedented rise of cryptocurrencies in the last decade has paved a path for various industry verticals. Using the attributes of blockchain like transparency, immutability, and decentralization, those industries are enhancing their financial transactions and operations. And thus, eradicating complexities from the most fundamental day-to-day operations.The innovative concept of blockchain is significantly reaching the masses. It is steadily impacting various areas of life, including the complex real estate landscape.For instance, issues like lack of transparency and data redundancy in the rental agreements’ processes require immediate changes.Considering the daily dealings of real estate companies with contracts, “smart contracts” were need of the hour and indeed, a much-awaited breakthrough.However, interestingly, a computer scientist named Nick Szabo conceived the concept of digital contracts over 20 years ago.Read full story here: Blockchain Based Smart Contracts: A Breakthrough in Real Estate