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How to Start Investing in Real Estate: Beginner's Guide

How to Start Investing in Real Estate: Beginner's Guide
Being a real estate investor is one of the leading wealth creators in the United States so many of us want to know how to become the next great real estate investor. Some have bought books and watched videos on how people have made their fortune in the industry, others have applied what they know to works in their business towards real estate. We have learned over the years that there truly is no better way to learn the real estate industry than simply going and being part of a property management team. PLUS…. you are getting paid to learn!  By being part of a property management team you can learn everything you should know from marketing, maintenance, leasing and operations. When you find a company that you feel is a good fit for you sit down with the management and tell them that you want to learn everything from top to bottom about real estate investing from them and if they seem receptive to your idea then jump in and prepare to learn. We would recommend you start at the bottom and work you way up.  In their leasing department, learn how a vacant unit is prepared for market. Price the unit and then learn how to advertise the unit to the right individuals. After you have spent enough time in leasing look into moving to an assist manager position, while in this position learn the ins and outs of the daily operations of the property and how you can i......
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What Does Barriers to Entry Mean in Commercial Real Estate?

In commercial real estate, an investor can encounter barriers to entry in their investment.  With the competition in the real estate market, the entry of new businesses can bring many challenges. Existing businesses can take advantage of these barriers, such as economies of scale, implementing vertical integrations, and maintaining strong customer loyalty. Let us take a closer look at what those mean and see if they make a better investment. Economies of Scale If the business has been in the area for some time, they are at an advantage. They would have grasped a better understanding of the existing economy. They have learned most of what they need to know to stay on top and be more effective. They can better manage the resources based on the season to save on cost reductions. Other factors can also include their purchasing power from suppliers, whereas newer businesses may have difficulty getting lower prices. They could get better deals even on loan terms based on their existing credit standing.     Vertical Integration Vertical integration is another barrier to entry. These are a combination of two or more businesses operating separately but owned by one entity that complements each other. They could be sports drink businesses that also own the manufacturing plants that bottle the drinks. They may also have several gyms in the community promoting their drinks. A famous example is “McDonald’s,” which owns the properties where their stores operate. For these companies, these integrations reduce their costs and expenses that come with deali......
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Stocks, Bond and Funds Vs. Real Estate- Look Beyond The Numbers

It’s an old debate. Which is better, investing in the stock market or putting your money in real estate?   Years ago when I was a financial advisor at a Wall Street firm, I knew everything, or so I thought. Late nights spent feverishly studying the stock market, staring at charts, reading stacks of annual reports and clinging to the words of Warren Buffet. Mutual funds, stocks, interest rates, bonds, variable annuities, options, even futures, I knew it all…in theory. One cold February day an older, a much wiser silver haired client sat in my office with hands folded across his chest. I gave my mutual fund pitch, rattling off a dozen reasons to buy. His eyes glazed over. I mentioned our top analyst’s stock picks. He yawned. Quietly and patiently he waited. Recognizing his boredom, I wrapped it up. Later a colleague informed me that my wise old client was a well-known real estate investor. He’d accumulated significant holdings spanning decades. He was far wealthier than I presumed, and much smarter than I’ve given credit. Puzzled, I wondered how stodgy old blue-collar apartment buildings had yielded such wealth. Over the years similar clients sat across my desk with the same story. Sometimes it was a sprawling multifamily complex, other times a portfolio of rental houses or a corner retail building, maybe a warehouse near the airport. But the story was similar, real estate accumulated slowly with good tenants, over time paid off and appreciated in value. It was repeated again and again......
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The Top 3 Things Many Investment Plans Omit

The Top 3 Things Many Investment Plans Omit
Real estate investing is a business proposition, even if you’re only buying one small rental property. Property owners need a business plan with some features specific to real estate. Remember to speak to your lender, and include market research and an outline for when to sell. Consider Your Target Audience Your business plan is a sales pitch, and what you’re selling is profit. Your audience is a bank lending agent, so highlight your own experience and introduce your team. List your partner(s), legal representation, financial, contracting and real estate resources, along with brief bios that tell a lender that your team has the experience and dedication to make this investment plan turn a profit. Expand Your Guiding Principles Among your guiding principles should be step-by-step instructions for pre-purchase property research. Think of it as a “how-to” guide for when you or someone on your team might want to cut corners. Set up a system that outlines exactly what due diligence looks like to make sure each and every property you buy is a great investment that meets your current needs. The biggest mistake an investor makes usually comes with a mortgage, so get detailed enough to avoid buying properties that will cost you in the long run. Exit Strategies When you buy a property, you usually know up front if you’ll buy and hold, rehab, or wholesale for more immediate returns. Your business plan exit strategy is a great place to detail some “if, then” scenarios in which you would have no doubt abou......
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Changing Real Estate Investment Trends: Why Investors Are Suddenly Rushing Into Students Housing

Changing Real Estate Investment Trends: Why Investors Are Suddenly Rushing Into Students Housing
A couple of years ago, investing in student housing was only a reserve for investors who had the tenacity to take on the risks associated with student renters. A bulk of property owners increasingly considered this group of tenants substantially riskier compared to regular renters. Recently however, the tables have turned in favor of both students and real estate investors, mostly because student housing is now considered a resilient asset class with the capability to remain profitable even in a depressed macro-economic environment. Interestingly, it’s not just in the US. The trend spreads across other countries, particularly in prime study destinations like Canada and the UK. The State in The U.S. In the U.S, for instance, investors and developers are mostly attracted by the demand trends for U.S. higher education. According to 2015 statistics by the National Center for Education Statistics, there are more than 20.2 million college and university students in the U.S. Although there’s almost a half a million year-over-year decline compared to the 2012 attendance figures, there’s an overall 4.9% increase compared to the same period in the fall of 2000. This population, as predicted, will grow to 24 million by 2022, with the echo boomer generation enrolling in greater numbers, and increased interest in U.S. colleges among international students. These numbers, coupled with the fact that institutions are currently facing funding challenges in expanding on-campus accommodation facilities, has created a great opportunity for private off-campus housing to serve unmet demand. The exceedingly growing college population is providing a stable suppl......
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Why investors should choose Mississippi multifamily housing

b2ap3_thumbnail_Key-hanging-in-a-front-door-lock.jpgMississippi has been churning through a steady growth as other states have struggled to recover in recent years. In some places, jobs are evaporating, and workers are looking for new cities to call home. But the good news is still coming out of Mississippi, where a healthy economy continues to expand and diversify. Investors are taking a second look at this business-friendly state. For the multifamily housing sector, now is a great time to be in Mississippi.   Mississippi creates business-friendly environment Investors should first look at the price of doing business in Mississippi. In the end, the numbers tell the story: Low cost of doing business. The Magnolia State had the second lowest cost of doing business, according to a study by CNBC. Factors in that ranking include data like taxes, utilities, wages and real estate. Low cost of living. Mississippi has the lowest cost of living in the country, according to the same study. Favorable tax rates. The corporate income tax is 5 percent, the 12th lowest in the country. Also, Mississippi ranked No. 6 on the list of tax-friendly states last year by Kiplinger. Low energy rates. Electricity in Mississippi costs less than in most states, according to the S. Energy Information Administration. The state is known for shipbuilding, aerospace and timber, and growth is strong in manufacturing and technology. Mississippi is rich in resources, such as water, timber, oil and gas. Issues like earthquakes, drought and overpopulation are nonexistent. “Mississippi is the complete package,” said Jeff Rent......
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Low End vs Luxury Real Estate: Which is a Better Investment?

Low End vs Luxury Real Estate: Which is a Better Investment?
And now for the big question in many realtors’ minds- where do you stand to make more money- low end or luxury real estate? Typically, low end real estate requires low capital, making it particularly attractive to startups and small time investors. Luxury real estate on the other hand, is only a reserve for big firms with sufficient capital to spend in prime residential and commercial zones. Lately however, even the big firms are looking into the possibility of investing in low end real estate to capitalize on the rather expansive lower middle class market. So, What Exactly Is Low End Real Estate? As we’ve specified, low end real estate mainly targets the lower-middle class market. That alone excludes bombed-out slums, which obviously do not make sense from an investor’s standpoint. This type of real estate therefore, essentially refers to standard starter homes, which are located in second class neighborhoods- not that great, but good and acceptable. Why Low End Real Estate Investment May Make Sense In the US, a bulk of these types of low end houses go for $3000 to $25000, thereby, favoring owner financing and hard cash buyers. As a matter of fact, a significant number of buyers easily secure owner financing, which translates to steady cash-flow for sellers. Low end real estate also wins when it comes to distress auction (foreclosure, tax) sales. According to astudy conducted by RealtyTrac, 12.7% of all home sales in the third quarter of 2014 came from distresses sales and short sales. With a med......
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The Most Profitable Housing Markets in The US

The Most Profitable Housing Markets in The US
Ok, by now we’ve witnessed the strange fluctuations in the United States markets, which have consequently taken real estate investors on a roller coaster ride through the past couple of decades. In the last 40 years alone, markets experienced overheated home prices in some of the country’s primary metropolitan zones, which ultimately suffered a big blow in the post-recession era, forcing a majority of the investors to begin adjusting and adapting to the progressively changing real estate markets. Although the market has since picked up, nothing is guaranteed. You could invest millions of dollars today, only to watch them grow in a snail’s pace thanks to various unfavorable volatile factors. On the other hand however, you could still put in a couple of thousand bucks in the right markets and smile all the way to the bank, as you watch your money grow into millions. Going by recent predictions by industry experts and invest managers, real estate in the US is undoubtedly a safe bet for both sale and rental properties. According to Lawrence Yun, the National Association of Realtors chief economist, existing home sales will experience a rebound in the next couple of years. He revealed this during the 2014 Realtors Conference and Expo, where he also predicted a 4% rise in the national median existing home price. To benefit from this growth, the key is investing in cities currently experiencing a phenomenal job growth, consequently attracting a large number of prospective buyers and tenants. Going by MarketWatch Catey Hill’s observations, this strategy alone could s......
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Green-Certified Multifamily Sees Fannie Mae Drop Rates

Green-Certified Multifamily Sees Fannie Mae Drop Rates
Fannie Mae proclaimed their commitment to a more eco-friendly and green multifamily industry by announcing in February that they will be offering special, discounted or lower interest rates on any of the loans they make to any certified energy-efficient multifamily properties. The idea of offering deep discounts to property owners who are willing to improve their properties’ energy performance doesn’t just make for a more sound investment in our future; this move is also designed to see the overall quality and affordability of these multifamily properties improve in the long run. Fannie has agreed to lower the interest rates on any loans they make that either refinances, acquires, or is made as a supplemental multifamily mortgage loan on any qualifying green property by 10 basis points. Fannie’s new program is designed to push multifamily builders and investors to seek more energy efficient alternatives for their new and existing projects. This push is seen as a much needed incentive for decision makers who might be on the fence about building or converting over to green energy and efficiencies. This comes at a time when gaining green certification means becoming eligible for a number of green funding opportunities and a variety of rebate programs designed to help balance the additional costs of executing any new energy conversions. Because of this cost offset – which can sometimes equal the total cost of the conversion - more commercial investors and owners are choosing to gain Energy Star, LEED, and/or one of the other certifications available for ene......
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Show Them the Love!

Show Them the Love!
Most people know that having good employees can make or break any organization. To top it off, high employee turnover can be one of the hardest things to overcome and deal with. It may seem that our best leave and our worst stay. If funds are limited, what can we do to increase our likelihood of keeping or creating those rock stars that make everything tick? Training is one of those ways. Investing in our teams by helping them to develop their skills can be so powerful. There is nothing like additional training to boost performance, build skills and show our team members that we really care about their success. Because let’s face it, few employers have ever really become successful without the help of a few good men and women. Creating learning opportunities for our teams might sound like an expensive proposition, and it can be. But truth be told, it doesn’t have to be. Here are a few ideas that can help encourage your team to learn and develop while keeping your budgets in check. First, ask each team member what their goals are. Not just for their current job, but for their life. Find ways that you can help them towards those goals even if it means they will leave you. One example might be that if a team member wants to learn a new software program that will help them to do graphics, give them the opportunity by investing in online training (inexpensive if done through a service like Lynda.com). Maybe thi......
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