I know by now you might be a little perplexed by the title but do not worry as it will all be clear in the end. First, let’s start by a quick question: Let’s say that your bank representative called you one day and told you that if you opened a savings account in the bank today, they would put $20,000 in it with the stipulation that you couldn’t touch it for 2-5 years. Would you take that deal? In a heartbeat, right?

Well, buying a home right is in a way the same proposition as the pretend example above. “Right” being the absolute operative word in that sentence. “Buying right” simply means buying a property below its true market value. Some of the reasons why a property may be below market value is as a result of a distress situation such as divorce or pending foreclosure. Other reasons may be the need for repairs or imminent job transfer. In other words, any time the seller of the home (be that an individual or an institution like a bank or HUD) must liquidate the home quick and will take a lesser price than the true market value of the property it is a good opportunity to buy a property right.

What happens when you do buy a property right and what does that have to do with savings accounts? Take the following example for instance: If you purchase a property that is worth $200,000 for $180,000, you are in effect realizing an equity gain of $20,000. Put simply, you just made $20,000 with the stipulation that you cannot touch it until you sell the home later. In that context, this home that you just bought is serving as a locked savings account the money in which you earned by simply making a smart purchase decision. In addition to the instant equity, you also gain the benefits of home value appreciation for every year you own the home. Most importantly, if you stay in the home as your primary residence for two years or more, you can avoid paying taxes on up to $500,000 of profit depending on your marital status. How about that: Instant Equity, Value Appreciation and No Taxes! Sounds pretty good to me.

Properly timing the sale of your home could mean tens of thousands of extra dollars in your pockets. Real estate, like many industries has cyclical periods that could have serious effects on buyers and sellers. As strange as it may sound, you can approach the real estate market like a farmer would consider his activities.

We can very easily identify the 4 seasons of spring, summer fall and winter in real estate. Lets use an investment property as an example and assuming that you want to be in the game for a long period of time.

A farmer would typically plant in the spring and harvest in the fall. Plan in the winter and tend in the summer. So how does this relate to real estate?

Real estate cycles don’t necessarily reflect the temperature outside or a particular calendar month. It illustrates the fact that prices don’t go up in a linear motion and there are months or years when prices increase more or less.

Just like a farmer would read books and educate himself about different products in the winter a real estate investor’s job is to take courses, learn new strategies, etc. when prices aren’t increasing at all.

When real estate prices start to rise, investors need to start purchasing or planting their seeds as a farmer would do the same.

Summer is the best cycle to be in either as a farmer or as an investor. When prices are still continuing to grow we need to look after our real estate portfolios. Sometimes we have to complete smaller renovations at our properties, find new tenants etc. At the end of the day our whole purpose is to manage our investments and make sure that our investment will be in great shape for harvest when it’s time to sell.

Fall, this is the most exciting time out of all 4 seasons. Lets rake in the profits! If you are a wine lover, you know that the sweetest wine comes from a late harvest. However the people producing the wine are sometimes risking all year’s work in case of an early frost. To determine the best time to sell, you really need to be on top of your game. I always recommend selling before everyone else does. Never wait to get out at the very top, leave something on the table for someone else to be greedy. To determine when it is the right time to sell, you need to be able to do your own due diligence about what’s driving the real estate industry.

Far too often, we listen to daily news and we only base our decisions on the short term outlook. Not that long ago, I read a newspaper article about our former Premier, Ralph Klein. In that article I was surprised to find out that he never reads the newspaper because he doesn’t care much about the daily news. He rather do his own research from an independent source who has no interest in providing bios information.

What if you aren’t looking at real estate as an investment? Rather you just want to decide what is the best time to sell your principal residence?

July, August, December and early January are usually the best times to buy. The reasons have to do with prices softening during these months and less buyers to compete with as most have taken a break from the market to go on vacation or they have committed themselves to some family time with holidays or recently succeeded in buying their home in the spring or fall.

Another reason these months can be good for buying pertains to the cycle of price increases–often in September (the fall market) and early spring (the spring market) the prices go up in our appreciating market. Just waiting an extra few weeks at certain times such as mid-August or early January can cost one 5-10% on their home purchase. Paying tens of thousand of dollars extra is an insane amount of money for waiting a few weeks longer for what one was planning on doing anyway when it was more convenient just because you waited an extra month.

Usually the increase in the fall is less than the one in the spring but several percent on a $500,000 house is very significant. If one is going to buy… it’s non-sense to do it several weeks late and spending $10,000s of extra for the same property. In the fall the buyers come back to the market again as they get into their routines–kids going to school, working, vacation planning and a whole new set of buyers that are just starting with the hopes of being in a new home by the end of the year.

For sellers, the worst time of the year to sell are the months listed above that are the best time for buyers to purchase. Sellers listing in July/August/late Nov/Dec/Jan/early February are not going to get the highest dollar for their house. List at the time the demand is highest and when inventory takes a dip.

It pays off to think ahead a little bit and plan your moves in advance. Remember, just like a farmer knows when to spend time to educate himself, plant the seed and bring in the harvest. If you do the same, chances are good that you will maximize your profit.

Are you considering getting involved in commercial real estate investing as a career? If so, then there are some things that you are going to want to learn how to avoid. You’ll want to try to avoid the common mistakes and you’ll also want to be sure that you know the important things to do when you are involved in commercial real estate investing. Sure, more than likely you still may make a few mistakes along the way, but the more you learn about investing, the more likely you will be to avoid all of those common mistakes.

Things to Do

When you are involved in commercial real estate investing, there are some things that you will need to remember to do all the time. The following are a few of the things you need to remember to do when you start investing in commercial real estate.

Always Investigate the Deal – Before you close a commercial real estate deal, it is important that you take the time to investigate the deal. This will mean that you have to take the time to do due diligence on any piece of property that you consider investing in. Never think that you can get by without doing your due diligence, or you may end up on the wrong end of a bad deal.

Learn From the Mistakes of Others – No doubt you want to avoid making mistakes yourself when you are involved in commercial real estate investing, so be sure that you learn from the mistakes of other people. When you see another investor do something wrong, remember it and learn from it so you avoid making the same mistake.

Learn from Bad Experiences – If you do make a mistake, which is very possible when you first get started, make sure that you learn from your bad experience so that the experience was not in vain.

Know How Long You Can Wait for a Payout – You will also need to be sure that you know how long you are going to be able to wait before you actually get a payout on the investment you make. Make sure you have a realistic estimate on how long you can really wait, or you may end up having problems.

Common Mistakes to Avoid

Of course while there are many things that you need to remember to do when you get involved in commercial real estate investing, there are also some common mistakes that you will want to learn about so you can avoid them. The following are some of the most common mistakes that commercial real estate investors make. Learn them well so you can avoid making them yourself.

Mistake #1 – Ignoring Market Conditions in Your Area – One of the biggest mistakes that can be made in commercial real estate investing in ignoring the local market conditions. Even if you invest in a great property, if you do it in a bad market, then you can really lose money. However, on the other hand, even a bad property in the right market can really make you money as well.

Mistake #2 – Not Doing Proper Due Diligence – Another common mistake that some people make when they are involved in commercial real estate investing, is not taking the time to do proper due diligence. Usually it is best to hire professionals to help you with this job, since it can end up being more expensive if you try to do it on your own and you do it the wrong way.

Mistake #3 – Borrowing Too Much – If you really want to end up in a disaster, borrowing too much money is a mistake that will definitely lead you right there. You should never borrow too much money unless you are sure you will have the capital to pay it off. Remember that when you invest, you at least need to break even, or you’ll lose money. Of course the goal is to be sure that you actually make money on the investment.

Mistake #4 – Not Having Good Exit Strategies – Too many people have found out the hard way that you must have good exit strategies when involved in commercial real estate investing. Be sure that you have strategies for exiting in a variety of different situations. Without multiple exit strategies, you may end up stuck in a deal that you don’t really want.

Mistake #5 – Dealing with Bad Partners – While in many cases the deal or the property can be the problem, in other cases, a bad partner can actually be the problem. If you get involved with a bad partner, it can mean disaster for your commercial real estate deal. In some cases you may just want to get out of the partnership as soon as possible.

Mistake #6 – Taking Risks that are Too High – It is actually possible to take a risk that is too high, which is called overreaching. Going for the big deals too soon can also be a huge mistake. Sure, at some point the big deals will probably come to you, be sure that you don’t overreach towards them and end up in trouble.

Mistake #7 – Having More Land Than Cash – Many investors have found themselves making the mistake of having more land than they have cash to actually cover. If you have many properties at one time and you’re trying to use the gains you get for one to cover what you are losing on another, then you may never get out of this cycle. Get rid of problem properties immediately, even it if seems difficult to do. Then, take your time and focus on the properties that will allow you to make the maximum amount of profit.

All of these mistakes are very common. Hopefully you can learn from them so you avoid making them yourself. However, it is important that you remember that even if you accidentally make a mistake and get involved in a bad investment, there will be ways that you can bounce back and learn from those mistakes in the future.

Now that the national housing market has hit a bit of slump, you don’t hear about them as much in media’s feature stories but I remember about six months ago when every other day CNN Money was covering some new concept real estate company that was slashing commission rates and how it all was going to mean the end of the classic model of real estate commission system.

I remember, because it was around that time that after three years in real estate, I had gotten my brokerage license and had setup my own real estate firm. The concept of reinventing the wheel sounded awfully attractive especially since we were trying to find our own little niche in the real estate world. And what better position to be in than to provide full service real estate for a mere fraction of the cost? Who wouldn’t want that, right?

Actually not very many people. I understood later why. The cost of selling the home to the home owner is secondary to the actual sale of the home. In other words, the sellers cares more about whether their home will sell versus how much it will cost them to sell it. Discount real estate companies have had good success in hot markets where properties virtually sell themselves like California and Florida. But in the middle class America, real estate remains a trust based business and although counterintuitive, lower priced services are usually deemed to be less trustworthy.

For instance, when we first started the company as a discount real estate firm I had this “brilliant” idea about how I was going to offer to sell about 30 homes for absolutely free. The plan was to get enough exposure of the homes I was selling for free to make up for the effort. Would you believe it that people would simply not want to do it? They didn’t want to sell their home for free. The low cost (or in this case, no cost) idea has a “too good to be true” appeal to it that makes it seem shady even when sincere to begin with.

I think the real estate classic system will hold up for quite some time if not ever.

Real estate is just like any other discipline. Most of us immediately would understand this. You must spend some time and effort to become good at it anything. However in today society full of quick fixes it is so easy to fall pray to something that we know is just too good to be true.

I am an investing real estate broker. I do my share of investing for myself but I also handle a pool of local investors that are active in my local market.

Every so often, more often than I could care for, I come across that “newbee” investor. I always smile and my heart goes out to them. I also started with the big dreams and goals. I did order the tapes and the books. I got my $500.00 worth of education when I started. I think there is something that most books, tapes and seminars miss or do not emphasize enough.

One thing is to learn all the theories and techniques the book, tapes and seminars teach. That is all great and good. The other is where the rubber meets the road. The Action part.

There is one little thing that most new investors do not know or choose not to do. Again, books can tell you to do this. Show you the reason behind doing it. Give you examples of how it might work, etc. What are we talking about? Exactly that!

It is necessary for you to actually go out and talk to the people. Talk to the sellers. Talk to the buyers. Talk to realtors. Talk to pretty much every one in this business.

What do you want to talk to them about? I have learn that the more ignorant you sound and actually make them believe that you are, the more results one is going to get. I have learned the hard way to let go of all my knowledge in front of people. People are people. They have their one issues and their one stuff that you and I will never get to fix. So leave that to their doctors and let them fix it.

You and I are in the business of doing something with real estate. We can’t get in to that business unless we make certain that we have our people skills right down packed. People skills are natural to some people.

My wife is the perfect example of that. She can get pretty much anything out of anyone. It is a natural thing for her. Maybe that is why she got me!!

When ever I can, I take her with me to do my talking for me. Something that I have learned to do is to shut that voice inside of me whenever I am in front of someone I want to do business with. I force myself to just listen and listen very well before I talk. The next thing that one must do is to feed back to them what they have given to you. This is critical. It is the step that most forget. One has to learn from other professionals and apply it to one business. In this step you want to behave like a Doctor or an Attorney.

What I mean is that you have to tell them back what you have just listened to, but you have to change it a bit and put it in your own words. What would this do? It is going to make sure that everyone is on the same page. And if you missed something then it will give the chance for the other person to clarify what is missing.

The danger in this critical step is to start to argue with the other person about what you are saying and what you thought that they said. Always be careful about that. At this point is not about winning an argument (you said I said stuff) is about understanding. Once you get a clear understanding about their needs and repeat them back to the other person, tell them your needs and watch how they are more open to them.

Intelligent use of real estate can enable ordinary people to become millionaires in about 10 years or less.

A lot of statisticians say that on average across the board, property has doubled on average every 7 to 10 years in the last 146 years in Australia, this has happened in many other countries also. This statistic depends on location, quality of property and the price you pay for it of course.

How you can use property to create wealth

For instance, Bill and Mary are earning $50,000 a year and they want to replace their income. I am going to suggest that just by buying two investment properties, they could achieve this. Let us look at how they can buy two investment properties for them to retire. $50,000 a year is approximately $35,000 per year after tax. So would you be committed to buying 2 properties in the next decade if you could retire from them?

In year 1 of the plan, we are going to buy one property. The properties I tend to buy are often around $300,000, which we will use for this strategy. The second year we do not buy any property and the third year we buy our second property. In ten years time, these properties could be worth $600,000. That is 10 years after you buy them. (Always make your plans conservative as it could take 10 years or longer.) I generally buy properties in capital cities because these properties will continue to grow.

If the property doubles in 10 years, this is $300,000 in extra money we have made over 10 years per property, i.e., $300,000 each, now worth $600,000. You have earned $300,000 from capital growth. Bill and Mary need $35,000 a year net to replace their current incomes. They are probably thinking if they buy the property, they have to work harder. If they buy and sell to make a profit, they generally have to pay capital gains tax. In this strategy, we are going to buy a good property and keep it ideally forever. It is worth $600,000. They need $35,000 net cash to replace their income. Where can they get that from?

What about a line of credit?

A line of credit allows us to draw equity/cash out of property by setting up a bank account from which to draw this down. They can draw out $35,000 in the first year, then do the same in year two and three.

In years 4, 5 and 6 they could take say $35,000 our of the second property. It is just sitting there so why not use it? If they do not use it, when they die, someone else gets it, so they might as well use the money they have made.

Six years after the first property is worth more than $600,000, being in a capital city, it may be worth $900,000 plus. That gives them another $300,000 sitting there available to use. They have not finished using the first $300,000 and now they have another $300,000 and the property keeps going up in value whether they like it or not. This means they have more than they need for retirement.

Has real estate always interested you? Does working with people something you enjoy? Then maybe becoming a real estate agent is something for you. From making money in a growing industry and also being able to make your own schedule and be your own boss, the real estate industry may be just what you have been looking for.

One of the advantages of being a real estate agent is that you can have a degree, no degree, been part of a completely different industry, it really does not matter. As long as you are a hard worker and self motivated, being a real estate agent is something you can do.

Aside from that there are many other advantages to becoming an agent, here are just a few.

• You have the ability to have a flexible work schedule. So, having a family or going to school is still viable and you are able to work around other commitments.
• You can work either part or full time, depending on how much money you want to make.

If you choose to work part time, you will not make as much money only because you can only be in touch with a few people and answer so many phone calls in the time you are in the office.

Full time agents do make more money, however they do work many times 60 – 80 hours a week. Essentially working whenever their clients want them too. They do make a lot of money then with all the hours they are putting.

• You will be able to meet new people and interact with others regularly. Especially if you get to know others easily and can understand their needs and wants. Also, knowing neighborhoods and streets, the school districts and parks, and other important needs will make you an excellent real estate agent. Especially when these things come naturally to you.
• Being a good negotiator comes in handy also. Being able to communicate easily with others and feeling comfortable in many different situations and circumstances is the difference between a mediocre agent and an excellent one. Getting the customer want they want through compromises with the homeowner or home builder makes the difference between the agents that make a lot of money and the ones that only make a little.

Becoming an agent is not difficult. You do need at least a high school diploma, some have their college degrees, however being a real estate agent means hands on learning through years of experience and training. Every agent does have to have a license, there is an exam that does need to be paid for and taken. There are short day courses to prepare you for the test and every couple of years you will need to renew your license. But, after that you can start selling homes and become part of the National Association of Realtors.

Being a real estate agent can be an exciting and rewarding job if you have the natural abilities above or if you plan on working at it and getting better as time goes on. Either way becoming a real estate agent may be just the job you have been looking for.

Have you been hearing a lot about flipping homes? This is actually a technique that has been around for years, it really is nothing new; however it has become extremely popular in the home marker, especially in the decade. All flipping is really is buying a home at a very low price, below market if possible and then turn around and sell it at or above market value. Ideally with never making any type of home payment on it. With a low interest rate, no down payments, and creative financing available now, many people have turned to real estate to make a dollar with the stock market being poor. However, there is a lot of risk associated with flipping and if you are not careful it can blow up in your face. Here are some things to look for and do to make flipping a viable money source.

1. Look for the worst house in the best neighborhood. The home should be well under market value if it is in poor condition and needs maintenance.
2. Houses that are by good schools and parks. These are huge selling points and very important to potential buyers. So, looking into the schools and parks that are near the home will give you an idea of what you will be able to sell the home for.
3. Plan on making renovations and having to do home improvements to the house. You do not want to spend too much, thus leaving you little or no profit. So, the home you pick should only need cosmetic fixes and nothing too extreme or costly.
4. Research which renovations will make you the most money in the neighborhood it is located in. You do not want to spend too much, depending on how much the homes are selling for in the neighborhood you purchased in. Investing too much money and time will lower your profit. You want to make the most profit possible with as little investment as necessary.
5. Currently, bathrooms and kitchens have a high dollar value with a very low investment. Replacing worn items like sinks, mirrors, stove tops, and cabinets will make an old bathroom or kitchen look brand new again, especially after adding a fresh coat of paint too.
6. Improving the curb appeal works too. Making minor improvements like cleaning up the landscaping, fresh coat of paint on the house, fixing cracks in the stucco and cement, and generally cleaning up the outside will make a huge difference. What people will see when they pull up to the home, will affect their attitude when they enter the home. The better the outside looks, the better the attitude when they enter.
7. New paint throughout the house, cracks, holes, and stains being removed and the backyard being cleaned up also, can make a below market home, be worth market value again. Making sure that obvious eyesores are taken care of give people less reason to focus on those and they will look at the home qualities instead.

Flipping homes can be viable and it is also dangerous. Always watching the market and looking into what to change or improve on the home you have purchased for flipping, will help to ensure that you come out making money and not losing it.

Though expensive remodeling can be one of the ways to raise the selling price of your home, it is a tricky decision to take. This is because, you must first consider whether investing in really expensive materials to add more value to the property will be worth the time and cost, considering the state of the neighborhood.

There is no shortage of ways you can splurge money on remodeling. For instance, a kitchen remodeling could cost anywhere between $5,000 and $50,000. You could even decide to choose granite counter tops and customized tiles for your floor. It is important to make sure you can recognize a return.  Its comparatively easier to recognize a positive return on investment in neighborhoods where the average price of a home is $135,000, you cannot get back your money even if yours is the most expensively done-up home in the area! In such neighborhoods a $75,000 kitchen will be completely wasted and will never give you a return of $375,000 for your home.

So how should you invest to remodel your home in the wisest way, so that any neighborhood can sustain such investments? Here are some basic areas of the house where any investment can add more value to your home:

New Windows: Consider replacing your old windows with brand new double paneled windows. These not only help the owner save on energy costs, but also practically devoid of any maintenance cost for decades.

Paint Her Up: The selling price of any home gets an immediate boost when you give your home a fresh coat of paint. Fresh looking interior as well as exterior give the potential buyer a fine impression that the home has been well-cared for.

Is the Layout Right? People are very particular about the living space in a home. Have a re-look at your own home layout. Can anything be done to increase space? Maybe removing a wall between the living area and the kitchen, doing away with a closet, etc. Though this type of remodeling is more expensive than most projects, some simple changes in the layout could immediately hike up the price by another $10 or $20,000 and sometimes even higher!

What about the kitchen and bathrooms? Strange as it may sound, people are more likely to buy homes equipped with a good looking kitchen and bathrooms.  Though remodeling costs of a kitchen and bathrooms may cost several thousands of dollars, you will be able to recover the costs easily, provided your selling price is within or close to the limits as decided by the locality where the house is.

As is evident there are numerous costly and not so costly ways you can add more value to your home to increase the selling price. But the question still remains, which is the best way to go about it? According to a recent cost vs. value report released by the home-sales industry, the following projects gave maximum profit last year:

• Bathrooms: 75%
• Deck: 77%
• Master Suite Additions: 73%
• Sunrooms: 66%
• Attic Bedrooms: 88%
• Kitchen Upgrades: 84%
• New Roofing: 80%
• Siding Replacement: 87%
• Window Replacement: 84%