Profitable real estate investing over the long term is all about the hunt for cash flow.  These are situations where investors buy and hold, not rehab and resell. There are plenty of opportunities to find properties that produce monthly cash flow in every real estate market condition, up and down. Buyers need to keep their ears to the ground to find the best deals and grow in real estate investing. The best properties always have multiple buyers bidding for them, so the prudent buyer must pounce immediately when they see something that is good.   It is important to remember to buy with your head, not your heart. Never pay over your pre-determined price,  no matter what.  Auctions are a great way to sell things because of the last minute frenzy that often happens, driving up the price.  I refer to it as the “Ebay” effect, whereby the last 120 seconds of an auction drives the price up 20% or more. The same principle holds true with Real Estate Investing.

Foreclosure auction on the LA Courthouse Steps

Maintenance cost is also a great part of real estate investment. It is important to know what the replacement costs of everything will be. This is best done through experience so I recommend newer investors bring along an experienced investor or contractor when previewing investment properties.  Many cities will have special departments dedicated to enforcing housing codes. These enforcements can be both a problem and an opportunity.  The city of Los Angeles has LAHD, a housing department that can cause plenty of problems for owners of run down rental properties. Make sure to research any potential properties for any housing violations before opening escrow.

A profitable real estate deal requires many different things to come together at the right time. Building contacts helps investors grow stronger in real estate. Referring to experienced agents who are also investors themselves and know the process of buying and owning investment real estate is a must.  Sky Minor Real Estate is an established business who has been brokering and owning profitable investment real estate since 2004.  Sky Minor can be reached at 310-709-8283

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2. Know your budget-See what you can afford. Use Bankrate’s  mortgage calculator to see what your payment would be.  Look at your budget and determine how a house fits into it. Fannie Mae recommends that buyers spend no more than 28% of their income on housing costs. Go much past 30% and you risk becoming house poor. Although FHA lenders will loan with up to 50% of the income for housing costs, it is not recommended. Find out what your total monthly housing cost would be, including taxes and homeowners insurance.  In some areas, what you’ll pay for your taxes and insurance escrow can almost double your mortgage payment. According to the Insurance Information Institute, the average yearly premium can range from $477 in Utah to $1,372 for unlucky Texans.

To get an idea of what you’ll pay in insurance, pick a property in the area where you want to live and make a call to a local insurance agent for an estimate. You won’t be obligated to get the insurance, but you’ll have a good idea of what you’ll pay if you buy. For an idea of what you’ll pay in taxes, Zillow publishes property-tax information for homes all over the country. Just remember that exemptions and the intricacies of local tax law (such as Florida’s Save Our Homes value cap) can create differences between what a homeowner is currently paying and what you can expect to pay as a new homeowner.

3. Know your bottom line at the closing table ahead of time- The upfront costs on closing on a piece of real estate can be large and shouldn’t be overlooked. Closing costs include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowners insurance or homeowners association fees. You can see what closing costs average in your state by looking at Bankrate.com’s annual closing cost survey. Remember that all the escrow companies, title companies, attorneys, agents and lenders are working for you, the buyer. Don’t be afraid to ask questions about anything you don’t fully understand.

5 tips for buying real estate

4. Talk to reputable real estate agents in your area about the real estate climate. Do they believe prices will continue falling or do they think your area has hit bottom or will rise soon? Are there hidden opportunities that they might know of that are not on the market? A good real estate agent is worth their weight in gold. See who is doing a good amount of business in the area and seek them out.

5. Remember to look at the big picture.-While buying a house is a great way to build wealth, maintaining your investment can be labor-intensive and expensive. When unexpected costs for new appliances, roof repairs and plumbing problems crop up, there’s no landlord to turn to, and these costs can drain your bank account. Look at a property with an objective eye and judge what the costs will be over time.

Sky Minor Real Estate

Los Angeles, CA

310-709-8283

Read complete article here: Sky Minor Real Estate

Hello all, I am a frequent contributor to real estate websites like Trulia, Activerain and Zillow. These sites are great for the general public to ask real estate related questions without fear of being hounded by zealous agents with bad manners. Someone posted on Zillow.com that they had $500,000 in cash and wondered if they should pay off their existing mortgage or invest the money. It’s a good question, and hopefully some of you reading this will one day find yourselves in this situation. This was my reply to the person:

“If it were me, I would go pick up one or two multi-unit properties in Los Angeles that will rent quickly. I am particularly fond of Section 8 Properties in the lower income areas of the city. Before you wince and disregard this answer, let me explain why. The run down areas of Los Angeles are feared by many thus the prices are lower and the Cap rates are higher. (Cap rate is annual rent/purchase price-usually I advise to go for 8 or higher but most multifamily properties on the west side or Pasadena are 5 or less). Section 8 is an LA county program that subsidizes rent to people, so you have the government paying most of your tenant’s rent. They always pay on the 1st of every month. The downside is that your unit has to pass a Section 8 inspection once a year, but that’s best practices anyway to keep your rental property in good condition. With larger units (3 or more bedrooms) you tend to get families with lots of stuff. We all know that moving is a pain when you have alot of kids and stuff so they tend to stay put. A multiunit building with section 8 tenants is a cash machine. The tenants will never give you any problems because if they do, you just contact their section 8 adviser and they lose their benefits.

I would advise putting 50% down and getting a 30 year fixed mortgage so that you can leverage your funds a bit and also take advantage of the very low interest rates at the moment. When the rates rise, and they will, your 5% mortgage will be just peachy. I know of several buildings right now that are above a 10 percent cap rate and are under $300,000. All you would have to do is sign the loan docs and you would make about $3000 a month income from each. That’s a no-brainer IF you have the stomach for the hood.

If not, rental properties in nicer areas are also a solid investment, but they won’t spit off the tremendous income that you can get in less desirable areas. For more on this concept, please contact me.”

Serious buy and hold for cashflow investors already know about the rough areas and section 8, perhaps some of you reading this may venture down there. If so you’ll probably see me, evaluating another potential building. We can meet up and get some really great Tacos on MLK. See you in the field?

Sky Minor Real Estate

310 709 8283

Set your mind set up
You will find number of people who will suggest you not to invest in real estate. Prepare your mind set up for any kind of losses in the business like real estate. But there’s not everyday you will end up losing your money; there are better ways to deal in real estate to earn profits.

Work on productive front
Never work alone in real estate. A team in real estate will help in efficient work by taking handful decisions with proper consultations. Fulfill our team with some great players like a partner, mentor, contractor, insurance agent and mortgage broker. Apart from this, avoid talking to unmotivated sellers. Take a look at the property only after having a viable conversation with the seller over phone.

Patience and persistence
Not every deal works in first go. Many dealers and sellers require constant reminders over different offers if the deal does not work out with them. Be patient and persistent on your decision and set up your mind that many deals do not work out in first try.

Get updated
In respect to latest trends and laws, keep yourself updating is of great use in the business of real estate. Apart from keeping knowledge about new locations and areas coming out with new projects, it will be of great knowledge if you keep updated with market values of those areas along with the available services in those areas.

Look out for small yet important things
Treat real estate as a business. Time to time offers or discounts are fine but keeping a feeling of brother hood at every level will never help you learn the tricks of business dealing. Also, planning out your research as per your extent of investment in the property is very vital. More the investment you are making, more the details you need to know.

Keep in mind these handy tips from sky minor real estate for your successful step in real estate business.

Excellent condition of home
Buyers generally prefer furnished home. If you are selling a home, adding on beautiful carpets, attractive fixtures and giving a final touch with paints can help you increase in the value of your property for the location highly in demands for relocation.

Offer negotiable cost
Real estate dealings work great on the policy of negotiable cost. It will be fare for you as well as for the buyer to decide on for some negotiable value that can save the buyer from the amount he will have to spend on purchasing other valuables for home.

Warranties
With providing with different fixtures and equipment seller need to work upon considering the cost of maintenance of fragile items and products like dryer/ washer which are meant for long term uses. Most buyers prefer buying that property where these items are taken care by the owner of that property.

Test drive formula
Like for any test drive of a car, buyers can also take the property on rent for a fixed period before they actually buy the property. The only thing to take care in this deal is that for all the fixtures at the place, maintenance is purely in seller’s or the property owner’s hand till the property is on rent.

Offer Attractive deals
One can look for attractive deals while selling the property. For example offering gym membership or swimming membership for a fixed period of time can attract buyers. These effective concessions can increase the chances of buying a property.

With these great tips from sky minor real estate, you can easily enhance you real estate selling experience.

Every single investment in real estate involves a serious consideration of the core issues and factors that govern real estate market. Some of these factors include time management, cash flow, capital appreciation, tax benefits and equity pay down.

Besides, there are different kinds of risks which surface, depending upon the type of investment. Sky minor real estate brings before you some of the common risks that occur during investment in properties, like

1. Risk of Unruly Tenants

Risk of bad or unruly tenants is common in case of rental properties. Inexperienced investors easily fall a prey to the malpractices of these tenants.

1. Risk of Unlikely Profits

Some properties always fall short in terms of making a profit. For instance, if a property is unable to generate a sufficient monthly income to cover its operational costs, then the property is not worth investing.

1. Unawareness about local market

Before investing, you must acquaint yourself with the real estate market conditions. For example, if there is an excess of open properties, the number of interested buyers falls, and consequently you have to reduce the original sales price in order to fetch buyers. This is more common in ‘Flipped Properties’.

1. Lack of knowledge about Taxes

At times, underestimation of the property taxes may lead to severe consequences. Since property taxes are never fixed, and prone to sudden revaluation, therefore, one must consider them.

1. Absence of an exit route

A good investor is always ready with alternatives. Moreover, you should always keep an exit strategy at the back of your mind, if there is likely possibility of failure. In real estate, effective exit strategies are fruitful, especially during the phase of evaluation and acquisition.

Do not forget to keep in mind the above said errors that occur because of the carelessness and negligence. In case of any clarifications, contact Sky minor real estate.

Money required for investment

To start with the real estate business it is not required to have huge capital for the investment. Real estate has a huge stock of money to offer everyone, whether you have money or not. The money making in this field depends on the kind of deal you are involved in. in real estate, the problem is not with lack of investment but with the lack of a good deal. If you have found a good deal, you will definitely make good money. If you have the capability of negotiating a good price for a house, investors will be more than willing to put in money.

A huge risk is involved in real estate business

Every business involves risk big or small. There is no business that can be started without investment apart from the real estate business. Real estate offers you to start with little or no money. In fact real estate business is one of the safest business where you can invest your money. The stock market is always fluctuating and can not be predicted, savings and funds do not have that much return.

In a real estate business you just have to keep yourself educated and updated with the terms and conditions of the various properties. Profit only comes with risk, so one should be willing to take risk to make money. Sky Minor Real Estate gives you a good assistance with all types of queries relating to real estate business and will make sure that you make good profits with minimum investment and risk.