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Building Wealth By Purchasing One House at a Time

by Randy Gridley

 

Just looking at a house will not make you rich in any way. You need to buy the house first and then see if you are able to make money out of it. One very important thing to remember is that you have the potential to make thousands of dollars in profits every time you purchase a house that someone else would love to rent or own.

Real Estate is Your Best Investment -

With more than 49-years of experience in investments, I still prefer to buy houses rather than shopping complexes or apartments. Why? Houses are definitely going to make me more money.  A common misconception within the business circles are that commercial buildings and apartments contain less work and you gain more profit. This simply is not true. I have owned both of these properties. Tenants in commercial buildings and apartments would often come and go. The property would need refurbishing as soon as the tenant leaves it. As the owner, you will have to undertake trouble finding new tenants to occupy these buildings. Apartments and commercial buildings require lots of on-going work. If a dispute should arise once you have rented out a commercial building, it will definitely cost a lot of money including lawyer's fees and other dues. Tenants of these commercial buildings have accountants and lawyers, and they can afford to drag such disputes out for a long time. Also, if you rent your building to a tenant with a "big name", you will definitely get a lower rental because they have a name and you want to entice them to rent out your building.

If by chance, your tenant should file for bankruptcy, you will have a client who doesn't pay the rent on-time or one who renegotiates for a much lower rate. If the tenant doesn't pay the rent, you can definitely hire a lawyer and sue him or her, but if they are bankrupt, you will not get paid anyway.

You will have to attract good tenants that will look-after your building and pay the rent on time. You will have to purchase a property that you can rent to someone who is not a good negotiator, and someone who would need you more than you need him or her. As a side benefit of purchasing and managing houses, you can help other people sell their houses too. A licensed Realtor in Idaho, which is where I reside, can definitely earn some extra cash by doing this. This may differ according to the state where you reside, and you can check with your own state authorities about the laws and regulations regarding selling other people's houses. First, you can rent houses to people who need a place to live. And when you decide to sell, you can help these people buy their first home. You will be able to solve a big problem of a person by purchasing a house that an owner can't afford and a house that is ruining that person's credit. You can sell that house for a profit and help a family to own their first house of their life. These are just some of the rewarding and profitable experiences in buying and selling homes.

The Issue With Most Investment Property -

Usually, the buyers of investment properties are other investors. Like you, they also want to purchase for less than the property is worth and with a low down payment. Unfortunately, most banks will lend only 60-70% of the total selling amount.  For this reason, the buyer will not have enough for the down payment, and the deal could very well fall apart. If not, the seller must agree to finance part of the price. Investment property can experience large increases and decreases in value as the economy changes. An empty office building or commercial building can sell for a small fraction of what it costs to build it. A well-located house will appreciate at a greater rate than an average property. It may not suffer dramatic drops in value that are common to commercial properties during business recessions.

Homes are Different -

The value of commercial buildings and apartments will depend on the amount of income it produces. If you lease an apartment for below the market rate, it will be worth less money in no time. But a vacant home will have the same value as an occupied home.

Investing in houses is safer for several reasons. First, there is less money involved since you can buy a house with a small down payment. The less risk you will have because of this. Lenders will finance more for a house than any other real estate. Next, there are more buyers for houses than there are for bigger properties. You can sell a house in a hurry, if offered at a competitive price. Third, the house could be rented faster and with fewer vacancies. Apartment vacancies often would run 10-20% while house vacancies rarely exceed 5%. Commercial properties can sit empty for months and years at a time between tenants.

Dealing with an Anxious Seller -

When you buy a house, you are mostly dealing with a homeowner who is in a hurry to sell. If the homeowner is in a hurry to sell, you can get the house for a lower rate than usual. This is a great bargain on your part. The lesson is to never sell in a hurry even if you decide to buy a house that is sold on a hurry by someone else. Your negotiation experience will count a lot when buying and selling houses. You should be able to negotiate better than the other person when buying or selling houses. 

Investing In Real Estate: What You Need To Know

by Randy Gridley

Investing In Real Estate: What You Need To Know

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Launching a career in real estate investing is something to which countless individuals aspire. In order to really make a go of such an endeavor, it is necessary to become thoroughly educated about what this type of investing truly entails. Keep reading to get a great idea about how to begin.

Make sure that you create a game plan for what you desire to accomplish. Figure out how much time the process will take and if it will be worth your while. When you have developed a plan, meet with the necessary parties to discuss the deal that you want to achieve.

Make sure that you set realistic goals based on the budget that you have. You should not set a goal to buy ten houses in the span of a month if you only have a hundred thousand dollars to your name. Set reasonable expectations to avoid setbacks at all costs.

Do not be afraid to spend money on marketing. It is easy to just focus on the numbers and get fixated on how much marketing is costing you. However, it is important to think of the marketing as an investment in and of itself. If done the right way, it will only benefit you in the end.

When looking at your business strategy, understand your sunk costs that go beyond the general price of the home. You've got legal fees, closing costs, staging costs and a lot more that can affect your bottom line. When working out your margins be sure to think of all of these costs and add them into your line item list.

Real estate investing has the potential to turn everyday people into very wealthy individuals. But, unless the proper foundation of skill and information is in place, it can be an uphill battle. We hope the material discussed above has provided a firm basis for starting a rewarding career in the world of real estate investing.

Analyze these homes from the MLS:

This Article Has It All, From Tips To Tricks About Real Estate Investing

by Randy Gridley

This Article Has It All, From Tips To Tricks About Real Estate Investing

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If you want to start investing, you want to get the most out of your investment. Many people over the years have realized that real estate investing can be a good way to make an investment and watch it grow. Here are some tips that can help you make sound investments in real estate.

Marketing will be crucial to your success. Marketing is what generates your leads. Without solid leads, you are not going to find good deals on properties. Therefore, if something is not working in your investment plan, turn to your marketing strategy first to see what is going on and what can be adjusted.

Do not burnout when you are getting into real estate investing. If you experience some success in the beginning, do not become obsessed with real estate. If you spend all of your time with this business, you will alienate your friends and family and burnout, which can cost a lot of money.

When looking at your business strategy, understand your sunk costs that go beyond the general price of the home. You've got legal fees, closing costs, staging costs and a lot more that can affect your bottom line. When working out your margins be sure to think of all of these costs and add them into your line item list.

Always evaluate the neighborhood as a whole before you invest in any property there. Desirable neighborhoods will always hold their value, whereas depressed neighborhoods may not give you as good a return. The location remains a top factor in determining the value of a piece of property, more so than the property itself.

Now that you have read a few tips to help you get started with real estate, you can start putting them to use. Real estate investments can be a secure way for you to get a good return on your money, if you make the right choices. Hopefully this article has helped to put you on the right path.

Possible real estate investment homes provided by intermountain MLS:

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Randy & Doyelene Gridley
Silvercreek Realty Group
1099 S Wells St. Suite 200
Meridian ID 83642
Randy's Direct Office: 208-859-7060

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