By Tracy Caywood
Real estate investing is the best opportunity you have to become a millionaire entrepreneur. With the proper education and training, you can be quite successful, even if you’re a beginner.
With residential foreclosures being at an all time high, offering your solution services to highly motivated sellers will deliver fat checks and earn you the fat cat status. These people are looking for solutions, and you are the in-person handbook full of them
There are plenty of books and courses available that are packed full of information, tips, secrets, and advice. It’s also a good idea to find a mentor, or someone who can help you understand the basics. Attend seminars whenever possible to shorten the learning curve, and sign up for real estate investor forums so you can interact with the big cheeses.
Search your area for the local REI club. This is a great place for networking with other tycoons in the real estate field who hold a gold-mine of information. It’s usually there for the asking. Let others be your guide until you can guide yourself.
Being a real estate investor doesn’t necessarily mean that you “invest” your money OR that you own rental property. You can become wealthy by learning the loopholes of creative financing strategies for buying houses and land, without ever having to obtain a loan from the bank again.
Buying houses, lots, land, and buildings using creative financing will open new doors for you, and build your net worth faster than you can imagine.
As with any new venture, start with a business plan that includes marketing, advertising, continuing education, and exit strategies.
Tracy Caywood is an active creative real estate investor since 1999 and is now a personal coach and mentor for new investors across the country. In addition, she pioneered the handwritten marketing service for investors in 2006. http://www.YellowLettersComplete.com Check out her blog at: http://tattooedgurus.wordpress.com
Article Source: http://EzineArticles.com/?expert=Tracy_Caywood
Wednesday, 5 September 2007
Real Estate Investing - Keeping More Money From Your Mortgage
By Paul Blacquiere
For most people, financing real estate using mortgages is a fact of life. Most people don't have the cash to pay for the entire purchase price of a property, and many people want to leverage their cash to boost their return on investment.
So mortgages are here to stay... at least until tenants pay them off. In the mean time, mortgage payments must be made every month, easily accounting for 50% or more of a rental property's monthly cash flow.
While it's true that for most mortgages, a portion of each payment is principal repayment (and not really an 'expense'), with such a significant impact to the bottom line, a good investor does everything they can to minimize the monthly out of pocket cost and keep the cash flow positive.
Choosing an appropriate mortgage that reduces out of pocket costs is not always an easy decision to make. Anyone who has ever obtained a mortgage knows what it's like... they may ask questions like:
is the cheapest interest rate always the best one?
what amortization period should I pick?
should I choose a long or short term?
what about fixed interest rates or variable?
is an open or closed mortgage better?
do I need pre-payment or payment increase privileges?
which lender should I choose?
These are not always easy questions to answer, as the mortgage industry varies widely and the answers depend on the individual. The answers for a new home buyer may be substantially different than for a real estate investor. Even among investors, the answers can different based on their tolerance for 'risk' (ie. the chance their monthly payments may go up, etc.). The following are some things to consider when making decisions:
Interest rates - The interest rate affects your monthly payment and therefore your cash flow. Obviously, lower interest rates are better, but all mortgages are not created equal (see the section below about lenders). Most banks will lock in rates for you (even on a refinance or renewal) for 90-120 days. Use this to your advantage while shopping around for the best mortgage.
Amortization period - This also greatly affects your monthly payment and therefore your cash flow. Longer amortizations are better, but as a result, it takes longer to pay off the mortgage. Normally investors don't care about paying off the mortgage early, so it is best to select a longer amortization (ie. 25 years or more)
Long or short term - Deciding the answer to this almost requires a crystal ball. An investor must predict things like where interest rates will go over time, and how long they will hold a property. There is a measure of risk when using short-term mortgages, as rates could go up at renewal time, causing a severe reduction in cash flow. Long-term mortgages reduce that risk, but can prevent taking advantage of drops in interest rates, so it ends up costing more. Ultimately, flips should use short term mortgages, while the term can vary for buy and hold properties based on investor preference and risk tolerance.
Fixed or variable - Most people use mortgages that are locked in for a fixed term. This can be a disadvantage if an investor decides to sell a property or interest rates drop substantially. On the flip side, variable rate mortgages allow an investor to take advantage of rate drops, but they can also easily increase. Variable rate mortgages also tend to have lower interest rates than fixed mortgages, thereby boosting cash flow. Flips should use fixed mortgages, as this allows accurate forecasting of holding costs. Long-term buy and holds can use fixed or variable, depending on investor preference and risk tolerance.
Open or closed - Open mortgages tend to have higher interest rates than closed ones, but have no penalties for full repayment. Closed mortgages should be used for long-term buy and hold properties, while open should be used for flipping.
Pre-payment or payment increase - For long-term buy and hold properties, ensure the mortgages terms allow partial pre-payment (at least 10%-15%) and an option to increase monthly payments. This provides flexibility to use excess cash flow to pay off the mortgage faster. For flips, a good sized pre-payment privilege will help reduce penalties if the property is sold before the mortgage term is complete.
Lenders - This is a tough one and an investor will have to rely on their mortgage broker and referrals to find good lenders to work with. Some lenders may have the lowest rates, but the mortgage is difficult to qualify for, they may have high fees for breaking the mortgage, etc. Find a lender who is flexible, without high fees for everyday items (like extra statements, NSF charges, etc.), good customer service (this is important), and of course the easiest qualification criteria (would you rather jump through 37 flaming hoops to get a mortgage, or just 3?).
The above sections don't really provide the answer to choosing fixed/variable or long/short term because it really depends on the individual. However, the following articles published by Moshe A. Milevsky, Ph.D, a Finance Professor at York University and Executive Director of the IFID Centre, may help an investor make a decision.
Mortgage Financing: Floating Your Way To Prosperity - Published in 2001, this article describes his approach to finally answering the question of whether to go long or short on a mortgage. He uses sophisticated mathematical analysis based on historical interest rates to come to his conclusions.
Mortgage Financing: Should You Still Float? - Published in 2004, this article discusses his original suggestions in light of today's very low interest rates, and provides recommendations for different types of people (ie. new home buyers, etc.)
Once an investor has had a mortgage for awhile, they may discover that their cash flow is low, so they make want to find ways to boost it. The following are some suggestions on how to do this:
Skip a payment - This is our favorite and one of the easiest. Many mortgages have the ability to skip one or more payments. Even if this isn't part of the mortgage agreement, many banks will make exceptions. The advantage of this is that you can boost your cash flow with one phone call. If you pay $1500 per month on a mortgage, that's $1500 you can keep in your pocket.
Interest only - This requires refinancing, and may not be available in all cases (especially for rental properties), but it can dramatically boost cash flow. No principal repayment is included in your monthly mortgage payment -- only interest costs. The disadvantage is that no equity is being built up through mortgage 'pay down'. Instead, the equity is kept in your pocket every month by not having to pay the principal.
Extend amortization period - If you've had a mortgage for a few years, normally upon renewal or refinance, the amortization period is reduced by the length of time you've held the mortgage. To reduce your monthly payments, extend the amortization period back out to 25 years or more.
Using the above information to select the proper mortgage, and the extra techniques to boost cash flow, an investor should be able to keep their monthly debt servicing costs to a minimum so they can keep more money in their pocket and for long-term buy and holds, keep the property long enough to benefit from one of the best parts about real estate -- long-term appreciation.
Paul Blacquiere, and his business partner Joanne Beehler, are full time real estate investors and have been investing in Ottawa, Ontario, Canada since 2002. They are owners of Spirepoint Properties, a Canadian real estate investing company dedicated to making real estate investing easy. Their FREE newsletter, the Spirepoint Insider, offers free education on Canadian real estate investing, announcements about their latest investment opportunities, and more.
Sign up for their FREE newsletter at http://www.spirepoint.ca
Article Source: http://EzineArticles.com/?expert=Paul_Blacquiere
For most people, financing real estate using mortgages is a fact of life. Most people don't have the cash to pay for the entire purchase price of a property, and many people want to leverage their cash to boost their return on investment.
So mortgages are here to stay... at least until tenants pay them off. In the mean time, mortgage payments must be made every month, easily accounting for 50% or more of a rental property's monthly cash flow.
While it's true that for most mortgages, a portion of each payment is principal repayment (and not really an 'expense'), with such a significant impact to the bottom line, a good investor does everything they can to minimize the monthly out of pocket cost and keep the cash flow positive.
Choosing an appropriate mortgage that reduces out of pocket costs is not always an easy decision to make. Anyone who has ever obtained a mortgage knows what it's like... they may ask questions like:
is the cheapest interest rate always the best one?
what amortization period should I pick?
should I choose a long or short term?
what about fixed interest rates or variable?
is an open or closed mortgage better?
do I need pre-payment or payment increase privileges?
which lender should I choose?
These are not always easy questions to answer, as the mortgage industry varies widely and the answers depend on the individual. The answers for a new home buyer may be substantially different than for a real estate investor. Even among investors, the answers can different based on their tolerance for 'risk' (ie. the chance their monthly payments may go up, etc.). The following are some things to consider when making decisions:
Interest rates - The interest rate affects your monthly payment and therefore your cash flow. Obviously, lower interest rates are better, but all mortgages are not created equal (see the section below about lenders). Most banks will lock in rates for you (even on a refinance or renewal) for 90-120 days. Use this to your advantage while shopping around for the best mortgage.
Amortization period - This also greatly affects your monthly payment and therefore your cash flow. Longer amortizations are better, but as a result, it takes longer to pay off the mortgage. Normally investors don't care about paying off the mortgage early, so it is best to select a longer amortization (ie. 25 years or more)
Long or short term - Deciding the answer to this almost requires a crystal ball. An investor must predict things like where interest rates will go over time, and how long they will hold a property. There is a measure of risk when using short-term mortgages, as rates could go up at renewal time, causing a severe reduction in cash flow. Long-term mortgages reduce that risk, but can prevent taking advantage of drops in interest rates, so it ends up costing more. Ultimately, flips should use short term mortgages, while the term can vary for buy and hold properties based on investor preference and risk tolerance.
Fixed or variable - Most people use mortgages that are locked in for a fixed term. This can be a disadvantage if an investor decides to sell a property or interest rates drop substantially. On the flip side, variable rate mortgages allow an investor to take advantage of rate drops, but they can also easily increase. Variable rate mortgages also tend to have lower interest rates than fixed mortgages, thereby boosting cash flow. Flips should use fixed mortgages, as this allows accurate forecasting of holding costs. Long-term buy and holds can use fixed or variable, depending on investor preference and risk tolerance.
Open or closed - Open mortgages tend to have higher interest rates than closed ones, but have no penalties for full repayment. Closed mortgages should be used for long-term buy and hold properties, while open should be used for flipping.
Pre-payment or payment increase - For long-term buy and hold properties, ensure the mortgages terms allow partial pre-payment (at least 10%-15%) and an option to increase monthly payments. This provides flexibility to use excess cash flow to pay off the mortgage faster. For flips, a good sized pre-payment privilege will help reduce penalties if the property is sold before the mortgage term is complete.
Lenders - This is a tough one and an investor will have to rely on their mortgage broker and referrals to find good lenders to work with. Some lenders may have the lowest rates, but the mortgage is difficult to qualify for, they may have high fees for breaking the mortgage, etc. Find a lender who is flexible, without high fees for everyday items (like extra statements, NSF charges, etc.), good customer service (this is important), and of course the easiest qualification criteria (would you rather jump through 37 flaming hoops to get a mortgage, or just 3?).
The above sections don't really provide the answer to choosing fixed/variable or long/short term because it really depends on the individual. However, the following articles published by Moshe A. Milevsky, Ph.D, a Finance Professor at York University and Executive Director of the IFID Centre, may help an investor make a decision.
Mortgage Financing: Floating Your Way To Prosperity - Published in 2001, this article describes his approach to finally answering the question of whether to go long or short on a mortgage. He uses sophisticated mathematical analysis based on historical interest rates to come to his conclusions.
Mortgage Financing: Should You Still Float? - Published in 2004, this article discusses his original suggestions in light of today's very low interest rates, and provides recommendations for different types of people (ie. new home buyers, etc.)
Once an investor has had a mortgage for awhile, they may discover that their cash flow is low, so they make want to find ways to boost it. The following are some suggestions on how to do this:
Skip a payment - This is our favorite and one of the easiest. Many mortgages have the ability to skip one or more payments. Even if this isn't part of the mortgage agreement, many banks will make exceptions. The advantage of this is that you can boost your cash flow with one phone call. If you pay $1500 per month on a mortgage, that's $1500 you can keep in your pocket.
Interest only - This requires refinancing, and may not be available in all cases (especially for rental properties), but it can dramatically boost cash flow. No principal repayment is included in your monthly mortgage payment -- only interest costs. The disadvantage is that no equity is being built up through mortgage 'pay down'. Instead, the equity is kept in your pocket every month by not having to pay the principal.
Extend amortization period - If you've had a mortgage for a few years, normally upon renewal or refinance, the amortization period is reduced by the length of time you've held the mortgage. To reduce your monthly payments, extend the amortization period back out to 25 years or more.
Using the above information to select the proper mortgage, and the extra techniques to boost cash flow, an investor should be able to keep their monthly debt servicing costs to a minimum so they can keep more money in their pocket and for long-term buy and holds, keep the property long enough to benefit from one of the best parts about real estate -- long-term appreciation.
Paul Blacquiere, and his business partner Joanne Beehler, are full time real estate investors and have been investing in Ottawa, Ontario, Canada since 2002. They are owners of Spirepoint Properties, a Canadian real estate investing company dedicated to making real estate investing easy. Their FREE newsletter, the Spirepoint Insider, offers free education on Canadian real estate investing, announcements about their latest investment opportunities, and more.
Sign up for their FREE newsletter at http://www.spirepoint.ca
Article Source: http://EzineArticles.com/?expert=Paul_Blacquiere
Real Estate Opportunities in Puerto Vallarta
By Tom Budnaik
Puerto Vallarta is one of the Jewels in Mexico's crown. It has everything to offer: Beautiful beaches, great restaurants, accomodation for tourist with every budget, lots of options for entertainment, vibrant art scene, excellent shopping centres and loads of sports and leisure activities. Therefore it's not surprising that people from all over the worl especially USA and Canada are thronging to Puerto Vallarta. Puerto Vallarta is getting popular as a second home option for regular visitors.
This increase in interest has resulted in spurt in demand for Puerto Vallarta Real Estate. Real Estate in Puerto Vallarta also commands good price because of various reasons. Not Only Puerto Vallarta has scenic locales, excellent amenities, cultural attractions, it also provides good return on investment. Good investors are buying Real Estate not just for their own vacation purposes but also for income that come from renting out their properties throughout the year. There are lot of options to choose from. Puerto Vallarta offers condo, villas etc for people who want to have second homes. For reliable and most current Puerto Vallarta listings there are sites like MexicoBestBuy.com
Puerto vallarta has many exciting real estate developments. One of them is Nima Bay.
Nima Bay is a revolutionary concept focused to be the best real estate development in Puerto Vallarta. Nima bay will consist of eleven luxury towers comprised of 227 condominiums with an exclusive corridor of boutiques and shops. Nima bay has been designed by Central de Arqiotectura. Nima Bay promises high end luxury living to Puerto Vallarta as never seen before. The condominiums offer both exquisite design and the best amenities and services. With a location right in Marina Vallarta, the project offers spectacular views to the Pacific Ocean, Marina and the Golf Course. Nima Bay will feature one, two and three bedrooms units and penthouses with roof gardens included.
Buyers will get full ownership of the condominium and will have all the right to rent it. Nima Bay's management can also help you in this process. Nima Bay has an assured financing with BBVA Ban comer, the largest bank in Mexico, which is conducting the systems of BI-NATIONAL credit for the mortgages in Mexico.
Author : Tom Budniak
As you can see, Puerto Vallarta has many excellent Real Estate Investment oportunities like Beachfront Condos, Rental Villas, Apartments etc. If you have any questions, requests or need any advise regarding Real Estate in Puerto Vallarta feel free to contact Tom Budniak of Realty Executives Vallarta, Puerto Vallarta's best Real Estate company. Tom is a Certified Member of RMRE and MLS 4 Riviera Maya.
Article Source: http://EzineArticles.com/?expert=Tom_Budnaik
Puerto Vallarta is one of the Jewels in Mexico's crown. It has everything to offer: Beautiful beaches, great restaurants, accomodation for tourist with every budget, lots of options for entertainment, vibrant art scene, excellent shopping centres and loads of sports and leisure activities. Therefore it's not surprising that people from all over the worl especially USA and Canada are thronging to Puerto Vallarta. Puerto Vallarta is getting popular as a second home option for regular visitors.
This increase in interest has resulted in spurt in demand for Puerto Vallarta Real Estate. Real Estate in Puerto Vallarta also commands good price because of various reasons. Not Only Puerto Vallarta has scenic locales, excellent amenities, cultural attractions, it also provides good return on investment. Good investors are buying Real Estate not just for their own vacation purposes but also for income that come from renting out their properties throughout the year. There are lot of options to choose from. Puerto Vallarta offers condo, villas etc for people who want to have second homes. For reliable and most current Puerto Vallarta listings there are sites like MexicoBestBuy.com
Puerto vallarta has many exciting real estate developments. One of them is Nima Bay.
Nima Bay is a revolutionary concept focused to be the best real estate development in Puerto Vallarta. Nima bay will consist of eleven luxury towers comprised of 227 condominiums with an exclusive corridor of boutiques and shops. Nima bay has been designed by Central de Arqiotectura. Nima Bay promises high end luxury living to Puerto Vallarta as never seen before. The condominiums offer both exquisite design and the best amenities and services. With a location right in Marina Vallarta, the project offers spectacular views to the Pacific Ocean, Marina and the Golf Course. Nima Bay will feature one, two and three bedrooms units and penthouses with roof gardens included.
Buyers will get full ownership of the condominium and will have all the right to rent it. Nima Bay's management can also help you in this process. Nima Bay has an assured financing with BBVA Ban comer, the largest bank in Mexico, which is conducting the systems of BI-NATIONAL credit for the mortgages in Mexico.
Author : Tom Budniak
As you can see, Puerto Vallarta has many excellent Real Estate Investment oportunities like Beachfront Condos, Rental Villas, Apartments etc. If you have any questions, requests or need any advise regarding Real Estate in Puerto Vallarta feel free to contact Tom Budniak of Realty Executives Vallarta, Puerto Vallarta's best Real Estate company. Tom is a Certified Member of RMRE and MLS 4 Riviera Maya.
Article Source: http://EzineArticles.com/?expert=Tom_Budnaik
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