Monthly Archives April 2019

Tampa Bay Real Estate

How to Get into Investment Real Estate? Where do I start?

Posted by Kate Story on April 30, 2019  /  in NEWS  /  Comments off

The big question when first starting out is, how to get into investment real estate? Firstly, to invest, it does not matter whether your job profession is within the real estate realm or not. Plenty of people who work outside of the real estate industry learned how to get into investment real estate. For example, Joe, a doctor, has a handful of rental properties and flips a house or two every year. Yes it is advantageous when your career coincides with real estate, but it is not necessary. For example, Real Estate Kate has her real estate license so she is able to list her houses and avoid paying an additional realtor commission during the sale.

There is plenty of literature available to help learn how to invest in real estate for beginners. After reading this article, go to Amazon and use the search bar to find books that relate to real estate investing. If you are unsure of what type of investment strategy you want to tackle, try a few different books to get a general idea of each approach. You can read a paperback before bed or listen to an audio book on your way to work. A wise way to learn how to invest in real estate for beginners is to attend local real estate gatherings. REIA is an organization dedicated to help support and promote local real estate investing. People who attend these meet ups are looking for knowledge and advise, to pitch deals, or simply to network. To find a group meeting in your community, check out the REIA website by clicking HERE.

Mentors are a great way for how to learn how to invest in real estate. Their experience and knowledge are immensely valuable to a beginner investor. They can help you avoid pitfalls and help direct you down the right path. Be sure to screen your mentor first though. Make sure they are worthy of the mentorship. There are plenty of people who talk the talk, but don’t walk the walk. Converse with them on a consistent basis, run your ideas by them, watch what type of investment moves they make. Be patient with how to learn how to invest in real estate. It does not happen overnight or in a “single session”. Continue to read articles, study market trends, look at deals, and meet new people. Networking and connections are tremendous help!

Broadly speaking, knowing how to invest in real estate in usa is comparable regardless of where one may live. Out of state or out of country, an investor will look for the same items. An example of this would be the potential profit or cap rate able to be achieved from a deal. The more exposure you have to investment real estate, the more you will learn and be able to teach other new beginners how to invest in real estate in the usa. You will have “whoops moments” along the way, but these will be learning experiences. Alternatively, you will also have small victories, which can continue to be built upon. When first starting out, read literature, attend local meet ups, and find a mentor.

To learn about finding the best return on investment real estate, read “Finding the Best Return on Investment Real Estate

What is the Best Way to Invest in Real Estate? Analyze the Options

Posted by Kate Story on April 22, 2019  /  in NEWS  /  Comments off

If you’re trying to figure out what the best way to invest in real estate is, you are not alone. There are many different ways to invest in real estate. Each of these methods has unique features and characteristics. Choosing which technique works best for you will depend on your current situation and what you are looking to achieve from real estate investing. Furthermore, just because this an investment method works best for you now, does not mean it always will. Real estate is cyclical and constantly changing, which means you always have to be on your toes.

To briefly cover the two main method of real estate, there is flipping and holding. For example, if you want to make a lump sum of cash quick then flipping a house may be best. However, be aware, and properly plan for, the high capital gains tax you will receive on the profit you make. Alternatively, if you want long-term passive income, buying and holding rental properties would be the best answer. The IRS created a 1031 exchange, which allows an investor to sell a property and reinvest the money into a new property, a great means to defer all capital gains.

Technically, there is not a single, best way of how to properly invest in real estate. Investing in real estate requires constant critiquing. An individual needs to assess and adjust their situation on a consistent basis. How to properly invest in real estate also involves staying up to date with the latest market trends as well as the predicted market trends. Doing so will help prepare for future moves. For example, if there is an election is coming up, there is usually a large amount of uncertainty in who will be elected and what will happen, therefore, laying low and avoiding any drastic changes to your investment strategy is wise.

Starting small and then expanding your reach, to take on more and bigger projects is, in my opinion, one of the best ways to invest in real estate. For example, when you first begin investing, it would be wise to flip one house at a time. After you get your feet wet and are comfortable taking on more, try flipping two at a time, and then maybe even three! From working with investors who flip full time, the most common number of houses to flip at a single time is 2-3. The highest I have heard is 5. This is a logical approach and a great way to set goals for yourself. Small goals lead to large accomplishments.

Last, but not least, stick to your wheelhouse and diversify your portfolio. A common rule of thumb is once you find what you are good at, laser focus on it. For example, if you are a strategic buy and hold investor, try not to veer off path, when you are not equip or knowledgeable enough, and flip a house. The grass is always greener on the other side, concentrate on your bread and butter. To continue with this example, if you hold rental properties and started with a few single-family houses, maybe try a multi family next. Before you know it you just may own a 15+ unit apartment complex. These different ways to invest in real estate will help you understand how to properly invest in real estate.

To learn more about how to get into investment real estate check out, “How to Get into Investment Real Estate? Where do I start?”

How Do You Invest in Real Estate? Taking the Plunge

Posted by Kate Story on April 15, 2019  /  in NEWS  /  Comments off

A common question among new investors is, “how do you invest in real estate?” The answer is more complex than A or B. There are a few follow up questions that need to be answered first, such as “what are you trying to accomplish” or “what is your financial situation”. Depending on these responses, one strategy may be better than another when beginning to invest in real estate. Knowing what you want to achieve, short and long-term goals, is key for determining how to invest in real estate. At the end of the day, once the preliminary work is done, it is simply about taking the plunge.

There are a few strategies an investor can take when considering how to invest in real estate. For example, a common strategy is to fix and flip a house. This involves buying a distressed property, making renovations to the property, and then reselling for a profit. For example, Real Estate Kate sells Joe a property for $100,000. The house needs a new roof, wood rot repair, paint, landscaping, as well as an updated kitchen and bath. These repairs cost Joe $50,000 and are completed in a months time. After the improvements, Joe is able to sell the property for $200,000. As you can see, even after closing costs, commissions, and any potential holding costs Joe incurred, he is still able to make a sizeable profit in a short amount of time. This strategy of how to invest in real estate is accentuated through HGTV shows, such as “Fixer Upper” and “Good Bones”.

If flipping a house does not sound interesting and you are still wondering how can you invest in real estate, no need to fear, there are other investment strategies. Another popular method for investing is to buy and hold. This involves buying a house and renting it out for monthly income. For example, Real Estate Kate sells Joe a property for $80,000. It needs very minimal repairs, such as a fresh coat of paint. After the repairs, Joe is able to rent the property out for $1,100 a month. After accounting for taxes, insurance, and other necessary items, Joe is still able to achieve over a 10% CAP rate. As you can see this is a great return on money, considering the highest bank yield today is 2-3%. This method of how to invest in real estate is popular among those interested in creating passive income for long-term wealth and retirement. Furthermore, there are additional advantages for holding rental properties, which include depreciation and deductions as well as accumulated equity and growing appreciation.

Depending on what you want to accomplish and your financial situation, there are a few avenues for how to buy investment real estate. One approach could be obtaining a hard money loan. This type of loan can come from an individual or a company, such as Lending Home. Another way is to find a private moneylender or to use your own cash on hand. The difference is in the amount of requirements and fees, such as points (a percentage of the loan), down payment, and interest cost.

To learn more about different strategies, read, “What is the Best Way to Invest in Real Estate? Analyze the Options”.

Why Invest in Real Estate? A Strategy to Build Wealth

Posted by Kate Story on April 08, 2019  /  in NEWS  /  Comments off

I do not shy away at answering, “why invest in real estate” because there are so many lucrative benefits. Whether you are a young adult wanting to get ahead or a retiring worker wishing to maximize your life savings, there are plenty of reasons why it is good to invest in real estate. For example, a few of the benefits being, tax breaks, hedging inflation, and a future income stream. If you are contemplating the decision of invest in real estate or business or “how much should I invest in real estate”, consider both for diversification purposes and weigh the proportions by your situation. Although is no single strategy to building wealth, investing in real estate should be apart of everyone’s portfolio plan.

To answer, “why do people invest in real estate”, one extremely popular reason is for the tax benefits. A person is able to use the depreciation of their real estate to shelter their income from taxes. Since the IRS recognizes a residential real estate asset wears down overtime, they depreciate the asset at a rate of 27.5 years. For example, if you bought a $200,000 building, it would be deprecated by 27.5 years and there would be a tax shelter of $7,272 per year (200,000 x 0.275 = $7,272). This alone can answer why people invest in real estate. Furthermore, the depreciation shelter of real estate becomes extremely important for those individuals who make a higher level of income because they receive heavier tax rates. To see the IRS’s 2018’s tax rates and brackets, click HERE.

If you’re still asking yourself “why should I invest in real estate”, consider the benefit of being able to hedge against inflation. Real estate is considered a great inflation hedge because typically, during times of inflation, home values increase. For example, if there is an increase in the money supply, which causes inflation, and the supply of houses remains the same, the demand will increase, and therefore drive up home prices. This coupled the general appreciation of a real estate asset are two great answers to “why should you invest in real estate”. To understand the broader view of fighting inflation, click HERE, to check out Bigger Pocket’s article “Real Estate as a Hedge Against Inflation”.

Next time someone asks “is it wise to invest in real estate” or “is it smart to invest in real estate” you can assure him or her the real estate industry is a smart move to make. The return on investment is much higher than the yield from Treasury bills and bonds. For example, last year in 2017, the 3-month Treasury bill and 10-year Treasury bond return rate were both under 3%. An average rental return on a real estate investment ranges anywhere from 8-15%, with lows being around 5-6%, which is still at least 2% higher than the bills and bonds (Stern.NYU.EDU). Furthermore, people who flip houses and look for quick cash with higher returns in shorter time frames, usually expect no less than a 10% return. Real estate investments have less volatility, more control, and it’s a physical asset you can see and touch. To read more about how to invest in real estate, read “How Do You Invest in Real Estate? Taking the Plunge”.

  • ***I am disclosing as much information as possible. I am NOT a licensed tradesman and or general contractor. The information should be deemed reliable, but NOT guaranteed. Buyer should ALWAYS do their own DUE DILIGENCE with licensed professionals and or city departments to determine the condition and use of the property prior to purchasing.

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