The buy and hold investment strategy is the most common strategy in real estate because of how easy it is to understand. It simply involves buying a property and renting it in order to gain on the equity and possibly the positive cash flow. That’s it! So why doesn’t everyone do this if the strategy is so simple? Like all the different types of investment strategies there are calculated risks and when one doesn’t look at these risks it can lead to losses or increased debt.

This is especially true after the Canadian government recently announced new mortgage rules which will take effect April 19, 2010. These new rules involve borrowers to be able to handle a five-year, fixed-rate mortgage, even though they may get a shorter term and lower rates. As well, a minimum down payment of 20 percent will be required for government-backed insurance on properties not lived in by their owners which is up from the previous 5 percent. This makes it much harder for those who wish to go into real estate investment. Therefore, one should start by crunching the numbers before starting to buy properties to see if they are able to meet these new requirements and still make a profit.

The buy and hold strategy’s main focus is to purchase a property and hold it in order for the equity to grow so that when the investor sells they have a large return on their investment. Equity can be calculated and predicted to a certain extent which investors can combine with the knowledge of the market and calculate the right time to buy and sell thus maximizing their profits. Many people attempt to do this especially when they see if the market is down and know it will rise soon after and jump at the opportunity for easy money. However, this is just one part of the calculation and many who focus only on the equity often end up in failure.

The secondary focus with this strategy is to make a positive cash flow where the income is greater than the expenses of running the property. This would provide extra income to the investors business or to them personally. Experienced investors enjoy building portfolios of properties where over time all the income values exceed the expenses for their properties and thus creating a large income for them to live on and invest in other projects.

So, what should be looked at in order to decrease the risk of failure? Expenses would be a good area to start. For example, it is not uncommon to see a property be vacant for at least a couple of months. Vacancy rate is important to consider since it takes into account the possibility of the property being without renters. This can lead to the investor taking on extra mortgage payments. What if there is a problem with the furnace and you need to replace it? Do you have enough money set aside to fix such problems? Expenses can easily determine quickly if you are able to afford keeping the property by seeing if there is a positive cash flow each month.

Besides just looking at the income and expenses what are the other key components to look at for this strategy? Buying the property at a low price especially when it is below market value is another component. The lower you are able to get the less you have to pay for your mortgage payments which contribute to less expenses per month. As well, this generates more equity which becomes more profit in the end when the investor finally decides to sell the property.

Appreciation and inflation rates should be something to look into as well. If both these rates are known then one can predict what will happen over the term of their mortgage. For example, if the property starts creating a debt after the third year then an investor could aim to sell within that time in order to gain from the equity before slowly going into debt. The same holds true for the opposite. If over the mortgage term the increase in income is growing then the investor could think of renegotiating their mortgage and holding on to the property for a longer period to increase on their return on investment and make a positive cash flow.

There will always be a risk when it comes to real estate investment, however just spending the time to do the calculations can help you understand the market and limit the risk. If one can see the cash flow of a property prior to owning the property then it is much easier to predict whether it would be a good investment or one that would give you many headaches and increased debt.

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.

Today’s market benefits two groups of buyers: first-time buyers, and buyers moving up. It is an excellent market to buy, especially if you don’t have a current home to sell. For this reason, we’re seeing a lot of first-time home buyers opting to buy instead of rent. Since these first-time buyers are not having to make contingencies to sell a home before buying another, they are able to use that negotiating power elsewhere (price, for example).

Even if you have a home to sell, it’s a very good time to move up. It may take a little while to sell your current home, and you won’t get for it what you would have gotten even a year ago. But, remember that you’ll also be paying considerably less for the home you’ll buy if you’re moving up. For example, let’s say your current home is worth $250,000 on today’s market. If you move up and find a larger or nicer home for, say $350,000, you’ll be saving a lot of money in the long run by buying now. Depending on area, you’re looking at a roughly 5-8% drop in prices for the past year. That percentage difference for savings is much higher for the more expensive house – in other words, that 5-8% loss in selling your house will be more than made up in buying a more expensive house now rather than later.

Many buyers are using this opportunity to move up, since prices in the next couple of months seem to be about as low as they’re going to get. We’ve seen a lot of past clients coming back to us to move up, as well as buyers who have been sitting the fence waiting for prices to get as low as possible. This is a great time to buy with Charleston’s strong buyers’ market.

In short, today’s market is ideal for first-time home buyers and buyers looking to move up. On the other hand, it’s not beneficial for buyers looking to downsize or liquidate assets. So, if you’re considering downsizing, it would be better for you to wait until the market picks back up. Less than a year from now prices should be well on their way back up, and you should get considerably more money for your home than if you sold now.

The world is getting more expensive to live in, isn’t it? The cost of living has no where to go but up, up and up. There seems to be no end. So, what can you do about it? Ever thought of earning through property marketing or real estate? If you haven’t, then try considering it. It’s a great way to earn money. A lot of people have made a living out of it.

How It Works

There are a lot of ways that you can earn money through real estate. You can work as an agent and sell a house or two every now and again. Or you could buy a property, improve it and sell it for double or triple the amount you spent. It may seem like a risky business. But, as long as you have the skill and you have an in depth knowledge about the business – you have nothing to fear.

Getting Started

Keep in mind that ‘Little Knowledge is Dangerous’. That is why it is highly recommended that you know as much as you can about this type of business before you plunge head first. Never assume anything. If you don’t know something – do your research! Ask the experts. Study all the materials that you can get your hands on. Spend time on the web looking for sites that offer information regarding the world of real estate. You can also further your knowledge by working as a junior agent in a real estate firm. That way you can learn the ins and outs of how to sell a house or a property.

Investing Can Be Steep

The main thing that scares people away about this type of business is the fact that they have to invest a lot of money in order to get started. Some people take out loans while others use their life savings. Some start with their own house. They renovate it, sell it, move to another house and repeat the cycle. The only problem with that last strategy is that life can get nomadic. And not a lot of people want a nomadic lifestyle.

Sell, Sell, Sell

Once you know all you need to know about the world of real estate and you have the financial support to meet your drive. Then, it’s time to get started. Start small, think big. Buy a property that you know will attract buyers. Improve on it, sell it and enjoy your revenue. If you get lost along the way just think what Jeff (Jeff Lewis from “Flipping Out”) would do.

Whether you are buying or selling Flint MI real estate, Genesee Co MI real estate or any Michigan home, the information here may be helpful. Particularly if you are the “bruised credit buyer” or the “motivated seller” of real estate, Genesee County MI investors, like us, want to help.

First, a little about Genesee County, in case you are new to the area. In terms of real estate, Genesee County MI covers approximately 640 square miles, including several lakes, parts of the Flint and the Shiawassee Rivers. Most of the lakes are in the southern section of the county, around the cities of Linden and Fenton. In all there are 11 cities, 5 villages, 17 townships and a number of unincorporated communities in the county.

Buying Real Estate Genesee County Michigan

Whether you want a city house or a country house, an historic area or a modern community, waterfront activities or ample shopping, you should be able to find something you like in Genesee County. But, maybe the problem is not finding something you like; maybe your problem is past credit issues. If so, then you are not alone. The state’s economy has suffered over the past several years. Many residents have suffered as well.

There are a large number of factors that can affect a person’s credit rating; unemployment, divorce, inaccurate reporting, just to name a few. They say that bad things happen to good people. We have found this to be true. We try to help good people out of bad situations with real estate, Genesee Co MI real estate and other areas of the state.

You may feel that your situation is hopeless, but it is very likely that you are wrong. If you have steady employment, can afford the monthly payments and have a few thousand for a lease option consideration, then you can probably be a homeowner in less time than you think.

Even if you have been turned down for traditional financing, you can own your own real estate Genesee Co MI is one area that is uniquely suited to a person in your situation. As investors in real estate Genesee County Michigan is just one area that we have chosen to work in. You tell us what you are looking for and we locate a home for you or you locate it yourself and we step in and negotiate with the seller.

This is a unqiue program that works very well; we are not real estate agents or brokers. We set up what is called a sandwhich lease option and work on credit repair with you.

This is important for two reasons: it in effect allows you to buy a home “using our credit.” While you are in the rent to own, we work with you on improving your credit in conjuction with a credit repair company. This will allow you to increase your score with time and get the needed mortgage through our mortgage brokers / loan officers so you can purchase the rent to own home you are in.

Also, improving your credit score will save you a ton of money over the loan term since people with poorer credit pay substantially higher interest rates on the principal loan they borrow for their mortgage.

Selling Real Estate Genesee Co MI

The property values in many areas of Michigan dropped significantly last year. Some experts say they have bottomed out and will begin to rise again, soon. Others are not sure. Regarding the average selling prices of real estate Genesee County Michigan has a wide range. For example, the median asking price for a home in Flint is less than $75,000, while in Grand Blanc the median is nearly $200,000. Regardless of the price, many of these homes have been on the market for four or five months. That may be too long for you to wait.

For many people trying to sell real estate, Genesee Co MI and the economic struggles of the area have caused problems. In Flint, there are over 1100 foreclosures, today. In Grand Blanc, there are 165. If you are trying to sell your property and you are running out of time, we may be able to help. In some cases, we can pay cash for your home. We may be able to take over the mortgage payments. We are willing to try to find a solution for your problems, if you are willing to work on terms. We look for a win-win situation.

We have unique programs that work for buyers and sellers of real estate Genesee Co MI is one area where we put our programs to work.

Dallas real estate agencies help in buying and selling residential and commercial property in Dallas and its suburban areas. Like real estate agencies elsewhere, they do not own or buy any property that they list. They work on commission for their clients. Within the broad buying and selling functions, the real estate agencies in Dallas help in relocation, moving, rentals, mortgages, and other realtor services like insurance. The range of options offered by Dallas real estate agents for residential property includes houses, apartments, condominiums, lakefront homes, and sometimes ranches, too. Dealings in commercial property are largely restricted to the business areas, and some of the newly developed and developing areas.

The Texas Real Estate Commission (TREC) is the state government agency that issues licenses to real estate agencies operating in the state of Texas. Hence, the real estate agencies in Dallas come within the purview of TREC. TREC requires real estate brokers and salespersons to have sufficient education that would make them eligible to hold a license to work as a real estate agent. This is to ensure that consumers of real estate agencies get to interact with qualified and competent agencies.

Merely holding a license issued by TREC does not qualify a real estate agency to be a realtor in Texas. To qualify as a realtor, a real estate agency or professional should be a member of the National Association of Realtors, the national real estate industry association. Most real estate agencies in Dallas are members of this association, apart from being members of the MetroTex Association of realtors, the association for North Texas real estate professionals, which also consists of the Greater Dallas Association of Realtors. The Texas Association of Realtors is a statewide organization with 80,000 members that serves as a platform for realtors in Texas, including those in Dallas.

Most of the real estate agencies in Dallas have individual websites that list all the properties that they advertise for selling or buying. The websites are helpful for non-Dallas based clients to find property listings in Dallas quickly.

Real estate markets are cyclical. The most recent downturn was the worst in my lifetime (I’m 66). Unfortunately we can’t do it over again but if we could, what would we do differently?

Buyers

The greater your sense of urgency, the greater will be your risk of making a big mistake. Buying at a Sales Launch Event, sometimes called “priority selection events,” makes no sense. Launches are designed to be extravagant, crowded happenings where a sense of competition for a limited number of properties fosters a sense of urgency. Planned amenities are displayed in beautiful renderings. Lifestyle is promoted. Free food and drinks are plentiful. Don’t fall for it.

Get it in writing. If you can’t reach a written understanding with the developer or seller, you’re open for trouble down the road. And while you are negotiating, take off you happy ears. You can’t expect the seller to be honest with you if you can’t be honest with yourself.

Don’t get sucked in by easy credit. Just because someone is willing to lend you a lot of money is not sufficient reason to borrow it from them. Again, be honest with yourself. Commit to spend no more than you can afford. Investments are built upon a solid plan. Speculation is built upon hope.

Spend more time researching the details of your real estate purchase than you did researching your recent HDTV purchase. If you wait till you get to the closing table, it’s too late. You’ll be signing or initialing piles of forms. And you will sign because if you don’t, you don’t get the house. So do your homework before the closing.

Sellers

Buyers don’t care. They don’t care how much you paid for your home. They don’t care how special you think it is or how much money you need to get it or how much you spent to fix it up. They don’t care. The only thing that matters is what your property is worth to them. Get over it and price accordingly.

Don’t fall in love with your assets. If you’re selling in a declining market, don’t follow the market down. Get ahead of it. Even if your property is the lowest priced listing in the area, if it’s not selling, it’s not low enough. Price aggressively or suffer the consequences of continuing carrying costs and additional price reductions (all too late). It doesn’t matter what similar properties are listed for. The ONLY thing that matters is what similar properties are SELLING for.

Because you paid $50 thousand more than the seller paid only a few months ago, you cannot assume the person behind you in line is going to do the same. Developers do not create speculators any more than casinos create gamblers. Casinos are built because gamblers already exist. If the music stops, what will you do if all the chairs are gone?

Real estate is not liquid. You can’t call your realtor and tell them to “sell my property at the market first thing Monday morning.” It may take months or years. Real estate is not liquid like stocks. Carrying costs can eat you alive. In gated or condominium communities, these include association fees and possibly club dues.

Your house is probably a lot more unique to you than it is to a prospective buyer. Your house is being compared to a lot of other houses. Most of them are spruced up to impress buyers too. Speaking of being unique; all those personal things around the house that make it uniquely yours make it more difficult for a buyer to think of it as theirs. Put away the pictures and knick knacks.

Have I scared you? A little bit, I hope. We are at the beginning of the next cycle of wealth creation. I doubt the next run-up will be as dramatic as the last one, but we should still be careful. Understanding risks can help us avoid them.

The Frisco Texas real estate market covers an area of 70 square miles, north of Dallas and west of Lewisville Lake and is home to numerous indoor and outdoor events, retail businesses, restaurants and a variety of home styles. From apartments and townhouses to luxury homes in gated communities and everything in between, Frisco TX real estate has it all. Choosing the right Frisco Texas real estate agent can make the process of buying or selling easier for you and hopefully the information provided here will make it easier for you to choose the right community and the right agent.

Current Facts for the Frisco TX Real Estate Market

Currently there are 2011 homes in the MLS listings for Frisco Texas real estate, including 615 new homes. The median price for a home is $323,999, up nearly 1.5% from the previous month. Asking prices range from less than $100,000 to several million, depending on square footage, lot size, community and other considerations. If you are looking to sell Frisco TX real estate, ask your Realtor how he or she will help you determine the asking price. A Comparative Market Analysis is the best tool for this purpose. It will allow you to see the final selling price of other properties similar to yours.

Frisco Square

One of the unique communities in the Frisco Texas real estate market is Frisco Square, a 147 acre mixed-use community designed for those who want to live, work and play in the same neighborhood. This planned community designed by world renowned architects focuses on being pedestrian friendly. You can walk to the restaurants, shops, city hall, the library, the Heritage Center and Pizza Hut Park. The Square hosts several yearly festivals including Fair in the Square and the Great Steak of Texas Festival. Townhomes in the Square range in size from 2000 to 3000 square feet and in price from around $350,000 to $600,000.

Stonebriar Park

This gated community in the Frisco TX real estate market offers luxury home buyers estate sized homes and lower maintenance villas. Stonebriar is composed of six picturesque residential villages arranged in a European style around large expanses of parks, ponds, fountains and custom landscaping. Luxury home builders have created one-of-a-kind homes, using historically accurate European style architecture. Located minutes from Dallas North Tollway and Preston Road, Stonebriar is an easy commute to Dallas, DFW and Love Field. Nearby amenities include Stonebriar Centre Mall, Frisco Medical Center and Hall Office Park. Prices range from the $700′s to over $3 million.

Choosing a Frisco Texas Real Estate Agent

First, look for a Realtor. Not all agents are members of the National Association of Realtors. This is an organization for the self-regulation of the Frisco TX real estate industry. Realtors are committed to providing expert service to buyers and sellers. Other certifications can make choosing a Realtor for your specific needs easier. A CLHMS designation means that the agent is an expert in luxury home marketing. An ABR is an Accredited Buyer Representative, someone who is particularly helpful for first-time buyers. There are many other certifications that you can look for.

Residential real estate markets generally move very slowly and trend in a single direction for long periods of time. Once these markets reach an inflection point, the direction of price movement changes, and the balance of negotiating power shifts from an advantage to one side to an advantage for the other. However, most market participants do not recognize this change for some time. Sellers continue to price and attempt to sell using tactics that worked during the rally, and they find they are unable to sell their properties. It often takes two years or more before sellers accept the reality of the new market and adjust their attitudes and behaviors to the new dynamics of a buyer’s market.

During the bubble price rally, sellers and realtors, the agents of sellers, had everything going their way. It was easy to price and sell a house. A realtor would look at recent comparable sales, and set an asking price 5% to 10% higher and wait for multiple bids on the property, some of which would come in over asking. The quality of the property did not matter, and the techniques used to market and sell the property did not matter either. As far as buyers and sellers were concerned house prices always went up, so the sellers were thought to be giving away free money; obviously, the product was in high demand. As the financial mania ran its course, buyers became scarcer; all the ones who could buy did buy. The buyer pool was seriously depleted leaving prices at artificially high levels. When the abundance of sellers became greater than the number of available buyers qualifying for financing, prices began to fall.

In a buyer’s market, buyers have the upper hand, and sellers need to adjust their pricing tactics to reflect this fact. During a rally, many buyers must compete with each other for the property of a few sellers. In a price decline, many sellers must compete with each other for the money of a few available buyers. It is common for sellers to ask their realtor to find a buyer who will appreciate the “unique qualities” of their property. Every seller thinks their property is the finest in the neighborhood and certainly commands a premium 5% to 10% more than their neighbors. These fantasies are reinforced by the behavior of buyers during the rally. At the risk of losing the listing, the realtor must find a diplomatic way to convince a would-be seller their property is average at best and needs to be priced accordingly. It is a difficult challenge for an experienced realtor to persuade an owner her castle is a cottage. Failure to educate the sellers to the reality of the market wastes the seller’s time and the realtor’s resources. Experienced realtors who thrive in bear markets earn their commissions.

Sellers in declining markets must compete on price.

Only the best properties can command prices equal to recent comps. In a buyer’s market, there are no premiums: getting the price of recent comps reflects a premium because prices are declining. Properties with negatives must price 10% or more below recent comps to attract the attention of buyers. There are many books and articles written about staging a property and various techniques a seller should employ to sell their home. Most of these writings pander to the ego and false hopes of sellers who refuse to compete on price. No amount of sales and marketing is going to convince a buyer to overpay in a buyer’s market.

Price is the ultimate amenity.

Buyers

Looking for a home

-Use Internet for overview of properties, communities, and schools.

-Visit potential neighborhoods at different times of day.

-Research price trends in communities and neighborhoods.

-Consider resale prospects on home before you purchase.

Get your new home inspected before you buy.

-Hire a home inspection professional who is certified or licensed.

-Attend inspection, ask questions and take notes.

-Use inspection tour to verify home fits your needs.

-Submit inspection problems to seller for remedy.

Research home financing options before making a decision.

-Fixed rate. The interest rate you pay is fixed over the term of the loan.

-Adjustable rate. Interest rate changes at end of adjustment period.

-Seller financing. Mortgage contract between property seller and you.

-Avoid paying Private Mortgage Insurance. An insurance fee charged monthly to higher-risk borrowers less than twenty percent down payment.

Retain a real estate attorney and buyers real estate agent.
-An attorney should review contracts before you sign them.
-Your attorney is your legal advocate from contract to closing/escrow.
-Locate a real estate agent who has a fiduciary responsibility to you.
-Fiduciary. Part of the common law of agency, indicates a relationship based on trust.

Understand common contract terms.

-Contingencies. A provision in a contract requiring certain acts to be completed before the contract is binding.

-Approvals. Contract period where the sellers, their attorney, you or your attorney can approve or void the contract.

-Earnest money deposits. Money given to the seller at the time of contract is made as a sign of the buyer’s good faith.

-Tax Pro-rations. Credit issued at closing from the seller to the buyer for unpaid property taxes.

Sellers

Gather opinions of value from professionals on your home.

-Invite three real estate agents to submit a price range based on recorded recent sales.

-Consider hiring an independent real estate appraiser.

-Use similar properties based on age, condition and size.

-Properties sold in the last six months offer the best indicators of value.

Stage your home before buyers come through.

-Streamline clutter and place the focus on your home.

-Neutralize colors so buyers can visualize their belongings in your home.

-Visit new-construction model homes to gather ideas from the pros.

-Invite family, friends or real estate agents over for feedback.

Internet marketing provides wide exposure for your home.

-Have a virtual or digital tour of your home in multiple websites..

-Post interior and exterior photos of your home on the Internet.

-Hire a professional to write a description of your home.

-Utilize maps to showcase your location for out-of-town buyers.

Understand the elements of a contract to purchase.

-Require all offers to be in writing.

-A good contract has favorable terms in addition to price.

-Limit fixtures excluded from sale of home to a maximum of three.

-Keep negations non-emotional and amicable.

Recognize the variables that real estate agents can’t overcome.

-Buyers bypass over-priced homes.

-Homebuyers discount homes in poor condition.

-Homes with poor locations have longer market times.

-Buyers are more relaxed and curious during showings when sellers are gone