Real Estate Investment

Real Estate Investment questions and answers

Learn more about Real Estate Investment at TeenAnalyst.com; The number one website for young investors.

Q: how does Real Estate investment work? How can you make money in a foreclosure?
Can anyone explain how real estate investment work. name some investment you you can make money of. Finally what is the process of foreclosure steps to make money and how does work. 10 points for the top answer.

A: It's easy to find property you can buy cheap right now. The problem is you won't be able to sell it easily to get your profit back after you fix it up. You're looking for easy money--- real estate isn't it. Unless you can afford to buy some cheap properties now and rent them out for a few years until real estate stabilizes, and then sell when the market gains momentum again.

Q: How do you get a local real estate investment club to learn about your house for sale?
I have a house for sale at an excellent price, no realtors involved, and want real estate investors to take note. How can I persuade the person in charge of our local real estate club to distribute my e-mail regarding my property? They get solicited all the time, I'm sure. I already e-mailed my property offer and photos to the generic property investment club e-mail address, is this enough? Will they distribute it to all of their members?

A: Tell them

Q: What business type should I start my real estate investment company as?
I need some good advice on whether I should start my California-based real estate investment company as a sole proprietorship, a partnership of some sort, or some kind of a corporation. The general purpose of this company is to purchase and rent out residential and commercial real estate. Any help would be greatly appreciated.

A: I'm in the same boat and looking to buy my first property as well. I set it up as an LLC. Sole Proprietor is generally a bad move in my opinion as it offers no protection of personal assets should something happen to that property. If you want to send me an email through the system here, I'm more than happy to chat about what I've done, who I've talked to, and what contacts I've made.

Q: Can anybody answer this real estate investment company advice?
I'm almost 90% sure that i want to start my real estate investment company as a corporation not a LLC. I was wondering is this a good idea. Also, can't i sell shares of my company to private investors to raise capital. Any advice on starting a commercial real estate investment comapany will help.

A: I think you are right on starting as a corporation. HOWEVER...as legalities vary from state to state on private investors, I think you really need to find a good small business attorney in your area, pay him a fee, and find out the in's and out's from there. A lot to consider with investors. 1) Are they going to be silent partners? Or 2) Are they going to have an equal say in how the company is run? Would be worth the fee.to find a good business attorney to lay it all out for you. Or find a book on amazon about starting a business. Once you are using someone elses' money, the company is no longer yours exclusively, unless you have a proven track record and your investors are willing to leave you in full control.

Q: How to be Real Estate Investment Group and how can I get Started?
I want privately held investment and real estate companies engaged in the acquisition, development and management of select real estate projects and selected business opportunities. I want to developed over 4,000,000 square feet of urban real estate including office, hotel, retail, town-home and commercial parking properties. How can I get started? Thanks

A: You need a team. See if there are any real estate investment groups in your town. Google it. Then go to yahoo groups, msn groups and google groups and search for real estate investment groups in your community. Find out when they meet and go sit in on the meetings. Don't discuss your plans until you know who you're dealing with. You're there to learn first, network second, and do business third. Your goal is to build your team (investors - contractors - etc)

Q: How should profits be split on a 3-way real estate investment?
I am involved in a 3-way investment on a rental property and we are being forced to sell because of a DOT project. Our profit on this property will be approximately $75,000 and we need to figure out how to split this up. Being close family members, we weren't too concerned about figuring this out we bought the property. I would really appreciate any suggestions from real estate investors experienced with partnership investments like this. Here are the figures for the capital and work/mangement invested by each party. Investor #1: Invested $150, 000 by taking out a regular home loan. Lived at the property and payed "rent". Did 85% of the maintenance, improvements and rental property management. Investor #2: Invested $75,000 from a home equity line of credit. Did 0% of the maintenance, improvements and rental property management. Investor #3: Invested $25,000 from a home equity line of credit. Did 15% of the maintenance, improvements and rental property management. Thank you!

A: Profits based on pre arrangments made at time of investments. Normally 1/3 each, after costs are settled. Profts are divded after all actual costs involved. So first, all receipts must be settled. Investor 1, and even 2 and 3 may have made payments necessary (preferrably as agreed), and will be paid off. Investor one received quid pro quo benefits by living at the site and in turn was responsible for a degree of on site presence (such as overall supervision and being on site daily). But investor 1 is entitled to receive compensation for actual trade work at a rate prearranged to. Some people would say that investor one should not get a bigger cut, and they would be right. But investor one can file a receipt for payment of actual work (such as building something, or doing certain specific measurable jobs, like laying tile, carpentry, even painting). Cleanings, supervising, worrying, running errands, grappling with issues, and being a hero do not count as tangible work, unless pre-arranged to as the "general contractor" payment.

Q: What is the best real estate investment trust fund to invest in?
I heard that REIT(real estate investment trust funds) are the way to go, I plan to invest in REIT through Fideletity, and was wondereing which company has the best reit funds I can invest in?

A: REITs have had a great run these last several years. Be aware it may not continue. I do not know the best one. But there are some index funds of REITs. Think about investing in those. They were among the best performing REITs this year. RWR and VNQ and IYR. Each is up about 38% ytd. Sort of a broad brush approach to picking the best. Just pick them all.

Q: How can I prove physical/legal feasibility of a Real Estate Investment Proposal??
I have to do a project for a class where i have to propse a real estate investment project. I need to prove that the investment is physically and legally feasible. Any suggestions or ideas on things i could include to prove this?? The investment will be for the purpose of rental income and I was assigned a single family residence.

A: I think what that means is that you need to show the title is clear, the home has no liens, the home passes an inspection and possibly an engineers report. That the home is a bargain show the land value, and home value from the county tax office. Search google for (county name) tax appraisal district, and then search by address. Show that the taxes are current or of nominal balance owed. Do a market analysis of the area, you may get lucky and a realtor might help you out by giving you a copy of a recent one they already did. If the house needs work but is in a good area you can resale it and make a profit. Any lender likes that because if the property forecloses they can get money back on it. You have to show every aspect of why they SHOULD invest in your investment. Make them believe that if they pass it up they will be making a mistake. Since this is a class, you may say that you have already received a voucher from a lender, so your credit is good. You may add in something like consideration of the age of the home and what sort of maintenance costs your looking at that would be above the income you would make renting the property. Your income vs. expendature ration should be in the black. If you can't get a real market analysis, just make one up. You could say that as a backup plan if you can't find a renter you are willing to rent section 8. Good Luck and HAVE FUN!!!

Q: How do i legally open up my own Real Estate Investment Company?
Just wondering how i legally open up my own Real Estate Investment company. Is a LLC or an INC better?

A: Your best bet is to register as an LLC - it is a lot more flexible than a corporation. Additionally, from my observations, most real estate investors prefer LLCs rather than corporations. In fact, most of Donald Trump's companies are LLCs. Anyway, to open a real estate investment co., you must have a name for your company, and you must register it under a state. Most real estate investors register their companies in Delaware or Nevada because these states seem to be the most flexible when it comes to business. You'll have to pay an initial fee for registration and annual taxes for your profits. To register, go to www.corporate.com for further information. BTW, you'll also need to hire a lawyer and an accountant to avoid legal issues and pay less taxes.

Q: Are townhomes a good real estate investment?
I wanted to know if townhomes are a good real estate investment. I've heard mixed reviews from different sources. For instance, I've heard that in a bad market, these types of properties depreciate the most. I also heard that they are harder to resell and get the full value out of them. Does anyone have any experience with this?

A: IN GENERAL, townhomes do depreciate more than single family homes in a bad market...and, you typically do have more difficulty getting your money out of a townhome than you do a single family home. The big problem with townhomes is that they often cost just as much as a single-family home...yet don't offer anywhere near the amenities. With a townhome, you typically get little-to-no yard, you have to deal with at least one common wall, you're forced to pay sometimes exhorbitant HOA fees, and you don't usually own the ground that it sits on. So, on it's face, a townhome really DOESN'T look like much of an investment. However, that's not the whole story. Really, (like everything else in real estate) alot of this depends on the location. For instance, if you're talking about a townhome on Miami Beach, then it could be a huge money-maker and a great investment. However, a townhome in Grand Forks, North Dakota would be right up there with Enron and MCI WorldCom stock as a bad investment. You need to look at the specific real estate market that you're considering investing in and ask yourself some of the questions that others here have mentioned....

Q: Are there any real estate investment courses out there that arent scams?
I am basically looking for a course, if anyone knows of one that isnt a scam, that teaches the basics of real estate investment.

A: To make a profit requires consistency. To have consistency requires you know and speak the language. Take the real estate licensee course. You will learn most of the ins and outs plus you’ll meet the real players in the real estate business. Because they too know that the real money comes from knowing the ESSENTIALS. There are no short cuts to success in real estate.

Q: Has anyone ever heard of getting an SBA loan for the downpayment of real estate investment property?
is it possible? is it permissible? i want to buy a plex and on the verge of closing a hardmoney loan to get it, i have the score for conventional stated just not the downpayment required. I have a real estate investment LLC, would it be possible to get an SBA loan just for the downpayment in order to get me started. any all tips welcome. thanks

A: The SBAdoes not make this kind of loans.

Q: I need a video on real estate investment?
I'm looking for a video on real estate investment . Do you know of any you can recomend and how to get it?

A: There are many companies that would like your money. Below is a link to one site that has real estate investments resources.

Q: Looking for tips on foreign investment in US real estate?
I'm thinking of buying into the slumping US real estate market this year and looking for tips from any non-US residents. I'm Canadian and would really like to hear from any others currently holding US real estate income investments. In particular, I'm wondering if real estate investments have to be cash sales or if banks will cover your mortgage. (either in the US or in your home country) Any other info would be greatly appreciated.

A: You will find it difficult to find a US bank that is willing to give a loan to a foreigner, especially now. Check in Canada if a bank is willing to give you the money to invest abroad - though that might not be too easy either. I usually buy my properties cash and then take out a home equity loan on them. The rates for a second mortgage are not as good, but much easier to obtain.

Q: What questions I got to ask to real estate investment banks? I need to pick between 4 firms for a perm. loan.?
My firm, a real estate development firm, needs to get a permanent loan (approx. $50 mm) on a retail shopping center that will get built by April 2008. I need to choose between some loan experts (real estate investment banks) and I want to know what to ask them in order to make the best decision. Some examples of these questions are: What would be your commission on the loan? I heard it's usually 1.00%. How will you staff your services for my need? I want to know what else to ask. Thank you for your help.

A: Mario, I'm a Canadian RE invester (small) with about 55 rental units, commercial and residential. The best way to get answers is being honest, and telling whoever you call upfront you're new at this, and hired to choose a lender for 50 Million (or whatever) dollars for your firm. Ask them simply how it works and what fee's they charge. For instance, there's sometimes a fee built into the interest rate that you don't know about that gets kicked back to the mortgage broker. I've had 1.5% fee's literally eliminated to 0% depending on the size of the mortgage (or blanket mortgage.) Good luck, oh, and here's money in the bank for you: Ask a bunch of my friends at the best online realestate forum run by investers much bigger and smarter than me: Its called magicbullets forum, tell them NetWorth / Chrisvet sent you. They'll give you phenominal advice.