As the real estate market starts to bottom many new investors are getting into the real estate market today. Most are unaware of the pitfalls that await them at every turn. By learning to avoid the killer mistakes, your real estate investing business can become a very profitable endeavor.

#1 Failing to get the best help (and education)

The first three members of your real estate team are the most critical. Lots of investors lose thousands of dollars because they dont want to spend a few dollars on a good local mentor. A good mentor who really knows the ropes is not an expense but an asset. A good mentor will save many times their cost by helping avoid expensive errors. Second is a good real estate attorney to keep you in line with the law and you will need a good CPA to help structure your business. Leave out or choose the wrong one for any of these and it could cost you dearly.

#2 Impatience

Many intelligent offers are required in order to purchase one good deal. It takes time and patience to land one of those deals. Be patient because if you ever get in a hurry you are probably going to make the next big mistake

#3 Paying too much

Anyone can purchase real estate anytime. The MLS is full of properties for sale, but your goal should be to buy property at a substantial discount. That is a big enough discount to ensure that you make a good return on your time, effort and money.

#4 Believing the TV commercials(and quitting your job)

Does listening to those guys on T.V. talk about how easy it is to make a fortune in real estate with no money, no credit and little or no work really get your blood flowing? If it were really that easy–everyone would be quitting their jobs to start investing in real estate. Investing is a great business, but to become successful you need money, credit, and/or a great deal of hard work mixed with a good education. Cash flow might not be very good at first, so keep your day job!

#5 Failing to do the proper research

There is a certain amount of research that every investor must do before placing an offer on a piece of real estate. For examplethe true value of the property must be determined in advance and you must know what it will cost to hold and get the property ready to market. It is critical that you know all the important answers before you ever make an offer on any property.

#6 Not continually searching for money

The life blood in real estate investing is money. Investors must have access to a lot of money or all their efforts to find good deals will accomplish very little. It takes three things to start a fire, oxygen, fuel and ignition and it also takes three things to build a glowing real estate business, money, good deals, and energy. Remove any of these elements and your fire will go out.

#7 Not bidding consistently

The fuel of real estate investing is good deals, and to get a really good deal you have to make many intelligent offers. In order to grow the business–consistently bidding is absolutely necessary.

#8 Doing your own rehab

Rehabbing a property yourself– is not the best use of your time. Successful investors spend their time finding good deals and not driving nails. Sure–its fun to fix up something that was in poor condition. The feeling of accomplishment is great but that feeling can be very expensive. That time could be spent finding other great deals and finding money to make the deals work. If you do the rehab yourself you will probably spend more money getting things just right. It is much cheaper to pay a professional to do the job and keep busy doing your job which is finding good deals.

By Dennis j Henson

Popularity: 20% [?]

President Obama signed a sweeping health reform bill The Patient Protection and Affordable Care Act on March 23rd. According to the Congressional Budget Office, it is expected to reduce the federal deficit by $124 billion.

Meanwhile its long term impact on landlords, property managers, property management companies and real estate professionals is not clear. If you fall into one of the above categories, you have to consider whether you are an independent contractor, employee or employer as it has different impact on you.

How Health Care Reform rolls out and what happens to who and when:
In 2010

1. Insurance Companies
1. Insurance companies have to remove life-time caps on illness costs, cannot drop you if you fall ill and cannot deny coverage to kids with pre-existing conditions
2. Independent Contractor Property Managers, Real Estate Professionals and Employees
1. Children up to the age of 26 can stay on their parents plan.
2. Medicare D participants receive $250 credit
3. Retirees between age 55-64 are offered re-insurance program
3. Employers Property Management Companies
1. If you own a property management company that offers health insurance, you get a 35% tax credit from premium paid
2. Small employers can get tax credit up to 50% of premium paid

In 2011

1. Insurance Companies
1. Insurers cannot raise premiums without providing justification or will be taken out of state insurance exchange pool
2. Independent Contractor Property Managers, Real Estate Professionals and Employees
1. Medicare D participants receive 50% off brand name drugs while in doughnut hole
2. Employees contributions to Flexible Spending Plans are capped at $2,500 limiting the amount that can be used to purchase health care with pre-tax dollars.
3. Penalty for non-qualified withdrawals from Health Savings Account (HSA) increases from 10 to 20 percent and 15 to 20 per cent for Archer Medical Savings Accounts (Archer MSAs)

In 2013

1. Independent Contractor Property Managers, Real Estate Professionals and Employees
1. If you are single filer and earn at least $200,000 per year or a joint filer earning at least $250,000 you will pay additional Medicare tax of nine-tenths of one percent called Hospital Insurance tax on income above these amounts.
2. Itemized deductions for unreimbursed medical expenses rises from 7.5 to 10 per cent. It has an impact on individuals who itemize deductions.
2. Employers Property Management Companies
1. New Medicare tax is to be withheld by property management companies

In 2014

1. Independent Contractor Property Managers, Real Estate Professionals and Employees
1. All individuals are required to carry health insurance or pay an IRS penalty of $750 per individual or 2% of income whichever is greater
2. Subsidies for payment of insurance cost are offered and family of four earning up to $88,000 (four times the federal poverty level) will get a subsidy.
2. Employers Property Management Companies
1. Employers or property management companies with 50 or more employees are required to provide health insurance or pay a penalty of $2000 per employee per year. State exchanges enable employers like property management companies to purchase insurance at rates similar to employees of big companies.

In 2018

1. Insurance Companies
1. All insurance plans offer preventative care with no co-pays and no deductible

This blog post for Real Estate Professionals, Investors, Landlord, Property Manager, and Property Management Companies is brought to you by SimplifyEm Pay Rent Online and Property Management Software

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Outside Company Distribution

There are companies out there that do distribution of post-it notes. There’s a company called Markot. I ‘m not going to recommend them because I tried them and I was not particularly happy. There are others and you can look them up on Google under “post-it note distribution” and your city name. Try one and see how they perform with small batch before you give them more business.

You tell them what neighborhood you want, you give them the post-it notes, and they’ll go out and distribute them on each and every door. They’ll walk up and down the neighborhood and put them on the doors.
I had some problems with one of my vendors. First, was they’d tell you they were delivering them this week, and then something would happen and it would be next, and then the following week. I had some problems getting them to deliver them on the dates they chose.

Second, I was always concerned when they did finally get around to it, because it seemed like my response was fairly muted compared to when I would have the post-it notes delivered myself by my people I trusted. It always made me wonder if they were getting out there in the exact number they stated.

Hire Someone to Distribute

Again, there’s nothing wrong with paying somebody to do it. In fact, that’s what I recommend, that you eventually get somebody to hire to go out and put them on doors. It’s very easy if you know some people – some young kids, 15 year olds or something like that. You can pay them 10 or 15 cents per post-it note to deliver. They can do it after school or on the weekends. It’s a nice part-time job for a kid.

For the most part, if you know the kid and you can trust they’ll actually deliver them and they count how many they delivered – you pay them after they’re completed. You should know when they’re being delivered almost to the moment they’re being delivered. That’s how often you’ll get calls.

If they start delivering them on a particular street at 4:00 in the afternoon and they deliver 300, 400 or 500 of them, it is almost inconceivable that you wouldn’t get a couple of calls. That’s how effective these are.
Some of these calls might not be very productive. You might even occasionally get a cranky person calling to complain. Tell them you’re sorry, apologize, and maybe you’ll have the kids run over and pull theirs off the door of something. Just deal with the cranky calls.

You will be getting calls almost immediately so you will know that they’re being delivered. I know for sure the date they’re being delivered because I get calls. If they deliver on Tuesdays and Thursdays, then I get calls on Tuesdays and Thursdays. If they don’t deliver on Wednesday then maybe the phone is quiet on Wednesday. That’s how effective these are.

Popularity: 47% [?]

Real estate terms are not very complicated but they can mean the difference to becoming wealthy or just average. When you learn about something new you should always learn the real definitions for the most commonly used terms so that you avoid misunderstanding the experts when they give you advice.

Real estate investing is not only fun to get involved in but it has very basic terms that require you to understand them before taking advantage of the industry.

Lets start with the most basic real estate terms;

Realestate broker: An agent employed on behalf of the buyer to find listed properties on their behalf.
Realtor or real estate agent: An agent hired on behalf of the buyer by the seller to sell the sellers property. Please note that although the agents commission comes from the buyer the agent works for the seller predominantly and will make sure the deal favors the seller.

Property lien: A legal claim or ruling attached to the specific property that demands certain actions from the current and future owners. It is a serious potential pit- fall for the enthusiastic buyer who fails to do his homework before closing their real estate deal. Always check public records for unresolved land claims by certain population groups especially in Cape Town South Africa.

Commercial real estate: Property that is used for the purpose of providing a service to more than one person or entity; such property must be properly rezoned and registered with the local municipal council. Banks frown on owning more than 80% of such property because of the inherent risk associated with the business sector.

Residential property: Is property mainly used for the shelter of individuals and need not be registered as a place for running a business. This type of real estate sector is the most popular with junior property investors because banks will finance up to 150% of the property in good economic environments. Because of the high demand for shelter the risk involved is much less than most of the other real estate investment types.

Lease agreement: An agreement between the property owner and the current, past or future tenant. This is the most powerful weapon any property investor can have in his or her arsenal. There is no such thing as a standard lease agreement and people who try to convince you of this are the most ignorant or are trying to hide something. You can put anything in your agreement; the only snag is that it must comply 100% fully with the local tenant laws of the country where the property is located or you could be sued.

I always include what I want the tenant to do when they occupy any of my properties and I am very careful that I read the corrections that my tenants make on the contract. The contract must be dated, initialed on each page and each pen correction signed otherwise you open yourself up for loop holes.

Do not forget to make copies of the original so that any changes can be proven to come before or after signing.
Conveyance: The transfer of the ownership of the newly bought or traded property from the old to the new owner including all the attached rulings and rights linked with the closed real estate deal. Conveyance of property can be rushed or delayed by either the buyer or the seller to their convenience. Many deals often collapse during the period of conveyance using the escape clause.

Escrow: Is another term used intermittently with conveyance in the American and European real estate transfers. It is also the transition period where property ownership is shifting to the new owner when the buyers requests and the sellers demands are met.

Trust account: An account set aside by the realtors lawyers or the escrow agents to hold the buyers deposit or cash when the ownership is still in escrow.

Offer to purchase: It is a document that identifies the property that the buyer would like to purchase and the price they are willing to pay for the acquisition of that real estate. The seller can reject the offer if they do not wish to sell or amend the document if they would only sell under specific conditions. If the seller accepts the terms on the offer to purchase then they can sign the offer at the appropriate place. The buyer or the realtor now has to prepare the agreement of sale.

Agreement of sale: When a buyer and seller agree on the offer to purchase an agreement of sale is drafted with the seller and the buyers specific requirements listed clearly with dead- lines printed for all to see. The agreement of sale has clauses that both parties must be aware of that will suspend the agreement. A deposit must be placed into the trust account and the property must undergo repairs, evaluation and escrow. The deal has been made and it is legally binding but can be cancelled under certain and specific conditions.

As a junior real estate investor; the legal terms can often seem daunting and scary. The most important thing I will emphasize is have the legal documents in a language you have mastered very well (do not take chances relying on other people to be considerate as the conditions in the binding document can be anything under the sun).
So unless you want to end up paying the seller or buyer for the rest of your life I suggest you read everything before you sign even if your lawyer has given his or her ok. You can cancel those clauses that you genuinely feel do not apply or you simply do not agree to BEFORE you sign. After you sign you any document you are then bound by everything in the contract even if it violates your basic human rights!!

Not even the United Nations can break such a contract. So make sure you know your real estate terms very well.

Popularity: 9% [?]

he Top 7 Fears of Real Estate Investors Today

1. Lack of Cash – Personal incomes are dropping. Unemployment is nearing record highs. Renters in most markets are defaulting. Credit card companies

are cutting the amount of cash available even for those who have amazing credit scores

and always pay back on time.

2. Lack of Confidence – Many investors are lacking confidence in their ability to get through the next three years of this huge downturn. For example, many investors are finding that it’s taking months to close a property deal. If you’re working real estate short sale strategies, because banks are so burdened with offloading inventory, you could wait six months just to receive a BPO (Broker’s Price Opinion).

3. Loan Challenges – A friend of mine couldn’t even refinance

his house for a lower mortgage payment than what he’s paying right now because the household income dropped since his wife’s death. If he can’t refinance his home for a lower payment, what do you think your chances of getting a loan are? What’s more, banks have raised down payment requirements on residential and commercial properties to as much as 40%.

4. Can’t Find Deals – The majority of housing and condo sales are foreclosures, as homeowners don’t want to sell now and lose all the value that they put into the house.

5. Not Enough Buyers – Yes, incentives like the tax credit are beginning to enter the market. Yes, we are starting to see a reduction in new inventories. The key word is “starting.” Yet in many markets, investors are finding a lack of buyers even at bargain prices!

6. Takes Too Much Time – Many old-hat real estate investors are spending their days and nights trying to close deals. Most of their time is spent late at night on their computers, or traveling around the country hopping from one airport to the next, in hopes of getting that six- or seven-figure real estate deal done, just to be disappointed again and again.

7. Lack of Knowledge – Old-hat real estate investing requires you to understand negotiation strategies, NLP mind tricks, what’s-working-now techniques, real estate contracts, and how to adapt to opportunities in more than one marketplace, using more than one investing strategy.

Popularity: 11% [?]