The internet has transformed the world of Real Estate. As a friend of mine recently put it “You used to have to come into a realtors office to find out what was for sale. Now you can just go online and find out!”

There is probably no other field in business that has a higher probability (long term) of creating millionaires than Real Estate. Does that mean you cannot lose money investing in real estate? Generally speaking, the facts prove out that if you are a long term investor it is unlikely that you will lose money with real estate as real estate has appreciated steadily over the long term. However just like all markets, real estate has its ups and downs. If you were unfortunate to have purchased in the most recent historic meteoric rise in real estate prices then you are more than likely upside down on your property today. If you have patience and fortitude and can wait for several years you may see a positive return on your investment. So as with all products and tradeable commodities or investments you have to BUY RIGHT! to increase the odds of locking in future profits. That means you have to buy when many are perhaps pessimistic and sell when many are perhaps overly enthusiastic. So providing you buy right and are in it for the long term real estate is a good business to get involved in.

THE DIFFERENT AREAS OF REAL ESTATE INVESTING

There are multiple arena’s in Real Estate where you can invest successfully and these can be split into two primary categories: commercial and residential investing.

covers Appartments, Offices, Retail Malls, Retail franchises, Storage, Medical Facilities, Warehousing, Industrial facilities. These are all specialist areas each with their own particular nuances and market cycles. Some good resources for commerical real estate investing are:

a) The National Association of Industrial and Office Properties: www.naiop.org
b) The National Apartment Association: www.naahq.org

c) The National Multi-Housing Council: www.nmhc.org

d) The Commerical Real Estate Realtor Network: www.ccim.com

e) Loopnet is one of the largest online portals listing commerical real estate throughout the USA: www.loopnet.com

This covers single family homes and duplexes. Most people are familiar with this arena if they have owned a home. The difference is that you are looking at it purely from a commercial vantage point which may not be the case when you purchase a family home.

Instead of investing in the actual physical asset you can also invest in real estate notes or tax liens. Real Estate notes are promissory notes which are secured by the underlying property. You can purchase notes that have a first or second or third position on the unerlying property. A note in second position (also known as a second mortgage) will carry a higher risk and therefore interest rate than a note that is in first position. Likewise a not in third position which carries the highest risk will require an even greater interest rate to make it worthwhile investing in it. You can also sell a certain number of future installments (payments) on the note for a lump sum for a discounted sum. These notes have a good level of flexibility and will generally carry a higher interest rate than you can get at the bank. If the owner of the house defults on the note you have the security of the underlying asset to fall back on. If you are in first position (lien on the property) then this provides some comfort and depending on the value of the property this will decrease if you have a note that is in second or third position.

These are notes for local property taxes that have not been paid to the local county. The local counties rely on these monies(property taxes) to provide services for the public. So if a homeowner does not not pay these in a timely fashion the local county will sell these notes (obligations) to investors. The notes carry an interest rate which is paid by the county.
At cuh time the county collects the property tax from the homeowner the owner of the tax lien is paid off. These notes (obligations) have a higher lien priority than a first mortgage so in the worst case scenario if the property is foreclosed on the first person to get paid is the holder of a tax lien note.

REAL ESTATE MENTORS

There are many real estate courses and mentors in the market place today ranging from Robert Kiyosaki’s “Rich Dad Poor Dad” organisation, Trump University, Al Lowry, Robert Allen and Dean Graziozi to name just a few. They are all quality organizations providing you are willing to follow through and take action! Will you make mistakes. Yes, but they will not define you. You will overcome the challenges and if you opt for a mentor (and get a good one) you will make it though your first deal and be on your way.

Likewise there are mentors if you are interested in commercial real estate investing such as Scott Shiel or David Lindahl (who specialises in Appartment buildings).

While many courses and Real Estate Guru’s will tell you you can buy real estate with no money down and this is true! do not necessarily expect that this is common or the norm. It can be done and is being done on a daily basis but the conditions need to be right for it to occurr and benefit all parties.

Likewise one can purchase all the above property types in Foreclosure but again this is a specialised field (and yes there are mentors who specialise in this as well) and you need to know what you are doing in order to succeed. While the idea of taking advantage of people in desparate situations is not appealing to many, people in the foreclosure business are providing a valued service to people facing foreclosure often saving them from having to declare bankruptcy and giving them a chance to rebuild their credit. And when you are facing the worst, the option of not having to declare bankruptcy can be welcomed! However it is not for everyone.

Again the good news is that there are a good variety of investment properties in all different sizes, the US governments tax laws greatly favor real estate investors, the tax benefits are tremendous (unparralled in fact), and providing you insure yourself from the various potential libailities and are a responsible, diligent landlord or investor you can build up considerable wealth over the long term.

Again this is a very short summary of real estate investing possibilities.

To Your Success!

Brian
For the team at Home Business Expert Match

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