REAL ESTATE PARTNERSHIP STRUCTURE 101: Do’s & Don’t’s
Partnerships can be a great way to pool resources and increase your chances of success in Real Estate Investing, but there are a few things you need to know before you get started. Almost every successful real estate investor has gotten where they are today by teaming up with other people to do bigger and better deals. As the African proverb goes, if you want to dash off and go fast, go alone, but if you want to truly go far, go together. The integral component of a successful real estate business lies in being aware of its incredible opportunities and utilizing them at the right time. You can easily Buy a house for the price of a car and be the owner of your own sweet home. At MY SMART COUSIN, we act as your most trustworthy Real Estate Investment coach who is determined to make you aware and teach you about real estate investment strategies. We help our Black & Brown folks mainly women to scale their finances and how they can Buy a house for the price of a car, not one but thousands. If you’re like most people, you probably think of real estate as a pretty safe investment. After all, everyone needs a place to live, and demand for housing always exceeds the supply, right? Well, it turns out that real estate can be a risky investment after all – especially if you don’t know what you’re doing. In this blog post, we’ll take a look at some of the do’s and dont’s of real estate partnerships. So whether you’re just starting in real estate or you’ve been investing for years, read on to learn more! WHAT IS A REAL ESTATE PARTNERSHIP STRUCTURE AND WHY WOULD YOU WANT ONE FOR YOUR BUSINESS? When two or more investors combine their capital and expertise to buy, develop, or lease property is known as a Real Estate partnership. Both the real estate entrepreneurs decide to work together in a professional environment and put their endless effort into accomplishing a single goal. For most real estate partnerships, the general partner takes on more responsibility and liability in exchange for a bigger share of profits. However, some only have passive investors or limited partners who don’t participate actively except when necessary One might wonder, why would he want a partnership in the real estate business? Well, there are many benefits. For starters, it’s easier than trying to do this on your own! You also get more exposure and an outside perspective which can help guide you in the right direction when making decisions about what kind of investments or properties will best suit both yourself as well as those who invest alongside them (i e.; partners). You’ve probably heard stories before where one investor seeks out another looking for financial backing but if that isn’t possible then maybe consider putting together some sort of group deal-like structure where everyone contributing something gets their desired outcome. THE 3 MOST COMMON ENTITY PARTNERSHIPS There are numerous ways through which Real Estate partnerships can be formed. Amongst them the most common types are – ° LLC or Limited Liability Company ° LLP or Limited Liability Partnership ° S-Corporation The benefits of owning a real estate partnership are twofold. First, the income or losses from your investment will be passed through to you on personal tax returns which eliminate any taxation at both corporate and private levels; second these partnerships offer extra-legal protection should there be claims against other assets not directly associated with this particular business venture–you’re protected by virtue being part. THE BENEFITS & DRAWBACKS OF REAL ESTATE PARTNERSHIP The one who lacks real estate knowledge or experience must go for the idea of a real estate partnership. If for nothing else, a truly great partnership can easily be the one thing new investors need to get started on the right foot. The best real estate partnerships act as a solid foundation for creating a great deal of balance between relationships, satisfaction, practicality, and essentials. Here are some of the biggest pros and cons of a partnering up to help ensure the one you create will be as powerful as possible: BENEFITS OF REAL ESTATE PARTNERSHIP ° A correct partner will always open the door for extra resources such as more capital, skills, network, and connections as well as professional expertise. ° The partnership provides a flexible distribution of profit & losses. ° For the one who wants to generate a passive source of income, a real estate partnership is beneficial for them. ° The personalities of each partner can combine to create a powerful presence in meetings with lenders or additional investors. ° When one partner is responsible for day-to-day responsibilities, they need help with longer-term strategies. The Real Estate Partners are essential in making sure that the project runs smoothly and equally share their workload so there can be no imbalance or sole focus on any single task at hand. DRAWBACKS OF REAL ESTATE PARTNERSHIP ° When two or more people invest in the same business, each person’s share is limited by how much they put into it. The benefits of investment – such as monthly income and profits from its sale – must be shared among all partners involved so that no one investor can reap too many rewards at once! ° An unclear partnership agreement may give rise to several disputes arising between partners in terms of delegating responsibilities and can turn your profitable investment into a loss. ° Different personalities of the partner give rise to versatile management& organization styles, which can be the cause of conflict between the partners. ° Sometimes capital differences also become one of the causes of disparity in the partners. ° Partnerships can get strained when one partner feels they are doing more than their fair share without getting an equal return. This could lead to tension between the two parties and even resentment toward each other, which may result in strain on relationships over time if not resolved professionally/amicably WHAT ARE THE THINGS TO CONSIDER WHEN SETTING UP A REAL ESTATE PARTNERSHIP STRUCTURE FOR YOUR
10 TIPS FOR BUYING YOUR FIRST RENTAL PROPERTY
Investing in Real Estate is a surefire way to make your money work for you rather than money only coming your way when you’re laboring at your J.O.B. Rental properties, and especially those houses that you buy for the price of a car, MySmartCousin-style, are particularly well-suited for creating a money flywheel that generates cashflow even as you sleep. As with most new things, however, the hardest part is knowing what to do and how to get started. As a Real Estate Investment coach, we at MY SMART COUSIN focus on new investors, and especially Black and Brown folks and women, in helping them to master the fundamentals of finding, analyzing, financing, and closing on a single-family or multifamily rental property that can be bought for the price of a car, and leveraging it to build generational wealth and influence. Are you considering buying your first rental property? If so, you’re in good company. Many people are finding great success with rental properties, as there’s still a lot of potentials to make money, even with today’s red-hot housing market. However, it’s important to remember that there’s more to buying a rental property than just signing on the dotted line. Here are 10 tips for helping to ensure that your first rental purchase goes as smoothly as possible while delivering a great return on investment. 1. DECIDE WHAT YOU ARE LOOKING FOR IN A RENTAL PROPERTY When buying a rental property, it’s important to have every detail planned out ahead of time. Before making any investments in this asset class, several factors should be considered and defined beforehand— from property location to acquisition and renovation budget to short-term versus long-term rental clients— so that you choose a house that aligns with your strategy. Another often overlooked factor to consider is your exit strategy. Even if you have no immediate plans to flip the property and intend to be a long-term owner, you should define what your best case and worst criteria are for selling the property. Being able to define a response to the two ends of the spectrum in a calm and studied manner always wins over doing so under the pressures of either a fire sale or a too-good-to-be-true offer. Once you have defined your purchase strategy, you can begin seeking properties that match this. 2. EDUCATE YOURSELF ON THE MARKET Education and mentorship regarding the real estate market are crucial for aspiring investors. Once you decide to invest in rental properties, it’s important to gain as much education as you can before becoming an owner, rather than effectively paying your tuition through an overpriced purchase or frequent and costly repairs. One way to do this is to spend some time calling landlords who are renting properties in your target locations to tour their homes and ask questions about the neighborhood. Doing so through the lens of ‘potential tenant’ allows you to see firsthand what renovation styles and amenities are standard, and how widely or narrowly rents range. 3. DECIDE IF YOU WILL BE A HANDS-ON LANDLORD OR HIRE A PROPERTY MANAGER Almost as important as determining how much investment property you can afford, or want to afford, is determining whether you want to be a hands-on landlord, or instead pay someone else to stand in your shoes when qualifying tenants and responding to maintenance issues. Both approaches have their pros and cons, and the right strategy ultimately comes down to your temperament and time. Temperament gets to whether you will be unphased or will blow your top each time a tenant reaches out to you with an issue or request. And Murphy’s law being what it is, of course, the tenant will always reach out to you with a maintenance issue at the most inconvenient time possible! Time gets to whether your schedule can accommodate responding to tenants in a timely manner. Even if you’re not actually going to the house to repair the toilet, for instance, you must have the flexibility during the workday and evening and weekends to answer your phone, listen with concern, ask questions so that you understand the issue, and then call one or more handymen to take care of the issue. If the answer to the temperament or time question is no, then you are better off paying the monthly fee to an experienced property manager. 4. DETERMINE YOUR PREFERRED LOCATIONS FOR A PROPERTY Spending time finding the right locations for your first rental property investment is crucial. Your goal is to obtain a property that generates a sustainable, high, net operating income. A sustainable income means that all things being equal, a tenant who pays their rent, like clockwork, year after year, is more valuable than bringing in a new tenant every 12 months. A high net operating income means that your focus should be not just the amount of rent that you are bringing in, but also the money that you are spending to obtain this rent— for instance, maintenance repairs and property management fees. Or said another way, it’s not about the money you make, it’s about the money you keep. Generally speaking, neighborhoods that are in a sought-after school district, for instance, have a higher likelihood of stable rentals than neighborhoods with lots of warts and flaws. 5. FIND AN EXPERIENCED REAL ESTATE AGENT WHO CAN HELP YOU THROUGH THE PROCESS With a little patience and help from an experienced real estate agent, you can find your dream rental property. Many people are initially nervous at the prospect of trusting their investment to the care of strangers, but with some guidance on how best to handle the process of finding tenants or marketing properties, there’s no reason why anyone should feel stuck. Seeking a real estate agent who themselves is an investor, or who works with investors, is one good place to start. 6. SET REALISTIC EXPECTATIONS AND SPEND TIME PLANNING FOR THE DOWNSIDE When you are peering over the fence as a would-be real estate investor and imagining how your life will change as a landlord, one of the
HOW TO BUY A MULTIFAMILY PROPERTY ON A BUDGET
Interested in investing your money in a multifamily property? You might be wondering, “Can I buy a two, three, or even four-family building with limited funds?” Fortunately, the answer is yes, though it will take some work on your part. But before we get to that, let’s first look into the multifamily model. Multifamily investments involve buying a duplex, triplex, fourplex, apartment building, or condo building and renting these multiple units, sometimes referred to as ‘doors’. Multifamily investing offers the possibility of generating a large burst of cash flow and net operating income from one building and roof. For this reason, multifamily property investment is often viewed as the first step of moving into larger, higher-yielding deals and thus, a popular investment channel for Real Estate investors. If you’re thinking about buying a multifamily property and prefer not to go it alone, you’re in good company as the services of an able coach can help increase your likelihood of success. At MY SMART COUSIN, we work hand-in-hand with clients to find and evaluate lucrative multifamily investment opportunities, with our specialty being finding houses that you can buy for the price of a car. As a seasoned Real Estate Investor and Investment Coach, we help Black and Brown folks and women create wealth and scale their businesses. In this blog post, we’ll discuss the benefits of a multifamily portfolio, and look at options you can use to buy multifamily when your funds are on a diet shall we say, and seed capital is limited. If this scenario sounds like you, read on to learn more! THE MANY BENEFITS OF MULTIFAMILY PROPERTIES A Quick Way to Scale Your Portfolio: One of the biggest benefits of buying multifamily properties is that it allows you to increase the number of units that you own quickly, and often, at a lower cost per unit than buying each unit as a single-family property. A larger number of units allows you to spread fixed costs such as bookkeeping, legal fees, and marketing over a much bigger base. Additionally, the amount of time required to grow a portfolio from one unit to ten units is significantly more when growing through only single families versus multifamilies. Diversification of Risk: Another benefit of multifamily properties is that they can lessen the cash flow risk of your portfolio. As an example, if you own and rent out a single-family home when the home is vacant, it is 100% vacant, unless you are renting out a room or other area of the house on a short-term basis. The all-or-nothing risk to cash flow that comes from single-family properties can cause owners to face financial hardships when their unit is vacant for an extended period. Multifamily properties, on the other hand, have multiple units, which decreases the risk that every unit will be vacant at the same time. As such, there’s a much higher possibility that there will be positive cash flow at some point of every month for multifamily, particularly if the multifamily has five or more units. This risk diversification can help in ensuring that the loan used to buy the property can be serviced without interruption Economies of Scale: In much the same way that buying groceries at a wholesale store can lower the per-unit cost of each item, likewise a large multifamily property can increase your buying power and lower the per-unit cost of management and maintenance items. Property managers, as an example, will be more likely to offer you a discount if they are managing 20 of your units, all under one roof, than 20 separate single-family homes. Twenty apartments in one building mean that a dedicated leasing agent and handyman can be tasked with working at one location rather than traveling among multiple properties and learning the peculiarities of each. Likewise, electricians, plumbers, and other contractors may offer more competitive pricing for the security of having one large apartment building account versus multiple small accounts. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort So now that we have a sense of some of the benefits that a multifamily property offers, let’s dive into exactly how we can go about buying one on limited funds · AN EQUITY SHARE INVESTOR: THE KEY TO SUCCESS An equity share investor is someone who takes an equity interest in your property in exchange for funding a percentage of the acquisition costs and major repairs. As an example, if you strike a deal with an equity share investor to invest 30% of the costs to buy a $200,000 triplex, or $60,000, then the equity investor would be entitled to 30% of the rent on the triplex. In this regard, shared equity arrangements are like partnerships. One difference, however, is that shared equity agreements often have a limited time period, for instance, five years, after which the equity share investor will look to have their percentage interest purchased by the owner, at the presumably higher market value of the property in year five. Because shared equity investors own a percentage of the equity in your property and are recorded as owners on the deed and in tax records, it will be critical to work with an experienced attorney to document this transaction properly. · GET A LOAN FROM A FAMILY MEMBER OR FRIEND – A PRIVATE MONEY LOAN Private money lenders are lenders who are private individuals. As such, a private money lender can include your family member or a friend. If you lack the funds for a multifamily property and share common business values with a friend or family member, then you may want to explore having them serve as an official lender for your project. A private money loan with a close family should be treated just as seriously as it would be with a third-party lender: credit checks should be performed, and loan documentation and a payment schedule should be developed. The benefit of working with a friend is having a built-in sounding board to discuss issues or opportunities. · CONSIDER BUYING
HELOC PROS AND CONS YOU NEED TO KNOW
The housing market is on an upswing with prices climbing higher, driven by the twin forces of inflation and demand. Which begs the question: can you still Buy a house for the price of a car? Absolutely! On any given day there are hundreds of single-family homes, and even some viable multifamilies, listed for $60,000, $50,000, and even $40,000. At MY SMART COUSIN, we teach clients, especially Black and Brown folks and women, exactly how to evaluate and buy these properties, as well as how to start or scale their business and build their finances. As a successful real estate investor and real estate investment coaches, we help clients make the right choice, based on their present circumstances and goals. THE VALUE OF A HELOC If you’re a homeowner, you know that having a home equity line of credit (HELOC) can come in handy. A HELOC is like a credit card connected to your home’s equity – it’s a great way to borrow money when you need it. But before you decide if a HELOC is right for you, be sure to weigh the pros and cons. Here are some things to keep in mind: WHAT IS HELOC AND HOW DOES IT WORK? HELOCs are a great way to get access to money without the hassle of applying for credit cards or other personal loans. You can use your home equity line for anything you want, but there will always be interest charged so it’s important not to use your HELOC like your own personal ATM! HELOCs work like credit cards. You can use your home equity line of credit for both home-related renovations and repairs and non-home-related items like paying off car notes, credit cards, or other expensive debt. Since HELOCs are attached to your home, the cash you drawdown is essentially a second mortgage. Meaning that once you draw on your line of credit, you have two mortgages outstanding on your property instead of just the one you started out with. This point is worth paying special attention to as your house itself is at risk if you default on your HELOC. For those who are considering a HELOC while heading towards or are already in retirement, an emergency fund might make sense to add an extra buffer of protection and ensure that you can repay your HELOC. THE PROS OF USING HELOC TO FUND HOME IMPROVEMENTS OR OTHER EXPENSES · LOWER INTEREST RATES HELOC interest rates are much lower than credit cards or personal loans. The reason is that while credit cards are unsecured, relying solely on your promise to repay, HELOCs are secured by your home. HELOC loans often also have an interest-only component to them, allowing you to pay just the interest for as long as ten years before having to repay the principal. The interest rate is variable rather than fixed, so drawing on your HELOC during high-interest, high-inflation periods is less optimal than under low-interest rate and inflation climates. But that said, under certain conditions the interest payments on a HELOC are tax-deductible, helping to lessen the sting of high rates. · FLEXIBLE AND ADAPATABLE The greatest advantage of HELOCs is that they are flexible and able to accommodate your needs. Unlike a loan, a line of credit, once approved, sits in standby mode, giving you the convenience of having it available without the obligation of having to use it. Since HELOCs are approved for a ten-year period, the line of credit serves as a guaranteed secondary source of funding for ten years, should you need it or choose to use it. · USE OF MONEY Ideal uses for a home equity line of credit are saving and investing money. On the savings front, you can use your HELOC to consolidate debt or pay off more expensive loans. On the investment front, a HELOC can serve as seed capital to start a new venture, buy stocks or other investments, or buy an investment house for the price of a car. You are also allowed certain tax benefits if you use a HELOC for home renovation. · THE APPROVAL TIME The approval time for a home equity line of credit is very short, on the order of a couple of weeks, which means that you can get your finances in order and launch your investment or debt repayment plan much faster than if you were to apply for a business loan or personal loan. · FEWER ADMINISTRATIVE COSTS The HELOC application process is much more affordable than other loan applications. There may be some additional charges which have to be paid, but these are minimal in comparison with traditional loans that require high processing fees. THE CONS OF USING A HELOC TO FUND HOME IMPROVEMENTS OR OTHER EXPENSES · FLUCTUATING INTEREST RATES One of the most important factors to consider when applying for a home equity line of credit is whether it has a variable interest rate. Most HELOCs have some type of variable-rate feature, which means that the interest rate could increase over time. · COLLATERAL A HELOC requires that you own your property. You do not need to own it outright, you may have a mortgage on it already, but you can’t obtain a HELOC if you rent the property, for instance. The reason is that the collateral for a HELOC is the property itself. The line of credit available for a HELOC is usually capped at 90% of the equity you have in the home. Using an example, if your home is worth $200,000 and you have a mortgage of $100,000 on it, then your equity in the home is $100,000. A 90% loan to value ratio means that your HELOC would be $90,000. · HIDDEN FEES AND CHARGES Your lender may charge hidden fees if you cancel or terminate your HELOC. In some cases, the bank will bill an amount even when there is no balance owed at all. As always, it pays to read the fine print before taking out any loan because it could cost more than expected in unexpected expenses. · THE TEMPTATION TO MAKE ONLY MINIMUM PAYMENTS When you take
Long Term Rentals or Short Term: Which Strategy Would You Choose?
One of the great benefits of being a homeowner today is that you have the opportunity to make money on your property in two ways. The first way that most everyone is familiar with is an appreciation of the home’s value. While we all appreciate our home because it provides a roof over our heads, we don’t mean that kind of appreciation. We mean the kind of appreciation that happens as prices rise. Home prices generally rise with inflation. While inflation has been a sizzling eight percent of late, over the past 60 years it has averaged a little under four percent. At that rate, it would take approximately 18 years for your home price to double. Meaning, that unless your neighborhood suddenly becomes the place to live, or, our personal favorite, unless you buy your house for the price of a car, you’d better pack your patience when it comes to realizing the appreciation value of your home. The second way realizes a return on your house is by renting it out. And the good news is, that the range of rental options is increasing every year, allowing you to create a structure that works for you. Given these two methods of earning a return on your home-sweet-home, it pays to educate yourself on the numerous factors involved when buying a property, so that you can take advantage of both avenues. My Smart Cousin can help you figure out how best to wring appreciation and rental value from your current home, or help you find a house for the price of a car that has a high appreciation and rental value. If you’re a real estate investor focused on renting out your home, something you’ll need to decide early on is if you want to offer your property as a long-term rental or a short-term rental. Both strategies have their pros and cons, so it can be tough to decide which one is right for you. In this post, we’ll take a look at the advantages and disadvantages of each strategy, so you can make an informed decision about which option works best. A BRIEF INTRODUCTION · LONG-TERM RENTALS – In most jurisdictions, when you lease a property for more than one month (30 consecutive days to the same person), the rental is considered a long-term rental, and is regulated under landlord and tenant laws. The one-month rule holds whether you rent the entire home or just one room in the home. Likewise, the interpretation applies whether the tenant pays for utilities or does not explicitly pay for utilities (that is, you charge a room rate with no language in the contract regarding utilities). If the tenant doesn’t live at the home full time but has a one-month or longer contract, or, if you have permitted the tenant to store their belongings in the home while not ‘living’ there, the one-month rule would likely still hold. As such, if your intention is to rent out your home or a portion of it on only a short-term basis, then ensure that the contract and tenant occupancy match this intent. SHORT-TERM RENTALS – The best alternative to a hotel is a short-term rental. And in fact, many guests prefer staying at a home (either renting the entire home or just a room or sofa) rather than booking a stay at a hotel. Short-term rentals can be an excellent way for a guest to experience a city in an authentic way, can be more comfortable than a home, and are often more affordable. One of the biggest attractions of a short-term rental home, however, is that the guest can make use of private indoor space as well as outdoor space. If you have a balcony or lovely yard, this can place you at the top of the list for out-of-town and local guests. HOW DO YOU DETERMINE WHICH OPTION IS BEST FOR YOU The decision to use a property for either short-term stays or long-term rentals comes down to one important question – which option works best for you— your lifestyle and way of life? By considering the pros and cons of each option, you can make more informed decisions about how best to fit this investment into your plans. THE PROS AND CONS OF LONG-TERM RENTALS ADVANTAGES A CONSISTENT CASH-FLOW – Long-term tenants are perfect for those landlords who want a consistent cash flow that they can depend on. With a high-quality, long-term tenant in hand, you have a roommate who can help you pay for the expenses of your home. MINIMUM TURNOVER – If you hate the idea of a new person coming to stay with you every day or week, then a long-term structure allows you to minimize turnover. Less turnover not only minimizes the disruptions from revolving-door roommates but also cuts down on paperwork— from the marketing promotions that need to be done with a short-term rental, to the increased bookkeeping from tracking multiple transactions. UTILITIES – Unlike hotel guests or guests in a short-term rental property, long-term tenants will not be surprised when you tell them that they must pay a percentage of the utility bills. Water, electric, and gas bills can spiral out of control when you don’t see them or have to pay for them. Long-term tenants or roommates help keep these expenses under control. · DISADVANTAGES PROFIT MARGINS – A big disadvantage of long-term rentals is their overall profitability. Profits for long-term rentals typically are lower than for short-term rentals because short-term rentals charge a higher daily rate. A condo that is renting for $1,500 a month in an urban neighborhood, for instance, means that if the $1,500 were paid on a daily basis, the cost would be approximately $50 a day. On the other hand, finding a short-term rental in an urban neighborhood for $50 a day, for an entire condo, would be extremely rare indeed. CONTROL OVER THE PROPERTY – With a long-term tenant, there is much less privacy and control over the property, as you’ve rented out a room, for instance, to someone else, who has the right to stay in the house
HOW TO REHAB A REAL ESTATE PROPERTY: THE FIVE STEPS MOST INVESTORS MISS
The housing market continues at its five-alarm fire pace, offering both opportunities and risks to aspiring homeowners and investors. For those in the know on how to Buy a House for the Price of a Car, real estate can be a lucrative strategy indeed; but it doesn’t always come easy. If you’ve made the leap and purchased your first investment property, congratulations! After you’ve poured yourself a glass of bubbly, buckle up, because this is where the real work begins! As a seasoned Real Estate Investment Coach and Successful Investor, we at My Smart Cousin take seriously our responsibility to help our clients, particularly Black and Brown folks, increase their generational wealth and influence. Now more than ever, there is an opportunity to make money in the real estate game through rehabbing homes. Scoring a great deal on your investment property is an important first step, but it’s not the only one. Before you jump in head first, it’s important to understand the fundamentals of rehabbing, so that you can renovate your property quickly and cost-effectively and get it on the market. In this article, we’ll outline the five key elements to rehab a property like a pro. So, if you’re thinking about getting into the rehab business, read on for some helpful tips! WHAT EXACTLY IS A REHAB? Rehabs come in many flavors. Some properties require nothing more than a coat of paint, while others require a full-on makeover, from a new bathroom and kitchen to flooring, appliances, and fixtures. What distinguishes a rehab from a full gut job is that rehabs usually involve improvements to superficial items like drywall, tile, and carpets while gut jobs veer into the world of construction, requiring permits for electrical, plumbing, roofing, and HVAC work. In either case, whether you’re donning a hard hat or just a pair of overalls, rehabbing a property is rarely easy. A successful rehab requires patience, skill, and planning. Once armed with these resources, an investor can look to earn back not just their original investment, but also a return on their investment. YOUR REHAB ROADMAP 1. DETERMINE YOUR INVESTMENT HORIZON One of the first questions a successful rehabber must answer is, what is their investment horizon. That is, will the property in question be renovated and then rented or leased out— a buy and hold? Or is the goal to renovate and immediately list the property for sale— a so-called buy and flip? Your objective for the property as either a buy and hold or a buy and flip can affect how quickly the rehab needs to be finished, as well as at what cost. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort Assess the Real Estate Market Fundamentals In determining whether your rehab will lead to an immediate rental or sale, let the local real estate market and market fundamentals be your guide. If rental rates are on the rise and the neighborhood is chock-full of long-term and short-term rental properties, then a rehab-to-rent approach may be in the cards. On the other hand, if every second or third house is holding an open house, with houses snapped up after only days on the market, then a rehab-to-flip approach might make more sense. My Smart Cousin can help you do a market analysis to determine whether a rental or flip makes more sense as well as what the potential costs and returns of each path look like. 2. ASSESS THE CONDITION OF YOUR PROPERTY AND MAKE A PLANBefore purchasing your property, it’s important to assess the home closely and determine whether there are any major issues requiring repairs or outright replacement of totems such as the wiring, HVAC (heating, ventilation, and air condition), or sewage systems, as these can be expensive and time-consuming to remedy. When doing your walkthrough with your handyman or contractor, bring a camera or use your cell phone and take both pictures and video. When taking video, narrate as you go with comments on what room you’re in (for instance, ‘bedroom next to the bathroom’), the issue you see (for instance, ‘evidence of water leak in master bedroom ceiling’), and the steps to take (for instance, ‘have handyman or roofer take pictures of the roof to determine its age and condition). 3. FLESH OUT YOUR REHAB BUDGET AND WHAT YOU HOPE TO ACHIEVE WITH THE PROPERTY An important part of renovating your home is knowing what needs to be done. This will help you stay within budget and avoid expenses that don’t deliver a return on your investment. You can assess whether a particular expense will yield a return by calculating the after-repair value (ARV) of your property. The ARV value is the new and improved value of your property after taking into account the cost of the work you’ve done as compared to the market price for similar homes. As an example, if you purchase a house for the Price of a car, let’s say at $40,000, and renovate it for $30,000, with the high-ticket items being new appliances, kitchen cabinets, and upgraded fixtures and lighting throughout the home, then your effective property cost is $70,000. But $70,000 isn’t the ARV value; the ARV value is the market value of houses that are in the same condition as your newly-renovated property. If average properties in the neighborhood are selling for $100,000 but come with upgraded appliances and fixtures that are move-in ready (like your home) are selling for $115,000, then the ARV of your home is $115,000. Knowing the determinants of market value and the price of these homes is key to determining a renovation budget, both in terms of how large it should be and what gets you the best bang for your dollar 4. CREATE A WORK PLAN FOR THE PERSON WHO WILL BE DOING THE WORK, WHETHER THAT PERSON IS YOU OR A CONTRACTOR CREW Hiring a contractor is often the most daunting part of any home renovation. But doing the work yourself is also no walk in the park. To reduce both the headache and cost of
SHOULD YOU HIRE A REAL ESTATE CONTRACTOR? IMPORTANT TIPS FOR HOUSE FLIPPERS
With housing demand still running high throughout most of the U.S., there are many opportunities for current and aspiring investors. Buying an old house that needs some updating can be very profitable if you know what to look for. And Buying a House for the Price of a Car, doubly so! When flipping a house, there are many important decisions to make. One of the most important is whether to hire a contractor or do it yourself. While on the face of it, it seems cheaper to do it yourself, there are a number of trade-offs and considerations to keep in mind. At MY SMART COUSIN, we help you build wealth and Buy a House for the Price of a Car by being your Real Estate Investment Coach. In this blog post, we’ll go over some tips for hiring a Real Estate Contractor. So, whether you’re just starting or have been flipping houses for years, read on! WHAT IS A RESIDENTIAL REAL ESTATE CONTRACTOR AND WHAT DO THEY DO? When you’re looking for a contractor to repair or rehab your investment property, you will most likely need to hire a residential real estate contractor. Residential contractors also called Home Improvement Contractors in some states, will manage and perform the overall renovation work for a residential property. The licensing, certification, and insurance requirements for residential contractors vary from state to state, so you will want to check with your state’s department of labor and industry for a list of registered contractors. A real estate contractor is responsible for making recommendations, identifying the need for additional specialized contractors (for instance, plumbers or electricians), and obtaining any required permits for the renovation and construction work. A real estate contractor can also be a great resource for identifying financing options, providing input on what’s hot in housing design, and discussing housing market trends in the city or neighborhood of your investment property. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort If you are unsure of where to find a capable contractor or how to evaluate them, a Real Estate Investment Coach such as My Smart Cousin can pay dividends in conducting detailed due diligence, providing a written assessment, and helping you to negotiate a strong contract. HOW TO FIND THE RIGHT REAL ESTATE CONTRACTOR FOR YOUR FIX & FLIP PROJECT? Flipping houses is not an easy task and requires patience to complete. Finding the right contractor can make all the difference between a house that is renovated quickly and with quality workmanship versus one that is always ‘almost done’ according to your contractor and yet looks nowhere near so. As such, it pays to invest time and do your research at the front end to help ensure a smooth renovation process. The list of challenges may seem long and daunting when hiring a new contractor. Before committing to a neighbor’s handyman or throwing your hands in the air and choosing the first person who calls you back, remember these tips: · When hiring a contractor, you must ask for references from people who know the contractor well and can give an honest assessment of their workmanship. Call at least three of the references, don’t satisfy yourself with just one. Also, conducting a little bit of detective work in terms of searching for online reviews regarding your potential contractor can shed light on any issues. If a contractor is unwilling or unable to provide you with references, you should think long and hard about hiring them. · Punctuality, both in terms of showing up to the job site on time and putting in a full day’s work, and completing the job on or ahead of schedule, are critical determinants when evaluating contractors. For Flips, it’s especially crucial because you need assurance that your house will be ready during key market windows such as the all-important spring and summer months when families are looking to move. The best way to make sure that your contractor values your time and deadlines is to make payments, including incentives and penalties, that are based on firm dates and specific milestones. · When you’re ready to hire a contractor, don’t let price be your pone and only guide. Yes, price is important, but the old saying of being penny-wise and pound-foolish is particularly so when it comes to hiring a contractor. It pays to hire a contractor who is licensed and insured rather than the cheapest vendor who might be unlicensed and/or uninsured as licensing and insurance-speak to the credibility and additional investment that the contractor is making in their business. · When negotiating the terms of the contract, ensure that you make payments for completed work rather than for mobilization and other forms of advance payments. Proof of completion can take place through a video, but an on-site walkthrough by you is best. If possible, seek to pay for the materials, based on receipts, to ensure that profit is not calculated on these. Also, when the job is completed, if you have paid for the materials, then any leftover materials belong to you and as such, you should store them so they may be used for future repairs or renovations. · Contractors are in very high demand. To ensure that your contractor completes your project rather than leaving you high and dry when another one comes along, have your final payment for the completed project be at least one-third and preferably half of the total project cost. Final payment of only ten percent or fifteen percent of the project cost might cause your contractor to continuously delay completion. HOW TO WORK WITH YOUR CONTRACTOR DURING THE RENOVATION PROCESS? The working relationship between an investor and their contractor can be amicable, but it takes time and determination on the part of both parties. Your goal in creating a constructive working relationship with your contractor is a relationship that is friendly but business-like, with expectations regarding the product, services, laborers/crew, timetable, price, deposits, materials, and liabilities clearly spelled out in writing. Communication, and really, over-communication, goes a long way in heading off
WHAT IS A TAX LIEN: DEFINITION AND FAQS
Investors are always on the lookout for new opportunities. Whether it’s about buying a house for the price of a car, investing in foreclosures, or purchasing property in tax lien auctions, there are strategies and on-ramps for virtually every investor. Paying property taxes, often assessed at the city and/or county level is one of the most important responsibilities of a property owner. Failure to pay can lead tax authorities to place a lien on the property, seize it and auction it if not paid in full. And if your investment property pays for city-owned and operated utilities such as drinking water, stormwater, or sewer services, those entities have the same attention-getting right! So let’s dive into what exactly is a ‘Tax Lien’ so that you can avoid it when it comes to your property and consider it as an avenue for investment properties. WHAT IS A TAX LIEN? A tax lien is a legal claim, usually filed by a federal government agency such as the Internal Revenue Service (IRS), or a county or municipal agency such as a local taxing authority, against the property of a delinquent taxpayer. While on the face of it, it may seem like the purpose of the lien is to take your home sweet home, its actual purpose is to obtain payment of the taxes owed, in much the same way that a mortgage lender will exercise their lien against a property if mortgage payments aren’t made. If you have a tax lien against your property, it’s important to take action to clear it up as soon as possible. Ignoring the problem will only make things worse. Here’s what you need to know about tax liens and how to deal with them. WHAT DOES A TAX LIEN MEAN FOR YOU AS A TAXPAYER OR INVESTOR? If there is an outstanding debt such as property taxes or utility payments owed to a government entity, the entity has the right to place a lien against the property to satisfy the debt. However, just as mortgage lenders are not able to immediately sell a property upon the first missed statement, likewise government entities must see several missed payments, typically three years in the case of residential properties and five years in the case of commercial properties, before filing a security interest against the property. HOW DO YOU GO ABOUT FINDING OUT IF THERE IS A TAX LIEN FILED AGAINST A PROPERTY? To find out if there is a tax lien filed against a property, perhaps one that you are interested in as an investment, or your own property that you are concerned about, you can call or visit the County Clerk’s office and check the tax records. Online images of these documents are also available as well as printed copies at the Clerk’s office, for a fee. In the case of a federal tax lien, you can contact the IRS’s Centralized Lien Unit or visit their website for information. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort WHAT ARE THE CONSEQUENCES OF HAVING A TAX LIEN FILED AGAINST YOU? If a tax lien is filed against your property, one of the biggest impacts will be on your ability to sell or refinance the property. As another entity essentially has a stake in the property, you are unable to sell it, obtain additional lines of credit against it or change the current financing terms on the property without the approval of the lien holder. HOW DO YOU GO ABOUT REMOVING OR DISPUTING A FILED TAX LIEN? One of your first steps if you find yourself with a lien placed against your property is to contact an attorney specializing in tax liens. The IRS or other government entity that has issued the lien will send you a notice of the amount you owe and make a demand for payment; the role of the tax attorney will be to evaluate your records with you to determine if there are any errors in the amount or in the process that was followed by the government authority, and dispute the demand if so. And should the amount and demand request be accurate, the attorney can help you negotiate a settlement, which could include payment of a much lower amount through the waiver or reduction of penalties, interest, and back taxes. FAQs ON TAX LIEN – READER’S MOST COMMONLY ASKED QUESTIONS ANSWERED WHAT ARE TAX LIEN CERTIFICATES? Municipal governments often prefer not to take on the role of selling properties that are behind on their taxes. To avoid being the seller while still obtaining payment on the amount, the municipality will create a tax lien certificate equal to the amount that is owed. The tax lien certificate will serve as a tool or instrument offered for sale, via an auction, by the local municipal government, to collect payment. Proceeds from the auction enable the municipality to recover unpaid property taxes, in this case, not from the owner, but from the auction participants. The winning auction bidders then become the owners of the security interest in the properties, and with it, take on the responsibility and the cost of foreclosing on the property after three or more years of unpaid taxes or utility bills by the property owner. Tax lien certificates also entitle the certificate owner to the interest payments on the unpaid debt, thus functioning in much the same way as a bond. WHAT IS THE DURATION OF A TAX LIEN? Ten years is the basic limitation set by the IRS. If the defaulter pays the lien in full or as stated in a negotiated settlement agreement, then the IRS will remove the lien and its right to seize the property. The IRS is required to remove the lien within thirty days of the taxes in question being paid. WHAT IS A TAX SALE? The sale of property that has unpaid taxes on it will often occur through a tax lien auction, where the
Secured vs. Unsecured Credit Card
Key Takeaways A secured credit card requires the cardholder to make a security deposit, whereas an unsecured credit card doesn’t require a deposit. A good credit score is not required to be approved for a secured card, but a good credit score will determine your interest rate and other factors for a secured credit card. Both credit cards can be a great tool for building a positive credit history and improving your credit score; each has its advantages and disadvantages. According to the Consumer Financial Protection Bureau, the government agency responsible for protecting consumers’ financial credit interests, more than 175 million Americans have a credit card. Although there is a common basis of what a credit card is, there are as many flavors of credit cards as there are credit cardholders. For example, some cards give points toward hotel stays or airline miles with every purchase. Other cards reward spending with cryptocurrency or contributions to a stock market account. However, one of the biggest differences between credit cards is whether the card is secured or unsecured. What is a Secured Credit Card Secured credit cards were created to enable those with less-than-stellar, limited, or no credit history to obtain a credit card. Although secured cards account for less than one percent of the credit card market, they play a vital role in helping build a positive credit repayment record. Therefore, they serve as an onramp to obtaining an unsecured card. Recommended Read: How Secured Loans Work The security behind a secured card is cold, hard cash. Your cash, that is. A secured card requires a security deposit, typically in the minimum amount of $200, to the bank that issues you the credit card. The cash deposit will then set the lower bounds of your credit limit. So how does it work? First, you must apply and be approved by a credit card issuer. Then, after approval, you deposit a set amount of money for the security deposit to back up the card. So, if your deposit was $200, the issuer will provide you with a credit limit of at least $200. Depending on your credit score and history, the limit could possibly be higher. Benefits of a Secured Credit Card In addition to a secured card giving you access to the flexibility of plastic in an ever-growing cashless economy, it provides these two other important benefits: a lower cost of credit and an easier approval process.Lower Fees Credit rating agencies classify FICO scores of 580 to 669 as ‘fair’ or ‘average.’ Approximately one-third of all Americans have FICO scores that fall within that range. Recommended Read: Tips on How To Improve Your Credit Score At the ‘average’ score level, unsecured credit cards can come with numerous fees, including a one-time fee to open the account, an annual fee for the open account, and a monthly fee to service the account. These fees can leave you paying $150 or more to open the account in year one and an ongoing $100 or more in years two and beyond to continue the account. And, of course, these costs are before you consider any late payment fees, which also tend to be higher. Secured cards, however, typically have no annual fee, or a relatively low one ($35-$50), and no or a minimal monthly maintenance fee. Doesn’t Require a Good Credit Score One of the top advantages of a secured credit card is that your FICO score tends not to significantly influence the credit decision. Why? If you miss a monthly payment towards your balance, the card issuer will apply a portion of your security deposit to cover the payment amount due. While it is possible to obtain an unsecured card with less than perfect credit, fewer options exist for those with FICO scores of less than 580. A must if you have a secured credit card is to make sure you never miss a monthly payment. Therefore, once you have built a record of consistently paying your credit card bill on time, you can ask your card issuer if they offer the opportunity for you to “graduate” with an unsecured card. If you are able to “graduate,” a typical benefit is refunding your deposit and increasing your credit limit. Cons of a Secured Credit Card A secured credit card may be a good option for someone with no or poor credit history. Since your credit score is not a dominant deciding factor for approval of a secured card, a security deposit is required. However, the security deposit can pose a challenge for some who are already struggling to save funds. Additionally, if you default on your credit card, the credit card issuer can take the security deposit that you’ve posted against the card. What is an Unsecured Credit Card Unsecured credit cards are held by 99% of all credit card holders and are generally referred to simply as “credit cards.” Unlike secured cards, an unsecured card does not require a security deposit to back it up. Therefore, the credit card issuer looks closely at your FICO score and other credit history indicators, and repayment ability when deciding on approval or denial of your credit card application. Pros of an Unsecured Credit Card The most significant benefit of an unsecured credit card is access to a 30-day revolving line of credit with no collateral requirements. The line of credit can be valuable for many reasons, such as quickly paying in the case of an emergency or unexpected expense arises. Additionally, unsecured credit cards offer numerous incentives and rewards, such as: sign-up bonuses travel points spending discounts cashback on your card; sometimes as much as five percent 0% percent interest rates during an introductory period; different cards have different time periods, but the introductory period is usually 15 or 18 months 0% percent interest rates offered on balance transfers the ability to borrow cash from the credit card in the form of a cash withdrawal Cons of an Unsecured Credit Card Although there are many benefits, there
Four Ways to Invest in Real Estate for Under $1,000
If you’re looking for a way to invest in real estate but don’t have much money to get started, don’t despair! With a little ingenuity and some careful planning, there are many strategies you can use to launch a profitable portfolio, even on a tight budget. We’ll explore four paths to making smart real estate investments with limited start-up capital. And, by building up your portfolio over time, you’ll be able to gain valuable experience as well as the cash flow needed to realize greater returns down the road. Let’s get started. Short term Rentals Perhaps the easiest way to get started with real estate investment is by becoming a host in your own home and renting out a portion of it, for instance, a spare room or couch. The three biggest benefits of renting out a portion of the roof over your head are: It’s a lot easier than having a full-time roommate, as you control how long someone stays and do not have to worry about rental agreements and eviction procedures You’ll earn more money from a short-term rental than you will from a full-time roommate. As an example, if your rent or mortgage is $1,200 a month for a two-bedroom home, that means that a roommate would pay $600 a month, assuming a 50/50 split. Six hundred dollars a month works out to $20 a day. As there are very few markets indeed where a one-bedroom room can be rented for $20 a day, you will surely earn more renting it out through a temporary stay site, particularly during high-season spikes such as conventions or concerts in your area. You’ll have a lot less wear and tear on your home, as someone staying for a short time— a couple of days or even a couple of weeks— will only have suitcases versus furniture and other trappings of a permanent resident. But that said, there are also trade-offs of getting in the hosting game. Chief among them is that a stranger is living with you, in your own house. Using your bathroom. Lounging on your couch. If visions of this make your heart race or blood pressure rise, then hosting with this level of intimacy might not be for you. A less intrusive form of hosting might be renting out your home when you’re not there. For instance, if you have to be out of town for work, or will be away at a family gathering, that can be a great time to allow someone else to pay a portion of your rent and mortgage. Done right, hosting can be a great method to begin getting hands-on experience as a landlord as well as learn about the real estate markets located elsewhere from your visiting guests. Real Estate Investment Trusts (REITs) A real estate investment trust is similar to a mutual fund. Mutual funds usually invest in just one type of asset— for instance, stocks, bonds, commodities, etc. REITs also invest in one type of asset, in this case, real estate. REITs can be a relatively low-risk vehicle to gain experience with real estate projects because the REIT portfolios themselves are usually diversified— made up of a large volume of properties, across property types (residential, commercial, mixed-use) and geographies. Two big advantages of REITs are returns and liquidity. Returns REITs offer the potential for good returns, in part, because one of the regulatory requirements of a REIT is to pay out 90% or more of its taxable income to shareholders. Liquidity REITs also offer good liquidity because, unlike owning a property, where it could take months to find a buyer and close on the sale, REITs that have a large market of buyers and sellers offer the ability to quickly increase or sell down your investment. As far as disadvantages, the largest one is market risk. Because REITs are investments in the real estate market itself, if real estate prices or rents experience a downturn, the portfolio of the REIT can be likewise affected and see a decrease in returns. Real Estate Crowdfunding Another onramp for accessing real estate investments, particularly very large deals such as the development of a large apartment building or commercial complex, is through real estate crowdfunding. Crowdfunding is a pooled source of money in which multiple individual investors (hundreds or even thousands) buy equity in a commercial real estate project or provide the project with a loan (debt capital in the form of a short-term construction bond, for instance). Opening an account with a real estate crowdfunding platform can be done with as little as ten dollars. Crowdfunding can also give you a peek behind the curtain of commercial real estate development, as a micro hard money lender— something that’s often difficult to see up close without donning a hard hat as a general contractor or developer. Perhaps one of the biggest advantages of participating in crowdfunding is that you can pick and choose the types of projects you invest in. Say for instance, that you’re interested in building up your knowledge about hotel development as you’d like to grow from small Airbnb operator to hotel owner and operator someday. Crowdfunding allows you to pick which investments suit your fancy, rather than requiring that you invest in whatever it is that the portfolio manager selects (the way real estate investment trusts and mutual funds work). For every cup half-full, however, there is always a cup half empty. A disadvantage of real estate crowdfunding is that you are investing in the development of the project from the ground up. If there are construction delays, increased costs or the project is never completed at all, those become your risks to bear, and with it, the potentially adverse impact on your returns. A second disadvantage is that the fees on crowdfunding platforms can be hefty, so research is a must before jumping in with both feet. Vacant Lots and Land Offer Opportunity: Vacant lots and land are often viewed as investments of last resort by