SHOULD A REAL ESTATE INVESTOR OBTAIN A REAL ESTATE LICENSE?
Real estate, even in today’s hot market, offers the opportunity to buy a house for the price of a car, both for new and seasoned investors alike. The decision to buy, rehab and rent or buy, rehab and sell often comes down to market conditions. Which raises the question of whether a real estate license is required or provides an edge in assessing market conditions and becoming a successful investor. A REAL ESTATE AGENT OR A REAL ESTATE INVESTOR? First, to the question of requirements: real estate investors are nonrequired to become or to be licensed as real estate agents. While some real estate agents invest in properties and property-related businesses such as property management, and some real estate investors sell property as agents, the two are separate activities, and the pursuit of one does not require engagement in the other. That said, obtaining a real agent license offers certain advantages and can serve as an asset for real estate investors. Deciding on whether to pursue a real estate license should not be considered lightly as a significant time investment is required along with licensing costs. To help better inform your decision, let’s take a look at the pros and cons of pursuing a real estate license. BENEFITS OF OBTAINING A REAL ESTATE LICENSE One of the biggest advantages of a real estate license is instantaneous and comprehensive access to information on upcoming and sold properties. If your goal is to spend significant time researching, buying and selling properties, not just on behalf of your own portfolio but on behalf of others, then obtaining a real estate license will serve you well. Likewise, if you intend to amass a significant investment portfolio or plan on selling a number of properties through the services of a real estate company, then representing yourself in these transactions as a licensed real estate agent may offer advantages, particularly in terms of the commissions that will no longer have to be paid to a third-party selling agent. Real estate licenses are issued state by state, with some states allowing holders of a license in another state to qualify to buy and sell property in their state through reciprocity provisions. As such, if you have or intend to build a multi-state real estate portfolio or real estate agency, the requirement for multiple real estate licenses and availability of reciprocity should be weighed. ACCESS TO MLS- THE MULTIPLE LISTING SERVICE: As mentioned earlier, the biggest advantage of becoming a licensed real estate agent is access to the MLS (Multiple Listing Service): Particularly in a hot market, receiving immediate notifications of new sales listings can provide an edge in getting ahead of investment competition. The MLS system also speeds your research, offering detailed information about recent sales, fast-selling neighborhoods, popular home types and comparable properties without having to check multiple sites. INCREASED INDUSTRY KNOWLEDGE: Another advantage of becoming a real estate agent is firsthand introductions to appraisers, title companies, lenders, inspectors and other key players in the real estate industry. This exposure increased your expertise in the many facets of the real estate process. Additionally, directly working with lenders and appraisers improves your negotiating position and assists in reaching quick settlement on terms and conditions. GET PAID TO BUY AND SELL YOUR OWN PROPERTIES: By becoming your own agent and representing yourself as the buying or selling agent, you can receive the buying agent’s commission when you buy a property for your portfolio, and likewise the selling agent’s commission when you sell a property. As an example, if you buy a property that has a standard 6% commission, a commission of $12,000 would be paid to the selling agent, who would then split it, 50/50 with the buying agent. Since you’re representing yourself as the buying agent, you receive the $6,000 commission, effectively lowering the purchasing cost for you for the house from $200,000 to $194,000. EXPANDED CONNECTIONS: As a real estate agent, you will work under a licensed real estate brokerage firm. The relationships you form with other agents at your brokerage will yield tips and lessons about the market. Additionally, through your colleagues you will build a strong network that helps you find and close good deals quickly and gain intelligence on recently-visited properties. DRAWBACKS OF A REAL ESTATE LICENSE While becoming a real estate agent offers many advantages, it is not without its challenges, especially for beginners. DIFFICULT TO ACQUIRE: Obtaining a real estate license requires a time investment on the order of 4 – 8 months for most in terms of classes, exams, applications and background checks. While the required courses differ from state to state, they generally cover topics including fair housing laws, ethical standards, real estate practices and record-keeping. In addition to time, an investment of a few hundred dollars to a couple of thousand dollars is required to obtain a license, along with ongoing investments icon continuing education and license renewal. TIME COMMITMENT: Once a license is in hand, it can take new agents several months before they obtain their first client or close their first deal. Marketing, advertising, showing and helping to stage homes can take many hours a week, all of which takes time away from searching for investment properties. MUST ENSURE NO CONFLICT OF INTEREST: Real estate agents have a legal obligation to prioritize the interests of their clients. As such, agents must ensure that they act in the ethical interests of their clients and disclose any conflicts of interests, such as if an agent is selling their own investment property to a buyer that the agent represents. A conflict of interest could lead to a lawsuit and/or penalties and damages. As such, it is crucial that agents who are also investors ensure that no conflict of interest, perceived or actual, occurs. Read my other Blogs: Click Here Follow Us at: @MySmartCousin
What’s the Difference Between Fix & Flip Hard-Money Loan and a Conventional Loan?
Whether you’ve bought your house for the price of a car or paid several hundred thousand dollars for it, becoming a brand new homeowner makes you feel like a million bucks. Becoming a real estate investor, once the province of the rich and famous, has opened up to the every-man, with dozens of avenues for getting a toehold as a buy-and-hold or buy-and-flip property owner. But first, a few definitions. What Exactly is a Fix & Flip Investment? The term ‘Fix& Flip’ real estate gained traction in everyday vocabulary beginning in the late 1980s. In the grip of an economic recession and surging home foreclosures (repeated 20 years later with the Great Recession), investors bought, rehabbed, and sold foreclosed properties, thus birthing the notion of ‘flipping’ or improving and selling a property quickly as a normal business practice. Properties ripe for fix & flip are those that offer a large and quick payoff potential. For instance, a house that is structurally sound but several years past its prime on the paint, flooring, appliance, and overall maintenance fronts. Such a house that requires a maintenance overhaul but isn’t a complete gut-job offers two key benefits. First is that the house can be improved quickly— a quick turnaround minimizes the risk that as weeks turn to months, the housing market suddenly sours. Second is that a maintenance overhaul, while expensive, costs tens of thousands of dollars less than a gut job, as major overhauls almost always involve a brand new roof and heating/ventilation system along with significant wiring and plumbing upgrades. Best Sources for Fix & Flips One strategy that is growing in popularity is purchasing a property that is old, under-maintained, or abandoned, followed by renovating it and then renting it out, either as a long-term rental or as a short-term Airbnb. Four Big Differences Between Hard Money Loans and Conventional Loans One way to differentiate hard money loans from conventional loans is to think about their purpose. Conventional loans are taken out to finance the residence that you will live in a long time— your primary residence. As such, the duration of a conventional loan is typically 15 years or 30 years, and the interest rate is relatively low as lenders believe that you are likely to prioritize payment of bills relating to your home-sweet home. Conversely, Fix & Flip loans are short-term in nature, funded by investors who expect a quick profit realized within months or a handful of years. Likewise, particularly for fix & flip investments, the ownership horizon itself will only be months or a year or so until the property is sold at its now higher, rehabbed value. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort A second difference is who the lender is. Conventional loans are generally provided or guaranteed by government-backed mortgage lenders such as Fannie Mae and Freddie Mac. Fix & Flip or hard money loans, however, receive no such cushion and are backed strictly by individuals or private sector entities. And each lender provides its unique set of benefits and trade-offs. Conventional mortgages are long-term and low-priced but require reasonably strong personal credit. Hard money loans can be provided quickly with no credit check but must be repaid quickly and at a relatively high-interest rate. A third difference is the eligibility requirement. All financial good deeds and skeletons alike come tumbling out when a conventional loan is provided, due to the stringent regulations and requirements that banks must abide by. Private money lenders face few restrictions and thus are not required to validate your creditworthiness. Their chief concern will be the value of the property that is securing the loan. Lastly is the time to complete the loan process. Conventional loans may take one to three months to complete, while fix & flip loans can be wrapped up in a few days. Read our other blogs: Click Here Follow us: MySmartCousin
Real Estate Investment Opportunities That Provide Housing For The Homeless
The National Housing Trust Fund Program (NHTF), funded by the Department of Housing and Urban Development (HUD) provides funding to build or rehabilitate housing that supports extremely low and very low-income households. According to HUD, 90% of NHTF’s funding is centered on repairing, preserving and developing rental housing and the remaining 10% of funding is used to assist with homeownership services. Eligible activities Eligible activities for the funds include: – fresh construction – restoration – acquisition of property – rehabilitation – financing expenses – relocation expenses Who are the Eligible Applicants – Non-profit developers – on the For-profit developers may also receive funding when they partner with non-profit developer who is receiving funding through the program. Read more Follow us : Click Here
Community Development Block Grants (CDBG), a Gateway to Affordable Housing
The development of its citizens is the surest path to the development of a country. People who are homeless or who cannot afford to purchase a home can become property owners through a little-known program sponsored by the U.S. Housing and Urban Development Agency (HUD), the Community Development Block Grants program (CDBG). HUD’s CDBG program, established in 1974, was created to provide a path to homeownership for low and moderate-income families. Under the program, states, cities, and counties are able to apply for grants annually to revitalize housing stock and infrastructure in their communities. Eligible activities under the CDBG program Funds provided through CDBG grants support housing-related activities including housing repairs and rehabilitation, down payment assistance and closing costs, and the purchase or construction of rental housing or owner-occupied housing. Housing counseling and relocation assistance are also provided to help aspiring owners in their home buying journey. You can read my recent blog here: Click Here
A Penny Doubled For 30 Days is How Much?
If you ask the average person if they want to have a penny doubled for 30 days or $2 million dollars, they are likely going to take the $2 million. It is a tricky question, doubling a penny doesn’t seem like it would amount to much right? Well at the end of 30 days that $0.01 is worth $5,368,709.12! Surprised? This is the power of compounding. Compound interest is the 8th wonder of the world. He who understands it, earns it; he who doesn’t, pays it. – Albert Einstein Pretty crazy stuff. To visualize what is happening each day take a look at the chart below: The key takeaway from this should be to start investing early and think of the long-term game. Let your money work for you. Oh and if a genie ever pops up and asks you if you would like $2 million dollars or your penny doubled for 30 days, now you know what to do. Reference: Click Here
Ring in Mo’ Money This New Year
Ring in Mo’ Money This New Year Nothing keeps your head more in a spin than out-of-control finances. Since most of us didn’t grow up with banker parents teaching us the ins and outs of budgeting, make this your year of earning your ‘3M’ degree— your ‘Masters in Making Money’. Your first class?— the Envelope System. ‘Cause Money Don’t Grow on Trees The cheapest car is the one you already own. Same with money, the quickest dollar is the one already in your pocket. Grandma was on to something when she used different coffee cans to stash away money. The envelope system works the same way. The Envelope What? The envelope system is as old as the hills, but the need is even more critical in our credit/debit card society where money goes so quick, you’re not entirely sure you ever earned it. The envelope system forces you to put your hard-earned coins on the table and parcel them out to different envelopes or spending needs. Prime categories for envelopes are required expenses that leave you scrambling every month— I see you car payments, rent and light bill— and non-critical stuff that eats a hole in your wallet— cigarettes, eating out, shopping. An Example Let’s say you take home $700 a week, after Uncle Sam gets his cut, and you spend your money on five main things: groceries, rent, car (including the note/gas/repairs), utilities and hanging out. Your $700 a week, or $2,800 a month, is going to get divided into 5 envelopes. If your rent is $1,000 a month, then each week you’re going to put $250 in the Rent envelope. If you spend $100 a week on groceries, then you’ll put $100 every week in the Groceries envelope. And so on. Your envelopes will serve two purposes: first, they’ll help you really see where your money is going. No longer will money run through your fingers without a trace— you will have to physically carry the Grocery envelope to the store, open it to pay for groceries, and put the change back in the Grocery envelope. If you get to the supermarket and realize you forgot the Grocery envelope, guess what, no groceries for you, it’s back home you go to get the envelope. Second, the envelopes discipline your spending. So let’s say you’re midway through the month and your cousin says it’s been a minute since y’all have gotten together, and to come to the movies with her tonight. Checking your Hang Out envelope and seeing only a couple of singles, you realize, not unless the movie is playing on television, you can’t do it. But then you spy the Rent envelope and see it fat with $500 in it. Two words: back…off… No money, I mean no money, comes out of an envelope to pay for anything other than what’s written on it. In other words, no two-timing between envelopes. When money in an envelope is gone, it is gone. Leftover Money So you arrive at the end of the week, look at your Groceries envelope and what do you know, there’s still some money left. Cool beans, you’re under budget! Your options? Reward yourself, within reason, but enjoy your budgeting success. Rewarding yourself for a budgeting job well done helps you feel not just pain, but also pleasure from the process. Next Steps Start now! Gather your envelopes, get a pen, and get started with your 3M degree!