SFR IN REAL ESTATE: AN INVESTOR’S GUIDE TO SINGLE FAMILY RESIDENCES
Single-family residences, or SFRs, are a popular investment option for real estate investors. These properties, also known as single-family homes or single-family dwellings, provide a range of benefits and opportunities for investors looking to generate passive income or build wealth through property ownership. At MY SMART COUSIN, we want you to get into property ownership! We can help by providing expertise and resources for budding Real Estate Investors, and homebuyers of all stripes–especially those looking to buy a house for the price of a car! As Real Estate Investment Coaches, we work closely with aspiring real estate investors, focusing especially on Black and Brown folks and women, to position you for success in developing and executing your plan for investment and building generational wealth. In this blog post, we will take a closer look at SFRs and provide an investor’s guide to understanding and investing in these properties. WHAT IS AN SFR? First, let’s define what exactly an SFR is. As the name implies, an SFR is a single-family residential property. These properties can be found in a variety of neighborhoods and price ranges and can include everything from small starter homes to large, luxury properties. SFRs are typically owned and occupied by the person who holds the mortgage on the property.
RAISING CAPITAL FOR REAL ESTATE IN 6 STEPS
Do you dream of seeing your name on the deed of a new Real Estate property? Whether you’re ready to make an investment or just taking those first steps toward buying a home, having enough capital is critical. However, if budgeting hasn’t saved your finances from being tight, there are still ways for you to raise capital. And best of all – it can be quicker than you think! MY SMART COUSIN is here to help you with your Real Estate investment needs. Whether you’re looking for guidance on getting started in Real Estate investment and buying a house for the price of a car, or specific strategies suited to your particular life events, we’ve got you covered. As a Real estate Investment Coach, we are committed to helping all clients create financial security and wealth, especially Black and Brown folks and women. Here, we’ll discuss 6 simple steps that can help make your Real Estate dreams come true. So let’s get started and explore how raising capital for Real Estate works! WHAT DOES ‘RAISING CAPITAL’ FOR REAL ESTATE MEAN? Raising capital in Real Estate refers to the process of securing funding for Real Estate investments. This can involve acquiring financing through traditional means such as mortgage loans or private loans, or seeking investment from individuals or companies through crowdfunding platforms or other methods. The goal of raising capital in Real Estate is to secure the necessary funds to purchase and manage properties, with the intention of generating returns through rent, appreciation, or other means. Real Estate investors may seek to raise capital for a variety of reasons, including to acquire new properties, to renovate and improve existing properties, or to cover operating expenses and other costs associated with owning and managing real estate assets. THE IMPORTANCE OF RAISING CAPITAL IN REAL ESTATE The significance of raising capital in Real Estate lies in the fact that it is often necessary to secure outside financing in order to purchase and manage real estate properties. Real estate can be a significant investment, and without sufficient capital, it may not be possible to acquire and maintain properties. In addition, raising capital can allow real estate investors to take advantage of opportunities as they arise, such as purchasing distressed properties at a discounted price and flipping them for a profit. Raising capital can also allow Real Estate investors to diversify their portfolios and mitigate risk by spreading investments across multiple properties. This can be particularly important in the event that one property experiences a vacancy or unexpected expenses. Overall, raising capital is an essential part of successful real estate investing, as it enables investors to acquire and manage properties and pursue their investment goals. Here are the six most crucial steps for raising capital in Real Estate Before you start trying to raise capital, it’s important to have a clear idea of what you want to achieve with your real estate investments. Do you want to flip houses, build a rental portfolio, or do something else? Once you have a clear goal in mind, create a plan outlining how you will achieve it. This plan should include the types of properties you will target, your target market, and your projected returns. Once you have a plan in place, it’s important to determine how much capital you will need to achieve your investment goals. This will involve calculating the cost of acquiring and rehabilitating properties, as well as the ongoing costs of owning and managing them. Be sure to include a cushion for unexpected expenses as well. There are a variety of ways to finance real estate investments, including traditional mortgage loans, private loans, and crowdfunding platforms. Each option has its own set of pros and cons, so it’s important to carefully consider which option is best for your specific needs and goals. In order to raise capital, you will need to tap into your network of contacts. This could include family, friends, business associates, and professional connections. It’s also a good idea to join local real estate investment groups and attend industry events to meet potential investors and lenders. Once you have identified potential investors, it’s time to make your pitch. This will involve presenting your investment opportunity in a clear and compelling way, highlighting the potential returns, and minimizing the risks. Be prepared to answer questions and provide financial projections and other supporting materials. If you are successful in convincing an investor to fund your real estate investment, the final step is to close the deal. This will involve negotiating and finalizing the terms of the investment, including the amount of capital being invested, the expected return on investment, and any other terms and conditions. Once the deal is closed, it’s important to continue to communicate with your investors and provide regular updates on the progress of your investment. WRAPPING IT ALL UP In conclusion, raising capital for real estate investments is a crucial step in building a successful portfolio. By defining your investment goals, determining how much capital you need, considering your financing options, building your network, pitching your investment opportunity, and closing the deal, you can successfully secure the funding you need to achieve your goals. While the process can be challenging, it is well worth the effort for the potential returns and long-term financial success it can bring. YOU CAN ALSO READ: WHEN THE HOUSING MARKET REBOUNDS, SHOULD YOUR REAL ESTATE INVESTING STRATEGY CHANGE? FOLLOW US: @MYSMARTCOUSIN
FEE SIMPLE OWNERSHIP VS. LEASEHOLD: KEY DIFFERENCES
When you’re considering buying a property, it’s important to understand the difference between fee simple ownership and leasehold. Why? Because with fee simple ownership, you own the property outright – there are no restrictions on what you can do with it. With a leasehold, on the other hand, you only reside in the property for a limited period of time; after that, the property reverts to the owner. Additionally, leaseholders may be subject to certain restrictions, such as not being able to make changes to the interior or exterior of the property, something that can be particularly important when considering a commercial property that may need to be redesigned to accommodate a particular business type. So before you open your wallet, be sure to fully understand the implications of each type of ownership. MY SMART COUSIN Want to get into property ownership? We can help you move from vision to execution! At MY SMART COUSIN, we provide the expertise and resources for budding property investors and homebuyers of all stripes, especially those who are looking to buy a house for the price of a car, the same way we have dozens of times. As Real Estate Investment Coaches, we work with aspiring homeowners and investors, with a particular focus on Black and Brown folks and women, to develop and implement an investment strategy, including, whether you should consider fee simple or leasehold ownership. WHAT IS FEE SIMPLE OWNERSHIP? Fee simple ownership is the most complete form of ownership. The owner has full use and enjoyment of the property and can dispose of it as he or she wishes. There are two types of fee simple ownership: Fee Simple Absolute and Fee Simple Defeasible. · Fee Simple Absolute is the most common type of fee simple ownership. The owner has an unrestricted right to enjoy and dispose of the property. · Fee Simple Defeasible is less common and may be subject to certain conditions, such as the payment of taxes, or compliance with zoning regulations. In either case, fee simple ownership gives the owner a great deal of control over the property. WHAT IS A LEASEHOLD? When you hear the word “leasehold,” you might think of leasing a car. But in the context of real estate, a leasehold is an ownership interest in land that is leased from a lessor. · The most common type of leasehold is a residential lease, in which a tenant pays rent to a landlord in exchange for the right to live on the property. Leasehold structures are often used for manufactured housing, where the manufactured house itself might be owned by the resident, but the land that the house sits on is leased. · Commercial leases are also common and can involve anything from office space to parking lots. Leaseholds can be either short-term or long-term, and usually include an option to renew the lease at the end of the term. In some cases, a leasehold may also give the tenant the right to purchase the property outright. Whether you’re looking for a place to live or a place to do business, it’s important to understand the basics of leaseholds before signing any documents. SOME OF THE KEY DIFFERENCES BETWEEN FEE SIMPLE OWNERSHIP AND LEASEHOLD When you purchase a home, you may choose between fee simple ownership and leasehold ownership. While both options offer the potential for long-term stability and security, there are some key differences that you should be aware of before making your decision. · Fee simple ownership gives you full and unencumbered ownership of your home. This means that you will own the property with effectively no strings attached, and can do with it as you please. Because you own the property in full, you also own all of the attendant obligations including responsibility for maintenance, repairs, property taxes, and property insurance. Leasehold ownership, on the other hand, does not provide the same level of control and the same scope of responsibility. Instead, you will be leasing the property from a landlord for a set period of time. During the lease period, you will be responsible for paying rent and following any rules or regulations that are set by the landlord. You will also be responsible for paying utilities and other expenses that the landlord assigns to you in the lease, such as trash, pest control, and landscaping. At the end of the lease, the property will revert to the landlord. Another key difference between fee simple ownership and leasehold ownership is the length of time that each option provides. · Fee simple ownership is typically permanent, meaning that you will own the property for as long as you wish. Leasehold ownership, meanwhile, is typically much shorter in duration. Most leases are for a maximum of 99 years, after which point the property will revert to the landlord. This means that if you purchase a leasehold property, you should be prepared to relinquish ownership at some point in the future. Next, it is important to note that fee simple ownership typically offers more security than leasehold ownership. This is because fee-simple ownership gives you full control over your property, while leasehold ownership leaves many decisions up to the landlord. As such, fee simple ownership may be a better option if you are looking for a long-term investment. · Fee simple ownership is typically more expensive than leasehold ownership because you are buying the property outright, and with it, the attendant risks, taxes, and obligations of ownership. With a leasehold, you are only paying for the right to use the property for a set period. Some leases, particularly very long-term leases, require that some portion of maintenance be paid by the lessee, so you will want to explore and negotiate this. · The duration of a fee simple ownership property is effectively forever, or until the owner sells it. Leasehold properties usually have a maximum lease duration of 99 years, and in practice, are
HOW TO BUY INVESTMENT PROPERTY IN SEVEN SIMPLE STEPS
Are you thinking of buying an investment property? If so, you’re in good company. Investment property is a great way to grow your wealth, and there are plenty of opportunities out there for savvy investors. But buying an investment property can be a daunting prospect, especially if you’re not familiar with the process. One little-known but very valuable real estate investment strategy is to target the low end of the market. At MY SMART COUSIN, we specialize in helping new property investors conceptualize, fund, and build their Real Estate empire. As seasoned Real Estate Investment coaches, we work with clients to penetrate the lucrative market of buying a house for the price of a car, or buying at a higher price point if preferred. Our expert team works with aspiring homeowners and investors, with a special focus on Black and Brown folks and women, and customizes a tailored strategy and roadmap to gain entry into the real estate industry and thrive. Are you looking for ways to invest your money and see a good return? If so, buying an investment property may be the right choice for you. But, investing in Real Estate can be tricky – especially if you’re new to it. That’s why we’ve put together this guide on how to buy an investment property. Keep reading for steps that will help make the process smoother and more successful. WHY BUY AN INVESTMENT PROPERTY? When it comes to investing in real estate, there are many different options to choose from. However, one of the smartest choices you can make is to invest in an investment property. Here are three reasons why an investment property is a wise choice: · First, an investment property will provide you with a steady stream of income. Unlike other investments, such as crypto, precious metals, stocks, and bonds, an investment property will generate rental income that you can almost set your watch by every month. This rental income can help offset the costs of the mortgage and other expenses associated with owning the property. · Second, an investment property can appreciate over time. While housing prices have cooled some since the Spring-time highs earlier in the year, prices remain robust throughout most of the U.S. due to high demand among renters for affordable housing. This underlying foundation will likely support the value of investment properties for many years to come, providing solid annual returns when you eventually sell the property. · Finally, an investment property can offer significant tax advantages. The IRS allows owners of investment properties to deduct a portion of the mortgage interest paid on their taxes. This deduction can save you thousands of dollars each year, making it easier to afford your monthly mortgage payments. Buying an investment property is one of the smartest choices you can make when it comes to real estate investing. With a steady stream of rental income and potential for appreciation, an investment property can offer significant financial rewards. And with tax advantages that can save you money each year, owning an investment property is a wise choice for any investor. SEVEN STEPS ON HOW TO BUY AN INVESTMENT PROPERTY 1. FIGURE OUT JUST HOW MUCH YOU CAN AFFORD Just because a property is a good deal doesn’t mean it’s a good deal for you. If you can’t afford it, then it likely will be a terrible and painful investment. Be realistic about your budget and make sure to factor in all of the associated costs, such as repairs, preventative maintenance, property insurance, and property taxes. Once you’ve done this, add a contingency factor of ten percent, or more, to account for any expenses that were under-estimated, or never estimated at all. As the old saying goes, you don’t know what you don’t know. Thus the reason for a contingency: is to add a fudge factor that helps absorb these expenses. 2. RESEARCH THE MARKET Not all investment properties are created equally. It’s important to do your homework and understand the market conditions in the area where you’re looking. Look through news articles and property valuations to see what the trends have been over time. Likewise, read forward-looking city plans and local economic reports to see what’s on the horizon for your target market. If an environmental hazard has recently occurred in the area with the little political will or economic focus on fixing it— think Flint, Michigan’s water crisis in the early days— view these as red flags. 3. GET PRE-APPROVED FOR A LOAN Once you know how much you can afford to spend, it’s time to start talking to lenders. Getting pre-approved for a loan will give you a better idea of what kind of interest rate you can expect to pay, and will help streamline the property-investment buying process. You want to ensure that when you make a purchase offer, you can actually follow through on it if it is accepted. Lining up financing in advance will lend credibility to your offer. 4. HIRE A QUALIFIED REAL ESTATE AGENT A good real estate agent will have experience with investment properties and will be able to guide you through the process of purchasing an investment property, which can differ from purchasing a primary residence. An investor-focused real estate agent can also offer helpful advice on negotiating prices and finding contractors. 5. MAKE AN OFFER ON THE PROPERTY When you find a property that you want to buy, your real estate agent will help you make an offer that takes into account the current market value of the property as well as any repairs or upgrades that may need to be made. 6. HAVE THE PROPERTY INSPECTED Hard money and other non-conventional lenders may not require a property inspection. That said, a property inspection can still play an important role, especially for new investors. An inspection shines a light on what needs to be fixed or replaced, and how urgently. This information is vital in helping to determine the fair market value of
HOW TO MAINTAIN YOUR INVESTMENT PROPERTY LIKE A PRO
Maintaining your real estate investment property doesn’t have to be a daunting task. By following some simple tips and tricks, you can keep your property in top condition and protect your investment. At MY SMART COUSIN, we help aspiring homeowners and investors, with a special focus on Black and Brown folks and women, find Real Estate Investment opportunities that will allow them quick access to buy a house for the price of our car, our personal favorite way of investing, and maintain their investment property like a pro, no matter the investment price point. In this blog post, we’ll share some easy ways to maintain your property and make sure it stays rent-ready and in great shape. Read on for more information! · KEEP THE PROPERTY CLEAN AND WELL-MAINTAINED When it comes to maintaining your rental property, first impressions are everything. A potential tenant driving by should see trim bushes and low-cut grass. Elaborate landscaping or a veritable botanical garden’s worth of flowers is not necessary, the key is a house that looks neat and well-kept from the outside. Beyond their visual appeal, another benefit of well-trimmed bushes and trees is that it lowers the risk of storm damage, should a large branch fall onto your roof or hit a window. Bushes that are cut a ways back from your property also create fewer pathways for insects and other critters to climb straight from a branch onto the side of your property. Once a potential tenant steps inside the property, they should be greeted with a clean, well-lit, and pleasant-smelling space that exudes comfort and warmth. As a landlord, it’s your responsibility to make sure that your property is always in top condition, meaning regular cleaning, preventative maintenance, and prompt repairs when issues arise. Of course, this can be a time-consuming and expensive task, but it’s a great habit to start and an essential step in keeping your tenants happy and your property value high. Luckily, there are some easy ways to stay on top of maintenance without breaking the bank. · One way is to hire a professional cleaning company to do a deep cleaning of the property between tenant move-ins. Likewise, while keeping the garden trim may be a responsibility of the tenant in the lease, hiring a company to perform annual landscaping and vigorously cutting back bushes and trees that may be out of reach for renters, pays dividends in avoiding citations and keeping Mother Nature firmly outside. · Alternatively, if your tenant is handy with small tools and yard work, you can pay them to perform handyman tasks and do annual landscaping. Whatever approach you choose, make sure that you develop and follow a schedule to ensure that major items don’t fall off your radar— your investment will thank you for it in the long run. · REGULARLY INSPECT THE PROPERTY FOR DAMAGE OR NEEDED REPAIRS As a landlord, one of your most important responsibilities is to regularly inspect your rental property for damage or needed repairs. By staying on top of small issues early, you can prevent them from turning into larger, more expensive problems down the road. Ideally, you should inspect your property every few months, or at least once a year. · During your inspection, take the time to walk around the outside of the building and check for any signs of damage, such as cracks in the foundation or missing shingles. · Then, go inside and check all of the rooms, paying close attention to the condition of the floors, walls, and ceilings. · Be sure to also test all of the appliances and fixtures to make sure they are in good working order. · If you notice any problems, make the necessary repairs as soon as possible. By following these tips, you can help ensure that your rental property remains in good condition for years to come. · RESPOND QUICKLY TO ANY TENANT REQUESTS OR COMPLAINTS So how can you make sure you’re responding quickly to tenant needs? · First, it’s important to have a good system in place for tracking requests and complaints. There are numerous online options for tracking everything from rent to new and closed maintenance tickets to photos of completed repairs— making use of one of these tools can save you valuable time. · Once you have a system in place, it’s important to be responsive to every request or complaint. By being responsive to tenant needs, you show concern and respect for your customer and help prevent small problems from becoming big ones. That will go a long way towards keeping your customers happy and rental property in tip-top shape. · MAINTAIN A POSITIVE RELATIONSHIP WITH YOUR TENANTS As any experienced investor knows, one of the most important keys to successful real estate investing is maintaining positive relationships with your tenants. After all, without happy tenants, it would be very difficult to keep your properties rented and generate income. There are a few simple things you can do to keep your tenants happy and make sure they keep renewing their leases. · First, promptly address any maintenance issues that arise. No one wants to live in a property that is in disrepair, so by keeping up with repairs, you’ll show your tenants that you care about their comfort and well-being. · Second, where possible, work with your tenant to accommodate requests such as a financial payment plan if your tenant is having difficulty paying the rent. Being proactive and coming up with an arrangement that works for both of you and that your renter can stick with, can build goodwill, help your tenant stay afloat until they’re back on their feet, and meet your income objectives. · Lastly, take the time to get to know your tenants and build relationships with them. Just as you would with any other business, get to know what other business needs your customers to have and how you might