It’s no secret that buying and flipping foreclosures can be a great way to make money in a sometimes slow real estate market. But what is a secret in how to get to the foreclosures before they go to auction or become bank-owned so you don’t have to go through all the rigmarole of buying a bank-owned property.  The secret is in pre-foreclosures.  In other words, one of the best ways to make money on a fix-and-flip property is to get a property before it is fully foreclosed on. Here are some tips on how to do it successfully. 1)    Stay Read more…

Real estate investments in multi-family properties have a number of important differences with investments in single-family rental homes.  What are you getting into when investing in a multi-family property? Rental cash flow is more dependable from multi-family properties.  You continue receiving income from occupied units even while others are vacant.  A vacancy can be a chance to improve that unit without forgoing all of your rental income. Maintenance separates the investors who are up for multi-family from those who aren’t.  That’s because frequency of maintenance needs is much higher in multi-family units.  In addition, Tenant management goes alongside physical property Read more…

Investing in multi-family properties can be an extremely rewarding and lucrative strategy.  But be forewarned: property management is much more challenging and crucial when dealing with multiple units. Before you purchase, plan carefully how you will handle property management for your multi-family investment project.  The property manager – you or a professional –  not only keeps the physical property from falling apart, but also keeps the tenants happy enough to want to stay. If you are new to multi-unit property management, even with a professional manager helping you it will be easier to learn with a limited number of tenant Read more…

Did you know that home equity loans on investment properties are available from many lenders?  Some even offer an easy lending process when they hold the first mortgage on the property.  What can you do to secure a home equity loan on your investment property? Use property in which you have a larger amount of equity to market value.  Banks and other lenders typically will not increase the total debt against the property beyond a total of 75% of the market value. If your first-mortgage lender refuses to offer a home equity loan, line of credit or a second mortgage Read more…

If you’re looking to get into multi-family investing, you might be concerned that it’s trickier to finance a multi-family property than a single-family property. Actually, it’s just different — and sometimes it’s even easier!  What are some of the options for financing your investment in a multi-family property? A bank-financed mortgage loan will have you gathering increased documentation for multi-family properties, compared with a single-family unit, including signed rental contracts verifying the rental income reported.  Institutional lending is certainly an option, but also consider the alternatives below, for possible cost savings and a more simple financing process. Be prepared for Read more…

Private money can be an invigorating source of funds precisely because it is outside of the formal mortgage and lending institutions.  Private investors expect a high rate of return, but are usually easier to deal with than institutions and have more flexible requirements.  What potential risks do you take when using private money for your financing?   1)      The investor’s personal financial issues jeopardize the project – A private money investor may not be all they claim to be, financially or personally.  What if you find out later that your investor has financial problems ranging from bankruptcy to divorce?  You Read more…

So, you are seriously researching your first real estate investment in a multi-family property.  Where can you start? First and foremost, as you evaluate any property, stand firm on your established ratios for cash flow and profitability.   This includes thoroughly understanding the condition of each property and what costs will be in order to attract the rental income achieving the desired profitability.  If you think a currently under-performing property could meet your criteria with an investment in some upscale improvements and subsequently higher rents, carefully assess the local economy and rental market, as well as the cost estimate from your Read more…

So you have a deal you want to do, and someone who is ready to put their own capital in to help finance the project.  How can you put together a joint venture contract to use someone else’s capital in a real estate investment project? Start with a statement of the basics of the joint venture, including things like the name of the business and the amount invested.  Be sure that you specify the specific purpose of the agreement, and at what point the joint venture will be concluded. Get into the nitty-gritty of how the venture will be run.  Read more…