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…

Have you been focusing on single-family housing for your investment projects?  Why are multi-family properties worth a look for experienced real estate investors? Cash flow is more consistent with multi-family rentals than for single-family rentals.  When one unit is vacant, you continue receiving rentals from the other units.  In fact, hiring a property manager may be justified by the cash flow, relieving demands on you as the owner. Financing for multi-family properties focuses more on the cash flow from the property, less on your income and credit.  You may find it easier to obtain financing on one 50-unit apartment building Read more…

You may have a great real estate investment project in mind, but without sufficient credit experience the financing may be out of your reach.  Needless to say, working with someone else’s credit requires a high degree of trust, integrity and a well-written partnership or joint venture contract.   How can you create a contract using someone else’s credit to make the deal work? Your prospective partner or joint venture associate wants the project to be worth their risk, and they need protection of their assets.  What can you offer to make the project worth their while?  Common contract terms include… a Read more…

Did you know that in many cases you can use the equity in your home or other existing property to finance an investment property? But how? Here are some things to keep in mind… First, understand that your primary home may be your best and lowest-cost financing source.  Typically, second mortgages and homeowner’s line of credit (HELOC’s) have some of the lowest interest rates on the market, more favorable than construction loans, private lenders and other sources of funds.  In fact, if you have enough equity to finance the full value of the investment property, you can save on both Read more…

A good credit score can be the key to the funding that makes your real estate investment profits possible.  What are some quick steps you can take now to bring your credit score up? The three credit reporting agencies, Experian, Equifax and Transunion, are required to send you a free credit report once a year at your request.  Contact creditors to clear up any errors you find on the report.   You should dispute old negatives with creditors and reporting agencies, particularly small balances, as sometimes these will be removed without investigation. Pay  monthly bills, from utilities to credit cards, on Read more…

Over the past couple of weeks, we’ve been talking about leveraging other people’s credit and capital to help you acquire real estate investment properties. There are individuals and business ventures with money to invest or lend who are looking for high-return investment opportunities such as yours – aka “private money.”  How can private money fit into your real estate strategy? Look for private money terms with the flexibility to be tailored to your project cash flow.  For example, you may want an agreement deferring all profit-sharing, return of capital or loan payments until after the final sale. If you prefer Read more…

In today’s economic climate, buy-and-hold is a solid real estate investing strategy. Here are 3 reasons why: 1)      Return on investment. For the right property, well-managed and with a stable tenant, rental income is frequently 8% to 9% of market value.  After expenses, an annual return of 5% or more is reasonable — even in a still-uncertain economy!  Keep in mind this is if you own the property for cash. If you had even just 50% leverage on the property your cash on cash return along with your ROI go up substantially. That’s what makes this strategy so attractive right Read more…

As we discussed in the previous post, no matter how much money you have or how good your credit is, eventually you’ll hit a brick wall if you try to build your real estate portfolio all on your own. In other words, you need investing partners so that you can leverage their credit and capital and acquire additional properties. Last time, we talked about using someone else’s credit.  Today, we’ll discuss how to use someone else’s capital to acquire more properties… Receiving a monetary gift is the simplest means by which you can use someone else’s capital for an investment Read more…

Every real estate investor needs to understand not just what’s going on in the local market…but what’s happening in the broader national and even global economy as well. Here are three economic websites you should read weekly to stay on top of your game… 1)      The Wall Street Journal.   One of the site’s best sections is called Market Watch, which focuses on both local markets and big-picture economic factors.  In addition, The Journal keeps close tabs on international influences on the economy, as well as evolving government policy and, of course, business trends. 2)      The Economist  is an internationally-respected site Read more…

No matter how good your credit is or how much of your own capital you have to spend, eventually you’ll hit a brick wall as an investor if you don’t start leveraging other people’s money and credit for your portfolio. Here are some ways to use other people’s credit to invest in real estate… 1)      Create a joint venture deal with a financing partner, where they assume the mortgage and the expenses of a real estate investment property, while you handle strategy and management.  Very likely both the loan and the title to the property will be in your partner’s Read more…