You might have thought that the real estate industry has greatly suffered during the economic recession but you’re wrong. In fact, it was only the fear of the investors that got in the way of success. Most of the investors were uncertain and didn’t want to invest because they thought that it was too risky. Why don’t you look at the history of the real estate market and you will surely be surprised to find that over the years, the trend is constantly going up. Even during the economic recession, the same rule applies!
Off-street parking – No one likes to have their car side-swiped on the road or vandalized at night. By providing off-street parking such as driveways, garages, and well-lit parking lots, the tenant is given a sense of security about their vehicle.
The bottom line is–if you do not understand basic real estate terms like “short sale”, “wholesaling” and “wrap deal”, then you are at a serious disadvantage. Also if you don’t know how to negotiate with contractors, realtors, loan officers, sellers and even the government, then you are a statistic waiting to happen. However, I believe that the investors who make the mistakes noted above are still better than the investors who analyze and then analyze and then analyze without ever taking action. Mistakes will happen, that’s inevitable, but learn from them and that mistake becomes invaluable.
Today, the most popular type of mortgage notes are the ones obtained from the real estate industry. What happens is that the investor sells the mortgage notes to collect payment in lump sum form. This is a more profitable option as compared to waiting for payments to be forwarded every month. If you want to profit from these notes, you should learn how to use them as an instrument for property investing. Basically, you need to be able to locate, buy, and sell these notes. Familiarizing yourself with the techniques on how to do this will help boost your knowledge about the ins and outs of cash flow notes investing.
However there are pitfalls that investors make all the time. These mistakes are down to a lack of experience and can be extremely costly. However they are easy to avoid if you take the right steps. The most common mistakes made by novice investors are listed below.
Finding the right property is crucial. You want to find a property that will give you cash in your pocket each week whilst also growing at an above market rate. An increase in market value can allow you to either realise this gain by selling or refinancing your loan to unlock the equity to use for further investing.
The last few years have given us a market that many investors have never seen. Property is selling for prices that a few years ago seemed impossible to get. Foreclosures are at an all time high. Banks are starting to lend money slowly. So these seem like good ingredients for an investor to get into the property game. However, there are factors that you need to consider before making that leap into (or for some of you, back into) the real estate market.
Sellers more willing to take creative financing: In an up economy sellers can demand and get not only their selling price but get all cash. When the economy turns upside down so do the sellers. They are much more willing to consider other creative financing. This can take consistent and even long negotiations. I have seen sellers even take as much as 98%25 seller carries back financing after much negotiation. When the seller is behind on his payments to the bank, that bank may seriously consider a short sale or other options. There are many options that you as a buyer have when buying in a down economy that are not available to you in an up market.