Road map to Wealth

Posted by on Sep 25, 2013 in Blog | 0 comments

Can you achieve your Real Estate goals without a road map?   Ask anyone that has made a lot of money in the Real Estate “Game” and they will tell you that they follow a business plan (Action steps) and do not  leave things up to chance. These action Steps should give you an idea of the road map you can follow towards wealth building. •Step 1: Develop a business plan (Real Estate is a “business” whether you have 1 property or 100) •STEP 2: Make good practical decisions right from the start. Become a student of this “game “and learn as much as possible even before you make your first deal. Develop a working relationship with a Realtor that has expertise and also is an investor. •STEP 3: Look for properties that are in family friendly neighborhoods. The right property attracts the right tenants or buyers. Our suggestion is to find the worst property on the best block, since you can make many changes to a property but you can never change its location. •STEP 4: Develop a relationship with a local bank. We can give you some suggestions of banks that we work with ourselves. •STEP 5: Get comfortable with risk: How much financial risk are you willing to take on? As you know Real Estate deals with money, not necessarily your money but a majority of the time it will be borrowed from # 4. Get comfortable with the financial numbers and concentrate on increasing property values. •STEP 6: If you currently do not own any investment properties start out with a house or duplex, it is a great first step •STEP 7: Fix up #3. This may include everything from exterior paint, updating the kitchen and baths, landscaping etc. Try to hire a contractor that can do most of the work. Nicely updated properties will merit a much higher rent and a better tenant. Find out if remodeling will be requiring a permit. •STEP 8: Keep your personal expenses low. Reinvest any profits to increase your holdings. •STEP 9: Continue purchasing properties as you get more and more comfortable and you have the financial resources to do so. •STEP 10: Diversify your holdings. Rent only to tenants that meet your criteria (credit, criminal check, landlord verification, employment history). Overall Tips & Warnings •Interview several local banks to determine where you can get the best terms. Interest rate is only a small aspect of your consideration. Can you establish a line of credit, a note, etc? If you can set up a line of credit you can pay cash for this property (ies). It is important that you buy undervalued properties that after repairs and updates will...

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Finding a great deal

Posted by on Sep 25, 2013 in Blog | 0 comments

How do you recognize a good deal? Working with a Realtor that understands this market is a tremendous resource for anyone contemplating becoming an investor. Experienced Realtors that are also investors bring a tremendous knowledge that only comes with lots of experience, research, and education. Knowing what is a good deal or not should not be left up to chance. Is a $50,000 property a good deal, is a $100,000 property a good deal. The answer – it depends. To help you recognize what is a good deal or not a number of factors should be taken into consideration: 1. Cash Flow Will this property cash flow? What is the current rental market like? What is the vacancy situation like? How much money are you putting down and what is the interest rate? Is the subject property a house, duplex, four plex etc? All of these factors considered, ask yourself, “Will this provide income for me?” Also, ask the question, “How will this property cash flow compared to other potential properties?” For example, the $50,000 house that rents for $750 /month has a better income potential than a $100,000 duplex that rents for $1050 per month. A four- plex that costs $150,000 may bring in $2000 month in the same neighborhood. Which is a better investment? How important is income to you? Do you have other income? Do you need more income now, or is future equity more important? There’s no right answer to these questions, but are all factors to consider when looking at a potential purchase. 2. Leverage The less cash you put down on each property, gives you more opportunity to purchase more properties. We are in one of the best buying opportunities for the savvy investor; however banks are no longer open to 100% loans, and are looking for 70-80 % Loan to Value ratio. 3. Equity Are you buying the property at a huge discount (you better in this market- If you can’t get a deal pass? You should only be buying home runs. If you get great deal you will have instant equity. Equity can take a number of forms and depending on the situation. •A property undervalued- could be a great deal •A potential fixer upper — could be a great deal •A rezoning opportunity — could be a great deal •A poorly managed property — could be a great deal •A foreclosure- could be a great deal •A short sale –could be a great deal There are many ways to create equity, but the easiest form is to buy an undervalued property. 4. Appreciation Buying in the right neighborhoods (location, location, and location) should minimize the risk if you make a good...

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Retirement Investing

Posted by on Sep 25, 2013 in Blog | 0 comments

Are you concerned about your retirement? What are you doing about it? It’s time once again for YOU to take charge of your retirement planning as we suspect that you are deeply concerned about seeing you assets decline to perhaps the lowest level ever and now you are wondering what can YOU do about it right ? . As you continue to see the downhill slide of this economy YOU are wondering what your financial future holds right? YOU cannot be terribly excited about investing your hard earned money in anything right now; however we would encourage you to consider investing in Real Estate as now is exactly the time to invest some of your money that perhaps it is earning maybe 1-2 % interest in the bank. The time is NOW, as we cannot think of a better opportunity that currently exists in our area for the savvy individual to invest in “Omaha”. Timing is everything and the right time has arrived to get in the “game” and add to your portfolio or start investing. On any given day we can help you find undervalued properties on the Multiple Listing Service that just a couple of years ago sold for 30- 60 % and higher. You can enjoy instant equity by buying these properties that will make good rentals. As an example we know of someone that recently bought a foreclosure and after spending $7000 dollars on remodeling the bank had the property appraised for over $46,000 dollars more that purchase price plus fix up costs ( even in this market as conservative as appraisers are) In conclusion, while our economic future may be uncertain, in our opinion what is certain is that Real Estate right now for those that are willing to take some calculated risks, have a solid financial statement, access to cash, are credit worthy, are not looking for any gimmicks or empty promises etc, RE should the financial option of choice on anyone’s portfolio. Real Estate has met the test of time and will continue to do so. Take the first step and contact: Lot’s to think about. Here’s your first step: if you are interested in becoming an investor feel free to contact anyone of us on the Omaha Real Estate Investing Team for a confidential consultation: Prudential Ambassador Realtors Fred Tichauer, 402-679-3914, Shawn Prouse, 402-955-9058, Kelly Kirk 402-680-4153 or Kevin Schaben 402-630-9957 and you will be happy that you did. We consider ourselves to be one of the most experienced team in the Metro/Omaha area. With us you can count on: Excellence, Trust, Commitment, Honesty, Integrity, Leadership, Expertise, Practical Knowledge, Results and over 60 years experience as investors. Call us for a...

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What’s Your Game Plan?

Posted by on Sep 25, 2013 in Blog | 0 comments

What’s Your Game Plan?   If you are an active investor or thinking of becoming one what is your game plan for the properties you now own or for the next one you will be buying?   If you’re investing in Real Estate whether it is a single dwelling, condo, duplex, apartment the next time you are planning on purchasing a property, think about why this property rather than another. What do you intend to do with that property? Rent, flip, hold for a few years etc? Hopefully you are investing in RE with some goals in mind.  Where do these goals fit into your Game Plan? 1) INCOME Are the property(s) producing enough cash flow to cover the expenses, can you increase the rent? Are they still meeting you needs? 2) APPRECIATION Real Estate is considered a hard asset and an investment that acts as a hedge against inflation.  Owning properties in desirable areas (LOCATION<LOCATION<LOCATION) make for great rentals/flipping candidates. We believe that you make your money when you buy – It is easy for a property to appreciate when purchased way under market value. It doesn’t take a rocket scientist for figure out this formula.   Real Estate will appreciate over the long haul but for the sake of an argument if you paid $50,000 for a property 10 to 15 years and it has been rented all this time and it is only worth $50,000 but is fully paid for, are you better off? Who helped you to pay for the property? Did you make the payment or did the tenant?   3. TAX BENEFITS (How much taxes will you be paying for 2011?) Real Estate ownership has certain tax benefits that allow you to deduct operating expenses, (maintenance, taxes, interest, insurance, etc., along with any overall losses which are called “passive losses”. These loses can help you offset some of your other ordinary income. Are you getting every advantage that you can? Do you have an accountant that is very knowledgeable about real estate? Additionally, the big tax benefit is Depreciation.   Our government encourages us to buy investment properties so it is beyond me that more don’t invest in RE. It allows you to depreciate a little bit of the value of an investment property by a certain percentage each year. Currently you can depreciate over a 27.5-year time frame for residential properties and over 39 years on commercial type properties. What a wonderful gift to accumulate and build wealth.  I am amazed that more do not.   Another tax benefit is the use of IRS code, 1031 which involves exchanging of investment properties. Use of these provisions in the tax code allows one...

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