Real Estate Formula
Real Estate Formula
It was a simple real estate formula. The ads ran in our small-town newspaper for years before I realized exactly what was going on. They were always the same: A house for sale with 5% down and payments of 1% of the purchase price. Maybe a three bedroom home for $90,000, for example, with $4,500 down and $900 per month payments. When a friend started doing the same thing he explained the process to me. It was a way to get a great return on capital, and it was the opposite of buying with no money down. There is no down payment at all when you buy, because you buy for cash. The Simple Real Estate Formula You probably know that when you buy for cash, you can often get a much better price. With no financing contingencies in the offer, and the promise of a faster closing, sellers are willing to sell for less. You can offer $95,000, for example, on a house that might be worth $108,000. If you can’t get it for less than, say, $99,000, you walk away - there are always other opportunities. Once you buy the house, you put few thousand into high-return repairs and improvements. These might include paint, carpet, and maybe asphalt for a dirt driveway. For our example, we’ll say you spend $5,000. Let’s suppose the house is worth $116,000 now. You’re ready for the next important step in this real estate formula. You put it up for sale, targeting buyers who can’t get financing easily. You provide the financing. Because you are making it easy for the buyer, you can get more than the $116,000 value for the home - and do it without paying a realtor’s commission. Let’s say you sell it for 123,000. The buyer needs a down payment of just 5%, or $6,150, and makes monthly payments of $1230 per month. You charge higher interest than the going rates at the banks, of course. This is a win-win situation. Your buyer is able to buy a home instead of renting, and you get a capital gain of perhaps $16,000 after expenses, plus good interest. Your total rate of return will often be over 20%! In our town, the first to do this consistently were a father and son team of lawyers. They saved money by doing their own foreclosures when necessary. Once they foreclosed, they raised the price and sold the home all over again. They made millions. Did you know that if you can get an average return of 18% on your money, you’ll turn $75,000 into more than one million dollars in about fifteen years? That’s the power of a good real estate formula. Immo Visit Marrakech : Company Of Real Estate In The Marrakech , Morocco : http://www.immo-visit-marrakech.com
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Buyers Tips: Intelligent Home Buying
The summer season is traditionally the period in which there is the most action on home markets. Summer is an ideal time to move as there are usually no weather concerns and children can be moved and registered in new schools by September. This makes it vitally important when selling your home in the late spring and summer season, to make sure that your home has a positive presence on the local real estate market and that it is ready for showings.
Selling in summer also presents some concerns as more of the property will be under scrutiny. This is especially true is kids are part of the equation. in preparing for a summer showing it is easiest to divide the outside tasks from the inside and concentrate on each in turn.
- Outside - The exterior of a home is vital to any home show as first impressions are an extremely powerful thing. The outside will be the first things that people see and decisions can be made strictly on this presentation. Take some time to check out the other homes that are on sale in your area and what they appear like from the street. Once this is done you now have a standard that you should try to exceed in order to bring the buyers to your home. The best possible situation is that buyers take one look at the home’s exterior and forget about the other homes that they have seen. In order to achieve this the yard will have to be spotless, with neatly trimmed lawns and beautiful colorful gardens. The yard should be free of debris and any garbage and any decks should be clean and scrubbed of mildew. Putting a fresh coat of paint on the home never hurts the appearance and the same holds true for any exposed wood accents. Wood porches and decks should be power washed to remove any grime and stained.
- Inside - If the outside of the home is impressive, the inside should be stunning. Cleanliness is the absolute key for home interiors. Any mess can and usually will be greeted with disdain by buyers. Remember that when buyers are looking at home they are usually doing mental subtractions from your asking price as they view the home. Any negatives will quickly be subtracted. Outdated appliances and fixtures are important things and they can really bring down a home’s presentation value. Updating all older items (save for antique furnishings) can help any home to show better. If there is any questions about what to leave in the home and what to get rid of for the show you can always consult your realtor or a professional home stager.
Any home show, to be successful must combine the interior and exterior of the home into a comprehensive and collected package that shows it’s value to the buyer without having the price questioned. Essentially you would like the buyer to walk in and view the home and ask “To whom shall I make out the cheque?” Good Luck!
Reed Brinton is a experienced and professional realtor who is part of a five-generation tradition of service in <a href="http://www.brintonrealty.com/">Kansas City real estate</a>. To view available homes in Kansas City, check out our <a href="http://www.brintonrealty.com/home_search_frame.shtml">Kansas City MLS</a>. If you have any questions please give us a call or visit us online at www.brintonrealty.com
Moving to the Gulf Coast of Florida - Part 4 Posted By : IC
After spending some time setting up all the paperwork involved with the process of moving to the beautiful gulf coast of Florida there are intelligent ways to set yourself up for success in this place, learn about them on this article.
Why the Real Estate Market beats Stock market
The concept of the doubling time of money has been applied by financial planners to the stock market for years. It is the Rule of 72 which states that whatever your return is divided by 72 is the amount of time it takes to double your money. Example: 12% return doubles in only six years. However, very few combine this with the concept of leverage which is borrowing money to enhance a return on investment. For example, 10% increase on a home that you put 10% down is a 100% return. If you put 20% then it would be a 50% return. $40,000 on a house that sells for $400,000 and it appreciates over a year or two to $444,000 then you have doubled your original investment.
Now, take a magazine for example. You probably understand that their selling costs are 6% and taxes 20%. Let s take a look at what it really takes to net 10%. The house would really have to appreciate 16% so that is $464,000. You net $40,000, but the government takes $8000 of that so you need $8000 more or $472,000 to truly net 10%. Then you have doubled your money. How long does this appreciate take? Well it could be one year or five depending on how good a real estate investor you are.
Most people really have not put this into a financial plan to figure out how long it would take to get X number of dollars, while some financial planners will tell you, that you can t be sure of the returns (which is true) but don t let them fool you. You can t be any more certain of their returns in the stock market.
I hope this has been helpful. Feel free to contact me if you have any questions.
Sincerely,
Glenn
Glenn Wilbor is President and owner of California Equities, a nationwide Wholesale Mortgage Company that has had a presence in the downtown San Diego area for more than a decade. Glenn and his company specialize in residential and commercial mortgage finance, real estate and development and have been instrumental in influencing the look of the San Diego skyline. For more information about California Equities, refinancing and development with Glenn or employment opportunities, please visit www.CaliforniaEquities.com or contact Glenn at glenn@CaliforniaEquities.com.
What's Up In Austin (pt 2)
There is a lot going on in Austin right now. In many areas around the country the real estate market is fairly slow but over the last two months, Austin’s home market has seen steady increases. In fact that is a bit of an understatement as this past May set a record for home sales in the capitol region. This is refreshing change to what we have come to expect from the national real estate market recently. In addition the median home price was up 5% from last year, active listings are up and the time on the market has actually decreased. Austin homes are showing great worth as they are appreciating at double the national rate.
In addition to the great growth in Austin’s residential core, the city continues to develop the amenities that a growing city depends on. One of these amenities is seeing an upgrade and women in the Austin area will be glad to hear about it. St. David’s Health Care system is set to invest more than $100 million in women’s health services. A new hospital is part of the budget from the money with the site set for MoPac Boulevard south of Parmer Lane. This stands to double the capacity for women’s health issues and facilities for child delivery. It would seem that the population is also set for a bit of expansion.
In a national market that has shown signs of decline, the market in Austin seems to be going nowhere but up. This speaks highly of the drawing power that Austin possesses and of the amenities that are offered by the city itself. Austin is a great place to invest your real estate dollars, it is a capitol region and as such will likely continue to grow. With great education and an even more impressive job market with a focus on technology, health care and government employment. Austin also has a great number of international companies that round out the employment picture. This is a city that is poised for the future and ready to cope with the needs that a growing population base requires. Look for big things to happen in Austin in the near future.
Eric Bramlett is a realtor & broker servicing the Austin TX real estate market. Eric provides elite service and information to clients interested in homes and properties in Texas. For more information contact Eric, or visit online at www.ericbramlett.com