Real Estate 101 (2)

The danger with real estate investing is that leg-work is often
underestimated. Everyone wants to stand in line at the check-cashing
booth, but few commit to the working hours. When considering
investment properties, make note of the following:

> Consider a Partner
> Many people who purchase investment properties ignore the benefits of
> taking on a partner. Choosing a partner should indeed be a judicial
> process involving credit and reference checks, and goal and character
> analysis, to name a few. More than one salary at stake will increase
> the your purchasing power, opening up many opportunities. Also, some
> states, such as Pennsylvania, offer liability protection and tax
> benefits for registered partnerships.
>
> Take a Drive
> Even if you haven't yet applied for a mortgage or a line of credit to
> purchase a home, behave as though you are ready to buy. Drive around
> neighborhoods and areas within which you would like to purchase
> property, making note of the street names as you navigate. (This
> leg-work will save you a lot of time during your property-hunt later.)
> Take inventory of the upkeep of the homes, the people, and the general
> ambience of the neighborhood. It may seem silly, but it speaks volumes
> about the area's class structure and potential direction. Generally,
> if you would live there, most likely, others will too.
>
> Take a Trip
> Take a trip to the county tax assessment office. Look up the street
> names and find out about the real estate sales in those areas. (This
> information is accessible to the public and may even be available
> online.) Obtaining tax information is also helpful because it will
> help you avoid offering more money than the house (neighborhood) is
> worth should you decide to buy.
>
> Consider The Fringe
> Don't be afraid to hold on to your interest to fringe areas (slightly
> lower-class neighborhoods). Many businesses seek out fringe areas
> because of the lower taxes and access to customers in the nearby
> high-end areas. New businesses are a sign of revitalization, which
> means greater stability down the road.
>
> Multi-family Units are Tops
> A good deal on a single-family unit is by no means a candidate for
> dismissal; however, multi-family units generally have higher positive
> returns than do single-family units. Consider this: a converted
> single-family home now stations two units. Suppose the home could rent
> for $600 per month in a certain area and apartments could rent for
> $400 per month. In this case, the duplex provides a $200 return over
> the single unit—and it should cost about the same!
>
> Learn the Process
> So many people miss out on potentially profitable deals in real estate
> because of their lack of knowledge during the mortgage loan process.
> Before shopping for a loan, you should know what the average interest
> rates are. Know your rights! Don't get taken for a ride by lenders
> because you don't understand their jargon. Do your homework.
>
> Talk to People
> This is perhaps the least adhered to rule of all. Learn from other
> people's past mistakes. You may even wish to seek out individuals and
> companies that have real estate investments. Most homeowners and
> business owners who have experienced painful blows in the home-buying
> process can't get to the bullhorn fast enough. You'd be surprised at
> what information veterans can offer.
>
> Take your time
> Beware of get-rich-quick schemes and business relationships based upon
> other people's misfortunes. Ultimately, real estate is a business that
> generally has more long-term than short-term benefits. While
> short-term payoffs are replete in the business, be careful not to
> allow Mr. Greed to overshadow your humanity and better judgment.
> Listen to your skepticism, and don't be afraid to pass up deals that
> don't sit well with you. In many ways, your better judgment will keep
> you from making irrational business decisions. Guard your good
> name—your credit—with great integrity by making clear, well
> thought-out goals. Avoid making rash decisions in order to thwart
> other prospective buyers. Who cares if you miss what seems to be the
> deal of the century? After time, research and good judgment, you'll
> find that the deal of the millennium may be right around the corner!