The Benefits Of Investing In Real Estate
With all of the mixed-media messages surrounding us these days, it’s confusing for people to know where to invest their money (be it stocks, bonds, a 401K or real estate).
In my experience there’s no better way to save a bundle on your taxes (while simultaneously building your wealth) than through investing in real estate… Here’s why…
- Huge Tax Benefits – Properties typically appreciate while the IRS allows you to write your properties off as depreciating.
- Using “Good Debt” to Build Wealth – “Good Debt” is debt that makes you money where as “bad debt” does not, it just makes your further in debt… The benefit of “good debt” is LEVERAGE because you don’t need to have a lot of money to get started – you can start with the equity from your home.
- A Balanced Investment Portfolio – You’ve heard the expression, “don’t put all your eggs in one basket”, well the same applies to investing. By investing in real estate (in addition to other investments such as your IRA, 401K, stocks and bonds) you will have a stronger and more stable investment portfolio…
- A Personal Retirement Plan – Can we even count on Social Security as a retirement option anymore? When managed correctly, investment properties are a very good potential source of passive income for when you retire.
- Deferment of Capital Gains Tax – When you sell an investment property, if you made more money than you bought it for, that’s called your “Capital Gains” and Uncle Sam will tax you on that gain. However, the government allows you to transfer that gain into another “like kind” property by using a 1031 tax exchange. This allows you to bypass taxation by deferring the financial gain into your next investment.
- Instant Equity – It’s possible to find investment properties that are $5k, $10k, $15k (or more) below market value. When an investor buys properties like this, he or she can instantly use the equity from this for additional buying leverage.
- Long Term Growth – My method for real estate investing is about buying and holding properties for the future because I know that their value will almost invariably continue to increase!
Don’t Listen To Anyone That Tells You – You Can’t Succeed By Investing In Real Estate!
Maybe you’ve seen the late-night TV infomercials on “How to Get Rich Quick by Investing in Real Estate” and thought to yourself, “Is this stuff for real?”. In my opinion, most of these campaigns are just designed to sell you a bunch of expensive information – rather than real world investment properties.
The key to winning at the “game of real estate investing” is to surround yourself with positive, forward-thinking people who are already doing it themselves. People who will support your vision for building wealth – and “coach you” to succeed.
You and I have a responsibility to prepare for our retirement by making our money work for us – and buying investment property is one of the most effective, long-term, tried and true ways to do this (provided you make wise investment decisions and manage them properly).
My job is helping both experienced and novice investors – to successfully find, purchase, and maintain high-quality, “wealth-building” investment properties – making sure that we carefully evaluate your financial needs first, so that the next investment you make – makes sense for you!
Let Me Do The Hard Part For You
Rather than having to figure everything out yourself – the researching, calculating, calling developers, and trying to find a “good deal” – why not let me do all that for you? After all – it’s what I do every day, so why not let me make it easy for you?
Looking to invest in real estate? Whether purchasing an investment property to hold, renovate and flip or ground up construction we can help. With an in house licensed general contractor and team who have invested, renovated and built many properties for themselves, Propertycloud has helped guide many clients’ through the same process and secure all types of investment properties. There are many factors to consider when searching for investment properties so it’s important to work with a team with hands on experience. We love getting creative and assessing properties highest and best use or how to increase your return on investment. So give us a call and see how we can help increase your ROI!
Already have a project?
If you currently own a property but don’t have the capital for renovations, we can still help by partnering up and taking care of the construction for a share in the homes increased value; and the process is very simple! We would first determine a pre and post renovation value and then create an easy to follow proposal for your consideration. If you could earn tens of thousands of dollars more for selling your renovated home then it’s definitely worth reviewing a free proposal from Propertycloud!
What is a foreclosure?
Foreclosure is the legal proceeding in which a bank or other secured creditor sells or repossesses a parcel of real property (immovable property) due to the owner’s failure to comply with an agreement between the lender and borrower called a “mortgage” or “deed of trust”. Commonly, the violation of the mortgage is a default in payment of a promissory note, secured by a lien on the property. When the process is complete, it is typically said that “the lender has foreclosed its mortgage or lien.”
Get your free daily foreclosure report here!
What is a Short Sale?
A short sale in real estate occurs when the outstanding obligations (loans) against a property are greater than what the property can be sold for. Short sales are a way for homeowners to avoid foreclosure on their homes and still be able to pay off their loan by settling with lender.
7 steps to doing a short sale
Things You’ll Need: Financial Calculator Real Estate Brokers
- Verify the value of your property. If you are selling the property through a real estate broker, your broker will provide you with an estimate of market value. If you are selling the property yourself, do your own market analysis of the area and your property.
- Add up all the costs of selling the property. If you are using the services of a real estate broker, the broker will provide an estimate of closing costs. If you are selling the property on your own (for sale by owner), call a local title company or real estate attorney and ask, as a seller, what the closing costs will be.
- Determine the amount owed against the property. This will be the total of all loans against the property
- Do the calculations. Subtract the total amount owing against the property from the estimated proceeds of the sale. On a short sale, this will be a negative number.
- Contact the lender or lenders. Talk to someone in the customer service department and tell them the situation. They may direct you to a specific department. Talk to a supervisor or manager if possible; this person will have more authority.
- Ask the lender what its procedures are for a short sale. Some lenders are willing to work with you by reducing the amount owed or making other arrangements. Others will look to the agents involved (if any) or anyone else who’s making money off the transaction to see if they are willing to make concessions to make the transaction happen. Still other lenders will tell you that your debt is your responsibility, one way or the other.
- Sell the property.
Tips & Warnings
Closing costs will include title and escrow fees (if the seller is responsible for any portion of them, which will depend on your county), attorney fees, a portion of unpaid property taxes, re-conveyance fees, notary fees, delivery fees, documentary fees and/or transfer fees.
Remember that the amount on your monthly loan statement does not include interest. Interest is accrued until the date a loan is paid off, so you may have as much as 30 days of interest on top of the balance owing, and you’ll need to include this interest in the total payoff amount.
If a property is sold under a short sale, the lender may require the buyer to make up the difference, either through a personal obligation or a collection.
The IRS often gets involved with short sales, because they are seen as a relief of debt and may be treated as income. Check with your accountant.