Category: Real Estate Investing


No matter what business you are in, marketing is the KEY. Without great marketing, no matter how excellent your products or services are, it would not get too far. Today, we’re still in the beginning of the social media hype. Countless of business market themselves on the internet, but are they doing it the right way? Using the most effective tools?

HomeGain ®, a connection portal for realtors and buyers of real estate conducted a survey on the top marketing practices and preferences of realtors today. Parts of the result were a bit shocking to me.

According to HomeGain®, over 1,300 real estate agents and brokers in US participated in the survey. Each type of marketing strategies receives a score out of 10 for effectiveness; with 1 as the least effective and 10 as the most effective.

1= Least Effective 10= Most Effective

Networking and referrals for Realtors is at the top of the list as excepted. Word of mouth advertisement is at its best in this industry. Building a large and solid network should be the top priority for realtors, as a matter of fact for any industry.  Printed Ads may become obsolete. The public views thousands of advertisements a day, no matter where they go. They have learned to look pass it and place them into their unconsciousness. For me personally, I will not complete give it up. Its low cost/investment will still give me an increase of 3.6%; it’s better than nothing.



This second part of this survey asked the agents and brokers what strategy they will choose in the future. Results show that they will continue to focus on referrals, e-mail campaigns and featured listings. They are less likely to invest time and money on strategies such as Twitter, banner ads, pay per click advertisements, outdoor advertising and MySpace.

Below is the Top 10 Marketing Objectives for Realtors in 2010.  We will likely include in all the top 10 strategies mentioned. Moreover, YouTube will likely to be used more than before in the future as a marketing tool in the real estate industry.  (1=Least Likely to Use; 10= Most Likely to Use)

  • Referrals (8.9)
  • Email Campaigns (5.7)
  • Postcards/Mailers (5.4)
  • Featured Listings (5.2)
  • Facebook (4.9)
  • Print Ads (4.3)
  • Blogging (4.2)
  • LinkedIn (4.1)
  • Online Lead Generation Services (4.0)
  • YouTube (3.5)
  • A final note: NETWORKING IS AND WILL BE THE WAY TO GO

Source: http://www.prweb.com/releases/2010-homegain/real-estate-survey/prweb3712784.htm

Condo expert Jai Wadhwani reveals six key things investors should research before purchasing a condo unit

Dec 16, 2009 – Buying a condo unit as an investment property can be tricky, but if you consider several key fundamentals, you are more likely to end up with a winner. As always, each of these areas should be carefully examined and the more information you can gather, the better.

1. LOCATION

With location comes all factors that define an area, including amenities that are close to the development. For example, investors should check out the local neighbourhood’s transit, retail stores and restaurants, entertainment centres and offices or places of employment. You will be able to sell or rent your unit based on a potential buyer’s and renter’s desire to be close to work or shopping facilities. You will then have an advantage over another property, which may be a safe location, but doesn’t offer anything extra or meet the specific needs of a client.

2. LAYOUT

The layout of a condo can allow you to increase the selling price between $20,000 and $50,000. You can do this by paying close attention to the details of a project. For example, if there is a one-bedroom plus den and the den is large enough to convert to another bedroom, this increases revenue because now your unit is in the two-bedroom price range. Before buying, always look for ways to make improvements on any given unit.

3. POTENTIAL PROFIT MARGIN

Look at several similar units and determine an average price per square foot. Once you have this figure, you can look at what the current market value is and compare it to nearby developments. If yours is higher or lower in value than others with the same projected occupancy dates, then you may want to compare such factors as what finishes or features are being offered in your project. This is also where your agents’ expertise comes in handy. For example, project one has granite counters and offers stainless-steel appliances with hardwood floors. Project two does not come with granite, has white appliances and carpet versus hardwood floors. Some buyers may pay between $8,000 and $10,000 more on the purchase price for project one. You may even be able to increase the rent based on a market that would pay extra for these features.

4. FUTURE DEVELOPMENTS

It is important to know about future developments like what residential and commercial buildings will be coming up near your investment. For example, if you are aware of a future condominium being built within proximity to your investment, find out what they may have to offer compared to your development. An agent will be an excellent tool as they may be in contact with certain builders in the area. Look at both advantages and disadvantages. This will help you determine what factors to point out to a potential buyer or renter and make your unit stand out amongst the masses.

You will also want to look at any upcoming commercial developments such as a grocery store or a coffee shop. These are great selling points to a potential buyer or renter and point to economic growth in any given area.

5. BUILDING AMENITIES

Being aware of what amenities your condominium offers over other buildings will help determine the price point. For example, you can look at a building with high-end amenities. While the amenities are excellent and better than any other building nearby, will your buyer or renter be willing to pay for it? There must be a price tag attached, either in the purchase price or in the maintenance. Some people, for example, may prefer location over amenities as they may not use the gym or pool. Find out what renters in the area prefer, as this will help you determine which development is the right one for you.

6. WHAT IF SCENERIO

If you’re buying off the plan, consider what will happen by the time the project is complete. What will happen to the market in two, four, 10 years? Make sure you look at all aspects and plan for the long term. What if you can’t sell the unit? Will you be able to afford to carry it and for how long? What will your carrying costs be and how will that compare to the rent you receive? What if the unit sits vacant; how long can you last if there is no one to rent it? Be sure to go over all factors to ensure that you can handle a condo as an investment property.

Jai Wadhwani is a sales representative at Royal Lepage Meadowtowne Realty in Mississauga, Ont. For more condo information, visit www.findmeacondo.ca.

From the October 2009 issue of CRE

source: http://www.canadianrealestatemagazine.ca/Features/39334/details.aspx

This is an article from real estate investing for beginners dot com

The first step to real estate wealth starts with your mindset.

So how do you know if you’ve got the mindset of a wealthy person or if you’re traveling the path of the poverty-stricken? Let’s see if your brain is in the right place with a simple test…

The Situation:

Even though you may know nothing about real estate investing, I walk up to you and say “I’ve got a real estate deal that needs $20,000. What do you say?”

What would be your response?

Poor mindset response: “I don’t have that kind of money, Jarom.”

99% of the American population would come up with some version of that statement–”sorry, I don’t have the money so I can’t do it.” That is why 99% of the people in this country are not wealthy and never will be.

Do you think Donald Trump ever says “I don’t have the money”? Does Warren Buffet every say “I don’t have the money”? Did Henry Ford, Charles Schwab, or John D Rockerfeller ever say “I don’t have the money”?

No! And it’s not because they have the money either.

They’re wealthy because even if they were dirt poor, they wouldn’t respond “I don’t have the money.”

So how would they respond? If you’ve read Think and Grow Rich (pick up your free copy on our recommended reading list if you haven’t), this is how you would respond:

Wealthy mindset response:

“What would this deal make me?”

People in a wealthy mindset don’t ask how much it costs, they ask how much it will make them.

This is important–let me put it another way.

Wealthy people (or those who are on their way to being wealthy) don’t look at opportunities based on price. They look at the benefits and then decide if the price is worth it.

You see, the wealthy know that if the deal is right then they can find the money. It doesn’t have to be their money.

If you asked me “What would the deal make me?” and I replied “$30,000 in six months” do you think that, if you didn’t have the $20,000, you could find someone who did and offer them $27,000 in six months to borrow their $20,000? And you’d make $3,000 in the middle for doing a little money-finding leg work.

The whole reason I’m asking you for $20,000 in the first place is because the deal will make me $40,000 and I’m willing to give up $30,000 of that so I don’t have to use my own money.

If I use my own money, the number of deals I can do is limited to how much money I have. If I tap into other people’s money, I can do as many of those deals as I can handle.

Donald Trump and Warren Buffet know this, so when a new investment crosses their desk that makes sense to them, they don’t look at their bank account to see if they have the money. They grab the deal and then find the money to make it happen.

After all, if your first response is “I don’t have the money” how would you ever know if the deal was a good one? You wouldn’t.

The whole point of this exercise is that big opportunities are going to cross your path. If you’re in the mindset of poverty and scarcity then you’re going to miss them. But if you prepare yourself by learning how the wealthy think and work, you’ll be in the mindset of abundance and wealth.

Then you’ll recognize opportunity when it knocks, and you’ll be ready to take action.

-Jarom Adair
Real Estate Investing for Beginners

Everybody knows that Google map is an amazing tool for anyone

As for real estate investors and agents, this free service provided by Google is actually more useful than you may imagine.

It provides all the properties listed for sell, for rent, and foreclosures.

Here are the easy steps for this amazing FREE information

Step 1:

Go to http://www.GoogleMaps.com

Step 2:

Type in the zip code or address of your target
investing area.
Step 3:

Then to the right there is a little tiny line
of blue text that says “show search options”.

On the drop down menu choose “real estate”.

THAT’S IT!


GoogleMaps will give you a full map of your target investing area!

It will show you:

  • – Properties for sale
  • – Properties for rent
  • – Properties in foreclosure

This is a fast and easy way to get a visual overview of your investing area, for free.

If you’re buying a property you want to know what
percentage of properties in that area are for sale?

How saturated is the market?

It helps you not only plan your exit strategy properly,
but it is also an AMAZING NEGOTIATION TOOL.

You can go to a motivated seller and pull up
GoogleMaps.com and show them, “hey in your area
there are 47 other properties just like yours on the
market.  So if you need to sell now, this is why you
should take the creative offer I am giving you
because this is your best option.”

And on the foreclosure part –
You can see properties or even land lots in foreclosure.

Again – before buying or selling you want to know
what the foreclosure percentage looks like in the area.

This is a great resource for compiling details of the comp. in the interested area where you are planning to buy/sell/invest!

Luxury Living in Canada

This is an article from Canadian Real Estate Magazine by Suzanne Sharma.

LUXURY LIVING
As real estate prices across the country continue to climb, owning a big-ticket home is no longer just for the rich and famous. In fact, in some markets a million-dollar price tag is merely a starting point. Suzanne Sharma looks at whether it’s really worth breaking the bank for these high-end properties
—————————————————————————————————————————————-
One of the driving forces behind the increase in Canada’s overall real estate market is the nation’s luxury market, defined as properties and homes that are worth more than $1 million, have desirable amenities and scenic views, and are in a good location with a low crime rate. According to the 2007 Carriage Trade Luxury Properties Poll, 12% of Canadians reside in homes that fit this description.
“The great strength of our economy is allowing senior executives and those that are affluent to get into the luxury home market,” says Darryl Mitchell, manager at Royal LePage Real Estate Services Ltd. “If they’re already in that market, then they’ve been able to increase their equity and invest.”
According to a report by Merrill Lynch and Capgemini, the number of Canada’s high net worth individuals – defined in this case as people with assets (excluding primary residence) exceeding US$1 million – is growing at an annual rate of about 6.9%. As incomes rise, these individuals are finding it easier to purchase high-end properties.
A safe bet?
Mitchell notes that the tax structure in Canada encourages buyers to purchase more expensive homes. “One of the only ways that a person can gain wealth and not get taxed is by the purchase and sale of a home,” he says. “A single-family residence is exempt from being taxed.”
However, these high-end homes are not for the average Joe, since it could be extremely difficult to meet mortgage payments. “Some people might be tempted to buy a very expensive home with mortgage payments at the verge of their capabilities because our rates are still very low and might go even lower next year,” says Walter Koziej of Mercury Mortgages Inc. “But what happens three to five years down the road when the rates do go up? It’s a disaster waiting to happen.”
Luckily, Canada’s mortgage system typically doesn’t allow people to borrow over their limit. The sub-prime lending crisis in the United States, where lenders offered borrowers a low rate for a short period of time and then dramatically increased the rate for the rest of the term, is not an option here.
If you have the funds to purchase a luxury property, then Vancouver, Calgary and Toronto lead the luxury market race with average high-end prices greater than $1million. According to Royal LePage, Edmonton is also gaining momentum, with the average luxury home just shy of the mark at $950,000. This makes the city a good buy now, since many realtors in the area are expecting Edmonton’s high-end market to soar in the next few years.
Vancouver prices breaking records
British Columbia still boasts the most expensive real estate in Canada, with cities such as Vancouver, Victoria, South Surrey and Kelowna all breaking the $1 million average point, according to RE/MAX.
Vancouver is also the province’s top producing city in terms of investment dollars. According to RE/MAX, the average luxury property in Vancouver costs more than $2 million and the average price per square foot is $2,000. In fact, it is almost impossible to buy a property for less than that in the downtown and inner-city areas.
“Prices have increased so much that the average person with the average income cannot afford to buy a condo in the downtown core, so they have to buy outside the city,” says Christa Frosch, real estate agent at Sotheby’s International Realty Canada. “Therefore, there is more high-end product sitting on the market due to price appreciation.”
The high prices have not deterred international investors from purchasing within the city. These types of buyers, classified as ‘ultra-upper-end buyers’, typically purchase properties listed above the $2 million price point.
“Before, Vancouver was kind of a sleepy town and not really on the radar,” says Ben Kielb, real estate agent at Sotheby’s International Realty Canada. “I don’t think the market warranted having luxury properties because it was too risky. But now you’re attracting investors from Eastern Europe, China and Dubai, and you’re opening it up to the world.”
Additionally, the ageing Baby Boomer population has taken an interest in Vancouver real estate. “Baby Boomers are a very large market segment and have taken advantage of significant amounts of equity buildup over the last few decades,” says Cameron Muir, chief economist at the British Columbia Real Estate Association. “Many of them are translating that equity into luxury properties. The wealth of the Boomers is adding to demand.”
Waterfront properties and homes with mountain views tend to be the investment of choice for buyers. According to RE/MAX, areas west of Vancouver, such as Kitsilano and Coal Harbour, have had the highest appreciation, as well as unit sales, with many properties selling in 30 days if well priced.
Calgary surges ahead
2006 proved to be a booming year for Alberta’s real estate. It was a period when in-migration increased, creating a buyer frenzy, which subsequently caused property prices to rise. Calgary became a city with a prominent luxury market and an average price of $1 million, according to RE/MAX.
The capital that is being made in the oil and gas industries in Calgary is attracting many executives who are moving into the area and purchasing high-end real estate. Additionally, the city boasts one of the highest average family incomes in Canada.
“People pay a lot more here in the luxury market than even in the United States, but people will buy here because the job market is so good,” says Thomas Keeper, real estate agent at Century 21 Terrace Real Estate.
There has been a 57% increase in high-end units sold in Calgary, according to RE/MAX. Keeper notes that two years ago, only half of the homes priced at more than $1 million would sell in the first year, whereas now these properties generally sell within three months.
Lakeside properties south of Calgary in Lake Bonavista, Arbour Lake and Auburn Bay are the most popular with buyers. Additionally, country estates that are situated on two- or three-acre lots are an investment of choice.
“If you can afford the high-end payments, it’s a win-win situation,” says Keeper. “If the market goes down, you get to live in a beautiful home, and when the market goes up, the gains are exponential.”
Toronto tops the luxury meter
Real estate in Ontario has continued to swell in both price and units sold. Areas such as Kitchener, Mississauga, and Hamilton have become excellent investment opportunities; however, it is Toronto’s luxury market that has taken the province by storm.
In the first three quarters of 2007, 2,201 high-end properties were sold, a 33% increase over the same period last year, according to the Toronto Real Estate Board. In many parts of the city, entry into the luxury market will cost closer to $2 million, which is quite an increase from 25 years ago when the highest properties were in the $300,000 price range.
The most sought-after homes in the city are just north of downtown Toronto in the Forest Hill area, which is up 78% in sales year-over-year, and Rosedale, which is up 13% in sales year-over-year according to RE/MAX. In the north end, Yorkville is the number-one choice for high-end condominium investors, with the Four Seasons Private Residences, Trump International Hotel & Tower and Shangri-La all selling at a rapid pace.
“The biggest reason for the increase is immigration,” says Mark McLean, partner at Sotheby’s International Canada. “We’re seeing a lot of people coming from other parts of the world who are looking for stability, cleanliness and education, and the reality is that in other parts of the world such as Paris, London, New York, real estate is so expensive.”
The average high-end property in New York is about $5,000 per square foot according to McLean. In certain parts of Paris and London, luxury properties are averaging about $8,000 per square foot.
Risks and rewards
Buying high-end definitely means that you get the very best in location, amenities and features, as long as it is within a price range that you can afford. However, if it’s an investment you’re looking for, the luxury market carries a higher level of risk.
“If the market cools or goes sideways, luxury homes are tougher to get rid of,” says Kielb. “It’s a lot easier to sell a $300,000 condo than a $5 million home. People are a little more hesitant and cautious.”
It is also more difficult to invest in a luxury rental property. McLean notes that there isn’t a great deal of product on the rental market that is high-end. Additionally, once a property becomes available, it stays on the market much longer since rent prices are typically between $5,000 and $10,000 per month. Therefore, it would be more beneficial to purchase two $500,000 properties instead of one $1 million property.
On the flip side, when a market appreciates in value, investors who buy high-end will achieve greater returns on their purchase. “It works with percentages,” says Keeper. “Where a home priced at $500,000 will increase yearly at a rate of about 10%, it will be the same as a home that is worth $5 million.”
The most important factor when purchasing high-end is the higher utility costs, fees and renovation expenses. If these items are affordable, then buying within the luxury market can be a sound purchase.
“A home is a sanctuary and I think this is particularly true for high-income earners,” says Maureen O’Neill, president of the Toronto Real Estate Board. “Astute businesspeople also recognize that real estate is an excellent long-term investment, so really, there’s no better way to pamper yourself than to invest in a spectacular home.”

Knowledge is power;
Solid foundation of knowledge is the roots of a tree.

By: Sharon Hiebing

Should a Real Estate Investor have a real estate license in order to be successful? Often new investors will ask themselves this question.

What is the answer? Well, it depends on the person asking the question. There is no right or wrong answer. First, each investor must look at their goal in real estate investing. Do they want to purchase one property a year, or twenty?

If they’re taking the “slow and steady” approach, then access to a lot of property will not be a high priority. This investor can take their time in locating profitable markets, performing market research, acquiring team members, and making offers that are accepted. They basically can accumulate their resources and leads through methods other than being a real estate professional.

If, however, they want to invest at a consistent pace, with a goal of one to two properties a month, and they want to do it in their own backyard, then perhaps having a license would be beneficial. This would give them access to all inventory on the market, in addition to “insider tips” on new or upcoming listings.

In fact, in a buyer’s market, they may turn a potential listing into an investment purchase, creating a win-win for the seller and the agent, since in a buyer’s market it can take many months to sell a home, and they’ve just saved the seller the realtor commission.

If an agent operates in an area that does not meet their investment criteria (i.e. cash flow, appreciation, etc.), then there obviously is no benefit to becoming an agent in the first place if one of their primary goals is to find investment property.

As many realtors will tell you, it is not an easy job. You have to work when everyone else doesn’t, which means a lot of nights and weekends. People will want to negotiate your salary. You may play tour guide instead of agent if you’re not good at pre-screening clients. And in a down economy, you may find yourself with very little to no income.

So should you become a realtor just because you’re investing – not unless it’s a job you really want to do and finding viable property is simply a perk!

People generally think they need to have an extensive education in real estate before they can invest. This is simply not true. There are so many ways to get experience without taking risks that it would be silly to spend six months to a year getting a real estate license before you made your first investment.

Yet, many people do exactly that. They feel they must read a ton of books or attend a bunch of seminars before they can “pull the trigger.” Don’t misunderstand. Education is very important. But when it is sought after to the point of preventing you from taking action, it can become a liability.

Usually people have a lack of confidence in their abilities when it comes to doing something new for the first time. If this is the case, then hire a coach, or find a mentor. In fact, many successful people feel when it becomes time to try something new, they need to have guidance from someone with experience.

After all, why should anyone re-create the wheel when there is always someone out there who has been there, done that. If they’ve already attended the “School of Hard Knocks,” why should you become one of its alumni? Finding a Coach or Mentor can save a lot of time, a ton of money, and a great deal of heartache in the long run.

So, do you need a real estate license to be a successful investor? It depends…..

source: http://www.real-estate-article-directory.com/Articles/Do-You-Need-a-Real-Estate-License-to-be-a-Successful-Investor-/5357