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Real Estate Investing - Valuing Commercial Real Estate

Cash Flow vs. Comps

As you can see, commercial and residential use two different methods for valuing property. With residential, it doesn’t matter what your tenant pays you–it simply won’t affect the value. Your rental property could be vacant, and that wouldn’t affect its worth. It would still be based on comps.

Making Millions in Multi-Units
Find Your Life’s Freedom’s! Take Action Now!!

On the other hand, the potential of a commercial poperty can be as limitless as your imagination. Because the value is based on income, you boost the value of the real estate every time you boost the income (rent) you’re receiving from the building. By scouting for commercial properties that are either under-rented or have inferior tenants, you can find potential gold mines.

As you can see; commercial real estate is valued at the cash flow.  If an agent is telling you the property is valued at 1 million dollars, then the income has to be 1 million dollars.

If not, walk away, the property is too high and you will not be able to cover your expenses.

I currently own a small multi-unit building.  Its wonderful on cash flow and am looking into buying more multi-units. These are cash cows!

If one of my  tenants leave, the other tenants cover my expenses!!!

John Dessauer has a Great Program:  Making Millions in Multi-Units!
A workbook and 6 CD’s are included with this program.  He explains in laymans terms how to figure out the cap rate, how to figure out if this property will cash flow.  John teaches you the ins and outs of buying commercial property for a small fee. 

 (inexpensive course for $49.00 for all the pertinent information you learn!) I’m shock at the low price he is offering for this course.  I paid $150.00 for this course and it was worth it for $150.00.  Now he is offering the same course for $49.00.   The formulas alone are more than worth the cost!

Making Millions in Multi Units
Find Your Life’s Freedom’s! Take Action Now!!

Real Estate Investing - Taking Title “Subject to”

Real Estate Ownership without Personal Liability

Many real estate investors don’t realize they can take title to a piece of property while leaving the mortgage in the seller’s name. Although this seems to go against traditional thinking, not only is it legal, it happens all the time. It’s called a “subject to” deal.

A “subject to” deal is when the seller gives you the deed to his home but leaves his mortgage in place for you to make the payments. You don’t have to qualify for the loan, have your credit checked, or come out of pocket with cash. You just use a piece of paper to transfer title (the deed).

A Common Scenario

Let’s say a seller is behind on his mortgage payments, and does not have the financial means to bring them current. You, as the buyer, can agree to make his mortgage payments for him, if he’ll sign the deed of his property over to you. Meanwhile, the loan stays in the seller’s name, but you own the property!

The seller–faced with losing his house to foreclosure–has very little to lose with this arrangement and much to gain. If you bring his payments current and eventually pay off his loan (through sale of the property), he owes you a debt of gratitude for rescuing his credit along with his dignity… and taking a huge weight off his shoulders.

Changing Ownership with Real Estate

Taking title in this manner is called “subject to” because the buyer is taking title subject to the underlying loan. Many real estate investors will also refer to this type of transaction as “getting the deed.” That’s a little misleading, however, since you don’t actually get the deed. In reality, you must get the sellers’ to sign a new deed prepared by you or some other professional. Changing ownership of real estate isn’t like buying a car. There is no previous title or ownership document to use because their interest in the property is recorded in public records.

How Did This Happen?

Buying real estate “subject to” has become more and more popular over the years as the number of assumable loans has diminished. A couple of decades ago, it was very common for a buyer to be able to assume a seller’s existing loan without qualifying. Although a few assumable loans still exist (some FHA, VA, and private loans), in general, lenders don’t issue them anymore.

But why would you want to assume a loan anyway? By assuming the seller’s loan–you must submit paperwork to the lender, get approved, and become personally liable for the debt. Why do that when you could take title “subject to” instead? “Subject to” eliminates personal liability to you because you have not guaranteed the note to the bank. Yet the deed transfers all the ownership rights of the property to you!

The Demand for “Subject to” Deals

In today’s soft real estate market, many people need to sell. Some simply can’t find a buyer. Others are in pre-foreclosure and have no way out. “Subject to” is a great way for you to purchase properties without using any of your own money. Motivated sellers are everywhere, and some will even PAY you to take their deed. With “subject to” deals, it’s always a great time to invest in real estate!

Article from Trump University

Real Estate Investing – Always Educate Yourself

I joined EWI Real Estate Seminar (Master Program) over one year ago today.  As I mentioned to you earlier, I am involved heavily with training and reading.  I am always looking for the opportunity to learn because depending upon what level of real estate knowledge you are at be it in the beginner or advanced; there is always a piece of information you missed. 

When I first joined EWI Master Program, I was completely overwhelmed 2 years ago.  However, after investing in Real Estate over 3 years, I have retained much of the knowledge due to taken ACTION. 

However, as we say when we attend the Wealth Retreats, we are here to find the Gold Nugget!

Today, I found my Gold Nugget listening to Bob Proctor’s lesson on “Fortunes”.  He talked about creating your Master team, go find them and ask them.  It’s Simple!

http://store.sixminutestosuccess.com/?aid=588610

Bob Proctors video on Napoleon Hill’s book, Think and Grow Rich (about 20 minutes long)
http://store.sixminutestosuccess.com/?aid=588979

Anyway, I joined the Live 4 Week Prep- Course to the 90 day Real Estate Challenge that starts on April 27, 2009.  I am going to list my homework assignments below.  This way you can follow along and learn how to create your fortune with us.

As you can tell from the list of homework assignments below, Real Estate Investing takes motivation, time, and most of all ACTION on your part.   You must be willing to Learn and take ACTION!!

I will post the New Homework Assignments on Tuesday’s for the next 3 weeks.  This week I’m running late due to some personal family issues.

Oh, by the way, the instructor told us,

If you don’t complete this list of assignments below

Then  Don’t Bother Showing Up On Next Monday Night’s Call!   

Homework Listed Below:

1.       Adjust 1 hour per Day to Invest in Real Estate.

2.       Create an Investor’s Tool Kit.  (put all of your real estate forms in one area)

3.       Fill the tool Chest with useful Tools.  (agent’s names, phone numbers, attorneys, etc…)

4.       Learn the Art of Each Tool.  (know what each form is used form or who to call)

5.       Apply new Knowledge (Take Action!  look you can listen, read, and learn however if you don’t apply your knowledge then why are you reading this blog?)

6.       Repeat the process (cookie cutter real estate process)

Research Incentives to Buy

·         Tax Rebates

·         Tax Credits

·         Down Payment Assistance

·         Federal, State, and Local

Action Items List:

1.       Read or Listen to the “Blue Vase” Story

2.       What incentives Are Available?

3.       How Do You Qualify?

4.       Enroll in the 90 Day Real Estate Challenge

5.       Have a “WHY” – Get Excited

6.       Watch the Movie “Rocky”

7.       Read Chapter 1-4 “Road to Wealth Book” author Robert Allen

Enjoy learning!

Real Estate Investing – For landlords this is an exciting time with so many homeowners losing their homes they are moving back into rental units!  For us who own rentals it’s fabulous!

I am to say, yesterday, all I did was answer my phone on rentals that I have available.  As you can guess what my plans on today, showing rental units all day!

Great deals with tenants already in place:  No stress just collect the rent checks:

http://serene.ewimultiplestreams.com/index.php?base=featured

I will have three rental units filled by this weekend.  How Awesome it that?

From a management point of view, I tell all of my tenants.  Rent is due on the first of each month, if check is not received by 2^nd of month, eviction notice is mailed out.  I have NO time to chase rent checks down each month nor am I putting rent collection on my monthly agenda.

Be strict and firm up front and they will abide by your rules.  If not, I evict them immediately!

This is the best time to buy cash flowing real estate since there are so many properties to pick from on the market.  If you are looking for the conservative way to buy real estate; your strategy is to buy 10 single family houses; rent them out; hold them until retirement age.  Your retirement is 10 houses.  You will be able to retire without worrying about where your source of income is coming from besides social security.  In my opinion; social security is not a source of income nor should you plan on it for your income.

Great deals with tenants already in place:  No stress just collect the rent checks:

http://serene.ewimultiplestreams.com/index.php?base=featured

Why is it Important to Set Goals in Real Estate Investing?

We have all heard how important it is to set goals in our lives, specifically when there is something in particular that we would like to accomplish. But, how effective are you at setting goals in real estate investing? One of the most respected motivational speakers, Zig Ziglar, in his new CD series “Goals”, outlines the 10 steps to goal setting in real estate investing. If you are serious about achieving your real estate investing goals, take time to learn from the best about how to make your goals your reality.

Are your goals written down or do you keep them safely stored in your mind? If you have not taken the time to write your goals down, you are significantly less likely to achieve them than someone who has mapped their goals out in a plan. Studies after studies have shown that individuals who write their goals down achieve higher levels of financial success during their lifetimes than individuals who do not write them down. So, what are you waiting for? Start writing!

How to Set Goals

Now that you understand the importance of setting goals in real estate investing, it is time to take action. A goal must be clearly defined with both a time frame and amount. Otherwise your goal is simply a wish. For example, I would like to increase my income through investing in real estate is not a goal. But, I would like to earn an extra $50,000 per year by investing in real estate, starting this year is a goal; it has a clearly stated amount and a time frame to begin. Write down your real estate investing goals, clearly defining each and every one of them.

Remember to order Zig Ziglar’s Goal Setting audio. Its a small investment for you to learn how to write your GOALS for 2009 on real estate investing. If you don’t have a path or direction for yourself then you will help someone else achieve their dreams and goals. If this what you want? listen to 3 FREE audio’s!

Without clearly defined goals, you simply can’t achieve the success you want! In Goals, world-renowned motivator Zig Ziglar guides you through a clear, beautifully organized ’success trip.’ Along the way, you’ll learn how to recognize and set your goals. You’ll learn techniques for finding extra time you didn’t think you had and for cutting down big goals to easy-to-handle size. Now you can take advantage of this all-important opportunity to write your ‘business plan for life.’

Real Estate Investing:  Do you remember your New Year’s Resolution?  Did it involve Real Estate Investing?  Did you write your New Year’s Resolution down on a piece of paper?  How many people’s New Year’s Resolution was forgotten after the Champagne was gone?

It’s Critical to your success as a Real Estate Investor to have Goals.  If you don’t have any goals you have no road map.  Would you drive to another state without a plan?  Do you go on vacation without a plan?  Do you know what you what to accomplish for 2009?  How many Single Family homes do you want to buy in 2009?  How many audio’s are you listening to learn how to achieve your goals?

If you want to change your life then you need to do something different than you did in 2008.  Otherwise if you wake up and drive to work and watch the same Reality Shows as in 2008.  Your life will be the same by December 2009.   You will ask yourself where the year went and what did you accomplish.  These are hard questions to ask yourself, but you need to sit down and truly think about your passion and desires on Real Estate Investing.

Zig Ziglar’s Goal Setting Audio is an awesome audio program to assistant you in setting your goals on Real Estate Investing.   I heard of Zig Ziglar during my younger years however I was not ready to receive his information to make me successful.  Three years ago, I was ready.  I love listening to him.  His voice radiates with enthusiasm when he speaks.  I believe you will enjoy his Goal Setting audio’s as much as I do.  He will help you achieve your dreams even if they are buried underneath the stress of your daily lives.  Zig Ziglar will teach you how to bring your dreams back to life again.  He did for me.

You need to invest in yourself for 2009 to get what you want out of your life in 2009.  I listen to audio’s 4-5 times a week to learn new ideas or be inspired.  Click on picture below to listen to 3 free audio’s samples.  Enjoy!

Without clearly defined goals, you simply can’t achieve the success you want! In Goals, world-renowned motivator Zig Ziglar guides you through a clear, beautifully organized ’success trip.’ Along the way, you’ll learn how to recognize and set your goals. You’ll learn techniques for finding extra time you didn’t think you had and for cutting down big goals to easy-to-handle size. Now you can take advantage of this all-important opportunity to write your ‘business plan for life.’

Goal Setting is critical for your Real Estate investing success if you are truly passionate about Real Estate Investing. Education is the greatest investment in yourself! Enjoy listening to his FREE sample audio’s and be inspired to Act on your dreams! To view my blog click on http://youcanbuycashflowrealestate.com

Real Estate Investing:  As with any Real Estate Investing, you will want to maintain a balance in your Real Estate portfolio.  When you keep a variety of properties, you will make money in “up times, down times and in-between times.”  Most Real Estate Investors start out with only one technique and stay so focused on it that they lose sight of all other opportunities.  Buying property and holding it for the long term is not at the top of most real estate investors’ lists.  They start out with little or no money and must quickly turn a property to provide cash.  While this provides capital to continue Real Estate Investing, do not hesitate to acquire properties for long term gain and residual cash flow real estate.

Click on link to view Cashflowing Real Estate Properties   http://serene.ewimultiplestreams.com/index.php?base=featured

Once you acquire a property for a long term hold, you must decide whether you will manage it yourself or have someone else do it for you.  Base your decision on your Real Estate Investment goals and personal situation-not lack of “know-how” or fear.  Property Management is often misunderstood and many Real Estate Investors avoid it.

Click on link to view Cashflowing Real Estate Properties   http://serene.ewimultiplestreams.com/index.php?base=featured

I belong to my local Real Estate Investment club and many of my fellow Real Estate Investors stay away from holding property long term.  They either are wholesaling or flipping.  However, many of these Real Estate Investors are looking for passive income due to flipping and wholesaling entails substantial amount of work.  You have to be constantly out in the market place looking for your next deal to make money in Real Estate Investing using these techniques.

Click on link to view Cashflowing Real Estate Properties   http://serene.ewimultiplestreams.com/index.php?base=featured