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Archive for April, 2010

The Advantages of FSBO

Wednesday, April 21st, 2010

There are many tools available on internet which can help the homeowners who are selling their home without a real estate agent. Without using the traditional method of selling home such as local publication, using a real estate agent, for sale signage, you can reach more people by doing online advertisement. More than 70% of home buyers use FSBO websites to search homes.

There are many benefits of selling your home yourself through FSBO websites. Selling property through FSBO websites is now becoming a growing trend. The biggest advantage with FSBO method is that you get rid form the commission which you normally give to the real estate agent at the time of closing. Buyers feel easier to deal directly with the owner as they think being the owner of your home you know advantages and the benefits related to your home so can describe these things easily. You know the surrounding areas of your home very well so you can inform the buyer about the advantages of the location and it is obvious that no one knows this better than you do. While dealing with the buyer, you can use this info to clinch the deal at a high price by highlighting the outstanding features.

You save lot of time when you deal directly with the buyer. Transaction involving a real estate agent is time consuming. If you hire an agent to sell your property then buyer cannot communicate with you directly and if anyone in between is out of city or busy in some other activities then the issue may remain on hold for several days.

When you sell your home through For Sale By Owner (FSBO) method then not only you gain the experience about different aspects of a real estate transaction but you save lot of money. You have control of all the things from start to finish. You can set the time of appointments with the buyer easily. When a house (property) is directly for sale then there is less chance of inaccurate info about the property.

Making Money in Commercial Real Estate

Wednesday, April 21st, 2010

Commercial real estate investment is like any other investment. You have an end goal – making more money than you spent. The processes, and setting your objectives, offer a great deal of latitude in how to turn your initial investing dollars into a solid profit potential. The essence of this is asking the right questions before you acquire the property, not only about the property and seller, but also about your objectives with it.

The risky way to make money on commercial real estate is to “flip” the property – to invest in one, do renovations, or bring in new long-term tenants, and then sell it for more than you paid for it. This requires a decent understanding of your local commercial real estate market, market timing dynamics, and a lot of research. In many cases, it’s best to start lining up the buyer before you line up the property to sell. Other times, it’s simply a matter of having a piece of property at the right place and right time when an investor comes through, or when a city is expanding.

The more conventional approach to commercial real estate investment is a “buy and hold” strategy. You buy the property, invest in improvements, and bring in tenants who bring a good revenue stream with them. A general rule of thumb is that the revenue stream should be at least 20% greater than the monthly costs of maintaining the property, including labor, periodic fixes for damages, expenses incurred in moving tenants in and out, plus any finance charges on your money and depreciation and wear and tear.

Once your basic ownership strategy is in place, the next questions are about the property itself, and its neighborhood. First and foremost – are you buying a property that’s in a growth area? Is your local demographic young and adding jobs, or older? These both influence the decisions for buying commercial real estate properties.

Before committing to the property, look into the repairs that need to be done. If you haven’t done property renovations before, take the time to run some preliminary back of the envelope quotes for time and money. Sinking a lot of money into repairing a property can make sense if it lands you an anchor store or two, in an area where the municipality is growing.

Finally, look at cash flow. When all other details are factored in, current cash flow and future cash flow are the keys to making a buy-and-hold strategy work, and it’s worth it to pay more for a property now with greater cash flow potential later, particularly if you’re planning on using your commercial real estate income stream as your retirement income, or seed money for other projects.