November 22, 2010
Real Estate Investing | Real Estate Investing II ” 5 Mistakes You Should Never Make
The last time you had read about real estate investing, you had discovered that there are 5 steps to make profit while playing the real estate game. Although the whole process seems quite easy, it really isn’t so. The real estate market is so unpredictable, thus you can easily lose your money rather gain profits.
After having explained what should be done to gain in the real estate market, here are some statements you should never believe in if you want money flowing in your pockets rather than out of it.
Statement 1:”Real Estate Investing Is Just My Hobby.”
So you may have ventured into real estate investing because of the opportunities it has in store, however, you must remember that this is a business, thus you should take it very seriously. Investing isn’t just buying and selling properties, it extends way beyond that to investments in improvements, assuring regular maintenance and more. Treat this venture as a small business, not as a hobby.
Statement 2: “I’ll Be Rich In No Time!”
If you believe that you will make money fast through real estate investing, think again. Investing in real estate is usually a long-term project, thus you shouldn’t dream of becoming rich very quickly. The process isn’t easy, because there is always a lot of competition and a lot of hidden expenses that you may have skipped had you not done your research properly. In addition, there is a lot of work which has to be done, and that itself needs a lot of time.
Statement 3: “I Can Do This Alone.”
This is one of the misconceptions many new real estate investors have. Real estate investing requires that you be in contact with others in order to find deals that can produce the most profit. In addition, a single person can’t be everywhere at the same time, therefore assembling a team of professionals is a good idea. The team doesn’t need to be a large one, however, you will need the following individuals to help you out:
A real estate agent: If you are not a licensed real estate agent, having a professional real estate agent guiding you will help you gain more money and experience.
An appraiser: You need someone who can give you an accurate estimate for the property you plan to invest in.
A home inspector: You need one in order to help you evaluate the costs you will have to spend in order to make the home you invest in attractive to future buyers or renters.
An attorney: You need a lawyer to help you with all the legal paperwork.
A lender: This member of the team will help you out with your deals, plus, you can outsource his services to potential buyers to make sure that they will pay you on time.
Later on, you will require the services of remodeling and maintenance workers like a plumber, an electrician, a contractor and many more. So, unless you plan to lend yourself money and fix leaky faucets afterwards, never believe that you can handle real estate investing on your own.
Statement 4: “How Am I To Offer Such A Low Price? I Guess I’ll Pay More.”
Most real estate investing rookies tend to pay extra because they are too embarrassed to state the price they believe is right for a certain property. In the real estate market, you should put away all your feelings and stick to hard, cold facts. Plus, once you pay for a property, all your funds will be locked in and you won’t be able to gain the profit you are expecting.
Statement 5: “I Am Cautious With My Money, Thus I Invest In Less Properties At A Time.”
If you believe that you will earn more by being cautious with less investment deals, then you are wrong. By now you know that real estate is a business, thus you need a healthy volume of transactions to run it. More deals will provide you with more profit as most pioneer real estate investors believe that a larger volume will take out the marginal deals and allow the good ones to outshine the rest.
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5 Comments on Real Estate Investing | Real Estate Investing II ” 5 Mistakes You Should Never Make »
July 1, 2011
Gee Wye @ 1:46 am:
I love the series of books. First of all, you don't need to be wealthy/have money to invest. However, you need to invest to be wealthy. I used bank loans to start my investment portfolios, thanks to Kiyosaki's tips. B4, I had the mindframe of saving money in order to invest.
Nowadays, I realize you can use the banks money to invest. Bank managers are often willing to give people money for a good investment. Money always follows a good investment, though you have to learn about them, invest to gain experience. Also, it's important to have mentors who've achieved whatever you want to achieve. They're a good source of guidance.
I like the Rich Dad, Poor Dad series of books because the tips have been helpful to me and are helping me achieve my goals.
August 1, 2011
Real Estate Secret Info » Blog Archive » Real Estate Investing for Newbies « 4clicks @ 2:29 pm:
[...] unknown wrote an interesting post today onReal Estate Investing for Newbies « 4clicksHere’s a quick excerptI found an article that deals with some of the more basic concepts for beginning real estate investors… check it out at the following link… Real Estate Investing for Newbies For more reading on the basics, click on the following… … [...]
August 27, 2011
bbbryan14 @ 12:42 pm:
1) you report income when the CD was called, so it should be reported in 2008… with that being said, individual taxpayers pay taxes on cash basis, so if you actually received it in 2009, you could make an argument for 2009. i am hoping someone will follow up and correct me.
2) if the credit union didn't send you any paper work, how could you tell the additional amount was for interest? let's say your CD was 10,000 and your got 9,200 back. i think it is a loss of 800 rather than a loss of 1000 and interest income of 200.
i don't know how insurance policies work oversea, but according to the fact pattern you described, i think insurance meant if the CD has gone bad, you will get 90% of your money back from the insurer. but since it was called, i think the amount you received was a return of investment.
3) to report the loss, you would just go on your schedule D and input the information of the CD. in terms of paperwork, i think if you could show the par value of the CD and the amount you received back, that would be sufficient evidence to me.
4) statute of limitation- IRS has 3 years to audit your return and assess additional taxes if your return was prepared with errors. 6 years if you omitted more than 25% of your gross income. and if you prepared your return with intention to deceive (fraud) or you just didn't prepare a return, then the statute does not expire.
so generally you need to retain your records for 3 years if the other limitations do not apply to you.
September 2, 2011
Simpson G @ 2:27 am:
Las Vegas real estate isn't going to be increasing in value anytime in the next 5-10 years. If you have the cash burning a hole in your pocket and you know that finding good tenants to rent to is going to be easy, and you don't need to see an increase in property values for a long time, then Las Vegas is great.
Real Estate can be a great investment, if you do it right. If you are going to be mortgaged up to your eyeballs without a property manager and don't know how to run the numbers correctly, it can be a complete nightmare.
Too many people forget to add in things like closing costs, mortgage interest, upkeep, utlities, HOA fees, property taxes, etc, and when they see a $10,000 return without counting all that, they get hooked. Then suddenly they don't understand why they aren't making their mortgage payments and dread that next property tax bill.
September 27, 2011
what? @ 9:18 pm:
why would anyone just trust you with their money?
plus, this seems like a scam to me.
you don't have any friends or family who like you enough to do you a favor?