Michael K asked:


We have a large amount of equity in our current house.
We have no bills other than the mortgage on our current house.

Is a home equity loan to get to the 20% down payment and then a conventional loan on the investment property itself the best way to go?

Or is it best to finance the investment property itself rather than using the equity in the primary residence. We could finance 100% of the loan purchase price or do a secondary mortgage to come up with a 20% down payment.

Danielle

Joel Teo asked:


Investing in real estate is a highly lucrative venture that has helped scads of people to rake in loads of money. Though the profession may seem delectably easy, it’s certainly not for everyone. Real estate business also fosters several unscrupulous swindlers who make their living by duping newbie investors. Therefore, fresh entrants into the field of real estate must learn how to discern a genuine opportunity from a fake one.

Investing in real estate involves an awful lot of work, especially at the outset. So, it’s only for the serious few who are prepared to face the challenge and the uncertainty of the market. Wannabe investors must have access to the following when they embark into real estate investing:

• Investors must have a significant working capital. It’s true that there are several finance firms that can lend you money for property investment, but you sure won’t wish to be in too much debt to start with.

• You must have a good grasp of the real estate market and the legal procedures pertinent to the trade. In addition, possessing knowledge about the region in which you wish to purchase property is equally crucial.

• Smart asset management and superlative negotiation skills are pivotal for investing in real estate. You would have to convince the homeowner to sell the property.

• Access to a work force that can quickly spruce up a fixer-upper or another property that might have suffered some damage. Be it any trade or discipline, a quick turnaround is a plus.

• A professional property inspector is always helpful when a distressed property needs to be inspected so as to ensure that it’s a viable deal.

As a newbie, you are most likely to follow the old-fashioned technique of buy-and-hold. In such a scenario, you would serve as the landlord for the property. The property would normally experience appreciation over time, and you may sell it after it has risen to a certain preferable value. During the time you hold the property, you may rent it to a tenant, thereby generating another monthly source of positive cash flow.

Having gained experience investing in real estate by following the above technique, you can move over to more lucrative deals, such as fixer-uppers and foreclosures. Finding these can be tough, and hence you would invariably require the services of a professional bird-dog (one who finds lucrative property deals for investors).

On the whole, investing in real estate can lead to ample gains. But it is imperative that you have the above outlined real estate tools in your arsenal.

Copyright © 2006 Joel Teo. All rights reserved. (You may publish this article in its entirety with the following author’s information with live links only.)



Samantha

kerry f asked:


I have recently moved and was a victum to an adj rate mortgage. Now I am renting for the first time in 14 yrs. My family has agreed to purchase a home for myself with it in their name. We have been checking and for them to purchase the home it is %20 down on investment property? There credit is about 695 so a loan is real possible. We are wanting a way to purchase an $80,000 with minumun money down if possible.

Eric

Tony Jay asked:


If you are considering your first attempt at property investment and unfamiliar with the options open to you as to which type of mortgage to choose for your buy to let property, there are specific mortgages for property investment – i.e. to rent out rather than live in – you will need a buy-to-let mortgage.

Buy to Let mortgages are unique and quite different from the usual residential mortgages as, instead of assessing the amount you can borrow from a lender, based on your total income, the loan is calculated on the rent you could get for the property.

Previously, mortgage lenders wanted a rental coverage that was over that of the mortgage amount, for example one hundred and fifteen per cent of the monthly repayments. But at present the rules have become less stringent and you can acquire a mortgage with rental coverage of 100 per cent in some cases. The credit crunch currently being experienced by the western world does seem to work in favour of the property investor compared to the standard residential mortgage.

With this in mind, it is still commonplace to have to raise a deposit of ten per cent or more, but more recently the number of No Money Down deals have appeared on the market. Traditionally only a small number of specialist lenders offered buy to let mortgages but more recently we have seen high street banks start to lend to landlords.

Buy To Let mortgages can normally be either repayment or interest-only loans. Interest-only mortgages mean cheaper monthly payments but the property will not be yours at the end of the term, you will still need to repay the capital amount or sell the property. Repayment mortgages ensure that you repay a bit of the capital and a bit of the interest each month and at the end of the term the debt is fully paid off.

A majority of inexperienced property investors buy a property and consider the increase in equity as the goal. This is a long term investment. What some amateurs do not realise is that a monthly profit can be achieved if the right kind of property is purchased. The worst kind of property to start with in the buy to let arena is a flat or appartment where the cost of ground rent and maintenance has to be taken into consideration. This is often overlooked.

Anyone looking to become involved with the property investment market has a steep learning curve to endure. Property investment training is necessary and should be overlooked as a little knowledge can be a dangerous thing



Luis

chocolatebabycakes asked:


A freind of mine has an investment property in Atlanta Georgia that he is trying to sell. It is a 4 year old Duplex with 4 bedrooms and 2 baths in each unit. It needs no repairs, it was built in 2002, it has wood floors throughout and it is close to public transportation, colleges and downtown. He is asking 335K for it and it was appriased 9 months ago for 350K. He has an open listing with a realtor for a few months but hasn’t had any luck getting any buyers. The realtor said it isn’t selling due to the tight market and the time of year he is trying to sell. Can you suggest any ways to get more interested buyers?

Rita

Mystery Man asked:


Hello,

How do I start a LLC and transferr my investment property to it? I live in California and this is were my investmet property is. Please help. thanks in advanced.

Sharon

Clint Jhonson asked:


Cyprus is considered a very good choice to consider when you are thinking about purchasing Cyprus property. Cyprus property investment can have a beneficial impact on your income and why not on your mood too? Cyprus is a safe place that can offer you many pleasant moments and please your eyes with its fascinating nature and the blue color of the Mediterranean Sea. It’s a small island of joy for your soul. When you spend your money on something you first think about your decision very carefully. Of course, that is aside from simple purchases you do everyday in the supermarket.

Think carefully before making an investment in a big and expensive purchase. When investing the money in a property you should know very well where every dollar goes, because fraud in real estate market is not unheard of. So first of all, even on such a nice island as Cyprus, you should know how to deal with the land sharks. If you are choosing a destination for your investment and your choice falls on Cyprus, then you should consider how your Cyprus property investment will be successful.

Cyprus is well-known for its mild Mediterranean climate and its hospitality, for its beautiful nature and for historical monuments. This island has a very rich cultural heritage and you can see a diversity of traditions very enrooted and respected by the local people. Cyprus’s culture is a blend of Greek and Turkish culture, with some Egyptian “tunes” and Arabian mystery.

First of all, when you want to buy a property on Cyprus, you should think about what your purpose is for buying it. The purposes can be different. You might want to buy a house or an apartment for living there in the summer or for spending most of the year there, or for renting it, or a combination. That is why the location of your Cyprus property is very important. If you plan to rent your property then you should choose a location close to the tourist centers, the places which are close to many modes of public transportation.

If you want to see your property as a place where you can rest and have a comfortable place for your vacations, then you should decide the location of your Cyprus property based on your feelings and preferences.

There are good opportunities for Cyprus property investment in the highlands. There you can admire the broad and narrow roads, the beautiful green mountains and the warm wind. You can also choose a house at the seaside. Frankly speaking, Cyprus property offers you a variety of choices where you can always find that which suits you the best.

Cyprus may be a small island but you will always find an open store, a nice small café or restaurant there to buy what you need and spend time eating the traditional served dishes, enjoying the beauty around you. So even if your property is situated far from the main cities and tourist destinations, you will have all the comfort the island can offer to you.

The prices of Cyprus property depend on their location, on the area and on the accessibility to the big cultural centers. The numbers can seem high at first sight, but you should not think it is not impossible to lower it. The prices are always high when you receive the proposal, because even the realtors know that the investor will bring down the price. You can also have a look at some other property situated in that region. You should compare prices; you should estimate the value of the house you want to buy, looking at its real market price.

Cyprus is a good destination for investments and its possibilities in this field are very large. When buying Cyprus property you should consider that you will spend more than its settled cost. You should consider the fees for the lawyers and for the realtors, for the changing of the paper work and some additional fees.



Mildred

Javaid Kiyani asked:


In the property business you can either do very well and live off the profits for life, or end up bankrupt if you dont follow some basic rules and principles.

When you start investing in property you need to learn how to do at least four things very well:

1. You must be able to find property deals which will make you money. You need to be able to distinguish between more profitable property and less profitable property. Know your locations and learn to distinguish between less profitable and more profitable neighbourhoods.

2. You need to learn how to raise finance. You will not be able to buy property if you do not have access to suitable funding.

3. You need to learn how to distinguish between a property that can be repaired for very little money and quickly resold, and a property which could become a builders nightmare. Never get emotionally involved in a property purchase. Always look at the numbers and only buy if the numbers work for you.

When dealing with builders and employees always ensure that you are on the right side of the law. Complete the correct paperwork including planning consents and building regulations where applicable.

4. You need to learn how to flip property. Ensure that you have other investors in place that may be interested in your deals. Also, have several estate agents who you can count on to re-sell your projects for you.

The every day role of an active property investor involves at least the following:

* Finding new lenders, tenants and home buyers.

* Locating and buying new properties.

* Dealing with solicitors, accountants, architects, builders, financiers

* Collecting rents.

* Dealing with staff employees.

* Dealing with local and national newspapers when advertising your services either as a property investor looking for property to buy or as a landlord looking for tenants to fill your property.

Dont underestimate the amount of time it will take you to set up a successful property business. Property investing is a real business and if you shirk your responsibilities especially earlier on, you will not last very long in what is in fact a very competitive marketplace.

Learn from other property investors especially those that have been active through several economical cycles. Try to spend time with others who are more successful than you and emulate their techniques and strategies to ensure that you too become successful in what can be a very lucrative business for you.



June

K Damian Qualter BA MBA asked:


Why Bulgarian Property Investment?

The Bulgarian Economy is growing steadily and doesn’t seem to be changing any time soon. There is currently a strong growth in industrial production in Bulgaria. Employment and credit has resulted in high GDP growth over the last few years. The economy in Bulgaria has grown at an average yearly rate of 4.8 % over the last five years and in spite of this, inflation has been greatly reduced to the of 2.3 % in 2003.

Foreign direct investment (‘FDI’) into Bulgaria has also increased every year since then. FDI reached US$7.4 billion in 2003 from a rate of US$5.7 billion in 2002 (which is a 30% increase). The outstanding growth in the Bulgarian economy should maintain a strong property market and lead to higher Bulgarian property prices. Bulgaria Property prices are currently low; making the best time to invest. Property in the better residential areas of Sofia sells for around £67 – £82 per square foot.

It is clear that Bulgaria property is significantly cheaper than many other countries in the areas surrounding Bulgaria. When it comes to the low Currency risk; the Lev has been pegged to the Euro since its introduction at a fixed rate. From 1997 the Lev was pegged to the DM at a rate of 1 Lev to 1 DM. The current cost of domestic borrowing is relatively high – The rate that Bulgarians pay for a floating rate mortgage is around 10 – 12% pa.

It is currently possible to achieve high rental yields on property when you invest in Bulgarian property. The current Rental yields on residential property in Bulgaria are currently in the range of 10 – 12% of the purchase cost and on commercial / industrial property you get yields of 16% which makes the property more obtainable to foreigners.

A lot of residential property that is available is unsuitable for letting. There is currently no set up where individual leaseholders can be compelled to contribute towards the cost of repairs to common parts and exterior of buildings unless their leases specifically contain provisions about it. While suitable provision can occasionally be made in the leases of recently constructed buildings, the buildings that are constructed in the communist era, or earlier, hardly ever have these kinds of clauses in leases. The result of this is that unless all the owners in a block agree to make the repair, nothing may be done about it all. Even in the best residential areas of Sofia the common parts of older blocks are often run down looking and are, difficult to let. Good quality modern blocks of flats therefore command a premium in the letting market. This allows the new investor to get their property extremely cheap.



Corey

Javaid Kiyani asked:


Property investment in the UK has witnessed massive growth over the last decade.

A house bought 10 years ago, would be worth around 300% more today. If you were to look at house price growth over a longer period, youd be amazed by the results. For example, if you had bought a house in 1952, today it would be worth around 90 times more!

At an average growth of 8% per year, a house bought today for 215,000 pounds would be worth in excess of 1 million pounds in 20 yrs! 10 houses bought today for 215,000 pounds each would be worth an unimaginable amount!

Even today, as the market shows some evidence of slowdown, there are pockets of above average growth in certain towns and villages across the country. Its the job of the property investor to hunt out these areas and milk them for all they are worth.

When looking for property to buy in the UK, it is always advisable to do some research before commencing any viewings. Recent statistics on house values in any one particular area, historical data and local trends can help you to build a clear picture of the suitability of any one location for investment purposes.

A common misconception among novice property investors is that you can only really make money in property when house prices are going up in value. In this scenario, you would buy a property for x amount and resell shortly after for x+growth amount, pocketing the difference in value. If the market was flat, your property would still be worth x several months later, i.e. exactly how much you bought it for. When house prices are going down, your property would be worth less several months later, e.g. x-growth.

However, any experienced investor will tell you that you can make money from property investment regardless of whether house prices are increasing, decreasing or whether the market is flat. By buying well below market value, you would safeguard your investment from any short term economic trends that would normally affect your propertys value. You would also gain immediate equity in your property investment.

When deciding to embark on a career in property investment, as with anything else, you need to educate yourself. You can do this by attending seminars, attending courses and meeting others in the same field. Talk to real estate agents, brokers and lenders to gain a good basic understanding of current and future trends in property investments. Furthermore, take advantage of free online courses and material to learn the ins and outs of property investment.

Property investment is not rocket science. By learning and applying just a handful of basic principles, theres no reason why anyone cant benefit from the UK property investment market.



Pedro