Alex's Minnesota Real Estate Blog

Homebuying Basics - Things To Consider When Negotiating The Best Price For Your Home

Alex Anderson (GreatMinnesotaRealEstate.com) — Sun, 18 Oct 2009 22:30:16 -0500

After you've spent enough time doing all of the research about your prospective home and are comfortable with working with the seller, it's time to make the offer. However, the home buying offer isn't the end of the sales process; you may be involved with negotiating a price after making the offer if the seller refuses to accept it, so you'll need a plan to get the price you want - or close to it - well before you extend your initial offer.

Knowledge of the contract and devising a contingency plan are just some ways to ensure you get your dream home within your budget. Barron's 'Consumer's Guide to Home Buying' advises homebuyers to make a checklist of things to consider even before entering the negotiation process. Below are some of the things you need to pay attention to when negotiating:

1. Knowing who are involved in the decision making process. Sellers usually employ the services of agents, lawyers, accountants and other third parties to transact with buyers. Knowing whom you'll be dealing with beforehand will help you devise a specific method for negotiating.

2. Have a back-up plan. It is possible for you and the seller to reach a stalemate when negotiating. Consider developing a back-up plan just in case no agreements are reached during negotiations. Define your maximum offer and do not go over it; just look for other homes to buy.

3. Read the whole contract in detail. Know what you're getting into before you sign your name on the contract. Review the contract in detail and take note of any provisions that are not clear to you. It is best to clarify all terms in the contract with the seller than to assume the meaning of the terms yourself.

4. Develop a relationship with your realtor. Realtors have the experience to give you professional advice about your prospective home. Spend the time to develop a positive working relationship with them. Voice out your concerns to your realtor well ahead of the negotiation process to give your realtor time to help you in making an informed decision.

5. Be prepared to handle negotiation setbacks. Poor communication happens in any negotiation often and you have to learn how to deal with it. There are other things as well that make negotiating difficult. It is important to remain impervious to negotiation setbacks but you have to know when to stop negotiating when you think the transaction is not going anywhere.

Author: Alexandria P. Anderson specializes helping people to find and purchase Richfield MN real estate, as well as Richfield homes for sale for her Minnesota real estate clients.

How To Perform A Home Inspection As A First Time Homebuyer

Alex Anderson (GreatMinnesotaRealEstate.com) — Thu, 17 Sep 2009 05:59:14 -0500

Contracting a professional home inspector before buying a home is a good way to ensure that you will not encounter any major problems after you've signed a contract and bought a house.

However, you aren't required to conduct an official home inspection until after signing the initial contract, so it's a good idea to learn as much as possible about the condition of the home by having an honest discussion with the seller, and even performing your own 'mini' inspection where you can check for basic structural defects or potential problems.

Sellers usually allow prospective buyers to check the condition of the property before any contracts are signed. This can give the buyer some bargaining advantage during negotiation since the buyer is already aware of any damages the property has acquired through time. 'The Smart Consumer's Guide to Home Buying' advocates the use of checklists and taking a note of all known issues regarding the property. The book further explains that conducting an informal inspection is very beneficial to homebuyers, especially those who are considering buying a house that needs renovation.

You need a checklist in inspecting the house to ensure that you cover all important aspects that you need to look at. The information you gather from this checklist can then be used to create a written report to help you in assessing the overall condition of the house. Here are some important matters to include in your checklist:

Learn about the age of the home - you'll want to find out exactly when the home was built, what types of renovations or new construction took place on the home site, and if there are any architect or engineering plans available.

Check the foundation for potential problems - are there any large cracks or noticeable water problems around the home or in the basement? Ask about flooding issues and weather-related problems that have taken their toll on the home in different seasons.

Inspect the house's interior for flaws - Walls should be even and free of cracks. Check if you can manipulate the doors with ease. All water entry areas should function properly and keep an eye out for mold and mildew infestations. Take a note of noticeable cracks and corrosions. You might also want to take a snapshot of problems that really stand out.

Inspect the exterior of the house - Check if all windows and doors move smoothly and if these are properly insulated. Inspect the sidings of the house. Look for signs of deterioration.

Examine the heating and air conditioning system - Query the seller about the average cost of operating these systems in a month. You may need to have a new system in place if the old air conditioning system is already inefficient.

In addition to the written inspection report, you may consider taking pictures or short video clips using a digital camera/camcorder so you can review everything again in more detail at a later date. This extra footage or coverage may also give you an upper hand during the negotiation process with the seller.

About the Author: Alexandria P. Anderson is a Plymouth Real Estate agent that helps people to find and purchase Plymouth Homes for Sale and properties in the Twin Cities of Minnesota.

First Steps When Buying a Home

Alex Anderson (GreatMinnesotaRealEstate.com) — Thu, 06 Aug 2009 00:43:18 -0500

Buying a home is a long-term investment. You'll probably live in a home for some time so you have to make sure that you really want the home you will purchase. It is best to be clear about what you want in a home before you start your search. While most real estate agents can guide you in your search, the decision to purchase a home, and its implications, wholly rest unto you.

Many first time home buyers feel overwhelmed and frustrated by the homebuying process simply because there are too many decisions to make. How do you decide on the best location? What if the home isn't in the best move-in condition? Can you afford to be so far away from work? Making sure you've asked yourself the right questions and creating a 'wishlist' for your ideal home will make the home buying process much easier, and also help you get over many of the challenges involved in finding that perfect home. Start creating your wishlist with the following essential questions and considerations in mind:

1. What are the essential amenities you're looking for? Think about fireplaces, swimming pools and kitchen appliances that you want to have in your new home. Prioritize these so you can simply say 'no' to a prospective home if it doesn't meet the basic amenities criteria. Be as specific as possible with this section so you can narrow down the hundreds of options available.

2. Be very particular about your location. Ilyce Glink, author of '100 Questions Every First Time Homebuyers Should ask' explains that location is one of the most critical issues when buying a home. You need to decide where to live in relation to your work, your family and friends, your kid's school, commercial areas, and places of worship. Your location determines your travel time each day. Ask yourself if the travel time is worth your home and location.

3. What is the ideal size? Do you need more than three bedrooms? Is your family growing? If you are going to need more space in the near future, you may need to buy a home with more space than you currently use. Project your home needs for at least the next three to five years so you select the right size.

4. Are you willing to invest in renovating or refurbishing the home? If the house is not in move-in condition, how much are you willing to spend on modifications, renovations and other maintenance costs? Setting some guidelines in this area can help you eliminate certain homes from your radar as you search.

5. Do you worry about security and safety? You might prioritize safety and security if you are living alone or with your children. Determine the things that you will need in order to feel secure in your home and neighborhood. Cross-out houses that do not meet your criteria.

Remember to put in some effort in clarifying your home preferences and goals in life. This exercise can simplify the home buying process and will help you feel comfortable with your purchase in the long-run.

About the Author: Alexandria P. Anderson is a Minnesota Real Estate agent that helps people to find and purchase Condominiums in Minnesota and other properties in the Twin Cities of Minneapolis and St. Paul.

Renting Or Buying Your First Home - What to Consider

Alex Anderson (GreatMinnesotaRealEstate.com) — Mon, 06 Jul 2009 00:45:28 -0500

You may have doubts in the home buying process if you have rented a property for several years. We will explore the pros and cons of both buying and renting a home in this article to help you finally decide which path to take.

Long time home renters might feel uneasy about the idea of buying their own home. This is because buying a home is much more complicated than the renting process. Homebuyers are obliged to apply for home insurance, pay for monthly home maintenance costs, and settle real estate taxes and fees. It might seem daunting at first, but anyone can be more comfortable with the home buying process by knowing more about it.

Ask your realtor for information regarding all payments involving homes you are interested in. Ask about maintenance costs, average fess and taxes and organize all information in a spreadsheet. Organizing these data will give you a bird's eye view of the total and monthly costs you have to pay for. It is highly recommended that you use a digital spreadsheet so that you can easily compare different homes side by side.

Ilyce Glink, author of the book '100 Questions Every First-Time Home Buyer Should Ask' clarifies that buying a home also means you're investing in your local community because you have to pay local community taxes, and other services that you won't have to pay for if you are renting in the same locale.

You would also need to research about the tax benefits that come along with owning a home. There are more tax advantages in owning a home than with renting - but the exact benefits depend on one's income and total real estate property tax due per year.

You can estimate your real estate tax benefit by taking into account all your other tax benefits, deductions and current income level. As always, it is better to consult with a financial advisor or an accountant to help you in doing this.

Owning a home is seen as a long-term action. Going through the whole home buying process is just not worth the time, effort and money if you only intend to settle in a particular location for a few months or a couple of years. If you're not yet decided on where to settle in for the long-term, it might be better for you to rent a home on a monthly or yearly basis.

Owning a home is suited for people who can commit to settle in a city or neighborhood over the long-term. If you are serious about buying your own home, it would be best to decide on where you want to live or re-locate first in the long run.

Alexandria P. Anderson is a Minnesota Real Estate Investing specialist. If you are a MN First Time Homebuyer she can help you to find real estate that's perfect for your needs. Get a free copy of "The Investors' Rental Guide" at GreatInvestmentProperty dot com.

Ways To Search For Your New Home Online And Offline

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 27 May 2009 23:25:17 -0500

A part of life's milestones that people look forward to is the purchase of a new home or property, and you can actually start on your own by looking at online resources. Websites contain various information on home search and home buying that allows you to decide in a short time what amenities or features you'd like to have.

Real estate listings online are also a valuable resource for outlining exactly what you really do want. If you're still unsure about the type of floor plans you need or the different home styles and designs,you can browse through online catalogs to pinpoint exactly what fits with your taste and personality. The authors of 'Questions Every First-Time Home Buyer Should Ask' encourage first time homebuyers to start their search using major online listing services such as Realtor.com. These sites offer comprehensive listings of neighborhoods and homes with pictures, video presentations and other visual aids to help you narrow down your search with ease.

Almost all the data you need about these homes are present as you do a basic search in the Internet which can be printed for reference purposes. Coldwell Banker, Re/MAX, and Century 21 are just some of the best websites in home buying typically managed by leading national chains; you can bookmark said sites as valuable sources. Likewise, a real estate professional can assist you in your quest so start looking for individual offices with databases on listings or contact information on realtors that are regularly updated so you can network with one.

Moreover, online resources like Realestate.com has up to date MLS listings and provides street views of homes. Listings can be located by city and state, zip code or MLS number. If you need more data on home sales prices, crime rate, commuting, or weather in your desired location - you can check their 'Local Community Information' bulletin.

Aside from the ease in search that these websites offer, you can be updated with the latest online listings and can even compare home values. All the information you can get in your search are great tools as you prepare approaching a real estate agent. Real estate listings are likewise found in your local library. These libraries more often than not, have online equivalent of its resources that you can take advantage of. But it it does not have one, you can allot some time in searching at their in-house database. If there is one limitation that these local libraries have, it's that their listings may not be regularly updated.

Despite the fact that the Internet or online resources have become a big help in home searching, you still need the assistance of a real estate agent when actual visit to the property commences. Drilling down local listings and defining your home preference according to your style and personality are major benefits in using online searches. And finally, you can benefit from all these if you use regularly updated resources in your searches.

Author and Realtor Alexandria P. Anderson helps clients to find and purchase real estate in Maple Grove as well as Maple Grove property in Minnesota.

Key Things To Consider With New And Existing Homes

Alex Anderson (GreatMinnesotaRealEstate.com) — Thu, 07 May 2009 00:34:23 -0500

Buying a brand new home as a first time home buyer is an attractive proposition for most; you get to move into a completely new living space with brand new amenities and don't have to worry about maintenance and renovations for at least the first year.

However, a brand new home can be significantly more expensive than an existing home and you don't always know what to expect if you're one of the few homes in a growing neighborhood.

Comparing the strengths and limitations of each scenario helps in coming up with the best decision for your home buying; the following are questions you must keep in mind when you begin finding your new home.

1. Are you willing to spend extra for a new home's purchase? Because of its newness, all brand new homes are priced at a premium; this means that you will be the one to get a taste of everything it offers, from the moment you entered your new property.

2. Does resale value matter to you? A brand new home typically appreciates faster than existing homes, explains author Ilyce Glink of the book '100 Questions Every First-Time Home Buyer Should Ask'. If you are planning on selling your home in the very near future, a brand new home may have a higher market value shortly after you move in, making it easier to sell the home for a profit.

3. Are you the type of person who can adapt well? The construction of new homes rapidly increases at a certain time, thus, being a new homeowner in an area may require knowing more people in the neighborhood before having a full knowledge about the whole area. Two important factors necessary in a household of small children or elderly are safety and security, you can discover your options to ensure that your house is safe and secure all the time.

4. Are you willing to invest your resources for home renovation ? Existing homes can appreciate tremendously in value if you have the time and resources to invest in renovations and maintenance. You may opt for a 'fixer upper' if your plan is to have a long-term investment to give you a high profit at a short time.

5. Which do you prefer, a primary residence or an investment? Many younger first time home buyers are looking for investment properties that they can fix up and sell quickly to turn a profit. Mature home buyers are more likely to be in the market for a primary residence since they want to settle down and establish themselves in the neighborhood. Identify your goals beforehand and decide what you think will give you more benefits.

Deciding whether to buy a new or existing home will largely depend on your short and long-term goals, and the amount of money you are willing or able to spend right away. Consider all of the above questions when you're deciding between the two options so you can make the best investment with your resources.

Author: Alexandria P. Anderson specializes helping people to find and purchase Edina homes for sale in Minnesota, as well as Edina MN real estate for her home buying clients.

First Time Home Buyer Tips - Getting Preapproved And Prequalified

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 15 Apr 2009 05:15:35 -0500

One of the most important steps to home buying involves getting the right loan amount for your ideal property. There are several ways you can get prequalified to purchase a home and preapproved for a home loan, and it's generally a good idea to check your credit report before approaching this step. A prospective lender will be reviewing your credit report and other financial details in great detail as you set the prequalification or preapproval process in motion, and you can obtain a free credit report from any of the three major credit bureaus to check it for errors.

There are cases when errors or mistakes happen and if this is the situation, better have your records cleared up, likewise, compile all your communications with credit bureaus and lenders as references. If you have finished all these tasks, its time to factor in this important ideas and tips in the loan prequalification and preapproval for you to buy your new property:

1. Go online to review different mortgage programs. Websites such as LendingTree.com and Bankrate.com offer a number of loan packages and will also list the latest interest rates. Take the time to review several options and submit your personal information for preliminary review. You can expect to be contacted within a few days from a loan representative who can then guide you through the rest of the process.

2. Approach your area bank. Most people turn to a mortgage loan officer at their bank to obtain a prequalification letter or preapproval status in person. Ilyce Glink, author of '100 Questions Every First Time Home Buyer Should Ask' explains that this process can actually take longer than the online process. However, some people prefer the face-to-face communication and will be more comfortable going to the bank in order to get things started. However, you will be receiving the same type of service either way.

3. Dial the telephone. Another option you may try is transact your loan prequalification over the telephone, instead of online or bank methods. Some lenders offer this kind of service and all you have to do is ask the local bank for the number so you can give or submit your personal details through the phone.

4. Engage the service of a national lender. These lending companies may provide you a wider array of options than that of a bank or online processes; examples of national lending institutions are Countryside Home Loans and Bank of America. Know more about the current rates in their website and get your home loan pre-qualified after sending your personal information.

5. Visit an aggregator website. This type of online resource provides documents on rates and services offered by different lenders and a good option where you can submit your personal information instead of a bank or any other financial institutions. Several options are available for you to choose from after you have submitted your info.

Buying a home is much easier when you know the basics in getting pre-qualified and pre-approved for a home loan. Refer to these essential steps for you to make the most in your pursuit to purchase your first home.

Realtor and Author Alexandria P. Anderson uses the Plymouth Real Estate Listings to help her MN realty clients find Plymouth Condos in Minnesota.

Things To Know About Working With A Seller's Agent

Alex Anderson (GreatMinnesotaRealEstate.com) — Thu, 26 Mar 2009 05:19:58 -0500

Buying a home for the first time involves collaborating with a seller's agent or subagent. It is crucial that you understand how things will work between you and the subagent because these people act as representatives to the seller and are therefore expected to bring you to the deal. As a seller's agent, they are entitled to a commission and have certain duties and obligations.

Regulations vary from state to state, but there are certain things they cannot do according to national law. The author of '100 Questions Every Home Buyer Should Ask' encourages all buyers to review the agent's forms and disclosures thoroughly to understand exactly what types of services they will be offering; if you do not understand anything, do not sign the form. It's also important to understand the key things that a seller's agent can and cannot do for you:

The seller's agent can provide you with detailed pricing lists of comparable homes in the area. These are often called 'comps' and are a compilation of similar homes in the neighborhood, listing information and their list prices. This information ensures that you are not offering, or being offered, an unreasonable price when it's time to negotiate.

When you are still deciding, the seller's agent cannot give you hints on what home to choose. The seller's agent has the primary task of selling the home that is commissioned him to deal. However, he cannot insist or even suggest what home you should purchase. In the case that you like two properties and it happened that the subagent works for both sellers - you cannot be persuaded to select one over the other. In other words, only you have the power to decide.

The seller's agent cannot say anything about the home's deficiencies. Whatever your decision is, the seller broker cannot influence it. This is the main reason why any defects in the property cannot be discussed to you. Nevertheless, you can do your own research to see if you are buying the one that is in good condition.

The best offer for the home cannot be hashed out in detail. Most first time homebuyers would normally ask for the actual price to be paid in getting the property. However, this information cannot be legally offered since the seller broker has duties to the seller and any such act can affect the partnership.

The seller's agent can consult you about future clients. Seller's agents can rightfully request that they be referred to your circle of friends and family members in the same way that they will do all the things to make sure you will have a pleasant home buying experience.

In home buying, it is essential to remember a few important things. It is a fact that seller brokers facilitate the home buying process. However, this does not always translate to giving you all the benefits in the purchase of your new home. So it is necessary that you conduct your own research and find a real estate agent who can assist you or help you address your home buying concerns.

Alexandria P. Anderson is a licensed Minnesota Realtor that uses the MN Real Estate Listings to help her clients to find and purchase Minnesota Homes for Sale.

Will Real Estate Protect Your Money?

Alex Anderson (GreatMinnesotaRealEstate.com) — Thu, 05 Mar 2009 21:04:08 -0600

Are you worried about investing your money in real estate? With the general knowledge media spurs that the market is in the tank, who would not feel the same?

Smart investors put a premium on complete and accurate information. Start questioning anybody's credibility who claims that an investment is 100 percent secure or wise because whatever you do with your money certainly involves some form of threat. In this sense, it is advisable to KNOW what you must know in the business. Let us say your apprehension leads you to decide to do "nothing" with your money but instead keep it in the safety of your home. It still would not guarantee defense against other forms of destruction like fire, flood, even theft.

But, you say, what if I put my money in a bank safety-deposit box, won't THAT keep my money safe? Yes, it will keep the physical paper currency safe, but remember that the bills are only worth what the current value of the currency is. Over time the buying power of currency goes down (inflation!).

In the United States, the annual inflation rate is approximately 3 percent. In other words, the cost of commodities increases by at least 3 percent every year. Now, what does this imply on the money deposited in your safety box? Definitely, your purchasing power decreases at a fast pace.

Let us have savings account as another example. Fortunately, for those who invested their money in savings accounts, FDIC or Federal Deposit Insurance Corporation is there to safeguard them. Save for inflation concerns! Even the most successful savings accounts out there could not offset inflation, thus there is a big chance your savings' account interest earnings will not even sound good.

Another remarkable area to look into is stocks. Would it be best to invest in something when there is no tangible item you can hold claim to? Investing in stocks can be compared to investing in an "idea" and whether you like it or not - the only thing you can claim yours is the fact that you put in funds so that the entity you place your money into will add value to itself, which eventually increase yours.

The danger here is that you wouldn't surely know how much control you have over such an "idea". In real sense, you actually have almost none. Most people remedy this by doing extensive research on the company or entity's track record as well as the people around it (to predict if the "idea" will work for all of you). Unfortunately, it's hard to tell especially if you are unaware of all the factors involved. Unless you have the desired technical preparation (i.e. its your profession, or you devote your time on research), investing in stocks would save you from much greater risk. This leads us now to the best possible option, the real estate.

Real estate is really a great field to invest in. Because it is "tangible" - real estate lends itself to seeing, touching, and improving. The risk involved is minimal as far as losing the investment is concerned. Suppose that you are faced with such a situation, insurance is there to protect you. That would be very unlikely if you opt for stocks! Another great news about real estate is that your property increases its value with inflation contrary to what happens in the case of paper currency where it loses its purchasing power over a period of time.

Another great thing about real estate is that money is made in multiple ways (these are too numerous to detail for the purpose of this article, but the benefits include huge tax breaks, gained equity through renter-paid debt reduction, equity gained through improvements, and appreciation). As stated in the beginning of the article, no investment is 100% safe, but it is my strong opinion that if done with some foresight, real estate is where you'll find the most bang for your buck as well as the most security for your money.

Author: Alexandria P. Anderson specializes helping people to find and purchase Minneapolis Condos, as well as Minneapolis Lofts for her Minnesota real estate clients.

How To Choose Your 1st Home's Mortgage Loan

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 18 Feb 2009 23:51:26 -0600

Selecting the right mortgage package as a first time home buyer can be a confusing process, and working with a mortgage loan officer isn't always the best way to get the mortgage loan that you can afford. One of the biggest mistakes that first time is to sign on the loan that they qualify for, instead of taking a smaller loan that they can actually afford.

After the loan officer had assessed your qualifications based from your income ratio, evaluate first your readiness in terms of your monthly payment or budget. People who fall into the trap of borrowing the entire loan amount they qualified for may find their monthly budget exhausted and can end up regretful.

To prevent yourself from borrowing up to the limit that the loan officer presented, you can set your own loan amount limit. This can help you effectively manage your housing expenses based from your income bracket. There are several ways to find the right mortgage for your newly-purchased home:

1. Consider the tax benefits. Some mortgages are 'interest only' loans which means you can deduct the entire payment on your taxes for that year. However, loans that are designed with a negative amortization scale won't allow you to deduct interest from your monthly payment.

2. Evaluate the long-term advantages. Whether you're planning to live in your home for 30 years and more or not, it is still advisable to know the pros and cons of your mortgage package. A fixed interest rate loan is somewhat higher in amount but unlike ARM and other loan products, it can safeguard you from changing market conditions. But a fixed interest loan also has its limitations. Smart Consumer's Guide to Home Buying's author, Barron, proposes that the fixed interest rate may increase your payments because of the demands of the escrow account linked with it.

3. Inquire about flexible payment options. Some home mortgage loans allow you to make extra payments towards the principal balance without paying a penalty, which means you can start paying down your mortgage when you have extra funds at your disposal. Find out if your loan products offer this type of flexibility so you can start paying down and be free of debt sooner than later.

4. Look for ways to keep payments low. Even when the lender offers you a large loan, consider cutting back on the loan amount so that you can keep the payments within an affordable range. A low interest rate, long loan term, and the ability to make interest-only payments are a few ways to keep payments as low as possible and within your budget range.

5. Apply for mortgage insurance. Most first time home buyers do not have a lot of money available for the down payment, which can make a big difference to the loan amount and monthly payments. Mortgage insurance can provide for your down payment, or in some cases, allow you to apply for an attractive loan product without having to make any type of down payment.

Author: Alexandria P. Anderson specializes helping people to find and purchase Minneapolis Condos, as well as Minneapolis Lofts for her Minnesota real estate clients.

Cashflow Versus Appreciation

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 11 Feb 2009 05:00:49 -0600

Much has been said about real estate and its wonders. But do you really know the real score on how it creates wonders for your money? After all, different people hold various opinions on how much good do leverage and OPM (other people's money) have.

Many who engage in this business have distinct goals, so you must always keep in mind that your team of experts needs a well-trained mortgage professional. For one, the examples below may or may not address your ultimate concern. People's aim may vary from receiving monthly cash flows as additional incomes to preferring investment appreciation in some others.

In achieving your financial goals, we can look at some options you can consider. The best thing here is that you are in control when it comes to real estate. To start with, let's say you have $20,000 as a principal. If you are eyeing a $100,000 worth of property, you can deposit a 10 percent down payment. Alternatively, you can put in a 20 percent down payment for a $200,000 property. The rest is for you to decide.

Maybe you want to ask: what is the difference between these two options? Considering you decided to put in a larger down payment, chances are, you will pay your mortgage at a much lower price and you do not need mortgage insurance at the 20 percent mark. Larger down payments can provide you cashflow if that is what you like.

On one hand, let us say that the appreciation is set at 6 percent for both properties. (Appreciation rate varies depending on the location, type of property, etcbut for this specific article, we will assume it at 6 percent). In just a matter of one year, your $100,000 property is now worth $106,000. However, the $200,000 property becomes $212,000!

The amount of appreciation for both properties ($100,000 and $200,000) obviously doubles itself year after year. All these and more, but you would not be spending any thereby saving yourself some serious bucks!

In a relatively shorter time, your gain will be sufficient to obtain equity and purchase another PROPERTY so you actually have doubled your properties and compounded their appreciation. On another hand, the cashflow might not be present in the $200,000 property and perhaps there will be times when you have to expend for maintenance costs but look at the greater appreciation and long-term benefits.

Moreover, you get more advantage since debt payments and maintenance costs are tax deductions (using leverage or OPM and getting less monthly cashflow) unlike cashflow that is taxable. In the case of some people who needed monthly cashflow - the solution is simple, your approach can be modified to get what you really wanted. Besides, most people would agree that extra payment every month realizes wealth building benefits in the future!

The choice is yours! Build your team of experts to help you make the right decision.

Author: Alexandria P. Anderson specializes helping people to find and purchase Eden Prairie MN real estate, as well as homes in Eden Prairie for her realty clients.

The Easy Way To Property Investing Success

Alex Anderson (GreatMinnesotaRealEstate.com) — Sun, 25 Jan 2009 23:38:50 -0600

Many people think that real estate investment is beyond them. It has such a mysterious sound. Surely, successful real estate investors like Donald Trump were born with a tip sheet in their hand and prospects in the back pocket of their baby jumpers. But the fact is, even those who were born into families of real estate moguls had to start from scratch to learn the family business. They just got an early start.

If you start learning the ropes and making a few smart investments now, you will be way ahead of the pack.

Think about airplane pilots, for example. These guys sit down in the cockpit with some very complicated equipment. They use this complicated mass of dials and switches to take a giant metal tube into the sky and safely get dozens of passengers to their faraway destinations in only a few hours. Once upon a time, the last pilot who took you on a ride had never sat in a cockpit. But slowly he began to learn. Eventually, he became an expert and can now probably take up that bird and set it down with his eyes closed.

Real estate investing is exactly like flying an airplane. In the beginning, it is a mysterious thing. You may look at the experts and be absolutely awed by what they have accomplished. But as you begin to learn the language of finance and as you begin to learn the markets, you start to understand what those guys are doing. If you make that sort of learning a habit, you will eventually be an expert yourself.

If you start investing in properties, and do it wisely (by learning as you go and by getting advice from the experts) you will soon find yourself making a little bit of money at it. Then you will find yourself making more money at it. Eventually you will make a lot of money from it and wonder when exactly you stopped being a novice and started being an expert. It is a gradual process, like anything else.

If you don't believe it, take a look at the Rich Dad book series by Robert Kiyosaki. He explains just how easy it is to learn about real estate investing. His adviser and fellow Rich Dad author Ken McElroy, actually outlines a step-by-step process to follow in "The ABCs of Real Estate Investing."

At the end of the day, becoming a successful real estate investor is only difficult if you're unwilling to try, or if you insist on throwing your money at wild guesses (that's gambling, not investing). The one critical fact that you must remember about investing is that in order to succeed, you must constantly be learning; if one becomes complacent, or acts as if he or she is a born investor, a rude awakening is sure to come.

After all, you wouldn't want to climb into the cockpit of an airplane, fire it up and hope for the best, would you? Of course not. That would be suicide. On the other hand, you would expect to become a good pilot if you went through a prescribed program and logged enough hours behind the wheel. Approach real estate investing in the same way and the sky's the limit.

Alexandria P. Anderson is a licensed Minnesota Realtor that uses the Minnesota MLS Listings to help her clients to find and purchase Minnesota Property.

Invest In Property And Join The Ranks Of The Rich

Alex Anderson (GreatMinnesotaRealEstate.com) — Mon, 12 Jan 2009 01:41:54 -0600

How many times have you heard people grumble about taxes? Eventually, they get tired of simply complaining about how much money in taxes they have to pay and move on to how much money on taxes the rich DON'T have to pay. It can be frustrating, can't it, knowing that people with less money get fewer breaks than people with loads of money? It's frustrating because it isn't fair. And if you happen to be one of the people on the low-income/high tax-percentage side, then you may experience some resentment.

Well, the fact is, no amount of grumbling and complaining is going to make the powers that be suddenly make things fair for you. This is because of the Golden Rule: "He who has the gold, makes the rules." Chances are, they are going to make the rules in their favor. They're going to keep all the good tax breaks to themselves. They are going to tell you there just isn't enough money to go around, even as you watch so many people drive around in so many expensive cars and eat in so many posh restaurants. Even politicians who promise tax breaks to the downtrodden masses - even the ones who are sincere in their desire to help the average working stiff - are limited in their ability to affect the system.

In order to not be one of the many who are getting the short end of the stick, you're going to have to step up and take the advantage for yourself. It's true - you can get tax breaks like the rich do. You simply need to know how, and put forth the effort to get them.

Robert Kiyosaki, author of the "Rich Dad, Poor Dad" books, makes the sensible suggestion that those who are not rich but would like to be should watch what the rich do, and then do the same. You don't really need to watch too closely, however, to learn the open secret of the wealthy - that secret is real estate.

In his book "Cash Flow Quadrant," Kiyosaki says "One of the reasons I chose to work predominantly in the B and I quadrants are the tax advantages," The aforementioned "quadrant" is an invention of "Rich Dad," a diagram consisting on a square divided into quarters, each representing the different ways in which different people relate to money. It's an unavoidable fact that an individual's personal philosophy and perspective on the world will affect the way in which he or she behaves with money, and this behavior will,, in turn, decide his or her ultimate financial success or failure.

According to Robert Kiyosaki, the real money is in the business and investment quadrants of the Cash Flow Quadrant.

It's best to take an "if you can't beat 'em, join 'em," attitude towards the wealthy - there's no way you're ever going to beat them, so the next best thing is to become one of them. Know also that the rich aren't simply lucky; if you follow the examples set by rich people, you can become one of them, and you can get the tax breaks that they are able to get.

This is how you become rich: put money into investments and let that money multiply as you sit back and watch. You can, of course, continue working as an employee while your investments make you money, but Kiyosaki believes that the more profitable path is to venture into the 'B' quadrant and formulate a business model that will help you to create wealth with minimum effort on your part. The most important thing, though, is that you do invest.

Investing, preferably in real estate - condos, rental property, land and the like - is your ticket to financial freedom.

Author and Realtor Alexandria P. Anderson helps clients to find and purchase real estate in Eden Prairie as well as Eden Prairie homes for sale in and around the Twin Cities of Minneapolis and St. Paul.

Can Real Estate Make You Rich?

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 03 Dec 2008 21:02:45 -0600

Those who aspire toward riches should know that, in order to achieve their goals, they will need to abandon much of the conventional wisdom passed on to them by parents, teachers, and others. You may, however, already be on the right track - that is, if you were lucky enough to have a role model who knew what it really takes to become rich.

In the words of Robert Kiyosaki of "Rich Dad, Poor Dad" fame, "It doesn't take money to make money. I often hear people say it takes money to make money. I disagree. We had no money when we started and we were also in debt. It also doesn't take a formal education."

Kiyosaki proceeded to cite the case of Bill Gates: the Microsoft mogul never actually graduated from college, but did that keep him from making his fortune? No way! Diplomas are nice, but they don't reliably add up to more money.

Robert Kiyosaki says that the only true prerequisites to being rich are that one must be determined and a quick study. Beyond that, it's all about what you know. One of the first things you need to know about becoming rich is where you fall on the Cash Flow Quadrant.

Kiyosaki's "Rich Dad," actually his childhood best friend's father, is the one who introduced him to the Cash Flow Quadrant, a handy diagram that visually illustrates the ways in which individuals with different personalities relate to money. It consists of a square split into four quadrants, labeled 'E' (Employee), 'S' (Self-employed), 'B' (Business), and 'I' (Investor). If your aim is to become rich, you're going to have to set your sights on the 'B' and 'I' quadrants of the diagram.

When Kiyosaki says you need to be willing to learn quickly, he doesn't mean go back to school to improve your job skills. He means you should learn about investing, preferably investing in real estate. The rich dad on whom he based his books was a real estate investor. You can get rich investing in real estate because everything else depends on it. At the beginning of his book Cash Flow Quadrant, he pointed out how so many of Hawaii's businesses were sitting atop real estate that his rich dad owned.

But don't worry - learning about real estate doesn't mean that you have to learn every minute detail that goes into the buying and selling of property; in reality, there are plenty of people willing to take on the technical aspects of investing for you. You just need to think like a businessperson in choosing the individuals with whom you surround yourself.

That is a far cry from thinking like a Self-employed person. According to Kiyosaki, a self-employed person is someone who owns a job, not a business. You don't own a true business, he said, unless you can leave it for a year and return to find it still making money for you. Businesspeople, he said, know better than to try to do everything themselves. In order to save time and money, they hire people to do the things they can't do or don't have time to do. That's why hiring a qualified real estate professional to guide you in your decisions can be a good investment in and of itself.

In the end, it doesn't really matter if you dive headfirst into the study of investing yourself, or you simply hire a qualified expert to help you make your decisions. The important part is that if you really want to strike it rich, you must be willing to move from the 'E' and 'S' squares of the Cash Flow Quadrant into squares 'B' and 'I,' which are where the real money is.

Alexandria P. Anderson is a licensed Minnesota Realtor that uses the Minnesota Real Estate MLS to help her clients to find and purchase Minnesota Properties.

Real Estate Investing Means You Don't Have To Work Hard To Get Rich

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 12 Nov 2008 23:56:03 -0600

When it comes to thinking about money, people always seem to fall into one of two camps: first, there are the so-called "workaholics," employees who are so dedicated to their jobs that they are more than willing to work overtime, bring business home with them, and sometimes even give their families short shrift when the office demands it. On the other hand you have the "slackers," who see the workaholic lifestyle as needless drudgery and have themselves convinced that money isn't all that important anyways.

Robert Kiyosaki, author of the Rich Dad book series, has money and he doesn't agree. "Anyone who says money isn't important obviously has not been without it long," he says in his book "Cash Flow Quadrant."

One would do well to heed Kiyosaki's words on these matters, because although he is now rich, he does know what it feels like to be flat broke-- as a matter of fact, he spent several weeks in 1985 living in his car. After that, Kiyosaki and his wife moved into the basement of a friend, where they lived for about a year. During this time, they took small jobs here and there but didn't look for steady careers, as security wasn't what they were really after-- they wanted to be rich.

Today, Robert Kiyosaki and his wife are millionaires.

While money is important, it isn't important in and of itself, and that is why Kiyosaki and his wife didn't rush out to look for the "good" jobs they both could have gotten. It's important because it provides for your basic needs and, if you have enough of it, it can give you time to be with your loved ones and do the things in life that truly make you happy.

Remember that no career in the world will give you the things that truly make life worth living, such as a fulfilling home life and time with your family. All money can do is grant you the resources to pursue what makes you happy.

At times it seems like a no-win situation; it takes so long to make the money you need in order to get what you want out of life that you'll never actually have the time to do the things you've always dreamed of. As an employee, this really can be an unanswerable problem; as an investor with money working for you, it's much easier to keep your priorities in order.

Kiyosaki has been there. In his words, "Money is important, but I did not want to spend my life working for it." When standing at this fork in the road, the wisdom that Kiyosaki gained from his time with his "Rich Dad" served him well.

He knew that there was a way to be a responsible provider for his family without spending most of his waking life working. He knew the secret was become an investor.

As a real estate investor, you will be taking the money from the 'E' quadrant of Kiyosaki's famous diagram and transferring it to the 'I' quadrant. By doing this, you start your money working for you. By putting your money to work for you in this fashion, you've taken the first step toward a lifestyle in which work is not a necessity. Your money is making money and you didn't have to lift a finger for those extra dollars.

So start now-- investing in property doesn't just multiply wealth; it also rewards you with more time that you can spend doing the things you love. Laying the groundwork for a career in real estate investing paves the way for a future in which money can actually bring you happiness.

Alexandria P. Anderson is a licensed MN Realtor that helps people to find and purchase Minnesota Condos as well as Condos for sale in Minnesota.

To Get Rich, Think Like Real Estate Investor

Alex Anderson (GreatMinnesotaRealEstate.com) — Fri, 31 Oct 2008 02:17:38 -0500

What exactly is it that separates the wealthy from the rest of us? This is an essential question that isn't asked nearly often enough. On first considering the question, you may be tempted to give answers such as, "Having wealthy parents" or "Winning the lottery" or even "Working at a cushy, high-paying job." Indeed, anyone in any of the aforementioned circumstances can count his or herself among the very lucky.

The truth is that not all of these lucky people can be truly considered to be rich. It is the belief of "Rich Dad" author Robert Kiyosaki that the true measure or wealth isn't really the amount of money you take in, but how much you manage to keep.

Kiyosaki's father, the titular "Poor Dad," was no bum; his work earned him more than enough to live on. The problem was, however, that none of his money was left at the end of each quarter

Fortunately for you, the circumstances of your life, such as the family into which you are born or the salary you receive at your job, are not what will determine whether or not you become rich. Being wealthy depends on internal factors, not external circumstances.

That's right, folks-- becoming rich has more to do with how you think than who you are and what you've got.

The man Kiyosaki dubbed his "rich dad" broke people down into four types and set them on a graph he called the Cash Flow Quadrant. On one side of the quadrant are the E's and S's, or the Employees and the Self-employed. On the other side are the B's and I's, or the Businesspeople and the Investors. According to Kiyosaki, each of those quadrants represents which sector a person's money comes from. It also represents the way that person thinks.

The quadrant into which an individual falls isn't determined simply by the luck of the draw; on the contrary, a person's perspective on money and the world, and their resultant decisions are the key.

In to book "Cash Flow Quadrant," Kiyosaki states that the people inhabiting the four corners of the graph are, in fact, totally different people. Their different intellectual and emotional mindsets are the main determining factor of how each group deals with money.

Because of individuals' innate natures, says Kiyosaki, they are drawn to different corners of the graph. This is because different people have different values, and will treat money differently based on these attitudes. A person who values security above other things will definitely be drawn to the 'E' corner of the graph, and the consistency is offers. There's nothing wrong with that-- if security truly is what you desire, a life spent as an employee will be satisfying and fulfilling. It is worth noting, however, that it is highly unlikely that an occupant of the 'E' corner will ever become truly rich.

This may seem a little bit daunting at first, but in reality you should feel encouraged-- since being rich really isn't the result of blind luck, that means that all you have to do to become rich is change the way in which you think of money.

One of the best things you can invest in is real estate. That is what Kiyosaki's rich dad did, and it made him...well, rich. In order to think like a real estate investor, simply tell your money that you are through working for it. It is time for your money to get to work for you.

About the Author: Alexandria P. Anderson is an St. Louis Park real estate agent that helps people to find and purchase St. Louis Park Homes and properties in the Twin Cities of Minnesota.

Why Invest In Minnesota Townhomes

Alex Anderson (GreatMinnesotaRealEstate.com) — Tue, 07 Oct 2008 21:48:58 -0500

Now is a wonderful time to look for your next home! So many places are available at unusually low prices, and townhomes in Minnesota are no exception! Minnesota townhouses are a great option to think about if you are thinking about purchasing. What advantages do townhouses have over typical stand-alone houses? For starters, there's generally less exterior maintenance to worry about since two of your four walls are shared with neighbors and are interior. If you don't need much yard space you can find many townhomes that have minimal grass to mow, especially if you have a deck or patio. Sometimes the lawn-care is even included in your association fees and you don't have to worry about it at all! Many great extras are included in townhouse communities, like swimming pools, gyms, playgrounds, tennis & basketball courts, etc., and are for exclusive use by only those living in your association.

Minnesota townhouses can be a financially good decision in addition to all the great amenities. You can typically buy more square footage for your money when purchasing a townhome...or you can get the same square footage for less money! Use that saved money to improve the home--how about updating the kitchen or turning the basement into a game room?! Put us to work finding great Minnesota town homes to fit your lifestyle. You might be surprised at what quality and convenience you can get during this buyer's market-- let us show you!!

Alex Anderson is a licensed Minnesota Realtor that uses the Minnesota MLS to help her clients to find new homes. Specializing in Minnesota First Time Home Buyers she can help you to find real estate that's perfect for your needs.

What Type Of Real Estate Investor Will You Be?

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 17 Sep 2008 02:27:40 -0500

Everyone knows that investing in property is a lucrative opportunity for enterprising people to make money. The advantages of entering the real estate business include paying less taxes and being able to make more money without actually lifting a finger. The prospect of putting your money to work while you sit back and relax is certainly a tempting one, and this is why so many seek a piece of the action.

In order to actually turn a good idea into money in your bank account, however, you have to know a little something about how the magic works. It is a good idea, for instance, to take apart this term "real estate." Just what is real estate, and what are the types of real estate investing that are open to you?

A parcel of land, and any buildings or structures that stand on it, constitutes "real estate." The price of said real estate is dependent mainly on the changing climate of the local market. You may choose to invest in real estate in several different ways.

If you want to invest in real estate by owning actual properties, the mortgages on pieces of property, or both, you will want to invest in an REIT, a Real Estate Investment Trust. In addition to having a high degree of liquidity, this kind of investing carries the previously mentioned advantage of paying fewer taxes.

A partnership with one or more other property investors is another great way to make money. Real estate partnerships can increase their wealth as a group, providing added security, though the profits are somewhat lower for each individual investor.

The rental of vacation property is pretty self-explanatory. Your vacation property is one that is used for recreational purposes and is not your primary residence, the piece of property on which you live.

Rental property is another common choice for those looking to make money in real estate. Everyone has dealt with landlords, so this type of investing doesn't take much explaining. Do, however, mind the differences between residential and commercial rental properties.

You may also invest in raw, or undeveloped, land.

It is a good idea to learn about each type of real estate investment to determine which yields the greatest benefits, determined by your particular needs. Kiyosaki named tax benefits as a good reason to become a real estate investor. After all, money you keep in your pocket is just as good as money earned.

If you are particularly interested in pursuing real estate investment because of tax benefits, you may even wish to become a real estate professional, as the IRS allows people who spend at least 750 hours a year on their investing duties to have nearly unlimited tax deductions. If you are not considered a professional, and your salary is high, that can actually cost you deductions on your real estate. You must have the time to participate in your real estate activities yourself, even if you have hired another real estate professional, to qualify for all tax benefits.

About the Author: Alexandria P. Anderson is a Minnesota Real Estate Agent that helps people to find and purchase Minnesota Townhomes and other properties in the Twin Cities of Minneapolis and St. Paul.

Real Estate Investing - Why It Is Important To Listen To the Right People?

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 03 Sep 2008 18:52:43 -0500

Everywhere you go, you hear the same sad things: "The rich are getting richer while the poor are getting poorer." "There just isn't enough to go around." "It takes money to make money." This can lead you to believe that there is some mystical force out there that regular people like you and me just can't tap into. If you subscribe to this way of thinking long enough, you may be tempted to say, "Since it takes money to make money and I have no money, then what hope is there for me?" There is plenty of hope, as long as you don't listen to the wrong people. Media naysayers are definitely the wrong people.

It is a common misconception that today's real estate market is in such an irreparably dire state that one would be a fool to start investing in properties. If this were true, however, why would people still be doing it? Real estate investors continue to make money every day; if you believe otherwise, you've simply been talking to the wrong people.

This isn't a difficult principle. Think about the people you know who are cynical and jaded about the very possibility of financial success. Are any of them wealthy? Not a chance! If you want to know how you can make more money, don't go to those who obviously have no clue. Find someone who has actually succeeded, and ask him or her for advice; what you'll hear is that becoming rich as an investor really isn't as difficult as you may think. So why doesn't everyone invest? First of all, people are fooled by pessimists into thinking that it's a losing game.

This fear and hesitancy is the direct result of listening to people who don't know the real story.

The other reason most people aren't making a fortune on the real estate market, is that it's just so simple. The people who find great success in property investing are the ones who learn a logical system and stick to it. A systematic approach is reliable, but it's also dull, and that's why so many people forego the obvious, proven methods of making money, and get tripped up on complex, esoteric moneymaking scams. These sorts of schemes may seem more fun and dramatic than gradually building wealth through proven methods, but the problem is that they simply do not work.

Because most people think like that, those are the ideas that the media are catering to. That is why murder and mayhem is front-page news and happy things are not. That is why people slow down when they see an automobile accident and not when they see a couple holding hands. Tragedy is far more interesting. Just check out the plot line of any major motion picture. People like to believe that life is tough.

The good news is, it doesn't have to be.

If you can break the habit of thinking of life in tragic terms, of convincing yourself that there is simply not enough money to go around, then you will learn to start listening to the right people so you can develop your systematic plan for investing. And what does a systematic plan lead to? Financial success. We've established that the media and the majority of their audience are the wrong people to listen to, but who are the right people? The right people are those who have invested in property and profited significantly from those investments. People like me. Wouldn't you rather listen to someone who can tell you how you can make money, rather than to people who insist on telling you how to stay poor?

Property Investing Success Is A State Of Mind

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 13 Aug 2008 23:04:01 -0500

It's true that nearly everyone dreams of becoming fabulously wealthy at some point in their lives. Why is it then, that hardly anyone actually goes out and makes their fortune? The difference between those who become rich and those who do not is that the rich learn how money is made, and how they can make money work for them.

This may sound like an intimidatingly difficult undertaking, but it really isn't as hard as it sounds. With all of the literature and educational materials on the market for budding real estate investors, there's no reason you shouldn't be able to learn the ropes, provided that you put in the necessary hours of study. In fact, simply reading this article is a great start to the learning process that will ultimately transform you into a successful investor.

As you come closer to your goal of becoming rich, you will realize that they key to success isn't really mastery of the minutiae of accounting and all of the other details involved in the process. You can always find others more knowledgeable than you on these subjects. In reality, the trick is to look at money from the perspective of a rich person.

That's it. The fact of the matter is, you only have to get out of the habit of thinking like an employee and start thinking like an investor.

This may seem quite simple (and it is!), but the investor perspective sets the stage for you to become rich. From the employee's perspective, one must do exactly what the boss instructs, and work within the established system to earn their livelihoods. Those with this mindset always manage to get by, but if you want to do more than just get by you must obviously take a different approach.

In order to become rich, you must think of money as something that you put to work for you, not as something that you have to work for day in and day out. This is the mindset of those who really control the money.

Who are these people who are financially in control? Corporations hold a great deal of power in our society, but a corporation is an abstract concept; the money and therefore the power are really held by the businessmen who make the decisions for the corporations.

With these businesspeople in mind, you are getting closer to understanding what it really means to be in control of money, but are they really the ones in charge? Not quite; at the very top, you have the investors.

There's no question- investors have more control over money than anyone else, and that is simply because instead of viewing money as something you must work to earn, they see it as something that works for them. This concept can but put into practice by absolutely anyone, so why isn't everyone able to get rich in this manner? Well, most people remain "employees," their entire lives, never learning to look at money in a different light.

If you want to become one of the high rollers, you simply need to start investing, and real estate is an excellent place to begin. It's a relatively stable investment, and that means that the banks will actually lend you money so that you can begin purchasing properties right now.

One can't overstate the importance of learning the ins and outs of money and investing, but what it comes down to really is that you have to change the way in which you think. Once you've begun thinking rich, you need only keep working at it in order to find success.

Alexandria P. Anderson is a licensed Minnesota Realtor that offers Condos for Sale in Minneapolis to people who want to purchase Minneapolis Condos and Lofts or other properties in MN.

Real Estate in the Twin Cites - Investors and Home Buyers Can Invest In

Alex Anderson (GreatMinnesotaRealEstate.com) — Thu, 08 May 2008 17:50:57 -0500

Maybe the wealthy are frequently so successful because they've learned not to neglect the basics. Many people who see real estate investing, for instance, might harbor the misconception that successful real estate investors are simply incredibly fortunate or that they've been born with some intrinsic knowledge about investing.

That just isn't true.

What the wealthy do differently from other people, and, indeed, what all successful property investors do, is prepare. Good investors do their homework.

“The ABCs of Property Investing” author Ken McElroy tells the story of a client of his that became a client of his only after turning his investment property into an utter mess. McElroy and his company manage properties for investors. In the best case scenario, a property owner hires a property management firm immediately, rather than taking a stab at managing his property from a distance. That is what this guy did. He soon found out that the time required to do such a thing was too much for him to handle.

This was not this investor's sole error. In addition, he had neglected to even visit his investment property prior to purchasing it, so he hadn't the faintest idea it was filled with criminals. He had neglected to engage a team of real estate experts who would have gladly told him not to invest in that area, which was also filled with criminals. It was a bad place, and he should've known to stay away from it. He could, however, have avoided it easily if he had only done his homework.

It is easy to imagine the prodigious amount of money he put into the rehabilitation of the building—an expense he could've spared himself just by budgeting for the experts he needed. There was not any way to fix the neighborhood in which the building was located, therefore the building would never pull in top-dollar rent.

In nearly every case, the savvy investor cannot afford not to hire the experts.

Wealthy investors are also possessed of a staggering degree of focus. That's why they're rich. They choose a target and hone in on it until they are looking at one property. They already know what kind of investment property they want. As a matter of fact, they may make a specialty of apartment buildings or hotels or another sort of property. They always keep in mind what neighborhoods they are interested in and the age range of buildings they are willing to consider.

In the event that their preferred neighborhood does not yield any interesting leads, they move on to the next best, and onwards. But they always keep in mind what is and isn't acceptable to them.

One lesson being rich teaches people is that money opens many doors. Savvy real estate investors know you don't need to wait until a For Sale sign goes up in order to make a purchase. If a potential buyer surprises the owner of a piece of property with an offer, it's often possible to get a great price on a property that is not up for sale. Best of all, there are not any other potential buyers to drive up the price.

The rich do indeed appear to inhabit another world. For them, resources are always plentiful. They won't worry if a deal goes awry, since they are confident there will always be others. Someone who is hoping to improve his life significantly through investing might worry that he let one get away.

Ken McElroy says the best approach is to remain aloof, and to assume every negotiation will end with the potential investor leaving the table. Most supposed deals simply are not deals, McElroy said. The savvy investor understands that it's essential to become attached to closing the deal.

Successful investors know all of this, not because they were born with this knowledge, but because they've been taught, or else they've made the effort to learn. Anyone can potentially invest like the rich. It just requires research and practice.

Buy and Hold Twin Cities Real Estate

Alex Anderson (GreatMinnesotaRealEstate.com) — Thu, 17 Apr 2008 00:34:27 -0500

Buying Minnesota investment properties can appear to be a difficult issue, however that's just because there are so many choices to make. As an investor, you have an almost unlimited array of manners in which to profit. That, however, entails being able to choose wisely. You have to decide how much you'll learn regarding each element of real estate investing, who you want on your team of experts, where to seek properties, whether or not a property is a good one for you, and so on.

One question you will inevitably face is how you'll use a piece of property after you've purchased it. You might not be the type of real estate investor who wants to purchase a piece of property and keep it in your possession it for a long time. Maybe you don't want to grapple with renters and property managers or to see to the upkeep of a piece of real estate. If these things do not appeal to you in the slightest, the other option at your disposal is flipping.

Flipping a piece of property is selling it as soon as you purchase, perhaps even at the same closing. At the very latest, flippers tend to begin setting up a sale on a property the day that he or she purchases it. Some will even start the process before they even own the property, though this is risky business. However one goes about doing this, flipping inevitably entails a frantic rush to the auction block, since an empty piece of property is always a liability.

On the other hand, when you hold a piece of Twin Cities real estate, you are afforded the opportunity to increase its value. If you get a great deal, the amount you have paid for the property will likely be a drop in the bucket compared to what you stand to make off it. And when you finally decide to sell it, you will be able to do so at your convenience and get a higher price than you would have by flipping.

This is true particularly if your piece of property is a multi-family dwelling such as a high-rise apartment. If it is a good property in a good location, and you take care of it, occupancy is probably going to stay up. With a property like that, your earnings tend to increase exponentially. With good management, that is almost guaranteed.

Speaking of property management, you'll have to choose whether you will perform that function yourself or hire a management company to do that on your behalf. If you own an especially sizable property, or if you have many pieces of property, you'll want to hire a property manager. Ken McElroy, author of “The ABCs of Real Estate Investing,” advises that you hire a real estate management company so your time and effort will be used more efficiently elsewhere.

The ABCs of Real Estate Investing

Alex Anderson (GreatMinnesotaRealEstate.com) — Sat, 22 Mar 2008 01:09:22 -0500

In the nineteen eighties, in regard to dieting, periodicals would tell you to “think thin.” The magazine articles were reluctant to explain what that meant, but everyone knew that that was what they should do. Adopt the psychology of the thin person, whatever that was. A logical extension of this concept would be that if you want to make money, one would be able to accomplish that goal by adopting the mindset of the wealthy, right? Actually, this is true. In particular, you should internalize the attitude of the successful real estate investor.

Accomplished property investors see the world through an opportunistic lens. They always have their feelers out for new moneymaking opportunities. They place themselves in the way of information. They “walk the walk” of the real estate investor, so to speak. Because of this behavior, they notice things that others do not.

Ken McElroy, author of The ABCs of Real Estate Investing, which is part of the Rich Dad, Poor Dad book series, states that it's all about seeing patterns. If you check out enough pieces of real estate, explore enough areas, talk to enough people, McElroy claims, you'll start seeing these patterns. Then certain things will start to change. You may start to feel luckier. And, McElroy says, this may be luck, but it is a kind of luck that comes from being prepared.

Don't forget: “Fortune favors the prepared mind." Opportunity is all around us, but if we are blind to it, these opportunities may as well not exist. The alert mind recognizes opportunity.

McElroy stresses over and over again that being successful in real estate is a process. It isn't an event that happens one day, as in one day we're suddenly successful. It's something that you work towards each and every day. As you work through this process things begin to happen for you.

A successful real estate investor focuses on doing things step by step, on learning one subject or another, or making this particular deal. It's a “walk before you can crawl” process.

For example, McElroy says that if you have located a good deal, you will be able to get the necessary funds as other people will inevitably want their own share of the eventual profits. This isn't necessarily about skillful negotiation, he said. Clearly, skillful negotiation can net you an even more advantageous deal on occasion, however you shouldn't worry about whether you can hold your own when negotiating. Focus on looking for good deals.

Though investors are constantly evaluating risk, always aware of it, good investors are not frightened off by it. They determine whether a risk appears reasonable. If the numbers add up, McElroy says, then it is a good deal. If it is a good deal, the smart real estate investor goes ahead with it.

Easy.

People who do not know how to properly evaluate risk may believe that every deal is too risky. They assume, for example, that a bigger deal involves to great a risk for a beginner to handle. They assume that because they think the investor is sinking a prodigious amount of personal cash into it when, in truth, a larger deal stands to make a larger sum for the participants. Therefore, you may be able to find backing for this sort of deal. In the end, not have to put up as much of your own funds as you would have on a smaller transaction.

Real estate investment is similar to anything else you want to learn how to do. For one thing, you have to learn the ropes. And you learn by doing it. Go out and examine properties. Take trips to cities as though you intended to buy. Go online and educate yourself about areas. Check out what other people have to say about the real estate in a particular area. Get to know people. Before long, you will know enough to start considering actually making a deal. You don't have to have a wad of money at your disposal prior to entering the game. All you need to do is go out in the world and enjoy yourself. Everything else will come in time.

Search the Minnesota MLS Listings for investment properties in Minnesota.

Many people are mystified by real estate investing...

Alex Anderson (GreatMinnesotaRealEstate.com) — Wed, 27 Feb 2008 09:18:16 -0600

A lot of people want to be mystified. Art mystifies them, so they gasp with pleasure and compliment the creator on his skill. The sciences are mystifying to them, so they aren't even interested in what it is that researchers are really up to. Investment in real estate mystifies them, so they make the assumption that it's just a lottery and that some people are either very lucky, or that they must have been born with a gift .

They refuse to accept that success in these disciplines and most others is just a matter of breaking a process down into steps and following through. Anyone who reads the Rich Dad, Poor Dad series by Kiyosaki know that, in real estate investing, there are five essential steps necessary to succeed. Investor must:

1.Learn how to speak in the language of real estate investment. This means that you should have a working knowledge of basic accounting and finance and know how to read financial statements. These skills will give you the ability to determine whether a property is assets and potential drains. It is also vital to learn about tax law, not only in order to avoid mistakes, but also to know what the great tax deductions for real estate investors are. Understanding the fundamentals of these subjects will also make it possible for the investor to know what questions to ask his accountant and lawyers upon hiring them, and to grasp the implications of what they tell him.

2.Keep himself surrounded by experts. A successful investor will network socially in order to study the people who may wind up as members of the real estate investing team of experts which he will hire to assist him in the location and evaluation of real estate. The smart investor will familiarize himself with the community of experts in the city in which he plans to invest his money, thereby familiarizing himself with the city itself.

3.Keep a close on the markets. He should read up on various cities and see what the experts have to say about them, but additionally take a look at them himself. He should study his home city twice as ardently, if that is the place he is looking to put his money. The investor should get to know economic factors and learn which areas are good news, and which are bad news. He should find out what the rents in his marker and deduce whether or not a piece of property located in that area would assist him in reaching his financial goals. He should also make personal visits and walk through as many properties as he can with his team of experts, even if he is not prepared to buy.

4.The investor should know the right and wrong way to negotiate with a seller. Many people have the wrong idea regarding negotiating. These people are under the impression the object of each and every negotiation is reach a closing regardless of the circumstances, and to strong-arm the seller into bring to light any pertinent information about your potential purchase. If it turns out that the buyer is able to make the numbers add up in his favor, and the seller agrees to his terms of sale, that is the point at which the purchaser ought to go ahead and purchase the piece of property. If this is not true, the purchaser should refrain from closing on the deal. According to Ken McElroy, author of “The ABCs of Real Estate Investing,” the investor should go into every negotiation assuming he will walk away in the end.

5. Nurture your properties. This comprises just what you would expect. Conduct the required renovations and repairs to the property and make sure to fill any empty units. Make sure the renters' needs are addressed.

This is a streamlined version of the long road to real estate investment success, but these five simple steps demonstrate that anyone can learn to succeed in the real estate business. Nothing about it is really mystical or magical about it.

Look for Minneapolis MLS Real Estate Search or Minnesota MLS Real Estate Listings here.

What Type Of Properties Should You Invest In?

Alex Anderson (GreatMinnesotaRealEstate.com) — Sun, 10 Feb 2008 16:09:35 -0600

An important part of learning how to invest in real estate is determining what kind of property to look for. There are many choices. The investor can buy Minnesota homes, duplexes, condominiums or apartment buildings - and that's just the beginning. They can buy lots and build investment property or purchase lots and rent them outto renters who then build on them. They can make "in very good shape" a part of their search criteria, or he/she can search for something that seems to be in rougher condition than it is, in order to negotiate a good price. He/she can hunt for properties with absentee owners in the hope that he/she locates someone who's trying to put his/her property out of his/her mind because they would really like to get rid of it.

The possibilities are many. The question is, which property is the right property?

But in the end, the right property is the one that is going to make the most while not costing you an arm and a leg to be rented out. Getting a property up to speed might involve renovation to bring a building up to code - installing up-to-date appliances and that sort of thing. It might involve a fresh coat of paint, or even evicting some unwanted tenants. What the potential new buyer has to determine is, if the building's problems can be repaired.

For example, in his book Ken McElroy in his book "The ABCs of Investing," writes about a person who had bought a property without even visiting the site, and found himself stuck with several tenants who who were bad and dangerous The investment property was in a poor part of the city in which the owner should never have purchased a property. By the time he got around to contracting McElroy's property management company, he had already lost a great deal of potential rental income due to over due rental payments.

McElroy's team fixed as much as they could. Got rid of the delinquent tenants and hired security for the building, but they could do nothing about the quality of the neighborhood. The building would never be one that people with a lot of choices would want to live it, based simply on its location. This property would never command the rent that it would have if it just had been situated somewhere else. Most of the building's problems were just un-repairable.

The old adage, "Location, location, location" is very influential for a reason. Location might be the single most important factor the real estate investor needs to consider when checking out potential properties to invest in.

Aside from basic viability, an investor needs to think about how he/she wants to go about handling his/her properties. McElroy recommends that investors contract a property management company for the expertise and to free the investor to search for more investments, but some owners just prefer a more hands-on approach. That type of person should think about purchasing property that is little enough for him/her to manage on his/her own. Other people are unwilling having partners or investors and will be limited by that too. When this is the case, less expensive and smaller is probably the best option for them.

In the end, McElroy also advises that the investor not assume they should start small. If he/she has learned enough to invest in the 1st, he/she can learn how to work with OPM (other peoples' money). They should remember, however, what he/she is comfortable doing - or what he/she would consider the most enjoyable approach. The possibilities are nearly endless.