A few weeks ago, the first part of this series, "Getting Started", http://activerain.com/blogsview/684869/Investing-in-Real-Estate-Getting-Started-1 gave you an overview of the eight different types of real estate investments.  Today we are going to learn more about this category. What this investment is:  A synthesis of the fix and flip and rental operations - purchasing an apartment building in a neighborhood dominated by owner occupants, then converting the building from apartment building to condominium.  Often requires renovation of the units to meet the expectations of owner-occupant buyers in that area.  Complex and time consuming, but has wonderful tax advantages compares to fix and flips and often has superior returns to all other asset classes.  Ideally suited for the sophisti... 11/19/2008

A few weeks ago, the first part of this series, "Getting Started", http://activerain.com/blogsview/684869/Investing-in-Real-Estate-Getting-Started-1 gave you an overview of the eight different types of real estate investments.  Today we are going to learn more about this category. What this investment is:  Purchasing a small home in an expensive neighborhood that may or may not need work.  The home is bulldozed and a new home or duplex is put on the lot.  Alternatively, the existing home is renovated and more square footage is added on.  A pop-top is adding a second story to an existing home to add more square footage (commonly, a master bedroom suite). Equity needed:  Being able to document your income and your assets will be critical.  For a commercial loan, your net worth should gene... 11/19/2008

There are some signs of strengthening in our Denver market.  The metro area's inventory of available resale housing decreased 20% to 23,120 units in October from October 2007.  Some of this reduced inventory is attributed to homeowners taking their properties off the market in frustration because their property is not selling, but lower inventory implies a strengthening market.  Remember, the Denver area had housing inventory of 31,989 units in July 2006. Home sales rose 14% to 4,265 in September compared to the same month last year.  This is due almost entirely to the lower-end of the market (under $180K) selling like hotcakes. October's median selling price for single-family homes decreased 12% to $206,000 from the same month of '07, and was down 4.7% from September's median of $216,1... 11/19/2008

A lot of clients ask me how to figure out what market rents are in a neighborhood. This is a critical input into the calculations an investor needs to make in order to determine what their return on investment will be on a rental property. So you don't want to screw this up! Unfortunately, this is one of the many figures new investors get wrong. One place people go to get rents is Rent-o-Meter. Rent-o-Meter is billed as an online resource to get accurate market rents. In my experience it is anything but! However, I have a fairly simple solution. Multiply what you see on Rent-o-Meter by 80% and you'll probably be close. I can't explain why but I find rents on Rent-o-Meter to be about 25% high, so multiplying their rents by 80% will get you close (do the math, it works out). So then, how ... 11/19/2008

The talk around the water cooler these days is all about LOANS. Who can get them? At what price? What if I already have a few loans, do I still qualify?  A year or two ago the question was at what price do I get a loan (those were the days!).  Today it is "am I still in the game?"        Here's the deal:  if you have an owner occupied loan and 3 investor loans you cannot buy any more properties and get Fannie Mae / Freddie Mac financing, meaning you can't get a conventional 30-year fixed loan. Now, my hope is that someone reads this and tells me I'm wrong. That would be great!  But as far as I know that is the case.       Where does this leave you?  You can pursue loans that are warehoused by lenders, meaning they are not sold on the backend to Fannie or Freddie. You are probably lookin... 11/19/2008

A few weeks ago, the first part of this series, "Getting Started", http://activerain.com/blogsview/684869/Investing-in-Real-Estate-Getting-Started-1 gave you an overview of the eight different types of real estate investments.  Today we are going to learn more about this category. What this investment is:  Purchase of a residential property to be rented out to tenants, usually on a 6-12 month lease term.  This is how most new landlords get started.  You can hire out all of the property management functions, but in many cases you will do many of them on your own.  There are smaller down payment requirements than for larger rental buildings.  The purchase process and financing process is very similar to what you experienced buying the home you live in now.  It's a great way for beginners ... 11/19/2008

A few weeks ago, the first part of this series, "Getting Started", http://activerain.com/blogsview/684869/Investing-in-Real-Estate-Getting-Started-1 gave you an overview of the eight different types of real estate investments.  Today we are going to learn more about this category. What this investment is:  Purchase of duplex, triplex or quadplex to be rented to tenants, usually for 6-12 month terms.  Usually what the rental home / condo landlords graduate to.  In most markets they cost a little more than a rental home, but are much more likely to cash flow on the average month.  Less cash flow risk; if one unit is empty you have other tenants that still help you with the mortgage payment so it doesn't all come out of your pocket.  Many owners will start to delegate some of the property ... 11/19/2008

A few weeks ago, the first part of this series, "Getting Started", http://activerain.com/blogsview/684869/Investing-in-Real-Estate-Getting-Started-1 gave you an overview of the eight different types of real estate investments.  Today we are going to learn more about this category. What this investment is:  Still targeting tenants for 6-12 months at a time, buildings with more than five units are considered "commercial" property.  The loans are more difficult to qualify for, and usually a larger down payment is needed.  Uncommon for the new investor; this is usually what landlords with several years of experience "trade up" to.  Cash flows on larger buildings are more stable than for smaller buildings, and the economies of scale make it practical (and desirable) to hire a property manage... 11/19/2008

 A few weeks ago, the first part of this series, "Getting Started", http://activerain.com/blogsview/684869/Investing-in-Real-Estate-Getting-Started-1 gave you an overview of the eight different types of real estate investments.  Today we are going to learn more about this category.  What this investment is:  A lease option (L/O) is Acquiring control of a property (though not necessarily ownership), then leasing the property to a tenant.  The lease is bundled with an option, so the tenant can (but does not have to) purchase the property for a given price within a given time frame.  Again you are seeking a tenant for a property, but usually for a slightly longer term (12-18 months) and frequently (though not always) with the goal that the tenant purchase the property from you at the end o... 11/19/2008

A few weeks ago, the first part of this series, "Getting Started", http://activerain.com/blogsview/684869/Investing-in-Real-Estate-Getting-Started-1 gave you an overview of the eight different types of real estate investments.  Today we are going to learn more about this category. What this investment is:  Purchasing a home that needs work.  The scope can range from the basic "paint and carpet" to extensive overhauls to scraping a decrepit property and completely starting over.  Usually does not involve tenants, and the objective is to get in and out of the property as quickly as possible.  Great for beginners with the right skill sets or the willingness to learn. Equity needed:  With hard money loans (defined in next paragraph), potentially 0% and they'll finance the construction costs... 11/19/2008

A few weeks ago, the first part of this series, "Getting Started", http://activerain.com/blogsview/684869/Investing-in-Real-Estate-Getting-Started-1 gave you an overview of the eight different types of real estate investments.  Today we are going to learn more about this category. What this investment is:  Purchasing a small home in an expensive neighborhood that may or may not need work.  The home is bulldozed and a new home or duplex is put on the lot.  Alternatively, the existing home is renovated and more square footage is added on.  A pop-top is adding a second story to an existing home to add more square footage (commonly, a master bedroom suite). Equity needed:  Being able to document your income and your assets will be critical.  For a commercial loan, your net worth should gene... 11/19/2008

There are some signs of strengthening in our Denver market.  The metro area's inventory of available resale housing decreased 20% to 23,120 units in October from October 2007.  Some of this reduced inventory is attributed to homeowners taking their properties off the market in frustration because their property is not selling, but lower inventory implies a strengthening market.  Remember, the Denver area had housing inventory of 31,989 units in July 2006. Home sales rose 14% to 4,265 in September compared to the same month last year.  This is due almost entirely to the lower-end of the market (under $180K) selling like hotcakes. October's median selling price for single-family homes decreased 12% to $206,000 from the same month of '07, and was down 4.7% from September's median of $216,1... 11/19/2008

As reported today by Credit Suisse , it is projected that 6 million home owners will file bankruptcy in the next year. That means 1 of 8 mortgages will be out of there home. If this is the case we will have so many homes on the market that we could not reverse this process for maybe 10 years. The democrats are proposing some legislature that will not pass until Obama and his crew take over that may even make things worse. They are only proposing based on trying to make it seem they are doing something when it's obvious their plan will make things even worse. SO hold on, socialism and the ways of the left will put us in an even greater down spin. It's similarar to what we are seeing from the left and the bail out of a failing auto industry. They want to throw money at a bad business that... 11/19/2008

There are some signs of strengthening in our Denver market.  The metro area's inventory of available resale housing decreased 20% to 23,120 units in October from October 2007.  Some of this reduced inventory is attributed to homeowners taking their properties off the market in frustration because their property is not selling, but lower inventory implies a strengthening market.  Remember, the Denver area had housing inventory of 31,989 units in July 2006. Home sales rose 14% to 4,265 in September compared to the same month last year.  This is due almost entirely to the lower-end of the market (under $180K) selling like hotcakes. October's median selling price for single-family homes decreased 12% to $206,000 from the same month of '07, and was down 4.7% from September's median of $216,1... 11/18/2008

This blog will discuss a type of real estate investment, scrapes, pops and new construction, in the Alameda Hills area in Denver.   What this investment is:  Purchasing a small home in an expensive neighborhood that may or may not need work.  The home is bulldozed and a new home or duplex is put on the lot.  Alternatively, the existing home is renovated and more square footage is added on.  A pop-top is adding a second story to an existing home to add more square footage (commonly, a master bedroom suite).   Equity needed:  Being able to document your income and your assets will be critical.  For a commercial loan, your net worth should generally be at least as much as the loan you are seeking.  The good news is that the commercial loan usually does not show up on your credit report, so... 11/18/2008

This blog will discuss a type of real estate investment, fix and flips, in the Alameda Hills area in Denver.   What this investment is:  A synthesis of the fix and flip and rental operations - purchasing an apartment building in a neighborhood dominated by owner occupants, then converting the building from apartment building to condominium.  Often requires renovation of the units to meet the expectations of owner-occupant buyers in that area.  Complex and time consuming, but has wonderful tax advantages compares to fix and flips and often has superior returns to all other asset classes.  Ideally suited for the sophisticated investor with extensive experience.    Equity needed:  Being able to document your income and your assets will be critical.  For a commercial loan, your net worth sh... 11/18/2008

This blog will discuss a type of real estate investment, fix and flips, in the Alameda Hills area in Denver.   What this investment is:  Purchasing a home that needs work.  The scope can range from the basic "paint and carpet" to extensive overhauls to scraping a decrepit property and completely starting over.  Usually does not involve tenants, and the objective is to get in and out of the property as quickly as possible.  Great for beginners with the right skill sets or the willingness to learn.   Equity needed:  With hard money loans (defined in next paragraph), potentially 0% and they'll finance the construction costs, too.  Expect a LOT of strings to be attached.  A small local lender might give you 75% of the purchase price and the renovation budget, and the terms will be a lot mor... 11/18/2008

This blog will discuss a type of real estate investment, lease options, in the Alameda Hills area in Denver.   What this investment is:  A lease option (L/O) is Acquiring control of a property (though not necessarily ownership), then leasing the property to a tenant.  The lease is bundled with an option, so the tenant can (but does not have to) purchase the property for a given price within a given time frame.  Again you are seeking a tenant for a property, but usually for a slightly longer term (12-18 months) and frequently (though not always) with the goal that the tenant purchase the property from you at the end of the lease.  If you purchase the property, then it's an easier process; if you find a highly motivated seller to let you re-lease the property to another tenant, it can be ... 11/18/2008

This blog will discuss a type of real estate investment, large apartment buildings, in the Alameda Hills area in Denver.   What this investment is:  Still targeting tenants for 6-12 months at a time, buildings with more than five units are considered "commercial" property.  The loans are more difficult to qualify for, and usually a larger down payment is needed.  Uncommon for the new investor; this is usually what landlords with several years of experience "trade up" to.  Cash flows on larger buildings are more stable than for smaller buildings, and the economies of scale make it practical (and desirable) to hire a property manager to take over most the work for you.  This takes reduces the hassle factor of the landlord process.    Equity needed:  Being able to document your income and ... 11/18/2008

 This blog will discuss a type of real estate investment, small apartment buildings, in the Alameda Hills area in Denver.   What this investment is:  Purchase of duplex, triplex or quadplex to be rented to tenants, usually for 6-12 month terms.  Usually what the rental home / condo landlords graduate to.  In most markets they cost a little more than a rental home, but are much more likely to cash flow on the average month.  Less cash flow risk; if one unit is empty you have other tenants that still help you with the mortgage payment so it doesn't all come out of your pocket.  Many owners will start to delegate some of the property management tasks to an on-site assistant (typically the most responsible tenant), such as yard maintenance and showing empty units.  The financing process is ... 11/18/2008