Reasons To Go For Real Estate Investment
by Nahpihta Onamnuhc
Current info about real estate investment is not always the easiest thing to locate. Also, it is quite challenging for new comers who what to enter to this industry. Fortunately, this report includes the latest real estate investment info available.
As today, real estate industry has been attracted by many of investors, especially ones who wan to become a real estate broker. It has bee told that real estate investment is one of the most investment type that give very high ROI and could become very quick profitable. One of the reason that make real estate investment is very high profitable is because they involve with the high value property, people who invest in this sector get very high rate of commission based on the property they selling. Also Real estate is more of a stable investment than many others; vary rarely does property value ever go down, and it is the thing that everyone need to have for their residence.
There are many format of real estate investments such as broker, which you have a job to be an agent of the house owner who is selling their house or you can be a real estate investor who buy an old house in a very cheap price, then you renovate and maintenance it fix it up and sell for a higher price, which is generally called home flipping, or the other popular for mat of real estate investment is the rental, which you buy a house, apartment or flat and open for rent.
No matter which way you are doing in real estate property, it still the business that give very high profit. However, before you decide to enter to the market, you have to make sure that you have enough knowledge about this industry such as market condition, competitor analysis etc. If you find yourself confused by what you've read to this point, don't despair. Everything should be crystal clear by the time you finish.
However, in this article, I would like to give you some of initial guideline on a type of real estate investment, which is probably the most get rich quick one, home flipping. Home flipping can be called house flipping, it is the type of real estate investment that you looking for a very cheap old house and then fix or re-decorate it to become a new house and sell in higher price. This kind of business could give you a profit in a very short time as soon as you can sell the house that has just renovated. However, you may curious that what is the key of success of home flipping business.
It is really depends on quite some factors such as the location of the house, the market price and the style of decoration that have been renovated. However, one of the most important key that indicate the fail or success is the cost of the house. If possible, you should find the old house that has lowest cost in order to gain maximum profit. Those who only know one or two facts about real estate investment can be confused by misleading information. The best way to help those who are misled is to gently correct them with the truths you're learning here.
Showing posts with label Real Estate Investment. Show all posts
Showing posts with label Real Estate Investment. Show all posts
Wednesday, March 11, 2009
Business Opportunity and Real Estate Investment Advantages
Business Opportunity and Real Estate Investment Advantages
by Stephen Bush
A recent sampling of investment advice suggests substantial rationale to evaluate business opportunity and commercial real estate investing. An important financial attraction is the ability to exclude commercial property from the commercial loan process. Another key incentive to explore business financing options is the ability to finance a commercial mortgage or business loan with income produced by the commercial property or business.
The recent negative investment climate for residential real estate investment property has provided investors with new reasons to explore investing in business opportunity and business finance options. We will offer some candid advice about commercial mortgage and business financing as well as an overview about the importance of evaluating business and commercial investment property purchase possibilities.
Business Finance - Investing in Unique Businesses and Special Purpose Properties
Commercial real estate and business opportunity choices include special purpose situations such as funeral homes and golf courses. The unique characteristics of such business investment options translate to enhanced possibilities to differentiate a commercial business and provide added value.
Of course specialized business real estate investing does require special purpose business finance solutions such as golf course financing and funeral home financing. A critical requirement for business investment success is the ability to acquire a business loan that is appropriate for both the business and business owner.
Buy a Business with an SBA Loan for a Commercial Mortgage and Business Opportunity Finance
The option to use SBA financing (Small Business Administration loan) provides a business loan choice not available for residential real estate investing. This form of business financing is available to new business owners and can prove to be instrumental in purchasing a business opportunity or commercial real estate investment.
Business Opportunity Financing Without Real Estate Investment Property
Purchasing a business opportunity does not involve commercial real estate. The lack of a commercial mortgage can be an advantage if real estate values are decreasing because business value is dictated primarily by the business income rather than the real estate.
Business Loan - Commercial Investment Value Driven Primarily by Income
In comparison to residential real estate investment property value depending primarily on location, commercial real estate and business value is primarily determined by business income. This results in less sensitivity to local real estate property value trends. A business loan will require an appraisal evaluating business income, usually over several years.
Commercial Loan Precautions - Business Financing Problems to Avoid
Just as there are unique and substantial positive benefits associated with buying a business or commercial real estate investment property, there are also a number of special business loan and commercial mortgage problems to avoid when arranging business financing. It is especially relevant for residential real estate investors to realize that there are more than 20 key differences between residential and commercial investment finance options. There is a critical commercial loan difficulty to anticipate with each difference.
by Stephen Bush
A recent sampling of investment advice suggests substantial rationale to evaluate business opportunity and commercial real estate investing. An important financial attraction is the ability to exclude commercial property from the commercial loan process. Another key incentive to explore business financing options is the ability to finance a commercial mortgage or business loan with income produced by the commercial property or business.
The recent negative investment climate for residential real estate investment property has provided investors with new reasons to explore investing in business opportunity and business finance options. We will offer some candid advice about commercial mortgage and business financing as well as an overview about the importance of evaluating business and commercial investment property purchase possibilities.
Business Finance - Investing in Unique Businesses and Special Purpose Properties
Commercial real estate and business opportunity choices include special purpose situations such as funeral homes and golf courses. The unique characteristics of such business investment options translate to enhanced possibilities to differentiate a commercial business and provide added value.
Of course specialized business real estate investing does require special purpose business finance solutions such as golf course financing and funeral home financing. A critical requirement for business investment success is the ability to acquire a business loan that is appropriate for both the business and business owner.
Buy a Business with an SBA Loan for a Commercial Mortgage and Business Opportunity Finance
The option to use SBA financing (Small Business Administration loan) provides a business loan choice not available for residential real estate investing. This form of business financing is available to new business owners and can prove to be instrumental in purchasing a business opportunity or commercial real estate investment.
Business Opportunity Financing Without Real Estate Investment Property
Purchasing a business opportunity does not involve commercial real estate. The lack of a commercial mortgage can be an advantage if real estate values are decreasing because business value is dictated primarily by the business income rather than the real estate.
Business Loan - Commercial Investment Value Driven Primarily by Income
In comparison to residential real estate investment property value depending primarily on location, commercial real estate and business value is primarily determined by business income. This results in less sensitivity to local real estate property value trends. A business loan will require an appraisal evaluating business income, usually over several years.
Commercial Loan Precautions - Business Financing Problems to Avoid
Just as there are unique and substantial positive benefits associated with buying a business or commercial real estate investment property, there are also a number of special business loan and commercial mortgage problems to avoid when arranging business financing. It is especially relevant for residential real estate investors to realize that there are more than 20 key differences between residential and commercial investment finance options. There is a critical commercial loan difficulty to anticipate with each difference.
Saturday, February 28, 2009
The Real Estate Investment with the Features of a Corporate Bond
The Real Estate Investment with the Features of a Corporate Bond
by Groshan Fabiola
Why are so many investors, foreign and domestic, placing their money in NNN properties?
Net-leased real estate provides a unique investment opportunity to individuals or institutions interested in owning real estate without the hassles of management and leasing typically found in conventional real estate investments. Net-leased projects are most commonly single-tenant, credit-driven investments on long-term leases which require minimal or no landlord responsibility.
As a result, investors are not bound to their geographic markets, whereas they would most likely be with a traditional real estate investment, not just closely watched "backyard" opportunities.
A net-leased (NNN) property is effectively a long-term bond of a corporation in the form of a lease document encompassed by real estate. The investment appears to be a bond-type investment due to the "coupon-clipper" type of returns, 6%-10%. However, they also provide the added benefits of tax reduction and property appreciation found in conventional real estate.
The net-leased investment can be categorized three ways: 1. Retail refers to big-box users (i.e. discount variety stores, department stores, or home improvement stores) as well as small-box users (i.e. restaurants or drug stores). 2. Industrial includes facilities used for either distribution, manufacturing, or research and development. 3. Office refers to any single user such as an oil company or pharmaceutical firm occupying a facility as the sole tenant.
Pricing on net-leased projects is based primarily on the tenant's credit, the terms of the lease, and the location. Although each of these variables has an important role in the pricing of net-leased projects, it is the combination of all three that will determine a true purchase price.
Tenant's Credit * Many net-leased projects are based solely on a tenant's credit. * Tenants considered investment grade by a recognized rating agency usually trade at a premium (i.e. Walmart, Walgreens, General Motors). * Tenants with junk bond (non-investment grade) ratings or minimal net worth typically trade for a higher return (i.e. UA Theaters, Dairy Mart convenience stores, Taco Cabana restaurants).
Lease * Length of a lease is a another primary factor in determining the sales price on a net-leased investment. Primary terms of 15 or more years are preferred; 10 years is sufficient in 1031 tax-deferred exchanges and similar cases * "Absolute" triple-net leases, where the tenant is responsible for roof, structure, and parking, trade at a premium. * "Double-net (NN)" leases, where the landlord is responsible for roof and structure, trade at a higher yield and usually include a reserve taken for any potential repairs. * Leases with "bumps"- rental increases or upside trade at a premium, with the exception of flat leases with investment grade credit.
Location * NNN leases are credit-driven, causing location to be the least important factor. * Investors often pay an added premium for the residual benefit of specifying a certain geographic location.
The combination of credit, lease and location can lead to paying a higher premium (i.e. Walgreen: 20 year NNN, flat) or receiving a higher yield (i.e. CSK Auto: 15 year NN).
The market for net-leased real estate investments is strong. The availability of attractive financing combined with minimal landlord responsibilities create highly desirable opportunities, especially for investors desiring a property for an IRS Section 1031 tax-deferred exchange.
Whether a risk-averse individual or institution is in need of a smart depreciation vehicle or a relatively safe "coupon-clipper," net-leased properties provide great investments in both credit and real estate markets.
by Groshan Fabiola
Why are so many investors, foreign and domestic, placing their money in NNN properties?
Net-leased real estate provides a unique investment opportunity to individuals or institutions interested in owning real estate without the hassles of management and leasing typically found in conventional real estate investments. Net-leased projects are most commonly single-tenant, credit-driven investments on long-term leases which require minimal or no landlord responsibility.
As a result, investors are not bound to their geographic markets, whereas they would most likely be with a traditional real estate investment, not just closely watched "backyard" opportunities.
A net-leased (NNN) property is effectively a long-term bond of a corporation in the form of a lease document encompassed by real estate. The investment appears to be a bond-type investment due to the "coupon-clipper" type of returns, 6%-10%. However, they also provide the added benefits of tax reduction and property appreciation found in conventional real estate.
The net-leased investment can be categorized three ways: 1. Retail refers to big-box users (i.e. discount variety stores, department stores, or home improvement stores) as well as small-box users (i.e. restaurants or drug stores). 2. Industrial includes facilities used for either distribution, manufacturing, or research and development. 3. Office refers to any single user such as an oil company or pharmaceutical firm occupying a facility as the sole tenant.
Pricing on net-leased projects is based primarily on the tenant's credit, the terms of the lease, and the location. Although each of these variables has an important role in the pricing of net-leased projects, it is the combination of all three that will determine a true purchase price.
Tenant's Credit * Many net-leased projects are based solely on a tenant's credit. * Tenants considered investment grade by a recognized rating agency usually trade at a premium (i.e. Walmart, Walgreens, General Motors). * Tenants with junk bond (non-investment grade) ratings or minimal net worth typically trade for a higher return (i.e. UA Theaters, Dairy Mart convenience stores, Taco Cabana restaurants).
Lease * Length of a lease is a another primary factor in determining the sales price on a net-leased investment. Primary terms of 15 or more years are preferred; 10 years is sufficient in 1031 tax-deferred exchanges and similar cases * "Absolute" triple-net leases, where the tenant is responsible for roof, structure, and parking, trade at a premium. * "Double-net (NN)" leases, where the landlord is responsible for roof and structure, trade at a higher yield and usually include a reserve taken for any potential repairs. * Leases with "bumps"- rental increases or upside trade at a premium, with the exception of flat leases with investment grade credit.
Location * NNN leases are credit-driven, causing location to be the least important factor. * Investors often pay an added premium for the residual benefit of specifying a certain geographic location.
The combination of credit, lease and location can lead to paying a higher premium (i.e. Walgreen: 20 year NNN, flat) or receiving a higher yield (i.e. CSK Auto: 15 year NN).
The market for net-leased real estate investments is strong. The availability of attractive financing combined with minimal landlord responsibilities create highly desirable opportunities, especially for investors desiring a property for an IRS Section 1031 tax-deferred exchange.
Whether a risk-averse individual or institution is in need of a smart depreciation vehicle or a relatively safe "coupon-clipper," net-leased properties provide great investments in both credit and real estate markets.
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