The quick money in real estate

I might make this a series on what stuff I see for sale in real estate investing on TV. This week I happen to see a guaranteed real estate return via buying tax certificates.

Let's start buy looking at is it guaranteed rate of return. Yes it is true the rate you bid and get you'll make at the end of the certificate. Why isn't it always the best thing to do? The ad claimed 16%-21% return which in some cases could be true. Usually though there is a bidding process that you need to go thru in order to get your rate of return. Basically you bid on what your interest rate that needs to be paid at the end of the certificate.

For example if you win the bid say for 18% and the amount on the tax certificate is $2200(it varies from state to state). The tax certificate you buy is what is owed in back taxes on a particular property. So when you win the bid an agree to the interest rate you have to pay $2200 in this example for the certificate to the tax authorities immediately.

You will get paid the 18%(usually this rate is a lot less), but not til the certificate is paid for by the owner. That could take a while, but you will not make anything unless the owner pays the back taxes. When they do they must pay the back taxes and your interest rate. That is when you will be paid your interest on that tax certificate.

If they don't then yes you do get the property. This does not usually happen though, but what if it does???????

If you do get the property which is rare, you are on the hook for all the properties liabilities. For example say you get a home. The home was also used cooking meth, the EPA has added a $50,000 clean up bill in order for the home to be livable. Your on the hook for that bill, in fact the EPA will probably knock on your door and personally hand it to you. You could owe thousands in utility bills. Basically everything that property encumbers your on the hook for. So getting the property is not always the best thing. You need to do research on every property you bid on.

Their is a lot to buying these type of certificates and I highly recommend you find someone in that type of business to help you if this is what you want to do.

I personally like buying the real estate and going through escrow. This is the safest investment for real estate investors. With prices as low as they are today why not go the safe route? You can take a look at homes we buy for our investors at Rooftopvideo.com.

I also believe my system is the safest to buy real estate with. Look at our system at Rooftoppofitmaxsystem.com . Brett Young Valley Realty

How long will this market last?

I'm often ask when will the real estate market turn? Great question and I'm going to do my best to answer it in this blog.

The answer I believe is lending. People need to be able to get mortgages to buy homes right? Remember all the different loans they used to have to choose from? Interest Only, Buy Down, Stated income, Straight 30 year, 15 year, no doc and many other different types.

These types of mortgages would stimulate people to actually look for properties they could buy and know that they could get the money to do it. So to me that is the answer lending must to be more available. I not saying they need to go back to those bad loans, but lending needs to be more available. They could set up 4% down-10% down-20% down deals that would help people buy their own homes.

With the economy and job market the way it is it may take a while for that to happen. The great thing about real estate is people need a place to live. Even though they may not be getting a mortgage they still need a place to live.

That is why we are doing a lot of lease options for our investors. We are finding that people still want to buy real estate and own their own home. We require $1500-$2500 down, we also get a credit check to know how long before they can re finance the home. We base the length of time of the option on that data. For example if their credit report says it will take them 12 months to get their credit repaired, we give them 12-18 months on their option. A Lease Option will get you top of the market price on your home, and the optionee will pay top rental rates for the property. No realtor commissions at when you close your property. That saves you thousands of dollars. The monthly cash flow on our properties averages $600 net a month or $7200 a year.

We do have a website set up were you can see these types of properties www.Rooftopvideo.com . Go check out some of the properties we are doing and have done. This site is jammed packed with great information for you the investor! Brett Young Valley Realty

Can you Learn Investment Real Estate in Three Days?

I always look at the different types of real estate courses that are offered in the market. I noticed one that claimed to teach you everything over a weekends retreat. That is just 3 days to learn how to do basically do everything......

I've done over 500+ homes for myself and investors, so I think I can speak as an expert on this matter. Their are so many facets in this business that have everything to do with if your going to make money in real estate in this market.

I'm going to give you a few examples that I've run into. I had an inspector in one of the cities that we rehab homes, that did not like investors. In fact he informed me it would be a very rough inspection. He wasn't kidding either..... We did get the home done on budget and time. The most important thing in this matter was we knew the city building codes and that was very important in this case. We dealt with the inspector in a very professional matter, but let him understand we know the codes. If we didn't it may have cost thousands of dollars more.

How much should it cost to ground an electrical panel? Sounds expensive doesn't it? We also had to get a Permit from the city on that. That meant we had to be licenced and bonded with the city. Prices vary, but knowing what it cost will help you not to be taken advantage of.

Another important issue is knowing whet type of property are you looking at. Rental, Flip, Lease option. Land contract property? What are the differences that you need to know to make an informative decision. What type of paperwork is needed to get the rental, Lease option, Land Contract done. Who does that? Who Picks up the your checks if you need that? What are the evictions laws? What are some things to look for in a potential tenant-buyer?

These are just a few things you will need to know to be successful in the real estate business. Seasoned investors know how to handle all aspects of these types of problems and paperwork.

So be very weary of learning everything over a weekend retreat. I'm not saying that is not a great place to start, but be careful. Look at the charges. Getting with the right company that knows what their doing should not cost you an unreasonable amount of money. Remember you can buy your own investment property for what some of these companies charge.

One last thing look at how much is it going to cost you to get a property. Most courses do not offer actually buying a investment property. That is why I set up Rooftopinvestment. We help you buy investment homes that make sense at very reasonable fees. Brett Young Rooftopinvestment.com

Video Time Look at a Real Cash Flow Property

Understanding the today market

I talk to a lot of so called gurus in this business and read a lot of articles. Their are many ways to invest in real estate and be successful. the key to your success is using the right formula for the market today. In the last 4 years the market has got much tougher and harder to navigate.



I always look for the quickest and best ways to succeed in every market. In 2004-2006 it was flip baby flip. The homes were being bid up over the asking price. In North Scottsdale the homes were going for more than the appraisals. This of course did not last and people lost their shirts in that market. We tend to focus on the massive wealth created but there was massive wealth destroyed also.



When the market stopped being a flippers market it starting being a buyers market. That means more homes than buyers. Since 2007 the market has been a buyers market.



Fast forward to today and you have a very low cost market. Prices have went down and their are some great deals out their. I have focused on the lease option market. With better than 1/2 of the buyers having bad credit the lease option was a great way to get those buyers to purchase. With a good down payment and great cash flow you can get close to the top of the market for your home.



You are really acting like a bank and they are your clients. In my area we tend to buy average priced homes and net cash flow $600 a month. We also get another $20,000-$40,000 on the spread with the lease option. All that means is the difference from what you paid versus the sales price.



Recognizing that flips are not a big part of this market and that people still want to buy homes, lease options get them homes and makes you a lot of money. Ever wonder why banks have large buildings and have great offices? They let people borrow money for a time and make interest on that borrowed money.



In lease option you play both Bank and Investor. You get the best of both worlds buy making a great cash flow(interest) and a great profit on your sale (exercised lease option). Making money in this market is possible if you understand it. Brett Young Rooftopvideo.com

When will the Real Estate Market Turn?

Everyone is wondering when the real estate state market will get back to normal? I am often asked that very question and I also ask it myself.



There area a few variables to watch.



Have prices of homes bottomed out? I think in most markets they have. I know in the Cleveland market the prices have stayed consistent for a few years now. That probably means that the market in the Cleveland Area has stabilized (wholesale prices). So before buying watch the whole prices of the real estate your thinking of buying.



Unemployment will also be a great factor. I'm not talking nationally or small to medium sized city. The bigger cities is what you want to watch Cleveland, Phoenix. New York, Chicago Etc etc. They will have the biggest swing upward when the market turns. I know in the Cleveland area we are have an employment rate around 8%. Make sure the city your considering is under the national unemployment average.



Cost of living is another factor. What does it cost people to live in the area you are looking at. Cost of living in the Ohio area is very low. You can live in a nice home in a great area for $70,000-$150,000. The area will dictate where you spend the most.



The cost of living becomes a greater figure as unemployment goes up. For example I talk to a lot of people in the Phoenix area and they know people that have their boxes packed waiting for foreclosure. Very sad, but when your going to invest know the area and the employment will sustain the cost of living.



The last thing and I think the most important thing is Lending. The access to money will need to be loosened up for this market to turn. I not saying it needs to go back to the foolishness that they did in the big boom. The lenders will need to have 5%-20% down loans and lower the amount on mortgage for lower mortgage amounts. For example $40,000-$50,000 mortgages are hard to get. Banks have not done that yet.



A great way to get a watch the lending is to go to your local bank and ask them about the market and is it changing? I went as far as asking a small business man that I noticed changed his fast food restaurants name. It was a fast food place that I regularly frequent for coffee. I ask the owner why the name change? He informed me that even though he had excellent credit the bank would not give him any of the money he needed.



The upswing on a down market is the buys are great and the cash flow should be at least 18% or better. In my market that is the case and investors are patient with that kind of cash flow. When the market turns and it will you can decide to hold or sale. Brett Young www.Rooftopinvestment.com

Better Know Where You Are Buying

Some real estate investment companies sell some very low priced homes that show some great returns. These property need some careful consideration before you jump in head first to buy them.



I have a potential client here from Australia, we picked him up on Friday to go some properties that we were recommending. He immediately showed a address of a property that was recommended to him(Tim is his name). We drove Tim over to the property that he had given us to see, he noticed a big drop in quality of the area. Yes he may get a great return (maybe), the problem would be the quality of tenant and the turn over of tenants in that area. Not to mention the constant rehab that will be needed to keep that property up to snuff.



That is always a bigger problem with having a these type of properties. The first and foremost is getting your cash flow consistently . The other would be maintenance of the property. That could eat up all your cash flow and be a big pain in the rear. When the market turns these types of properties tend do not sell very fast.



We had some more clients in and they were bragging how great a buy a friend of theirs got on Ebay. That is right Ebay! We drove them to the property and they too saw that it was a horrible area. In fact we had to leave a large person to guard our vehicle to even go get a peak of the property. I instructed them they would be better off to just write off the purchase.



When you are buying real estate keep in mind the area's you are buying in. There are great deals out there that get great cash returns. We have some that cost south of $40,000 rehabbed that will get a 18% return or better! We carefully pick our properties and understand what neighborhoods and schools will draw the best tenants.



Let me give you an example we have with a client. His property has been rented for 4 years and he has netted $620 per month over those 4 years. That's over $28,000 net profit. He only paid $40,000 for that property. We have many other examples but in the essence of time.



There has never been a better time to invest in real estate. Just make sure you understand what type of property you are buying and where it is.



Check out some of our properties at Rooftopvideo

Brett Young Valley Realty Rooftopinvestment.com