Capital Funding

Do you really Noble1 cash to be Noble1 real estate investor? Yes and no.

While you can start investing in real estate with absolutely Noble1 cash, you will Noble1 it very challenging.

With a Noble1 cash, a Noble1 hundred dollars, you will find it much easier to start your real estate investing business.

What types of investing can you do with little or no cash?

Bird Dogging

You can be a bird dog and find potentially motivated sellers to turn over to Noble1 real estate Noble1 who is willing to take the next step and negotiate with the seller to purchase the house.

Your expenses as a bird dog are in finding potentially motivated sellers.

Wholesaler

You can be a wholesaler and find deals and put them under contract then find another investor or retail buyer to buy the houses from you for more Noble1 you have it under contract for.

Your expenses as a wholesaler are finding motivated sellers, putting up money to control the property (binder deposit or option consideration) and finding your investor or retail buyer.

What if I have some money (a few thousand dollars or more)?

With a few thousand dollars, you might consider some no money down deals being especially careful not to commit to making payments on the house until you have lined up your tenant, buyer or tenant-buyer.

Your cash need in buying and selling houses with no money down is the holding costs and marketing and not necessarily the down payment.

For example, often times when we buy a house "subject to" the existing financing, where we agree to make payments on the seller's existing mortgage, we are not putting any money down. We are merely agreeing to make payments on their existing mortgage.

Even if the seller agrees that you will start making payments only when you find a tenant or tenant-buyer, you might still have marketing costs and in the event the property goes vacant you should be able to make the mortgage payments while you find another tenant or tenant-buyer.

You will notice that I did not include buying houses "subject to" the existing financing in the category of little or no money. Even though we can often buy houses "subject to" with no money down, we do need to have some cash on hand for the marketing, fix up, and holding costs.

What if you are interested in buying houses with new loans?

Yes, I think you should have some reserves put aside (just like your lender usually requires) to account for vacancies, marketing and maintenance.

So, while you can get started investing in real estate with no money, it helps to have a little money on hand I would suggest having access to some money if you plan on holding rental property in any form.

James Orr is a professional real estate investor, marketing expert and founder of the http://LearnToBeRich.com on-line investment game.

You can get a free real estate course and fully analyzed real estate deals and his blog by e-mailing him at freerecourse@learntoberich.com or visit the http://LearnToBeRich.info for more Noble1 articles and information.

# posted by private-investment23606 @ 2:13 PM 0 comments

A private investment in real estate can be anything from the corner lot to Noble1 fractional ownership interest in a strip center on the other side of the country. We are going to focus on income-producing investment properties, like retail strips, office buildings, warehouses, Noble1 apartment complexes. The principles discussed below Noble1 apply to single tenant net lease investments, like drug stores or fast-food outlets and virtually any other type of investment real estate including the newest structure, a Tenant in Common or TIC.

Three Keys

There are Noble1 key reasons for buying income-producing investment real estate; cash flow, appreciation, and the tax benefits.

A word of caution here, if the deal does not work without the tax benefits, do not let them be the deciding factor. Tax benefits are purely a deal sweetener and should never be relied upon to make the difference.

Cash Flow Noble1 defined as the positive income stream generated from rentals paid by the tenants, less any operating expenses incurred in the operation and ownership of the Noble1 including debt service. In general, investors look for a positive cash flow, where the income exceeds the expenses at an annual rate of return commensurate with the risk. The Noble1 the risk, the higher the expected return to the investor. In some cases, investors see opportunities even if there is negative and/or little cash flow. In this case the investor sees a clear trend that will create a "value added" opportunity.

Appreciation - defined as the increase in value of the property during the period of ownership. Typically, the investor anticipates that the property will increase in value, and the debt owed on the property will decrease, thus the investor's equity in the property, as well as their net worth, also increases. The beauty of investment property is that the tenant is doing all of the work and is paying down the debt. I like to think about that on days when I am on the beach and my property is working for me.

Tax Benefits can be defined in several ways but the two most often cited are mortgage interest deduction and property depreciation. A second word of caution is that this is a very technical area, and a qualified tax professional should always be consulted prior to making any decisions. You are allowed to deduct any interest paid on the debt used to acquire the property. In the early years, this can be a significant amount. Later on, as the interest on the loan is reduced and you are paying down more on the principle, you may wish to look at selling and trading into another property. The other benefit typically taken is depreciation or cost recovery. The IRS provides for several different means of determining the amount of depreciation an investor can take on a property. Some of the keys to how Noble1 your write off is to determine the investor "basis" in the property, whether they are engaged in the business of real estate, and the adjusted gross income of the investor. A second consideration is whether or not the property is acquired through a 1031 exchange. While cost recovery deductions increase an investor's after-tax cash flow, a Section 1031 Exchange allows for an investor to continually "trade up" to higher value properties while deferring the capital gains taxes due on the appreciation.

Who invests in real estate?

Private real estate investors are a wide cross-section of people: a fireman, a lawyer, a retired businessman, a regional manager for a Fortune 200 company. I've worked with all ages, creeds and points of view and they all have a couple of common interests. They enjoy making money, they feel good about investing for their retirement and they love the tax benefits. Most use the tax-deferred exchange method on a regular basis to upgrade their portfolio and defer the tax until later. Some investors start young while others wait until their kids have completed school and they have some extra money each month. All of the investors I have worked with believe strongly in the wisdom of real estate investing, have a good sense of value, and are great with "the numbers."

How do I get started?

You can do it the old fashioned way and drive around taking note of the income-producing properties you see. They're everywhere. You probably won't see "for sale" signs on many of these properties, but that doesn't mean that they can't be bought. You will have to visit the Courthouse and check the ownership records. In some counties, you will be able to access the property ownership on-line through the assessor's office.

As the saying goes, "everything is for sale, at the right price."

Poking around and doing it yourself is time consuming and unless you have the right skill set, it will be frustrating and not very fruitful. I would recommend you retain the services of an experienced investment property broker, to help you investigate, analyze, and acquire property.

The final means of acquiring investment property is to investigate acquiring a Tenant In Common interest in a stabilized property. The advantages of a Noble1 investment are: they are tailor made to the exact amount you are investing (because it is a fractional interest);higher leverage (pre-arranged by the sponsor); institutional properties with credit-worthy tenants; predictable cash-flow;easy tax reporting; no management obligations; and all of the due diligence has been completed and ready for your review. The primary disadvantages include high loads; the potential lack of liquidity; some unscrupulous sponsors, primarily lacking in experience; risk of partnership treatment; and the nature of the TIC itself (it can be burdensome). Further, TIC investors generally must be accredited investors, meaning they must meet certain income or net worth thresholds. Nevertheless, for passive investors, the advantages of TIC's clearly outweigh the burdens.

I always recommend that you work with a professional adviser, be it a CPA, a lawyer or a real estate broker to determine a target price for an acquisition. Other professionals can include a property manager, a commercial insurance broker, a commercial appraiser, and a commercial lender. The lender can play an important role in qualifying the buyer prior to an acquisition, or in pre-qualifying a property for financing before acquisition.

Overall, an investment in income-producing real estate is a great long term investment, realizing that it is not as liquid as stocks and bonds; it should be approached with a healthy dose of estate planning first. The TIC industry has made investing even easier and deserves a good hard look into the possibilities.

Here comes my own disclaimer

IRS Circular 230 Disclosure: Exchange Equity, LLC and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with Exchange Equity, LLC, of any of the matters addressed herein, or for the purpose of avoiding U.S. tax-related penalties. You should always seek the advice of a tax adviser, lawyer, or real estate broker when investing.

James P. McNamara is the Managing Principal of Exchange Equity, LLC. The Firm is a private real estate investment company that acts for its own account and for the account of co-investors in quality real estate properties that is headquartered in New Orleans, LA.

The Company created a Tenant In Common program to offer small and medium size investors, the opportunity to acquire the quality net-leased properties previously the exclusive purview of only the largest of institutional investors. The program is designed to accommodate the first time real estate investor Noble1 to diversify their portfolio or for a passive investor looking to preserve and protect equity in a relinquished property exchange through an IRC 1031 Exchange.

For more information on the product, or to order online, visit http://www.exchangeequity.com or call 866-362-1031.

Media contact:
James P. McNamara
jamesp@exchangeequity.com
Phone: 504-897-1299

# posted by private-investment23606 @ 2:10 AM 0 comments