Dean Graziosi

Both property selling prices and interest rates are very low right now. Yet, with the economy suffering, many people are unwilling to take the plunge and purchase a home. That makes it an excellent time to invest in rental properties. A few tips will help you get started.

1. Start by making connections within the real estate investment community.

Get to know other, more experienced investors. If at all possible, find a mentor who will help you understand the processes involved. You can get advice on making the initial real estate deals, arranging financing, rehabbing the property if needed, maintaining the property and dealing with tenants. Insider knowledge of the system can help you be successful.

2. Decide whether you want to buy and sell rental properties or become a landlord.

You can make money either way, if you get good advice and make the right moves. You might be more suited to either type of investing. Think about whether you would want to deal with tenants. Think about whether you are so fond of sales deals that you want to make that your focus. The best thing you can do is to get to know yourself.

3. Get familiar with your financing options.

Talk to a lender or trusted advisor to get a feel for the kind of leverage you can manage with the assets you have. Locate financing to have on standby in case you get the deal you want on short notice. It is better to be prepared than to accept the first financing source that comes up without examining your options.

4. Get to know people in the building and maintenance trades.

If you are going to buy and sell rental properties, you may need to have them fixed up before you can move them. Also, if you are going to become a landlord, you will definitely need people who know construction and maintenance to keep your buildings in good repair. Getting to know essential workers is always a good idea, and making friends in the industry is even better.

5. Start looking for rental properties in good locations.

People naturally gravitate to rentals with good schools, nearby shopping, and safe neighborhoods. Transportation is high on most people’s lists, but the type of transportation people want depends more on the lifestyle of your area. If people use public transportation, they might want to be near bus lines for example. If driving is the major means of conveyance in the area, the key is to find neighborhoods with good roads and easy access to major thoroughfares.

When you have all the people and services lined up to help you succeed, it is time to start seriously considering rental properties if you want to invest in them. If you are prepared for the process ahead of time, you will be ready to move quickly when the right deal comes along.

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Everyone wants to get the best deal possible on their house, but in a buyers market it can be difficult to know when to stand your ground and when to give in. Especially if your house has been on the market for a long time, it can be tempting to take any offer that is put on the table. However, you don’t want to give too much, or you will come out of the deal smelling like a rotten egg instead of roses. Take these tips into consideration when examining and negotiating real estate deals in a buyers market.

1.      Be willing to give on the little things. If you were planning on taking your appliances with you or selling them separately and the buyer wants to keep them in as part of the deal, go with it. Appliances don’t cost enough to make it worth arguing over, and it certainly should not be a deal breaker.

2.      Be willing to give a little on the asking price. Your asking price is just that, a starting point that you are asking for. It should not be set in stone. If someone makes an offer within five thousand dollars of your asking price, take it. Even within ten thousand can be a good deal if your house has been sitting for a long time.

3.      Be willing to work with the buyer on down payment and closing costs. You can get a much better offer in many cases if you stick to your asking price but make a “seller’s contribution” to the down payment and agree pay the closing costs. This way the buyer has to give up less money to get into the property, which makes them more likely to buy from you.

4.      If your house has been sitting vacant for a long time, you will have a harder time selling it if you don’t budge in negotiations. The longer a house sits, the less it is worth. This is what makes today a buyers market in the first place. Keep in mind this fact, and be willing to give in on negotiations when necessary to get the house sold.

5.      Don’t think you have to give in on everything. If someone wants to pay ten grand less than your asking price, have all appliances included, go with a lower down payment and still have you pay the closing costs, they are going too far. While you should be willing to be flexible, don’t let buyers walk all over you either. Other wise you will find quickly that you have made a deal that leaves you in the hole, all in the name of selling quickly.

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A few short years ago experts were predicting that by 2012 the housing market and foreclosure rates would return to normal. Now that 2012 is almost here, it seems that the predictions were not as accurate as everyone hoped. The down economy is certainly a factor, but this time, there is another culprit in the situation.

The primary reason 2012 is likely to be heavy on foreclosures is due to recent irregularities in the mortgage industry. Specifically, the paperwork was not being handled properly. Low-level employees were rubber stamping documents at an alarming rate.

It would have been impossible for the workers to review the paperwork and get the correct information and signatures in the flash of time they spent on each document. Perhaps they were under pressure to get a certain amount of work done. Maybe they were just poorly trained. For whatever reason, the foreclosure documents were signed thoughtlessly and mistakes were made. Eventually, legal action was taken to halt these foreclosures.

Now the mortgage companies have begun to revamp their processes and clear up these bad practices. They are now meeting with government approval and are getting back in the business of handing out foreclosure notices. By 2012, the big players should be in full swing, working on reclaiming properties from non-paying owners.

The bottleneck could have been avoided with proper training and supervision of all employees at these mortgage lenders companies. Yet, the number of foreclosures overall may not be much different. Instead of coming spaced out evenly over the months, there was a time when the process slowed down, and now there will be a time when the mortgage companies make up for lost time with their foreclosures.

The good news for homeowners is that it gives them a longer period of time to come up with the money to catch up their mortgages. If they have a chance of saving their home at all, they are more likely to do it with this extra time they have been given.

The good news for people who want to buy a home is that there will likely be a glut of REO homes on the market after awhile. Because of this, there will be inexpensive houses for them to choose.

Real estate investors will also see benefits, as they snap up the foreclosed properties, rehab them, and sell them again at a profit. They may have opportunities to buy homes to rent if they prefer. Investors can make the most of this bad situation if they have enough contacts and are good at reselling or renting homes.

It is a good time to raise capital to be ready for the 2012 housing situation. It is the best way for homeowners to keep their homes, potential owners to be ready to buy, and investors to be ready to make the best deals. There is no need to fear what will happen in 2012. Instead, look it as an opportunity, and get your ducks in a row.

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