There are times in the career of every real estate investor that can be looked back on as pivotal. Transactions that went awry, situations that turned bad, and problems that turned up. These are all inevitable for anyone in the real estate business for any length of time.
It is an axiom of business that every venture or transaction will either sink or swim. The absolute truth expressed in this saying is that success or failure are the only two outcomes, and eventually it all ends in one place or the other. Naturally, real estate investors aim for success, and doggedly overcome obstacles in order to achieve it.
Real estate title issues and property liens are some of the biggest hurdles to closing real estate deals. If you are planning to invest in real estate, make sure you understand property titles and liens. Here are some common title issues.
A real estate investment sometimes succeeds or fails because of the margins. Sometimes the rate of interest charged on the loan to purchase a real estate property can make all the difference. It can be the difference between a profitable transaction and a losing deal.
Financing real estate investments is a key step toward achieving the maximum return on investment (ROI) on any project. Borrowing allows the investor to control a larger asset with a smaller amount of capital. Increases in the value of the total asset are larger when expressed as a percentage of the capital actually invested.
Real estate investing is about leverage. Getting the highest return on investment often means putting the least amount of capital into the project. This means that the real estate investor must be comfortable with borrowing money in order to finance a project.
Fixing and flipping residential real estate as an investment strategy can be a fraught proposition even for someone who has done their homework. Among the most unpleasant surprises is to learn that an investment property being renovated has been burglarized.
There are different appraisal methodologies for different types of real estate. Investment real estate is often valued under the Income Approach. This is a formulaic appraisal method that divides the anticipated income from the property by the capitalization rate.
According to MarketWatch, real estate is the fastest growing segment in crowdfunding. In fact, it is expected that real estate crowdfunding (RECF) will create $500 billion or more in funding and generate $3.2 trillion in value each year by 2020.
Due diligence is a fact of life. Everyone must learn how to analyze and judge an opportunity, whether it be a real estate investor looking at funding a particular project, a borrower deciding which lender to raise capital from, or a marketplace lending platform presenting investment opportunities to accredited private investors.