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Investing in Real Estate When You Don’t Have Real Estate Experience (2019 Update)

Financial advisors and investment experts alike will tell you to invest a percentage of your portfolio in real estate. Because real estate is a tangible asset that can bring in immediate returns and almost always appreciates over time, it makes a great alternate investment and long-term stabilizing force in almost any investment portfolio. However, getting into real estate investing – even on a small scale – can be intimidating, especially if your experience in real estate doesn’t reach much farther than buying and/or selling your home. So, what can you do?

Actually, there are quite a few opportunities open to investors who do not want to make a career out of real estate investing and who do not necessarily have the time to give themselves a complete education on the real estate market. In fact, some of these opportunities are not only great low-risk options for newer real estate investors, but they are also potentially more lucrative and more passive than traditional forms of real estate investment, like directly purchasing rental properties or flipping houses.

Buy Stock in an REIT

One of the most popular of these is to buy stock in a real estate investment trust (REIT). This is the most passive form of real estate investment on the market, as – instead of purchasing a piece of real estate outright – investors choose a real estate investment trust and actually purchase shares of the trust, itself. Then the REIT pools its investors’ capital to purchase larger, more profitable properties than any of its investors could have purchased individually.

Why is this a good route for investors who don’t have a great deal of experience in real estate? First of all, it allows you access to larger purchases than you could make on your own. By pooling your resources with those of other investors, you can all profit from owning equity in larger pieces of residential and/or commercial real estate.

Second, REITs make a lot of sense for new investors because the members of the trust have significantly more experience with real estate investing than you do. They understand the market(s) they’re working in, and they know how to spot a great deal for their investors. Also, it is in their best interest to find and invest in profitable properties because the value of their shares depends on the success of their investors.

Real Estate Crowdfunding Opportunities

Of course, REITs are not the only alternate investment opportunities out there. One of the newest options for accredited investors is real estate crowdfunding. If you have an annual income of more than $200,000 on your own, your net annual income with your spouse is more than $300,000, and/or your total net worth is more than $1 million (not including the value of the property you claim as your primary residence), then you qualify as an accredited investor. This allows you access to real estate crowdfunding platforms, which offer some very lucrative and exciting investment opportunities.

Investing in a crowdfunded property is a lot like investing in an REIT, as you pool your investment capital with other investors in exchange for equity in the property. The big difference here is that you maintain control over which properties you invest in, rather than relinquishing that control to your REIT.

This opens up a lot of opportunities, as you can invest as much or as little (depending on the specific minimums of the platform and/or properties you’re investing in) as you want. You can spread your capital across multiple properties, and you can specifically choose to invest in properties in your community, as well.

Be aware, though, that investing in crowdfunded real estate does require a bit more knowledge of the real estate market. You should familiarize yourself with the market(s) you’re investing in, including market trends over the past 18 months (at a minimum) and potential competition in the market. With this information, you should be able to make informed decisions about your investments and use them to diversify and grow your investment portfolio.

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How to Start Investing in Real Estate? (2019 Update)

You already know that real estate is a great investment, and you know that you want to add this tangible asset to your portfolio. If you’re like a lot of newer investors, though, you’re probably wondering how to start investing in real estate to diversify your portfolio and bring in more passive income for both the short and long term.

A lot of real estate professionals will tell you that you absolutely must have a full education in the real estate industry before you start investing. If that were the case, you would only see real estate professionals investing in real estate, and that is obviously not the case.

The “experts” do have a point, however. You should not go into real estate investing blind, and you should have some familiarity with the types of investments open to you and the markets you’ll be investing in. However, you do not have to spend two or more years of your life learning all there is to know about real estate before making your first investment.

Real Estate Investment Trusts

The easiest way to start investing in real estate is probably to buy shares in an REIT (real estate investment trust). An REIT employs real estate experts to find and purchase lucrative properties, using the investment capital of people who’ve bought shares in the trust.

With this form of passive investment, you’ll basically be investing in real estate the same way you would invest in the stock market. You buy shares at an optimal rate. Your capital buys you equity in the property or properties that your REIT owns, and you get a percentage of the profits on those properties each quarter. Then, as your shares become more valuable, you can decide to buy more, make a new investment, hold, or sell them.

As with all investments, there is some risk involved with buying stock in an REIT. Namely, you must trust that your REIT will make good investment decisions with your money. If you find an REIT with capable experts who know their markets and are known for making good investments, then you have little to worry about. So, how can you find the right REIT?

Attend Real Estate Networking Events

Whether you decide to devote the time necessary to gain a full understanding of the real estate markets you’re investing in or not, it pays to build relationships within the industry. Attending real estate networking events is a great way to do this, as you can gain more exposure to different aspects of the industry and network with other investors who’ve worked with REITs and real estate investment clubs in your area.

Join a Real Estate Investment Club

Real estate investment clubs are also a great place to begin when you’re learning how to start investing in real estate. A good club will attract quality speakers and will generally charge no more than $200-300 per year. Before you commit to joining a particular club, attend two to three meetings, and get an idea of who the members are. You want to join a club that has a diverse membership, including investors, realtors, developers, etc.

The more diverse the club, the more likely you are to meet and build relationships with the right people there. Also, most real estate investment clubs will offer investment opportunities, much like REITs, but you can opt in or out of these properties depending on whether or not they suit your particular needs.

Learn as Much as You Can About the Markets You’re Investing In

Finally, do as much research as you possibly can on the markets and properties you’re investing in. In real estate investment, you can never know too much, but you don’t have to know it all when you make your first investment. A lot of seasoned investors begin their investment careers with REITs and then branch out to investment clubs, crowdfunding platforms, and direct purchases. The more you invest, the more you’ll learn, and the more you’ll grow your portfolio.

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How to Choose the Best Realty Investment Advisors? (2019 Update)

Investing in real estate does not necessarily require you to be a real estate expert. However, if you’re going to be involved in realty investment in Dallas for the long term – and you should – it pays to have some expert advice and sound recommendations. Even if you are only interested in investing in REITs or real estate investment club offerings, you should know about the markets you’re investing in, or you should have someone on your team who does.

As an investor, you’ve no doubt enlisted the aid of savvy advisors, accountants, and other experts to help you make the best decisions for your portfolio, but when it comes to adding new properties and managing your real estate investment portfolio, it really pays to speak with someone who is specifically experienced with realty. All too often, accountants and other advisors will not treat real estate the same way they do other passive and active portfolio assets, which is why it makes sense to look for realty investment advisors who know what to do with your residential and/or commercial assets to ensure the most growth for your portfolio.

So, how can you find an individual or team of realty investment advisors to meet your needs as you delve deeper into the world of realty investment in Dallas? Follow these tips and ask a few important questions, and you’ll be on the right track.

Network with Other Investors

First of all, if you want to find the best advisors, you’ll want to look to the most successful investors. Go to networking events and/or join a good real estate investing club, and get to know some of the more successful real estate investors in your area. As you get to know and build relationships with these people, don’t be afraid to ask them about who they have managing their funds and who they trust with real estate investment advice. You’ll get the best references from the best investors.

Of course, there are multiple quality advisors and asset managers out there, and you won’t necessarily want to go with the first recommendation. So, as you interview potential advisors, don’t hesitate to ask these questions.

Will You Be Managing My Investments Personally?

A true asset manager will have access to your capital through a discretionary account and won’t need to get approval from you on each and every trade. Some investment advisors claim to be asset managers, but they really just collect a fee from you and then hire someone else to do the actual transfers and legwork that a real asset manager would do.

How Much Experience Do You Have with Real Estate Investments?

Ask them about how they manage real estate assets and if they have a different strategy for managing shares in REITs versus held rental properties. This is a big giveaway. If your potential advisor doesn’t have a compelling answer for this, walk away because they do not have the industry experience you need to manage and maximize your real estate investment portfolio.

While you’re on the subject, go ahead and ask for their Form ADV, which will tell you a lot about their track record as an asset manager. They should also have a risk-adjusted performance record that they can show you, as well, to give you a much better idea of how successful they’ve been with their past clients.

Are You Bound by Law to Always Act in My Best Interest?

Finally, this may actually be the most important question of all as you select an asset manager for your realty investment in Dallas. Some “advisors” will say things like, “You’re the boss!” Then they won’t hesitate to carry out orders that you make that may actually be bad for your portfolio.

To avoid this, ask your potential advisor or asset manager if they are willing to sign a contract that legally binds them to acting in your best interest at all times. This contract will protect both you and them by preventing them from making transactions or giving advice that is bad for your portfolio.

With these tips and questions, you should be armed with the knowledge you need to find a great financial advisor for your real estate investments in Dallas.

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Get More from Your Rental Properties in Dallas (2019 Update)

Rental properties are a great investment for more income now and for your retirement. They do a lot to stabilize and diversify your property, and with the right property management, they can be completely passive investments that require very little of your time or energy over the long run. However, many investors don’t realize that they could get more ROI from rental properties, and that they can do it without putting in a great deal of time or effort. Here are a few tips for getting the most return for your investment.

Never Underestimate the Power of Quality Property Management

When you think of property management, you probably think of a company that handles day-to-day maintenance, repairs, rent and fee collection, and other sundry details of rental properties. Did you know, though, a high quality property management firm will also handle tenant acquisition for you and that they’ll provide services that will make your tenants want to renew their leases, rather than looking for new places to live?

We cannot stress enough how important it is to find a good property management company. You may pay a bit more in monthly fees for their services, but their rates will be more than covered by your tenants’ rent, and you’ll be much less likely to find yourself in search of new tenants every year when their leases expire.

Minimize Turnover as Much as Possible

On that note, the advantages of minimizing vacancy with help from your property management firm are obvious. However, the advantages of minimizing turnover are not quite as apparent to newer investors. Even if you find a new tenant immediately upon finding out that your old tenants are moving out, and there will be no gap in rental fee payments, you will still have costs associated with changing tenants.

Specifically, when old tenants move out and new ones move in, you’re almost always going to have to repaint the interior walls and replace at least some of the flooring. Add any upgrades and/or other repairs (there are always a few), and you have lost income.

The longer you can retain tenants, the less you’ll have to pay in turnover costs, and that’s a serious consideration when it comes time to negotiate new lease terms. Weigh the cost of repairs and renovations against the costs of upkeep and maintenance on the house, along with the current rental rate and the increase you would like to see in rent for the next year. It may pay to increase your rental rates at a smaller increment and give your current tenants a better deal, rather than risk losing them, paying for repairs, and finding new tenants.

Be Strategic with Your Rate Increases

On that note, you are going to have to raise rent every one to three years. This is only fair, as it allows you to keep up with the costs of maintaining the property, taxes, and other fees. However, tenants tend to balk at rate increases, and these increases can motivate them to move out. That’s why you need to be very strategic with your increases.

Typically, unless you offered the property at a drastic discount for the first year’s lease, we do not recommend increasing rent for the second year. This builds trust with your tenants and lets them know that you’re not going to constantly attempt to gauge them. However, after two years, it is absolutely reasonable to expect a 1-3% rent increase. This is little enough that your tenants should be able to pay it, and a year of increased rent will likely cost them less than moving expenses.

At the same time, keep an eye on rental rates in your area. You want to ensure that your rates are competitive with other properties. If you’re charging more, there needs to be a good reason that will be attractive to your tenants. For example, your property could boast the latest appliances and fixtures in your kitchen and bathrooms. An in-demand location and access to a pool and/or hot tub and other luxuries and amenities will also help you justify an increased price.

To get more ROI from rental properties, you need to balance great services and a fair but profitable rental rate to minimize vacancy and retain your tenants over the long term.

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Why Now Is the Best Time to Invest in Real Estate in Dallas (2019 Update)

For over seven years, the residential real estate markets across the United States have been slowly climbing out of the hole that was left when the housing bubble burst in 2008. While other markets have seen halting, faltering progress with a lot of dips, valleys, and stagnancy, real estate in Dallas has been consistently ahead of the curve.

In general, buying homes in Dallas has been a great investment move for years now, but that makes some newer investors nervous. They believe that they must have “missed the boat” and passed up the opportunity to get in on the ground floor with a lot of great investment opportunities. As a result, now they think that investing in real estate in Dallas at this point will not yield good deals or positive returns on their investments. This couldn’t be farther from the truth, though. The Dallas residential market is hotter than ever, but experts do not believe that it is anywhere near its peak. In fact, now is the perfect time to buy homes in Dallas and build your investment portfolio for a number of reasons.

More Jobs Mean More Tenants

First of all, Dallas is home to a lot of major industries, and the economy here is booming. We are seeing more and more businesses moving in and/or increasing their presences in the Dallas/Fort Worth area, including State Farm, Raytheon, AT&T, American Airlines, Southwest Airlines, Dean Foods, Dr. Pepper, and a long list of other Fortune 500 companies.

With more jobs flooding into the area, more people are moving here and are in need of rental properties. Young professionals are waiting longer these days to buy houses, which means that a lot of the tenants coming into Dallas are likely to be long-term ones, rather than those who’ll stay just a year or so and then find a house to buy.

Basically, because more companies are moving into the area and bringing more workers, the housing market is expected to continue to see growth because tenants aren’t just moving from one place to another. Instead, there is an all-time high in demand for rental properties in and around Dallas.

Home Prices Are on the Rise

Not only are rental rates up, but home values are increasing at a significantly higher rate than other residential markets in the United States. Experts say that this has to do with the diversification of industry in the Dallas area. Think of it this way… You diversify your portfolio to maintain its stability and to continue growing your wealth, no matter what any one particular asset or market does, correct?

Well, industry in Dallas is much the same way. Looking at the brief sampling of just the Fortune 500 companies in the area, you can see that there are numerous industries represented. Unlike a city like Detroit, which was built almost solely on the auto industry and has seen disastrous declines since the ‘90s, Dallas is built on such a wide variety of industries that no single industry recession can hurt the city and/or its surrounding neighborhoods.

At the moment, other cities’ real estate markets are faltering due to the current energy recession, but Dallas is flourishing, thanks to its diversified field of industries. Thus, while other markets are flat or declining, the housing market in Dallas is in full swing and showing major demands that only look to continue upward.

Waiting to purchase real estate in Dallas right now would be a mistake because current market prices are as low as we can expect to see them at any time in the near future. The market looks to be sustainable, and there is no shortage of long-term tenants for rental properties. Whether you are investing directly in homes in the Dallas area or you’re interested in buying equity in a larger residential or commercial project, now is most definitely the time to make your investment.

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How to Make Money From Your Real Estate Investments (2019 Update)

When new investors first look into how to make money from real estate investment, they often get bombarded with a lot of seemingly conflicting advice. The “experts” all have different opinions, and there’s no room for any varying investing techniques or methods. With so many “right” and “wrong” ways to make money with your investments, all of which seem to contradict each other, it’s easy to get overwhelmed.

Fortunately, when you break the process down and understand that there are actually a lot of different options and opportunities to profit from real estate investing, it becomes a lot simpler and a lot more straightforward. Let’s take a look at just a few of the ways that you can profit from your investments without making a career out of it.

Find Passive Investment Opportunities

First of all, a lot of investors view REITs (real estate investment trusts) as beginner investment opportunities. Granted, you do not have a lot of control over where your money goes when you buy shares in an REIT, but when you choose the right trust, you’ll be almost guaranteed that the investments they make on your behalf will be profitable. This, in turn, will guarantee that you see positive returns on your investment every quarter when you receive your equity payout.

In addition to REITs, you can also make money by joining a real estate investment club and/or investing in projects on real estate crowdfunding platforms. With a real estate investment club, you’ll be able to network with other investors and real estate professionals, and you’ll have opportunities to invest in exclusive equity deals that the club offers. With a real estate crowdfunding platform, you can pick and choose properties to invest in, and you can choose to invest as much or as little as you want, giving you more freedom to manage your investment portfolio.

All of these opportunities are extremely passive, as they all involve the purchase of equity, rather than the direct purchase of property. You will never have to concern yourself with finding tenants or maintaining these properties, as you would with a direct, individual purchase. However, that’s not to say that directly owning real estate is a bad way to make money, either. If you are going to go that route, though, you’ll want to find ways to make your investment as passive as possible.

Buy Turnkey Properties

One good way to make sure that your investments are more passive than active is to buy turnkey properties that come with a property management firm in place. The best turnkey deals not only include property management, maintenance, and repairs, but they also include tenant acquisition and will take care of all of the day-to-day tasks associated with rental properties.

Turnkey properties do tend to cost more than properties that are not move-in ready with property management and tenant acquisition services, but consider how much time and money you’ll save when you purchase an investment property that is ready to start making money immediately. Instead of worrying that you put more into this investment at the front end, think of how much more time you’ll have to find more investments and continue to grow your portfolio.

Don’t Pay Your Mortgage Down – Buy Another Investment Property Instead

Speaking of new investments and portfolio growth, this final tip for how to make money from real estate investment is a bit counterintuitive. You might think that you’ll make more profits faster if you have the opportunity to pay off the mortgage on an investment property. However, it’s a much better idea to put your extra income into another investment and to collect income on both of these at the same time.

If you do this, you’ll have two properties appreciating over the long term, instead of one. Plus, you’ll be getting monthly cash flow on both, and both mortgage payments will be taken care of with rental fees. What you “lose” in interest, you’ll more than make up for in appreciated value and more income.

These are just a few of the ways you can make money from real estate investment. Follow these tips, and you’ll almost certainly watch your wealth grow.

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What’s the Best Way to Manage Your Real Estate Portfolio? (2019 Update)

As you begin to grow and diversify your portfolio with real estate investments, you’re going to hear a lot about asset management, the types of assets you should add, and the best form of management to increase your wealth. As with most aspects of investing, the best solution seems to be a combination of solutions. Instead of solely investing in one type of asset or the other, and instead of subscribing strictly to one form of management or another, it’s best to have both passive and active assets in property management. Furthermore, you’ll get more out of your investments if you implement a combination of passive and active management styles for different parts of your portfolio.

Asset Management vs. Property Management

First of all, before we go any further, we need to clarify the difference between asset management and property management. Property management is a service that takes care of the regular tasks and hassles of your rental properties for you. A property management firm will take care of collecting rent, maintaining and repairing the property, staying on top of late fees, evictions when necessary, and they may also cover tenant acquisition and/or paying property taxes and other bookkeeping services, as well.

Asset management is a bit more abstract. This refers to the management of the assets in your portfolio. Asset management involves making decisions on what to sell and what to hold, what percentage of your portfolio should be in real estate and what percentage should be in stocks and bonds, etc.

When we talk about active asset management, we’re referring to a form of management that relies on manipulating your holdings and assets to gain more ROI by taking advantages of market inefficiencies, dips, and peaks. On the other hand, with passive asset management, you’ll keep an eye on your assets, but you’ll generally let them accumulate returns on their own, according to the market, instead of trying to gain more than apparent market value.

Passive Income with Active Asset Management

It’s important to be familiar with both property management and asset management, as you want your real estate investments to be passive streams of income for you. With good property management, you can collect returns on your rental properties without actively maintaining them.

At the same time, not all real estate has to be a passive asset. Thanks to real estate investment trusts (REITs), real estate investment clubs, real estate crowdfunding platforms, and other equity investment opportunities, you can have active real estate assets in your portfolio. In fact, depending on the market and your portfolio, you may have an asset that’s both a passive and active asset in property management.

What do we mean by that? Basically, you may buy shares in an REIT and maintain it as a passive asset that doesn’t need active management, but market activity may make it more profitable to treat those shares as an active asset to be held or sold to gain more capital that you can then put into another asset.

If you directly own a rental property, and you don’t intend to make being a landlord a full-time job, it makes no sense to make this an active asset or to actively manage it. You should be only as involved as choosing a good property management company to ensure the most income from the property for you, and it should sit in your portfolio as a passive asset with no active management.

However, the funds you gain from that rental property may need more active management, especially if you want to continue to grow your portfolio. Thus, you’ll need to determine what percentage of your portfolio should be allocated to real estate and, of that, what percentage should go to passive or active assets. Then you can more easily determine which types of investments to allocate your returns toward.

With just a little bit of attention, organization, and management of your portfolio, you can set yourself up with a great balance of investment properties that will grow your wealth while providing stability for your more active assets.

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Deferring Taxes on Real Estate Investments (2019 Update)

Real estate has long been a highly profitable investment. Ask any financial expert, and they’ll likely recommend investing in real estate to stabilize and diversify your portfolio. Rental properties also bring in passive income and can grow your wealth and begin showing a return on your investment almost immediately upon purchase.

This is why real estate investment groups are such in-demand organizations. A reputable group can help you invest your capital in lucrative properties by pooling your resources with those of other group members. By joining a group like this, you gain access to real estate and investing expertise, as well as much larger potential benefits and ROIs (returns on investment).

Real estate is not simply a good investment because it tends to appreciate over the long run or because it is a good diversifying element in your portfolio, though. It also presents a number of means to defer taxes, as well. Did you know, for example, that real estate trading can help you delay paying capital gains taxes on an investment property?

How Real Estate Trading Works

Forbes likens real estate trading to baseball cards. When you were a kid, you may have traded several cards that you found less valuable for a single card that you believed would gain significant value over the coming years. When you bought the cards, you paid sales tax on them, but when you traded them with one of your friends, neither of you paid the IRS a dime, right? Though the process is not quite as simple as going to a friend’s house with a box of trading cards, the same can be done with investment properties through a 1031 exchange.

Basically, according to the Chicago Tribune, if you’ve purchased an investment property that has accrued a significant amount of equity, you will likely want to use that equity to purchase more investment properties. However, if you sell the property outright, you will owe capital gains taxes, which will eat into your liquid assets and limit the amount of money available to invest. However, if your property qualifies, you can perform a like-kind 1031 exchange for another property (or properties), and you will not owe any taxes until your new properties sell.

Exchanging Property for REIT Shares

If you’re interested in joining a real estate investment trust (REIT) and you currently own property independent of any real estate investment groups, you may actually trade that property for shares in your REIT in a 721 exchange. This is particularly good for investors who want to take advantage of the benefits of working with an REIT and who want to take a more hands-free approach to real estate investment. Be aware, though, that after a 721 exchange, you may not exchange your REIT shares for real estate under a 1031 exchange to defer your capital gains tax again. Fortunately, a good real estate investment group will help you understand all of your options before you join so that you can decide whether to hold on to any existing properties you own or whether you’d be better served by trading them.

There are actually numerous ways to defer paying capital gains taxes when you invest in real estate, but without expert advice and guidance, you may never know about all of your options. Trading is only one means of putting off paying the taxman, and you can see from the information we’ve shared here that even this single means offers several options and strategies.

If you’re looking for an exit strategy for a property you own and you do not want to pay taxes on it yet, getting involved in a trade with a reputable REIT may be the way to go. Then again, you may be better served by retaining that property and enlisting the aid of a real estate investment expert to help you determine the best course of action for future investments. A good REIT or real estate investing company can help you make the best decisions for your portfolio.

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How to Identify Good Investment Opportunities in Dallas? (2019 Update)

With a growing real estate market, the Dallas-Fort Worth area is ripe with investment opportunities. From foreclosure sales and flip properties to turnkey rental properties, you can’t seem to throw a rock in north Texas without hitting a chance to invest your capital in real estate. However, not every deal is a good one, and not every deal fits every investor, either. So, how can you identify the best Dallas investment opportunities for you and your goals?

Location, Location, Location

First, whether you’re perusing the MLS or someone in your real estate investment club has clued you in to what they call a great investment opportunity, you have to find out where it is. With nothing more than the property’s street address, you can gather everything you need to know about the neighborhood and surrounding area.

Through the tax assessor’s office and public records, you can find out about how many houses in the area are vacant and whether the neighborhood is growing or shrinking. With a quick drive around the area, you can find out if it has easy access to amenities like public parks, grocery stores, schools, and other attractive elements.

Whether you intend to sell the property quickly or hold onto it as a rental, you should know how much rental rates are in the area and how much comparable properties are selling for. You should also find out the average time that a property stays on the market there, too. Finding out that prices are low, people are moving out, and houses stay on the market for months should be enough to let you move on to your next investment and never look back.

Condition of the Property

Next, if at all possible, you’ll want to take a look at the condition of the property. With foreclosures, you will likely not be allowed inside before auction. However, with short sales and other distressed property sales, you can often do a walk-through before you make an offer. At this point, take the opportunity to have a professional come with you to inspect the property. After a full inspection, you should have a good idea of how much the property will need in repairs and renovations.

The property may still be a good deal, even if it is in need of major repairs. However, without knowing the condition of the house, you could easily overpay for it and turn a great opportunity into a terrible deal in very little time.

Understand How The Property Fits With Your Investing Plan

Finally, as you look around Dallas for investment opportunities, keep your investment plans in mind. Purchasing a unit or shares in a new construction apartment building can be a great investment move if you plan on holding onto the property as a rental, gathering passive income, and waiting for it to appreciate. However, it’s not going to gain you much (if any) capital if you try to turn around and flip it in a few weeks or months.

Foreclosure Real Estate Investing DallasBy the same token, a foreclosure property in need of a number of repairs may not give you enough income in rental fees to justify the expenses you put into renovating it. However, those renovations could bring that property back up to market value and create a great opportunity for a short-term investment.

Also, keep in mind how comfortable you are with the risk level on any investment. As a rule, holding properties and renting them to tenants is a much lower risk investment; fixing and flipping properties as quickly as possible is a much higher risk investment. Both have their advantages and disadvantages. Flipping properties can gain you a lot of income very quickly, but comes with more risk and more work. Holding properties, hiring a property management company, and renting them out will gain you less cash flow and a slower rate of return, but you will also have a much lower risk with each of your investments.

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Must-Know Tips for Real Estate Investors in Texas (2019 Update)

When it comes to finding and taking advantage of investment opportunities in the Dallas-Fort Worth area, there are a few things that every investor should know.

You probably already know that the housing market in north Texas is growing at roughly double the rate of markets throughout the rest of the country. With market prices on the rise and rental demand continuing to outstrip supply, this is a great time to get into real estate investing in this area. Of course, if it were as simple as that, everyone would do it. Here are a few tips for investors in Frisco, Dallas, and the rest of north Texas to help you see more returns on your investments and have better experiences in the real estate market.

Get Organized and Automate Everything You Can

Whether you buy your investment properties in cash or you finance them, you are going to have monthly, quarterly, and annual fees associated with them. From real estate investment club dues to mortgage payments and property management fees, you are going to have many costs to keep up with if you want to stay on top of your investments.

Get a copy of QuickBooks, and you can teach yourself how to keep track of all of your bookkeeping needs. This will give you the tools necessary to organize all of your monthly and periodic costs, and you’ll be able to put everything together easily for your accountant, as well. If you are at all unsure of doing your own bookkeeping, though, don’t hesitate to hire a professional to do it for you. This is a minor cost in comparison with the time you can save on tasks that you’re not familiar with or that you simply do not want to devote energy to.

While you’re organizing your bookkeeping, put as many of your bills and fees on autopilot as possible. Most service providers now allow you to select auto-draft options that automatically take money from an account of your choosing. Some of these providers will even give you a discount for doing this. This way, you can avoid late fees, stay organized, and reduce your monthly bills, as well.

Keep Tabs on Every Property You Consider

As you look into various investment opportunities, don’t forget to take notes and keep a physical list of every property’s advantages and disadvantages. If you keep these lists organized and in order, you’ll know where you can negotiate with sellers, which areas are growing and which are dying, which properties need the most work, etc.

Be Prepared With a Big Down Payment

Once you’ve chosen a property that you want to invest in, you’ll need to finance it. Qualifying for real estate loans is more difficult when you need capital for investment properties than it is when you’re looking for financing for a primary residence. You can often help yourself out and get a foot in the door by preparing to pay a larger down payment than the standard 20%. If you have this available, you show lenders that you are serious about this deal, and they will be more likely to work with you.

Build Relationships With Other Investors and Lenders

You can also gain financing for investments through investing partners and private lenders, as well. If you build relationships with other real estate investors and with people who have capital to invest, you open up new avenues for financing opportunities. The more these people know you and know that you are a serious investor, the more they will want to work with you and trust your judgment on investment deals.

Whether you’re investing on your own, with a partner (or partners), or you’re investing in a real estate investment trust or group, you can benefit from keeping these tips for investors in Frisco in mind. The market in your area is ripe for investment and can be very lucrative if you approach your investments correctly.