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3 Immediate Ways to Add Value to Your Multifamily Purchase (2019 Update)

As a real estate investor in the North Dallas, Plano, Southlake or Keller areas, you may already be satisfied with the consistent growth in the value of your properties. However, there is always room for growth. Additionally, with this region being identified as one of the hottest in the real estate investment market for 2017, chances are there will be additional properties to come into your portfolio in the coming year. Naturally, you want all of them to have the greatest value possible.

In order to accomplish that goal, we give you three key ways of adding value to a multifamily purchase, and will also have a short list of tips at the end, as well.

1. Reconsider Common Areas

Whether it is a new purchase or one you’ve had for a while, you can increase the value in terms of actual, appreciated value as well as curb value by redoing the different common areas. Take a look at the entire exterior of the building(s). Do they appear appealing and attractive? Are they spaces that residents may want to use or just pass through on their way inside? Boost value by sprucing things up with landscaping, painting and general repairs.

Also, consider signage. While many building owners boost value with a “rename” of a recently purchased property, even a redo of your signage and logo can increase the curb value and appeal. It is also important to keep in mind that “review” websites can haunt you if your purchase was in need of rehab. Though you might refurbish a multi-family property and turn it into a wonderful spot, old negative reviews can be a problem. Renaming the building, and putting up new signs can erase a lot of the problems with the old brand.

2. Utilities

Many landlords say they are nervous about changing the status quo in a multi-family property and billing renters for utilities. This, however, is common place in the rental market. These are, however, resources that can be used at wildly variable levels by the different renters, so it just makes sense that they should pay the bulk of the expense. While a building may not already have the infrastructure necessary for sub-metering, it is not difficult to make the shift and do so. There are entire industries dedicated to helping real estate investors pass and allocate these expenses fairly and legally.

3. Get rents to market ASAP

Another thing that many landlords fear is the backlash of a plan for raising rents. However, as the owner of investment real estate in the Dallas area, it is imperative to reevaluate your market and begin to increase rates to the most current levels. There are many simple ways to gauge the fairest rental rates, but you do have to take any of your improvements into consideration, the ways you may have lifted renter satisfaction since purchasing the property, and there are the legalities of current leases.

Test the waters on a few vacant rentals to gauge whether you can succeed with your increases. You may hear some complaints from renters about the raise in rent, and the best policy is to allow them to explain their concerns, but also let them know that you are bringing the building to market – not exceeding it. They will quickly discover that any increases reflect the pricing throughout the region.

By doing some basic improvements, reworking the utilities, and getting apartments to market as soon as the lease is due to renew, you can almost immediately add value. Don’t forget alternative income streams as another rapid-fire way to increase value. This might mean adding a coin-op laundry room, redoing a common space to be used as a rental, adding premium or fee-based parking beneath a car port or making storage space available for a monthly rent to create simple streams.

A multi-family property is one of the savviest investments, and these tips can help you make it even more profitable as soon as you have purchased it.

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How to Make Money in Real Estate — Whether You’re in an Up OR Down Market (2019 Update)

Watch five minutes of any reality show focused on house flipping and you would think that it is as easy as pie to pick up a house at a low price, do a few weeks of improvements and then flip it for enormous sums. That, however, has never been at all realistic. Sure, it has happened, but no novices or part-time real estate investors can enjoy such opportunities. In fact, speak with active flippers in such lucrative places as North Dallas, Plano, and the Southlake areas and you would hear that even they might struggle taking profits on flipping activities.

What this does NOT mean is that you can no longer profit from real estate ventures. What it DOES tell us is that you have to know how to make money in ANY real estate market – up or down. It just takes a few good tips and tactics to enjoy success at all times and in all markets.

#1 Know the Market

One of the worst blunders that novice flippers make is to purchase a property just outside a growing or “up and coming” market. A property is either within the market with the most growth and potential, or it is not. Even a matter of a single block can end up costing thousands in a lower sale price or less interest. So, the most important way to make money in real estate is to know the market, and you can only do this by committing to the research.

#2 Do the Research

If you want to get properties that are in the more lucrative markets, you’ve got to do the research. Know where they are, make connections with the potential brokers or listing agents, and even figure out if you can get an inside track before they are listed. This is an ongoing process and you’ll have to be committed to knowing your market and remaining on top of properties that may soon be listed.

#3 Rentals

Of course, you need to be making money in real estate to continually invest in further assets and properties. The one way you can be almost certain of doing this is to use your initial research and knowledge of your markets to get into at least one rental property. A multi-family property is often superior as it enables you to remain safe from 100% vacancies, and it is going to supply steady income at all times – even in the down the market. Current statistics point towards Plano and Dallas as the hottest markets in the U.S. for 2017, and that is great news if you are looking to invest in rentals. However, even if you purchase in a down market, your rentals are going to be a source of reliable revenue, enabling you to make money in real estate at any point in time.

#4 Take Advantage of Current Conditions

Your research and connections along with rental income are great ways to make good returns on real estate investments, however, you also want to consider the current market. At this point, there are still many short sales and foreclosures available. If you have cash for investment, these can be unique opportunities to make quick profits or find great long-term investments in multi-family or commercial properties. Rarely will investors purchase for cash, but with short sales in abundance, you won’t want to miss out.

#5 Consider All Types

Another unique tip for making money in a down market is to consider buying outside of your asset type. Yes, we encourage solid investment planning and always say that wise investors know their ideal investment types. However, when properties are in abundance and when financing is changing rapidly, it could be wise to look at commercial properties over residential units. This is going to depend tremendously on your capabilities and available capital, but commercial real estate is one great way to diversify your portfolio and guarantee income regardless of overall market conditions.

There are many ways to create reliable income and earn on real estate in a down market, and hopefully these tips can steer you towards profitability in your investments.

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Investing for Beginners: How to Invest in Real Estate (2019 Update)

If you are considering the opportunities for investing in real estate in place like North Dallas or Plano, it is a great time to do so. Financial experts have identified these areas as the top and hottest spots for real estate investments in 2017. Of course, there are many types of real estate investments, and those in the Dallas and Plano areas are both rental and rehab and flip types.

As a beginner or novice investor, it is helpful to understand the ways that investing in real estate can be done.

Real Estate Investment 101

So, investing in real estate is identical to investing in anything else. You use the capital or money you have right now towards a method that allows it to grow and increase over time. This growth is the return on the investment or the ROI. The return must be adequate to cover such issues as taxes, the costs of actually owning the real estate over the long or short term, and to cover the risks you have taken in the investment.

Now, that sounds complex, but it is not. Essentially, it is saying that your choices in real estate investment have to generate profits that are higher than all of the expenses associated with making that investment. If it were something like a paper investment, such as stocks, you would look at the price of the shares, the fees associated with making the purchase and/or future sales, and the tax issues associated with that investment. If, after doing the math, that investment generated the earnings you hoped to make, it is a sound investment.

This is precisely the same with real estate. You have to do a bit of unique research or due diligence, and work with totally different professionals and experts, the overall process and outcome is identical. And, just as traditional investment models have risk and even loss, so too do real estate investments. This is why you will need to really commit yourself to a learning process and to doing adequate research prior to investing.

How to Earn

How do you invest in real estate? There are four typical approaches to earning money on your investments. These are through appreciation of the property. For instance, you may find a chance at a multi-family property, you purchase and update it, add a coin-op laundry room (creating another income stream) and when you sell, it will be worth much more than when you purchased.

Investors also earn by cash flow methods. In other words, they purchase buildings with the intention of earning regular income from it. This could be rental payments, but not always residential rent. You can invest in storage, office buildings, and commercial property.

You can also earn related income through things like commissions off of buying, managing and selling real estate. Real estate related income can also result from ancillary investments, such as being a firm that operates coin-op laundries in an apartment complex or who manage the vending machines throughout a large business complex.

Most investors opt for the appreciation (buy low, sell high) or the cash flow (purchase and rent) approaches. Naturally, within this spectrum there exists a wide array of real estate investment options, and your choices come down to some basic issues:

  • Your available income
  • Your experience level

If you are eager to get involved in real estate investment in hot markets like North Dallas and Plano (both cited as top areas for 2017), you need to be realistic about your income and experience. Some experts insist that you must have a certain level of financial fitness before you invest in real estate, or that you at least have excellent credit. Many also say that a good tip for investors just getting started in real estate investment is to make your first investment in real estate that you will actually inhabit and/or rent before selling at a profit. Alternately, this can be your first investment that you rehab and then use for rental income in years to follow.

Where experience is concerned, the one thing that all professionals agree on is this: Fall in love with reading. The more you know about the process, the better you will be. Nothing can beat a solid understanding of real estate investing as a key to initial success.

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These 4 Real Estate Investment Myths May Be Why You Aren’t Successful (2019 Update)

Real estate investing is a strange business in many ways. While it’s incredibly popular and always growing, there exists a long list of myths and rumors about investing that make it hard for newcomers to get the courage to dive in. Instead of trying to clear up these misconceptions, many investors are content to allow these myths to continue to grow, and it’s easy to believe many of them because they often sound pretty reasonable at first glance.

If you haven’t been having much success with real estate investing, chances are that you’ve been letting one of these four common misconceptions guide your actions. Once you understand that these are totally false crutches hiding a fear of taking a risk, you’ll be able to move on and do what it takes to really succeed in investing.

Myth #1: The best real estate investors are the ones who have all the knowledge.

Real estate investing does require quite a lot of specialized knowledge. There are new and confusing tax laws, contracts, different types of deals, projected profitability, calculated risk factors, ways to identify good properties, marketing techniques, and so much more that go into being a great investor.

But here’s the secret that no one will ever tell you: You don’t have to be the person who knows all of these things. First, the market is constantly evolving, so there is no way to always be 100% in-the-know in every single market. Second, no one person could ever be an expert in all of the areas of knowledge necessary for investing. Instead, learn to surround yourself with people who are experts in specific areas that you can turn to for advice, and you’ll be just as armed with knowledge as any self-professed expert.

Myth #2: The best real estate investors are the ones who have plenty of capital.

This is one of the biggest myths that circulates in the investing world. Many people are under the misconception that in order to invest in real estate, you have to have hundreds of thousands of “extra” money hanging around to invest. Perhaps if you wanted to invest in a high-rise penthouse in New York or a horse ranch in California, you might; but the truth is that real, every-day investing that puts food on the table doesn’t look like that at all.

The bulk of real estate investment happens without really needing large sums of your own money. Investors rely on leverage instead, getting loans which are then paid off after the sale and reinvesting to make bigger profits. In many cases, a much smaller sum is all that is needed to get started.

Myth #3: The best real estate investors are investing in the right area.

Real estate is, after all, all about location. But beginner investors often don’t seem to realize that you don’t have to live in an area to invest in its real estate. Out-of-state investing may seem risky, but if you do the right research and take the time to find a good management company or contractor, the risks are really not any higher than investing in your local area.

When you branch out from your area, which may not be as booming as another market, you open the door for so many more investment opportunities. This also forces you to take a more passive role with management or rehabbing, which is great for those who have found themselves doing more than they wanted to in past investments.

Myth #4: The best real estate investors have more time than I do.

Perhaps because the market is so competitive, or perhaps because of the popularity of home flipping shows, many beginner investors believe that real estate investing is a full-time job. They worry about maintaining their day job, their family life, their other passions and hobbies, or whatever other responsibilities they have, while working towards an investment portfolio.

The truth is that there are many ways to make real estate investing work for your life. You can make it a part of other activities, or simply do it in your free time. No one else can tell you what your path to investment success looks like.