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How Your Investment Portfolio Could Benefit from Commercial Real Estate (2019 Update)

There is savvy in diversity. This is true in almost any setting imaginable. Diversify in your crops and your yields are greater. Use diversity in your diet and enjoy greater health. Diversify in your investments and you have a more solid strategy. In fact, almost any investment portfolio is going to benefit from diversity, and this should include incorporating commercial real estate into the mix.

While the typical strategy will find investments like bonds, stocks and savings among the most common blend of assets, many also now contain real estate of one kind or another. In fact, as savings rates have fallen to 1% or less in many instances, and stocks or bonds delivering 3% and higher, real estate can deliver an annual return of 9% or more.

Understand the Benefits of Commercial Real Estate Investments

Firstly, it helps to understand just what commercial real estate means. It can be retail property like a single building with a store or shop, but also an entire strip mall or shopping center. It can be an industrial property like a warehouse or factory, an office building of various kinds (including a corporate park), it can be a self-storage facility of any kind, a hotel or motel, and it can also be a multi-family property with apartments or multiple housing units in one building.

Within this broad array of potential assets, investors will enjoy a tremendous amount of stability and security. However, like any investment, you have to perform due diligence and evaluate any investment based on your needs. For example, how much risk can you take? What sort of returns do you need? What are the specific tax issues with one type of investment over another?

Once you understand your goals, you can then better understand how diversifying the portfolio with commercial real estate investments is such a wise choice. The primary benefits that apply to all, include:

High returns – Historically, real estate investments, especially commercial properties can supply a 9.5% return over a twenty year period

Cash flow – Unlike many real estate investments, commercial properties are noted for the dependability of their cash flow. This is a level of security that few investments of any kind provide.

Hard assets – When you own stocks or bonds, you have no hard assets. Real estate is a hard asset at its finest and has specific appeal over paper or electronic holdings.

Taxes – The benefits of properly structured real estate investments are quite substantial. There are benefits on loans and interest paid, there are tax benefits linked to the depreciation of the asset, and much more.

Hedging – It can be tough to hedge your portfolio against loss, but real property is a fantastic hedge against issues like inflation. Commercial real estate is long known for gaining during inflation, helping to maintain the value of the portfolio over the long term.

Diversity – As noted, smart investors diversify. Commercial real estate is not linked in any direct way to the stock markets, making it a great hedge. They also provide a wide range of types and options, with a wide array of prices and investment sizes available, making them suitable to almost any portfolio.

Influential – Unlike any other sort of investment, the owner of commercial real estate investments can actually influence their performance in the portfolio. This can be done by taking any steps you have available to increase the value of the property or otherwise influence its performance. You might “re-tenant” a building with higher quality clientele. You might make improvements that instantly increase the value and equity of a property. In no other way do investors ever have such control over their investment vehicles.

So, if you are looking for a good way to improve your portfolio in the North Dallas, University Park, Preston Hollow, Frisco or Plano areas, consider the many options for commercial real estate investments.

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Eight Tips for Launching Your Real Estate Investing Career (2019 Update)

Investing is a good way to build wealth and create a more financially promising future. Naturally, not all forms of investing are alike. There are stocks, bonds, hard assets like gold or silver, trusts, and real estate, among others. In this article, we are going to look at real estate investing and eight good tips for successfully getting started in this lucrative area.

Whether you have already spent a lot of time reading about and learning the key data, or you are just beginning to understand the many benefits of real estate investing, you need to start with one major tip:

  1. No time like the present – If you read headlines about real estate investing you realize that it is an area with the same fluctuations and changes as any other investment or asset class. This means that there is no ideal or right time to begin investing. Rather, it is a matter of understanding which kinds of real estate investments are appropriate in the moment. For example, in early 2017, investors heard from Warren Buffett that real estate investments of any kind were suggested, and other investing experts pointed towards commercial properties, including medical.
  2. Have goals – Your budget and your goals may not yet be in perfect alignment, but getting involved in real estate investing without solid short and long term goals is hazardous. In fact, this tip has to spill over into our next because without your first short term goals, you don’t reach the long term goals. And one of your main long term goals should be to invest “bigger” than you have already done. To do that means building the portfolio and having on paper and in capital what you need for a large investment.
  3. Plan for a big investment – Small steps are usually needed to take bigger ones, and the sooner you begin investing and setting goals, the sooner you get to do a big investment in a more lucrative asset class.
  4. Do some research – Not all real estate is a good investment vehicle. Start looking into the markets in the areas with the most promise. For instance, use search engines to find top cities or regions for investing in housing or commercial properties.
  5. Hold steady – This takes discipline and some nerve, but it is far too easy to bail out of a good investment because of unusual circumstances or troubling times. For example, a major REIT recently dealt with a massive sell off because a single area of its holdings showed signs of trouble. Rather than selling, investors should have held firm.
  6. Accept risk – There are no investments that are without risk, and this is true of real estate investments. You need to be willing to accept some risk, but if you are doing your research, holding steady, sticking to goals and choosing the most lucrative markets and regions, your risk should be kept to minimal levels.
  7. Diversify – As soon as you are able, make plans to diversify holdings. While you might enjoy heaps of success as an investor in apartment buildings or retail and combination use buildings, keep in mind that the old “eggs in one basket” system is not always the wisest. Be sure your portfolio has a good balance of single family, medical, commercial and other real estate.
  8. Seek help – All of these things are quite challenging to do on your own, though many before you have done so. However, why struggle and delay your success as a real estate investor when there are turnkey options available. There are real estate investment clubs that steer investors towards those “perfect fit” assets, and which can provide almost immediate success.

Hopefully, these eight simple tips can help you get started on a successful career in real estate investing today. Now is the moment to look to real estate as a strong asset class, and today’s the ideal day to begin.

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Six Clever Negotiation Tactics to Lock Down Your Next Real Estate Deals (2019 Update)

As a real estate investor, you will spend at least some of your time actually buying properties. The rest of the time, you might be rehabbing a property, or marketing a home, or inspecting potential purchases. However, there will be at least some buying involved. This means that you will be dealing with sellers (or their representatives, at least). The seller is going to try to get the best price possible for the property and it is your job to negotiate it to the lowest price agreeable to both parties.

This is where many investors run into trouble. Chances are good that even if you have many successful sales under your belt, you could have gotten those properties for less, and maximized your return even more. Of course, negotiating is as much an art as it is a strategy, and it can be difficult to gauge which sellers will respond better to which methods. We’ll cover some of the most effective negotiation tactics below.

Take Small Bites

It’s tempting to ask for everything you want all at once. It’s definitely faster, but you will find that it isn’t particularly effective. The problem is that you come across as demanding, and the seller just doesn’t want to deal with that. You’ll get better results if you ask for things here and there, slowly, over the course of the negotiations. This can do two things. First, and hopefully what you’ll find in your own experience, is that it actually works to condition the seller to say “yes”, rather than “no”. Second, it can wear them down. You do run the risk of annoying the seller, but it can be effective.

Offer Something in Exchange

Sometimes, getting concessions from a seller is as simple as offering something they want in exchange. This is pretty much the basis of all human interactions in one way or another. It’s even the basis for employment today – you give an employer your time in exchange for something you value, money. What does the seller want, and is there a way to give it to them without coming out the loser in the negotiations? Is there a way that both sides can win? Believe it or not, there is such a thing as a win-win in real estate investing. You just have to find out what is of value to the seller and whether or not it’s something you can part with.

Dig Deep for Intelligence

Being a successful real estate investor means that you need to be very good at ferreting out information that the seller might not really want you to know. For instance, just how motivated are they to sell? If they’re very motivated, what’s the reason? Are they on a firm timetable to be moved to the other side of the country and have to sell before the move? Is there something else at work? Find out what the seller’s motivation is and then play to that. This is particularly true when you’re competing against other investors for the same property.

Be Silent

Silence can be comfortable, or it can be uncomfortable. If you’re comfortable with it, use it as a tool to move your negotiations in your favor. Suppose the seller makes you an offer. Instead of replying either in the positive or the negative, you don’t respond at all. You remain silent, and say nothing. That silence stretches out, and the seller becomes uncomfortable. Perhaps they think they’ve offended you, or that you’re angry about the price they quoted. There is a chance that they’ll budge based on being uncomfortable. Of course, there’s also the chance that they won’t budget, but remember – nothing ventured, nothing gained.

Disarm the Seller

Most sellers are as on edge as you, the buyer, are. This can lead to stalled negotiations. You can turn the tables by disarming the seller. Be humble and agreeable. Point out the things you like about the property (but don’t give ground on your demands). You might be surprised at how much you can gain simply by being nice, rather than being combative.

Walk Away

The final tip is to just walk away. Chances are good that there are similar properties elsewhere in the same area. The seller probably knows this too, and if they see you walking away, they’ll be motivated to at least meet you in the middle.

With these tips, you should find your negotiations are simpler, easier and come out in your favor more often.

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A Few Helpful Tips for Investing in Real Estate Using Retirement Funds (2019 Update)

Your retirement fund is an important tool for ensuring that you’ll have the money needed to live the lifestyle you want once you reach retirement age. Whether we’re talking about a 401(k), a traditional IRA or a Roth IRA, you can invest in a number of different vehicles to grow your wealth. That includes real estate, although most investors are unaware of it. What should you know about investing in real estate using retirement funds, though? There are several important rules that you’ll need to be aware of before taking any action with your retirement fund.

Deposit and Purchase Price

One of the first things to understand is that the deposit and purchase price for any real estate should be from the retirement account. That money cannot come from any other account, and it cannot come from a disqualified person.

Titling Considerations

You cannot put the title of the purchased property in your name, or in the name of a disqualified person. In fact, the title to the real estate should be put in the name of your retirement account.

Can the Real Estate Benefit You?

The only benefit you can receive from the real estate is to ensure retirement success down the road. It cannot offer any sort of immediate benefits, including indirect immediate benefits. For instance, you can’t purchase a vacation home that you’ll use every now and then, or an office in a building that your fund owns.

What Types of Real Estate Can You Invest In?

You can invest in pretty much any type of real estate, from a vacant lot to an income-producing property to timberland, depending on your needs. The primary rule is that you can only benefit from the real estate during retirement, not now.

Can My Fund Purchase Property I Already Own?

No, the fund cannot purchase any real estate that your currently own. Again, you cannot purchase real estate that you will use in any way, as that would be considered an indirect benefit, and is against the IRS’ rules.

How Do You Pay for Property-Related Expenses?

Any money used for the property, say for upgrades, repairs, maintenance or the like, must come from your retirement fund. It cannot come from you, or from a disqualified person.

Can You Use the Income Generated from Real Estate?

Any income generated by real estate purchased by a retirement fund must go back into the fund itself. You cannot use it directly, as that would be considered an immediate benefit, which is not allowed under IRS rules. You can benefit from it once you begin drawing disbursements from the fund after retirement, but not until then.

These are just a few of the important things you’ll need to know about purchasing real estate using your retirement fund. It is possible, but there are strict rules in place. There are also UBIT rules in place governing issues related to loans obtained to purchase real estate with a retirement fund, and other considerations you’ll need to make.

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5 Trends in Commercial Real Estate You Need to Watch in 2019 (2019 Update)

Anyone interested in getting into the commercial real estate game needs to understand that emerging trends can have a major impact on your investing activities and the amount of success you enjoy (or don’t, as the case may be). Whether you’re a seasoned investor or you’re just getting into the act, here are five of the most important trends for 2019 that you need to watch.

Changing Regulations

It’s not just a new year, but the start of a new presidency. President Trump has already said that he plans to strip down Dodd-Frank and make major changes. Those changes will affect you, either for good or ill. There’s also the possibility that some specific banks will benefit more than others, and if that’s the case, there’s the potential for legal action. Again, this may have no effect on you, but it bears watching.

Less International Competition

It’s no secret that American investors have had to fight it out with international investors for prime real estate in many of the nation’s largest markets. That seems poised to change. In particular, Chinese investment may be lightening. If true, this means that you’ll face less competition, and possibly enjoy better pricing, but that remains to be seen.

Fewer Regulations

Tying back into Trump’s drive to strip down Dodd-Frank, you may see fewer regulations in the investment world. The immediate upshot of this may be that you have an easier time securing financing for your real estate investments. With fewer regulations, banks are able to be freer with their capital, but this may also come with increased risk.

Higher Interest Rates

This one has been a long time coming (and it’s not quite here yet, so things might change), but the Fed is finally set to raise interest rates. They are expected to go up by a quarter of a point. This will affect several things, but most notably the interest rate you pay on commercial real estate loans, as well as lenders’ willingness to make loans in the first place. If they’re able to charge more interest, they may be more willing to take bigger risks. There is also concern about the larger national deficit increasing inflation, which may also have a big impact on interest rates.

Alternative Lending Solutions

Finally, there’s a shift away from traditional bank lending. Part of this is due to the ongoing repercussions of Brexit, which is making UK lenders unappealing options for financing, but also to the rise of non-bank lenders. Crowd sourced financing and groups like Blackstone are poised to make a big difference in the commercial real estate industry, so pay attention when choosing your options.

These are just a few of the trends that you’ll need to watch in 2017 if you’re considering or already involved with commercial real estate investing. While none of these trends has really changed the landscape just yet, they do have the potential to have significant impacts on any commercial investments, from individual investors to investment groups and everything in between.

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The Most Important Factors for Investing in Real Estate (2019 Update)

Are you considering real estate as a means of investing and building your wealth? It can be a very rewarding choice, and there are many different ways you can go about it. However, there are quite a few things that you’ll need to know before you make your first investment. There are many factors that you’ll need to understand, and we’ll cover the most important of those below.

Location, Location, Location

You’ve heard that the mantra in real estate is location, location, location, and that’s true in real estate investing as well. It really is all about location. You need to consider every aspect of a property’s location before you determine whether it’s a worthwhile investment option or not. What aspects should you consider? How far is the property from major shopping and dining venues? What about businesses? Where are amenities located, and what’s the prospect for the immediate area in terms of growth and development? Where’s the nearest interstate or major highway? What about warehouse districts or transportation hubs?

Have the Property Valuated

A professional property valuation is a vital tool for any would-be property investor. Why is it important to have an independent valuation done? Simply put, it ensures that you’re getting what you pay for, and that the value of the property is greater (or will appreciate higher) than the price tag. There’s also the fact that pretty much every step of the financing process will hinge on the valuation. The income approach is a suitable valuation method for rental properties, while the sales approach comparison can be used for old and new properties. The cost approach is best suited to newly constructed properties.

Your Purpose

What will the purpose of the investment property be? What is your investment horizon? Both of these are crucial considerations, because real estate has high value, but is not particularly liquid (not in comparison to other investment vehicles, at any rate). There are multiple purposes that you can use here, ranging from buying and using the property yourself to buying and leasing, buying and selling in the short term, or buying and selling down the road. Each offers different benefits (and drawbacks), as well.

Your Income Possibilities

When considering any type of real estate investment, you need to know how you plan to make money. There are multiple ways to do this, and several different combinations that includes more than one way. The income possibilities will affect your number of profit opportunities, as well as your cash flows. For instance, you could expect to only see cash flow from rental payments, and inflation makes this a smart idea. However, you could also expect to reap benefits from appreciation and a sale in the future. Depreciation can be used to offset a tax burden, and it may be possible to provide some minor (less expensive) renovations and reap a higher sale price down the road.

The Loan

Unless you have a significant amount of existing capital (and sometimes even then), you’re going to need a mortgage to take advantage of real estate. Know the type of mortgage that will best suit your ultimate goals for the property, as well as your expected cash flows.

New or Existing?

New construction is sometimes quite affordable (all things considered) plus the potential to customize many aspects. However, existing construction can be even lower priced, although there may be a need to invest a significant amount of capital in renovations and improvements. There is also the question of past ownership when buying an existing property. For new construction, you’ll need to consider the reputation of the construction company, but existing construction will require you to consider the deed and any old appraisals, as well as estimates of maintenance and utility costs based on the past.

Is Direct Ownership Right for You?

Finally, for many real estate investors, direct ownership is a great choice. However, if you don’t want to deal with the hassles that come with being a landlord, indirect investment through an REIT or a similar setup might be the better choice, as these can allow you to reap financial rewards without the headaches that often go hand in hand with direct ownership.

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Top 10 Reasons to Buy Multi-Family Investments in Dallas, Texas (2019 Update)

Multi-family homes are a great investment for many reasons all across the country. And no one who has paid any attention to the real estate market lately can have failed to notice that Dallas and other urban Texas areas are the hottest place to be for real estate investing. What happens when you combine these two investing cash cows? Here are our top 10 reasons to consider investing in multi-family properties in Dallas.

1. Easier Management

When all of your units are clustered in a single property, it’s far easier for you or your manager to take care of the property and tenants. Everything from collecting rent to dealing with paperwork is far more simple when you have multiple investments in one streamlined work flow.

2. Dallas’ Thriving Population

The Dallas area is booming. Not only is it the 6th largest metro area in America, it also ranks in the top 15 metro areas worldwide. In 2014, the population was well over one million and growing, and the rate of growth over the past 15 years has exceeded seven percent.

3. Multi-family Properties Bring Tax Breaks

The government appreciates it when investors provide housing. It keeps the city operating, and it keeps new workers and consumers coming into the city. Investors get tax incentives for providing this service. In some cases, depending on the depreciation of the property, investors could pay as little as no property tax at all.

4. Fortune 500 Companies Go to Dallas

There are over 20 Fortune 500 companies headquartered in Dallas, which not only means that massive populations of employees and their families live in the city, but also that young professionals seeking great jobs are coming to the city as well.

5. Multi-family Properties Hold Value

A properly rehabbed multi-family property will attract a steady stream of income for decades, and that’s a very attractive fact to other investors. Thanks to the assurance of long-term income, it’s possible to sell multi-family properties for top dollar even years after you initially invested.

6. Dallas is a College Town

Over a dozen colleges and prestigious universities call Dallas home, and that means that thousands of students regularly need housing during the school year. Not only that, but the employees and faculty of each university need housing as well. Over all of these colleges, Dallas hosts more than 300,000 students alone each year.

7. Multi-family Properties Appreciate More Readily

Forcing appreciation can be difficult with a single-family home, where you often are stuck with what you’ve got. But a multi-family property can be improved in many ways. Add on-site laundry, add a play ground, make a communal hang out space, or a gym. Any of these could force appreciation.

8. Forbes Put Dallas on the Map

Forbes has frequently featured Dallas as the top city for young professionals, and the third fastest growing city in the country.

9. Dallas Has the Fastest Job Growth Rate

Additionally, jobs are growing at a miraculous rate compared to the rest of the country. This leads to higher demand for fast and affordable housing.

10. Texas Attracts Business Owners

Because Texas has fewer business regulations and tax laws, it’s a haven for business owners. They bring employees, who need housing, and affordable multi-family properties are the best way to capitalize on this trend.

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4 Unexpected Ways to Reduce Risk in Real Estate Investment (2019 Update)

All investment methods carry risk, including real estate. It is crucial for any aspiring investor to understand that. You’ll need to know your risk tolerance before you get started, or you could find that rather than growing your wealth, your investments drain it, instead. With that being said, there are quite a few ways that you can reduce risk in real estate investments, and we’ll touch on four of the options available you might not be aware of.

Insure Your Investment

Insurance is everywhere today, and can be purchased for everything from your car to your pet’s life. If you’re concerned that your real estate investment might head south, there is insurance that you can buy to safeguard your wealth. However, understand that it can be expensive. In fact, there are quite a few different forms of insurance depending on your investment method.

For example, if you flip homes, then you can invest in builder’s risk insurance. If you are worried about how you’ll make payments if your renter skips out, there’s loss of income insurance. There’s actually a form of insurance for just about every threat you might experience. It’s definitely worth looking into.

Due Diligence in Marketing

Did you know that the right amount of marketing and outreach can help reduce your risks when investing in real estate? Yes, it’s true. Think about it – if you’re running into risk, it’s because you don’t have a renter, or because the house you bought to flip hasn’t sold yet. Marketing gets the word out about your property to your intended audience. The more you market and get the word out to the wider area, the more people you’ll reach.

Obviously, the larger the pool of potential buyers or renters, the lower your risk of not having someone move in or take the home off your hands. However, you can bet that if you don’t market at all, you’ll end up with a significant loss. You don’t even have to do the marketing yourself. If you’ve partnered with a property management firm, they can help spread the word. Be proactive about handling your risk, and you’ll find that you face less than you had anticipated.

Keep Your Residents Happy

Whether we’re talking about a single-family home as a rental or a multi-family property, you need to ensure that your residents are happy and well taken care of. What does this mean for a property investor? Simply put, you need to be able to anticipate what your tenants will need, and then supply it before they can look for it elsewhere. You might consider low-flow fixtures to save on utility bills, high-efficiency HVAC systems to reduce electric bills, or something completely different.

You also need to be proactive about maintenance, upkeep and heading off potential problems. If you let something slide for too long, you can bet that your tenants are going to walk away, leaving you with an untenanted property and a loss of income. If nothing else, come right out and ask your tenants what needs to be improved, or what they would like to see happen around the property.

Property Management Matters

We touched on property management a little bit ago, but it bears mentioning once more. A quality property management company can do a great deal to reduce your risk with real estate investment. A proactive firm will help ensure that you have tenants as often as possible, going to great lengths to market the property when one tenant leaves and vetting potential new tenants to ensure the safety of your property and reduce the likelihood that they’ll leave before the rental agreement or lease is up. They can also provide you with important warnings that things are not right with the property, if the tenant is causing damage, or if there’s another issue that needs to be handled quickly.

With these four options combined with the more conventional risk reduction methods, you should be able to ensure smooth sailing for your real estate investing needs.

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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.