6 Steps To Becoming A Real Estate Developer

Real estate development can be described as the act of buying real estate, making improvements and then selling the real estate. The improvements usually involve making the buildings better or creating new buildings on the land. Real estate can be very lucrative, but only if you can predict market trends and recognize opportunities. If you cannot do this, you could suffer some heavy losses. Here are a few steps to become a good real estate developer:

Get an degree.
There is not one particular degree that lends itself to real estate development. It is however, important that you study something that is relevant to this line of business. If you want to go into real estate development, it’s a good idea to earn a degree in construction management, business administration, urban development or finance. You’ll also need to take the necessary classes and assessments to receive a real estate license in your particular state.

Work for someone in the real estate business.
Seek out a job that allows you to be involved in the buying, selling or development of real estate. While you’re working in this position, try to absorb as much information as you can about the industry. In the meantime, make sure you’re building up your credit score and your personal savings in order to help you finance your future real estate development business.

Establish your business’ legal identity.
The real estate business can lead to high financial risks. For this reason, you should form a business entity that provides you with liability protection, like a corporation or a limited liability company. When you form an entity like this, you will likely encounter more accounting issues and higher fees than you would come across if you had a sole proprietorship or a simple partnership. However, these issues are nowhere near as major as the personal costs you would face if there was a sudden downturn in the real estate market.

Work alongside professional contractors and construction firms.
Once you’ve set up your company you’ll need to construct new buildings or improve your properties. In order to do this, you’ll need to work with construction firms or professional contractors. Once you build relationships with construction professionals, you will have people to rely on for timely and quality work in the future.

Build relationships with lenders.
The best way to finance your investment activities is to connect with local and independent lenders. When theses lenders begin to trust you, they will give you quick personalized services for competitive rates.

Research market trends.
If you want to be a successful real estate developer, you need to be able to project rises and falls in real estate prices. Sell when prices are high and buy when prices are low. Make sure you get up-to-date information about real estate prices using specialized Internet tools.

Being a real estate developer can be an extremely rewarding and lucrative business if you are able to predict market trends. Follow these steps and you’re bound to achieve a lot of success in the field of real estate development.

3 Reasons You Should Be Investing In Real Estate

After the economic recession of 2008, many people avoided investing in real estate. This was because this era was often linked with the housing bubble and subprime mortgages. But the truth is, real estate is a smart asset class to invest in. When you invest in real estate, you are purchasing a future income stream from property. It is in reality quite unfair that real estate investment is given a bad reputation. Here are a few reasons to invest in real estate:

  1. You can diversify your portfolio.

Investing in real estate can give you incredible potential to diversify your portfolio. The correlation between real estate and other major asset classes is low, and in some cases, negative. This means that if you add real estate to your portfolio of diversified assets, the portfolio can decrease in volatility. This can also provide higher return per unit of risk.

2) The income return is attractive and stable.

One big upside to real estate investment is the sizeable proportion of total return, accruing from rental income over the long term. Between 1977 and 2007, about 80 percent of total U.S. real estate return came from income flows. This leads to a decrease in volatility. Investments that rely more heavily on income return have a tendency to be less volatile than those that rely more heavily on capital value return. In addition, real estate is more attractive than more traditional sources of income return. The asset class usually trades at a yield that is premium to U.S. Treasuries. It is especially attractive in an environment with low Treasury rates.

3) It has competitive risk-adjusted returns.

Data from the National Council of Real Estate Investment Fiduciaries (NCREIF) shows that over the 10-year period from 2000 to 2010, private market commercial real estate returned 8.4 percent on average. This has a lot to do with low volatility relative to equities and bonds. Many critics feel the the reason real estate has a low volatility is that real estate transactions have not been frequent. As a result, property values are often determined using third-party appraisals, which often cause the market to lag. As a result of infrequent transactions and appraisals, there is a smoothing of returns. In an upturn, reported property values tend to underestimate market values. In a downturn, they tend to overestimate market values.

Real estate volatility should be adjusted upward, but real time markets could undergo sudden shocks at any moment. One example of this occurred during the “Flash Crash” of May 2010. In just 15 minutes, $1 trillion in stock market value was erased. When market volatility is an issue and the dynamics of algorithmic trading are murky, real estate is an attractive investment due to its more stable pricing.

While many people will tell you that investing in real estate is a bad idea, this is in many ways a myth. With a stable income return and the potential to diversify your portfolio, real estate is a worthwhile investment.

Top Things You Should Do When Selling Your Home

One of the hardest things you to do on your own while your house is on the market is figuring out how to make your home more appealing to potential buyers. If your house is currently on the market or you’re considering putting your house on the market, consider following the tips listed below to assist you with having an effortless home sale process.

Find a Realtor

Realtors can help with placing your house on multiple listing services (MLS). This can be most helpful when it comes to screening potential buyers before who wish to visit your home. This saves you the time of having to separate the real buyers from the fake ones.

Working with a realtor can also help to make your home sale process safer. Realtors have access to electronic lock boxes that are used to allow other Realtors entry to your home with their buyer’s without you having to be present. This lock box has the ability to track who accessed your home and when.  

Depersonalize and Declutter

Removing the most personal items from your home, such as family portraits, is extremely helpful when trying to sell your home. Doing so, takes out the pieces of the home that are unique to you and helps buyers see the property from a fresh point of view.

Similar to putting away personal items, decluttering your home is a good way to reel in potential buyers. Decluttering will look more spacious to potential buyers if there are less items inside of it. Buyers want to be able to imagine themselves living in the home before they purchase it. Eliminating the distractions of personal items can help them accomplish that.

Tips To Help You Get Your Mortgage

It’s no secret that there are many obstacles that often arise when trying to get a mortgage. Among those obstacles are poor credit scores, not enough money in the bank, or no knowledge of the process.

Here are some helpful tips to assist you in improving the your chances of landing the mortgage loan of your dreams.

Boost Your Credit Score

Your credit score has a significant effect on the type of loan you will be able to receive. You typically need a credit score of 620 or above to be considered  for a standard mortgage. You will also need to have a score of at least 740 or higher to be qualified for the best rates.

The best way to enhance your credit score is to:

Make payments on time

Utilize websites like credit.com and creditkarma.com to check the status of your credit, debt, and payment history.

It is common for lenders to check and then re-check your credit report during your mortgage application process. Missing a payment during this process has the ability to lower your credit score and as a result may have a negative effect on your loan.

“If you miss a payment during the loan application process — particularly a mortgage payment — and the lender re-checks your credit report, it could result in a much lower credit score and could derail the loan application,” said Anastos.

Remember, your credit score can keep you for getting a mortgage or affect your mortgage rate (more on that below).

Pay down your debts

Lenders are more often than not willing to lend money to individuals who do not need it. Therefore, the less debt you have, the more likely it is that you will be approved for your loan.

Make sure your paperwork is organized

The amount of items necessary to apply for a mortgage loan is pretty extensive. Try your best to have any and everything you need before you begin the process.

Items you will need to have include:

 

  • W-2 forms for the past two years
  • Paycheck stubs from the past few months
  • Proof of previous mortgage or rent payments for the past year
  • A list of all your debts ( credit cards, student loans, car loans, etc.)
  • A list of all your assets ( bank statements, auto titles, real estate, investment accounts, etc.)

Three Secrets To Selling Your Home

 

skd273191sdc

Selling your home can be tedious and difficult. Sometimes it seems as if many people are walking in and out of your home, but none of them are willing to buy. We all know that we’re supposed to make the house more appealing for buyers, but it is difficult to know exactly how to go about this. Sometimes it is the little things that make a big difference. Here are a few secrets to help you sell your home quickly.

1) Price It RightThere is a general rule of thumb for pricing a house. Do some research to find out what it is worth, and then shave off 15 to 20 percent of the price. Not only will buyers flock to your home, but they will bid up the price higher than what it is worth. This pricing will give you a competitive edge because most home sellers are afraid to price their homes this way. While it is easy to give in to the fear of losing money by putting your home on the market for less than it is worth, it is the proven best strategy to sell a house in the current market.

2) Prioritize your kitchen

The kitchen in the single most important room in your house when you’re selling your house. It may cost money to remodel your money, but it will definitely be worth it in the long run. In fact, you’ll probably get 85% of your money back. Fixing your kitchen will make about a $10,000 difference in the asking price. If your kitchen looks dated, that $10,000 is likely to be knocked off the price by any smart buyer.

You may be wondering how exactly you can update your kitchen. The quickest and least expensive kitchen updates are getting new cabinet hardware and painting the walls. When picking a paint color, it is best to choose a neutral color so that buyers are presented with a blank canvas. This will allow them to envision their own changes they may want to make to the house. If you have enough money, one stainless steel appliance is a great investment. If people see one high-end appliance in your kitchen, they are likely to assume that the rest are expensive as well, thus creating the effect of an overall update to the kitchen.

3) De-personalize your house

When you show your house to potential buyers, it should appear like more of a house than a home. If you leave a lot of your own personal touches in the house, potential buyers will have more difficulty imagining themselves living there. Put about a third of your belongings in storage. Some important things to put away are personal keepsakes and family photos. You may even want to hire a home stager in order to showcase your home in the best way possible. A stager will arrange your furniture in a way that best displays the floor plan while also maximizing the use of space.

4) Make a great first impression

You only have one chance to make a first impression. In this case, this means increasing your home’s curb appeal. Many people think about focusing on the interior of their houses, but potential buyers judge homes long before they walk through the door. It is a good idea to get some inexpensive shrubs and brightly colored flowers to make the house appear welcoming. You usually get 100-percent return on any costs that went into making the exterior of the home more appealing. It is also important to make your entryway welcoming. While many people typically hang their coats in the entryway, it’s best to change this up when selling your home. A great idea is to place a vase of flowers, a small bench or even some cookies near the entryway.
Selling a home can be challenging, but it certainly doesn’t have to be. A little bit of effort goes a long way in selling your home to potential buyers. Follow these tips and buyers will be swarming to your home. From the kitchen to the curb, make sure your house appeals to buyers and it will get sold in no time!

2016 Real Estate Trends

real estate trends

According to an article posted on realtormag.com, 2015 was quite possibly the best year for real estate since 2007. It is projected that the housing market will continue to expand and might even see even better results in 2016. What’s next for the housing market? One of the fundamental forces leading to this expansion in 2016 is the prediction that the job market will continue to develop, allowing consumers to save money and permit them to buy their first home or move to another one. Here are the 5 trends:

A RETURN TO NORMALCY

Jonathan Smoke,realtor.com’s chief economist, states, “We’ve survived 15 years of really irregular patterns, and subsequent to working off the staggering impacts of the lodging bust, we’re at long last seeing indications of more typical conditions.” There will be a steady and sound development in the sale and prices of homes in the coming year. Sales and new construction are due to return to previously recorded levels.

THE MILLENNIAL MARKET

Millennials deliantaed almost 2 billion deals in 2015 – 33% of home purchasers. It is expected that millennials will play a large role as first-time home buyers in 2016, with many “financially recovered” Generation-Xers and newly retired baby boomers following suit. Smokes states, “Since most of these people are already homeowners, they’ll play a double role, boosting the market as both sellers and buyers,Gen Xers are in their prime earning years and thus able to relocate to better neighborhoods for their families. Older boomers are approaching (or already in) retirement and seeking to downsize and lock in a lower cost of living.”

AFFORDABILITY

Manufacturers have been confronted with higher area costs, restricted work, and worries about the interest of the market at the entry level. All things considered, they have moved to developing more expensive homes, which has created new-home costs to rise essentially speedier than existing-home costs. In 2016, they likely will move to more moderate products in order to meet the needs of “entry-level buyers”.

MORTGAGE RATES WILL INCREASE

Mortgage rates will probably be unstable in 2016. Be that as it may, the latest move by the Federal Reserve to guide loan fees higher ought to push contract rates higher in the new year than the recorded lows they have been at for a considerable length of time. Smoke states,That level of increase is manageable, as consumers will have multiple tactics to mitigate some of that increase. However, higher rates will drive monthly payments higher, and, along with that, debt-to-income ratios will also go higher.”

INCREASE IN RENT

Rental expenses are soaring, and the expenses are liable to just go up in the new year.“Rents are accelerating at a more rapid pace than home prices, which are moderating,” Smoke says. “Because of this, it is more affordable to buy in more than three-quarters of the U.S. However, for the majority of renting households, buying is not a near-term option due to poor household credit scores, limited savings, and lack of documentable stable income of the kind necessary to qualify for a mortgage today.