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Building Passive Income
Through Real Estate. Issue 8
Weekly tips and trends in the world of real estate investing. Derived from personal experience and network of contacts. Find out why we feel real estate is the number one investment medium.
11.10.2003
Subscribers: 195
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Welcome to "Building Passive Income Through
Real Estate". This week we are going to be talking about
how to get the most out of your business. I'll identify some
of the setbacks many investors have and why they get burned
out. Anyone interested in reading more about market conditions
acroos the country should check out the following website.
Realtors from across the country give their view of the market
conditions in there areas on a weekly basis. You can check
out their views at Realty
Times.
Secondly, I will also talk about how to maximize
your income with ten easy steps.
Contents:
1. Make your real estate business enjoyable.
2. Ten easy steps to maximize your income.
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Make your real estate investment enjoyable.
by Kevin Davis
Many of my friends that have investment properties become
overburdened with many tasks that they should be outsourcing.
In real estate investing as well as any business, you really
need to understand how much your time is worth. You need to
identify those activities that make you the most money and
concentrate your efforts on those activities. Many times an
investor treats his business as a hobby and tries to do everything
on his own (sorry ladies, I know your out there also, just
bear with my literary license). If you are going to put yourself
into a position where your passive income maintains your lifestyle,
you will need to outsource many activities.
Activities to be outsourced
- Rental Management - While you need to play an active role
in the contracts, etc. The day to day interaction with the
tenants should be made by a management company. You don't
want to be called in the middle of the night, unless you
have to be.
- Repairs and Renovations - Whenever you are considering
to do any repairs yourself, consider what your hour is worth.
If you can be engaged in other activities that produce more
income, that is what you should spend your time doing. Some
people enjoy this type of activity, but the reality is if
you have built a great network of contractors you should
use them and use your time wisely.
- Locating properties - If you want to expand your portfolio
quickly, you should be teaming up with scouts that are locating
the motivated sellers and deals for you. If you have a network
that is bring you 4 properties a month, is it worth it to
you to give them a share of the profits? Absolutely! This
then gives you time to concentrate on the financing and
acquisition process. I feel this is one of the most critical
pieces. It is not agreat feeling to find a great deal, have
it under contract and then run into a snag during the financing.
This can become a costly mistake depending on your contract
and can cost you your profit very quickly.
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Ten easy tips to maximize your income.
by Kevin Davis
- Use interest only loans to
increase your monthly cashflow
- Negotiate the best price and
terms on the purchase, your money is made when you purchase
the property not when you sell it.
- Use open ended questions to
identify the capabilities of your buyer/lessee. You want
to play your cards close to you chest. When using a lease
option, your lessee may be able to provide a better option
deposit than what you had in mind. Also be open to take
other personal property in trade to make up the difference
if they don't have the cash.
- Set your rents as high as
possible. Understand the going rate and then try to add
value through special offers to your tenants.
- Outsource your management.
A good management company will maximize your rents and carefully
screan your tenants making their job easier and more profitable.
Shop around for a management company and try to get one
at 5-6% gross rents. This can be hard in some areas of the
country.
- Use part-time maintenance
labor. Know when to choose a licensed contractor over a
handyman. While some repairs can be done yourself, I feel
it is usually best to outsource this activity.
- Maximize your loan amounts.
As long as the property stays cash positive, leverage your
equity with a loan. Loan proceeds are nontaxable where as
your rental profits are.
- Continuously market your rental
properties. You want to have a waiting list for your properties
rather than scramble to find tenants for new properties
you acquire or when tenants move out.
- Reduce all fixed costs. Any
fixed costs that can be applied to the tenant, the better.
- Structure your business activity
around your personal activity. If you carefully plan your
day to day activities and vacations, your life can become
a deduction
For a recorded conference call with Ron LeGrand,
send me an email at
mailto:webmaster@firehorseinvestments.com
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Building Passive Income Through Real Estate
is published by Kevin Davis, Editor & Contributing Author.
Every week.
You can send your feedback to mailto:webmaster@firehorseinvestments.com.
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Copyright ?© 2003 Building Passive
Income Through Real Estate. All Rights Reserved |
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