Wealth Building Through Land Flipping – Re-Investing Your Profits
Often my clients and students ask me how I made a fortune in Tax Delinquent Real Estate Investing. The answer is obvious, by making over 5000 Real Estate Transactions since 2002 and making money an virtually all of them.
But then I realize that there is more to it than just making deals. The proper mindset also needs to be there in order to consistently make money and in order to build that Fortune up over time.
And this is when I usually get blank stares from my students. All many want to do is do a deal that nets them 20K or 10K or 50K and then go and use that money to buy the Doo-dads and toys they were craving for. While I own a lot of toys and "doo-das", this is not what I recommend any starting investor do.
Instead of taking the profits from your first deal and spending it on that new car, you should take that money and reinvest it in your business. By doing this, you effectively and massively SUPERCHARGING your pool of money to work with an with time can go after more and more and bigger and bigger deals and make more profits.
Did you know that $10,000 invested with a 30% return (something easily available in the Tax Delinquent Investing World) over only 10 years leads to over $137,000, whereas if you take the even only 20% of the profits each year off you will only end up with less than $2600? That is the power of compound interest. Use it and you will succeed, work against it and it will KILL you.
So if you goal is to buy that new car for $40,000 you should not use the first profits right away to buy it but instead you should re-invest it into your business, continue driving that old car you have until you have made enough money that taking a chunk out for that new car barely affects your portfolio.
That is how the rich get rich, and how they drive their cars. Most rich people actually don't drive big cars, because they know what it will do to their future earning. Taking out $50,000 of your investment pool today could translate to "missed earnings" of several million down the road.
By: Jack Bosch
About the Author:
Tucson Land for Sale – Investing in the Future
Nearly everywhere you look on the outskirts of the metropolitan area, you will find Tucson land for sale. Whether you are considering building a home or a business, you will probably find a piece that is to your liking. There are commercially zoned lots, residential lots, manufactured home lots, and even horse properties. When looking for Tucson land for sale there are some things that you need to be aware of before you buy, so that you won't end up making a costly mistake.
Driving around the metro area you will find all different types of neighborhoods and developments with Tucson land for sale . There are luxury home communities in the mountains and foothills of the Catalinas, and Tucson Mountain Park, and family oriented communities like those in South Tucson and Oro Valley, and even some adult communities in the outer areas of the city. Manufactured homes are also becoming extremely popular as a way to use Tucson land for sale. Not only do these areas have land for sale for home builders, but for the shopping, entertainment, and recreation needs as well.
Newcomers to the area looking for Tucson land for sale for a home or a business need to be aware of certain features of the land in the Tucson area. As Tucson is a desert, the soil is sandy and may have to be treated if you want to landscape with grass. Many homes and businesses use desert landscaping to conserve water. However, when it rains, because of the sandy soil and poor drainage, washes that were dry for years can become flooded. Your Tucson land for sale should be carefully inspected for flooding danger.
You will also need to be aware of any easements, liens or deed restrictions on the Tucson land for sale you are considering purchasing. An easement is something on your property that is used by another individual or business. An example would be a neighbor's driveway that goes through your property. A lien is the same as on a home or car. If there are outstanding judgments or debts on the home, they will need to be cleared up before you buy. A deed restriction is something that a seller stipulates. They say how the Tucson land for sale can and cannot be used.
When you are looking to purchase land for your home or business in Tucson, a realtor can help to guide you through the process to help you avoid any mistakes. Find a realtor that specializes in land buying and you can be more confident that the purchase you are making is a wise one and a good investment.
By: Eriani Doyel
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Do the Majority of the Wealthy Own Land in Their Portfolio?
It goes without saying that most of the wealthy and mighty have land in their portfolio, since it is a long-term investment option carrying low-risk and is highly lucrative. Any investor tries to diversify his investing portfolio, as it is the first golden rule of the business. Even the mightiest will acknowledge that to gain maximum result and reduce the chances of high-risk investment, diversification of portfolio is a must.
Apart from other forms of saving like investing in stocks, bonds etc., investing in land has become an attractive option over the years. Even the wealthiest have been quite keen to add land in their portfolio.
What attracts the affluent towards land as an investment option is the fact that you will not lose land in compared to losing money in stocks. Investors are also saved from the hazards. Unlike savings plans and other investments, land doesn't have to cost you an arm and a leg. The right land property can give you a great return on investment. So, the wealthy and mighty are attracted to add land in their portfolio.
One of the greatest assets of land investment is that it is not a short-term option. This is a perfect foil for the wealthy people. They are not in a hurry, don't lack the financial might and are always looking for long-term investment options. Land investment yields profitable rewards in the long run.
The above factors have always made the people go on a land buying spree. Adding land to their portfolio has always been a very attractive business proposition for them as it is highly lucrative and still risk-free. They do not regret adding land investment as a major portion of their portfolio.
So, it is easy to understand that cash-rich millionaires have put behind all other classes in buying land and adding them to their portfolio. Even those who have not taken direct interest in the investment have done it indirectly or in any other form.
The wealthy add land to their portfolio for another reason. Land investment is considered a low-risk option unlike real estate which is prone to terrorist attacks.
After the horrendous attack on twin towers of World Trade Center in New York on September 9, 2001, investment in real estate has become somewhat vulnerable. This has also led to the diversion of cash flow towards land investment. Unlike real estate and the stock market, which are vulnerable to various internal and external factors, land is a pretty safe bet. The wariness of big investors towards stocks, bonds and various other investment options has been a major factor for the high and mighty to turn to land investment.
The bonds and other saving instruments of the government are pretty safe but they don't yield the kind of returns one wants. So, wealthy businessmen are always looking toward land investment as a highly long-term, safe and lucrative investment option and are investing a great deal in this highly attractive instrument.
By: Gregory Akerman
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PreConstruction Land Investing – Why you Should Consider it
Most people think investing in land is only for big-time real estate developers looking to buy large parcels of land for commercial development or the subdivisions of homes. What they don't realize is that investing in land is one of the most sound investment strategies available today and is a viable opportunity for most investors, both large and small.
So why should you consider investing in land, rather then an already improved real estate property like a single family home, apartment building, commercial structure or other improved property? Undeveloped land offers several investment advantages that can not be found in most developed real estate.
The advantages of investing in land...
* Higher profits - Annual Return on Investment
* Ground floor with less risk
* Superior financing terms
* Greater flexibility for maximizing value
* Simple investment management
Regardless if you are looking for a real estate property for investment purposes, or as a site for a future home; investing in land is proven to offer a safer and higher return on your investment than any other financial instrument available today. Traditional investments (stocks, bonds, etc.) over the past couple of years have seen average returns of 4-8%. In contrast, real estate and land investments have realized cash on cash returns of greater than 200%; with less risk.
Why Invest in Pre-Construction Planned Developments?
Real estate investors looking for "ground floor" land investment prospects are finding pre-construction planned developments to be the perfect opportunity. With the majority of land projects being in primary and secondary home locations, a smart investor gains the benefit of being in a desirable neighborhood location with only a small percentage of other investors (less tenants and more owners means more stability).
With price appreciation of second homes rising faster over the past two years (17 percent) than for primary homes (15 percent), many homebuyers see owning a second home as a "you can't lose" proposition, enjoying the fact they can have an outstanding investment while enjoying also great second home location to use for themselves and family.
Real estate experts agree that the near-term outlook for the second home market is strong; even stronger then the primary home market. So what is fueling this booming market for second homes, especially in Florida and the Carolina's.
The Baby Boomer Factor...
* Baby boomers make up an incredibly large % of our population; all moving towards retirement age over the next 15 years.
* About one half of these people have no intent on staying in their current locale when they retire.
* Even though many boomers are ill prepared for retirement, there is still a significant % with tremendous wealth;
* Many of these people want to live in places with good "lifestyles", with 42% of them choosing the South Atlantic area for their retirement.
According to American Demographics Magazine, "The south is the center of a real estate boom of monumental proportions". Searching for a warmer climate and a simpler way of life during retirement are their primary motivation. With close to 75% of potential retirees expressing an interest in moving below the 35th parallel, an estimated 50 million people could be moving to the south over the next 20 years.
It is this Baby Boomer demographic that is driving the appreciation and sales volume of second homes in the south. This marks a new and unprecedented era, as it is the first time in history we have ever seen this kind of significant shift in real estate buying patterns. As we are currently in the very early stages of this major demographic shift, the smart investors are taking advantage of this knowledge, purchasing now and have the peace of mind of a safe and reliable exit strategy when they want to sell. In addition, the smart investor will experience dramatic appreciation during the holding period while reducing their overall risk by focusing on real estate purchases in the South East United States.
At Buy Vacation Condos, we can assist you with the purchase of the perfect parcel for your investment portfolio or future residential home-site in one of these sought after developments. As property values continue to increase at a rapid rate, the time to make your investment is now.
Additional Reasons to Act Now...
* Lock in low payments now. Act now while interest rates are at the lowest they have been in 20 years.
* Little to no effort required (turn-key investment).
* Save money by investing at today's pricing. As more and more investors are taking advantage of these opportunities, the price points continue to rise, sometimes on a monthly basis.
* Availability; the best opportunities available today are the ones that are typically gone tomorrow. When you hesitate, you could miss out on a one of a kind opportunity.
* Invest now at pre-construction prices. The smart investors will purchase their property before all the amenities are in place. Amenities like roads, golf courses, schools, club houses, recreational facilities, nature trails, marinas, boat ramps, swimming pools, etc. all add value to the property. By investing now, you can enjoy pre-construction prices, which are almost always guaranteed to be below the selling point once the amenities are in place.
So whether you are looking for land in a luxury planned residential & resort community, waterfront investment property, golf community land properties, or land sales in pre construction development sites, the LANDDepo.com team is here to help. Bringing you unique, proven investment opportunities from the ocean, to the mountains and every place in between. "Real Opportunity for Real Investors".
By: Doug Lasley
About the Author:
Due Diligence – an Investor Necessity
You need to do your due diligence when investing in real estate. What is due diligence? Here is a simple definition: "The investigation and verification of the details of a particular investment." You can start this process before making an offer, but in the offer you also normally include clauses that allow you to have inspections done, review the books and look at certain documents.
Due Diligence Guidelines
Your due diligence should always include a look into the books and records. Look at the last 24 months income and expense statements, and watch for anything unusual, like expenses that are too low or income that seems high. Review the rent roll, and investigate whether rents are over or under the market rates for the area. You need to see the payroll records if there are employees. Look for surprises, like accrued vacation time that you'll have to pay.
Verify income. There should be rental agreements signed by the tenants, as well as rental histories, which might show if there are any problem tenants or late payments. Rental deposit documents should show amounts and where the deposits are kept.
Examine service contracts and agreements. Do they transfer, or are you free to seek better deals? These could include property management agreements, landscaping, snow plowing, pool cleaning service, and heating and cooling system maintenance agreements.
Walk around with pen and paper for your initial exterior inspection. Note anything unusual or in need of repair. Get professional inspections, if necessary. Verify that the electrical and plumbing systems are up to date and meet current codes. You may also want an estimate of how many years of use the roofing has left. Look at driveways, landscaping, and the condition of exterior paint.
Due diligence needs to include an interior inspection. Learn about the place, the tenants, and any problems you'll have to fix in the coming years. Look for water or fire damage, pest problems, and obvious "problem tenants." Watch for empty apartments that are listed as occupied. Use professionals as needed for pest inspections, safety inspections, and such. The local Fire Marshall may do a free inspection to verify that the building meets current codes.
Call local authorities to see if there are zoning or encroachment issues, or permit problems. Were there been any fire code violations? Were they corrected?
Get some professional help when doing your due diligence. An accountant can decipher the books and notice any problems. A lawyer will not only review your offer and other documents, but can also tell you what other things you should be doing.
Always take notes, and do something about serious issues (have them fixed, adjust your offer, etc.). Usually the problems that investors run into when buying income properties are not unforeseeable. Most of them can be avoided or resolved if you work through your due diligence checklist.
Steve Gillman
Copyright Steve Gillman. See the page: Due Diligence Checklist for a good checklist, and visit the home page for a free real estate investing course: http://www.HousesUnderFiftyThousand.com
Recent Posts
- Wealth Building Through Land Flipping – Re-Investing Your Profits
- Tucson Land for Sale – Investing in the Future
- Do the Majority of the Wealthy Own Land in Their Portfolio?
- PreConstruction Land Investing – Why you Should Consider it
- Due Diligence – an Investor Necessity
- Subdividing Land – How To Unlock The Profit In A Large Block
- Why to Invest in Tennessee Land
- Investing in Land for Development: Cardinal Rules
- Real Estate Investors – Due Diligence Is The Way To Protect Yourself!
- Texas Land Information – Why You Should Bother Investing in Real Texas Land
- The Real Estate Appraisal Process
- Real Estate Appraisal
- Houston Real Estate Appraisals
- Chicago Real Estate Appraisal
- Why Do You Need a Real Estate Appraisal?
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