DEAN GRAZIOSI: DEAN GRAZIOSI REVIEW – REAL ESTATE FEED BY DEAN GRAZIOSI

With realty prices the lowest they have been in years, some buyers are seeing this as a prime opportunity to invest in the real estate market. But there are some key mistakes that many newbies tend to make when they venture into the real estate investment game.

The first mistake that many beginners tend to make is to ignore the advice that many seasoned investors have to pass on. Walking into the real estate investment thinking you know everything there is to know about investing, you are wrong. Experienced investors have been doing this a lot longer than you have and they know which areas will offer the best return on their money. They have been through all of the ups and downs in the market and are well versed in how to handle them. Many seasoned investors will be glad to offer you some advice and tell you where they went wrong, take the time to listen and you will not make any costly mistakes right out of the gate.

There are many ways to increase the amount of success you experience in real estate investments. Listening to the advice of others is one of the keys, but there are also others that will make your investment successful. The second important thing to know about investing is to know exactly where all of your money is going and what it is being used for. Do not rely on a partner or someone who says they can invest your money for you. Always stay in charge of your own accounting, this will keep you from losing money that others are mishandling. There are many ways that investing in real estate can eat up your finances, knowing what you have coming in and going out will help you stay in control of your investment and not let it get the best of you.

The final mistake that beginners tend to make is to lose sight of their primary goals. If your key area of interest is properties that will sell quickly and have been proven to sell do not get sidetracked into buying properties that do not meet that criteria. Making money investing in properties that have been successful for you in the past is something that you should not forget. Many beginners make their money and jump into another area of realty that they know little or nothing about. Sticking with what is working is important for your success in realty investing. If you would like to move onto other types of investment properties it is important that you do some research first and find out if that move is right for you.

Investing in realty can be very profitable when done the right way. Keep in mind the mistakes that others have made and do your best to avoid them. Doing this will help you choose properties that will likely show you a profit.

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In today’s market there are plenty of available homes for prospective buyers.  That combined with the low interest rates has many prospective buyers considering purchasing the home of their dreams.  But, there may be potential danger to their dream of home ownership down the road.  Along with worrying about their credit rating and income level, there are also five potential reasons that prospective lenders may decline your application for a home loan. 

The first red flag for potential lenders is if you are currently in the middle of a divorce.  Many lenders refuse to approve a loan for couples who are in the process of getting divorced.  The primary reason that lenders tend to deny these applications is that they are worried that a one person income would affect the potential buyer’s ability to make payments.  It is also important that any person who is applying for a home loan and is in the process of becoming divorced not hide the fact from prospective lenders.  The truth will come out when the lender performs a background check on the individual; if the fact that you’re getting a divorce comes out after a background check is performed, you can kiss your loan goodbye.  The prospective buyer could also face charges of mortgage fraud for lying in their mortgage application.

Another area where lenders may have a problem with a potential buyer is if they have recently switched careers.  A potential buyer who has had a change of careers within the last two years prior to applying for a mortgage may find it difficult to be approved for a mortgage.  Lenders tend to be wary when approving buyers who are not established in their careers, even if their income has increased with the new position.  If you are considering changing careers you should probably wait until after you have secured your home loan. 

If you are involved in a lawsuit at the time of your mortgage application, you may find it difficult to secure a loan.  This is true whether you are a defendant or a plaintiff.  If you are a defendant lenders may feel that you may be hit with a large settlement that may affect your ability to make payments on a loan.  If you happen to be a plaintiff in a lawsuit, lenders may fear that if you happen to lose your case you will be burdened with high attorney fees that need to be paid.  If that is the case, lenders may feel that on top of the attorney fees you will have a difficult time repaying your loan.

Making repairs on your current residence is also something that lenders look at when deciding whether to approve your loan.  Lenders feel that repairs being made on a home should be completed before the application process has been started.  Lenders would prefer that any home repairs be completed prior to buyers applying for a new mortgage.

New debt can be a mortgage approval problem.  Lenders look at the borrower’s debt to income ratio and do not like borrower’s ratios at more than 43 percent of their monthly income.  Acquiring new debt, such as a car loan or high balance on a new credit card may put many borrowers over that 43 percent limit.  It is recommended that borrowers not acquire any new debt until after a mortgage has been secured.

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What do you really want from your real estate purchase? It is a question many people fail to ask themselves.  There may be times when an opportunity presents itself out of the blue, but in most cases it is wise to know what you are looking for ahead of time. Home buying can be especially tricky. Ask yourself some basic questions to pave the way to a better home buying experience.

1. Is the home for your own personal use?

Know whether you are buying to live in, to rent or to sell the home. You will be a better judge of all the features if you know your target market – even if it is simply you.

2. How many bedrooms do you need?

If the home is for you, you already have a good idea of the number of bedrooms that is right for you. If you are buying to rent, you have consider how many bedrooms renters in your area generally need and will pay for. If you are buying to flip and sell, find the hottest market in the area. Three bedroom homes are usually very popular, but in some neighborhoods, the ideal size might be different.

3. Home many square feet do you need?

The obvious answer is: as many square feet as you can get for your money. However, there may be limits on either end of the scale that are not acceptable. For instance, you might find a home with too much space is costly at tax time. You have to decide how important that is to you. On the other hand, a home that is a great buy except for being too small is not really such a great buy after all.

4. How is the home decorated?

Many people are swayed by the styles of the ceiling fans, bathroom tiles or kitchen appliances. Sometimes, they are not even aware that these features have influenced their decision. Keep your head about you and do not make a decision on the basis of something that can be easily changed.

5. What is the parking situation?

In most parts of the country, people drive cars. They need places to park them, and it is usually not satisfactory to have to park far from home and walk in. The number of cars that will fit in the garage should make sense for the number of cars that will probably be owned in a household. Another parking factor is whether you have to park straight in and then back up into heavy traffic to get out. That would be a pain for you, and it will scare away many renters or buyers.

These are but a few of the questions to ask yourself when shopping for a home. If you are going to buy a home, or any real estate for that matter, take a day to brainstorm about all the factors that are important to you in your purchase. You should think about the day-to-day life in the home, whether it is for you or someone else. Consider the types of costs that will be involved in running the home. When you have finished, you will have a checklist to bring on your real estate shopping trip.

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There is a growing trend for Realtors to specialize in one type of home or business real estate. The biggest disadvantage of working with a specialist is that you might not be able to see a variety of properties. Yet, there are many advantages of working with specialist Realtors.

Foreclosure Real Estate Specialists

A Realtor specializing in foreclosure real estate is a good person to work with if you want to invest. A foreclosure specialist will know all the places to find foreclosed properties. She will understand the pitfalls of buying properties through foreclosure auctions and the best ways to avoid them. She may have connections with banks so that she can list foreclosed homes very quickly.

Another type of foreclosure real estate is REO properties that banks hold on their books. The Realtor who specializes in REO deals will know how to find the best houses, how to evaluate the properties, and how to negotiate with the banks. You can work with an REO specialist and you will have all the benefits of her knowledge and experience.

Rental Property Real Estate Specialists

You may want to buy an apartment complex or a group of duplexes to add to your investment portfolio. Some Realtors specialize in just such properties. These specialists can help you find the best areas of the city to have a rental business. They can help assure that you get everything inspected and repaired to your satisfaction before you take possession.

Senior Housing Specialist

A senior housing specialist is a Realtor who works with older adults to find homes that suit their needs. If you are a senior looking for a good home for your retirement, you might seek out such a Realtor. The advantage of using a specialist in this case is that someone familiar with the needs of older adults will be quick to spot problem areas like steep steps, low toilets, and difficult maintenance requirements. She can help you find a solution or steer you to a home that is more suited to your age and condition. If you are in good shape physically and mentally, she can help you find a home that will accommodate your active lifestyle now yet still be suitable for you once you slow down.

Green Building Specialist

A Realtor who specializes in ecologically sound homes can help you tremendously if that is your priority. she should know all the features to look for in a green home such as good insulation, solar panels, and water conservation. Also, she should know green contractors who can be contracted to fix up the home before or just after you purchase it.

No matter what your needs, you can probably find a Realtor who specializes in that area.  It may be very helpful in many cases to have a general Realtor to show you a variety of properties and work with you on a number of different types of purchases. If you want someone with deep experience in a specific real estate transaction you want to make, though, you might want to work with a specialist.

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Successful business people know that focusing your business in one direction usually works better than trying to do too much. This is also true of real estate investing. The real estate industry covers so many different property types, regions, and clients that it can be overwhelming without any sort of focus. Niche marketing directs your time and effort to one specific area so you can maximize your potential.

In real estate, your niche market can be a region or neighborhood in your town, a clientele group (such as vacation renters from Europe), or a property type (like renovating historical homes). When you target a specific area in real estate investment, you become an expert in that area. The more you know about your niche, the easier it will be for you to find the right properties and market them to buyers so you can make the most money from them.

Having a focus will help you find the right kinds of properties and not waste time on something that won’t work for you. Niche marketing also gives you a built-in target market. You know who is most likely to purchase or rent from you; if your niche is British vacationers, you won’t spend money advertising vacation homes in Japan.

So how do you choose a real estate niche? Think about your talents and skills. Are you a capable carpenter? Do you know how to wire a room for electricity? You can put these abilities to use by focusing on properties that need serious repairs. Not every investor has the ability to take on these large projects. Perhaps your interests lie in providing housing for public employees in your area. In that case, you might prefer to buy duplexes and triplexes and offer them for a controlled rent for this group of people.

When you work within your own strengths and interests, your investing will be more than just a job. It becomes an enjoyable part of your life. Develop a plan to develop your business, and simplify your life with niche marketing.

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