The bear necessities of property investment

We are in a bear market. There, I said it!
So often we hear that the very key to a successful property investment strategy is to stick to the basics. Never has this been a more potent cure to the economic disease that investors have to fight off in this recessionary climate. Here are a few ‘gold nuggets’ to bear in mind:

Creative Mindsets

Now this doesn’t imply exotic financing arrangements that got us into this mess in the first place.
At release, the property and stockmarket are going through a very difficult phase where property prices are either growing at sluggish rates or decreasing in many parts across the globe.

Due to this many investors have simply stopped buying properties because their old methods had no effect anymore. Dare I say gone are the days of no money down finance deals, and add to these high interest rates that make property investment proposals seem extremely unattractive.

Ask yourself the question: Have you stopped buying, or is this market the catalyst that increases your property spending?

Warren Buffet, the world’s most successful investor says that the market is a mechanism for transferring wealth from the impatient to the patient. Mr Buffett and his rich friends don’t see the market downturn as an opportunity to scream, ‘The sky is falling’ at the top of their lungs. Rather the opposite is true that for the patient, savvy, ambitious investor, this is an ideal scenario to hunt for great value.

This really drills down to the core issue of differences in our mindsets. On the one side there are the patient value investors that look for an opportunity around every corner – literally! On the other side, there is the more cautious investor that tends to flock with the rest of the masses.

When all is said and done, the truth remains that there are always ways to make money from the property market. It is the difference in these mindsets and our ability to think creatively that separate the property gurus from the struggling investor searching for financial freedom.


Follow a systematic long term approach

Remember that investing in property is not day-trading shares. Although there might be similarities in analysing trends in these two investment vehicles, the time horizons are worlds apart. A successful property investment strategy needs to be underpinned by the realisation that you are in it for the long haul.

Are there short term profits to be made? Off course there is, and certainly this something that you shouldn’t turn a blind eye to. Be alert and make the most of these opportunities. However, true wealth creation is build by implementing a long term strategy of value addition in your portfolio, regardless of market ups and downs.

Transaction Structuring

This merely refers to your ability to purchase property within family trusts, self-managed superannuation funds and a range of vehicles in different tax jurisdictions across the world.
Without getting technical here I would rest my case by merely saying every investor should have a tax-efficient structure in place aimed at maximising your net return. This relates to income -, capital gains, inheritance- or any other related tax.
Yes this requires more work and perhaps the input from professional advisors, but in the end it will amplify the growth in your portfolio to astonishing levels.


The property game has and never really will be rocket science. If you stick to these points and not let fear get in your way, it will provide solid foundations on which you can build a successful property empire.

Real Estate Investing Comes Down to Buying and Selling at the Right Time

Real estate investing could be summed up as "location, location, location," but just as important is the timing, timing, timing! Timing is especially important in real estate investing because:

1. Transactions can take a long time, which requires planning and foresight.
2. All real estate, in all markets, are unique, with dynamic and quickly changing forces.

Because buying or selling real estate is a complex and time consuming process, you need to start it off as soon as possible. While you're waiting for all of the pieces to fall in place, the market can change, leaving you with missed opportunities for higher profits. You need to be able to plan ahead and see future valleys and peaks in the real estate pricing to know when to start buying and when to start selling.

Fixer upper properties can always earn you a good profit. That's because basic repairs and maintenance can increase a property's value by over 10%. If you can do the repairs yourself, that's almost entirely profit. You can also research foreclosure auctions and houses that are on their way to defaulting. If you can strike on a good property quickly, you'll get it for less. And if you get the timing just right with your research, you can find a neighborhood on its way to reinvigoration and see huge future price increases. Local governments can also offer incentives for such areas as they have an interest in seeing it improve as well.

But to be able to perfect that timing and take advantage of the above real estate investing ideas, you need to have capital on hand. This means you always need to have financing at hand. That doesn't have to be huge sums of money in your savings account, that means solid credit, approved financing from banks and knowing the options and limits for loans that you could receive.

When other markets suffer, smart real estate investing can always make a profit. You just need to do all of your research and perfect the art of timing, timing, timing!

Sal Vannutini is the author of " The 8 Power Profit Secrets To Making More Money With Less Risk In Real Estate, " a free strategy report for investors. Get your complimentary copy at http://www.myrealestateinvesting411.com/Realestate/

Are You Investing in This Slumping Economy? Why Wouldn't You?

Monday on "Your World w/Neil Cavuto" (Fox News, Oct. 6, 2008) Donald Trump announced that he is not slowing down his real estate investing activity during our slumping economy. On the contrary, Trump made it clear there are good real estate opportunities to be had at "fire sale" prices that real estate investors should capture.

So how are you reacting to this financial chaos? Are you investing, or has this uncertain financial market got you frozen in your tracks? If you are frozen, you might be missing one of the best opportunities to invest in real estate that we have had in a long time. Consider this:

• There are numerous "fire sale" deals available for real estate property throughout the United States
• Interest rates are still generally favorable
• Our economy will survive, so it's just a matter of time before your investment in real estate is worth more than you pay for it by virtue of a greater demand for it

This is not the time to bury your money under a mattress. Yes, it's comforting to be able to put your hands on it quickly, and perhaps like Donald Duck's eccentric Uncle Scrooge, be able to roll around in it, but it will cost you big time. Inflation alone will devalue your money; your money won't be worth as much next year as this year.

Here's a better suggestion.

First, develop an investing plan. Then locate a real estate professional in your area that understands income-producing property and has a track record for investment property sales and build a relationship. Let him or her know what your investment objectives are and have them start looking for profitable investment opportunities.

If you know enough about the nuances of real estate investing and have a good understanding of your local real estate market, great. Then start kicking the bushes yourself.

The point is not to neglect doing something. This slumping financial market is unnerving, certainly, but our economy will survive and bounce back and what you invest into today will make you money tomorrow. If you have the financial means to invest in real estate without jeopardizing your welfare, then this is not the time to run for cover and hide. Instead, follow in the tracks of the Donald, during this slumping economy, look for, pursue, and seize investment opportunities with abandon.

About the AuthorJames Kobzeff is the developer of ProAPOD - superior real estate investment software since 2000. Want to start working with rental property today? Discover how to create cash flow, rate of return, and profitability analysis presentations in minutes at => http://www.proapod.com

Real Estate Investment Opportunities in 2008 - Are There Any?

Real estate investing is tough at the best of times. What about the worst of times. Is it possible to invest profitably in real estate when the market is like it is right now?

The real estate market is in meltdown right now. House prices are plummeting, foreclosures through the roof, people living in their cars and houses selling for $1. I've been watching a lovely 4 bedroom home in Florida that is listed on eBay right now for a starting bid of $1.

Real estate investing success relies on a few simple parameters. Rising house prices and good rental returns. If an investor can secure a house that will rise in value over time and returns enough rental return to come close to covering the expenses of the mortgage and other holding costs, then that investor will, over time, make a profit.

Ideally the rental returns from the tenants should exceed the costs of holding the property, and it is then in positive cash flow, and the investor makes a return on investment both from the income from the property and from the capital gain as well.

It's all pretty simple really. There's dozens of real estate investment seminars around, however that's the basics. If you buy a home for an investment, and the value of that home goes down over time, you'll lose money.

If you're making a loss on the rental return over time, you'll also lose money unless you can sell that home in the future at a price that is sufficiently higher than the purchase price to cover the rental losses and make some return on capital.

Simple stuff. But hard to achieve, even in the best of times. When the market is good, like it was up until a while ago, you made money if you we're a good real estate investor. If you chose well, bought well and tenanted the property well, you were in front.

Not any more. The basic premise of real estate investing is rising home prices. If you've got rising home prices then you've got a good chance of doing well. Buy just about anything and by default you'll make money.

Now prices are falling.

So right now there are no real estate investment opportunities right?

Wrong. There are good real estate investment opportunities. But if you're trying to find them yourself you're almost guaranteed to fail. There are some professional real estate investors now who are trying, and if you're a professional investor with significant real estate investment experience you may do well. Or you may well do badly too.

But if you're beginning real estate investing now you'd be better to stay out of the market. Unless......

Imagine for a moment.

A solid American public corporation, experienced in real estate investment. Well capitalized with a well thought out proven strategy for investing in real estate regardless of market direction.

The corporation invests in buying homes in demand. Not your McMansions that are on eBay right now, but the sort of houses that millions of working Americans live in right now, or need to live in. Basic properties that exist in their millions right over the US.

With sufficient capital it can buy hundreds of homes at a time. From government, charities or any organization that owns large numbers of homes in a single area. And because it can buy like that it can buy at way below market value. Hundreds at a time purchased in a suburb with all the right characteristics including high demand for rental properties and, in some cases a backlog of demand for up to 15 years.

Then it refurbishes those homes to a high standard. While doing so it spends money on the suburb building parks and playgrounds and community facilities. And within a period of time a suburb has been totally transformed. New community attractions, high quality homes that people want to live in. Suddenly everyone wants to live there.

Up to 40% of the profits are ploughed back into the local community.

Demand rises, people want to live there, both to rent and buy. The corporation has created it's own capital gain, regardless of market direction.

And then it sells these properties to individual investors. No money down, loan provided, tenant provided with a rental guarantee. Immediate equity to the investor of around 15%. The investor owns the property and can hold it or sell it and keep 100% of the profits.

Now that's successful real estate investing in a bad market. But it takes experience, commitment to a community and to the investors, and a solid background of real estate experience, and a lot of capital.

Sound too good to be true? Maybe it's not.


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