Archives June 2021

There’s a clever subset of real estate investors who aren’t landlords at all. Here’s how you can make a profit from real estate without owning a single rental property.

Did you know that you can make money from real estate without ever owning a home? Not only is it possible, but many people are doing it right now.  

There’s a subset of real estate investors who avoid the hassle of the three Ts: tenants, taxes, and trash. That pesky trio can make being a landlord a daunting task for property owners trying to eke out meager margins. Plus, the mental load and debt burden can make some think that real estate just isn’t worth it.  

Think again. Here are just a handful of ways to profit from real estate without owning a single rental property.

1. Sublet your rental. 

Subletting happens when a tenant rents out their space to another person who isn’t on the original lease with the landlord. This could be a temporary arrangement while the lessee is away on business or vacation. But it could also be a long-term arrangement where there’s just one lessee who takes responsibility for renting out vacant rooms in an apartment or house. 

If this is allowed in your lease (not all leases allow it), it is highly likely that there’s no limitation on how much you could charge. In cities without rent control, a lessee could demand whatever the market allows. This could mean that the subletter ends up footing the bill for the majority of the rent, allowing the leaseholder to profit from the savings on their own housing costs. 

2. Get into real estate investment trusts. 

Real estate investment trusts, or REITs, function a bit like mutual funds. A company owns a portfolio of properties: commercial, residential, land, and more. They seek investors to pay the development costs and to float operational expenses for the properties they own. And when those properties become profitable, the investors get dividends. 

There are some private REITs, but hundreds trade publicly on the stock market. This form of investing is perfect for someone who wants to be totally hands-off and enjoys hedging their bets across many different types of properties around the country. If you still can’t decide, consider Real Estate Mutual Funds and Exchange Traded Funds (ETFs), which can pool together a few different REITs so you don’t have to pick just one. 

3. Crowdfund your investment. 

Crowdfunding isn’t just for donations and charities anymore. These days, you can invest in major real estate deals by using a very similar funding structure on sites like Fundrise, Realty Mogul, and Peer Street. Each has different minimum investments and vetting requirements, but most people get stuck trying to figure out what exactly is the difference between crowdfunding and a REIT.

Sure Dividend offers a comprehensive explanation, but the main difference is that when you invest in a REIT, you’re investing in a company that owns real estate. In crowdfunding, you and a pool of other like-minded people invest directly in the properties of your choice. Essentially, you cherry-pick the ones you like and ditch the ones you don’t. Either way, you’re not involved in the day-to-day management-and you still get your dividend check in the mail. 

4. Lend a lump sum. 

Hard money loans are a great way for someone with extra cash to make a hefty profit without owning a single piece of property. Essentially, you can lend to a borrower who doesn’t want a traditional mortgage loan. For example, a person who plans to buy a property in cash to flip a house isn’t always able to access a bank loan quickly. So, they search for someone willing to lend a lump sum of cash and pay a premium for it. 

If the loan falls through, instead of repossessing the investors’ car or garnishing their wages, the loan is secured by that investment property. If things go downhill, well, that property is yours. But since seizing the property isn’t your end game, there are many ways to identify a seasoned investor with a great track record of delivering on their projects and getting their investors serious returns. Many loans have high interest rates and fast repayment periods that both parties find mutually beneficial. It is common to see 10-15% returns in just a year or two. And if you find the right borrower, this relationship could be long and lucrative. 

5. Become a wholesaler. 

Wholesaling is simply being the middleman in a real estate transaction. In such situations, a person who is behind on their mortgage or tax payments might be willing to sell their house below market value to avoid foreclosure. People in this situation are often experiencing many other challenges, so the idea of selling their house to unravel their finances might not be top of mind. Also, their home might need repairs that they can’t afford and wouldn’t pass inspection otherwise, making it hard for them to list their place on the traditional market. 

If you can help that person find a buyer who likes the house and is willing to take it in its current condition, there could be money in it for you. Matching the right seller with the right buyer can easily generate $10,000-$20,000 for every deal closed. The drawback is that it can take time to figure out how to find deals. For that, there are mentors and courses to overcome the steep learning curve. The upside is that most wholesalers work virtually from their own home, which means they never even set foot in the properties that are bankrolling their financial future. 
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In this article, we’ll look at the different types of commercial real estate loans. We’ll describe each loan type, who uses them, typical terms and rates, and then look at the commercial lenders that provide them.

Types of Commercial Real Estate Loans

For the following professionals, understanding the commercial loan process is vitally important:

• An investor seeking a new loan for an existing property.
• A developer seeking a loan for an upcoming project.
• A mortgage broker trying to find the right loan for a client.
• A commercial lender of any kind.

In general, commercial real estate loan types can be broken out into three broad categories—loans for investment, loans for development, and loans for businesses.

To cut through some of the complexities of the lending process, and to aid in your property debt research, we’ll look at six different loan types, including new loans and refinance loans.

Conventional Commercial Mortgage Loans

What is a Conventional Commercial loan?

Conventional commercial loans are similar to what you’d get when purchasing a single-family home, but often with shorter terms.

A large portion of commercial real estate investors still purchase property using traditional, fixed-rate mortgages.

Conventional Commercial Loan Terms

Lenders typically require a 25% down payment (minimum) in exchange for a fixed-rate mortgage ranging from 5 to 30 years.

While home loans can last 20-30 years in a lot of cases, commercial mortgages will more often fall in the 5-10 year-term range.

Lenders will order an appraisal to confirm the value of the property, and will want to see a copy of the financials to determine whether the existing rents can support the debt service.

Who uses Conventional Commercial Loans?

Traditional, fixed-rate mortgages are more frequently used by investors looking to buy an existing, occupied asset with positive cash flow.

Investors have to have good credit (700+), but in return, are able to access low-cost capital relative to the other loan products available to investors.

Conventional Commercial Loan Lenders

Most of the big American banks offer conventional commercial mortgages.

From JPMorgan Chase, to Wells Fargo, Capital One, Bank of America and so on, you can usually turn your local big bank for a conventional home or commercial loan.

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➤ “Lender from TD Bank Turns Days of Work to Minutes”

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Lenders might also include other large entities like insurance companies or property investment firms—MetLife and Prudential serving as prominent examples there.

For a list of commercial lenders of all types, you can visit Scotsman Guide’s lengthy lender directory.

Commercial Bridge Loans

What is a Commercial Bridge Loan?

A commercial bridge loan is a source of short-term capital that is often used for debt service until an owner improves, refinances, leases, sells or otherwise completes a property transaction.

For instance, a commercial bridge loan may be used by an investor that has a balloon payment coming due.

The bridge loan may be used to fund the balloon payment before refinancing into a more traditional commercial loan.

Commercial Bridge Loan Terms

The short-term nature of these loans means that they come with a higher interest rate than a permanent commercial mortgage loan.

Generally, commercial bridge loans are intended to provide 6-12 months’ worth of financing before repayment is due.

The interest rate tends to be 50 to 200 basis points higher than a traditional, fixed-rate mortgage – though the interest rate will fluctuate depending on the nature of the deal.

An example of when you might use a commercial bridge loan:

Let’s say you’re under agreement on a 200-unit apartment building that is running at a 30% vacancy rate.

You have an option on the property for $10 million, but your team believes that $2 million worth of upgrades could increase the property’s value to $18 million.

Those renovations will take six to eight months to finish, after which time you should be able to raise rents.

In this situation, you might use a commercial bridge loan worth $12 million to fund the acquisition and improvements. After you complete the renovations, you’d refinance the property into a traditional fixed-rate mortgage.

A 75% loan-to-value mortgage on a property valued at $18 million would be $13.5 million.

At this point, you’d easily be able to pay off the commercial bridge loan, and increased rents would cover the debt service on the new $13.5 million mortgage.

Commercial Bridge Loan Lenders

Lenders for commercial bridge loans are a bit harder to come by compared to conventional loans, and will usually be offered by companies with more robust capital solutions.

Nationwide examples include Century Capital Partners, Avatar Financial Group, Silver Arch Capital Partners, and Money360.

Commercial Hard Money Loans

What is a Commercial Hard Money Loan?

Hard money loans are an alternative form of capital, provided outside of traditional lending channels, either by individuals or companies.

Hard money loans are secured by using commercial real estate as collateral. They’re a source of short-term capital, referred to by Investopedia as a loan of “last resort.”

These loans are used by individuals who need to move quickly in order to purchase, refinance or renovate a property. Hard money loans tend to have lower underwriting standards, but in exchange, have quick turnaround times.

Hard money lenders have a bigger focus on the value and equity of a property rather than the creditworthiness of the borrower.

Unlike traditional or bridge loans, hard money loans are not subject to the same regulations that apply to financial institutions.

As such, the proceeds can be used for a wider variety of purposes without significant scrutiny.

Commercial Hard Money Loan Terms

Hard money loans tend to be used in high-risk situations, or in situations where traditional financing is not an option. Therefore, they tend to be one of the higher-cost forms of capital with interest rates typically ranging between 10% and 20%.

While not appropriate for every situation, hard money loans can be a good source of short-term capital when real estate investors need to move quickly or with a great deal of flexibility.

To put it in perspective, it may take a bank 30 to 60 days to approve and fund a traditional commercial real estate loan whereas a hard money lender may be able to release funds within a week.

Commercial Hard Money Loan Lenders

Commercial hard money lenders include many of the same lenders offering commercial bridge loans across the country.

Examples of nationwide hard money lenders include LendTerra, Prescient Capital, Ajax Funding, and Pender Capital. See some more examples here.

SBA 7(a) Loans

What is an SBA 7(a) Loan?

There are two types of SBA loans that are generally of interest to commercial real estate investors: SBA 7(a) loans and SBA 504 loans. These loan types are those that are backed by the Small Business Administration (SBA).

Both are beneficial new and existing businesses looking to purchase or refinance owner-occupied commercial real estate (more on that later).

SBA 7(a) loans are the most common type of SBA loan. They’re used to help business purchase or refinance owner-occupied commercial properties up to $5 million.

SBA 7(a) loans are often used for working capital, but can also be used to purchase commercial real estate.

SBA 7(a) Loan Terms

Generally, in order to qualify for an SBA 7(a) loan, the owner must put down at least 10% of the purchase price.

He or she must have a credit score of at least 680 and have been in business for at least three years. Loans are often amortized over a 10-25 year period at interest rates ranging from 5% to 8.75%.

The property must be at least 51% owner-occupied, which means a real estate investor can use this for his own business as well as a property in which he has other tenants as well, as long as his space accounts for more than half of the total square footage.

SBA 7(a) Loan Lenders

Many American big banks are also providers of both SBA 7(a) and SBA 504 loans. Wells Fargo, TD Bank, US Bank, JPMorgan Chase, and so on again serve as examples here.

SBA 504 Loans

What is an SBA 504 Loan?

SBA 504 Loans are similar to the SBA loans described above, except the SBA does not have a maximum loan amount.

These loans can be used for up to 90% of the purchase price of commercial real estate, regardless of the size of the deal.

SBA 504 Loan Terms

Loan terms are typically 20 years when used to purchase commercial real estate (10 years for equipment purchases), and have interest rates between 3.5% and 5%. As was the case above, the owner must occupy at least 51% of the property to qualify for an SBA 504 loan.

SBA 504 Loan Lenders

SBA lenders are the same whether a borrower is apart of the 7(a) program or the 504 program. See SBA lenders above.

Commercial Mezzanine Loans

What is a Mezzanine Loan?

Mezzanine financing is often used to fill the “middle” of a capital stack. It can be structured in a number of ways, with both debt and equity.

For instance, it can take the form of junior debt – such as a second mortgage on the property. It can also be structured as preferred equity, convertible debt or participating debt.

Let’s look at each of those in more detail:

Junior debt is typically used as a second source of capital, repaid only after a senior loan is repaid in full. Junior debt can be used for both acquisitions and development projects.

Preferred equity is an equity investment in the property-owning entity with a fixed, preferential return that is paid ahead of distributions to the “common” equity interests in the deal. Preferred equity is often used in joint-venture situations, where investors get a more secured position relative to the equity but a higher yield for being subordinate to the senior loan on the property.

Convertible debt, as its name implies, is a form of debt that can be converted into common equity at specific terms.

Participating debt is a form of capital whereby the investor(s) will receive interest payments and will share in part of the revenue generated by a commercial property above a specified level – including both rental income and sales proceeds. Participating debt is often used to finance commercial properties (usually, office and retail) that have well-known, financially stable tenants with long-term leases.

In all cases, mezzanine financing is subordinate to senior debt, such as a traditional mortgage on the property.

Typically, mezzanine financing is not secured by the property but rather the equity the owner holds in the property.

In terms of the capital stack, mezzanine debt tends to be a riskier position than the senior mortgage debt secured by the property, and therefore, the cost of mezzanine capital tends to be higher than a traditional commercial real estate loan.

Commercial Mezzanine Loan Lenders

You can turn to the Commercial Mortgage Alert’s lengthy list of lenders that actively provide mezzanine financing on commercial properties.

Examples include Apollo Global, Barings Real Estate, and Goldman Sachs.

As you can see, there are a number of commercial real estate loan products available to real estate investors.

It’s important to find a lender that is adept with various programs to ensure you find the most appropriate (and lowest cost!) of capital.

Overview of Commercial Real Estate Loan Types, Terms, and Lenders

With more buyers competing for fewer homes, finding ways for agents to stay relevant is more important than ever. And the best way to do that is to bring in inventory that the client didn’t even know existed. Method is as follows.https://googleads.g.doubleclick.net/pagead/ads?client=ca-pub-0379882813451621&output=html&h=280&slotname=6921188883&adk=1237398969&adf=3661326517&pi=t.ma~as.6921188883&w=804&fwrn=4&fwrnh=100&lmt=1623566000&rafmt=1&psa=0&format=804×280&url=https%3A%2F%2Fwww.jioforme.com%2Fbecome-an-off-market-pro-10-tips-for-finding-hidden-inventory%2F508006%2F&flash=0&fwr=0&fwrattr=true&rpe=1&resp_fmts=3&wgl=1&dt=1623565999721&bpp=3&bdt=774&idt=463&shv=r20210607&cbv=%2Fr20190131&ptt=9&saldr=aa&abxe=1&cookie=ID%3Dd5be4d45705b6ef1-22c265a21cba00fa%3AT%3D1623566000%3ART%3D1623566000%3AS%3DALNI_MZQIeOQ3R8GC5gXLrgpvIcZKw-whQ&prev_fmts=0x0%2C834x280%2C804x280&nras=1&correlator=553423891000&frm=20&pv=1&ga_vid=1380277305.1623566000&ga_sid=1623566000&ga_hid=1693291225&ga_fc=0&u_tz=-300&u_his=2&u_java=0&u_h=1112&u_w=834&u_ah=1112&u_aw=834&u_cd=32&u_nplug=0&u_nmime=0&adx=15&ady=1653&biw=834&bih=1009&scr_x=0&scr_y=0&eid=42530672%2C31060972&oid=3&pvsid=633221091408979&pem=425&ref=https%3A%2F%2Fwww.google.com&eae=0&fc=1920&brdim=0%2C0%2C0%2C0%2C834%2C0%2C834%2C1112%2C834%2C1009&vis=1&rsz=%7C%7CoeEbr%7C&abl=CS&pfx=0&fu=128&bc=31&ifi=4&uci=a!4&btvi=2&fsb=1&xpc=PMAFpJmGRS&p=https%3A//www.jioforme.com&dtd=497

According to 2019 data, there are about 140 million homes in the United States. Census BureauAnd in the regular market, more than 6 million homes are listed and sold annually (by 2020). Most homes for sale In 14 years, the total will reach 6.5 million).

In today’s market, the number of homes for sale is Significantly reduced..For example in February Less than 550,000 homes on the market.. It was half of what was on the market in winter.

Meanwhile, demand from buyers has skyrocketed. Given that more than 99% of U.S. homes aren’t on the market, it was never a fish-rich sea, but the current state of U.S. home inventories is that the wreckage of overpriced buyers dries up. It’s like the bottom of the sea. Desperately around.

For all accepted offers, Number of other highly qualified buyers I don’t have the opportunity to spend their money to find their next home. We’re all starting to be very aware of these stats as it’s become part of the mainstream media story, but it’s certainly a crisis and something that needs to be resolved.https://googleads.g.doubleclick.net/pagead/ads?client=ca-pub-0379882813451621&output=html&h=280&slotname=6921188883&adk=1237398969&adf=3930612886&pi=t.ma~as.6921188883&w=804&fwrn=4&fwrnh=100&lmt=1623566000&rafmt=1&psa=0&format=804×280&url=https%3A%2F%2Fwww.jioforme.com%2Fbecome-an-off-market-pro-10-tips-for-finding-hidden-inventory%2F508006%2F&flash=0&fwr=0&fwrattr=true&rpe=1&resp_fmts=3&wgl=1&dt=1623565999721&bpp=3&bdt=773&idt=466&shv=r20210607&cbv=%2Fr20190131&ptt=9&saldr=aa&abxe=1&cookie=ID%3Dd5be4d45705b6ef1-22c265a21cba00fa%3AT%3D1623566000%3ART%3D1623566000%3AS%3DALNI_MZQIeOQ3R8GC5gXLrgpvIcZKw-whQ&prev_fmts=0x0%2C834x280%2C804x280%2C804x280&nras=1&correlator=553423891000&frm=20&pv=1&ga_vid=1380277305.1623566000&ga_sid=1623566000&ga_hid=1693291225&ga_fc=0&u_tz=-300&u_his=2&u_java=0&u_h=1112&u_w=834&u_ah=1112&u_aw=834&u_cd=32&u_nplug=0&u_nmime=0&adx=15&ady=2325&biw=834&bih=1009&scr_x=0&scr_y=0&eid=42530672%2C31060972&oid=3&pvsid=633221091408979&pem=425&ref=https%3A%2F%2Fwww.google.com&eae=0&fc=1920&brdim=0%2C0%2C0%2C0%2C834%2C0%2C834%2C1112%2C834%2C1009&vis=1&rsz=%7C%7CoeEbr%7C&abl=CS&pfx=0&fu=128&bc=31&ifi=5&uci=a!5&btvi=3&fsb=1&xpc=kzfBQmFRCk&p=https%3A//www.jioforme.com&dtd=504https://googleads.g.doubleclick.net/pagead/ads?client=ca-pub-0379882813451621&output=html&h=280&slotname=6921188883&adk=1237398969&adf=3550788753&pi=t.ma~as.6921188883&w=804&fwrn=4&fwrnh=100&lmt=1623566000&rafmt=1&psa=0&format=804×280&url=https%3A%2F%2Fwww.jioforme.com%2Fbecome-an-off-market-pro-10-tips-for-finding-hidden-inventory%2F508006%2F&flash=0&fwr=0&fwrattr=true&rpe=1&resp_fmts=3&wgl=1&dt=1623565999724&bpp=3&bdt=776&idt=515&shv=r20210607&cbv=%2Fr20190131&ptt=9&saldr=aa&abxe=1&cookie=ID%3Dd5be4d45705b6ef1-22c265a21cba00fa%3AT%3D1623566000%3ART%3D1623566000%3AS%3DALNI_MZQIeOQ3R8GC5gXLrgpvIcZKw-whQ&prev_fmts=0x0%2C834x280%2C804x280%2C804x280%2C804x280&nras=1&correlator=553423891000&frm=20&pv=1&ga_vid=1380277305.1623566000&ga_sid=1623566000&ga_hid=1693291225&ga_fc=0&u_tz=-300&u_his=2&u_java=0&u_h=1112&u_w=834&u_ah=1112&u_aw=834&u_cd=32&u_nplug=0&u_nmime=0&adx=15&ady=2611&biw=834&bih=1009&scr_x=0&scr_y=0&eid=42530672%2C31060972&oid=3&pvsid=633221091408979&pem=425&ref=https%3A%2F%2Fwww.google.com&eae=0&fc=1920&brdim=0%2C0%2C0%2C0%2C834%2C0%2C834%2C1112%2C834%2C1009&vis=1&rsz=%7C%7CoeEbr%7C&abl=CS&pfx=0&fu=128&bc=31&ifi=6&uci=a!6&btvi=4&fsb=1&xpc=M9KHP7zYaF&p=https%3A//www.jioforme.com&dtd=523

The challenge is Increase inventory When the seller seems hesitant to list the homes for sale. Why do sellers hesitate to sell? Are they waiting to see how hot this hot market is? Do they play a stock valuation game where they see home quotes go up every month and figure out when to trigger? Or maybe it’s another obvious concept: “Where do you go if you sell?”https://googleads.g.doubleclick.net/pagead/ads?client=ca-pub-0379882813451621&output=html&h=280&slotname=6921188883&adk=1237398969&adf=600928601&pi=t.ma~as.6921188883&w=804&fwrn=4&fwrnh=100&lmt=1623566000&rafmt=1&psa=0&format=804×280&url=https%3A%2F%2Fwww.jioforme.com%2Fbecome-an-off-market-pro-10-tips-for-finding-hidden-inventory%2F508006%2F&flash=0&fwr=0&fwrattr=true&rpe=1&resp_fmts=3&wgl=1&dt=1623565999727&bpp=4&bdt=779&idt=526&shv=r20210607&cbv=%2Fr20190131&ptt=9&saldr=aa&abxe=1&cookie=ID%3Dd5be4d45705b6ef1-22c265a21cba00fa%3AT%3D1623566000%3ART%3D1623566000%3AS%3DALNI_MZQIeOQ3R8GC5gXLrgpvIcZKw-whQ&prev_fmts=0x0%2C834x280%2C804x280%2C804x280%2C804x280%2C804x280&nras=1&correlator=553423891000&frm=20&pv=1&ga_vid=1380277305.1623566000&ga_sid=1623566000&ga_hid=1693291225&ga_fc=0&u_tz=-300&u_his=2&u_java=0&u_h=1112&u_w=834&u_ah=1112&u_aw=834&u_cd=32&u_nplug=0&u_nmime=0&adx=15&ady=3026&biw=834&bih=1009&scr_x=0&scr_y=0&eid=42530672%2C31060972&oid=3&pvsid=633221091408979&pem=425&ref=https%3A%2F%2Fwww.google.com&eae=0&fc=1920&brdim=0%2C0%2C0%2C0%2C834%2C0%2C834%2C1112%2C834%2C1009&vis=1&rsz=%7C%7CoeEbr%7C&abl=CS&pfx=0&fu=128&bc=31&ifi=7&uci=a!7&btvi=5&fsb=1&xpc=hUyX4qdbc8&p=https%3A//www.jioforme.com&dtd=532

All of these options are probably true to some extent, but it also seems that a high percentage of homeowners built a figurative moat around their lives last year. They are looking for a way to stay protected, yet willing to abandon the drawbridge to sell their home for the right reason and the right price.https://googleads.g.doubleclick.net/pagead/ads?client=ca-pub-0379882813451621&output=html&h=280&slotname=6921188883&adk=1237398969&adf=3863072062&pi=t.ma~as.6921188883&w=804&fwrn=4&fwrnh=100&lmt=1623566000&rafmt=1&psa=0&format=804×280&url=https%3A%2F%2Fwww.jioforme.com%2Fbecome-an-off-market-pro-10-tips-for-finding-hidden-inventory%2F508006%2F&flash=0&fwr=0&fwrattr=true&rpe=1&resp_fmts=3&wgl=1&dt=1623565999731&bpp=3&bdt=784&idt=534&shv=r20210607&cbv=%2Fr20190131&ptt=9&saldr=aa&abxe=1&cookie=ID%3Dd5be4d45705b6ef1-22c265a21cba00fa%3AT%3D1623566000%3ART%3D1623566000%3AS%3DALNI_MZQIeOQ3R8GC5gXLrgpvIcZKw-whQ&prev_fmts=0x0%2C834x280%2C804x280%2C804x280%2C804x280%2C804x280%2C804x280&nras=1&correlator=553423891000&frm=20&pv=1&ga_vid=1380277305.1623566000&ga_sid=1623566000&ga_hid=1693291225&ga_fc=0&u_tz=-300&u_his=2&u_java=0&u_h=1112&u_w=834&u_ah=1112&u_aw=834&u_cd=32&u_nplug=0&u_nmime=0&adx=15&ady=3415&biw=834&bih=1009&scr_x=0&scr_y=0&eid=42530672%2C31060972&oid=3&pvsid=633221091408979&pem=425&ref=https%3A%2F%2Fwww.google.com&eae=0&fc=1920&brdim=0%2C0%2C0%2C0%2C834%2C0%2C834%2C1112%2C834%2C1009&vis=1&rsz=%7C%7CoeEbr%7C&abl=CS&pfx=0&fu=128&bc=31&ifi=8&uci=a!8&btvi=6&fsb=1&xpc=1aBYDqNfbQ&p=https%3A//www.jioforme.com&dtd=542

For the past 12 months, homeowners have come up with ideas for living and working at home and have become more aware of where they live than ever before. This has led some homeowners to sneak up on some old needs and some new wants not being met by their current homes, and ideas on how to farewell to find new homes. I noticed.This homeowner may also have been studying for the last 12 months Real estate as entertainment while they are lying in bed And they became their own experts.

The question has always been how to get the homeowner’s attention and measure their interest in selling. Consider your level of interest, especially if the actual buyer is usually willing to pay a premium to the home to bet. Get them on the market and get what they really want.

Although there are tedious demands for upgrades by homeowners, the requirement to list homes and the physical and emotional effort it puts on all parties remains reluctant to homeowners. Homeowners want the right deals to fall out of the sky. It’s something you can sell personally and perhaps for more money without having to spend time preparing your home.

From the agent’s perspective, it’s more important than ever to be relevant to the buyer’s client’s eyes. And the most powerful way to do this is to bring in inventory that you didn’t know existed when you skimmed the market.

This element of emotion, and in fact better education, is rewarded to agents who have made their clients stand out from other buyers and educated with the loyalty of their buyers.

Agents are well aware that they don’t go anywhere as soon as they get involved in a transaction, but what’s more clear is what the agent’s role will be in the new market.

Smart Agents are now the “Indiana Jones” of the industry, digging into the past Invisible inventory opportunities Just below the surface of what most of the market chooses.

Here are 10 ways to become an off-market professional and find the perfect home to sell and make your clients love you.

1. Stay connected to the market

I’m always talking about real estate. Listen to the tips of anyone planning a move or upgrade and create a mental note. Even better, create a CRM note.

2. Prepare the buyer for a strike

Timing is more important than ever.Make sure the buyer is pre-qualified

3. Do not knock on the door

I don’t want to touch people yet, so it tastes bad.

4. Do not write a love letter

Don’t write unless you may be fascinating or your client may want you Love letter.. This puts homeowners in a very difficult position with fair housing law. Do not include the client’s photo.

5. Become a detective

Find out as much information as possible about a particular home, including previous sales data and information about current homeowners. Use tax records and previous lists.

6. Engage everyone with ideas for unforeseen circumstances

Make it mutually beneficial for everyone.Let homeowners focus on what they can get they Let them know that you really want and the buyer is patiently happy.

7. Better yet, make it mutually beneficial

If the homeowner does not have an agent to use, the rate of double closing is high. Under the right conditions, many homeowners will be happy to use the same agent to facilitate their transactions. Be aware of dual agency limits.

8. Look to the past

Expired list FSBO is a seller hidden behind the scenes.

9. Educate homeowners

Let them know why it is advantageous to sell from the market — it is private and you can make more money for them.

10. Leverage technology

Apps like DropOffer and services like Vulcan7 provide agents with great tools to take advantage of expired lists and huge slices of homes that will sell in off-market areas.

There are still many sellers, but what is changing is the way they want to sell. They want to sell under their terms. If the buyer performs some or all of the above points and gives the client side short-sighted patience, you can find a home that meets your client’s needs in this new and wild market.

https://www.jioforme.com/become-an-off-market-pro-10-tips-for-finding-hidden-inventory/508006/

Part IIIn Part I, we provided tips on how to project the appreciation of a commercial real estate property; however, it is just a byproduct of good underwriting/investment fundamentals and exogenous variables. While price appreciation cannot be completely guaranteed, depreciation of real estate is more of a tactic or strategy. This week, we will look at strategic decisions real estate investors should make throughout the lifespan of an investment. One of the most common strategies to managing a real estate investment portfolio is the exercise of depreciation. Reasons to Consider a Depreciation StrategyBefore we deep-dive into the nuances of calculating the depreciation of a CRE property, you should understand why it is so important. Depreciation offers multiple benefits, but the primary reason for executing this strategy is for tax deductions. Here’s some other tax saving strategies. To get more granular, depreciation deductions reduce your taxable income while your cash flow remains the same. Many even consider depreciation to be just as important as the cash income and potential increase in market value that a property generates. The deductions can even lead to a favorable change in the investor’s tax bracket.Key Items Investors Need to KnowNow that you understand the benefits, what else is important to know when it comes to calculating the depreciation of your property? To start, keep in mind that the larger the investment, the greater the amount of depreciation. Also, the “useful life” of the property does not include the land, just the building and improvements. The Internal Revenue Service (IRS) created the standard depreciation period for CRE to be “fully depreciated” after 39 years. Straight-line Depreciation MethodSo, how do you calculate it? The straight-line depreciation method describes the formula that determines how much a specific asset “loses value” in one year, and then depreciates the asset by that amount each year thereafter. This approach assumes a constant rate (or straight-line) of depreciation. Here is an example to illustrate the process:Value of building (excluding land): $2 millionDeductible annual depreciation: $2 million / 39 years = $51,282.05Taxable income: $250,000/year — $51,282.05 (depreciation) = $198,717.95 As mentioned, these calculations can even cause you to fall under a different tax bracket if you take the time to make these deductions. In fact, in the example above, the investor would go from the 35% tax bracket down to 32%.Cost SegregationAnother useful tool for this topic is cost segregation, or accelerated depreciation. This is essentially a strategic tax planning tool that allows you to increase cash flow by accelerating depreciation deductions and deferring both federal and state income taxes. The ultimate goal is to determine all property-related costs that could be depreciated over five, seven, and 15 years. For example, certain electrical outlets for kitchen appliances or computers could be depreciated over five years.Depreciation Recapture If the property is sold for a gain, this tax provision can be exercised by the IRS to collect on the asset that the owner had previously used depreciation deductions to offset their taxable income. The depreciation recapture is calculated by taking the adjusted cost basis of the asset compared to the sale price of the asset. The gain realized upon selling the property must be reported on IRS Form 4797 as ordinary income for tax purposes. Depreciation recaptures on real estate property gains are capped at a maximum of 25% (2019). When it comes to CRE, depreciation deductions are strategic moves that should be held at a high level of importance when it comes to reducing your taxable income. Keep these items in mind and it will pay off.