Real Estate Investing: Master Commercial, Residential and Industrial Properties by Understanding Market Signs, Rental Property Analysis and Negotiation Strategies

By Michael K Brown

Master Real Estate Investing.

There is no doubt that investing in Real Estate is the best way to earn passive income. However, there are lots of fine details that one needs to be aware of. This book will provide you with the necessary understanding and tools to master this business. You will learn about:

- Property Valuation
- Commercial Properties
- Residential Properties
- Industrial Properties
- Management of Properties
- Market Signs
- Negotiation Strategies
- And Various Other Topics

• Language: English
• Publisher: Pluto King Publishing
• Release date: Nov 15, 2019
• ISBN: 9781989711163

Book preview

Real Estate Investing

Master Commercial, Residential and Industrial Properties by Understanding Market Signs, Rental Property Analysis and Negotiation Strategies

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Copyright 2018 by Michael K Brown - All rights reserved.

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Table of Contents

Disclaimer

Introduction

Chapter 1: Getting Into the Investment Scene

Why Get into Real Estate Investing?

The History of Investing In the Market

An Option to Diversify One’s Portfolio

A Versatile Field

Chapter 2: What Is Real Estate Investing?

The General Concept

An International Affair

A Long-Term Focus

Restore or Improve Properties

Introducing New Properties

Manage Many Tenants

How Can You Make Money?

Chapter 3: Types of Real Estate You Can Invest In

Residential Properties

Commercial Properties

Industrial Properties

Chapter 4: What to Consider Before You Invest In Real Estate

Review Your Mindset

Watch Your Emotions

Review Many Properties

What Income Do You Wish to Generate?

What Expenses?

Inflation Considerations

Tax Benefits

Your Financial History and Status

How Much Control?

Volatility and the Stock Market

How Long Will You Hold It?

How Long Should the Search Take?

Chapter 5: How Much Money Is Required For Entering the Field?

What Do Properties Cost?

Review Property Values

How Much Up Front?

What is the Length of a Loan?

The Value of Leverage

What About A REIT?

What About a Portion of a Property?

Chapter 6: Should You Hire an Investment Agent?

What Does an Agent Do?

Certification

What Does It Cost?

Should You Hire an Agent?

Chapter 7: Investing in Residential Properties

Types of Residential Properties

What Can You Do With Your Property?

Renovate the Property

Review the Property Based on Functionality

Factors That Influence the Value of a Property

Chapter 8: Foreclosed Residential Properties

Why Would a Home Be Foreclosed Upon?

What Can You Save?

The Three Stages of Foreclosures

The Three Methods of Foreclosing

Review Foreclosure Statistics

How Have Home Values Changed Due to Foreclosures?

How Can You Acquire a Foreclosed Property?

Be Aware of the Risks

Chapter 9: Rental Properties

The Basics of a Rental Property

Types of Rental Properties

Why Would People Use a Rental Property?

A Focus on Tourism

Why Would You Want to Rent Out a Property?

How Would It Be Maintained?

Tax Considerations

Local or Long Distance?

What About Individual Rooms?

Vetting Is Important

Chapter 10: Investing in Commercial Properties

An Investment Is Versatile

Rentable and Usable Square Footage and How It Impacts the Value

How Long Is a Commercial Lease?

Offer a Property to Many Parties

What Drives the Popularity of Commercial Properties?

Review the Motivation

Chapter 11: Types of Commercial Properties – What Works For You?

Retail

Office

What Works for You?

Chapter 12: Industrial Properties

What Types of Industrial Properties Can You Invest In?

Can an Office Be Included?

The Three Sizes of Industrial Properties

Chapter 13: Analyzing Industrial Properties

How Is It Organized?

Review the Size

Utility Usage

Added Insurance May Be Required

Chapter 14: What About Bare Land?

About Land Purchases

Where Can the Land Be Found?

How Much Work Is Involved?

Chapter 15: Local or Long-Distance?

Local

Long-Distance

Chapter 16: Property Valuation

Reasons Why the Valuation Process Is Critical

Hiring an Inspector

What Does the Inspection Cost?

The Inspection Process

Why Would a Valuation Be Low?

Chapter 17: Finding Hazardous Materials In a Property

Radon

Asbestos

Mold

Lead Paint

Lead Pipes

Chapter 18: Structural Issues In a Property

What Problems Can Develop?

How to Resolve the Issues

What Will it Cost?

Chapter 19: Planning a Purse Offer

Base Your Offer on the Right Factors

What Is the Seller’s Price?

The Prices of Other Properties In An Area

Review the Market

Unique Features Relating to the Property

Additional Considerations

Chapter 20: Monthly Payments

Interest Charges

Property Tax

Other Fees

Chapter 21: Dealing With Multiple Offers

Make Many Bids If Possible

Look for Multiple Properties

Can You See What Others Are Offering?

Chapter 22: Getting Sellers to Compete For You

Use Fewer Contingencies

Keep Your Finances in Check

Respond Quickly

What About Counter Offers?

Chapter 23: Cash or Financing?

Cash

Financing Through the Seller

Common Expenses for Both Choices

Use Cash If...

Use Financing If...

Chapter 24: The Auction Process

The Basic Concept of the Auction

What Will You Find at an Auction?

How Many People Can Participate in an Auction?

How to Participate in An Auction

What If You Win?

Watch for Emotions

Sealed-Bid Auctions

What If There’s a Tie?

What About an Online Auction?

Review the Buyer’s Premium

Can You Really Save Money?

Vital Terms to Watch For

Chapter 25: The Value of Title Insurance

What Is a Lien?

Why Would a Lien Be Hidden?

How to Get Title Insurance

Chapter 26: Legal Concerns

Review the Property Valuation

Due Diligence

Evaluate the Financial Risk

Liability Considerations

Commercial Liability Considerations

Chapter 27: Zoning Rules

What Are Zones?

What Restrictions Can Be Put into Place?

Types of Zoning

Challenging a Zoning Rule

Alternative Options to a Challenge

Chapter 28: Tax Advantages

Capital Gains Tax

Living In a Property You are Flipping

Depreciation Expenses

No Taxes on Appreciation

Chapter 29: Market Signs (Both Positive and Negative)

How to Tell if a Property’s Value Is Going to Increase

How to Tell a Property’s Value Will Decrease

Corporations Relocating (In and Out)

New Construction Work

Millennials May Help

Foot Traffic

Public Space Considerations

Who Else Is Moving In?

For Rent Signs

School Quality

The Value of the Hospital

Chapter 30: Sales Analysis Report

Where Can You Get a Report?

Demand For a Property

Analysis of Expired Listings

Who Is Buying Property?

Chapter 31: Estimates

Past Values

Local Sales

Specific Features of Properties

Commercial Operations

Is This the Official Price?

What Can You Use Online?

Chapter 32: Actual Sales vs. Projected Sales

Actual Sales in An Area

Projected Sale Comparison

A Good Analytical Point

How Great Should the Difference Be?

How Long Should the Report Go Back?

Chapter 33: Potential Income Analysis

What the Income Measures

Why Is It Called Potential Income?

Don’t Forget Expenses

Success Is Up to You

Chapter 34: Negotiation

What Will People Ask During Negotiations?

Understand the Property

Concessions Are Expected

Decide onYour Concessions

What Will You Concede?

What Will You Get in Return?

When Should You Make the Concessions?

Can You Withdraw a Concession?

Is Splitting the Difference a Good Idea?

Keep Track of Concessions

Trust Is Vital

Compare Other Properties

Chapter 36: Negotiation Strategies

Nibbling

Hot Potato

Good vs. Bad Guy

Desperation

Illustrate Empathy

Chapter 37: Planning a Favorable and Profitable Contract

A Bilateral Deal

Avoid Unilateral Deals

Purchase Price Setup

Identified Parties

Break Clause

Length of Lease

Length of Sale Agreement

Protection Clause

Exclusion Clause

Description of the Property

Chapter 38: Contingencies of a Contract

Appraisal

Inspection

Roof Inspection

Sewer Inspection

Selling an Existing Home

An Important Note

Chapter 39: Working With a Real Estate Investment Trust

What Is A REIT?

What Does A REIT Include?

What to Find In a REIT

How to Get Into a REIT

Pros of a REIT

Cons of a REIT

Chapter 40: How to Increase the Value of a Property

Repair Your Property

Remove Anything Dangerous

Add More Room

Establish a Better Sense of Curb Appeal

Common Mistakes When Repairing or Renovating

Convert Individual Spaces In a Property

Reduce Operating Costs

Chapter 41: Gentrification

What Is Gentrification?

Where Does Gentrification Take Place?

Who Are These Gentrifying People?

Common Signs of Gentrification

Concerns Relating to Gentrification

Chapter 42: Being a Better Landlord

Verify All Clients

Always Follow the FFHA

Be Cautious With Tenants

Establish a Good Policy For the Use of Your Property

Process All Move-Outs Carefully

Friendly Ideas For a Landlord to Consider

Chapter 43: Hiring a Property Management Team

The Management Team

When Would a Management Team Attend Your Property?

Can the Tenant Do Any Management?

Hiring a Management Team

What Will the Service Cost?

Chapter 44: Heirs to Your Investments

A Few Basic Choices

Rules for Taxes

Deed Transfer

Conclusion

Disclaimer

Although investing in real estate can be an intriguing option for earning money, you must be aware of the risks involved with holding a real estate investment. All properties on the market may be subject to losses.

Talk with a financial advisor or other consultant before getting into this field of investing. Discuss your plans for investing and review all risks carefully. Be advised that there are no guarantees that your investment plans will result in a profit. All real estate properties are at risk of losing their value.

Be aware of the assets you have on hand before you get into an investment as well. The expenses associated with investing in real estate may be very high depending on what you plan on utilizing for your investment desires.

The information in this book is intended for general information purposes only. This book does not provide any legal or tax advice. The author and publisher disclaim any liability in connection with the use of this information.

Ask a tax professional or other financial expert for additional assistance if necessary or to see what might apply within your specific situation.

The writers, producers and sellers of this guide cannot be held responsible for any problems that might come about during the investment process. Be cautious with how you invest in a property and for how you take care of its physical features. Be aware of what you may do with any tenants who get into a space as well.

Also, the points listed in this guide are made with investors in the United States in mind. Most of the content is universal and can be utilized in Canada, the United Kingdom or other countries that people can invest in. However, the rules might vary by country. Check with the laws in the country you wish to invest in to learn more about how you can invest in a property.

Introduction

Investing is a thrilling activity that gives people the opportunity to make large amounts of money. This is all about purchasing assets in the hopes of making money off of them. People have been investing in various assets for generations with varying levels of success. However, it is a big part of life that no one can truly resist. Investing is all about finding ways to take one’s money and stretch it out as well as possible.

Because the investing field is so massive, it is often a challenge to try and find something that you might want to invest in. You could invest in practically anything from new business endeavors to commodities that are traded and used on the daily market. The options are vast, but in the end, it is up to you to figure out what you should put your money in. One option you can consider when finding an investment entails real estate.

The exciting world of real estate investing is something anyone could enjoy entering into. When you invest in real estate, you are working with a property that can be high in value and could easily become profitable depending on how you run it. You could restore the property or even rent it out to other people. You will often have full control over what you want to do with your property.

The best part of investing in real estate is that you can get any kind of property that you want on the market to work for you. You could not only find a traditional home but also a larger commercial or industrial space that you might be interested in. Whatever it is you have a desire for, you can surely get it on today’s market.

In order to get the most out of real estate, you have to know what you are doing when investing in it. You have to identify what properties are best for investment purposes and what you can get out of them. You must also understand what is available for your use on the market.

This guide includes information on everything relating to how to manage real estate. This includes a look at different types of properties you can utilize, how you can get a property ready and so forth. The information includes many details relating to how you can find a great property and what to figure out when finding something of value.

You will also learn about not only how to plan your offers for a property but also what to see before you actually place your offer out on the market. Some properties might have hidden issues that need to be resolved. Others might simply need to be inspected to see how much they are worth. You can even work with foreclosed properties or even acquire property through the auction block.

Additional points on negotiations and taxes are covered in the guide as well. You will also learn about what you can do to quickly increase the value of any property you invest in. Points of being a good landlord for any tenants you wish to incorporate into our property investment are covered as well. The extensive information featured within this guide will help you to identify everything you need to know about the market and what you can get out of it.

The overall process involved in this guide might take weeks or even months for you to carry out. Your real estate investment is something you cannot afford to short-change. You have to work as hard as possible to show others that you are serious about a deal and that you really want to get into the real estate market. Knowing what to do to make any deals you do work out right in your favor helps as well.

All the points included in this guide will help you see what you can get out of a quality property. Be sure to see what is listed here so you have an easier time with finding a property you will want to stick with. Besides, there is always a great chance that you might get a good profit off of the market. But it will only work when you understand what you are doing while having a strong plan in place for getting a property that you want.

Chapter 1: Getting Into the Investment Scene

Everyone has their favorite things in which he or she likes to invest. Some people invest in stocks and bonds. Others like to stick with commodities. One thing is for certain -anything could be worth investing in. All a person needs to do is find something where the value is surely going to change.

The goal of any investment is to buy low and sell high. It is a simple routine that makes investing all the more inviting and worth trying. Best of all, there is no real way to tell how high something could rise in value. Then again, there is also the chance that the investment might decline in value.

The buy low-sell high mantra is a point that can be said about real estate in particular. You might have read stories over the years about real estate properties changing in value. You could have even heard about how the real estate market is a barometer for the entire economy. That is, the economy might be in good standing when real estate values increase. Sometimes a property might even be worth twice its value down the line.

The world of real estate investing has been growing over the years. People are learning more about how to find real estate. They are starting to recognize the tax benefits of investing and how the market works. The online world has made it easier for people to invest too, as people are able to find properties through various websites. Even reality television programs about investing in individual properties have helped get the industry to grow and thrive.

Investing in properties can be worthwhile provided a property is managed correctly and you understand the signs in the market. The potential for you to make a sizable profit in the real estate market could be great, although you would have to look at many market factors.

This guide is all about helping you make the most out of your real estate investment plans. You will learn about many aspects relating to finding properties and how to get more out of a transaction. You might be wondering why real estate investing is such a good idea.

Why Get into Real Estate Investing?

You have many options to choose from when you decide to invest. Getting into the real estate market is not something to take lightly. It costs lots of money to enter that investment field. When finding a property you wish to invest in, you will have to carefully look at the many options in the market. You will have to put in more effort into finding real estate than any other type of investment. So what would make you want to enter this particular investment market?

The reasons for getting into real estate investing are plentiful. You will benefit from investing if you learn all you can about the field and study how to make money in real estate.

Protect Yourself from Inflation

Inflation is a vital concern that must be considered when you a look at anything you wish to invest in. This refers to the rate at which the cost of living is increasing. The purchasing value of money will start to decrease when prices of different goods start to increase. To some, it is an annoyance when the prices of different products on the market suddenly going up in value and cost more to buy. However, it is actually a very important concern worth exploring.

Inflation is a natural part of any economy. The problem is inflation rates could outpace the returns on your other investments. This could be a real problem depending on what you are making from those investments. For instance, you might be earning interest in your bank account if you have lots of money in that account. Have you ever considered that the interest rate in that account might be less than the inflation rate? The power of whatever you have in your account might be minimal after a while.

Real estate is a worthwhile investment because it protects you from the serious effects of inflation. As the economy expands and inflation increases, the values of properties will also increase. Rents go up and the prices for other properties in an area increase as well. The potential for real estate to move alongside a traditional inflation rate is strong as there will be no need to worry about your investment decreasing in value over time due to this natural part of the economy.

High Tangible Asset Value

The tangible value of a property refers to the physical value. The value specifically relates to things that someone can actually touch and experience. A real estate property has a high tangible asset value because it is something that people can use. In other words, you have a complete physical hold over the asset you are investing in.

The tangible values of assets on the investment market are often not as great as you might wish. For instance, a commodity investment like oil or livestock might not have tangible value. This comes as you don’t actually have literal possession of barrels of oil or possession of livestock. You only have contracts that allow you to sell a certain amount of a commodity at a particular rate at some point in the future. With a real estate investment, you have full control over some special property of interest to you. You will be able to physically control that asset in any way you see fit.

Real estate properties always have values attached to them. This is different from many other assets that don’t have any tangible values. There is a potential that an asset that does not have a tangible value might decline in worth as the demand for it becomes too low. For instance, a traditional stock does not have much of a tangible value because there is always the potential the value might go down to zero. This could happen if the demand is low enough so that stockholders would sell off their stocks. You would not have much control over what the company in which you own stock can do either. It could be easy for the company’s stock to decline dramatically without much warning.

Property and the land it is based on will always have some kind of value attached to it. There is no real chance that the value of it would disappear. There is always some use and value for a property. People will have a need for a property regardless of its value and what it is worth at any time. The potential for such a property to be valuable and for it to stay active and viable is always strong. As you will see throughout this book, there are many things that will directly impact the tangible value of a property.

It should also be noted that a real estate property, unlike some other tangible assets, has a better chance of its tangible value increasing. Real estate is designed to last for generations. An investment will not decrease in value over time. A vehicle will eventually wear out and break down in time. Real estate will last forever if managed correctly and taken care of properly.

Tax Benefits Are Available

You can also take advantage of various tax benefits when you invest in real estate. This is something that will be covered later in this guide, but it is a point worth checking. You could get various tax deductions on some of the many things associated with your property investment. These deductions can be very valuable and will keep you from losing large amounts of money on your investment due to those taxes. There are various rules and stipulations associated with the tax benefits, so learn what you can do and when you can do it.

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