DC Fawcett-Profit Earning Methods in Real Estate

There are numerous ways to make money in real estate business. They are fixing and flips, long-term rentals, vacation rentals, REIT’s, short-term rentals, wholesaling and non-performing loans are the ways to invest in real estate. The returns in real estate depend on how much money you invest. All types of investment have different levels of risk. DC Fawcett suggests different ways earn the profit in real estate.

Methods to earn profit in Real Estate

  1. Cash Flow – it is the extra profit earned after meeting all the expenses on the property. Say if you rent a house for $2500 and if my expenses are $2000, you make a profit of $500. If you own 10 units like this, the cash flow will be $5000 and so on.
  2. Property value appreciation – If you purchase worth $3, 00,000 and sell it for $4, 00,000 after one year, you earn a profit of $1, 00,000. It means you have become richer by that amount. However, it is combined with the wealth generation team members.
  3. Low pay down – when you mortgage your property, you pay the mortgage amount every month as per the agreement you have made with your lender. The payment consists of principal and interest. The latter is the profit for the lender, but it is the principal amount you pay every month. When the property value goes up every year, your equity increases, which separates property worth and the mortgage amount you pay monthly.
  4. REIT Investment – Stands for Real Estate Investment Trusts. They are purchased in stocks and mutual funds. It is the easiest way to invest in real estate as the trust takes care about the investment amount and handles the market.
  5. Tax Benefits – The real estate investors get tax benefits from the US government. There are many benefits you can get in real estate investment. They are:
    • Whatever cash or appreciation you get into real estate is not considered as a business income.
    • The income tax that is due is considered as an offset is treated as depreciation.
    • When you sell rental properties, whatever profit you earn is taxable on long-term capital gains if there are any.
    • The government offers you 1031 exchange which can be used as tax exemption in order to trade up with bigger and better properties.
  6. Vacation Rentals – If you have purchased a house at the tourist location, you can hire a property manager to help you to rent the house. You can take advantage of vacation rentals during the peak seasons.
  7. Short term rentals – You can go for short term rental properties out of your need or necessity. Many people invest in this and sell it when the value appreciates so as to make profits.

Conclusion

There are several methods to earn profits in real estate. Whatever way you want to choose in this business depends on your requirements. Fix and flip give you huge profits, provided you keep high volume deals and quickly convert it to money

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How To Find Best Investment Rating In Real Estate – by DC Fawcett

DC Fawcett Virtual Real Estate investing club

Real estate investment is one of the best ways to make money. However, it has always been a challenge to find the genuine real estate company.  The real estate investment rating measures the property’s risk-adjusted returns, compared to a risk-free property asset. A real estate rating is an important factor which can be used as a reference to decide about investing in a particular real estate company. DC Fawcett provides the tips to the investors to find the best investment rating in real estate.

How to find the best investment rating in real estate?

Though it has been a challenge to find the best investment rating in real estate, it is not impossible to find. When you think about investing in a real estate company, there will be certain hints which cannot be overlooked. You need to see how many stars it has got and read the reviews that the investors had given. Every company gets positive and negative feedback from the investors, depending on the services they got from those companies. The real estate companies may have a rating based on the number of stars they have. The star ratings are from 1 to 7 with 7 being the highest and 1 being the least. 1 star indicates poor service and 7 stars indicate best service. Here are the critical factors which help you to find the best investment rating in real estate.

  1. Project Developer Quality – It assesses the developer’s track records in estimating the stipulated timelines in the project they are currently handling. It determines the developer’s capacity to complete the project in a given organizational setup and the financial budget to fund the project till it is completed successfully.
  2. Project Construction Quality – It consists of the creative and innovative concepts that are to be used while constructing the building. Green building, amenities, recreational facilities, etc. are the examples of creativity that are used as a constructing a building. The factors involved in this concept are contractors track records, the developers have deployed, the technology used for construction, easy availability of raw materials and labor, which might lead to time overruns.
  3. Project Legal Quality – It refers to clear legal title to the land, government approval status, that includes a 7/12 extract required for the project, which includes land usage, clear environment, clearance certificate etc. for further proceedings. It also covers the sale deed evaluation to make sure that transactions are clear and transparent.
  4. Project Financial Quality – It mainly refers to project funding status, mix funding and the financial flexibility of the project.

Advantages

Investors

  • Investors can locate the best places to invest.
  • They can identify the property that is most beneficial to them.
  • The investors can provide objective criteria and the price range that fits their budget.
  • Can calculate the right and expected rent income.

Sellers and Agents

  • Are able to calculate the best price for quick sale.
  • Helps them to expand their property to national buyers’ pool.
  • Differentiate property values.
  • Build confidence in transaction value.

Lenders

  • Can determine the collateral value of present and future.
  • Evaluate possible loss during foreclosure.
  • Decision to foreclose or loan modification becomes easy.

Conclusion

It mainly depends on the investors to rate the real estate company depending on the services they give and the creativity they use to construct the building without compromising with the quality.