Property Investment – Help, My Property Won’t Sell

It is commonly said that you make money when you buy, not when you sell. However, often this lesson is not learned until you try to sell a property. I remember the first property I tried to sell. It was a two-bedroom unit in a small complex of eight. A lovely unit… only four years old in an upmarket growing suburb. I was moving to another state in Australia and wanted the property sold, to enable me to buy another home in Queensland.

The property took over 12 months to sell. Three contracts fell over due to finance issues for the purchaser. That was my first experience in selling a property. The emotional roller-coaster was challenging. Initial excitement when the offer was negotiated and accepted, followed by confidence when the contract was signed, followed by disappointment when finance was not approved for the purchaser. The final emotion was frustration when the contract fell over. This happened three times.

Prior to this experience I believed properties took on average three months to sell, depending on the current market conditions. A few years later, we decided to sell one of our properties. This time it took close to two years to sell.

The property was a 2000 square metre property in a beautiful coastal holiday town. The property had zoning that allowed for the development of eight two and three-bedroom townhouses. The property was ideally located on the main road, a couple of hundred metres from the shopping precinct and beach, had two street access and was very close to community amenities such as a child-care centre, school and bus stop.

One month after we purchased the property we were offered $70,000 more than what we had paid for it. We had no intentions of selling the property at the time. Later, on realisation that we did not have the experience, contacts or time to develop the property, we decided to sell it. The first two offers we received were from developers. The offered a 12-month settlement contract. They would pay an upfront amount, with the balance paid in 12 months. This contract suited them. They got to hold the property with little money down. Negotiations could not get the terms of the contract suitable to both parties, and both contracts stalled.

In hindsight we should have accepted the contracts. These were the first two offers we received. We expected more offers to come in that didn’t have a 12-month settlement term. The market turned, developers pulled out of the market, residential construction slowed down and our property took an additional 18 months to sell. Holding a property for an additional 12 months to two years is not good from a cash-flow perspective.

It is important to consider the type of investor you are, before you risk buying a property that is wrong for your investment strategy. Don’t assume you can just sell a property if you need to. When selling, the market is in control. The market determines when it wants to buy, what it wants to buy and for how much. This experience provided one of our biggest lessons in property investing… know what type of investor you are, and be that type of investor only.

Getting Started With Your Home Based Business Opportunity

Are you ready to escape the 9 – 5 routine? Do you want to have more time for your family and friends?

Many Americans are now starting home based businesses because it provides them with the extra cash they need to meet their expenses. It also allows them to have more time for their family and friends.

With tons of opportunities available today, it’s surprising that many have the opportunity to start their own businesses but they decline it. Why? Many are skeptical about running a business online and don’t really understand what an online business is. They also don’t understand how to get started or what works when starting a home based business.

Then there are those who prefer the idea of doing business the traditional way, i.e. building a brick and mortar business.

However, there are several advantages to starting a home based internet business. Here are several:

1. You get to work at home. This allows you to have a flexible schedule and work when you need to, as well as when you want to.

2. Start up costs are really low compared to a traditional business, and you can generally get started for just a few dollars. This makes starting a business available to everyone.

3. You have lots of choices in the kind of businesses you can start, and you can automate many of the processes, like shipping of goods, credit card processing, building your customer lists, and sometimes even marketing.

4. You can create a presence online that makes you look like a big business even when you aren’t.

When first starting your home based business, the first decision you need to make is whether or not you are ready to invest in it. This can be money, or if you don’t have a lot of money to get started, investing your time.

You’ll want to investigate as many business opportunities as possible before spending your money so you can decide exactly what kind of business you want to create. With millions of products available for sale online, the choices you have available to you are endless.

The downside is that with millions of businesses already available on the internet, you’ll need to decide how you will make yourself different. You can do this by offering coupons, free ebooks, or other premiums not available anywhere else. Even if you are selling affiliate products, you can still create premiums for those products.

If you don’t know anything about how to build websites, or how to get traffic, as well as the other start up tasks you will need to learn, then you’ll need to make sure you do your homework first. Laying a firm foundation for your business is crucial to your success, and although these tasks won’t make you money when starting up, don’t neglect them.

Once you get your business started, then I would recommend that you follow the 60/30/10 rule unless you are offering services, then it’s slightly different. Under the 60/30/10 rule, you spend 60 percent of your time creating products, 30 percent marketing, and 10 percent on your admin tasks, like keeping your business books. If you sell affiliate products, then you’ll spend 60 to 90 percent of your time marketing.

Starting a business online is easy. Getting it to make the kind of money you want is a little harder. With a little hard work, you can do it.

Important Real Estate Investment Principles

Before actually setting out to find your first investment property it would be a good idea to set a target profit margin. In other words, decide how much money you would like to make on the project. By doing this you narrow down your property searches to those that are likely to result in an acceptable profit margin to you. Your acceptable profit margin will depend on your location, cost of rehabilitation, your own personal needs and expectations, and the market for your rehabilitated property. Never buy a property that won’t result in a profit that equals your target amount.

Set Cost Limits

Set a maximum amount of money that you will spend to purchase and fix up a property. Never buy a property with fix up costs that will exceed your rehab cost limits. This also allows you to narrow your choices of property to buy and to avoid buying undesirable properties.

Establish a Market Area

You must now familiarize yourself with an area in which to buy property. Your target area should be within a five-mile radius of your home. Eighty percent of all properties you purchase should be within a five miles of your home. You can expand this radius if you live in rural areas.

There are a number of good reasons to buy in your area:

  1. You are familiar and comfortable when close to home
  2. Your network of construction crews and handymen are usually within that radius
  3. You can manage your properties better if they are in your neighborhood. A weekly drive-by can save you thousands of dollars and years of headaches.

Buy Real Estate Right So It Will Cash Flow

Many people believe if they can buy a property for $15,000 to $20,000 below market value they will automatically have a good deal, but they are missing one key elements of investing. What they don’t understand is that if they have to foot the bill for a $200 to $300 negative cash flow each month, their profit will be whittled away in a short period of time. This is especially true in times of slow real estate markets when properties do not sell quickly. The potential profit is worthless until the property is sold. Meanwhile, the owner is stuck with a negative cash flow each month.

So what do you look for in a good rental property? Two things: First, it must be able to attract good tenants, and second, it must be able to produce a positive cash flow within three months of purchase. To get good tenants, you must buy property in areas where there are schools, transportation, jobs, shopping, and churches. Tenants rent neighborhoods, not houses. The only way to be assured that your property will remain rented is to buy in the right areas of town.

Look at properties that you are considering buying through the eyes of a renter. If it appears that the property will not be attractive to tenants, don’t buy it unless you can resell it for a very quick profit. This way you avoid buying properties that will be burdensome.

Your goal is to learn everything you can about your market area. Whenever you have the chance, take a drive and explore new neighborhoods. While doing so you may also come across some good bargains