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Finding a Property Investment That Will Pay You to Own It!

Do you realise that if you own a positively geared property that it is virtually paying you to own it? Not only are you getting a return on your property investment in the form of capital appreciation but you will also be getting a return in terms of weekly rental excess over expenses.

This is what we mean by being paid to own the asset. You will in effect be receiving capital growth from two perspectives, cash and equity.

If you earn $1,400 in terms of cash from your rental property you may think that a return of that nature on a deposit of $40,000 is not very much return on your money (your deposit on a property). But if you look at the $1,400 cash return and then take into account the average return on capital growth of a property of approximately 7% on a $200,000 property which is $14,000 plus the $1,400, you then have a return of $15,400 annual return on your deposit (cash investment). This value equates to approximately 38% return on your initial investment of $40,000.

That is not a bad return is it? It is a lot more than you would receive if the $40,000 was sitting in a bank account earning 4% interest.

From this evaluation you can see that owning positively geared properties is definitely the way to go.

The only reason that I can see why someone would want to own a negatively geared investment property is if by being negatively geared the expenses will bring their taxable income down into a lower tax bracket. Then there definitely would be some serious advantage in purchasing negatively geared property.

So where do you go to find positively geared property?

There are investment groups that you can contact and they have access to many different types of positively geared properties and as well as that they also have access to different types of investment properties. The other types of properties that they may be able to show you would be Joint Venture Property Development and Land Developments.

When building your portfolio it can be advantageous to have a variety of investments, but it should be pointed out that having in depth knowledge is essential so that you do not put your monies at risk. Seek professional advice when you are planning on investing and make sure you have done sufficient research so that you are comfortable with the decisions that you will be making.

Everyone has a different interest and a different goal with their property investing so make sure you are comfortable with what you have chosen as your vehicle for building wealth.

I’ll Eat My Hat: Marketing Your Vehicle

I’m sure we’ve all seen the quintessential used car ad: an over-weight, sleazy-looking man in a white suit, black bolo tie, and white ten-gallon hat yells at us in an obviously fake southern drawl that he’ll eat his hat if we don’t come see his selection of top-rated used cars (can you say “Show me the Car Fax”?) — while trained seals balance balls on their noses in the background. As crazy as this sounds, this type of commercial comes from an actual ad campaign from the Cal Worthington dealer group in Anchorage, AK. The Cal Worthington ads from the 1980′s were so original, successful, and powerful, they have been used in movies like The ‘Burbs (starring Tom Hanks), referenced in movies like UHF, and altered and adapted by car lots across the world. Most importantly, those ads got people to visit Cal Worthington. So many people visited that they became the leading dealer in Alaska. My father-in-law even bought a new Ford Ranger from them years ago. Getting people in front of you is the point of marketing. If you want to sell your car quickly for top dollar, you have to market your car and get people in front of you.

If you want to get people in front of you and sell your vehicle quickly for top dollar, the question you have to ask yourself is, “What makes me different from everyone else?” What sets you apart from the pack? What makes you and your vehicle unique? This is the most important thing. Everybody knows about Donald Trump. His name is everywhere and on everything: property, buildings, golf courses, food. I even have a Donald Trump necktie at the house. It has his name on the back of it. At some point along the way, he decided that what makes Donald Trump unique is Donald Trump and has spent his life setting himself apart from everyone else. Now anything that has his name attached to it is certain to make money. The same is true of Lady GaGa, Oprah Winfrey, and so on. They have decided to set themselves apart from the pack, and people flock to them by the millions. If you are going to attract people to you and to your vehicle, you have to understand what Donald Trump, Lady GaGa, and Oprah have long understood. What sets you apart is you. Marketing your vehicle is not about selling the car. It’s just a car. Anyone who wants to can find something like it someplace else. Marketing is about selling yourself. It is telling people why they should come to you and spend their time and money buying something from you, instead of the person or dealer down the street with the same car. If you want to have success selling your car, you have to figure out why people should come to you and then spread that message.

Let me give you a very practical example. When a “little old lady” has her grandson post her car on Craigslist, it almost always sells the very first day. People flock to that listing. The phone rings off the hook. Why? It’s a little old lady who’s selling the car. And everyone knows that it is going to be a gently used, low-mileage, well-maintained car. After all, grandma’s been driving it. Well, the reality may be very different. It may not be that gently used; it may not be low mileage; it may not be well-maintained. But people will always assume that it must be clean, because — a little old lady is selling the car. And everyone knows that grandma treats her cars right. As I have said, if you are going to sell your car quickly for top dollar, you have to show people why they should come spend their time and money with you, instead of someone else.

Once you have a story to tell, you need to tell it in as many form and venues as your budget will allow. Fortunately, with the internet, it is becoming much simpler and less expensive to market your vehicle. It is even possible to carry out a successful ad campaign at no cost to you. The first thing you need (after your “why shop with me” story) is a good photo spread of your vehicle. If you don’t have a good digital camera, borrow one or buy one. Do not use the camera in your mobile phone, even if it is a good one. Photos from a mobile phone invariably look like casual snapshots (because they are). This is not the image you want to convey. You want to present the vehicle in its most favorable light. You have to account for lighting, shadows, and many other factors to get professional looking results. A mobile-phone camera is not designed to account for these variables. The best time of day to photograph a vehicle is just after sunrise or shortly before sunset. Natural light is at its best at these times of day. You should include at least 20 – 30 photos in your spread. Do a complete tour of your vehicle. For the exterior, take photos at each corner (corner shots convey a sense of motion); take full side-view shots from each side; take shots from the front and rear; take a photo of a tire to show tread life and of the tire and rim; open the hood and take a photo of the engine compartment; open the rear of the vehicle and photograph it; take a photo of the roof. On the inside, take a photo of the driver’s seat area; take a photo of the instrument panel and steering column; take a photo of the driver’s door to show electronic buttons and switches; photograph the back seat from both the driver and passenger sides; climb into the backseat and photograph the radio and center console areas; photograph the front passenger area; and never forget to photograph the exact mileage and the VIN placard on the driver’s door or door frame. Take your time and do a good job. You want these photos to make a great first impression. Once you are satisfied with the photos, upload them to an on-line repository like Photobucket. You will be able to link to it from your advertising.

Once you have a great photo spread of the vehicle and a great value story about yourself, you are ready to spread your message of vehicular greatness. If you have a Facebook account or other social media accounts, advertise there first. First, the people who link to your social media sites already know you to some extent. It is much easier to tell your value story to someone who knows you. Also, it is entirely possible that someone who links to your social media accounts either wants or knows someone who wants exactly what your selling. Leverage this potential word-of-mouth to your advantage. Be sure to include links to your spectacular photo spread.

From there, you have many different free options for advertising online. Perhaps the most famous is Craigslist. An email address is required for posting on Craigslist. I recommend setting up a separate email account with someone like Yahoo, Gmail, Hotmail, or the like to specifically deal with the sale. This should be done for security reasons to prevent potential spam or other security risks from coming to your regular email account. Another word of caution. Never click a link from an e-mail, even if you think you can trust the source. Often, hackers will imitate a legitimate email format to steal your personal information. Always copy and paste the link into your browser and let your computer’s security protocols filter the link. You will save yourself many headaches, if you heed this simple advice. At any rate, tell your value story in as few words as possible, link to your photo spread, and include contact information. Then get ready for the flood of calls and e-mails, as your story goes out around the world.

Along with Craigslist, you can link to many other classified ad sites. Search for sites that offer free classified ads and pick the one that you find the easiest to use. Also, your local newspaper will often have a place for private sellers to advertise online for free or for only a minimal fee. There is no hard and fast rule here. The trick is to play with different sites and options until you find what is most comfortable for you. Most importantly, you will quickly find which sources are giving you the best response. Stick with those and forget the rest.

And lastly, don’t forget the power of auction sites like E-Bay Motors. Most of these sites are not free. You will have to see if your budget will allow for the expense. However, using auction sites may be very effective, especially if you have a specialty vehicle or a vehicle that is rare. The benefit is that your vehicle will have nation-wide exposure. If you do choose to list your vehicle on an auction site, stick with what works. Be sure to tell your value story (what sets you apart) and include as many photos of the vehicle that the site will allow you to post. For a private sale, never offer any service other than the sale of the vehicle. Always have the buyer make his own travel arrangements, financing arrangements, etc. Doing this will prevent many headaches for you and protect your personal and financial safety.

As you can see, marketing your vehicle requires strategy, time, effort, creativity, and possibly expense. The main thing is to be true to yourself and make sure that you set yourself and your vehicle apart from the pack. With the right combination, you will find yourself a Donald Trump of car selling and you won’t have to eat your hat!

Buying Apartment Buildings

Apartment buildings usually have a myriad of commercial lenders amenable to financing this property offering various loan products. It arguably could be considered the “bread and butter” of the commercial industry in which most individuals who aspire to enter the commercial real estate arena, attack. It has elements of single family and small multifamily tenancy scaled to a larger degree with other elements differentiated from residential property. Regardless, as real estate, apartment buildings have the elements inherent in realty which quantifies its desirability as an investment vehicle. What it shares with the other real estate property types and realty as a whole is:-

Some of the Pros and Cons of Real Estate:-

Pros

a) Potential high yields – investments inherently have the potential for high yields depending on the utilization of the property to maximize its potential, the deal structure implemented, strategies used to add value to project, exit strategies, etc. These can effectively extract a rate of return which compensates for the risk applicable to this form of investment.

b) Leverage – the acquisition of real property and its subsequent refinancing or disposition benefits from the assets class capacity to be leveraged. This increases the rate of return which can be captured from respective projects, decreases the amount of the investor’ s capital tied up in a deal and the extraction of capital from one property through refinancing or resale to facilitate the pyramiding of equity into larger properties, diversification into other real estate categories, other investments, etc.

c) Income Tax Flexibility – real property continues to offer tax write-offs which can reduce the taxable income of investors and investment entities. These are inclusive of the deduction of applicable operational expenses, depreciation, tax credits for projects meeting certain criteria, tax reductions, etc. This can create a scenario where there is paper negative cash flow while the project is operating profitably.

d) High Degree of Personal Control – the ownership of realty can be active or passive. Active ownership of real property affords direct operation or management of the investment and being in a prime position to maintain or add value to the project. This degree of control is reassuring for some people and the tangible aspect of real estate fulfills a security component desired by others.

Cons

Illiquidity – the realty market is imperfect which does not create a readily viable mechanism to sell real estate in comparison to other investments, e.g. stocks, bonds, etc. This generally delegates it to a longer term investment without the ability to dispose of it in response to fluctuations in the market.

a) Large Capital Requirements – the capital required to acquire and maintain real estate is substantial. This is relative, but added to the illiquidity of the investment creates a level of associative risk that deter some individuals from entering the real property investment market. The capital allocated for buying real estate usually represent a large capital commitment for many buyers coupled with the uncertainty of the demise of the project.

b) Constant Management – in order to maintain value, add value, maintain habitability, satisfy tenants, etc it is necessary to constantly manage investment realty. This helps to preserve and protect the investment and it can be a requirement of lending institutions that have loaned funds to the owners, compliance with building codes, OSHA requirements, etc.

c) Risk – investing in real property have substantial risks which can be exasperated with the duration of ownership, specific real estate project, micro and macroeconomic variables, etc. Different investors have various risk quotients which determine their comfort level with real estate projects in various monetary, economic, regulatory, competitive, etc environments.

Various investors will be affected differently by these variables in terms of the profitability they are able to extract from specific properties, the overall success of their CRE portfolio, their capital risk tolerance, etc. However, being aware of some of the potential upside and downside inherent in investing in real estate enhances your capacity to capture the upside and mitigate the downside maximizing the return on your investment capital.