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REITs - Real Estate Investment Trusts

They offer high liquidity; it's easy to enter and exit an REI investment Trust. A REIT corporation or trust generally doesn't pay corporate income tax to the IRS or to the state. Disadvantages of Public REITs. A downturn in a specific investment area can seriously damage a REI investment. However, this possibility can be reduced by investing in REITs that own diversified companies within a variety of industry sectors. Another disadvantage of public REITs is that they generally don't perform as well as the stock market on a long-term historical basis. Privately-Owned REITs These trusts possess all of the advantages of public REITs. In terms of disadvantages, the upfront fees can be higher than with public REITS and such trusts are also not as liquid. In other words, it can be tougher to cash out than with public REITs. A third potential disadvantage is limited transparency; that is, investors may not know exactly what the trustees are doing on a day-to-day basis. Methods of Investing in REITs You can buy private equity tokens or shares of individual companies, or you can invest in diversified REIT mutual funds. It's very easy to invest through such vehicles as an IRA, Keogh, etc. You can also invest through borrowed money to buy REIT shares on margin. Key Point: Use REITs for long-term investing strategy. In a developing economy, the world of investment is changing everyday and so is the investment strategy of investors. In a developing economy, the world of investment is changing everyday and so is the investment strategy of investors. A large number of real estate investors consider real estate patterns or changes before investing in a residential or commercial property. There always exist some recession proof properties. Economic recession has revealed bluntly which homes still hold a value in a recession and why. A recession proof property investment will help you get great rewards and earn a lot of profit. Basically, the real estate or buying a property mainly depends on the type of choices you make and decide to purchase which capital growth investment  to earn benefits. Most investors purchase commercial properties for one main reason other than cash flow and its appreciation. Unlike residential property, commercial property goes up in value much quicker and when the rents increase the NOI goes up when the NOI goes up the value goes through the roof. Real estate investment should be looked at as a great investment, with patience and longevity kept in mind. If you are looking for some helpful tips before investing in Bangalore real estate, you are on the right page. In Bangalore, the demand for Property is on the rise. In fact, according to the reports released by PwC and Urban Land Institute, Bangalore is on the list of top property market investment hub of Asia. Without further ado, let's take a look at some important tips that can help you invest in real estate in Bangalore. Read on to know more. The most important factor to consider before investing in real estate is the location. Normally, locations are considered good if they offer all the basic amenities that we need. Plus, these amenities add to the value of your property. After all, curb appeal can make a huge difference. Usually, people buy real estate with the intention of earning a return on investment. Therefore, you may want to make sure that the property you are going to buy offers the best return on your investment. After all, you don't want to suffer a loss. If you want to predict how a certain area will perform in the future, find out how it's doing currently. What follows are some random thoughts on the Income Property marketplace as I see it, and from what I've heard on the street. By no means am I an economist. And I don't think that anyone can accurately predict the future. The Commercial Property Market is very dynamic and constantly changing. But it is interesting to hypothesize and to see how close we can come to predicting the future. Use these thoughts as an add-on to what you've already experienced and are currently experiencing. The more views you can get, the better you will be at understanding this dynamic marketplace and be able to make up your own mind as to how the future will unfold. I've been told by several economists and market pundits that the current economic climate can be characterized as an "Atypical" Recession with an "Atypical" Recovery. Okay, but what does this really mean? Obviously, in simple terms, it basically means that we are not in your typical recession and recovery scenario. No successful investors invest completely by themselves. They either try out courses or books that are created by successful investors, or they take the time to actually seek out successful investors who can give them advice. Networking is an essential part of Rei investing, because it allows you to learn about investing from experts who know how it is done. 4) Make it a business - complete with a business plan. Real estate investors are professionals. They run their investments like a business so make sure to see their real estate investment model. They have a separate phone line for their business dealings, they dress the part, and they design a business plan that tells them where they are headed. Real estate investors also set goals for their businesses, rather than just hoping to make "some money" from properties. The more professional you are about your business, the more likely you are to succeed. 5) Always do the math on paper. You may think that something it a terrific real estate opportunity or a great investment, but is it really? The only way to know for sure is to add it all up on paper. What is the total cost of purchasing, renovating, and managing the property? Also, how much can you reasonably expect to receive for the property? Until you do all the math on paper and estimate reasonably, you can't really tell which real estate deals are good and which ones are duds. These basic tips are what real estate investors use in order to turn properties into real investment opportunities. Use these tips and you will be well on your way to successful investing as well.

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A Guide To Commercial Real Estate Loans

Isolated incidents should not affect your ability to get a loan. How Can You Repair Your Credit? In most cases, a simple letter or phone call to the credit card company or business that originally gave you the credit can put you on the right track to having that scar removed from your report. It may not even be necessary though, based upon your recent credit patterns! Sometimes theyll require you to pay-off the balance of your debt or send in a letter explaining why you were late with your payment. Dont pay any creditor off without talking to a qualified professional financial advisor or mortgage consultant first! However, if you have a history of recent late payments, youre probably going to have to let time take its course (although there might be trick or two here you can use). There are a million scenarios I could review, but I think its important you walk-away with two key thoughts from this: 1) Your credit can make or break your ability to acquire a loan; and 2) you must know what is on your credit report, your credit score, and begin to examine and, if necessary, repair any credit problems immediately. What Role Does Your Investment History Play? Your investment property loan history or track record will play an important role in whether or not a lender will want to finance your next property. Investment properties, and their respective loans, are often looked upon as a higher credit risk than if you were buying your own home. So, if you have a proven track record of successfully selling or managing investment properties loans, with no late payments, then you are more likely to get your loan approved. The bottom line is that credit or, more accurately, credit history is a major determinant in your ability to finance commercial real estate. Pay close attention to this area of your finances if you intend to be an active investor and manage your credit as you would one of your properties: Actively. If you want to sell your building, you want to be able time it correctly so that you have achieved a full occupancy and are able to sell it before the market cycle turns down. The ideal time to buy is when the market is transitioning from a bear to bull market. Sounds pretty logical, doesn't it? You may not be able to get your hands on a crystal ball, but I've stumbled upon the next best thing! Recently a good friend of mine, Christian, led me to a very useful online resource for commercial investors such as myself. This site is one of the best I've seen for pinpointing and understanding commercial real estate cycles. On the site the company assembles detailed reports on market trends for every major market in the U.S., as well as markets in different parts of the world. Among the offerings on the site: downloadable reports as well an annual market report called Viewpoints; comprehensive commercial valuation and appraisal services; real estate specialty experts in such fields as condominiums, mixed-use developments, malls and complex retails, and much more. I can't do the website justice listing its features here, though. Take a look for yourself. IRR (the company) has recently been cited in news stories by the Associated Press, USA Today, and the New York Times, among others, proof that major sources are definitely paying attention to what the company has to say. I hope you'll find the site every bit as useful as I do. Contact me through the link below and tell me what you think. There are other risks in commercial real estate that you can mitigate through third party insurance policies. The most common form is title insurance. Most real estate professionals recommend that buyers obtain title insurance on any property they purchase and if a loan is involved, the lender will make it a condition of obtaining the loan. The purpose of title insurance is to protect the buyer in the event that problems are found with the title after the close. Even though all sales of real estate include a title search, it is a good idea for the buyer to purchase separate title insurance as an extra measure of protection against mistakes in the search. This extra insurance will help protect the buyer in the event of any undiscovered liens, disputes over property lines, or other matters affecting title. Another common, but important form of insurance for investment property is liability insurance. This provides the investor protection from liability in the event an individual is injured while on the property. This ties in because financing is a big part of owning a self-storage facility. Many questions arise regarding how to get a commercial loan for this commercial real estate that has a rising market and demand. First off, to improve your odds of getting a loan, deal with any maintenance needed at the facility. Do this before you have your assets evaluated, as you may need to take pictures of the photography for the lenders. Also make it clear to lenders that you understand the market and management systems. Although, you do not need experience in owning commercial real estate to own self-storage, it is good to have managerial experience. Before you get a quote from the lender take pictures of the property and the things around it. Also provide all information about the facility that seems relevant, such as how much space is on the property, and what you plan on doing business and price-wise. Another type of commercial real estate funding may be an investment property loan. In this case the property itself will be used to make money, for example, a shopping strip leasing space to tenants or an apartment renting units. Again, if these businesses are start-ups then personal credit becomes extremely important for qualifying. The final type of loan is called a hard money loan that is used for commercial real estate development projects. Older buildings purchased for rehab, new construction, or conversion projects all may fit into this financial mold. Hard money loans are usually designed to avoid early payoff fees as well as other fees associated with early payoffs. Banks set these prepayment fees and enforce them so they do not lose out on making the interest money after spending their time and money toward due diligence for the commercial real estate project. As a businessman you should understand the basic concepts of a loan and the loan structure. Be prepared to show a good credit score or construct a joint venture with a strong borrower. Understanding the individual underwriting criteria for these loans will also help you negotiate terms. You may want to consider a financial consultant or business professional to help you make the best decision on your commercial real estate funding options. That is; they are no longer at the bottom. Moody's says the June reading is 4.2 percent above the recession low that occurred in October 2009. With values 41% lower than they were about 3 years ago while rents have not gone down, this makes now the time to invest in commercial income producing property. If buyers and sellers are in fact coming to terms on pricing, the commercial sector can expect transaction volumes to rise steadily and prices to stabilize in the months to come. Moody's latest report also includes quarter-to-quarter price comparisons for each of the four general property types. In the second quarter, prices for apartment and office properties (income producing properties) increased by 4 percent and 3.9 percent, respectively. Retail and industrial properties (non income producing), though, weren't as fortunate. Retail prices dropped 10.9 percent, while industrial prices declined 2.9 percent. More proof for the investor that this is the time to invest in commercial income producing properties. Distressed properties are lower in value with greater appreciation and and cash flow because the amount financed would be lower yet rents are not. The real key to purchasing distressed income producing commercial real estate is availability of financing. Even though the markets and underwriting is tighter, with many lenders leaving markets of even leaving the business completely, there is many sources available to finance income producing commercial r.e. Programs are even available for down payment assistance. But a buyer must secure financing and understand his financing options before they negotiate with the sellers. The financing options are the key to success of the deal and often can not be added to a previously negotiated deal. Talk to your lender first to understand how you can put the deal together, before you negotiate a deal that does not work with the financing.