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The Do’s & Don’ts Of Real Estate Investing For Retirement: HAPPY MEMORIAL DAY!

Posted on

May 28, 2017

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It is very possible to build a dependable retirement investment portfolio. Although the real estate market is known for having its up’s and down’s, the best investors know how to manage their investments and time their deals correctly to best optimize for success.

If you want to lower your risk and protect your invested capital to prepare for retirement, make sure to cross these items off your to-do list:

Save

It doesn’t matter if you’re 20 years old or 60. What matters is your ability to stay dedicated to building a savings. Investing in passive income properties is arguably the best way to earn consistent cash flow during retirement. You have your property (or hopefully, properties), you have renters, you have a property management company taking care of day-to-day tasks, all while you sit back, relax, and collect your profits at the end of every month.

Sounds great, right?

The truth is, it can be. So long as you have the initial lump sum to afford a down payment or two. That’s where things can get tricky. Which is why I’m here to give you a few tips that will help boost your savings regardless of your age or current income.

Spend Smarter: This probably sounds obvious, but it is easier said than done. Small cut backs here and there will add up quickly. Make your own coffee instead of indulging in that daily Starbucks habit. Clean out your closet and sell old clothes at a second hand store. Split restaurant meals with a friend or significant other instead of purchasing two entrees. These simple lifestyle changes will help keep your expenses low.

Open An IRA: Establish an individual retirement account (IRA) to help build your nest egg. Both Traditional and Roth IRA’s are viable options depending on your income and whether or not you or your spouse’s day job has a retirement plan in place. Talk to a professional to find out which account will benefit you in the long run.

Make It Automatic: The easiest way to safeguard retirement funds is to automate your savings. Set up your online banking account that sets aside a certain amount of money each month. Before you know it, your savings account will have significantly increased in size.

Set Goals: Did you know that people who take the time to physically write down their goals are 87 percent more likely to achieve those goals? If saving for retirement so that you can invest in real estate is something you’d like to accomplish, write it down! Create a timeline to help keep yourself on track and be sure to reward mini milestones along the way. Holding yourself accountable by setting a specific goal is the best way to stay motivated.

Identify Your Niche

There are many options to choose from when it comes to investing in real estate. Because there are a myriad of avenues to take, it is important to identify your niche and select an exit strategy that’s right for you. With so many areas to choose from, this task can seem overwhelming. Fortunately, it’s easier than you think.

Of course, your goal is to be financially free in retirement, but how will you get there? To answer this, you must first ask yourself some questions:

How much do I currently have in my savings?

Do I prefer a more hands-on or hands-off style of investing?

How much time am I willing to put into my investing business?

If your savings account is nothing to write home about, wholesaling real estate is worth a shot. You don’t need much money to get started and you have the potential to earn profits quickly. If you are ready to put substantial time into your business, rehabbing is an exit strategy to consider. You must have a hands-on personality, be open to risk, and have an eye for design; however, if you possess these traits, rehabbing is a great way to make significant capital.

Finally, if you’d prefer a more passive style of investing (which most desire in retirement), rental properties are your answer. Once you find tenants, hire a property management company, and pay a down payment, you have the ability to earn a steady stream of passive income that will aid you in living a financially stable retirement.

Worry Less About Cashflow

Whether you decide to go the rental property route now or later, it is important to live by the principal “worry less about cash flow”. The most successful investors prioritize capital growth even if that means sacrificing cash flow for the time being. Think about this: if you purchase a rental property and put down a 50 percent down payment, your monthly cash flow would be significant. On the other hand, you  could invest in two properties and put down only 25 percent on each property. This option would reduce your immediate cash flow but benefit you greater down the line.

Make sense so far?

Look at it this way: with either option you get the same percentage yield. Sure, if you go with option two, you’ll have less cash flow to start. But in retirement, you’ll double your income if you worry less about cash flow and more about capital growth.

Keep these principles in mind when real estate investing for retirement and you’ll be living the life you deserve in no time. We are here to assist Diamond Dust Property Management 561-541-4409 Email: dds@daddyo.biz

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This is the perfect time of year for us to take the opportunity to let you know just how thankful we are that you allow us to be of service to you.

On behalf of our office, at the Diamond Dust Property Management LLC, we would like to extend our best wishes to you and your family to have a safe and enjoyable Thanksgiving holiday.

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Time

Time might be the one thing money can’t buy. No matter how much money you have, you will never be able to get back the time you spent accumulating your impressive bank account. What you can do, however, is create more time for yourself in the future. And if real estate has taught me one thing, nothing can rival the amount of time investing in real estate awards savvy entrepreneurs. In fact, it’s quite common for people to become real estate investors for the sole purposes of owning their own time.

Cash Flow

Not surprisingly, the most common reason people start investing in real estate is because of the money they have seen other people accumulate — and for good reason. If for nothing else, real estate is an investing vehicle capable of realizing impressive profits for those that are willing to put in the work. Few investing platforms, for that matter, can match the earnings potential synonymous with today’s best investors. That said, it only makes sense that cash flow is a priority for those who want to get started in real estate.

But what exactly is cash flow? As it’s name suggests, it has everything to do with the income of a respective investor. In its truest form, cash flow represents the amount of capital left over after all the bills on a subject property are taken care of.

Tax Benefits

While not as widely advertised as its cash flow counterpart, tax incentives associated with owning real estate can quickly eclipse even the most ambitious pay days. In fact, there are scores of investors that will swear tax benefits are more beneficial than cash flow. When someone asks you “why you should get started in real estate,” it’s hard not to point out how advantageous some of today’s tax breaks can be.

For starters, it is entirely possible to deduct any interest you pay on a mortgage. According to Investopedia, “Homeowners can deduct the portion of their mortgages attributable to interest payments on their tax returns. These payments are higher during the early years of the mortgage and gradually decrease as the mortgage is paid off.”

While less popularized, but no less beneficial to homeowners, there is one tax deduction in a class of its own: depreciation. For what it’s worth, depreciation can turn a good investment into a great one. According to Investopedia, depreciation allows investors to “recover the cost of income-producing rental property,” the whole cost. Through depreciation, rental property owners can write off a portion of the home’s cost for up to 27.5 years.

The important thing to remember is that nobody is going to hold your hand through the process. Any attempt to take advantage of the tax benefits that coincide with real estate should be met with a proactive mindset. More specifically, there is only one way to ease your tax burden through real estate come tax time: due diligence and a working knowledge of what is within your rights to deduct. As always, consult a tax professional before you decide to make any deductions of your own; just know that real estate is ripe with great tax incentives.

Equity & Appreciation

In a sense, both equity and appreciation go hand-in-hand; it’s rather difficult to have one without the other. That said, real estate investors should appreciate a great equity position on any property they own. Few things can combine to benefit an investor more so than these two indicators. But what is it about them that remains so attractive? Why should you get started in real estate for the purposes of realizing equity and appreciation? Let me explain.

If history tells us anything, it’s that homes appreciate in value much more often than they depreciate. While this may be hard to believe after experiencing one of the worst recessions in American history no more than a decade ago, consider how far we have come. Home values are roughly within two percent of their 2006 peaks, and that is after a significant downturn. If you were lucky enough to buy in 2012, you are likely the beneficiary of some impressive appreciation rates. If you waited until later, there is always the option of improving your equity position.

Every time you pay the mortgage, you are growing your equity. But real estate investors have the added benefit of allowing someone else the privilege of paying off their mortgage, essentially turning their property into a savings account — a very big one. When you buy a property with the help of a mortgage, you have a monthly obligation to pay down the principal. However, nobody ever said the payments had to come out of your pocket. It’s entirely possible to rent out a property to a tenant, and use the rent they pay you to pay off the mortgage. Landlords can very easily improve their equity position in a property without using their own money every month.

It’s important to note, however, that neither equity nor appreciation should be your sole reason for investing in real estate. If for nothing else, these two things are more or less contingent on the state of the market as a whole. The amount of equity you have in a property and how much it appreciated by — or depreciates in some circumstances — are more reflective of market conditions than anything else. Property owners are more or less along for the ride, but what a ride it can be. With that in mind, equity and appreciation shouldn’t be counted on, but rather appreciated when they work in your favor.

So why should you get started in real estate? Quite honestly, there are countless reasons, but those I mentioned above are the most popular. If you want to get into real estate for the sole purpose of proving you can do it, feel free to do so. Perhaps you want to create a legacy to leave for future generations of your family. Whatever the reason is, make it yours and aim high. Only then will you truly know why you should get started in real estate. Follow  us Diamond Dust Property Management or call (561) 541-4409 to get started in real estate.

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Today Is Better Than Tomorrow

Those currently taking the steps to learn how to begin a career in real estate will almost certainly be glad they did so today, as opposed to a decade from now. At the very least, investing in real estate takes time; accumulating wealth is the result of time and knowledge. While not necessarily the equivalent of compound interest, the sooner you get involved in real estate, the sooner you can start reaping the rewards. Start building equity in a home and find out for yourself.

It’s time that learning how to begin a career in real estate coincided with reading market trends. All you have to do is listen to what the market has to say to understand why now is a great time to invest in real estate. Allow us to work with you Diamond Dust Property Management LLC.

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www.DiamondDustPropertyManagement.com (561) 541-4409

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5 Ways To Increase Rents And Improve Rental Property Value https://diamonddustpropertymanagement.wordpress.com/2016/07/06/5-ways-to-increase-rents-and-improve-rental-property-value/ via @wwwDaddyoBiz

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Now may be one of the best times ever to acquire a rental property due to the hefty tax deductions and the positive affect it can have on your investment portfolio. However, those that have yet to do so should mind due diligence and consider what they are getting into before they make the jump.  You must find the right tenants, decide on whether or not you want a property manager, and make the necessary updates while keeping up with basic rental property maintenance. While there are a myriad of things potential landlords should consider before financing their first rental property, I highly recommend starting with the following four:

Rental Property Consideration 1: The Numbers

Prospective rental property buyers must run the numbers to see how much they can afford to spend before they even start looking at houses. Having said that, you must have a good understanding of four very important factors: financing, market indicators, transaction fees and management fees. Let’s take a closer look at each of these things individually:

Financing: In the event you are unable to close with cash, you will want to familiarize yourself with the financing options that are likely to be available to you at the time. Nothing, for that matter, will have a bigger impact on how your future deal will transpire, or even which deal you pursue. Mind your due diligence and research your options. At the very least, talk to a mortgage broker and find out how much money you could potentially have at your disposal. At this stage of the process, you will also want to find out how much of a deposit you will need to put down in order to secure manageable monthly premiums. Don’t be afraid to shop around either; there is a mortgage out their with your name on it if you are willing to look for it.

Transaction Fees: Never assume that there isn’t a cost of doing business; nobody works for free. Don’t forget to account for taxes, legal fees, stamp duties, and any other additional costs that may accompany whatever it is you intend to accomplish. I highly recommend you do your research; each state has become synonymous with its own set of individual fees. However, I encourage you to consider these fees as a cost of doing business, not as an added burden. Therefore, fees should always be factored in to individual transactions. Neglecting to do so will only hurt your bottom line.

Management Fees: Rental properties are unique, in that they typically take place over the course of an extended period of time. Whereas most real estate exit strategies span anywhere from one month to six, rental properties can produce cash flow for as long as the property is in use. Of course, that means someone will need to manage it for the duration it is rented out. That said, only one question remains: will that person be you? You must decide whether you want to manage the property or enlist the services of a property management company. Either way, there will be costs to consider; make sure you account for them all.

Market Indicators: As perhaps the most important numbers to crunch, market indicators should give you a good idea of which properties to look at. Understand how much the average rent being charged to tenants in your area is, and compare those numbers to what you will probably pay on a mortgage. It’s a good idea to know how much a rental property will yield in a given market. I also recommend looking at trends, as you will likely have the property for a long time. Don’t let one hot season corrupt the data you are choosing to base your whole purchase off of.

Rental Property Consideration 2: Location

We have all heard it before; location, location, location. At this point, it is safe to say that location is king. The neighborhood you choose to rent in, for that matter, is just about the only thing you can’t change on a property; make it count. Only once you have run the numbers and know how much you are able to invest in a rental property can you even consider a location. But what makes for a good rental property location?

An Attractive Neighborhood: Not surprisingly, you will want to acquire a rental property in a neighborhood that is desirable. While your price point may dictate where you buy, I can assure you it is better to own a less attractive property in a desirable neighborhood, than a pristine property in a neighborhood that nobody wants to live in. Remember this: demand will be your best friend or worst enemy as a rental property owner. If you are having trouble finding a home in a neighborhood that is already desirable, try doing a little research of your own. Try to identify trends and predict which area is destined to become one of the most popular neighborhoods. Go to your local municipality and see where new malls are being planned, or even schools for that matter. Stay ahead of the curve and you my find a property to rent out with limitless potential.

Local Amenities: Renters, in particular millennials, are always going to favor locales with amenities over those without. That said, you should consider which amenities are located close to any prospective rental property you are considering. Are there any good schools near by? Does the area have public transportation? Are there plenty of places within walking distance? All of these things, and more, factor into a great location.

Rental Property Consideration 3: Ideal Tenants

I highly recommend catering to a specific type of tenant. However, I wouldn’t necessarily commit to making that decision yourself; the location in which you plan to rent should dictate whom you are most likely to rent to. With an idea of whom you intend to cater to, you can better focus your efforts. Remember this: different types of tenants will have different needs. If you are renting near a school, you may want to consider shifting your focus towards students. However, landlords in a place like Florida may want to take advantage of the year-round weather forecasts. In other words, let the location dictate who you rent to and how you intend to do so.

Students, in particular, will typically place an emphasis on location and low maintenance. Anything within a close proximity to the school should catch a lot of attention, but don’t forget that they will be mostly occupied with school, so they won’t want to have to worry about a lot of upkeep.

Families, on the other hand, are more likely to favor unfurnished properties; ones they can use as a blank canvas to represent their own home. Don’t hesitate to let families leave their own mark on a property, as long as it is constructive. Families will want to paint walls, decorate and make the house feel like a home. If you allow them to do so, it will be a lot easier to find tenants.

Rental Property Consideration 4: Credit

Those in pursuit of the perfect rental property had better make sure they are prepared for what is in store. That said, there is one thing you must do before you even consider transcending the barrier between homeowners and investors: check your credit. The sooner you are able to come to terms with your own credit score and any subsequent mistakes that may come up, the better off your rental property search will be. If for nothing else, you will be able to address any concerns that could become potential obstacles in the future. Be proactive and take care of any credit issues before they prevent you from closing on a property with positive cash flow.

Those that are made aware of blemishes on their credit history are advised not to take drastic actions, but rather consult an expert. Someone with experience in handling credit issues will know the proper course of action, whereas someone who has no idea what they are doing could potentially do more harm than good. Not surprisingly, even small changes can have a lasting impact. Do not attempt to close old accounts or pay off collection accounts without first confirming that doing so would be in your best interest.

Financing a rental property can be a great career move, and could potentially generate passive income for years to come. However, don’t make the jump to become a landlord until you have considered what is in store. Allow us to help you the rest of the way.  Diamond Dust Property Management 561-541-4409

We source discount properties for real estate investors so that they can free up their time & focus on what they do best. Investing & buying properties. We are Real Estate Investors helping Real Estate Investors find properties to wholesale, buy and hold for passive income, and/or flip for quick profit.

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One of the keys to a successful real estate business is a diversified portfolio. The different avenues you have for creating wealth the safer your business is.  There are many investors who are intimidated at the prospects of a Commercial Property. They feel that the greater number of units the riskier the investment is.  The reality is that the opposite is often the case.  Some of the wealthiest people in the world have benefited greatly from commercial investing.  The right property in the right market can yield returns that cannot be generated from any other type of real estate.  That being said there are a number of things you need to know before you get going.  Here are five areas to focus on prior to your first commercial investment.

Education.   Investing in commercial properties is much different than your traditional single family purchase. Many times these differences can be complicated to understand. For starters a commercial property can be anywhere from five to twenty or more units. They can be stand-alone units, such as a strip mall, or connected to an existing business. It is important that you understand all of the various types of properties and what makes them different. You should also educate yourself on the numbers associated and which items effect supply and demand. You should also learn any local commercial laws and guidelines which can impact your purchase. Soaking all this information in can be frustrating and confusing at times. The amount of due diligence you would do on a single family purchase and a commercial one is often completely different. Before you get too far you need to learn as much as you can about the different property types and the process to close.

Market. The market you choose to invest in is always important. With commercial properties it is everything. Large commercial buildings are dependent largely on the local economy to supply tenants in the way of business owners. If the market is poor you will have a tough time finding tenants which in turn will make your investment difficult to manage. The type of building or the location it is in is not as important as the local market. Market changes are never easy to predict but you need to look at indicators to supply clues. Has there been an increase in the general population? Are businesses leaving the market? Are there any changes to the taxes or other demographics that can have a negative impact? Before you consider a commercial property you need to know where the market is headed. You may be able to get a good deal on a commercial property but you need to know it will be strong well into the future.

Valuation. One of the biggest differences with commercial properties is with how they are valuated. On a non-commercial property you look at comparable sales and listings and evaluate the data. You can get a pretty good idea of your list or sales prices by looking solely at this information. Just by the sheer volume of commercial sales this method does not apply. There are far fewer commercial sales in a given market. Inside of these sales the size, layout and style of the properties may be totally different. Instead of looking solely at sales you need to look at the income they generate. This method, known as the income approach, looks at the total rent that the property brings in over the course of the year. There are other factors that influence commercial value such as the specific tenant, the type of business, the market and the location. The bottom line is that commercial values can be a moving target and much more difficult to estimate than your average single family property.

Tenants. An average single family lease is roughly one year in length. Some can be as short as nine months and others can last several years. With a commercial building the leases are much longer in length. The average commercial lease is three to five years. Because of the longer lease period it is critical to find good tenants. The strength of the tenant is typically based on the type of business they own. As simple as it sounds the stronger the business the stronger the tenant. There are also many different types of leases that a tenant can take. One expense you will definitely need to make is to have an attorney draft a specific lease for your property. Finding a commercial tenant takes more than simply making a post on social media and waiting for your inbox to blow up.

Financing. The final area that you need to know is the financing. While there are a few similarities with residential financing commercial financing is very different. In addition to a strong credit score and 30% down payment you need income to support the property. Some of the income can be offset by rents received but most of it comes in the form of personal income. This needs to be document and evidenced with two years of tax returns. Another major difference is in the terms of the products offered. There are many more adjustable term and balloon mortgages in the commercial world than in residential. You can’t overlook this point. You may be satisfied with your loan today but in a few years’ time everything can change. If this wasn’t enough the total closing costs are also much higher than what you may expect. There are some steps that may be the same as to what you are accustomed to but many that are quite different.

You have a much greater chance hitting a home run with a commercial property than you do a single family residential. The key is to understand what you are getting into before you get started.  Use these five areas as a guide to help you on your way.

To learn More visit DiamondDustPropertyManagement.com or call 561-541-4409              We are always here to help.

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How to Keep Your Residents Renewing

It's impossible to prepare for every situation, but knowing why people move out can help keep the lease renewals flowing in.

It might feel like a game of chance—what keeps one resident staying put year after year might be the reason another resident leaves. What gives? Happiness, and conversely unhappiness, varies from unit to unit, but there are common reasons why people move on to another property.

In this guide Happy Renters: Should I Stay or Should I Go Now, we highlight some of the top housing-related reasons residents move out and how addressing them with some simple improvements can help you:

Increase resident satisfaction

Cut down on evictions and bring in more high-quality renters

Improve resident safety

Make your property more desirable

Do you know why your residents are leaving and what might make them stay?

Contact us: www.DiamondDustPropertyManagement.com                                                                EMAIL: dds@daddyo.biz or Call 561-541-4409

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(via Are The Holidays A Good Time To Buy Real Estate?)

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(via 5 Tasks Investors Need To Complete Every Week)

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(via 5 Tasks Investors Need To Complete Every Week)

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5 Tasks Investors Need To Complete Every Week

Posted on

November 16, 2015

by

diamonddustpropertymanagement

As a real estate investor, it is important to remember that you are running a business. Part of running a business, however, requires you to be on top of everything that is going on. It is not enough to spend all of your time and attention on a single deal. There has to be a balance between new deals coming in, projects you are working on, and deals that are scheduled to close. In keeping up with a routine every week and knocking things off of your list, things will start to fall into place. To that end, there are five things our partners over at DiamondDustPropertyManagement.com  do every week to keep their business running smoothly:

1. Weekly Schedule: The best way to stay organized is by making lists and schedules. Before you go to bed on Sunday night, write up a detailed list of everything you need to do in the upcoming week. Include every inspection you need to attend, every person you need to call and every deal you want to follow up on. Write down specific times that you will accomplish all of these tasks. In having an idea of what you want to do, and when, it will help you become more efficient. Once you start to see yourself accomplish things on your list, it will push you to do more. The real estate business doesn’t wait for anyone. Not making an offer or not following up with someone at the right time can mean the difference between getting and losing a deal. Start next week with a weekly schedule, and go from there.

2. Network: Regardless of whatever else you have going on, you can’t neglect Networking It is easy to sit back when you have a few deals lined up, but not recommended. Things happen in real estate all the time that will cause you to lose deals that you thought you had. Even if they end up closing, you need to replenish your pipeline with new deals. Networking is one of the vehicles that will help keep you busy. You need to block off some time every week for networking. This could mean attending a local networking group or joining an investment club. It could mean showing up at twenty real estate offices and handing out your business card. Whatever you decide to do, you need to commit to doing something every week. Without networking, you are forced to find deals from alternative sources. This means spending the time and money to pay for leads and work new deals. One or two networking leads a week is far better than having to pay for them. You may not want to or think you have to, but you need to network every week.

3. Learn Something New: The real estate business is full of different scenarios. You will never truly master every aspect of the business. What the best investors know is that they can always pick up something new every week. Spend a few hours a week reading the finance page of the newspaper, or on your favorite real estate website. Call your local mortgage broker and ask them if there are any new investor products. Ask your real estate agent to send you any information they may have about changes to the local market. Even if you have been in the business for years, you should never stop learning. Things change in the business all the time. Staying current can mean the difference in someone working with you or someone else. Learn something new about your business every week.

4. Look At Old Deals: One of the things that separates successful investors from the rest of the pack is that they never give up on a deal. Your offer may have been rejected a week ago, but that doesn’t mean the deal is dead. If you spend an hour or two every week looking at old deals or past leads, you will probably be able to find a deal or two. These are leads that you have had past contact with, and – for whatever reason – didn’t move forward with. Things can change dramatically in the matter of a few weeks or months. Their desire to sell may be much higher now than it was. Don’t throw away an old lead or prospective property until you know it has been sold to someone else.

5. Do Something For Yourself: There has to be a strong work/life balance for you to enjoy what you do. The real estate business affords you the opportunity to make your own schedule. For a few hours every week, you should schedule doing something you truly enjoy. This could be anything from going to the gym, surfing or playing basketball. You could do something once a week, such as playing golf or going to a movie. As long as you work hard, you should reward yourself with a few hours of personal time doing something you enjoy.

If you do these five things every week, you will be more productive and efficient. We are always here to help grow your portfolio, one investor at a time.                                   Diamond Dust Property management 561-541-4409