Crowdfunding vs. Hard Money Lending

We all know that real estate investing takes money. What you may not realize, however, is that there are many ways you can get the capital you need to buy that investment property you always wanted. These options include crowdfunding and hard money lending. Well explore both the benefits and drawbacks of both.

What is Crowdfunding?

Crowdfunding is a way to raise money by collecting large or small amounts of money from various people. These people may be family, friends, strangers, local private money lenders, customers or investors. The money is collected via a large pool of people on crowdfunding platforms (such as RealtyeVest) and social media. The private crowdfunding requires
no prototypes, intricate marketing plans or financial institutions to be involved on the part of the investor or sponsor. Instead, you are given a single platform to showcase a business idea or pitch for research. Therein lies it’s appeal and its differentiation from traditional ways of raising capital.

 

Benefits of Real Estate Crowdfunding 

  • You reach more potential investors: Depending on the platform used, thousands of investors are available to you. You can also access more than just local private lenders.
  • Validation of business concept: You present your business or concept to everyone and receive feedback as well as funds to validate your idea.
  • Streamline fundraising efforts: Instead of presenting your ideas to multiple investors at different times, you can have it streamlined which means it is accessible to every potential investor.
  • Market fundraising campaign: Crowdfunding allows you to promote the fact you are raising money for your potential investment through all social media channels.

Disadvantages of Crowdfunding 

  • Trouble finding funding: You have a great idea, but no one is rushing to give you money to support it. You may not receive any money for months or even one year. This can be frustrating and set real estate investment opportunity back.
  • Minimum requirement is a must for most crowdfunding: Many crowdfunding companies require a large minimum to participate on their platform.
  • Crowdfunding failure: If your crowdfunding campaign falls, it does not disappear from the platform. This means that future crowdfunding ventures may be harder to obtain because of past failures.
  • Crowdfunding is for large capital projects: Crowdfunding doesn’t discriminate, but the amount of money you want makes a difference. For smaller raises, the process could be futile.

What is a Hard Money Loan?

A hard money loan is a short-term loan secured by real estate. The loan is funded by one or more private investors, or hard money loan brokers, rather than conventional lenders like banks. These loans are for any type of property such as multi-family, single-family, and commercial property. Depending on the negotiated terms, the loan term could be two to five years. The loan does require monthly payments of interest. The monthly payment could include interest and principal with a one balloon payment at the end of the loan. The amount of the hard money loan depends on the value of the property. The property could property you already owe or the investment property you use as collateral.

 

Benefits of Hard Money Lending

  • Establish a relationship with a hard money broker: A hard money loan broker is more likely to establish a continued working relationship with you when you honor loan terms. This means you can make multiple hard money loans with one lender instead of loans with multiple registered private loan lenders.
  • Get your money quickly: You have fewer rules standing between you and your money. Hard money loan brokers are not as interested in the debt you have or your credit score. So, you can obtain the money you need to buy a property faster than working with a tradition bank.
  • Barrow a large amount of money: Banks require a five to 20 percent down payment on any loan they approve. Hard money lenders do not. Hard money lenders are willing to lend you about 100 percent of the property’s purchase price. This means you can borrow more money.
  • Hard money loans are good for first-time investors: Hard money loans aren’t for every investor or investment property. However, they’re often a great starting point. More than 100 hard money loans exist. If you are new to the investment business, a hard money loan will allow you to borrow more money and use less of your own money.

Disadvantages of Hard Money Loans

  • Interest rates are high: Hard money loans typically have an interest rate 10 to 20 percent. This is often higher than a traditional bank loan.
  • Short term loans: Bank loans for investment properties can span 15 to 30 years. However, a hard money loan terms are a couple of years.
  • Origination fees are higher: Hard money loans are considered a risky investment and investors are going to charge more for the loan. It could be as high as five percent of the total loan.
  • Loss of property: If you use the property as collateral and cannot make payments, you may end up losing the property in foreclosure. This means that property goes back to registered private loan lenders.
  • Not everyone does 100 percent hard money lending: You must do your homework regarding lenders. Some hard money lenders only work in hard money lending and no other types of loans, and they’ve had hard money broker training.  Whereas others do not.

Every investment option comes with both positive and negatives, and both crowdfunding and hard money lending are no exception. The investor willing to take a risk or the one starting out, may be more comfortable with a hard money loan. You receive the money first and must repay later. If you are the type of investor who does not want to pay a loan, crowdfunding is probably your best option because it revolves around securing investors that have private money to lend. Both funding opportunities are a great way to avoid the traditional real estate funding sources such as banks and credit unions. The best option to choose depends on your circumstances, current business needs and real state goals.

The post Crowdfunding vs. Hard Money Lending appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

Crowdfunding vs. Hard Money Lending

How to Calculate Real Estate Returns

Often, those who aim to benefit from investing in real estate properties typically face navigating jargons and terminologies that may be unfamiliar to them. Among the most significant metrics and terms that investors need to understand involve the use of real estate yield calculation.

Return on investment or ROI is one of the most used terms in real estate investment. Agents today normally use various metrics that allow them to describe and promote their deals. It helps to understand how these methods differ so that the investor knows how to calculate real estate return on investment.

Three Real Estate Metrics of ROI Investors

The top three real estate expressions that investors may come across with include Internal Rate of Return (IRR), cash on cash yield, and cap rate.

1. IRR

Simply put, this metric is about the average annual return for a specific number of years. For instance, an investor can get the IRR by taking the net cash flow and using the appreciation calculator real estate expected within the period a property is held.

2. Cash on Cash Yield

With this metric, an investor can quickly learn what to expect on the annual return that he or she will receive before taxes – depending on the actual cash investment. Often, this metric is compared to cap rate since it considers the cost or the value of the property. Cash on cash calculation typically involves the cash investment and any debt on the property.

To know how to calculate cash on cash, here is an example: If an investor puts $300k to a deal and he receives payouts of $60k every year before taxes, the cash on cash calculation for this situation is 20%. When an investor learns how to calculate cash on cash, it should be noted that appreciation will not be included in the process. It could result in a much higher return on investment overall. It is also important not to include any ROI because this method of calculation is not about profit.

3. Cap Rate

When figuring cap rate or the capitalization rate, it frequently involves a commercial property. An investor may need a commercial property yield calculator to get the right numbers. Cap rate is also used on single-family home rentals. It offers a quick method of comparing investment opportunities, and a commercial property yield calculator can be used. In short, it is the yearly net income, and the best way to figuring cap rate is to divide the income by the value or the total cost of the property.

For instance, if a property is purchased for $1 million and produces an annual income of $110k will have a cap rate of 10%. The problem with this is that the property will have appreciated over time. The original purchase price of $200k for a real estate property that yields $100k will typically make the investor believe he or she receives 50% cap rate. The truth, however, is that the current cap rate is only 10% since the property is worth $1 million.

How to Know if the Investment is Efficient

The essential piece of information for real estate investors is the return on their investment. An appreciation calculator real estate, among others, can tell them how genuinely valuable and useful their investment properties have become. Some properties can help generate significant rental income, while others have low returns, which show that they are not good investments.

If an investor wants to know how the rental property is performing, he or she should know how to calculate real estate return on investment. There are different variables with various factors that mainly depend on the acquisition of the property. To know about real estate yield calculation, here are some methods that will allow the investor to determine how much he or she is earning:

1. Return on Investment

A real estate ROI calculator is often used as the standard for learning how much profit the investor has gained through the investment. In fact, the other methods of computing the returns are merely extensions of ROI. When you have a real estate return calculator, here is how you can get the return on investment:

ROI = (Yearly income from the rental property – Expenses and costs involved) / Total cost of the property

2. Cash Purchases

For investors who can buy a property in cash, using a real estate ROI calculator is not tricky, and it uses the same formula as above. Here is an example: A specific rental property has a value of $230K and the rental income every month is $850. The annual income for this particular property is $10,200. The missing amount now includes the costs and expenses, which can be a little confusing to obtain even with a real estate return calculator.

However, if you know the expenses involved, the process will be simplified. Some of the costs covered are property taxes, homeowner’s association fees, closing costs, vacancy costs, and renovation fees. The list can be exhaustive, but the majority of these expenditures are taxable. In this case, it reduces the financial burden on the investor.

Once you have the exact amount of expenses, you can start using the return on real estate investment calculator. For the mentioned example, if the final expenditure cost is $1k, the ROI will be computed this way:

ROI = ($10,200 – $1k) / $230k = 0.04 or 4%

An investor may now ask if a four percent ROI is good enough. The answer will depend on the property and the investor but in general at least 15% is considered favorable.

3. Out of Pocket

Some investors finance a certain property using a mortgage. Before using a return on real estate investment calculator, the investor should know about the method called out of pocket. It is quite popular since many investors buy a property with a mortgage. This tactic also results in better ROI because the property is not completely paid in cash.

The formula for this method is:

ROI = Yearly cash flow / Total amount of investment

Essentially, the yearly cash flow is the same as the rental income for the whole year minus the costs and expenses. With the formula above, the mortgage payment given every month is considered. The main difference lies in the total amount of investment. Typically, this calculation method ignores the price of the property. Instead, it takes the total amount of cash invested, which is the sum of purchasing costs including the down payment for the property.

In other words, the out-of-pocket expenses involve the total value of the currently owned investment property. The value obtained is much higher than the standard method’s ROI.

ROI is Not Profit

Before the ROIs become actual profits, the profits should be sold first. It is not unusual for a property to sell lower (or sometimes higher) than its market value. Often, the deal will be concluded at below the asking price of the property, so it reduces the final ROI calculation for that real estate.

It is crucial for investors to keep in mind that some costs are associated with selling the property, which may include the funds that will be used for landscaping, painting, and repairs. Additionally, advertising costs, along with the commission to the broker or the real estate agent and the appraisal costs should also be added to the total expenses.

The post How to Calculate Real Estate Returns appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

How to Calculate Real Estate Returns

Funds and Close $6.0 Million Equity Raise in 30 Days

JACKSONVILLE, Fla., April 9, 2018- RealtyeVest was engaged by Miami developer Tzadik Management to raise $6.0M in preferred equity for its 1,000-unit multifamily acquisition in the Atlanta market. “RealtyeVest immediately understood the intricacies of our underwriting and was invaluable in the development of the capital stack and subsequent negotiations” said Adam Hendry, CEO of Tzadik.

The assets are located in the communities of Albany, Warner Robins and Atlanta, GA. “Although we have a very successful crowdsourcing platform, many of our capital raising engagements are completed off our site as preemptive investment opportunities” said Dan Summers, CEO of RealtyeVest. “We have a very deep and diverse investor database. Many of which prefer larger stand-alone opportunities.” continued Summers.

As a result of this success, RealtyeVest, has been re-engaged to raise $15.0M for a 2400-unit portfolio currently owned by Tzadik Management. The portfolio was recently appraised at $165.0M, there is 108.0M in debt, $15.0M in preferred equity would bring the total leverage to 75% of the portfolio’s value.

RealtyeVest is a real estate crowdfunding marketplace that connects investors and sponsors (real estate owner-operators) with exclusive real estate investments. The company uses digital technology to disseminate and fund investment opportunities, with their platform allowing RealtyeVest members to browse, research and make informed investment decisions. With a diligent and forward-thinking team of underwriters, they focus on the most viable segments of the real estate market in order to minimize risk and maximize every investment opportunity.

If you would like more information, please call Dan Summers at 904-501-7693 or visit  https://www.realtyevest.com

The post Funds and Close $6.0 Million Equity Raise in 30 Days appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

Funds and Close .0 Million Equity Raise in 30 Days

Real Estate No Longer Art, But Science

 

In a recent article by Min Suh about how Cloud-Based Software is Revolutionizing Commercial Real Estate Underwriting, Suh places insight into the current state of the real-estate industry as a whole, and the context for where technology fits into the ever changing environment of commercial real-estate.

Whilst no one can argue against the lucrative nature of the industry, everyone senses a change in the air. It’s a mix of pressure from other industries, and migration of millennials- all pushing the commercial real estate industry to embrace technology.

 

The first push can be seen with the emergence of crowdfunding. In 2012, with the JOBS Act, floodgates were opened for the general solicitation of securities; specifically, real estate securities. In an unprecedented and unanticipated fashion, crowdfunding exploded onto the real estate scene. The resulting millennial migration into the industry meant the integration of technology into the real estate industry. Workforce skill sets in code writing, web site design, SEO and PPC marketing meant the meshing of real estate technology with the artistry of customer service.

In 5 short years, crowdfunding has grown exponentially and so have the opportunities associated with it. Firms are aware that “dialing for dollars”, or “passing the hat at the cathedral” no longer work. Benefits of crowdfunding have become clear, as several top tier companies have had great success (with valuations in the tens of millions of dollars, having grown from a twinkle in one’s eye to a Wall Street Phenom, seemingly, overnight). Changes, however, occur quickly in business. Faster technological advances lead to industry saturation of data, and a lack of innovative ideas due to over-dependence on technology. This of course leads to an eventual loss of demand and enthusiasm. Technology that was once an industry disruptor, or game-changer, has now become a lifeless, boring bot of quasi-digital technology.

Having said that, crowdfunding (with all it’s benefits) is no longer enough, and the necessary change in the industry can’t stop with it alone. Technology has grown far beyond the digitization of 5 years ago, as presented on crowdfunding sites. It is time to adapt or die. It is time to innovate once again.

The opportunity to up its game was lost on Wall Street, as they were too busy with the grind to notice the impending change in status quo. Always chasing the next quarter’s P & L, they were too focused on the profits, and forgot about the sponsors and investors. They forgot how the customer service experience and satisfaction is tied to profitability.

As Suh asserts, “Nearly every industry is trying to figure out how to get on the data-driven bandwagon.” Real estate is no exception. Advanced analytic technologies are currently creating both a void and a niche in the real-estate industry- with those who insist on it being a void potentially getting left behind.

 

Enter, Artificial Intelligence (AI). It is here and now. We currently see this technology all around us, driving Amazon, Netflix, Facebook and Google. AI is able to aggregate trillions of data points and correlate them into an instant outcome for your enjoyment and deployment. Until now, AI has been used in almost every industry except CRE. The Industrial-Era mindset and culture is, however, shifting as those in the industry are recognizing the need for change. We are re-thinking real estate- no longer labeling it as strictly an art, when it can become a science. A science driven by Artificial Intelligence.

Rather than being reactive to the changes that are sure to come- eVest has seized the opportunity to be proactive by staying on the cutting edge. RealtyeVest’s White Label Platform (eVest Technology) is essentially the RealtyeVest crowdfunding platform on steroids. It introduces a public facing design with financial modeling, automated accounting and a real-time CRM dashboard, and it is presenting an AI tool for the first time ever that will be available for use by both the Sponsor and the Investor.

Developing and scoring probabilities for successful investing is no longer a dream, ripped from the pages of The Sci-Fi genre. Decision-making can now extend beyond a short list of data-points. Utilizing algorithms, eVest has designed software to aggregate Big Data and develop correlations to generate a specific outcome. Sponsors can now make acquisition decisions based on science and statistics- big picture drawn by a wealth of data. Investors gain peace of mind, knowing that Sponsors are utilizing this data-centric decision-making process. Welcome to the Fourth Industrial Revolution: eVest Technology.

 

The post Real Estate No Longer Art, But Science appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

Real Estate No Longer Art, But Science

Why Real Estate Investors Love Commercial Real Estate

There are many different investment options that a person can make, and choosing the right one can be a matter of extreme wealth vs. living in the poorhouse. Some people make wise decisions with their finances, while the majority of people make foolish decisions. In this article I will explain the reasons that I love real estate and know that it is a great investment to make. It will keep your money ahead of the game and make huge profits. The time is now to take advantage of this amazing investment opportunity. Don’t miss out!

Lately I’ve been giving a lot of serious thought to the best investments to make with the extra cash I have lying around, and I’ve really come to love real estate but not the stock market. There is so much cheap commercial real estate to be gobbled up in today’s market that it is truly a no brainer between real estate or stocks. Real estate and stock markets have been competing for a long time, but the commercial real estate return on investment is so high right now that you just can’t miss this opportunity. The playing field is ripe for smart investors who love real estate as much as I do. Are you one of those people, who can think outside of the box and is a smart investor wanting to take advantage of the best investments out there at a time when everyone else is convinced that the same old boring thing is the way to go? Well then, keep reading and I will explain how to make money with this wonderful investment opportunity.

One of the reasons that cheap commercial real estate wins over stocks every time is because the stock market is so highly overvalued. When choosing between real estate or stocks, many people are blindly dumping their savings into the stock market when they really should love real estate as a safer option. Most people just don’t pay much attention to the commercial real estate return on investment, which is much higher than the stock market’s return on investment. The stock market still has a long way to fall. Just because it is looking good right now does not mean that we should turn our noses up at cheap commercial real estate.

Many companies purchased real estate at the wrong time because they did not understand how to make the biggest commercial real estate return on investment. These companies are now trying to stay afloat by selling the cheap commercial real estate that they purchased at the height of the market. Here is an example of how one company’s poor decision was the gain of another company looking to make a high commercial real estate return on investment:

This company was poorly run and did not understand even the basic fundamentals of investing, especially not in real estate or stocks. The leadership of this company decided that instead of purchasing the cheap commerical real estate in the downtown area of their city that they would instead build a brand new, LEED certified building with all the bells and whistles. It was top of the line and the envy of many who love real estate. However, this company should have looked for cheap commerical real estate instead of building a brand new building. Let me explain why. You see, after a couple of years in this building, work slowed down. The company hadn’t invested in cheap commerical real estate and instead had a hefty payment to make each month. Because work had slowed down, they couldn’t afford the high mortgage on their building. They began to lay off employees and cut spending in as many areas as possible, but because they had failed to purchase cheap commerical real estate and were instead committed to a high mortgage payment, they were unable to cut spending in that area. Now the company has closed its doors and liquidated everything, including the beautiful LEED certified building. Now someone who truly loves real estate and was trying to choose between investing in real estate or stocks has capitalized on the opportunity to own cheap commerical real estate. This person who truly values and loves real estate will now make a huge commerical real estate return on investment, all because they understood how to find a great deal on cheap commerical real estate.

Some investors may be trying to decide between real estate or stocks. While stocks may look lovely right now, they can’t keep going up forever. There must eventually be a correction in the market, which is why, when choosing between real estate or stocks, a person should definitely choose real estate, because who doesn’t love real estate? The real estate and stock market dilemma has been going on for awhile, and now it is time to put an end to the difficult decision between the real estate and stock market. When one looks at real estate and the stock market, one needs to look no further than the 1987 stock market crash. That’s one of the reasons why I love real estate! The commercial real estate return on investment has been extremely consistent, while the stock market has crashed time and time again.

We have looked at investing in real estate or the stock market, and the commercial real estate return on investment is much higher than the stock market or any other investments that one may find. What is not to love about real estate? When choosing between real estate or stocks, please, choose the option that will protect your assets and move you forward in the coming years. The real estate and stock market are both options for any investor, but why would someone choose the one that will not bring in the highest possible profit. The commercial real estate return on investment is so high that you just can’t sit back and allow other investors who better understand the advantages of real estate to the stock market to gobble up all the good properties out there. The commercial real estate return on investment is so high, a person would be missing huge gains for not getting into this market.

There are always naysayers out there who will say that real estate but not the stock market is a horrible investment. They say that the commercial real estate return on investment is lousy. Don’t listen to them! They just haven’t done their research and don’t truly understand the value of investing in real assets such as real estate and not the stock market. These people may be doing well for awhile as they watch their stocks go up. But eventually, “POP!” The bubble will burst and the commercial real estate market will be left standing while stocks will fizzle. So if you choose to invest in real estate or stocks, just remember that the commercial real estate return on investment is a great place to put your money and shield it from the coming storm of the stock market.

So in conclusion, which should one choose? Real estate or stocks? The answer is obvious! Between real estate or stocks, real estate wins ten times out of ten! And that, my friends, is why I love real estate!

The post Why Real Estate Investors Love Commercial Real Estate appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

Why Real Estate Investors Love Commercial Real Estate

Securing Real Estate Debt Through Peer to Peer Lending

Peer to peer lending is a wonderful way to make a monetary investment and build you financial standing, without having to go through a bank. With peer to peer investing, you know what your money is going toward instead of handing it to a bank teller to watch it disappear. When you lend peer to peer you are loaning to a person.

Peer to peer lending is a method of lending where your money goes straight to the borrower instead of to a large group. You may be asking, “What is peer to peer lending real estate?” It is a method of investing that can help both you and your borrower. You loan them money and they set their property as collateral, giving you the security you need not to worry about your investment as they use it to build their dreams. Peer to peer lending can be a borrowing method for an individual to receive a loan, by borrowing and receiving through a peer to peer lending real estate plan. The borrower agrees to return the loan with interest and if they can not, the lender receives the borrower’s property.

Peer to peer lending is one way to help an individual achieve success instead of helping a bank or large corporation hang someone by debt. It is no fun to have a large corporation following you waiting for you to fail, so peer to peer lending can be great for the borrower. They are using money that came from a fellow human being rather than a overwhelming group that they feel doesn’t care. At the same time, the lender knows where his money went, he knows what is happening with it, and how it is being applied to make everyone’s dreams come true. This is an opportunity you don’t get through other types of investments. You will be closer to the holder of your loan, giving them less pressure so that they can concentrate on getting you your money back to you. You will receive an above average interest rate using PTP (peer to peer) Lending over other types of financial investments. Because large amounts of the interest your money is making with traditional lending methods is going in to the bank where it stays instead of your pocket, the one who fought and sweated for it. Using this method of investing you chose who can use your money and you don’t have to give it to anyone that seems untrustworthy.

Peer to peer lending is not as frightening a prospect as the world thinks since securing peer to peer lending is possible by securing your loan with property. Your borrower will give you the right to foreclose on his property if he can not pay you back. This type of lending can be profitable to everyone involved. Someone can buy a new house for their family using the real estate as collateral and if they cannot pay the money back they lose nothing but the house they already borrowed the money for, and the loaner will still have the money and the interest he made through the peer to peer investment. You won’t be loaning to a dark hole; You can now loan safely to people.

Peer to peer lending is not always the best method of investing. If you have no collateral, you have no insurance that you will receive your money back, but with a secured loan you have the protection you need to make sure your money won’t vanish.

Real estate secured loans are one way to make sure everyone comes out on top. Debt investments can be intimidating and frightening but this is one way to back your own success. You are guaranteed that no one can take your money and run because you have the protection you need to keep yourself safe.

There are many types of financial investments, but peer to peer lending is definitely one of the debt to consider using. This is one plan that can leave your money secure unlike most debt investments. Peer to peer lending will give both the investor and the borrower a feeling of freedom since neither has to fight with a middle man like with most types of debt investments.

What are the benefits of peer to peer lending over other types of debt investments? The answers are simple: more profit for the lender and less interest for the borrower. The lender is not the only person getting ahead by this method; the borrower is able to shave part of the bank’s overhead from their financial burden. And since protecting the lender is possible through a real estate secured loan, everyone wins. Loaning real estate to back your finances is a responsible way to make a debt investment, because there is little worry of not receiving your debt investment back. You are trading real estate with another person for the cash they need to attain their goals; as soon as you get your money back, they will be given all rights to their property back.

Peer to peer lending makes real estate secured lending much easier because everyone is given more freedom. You are for once in your life your own banker, you decide what investments seem good to you and then you reap the benefits of your investments.

And as we already stated, with real estate secured loans the investor does not have to worry about whether he will get his money back or not. Peer to peer lending is easy and for once you don’t have another person in charge of your finances. No more putting your money in a bank and not knowing what good it is doing; it will be with someone who is using it to do big things while it is still growing interest for the lender –
You.

Peer to peer lending is different than most types of real estate secured loans but the benefits stay the same for everyone involved. The investor is in charge of their own money until it is given to the borrower. And through real estate secured lending, the lender is still in charge of the protection of their investment.

Using real estate secured loans makes securing peer to peer investments a breeze. Few things hold their value as well as real estate; this is why real estate secured lending is one type of investment you might want to consider. This is your chance to direct your own finances without having to run a major corporation.

Securing peer to peer lending with a real estate secured loan is a method of protecting your money while allowing it to grow. Your money is picking up interest as you go about your day to day life. It is also helping someone else make their dreams become a reality.
Now you know what the benefits of securing peer to peer loans with real estate are in compare with traditional debt investments. Many people believe a real estate secured loan using peer to peer investing is the best way to protect their money, while keeping everything close and secure. If you are considering some way to lending money out or are wondering about securing peer to peer lending, then peer to peer lending real estate might be the type of investing you would appreciate.

The post Securing Real Estate Debt Through Peer to Peer Lending appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

Securing Real Estate Debt Through Peer to Peer Lending

What is the Difference Between an A class, B class, and C class Property

Before we start differentiating, we need to understand what a property class is. Property classes are a three-tiered category system used in the real estate industry and are used to price and valuate as asset based on many features.  An A class Property will be different from a B class property, as well as C class property.

Class A Property

What is property class and how does it relate to class A? Class A property is considered the crème-de-la-crème of real estate. Class A property will attract your celebrities and other A-list entertainers.

An Example of Class A Property

In 1992, Madonna bought a 1928 Mediterranean Revival Mansion, in Dade County. Her Miami mansion was north of the Vizcaya Palace and gardens. It was a 6-bedroom home complete with a large outside pool and sits right on the shores of the Atlantic Ocean.

Madonna sold it back in 2000, but it remains a good example of a class A property. Class A properties are newer on the market, no more than 10-years old.

Class B Property

What is property class and how does it relate to class B property? A class B property is bought by people who come from the middle class. The class B property is a little older than a class A, but they still command a good price. Blue-collar workers are the people who usually invest in a class B property.

The only difference between a class B property and a class A property is a buyer’s net worth. Class B buyers typically earn less than class A buyers, but they are still rolling in the money.

Class C Property

What is property class and how does it relate to class C? Class C property is more for those who live in a lower income area. Class C property attracts people who live off of government subsidies and working low wage jobs.

You will find a lot of pawn shops and check-cashing businesses in the area. The area we live in is considered to be a class C property. We live near the projects and the homes are older.

The homes look about 30 years old or more. They need a lot of maintenance and repairs are ongoing. These properties are perfect who cannot afford much. They typically cost less than class A or B.

What about class D?

Class D typically functions the same way as class C. though the tenants may be a lot tougher and more dangerous.

Investment Benefits of Each Class and How They Compare to One Another

1) You will find very attractive returns in commercial real estate. You will learn this during your first day of real estate class. Rule #1, you always wait until the commercial real estate is chasing yields, and right now they are. Sometimes real estate offers more attractive options than stocks or bonds.

An Example

We are using Madonna as an example again because she is a genius with real estate. She has bought many properties over the years, including her Miami home. Some properties she keeps in the long-term and some she sells after a few years. Her investment portfolio is solid and amazing. One reason why is because she makes great choices in the real estate market.

2) Real estate offers clients a steady cash flow. You can get this cash when the dividends are distributed. You have a choice between monthly, quarterly, and annually.

3) What about the equity? You can choose the property appreciation or the capital gain when the house sells. You can choose between buying and selling right away or holding onto the property for many years. Those who decide to buy and sell right away are doing what many call “the fix and flip.”

4) Some investors like to take advantage of the depreciation. Depreciation may decrease the accounting structure of the property, but it does not decrease the value of the property. You can use a tax benefit called “passive loss” to offset other income. Talk to your tax representative about this tool. It may save you a lot of money, especially when you have made improvements on your home over the years.

5) There is something called a “principal paydown.” It is a monthly savings plan that reduces the leverage, which increases the equity. You can find out more about this tax tool by clicking here.

6) It is a good way to diversify a portfolio that has a lot of hard assets. Real estate is different than buying into a company. You may be buying into something that is here today and gone tomorrow when you buy into a company.

The post What is the Difference Between an A class, B class, and C class Property appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

What is the Difference Between an A class, B class, and C class Property

Investing in Mobile Homes

Today’s real estate market can be tough when making investing into an uncertain market; a bit of a hit or miss situation. Real estate investors will often scoop up single-family homes in an effort to cement their profits while newer real estate investors will seek out a cheaper fixer up units and smaller multifamily units that often leave no middle ground for experienced investors seeking a solid real estate package. Which then forces us to wonder, are manufactured home a good investment?

There has been a misconception about manufactured homes for several years paired with clichés ranging from them being tornado magnets to attaching lower class people. However, it’s important to understand mobile home investing makes great financial sense. Understand that investing in or building a trailer park creates opportunities for a solid monthly financial benefit. Mobile home park investing gives good options for increasing an investor’s financial portfolio, so whether you’re seeking to lease land in a mobile home park or own it outright read on to discover why mobile home investing makes good business sense and answer the question, are manufactured home a good investment?

So, why are mobile homes a good investment?

The first reason is that tenants in mobile parks offer the consistency that provides great security to an investor. There are several reasons for this and the first is that there is always solid demand for lower-cost housing and secondly, the cost and fees involved to move a manufactured home to another location is generally quite high and slightly out of reach for tenants that rely on such housing. This would allow an investment increase of possibly 20 percent that could be absorbed by residents who don’t want or can’t afford to move their home.

Building a trailer park or investing in mobile homes allows an investor to jump in and purchase mobile home units for less money. Often a mobile home investor purchases the land in the park making the investment much less than in comparison to the number of units owned.

Mobile homes offer a large tenant market

So, are manufactured home a good investment? With the high cost of affording housing seemly always on the climb, there is always a demand from different age groups for lower cost housing that mobile homes can offer. Baby boomers are continuing to enter their retirement years at a rate of approximately 10,000 each day and many of the 74 million above 60 that are projected to retire in the next 15 years may have little to no savings which means they will have a need for lower cost housing making investing in mobile homes important. But, it’s not just boomers that need lower cost housing. Many American workers don’t earn above $20, 000 annually meaning that they also need to choose between a lower cost apartment rentals or mobile home units.

Investing in mobile homes means lower costs for maintenance

Because a mobile home is owned by the tenant the cost to maintain it is the responsibly of the owner and cuts out the impact plus cost of working with contractors for repairs that often comes with owning a single-family housing rental. A tenant’s outright ownership means that a manufactured mobile home park owner can focus on the care and upkeep of the park grounds without additional costs of unit repair meaning more cash in pocket for an investor.

Competition in Mobile Park investing is light

Still not convinced mobile home park investing makes great financial sense? Then, you’ll be happy to see that building a trailer park or mobile home park investing means that competition from other owners will be light and with so many looking for affordable housing, a mobile home investor is well placed to capitalize on the market due to the unavailable of new mobile home park builds making investing in mobile homes the right move.

The reason why less new mobile home parks aren’t being built is due to some regional difficulty in overcoming legal hurdles for permits and zoning that some states impose leaving several regions wide open for a savvy mobile home investor to come in. Mobile home investing makes sense because of this and with less new parks being built demand will continue to be high while supply will remain level ensuring that investing in mobile homes will not cause the investment worries that would come from newer mobile home park builds.

Build a Portfolio

When seeking to answer the question are manufactured home a good investment, be sure to create a portfolio of properties for maximum financial impact from your investing in mobile homes. But, also understand that when starting out that the more units owned means less financial impact if a portfolio is hit with unexpected costs.

Now that you understand some of the reasons that mobile home park investing make great business sense, consider that a good understanding of mobile home investing market will give you a leg up on the competition. If as an investor you are planning on building a trailer park, be sure to understand the following to get you started getting your mobile home park up and running smoothly:

Have a target home style – purchase a clean mobile home that doesn’t need a lot of repairs and study which mobile home bedroom units sell the best and then plan accordingly to get the best benefits for your budget.

Understand where potential tenants and mobile home owner come from – Most mobile home tenants discover mobile home units through advertisements and can’t afford to pay out in cash for a unit. So, be sure to understand that a great bet for continual cash through your mobile home investing is sure to come from payment buyers paying a fixed amount each month.

Work with sellers to get a great home for the price – A savvy mobile home investor understands that building a trailer park homes means working with a seller or potential tenant to gain the best out each and every transaction. So, keep this in mean during a hunt for great mobile home park investing opportunities.

With so much to offer a savvy investor investing in mobile homes ensures an honest return on an investment that will continue to pay off for years to come. So there is no need to question are manufactured home a good investment because the answer is if the opportunity to invest in mobile homes comes, take it and see an investment take flight.

The post Investing in Mobile Homes appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

Investing in Mobile Homes

Investing in a Hot Real Estate Market-Timeliness is Key

 

By Tony Gilbert of The Real FX Group

When the real estate market is hot, good deals are snapped up quickly by those who have the financial means and the experience to recognize a good investment and act on their instincts. It’s a learned skill. Real estate advisers and novice investors alike must develop a kind of symbiotic relationship that fosters needed trust when fast action is needed.

 

Investment firms benefit from having a pool of qualified investors who are willing to respond based on trust and prudent information, just as investors appreciate the expertise and advice they receive from advisers who watch constantly for possibilities and identify those worth pursuing. Sometimes, however, the time it takes becomes the deal-killer.

The Right Software is a Must

With “robust” CRM software, investment firms, real estate agents and investment managers gain the kind of tools that can provide a two-way street for identification and analysis of worthy properties. This relationship-based methodology also improves customer relations and enhances professional give and take. Clients who are well-informed and who have mastered basic principles of investing feel secure in their decisions and with the financial outcomes. The dividends that accrue to both sides cannot be overestimated.

 

Gain the Ability to Collate Facts and Compress the Schedule

Desirability depends on a variety of factors; price is only one of them, even though it’s vitally important.

No successful investor will bid on or base a real estate investment solely on an attractive asking price. It’s equally important to analyze the full spectrum of factors that create value. They include, but are not necessarily limited to:

  • Location
  • Condition
  • Current use
  • Future potential
  • Rehabilitation or renovation costs
  • Tax assessments, and
  • Appraisal value

Any potential investment must also be evaluated in terms of its anticipated “hold time” before reselling, or the expected income stream for lease properties. Such analysis requires variable data input and projections. And all the data requires validation.

The information-gathering process alone is time-consuming. Add sufficient time for analysis and it’s not difficult to understand how a great deal can be lost because of lack of time.

Make a Difference with the Right Tools

CRM software that facilitates communication between adviser and investors offers a distinct advantage. If it also includes comprehensive reporting capability that will quickly identify likely investors, outline capital needs and ROI succinctly, and fully track the timeline- it is an extremely valuable asset.

Successful real estate acquisitions don’t happen by chance. They are the result of being in the right place, having the right knowledge and taking the right action at the right time. That same formula applies to the acquisition of information-sharing tools, particularly the kind of software that builds relationships as well as building business.

 

The post Investing in a Hot Real Estate Market-Timeliness is Key appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

Investing in a Hot Real Estate Market-Timeliness is Key

Short-Term Celebrity Rentals

In real estate, it is all about, “Location, Location, Location!”  And when that beautiful location, La Quinta, CA, is near a music mecca such as Coachella, the “Gem of the Desert” becomes a destination and temporary home for festival frolickers.  

Located in the Coachella Valley in Southern California, La Quinta is less than 6 miles from Coachella, California, home to one of the premier music festivals in the world.

For two weeks each April, Coachella becomes the music mecca of the world- an event that young and old alike flock to. Whether music lovers or not, people come to Coachella to have an experience, which for many, is a once in a lifetime chance to feel like a celebrity, or if funds allow, dare I say, royalty?

Coachella is one of the few events where celebrities hob knob with average, everyday people and share in their love of music, art and unique experiences.  It’s an experience people are willing to pay top dollar for. A premier music event requires premier accommodations, and that is where short term rental property comes into play.

Imagine investing in a short-term rental property, one perfect for the burgeoning Airbnb and home sharing business. In 2017, Beyoncé paid $50,000 for a week stay at a private estate during the event.  Coachella is indeed an event that can potentially pay off one year’s worth of mortgage payments with a mere week or two of rentals.

In addition to being home to this unique music festival (as well as the newer ones at the same site such as “Stagecoach” and “Desert Trip”), one should not forget that La Quinta is also home to the world famous ”PGA West”, as well as twenty other premier golf courses. La Quinta also boasts one of the top golf destinations in the form of it’s “La Quinta Resort and Club” and The PGA Tour Qualifying Schools also calls La Quinta home.      

La Quinta, California has been growing at a staggering rate, and continued growth is forecast far into the future.  Don’t just invest in a property; invest in a DESTINATION.

 

The post Short-Term Celebrity Rentals appeared first on RealtyeVest Crowdfunding News.

Source: realtyevest

Short-Term Celebrity Rentals