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[S498]Single Family Home Builder

by Tony Seruga, Yolanda Seruga And Yolanda Bishop, Ton

While there are many people who seem to believe that investing in residential real estate and single-family homes is the way to go, investing in commercial properties is much better. Instead of focusing your real estate investing on residential properties focusing on commercial properties is a better option for a variety of reasons.

First of all, when it comes to investing in commercial properties, you will not have to worry about personally qualifying for a loan. The property itself qualifies for the loan. You usually will not have to worry about personally guaranteeing the loans when it comes to investing in commercial properties. Non-recourse financing is the type of financing most often used for commercial real estate investing. If your loan is foreclosed on, the bank will take the property, but they can't come after you personally. Also, it will never affect your personal credit score.

You will also have the opportunity to deal with professional tenants when it comes to investing in commercial properties, instead of dealing with the tenants that come with residential properties, which is a huge benefit.

Another reason to invest in commercial real estate is to maximize your potential for profit on any one deal. You would have to invest in a lot of single-family homes to generate the kind of profit you can make on one commercial real estate investment.

So, with the proper education and training, it can be the right move to break into the field of commercial real estate investing.

How Much Money Will You Need?

Before you start purchasing commercial properties, it is important that you know how much money you are going to need to get started. Even though you will be able to get financing for your properties there are still going to be some fees that you are going to have to pay for on your own. So, how much money should you have available? Well, for the pre-closing and closing costs you are going to have to pay, you should have about 3-5% of the amount of the loan available, as well as 10-20% of the purchase price for the down payment. While you may not need that much money, it is best to plan on this amount just in case.

Where to Get the Money

Once you know how much money you will need, you are probably wondering where you can actually get the money. There are a variety of different places that you can get the money you will need. Commercial mortgage brokers are one choice. There are also some private lenders that may be able to provide you with the money that you need, so be sure to consider all of your options.

Using the Money

When you actually are ready to get the loan for your commercial property you will probably have to explain to your lender what you are going to use the money for. This means that you'll need to be able to communicate to the lender what you are going to do with the money. There are several things that you may have to do with the money. You may need to use the money to acquire or purchase the property, and in this case, the lender will probably be able to loan you about 80-90% of the money you will need. In some cases you may need to use the money for a refinance of a property and the same amount will probably be available to you for refinancing as well. You may also need to have the money for construction of the property, including renovations, rehabilitations, and building that occurs on the property.

Keeping Yourself Protected

When you decide to invest in commercial properties, it is important that you keep yourself legally protected. Many people sue over a variety of things in today's world, which means you'll need to have plenty of protection. Be sure that you never own the properties in your own name, or you could be sued personally. You need to have a LLC or a corporation. This way, any lawsuit would be directed at your company and not at you personally.

A Good Team is Important

If you are going to get involved in commercial real estate investing, it is important that you have a good team to work with you. You should begin to form a good team immediately. You can ask for some recommendations from other people who invest in commercial real estate so that you are sure to get good people for your team. Some of the people that you will need to have on your team include a good commercial mortgage broker, a real estate attorney, a real estate accountant, a good insurance agent, a realtor that specializes in commercial real estate, and a company that works in property management.

Finding the Right Properties

One of the most important things when you are involved in commercial real estate is going to be finding the right properties to invest in. The following are several ways that you can find some great commercial properties to invest in.

- Commercial Realtors – One of the best ways to find good commercial properties to invest in is by using commercial realtors. Good realtors who specialize in commercial real estate can help you find the properties you need and they can also help you do your due diligence as well. If you are going to pick an agent, consider interviewing several agents to make sure that you find one that you can work well with. You can get online and go to the National Association of Realtors to find a good realtor or you can get some recommendations from other commercial real estate investors that you know.

- Internet – Another place that you can look for great commercial properties to invest in is on the Internet. There are a variety of different websites that can help you find the properties you are looking for. You will find both paid and free sites; however, for serious investors, going with the pay sites may be the most beneficial for you.

- Networking – Many investors overlook networking when it comes to finding good properties to invest in. There are a variety of networks and investment groups that can help you find great properties. Try getting involved in Chamber of Commerce meetings or get involved in some associations that will help you find the properties you want.

Consider the benefits; getting a non-recourse loan, dealing with professional tenants and the opportunity for much greater profits on any one deal. When you think about it, it is a smart move to choose investing in commercial real estate rather than investing in single-family homes.

Making a mistake in a real estate investment decision can be costly--or even financially devastating. However, there are ways to ensure that you make money investing in real estate. The key is to learn as much as you can before you attempt to buy property. Whoever said "knowledge is power" knew what they were talking about when it comes to investing in real estate. Here are a few tips on how you can make a wise investment decision:

Stick with Proven Strategies - Single Family Homes

If you're not a gambler, it's best to stick to investing in tried-and-true single family homes. There's always a market for single family homes once you've fixed them up and are ready to resell. If you plan to rent your investment property out, single family homes are the easiest homes to rent, assuming they're not too expensive.

Prepare Your Mortgage Financing First

Get your mortgage financing arranged before you go house hunting. This essential step prepares you to make offers with a fast closing. Distressed sellers feel pressure to close as soon as possible. Quick action gives you an edge over any competition (other investors and home buyers) you might have when it comes to making offers on properties.

Educate Yourself

Become an expert in a particular area and type of home. That way, you'll eventually get good enough at knowing what homes are selling for so that you can make your offers quickly and as profitable as possible.

Know Area Employment Conditions

Watch local employment trends. You must be able to rent your investment home or sell it right away. When people have jobs, they can afford housing.

When you look for properties, either avoid altogether or be very cautious if the area's economy is largely based on just one major employer. If that employer shuts down or cuts back drastically, that entire area's real estate market will be dramatically affected and you could lose your investment capital.

One exception to that rule would be a town that is home to a large, old, and well-established college or university. Such an establishment will have a steadying effect on the community that surrounds it, and there will always be a housing need for the many employees and students who are associated with the university.

Safeguard Your Money

Always maintain a reserve fund, because unexpected things will come up as you go through the rehab process; that's just part of the investment game. If having to pay for a new roof will mean that you can't pay your own home mortgage that month, you're financially over-extended. You must make sure that an unexpected expense isn't going to jeopardize your future.

Know how much your profit potential will be before you make an offer. You should know how much the needed repairs will cost. Although we've just established that things will come up that you can't predict, you should know what the house will sell for before you make any kind of an offer. That way, you can build in a cushion that will assure you of making a profit, even when the unexpected takes place.

Plan Ahead and Act Quickly

Get through the rehab process as quickly as you can. That way, you won't be surprised if the local economy takes a downturn later on. You know what the economy and market are like at the time of purchase, and you want to be able to sell under essentially the same conditions. That will take a big load off your mind.

Educate yourself so that you feel confident instead of afraid. Remember, more multimillionaires made their money investing in real estate than by any other method.

Copyright ? 2006 Jeanette J. Fisher

Article Source : Pg. 10

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Both Tony Seruga, Yolanda Seruga And Yolanda Bishop & Jeanette Joy Fisher are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Tony Seruga, Yolanda Seruga And Yolanda Bishop has sinced written about articles on various topics from BMW, Real Estate and Real Estate. . Tony Seruga, Yolanda Seruga And Yolanda Bishop's top article generates over 1000000 views. to your Favourites.

Jeanette Joy Fisher has sinced written about articles on various topics from Real Estate, Network Marketing and Real Estate. teaches five ways to make money with single family homes. See pictures of before and after single family homes at. Jeanette Joy Fisher's top article generates over 135000 views. to your Favourites.