Real Estate Investment Properties & Ownership

The different types of investment properties that real estate investors consider vary in many different ways. We'll identify the different types in this article and briefly discuss each one. We'll also discuss the different ownership structures available. The basic types of investment properties include retail, office, apartment, mixed developments, and hotel/motels.

Retail properties include freestanding buildings and shopping centers. A freestanding building is one where it stands alone, not connected to any others. Shopping centers range from strip malls to super regional malls with many stores located in one area.

Office properties can be small (one, two or three tenants), office parks where many building exist serving different businesses or high rise complexes where many tenants are located in one building. Most will be located in downtown urban areas or in or near suburban towns/developments.

Apartments range from multifamily homes or "mother-daughters" to commercial units. A commercial apartment building will consist of at least 5 units. The larger the apartment complex, the higher the need for on-site management of the property.

Mixed developments consist of a combination of residential apartments, houses, and condos with office space and retail stores. Many communities that are growing at a fast pace have developers who are maximizing the feeling of community by mixing all different types of structures, creating small neighbhorhoods with all the essential aspects of small town, such as restaurants, entertainment, jobs for the local public, and of course, shopping.

Hotels and motels require excellent management if they are to be successful. Their locations near airports, business parks, inner cities and other active areas help to keep their doors open. Their failure rate is relatively high and must be managed correctly in order to remain in business.

These are the basic types of investment properties. The single family home is of course a consideration as well as other types of investments, however the properties featured in this article are appealing due to their income potential.

There are several different types of ownership and ownership structures. These are usually referred to as business entities in which investors hold real property. To keep things simple, we'll simply cover the very basics of each structure and how each owns property.

A corporation is considered an artificial person. It is a separate legal entity. The corporation conducts its business according to the state law where the entity was created. The key here is "separate legal entity". Due to the fact that the corporation is considered an artificial person, the real property is considered to be owned by one person, the corporation.

The management of the corporation depends on its board of directors which are elected by shareholders. The important point here is that any person who wishes to form a corporation and purchase real estate must speak to an attorney about managing the corporation appropriately, so that it operates the corporation according to state and federal law (if applicable).

Another business entity that is becoming more popular is the Limited Liability Company. This business entity takes advantage of the same type of liability protections as a corporation, however, it differs from the corporation in that it takes full advantage of the federal tax benefits and flexibility of a partnership. Again, check with your attorney in order to take full advantage of the benefits of this "pass-through" entity. Ownership of real property is also different and consulting an attorney to discuss how the LLC takes ownership of property is wise.

Some of the other entities include real estate investment syndicates, both private and public organized into a corporation, limited liability company, general partnership or limited partnership. Syndicates usually involve one or more projects and different types of ownership (tenancy in common, joint tenancy, etc.).

In conclusion, it's very important that the new investor has, at the very least, a basic understanding of the different types of investment properties and ownership. It's often something that is overlooked by new investors due to the complex nature of learning the business of investing, however, without at least consulting an attorney and doing some reading, the new real estate investor is bound to make costly mistakes that are definitely avoidable. It's a great thing to learn from mistakes, however, making stupid mistakes like avoiding education due to a lack of patience is just plain old dumb!

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Comparing Chinese Real Estate and Dubai Real Estate Markets

Chinese and Dubai real estate markets have many things in common. They both kick started at almost the same time, the amount of construction work seen in Dubai and China at that time was seen nowhere else, both economies have seen a constant upsurge despite recession all over the globe and a healthy growth rate has been witnessed in both Dubai and Chinese property prices throughout these years. By comparing these markets, we can get an idea on what sort of changes we can expect in near future.

The beginning:
Dubai real estate market soared in 2002 when foreigners were allowed to purchase and own properties on freehold basis. Chinese real estate market started to show signs of growth in 2001 when China was all set to enter WTO and Beijing was announced as the host of Olympics 2008. The governments of Dubai and China have invested heavily on infrastructure since then and many investors' friendly laws were introduced.

Acceleration:
Since the beginning, both the economies and real estate markets of Dubai and China have grown in tandem. The sustaining factor in Dubai economy has been its oil reserves and tourism industry, while the China excels in exports. Both of them have seen stacks of foreign investment coming into their economies.

Great momentum:
Real estate markets in China and Dubai have shown a robust progress in demand and prices. Both have their mortgage markets performing really well unlike the mortgage crisis seen in major real estate markets like United States. As stated above, there has been a lot of spending on building infrastructure like roads and airports. Governments are actively involved in making all the right moves needed to maintain this momentum.

Amazing Architectures:
If Dubai has amazed the world by some of the most marvelous designs in real estate, China has not been far behind. Dubai has Burj Dubai as the world's tallest building; China came up with a magnificent 101-story Shanghai world financial center. Ski Dubai is regarded as one of the largest indoor ski resort, while National Swimming Center "Water Cube" is equally unique. Dubai rotating skyscraper stunned people all around the world, so did the design of Central Chinese Television CCTV in Beijing.

What the future holds:
The boom is almost over in Chinese real estate market, while Dubai market is also showing signs of losing the pace to some extent. Although, there are predictions of growth getting a little sluggish, there is still some room for growth in both real estate markets.

Dangers in Real Estate and How to Avoid Them

It is too frustrating to know that a lot of investors are eager about the idea of become tremendously rich through investing in real estate under a certain market. They think that because they stay in the city, they know the industry well, where they assume that real estate investing such as suing strategies known as house flipping is an easy process that anybody can do and get a lot of money. However, some real estate investors transfer from another successful business into real estate investing and commit heaps of mistakes which can cost them a lot. Hence, there are plenty of investors that lead to foreclosures and bankruptcy. There are instances that these investors purchased houses casually and without thinking carefully, just buying frequently and usually without down payment. They were expecting that the prices would continue to go up, giving them an instant classic. But, when the markets started to drag and the prices went down, keeping up with mortgages on several properties and dealing with houses that do not have buyers ended up in foreclosures.

The main issue for real estate investors is lack of full real estate investing awareness. Heaps of investors thought that they understood what they were doing or thought that many properties without the capital to support them were acceptable. When the market began to struggle, these investors were not that knowledgeable on how to make their investment business work. Apart from that, these investors did not seek any help from other party, they tried to succeed alone. Most of them snapped up houses on by themselves when the market was running good, without practicing a good business team or network. Those investors who have teams and networks are said to be successful in their real estate business despite the current economic crisis.

In every house that you purchase must be thoroughly checked by a trusted professional. Simply because the property is at a bargain price, that does not make a bargain. Hence, you need to get an assessor to check the property in order for you to determine the real market value of the house. In addition to that, a house inspector is also need to look over the house and see if there are hidden problems which are not visible to some real estate brokers. When you are going to engage in real estate investing, it needs a lot of research, takes know-how and hard work. If you have enough determination to be successful in such industry, the first move you need to do is choose the right kind of property. And one thing that can help you with this is you start with a bargain. You do not make as much money if you spend too much for the house up front. House flipping does not start on selling for a profit but instead it is buying for a profit.

Overall, the bigger money you can save on a quality house in a good community, the higher profit you get eventually. Actually, if you purchase the right kind of property you do not need any form of renovation. A home buyer or investor may be eager to acquire a house from you as is after you have made a great deal. You can definitely have more dollars on the deal without incurring any single centavo on the property.

Buy (REO) Real Estate Owned Properties

Because titles to the majority of foreclosed properties end up with the lender, you may find that your next opportunity to purchase the property is from the lender's real estate owned (REO) department that specializes in handling foreclosed properties. Some investors have found that this is one of the best times to buy a property because they're not dealing with an emotional or unreliable owner. Discovering the ins and outs of the lenders' policies and procedures of disposing of these foreclosed properties can be invaluable to your goal of buying real estate at below market prices.

The days of stealing prime REO properties from the Resolution Trust Corporation (RTC) are gone. The RTC was a quasi-federal government entity established by congress to dispose of the tremendous number of foreclosed assets of the major lenders during the property market downturn in the early '90s. Due to the numbers of properties and the relative inexperience of and limited due diligence by the RTC in some areas of the country, a once-in- a-lifetime real estate investment opportunity did fall into the lap of savvy rental property investors who had large amounts of cash, could act quickly, and then had the financial horsepower to ride out the market downturn.

Lender REOs remain one of the favourite strategies for the late-night infomercial gurus, but the reality is that the lenders are neither foolish nor benevolent. Although these nonperforming loans are a negative on their balance sheet, they're not going to sell a property below its market value just to get it off their books.

The disposition specialists in the REO department are professionals who understand the real estate markets well and are usually wired into the best property brokers in the market. These mortgage brokers are often compensated as a percentage of the sales price and thus also motivated to achieve the highest value as is reasonably possible.

The only angle a real estate investor usually has with an REO is financing and the continued operating losses that often occur because the lender is merely holding the property and isn't willing to invest the time and money necessary to enhance the property physically and reposition it to perform better in the market.

Sales are as-is, and lenders are often exempt from the standard disclosure rules. When lenders have an excessive number of REOs, they become more flexible, but they're often limited by the Office of Thrift Supervision (OTS), a government agency that oversees many savings banks and savings and loan associations and routinely audits their loan portfolio and their REOs.

6 Tips to Consider When Purchasing Real Estate and Acquiring Apartments

The real estate industry moves in waves, and now, the wave of acquiring apartments is with us. When buying an apartment, you may need to know that there are many different kinds of houses on sale. Therefore, it might prove difficult to choose the premises to invest in if you have little or no idea what kind of property you want. The things to consider before acquiring an apartment include:

· The available facility

Find out whether the property is located close to important facilities such as shops, schools, hospitals, parks, public transport, gym, etc.

· Proximity to social amenities

When choosing apartments, it is important to consider whether the premise is located close to cafes or clubs. Determine the degree of passing traffic and find out whether it will be noisy particularly during peak hour. In case the noise affects your lifestyle, it may be important to find a different location. It is important to make arrangements for an inspection of the property during peak hour before making the decision to purchase the premises. In case you are affected by noise you may be better off avoiding apartments located close to bars, because people are likely to get drunk and in the process make noise.

· Maintenance charges

It is important to find out about the maintenance charges. The maintenance charges include the municipal tax, assessment tax, property tax, common electricity charges, elevator charges, water charges and hired help charges like security and garbage cleaner. Always make the effort to find out what is included in the maintenance charges.

· Security measures

You want to live in a safe neighborhood; therefore, you may need to determine the security arrangements in the location. Find out whether there are police patrols in the region or a police post in the location. It is equally important to know the security measures that are in place. Find out whether there are security cameras in the premises.

· The age of the building

It is advisable to find out the age of the building. Find out whether there are any facilities that need replacement or repair. It is advisable to seek for an engineer or architect report concerning the building before making the decision to purchase the property.

· The Balcony

It is advisable to purchase an apartment that has a balcony. You will enjoy the afternoon sunshine or the view from up there. Avoid properties that face the wrong way away from the sun or premises blocked by buildings near them.

What to Know Regarding Real Estate-Owned Properties

A real estate-owned (REO) house, also called a bank-owned property, is generally one that did not successfully make it through the foreclosure auction process. As a matter of fact, rather than auctioning the home after foreclosure to discharge the original mortgage loan, the lender, which is ordinarily a financial institution such as a bank, takes over ownership of the home and endeavors to get rid of the property itself.

Because foreclosed properties generally cost more than they are worth (particularly when you tally up all the expenses linked to foreclosures aside from the actual price), not every foreclosure auction results in success. When this happens, the bank will claim ownership of the home and the home becomes real estate-owned. Fundamentally, the bank is at this point homeowner.

This also denotes the mortgage loan no longer exists, and the bank assumes the task of removing anyone who may still live in the home (both of which would be situations the successful bidder at the auction would have to take care of). The bank may even make repairs to the home.

Pointers for Buying Real Estate-Owned Property

Each Lender handles real estate-owned sales differently. One bank may try to sell an REO property at an auction, while another may employ the help of a realtor. It is good to familiarize with how the particular bank you are dealing with handles selling REO homes. Or, if you are particularly in the market for an REO property, look for a financial institution selling one using a method with which you are comfortable.

Meanwhile, consider these tips for purchasing an REO property:

Do not assume you will get something for nothing. Although the bank hopes to sell the home, it is not likely to be willing to sell it for a song. A bank will want the home's whole market value, or pretty close to it, and the bank may even present counter-offers after you tender your first offer. Certainly, remember to consider the condition of the property when you submit an offer or a counter-offer.

Request information about financing. Banks do not normally offer funding for homes they possess, but you can still ask. If the bank does not offer financing, make sure you are ready with another plan, as the bank may require it.

Carefully read the fine print. Although the bank may submit a few home repairs, it will likely want to get rid of the property "as-is". However, this does not mean you can not reach an agreement regarding certain other repairs or guarantees. Include such requirement in your offer and begin a negotiation process.

Request a property viewing. Even if the bank has repaired the property, or even agrees to make further repairs, you can always request to have a home inspector look at the place. You may also want to request any inspection reports for the home the bank has on file.

Get back-up. Whether a realtor or a lawyer, find a specialist who is experienced in handling real estate-owned sales. In addition to helping make sure you are receiving the best deal possible given the property and price, this person can help you present your offer, collect other required documents, and perhaps even negotiate the price.

Finding Real Estate Owned Properties

Many people aren't aware of term called Real Estate Owned (REO). This can actually turn out better than a foreclosure. First, a bit of background on what Real Estate Owned means. This essentially is the status of a property when the bank has tried to sell off through auction, a foreclosed property. The bank is even more motivated to get this off its books because it is basically a dead, or non-performing asset.

How do you go about finding real estate owned properties? You could talk to banks. They often have a department that handles these types of properties. But this is an extremely time consuming task. You will need to look through lists upon lists and go to different banks because they will all have a different list.

There are several services available today that can sell you foreclosed lists. But many of them don't make Real Estate Owned properties available. So you are left with the first option of finding Real Estate Owned properties from the bank. And as I have stated, this is incredibly inefficient. What's needed is a service that can provide you with a list of Real Estate Owned properties as well as the foreclosures. As I have suggested before, if you can find some Real Estate Owned properties in your area the banks are much more desperate to get rid of these so you should be able to create a contract with the bank that was returned from the listing.

The fact that you are reading this article may suggest that you were not familiar with this type product. Many people are not and that is an advantage to you. Most people will focus on foreclosed listings and will completely bypass this special type of status. Another great feature is that the bank that has the property will not ask for too much up front. They will ask you to put up an earnest money deposit. But depending on your closing date and the value of the property, etc., it could be as low as $5000.

There are a few things to be aware of before embarking on finding Real Estate Owned properties. The banks may use the property as a means to get a loan out of you. If they do, just make sure it is a good deal. Sometimes banks will require the owner to occupy the property. You need ask many questions about the terms of the deal before going through with anything.