Checkbook IRA LLC Investing Guidelines - Part Two

Denver Estate Real

Real Estate as an Alternative Asset or Non-Traditional Asset

Denver Estate Real

Real Estate Investing-The Most Popular

Denver Estate Real

There are many reasons why real property is the most popular self-directed IRA investment. To mention a few:

Denver Estate Real

Familiarity-everyone lives in some sort of dwelling and has some first-hand experience with detached single-family houses, townhouses, row houses, condominiums, and apartments. Because of this first-hand knowledge and experience, taking the investing step probably feels safer.

Proximity-real estate is near-by. We can view it and examine it quickly and conveniently. We have personal experience with the neighborhoods and the cities. They are local and we are local.

Uncomplicated-because we are familiar with some type of real property, we have less to learn when we transition for being an occupant to being an owner/investor. We do not have to start at a zero understanding level. Essentially, we already understand some things, but not everything, about location, property taxes, hazard insurance, repairs and maintenance, and payments and expenses.

Variety-there are probably more types of properties to be considered as potential investments then any one investor could ever need or understand. Listed below are a few:

Single family houses

Multifamily properties

Raw land

Farm property

Resort property

Mobile Homes

Retail property

Industrial property

Self-storage property

International real estate

Limited Liability Companies containing real estate

Foreclosed real estate

Franchised business containing real estate

Professional Advise and Consulting-local real property professionals that specialize in specific types of properties are readily available for consultations. Usually, it is more comfortable to deal with a local professional on a face-to-face bases, rather than dealing with a distant advisor. Often, investment opportunities become available through or with a professional advisor or consultant. Being an investor in a property structured by a professional can be an excellent way to learn and to diversify your self-directed IRA investments.

Rental Property Advantages for Self-Directed IRA Investing

Right now, renting housing units, being a landlord, for single family or multi-family properties is providing excellent cash flow returns in many geographic areas. The main reasons for this situation relate to:

High unemployment rates

High foreclosure rates

High mortgage delinquency rates

High loan qualification requirements needed to be approved for a new loan

Because of these obstacles, many people who previously would have bought a home are now in the rental market. Additionally, the average price of homes has declined over the past three years, making them a better investment value.

Essentially, house prices have declined while rental price levels have increased.

This has set the stage for excellent rental cash-flow returns for the self-directed IRA investor.

How to Invest And Benefit From Very Favorable Situation

Be a solo, hands-on investor. Buy and own a rental property by yourself and manage it by yourself.

Option: outsource the property management

Be an investing partner with another hands-on investor. Buy and own a rental property with a partner and manage it with the partner.

Option: outsource the property management

Be a passive investor in a pool of rental properties that are professionally managed and administered.

Words of Wisdom

Success usually comes to those who are too busy to be looking for it.

Henry David Thoreau

Success in business requires training and discipline and hard work. But if you're not frightened by these things, the opportunities are just as great today as they ever were.

Rockefeller

An education isn't how much you have committed to memory, or even how much you know. It's being able to differentiate between what you do know and what you don't.

Anatole France

Checkbook IRA LLC Investing Guidelines - Part Two

Denver Estate Real

Promissory Note Investing - Principles And Tips

Denver Estate Real

Because of the uncertainty of the stock market, many investors are looking for safer and more predictable ways to invest their money. Promissory Note investing, which is also know as Private Money Investing, and Hard Money Investing, offers an individual the opportunity to earn safer, more predictable, and higher returns on their money.

Denver Estate Real

Promissory Note investing is fairly low risk because the loans are backed by the appraised value of the collateral security plus the promise to pay of the borrower. Generally, the loans are conservative--at about 65% of the appraised value of the security. In case of a foreclosure, the property is sold to recover the funds. The borrower's promise to pay and credit provide an additional measure of protection and an exit strategy. Additionally, hazard policies (fire, hail, wind) are insuring the property. The title to the property and the note holder's interest is also covered by insurance-title insurance and lender's insurance. This is the correct way that the investment is structured.

Denver Estate Real

Private Mortgage Notes provide borrowers with an alternative to traditional bank financing for real estate properties. A borrower may not want to pursue bank financing due to time constraints, credit worthiness, or other factors, so they look for individuals or groups to finance their investment. Investors/lenders will take on the risks of lending, and in exchange, will receive a higher than normal interest yield on their investment.

Denver Estate Real

Yields for private mortgage notes are generally higher than the traditional investments available. Return rates of 9% to 15% are typical. The more risk the lender is willing to accept, the higher the return expected. Generally, you want to be listed as the first position lien holder on the property-the first mortgage. You should fully understand the circumstances of a particular note investment before determining the amount of risk you are willing to accept. Take your time and get all of the information that you need.

As in any successful business, being in the promissory note investing business requires that certain important contacts are developed, and certain important skills are acquired.

Promissory Note Investing Tips

Plan
• Plan your cash needs and cash availability
• Plan your time requirements-learning and training time, networking time, personal time
• Plan your business development schedule-develop target dates and target goals

Skills
• Understand the meaning of key words in the loan documents
• Understand the legal terms used in the note business
• Understand the numbers used in calculating investment returns and expenses
• Understand your legal responsibilities
• Understand the borrower's legal responsibilities
• Understand the foreclosure process in your state
• Understand risk in general, and note investing risk in particular

Contacts
Build business relationships with people you can trust
• Investors that you can share ideas with
• Investors that can provide some guidance and knowledge
• Mortgage brokers
• Realtors
• Title insurance companies
• Real estate appraisers
• House inspectors
• Attorneys that specialize in real estate law
• Promissory note experts who advise and consult on notes

Remember, you are probably investing all or almost all of your net worth. You may be also investing other people's money-people that trust you and that you do not want to disappoint. You are making serious decisions that have important present and future impacts on your life and on the lives of others.

Don't take short-cuts; don't hurry; don't over-reach; don't over estimate your own capability and experience.

"Investing should be more like watching paint dry or watching grass grow. If you want excitement, take 0 and go to Las Vegas."
Paul Samuelson

Even though good experienced, professional advice and service costs money upfront, it will save you a whole lot more on the back-end of the investment. Five-hundred dollars spent upfront to structure a deal right may save you ,000 on a back-end.

Promissory Note Investing - Principles And Tips

Denver Estate Real

Some of the Most Important Factors to Consider With Real Estate Investing

Denver Estate Real

For a lot of people, their very first piece of investment-minded real estate is a really big deal to them. They get very excited when they make the decision that they are going to own property, and they get similarly excited when they first start looking around at the different properties that they want to purchase. It's a special purchase, a special property, and special investment, and it's important that you keep a number of important factors in mind when making the decision about which you are going to purchase. Some of these factors are common sense, while others are things that you might not have ever taken into consideration.

Denver Estate Real

The first thing you need to keep in mind when looking for your first investment property is whether or not you like the property. Obviously you should not make your purchase solely based on your gut, or solely based on whether or not you like it. At the end of the day it's an investment property, and what's most important is the fact that it provides a high return on that investment. But it still is going to be a special property for you, being your first, so it's important that you take the time to feel it out and make sure that it's a property that you really like too.

Denver Estate Real

The most important factor to take into consideration when picking out your first property is the location and neighborhood of the property. Nothing is going to influence the success of your investment more than the location it lies in. A great location will make the whole process easier, while a terrible location is going to be problematic to say the least. Chances are if this is your first property investment than you aren't going to have a lot of money to spend, so you might not be able to make a purchase in the highest quality neighborhoods. For your first property, you'll want to find an affordable property in a neighborhood that is likely to increase noticeably in value and quality over the next few years. Just because you can't afford a top-location property doesn't mean you can't afford a property that will grow into one during the length of your ownership.

Denver Estate Real

Old properties sometimes fit the bill. Depending on the location and neighborhood, an older property can be really affordable. There are certainly those historic properties that sit in extremely well off neighborhoods that are probably beyond the capital that you can raise for your first purchase, but there are plenty of great older properties that are in good condition but are in lesser neighborhoods. While these properties usually require a certain level of repair, they often are affordable and in demand. More and more people these days are interested in moving in to older, historic buildings and fixing them up, and this is a trend that is likely to continue on for some time. This means that there is a lot of opportunity in purchasing one of these properties now and benefiting from the increased interest and cost of them over the next couple years.

Some of the Most Important Factors to Consider With Real Estate Investing

Denver Estate Real

Real Estate Investing - ROI to determine acceptable

Denver Estate Real

As with any form of investment, there are a number of abbreviations that develops real estate in order to describe the technical terms. Do not assume that the use of "jargon" is intended to minimize the conditions. It simply means that the goal here is to present clearly the basic concepts around the property so that people understand. This term is very important is usually abbreviated to "return on investment." ROI

Denver Estate Real

ROIis also known as the rate of return, and usually takes care of the gain or loss of an investment. E 'calculated by comparing the money you originally invested. Typically, a return on investment takes the form of a percentage split to avoid consumption are expressed as a percentage representing the most trivial of gains and losses in the investment community.

Denver Estate Real

This means that if you buy a house for $ 200 000 andestimated at 300 000 in ten years you will receive a 33% return on the investment income will be. In fact, it will not work if you were any other costs associated with the purchase of the house connected to add. There may be many other costs, and are worth investigating.

Denver Estate Real

These costs may include the purchase of the house, the interest rate on the loan, the depreciation of the home and various taxes, insurance premiums and maintenance costs. Now you might think that if all theseThe cost would be included in the price of a house to buy, not all the houses as a loss?

No, because if this is the case, then investment in real estate for investment would be absolute to be considered one of the safest investments in the contrast. Most of the costs associated with a house covered by an individual personal income or cash. In a sense, the money filtered back into the house with equity in your home can be increased andthe elimination of other expenses that would be incurred if the person is not acquired at home. For example, renting an apartment must be supported. Then you could travel costs associated with longer commutes are not a person who had bought a house in a specific environment. These are all factors that contribute to the purchase of a home is a good idea, can help reverse during the tests connected to all the costs associated with buying a house.

InUltimately, if a house is ultimately worth more than what you paid, or generates a positive cash flow when you shut down a rental property, then gets a nice house on the game. If you can stay in touch all the costs associated with buying a home at a reasonable level, then the operation should be even better. Yes, this can be a bit 'harder in practice than it sounds, but it can certainly be achieved.

Real Estate Investing - ROI to determine acceptable

Denver Estate Real