Frequently Asked Questions

FAQ

How does equity work in real estate investing?

In real estate, your equity in your property is the amount that you own, or what you would get after paying off your mortgage after selling. You can build equity by making a larger down payment, paying off your mortgage more quickly, and improving the house to increase its value.

What is the 70% rule in flipping?

Put simply, the 70 percent rule states that you shouldn't buy a distressed property for more than 70 percent of the home's after-repair value (ARV) — in other words, how much the house will likely sell for once fixed — minus the cost of repairs.

How do you explain rubs to tenants?

RUBS typically proportionately divides water, sewer/wastewater or trash, electricity, gas, or pest control utility costs among residents. It uses a formula based on several factors including state and municipality regulations, size of units, and the number of occupants in each unit.

What does the acronym Rubs stand for?

RUBS stands for Ratio Utility Billing System, and is a cost-effective and fair alternative to submeters.

What is rub income?

What is RUBS income in commercial real estate? RUBS (Ratio Utility Billing System) is a method of determining a resident's utility bill based on factors like unit square footage, the number of people living in a unit, or some combination thereof.

What is the difference between rubs and submetering?

Submetering requires individual meter readings and billing for each unit, while RUBS involves calculating and allocating utility costs based on predetermined ratios. Consider the resources and time available for effective management.

What are rubs and how are they used?

Dry rubs are a mixture of spices and dried herbs that are rubbed directly into the meat before cooking. The juices of the meat will mix with the rub and create a smoky and sweet exterior that complements the natural flavor of the meat when eaten together.

What is the golden rule of real estate investing?

Summary. If you follow these 5 Golden Rules for Property investing i.e. Buy from motivated sellers; Buy in an area of strong rental demand; Buy for positive cash-flow; Buy for the long-term; Always have a cash buffer. You will minimise the risk of property investing and maximise your returns.

How do I protect my assets from lawsuits?

Putting assets in trusts, insurance policies, retirement plans and offshore accounts are among the most common ways to protect your assets. You can also protect them through forming Limited Liability Companies, establishing prenuptial agreements and including arbitration clauses in your contracts.

What is the best form of asset protection?

Using Asset Protection Trusts (APTs) It is often used as the strongest method of asset protection. Assets that are part of APTs are not legally entitled to the owners, who take the form of “beneficiaries that hold equitable interest” in the assets.

What are the disadvantages of being a real estate investor?

Real estate investments tend to have high transactional costs, especially in legal and brokerage fees. The process of acquiring a new property is also very long and tedious with lots of legal formalities. Another disadvantage of property investments is that they are not easy to liquidate.

What is the 80% rule in real estate?

The 80% rule means that an insurer will only fully cover the cost of damage to a house if the owner has purchased insurance coverage equal to at least 80% of the house's total replacement value.

Is it better to hold onto real estate or sell it?

Investors wishing to amass wealth and derive income from their real estate investments should consider holding real estate for the long term. They can use the equity built into the portfolio to finance other investment opportunities, with the potential of eventually selling the properties in an up-market.

What does holding mean in real estate?

Real Estate Holdings means the Group's real estate assets, comprised by (i) the properties, projects, plots (and the companies associated therewith), (directly or indirectly) wholly owned by the Issuer and (ii) the pro rata part corresponding to the Issuer's ownership share of any real estate properties, projects and

What are the benefits of a holding company for real estate?

Real estate holding company benefits include, but are not limited to, the protection of investors from personal liability, pass-through taxation, and the building of credit for your business. Holding companies can protect business owners from liabilities and debts incurred by their properties.

How long should you hold a real estate investment?

Better Off in the Long Run Most data regarding the optimal investment period for real estate points to the fact that you're better off investing in real estate for at least ten years, with better returns the longer you hold. There are two primary ways of looking at the question.

How to make money with buy and hold real estate?

There are several ways you can take advantage of buy and hold real estate, including the following.

1. Long-Term Residential Rental Properties. Long-term residential rental properties are homes you own and rent to tenants for the long-term.
2. Short-Term Vacation Rental Properties.
3. Renting Out Land.
4. Commercial Spaces For Rent.

Where to buy non performing notes?

Banks. You can purchase non-performing notes from banks and other financial institutions. However, banks, and other institutional lenders are less likely to sell you a single note, you will most likely be purchasing a 'pool' of non performing notes. That could be more of a pricier option than you anticipated.

Why buy a non performing loan?

An NPL can be purchased at a fraction of its original value, giving investors favorable terms after foreclosure such as potentially high cash flow and overall return due to acquiring at such a discount. Through the foreclosure process, a sponsor can then acquire the underlying real estate asset.

How to start out in real estate investing

How to buy a distressed bank?	You will need to fulfill these conditions under the Covered Investors policy of the FDIC before bidding on a distressed bank: You have to retain 10% or more of the capital reserve from the troubled assets. A minimum holding period of 3 years. No Insider Lending. Disclosure of the ownership chain.
How do I participate in FDIC auction?	Prospective Bidders may provide contact and investor status information and identify the types of financial assets, loans, and loan-related assets they are interested in purchasing by completing the Prospective Bidder Information form, and delivering the completed form electronically to: [email protected].
How to buy real estate notes?	The traditional way to invest in real estate notes is to find a seller, negotiate a price, and then purchase the note directly from them. This can be a time-consuming and complicated process, especially if you're new to investing in real estate notes.
What is the best corporate structure for real estate investing?	Limited Liability Companies (LLCs) Hear this out loudPauseLimited Liability Companies (LLCs) In fact, many experts will always recommend that real estate investors use LLCs for their real estate investments. However, whether an LLC is appropriate for your investment is still a personal decision.
How do you structure a real estate investment portfolio?	Take a look at the following tips and hints to building your real estate portfolio. Start Small. Consider Exponential Rather Than Linear Increases To Your Portfolio. Learn Your Local Market. Take Detailed Notes. Research Your Financing Options. Understand The 1% Rule.
What is the best entity structure for real estate?	Hear this out loudPauseStarting a Real Estate Investment LLC or LP LLCs and LPs provide some legal protection to their individual owners as liability for accidents, finances, etc. lies with the LLC or the LP (with some limitations). Both LLCs and LPs can be structured to be “pass-through” entities for tax purposes.
What is the most profitable type of real estate investment?	Commercial properties Hear this out loudPauseCommercial properties are considered one of the best types of real estate investments because of their potential for higher cash flow. If you decide to invest in a commercial property, you could enjoy these attractive benefits: Higher-income potential.
Are real estate investing courses worth it?	Taking a course. You'll learn how to assess potential investment opportunities, conduct real estate market analysis, develop investment strategies, and raise capital. Courses and classes can provide a framework for understanding what's happening in the real world and can help you avoid potential pitfalls.
How to make money with subject to real estate?	The actual difference between the agreed mortgage payment and lease fees earned from renting would be considered profit in a subject to real estate deal. Many investors take ownership of a property for a short period of time and even pay a few payments on the existing mortgage.
How to become a millionaire through real estate investing?	8 Tips On How To Become A Real Estate Mogul or Millionaire Have a Good Business Plan. Find Sustainable Real Estate Markets. Narrow Down Your Scope. Build Your Real Estate Team. Acquire Your First Investment Real Estate. Step Back and Evaluate Your Investments. Step Back and Wait.
What is the most profitable real estate investment?	Commercial properties Commercial properties are considered one of the best types of real estate investments because of their potential for higher cash flow. If you decide to invest in a commercial property, you could enjoy these attractive benefits: Higher-income potential.
Do real estate investment certifications stand out?	REALTORS® with the GRI designation have in-depth training in legal and regulatory issues, technology, professional standards, and the sales process. Earning the designation is a way to stand out to prospective buyers and sellers as a professional with expertise in these areas. See course information.
What are the three most important things in real estate?	To achieve those goals, the three most important words in real estate are not Location, Location, Location, but Price, Condition, Availability. Let's look at the first word – Price.
How do you create your own real estate company?	How to Start Your Own Real Estate Business Conduct market research and identify your niche. Develop a business plan and set financial goals. Obtain the necessary education and licensure. Build a professional network and market yourself. Know your business costs and secure funding. Develop a brand and create a website.
What should be included in a real estate flyer?	The best real estate flyers must pique the reader's interest. Don't overload potential clients with information; instead, pique their interest and include a call to action on your real estate flyer. Prices should not be included in your brochure; that is not the purpose of a marketing flyer.
How do I organize myself as a real estate agent?	5 Essential Organizational Tips for Starting Your Real Estate... Organize your Work Space. Searching for items on your desk is absolutely not the best use of your time. Have (and Use) Customer Relationship Management Software. Schedule Your Work Hours and Your Off Hours. Schedule Time for Communications. Keep a Call Log.
What are the 4 P's of real estate?	The 4 Ps of Real Estate Marketing Product. As a realtor, your product isn't just real estate — it's the unique characteristics of the real estate that will appeal to buyers. Promotion. Price. Place.
How to do the 1 rule in real estate?	Multiply the purchase price of the property plus any necessary repairs by 1% to determine a base level of monthly rent. Ideally, an investor should seek a mortgage loan with monthly payments of less than the 1% figure.

• How to start real estate with $1,000 dollars?
  • The following types of real estate investments don't require much cash, allowing you to get started with just $1,000 to invest.
    1. Fractional Ownership in Properties.
    2. Publicly-Traded REITs.
    3. Real Estate Crowdfunding: Private REITs.
    4. Real Estate Crowdfunding: Loans.
    5. Private Notes.
    6. Real Estate Wholesaling.
    7. Invest in Land.
    8. House Hack.
• What is the most profitable way to sell my house?
  • Here are 10 tips for selling your home that Realtors say will separate you from the competition — and help you sell for more money.
    • Up your curb appeal.
    • Get a pre-listing inspection.
    • Highlight the positive with professional photos.
    • Stage your home.
    • Set the right asking price.
    • Remove personal items.
    • Be ready to move fast.
• How do I start successful in real estate?
  • 10 Tips for Succeeding in Real Estate You Won't Learn in School
    1. Hang your license with the brokerage that's right for you.
    2. Create a plan for success and hold yourself accountable.
    3. Have savings that can tide you over in lean times.
    4. Learn what your customers really want and then deliver.
• What are the four types of real estate?
  • The 4 Types of Real Estate Investments (Land, Residential, Commercial, Industrial) Real estate plays a crucial role in the global economy, offering opportunities for investment, wealth creation, and economic growth.
• What makes a house harder to sell?
  • Factors that make a home unsellable "are the ones that cannot be changed: location, low ceilings, difficult floor plan that cannot be easily modified, poor architecture," Robin Kencel of The Robin Kencel Group at Compass in Connecticut, who sells homes between $500,000 and $28 million, told Business Insider.
• How do you refresh a real estate listing?
  • How To Move A Stale Listing
    1. Run A Market Analysis. One of a real estate agent's best tools is a comparative market analysis (CMA).
    2. Reassess Your Marketing.
    3. Staging.
    4. Updating Curb Appeal.
    5. Make Needed Repairs.
    6. New Photography.
    7. Rewrite The Listing Description.
• How can I increase my property value cheaply?
  • Consider making these updates in your first year of homeownership:
    1. Make basic repairs. Don't let that torn screen door or leaky window drive you crazy for years.
    2. Paint.
    3. Install new floors.
    4. Spruce up your ceilings.
    5. Update fixtures and hardware.
    6. Add low-cost landscaping.
    7. Go green.
• How do I add value to my property?
  • 12 ways to add value to your home
    1. Paint. Old paint can make your home feel, well, old.
    2. Improve the garden and outdoor living areas.
    3. Add storage.
    4. Improve the facade and landscaping.
    5. Give the floors some love.
    6. Update the heating and cooling.
    7. Update the blinds and curtains.
    8. Replace old handles and hardware.
• What adds value to a home 2023?
  • During the pandemic, staying in place gave rise to extravagant outdoor kitchens and elaborate home offices. Now, homeowners are leaving the house more and the best return on investment (ROI) in 2023 comes from smaller renovation projects and updated kitchen, bath, and living spaces.
• How do you break bad news in real estate?
  • How to Break Bad News to Real Estate Clients
    1. Use the situation to prove your value as an agent.
    2. Stay calm and upbeat.
    3. Tell them as soon as you have the details.
    4. Watch your pitch and speed.
    5. Avoid using the phrase “bad news”
    6. Don't turn into a drama king or queen.
    7. Be direct and honest.
    8. Refocus on moving forward.
• What is the purpose of the buyer's guide?
  • The purpose of a buyer's guide is to give consumers all the knowledge they need to make an informed decision before purchasing. It should show your audience what sets your business apart from others in the industry.
• What occurs during a walkthrough?
  • During the walkthrough, a buyer and their real estate agent will go through the property. They'll check that there's no new damage, that all the home's systems and appliances included in the sale are still working and that the home is in a clean condition.
• What should be in a buyer's guide?
  • There should be product descriptions, pricing information, features and benefits, and product images in a buyer's guide that help direct consumers to their best choice. Additionally, a buyer's guide should be written in a way where it's digestible to the reader.
• What is equity sales in real estate?
  • July 26, 2023 | By Underwood Law Firm, P.C. Frequently, when homeowners are dealing with financial difficulties, equity purchasers may induce homeowners to sell their homes for a fraction of the price. An “equity purchaser” is anyone who acquires title to any residence in foreclosure, with some exceptions. (Cal. Civ.
• What does an equity sales do?
  • Equity refers to the shares of a business. An equity sale involves the transfer of shares from one party to another. Equity sales differ from other forms of business acquisition, such as asset sales. In an equity sale, the day-to-today operations of the company may remain relatively unaffected.
• How does equity work in real estate?
  • Equity is the difference between what you owe on your mortgage and what your home is currently worth. If you owe $150,000 on your mortgage loan and your home is worth $200,000, you have $50,000 of equity in your home.
• How does equity work when selling your home?
  • When the market value of your home is greater than the amount you owe on your mortgage and any other debts secured by the home, the difference is your home's equity. Selling a home in which you have equity allows you to pay off your mortgage and keep any remaining funds.
• How much can you make in equity sales?
  • Equity Sales Salary

    	Annual Salary	Hourly Wage
    Top Earners	$80,000	$38
    75th Percentile	$50,500	$24
    Average	$48,395	$23
    25th Percentile	$32,000	$15