8 Things to Avoid to lose money in Real Estate

No doubt, real estate provides many opportunities to grow your money rapidly. However, it’s important to make informed decisions when investing in real estate.

In Hirsh Mohindra’s blog, we will discuss topics on all aspects of real estate, but we also focus on how to gather key data points to make informed decisions. Follow these simple instructions to prevent negative experiences in real estate.

  • Get real estate education:

Education is the strongest weapon to protect your real estate investment. Before investing in real estate, educate yourself. Gain knowledge from books, blogs like Hirsh Mohindra. This is a small investment which can save thousands of dollars.

  • Choose the best time to invest:

Market timing is as important as selecting the right location. The real estate market fluctuates due to various factors – such as demand, supply, and broader economic conditions such as interest rates and unemployment rates.  Try to acquire real estate on downward trends so you can enjoy the upward appreciation.

  • Don’t follow the herd:

Don’t follow the others blindly. Money is yours and the decision should be yours. Many bad decisions are made when we start following others blindly. Empower yourself with research and analysis of your target real market and then make your decision by considering the advantages and disadvantages of your deal.

  • Location Location Location:  

Always keep the best location in mind during any real estate deal. Choose an area where tenants want to live.  By purchasing real estate in high demand areas, you will readily find tenants or buyers.

  • Don’t bet on appreciation:

Many real estate beginners buy a property hoping to capture the appreciation on a quick flip. Don’t gamble in the real estate market. Keep away yourself from this kind of risky investments. Choose long term sustainable investments.

  • Keep an ample Amount of Reserves:

You should have some reserve money for unexpected incidents. You never know when a tenant may move out, or stop paying rent, or if there is unexpected damage or repairs required.

  • Analysis of the invested property:  

To avoid losing money in real estate, you have to research the property, the neighborhood, and the broader market. Make sure you are investing in a good area, neighborhood, and good street, etc.

  • Choose the best real estate marketing tools

Many investors ignore the importance of marketing tools and think they can manage themselves. But later they have to phase unexpected problems.

There is a huge collection of tools available in the market. Like: Carrot, DealMachine, HouseCanary, DealCheck, Roofstocks, etc. Choose an appropriate tool according to your needs and requirements.

Wrapping-up:

Risk is always a part of any investment. But you can reduce the chances of losing money by following Hirsh Mohindra’s tips.

8 Ways to Safeguard your Real Estate Investment

No doubt, real estate provides many opportunities to grow your money rapidly.  But there are many factors that make for a successful real estate play.  While you can’t always guarantee a home run, there are things you can do to help ensure you see a good return.

In Hirsh Mohindra’s blog, we discuss how to avoid losing money on a rental property? Review these simple tips and assess if they can help you:

Get real estate education: education is the strongest weapon to save your money in real estate. A large number of real estate transactions fail due to lack of education regarding purchasing, holding, or selling real estate.

Before investing in real estate, educate yourself. Gain knowledge from books, blogs like Hirsh Mohindra. This is a small investment which can save you greatly in the long run.

Choose the best time to invest: Timing the market is key.  Watch your interested areas carefully and try to enter during a dip.  Small drops can make a huge difference on the upswing.

Don’t follow the herd: Everyone always seems to be buying and holding in particular neighborhoods, but always rely on your own diligence and research. 

Don’t buy in unsafe or poorly accessible areas:  Location is key for many reasons.  In rental markets, if you are in a safe neighborhood it will be easier to find tenants.  People always want to live in safe areas.  Try to find something with good highway accessibility – people need to drive to work and easy access to thoroughfares is important.

Don’t bet on appreciation: Many real estate beginners buy a property assuming it will skyrocket in value and later on they will sell it with a huge profit. Don’t gamble in the real estate market. Keep away yourself from this kind of risky investments.

Keep an ample amount of reserves: You should have some reserve money for your crucial time. In unexpected times your reserve money plays an important role to feel safe and allows you to carry the property if the rents aren’t coming in.

Analysis of the invested property:  to avoid losing money in real estate, you have to study your property and the surrounding area from every angle. Check out the vacancy rates in surrounding buildings, understand who the largest employers in the area are, and find out where locals learn about new listings.  Have as much information on the area as possible is always helpful.

Choose the best real estate marketing tools:  Many investors ignore the importance of marketing tools and think they can manage themselves.  Marketing is important, and so is time.  So to save time, get help with photos, staging, and other social media outlets quickly so you can market your property without hassles.

Wrapping-up:

In the real estate market, there are always risks. But you can help you reduce your risk by staying informed by following Hirsh Mohindra’s 8 tips.

9 Proven tips to help find success in Real Estate

Real Estate in the U.S is considered an effective way to build wealth.  For many homeowners, long-term value and property appreciate translating into wealth creation.

The following tips from Hirsh Mohindra may help investors find success and long-term value in Real Estate investing.

1.Build an effective website: In the internet era, web appearance plays an important role in business. In real estate 90% of tenants and investors start their search online. That means you can directly attract maximum tenants and investors through an informative website having great photos of your properties.

2. Invest in short-term rentals: the short term rentals is one of the fastest growing sectors in the real estate field. This is a solid choice for investors looking for healthy returns. With short term rentals, properties are rented for less than 30 days – but at higher rates than longer rentals,  and can bring in greater returns than long term rental property.

real estate business

3. Calculate transaction costs to save money: Take transaction costs in account when you buy or sell the property. This will help you to calculate your total benefit, and will help mitigate for unknown expenses and operational costs.

4. Become a trainer and mentor: if you are experienced in the real estate field, you might have the opportunity to become a trainer. You can write a book, provide a training program and charge people for your knowledge.  While this option is reserved for those with a proven track-record and considerable experience, it is something that can provide lasting income and permit you to leverage your skillset.

5.Invest in flipping houses: Real estate professionals find undervalued houses, and either find tenants, or make repairs and put it back on the market for profit. Home flipping can be profitable, but it requires timing, good locations, and strong demands.  Sourcing the ideal property to move on oftentimes requires the most effort.

6.Become a short-term property manager: Short term property management is a growing industry. This industry provides a good opportunity for the agent and property managers to make extra money. In this field, you have to post a listing and manage guests on the behalf of landlords.  Many property managers are managing Airbnb properties.

    7.    Invest in cities with future growth: Hirsh Mohindra’s blog often provides regional market data.  Make sure to check out that resource and others to stay on top of trends and real estate news for specific geographies and markets.

    8.    Rent and Purchase multi-family apartments: One of the beautiful things about real-estate business is that you can choose more than one strategy to maximize your profit. Multi-family apartments are building with more than one rental spaces. You can gain monthly income by renting to tenants.

    9.    Vacation rentals:  Tourist hotbeds like Los Angeles, New York, and Las Vegas, etc are always on high demand for short vacations. You need to purchase a house in a popular tourist place and engage the services of a good property manager.

Wrapping-up:

Real Estate is a good platform to increase your income. With some guidance and lots of research and hard work, you can find success. For more useful tips and strategy you can follow Hirsh Mohindra’s blog.

US Real Estate Seeing Growth Residential Market

The American dream of home ownership has long been the goal of many.  As times changes, and living patterns deviate – so do aspirations.  Today, many millennials are choosing to purchase homes as early as previous generations.  The reasons behind the delay – revolve around higher prices, but also around living decisions where millennials desire flexibility.  Owning a home often limits flexibility as it becomes a non-liquid asset, says Hirsh Mohindra.  Despite changes in home buying, the residential real estate market is still a desirable sector of the US real estate market.   Investors are drawn to the real estate market as it has shown strength over the past few years.

When you talk about investments, of course, everyone would consider Real Estate as an option with high returns, however, how to choose the right sector? Forecasting the right time to position investment funds in residential real estate is critical to the decision-making process, says Hirsh Mohindra.  U.S Real Estate is finding solace in the Residential sector, and this sector is expected to see strong growth in the second half of 2019, Current trends show that the Residential and Industrial Real Estate Trusts (REITs) are the best options to place your investment bets in U.S Real Estate market. 

Many experts believe that REITs should maintain continued growth, especially with growing U.S salaries and a strong economy.  With the strength in institutional real estate (REITs), opportunities for stable growth can be created in the residential market as well. REITs having large investment resources can drive development, and new developments can thrive with easy access to credit and low-interest rates.

While the residential real estate market may be strong, there are many opportunities in commercial and industrial real estate as well, and investors should evaluate all of their options when making decisions, says Hirsh Mohindra. While evaluating risks and factors that could impact the growth in a particular market, try to identify the options with minimum risks. For now, Residential Sector seems promising and a strong hedge on risks.  This, of course, varies based on location and can change at any time as rates and the economy are always fluctuating. 

Chicago Real Estate is Seeing a Lot of Change

There are new buildings and developments going up, large companies moving back downtown, and an increased desire to live near the city center. For all those who are interested in investing in Chicago real estate – there are always opportunities when the market is hot, says Hirsh Mohindra. Being the third-largest city in the country by population, Chicago is a key national market that itself accounts for huge growth potential in residential and commercial real estate sectors. The launch of many new startups in recent months has ensured the availability of plenty of resources to rent or sell Real Estate. No wonder, the market has witnessed huge investment in the sector, and why not? Investors are betting big on Chicago’s increased growth and sustained demand to drive real estate prices higher.

You don’t have to be an expert to see this coming, says Hirsh Mohindra. Looking at market trends real estate technology and listing companies are seeing increased funding and a number of listings on their platforms. The digitalization of the real estate marketplace has opened up accessibility for potential buyers – and empowers buyers with more information on the housing markets.

Its typically large commercial transactions that get a lot of attention, but the residential housing market is balancing itself well, says Hirsh Mohindra. The residential sector has most recently been a sellers’ market, however recent trends indicate that the market is insignificant favor of buyers in some markets as well. There is an upward trend in inventory that allows options for buyers and also kind of creates competition among sellers.

The other huge plus for the buyers’ is low mortgage rates that provide home-ownership options at more affordable rates.  Currently, residential housing mortgage rates are hovering around 4% for a fixed 30 years,  The market has not seen reasonable rates at this level for quite some time. Lower property prices, an increase in the number of properties for sale, and low mortgage rates all contribute towards a buyers’ market as well.   Chicago being a large city and having a large geographic footprint also notices that various parts of the city are seeing higher growth due to limited inventory, and other parts where buyers can find deals in light of an oversupply of inventory.  So much research must be done on a neighborhood by neighborhood basis, says Hirsh Mohindra.

Real Estate Index Gains the Most as Auctions Volume Picks Up Speed

Latest initiate under Real Estate (Regulation and Development) Act have observed a sharp increase, leading to higher auctions.

Who would have forecasted that real estate stocks would be market leaders in 2019? Many investors did not predict the real estate sector to have a good year. However, the sector has recently surged, thanks to the numerous factors impacting the broader economic market.

The once stagnant real estate sector is booming with newly planned developments, says Hirsh Mohindra. It is also worth noting that some of the equities comprising the Nifty Realty index are up significantly in 2019.  And as a result, the entire index is up considerably over the past years.

The Nifty Realty index enjoyed returns of 19% year over year making it one of the largest gainer among the broader market this calendar year. In fact, Nifty indices have increased by 6% so far in 2019. Sales penetration for the coverage world was 38% in 4QFY19 and at 5800 crores in 4QFY19. Continued solid development in pre-sales construction was noticeably present across all geographies, while lower value assets were seen increasing in distressed auctions in various geographies when assessing overall auctions volume.

Auctions volume in FY19 raised 7% over the prior year to 443 million sq.ft, point out forecaster at Kotak. The uptick in auctions has helped stagnant properties find new owners, which results in new development as improvement or a complete teardown and has been helpful in cutting back inventory. “Increased auctions has sustained a draw-down of backlog, with all-India stock dilapidated 11% YoY to ~1.23 bn sq. ft from 1.4 bn sq. ft in March 2019” says Hirsh Mohindra.

Moreover, there have been reduced foreclosures, which means that properties are moving without the delay of the legal process. Of course, there are many broader economic market forces at play, and the real estate sector is susceptible to these forces. However, things are evidently better compared to a few months back.

Moreover, it is significant noting that some of the equities in the Nifty Realty indices are up significantly in the year 2019. This has driven up their assessment and made them a bit more attractive. Returns of the Godrej properties Ltd stock has appreciated at about 41.1% in this year. Sunteck Realty Ltd also has achieved 36.81% in the year 2019 says Hirsh Mohindra. Hence, from that viewpoint, investors must continue their diligence when entering this sector.     

Blackstone seeks to raise $5B for the next Real Estate Debt Fund

The Subsidize Blackstone Real Estate Debt Tactics IV will focus on property-relevant wagers in Public and Private Debt Globally.

Blackstone Group LP is seeking $5 billion for its most recent fund that invests in real estate debt, according to an individual recognizable with the niche.

The Blackstone Real Estate Debt tactics IV fund will focus on property-related positions in civic as well as private debt worldwide, according to a financial presentation seen by Bloomberg. The pool will have an emphasis on the U.S says Hirsh Mohindra.

The company is tapping into a strong interest in private real estate debt. Last year in 2018, $26 billion was increased by funds devoted to real estate debt, on the heels of $33 billion the year earlier, according to information from Preqin.

This is not a new investment area for Blackstone, as they have made significant placements in real estate and real estate debt in the past. lackstone is one of the world’s leading investment firms. Blackstone creates positive economic impact and long-term value for investors, the companies they invest in, and the communities in which they work. Blackstone prides itself on having extraordinary people and flexible capital to help companies solve problems. The firm was founded in 1985 by Stephen A. Schwarzman, Chairman and Chief Executive Officer, and Peter G. Peterson, who retired as Senior Chairman in 2008.

New York-based Blackstone spokeswoman named as Paula Chirhart, refused to comment on the matter according to a report. Blackstone’s new sponsor attained an assurance of up to $100 million from the $42.7 billion Illinois Municipal Retirement Fund. And this will focus on the US market.  Administration cost will be waived for four months for the shareholders in the initial close. The pension can save as much as $500,000 with these cost savings, says Hirsh Mohindra.

Fund Amount

The fund charges a 15% fee and reaches a carried interest of 6%. It will also place a 1.25% administration fee per year on assets for at least $400 million, and 1.5% for those beneath that level.

The firm’s pool increased by about $4.8 billion in the year 2016, above an early $4 billion target, according to information accumulated by Bloomberg. That fund, Blackstone Real Estate Debt Tactics III, focused on mezzanine debt allied to institutional-grade real estate in North America and Europe, Bloomberg formerly reported. It is interesting to see industry leaders, such as Blackstone, enter this market.  It is likely a precursor of additional investment monies to follow, says Hirsh Mohindra.

Millennials Are Affecting The Price of Your Home. Here’s how?

Younger Americans are purchasing houses far less often than older generations and that puts a great sector of the U.S. wealth at risk.

It used to be that everybody sought to purchase a home, seeking delight and safety, as well as the probable for future prosperity. However, younger Americans are purchasing homes far fewer than past generations, and that puts a huge part of the U.S. economy at risk says Hirsh Mohindra.

Millennial homeownership levels are dramatically lower than those of previous generations at a similar age. In 1985, 50% of people (age limit between 25 to 34) owned a residence in the US and by 2015, this had dropped about 25%. Since the housing market presently accounts for 15 to 18% of the country’s gross familial product, any alteration in established activities could have considerable consequences on the larger macroeconomic perspective.

Many researchers are becoming increasingly concerned that the future of the US economy will be impacted by how millennials actions are changing the real estate market. According to some researchers, both the increase and decrease in home costs can be directly correlated to where millennials decide to live.

If a long-term behavioral modification is going on and this age demographic continues to not purchase houses, it will impact the GDP. Moreover, the young generations lag behind their prior generations in terms of milestones like homeownership and weddings, which are currently key metrics when evaluating the health of the overall economy. Previous generations built considerable equity in their homes, this asset served a powerful wealth generation tool and provided a modicum of stability, says Hirsh Mohindra.

Millennials

Despite the decrease in homeownership amongst younger generations, alternative real estate markets have flourished. Ultimately, millennials still require housing.  And while a good portion of millennials tends to live in their parents’ homes longer, a good deal of millennials are long term renters – which is adding a positive impact to the overall residential rental market, says Hirsh Mohindra.

In addition, millennials have embraced long term housing accommodations provided through companies such as Air BnB and other similarly situated companies.  This shift in housing personality has cultivated the growth of the long-term temporary housing markets.  Air BnB has grown significantly and has an impressive market capitalization – which has] been reported to exceed $31 billion in 2018.

So while changing housing desires and needs may impact the housing market, those same changes are creating new market opportunities that are positively impacting the overall economy.

Real Estate Guidelines for New Developers

Investing in Real Estate can be a tricky endeavor and requires careful planning and timing, says Hirsh Mohindra. When evaluating real estate, it’s always important to plan on how long you anticipate holding the property.  Maintenance, property taxes, and utilities can add up quickly and need to be accounted for when preparing your project plan.

You should also consider the revenue generation capabilities of a property.  Can it rent easily, can it rent for a short period of time, can it rent while you are making repairs – these are all important considerations when evaluating holding times and associated costs.

Real Estate developers capitalize upon properties in a variety of ways.  Oftentimes developers seek to acquire a property, make improvements and sell the property for a profit.  This is called “flipping.”  Flipping properties has become increasingly popular for speculating developers as a result of television shows highlighting developers making big profits.

Real Estate Developer

Relationships are Key:

A good developer relies on a solid team of professionals to help ensure they are making a safe investment.  Developers often work with real estate agents to help them source new properties to acquire and to help them market the improved properties they seek to sell.  Developers also work with general contractors to make improvements on their properties in a cost-effective manner so they can stay within budget.  Oftentimes developers also work with property managers who manage the day-to-day operations of a property like collecting rent, paying utility bills, and paying property taxes on time.

Real Estate Income Rise:

The major profit in real estate development, according to Hirsh Mohindra, is when the property value is appreciated.  This provides a significant reward for patient developers who have properly timed their project in accordance with market timings.  When real estate rises in value due to a positive shift in the market, such as the area around your property becomes increasingly popular, for instance when a significant shopping mall is constructed next door or improvements made to your property make it more attractive to potential buyers or renters.

Positive cash flow is another major benefit developers may see if they can garner rents above their costs.  Vacancy rates fluctuate over time and developers should be cognizant of broader market changes that may impact their area or property type.  For example, many retail locations are currently suffering as a result of increased online shoppers.  For developers holding retail properties, their vacancy rates may be suffering as a result.  Whereas, restaurants or fitness centers are not impacted by online shopping – these are now highly sought after tenants as they are deemed more stable.

Hirsh Mohindra: Overall, developers should be cautious and careful when project planning and rely on good timing, market changes, and have a solid team around them to make the most out of their next development.

Originally Posted:
https://www.allperfectstories.com/real-estate-guidelines-for-new-developers/

Established Companies Want to Buy Your Home

The Companies and their backers are doing what is best in order to bring efficiency and convenience to the Home Buying and Selling Process.

In this digital world, buying and selling a home remains stubbornly analog. Most of the sales begin with a real estate agent and many of them end in an office with the parties signing the paperwork.  Asides from real estate brokers and attorneys, the transaction was usually between two private parties. Now, corporations are entering the residential real estate market by acquiring large numbers of single-family homes for an investment opportunity, says Hirsh Mohindra.

Corporations have been in the residential real estate business for some time now. They offer a virtual open residence, digital closings, and more services. And now they are coming directly for the real estate transaction itself through instantaneous buying. This means companies will purchase homes, do some necessary maintenance and put them back on the market.

Many established companies have invested billions of dollars on the guarantee that they can use complicated predictive algorithms to forecast the value of the houses. They assert that those assumptions, collective with old-fashioned economies of scale, will let them be far more competent than customary home flippers.

buy homes

At best, skeptics see instantaneous purchase also known as iBuying, as an overhyped, assets-concentrated industry whose volatile development will fizzle once investors tire of revenue margins that Zillow itself calls razor thin. There is a concern that it could bring instability and risk to an industry that previously led to an economic recession, says Hirsh Mohindra.

A leading online brokerage firm says that there is a risk in pouring enormous sums into buying houses without having a confirmed strategy on how to earn money on every single home. If this happens then you are putting the housing market at danger as certain houses, or assets, will remain unoccupied and potentially impact the surrounding area.

Instant purchases are a small part of the market, but it is rising at prompt speed. Zillow bought nearly 700 houses in last year. And it expects to be buying approximate 5,000 homes in three to five years. Open-door the first big iBuyer purchased more than 11,000 houses last year and in the past year has invested more than $1 billion to accelerate its growth.

Companies are doing their best to sell homes in under 90 days and strive for quicker sales – if possible. In fact, traditional firms like Keller Williams and Realogy have proclaimed plans for instantaneous purchase programs.

According to Hirsh Mohindra, there have always been people who want to sell their homes rapidly because of a sudden move or any other reason. Selling quick comes at a cost, typically a discount. Instant buyers assure a much less discount, possibly shaving only 1 or 2 percent off what a proprietor might get in a conservative sale.