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59 Cards in this Set
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- Back
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What is real estate investing? Can i invest with a full time job |
The art and science of using properties to generate wealth through a variety of niches and strategies |
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What is appreciation? |
The value of something increasing overtime |
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What is forced appreciation? |
Basically house flipping a run down house. |
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Should you ever bet on appreciation? |
No, appreciation should be considered the icing on the cake |
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What is cash flow? |
The amount of money left over after exspenses. Say you own a property that your tenants pay you rent of 1000 dollars a month. You're expenses are 800 dollars a month so you're cash flow is 200 because it is the money left over after exspenses. |
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What is a loan paydown? |
If you use a mortgage on a property, every month the property is being paid down a little bit more and more |
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What is a mortgage? |
A mortgage is a loan used to purchase a property, where the property serves as the borrowers collateral. |
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What is a lien? |
Legal notice that's put on file as a consequence of an unpaid debt. |
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What happens if your lien is not dealt with? |
Real estate transactions will be put on hold if the lien is not dealt with |
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Do you gain tax benefits if you invest in real estate? |
Yes because the irs wants to encourage us providing housing and stimulating the economy |
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What is a real estate niche? |
A property type or segment |
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What does the real estate market cycle look like? |
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What constitutes the tipping point of the real estate market cycle? |
Prices begin to fall, compensating for the over-building and high prices. Foreclosures begin rising, as homeowners cannot sell due to owing more than their home is worth. |
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What is a foreclosure? |
Foreclosure is what happens when a buyer fails to pay a mortgage. More specifically, it's a legal process by which the owner forfeits all rights to the property. |
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What constitutes the decline portion of the real estate cycle? |
Prices continue to fall, foreclosures flood the market. People are fearful of buying, causing even more inventory and driving prices down. |
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What constitutes the bottom of the real estate cycle? |
Prices bottom out, causing investors to start purchasing much of the excess inventory. Deals are plentiful and cashflow is at an all time high. |
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What constitutes the climb portion of the real estate cycle? |
Confidence among home buyers improves, leading to more sales, decreasing inventory, and higher prices |
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What constitutes the peak portion of the real estate market cycle? |
Prices are at an all time high, inventory is down, multiple offers are common, even above asking price |
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Whats a good example of a wholesale? |
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What is the MLS? |
Multiple listing service. Like a collection of all real estate properties for sale by other agents. |
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Can you access MLS without your real estate license? |
No but we can use realtor.com Zillow.com Trulia.com And redfin.com which is similar Also your real estate agent can do this for you |
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When making an offer what two criteria should you set? |
A strike price and also a price you will not go below |
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Whats one way, besides mls, of finding real estate deals ? |
Direct mail marketing |
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Whats another way, besides MLS, and direct mail marketing to acquire deals? |
Driving around to look for deals |
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What are all the ways to potentially find deals? |
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What is the 50 percent rule? |
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Whats a good example of the 50 percent rule? |
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Are commercial properties better than residential? |
Yes. Why? Find out |
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How are equity partners found for property investment? |
Idk |
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If a property has a low vacant unit rate, why could this be? |
This could be because the rent your charging is too low |
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What should be the very first step in investing in real estate? |
Know your terms. This book might help? |
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What is hard money? |
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What is the 2 percent test? |
We use it to see if a property will cash flow.
Looks at the fraction of what rent is compared to the total purchase price. If it equals 2 percent or more.. Then it will most likely cash flow |
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What's an example of the 2 percent test? |
Purchase price: 50,000 (include repair fees) Rent: 750 per month 750/50,000 = .015 = 1.5% if it doesn't go above 2 percent then it probably wont cash flow |
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How can you find deals using a real estate agent? |
Have them access the MLS and ask if they can set up auto alerts for you. |
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How can you find deals using craigslist? |
Place a we buy houses ad Or call the mom and pop landlords.. Ask if they will sell |
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When having a property appraised, whats a good thing to bring to an appraiser? |
A packet of information they may have missed |
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What is a comp in real estate? |
Comparable sales. Used to determine value of a property. Basically, its what other homes have sold for. |
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What is the FHA? |
Federal housing administration |
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What are closing costs? |
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Why is it important to understand financing options? |
Because its like having a toolbox of methods you can use to pay for a house. |
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What is a conventional mortgage? |
When you go to the bank and ask for a loan to pay for a house. Typically you have to pay 20-30 percent down. Usually low interest rate. Conventional mortgages are likely the best rate you will find. Usually 30 year loan Only used for 1-4 unit property. |
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What happens when a bank acquires a bunch of mortgage loans? |
They package them all together and sell them to fannie mae. Then Fannie Mae gives all that money to the bank so that they lend more mortgages out. |
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What's one mistake beginners make when planning the different costs of an investment property? |
They forgot to factor in broken water heaters and unforeseen costs |
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What are portfolio lenders? |
Portfolio lenders don't sell all their mortgages to Fannie Mae. So, this means that they don't have to stick to the same rules set by Fannie that conventional mortgages have to. More fleixible. May work with you past 10 properties. Not necessarily more easier though. |
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What are the two different types of direct mail forms? |
Letters and postcards |
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What do you need to do when marketing with direct? How often? |
Send at the first of every month |
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What is the goal of a FHA loan? |
To get people their first house. Especially lower income people |
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Does the FHA loan have limits? |
Yes, its different depending on the area. In California its 287,000. |
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Whats the kicker of an FHA loan? |
It has to be owner occupied for the first year |
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What is a 203k loan? |
Similar to an FHA loan.. But the only difference is your down payment will be 3.5 percent of the purchase price plus the rehab cost |
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What's a good way to scope out potential deals? |
Recruit your mailman |
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What do seasoned investors think about others problems? |
They are solving them. You're trying to get rid of a house and I will take it to help you out. |
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Whats one you can motivate people to look for houses for you? |
Referral fee |
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How do you calculate the NOI? |
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What is a bandit sign? |
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What is an absentee owner? |
An individual who owns a piece of real estate but does not live in it |
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What is a yellow letter? |
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Should you feel good about your offers? |
No you should feel embarassed.ask for a deal. |
