For most of us the obvious choice of properties are single family homes. Although you can invest in real estate without owning a home, most people follow the experience they made while purchasing their own home. This is familiar ground and the learning curve for doing a real estate deal of this type is pretty slim.

Of course there’s a drawback with this approach. The competition is fierce and there are markets where investors are artificially driving up the cost of the properties while completely discouraging first time home buyers. If this is the case, the burst of the real estate bubble is just a matter of time.

How do you avoid these situations and still successfully invest in real estate? How do you get ahead of the competition and be prepared for bad times in real estate investments as well? The only answer I have is commercial real estate.

Why commercial real estate you might ask? Commercial real estate is a solid investment in good and bad times of the local real estate market. The commercial real estate I’m referring to are multi unit apartment buildings.

Yes you will become a landlord and No you don’t have to do the work by yourself. You are the owner and not the manager of the apartment building. The cost of owning and managing the building is part of your expenses and will be covered by the rent income.

Apartment buildings are considered commercial real estate if there are 5 or more units. To make the numbers work you should consider to either own multiple small apartment buildings or you should opt for bigger buildings. This will keep the expense to income ratio at a positive cash flow. Owning rental properties is all about positive cash flow.

With investing in single family homes it is easy to achieve positive cash flow. Even if your rent income doesn’t cover your expenses 100%, the appreciation of the house will contribute to the positive cash flow. With commercial real estate the rules are different.

While single family homes are appraised by the value of recent sales of similar homes in your neighborhood, commercial real estate doesn’t care about the value appreciation of other buildings. The value of the property is solely based on the rent income. To increase the value of a commercial real estate you need to find a way to increase the rent income. The formula on how this is calculated would be too much for this short article. I listed a few very helpful books where you can find all the details.

What’s another advantage to invest in commercial real estate? Commercial real estate financing is completely different than financing a single family home. While financing a single family home you are at the mercy of lenders who want to make sure that you are in the position to pay for the house with your personal income. Commercial real estate financing is based in the properties ability to produce positive cash flow and to cover the financing cost.

After reading all these information about commercial real estate you want to go out there and dive into the deals. Not so fast. First, you need to learn as much about real estate as possible. In commercial real estate you’re dealing with professionals. If you come across too much as a newbie you will waste these guys’s time and your commercial real estate career ended before it actually started. Second, no commercial real estate lender will lend you any money if you can’t show at least a little bit of real estate investment experience.

What’s the solution to this? Go out there and do one or two single family home deals yourself. It doesn’t matter if you make huge profits to start off with. Most newbie investors are loosing money on their first deal anyway. If you can manage to show positive cash flow with your single family home deals you are ahead of the pack.

My advice, buy a small single family home in a decent neighborhood and rent it immediately. This will keep your out of the pocket expenses at a minimum and you will have rent income to cover for your monthly expenses. Bonus, you gain experience as an investor and as a landlord.

Here’s another observation I made during my real estate investment career. Most people like to analyze, learn, discuss and analyze some more. They never actually got to do a real estate deal. They love to talk about real estate investments, but never did it themselves.

My approach to real estate investment was simple.

- I bought some books about real estate investment.

- I read every single one of them.

- I put together a simple plan on how I want to get started.

- I started looking for properties.

- I bought my first investment property 30 days after I started reading my first book.

- I made positive cash flow with all of my properties so far.

What is my point? You have to go out there and practice what you’ve learned. The only valid credential in the real estate business is practical experience. Having a couple of deals under your belt, you can go out there and start looking at commercial real estate and even impress seasoned investors with your knowledge. Because you made this experience by yourself and you know what you’re talking about.

http://ezinearticles.com/?Beat-the-Crowd-When-Investing-in-Real-Estate&id=20778

There are generally three kinds of real estate investment available to foreigners. These investments include the commercial estate investment and residential property investment. Residential properties are further classified into single family properties, apartments or condominiums and recreational properties. Regardless of what kind of real estate you are interested in, there are all sorts of tax ramifications, financing options and legal requirements that you have to deal with.

Why Should You Invest in the U.S. Real Estate Market?

You’ve probably heard of the increasing number of foreign real estate investments in the United States. This is not surprising. With the troubles that the real estate investment market is facing in the United States, greater opportunities in real estate investment were opened to foreign investors.

With the dollar’s value in its all time low, foreign investors are finding real estate bargains all over the United States. There are no shortages of deals in this market. More and more distressed properties are being sold everywhere and foreigners are pouring in millions buying these foreclosed or distressed properties. The United States real estate has become a fairly attractive long-term investment for foreign investors.

In November of 2006, the National Association of Realtors released a report entitled “Foreign Investments in U.S Real Estate: Current Trends and Historical Perspective”. The report showed that there has been a steady increase in foreign real estate investment in the United States. This is especially after the euro and the loonie became stronger in the face of the continuous devaluation of the US dollar. Prime bargains were opened to foreigners. Many foreigners have now looked into the possibility of retiring or settling in the United States.

If you’re a foreigner, you would find a lot of reasons why you should invest in the United States real estate market. Aside from the fact that the floating exchange rate has given you a lot of leverage over the bargaining table, the financial market is a pretty good reason why you should invest in the US real estate.

The financial market in the United States in relation to the real estate market is quite liberal and the restrictions against foreign investors are pretty reasonable. This is ideal for foreign companies that are seeking to invest in the real estate market in the United States in order to avoid tariff restrictions and are considering setting up an office or a company in the United States.

Furthermore, despite the devaluation of the US dollar and the wide foreclosures of a lot of property, the real estate market remains to be stable, though slightly shaky, due to foreign investors’ capital appreciation. Domestic real estate buyers may not necessarily share the same opinion, but the market has remained to be strong for foreign real estate buyers. This may be largely credited to the fact that there is minimal risk for them.

Why are Foreign Real Estate Investments Safe and Profitable?

There are a lot of investments you can make, but the safest you can make right now is investing your money in real properties. This is another good reason aside from the fact that you can make a pretty nifty profit, if you like, particularly now with the widespread property foreclosures and seemingly continuous US dollar devaluation. This is especially true if you are going to use the euro or the loonie when making your investment.

But why is US real estate investment safe for foreigners?

It is undeniable that stock investments are not a safe avenue at this point. The recession has not only affected the US economy; the same recession has greatly affected worldwide stock investments. Stocks values are dropping. It is also a fact that even without the current economic situation, stock values fluctuates.

On the other hand, real estate investments are pretty stable if you would compare it to stock investments – or even bond or mutual fund investments. With real estate investment, you’d be putting your money in an investment that would grow in value as years go by.

What are the Benefits of Foreign Real Estate Investment?

US state government supports foreign investments and along this line has formulated various tax breaks to encourage foreign investment on real estate. Many of these tax breaks are not available in many countries. In fact, most countries would frown at foreigners owning real properties within their territory.

Foreign real estate investment in the United States is open to everyone. As long as you can afford to buy the property or at least comply with the mortgage requirements and payments, you can secure for yourself a pretty good property in the United States. Again, with the current economic situation of the United States, this is the perfect chance for you to make an investment.

Another great benefit that you can take advantage of is the availability of mortgage financing. Lenders have opened their doors to foreign investors who are looking into purchasing a property. So, you don’t have to actually deplete your bank account. You can actually secure a mortgage loan and gradually pay it off.

I’m Canadian, What Are My Financing Options?

There is a steady increasing rate of Canadian real estate investors in the United States; and accordingly, the government has made certain that they have attractive financing options available to them.

If you’re Canadian – or if you’re a foreigner – you’d find a lot of reasons why you should buy a piece of real property in the United States. For Canadians, the parity of the currencies or the apparent devaluation of the US dollar is a pretty good reason itself. But how do you finance your purchase?

There are various financing options available to you depending on which state you are in. In Arizona, for instance, you’d get favorable financing terms if you are purchasing a property for recreational purposes, that is, you do not derive any income or benefit from your purchase or ownership. You will be required, however, to sign up a disclosure agreement and give a 30% down payment for your loan. To qualify though for a loan, you may be required to show availability of liquid reserves for a period of three to six months. You may also be required to present a minimum of 3-month bank statement.

If you are purchasing a property for investment, you’d probably meet stricter terms. Requirements may be more stringent. For instance, you could be required to give a down payment of more than 30% and you may be required to show one year worth of liquidity reserves.

Regardless of your reasons, if you feel like you can fulfill the requirements of a financing loan, you can then proceed to actually applying for a mortgage loan. Also, keeping yourself updated with the financing terms flux may be a wise idea.

Understanding the Tax Ramifications of Real Estate Investment

The first foreigner to have ever bought a real estate property in the United States was Peter Minuit. This opened the doors to foreign real estate investors. After a couple of centuries later, foreign real estate investment has grown into huge proportions, accounting for billion-of-dollar worth of industry.

The low risk attached to US real estate market, the availability of countless properties, and the steady market liquidity attract foreign investors in droves. The initial snag, however, is the process of understanding the legal ramifications of foreign real estate investment.

What you have to understand is that foreign investment in the United States can take a lot of forms. A foreigner has various options. He can acquire direct interest. He can acquire an interest in the real estate through a partnership, a corporation, or a limited liability company. The latter is the typical structure used by foreign investors.

Limited partnership or Limited Liability Company offers financial protection or indirect asset protection, especially in cases of bankruptcy, law suits and taxes. Foreign investors are generally taxed on the property as if they hold the property in direct interest.

Ideally, you should secure the services of a real estate accountant to help you out with the tax ramifications, but it would help if you, at least, know the basics before you actually talk to an accountant.

There are tax consequences that you have to deal with when you buy a real estate in the United States. You would need an Individual Taxpayer Identification Number which you will use with all your tax transactions. Your investment in real estates can be treated as a portfolio investment and will be accounted for as an investment income which can either be fixed or a periodic income. This is typically taxed at 30% on gross revenues. This tax though does not apply though to all foreign investors. Tax rates would vary depending on the tax personality the foreign investor opted for. For instance, a corporation would be taxed differently.

Other things that you should take note of are availability and requirements of tax refunds and state tax laws on real estate properties as they may differ from federal laws, among other things.

By knowing all these things, you may save yourself from a lot of hassles when you finally approach a real estate accountant. You’d be in same wavelength when you finally get down to talking business. It is, however, very important that you secure the services of an accountant. You’d have an easier time dealing with the taxes ramifications. You’d also have assistance ensuring that you comply with all the accounting aspect of your investment. This is especially true if you are purchasing a real property for investment purposes.

If you’re looking to invest in bargain property, REO properties are not the way to go. While they usually are bottom-of-the-barrel as far as price goes on the open market, you’re not going to find any really amazing deals by going to a real estate agent. You’re going to have to invest in foreclosures, and it’s best to stay away from properties that have a mortgage. Don’t heed that advice, and you’ll find out soon enough why.

Foreclosures that eventually become REO properties obviously always start out with a mortgage (which is why the bank ends up owning them). Tax foreclosure properties, on the other hand, almost never have a mortgage by the time they make it to tax sale, because tax payments are wrapped in mortgage payments. Mortgaged properties never end up at tax sale – the bank will pay the taxes, and then foreclose themselves.

The only surefire way to get unmortgaged property – a.k.a. “free and clear” property – is to buy tax sale property directly from the tax delinquent owners – after the tax sale. Most investors don’t realize you can buy these properties from the owner after the tax sale, so you’ll find very little competition here.

But even better is to never own any property at all. You can make some serious easy money by collecting mortgage and tax foreclosure overages for their owners. Overages are the money left over from the winning bid at sale, after the mortgage or tax encumbrance has been paid off. Most owners don’t realize they’re entitled to these funds – they think the bank or government just gets to keep this money.

So the money just sits there, until after a certain period of time, it legally becomes property of the government. There are billions of dollars of these funds sitting in the government coffers waiting to be collected.

Through a little-known legal loophole, these types of funds aren’t subject to money finder fee limits. So you can charge up to 50% for your service – and should. Without you, these owners are almost guaranteed to lose all of the money they have due and owing to them.

You’ve got to know how to find lists of these funds, and how to find and approach these owners so that they don’t try to collect without you and avoid your fee.

When closing a home, it is good to look at the Good Faith Estimate or the costs associated with your decision to purchase at settlement period. The interest rate is not the sole basis for the costs that you will incur during the closing stage.

When a prospective lender is legally operating, it is required by the Federal Law to provide a Good Faith Estimate with a three-day period upon the application of a mortgage. Though this is true, the reality is that there are always discrepancies between the estimate and the actual amount that needs to be paid. Some lenders intentionally reduce the cost to win the sale. This may be understandable but this is not good for borrowers who have limited funds to use for the purchase. What the government is doing is to ensure that a more accurate estimate is given to give the buyers the true picture in terms of purchase and other associated costs.

Closing costs normally range between 3% – 5% of the total loan amount. This is the allowance for the costs that will be covered for the other transactions with regard to your purchase. What you can do as a buyer is to gather the good faith estimates of at least three buyers and compare the costs. With this information with you, you can compare and check what one lender covers and what is not. Then, you can check on the details with each one.

Good faith estimates normally include appraisal fee, credit report, lender’s inspection fee and other costs that cover insurance, hazard and other requirements. You should note that closing costs are categorized as non-recurring and recurring. The non-recurring costs are one time fees and you are no longer to pay them again. Recurring costs should be repeatedly paid over a period of time. These include insurance and property taxes. It is good to classify these costs and know how much will be required for your one-time fee and the periodic costs and make sure that you will be prepared for such.

Don’t go to the last step of buying a home without checking on the closing costs. It is a wise move to look at this area and be assured that you are ready to move in that new house.

The fact is, that Mooresville is a bedroom community for Charlotte NC and as long as Charlotte continues on its path of prosperity, so too goes its surrounding communities including Mooresville. The business climate of Mooresville is unusual in that it is home to more than 60 NASCAR racing teams and the surrounding businesses that support those 60 teams.

It is also home for the headquarters of the Lowe’s Hardware chain, so the Mooresville economy is fueled by businesses that aren’t susceptible to economic fluctuations. This is just one of the many factors that have all contributed to Mooresville and the greater Charlotte NC areas 6% increase in real estate values in 2008.

The home building industry is still active and viable in the greater Charlotte area due to its steady, consistent growth and this means that finding a Mooresville NC home for sale in your price range is just as easy as it was, say, four years ago. Also, the simple fact of the matter is that Mooresville is a great place to live and raise a family due to the fact that they just don’t have a lot of the big city problems that so many other areas tend to be plagued with. Also with the median price range on a home in the greater Charlotte NC area presently at $225,000 you will find prices far more affordable on any sized home when compared to other similar market areas.

During this economical reconstruction, every moment counts. Day by day the climate can and will change. As the government implements its banking bail out, it is imperative to know how it will affect you, the areas which you have invested, and those areas you look to invest. The consequences of not knowing can make a seemingly profitable venture into a loser.

Employment trends can change the economy of a city or state with just one meeting. People want to live where they can see opportunities to find adequate incomes and businesses that can enhance living. Job loss can create a ripple effect that can lower property value and hinder the growth of commercial industries.

Today, housing cycles vary from one region to another and from zip code to zip code. Some areas have hit a plateau while others have fallen off the cliff. Which one is on the rise or forecast to rise in the near future?

A good real estate consultant or consulting team can answer that and all of the issues that may arise in your real estate venture. They can lead an investor away from trouble waters into an ocean of profit and prosperity. Real estate are a mighty tool, an auxiliary intelligence to enhance an investors vision.

If you are going to venture into real estate investing, if you are already an investor, or if you are looking for your first home, a real estate consultant can wipe many of your troubles away. It is smart business, it is for long term planning, and it is an investment in yourself.

Home buyers and sellers don’t go through the home sale or purchase process very often and either want to forget the troubles or figure that the occasional reactive roller coaster ride of buying or selling a home is the norm. Often the buyer and seller don’t realize that they can contribute to the roller coaster ride out of naivety or a lack of information. To take back the transaction process and become more proactive Mark Nash author of 1001Tips for Buying and Selling a Home offers some examples of personalities you might run into and how to manage them.

Sellers. They have what you want, the house, but they need buyers to move on. Everything should be in writing, the contract, counteroffers and acceptance. Timelines for responses should be clear. Personal property included with the sale must be listed in detail. Possession should be clearly defined down to the minute. Keep terms and demands reasonable. Don’t create unnecessary hurdles for buyers; they can contribute to buyer’s remorse. You don’t have to like or meet the buyers. Perform the purchase contract in good faith.

Buyers. They have what the sellers need, the money to cash out and move on. Review real estate contracts long before you write one. Understand the home purchase process before you enter into it. Don’t think you’ll get everything you want; this is not an adversarial business transaction. Plan your strategy beforehand and during negotiations what you really want for price, closing date and contingencies; once you’ve agreed to terms in writing, it becomes difficult to change them. Don’t waive rights that are boilerplate in a contract such as an attorney approval period, home inspection or the sale of your current home, without speaking to an attorney. Keep emotions in check.

Real estate agents. Take the time to find a good one before you start the process to buy or sell a home. Ask friends, family and business associates for agent referrals. Listen carefully to what you hear about their agent experiences. The agent you retain should be a full-time, experienced (at least 3 years in the business) and produces a minimum sales volume for the market in the mid-range. Stay away from friends or family as your agent, I have seen too many agents who manipulate familiar relationships. Ask to see lists of closed buyer and sellers from the last 2 years.

Attorneys. You need one to purchase or sell a home despite the contrary. Search for an experienced legal advisor who specializes in residential real estate law. Your uncle or a friend of a friend who is a lawyer that has a focus in corporate law, might derail a transaction because they have a propensity to litigate and not negotiate.

Home Inspectors. Most states now require home inspectors to be certified or licensed which is good for consumers. Utilize a professional inspector that has been recommended to you by someone who has used them in the last six months. Avoid hiring an inspector your real estate agent uses, they might be a bit too cozy for your unbiased needs. Look for an inspector who looks at the big picture, every home, new or old, has some minor repair issues. You want to investigate the structural integrity and discover any material defects in a home. The best inspectors don’t give advice on negotiating the purchase price based on inspector results or solicit buyers for the work to repair inspection deficiencies.

Mortgage Loan Consultants. Don’t be lured by low teaser rates on mortgages, often their are hefty fees later to close the loan. Look for a major mortgage company that has competitive rates, responsive and organized loan consultants and require your consultant to attend the closing, I’ve seen more mortgage melt-downs at closing than I care to remember.

Mark Nash’s fourth real estate book, “1001 Tips for Buying and Selling a Home” (2005), and working as a real estate broker in Chicago are the foundation for his consumer-centric real estate perspective which has been featured on ABC-TV, CBS The Early Show, Bloomberg TV, CNN-TV, Chicago Sun Times & Tribune, Fidelity Investor’s Weekly, Dow Jones Market Watch, HGTVpro.com, MSNBC.com, The New York Times, Realty Times, Universal Press Syndicate and USA Today.