Author Archives: Shawn Molem

Top 10 Tips To Make Your Real Estate Investment More Profitable!

If you are a first-time real estate investor, there are lots of things for you to learn. Real estate investing is more complicated than investing in stocks because of the financial, legal, and extensive due diligence requirements involved. That’s why you are advised to give yourself a solid education before you purchase your first investment property. Here are top 10 tips to help you become your investment more profitable:

1. Set your budgets carefully. Purchasing an investment property requires a lot of study, planning, and budgeting to be certain that your investment will have a positive cash flow that is in your expectations. Especially you need to set your budgets carefully because it’s very important to get a satisfactory return on investment through either reselling the property, or through rental income. Evaluate the trends in the market as you are setting your budget, to make sure the purchase allows for expected occupancy levels or changes in value.

 

2. Choose a property that is more likely to increase in value is the most important decision you will make, so buying at the right price is absolutely critical. To evaluate your potential market, don’t only look at what homes are currently selling for, but study people’s reactions to those prices. You are advised to do your research and find out the right property at the right price for your investment.

 

3. Research your market carefully, look for the areas of town that are on the rise. Also, watch for markets near these areas which may be on the low end of the curve, and getting ready to start an upward trend again. As an investor, you need to find markets which are starting to move up the investment curve so that you can sell towards the top.

 

4. Buying real estate properties have its own unique needs and different market pressures. So do your research and understand your market closely for the reasons you are buying investment property. Whether you are buying vacation rental properties or homes to fix up and resell to families, you need to evaluate the expectations of the renters and buyers in your markets to make sure the property meets their needs.

 

5. You are advised to step away from your own area. Many times when your local market is having a downswing in real estate, other communities in neighboring states, or possibly in other countries are on an upswing and prime territory for real estate investment.

 

6. Estimate the total cost associated with buying your investment property, taking into consideration government costs, stamp duty, establishment fees and other financing costs. You may be familiar with closing costs, insurance fees, documentation costs for your area, but when you step outside of your hometown, you must research. Costs can increase greatly in different communities, especially when you venture across country lines.

 

7. It’s important to check your capital growth potential. Find out what direction is the real estate market moving in your targeted community. You will need to project the capital gains you expect to help determine the potential profitability of the property. Evaluate real estate projects which are underway, and how they might affect your purchase.

 

8. Explore your costs when selling a property in any new market. Capital gains taxes vary widely between countries, and sometimes even among different states. This is a critical piece of information in your profit potential.

 

9. Analyze your potential profit margin. For rental property use estimated occupancy levels, and rates to estimate your potential income over the time you will hold on to the property. Will it produce a positive income? Figure out the same for properties you plan to resell. Make an estimate the potential sales price after renovations, and then figure backward using your budget estimates, to determine an appropriate offer.

 

10. Plan your real estate investment for a long term. Many times property becomes the most profitable after you have held onto it for several years. Unless you are buying property for flipping, you are advised to make your plans for a longer duration.

 

The Bottom Line:

Thinking of buying your first investment property? Following these steps can help you evaluate properties in any location or market conditions, and keep your real estate investments profitable. For more information about real estate investing and its funding, Contact Magna Capital Group, Inc. today at (310) 734 4044 or email at info@magnaloans.com.

What Are The Advantages of Using a Property Management Company?

A property management company act as the owner, and overseas the entire operation of the asset in the broad context of the market.

Below mentioned are few advantages of using a property management company:

 

 

Higher Quality Tenants

Think of tenant screening as the moat and draw bridge around your castle. It is certainly possible to get a bad tenant out of your home once they are in, but it’s a real hassle and you are so much better off never accepting them in the first place. A thorough screening process results in reliable tenants that:

• Pay on time
• Rent longer
• Put less wear and tear on the unit
• Generally cause less problems

An experienced property management company has seen thousands of applications and knows how to quickly dig for the real facts about candidates and analyse that information for warning signs. By allowing a management company to handle the screening, you will also be shielding yourself from rental scams directed at owners, and discrimination lawsuits resulting from an inconsistent screening process. This kind of experience takes time, and insomuch as it means avoiding bad tenants, scams and lawsuits it is arguably one of the most significant benefits a property management company will provide.

 

Veteran landlords know it only takes one troublesome tenant to cause significant legal and financial headaches. A good property manager is armed with the knowledge of the latest landlord-tenant laws and will ensure that you are not leaving yourself vulnerable to a potential law suit. Each state and municipality have their own laws, these plus federal law cover a number of areas including but not limited to:

• Tenant screening
• Safety and property conditions of the property
• Evictions
• Inspections
• Lease addendums
• Terminating leases
• Handling security deposits
• Rent collection

Avoiding a single law suit can more than pay for the property management fees, and spare you time and anguish.

Shorter vacancy cycles

A property manager will help you perform three critical tasks that affect how long it takes to fill your vacancies:

• Improve and prepare the property for rent – A property manager will suggest and oversee cosmetic improvements that maximize revenue.
• Determine the best rent rate – Too high and you are stuck waiting, to low and you’re losing money every month the tenant is in the unit. Determining the optimal price requires knowledge of the local market, data on recently sold comparable, and access to rental rate tools.
• Effectively market your property – An experienced property management company has written hundreds of ads and understands what to say and where advertise in order to get a larger pool of candidates in a shorter period of time. Additionally because of their volume they can usually negotiate cheaper advertising rates both online and offline. Lastly, they are familiar with sales and know how to close when they field calls from prospects and take them on showings.

 

Better tenant retention

While its easy to see the effects of lost rent, there are other equally serious problems with a high tenant turnover rate. The turnover process involves a thorough cleaning, changing the locks, painting the walls and possibly new carpet or small repairs, not to mention all the effort associated with marketing, showing , screening and settling in a new tenant. This is a time-consuming and expensive process that can often be averted by keeping tenants happy and well cared for.

A good property management company will have a time-tested tenant retention policy that ensures happy tenants with lengthy stays in your properties. These kinds of programs require a consistent, systematic approach, which is where a good property management company will shine.

Tighter rent collection process

The way you handle rent collection and late payments can be the difference between success and failure as a landlord. Collecting rent on time every month is the only way to maintain consistent cash-flow, and your tenants need to understand this is not negotiable. By hiring a property manager, you put a buffer between yourself and the tenant, and allow them to be the bad guy who has to listen to excuses, chase down rent, and when necessary, evict the person living in your property.

If you let them, your tenants will walk all over you. They have to be trained to follow every part of the lease or deal with the consequences. Property managers have an advantage because tenants realize that they, unlike the owner, are only doing their job and are obligated to enforce the lease terms. Many property managers will tell you that it is considerably easier to manage other people’s units rather than their own for this reason.

 

Regarding evictions, there are strict laws concerning the eviction process, and doing it wrong, or trying to evict a “professional tenant” can be a fiasco. A good property management firm knows the law and has a good process for obtaining the best possible outcome given the circumstances. Never having to handle another eviction can be a compelling reason to consider hiring a property management company.

 

Magna Capital Group, IncAsset and Property Management services provide comprehensive management Services in  Southern California geared toward reducing expenses and increasing tenant retention for our clients. We have the cutting-edge technology, tools, property management expertise and market knowledge to provide superior management services. All our experienced professionals are client-focused and result-driven to meet all the expectations.

 

We have great referral fee program for referring parties .

 

 please feel free to contact us  today at (310) 734 4044 or email at info@magnacapitalgroup.net for further discussion.

The List Of Benefits of Acquiring A Hard Money Construction Loan

A hard money construction loan is a short-term loan secured by real estate. Borrowers use such loan for new construction or renovation of a property. Including 100% of the acquisition of the real estate parcel and repair costs, hard money lenders offer many other benefits to borrowers that banks cannot. 

Here are the key features of obtaining a hard money construction loan:

• 100% funding of vertical construction costs
• Accept approx all property types
• Up to 75% ACV (after constructed value)
• Land + new construction loan options available
• 6 to 24 months terms
• No penalty on  prepayments
• Interest rate between 8% to 14%
• Only 2% to 6% origination fee per transaction
• Transaction Size $500,000 to $50,000,000
• Maximum 10 business days to close
• Foreign nationals are welcome
• No minimum credit score required
• Only pay interest on funds received

The Bottom Line:

Hard money construction loans provide the ability to borrowers to obtain funding at a much faster rate than a bank loan. The loan flexibility and speed of hard money construction loans are significant advantages for a real estate investor. Especially when they are trying to complete construction or renovation works quickly in order to sell the property for profits. 

For more information on our loan programs or to inquire about a hard money construction loan, please feel free to contact Magna Capital Group, Inc. today at (310) 734 4044 or email at info@magnaloans.com. We provide construction loans for all types of commercial and residential properties at the most affordable interest rate.