Jon will be speaking the state of the real estate investment market at the Real Estate Investment Club of Los Angeles on February 20th, 2010 at 10:00 AM. For more information, visit http://www.realestateclubla.com/.
Speaking at Real Estate Investment Club of LA
January 19th, 2010Three Reasons to Invest in Real Estate
January 19th, 2010Lately I’ve been asked if now is a good time to invest, and my answer is always the same – YES! Now you might be saying to yourself that this sounds like optimistic broker speak, but it’s not. The reality is that we’re in the midst of a perfect storm and there are 3 great reasons that both you should be investing in income property right now. Click here to learn more about investing in real estate.
- Cheap Debt – interest rates are still at historic lows and you can get a 30 year fixed, non-owner occupied investment loan on a 3-4 unit property in the 6.0% range. That is fantastically cheap money.
- Low Prices – prices in most areas have fallen back to 2001 and below levels making this a great time to buy. You know the old adage, ‘buy low…sell high’.
- Inflation – with our federal deficit growing and over $1.2 trillion of new money recently printed, most experts agree we’re about to go into a period of significant inflation. And while this isn’t great as a consumer, as a property owner you like it for two reasons: first, you’re repaying your debt with deflated dollars and second, your rental income will increase meaning your passive income will increase as well.
For many new investors the largest impediment to success is fear and an inability to get financing. The first obstacle can be overcome through education and by working with a knowledgeable real estate professional. That is where the information on this site comes in. The second can be addressed by speaking with your mortgage broker and making sure you qualify for today’s cheap debt.
So act now. Today’s low prices and great financing, coupled with tomorrow’s inflation, will be the foundation of your future wealth.
The Value of Property Management
October 6th, 2009By Jon Swire
In this “Vlog” I explain the value of becoming a property investor not a land lord. I also discuss the benefits of hiring a 3rd party manager that is best suited to handle your assets, in addition to furthering your knowledge about the area. My goal is to teach you to bridge the gap between being an investor not a land lord, allowing you up to gain optimal profits from you properties instead of dealing with tenants and trash.
If you want to learn more, please watch my free online webinar titled “Investors vs. Landlords”
Investing In A Down Market
August 18th, 2009By Jon Swire
In this edition of my video blog I discuss the current state of the market and the 3 reasons why now is a great time to invest in real estate. Not only is debt historically cheap but prices have fallen down to 2001 and below levels in many areas. And you remember the old adage, ‘buy low and sell high’. Finally, we’re predicted to go into a period of high inflation making it a great time to be a real estate owner. You’ll repay that cheap debt with deflated dollars while your rental income rises due to inflation.
So stop thinking about investing and get in the game. Take the first step towards creating the foundation of your future wealth.
Educational Webinar: Understanding CAP Rates
June 26th, 2009By Jon Swire
If you are interested in real estate investment, but need some help in learning some of the intricacies of the investment process, then visit There’s No Free Lunch in Real Estate News & Events page to access a wide range of tools, information, and resources. These webinars are helpful learning tools to start you on a path toward financial freedom!
My most recent webinar is focused on helping you Understand CAP Rates, and how to accurately calculate the most important metric in income property investing. I’ll show you how to avoid common pitfalls and make sure the deal you’re considering makes sense. My goal is to guide your choices for potential investments and ensure you earn the greatest return on your investments.
You can gain access to this webinar by simply clicking here.
I look forward to helping you develop your real estate profile and turning today’s market into your future wealth!
Jon Swire
There’s No Free Lunch in Real Estate
Working with Real Estate Agents – What to Expect?
May 11th, 2009By Jon Swire
Are you ready to invest in income property but not sure what level of service to expect from your real estate agent?
Investing in income property can be a stressful experience, but remember, your real estate agent is there to help you every step of the way. As a Buyer, your agent will be compensated by the Seller at the close of escrow. What this means is that while she works for you, she’ll be paid by the Seller for her services. Fees typically average 2-2.5% of the purchase price, so on a $500,000 purchase, your agent will earn between $10,000-$12,500. Some of this money will go to her brokerage firm and to cover costs, but remember that your agent is being well paid for her job. So take advantage of her services to the fullest to ensure the smoothest and most enjoyable experience.
So, what should you expect from your agent? First, once your agent has your search parameters, she will set you up to receive daily updates from your local MLS or other services. This will allow you to see all the new listings that come on the market in your price and criteria range. Most clients like to drive properties on their own, and only bring their agent with them once they’ve identified a property they’re interested in. However, don’t be afraid to ask your agent to spend more time with you at first to help you figure out what works and doesn’t work for you. And, if you’re unsure of the exact geographic location you’d like to settle in, ask your agent to drive you around to show you more about the local neighborhoods, schools, and amenities. This is a great way for you to familiarize yourself with the area and available options.
Once you’ve found a property, your agent will be the one preparing the contracts and negotiating them on your behalf. Ask her to explain everything to you and make sure you understand what you’re signing. She’ll also walk you through the property inspection and all disclosures you’ll have to sign as well as help you with the loan process. If you don’t already have a mortgage broker, ask your agent for a couple of referrals she’s successfully worked with in the past.
Buying an income property can be a long process, taking 45-60 days or more, depending on how quickly your search goes. Once you’ve found the property, be prepared for an intensive 2-3 week process while you do your property inspection and work with your lender. If at any point during the process you feel uncomfortable, take a step back. Remember, making an investment can be challenging, but it should also be fun and as exciting as you’re on your way to securing your financial future.
Please visit http://theresnofreelunchinrealestate.com/ for more information, tips, and services.
Finding a Real Estate Agent
May 11th, 2009By Jon Swire
Are you ready to make your first income property purchase and not sure how to find an agent or what to expect? If so, you’ll want to read my tips on choosing the right agent for you!
If you’ve been thinking about investing in real estate, now is a great time. Interest rates are at historic lows, and prices around the country have fallen to 2002 levels in many places. The questions is how do you find a Real Estate agent, and what should you expect?
First, a great place to find an agent is through referrals. Either from friends, colleagues or other professionals, someone who has worked with the person in the past and can vouch for their integrity and responsiveness. After all, this person will be representing you in one of the biggest investments of your life, so you’ll want to make sure they are trustworthy and put your interests first. Another great option is to visit local Open Houses in your area, and speak with the agents working them. This will give you a feel of how busy they are based on the number of homes they have listed for sale, and it will also give you a chance to speak with the agent in an informal setting to find out how knowledgeable and personable they are.
Once you’ve identified a potential candidate, you’ll want to interview them either in person or on the phone. Ask them how long they’ve been in the business, what type of product they specialize in – SFR’s or income property – what areas they work and for the names of 2-3 satisfied clients you can speak with. And remember, first impressions go along way. Make sure they are on time and have strong follow up. After all, if they can’t get it right with you, how well will they do representing you to another agent?
Once you’ve selected an agent, you’ll want to give him clear parameters of what you’re looking for. Is this your first investment? How much do you have to invest? How far from your home are you willing to consider? And of course, what is a comfortable price range for you?
And remember, Real Estate is like most other service businesses, where the old adage holds true….”20% of the agents do 80% of the business”. So spend time before get you started finding the right agent for you.
Please visit http://theresnofreelunchinrealestate.com/ for more information, tips, and services.
The Next Step to Develop Your Real Estate Portfolio
May 5th, 2009By Jon Swire
In this edition of my video blog I discuss how you can go from making $55,000 per year to being a multi-millionaire through real estate investing and the tools required. After all, for many of my clients, students and investors the hardest thing for them is changing their mindset and allowing themselves to believe that they can one day retire a millionaire. Revisit the information I shared with you in the Free Video and Chapter 1 of my book, the 30 year plan, which starts with a small investment today and generates over $100K per year in income by the time you retire. The key to being successful is getting started, developing a plan and being consistent.
Consistency over time will yield great results. So put a plan in place and set some goals for the next 1, 3 and 6 month periods to get started on your path to financial freedom.
1031 Exchanges & Cash–Out Refis: How to Explode Your Wealth
April 30th, 2009By Jon Swire
Have you started investing in real estate and aren’t sure how to take the next step to grow your portfolio? If so, you’re going to want to read my tips on how to use 1031 Exchanges and Cash-Out Refis to Explode Your Wealth.
Now that you’ve taken the first step and started investing in real estate, the next step is to learn the basics of 1031 Exchanges and Cash-Out Refinances so you can use these tools to explode your wealth. By using each of these where appropriate, you’ll be able to grow your real estate portfolio and passive income stream, without paying any taxes. The key is to take advantage of each in the right situation.
Cash-Out Refis are used when you own a property that has appreciated in value, and therefore so has your equity. Under current tax guidelines you’re allowed to do a cash out refi and do whatever you’d like with the proceeds, tax free. So, you can take the money and use it to purchase another property, thereby increasing the size of your portfolio and your passive income stream. You’ll go from owning 1 property to 2, and having two income streams instead of one.
Like Cash Out Refis, you’re going to consider doing a 1031 Exchange once your property has appreciated in value and your equity has increased. 1031 Exchanges allow you to sell a property and defer taxes until sometime in the future. You can then use those funds that would have gone towards taxes to purchase another larger property that generates an even larger cash flow stream than the one you sold. You can do this over and over throughout your investing career, and I have clients who have been doing this for 30 years or more. Remember, there are time constraints placed on 1031 Exchanges that you must meet, and you should discuss these with your accountant and real estate professional.
Cash-Out Refis are best used in situations where the property you own is one you’d like to keep. Maybe it’s in a good location, has a solid tenant base, or has excellent prospects for future appreciation. 1031 Exchange’s on the other hand, are best used when you’re ready to sell a property and move on. This typically occurs for any number of reasons: you’ve exhausted your depreciation, the building is older and has higher maintenance costs, the area is declining or the tenant base is troublesome, meaning it’s difficult to collect the rent on time each month.
Make sure you analyze your real estate holdings at least once per year to figure out if its time to do a Cash Out Refi or 1031 Exchange. The key to exploding your wealth and climbing the Property Ladder is to keep your equity moving and continually increasing your real estate holdings and the size of your passive income stream. Remember; before you make any financial moves you should always consult your Accountant or Tax Professional to fully understand the implications of what you’re planning.