Posts Tagged ‘investing in real estate’

Speaking at Real Estate Investment Club of LA

Tuesday, January 19th, 2010

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/.

Three Reasons to Invest in Real Estate

Tuesday, January 19th, 2010

Lately 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.

  1. 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.
  2. 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’.
  3. 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.

Investing In A Down Market

Tuesday, August 18th, 2009

By 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.

Finding a Real Estate Agent

Monday, May 11th, 2009

By 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.

1031 Exchanges & Cash–Out Refis: How to Explode Your Wealth

Thursday, April 30th, 2009

By 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.

The Property Ladder – How to Build Your Real Estate Portfolio

Tuesday, April 21st, 2009

By Jon Swire,

Have you started investing in real estate and aren’t sure how to climb the Property Ladder or even what it is? Then continue reading for important information on how you can build a real estate portfolio that can generate enough money for you to retire on.

The Property Ladder, as it’s called by many experts, is the path investors take as they trade up from Single Family Homes to Duplexes and onto Multi-Family investments. It’s dubbed the Property Ladder because each ‘rung’ in the ladder is smaller than the next. The goal is to build a portfolio that will one day generate enough passive income for you to pay for your kid’s college tuition and fund your retirement and lifestyle. If you’re diligent and patient, you can turn a $30,000 investment into $2MM or more over 30 years.

For most investors, their first purchase is usually a Single Family Home, or SFR. This is a purely speculative investment and the hope is it will appreciate in value. Once it does, you sell the property and use the equity gain to purchase a 2-4 property, also known as a Duplex, Triplex or Fourplex. These properties will generate more cash flow than an SFR and are usually the second step up the Property Ladder.

The ultimate goal is to sell their 2-4 units properties once they’ve appreciated in value and trade up to a multi-family property consisting of 5 units or more. This is called a 1031 Exchange and allows the investor to defer paying taxes on the gain until sometime in the future.

The key to the Property Ladder and growing your passive income stream is to keep your equity working. I suggest to all my clients that they sit down with their real estate professional at least once a year and evaluate their real estate portfolio. Once your property has appreciated enough, you should consider selling it and replacing it with a larger property generating more cash flow. Remember, be patient and consistent, and over time you’ll find that you’ve built a small real estate empire and successfully climbed your own Property Ladder!

For more information, tips, and services visit http://www.theresnofreelunchinrealestate.com/