Real Estate Investments and How to Make Them (Fourth Edition): The Only Guide You'll Ever Need to the Best Wealth-Building Opportunities

by Milt Tanzer

Overview

The definitive guide to maximizing earnings in one of the nation's most lucrative fields.

This revised and updated edition of the classic guide demonstrates how anyone can enter the world of real estate-even with little or no money to start. From finding and analyzing investment property through financing, buying, managing, and selling- when the time is right-real estate expert Milt Tanzer provides essential information, including:

- Where to find the best sources of investment capital
- How to locate the best property
- How even 100%-leveraged property can offer a good return
- How to negotiate the purchase and close the deal
- How to set up a simple and efficient recordkeeping system
- How to make the highest possible after-tax profit while owning property-and when selling it
- How to build investments into a substantial estate
- How to safely invest on a budget

Product Details

ISBN-13:	9781440624780
Publisher:	Penguin Publishing Group
Publication date:	05/01/2007
Sold by:	Penguin Group
Format:	eBook
Pages:	368
File size:	4 MB
Age Range:	18 Years

About the Author

Milt Tanzer is the President and Founder of Milt Tanzer Corporation, a real estate software and educational programs company, and the author of How to Buy or Sell Your Home without a Broker.

Table of Contents

What This Book Will Do for You     xi
Why You Should Invest in Real Estate     1
The Perils of "Fixed" Investments     2
The Tax Bite Uncle Sam Takes     3
How Inflation Eats Away at Your Retirement Dollars     4
The Ones Who Made It and How They Did It     6
Stocks as Investments     6
Why Real Estate Is a Good Investment     7
Appreciation: Making Inflation Work for You Instead of Against You     8
How Real Estate Stacks Up Against Other Investments     9
How to Safely Invest in Real Estate with no Money Down     13
Introduction: Tailor Your Investment Program to Your Personal Circumstances     13
You Don't Have to Start Out Big     14
How to Find a Motivated Seller     16
How to Negotiate with the Seller     20
Become a Bird Dog, Flipper or Jobber     24
Where to Find Sources of Start-Up Capital     27
Four Likely Sources of Investment Capital     28
Sources You May Have Overlooked     33
How to Buy Real Estate with Little or No Money Down     35
How Much Risk Are You Willing to Take?     41
To Manage or Not to Manage: The Question of Operating Your Investment Property     43
Three Factors to Consider When Deciding Whether to Manage Your Property     44
Types of Management Available to You     44
How Much Management Do You Want?     49
The Mom and Pop Operation     50
Guidelines for Choosing Real Estate Investments     53
Apartment Complexes: Popular, Easy-to-Understand Investments That Offer Unique Depreciation Benefits     54
Hotels and Motels: Hard to Manage but Potentially Profitable     55
Why Office Buildings Are Sound, Relatively Easy-to-Manage Investments     56
Shopping Centers: From Small to Mall     58
Investment Opportunities in Warehouses and Industrial Buildings     62
Mobile Home Parks: Profitable and Easy to Manage     63
Vacant Land and Acreage: An Investment for the Speculator     64
How Condo Conversions Can Bring Potentially High Returns in a Short Period of Time     65
How the Endowment Policy Can Be a Lucrative Way to Start Your Investment Program     69
What Forms of Real Estate Ownership are Available to You?     71
Partnership: One Way to Own a Larger Property Than You Alone Could Afford     71
Corporate Ownership: Two Major Drawbacks for the Investor     72
Syndication: The Real Estate Syndicate Does the Work     72
Land Trusts: High Appreciation Potential but No Income or Tax Benefits     73
Limited Partnerships: The Best Form of Group Ownership     73
Why Consider Group Investments?     76
How to Locate Your Investment Property     77
How a Real Estate Investment Counselor Can Help You     77
Doing It on Your Own     78
Ways to Locate Problem Properties     79
Try the Direct Approach to Locating a Property     81
Give Yourself a Choice     81
Why Not Wait for Lower Interest Rates?     82
How Important Is Location?     82
How Far Away Should Your Investment Property Be?     85
Property Details to Check     86
A Step-by-Step Guide to Preparing a Financial Analysis of Your Property     91
Obtaining the Complete Information     91
How to Prepare the Property Analysis Form     95
Example of Property Analysis Taking Potential Financing and Reduced Cash Required into Account     104
Using Your Analysis to Make Sound Investment Decisions     107
Financing Techniques That Offer You Countless Ways to Buy Real Estate     109
How Does a Mortgage Work?     110
How Financing, or Leverage, Can Alter Your Investment     111
Determining How Much Leverage You Should Have     112
Sources of Mortgage Funds     114
Mortgage Clauses That Affect You     115
How Creative Financing Techniques Can Make a Poor Investment Profitable     117
How to Figure Your Tax Consequences and Tax Shelter Benefits     141
How to Take the Maximum Allowable Amount of Depreciation     142
A Sample Depreciation Schedule for the Always Full Apartments     149
Using the Depreciation Tables     151
Recapture     151
The Time Value of Money and How It Works in Your favor     153
How to Negotiate the Purchase     155
Don't Hit the Panic Button     155
Know the Market     159
Never Make a Verbal Offer     160
How Much Should You Offer?     161
Time Limit for Acceptance     162
Contract Clauses That Protect You     162
"A New First Mortgage" Clause     164
What to Do when Assuming Existing Mortgages     165
The Counter Offer     173
Removing Contingencies: A Checklist     174
How Much Cash Do You Need to Close?     178
What to Do at the Closing and After     183
Facts You Should Know Before Closing     183
What the Seller Turns Over to You: A Checklist     184
Be Prepared for Murphy's Law     185
The Closing Statement     187
What to Do After the Closing     190
How to Set Up a Simple and Efficient Record-Keeping System     193
How to Set Up Your Books     193
How to Set Up Your Bank Accounts     197
How to Compute Your End-of-Year Tax Return     198
How Much Did Your Investment Earn?     200
What You Should Know About Leasing and Leases     205
Whom Does a Lease Protect?     205
How to Establish Your Rental Standards     206
Furnished vs. Unfurnished Apartments     208
Repairs and Maintenance: Keeping Your Property in Top Condition     208
The Lease Term     209
How to Handle Security Deposits     209
Advance Rents     210
Protecting Your Investment     210
Guidelines for Preparing a Lease to Suit Your Property and Your Needs     211
Lease Expiration Dates     211
Caution: Don't Become Too Friendly     214
Avoid Renewal Options     215
Types of Leases and How They Work     215
How to Locate and Qualify Prospective Tenants     217
Showing the Apartment      219
What to Do if You Are Faced with Continual Vacancies     220
Keep Abreast of the Market     221
When You Should Sell and Why     223
Five Compelling Reasons for Selling Your Property     224
How a Larger Property Can Offer You Depreciation Benefits and a Higher Return     231
Refinancing for Tax-Free Cash     234
How to Sell Your Property     237
Establishing the Selling Price     238
How to Find a Buyer for Your Property     240
Should You Carry a Mortgage?     244
How to Figure the Adjusted Cost Basis in Your Property     244
Tax Breaks You Can Get When You Sell     246
Your Legal Rights as Second Mortgage Holder     246
How Exchanging Enables You to Defer Tax Payment     247
Rules of Thumb: Facts, Myths and Guidelines for Establishing the Value of Investment Property     255
The Price-Per-Unit Rule     255
The Gross Multiplier     256
Net Operating Income Multiplier     257
Capitalization (Cap) Rate     258
Apartment Square Footage     260
Location: Is It Really Crucial?     260
Largest Number of Units     261
Percentage of Operating Expenses      261
IRR, or Internal Rate of Return     262
A "Poor" Investment May Be Good     263
Mortgage Calculators     264
Appraisal Methods: The Income, Market Data and Cost Approaches to Value     264
How Liquid Is a Real Estate Investment?     267
Buyer's Market vs. Seller's Market     268
How a Professional can Benefit by Leasing Space to Himself     271
A Tax Shelter Second to None     271
Buy More Than You Need     273
Cautions to Consider     274
Still Another Benefit: You Can Reduce Your Corporate Tax Liability     274
How to Pyramid Your Investments     277
The Premise Behind Pyramiding     278
How Pyramiding Works in Practice     280
The Profitable Results of Pyramiding     281
A 19-Point Master Checklist for Getting Started in Real Estate Investing     285
Questions and Answers About Real Estate Investing     299
Appendices
Comparative Depreciation Tables     309
Mortgage Amortization Tables     310
Glossary of Real Estate Terms     321
Index     329
How to Use the CD     343