Holešovice in Prague 7 is about 2.5 kilometres north-east of the historical city centre, in the curve of the Vltava River. The area is home to the Holešovice Exhibition Ground, T-Mobile Arena and the Sparta Praha Football Stadium. There is a mixture of buildings in Prague 7, including many old, architecturally beautiful buildings for which Prague is famous.

In the past year and a half there has been an increase in the number of old-style buildings restored to their former glory. The freak floods of 2002 brought damage to Holešovice but happily, since then, the government has invested in river flood defenses to levels higher than those reached by the floods of 2002. As a consequence of this the area of Holešovice is experiencing exciting growth in new residential and commercial development and regeneration in the area.

Completed in 2004 the Lighthouse Tower office block is a local landmark and has brought several high-profile tenants to the area. Along the river the Tower developer has received planning permission to redevelop the old Holešovice Port area into an up-market, mixed-use, marina development. The regeneration will bring a thousand up-market riverfront apartments (with an average price of around CZK69,956/sqm (£1,686/€ 2,259)) and new office blocks with various amenities such as shopping, leisure, dining and cafés.

It might be useful to compare Holešovice with Shoreditch in the London Borough of Hackney, some 3.7km to the north of the City of London and north-east of Charing Cross, although Holešovice is closer to Prague city centre at just 2.5km away. Since its decline following the second World War, Shoreditch has been transformed and has become a popular and fashionable part of London.

Like Shoreditch, Holešovice is now becoming the new business district of Prague and a funky place for Prague’s young and hip. Tremendous growth is spreading through the area, with a number of commercial and residential developments attempting to fill the supply gap following the damage suffered by Holešovice in the 2002 flood. The result is that the whole area is undergoing huge regeneration.

It should be pointed out that the flood was a one-in-150 year event and is unlikely to happen again given the protection now in place, such as the flood walls on the nearby river to protect against such an eventuality in the future.

Interested in investing in property in Prague? Look for Avenium Residence in Holesovice, Prague at http://www.internationalpropertypurchases.com

You may think that negotiating with banks in order to get them to give you a discount on their property is practically impossible! It is possible and real estate investment deals go through with the bank every day. Here’s why.

Why You can Get Discounts on Default Properties

Banks are rated in their ability to work out deals with homeowner in default. That means they are rated for how much cash they hold in reserve to cover each mortgage should it default and how well they work with the homeowner in order to keep a property from foreclosing. Some banks may hold as much as 8 times the default mortgage in cash reserve, which for a standard $100,000 mortgage is as much as $800,000. They are required by law to cover that mortgage in case it goes sour. The banks can’t use this money, invest this money and they certainly can’t use the property. It just sits there tied up for as long as that mortgage is in their books.

So a bank will accept a short sale on a property or a mortgage note purchase primarily because of the reserves they are required to set aside. They want that money freed up so they can invest that reserve money and make profits.

Your best deals come from the bank right before the end of their fiscal year or right before their auditing.

How eager the Banks are to get rid of Default Properties!

A particular real estate investor was interested in a small home in default. The investor began discussions with the bank that held the homeowner’s mortgage to see if they could negotiate a deal. He was holding out for a sale price of $37,500 on this property and he wanted to make the sale as a note purchase. The bank was being difficult. They didn’t want to sell the property that low and they wanted a short sale deal on this property. The deal didn’t work out all three parties went their separate ways.

About 6 months later the bank calls the real estate investor back up to see if he is still interested in buying the property. They were willing to let him have his previous price of $37,500 and let him have the property mortgage through a note purchase. In fact the bank needed to do a note purchase.

They had foreclosed on the homeowner during those 6 months, but neglected to show up at the sheriff’s sale. This naturally messed up their foreclosure.

The only way they could sell the property was by a note purchase. There may have been a lot of investors interested in this property, but because the investor had been holding out for a note purchase six months prior the bank remembered him and called him up to see if he was still interested in investing that property. Even better the investor saw what a pinch the bank was in and managed to negotiate an even lower sale price on the note purchase of $30,000.

Banks are not in the real estate business, they are in the money lending business. The only use foreclosure as a last resort to recover some of their money. This process takes a long time though and it’s messy. Banks are much more willing to sell the property, work with the homeowner or take discounted short sales and note purchase deals to recover their loan.

Isn’t it time you learned how to capitalize on one of the best markets for real estate investing? With the recent flood of foreclosures now is the time to learn to invest correctly in real estate from the hosts of the nation’s leading show on real estate investing, Judson and Lynn Voss. Visit http://www.yourrealestatefortunes.com and learn for free, the no-hype truth about choosing the right real estate investing strategy to start making you money, today.

You’ve probably heard a lot of people saying that the real estate market is a great way to make money and a great way to increase your returns. Well, they are right.

There are lots of opportunities in real estate for making profits, everything from flipping homes to buying defaulted mortgage notes and it’s all a consistent step-by-step process that’s simple to work once you know how.

The average bank savings account makes you up to 6% interest if you are in one of the very high paying accounts. The stock market deals in constantly fluctuating shares. IRAs can’t be cashed in for years and they’re meant for your retirement anyway. Real estate on the other hand, deals in property which is always there and mortgages which last for years. Plus, you can work deals with average returns of 14-25% in profits.

Cashing in on the pre-foreclosure market is an amazing way to make profits on your money, earn an income, or provide for your own retirement.

One Woman’s Gain in Real Estate

Donna Bauer was a stay at home mom. She made some money babysitting at a $1/hr per kid, but was really scrapping around for enough money to keep the family going about 20 years ago. She could have gone out and gotten a job, but was determined to remain a stay at home mom. So, she got into buying and selling real estate.

Three months later, she closed her first deal and earned over $5,000 and this was about twenty years ago. So you can imagine how much more $5,000 was worth back then. It was an amazing transition in her lifestyle.

To this day she’s making money in real estate and even teaching others how to do it for themselves.

You may feel that there are so many programs and real estate investors and real estate agents buying up the market that there isn’t any room left for you to get started. However, foreclosures and pre-foreclosures come up in the market every single day. This is a rotating market so there are always real estate deals for you to find and make a profit on!

Isn’t it time you learned how to capitalize on one of the best markets for real estate investing? With the recent flood of foreclosures now is the time to learn to invest correctly in real estate from the hosts of the nation’s leading show on real estate investing, Judson and Lynn Voss. Visit http://www.yourrealestatefortunes.com and learn for free, the no-hype truth about choosing the right real estate investing strategy to start making you money, today.

The other night I was flipping channels when I stumbled upon a special about elephants. A researcher had been following a group of elephants for the past 15 years and was documenting his findings. Though I am not by any means an avid elephant fan, I found the show very enjoyable.

One of the elephants that he had been researching had just passed away at the tender age of 62. He said that when an elephant dies all of the history and knowledge that the elephant had acquired over their lifetime dies with them. The thought when left alone seems rather elementary. However when I thought about it on a deeper level, it brought to mind how lucky we are to have written communication.

When the old elephant passed away all of his secret feeding spots, watering holes and travel paths went away with him. Sure, the younger elephants were able to learn from the older elephants as they grew up, but I am sure many elephant secrets have been lost over the years. As humans we are extremely lucky to have written communication. Written communication allows us to avoid making the same mistakes that our ancestors made. Written communication also give us the ability to avoid having to reinvent the wheel when we want to accomplish something new with our lives.

Having said that, it puzzles me to no end why people insist on “doing it their way” or worse yet not doing things at all because they “don’t know how”. With the endless amount of information available in the world there is no excuse not to be living the lives of our dreams. No matter who you are, where your from or what your current life circumstances are, there is someone who has overcame far more than you, and achieved much more than you, and they have written down exactly how they did it. They have left their secret paths for you to follow.

It does not matter how broke you are, even if your living on the streets you can go to the library and read about how other people have overcome situations similar to yours. Unlike the elephants successful humans leave there secrets behind for you to follow, you just need to follow them. Whether you are a newbie real estate investor or a seasoned veteran the best way to make improvements to your real estate investing life is to learn from others. Learn from people who have already been where you want to go, rather than trudging your own path through the thick vegetation of real estate investing.

Eric Medemar is a Real Estate Investor/Consultant from Grand Rapids, MI. Be sure to get your Free Guide: 6 simple steps to Real Estate Wholesaling success. You can also view Erics wholesaling real estate blog here. Eric is also a contributing member to The Real Estate Investing Forums at The Millionaire University.

Private money lenders are the only real option for anyone that wants to buy property with little or no money down. The late night infomercials make it sound easy, but they are in the business of selling books, videos, software, etc. They are not in the business of making loans.

With a conventional bank loan, you will be required to put down or up, depending on how you look at it, 20% of the purchase price, meaning they might be willing to finance 80%. But, what about repairs and closing costs? That money comes out of your pocket.

So, for example, if you have found a fixer upper that you can buy for $65,000, you will need $13,000 for the down payment. You will probably pay all of the closing costs. You will have to spend your own capital on repairs. You know that after the repairs are completed, you should be able to sell the home for at least $100,000, a nice profit, but in the meantime, a lot of your cash will be tied up. With a private money loan, the picture can look quite different.

We have looked at a number of private money lenders that specialize in rehab funding. The best one that we have found approves loans for up to 65% of the “after repair value”. Banks never consider what the value of the property will be after you have completed the repairs. They only look at the agreed upon sell price. In the example above, you were able to get the seller to agree to $65,000 and you know that after repairs you can sell it for $100,000. Since the private lender will finance 65% of the after repair value, you can finance 100% of the purchase price. But, what about the closing costs?

In order to get the closing costs financed, you need to subtract them from your initial offer. For example, let’s say the closing costs are $5000. You would initially offer the seller $60,000. An appraisal supports your conclusion that the after repair value will be $100,000. You can still get a private money loan for $65,000. You just have to get the seller to agree to use the extra $5000 to pay the closing costs. Often a really motivated seller will do just about anything to get out of his or her mortgage.

So, you got the loan, you paid the seller, the seller paid the closing costs and you spent none of your own capital. Congratulations, you bought a house with “no money down”.

The best private money lenders can also provide repair funds, allowing you to keep your cash “flowing”, so that you can keep looking for more great deals. You may want to consider this unique form of financing for your next rehab project.

James has been in real estate for over 30 years and is an expert on residential and commercial hard money loans. He is a regular contributer to Hard Money Loans, a comprehensive resource for those looking to secure funding for real estate projects.

The Spanish property market is not melting down, contrary to what you may have read. In fact the market for quality property is holding its ground, so forget that fantasy of bagging a nice villa for a song. But it is also a buyer’s market, which means bargains can be achieved, though if you want quality, you have to pay the price

The event that sparked the doom-laden headlines was a fall in the Spanish stock market on 24 May. Jittery investors dumped property company stocks, dragging down the Spanish index and other European stock markets for good measure (London fell 0.77%). The stock market has not recovered its confidence in Spain’s housing market, and most of Spain’s quoted property companies have lost 25% to 30% of their market capitalization since February.

But whilst the stock market hogs the headlines with bad news, what is actually going on in Spain’s housing market?

According to the Spanish government’s figures everything is hunky-dory. Average property prices rose by 7.2% over 12 months to the end of March, and a market that was boiling just a few years ago, with prices doubling in 5 years, continues to glide towards a soft landing.

But official figures aren’t the whole story, and are best taken with a large pinch of salt. Data from some other sources, and the confessions of costa estate agents, suggest stagnant or falling prices in many coastal areas popular with British buyers. Speculative investors have disappeared to riskier shores, buyers are fewer in number and more cautious, and a galloping construction boom has lead to a glut of certain types of properties in some areas. The big picture is of a struggling market.

But there is also some good news. Though some buyers have lost confidence in Spain, there still appears to be a huge reserve of buyers if the price is right.

To understand what is really going on you have to look at market segments in different regions.

COSTA DEL SOL

Buyer activity on the Western Costa del Sol peaked in 2003 and has been falling ever since. Corruption scandals, money laundering busts, and illegal building problems in Marbella damaged buyer confidence in the whole region, and a deteriorating price-value calculation encouraged potential buyers to look elsewhere. “Property prices are back to where they were 2 to 3 years ago,” explains Mark Clifton of the International Property Partners in Marbella.

But after several difficult years there are now some grounds for optimism. Malaga airport is being expanded, and a new rail link under construction along the coast should significantly improve access, and boost visitor numbers. Corruption is being tackled, demand is diversified, and vendors many now realize they have to accept offers. Attractive properties in the right areas and the best developments appear to selling quickly if the price is realistic, and inland there is an acute shortage of the kind of fincas that British buyers with money are after. “Buyers today are savvy people with money, who are well informed and know what they want, not the deranged investors with 100% mortgages who inflated the bubble a few years ago,” explains Barbara Wood, of The Property Finders.

It is now a better time than it has been for years to get quality property for a reasonable price that represents good value. But there is also still a glut of rubbish 2-bedroom flats in undesirable locations all along the coast. Steer well clear of these properties, as prices may well fall.

At the eastern end of the Costa del Sol, in Almeria province, they are building to many identikit apartments. Expect trouble in this segment, perhaps with exception of beach front apartments and other desirable locations in limited supply.

MURCIA

Murcia is an ambitious late comer to the property game. There has been an explosion in the region’s property supply, with 10 times as many properties now being built than 10 years ago, much of it on golf course developments intended for foreign buyers.

In recent years relatively high prices on the costas to the north and south drove property buyers, especially investors, into the arms of Murcia’s developers, with their easy-to-sell off-plan investments. But prices increased too far too fast, and resale prices on many projects have been dribbling down in search of demand for the last couple of years.

“Some developers don’t seem to build what British buyers want,” comments Gordon of Blue Med Properties. “When prices rise, buyers expect more in return, so there is now a glut of properties on new developments that don’t match buyer requirements at the price. That’s going to stop prices rising anytime soon.”

There are fewer British buyers around than in past years, though the ones that there are seem well informed, looking for value, and serious about buying if they can find it. Overall, the number of transactions are down, and given the amount of new property coming onto the market, expect prices to remain anaemic for some years. The few outstanding developments in the region, such as Hacienda del Alamo, which tick all the right boxes for British buyers, should benefit from buyers who like the region, and don’t mind paying for quality.

COSTA BLANCA

The south Costa Blanca, centred on Torrevieja, is a great example of how to turn a lovely coastline into something closely resembling a council estate. Inland, the property market is a minefield of illegal built projects. Big estate agents on this patch happily stuff their financially-challenged clients with outrageous commissions of 20% or more in return for paying for a 200 quid inspection trip (sangria included) If it’s not cheap, then it’s not good value, and if it is cheap, then it’s just cheap. This is a down market area with a bad cement habit, so don’t expect prices here to go anywhere, except perhaps down.

The North Costa Blanca, from Alicante up, is a different world, especially the upmarket area around Javea, Denia, and Moraira. The market on the coast is subdued but stable, and many vendors are no longer asking silly prices. “There are fewer transactions then before, but there is still substantial interest in quality properties in good locations that a core of affluent buyers want,” explains David Mear of VillaMia in Javea. Even so, there are also pockets of overdevelopment in this area, and prices for the had to sell stuff might need to come down by 10 to 20% to find a buyer.

Inland the market for detached properties with the right characteristics appears in fine fettle. “Detached properties with a bit of land and a pool, within 1 hour of the coast and the airport, and under 300,000 Euros are selling well. I can’t find enough of them for my clients,” says Andrew Lupton, head of Stacks Relocation in Spain.

COSTA BRAVA

Transaction prices on the Costa Brava, in particular the Baix Emporda part of the coast (Spain’s answer to Tuscany), have been rising gently in the last couple of years. There is a good stock of upmarket properties, the market hasn’t been flooded with new apartments, and demand is driven by both European and local buyers from affluent cities like Barcelona. Nevertheless, the market is cooler than it was, with more properties on the market than before. Buyers have more negotiating power as a consequence, and vendors will consider offers. “There are still some silly asking prices around, but the chances that someone will pay them are lower,” explains Louisa Grundon of local agents PCI.

Whilst Spanish demand holds up it’s difficult to see prices falling, though it is also hard to imagine prices growing as strongly as they have in recent years. There are two factors that could shake up the market. On the one hand, the TGV-fast train will soon connect Girona and Barcelona, which could give demand for property a boost, and further drive up prices. But on the other hand, if the Spanish economy turns down, local demand for second homes could dry up, pushing down prices.

MALLORCA

In the last decade Mallorca has consolidated its position as Spain’s top upmarket destination, and the first choice for A-list celebrities. Prices are high, but buyers are affluent, and there is a large stock of high-end properties, so it’s all relative. And in a rare display of enlightened thinking for urban planners in Spain, they even banned new development on the island from a couple of years, so there has been some restraint on the supply of new properties. As with the rest of Spain, the market has cooled down, and asking prices are more realistic. “Buyers are better informed, and vendors more disposed to negotiate if they want to sell,” explains David Novi, of Novi Properties Mallorca. “The overall number of transactions is down, but transaction prices are stable, foreign demand is steady, and it doesn’t look like prices will fall.” Mallorca benefits from diversified and affluent European demand, which reduces the risk of investing in property on the island. Menorca is stable, with low levels of new construction. Ibiza is a bit riskier, as there is a lot more property on the market, and its rave image is starting to get a bit tacky. On Formentera, owners can still ask what they want.

WINNERS & LOSERS

Recent headlines have rung the bell on Spain’s property boom, but in most areas popular with British buyers the boom ended several years ago. In place of the boom’s monoculture now we have a nuanced picture of regional market segments performing in different ways. As with all periods of change, there will be winners and losers.

The real losers are the short term speculators who over-extended to buy off-plan for short-term gain in the final years of the boom. The lucky ones are breaking even, the rest are losing some or all of their deposits. The overhang of distressed investors will soon be gone from the market.

Potential losers include anyone dumb enough to buy an obviously unattractive apartment in an overdeveloped area in the present market, or anyone ill-informed enough to pay a silly asking price.

Loses may be more widespread if Spain goes into a construction-lead recession in the next couple of years. Unfortunately, this is not out of the question, given the extent to which Spain’s economy depends upon the housing sector for job creation and economic growth. A recession would hit Spanish demand for holiday homes hard, and prices could fall across the board. But even in this worst case scenario, which is hard to imagine when Spain’s economy is growing so strongly, quality property that appeals to foreigners will suffer least, and market will recover in due course.

Winners include anyone who bought an attractive property in a good area 5 years ago or more. These properties should still sell in today’s market for a reasonable return.

And potential winners also include anyone prepared to make the effort to find good value in today’s market. The market for quality property has not collapsed, nor will it, so forget about getting quality on the cheap. Bargains are not about cheapness, they are about good value, and now that the boom is over, this is the best time in years to find a bargain in Spain. Over the long term, the right property in Spain should deliver reasonable financial returns, to add to a great quality of life.

This article was written by Mark Stucklin, author of the Spanish Property Doctor column in The Sunday Times, and head of Spanish Property Insight.

When it comes to investing in Canadian real estate properties, anytime is considered to be the best time to invest!

Today the Canadian real estate is so wide and high it gives you numerous opportunities for real estate investors across Canada. Sometimes it can be easier or difficult to discover the right properties, but there are always some properties that are neglected or in poor condition which you can choose. These properties simply wait for the motivated buyers! Properties like this make a great buy at any time no matter what the status of the market is.

Real estate investors who always make money are the one who makes it a practice of buying and holding. While it comes to the right time that money is tied up and it is true that a slow market or slow economy does cause any harm to the investors. All they need to do is, simply hold on to the properties and ultimately when the upside of the cycle comes back they can start selling the properties. In the meantime investors can continue to earn money by leasing or renting out properties.

The Buy and Hold investors are generally very patient and usually have lot of experience looking at the market than the short term investors. This shows that such Buy and Hold investors are much better at predicting the up and down cycles. Hence know when they can expect the ups and downs in the market and plan according to their actions. They are also much good at reading the signs and taking the right decisions when buying or selling. Being continuously active in the real estate market for a long time, shows that they have a good knowledge of what is available in the market, and keep things moving in and get things working!

The real estate markets in certain countries are quite sluggish, apart from few countries like Dubai, India and some places in China. But the Canadian real estate market is always good. For instance, the real estate properties in British Columbia took a big jump recently, where many commercial and industrial properties rose in value by 50 and 20 percent. The Okanagan and Alberta real estate sales have also increased significantly. The sales of properties in Alberta have touched $25 billion during the end of the year 2007. According to the Canadian Real Estate Association, in 2007, the property sales have touched to 19.6 percent.

For more information visit:
Lots for sale kelowna.
www.bigwhitepropertyforsale.com.

You may contact the author at bigwhitepropertyforsale@gmail.com

Investing in a single family home is a great place to start your real estate investment career.

The main reason is that if the transaction is handled properly, you can get in with very little down, thereby being able to take advantage of leverage.

But don’t count on this type of investment being too profitable in the beginning.  You can expect a fair rate of return, a tax shelter and a good chance for capital appreciation over the long term, but you might have to settle for a negative cash flow in the beginning.

So what are some of the guidelines for investing in a single-family house?

1. Take you time and don’t rush in.  If you see a house at what you think is an attractive price, you should still shop around the neighborhood and compare sales prices of similar houses.  You should also look at the sales prices of similar houses in other neighborhoods that are similar to the one you are looking at.  This is one approach to determine the value of a house used by real estate appraisers.
2. Think about the house that you want to invest in the same way you might if you were going to purchase it for your own home.  This is especially important if you plan to hold on to the property for the long term.  Consider the location of the house and the trend in the neighborhood.  Make sure the house is something a potential renter will find attractive.
3. Find out what the rents are for similar houses in similar neighborhoods.  This information will give you an idea of what you will probably be able to get for the one you have in mind.  Also find out if it is customary for the tenants or the landlord to pay utilities.
4. Determine the monthly payments.  This might sound stupid but the real point is to find out if the mortgage is a so-called budget mortgage or not.  In many cases, monthly payments are expressed as PITI (Principle, Interest, Taxes and Insurance).  If its not a PITI payment then you have to figure out what the additional expenses of the taxes and insurance will be.
5. If the down payment is relatively high, ask yourself whether you can pick it up by having the seller take back a second purchase-money mortgage.  Using a second mortgage may be advisable if you think there will be rapid capital appreciation in the neighborhood.
6. Are you prepared to manage the property yourself?  Or will you want a property manager to handle the month-to-month details?
7. Do not get personally involved with your tenants.  Personal involvement makes it difficult both to collect rents and to raise them when necessary.
8. Do as much maintenance as you possible yourself.  If not, you’ll need to determine the cost of routine repairs and maintenance into your cash flow.
9. Whatever you do, don’t forget about liability insurance.  Make sure you get yourself a good landlord insurance policy - you need to make sure you protect yourself from lawsuits.
10. Make sure you have enough cash flow to cover vacancies as well as marketing for tenants.  An empty investment property doesn’t bring in any income, yet the mortgage payments will still need to be made.

One of the first questions that comes up when people start talking about real estate investments is the tax advantages of being able to depreciate the property year after year. Most people question why you can depreciate an investment property, since real estate as a whole generally appreciates (goes up in value) over time.

The short answer is that when you own a piece of real property, whether as an investment or as a principle residence - you actually own two individual assets: the land, and any improvements (buildings). The land - goes up over time and generally carries the improvements with it. But since they are susceptible to wear and tear, maintenance, upkeep, etc. - the buildings will depreciate over time, and the government allows you to write this off on your taxes to reflect this.

So what exactly is depreciation?

In the strict sense of the word, it is a loss of value from any cause. Generally it is referred to as a percentage figure of the total initial value of the property (the value at the time of acquisition - most of the time this is the purchase price of the whole property, less the value of the land only). For example, you might say that a building is 20 percent depreciated.

On a real property, the loss of the value comes from three main causes - or a combination of the three:

• Physical Depreciation: This comes about from natural wear and tear on the building itself. Shingles need replacing, metal tends to rust, paint tends to crack, water damage can occur. etc. As these items wear, they will need to be replaced.
• Functional Obsolescence: This is an impairment of the desirability of the property. For instance, a house with only one bathroom isn’t as desirable in a neighborhood where everyone else has added a second bathroom or more. Or maybe the house is of a different style, or has an interior or exterior that is no longer in fashion. It can also occur due to changes in building processes - for instance if one house is still on a well or septic, while all the other houses in the area are on public water and sewer. All of these will reduce the over all value of the house and depreciation will reflect this.
• Economic Obsolescence: This is very similar to functional obsolescence, but is usually due to outside forces - and thus has nothing to do with the age or design of the home. An example of this is a change in zoning around your property that will make it less desirable for the use it is intended. You could have a home in like new condition that is immaculate in every way. But if the county just announced they are going to put a prison on one side of the property and a dump on the other, then your property will go down in value.

Depreciation is a way of accounting for the expected repair or replacement of an asset due to its reduced value for any of the above reasons.

So why can you depreciate an investment property but not a personal residence?

Well, when you buy a property for investment purposes, you are actually buying a business asset. The land and its improvements are to you - what a factory and an assembly line are to General Motors. Or what a brand new computer server is to Microsoft or Google. Or what an oil tanker is to Exxon. And just like those business assets, your property is going to depreciate in value.
Since depreciation of an asset (any asset) is a legitimate and real business expense (since all assets will eventually have to be repaired or replaced) the IRS allows you as the investor to deduct it from your taxes as a business expense - even though you never actually paid out any cash for that expense.

This is one of the biggest tax advantages of an investment property, especially during the first few years. Depending on the interest you’re paying on your mortgage, the depreciation method you choose, and the rent you’re collecting - it is usually possible to make money on the rental property, but not show any income from the property.

We’ll discuss all the tax implications of real estate investing at another time.

Ask anyone who considers the idea of flipping real estate, and most likely they have the notion that to flip real estate you need to do little more than purchase a house low, fix it up for little, and then sell it for a lot. I wish flipping homes was that simple.

How did they get this idea that flipping homes was such a cake walk? With the help of one of the numerous infomercials or television programs that make the idea of “flip that house” synonymous with quick cash, far too many people have spent a bundle on these get rich quick programs. Somehow the understanding that flipping homes needs to be approached like any other investment transaction - with care, patience, and guidance - gets lost in the shuffle, and in its stead is the idea that to flip this house - any house - there is precious little that needs to be understood past the rudimentary details.

Of course, if flipping houses were this simple, pretty much everyone would be engaged in the business. Clearly that’s not the case. Thee are plenty of people who start flipping properties, then get out quick because they realize that there isn’t any profit margin for them. The problem isn’t that flipping homes isn’t a lucrative thing to do. The real problem is that people go about it all wrong.

What they want is to flip properties without doing any real work. Too bad for them. They will begin to panic, thus flipping property before it is ready to fetch the top dollar. Another commonly made mistake when house flipping is the failure to understand how much the home is worth. Prior to learning how to flip a house, it is vital that you understand the intricacies of property evaluation, walk through determination, and return on investment potential.

Thus, many a property flipping venture begins - interestingly enough - not in a neighborhood looking for good deals on semi-dilapidated homes but instead in the City Clerk’s office where thoughts of real estate flipping are preceded by an education of taxable worth, last sale price on record, and also sales prices received on comparable properties that sold in the general neighborhood.>

In fact, let’s go that one better. If you want to make money flipping homes, then don’t even start in your local town, unless you happen to live in an area of affordable homes in a desirable neighborhood where you can find such homes. Ideally, you will search for flippable properties outside of your home town with help of a good team.

As you can see, real estate investing, flipping, and other associated ventures are not for the uninitiated! No matter how simple an infomercial makes the transaction to flip real estate sound, the amount of research this kind of undertaking demands is best learned with a seasoned real estate investor who knows how to flip - that house, apartment building, or commercial property - without going broke.

Not only will this individual alert you to potential pitfalls when you try to flip this house versus flipping homes zoned for both commercial and residential use, but she or he will also work hard at your side to help you understand that flipping houses is best done with assignable contracts, that flipping properties requires an ironclad bottom line, and that flipping property can easily turn into a negative cash flow situation if you do not have the budget strength to pull off the deal.

If you’re getting your advice on flipping real estate from an infomercial, then good luck to you! Flipping real estate isn’t hard, but it sure is a lot more involved than they let on. Their job isn’t to help you make money, but to make a boat load of money for themselves! Find a good mentor for flipping homes. Get someone who has been flipping real estate for some time. Then have him or her help you construct a team for flipping properties. That’s the way to win!

For real estate investing tips, fix and flip, commercial real esate investing, real estate investing or simply selling and buying homes, CRELounge is a creative real estate investing center. CRELounge offers real estate investing tips, resources, and hundreds of articles, as well as a multitude of real estate investing resources for free.