I’ve always been interested in property, having completed studies in interior design and have had a few lucky purchases when it comes to houses.

I picked up a bargain with my first house, an ex-local authority end terraced place that I purchased for an absolute snip. After the usual updates eg. new kitchen, bathroom and windows etc, I was able to sell it with a profit margin enough for a decent deposit on a beautiful Victorian property that needed a fair bit more work, albeit cosmetic.

I did become quite attached to this house but due to a nasty divorce, I found myself in the position of having to sell up again. I was sorry to put it on the market but got used to the idea and have been looking at my options.

The one that appeals to me most at the moment is buying an auction property. The house sale has gone through relatively smoothly and I have convinced my parents to let me move in with them. My father keeps stressing at the thought that I might get fleeced with an auction property but I believe I’ve done sufficient research, and that I can be restrained enough, to not go over budget or do anything silly.

I’ve been devouring property papers, I’ve even been to see what goes on at the auction and how to bid. I have to say, it’s very exciting. Watching the professionals bid on auction property is gripping stuff and totally absorbing. I see some of the houses sell for next to nothing and I’m sure I can grab a bargain of my own.

I’ve read enough to know that when I buy an auction property, I will need a 10% deposit on me on the day so I wait until the money comes through from my house and find the excitement is building. I’ve received my listing from the auction house and narrowed my choice down to three houses. I’ve made arrangements to view all of them this weekend and, at my father’s insistence, will be taking a builder with me, just in case there is anything wrong that I don’t pick up.

By the day of the auction I have one house that I have set my heart on. More like setting myself up for a fall, according to my father but he’s always scornful of everything he doesn’t understand.

The builder is concerned about a crack in the wall but it looks old to me so I’m not going to worry. He’s also making noises about something called ‘asbestos’ in the garage roof. Like I’d be concerned about the garage! Anyway, I’m hoping I’ll have enough cash to buy it outright so I don’t have to worry about a mortgage.

The auction gets under way and it takes about an hour to get round to the property I want. Bidding begins and I feel sick with anticipation, and sick with the thought of ‘what if I don’t get it’. I hold back to start to see how the bidding goes but I’m soon waving my hand in the air like I’m trying to guide a plan into landing.

It’s all over so quickly and within minutes, I am the proud owner of my first auction property. If only I had the money I could do this all day – it’s such a buzz! Money exchanges hands and I set off with my keys to show my father the house.

He, also, is concerned about the crack in the wall. To ease his concerns I’m getting in a structural engineer, just to make sure everything is above board and my investment is safe.

Oh dear, he says, scratching his head and sucking in his breath. Don’t you just hate it when they do that, it doesn’t mean anything! However, it turns out that due to a coal mine that used to be active in the area many years ago, the house has suffered some subsidence. It has been left derelict for some so nobody was bothered about it.

Looks like I’ll be staying with my parents for a little longer after all! While the workmen are underpinning the wall against the garage, they dislodge the makeshift roof and find this asbestos stuff. After downing tools, they tell me I have to get this stuff professionally disposed of before they will continue.

So, that’s just under 25,000 pounds for all the structural work before I even think about the cosmetics! I couldn’t get a mortgage on the property because of the structural problems so I’ve had to borrow it from my father. I can’t believe that my bargain auction property has become such a problem and now it looks like, once I’ve done all the hard work on it, I’ll have to sell it on again just to pay my father back.

Read more: http://www.articlesbase.com/real-estate-articles/lessons-learnt-when-buying-auction-property-342733.html#ixzz0peDlhdYC
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The cost of maintaining a real estate property is indeed treated an expense that must be spread over the asset’s useful life even if it depreciates. In real estate, when you shed a sum for maintenance, repairs, and other property necessities to be used to generate sales, you treat the item as an expense. Let’s put things in a much comprehensible example: let’s say you purchased a van to be used for your business. The van losses its value the very minute you drive it out of the dealership and the measure of the loss in value is known as depreciation expense. This happens on both vehicle and property investment. But in the case of an asset, when what you’re indebted cost more than the original value of the house, this only calls for one thing: a short sale.

Now how do you go about short sale investing? The following may answer this query in both an investor and a seller’s end:

Learn the trades of a short sale like the back of your hand. Or to put simply, you should learn the dealings from inside out. Short sale is the process by which a homeowner deals with a bank or a lending firm concerning a property on the brink of foreclosure. This usually happens when the property is no longer a marketable one and the homeowner out of negligence or incapacity to pay the mortgage owe more than the entire cost of the house. Therefore, to make it simple and comfortable on both end, it is a must that short sale is well elucidated and detailed for the benefit and understanding of both parties.

Short sales are not a speedy course of action. If you’re a homeowner who’s in the process of short selling, you have to realize that this isn’t a speedy process. This isn’t the same as a 30-day release of results. It takes more than that and certain things would probably dishearten you. So for the faint hearted, this isn’t the way to go. You have to deal with painstaking paperwork and formalities, red tape considerations, and a lot of other hindrances that may come along the way. So it pays that you brace yourself for the inevitable.

Consider your figures. You do not just invest on short sales without doing the math. This is of course on a buyer’s perspective. On average, if the property you’re rooting for has a value of no more than $150,000, aiming for at least $20,000 in the sale is already a sound number. However, if it goes the other way around, and basing on your calculation, you wouldn’t be netting $15,000 at least, then it’s not going to be worth it. Keep in mind, the property may require renovation and reconstruction cost that would perhaps cost you more, so you really have to weigh your options.

Finally, just take it easy. If you’re a homeowner, expect to meet stumbling blocks that will stand between the short sale procedures. If you’re the buyer, be emphatic. Understand that a homeowner is going through a difficult time. Make the homeowner comfortable in own your pace. When you’re able to do this, you’ll most likely end up getting the sale.

Read more: http://www.articlesbase.com/wealth-building-articles/short-sale-investing-guidelines-on-both-a-buyer-and-a-homeowners-perspective-1473343.html#ixzz0peFF6L4P
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Real estate investment is perhaps one of the most lucrative forms of investment today. But it is also equally risk bound especially when one is not well versed with the trends and nuances of the real estate market. So if you are contemplating on investing in real estate, it is best to avoid costly mistakes in real estate investment especially when you invest your hard earned money into it. Knowing the most common mistakes made by real estate investors helps one steer away from making such mistakes in the future and ensures good return on investment.

Here are the top ten mistakes made by real estate investors, according to bankrate.com. Bankrate has put together the top ten mistakes after speaking to established, full-time real estate investors and other professionals involved in real estate investment such as bankers. Read on to know them and avoid them.

1. Not planning up ahead. Lack of a proper plan is the biggest mistake made by novice investors. Finding a house after forming a proper investment strategy is the right way instead of looking for a house to fit the plan. Many make the mistake of buying a house because it seems to be a good deal and then trying to see how they can fit it into their plan. Instead of buying a house and thinking one can plan in due course, investors should rather concentrate on the numbers and try to make offers on multiple properties. This will ensure a good property that not only matches their investment model but also works out well with the numbers they had planned for.

2. To believe you can make money quickly. The second major mistake that real estate investors make is to think it is very easy to get rich in real estate. This is only a myth and the reality is that investing in real estate is a long term project.

3. Doing it single-handedly. For becoming a successful real estate investor one needs to build a team of professionals who would assist the investor in his deals. This would ideally include a real estate agent, an appraiser, a home inspector, a closing attorney and a lender.

4. Making excess payment. One another reason that investors in real estate goof up in their investment is by paying too much for the properties they buy. Paying too much and locking up all the funds in the erred property deal will leave you with no money to redeem yourself.

5. Leaving out the groundwork. Not doing your homework could be a costly mistake if you were a real estate investor. Every field of business needs sufficient amount of homework to be done, and real estate investment is no exception. Learn the fundamentals and then venture into investing in properties.

6. Throwing caution to the winds. Investors have to exercise a certain degree of caution and take earnest efforts while making a deal. New investors often fail in this regard and sign a deal without doing adequate research on the property.

7. Miscalculating money flow. Investors whose strategy is to buy, hold and rent out properties need to ensure sufficient cash flow for maintenance. Property managers could be expensive and the owner has to incur more expenses such as mortgage, taxes, insurance, advertising costs etc. Investors have to allocate their budget such that all these expenses are taken care of, or end up having their asset turn into a liability.

8. Lowering the volume. A larger volume of deals or transactions helps in increasing the profits by reducing the impacts of marginal deals.

9. Getting trapped in your own deal. Having more number of options at hand for the property you buy is a wise strategy. This helps one to be prepared for fluctuations in the real estate market. Plans to rent out the house could go awry when the rental market slumps. Having alternative plans helps you cut down losses and tackle unexpected situations.

10. Making incorrect estimates. People who plan to rehab their house need to check if they will still reap the benefits at double the time that they had estimated. This ensures they do not miscalculate and lose money on the deal.

Read more: http://www.articlesbase.com/real-estate-articles/avoid-top-10-mistakes-made-by-real-estate-investors-151870.html#ixzz0peFljr8N
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