Article by Simon Volkov
Today, real estate investments are creating concern for many people. Nearly everyone is contemplating whether to buy, sell, trade or avoid investing in properties. Through all the gloom and doom exceptional real estate deals can still be found. In fact, buying properties today can potentially yield exceptional profits in the future.
Some real estate investments can be traded for like-kind property. This type of transaction is known as a 1031 exchange. Investors must hire a Qualified Intermediary (QI) and adhere to guidelines set forth in Section 1031 of the Internal Revenue Service code.
Real estate is not the only type of property that can be exchanged. Most properties used as an investment can be traded using 1031 including equipment, airplanes and boats. The exchange of personal residences and vacation homes is prohibited. However, if the real estate is leased on a regular basis, houses can be traded for other rental properties.
Purchasing distressed properties is becoming a popular investment technique. These can include foreclosure, bank owned, short sale and probate real estate. Distressed properties generally require some level of repair, so investors should be prepared to engage in physical labor or hire contractors to perform necessary work.
Foreclosure properties are sold at discounted rates through public auction. If the property does not sell at auction it is returned to the bank. Once the bank takes possession of the home, the lender is responsible for maintaining the property until it sells.
Oftentimes referred to as bank owned or real estate owned (REO) homes, these houses are sold directly through the mortgage lender. Most banks have an in-house loss mitigation department which handles the sale, while others enlist the assistance of local realtors.
Buying bank owned homes is generally more involved than buying foreclosure homes. Since banks are incurring a loss on the property the loss mitigator?s job is to obtain as much money as possible. Investors should be prepared to engage in multiple counter-offers when purchasing REO properties.
Probate properties are a lesser known real estate investment that can potentially yield a high return on investment. When a person dies their estate must pass through probate. Probate is the legal process used to validate a decedent?s last will and testament and ensure distribution to heirs is made in accordance with probate law.
Probate generally takes several months to settle. During this time the estate is responsible for any costs associated with the real estate including mortgage payments, property taxes, insurance and maintenance. Oftentimes, estates do not possess the financial means to pay expenses and can elect to sell the property during the probate process.
Most estate executors do not realize they can sell real estate during probate. Offering to purchase their property can significantly ease financial burdens and assist in expediting the probate process. If multiple heirs are entitled to the house, they must be in agreement to sell unless a judge orders them to do so.
Although the economy is still unpredictable, real estate investments have always been one of the most stable opportunities for wealth-building. Individuals who take time to become educated about the various types of real estate and financing techniques can reduce risks and reap rewards.
About the Author
Simon Volkov is a successful California investor who specializes in buying, selling and trading real estate investments throughout Orange County, California, Nevada, Arizona and Washington. He offers a list of investment opportunities and an extensive investing article library at www.SimonVolkov.com.
Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author?s information and copyright must be included.
Simon Volkov is a successful California investor who specializes in buying, selling and trading real estate investments throughout Orange County, California, Nevada, Arizona and Washington. He offers a list of investment opportunities and an extensive investing article library at www.SimonVolkov.com.
Use and distribution of this article is subject to our Publisher Guidelines
whereby the original author?s information and copyright must be included.
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