There is no such thing as a “sure thing” in any type of investment. Real estate investing is certainly no exception, and therefore, real estate investors must never assume that the investment they make in rental property does not carry some level of risk.

The market constantly fluctuates, for instance, and those not up to date with market conditions when they invest their money on any properties run the risk of increased vacancies, declining rents, and sluggish or falling property value.

Here are three ideas worth considering if you are about to start investing in real estate.

1. Work with a reputable real estate agent who understands investment property. An experienced agent who can run the numbers can help you obtain more profitable properties and can provide useful information and strategies on how to profit even though there are fluctuations. The key to succeeding in real estate is making sound investment choices, and in this case, a knowledgeable real estate agent who is up to date on the local and national real estate market, as well as crunch the numbers, can be a real benefit worth enlisting.

2. If you are informed about the market and think you have found a sound investment option, make sure you analyze the property thoroughly. Know what the cash flow and rate of returns are so you have a decent idea of what you are going to make on the property before you write an offer to purchase it.

3. Be prepared and able to handle any changes that might and likely will occur in the real estate market. Many of the changes that happen in the market are caused by an increase in interest rates, tax rates, supply and demand, the local unemployment rate, and rise or fall in property value. Calculate your cost to invest in a worst-case scenario and have a readily available solution for any problems that may occur. You need to be thinking about selling the property even before you purchase it.

The bottom line to real estate investing is not to rely on guesswork. Successful real estate investors consider the market, make the calculations for property performance, and have a strategy ready to employ in the event things change.

by Charrissa Cawley

If you have ever thought about investing in real estate, now is the time. You may be thinking that since the real estate market is in the tank at the moment and that it can’t possibly be a good time to get into this market. But you couldn’t be more wrong!

There are more foreclosures than ever right now and that presents a ton of opportunity for us investors who have been waiting for prices like what we are now seeing. I know the media is out there saying the sky is falling. However, there are many successful investors quietly sitting back and laughing as they make money hand over fist. Let me let you in on a little secret that all successful investors know…The time to buy is now!

It’s the perfect time to get involved right now as a real estate investor. Lenders are currently finding themselves in situations where they have loans that are not getting paid, and home owners are being forced into foreclosure everywhere you turn. There are banks all over the place with so much inventory, they don’t know what to do with it. They simply cannot move it quickly enough. There are also thousands of incredibly motivated sellers just waiting for someone to come along and save them from foreclosure. That ’someone’, could be you.

There are a few things that you should keep in mind before getting started:

1) Never pay too much for your investment property. There are plenty of homes available for very reasonable prices. You make your money when you buy! You should never pay more than 65% of the after repaired value of the home. Don’t forget that you will have other costs to pay, such as holding costs, closing costs, as well as any money that you spend on the rehab of the home to bring it up to rentable or saleable condition. Bottom line, you need to be able to still turn a profit.

2) Use none or as little of your own money as possible when you purchase an investment property, if at all possible. If you are using your own money, you will be limiting your own cash flow. You can borrow money from a conventional lender and put as little down as possible, or you can also get a hard money loan for the cost of the property and the rehab costs.

3) Don’t do your own renovations. You have probably seen them on TV shows, those house flipping pros doing their own rehab work. However, you won’t be able to do more than one flip at a time if you’re doing your own work. You need a solid power team, including reputable skilled contractors who will fulfill this end of things.

4) To get great deals, buy from motivated sellers. Banks are quite motivated these days, being that they have so much inventory right now due to all the foreclosures. There is also a system to find motivated sellers out there called the Four D’s. Look for them. They are: Death, Divorce, Disaster, Disease. All of these reasons will produce motivated sellers and you will be helping these folks out who have been hit by these types of life events, by purchasing their home before they go into foreclosure.

5) He who mentions dollar amounts first loses. It’s a known fact. The first rule of negotiation is to wait for the other person to name a price. List all of the items on the rehab punch list during the counteroffer phase, as negotiating power.

6) Finally, The best thing that you can do for your own success in real estate is follow and focus on a tried and true system for investing in real estate. Find something that resonates with you, stick to it, focus on it and take action-that’s where most folks fall short. Just do it! Stick to a tried and true system and you will be making money in no time at all.

About the Author

Charrissa Cawley offers accurate and proven real estate strategies and motivational coaching to investors of all different levels. Cawley offers accurate and proven real estate strategies to investors of all different levels. For more Information, visit http://www.REIconferences.com/freecourse.htm or visit Charrissa’s Inner Circle Community at http://www.RewexClub.com

The Proforma Income Statement is very useful for real estate investors that want to evaluate the future performance of an investment property.

Unlike most other analysis reports, a Proforma Income Statement virtually projects an investment property’s income and expenses (typically out ten years). This provides the investor with an idea of such things as future cash flow, tax benefit (or loss), and sales proceeds in the event of a future sale.

The Proforma does have a caveat that should be understood, however. A proforma is a “projection” that applies speculated numbers, and therefore should be used cautiously. It is recommended to include conservative rather then overly aggressive numbers, and investor’s are cautioned not to make buying or selling decisions on the results of a Proforma alone.

Moreover, given this speculative nature of a Proforma Income Statement, it is better to opt for a ten-year proforma rather then a fifteen or twenty-year income statement.

Okay, now bear in mind what you want to accomplish with the Proforma. You want to analyze the cash flow and other performance measures resulting from changes to such variables as income, operating expenses, and property value over a ten-year period. In other words, given the assumption that rents, expenses, and value are going to increase over future years, you want to see the outcome.

ProAPOD Real Estate Investment Software does create a Proforma Income Statement for this real estate investing purpose. You can see a sample at www.proapod.com. Just follow Reports.