As someone who works in the field of property developers and property investment in particular, very rarely do I bring up hints or leaks about the real estate business. Now it's time. It's time to share it with many colleagues. As it turns out the books published about the real estate business is still small. More tabloid that explores the model, type and properties accessories.
There are at least three reasons that you can not refuse to enter the real estate business.
No reason. 1. Definitely lucky!
Have you ever imagined the most profitable business? In terms of the theory of financial management are HIGH RISK HIGH GAIN. But in the real estate business, uncontrolled NO RISK, HIGH GAIN. There are several instruments that determine it.
Land prices would rise
In this world there are no prices are down except matters relating to macro-economic conditions. But we can be sure 99% of that land prices would rise. Taxes have risen almost every year. By rough count, if you buy and hold land for sale 1 year ahead. Definitely lucky! It was a great property business.
Business properties require simple management. In the developer, for example, enough finance and legal sections. This two-part basic and vital for developers. Lha planning, marketing and construction? Should not be required. Should not exist. Because we can proceed to the construction contractor. Marketing can we entrust the Marketing Agent. Planning can we invite consultants. The result is a fuller, more defined, costs are variable. The more simple the existing management, will further benefit from the financial and management side.
Pack property as an investment
One of the increase in income property is property package as part of a profitable investment. Pack the same way about the price of land. Serve in a calculation of mortgages (mortgage) and compare it with price expectations in the future.
Secure your business with social activities of religious
No business is not at risk. But in the business of property all risks can be controlled. Unless Force Majure. But religion has a unique way of securing business, that religious social activities. Business property sale and purchase of land belongs to God. So the socio-religious activities must be larger. In the property company that I know of, they set aside about 20-40% gains for socio-religious activities. You dare bigger???
Believe what has been laid down by God, it will definitely happen.
No reason. 2. Large capital? No Way!
Sale and purchase of land would need big capital. Wait who's to say. Developer I have ever known and the developer is quite famous in the United States. In 1999 the capital they manage less than 10,000 U.S. dollars. And in a period of 8 years, their assets amounted to 2,500,000 U.S. dollars. Developer where I shelter, with an initial capital of 300 000 U.S. dollars, within a period of 2 years, our net assets of about 2,000,000 U.S. dollars.
There are a number of ways.
Negotiate payment
Negotiation of payment can be land payment, contractors, consultants and any cash out so slow. This means that should accelerate cash inflows. That is quite a down payment, somehow cash in to cover the next pambayaran obligations. For example, your capital is 5.000 U.S. dollars. You buy the land area of 1000m2 with price 6.000 U.S. dollars. Negotiate phased payments of 6 months. The first payment of 1000 U.S. dollars. Back up to 1000 dollars for payment 2. Prepare a planning team to plan for the region, skitar cost 500 dollars. Budgeted promotional costs about 1000 dollars. 750 dollar budget for monthly operations. 750 dollar budget for the legality of land. Simply 5000 U.S. dollars right? Enough 1000 dollars to buy the land for $ 6.000 U.S. dollars right? Imagine if you advance 10.000 U.S. dollar, you can get the land worth 60.000 U.S. dollars. If the soil has been treated or cured, your assets could be 120 000 U.S. dollars! Fantastic!
Promote the region by selling risk
Regions was ready. Promote with aggressively by selling risk because the point is you need cash fast, sell house prices 20% cheaper than the normal price, but cash. But do not forget to raise the selling price if it reaches a certain point. Well now you know about the concept of property as an investment package. This is one of them.
Instruments Business Loan
In the early stages, banks will not likely glance at your business. Or if your business is already well known, of course, you will easily get a construction loan, a developer of alternative financing. You need to know, developer (new) investments is not easy to get credit, but credit for working capital construction. Now what if the banks do not want to glance at your business. Use the mortgage facilities! How? Make relatives, co-workers as a consumer your property. Financing through mortgages. Disbursement of mortgage you will receive. Mortgage repayment obligations is the responsibility of your business. Simple is not it. You've certainly got the investment credit.
No reason. 3. Get Cash Flow is great!
The third reason is clearly hard to resist. With the property we can generate substantial cash flow. The principle speed up the money in, money out slow. Wait do not merely sell cash ... Use the mortgage instrument.
Mortgage Instruments
Mortgages now allow mortgages indent where consumers can be bound in the loan agreement even though the building has not been completed. And you will receive an initial disbursement of 40%. If the down payment of 20%, meaning you receive a 60% down payment. Remember negotiating payments? Lest your capital back?
And to build a house, you probably will spend only about 40%. And spending 10% more for the maturation of land, infrastructure and facilities. The remaining 10% of it? Be able to pay for the land. At 4 months, assuming the construction is completed, you will receive 60%. The question is how to 4 months of development? The important case sales targets.
The new land, a new field of money
What about the 60% of the remaining loan disbursements? Back up to buy new land. Make a new money field. I guarantee you will be rich!
Again I say, there must be a risk in the property. But the risk in the property should be controlled. There are a few tips that I have written clearly without having a description
Determine the net profit target
Determine the risk of loss
Target marketing minimum must be reached
Press the fixed cost, variable cost enlarge
Monitoring cash flow and profit and loss
Cut Loss when touching limit the risk of loss
Pour a business agreement in black and white
So you are interested in entering the property? When?
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