Real Estate Can Be A Wonderful Investment for You

To determine what to invest your money as a growth driver , everyone should consider real estate. There are several reasons for this, including that such investment can be held by an IRA or 401 - K . Normally, retirement programs sponsored by the company do not however if you have or can acquire a self- directed IRA real estate, both commercial and individual properties are a group of assets commonly accepted .By choosing to invest in real estate , the key question you need to answer is do I invest in the business or individual properties. The goal for each type of property is similar , it is to buy, manage, lease and / or sale of goods or properties for a profit. The details of each type may be different, but they all revolve around one thing: cash . Real estate is generally considered a cash intensive business but it can be modified somewhat by leveraging your purchase using a mortgage. A mortgage is a good option as long as the cash flow from rent or lease exceeds your mortgage payment.
What are the differences in commercial and individual properties ? First look at commercial properties. Many commercial investors seeking cash flow tend to focus on multi-unit residential buildings. If acquired for the right price , an apartment can be a gold mine . For example say you have run into a complex of 100 units with 80 % occupancy which is for sale . After some research you have determined the following: 

1) The average rent per unit is $ 500 per month , 

2 ) Tenants pay bills on the unit 

3) The building was solid and needed little or no repair, and 

4) the asking price was $ 2,000,000.00 . Is this a good deal and it will be a significant positive cash flow ?  

With a little basic math answers that you would find would be: 

1) cash flow would be $ 40,000.00 per month or $ 480,000.00 per year , 

2 ) If you can not negotiate the price down , mortgage payments 2,000,000.00 $ 4.75% for 20 years would be about $ 13,000.00 a month.  

You would quickly determine that this is a good deal. The purchase of the building generates a lot of cash flow to support not only pay off the mortgage and pay a property manager to take care of collecting rent and leasing paperwork , but also leaves many room for a renovation of units if you want to remodel to increase rents .If you wanted instead to investigate individual properties such as single family homes and duplexes to the same criteria apply , cash flow , less expenses , to see if it was a viable investment. Also because of the economy you want to also run across a number of individual sellers who are motivated to negotiate with you on price. These are sellers who are behind in their mortgage payments and would be inclined to you to avoid bankruptcy .As with any purchase of property the three things that are vital to your purchase decision are location , location and location. As an added bonus , using real estate as your investment, you are allowed to borrow money from yourself to buy real estate.