Ask any real estate professional and they will tell you that, at some point in the past decade, they have been approached by someone calling himself an investor and asked to submit a large quantity of offers to purchase property.  If you’ve ever had insomnia you may have switched on the TV late at night and seen one of the many programs trying to convince that, in exchange for a few hundred dollars, you can quit your job and become a successful property investor.  Maybe you’ve even met someone who told you she’s about to become a millionaire buying properties at tax sales.  Certainly the commercials trot out dozens of people who swear they changed their lives in 10 easy lessons.

Do you actually know anyone who has done this?  Purchased a “how-to” kit or attended one of those pricey weekend seminars and proceeded to make their fortune with “No Risk!  No Credit!  No Down Payment!!?”  No?  Us either.  (although I’ll be there are some wealthy folks out there selling these programs…)

Can you invest with no credit?  Sure, if you pay cash or find a creative financing source.  Can you invest with no down payment?  Again, sure.  If you aren’t financing the property, there wouldn’t be a down payment.  But what about the “no risk” part?  Well, the truth is, there is no such thing as a no-risk investment.  Investing is built on risk and successful investors learn how to avoid risk as much as possible and minimize the risk that is present.

On the opposite end of the spectrum, what about those investment programs that guarantee some level of return, or promise to finance your first deal?  There are even programs that promise to locate your first investment property for you to “get you started,” maybe even fly you to see the property and put you through a high pressure pitch.  The scary thing?  Even intelligent, reasonable people sometimes get caught up in these scams, losing any savings or investment funds they have and getting themselves into credit-destroying debt.

So what are the warning signs to look out for?  Any program that calls itself “risk free” or promises that you will make a lot of money quickly, with little effort, or with no investment.  Any program that promises to reveal an exclusive or secret system is a scam.  We promise.  There are no investment secrets.  Any real estate, finance, legal, or tax professional can tell you the ways to accomplish real estate investment so that you will maximize your returns and minimize your risk, and they will do so under a fully disclosed and legally regulated way.

We really hate to be party poopers but, in real estate investing, the only free lunch is likely to be the one your broker takes you on to celebrate closing a deal.

Next up, how to do your homework before investing in real estate.

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NOTE:  We pride ourselves on bringing you the most informative, up-to-date, and accurate information possible about the often-confusing world of real estate investing.  Nothing we post however is intended to be taken as investment, real estate, or legal advice.  You should always contact a licensed investment, real estate, or legal professional for information and advice about your own unique investment scenarios.

Artisan Real Estate Group is one of the top boutique real estate firms in Arizona.  We provide an end-to-end suite of services to our investor clients, including a full range of residential and commercial real estate services, income property location service, investor services, property remodeling, restoration, and rehabilitation, real estate finance consultation, REO and bank-owned property services, trustee sale consultation and bidding representation, and new home builder services.  Our international team specializes in helping investors from all over the world with their Arizona real estate transactions.  Our goal is to find the best properties with the highest cap rate and ROI for our investor clients.  Contact us today to find out how we can help you grow your personal wealth and investment portfolio.  Artisan Real Estate Group,  or call us at (602)644-1280.  Email: info@artisanrealestategroup.com

We told you previously some of the reasons why condos, townhomes, and patio homes can be great real estate investments in Phoenix and other Arizona regional areas right now.  But these descriptions can sometimes be confusing.  In fact, many people don’t know the difference between these property types. In the interest of helping the real estate investor be as knowledgeable as possible, let’s take a look at what each of these terms mean legally, and what they mean in a real estate listing.

Condominiums are much like apartments, where other units may be above you, below you, or to either side. A condo owner is legally considered to own the property consisting of the walls in.  In addition, the owner also has a proportional share ownership of the common areas of the complex, based on how many units are present.  For example, in a 100-unit condo complex, the owner holds a 1/100 share of the common area in addition to his own unit. Condo ownership comes with no land rights and no airspace rights above.  Parking is typically not attached to the property (although in some cases it is), but assigned to the unit and a part of the legal ownership structure.

In a townhome, the owner typically owns the land below and the airspace above the unit, in addition to a percentage ownership of common area.  In essence, no one has the right to build above or below your unit, unlike the rights to a condominium.  Although most people consider a townhouse to be two or more stories, that is not always the case.  A property may legally be considered a townhome even if it is a single-story property.  Townhomes typically share common walls to either side with other units but never above or below.  Parking may be attached to the unit or it may be assigned somewhere on the property.

Patio homes are very much like townhomes except they often do not share common walls with other units, or sometimes only one wall.  These are constructed much like free-standing homes, but typically very close together or connected in a limited manner.  Parking is usually a part of the unit itself, not common on the property.  Also like a townhome or condo, patio home ownership comes with a percentage share ownership of the common areas of the development. Whenever there are common areas, whether the property is condo, townhouse, or patio home, there will be a homeowners association (HOA).  The HOA is in place to oversee the care and maintenance of common areas and to maintain the value of the
properties located within it.  This is a complex subject with many legal implications for the investor, so extra care and due diligence are required.

In the Arizona Regional MLS (ARMLS) system, agents often list properties in ways that don’t necessarily correlate with the true legal definitions.  Often this is because the property owner prefers a terminology that is confusing, or simply doesn’t understand the difference. This is yet another reason why it is critical to have an experienced, licensed agent or broker represent you.  It is the responsibility of the buyer to verify all details of a real estate listing and for purposes of insurance coverage and other issues of significant financial impact, the investor must understand exactly what he is buying. Never rely on the information in a listing because, even though it is deemed reliable, “buyer beware” always applies.
The descriptions above are general, informational guidelines.  The legal definition of any property type varies depending on the location and the specific deed restrictions of the property.  Always consult a real estate lawyer for advice, in addition to your licensed agent.  We can’t emphasize enough how important this is for the investor.

Some other terms you may hear or see in MLS online listings are Gemini or twin home, loft, coop, or apartment home.  We will describe these
unusual property types in a future article.

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NOTE:  We pride ourselves on bringing you the most informative, up-to-date, and accurate information possible about the often-confusing world of real estate investing.  Nothing we post however is intended to be taken as investment, real estate, or legal advice.  You should always contact a licensed investment, real estate, or legal professional for information and advice about your own unique investment scenarios. Artisan Real Estate Group is one of the top boutique real estate firms in Arizona.  We provide an end-to-end suite of services to our investor clients, including a full range of residential and commercial real estate services, income property location service, investor services, property remodeling, restoration, and rehabilitation, real estate finance consultation, REO and bank-owned property services, trustee sale consultation and bidding representation, and new home builder services.  Our international team specializes in helping investors from all over the world with their Arizona
real estate transactions.  Our goal is to find the best properties with the highest cap rate and ROI for our investor clients.  Contact us today to find out how we can help you grow your personal wealth and investment portfolio.  Artisan Real Estate Group, http://www.artisanrealestategroup.com/  or call us at (602)644-1280.  Email: info@artisanrealestategroup.com

Real estate investing advice is as plentiful today as Kardashians on reality TV.  But much like the Kardashian phenomenon, most of that advice is pretty fake and superficial, and largely there because they want your money.  So how do you do your homework and learn to separate the real advice from the fake and misleading?  Three words: experienced, licensed Realtors.

The media won’t stop telling us the extent to which the real estate market is a mess, but when they report these things, they’re reporting for the standard viewer, the real estate consumer.  That’s a good sign for the investor, but it’s just not that simple.  Every market is different and it’s impossible to be familiar with every area in every city that’s prime for buying property.  For these (and a million other) reasons, licensed Realtors with experience in your target market is an invaluable asset that IS FREE TO THE INVESTOR/BUYER!

For example, an experienced agent or broker can tell you where the hot areas are for buy-and-hold investment or fix-and-flip properties.  A seasoned Realtor can tell you that REIT investing is off the charts right now, growing steadily toward its high point in 2007.  An experienced broker can show you what properties and what locations will command the highest rent and attract the best tenants.  A highly embedded agent knows which school districts and employment centers are pushing resale values up.

So how do you find a Realtor that is the best fit for you?  Do your homework!  Search the internet for broker sites that speak intelligently about your areas of interest.  The novice investor jumps from agent to agent, looking for the person they can beat up the most over fees or other nickel-and-dime issues.  The astute investor wants an equally astute real estate professional to partner with in the long term.

A strong broker will do most of your homework for you.  All Realtors are legally accountable to give you the best information possible to benefit you, but the experienced, knowledgeable agent already knows all the important information and will be happy to share with you all those things that will help you grow your wealth and build your portfolio.

Real estate investing must be undertaken with diligence and fiduciary wisdom, but the real estate investor doesn’t have to know everything himself.  The wise and successful real estate investor is the one that knows how to find (and keep) the best partners.

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NOTE:  We pride ourselves on bringing you the most informative, up-to-date, and accurate information possible about the often-confusing world of real estate investing.  Nothing we post however is intended to be taken as investment, real estate, or legal advice.  You should always contact a licensed investment, real estate, or legal professional for information and advice about your own unique investment scenarios.

Artisan Real Estate Group is one of the top boutique real estate firms in Arizona.  We provide an end-to-end suite of services to our investor clients, including a full range of residential and commercial real estate services, income property location service, investor services, property remodeling, restoration, and rehabilitation, real estate finance consultation, REO and bank-owned property services, trustee sale consultation and bidding representation, and new home builder services.  Our international team specializes in helping investors from all over the world with their Arizona real estate transactions.  Our goal is to find the best properties with the highest cap rate and ROI for our investor clients.  Contact us today to find out how we can help you grow your personal wealth and investment portfolio.  Artisan Real Estate Group, http://www.artisanrealestategroup.com/  or call us at (602)644-1280.  Email: info@artisanrealestategroup.com

In today’s topsy-turvy real estate market, many so-called experts will tell you that single family real estate investment properties are the only ones the investor should consider at present.  The traditional way of thinking was that condos and their cousins, the townhome and patio home, are the first type of property to drop in value when the real estate market tanks, and the last type to gain a foothold when things turn around. But for the buy-and-hold investor, especially in Phoenix and surrounding Arizona areas, condos need not be avoided.

When investing in Arizona, particularly with the intention to hold on to the property for several years, condos can be a wise investment choice for a number of reasons.  The first priority for the investor is to find good tenants and hold on to them.  There are several tenant profiles that distinctly prefer condos and townhomes over single family properties.

Young professionals, especially single people and couples without children, often seek the simplicity of townhome life.  This demographic often spends a large portion of their lives dedicated to their careers.  The rest of the time, they prefer to pursue the vast array of recreational and leisure activities that are so plentiful in Arizona.  The last thing they want to do is house or yard work.  They typically seek a smaller square footage with modern finishes and amenities.  These lucrative tenants want locations that are close to hip and popular restaurants and nightclubs.  The investor will find many excellent investment opportunities in these areas, where developers built lofts and modern condos by the hundreds just before the market crashed around 2006.

The next tenant demographic that prefer condos and patio homes is the older set.  Again, these are single people or couples whose children are grown and gone.  They also want to pursue a more leisurely life, away from the home and yard work that dominated their child-rearing years.  They seek to downsize and often enjoy the social opportunities that are present in many of the “snowbird” locations around the Phoenix Valley.  To attract these tenants, who might be the best tenants of all in terms of responsibility and reliability, the investor should look for those properties that attract winter visitors and that have golf and other leisure opportunities nearby.  Excellent buys can be found in Scottsdale, parts of the far East Valley such as Gold Canyon and Apache Junction, and in both the Northwest and Southwest areas of the Valley.

Whereas the price of single family homes has skyrocketed over the past few months, excellent buys can still be found on condos, townhomes, and patio homes.  The investor must be sure to consult with a licensed Realtor to determine which areas command the highest rent, attract the best tenants that fit the desired profile, and will provide the highest return on investment (ROI).  It should also be noted that condos will likely appreciate later than single family homes, so these properties are excellent for the investor that seeks real estate to add to their portfolio and hold for the next few years.

Next up, what exactly IS the difference between a condo, a townhouse, and a patio home?

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NOTE:  We pride ourselves on bringing you the most informative, up-to-date, and accurate information possible about the often-confusing world of real estate investing.  Nothing we post however is intended to be taken as investment, real estate, or legal advice.  You should always contact a licensed investment, real estate, or legal professional for information and advice about your own unique investment scenarios. Artisan Real Estate Group is one of the top boutique real estate firms in Arizona.  We provide an end-to-end suite of services to our investor clients, including a full range of residential and commercial real estate services, income property location service, investor services, property remodeling, restoration, and rehabilitation, real estate finance consultation, REO and bank-owned property services, trustee sale consultation and bidding representation, and new home builder services.  Our international team specializes in helping investors from all over the world with their Arizona
real estate transactions.  Our goal is to find the best properties with the highest cap rate and ROI for our investor clients.  Contact us today to find out how we can help you grow your personal wealth and investment portfolio.  Artisan Real Estate Group, http://www.artisanrealestategroup.com/  or call us at (602)644-1280.  Email: info@artisanrealestategroup.com

Next in our “The Role of the Tenant in Real Estate Investing” series…

The real estate investor in search of tenants often assumes that “no pets allowed” is a standard they should follow.  After all, pets are just a messy disaster in a rental property, right?

The answer, surprisingly, is a resounding…  WRONG!

In fact, if you really want to attract a fabulous tenant, a dog may be the investor’s best friend!

Pet owners in the United States spend in excess of $6 *billion* per year on their pets.  Of course there are rotten pet owners out there, but the reality is that many pet owners – especially those that are willing and able to pay a sizeable security deposit – are some of the most responsible people out there.  With the recent foreclosure crisis, many families have recently lost their homes.  These families now need to rent a nice home, ideally as much of a home as the one they had, and they probably have pets.  They’ve had the pets for years, in their own home.  It’s a safe bet those good people and their pets will be just fine in your investment property.

Until recently, it was rare to find any nice rental property that allowed the tenants to have pets.  That paradigm is starting to change, however the number is still less than 1%.  Allowing pets will instantly provide a significant advantage when renting your property.  Being pet friendly will reduce vacancy rates, provide a larger pool of responsible tenants, and – statistics actually show – result in less damage to the property.  MSN.com reports that the average monetary damage from tenants without pets is $362.  For tenants with pets, the average damage is $323.  That’s about 11% less damage from pet owner tenants.

There are plenty of steps the investor can take to protect themselves, including asking for pet deposits in addition to security deposits and putting language in the lease that holds the tenant responsible for any damage caused by the pets.  In addition, require the tenant to provide proof of liability insurance, naming the property owner as an additional insured on the policy.  Periodic property inspections will help ensure that any problems are detected before things get out hand.

In the end, when it comes to renting your investment property, it may be safe to say that pets do make good neighbors!

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NOTE:  We pride ourselves on bringing you the most informative, up-to-date, and accurate information possible about the often-confusing world of real estate investing.  Nothing we post however is intended to be taken as legal advice.  You should always contact a licensed legal professional for information and advice about your own unique investment scenarios.

Artisan Real Estate Group is one of the top boutique real estate firms in Arizona.  We provide an end-to-end suite of services to our investor clients, including a full range of residential and commercial real estate services, investor services, property remodeling, restoration, and rehabilitation, real estate finance consultation, REO and bank-owned property services, trustee sale consultation and bidding representation, and new home builder services.   Our international team specializes in helping investors from all over the world with their Arizona real estate transactions.  Contact us today to find out how we can help you grow your personal wealth and investment portfolio.  Artisan Real Estate Group, http://www.artisanrealestategroup.com/  or call us at (602)644-1280.  Email: info@artisanrealestategroup.com

First in our “The Role of the Tenant for the Income Property Investor” series…

Every income property real estate investor understands that having tenants is critical.  Empty income property cost money, they don’t generate it.   So what’s more important than having tenants?  Having the RIGHT tenants.

Potential investor often shy away from income real estate, based solely on the horror stories they have heard about bad tenants.  Obviously there are no guarantees that any tenant will be trouble-free, but there are some real estate management things to watch for and some steps to take to ensure that your tenants will be the best ones available.  This week, we begin a series of articles designed to help you find the perfect tenants.

The Best Location for Income Property

When you set out to purchase your next residential real estate income property, think about the location.  The same house in a less-desirable area may cost substantially less than one in a better neighborhood, but run the numbers.  If you have a high level of rental turnover, you’re looking at vacancy and turnover costs much higher than for a property that has little turnover.  And since you’ll likely be able to command higher rental rates in the better area, it won’t be long before that cost difference is offset.  Invest in the best area you can.

Tips for Finding “Those” Tenants for your income property

You know the ones…  Stable, responsible, employed.  It’s a violation of federal law to profile tenants based on race, ethnicity, national origin, religion, familial status, gender, and handicapped status.  However, it is not only acceptable but wise to establish requirements for employment stability and financial capacity.  Many income property owners require credit and criminal background checks also.  But let’s talk about this for a minute.  The huge number of foreclosures happening right now, particularly in Arizona, has produced a bumper crop of stable people use to owning their own homes.  When they lose their home, they will seek out a rental property that is of similar quality in the same general geographic area, since those with children will not want to change school districts.  Most of these people make IDEAL tenants for income property, because they know how to care for a property and they are likely mortified that they’ve had to endure a foreclosure.  But, since there was a foreclosure, their credit is severely damaged.  If they can demonstrate employment stability and financial capacity (by way of a substantial security deposit), these are likely to be the best tenants you will find.

Tips for Finding the Best Location to Attract “Those” Tenants for income property

Contrary to popular belief, the best locations for the income property investor are not the most highly priced rental areas.  Identify the top ten most highly rated school districts in the area, and start with those areas.  Among those areas, locate those with the highest percentage of foreclosures and you’ve struck income property investor gold.

Watch for more on this topic, coming soon!

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NOTE:  We pride ourselves on bringing you the most informative, up-to-date, and accurate information possible about the often-confusing world of real estate investing.  Nothing we post however is intended to be taken as legal advice.  You should always contact a  legal professional for information and advice about your own unique investment scenarios.

Artisan Real Estate Group is one of the top boutique real estate firms in Arizona.  We provide an end-to-end suite of services to our investor clients, including a full range of residential and commercial real estate services, investor services, property remodeling, restoration, and rehabilitation, real estate finance consultation, REO and bank-owned property services, trustee sale consultation and bidding representation, and new home builder services.   Our international team specializes in helping investors from all over the world with their Arizona real estate transactions.  Contact us today to find out how we can help you grow your personal wealth and investment portfolio.  Artisan Real Estate Group, http://www.artisanrealestategroup.com/  or call us at (602)644-1280.  Email: info@artisanrealestategroup.com

Next in our “The Role of the Tenant for the Income Property Investor” series…

You know as a residential income property investor that finding the right tenants is the key to reliable cash flow and high cap rate.  There are steps you can take to ensure that the best tenants actually seek you out.

The Best Way to Advertise Your Property (hint…  it’s not Craigslist!)

Many investors try to save money by finding their own tenants, using any one of the many free advertising media.  If  you’ve ever spent a week talking to the people who call from a Craigslist ad however, you may know this isn’t the way to go if you have a nice rental property to offer.  Craigslist has its place but, without question, the highest quality of tenant comes with their own real estate agent.

No financially savvy person (and no one with reasonable and respectable financial capacity) goes into a real estate transaction – even a simple rental – without their own representation.  This means you need to have your real estate partner list your rental property on the local MLS.  It also means you will have to pay a commission (and probably a bonus but we’ll get there in a minute), however that small expense will pay for itself many times over when you are able to minimize vacancy , property wear or damage, and turnover costs.  Listing a property on the MLS will provide the credibility that allows you to charge higher deposits and set high standards for tenant qualification.  You will save literally hours that you would have spent answering phone calls and showing the property to lookie-loos who don’t have the financial capacity to rent your property.

Typical real estate commission on a rental is 3% of the total lease amount to both agents in the transaction.  For example, if the lease is for one year at $1200 per month, the total lease amount is $14,400 and total commission is $864 ($432 to each agent).  That’s a pretty small fee for what you get in return.  If you want to have a good shot at getting the property rented quickly, don’t try to short the commission amount in any way.  If you want to rise to the top of the pack, offer a bonus with an executed lease and deposit in place by a certain date.  No one wants to admit it, but agents do consider these factors to some degree and, all things being equal, they will show your property early and often.  Offer the agent an additional fee for each year the tenants renew their lease, and you have an even better chance of building loyalty within the real estate community.

The last advantage that listing your property with a Realtor offers is the increase in perception it provides to the potential tenant.  There’s nothing worse than an investor meeting a prospective tenant late, in the t-shirt and shorts he was wearing because he just came from doing work on another property.  You have better things to do with your time than showing houses.  Your agent will present a reliably professional image, which reflects wonderfully on you.  If the property owner cares enough to provide a professional leasing agent, the tenants will develop a higher regard and level of trust, which is something that the best tenants do seek.

Watch for more on this topic, coming soon!

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NOTE:  We pride ourselves on bringing you the most informative, up-to-date, and accurate information possible about the often-confusing world of real estate investing.  Nothing we post however is intended to be taken as legal advice.  You should always contact a licensed legal professional for information and advice about your own unique investment scenarios.

Artisan Real Estate Group is one of the top boutique real estate firms in Arizona.  We provide an end-to-end suite of services to our investor clients, including a full range of residential and commercial real estate services, investor services, property remodeling, restoration, and rehabilitation, real estate finance consultation, REO and bank-owned property services, trustee sale consultation and bidding representation, and new home builder services.   Our international team specializes in helping investors from all over the world with their Arizona real estate transactions.  Contact us today to find out how we can help you grow your personal wealth and investment portfolio.  Artisan Real Estate Group, http://www.artisanrealestategroup.com/  or call us at (602)644-1280.  Email: info@artisanrealestategroup.com