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DC Fawcett’s Tips – Real Estate Investment Trust

Real Estate Investment TrustREIT ( Real Estate Investment Trust ) is an organization or a company which either owns or finances income-generating real estate. Investors get all types of regular income streams, diversification, and long-term capital appreciation from the REIT. These companies pay the taxable income to the shareholders by way of dividend, for which the shareholders have to pay the tax on dividend income. DC Fawcett suggests the investors to choose the right REIT.

Why REIT?

REIT’s are known as total return investments. They provide high dividends and potential for moderate, long-term capital appreciations. They offer

  1. High Dividend Yield

    The dividend yield in a REIT is significantly higher than other equities.

  2. Income and long-term growth

    REIT provides long term returns apart from the returns from other stocks and bonds

  3. Liquidity

    Publicly traded REIT shares can be readily converted into cash as the trading is done in major stock exchanges.

How to choose REIT’s and their financial benefits

An individual might invest in a REIT that is listed on the stock-exchange. They also go to REIT mutual fund or exchange-traded fund. Profitable investment Investors also have the capacity to invest in public non-listed non REITs and private non REITs.

REIT stocks and shares are publicly priced in stock exchange- listed REIT’s like other companies. To assess the investment value of REIT shares, certain aspects are taken into consideration.

  • Anticipated Growth in EPS(Earning per share)
  • Anticipated total return from stock that is estimated from the price change and the dividend yield.
  • Current dividend yields of bonds, utility stocks and other high-income investments.
  • Percentage of dividend payout ratios.
  • Management quality and corporate structure

REIT’s financial benefits

  1.  What is the benefit you get into investing in REIT

    The market rewards the companies that consistently pay the dividend and has a growth in earning-per-share ratio and stock valuation metric. You need to make sure that

    • The company has the ability to increase its earnings unfailingly.
    • REIT management teams are able to reinvest the cash flow quickly and effectively while simultaneously developing other strategies to create new revenue opportunities.
    • Strong operating characteristics that uses the strategies for succeeding in competitive markets like effective corporate governance procedures, conservative leverage, acceptable accounting practices and strong tenant relationships.
  2. Earning measurements and ability to pay dividends

    You need to compare the amount of dividend for the previous and the current quarter and assess how much the company growth has improved in REIT earnings, which are generated by higher revenues, lower costs, and new business opportunities.

  3. REIT role play in retirement savings

    REIT’s are the main aspect when it comes to an investment portfolio and retirement savings. The REIT’s should pay at least 90% of their taxable income to the shareholders by means of dividend, making them a strong income-generating investment.

 Conclusion

In the last decade, investors, who has been investing in commercial real estate has switched on to REIT because of its attractive offers.

 

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Dc Fawcett’ Best Way of investing in commercial real estate investment for beginners

Commercial real estate investment for beginnersShops, commercial buildings, industries, retail, wholesale, warehouses, hotels and educational institutions come under the commercial property. You can either buy the property directly or indirectly by investing in property companies, developers, house builders or even in funds. However, as a beginner, it might be a daunting task id you don’t have enough funds or have a bad credit. DC Fawcett suggests the best ways for the starters to invest in commercial real estate.

Best Way of investing in commercial real estate investment for beginners

There are so many factors to consider before you think about starting to invest in commercial real estate. One of the main factors is budget and location. Prices for commercial building or complex vary according to the location and area. One of the ways is to ask a professional real estate agent about investing in commercial property. If you are looking to invest in commercial real estate as a beginner, following are the ways.Real estate rating.

  1. Learn what the insiders know

    To be a professional in this trade, you need to think as a professional and take tips from the people who are experienced. You need to know that commercial property is different from the residential property. Even to avail the loan, you make at least 30% down-payment to the commercial property lenders.

  2. Map out an action plan

    The top real estate professionals are able to make out whether the deal is good enough. They make use of exit strategy, i.e. they know what deals they should accept and what not.

  3. Get familiar with key commercial real estate metrics – It consists of:

    1. NOI (Net Operating Income)

      – The commercial property’s NOI is calculated by evaluating the property’s first year’s gross operating income and deducting the operating expenses for the first year

    2. Cap rates – Real estate cap or capitalization is used to calculate the net present value of income generating assets.
    3. Cash-on-cash – Most of the commercial real estate investors rely on financing to purchase properties abide to cash-on-cash strategy in order to compare first-year performance on commercial properties. This approach takes that the investor does not pay 100% cash for the property on one go and won’t keep all the NOI if they have other commitments like paying the mortgage loans. To uncover cash-on-cash, you need to calculate the amount required and stick to your budget
  4. Look for motivated sellers

    Like any other business, the customers’ drives real estate too. You need to find the sellers, who are ready and eager to sell below the market value. Nothing happens or matters in real estate till you find a motivated seller.

  5. Study the neighborhood

    To evaluate the commercial property, you need to study the neighborhood, where it is located in by going to their houses, talking to other neighborhood houses, and looking for the vacancies.

 

Conclusion

Apart from finding and evaluating commercial properties, getting a great price and communication, you need to build a good relationship and rapport with the homeowners.

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House Flipping In Real Estate – By DC Fawcett

dc fawcett Real estateDC  Fawcett Real Estate Tips

Money earned by means of real estate flipping houses drastically changes everyone’s lives. For some, it is their profession and for others, it is a hobby. However, if you are making your career in this endeavor, it is the surest way of earning a steady income. A person can earn without going anywhere near the office or industrial park. Even if a person works for the entire month, their income does not match with real estate income. DC Fawcett warns against the bad investment or money invested in wrong areas which results in huge losses.

Mistakes made when flipping a house

Paying more than actual price

The purpose for doing house flipping business is to make profits. However, when you pay more than the actual price and fail to negotiate, at the time of buying it, the profit reduces when you sell them. To turn it into real profit, one needs to study the real estate market. A lot of research has to be made before buying the property such as comparing at what price your neighbor had brought.

Excess Investment

Another common misstate is investing too much money for personal finances. Even if the property is purchased at the said price, you lose out on your savings. Instead of that if you go for loans, there person need not repay the entire amount in one go.Down payment assistance program.

Incorrect cost estimation

After getting financial assistance, make sure that project lasts long as you would need a good budget to cover for the renovations and little left over for contingencies.

Leaving important upgrades

There is a saying that one should be shrewd with respect to money matters. However, keeping this thing in mind, people tend to go in for cheaper options, though certain upgrades cannot be ignored. The buyers focus on kitchen, bathroom and master suite. At the most, you can reduce the cost on stops on these rooms.

Neighborhood Ignorance

Neighborhood awareness plays a very important role in house flipping. If your house is surrounded with ugly houses & surroundings, flipping becomes difficult.

Getting into the deal without house flipping team – Though, it is possible to do it independently, having a team is even better to guide you when you are new in this line. You can trust

  •    Real estate attorneys
  •    Certified public accountants
  •    General Contractors
  •    Real estate agents
  •    Lenders

Fear due to bad experiences in this endeavor

Many fear to go from house flipping either due to bad experience because of becoming a scam victim or getting nervous at the time of purchase. However, one should overcome the fear and change their mindset.

Poor planning

Though you get innovative things in your mind, you need to chalk out the plan and get ideas about different types of renovations, budget and schedule. Lack of planning postpones the renovation which makes you lose more money.

There are many more mistakes that are being committed which when mentioned becomes a long essay.

 

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