Insight on Investment in Real Estate Properties in Cedar Park

Texas

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TABLE OF CONTENT

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-What is Real Estate?-Types of Real Estate.-Characteristics of Real Estate Investments-Advantages and Disadvantages-Buying and owning Real Estate-Finding Investment Value-Why Invest in Real Estate?-Real Estate Vs Paper Assets-Income sources in Real Estate-Common Real Estate Investing Strategies-Conclusion

WHAT IS REAL ESTATE?

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The most basic definition real estate is “an interest in Land”. Broadening that definition somewhat, the

word “interest” can mean either an ownership interest (also known as a fee-simple interest) or a

leasehold interest.

TYPES OF REAL ESTATE

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-Income producing and non income producing investments

-Office property

-Retail property

-Industrial property

-Multi-Family Residential Property

CHARACTERISTICS OF REAL ESTATE INVESTMENTS

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-Income returns from Real estate Investments

-Capital Appreciation

-Volatility in Real Estate Returns

OTHER CHARACTERISTICS OF REAL ESTATE INVESTMENTS

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No Fixed MaturityTangibleRequires ManagementInefficient MarketsHigh Transaction CostsLower LiquidityUnderlying Tenant QualityVariability among regions

ADVANTAGES AND DISADVANTAGES

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Benefits1. Cash FlowCash flow is the amount of money left after all the operating expenses (property taxes, insurance, repairs, maintenance, etc.) and mortgage payments have been made. Ideally, you’d want a positive cash flow.2. Loan AmortizationA Portion of each mortgage payment is applied first towards the interest charged by the lender and the rest is applied towards reducing the balance of the loan. Thus with each mortgage payment, the loan balance is principal is reduced and the equity increased.

ADVANTAGES AND DISADVANTAGES CONT’D

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3. Tax SavingsReal estate investing also offers some tax advantages generally not found in other investments. The tax laws allow real estate investors to deduct many operating expenses, depreciation and even defer capital gains.4. AppreciationAppreciation is the increase in value of a property. Many homeowners have seen their wealth increase due to property appreciation.5. LeverageLeverage is sometimes referred to as using “Other people’s money”. Leverage enables many real estate investors to grow their wealth quickly.

ADVANTAGES AND DISADVANTAGESOTHER CONSIDERATIONS

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- Costly to buy, sell and operate- Requires Management- Difficult to Acquire- Cyclical (Leasing Market)- Cyclical (Investment Market)- Performance Measurement

BUYING AND OWNING REAL ESTATE

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- Public Equity

- Private Equity

- Public and Private Equity

FINDING INVESTMENT VALUE

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-Appraisal Methods

-Hiring an Appraiser

-Mortgage Financing

WHY INVEST IN REAL ESTATE?

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-Real estate is a basic need

-Demand increases w/ Population

-Supply is limited

- Has advantages over other investments like paper assets

Real Estate Vs Paper Assets

-Leverage

-Risk

-Control

-Income replacement

-Liquidity

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INCOME SOURCES IN REAL ESTATE

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- Capital Gains

- Rental income

- Interest income

- Professional fees

COMMON REAL ESTATE INVESTING STRATEGIES

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-Buy and Hold

-Rentals

-Rent-to-own

-Wholesaling

-Flipping

-Rehabbing/Fixer-Uppers

-Tax Delinquent Properties

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We’ve covered quite a few points throughout this topic. Below are some of the main points that were made along the way:

-Real estate investment fall into one of the four following categories:

Private equity

Public equity

Private debt

Public debt

Your choice of which one to invest in depends on the type of exposure you are seeking for your portfolio.

CONCLUSION

CONCLUSION CONT’D

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-You can invest in either income-producing properties or non-income-producing properties. Any leased property is income producing, and vacant properties are non-income producing. You can still earn a capital return on a non-income producing property, just as you would on an investment in a home.

-Buying real estate requires substantial due diligence to ensure that you’re getting what you expect after you close.

-The way to determine the value of your property (other than actually selling it) is to have it appraised by an accredited appraiser.

http://www.hayatrealty.com/Hayat ShabanPhone No. - 512-541-5634E-mail – hayatsellmyhome@gmail.comAddress - 1335 E. Whitestone Blvd., Ste. Z-200Cedar Park, TX 78613

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