Becoming A Battle Hardened Real Estate Veteran Without All The ScarsWritten by Chris Anderson, PhD
As part of a new web site that we just launched, www.GetPreconstructionDeals.com, I get repeated requests asking if a particular deal is good or not. While we can’t answer this for individual projects, we can certainly look at what HAS to get done by investor to dramatically increase odds of a successful transaction.Step 1 is always to determine fair market value(FMV). As a real estate investor, you can always buy properties at FMV. My question is why would anybody want to do that? Through careful selection, you can always find properties that are priced below FMV, regardless if they are existing or if they are a preconstruction project. The best way to determine FMV is to work with someone already familiar with area or determine yourself through local websites showing recent sales histories. Step 2 is to then determine market trend for area for which there are two critical pieces: 1) is average price increasing AND 2) is volume of sales increasing. If both are moving in your favor, then you have comfort of knowing that right trend is in place to keep prices moving forward. In stock market investing, there is saying that trend is your friend and traders frequently observe price and volume data to confirm trend. If a hotly priced real estate market shows signs of dropping in volume, be very careful. Step 3 is to learn about supply, especially in preconstruction marketplace. In some areas, there are very few projects on books and in others, there are 15,000 units expected to emerge within 1 zipcode, in 1 year. Same is true for investing in houses. In you are competing with a bunch of new houses that are coming on-line, then rapid price escalation may be limited. For most savvy investors, they like to see lots of demand with very little supply which is nothing more than common sense. Step 4 is to make your OWN opinions of macro conditions of local and regional marketplace. So, for example, if you are a strong believer that real estate is overvalued in target area, why would you ever consider investing? On other hand, if you believe that market forces will continue to escalate in market, then why would you not be actively looking? As an example, some people believe that graying of America is just now starting to drive people to warm, more attractive climates. Even though property values are high in these areas right now, are we going to see 20 years of additional migration to them? You have to decide for yourself because we won’t know answer for another 20 years!
| | Real Or Simulated Diamonds – Can You Tell The DifferenceWritten by Lee Dobbins
When you buy a diamond, how do you really know if it is real? Of course, if you deal with a reputable jeweler who has a reputation to uphold, your chances are pretty good that you will get real thing. But if you come across a deal from a relatively unknown source and it seems too good to be true – it just may be! You might think a fake is a fake, but just like anything else there are different qualities of simulated diamonds. Some are very inexpensive and easy to spot. A cheap cubic zirconia ring in a plated setting will probably look nice for a while but will soon lose it’s luster and any jewelry would be able to tell right off bat that it is not an expensive gem. That’s not to say that these are no good – on contrary – you can buy a very nice ring for around $20.00 and have it look gorgeous to causal observer. It might last a year if you take care of it and that’s not bad for price! Other simulated diamonds can be quite expensive. Some are very high quality and set in platinum or 14K rings. These will cost you, but not as much as a real diamond in same setting. These rings will last a long time and are a good value if you want look but don’t want to spend money. Most jewelers can tell difference between a real diamond and even these high quality look alikes, but a new method has been developed that creates a diamond in lab which is of such high quality that most jewelers will not be able to distinguish it from a natural diamond. These diamonds that will soon hit market place will set you back about half cost of same size of a natural diamond.
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