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If you missed the Ross Library seminar in August, it's not too late to consider non-traditional strategies on how to select the right real estate investment in Clinton County, purchase it with little down, avoid bank policies, lure investors, ignore price sensitivity, buy-up loans, acquire junk buildings, manage contractors, deal with Realtors, secure tax credits and employ strategies to jump-start success.
Lock Haven offers more lucrative real estate investments than neighboring State College, which is highly dependent on appreciation gains, and Williamsport, with a fluctuating market.
While the real estate appreciation trend in Lock Haven may not be as aggressive; it typically increases by only 2% per annum. However, there are not wavering high peaks and valleys in the trend that you may experience in Centre and Lycoming Counties. In other words, a Lock Haven real estate investment affords lower risk while increasing at a rate in excess of the United States Government consumer price index.
There are more opportunities to purchase real estate in Clinton County than in surrounding areas. This columnist wrote that "the biggest mistake you'll make in real estate is not buying enough, fast enough."
Most business operations are only a conduit to create cash flow to invest in real estate. Thus, one may consider purchasing their business location and start investing in other properties when practical.
Whether you provide internal management or contract it out, losing money in your real estate career is difficult. Each night, when you crawl into bed, tenants pay you an hourly fee to sleep as they reduce your debt. One day you may wake to find the buildings are paid for!
Real estate investments offer a tax shelter through depreciation, profit leverage, increase in asset value through appreciation, cash flow opportunities to acquire other real property and the pride of ownership. It is one of the safest investments because it is a commodity in demand, difficult to replace with an effective hedge against inflation. The asset appreciates in value, you build equity and generate cash. What more could an investor want?
But remember, the business swamp water is always colder as real estate prices and interest rates rise. Initially, one may wish to avoid larger acquisitions to eliminate larger losses that can sink your canoe in bad markets.
Speculating on land for the new real estate investor will often times produce losses.
Many young investors head to their local Realtor.
Certainly, real estate agents can be helpful in your quest to locate and acquire properties, but always remember, everything is negotiable. Whether you are buying or selling, you must be sharp because this is the Realtor's profession. Some real estate agents may list properties substantially over market value to make the seller feel better and then, after the "ink is dry," start negotiating downward to a lower price or worse, allow the property to sit vacant for three months until the seller becomes discouraged with no showings. Real estate is a long-term investment and oftentimes one will encounter unscrupulous agents, scammers and predators.
This columnist believes the "flip game" is seldom achievable and only interesting to watch on television. And, there may be times it is wise to partner with other investors to purchase income-producing properties.
Information on real estate and negotiation skills can be found in the Stephen Poorman Entrepreneurship, Business, Finance and Banking section on the first floor of The Ross Library.
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Stephen Poorman is an author-entrepreneur and consultant who is certified emeritus by the Institute of Management Consultants.