You can not depreciate undeveloped property. The IRS code only allows for depreciation of the improvements on the property and the contents separately. Depending on the tax bracket you fall into this one advantage could save you a lot of money.

2. Income.

Vacant land does not generate income unless can you can lease it out to a farmer or for storage or as a parking lot. When you build on the property you now have created a steady revenue stream coming in even when you are not there. Depending on the type of improvement you could even make it a business and write off even more expenses.

3. Net Worth.

Typically it can take a year or longer to build a home or commercial structure on a piece of land especially when you take into consideration the time it takes to get all the necessary approvals from al the local authorities. By the time you get the project finished and depending on the market you are in the property will be worth a lot more than you owe on it which will greatly increase your net worth.

4. Resale Potential.

It is usually a lot easier to sell a finished product than it is a vision of what could be. This is why building spec homes has become so popular. People just don’t have the time or the desire to make all the decisions involved with a building project from scratch. This works with commercial properties as well as community developments and multi family like condos and town homes.

5. Leverage.

If you own the land outright or have a good bit of equity you can typically borrow 100% of the cost to build from the bank. Once the project is complete you can pull the equity out of the property tax free. This is a great strategy. As the property continues to grow in value you can refinance and cash in. The best part about this strategy is you get to keep the property. You never have to pay any taxes unless you sell and then you do a 1031 exchange at that point and still avoid paying the taxes.

How would it feel to have all the time and money you need to live a stress free debt free life? Just imagine no more living paycheck to pay check worrying about this bill or that bill, imagine having the time to do what’s really important to you. You could take your family on dream vacations. Buy the home you have always wanted. Live the kind of life you never thought you could. Travel the world.

I have spent most of my life working jobs I couldn’t stand sometimes 100 hours a week and for less than half of what I was truly worth and come to find out a fraction of what my true potential really was. I was trapped with no hope in sight. I thought the only way to get ahead was to work harder and harder but instead I kept getting deeper and deeper into debt. The harder and longer I worked the worse things got. I really had no idea how or when things were ever going to change.

Then one day it did. I finally discovered the secret that was making other people rich while I struggled along trying to get ahead. The funny thing is this secret was inside of me the whole time and I didn’t know it. Today I am a multi millionaire but I am the exact same person I was before. I still live in the same area and I still have the same friends and I still wear the same clothes. The difference is I learned how to unleash what was being held inside of me the whole time. I just didn’t know what I didn’t know.

I found out that there was a whole new world out there waiting to be discovered. So many opportunities lurking around every corner and there is nothing that will stop you or hold you back once you have learned the secret. Its so powerful it has changed my life and the lives of most every successful person you can name. They all know the secret and they all use it every single day. So what is the secret?

Leverage.

The one thing all successful people have in common is they understand the power of leverage. This can be used in several ways for instance someone else’s knowledge, time, money, energy, talents etc. Lets take a look at professional athletes for example. They don’t get to where they are simply on raw talent alone they leverage the knowledge of their coaches and trainers to help them perform at such high levels. Business people leverage the talents of their employees and advisors like accountants and lawyers. Investors leverage other people’s money and time.

Why is this such a big secret? Because we are stubborn people and we do not like asking for help but the funny thing is help is everywhere if we will only ask. I was hard headed and tried to figure it out all on my own until one day I finally woke up and realized maybe I don’t have all the answers and that’s ok. We don’t have to have all the answers and there are plenty of resources available to help you. No matter what you want to do you can find a coach or a mentor that has been where you are and is where you want to be. The fastest way to success is to find someone who is where you want to be and learn from them so get out there today and find a coach or a mentor and start your life a new. Do it right now today right from where you are .

These are the questions everyone is asking and not just people here on the Outer Banks. The real estate market continues to make national headlines everyday in all the major media and for good reason. Real estate has been one of the driving forces of our economy for the last 5 years. So what does the future hold? Is there such a thing as a bubble? Let’s take a look.

The real estate market is very similar to other markets in that its values are primarily affected by factors such as inflation, interest rates, supply, demand, consumer confidence and media hype. The real estate market has been red hot simply because money has been extremely cheap and easy to get. People realized very quickly that they could afford twice as much home for the same monthly payment because they could borrow money cheaper and in some cases as much as 50% less than their current interest rate. This created a buying frenzy which increased the demand for new housing as well as providing fuel for the remodeling boom. This demand has driven land and housing costs as well as material and labor costs to record levels all across the country. The fed in an attempt to slow the economy decided to put on the brakes by raising interest rates and they will continue to do so until housing and energy costs start to decline. The strategy is definitely working as most indicators are that the market here is off by almost 50% compared to last year and similar reports are coming in from other areas across the country.

Does this mean that the bubble has burst? No. We are just entering a new cycle were everyone is selling and when you flood any market with product conditions and prices change rapidly. The market is simply adjusting to a more moderate rate of appreciation. However this is a good time to buy if you practice the investment strategy rule of opposites or contra cycle buying that tells us to look at what everyone else is doing and do the exact opposite. In other words the time to buy is when everyone is selling and the time to sell is when everyone is buying. This may sound obvious and simple but just take a look at what the market is doing. Sellers are flooding the market at a rate of almost four to one when compared to closed sales. The best deals are always made in the contra cycle mode.

Is there still opportunity to make money in real estate? Absolutely! More people have become wealthy through real estate than any other investment vehicle in our country. Real estate has always been a sound investment and if you know how to buy property and choose the right kind of financing to achieve your goals the opportunities are unlimited. Structuring the deals with the proper financing is really the key to making money in real estate regardless of the interest rates. Let’s say you buy an income producing property. You really can’t make a bad purchase only a bad financing decision. No matter what you pay for your property today it will be worth more down the road. When you take in consideration a five percent appreciation rate and the fact that rental income will pay your mortgage you are already ahead even before you factor in depreciation. The key is to identify your short and long term goals choose the financing vehicle to achieve them.

Where is the market headed? Real estate will remain a very safe and strong investment especially in high demand high growth areas. It is a different market cycle and a different type of investment now than it was even last year but still one of the best you can make. Interest rates will continue to climb over the next 12 to 18 months and the housing markets will continue to cool off. The remodeling market will continue to grow stronger as the price of land will remain very high. New construction will fall off dramatically as homebuilders will most likely stop building spec homes and developers will have too much inventory on the books to warrant any new projects. Commercial development will continue to remain strong especially in the small retail and office sector as developers try to service the needs of all the new communities that have popped up over that past several years. There seems to be a surplus of properties for sale nationwide creating a definite buyers market. Take advantage now and do not get left behind on this one.

Real estate investing is a business just like any other. You have to make intelligent informed decisions based on facts not feelings. Now I don’t mean gut instinct this is a good deal or bad deal feeling I am talking about dream type feelings when you throw caution to the wind and do what feels right instead of doing the right thing. Just remember to look at the facts and to look at every deal through the eyes of an investor and you will get it right more often than not.

You never give yourself the chance put all this wonderful new education to work because there always seems to be something else that is more important than looking for a new deal or writing out that business plan or setting goals. They say knowledge is power. I say knowledge without application is useless. The world is full of educated failures. Actions speak louder than words and to take action is to take your future into your hands and never letting someone else determine who you are or how much money you should make.

Short sale or REO (a.k.a. real estate owned) are houses that have already gone through the foreclosure process and were not bought at auction. The bank or lender that holds the mortgage takes the house back and is now the owner of the property. The only problem with this is lenders are typically not in the business of owning, rehabbing and managing real estate. They would much prefer to sell the houses to someone else and satisfy the debt obligations.

The term short sale is used because these lenders will often times sell the house for much less than the balance owed to avoid ownership and responsibility themselves. They are not in the business of rehabbing, renting or flipping houses.

How deep of a discount can you expect to get? That will depend on the area you are in and the number of houses that are either in pre-foreclosure or have been foreclosed on already. The other factors will be the condition of the real estate or house itself and the general market conditions overall. The key is to know your market and to buy the property right. If you really know your market thoroughly your chances of success will be increased greatly.

This is crucial because the right builder can save you thousands of dollars by guiding you throughout the entire process. For instance when you are choosing a site there are lots of things you need to watch out for that could be very costly down the road. The materials you choose can make huge difference in terms of costs and energy savings as well as down the road repairs and maintenance. The way the home is designed can cost you a lot of money unnecessarily if you don’t have the proper guidance and finally the type of loan you choose can make a really big difference. This one consideration alone could potentially cost or save you hundreds of thousands of dollars over the life of your loan.

Building a custom home is a very big undertaking. It can be one of the most difficult and stressful ventures you ever take on or it can go very smooth and be one of the most rewarding experiences in your life. There are hundreds of details that need your attention and lots of opportunity for things to go wrong. Having an experienced dedicated custom home builder working for you is key. This will make or break your experience.

When you build a custom home you are dealing with a lot of variables that are out of your control like materials suppliers, sub-contractors and local municipalities. Each of these entities will do the best they can to help get the job done but they are all independently owned and operated and they all have their own agendas to accomplish. Add weather to the mix and things can get pretty interesting. You need a builder that knows how to work the system and that has a positive working relationship with these entities. Your builder should use only the best sub-contractors and suppliers in the area and they should have a proven track record for quality and financial success. You need a custom home builder not a spec or trac builder that only does things there way. Your builder should be open to your ideas and suggestions but they should also have the experience to guide and advise you every step of the way.

Pressure….That’s right I said Pressure. When you hold a property you will typically have to get a mortgage or loan of some sort right? When you do you become a slave to that house. If you lose your tenant or something else goes wrong with that property you are all of a sudden put under pressure to make the payments and pressure can lead to poor decisions. When you don’t have to worry about bills and you have all the money you need in the bank your creative juices really start flowing. The Bible says neither a borrower nor lender be. This is some of the greatest advice ever written. When you lend or borrow you have someone to be accountable to and something to worry about. Free yourself and eliminate all debt. Flip your houses and pay off debt and then use your profits to do deals. This will give you a sense of freedom you could never have imagined.

Rehabbing is not only profitable but it can be a lot of fun if you go about the process the right way. You get really pumped up every time you look at a new potential flip. The excitement of the challenge is almost enough even without the profits and truth be told that is what it takes to make real money. You have to enjoy what you do so much that making money becomes secondary. I know that sounds hard to believe but ask any successful person and 99% of them will tell they don’t do what they do for money. Its all about the fun and the challenge. Its all about having vision and seeing value…creating value were no one else could. That is the true secret to success in any endeavor. Do what you love with 100% of your being and the rest will take care of itself.