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Using Leverage in Real Estate by Avoiding Risks: Building Wealth

leverage in real estateArchimedes made the comment, “Give me a lever long enough and a fulcrum strong enough, and I can move the world.”

“Leverage real estate to buy more properties. Invest in real estate with leverage.” You’ve probably heard the phrase many times. Yet it is difficult to get a clear answer as to what it means. All the while, you’ll be told that learning how to do this requires paying for their book or seminar. We’re going to break the mold and tell you what leverage is before explaining how to leverage real estate to build wealth. Leverage is a method that allows you to control properties with little cash.

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10 Rules of Successful Real Estate Investing


I came up with the following rules of successful real estate investing over my many years of successes and failures. These are the same rules I follow today and share with our clients at Norada Real Estate Investments.

1. Educate Yourself

Knowledge is the new currency. Without it you are doomed to follow other people’s advice without knowing if it’s good or bad.

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3 Business Structure Mistakes Real Estate Investors Make

Real Estate Investment LLCStarting A Real Estate Investment LLC

Why have an LLC?

There are mainly two reasons why you want any kind of business structure:

Pay less tax, and protect your assets. LLCs can be especially helpful if there are multiple owners of a property. When you create an LLC, you’ll create an operating agreement that outlines the rights and responsibilities of each member of the LLC.

This can help you seamlessly manage your rental property business and also protect each member of the LLC in case of legal trouble.

Before you jump into creating your LLCs for your real estate holdings, there are a few things to consider.  Do NOT make these three mistakes while creating an LLC for your real estate investment company.

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How to Calculate Net Operating Income

You can calculate net operating income (NOI) for your real estate investment by using the generally accepted net operating income formula, which is your potential rental income plus any additional property-related income minus vacancy losses minus total operating expenses.

Keep in mind the net operating income formula can vary depending on who calculates it.

For example, most investors separate potential rental income and other income, but sometimes you will see them combined. Regardless, the generally accepted net operating income formula is your potential rental income plus any additional property-related income minus vacancy losses minus total operating expenses.

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What Are The Different Types of Mortgage Loans For Real Estate Investment?

Types of Mortgage Loans

When you start searching for mortgage options, you will probably find out that there are different types of mortgage loans to choose from. With so many types of mortgage loans, you may most likely don’t know where to begin. You know you need to pick the best mortgage rate, however, you ought to comprehend this doesn’t really mean going for the mortgage with lowest rate. This is because there are some other variables to consider which can influence your decision.

There are some mortgage options which should know about financing investment properties. Let us discuss the 4 most popular types of mortgages in real estate. The motivation behind this article is to educate you on different types of real estate investment loans that you can use in your real estate investing.

types of mortgage loans

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Why Governments Want You to Pay Less Taxes

How To Lower Property Taxes On Your Home

How To Lower Property Taxes On Your Home??

There is an entire political discussion around taxes: are they fair or unfair? Are you paying your fair share?

During the last election cycle, President Trump received a lot of attention when he said, “I pay no taxes.” But what most people don’t realize is that Trump is only doing exactly what the government wants him to do.

Congress NEEDS professional investors and entrepreneurs. They want to reward business owners because they know that by doing so they will create jobs, and housing. After all, that’s what creates a better economy.

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The Two Types of Financial Optimism

I’ve frequently written about how savers are losers. And it’s true. In an economy that runs on debt and thrives on inflation, there is nothing more financially dangerous than thinking your savings will provide a secure financial future.

Well, almost nothing.

The optimism bias

A new report issued by reveals something even more financially ignorant than relying on savings—thinking you don’t need any savings at all.

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The One Percent Rule – Quick Math For Positive Cash Flow Rental Properties

The one percent rule is an analysis tool used by real estate investors to quickly screen potential rental properties. In this article I’ll go into more depth about what it is, when to use it (and when not to!), and why it can be helpful.  I’ll also address the one percent rule in high-priced markets. There are times when it makes sense to break the rule, but there are also risks to doing that.

More than anything, the one percent rule is about using income discipline when buying investment properties.  The mindset of disciplining yourself to only buy real estate investments that meet certain income criteria will help you make more money and avoid common investing pitfalls.

Let’s get started.
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12 Big Risks In Turnkey Real Estate Investment

What Are The Risks In Turnkey Real Estate Investment

Even with turnkey real estate investment, there might be some risks along the road, but this article will give the you an idea of how to deal with these bumps without losing too much. No investment is risk free and so is true for turnkey real estate investments. There is so much more that goes into turnkey real estate investment than simply buying a cash flow property and enjoying a passive income, and all new investors need to know about these risks in turnkey real estate investment. Even more seasoned real estate investors are now being more cautious than ever before when it comes to choosing a turnkey real estate company.

Whether you are a seasoned or new investor, you can use this article on risks in turnkey real estate investment and refresh your memory and possibly even add new techniques to your knowledge base.

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Why Boomers Will Continue to Struggle

Headlines such as this break my heart: “With $15 Left in the Bank, a Baby Boomer Makes Peace With Less.” But I predict that we’re going to see more and more like this in the coming months and years. That’s because the problems with retirement age people are bigger than anyone imagines.

This story is merely a collection of symptoms of the bigger problem. It’s the story of Kathleen Wolf, a woman trying to do the best she can. She has spent many decades living and working in Monterey, California. She built a very happy and prosperous life there. But with the subprime meltdown, her considerable wealth in real estate disappeared almost overnight. It didn’t take long for her bank balance to reflect that she had just $15.

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My Rental Retirement Strategy

This article was inspired by a series of posts by fellow early retirement bloggers about how to live off your wealth during retirement.  They called this a retirement draw-down or withdrawal strategy, which, by the way, could be very different than your strategy to build wealth.  I touched on my withdrawal strategy in How to Retire Early & Confidently Using Real Estate, but I will go into more depth in this article.

For me, a good retirement withdrawal strategy has two primary goals:

  1. Pay for all your current living expenses
  2. Not run out of money in the future

It turns out that rental income and other real estate investing strategies work great to achieve these goals.  And real estate can make a big difference whether it’s a small or large portion of your overall portfolio.

So, in the rest of the article I’ll share ideas on how to use rentals for a retirement withdrawal strategy.

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What Are The Benefits of Investing In Real Estate

Real estate has long been viewed as a sound investment.  Benefits of Investing in real estate are directly related to substantial increase in wealth of an individual.  Wholesaling and buying a turnkey rental property are just a couple of the ways investors can benefit from real estateThe important benefits of investing in real estate are increase in property value due to appreciation as well as good cash flow in the form of rental income.  Education and networking are very important to become successful in real estate investing.

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Why Cheap People Will Never Get Rich

The other day a friend of mine approached me excitedly, saying, “I found the house of my dreams. It’s in foreclosure and the bank will sell it to me for a great price.”

“How good is the price?” I asked.

“Just before the real estate market crashed, the seller was asking $780,000 for the property. Today, I can buy it from the bank for $215,000. What do you think?” she asked.

“How would I know?” I replied. “All you’ve given me is the price.”

“Yes!” she squealed. “Now my husband and I can afford it.”

“Only cheap people buy on price,” I replied. “Just because something is cheap doesn’t mean it’s worth the cost.”

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7 Ways to Determine Your Property’s Value

Real estate values estimation has several uses ranging from sale listings of real estate and analysis of investments to property taxes and insurances. However, it’s particularly necessary when it comes to real estate sales and passive investing. After all, the value of a property is not just based on the initial payment made or the expenses for property upkeep and modifications. Instead, a property’s worth is also based on comparing recently sold neighboring properties’ prices. With this in mind, below are ways to find out property values, including home value estimator tools and methods.

7 Ways to Determine Real Estate Values

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2017 Think Realty Honors Winners

Each year, Think Realty honors the leaders and change-makers of real estate who represent the best the industry has to offer.  These individuals are nominated by their peers, and the finalists are determined by an independent panel of judges who are former Think Realty Honors recipients themselves.

Their stories range from new investors just beginning (and exponentially growing) to true industry veterans with decades of experience, from single-family investors focused on just a few neighborhoods to multifamily moguls buying millions of dollars’ worth of real estate at a time, and from major industry players employing hundreds of real estate experts to one-man (or -woman) operations making a difference with just the energy of the CEO alone.

This year, Norada Real Estate’s very own founder and CEO, Marco Santarelli, was awarded Think Realty’s highest honor of Master Investor of the Year.
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