In common parlance, any kind of reference to the word ’syndicate’ would occur under hushed whispers and with a certain degree of awe for the criminal underworld. However, when it comes to real estate among other organizations, the connotation of the word used is for lack of a better word, a law abiding one.

There’s no doubt that in today’s scenario of the real estate market, investments can be complex and thus this word is used when it comes any organization that allows two or more investors to participate in the ownership of an interest in real estate, not necessarily the property itself.
So, the asset is normally divided into ‘investment units’ that can be acquired by individual investors and this solely depends on the type of syndicate itself. In addition, investment units can also mean ownership in one or more interests in real property rather than directly owning an entire interest.

Now, why would investors like to do this?

Mostly, this is to provide some form of tax shelter, for individual investors who have to formalize their relationships with the syndicate by signing a contract which indicate their interest in real property.

Even though there are different principles on which a syndicate is built, the normal structure is normally based on the legal relationships that already exist legally such as co-ownership, divided ownership, corporation, trust, general partnership and limited partnership.

The people who play a role as a part of a syndicate are the syndicator (who creates the syndicate), the syndicate manager (who manages and promotes it) and most importantly, the individual investors.

Despite the assumptions that the litigation surrounding a trust is complicated and can be confusing to use, the concept is actually very simple and effective to create and use, and will give you more than one reason to make on one for yourself. One clue as to how a land trust can work out to your advantage is by looking at how corporations use these legal documents, in order to accumulate land for their own purposes.

Very simply, just like the concept of the trust where a person is nominated to hold something of value for the benefit of another party, similarly, a land trust is where the trustee holds title of the property in question for the trustor. Their sole responsibility is to sign deeds and mortgages at the beneficiary’s directions but for all practical purposes, the beneficiary (trustor) is considered the true owner of the property when it comes to taxes.

What makes this type of document interesting is the revocability of ownership without having to change anything else. Apart from this, here are several reasons as to why one (who owns several properties) should use a land trust.

1) The affairs of the beneficiary (trustor) remain private.
2) Avoiding judgments, title claims and liens.
3) Protection from Home Owner’s Association (HOA) claims
4) Ease of transfer and control
5) Buying properties owned by banks
6) Keeps the value of tax assessments lower
7) Avoids transfer taxes
Making mortgage payments ‘assumable’
9) Most importantly, it discourages litigation against you (the beneficiary) as the property is in the name of the trustee, who might not necessarily have as much money as you might have, and therefore this can help avoid lawsuits that might burn a hole in your pocket.

Let’s say that you need a loan for some immediate need from a lender. Now the lender will obviously require collateral for the money being lent, and so the value of your house comes into question. This is where an appraisal takes place. Hence, a licensed appraiser (either an independent contractor one that is employed by the bank) is sent to evaluate the value of your home. This is to determine if the bank can get its money just in case, you default on your payments. Finally, there are several factor that can determine whether you get the loan or not, but if you do not, the appraisal will show you areas of improvement which can improve your chances of success the next time you apply for a loan.

Flipping is a method that reminds of the phrase ‘time is of the essence’ and largely depends on finding property that is priced low, and which can be sold at a higher price for a healthy profit. Three methods of flipping are commonly in practice such as:

Multi-investor flipping
In this method, one investor buys it at a low price, then sells it to another investor who sells it to a third party for a higher value.

Real Estate flipping
In this type, investors purchase a property for a low price, and then sell it for a higher price in a rapidly rising market.

Fix and flip
Real Estate in this type of flipping will help the investor get a good deal due to repair or renovation that is needed for the property. After he completes renovating the house, he can sell it in the market for a higher price.

Over financing your property is much like a double edged sword. It can help you in some ways for the short-term but can also give you grief in the long term.

Let’s say you have about $70,000 to pay off on a $ 200,000 property. Refinancing (or over financing) means that you can get a new loan for about $ 100, 000 currently based on the value of the house, at a lower interest rate, which you can use to close the payment that you still owe at the interest rate that you bought while keeping some cash behind for various purposes.

Some folks do this to lower monthly payments (as the refinancing loan offers a lower interest rate), or gain a cash out which they have to spend on their children’s education or in some cases, buy new property or invest in a new business.

This is a safe proposition except for the time when you can get almost 90% to 100% of the value of the property which can spell sure disaster even though you might think that a lack of expenditure on your part is the best deal.

Why this turns out to be a risk is because:
If you’re having problems with your tenants, you won’t be able to sell this property to a homeowner as your occupants have destroyed the property nor will you be able to sell it to an investor as you have taken too much as a loan (100%) compared to the property value.

Secondly, if you have taken some cash out, and now find that the rent you collect doesn’t meet the total amount of the loan you have taken you cannot sell not until you pay a certain amount of the new loan back. It’s an unrealistic expectation to think that cash flow will be consistent.

Thirdly, if you look at the interest charged between an 80% vs. 100% loan, you’ll notice that the latter will cost you much more in interest in the long run.

However, refinancing your property is not a bad idea, but you just have to ensure that your total debt is less than 80% of its value.

Multi unit investing can put you on the fast lane to becoming wealthy in the real estate business. Very simply, multi-units are commonly referred to as apartments or flats that provide housing for a group of tenants who pay a mortgage on the property they have bought, as well as pay for its maintenance as well. Let us look at five advantages of multi unit investing.

Greater Cash flow - Cash flow is significantly higher in a multi-family as the rental income is more. The more the units under one roof, the less the risk involved.

Economical to maintain - Having a six single-family houses in different areas rather than one six family unit under one roof means fixing six roofs, six lawns to maintain. In the six-family unit, tenants are located in a single place and there is only one roof and one lawn to maintain, which is very economical.

Competition is less - There is very minimal competition in this space and smart investors always have multi-units as part of their portfolios along with single units.

Easy and outsourced management - The increased cash flows will make it possible to hire management companies to manage the tenants.

Make huge profits at the time of selling - Multi-unit homes will always fetch more than single unit homes when the property is sold. The simple reason being the cost of an apartment complex is more than single-family homes, as are its chances of appreciation.

Though there are many more advantages, the aforementioned five are the biggest advantages of multi-units that can accelerate the wealth creation process for any real estate investor.

Over the last few years people have been experiencing tremendous value appreciation of their properties across the country. It has become a day-to-day event where we hear every other person narrate stories of their homes having appreciated in value. This is actually not true. Houses do not appreciate in value. It is the land, on which the house is built, that appreciates. If not maintained properly the value of the house will only go down. The only thing you can do is take steps that ensure the appreciation of the value of the house.

In a hot real estate market, investors will only look for land, irrespective of whether a house is built or not. The land is the investor’s desire and the house built on this property may not be used at all. Owning a piece of land in areas where real estate is booming is like owning gold. If you are an investor, it is important to understand how property appreciates.

Understanding appreciation will bring a whole new perspective to the deals you have been trying to make. A small two-bedroom apartment that might look unattractive for a deal might actually be on land which real estate considers hot, making it a goldmine.

A simple matter of supply and demand will make a land’s value appreciate. The most sought after cities in the country do not have land that can be used for further development. This will lead to the appreciation of value of a house even though it is built on a smaller piece of land. Hence, it is very essential for an investor to understand appreciation.

Flipping is a legal way of buying property and selling it as quickly as possible with a reasonable profit margin. There are some variants of flipping where it is illegal. Listed below are six legal and one illegal method of property flipping.

Buy, Fix and Flip
This method of flipping is time tested and involves buying a property that needs to be worked on. Then they sell it at a profit of $15 - $50k in a single deal depending on the market conditions.

Buy, Refinance & Lease/Option
This method works on the principle of leasing the property rather than selling it. The mortgage amount is covered by the lease or rent amount received from the buyers.

Buy & Flip “As Is”
This method is called so because of selling the property in the same condition as it was purchased without any repairs being completed done. This method will work in locales where the real estate market is hot.

Wholesale
The method of buying a property cheap and selling it (normally to an investor) with just a few thousand dollars as profit margin is known as Wholesale.

Pre-Construction
This method involves entering into a futures contract, while a property is under construction and then selling it after the construction is complete. There is a high risk factor of losing money in this method.

Scouting
Scouting is a method where one acts as an information gatherer to find hot property information and then sells that information to earn some commission.

Illegal Flipping
This method involves buying cheap property, making shoddy renovations and selling it at inflated prices. In such cases, the appraiser, investor and mortgage broker conspire with fake documents to close the deal. This method is illegal, and could lead to incarceration.

Here is a compilation of nine common characteristics of successful real estate investors.

Have a Plan and stick to It
Successful investors have a clear goal and a plan to reach that goal.

Join an Investors Network
Successful investors always have a mentor who has a wealth of information and valuable experience to share.

Be a thinking Investor
Successful investors conduct a periodic review of their portfolio and work hard to sell their loss-making property.

Protect the Assets
A successful investor will never take any investing decision that has the potential to wipe out all existing assets.

Be Ethical
Successful investors will formulate an ethical code to define what is fair and what is not.

Involve the Family
A successful investor will update key members of the family about the current business situation and will provide insight into the thought process behind a business decision.

Be Nice to Others
A successful investor understands that being nice to people goes a long way and is profitable for business.

Stay Updated and Informed
Successful investors keep a hold on their business by being informed of all the news that might have an impact on their business.

Successful Investors Pass on What They’ve Learned
As important as having a mentor, a successful investor should in turn be mentored and allowed to share his learning (and successes) with newcomers.