Analyzing Short Sale Investments
The introductory pages at this little website (such as the home page) discuss the short sale discount, including why it exists and which sorts of real estate investors can exploit the discount. The discount, however, doesn't automatically make for a good investment. You need to look carefully at the financial effects of buying a short sale property to get a really excellent deal.
Accordingly, I describe two simple tools (see first two links below) that you can use to assess the finances of a vacation home short sale purchase and to assess the finances of a rental property short sale investment.
I also, following those discussions, provide a "big picture" overview of how the discounts investors probably receive or should receive on short sale and foreclosure properties tie together with the cap rates and investment rate of returns these investors should, logically, receive.
- Analyzing Vacation Home Investments You can make much better decisions about buying vacation properties if you employ a simple formula, which I describe on this page...
- Analyzing Rental Property Investments If you're considering acquiring rental property in a short sale transaction, you can and should use income capitalization rates to gauge the investment's potential profitability and the benefit of using financial leverage...
- Short Sale Discounts, Cap Rates and Your Investing If you understand the logic of income capitalization rates and overall project rates of return, you can greatly increase the odds that you'll receive an appropriate shortsale or foreclosure "purchase" discount--and thereby earn an attractive return on your investments...
Note: Those readers who want to more precisely analyze their real estate investments may be interested in knowing that my "Real Estate Tax Loopholes and Secrets" e-book, available for purchase and immediate download, describes how to use more sophisticated investment analysis approaches, including calculating internal rates of returns and net present value measurements, for short sale investments and foreclosure properties. (More info...)
Additional Information for Shortsale Investors
If you want additional information about how tax laws work for a short sale investment or for an individual running a business based on short sale investing, you may also be interested in one of my downloadable e-books shown below:
Tax laws provide active real estate investors with giant tax planning loopholes. A little upfront planning on your part could save you thousands a year...Read More
One of the most powerful tactics for saving small business taxes is maximizing your deductions. You can literally save thousands in taxes each year.Read More
Using an S corp for your real estate investing? To maximize savings, you need to minimize the salary paid to shareholders. But this decision is tricky.Read More