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27 Jun The Capitalization Approach to Income Property Valuation as Interest Rates Rise

Dan Harkey, at DanHarkey.com writes great articles about real estate on his website. You can read more articles by visiting his website. In this article, he discusses "The Capitalization Approach to Income Property Valuation as Interest Rates Rise."   Definition of capitalization of earnings: The capitalization approach estimates the fair value of an asset such as income-producing real estate by calculating the net present value (NPV) of expected future net profits or net cash flow, referred to as Net Operating Income. The capitalization of earnings is determined by taking the property’s projected annual net income and dividing it by the market capitalization rate (Cap...

08 Jun How ADUs Can Expand Your Real Estate Investment Portfolio

Rental properties can be lucrative for property investors but purchasing properties in today's competitive market is still difficult. With property prices up nearly 20% over last spring in some areas, bidding wars are still common, and months of effort involved in just a single property purchase, it is no surprise some investors are waiting for the temperatures to cool.    But investing in a new rental property is not the only way to add to your real estate investment portfolio. It is possible to add on to existing properties in a way that will drive prices higher and add additional income streams. Accessory dwelling...

06 Jun Property Insurance Coverages, Part I, An Overview

Dan Harkey, at DanHarkey.com writes great articles about real estate on his website. You can read more articles by visiting his website. In this article, he discusses "Property Insurance Coverages, Part I, An Overview"   This overview of property insurance has relevance to property owners, real estate agents & brokers, mortgage agents & lenders, insurance agents & brokers, escrow officers, and title insurers. This article is broken down into part I and part II. Part I pertains to insurance concepts in general. Part II pertains to insurance in relation toreal estate transactions.   What is property insurance? Insurance is a form of protection whereby insurance companies...

17 May Market Value vs. Appraised Value They Are Not the Same!

Dan Harkey, at DanHarkey.com writes great articles about real estate on his website. You can read more articles by visiting his website. In this article, he discusses "Market Value vs. Appraised Value They Are Not the Same!"   There are multiple methods for determining a property’s value. There are also numerous definitions of value conclusions depending on the purpose of the appraisal assignment and the intended use. But original purpose and actual use may be different, as noted in appraisal examples # 1 and # 2 below.   Realtor- Market Value: The realtor’s job is to develop a market value estimate to sell the property on the open market. The...

08 Apr Purchasing Investment Properties with Entities

When considering borrowing money to finance an investment property, many, especially newer investors, view the process from a personal perspective. They expect to be taking out a traditional loan.    Seasoned investors, however, understand that sometimes borrowing through an entity is a better choice than co-mingling personal finances with investment activities. This is particularly true for those who understand the benefits and are willing to handle the extra legwork and expenses that setting up an entity like an LLC can entail – and whether the circumstances are best for personal objectives.    Borrowing though an entity for investment purposes isn't right for everyone, but...

08 Mar Why the Real Estate Market is the Best It’s Ever Been

If you are planning to purchase an investment property or purchase a home, the news is full of dire updates, for buyers, on the real estate market. Real estate prices are through the roof and those with minimal liquid assets, like cash flow tied up in existing investment properties, are facing challenges to fund new properties.    Many areas of the country are prohibitively expensive, including in California, with prices rising at the fastest pace in decades. There are, however, deals to be had, especially for savvy investors with a game plan in place.    Here is what you need to know about the...

08 Feb Explaining CA Senate Bill SB9

In California, Senate Bill SB9 went into effect on January 1st, 2022. For those who rent property from a landlord, require no additional living space beyond a standard home, or own a condo in larger building, this senate bill is unlikely to affect life in any notable way. However, for homeowners and real estate investors eager to expand the housing space on their properties, this new law may very well be a game changer.   Much like the 2020 bill that allowed for accessory dwelling units, or ADUs, to be built on a single-family lot, this new piece of legislation allows for...

28 Dec Liens and Encumbrances Affecting Real Property Ownership

Dan Harkey, at DanHarkey.com writes great articles about real estate on his website. You can read more articles by visiting his website. In this article, he discusses "Liens and Encumbrances Affecting Real Property Ownership"   What is a Lien? A lien is a legal right or claim against property, referred to as a security interest in the same real property. The lien is given or conveyed to a creditor to possess and hold as consideration for a loan.   A creditor/lender is a person or company who willingly makes a loan secured by the security interest in the property. The creditor/lender has a charging interest...

27 Sep Private Money Real Estate Loans: An Overview of Good Reasons

Dan Harkey, at DanHarkey.com writes great articles about real estate on his website. You can read more articles by visiting his website. In this article, he discusses "Private Money Real Estate Loans"   A subset of the real estate lending business exists where the loans are funded by private party investors rather than banks or other institutional lenders. This is referred to as bridge lending, private party lending, or hard money lending. The purpose of these privately funded loans is to serve as a short-term or intermediate term borrowing solution for problematic borrowers and/or property related deficiencies.  Borrowers who experience problems such...

27 Sep An Overview of Private Money Lending & Trust Deed Investments

Dan Harkey, at DanHarkey.com writes great articles about real estate on his website. You can read more articles by visiting his website. In this article, he discusses "An Overview of Private Money Lending & Trust Deed Investments"   Most Investors understand the ownership process of diamonds, gold, silver, other precious metals, collectibles such as rare coins & artifacts, Faberge & Imperial Eggs, specialty & collectible automobiles, and paintings. Most material items may be possessed physically or by operation of law.  By operation of law, the ownership of the asset will be evidenced an ownership certificate. Examples include an automobile pink slip issued by...