Want To Invest In Real Estate? It Pays To Be Investor Wise

Are you interested in real estate investing? Do you know the steps it takes to purchase

a real estate investment property? Can you figure out the Maximum Allowable Cash Offer (MAO) on a real estate investment deal? Continue reading to become investor wise and be on your way to creating wealth through purchasing real estate.

The MAO is the most money you should ever offer for a property, even if your offer is not accepted. Knowing terms like MAO is important for ensuring you make the best offers and create the most profitable deals in any real estate transaction. MAO is the formula used when a buyer wants to rehab or wholesale properties to other end buyers. As a rule, you should never exceed MAO so you do not overpay for a property.

Being investor wise means understanding pertinent real estate terms and processes so that you can make the most profit on every deal. Take for instance the term, flipping. Flipping a property occurs when an investor takes a fixer-upper property and renovates the home in order to increase the value of the property so the investor can realize a return on his/her investment.

Investors who flip rehabbed properties and/or wholesale properties typically use the MAO formula when considering how to price offers on properties to get the best return. Its important for a buyer to understand how the MAO formula is calculated in order to be prepared to offer an appropriate price for a property they want, or risk losing it to another bidder; or even worse losing money on the deal because he/she overpaid for the home.

The MAO Formula in Action

Real estate investment companies can lead the way to successful real estate transactions. These professionals are equipped to help you evaluate a property you plan to flip as well as determine its market value using the After Repair Value (ARV). The ARV is the fair market value of a home once repairs are complete. ARV is an essential component in calculating MAO.

ARV x .70 cost of repairs = MAO

For example, lets say the ARV of a home is $200K. This amount is then multiplied by 70%, to give us 140K. Next you must get an estimate of the repairs needed for the home. Keep in mind the quality of the repairs may impact your ARV. If your estimate of repairs turns out to be 20K then the most you would want to offer to pay for the home would be 120K.

The good thing is aknowledgeable real estate investment professional can help you structure these deals and realize the strong potential profits that real estate investing can generate.

Real Estate Investment Professionals Save You Time and Money

Becoming investor wise is the key to building wealth through real estate. Real estate investment companies with experience and expertise are instrumental in helping people accomplish their investment goals. With their guidance, buyers can use MAO and other acquisition methods to purchasebank owned properties (know as REOs), wholesale fixer-upper properties, turn-key cash flowing properties, or participate in private lending programs.

Additional expertise that a real estate investment company can provide is:

Renovation of fixer-uppers

Identifying good deals on foreclosures and cash flow properties

Managing cash flow rental properties

Assisting with short sales

With so many avenues to explore, its good to seek the advice of a real estate investment company that can provide a turn-key real estate investing process to help you accomplish your investment

by: LopezBiden

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