From about the mid-1990s up until the housing bubble burst, Arizona’s economy was driven primarily by the real estate industry. During those years, high population growth and lax credit standards resulted in a booming housing market. This boom created a need for more real estate-related jobs (real estate agents, construction companies, title/escrow agents, etc). This also became an attractive market for property investment companies. These investors flooded the market buying up property left and right. This ultimately led to inflated home prices, which played a big role in the bust that started in late 2006.

Fast forward to today…It is late 2010 and over the past 4 years the effects of the housing collapse are evident. The market has definitely changed, but those real estate investors (who are not shell shocked) are seeing great opportunity. It is time to shift the mind set of the investor. Investing no longer can be based solely on speculation. An investment opportunity needs to produce cash flow, which provides a monthly passive income for the investor. There are other advantages; however this article will focus on the impact property investment companies have on the cash flow investor.

The first step is to understand the different types of property investment companies. There are 3 main categories; property wholesalers, rehab specialists, and private equity funds. It is important to understand the services these companies provide and how they impact a cash flow investor’s profitability.

Property Investment Companies: Property Wholesalers

With the increasing supply of distressed real estate, there have been a number of property wholesale companies entering the Arizona market. These property investment companies purchase property at a discount, then wholesale (or flip) the properties to an investor at a higher price. Typically, wholesale companies are purchasing short sales, bank-owned (REO) properties, or properties at trustee sales. Anywhere they can buy at the lowest possible price and resell for the highest possible profit. Generally, the properties being sold by wholesale companies are ‘as is’. This means that they will not be doing any improvements to the property, which could be a disadvantage for the buyer.

Impact on a cash flow investor: There can be advantages and disadvantages to working with a property wholesale company. Some of the advantages could include acquiring a property at a price below market value, since many companies try to purchase at 50 or 60 cents on the dollar and sell for 80 cents. Also, property wholesalers are typically dealing with properties under $150,000, so cash flow investors are investing a smaller amount of capital with the potential for higher returns. A disadvantage to working with a property wholesaler is not knowing exactly what you are getting, in terms a property’s condition. As mentioned earlier, the properties are generally sold ‘as is’. This could mean more capital is needed over and above the acquisition cost. Without having a quality estimate of that additional cost, it could definitely impact the cash flow investor’s return.

Property Investment Companies: Rehab Specialists

Rehab specialists, more commonly known as fix and flippers, are property investment companies that purchase property with the intent to improve and sell for a profit. As with property wholesalers, the Arizona real estate market has seen an increase in rehab specialists. The distressed property environment is fueling this growth. Companies are able to purchase property at a discount, rehab, and sell to buyers looking for a move-in ready home. It is important to review the quality of the rehab work, as there are good and bad rehab specialists. If the work is not done well, then more problems can arise for the property buyer.

Impact on a cash flow investor: There are several advantages to using a rehab specialist; however there are also some disadvantages. A big advantage is that a rehab specialist can provide a cash flow investor with a turnkey investment property that is ready for a tenant and has the potential of quickly generating monthly income. These properties may require a bit more capital at acquisition and priced a bit closer to the actual market value; however shouldn’t have additional rehab costs. One disadvantage is if the rehab specialist did not do quality work, which could require additional expense to maintain the property. It is important to always ask for references. A reputable rehab specialist will have a portfolio of completed projects they can provide to investors.

Property Investment Companies: Private Equity Funds

Private equity funds are quite a bit different from the other 2 types of property investment companies. They build capital from many investors with the goal of acquiring property and returning a monthly cash flow over a set period of time. A private equity fund is approved and regulated by the Security and Exchange Commission (SEC) and each individual fund sets its own investment terms. They vary based on property acquisition, return percentage, and length of the investment. The fund is controlled by a group of fund managers, typically the principals of the company issuing the fund, and not by the individual investors. There have been some past challenges with private equity funds stemming from misuse of funds, improper capital allocation, and poor asset management.

Impact on a cash flow investor: Private equity funds can offer advantages to cash flow investors who are only concerned with the return and do not want to deal with acquiring the property. There is typically a minimum capital investment with these funds; however in most cases it is cheaper than purchasing an actual property. With a collaboration of capital, a fund has the ability to purchase larger pieces of real estate with the potential for higher returns and develop a larger portfolio of property providing diversification to the investment. There are also some disadvantages to private equity funds. A cash flow investor would have no control of how the fund is managed or what type of property the fund is acquiring. An investor will get a prospectus that outlines the terms of the fund. Also, it is important to research the principals involved and make sure the fund has filed the appropriate SEC documents.

Property investment companies provide many great services for cash flow investors. It is important to find the right company that fits in with your investment strategy and how their services can increase your profitability. Clear Vision Investment Group is a resource for cash flow investors. Get our recommendations on what types of property investment companies are right for you. Also, learn how Clear Vision Investment Group can help you find profitable cash flow opportunities.

The question of deciding which vehicle to buy and how to pay for it are to a degree linked together, but it is a good guide to first of all decide what type of vehicle you want to buy or lease, before deciding how to pay for it.

There are many reasons for this, but perhaps the most obvious is that deciding what sort of vehicle or car is best viewed will then lead on to clarifying with you buy a new or a used model, and whether or not you decide to finance it through the dealer or some other financial institution.

The decision about what type of car to buy is also linked to whether or not you want to lease the vehicle. Many people do not seriously consider leasing a vehicle because they consider it to be something more suited for the corporate market, whereas in fact many auto manufacturers go to great lengths to make leasing available to private individuals.

Starting off by choosing a vehicle can involve many different factors. It is a good idea to have some idea of what your priorities are for the use of the car, and some of these will be self-evident. Certain people will more naturally gravitate to a car or vehicle that is necessary for family and children, other people gravitate towards a more sporty or faster type of vehicle.

Depending on where you live, there will be certain models of car available that are country specific, and there are also likely to be certain finance deals that are also country specific relating to interest rates or down payments.

It is a good port of call to first will check out the main manufacturer’s website for the country in which you live, and see what vehicles are available in that country and if any special deals are on offer or likely to be in the near future.

Once you have decided what sort of vehicle is most appropriate, it is a good idea to check out the list price for that vehicle, often referred to as the manufacturer’s recommended retail price or similar.

It is important to know that auto dealers have a significant amount of room to negotiate on the list price, as well as having flexibility on the size of the down payment and the rate of interest that is being charged.

If you decide that you would really like a new car, then it is well worth considering the option of leasing it. While there are many conditions inherent in a lease that need checking, the principle of leasing a vehicle is fairly similar in many ways to that of renting something.

You would effectively pay a down payment on the car, agree a fixed period of the lease which can be anything from 24 to 60 months, and agree certain other costs applicable to the lease. For many people leasing a vehicle is a relatively cheaper way of buying or having a new car when they would not be able to afford to buy it outright.