Real Estate Finance Modelling Balance your Cash Flow

Real estate modelling with respect to Finance is estimating the cash flow for the present value in future aspect. In simple terms if you are willing to invest on an apartment today how much do expect the future returns on your investment made today. This depends on various aspects.

For Example – If you have bought the apartment in construction stage where initial work is yet to be started, then the growth you are expecting is slow. If you invest on a property with 97% of construction is completed and you are ready to give out for lease. In second case there possibility of rise is more, as you are earning from your investment.

The smart thing every individual who is investing in real estate must do is predict possible value on the property to get a good gain. Mastering on real estate investment for handsome returns you have to work on real estate finance modelling and so start creating your own cash flow model.

Analyse your assets and liabilities

 Here I am not taking with respect to real estate business, am talking about real estate as an asset to an average earning individual. I saw many people falling prey to this real estate business as it draws the attention of a common man to become rich. Many Real Estate companies, advertising campaigns, real estate agents boast the same thing into our mind and we get nailed. Who doesn’t want to have a secure financial life and dreams being rich? I am no exception to this dream, as I had the same zeal and worked very to taste success in this field.

Before going forward, I want every individual to answer this answer this question. Do you have a clear idea on your balance sheet of cash flow?

Investing smartly is important to convert a property or investment to assets than liability. Real Estate has expanded in roots in every country, yet the subject is young for many people. It is not taught in any universities nor do we have special coaching classes. One can understand about real estate finance modelling is through self-research, exploration and understanding.

Real estate customs convections are different from place to place and company to company. However the main aspects of real estate one should master before investing on a property are debt vs. equity, types of spread, risk and return matrices.

Grow your assets
Investing in real estate is not wrong, but before that analyse your monthly expenditure.  If your monthly expenditure is more than returns, then real estate could never bear the fruits you are expecting. A wise decision is to make investment in a property which assures more returns other than the principle investment amount. 

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The Do’s and Don’ts in Real Estate Business

With 20 years of experience in real estate, I have seen many people climbing the ladder of success and falling to ashes with in no time.  The lucrative business has attracted many people, but not everyone can make the mark. One must be very smart, knowledgeable, well acquainted and constantly have an eye on the market. Real estate business is associated with different risks other than financial risk. Real estate business has a controlled market; it is not a broad spectrum like the other business areas. Mostly cash flow gets restricted within the same place based on market value. Here are few tips from my personal experience that can help you out to get a hold on the business.

Unlike the others, I am not going to start with, what you have to do. I believe that-one has to know, what he/she is not supposed to do before setting up the business.

The Don’ts
• Unlike any business, real estate is something where you have to be prepared to invest at any point of time. If you are thinking that this business gives you a good return –then let me tell you that there is no guarantee in the business. If you do not have the investment, then do not go for it.
• Do not set up a company until you have acquired licence for it. An unauthorised business deal is considered as offence that can completely damage your career.
• Never invest on anything without doing the ground work. If you have no idea on the property you are investing on, then selling it will be very difficult.
• Be prepared to go that extra mile to get your work done. Never set up a time for meeting a client as per your convenience, it should always be clients call as you need the business.
• Never take entire burden on your head, distribute the work accordingly by hiring staff based on the requirement.
• Do not hire/appoint a real estate agent without any contractor agreement. The agreement should be having the policies and duty codes which agent has to obey for the period he/she is serving you.
• Never skip on professional help, always have a point of contact. Consult someone with good knowledge on real estate market and also a lawyer to deal with contract agreements, agenda and other important licences.
• Do not assign any work to the agents before giving proper training. Try to eliminate the errors in the process before actually approaching the client.

The Do’s
• In my personal view, before starting any business one must have a clear cut business plan which will help the company to establish in step wise manner.
• Make sure you have enough savings to start your business, as it is not only setting up a company but lot more goes into it.
• Plan your commission structure, referral fee, advertising expenses and other fee accordingly.
• Keep your marketing department open to various challenges. Set up a new plan every day to attract prospective clients.
• Training is mandatory whenever required to keep the agents updated with new market developments.
• Always list your current clients, and stay in touch with them. It is important to have a professional environment with client as their testimony could help your company grow.
•Make sure you revise your business plans whenever necessary. What worked for you the previous year might now work in the present market.

These are few tips for someone who would want to start up their own real estate venture. However, the no business can ever be learnt without experiencing it. 

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Why Invest in Real Estate?

Over the years of mentoring, sharing my experiences, providing guidance on trade and commerce, I often come across various questions based on the topics of business and investments. Both the terms have its own share of risk and return. Business and investments are two terms which run parallel to each other. I believe in smart and reliable investment. Compared to any other venture, I personally consider real estate has its own risk/return but with low liquidity.

Here, I am going to share few tips that might help to plan a smart strategy on how to get good return in real estate investments.

Three questions one should ask before investing in real estate – Why, where and when?

The first question – Why 

Every one of us wants to have secure financial status. The very purpose of making handsome money by working hard/smart is to invest in something that could give good returns. So question yourself and look into the market for the options that can help you to get these expected returns. You will be flooded with many options; considering one among the best is real estate.
If you decide cautiously and sensibly, real estate investments are likely to give secure returns in long run. Looking at the market, in past few years there has been a tremendous rise in property values. Even at times when the market did not do well, it has gained its momentum in course of time that certainly makes real estate a rewarding asset.

The second question – where

Property investments are something which should be decided without any proper understanding. So if your first question –why is satisfied, then you are ready to find your way. Finding a property worth investing is the trickiest aspect. It’s not about the economic uncertainty property in long run, but the knack of analysing your investment. Finding out the right point of investment, is where the risk is associated with. Compared to other investment areas like stock markets- purchasing shares, investing in gold, silver or other equally expensive metal might not provide good profits, unlike real estate. Real price do not fluctuate like the other investment options, so you in a right path.
Do not jump into conclusions; study the property completely before you invest. There might be possible risk, where the property might not worth the value that has been proposed to you.  Take an opinion of a real estate broker, friend who has purchased a property recently or a person who have idea about the land/property.

The third question – when 

Once you are prepared with the above two questions, the third is pretty easy. Being the most tangible investment, the investor undoubtedly will have a peace of mind after the right choice is made. Investors must have the capability to weigh the long term potential on the investment made. Unlike stocks or other goods where money has to be made at a time, real estate gives you exception to pay in regular intervals with the help of financial firms. Loans are convenient, plan according to your present and future earnings, paying capacity to avoid pitfalls. Owning a property is not a dream anymore with real estate.

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Women in Politics – Grounded and Raised to Hall of Fame

Who says that politics is a man’s subject, ask me I have list of woman who can debate on politics and provide insights which no one would have ever imagined. My wife, one among my list has got a great understanding on various political issues. One of my favourite pastime is discussing with her about political views of various parties, their agendas, the work they have done etc. Sometimes her illustration on the subject surprises me. She has nailed the debate many times with valid points, I never imagined about. Remembering the same, here are the influential people I believe have turned the political history upside down.

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