Real Estate Investing is Just Like Weight Loss...

It takes a lot of effort on your part (but a guru or two can help)

It amazes me how many people get started in real estate investing, only to fail when the going gets tough. As soon as someone discovers they can't get rich in a week or two, they are on to the next “hidden guru” secret. It's the same as weight loss - everyone talks about it, many try it, but few succeed. There are thousands of “get rich quick” and “get slim quick” gimmicks. No wonder both the real estate investing information and weight loss products industries make BILLIONS!

Weight loss isn't easy… ask anyone who has tried it. However, the concept of weight loss is very basic - burn more calories than you ingest and your body will react accordingly. Unless you have a medical disorder, this formula works for just about anyone. Simple as it may be, the formula is HARD, meaning it takes a lot of DISCIPLINE AND HARD WORK. So, the weight loss industry has offered us thousands of ways to make it easier. Many of these solutions do work, but they only work if you put forth effort.

Now, let's start with the premise you don't need any of these “solutions” to make real estate OR weight loss work for you. You can eat less calories, go walking or jogging every day and you will lose weight. But, having knowledge of the caloric content of different foods is relevant. Also, for many people, knowing the carbohydrate content is relevant. Having the advice of a physician, dietician and personal trainer will help you prevent injuries and maximum your effort.

Same principle applies to real estate - you can go out and make hundreds of offers to motivated sellers and find a good deal. However, having information about how to solve the seller's needs and construct an offer will help. Having an attorney, real estate agent or “guru” to assist you with constructing the offer and the paperwork will make it easier. Having advice from other people who have already done hundreds of deals will also make it easier for you to learn from other people's success (and failures). However, whether it's weight loss or real estate, the bottom line is not just knowing, but DOING. You can't blame the diet if you don't stick to it. Many people have successfully lost weight using the ZONE, WEIGHT WATCHERS, ATKINS and other similar plans. Many people have succeeded with the famous “guru” plans, but many have failed, likely because they didn't give the required effort, NOT because the plan isn't effective.

By: William Bronchick, Esq.

For more information visit: www.legalwiz.com

Alarming rise in credit to real estate sector

If the Economic Survey figures are anything to go by, lending to sensitive sectors—with high chances of boom going bust—is zooming. The high-risk real estate sector has witnessed the maximum rise in loan disbursals among all sectors of economy—at 90 per cent—from the Indian banks till October last year, the Survey has revealed.

In view of the very rapid growth of credit to the real estate sector, the RBI has already tightened the prudential norm by enhancing the risk weight on banks’ exposure to the real estate sector. As on October 2005, the banks lent Rs 20,148 crore to builders and private developers as compared to Rs 8,240 crore lent in the same period of fiscal 2004.

The banks gave another Rs 153,267 crore as home loans till October 2005. The RBI said as of March 2005, 62.9 per cent of SCBs lending to sensitive sectors consisted of real estate at Rs 24,691 crore. The private banks lent another 15,125 crore to the real estate sector.

Analysts say that real estate sector witnesses high volatility due to entry of speculators in the industry. As of now, real estate prices have shot up to unrealistic levels as many speculators have entered the market again. On the other hand, gross bank credit has showed a rise of 39.2 per cent from October 2004 till October 2005. Credit to agriculture showed a rise of 39.1 per cent and SSI 17.3 per cent.

PRESSURE ON RATES: The survey has cautioned about the upward pressure on interest rates. Though happy with the 17 per cent increase in credit offtake and the resultant economic boom, the Survey asked the government to maintain a check on interest rates, saying the high demand coupled with uncertain prospect of inflation and surging global oil prices could exert pressure on them.Banks have already started hiking interest rates on home loans. Many PSU banks are waiting for the Budget before taking a view on rate hike.

The document said uncertainty regarding inflation due to volatile global oil prices and continued firming up of global interest rates beyond a point, poses the risk of dampening the domestic investment boom. There may be a need for further capitalisation of banks and for developing strict management techniques and methods of prudent evaluation of investment proposals, the survey said.

Source: http://www.indianexpress.com/