Is it Really Still a Man's World?

Time and time again, we have all heard it before, the old saying, 'It is a man's world.' But these days, you have to ask yourself the question, 'Is it really still only a man's world?' As the economy is evolving and technology is improving, so are the roles of women in the work force and the in business arena. Women are increasingly taking a more active role both on their careers and their finances. The number of women CEOs is consistently growing. Thirty percent of the CEOs in non-profit organizations are female and there is an increasing number of women CEOs in other fields including health care, legal services, finance, and real estate.



Strong females are taking a more dominant role in business, politics, and finances. The old saying of it the world belonging to men that we live in will be just a memory sooner than later. It is a common misconception and also an overused excuse that females are not as good with finances and/or investing as their male counterparts. For these reasons, women are often less confident with their skills in making investments and achieving financial freedom.

Fear is also a factor when considering making an investment or purchasing property.



This fear factor often deters women from wrestling with the investment animal. Women seem to shy away from the 'risk' of investing because they fear they will lose their money or become financially unstable.



In more recent years there has been a general progression of empowerment in regards to women. The roles of women in society are changing and so are their levels of confidence and fear. A heightened level of confidence and lower level of fear combined with other key ingredients such the major advances in technology, internet opportunities, and greater knowledge of the business and real estate industries is an inevitable recipe for success for the women who are willing to delve into these arenas.



More and more people are turning to real estate due to the instability of corporate America or just because they want a piece of the action. Real estate investing, as with any business venture always involves risk. This risk should not dishearten anyone looking to invest. Getting started is probably the most difficult task of all. Anyone hungry enough to jump into the real estate market should form a personal real estate strategy, which is based on how much time and money he/she is really willing to spend.



Doing your homework is key for any savvy investor. As mentioned before, the internet is an excellent resource for gaining knowledge on the real estate market. There are much more opportunities for women in real estate than there have ever been before.



Real estate investment clubs are available that offer women the education, networking opportunities, and contacts that are essential to achieving success. For example, the National Real Estate Investment Association (NREIA) has over forty thousand members and two hundred REIA chapters nationwide.



These clubs offer women the ability to put their finger on the pulse of the market and allows them to receive up to date information on not only the real estate market but also the law.



Other organizations that offer insight via the information super highway include MeetUp, where women share information with other women and Wisewomeninvestor which offers free financial information on a variety of topics and also hosts a blog talk radio show. Also, the National Association of Women Business Owners (NAWBO), which offers a general business perspective is a good resource.



Learning and working with other women provides a great benefit and advantage to females in the market.

In addition to acquiring knowledge through the internet, women can also learn do-it-yourself basics from local hardware stores that offer such courses. Knowing these basics can only be beneficial when seeking to purchase a home or property. Knowledge is power, and the more you know about housing essentials such as plumbing, construction, flooring, and electrical wiring, the better. Not to mention, that it would be more cost effective and could save you money in the long run.



Once a strategy is in place and knowledge and research about the market has been done, taking action is the next step. Women are naturally the more relationship oriented of the sexes. As nurturers, they have a tendency to establish relationships more easily than men. This can be used to their advantage, as building and maintaining relationships is critical whether it be personal or in business.



In order to move forward with taking action, you must begin by deciding what type of financing will be incorporated in the investment.



There are a variety of methods available to the investor. The traditional method of financing involves getting financed through banks, credit unions, or home mortgage companies. It also usually requires about ten percent of the purchase price as a down payment and a credit score of about six hundred eighty.



Due to the sub-prime housing dilemma we are currently experiencing, lenders are tightening their purse strings and are not as eager to lend money as they have been in the past. Because of this, many investors opt for more creative methods of financing.



For example, seller carry back initiates an OPM (other people's money) approach to financing. Here, the owner takes care of the financing and the seller agrees to carry out the note for your purchase. A typical scenario usually would be where the owner owns the property free and clear and no longer wants it.



The owner receives a monthly payment and usually has a fixed time limit, typically three to five years, where he/she expects payment in full. When opting for this type of financing, make sure that you can refinance your loan, as it is much easier to do this than receive a purchase loan.



Another creative method of financing is subject to existing financing. This involves buying the property with the understanding that the existing financing on this property remains in place. The title is transferred to the buyer but the loan stays in the seller's name. This type of financing is best if you do not wish to make an initial down payment. It is usually a short-term option, as many sellers don not necessarily feel comfortable having their name attached to the loan for a long period of time.



This method is also common with pre-foreclosure properties.



The seller second method requires that the seller provide a second mortgage, which is typically in the amount of the down payment. A buyer makes an offer to the seller, which is contingent to the loan amount that the buyer has qualified for. With this type of financing, the buyer does not have to use his/her own money in the transaction. When receiving financing this way, one should make sure that his/her loan allows the option to receive a second mortgage.



The lease option is yet another route an investor can take. With this process, there is little or no money down and it allows the buyer the option to buy the property in the future. Leasing a property allows the buyer to save money and establish financing in the meantime. An arrangement for a monthly lease payment can be made with the seller where this payment can go to the eventual purchase of the property.



After deciding which method of financing will be applied, a buyer should also remember to not overlook a variety of added costs.



Carrying costs are attached to owning a property. These include mortgages, property taxes, insurance, business license fees and taxes, maintenance costs (gardeners, property repair), vacancy expenses (for the times when the property is not being rented), and management costs (manager, tenant finder). Also, if a buyer is planning on fixing and flipping a property, other costs for rehabilitation and construction, as well as owner paid utilities as they pertain to rental properties should be taken into account.



Closing costs, also known as transaction costs, are added charges that affect both the buyer and the seller. Buyers should expect to pay anywhere between three to five percent of the purchase price, whereas sellers should expect to pay between seven to ten percent of the sale price. Closing costs also include, mortgage, title insurance policies, homeowner's insurance policies, realtor services, mortgage brokers, attorneys, inspectors, and escrow and closing agents.



Another added cost is a type of 'special' tax.



This transfer tax depends on the jurisdiction of the particular city or county of the property and the sale price of the property. It is usually in the amount of one percent of the total sale price.



The capital gains tax is also an extra cost that needs to be taken under consideration. This tax is at the rate of fifteen percent and is applied when a seller sells a property for more money than the total amount he/she bought it for and invested in it. Researching the section 1031 of the Internal Revenue Code for feasibility and guidelines in regards to the deferring of capital gains taxes would be beneficial action to take.



Commissions also play a role in the extra costs related to the sale or purchase of property. Commission costs, also know as origination fees, are usually between five and six percent and are divided between the realtors representing the buyer and the seller. The buyer generally pays the smaller commission to their own mortgage broker at about one percent of the purchase price. If the buyer decides to fix and flip the house, he/she can plan to subtract about six percent of the selling price for realtor commissions.



After the homework has been done and the financing has been established, the real estate investor is ready to enter the relationship. Establishing a relationship with one's investment is of the utmost importance. Selectivity is key. Just as one is careful when choosing a significant other, a buyer should also be just as careful when making an investment.



Making an investment is a big decision, and an investor needs to be clear on just how much time, energy, money he/she is willing to spend.



Getting involved in an investment relationship is just like getting involved in any other type of relationship, it requires much effort and severe commitment.