What Does ("PID") Mean in The Real Estate Industry?

A Public Improvement District (“PID”) is a financing tool created by the Public Improvement District Assessment Act as found in Chapter 372 of the Texas Local Government Code. The PID enables any city to levy and collect special assessments on property that is within the city or within the city’s Extraterritorial Jurisdiction (“ETJ”). A county may also form a PID,but must obtain approval from a city if the proposed PID is within the city’s ETJ. The PID establishes a mechanism to finance improvement projects through the issuance of bonds secured by special assessments levied on all benefited properties. Because PID bonds can be used to reimburse the developer for eligible infrastructure early in the development process, often before the closing of the first home.

Public Improvements Eligible for PID Financing are; Acquisition of Right of Ways, Art, Creation of pedestrian malls, Erection of foundations, Landscaping and other aesthetics, Library, Mass transit, Parks & Recreational or Cultural Facilities, Parking, Street and sidewalk. Supplemental safety services for the improvement of the district, including public safety and security services. Supplemental business-related services for the improvement of the district. Water, wastewater, health and sanitation or drainage.

Benefits of a PID

A PID may be established early in the development process allowing the developer to be a reimbursed upon completion of the public infrastructure. Furthermore, unlike a Municipal Utility District (“MUD”), Water Control and Improvement District (“WCID”), or Fresh Water District (“FWSD”), PIDs do not require TCEQ approval, and are governed by the governing body of the city or county, thereby alleviating concerns regarding board turnover and the integrity of the board. If the city chooses to annex property that is within the boundaries of a PID, the city is not forced to pay off the assessments, and the assessments do not affect the city’s debt capacity or rating.

Buying Advertising Space – How Much Should I Pay?

Banners help increase traffic and brand awareness. The problem lies with knowing how much to pay. Unfortunately, there's no real consensus or uniform guidelines to make things easy. This article shows some factors to consider when determining the cost of placing your Banner Ad.

Compare Similar Websites

First you need to determine where you wish to advertise. Find websites that your target audience is visiting. Determine how targeted each website is and contact the appropriate ones for their advertising rates. Ask for demographics of their audience and their analytics. Most importantly you want to know their unique visitor count. Their demographics will confirm who's visiting their site (for example middle aged men interested in fitness).

As you receive standard banner rates from your chosen websites, assess and compare the pricing based on their unique visitor count and relevancy towards targeted audience. You should start to see the range being charged, enabling you to determine which Ad Space is reasonable and which is overpriced. You can also find, compare and buy Ad Space at a Banner Auction website. To start off, watch some of the auctions taking place with the "watch this item" feature.

Banner Size, Positioning and other factors

Also consider these factors when purchasing Banner Advertising:

· Generally, the larger the banner size, the more it will cost. What sizes are on offer?
· Is the websites' target audience strongly related to yours?
· How many advertisements are on each page? The more ads per page, the less it should cost.
· What positions are on offer? Will your ad appear on the side, top or bottom? Positions above the fold (appearing on the page without requiring the viewer to scroll down) are ideal and generally cost more.
· Is there a sliding-scale ad rate for the website?
· What rotation system is used? Is it ad hoc or does the sites' program automatically profile visitors and show the most appropriate banner? The more targeted the system, the higher the cost.

CPM, PPC and Flat Rate Pricing

CPM (cost per thousand impressions) is a charge for each thousand times an ad is viewed (or served) whereas PPC (pay per click) is charged on each actual click-through, not just viewing of the ad. On a given site, the charge per impression should be less than the price per click-through (PPC).

Most direct banner sales are made on a flat price basis, not PPC or CPM. This is because such sites generally do not attract copious amounts of traffic. Sites that attract a lot of traffic generally sell bulk ad spots using automated systems of an ad network such as Goolge AdSense, Yahoo, AdBrite, CPXInteractive and MSN. By charging PPC, websites' revenue is too dependent on the quality of your ad. Therefore, it makes more sense for websites with limited traffic to charge a flat rate for a specified period of time sometimes called the "Contract Term".

Flat rate pricing benefits both the advertiser and the publisher alike. Budgets can escalate quickly using PPC or CPM since you need to practice and experiment to get viewers that are highly targeted and qualified. Paying for a period of time enables you to budget correctly by knowing expenses upfront and gives you exposure no matter how many views or clicks are generated.

Negotiate

When Buying Advertising Space , you may come across websites or blogs with no advertising. This is a great opportunity to approach the site owner and possibly negotiate a trial advertising period. They may not even be aware of being able to sell advertising on their website so you can snap up some great deals this way.

While approaching websites directly, try to negotiate the advertising rates. Many are aware that advertisers will attempt to bargain with them and accordingly leave room for movement. Do not enter into a long term contract the first time you deal with a publishing website. Try the website for 30 days, leaving you the option of not renewing your contract if you are unhappy with the performance. Remember however that Banner Advertising does not generally provide a surge of sales. The return on investment is earned over time through repeat traffic. For this reason, you need a quality landing page, a neat website and smart permission marketing practices.

Many e-commerce websites find themselves struggling to achieve traffic levels due to the high competition. Banner Advertising offers a cost effective means of gaining targeted and qualified visitors to your website. Traditional media advertising costs are high, but that's no reason to give up. Take advantage of the opportunities offered by online advertising, but do it wisely.

Investing For Cash Flow and Financial Independence

Financial Planners will always tell you to diversify. That’s a good idea except that diversification is usually exercised by most people solely through the purchase of many different mutual funds. It is still investing in mutual funds or the stock market. There are ways to obtain wealth (and financial security) that you may not currently be exploring, ways that go beyond buying mutual funds.

Instead of planning for retirement, plan to reach Financial Independence instead. True Financial Independence is an easily measurable known target, and is a goal that can actually be reached within a short period of time. How? Through passive income. Generate positive cash flow from hard assets such as real estate income property. Rental income is passive income for the most part, especially if you have a solid property manager taking care of the details.

The principles of creating a long-term, on-going cash flow can be applied to most kinds of real estate investments. Mobile home lots, apartments, garage/storage units, and houses all make excellent income producing assets. Houses, in particular, low-end houses, make an excellent vehicle for creating long-term cash flow for a multitude of reasons.

While appreciation is often the most significant form of profit for real estate investors, investing for cash flow is easier to determine and with lower risk. So how do you achieve positive cash flow ethically in the real world? You need to buy in the rare market where high capitalization rates (15%+) are the norm. Such markets are usually depressed like Rochester or Memphis and have a large pool of renters. The reason tenants are willing to pay more to rent than they would have to pay to own in such markets is that they believe property values are falling or level in which case not owning is a good idea in spite of the high rent. Positive cash flow is so rare and so desirable that it eventually attracts out-of-town investors. Their coming into Rochester or Memphis or wherever causes property values to climb so that high cap rates are no longer available.

There are the three primary ways that an investor makes money in real estate: 1. from cash flow, 2. property appreciation and 3. paying down of the mortgage thereby increasing their cash flow and equity. Only if you buy on a bargain basis can you get positive cash flow from a rental property.

Why low-end houses make the ideal Cash-Flow vehicle

First, houses are abundant. Every city, town, and neighborhood has houses. Houses are probably the easiest to buy because they are the most common. Houses are also probably the easiest to buy at a discount, since there are so many sellers who own them in some sort of crisis ownership position: Vacancy, disrepairs, judgments/liens, back taxes, etc.

Houses are the easiest to manage, with the possible exception of storage/garage unit rentals, since these are occupied with stuff and not people, thereby making evictions easy. Well-maintained houses will often keep tenants for a 3-5 year cycle, sometimes longer. Most of the other vehicles have shorter-term occupancy.

Houses are by far the easiest to sell because of the naturally large demand for places for people to live. In most cases the property will sell without holding paper, but many smart investors will sell their houses on some sort of payment contract and be able to charge a 10-15% price premium to the buyer without using a Realtor.

The so-called low-end house can be very desirable from an investor’s standpoint. First, lower-end housing doesn’t mean becoming a slum lord. It means basic, starter homes that are located in good, but not necessarily great locations. These marginal areas typically are more of a buyer’s market, thereby, tilting the negotiation in favor of a hard-cash buyer or a buyer seeking owner financing. Actually, owner financing is easier, much easier in these slightly marginal areas.

Next, these lower level houses can frequently be purchased at various distress auction (tax, foreclosure, estate) sales. In many areas of the US, these houses are bought for prices anywhere from as low as $5,000 to $25,000, without a lot of difficulty (after you know the many inside strategies and secrets).

These homes can typically generate rents of $600 – $900 per month, which based on the low purchase price makes an outstanding return on investment. Returns of 25% – 35% per year are common. It’s not uncommon for smart investors to receive income for 20 years or better from their houses. After this period of ownership many owners will find a stable buyer and sell the house with a vendor take back mortgage (payment contract) and receive another 10 to 15 years of “mortgage” payments.

Here’s an example:

Purchase price: $ 20,000

Rehab: $ 15,000

Cash Investment: $ 35,000

Gross annual Income: $ 9,600 $800 month

Ordinary Expenses: $ 4,320 45%

Positive Cash Flow: $ 5,280 yr. $440 month

After Repaired Market Value: $50,000

Equity Created: $15,000 30%

Cash on Cash Gross Return: 26%

Cash on Cash Net Return: 15%

To put things into a little more perspective, if you were a risk averse investor, how much money would you need to invest in order to earn $5,280 per year in interest income, not accounting for taxes. Assuming the current 5 year GIC rate of 3.5%, you would have to invest $150,857. Based on the example above, you could buy 4 houses with that money and have an income of $21,120 a year. In addition, you would not have to worry about stock market fluctuations or running out of capital if you were withdrawing an income from your portfolio.

Finally, when investing in rental properties you need to keep your eye on the long-term goals rather than shortsighted goals. Property rental is a marathon rather than a sprint with the greatest profits coming at the end. You will want to pay the property off as quickly as possible in order to realize the maximum profit potential and acquire new properties. The real money when renting properties as a real estate investment isn’t in renting out one or two units but twenty or thirty. The more rental properties you own the more money you stand to make from owning them.

In summary, investing in real estate is always a good idea, no matter what the economic environment is. Investing in income producing property is even better as positive cash flow properties provides inflation protected real cash for your retirement.

What Does a Real Estate Consultant Do?

You may be wondering if the title of real estate consultant is a meaningful one, and if it indicates anything different from the same old licensed real estate brokers with a vested interest in the fate of a property. While it is true that anyone can call himself or herself a consultant, the term is not meaningless window dressing. For those who take their real estate consulting business seriously, it represents a different model, a different approach to real estate practice.

The first and most important difference is objectivity. Whereas a real estate broker typically is paid contingent on an outcome-in other words, they receive a commission-a real estate consultant is paid solely for their expertise. They have no stake in the outcome. Salespeople are paid only for getting a result-a sale. Real estate consultants are paid for their expert advice only, and by design have no stake in achieving a particular outcome to a particular transaction. This gives them the capacity to be more objective and inherently more trustworthy than a traditional real estate salesperson. Think about it-even the most honest salesperson will unconsciously try to steer you toward a sale. After all, that’s where their pay comes from-from selling! The consultant is paid the way other professional advisors or service professionals like CPAs are, with a retainer regardless of outcome.

Consulting can involve a variety of skills and areas of expertise. You can hire a consultant for legal advice, market research, or to locate possible properties to invest in, among other things. Since they are paid as much for their time if they advise you that there are no properties in an area worth investing in as if they advise you of dozens of viable properties, they have no stake in anything except giving you the best advice possible. After all, their future business depends on word-of-mouth endorsements from investors like you.

If you are looking for properties to invest in, a real estate consultant can tip you off to developer closeouts and bulk opportunities, equity partnerships, joint ventures, and possibly even some very unique and profitable turnkey investment opportunities. The consultant is selling information and expertise, and therefore can provide you with a layer of insulation between you and the people selling the properties. They can work out a lot of the details and business prospects of a property before you have to talk to a salesperson. Once you face the salesperson, you can approach the negotiation fully armed with an array of appropriate information, and thus avoid being bamboozled and negotiate from a position of strength.

If, on the other hand, you are selling properties, especially if you have a lot of properties to sell, a real estate consultant can help you create a strategy to sell the units before you get involved with actual salespeople, which can have many advantages. For example, you can sell a lot of properties in a relatively short time without creating the appearance of a bulk sale by having a real estate consultant distribute the properties among several different sellers.