Summer Training Project Report on

“Analysis of Real Estate investment”

Submitted to

St. soldier management & technical institute

(Jalandhar)

In partial fulfillment of the requirement for the

award of degree of

Master of Business Administration (MBA)

Submitted by Supervisor
Gurpreet Kaur Miss. Pankhuri

Roll No. 1812707 Assistant professor

St. Soldier Management & Technical Institute

JALANDHAR (2018-2020)
 CERTIFICATE

*Certificate of Summer Training from Company shall be attached herewith.

 Table of Content

Sr. Chapters Page No.

No.
Student Declaration

Faculty Declaration

Company Certificate

Acknowledgement

 Introduction to Training Company

1. Chapter-1

Introduction to Company

2. Chapter-2

Introduction to Research Topic

3. Chapter-3

Need, Objective, Scope of the Study

4. Chapter-4

Review of Literature

5. Chapter-5

Research Methodology

6. Chapter-6

Data Analysis and Interpretation

7. Chapter-7

Suggestions

8. Chapter-8

Findings & Conclusion

Appendix (Questionnaire)

Bibliography
 STUDENT DECLARATION

I, “Ms. Gurpreet Kaur”, hereby declare that I have undergone my summer training at “Surjit
Goods Carriers (P) Ltd.” From 14 June 2019 to 31July, 2019. I have completed a research
project tilted “Analysis of Real Estate” is based on my work under the guidance of Mr. Sudesh
Sharma Supervisor at account department in Company.

Further I hereby confirm that the work presented herein is genuine and original and has not been
published elsewhere.

GURPREETKAUR
 FACULTY DECLARATION

I hereby declare that the student Ms. Gurpreet Kaur of MBA (III) has undergone her summer
training under my periodic guidance on the Project titled “Analysis of Real Estate Investment”.

Further I hereby declare that the student was periodically in touch with me during his/her
training period and the work done by student is genuine & original.

________________________

(Signature of Supervisor)
 ACKNOWLEDGEMENT

Knowledge as an important tool that play important role in our daily life, however is necessary to
apply it on the right way and gain experience. The project work has placed an important part to
explore the practical work, to learn in detail apart from the theoretical studies. Hence, such type
of project work is valuable for the management students of these days.
I perceived this work as an opportunity to gain knowledge and experience apart from study.

I am gratified to Mr. Sudesh Sharma Account Department head& Mr. Gurpreet Singh Merchant
who permit me to do the project work and provided me with useful knowledge. I am also
thankful to other personnel of the company who gave me valuable guidelines during the course
of preparation of this project report.

I am thankful to Mrs. Pankhuri mam Prof. of St. Soldier Mgt.&Tech.Institution & my project
guider for providing me valuable guidelines during the preparation of this project report.

---------------------------------
Gurpreet Kaur
(MBA)
 Company Profile

Surjit Goods Carriers Private Limited is a Private incorporated on 19 January 1995. It is

classified as Non-govt Company and is registered at Registrar of Companies, Chandigarh.

Its authorized share capital is Rs. 500,000 and its paid up capital is Rs. 108,400. It is involved in
Other land transport

Surjit Goods Carriers Private Limited's Annual General Meeting (AGM) was last held on 29
September 2018 and as per records from Ministry of Corporate Affairs (MCA), its balance sheet
was last filed on 31 March 2018.
Company limited by share
Company first name id Surjit Golden carriers after that company name changed and
incorporation that become Surjit Goods Carriers (P) ltd.

Directors of Surjit Goods Carriers Private Limited are Harminder Singh, Taranjit Kaur and
Satnam Singh
 DIECTORS:
SATNAM SINGH :
Mr. Satnam Singh a man of exemplary vision and strong social commitment. A qualification of
B.COMM done from GNDU by Satnam Singh . He comes to the challenges faced in business
segments like foreign direct investment, business setting up, import-export. The young and
dynamic Mr. Satnam Singh work in his father business. He has incredible foresight, financial
acumen and enterprising spirit.

 
HARMINDER SINGH: 
Mr. Harminder Singh also done Graduation in B.COM. He is young brother of SATNAM
SINGH after graduation he is also work in own business. He is a hardworking, result oriented
and having analytical and innovative mind. He specializes in internal new need-based business
process systems. He possess exemplary farsighted vision and has capability to understand the
intricacies of any new business. He is highly proficient in providing consultations concerning
early decision making.
 
TARANJIT KAUR:
Mrs, TARANJIT KAUR is wife of MOHINDER SINGH .She is director of company with 1/3
share of the company.  
 
 We shall strive to continuously expand our business and be the supplier of first choice to all our
customers. We shall simultaneously look out for new and emerging business opportunities
related to our field of competence.

VALUES

• Commitment- Do whatever it takes to deliver superior value.

• Courtesy- Towards our Customers, Employees, Vendors and Society at large.
• Integrity- Honesty in every action.
• Speed- Act with urgency to deliver what we promise.
• Team work- Thinking and working together across hierarchy levels.
 

SERVICES

 Trailor arrangement for ODC consignments

 Cargo Container Transportation services
 Trailor arrangement for project transportation
 Household Transportation Services
 LCV Transportation Services
 Truck Transportation Services
  Containerized Truck Transportation Services
 Reefer Truck Transportation Services
 Perishable Goods Transportation services
 Import-export container handling
 Warehousing services
 Custom Clearing Services
 Cargo consolidation & distribution
 Warehousing & specialty handling (crating, labeling, packing)
 Customs brokerage & compliance services

Mr. Satnam Singh and Harmandir sing sons of Mohinder Singh offers transportations services to
public.
They are working hard the past few years; the logistics and transport sector has gained
tremendous growth. Several new innovations and technology adaptation have been done in this
sector to facilitate high standard transportation. As the result, many logistics companies have
entered the market.
 CHAPTER - 1

COMPANY PROFILE
 Real Estate Investment

Introduction

Real estate is "property consisting of land and the buildings on it, along with its natural
resources such as crops, minerals or water; immovable property of this nature; an interest vested
in this (also) an item of real property, (more generally) buildings or housing in general. Also: the
business of real estate; the profession of buying, selling, or renting land, buildings, or housing. It
is a legal term used in jurisdictions whose legal system is derived from English common law
such as India, England, Wales, Northern Ireland, United States, Canada, Pakistan, Australia, and
New Zealand

Investment

In simple, Investment is putting money into something with expectation of

profit. More specifically, investment is the commitment of money or capital to the
purchasing of financial instruments or other physical assets so as to gain profitable
returns in the form of interest, dividend or appreciation of the value of the
instrument. It is related to saving or deferring consumption.
An investment involves choice by an individual or an organization to invest its
money or capital in following instrument,

Definition:

“The action or process of investing money for profit.”

 Assets like vehicles, machinery, appliances

 Property such as home, building, lands
 Commodity
 Stock market
 Bond
 Financial Derivatives like future & option
 Foreign assets denominated in foreign currency

Investment comes with the risk of loss of the invested sum of money.
The investment that has not been thoroughly analyzed can be highly risky with respect
to the investment owner because the possibility of losing money is not within the owner’s
control. The above listed all the investment instruments possesses less or more chances of risk.

estate markets in most countries are not as organized or efficient as markets for other, more
liquid investment instruments. Individual properties are unique to themselves and not directly
interchangeable, which presents a major challenge to an investor seeking to evaluate prices and
investment opportunities. For this reason, locating properties in which to invest can involve
substantial work and competition among investors to purchase individual properties may be
highly variable depending on knowledge of availability. Information asymmetries are
commonplace in real estate markets.

The Real Estate/property is considered to be the second largest employment sector and the most
emerging industry in India. The way people prefer to invest in properties of different kinds and boom in
construction activities all over the country is the matter to be known. The trend in property market,
kinds of investment in real estate, hotspots for investment in various regions, Price fluctuations and
growth rate of industry, etc. are the contents to be studied. The study has been undertaken as the project
work undertaking the growing importance in the Investment matters and its contribution to the aspects
of economy. The study explains the importance of the real estate sector, its current trends and future
prospects of investments, its characteristics, advantages and disadvantages of investments. Also various
methods of finding out the investment values, considerations while investing in real estate properties,
government regulations, etc.

The most basic definition real estate is a piece of land, including the air above it and the
ground below it, and any buildings or structures on it. Real Estate can include business
and/or residential properties and are generally sold either by a realtor or directly by the
individual who owns the property (for sale by owner).

Objective of the study

The Report has been prepared with certain goals. The Following are the Main objective
 of study of the report. To analyze the investment in real estate.
 Comprehensive study of overview and Trends in Real Estate sector
Investment.
 To study the advantages of investment in properties, prospects of
investment.

policy initiatives that have impacted the real estate sector in India

The real estate sector was in the news all through the year, with the government announcing

several major policy initiatives such as the passage of the Real Estate (Regulation and

Development) Act 2016 and the amendment to the Benami Transactions Act. But the most talked

about was the demonetization of Rs 500 and Rs 1000 currency notes used mostly for real estate

transactions.

Some policy initiatives listed by international property consultants Colliers Research included

the following 10 policy initiatives

Real Estate (Regulation and Development) Act, 2016: The Real Estate

(Regulation and Development) Act, 2016 which came into force in March 2016 has laid

down a regulatory framework which will change the way the real estate sector operates in

India. It aims to enhance transparency, bring greater accountability in the realty sector and set

disclosure norms to protect the interest of all stakeholders. Speedy execution of property

disputes will also be ensured in due course.

Amendment to the Benami Transactions Act: The Benami Transactions
(Prohibition) Amendment Act, 2016 lays down stringent rules and penalties associated with

dealings related to ‘benami’ transactions. It establishes a regulatory mechanism to deal with

disputes arising from such transactions and levying penalties to increase the institution-

investor participation and regulating the sector to make India an attractive investment

destination.

100% deduction in profits for affordable housing construction:

To promote affordable housing, the finance minister proposed 100% deduction in profits to

an undertaking from a housing project for flats of up to 30 sq metre in four metro cities and

60 sq metre in other cities. These projects have to be approved during June 2016 to March

2019. Another condition was that the project should be completed within three years of grant

of approval.

Interest subsidy for first-time homebuyers:

To stimulate housing demand from first- time home buyers, the Union Budget 2016-17 also

proposed deduction of additional interest of Rs 50,000 per annum for first-time home buyers

for loans of up to Rs 35 lakh sanctioned during the next financial year for houses with a value

not exceeding Rs 50 lakh. This move should positively influence home sales in non-metros in

the long term where residential product prices are not as high as those in metros.

Change in arbitration norms for construction companies: 

To help the ailing construction sector, the government has cleared reforms including speedier

resolution of disputes and the release of 75% of amounts that are stuck in arbitration. The

government will now release 75% of amounts against margin-free guarantee in cases where

arbitral awards have been given but have been contested. The amount released will be used

by contractors to complete projects or pay off debts. This is aimed at improving the cash flow
position of large developers who have significant exposure in infrastructure and government

contracts and eventually help in speedy execution of large infrastructure projects. Coming at

a time when most developers are struggling with liquidity issues, this is a boon from an

overall perspective.

 Service tax exemption on construction of affordable housing:

Exemption of service tax on construction of affordable houses of up to 60 square metre under

any scheme of the Central or state government including public private participation or PPP

schemes will propel construction in affordable segment across India and encourage greater

collaboration between the public and private sector as well as participation in affordable

home construction.

 DDT exemption for SPVs to REITs:

The Union Budget 2016-17 exempted any distribution made out of the income of the Special

Purpose Vehicles (SPVs) to the Real Estate Investment Trusts (REIT) and Infrastructure

Investment Trusts (InvIT) from the levy of Dividend Distribution Tax. This paved the way

for the REIT model to become financially viable for retail investors.

Implementation of Goods and Services Tax structure:

Goods and Services Tax (GST) is a positive move towards simplification of Indian tax

system. However, the real estate industry is still awaiting clarity on which items fall into

“sin” and “common use” and whether they will attract 18%, or 12% possible tax rates.

Additional clarification is also needed if the implementation of GST will subsume existing

service tax and Value Added Tax (VAT), which are levied for under construction projects

currently.

Currency demonetization of 500- and 1,000-rupee notes:

The recent demonetisation of Rs 500 and Rs 1,000-rupee notes by the prime minister is

perceived as a significant reform. In the long run, this measure along with Real Estate

(Regulation and Development) Act, 2016 (RERA) will align the real estate sector to the

international standards of doing business, resulting in more fund flow from institutional

investors, banks and higher unit sales.

 Permanent Residency Status for foreign investors:

The Union Cabinet approved the grant of Permanent Residency Status (PRS) to foreign

investors, subject to various conditions and with a provision for renewal for another 10 years.

As PRS allows the holders’ spouse/dependents to take up employment in India, as well as the

purchase of one residential property for end-use, the end user pool, mainly for high-end and

luxury segment products stands increased which can promote the asset class in a big way.

Factors That Matter In Real Estate Investment

 RoI (Return on Investment)
Cash flow from rentals
Upgrading to invested property
Security

Factor Leverage
Loan pay down
Customised occupancy
Price appreciation

s Add few extra time to manage

Real estate investment is complex. If an investor wants to make money by investing in real estate
then, he must be aware of the risks and long-term benefits. The goal of an investor should be to
strike the best deal possible, taking all risks into account. It always makes sense to optimise.
Let us take a look at nine factors that matter in real estate investment.

 RoI (Return on Investment)

 Investors should learn the art of earning high returns on their investments. The return on
investment depends on the risk and the time it takes to maintain the property. As real
estate is not a very liquid asset, it is not easy to convert it into cash quickly. It needs an
established market with enough participants to sell off the asset without a huge impact on
the price. To earn good returns on investment, investors should attempt to strike a fair
deal. It is important to buy cash-flow-positive properties.

 Cash flow from rentals

 Real estate investors have more control over the cash flow than on risks. Cash flows from
real estate assets are stable and far more predictable than that of most other investments.
This is why investors invest in rental properties. Cash flows can help float you through
bad times and help you build other business or reinvest in more real estate. A properly
managed rental property an provide a steady income stream in the form of rental
payments.

 Upgrading to invested property

 Investors can improve their investment property to earn more profit through cash flows,
instead of selling it. In many cases, a minor renovation can raise the value of a property.
When times change, trends and styles change too. By keeping this simple fact in mind,
investors can make the property more valuable to tenants. To get the most out of your
investment, find out the improvements that actually raise the value of a property.
Installing energy efficient appliances and windows, for example, can vastly raise a
property's value.

 Security

 Like in other asset classes like equity and debt, property prices do not fluctuate widely.
This gives an immense sense of security for investors. Real estate is one of the few
investments that can be insured and protected from damage. By having insurance
coverage, investors are able to claim damages when something unexpected happens.
Market trends have a great impact on real estate prices. So, it is important to study the
property and the location before buying real estate assets.

 Leverage

 Real estate is a reasonably flexible investment. Leverage is the ultimate power of

investing. In real estate, leverage has a lot to do with the asset itself. For investor it is not
that difficult to get a loan. Banks usually approve loans up to 75-80 per cent of the value
of the asset. Banks are happy lending huge sums of money to buy off real estate because
they know it is one of the safest and most profitable investments available. Also when
you leverage an investment, you gain the benefits of appreciation on the total asset value,
while investing only a small amount of your own money.

 Loan pay down

 When an investor invests in a rental property, taking a mortgage loan will give you huge
profits. The tenant actually makes the loan payment through monthly rents that the
investor receives. So, this raises your net worth each month.

 Customized occupancy

 It is a myth that investors buy property purely to invest in the real estate sector.

Generally, investors are fascinated by real estate investment because they themselves can
use the property. It is up to investors to decide whether they want to live there,  rent out
partially and become the live-in landlord.

 Price appreciation

 Even though the market is sluggish now, returns from real estate investment have proven
to be good over the long run. Of course, it is hard to predict the real estate trends. But
 prices will sooner or later rebound, perhaps not quite as feverish as before. Price
appreciation happens over the long run.

 Add few extra times to manage

 Few properties involve additional management to make them an ideal investment. Like
vacation homes/vacation rentals, properties in bad locations or college rentals/PG
requires extra time to manage and maintain for the value addition. These highly profitable
investments require good management. The time involved in managing such investments
is worthwhile.

    

BASICE OBJECT FOR INVESTMENT IN REAL ESTATE

 Real Estate Can Be Easier to Understand

 When you start investing, it can be difficult to understand everything you need to know to
make a profit. Many types of investments rely on abstract concepts and complex
algorithms, which are especially difficult to understand.

Real estate, on the other hand, involves the purchase of physical property and most
people are familiar with real estate to some degree. Investing in real estate can be much
easier to understand than complex investments developed by mathematicians.

 Real Estate Is Improvable

 After you buy a stock, you hold it for a period of time and hopefully sell it for a profit.
The success of the stock depends on company management and their corporate success,
which is out of your control.
 In contrast, real estate investments are directly under your control. Though you can’t
control demographic and economic changes, or acts of God, you can control many things
relating to the physical property and tenants. With good management of your overall real
estate portfolio, you can tangibly improve the value of your investment and build wealth.
 Real Estate is a Hedge Against Inflation
 Real estate is one of the few assets that reacts proportionately to inflation. As inflation
goes up, housing values and rents go up.
 Though real estate in general is a good hedge against inflation, rental properties that are
re-leased every year are especially effective, since monthly rents can be adjusted upward
in inflationary periods.
 For this reason alone, therefore, real estate is one of the best ways to hedge an investment
portfolio against inflation.
 Real Estate Properties Exist in an Inefficient Market
 Unlike the stock market, the real estate market is full of inefficiencies. There is a lack of
transparency relating to individual property values and also the strength of different
markets, which means that real estate investments have the potential for very high profits.
 Real estate investors who do their research, especially with help from industry experts,
can find great real estate bargains.

 Real Estate Can Be Financed and Leveraged

 Of course, you can technically purchase stocks and other assets using debt, but this can
be very risky because the financing is not to purchase a hard asset. Real estate, on the
other hand, is a market where products are usually bought with debt.
 Real estate investments purchased with hard money or a mortgage can be structured in
ways that are rather safe and affordable, so that large purchases can be made with a
relatively small initial investment. The result is the purchase of a hard asset that
appreciates year-over-year, and paying for it primarily with other people’s money.

 Safety
 While no investment option is completely safe, there are products that are preferred by
investors who are risk averse. Some individuals invest with an objective of keeping their
money safe, irrespective of the rate of return they receive on their capital. Such near-safe
products include fixed deposits, savings accounts, government bonds, etc.

 Growth
 While safety is an important objective for many investors, a majority of them invest to
receive capital gains, which means that they want the invested amount to grow.There are
several options in the market that offer this benefit. These include stocks, mutual funds,
gold, property, commodities, etc. It is important to note that capital gains attract taxes, the
percentage of which varies according to the number of years of investment.

 Income
 Some individuals invest with the objective of generating a second source of income.
Consequently, they invest in products that offer returns regularly like bank fixed deposits,
corporate and government bonds, etc.

 Other objectives
 While the aforementioned objectives are the most common ones among investors today,
some other objectives include:
Tax exemption
Some people invest their money in various financial products solely for reducing their tax
liability. Some products offer tax exemptions while many offer tax benefits on long-term
profits.

 Liquidity
Many investment options are not liquid. This means they cannot be sold and converted
into cash instantly. However, some people prefer investing in options that can be used
during emergencies. Such liquid instruments include stock, money market instruments
and exchange-traded funds, to name a few.

Limitation of the Study

 Real Estate Has Higher Transaction Costs

 When purchasing shares of a stock, the transaction cost for the trade is very
low, often just a few dollars. But when purchasing real estate, the transaction
costs are considerably higher.Unlike other types of investments, real estate
transaction costs can significantly affect the value of the investment and make
it more difficult to turn a profit.
 Real Estate Has Low Liquidity
 Many investments are highly liquid and can be bought and sold for a profit in a
fraction of a second, as with high-frequency stock trading. But real estate
investments are comparably illiquid, because properties can’t be quickly
and easily sold without a substantial loss in value.

Real estate investors must be prepared to own a property for months and years,
especially if it will be leased out.

 Real Estate Requires Management and Maintenance

 Once an investor purchases a property, it must be rehabbed, maintained, and
managed. Financing payments, real estate taxes, insurance, management fees,
and maintenance costs can add up quickly, especially if the property sits empty
for extended periods of time.
 Real Estate Markets Have Significant Inefficiencies
 As we’ve already discussed above, the market’s inefficiencies can be
advantageous to investors. But here we want to also mention the disadvantages,
which can be illustrated by investors purchasing properties sight unseen at
auction.

The most aggressive investors purchase real estate based on minimal

information, and don’t know whether they’ve made a good deal until paying for
the property and then inspecting the property. Likewise, investors with rental
 property deal with fluctuating demographics and volatile economies, which can
either add or take away from their bottom-line profits.

Real estate investing involves dealing with market inefficiencies, which can be
mishandled to result in financial ruin.

 Real Estate Creates Liabilities

 Real estate investing involves taking on a great deal of financial and legal
liability.

ADVANTAGES AND DISADVANTAGES OF REAL ESTATE

INVESTMENTS

ADVANTAGES:

Investing in real estate is as advantageous and as attractive as investing in stock market.

Here are the main benefits of investing in property market.

► Real Estate Investments are Less Risky: As compared to other investments, less of
misadventure is involved in a real estate property. Real estate investments are
traditionally considered a stable and rich gainer, provided if one takes it seriously and
with full sagacity. The reasons for the real estate investments becoming less risky
adventure primarily relate to various socio-economic factors, location, market behavior,
the population density of an area; mortgage interest rates stability; good history of land
appreciation, less of inflation and many more.

► No Need for Huge Starting Capital. A real estate property can be procured for an
initial amount as low as $8,000 to $ 15,000, and the remaining amount can be taken on
holding the property as security. This is what you call High Ratio Financing. If you don't
have the idea as to how it works, then let explain with the help of an example.

► Honing Investment Skills A real estate investment, especially when you buy a condo
for yourself, will be a pleasurable learning experience. It gives you the opportunity to
learn and when you went ahead with your first real estate property.

► Not a time taking Adventure Real estate investment will not take out all your
energies, until you are prepared and foresighted to take the adventure in full swing. You
can save hell lot of time, if you are vigilant enough to know the techniques of making a
judicious investment in the right time and when there are good market conditions
prevailing at that point of time.

► Leverage is the Right Way The concept of leverage in real estate is not a new one. It
implies investing a part of your money and borrowing the rest from other sources, like
banks, investment companies, finance companies, or other people's money (OPM). There
have been many instances where people have become rich by practically applying OPM
Leverage Principal. Moreover, in case the lender is interested in selling the property, the
net proceeds resulting from the sale of the property should comfortably cover the
mortgage amount.

►Real Estate Appreciation An appreciation is an average increase in the property value

over original capital investment, taking place over a period. There are some neglected
real estate properties that have an appreciation below the average mark, whereas, some of
the properties located in maintained geographical areas, showing high demand, have an
above average appreciation. In such centrally located and high demand areas, the average
appreciation can reach up to 25% in a year.

► Low Inflation Inflation is the rise in the prices of the products, commodities and
services, or putting it another way, it is the decrease in your capacity to buy or hire the
services. Supposing, a commodity was worth $10 a decade back, will now cost $ 100 as
the result of inflation. Comparatively, real estate sector has minimum rate of inflation

► Tax Exemptions You get various tax exemptions on your principal and investment
income property. The tax exemptions available in real estate property investment are
more than available in any other investment. In other investments, you lose terribly on the
investments in your bank in the form of inflation and high taxes therein, but in real estate;
you don't actually have such hindrances. There are several beneficial provisions in the
Income-tax Act, 1961 which promote investment in residential properties, having regard
to the need for housing millions of citizens. Of course, only those who pay taxes can take
advantage of the appropriate incentives given under the law. Interest payable on loans
taken for purchase or construction of house is deductible to the extent of Rs 1.5 lakh
every year, though the annual value of one self-occupied residential property is exempt
from income-tax. In addition, repayment of the installment of housing loan is deductible
to the extent of Rs 1 lakh per annum under section 18-C.

► High Return on Investments Real estate investment gives you potentially high Rate of
investment before and after the taxes levied on your income. In fact, investing in real
estate gives you high ROIs after the taxes

► Net Positive and High Income is Generated.

► Increased demand for properties.

DISADVANTAGES

Beside the large potential of return on Investments, there are certain levels of
Disadvantages. These disadvantages can be easily taken off, if you have an insight about
the limitations of real estate investment and what can be its short term as well as long-
term repercussions.
► Taking Wrong Decisions People going for the real estate investment property take
decisions in haste. Make a firm decision when you go for purchasing your first real estate
property, is just not easy man. If you are swayed by emotions, you will be ruined.

► No readily available Liquidity: With your real estate investment, you need to know
one thing straight, and that is you simply cannot aspire hard cash immediately. You have
to wait and watch the market movements and other socio-economic and politico
economic factors before selling your real estate property, like a mall or your home.

► Eats away your time and energy: Real estate investment can get you real fatigue. It is
a lethargic time-consuming process that makes you feel almost laid back. You need to
plan and have those instincts to get going with your property. You will learn more on
about making you real estate investments more time efficient in later part of the chapters.

► A Risk full decision can harm: Investing in a real estate property can be a risky and
costly even, if you are not prepared before, you will make losses. Not just losses but, but
you will become a pauper. Remember, as I said in my earlier statements, Real estate
market is speculative.

► No Stringent Comparison Methodologies Real estate market is variable. The price of

two real estate properties can vary a great deal, provided you keep other factors such as
time and location, constant. No two real estate properties can have exact. There always
exists kind of variation and this need to be taken into account. Though, you do have the
existing rule of thumbs and set strategies, but all these are workable, if tried in
combination.

► Guided and Drawn on Government Policies: Government policies and regulations

play an indispensable role in deciding on the real estate investment.
 Chapter – 2

Introduction of Research Topic

 Real Estate Investment Analysis

A real estate investment analysis is basically the process of analyzing investment opportunities to
decide whether or not they’ll give you the profits you’re aiming for to achieve your investment
goals. For the real estate investor, this is perhaps the most crucial part to success. There are
generally 4 steps to analyzing rental properties, which are:
1. Determining the market value of the rental property
2. Calculating the operating costs
3. Finding the market rents
4. Calculating your return on investment
Seems simple right? Well, maybe not. Keep reading our guide for beginner investors where we
walk you through each step.

 Property Valuation  
Sellers of investment properties will always try to sell for maximum profits. Meanwhile,
a real estate investor hopes to buy the property at a fair market price. It can be hard to
calculate what a real estate property should sell for because values can vary significantly
between two similar properties. So, the first step in real estate investment analysis is to
find the real value of the property to avoid overpaying.
To find the value of residential real estate properties, you need to find comparable
properties (comps). Comparable properties are simply other properties in the area that
have similar characteristics and were sold recently. By looking at what rental properties
have sold for, real estate investors can get a hint to the value of another property. This is
known as comparative market analysis.
For example, a single-family home in your neighborhood will rise in value if
similar single-family homes are rising in value, and vice-versa. This allows you to
determine how well or how bad your choice of investment property is in comparison to
the overall performance of other investment properties in the area and the overall
performance of the housing market.

 Calculating Costs and Expenses

Every real estate investment property comes with different costs and expenses which
impact the returns and profits that you can expect to gain. So, the next step of the real
 estate investment analysis is to gather enough information about the property before
making the purchase to calculate your operating expenses. These include, but are not
limited to:
 Property taxes
 Insurance
 Utilities
 Turnover costs
 Maintenance expenses
 Property management fees
 Marketing/rental fees
The seller will provide you with pro-forma data (estimated data about the property’s value).
However, remember that a seller wants you to buy the rental property, so he/she will likely give
you high estimates of the rental income or neglect to mention operating expenses that you’ll face
down the line. Therefore, you can’t always guarantee accurate pro-forma data.
So, the real estate investor should ask the seller/previous owner for actual data on the rental
income and operating expenses. For example, ask to see previous years of tax returns, property
tax bills, maintenance records, etc. Once you have the pro-forma data and the actual data, you’ll
be in a better position to decide whether this property makes for a good investment. This step of
real estate investment analysis is part of your due diligence before buying an investment
property because it assures you won’t run into surprises after closing the deal.

 Finding Market Rents

The rent that you’ll charge tenants after acquiring the property is an important
consideration. You want your rental income to cover your operating expenses, make
reasonable profits, and be competitive within the local market at the same time. To
estimate the rent you can receive from investment properties, you need to determine the
overall market rent.
You can determine the market rents by simply asking other real estate investors/landlords
in the area where you’re investing. Local real estate agents and property managers can
also give you an idea of what rents are. In addition, finding and analyzing rental comps
will also allow you to see what similar residential rental properties are renting for.

To make this step of the real estate investment analysis easier, use Mashvisor’s Heatmap.

With this tool, you can see the average monthly rental income (traditional and Airbnb)
that you’ll receive from investing in that location. What’s more, the Heatmap uses color
codes to help real estate investors determine how well the housing market is performing
compared to surrounding areas.

 Calculating the Return on Investment

This is the part where all the data you’ve gathered will come together to give a final
estimation of whether or not buying the rental property makes financial sense. There are
 different types of ROI you can calculate for real estate investment analysis. The most
important ones are:

 Cash Flow: This is the amount of money left after all rental expenses, principal
payments, and interest have been paid. As a real estate investor, it’s important to estimate
your future cash flow as you want to ensure you’re buying positive cash flowing rental
property to make money in real estate.

 Cap Rate: This is the ratio of the net operating income (NOI) over the property’s value.
Knowing the cap rate is great for quickly comparing multiple properties in a given area,
determining market trends, and identifying the level of risks associated with the
investment property

 Cash on Cash Return: This is the cash you get back compared to the cash you invested
in the property. It takes into account your down payment, closing costs, repair costs, etc.
So, knowing the cash on cash return is extremely important because it lets you know
whether you’ll have the money to pay your bills.
As you can see, each metric for calculating the return on investment tells you something
about your choice of rental property. So, it’s important to account for all of them in your
real estate investment analysis and not make a decision depending on just one.

 The Bottom Line

It’s obvious that with real estate investment analysis, you’ll have all the information you
need to make the right decisions with confidence. Without it, on the other hand, a real
estate investor may face severe losses.
If you’re overwhelmed by all these calculations, use Mashvisor’s Investment Property
Calculator to get your hands on readily calculated data and analytics for investment
properties in any city/neighborhood in the US housing market.
 Real Estate Industry in India

The construction of commercial houses, residential housing, and business spaces, such as hotels,
restaurants, theaters, and industrial buildings, namely factories and government buildings, are all
covered by the real estate sector. Real estate also involves activities such as the purchase, sale,
and development of land. Thus the real estate activities encompass both construction and housing
sectors.
 
The Indian real estate industry, which is currently worth about US$ 12 billion, plays a significant
role in contributing to the economy of the country. The real estate industry in India ranks
second in the world in terms of generating employment for the people of India and
contributing to the Gross Domestic Product of the country. Presently real estate accounts for
about 5% of India's GDP; in the next five years it is expected to rise up to 6%.
 
The real estate industry in India is flourishing at a fast pace. Over the years the industry graph
has shown an upward trend. The industry has shown a growth rate of about 30% each year. The
recent surge in Indian outsourcing business houses, including technical consultancy services,
medical transcription, and call centers, has constituted about 10 million square feet of growth in
real estate.
 
Today, several multinational corporations have shown great confidence in investing in Indian
real estate sectors for its promise to gain tremendous returns on investments. Another reason why
foreign investors are keen to invest in the Indian real estate sector is the easy and cheap
availability of skilled workforce and the considerably low cost of operations. This adds up to
higher returns on investments.
 
The unprecedented growth in the Indian industrial real estate sector is fuelled by two important
forces. First, the fast expansion of the Indian industrial sector has created a large demand for
manufacturing and office buildings. Second, the liberalization policies of the government of
India have simplified the investment process by reducing the need for permissions and licenses
for starting any large construction project. The government thus opened the doors for foreign
investment in the real estate sector of India, which gave a further push to the development of the
real estate industry in India.
 
The main reason for the government of India to allow FDI in Indian real estate was to make the
sector more organized and inject a sense of professionalism into the real estate industry. As a
result of the FDI, the villages adjoining the metropolises have experienced an upsurge in the land
prices. This in turn has forced several farmers to sell their land and get good money in return. 
 
Thus, the real estate sector in India by riding the back of the overall economic growth of the
county is witnessing an unparalleled growth and has brought about several regulatory changes.
High industrial growth, favorable demographics, rising purchasing power of people, easier
financing options, a sharp increase in global liquidity, looser credit policies, a greater availability
of leverage, an increase in mortgage lending, a selective capital account, and consistent growth
in equity markets have resulted in an upturn in the real estate investment sector. This along with
the government’s relaxation of FDI policies has made the Indian real estate industry an attractive
investment option.

According to Global Research Gateway

India Real Estate Market Outlook 2019

 Backed by positive economic fundamentals, healthy demand and quality supply infusion across
sectors, India’s real estate sector is poised for strong growth in 2019.

 Office – After a landmark 2018, the sector is looking forward to another strong year as
new sources of demand emerge and quality supply enters the market.

 Retail - Almost 10-12 million sq. ft. of supply is expected this year, even as experiential
retail and omni-channel will continue to redefine the sector.

 Industrial / Logistics – Close to 60 million sq. ft. of new space will be added till
2020; the share of grade A supply is expected to increase.

 Residential – Sales and new launches expected to improve; affordable and mid
segment to lead amidst government initiatives and developer realignment of product-mix.

 Capital Markets – Appetite for greenfield might strengthen; core assets will also
continue to be favored; due diligence and counter-party credibility to come into sharper focus.
 Real estate sector in India  is expected to reach a  market  size of US$ 1 trillion by 2030 from
US$ 120 billion in 2017 and contribute 13 per cent of the country's GDP by 2025.

Eighty percent share of the real estate market is garnered by residential sector
and the rest is comprised of offices, shopping malls, hotels and hospitals.
Real estate companies are coming up with various residential and commercial
projects to fulfill the demand for residential and office properties

Classification of Properties

Real estate has been broadly categories into 3 classes as follow

Types of Properties
 Residential Property
A)

Commercial property
B)

Vacant land Property

C)

Industrial Property
D)

Residential Property:
Residential real estate consists of housing for individuals, families, or groups of people. This is
the most common type of estate and is the asset class that most people are familiar with. Within
residential, there are single-family homes, apartments, condominiums, townhouses, and other
types of living arrangements.

Advantages of purchasing an investment property:

 As the property market is more stable than the other markets, investment property
generates fixed returns to the investors.

 The income is more certain because you receive constant rental payment from the
tenants. In the case that the rental income is higher than the mortgage repayment, you
do not need to put any extra funds to pay off the loan and you may also have surplus
funds to cover any property costs incurred

 If you purchase the property in a good location, the property value will increase and
you can generate more profit.

 Any tax associated with the expenses paid on the investment property, such as
property maintenance, council rates, fees charged by managing agent can be claimed
back at the end of the financial year.If you have an investment property, you can also
use the existing equity in the property to get another loan or to purchase another
investment property.
 Disadvantages of purchasing an investment property:

 The initial costs to purchase an investment property are normally very high.

 It may take a long time to sell the property. Especially when you are facing financial
hardship and you need to quickly sell the property, you may need to sell it at a er
price. If your property is not located in a good area, it may stand in the market for a
long time before it is sold.

 After you purchase the property, you may not be able to rent it out straight away. You
will need to spend some time to find the tenants. If this is the case, you may need to
pay extra funds to cover all the expenses, such as mortgage repayments or property
maintenance.

 The most common case is that your tenants move out after they finish contract, it
normally takes some time to find another tenants. As an obvious, you will be short of
income during this period. You may also need to cover difference when the rental
income is less than the repayments on your mortgage.

 The property value can increase but it can also decrease depending on the market.
Especially during the financial crisis, most investors face financial difficulty because
they spent all their funds in the investment property but it could not be sold or was
sold at a lower price.

Vacant land:
Land is the baseline for all types of real property. Land typically refers to undeveloped property
and vacant land. Developers acquire land and combine it with other properties (called assembly)
and rezone it so they can increase the density and increase the value of the property.

Commercial property:
Commercial property refers to land and buildings that are used by businesses to carry out their
operations. Examples include shopping malls, individual stores, office buildings, parking lots,
medical centers, and hotels.

 retail buildings
 office buildings
 warehouses
 industrial buildings
 apartment buildings
 “mixed use” buildings, where the property may have a mix, such as retail, office and
apartments
 Chapter – 3

Need, Objective, Scope of the Study

 Scope in real estate development career

If a person wants to brighten his career in real estate sector, then following are the scopes
available to him after completing a course in real estate. These are the career opportunities in
real estate in India. In other words, he can make his career in any of the following roles:

 Real estate advisory professional

 Technical Proposal Writer

 Commercial broker

 Resident Architect

 Property manager

 Real estate appraiser, and many more.

Characteristics of Real Estate Investments

Understanding the unique characteristics of real estate investments will help you
formulate a profitable strategy to take advantage of these unique features, while also
avoiding possible pitfalls inherent in real estate investing.

1. Durability
Real estate investments can be extremely durable and build multi-generational wealth.

Unlike other investments that have fixed maturities, there is no fixed maturity for a
real estate investment. You can sell it in a few days if you see a good opportunity, or
you can hold it for decades. Many of the most profitable pieces of real estate in
American cities have been held for several decades, and some of the profitable real
estate in Europe has been held by the same trust or family for centuries.

2. Lack of Transparency
Some markets, such as stocks and commodities, are regulated to be as transparent as
possible. Investors have access to real-time market information, and are able to make
immediate changes to their portfolio.
Real estate works very differently. When an investor buys a property, there is a risk
that the seller is withholding information, or that the seller is unaware of problems.

Therefore, research and inspections are important when buying real estate. And if you
buy a property sight unseen, such as at auction, be sure to take the higher risk into
consideration when making an offer.

3. Heterogeneity
All real estate is local, with every property being unique in terms of location,
physical structure, and financing.

As a result, investors can leverage local knowledge of a community to acquire and

manage a highly profitable portfolio of real estate investments. This is why the most
successful investors have a team in each geographic area of their real estate
investments, because of the heterogeneity of real estate.

4. Illiquid
Real estate is considered illiquid because it can’t be easily sold without a substantial
loss in value.

Even if you are flipping houses, it takes a substantial amount of time to purchase,
rehab, find a buyer, and close. And if you own rental income with tenants leasing a
property, it can take much longer.

The lack of liquidity is a good thing, though, when it comes to investing in real estate.
The illiquidity of real estate contributes to making it a stable, appreciating asset class
for long-term investors.

5. High Startup Costs

The costs of acquiring real estate investments are higher than many other types of
investments. Typical costs include purchase and closing costs, rehabbing, and
financing.

The old adage, “it takes money to make money” applies to real estate investing. But,
the reward is high in the form of cash flow and profits.

Like illiquidity, the high cost of acquiring a real estate investment is one reason
property investing can be so profitable. The costs limit the number of investors in this
asset class, and therefore add to stability and long-term appreciation.
 6. Investment Vulnerability
Risks associated with real estate makes investing in this asset class very profitable for
savvy investors who have a proven plan for success.

Real estate investments can be fluid at times and change as cities and neighborhoods
change. Therefore, real estate is not a hands-off static investment, but one that
requires constant attention.

Objectives in Real Estate Investing

Investors purchase real estate to generate attractive rates of return on capital, to hedge against
inflation or to increase their income. They can invest in real estate directly through personal
purchases or indirectly through real estate investment trusts and property holding companies.
Investors can have short or long-term objectives when making an investment decision and will
have varying goals that depend upon their reasons for acquiring real estate.

Resale
Some investors buy real estate and make small or major improvements to resell it at a profit.
This process can include clearing or improving land, home renovation or seeking a zoning
change on a property. Investors may make no improvements to real estate and simply speculate
based on market conditions such as a housing bubble, or future value such as land investments
that will increase in value over a decade due to population expansion, according to the
California Public Employees’ Retirement System.

Management
Real estate investors commonly purchase property with the intention of earning passive income
through the collection of rents. They might start by financing a single property and using the
rent money to pay off the mortgage. Some investors will use the equity in their holdings to buy
additional properties until they have enough passive income to earn a living solely through
rentals.

Leverage
Real estate gives investors equity, or ownership interest, they can use as collateral for other
investments. Lending institutions prefer that investors who take out loans have collateral they
can seize in the event of default, according to San Jose State University. In favorable market
conditions, the price appreciation of real estate can rapidly increase the net worth of an
investor on paper, allowing him to borrow more money for additional investments.

Taxes
Some investors purchase real estate to reduce their taxable income at the federal and state
levels. Deprecation allows investors to write-off the purchase price and improvements made to
real estate over a set period of years. This can help offset profits from other activities such as a
job, rental income or stock market investments. In the United States, they can depreciate
commercial real estate over 39 years and residential real estate over 27.5 years, according to
the Internal Revenue Service.
 Chapter – 4

Review of Literature

Review of Literature
The construction industry in India in more complex and subjected to greater risk as compared to
any other business and thus, it is important for the selection as well as implementation of
effective strategies of risk management in order for the project to be successful and thus forms
the core introductory principles of risk management. The completion of construction projects
within the projected time span has always been the most challenging task for the construction
companies and it is found that many construction projects have been unsuccessful in the
delivering the projects at time, cost and quality which the clients and their consultants had
perceived before the starting of the project and thus, it is important for the management to
efficiently design a plan of action to achieve the goals and requirements. As per a report
published by Economy Watch (2010) – Construction Industry Trends all over the world show a
rise in its rate of growth. This industry is composed of many components including construction
of heavy and civil engineering (highways, bridges, railway tracks, airports, etc.), real estate (both
residential as well as commercial) development, and specialized construction products (such as
architectural products, electrical connections, decorative items, etc.). All these segments cannot
be expected to show similar trends and in fact are showing differential growth pattern all over the
world. India is seeing a boom in the construction sector mainly due to the government initiative
in expansion of the developmental facilities. Economic upsurge has also generated enhanced
generation of demand in the real estate sector (both residential as well as commercial).
Construction Industry in India is rising at a phenomenal rate of 7 to 8% p.a. As stated by Nargis
Namazi (2011) in an article published in Business Review – across the world, the construction
industry is witnessing a tremendous boom. And India is no exception! Government polices and
expenditure in infrastructure, training and regeneration projects have helped the sector grow at
high levels and the same pace is likely to be seen in the coming year too. This industry comprises
of 2 many components including construction of heavy and civil engineering (highways, bridges,
railway tracks, airports, etc.), real estate (both residential as well as commercial) development,
and specialized construction products (such as architectural products, electrical connections,
decorative items, etc.) The construction industry is currently growing at 10 per cent per annum
and has a size of 70 billion dollars but with the huge investment in the construction industry,
tremendous growth opportunities are expected. Araghadeep Laskar and CVR Murthy (2011)
state that the construction industry is the second largest industry of the country after agriculture.
It makes a significant contribution to the national economy and provides employment to large
number of people. The use of various new technologies and deployment of project management
strategies has made it possible to undertake projects of mega scale. In its path of advancement,
the industry has to overcome a number of challenges. However, the industry is still faced with
some major challenges, including housing, disaster resistant construction, water management and
mass transportation. Recent experiences of several new mega-projects are clear indicators that
the industry is poised for a bright future. As per the market research report published by the
Consolidated Construction Consortium Limited (2011), our construction industry suffers from
capacity constraints, lack of trained manpower and managerial skills with performance much
below international level. The industry is starved of finance. Small and medium contractors do
not have the wherewithal to upgrade their capability, both hard and soft, to undertake high value
time bound projects. Quality, safety, environment and social aspects are also not being addressed
appropriately. The report concluded that in the years ahead, the construction industry in India has
to overcome various challenges with respect to housing, environment, transportation, power or
natural hazards. Technocrats associated with the Indian construction industry need to employ
innovative technologies and skilled project handling strategies to overcome these challenges. The
outstanding performance under demanding situations in the 3 past will stand in good stead and
give confidence to the Indian construction industry to bring about an overall development in the
infrastructure of the nation. The gains of large investments in the mega-projects eventually will
feedback to the construction industry itself in the form of better economy and improved work
conditions. According to Niranjan Hiranandani, Managing Director, Hiranandani Constructions
(Project Manager, 2011), “the National Housing and Habitat Policy of the Government of India
was passed in October 1998 by Parliament. It talks about issues like liberalisation in the housing
sector. What we need to do now is to first scrap the Urban Land Ceiling Act. The Central
government has already scrapped the Act, but many states, including Maharashtra, have not
followed suit. If this is done, more land will be available for development. The second major
thing is stamp duty. Fortunately for us, Maharashtra has reduced the stamp duty on commercial
properties from 10 per cent to 5 per cent, and for residential properties from 8 per cent to 5 per
cent. The third important factor is the sanction of building plans. But since this process is riddled
with corruption, it is difficult to clear plans or procure non-agricultural land. If these steps are
taken, some problems faced by the real estate industry will be solved.” A Report by CIDCI
(2006-2007) remarked that the 10th Five year plan brought by the Planning Commission,
Government of India, which is a policy paper for the economy for the next five years (2002 –
2007) has for the first time incorporated a chapter on Construction. This shows the importance
given by the Government of India to the Construction Industry. The plan encourages 8% growth
in GDP for which total investment is Rs. 4,081,700 Cr. The public sector investment is
1,1212,802 crore and private sector investment is 2,476,100 crore. Based on past experience,
construction accounts for 40-50% of the investment which means a figure of 2,000,000 crore in
the next five years or about 4,00,000 crore every year. 4 Singh Vandana (2009) concluded her
research paper with the remark that the Real Estate is a very wide concept and it is highly
affected by the macro-economic factors like GDP, FDI, per capital income, interest rates and
employment in the nation. The most important factor in the case of Real Estate is location which
affects the value and returns from the Real Estate. India needs a stronger capital market base for
property financing. The debate on the potential introduction of REITs and real estate funds
points in the right direction. The introduction of REIT s in 2007, will give international investors
in particular a familiar investment vehicle. Private investors could also enter into indirect
investment in real estate. Although interest in new projects is most likely to come primarily from
institutional investors, the rising middle class is likely to seek new instruments aside from direct
property investments in the medium term. So, in the end we can say that the investment in Real
Estate in India is a very good investment opportunity. But one should be very careful while
taking decision in this direction due to rising inflation and interest rates. Legal issues should also
be kept in mind while choosing a property. According to K. K. Kapila, Chairman and Managing
Director of ICT Pvt. Ltd (2011), our construction industry suffers from capacity constraints, lack
of trained manpower and managerial skills with performance much below international level.
Though there are islands of excellence in a sea of mediocrity, our companies must become global
players by modernising, intensive training of their manpower, enhancing their turnover and
change of mindset. The industry is starved of finance. Small and medium contractors do not have
the wherewithal to upgrade their capability, both hard and soft, to undertake high value time
bound projects
 Chapter – 5

Research Methodology

Research methodology
Research can be defined as the search for knowledge, or systematic
Investigation for the purpose of discovering, interpreting and concluding the subject.
The research work is carried out in order to find out solutions to the questions

Research methodology is the specific procedures or techniques used to identify, select, process,
and analyze information about a topic. In a research paper, the methodology section allows the
reader to critically evaluate a study’s overall validity and reliability. The methodology section
answers two main questions: How was the data collected or generated? How was it analyzed? 

Research Design:
The research type undertaken in this project work is the Exploratory Research design.
Exploratory research is a research conducted for a problem that has not been studied more
clearly, intended to establish priorities, develop operational definitions and improve the
final research design. Exploratory research helps determine the best research design, data-
collection method and selection of subjects.
It is a type of research conducted for deriving systematic solutions. It should draw definitive
conclusions. This research often relies on secondary research such as reviewing available
literature and data, or qualitative approaches such as informal discussion.

Information Sources:

Preparing the project report comprises the process of collecting and analyses
data. The report is prepared on the base of two types of data, primary data and
secondary data.

Primary Data:
Primary data are those data that are collected by research. Such data are already existing. I have
collected such kind of data by asking questions and queries to the managers, personnel and
employees of the company. Such data are recorded in the books. After then prepare report.

Secondary Data:
The project report is largely comprising the secondary type of data collection.
Such type of data is already existing that are collected previously by others. The sources of
secondary data are newspaper, magazine, websites, books, etc.
 Chapter- 6

Data Analysis & Interpretation

 DATA ANALYSIS AND INTERPRETATION

 Home Equity Loans:

A form of finance to the customer by way of mortgage of existing property to the

financier for taking a loan for some other purpose. The current market value of the
property is the basis for providing home equity loans.

 Home Extension Loans:

The purpose of this loan is the extension of existing houses take the addition of rooms,
toilet facilities etc. Such loans fall under the category of home loans.

 Home Improvement Loans:

These loans are provided mainly for repairs and maintenance of existing houses- These
could include internal and external repairing, waterproofing and roofing, complete
interior renovation, tiling and flooring etc.

 Home Purchase Loans:

Finance provided for the purchase of ready-made houses.

 Land Purchase Loans:

These loans are being provided for the purchase of land to the purpose of construction of
residential houses.
In a market environment where it has become increasingly difficult to earn high quality returns
in stock and bond markets, many are turning to alternative investments. The promise of
alternatives is to improve portfolio yields and to provide investors unique, untapped
opportunities to invest in less efficient markets; at the same time, these investments pose a new
set of challenges and issues for investors.
While there are a variety of alternative investments available, one of the most important options
in the alternatives space is private real estate offerings, whether one is talking about investing in
funds or a specific property. This article will introduce the benefits and challenges of investing in
private real estate offerings and share some tips for evaluating these investments.
But before we jump in, a quick programming note. Two of the most common means of investing
in real estate—real estate investment trusts (REITs) and direct ownership of real estate—will not
be covered here and will be the topic of a future article. This article will focus on investments
that are smaller and more targeted than the typical REIT, but less involved and time intensive
than direct ownership. That is, investing in a fund or project managed by a professional, third-
party investment manager.
In recent years, private real estate funds have been raising money at consistent levels between the
$20-40 billion range per quarter according to Preqin. There are several different investment
themes deployed that scale through certain risk profiles: from “core” (safe, trophy properties) to
“opportunistic” (highly leveraged investments, with little to no cash flows). Incidentally,
opportunistic funds are the most popular choice for investors right now, in terms of funds closed
and aggregate capital raised.
Chapter-7

Suggestions
Real estate investing doesn’t come with a map, and the road to riches is often winding. That
being said, there are things you can do to put yourself on the right path and ensure your best
chances for success. Listening to real estate professionals and successful investors is a great
place to start. 

1. Find rental properties in emerging neighborhoods

“Rental properties represent a great way to get involved with real estate investments. Emerging
neighborhoods offer growth potential and tax incentives for buyers. Buyers that purchase
properties in emerging neighborhoods maximize profits and ensure that their income covers their
costs.”
-Ralph Di Brugnara, President of Home Qualified
 

2. Diversify your investments

“It's commonly preached that the best real estate investment is the one in your backyard. While
there is merit to understanding the area in which you're investing, I believe that you're truly
limiting your profitability potential by only considering a small geographic area.
By considering investments in other states and cities you'll have a large pool of available
investments and ultimately better opportunities. Investing across a large geographical area also
further diversifies your investments and protects your portfolio against the volatility of local
markets."
-Jeff Miller, real estate investor and co-founder of AE Home Group in Maryland
 

3. Don’t over-rehab
Corey Chappell, a Closing Options Analyst at 181 Close Now offers some great property
investment tips (which we’ve included in the next several points). He starts by explaining that
investment properties don't need to be on par with Pottery Barn when it comes to accents and
fixtures.
“Some high-end houses have to have the nicest countertops and fixtures. Lower-end houses need
to look nice and modern but don’t need the most expensive everything. It’s OK to budget. It’s
OK to go with the middle-of-the road fixtures.”
-Corey Chappell, Closing Options Analyst at 181 Close Now 

4. Don’t over-leverage yourself

“You can be very successful for a long time and still go broke if every rental is mortgages to the
hilt. If you keep some of your rentals free and clear and some of them financed, then you’ll have
a good mix of safety and still stretching your resources.
Do it right, and a few longer-than-expected vacancies or dips in your cash flow doesn’t have to
be the end of your career.” 
-Corey Chappell, Closing Options Analyst at 181 Close Now 
 
5. Look into single-family rentals
“Single family homes are your safest bet for attracting the correct tenant. Everyone would love to
live in a house. Some people just cannot afford to, or do not want to own. The single family
home historically has over the last hundred plus years always appreciated.”
-Don Wede, President of Heartland Funding Inc.

6. Do your homework before listening to paid advisors

“In many cases, your trusted and paid advisors (broker, wealth manager, tax accountant, etc.)
may suggest you avoid real estate in your portfolio altogether. They generally give the same tired
reasons that it’s ‘illiquid’ or ‘too management-intensive.’ Those can be valid arguments based on
your specific situation, but that’s not the real reason they want you to avoid real estate.
Stockbrokers don’t get paid for you to invest in real estate. There’s nothing in it for them, no
commissions and nothing to do. That is, unless they want you to purchase a high-cost, non-traded
REIT, but now you’ll know their true motivation. You need to do your own homework to decide
if the potential cash flow from real estate is right for you.”
-David B. Saxe, Calvera Partners, LLC
 

7. Nip maintenance issues in the bud before they get bigger

"One thing that's helped me quite a bit is writing a bi-annual walkthrough into the lease
agreements. This is mainly to ask the renter if there's anything they're noticing that needs to get
fixed.
We'd also inspect under all the sinks and around the toilets, etc. for water damage. Finding small
water leaks before they become big problems has saved me a lot of money."
-Suresh Srinivasan, Chief Marketing Officer, Roofstock
 

8. Join a local networking group

“There are literally thousands of REI (real estate investing) groups all across the country. Join
one or two. Participate in a few. Find the ones that have the people and topics that you are
interested in. Try to find groups that don't ‘pitch’ products but really educate and mentor you in
the areas that pique your interest.”
-Keith Jenkins, Nationwide Real Estate Investment Clubs

9. Leverage the experts

“Investing in real estate has a lot of moving pieces. When you're first starting off it is critical that
you leverage experts in each area of the project to ensure success and minimize mistakes.
Services like Rootstock are a great option for investors since they're a team of experts who have
already conducted the due diligence on your behalf. I find that by keeping things simple, less
mistakes are made, and you become more profitable in the long run. There's no point in
reinventing the wheel when there is already a proven process available to you.”
-Evan Roberts, real estate agent and investor with Dependable Homebuyers in Baltimore, MD
10. Get to know your market

“When investing in real estate, it is important to learn about and become an expert in your
selected market. Being well informed on the current trends, including any decreases or increases
in the average rent, income, interest rates, and even unemployment/crime rates will allow you to
recognize the current market status and plan for the future.
Being able to constantly forecast and stay a step ahead of the market can help lead you to
become a more effective real estate investor.”
-Sacha Ferrand, Founder & Head Principal, Source Capital Funding, Inc. and Texas Hard Money
 

11. Understand crime rates

“Research the area's crime rates. We failed to do this when we bought our first property. We had
the hardest time finding new tenants when the first set of tenants moved out three years ago.
Out of desperation, I advertised a move-in bonus after six months of vacancy. I even reached out
to numerous affordable housing programs and nonprofits in the area to see if they had interested
clients. After speaking with some people and doing online research about the area, I learned that
it had the highest homicide rate in Los Angeles County... no wonder no one wanted to live
there!”
-Ky Trang Ho, Key Financial Media LLC
 

12. Set a budget and timeline (and expect to go over both)

“My rule of thumb is that you should set aside 50% more of your budget as reserves, especially
as a new investor. Your budget almost always goes higher than anticipated and when you're
rehabbing houses, one issue can detect another one, etc.
For example, fixing a leaky pipe may turn into replacing the pipe and removing mold damage
and replacing the drywall. In terms of timeline, I would say that the same thing goes: If your
timeline is 60 days, prepare for the project to take 90 days. With added expenses, comes added
time.”
-Allison Bethell, Fit Small Business
 

13. Have a rainy-day fund

“When buying rental houses for cash flow, make sure you account for all of the expenses and
have rainy day funds set aside for future expenses. For the last decade of owning rental
properties, our annual expenses (excluding debt servicing costs) have averaged between 45-55%
(depending on the year) of the gross rent. These are for properties that rent between $800-1,000
per month.
If you are renting out higher-end properties, your ratios may be different, but for most markets,
your ratios will be very similar to these. Make sure you keep a reserve in place to cover
unforeseen expenses, because you never know when they will hit.”
-Brady Hanna, President of Mill Creek Home Buyers
 

14. Treat your investments like a business

"Real estate investing is a business and like every other business it requires purposeful planning,
execution, and management. The most successful businesses are run by high quality people at
every level of the organization.
Those that ignore this fact are destined to struggle or even fail. Regardless of how big or small
you want your to grow your real estate investing business, if you want to succeed then you must
run it like a business."
-Chris Counds, Texas Ideal Properties
 

15. If you can’t beat the price, beat the terms

“Although offer price is the first thing sellers look at, it is not the only thing. Terms are
important. Often, someone else will offer more than you. If that’s the case, consider giving the
seller favorable terms.
You can improve terms by using the seller’s escrow agent, reducing the inspection period,
increasing the earnest money deposit, having a sooner closing date, and limiting appraisal and
financing contingencies.”
-Lucas Machado, President, House Heroes LLC
 

16. Count on vacancies

“Unless you have deep pockets, you want to avoid the hole a vacancy creates in your cash flow.
The only way to do this is to factor it into the cost of carrying the property. For most landlords,
this means assuming that not all months in a year will produce an income.
For some that means 2% less in revenue, for others, it's as high as a 10% loss in revenue. The
key is to assess the property, the type of tenant and then to factor in how much revenue loss you
should expect on an annual basis.”
-Michael Jakobczak, Sales Representative, Zolo
 

18. Know your tax laws

“Now more than ever, it’s crucial for real estate investors to be up-to-date with the new emerging
tax laws. This means more than simply knowing what a Schedule E (Form 1040) is—it’s
knowing how to file for the right deductions and taxes based on your state, county, and city.
For example, the new tax code allows residential property owners to deduct personal property
costs (including furniture) and benefit from the reconfigured bonus depreciation rules.”
-Nate Masterson, Marketing Manager for Maple Holistics
 
 Make your money when you buy
“It's easy to overpay for real estate, especially in this market where things are selling quickly. In
general, if you're keeping the property, don't count on appreciation as a way to make money. It
can work but it's still a higher risk than buying right.
If you're buying a rental, look for homes that need a bit of work and have cash flow from day
one. Don't forget to add in budgets for capital expenditures and routine maintenance.”
-Joe Horan, Owner of Wrightwood Homes

 
 Have multiple exit strategies
“One should never buy a property without having multiple exit strategies. Take flipping for
example. If you're just starting out or don't have a ton of extra capital, you want to mitigate your
risk factors by buying properties that have good enough numbers to be a rental as well.
If you're buying flips and the market tanks, but the property would be even or negative cash flow
when rented out then you're most likely going to lose tens of thousands of dollars.
Flipping starter homes that are in the price ranges that can be rented out for solid cash flow every
month allows you to either build wealth by keeping them as rentals or mitigate your risks when
things go sideways.”
-Shawn Breyer, Breyer Home Buyers
 
Learn about market cycle theory
“Try to invest in the right phase of the cycle. This is not speculating, but trying to generally
understand what will happen with the real estate prices in the following five years.
I've always purchased my investments during recession and early stages of recovery phases. This
has enabled me to earn significant capital gains in addition to rent income.”
-Paul Koger, Head Trader and Founder, Foxy Trades LLC 
 
Chapter-8

Conclusion
 Conclusion

As a conclusion of real estate studies in India, we can see that as far as real estate is concerned,
the bar of investment has significantly raised. India has immense scope for building
infrastructure, in addition to increase investment returns by 25% which was just 12 to 15% past
decade. The commercial real estate yield in India is larger than any other country, thus making it
one of the most popular destinations for real estate investment. India is on the verge of
witnessing a sustained growth in infrastructure buildup. Infrastructure investments continue to be
the most important growth driver for construction companies. Demand-supply gap for residential
housing, favorable demographics, rising affordability levels, availability of financing options as
well as fiscal benefits available on availing of home loan are the key drivers supporting the
demand for residential construction. However, there are potential constraints for domestic as well
as foreign investments in India. Absence of a single regulator to monitor business practices
prevailing in Indian real estate market is perceived to be a risk factor by investors.
Bibliography
 BIBLIOGRAPHY:

BOOKS:

• Investment Analysis & Portfolio Management- 2nd Edition Prashana Chandra . Tata Mcgrill
Publication, New Delhi.

WEB REFERENCICES:

• http://www.investopedia.com

• http://www.indianground.com

• http://www.economywatch.com

• http://www.realestateindia.com

• http://www.siracusaco.com