There are many ways in which you can find a great property for your real estate investment. The problem lies in the fact that many would be investors aren’t exactly certain what specific types of investment they wish to make. Unfortunately, the type of investing will greatly affect the type of property that will best suit your real estate needs. This article focuses on finding a great property for the purpose of flipping or rehabbing a property.

Seek Bargains

This is absolutely a necessary step when it comes to finding properties with excellent potential as flipped properties. Bargains are often sold at bargain prices for a reason. The good news is that many of these reasons are purely cosmetic and quite simple to fix. Finding a realtor that is willing to work with you for lower prices, bargain properties offer an excellent place to begin. If he or she is a knowledgeable professional you should have access to properties that would have been unavailable to you had you continued the search without the assistance of a professional.

Another great place to find bargains of this nature is to search through foreclosures, auctions, and homes that are preparing to enter into foreclosure. While not always the case, there are many in these situations that are willing to be a bit more flexible with the price. Never offer full asking price first. Start low and negotiate up. This may lose some properties but in the end it will be a much more profitable venture if you can get the properties you want for a smaller investment.

Know the Neighborhood

Before placing a bid on a potential property for flipping you need to learn as much about the neighborhood as possible. You do not want to place a family home in the middle of a retirement neighborhood, nor do you want to place a potential bachelor pad in that type of area. You also want to avoid areas that are entering a state of decline, as the rehab efforts are unlikely to achieve the profits you are hoping to receive. Instead, look for bargains in areas that are approaching some sort of renewal or have very low crime and excellent growth potential.

If you are rehabbing a home that is meant to appeal to families make sure the neighborhood is safe, has a relatively low crime rate, access to good schools, and entertainment opportunities that may appeal to families. These things will affect the price you are likely to be able to expect once the rehab efforts have been completed as well as the type of renovations you will need to perform on the property. Buying a property in an area that you know nothing about is like buying a property without an inspection-which brings me to my next point.

Get a Thorough Inspection

This is one of the most important steps in the process of selecting the perfect property for your real estate investment needs. A qualified inspection will prepare you for any problems that may arise during the course of your work on the home. These are things that will affect the amount of money you should offer on the home, the amount of money you will need to invest in repairs, and the amount of money you can expect once all is said and done.

Failing to have a complete and proper inspection can lead to disaster when the renovations begin costing extra money and time as efforts are undone in order to get to the root of the problems as you go. There are very few things that can save you the time or money that having a decent inspection can manage to save. Inspections can also make you aware of any structural problems, code problems, and other problems that may mean the difference between this property offering a possible profit or a probable loss. It is much better to be armed with this knowledge before ever making an offer on the property in question.

Realize That You do not Need to Buy the First Property You See

This is an important thing to remember. If the first property doesn’t speak to you, move on until you find one that does. This process is part science and part inspiration. If you are uninspired by a property it is unlikely that this property will suddenly take on a life of its own in order to suit your real estate investment needs. Keep searching until you find the property that meets all of your needs in order to find the perfect property for your first or your fiftieth flip.

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Flipping houses is becoming increasingly popular. Unfortunately, the popularity of the idea is creating a bit of competition among those who would love to try it out for the first time. The increased competition often serves to drive up the costs involved in purchasing the profit, which only manages to lower the profit potential. However if you find a good deal and feel that the property is a good candidate for a flip you can ask yourself the following questions to help you determine whether or not the property really is a good candidate.

1) Have you had a qualified inspection and determined that there are only minor repairs that need to be made to the property and the landscaping? This is important because every repair that needs to be made will eat into your budget. You want to complete the project with as little extra money invested as possible in order to get the greatest return on your real estate investment possible.
2) Is the property suitable for the neighborhood? By this I mean is the property a three-bedroom house build for families in the middle of a retirement community or is it a one bedroom, cottage-style home in the midst of family houses? These aren’t exactly a good match and can cause problems when it comes time to sell.
3) Can the neighborhood bear the price you need to bring in from the flip? If you are creating an upscale home in a marginal neighborhood you are almost guaranteeing a loss on your investment. You want to find a house in need of repairs selling cheap in a neighborhood of much better houses so that it can bring in the profit you are hoping to get when all is said and done.
4) Can you make the changes you envision for the house on your budget and without significantly changing the structure of the house? This is a biggie and one that often gets overlooked. You do not want to start knocking out walls or creating additions when flipping a house. That is something you should leave for the new owners. You want to make as few waves as possible and only make changes that will improve the value of the home.
5) Can you improve the value of the home enough to make it worth your while in a short amount of time? This is another big deal when it comes to a house flip. It takes time and money to make the changes that most “flippers” have in mind for their investment, especially first time flippers. Do you have the time to stick with it and the money to cover the carrying costs while you are in the process of making the changes?
6) Is the property in a high demand neighborhood, city, etc. for selling properties? Another common mistake is buying in areas that are hard sells for buyers. It is often quite simple to find lower priced properties that are attractive at first glance however; if you can’t sell the property you purchase to flip it really defeats the purpose of putting all that time, effort, and money into making the improvements.
7) Can you do the work or will you need professionals and if so, will it still be cost effective? Be careful that you do not overestimate your abilities in this if possible. It is great to think you can put down a hardwood floor but the reality of doing it is quite another matter. Be sure you have a realistic understanding of the potential costs involved in the flip and whether or not the property will still be profitable in the worst-case scenario.

Answer these questions when checking out potential real estate investment and house flipping properties and you should be well on your way to a successful flip, at least as far as the selection of the property goes. You should also find a house to flip that you like as you will likely be spending a great deal of time there.

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Money management during any real estate investment venture is an essential skill. If this is your first time flipping a property it is probably more important on the first flip than any other as you need to fully realize how much things cost and how quickly those expenses can up. It is so simple for the budget on a house flip to get completely out of control. For this reason you need to take control of the financial situation from the very beginning.

Begin by establishing a realistic budget for the entire project. If you find yourself spending more money in one area than you had originally planned you need to either revisit the initial budget and plan for adding more money to the pot or you need to make cost lowering adjustments elsewhere along the way to recover the excess. You will need to have a firm idea of the projects you are going to tackle, big and small, as well as the costs involved in each project. Take a walk through a hardware store and get a firm grasp of today’s prices on the hardware, equipment, and supplies you will need to complete the job.

Use contractors when necessary but sparingly. There are times when it will cost much less to use a contractor on a project than to muddle through on your own. There are also times when local laws require a contractor. You need to use contractors for these times but you need to avoid paying the princely labor costs contractors charge for things that you could easily do yourself. You never want to spend a penny on a flip that you don’t need to spend and labor costs are a huge budget buster.

Get permits first and up front. Time is money when you are flipping a house and once you start the work that time is precious. Make sure you have all the permits you need and that they are paid for before you begin the project in order to save time and money after the project has commenced.

Then create a habit of accounting for every penny spent throughout the day at the end of every day. This becomes a good habit to have for your first and all subsequent flips. By doing this you will have a solid grasp of how much money you are spending as well as how quickly you are spending it. You will need money to spend on little things throughout the course of the project so if you are spending money too fast up front you may not have the money needed to take care of the small details that mean a lot when all is said and done.

One huge way to better manage your money during a house flip is to make a conscious decision and consistent effort to work according to your tastes. Chances are quite good, especially for a first flip that you will be working on a house for those who have less financial means than you may have. For this reason you need to keep your project within the budget of your buyers. This will save tons of money. In other words a lower income community cannot absorb the costs of granite, marble, and hardwoods in most situations so don’t go to that expense.

In order to turn a solid profit when flipping a house or doing any type of real estate investment you absolutely must have a firm grip on your money, where it is going, and what your plans are for the money. The less money you spend the more money, in many cases you stand to bring home in profit. Spend the money you need to spend in order to improve the value of the home but avoid luxury expenditures that aren’t necessary for the neighborhood or the home in question in order to maximize the potential profits you can bring home.

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One of the rising stars when it comes to real estate investment is known as ‘flipping’ properties. This works by buying properties that are in need of either minor cosmetic repairs or in need of serious renovations, doing the work, and selling the home for a much greater price. In theory this brings in a significant amount of profit in a rather small amount of time. This is the case for many who attempt to flip properties but it takes a little more than the idea in order to make the process work. For this reason, there are many who end up sacrificing profit or losing money in the process when plans aren’t well conceived.

If you are considering a future in real estate investing, this is one of the quickest ways in which investors can turn a profit. It is also a method for bringing in high profit in a short amount of time. Unfortunately, this once closely guarded secret has gained some degree of infamy and there is fierce competition for the undervalued properties on the market as more and more would be investors decide to throw their hats into the collective ring.

If you are considering real estate investments in general and house flipping in particular there are some things you should keep in mind.

1) Treat this as a business rather than a hobby. Far too many investors do not take their investments seriously. This is a mistake because in this business time is money and every month that the house isn’t sold is a month that the house is costing you money. Create a plan, make a schedule, and stick to them both.
2) Remember that this is a business. You are not investing in properties to make friends or seem nice. You are in this business to turn a profit. You cannot be timid about making low offers. The ability to buy low and sell high is the lifeblood of this particular business. This means that you are quite likely going to hurt feelings and make people angry (because they often place emotional prices to their homes that are simply not economically feasible). If you cannot deal with this reality then you are going to have some degree of difficulty gaining the high profits you are seeking. Nice guys finish last and you can’t really afford to do that in this line of work.
3) Pay attention to the market. This is vitally important. Many ‘flippers’ lost their shirts in the recent near collapse of the housing market around the U. S. The truth of the matter is that the indicators have been building for years. In cities where there was once a shortage of viable housing options there are currently surpluses. This does not drive the value of properties down so much as it brings them back to their proper values. Investors that were counting on an ability to sell above the actual value of the property were left holding the bag (or rather notes) on these properties for quite some time until they could be sold. Some never managed to sell these properties and were left dealing with the expense in addition to the costs of the upgrades. Do not buy in an inflated market if it can be avoided unless it is during the very beginning of the inflation (before property developers have the opportunity to create a surplus).
4) Do not allow it to become personal. Far too many first time house flippers decide to create a work of art rather than a business investment. It is tempting when making cosmetic and structural repairs to go ahead and create a dream home. The problem with this is that depending on the particular market you are unlikely to recoup the costs involved in doing so. The goal is to invest little and profit large. Granite countertops are lovely but not at all necessary in a neighborhood filled with those of humble means. Cater to the tastes and budgets of your target market rather than your personal tastes.

Despite the risks involved in flipping houses as a real estate investment there is no denying that fortunes have been made doing just that. Even in the current housing market there is a great deal of promise available to those who can do the work quickly and inexpensively. People still want to buy these lovely homes rather than buying a home that needs to be made over after the price of purchasing.

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While many people have very specific dreams of enjoying the bountiful profits that can be made from flipping houses very few people put too terribly much thought into the process or any formulas that might be pertinent to success when it comes to flipping houses as a real estate investment venture or for the sake of building a nice comfortable lifestyle or retirement. You will hear a lot about the things not to do when it comes to flipping houses but very few people take the time to mention the things you absolutely must do in order to successfully flip a house and thus begin your ride on the road to real estate investment riches.

1) Do put everything to pen and paper and plan it out carefully before you begin. If you are going to enter into this to make money you need to treat it like a business. This means you need to have a plan of action and make every effort to work towards carrying out that plan.
2) Do establish a budget for the entire project. You need to have a plan for how much money you are willing to invest in the property itself, how much for renovations, and how much money you need to make in order to be a worthy investment for your time and labor. A house flip is a lot of work in order to pull it off successfully. You want to have a good idea of how much homes in the neighborhood are worth, the value of your property as is and the estimated value of the property once improvements are made. In addition you should also have a pretty firm grasp of the costs involved in making the repairs in order to create a realistic budget for the entire project.
3) Do have an inspection. This is the single most important detail that can save you a great deal of time, money, and heartache when everything is said and done. Be prepared to walk away if the inspection determines that there is more work needing to be done than simple cosmetic repairs. You want to make changes that people can see because those are generally the changes that drive up the cost of the house. You want to avoid needing to make changes and improvements that aren’t visible but are very necessary. If you need to invest a lot of money and labor into the house you need to seriously consider the realistic profit potential the property offers. If it isn’t significant then you need to walk away before the property becomes a real estate investment money pit.
4) Do know the neighborhood and plan your flip according to the needs of the area rather than your personal tastes and needs in a home. This is another thing that many first time flippers forget. This is not a personal project it is a business project and you need to treat it as such. Keep costs down and feelings out.
5) Do remember that you are in the market to make money not waste money when it comes to establishing an asking price for the property. You’ve poured blood, sweat, and probably more than a few tears into your flip but you cannot set the value of the property by the effort you’ve placed into it. Have realistic expectations of how much you stand to earn from your efforts and how much you are willing to go down on the price in order to walk away with some profit in your pocket.

You should also take a moment to reflect upon the fact that many first time flippers actually lose money on their first flip. If you turn a profit at all, even a small profit you have learned many valuable lessons that you can carry with you into future flips and make more money. More importantly the lessons you learn from your first flip are lessons that money really cannot buy so it is worth a lower profit or even taking a slight hit if your experience makes you even more money in the future as you continue along your real estate investment path.

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One question that seems to be commonly asked among those who are interested in real estate investment, particularly in flipping properties, is whether or not a real estate inspection is really necessary. The long and short answer to that question is absolutely and I will do my best to explain exactly why this is so.

First of all, a real estate inspection is the act of having a qualified (and in many states, licensed) professional take a look around the property you are considering and informing you of obvious and potential damage or problems with the property. This is not something you want your uncle Bob doing, unless of course, good old uncle Bob has had the training and experience to know what to look for in an inspection and know what those things could mean.

Many who are planning to flip properties enter into the situation (particularly first time flippers) with the attitude that they know there are problems with the property and that is why they are purchasing the property. The problem is that the untrained eyes may miss some problems that should be addressed before moving along to other problems.

For instance, if there were obvious signs of plumbing problems that could result in a leak behind the wall, you wouldn’t want to paint that wall or replace the floors until you had the possible leak checked and either confirmed or denied and repaired if necessary. Otherwise you would likely need to undo the work (wasting both time and money) that had already been done by the time you found out about the leak that a competent inspector would have told you about before you even began working on the property.

Inspections are great before placing the bid on a house because they actually give investors a bargaining chip. For the true (at heart) investor this is a fact that simply cannot be ignored as it directly affects the bottom line price. If the roof needs to be replace you are justified in offering a lower amount. If the electrical system needs to be updated, this is something that should be adjusted or amended in the final offer. These are also things that are easily identified by a qualified and competent property inspector. Any thing that can save time and money is great when investing in property and an inspection can do both.

Another great thing about a good property inspection is that it often sheds light on the amount of money that will be needed in order to get the house in good working (or flappable order). Knowledge is very important in this line of work and can mean the difference between taking on a project (if the repair budget won’t exceed the eventual value of the property) or walking away if the expenses would be too great to turn a decent profit. As an investor you should never take on a property that is pretty much guaranteed to be a failure, it is simply not a wise financial move to make. It doesn’t matter how much the property calls to you on a personal level in the business of investing the bottom line is the only call you should be taking.

More importantly however than any of the things mentioned above, a proper home inspection can inform you of potentially hazardous conditions within the home that the untrained eyes may not take notice of. Some of these things include toxic mold, which can be financially disastrous as well as hazardous to your health; foundation issues, and structural damage that is threatening the integrity of the property. An inspector should also notice the structural integrity of homes that could affect your home if they are weakened or fail all together. While these things seem so simple, it is often the simple things that lead to the greatest disasters. Whether or not you realize it, a good home inspector is one of the best tools you can have in your arsenal when it comes to flipping real estate as an investment venture.

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There are many questions that should be asked before embarking upon a career of real estate investment. The first and foremost question however should be whether or not you are truly committed to making real estate work for you. This is not a business for the faint of heart. In order to truly turn a profit you must be at times ruthless when dealing with buyers and sellers but ethical to a fault when it comes to the work that must often be done in order to get a property in sellable condition.

The reason a serious commitment is needed in order to make real estate work for you is simple. There will be ups and downs along the way. The stock market experiences rises and falls on a regular basis. Just as you cannot dump all of your stock over one bad day the same holds true even more so in the realm of real estate investing. Property values in general rise gradually over time. This means that even if the values in a community falter chances are that they will eventually recover.

Those who bank on the slow and steady growth in the value are referred to as buy and hold investors. These investors are truly committed to their investment. Some of them elect to hold the property as a vacation property while others opt to earn an income on the property by renting it out to other families or vacationers, whatever their choice may be.

This is a great way for many people to enjoy the luxury of a vacation property without absorbing all of the expenses involved in owning a vacation property as the rentals will help compensate some of the costs when the owners (investors) are not in residence. This is a fairly common practice in high demand tourist areas in which people often enjoy vacationing. These types of investors are what some people refer to as serious real estate investors though all real estate investors need to take their purchases seriously.

Those who own rental properties must also be committed to making their investments work for them. Rental properties are not a ‘hands off’ type of investment, as they will need to be maintained in order to remain in demand by tenants. You must also make constant efforts to keep these properties managed and filled along with remaining certain that you are collecting your rent each month and that the properties aren’t falling into a state of disrepair or abuse by tenants.

Many investors retain the services of property management agencies in order to handle the minutia of month-to-month details and collections. This is a great idea whether you have one lone rental property or a vast portfolio of rental properties. Even better however, is the fact that if you keep your rental properties in reasonable repair throughout the years they can become liquid assets in time. In other words, they may actually pay for themselves a few times over if you invest for the long-term rather than focusing on the moment.

No matter what type of real estate investment you intend to have it is important that you are prepared to make the commitment to profit or profitability that is necessary in order for your venture to be deemed a success.

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It doesn’t really matter what kind of investing you are participating in, it’s almost always a wise idea to have multiple streams of income in order to maximize your profits while spreading your risks. Even within the confines of real estate investing there are different types of investing that can help you spread your risks when markets meet turbulent times and this is a very good safety net for those who do not want to feel as though they are gambling away their investments on a real estate market that is fickle on its best days.

You really have two course of action when it comes to bringing in multiple streams of income when building your financial portfolio. The first is to spread your real estate wealth and investments across several different types of real estate investments. There are a few types that come immediately to mind. First there are rental properties. You have two options even with these. You can either choose to rent properties outright to families, students, singles, and the elderly in your town or you can offer a lease or rent to own situation for those who have struggled in the past but still have the dream of home ownership.

Other options for bringing in multiple streams of income through real estate is to have a few rental properties and couple those with a few flips in the works, perhaps a commercial property or two, and a pre-construction deal or vacation condo in the pipelines. One thing is certain you should always be on the lookout for your next real estate investment if you really want to make good money in this business while having a little added security. Rentals are passive income for the most part, especially if you have a solid property manager taking care of the details and the other investments are often icing on the cake.

If you want a truly diversified portfolio however, it is a good plan to include a few investments that aren’t related to real estate investing. While I firmly believe that real estate investing is the way to go for most people there is much money that can be made in other fields and it would be pointless to discuss multiple streams of income without mentioning a few that were unrelated to real estate investing. Retirement plans are a great option and you can now invest in a retirement plan of your own even if you are self-employed. It is definitely worth considering as yet another stream of income, even if it is income that you will need to wait a while to receive. Franchise businesses are often great money makers for those who need more immediate results from their investments efforts, and stocks and bonds are also great long term investment strategies.

The truth is that there are many things you can do to create even more streams of income to add to your real estate investments. From making money online through affiliate marketing, blogs, and direct sales you can also tackle brick and mortar businesses, though these tend to be just as time consuming as real estate. The point is that you want to bring in money from different avenues and real estate investing is one of many different routes to explore when deciding on your investment future and establishing those multiple streams of income.

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The financial industry greats will be the first to tell you that real estate investing has the potential to bring in serious profits. They will also gleefully inform you that the risks in some cases far outweigh the potential, especially if they are among the more cautious investors in the industry. Those who have made their fortunes in real estate however will tell you that investing in real estate is worth every ounce of risk when you manage to work through the rough patches and find your way to real estate investing fortunes.

Commercial real estate is somewhat unique among real estate investment types. This is the type of real estate that requires a high investment to get into the game, much higher than most residential property and poses equally great risks depending on what you plan to do with your commercial real estate investment. Of course you will also find more than a few options for your commercial real estate investment that many investors find appealing.

Most investors find leasing office or building space to be the safest route to take when it comes to real estate investing is the path of leasing office space or warehouse space to businesses. They feel that this is a relatively steady source of income because most businesses prefer to keep their locations as long as possible. Smart business owners are well aware that customers, clients, and vendors need to be able to find them in order to do business with them and for this reason, prefer to keep their business in the same location whenever possible rather than reestablishing themselves in different locations year after year.

Commercial real estate investing is a bit of a different animal than traditional residential real estate that many of us are more familiar or comfortable with. You will need to do a lot of research before jumping in with both feet with this particular sort of real estate investment. Commercial real estate investments can take on many forms. From strip malls and outright shopping malls to business and industrial complexes to sky scrapers and high rise condos you will find all manner of commercial real estate interests. Whether your interests lie in business or personal types of commercial real estate there are significant profits that stand to be made.

Unfortunately, beginners often find the path to commercial real estate investing laden with thorns. You will need a massive contribution to fund your commercial real estate pursuits and it is probably best if you can find a group of investors in order to share some of the risks. Real estate, in and of itself, is a high-risk venture. Commercial real estate bears a little more of the risks in the beginning however once you’re established and people, particularly investors, know your name you will find that path to real estate wealth is much easier obtained through commercial real estate, if you play your cards right than many other types of real estate investing.

To create even bigger profits it is often best to work as part of a team of investors when it comes to commercial real estate investing. Not only does this approach spread out the risks to some degree but also helps find the good buys, spreads the labor pool, creates an environment of ideas, and allows you to bounce those ideas off one another seeking temperance and enthusiasm for members of your investment group in like measures. It is a great idea for those who are looking to build a prosperous future in the field of commercial real estate investing and can be extremely profitable for all involved.

Commercial real estate investing can be extremely intimidating if you allow it to be. Avoid putting yourself in a situation where you feel out of control or completely uncomfortable for your first commercial real estate investment but if you have the means, the price is right, the deal appears to be solid, and you feel you are ready for the challenge, commercial real estate profits can be a serious motivation.

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Despite a recent slowdown, the U.S. real estate market continues to be a popular investment destination for foreign investors. Attracted by a desirable return on investment, many foreign nations continue to invest heavily in the U.S. residential and commercial real estate markets. In fact, in 2005, foreign investment in U.S. real estate reached 1.83 trillion.

To evaluate the impact of foreign investment on the U.S. real estate market, the National Association of Realtors (NAR) produced a 2006 report entitled ‘Foreign Investment in U.S. Real Estate: Current Trends and Historical Perspective.’ The report provides insights into the trends in foreign real estate investment, its impact on the U.S. economy, and the major countries that participate in U.S. real estate investment. Below are some highlights from the NAR report.

According to the U.S. Department of Commerce, the top seven countries that had significant holdings in U.S. real estate as of 2005 were:

Germany – 13 %
Latin America – 13 %
Australia – 11 %
Japan -10 %
United Kingdom – 10 %
Canada – 6 %
Netherlands – 6 %

The U.S. economy is wide open to foreign investors. Both investors and Americans significantly benefit from all this foreign investment. The NAR study estimates that without foreign investments in the securities market, the long-term lending rates would be four percentage points higher than the current rate, which would adversely impact the U.S. real estate market.

Foreign direct investment into the U.S. not only creates more jobs but also contributes to the demand for U.S. real estate. In fact, foreign investment may be responsible for creating two million U.S. jobs by the end of 2006, which further bolsters the demand for U.S. real estate.

Permanent and temporary immigration of foreign-born workers into the U.S. further bolsters the demand for real estate. According to the Joint Center for Housing Studies at Harvard University, 1.2 million net immigrants are expected to arrive in the United States annually. This immigration pattern is expected to offset the decrease in housing demand by post baby-boomer generations.

In summary, the impact of foreign investment and immigration into the U.S. will continue to play a major role in the U.S. real estate market.

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