Posts Tagged ‘real estate investment’

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Short Sale Investments That Will Work For You

Monday, September 6th, 2010

Every short sale investor has a specialty - that particular types of deals that they do better than any other. In many cases, the success of a deal can hinge on how familiar you are with the type of negotiations that go along with it. If you are just getting started in the short sale business, you may want to focus on a type of home or property that is straight forward, in today’s market, in order to boost your ability to find and do transactions.

One way to maximize your opportunities is to acquaint yourself with the HAFA process. The HAFA acronym stands for Home Affordable Foreclosure Alternatives, and it is the government has designed to help homeowners who cannot keep their homes avoid foreclosures. This program is mandatory in many cases - particularly if a home is occupied by the owner - so being familiar with the process can give you a huge advantage in the short sale process.

HAFA homes will almost always come with a long list of requests that may overwhelm other short sale investors. In example, before homeowners can qualify for HAFA, they have to attempt to qualify for HAMP (Home Affordable Modification Program), a federal program designed to adjust mortgage terms that can help homeowners retain their homes. Even if an owner just wants out of a home, if they want out through HAFA - and the incentives that come with this program - they have to try HAMP. Your ability to navigate the HAMP process can make you a more attractive candidate to ultimately perform their short sale.

You may want to stay away from the difficulty of federal programs all together. In that case, you will want to find homes and homeowners who just cannot qualify for involvement in HAMP and HAFA, since people who do often qualify are equired to go through the whole process whether they want to or not. You might want to specialize in vacation homes, second homes, rental properties or other types of properties that can and are distressed in this economy, but are not owner-occupied.

No matter what area of specialty you choose, creating a short sale niche for yourself can be a great way to get moving in this business faster. Also remember that there are many short sale investors out there who are looking for their own specialty deals, so if you encounter a deal that does not work for you, you may still be able to monetize that lead if you know someone who is looking for that type of deal or property.

If you haven’t signed up for www.FreeShortSaleCourse.com then you are really missing out.

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Dealing With The Deed-in-Lieu Of

Monday, September 6th, 2010

Recently, Bank of America sent out nearly 100,000 solicitations to distressed homeowners offering them a chance at a deed-in-lieu transaction. “Deed-in-lieu” refers to giving the deed to your home to a lender in order to circumvent the foreclosure process. You get to walk away from your home, and the lender declares the debt resolved because you returned the home, your collateral. Many lenders have announced that they will offer a variety of incentives for this type of transaction because it saves them a great deal of time and money in processing costs even though they may take a hit when they try to resell the home in today’s market.

Short sale investors see this new trend with concern, especially since some lenders have said that they find deed-in-lieu transactions preferable to short sale transactions since they don’t take as long. Also, homeowners who are going to lose their homes anyway may find this to be a more acceptable alternative since it is being portrayed as a route to 100% resolving the debt rather than worrying about being followed up with later for the remainder just when you have gotten back on your feet.

Short sale investors, should not be too worried about this. For starters, there are tons homes that will still go through the short sale process, and not all circumstances are going to warrant or qualify for a deed-in-lieu. You can also point out to homeowners who may be backing out of a short sale that unless the wording in their deed-in-lieu a arrangement states that the debt is considered entirely resolved by the return of the property, which is not always the case.

In addition, both deed-in-lieu and a short sale do go on your credit history and impact your credit score in a negative way, a deed-in-lieu can remain on your history for a full 7 years. According to new legislation, short sales may be removed as soon as 3 years in some instances.

In fact, some homeowners may opt for a deed-in-lieu transaction in place of a short sale transaction with you. Nevertheless, the current deed-in-lieu “push” could actually be good, since it may put a notch in homes that lenders were unwilling to short sell anyway. Just be willing to answer questions about this sort of transaction, then keep doing your short sales and helping individuals in trouble resolve their housing scenarios.

If you haven’t checked out www.FreeShortSaleCourse.com you are really missing out.

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Short Sale Hazards When Dealing With Rental Properties

Friday, September 3rd, 2010

As a short sale investor, you will often deal with landlords who may be facing foreclosure on rental properties. These short sale deals can be very attractive to traditional short sale negotiators who may have been “locked out” of many deals because of homeowner participation - voluntary and mandatory - in federal short sale programs. However, there are some complications that can occur with rental properties that may not be an issue with first or even second homes that are owned and inhabited by the property owner.

One of the biggest concerns for landlord-sellers bargaining short sales is that even in states that do not assess an income tax on conventional short sales in which a homeowner transacts a short sale on the home that he or she lives in, the short sale of a rental property often will result in the issuance of a 10-99 that will be viewed by the state as income. There are ways to deal with this and one is to appeal it, but when dealing with landlords you must remember that these individuals are subject to a different set of tax laws if they are short selling rental properties.

Also, landlords may find themselves in a distressed situation thanks to insurance issues. Particularly if they have made a claim recently, the insurance company may have hiked their rates or even canceled their policies. Due to plummeting equity in many properties and a number of natural disasters in recent months, finding new insurance for rental properties has been for the most part difficult.

While this may not impact your end buyer, it can effect you or another investor who is purchasing the property to hold or season. Make sure that the property is insured and insurable by you even if you do not plan to hold onto it.

As the rules and regulations on short sales change nearly day-to-day, investors much keep abreast of the changes. Only in this manner can you truly help distressed property owners who need a short sale in order to salvage their savings and exit a property.

PS if you haven’t checked out my Free Short Sale Course you are really missing outwww.FreeShortSaleCourse.com

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Short Sale Disclosures: Critically Important Tools For Protection

Thursday, September 2nd, 2010

Short sales will be critical to the recovery of the housing market. Banks and homeowners alike are relying on the short sale process to prevent the foreclosure tide from swamping the market and the lenders themselves. But as short sales are increasingly regulated and the target of more and more media focus, it becomes increasingly important for short sale negotiators - especially if they are real estate investors rather than the next homeowner - to apply stringent rules for full disclosure to their short sale transactions.

The most straightforward way to handle this disclosure is to include the fact that you are doing a short sale in the contract that deals with the transaction. Do not leave anything to chance. Note that you are doing a short sale, how the lenders are going to be satisfied and make sure that the contract itself allows for the resale of the property. You will be on firmer ground if you decide to “flip” the short sale if both the lender and the seller are aware that you may opt to do this.

In addition, many investors and real estate agents are recommending that you stay in touch with all lenders, even if they are the holders of secondary or tertiary loans and are less likely to get any direct satisfaction from a short sale. Making sure that the negotiation meets everyone’s needs or at least addresses their stake in the property can help prevent lenders from coming after homeowners later for the payoff of the remainder of the investment.

Also when you are listing the property in MLS, you may also want to disclose the fact that the property is a short sale - or that the owner, lender or both or open to a short sale - in the listing. Not only will this attract more attention for your listing since short sales are generally viewed to be a good way to purchase a property at a discount, but it will also cover your disclosure bases and make sure that there is no question in anyone’s mind that the transaction that you are doing is a short sale.

Ultimately, you can create a great deal of wealth, resolve serious financial crises for people in need, and help stem the tide of foreclosures in the country by being an effective short sale negotiator. However, you must be very careful to “dot your I’s and cross your T’s” when you are doing a short sale. Make sure that every aspect of your behavior and your negotiations are beyond reproach to establish the best short sale transactions you possible can and bring satisfaction to every party in the transaction, including yourself.

P.S. If you haven’t signed up for my Free Short Sale Course yet, then you are really missing out, go here: FreeShortSaleCourse.com

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When Buying Property Be Cautious About Your Impulses

Tuesday, August 31st, 2010

The values related to buying property undoubtedly are becoming more focused since the significant falls in house prices in the course of 2009. Investors are now re-entering the market place this year due to the current fall in home values.

There are some unique categories of buyer that look to purchase property Some look for purchasing their particular primary home rather than leasing a house. On the other hand, others look at property as a way of increasing assets and income from streams of earnings. This reason for buying a property has a tendency to occur when employment is at higher levels, and the overall economy is robust

Fears of shedding jobs have placed strain on the price of property in the world This has affected home values within primary market places where individuals reside. This has furthermore had in reality more powerful effect within secondary markets for example vacation home buys because of their more discretionary nature.

Second home buys are usually pushed a lot more by impulse. Purchases such as these are generally made whenever an individual is outside their own typical surroundings. Upon these occasions, that is generally the time when they make a decision to purchase a new home. At this time home buyers are often encouraged by strong marketing and advertising by overseas developers, fractional ownership companies, as well as local real-estate agencies.

Just how do individuals make decisions to purchase property during these conditions?

The purchase price base - in typical conditions developers fix prices as well as product at a lower price level. A purchasers decision is much more easy as their aren’t any significant barriers at these types of affordable prices. There is a tendency for people to become caught up simply by the thought of owning their own little bit of real estate in a “dream” location.

Payment conditions - appealing offers such as where initial booking deposits are quite affordable, along with installments during the construction phases when the construction is not finished, commonly known as “off-plan purchases”.

Investment returns - one more factor impressed on the buyer is that they will take advantage of revenue from their purchase in the form of rental returns. One of the typical strategies utilized by developers is always to make estimations of earnings growth in advance of financial institution interest rates on savings. Sometimes the actual earnings are unachievable while others assured returns are paid out, however in these types of circumstances the developer often increases the fundamental cost of the product to accommodate these kinds of incentives.

Package of extras - Developers will package their product making it much more attractive. An example listed here is where the product will include such things as free of charge furniture and also home appliances.

Investment in property often takes place when marketing and advertising by developers and also brokers offers an array of incentives. Often times ownership of these properties is beneficial, even though one should evaluate any property buy of this sort prior to making a commitment. Buying second properties in vacation destinations is common, thus gives property investments of this sort an important emphasis. Ensure that along with any purchase, you have the ability to make all repayments, that said these types of purchase are usually most attractive and will provide outstanding profits.

Thinking about investment on a tropical island, then search Koh Samui real estate, for the best selection of Samui property available.

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How To Keep Properties That Have Tax Liens Placed On Them

Sunday, August 1st, 2010

Tax liens can create quite an uproar in your life, but if you take the proper precautions you can avoid them. If, however, you find yourself if the frustrating predicament of having to deal with them you have no need to fear. There are several different routes you can take in order to pay off the tax liens and be released from you worry and stress… at least until next tax season rolls around.

First you should be aware that having tax liens on your property limits your financial possibilities. You most likely will not be able to pay off your tax lines with a loan because tax liens are reported to the credit bureaus. Another reason it is hard to get financing is because properties that have tax liens on them cannot be offered up as collateral. Finally you cannot even transfer the title of the property without paying off the tax lines.

One of the most common ways that people pay off their tax liens is by using an escrow account. This only works if the owner’s property is currently mortgages. Mortgage lenders are very willing to pay off your tax liens and then charge you back payments for them (usually divided up over a year) as well as charge you for future payments (also divided up over a year). They do this because the risk of losing your mortgage payment by the government seizing and selling the property is too high.

If you don’t want to keep the property you can easily sell it, despite the limit put on the transferring of the title. You can accomplish this by writing the tax liens balance onto the closing costs of the buyer’s contract. Many people find this is one of the easiest routes to take and by choosing this route you don’t have to be responsible for remembering any future taxes placed upon your property.

If you fail to pay off your taxes then the government will seize your property. They will either sell it at tax deed auction or to investors at as tax lien certificate. Tax liens can be highly profitable properties for investors, so they are constantly on the lookout for the best deals.

Your options are wide open. Let your mortgage lender handle your tax liens and you can pay them off over time, try to strike a deal for yourself through selling the property and including the tax liens in the closing costs, or simply let the government take the property off of your hands and deal with the situation themselves. Either way it will all come to an end and take the tax liens out of your hands.

Learn more about Tax Foreclosure Properties. Stop by No Risk Investor where you can find out all about Tax Lien Foreclosure Properties and how you can profit by them.

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Tax Sales Are In

Wednesday, July 28th, 2010

A lot has been said about tax sales recently. They seem to be all the rage in the real estate industry. Yet, many people don’t know what they are. They don’t know what they consist of, how to get involved, or if they even care to be involved with these tax sales. While tax sales are often mentioned in passing, not much is known about them.

Tax sales are held annually; sometimes more often than that. They are auctions held by the government to recoup back due taxes. These properties are sold in the form on tax lien certificates - an opportunity to make a good interest rate, but necessarily gain a property - and through tax deeds - where the investor becomes the new owner of the property.

You don’t have to go to tax sales to get the properties though. Another option is obtaining a copy of the list from the county auditor one to two months before the auction. Sometimes these lists are available online as well, often with weekly updates (some owners pay off their taxes before the tax sales). From these lists of properties you can do some research and get in contact with the property owners.

By contacting the owners you can try and work out a deal to get the property before anyone else does and without the stress of having to compete at auction. Tax payers who haven’t paid up to the point of the tax sales generally don’t have the money and are in a stressful situation themselves. They are often willing to work with investors and will let them secure a great deal, because it helps them out as well.

Research is key to getting the best deals on your investments. At tax sales you don’t get much information, so before you head out to an auction you’ll want to have at least some idea of what you are getting yourself into. You might want to visit the site, talk to the current property owners, and/or do a quick internet search before investing your money into a property.

If you are looking for an opportunity to make 18 to 50 % on your investments then you should look into tax sales. These real estate investments could be worth your time and money. You are guaranteed a certain percentage through tax lien certificates and can come out even more on top by investing in tax deeds. Tax sales are definitely “in” right now.

If you want to find out more about how a Tax Lien Certificates sale works, then visit No Risk Investor and see how to choose from among the best Tax Lien Certificates.

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Some Truths About Foreclosed Properties

Monday, July 26th, 2010

When you say the word FORECLOSURE, most people have two popular notions about foreclosed homes: that they are being sold at bargain prices and that they are only located in crime-ridden areas. The former is not always true while the latter is definitely not always the case.

The price of foreclosed properties can be 30% to 40% cheaper than their current market values but that doesn’t necessarily apply to all. Most houses will likely be sold at about 5% less than their current value. This is because banks decide the listing price with respect to the condition of the property. Many factors including, but not limited too, the location and the type of neighborhood where the property is will also affect the listing price of the property. A common notion that a foreclosed home can be bought cheap, only requires a little fixing up, and can be sold at a hefty price is a big misinterpretation. Well, some properties may fit this idea, but this is no longer the norm for this type of real estate investment.

For foreclosed property buyers, this means one thing: in order to get the best deal, you really have to put in the time and legwork in finding the best property on sale. One thing you have to remember if you are considering this kind of investment is that banks will definitely not sell off the properties at cheap prices in ALL situations. They know the value of homes that they have foreclosed and they don’t treat them as liabilities, but as assets. However in many cases the lenders are holding A LOT of “assets”…so you may indeed get a lower price.

What about those properties that sell at bargain prices? Most, if not all, require major repairs or have eviction issues, or both. Electric and plumbing issues are the most common across the country. Followed closely by wood rot and decay. These handyman specials can be a great deal IF you can do the work.

Foreclosed properties can be found everywhere and can come in any form, shape, size, and price. This is contrary to the popular belief that foreclosed homes can only be found in crime-ridden areas. Meaning, finding a country villa, log cabin, beachfront home, and prime property among many others are within your viable options. But you should never, ever expect that these properties are sold dirt cheap. As the old saying goes, “you get what you pay for.” So, if you are eying a premier foreclosed property, just expect to pay the real cost or slightly lower than its current value because in the end, saving you from the trouble of repairs and dealing with the bad neighborhoods are really worth the extra bucks.

Doc Schmyz has invested all over the US and Canada. He owns a free website that shares Real estate investing information for all over the US. Find real estate information by state

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Real Estate Investing For Long Term Gain.

Wednesday, July 21st, 2010

The real estate market has dropped out. Prices are falling around your ears. So does this mean that you should get out of property investing? No this is actually a great opportunity to increase your portfolio. When you are buy real estate it does not really matter where the market is, unless you are considering selling in the short term. If you are holding long term then you have to accept the market fluctuations if you can buy during a low period of a cycle that is the “golden hour” in real estate…but sometimes it is hard to find that hour on your watch.

Now that the market is experiencing a downturn it is a great time to be buying. Just look at the foreclosure lists. You have a massive inventory to choose from and most are at below market value. Go for positive cash flow whenever you can. In other words make sure your rental income equals or exceeds your outgoing including mortgage repayments. If you have other income you may be able to stand an extra $100 or more per month to top off the mortgage but try to avoid it.

If the property market is rising you can be confident that the value of your investment is increasing. That is where your profit is and you should be able to sell if necessary. However, that was a few years ago when the market was more positive but now the reality is that the market has dropped and you need to be able to hold long term without any worries. It may take a few years before we hit healthy real estate selling conditions again, let alone a property boom.

Meanwhile, concentrate on positive gearing and steadily increasing returns. This is a long term game and always has been. Look at property investing from a business perspective and do the sums before you buy. You need a decent return on investment and you need the rental return to cover or nearly cover the mortgage expenditure.

Having said all that, there is no getting away from the fact that with good research and due diligence the down and depressed market presents serious investors with the best opportunities to build a portfolio of profitable properties for long term gains.

Doc Schmyz has worked with investors all over the US. He built a free free website shares Real estate investing information for all over the US. Find real estate information by state

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How To Get Rich In Real Estate

Tuesday, June 22nd, 2010

Are you looking to get filthy stinking rich? Real estate was probably not a way to do it over the last 5 years. However, with the huge adjustment in prices real estate is starting to look more attractive. There are several ways to make money in real estate. One way is flipping properties and another is buying and holding.

Flipping can be fun because of the limited risk and exposure to the price changes in the real estate market. You may enjoy buying a handyman special and fixing the house and making it look pretty. If you watch HGTV they make it look fun and exciting.

There are a lot of investors running around looking for homes that they can buy, fix up and flip for a quick buck. Unfortunately, there may be too many of them. Often times when a good deal comes around it gets bid up to the point where the profit margins are too thin.

In Sarasota, Florida many of the investors are trying to buy the forecloses homes at the county courthouse auctions. Recently, I have heard from many investors that the homes are selling for retails prices. It is getting tougher and tougher to find homes that can be bought at wholesale prices.

Another way but far less exciting is to buy homes and keep them for the long haul. This is more of the tortoise approach to real estate but can still be very lucrative. One problem with flipping is that you have to keep doing it. You will always have to find homes at wholesale prices and fix them up. When will you ever be able to relax? Wouldn’t it be nice to own a bunch of homes that were paid off? Imagine sitting on the beach relaxing while you have $10,000 -$20,000 a month in rental income.

Time Value of Money - If you have ever read a finance book or taken a finance course then you are probably family with the time family of money concept. This is basically the concept that money will grow over time and that a dollar today is worth more than one tomorrow because it can invested and grown. for example, if you invest $10,000 today in a stock that grows 6%a year for ten years then your investment will have grown to $17,908.

It is interesting to see how money can grow over the long haul. This why financial advisers tell you to start investing early in life. For example, assume that when you are 20 years old you invest $10,000 and add $10,000 to your investment every year until you are 65. Assuming that you earn 5% a year you can expect to the money to grow to $1,766,701. Now, lets assume you are 40 years old and want to retire at 65. So you invest $10,000 initially and then $10,000 every year for 25 years and earn 5%. Your money will only grow to $534,998. See what a difference the 20 years makes? If you started at age 20 versus 40 you would over 3 times the amount of money.

Now let’s see what how the time value of money works in the real estate world. Say you bought a home for $100,000 with an $80,000 mortgage, 15 year mortgage. Assume the income equals the expenses.

Look below at the appreciation rates to see what your home would be worth after 15 years:

* 1% - $116,096 * 2% - $134,586 * 3% - $155,796 * 4% - $180,094 * 5% - $207,892 * 6% - $239,655 * 7% - $275,903 * 8% - $317,216

So after 15 years your mortgage is paid off and the home appreciated. Assume real estate prices appreciate 4% a year for the next 15 years. Your $20,000 investment turned into a home that you own free and clear worth $180,094. Not only that but the home can be rented out and generate passive rental income for you.

Now imagine owning a bunch of these paid off rental properties. You would have a nice net worth and nice monthly income. While you are sitting on the beach enjoying life the flippers are out there trying to find homes to paint, repair and sell. Which retirement sounds better?

Marc Rasmussen - Sarasota Mortgage

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