Thinking of Becoming a Real Estate Investor

Originally posted 2009-01-31 21:29:27. Republished by Blog Post Promoter

Thinking of becoming a real estate investor? The first thing that will make this endeavor achievable is that the investor must understand his or her market. There are two different types of markets. One type of market is a seller’s market, and the other type of market is the buyer’s market.

 

The Buyer’s Market

In a buyer’s market, the buyer must be aware that being in a buyer’s market doesn’t make the buyer’s job any easier. It just gives the buyer more flexibility. Remember in a buyer’s market, there may be several buyers for one property or only one buyer for a property. If there are no other buyers for a property by virtue of the length of time the property has been on the market then a low offer may come in to the seller. Sorry sellers. However, sellers that do not mean that the property has to given away, but it may mean that the seller could have to settle for less than the seller anticipated selling his or her home for.

 

Another thing that makes a buyer’s market advantageous to the buyer and not to the seller is that there are a lot of homes to choice from that may meet the buyer’s criteria.

 

The Seller’s Market

In a seller’s market, on the other hand, the seller has the upper hand. The seller can price his or her home significantly above market value and negotiate the purchase price to exact what the seller wants the purchase price to be. Sorry buyers. If the buyer really wants a home in a seller’s market, the buyer must succumb to the seller’s terms in order to get the home. As a matter of fact, in a seller’s market the inventory of homes for sale that may meet the buyer’s criteria are fewer.

 

Choosing the Property

Once the investor has ascertained the type of market he or she is in then the investor is ready to buy. Now, the investor must determine what type of properties work best for him or her. That means does the investor want to purchase single family homes or multi units? With single family homes, it is very important to determine what will happen if the property is vacant. The investor must determine if he or she can pay the mortgage if there is a mortgage on top of other expenses if there is not a tenant or the tenant is not paying. In those calculation must be the upkeep of the building to include utilities and maintenance not only the mortgage, taxes, and insurance. If that is affordable then move forward. If not, then look at those options with a multi unit and determine which scenario works better for the investor’s financial situation if there are vacancy. Do not be fooled that there will not be vacancy during sometime of the investor’s ownership, so it is best to look at that now rather than later.

 

Now, that the investor has determined which property type works better for his or her financial situation, the investor can now move forward. Another thing that the investor must consider is that it is always must easier to rent three plus bedrooms than a two or one bedroom.

 

Buy and Hold

Up until now, the suggested scenario for the investor has been about the possibility of buy and hold. What is buy and hold? Well, buy and hold is when the investor buys the property and hold it to rent it for a pre-determine number of years. It is important to note that in order for this to be successful the investor must consider the area in which the property is located. The investor wants to purchase a property that is desirable to both renters and homeowners. By doing this, it makes it easier to sell for a profit when the investor determines that he or she wants to sell.

 

Fix and Flip

There is yet another way to be a real estate investor and it is called fix and flip. Fix and flip is fixing up the property to flip or sell it to someone else. Under the fix and flip, if the new buyer is acquiring financing to purchase the property then the investor will have to have owned the property for at least six months to be able to sell. Be aware that some lenders may require that the investor owned it longer. Incidentally, due to recent market changes the latter is no longer true.

 

The investor may be wondering how the financial institution of the buyer knows how long the seller/investor has owned the property well the lender requires a clear chain of title. The chain of title will show if there is any liens and/or judgment, but it also shows the chain of ownership. The chain of title shows the dates of transfer of title or ownership. The chain of title also let’s the lender know if the property is marketable and free to transfer ownership. The investor may also be wondering where the chain of title comes from? The chain of title comes from an abstract of the title. An abstract of the title is a condensed history of ownership of the property which is gathered by the abstracter through public record.

Once the Title Company and lender determine that the property is free and clear to sell. The lender needs to know that the buyer is free and clear of liens and judgments, as well. The reason is that the liens and judgment that the buyer may have may attach to the property, so a search is done on the buyer by their name and social security number. By the way, the liens and judgment are a concern to the lender is that those liens or judgments can super succeed the lender’s mortgage; the lender wants the mortgage to be first on the property. If judgments or liens do show up for the buyer because the buyer has a common name, then buyer completes a name affidavit that can clear up most information that may come up. The name affidavit has the buyer’s name, social security number, marital status, last five years of addresses, etc. This information is used to rule out judgment or lien that may appear.

 

Ways to Sell the Investment Property

Let’s discuss different ways to sell the property under a fix and flip scenario. The seller/investor may consider a lease option. Under a lease option, the seller must do a judgment search on the potential buyer/tenant before attaching them to the property because the judgment and or liens on the potential buyer/tenant may attach to the property. As a seller, it is apparent that the investor do not want to pay someone else bills, so pay to have the search done.

Once the search is complete and it is determined that the potential buyer/tenant does not have any judgment and/or liens draw up the lease/option contract. Consult an attorney when doing this to ensure all options of ownership and releasing option are examined.

Under most lease agreement, the buyer pays a non-refundable deposit. This deposit is negotiated between the parties and credited to the buyer at time of purchase. Under some agreement, the deposit is credited to the buyer only if the buyer does not default on the lease agreement and exercise their option before the expiration of the lease agreement.

The seller will also credit the buyer a certain portion of the monthly lease payment that the buyer/tenant makes in a timely manner to the buyer at time of closing. However, the buyer/tenant shall not receive any credit for monthly payment made after the due date specified in the contract.

Incidentally, it is important to note that the buyer/tenant can only exercise their right to purchase in writing. It is also important to note that the option to purchase is not transferable.

It is important to work with the potential tenant/buyer to help them clear their credit issue by referring them to a professional that will help the tenant/buyer determine what need to be corrected on their credit and keep up with the tenant/buyer progress on doing what is required to correct the tenant/buyer’s credit. The reason this is important for the life of the lease the investor can not sell the property without proper notice to the tenant/buyer.

 

Getting Back to the Basics

Now, that the investor’s option have discussed let’s get back to some basics. Let’s say the investor buys a fixer upper. With a fixer upper, there are not many insurance options or so the investor may think. The investor may go to one insurance company and the company may tell the investor that the insurance can not insure the new purchase until after repair, and the investor still decides to move on with the purchase. The investor does not have his or her interest in the property insured. Well, there are companies that offer the insurance the investor needs. The investor just needs to know what companies offer it and what that type of insurance is called. It is called builder’s risk or a vacancy policy. The companies that offer these policies are Allstate, American Family, and Farmers Insurance. Allstate’s policy covers the property for a year, but it does not cover the investor once the investor has a tenant in the property. Once a tenant is in the property you must have a landlord policy.

American Family’s policy covers the property for three months, and then at the end of the three month the investor either buys another three month policy because the property is not ready for occupancy or gets a landlord policy.

Once the investor’s insurance is in place or even before purchase find out about permits for the jobs needed for the fixer upper. The investor needs to do this so that jobs will not be stop by the city inspector and the investor loses money as a results. This is very important in a fix and flip scenario because the investor stands to have to pay expenses that the investor did not calculate for. This is also called holding cost, so do research that can not be spoke to enough research, research, research.

 

 

Did You Know Canada Help with Auto Bailout?

Originally posted 2008-12-31 12:21:33. Republished by Blog Post Promoter

When President Bush committed to bailing out the auto industry, so did Canada.  The prime minister of Canada committed to 20 percent of the US aid package. The prime minister stated that, “We cannot afford the catastrophic collapse of the Big Three automakers.” 

The failure of the Big Three is not an option true enough, but we have to ask ourselves when is there going to be caps put on CEOs salary, when is it going to be caps put on company’s outsourcing because it is cheaper, when is the American people going to get a break?

Did you know that the CEOs of Ford, Chrysler, and General Motors were enjoying million dollar salaries while the average worker for these companies were worrying if they were going to have a job in 2009? 

I think that it was a good move to bailout the auto industry, but it is a bad move to allow these companies actions or inactions to go uncheck any longer.

Everywhere People Are Saving Money With Gardening

Originally posted 2009-06-10 05:00:37. Republished by Blog Post Promoter

Have you considered a garden to cut cost?  In these economic times, we may need to go back to the basics.  One of those basic is growing your own vegetables. 

When I was a little girl, my mom and dad always had a garden.  We would plant cucumbers, squash, greens, onions, potatoes, tomatoes, eggplant, corn, etc.  My least favorites, of course, were the squash and eggplant.  I enjoyed canning, cooking, and especially growing the food.

As a child, I would marvel over what a little labor, water, love, and God could do to make a meal for myself and my family.

As the seed would sprout into a plant and evidently food, I had the unpleasant chore of weeding the garden, though, to help with the harvest.    However, it was not so unpleasant when I would sign while I did it. 

My mom would tell us stories about the amazing harvest she had and the fun she had with her dad in the garden, so we would get excited about sharing the same experience. 

Another thing that mom taught us is that watering the plants can be inexpensive, too.  All you have to do is get some buckets and catch the rain water coming off of your house or recycle your rinse water when washing clothes.

So if you are looking for a meaningful, inexpensive, fun way to spend time with your children try gardening.  You will be surprised at the rewards.

Is Real Estate Still about Location Or is it about Price, or Profit?

Originally posted 2011-09-12 05:00:55. Republished by Blog Post Promoter

Is real estate about location, price, or profit?  This is a fair question because it has been decades since you could purchase a house for about the same price as you would pay for some new cars.

The old thinking that location, location, location is how an investor makes his or her money is becoming a thing of the past when it comes to making money in the world of real estate. The most important thing is the lowest price. The second most important thing is location. The third most important thing is profit. Essentially, location is important when it comes to making a profit from the real estate investments.

because many people do not realize just how important location is, how fine the margins are and how big the difference can be between two houses which are in plain sight of one another. It’s not just about what town the house is in, it’s about what street, the exact position within that street, and what you can see from there.

It may be tempting when listening to a friend talking about the great deal they got on a house in a certain area, to think “well, I know for a fact that there is another one up for sale there – I can buy it for that price and raise a significant profit”. This may not actually be the case, however. The position of a solitary tree, church tower or bend in the road can have a pronounced effect on what you can expect to pay and what you can expect to receive for any real estate – so do your homework.

Related articles

• Buying Real Estate in Another State, City, or Country. Is it Wise? (taylorbrownrealestatetalks.com)
• The Top Rated Mobile Real Estate App (themarycoxteam.wordpress.com)
• There’s a Good Real Estate Market in Seattle and on the Eastside (eastsiderealestatebuzz.com)

Save a Life – Recognize Symptoms of a Stroke

Originally posted 2009-05-16 05:24:24. Republished by Blog Post Promoter

You could save a life.

STROKE: Remember The 1st Three Letters…

S.T.R .
My friend sent this to me

and encouraged me to post

it and spread the word. I

agree. If everyone can

remember something this

simple, we could save some

folks.

STROKE IDENTIFICATION:

During a party, a friend stumbled and took

a little fall – she assured everyone that she was fine and just tripped over a brick

because of her new shoes. (they offered to

call ambulance)

They got her cleaned up and got her a new

plate of food – while she appeared a bit

shaken up, Ingrid went about enjoying

herself the rest of the evening. Ingrid’s

husband called later telling everyone that his wife had been taken to the hospital –

(at 6:00pm , Ingrid passed away.)

She had suffered a stroke at

the party . Had they known

how to identify the signs of a stroke, perhaps Ingrid

would be with us today.

Some don’t die. They end up in a helpless, hopeless

 

condition instead. It only takes a minute to read this…

 

STROKE IDENTIFICATION:

New Listing – 1014 West 151st St East Chicago, IN

Originally posted 2009-01-30 20:07:02. Republished by Blog Post Promoter

$59,900

Your search is over this 5 bedroom 2.5 bathroom home can be yours at this affordable price.  Call for your appointment today.  This one will not last.  Call Serena at  219 803 4489 or 219 314 3958.

Is a Short Sale The Answer?

Originally posted 2009-01-29 18:07:23. Republished by Blog Post Promoter

There is a Formula to Whether Your Short Sale will be Approved

I have fifteen short sales that I am working on of those fifteen all of the lenders are stating that they need to net a certain amount.  I was beginning to think this was an isolated case until I came across the article at http://latimesblog.latimes.com. 

I discovered from this article that if the seller has a FHA loan, the lender “requires a net of 82% of current market value.  I was relieve to find out it is a formula that the lenders use.

The article went on to state that VA loans are required to net 88% of the current value.  Still yet, the conventional loans are required to net between 78% to 85% of the current value. 

As a homeowner who needs to sell it may be helpful to understand this formula.  Remember, a short sale can save your from a foreclosure as long as the lender can yield enough money from the sale.

Is the United States Broke?

Originally posted 2009-04-08 05:00:30. Republished by Blog Post Promoter

A debate worth having.

With the increase in foreclosures, job losses, taxes, etc., the question becomes is the US broke?   There is a lot of money going out to bail out the car industry, the banking industry, and the insurance industry.    How will this money be paid back?  There is no new industry in the US to speak of.  There is talk of “green” industry, but there is no one trained to do the work.

State after state, city after city, county after county are increasing sales taxes to recover revenue that the municipalities need to run daily business, but where does this money come from if no one or very few people have income? 

In Indiana, the March revenue fell to $87 million which is well below December’s revenue.  Consequently, this is the five straight months that the state’s projected revenue has fallen.  It is several other states reported this devastation with the projected revenue; hence, Cook County, IL, increasing its sales taxes to the highest in the national at 10.75 percent. 

Along those same lines, it makes it difficult for states like Indiana, Illinois, and even the federal government to negotiate a budget.

Let’s face it; these entities are no different than our individual households there must be money left at the end of the month to have a successful budget.

This issue that we are facing is worth taking a good look at.  It needs to be address now whether than later.   Money does not grow on trees and there will be a bubble that will burst.  It is not good that the United States appears to be for sale to other countries because there is no one here that can buy anything due to overspending in the past and lose of jobs today.

Citizenship Not Just a Dream Anymore for Some Immigrants

Originally posted 2009-05-31 05:01:52. Republished by Blog Post Promoter

The Dream Act will make it possible for several immigrants to become citizens of the United States.

The Dream Act is geared towards minors who entered the United States when they were under the age of 16.   The minors will have to have been living in the United States for at least five years.  It also requires that the minor receive a high school dipolma or GED.  The bill will also consider if the minor’s behavior and moral character in its decision to grant citizenship to the minors.

The bill was developed to keep these children from having to pay unfair foreign student’s tuition for a college education when they have been in the US for most of their lives.  The tuition for a foregin student is twice that of an out of state student.

Education is important to everyone and it is something that we can not do without.  It is up to us to ensure that all children get a quality affordable education.

Calling All Entrepreneurs and Professionals

Originally posted 2009-01-15 10:07:24. Republished by Blog Post Promoter

Let’s make 2009 one to remember – We will be releasing MYCEO.com/031
to the nation on 01/15/09 (Thursday Night) @ 7PM CST – 8PM EST – 5PM PST
Seating is limited for this exciting Webinar– RSVP ASAP!

“Watch live as our CEO showcase 6 random business owners to demonstrate the power of MyCEO”

Learn How to ACESS over 50 Business Services that will help you Start a Business, Build Your Brand, Increase Your Sales, Maximize your Time and Save YOU MONEY on all your business services.
MyCEO will be presenting an unprecedented offer to the First 1000 New Members!
Get ready to take your ideas out of your head and into the marketplace – Get ready to take your existing businesses to the Next level!

To get your special reserved seat email Serena at snorbrown@yahoo.com

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