Keith Caston's Blog

Getting the Best Profits on a Real Estate Lease Option

2010-08-31T23:00:00.000-07:00

Those who know how to achieve real estate investing success have many different strategies when it comes to lease options. Some simply use the lease period to fix up the home and check it out to ensure that it is structurally sound and a good investment. Others will rent it out and make some profit until they can exercise the option to buy, at which point they turn around and sell the house. Still there are others who get more creative and find other strategies that let them make a nice profit out of a real estate lease option situation.

Simple Methods

If you choose to fix up the house during the lease period then you will be taking a slight loss in the beginning. You will have to pay money each month on the lease while also paying out money to fix up the house. Some investors prefer this option, though, to simply buying a house and flipping it. It allows you to see everything wrong with the house. If you run across something that would be too costly to fix or something that is a deal breaker then you ride out the lease option contract and not buy in the end. If everything is fine then you can usually turn around and sell the house for a nice profit once your lease option ends and you buy the property.

Many people rent out a real estate lease option property. This will allow you to have renters who pay the monthly lease until you get the option to buy. You can do repairs or have your renters do repairs for a reduced rent cost. Like the first option you still get a chance to see what is really wrong with the house, but with this method you are not losing so much money on the deal in the beginning. You still get the chance to sell the house once your lease option contract is up and you buy the property. When you sell you can increase the price over what you paid due to the fact that you have done repairs and made improvements and make a nice profit.

Find a Buyer Early On

Some investors who achieve real estate investing success make sure their lease option will pay off. Instead of waiting to sell when their real estate lease option is up and they buy, the investor will start actively looking for buyers before their option of lease is up. This way they can find someone to buy the property instead of them once the option is up. To make this work you will set the price on the property for the buyer you find to a higher price than what you are supposed to pay.

There are many ways that you can make money off a lease option. Some who achieve real estate investing success just fail to see exactly what they need to do to make a profit on this type of deal so they walk away without ever giving it a try.

There is actually little to lose by just trying a real estate lease option. If you are a new investor or you are having trouble finding good properties to flip then a lease option may just be the best choice for you as you search for real estate investing success.

The worst bet in real estate today: Construction loans - USATODAY.com

2010-08-30T21:01:00.000-07:00

By Paul Wiseman, USA TODAY

The biggest bank killer around isn't some exotic derivative investment concocted byWall Street's financial alchemists. It's the plain old construction loan, Main Street banks' bread and butter for decades.

Deutsche Bank has called them "without doubt, the riskiest commercial real estate loan product." The Congressional Oversight Panel, a financial watchdog, has warned that construction loans have deteriorated faster and inflicted bigger losses on banks than any other real estate loans.

And the worst may be yet to come. Banks, adopting a desperation strategy known as "extend and pretend" or "delay and pray," have been reluctant to admit defeat, repossess half-completed housing developments and strip malls — and dump them on a depressed market at a big loss. "There probably are many loans out there that are in worse shape than reflected on lenders' books," says Chicago construction lawyer Joshua Glazov.

Even so, the numbers are already grim:

•Across the banking system, nearly 17% of construction loans were non-current — at least 90 days past due or otherwise in trouble — at the end of March, a record level and a stark contrast to less than 5.5% for all loans, according to the latest numbers available from the Federal Deposit Insurance Corp. For construction loans on one- to four-family residences, the percentage of bad loans is even worse: nearly 23%.

"Construction loans are experiencing the biggest problems with vacancy or cash-flow issues, have the highest likelihood of default, and have higher loss severity rates than other commercial real estate loans," the Congressional Oversight Panel, tasked with overseeing the federal bailout fund, reported earlier this year.

•The 10% of banks that had the highest concentration of construction loans at the end of 2007 account for more than half of the 274 banks that have failed between then and Aug. 6, according to an analysis for USA TODAY by SNL Financial in Charlottesville, Va.

•Even the banks that have survived despite holding high concentrations of construction loans remain vulnerable. Their average "Texas ratio" — which measures their bad loans as a percentage of their capital and reserves against loan losses — stood at 101% on June 30, up from 90% three months earlier, SNL found. Anything over 100% signals that a bank is in danger of failing. For construction-loan-heavy banks, the median Texas ratio — which weeds out the worst cases — was still high, at 62%.

"It's been a bloodbath out here," says bank consultant Tod Little of BNK Advisors in Las Vegas.

Developers typically take out short-term, adjustable-rate loans to buy and develop property. The bank releases money in increments — as the developer needs it — and puts some of the proceeds in a reserve from which the builder makes interest payments before the project starts generating revenue. After the project is completed — and tenants have moved in and started paying rent — the developer takes out a longer-term mortgage to pay off the construction loan.

'Cocaine' for banks

Many small and midsize banks, eager for growth, grew addicted to construction loans during the housing boom. "Construction lending is really the cocaine of the banking industry," says veteran banker Rollo Ingram. "They're easy to do. They're big-dollar loans that can bulk up a balance sheet. And there are always developers who want loans."

Construction loans — officially labeled "acquisition, development and construction" loans — surged more than 150% between the first quarters of 2003 and 2008, when they peaked at $631.8 billion. (Overall loans rose just 55% during the same period.) If a bank said no to a construction loan, "The developer could just go down the street," says Brandon, Fla., bank consultant Jon Campbell.

And some of the people getting loans during the real estate frenzy of the mid-2000s were amateurs, says Boston bank consultant David Brown: "They were contractors who got the bug and felt they could make a living at being a developer."

It did not end well. Construction loans started blowing up when the real estate market collapsed and the economy tumbled into recession. The 10 biggest banks, facing problems of their own with subprime mortgages, were largely immune to the deterioration in construction loans, which accounted for just 2% of their assets in 2007, according to the Federal Reserve. By contrast, construction loans accounted for more than 10% of assets at banks that didn't rank in the top 1,000. "What's causing the problem is Main Street America, the construction loan made by the bank down the street," says Bill Bartmann, who owns a debt advisory firm. "They built, and nobody came."

Making matters worse: Community banks never sold the construction loans to investors the way banks unload auto loans and residential mortgages. "Most construction loans are so unique, so different, so non-homogenous, that you can't securitize them," Bartmann says. "They were kept on the books of the banks that originated them." And there, many of them started to turn rotten.

A failure's postmortem

Rollo Ingram witnessed one spectacular flameout up close. He was chief financial officer at Atlanta's RockBridge Commercial Bank, which opened in 2006, backed by other members of the city's business elite.

RockBridge told banking regulators it planned to specialize in business lending. It didn't, plunging instead into real estate and construction loans. The bank told regulators in 2006 that construction loans would account for 5% of its portfolio. By the end of 2007, they accounted for 42%. Business loans, which were supposed to make up 50% of RockBridge's lending, came to just 28%, according to an after-the-fact autopsy by Federal Deposit Insurance Corp.'s inspector general.

Nor did RockBridge recruit veteran loan officers with enough experience to safely assemble its risky portfolio, the inspector general concluded. "They hired younger, less-experienced ones, and didn't hire enough of them," Ingram says. He says he was forced out in 2008 when he complained about the risky direction the bank was taking.

By the time RockBridge failed last December, more than 60% of its construction loans had gone sour.

Other banks on SNL Financial's list of failed construction-focused banks fared even worse: At Chicago's Ravenswood Bank, more than 69% of construction loans went bad before regulators pulled the plug Aug. 6. By the time Wheatland Bank in Naperville, Ill., failed in April, more than 80% of its construction loans had gone belly-up. Security Bank of Gwinnett County, Ga., failed a year ago with three-quarters of its construction loans underwater. Georgia saw more construction-focused bank failures (34) than any other state between the end of 2007 and August, according to SNL.

Brown of RMPI Consulting in Boston blames the banks themselves. He says many banks, trying to cut costs and boost profits, dropped training programs that would have taught loan officers how to assess risks on construction projects and other loans: "I could see it coming for five years," he says. "Banks got sloppy; banks got greedy; banks got lazy."

But Little says many construction loans were prudent when banks made them. Some banks demanded that developers make 50% down payments only to see the value of the projects drop 80%: "That's really killing the community banks."

He says regulators are unreasonably forcing banks to take losses on real estate loans and pushing them out of business when they would rebound if given enough time to work with borrowers and await a recovery in real estate. "They're bayoneting the wounded," he says.

Then again, a council of federal bank regulators issued a statement last October encouraging banks to work with commercial real estate borrowers struggling with empty office space and storefronts, evaporating rental income and collapsing property prices. "Prudent loan workouts are often in the best interest of both financial institutions and borrowers, particularly during difficult economic conditions," the council said, adding that regulators wouldn't force banks to write down otherwise good loans "solely because the value of the underlying collateral declined."

"The regulators have probably held back in places," lawyer Glazov says.

Troubled construction projects are a nightmare for banks. "If a bank forecloses on a house, it's a house. Everybody knows what to do with it," Bartmann says. "But if you're dealing with a half-constructed hotel or a half-constructed strip mall, not only does no one want it, you now have to maintain it" — trim the hedges, pay the property taxes, write checks to the power company. So, many bankers have chosen to wait it out, extending the terms of loans to troubled developers to keep from having to foreclose and take possession of a half-built headache. Which leaves bad loans and troubled property in limbo.

"The loans aren't coming to market," says Sam Chandan, president of Real Estate Econometrics in New York. "The distress is sitting on bank balance sheets."

Concludes Wayne Heicklen, co-chair of the real estate practice at the New York law firm Pryor Cashman: "They're hoping the existing borrowers or someone else will come along and put more money in the project and make it right."

How to make money buying and selling foreclosed homes

2010-08-29T01:14:00.000-07:00

One man's loss is another man's gain. Or so the saying goes.

The latest loser in this equation is not the person that was forced into selling off their timeshare, or their garaged '65 Corvette Coupe, it’s your neighborhood bank. After years of progressive gains, home prices have plunged in a nationwide trend that still is not over, opening up opportunities for even the most average entrepreneur to turn a tidy profit.

Home foreclosure rates have jumped close to 30% over the past few years, and banks are eager to trim these dead weight loans off their books. Buying and selling foreclosed homes is an attractive option, but what do you need to know?

You have seen the commercial spots for so-called private and government foreclosure listings that are suddenly made public and you are goosed up after watching yet another home makeover show, but you need to do a little homework before heading off to the auctioneer.

Gather Your Info

Buying a foreclosed home has some twists, but you should familiarize yourself with the nuts and bolts that govern any home purchase or sale. The Real Estate Settlement Procedures Act (RESPA) is a set of laws that regulate such transactions. Take time to review your rights as a buyer or as a seller.

RESPA requires that certain disclosures be made at various points during the transaction. Some of these disclosures specify various up-front costs. Others discuss options available from a lender and go over your escrow details. Since you will possibly be moving through this process absent a realtor, you need to be aware of the basics.

You also have the right to request a barrelful of information regarding any property you are interested in purchasing. Such things as the property's water supply, its building materials like the roofing and insulation, lead-based paint or other potential hazards, waste disposal, property taxes and average utility bills, can and should all be provided upon request.

It is your choice as to the inspector that you want to hire, and in most cases, it is the seller's job (or the banks) to pay for an outgoing inspection. Try to gather as much information on the property before going all in; there is no "lemon-law" in the housing market as there is with buying a vehicle.

Make sure you do some in-house legwork on the internet too. Various websites can help you to locate homes in foreclosure. Foreclosures.com is one such site. For a fee,Realtytrac.com will provide you with up to date properties that have gone into foreclosure as well.

Realtytrac also maintains a database of distressed properties, HUD homes and REOs (real estate owned homes - those for which the bank holds the deed). The site also monitors monthly and quarterly foreclosure rates, breaks foreclosures down by state, and is a helpful resource for those who may be close to foreclosure themselves, or for the potential foreclosure buyer.

According to recent tends reported by Realtytrac, the national average when buying a foreclosed home is about 25 percent below the full market value. That is some sweet action.

Get the skinny on Liens

Another possible hurdle that should be investigated is whether a lien has been filed against any potential property you are looking to purchase. A lien is a legal claim against real property. Since you are looking into buying property that someone else did not or could not fully pay off, there is a good chance that a lien was filed as collateral to secure the lender's interest in the loan.

Other liens may be filed by the state or county, perhaps for unpaid property or state taxes, or even by the IRS. If an individual owes more than five thousand to the IRS, a Notice of Federal Tax Lien may be filed on real property. If this is the case, the IRS may be willing to subordinate the lien, or discharge the parcel (the house and land) from the lien. See IRSPublications 783 and 784 for more information.

Contractors can also file Mechanic's Liens for unpaid work that they did on that property. If more than one lien is filed, they are called "competing" liens, and are subject to what is called "date priority." Simply stated, whatever agency or individual got their hand in the pot first by filing their lien will be paid first by any proceeds.

A Title Search would uncover any such liens, and you should be aware that liens on properties bought through foreclosure typically transfer with the sale and remain on the property. That means you may have to pay them off before the property is free and clear. If you do not get a title search done, that home you think you just paid off may suddenly resurface with another large debt that must now be satisfied before you can assume ownership.

Go for Broker?

Buying a home through the foreclosure process is oftentimes a less formal transaction, and a quicker one, than looking to purchase property through a real estate agent or agency. Real estate agents receive their commissions through the seller. For this reason, some agents steer clear from the foreclosure market, although most are willing to provide you with a listing of foreclosed homes in your area.

For the first time foreclosure buyer, you can probably forget about trying to buy the property directly from the bank. Sitting down at the table with a bank requires a certain understanding of legalese. Although buying from the bank affords a fair amount of surety, (you get to fully inspect the property, demand a clear title, etc.) it is probably the least financially rewarding option and requires quite a bit of know-how.

The same can be said for the auction format. Besides having certain credentials required by the state to buy and sell at auctions, this marketplace is fast moving and a little tricky if you do not know your stuff. Hiccup, and that shanty with the corrugated steel roof is suddenly yours.

If you do choose to go with the auction format, keep in mind that a full inspection likely will not be possible, and that you usually have to pay in full with cash or a cashier's check, or at least a present a pre-qualified loan letter from a bank or lender that specifies the funds they plan to lend you.

You are not left in the cold without any assistance however. Try using a broker. For a fee, typically less than what may be charged through a real estate agency, a broker acts on your behalf, negotiating contracts, purchases and or sales. Banks use brokers to sell most of their foreclosed properties, and once you have eyed a few properties that a bank holds outright title to, there is a good chance you can work with the broker to get the home for less than full market value.

Many banks will let foreclosed property go for less than what is owed. If a bank cannot recoup full payment on the loan, they will “short-sale” the property, and accept less than Fair Market Value. A good broker may be able to ‘sniff’ out these deals.

Know the Neighborhood

Of course, you are not buying a foreclosed home in the middle of nowhere. Be sure to check out the neighborhood to see if it is suitable to you and your (or any) family.

If you are going to be "flipping" the property after you have put some work into it, then consider what type of family may be interested in moving in. What is the crime rate? How are the local school systems?

Remember, foreclosed homes in some areas have the potential to appreciate more than others. That largely depends on such factors as what was already mentioned, as well as comparable sales (the price that other homes in the immediate neighborhood have sold for), the neighbors, the home's proximity to a nearby city or any attractions, ease of access, how the home is situated on the lot, street noise, etc.

Get to know everything about an area you are targeting, consider the above, and then look for foreclosed properties in those areas in order to maximize your earnings at sale.

Another suggestion is to verify with local lease agreement provisions whether foreclosures in their area require tenants to vacate the homes. Since many foreclosures may be set up as multiple family rental properties, you probably do not want to take on the role of Joe Pesci in the movie The Super. It is better if the lease requires tenants to leave; most do, but still a good thing to be sure of.

Pre-Foreclosure

A great way to get your hands on foreclosed properties before they are mired in legal muck is to look for homes that may be in pre-foreclosure.

Just as it sounds, pre-foreclosures are homes that are going, but have not yet fallen, into permanent default loan status. In this case, you may be able to buy the home directly from the homeowner. Pre-foreclosures require the least amount of capital going in. You also have the opportunity to thoroughly inspect the home and conduct a timely title search.

In a pre-foreclosure transaction, the homeowner agrees to sign the deed of the property over to you, and you then assume the existing mortgage and make the payments to the lender. This option is attractive to the owner as well, because it allows them to avoid foreclosure and the horrid credit impact it carries, as well as salvage some of the equity in the property. Once the loan has been satisfied, and if the owner has equity over and above any liens on the property, you and the owner will have to negotiate how that equity is to be split, if at all.

I know what you are thinking though. How do I find properties that are in pre-foreclosure?

For sure, there is a short window of opportunity to get your hands on these properties, so you will need to work diligently. Once a property hits pre-foreclosure, owners have about 2 to 3 months to bring themselves current. If the homeowner does not rectify the default condition, the lender may post a notice of sale, sometimes right at the local county courthouse. This is done at least 21 days prior to any auction. If homeowners find they cannot bring themselves current, or know that they will not be able to, that is your chance.

Again, go online. Many agencies and even web sites that FSBOs (For Sale by Owner's) advertise on may show homes in pre-foreclosure. Local newspapers also list notice of public default debts that have been secured by liens.

In various stages of the foreclosure, notices are recorded at your County Recorder's Office. This public information is available to anyone, and is free. Visit your county's office and do a search for a Notice of Default (NOD), Lis Pendens (a fancy term that means a lawsuit has been filed on assets), or for a Notice of Sale.

In pre-foreclosure, you, your broker or your real estate agent should contact the owner directly to inquire about the property. Make sure you are in a position to make immediate payments if need be. You may be referred by the homeowner to a trustee or to an attorney, especially if that property is subject to the terms of a bankruptcy. The trustee or attorney cannot release specific information to you regarding a bankruptcy filing, but they can confirm if the property is in full foreclosure or not.

Remember your manners when trying out this option. Making contact with a homeowner who is in a financial dilemma is inherently thorny. Know that the owner in default retains his or her ownership rights, and may very well be attempting to avoid foreclosure. Selling their home or turning it over to you may not be something they want to consider, at least not as of yet. If it is clear they are trying to keep hold of their home, then move on. Telephone contact with these individuals may be tricky. For this reason, it might be best to try a mass mailing of a professional looking postcard to properties of interest.

Closing the Deal

Buying a foreclosed or pre-foreclosed home probably means that there is some fixing up to take care of. Unfortunately, once a homeowner knows that the bank is going to take control of their property, maintenance and repair work drops to the bottom of their to-do list.

Be prepared for structural or electrical problems, roofs that leak, etc. Vandalism may also be something you have the regrettable responsibility to deal with. Not from the kid with the spray can, but from the irate householder who is about to lose everything. Repairs that were not immediately evident may suddenly eat away the amount you may have shaved off the top of the market value.

Whenever you buy a foreclosed home, your contract should always have some type of contingency clause that may allow you to back out of the sale. That way, you exercise control on the property, and can also exercise your option not to buy it based on the home's physical or financial condition, or if you find it is sitting on a hotbed of buried nuclear contaminates.

Since many owners do not have the money or do not feel the need to make extensive repairs, you will probably see the term "as-is" on some of the purchase agreement paperwork. These two little words carry a lot of influence. This means you have agreed to purchase the property in its current condition, and you waive any realistic ability to later make qualms over the fact that there is a rodent population that rivals a small city living in the floorboards. Again, make sure that your contingency clause is clearly stated in your contract.

Keep a track of all your estimated repair costs and capital investments, both for tax purposes and for estimating your asking price when the property goes on to the market. Your chances of realizing a nice profit and keeping you in the "black" will increase if you keep track of such expenditures.

If you and the owner agree to proceed with the sale or transfer of the property into your name, then you will have to negotiate the terms of the purchase, taking into consideration the factors already mentioned. The foreclosing lender, trustee, attorney, real estate agent or broker may need to be present or included in these talks.

Certain intangibles may come across the bargaining table. It is surprising how many little factors may come up. The owner may want to stay in a pre-foreclosed home until they find a place to live, for example. As far as purchasing agreements, if you are not familiar with how to draw one up, consult with a local real estate agent. They will help you with one for a small fee.

If you can assume the loan outright, as in the case of a pre-foreclosure deal, you may be able to easily take on the current terms of the loan. If not, the bank may allow you toreamortize, or change the terms of the loan, such as the payment amounts, length of the loan, interest rates, etc. Other lenders may require the full amount of the loan up front.

Tips and Hints

A few other tips to be mindful of – It may be a good idea to focus on homes that have only been lived in for perhaps 10 years or less. The longer someone has lived in his or her home, the greater the equity that has been built up. Dealing with the homeowner regarding this equity, especially in the case of a pre-foreclosure sale, may be problematic.

Too, remember that your target goal should be saving at least one fourth off the full market value. At the same time, this will be subject to the recent home recession trends. This means you may have to settle for making a little less than that, especially considering the way property values in some markets have nose-dived.

Many new foreclosures stem from problems in the sub-prime market, and people are losing their homes after being hit with huge jumps in their monthly payments, particularly in the case of adjustable rate mortgages. Because of this, the lender may likely be pursuing an amount that is close to the full market value of the property, or at a slight discount only.

To sum it all up, buying and selling a home in foreclosure is no doubt a gamble. As with any risky venture, you do not always win. Nevertheless, by doing your groundwork in advance, familiarizing yourself with your local state's foreclosure laws and sticking to a couple of necessary principles, buying a home that has been foreclosed on and then marketing it can be a profitable and rewarding endeavor.

Five types of REITs and how to invest in them - The Globe and Mail

2010-08-28T01:11:00.000-07:00

Real estate investment trusts (REITs) are a key consideration when constructing any equity or fixed-income portfolio. They provide greater diversification, potentially higher total returns and/or lower overall risk. In short, their ability to generate dividend income along with capital appreciation make them an excellent counterbalance to stocks, bonds and cash. REITs generally own and/or manage income-producing commercial real estate, whether it's the properties themselves or the mortgages on those properties. You can invest in the companies individually or through an exchange-traded fund or mutual fund. There are many types of REITs available. Here we look at a few of the main ones and their historical returns. By the end of this article you should have a better idea when and what to buy. (For a primer on buying real estate, take a look at Simple Ways To Invest In Real Estate.)

Historical Returns

Real estate investment trusts are historically one of the best-performing asset classes available. The FTSE NAREIT Equity REIT Index is what most investors use to gauge the performance of the U.S. real estate market. Between 1990 and 2010, the index's average annual return was 9.9%, second only to mid-cap stocks, which averaged 10.3% per year over the same period. In comparison, fixed income assets managed 7% annual returns and commodities just 4.5% a year. Real estate was the worst performer of eight asset classes in just two years out of 20. Fixed income, on the other hand, was the worst performer six times in the same 20-year period. Historically, investors looking for yield have done better investing in real estate than fixed income, the traditional asset class for this purpose. A carefully constructed portfolio should consider both. (Learn more in How To Assess A Real Estate Investment Trust.)

Top 5 Must-Haves For Flipping Houses

2010-08-26T21:03:00.000-07:00

By Glenn Curtis – Investopedia.com

Many people assume that they can simply 1) buy a house, 2) apply a fresh coat of paint, 3) trim some bushes, and then 4) resell the home at a profit. Unfortunately, this process, called “flipping” is not that easy. After all, if it were, everyone would be doing it.

There are several skills and people that every potential investor/flipper should have in place before even considering entering into a real estate transaction of this nature. In this article we’ll look at the top five “must-haves” you’ll need to succeed in this endeavor.
1. A Group of Experts

While a house flipper can certainly go it alone, it will certainly help to retain individuals that are familiar with the legal, accounting and construction ramifications of flipping houses.

Flippers typically work against the clock, so they must renovate a home on budget and then turn it around and sell it before the financing costs eat up their profits. In any case, a bevy of experts including a real estate agent, an attorney, a contractor or renovator, an accountant, a home inspector and an insurance agent can ensure that the work is completed in a timely and efficient manner.

2. A Handyman or Knack for Home Improvement

The house flippers that make the most money buying and selling homes tend to be handy people. That is, they have the ability to step in and lend a helping hand when time or money constraints kick in. Most flippers can do things like change a sink, install a countertop, do basic electrical or plumbing work, and/or shingle a roof.

Why is being handy so important?

The obvious answer is that if you can do the work yourself, you won’t have to pay someone to come in and do it. However, there are other advantages to being handy as well. For example, there are times when it will be impossible to get an electrician to install an attic fan on short notice. There are also times when a job must be completed without warning at the last second in order to obtain a certificate of occupancy. In these instances, having the ability to navigate your way around a tool box is very valuable.

3. A Good Lay of the Land

The buyer should know about the area in which they are buying property. A buyer should know, for example, what characteristics (acreage, number of rooms, type of home, etc) are the most desirable in the area in which they are looking to buy. Equally important is knowing what houses in the general vicinity have sold for and if there is likely to be any future development in the community (such as a new school, condominium or shopping center) as this could affect supply and demand.

4. A Good Estimator
By definition, house flippers attempt to buy a property and then resell it at a profit in relatively short order. In order to do this, however, the flipper must typically make some structural and/or cosmetic changes to make the property more appealing to the next buyer.

If the flipper underestimates the costs associated with the refurbishment he or she may be exposed to large monetary losses. Therefore, a flipper should be familiar with construction materials (their use and their cost), as well as local construction codes, the cost of local labor and the time it should take to do a given job.

This is no small feat. In fact, it takes even the most seasoned construction professional many years before he or she is aware of all the nuances that exist. In any case, before becoming involved in “flipping”, be certain of your abilities to estimate a job in terms of both cost and time.

5. A Dose of Patience

One of the biggest obstacles to making money in the real estate market is that buyers tend to overpay for a given property.

Why do buyers overpay?

Typically, buyers become emotionally attached to a property or develop some other bond with it, which in turn forces them to enter into a contract on less than favorable terms.

However, savvy flippers have the ability to avoid emotional purchases, and the desire to find diamonds in the rough and properties on the cheap. They also understand that if they aren’t buying a property at a favorable price and with favorable terms, it makes sense to simply move on to greener pastures.

The bad news is that patience is a difficult virtue to teach and hone. In general, either you have it or you’ll lose a lot of money trying to learn it. (To read more about choosing the right house, see Smart Real Estate Transactions and Investing In Real Estate.)
Bottom Line

While quitting your job and becoming a full-time house flipper may sound like an attractive proposition, be sure that you have these five “musts” before investing in a real estate project.

Trends In Real Estate Investing | World Finance News

2010-08-14T03:54:00.000-07:00

Timing may be everything, but is now the right time to invest in real estate, given the steep declines seen in the housing marketing in recent months? Some real estate investment professionals seem to think so. In fact, the smart investors are buying, buying, buying properties right now. Why?

“First, let’s define what we mean by “investing,” says real estate mentor and author Minh Pham, whose popular real estate seminars pack convention rooms with novice real estate investors eager to learn how to make money with real estate. “Are you intending to be a knowledgeable, well-educated buyer of under-priced properties and stay in the real estate market for the long term in order to see excellent returns? Or are you looking for a ‘get-rich-quick’ scheme? If so, my real estate seminars are not for you.”

Pham explains that buying a cheap property in the hopes of immediately reselling for a lot more than you paid is speculating, not investing. And speculating is as risky as buying a lottery ticket. No credible real estate investment coach will teach you how to speculate, because there is no way to guarantee profits.

But that doesn’t mean you can’t start seeing profits in a fairly short space of time – you just need to know what you are doing.

Becoming a successful real estate investor involves getting educated, doing excellent research, and putting together a well-thought-out strategy. This may seem like homework to some, but for those who have done it the financial rewards are more than making up for the time spent learning.

“Can you make money in real estate in a down economy? Absolutely. Can you do it without knowing what you are doing? Absolutely not,” says Pham. “Worst case scenario, you could lose thousands of dollars and end up being very disillusioned, as many people are right now as a result of not really understanding what they were doing. There are rules to any game, and if you don’t take the time the learn them you could lose your money.”

According to Pham and other real estate investing experts, in order to be successful it’s important to learn how to make money in both ‘up’ and ‘down’ markets. You need survival strategies for when the economy is bad, and know how to win in a competitive market when the economy is booming. “Don’t fear the competition – embrace it,” advises Pham. “If you see a lot of investors competing for deals, then know you’re not the only one that sees the potential for profit. There are more than enough good deals to go around. At any given time there are hundreds of properties for sale in local market niches, enough for every savvy investor to make the profits they’re looking for.

Even in today’s uncertain climate, novice real-estate investors are making money, especially in smaller properties that are easy to acquire and manage. Owning property that pays for itself is what it’s all about. But how do you find those kinds of properties, and how do you recognize them when you do? “Ah, you’ll have to come to one of my seminars,” grins Pham.

Minh Pham’s next real estate investing seminar will be held in Alexandria, VA on March 14th, 2009. He will be giving away his real estate investing handbook, “Turnkey Profits Using Lease Purchase, Subject To’s and Other Creative Real Estate Investing Techniques” to seminar attendees. To reserve a seat go towww.realestatementoring.eventbrite.com.

Make Money with Real Estate Services Even In a Recession! | Rod's Real Estate and IM Blog

2010-08-14T03:51:00.000-07:00

Many people are having trouble doing Real Estate Investing. When Banks are lending, you can flip, double escrow-double close, quick turn, retail-rehab to consumers, and more. See more info at REIEntrepreneur.com Now you need new business RE strategies for tough times. Listen here…

MAKE A BLAST IN MAKING THE BEST REAL ESTATE DEALS - Rehab-Real-Estate

2010-08-14T03:48:00.000-07:00

As consumers, we always want to buy stuff that is worth the money. Most often than not, we engage ourselves to something that is worth our time. Right? So, let me tell you about a product that is not only worth your money but also worth your time. Well, I’m going to talk about Jason Medley’s training in looking for a private money lender.

As someone who is into real estate industry, to take part on that event will shed not just knowledge and skills but definitely enhance your profit in the long run. Why? Given that you have the knowledge and skills gain from this one-of-a-kind product, then it follows that you make the right move and decisions and eventually reap remarkable profits.

Let me give at least two products of Jason Medley which I personally used. Well, until now I refer to it as a guide. Here are the two effective and worth the dime products which I would like to recommend:

Find Private Lenders NOW Home Study Course

This product has given me the unlimited access to trained staff to help answer to all of my questions regarding the Find Private Lenders NOW System. Well, this product, if you have this a bit of tight schedule, is the one for you. If you feel like to continue learning everything at home still, this product is a good buy.

4 Week Live Training Calls with Jason Medley

This product, as it was described by us who have availed it, is a “kick in the pants” that many of the real investors need to assure that we get the adequate guidance for us to execute the learning immediately.

This training will provide real estate investors the know-how to find private lenders so that they can use their funds for their real estate deals. Have you ever thought that if you had private money (and not hard money), funding your deals would be much easier, and you could close many more deals than ever before? Jason Medley will show exactly how to find private lenders who have already funded real estate deals and want to fund yours.

However, you may find the following products focusing on the same stuff when it comes to the content as all of them are pretty much engaged on learning the ways to locate private lenders and the do’s and don’ts if you are to close a deal, which you may ask yourself of this question: What’s the point of availing those products that will just talk about the same thing? Or Isn’t that a waste of money? Well, I for a time, have asked myself that question BUT then took the risk to avail both the products and found the answer.

The products may seem to be containing the same information but indeed, they are interrelated that both will give you the boost in closing the deals with your chosen private lenders.

I can really guarantee you that this training will serve as your primary tool in making a big leap in your career in real estate. Become one of us who transcend in making the best real estate deals!

Avail this product/training at its affordable price! I can attest that it’s indeed worth the money and surely worth the time.

Real Estate Tips For Making Your Home Sell Fast

2010-08-12T21:09:00.000-07:00

If you’re looking to sell your home fast, then this article is for you. If you’re home has been on the real estate market for a long time and has had alot of visitors but no sales, then you will benefit from the home selling tips listed in this article. And if you’re currently investing in real estate but a home that you purchased hasn’t sold yet, than you will benefit from this advice also.

Selling your home fast doesn’t have to be a complicated process. The first thing that you want to consider when showcasing your home is to point out the most attractive feature to your buyer. You want to make sure that your home is design to sell and that all minor repairs have been attended to before you put it up for sale. Your real estate results will be much better if you’ve put in the work and time to renovate your home specifically for selling.

To help with the designing of your home for setting it up for sale, you have 2 options. You can either do it yourself, or hire the help of professionals. Both have their pros and cons, so you should weigh them both evenly.

The benefit of doing it yourself is obvious. You can save money, but your time will be spent focusing on one repair. If you hire the help of professionals, you will have more time to work on other areas of your home, but it’s your money that will be spent. You have to decide which will be better towards making the sale.

If you hire the help of professionals, you should hire an interior design team. This team will decorate your home and stage it properly to make it sell. A properly designed home will definitely help to close a sale faster than a home that is full of clutter.

You should also consider hiring someone to organize your home. This organizer should go through your home and organize all key areas of your house such as the attic, garage, basement, and closets. These are areas that buyers have a keen eye for, so you want to give the best impression when buyers view your home.

After the interior of your home is staged properly and is ready to sell, it’s time to market it. Either you or a photographer can take pictures of your home so that you can market it online and via newspapers. You want clear, clean, and crisp pictures of your home.

You should consider hiring a photographer because more than likely they will have one of the best cameras available that will be able to take the beautiful pictures you need to sell your home. Or if you can afford it yourself, purchase a highly-quality camera that will be able to take the kind of pictures you need to sell your home.

All of these tips will impact you selling your home now so you shouldn’t take them lightly. When it comes to real estate selling, all of these points are crucial so you should skimp on any part. Skimping on key areas is the main reason why homes don’t sell fast, you want to ensure that you take each area seriously. Good luck with the selling of your home.

FOR MORE INFO: Learn real estate selling tips you can use to earn money in real estate. To learn more, visit the following website for more details: http://www.instant-downloadz.com/realestateresidualincome.html

Whether buying or selling real estate, arm yourself with information - The Boston Globe

2010-08-12T21:04:00.000-07:00

In the real estate world, there was one word — repeated three times — that used to be the cardinal rule: location, location, location. Just about anybody could buy a house in a good location and easily make money by flipping, selling, or refinancing the home.

The new cardinal rule of real estate is information, information, information.

“For decades, the real estate industry has operated under the principle that the less information buyers and sellers have, the better it is for agents, lenders, title companies, and all the other folks who eat from the trough,’’ writes Ilyce Glink in “Buy, Close, Move In: How to Navigate the New World of Real Estate — Safely and Profitably — and End Up with the Home of Your Dreams’’ (Harper Paperbacks, $14.99). “But the real estate tide seems to be turning, as the housing and credit crises of 2008 have heightened awareness in Washington, D.C., and on Wall Street about the catastrophic consequences of a closed information loop.’’

I have no doubt that many professionals in the real estate industry will take great exception to Glink’s observation. But the evidence is on her side. We ended up in one of the worst housing market collapses because far too many borrowers were uninformed, ill-prepared, and overly optimistic about potential gain because of bad information they received and gladly embraced.

Glink has spent years covering the real estate industry and that’s why for August, I’m recommending her book for the Color of Money Book Club.

Glink is also the best-selling author of “100 Questions Every First-Time Home Buyer Should Ask.’’ She coauthors a syndicated column, “Real Estate Matters.’’

In her new book, Glink looks back at what happened and then forward to what’s to come in the real estate market. As she reports, millions of people have seen their home values plummet. One group of economists has suggested that housing prices won’t recover until 2017.

But this book isn’t all pessimism. It’s also a guide to help buyers and sellers navigate the new world of real estate. Glink offers advice on what to do in a new era of declining home values, the changing role of Fannie Mae and Freddie Mac, fixing your credit, calculating what you can afford, and snagging a house through a short-sell or foreclosure. She even ventures to help those still interested in investment property.

I think you will find the section on the 10 things that have changed in real estate sobering. If you’ve been looking for a home, you know that number one is that you need a lot of cash. The industry has long known that the more money someone puts down on a property, the less likely the person will default. In this case, an old rule is the new rule.

This is the worst of times and the best of times for real estate. It’s up to you to determine if this will also be the age of wisdom or the age of continued foolishness.

Michelle Singletary is a columnist for The Washington Post. She can be reached at singletarym@washpost.com.

MAKE A BLAST IN MAKING THE BEST REAL ESTATE DEALS - Rehab-Real-Estate

2010-08-12T21:02:00.000-07:00

As someone who is into real estate industry, to take part on that event will shed not just knowledge and skills but definitely enhance your profit in the long run. Why? Given that you have the knowledge and skills gain from this one-of-a-kind product, then it follows that you make the right move and decisions and eventually reap remarkable profits.

Let me give at least two products of Jason Medley which I personally used. Well, until now I refer to it as a guide. Here are the two effective and worth the dime products which I would like to recommend:

Find Private Lenders NOW Home Study Course

This product has given me the unlimited access to trained staff to help answer to all of my questions regarding the Find Private Lenders NOW System. Well, this product, if you have this a bit of tight schedule, is the one for you. If you feel like to continue learning everything at home still, this product is a good buy.

4 Week Live Training Calls with Jason Medley

This product, as it was described by us who have availed it, is a “kick in the pants” that many of the real investors need to assure that we get the adequate guidance for us to execute the learning immediately.

This training will provide real estate investors the know-how to find private lenders so that they can use their funds for their real estate deals. Have you ever thought that if you had private money (and not hard money), funding your deals would be much easier, and you could close many more deals than ever before? Jason Medley will show exactly how to find private lenders who have already funded real estate deals and want to fund yours.

However, you may find the following products focusing on the same stuff when it comes to the content as all of them are pretty much engaged on learning the ways to locate private lenders and the do’s and don’ts if you are to close a deal, which you may ask yourself of this question: What’s the point of availing those products that will just talk about the same thing? Or Isn’t that a waste of money? Well, I for a time, have asked myself that question BUT then took the risk to avail both the products and found the answer.

The products may seem to be containing the same information but indeed, they are interrelated that both will give you the boost in closing the deals with your chosen private lenders.

I can really guarantee you that this training will serve as your primary tool in making a big leap in your career in real estate. Become one of us who transcend in making the best real estate deals!

Avail this product/training at its affordable price! I can attest that it’s indeed worth the money and surely worth the time.

Aug 12, 2010 1:06:33 AM

How to Find Motivated Home Sellers When Flipping Houses

2010-08-12T20:54:00.000-07:00

If you're going to ask a real estate investor what's the biggest challenge he has encountered while starting out in the business, you'll probably get this answer: finding leads to motivated sellers. Indeed, many investors are having a hard time finding homeowners who are willing to sell their properties at discounted prices. But if you're going to let this particular challenge discourage you, you won't be able to reach your full potential as real estate investor.

For those who are having similar problems, here are some hints and tips that will help you find motivated home sellers when flipping houses:

Look for FSBO (For Sale By Owner) signs. If you have lots of time to spare, you should drive around neighborhoods and look for FSBO signs. These signs are like an open invitation from motivated home sellers for you to buy their homes. Therefore, you shouldn't be afraid to talk to homeowners who have such signs on their lawn because these people are in dire need to sell their properties.
Check out online classified ads. Online classified ads, such as Craigslist and Kijiji, are great sources of leads to lucrative real estate deals. As you may know, many people who want to get rid of their properties, including houses, post ads on these sites to find potential buyers. By taking a look at these sites, it would be easier for you to find homesellers who can provide you with profitable investment properties.
Search for vacant houses. This is probably one of the lead generation strategies used by those who make money by flipping houses. To locate the owner of abandoned homes, write down the address of the vacant property that you want to invest in. Then, look up the names of the owner by checking out the office of public records. Once you've got the pertinent information, you should contact the homeowner and express your intent to buy the property.
Send mail and tell people what you do. Although some people think that sending snail mail is a little bit old fashioned, many real estate investors agree that it is one of the most effective ways to find leads to motivated home sellers. So don't be afraid to mail those letters, especially the yellow ones, because it can help you secure a profitable investment property.

For more tips on flipping houses and making real estate investments, log on to www.RehabList.com.

Black homeowners being hit hard by foreclosure crisis - Fort Worth Business Press

2010-08-11T23:50:00.000-07:00

BY ALESHIA HOWE

August 09, 2010

As the nation’s foreclosure crisis has ripped through communities in every state, the National Association of Real Estate Brokers held a special “call to action” at its annual conference held in Fort Worth last week, saying the African American homeowner communities have been hit harder than other home owner segments.
The National Association of Real Estate Brokers held its 63rd annual convention in Fort Worth July 29 to Aug. 5.
According Vincent Wimbish, president of NAREB, the call to action will focus on ensuring transparency in all financial transactions, continued and expanded support for loss mitigation and pre-home purchase counseling services, restoration of sustainable homeownership as a viable wealth building option, and public policy “that prevents another economic tsunami from sweeping away the remaining hopes and dreams of the nation’s multicultural homeowners.”
And according to group leaders, the subprime mortgage meltdown and resulting recession is far from finished, particularly in the African American community. According to the Center For Responsible Lending, 11 percent of African Americans already have lost their homes, or are in imminent danger of losing their homes, and it is projected that between 2009 and 2012, $193 billion in wealth will be lost in the African American community.
The Center for Responsible Lending’s June 18 report titled “Foreclosures by race and ethnicity,” estimates 10 to 13 million foreclosures will occur in the United States before the crisis abates. Today, the report states that 52 percent of the nation’s at-risk borrowers are non-Hispanic whites, but only 15 percent of that group is at imminent risk of losing their homes. Comparatively, black and Hispanic home owners at imminent risk of losing their homes tops 21.6 percent and 21.4 percent, respectively.
Wimbish used strong words in describing the consequences of his organization members not pulling together to support change in the current residential real estate market.
“The color is green,” he said. “We got bamboozled by Wall Street because 56 percent of foreclosures are not in our community, but our community feels the same affect because the only loans being done in the communities of color – black and Hispanic communities – primarily were subprime loans, so we’re asking partners to join us because the color is green. And if we don’t come together and address this issue directly, were going to all be back on a plantation.”
The NAREB organization is a minority broker organization with 88 chapters throughout the nation, including one in Fort Worth.
The organization has introduced a number of alternative plans including a 10-year tax credit program or mortgage products based on a client’s ability to pay rather than on that client’s credit score, which is traditionally is how banks determine a client’s risk factor and ability to re-pay a loan.
“We are advocating that they create mortgage products that are not based on or determined by credit scores only. We want mortgage products based on loan to value, industry standard loan to value, a modest down payment,” Wimbish said. “The down payment HUD has currently is 3.5 percent and 3 percent seller concessions, but we know in our community we are advocating they target foreclosed properties and up to 6 percent seller concessions.”
Wimbish said Wall Street credit scores operate by predictable financial behavior – something that can sometimes disqualify some good potential borrowers.
“In lieu of credit score, we are advocating that they create a mortgage product that you can alleviate predictable financial behavior by having a consumer agree to automatic payment,” Wimbish said. “That way you don’t’ have to worry about getting your money because you know when they get paid, you collect that mortgage payment, if that’s a weekly, bi-weekly, or bi-monthly payment.”
Terri Attaway, president and CEO of the Fort Worth NAREB chapter, said the Center for Responsible Lending numbers aren’t shocking as they reflect what’s happening in the market today.
“It definitely is tougher out there,” she said. “You have to drill deeper now more than ever to educate people. But it’s still a great time to buy and if you can educate, then it’s good for everyone.
One such local program is offered by the city of Fort Worth and includes grants of up to $25,000 if one buys a home within a specified seven ZIP codes, which are the areas of the city most affected by foreclosures. Attaway said that program has many “hoops for home owners to jump through but the end result is worth it.”
“They have to do things like take a class, but our chapter offers a class that would qualify for that,” she said. “And any property where you stand to get that kind of help is worth it.
Attaway said another issue coming down the pipe will be an increase in FHA standards. Attaway said she recently heard talk that FHA, which now does not lend to anyone with lower than a 580 score, will open up loans to individuals with 500 to 580 credit scores – if they put 10 percent down.
“FHA already raised the down payment from 3 to 3.5 percent and there are a lot more changes coming and people have got to stay informed,” she said.
Maurice Jourdain-Earl, founder and managing director of Compliance Tech, also presented at the conference his soon-to-be-released report titled “By the numbers, disparities in credit availability for African Americans and Latinos 2004-2008.” The report, which will be available in the coming months, is based on data derived from the Home Mortgage Disclosure Act and, according to Jourdain-Earl, shows that African Americans and Latinos are disproportionately affected by the lack of credit.
“These perceptions are continuing to drive these disparities that will have a disproportionate impact on communities of color,” he said at the conference.
Jourdain-Earl touched on strategic defaults by home owners, or home owners who have decided it makes more sense for them to turn over their keys to the bank and walk away from the home because the home is worth less than what they paid for it originally.
“Those strategic defaults are increasing and believe it or not, many of those strategic defaults are not happening with low or moderate income or minority consumers, but mostly with middle and upper income folks who have made the calculus just like with any other investment that it is easier to walk away,” he said.

Back to Basics on Buy and Hold

2010-08-11T18:55:00.000-07:00

This past week was spent catching up with friends we haven’t seen in awhile. When these old friends ask what we’re up to, they aren’t surprised to find out it’s real estaterelated, given that we began investing in real estate in 2001. While most have heard the stories of ourcrack house adventures in the early days, they are startled to learn that my husband Dave and I are full time investors.

A few made comments about how “lucky” we were to begin investing 2001 because we rode a really rocking wave of value increases on those properties. And a few commented on how they wouldn’t be buying houses right now because they think the values are going to go down again.

I tried to explain to a few interested folks that appreciation is icing on the cake but it’s not actually the foundation of what we do. But most people seem pretty hung up on house values and what the values will do in the future … and I suspect there are still real estate investors out there that get caught up in these thoughts too so I thought it was time to remind everyone of the basics of buy and hold real estate investing.

There are three ways to make money as a buy and hold investor and one big bonus many forget to think about too!

Appreciation is the way that captures an audience. Who doesn’t love hearing stories about home prices doubling and people making big bucks on a quick flip? It’s a great story.

But we never set out to make money through big property value appreciation. Because we do a lot of market research and carefully select the areas we buy in, we often see solid growth in the value of the properties we buy, but that is not our number one focus for making money. We’ve always focused on a more long term strategy which sees us making cash flow each month and building our wealth by other people (our renters) paying down our mortgages.

That’s it. Appreciation is obviously pretty nice but it’s not the foundation of what we do.

Let’s look at a basic example. Pretend you found a nice property for $100,000 two years ago, and you bought it for 25% down ($25,000). Today, here’s how your investment looks:

1) Depreciation: Bad news, your property went down in value by 5%. It’s now worth $95,000.

2) Cash flow: Rent each month is $1,000. Your mortgage, insurance, taxes and miscellaneous expenses are $800/month. Income minus expenses = $200/month. 24 months x $200 = $4,800 in income so far.

3) Other people’s money paying down your mortgage: Assuming you have a mortgage at a 5% fixed rate and 25 year amortization, at the end of the two years you will owe $71,805 on your $75,000 mortgage. You have now built an additional $3,195 equity into the property ($75,000 – $71,805 = $3,195) using the rent money you collected to pay down the mortgage.

Your property may be worth less than you bought it for, but you’ve still made $7,995 from it in two years (from the positive monthly cash flow and the principal your renters have paid down).

And – remember – you only actually realize a gain or a loss in property value when you sell the home so you really haven’t LOST the 5% the property went down. If you haven’t sold it and you’re still making money each month don’t worry about it!

Focus instead on the fact that you’ve made a 32% return ($7,995 divided by $25,000 invested) on your money after 2 years. And if you hold onto it, and ride the market cycle back up, when you do go to sell you’ll likely enjoy a nice lift in value to add to the other two ways you’ve made money on it.

On some of our properties we’re paying down as much as $1,000 per month on the mortgage using the rent money we’re collecting plus we make $500 to $1,200 per month in positive cash flow! Even if the value on those properties never changes we are making money each and every month through the cash flow and growing our wealth by $12,000 a year.

Plus, the big beautiful bonus of buy and hold investing is that you’ll have been enjoying some nice tax deductions along the way that can help offset income you’re making with this property and with other sources too!

I tried explaining this to some of our friends but they kept coming back to the question “What do you think house values will do in the near future?” so I eventually gave up and said my crystal ball is broken but they will eventually go up in most areas. Then I quickly changed the subject over to their jobs, kids and travels. It was easier … but for my fellow real estate investors remember that appreciation is just one way to make money with buy and hold real estate.

Sound Real Estate Investing Advice

2010-08-11T18:43:00.000-07:00

Real estate prices are governed by a huge number of factors. Therefore, real estate investing advice is not like a sure shot prescription about how you should invest. Rather, it is a broad set of guidelines that will help form your own thumb-rules. The most important real estate investing advice is that investment in real estate should never be confused with speculation. Here are a few aspects that you might want to consider before you put your money into real estate.

Real estate investment is like any other investment. It is more like investing in Treasury Bonds or Mutual Funds. You get returns on it even when you continue to hold on to your investment. In property/real estate investing, the gain could be two-fold. If the property you hold is in a sought-after neighborhood, it would most likely fetch you a good rent. While you keep getting the rent, the prices could rise and give you the added return.

A typical property estate investor has the financial muscle and staying power. Such an investor does not get carried away by small, short term gains and instead concentrates on the big picture. An annual return of 6 to 8 percent of the invested amount is considered decent. Anything above 10 percent is a big bonus.

In the case of speculation, you enter when the price is low and exit at a higher price. The assumption is that prices will continue to rise, and that is not always the case. In fact, the last decade has seen a big slump of over 70 percent in many of the otherwise booming economies. The best bet in the case of speculation is being able to spot developing neighborhoods, especially residential, and to invest early.

In addition to the property estate investment and speculation discussed above, there is an interesting alternative. The real estate investor buys property that is not in the best of conditions, does it up in line with the current trends and then sells it for a substantially higher price. The unique selling point in this case is that the new buyer does not have to spend time, effort and money in getting it done. In one sense, this is an investment because you will still command a good rent till you get a buyer.

In the case of commercial property estate, the returns are naturally much higher. However, there are two points that need to be considered. Number one, the investment required is huge, depending of course on the size of the property and its location. The other important factor is that movement can be pretty slow. Do not expect businesses to relocate every other year. So, while the income in the form of rent is likely to be fairly high, the prospect of earning money through price appreciation can easily be years away.

In a nutshell, the best real estate investing advice is to look around, study the marketplace, and weigh the two channels of earning money - through rent and through price appreciation.

Join Forces with Our 7 Nationally Recognized Real Estate & Finance Experts to Wisely Navigate the Current Real Estate & Mortgage Markets to Earn Record Profits at RealEstateAdvicePros.com

Beach Real Estate - Tips for Making Money in the Sun

2010-07-27T02:20:00.000-07:00

Real estate is a field of activity which many people decide to invest in, because if you know what to do and how to play your cards right, you could really make a lot of money and recover your investment in no time.

Investing in attractive beach properties can help you make an even greater profit, because everyone loves the beach and most people search for great beach residencies where they could enjoy their lives while standing on a beautiful beach, listening to the relaxing and soothing sound of the sea waves.

Having a place where you know you can go to any time you need to relax and unwind is a very nice thought, so by investing in real estate in places that are near the beach could be the greatest idea you've ever had.

California and Hawaii are two of the states where real estate investors have made big bucks by investing in beach properties, because their beaches are fabulous and people were willing (and still are) to pay top dollar for a real estate as near to the beach as possible, and dream of sitting on their lanais listening to the ocean waves crashing onto the beach.

California is also a very popular place for Hollywood productions, for this very reason: because Hollywood producers want to get the sweetest human dream closer to their viewers. California luxury residences and beach houses feature in many top movie productions, because Hollywood knows how to emphasize the American dream best and to make people watch their productions with interest.

That is why investing in beach real estate could be a really good idea for you. Every real estate investor knows that in order to succeed in the business, you need to consider the location thoroughly, because location is everything. And what better location could there be for someone looking for a home?

If you want to make an even greater investment, you could consider rental. If you purchase beach houses or apartment buildings near the beach, you could give them to rent and make a huge and constant profit for many years to come.

After all, not everyone can afford a house near the beach, but everyone wants to go on holiday, so this is a safe income that you can be sure of. However, you need to be careful at one aspect: the ravaging storms that sometimes occur in the beach areas.

Hawaii residents know very well that hurricanes coming from the ocean can come with devastating fury and demolish entire structures, leaving behind them a devastating view. Flooding is another possible problem a real estate investor has to consider, but if you know where to invest you can avoid all that hassle.

99 Real Estate Leads and No Real Estate Deals?

2010-07-25T22:33:00.000-07:00

Some say there is an industry standard that says:

“For every 20 real estate leads you call, you’ll get at least 19 No’s and 1 Yes.” Well, imagine contacting 99 home owners who had a home to sell and having nearly all of them say “No” to your business.

In this blog post I’m going to tell you why and how this happened to me so you’ll know what not to do when talking with real estate leads.

A few years back I came to a point in my life where I wanted a real estate deal really bad! I wanted a deal so bad that I pulled out some old newspapers (a few days old) that I had been saving and circled all the real estate leads I wanted to call. My goal was to call 100 home owners and at least get my first deal. Statistically I guess I should have a goal of getting at least 5 deals, but I would have been satisfied with 1 real estate deal.

So I picked up the phone and started dialing…

Ring Ring Ring!

First call goes straight to voice mail. I leave a message.

Ring Ring Ring!

Second call goes straight to voicemail. I leave a message.

Ring Ring Ring!

Third call goes straight to voice mail. I leave a message.

Ring Ring Ring!

Fourth call goes straight to voice mail. I leave a message. (I’m getting a little annoyed now)

Ring Ring Ring!

Seller Says: “Hello?”

I introduce myself and begin running through my script of what to say…*Click* in mid sentence.

First rejection…It’s cool. I have 95 more real estate leads to call, so it’s not a big deal.

As I began dialing number after number, it was like a pattern of voice mails and rejections. There were some soft promises of, “I’ll think about it and get back to you”, yet not a single firm Yes!

I burned through 99 real estate leads and didn’t get a single deal. It all happened in one day and by the end of the day I was completely exhausted and didn’t even bother calling the last lead!

I seriously doubt it would have been a deal. Now that I think about it…I know it wouldn’t have been a deal given my state of mind after being completely drained.

What happened that day? Why wasn’t I able to nab a deal?

After analyzing all the conversations and analyzing myself.

Here some of the main problems I noticed:

Reading From a Script & Not Being in Control

Reading from a script is ok, but you don’t wan to sound rehearsed. If you’re going to do it then you at least have to make it sound natural to the person on the other end. Reading from a script can help guide the conversation and get the answers you need to make a decision. However, it’s important to position yourself accordingly when you’re on the phone. How do you sound to the other person on the end? Do you sound like a buyer/investor or do you sound like a salesman?

Many people get frustrated when they get phone calls out of the blue and you have to be able to build that rapport (relationship) from the beginning in order to set the tone for the rest of the call. If you’re on the defense in the conversation, then you’re climbing an uphill battle because you’re answering the majority of the seller’s questions instead of the other way around. Rapport building points are not something you’re likely to find in a script.

These were the problems I had. I didn’t build rapport. I sounded rehearsed and didn’t maintain control of the conversation. I didn’t position myself as a solution.

Not Listening during the conversations

The problem with using a script is that it could prevent you from listening to the seller unless they answer the question you happen to be on. My advice has always been to use a script as a guide or memory jogger because there will be questions that you need to ask and they might not be on your sheet.

A perfect example of not listening was when a motivated seller was telling me about their home repairs and then moved on to telling me about the neighborhood. After she finished discussing the neighborhood, I said, “So does the home need any repairs?” She called me out right on the spot and said, “Weren’t you listening?” I was kind of listening, but that just happened to be the next question on my script. You absolutely must listen when talking to people on the phone or you’ll likely lose out on the deal like I did.

The presence of negative energy

As I dialed number after number I didn’t take any breaks. Maybe to run to the bathroom or grab a quick glass of water. Other than that, I was diving striaght through this list like no tomorrow. As I kept getting voice mails and kept getting rejected, I would get more and more frustrated. If you get frustrated during a process like this, you’re frustration (negative energy) can easily carry over to the next call and it can be heard by the person on the other end. This can be a big turn off and the conversation will get cut fairly quickly. My advice is to take breaks and stay positive. Motivate yourself or talk to someone who can make you feel better. Then continue on with taking action.

Have you ever talked to someone on the phone and you can just hear a negative attitude in their tone? It’s like someone pissed in their cereal. Sometimes I’d get negative energy from some leads as well. Some either assumed I would low ball them because of being an investor or some just didn’t feel like talking. They had the old “Are you going to buy at full price or what?” mentality. Those are the type of real estate leads, I simply don’t deal with. My time is too valuable and if we’re going to do business, then we need to be on the same page.

Contacting unmotivated real estate leads

Let’s face it! A big handful of the leads I was contacting were unmotivated. As I analyzed all the things I was doing wrong, I also noticed that I was talking to people who wanted to sell, but didn’t need to sell. Motivated leads need to sell their home because there is some sort of problem that they desperately need to get rid of. Foreclosures are huge problems right now and many people out there need a solution.

If you talk with people who say they have time to wait and aren’t looking for a quick sale, then they are most likely unmotivated. It’s one thing for a person not to accept a low offer. It’s another thing for them to tell you that they’re not in a hurry before they even hear your offer. I’m not one to make insultingly low offers, however I do need to position myself to make some money. This is a business and if they have a problem with you making money more than you helping them sell their home fast, then they’re not that motivated. Unmotivated sellers can waste your time, so it’s best to end the call quickly and move on.

Understanding that No means No!

As I write this blog post, I had to stop for a few seconds to answer the phone. It just happened to be a telemarketer. How ironic is that? She wanted to give me an estimate on my windows. I told her I’m not interested. She said, “Well have you changed your windows?” I said, “Yes, but I’m not interested in any additional remodeling right now.” She said, “Well we also do estimates on sliding doors and our estimates are good for 1 full year.” I’m not INTERESTED! (My tone raised a bit). She said, “Ok thank you for your time!”

This made me think back to how many times I was told “No” on that dreadful day and how I kept trying to sell my real estate services to the person on the other end. There was one call in particular where a person kept saying that they weren’t interested and I kept trying to push and convince them. If it’s one thing I’ve learned and have been taught over and over again, you never want to try and convince someone to do business with you. It’s either they get it or they don’t. Your time is better spent with people who get it because the majority of your deals will come from people who will do whatever it takes to get rid of their problem. Position yourself as a solution and 9 times out of 10, you’ll get the deal.

Cold Calling versus Direct Response Marketing

The last point I want to make is that cold calling a real estate lead verus having the lead contact you can play a role in getting the deal as well. I’ve always believed that if a lead contacts you, then they are much stronger. Why? Because they saw you as a potential solution and they picked up the phone and dialed your number. They may have even taken the time to visit your website and fill out all the required information you asked them to fill out. If they’re not motivated, then they most likely won’t even do that.

This is exactly why I now concentrate on attracting motivated sellers and buyers. I have no doubt in my mind that cold calling works. In fact, I still do it every now and then. However, when you can pick up the phone and say, “How can I help you?”, you instantly gain control of the conversation because you’re asking the question and you’re letting them know right off the bat that you can be a potential solution. It would be kind of strange to call someone out of the blue and say “How can I help you?”.

If you’re able to elicit a direct response from a real estate lead, then you’ve achieved the goal of direct response marketing. All you have to do next is close the deal…if it’s really a deal!

I’m sure there are tons of reasons why I didn’t get a deal that day. However, in this post I wanted to point out the major ones that I knew contributed to that day.

Can you think of more? Have you ever called a bunch of real estate leads in a single day? What was your experience?

Share below by leaving a comment.

To Your Success,

J. Lamar Ferren
New Breed Investor

Where to Find Buyers For Your Real Estate Investing Deals

2010-07-25T05:31:00.000-07:00

As the saying goes, you make money in real estate when you buy. But it goes without saying that you have nothing until your property is sold.The faster you sell your house, the more potential profits you make. Each week you hold on to that deal means more holding costs which eat into your profits.It is therefore important to identify potential buyers for your properties. As a wholesaler, the assumption here is that you flip houses as your real estate investing model.1) Build a buyers listThis is the most basic requirement so selling houses successfully. A buyers list is a list of people who buy houses where you buy and sell houses.When selling houses to end users, this is a list of people looking to buy houses on retail or terms who meet the criteria of your houses.When flipping houses as a wholesaler, this would be a list of real estate investors who are looking for properties to fix up, then sell them for a profit or keep them as rental properties.A real estate investor website is crucial to meet this need. The website must allow you to activate squeeze forms that collect name and email of potential buyers before they can view property details.The real estate investor website must also allow you to create squeeze pages, or landing pages that convince potential buyers to give you their name and email to access your wholesale deals or houses for sale.You then send potential buyers to your website or squeeze page. Once they sign up to your buyers list, then you can send them deals of your properties as soon as you receive them and hopefully get a buyer for your properties.2) Local REI meetingsThese are extremely important in that you meet other investors that buy and sell houses right in your local market. Exchange business cards and always ask them if you can put them to your buyers list.3) Foreclosure auctionsMost foreclosure auctions are attended by hundreds of people, typically real estate investors. Even if you may not be looking to buy these houses, it may be a great opportunity to exchange business cards and future potential buyer contacts.4) NewspapersWhenever I have new properties, I put an ad on the local newspapers especially weekend classifieds. Instead of a phone number, I give them the address of my real estate investor website. They must join my buyers list to view the properties I have for sale.5) Online sourcesThere are many online sources especially listing websites. Craigslist is a very popular choice. Whenever you run an ad online, the aim is to send them to your website where they can view property details and join your buyers list.6) Social networking mediaFacebook and other social networking media are a great way to reach hundreds or thousands of other real estate investors. Whenever you have properties for sale, sharing them in your Facebook or Twitter account is likely to give you a buyer. Simon Macharia is a real estate investor in Dallas Texas. He buys and sells houses through his real estate investor website. Click here to see how you can automatically build a buyers list as you sell your houses quickly.

Many Bay Area homeowners in real estate limbo - San Jose Mercury News

2010-07-25T05:01:00.000-07:00

Tens of thousands of Bay Area homeowners are trapped in a bizarre real estate limbo, living in houses but no longer paying for them, waiting and wondering if someone will help them — or throw them out.

Some are victims of their own economic circumstances, unable to afford their mortgage and expecting to lose their homes if they can't get a break from their bank. Others are opportunists, choosing not to spend on a house worth less than they owe. Instead, they can live rent-free until their lender makes a move.

The limbo phenomenon is a radical departure from previous real estate crashes, when there were far fewer troubled loans and banks moved speedily on those who fell behind on payments. Now many lenders

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Sales and foreclosure databases, local and national news.

simply can't keep up, and others appear reluctant to flood a weakened market with foreclosed homes.

It all adds up to lingering instability for the Bay Area housing market, as lenders slowly work through the backlog while homeowners endure uncertainty that could last months or even years.

"It's bad all the way around, for the neighbor, the community, the city, state, nation," said Chris George, founder and CEO of CMG Mortgage, based in San Ramon. "It's a continued indication that there are a lot of people in trouble, particularly with their job situations."

Some homeowners say ignoring the mortgage is the only option they have.

"I stopped paying payments about 12 months ago," said Jeff Dunkin, who has twice sought

to modify the loan on his San Jose condo near Branham High School, and twice been denied. The 25-year-old construction worker has been employed only sporadically since early 2009, and the unemployment checks he's collected are less than half what he used to make. He knows some people may think living mortgage-free sounds like a cushy deal. But that's not how it feels to him.

"It's a lot of anxiety, a lot of stress," Dunkin said.

'On the edge'

Dunkin has plenty of company. An estimated 40,283 homeowners across a seven-county region spanning the South Bay, East Bay and the San Francisco metro area were at least three months behind on their mortgages but not yet in foreclosure as of April, according to CoreLogic, which tracks mortgage performance data. That's about 4.5 percent of total mortgages in those areas, and a drastic increase from 0.25 percent in January 2007. In the San Jose metro area in January 2007, only 513 loans were more than 90 days late but not in foreclosure. In April of this year there were 11,558. In the East Bay, the total grew from 1,435 in early 2007 to 23,155 in April.

"We have all these people who are really kind of on the edge," said Kevin Stein, associate director of the California Reinvestment Coalition, which fights for homeowners seeking loan modifications. "They're anxious because they know they're behind, and they know all these foreclosures are happening, and they know they could be next."

Dunkin, for example, bought his two-bedroom condo in September 2007 for $355,000. His fiancee and a roommate helped him pay the mortgage. But in early 2009 the relationship with his fiancee crumbled, and construction business in the valley plunged. As he scrimped to keep up with his $2,486 monthly mortgage payments, he let his homeowner association dues lapse, and the association sued him for the overdue amount. He spent months paying it, but let his mortgage slide.

Dunkin has yet to receive a notice of default, but he did receive letters this spring from his lender about the possibility of a short sale — selling the condo for less than he owes.

"I have not responded to that," he said. For now, he's sitting tight, saving money so he can rent a place after foreclosure, which he considers nearly inevitable.

Nationwide "roughly 3.5 million loans are in this limbo land, and are not proceeding through very quickly. It could take years," said Sam Khater, an economist with CoreLogic, which tracks mortgage performance. "I have a feeling it's going to follow the path of unemployment and have a long tail."

Part of the reason homeowners wind up staying in their homes so long lies with the lending industry, Stein said. Many companies are overloaded with people who are behind in payments, and financial institutions are hesitant to process thousands of foreclosures at once, because dumping all those properties on the market would lower prices even more.

Khater said many lenders are moving slowly because they hope the government will eventually step up to help cover their losses. They also may be hoping an economic recovery will allow many borrowers to catch up with their payments, but "they're going to be waiting a while," he said.

Too slow, critics say

Critics of loan modification programs say the housing market would be better served if foreclosures moved more quickly, and that any resulting drop in home prices is necessary to reset housing values to their pre-bubble levels. Allowing delinquent homeowners to remain in their homes for months or years means many of the owners will stop maintaining their properties, which hurts their neighborhoods, and their own delinquency may even encourage neighbors to default, prolonging the housing market's pain, some say.

But Kenneth Rosen, chair of the Fisher Center for Real Estate and Urban Economics at UC Berkeley, said banks and the government "are being quite rational" in stretching out the foreclosure process to avoid displacing homeowners and depressing prices. He estimated that fewer than 15 percent of Bay Area mortgage-holders who are 90 days overdue will get foreclosed on. "Most people will catch up if they can get a job" or a loan modification, he said. In the San Jose metro area, about 1.9 percent of mortgages were in foreclosure in May, or about 4,900 loans, CoreLogic said. In the East Bay, the rate was 2.5 percent, or about 10,090 loans. Bay Area median home prices, though rebounding from lows reached last year, are down 38 percent from their peak in July 2007.

Foreclosure is certainly taking longer than it used to.

According to figures from ForeclosureRadar, for the California homes that were foreclosed on in June, it took an average of 234 days from the "notice of default" to the time the property was foreclosed. That's nearly eight months on average — meaning some homeowners stay in their homes much longer. In January 2007, the average time to foreclose was a little more than four months. New state laws have built more time into the foreclosure process, adding a requirement that lenders try to contact borrowers in person before they are allowed to file a notice of default, for example. Between legislated timelines, delays because lenders are swamped with loan modification cases, and possible strategic delays on the part of banks, many homeowners can stay put, payment-free, for months on end.

Jobs aren't enough

There's another unfamiliar wrinkle in delinquency trends now, said Hans Johnson, who studies housing at the Public Policy Institute of California. Any time unemployment rises, mortgage delinquency does too, he said, just as it has in the past few years. But this time around "even people who are employed are debating whether to keep paying the mortgage because they're so far underwater," he said.

New research from consulting firm Oliver Wyman found among borrowers nationwide who defaulted in the first half of 2009 and remained in default at the end of last year, 19 percent could have afforded to keep paying. In June, mortgage financing company Fannie Mae said it would punish such strategic defaulters by prohibiting them from getting a Fannie-backed loan for seven years after their foreclosure, instead of the typical five.

Pinole resident Charles Rinne, 63, is no longer employed, but the retired postal worker says he could keep paying the $1,300-a-month mortgage on his two-bedroom condominium. Instead, in February, he stopped.

He considers defaulting a way to live more affordably after years of racking up debt.

Rinne purchased his condo for $26,500 in 1973 and over the years refinanced it several times. He said he ran up credit card debt and had some dental surgery that was not fully covered by insurance.

"All of a sudden late last year I just could not pay all the bills down to zero," he said. So he plans to file for bankruptcy, which will delay foreclosure proceedings.

"That will allow me to save as much money as possible so I have the money to move," he said.

There's no survey data on the demographics of nonpaying homeowners. But with unemployment and recession affecting all socioeconomic levels, the nonpaying phenomenon spans poor neighborhoods and rich ones, from tiny condos to multimillion-dollar houses, said Jon Maddux, CEO of YouWalkAway.com. The company provides legal and financial advice to homeowners who've stopped paying.

Maddux said defaulting is one way owners have of "lashing back" at lenders when they've been frustrated by a lack of response or denial of their loan modification. He rejects the notion that borrowers have an ethical obligation to keep paying, saying mortgages are contracts that specifically include language about what happens if the borrower stops paying.

"We've made it so sacred to pay your mortgage, when it shouldn't be that way. People shouldn't make their families suffer to pay a mortgage that has an exit strategy in the contract," he said, referring to foreclosure.

S.J. man fights back

San Jose homeowner and Santa Clara Valley Transportation Authority bus driver Darrell Thomas stopped paying his mortgage in late 2008 after he lost overtime pay and while he was seeking a loan modification. He was offered a trial modification in April last year, but as he was about to start making the new payments, he learned he'd been foreclosed on. With help from an attorney, he successfully sued to get back his triplex, where he lives and has tenants.

But he's still pursuing legal action against his lender, Wells Fargo, because he feels he was improperly denied a loan modification under the Home Affordable Modification Program. In May he began making mortgage payments for the first time in almost a year and a half, as part of an agreement with Wells Fargo to ensure the bank would not foreclose on him during litigation.

While some might find relief in walking away from their homes after prolonged struggle, "I don't look at it that way," said Thomas, 46. "That's home. I'm established, that's where my family's at, and it's hard to start over."

With unemployment still high in the Bay Area and home price stability not yet assured, San Jose condo owner Jeff Dunkin puts his own situation — in default, working infrequently and bracing to move out of his first home — in perspective. "I'm just one person in a sea of problems," he said.

Tax foreclosures - Higher Profits with Pre Foreclosure Listings

2010-07-25T04:59:00.000-07:00

You may bid as often as you dare. Low-ball offers are easy, but seldom produce the highest profit over a year. You would miss too many great deals chasing a few once in a lifetime dreams.

Hector Milla Editor of the "Best Free Foreclosure Listings" website -- http://www.BestFreeForeclosureListings.com -- pointed out;

“…The easiest way to maximize profits buying homes at foreclosure auctions is to use top quality foreclosure listings. The best lists provide sufficient information to form a reasonable opinion about each prospect. They allow you to evaluate thousands of home using basic data, sort by extended supplement information, and even provide proprietary valuations and index ratings. When searching through a list of over a million properties, all help is welcome…”

If profits are your goal rather than a one-time purchase, you cannot afford to rely on simple lists. Look for a list that includes photographs, comparable sales, and all taxes owed. Some lists include court data, including bankruptcy stays, injunctions, disputed titles and many more litigation traps. You will save days spent chasing records, making unproductive calls, and perhaps worst of all, driving to a location only to find a home in battered condition.

Targeting pre-foreclosure auctions eliminates the greatest delay in all real estate deals. You do not need a willing seller. Once the auction is set, it will occur. Occasionally, you may be the only bidder. More often, a few bidders actually compete toward the end. If you are better prepared and properly investigate each property, you can precisely bid up to, but not over your minimum profit requirement. You are not required to be perfect, but you must know when to raise your bid, and when to stop bidding.

“…The best companies provide a full ra

nge of data, features and functionality for about $30 to $50 a month. You could pay more, but be sure to evaluate all extended features and products carefully to insure you are not overpaying. Be sure to take advantage of free trial offers. You will have an opportunity to compare multiple services, free of charge, before selecting your favorite…” added H. Milla.

Further information and resources to get free home foreclosure listings by visiting http://www.BestFreeForeclosureListings.com

Hector Milla runs his corporate website at http://www.OpsRegs.com where you can see all his articles and press releases.

How To Find Foreclosures | Real Estate and More

2010-07-25T04:57:00.000-07:00

Realtor Leads: Can They Really Help You To Make Money?

2010-07-18T21:56:00.000-07:00

Do you know anything about the realtor leads? Do you have some ideas about what they do and their many services that you can acquire from them? Do you also know about their specific functions and as to why they do exist? If you don’t know any sort of things about the sad matter then reading the entire content of this blog post article would definitely be a helpful sort of way for you to know some things about it. For your great information, there are actually several and various sorts of alternatives on how you can possibly be able to find the most efficient and or formidable type of realtors today.

One of the most effectual ways on how you can possibly seek-out for the most formidable and or efficient sort of leads is through the utilization of the email leads, phone verified leads, internet leads and so many more types of leads.

How can you specifically and efficiently check-out if you have been able to find and use a formidable sort of realtor leads? How can you specifically be able to know if what you have chosen is high in quality and or profitability and not just a certain senseless data that had already been used and tested by several individuals to be such of an inefficient sort of lead?
To let you know, you can surely be able to get the best type of leads through simply using the internet as the main passage of getting what you need and want about the said type of matter and this is according onto the experiences of certain brokers.

You should know that there are already many brokers today who had been very successful through the great help of the real estate broker leads that they have got out from the internet.

In fact, aside from that of the successful independent brokers today, there are also certain broker firms and companies that had also been successful through simply using the realtor leads that they had acquired out from that of the usage of the internet. You should know that relying onto the internet in getting reliable broker leads is such of an efficient sort of approach and this is because of the matter that there are already numerous numbers of brokers who have been triumphant in each and every time that they had conducted a particular sort of broker transactions such as that of selling, buying and commercializing and or endorsing certain kinds of properties.

Through simply depending onto the internet, you can definitely make your search for the best types of realtor leads a certain kind of success. You should know that there are several and various real estate broker companies and firms that had been successful in all of their attempts to meet their expectations upon selling, buying, endorsing and or commercializing particular kinds of real estate properties such as that of the homes or houses, condominium units, apartment homes, commercial buildings and a lot more.

Despite of the fact that you really can be able to seek-out for the best sorts of realtor leads via internet these days, there are certain sorts of considerations that you greatly need to have in hand and this is because of the fact that all things have its own advantages and disadvantages.

If you have some plans to start doing a real estate business, you greatly need to start purchasing efficient sorts of realtor leads coming only from those that are formidable and professional real estate brokers.

You should know that the there are certain problems that you can possibly encounter most especially if you have chosen a low-quality type of broker lead. You also need to know that there are certain mortgage and or real estate broker firms and individuals that are just greatly efficient by its name but not really by its deeds, services and actions.

This kind of matter is just like that of buying a wrong kind of medicine for a certain sort of illness and or ailment. However, if you are just able to look out for the most efficient and recession-proof kinds of realtor leads then you can definitely say that succeeding in the said kind of business would just be like that of eating a piece of cake.

Moreover, can you really entrust your confidential real estate business schemes and or plans onto your chosen broker personnel and or firm?
Well, trusting a certain sort of broker firm and or individual is greatly a helpful way for you to seek for an efficient kind of realtor leads and this is because of the matter that they can really provide the best sorts of ideas, tips, advices and suggestions on how you can possibly meet your real estate business goals and or targets.

On the other hand, you greatly need to ensure that your chosen broker really has what it takes to be considered as a reliable source of accurate and efficient types of realtor leads. Because if you will not do this kind of thing then it is very certain that you will just waste your time, money and effort upon searching for the aforementioned kind of matter.

You should specifically know that not the entire realtor leads that you can seek-out over the cyber world are efficient enough to help you in meeting your real estate business dreams. There are just a few that are really efficient and the rest are just pure scam. Therefore, you really should be very careful in choosing the kind of lead that you want to use in your real estate business. In this sort of way, you can be sure that you are investing your finance, time and effort in the right kind of way. Lastly, you should make it sure that you have selected a legitimate kind of broker firm so that you can assure to yourself that you are in good hands.

Investing � Five Factors to Consider Before Investing in Residential Real Estate

2010-07-18T21:52:00.000-07:00

During the past decade, many people have jumped into residential real estate investing. This was never so true as during the recent real estate boom. People read all the âget rich quickâ schemes that litter the book shelves of libraries and book stores â use other peopleâs money, use no money of your own, and make millions! A lot of people did make great sums of money during the most recent boom; but now those, who did not get out before the market cooled, are seeing those investments in foreclosure due to their inability to make the mortgage payments.

Just because the real estate market isnât over the top, as in the past few years, does not mean you no longer can make money in residential real estate. The difference between now (post-boom) and during the market boom is that the âget rich quickâ schemes will not work.

Do You Have What It Takes?

Investing in real estate is not for the faint hearted, the non-risk takers. It is for investors who are in it for the long haul, who can easily sit on their investment (if need be) until the market shifts in their favor. It also is for those who truly enjoy this type of investment. They are the ones who are the most successful in real estate investing.

You must be willing to invest time â upfront and before each potential investment. If you do not take the time to research the properties and your target market, you probably will not be very successful. You also must gather knowledge on how to make a real estate deal that works in your favor. That requires educating yourself to understand the jargon and game rules. Today, it takes a careful, methodical approach to residential real estate investing, especially when acquiring your first property.

Besides needing time and money, being a risk taker, and being willing to commit to a long-term investment, if needed, there are five additional factors you must consider each time before you make an investment in residential real estate.

Supply and Demand â Where Is the Current Market?

The economics of supply and demand is what makes the long-term investors successful in residential real estate. They are willing to weather the ups and downs of the real estate market, waiting for an advantageous market to sell their property.

Supply and demand is influenced by many economic factors, which in turn affects the residential real estate market. Well-located residential real estate will endure fluctuations in the market and continue to appreciate in value. Knowing your market means knowing when to buy or not to buy, which deals will work when, and when to sit on an investment or sell it.

Your Creativity

Another factor to consider is your own creativity in managing your investments. Residential real estate is one type of investment that allows for a lot of creativity:

â¢ You may invest for the long term, renting the property to continue making a profit while waiting to sell at a more advantageous time. You can purchase a home to fix up and resell immediately for a profit.

â¢ There are many financing options available for residential real estate, allowing for even more creativity. You also can invest on your own, with a group of partners, with a corporation, or even with a Real Estate Investment Trust (REIT â a mutual fund with real property assets or mortgage securities).

â¢ There is an abundant variety of residential real estate types in which to invest â single-family homes, townhouses, condominiums, and duplexes.

The more creative you are in creating and managing your real estate investments, the more profitable and successful you will be.

Other Peopleâs Money

A third factor is knowing how you can use other peopleâs money to your advantage without landing in foreclosure, as so many people now are who subscribed to the âget rich quickâ schemes during the boom.

You can begin with only a few thousand dollars, using other peopleâs money to underwrite the remaining mortgage. You must know all the different ways available to finance your investment. This goes back to taking the time to educate yourself, before you begin investing, and creatively making the best use of financing.

Other Peopleâs Time

Whether you are fixing up real estate to sell or renting it, it will take time, effort and management. If you already have a full-time job and a family, you probably cannot do it all yourself, and I doubt you wish to be woke up at 2 a.m. by a renter with a plugged toilet.

Using contractors to fix up the property or experienced property managers to handle your rental real estate makes for less profit in your pocket on your individual investment properties. However, it frees up your time to invest in more properties, making your overall profits much higher.

Your Tax Advantage

Residential real estate investing is quite unique. It offers you tax write-offs not available in other types of investments. There are many deductions available to you â deducting the mortgage interest or refinancing without being taxed are just two examples. There are many benefits to real estate investing that reduce your tax liability and increase your profits.

If you believe residential real estate investing is for you, begin by learning more about it. There are thousands of books and resources on the topic. Stay away from anything that sounds too good to be true. It probably is, especially in todayâs real estate market.

Advantages of Private Money Over Bank Loans | Understanding Real Estate

2010-07-18T21:49:00.000-07:00

Since the credit bubble first burst, traditional sources of investment property loans have all but dried up, forcing real estate investors to find alternative sources of capital. Seasoned investors have been using private money for years, so it’s not an uncommon method of real estate financing, but when money was easy to come by at conventional banks, most investors took the familiar route. But now many people are realizing that finding the real estate deals is the easier part of the business these days, but getting a loan to buy the property is the hard part! So what do you do?

A great many real estate investors are turning to private lenders to fund their purchases. Private lenders can be anyone. They could be friends you already know, either very well or just casually. They could be relatives. Or they could be business owners, doctors, attorneys, and other professionals you do business with everyday. Private lenders in general don’t promote, and may not even realize they have the potential to make great money until they meet an investor— like you— who educates them. Since no one is getting a very good rate of return on their money these days, whether it be in a CD, mutual fund, IRA, or in the stock market, many everyday individuals you never thought of before as lenders could have money to lend to you for your real estate deals. It’s a win-win situation: they make a much higher interest rate than they could make elsewhere, and you set the terms you know you can afford.

Imagine how many great deals you could do if you had access to lots of quick cash—other people’s—not out of your own pocket. Imagine never again letting deals pass you by due to the rules and limitations of banks! And also image going to closing and only signing two or three documents instead of two inches worth! Private real estate money deals are incredible simple and the total paperwork is normally less than 10 pages. In addition, investment property loans from private real estate money sources usually have no points and little upfront or back-end fees. You won’t find that at a conventional bank!

Establish your credibility with those who have “deep pockets” and you’ll have access to all the money you need for any estate deal. If private lending is new to you, first educate yourself about this type of real estate financing. Knowing the advantages can mean the difference between making a good deal work, or losing yet another to your competitors.

Making Money With Wells Fargo Foreclosures

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Because of some mitigating circumstances, many homeowners were forced to renege on their obligation to pay their mortgages. This resulted to thousands of Wells Fargo foreclosures offered for sale on the market daily.

This opened a floodgate of smart investors and first-time homebuyers who want to buy bank foreclosure properties either to live in, rent out or re-sell. Wells Fargo foreclosures are very cheap, selling as low as half their current market value. The explanation for the low prices is very simpleWells Fargo does not want to be saddled with unprofitable properties so it would prefer to sell them at low costs.

Where to Find Cheap Bank Owned Properties:

Any smart investor can tell you that you can profit from a real estate if you buy a property at a very low price and sell it for a substantial profit. So start by looking for bank foreclosures that are cheap yet in good condition. To save you time and effort, subscribe to foreclosure listings. A foreclosure list is the secret weapon of many smart investors. This is the tool that enables them to get ahead of their competitors.

Subscribing to foreclosure listings gives you a chance to know about new foreclosures as soon as they are placed on the market for sale. And you will know every new foreclosure home in all major cities and towns in the country even without leaving the comfort of your home or office just by subscribing to foreclosure listings.

Buying Bank Foreclosures:

You can buy bank foreclosed homes at auctions. Buying at auctions gives you an assurance that the properties are really at their lowest market price. However, because buying means bidding on the property, there is a great possibility that you will get carried away by the excitement of the process and end up overbidding on the property. You can avoid this mistake by setting the amount that you can afford to pay the property.

Learn everything you can about the foreclosure investing market and give yourself an edge over other buyers who are hunting for cheap Wells Fargo foreclosures.