Residential Real Estate

Income Property – What Is It And How Can You Become Financially Free?

Income property is an exciting way to invest in property. Traditionally property investing costs you money every month. This is because there is a short fall between your expenses (e.g. your mortgage, maintenance, insurance payments etc.) and your rental income. You have to make up this shortfall with your own cash.

Income property is property that generates MORE income than you have to pay in expenses. This is exciting because at the end of each month you have money left over that you can either use to reinvest or you can spend it on your lifestyle…awesome!

How Can Income Property Make You Financially Free?
Income property can make you financially free because it generates you passive income. Passive income is income that you don’t have to work for. Because you don’t have to work hard to get money out of your property (you just rent it out and receive money every week) this means that any income you receive above your expenses is passive income.

If you can build up enough passive income from your properties that you can completely cover all of your living expenses then you are considered to be financially free. This is an amazing achievement because it means that you can live indefinitely (until you die) without ever having to work again. Your investments will pay for your food, your rent/mortgage, your entertainment, your holidays etc etc.

Income property generates more rental income than you pay in expenses. This is passive income because you don’t have to work for it, you simply rent out your property. Over time you may have to do a little work but most of the work will be done by your rental manager (for a small fee).

Over time the income from your property is very likely to increase. This is because your rental income goes up over time while your major expenses (your mortgage) stays the same or even gets smaller. Eventually you can completely pay off your mortgage using NONE of your own money and you can earn even more money. This means that every year as rents go up you become wealthier and receive more passive income?

Income property has the added bonus of generating you extra money through capital gains. As the value of your property goes up your equity goes up. You can realize this equity by selling your property or by borrowing against it. This can be very beneficial as it can help you to purchase more income property that will generate you even more passive income.

Article Source: Ryan Mclean

Donna Sanford

Phone: 888 381 8654
Email: donna@yoursolution4re.com

Real Estate Investor | Short Sale Professional
Real Estate Transaction Negotiator | Real Estate Investing Services

Your Solution 4 Real Estate, Inc.
Bauer Hill & Associates, LLC
Area Short Sale Pros, LLC
Tri-County Capital Partners, LLC

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Area Short Sale Pros, LLC negotiates short sales on behalf of homeowners, Realtors and buyers/investors and we act as a neutral third party in the transaction. We have partnered with the best short sale negotiators who have over 50 years of combined industry experience and focus specifically on Short Sales. What makes us unique is our extensive contacts with lenders who know we are working for both buyer and seller as a third party negotiator and this gives us the “edge” over others. We service customers in all 50 states and work with all lenders and mortgage servicers. We are professionals with a proven track record for achieving positive outcomes for our clients. Call us now at 888-381-8654.

Categories: Blog, Investing in Real Estate, Real Estate Investing, Real Estate Negotiating, Real Estate Purchasing, Real Estate Sales, Residential Real Estate

Tags: Business Connections, Buying Forclosures, Market Analysis, Real Estate Investing, Real Estate Investor, Real Estate Sales, Real Estate Transaction Negotiator, Residential Real Estate, short sales

14 APR 0

Common Home Buyer Mistakes To Avoid

Whether you’re on the buying end or the selling end of a real estate deal, there’s a whole lot of money riding on the outcome. Listed here are a few common mistakes and how you might avoid making them yourself. A little research can help you to avoid making these costly mistakes.

Selecting an agent with whom you do not connect, or who is not committed to learning and meeting your needs.
You real estate agent will serve as your voice throughout much of the home search and sales process. Be careful to select an agent who genuinely cares about meeting your needs, and with whom you feel you can communicate well. A misunderstanding or disagreement at any point in the process – even after you’ve made the purchase – can be a source of some serious heartache and regret.

Failing to get pre-qualified.
In today’s market, heading to the bank or mortgage company to be pre-qualified should be one of your first steps when you start thinking about buying a home. The process is relatively painless, and can help you to get a realistic picture of what sort of home you can really afford. Pre-qualification signals to sellers and agents that you’re ready to find your dream home, and that you have no interest in wasting time.

Misunderstanding the total price tag.
When hunting around for homes, ask your real estate agent to discuss closing costs with you – beyond a simple down-payment, there are often many costs, taxes, and fees that can creep up on you, totaling hundreds or even thousands of additional dollars. Earnest money, inspections, title insurance, and legal fees add up quickly, and should be a part of your planning process from the beginning. There’s nothing more upsetting than having an offer accepted and finding that you can’t pull the cash together to seal the deal.

Making your search too narrow.
By and large, every other consumer out there has access to the same publications, search engines, and bulletin boards that you do. Because of this, in many markets, homes that show up through these mediums will be snapped up before you even catch wind of them. A qualified real estate agent has access to listings the very moment they hit the market, and long before most consumers catch wind of them. Armed with your specific requirements, a good agent will make a quick connection, and have you opening the front door for a walk-through before other buyers even know about the property.

Believing in one PERFECT dream home.
Purchasing a home is not about soul-mates, nor is it about love at first site. Home buying is a process that involves a lot of careful consideration and a process of elimination. One week, you may not find something that meets you needs and budget in a neighborhood where you’d like to live. The next week, there may be three such homes on the market. Patience and careful thought are required to ensure success.

Thinking in the short-term.
A home may be perfect for you now, but what if your family grows? Will the house still be perfect next year? How about in five or ten more years? Real estate is a long-term investment in your future, and purchasing a home is not something to be done lightly. Think ahead to ensure you won’t be facing buyer’s remorse down the road.

Failing to do your homework.
Looking at a home in the fall tells you little bout whether the basement floods, just as inspecting a house on a quiet weekday afternoon tells you little about the neighbor who works on his hot-rod all weekend, gunning the engine while you try to nap. How are the schools serving the neighborhood? Is there a safe place to learn to ride a bike? Is the house in a flood plane or evacuation zone? You need answers to these questions before proceeding with an offer to purchase. Don’t be shy – walk right up to neighbors, knock on doors, take a look at local disaster plans. If you make an offer on a property, you want to do so with your eyes wide open.

Skipping the inspection.
Home inspectors make a good portion of their living doing pre-purchase inspections. You may feel that the money that they charge for the work would better serve you as part of the down-payment, but you’d be sorely mistaken. A home inspector brings a trained eye to the job – the kind of eye that can spot black mold at a hundred yards, and identify faulty plumbing in an instant. Skimping on your home inspection may seem like a money-saver, but will end up costing you a bundle in home repairs in the future.

Overlooking insurance considerations
The last thing you want to do when meeting with real estate agents, bankers, inspectors, and lawyers is to sit down with yet another person interested in taking your money. That said, discussing insurance premiums and coverage levels on a home prior to making a purchase will help you to put together a much clearer picture of your financial needs, and may point out a few risk factors that you never considered.

Opting against a home protection plan.
In the event that even your home inspector misses an important repair or issue with the home prior to your purchase, you can be left with huge repair bills for an unanticipated issue. A home protection plan, which you can arrange through your real estate agent or mortgage company, is a short-term insurance plan to hedge against just this sort of unforeseen issue – usually for a period of one year from closing. The premiums are low, and the benefits (should you need them) are priceless.

Article Source: Ezine Articles

Categories: Blog, Investing in Real Estate, Real Estate Investing, Real Estate Negotiating, Real Estate Purchasing, Residential Real Estate, Reviews, Short Sale Pro

Tags: Business Connections, housing market, Real Estate Networking, Real Estate Transaction Negotiator, Residential Real Estate

10 APR 0

Tips to Help You Get Your Home Sold

Once the crash of the real estate market occurred in 2008, the market around the country was hit hard. Prices fell to 50% from the height of the market, which left home prices spiraling out of control. So it’s no surprise that the home values suffered just like everyone else in the United States.

Even though home prices have fallen significantly, there is still good news around the corner. The values have been pretty steady since the beginning of 2011, and the market is becoming stronger every day. So it’s possible that things are moving in the right direction. Keep in mind; it’s still a buyer’s market out there, so sellers in the area need to work hard to show the amount of value that is still there. In order to get the best price we want to provide you with a few tips that will definitely help.

Tip 1: Studying the Local Housing Market – It’s very important to have a good knowledge base around the local housing market. When you have a better feel for what the real estate prices are averaging you will have a good idea about how much you can get out of your home.

Tip 2: Hiring a Home Inspector – Another beneficial tip is making sure you hire a home inspector. These individuals will help you find any type of problems that need repaired before the buyer actually hires one. This approach will allow you to command a higher price and even sell your home faster.

Tip 3: Cleaning the Home – We also recommend getting the house as clean as possible if you want to get the best home price. If everything looks cluttered and dirty you can expect that buyers will be turned off. Even if they are interested they probably won’t want to pay your listing price. The best thing to do is make your house gleam before it’s presented to the market. Everything from the windows to the bathroom should be sparkling. Sure it’s hard work, but it’s going to pay off in the end.

Tip 4: Paint the Walls – While this isn’t mandatory it can make a big difference. The cost to paint is pretty inexpensive when you consider the type of money you are going to get from the sale. In fact, sometimes this allows you to get a higher price when selling the home.

Tip 5: Curb Appeal – One of the best ways to get good home prices is by offering plenty of curb appeal. This means when buyers are driving by the home they look at everything from afar. If you need to add lighting, landscaping, or even repaint the front door it can be a big help.

If you utilize some of the tips we’ve given you here today you won’t have to settle for the sales price that other properties are receiving. It will actually help you get the top value for your house, even when the market is a little tough.

Article Source: Lance Mohr

Categories: Blog, Real Estate Negotiating, Real Estate Sales, Residential Real Estate, Short Sales

Tags: housing market, Market Analysis, Real Estate Sales, residential foreclosure, Residential Real Estate, Short Sale Pro, short sales

2 APR 0

What Makes Your House LEED-Certified?

Before we discuss the makings of LEED-certified home, let us first understand what LEED certification is and why it is important. This rating system stands for Leadership in Energy and Environmental Design, formed by the US Green Building Council. This system measures the construction practices followed during the building of a structure or home. This allows the buyers to purchase or build a home that is environmentally friendly.

Its importance:

With the deteriorating state of our environment, having a certifying body that will look into how homes and buildings are built is greatly needed. This will aid homeowners and contractors in monitoring their usage of natural resources. The waste produced and its implication to the environment.

On top of the monitoring, the LEED certification team works hard to promote a better alternative of building structures, an option that will not include hurting the environment. It is admirable how many professionals have worked hard to ensure that the quality is not compromised while following the principles of eco-friendly building. Such principles include the use of sustainable and eco-friendly materials, conservation of water, efficient use of energy and preserving the quality of air that will be circulating inside the property.

Better understanding of the LEED certification:

Note that there are four levels of LEED. Corresponding points are given to the properties. The number of points will determine the level of certification from the LEED. There is certified, silver, gold and platinum. Each level has a set of requirements. To be certified, the building project has to apply for it and submit the essential documents. If the certification body is satisfied with, the requirements submitted, then a certificate will be issued.

In order to be certified, the construction of the property should embody the eco-friendly practices. This includes the use of recycled materials, reducing or eliminating the waste generated because of the construction and using materials that do not emit harmful substances to the environment.

The LEED for homes is a great way to guide homeowners who want to purchase or renovate their existing homes and make it more environmentally friendly. To be certified is not easy. Aside from the guidelines to be followed, a third party will be assessing the property. They will validate any claims you have made. They will also ensure that you earn the certification by following eco-friendly standards in building or renovating homes.

Following the LEED guidelines is crucial even if you are not aiming to be certified. Following such guidelines will help you conserve energy, which means lowering your utility bills. This will also help you conserve water and provide you with a better quality of air at home.

It is time to pay attention to the real condition of our environment. Through this, we will be able to make the necessary changes and help improve its state. The LEED certification is one way of making our world a better place. Builders will be more careful with the materials and processes they use for the construction. This will also give a better option for homebuyers. Now, they will be properly guided when purchasing an eco-friendly property or renovating their exiting home

Article Source:Ezine Articles Roby Hicks

Categories: Blog, Business Connections, Investing in Real Estate, Real Estate Investing, Real Estate Negotiating, Real Estate Sales, Residential Real Estate, Reviews, Short Sale Pro, Short Sales

Tags: foreclosed homes, housing market, Market Analysis, Real Estate Coaching, Real Estate Investing, residential foreclosure, Residential Real Estate

22 MAR 0

Using an Agency in Real Estate Transactions

Agency is simply the relationship between the principle (the seller or buyer) and the real estate professional. In agency, the professional has a fiduciary duty to look out for the best interests of his/her principle. The fiduciary duty is defined as the ‘duty of utmost care, integrity, honesty, and loyalty in dealings.’

There is a form that is used called the Agency Disclosure form (or AD for short.) This is the very first form that is used in every real estate transaction. It has 1 purpose: it discloses (makes openly known) the 3 types of agency that could happen in a real estate transaction.

1. Agent represents the seller only.

In this agency the agent for the seller represents only the seller. He has a fiduciary obligation to get the seller the best price possible for his home. He also has the fiduciary duty to make sure the seller understands all the forms he must sign. The agent serves to protect and promote the seller. In a fiduciary relationship the agent has an obligation to put the needs of the seller first above his/her own needs. He does not have a fiduciary duty to the buyer but does own the buyer the duty of fair and honest dealings.

2. Agent represents the buyer only.

This is the exact same as above except the agent represents the buyer only and has the fiduciary duty to get the home for the buyer at the best price while protecting and promoting his/her best interests. He only owes the seller the duty of fair and honest dealings.

3. Dual agency: agent represents both the seller and buyer

If a dual agency is formed it must be disclosed and agreed to by all parties of the transaction. A dual agency can never be done in secret. This dual status must be known because an agent will know confidential information about his principles. The disclosure forms states that an agent in a dual agency situation must never reveal confidential information to the other party without written permission.

The agency laws were put into practice to protect home owners and home buyers. It establishes that an agent must put the needs of the principle above his own. The law also makes the declaration of who represents who and in what capacity widely known. There are to be no secrets in a real estate transaction.

Dangers of Dual Agency

In most real estate transactions there is one agent representing a seller (aka sellers agent or listing agent) and another agent representing a buyer (aka buyers agent). However, at times, one agent might end up representing both the buyer and seller. This is called dual agency. It is perfectly legal but also can be filled with challenges. In many states, a dual agency status must be acknowledged and agreed to in writing by all parties.

To understand the potential challenge let’s use this as a scenario:
• The house is informally appraised and the fair market value seems to be $270,000
• The seller begins with a listing price of $275,000
• The real estate agent represents both the buyer and seller: a dual agency

It is not unusual in the beginning of the formation of a contract to purchase that the buyer will have his initial offer price and also a back up price in mind. He might tell his agent to offer $260,000 but would not go higher than $265,000.

If this agent represents both the buyer and the seller how does he approach the seller with that offer? He must tell him there is an offer of $260,000 but cannot reveal anything else without breaking his fiduciary duty to the buyer.

Now the seller does not want to sell the house at $260,000 and asks his agent what he thinks would be a good counter offer? Does the agent knowing the house is worth an estimated $270,000 suggest to him to counter at $270,000 and possibly lose the deal? This would be in the best interest of his seller. But he could also recommend the seller to counter at $265,000 knowing the deal would most likely close. This would be in the best interest of his buyer. He could even say, I cannot tell you what to counter it as which might not make his client too happy. The agents’ fiduciary duties to both of them are in conflict.

Other challenges could crop up when further in the process it comes to other concerns; for example, repairs. The buyer might want a carpet allowance. So the agent needs to represent that need. But he also has the duty to get the most money for the seller. This is just an example of another challenge in dual agency situations.

I do not write this to say that dual agency is bad, wrong, or illegal. It can be done and be done successfully. I write this so people understand that agency clarification is important; do not treat it lightly. If you are potentially in a dual agency situation you must consider all the benefits and challenges.

This is why agency clarification is the first form to be filled out in the real estate process. You want to know exactly who is representing who so you do not reveal information to ‘the other side’ accidently.

Let me finish with an interesting twist; 2 different people working for the same broker also creates dual agency. For example, it one agent is with Century 21 Award. They may have several offices in any given sales area with 100′s of agents. I work out of one office and let us say I have a listing. A person that I do not know and have never met works in another office. That agent could bring a buyer to my listing, the buyers like it, and decide to make an offer. This is a dual agency because we both work for the same broker even though we do not know each other and work out of different offices.

Categories: Blog, Business Connections, Commerical Real Estate, Real Estate Investing, Real Estate Negotiating, Real Estate Sales, Residential Real Estate, Reviews, Short Sale Pro, Short Sales

Tags: Business Connections, Commercial Real Estate, housing market, Real Estate Investing, Real Estate Transaction Negotiator, Residential Real Estate

20 MAR 0

Flip and Hold Strategy for Bulk REOs

To the buy-and-hold versus fix-and-flip investment models, let’s add one more: flip-and-hold. Buy-and-hold typically referrers to owning rental property. The landlord has the responsibility of maintaining the property and receives rental income. In the fix-and-flip model, the “fix” is essential. An investor using this model typically invests in property repairs in order to gain top dollar at sales time.

In a flip-and-hold investment, the investor sells the property without performing repairs and holds the paper (that is, holds the deed while receiving installment payments). This is a seller-financed or land contract sale. When seller-financing ties up a large amount of cash on a single property, it may not be the best income producing strategy. However, let’s look at this strategy in the context of inexpensive bulk REO properties.

When purchasing these cheap properties (and by cheap, we mean $10,000 or less each-no that is not an error-ten thousand dollars or less each) why not fix and flip? For two reasons: financial and psychological.

The type of home purchased for $10,000, when fully renovated, might be valued at $30k to $45k. Still sounds like a deal, right? The problem is that no likely buyer will be able to purchase the property at that price. There are no mortgages available for under $60k-even for a working person with perfect credit. There just aren’t. So that means the house you spent working capital on painting, carpeting, and rehabbing cannot be sold. The best outcome in this scenario is that the house is rented, and you assume the inherent problems of rentals in low-income neighborhoods. This is the financial reason not to fix a bulk REO house.

The psychological reason not to fix a $10k house is based on the psychology of the buyer. A homeowner who invests money, labor, and love into their home is less likely to walk away from a seller-financed loan than one who has invested only money. Meanwhile, the investor’s out of pocket is limited to the purchase price of the property, selling expenses, and insurance. As for delinquent tax bills and other liens, those become the responsibility of the new homeowner and are negotiated as part of closing.

How do the actual homebuyers feel about purchasing a seller financed home? Velma Williams of Chicago, said to her seller “I never thought I could own a home. It just needed a little work. I feel so blessed I mentioned you in praise time at church.”

Even with monthly payments pegged to 70% of actual rent in an area, and the psychological incentives to make loan payments, some homebuyers fail. In that instance, since the seller holds the deed, a simple eviction is all that is required in most areas to recover the property. Because of homeowner repairs, the property is often resold in better condition than when it was originally purchased by the investor.

With the flip-and-hold strategy, the investor spreads his risk over a large number of properties and stands to realize 15-to-30 years of cash flow at 9% or more interest. Investors who prefer a more passive role, but like the strategy, can purchase seasoned land contracts at a discount. They simply hold the paper and receive the cash flow.

Article Source: Lori Greymont

Categories: Blog, Business Connections, Investing in Real Estate, Real Estate Investing, Residential Real Estate, Short Sale Pro, Short Sales

Tags: Business Connections, Buying Forclosures, Real Estate Coaching, Real Estate Investing, Residential Real Estate

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