Bisnis Property | Broker Property | Property Style

An Overview of Easements

2008-07-16T23:51:00.003-07:00

Title insurance is generally associated with insuring a purchaser's or lender's interest in a particular piece of real estate. The right to use an easement is often considered less important than unencumbered title of the insured parcel. An easement, however, can significantly affect the value of the insured parcel. Questions regarding the validity or use of an easement may result in a dispute among neighbors that may require protracted litigation to resolve.

In light of the potential for such unpleasantness, the practitioner is well advised to be aware of any easements related to the property to be insured. The following discussion is intended as a brief and general overview of some of the issues a practitioner will encounter when a title company is asked to insure an easement or a piece of real estate affected by an easement. Of course, each title order will have its own set of circumstances requiring individual attention by the title examiner.

THE BASICS

An easement is a non-possessory right of the owner of one parcel of land to use the land of another. This right to use the other's land is limited to a particular purpose and may be further limited as to the form of usage. 1 An analysis of this definition raises some important points. An easement is an interest in land and not merely a contract right. The non-possessory feature of an easement differentiates it from fee title to land. An easement holder may not occupy and possess the land burdened by the easement; he or she may only use it for the purposes and in the manner established by the terms and conditions of the easement. The meaningful distinction between an easement and a fee simple estate is that the easement describes the right to the use of the land which is specific or restrictive in nature, while the title to the fee is the grant of title to the land itself. 3 This difference is significant because a fee owner receives substantive and procedural rights unavailable to easement holders.

Easements are also distinguishable from leases. A lease is a right to exclusive possession of another's property for a specified period. The key difference here is between possession and use. In Baseball Publishing Co. v. Bruton, the Supreme Court of Massachusetts concluded that the "lease" of a wall for the purpose of maintaining a bill board was in fact an easement in gross because the wall was left in the possession of the owner, who still maintained the right to use the wall for any purpose not specifically granted or forbidden by the " lease."

Easements are also distinguishable from licenses. Much of the litigation in this area, including Baseball Publishing, begins with one party arguing that the right in question is a lease-an irrevocable interest in land- and the other party asserting that the arrangement is a license-a revocable personal right-when in fact the interest might actually be an easement. As a result, essentially the same arrangement has been found to constitute a lease in some cases, a license in others, and in still other cases, an easement.

CLASSIFICATION OF EASEMENTS

While the distinction between easements, leases, licenses, and fee estates may be somewhat murky, the differentiation among types of easements is little clearer. Easements are usually separated into easements appurtenant and easements in gross. An easement appurtenant is created to benefit the owner of another parcel, known as the dominant tenement. This easement will run over another tract called the servient tenement. The easement appurtenant therefore requires both a dominant and servient tenement. One owner's land must be burdened in favor of the estate of another. An easement appurtenant runs with the land. If the dominant tenement is sold, the easement will pass to the grantee, even though it is not specifically mentioned in the document of conveyance. 6 Similarly, if the servient tenement is sold, the grantee takes subject to the easement. An easement in gross does not require its holder to own or possess other land. There is a servient estate, but no dominant one. For this reason, an easement in gross has been described as an irrevocable interest in the land of another. Whether an easement is appurtenant or in gross is determined by examining the grant of easement to detect the intention of the parties and the circumstances at the time of the conveyance. While the deed of conveyance need not include the word "appurtenant," the courts have often presumed that an easement is appurtenant rather than in gross. There is a constructional preference for easements appurtenant over easements in gross.

This preference for easements appurtenant can be overcome by an examination of the land involved. If the easement does not benefit the owner of a particular piece of land, there is no dominant tract and the easement is in gross.8 Utility easements are usually held in gross. An easement appurtenant can not be converted into an easement in gross. The easement's classification will remain in effect throughout its usage.

CREATION OF AN EASEMENT

Most easements are created by express grant contained in an easement agreement or deed or by reservation in a deed. An express grant, however, is not always necessary to create an easement.

An easement may be acquired by prescription and by implication as well as by express grant. Whether an easement by prescription is appurtenant or in gross is determined by the use of the servient estate. If the prescriptive use was for the benefit of the possessor of a particular piece of land, the easement is appurtenant. If it is not for such benefit, it is in gross. Implied easements may be deemed necessary for the use of the dominant estate. Clearly then, they are easements appurtenant to the dominant parcel.

TITLE INSURANCE ISSUES

A title insurer will be faced with two major concerns regarding easements: whether the easement can be insured for a dominant tract and whether an easement can be waived as an exception to the coverage provided by the title policy for a servient tract.

If the title company is requested to insure an easement for the first time, the following questions will be raised:

A. Is the easement appurtenant?

B. What land is benefited by the easement?

C. Were the dominant and servient tenements owned by different parties at the time of the creation of the easements?

D. Was the easement executed by or consented to by all of the lienholders of the servient tenement?

E. How was the easement created, and was the document creating it properly drafted, executed and acknowledged?

F. Does the document creating the easement state its purpose?

G. Does the document state consideration?

H. Is the easement described specifically as an easement appurtenant, binding on successors and assigns?

I. Does the easement document provide that it runs with the land?

J. Does the easement indicate a duration, or is it described as perpetual?

K. Is the easement an exclusive right or may other property owners use it as well?

L. Has an event occurred which may have terminated the easement?

If the examiner is satisfied that a valid easement has been established, the next step is to verify the continuing physical existence of the easement. The examiner will review an inspection report or survey of the easement parcel to confirm that the easement is open and in use. In some areas, a title company may actually send out an employee to physically inspect the property. Upon receipt of the survey or inspection report, the examiner will want to verify that there are no barriers or obstructions which interfere with the purpose of the easements. A survey include the show the easement in its written legal description and in the depiction on the plat. If the easement has been recorded, the chain of title should cover the easement parcel.

The examiner will also decide whether any events have occurred since the creation of the easement which may have resulted in its termination. If the dominant tenement has been resubdivided, split into multiple parcels or undergone a change in use, the underwriter will review the situation to determine the easement's viability.

Tax Sales

If an existing easement has its own tax number separate from the servient tenement, a tax search should be ordered to verify that there are no delinquencies affecting the easement. If an existing easement lies within a tax parcel affecting the entire servient tenement, however, tax delinquencies will not affect the easement. For any easements to be created at a closing, however, all tax delinquencies on the servient tenement must be paid or redeemed prior to the closing. A tax deed shall not extinguish or affect any easement which was created on or over that real property before the time of the tax sale, unless the entire sold tax parcel consisted of only the easement parcel itself. 35 ILCS 200/22-70 (1992).

Merger

The most subtle way of destroying an easement is the application of the doctrine of merger. The risk that the title to the dominant and servient tenements has merged is a dangerous possibility that must be addressed by the examiner. The doctrine of merger states that if ownership of the dominant and servient tenements becomes vested in the same party, the easement over the servient tenement will merge into the fee title of the dominant tenement and thus be destroyed. As an example, A owns Lot 1 and has an easement over adjoining Lot 2 for ingress and egress. If A buys Lot 2, the easement over Lot 2 will merger into A's fee title and will be destroyed. A's fee ownership of Lot 2 gives A far greater right in the land than the ownership of the easement, therefore the smaller right merges into the larger one. If A later conveys Lot 2 to C, the easement must be recreated by a new grant.

The examiner will search the title of both the dominant and servient tenements to look for an incidence of common ownership of both tenements in one party. If such commonality of ownership is located, a new easement must be created, even if the common ownership had been separated later in the chain of title.

In a recent Illinois case, the appellate court stated that a merger occurs when a dominant estate and the servient estates are owned by the same person, thereby extinguishing an easement by virtue of unity of title and possession, given that one has no need of an easement over one's own property. Ownership of both the dominant and servient estates must be identical in duration, quality, and all other circumstances of right. In Ellis V. McClung, the Illinois appellate court held that where the evidence failed to show that the benefited property and the property subject to the easements was all owned by the same parties under identical circumstances, the easements were not extinguished by the doctrine of merger. These circumstances included the duration and the quality of the title. 10

Abandonment

An easement created by a grant, deed or reservation can be destroyed or lost by the owner's voluntary abandonment. There is no duty to use or enjoy an easement as a condition of the right to retain the easement. Therefore, to constitute an abandonment, there either must be an overt act which affirmatively and unequivocally shows an intent to abandon the easement, or a failure to act. This carries the implication that the owner neither claims nor retains any interest in the easement. The dominant owner must clearly relinquish possession or use of the easement. The abandonment is complete the moment the intent to abandon and the relinquishment of possession or use unite. 11

Destruction by Agreement: Abrogation

An easement may be terminated by an agreement between the owners of the dominant and servient estates. This agreement is often known as an abrogation agreement because it abrogates or ends the easement. If the examiner encounters an abrogation agreement in the chain of title which terminates the easement to be insured, the easement is uninsurable.

Waiver of an Easement

If a customer requests that an easement be waived as an exception on the title commitment for a servient tenement, the title company will usually require that a validly executed abrogation agreement be recorded. This agreement must be executed by all parties having an interest in the dominant tenement. In some cases, a necessary parties search should be ordered to determine the list of parties who will need to join in the abrogation agreement.

This articles incorporates Chicago Title Insurance Company Underwriting Guidebooks and examining manuals, as well as a September, 1997 article on Easements by Jeffrey Rezwin and Mary Scmuttenmaer of Chicago Title Insurance Company. These materials are incorporated without specific citation.

1. W. Burby Handbook of the Law of Real Property S23 (3rd Edition, 1965).

2. The Law of Easements and Licenses in Land, Bruce and Ely, p. 1-2 (1988).

3. Park County Rod and Gun Club v. Department of Highways, 163 Montana 372,377; 517 P. 2d 353,355 (1973).

4. Baseball Publishing v. Bruton, 302 Mass. 54, 56, 18 N. E. 2d 362,364 (1938).

5. R. Powell, The Law of Real Property, P. 430 (1987).

6. Taylor v. Lanahan, 73, Ill. App. 3d 829, 832; 399 NE 2d 425, 428 (1977).

7. The Law of Easements and Licenses in Land, Bruce and Ely, p. 2-5.(1988).

8. The Law of Easements and Licenses in Land, Bruce and Ely, p. 2-6 and 2-7 (1988).

9. Curtin v. Franchetti, 156 Conn. 387, 389; 242 A. 2d 725, 727 (1968).

10. Ellis v. McClung 291 Ill. App. 3d 448, 459,460 (1997).

11. Illinois Real Property Service, Sales and Transfers, Section 30:48 (1988).

By Neda Dabestani-Ryba

Expense List for Buying a Home

2008-07-16T23:51:00.001-07:00

There are many expenses that come with buying a home. The following list is a good example of what to expect:

Down payment - A minimum of 20% of the home's purchase price is usually required for the best loan terms and to avoid paying private mortgage insurance (see below), but it's entirely possible to buy a house with a smaller down payment.

Monthly mortgage payments - Include loan principal, interest, and sometimes additional charges for taxes and insurance.

Property taxes - Amounts vary, but the average is around 1.5% to 2% of a home's purchase price.

Homeowners insurance - Again, the cost varies. Call insurance companies for more information, or contact the Florida Department of Insurance for surveys of prices for insurance rates.

Private mortgage insurance (PMI) - If your down payment is less than 20% of the purchase price, this can tack several hundred dollars each year to your loan costs until the equity in your home reaches 22%, when you no longer need the insurance.

Maintenance - Varies year to year, but you may spend about 1% of the purchase price annually on maintenance and repairs.

Closing costs - Include points and other fees charged by the lender, which can add up to 3% of the amount you borrow; title insurance, from a few hundred to over a thousand dollars, depending on the purchase price of your home; inspections, about $200 to $500; and other miscellaneous fees. Many of these costs are negotiable between the buyer and seller, and are dependent on local customs. You can also negotiate with the lender to reduce, and in some cases completely waive, certain costs.

Housing expense ratio Typically, mortgage lenders won't allow these housing expenses to be more than one-third of your household monthly gross income. In other words, 28% of your monthly gross pay (for example, your annual salary divided by 12) is the usual maximum "housing expense ratio" allowed by lenders.

The "housing expense ratio" compares your monthly gross income to "PITI," an acronym for:

* Principal, or the amount you borrowed, of your mortgage loan

* Interest on the mortgage loan

* Taxes: property taxes

* Insurance: homeowners and private mortgage insurance (PMI)

Debt-to-income ratio.

On top of the 28% lenders allow for monthly housing expenses, they will usually let you spend another 10% for other debt repayments such as student loans, car loans and other similar loans. Added together, your housing expense ratio and monthly recurring debts make up your "debt-to-income ratio," and should not be higher than 38% of your monthly gross pay.

Now the Good News

The good news is that there are tax benefits to owning a home. The IRS lets you deduct mortgage interest and real property taxes, within limits, on your annual income tax return! Contact a real estate or tax attorney for the specifics in your area.

Branded Email in the Real Estate Industry

2008-07-16T23:50:00.003-07:00

Branded Email in the Real Estate Industry

You're in the real estate industry, and that means you've got a brand. Chances are, you've spent quite a bit of money to build that brand, whether it's through franchising fees, marketing, websites, business cards, other print materials, advertising, yard signs, and/or through other means. And whoever answers your phones probably answers it with your brand as well - "Good morning, thank you for calling Your Brand Here Real Estate, how can I help you?" Your brand is out there, getting you business, because people recognize and trust it. But what about your email? How much could it benefit you to include your brand on each email you send every day?

I'm not talking about mass email campaigns. I'm talking about branded email that transforms your everyday, plain text emails into dynamic sales pieces. With a good email branding system, you can include your logo, colors, your picture, and links to your website. Some solutions even allow you to upload pictures of properties directly into the designs. Because over 90% of all communication is visual, the power of having graphics in your email is tremendous. Also because of this, branded email will soon become a standard or even a "requirement" in the real estate industry, much like business cards and websites.

A Quick Scenario

Lets look at this scenario - you are a prospective homebuyer and you receive email from two real estate agents. One is a plain text email that introduces the agent and directs you to his website for more information. The second one you receive is branded with the brokerage logo, colors, and it fits with all of the rest of their marketing material, so you instantly get a great impression in your mind of her company. The agent introduces herself and directs your attention to a picture of a newly listed property in your price range, and tells you to click on it for more information. Are you more likely to search the first agent's website for a property, or click on the image to look at that house and possibly similar houses?

Branded email also helps build a relationship with your client. In the situation above, you received an email from the agent with a link to a house in your price range that you may be interested in. It was tailored to you, who would you go back to for more information or more listings?

What Should I Look For?

Next, I want to give you a quick rundown of what to look for when you're considering a branded email system. First and foremost, if the company has a free trial, take it. You don't want to purchase something and end up hating it. While you're researching, here are some questions to ask -

Do the emails get past spam filters? This question is rather self-explanatory. If your emails don't get to their recipients, the solution is a waste of your money. Note that the body of the email also has a lot to do with getting past a spam filter - if you're using big, bold, red fonts, CLICK HERE links, and/or the word free (or other flagged words) repeatedly, chances are your email won't get through.

What size are the branded emails? In this case, bigger is not better. (If you're using Microsoft Outlook to send email, it may be embedding the images on its own. Ask your solution provider how to turn this off)

Is the product easy to use, or do you have to change the way you currently send email?

Can the template be set up to contain links to different pages/areas of your website? This is very big question, since being able to say "Click on the Virtual Tours link above to check out our properties!" is much better opportunity than "Hey, go check out my site at www.EmailAppeal.com and click around until you find our tours." As the old adage goes, on the Internet you're always 1 click away from losing a customer.

Can you easily change your contact information, picture (if the system allows you to upload one) and any other sensitive information on your template, or do you have to pay the solution provider to change them for you?

Do you have control over the aspects of the design, or can the users change the design at will? Brand control and consistency is a big deal in any business.

Does the system require you to send your email through a different server or to a different email address? This is a security risk whether they say so or not, as your emails are all being routed through a third party server. A good system will work without requiring you send your email through any third party.

What Kind of Pricing Should I Expect?

Most branded email solutions are very cost effective, so your decision should boil down to features. Make sure you get the answers to the questions above, and make sure those answers are in line with your expectations of any software provider. If you do a little homework, find a great product, and use it diligently, branded email will pay for itself with increased sales over and over again.

By Jason DeVelvis

Not Everyone is Buying or Selling, Some are Doing Both

2008-07-16T23:50:00.001-07:00

As if one real estate transaction is not hectic enough? many of us end up needing to sell one place in order to move up to the next? this is the "real estate catch 22". Do we buy first?? Do we sell first?? If we are fortunate, these events occur at the same time, but that is not always the case. The problem is trying to determine if it is worse to end up "temporarily homeless" because you sold first, or financially strapped because you bought first.

Conventional wisdom states that IF you can't make them happen simultaneously, it is better to sell before you buy. The rationale? If you sell first, you don't end up at a disadvantage at the negotiating table. This happens by feeling pressured to accept something lackluster for your current home due to your impending closing on the new home. There are several providers of short-term, furnished lease properties that can fill the gap while you find the new dream home if needed. The purpose for finding a furnished property is for the simplicity in moving.

Few people I know want to pack and unpack twice and a few months storage is a small price to pay for the convenience. (For those that enjoy packing, there are support groups available.) And yes, if you were wondering? the two scenarios DO affect the financing angle as well. Having moved on from the first home does help in the debt-to-income ratios that lenders use to qualify you and in the funds that you have available towards the down payment of the new place? both help in the rates that will be available to you.

The UK has Gone Property TV Show Crazy!

2008-07-16T23:49:00.017-07:00

The UK has gone property TV crazy. There are now shows about developing, buying, doing up and selling your home on every channel nearly every day. TV show presenters have become celebrities and household names.Some TV stations have had property show weekends purely dedicated to property TV shows. The UK has got an insatiable appetite for the shows.

Why property TV crazy?

The UK has experienced some unsustainable house price rises . This has resulted in property owners having huge amounts of equity in their homes. The majority of people who have owned a home for the last 5 years now have a huge asset. Looking after your home and achieving the best from it has become paramount.Those looking to benefit from their profits are seeking to invest in property overseas or buy second homes to rent. No wonder the UK has gone Property TV crazy.

We have reviewed some of the most popular shows.

Channel 4 Property Ladder. Channel 4

Presented by Sarah Beeney this programme charts the highs and lows of new property developers. Typically each show demonstrates that Budget is king. Developers shed a few tears whilst making their first attempt at making money from property development. It's certainly not a task for the feint hearted. Sarah Beeney is an experienced developer herself and gives some invaluable advice.

Our Review: Sarah Beeney can come across as a know it all and "I told you so" is so often on the tip of her tongue. However it's great watching other people's mistakes and she does make some very valuable points. We found ourselves shouting 'don't argue with her just listen

Location Location Location Channel 4 UK style

Two knowledgeable, young and successful London property finders Kirstie Allsopp and Phil Spencer face the weekly challenge of finding someone their ideal home to buy - in just a few days! Filmed at locations all over the UK.

Our Review: Some good tips on looking for your new home. Some of the home seekers can be a bit over ambitious and annoying. The programme is repeated on some satellite channels so some of the house prices are very historic.

Selling Houses Channel 4

Estate agent Andrew Winter tours some of the UK's hardest-to-sell homes, he meets stressed homeowners whose properties have been stuck on the market for months.

Anxious for a sale and unable to work out why no one wants to buy their home, they are desperate for a solution. Andrew gives his frank opinion and recommended course of action. His critical appraisal is often met with opposition? until the owner accepts his advice is vital if they want to sell their house. And sell they do.

Our Review: Andrew Winton is cutting with his comments on those hard to sell houses and there owners. No delicate comments from this man. Some of the owners are subject to his frank honest opinions.9 times out of 10 he is right. It is for us his brutal honesty makes the show more enjoyable. Andrew Winton does get those homes sold. His firm but fair manner makes him a must to watch.

A Place in the Sun

Amanda Lamb presents A place in the sun the show that helps buyers find their dream home in exotic overseas locations. Amanda (Scottish widow advert) finds a wide range of the best properties available and guides potential buyers through the peculiarities and pitfalls of the local market.

Our Review: An excellent show that has extensively researched housing market trends in various sunny locations. It's a must if you are thinking of buying abroad

House Doctor

Anne Maurice is the domestic interiors equivalent of Anne Robinson. She's quick-witted, quick-tongued and quick-fire with her prognosis. If she isn't lightening it, stripping it or painting it white, she's ruthlessly depersonalising it - wrapping it all up in a big black bin bag and dispatching it with a crisp "goodbye"

Our Review: Anne Maurice points out the obvious to these homes sellers and if they don't believe her they are given frank views by potential home buyers. Her shows can become a bit repetitive. However a must watch show

Other People's Houses Channel 4

Providing an excellent opportunity to peer behind other people's curtains each week Naomi Cleaver follows a couple as they attempt to renovate a property and uses this as an excuse to see what other people have done with similar style buildings

Our Review: This programme provides a wonderful opportunity to see ordinary peoples ideas of how they think a home should look. Some useful ideas but it lacks the sparkle of similar shows.

Relocation Relocation Channel 4

Could you re-launch your life, selling your home to fund a new double existence; buying both a place in the country and a pied-a-terre in town? Professional property hunters Kirstie Allsopp and Phil Spencer present a brand new series, Relocation Relocation, helping six couples find the ideal balance: urban energy and rural relaxation.

Our Review: If you can afford two homes one for work the other for the weekends this may be for you. Some of the participants can come across as a bit smug.

Safe as houses

Safe as Houses: 'Tracy and Stephen Gibbs'

Moving house is high on the list of the most stressful things you can do and this property show explores that fact¸ with estate agent Emma Basden and builder Jason Maloney. Steve and Tracy plan to relocate from Cheshunt to St Austell in Cornwall¸ where Tracy is bowled over by the sea and fields and the kind of property they can afford. But things don't quite go to plan.

The UK has experienced some unsustainable house price rises . This has resulted in property owners having huge amounts of equity in their homes. The majority of people who have owned a home for the last 5 years now have a huge asset. Looking after your home and achieving the best from it has become paramount.Those looking to benefit from their profits are seeking to invest in property overseas or buy second homes to rent. No wonder the UK has gone Property TV crazy...

By Nicholas Marr

Inspecting Your New Home - 17 Areas You Must Inspect Before Taking Possession

2008-07-16T23:49:00.015-07:00

Congratulations! You've made your decision; you've chosen your new home and your builder. So what needs to happen next? Once you have a firm contract and you have selected the features that will go into your new home, it is time for the builder to turn your dream into reality.

You will undoubtedly want to visit the building site from time to time during construction to check the progress of your home. Professional builders welcome your participation and enthusiasm; however, for safety reasons you should not enter the actual construction site unless by special appointment-an unauthorized site visit may also contravene the local labour code with respect to construction safety and the builder's liability.

Questions or concerns arising from a site visit or a drive-by should be addressed directly to the builder. The tradespeople on the site each have their own area of expertise and will not be able to discuss your home's progress with you. Nor are they able to make changes without the approval of the builder.

Before you take possession of your new home, the builder will invite you to "walk through" the house to conduct a pre-occupancy inspection. Three to five days before closing is best-when construction is substantially complete but there is still time for the builder to remedy any minor imperfections. Anything that is not to your satisfaction should be noted for a pre-delivery inspection report. Minor items such as scratches and incomplete paint work will be rectified before your move-in day. Other items will be corrected after you are settled.

The following checklist will help you to inspect your new home.

Exterior

Grading-should be sloping gently away from the house.

Sod-was it rolled when laid?

Wood, vinyl or aluminum siding-should be even and nailed securely to the walls.

Brick-should be evenly laid and clean, with weep holes intact.

Caulking-check around windows, doors, garage door, electrical outlets and fixtures.

Paint and stains-inspect for even coverage and proper colour.

Trim, shutters, fascia and soffit-must be proper colour, of good quality and securely fastened.

Shingles-are they clean, of proper colour and with no lifting corners?

Garage-should feature non-combustible materials on the wall adjoining the house (for instance, gypsum board with sealed joints); the garage door should open and close properly.

Interior

Basement-should be clean; no cracks in the walls; a floor drain in the lowest part; "healthy" looking wooden joists (a minimum of splitting); instructions and warranty cards for equipment (furnace, heater, HRV, etc.)

Doors-must be well-fitted and well-hung; secure locks for outside doors and door stops.

Windows-must open smoothly; lockable.

Walls-should be smooth and even; no cracks, visible seams or nail-pops; right colour; even paint coverage; no gaps at electrical switches and plugs.

Floors-minimum of squeaks and "spring"; smooth seams on carpet and other floor covering; even grouting between ceramic tiles.

Plumbing fixtures-no chips or scratches; faucets operating properly; caulking around counter tops and fixtures.

Upgrades and options-correct materials and quality; proper installation; right colours.

General state of cleanliness-no construction debris; clean heating ducts; etc.

You might want to hire a private building inspector or engineer to conduct the inspection for you. Look in the phone book under Building Inspection Services.

3 Strategies For Buying Property With No Money Down

2008-07-16T23:49:00.013-07:00

Everyone has heard a story or read about someone who bought a property without paying a single dime as a down payment. But how does this work?

There are several "classic" methods commonly used to purchase real estate with no money down. There are an infinite variety of situations in a real estate transaction that could lead to a deal with no down payment. But for the sake of reality, I will focus on those that are most commonly seen in the current market.

1. Seller second - The buyer obtains a new first mortgage for most but not all of the total purchase price. The seller finances the rest.

Purchase price: $100,000
Buyers loan: $90,000 (90% LTV) (new first mortgage)
Sellers finances $10,000 (in the form of a new second mortgage)
The buyer has borrowed 100% of the purchase price. Thus, you have100% financing, and no down payment was paid by buyer. This is not a difficult strategy to employ if the seller has enough equity, is willing to hold a second, and the first mortgage lender approves.

One thing that is not mentioned in most articles about this strategy is the requirement for lender approval. The lender who is making the 90% loan will have to agree to allow the seller to take back a second mortgage. In cases where the buyer has better credit, this is usually OK with the lender. But if the buyer has a lower credit score, the lender may not approve of this. If your credit score is on the lower side, but you have good documented income, you may still qualify.

Herein lies the fundamental issue that makes it so difficult to write about your financing options and what to expect: The fact is that lenders who are making the first mortgages on a property can change the rules or make new rules in the middle of a deal. Therefore every deal is different. Every buyer's credit and income are different and lenders vary in their underwriting requirements.

It is a moving target. So while it can be said that you can get a 100% loan to buy a property, there are usually specific credit requirements, income requirements, etc. It makes this game rather unpredictable.

Talk to your lender ahead of time and find out if creative financing options such as a seller second would be allowed. Make sure you have a lender who is used to working on investment property loans. Some mortgage companies only have programs for owner occupants. You need to go to a lender who specializes in loans for investors.

2. Another common way to obtain a no down payment loan is to utilize one of the many low or no down payment programs that exist. Many of these are intended for owner occupants, but some are available for investors. Again, it is important to talk to the right lender.

If you have an investment property that you want to sell, consider taking back a second mortgage for 5-10%. This is not a huge amount, and it can help you sell your property faster.

When it comes to finding a seller who will help you create a no money down deal, consider buying from an investor who is willing to be flexible. Some investors are willing to do creative financing simply because they understand that it helps them sell houses. It never hurts to make an offer that includes a seller second. You never know until you ask.

There are some points to remember when purchasing investment property with no money down. A key point is the comparison of monthly payments to expected rental income. When you are financing 100% of the purchase price, your payments will be higher. If you have a second mortgage payment to add to a first mortgage, your payment may be even higher. Be sure your rental income will cover the entire monthly payment. 3. More common among professional investors is buying wholesale properties, using hard money to purchase and rehab.

When the rehab is done, you get a new mortgage that pays off the hard money loan. Since this is a refinance, you can take cash out of the property. You may have to bring some money to closing on the hard money loan, but you get it all back when you refinance, so you end up with no money out of pocket. This becomes not only a "no down payment" deal, but also a "cash back at closing" deal.

It works like this:
Purchase price $100,000
Repairs $15,000
Hard money loan $115,000

Purchase and repair, then get new loan to pay off hard money.
New loan is based on 90% of After Repair Value.
For our example, the ARV is $150,000

90% of $150,000 is $135,000.
New loan for $135,000. Subtract hard money loan pay off of $115,000 leaves $20,000.

You keep the extra $20,000 in cash, tax free since it is a loan, rent your house out and let the tenant pay the loan back. Your gross profit is $20,000 cash and $15,000 equity. Total gross profit $35,000. Not too bad for a couple months work.

Down payment by definition means specifically money that is used to "pay down" the total purchase price. This does not include money for closing costs, points, interest, and other items such as insurance. But if you are buying wholesale properties, fixing them and refinancing to pull cash out, you should be able to pay all your expenses and have a nice profit at the end of the day. (Just keep some of that cash in reserve for emergencies)

If you do 3 houses per year, and you only net $25,000 total, after paying all expenses on each of the 3 houses, you are still netting $75,000 cash and equity in about 6 to 8 months. Plus, if you are renting these properties, you are also creating additional streams of income through monthly cash flow as well as accumulating equity in each property.

This is a solid strategy to achieve a retirement nest egg and ongoing income for life in less than 10 years. If you look around at the real estate investors who are wealthy, the vast majority own rental property, be it residential or commercial.

They understand the concept of buying at a discount, then holding their properties for years. They get to the point where their holdings are worth double or triple the price paid. This is free money that you can earn simply by buying and holding long term.

There are wholesaling companies in every major city that specialize in selling fixer upper properties that fit with strategy number 3 in this article.

Look for their signs on the side of the road, their ads in the paper, or ads in local thrifty nickel type shopping papers. Most deals do require some out of pocket cash, even if it is only temporary, until you refinance.

True no down payment opportunities are pretty rare these days, with interest rates at historic lows. If interest rates go back up, (and they will), we will see more creative financing and more "no down payment" opportunities in the future.

By Donna Robinson

Buying Your First Investment Property

2008-07-16T23:49:00.011-07:00

"Begin With The End In Mind"

I first heard the phrase "Begin with the end in mind" in a Steven Covey book called "The 7 Habits of Highly Effective People". This expression makes a lot of sense because the fact is, you can't get where you're going, unless you know where you want to go.

Most new investors understand that real estate is an investment vehicle that makes sense. We all know that many fortunes have been built with real estate. But when you are first getting started, all the available information can be very confusing. I often receive emails asking "what strategies should I use?" or "Where should I look to find deals?".

One reason these issues are so difficult to understand and sort out when you are new to the investing game is that the answer to the question can be different for every individual.

Seminars tend to package information in a "one-size-fits-all" crash course. But this inevitably leaves unanswered questions for each individual user. Simply put, each person has their own individual situation with regard to credit, income, employment, assets, etc. All of these factors can affect your investing choices and objectives.

Compounding this confusion is the sheer number of strategies. Should I own rental property? Should I fix up and resell? How about Options? Or, how about buying tax leins? There are so many choices, how is one to know what to do when just starting out?

I can remember floundering around myself. I spent thousands of dollars on different courses, trying to put all the pieces together and gain enough understanding to know what I should do first.

It seemed that no one wanted to tell me anything useful unless I paid them first. I soon found that no matter how much money I spent, there were many unanswered questions. I felt frozen by fear, because I simply did not understand what to do first. As a result, it was several years before I actually felt comfortable enough to get directly involved in buying a property.

Today, after having seen and participated in many deals, I know that step one is decide what you want real estate investing to do for you. In short, where do you want to go?

Like any trip, you start out by deciding where you want to go. Once the destination has been chosen, you figure out the best way to get there.

Many of the most successful and wealthy investors I know, built their fortunes with rental property. Some of them own 40 or more rental houses. Some of them own commercial properties like gas stations, storage facilities, or office buildings. They each had the same destination, that of cash flow from rental income, but two drastically different ways of getting there.

Frankly, most of the really successful investors are very patient men and women who build their portfolios slowly over a number of years. They are cautious and prudent, buying only when they know the deal is a good one.

Today, many people are lured into investing because they have heard the stories about how you can buy property with no money down, and take out enough cash at closing to pay off all your debts. This is possible, but creating one debt to pay another does have it's risks.

Let's say that your ultimate objective is to achieve $5,000 per month passive income from rental property. Now, think of that objective as if it were a city on a road map.

Most cities have a number of different roads you can take to get downtown.. It is the same way with your investing. Different people will arrive at the same destination, each one using a slightly different route to get there.

Once you decide where you want to go, your route to your destination will be determined by your financing options. .

If you have great credit, income for which you receive a W-2 statement, and lots of cash for a down payment, your financing options will allow you to take virtually any road you wish. The fact is, good credit and cash will get you where you want to go a lot faster. But it's not the only way.

If you are credit challenged, self-employed, or lack cash for down payments, your ultimate destination can be the same, but you will need a different route to get there.

Your financing options determine the route you have to take to get to your destination. In essence, the answer to getting started is find out what kind of financing you can get, and then find deals that work with your available financing options.

If you can't get any kind of financing at all, you can still buy deals where the seller will agree to finance the deal, or some scenario where financing is provided without you having to qualify.

If you have decent credit but no cash, there are investor loans with low down payments, that may make it easier for you to get in with little cash.

If you have great credit and cash - hop on the expressway. Look for any good deal, since you can get a loan at excellent rates, in addition to taking advantage of any good seller financing deals that come your way. You have the most options for getting to your destination.

No matter where you start from, you can still wind up at the same destination, and achieve the same objective.

Step One: Decide where you want to go. Then, get with a good lender to find out which roads you will be able to take. Even if you have to start out on the "no cash, no credit" back roads, remember that sooner or later, if you keep driving, you will find an access ramp to the expressway.

By Donna Robinson

Important Facts For Home Buyers

2008-07-16T23:49:00.009-07:00

If you are considering buying a home or have spent many years saving in preparation of buying a home, the questions and process involved in buying a home can be extremely stressful. As exciting as it is to begin looking for your new home, there are many unexpected costs and details to be considered before contacting a real estate agent. Home buyers should be aware of every aspect involved in purchasing a home before they take that big step towards home ownership.

You will want to get the most value possible for your money. You should be aware of every detail in regard to the home you wish to purchase. Home inspections can reveal many hidden flaws and problems that could cost you thousands of dollars in repairs. Be aware of your right to a home inspection and contact a professional, licensed home inspector.

Compare the mortgage terms and interest rates offered by various mortgage lenders. Even a slight difference in your interest rate can add up to thousands of dollars over the length of your mortgage. A pre-approval from the lender of your choice will not only give you added confidence when shopping for a new home, but could give you added leverage when bargaining with the seller. A pre-approval will let you know the exact amount you are approved for and will save you time after your offer has been accepted by the seller.

Using a buyer agent is an excellent way to help protect your interests when shopping for a home. A buyer agent will be responsible for helping you get the best deal possible on your new home. While shopping for a home, be aware that certain features can adversely affect the resale value of the home. Detached garages and swimming pools can actually lessen the value of the property. Protect your investment by educating yourself on the home buying process and the way property is appraised.

You can make the home buying process fast and painless if you take some precautions along the way. Choose your lender carefully. Interest rates and closing costs vary from lender to lender and the difference could mean thousands of dollars over time. There are numerous flexible loan programs available. Finding the loan that will best suit your long term needs will be of great value to you when it is time to sell the home. Just a half point difference in your interest rate will translate into a lot of money over the years.

Keep in mind that there are additional costs involved in purchasing a home. Homeowners association fees, furniture, annual heating and cooling costs, and homeowners insurance need to be considered when planning to purchase a new home. Buying a new home does not have to be stressful and frustrating. Make sure you know the facts and your home buying experience will be quick and painless.

By Cedrick Reese

Oh No! Something has Happened in Florida

2008-07-16T23:49:00.007-07:00

The Florida housing market has attracted many foreigners to invest their hard earned money in the sunshine state. The British have for a long time favoured Florida for buying a second home. Many use their Florida home as a holiday home for friends and family. Some may rent it out on a casual business basis, renting out their Florida home from adverts they have put up at work or in the local shops. Most British buyers dream of owning the home outright and eventually using the house for their retirement.

Fragile Buyers. Despite the attraction of buying in Florida i.e. cheaper prices and a wonderful climate it does not take too much for a British buyer to get cold feet. Real estate agents in 2004 reported a rush of British buyers cancelling their sales owing to the hurricanes that hit the region. Reports in 2005 concerning fatalities concerning shark attacks again spark similiar worries and may affect the fragile buyer's attitude towards the region.

Why so fragile? It is all about choice available to the European Buyer. The British for example have cheap air fares and short journeys to the most popular places to buy a second home such as France and Spain. Now emerging markets in Turkey, Egypt,Croatia and Bulgaria not only offer cheaper property prices and cheap air fares but sound short term investments. Recent house price rises in Florida are now making the region a long term investment area not one for short term gains.

Bad News Travels Fast. Negative reports about a region will always affect the perspective of those who do not live there. So when bad news hits the sunshine state its no surprise that it affects the minds of those looking to buy overseas.

By Nicholas Marr

Prepare Your Rental Property for Occupancy

2008-07-16T23:49:00.005-07:00

Among your many responsibilities as a landlord, the law provides for a warranty of implied habitability. This means that the dwelling must be considered habitable and any known problems must be fixed before you allow a tenant to take occupancy.

When a tenant vacates one of your units, take this opportunity to perform a walkthrough of the unit to determine its condition and discover what repairs or maintenance need to be done. Here are some of the specific areas that you will need to examine in your property before you accept a new tenant.

Do all the fixtures work properly? This includes faucets, showers, tubs, toilets, and any other fixtures. Make sure that the fixtures do not leak and that they consistently operate correctly. Address any leaks or other problems before you rent out your property. If a fixture is consistently causing problems, it may be easier -- and even cheaper -- to replace it to avoid future problems. In addition to providing quality fixtures for your tenants, repairing leaky fixtures can also reduce your water bill. If you pay for your tenants' utilities and water, this can mean substantial savings.

Have the carpets been thoroughly cleaned? Mold, mildew, and pet stains are considered health hazards, and such problems should be completely resolved before you rent out your property. Diseases such as toxoplasmosis, which is normally found in cat urine stains, can be deadly. Proper cleaning of your carpets will ensure that that your tenants will have a healthy environment. If the carpet has mildewed or there is a mold problem, you may need to replace the carpet.

Have the cabinets, closets, and storage areas been completely cleaned? Mildew and mold can lurk underneath cabinets, especially if you have had a problem with leaky fixtures. You may have to replace a cabinet if the damage is severe.

Closets are one area that tenants frequently neglect when they vacate a property. Make sure that these areas are completely cleaned and that any forgotten property is handled appropriately. You may need to track down your previous tenants to notify them that they have abandoned their belongings. Set a specific reasonable response time, and if they do not respond in that specific amount of time, you may then discard the property. Are the walls free of chips, marks, and holes? Depending on the length of the previous tenancy, you may have to repaint the unit. Any existing holes should be fixed before you rent out the property. If you do not plan to repaint, examine the condition of the walls carefully and make notes so you do not hold your new tenant liable for damage caused by someone else. At a minimum, you should patch any obvious holes.

Do all of the appliances operate properly? Old appliances waste lots of energy, which is a consideration for landlords providing free utilities to their tenants. Replacing old appliances with new models will save you money on energy and repairs and maintenance. Your tenants will appreciate the newer appliances, and your electric or gas bills should be lower as well. Does the unit have lead paint? Most properties built after 1978 do not have lead paint. But if your property was built before that, you need to determine if it contains lead paint. If it does, you must disclose this to your prospective tenants before they move in.

Do all of the doors and windows operate properly? Check all of the doors and windows of your property to make sure that they open and close properly and that they are in good working order. This includes cabinetry, patio doors, and windows.

By Neda Dabestani-Ryba

Investing in Real Estate & REITs

2008-07-16T23:49:00.003-07:00

Real estate investing runs the gamut in terms of risk and investment success. The first rule of real estate investing, even before location, location, location, is be very careful with whom you are dealing. For some reason, real estate is fraught with unscrupulous characters, many of whom you'll see on late night television commercials with their "no-money" down methods of becoming millionaires. Only a very small percent of these so-called real estate gurus are legitimate.

If you are seriously considering investing in real estate property, it means essentially that you will need:

Investment capital, or a legitimate means of attaining some without putting yourself in debt.

A good knowledge of the real estate market and the neighborhood in which you are looking to buy property.

Good management, people and negotiating skills

The ability to do repair work or access to people who can do it for you. The name and number of a property inspector or engineer.

Unless you are able to find, evaluate and buy houses that are either in foreclosure or fixer-uppers, which can be turned around quickly, you will most likely serve as a landlord for the property while it increases in value. Be careful to whom you rent because your property must be well-maintained.

Since legitimate real estate investing means having some money to make money, you need available capital. For this reason, many people go into real estate after coming into a sizable amount of money. For example, empty nesters who sell a large home for $500,000 and buy a smaller condo for $250,000 have money to purchase another property or two. Make sure to research your location. Go to local town board meetings, do research in libraries and go on the Internet to find out as much as possible not only about the location today, but about plans for the area over the coming years.

And then there are REITs - Real Estate Investment Trusts. This is a way of investing in real estate for a lot less money and without having to worry about fixing a tenant's leaking bathroom pipes in the middle of the night. REITS invest in various corporations involved in real estate, ranging from industrial parks to shopping centers to construction companies. They are listed on the NASDAQ and the stock exchange.

Essentially REITS work in the same way as mutual funds, except they set up a diversified portfolio that deals only in real estate. They primarily pay the bulk of their earnings in investor dividends. Before investing in a REIT, consider:

The economic conditions where the key holdings are located

Past performance of the REIT and future projections

The manager of the REIT, who operates like a mutual fund manager

The overall state of the real estate market

REITS, like stocks, bonds and mutual funds, have high and low periods. Like other income-producing vehicles, they can be strong investments over time and pay dividends. They are fairly liquid and are a much safer way of investing in real estate than buying property.

By Neda Dabestani-Ryba

Is 100% Annual Return On Investments Possible With Low Risk Land Investments?

2008-07-16T23:49:00.001-07:00

In last week's article, we discussed how substantial profits could be made by investing where baby boomers may want to relocate or buy a second home. This seemed to confuse readers since they were thinking that our web site is about preconstruction and preconstruction to them means buying condos?? In this article, I hope to broaden your horizons considerably.

Unlike many people, I have a very broad definition of preconstruction investing which can be summarized as follows:

Preconstruction investing is the pursuit of real estate projects that offer the opportunity to ride rapidly increasing prices over time without the need to put tenants in place to defray costs. Since no tenants are involved, this opens the possibility to making investments in locales that are far removed from where you live.

If you adopt this point of view, then a whole world of "alternative" preconstruction investments opens up to you. Today, we are going to look at one specific type of investment: investing in developing land projects where baby boomers might want to retire or own a second home.

Before we get into the specifics, let's talk about what all investors want:

? Low risk

? Good investment returns; and

? Minimal use of their capital;

Quite frankly, these 3 reasons are what got me into preconstruction real estate investing in the first place. Now let's see how these might be achieved on a purchase of investment land that we believe to be VERY desirable to baby boomers.

Suppose we are considering the purchase of a piece of property for speculation of future returns. If, like me, you believe in the impact of the baby boomers, then you will do 3 things to control your risk:

1. Carefully select a land project where you are solidly convinced that baby boomers will want to possess it at any costs;

2. Make sure that you believe that baby boomers will be AWARE of this project in the future do to somebody's marketing; and

3. Manage your finances and investment portfolio so that if you are wrong and you do take a loss, it is not catastrophic to you.

For the time being, let's assume that you have met these conditions on a project and now you are ready to analyze your returns and your use of capital.

Now we have to resort to hard analysis. Let's look at the following ASSUMPTIONS:

1. The land project is assumed to increase at least 25%/Yr in price;
2. We plan on holding the land for 2 yrs and then resell.
3. $200,000 purchase price with $5,000 in closing costs.
4. Annual taxes/association fees of 1%.

If you take a look at the three cases in a spreadsheet format, here is how things might turn out under this scenario.

Case 1: 10% down payment, interest only, all payments made by BUYER.

Case 2: 10% down payment, interest only, all payments made by SELLER.

Case 3: 5% down payment, interest only, all payments made by SELLER.

Cases 2 and 3 require a bit of explanation. There are some early stage land projects available where the developer will take a percentage of your purchase price and escrow an amount that will make your payments for a period of time---- typically 2 years. This means that during your 2 year hold, you would only pay taxes and association fees. To enter this in the spreadsheet, we just show a 0% rate during the holding period.

If you scroll down, you can review the performance of each case. It may surprise you that even under Case 1, where you paid in a total of $48,600 out of pocket, you still see a return on investment of 127%! That equates to 51% annual return on investment. Compare that to what your friendly banker is giving you in your CD.

For many investors, beginning or not, they would prefer not to have to put in that much money so let's look at Case 2 where the developer has escrowed 2 years worth of payments. In this case, we invest a total of $29,000 with a total, out the door profit before taxes of $81,625 thus providing a total return of 281%. If you then extend that to Case 3, where only 5% down is required, then the return goes off the charts to well over 500%!

So hopefully this article has given you a very different way to think about old fashioned land purchases in your real estate investing portfolio.

By Dr. Chris Anderson

Back To The Future - Big Changes Are Coming, Get Ready Now

2008-07-16T23:48:00.013-07:00

The comments below are quoted from a recent speech by Ben Bernanke, a member of the Federal Reserve Board of Governors...

"Looking forward, I am sure that the Committee will continue to watch the oil situation carefully. However, future monetary-policy choices will not be closely linked to the behavior of oil prices per se. Rather, they will depend on what the incoming data, taken as a whole, say about prospects for inflation and the strength of the expansion. Generally, I expect those data to suggest that the removal of policy accommodation can proceed at a 'measured' pace. However, as always, the actual course of policy will depend on the evidence, including, of course, what we learn about how oil prices are affecting the economy."

In short, the Federal Reserve knows that there will be an impact. But no one knows how big and how fast. During the oil embargo of the 1970's gasoline prices doubled several times over a matter of months. The effect was dramatic and sudden. It was difficult to adjust, because things were happening so fast.

This time around, it appears that the price climb will be gradual and steady, thus allowing the Federal Reserve and the government to make adjustments as they go, by examining economic data on a monthly basis. At least that is what they are hoping for. They know that the economic climate is changing, but they are hoping that it will be slow enough to control.

This week as I contemplated my own reaction to the changing economic environment, I felt compelled to encourage you to give some serious consideration to your personal economic circumstances. If you have a large percentage of debt relative to your income, you should take steps now to eliminate as much of it as possible. Prepare yourself so that you will be protected against unexpected economic upheaval.

Being debt free, or having a very low debt to income ratio is the best way to protect yourself in an unpredictable and volatile world. As we learned on September 11, 2001 things can change dramatically in only a few hours. If you put it off, you may not have enough time to get it done.

The average person needs 4 to 5 years to pay off their outstanding personal debt, not counting their home. In today's world, it will pay to get started now. I have made it my primary objective to pay off my personal debt over the next year or two.

If you currently own rental properties, be sure you have cash reserves for future emergencies.

But how might all this economic stuff affect real estate investing?

The interesting thing about real estate investing is that even bad economic conditions tend to have a silver lining. There is a cause and effect relationship at work in any given economy, whether it is considered a "bad" or "good" economy.

In good times, such as we've had the past 8 years, retailing or flipping for cash was the hot ticket, due to high demand for housing and the ability to sell properties quickly. In recessionary times, higher interest rates and lower housing sales fuel more seller financing, and rental properties flourish. Of course there are always exceptions to the rule, but generally speaking this is the case.

As interest rates got lower, rates of return for traditional investment vehicles went lower and lower. The result? More and more money poured into real estate lending. Hard money and other types of conventional real estate financing programs expanded drastically, making millions of dollars in new funds available for real estate investors.

As housing sales reached record levels, home sellers began seeing a boom in housing prices. It has truly been a sellers market since rates fell below 7%. What happened to investment property? During the past 5 years of an investing bonanza in Atlanta,GA prices for investment properties have doubled and even tripled. 3 bedroom 1 bath junkers were selling in 1999 for as little as $25,000, even in liveable condition. Today, that same type house regularly sells for $65,000 (or more) before repairs.

Going Forward:

Rising rates will have a positive effect for investors, by slowing housing sales even further. As sellers get fewer solid offers property prices will get softer. Rising rates could fuel more short selling of foreclosed properties, and this trend is likely developing now.

Foreclosures may eventually get to levels not seen since the late 1980's, due to high levels of mortgage debt among homeowners, who in many cases, have mortgaged all of their equity to pay other bills.

If rates get above 7%, you can dust off your creative financing books, as seller financing will increase. Rising rates mean rising monthly payments. This will eliminate the borderline buyers from the housing market. They will start moving back into apartments and rental houses. Vacancies will decline, rental rates will increase.

If rental rates increase, cash flows will increase. Rental property will be back in style with investors who abandoned rentals and focused on selling for fast cash in a hot market.

Companies that sell investment property can expect growing demand for rental grade properties. While it is still very early in the cycle, I believe this shift is already under way.

Economic recessions are boom times for smart investors who are positioned to take advantage of the situation. I am not predicting a recession per se' but rising oil prices and interest rates will eventually have a big effect on housing.

Be ready to take advantage when the opportunity comes. You have plenty of time to plan for it now.

By Donna Robinson

Boom or Bust

2008-07-16T23:48:00.011-07:00

For those looking to invest in the real estate market?keep your eyes on the headlines. According to the Federal Deposit Insurance Corp. (FDIC), the number of areas across the U.S. with real estate booms shot to 55, increasing by nearly two-thirds last year. The FDIC warns, "these booms may be followed by busts".

"Boom" areas are defined as having inflation-adjusted prices at the end of 2004 that were up 30% or more in three years.

Of the 362 major metropolitan cities included in this study, over 15% were boom areas. This data, analyzed by the Office of Federal Housing Enterprise Oversight, more than doubles the peak of the 1980's booms and is the highest ratio of boom markets in 30 years.

As for "boom or bust", busts are rare. Only 17% of U.S. housing booms from 1978-1998 ended in busts, which are defined as a 15% or more drop in home prices over a five-year period.

What is making the market soar? Aside from inflation, the mortgage industry has to be considered first. Adjustable rate and interest only mortgages are growing in numbers and subprime loans now account for 10% of all mortgage loans.

With interest rates lower than they've been in years, borrowers can afford to finance an amount greater than the standard 80% loan to value. The percentage of loans exceeding 80% of the purchase price has grown to over 30%. If a borrower has an adjustable rate mortgage and the interest rates rise, their payments increase. If the market values drop, or bust and they have 90% or 95% loan to value, they owe more on the home than it is worth. But these are all "What ifs??".

In the markets with the highest number of "boom" cities, California with 21 cities has a high increase rate of 58% and Florida with 11 cities has a high increase rate of 54%. These two states alone account for 60% of the boom areas! With these numbers, would you purchase an investment property in Florida or California and flip it in three years for a possible return upwards of 50%?

Of course. A relatively sound investment. How much longer can the market withstand these price increases before it busts? Even history shows a period of time when the market stalls so that inflation can catch up. If you want to invest in real estate, carefully examine the history of the market you are purchasing in! If it has been booming like Florida and California, be careful how long you hold on to the property. If you notice the market is starting to drop, sell. Hold on too long, it may bust!

By Jason M. Rigler

Investing In Real Estate Investors

2008-07-16T23:48:00.009-07:00

With the never-ending changes in our Real Estate Markets real estate professionals are starting to pay attention to the sound of new commission streams of income. Some realtors have either shied away or ran-away from such terms as "Cap Rate," & "Cash-on-Cash Returns." Terms that only the 'smart' and 'numbers-oriented people use to determine if a Real Estate purchase is a "Good Deal", or not. A majority of the realtor brethren attended real estate school because they are excited and passionate about the promise of selling real estate and making a fantastic living. That being said "Times are a Changing." Even if you live in a Hot Market where residential real estate sells in 2-3 days there is an old approach to real estate that is growing faster by the day?..Residential Real Estate Investors.

This deft group of real estate investors is taking real estate and the real estate investment world into a new era! No longer accepting the crazy volatility of the Dow Jones and NASDAQ families. Unwilling to accept the investment practices of their fore-fathers these Investors throw caution to the wind for returns above the traditional 5-6% in their Roth or IRA accounts. These Investors are bold and oftentimes aggressive. Today's Real Estate Investors are all about the fast fix-n-flip, high appreciation, and rock solid monthly cash-flows. Cutting their teeth on investment in their own home-towns is only the beginning as the Serious Investors turn to points outside their own back-yards to other regions that demonstrate greater promise and higher returns. You may say well how does this older adult view their investment opportunities? For starters the age of these stealth hunters ranges from 28 to 68. From "Rich Dad-Poor Dad" book series to Trumps magical presence on "The Apprentice," the young real estate entrepreneurs are making their dreams happen to the tune of 3-5 acquisitions a year! Got your attention now? The typical Investor has good to great credit scores. Excellent cash reserves or hidden resources of partners with cash, and a willingness to make the deal happen at nearly any cost. The best kept secret of all is that these investing beasts travel in packs. Where you see one another is very close behind. In other words they know the people that you need to know to grow your investor database even larger. If the real estate professional does a good job the happy clients are likely to refer many of their fellow-investors. Not just investor clients but their regular every-day real estate business. Face it, if you can demonstrate to your clients how adept you are with their largest personal purchase of real estate, then wouldn't you suppose they will be over their "trusted real estate advisors" opinion on buying a basic home, condo or beach house?

So what if you haven't been focused in the real estate investment sector. And you are thinking this all sounds pretty good, let's give it a try. First question to ask yourself is who have your clients been working with or exploring their options of real estate investing with over the past 3-4 months. Statistically 6 out of 10 clients have considered investing in real estate or have already begun doing so before their realtor even has a chance to blink an eye. Got your attention now? How about the fact that in less than one year I increased my annual commissions by 30% by just positioning myself within my primary data-base of clients. All I did was let them know that I was ready, willing and able to begin assisting them with their "Investment Realty" needs. What I learned during the first year was that if I could create an environment for my clients to learn more about real estate investing that they would thank me in a variety of ways?.Most importantly they would call me before writing a contract and would make sure that I was involved in every contract that wanted to make a real estate purchase. Before long 30% went up to 45% and further. Even if you aren't interested in expanding your client database, at least consider protecting the turf you have for so long spent tireless amounts of time and financial resources to maintain their allegiance. On the other hand if you are looking at your real estate career and are wondering how to reposition yourself for market growth certainly to go well into 2025, here are a few known facts about how real estate investors can improve your business.

1. Real Estate Investors are literally everywhere. Successfully tapping into your current database could increase your annual commissions by 20-30%.

2. Real Estate Investors will be loyal to the professional that helps fill the gap of their investment education. Workshops, mentoring groups, finding the "golden deals" in your market makes a huge impact!

3. Investing in Real Estate Investors doesn't have to mean that you lose your "typical" residential realtor position. Being a real estate investment specialist means you are smarter than the average realtor in the market.

4. Mortgage professionals are struggling to provide real estate investors with property deals, so when you can place an investor into a good deal the referrals will begin to flow even more.

5. Real Estate Investors tend to be more conscientious about your personal time away. Investors also like to shop Monday-Friday for their deals before the "Weekend Warrior" investors get out into the competition. This translates into more normal hours and days of operation for you and your business.

6. Real Estate Investors buy-sell cycles are shorter than primary home purchasers resulting in more transactions in shorter time-frames.

If any of these points are encouraging you to seek new options in your business then make sure to sign up for the monthly "Grow your Real Estate Investment business" e-mail newsletter from www.InvestorLoft.com additionally, other excellent tools to improve and expand your real estate business can be explored at the InvestorLoft's educational Shoppe.

By John E. Roush

French Property - a Buyers Guide to Purchasing Property in France

2008-07-16T23:48:00.007-07:00

The Compromis

This document is the document you will sign agreeing to buy the property at the agreed price. It is signed by both vendor and purchaser and sets out all the details of the purchase price and fees.

Once signed there is an initial 7 day cooling off period, where the purchaser can pull out of the sale with no penalty. After this cooling off period the contract is binding for both vendor and purchaser, and a deposit is payable. The deposit is usually 10% of the purchase price.

The Compromis is a legal binding contract and to withdraw could result in your 10% deposit being lost. There are however classes that can be drawn up in the compromis that could allow withdrawal under certain circumstances, such as being declined a French mortgage.

To have the compromis drawn up you will need your passport, marriage/divorce papers, relevant details of paperwork if you are taking out a loan to purchase the property.

You should seek advice once you receive the compromis and if necessary have it translated by experts before you sign.

Surveys and inheritance advice

Once the compromis is signed and you have paid your deposit the Notaire then begins searches on the property, checking land boundaries, public rights of way, checks for termites are carried out as well as lead and asbestos checks. The Notaire is responsible for ensuring these are carried out and the vendor is responsible for these costs.

Unlike in the UK France does not always have surveys carried out on properties when sold. You can find surveyors in France who will offer this service, or alternatively a registered builder is often called in to offer his opinion. These are things that should be dealt with before your initial signing.

French Law with regard to inheritance is a complicated affair and you should consult legal advice on this matter.

The final signing

This is carried out in the Notaires office, if you are not able to be in France for the final signing it is possible to arrange power of attorney and have someone sign on your behalf. See legal representation on this matter

Ideally you should have seen the property on the day of the signing as there is a clause stating “sold as seen on the day of signing”. You will need to ensure that the transfer of the balance of payment has arrived in the Notaires account in time for the final signing, this date will have been agreed with the vendor in advance and it is obviously important that this is met, otherwise you could lose your deposit and more importantly the sale of the house. The sale can not be completed unless the money had cleared the Notaires bank account.

Property Investment - What Future For the Biggest Bubble of All Time?

2008-07-16T23:48:00.005-07:00

The Economist magazine published a special report in this months issue entitled "House Prices ? After The Fall". Some might call it pessimistic, alarmist, nonsense or worse but only the foolish would choose to ignore the research that comes out of a think-tank with the kind of resources that this highly respected publication has. Though as a caveat I might add that I am living in Ireland, the country that a recent Economist study declared the best place in the world to live and I could find several dozen reasons to dispute this ? but that's another story!

What the Economist tells us is nothing that we don't already know. An obsessive interest in property by investors, prompted by low interest rates and a loss of faith in equities, has fuelled a massive 'bubble' in the property market, the largest house price boom ever witnessed. Perhaps what we didn't know is this bubble exceeds by 20%, the global stock market bubble of the 1990's and we all know what happened there! It burst, as all bubbles do when under excess pressure.

So what are the predictions for the future and what implications might they have for those considering an investment in property now? Using information gathered from lending institutions, estate agents and national statistics, the Economist has compiled a set of global house prices indices covering 20 countries from 2002 to date. The figures indicate that house prices are seriously over valued in many countries including Spain, Ireland and France, fuelled mainly by speculative demand. America, though heating up a little later is following the same path. Using the current slow down in Australia as an example, and Japan and Germany's negative house price growth, predictions are that with even a flattening off of the market rather than a total collapse, recession is inevitable since people will be far less inclined or unable to release capital on their homes for spending in the economy. So even a 'soft-landing' will cause significant economic pain! In addition, massively inflated prices that are disproportionate to income spells bad news, especially for landlords. In Ireland, for example, rental yields have fallen to below 3%, well below current mortgage rates.

Significantly, all the countries in the Economist's house price index are well developed established economies. The report gives no mention to the emerging economies in Central and Eastern Europe. If, as indicated the housing market in Britain, Ireland and the Netherlands is starting to cool, this will have an immediate impact on the property market in these economies as investors chase better returns. Already ?1 billion of Ireland's anticipated ?6 billion of real estate investment funds are expected to flow to countries outside the EU-15.

It seems the only option now left for the canny property investor is to play the cat and mouse game, chasing newer markets that are experiencing similar conditions for growth and expansion that led the older 'burnt out' markets to their success. But with this comes the element of risk. Economies are delicate, unpredictable systems that don't always fulfil the expectations of players within them.

For those who prefer to shy away from the risks of property investment, preferring to sit it out while the bubble follows its course, there is another option. Chateaux Lafite 2003 will yield creative investors a 13% tax-free rise over 11 months and if the market crashes, you can always drink it!

By Tracey Meagher

5 Hot Tips for Successful Real Estate Investment

2008-07-16T23:48:00.003-07:00

The last downturn of the global stock market saw millions of 'every day' investors having their fingers badly burned. Overnight life savings were eaten away, retirement funds went into decline and the economic forecast for all of us who had any money invested in stocks and shares was gloomy to say the very least.

As a direct result investors in their thousands turned their backs on the rollercoaster stock markets and sought alternative asset classes in which to invest their hard earned money. This has led to a global boom in real estate markets and property prices, and it has spawned a generation of budding real estate investors.

For those of you wondering whether it's too late to venture into real estate investing or considering how best to make the most significant returns from property investment, here are 5 hot tips for successful real estate investment to set you on the path to potential profits!

1) Consider Investment Property Abroad

There are many relatively untapped property markets in countries around the world that offer the real estate investor greater return on investment in the form of rental yields or short to medium term capital growth.

While major markets in the USA, UK, Australia and Europe are slowing down, there are emerging property markets globally that are hungry for investment and are proving to be highly profitable.

For example, in 2007 a number of countries are already aligned for accession into the European Union and as a result property markets in these countries are likely to benefit from greater numbers of visitors, more trade, increased investment into infrastructure and more stable economies. The likes of Hungary, Slovakia, Bulgaria, Croatia, Turkey and even Northern Cyprus are just a few examples of overseas destinations with emerging real estate markets that may be worthy of your consideration.

2) Make Sure Your Plans Are Profitable

This sounds ridiculously simple right? Well, you'd be surprised how few people actually make sure their plans are actually sustainable and as profitable as they hope.

Examine any real estate market that you're about to enter by firstly comparing property values across the city, state or region and making sure you know what your money will buy you. Then ensure that the rental yield you intend to obtain from your property is actually realistic or that the asking price you intend to set once you've renovated the property will be offered.

3) Never Assume Anything

This goes from assuming a house is structurally sound to accepting that tax laws won't change - from believing your tenants when they tell you that they are house proud and honest to accepting the first builder's quotation!

Do your due diligence on every single aspect of the process from ensuring the asking price for a property is fair to checking your tax returns before your accountant submits them for you. This is your investment, your future, your potential profit and therefore it is ultimately your responsibility.

4) Employ An Expert When In Doubt

Few people are a master of all trades therefore be prepared to acknowledge areas where you are far from being an expert and at least consider courting a second opinion. Again, this goes from checking out the structural soundness of a property to understanding the legal ramifications of letting out your property. If in doubt always double check - and if this means you have to call in an expert, make sure you call in an expert!

5) Set A Realistic Budget And Stick To It

Whether you're purchasing property to let out or buying real estate to renovate you need to sit down and add up every single area of projected expenditure to enable you to set a realistic budget with which to work.

Make sure you add in everything from having searches and surveys conducted, legal fees, accountancy fees, insurance costs, likely interest payments on any finance required, taxation, connection of utilities, marketing for tenants or buyers, real estate agency fees, and of course don't forget to add on the cost of the property and the price of any renovation and refurnishing and decorating work required.

Spend time considering every single area where a cost will be incurred and detail every likely payment that will have to be made and you will arm yourself with a bullet proof budget and do all you can to ensure you encounter no nasty surprises along the way.

By Rhiannon Williamson

Selling Your Own Home: 10 More Tips

2008-07-16T23:48:00.001-07:00

Selling your own home can be a time-consuming and frustrating process. Sometimes, though, in the right market, it makes sense to save thousands of dollars in commission and do it yourself. If you've decided to give it a try, use the tips here to do it right, and to avoid common FSBO (for sale by owner) mistakes.

1. Understand value. It isn't what you think your house is worth, and it doesn't even matter how much you put into it. It is only what it's worth to potential buyers. Find out what they have paid for other similar homes before you decide on a price.

2. Be objective. This is a difficult one. You may want to get your most honest and outspoken friend to walk through the house with you. He'll see problems you didn't know were problems.

3. Have a plan. What will the kids or wife say to those who call? Where will you be closing? Will you have documents prepared by an attorney? A plan will help it all go smoother.

4. Make a list. What needs to be fixed, cleaned, changed, or removed? Do the most obvious things first.

5. Be a prepared salesman. List every question a buyer might have, and be ready with an answer. Have comparison sheets showing other home sales, so buyers can see the value. Have a map showing where nearby stores and libraries, etc. are.

6. Sell benefits. Don't say "near stores." Say "You can walk to the store in five minutes." Don't say "garage." Say "No chipping ice off the windshield in the morning."

7. Have all important information in ads. Square feet, number of bedrooms and bathrooms, address, telephone number, and price. Leaving out the price means some buyers just won't call, and you'll waste time with others who shouldn't be calling.

8. Listen to buyers. The biggest mistake sellers make talking to buyers is to get defensive about their home. Listen to criticisms, and resolve them or ask how important the issue is to the buyer. In other words, learn a little about selling.

9. Be careful with the sales agreement. Be sure that it is understood by both sides. What happens, and when? What if the buyer doesn't get their financing? What's included in the sale? When will the buyer take possesion? Who pays the closing fee?

10. Make closing easy. Have the documents all ready to sign. Be prepared with answers to likely questions. This is likely the largest financial transaction in your buyer's life. Make him comfortable.

There is a lot more to selling your own home than can be covered in ten tips, of course. Use these however, and you'll be doing better than the average FSBO seller.

By Steve Gillman

Dont Sell It Yourself

2008-07-16T23:47:00.007-07:00

Don't sell it yourself! Sometimes a "FSBO," or house "for sale by owner" can sell as fast, and for as much as it would have if listed with a real estate agent. Sometimes. Before you decide to give it a try though, consider the following ten points.

1. Most buyers work with agents, and look through MLS listings. If you don't list with an agent, most buyers will never see or hear about your home. It's hard to find that "right" buyer or get top dollar when your invisible to most of the market.

2. FSBOs get lower offers. It's only logical. The buyer thinks you'll take less because you're saving the commission! Save $10,000, get $10,000 less - where's the advantage in that?

3. You pay advertising. All the costs the real estate office normally pays are yours if you sell it yourself. How much will you spend on ads if it takes a a year to sell?

4. You don't have the resources. The agent has books of sold properties to look at, for example, to determine the best price for your home. You can get that information by digging through county records, but you do have to value your time too, right?

5. You may not know the market. What's the target market for your house? Young couples, retirees? What features are they looking for? You should know these things before you write your ads. An experienced real estate salesperson will know.

6. You may not know the laws. What about written disclosures, and who pays the real estate transfer tax? Just because you sell it yourself doesn't mean you get to ignore the laws.

7. You may not be a good salesperson. How do you develop rapport and properly answer objections? Will your defensiveness scare off a buyer who criticizes your home? Think back to your own purchases. You know a good salesperson makes a difference.

8. A real estate agent handles the paperwork. Can you help the buyer properly fill out an offer to purchase? Do you have the other closing documents ready?

9. Real estate agents negotiate for you. When is the last time you learned a new negotiating technique? Do you know how to counter-offer without angering a buyer? A good salesperson is trained in these skills.

10. You may not save a penny. Documents, newspaper advertising, signs for the yard, and more - it's all your expense when you sell it yourself. Then after your hard work, you get low offers, and negotiate poorly? The truth is that sellers often net less money from the sale when they try to save the commission.

You can see why most "FSBO" sellers eventually turn to a real estate agent for help. You can learn to do many of the things an agent does, but is it worth it to spend all that time and maybe not even save any money? Don't sell it yourself unless you really know what you're doing, and you're ready for the hassle.

By Steve Gillman

Estate Planning

2008-07-16T23:47:00.005-07:00

Estate planning can enable you to control your property while you are alive, take care of you and your loved ones if you become disabled, and give what you have to whom you want, the way you want, and when you want, and if you wish, you can save every last tax dollar, professional fee, and court cost possible.

Estate planners frequently begin the estate planning process by analyzing clients' personal and financial dreams, aspirations, fears and objectives. The financial side of this analysis usually begins with the following question: "What do you own and how do you own it?" More often than not clients say "I know what I own, but I do not know how I own it." The way that you own your property will greatly effect your estate plan.

There are three frequently used forms of ownership of property: "fee simple," "tenancy in common," and "joint tenancy with right of survivorship."

Fee simple ownership means that you own property by yourself as the sole and absolute owner. You can give it away, sell it, or keep it and control who will inherit it upon your death.

Tenancy in common means that you own property with at least one other person. You do not own the entire asset. Let us assume that you and a friend own a 100-page book and that you own it as tenants in common. Each of you owns 50 percent of the book; that is, each of you owns fifty pages. Each of you could give your fifty pages to anyone you like while you are each alive. Each of you can leave your fifty pages to anyone at your death. In short, each of you is the absolute owner of each of your respective shares of the book. There is no limit to the number of tenants who can own something with others in tenants in common. Commonly two, three, or four people purchase property together, with each owning one-half, one-third, or one-quarter of the property.

Joint tenants with right of survivorship is a very commonly used method of owning property. This form of ownership is commonly used but greatly misunderstood by the public. Let us assume again that you and a friend own a 100-page book. This time you own the book as joint tenants with right of survivorship. Unlike tenants in common where you each own 50 percent of the book, in joint tenants with right of survivorship you each own 100 percent of the book. Each of you owns the entire book. There is no limit to the number of tenants who can own something with others as joint tenants with right of survivorship. While you are alive, you can sell or give your part away. Such actions would change the nature of ownership of the property between the purchaser/recipient of the gift and the remaining tenants. The survivorship feature means that as each individual joint tenant dies, the deceased person's interest is automatically distributed by operation of law to the remaining joint tenants. This is what might be called the "winner takes all" game.

Let us assume that four people own a beach house as joint tenants with right of survivorship. As long as more than one of them is alive, none of their wills or trusts will control the disposition of the beach house. If one of them outlives all of the others, she could distribute the house to whomever she wants at her death and totally exclude the others' families and loved ones.

Tenants by the entirety is a special form of joint ownership that works the same as joint tenancy with right of survivorship. It is used in some states by a husband and wife to own real estate. For our purposes, think of this form of ownership as a special form of joint tenancy for a married couple. The married couple is viewed as one person.

In summary, if you own property in fee simple you own it all, you can give it away, sell it or leave it to your chosen beneficiaries upon your death. If you own property in tenants in common you own part of it, you can give your part away, you can sell your part, and leave your part on death. If you own property in joint tenancy you own all of it with someone else, you can give your interest away, you can sell your interest but you cannot leave your interest on death.

How do you own your property? Why do you own it the way that you own it? It is very likely that decisions regarding the form of ownership of your property were made by well intentioned others. Did the settlement attorney ask how you want to own your home? Did your real estate agent ask you this question? If he or she did, is your home titled the way you requested? When you went to the bank to open a checking account, did your banker discuss the various forms of ownership with you? When you opened your brokerage account, did your advisor discuss the importance and ramifications of account title? Chances are your settlement attorney, banker, and financial advisor titled your assets in joint tenancy with right of survivorship if your are married and in your sole name if you are single, widowed, or divorced.

Make sure you know what you own and how you own it. Do your estate planning documents control your property? Make certain that what you own, how you own it, and your estate plan are consistent with your specific planning dreams and aspirations.

By Neda Dabestani-Ryba

Tenants in Common (TIC)

2008-07-16T23:47:00.003-07:00

Tenants in Common is a way of sharing ownership of property among two or more people. Each tenant holds an undivided interest in the property, and each tenant may own a different size portion of the property. Tenants in common ownership may be established in many different ways: through a will, deed, or other document of title. Today Tenants in Common (TIC) ownership has become a popular way for people to complete 1031 tax deferred exchanges when they hold title as an individual or other entity and would like to participate in a partnership or partnership style structure. Other people are using Tenant in Common structures to purchase multi-family real estate that may be suitable for a condominium (condo) conversion after a certain seasoning period.

There are other benefits to owning property as Tenants in Common as well. For people looking to diversify, TIC structures allow you to invest in larger properties, different types of investment property and different geographic markets. Perhaps you are looking to move up to institutional grade or single tenant properties with triple net lease arrangements. You may also benefit from fixed-rate, non-recourse financing with institutional terms for tenants in common owners. This type of financing with 5-10 year terms is usually not available to small, single investors. Many, perhaps most, tenants in common arrangements are created through inheritance whereby the decedent's will leaves property to intended heirs with or without specifying the size of interest that each is to receive. One of the most attractive features of a TIC structure is that acquiring an interest in investment property as tenants in common does not preclude you from buying investment property on your own in a subsequent 1031 tax deferred exchange. Returning to sole ownership is always an option should your investment preferences change.

Is the Tenant in Common Structure Flexible?

A tenants in common ownership interest can be purchased, sold, gifted, bequeathed by will, or inherited, and is subject to property taxes, gift tax, estate and inheritance taxes in the same manner as any property held in fee simple (single) ownership. Upon the death of a tenant in common, his or her interest in the property passes through inheritance as directed in the will or other estate planning documentation and does not divide among the other owners as there is no right of survivorship an important difference from joint tenancy ownership.

Tenant's rights

Each tenant has unrestricted rights of access to the property subject to the equivalent rights of the other tenants. Each tenant in common can petition for and secure a division of the property at any time. The partition usually will result in the petitioner being granted exclusive ownership of a portion of the property the court views as equivalent to his or her previous undivided interest. Or, the judge may order that the property be sold and the net proceeds divided among the tenants in the same proportion as their respective ownership interests.

By Neda Dabestani-Ryba

Good Tenants - Learn Twelve Ways Landlords Keep Them

2008-07-16T23:47:00.001-07:00

Happy, Long-term Good Tenants Paying On Time

How to Create a Win-Win Relationship for the Both of You!

After you've found your tenants, how do you keep them? Establish a friendly, pleasant, business-like relationship with your tenants, so they'll want to renew again each year. By using one or a few ideas below, you will learn how to keep good tenants. The following are some suggestions that apply to residential landlords, landladies, and property managers.

1. Move-in Gifts

Move-in gifts are a nice way to welcome your new tenants. Place these gifts in the apartment with a red bow on them before the tenant moves in. A (plumber's) plunger and a garbage disposal wrench, known as an Allen wrench, can work wonders for your tenants. Simple idea, right? These small, practical gift items will come in handy when the plumbing backs up or the garbage disposal stops working. Often overlooked, these items are not something people think of, but these move-in gifts will save you time and money with fewer maintenance trips.

2. Welcoming Gifts

A welcome gift establishes a positive relationship with your good tenants. Present the gift after the first eight to twelve weeks of tenancy. As always, make sure the tenant(s) rent is current before presenting your welcome gift. This effective gesture shows the good tenant(s) you are a thoughtful landlord. A few examples of some welcome gifts are:

Hanging flower baskets of petunias;

Small potted flowering plants such as pansies; or,

Small fruit baskets from your local grocery store.

Present your gift in person. These inexpensive gifts will surprise your tenant(s). And go along way towards building goodwill. This is also a good time to do a quick "look around" inspection. This way you can determine if the tenant is keeping the apartment clean.

Also, take this opportunity to observe any unauthorized move-ins (e.g., a person or pet.) If there was, then politely address the issue immediately. Mail a written letter of notification acknowledging the unauthorized move-in. A copy of the lease should also be mailed to the tenant. Anyways, you will be able to address concerns while you're there, creating a win-win relationship.

3. Renewal Gifts

Renewal gifts are small reward items of appreciation you may wish to provide to your tenant(s). A small incentive goes a long way. And you're creating a positive relationship between yourself and the tenant. Here are the benefits of lease renewal:

You don't have to advertise for another good tenant;

You don't have to screen calls;

You don't have to show the apartment only to wait for no-shows;

You don't have to build a new relationship with a new tenant; and

You don't have to educate new tenants about your do's and don'ts.

Renewable gift suggestions:

A gift certificate to a local restaurant;

A bouquet of fresh cut flowers; or

A special gift certificate from a local supermarket or gardening supply center

These renewable gifts range from $25 to $50. This amount depends on your budget. And, continues to build a positive relationship with your good tenants. Presenting a renewal gift in person demonstrates a caring attitude about your tenant(s).

4. Holidays

Holidays are a great time to acknowledge your good tenant(s). There are a number of holidays to choose from and depending on your time, schedule, and workload this is a personal choice. Generally, a trouble-free idea is to send a non-denominational holiday greeting card, letting your tenant(s) know you're thinking of them.

Alternatively, such as a week before Thanksgiving, purchase a turkey as a gift, along with one you buy for your own family. This provides the tenant(s) with a nice Thanksgiving meal while saving you time and money. Either way you're creating another win-win relationship with your good tenants.

5. Emergencies

Communication and some well-established rules are vital. Let your tenants know your property management schedule. For example, calls regarding minor problems, 8:00 a.m. to 8:00 p.m. during the week, excluding Sundays. Educating your tenants early is a necessity for your peace of mind. Following are examples of some real life non-medical emergencies.

It's 9:00 p.m. on a New England Thursday evening. The winds are strong and it's snowing lightly. The temperature has reached 30 degrees below zero. The phone rings and our tenants are complaining they have no heat. Quickly, a call is made to the oil company. The oil delivery is made and this remedies the situation. The landlord follows-up to make sure everything is o.k. Our tenants know even with freezing temperatures, we do care and act immediately.

Here's another example, one of our tenants' decided to use the laundry facility in one of our empty units. We approved her authorization to do laundry. While she was there, she discovered water spraying from underneath the bathroom sink. Already, two inches of water had accumulated. The bathroom and most of the surrounding kitchen is drenched. She called in a panic. "The water is spewing from underneath the bathroom sink," she says. I was unsure what to do. I called my best friend, my husband, and he remedied the problem within two hours. The tenant did not have to call about this emergency. She chose to, demonstrating the importance of good, strong relationships with your good tenants.

6. Maintenance

Your property rental maintenance system will increase your real estate value and cash flow. Hence, you will be able to charge a little more rent for the up keep. When you're scheduling maintenance projects for the year, make a checklist. Your checklist should include preventative maintenance; cosmetic, simple upgrades, and tenant renewals. Below are some simple guidelines for an effective property maintenance system.

Preventative:

Replace the leaky toilet system;

Replace worn out faucets;

Replace a run-down refrigerator;

Replace an unsafe stove;

Replace a leaky roof;

Replace inefficient or a potentially harmful furnace;

Schedule pest control care;

Seal cracks to prevent loss of heat or pest intrusion;

Clean or check the filter in gas heaters;

Check air conditioning unit for efficiency.

Cosmetic:

Cutting, trimming trees, flowers, etc.;

Landscaping - for example, add crushed stone around the building for extra drainage;

Painting - freshen up trim, walls, ceilings, floors, railings, lattices, and so forth;

"Curb appeal;" planting flowers and shrubs, lightly washing the outside of the building.

Upgrades:

Replace old, worn out carpet;

Replace or install new floors;

Add ceiling fan(s) to provide extra comfort during summer months;

Add a microwave.

Renewed tenants:

Repaint walls, moldings, casings, ceilings;

Provide new window screens;

For more ideas, see the long-term tenants of 3 years or more section 10 below.

7. Drive-by or Walk-around Property Inspections

Throughout the winter months, you should drive-by your property every two months. Particularly if you don't live nearby. Other areas without snowy winters may require more or less property attention. During your drive-bys or walk-around inspections, look for obstructions on the front porch, on the deck or the entranceway.

And depending on your geographic location, pay attention to the condition of the property's lawn, flowers, and shrubs. In the spring, summer and fall a monthly drive-by or walk-around is sufficient. Below is a list of items to check:

Bees nest - If it's small and you know you can remove it safely then do so. The best time to remove a bee's nest is in the morning. It's cold and the bees are not flying in and out as much. If you're unsure ask the person at the local hardware store for help. Pick up a can of bee spray eradicator while you're there. However, a professional pest control company is the easiest solution to remove the nest safely.

Clutter on the front and back porches or decks;

Water to the outside hose is turned off;

Lawn is mowed;

Do you need to paint the exterior of the house, steps, fire escape, garage, etc.?

Do you need to tar or replace the drive way or roof?

Observe any illegal or excessive activity by the tenants.

Are people going in and out of the property to frequently? If the tenant happens to be outside ask if they have any concerns or requests.

8. Walk through Inspections

Property inspections are a positive way to build strong relationships with your good tenants. Tenants who call with small problems are often viewed as pesky tenants. However, inspections performed quarterly or bi-annually will likely make your tenants more comfortable. Good tenants prefer telling you their maintenance problems in person rather than over the phone. You can also correct most tenant problems immediately.

9. Death in the Family

Acknowledging a good tenants loss is a courteous and warm gesture. Send the tenant(s) a sympathy card, a bouquet of flowers, or a catered platter of food. This goes a long way towards building a long-lasting relationship with your tenant(s).

10. Long-term Tenants of Three Years or More

If you have developed a positive, respectful relationship with your tenant and they renew their lease, than consider their renewal a job well done on your part. Tenants who renew and have been in good standing with you over the last few years will appreciate some updated interior features. Below are a few ideas to make your tenant feel good while increasing your property's value at the same time.

Install new carpeting;

Paint walls, casings, or ceilings;

Add a used dishwasher or replace the existing one;

Add a paper towel holder;

Add a garbage disposal or replace the existing one;

Provide new screens;

Provide new light fixtures;

Provide a new medicine cabinet; or

Provide a new toilet seat.

11. Good Tenants Recommending Other Possible Tenants

Good tenants will gladly recommend other tenants because the new tenants will become their neighbors. Besides, your property is the tenant's home and they are more apt to suggest helpful, pleasant, compatible neighbors. In addition, establishing a finder's fee program is an excellent incentive to encourage your tenants to introduce you to responsible, prospective renters allowing you to minimize your advertising costs and the hassles related to finding new renters, while potentially signing on another good tenant.

Certainly, any finder's fee program should be in writing, and possibly reviewed by your attorney, so that both the landlord and tenant understand how the program works, specifically how and when fees are to be paid. Retaining good tenants could create an endless pipeline of prospective tenants for you by your tenant's word of mouth rather than employing traditional, cost-prohibitive methods.

One warning: The same due diligence should be followed with any tenants referred to you by tenants presently renting from you so that you don't run into problems later on.

12. Provide your good tenant(s) an Information For Your Apartment Form

The Information For Your Apartment Form is important when you or your property manager cannot be reached. Below is a list of subjects the form should include:

Window areas;

Appliances;

Heat;

Air conditioning unit;

Security;

Plumbing;

Electrical;

Floors;

Rubbish;

Walls and ceilings;

Miscellaneous;

Emergency phone numbers;

Contact manager information.

You can view, the complete form at http://www.my-real-estate-software.com/apartment.html, so you can keep your good tenants happy and prevent those annoying middle of the night phone calls!

As you begin to integrate these suggestions into the management of your property or properties, you'll learn how to keep good tenants. When you respect, train, and show some generosity you will create a win-win relationship for the both of you that can last over twenty years or more. Good luck and happy managing!

Article by D. Maurice

Land Subdivision - $1.2 Billion Dollar Developer Tells You How To Do It

2008-07-16T23:46:00.019-07:00

Land subdivision is a bit like helping Mom slice up her beautiful Apple Pie; it's all so easy, when, like Mom, you've done it a few times. So let's see if we can get the ingredients for a land subdivision correct so you can do it right first time, OK?

Every city or town in the free world has a Town Plan and it comprises, not surprisingly, of plans or maps, usually with lots of different colors all over them, but also lots of words explaining what the colors mean as well as lots of Rules that tell you what you can do with land.

The colors indicate different zonings that your elected Council has decided upon. So say, Residential housing may be Yellow; high density housing like units, condos may be Pink; and industrial Orange, whatever. So you can see at a glance how the town plan is subdivided into land use categories.

Just as you can't build a house anywhere you like, you can't have a farm or a factory in the middle of a residential area either. So the first thing you must do is find out what is the 'Zoning' of the land you own or are thinking of buying. Getting land Rezoned is another issue altogether.

Let's assume your land is zoned for residential housing. The Town Plan will tell you all the requirements you have to undertake for land subdivision. It will tell you the minimum Lot size allowed in a residential subdivision. It will tell you the distance in feet or metres you have to Set-Back each lot from the road, either internal and/or external, as well as the side boundaries of your land.

Now all that seems a bit complicated, but don't worry, there are professional land subdivision experts who will do all this work for you. Depending in what part of the world you come from, you will engage either an Engineer in the USA or a Land Surveyor in Australia, New Zealand, UK or Ireland to prepare you land subdivision plan.

Always engage one who does their main work in your area, because these are the professional where local knowledge is very important. They will know about soil conditions in your area, because they may have done several land subdivisions in the area already and completed soil testing.

They will also know about the provision of utilities like water supply, electricity, gas, telephone. All of these impact on the cost of your development. For example, if water reticulation is not available on your road frontage and the nearest water supply is a mile away, then you may have to pay for the cost of piping water that distance.

It is vital you know this information before you commit yourself to land subdivision costs and so the Engineer or Land Surveyor are very important not only at your investigation stage, but also when you proceed with the land subdivision planning application preparation and lodgment with your Local Authority. These guys will do all that work for you.

So what does all that add up to?

Yes, you should go the Local Authority in your area of the world that handles Town Planning and study their Town Plan. You may even be able to get a photo copy of that area of the plan that concerns your land. Read the local By-Laws about the type of land subdivision you plan to do.

Next, if you don't have a recommendation as to which Engineer or Land Surveyor to use, do as I suggest in my e-book, Residential Development Made Easy, go and interview several of them in your area. Remember, as you are low on experience, the interview is your opportunity to find someone with whom you feel comfortable on a personal level.

Do they 'talk down' to you and treat you as though you're a mug? Are they information givers? Do they explain things to you? What land subdivision are they currently working on? Where is their most recently completed land subdivision?

You don't have the expertise in the profession, so use you own instincts. When you find one that suits you, Do Not start off your relationship, by attempting to haggle over the professional fees he proposed to charge you. If you have interviewed several professional you will know the range of fees charged, BUT you do not know the extent or range of work the firm has to carry out.

So to haggle with a professional based on such skinny information, tells the professional that they should avoid you by a mile. I have developed over $1.2 Billion worth of real estate and have never in my life haggled over a professional fee and the reason is simple.

First: I believe everyone is entitled to a profit from their endeavors, provided they do a good job.

Second: If you land subdivision financial feasibility study is so marginal that you have to save a few thousand dollars by screwing the fees of your professional consultants, then either you have a bad development or you are just a bad employer.

Third: I believe in incentive. I prefer to pay a guy more than he asks. Guess how he performs for me as opposed to clients who don't.

Market Reaching its Peak

2008-07-16T23:46:00.017-07:00

I do not profess to "Know" what the real estate market will do in the next year or two, but I would like to share some information with you that might help you in making decisions regarding buying or selling property in today's market. The following information relates to the types of mortgages that are currently being taken out by those who are currently purchasing or refinancing homes. Statistical surveys of the mortgage market shows that the percentage of adjustable rate mortgages comprised over 60% of the loans obtained in the last fiscal quarter. Even though the traditional 30 year mortgage is still very low in terms of historical comparison, buyers and homeowners that are currently buying or refinancing are electing to go with the adjustable rate almost two thirds of the time. Does that mean that they expect interest rates to go down even more, or is it because they can no longer afford the fixed interest rate, and believe that obtaining the adjustable rate is better than not buying or refinancing at all?

The real estate values in the previous five years have been largely impacted by interest rate reductions. As mortgage rates have declined, home prices have dramatically increased, with home prices doubling in the last five years. By far, the majority of the loans originated in the last five years were 30 year fixed rate loans. Within the last 12 months, that has dramatically changed.

Things To Consider Before Buying a Condo Hotel or Resort Residence

2008-07-16T23:46:00.015-07:00

Resort home ownership, such as condo hotels and fractional shares is different from typical home ownership. So it is important to ask certain questions before signing the purchase agreement on a resort property. The following list of questions typically applies to most types of resort property ownership unless otherwise noted.

Pricing and Initial Purchase

-Is the price negotiable and do you need to purchase through a certain company or representative? Who gets a commission off the sale? Some properties have a small percentage of flexibility in price while others are basically set in stone. This will usually be determined by demand, as well as overall policy of the developer or management company. Also, if you know who stands to profit from the sale and how much, it could help you in your negotiations.

-Is the property already completed or is it in pre-construction?

This question is important because the answer will likely affect the price of the unit. Many properties in the beginning stages of development will be sold at a discount to attract buyers, but as it becomes a more certain investment or units increase in demand, the price will go up.

-If the property is in pre-construction, when will it be completed and what will the overall property look like?

You may be anxious to get into your unit or have a certain occasion in mind. If completion is two years out, you may not want to wait. Also, a property in the early stages may look great to someone who wants a small facility with a low-key, less populated atmosphere. But there may be plans for hundreds or even thousands of additional units and large clubhouses, retail areas or other features that will draw many people. If you plan to keep your property for many years, you want to be sure it will fit your needs when it is finished.

-How many other owners are there?

This question is important for those considering purchases of fractionals. The price and amount of time available each year will depend on the number of other ownership opportunities offered in the particular unit. More than eight or ten other owners will make competition for primetime more difficult.

-What type of financing is available for this type of property in general and for this specific development?

Both condo hotels and fractionals are considered timeshare properties. Even if they are viewed as a second home, the bank considers all three types of properties discussed here as a secondary obligation - one that is less important than your primary home mortgage. As a result, you may have to pay 10 or 20 % down and the rate may be higher than a traditional home loan.

Some developers offer financing, which can be helpful, but be sure you understand the details. Some may require a smaller amount down, but will ask for a large payment upon taking possession of the unit. This arrangement may be fine with you, but you don't want any surprises.

Another financing option is to take out a second mortgage on the equity in your existing home. If you choose this route, be sure the interest rate does not make it much more expensive in the long run. Also, you need to be aware that if you use a home equity loan to finance your purchase, you have only 90 days to refinance to a regular mortgage.

Information About the Management

-Who are the developers? Who will manage the property?

The first question will be important in determining the quality and reputation of the property. The second question will help determine if the management organization is well-known, professional, and likely to increase your rental income or resale value. These two questions are critical from an investment perspective.

Costs Associated With Ongoing Ownership

-What are the ongoing costs and who pays for them? Is there an annual membership fee?

There will typically be costs for insurance, real estate taxes, and improvement of the facilities. Although owners generally pay for these items, especially in a condo hotel setting, it is still important to ask. Other expenses to verify include housekeeping, marketing, administrative and general maintenance of the property. These are usually paid by the facility but one shouldn't assume this is the case.

Rental Plan & Income Generated

-Is there a rental program and is it voluntary?

You will want to know if you can choose whether or not to participate in a rental program. This is true for all properties as some hotel residences and fractionals also offer this option as a means of generating income.

-How is the property marketed and does it have a history of success or features that will make it competitive in the vacation rental market? If you plan on receiving rental income from your property when you are not there, it is important to find out what the management's experience and approach is. Somebody like Hilton or Four Seasons has a reputation for luxury and good service and will likely attract more renters than an unknown management company. In addition, if the property has a popular restaurant, is located near a convention center, shopping area or other facility that will draw people in, you are more likely to find interested renters on a regular basis.

It is important to note that due to the unknowns involved in marketing and renting vacation properties, you should not count on rental income to cover the costs of ownership. Instead, experts recommend that you view this income as a bonus, if and when it is paid to you. The main consideration should be finding a property that you enjoy and will use.

-How is rental income distributed?

Gain a clear understanding of the percentage of rental income that will come to you, as well as any fees or charges that will come out first, such as furniture and decorating charges, and savings accounts for replacement of items. Some properties offer a better ratio than others.

Availability and Usage

-How often can you use the property? How long can you stay? How do you reserve time and how far in advance do you need to notify someone? These will be important questions for condo hotel and fractional owners. But even in a hotel residence, you may need to call ahead to let someone know you are coming. Otherwise, your place may not be cleaned and stocked with supplies.

-What if you want to cancel your time or reschedule? How far in advance do you need to let someone know? Is there a penalty? Can your friends and family use your allotted time if you're not able to?

For condo hotel and fractionals owners, the guidelines that dictate what happens when you can't be at the property are as important as those for when you are using the unit. Be sure there is plenty of flexibility so that you can easily make adjustments and get the most out of your property without being penalized unnecessarily.

-Are there other properties in the same management group that you can use? Some properties are managed by companies that have other properties available for you to use as an alternative. This can be an ideal feature, especially if you like to travel or want to share your available property time with family and friends.

Amenities and Services

-What amenities and services are available for residents and what do they cost?

As was mentioned in the previous chapter, it is important to have a full understanding of the services and amenities offered and the charge, if any. Some properties seem less expensive at first, but if you find that you will have to pay for things such as laundry, maid service, and furniture, appliance and decorating upgrades, the price doesn't seem so great anymore.

Be sure you know the actual price it will cost you to get the unit with the furnishing you want and the services you use on a regular basis. These expenses are all part of the overall cost of a property.

If You No Longer Want the Property

-What if you change your mind about the purchase?

In response to high pressure sell tactics of some standard timeshare properties, the State of Florida enacted a rescission law that allows you to change your mind about your purchase within a certain timeframe. If purchasing a new property, you have 15 days to change your mind and receive your deposit back. On a resale unit, the timeframe is 3 days.

-Can I sell or transfer ownership of my property, and if so, are there restrictions or penalties?

There may come a time when you want to sell your property or give it to your children. It is important to know the rules about this before you purchase. Some properties may say that you can only transfer ownership to family members. Others may require you to list the unit through the management company. You may also be required to own the property for a certain amount of time before you can sell. It is important to ask these questions before purchasing.

-What is the resale value of the property?

In general, the types of ownership we have described have good resale value and are typically much better than that of standard timeshares. Of the three, fractionals are the most questionable when it comes to resale, but the risk can be greatly minimized if you pick an exclusive property with a well-known management company.

The resale value of your particular property will depend on several factors, including the reputation of the management company, the number of other similar properties available in your area, the condition of the property at the time of sale, the overall real estate market, and the popularity of your location. Some of these things can't be predicted, but if you do your research it will help you to select a property with high resale value.

This list of questions covers many of the different aspects and issues associated with these innovative forms of resort property ownership. There likely will be other questions you want to ask as you become involved in the process. It is a good idea to enlist the services of a reputable real estate attorney or agent who is familiar with the specifics of condo hotels, fractionals, and hotel residence purchases. It may cost you a bit more, but could end up saving you thousands in the end and can provide you with the peace of mind and freedom to enjoy the experience and to feel satisfied with the process and the terms of the final purchase.

By Leon Altman

The 5 Biggest Mistakes Made When Getting A Business Appraised

2008-07-16T23:46:00.013-07:00

Most business owners will, at some point, want or need to know how much their business is worth. They will be faced with the task of finding someone to perform a business appraisal or valuation. Since this is unfamiliar territory, the owners often make some big mistakes.

Mistake #1 - Automatically Hiring Your Existing CPA Firm

Business owners often assume that all CPAs are competent in business valuation. In fact, many CPAs have very little or no business valuation experience or training. Don't expect your CPA firm to tell you if they are not proficient in this area. Firms are often reluctant to; turn down additional revenue, admit their lack of expertise, and refer you to a competitor.

Ask your CPA firm if they have any staff that are credentialed and experienced in business valuation. Then get an anonymous list of their prior business valuations by business size and type. Don't be too concerned if they have not valued a company in your same industry. Regular and recent business valuation experience is much more important. If they don't have adequate business valuation experience, ask if they would recommend a firm that does.

Mistake #2 - Automatically Hiring a Referred Professional

Referrals mean different things to different people, so you must ask on what basis it is being given. If it based on a brief meeting at a networking event, then don't give it much weight. Referrals based on reputation alone are only slightly better. Seek referrals based on first-hand dealings with the referred professional. All referrals, even high quality ones, need to be evaluated further to determine their business valuation competence.

Mistake #3 - Using Rule of Thumb Formulas

Many business owners believe there is some secret formula that can be used to accurately value their business. There are many rules of thumb and they are not a secret. Rules of thumb can be useful to get a "quick and dirty" estimate, but they have some serious flaws. No one really knows the quality and the quantity of the data on which they are based. The formulas typically use multiples that are expressed in ranges (like 1 to 2 times annual sales) that result in widely varying values. The formulas provide no guidance on how to select an appropriate number within that range. Most importantly, these formulas do not account for the unique characteristics and factors that affect the value of a specific business. If a business valuation will be given to third parties or subject to dispute, rule of thumb formulas just won't stand up to the scrutiny.

Mistake #4 - Paying Too Little

Business valuations typically cost thousands of dollars. In an attempt to save money business owners often look to get one on the cheap. There are a number of sources on the Internet that will value a business for substantially less cost. The old adage - you get what you pay for - applies here. These services use various formulas, proprietary data, checklists, and etc. to arrive at an estimate. Some even come with rather impressive looking reports. In general, these services are just high-priced, dressed-up rule of thumb formulas.

Mistake # 5 - Paying Too Much

Business valuation firms often set minimum fees and limit the levels of service without regard to the cost restraints of smaller companies. By omitting some valuation procedures that typically aren't relevant to smaller businesses and preparing summary-style reports, firms can legitimately and significantly reduce the cost of a business valuation. A high cost, full scope business valuation is often overkill for a small businesses. Look for a firm that can match your needs more closely to save money. Fees can vary greatly so it pays to shop around. Seek the best professional for the best price, not necessarily the lowest price.

By taking the time to do some basic research business owners can avoid these mistakes, hire a competent business valuation professional, and get the most value for their money.

By David Coffman

What is a Loft Apartment?

2008-07-16T23:46:00.011-07:00

What is a loft apartment? At the most basic level a loft apartment differs from a regular apartment because of the open layout. Lofts are open floor plans with few if any walls separating the living, dining, living and sleeping areas. The open floor plan of a loft gives it a stylish look that many residents enjoy.

In general loft apartments are older buildings that were once commercial properties. In the last 5-10 years many historic and industrial buildings that were once vacant, have now been converted into upscale loft apartments. The development of loft apartments has been a boost to local economies, revitalized downtown areas, and brought new life to historic districts.

Lofts are normally 4 to 12 story buildings, with sometimes higher than average ceilings. Large windows are often a feature of lofts and the interiors are designed to provide the occupants maximum access to exterior light.

Interior layout and design are usually a important key feature of loft apartments. Many lofts have hardwood floors, natural brick walls and exposed ceiling beams. Particular attention is also paid to hardware details such as fixtures and lighting.

Many loft apartments are located near business, nightlife and entertainment areas. Because of the urban locations loft apartments are often favored by young professionals and business people. The luxury of loft apartments also appeals to the style conscious and art enthusiasts.

In New York City there are many lofts in the Soho, Tribeca and Chelsea districts. Some lofts especially in arts districts have tenancy regulations such as status as a full-time artist. There are also many loft apartments of other major US Cities, such as Chicago, St. Louis, Houston and Dallas.

By Diane Sims

Dead Deals and Recycled Reports

2008-07-16T23:46:00.009-07:00

Everyone knows that at the end of a home inspection, a report is generated that outlines the findings of the home inspector. But did you know that this is not intended to be a "hit list" of negatives? Us home inspectors do what we do in order to objectively describe the home. This is not the place for emotion, rather a simple stating of the facts. Homes do not pass or fail inspections, they merely describe the strengths or weakness.

Inspections are also not intended to favor buyer or seller. In fact, the greatest flattery an inspector can receive is for the seller of a recently inspected home to call the same inspector to inspect their next home. This action tells all that the inspector discovered every defect known to the seller, discussed and documented those defects in a fair and objective manner. Furthermore, any unknowns discovered were likewise handled with objective fairness. This outcome should be the inspector's goal for every inspection.

Sometimes situations do arise where the person who contracted for the home inspection chooses not to or is unable to complete the transaction. When a new buyer is found, it is a common thought to use the previous report as a decision tool for this new buyer.

This is an extremely dangerous practice!

This is among the prime reasons that nearly all inspectors stipulate in their inspection agreement that the home inspection is considered a confidential communication between buyer and inspector.

Why do inspectors feel so strongly about this particular piece of the issue? Primarily because?

The written inspection document is not the complete home inspection experience!

What? How can this be?

Because, the written document only supports the observations and dialogs exchanged by all parties at the inspection. While it is certainly correct that all that is written in the report and all that is said at the inspection should be consistent, the total understanding by the buyer of the inspection comes from blending the observed with the spoken and with the written.

A new buyer viewing only the written portion of the inspection is missing much in the understanding, perspective, and context of the total inspection experience. This is a high-risk practice and should always be avoided.

Old Reports for New Buyers. When the original buyer leaves the transaction, generally the inspection report goes with that buyer. Because of the issues of confidentiality and, just as importantly, the completeness of understanding by the new buyer, a new inspection should be ordered.

However, in some cases, the original buyer, being the kind and decent souls that they are, will sometimes give the now "useless" report to the agent, who now has another party interested in the home. How wonderful! More often, however, the original buyer of the home inspection does not know of the report handoff.

The agent and the new buyer can now use the old report as a decision tool, and all without expense. The agent is a hero to the new buyer!

Yikes! No one told the new buyer about confidentiality, or about completeness of the inspection report and experience. But, even more importantly, no one told the new buyer that there is another key reason not to engage in such a practice - things change!

An inspection report is a snapshot in time of the observable conditions of the home. That picture can change in an instant!

Things do happen to homes. Should the roof now leak or the air-conditioning now not cool, this would be an unknown to the buyer. Whether or not the seller knew is a whole other issue.

The buyer, after taking possession of the home and discovering the failure and expense to repair of failing systems, has been harmed by the lack of documentation of defect in the written inspection report. When people feel harmed, they seek relief.

When such is the case, most buyers will initially seek relief from the home inspector. Several problems exist is seeking relief from this source. Among the problems is the fact that the home inspector did not miss the failed systems, they were functioning as intended and correctly described at the time of inspection of the written report.

Next among the problems for the new buyer in seeking relief from the original inspector is that the new buyer is not the customer with whom the inspector had the complete inspection experience and confidential agreement. Nope, there is no relief forthcoming from this inspector.

Advice For Agents. So now, where does the harmed, and getting hotter all the time, homeowner go for relief? The agent of course! That seems rotten and unreasonable; the agent did their buyer a favor! But, it was usually the real estate agent who improperly provided the previous inspection report. Worse yet, in many cases, it turns out that the complete written report was not provided, only a summary. This always goes badly for the agent!

Not only is the homeowner mad at the agent, but also the potential exists for the original buyer to discover that their report has been shared with a new buyer. If there was no permission to do this, that original buyer is typically very upset with the agent. This original buyer paid for the report and now feels betrayed by the agent. More bad news for the agent!

In the situation where the agent is still working with the original buyer for a different home than inspected, I have seen the buyer so upset with the agent that they have terminated that relationship. Strangely enough, they stayed with the same home inspector. Relationships in real estate are about trust, and giving away someone's report is a great way to lose that trust.

So now, the agent has on one hand an aggravated homeowner that wants to be compensated, and on the other hand has just lost a potential buyer. That looks like money going out and nothing coming in! This is not a good business situation. Ultimately, sharing home inspection reports with multiple customers is not a good business practice.

This subject and more about the interactions and relationships in real estate are discussed in Wally Conway's book, "Secrets of the Happy Home Inspector", available at GoHomePro.com or Amazon.com. As a speaker, writer, instructor, and host of The Happy Home Inspector radio show every Saturday at 3 PM on WOKV 690, Wally blends the right amount of up-to-date information with just the right amount of humor, insight, motivation, and real-world application. Visit WallyConway.com or GoHomePro.com for more information!

You Dont Need Health Insurance!

2008-07-16T23:46:00.007-07:00

Seems almost every situation in our lives is centered on communication. Good or bad, the way we express our thoughts, wants, and needs to each other determines how we live, love, and learn together.

As a guy who is a regular on the seminar circuit, does a live radio show, an HGTV television show, writes books, columns, and articles, and all the while runs a thriving home inspection company, I get to do a great amount of communicating. Some of that communication is by transmitting; some of it is by receiving. After much reflection, I have come to the conclusion that nothing is learned when we transmit, but great gains come from receiving. That is to say, we learn when we listen, not when we speak.

Not a day goes by that I am not listening to Realtors. Most days I listen to more than a few, some days more than a dozen, and on occasion, I listen to hundreds at a single seminar sitting. The things Realtors tell me help me get better. Better at home inspecting, better at dealing with customers, better on the radio, just better at every aspect of my professional life! But all that input is not without moments. Those moments range from the amazing to the zealous, sad to humorous, and brilliant to well, less than brilliant!

One of my favorite Realtor quotes follow, complete with my thoughts and commentary. A disclaimer before we begin, if this particular quote sounds like you, know that none of what follows is from a single source, but representative of things I hear on a near daily basis.

"You don't need a home inspection, you're getting a home warranty".

Seems to make sense to some that if items are warranted, their condition is of little importance. But among the problems with this thought are:

All items that might fail may not be warranted, and

Items presently not functioning would be exempted from coverage as an existing problem.

When explaining the relationship of the home inspection to the home warranty, consider the home inspection to be a physical exam and the warranty to be health insurance. Would you ever expect to hear someone say, "you don't need a physical exam, you've got health insurance"? Doesn't seem to make much sense, does it? That is essentially what we are saying to our customers with the "you don't need a home inspection, you are getting a home warranty" comment!

Let's flip it around now. How about "you don't need a home warranty, you are getting a home inspection". Here's the medical equivalent, "you don't need health insurance, you just had a physical exam"!

Insane!

In so many instances, when I have been able to explain a new or complex home related issue to a customer in equivalent medical terms, they suddenly get it. They seem to understand and are now comfortable. Clearly, most homebuyers are not in the medical profession, but the language is familiar to them. Must be from watching ER or Marcus Welby reruns!

So be clear in your communications with your customers. Be ready and able to clearly articulate a compelling argument for anything you wish to say. And above all, EDUCATE your customers. Educate them on why they need a home inspection, a home warranty, or whatever the subject is. Teach them how to choose a qualified home inspector. Teach them how to make a good decision on any real estate subject or issue. They will love you for it!

This subject and more about the interactions and relationships in real estate are discussed in Wally Conway's book, "Secrets of the Happy Home Inspector", available at GoHomePro.com or Amazon.com. As a speaker, writer, instructor, and host of The Happy Home Inspector radio show every Saturday at 3 PM on WOKV 690, Wally blends the right amount of up-to-date information with just the right amount of humor, insight, motivation, and real-world application.

Trading Inspectors!

2008-07-16T23:46:00.005-07:00

As sure as the spring flows at the Fountain of Youth, a home inspection provides a stream of knowledge to wash away the fears of homebuyers. But fear may be replaced by frustration if the wrong inspector is chosen!

Should Tradesmen be Home Inspectors?
There are some who say that the best home inspection is an inspection where all the trades are represented by a tradesperson from each specialty. It is said that this situation brings individual and specific expertise to each system. Reports would then be made separately to the homebuyer. This argument states that no one knows plumbing better than a plumber, roofs better than a roofer, or electric better than an electrician, etc.

I will support the idea that no one knows each trade better than a person specifically from that trade, but that approach to home inspecting has several glaring flaws.

Flaw #1.
To inspect the entire home using individual trades people would require more then a dozen people. Roofer, plumber, electrician, framer, mason, heating, insulation, painting, landscaper, pool, fireplace, appliance, tile, and we still have windows, doors and more! For scheduling and crowd control alone, this is a bad idea. However, if we can overcome that problem, then why not? Moving on.

Flaw #2.
It would be difficult to find a dozen or more trades people to do this inspection without the intent to solicit repair work. There is no ethics position that precludes each tradesperson from soliciting work in their chosen trade. That is what trades people do; they work in their trade.

This "looking for work" mentality puts the objectivity of the inspection process in jeopardy. While it may be appropriate for the tradesperson to make suggestions for improvement or upgrade to a homeowner, this approach is not best suited in the buying process, where the desire is principally of the inspection process to determine if exiting systems are functioning as intended, and perhaps answer component life expectancies questions.

Flaw #3.
The biggest problem, however, with bringing in a dozen trades people to inspect a home is one that cannot be overlooked. In this scenario, NO ONE is charged with the responsibility in putting all the information together, sorting how each item interacts with the other, documenting the concerns in a coherent fashion, and most importantly of all, explaining what it all means to the homebuyer in the context of the purchase and sale agreement.

If real estate agents have ever found it a challenge to deal with the issues discovered during a home inspection by a home inspector, then you have to believe that sorting the detail, or rather lack of detail, from a dozen different trades people is a challenge that could be insurmountable!

Talk about a state of confusion!

Let's leave home inspecting to the professionally trained home inspector and leave the installation and repair of specific systems to the people who install and repair!

This subject and more about the interactions and relationships in real estate are discussed in Wally Conway's book, "Secrets of the Happy Home Inspector", available at GoHomePro.com or Amazon.com. As a speaker, writer, instructor, and host of The Happy Home Inspector radio show every Saturday at 3 PM on WOKV 690, Wally blends the right amount of up-to-date information with just the right amount of humor, insight, motivation, and real-world application.

8 Essential Questions to Ask Your Home Inspector

2008-07-16T23:46:00.003-07:00

Congratulations! You've decided to purchase a home. We all know that when purchasing a home, every detail is an important one. And choosing a home inspector is no exception. It's critical to choose an inspector the same way you've chosen a real estate professional - very carefully! You'll get a great educational experience when you hire a professional with the right credentials.

Working with a home inspector isn't complicated; however, unless armed with the right questions to ask, you may get stuck with a less than capable individual. Here are my top 8 questions to ask your next home inspector:

Does the inspector come from a construction background?
It's great that your inspector is a nice person, but what did they do before inspecting homes? Do they bring a wealth of knowledge about the construction trades, building, or remodeling? Or were they a hairdresser in a previous life? Don't get me wrong, I'm not picking on hairdressers - but that occupation certainly doesn't have anything to do with inspecting a house!

Does the inspector hold the appropriate license and meet all requirements for home inspectors in your area or state, and where can you go to verify this license?
This question may not be applicable in all states - there are states without licensing requirements for home inspectors. But if your state has some kind of requirements, you need to know what they are, and where you can go to verify that your chosen inspector has done what it takes to be state-compliant. Verification is essential, because many states have the capability to track continuing education of the inspector as well as complaints.

Is the inspector a member of the American Society of Home Inspectors (ASHI)?
This is critical! ASHI is the oldest, largest, and most respected organization for home inspectors in the country. They also maintain the highest standards and ethics for home inspectors. If your inspector is a member of this organization, you can be sure that they have passed The National Home Inspectors Exam, and they have completed all training and administrative requirements for membership. You can even verify membership status at www.ASHI.org. The inspector may be a member of other organizations, but none have requirements as strict as ASHI. And don't be fooled by those companies who claim to inspect to "ASHI standards" - if they aren't a bonifide ASHI member, find another inspector.

How long has the inspector been in the inspection business, and how many inspections has he performed during this time?
Longevity gives comfort that the inspector will be with you in the future as new needs and issues arise. But if he's only done 12 inspections during his several years in business, that's not good! Your home buying decision is far too important to be a practice place for a part-time inspector.

Does your inspector have experience in homes similar to the home you are having inspected?
All homes have some systems and features in common, but a brand new home has risks and issues that differ from an historic beauty from the year 1855. Only someone who has walked the walk and crawled the crawl numerous times in similar homes can sleuth out those important items that are specific to your age, size, and type of home.

Will your inspector walk on the roof, crawl in the crawlspace, go into the basement, and climb into the attic space (if any of these are applicable)?
Your inspector should be capable of going and willing to go into those places where others fear to tread! These are the places that must be seen to best protect the customer. There a times when those locations cannot be completely inspected due to physical risk to the inspector, risk to the equipment, or seasonal limitations. But for the inspector to not inspect those locations because he doesn't want to, is scared of the dark, or is too ample to fit into those spaces is unacceptable.

Does the completed report include photographs?
Often, the report will contain descriptions of damage or defect in locations of the home that only the inspector was able to access, like roof-tops or crawl spaces. You will want pictures of these areas to make your understanding of the scope and location of the damage clear. It also makes repairs simpler to get estimated when a photograph is available.

When will the completed report be delivered, and can it be emailed?
Often the buying decision is time critical, you want to be sure you will receive your completed report in time to read, review, and respond. The best companies can deliver the report to you on-site, right at the home, just as the inspection is completed.

Finally, be sure to attend the home inspection. There is no substitute for the complete inspection experience; the report generated is only a small piece of the inspection. When you attend the inspection, see the process, ask questions, and become educated about your home, you'll gain great comfort and confidence in your buying decision. Good luck, and happy home buying!

Wally Conway8 Essential Questions to Ask Your Home Inspector

Congratulations! You've decided to purchase a home. We all know that when purchasing a home, every detail is an important one. And choosing a home inspector is no exception. It's critical to choose an inspector the same way you've chosen a real estate professional - very carefully! You'll get a great educational experience when you hire a professional with the right credentials.

Working with a home inspector isn't complicated; however, unless armed with the right questions to ask, you may get stuck with a less than capable individual. Here are my top 8 questions to ask your next home inspector:

Does the inspector come from a construction background?
It's great that your inspector is a nice person, but what did they do before inspecting homes? Do they bring a wealth of knowledge about the construction trades, building, or remodeling? Or were they a hairdresser in a previous life? Don't get me wrong, I'm not picking on hairdressers - but that occupation certainly doesn't have anything to do with inspecting a house!

Does the inspector hold the appropriate license and meet all requirements for home inspectors in your area or state, and where can you go to verify this license?
This question may not be applicable in all states - there are states without licensing requirements for home inspectors. But if your state has some kind of requirements, you need to know what they are, and where you can go to verify that your chosen inspector has done what it takes to be state-compliant. Verification is essential, because many states have the capability to track continuing education of the inspector as well as complaints.

Is the inspector a member of the American Society of Home Inspectors (ASHI)?
This is critical! ASHI is the oldest, largest, and most respected organization for home inspectors in the country. They also maintain the highest standards and ethics for home inspectors. If your inspector is a member of this organization, you can be sure that they have passed The National Home Inspectors Exam, and they have completed all training and administrative requirements for membership. You can even verify membership status at www.ASHI.org. The inspector may be a member of other organizations, but none have requirements as strict as ASHI. And don't be fooled by those companies who claim to inspect to "ASHI standards" - if they aren't a bonifide ASHI member, find another inspector.

How long has the inspector been in the inspection business, and how many inspections has he performed during this time?
Longevity gives comfort that the inspector will be with you in the future as new needs and issues arise. But if he's only done 12 inspections during his several years in business, that's not good! Your home buying decision is far too important to be a practice place for a part-time inspector.

Does your inspector have experience in homes similar to the home you are having inspected?
All homes have some systems and features in common, but a brand new home has risks and issues that differ from an historic beauty from the year 1855. Only someone who has walked the walk and crawled the crawl numerous times in similar homes can sleuth out those important items that are specific to your age, size, and type of home.

Will your inspector walk on the roof, crawl in the crawlspace, go into the basement, and climb into the attic space (if any of these are applicable)?
Your inspector should be capable of going and willing to go into those places where others fear to tread! These are the places that must be seen to best protect the customer. There a times when those locations cannot be completely inspected due to physical risk to the inspector, risk to the equipment, or seasonal limitations. But for the inspector to not inspect those locations because he doesn't want to, is scared of the dark, or is too ample to fit into those spaces is unacceptable.

Does the completed report include photographs?
Often, the report will contain descriptions of damage or defect in locations of the home that only the inspector was able to access, like roof-tops or crawl spaces. You will want pictures of these areas to make your understanding of the scope and location of the damage clear. It also makes repairs simpler to get estimated when a photograph is available.

When will the completed report be delivered, and can it be emailed?
Often the buying decision is time critical, you want to be sure you will receive your completed report in time to read, review, and respond. The best companies can deliver the report to you on-site, right at the home, just as the inspection is completed.

Finally, be sure to attend the home inspection. There is no substitute for the complete inspection experience; the report generated is only a small piece of the inspection. When you attend the inspection, see the process, ask questions, and become educated about your home, you'll gain great comfort and confidence in your buying decision. Good luck, and happy home buying!

Wally Conway8 Essential Questions to Ask Your Home Inspector

Congratulations! You've decided to purchase a home. We all know that when purchasing a home, every detail is an important one. And choosing a home inspector is no exception. It's critical to choose an inspector the same way you've chosen a real estate professional - very carefully! You'll get a great educational experience when you hire a professional with the right credentials.

Working with a home inspector isn't complicated; however, unless armed with the right questions to ask, you may get stuck with a less than capable individual. Here are my top 8 questions to ask your next home inspector:

Does the inspector come from a construction background?
It's great that your inspector is a nice person, but what did they do before inspecting homes? Do they bring a wealth of knowledge about the construction trades, building, or remodeling? Or were they a hairdresser in a previous life? Don't get me wrong, I'm not picking on hairdressers - but that occupation certainly doesn't have anything to do with inspecting a house!

Does the inspector hold the appropriate license and meet all requirements for home inspectors in your area or state, and where can you go to verify this license?
This question may not be applicable in all states - there are states without licensing requirements for home inspectors. But if your state has some kind of requirements, you need to know what they are, and where you can go to verify that your chosen inspector has done what it takes to be state-compliant. Verification is essential, because many states have the capability to track continuing education of the inspector as well as complaints.

Is the inspector a member of the American Society of Home Inspectors (ASHI)?
This is critical! ASHI is the oldest, largest, and most respected organization for home inspectors in the country. They also maintain the highest standards and ethics for home inspectors. If your inspector is a member of this organization, you can be sure that they have passed The National Home Inspectors Exam, and they have completed all training and administrative requirements for membership. You can even verify membership status at www.ASHI.org. The inspector may be a member of other organizations, but none have requirements as strict as ASHI. And don't be fooled by those companies who claim to inspect to "ASHI standards" - if they aren't a bonifide ASHI member, find another inspector.

How long has the inspector been in the inspection business, and how many inspections has he performed during this time?
Longevity gives comfort that the inspector will be with you in the future as new needs and issues arise. But if he's only done 12 inspections during his several years in business, that's not good! Your home buying decision is far too important to be a practice place for a part-time inspector.

Does your inspector have experience in homes similar to the home you are having inspected?
All homes have some systems and features in common, but a brand new home has risks and issues that differ from an historic beauty from the year 1855. Only someone who has walked the walk and crawled the crawl numerous times in similar homes can sleuth out those important items that are specific to your age, size, and type of home.

Will your inspector walk on the roof, crawl in the crawlspace, go into the basement, and climb into the attic space (if any of these are applicable)?
Your inspector should be capable of going and willing to go into those places where others fear to tread! These are the places that must be seen to best protect the customer. There a times when those locations cannot be completely inspected due to physical risk to the inspector, risk to the equipment, or seasonal limitations. But for the inspector to not inspect those locations because he doesn't want to, is scared of the dark, or is too ample to fit into those spaces is unacceptable.

Does the completed report include photographs?
Often, the report will contain descriptions of damage or defect in locations of the home that only the inspector was able to access, like roof-tops or crawl spaces. You will want pictures of these areas to make your understanding of the scope and location of the damage clear. It also makes repairs simpler to get estimated when a photograph is available.

When will the completed report be delivered, and can it be emailed?
Often the buying decision is time critical, you want to be sure you will receive your completed report in time to read, review, and respond. The best companies can deliver the report to you on-site, right at the home, just as the inspection is completed.

Finally, be sure to attend the home inspection. There is no substitute for the complete inspection experience; the report generated is only a small piece of the inspection. When you attend the inspection, see the process, ask questions, and become educated about your home, you'll gain great comfort and confidence in your buying decision. Good luck, and happy home buying!

By Wally Conway

U.S. Real Estate Sought By Foreign Investors Due to a Weaker Dollar

2008-07-16T23:46:00.001-07:00

The weak US dollar has been good news for real estate. Taking advantage of the favorable conversion rates, foreign investors are eagerly picking up real estate in major cities across the US. Who is buying and where are they investing?

WHO IS INVESTING?

In recent years the U.S. real estate market has seen the highest amount of investing from foreign investors in Germany, Britain, Canada, Japan and the Netherlands. Germany was the strongest player in 2004 reporting over $4 billion in investments for that year.

Where are they buying? In the past Europeans were drawn to East Coast properties and Asians to the West Coast. Now, because of the lower interest mortgages and a weak dollar, foreign investors are picking up property, commercial and residential, in all major US cities, including Chicago and Las Vegas.

CANADIANS AND AUSTRALIANS BENEFITING TOO

Even neighbors north of the border in Canada are seeing the benefits. Although the Canadian dollar has been weaker than the US dollar for years, many Canadians own vacation homes in the US, particularly in Arizona. They are one of the highest volume investors in the US real estate market. Whether buying or selling, Canadians are enjoying stronger purchasing power while the US dollar remains low.

Some Canadians, instead of buying, are following the lead of foreign investors who are selling current US properties in preparation for buying at an even better rate if the US dollar continues to fall.

While Germans are slowing down in the volume of investments due to recent caps, Australians are picking things up. Australia, with one of the largest pension funds in the world, must look beyond their own real estate market for investment opportunities. Investing in US real estate permits them to invest their huge national pension funds into diversified holdings.

HOW LONG WILL IT LAST?

Although the current mortgage rates are an appealing draw, they will not remain low indefinitely. However, lower priced properties such as foreclosures would make the financial investment potentially lucrative for foreign investors despite the interest rates as long as the dollar remains low.

Foreign investors looking for long run profits anticipate an increase in the US dollar as an incentive to buy. Investing while the euro is strong and the US dollar is weak means they can pick up real estate for a relatively low investment. Already some countries are seeing up to a 35% discount based on the favorable exchange rates. However, the aim is to hold the property until the US dollar is strong and then the conversion to euro would be highly profitable.

With the availability of properties online it is easier than ever for investors to find properties without crossing an ocean. Some of the best deals, such as foreclosures, can be researched and purchased without coming to the US. This makes investing in US real estate a great opportunity for investors no matter where they live.

By Jeff Garrison

Is Housing and Real Estate Bubble Hype Irrational Exuberance?

2008-06-29T21:53:00.007-07:00

Not so, says the author of this article and four real estate books including the recent "1001 Tips for Buying and Selling a Home". The upside of the hype is for real estate consumers and investors. The housing bubble topic has produced real estate market information for new or nervous investors about specific markets. Little reporting on the bubble topic exploits the "sell now" syndrome. The downside of the hype is the occasional real estate industry naysayer (never say never?) who has a financial interest to protect.

Media stories have included balanced perspectives from real estate analysts, brokers, consumers, educators, and trade associations. Their experiences remind us that real estate remains a market based upon supply and demand. The value for consumers is the wealth of updated information about their market and current real estate practices. These new resources help them make informed investment decisions concerning the management of their real estate holdings.

Housing once relegated behind the headlines has become the cover and lead story. It's certainly struck a relevant cord with its appeal to consumers, as sixty-eight percent of us are homeowners. Online monitoring service Hitwise confirmed consumer searches for real estate and housing bubble information reached a twelve-month high at the end of May 2005.

By Mark Nash

Log Homes - What is the Log-Home Lifestyle?

2008-06-29T21:53:00.005-07:00

Typical log home company advertisements in popular log home magazines talk about the "log home lifestyle" or "it's not just a home, it's a lifestyle." What does this mean? What is "the" log home lifestyle?

It's often difficult to discuss the particulars of log home living without also talking about where the log home is located. It all goes together. A house on the side of beautiful mountain certainly offers a different lifestyle than the same house in a city.

Therefore, the log home lifestyle is actually induced by the combination of the attributes of the house and its location. If the location is one of natural beauty and serenity that creates a feeling of closeness to nature and escape from the pressures of everyday life, the house should complement and enhance those feelings. Everything should fit together as part of the lifestyle "package."

For many people, logs and stone represent a return to a simpler natural lifestyle. Log homes are often described as warm, cool, quiet, cozy, relaxing, enchanting, secure, or comfortable. Often, a pleasant childhood memory or experience in a vacation log cabin or log lodge helps build these kinds of feelings.

A log home's features and furnishings also contribute to the lifestyle. A screened porch overlooking a babbling mountain stream, spacious ceilings with exposed timber beams, roaring fires in a natural-stone fireplace, a wall of large windows offering a view of the morning mist over the lake, comfortable "country" furniture that invites a long restful sit, a rustic staircase climbing to a cozy loft, large rocking chairs on the front porch from which to view the sunsets, and maybe a relaxing hot tub that, together with a glass of mountain wine, dissolves all the troubles of the day.

Many people start with a small weekend cabin and soon realize that they love the lifestyle so much that they want to live it permanently - a kind of "try-before-you-buy" approach.

Log homes can also be considered a form of connection with ancestors who may have lived in similar structures long ago - a way to turn back time and live a bit of the old lifestyle - with modern comforts and conveniences, of course.

By Al Hearn

Buying Houses at Discount Prices

2008-06-29T21:53:00.003-07:00

Buying a house is the best way you can create immediate equity. Gaining equity through buying a house is something which is very easy to do, as long as you follow these guidelines.

If you are seeking to buy a house under discount value you must have the right mindset:

"The deal of a decade comes along about once a week" - Dolf De Roos, Real estate investor.

Houses being sold below market value are out there, its just a matter of knowing where to look and the buying strategies you use.

So where can I find houses being sold for a discount?

Find motivated sellers. Some examples of these sellers are people who have experienced death, divorce, bankruptcy, the less intelligent, people who have deadlines, and are developers.

Bankruptcy/Foreclosure:

When bankrupt an individual will have the option of selling their house to a third party, most likely at a cheaper price than market value because they need the money fast. If an Individual is bankrupt and the bank is the creditor, the bank will take the asset (the house) and have a foreclosure sale. You will often find a cheap price there as well.

Death:

Although this may seem like profiting of someone else's misery, its not really. If the house is not included in the persons will, it must be sold, someone has to buy it. If the deeds to the property are transferred to someone else there is often a good chance they will not want to hold onto it and want to sell it quickly.

Divorce:

When couple breaks up things often get nasty and they both want to be separated as soon as possible. They will often settle on selling their house for a lower price but quickly.

Less intelligent:

Sometimes people are selling properties with out the help of a real estate agent and will not know the exact value of their house. They will usually price their houses too high because of emotional attachment to it. On the flip side they might be ignorant of the real market value and sell it for less than its worth.

Deadlines:

Often the best place to find deals. People with deadlines need to sell their property quickly. They may be going overseas or need the money fast. Almost all people with deadlines will sell their houses at a discount.

Developers:

In some circumstances property developers may have over extended themselves on a project and need to cut their loses. You can pick up discount houses from their mistakes.

Always ask why the house is being sold so you can determine whether the seller is motivated or not.

Other sources

Great places to look are under the classified section in the newspaper, look for things like "Urgent" or "Heavily reduced". What I love about ads under the classified section is that real estate agents are not often involved. This is good because real estate agents will often try to push up the price of a property so it is above market value. People without real estate agents often do not know the true market value of their property.

Just because there isn't a "For Sale" sign on a house does not mean the home owner would not sell for the right offer. Although chances of finding someone to sell there house through this method aren't very high, you can find great deals by making offers that a home owner might just take.

If you've been to auctions or looked at properties which have not sold in a while and are being no longer advertised, follow up on them. After so much hassle of advertising the house and no sale, the vender may be tempted to sell at a discount.

Buying strategies:

Instead of looking for properties to purchase, let the properties come to you. Get your own add in your local Newspaper saying something like," Serious property buyer, wants to buy houses from motivated sellers quickly". You'll be surprised at the number of calls you'll receive.

Don't reveal all your cards, as in try not to say why you want the property or how quickly you want to buy. Never make the first offer, let the seller make it. Once the seller states their price tag, say you want twice the discount you want off their price. So for example, the seller says they will sell it for $100,000 and you want a 5% discount, (5% of 100,000 = 5,000. 5,000*2 =10,000) offer $90,000 and counter offer up from there.

Staple a check for the deposit payment to your next offer. If the seller countersigns the contract and banks the check they have accepted the deal. The psychological impact of this tactic is amazing. This tactic shows the seller that you are deadly serious about purchasing the property quickly. It is also very tempting to just bank the check right now even though they will be selling the property at a discount.

Don't put emotions into the picture. Even if you are purchasing a house that will be your home, just because you think a bathroom looks 'adorable' you must not be willing to pay any more than its worth! This especially applies at auctions where the atmosphere makes it very hard to not bid.

Can I loose the equity that I have created:

Yes, but not likely. If you are savvy about it you can time your purchased property to gain even more equity from appreciation of the housing market in addition to creating immediate equity.

Increase of real estate value by percentage in Australian Districts

To look at the graph: http://www.use-your-equity.com/BuyingHousesatadiscount.html

As we can see from the graph, housing prices eventually all go up due to increasing demand.

The only time you can loose money is if you sell. If you never sell you will never loose money. You may loose equity when the market goes into recession, but eventually as population and demand for housing increases the property you have purchased will appreciate. If you are looking to continuously gain equity you must purchase in high capital gain areas.

When the market is booming try to purchase properties for a 5%-10% discount.

When the market is flat try to purchase properties for a 10%-15% discount. When the market is in recession try to purchase properties for a 15%-30% discount.

Do Bankers, Bubble, Discounters, & Justice Department Cloud Real Estate Industry?

2008-06-29T21:53:00.001-07:00

Once relegated to the classified advertising section of the local paper, real estate has jumped to front-page headlines and covers of national magazines. Leaders in the real estate industry are weary from interview requests for their perspectives on market conditions, the ongoing battle with the banking industry looking for entry into residential real estate brokerage, online brokerage commission discounters and investigations into their business practices from the U.S. Department of Justice.

The headlines threaten a correction in real estate prices, protectionist real estate trade associations, traditional versus Internet brokerage business models and a consumers right to a competitive marketplace for real estate services. Be aware of the issues and determine if they relate to your real estate investment goals.

Banking.

Two of the strongest industry trade associations, banking and real estate, have been waging a battle over the right of banks to offer real estate brokerage to consumers in addition to other financial instruments such as mortgages, securities and insurance which they currently market to customers. The National Association of Realtors® testified at hearings with the House of Representatives Committee on Financial Services that allowing banks into real estate will cost consumers more through increased real estate service fees.

Bubble talk.

It's a fact that talk of a real estate bubble has the attention of consumers. Hitwire an online monitoring service reported that searches for "real estate bubble" and "housing bubble" peaked at their highest level in the last twelve months for the week ending May 28, 2005. The expanded coverage and dialogue of real estate market practices and markets is an overdue educational resource for individual real estate investors.

Discount commissions and the Internet.

Discounted commissions offered by limited-service brokerages which often feature a strong Internet presence, helped this real estate business model to flourish. At issue is a discount broker using the listing information originated by a competing broker on their website. The broker who originates the listing information feels that they own the information and can "opt-out" of sharing it with competitors. Meanwhile the discount broker complains that being denied the information doesn't serve the consumer and feels it's anti-competitive. The discount brokers came into being by recognizing that some real estate consumers want alternatives to paying full-service commissions. Discount brokers offer limited services in exchange for lower commissions. State laws in some locales have been updated to implement minimum service requirements for consumers by discount brokerages at the request of state real estate trade associations.

The U.S. Department of Justice.

The adoption and possible consumer implications of limited-service requirements for discount brokerages in some states triggered an investigation by the Department of Justice. At issue is the claim by some discount brokers that these new limited service laws or policies are anti-competitive and thus violate federal anti-trust laws. The discount brokers allege these adopted or proposed policies at the national and state levels aim to restrict Internet competition for real estate consumers.

Ultimately real estate consumers and public opinion will decide if these issues cloud their perceptions of the residential real estate industry. In addition lawmakers and government officials will weigh in with their opinions of the future of real estate.

By Mark Nash

Creative Real Estate Investing

2008-06-29T21:52:00.011-07:00

With a job that paid $3.40 an hour, I saved $5,000. I used $3,500 of it to buy my first piece of real estate - 2 acres near where I lived. As you can guess, this was many years ago.

A few hours removing brush, and it was ready to sell. I hand-painted a sign, and two weeks later sold the land for $4,750, with $250 down, $100 per month, at 11% interest. With the capital gain, my annual return on investment was over 20%. Not bad, for my first time investing in real estate.

Creative Investing Means Solving Problems

I bought the land a little under market, because the seller needed fast cash. Problem one solved. I sold the land a little over market value because the buyers needed easy terms. Problem two solved. Creative real estate investing is about solving problems.

Radio stations and others need hill tops for their towers, but can't tie up their capital. One creative investor got options on hill top properties for a few hundred dollars, then found those who needed them, and signed long term leases. With the leases in hand, it was easy to get financing to buy the properties. He invested a few hundred dollars to create years of income.

Lumber mills need trees. A friend of mine helped solve this problem by letting a company cut trees on his small property. They paid him $4,500, and you know what? I couldn't see the difference when they were done. The property is residential, and was worth as much the day after the cut as the day before. He lived there, but a creative investor could buy property like his, sell half the trees, maybe clay or gravel too, and then re-sell the land.

What do people need? Easy terms? Cleared lots? Lumber? Better access to a piece of property? Smaller pieces of land? Condos instead of apartments? The list goes on. When you think creative real estate investing, think problem solving.

By Steve Gillman

Law & Logic of Homeowner Association Capital Reserves

2008-06-29T21:52:00.009-07:00

In October 1999, Oregon was one of the first states that enacted a significant improvement to its Condominium and Planned Community regarding capital reserve planning, a process by which homeowner associations plan and fund future repairs and replacements. For many associations, the process became mandatory although there was an "escape clause" for pre-October 99 Oregon communities.

But there's more to reserve planning than The Law. Where statute stops, the Board's "fiduciary" duty kicks in. A "fiduciary" is one who is given the trust or confidence of another. The Board is entrusted with care of the biggest single asset that most people own, their homes. These people have the right to expect the homeowner association to be run like the business that it is...a corporation often responsible for millions of dollars in assets.

The reserve study concept was developed during the 1980s as a result of the many aging homeowner associations that found themselves in dire straits due to failure to plan for reserve expenses. The homeowners expected the Board to plan for such events and all too many had no plan other than "dealing with it" when the time came. Well, those "times" came all too soon and inevitability lived up to its reputation. Thus, the obvious need for long range planning came about.

Reserve studies analyze and predict the cost and timing of future repairs of association maintained components like roofing, pools, paving, landscaping, painting, fences, decks and other items that have a useful life of between 3 and 30 years.

The typical condominium association has between 15 and 30 items that fall under the "reserve" definition. When the repair costs of these 15-30 items are added up, it usually amounts to hundreds of thousands, even millions of dollars. This is not chump change. It takes careful planning to accumulate the funds plus know how and when to spend it. That's what reserve planning is all about.

Reserve plans require all owners to pay a monthly share of future repairs and replacements. These payments pay for assets that are being used up. If an owner sells, the next owner picks up the monthly share. All owners pay a fair share and no more special assessments! This is as it should be. If you've been thinking there's a better way to manage association assets, there is: It's called a Reserve Study. Whether by law or logic, it's time your homeowner association started doing business like a business.

By Neda Dabestani-Ryba

10 Important Tips to Successful Real Estate Investing

2008-06-29T21:52:00.007-07:00

When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:

1. Compare Property Values and Rents

Financial statistics only go so far; the best measure of a property's market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.

2. Be careful - Tax laws may change

Don't base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.

3. Specialize in something you Know

Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you'll benefit from experience by specializing in one aspect of investment real estate properties.

4. Know the Costs going in!

Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.

5. Know where your tenants are coming from

If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants' security deposits at closing.

6. Assess the tax situation

Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.

7. Investigate insurance coverage

If seller's coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.

8. Confirm Utility Costs

Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant's rent.

9. Consult Your Accountant

Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.

10. Inspect!

Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.

By Neda Dabestani-Ryba

Commercial Real Estate: Assessing The Unique Features Of Commercial Real Estate Parcels

2008-06-29T21:52:00.005-07:00

As commercial real estate development progresses into the 21st century, many of the principles upon which the market was founded remain the same. Whether you are a property owner, developer, or commercial real estate agent, identifying and marketing the unique features of your commercial property will maximize the attractiveness of the site to prospective buyers or tenants.

Depending on the highest and best use for the property, you may be able to attract a wide spectrum of potential buyers to your site. In addition to basics such as price or zoning, experienced buyers - local or national - will consider several key factors of each potential site, including:

? Location and visibility

? Any existing physical improvements on the site

? Average daily traffic count, or ADTC

? Site access

? Utility availability

? Environmental status of the property

? Any existing or planned surrounding commerce

Let's explore some of the primary features of commercial land, and how each is interpreted by buyers.

Location, Location, Location

Because real estate is finite, location is a fundamental consideration in the purchase decision formula for buyers. Unless a property is undevelopable, each site has unique benefits that will meet the needs of a buyer seeking a particular criteria. Increasing the number of potential buyers is dependent on efforts to realize and market the full value of a parcel's location.

Location not only encompasses city and state, but also variables such as traffic arteries and surrounding commerce. Research neighboring parcels to learn what sort of future commerce, residential communities, or roadways are planned for development.

Aerial photos are a great way to showcase a site's potential. Google's free satellite mapping service provides detailed aerial images for most of the United States. To view your property, visit: http://maps.google.com.

Existing Physical Improvements

Contrary to popular belief, existing physical structures on a parcel may hinder a property's value, as opposed to increasing it. If a site has exceptional location, access, and traffic, but includes a functionally obsolescent structure, the cost of razing the structure will be a primary consideration for any prospective buyer.

If your property includes an obsolete or deteriorating structure, consider razing the structure before marketing the site. Incorporating this expense into the asking price is oftentimes easier and more profitable than deducting it from the price during negotiations with the buyer.

Average Daily Traffic Count (ADTC)

The amount of daily traffic traveling on nearby roadways can be an excellent selling point for even the most difficult properties. Many counties maintain Average Daily Traffic Counts (ADTC) records for major roadways. If the property is located near or adjacent to an intersection, acquire the ADTC for both roads. Prospective buyers will appreciate these figures being readily available in the site's marketing materials.

ADTC is a significant factor particularly for national entities, such as quick- and full-service restaurants, gas/convenience stores, hotels, and other entities that depend heavily on daily traffic patterns to draw patrons.

Site Access Options

Site access - that is, legally permissible access to the site from nearby roadways - can make or break a transaction. Even the best site can become a lemon, depending on access limitations.

Generally speaking, there are two types of access to a site. The first is "full" access, for oncoming traffic from both directions. Depending on a roadway's existing configuration, this may require the installment of acceleration/deceleration lanes, blisters, or traffic signals.

The second (and less favorable) option is "right in, right out" access, which limits vehicle access to right turns from a single lane of traffic. Because right in, right out limits the site's access to a single direction, depending on the ADTC of the affected lane, this may limit the interest of certain buyers.

If a site has potential for broader access options, the property owner may want to consider requesting a modification from the applicable municipality. Performing this legwork before placing the site on the market will significantly increase potential for realizing the full asking price.

Utility Availability

Although still common practice in many areas, properties that employ well and septic systems are regarded as secondary sites in comparison to those with modern utility infrastructure.

The cost of bringing utilities to a site may be a significant factor to some buyers. If possible, property owners should consider having electric, water, and sewage improvements brought to the site before marketing the property. Again, such a preparative measure can optimize conditions for realizing the site's full asking price.

Environmental Concerns

With a rapidly growing number of potential environmental issues, buyers have increasingly made environmental site assessments a contingency in their purchase agreements. This is a must in transactions involving properties prone to environmental issues, such as aging gas/convenience stores, as well as parcels adjacent to these entities.

The expense of an environmental assessment can be worth its weight in gold. A seller can be held liable for undetected environmental property defects, even after a transaction is consummated. The key to a successful transaction is full disclosure.

If it is determined your property has environmental issues, such a status does not make the site broadly undesirable. The cost of clean-up can be integrated into the asking price, made the responsibility of the buyer, or even shared between both buyer and seller. Other unrelated factors, such as location or ADTC, may outweigh negative aspects of the property.

Surrounding Commerce

Surrounding commerce can play a significant role in the future of any property. Even if physical structures have yet to be developed, knowing the plans for nearby parcels can help determine the highest and best use of your property.

If your site is located within an expansive commercial district, you'll have little difficulty in identifying surrounding commerce to determine potential uses for your property. Conversely, if the site is located in an area gradually shifting from residential to commercial use, or a tract of vacant land with minimal surrounding commerce, it will be necessary to speak with other property owners as well as the county assessor to determine future development plans for adjacent properties.

Becoming familiar with the unique features of your commercial property is the best way to achieve a maximum ROI on your investment. A competent commercial real estate agent will have to skills and resources necessary to help property owners research these important aspects of their property.

By Jim D. Ray

Part 1: FAQ's From Media Interviews With Real Estate Author

2008-06-29T21:52:00.003-07:00

Do you feel there is going to be a real estate bubble?

Nash: No. Are some coastal and resort markets over-heated, yes. I don't feel that markets will collapse. But investors and property owners should be ready for longer market times, diminishing over-full-price and multiple offers in over-heated markets. Prices could plateau and appreciation levels will hover at more historical levels. If you live out-of-town from where you purchased property on appreciation speculation, I would keep in very close contact with a un-biased professional in the market, daily.

Have real estate appraisers contributed to the rapid increase in home prices?

Nash: Not necessarily. You have to understand their role in a real estate transaction. They are hired by the mortgage lender to appraise the property. The homebuyer pays for the appraisers services. The lender is in business to lend money and the real estate brokerages want to close the transaction and receive their fees. In most markets there are solid closed comparable properties that justify underwriting the loan. In rapidly appreciating markets, where there are no closed comparables to support the new value, all the participants in the transaction should be aware that there is risk involved in the new value assigned to a property in a real estate contract.

What should homeowners and investors do to protect themselves from a potential bubble?

Nash: Look for incentives by builders on completed new construction buildings or homes; this indicates an over-supply of new units. Research days on market or the length of time of property has been on market. If the typical time recently has been 30 days for sold properties and current market times for the majority of sold properties are 60 or more days, the market is softening. Home prices and mortgage rates effect each other, as interest rates drop, the more buyers can afford to pay for a home, but as rates rise buyers can afford less of a purchase price. Watch interest rates as an indictor of deflating prices.

What is your position on interest only loans?

Nash: Consumers need to look at the long-range implications of interest-only loans. They should keep in mind that if their home value declines, they still owe the loan amount, which could be higher than their homes market value when they sell. If appreciation remains low, in the two to five percent range and the cost to use a full-service real estate company to sell their home is five to seven percent, their appreciation will actually go to pay selling and marketing costs, ouch!

What do you think about two new books:" Irrational Exuberance" and "Freakonomics" that touch on residential real estate?

Nash: Both make solid contributions for real estate consumers and investors in today's environment. Everyone is looking for information to make real estate decisions. While there are many inflammatory headlines, I've found the majority of the accompanying dialogue; offer good market and real estate practices advice.

The term Realtor® is generic to most consumers but are all real estate agents Realtors®?

Nash: No and the National Association of Realtors® (NAR) is diligent on protecting it's status as an registered collective membership mark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. NAR has approximately 1.1 million members, while industry sources state there are about an additional 1.4 million real estate agents not members of NAR.

What housing style will be hot in five years?

Nash: The ranch. As the boomers age they'll go from the two-story "I've arrived" colonial to the "I've retired" ranch. Five years ago ranch homes were not that popular and languished on the market in some areas. This last year several clients looking towards retirement and downsizing have asked to see only ranch homes.

Why did you write your fourth real estate book "1001 Tips for Buying and Selling a Home"?

Nash: I wanted to focus on informing the consumer to understand the questions to ask the other participants in their next real estate transaction. I ask questions like, "What is dual agency?" and "Are you being served if your agent is a dual agent?" I explain the back end of the real estate business, which is important if you as the consumer want to manage the front end of it, i.e. your transaction.

Why is 1001 Tips different from other "how-to" real estate books?

Nash: Early on my publisher wanted the book real simple. Its style is numbered tips with an explanation in bullet-points. Editorially light, but not real estate light. The reader can pick it up and put it down and grasp each tip without having to read four additional paragraphs. Plus I've been through many transactions as a real estate broker and understand what the buyer or seller needs to know in their transaction before they walk out of closing or escrow. With home prices today, consumers should demand to know.

Is location, location, location a cliché in real estate today?

Nash: Location, price, risk.

By Mark Nash

Property Investment Strategy: Securing Properties with Little or No Deposit

2008-06-29T21:52:00.001-07:00

Property Investing often requires creative strategies to make it successful. Professional property investors often use the option contract as a tool to develop some useful investment strategies. Here are some of the ways the option contract can be used to secure property for profit with little or no outlay.

Option contracts have long been used by Developers to secure potential development opportunities. They allow the developer to exclusively hold the property while they have the local authority approve the development application.

An options contract can give the developer the right but not the obligation to purchase a property. They pay an option fee to the vendor in exchange for this right.

When the option contract expires the developer either, buys the property and proceeds with the development, or, passes the property back to the vendor. Yes, it costs the developer a small fee to secure the opportunity (often 1% or more of the total asking price), but it is a small amount if the development cannot proceed or is not profitable. This way the developer limits their risk.

Property investors can secure a property in the similar way that developers do, like the example above, using a variation of the option contract. This type of option contract allows the investor to secure a property with a negotiated deposit and assign it to another purchaser if required without having to purchase the property first.

A property is secured by an option contract with a term of 2-6 months, sometimes more. The investor can then add value to the property before reselling it for an increased price with little or no closing costs.

Here are a few ways they are used to secure property and create profit;

1. An older property is secured with an option contract. The agreement also provides for access by the investor to renovate. Once the renovation is completed the property is marketed at a higher price, before the option contract expires.

The investor then assigns the contract to the new purchaser and the sale then becomes a contract between the original vendor and the new purchaser.

2. An option contract is used to secure an off-the-plan property, with a 12-18 month completion date.

In this situation the vendor agrees to allow the investor the option to buy or on-sell the property. The investor may purchase a number of apartments at a reduced price, when it is nearing completion, the property is sold at the original or a higher price. Providing the market has moved up during the time to completion a reasonable profit is made.

Additionally, the fixtures and fittings can be upgraded to provide even greater value.

3. An option contract can be used as a method of providing 100% finance. The property is secured on a long term option contract, 12 months or more for a set price.

Rising values in a fast growing real estate market ensure that by the time the option contract expires the value of the property has gone up sufficiently to ensure that there is enough equity in the property to cover the deposit. An option contract can provide some attractive investment strategies for property investors wishing to maximize their returns. In all cases the option contract provides security for the vendor and opportunity for the property investor.

See an Option Contract sample option contract (an alternative to the lease/purchase arrangement used in the USA) on the Property Investors Association of Australia web site.

This article may be reproduced in its entirety provided the resource box below is included as part of the article.

By John Moore

What Does It Take To Be A Donald Trump in Real Estate?

2008-06-13T21:11:00.005-07:00

Since you are a business oriented person, you might be thinking: "oh, great, here it comes another fad that sounds to good to be true and I don't have time for this now." Well, the fact is, like gravity you do not have to believe in Feng Shui for it to work. Whether you believe in the law of gravity or not it exists, and it affects everything you do. As Donald Trump said: "I don't have to believe in Feng Shui, but I use it because it makes me money."

It is no surprise that famous people like Trump, Oprah and Spielberg and the largest companies of the world such as Coca-Cola, Sony, Shell, Procter & Gamble, and others actively embrace Feng Shui. These companies and people practice Feng Shui principles as a way to add value to their service, to increase their profitability, create harmonious relations among employees, and to reduce employee turnover. Not only that, Feng Shui differentiates them from their competitors while multiplying their earnings and free time.

Feng Shui is not a fad, nor is it about religion, philosophy or superstition. Feng Shui is the art and science that unites time, space, people and the environment as one integral entity. Learning how to integrate Yin/Yang (opposite polarities) and the five elements..FIRE, EARTH, METAL, WATER, WOOD in your office decor, and arranging furniture to empower you...relaxes the nervous system, inspires the mind and calms the emotions. This equates to highter productivity, improved health, better relations, and more prosperity and financial fortune.

5 WEALTH Producing Principles of Feng Shui

1. ENERGY Everything in your office is alive with energy. This includes: people, animals, plants, chairs, desks, art, etc. Every single object you have in your office talks to you with memories and feelings. To create an environment that supports and empowers your career goals and objectives, surround yourself with furniture, business equipment and decorative items that reflect wealth and success.

2. SIMPLICITY Less clutter means MORE opportunity and good fortune in your business and personal life. Here are some examples of what clutter in specific areas of your work environment actually means: Clutter located in the entrance of your office represents fear of relationships. If you have lots of clutter on your desk, it symbolizes frustration, fear of letting go or the need to control everything. In the corner or behind a door represents detachment from others. Clutter under your office furniture represents the importance of appearances to you. And, if you have clutter all over your office, it usually indicates frustration, anger, and sometimes even self-loathing.

3. BALANCE In Feng Shui there are 5 elements that govern a balanced environment: Fire, Earth, Metal, Water and Wood. An office environment with an over dominate element i.e. too much WOOD will deplete your health and finances over time. Conversely, the absence of an element such as FIRE can wreak havoc on your reputation and fortune. Harmony, peace and prosperity flourish in a balanced environment.

4. HEALTH Invisible EM waves from your monitor screen, cell phone, flourescent lights and other office equipment deplete your energy and reduce your productivity. EMF's (Electromagnetic Fields of Energy) are often overlooked and can cause grave danger to your brain, nerve, endocrine and reproductive systems and to every related organ and bone in your body. According to Dr. Yao, a research physicist, "The typical American receives electromagnetic radiation up to 200 million times more intense than his ancestors took in from the sun, the stars and other natural resources." Thus, it is imperative that you protect yourself and your employees from office RADIATION, and create a healthy and safe work environment for business and people to prosper in. For more information visit www.fengshui4RE.com

5. POWER A classical school of Feng Shui called Eight Mansions has created more millionaires and billionaires than any other school of Feng Shui. This School capitalizes on specific directions for health, for negotiating, for selling, for communicating, for exercising and for sleeping. Honoring your personal power directions at work, will enable you to reduce stress and work less while increasing your WEALTH. Discover your power element at: www.chiquiz.com.

10 Feng Shui Office Tips for Success:

 Make sure that you have a desk or workspace dedicated just to you and your business

 If working from your home, avoid working in your kitchen, dining room or master bedroom

 Space clear (remove) clutter in your office

 Avoid calendar bottlers on your desk as they distract your focus and attention

 Keep only one family photo in your office

 Learn the simple 5 Element Business System to multiply your sales, income and free time

 Use Chi enhancers such as plants, fountains, flowers and artwork to beautify your office

 Place your desk in a commanding position honoring at least two out of four of your power directions

 Avoid sitting with your back to a window, an aquarium or an open door whenever possible

 Set the Intention for WEALTH using the energy blueprint of Feng Shui

"My business increased over 300% since consulting with you by phone this year. Who would have guessed that Feng Shui would even work in Iowa!" Tracy Ehlts, R.E. Broker

"I earned $89,000 the first 40 days after learning your 5 element business system, and I feel on top of my business for the first time in my real estate career." Linda Reynolds, RE/MAX Realtors

"In less than 9 months I've earned over $1,000,000 in commission income since Feng Shuing my office, desk and learning your amazing business system!" Dinorah Carmenate, R.E. Broker

Feng Shui is the communication that takes place everyday between you and your environment.

At a glance, take a look at your office, desk, car and briefcase and see what your work environment is trying to tell you about the quality of your health, relationships and career!

By SUZEE MILLER

On the Crossing of Continents

2008-06-13T21:11:00.003-07:00

Cyprus is situated in the north-east Mediterranean on the crossing of three continents - Europe, Asia and Africa. This strategic location ensured development of the island as an international business center with high-quality service, vast infrastructures and great deal of entertainment facilities. Living and business conditions there are more than comfortable. Cyprus differs from most developed countries by its minimal crime rate, high living standards and relatively low prices. That's why many tempted foreigners are buying real estate there.

For many years this island has been a second home for many people coming from all over the world. Those who've never been to Cyprus should really go and see what it's like. During 320 days in a year the island is cherished by caressing sun. Cyprus is washed by waves of Mediterranean Sea that gave life to gorgeous Aphrodite, according to ancient Greek myths.

Foreigners can by properties or land lots for construction activities on the invariable property right basis. Long-term rent is hardly ever practiced in Cyprus. After setting the sale agreement the buyer will face a simple formal procedure with the lawyer. All that is necessary is to hand in an application to the Council of Ministers that will approve the purchase.

Since the buyer pays the full price for the property he receives the paper on the transfer of ownership. What are the expenditures that a real estate buyer will face when purchasing a property in Cyprus?

Firstly, the transfer of ownership fee? It's a lump-sum paid to the Department for Estate Registration. It constitutes around 3.9 percent of the property price.

Secondly, the annual property tax? It's necessary to admit that real estate priced lower that 100,000 Cyprus Pounds (around $210,000) that belongs to a private person requires no annual property tax payments.

Stamp duty on sale agreement is estimated at 2.5 Cyprus Pounds per one thousand of value, while if the property costs more than 100,000 the buyer will pay 2 Cyprus Pounds per thousand.

The county tax ranges from 30 to 100 Cyprus Pounds depending on the property size. The tax covers expenses on garbage cleaning and street lighting.

The judicial system in Cyprus inherited the British one guaranteeing secure buyer's rights on different levels. Thus, the sale agreement cannot be breached by anyone except for the buyer himself. The seller is not allowed to sell, rent out or pawn the property since then.

Learn more about real estate in Cyprus by reading the articles below

By Cameron Lindblom

Panama is Hot - A World Class Retirement Haven Thats Ripe For Profitable Real Estate Investment

2008-06-13T21:11:00.001-07:00

If you've followed any of the major survey agencies around the world that rate places for retirement, Panama has been on top of the list in many, and for a few years running. So, if you're looking for a place outside U.S. borders to retire, Panama should be given very serious consideration. Panama has a lot going for it.
And even if you don't plan on retiring or living in Panama, Panama has also rated the very highest in real estate investment opportunities for those of you who would like to make their money from a distance.
Here's what is being said about Panama by some of the bigger players in the real estate market: "Real estate in both emerging and developed markets outside the United States offers some of the best investment opportunities in the world right now. " - Ricardo Griffin - the Offshore Guru at OMA. Ltd, international offshore consultants, located in Panama.
"Global real estate will be the only major asset class that could deliver double-digit returns over the next five years." - Barton Biggs, Chief Global Strategist and Chairman Morgan Stanley Investment Management, Pensions and Investments
"The good news in global real estate - it's no longer exclusively for the mega-rich!" - Lief Simon - Editor, International Living and Global Real Estate Investor
One can invest in property or buy a place for investment in any region of Panama but for Expat World its money is on properties in Panama City. We've been there more than a few times and we personally rate Panama City in the top three metropolitan cities of world that one can afford to live in and enjoy a good life in. Panama City has world-class restaurants, five-star hotels, international banks, hundreds of multinational businesses, a Manhattan-type skyline, every imaginable luxury ... all at about half the price you'd pay in Miami. AND it's only a few minutes to a few hours to the beaches, mountains, country side of Panama itself. It has all the infrastructure one might want! AT HAND and just a short distance from the romantics idea of paradise just a short distance away.
On the esthetic side, few places in the world offer spring-like weather year-round, a low cost of living, safety, security, peace of mind, beautiful landscapes. It has mountainsides covered with flowers and planted with coffee and beautiful waterfalls ... not to mention the best pensionado program (retirement program for foreigners) in the world. We'll tell you more about that later. It's a real benefit for the retired expat, making your buck stretch a long way. And we do mean bucks, for the US dollar is the official currency of Panama.

PANAMA'S A BARGAIN
Since the U.S. military and Panama Canal personnel pulled out (in 1999), thousands of houses and apartments have flooded the market. Abundant supply ... limited demand. so prices are cheap. You'll find bargains galore. There are bargains in property, both for sale, for rental and for investment are readily available.
You can find a three-bedroom, luxury apartment downtown with a deck, private parking, a pool, the whole ball of wax in the $70-$80,000 range and most properties in this range have an ocean view.
EW discovered properties there that were smaller and a little away from the prime areas in the $25,000 to $40,000 range. And if you are the fixer-upper type you can find the proverbial steal. You can own your own apartment or bungalow or some investment property by heading to Panama and hitting the streets and looking for the bargains OR you can use a firm that EW recommends to look for you and offer you the best deal in properties to live in or real estate investment properties. More on that later but first let us continue with why we think Panama is THE place for the best real estate buys today.
Panama is elite because of its sheer natural beauty and, most importantly to many, because of the privacy it affords in personal and financial matters combined with it's great retirement program for foreigner! s :

RETIRE IN PANAMA AS A PENSIONADO AND SEE WHAT YOU GET

50 % off entertainment anywhere in the country (movies, theaters. concerts. sporting events, etc.)

30 % off bus, boat and train fares

25 % off airline tickets

50 % off hotel accommodation (Monday through Thursday)

30 % off hotels from Friday through Sunday

25 % off restaurants

15 % off fast food restaurants

15 % off hospital bills (if no insurance applies)

10 % off prescription medicines

20 % off doctor's consultations

15 % off dental and eye exams

20 % off professional and technical services

50 % off closing costs for home loans

We've presented our picture of "Why Panama?" Too add to this, here are a few reasons the international guru's think Panama is THE place:

Direct foreign investment in Panama for the 5 years ended 2001 was approximately $3.5 billion.

Currency is the US dollar

Low inflation

Excellent tax benefits

Secrecy laws strictly enforced

Equal treatment of foreign and local citizens

Favorable incorporation laws

Large bi-lingual labor force

Diverse economic base including banking, shipping, insurance, tourism and free zone

Ranked first in the region for low cost of living by the Tripartite Committee

Stable political system

The Organization of American States (OAS), the Interamerican Development Bank (IDB) and the Economic Commission for Latin America and the Caribbean (ECLAC)

AND WHY PANAMA CITY AS THE SPECIFIC AREA FOR INVESTMENT

It is at the convergence of two continents at the Bridge of the Americas

Rated the most " International City " in Latin America

It is poised for tremendous growth in the next decade

It is within an hour of some of the finest fishing and or bird watching in the world

One hour drive from pristine beaches and cool mountain oasis

Located on the Pacific coast, yet it is only 45 minutes to the Caribbean

Increasing number of expatriates

One of the safest cities in the hemisphere

Excellent infrastructure (internet, telephone, roads, water, etc)

Well you've listen to us now for two pages or so on our views on real estate holdings or investment in Panama. If you want to know the full skinny, with no obligation and a low key approach to introducing you to what's available in real estate either for occupation, renting or investment WITH NO OBLIGATION OR NO HARD SELL TACTICS, shoot Expat World an email and we will get "the Company" (A real estate investment company established and licensed to do business in and by the Republic of Panama). Its business is to engage in the acquisition, management and sale of medium priced condominiums in Panama City, Republic of Panama.) to get back to you via email with the whole story. This is something you SHOULD do if you have any interest in overseas investment, overseas living, retirement in Panama or just want to be able to live the life of the rich and famous on a hot dog budget.

Budgeting Your Log Home: Where Do You Start?

2008-06-13T21:10:00.005-07:00

The Log home industry has matured these last many years, but there is still a lot of confusion about how much a log home costs. Naturally, everyone wants to know the cost of the log package; however, the budgeting only starts here. If you are shopping for a milled log package (as opposed to hand-crafted, which is a totally different category), the difference between one manufacturer's price and another is minimal when compared to the total cost of the structure. Here are some reasons why:

Other materials. The logs themselves only form a portion of the material costs of the home. Once the log walls are erected, you still have to worry about a floor, a roof, the windows, the doors, the plumbing, the kitchen... the list goes on and on. Some manufacturers quote a "weathered-in shell" which includes the logs, the windows and roof - all the elements that enclose the building (protecting the house against the weather). Other manufacturers only quote the log package, and leave it to the contractor to provide the other materials locally. When pricing a log package, make sure you are comparing "apples to apples".

From our experience, the price of the Logs only constituted approximately 1/5 of the total price of the finished structure. As for the rest... it's a high-end custom home, and like any custom home, your cost is limited by your imagination - and your budget. You decide whether to use hardwood floors or carpet, marble counters or formica, a metal roof or asphalt shingles. No log home company will offer these products to you. Unlike a Development contractor who offers you a limited selection, you choose everything yourself, from doorknobs to toilets. Once you start factoring in all these items, you will discover that there isn't a whole lot of difference between a log home any another home - except for the exterior walls.

Local price differences. We built our log home in New Jersey, which tends to be a lot more expensive overall than much of the rest of the country. The same house in Tennessee would cost considerably less in lumber and other materials. Also consider that labor costs vary wildly as well. A very big part of your budget will cover the labor, because this home will be built entirely by hand. Your contractor may not have to peel or notch the logs, but he will still be placing the logs one at at time, making sure the walls are plumb, drilling holes for the wiring, cutting settling gaps above the windows and doors, possibly fitting the roof frame one board at a time. Your builder is the most critical part of the project, and it's not necessarily a good idea to go with the cheapest quote. Do you really want him to cut corners to stay within a low quote?

Design features of the house. The most dramatic log homes have roof lines that point in all directions, dormers that grace the front, vaulted ceilings in the great rooms. But remember that every new angle you add to the roof adds exponentially to the cost of the project. If you need to keep costs down, think about a simple roof line with not too many angles.

Also, the old adage remains especially true with log homes: it's much cheaper to go up than go out. If you want a rambling one-story ranch house, you will have a bigger foundation cost, a bigger roof to consider, and lots more labor. If you build more stories and a smaller foundation, even though you will have to invest in a staircase the savings are considerable.

So what is the bottom line? A basic budgeting cost in the Northeast US would be $140-$150 per square foot for a milled log home; this is about the equivalent of a high-end custom stick-frame house. This does not include the land, the well, the septic, the driveway, etc. It does include the basement, the kitchen, the plumbing, etc. This is the turnkey budget for the house only. You can certainly do less if you give up a lot of amenities, but I wouldn't advise a starting budget of any less than $130 per sq. ft. You may find yourself running out of money way too soon, and that would be a terrible shame.

Mercedes Hayes

Real Estate Bankruptcy

2008-06-13T21:10:00.003-07:00

Although real estate bankruptcy cases no longer dominate the bankruptcy courts' dockets as they did in the early nineties, but they continue to be filed with great frequency in UK. At its essence, the real estate bankruptcy is a two party dispute between mortgagee and mortgagor. Real estate bankruptcy cases are typically filed after a foreclosure sale has been set. Upon learning of the bankruptcy filing, a secured creditor has a number of available options, all or some of which should be exercised, depending on the facts of the case, to maximize loan recovery.

A lender can ask the court to dismiss the bankruptcy case as a "bad faith" filing. A creditor asserting bad faith must prove the subjective bad faith of the debtor and that any reorganization by the debtor is objectively futile. For subjective bad faith, the court will examine whether the debtor invoked the protections of the Bankruptcy Code without either the intention or ability to reorganize its financial affairs. To determine objective futility, the court will examine whether there is indeed a "going concern" to preserve and whether there is any realistic chance for the debtor to reorganize. Most courts require a very strong showing to dismiss a case for bad faith at the outset of a case.

Under the Bankruptcy Code a motion for relief from stay will also be granted where the secured creditor can prove that there is no equity in the real property over and above the secured claims, and that the property is not necessary to the debtor's effective reorganization. This basis for relief is typically alleged as an alternative to bad faith, in the same motion. Almost all controversies surround the value of the real property, making the expert report and testimony of a licensed real estate appraiser essential to the successful prosecution of a motion for relief from the automatic stay on these grounds. The same factors relied upon to support objective futility in the bad faith filing analysis are used to establish that the property is not necessary to an effective reorganization.

An alternate ground for relief from the automatic stay is lack of adequate protection of the secured creditor's interest in the property. For example, if the real property is deteriorating in value and the lender is not receiving post-petition payments, the lender's security interest in the property is not adequately protected.

A creditor holding a properly perfected assignment of rents has a lien on "cash collateral" under the Bankruptcy Code. If the assignment of rents was properly perfected pre-petition, it usually attaches to the post-petition rents generated by the debtor's real property.

A debtor may not use cash collateral without either a court order or the consent of the secured creditor. While it is common in nonsingle asset realty cases for a debtor to negotiate a cash collateral agreement with the secured creditor before filing for bankruptcy, in single asset real estate cases, which are typically filed at the eleventh hour for the express purpose of stopping a foreclosure, such negotiations are virtually nonexistent.

Unless, within the first day or two of the case, the debtor requests a cash collateral agreement with the lender, or files a motion with the court to authorize the debtor's use of post-petition rents, a lender should immediately advise the debtor in writing that it may not use cash collateral absent an agreement. If an agreement is not reached, the debtor will usually petition the court for authorization on an emergency basis. The lender can also petition the court to deny authorization on the basis that the debtor lacks the ability to adequately protect its interests in the rents. In the final analysis, most secured creditors share the same objective when faced with a real estate case: to extract their collateral, including rents, from the bankruptcy as quickly and inexpensively as possible.

By Naylor Parkes

How to Sell Your Home Without a Real Estate Agent

2008-06-13T21:10:00.001-07:00

Considering the rapid rise in home prices over the past several years, home sellers are taking a hard look at the commission they have to pay to a real estate brokerage to market and sell their home. Real estate commissions vary across the country; they average in the four to seven percent range.

According to the 2004 National Association of Realtors® (NAR) Profile of Home Buyers and Sellers fourteen percent of homes were sold by-owner. The NAR study listed the two most difficult tasks for for-sale-by-owner (FSBO) were preparing and fixing up the home for sale and getting the pricing right.

Invite three full-time mid to high producing agents to your home to give you an opinion of price. Understand that if the three price opinions are not what you think the property is worth, you should understand the danger of an over-priced property. Homes that are over-priced have been studied by large national real estate brokerages and over-priced homes take longer to sell and sell at a lower price as a percentage of the original list price.

Ask the agents to give you constructive feed back on what you should do to make your home visually appeal to the majority of buyers. Below are some staging tips to prepare your home for market.

1) Research how to "stage" your home to maximize its appeal to homebuyers by creating a spacious and pleasant home environment for buyers. ·Start by removing the first thing that gets in your way.

·Take one or more major pieces of furniture out of every room to make it more spacious.

·Keep matching furniture pieces together to build uniformity in a room.

·Create seating areas where two or more people can talk.

2) Keep the eye moving when staging a room.

·Use furniture placement to direct the buyer's eye toward a room's features.

·Move large pieces of furniture away from windows.

·Place large furniture at entry end of room to lighten visual load at opposite end of room.

·Use area rugs to anchor seating arrangements.

·Have your dining table closed to its smallest size.

3) Use furniture placed on angles in a room to give it a quick update.

·Angle a bed in a corner of a bedroom to focus attention.

·Angle furniture in a V shape in living and family rooms.

·Angled furniture can help fill a room short on furniture and lend a designer look.

4) Create vignettes in rooms to set mood.

·Breakfast tray with coffee cups, newspaper, flower vase on bed.

·Set the dining room table with linen tablecloth, china, silverware,and stemware.

·Set up game table for chess, bridge, or backgammon.

5) Effective model homes focus on creating the right environment.

·De-clutter so buyers can overlay their furnishings and lifestyle.

·Clean, fresh, and new smell.

·Attention to detail. Clean rooms and landscaping trimmed.

·Subtle background music, classical, light jazz, or rock.

·Interior décor and wall colors accent home's architectural features.

·Live plants or fresh flowers add finishing touches.

6) Understand decorating basics that can guide you to repositioning a room.

·Color. A little goes a long way.

·Scale. Do furniture sizes complement or overwhelm a room?

·Pattern. Easy does it to avoid distracting from room itself.

·Lighting. Use it to define dark corners. Helps to fill out a room.

·Focal point. Fireplaces, views, art, find one in every room.

·Texture. Adds visual interest, warms cold spaces and finishes.

Understanding and completing the paperwork in a real estate transaction was number three of the most difficult tasks according to the NAR study. Once your home is priced right and ready for market you should retain a real estate attorney to help you review contracts, disclosure forms and to help you qualify potential buyers of your home. An experienced real estate attorney can help you avoid the common pitfalls in real estate negotiations and will facilitate a smooth transaction.

Here are some cliff-notes on real estate contracts.

·Use an approved real estate contract by your state real estate attorney association or local Board of Realtors®.

·Real estate contract. A binding agreement between buyer and seller. It consists of an offer and an acceptance as well as consideration (i.e. money).

·Acceptance. Agreement by the parties of the terms of a contract.

·Contract length. Research customary contract lengths, the standard is 45 days from contract to closing.

·Have sold comparables properties on hand for prospective buyers.

·Comparable. Closed prices for similar homes in age, condition, location and size.

·Price. Study average sold prices as a percentage of lists in the last six months.

·Low-ball offers. Buyers should offer over 87% of list if they are serious, otherwise you will should not responding at all to low-ball offers.

·Counteroffer(s). The response to an offer or a bid by the seller or buyer after the original offer or bid. Request all counteroffers to be in writing.

·Require all buyers to present the highest level of mortgage commitment with their contract.

·Mortgage Commitment. A document by a mortgage lender that commits the lender to providing a loan at agreed terms and conditions.

·Mortgage term, rate and amount. Look for strong down-payments of thwenty-percent or more. Interest-only loans signal that the buyers could be stretching to qualify for a loan.

·Cash offers in lieu of mortgage financing should be confirmed with a letter from your financial institution stating funds are on deposit to close the contract.

·Federal law requires Lead-Based Paint Hazard disclosures.

·Lead-Based Hazard. A disclosure of reports or knowledge of Lead-Based Hazards. Buildings built after 1978 do not present Lead-Based Hazards.

·Read Protect Your Family From Lead in Your Home by the US EPA.

·Real property disclosures required by the federal or your state Written statements by the seller(s) of a property disclosing any known defects.

·Local disclosures. Local requirements of disclosure that the seller provides and the buyer acknowledges, such as certificates of occupancy.

·W-9 form. An IRS form requesting taxpayer identification and certification numbers of buyers to receive interest on earnest money from delivery to closing.

·Subject to appraisal. Most contracts as part of the mortgage contingency require the subject property to appraise at a minimum of contract price.

·Appraisal. An objective third parties opinion of value by a licensed or certified appraiser.

·Earnest money deposit. Money given to the seller at the time the offer is made as a sign of the buyer's good faith.

·Research customary earnest money deposits as they vary. The larger the deposit, the increased motivation you buyers show to perform the contract.

·Refund of earnest money deposits. Contracts should provide for refund of the entire earnest money deposit within agreed contingency periods. Seller's attorney should hold earnest money deposits.

·Attorney approval period. Your attorney reviews and makes changes to the contract, typically 5-7 business days.

·Property inspection period. The right under a contract for the buyer at their expense to discover the actual condition of the property. This period typically runs 5-7 business days.

·Well and septic inspections. These are independent of structural and mechanical inspections.

·Timelines for contingencies run concurrently.

·Contingency. A provision in a contract requiring certain acts to be completed before the contract is binding.

·Closing/ escrow date. The date of the end of the transaction process where the deed is delivered, documents are signed, and funds are dispersed.

·Possession date. The date agreed by contract when the buyer can occupy the property.

·Final walk-through. A property tour before closing or escrow that permits the buyers one final verification of condition, agreed repairs and personal property.

·Tax pro-rations. The amount of credit given to buyers at closing for unpaid property taxes, when taxes are paid in arrears. Pro rations should always be more than 100 %.

·Personal property. List and initial all personal property included with the sale, such as air-conditioners, appliances, and playground equipment.

·Home sale contingency. The contract is contingent on the sales of the buyer's property.

·Buyers show motivation when including a home sale contingency by having their current property already on market.

·Home closing contingency. The contract is contingent only on the successful closing of an existing real estate contract.

Marketing your home to prospective buyers should include these methods. ·A professionally painted yard sign.

·Newspaper advertisements classified and photo.

·Public and broker open houses.

·Internet: virtual tour and at least eight photos.

By Mark Nash

Real Estate Negotiation Secrets

2008-06-13T21:09:00.003-07:00

When you bought your home, you offered less than you were willing to pay, right? That's the most common negotiation technique. For experienced investors, however, that's just one little secret among the many more powerful ones. What else can you do?

How To Make An Offer

1. Offer an odd amount, like $161,793. This gives the impression that you know something the seller doesn't. They may think you have a good reason for that particular price.

2. Play dumb. Ask questions, talk slow, ask for help, and never show off your real estate expertise. Sellers are afraid to budge if they think a smarter person may be taking advantage of them.

3. Use the "limited authority" ploy. Say "I'll have to check with my wife (or partner)." It's easier for sellers to accept that you can't do something, rather than the idea that you won't.

4. Refer to precedent. "My father bought his house this way." If the offer is at all unusual, sellers will feel more comfortable if they know it has been done that way before.

5. Ask for things you don't want. This lets the seller win concessions when negotiating. If you can say, "I guess I don't need the refrigerator, if I can get my price," you're more likely to get your price.

6. Be reluctant. "well, I don't know..." Reluctance gets the seller looking for ways to motivate you, and lets him feel like he's won something when you settle the point.

7. Make the offer their idea. "Are you saying you'd like a later closing, and more earnest money? Well let's do it your way, then. I just need..."

8. Get a yes before the offer. "What if I paid your price, but got my terms? Would that work for you?" Even with a few changes, it will be hard for the seller to say no to an offer he more or less already agreed to.

9. Flatter the seller. Flattery has been proven to be worth an average of $1962 in real estate negotiations. That's a joke, by the way, but you know if he likes you, you'll probably get a better deal.

10. Pass over problems, and return to them later. Agree on every agreeable point first. It will feel like the house is sold then, and it will be difficult for a seller to lose the deal over an issue or two that you need to go in your favor.

You can spend a lot of time looking for cheap houses. Why not spend a little time learning how to purchase every home for less, with some smart negotiation?

By Steve Gillman

Find the Right Apartment Quickly and Easily Using an Apartment Locator Service

2008-06-13T21:09:00.001-07:00

You've probably seen the ads or heard about apartment locators. But what do they really do and why should you choose an apartment locator to help you find an apartment area?

One of the biggest reasons to use an apartment locator is the fact that there are hundreds of apartments to choose from. When there are so many choices an apartment hunter can become overwhelmed with the vast number of choices available. It's hard to even know where to start.

Another great advantage of using the services of an apartment locator is that they know which apartments are already on the market. This way you don't waste time trying to track down apartments with availability.

I can recall times when looking for apartments either for myself or a friend where we literally hopped from one to the next, never knowing before we walked in the door if apartments were even available. Many times we'd visit with the apartment manager or even go on a tour only to discover that the apartment was out of our price range, we didn't like the floor plan, or there was something else that didn't match our expectations.

When apartment hunters utilize the services of a locator they save time and energy by knowing ahead of time which apartments aren't a good match. The apartment locator helps their clients find apartments that meet their criteria, such as floor plan, size, location, amenities, age of the complex and many other specifications. It makes the whole apartment hunting experience much easier.

Some apartment hunters may have the mistaken idea that they have to pay apartment locators. Not so! Apartment locator services are paid by all of the property companies that they service. Since they partner with almost all of the properties in a metroplex area, they are able to offer a wide variety of choices and an unbiased opinion.

Some apartment locators specialize in condos, townhouses and privately owned residential homes. These are choices that a renter would not be able to find by just searching alone.

Many apartment locator services now have online databases of available apartments so you can search and learn more about the complex before visiting in person. Online apartment locators make finding your new home easier and hassle free.

By Diane Sims

Ten Tips For Selling Your House

2008-06-13T21:08:00.007-07:00

One of the biggest mistakes people make when selling a house, is not understanding real estate value. It doesn't matter at all what you think your home is worth. The value of your home, and any improvements you made, is determined by buyers. What you enjoyed about your house is irrelevant when it's time to sell it. Think in terms of what other people want, and use some of the following tips.

House Selling Tips

1. Know your market. Find out what other similar houses have sold for, and have those examples ready to show potential buyers.

2. Decide on your minimum price - the price below which you will just not move. Don't tell your agent what this minimum is, but work with any buyers who make an offer above it.

3. Clean the most visible things first. Buy a new mailbox, perhaps. If buyers fall in love with the house before they even enter it, they'll forgive a lot of problems.

4. Clean up the neighborhood. If there's a neighbor who's yard is a mess, give their kids $10 to pick up the yard. Spend another $20 to put flowers in any common-areas, and buyers will have a better first impression of the neighborhood.

5. If you or your agent aren't getting many calls, find out why. Is more advertising necessary, or is the price too high? Drop it fast, if price is the problem.

6. Listen to comments of prospects. They will be more objective than you. If you hear several times that the kitchen is dark, get out the white paint.

7. Find out what the average sales time is in your area. If your house is taking longer than average to sell, there is a problem. Usually it's price.

8. Be sure to ask your real estate agent what they plan to do - before you sign a listing agreement. Write down what he says, and hold him to his promises.

9. If there are any known problems, such as an old roof, get an estimate for repairs. The sellers may want a $7,000 allowance for a new roof - until you show them your $4,000 estimate.

10. Do any improvements that can realisically get you at least a two-to-one return on investment. If $300 to seal the driveway is likely to add $600 to the sales price of the home, do it. Consider first those things that are most visible.

There are dozens of things you can do to sell your house faster, and get a better price. If you don't have time to do them all, start with the ones that will get the most "bang for your buck."

By Steve Gillman

Real Estate Investing Works In Your Area Too!

2008-06-13T21:08:00.005-07:00

I hope you had a spectacular weekend!

Things have been going great here at Investor Wealth Academy, and we are very excited about some major developments coming down the line for us later this summer.

More on that later.

Last Friday I was on the phone with a perspective client of ours. Let's call him "Jeff". Now, I have to be honest with you here, what Jeff had to say during our conversation was very bothersome to me, and by the end of the call I finally had to tell him that before we Could help him succeed, he'd have to change his perception about the Business.

After thinking about his comments all weekend I realized that Jeff's limiting beliefs are probably more common than I'd like to admit. But how can I help people change their perceptions?

Then, I was browsing around in my neighborhood Barnes & Noble yesterday, looking for a good read, when the newest edition of TIME magazine caught my attention!

Now I usually don't read TIME, but a headline on the cover caught my attention: Home Sweet Home - Why We're Going Gaga Over Real Estate"

I grabbed it and found some interesting numbers you need to hear.

WARNING: IF YOU ARE ONE OF THOSE PEOPLE THAT USES THE REAL ESTATE MARKET AS AN EXCUSE FOR A LACK OF SUCCESS, THIS INFORMATION WILL SHOCK YOU!

Real estate values are appreciating like wildfire across the country. The time to be investing in real estate is right now. Look at these statistics that the Time article provided:

House Price Percentage Increases

Market 5 Years 1 Year Washington, D.C. 108.1% 22.2% California 103% 5.4% Rhode Island 97.6% 17.1% Nevada 84.7% 31.2% Hawaii 82.9% 24.4% Florida 80.5% 21.4% Maryland 77.9% 21.0% New Jersey 76.5% 15.8% New Hampshire 72.3% 12.1% Massachusetts 71.8% 11.6%

As Lou and I travel the country speaking in various cities around the country, We hear a recurrent comment that goes something like this: "I know investing in real estate works where you live, but I live in a Sellers' (or Buyers') market. It doesn't work here"

Yet their local investors' association is filled with people making money right in their city. What's different between them?

Simple, It's just their attitude.

Whether you live in a sellers' or a buyers' market, you can make a killing in real estate! Look at the appreciation that is occurring across the country. You may need to adjust your strategies for the marketplace, but either way the profit potential is there. If it is a buyers' market, then motivated sellers are having even more difficulty disposing of their unwanted property. What an opportunity for you to solve their problem, and create an incredible profit margin.

Motivated sellers usually do not realize they're in a sellers' market. You have to Improve and increase your marketing to find the motivated sellers before they Get educated about the market. When you create these deals, you'll have absolutely no trouble selling - it's a sellers' market.

The point is, don't allow yourself excuses. Look at every market condition as a new opportunity. The ones that truly get wealthy are those that can thrive regardless of the external environment. Become a thriver!

I hope you have an INCREDIBLE investing week!

By Josh Brown

5 Simple Steps to Sell Your House Fast!

2008-06-13T21:08:00.003-07:00

The decision to sell your house wasn't made on the spur of the moment. It may have been spurred by the desire to live in a nicer home, the need to move for a new job or the necessity to get a handle on out-of-control costs. But whatever the reason for the decision, you've got a lot of work ahead of you before you're ready to actually sell your house on the market if you want to get the best possible price for your property. Is this your first time to sell a home? No problem! Read our tips below that will show you how to sell a house.

Step 1: Assess The Value Of Your Property

Pricing your home right is the key factor in selling it in a reasonable amount of time. Setting a price too high will make your home undesirable to buyers. Pricing it too low may, in fact, deter buyers who wonder what's wrong with it - or simply not get you a fair price for your property. Now is the time to do your research.

How much should your house sell for? In other words, what's the 'right' price? It's the price at which homes similar to yours in the same neighborhood have sold recently. You can use the free online home valuation service to find out exactly what your home is worth if you plan to sell your house yourself. Alternatively if you plan to sell your house with an agent, a good Realtor can quickly give you a reasonable approximate price based on recent sales in your neighborhood, coupled with the condition and specifics of your house. A Realtor can also make specific suggestions for things you can do to prepare your home to sell for a good price.

Step 2: Figure Out How Much It Will Cost You To Sell

If you've never sold a house before, you may not be aware of all the associated costs. You'll need to know about these costs in order to help you adjust the asking price on your house, as well as to help you estimate the profit that you'll realize on the house. If you're counting on the sale of your house to finance the purchase of another, this is especially important. These out-of-pocket costs may include:

Advertising your home, if you're selling it yourself. This could easily run into hundreds of dollars, depending on the methods you choose.

Realtor commissions - typically 6% of the selling price.

Closing costs, including attorney and other professional fees

Excise taxes on the sale

Property taxes and any homeowner association fees

Step 3: Take Care Of Any Needed Repairs

If you've been putting off getting the driveway fixed, repairing the roof or any other needed repairs, the time to do it is now, before you put your house on the market. Some repairs, left undone, will prevent your home from selling at all and others will bring your asking price down. Replacing broken roofing tiles, loose gutter shoring and other minor but unsightly problems will make your house that much more saleable.

Step 4: Get Your House Looking Its Best

Selling for the price you want depends on how appealing your house is. Take a good, hard look at your house, inside and out. Trim bushes, mow lawns, plant a flower bed. Something as simple as giving your siding and windows a good scrub down can freshen its look immensely.

Here are some other things that increase the chances of your house selling quickly:

A fresh coat of paint, or just touching up the trim

Freshly painted interior walls

New carpet or flooring in common rooms like the kitchen or bathroom

Step 5: Have A Garage Sale

Get rid of all the accumulated clutter and pocket a little profit at the same time. That collection of kids' bikes in the garage may be a storehouse of memories to you, but to a prospective buyer they're just clutter - and they will make your garage look smaller. Clear away as much clutter as you possibly can. When you're ready to show your house, it should be as close to move-in condition as possible. The more easily a buyer can picture their own family in the house, the more likely they will be to buy.

By Andrew

Find Out If There Are Sexual Predators Nearby Before You Buy A Home or Property!

2008-06-13T21:08:00.001-07:00

When looking for a new home or property, buyers ask many questions. Typical questions might be about the history of the property, property tax amounts, the school system, proximity to medical facilities, shopping malls, etc. Of course these details are important but fall short of getting all the information necessary to make an informed purchase.

We all like to think that we live in a perfect world and that our new neighbors will be just great in the location we've selected for our new home! It might even look like paradise, making it all the more tempting to view it as such! You might have heard wonderful things from friends and family about the new location you've selected. Chances are these wonderful things are true and you'll be very happy. Nevertheless, you might want to ask just one more question when considering buying a home or property in any location..."Are there sexual predators nearby?"

The answer is closer than you think! Information about sexual predators is public and easily obtained. Before you buy a home or property contact State or Local law enforcement for a list of area sexual predators and remember to get updates often even after you move. Many cities and towns have this information online, complete with photos and addresses of offenders. If you don't have online access or don't know how to contact law enforcement,ask your real estate professional to assist you!

By Deborah Brown

The Benefits of A Real Estate Agent 101

2008-06-13T21:07:00.005-07:00

Buying and selling property is not as easy as you may think. There are many things that you have to consider when purchasing a home, or when putting a home up for sale. That is why there are real estate professionals out there armed with the skills and knowledge needed to make this process easier. Read below to see how a real estate agent can help you in your real estate transaction.

The Benefits of a Sellers Agent

When you list your property through a real estate company, the individual with whom you list is known as the sellers agent, or listing agent. The very first thing that a listing agent has to offer a seller is a comparative market analysis, or, a CMA. A CMA compares your property to other real estate property listings, preferably ones that have sold. The goal of the agent is to compare apples to apples. In other words, they compare MLS listings (a.k.a the multiple listing service) with similar square footage, whether or not the property has a garage, the types of flooring the home has etc. In the end of this analysis, the agent provides you with a figure for which he or she feels that your property will sell.

Once you have chosen a sellers agent, you enter an agreement with them, often called an exclusive right to list agreement. This simply creates a legal relationship between your agent and yourself. Once your house is listed in the MLS listings, there is still much more your real estate professional can do for you. Real estate agents advertise property within their office and on their own personal websites. They often send out news letters, flyers, post cards and offer MLS bulletins for other realtors to see so that your property gains maximum exposure. In addition to advertisements, real estate agents also perform open houses on your property, during which potential buyers can see all that is good about your home.

The Benefits of a Buyers Agent

Many people feel that real estate agents are for sellers and sellers alone. But this is most definitely not the case. The first arena in which a buyers agent is helpful is finding the perfect home. Real estate agents have access to the MLS on a level that buyers do not. They can search specific criteria and find the perfect three- bedroom, two-bath home with a fenced in back yard and a rocking chair front porch. In addition, they can narrow real estate property listing searches by capping the minimum and maximum prices that the buyer wishes to spend. Once homes are selected for viewing, the agent then ensures that appointments are set up with the sellers of the homes to view the property.

Next there is the negotiation stage where a buyers agent comes in handy. The first part of this legal area is the writing of a contract. Real estate agents can help a buyer fully understand the ins and outs of an offer to purchase and give them a sense of exactly what they are getting into. Once a contract is created, presented, and accepted, the agent then sets up appointments on behalf of the buyer for things like the home inspection, pest inspection and appraisals. Your agent can advise you as to which investigations and inspections are recommended or required.Buyers agents also have a sense of who is good at these things and who is not, making these decisions easier on the buyer. Then, when closing time comes, the agent is there to help the buyer warm up their signing fingers before signing all of the papers making their home ownership a reality.

By Lori Osenbaugh

Create a Great Webpage to Sell Your Home

2008-06-13T21:07:00.003-07:00

The majority of people in the UK who are looking to move house use the internet to find properties for sale. So it makes sense to ensure that your property is on the web if you want to sell. If you are with an estate agent, most will list your property on one of the major property portals. However more and more people, tired of paying thousands of pounds to estate agents who do little work, are voting with their feet and deciding to sell their home by themselves.

There are over 100 websites in the UK where you can advertise your home for sale, ranging from a basic text listing to a full internet estate agent service. However most will have a limit to the amount of information which you can add and the number of photographs which you can include. Often this will be much less information than in an estate agent's details.

The answer is to create your own webpage to sell your house. You don't have to be a great computer expert, and you could do it all in an evening, using this step by step plan.

Where can I host my webpage?

Maybe you have some free webspace offered by your Internet Service Provider. Now is the time to use it! If you know a little about web design you are very lucky, as all you need is some very basic knowledge of HTML and you are ready to make an effective webpage. If not, you can use a word processing package such as Microsoft Word which will convert a document to a webpage.

If you don't have webspace you can use the free webspace offered by well-known search engines such as Lycos Tripod or Yahoo Geocities. Most will have website building packages too, so that you can simply enter the information into a template and you have an instant website.

Write a concise title for your page

Write one sentence using as few words as possible which sum up your property, for example 'For Sale: Three-bedroom semi-detached house in London'. Use this as your page title.

Prepare your details

However you decide to create your webpage, prepare your details beforehand using word processing package. You can do this in your own time, it will check your spelling for you and you won't lose all your work if your browser crashes. Measure all your rooms and give the measurements in both metric and imperial. Remember to add anything interesting or unusual about the house, special about its location and mention if it is in catchment for a good school.

Take your photos

Use a digital camera to take your pictures if at all possible. You can take prints and scan them but there is always a loss of quality. Photograph the front of your house and all the best features, the nicest rooms, the best corner of the garden, the great view if you have one. Take loads. Now choose only the best few pictures and make the image sizes as small as possible. If your image manipulation software allows you to optimise for the web, do it, it makes a very big difference to download times.

Put it all together

Now put together your main webpage. Use a simple design with a pale background, dark text and go easy on the animated icons! You want people to look at your house, not be distracted by a garish design. You also want it to load fast so only put the best picture of the front of your house on this page. Add your written details. Put extra photos on separate pages, only a few to a page. Use informative links, for example 'Click here for pictures of our large mature garden' is good, 'more pictures' won't invite many people to look.

Give them even more!

There are several websites which offer maps of the UK which you can link to. Help prospective buyers find you easily by adding this to your page. If you know a bit about technical drawing you could make your own floor plans and include them in the website - this would be a real bonus as they are still quite unusual. Finally if you are a wizard with a video camera you could have a go at making your own virtual tour.

Finally, add your contact details

Now include your phone number and an email address. You may want to use a free 'disposable' email address for this, because putting your email address on the web will tend to attract spam. Alternatively there are many websites that will produce a scrambled version of your email address which will work perfectly but cannot be read by spammers.

Now all you need to do is upload your website. You can submit the website to search engines and don't forget to include the website address (URL) with your emails, flyers, newspaper advertisements, on your 'For Sale' sign, and link to it from FSBO websites.

By Jacqui O'Brien

Realities of Real Estate Investing

2008-06-13T21:07:00.001-07:00

If you are anything like me, you are always looking for a good way to work for yourself and make tons of money. Is this not the dream of millions of Americans? Of course it is, and I am willing to bet that you have considered getting into the real estate market at some point. You probably figure, you will buy a little and sell a little, and renting? How easy is that? Am I close? Have you ever thought along these lines?

Real estate may seem like a nice straightforward investment opportunity, but it is a tough business. To succeed in this market you will need to invest a lot more than money, you will need to put in a whole lot of time and patience not to mention commitment.

It is true that you could make scads of cash but first you need to know all of the ins and out of the real estate investing business. Knowledge is the key, make sure you have it in spades before you sink any money into an investment.

One of the biggest myths about real estate investing is that you will get rich quick. The average investor will not see a decent income for at least 5 years. Investing in real estate successfully takes time. You may have to hang onto a property for 10 years before you can sell it for a great profit.

Another popular myth is that real estate investing can be a part time job. While of course you can work only part time, if you do you will not be making much money at all. Business is business whether it is real estate or mowing lawns, the more time you put into it the higher your chances for success. And in real estate you hours have to be flexible because you need to meet with people to negotiate when they are available.

If you treat real estate investing like a hobby you cannot truthfully expect to get much of a return on your money. This business takes dedication. You need to run your business like a pro if you want to make the contact you need to make. Get some business cards made up and get them out there. Go all the way and do what needs to be done. You can make hundreds of thousands of dollars in real estate but not overnight. But is it worth it? Of course it is, as long as you have done your research.

By Martin Lukac

Be Careful - A Real Estate Agent Could Lead You Astray

2008-06-13T21:06:00.005-07:00

The real estate agent is a valuable source of potential deals for you as an investor. They have access to the multiple listing resources and of course, have a monopoly on this information so they have to be part of your game plan as an investor. Working with real estate agents can be difficult depending on the agent.

Some of the factors that you should take note of include the following:

When you want to purchase a property, offer them a short closing date.
One way of getting an agent to take you seriously is to offer a fast closing date. There are a few things that make an agent more excited than the thought of getting their commission within the next 14 days. If the agent has another offer presented to him/her they will usually advise the client to take the offer and close than accept an offer that is higher in price. One of the reasons is because it is better to have "a bird in the hand, rather than two in the bush".

See if you can present a creative offer to the owner in person, rather than through the agent.
If you have an offer that needs to be explained in a fashion to the owner which brings out all its great benefits, then you may have to assist on presenting the offer in person or with the agent. If you present that type of offer to an agent, it may not even reach the owner and certainly will be given less priority than other offers. Agents in general do not like creative offers because they are more interested in conventional offers from solid buyers.

Be suspicious of agents.
Be suspicious of any agent who tells you what a great deal you are getting on a property. The fact is, if it is such a good deal, why he/she didn't buy it. Don't take their word as to value. Ask for a comparable sales printout to show what other properties in the area are selling for. If comparable sales information shows the same square meters as the house you are looking at, then take a drive by and see if it is correct. Don't leave the homework to your agent; make sure you do a little bit of your own assessment.

Don't be bullied by agents.
Don't be afraid to speak openly with your agent if something is being done that is not to your advantage. Unfortunately there are some agents who are unethical, and work only to ensure that they get their commission. Sometimes they will refuse to present your offer to the owner when it is their obligation and duty to do so.Many times an agent will lie and tell you to your face that your offer has been rejected, when in fact, it was never presented. If you feel that this may be the case, don't be afraid to go over the agents head and see the owner of the agency. If you find a broker is uncooperative or not acting in your interests, then the best thing is to go to another agent. The new agent will approach the same owner on your behalf.

See some properties with the agent.
Arrange to meet the agent and discuss fully what you are looking for. Do this before he/she takes you around to see some properties. Ask them to find a number of properties that will suit your requirements and make sure you are clear on exactly what you want so no time is wasted. The good agent will make an appointment for you to inspect properties very quickly so they can get a feel for what you are looking for.They will take you to all the properties and they will rearrange their times to suit your timetable. It is a good idea to take someone that you trust with you when you are looking at properties so you can get another opinion. Indicate to the agent that you are serious about your search and that if the right property is found, you would definitely be interested in proceeding. It is a good idea to take your check book with you so that the agent can see that you are serious about finding the right property.

Sometimes buying a property from a typical agent can be difficult. Many of them will tell you not to call them by to check the properties from the advertisements that they place. These are the agents that would rather place an advertisement than call the right buyer so it might be wise to use other agents.

Note: The above points do not apply to all agents. We are talking about the disreputable minority out there. Most agents care about their work and they labor to represent their client efficiently and professionally. Those are the ones to look for.

By StartRunGrow

Why Property Investors can Crash and Burn

2008-06-13T21:06:00.003-07:00

Many experts say you can't lose if you put your money into Property. Not true. Hundreds of investors who have lost their savings through property investment tell a different story. Nothing is a foolproof investment - including property.

Learn why some fail in property and prevent it happening to you:

Reason 1 - They don't give it the time.
The complaint is that the person has a job and family and therefore very little time to devote to this investment opportunity. The truth is, if they cut down on wasted time, such as watching television, or surfing the Internet, they would have the time to put into creating financial independence for them and their family in the future.

Reason 2 - "They don't know how to start."
The excuse is that you don't have the knowledge to get into this business. The reality is that most people who have investigated property investment would have done some study or talked to successful people. The best way to learn is to read books, or take seminars or join up courses.The other thing is to enlist the help of others. Henry Ford once said, "I don't need to clutter my mind with information when I have experienced men around me who can supply that type of knowledge when I need it." You don't have to know everything yourself, but you need to have people you can call on who will help you while getting started.

Reason 3 - "They don't have the cash"
The complaint is that you need money to make more money. The truth is that if you find the right property deal, the money will find you. Lack of funds is never an issue with the experienced investor. Lack of a good deal, however, is. If you can find a good deal and negotiate a good price on a property there will be plenty of people willing to put up the money.

Reason 4 - "They don't have good credit"
The excuse is that you need good credit to buy houses. The reality is that good credit does help, but you don't need it if you want to make money in real estate. There are other options, such as owner financing or lease options that are creative enough to allow you to buy real estate without credit. You can always use a partner with good credit to get into investment.There is also the other opportunity of borrowing money from the non-traditional lending institutions, even though it may cost more in interest. While all this is happening, you can work on fixing up your bad credit so you can use it as an asset in your future dealings.

Reason 5 - "There is too much competition"
The complaint is that there are too many people buying into houses, to find a good deal. The truth is that there are far more deals available than people. At any time there are many properties available in the marketplace, waiting for the right investor. The truth is most people who say they are investors sit around waiting for a property to pop up. Don't be one of these people. Go out and create your own opportunities and make your own deals.

Reason 6 - "The real estate people are hard to deal with"
The complaint is that real estate agents don't like cooperating with property investors. The truth is that if you find the right agent, he/she can be your best asset in your investing business. The agent is after commission. If you are successful they will be involved in the deals you do. This means they will create income for themselves, while helping you. Make sure you have one or two agents you work with and let them know you will be giving them business over and over again, as you increase your property portfolio.

Reason 7 - "Too many people say it doesn't work"
This is true only if you have chosen to believe the lies. It's easy for you to convince yourself that anything won't work. Henry Ford once said, "Whether you think you can or think you can't, you are right."Many people criticize moneymaking ideas because they are too lazy to do something about it. It doesn't matter what the opportunity is, if you listen to the pessimists and the critics, you will convince yourself it won't work. It's a good idea to keep away from these people because they cannot offer anything of value to you if they haven't done it themselves. Make a point of not taking financial advice from anyone who makes less money than you, or is less successful than you.

Reason 8 - "They say that a recession could be coming"
The complaint is that because of the impending economic woes of the world, everything will go down in value in due course. The truth is that if everyone felt this way, nothing would happen. When the economy is down retailers will change their prices to attract customers. If prices are falling, buy below the market price and sell just below the market price. If rental vacancies climb, then offer freebies, such as cable TV or free lawn mowing etc to attract tenants.There will always be people who cast doom and gloom on any situation. They are the ones who never achieve anything. Stay clear of them and go with the optimists, because the optimists come up with creative ideas to generate wealth.

Reason 9 - "They don't want to take the risk and lose their property."
The excuse is that real estate is very risky. The reality is that real estate is one of the safest investments you can get into. With other investments, such as shares or managed funds, you have no control. You are dependent on others and how successfully they run the company or the fund they manage. At least with real estate you have a concrete asset in front of you that you can touch and do with as you please. The more you educate yourself about investment, the less risky the real estate option becomes.

There is risk in everything. The key is to minimize your risk by educating yourself and taking small steps.

Sell Your Income Property For More

2008-06-13T21:06:00.001-07:00

Selling income property isn't like selling a house. You can paint a house, and get a little more because it looks nice. Rental property is different, because it's bought by investors, who look at income more than new paint. Raise income, and you increase value.

Let's assume investors in your area expect a capitalization rate of .08. That means that they want a net return (before loan payments and taxes) of 8% on the purchase price. If your three-plex generates $12,000 net income annually, they'll value it around $150,000 ($12,000 divided by .08). Make it generate $16,000, and you make it worth $200,000.

Get More Income From Your Income Property

Higher rents is the obvious way to boost income, if you can justify it. Find out what similar units are renting for. If you're $60 below the going rate, you can raise rents and not lose your renters. Raising the rent $60 for three apartments means $2160 more net income annually. At a .08 cap rate, you just added $27,000 to the value of your property.

Consider other ways to raise rents. Your tenants may agree to $30 more per month if you have a carport built. That's $1080 more net income annually, meaning roughly $13,500 more value added to your property. ($30 x 3 units x 12 months = $1080 divided by a .08 cap rate = $13,500) Build that carport for $4,000, and that's a good return on investment right? What else do they want?

Consider other ways to get more income. Rent storage sheds to tenants or put in a coin-operated washer and dryer. If you own a larger income property, you could install pop machines.

Reduce Rental Property Expenses

Can you add insulation to reduce the heating costs? If you're paying $80/month for lawn care, will one of the tenants do it for $40? Can you get cheaper insurance? Look for any ways you can reduce expenses. A new $4,000 furnace that saves $800/year on heating costs means you just turned $4,000 into a $10,000 higher sales price.

These things are never an exact science, and of course appearance and other factors matter. Increasing that net, though, is the surest way to get more for your income property. Just make the changes at least several months before you try to sell the property. Also, learn how do the math - it really does matter.

By Steve Gillman

What to Look Out For When Buying Off Plan

2008-06-09T01:44:00.001-07:00

Buying Off Plan

It can be difficult to decide when every deal seems to be not to be missed!

There are some key things I look for when buying off plan, whether it's in the UK or abroad it makes no difference.

The property must be good value now ie it compares favourably with similar properties today, and is not based on properties going up in value 10% each of next 2-3 years.

Supply and demand - this is vital. What is current supply and demand? What will it be when complete? If market is already looking saturated now, will it be any different in 2 years? What development is planned in area in the meantime?

Market forces - will demand grow? Decline? Who is the market? Young professionals, holiday makers?

Interest rates - what are current interest rates? Are they likely to go up/down?

Tax efficient/costs - Tax can often be your biggest expense. What are property taxes like in the country looking to invest in? What is most tax efficient way to buy ie joint names, limited company? What are other taxes like? Eg Capital gains tax, wealth tax, inheritance tax, income tax.

Location - obvious?! One development may be 20% cheaper than another, why is that? Which will go up in value by more? What attractions/amenities are there now/will be there on completion?

Payments - what is payment structure? Is this best way to leverage your money?

Independent lawyer - would always get an independent lawyer from the developer. Once have a good lawyer can trust, stick with them!

Does price cover everything? - eg air conditioning, swimming pool, car parking?

What is economic situation in country? What is likely to be over next 18 months-2 years? Is it stable?

What is size of development?

What is the build quality like?

What is the size of developer? Are they likely to go bust? If they go bust is your money secure? How long have they been around for?

Will the developer keep in contact during build period? Will they help with your strategy/exit strategy?

Exchange rates? If have bought in a foreign currency, what is likelihood of changes in exchange rates? Can you minimise the risk?

And once have asked all these questions should help form an answer!!

As with any property purchase, you should be pleased with the value when you buy, and also have an idea of the way the market is going over the build time - you do not want to have a BTS strategy and get to completion date to find out no-one wants to buy your property at the price you hoped for, as supply outweighs demand, or get hit with higher tax bill than expected. Or go in with a BTL strategy and then find out yields are much lower than you need to cover costs. This may seem obvious, but many people make these mistakes.

By Alan Forsyth

Purchasing Property With No Money Down: My Personal Experience

2008-06-06T01:15:00.001-07:00

Have you ever seen those infomercials about buying houses with "No Money Down?" They are really well done. They have all kinds of people offering great testimonials about how they have gotten rich, buying rental properties, with absolutely no money out of their pocket. You see this guy, standing on a street corner, talking to someone, and he says, "I own that one," pointing to a beautiful colonial. "I also own that one next to it, and the one two doors down, and I'll be closing on the one directly across the street from it, next week." He then assures us that he has purchased 17 homes in the last eight or ten months, with zero money down on the properties. Plus, in many cases he's also paid no closing costs.
And, let's not forget, this same guy is grossing tens of thousands of dollars monthly, and his net worth is nearly one million dollars. So, he says.
Now, all of this looks wonderful, so when the person selling the course that will teach you how to do this, at a nifty price of just $297.00, speaks, you are glued to his every word. "Real estate is the safest and fastest way to make money, today," the expert will tell you.
So, can this really be done? Can you purchase houses with no money down? Can you become a landlord in as little as one month's time and start raking in the cash from those rent payments? The answer is an absolute "Yes." It can be done, and I am proof positive, because I've done it. The question you should be asking yourself is not can I buy real estate with no money down, but should I?
You see, this is a question that the guy selling the No Money Down course, with all of his people and their great testimonials hopes you never ask. His advertising and marketing strategy would collapse, if he gave anyone a chance to ask this question, because he would be forced to lie if he answered it.
Rarely is the whole truth anywhere to be found in infomercials, especially when the advertising is about No Money Down real estate programs. The infomercial makes the idea and the program look so easy that any child could handle it. It makes it seem like every American should be doing it, and we'd all be millionaires. But every American is not doing it, and many of the ones who are doing it not only are not getting rich, they are actually going broke. The infomercial won't tell you this. That's why I'm here.
The Truth
Now, let's get started with the truth about buying real estate with no money down and the truth about being a landlord. The first thing you need to know is that they are both very bad ideas. Let me illustrate by using my own experience in these areas. I started buying rental property nearly 10 years ago. The first property I bought was a deal orchestrated by some real estate con artist, who told me I needed just $2,000 to take ownership of this home and, in the process, help out a woman who was about to be foreclosed upon.
In two years, she would clean up her credit, refinance the loan on the house, and I would make $10,000. Sounded good to someone who was quick to buy into anything that returned big dollars in a short time.
This worked for the first year, as the woman paid on time, and I pocketed an extra $100 monthly. Later, though, things began to collapse, as the house began to need repairs, all of which the woman couldn't afford, so I had to pay for them. I put nearly $5,000 into the house in a four-year period. When I was finally able to sell it, I didn't quite make back what I had put into it.
Meanwhile, I was eager to overcome this problem by adding many more. A slick mortgage broker got hooked up with an even slicker real estate prospector, and the two of them convinced me that they had a way I could buy houses rapidly, with absolutely no money out of my pocket. Although my experience will probably be enough to enlighten you to the pitfalls of this model and of being a landlord, let me say that I can't emphasize enough how dangerous buying property with no money down is.
In six months time, I had purchased eight houses - many with loans from the same wholesale lender. These lenders should have been concerned with all of the debt I was building, but they kept approving loans, based on my good credit and rents covering the mortgage payments. One of the biggest problems, which I was not experienced enough to detect, was that most of the rents were just $50 to $100 above the mortgage payment.
"Don't worry," the investor/ hustler would say. "You'll make all your money on volume. We'll get you into 30 or 40 houses, and you'll be pocketing $4,000 to $5,000 every month."
As you might imagine, my mind raced. I was making the huge deposits at that very moment. My bank account was fattening up at breakneck speed.
The Illusion
This is what people who buy houses, using the No Money Down plan envision happening. After all, if you can buy one house with no money down, why not five or ten or fifty? For some reason - the vision of the dollar sign, most likely - I failed to seriously consider the maintenance of these houses, the possibility of missed rent payments, and the chance that renters might actually stop paying, altogether, forcing me to evict them - a time-consuming and extremely costly undertaking.
As you may have already guessed, all of these things happened to me, after I had amassed 26 rental properties. In fact, oftentimes, all of these problems happened in the same month. Now, for awhile (when I had about 10 houses), if one person failed to pay rent, I could cover it with the nine other payments. But when two, three and sometimes even five tenants didn't pay in the same month, it was devastating to my business. I had to go to my business account and pay up to $3,000 at a time in mortgage payments, with no income to cover it. Plus, I had to pay a property management company to get my tenants to pay or to evict them.
Soon, this became the norm, not the exception. There were constant problems at my houses. Unhappy tenants led to poor upkeep of the property and even more maintenance problems. About one year, after I had amassed 26 houses, I was having problems with roughly 10-15 houses and/or tenants each week. I was evicting at least two tenants each month, and approximately four to seven tenants were either behind on rent or not paying at all. Promises were made, payment plans arranged and few, if any, ever followed through.
It didn't take long for me to realize that this was no way to make money in real estate. Consequently, I got rid of these houses as fast as I possibly could. There were plenty of buyers, willing to take over my headaches, because they had the ability to make it work, they believed.
In 10 years of being a landlord, I lost thousands of dollars and likely took some years away from my life with all the stress I had endured. So, whatever you do, avoid the No Money Down Trap. There are much better, still inexpensive ways to make money in real estate.