6 Ways, Real Estate Is Local

Homeowners, considering selling their homes, should, recognize, consider, and understand, much of, real estate, is local! After, more than a decade, as a Real Estate Licensed Salesperson, in the State of New York, I have often, been asked, why a particular house, does not appreciate, at the same pace, as, either, the national average, or certain, nearby neighborhoods. I explain to them, much about real estate, applies, in nearly every area, but a significant aspect, to realize, and understand, is real estate is, to a very large degree, local. With that in mind, this article will attempt to briefly consider, review, and discuss, 6 ways, every local market is somewhat unique, and this, often impacts, pricing, etc.

1. Schools: Potential home buyers, especially those with, school – age, children, pay close attention, to the local school system, and how, it compares with surrounding areas. Many will pay attention to how, it impacts, their real estate taxes, and whether, they believe, this quality, is worth the price – tag. While there are pros and cons , when one balances the costs, versus the value, in most cases, neighborhoods, with the best schools, garner higher prices.

2. Safety: People want to live in areas, where they feel, safe and secure! Remember, there are public, published records, of how many, and the types of crimes, committed, in a particular region, and, in today's, digital world, potential buyers realize, they can find out, these types of things!

3. Taxes: Some houses, in some neighborhoods, are taxed, far differently, to similar ones, elsewhere. Since, the vast majority of home buyers, use some sort of mortgage loan, for a significant portion of their payment, the amount of monthly installment, required, is a significant, relevant one. Real estate taxes, might become a significant factor, in this consideration.

4. Transportation: Most want to live, somewhere, where transportation is convenient, but, they don't sacrifice, their peace, and quiet, by living too close to a major artery. For some, this means, convenience to access to highways, and / or other significant roads, while, for others, it means, public transportation issues. Buyers are generally, willing, to pay, for this consideration!

5. Local economy: How do people, perceive the local economy, to be? How does it compare in one area, as opposed to others? How many potential buyers, versus properties, available on market, makes a significant difference!

6. Local job market: Is the local job market, and employment, stronger, or weaker, in this, specific region?

Much about real estate, depends on local issues, and markets! Those who understand, and pay keen attention, will better understand, the specific considerations, involved.

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Real Estate Transaction Process: Pricing, Marketing, Selling, Sales, Closing

Being an effective, quality, real estate agent, requires several skills, abilities, experiences, expertise, judgment, and actions, used together, to make the process, easier, less stressful, and far more efficient / effective! This process begins with properly pricing a property, from the start, using a professionally designed, Competitive Market Analysis, valuable, properly designed marketing, well – considered, selling, bringing about a sale, and paying keen attention, until the closing. After more than a decade, as a Licensed Sales Representative, in New York, I have come to realize, the difference, the right agent, might offer, and, so, with that, in mind, this article will attempt to, briefly, consider, examine, review, and discuss, some of the key considerations, to understand, during this process, and period of time.

1. Pricing: Often, the initial, listing price, sets the tone, for how well the process will go! The best approach is to price it right from the start . Statistics, and data, indicates, the best offers, come, in the vast number of instances, in the first few weeks, after a property is listed, so, does it make sense, to attract, the maximum number of qualified, potential buyers, from the start, by pricing it realistically, and in a well – considered manner. Sellers should demand, their agents, explain, their pricing rationale, and closely review a Competitive Market Analysis, and use it, to its best purposes.

2. Marketing: What is the best way, to market, a specific house, and property? Choose an agent, who prepares, a fully considered, well – designed, marketing plan, which includes, the reasoning behind, the best media, for your home, and how to get the most bang – for – the – buck. Included in this planning, should be: the proper combination of media use / usage; meaning; goals; the house's niche; niche – marketing, etc.

3. Selling: Selling must be proactive, and, clients and agents, must work together, as a team, in order to achieve the best possible results. How quickly an agent responds to leads, answers / addresses his client's concerns, and perceptions, and the quality of his advice, in a well – considered, timely manner, often, differentiates, the right representative, for you, and the rest – of – the – pack!

4. Sales: The process of selling, must close the deal, with the results, which make the most sense! Only when the sale, is completed, and, brough to fruition, has the agent, provided the service, his client needs, and deserves!

5. Closing: Some falsely believe, the process is over, when the offer is made and accepted. However, many things, might happen, between, that step, and the closing, and, thus, experience, expertise, foresight, and planning for contingencies, are essential qualities, needed to be a great real estate agent!

Homeowners should hire someone, to represent them, who will pay attention, to all these factors, and create a scenario, where his client, receives the highest, possible price, in the shortest time period, with the best terms, and the least hassle ! SInce, for most, their house, represents, their single – biggest, financial asset, doesn't that make sense?

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Making Real Estate A House – SOLD Word

We, often, discuss, the need, to hire, the best real estate agent, for your personal needs, priorities, circumstances, house, and personality! However, what is essential for a homeowner to recognize, and realize, while all these factors, are significant, and relevant, until/ unless, the house gets sold, the transaction is not completed, nor successful! An essential component, in this process, is, contemplating, and implementing, the best approach, and methods used, to transform, listing, marketing, and using the finest selling techniques, etc, to reaching the desirable point, of making it, a house – SOLD, word. With that in mind, this article will attempt to briefly, consider, examine, review, and discuss, using the mnemonic approach, what this means and represents, and why, it’s such an essential consideration.

1. Strategy; system; selling; strengths: In order to get a house, sold, creative agents, create and implement a meaningful, relevant, strategy, focused on the particular house, neighborhood, and area. This must lead, to a system, for selling the target property, and clearly identify, its strengths, especially, related to the competition. Relevant, focused marketing, promotion, and advertising, combined with well – considered, pricing, prompt, timely, follow – up, and attracting substantial numbers of qualified, ready, buyers, makes one’s proactive selling, gain the necessary traction, to get the home, sold!

2. Options; opportunities; open – mind; opinion; organized: Avoid the My way, or the highway, approach to selling a house. Consider various options, and alternatives, and, carefully, evaluate, and weigh, which ones, make sense for the specific house! Does the house have any specific options, and/ or inclusions, which might make it, stand – out, from the crowd? Will the agent take advantage of every opportunity, in an open – minded, manner, and be organized, enough, to control the transaction, effectively? When you interview agents, seek someone, who will openly, voice his opinion, in a customized manner, which considers numerous details and considerations!

3. Listen; learn: One thing, a smart homeowner, should observe, during the hiring interview, process, is whether an agent, effectively listens, to learn, what you seek, and will respect your priorities, as a major component of the overall marketing plan!

4. Delve deeply; discover; deliver: Seek an agent, who will delve deeply, into the options and possibilities, and discover, the best paths, to achieve your finest objectives, and priorities. Don’t be overly impressed, by someone, who proposes a listing price, higher than all the others, because there’s a huge difference between listing and selling prices! Your agent must over – deliver, on his promises!

Make real estate, focused on, creating and developing, a house – SOLD, word, and experience! Until/ unless, the transaction is completed, it doesn’t really make a difference, for the best interest of the homeowner!

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Real Estate and the AMT: Rental Or Investment Property

The Alternative Minimum Tax is a very important consideration for taxpayers who own real estate because just about every tax rule applying to real estate is different for the AMT than it is for the Regular Tax. This article on Real Estate and the AMT will address those situations where the individual holds the real estate as an investment, typically as rental property. The differences in tax treatment between the Regular Tax and the AMT can be significant.

Interest expense

Interest paid on the mortgage taken out to acquire the property is fully deductible, both for the Regular Tax and the Alternative Minimum Tax. Unlike itemized deductions that allow a tax benefit for what amounts to personal expenses, the tax law generally allows all deductions a taxpayer has to make in the pursuit of business income. Thus, the limitations discussed in the previous article on home mortgage interest do not apply.

If, however, the equity in the rental property is used as security for an additional loan – a second mortgage, for example – then the taxpayer must look to how the proceeds of that loan are used to determine interest deductibility. If the proceeds are used for a car loan or to finance a child’s education, for example, then the interest is nondeductible personal interest. If the proceeds are used to improve the rental property, the interest is deductible.

Suggestion – it is best that taxpayers keep personal borrowings separate from business borrowings. Mixing the two creates recordkeeping challenges and can result in disputes with the IRS.

Property taxes

Property taxes paid on rental or investment property are allowed in full both for Regular Tax purposes as well as for the Alternative Minimum Tax.

Planning idea – if you have an opportunity to pay your property tax bill either this year or next, pay it in a year when you have enough income from the property so as not to generate a rental loss. This strategy can help avoid triggering the passive activity loss limitations described below.

Example – in Florida property tax bills are mailed in October, and are payable under the following discount schedule: November – 4%, December – 3%, January – 2%, February – 1%. If you have a loss from the property in 2010 but expect to generate income in 2011, do not pay your bill in November or December – forgoing that small discount could help you avoid the loss-limitation rules.

Depreciation

Depreciation is allowed for property held for investment. The portion of the cost allocable to land is not depreciable, but for the building itself and the furniture, appliances, carpeting, etc. a depreciation deduction may be taken.

Real property (this is the legal definition of the house or other building) held for rental/investment may only be depreciated for Regular Tax purposes under the “straight-line” method, over a useful life of 27.5 years. Thus, a property with $275,000 allocated to the building would be depreciated at the rate of $10,000 per year.

Personal property (this is the legal definition of things such as furniture, appliances, carpeting and the like) may be depreciated for Regular Tax purposes under an “accelerated” method over a useful life of five years. An accelerated method allows a larger depreciation deduction in the early years, in recognition of an obsolescence or decline-in-value factor that you see in new property (cars are a good example).

For purposes of the AMT, however, personal property may be depreciated only by using a straight-line method. Thus, an AMT item will be generated in the early years if the accelerated method is used.

Planning idea – for personal property consider electing the straight-line method for Regular Tax purposes. While giving up a little tax benefit from the greater depreciation in the early years, it could mean avoiding paying the AMT.

Active/passive investment rules and the “at-risk” rules

A taxpayer who is not “active” in managing investment property may not use losses from rental property to offset other income such as salaries and wages, dividends, interest, capital gains, etc. Instead, these losses are deferred until the taxpayer either sells the property or generates passive income from this or other passive investment sources.

The at-risk rules similarly deny using these types of losses to the extent the taxpayer has acquired the investment with borrowed money and does not have personal liability on the debt.

Planning idea

If these loss limitations apply, consider the planning ideas mentioned above to minimize the losses being generated each year. They are not doing you any good anyway.

Sale of the property

Several different AMT issues can arise on the sale of rental/investment property. One is that your gain or loss may be different for the AMT than it is for Regular Tax purposes. This would be caused if different depreciation methods were used. For example, if the personal property was depreciated using an accelerated method for Regular Tax purposes, then the basis in that property when calculating gain or loss on sale would be different because the straight-line method had to be used for Alternative Minimum Tax purposes.

Gain on the sale of investment property generally is capital gain, although a portion may be treated as ordinary income depending on the accelerated depreciation method was used. Capital gains in and of themselves are not an AMT item, but nonetheless they can result in AMT being paid. This is because the AMT exemption amount is phased out for taxpayers at certain income levels, so this additional income can have the result of reducing the exemption which in turn increases taxable income for purposes of the Alternative Minimum Tax.

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4 Factors Which Impact Real Estate’s Future

Since no one has a crystal ball, there will always be, a significant degree of uncertainty, when it comes to trying to predict, and forecast, the future, and trends, when it comes to the housing market, etc! Although, past trends, are significant, and important, to understand, we must, also recognize, we live in an evolving world, and, everything, from how, houses are marketed (especially, the digital/ Internet considerations), to the extended, nearly, historically low, mortgage interest rates, differ, from what has been witnessed, and experienced, in the past. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 4 factors, which might probably, impact real estate’s future.

1. Supply and demand: One item, which has always been relevant, and still is, is the idea and concept, of Supply and Demand. When there is more supply (available houses on market, than qualified buyers), than demand (buyers, proactively, seeking a home, to purchase), home prices are stressed, and, often, fall! On the other hand, when the converse, exists, prices, generally, move upward. Housing prices, and pricing, are, generally, fluid, and, either, Buyers Markets, or Sellers Markets, often, come and go, quickly, and regularly!

2. Available funds: There are times, when lending institutions, follow, more strict guidelines, and, others, when money is looser! This creates, times, when they require higher, or lower, credit requirements, in order to loan, and finance, a house. In addition, depending on overall conditions, there may be, either, more, or fewer, qualified buyers. When money is more – readily available, lenders may require lower downpayments, which, means individuals, often, apply for a greater amount of the loan principal.

3. Job security/ optimism: The more, secure, potential buyers, are, and feel, and whether, they believe, there will be a prolonged, positive job/ employment market, often, determines, how many people, consider themselves, potential buyers. When there are fewer buyers, this creates, lower house prices, etc.

4. Local, regional, and national economic conditions: Economic conditions, often, dictate, and determine, the behavior and performance of the housing market! Although, world – wide, and national, economic conditions, are significant, regional and local factors, strengths, weaknesses, trends, etc, are often, even more relevant! When consumer confidence is high, and potential buyers, believe, positive things, will continue, the real estate market benefits!

Both, professional real estate agents, as well as homeowners, and potential buyers, benefit, when they better understand, as many relevant factors, as possible. Smart buyers and sellers, hire, someone, who will help direct them, to understand, the best courses of action, and opportunities.

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Four Creative Ideas to Make Use of Urban Real Estate

Urban real estate can be difficult to develop without a lot of financial capital. Anyone with an empty lot, however, can use any of these techniques to improve the neighborhood and make use of the property.

Urban Gardening

Urban gardening is increasingly popular, and it’s impressive how many vegetables can be produced on a single lot. With a few raised beds, it’s easy to grow greens like lettuce and arugula, plus tomatoes and larger vegetables. A single lot can provide produce for your family and friends, or it can be used as valuable real estate for community gardening. Let people in the neighborhood plant and maintain individual plots, and everyone can have an opportunity to improve the diet in their household.

Tiny House Construction

Another popular movement in America is the shift toward smaller living spaces. A tiny house can be constructed on a trailer chassis and provide more than enough space for one or two adults. Zoning laws can be a complicating factor in many cities, and some areas may prevent people from residing in a tiny house on wheels. Even if the tiny house cannot be your legal residence, you can still use the space to construct two or three houses and display them for sale. Buyers can move the homes to a trailer park or suburb with less stringent zoning laws before living inside. Unlike the construction of more conventional homes, building a tiny house doesn’t require the same range of certifications and permits.

Petting Zoo

Visiting a petting zoo is a highlight for many children, and one of the biggest advantages of being a grownup is doing whatever you want. Adults who remember loving petting zoos as kids should consider starting something similar themselves. Goats produce a fair amount of milk and meat, but there are often regulations against raising livestock inside of city limits. A collection of pets, on the other hand, is distinct from livestock because they aren’t being raised for food. A petting zoo can teach neighborhood children about different types of animals that they wouldn’t normally see in the city.

Bring Your Own Barwould be a good idea to talk with a lawyer in your area, because there would likely be

A BYOB party is a common way to limit the expense of hosting a get-together. A simple variation on that idea would be to have a place where people from the neighborhood could gather and socialize. Bars and other businesses can be expensive, but many people are happy to bring their own beverages to a park or other public space. Of course, it a lot of complicated liability issues attached to this kind of project. Owners of a particular piece of real estate often have a certain amount of liability for accidents which happen there.

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6 Keys To Real Estate Negotiations

While there are numerous reasons, it makes sense, to use the services of, a quality, licensed, real estate professional, perhaps, the most important one, is, to hire someone, with significant, negotiating skills, and abilities, in order to help you, get the best possible results. Many factors impact, whether one gets you the finest results, you seek and need/ want, including, getting the homeowner, the best possible price, in the shortest period of time, and with, a minimum of hassle/ stress. With that in mind, this article will attempt to briefly examine, consider, and discuss, 6 keys to quality, professional, real estate negotiations.

1. Know client’s needs/ priorities, etc: The Listing Presentation should not be, merely, about the agent, telling the homeowner, what services he provides, and why he would be the person, for them! Rather, the process, and discussion, should start, focused on the potential client, articulating his needs, goals, priorities, perceptions, time – frame, and reasons for selling. Then, there should be a discussion, which brings forth, the best possible marketing and sales plan, and positions the home, in a manner, which will focus on the finest, possible results. The better, client and agent, proceed, as a team, the better the potential results, and transaction period!

2. Understand other side: Quality negotiating necessitates, the ability, to put yourself, in the place, of others! This means, a professional should not, merely tell a homeowner, what he wants to hear, but, prepare him, to see things, from the perceptions of a potential, qualified buyer.

3. Listing price, offers, and counter – offers: Statistics indicate, in the vast majority of instances, the best offers are received, in the first few weeks, after a house, is listed on the real estate market. Therefore, an agent must explain, there might be a significant difference between listing, and selling prices, and, in order, to get the best offers, it’s smart, to price the house, correctly from the start, not based on emotions, but on the logic, of using, effectively and properly, a Competitive Market Analysis, of CMA. Smart, serious buyers, will make offers, which will not insult the seller, while attempting to make their best deal. Counter – offers, if serious, must seek, a meeting of the minds, and a win – win, negotiation.

4. Never weaken: Professionals must always negotiate in the best interests of their clients, and never weaken this position, by disclosing, non – material issues, which they should maintain the confidence. The key to effective negotiations is maintaining the best, possible, negotiating position!

5. Make offer: Offers and counter – offers, should be made strategically, and in, a focused manner!

6. Negotiate professionally, and make the best deal: Discipline, and focus, are necessities of quality real estate representation. You aren’t providing your client with the service, they need, and deserve, unless/ until, you provide professional negotiating skills, and make the best deal, available!

Effectively negotiating requires patience, skill, understanding, and knowledge. Clients should demand professional negotiations, from the person, they hire!

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Important Tips to Consider When Selecting a Real Estate Agent

The ample amount of online information regarding how to hire a real estate agent can be helpful for homebuyers and sellers, but finding the right one can still be a challenge. Professional agents should have the necessary skills and expertise to help find exactly what the client desires. These four qualities can clue in buyers and sellers that a real estate agent is a great choice.

Suggests Realistic Prices

When planning to sell a house, it is recommended to get listing presentations from several agencies. They will provide the market prices of comparable homes, as well as the amount of time it usually takes to sell similar properties. Working with professionals to ensure that a home is priced appropriately will make the process less time consuming and stressful.

Works Full Time

Some real estate agents connect home buyers with sellers as a part-time job; however, it is wise to choose one who works in the industry full time to get the best results. Such professionals are in a better position to provide accurate recommendations and tips as they have more experience and a deeper understanding of the industry. A full-time agent will likely spend more time scouting for a home on various listings or showing prospective buyers the house to ensure that the clients acquire or sell a property quickly and at the right price.

Charges an Appropriate Commission

In most states, the commission ranges between five and seven percent and is split between the selling and buying agents. Ask agents about commission rates when putting a home on the market or beginning a new home search. This is an ideal method to ensure that all parties understand the agreement. Also, be sure to ask about any offered rate rebates, as some companies actually pass on a percentage of the commission to the seller or buyer.

Has Experience in the Area

A buyer who is interested in purchasing a full-time residence should pick an expert who specializes in selling such properties in the area. On the other hand, people who are looking for investment properties are better off working with someone who has been facilitating such deals with other investors for years. It is also important to note that most professionals in this industry have multiple specialties.

Even if a candidate meets these four qualities, organize a face-to-face meeting with the home expert to get a full picture of his or her skills and expertise. Most professionals are more than happy to speak with potential customers to answer questions. Finding a real estate agent by following these guidelines will make the entire process of buying or selling a home far simpler.

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Quickly Selling Real Estate by Owner When Fast Cash Is Necessary

The good ole 'days were refreshing. You could put up a sign in your yard and get fast responses from interested potential buyers, or hire a listing agent and not worry about their commissions eating up your cash. Times have changed.

Real estate has become competitive. In some areas, it's a sellers market. In others, buyer's take the reins. No matter what though, there are many thousands more individuals in real estate now than there were back then. With investment seminars and flipping shows becoming more mainstream, the real estate pool is growing bigger on a daily basis.

But what if you are in a hurry to sell? Does that mean you are motivated? Let's take a look at what constitutes a motivated seller, and whether or not some of these seller techniques will work for your situation …

Motivations:

  • You are facing foreclosure

Times can be tough. You may have been let go from that job and couldn't replace the income in time. The bank sent you a letter giving you notice of a Lis Pendens (the beginning of a foreclosure, also known as a preforeclosure) You are out of options, and you don't want the foreclosure to end up destroying your credit.

  • You are behind on taxes

Just as before, this is an immediate situation that can destroy your credit. Taxes will get collected no matter what, so bad credit doesn't need to be added to the mix. Back-taxes will not only eat up your equity, but will also be attached to your future wages.

  • You have bad tenants

You are constantly receiving complaints about the tenants in one of your properties. Police are becoming a normal sight in front of the property. Perhaps the renters are turning your intended investment into a drug house. You don't want to deal with the situation and would rather take cash out of the investment and walk away.

  • You are getting divorced

Let's face it. Not many are fair in divorce proceedings. Who is keeping the house? Neither of you? So you have no choice but to sell quickly so you can avoid your soon to be ex like the plague, and get some cash for a fresh start.

  • You are retiring

Whether you are a landlord who is retiring from the business, or a couple with a home that you've had for years, you just want some cash for your equity so you can move to warmer climates and bingo.

  • You inherited real estate

You just inherited a house or multi unit property, but would rather have cash instead. You want a quick sale, and don't want to be bothered with upkeep.

  • You are an out of state owner

You thought you could manage the investment property in California while relaxing in your home in Maine. Unfortunately, good help is hard to find and the property managers all turn out to be drunks. The grass is high and you are getting letters. It's causing more headaches than it's worth.

  • You just want some extra cash

You don't have a need for the property in question and you simply want to pad your bank account.

These are all valid reasons that would make you a motivated seller. The only question I have for you in this case is … are you greedy?

A number one killer of real estate sales is an owner who has too much pride to accept that the market will not support their outlandish property valuations. The fair market value may be high, but nobody is biting. How is that quick sale going for you? The first step in selling your home quickly is acknowledging that you need to be open minded. If you can be open minded about the price of the sale, or the terms, then selling fast will be a breeze.

Where are my target buyers?

You have quite a few options. Some will take longer than others. Probably the number one way of selling quickly is seeking out a wholesaler. A wholesaler is a real estate investor who looks for discounted properties, writes an offer, then assigns the contract to one of their many cash buyers. Often, the wholesaler will have hundreds, or even thousands of investors in their contact list who are ready to buy immediately. Their investment partners have been qualified by the wholesaler with proof of funds, and will have shown the wholesaler multiple deals that they have closed in the past.

There are wholesalers that buy properties in multiple states, while other wholesalers are limited to a single state. Some of them even stick to a specific city or regional area. They are known for the use of phrases such as "we buy houses, any area, any condition". While many wholesalers stick to deeply discounted properties, others work with low equity deals where Subject2 and seller financing can be put into play. These are some of the techniques that require you to be an open-minded seller that is truly "motivated".

Another option for a quick sale is Craigslist and other classified websites. If you are going the classifieds route, you have to be prepared for the 'tire kicker' responses. There can be a lot of newbie investors, and people who are just looking that will take a lot of your time to screen out before finding a true buyer. When listing a classified ad for your home, make sure you include as many details as possible in the ad. Leaving out bedrooms, bathrooms, parking, and other features will only mean that you have to spend time discussing these things when taking the multitude of calls you will receive.

If classifieds are not your thing, you will want to find buyers through a more direct route. Go to where they hang out. There are forums such as EquityPaper, and BiggerPockets that have premium subscription options for real estate listings and other networking tools. These are forums where investors get together to discuss real estate topics daily. If you list your home in these professional member areas, or marketplaces, you can get fairly quick responses from interested buyers.

Determining property value to an investor

When listing your property, there are some things that potential buyers will want to know in addition to the standard property details. ARV (after repair value) is one of them. To find your ARV, go to Zillow, Trulia, and Redfin. On each of those websites, search for your property and write down the estimated value for each of them. Add all 3 of those values, then divide the sum by 3. The result will be your ARV.

After you have your ARV, you want to determine what the new buyer will have to put into the property in repairs. If your home is in great condition, you only need to account for simple things such as paint, appliances, and other things related to the buyer's tastes. You would multiply your square footage by $ 10 to get the total credit the buyer will want. If the property needs some updates such as flooring, new toilet, etc, then you will multiple the SF by $ 15. Broken windows, doors, etc will be $ 20. If the house is a disaster and a complete rehab, then the multiplier is $ 30. Now subtract that number from the ARV.

Whether or not the buyer is a wholesaler or a flipper, they need to make something off of the deal. This can be anywhere from $ 2,000 to $ 50,000 or more depending on the location, value, and other factors for your property. Many good wholesalers will stick to the $ 10,000 pricepoint or close to it however. So take your new ARV and subtract the buyer profit for an expectation on how much money you will be offered for the property.

Creative financing for a fast sale

Assuming that the final number from the calculations listed above was not even close to taking care of what you owe on the property, then you need to learn to be creative. Some wholesalers and flippers will still take on a property with little to no equity.

Subject 2 Financing

Subject 2 is a technique that allows the new buyers to take over your mortgage payments, and assume control over the property. Sub2 investors are looking for leverage so that they do not tie up their credit, but can obtain a rental property at the same time.

A seller may have a concern when dealing with a sub2 deal. For example, what if the buyer does not pay the mortgage and it ends up as a bad credit item for the seller? Well, there are protections that are in place for sellers during subject 2 existing financing deals.

  • A single late payment can be a deal breaker. It can be made so that in this event, the buyer is in default and they lose the property back to the seller. This single possibility is reason # 1 for it being a rare scenario. Most subject 2 investors are seasoned. They have been doing it for years, and have made millions through rentals with such deals.
  • Limitation clauses such as one requiring the buyer to refinance the property in their own name within a set time period reduces the risk even further. Let's say that in 2 years time, the buyer is required to refi. By then, they will have accumulated enough equity by paying down your loan for this to be a possibility through traditional lending methods. Even in the worse case, they can secure hard money after that time in order to leverage additional time to flip the property or get other financing.

Contract for deed, or lease option

If you aren't in a complete hurry for a bunch of cash, you can sell on a contract for deed, or a lease option. This will ensure that the buyer is responsible for upkeep, insurance, taxes, and everything else, while giving you a monthly income stream with little risk. With either technique, you are getting a fast sale. The best part is that you retain the deed to the home until the buyer's obligations are met. If they default, you can simply evict them and start over again with a new buyer. The best part is that you are earning interest with your equity at a rate you agreed on in the sale.

FSBO (for sale by owner) does not have to be hard. It can be quite lucritive, and amazingly fast when you learn to be open-minded and creative.

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Sell ‚Äč‚ÄčCommercial Real Estate Notes

Selling commercial real estate notes allows you to convert small monthly payments into an immediate lump sum of cash. A commercial real estate note is simply a loan document signed when you financed the sale of your investment property. Commercial real estate notes are available for office, retail and industrial establishments.

Commercial real estate note selling is based on certain fixed standards. The outstanding balance amount and the period of time are important for most buyers. Second in importance is the value of the property. People generally sell part of their commercial real estate notes instead of selling them as a whole. Partial sales are more profitable in most cases.

When a business involving real estate is sold, two notes are generally created, one each for the business and the real estate. The business note is similar to private mortgages and trust deeds, but it is not secured by real estate. A business note is generated when a person sells a business and decides to carry on the financing and collect regular payments from the new business owner.

A potential seller can sell commercial real estate notes as a whole, or a part of them. The best way to sell commercial real estate notes is to browse websites that display real estate note listings. Visitors to these websites range from individual buyers to companies and financial institutions. The chances of getting a better deal are very high. Real estate brokers are the natural source for selling commercial real estate notes. They can assist you in finding an ideal buyer. Advertising in local newspapers and real estate magazines also helps you sell commercial real estate notes.

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