Short Sale Real Estate Investing
May 31, 2008
Short sale investing involves buying a piece of property from a lender for an amount less than the balance owed on the property. Basically, there are two types of short sale realty investments. The first type refers to when you purchase a property, foreclosed by a lender listed with a realtor. In this type, you simply offer the lender, who has now become the owner on record, less than what is owed on the property. In this case, you can offer less than the balance that was due on the foreclosure. Such a short sale, realty investment calls for a good relationship with the realtor. The other type involves negotiating directly with the lender of a motivated seller. It is essential to be determined in the negotiation process, mainly in reaching the right person at the lender Real Estate Owned (REO) department and then to get the price of your choice.
The key to be successful in the first kind of short sale, real estate investment lies in forging a relationship with a reliable local realtor. You can always search for one or two realty offices in your area that handle majority foreclosures and short sale, realty investments. In order to build your relationship with the realtors, you need to inform them about your ability to buy. Make sure you follow through, once you make the offer. It will help the agent know that you are the investor to turn to, whenever he has a deal regarding short sale, realty investment.
There are three fundamental steps that can be incorporated, in order to be successful with short sale, real estate investments. They are as follows:
. Search for the properties: The first step to success in a short sale real estate investment is to search for properties. This can be accomplished through regular realty advertisements and looking for distressed or overgrown property. It helps you get calls from sellers close to foreclosure.
. Get the seller on your side: The second best way to earn success in this type of investment is to get the seller on your side. In order to do so, you need to listen, communicate and empathize openly and honestly with the seller, regarding your plans. Besides, you will also be required to answer all questions and speak to the concerned parties frequently, so as to keep the channels of communication open. It helps to keep doubts out of the picture.
. Find the right person at the lender to speak with: Though it is not easy to find a reliable person, but this step is essential. More often than not, the first person you speak to will not necessarily be the right person and you may require cross certain hurdles to finally reach the person with some authority. You would certainly require patience in order to get the job done.
Short sale realty investment is considered to be lucrative for building wealth too. Owing to the increase in foreclosures across the country, the trend of learning and applying short sale realty investment skills is likely to continue.
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Real Estate Investing Avoid Buying a Unique Home in Preforeclosure Even From a Nice Family
May 31, 2008
Early in my career as a real estate investor, I got a call from a really nice family about to lose their home to foreclosure. Located in the suburbs, the house looked pretty much like every other house in the middle-income neighborhood on the outside. On the inside, though, the house was very unusual.
You see, the husband and wife were theater majors in college and they remodeled the lower level of their home to look like the set of a movie. The home gym looked like the set of Million Dollar Baby. The playroom looked like the set of Home Alone. And the home theater (with seating for six and a big screen TV) was painted entirely black, floor, walls, and ceiling.
The parents home-schooled all four children, so the lower level also housed a study room with computers and desks. The two-car garage was fully carpeted because the youngest children liked to play there during the day.
The house was a full time home, school, gym and theater for this family. The parents thought they would live there forever - or at least until the last of their children moved away. But sadly, they missed a couple of mortgage payments and found it impossible to catch up. They called me in hopes of selling their house fast so they could save their credit.
When I did my due diligence, I learned that homes in this neighborhood did not stay on the market long. Close to the public schools, it was a quiet neighborhood with lots of green space. Add to that: the neighborhood homeowners association often held potluck dinners and street parties and were the envy of the surrounding community.
What could be better? I thought. A great one-of-a-kind house in a great neighborhood at a great price.
I bought the house with about 20% equity, no money out of my pocket, and cash back at closing. I immediately put the house on the market. At the time I thought the uniqueness of the property would be a great selling point. I thought it would stand out as “one of a kind” and families would fight to live there.
Boy, was I wrong.
Most people who looked at the house thought the unique features of the lower level were just plain weird.
I marketed the house specifically to families with children who I thought would love the spacious gym, the play room, the home theater, and the study rooms as much as the family who had put so much of their personal stamp on them. But no one else seemed to see the beauty of it.
Only the strangeness of it.
The house sat on the market five months without a decent offer. I watched my profit dwindle drastically over six months while paying holding costs, utilities, and lawn care.
Then I made a hard decision. I hired a remodeler to transform the lower level into an ordinary looking basement with smooth white walls, dropped ceilings and beige carpet. I watched even more of my profit evaporate.
But I quickly found a buyer.
Lesson to be learned: Three bedroom, two bath, bread-and-butter houses are the best investment properties for a reason. Everyone can imagine living in an ordinary house. Not everyone can see themselves living in a really unique one.
Negotiating a Real Estate Purchase Top 6 Tips
May 30, 2008
Negotiating may be the most critical part of the real estate purchase process. Being able to strike an advantageous deal with the seller virtually guarantees your profit. Negotiating is both an art and a skill that you will master with time and practice. Here are six tips to get you started.
Know the Property
You should know as much as possible about the real estate purchase you’re about to make. This knowledge comes from researching the neighborhood and knowing how the property compares to others around it.
Know the Seller
The best way to learn more about the seller is to listen. People will be more likely to volunteer information if you give them a chance to talk. But if you aren’t finding out what you need to know, ask questions. Understanding the seller’s situation and their possible flexibility will help you negotiate financing options as well as price.
You also need to find out what the seller’s motivations are. Why are they selling? Understanding the reasons behind the sale can help you structure a deal that meets their needs and yours.
Think Win-Win
The best real estate purchase deals result from negotiations that seek to provide something to both parties. There are certain things you want out of the deal and certain things the seller wants in order to sell. Every real estate purchase has several facets. If you can give the seller something they want, that will increase your chance of getting something you want.
Negotiate Terms, Not Just Price
Price is not your only negotiating point. Sometimes the terms of the deal are more important to the seller than the price. Once again, if you can address the seller’s needs in a real estate purchase, your offer will be more persuasive.
Maintain Control
If the seller counters your offer with an offer of his own, don’t let things spiral out of control. Prepare for counter offers by starting your negotiations low. Don’t focus on price, but use other aspects of the deal in your negotiations. Don’t re-negotiate things that have already been decided.
Be Prepared to Move On
Don’t walk away from an attractive real estate purchase without offering your best deal, but know when it’s time to walk away. There will always be another property.
As you can see from these tips, negotiating a real estate purchase is more than two people in a room. Negotiations are won or lost in the preparation. Achieving the outcome you desire depends on your research and mental preparation.
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To Win Or To Fail Tips For Successful Trading
May 30, 2008
Investing money entails a great amount of risk. Like they always say, “It takes money, to make money.”
Money doesn’t grow on trees, you know.
But it doesn’t necessarily mean that to achieve good profits, one has to invest heavily and risk greatly. That is not the case all the time. A well-informed investor can make sound decisions that will help him earn considerable profits with minimal loss.
The first lesson a successful businessman will tell you is that any endeavor carries potential risk along with potential gain. The trick is to determine if the profit is worth the risk. If it is, it is now time to consider if you are willing to take the risk.
So before you start trading, ask yourself this:
a.) What are your achievement goals?
b.) Are your investments going to lose money?
c.) Are you willing to take bigger risks for better profits?
Setting your achievement goals will allow you to know how long you’re willing to wait for a stock to gain profit. It will also give you a limit on how much you’re willing to lose. It will also give you an idea on how to go about investing in a stock.
If you choose a low-return investment, it will mean that either you increase the amount you invest or increase the length of time invested.
After you have made up your mind with the above questions, there are some tips you may want to use to evaluate your trading philosophy.
a.) When to invest. Ordinarily, you want to trade all the time. You get excited when you see shares go up or when they fall down. You make decisions based on a whim and factors that don’t usually affect a stock in the long run. The best traders wait 50% of the time waiting and studying how a stock performs. They do not trade every day and all the time.
b.) Discipline yourself. You are so excited to make trades that you trade on a stock that looks half-decent enough rather than waiting for the best stock to come along.
c.) Small moves big payoffs. Don’t waste time dabbling in so many small stocks with minimal profit. Watch out for big stocks and concentrate on a few.
d.) Do not be too emotional. Making money is exciting. Losing money can get very depressing. Detach yourself from your emotions; otherwise, you won’t be able to look at things objectively.
Trading stocks is a high-risk, high-profit venture. Dabbling in the stock market half-cocked is suicide. Take your time. Study, research and be patient. After all, it’s your money, so it’s your loss.
Find out more about stocks and shares at http://stocksandshares.us
No Money Down The Benefits of Real Estate Joint Ventures
May 29, 2008
Investors are attracted to the real estate market because of the incredible potential it has to multiply their money. Appreciation rates of properties are very high and almost all property deals guarantee you certain amount of profit.
One of main reasons why many others are not able to invest in real estate is that they do not have sufficient cash to pay the down payment for the purchase. However, there are plenty of financial schemes with ‘No Money Down’ option available for small investors to enable them to sustain the costs of purchasing property.
New investors can consider joint ventures, wherein one person finances the project and the other does the actual work. As a result, the one who does all the work has to put no money down for upfront costs. If you are new to the real estate game, and do not have enough funds to bear the upfront costs, you can opt for a joint venture. It is legally binding, and both parties agree upon a certain percent of profit each would receive after the project is completed.
It is a mutually beneficial partnership, wherein profits are divided according to individual contribution in terms of labor and money. The joint agreement is drawn to provide legal protection to the concerned parties in case the project fails.
A joint venture is beneficial if you are in one of the following situations:
1. When you lack borrowing capacity
If you have some money to pay the down payment, but are not eligible for a loan, joint venture would be beneficial for you. You can enter into a partnership with someone who has the necessary funds or is eligible for a loan to support your project.
2. When you do not have liquid cash or equity
You may be eligible for a loan due to your income or credit score. However, you may not have the necessary cash required to pay for the down payment of property purchase. In such a case, you can enter into a partnership with a person who can take care of the down payment.
With literally ‘no money down’ towards down payment, you can begin your dream project. There are instances wherein the seller carried a certain amount of the loan as a second mortgage. In exchange, you are required to give him a certain percent of the profits as decided in the agreement.
3. You have the necessary skills
There are investors who have the expertise to carry out a project or who have skills required for renovation. They may lack the funds for the project or may not have the inclination to invest money in the project. If you are one of those, then you can find a partner who has the money but lacks the time and expertise to complete the project.
It is important to draw an agreement carefully including all minute details to avoid any form of dispute in future.
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Private Moneylenders The Real Estate Investors Secret Weapon
May 29, 2008
Real estate investments are very lucrative and offer a variety of other benefits such as tax deductibles and asset appreciation. However, it is beyond the financial means of most real estate investors to pay the cost of their property up front. Such investors have to obtain a home loan from private lenders or financial institutions to bear the cost of their new home.
It is very common for real estate investors to procure finance in a range of eighty to hundred percent of the property value. The homeowner is required to make monthly payments to the financial company for an agreed period.
Private moneylenders or ‘hard’ moneylenders are generally third party lenders that provide the necessary funds to buy or renovate your home. In exchange, the homeowner agrees to pay a certain percentage of the profits earned after selling a property after renovation. This form of lending is mutually beneficial to both parties. It guarantees lenders better returns for their money, as the rate of interest is quite high.
The loans, often short-term loans, are especially beneficial to real estate investors who have a financial need for a very short while or who have been turned down by other financial institutions due to poor credit score. Another advantage of obtaining loans from private moneylenders is that they offer fast loans unlike many other financial companies and banks that offer loans after following a long internal procedure for loan sanctions. As a result, investors are drawn to such lenders owing to the flexibility and convenience offered by private moneylenders.
Typically, private moneylenders are most eager to work with people who have a promising venture. If a venture is good enough, they are willing to overlook their credit records. This form of financing can prove to be extremely expensive as such loans attract very high interest rates as compared to other banking and financial institutions. Another difficulty is that such lenders are quite hard to locate as compared to other traditional lenders.
People, who have surplus liquid cash and are on the lookout for ways to multiply this amount in a short period of time, become private moneylenders to provide funds to borrowers who are in need of quick cash.
However, it should be noted that all private moneylenders differ in their dealings and the amount of funds provided and the repayment terms may greatly differ. They may charge an interest in the range of 12% to 18% and have a well-drafted loan agreement to secure their investment. They may finance 50% to 75% of the home value post renovation for a period ranging from six months to five years.
The funds can be held in trust or escrowed until the renovation project is fully completed.
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FOREX Accounts One Size Does Not Fit All
May 28, 2008
Once you have decided that you have the proper mindset and are ready to start investing on the FOREX exchange you are ready for the next step. That step is to select the type of FOREX account you want to open. You should make this decision before you pick a broker to work with. Some brokerage companies specialize in one type of account or another. The type of account you choose could affect your broker choice.
You will find that most brokers offer several types of accounts. The primary differences between the account types will be margin requirements, minimum deposit and lot sizes. You will need to consider your trading strategy and financial resources to select the right account. The three most common accounts are mini accounts, standard accounts and managed accounts.
The most popular account with new investors is the mini account. One of the factors that make the mini account so popular with beginners is that it has the lowest minimum deposit requirements. The minimum deposit requirements for a mini account are dependent on the broker, some will allow you to open an account with only a $100 deposit. Most mini accounts will deal with lot sizes as small as 10 thousand currency units. Mini accounts may provide as much as a 200 to 1 margin rate and only require $50 per lot to trade. This means that with $50 you will be able to control $10,000 worth of currency.
Most mini accounts have a built in safeguard because they are aimed at beginning investors. This is usually referred to as “Guaranteed Limited Risk”; this guarantees that you will never lose more than your initial investment in a trade. In the case where the currency drops and the broker would need to make a margin call to keep your position open they automatically close the trade. This will cause you to lose the money you invested into this trade but you will not end up owing the broker money. The downside to this is that if the currency rebounds you will no longer have a position that you could profit from.
A standard account is another common account that has higher deposit requirements than a mini account. The usual investment to open a standard account with most brokers is $2,000. These accounts usually trade in lots of 100,000 units. With a standard account you will still usually have a margin ration of 200 to 1. To purchase a normal lot of 100,000 thousand units then will require a deposit of $500 from you. It is still pretty common with a standard account to have the “Guaranteed Limited Risk” safeguard included.
Some brokers will also offer what is called a “Managed Account”. With a managed account you will not be actively trading. A professional trader will be assigned to your account and will use your money to make trades. This requires a much lower investment of time and knowledge from you. Managed accounts usually have a higher minimum requirement amount, often of $10,000 or more.
You will want to consider your knowledge, financial situation and risk tolerance when deciding which account type will work best for you.
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To Win Or To Fail Tips For Successful Trading
May 28, 2008
Investing money entails a great amount of risk. Like they always say, “It takes money, to make money.”
Money doesn’t grow on trees, you know.
But it doesn’t necessarily mean that to achieve good profits, one has to invest heavily and risk greatly. That is not the case all the time. A well-informed investor can make sound decisions that will help him earn considerable profits with minimal loss.
The first lesson a successful businessman will tell you is that any endeavor carries potential risk along with potential gain. The trick is to determine if the profit is worth the risk. If it is, it is now time to consider if you are willing to take the risk.
So before you start trading, ask yourself this:
a.) What are your achievement goals?
b.) Are your investments going to lose money?
c.) Are you willing to take bigger risks for better profits?
Setting your achievement goals will allow you to know how long you’re willing to wait for a stock to gain profit. It will also give you a limit on how much you’re willing to lose. It will also give you an idea on how to go about investing in a stock.
If you choose a low-return investment, it will mean that either you increase the amount you invest or increase the length of time invested.
After you have made up your mind with the above questions, there are some tips you may want to use to evaluate your trading philosophy.
a.) When to invest. Ordinarily, you want to trade all the time. You get excited when you see shares go up or when they fall down. You make decisions based on a whim and factors that don’t usually affect a stock in the long run. The best traders wait 50% of the time waiting and studying how a stock performs. They do not trade every day and all the time.
b.) Discipline yourself. You are so excited to make trades that you trade on a stock that looks half-decent enough rather than waiting for the best stock to come along.
c.) Small moves big payoffs. Don’t waste time dabbling in so many small stocks with minimal profit. Watch out for big stocks and concentrate on a few.
d.) Do not be too emotional. Making money is exciting. Losing money can get very depressing. Detach yourself from your emotions; otherwise, you won’t be able to look at things objectively.
Trading stocks is a high-risk, high-profit venture. Dabbling in the stock market half-cocked is suicide. Take your time. Study, research and be patient. After all, it’s your money, so it’s your loss.
Find out more about stocks and shares at http://stocksandshares.us
Foreclosed HomeDiscover The Truth About Foreclosed Homes
May 28, 2008
Foreclosed houses are houses that have been closed by an individual or a group of individuals before another person owns them. Such situations arise when mortgagers either dont bother to take their house back or are unable to release it because of financial adversities. As a result mortgaging companies takes over the charge of the house and offers to resale it.
You might have come across property news and newspaper advertisements, local magazines or even the Internet having information about foreclosed homes. Even the real estate agents have foreclosed homes offers in plenty. To know more about foreclosed homes you can talk to the real estate agents or even the assessors. Plan a visit to the local courthouse would give you a rough idea about the various deals and how their dealing process. Similarly, you can also attend the foreclosure home auctions to know more about the auction options and the risks involved.
Planning to buy a foreclosed home is one of the most significant financial decisions an individual has to take. Purchasing foreclosed homes includes bargaining the foreclosed sale, acquiring mortgage, getting the title insurance and finishing the home purchase.
Before buying a foreclosed house you should be well informed about the various options available. This applies especially to the first time foreclosed homebuyers who are new to the foreclosed property transactions. As mentioned before, consult a reputable title agent or attorney before buying a home.
Many people harbor wrong notions that foreclosed homes are basically shabby homes in rundown neighborhoods. However, its only people who are actually investing in foreclosed properties that know that this notion is incorrect. Foreclosed homes come in a variety of size and shapes, consisting of large, beautiful new homes in the most sought after neighborhoods.
You are in for a terrific amount of savings, if you are buying a foreclosed house. Strange as it sounds, this is true. By buying homes at 10% to 60% below the original market value simplifies making monthly payments and generates huge savings on the whole. In some circumstances, individuals can buy homes with very less or no deposits, even if they have a bad credit history. Foreclosure pricing is also known for building equity instantly.
Today, you might find more opportunities for buying foreclosures than ever before. To some extent this is because of the high debt rates getting more people into financial trouble, and partially because lenders are giving mortgages to higher-risk borrowers. However, the good news is that together these factors are increasing loan default rates. People who plan to buy foreclosed homes can pick and choose the home they want at a great price. Many of these homes are not advertised, as they are not profitable for the real estate agents.
Foreclosed homes can prove to be of good value for the right person who is willing to consider all the options available. If you are a buyer of foreclosed homes, keep in mind that these houses are not necessarily vacant. Till mortgage companies hand over the house to the buyer, the original residents still own it. Basically, it depends on the buyer decision to keep the original owners as tenants or ask them to vacate the house. Furthermore, furnishing or renovation of the house is not the responsibility of the original buyers.
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Real Estate Investing Avoid Buying a Unique Home in Preforeclosure Even From a Nice Family
May 27, 2008
Early in my career as a real estate investor, I got a call from a really nice family about to lose their home to foreclosure. Located in the suburbs, the house looked pretty much like every other house in the middle-income neighborhood on the outside. On the inside, though, the house was very unusual.
You see, the husband and wife were theater majors in college and they remodeled the lower level of their home to look like the set of a movie. The home gym looked like the set of Million Dollar Baby. The playroom looked like the set of Home Alone. And the home theater (with seating for six and a big screen TV) was painted entirely black, floor, walls, and ceiling.
The parents home-schooled all four children, so the lower level also housed a study room with computers and desks. The two-car garage was fully carpeted because the youngest children liked to play there during the day.
The house was a full time home, school, gym and theater for this family. The parents thought they would live there forever - or at least until the last of their children moved away. But sadly, they missed a couple of mortgage payments and found it impossible to catch up. They called me in hopes of selling their house fast so they could save their credit.
When I did my due diligence, I learned that homes in this neighborhood did not stay on the market long. Close to the public schools, it was a quiet neighborhood with lots of green space. Add to that: the neighborhood homeowners association often held potluck dinners and street parties and were the envy of the surrounding community.
What could be better? I thought. A great one-of-a-kind house in a great neighborhood at a great price.
I bought the house with about 20% equity, no money out of my pocket, and cash back at closing. I immediately put the house on the market. At the time I thought the uniqueness of the property would be a great selling point. I thought it would stand out as “one of a kind” and families would fight to live there.
Boy, was I wrong.
Most people who looked at the house thought the unique features of the lower level were just plain weird.
I marketed the house specifically to families with children who I thought would love the spacious gym, the play room, the home theater, and the study rooms as much as the family who had put so much of their personal stamp on them. But no one else seemed to see the beauty of it.
Only the strangeness of it.
The house sat on the market five months without a decent offer. I watched my profit dwindle drastically over six months while paying holding costs, utilities, and lawn care.
Then I made a hard decision. I hired a remodeler to transform the lower level into an ordinary looking basement with smooth white walls, dropped ceilings and beige carpet. I watched even more of my profit evaporate.
But I quickly found a buyer.
Lesson to be learned: Three bedroom, two bath, bread-and-butter houses are the best investment properties for a reason. Everyone can imagine living in an ordinary house. Not everyone can see themselves living in a really unique one.
