Things Typically Left Off The Checklist When Buying Real Estate

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The act of buying real estate is complex and drawn out for good reason. The making of such a large investment should not be taken lightly, and there are a number of external considerations that should be double checked before you sign anything.

Do Your Research

Aside from the usual concerns typically associated with buying real estate (does it have the right amount of bedrooms/bathrooms? Is it in a good neighbourhood? Can I afford it?), it’s important to be sure you are actually getting what you pay for. This can be determined simply by doing your research, investigating that everything is as advertised. Before you buy, check whether there are any existing claims or easements over the property, get an independent valuation, and never be afraid to walk away if something isn’t to your liking.

The Difficulty of Easements

An easement is essentially a right of way that an individual, or sometimes the public, has over part of a particular piece of real estate. This allows them to enter your property for the purpose of passing through, either due to an inability to gain access by any other means, or for convenience purposes. An example of this would be if your property backed onto a public park or beach, there may be a pathway that encroaches on your land which pedestrians are entitled to use.

Title and Registration

The easiest way of determining whether there is an easement, or other claim as to right of ownership, on a piece of real estate is by thoroughly checking all title documents. Failing to pick up on this can cause you to pay more than what the property is worth (as an easement would devalue the land to an extent), or tie you up in the complex legal proceedings associated with a conflict as to ownership.

Seek a Second Opinion

Where possible, it is wise to obtain your own independent real estate valuation before going ahead with the purchase. In the event that the buyer does not want you to do this – beware, they may be inflating the value of the property. At the very least you should be comparing the price to other similar real estate sales in the region, and entering into negotiations accordingly. After all, knowledge is power.

Trust Your Instincts

It may feel like after such an intense process that there is no going back. The final thing on your checklist should be to make sure you still want to go through with the purchase. Buying real estate is not easily undone, so before you finalise your decision take a moment and evaluate once and for all if this is really the property for you.

Be Smart And Follow These Tips On Buying Real Estate

The main issue of real estate is the risk that a property will lose its value. Here’s some tips on this subject.

When making your offer on a house you are interested in, it is possible to ask the seller to help with closing costs or provide other financial incentives. For example, you might request that the seller buy down the rate of interest for a couple of years. Some sellers may not want to give you a price break on the home if you ask for financial perks.

Sellers will warn to you when you carry around a letter of mortgage approval with you. Waiting for approval will also cost you time during the process of buying, which might ultimately cost you dollars as well.

If you’re buying real estate, seek the guidance of a broker or real estate agent. These people have a lot of resources that you might not be able to get. One of the useful tools brokers work with is special software that sorts through MLS listings based on various types of criteria. This specialized software makes your search for a new home more efficient and ensures that you don’t miss any listings.

You can often find bargain prices on homes requiring a large number of repairs and improvements. This permits you to save your money on the purchase price, and you have time to work on your home at your own pace. You can build up equity with each and every improvement as well as get the exact home you want. Try to envision what the house might look like once all the improvements are made rather than dwelling on its current condition. The home of your dreams might be waiting for you behind an outwardly rough exterior.

A professional inspector should be hired to perform an inspection on any piece of property you are looking to buy. Though it may seem like an unnecessary expense if a buddy thinks he can do it; hiring a professional will give you an expert perspective on the quality of your potential investment. A certified professional can also be held accountable for his opinion, unlike your buddy who will leave you holding the bag.

Before you put an offer on a home, measure it yourself. Make sure the listed square footage is in compliance with public records. If these numbers do not match up closely, you should not buy the property without consulting your agent to have it fixed.

If you are interested in a rental property, make inquiries regarding who is responsible for the gardening before you sign the lease. Some rentals will make you take care of this chore, while others will include a gardener as part of the rent. Other rentals will have this service done for you, and it will be reflected in your monthly payments.

Most first-time buyers are surprised to find out how complicated purchasing a new home is. This advice should be utilized well when it’s time to purchase property.

Buying Real Estate with Leverage

“The man who has won millions at the cost of his conscience is a failure.” -BC Forbes

Leverage is a way in which the casual investor can buy real estate with very little capital. The investor
can buy real estate is that worth a lot more then the investor total assets or equity. In most cases, a real estate investor can receive loans up to 90% of the total worth of the property he wishes to buy. The investor signs a mortgage based on leverage. This is because real estate investing is extremely low risk and any real estate investment is predicted to drastically increase the wealth of the investor.

Real estate is one of the only consumer purchases which appreciates over time. Unlike cars, vacations, or computers – buying real estate is a true investment. Real estate usually doubles in value every 5 years.

Based on inflation, real estate appreciated by at least 4 % yearly. Real estate is a great long term investment and is a great way to use a little capital and turn it into a huge profit. For example if an investor wants to buy a home for $300,000 dollars, but he has almost now cash upfront he uses leverage to purchase the home.

With 7% appreciation each year, the return investment is $21,000 dollars. Now you definitely can not make that much money that quickly on the stock market. Not without taking huge risks with money you can not afford to lose.

The more money the real estate costs initially the higher the appreciation will be and the bigger profit you will get. If you were interested in investing in real estate then you should contact your financial advisor or a local real estate investor who will be able to give you more information on this exciting investment opportunity.

Leverage only works on pieces of property that appreciate. In areas where appreciation is high the more leverage an investor will be able to have. You can predict appreciation by taking a look at the history of the area where the land, house, or company space is located. By looking at other properties and what they were bought and sold at, you can have a clear picture of what your potential profit could be.

If you are interested in adding value to a home or business space, improvements are a great place to start. For example, on a residential home the installation of a carport, garage, new kitchen and bathroom, extra rooms, and hard wood floor installation are all ways in which you can increase the value of home.

For the most part home value will increase double what you paid for the home improvement. If hard wood floors cost you $5000 then the increase in your home value is going to be approximately $10,000.

Rules About Buying Real Estate Within an IRA Account

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Using an IRA for real estate investment purposes can be highly profitable, as long as you make the right choices and follow the rules. Here are some of the things that you need to consider.

Choose Your Custodial Company Carefully

As with anything else, there are good companies and some that are not so good. It is not unusual to see companies charge high fees when someone is buying real estate within an IRA account. Sure, more paperwork is involved, but really good companies do not charge higher fees for handling the paperwork. Their annual fees are based on your total account value, so they have a vested interest in “wanting” your fund to grow.

Some custodians won’t even allow you to use your IRA for real estate investment purposes. And, of course, if that option is not offered, you’ll have to transfer your fund or take a roll-over.

Learn the Rules

Roll-overs are only allowed once per year, but you may conduct several transfers. It could be costly, because custodians could charge penalties for transferring the fund in a short period of time, but if you happen to choose the “wrong” custodian, it’s nice to know that you have the option.

There are a number of rules that apply specifically to buying real estate within an IRA account. For example, you cannot use the account to buy property intended for personal or familial use. You can only use an IRA for real estate investment purposes, when the transaction will benefit your future.

Direct or indirect benefits to you or your close family members can cause the IRS to disallow the transaction, which will be accompanied by heavy taxation.

Learn Where the Market is growing

You might not think it is a good time to use an IRA for real estate investment. It’s always a good time, as long as you know where the market is “hot”. There are some areas of the market that have been mostly overlooked for nearly the last twenty years. In those areas, there are long waiting lists full of people that want an affordable home, but none are available. So, buying real estate within an IRA account can benefit you and other people, as well. You can offer affordable housing to people that deserve it.

Learn from the Mistakes of Others

It has been said that a smart investor learns from his own mistakes, but a wise investor learns from the mistakes of others. There are those who are willing to tell you about the mistakes that they have made along the way, so that you can learn how to “wisely” use your IRA for real estate investment deals. But, whether you learn from me or someone else, get more information before you begin buying real estate within an IRA account and be successful. There you have it, time to get out there and discover the options and possibilities.

Start researching and planning. Others are already doing so.

To get started on accomplishing your retirement goals, choose a real estate turnkey company to invest your self-directed IRA money in real estate. This is the best investment strategy that will allow you more flexibility considering today’s economic environment for building a secure financial future.

Isn’t your financial future worth it?

Real Estate and Wealth Building What Do You Need to Know Before Buying Real Estate

Everyone wants to get a bargain when they buy real estate. I’ve NEVER met anyone who said, “I hope can find property to buy today and pay the owners a lot more than it is worth.”

But what you may not realize is that not everyone is trying to sell their property at retail market value.

I know that may sound a little crazy when you first hear it. But the fact of the matter is that people sell real estate for a lot of different reasons. And sometimes those reasons mean that a quick sale is more important to them than selling for a high price.

The most critical factor in real estate purchases is finding the “true value” of a property.

Once you know the value of a property, you’ll know whether you are getting a bargain or a money pit.

After you’ve figured out the true value, there are other things you will need to consider:

* after repair value – what will the property value be after needed repairs?

* the comparative market analysis – how does the property compare to similar properties?

* gross rent multiplier – is this property worthy of further research and consideration?

* capitalization rate – what is the valuation of a rental property?

* vacancy and credit loss – what if you have no tenant?

* gross potential 1ncome – what will your potential fully-occupied rental income be?

* and much more…

There’s a saying in real estate, “You make your money when you buy a property, not when you sell it.” Don’t make the mistake of buying a money pit. If you educate yourself and buy correctly, you can follow the footsteps of others who have generated their fortunes by buying real estate wisely.

Remember: It’s important to know both the market value of any property you are considering as well as its’ personal value to you.

And now, I’d like to invite you to determine your own destiny. You, too, can build wealth with real estate, and I’m here to show you how.

When is the Best Time to Buy Real Estate

Think it’s not a good time to invest in real estate? Think again! A combination of factors are now in alignment, making this market one of the best in recent history for real estate investing.

  1. Investors are jumping back into the market – Yes, many investors have been on the sideline for the last year and a half, sitting on their cash and waiting for signs of life. But signs of life are appearing everywhere, and now is the time to get back in the market, while prices are still low
  2. Prices are unlikely to go any lower – Real estate prices in most areas have hit bottom, and the only direction they can go is up. The smartest investors are already grabbing good deals again. What does this all mean for real estate investors like you? More opportunities to reap huge profits.
  3. Banks want to get rid of properties… FAST – Even though foreclosure rates are slowing and the housing market is springing back to life, banks still haven’t processed all their foreclosure properties. They are looking to unload these properties – quickly!
  4. Low interest rates – Interest rates have dropped again, and may go even lower. Rates are coming back down as government programs pump more money into housing and banks try to get their cash working again.
  5. Tax credits – On November 5, 2009, congress voted to extend the first time home buyer’s credit until April 30, 2010. This is spurring a new round of buying and selling, and has created even more opportunities for investors.

The recession continues to create opportunities.

We’re still feeling the effects of a bad recession. The last year has seen record numbers of people hunkering down and waiting for the storm of economic woes to pass. And many of the pundits and self-proclaimed experts out there are telling us it’s a risky time to buy and invest in real estate.

This simply isn’t true. It’s always a good time to buy real estate, when you find the right deal. This is what the real estate tycoons know, and this is why they are in the market in a big way. And this is why the smart money is in real estate investing right now, especially now that it looks like we’re coming out of the recession.

The recession means more foreclosures.

The long unemployment lines we see on the evening news are filled with something different: highly successful people in three-piece suits that never dreamed they would end up unemployed. And what’s worse, many of them are facing foreclosure.

Financial hardship will force families from the comforts of an overpriced home into smaller, more affordable homes, town homes or apartments. This means there will be incredible opportunities in housing as some families move down the property ladder, and others move up.

This gives the investment buyer many opportunities for profit. Not only will there be more short sales, there will also be opportunities to work with homeowners who just want to get away from the stress and burden of having a home that they can no longer afford.

So when is a good time to be a real estate investor? Right now!

How to Buy Real Estate With No Money Down Today

The market is so beneficial for home buyers now everyone wants to learn how to buy real estate with no money down. And with the recent subprime lending scandal that contributed to several large financial institutions facing collapse, and in no small measure to the current financial crisis, you may think that your dream of real estate investing is gone forever.

That’s not true though, and there remain several viable options, allowing many first time homeowners to get into their own home, the first step on the real estate investing ladder, and making it possible for investors to access finance for investment properties.

Conventional Finance

Conventional finance takes into account your credit score, with the minimum threshold being in the region of 527 having been approved, as well as your debt to earnings ratio, and any equity or investments you may have to contribute, even your 401(k).

The thing to remember with conventional finance is that the better your credit score, the better the interest rate will be, since the financier will see you as a better risk option. The solution? Clean up your credit score before applying for conventional finance, or, because they don’t have a prepayment penalty, refinance once your credit score has improved.

80 / 20 Loans

An 80/20 loan option to finance your real estate investments is actually two mortgages, generally only available to property investors with a credit score of 620 or higher. The good news about this loan is that unlike conventional loans, no Private Mortgage Insurance, or PMI, is added to your monthly installments.

Grant Programs

A little known funding method for real estate investments, there are actually over a thousand grant programs, available to most income groups. Doing a little digging, and finding out if your real estate investment dreams qualify for grant financing can save you a lot of money!

Low Money Down

Aside from these no money down routes to real estate investment, there is low money down options, or 3% down loans, usually available to people with credit scores above 620, although they are available through methods other than conventional loans that make it possible for most people to qualify. If you decide to choose the low money down option, the 3% payment could be a gift, or you could save for the down payment yourself.

New Developments

Often, early stage real estate developments will sell lots for a minimal holding deposit. This lot becomes yours, with the balance of the agreed payment becoming due only months, or years, down the line. Property speculators have been known to make a lot of money buying these lots on release, and then selling them, at a tidy profit, before the full payment becomes due. The trick to this kind of real estate investing is to identify developments that will be popular, and where the demand will be high.

Real Estate Investing is For Everyone

Whatever your financial position and means, the dream of real estate investing is within reach. Speak to a financial advisor, realtor or mortgage specialist to find out what your best options for realizing your dreams.

Remember, the bottom line with real estate investing, whether you chose a no money down option or a low money down option, is that your money is being used to purchase an asset that will continue to gain value for the rest of your life.

Property is a perpetually popular investment choice, for ordinary people, as well as investment companies and the very wealthy for a reason – it’s safe, offers a tangible asset that is guaranteed to offer a return on your investment over time.

What is the Best Way to Buy Real Estate

There probably isn’t any question asked of me more often then if now is a good time to buy real estate. It’s my opinion that everyone in the investment community knows that there are more distressed assets for sale now than in recent memory. And I am not talking about only distressed real estate assets. I’m talking about distressed assets in every asset class.

The question isn’t whether or not it’s a good time to buy real estate, because absolutely it is. The questions is, “what real estate should you buy and how should you buy it?”. Are you as an individual in a position to purchase that real estate yourself, or would you be better off to go in with other people?

There are some pro’s and con’s to going in with other people. First, you may or may not have control as you would have by yourself. But that might be good if you’re not an experienced expert in acquiring, improving and disposing of real estate assets. Aligning yourself with people who are experts might just be the best thing that you can do. Further, buying something by yourself may limit you as to the size of property you can buy. The smaller properties sell for less money, but because there are more people with not very much money to invest, there’s a lot of competition for these single family homes and one to four-unit apartment building properties.

Larger properties have less competition. Consequently, they sell at much more depressed prices because there are not as many people competing for them. Groups of people who pool their money have a much better chance at organizing themselves for acquiring better properties.

The second issue is that in many cases financing is not available to many property buyers. Therefore, more cash is required. If more cash is required, the only way that that could be accomplished is through teams of investors who cooperate together.

Every investor knows that there are distressed properties in the marketplace, but they might not know where to find them. Every professional real estate expert knows exactly where the best properties are, but they don’t always know where the investors are. Matching these two groups of people is the hard part.

Joel began his career as a CPA with the prestigious firm of Price Waterhouse. During his time with the company’s Entrepreneurial Services Group, Joel immersed himself in the real estate syndication business. After reviewing hundreds of partnership agreements and preparing as many tax returns, he left Price Waterhouse in 1986 to start his own syndication firm, raising several million dollars in three short years. By 1990, Joel had built a property management firm of more than 40 employees with a portfolio exceeding $100 million. Joel continues to syndicate real estate and other assets, as well as counseling other promoters on successful syndication strategies. He is also involved in film financing and invests in early stage companies and other deals.

Buying Real Estate Taxes ow Can I Make Money Investing in Tax Property

If you’ve heard the term “buying real estate taxes,” it’s generally referring to buying tax liens or tax deeds. Tax property is a big money-maker in the current economy, but you don’t have be buying real estate taxes in the form of liens or deeds to make a lot of money. There are two especially easy ways to make money with tax property, and one doesn’t even involve property ownership.

1. Invest in tax property outside the auction. Buying real estate taxes is done by bidding on the taxes. The highest bidder wins. This is a sub-par way to get this property. Bidding creates a lot of competition and inflates the price of the property associated with the taxes. You can’t inspect the property you’re buying real estate taxes from, and you have to come up with your entire bid in cash, right then and there.

A much better time to get tax property is after the property has already been sold at tax sale. The owner can still legally sell it during the redemption period, and your competition has moved on to the next tax sale. By waiting until close to the end of the redemption period and contacting the owners directly, you’ll be buying at the most desperate time for the sellers and you can often get deeds for under $1000 at this point.

2. Go after the tax sale overage. When those bidders bid on the real estate taxes, they often bid much more than what was owed. The owners are usually due the excess money, but often move on, not realizing they can collect the difference. Then the money sits, and eventually is seized by the government.

By locating these owners, you can act as a middleman for the claim and charge up to 50% of the amount owed as your “fee”. By working on contingency, like a lawyer, you don’t charge an up front fee, but charge more in the end. Unlike a lawsuit, however, the work required to release the funds doesn’t cost much, if anything.

With the huge number of foreclosures creating millions in overage funds, this is a great way to make a lot of money from tax property without ever having to own one.

Practice either of the above alternatives to buying real estate taxes, and you’ll have your business going in no time. If you work hard, your first year could be a six-figure year!

The current foreclosure rate won’t last forever – take advantage of it now.

How To Buy Real Estate Notes

If you are new to property investing and are looking for how to buy real estate notes, there are two very specific ways to go about it. There are a multitude of real estate note listings you can choose from, and there are brokers who specialize in both buying and selling them.

What a broker does is what the name implies. He or she brokers a deal between you and the seller of the note. Using a broker is recommended if you are new to this as there are many legalities that need to be taken into consideration that a novice will not know of. A broker receives a fee for the initial meeting of the buyer and seller, and he or she receives a fee for drawing up all the necessary paperwork.

These fees are nominal and they are well worth it when you consider the price you will most likely be paying for the note itself. People sell off their notes for the quick cash that it offers. This translates to an awfully good deal for the buyers because they are getting real estate for a bargain price.

The reasons why people sell off their property in this manner are almost too numerous to mention, but they are all legitimate reasons. Brokers can also arrange to find these notes for you as many of them have connections in the business. When you find a good broker and stay with him or her for a long period of time, they will get to know your needs in this area and get you good deal really quick.

When you get a good deal of experience in buying and selling notes, then you can just pore over the many listings that there are available. With the real estate market being what it is, these listing are going to be updated quite frequently. Depending on the area that you are looking for the notes in, it may very well be a daily update.

Being a major player in this game will require that you eventually go nationwide. Some people and companies do this all around the world. If you do, then you will want to focus your search on the major metropolitan areas. Even if you are looking for real estate in small towns, the listing will more than likely show up in the nearest major city.

If you know how to fill out the needed paperwork yourself, there will be no need for a broker unless the seller wants one. That is discretionary on their part and doesn’t really affect what you need to do on your end. If this is the case, then you would obviously be dealing with the seller’s broker more than the seller.

Once you get started searching for notes and learn where the best listings and brokers are, buying them becomes a breeze and will start becoming profitable for you. This really is a good way to make money because more people these days are looking for a quick cash out from their properties.