Real estate terms from condominiums to deeds of trust

When buying or selling a property, it always helps to have a basic understanding of real estate terms. In this on going series of articles, we take a look at definitions starting with “condominium.” 1) Condominium - A type of ownership in real property where all of the owners in a collection of properties jointly own everything except the interior of each property. Accordingly, the jointly area is run by a homeowner’s association, which can assess fees to the owners for improvements, etc. 2) Contract, or Sales Contract, or Contract of Purchase and Sale – the agreement between buyer and seller. In most jurisdictions it must be in writing in order to be enforceable. It covers such things as the identity of the property, the purchase price, any conditions of the sale, the settlement date or escrow period, when the buyer will occupy the property, etc. 3) Contract for Deed – a written document which provides that Deed does not pass to the buyer until the final payment has been made. In the event of default by the buyer, the property reverts to the seller. (One sees these occasionally. I’ve seen them when an owner was financing the sale of raw land for a buyer.) 4) Deposit, or Good Faith Deposit – an amount of money tendered by the buyer at the time a contract offer is made on real property. The contract spells out who holds it, and circumstances under which the seller gets it, and circumstances under which it’s returned to the buyer. Typically, the seller gets it as part of the purchase price at settlement, or as liquidated damages if the buyer defaults. The buyer usually gets it back if a condition of settlement is not met. 5) Deed – the written document which conveys title to real property. Some states are “record” states and ownership is defined by the deed’s being recorded at the courthouse in which the property lies. 6) Deed of Trust – the document which allows a third party to act for the lender should the lender need to forclose on real property used as collateral for a loan. As you can image, there are many real estate terms for which you have a general understanding. In our next article, we continue with the terms starting with “Easement.”

Flipping houses is like being gay

: In the 21st century, everyone knows the word "gay" refers to people that are homosexual, but back in the 1950s, the meaning was contested. The alternate definition was "full of joy and mirth." Can you imagine the confusion? Tell one group of people that you're "gay" and they'll assume you're happy. Tell another group and they'll reach for a cross and a can of gasoline. Right now, "flipping houses" creates the same effect. It has two definitions: 1) The process of *legally* selling a property for a fast profit, sometimes using little or none of your own money 2) The process of *illegally* selling property for an artificially inflated value, often involving a group of criminal appraisers, loan officers, and investors Do you see the similarity with "gay?" One definition is upbeat and accepted, while the other is (currently) unacceptable and downright scary. The majority of the world understands "flipping" as an illegal activity, where a small minority are trying to redefine it as a legitimate real estate investment strategy. The reason: good old Uncle Sam. When the government talks about flipping, they use the second definition. According to the Department of Housing and Urban Development, flipping occurs when: A recently acquired property is resold for a considerable profit with an artificially inflated value Being closely related to the government, attorneys, accountants, and the press are hanging on to that definition. So, the next time you visit them, don't be surprised if they "flip out" (pun intended) at your strategy. The exact opposite is true with real estate investors. You can buy a house and then "flip" it to another investor for a small but fast profit, allowing you to reinvest your money and repeat the process. You can also assign contracts for a fee (another form of flipping), allowing another buyer to close on the property in your place. Which definition will win? If "flipping houses" follows the etymology of "gay," the more acceptable definition will come out ahead. Who knows? Maybe they'll make a movie about it.

Foreclosure loans may save your home from foreclosure

Foreclosure loans are available to people that are facing a home foreclosure. If you are having a financial hardship and the bills and mortgage payment are getting behind, you still may have some hope with a foreclosure loan. There are some options to protect your home from foreclosure, and places that offer home foreclosure help by providing valuable information and resources that may be able to help prevent foreclosure. Foreclosure loans offer borrowers a second chance to avoid foreclosure on your home. Foreclosure loan companies often look at personal finances and credit worthiness of each individual situation to determine if you qualify for a home foreclosure loan. Taking the time to provide the information that a home foreclosure loan requires is usually time well spent. If you find that, a home foreclosure loan is not suitable option there are still other ways to prevent foreclosure of your property. Investigate all the options that you have available before you let the bank take your home. Reduce your expense, pick up another job or somehow create another source of income. This may be all that you need to protect your home and avoid foreclosure. Reducing your expenses is a priority reduce the all the unnecessary monthly expenses. Cut the cable bill, cancel memberships and shop with coupons reducing your monthly expenses by only a few hundred dollars a month may be the answer to getting back on track. If you are facing a home foreclosure there are web sites that offer home foreclosure help, use them. They offer valuable information and resources to people that are facing a home foreclosure.

Real estate success

: Real estate success? It happens by way of the many things you repeatedly do right, and it is your habits that ensure they get done. Here are some habits to develop for your real estate investing success. Ask for people's names, and tell them yours. People are your most valuable resource in real estate investing. The more you know, the more likely you are to find good properties, or buyers for your good properties. Get to know the right people too. Start with a real estate agent that gets many listings of the type you are interested in. Wouldn't it be nice if he called you first? Think numbers. Think people first, but know the relevant numbers. Ideally, when you look at a rental property, for example, you should be thinking about the income, the expenses, and the cap rate. You should be imagining how certain changes would allow you to raise the income, and what that would do to the value. Having a "feeling" about a property, and ignoring the numbers, gets investors into trouble. Carry supplies. Always have at least business cards, pen and paper on you. You never know when you might see a property for sale, or hear about one. Mention that you invest in real estate, and sellers, buyers and other investors suddenly appear with information, opinions, and sometimes deals. Be ready. Think risk reduction. Put those inspection, financing, and other contingency clauses in the offer, so you will get your deposit back when a deal falls through. Know your exit strategy before you buy. Find value by comparables, not "hunches." Buy properties through your corporation or LLC. Always look for ways to reduce the risks. Real Estate Success Is Found In Action Set action-oriented goals. Get in the habit of taking regular steps towards real estate success. Require yourself to look at a certain number of properties, and maybe even to write a certain number of offers each month. Set at least minimum goals for all sorts of little steps, like making five phone calls per week, checking online for new listings twice per week, and so on. Action creates momentum, and repeated action creates habits. Good habits lead to success. Finally, learning more about investing from books, magazines and even tapes or CDs is a great idea. Just be sure to spend as much time doing something as reading about it. Some of us let our fascination and enjoyment of reading about investing get in the way of actually investing, and of our real estate success.

Computer program enables investors to analyze property

The flourishing real estate market has resulted in a significant increase in first-time real estate investors. With limited experience in real estate, it can be a risky move to buy property without knowing for certain what the return on the initial investment would be. Thousands of investors have been using the Real Estate Acquisition Program, also called REAP, to assess the risks in their investments. Each candidate property can be entered in less than five minutes by inputting the purchase, loan and rental specifics. The inclusion of depreciation and taxes will show the huge effect on cash flow - particularly post-tax profits where investor insight becomes very powerful. Additionally, the appreciation variables, capital growth and inflation allow the user to see a long-term economic picture. The software then evaluates the property economics, cash flow potential, debt to equity and pre/post-tax implications. The investment viability is revealed in a series of one-page reports. Created by Dolf de Roos, a real estate investor with 30 years of property-buying decisions under his belt, the REAP software assists property investors in quickly analyzing a property to determine whether it is a good deal or not. "Knowing what your return will be on a property before you put time and money into it can save an investor countless headaches," said de Roos. REAP, with its editable fields in a fully relational database, has a built-in online upload feature, enabling the user to download periodic updates, which are free with the initial license. It is beneficial for any real estate investor, novice or veteran.

Words that will save you big time in rehab real estate

Power Tip! Have you ever wanted just one phrase that you could say at the right time, and it save you hundreds, or thousands of dollars? When it comes to getting the best price from contractors, plumbers, electricians, HVAC techs, you name it, there is a simple phrase that often works like magic in reducing your costs. These specialties are always competing for work. However, if you ask any of them they will likely tell you that they are extremely busy! They might be. They might not. There's a game going on here. They need to appear very busy so their services are in demand and support the prices they will ask for. At the same time, you need to appear to be willing and able to get prices from many sources. (Don't just make it appear that way, get multiple bids whenever it's practical!) It's a balance that must be struck. The good part is that now you know the game...so play both sides since you know what the other side's play. How to turn the tables * Have an idea of what the job will cost. Just a ball park idea will do. * If you are told something that you think it high, ask why so high. There might be more to it than you know. The reason for the high price might be reasonable. Discuss alternatives. (For example, if you electrician points out that the breakers you need are especially expensive, ask if he's got any used breakers that are still in good shape.) * Then use the magic phrase... Here it is... "Is that your final and best price?" Very often the person you are talking to will squirm a bit at this point. They are having to think... "Is my price fair?" "Am I over pricing something here?" "Can I save this customer some money?" "Does the customer know something I don't?" While your contractor/laborer thinks about this, don't say a word. I've experienced many reactions from "That's the best I can do" to "If you give me the job, I'll knock it down to..." Often I've gotten a range of options that could save me money. More often than not, it saves my money! It works like magic if: * They understand that they aren't your sole source of the service they provide * They know you are willing to wait for the best price * They know you aren't a push over * They know you might be a source of future income But, it WILL work like magic when properly applied. In my own experience, I can point to many thousands of dollars of savings using this simple question. We like to save money by keeping prices for services reasonable, true enough. At the same time, I advocate and approach of "don't let anyone get hurt." If you award a job to someone and it winds up costing them more than expected, I help that person out. I don't want someone to lose money on a job and leave with a bad taste in their mouth and never want to do work for me again. Be aware of when someone gets hurt. That said, watch out for those that claim to get hurt with each job. Try out that phrase today. It works in many situations...not just rehab real estate, but in just about any competitive environment.

Why investing in hud home

: I get asked all the time by new real estate investors if investing in hud homes is a good strategy. I will be recap in this article what I tell them…. The increased demand drives up the price and new investors tend to get any and will buy based on emotion instead of logic because they “just want to get their first deal”. If you pay too much for a property, you will lose your shirt on the deal. That’s why it important to not overpay for the property because you make your money on a property on the day you buy, not the day you sell. This is why it’s important to have the right real estate investing training so you know how to spot the good deals from the bad and not overpay for a property. Your first deal can bankrupt if you don’t structure it the right way. I see this all the time in my real estate investment club. The guys that don’t take the time to invest in their education are soon out of business because they try and figure it out on their own and fail. Short Sales are a great way to guarantee that you won’t overpay for properties. If you are wondering “what is a short sale “or are wondering what the “definition of a short sale is“here you go. A Short Sale is when the lender accepts less than what is owed on a mortgage on home foreclosures. All of The deals are no money down. We don’t give the sellers any money when we get the deed to their house. The only thing you have to pay when you get a deal is the cost of the notary and recording fee when you record your deed. That’s a maximum of $100. Now my acquisitions manager is a notary so I don’t pay any notary fees. If you don’t put any money down on the house, you aren’t putting any money at risk. You don’t need good credit to do short sale deals. You don’t need to go get a mortgage when you do short sales deals. If you don’t need to use your credit, you aren’t putting your credit at risk. You fund the deal the way you structure the transaction. You fund the deal by either: The ability to own houses without having to make monthly mortgage payments. There are no monthly payments to make for short sale deals. The houses are either in foreclosure or about to be in foreclosure. You don’t need to make any payments therefore you aren’t putting any money at risking making monthly payments. Preforeclosures and Short Sales are extremely easy to find right now. There aren’t enough investors out there to handle all of the deals in the market. That’s why I’m on a mission to equip you with all of the resources you need so you can go out there and help all of these struggling homeowners and make a lot of money while doing it. You may here some real estate speakers say to stay away from foreclosures because there is too much competition. Well that was then and this is now. They are teaching old information because they are not currently practicing what they preach. I am actively buying and selling foreclosures in my own backyard and I know what works and what doesn’t work. And I have to tell you there is no competition for preforeclosure and short sales now because there are so many of them. Short Sales are easy to get because it doesn’t require you to do a lot of negotiating with the seller because they know they don’t have any equity and they’re just looking for a way out. You are their solution! I love working with short sale sellers because they are the most motivated sellers out there. Short Sales are the most profitable quick turn deals to do in residential real estate because you’re making all of your profit on the discount with the lender One of the biggest benefits of the short sale business is that it works even better on Luxury Homes. The banks are more flexible and more negotiable on larger mortgages. Banks don’t want to take houses back and they definitely don’t want to take back Luxury homes. It takes the same amount of work to do a deal on a luxury home than it does to do a starter home. The difference is A Luxury home pays 10 times as much profit. Its like doing 10 deals in one and when you combine the short sale strategy with luxury homes, you’ve got the golden ticket. You See, Banks are in the money business. They’re not in the Real Estate business. They don’t want to own any properties. Their only interest is making interest on their money. Foreclosing on homes is a hassle they have to deal with because it’s a cost of doing business for them. The sooner you understand this the sooner you will realize how huge this opportunity is for you right now. When banks lend out money – they have to keep a multiple of 5 times the amount of money they lend out in reserves. When a loan goes bad, it’s now considered a non-performing asset and that limits the amount of money they can lend out. It costs a bank a minimum of $30,000 to foreclose on a home. They would rather take a discount on the mortgage and get that bad debt off their books so they can lend out more money. You are the solution for them. Banks need you to help them liquidate their houses so they can get rid of their bad debt. You are doing them a great service.