Archive for March, 2011
March 30th, 2011 -- Posted in Selling Real Estate |
If you’re facing a bank foreclosure or repossession of your house, then you may be desperate to sell it. Usually this means just one thing: You’ll have to settle for less money in exchange for a faster turnover. So if it’s possible to get into a financial situation that will allow you to sell the house at your own pace, then you should definitely do so. You will have to decide how much of a tradeoff you are willing to make. There are quite a few options for desperate sellers, and the one you choose will depend on how fast you need to sell your home, and how much of the market value you want to earn.
You can take some preparations to make your house sell quicker through traditional methods. You should be ready to vacate the house soon, so that means it could be a good idea to pack up stuff you aren’t going to use, and maybe even put some furniture into storage (whether it’s at a unit or in the garage of a friend). Depending on the state of your home, you might benefit from cleaning the carpets thoroughly, or even painting the walls. It’s also a good idea to get your home inspected professionally for any defects that may have occurred in the structure, the pipes, or the electric wiring. A certification from an inspector can move the sale process along a lot quicker.
Next, you will need to talk with a real estate agent about getting your house sold as fast as possible. The exact steps you will take depend on many things, such as your house, the local market at the time, and how fast you need to sell. Tell the real estate agent the date you need to sell by. If they say it’s impossible to sell it that fast, then you’ll either have to reevaluate your situation, or find another real estate agent. If it is possible, then you will have to find out if there is a catch to selling it that fast. Will you get as much money as you would regularly?
There’s another option that is very intimidating, but it can be one of the speediest ways to get rid of your house. That option is to sell it yourself. You can use the internet, newspapers, and fliers to find a buyer. After you find someone who is interested, you can move as quickly as you like.
Consider all of your options carefully, try not to rush things unless you really need to, and you’ll surely have a successful experience.
March 26th, 2011 -- Posted in Selling Real Estate |
Sometimes, it can be a good idea to sell your home and rent it back. It is a good idea if you have debts to pay, or you are facing the risk of an eviction or repossession. It can help you get back on the right financial track. Here is some information about selling and renting back.
The concept of selling and renting back is this: You have paid off a significant amount of money on your house, but you are facing some sort of impending event that will cause you to be unable to make more payments. So, you sell your house to a company or business which then rents your own house back to you. In doing this, you free up all of the cash that was locked up in your house. You get a different financial arrangement for your housing, but you don’t have to move. This makes it a great idea for many situations.
You will probably deal with a company that specifically deals with buying houses from people and renting them back. This means that they have a specific system that they use based on your equity and your home. Your equity refers to the amount of money that you have poured into your home so far, and this will be a huge factor in determining what will happen.
Before deciding to sell and rent back your home, you should do the math to figure out whether you will benefit or not. Find out what your new rental rate is going to be. Is it above the average for your region? Is it lower or higher than your current monthly payments? How long will you need to rent until you can get your finances together and get into your ideal situation? Renting should never be a permanent solution, and if it is the only financial option available to you then you need to consider making drastic changes to your situation.
If you’ve made the final decision to sell and rent back, then you should start talking to a few different companies. Get quotes on how much cash you will receive for your house, and also find out the specific renting terms that you will get. Be sure to find out about all of the small print involved with the different companies. Create a comparison, and add up all the figures to see which company will give you the most money and take the least.
March 22nd, 2011 -- Posted in Real Estate |
You’re not with it of you’re not into real estate. With the rising real estate prices, everyone wants to reach the big time. As a result, increasing emphasis is being laid on the role of home improvement. Nobody wants to buy a dilapidated house whose staircase might be creaking. Nobody wants to invest in a house whose bathroom pipes leak. Thus, if one is planning to sell a house, you must invest in some repair work. These days packaging is everything. If the house you are selling does not seem to be in a good state, the chances of your selling it at a good price will be considerably reduced.
That is the reason why home improvement loans are gaining in popularity. Everyone wants to raise the value of their home and property by giving their home a facelift. Apart from looking good, a good-looking home also has a higher value. A good-looking home is valued at a higher price and will fetch you better deals if you apply for a personal secured loan later on. An unsecured loan is not at all tough to get, but they are usually costlier and require a better credit score. It is okay to go in for an unsecured loan. However, if you have a house to act as collateral, a secured loan would be more advisable.
Then ask yourself the question: How do you finance home improvements? Well, if one is the owner of a house, you could go in for a secured home improvement loan. This would give you the benefit of lower interest rates and you would be able to borrow a greater amount. If you are still in the process of paying back a mortgage, you could consider getting a home equity loan. Home equity loans allow you to free the equity value of your home. This amount can then be used to take care of other expenses such as education and emergencies among other things.
If you do not want the risk of losing your home, you could go in for an unsecured home improvement loan. Yes, this may not necessarily be cheaper as you would have to invest in an insurance policy as well. However, it allows you the option of carrying out home improvements without putting your property at risk. In this case, a great deal will be based on your credit history. A good credit score will help you avail of better bargains that offer lower rates of interest.
Ultimately, it will all depend upon how you would like to pay for home improvements. Think everything through.
March 18th, 2011 -- Posted in Real Estate Marketing |
Want to sell a listing that’s been difficult to sell? Market it via a virtual tour. You may be pleasantly surprised by how affordable it is and how easy it is to do.
The idea is simple; upload pictures of your listings to a host website and sequence the pictures in the order that you want them to appear. Then have agents and prospects log onto their computers and click on links that bring up your tours.
In some instances the viewers will be able to manipulate the tour much like they would a dvd player.
They can freeze frame, rewind, fast forward and stop the virtual tours – all from the comfort of their offices, homes, or wherever they can access a computer hooked up to the internet.
Of course every company is different, but are easily found by Googling “video tours.” One site I visited had four demos that were stunningly beautiful that cost an almost an embarassingly low $9.00.
Below are a few other strategies that have changed the way agents market real estate.
Stepping Outside the Box
Internet marketing has morphed into content based raltor websites, sequential autoresponders, newsletters and the like. Following are a few thoughts about each.
1. Realtor Websites. If you’re not online with a website you’re seriously behind the times. Millions of people log onto the Internet every day, looking for services.
Some are looking for products and services that you offer – real estate. Of course, they won’t find you if you don’t have a website and if you do have one they may not find you if it’s poorly optimized.
So, let me help you out. Snap out of. Either get a website that generates leads, or forget about having one at all.
2. Sequential Autoresponders. Autoresponders are powerful email marketing programs that automate a lot of your email chores. They do what the name suggests – which is automatically repsond to requests for information.
The idea behind them is to offer free information in exchange for a person’s email address. Once you have it you can then provide follow up messages forever, all the while gently nudging them towards your most wanted response.
In some instances the most wanted response might be for them to call you to make an appointment to see a home, while other times it might be to list a property with you.
Whatever it is sequential autoresponders can’t be beat for efficiency and effectiveness.
3. Newsletters. Some agents are still snail mailing newsletters and at 41 cents a pop their mailing expenses a;one would amount to $205.00 in postage. Now, compare that to zero cost in postage if they were to email the same document.
That’s right – emailing the same information is free. So, why aren’t more agents doing it?
In part it’s because they don’t understand the technology, which really isn’t all that hard to understand. Plus, like most people they are slow to embrace change.
Buy be warned – agents who have embraced the technology are carving out a large piece of the online marketing action at the expense of agents content with trying to maintain the status quo.
March 14th, 2011 -- Posted in Real Estate Financing |
Applying for commercial real estate financing is a big step. It’s not easy to get commercial property loans, especially if you are a first-time borrower. Before you apply, there are some things you should think about in order to be fully prepared.
Commercial real estate financing is different from residential real estate in a big way, according to the lender. With residential real estate, they are looking at how much the property is worth, and not overly concerned with how much it will make in the future. Residential property generally appreciates over time. With commercial real estate, however, they’ll be looking at future profits.
This means that they will be concerned less with the current worth, and more with the possible worth. As a result of this, they will be very concerned with what sort of profits the venture will generate. This is why it is very important for you to sit down and do the math. How much do you think it will make?
This means also that you should be clear on how you will use the property. What kind of business will this be? Is it going to be all for one business, or are you going to rent out units? These will be major considerations for the lender, so make sure you have a detailed plan all set out.
The actual geography of the property will also be a factor in determining whether you get your loan or not. Look at the location of the property and how that will effect the business. You will have more trouble getting financing for a place located way out in the sticks than a place on a highway off-ramp.
The size and type of the property will also be factors. You will want to look at the history of the place and make sure there aren’t any minor details that might cause trouble, like environmental problems.
Risk is the most important consideration to lenders. They will be looking at the future of the venture and, in particular, at possible things that could go wrong with the business.
A big part of this is the condition of the overall market. You can save yourself trouble later with your commercial real estate financing by studying the market and understanding its current trends. This is what your potential lender will be looking at, so it’s good for you to understand it as well. If the future is uncertain for the type of property you are trying to buy, they may be worried about making back the loan.
Before the deal closes, they will send you a “commitment letter.” This is a notification from the lender letting you know officially that you have been approved. More importantly for the lender, the commitment letter will have the terms and conditions of the loan. In other words, these are the rules.
It will tell you details about the closing conditions, rules for what you can and can’t do with the property, as well as a summary of all the terms you agreed on, making it official. Take a good look at this and make sure that it will not prohibit you from doing the things you intended when you requested the financing.
Finding commercial real estate financing is a long and drawn-out process, but if you can consider a few things before you apply, you can save yourself the headache of dealing with something unexpected later.
March 10th, 2011 -- Posted in Real Estate |
The real estate syndicate is a pooling of resources of many investors to buy a building or long-term leaseholds.
If you contemplate investing in such a syndicate you will receive a brochure which will have a statement about the anticipated yearly distribution. Note the words anticipated, and distribution. The syndicate has evaluated the property, but does not know and cannot always know whether throughout the years – or even next year – it will show a sufficient return to make the payments which are hoped for.
So he usually tells you that he does not guarantee the return, that the return of 10, 11 or 12 percent is “anticipated”. The word distribution is really the key word. Why do they use that instead of profit or income? Because the money which you receive every month is not just profit, but in the legal sense is partly return of capital.
Assume that you have $10,000 to invest and that you are examining the brochures of two syndicate offerings which seem substantially of equal merit. Both state that your anticipated distribution will be 10 percent. One brochure states that during the first five years, none of the distributions will be reportable for federal income tax purposes. The other brochure states that during the first five years, 50 percent of the distribution will be reportable for federal income tax purposes.
This means that in the first case you keep the whole $1,000 every year during the first five years and need pay no federal income taxes on that $5,000. In the second case, you have to pay income taxes on $500.00 of your income every year. If you are in the 30 percent bracket, you pay $150 per year on the $500. Therefore you are keeping only $850 out of the $1,000 distribution.
If you are in the 40 percent bracket, you pay $200 per year on the $500 which is taxable and you keep $800 out of the $1,000 distribution. Ten percent distribution may mean in one case 10 percent take home pay. In another, it may mean 82 percent, 8 percent or even less, depending on your tax bracket. If you want to know your net income after taxes, be sure to check what portion of the anticipated distribution is reportable for federal income tax purposes.
Depreciation Applied To Real Estate
The traveling salesman uses the car in his business. The manufacturer uses machines. In a syndicate – your equipment – your means of making money is the building which is owned by the syndicate. The building, like any other piece of equipment, is subject to wear and tear and to obsolescence. The tenants, users, and the elements all cause the wear and tear. But do not underestimate obsolescence.
The useful life of a building and the deduction permitted for depreciation depends on the type, age and the condition of the structure. But a part of the distribution of the syndicate will represent depreciation reserve, or funds which the syndicate may set aside for depreciation and you will not have to pay income taxes on that part. Be sure to check the brochure to find out what portion of the distribution is subject to income tax and what portion exempt.
New York State law requires that your brochure state how much of the contemplated distributions are income and how much return of capital. Many other states have similar legislation or are in the process of enacting similar laws.
At some time in the future the depreciation allowance will come to an end. All distributions which you receive thereafter are fully subject to income taxes. The reasons are simple. If the syndicate bought a building for $500,000 and over the years it received $500,000 for depreciation, there is no need to worry anymore about wear and tear and obsolescence. The syndicate got its money back.
Make sure you understand what you are likely make if you invest in a particular syndicate.
March 5th, 2011 -- Posted in Real Estate Investment |
The real estate investment industry lures many a newcomer with lucrative deals and the dream of huge profits. However, like any other industry, this one too involves careful consideration of a number of factors that affect the investments. The industry has gone beyond being merely the purchase and sale of premises. The finer aspects like home improvement and repair are now part and parcel of the industry. A real estate investor’s job does not end with closed deals anymore. It involves preparing the property for sale too, and for close scrutiny!
It is always a good investment indulge in home improvement to any property you invest in. This increases the re-sale value. However, the industry is also one where home improvement and real estate investment go hand in hand and any error in securing a deal could cost a lot of money.
Many investors are known to identify and invest in properties that are in a not-so-good location. This is obviously done to save and yet procure a property. Some even end up investing more than the actual cost of the property. Such investments only spell future insecurity. It pays to exercise caution while investing hard earned money. The value of such investments only depreciates in time.
It is also very essential to understand and adhere to the building codes applicable to a particular area. Paying no heed to the essential legal permits will only end up with you paying more to get rid of the yoke of your investment being branded as illegal. There are authorized building inspectors who make sure that the home improvements are taken care of within the paradigms set by local or state authorities. This saves you a lot of money too.
Many real estate investors also make the mistake of sticking to a very rigid budget for home improvement projects. A detailed budget, not too rigid, always works to your advantage. You need to calculate every minute requirement beforehand. You will be surprised at the unexpected small returns you benefit from by being a little liberal initially.
Another mistake that real estate investors make is attempting home improvement themselves. Certain legalities specify on the services of state licensed contractors. In any case, extensive renovations are best taken care of by the experts in the industry. This also ensures safety measure in place and enables you to save a lot of money by evading legal issues in future.
With so much of calculated and hard-earned money at stake, you should avoid these mistakes. Careful consideration of the above-mentioned errors that are common within the industry is sure to help you navigate through rough times too. In a nutshell, you should:
. Identify with the real value of the property
. Double check that the location is decent
. Maintain a flexible budget
. Consider the cost of services and material
. Cover yourself to tackle unexpected costs
. Consider professional help
If you tread with caution and discrimination, you are sure to succeed in this very profitable, but volatile investment industry.
March 3rd, 2011 -- Posted in Real Estate Investment |
Any business opportunity involves the element of risk. A real estate investor needs to exercise more caution than any other player, since the industry is known to be extremely volatile. The real estate investment opportunities benefit the investors through stable positive cash flow and special tax advantages. However, it is very essential to tread cautiously and minimize the risks in the industry.
Get dressed for success: If you have the required knowledge and skill, you should get ready to take on the market. You should scout around for special industry relevant seminars. These are available online and offline to help beginners in the industry to create a niche for themselves in the market and conduct the appropriate research on investments regularly.
Monitor prices: It pays to know the market well. You should be well versed with the current prices and demand. You should periodically assess the risks involved in the industry and refrain from hasty decisions. Armed with sufficient research on the best areas to invest in, nothing can stop you from reaping in the desired profits. continue reading »