Posted On: November 30th, 2018 4:59AM
If you've dreamed of real estate riches along with dreaming of being in the position to help out those who have hit a few bumps in the road along the way but are generally good people fallen on hard times then you may want to consider a type of real estate investing in which you purchase properties and then work out a lease to own agreement with people who, for one reason or another, cannot get the financing to purchase their own properties right now.
This type of real estate investing is a great way to make money while helping out your fellow man and there are many other benefits to this type of arrangement as well. First of all, renters have no stake in a property. For this reason, you will often find that renters have little regard for damage done to the property beyond how it affects their security deposit. Those who have hopes of someday owning the property, however, are much more inclined to take great care of the interior and exterior of the home they are renting. This means that chances are good that the value of the property will actually improve during their tenure whether they ultimately decide to purchase or not.
This also benefits you because these properties are often in high demand and will fill up more quickly than the average rental property should the sale of the house fall through for whatever reason. Common reasons for sales falling through are work-related transfers, divorces, and an inability to get financing even with the money escrowed to go towards a down payment. The good news is that even if the sale falls through you can try again and the house isn't likely to sit empty for very long.
The benefits to those leasing from you are many. First of all, you will be putting a predetermined and agreed upon sum of each month rent towards their down payment at the end of the (again) previously agreed upon amount of time. This allows them to save the money for the down payment without really consciously thinking about it each month. This agreement also allows them a little more leeway for making improvements, painting to taste, and decorating than your typical rental home.
Another big benefit to those leasing to own is that it gives them a certain amount of time, typically two years, to get their affairs in order and work on improving credit, saving money, and taking other positive steps towards their dreams of homeownership. They also get the opportunity to see how they like living in the home in question. Many homeowners would love to have had a two-year trial on their homes before making the final commitment. They have an opportunity to learn about many of their neighbors, the local schools, the local commute, shopping, and entertainment among other things. These things are all great knowledge for those leasing to see and enjoy first hand before making the absolute commitment to purchase the property. It also happens to keep money filling your pockets month after month with excess paid to go to the down payment reverting to you if after two years (or the agreed upon time frame) they decide not to make the purchase.
Some have a difficult time making the decision to go the lease to own route when it comes to real estate investing. They feel, for whatever reason that it is taking advantage of some people and that is something you'll have to wrestle with on your own. Truthfully speaking it is a service that many people wish was offered much more often than it is and can be a huge help to those who are experiencing a bit of a rough patch but otherwise have always been on time with payments and are, at the core, good people who deserve a break. You can quell the feelings of taking advantage by offering a fair price on an arrangement that has the potential to be mutually beneficial.Hadi Bahadori / Home Smart Evergreen Realty
Posted On: November 29th, 2018 7:01AM
While many individual have very specific dreams of enjoying the bountiful profits that can be made from flipping houses very few people put too terribly much thought into the process or any formulas that might be pertinent to success when it comes to flipping houses as a real estate investment venture or for the sake of building a nice comfortable lifestyle or retirement. You will hear a lot about the things not to do when it comes to flipping houses but very few people take the time to mention the things you absolutely must do in order to successfully flip a house and thus begin your ride on the road to real estate investment riches.
1) Do put everything to pen and paper and plan it out carefully before you begin. If you are going to enter into this to make money you need to treat it like a business. This means you need to have a plan of action and make every effort to work towards carrying out that plan.
2) Do establish a budget for the entire project. You need to have a plan for how much money you are willing to invest in the property itself, how much for renovations, and how much money you need to make in order to be a worthy investment for your time and labor. A house flip is a lot of work in order to pull it off successfully. You want to have a good idea of how much homes in the neighborhood are worth, the value of your property as is and the estimated value of the property once improvements are made. In addition, you should also have a pretty firm grasp of the costs involved in making the repairs in order to create a realistic budget for the entire project.
3) Do have an inspection. This is the single most important detail that can save you a great deal of time, money, and heartache when everything is said and done. Be prepared to walk away if the inspection determines that there is more work needing to be done than simple cosmetic repairs. You want to make changes that people can see because those are generally the changes that drive up the cost of the house. You want to avoid needing to make changes and improvements that aren't visible but are very necessary. If you need to invest a lot of money and labor into the house you need to seriously consider the realistic profit potential the property offers. If it isn't significant then you need to walk away before the property becomes a real estate investment money pit.
4) Do know the neighborhood and plan your flip according to the needs of the area rather than your personal tastes and needs in a home. This is another thing that many first time flippers forget. This is not a personal project it is a business project and you need to treat it as such. Keep costs down and feelings out.
5) Do remember that you are in the market to make money not waste money when it comes to establishing an asking price for the property. You've poured blood, sweat, and probably more than a few tears into your flip but you cannot set the value of the property by the effort you've placed into it. Have realistic expectations of how much you stand to earn from your efforts and how much you are willing to go down on the price in order to walk away with some profit in your pocket.
You should also take a moment to reflect upon the fact that many first time flippers actually lose money on their first flip. If you turn a profit at all, even a small profit you have learned many valuable lessons that you can carry with you into future flips and make more money. More importantly, the lessons you learn from your first flip are lessons that money really cannot buy so it is worth a lower profit or even taking a slight hit if your experience makes you even more money in the future as you continue along your real estate investment path.
Hadi Bahadori / Home Smart Evergreen Realty
27802 Vista Del Lago E-2
Mission Viejo CA 92692
Posted On: November 29th, 2018 6:08AM
When it concerns the problem of just how to choose a short sale Realtor, it needs to be remembered that the procedure should never ever be ignored. It should be comprehended that a short sale transaction is very complex and taking on a Realtor that is incapable will only add to the challenges.
Do not obtain carried away by fancy websites or how many online programs they have taken around short sale purchases. Picking a short sale Realtor entails a lot more than this if your objective is to work out monetary responsibilities. The concern of how to select a short sale expert in Orange County got appeal around 2004 when the housing market crashed. Currently, millions of short sales have been executed around the UNITED STATE
. Many Realtors have begun taking a look at the transaction with more severity and also higher possibilities contrasted to other options like foreclosures or funding alteration. Basically, 3-hour programs for short sale Realtor are just inadequate to give the necessary training required to be proficient at this sort of real estate transaction. This nevertheless does not imply that education should not be a factor in thinking about exactly how to choose a short sale Realtor.
Aspects on Exactly How to Pick Short Sale experts in Orange County
Comprehending the characteristics on how to pick a short sale Realtor will help you to appreciate more the essential factors to consider the ability of your real estate agent. Property owners need to know that there are possibly some real estate representatives that claim to be short sale Realtors, however, do not have the education and learning or experience to supply the solution you require. To resolve the issue on how to choose a short sale Realtor, consider the following ...
Information regarding the Short Sale Process generic - turning over keys.jpg
Ask the details concerning the short sale procedure including the things to anticipate. The line of examining ought to likewise discuss the type of services that they will certainly give including when and just how much you require to spend for the short sale. In regards to exactly how to choose a short sale Realtor, failure to offer you clear answers on these types of concerns ought to increase a warning in your mind.
A qualified short sale Realtor must have the ability to review the details of the procedure; consisting of the important things to be expected by homeowners. Failing to address your questions mean that either the short sale Realtor does not have the appropriate understanding about the process or does not care enough to give clients the information they need to know. In any one of these situations, the real estate agent should never ever be taken into consideration to represent you throughout a short sale case.
In regards to charges, a short sale Realtor should recognize the important costs by heart specifically if the homeowner is expected to pay a portion upfront. Although the technique of calling for in advance costs has been taken into consideration illegal in some states, there might be some charges that need to be resolved right away.
Nevertheless, if the real estate agent can not clarify the reason for the fees, the homeowner should be alert to the opportunity of strolling right into a scam. You must stay clear of real estate representatives that claim that they can assure outcomes. In this sector nothing is assured.
As top short sale experts in Orange County, we recommend to start early and contact the agent that you trust!
Factors on How to Choose a Short Sale Real Estate Agent
Understanding the dynamics on how to choose a short sale Realtor will help you to appreciate more the necessary factors to consider the capability of your real estate agent. Homeowners should be aware that there are potentially some real estate agents that claim to be short sale Realtors but do not have the education or experience to provide the service you need. To address the concern on how to choose a short sale Realtor, take into consideration the following…
Posted On: November 19th, 2018 11:47PM
Becoming a successful real estate investor
Becoming a successful real estate investor requires being able to find good real estate investment deals and put them together. Your job is not to become a closing attorney, a management expert, or a repair person. Use professionals!
You must learn how to appraise and find the true value of real estate this information will help you make better investment decisions. Realtors, appraisers, and banks determine what a property is worth by looking at comparable sales usually three to five sales of similar property that has recently sold in the same neighborhood. You must be able to do the same.
Getting a list of comparable prices of properties bought or sold (and when it sold) for the neighborhood you need information about, and asking active real estate investors in your area what the market is like will be helpful and make a better investment decision. What is the ideal market for investing?
There is no such thing as an ideal real estate market for investing. It tends to be more difficult to find bargains in rising markets if the market keeps rising the probability of selling the property quickly for a large profit increases. In contrast but when property values are falling more bargains become available.
You need to be able to assess the true value of properties based on when you expect to sell. Your purchase must be made at a good enough discount to allow for a profitable sale at a later date.
Leverage is very important for investors because the less cash you put down on each property the more properties you can buy. If the properties go up in value your rate of return goes up. However, if the properties go down in value and you have a lot of debt on the property this can result in negative cash flow.
Since real estate is generally cyclical negative cash flow is only a short-term problem and can be handled if you have other income or cash reserves. This makes "Nothing down" investing very helpful to protect against negative cash flow for high leverage investor.
If you are a long-term real estate investor leverage will work in your favor if the markets in which you invest appreciate in the long run and your income from the properties can pay for most of your monthly debt. Strategies to limit risk
To limit risk become educated in your local real estate market first by understanding the large-scale trends from global down to national regional and specific neighborhoods. Learn about target neighborhoods with the help of successful real estate investors in your area along the way.
Real estate investors can help you interpret market indicators such as the average length of time houses have been on the market this month versus last month or last year. With this information, it will help you make better investment decisions.
It is important not to guess the future of a local real estate market you need to have a clear plan in mind when purchasing the property. As a real estate investor, you must know exactly how you will exit the property before you buy. And have a backup plan or two in case the first course of action doesn't work. You must know your market and your plan before you begin to invest.
27802 Vista Del Lago E-2
Mission Viejo CA 92692
Posted On: November 19th, 2018 11:02PM
Sometimes it’s helpful to sell your home before you really want to move. This often happens when you are having a new home built, but aren’t sure of the completion date. Is there any way you can sell your home so you’re sure of the funds available for the new purchase, but continue to live in your old home until construction of the new one is complete. Yes, there is with the renting back strategy.
Enter the Lease-Back or Rent-Back Agreement
The particulars of this strategy vary from state to state, but in the strong seller’s market we’re experiencing, buyers will often agree to let the seller stay in the home for a period of time as long as rent is paid. In a competitive situation, the buyer willing to do this will often have the winning bid even though there is another offer as high as his.
The agreement covering the situation states the length of time the seller will remain. It can be done with a specific date named or wording that allows the seller to remain up to a specific date with the possibility of her moving sooner. The amount can be a fixed figure paid out of the proceeds of the settlement or a monthly amount or a daily amount. It is usually, but not always, tied to the amount of the mortgage payment under the buyer’s new loan. Sometimes there is a deposit against damage, sometimes not. There is usually a clause saying the seller will hold the buyer harmless for any damage to himself or his property which occurs after the sale is consummated and before the seller moves. The attorney who draws up your contract offer can create such an agreement. If you’re using online forms, you should be able to find one for this situation. If you’re working with a real estate broker, he or she can handle it for you.
I’ve recently seen a very pleasant example of this idea in action. An elderly widow contracted to have a one level condo unit built in a new community which provides all exterior maintenance. She had had hip replacement surgery and wanted to get away from the drawbacks of the home in which she’d reared her children. The home was large, had stairs and was located on a large, partially wooded lot with many mature perennials and shrubs. Both the home and garden were beautiful, but high maintenance.
Her contract to purchase required a series of deposits and a firm indication as to her source of funds well before settlement on her new condo. The widow put her home on the market. A young couple with two sons was very anxious to buy it. The situation was competitive. They made the widow an offer. She countered their original offer. She did not raise their offer price, which was slightly below her asking price. She did not believe the young couple would qualify for a larger loan. Instead, she did something rather creative.
The widow countered with a proposal that she “rent back” for a period of “up to” a certain date (a date beyond her scheduled competition date on the condo) in exchange for a modest flat sum to be paid to the buyer at settlement. The total rent back period was less than two months. The flat fee was less than the amount of the new mortgage payment for the buyers. However, since they made no payment on their new mortgage the first month, it wasn’t too far out of line. The couple really wanted the home, so they accepted the counteroffer.
Another win, win situation was created. The widow only had to move one time and the young couple got a house they probably wouldn’t have in a straight bidding war. If you find yourself in a situation similar to either the widow or the young couple, perhaps you can work out a similar solution.