How to Avoid a Foreclosure with a Countrywide VA Loan

VA mortgage loans are home loans that are government insured and guaranteed by the VA (Department of Veterans Affairs). They are there to help qualifying active-duty service members, reservists and Veterans that wish to purchase a home. Although the financing comes from banks, the borrowing terms are more flexible, including lower interest rates and down payments. Unfortunately, even with this help many Veterans discover they can't make the mortgage payment, resulting to the home going into foreclosure. With help, they can often learn how to avoid foreclosure. Countrywide VA loans are issued through Countrywide Banks. Countrywide is used by many Veterans, as they are one of the top lenders for VA loans.

Although the financing comes from Countrywide (or some other lender), the VA guarantees the loan, stating that if they will cover the mortgage loan if the Veteran cannot. Many benefits are there to help Veterans when they obtain their VA financing through Countrywide, including how to avoid foreclosure. Countrywide, VA and the Veteran all work together to avoid a foreclosure, if possible. Many VA loans today are in foreclosure. Often all the borrower needs is a little help in how to avoid foreclosure. Countrywide VA loans are often provided with special features not available in traditional mortgage loans.No down payments are required on some VA loans with the qualified Veteran being able to borrow up to $417,000. The debt to income ratio and income guidelines is much more flexible and less strict with VA loans than with traditional mortgages. Because the Department of Veterans Affairs is insuring or guaranteeing the loan, the requirement for mortgage insurance if eliminated. Veterans also have their choice of an adjustable or fixed rate loan. In spite of these flexible guidelines, Veterans must still meet the eligibility requirements of the VA.

The law requires that VA home loans can only be obtained for certain reasons. One reason is to build or buy a home that will be owned and lived in by the Veteran. Another reason is to refinance a current VA loan for the purpose of lower interest rate or to refinance a current mortgage that is owned by a Veteran. The VA loan can be for residential property of up to four family units.

With the foreclosure rate as high as it is today, many are concerned with how to avoid foreclosure. Country VA lenders are always available with helpful suggestions. When asked how to avoid foreclosure, Countrywide VA lenders will suggest contacting them at the first sign of financial difficulties. When the financial difficulties are in the early stages, Countrywide lenders can often come up with different mortgage terms to help the Veteran. However, once the borrower becomes too far behind in the payments, they sometimes cannot be helped.

Investment in Home or Stock! First analyze your financial advisor!

He/she maybe an agent in disguise for the real gamblers - builders, owners, brokers, Stock/MF traders, bankers, manipulators of Dalal Street or Wall Street, etc. Keep aside the financial jargons; stock investments are no more than a "glorified version of traditional gambling". Chances are, when you think about investing in real estate or stock the first thing that comes to mind is to ask an investment expert or realty professionals, overriding your OWN common sense. Look at the housing market as a critic and just Calculate Cash Flow Return (Rental Income) and Future ROI (housing sale profit).

Also keep watching the BSE Realty Index and other similar trends. Reading the recent global market crashes and considering how manipulative the markets are, in general, the long-term success is not so rosy anymore for small investors… Many will surely take it otherwise, but that cannot change the ground realities, can it? Refer the early warning stories!

Taking clues from today's proliferated media to make important decisions can be a disaster, be logical. They are notorious for changing opinions as quick as the status of markets. Forget what the Kotaks, Investment Magazines, Experts, MagicBricks, NDTVs, 99Acres, Bankers, CNBCs, 2letservices, Consultants, RealEstateTimes, Yahoos, Googles,..etc are suggesting, look at the local market conditions! Yes, there are no monarchies in today's digital world, but the basics of what Canakya or Kautilya said in Arthasastra (read finance) cannot be mutated by few opportunists forever. Why will the market grow in your favor? Find an answer before jumping-in!

Historical returns are of little value in formulating return expectations, standard deviations and correlations: When past performance of stocks/bond or housing investments are used as inputs, the outputs of the analysis are portfolios which performed particularly well in the past. When beliefs of investment experts are used as inputs, we get the output as better or worse portfolios. Good and reliable advisory add value by constantly evaluating the investment planning implications of alternative economic scenarios, investment solutions and lifestyle choices, managing costs, and counseling a margin of safety in saving and investing your money. Anything less is bad practice, fire him/her!

For many people, their home is the single largest investment they will ever make. But have you ever stopped to consider that once you purchase a home it becomes part of your overall portfolio of investments. It is one of the most important decision as it can serve a dual role of an investment and your daily life passion. Though a home is one of the largest investments the average investor will purchase, there are other types of real estate investments worth investing in. The most common type is income-producing real estate. Large income-producing real estate properties are commonly purchased by high net-worth individuals and institutions, such as life insurance companies, real estate investment trusts and pension funds.

Income-producing properties are also purchased by individual investors in the form of smaller apartment buildings, duplexes or even a single family homes or condominiums that are rented out to tenants. Real estate is considered an alternative investment class compared to more speculative driven items like equity or bonds! Major difference is that real estate is an investment in the "bricks and mortar" of a building and the land. So it is tangible, because unlike most stocks you can see and touch your house, try it! This often creates substantial pride of ownership, but tangibility also has its downside because real estate requires hands-on management. You don't need to mow the lawn of a bond or unplug the toilet of your equity papers!

Some benefits of realty investments are diversification value, yield enhancement, inflation hedging, ability to influence performance, etc. An investor can do many things to a home to increase its value or improve its performance e.g. replacing the leaky roof, improving the exterior and re-tenanting the building with higher quality tenants. An investor has a greater degree of control over the performance of a real estate investment than equity investments, which are proved to be highly speculative-driven for the benefit of smart manipulators.

Sell Your House Quickly by Staging

No one can argue that deciding to sell your home is a heart wrenching decision. Unless you are amongst the few that like jumping from place to place, odds are you have spent quite a bit of time turning your house into your "home". Your precious weekends have been used painting each room, mulling through furniture showrooms, and creating a place on this planet that is all about you and your family. Now the time has come to leave. But the misconception that you face is that merely putting a for sale sign in the yard will sell the property. Nothing could be farther from the truth.

In today's fallen housing market, the amount of time a property sits on the market can be a death sentence. The longer you wait for buyers creates an opportunity to offer a lower price. The way to get your home noticed fast and sold even faster is to market your home to the buyer. This redecorating for the means of selling is called staging. This secret amongst the real estate world has helped endless property flippers move their inventory even in the worst of housing markets.

If you have never heard of staging, you are probably wondering how this can help me. Staging changes the way your look at your home. The moment you decide to sell your property, the way you see your home should change to that of a buyer. Before hiring an agent and sticking a sign in the yard, there is alot of work to be done. From neutralizing the paint to depersonalizing the decor, things must change in your home to get the greatest return. Staging has be known to bring in offers above the asking price after the seller received multiple offers. Now there is no guarantee, but it is in your best interest to keep your options open.

I myself have used staging to give me huge returns. My first home was a condo that I was selling instead of keeping as a rental property. I learned how to stage the property after hearing about it from a friend that was flipping properties with great success. I had made the decision to sell the condo myself so I could save money, but there were alot of condos for sale in my development. I took about 6 weeks painting and repairing the little things I had ignored for years. Rented a storage unit and moved alot of my things out to make the space appear larger. I put a for sale sign in the window and was on my way. Two weeks later I was under contract and the buyer wanted to close as soon as possible so he could get renters in by year end. I thought this was just a rare case, but I was wrong. I have used these same steps for assisting friends and family to sell homes with great success.

My last testiment to staging was just last year (2007). I was moving out of state and started the steps to stage my home in January so I could get it on the market once it was Spring. My next door neighbors were trying to sell, too. They listed their home prior to mine so they could get a head start on the market and hoping to edge me out of a sale. The homes were similar in size and details, but the big difference was they just hired an agent and put the sign in the yard. Mine was listed in March, under contract beginning of April and closed in May. Their home is still on the market right now and they have lowered their price 4 times!

Real estate agent: All about real estate agents

Real estate agents are professionals who help in connecting the buyer to the seller. A lot of real estate agents also do rentals wherein they connect tenants to landlords and even maintain the property on the behalf of the landlords. The real estate agents work by linking together the two interested parties and charging a commission for their services. For sales, they charge commission only to the seller but for rentals (i.e. agent managed rentals) the commission is charged to both parties involved in the transaction. Real estate agents generally calculate their fee as a percentage of the selling price (in case of sales) and as part of the rent (for rentals). People, who want to sell/let their property, leave the details of their property with the real estate agent (and in fact, even leave the keys of the house so that the real estate agent can arrange for viewings without them getting into any hassle). The other interested party (i.e. the buyer/tenant), gets access to this information by contacting the real estate agent. That’s how the real estate agents become a hub of information.

A lot of home seekers (including real estate investors) use the services of real estate agents not just for getting good deals but also getting them quick. Since real estate agents are probably most familiar with the market situation in their region of operation, it makes sense to approach them to get an idea of the going rate for properties in that region. Real estate agents would generally know the prices of various properties of different types and at various locations in the region.

A property seller can possibly get a few thousands more for his/her property by using the advice received from a good real estate agent. A good real estate agent will also analyse the needs of a home buyer/tenant and provide suggestions on what kind of home could be available to them within their budget. So a good real estate agent will not just throw a list of available properties to the buyer/ tenant but will actually discuss their needs and make a suggestion. This, in fact, works in the favour of real estate agent in two ways. Firstly, if the real estate agent is able to sell the house they get their commission and secondly, if they make the buyer happy too they earn a good reputation (and hence more business).

However, it is worth noting that real estate agents work on seller’s behalf. So, beware if they are trying too hard to sell a property.

Does the Housing Market Affect House Flipping Success?

very news story published these days related to the real estate and housing market seems to predict doom and gloom. Property prices diving, out of this world foreclosure rates, mortgage meltdowns, and stagnating market articles dominate the headlines. As a real estate entrepreneur, shouldn’t this information keep you awake at night? Shouldn’t it make you rethink getting into house flipping in the first place? Shouldn’t it cause some serious concerns?

The short answer, to put it plainly, is not really. The housing market should have little to do with your achievement as a house flipper. Your success as a flipper depends on many things: buying undervalued homes; making correct improvements; keeping costs low; making your property the best in its neighborhood; but it does not depend on the market itself.

Why then, are all the house flippers saying the sky is falling and the business is doomed? Because they aren’t in this business with the right mindset. They are speculators, hoping to buy a property and let the market itself increase the value. When the market stops going up, these individuals unexpectedly see their profit dry up (or turn into huge debt) and they think the flipping business is finished. When the market stops increasing for flippers, it can be a bonus, as the price for buying properties stops going up, which means really great home become more affordable, which means the market for the less desirable homes becomes saturated, and all of a sudden you have your pick of the litter. Your opportunities for success can actually go up in a stagnant or declining housing market.

If you are beginning in this business your perspective should be one of creating equity. See your property flip as an opportunity to take something that is not worth much, add something to it, and provide it to someone who will pay top dollar. It shouldn’t matter that the market itself is not appreciating in value, because you are creating value and equity completely separate and apart from the market!

Remember this any time a naysayer tells you your real estate dreams are far-fetched. You don’t need market increases to flourish. All market increases do is boost your profit margins. All you really need is the right property in the right neighborhood that needs the right fixes. Find those three things and it doesn’t matter what the market does, you can be successful.

STRATEGIES TO SAVE MONEY FOR THE SAVY REAL ESTATE PURCHASER

As real estate attorneys, we are often asked by our clients how they can save money when purchasing real estate. They are grateful to us for any suggestions that we can make which result in money remaining in their pockets and/or pocketbooks. The following is a list of strategies that purchasers can use to save money on lender fees, title company closing fees and other related fees.

Lender Fees

● If your credit score is less than perfect, you should consider pre-qualifying with numerous lenders to avoid paying application fees to each one.

● Have your Good Faith Estimate of closing costs reviewed by your real estate attorney who can determine if the fees being charged are unusually high before you decide whether to use a particular lender.

● Never sign a Loan Commitment which is not fully completed by a lender to avoid additional charges appearing at the closing table.

● Avoid paying lender's Private Mortgage Insurance (PMI) by borrowing 80% or less of the purchase price thereby decreasing your monthly mortgage payments. Should more money be needed, consider applying for an additional home equity line of credit ("HELOC").

● Be weary of locking in an interest rate too early or for too short a period. Rate lock extension fees can be substantial and most transactions take approximately 60 days to close (or longer for cooperative units).

● Try to schedule your closing at the end of the month to reduce the amount of prepaid interest that the lender will take at the closing.

● When a lender does not require you to do so, do not escrow for real property taxes and hazard insurance. This will leave you with more cash in hand after the closing and reduce your monthly mortgage payments.

Title Company Fees

● When taxes and insurance are not escrowed, the lender may also not require the title closer to pick up the next real property tax payment at the closing thereby saving you the title company's escrow service fee. And, if the new tax amount is unknown, you will avoid having the title company hold a substantially higher amount pending the determination and payment of the tax and then waiting for a refund of the overage. Alternatively, if the sum is known, request to make the check payable directly to the taxing authority rather than having the sum included in your title bill to avoid paying the title company's escrow service fee.

● Consider declining the Market Value Rider offered by the title company (which increases the insurance amount to the higher of the value of the property and its purchase price, in case the title company is liable for damages due to a mistake). The price of the Rider is usually at least a few hundred dollars, however, statistically title companies rarely make a mistake which obligates them to pay out the full property value.

● Inquire into whether your attorney and/or title company has attempted to locate a survey of the property being purchased. Ordering a new one can cost over $500.00.

● While title closers customarily receive a gratuity from the purchaser at closing, you should review the title bill to ascertain whether the title closer has added a fee for his/her services. The purchaser should be able to decide the amount of the gratuity to be given.

● If a property is being transferred between family members, consider not obtaining title insurance (which may be required by the lender if the purchase is being financed). However, it is unwise to accept title until you have completed and reviewed a title search to reveal whether there are any existing liens.

Miscellaneous

● If the seller retains post-closing possession, make sure that your attorney holds sufficient funds in escrow to cover the cost of repairs in case any problems (plumbing, heating, electrical, etc.) are discovered once seller relinquishes possession.

● Note the termite provision in your contract of sale. Most require the seller to repair any damage if an inspection is done and the seller's attorney is advised of the extent of the damage within a specific period of time. However, if you miss the deadline, the sellers are no longer obligated to make repairs.

Guidelines in Seeking Mortgage Loan

BusinessIf you are planning to buy a home, you have to settle your financing first. Definitely, each of us want to have their very own home, but buying one is not that simply, there are factors that you need to consider and think about.

When wanting to buy a home, you do not simply go to the market and search for your desired home. You have to assure yourself that you have the means to have it in order to avoid frustration.

You have to look for a mortgage loan so to have the means to have your dream home. This article will give you certain guidelines that you can make use of in going for a mortgage loan.

Check your credit reports in advance before you go out and seek for a mortgage loan. It is best to check out your credit report every 6 months. Within this period, it can provide you sufficient time to make amends in the credit ratings especially if the credit score are low.

Do not just go with a particular lender, shop around, there are a lot of lenders out there. Due to the high demands, more and more lenders are offering incentives with their mortgage loans in order to attract customers. So you have to contact or visit several lenders, ask for details. You have to know the quotes, rates that they offer. Gain better understanding with each quote. Why don’t you negotiate? It is best to negotiate with the lender about the interest rates and other costs of the mortgage loan.

Be alert, you have to understand the costs that the mortgage loan have. It is recommended to seek for advice from a legal professional in order to gain information about the real estate law and so on.

In seeking for mortgage loan, never sign the loan contract quickly. You have to understand everything that is written in the contract, make sure that the agreement that you have talked about is written in the contact. Assure yourself that what is written there is correct and precise.

Do not make any assumptions. Every detail should be written on paper. Ask all important questions. Make sure that you are clarified with all the queries and questions that you have in mind regarding the mortgage loan. Make sure that every detail are documented, all should be written in the contract. Never do assumptions, since these can make you lose plenty of money.

As soon as you gain mortgage loan, you can start seeking for your dream home. Settling financing is important, it can make you prepared enough in finding your dream home. So in order to make sure to successfully gain your dream home, settle your finances and make sure you will have an approved mortgage before going to the market and seek for your dream home.

Real Estate Investing - Don't Just Jump Into It

Who wants to know about real estate investing. Well I'm among those who have experiences to share, some good and some not so good. Real estate investing can be a tool or vice toward aquiring income generating assets. Like anything worth having, one must be williing to make the necessary sacrifice to attain what is most desired.

As a Realtor, I come in contact with alot of investors. I meet many investors who previously purchased properties without using a Realtor. Below are one investors true real life experiences.

He became a licensed loan officer in 03. Along with becoming a loan officer, he had aspirations of becoming a real estate investor. He just knew he could make money as an investor. As a loan officer, he learned the different investor loan programs, and he came in contact with other investors which he could learn from or that could mentor him toward taking the next step.

He was introduced to an investor through a friend that was interested in and actually investing in real estate himself. The investor told him about a property that was available for purchase, rent ready and a renter was lined up to move in. He went to Fayetteville and looked at the house - not having the slightest idea what to look for. Things like structural damage, plumbing, infestation; things that a home inspection would cover. Yes, he purchased the home without a home inspection. He'll never do that again! If he would have hired a Realtor, the Realtor would have recommended a home inspection.

The house had 3 bedrooms, 1 bath, built in 1942. The repairs needed included a new roof, new windows, HVAC, landscaping, paint inside and outside trim, pressure wash outside, sand down fascia boards, masonry work and new outside doors. Sounds like a lot and it was for a new loan officer living from paycheck to paycheck. He did his best - just making the monthly mortgage payment. The renters were not the most studious at paying rent. Barely having money to make the mortgage payment, he really didn't have the money to evict the tenants.

Guess what, 3 months later he purchased another investment property. This one was purchased at 80% loan to value. He did not bring any money to the table, please do not ask. He really did not know how it all went down. He went into another real estate transaction with no earthly idea of what he was getting himself into. He had great credit. He went stated income for loan purposes, knowing good and well, he could not afford the mortgage payments if the renters stopped paying and of course, they did.

His credit score fell from a 745 to a 502. He had 3 lates on both mortgages with foreclosure threatening. His friend loaned him the money to bring the mortgages current. He was able to evict both tenants and acquired new tenants. All the while, he made new contacts and was able to sell the 2nd house for $8000 more that he paid for it. Of course, he sold it to another investor who purchased the property at 70% loan to value.

The second house did not need as much work as the first. It was all brick and 3 bedrooms and 1.5 baths. It needed simple lipstick and eyeliner, about $500 to $1500 worth of work. So it was easy to sell.

He still has the first property and he's actually had most of the work done. He had a new roof put on in Nov 07 and some other cosmetic work. It still needs some work but he's ready to sell and move on to another project. He's been a loan officer and real estate investor for 4 years now. Over those 4 years he's experienced the ups and downs of the mortgage industry and real estate investment side. It is important to learn as much as possible about real estate investing before you jump in. Take classes and spend time financially educating yourself. The first move toward any endeavor is preparation and training toward the task at hand.

His involvement in financial education courses, attending real estate investment seminars, and purchasing other real estate investments has proven to be beneficial and quite rewarding. He was willing to make the necessary sacrifices to be successful in the end.

Many of his issues could have been avoided if he would have used a Realtor. Many people don't know that you can hire a Realtor/Buyer's Agent for FREE. The Buyer's Agent would've looked out for his best interests.

How to Do a Title Search on Tax Lien and Tax Deed Properties

When you do a title search basically what you are looking for is Marketable Title. Marketable title is really the absence of liens and clouds, the absence of IRS liens, and the absence of missing links in the chain of title.

Missing links in the chain of title could be for example when the original a person owned a property for 40 years and then passed away and his kids started paying the taxes and eventually they want to sell the property. Well if there was no probate or no will or anything like that, then there is no indication of who should receive this property. It might be that the deceased’s will was to give it to his church. It might be that he mentioned to somebody, “You know what, when I die you’ll get this property,” and this person might even have a witness. Nobody can prove anything and the only solution here is to have the heirs go through a probate procedure to clear the title. For that you or they will most likely need to hire an attorney and it will take a few months.

If you invest in such a property through a Tax Lien Sale, or buy the actual property at a Tax Deed Sale you don’t have to worry about that, on the contrary, if you find information prior to the auction that shows such an issue existing it is a Sign indicating to you that is property is more likely to go all the way to tax Lien foreclosure or all the way to the Tax Deed sale. If your investment strategy is to get the actual property, then that is a property you WANT to focus on.

Now just as a side note. Even if you buy Tax Delinquent Properties directly from the long time owners, some of my best deals came from situations like that. I bought a property in Florida where I paid for the Probate procedures having a written, legally binding commitment from the heirs to sell that property to me for around $350.00 after the probate was through. The probate cost me $2500.00 for a total cost of purchase of $2,850.00. Days later I sold the property for just under $30,000.00 CASH.

Probate issues do come up in the Tax Delinquent Property arena, but it’s usually quite easy to fix them. Most sellers were smart enough to buy a piece of land or a property or a house and take title as what is called joint tenants with right of survivorship. It means very simply that if there are two people on the deed and one of them passes away, the other one automatically owns 100% of the property. All that is needed to get the deceased party off title is to record a death certificate. But if a death certificate is not recorded, then the county does not know that that person has passed away, so therefore if the widow now wants to sell this piece of property, then there’s a cloud on title. If you buy it from her, you’re not going to have a clear title to sell until her spouse’s death certificate is recorded.

What is the right time to invest in real estate?

Unless you were hiding inside caves or living in the so-called dream-world, you must have heard about the slowdown in real estate markets worldwide. And just as with any other hyped-up bull market, a lot of people who had bet that prices would rise forever are getting surprises. Nevertheless, buying real estate is an investment and buying during the dips - while prices are falling - can lead to gains over time. Find some hot listings.

But remember, investing in real estate is quite unlike buying stocks. The racks at book shops, TV Shows, Corporate Handouts, and Internet Web Portals or Blogs may be overflowing with books and ideas insisting that many are making their fortunes in real estate, but the truth is, compared with stocks, real estate is a complex, multi-dimensional investment. So, if you have to buy a new home to live-in and can afford it, just buy - whether the market is up or down. Property ownership is the best overall investment, and when you look at the complete picture, it is true - there are many tax and financial advantages to owning a home, and most properties do tend to appreciate over the longer term.

But the idea of real estate investment returns should consider major property buying drivers like cost, location, condition, rental value and choice. The bottom-line is, investment property is a piece of real estate that generates income - more income than it costs to own and maintain. Whether it is a beach condo or office space, the biggest consideration is income from it must exceed the cost. The cost includes everything: loan payments, taxes, upkeep, utilities, etc.

The buying decision is not fully dependent on whether the real estate market is up or down. If you want to make a stock market type investment in real estate, consider investing in real estate mutual funds or trusts. There are many realty funds now available to Indian Investors, and as they always advise, do read the offer documents before investing!

Making Money With Real Estate With Nothing Down And Nothing A Month

At one time I owned 166 single family houses that I had bought with a minimum down payment by taking title subject to the existing financing. From the first house I bought, I used only seller financing and avoided negative cash flow problems primarily because I couldn't afford to take anything out of my meager earnings to support it. That means that I had to find ways to buy highly leveraged houses that could support themselves with a little left over for me.

My all time favorite way to buy houses in contrast to lease/Optioning houses, is to "cold canvass" neighborhoods that I want to own long term rental houses in to find a homeowner with a big equity who has to relocate out of town either because of financial distress or personal reasons. When I found such owners, in contrast to others who might have approached them with low offers, I offered to pay full appraised retail value for the seller's large equity and to take over relatively low payments so long as they were far below prevailing rents for the upscale house.

The catch was that I agreed to pay the sellers just enough money down to enable them to pay the moving company, and nothing more - neither interest nor principal -- until I sold the house at a price that would net me at least 10% profit over all my expenses.

Included in my expenses would be vacancies, repairs, taxes, insurance, mortgage payments, marketing, commissions, and settlement costs in addition to the fair market value of my management effort based upon 10% of collected rents. I usually specified that the seller would be paid no later than 5 years hence regardless whether or not I had been able to sell the house.

One day I noticed that I had a lot of balloon Notes coming due in five years, so I changed the maximum holding period to 6 years, then to 7 years. When I tried for 8, I got a lot of resistance, so stopped at 7 years.

The magic in this formula is that I was able to buy much better houses to hold for long term appreciation with very high leverage and positive cash flow that I could use to offset negative cash flow from other houses.

When I hear people mewing about not being able to buy good houses that will cash flow today, I get a little vexed that they haven't taken the time to invest in themselves by learning how structure a creative seller financing transaction that can solve problems for both seller and buyer; particularly cash flow problems.

What do you do when a seller is willing to meet your price, but wants some cash to solve his problems? Let me tell you about one such person. He was a baggage handler at the airport who wanted to sell his a house that I had sold him a few years back. (It always pays to maintain contact with old customers to whom you've sold or financed houses so they'll call you when they want to sell, or buy another one.)

He wanted $10,000 cash for his house and wanted me to take title subject to the first mortgage loan. The house had appreciated a lot since he had bought it and he didn't really want to move, but he needed $10,000 to pay some pressing family bills. The problem for me was to find the money to solve his problem. A natural inclination would be to go to the bank and borrow what I needed, but I've never done that. I pride myself on the fact that I've only signed personally on one loan; my VA loan which I paid off within a year by selling the house. All the hundreds of houses I've bought over the decades have been bought by taking title subject to existing loans and with seller financing.

Take a little test for me: Before going any further; how would you raise $10,000 without going to the bank or signing personally on a loan?

In the case at hand, the solution was fairly simple. I called one of my team of professionals, a 'can-do" mortgage broker who has both private and institutional sources of financing. He arranged a 5.5% home equity loan on the house that the owner signed. I then took title to the house subject to both the first and second liens. The owner then leased the house from me on a net basis for the amount of the first lien payments.

The payments on the home equity loan created negative cash flow each month, but I had a motivated occupant who swiftly forgot that he was a tenant and continued to upgrade the property; and I bought the $10,000 property equity above both loans with nothing down and only a little over $110 per month payments. As far as the seller was concerned, the $10,000 was at no cost, since they never had to make payments on it.

Why would he sell me the house with this financing rather than to sell it on the open market to raise cash. Because he really didn't want to move into an apartment or another house with higher payments; and have to put his kids into different schools. Being able to stay in the house was what he really wanted, and my purchase allowed him to do that.

Wholesaling Real Estate - Low Risk Investing

Wholesaling real estate can be a great way to get into real estate investing without much cash. It is also very low-risk when done right. But contrary to what many real estate gurus say, you can't necessarily do it anywhere. It will work best where there are investors ready to take the properties from you. This generally means it works best in larger towns and cities.

To understand this, let's look at what wholesaling real estate means. As you might guess, it essentially is buying cheap to sell for a profit to another investor. This other investor is the one who will then retail the property to the final buyer.

Now, if you were to actually buy a house or other real estate and close on it, you would have transactions costs. There would be more transaction costs when you sell to the next investor. Then there would be more transaction costs when he sold the property to the final buyer. As you can imagine, these costs would mean that you have to buy really cheap to leave room for a profit for you and the next investor.

For example, suppose you find a seller who really wants to sell fast, and has a house worth $200,000. By the time you close, hold the property for some time, and sell, you might pay as much as $6,000 in various costs. The other investor may want to use a real estate broker to sell, so his costs might total $12,000 or more. If you wanted to make $5,000 for your efforts, and the other investor wanted to make $10,000, you would have to get the house for $167,000 (subtract all the costs and profit from the eventually sales price of $200,000).

Of course, you won't be able to close many deals like this. The seller can probably sell fast enough just by dropping the price to $185,000, so why sell to you for less? As you can imagine, this isn't how real estate wholesaling is typically done.

First of all, you won't typically close on a property. Instead, you will sell the contract to the next investor, and so avoid all the costs associated with your buying and selling the property. Secondly, wholesaling real estate works best with fixer-uppers. Sellers cannot easily sell these on there own without doing the necessary repairs, so they are willing to sell cheap to get rid of their problem. With these two things in mind, lets look at a more realistic example.

Example of Wholesaling Real Estate

Let's start at the beginning. You look at the market, do some research and decide that you may be able to wholesale properties where you are. You join the local real estate investor's club and get to know some people. In particular, you get the names and phone numbers of at least several investors who can make a decision quickly and want to buy fixer-uppers. You should also make a note as to the type of properties each is interested in plus how much profit they expect to make on a project.

Now you go out to look for properties. Eventually you find a motivated seller who is asking $190,000 for a dirty house with problems. You compare it to others in the area and determine that it will be worth about $235,000 when it is cleaned and fixed up. It needs about $15,000 worth of work. Other costs, including a low-cost real estate broker, will run about $15,000, based on a holding time of about four months before it is sold and closed.

You want to make $5,000 for your time, and your most likely investor wants around $20,000 profit in a deal. Subtracting these and the costs, you arrive at $180,000 ($235,000 - $15,000 - $15,000 - $5,000 - $20,000 = $180,000). This is the most you can offer. You start with an offer of $173,000 and eventually the seller agrees to $177,000.

In the contract, after your name as the buyer, you put the words "or assigns" or something similar (ask a real estate lawyer for the language that is used where you are). This gives you the right to assign the contract to another investor, who will take your place and actually close the deal. Explain to the seller that this is so you can bring a partner in to be sure that the deal closes (in other words, make this a good point rather than a problem).

You also put in the contract a financing contingency with specific terms. This could be something like "This offer subject to buyer obtaining a fixed-rate 30-year mortgage loan at 7.5% annual interest or less." Alternately, you can have a clause that requires the approval of your "partner" or some other way to cancel the contract if it won't work for you. You might also want to ask an attorney how to write a clause that makes your deposit "liquidated damages," meaning that is all the seller gets if you have to back out for any reason. With the proper clauses in the offer, all you risk is your time, and perhaps the $500 good faith deposit.

Now you call your investor who will take your place, complete the repairs and retail the property. For $7,000 you assign the contract to him (however, he may not be willing to pay until the deal closes). If all goes well, he might sell the renovated property for $240,000 and make a profit of $25,000. Good for him - the more he makes, the more likely it is that you can wholesale real estate to him in the future. Your $7,000 profit requires very little investment or risk, however, so you are happy with the result as well.

Wholesaling real estate is about speed as much as anything. You may have only a few days or a week to find an investor once you have a signed contract, and the investor needs a property that sells fast to avoid holding costs. To make this work, then, you'll want a list of investors ready before you start looking for properties. You should also focus on the houses that are selling fastest - probably those that are near the median price for the area.

Real Estate Investing Guide

Everyone is looking for the best and profitable form of investment. And that means high returns and low risk. A lot of people focus on the stock market but as we all know, stock market is quite volatile these days. Real estate investment is still the better option to go.

But before you become a real estate investor, there are terms and strategies that you need to be familiar of. There are two main types of properties available in the market, residential and business.

Residential properties can either be single family or multi-family type. Multi-family units are like condominiums or town houses. Single-family units are independent and have an own backyard.

Business real estate properties can be office buildings or manufacturing sites. Visibly, the main differences between residential and business real estate properties are the finances involved and as well as the rules and guidelines in obtaining the property.

Investing in a residential property is the simpler choice. Before you decide on your first residential property, it is important to conduct a research on the following areas:

a) Market value Research for comparative rates of neighboring properties is important, as this will give you a lead on how much the property is worth.

b) Location Proximity to schools, supermarkets or train stations are some of the considerations that potential buyers look into.

c) Neighborhood Safety and the type of neighborhood are also critical in every investment.

There are three main residential investment types. First is to buy a property, live in the property and do some fixes along the way. You can then sell the property once the market is ripe.

Second type is what is called “flipping properties”. This type is a good way to maximize the profits of your investment. Flipping properties involves finding a property that is under priced at the current market rate. Examples are the abandoned houses or neglected homes that are sold at usually lower price. Once you get the paper work done, you can start doing the renovations and after that re-sell to the market at a much higher price. In some cases, the buyers hold on the property for only several months and after that sell back to the market. This is an easier way to get a faster return of investment but you should be careful also in choosing the property. Depending on your budget, choose the property that needs only light fixes and not major renovations that will incur even higher costs than buying other market value properties.

The third type of residential investment is rental properties. This means you will be a landlord renting out houses or rooms to the tenants. This is also a good form of investment but do note that as the property owner, you need to take care of the maintenance costs of the property.

If you think there is much work that needs to be done in finding the right property, you can always hire real estate agents to help you. Just make sure you communicate your requirements well and your considerations to the agent.

Most importantly at the end of the deal, make sure you have the title or deeds and other necessary documentations involved in the property.

How To Invest In Out-of-State Real Estate

The process of investing in out-of-state real estate is not any different than investing in real estate in your own community. You have two choices. You can do it on your own or you can work with a professional and reputable real estate company.

To an extent, investing in out-of-state properties has developed a negative stigma because investors have had bad experiences. Sometimes the problems arise because an investor "jumped" into a situation based on poor information provided by a friend, family member or business associate. Other times a bad situation is created by individuals or companies who are promoting themselves as "experts" in out-of-state real estate investing. Frankly, many out-of-state real estate companies don't have any idea what they are recommending, have never been to the area they are recommending you invest in, and don't care what you buy. They are simply looking for a way to get a pay check.

Before you invest, ask these questions:

1) Are they licensed and do they carry the proper insurance?

2) Is working with investors to purchase out-of-state properties the only focus of their business or is it something they do part time?

3) If they are a mortgage company, do they only recommend that you invest in areas/states where they are licensed to write loans? If so, what does that tell you?

4) What type of research do they conduct? Do they travel to every location they recommend? What demographic studies have they done? What reports have they read? Do they subscribe to any real estate investment newsletters they could recommend you read?

5) What services to they provide? Do they provide referrals for brokers, property managers and mortgage companies? Do they provide an escrow coordinator throughout the escrow process?

6) Are they recommending you become a speculator or an investor? (Speculator: get rich quick, big promises, take a chance. Investor: long term, buy & hold to create wealth)

7) What areas are they recommending you invest in? We can't stress this enough. Are they doing what is easiest for them or best for you? Ask them for verification for everything you're told (rental comps, sales comps, cash flow analysis, current appreciation rates - not last year's appreciation rates, projections and demographics).

8) What types of properties are they recommending you buy? Are they matching your goals, tolerance level and financial abilities with properties that will help you achieve your goals? Or are they just selling you anything so they can make money? DO YOUR DUE DILIGENCE!

9) How long have they been in business of out-of-state real estate investing?

10) How many rental properties do they own and where?

How To Fill Out An 'Offer To Purchase' Real Estate Form

Before you can buy the house of your dreams, there's one very important document that you need to make and submit to a home seller. It is the offer to purchase real estate or purchase offer which usually serves as the sales contract between the buyer and the seller. Without this and the signature of both parties involved, the transaction cannot be considered legal.

A standard purchase offer form may be used in all states in the U.S. However, you can always make your own offer containing the special conditions appropriate to your needs. You just need to include all the required details to push through with the deal. It is truly essential that you fully understand the contents of a purchase offer before filling it out and submitting it to the home seller.

In making your offer to purchase the property, be sure to consider several vital factors like your financial capability, the condition of the home you want to buy and the prevailing market status. Your financial resources play an important role in determining how much down payment you can provide, what type of financing you will use and your ability to shoulder the closing costs.

Below are some of the basic information that you need to provide in a real estate purchase offer form.

Full names of the buyer and the seller. Of course, this has to be identified to make the agreement enforceable.

Address and legal description of the property. The price you are willing to pay for the house.

Terms of payment and the down payment amount. This specifies how you will finance the purchase of the property if it's through a mortgage loan or other options. It would also benefit the seller if you provide information as to your pre-approval or pre-qualification for a real estate mortgage loan. The amount and form of your earnest money deposit. This serves as a proof that you are serious in purchasing the property. It can either in be in the form of a check payable to a third party who is responsible for placing the amount in a trust account until the completion of the sale. The deposit can be credited in full towards the purchase price.

Expected date of transferring title and possession of the property.

Responsibilities of the seller in terms of a clear title transfer and deed type.

Information as to which personal properties are included in the sale. Time frame for acceptance of your offer. This stipulates the amount of time you are giving the seller to accept your purchase offer after which it will expire.

Provisions for a final home inspection before closing. Requirements that may be specific to your state or location are also included in the form. Special clauses or what are known as contingencies that need to be met to close the transaction are written above the signature block. These serve as protection for the buyer should problems arise along the way. Some of these contingencies include terms on who will pay the closing costs, the date the owner of the property should move out, the date of transferring title and possession, financing terms as well as home inspection.

As always, never fail to do your research to be able to achieve a smooth and successful transaction process.

Property Valuations: Speculation or Fundamental-Driven?

The process of valuation of any asset class (including real estate) is one of the most debatable concepts in finance. Sure, valuation is certainly a subjective assessment of different factors, but it must reflect a true and fair value of an asset and not a figure presented in the sole interest of the builder or seller.

Valuation of property impacts all players in the real estate market viz. developers, buyers and sellers, financiers and investors, lending agencies and project appraisers, regulators and tax collectors. In the developed markets, Real Estate Pricing and Valuation is organized on the basis of intellectual contribution to the appraiser decision making and valuation accuracy, application of non-traditional appraisal techniques such as regression and the minimum-variance grid method, appraising contaminated property, ad valorem tax assessment, and new perspectives on traditional appraisal methods.

Though Indian real estate is not as mature yet, developers are adapting to the process of valuation lately. In the process, valuations have gone up dramatically and they are unsustainable. Real estate valuation practices in India have resulted in overvalued properties in many sub sectors like apartments, bungalows and commercial centers and have fueled the appetite of speculators.

Many investors may find themselves trapped in illiquid sectors where either the value of their investment has eroded in real terms or where returns have remained low when taking into account the opportunity cost of holding such investments. Prices are already going down in many regions and there is still more room for correction. For the longer term, things looks pretty good and people who did record constructions last year are talking about constructing more in the next year. Currently, these targets are difficult to accomplish as execution would be a big problem and this will impact their stock prices.

Though lot of money is available as equity, debt comprises 60-70% and property developers are stretching themselves with too many projects at the same time. Larger companies are still well positioned financially, but valuation remains a critical issue. And as India lacks an organized supervisory body for property valuers, we wish to provide some helpful tips in our upcoming issues in order for small investors to make a wise investment decision when considering a valued property.

Residential Investment Properties as Alternative Income

Lately, there has been an increase in the number of people acquiring residential investment properties. If managed properly, they can provide you with a steady source of income for a number of years, or until you decide to sell.

Residential properties are different from commercials ones in that someone is making a home there. You become the legal landlord, and, therefore, responsible for the upkeep of the property. In addition to keeping the location livable, you must be ready to take care of problems as they arrive.

This may seem daunting for some, but there are reasonable solutions to such common problems. Unless you are a professional do-it-yourself wiz, your best bet is to hire a management company to maintain and repair the property when problems arise.

This may seem like a hassle at first, but you have to consider the results of keeping a rental home in good repair. No one wants to live in a run down dump. If you don't maintain the building, then no one will want to rent. For you, that means no revenues from your investment to pay for the mortgage due every month no matter what. Additionally, you want to keep the property in good repair because when you decide to sell it, you want it to have appreciated.

When you decide that you are going to assume ownership and care of a residential investment property, be prepared to commit yourself 100%. It takes time and sometimes your personal money to keep the property generating revenue. The money that the rental makes should pay for its maintenance at the very least. Ideally, it will also return a profit.

You can expect two types of revenue from your investment: yield and capital gain. The yield is what you can expect from rent annually. The capital gain is the appreciation value once you've resold the property. Keep in mind that high yields usually generate low capital gain and high capital gain generates a low yield. For your investment to be the most profitable, you should try to balance these two revenues.

Committing to the responsibilities of a rental is the first step towards getting that lucrative real estate site. The next major step is getting financed. Most people looking to invest in a rental property don't have the ready cash for a down payment. There are a multitude of means you can pursue to get financing.

Residential financing is different from commercial financing because of the nature of the business. The profit is not expected to be in the hundred thousands or millions and the mortgage terms are usually long term. This creates diversity in the market, allowing you to have greater control over payment options, interest options and term length options. Additionally, if you own a home, you can secure a home equity loan to cover your down payment. As a residential investor, you have the potential to turn a nice profit. Your success depends on how much time and effort you are willing to commit to the project as well as how you secure your finances. If you manage these things correctly, the likelihood of your success improves.

Steps for the Beginning Real Estate Investor

In all my searches for information on real estate investing, I have not found many articles about what it really takes to become a "real estate investor." There are lots of ads, and lots of people who want you to attend their classes while taking large chunks of your money, and then of course the personal mentoring, which takes even more of your money. Now that we have jumped into the field, I want to share our observations and lessons learned. It's important to do your homework: research all the different avenues of education, decide how much money you have to invest (yes, you do need to have some cash, despite what all those "teachers" say), decide how much risk you can tolerate, because investing in real estate is not like purchasing $1000 in stock. You are purchasing a high-ticket asset, with value anywhere from tens of thousands to upwards of millions of dollars. And last but not least, you must be prepared to work hard and be persistent. It is not a part-time gig, no matter what those multi-gazillionaires claim. Following are four basic requirements that you will need in order to be successful.

You must have a desire for learning and continuing education, in whatever form it may take.

It is extremely important to take classes, attend seminars and read, read, read! Lots of people have followed teachers like Robert Kiyosaki, Donald Trump and Carleton Sheets. They all have powerful information to offer. But remember: giving us this "education" is their business. They are making money doing those seminars and boot camps, and making tons of it. You need to know that there are several different methods to make money in real estate (wholesaling, retailing, rehabbing, buying/selling contracts, renting, property management, commercial, etc.) Remember, each teacher has a different angle and each made their money in different manner. You need to decide which avenue is the most comfortable for you and go from there.

The Learning Annex provides good exposure to several different methods of making money in real estate and you can pick and choose whose methods you would like to learn more about. It is much easier to get into the business by focusing and learning one method at a time, and then move on to other avenues if you wish. You will only get overwhelmed trying to do everything at once.

It is also important to look at different types of education, including college courses and the internet. The single best tip you can follow is to join your local Real Estate Investment Club.This is a low cost way to start your education and also build contacts, which is extremely important in this business.

You need to have some cash to start.

Part of the hype from teachers of real estate investing is saying you can get into this business with "zero money down" or no money out of your pocket. The truth is, you really do need to have some cash in order to begin investing. Not only will you need some kind of down payment (anywhere from $500 to $5000), you will also need seed money for starting up your business. Remember, the days of 100 percent financing of properties is gone. You most certainly will need to come up with a down payment for your first investment property. Additionally, you'll need money for starting your business. You might need to purchase equipment - both for your office and to do rehabbing. You will need professional consultants, an accountant and a lawyer. If you have left your J-O-B to pursue this business full time, you will need to replace your income until you get another income coming in. And don't forget the cost of the education, classes seminars etc.

You need to have a comfortable tolerance for the "risk" you are taking on in this investment.

Buying and selling real estate is a risk - make no mistake, and it is a very LARGE risk at that. Part of the problem with the real estate market today is because [mostly novice] "real estate investors" rushed to cash in on rapidly escalating prices of real estate. Econ 101 - supply and demand. They bought recklessly, not intelligently, and now find themselves stuck with properties (whose values are resetting just as quickly) that they can't unload. You must be aware at all times that any purchase you make, you must be prepared to hold if necessary. This is investing 101. Pay attention to the market.

You must work hard and persevere.

When it is all said and done, real estate investing is work. If you are coming from the corporate world where the work day is very structured and organized, working for yourself as an investor may come as a culture shock. Again, real estate investment teachers will tout "work for yourself" and "work your own hours." They give the impression that you can come and go as you choose and work when you want. While this is partly true, you must also possess the self-discipline to sit down and perform the work you need to do in order to accomplish your investment goals. It is not as easy as it sounds. There is lots of research, the attention to business details such as book-keeping and stocking your office, searching for, then working the deal, completing the details of the deal (contracts, lawyers, titles, etc.) and then of course rehabbing the property, (or hiring and supervising rehabbers) if you intend to keep it.

Just as Murphy's Law states, you will inevitably encounter road blocks along the way, some minor and some major. It is important not to give up or allow set backs to derail your progress.

The investing mantra is "Buy low. Sell high." Current market conditions make it one of the best times ever to invest in real estate. Just remember, nothing is as free or easy as some "teachers" would like you to believe, all while they take your money to the bank. Just do your homework, choose intelligently and spend your money wisely. Learning Real Estate Investing can be overwhelming, but it is worth all your efforts.

Easy Tips for a Greener Home

Today's consumer is getting smarter, and more sensitive. As the trend toward greener buildings continues to grow, how can you as a home seller increase the green value of your home? There are many inexpensive easy ways that you can move towards creating a greener home environment.

Electricity - This is especially beneficial when potential buyers ask about the utility costs. Shut down and unplug appliances that you aren't using. Turn off the lights when you leave a room. Look for energy efficient appliances when you're upgrading.

And while we're thinking about energy efficiency - Be sure to seal any cracks and drafts. This will help to lower your heating costs. If you have the money, look into thermal paned windows. They aren't cheap, but they are a selling feature.

CFLs - That's compact fluorescent light bulbs. They last longer, cost less to run and come in a variety of colors and brightnesses. Just remember to recycle them properly at the end of their life span as they do contain substances that shouldn't get into the environment.

Programmable thermostats will keep your home warm and cozy when you're home and cooler at night or during the day when your out. Your days of forgetting to turn down the heat before you leave the house are over!

And when the heat outside is necessitating cool inside, consider installing ceiling fans. These will circulate the cool air reducing the need for air conditioning at a fraction of the price.

Keeping it cool in the laundry room can also save you money - washing your loads in cold water instead of hot will lower your energy bills and keep your clothes looking newer longer. Hanging things to dry will only add to your savings.

And while we're on the subject of cleaning, let's talk about cleaners: in case you hadn't noticed the warning labels let me spell it out for you: T-O-X-I-C. Not just for you, but for your children, your pets, and the earth. Plus certain chemicals can irritate health problems including asthma and other respiratory issues. Switching to a friendlier product can make visitors more comfortable in your home.

Speaking of visitors - how about the birds and the bees? What kind of chemical stew are you spreading on your lawn, and how can you minimize it to create a healthy yard for your family with less potential harm to our water supply? Look into native vegetation that require less fertilization and plants that attract bird and beneficial bugs to your landscape. Not only will this decrease your risk, good landscaping can increase the value of your house by up to 15%.

A compost - If you have property, a compost is a great way to take care of those kitchen scraps and yard waste. A well taken care of compost (well taken care of being key - buyers do not want to see a stinky mess!) not only produces nutrient rich soil for the garden; it's an easy way to do your part.

So there you have it - some easy ways that you and your family can enjoy a greener home, and increase the green value of your property. Today's consumer is looking for convenience and a conscientious product; by making a few minor changes you can supply them with both.

What is the right time to invest in real estate?

Unless you were hiding inside caves or living in the so-called dream-world, you must have heard about the slowdown in real estate markets worldwide. And just as with any other hyped-up bull market, a lot of people who had bet that prices would rise forever are getting surprises. Nevertheless, buying real estate is an investment and buying during the dips - while prices are falling - can lead to gains over time. Find some hot listings.

But remember, investing in real estate is quite unlike buying stocks. The racks at book shops, TV Shows, Corporate Handouts, and Internet Web Portals or Blogs may be overflowing with books and ideas insisting that many are making their fortunes in real estate, but the truth is, compared with stocks, real estate is a complex, multi-dimensional investment. So, if you have to buy a new home to live-in and can afford it, just buy - whether the market is up or down. Property ownership is the best overall investment, and when you look at the complete picture, it is true - there are many tax and financial advantages to owning a home, and most properties do tend to appreciate over the longer term.

But the idea of real estate investment returns should consider major property buying drivers like cost, location, condition, rental value and choice. The bottom-line is, investment property is a piece of real estate that generates income - more income than it costs to own and maintain. Whether it is a beach condo or office space, the biggest consideration is income from it must exceed the cost. The cost includes everything: loan payments, taxes, upkeep, utilities, etc.

The buying decision is not fully dependent on whether the real estate market is up or down. If you want to make a stock market type investment in real estate, consider investing in real estate mutual funds or trusts. There are many realty funds now available to Indian Investors, and as they always advise, do read the offer documents before investing!