Posts Tagged ‘real estate investing’
Friday, October 28th, 2011
Since the beginning of the economic collapse and financial meltdown of 2008 standard banking and lending have been hit hard. As many of these people didn’t understand what exactly was coming they have endured the consequences of a depressed economic system, probable foreclosures on loans, loss of their job, or unreliable income. For credit seekers in this kind of situation, financial institutions are not conducive to assisting folks in obtaining financial loans. The rules are usually overly stringent to permit such consumers to meet the criteria for the loans they desire.
One option to low income or low credit prospective borrowers who own property is hard money loans. Private money lenders (or “hard money lenders”) can grant these loans. Hard money lenders provide bridge loans, which are short term loans based on a percentage of the total value of the borrowers property or real estate holdings. The borrower uses property or real estate holdings such as undeveloped land, business and/or commercial property, a personal residence or multi-family property as collateral for the loan. Should the borrower default on the loan payments, the hard money lender could become owner of the property used as collateral.
There is variable called the loan to value ratio which hard money lenders base the amount of the loan on. This LTV ratio allows the lender to determine the size of the loan based on a percentage of the total commercial value of the property being used as collateral. Frequently hard money lenders will offer only 65% or less of the total property value. If a borrower requires more money than that they can sometimes put up additional property for collateral.
More options can be offered by hard money lenders because they focus only on lending out money rather than storing or managing money as banks do. With hard money lending you can get around some of the onerous regulations involved with typical lending. For a borrower, this can be an advantage but regulations for hard money lenders vary state by state as well as by whether or not the borrower is an individual or a business.
There is always a price to paid for a premium service like that which you can receive with a hard money loan. Since the regulations applying to hard money lending are typically less strict that with conventional banking, many borrowers may get a loan where they were denied before. Of course the rate of default will be higher with less stringent application requirements and that higher rate is typical of the hard money lending industry. To compensate for that high rate of default, hard money lenders will charge a higher interest rate in addition to using collateral. But even with the higher expense, hard money loans are a very good option for many borrowers, including real estate investors.
Locating a an excellent hard money lending expert can definitely make a huge difference during your search for the best loan service.
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Friday, September 23rd, 2011
Real estate investors have found brand new business opportunities, since the economic depression began, for flipping family homes as well as other real estate to make money. Yet, not all have the funds sitting around to invest, hence they choose hard money loan merchants. Hard money financing can be provided by hard money lenders for these real estate purchasers. This loan provides the investor with the money needed to secure the property and flip it for more money. Hard money lenders are unlike typical banks and have a different procedure.
A hard money loan is a short term loan that is financed by private companies or individuals. The requirements of this kind of loan are quite a bit different than a real estate loan given by a bank. The guidelines are less strict and the interest rate is always quite a lot higher. A hard money loan can be indispensable for providing a large income to real estate purchasers after the loan is paid off. The repayment terms also vary depending on the loaner.
You should, before obtaining a hard money loan, do some research on hard money lenders. The internet, local advertisements or word of mouth are all ways in which you can find hard money lenders. Once a hard money lender is selected, the process can begin. Less attention is paid to the credit of borrowers but nevertheless lenders need to protect their cash. There are a variety of documents that they may ask you to be submit, including a credit application, tax returns, W-2′s, bank statements, check stubs, or others at their discretion. But the loan will usually be given more expediently than a bank loan.
There are some disadvantages of using hard money lenders instead of banks. The interest rate that a hard money lender can charge varies. Typically one can expect an annual rate of 10% to 20%. From a few months to a couple of years is usually how long the loan term will be. Most buyers like to flip their property in under a year, the sooner they pay the loan, the more money they make. In addition to the interest rate, there may be upfront fees or closing costs that must be paid to the investor, this varies by lender.
One can borrow varying amounts of money. This amount depends on the value of the property for which the loan is for. Factors that are looked at are the cost to purchase the property, the amount of money it will cost to repair the property, and the value of the finished house. The amount a hard money lender is willing to loan depends upon the final value of the home. As an investor you want to make sure the final selling price minus all the expenses of the house, and after all payments to the lender have been made that you still will be making a profit.
If a real estate investor decides a hard money lender is the best route for the property, they need to do their research, make sure the hard money lender is reputable, and it also helps to check with their state regulations. You will want to make sure you’re not violating any state laws, as different states have different regulations regarding hard money lending.
More about hard money lenders as well as details about hard money lending can be learned at Stephen Von’s highly informative website.
Tags: Bankruptcy, foreclosure, housing, investing, lenders, lending, loans, money, mortgage lending, mortgages, real estate, real estate investing, refinancing, Uncategorized
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Wednesday, June 29th, 2011
A home’s price is often a prime consideration for a home buyer. Excluding other more important sacrifices like size and location considerations, most buyers tend to think buying cheaper is always better. Since the economy has been hard-hit recently, housing prices are a lot lower than they once were. A good majority of homes on the market today are short sales.
Short sales occur when a home owner falls behind on their mortgage payments. Instead of going through the foreclosure process, which can be emotionally draining for everyone involved, the home owner’s mortgage lender agrees to allow the home owner to try to sell the home for a lesser value than what’s still currently owed on it. This can be a great deal for a would-be buyer, but it’s not without its caveats.
If you are considering putting an offer on a home being offered up at a short sale, there are a few things you should know. First, the seller’s acceptance of your offer is only the first part. Since the home is being sold for under what is still owed on the home loan, the lender will be taking a financial hit as a result. This also means that the lender has the final say as to whether the offer is accepted, not the seller. While the seller might accept the offer relatively quickly, it could take the lender weeks or even months to accept the very same offer. If you’re trying to purchase property quickly, this may not be the best way to go.
Short sales also might be more costly than you originally imagined. Most lenders stipulate that the home is being sold as-is. While you can still have an inspection done – and should, as you don’t want to purchase a home with major defects unknowingly – if the inspector does find something wrong with the property, it’s on you to fix it. The lender will likely not be open to negotiations in that regard.
Short sales can consequently be a good option if you’re looking for a deal of a home to buy. Just be sure to note the pitfalls and keep your expectations realistic during the process.
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Wednesday, June 29th, 2011
Have you considered investing in real estate? Do you not know the best method to do this? There are a lot of options out there, to be sure. Careful research is key to finding the best one for you. The SEP is just one of those options.
Often found in another acronym-laden product called an IRA, the SEP is short for Self-Employed Pension. An IRA is probably a term with which you’re more familiar, and it is short for Individual Retirement Account. Saving and investing money to use your during retirement via an IRA is just one of the many methods available. Employers can simplify the method by which to make contributions toward their employees’ retirement by means of an SEP plan. The IRA is where contributions are usually made directly.
SEP IRAs can be used in real estate investments. There is more than one way this can be done. The most blatant is to invest in a specific and individual property. Other options for SEP IRA holders who want exposure to real estate investments include Real Estate Investment Trusts (REITs) and Exchange Traded Funds (ETFs).
A collection of funds employed to purchase and operate a real estate portfolio is what REITs are. Residential property and commercial buildings such as office space, vacant or forested land and other things are included in this. Your yield if you go with this option could be high, because federal laws require that at least 90 percent of profits be paid to the investor. On the other hand, ETFs are a collection of multiple investments. Since it divides the risk that is generally associated with a specific piece of land, REITs and ETFs both tend to be superior options over investing in specific properties.
Investing your SEP IRA into real estate can consequently be a wise decision for someone hoping to earn even more money toward their retirement. There are a myriad of different ways to do this. You can invest in specific properties or diversity your risks by going with an REIT or an ETF. Consulting a financial advisor may also be a good option before making a choice on how to invest.
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Tags: business and finance, finance, general, home, investing, investments, Miscellaneous, money, money and investing, real estate, real estate definitions, real estate investing, real estate investment, Uncategorized
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Wednesday, June 29th, 2011
If you’re considering purchasing a second property to help supplement your income, there’s no better time than now due to the decrease in current home values. Finding an affordable way to purchase a second property is the key which will allow you to earn additional money as you go. A second property investment can currently boost your financial prospects in the right direction if you go about it correctly after buying it. See below.
First, consider all possible uses for your property investment. Will a family vacation home be its ultimate purpose? Although a viable option for you and your family, it’s not exactly the best way to get additional investment income. If you’re willing to allow your new property to be rented out though, the tenants might very well be the ones footing the monthly mortgage bill. Since homes tend to appreciate in value over time, you might be able to eventually put it back on the market and earn a profit.
Renovation projects are also an option. Buying a fixer-upper type of property at a relatively low price and upgrading the interior before selling it once more has the potential also to be a wise way to invest money into a second property. Home buyer beware, however: If you do something like this, you just might end up finding the costs of renovation too steep to really make much of a profit when you try to sell it later on. If the market hasn’t improved much, you might not be able to get back what you put into it, even if the house ends up being appraised for that value.
There’s also financing. In the first place, how do you get the money to invest in a second property? Most people tend not to have extra money just lying around with which to make that purchase. Using the equity in your first home to finance the second is one common method. A home equity loan is how this can be done. Lending institutions generally require proof that you’ll be able to generate enough income to make it worth their time to loan you the money in the first place for a rental property loan.
It just comes down to doing your research ultimately. There are multiple ways to make money and to finance your purchase if you want to invest in a second property. So you can narrow down the right option for you in the end, make sure you know all of them.
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Friday, June 10th, 2011
Capitalizing on the economic recession, building some real estate equity and earning some money in the process are all things people are interested in currently. There are tax benefits to be had in rental property, so this is one good way to achieve these goals. If you don’t want to be a landlord, though, which is something most people don’t even consider, you probably shouldn’t use this method.
Here are some of the tax benefits that come hand-in-hand with owning rental property, first. What you should consider doing first is look at your excess mortgage interest and assessed taxes and write them off. Upfront costs are saved, something any real estate owner can appreciate. Any mortgage points you pay must be amortized, not something you’d usually do on your primary residence, so take note.
Next, you can write off any operating expenses you could feasible incur as well. You can write off, for example, any utilities you have agreed to pay. The same goes for expenses going toward repairs and maintenance of the property, as well as insurance premiums, and homeowner association fees if you own a condominium or a townhome, as just a few examples. While its value is still hopefully increasing, you can also depreciate the cost of your rental property over approximately 30 years.
This all probably sounds great. Keep in mind, though, that you also have to deal with any tenants to whom you rent out the unit. Some tenants are great. They maintain the property, pay rent on time and notify you whenever anything major occurs that needs repairing. Many others are not, however, and this is where the limits of your patience and determination must be assessed before going forward. What if your tenant doesn’t pay rent for three months straight? What if they destroy something integral to your property?
You consequently have to know your own limits, even though the benefits of rental property tax advantages are great. This might be a wise choice to generate extra income in the real estate investment sphere, though, if you think you’re up for the challenge of being a landlord.
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Thursday, June 2nd, 2011
Looking to capitalize in a down economy? Consider purchasing a tax lien in a tax lien sale. Unsure of what exactly that is? Here’s a general overview to arm yourself with enough information to make an informed decision on whether this investment strategy is appropriate for you.
When homeowners become delinquent on their property taxes in any given year, local municipalities can impose tax liens against them. Most people who become delinquent on their home mortgages are additionally unable to pay their property taxes, so foreclosures and property tax liens often go hand-in-hand. Consequently, there exists an opportunity for the savvy investor to take advantage of tax lien sales, so the tax lien that has been purchased will earn interest every year. It is also possible for an investor to become an owner of foreclosed upon property.
Potential investors should look into the statutory law in the jurisdiction in which they want to purchase, since the process varies from state to state. Investors in most states can be assured a return on their capital and the interest earned on their purchased lien, if the homeowner manages to get caught up on mortgage and property tax payments, thus redeeming the property in question. Just like the time allotted to a homeowner to redeem the property in question, however, the interest rate you can earn varies from state to state.
A practical investor has the potential to further increase their earnings when a homeowner is isn’t able or refuses to redeem the property. An investor may attempt to gain title of the property in question by filing suit. If done properly, the investor can officially own the property, although the process of filing suit can at times take a long time, be complicated and costly.
There are risks involved with purchasing a tax lien, though. It is important that an inspection take place on the property before an investor decides to buy a tax lien to ensure any home that remains on the property is also undamaged. It should also be confirmed by an investor that the applicable municipality worked in compliance with statutory guidelines during the time the tax and lien on the property was actually imposed. Also note that if the redemption period in the state where the tax lien was purchased exceeds a year, an investor must pay taxes each year to attain another lien.
As a result, if an investor takes steps to ensure an understanding of the risks and overall process of a tax lien sale, purchasing a tax lien in a tax lien sale can be a wonderful investment strategy. In the end, the key to reaping the investment benefits offered by a tax lien is patience.
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Wednesday, August 4th, 2010
Properties can have tax liens placed upon them when the owner hasn’t paid off the tax debts owed the state and/or federal government. The government entities responsible for collecting said taxes will try to make contact with and inform the owner of their debts several times before enforcing tax liens upon their properties. If this were the happen the owner would still have several options for paying off their taxes and getting their properties released from the tax liens.
Tax liens can add a negative hit to the owner’s credit record making it hard to secure and build credit. Tax liens also create a situation where the owners cannot transfer the title or use the property as collateral until the property had been sold. There are several ways that tax liens can be paid off though, so that these situations don’t arise or are resolved quickly.
One of the most common ways that people pay off their tax lines when their property is already mortgaged is by the lender paying the upfront costs and creating a repayment plan with the owner through that is attached to their mortgage payments through an escrow account. Mortgage lenders do this to avoid the risk of the government selling off the property and the lenders then being unable to recoup the money they lent out for purchasing it.
If you don’t want to keep the property you can easily sell it, despite the limit put on the transferring of the title. You can accomplish this by writing the tax liens balance onto the closing costs of the buyer’s contract. Many people find this is one of the easiest routes to take and by choosing this route you don’t have to be responsible for remembering any future taxes placed upon your property.
Some owners don’t even want to fuss around with selling the property and for them the option is left open of ignoring the situation and letting the government seize the property. When the government does this they offer the property up for sale at a tax deed auction or sell it to investors as a tax lien certificate.
These three options are available to owners in order to handle the situation of tax liens being placed upon their properties. Each one is easy, in its own right, to deal with. Owners can either put a little bit of effort in that will go along way or simple ignore the tax liens and let the government tax the tax liens away.
If you want to find out more about Tax Foreclosure Properties, then visit No Risk Investor and see how to choose from among the best Tax Lien Foreclosure Properties.
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Tuesday, June 29th, 2010
Tax Deeds come about because Counties have specific budgets that have been determined according to the property taxes in their area. These budgets allow the County to function and their programs to continue. When property owners fail to pay their taxes this creates a deficit that counties must find a way to decrease, so they sell Tax Liens or Tax Deeds. This is a great opportunity for investor who might be interested in buying real estate to learn about the market. Real estate an exciting investment venture and Tax Deeds a great starting spot for new investors.
Some counties give property owners the chance to come current on their taxes and some do not. Either way if owner doesn’t pay the taxes the Tax deed gives the new deed owner the right to purchase the property. In this case you can purchase the property at a fraction of the value and receive a huge return on your investment.
If decided to take advantage of the opportunity to buy it you will be able to decide what to do from that point. Real estate investment can be sold as is for a pretty good profit since you’ll probably buy it way under value. You can also a little more money on your investment and fix it up before you sell it which will increase you profit. You may want to hang onto the property for a while, rent it out and then sell it later after the property value has increased even more.
Tax deeds are purchased at auctions or tax sales set up by the county. You can go to the county office and request information on the properties that will be at the auction before it takes place. You may even be able to go look at the properties and do some on site research, so you know exactly what Tax Deed are you bidding on.
You can put start investing by putting in as little as $50 or go bigger with $100,000. You can be successful invest at any level, as long as you do your research and put in the time to make sure you know which properties are worth putting your money into.
Eventually, you can spend as little as a few hours a week on this investing and make a good profit. However, you’ll want to spend some time when you start getting to know the market and you’ll want to talk to someone who has done this before to learn some of the tips and tricks of the business.
If you want to find out more about how a Tax Deed sale works, then visit No Risk Investor and see how to choose from among the best Tax Lien Foreclosure Properties.
Tags: business, coaching, family, foreclosures, general, homes, investing, real estate, real estate investing, tax deed sales, tax lien certificates, taxes, training, Uncategorized
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Friday, June 4th, 2010
Ever been given something for not doing anything? It is simple human nature. The problem is that there are very few things in life that are free. However, there are some things in life that you can get for next to nothing, and believe it or not, property is one of those things, that is if you happen to buy property through tax deed sales. This really does work.
Property taxes are owed by anyone that owns properties in the US. However, things happen and there are those individuals who find that they cannot pay the taxes that they owe. If this happens, after all efforts are made to collect those taxes, the local government that the taxes are owed to will auction the property in order to be paid.
Tax deed sales usually make investors rich in a couple of ways. Either the deed is sold to investors who allow homeowners the opportunity to eventually buy back their property for the cost of the deed plus interest. However, the more common way for local governments to handle unpaid property taxes is to put the property up for public auction. This is called a tax deed sale. These things are for real.
The neat thing in regards to a tax deed sale is that you may end up purchasing a piece of property for a lot less than you would if you were to seek out a property for sale in a traditional way. However, it is important to note that this is not always the case. a cookie-cutter scenario.
If you find a piece of property on auction for five thousand dollars, for example, and you expect to only pay five thousand dollars, you may end up being sorely disappointed, tax deed sales don’t often work that way. An auction means that the price will probably increase from the base price, so be prepared to pay at least a little more than the taxes and fines for the property.
Every auction can be attended by anyone and you don’t have to be a part of a club or purchase a list to find these tax deed sales. However, some lists are very inexpensive and it can be very convenient to have a list all in one place rather than doing searches for yourself. This is especially true if you are purchasing property as an investment and you don’t care what state it happens to be in. This is a situation where using someone elses the whole process a little more pleasant.
If you want to find out more about tax deed sales, then visit No Risk Investor and see how to choose from among the best tax lien foreclosure properties.
Tags: business, creative real estate investing, family, general, homes, investing, real estate, real estate investing, tax deed sales, taxes, Uncategorized
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