Real Estate
How to Rent Your Own Home From Your Children, and Why You Should!
December 29, 2011 | 
Author 
The estate tax recently lapsed in 2010. Congress didn’t renew it because they were too busy worrying about health care reform. That means that if you die in the year 2010, you won’t owe any estate tax. Yes, you read that right you will not own a single penny in estate tax for 2010.
But you can bet Congress isn’t going to be idle, they have the whole rest of the year to pass a new estate tax law. And with the Democratic Party running Congress at the moment, you can expect that they’re going to try everything they can to charge you as much tax on your estate as they can get away with. They’re very open about it; it’s one of their main goals after health care reform.
Now there are many different things you can do to lower your potential tax liability when it comes to estate planning. There are Trusts of a zillion different stripes that you can set up that will tailor to your specific situation. Of course you need an accountant and a lawyer who specializes in estate planning and asset protection to set these things up…
One of the easier ways to plan for your estate in order to minimize taxes is to make sure that you don’t have much by way of physical property that the government can tax when you pass away. No I’m not suggesting that you become poor, just that you plan accordingly.
One way to do this is to sell your house to your children now, and pay them rent each month. This way you get to enjoy living in your house, but you don’t own it. So when you die there’s nothing to tax.
The idea is to pay rent roughly equal to what your children will pay for a mortgage to buy the house from you. For example if your kid buys the house and takes out a loan that he or she has to pay $2,000 a month for, you would pay him $2,000 a month in rent. Where do you get the rent money? From the proceeds of the sale of your house of course. You get the idea…
There are a few things that you have to keep in mind when doing something like this. The IRS will scrutinize these sorts of arrangements very closely so you have to be careful not to get tripped up. Here are a few things to look out for…
Be sure to sell the house for its fair market value. If you sell it too cheaply, the IRS may consider it a gift to your children and apply gift tax.
Next, remember that the mortgage interest that your children pay is deductible to them, however it is taxable to you. That is to say, you can’t really deduct rent payments like you can mortgage payments… and if you’re used to deducting mortgage payments on your tax return, this may take some adjusting and getting used to varying it.
Next, realize that the rent payments that you pay your children each month are taxable income to them. That means that they will have to pay taxes on that rent.
Finally make sure you have documented all of this scrupulously. Make sure you create and sign an actual rental agreement between you and your children, and make sure that you actually pay the rent each month. And be sure to keep records of all the rental payments. The more specific documentation you keep, the more realistic the whole thing looks in the eyes of the IRS.
By: Jason Markum
Posted in Real Estate | 
Tags: Accountant, Asset Protection, Bet, Congress, Democratic Party, Estate Planning, Estate Tax Law, Estate Taxes, Health Care Reform, Lawyer, Main Goals, Many Different Things, Mortgage, Proceeds, Rent, Stripes, Tax Liability, Trusts, Whole Rest, Zillion | 
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Establishing the Value of a Property
Establishing the value of a property is an integral part of Tax Delinquent Property Investment. Oftentimes this action can be made easy because some counties in the United States have some kind of a ratio they apply to their assessment.
For instance, in Arizona, they have two-thirds ratio of the selling price of a property. If you have a house in this area and the county’s assessed value is $150,000 that is probably worth about $215,000. That is the thumb rule there. In Arkansas, the assessed value is approximately 10 percent of the true market value. If something is assessed at $10,000 at ten percent; it is really worth in the $100,000 ballpark, more or less.
This is very easily found by browsing or surfing around in the county webpage. There you will be able to see if the sale prices are published there. Often, in the assessor’s page you can see not only what the properties are assessed at, but also what it sold for last time it was in the market. Their records are usually updated for the activity of the properties for the last 20 years or so. If the records are older than 20 years then they probably won’t have it on there. But, if it sold in the last 10 years with the price of $20,000 then it is assessed at $13,000. Calculating it will let you know that it is two-thirds of the last price of the property.
The simplest way to know the value of a property is by calling the county. You may ask the assessor if they have such a ratio which they apply based on the market value to come to the assessor’s value. They will tell you. So, ask them for the rule of thumb or the thumb rule. In Tax Delinquent Investment, knowing the value of the properly will give you a general idea of how much you can offer a tax delinquent property owner for their property. The better your understanding of the property value, the better your chances of maximizing your profit potential in your investment.
By: Jack Bosch
Reduce Your California Property Taxes
What is Proposition 8?
In 1978, California voters passed Proposition 8, a constitutional amendment that allows a temporary reduction in assessed value when a property suffers a “decline-in-value.” A decline-in-value occurs when the current market value of your property is less than the assessed value as of January 1.
If you have good reason to believe that the assessed value of your real property is too high, filing an Application for “Decline-In-Value” Reassessment (Prop.
form with the Assessor’s Office, as allowed by Proposition 8, is usually the first step to take. A free application form is available from the Assessor’s Office, and there is no charge for filing. The deadline for filing this form in San Diego County is May 30, 2008.You will be notified by the Assessor’s Office if any change in the assessed value of your property will be made by the Assessor. Any adjustments made to your assessed value will apply to the next tax year. For example, if an application submitted in February 2008 results in a reduced assessed value, the new reduced assessed value will be on the 2008-2009 annual tax bills. The 2008-2009 annual tax bill covers July 1, 2008 through June 30, 2009. When the Assessor’s Office notifies you of their decision regarding your Application for “Decline-In-Value” Reassessment (Prop. 8), and you are not satisfied with the results, you may still file an Application for Changed Assessment with the Assessment Appeals Board during the regular filing period of July 2 through November 30.
The Proposition 8 reduction is temporary; it applies only to the year of the application. Each year, as of the lien date (January 1), the Assessor will review the properties with a Prop. 8 assessment to verify whether the conditions that resulted in a decline in value still exist. If the market value of the property increased, the Assessor will adjust the assessed value up to the fair market value. Please keep in mind that the Assessor, in this case, is not limited to a 2% annual increase, but the new assessment will not exceed the original trended base year value.
What is Proposition 13?
In 1978, California voters passed Proposition 13, which substantially reduced property tax rates. As a result, the maximum levy cannot exceed 1% of a property’s assessed value (plus bonded indebtedness and direct assessment taxes). Increases in assessed value are limited to 2% annually. Only four events can cause a reappraisal:
1. A change in ownership;
2. Completed new construction;
3. New construction partially completed on the lien date (January 1); or
4. A decline-in-value (Proposition
Proposition 13 was adopted by California voters in 1978, and changed the definition of taxable value for all real property in the state. Taxable value of real property is defined as the lesser of:
o Factored base year value, or
o Market value on lien date (January 1st), whichever is lower
By: Christian Sturdivant
Posted in Real Estate | Tags: Application Form, Assessment Appeals Board, California Property Taxes, California Taxes, California Voters, Constitutional Amendment, Current Market Value, Decline, Free Application, Good Reason, January 1, July 1, Reassessment, San Diego County, Tax Bills | No Comments »
Appraisal – Subsidized Housing
The purpose of this article is to analyze valuation methodology for several atypical types of apartments. Various circumstances and situations can cause an apartment complex to have above-or below-market rental rates, occupancy rates and operating expenses. This analysis examines the following two situations:
low-income subsidized apartments, which receive above-market rental rates from HUD or another government agency, and
projects that are part of the Low Income Housing Tax Credit (LIHTC) program.
The LIHTC program was established by the U.S. Congress to encourage development of affordable housing in economically disadvantaged areas. Project developers receive a tax credit for following the guidelines established by the program. They typically sell these credits to Fortune 500 corporations for 45 percent to 60 percent of the total project cost, excluding land.
The first step in the valuation process is analyzing market value definitions. The following is the definition from the Texas Property Tax Code, Section 1.04 (7): market value means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if: exposed for sale in the open market with a reasonable time for the seller to find a purchaser, both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions to its use, and both the seller and the purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.
Section (b) of the Texas Property Tax Code further requires: the market value of property shall be determined by the application of generally accepted appraisal techniques, and the same or similar appraisal techniques shall be used in appraising the same or similar kinds of property. However, each property shall be appraised based upon the individual characteristics that affect the property’s market value.
The definition of market value, according to the 10th edition of The Appraisal of Real Estate published in 1992 by the Appraisal Institute, is: market value is the most probable price, as of a specified date, in cash, or in terms equivalent to cash, or in other precisely revealed terms for which the specified property rights should sell after reasonable exposure in a competitive market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently, knowledgeably, and for self-interest, and assuming that neither is under undue duress.
The term which requires further review in the above definition is “knowledgeably.” Is the purchaser knowledgeable regarding the effort required to comply with subsidized housing program requirements and tenants? Does he consider the effort to be rent for real estate or compensation for services? Does the purchaser of an LIHTC project understand that maximum rents are now established for at least 15 years based on deed restrictions? (LIHTC deed restrictions are now required for 30 years in Texas and most other states.)
Fee simple estate is defined in the third edition of the Dictionary of Real Estate Appraisal published by the Appraisal Institute as: absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power and escheat.
The practice in Texas is to base the assessed value on the value of the fee simple estate as opposed to the leased fee estate. This analysis is based on valuation of the fee simple estate instead of the leased fee estate.
The definition of leased fee estate in the third edition of the Dictionary of Real Estate Appraisal is: an ownership interest held by a landlord with the rights of use and occupancy conveyed by lease to others. The rights of the lessor (the leased fee owner) and the lessee are specified by contract terms contained within the lease.
The primary difference between the fee simple estate and the leased fee estate is that the tenant and landlord are each bound by commitments to pay rent and allow use of the property for a term. The contract rent agreed to between landlord and tenant may or may not be equal to market rent. For example, if a landlord entered into a 30-year lease for rent of $5 per square foot 15 years ago (when market rent was $5 per square foot) and the current market rent is $10 per square foot, the tenant has a substantial advantage. The tenant has a leasehold estate which may or may not have value depending on the term of the lease, the contract rent and market rent.
The Dictionary of Real Estate Appraisal defines leasehold estate as the interest held by the lessee (the tenant or renter) through a lease conveying the rights of use and occupancy for a stated term under certain conditions.
Conversely, if the tenant agreed to a rental rate of $15 per square foot in a strong market 10 years ago, and is committed to pay that rent for another 10 years, there is a substantial advantage to the landlord, and the tenant has a leasehold estate with a negative value. Practice in Texas is to establish the assessed value based on the fee simple estate instead of the leased fee estate. Therefore, the relevant criteria for determining market value includes market rent, market expenses, market occupancy and market derived capitalization rates. If a taxpayer made a poor business decision 10 years ago and has substantially below-market rent, it is inequitable for the taxing entities to reduce their ad valorem tax due to the bad business decision of the property owner. Conversely, if a property owner made a fortuitous or wise business decision and entered into an above-market lease, it is not appropriate to collect an above-average level of ad valorem tax from him because of his luck or prudence.
Market rent is defined by the third edition of the Dictionary of Real Estate Appraisal as: the rental income that a property would most probably command in the open market; indicated by current rents paid and asked for comparable space as of the date of appraisal.
Market rent is the compensation paid for the use of the real estate. It should not include compensation paid for factors other than the use of the real estate such as additional services which are not typically provided.
The next step in this process is to analyze valuation of properties which participate in subsidized programs which receive above-market rental rates. The final section will address valuation of projects in the LIHTC program.
Valuation of Subsidized Housing
This analysis will consider both the income and the sales comparison approaches to value. The cost approach is not utilized since it would provide similar results after calculating external obsolescence due to differences in rental rates.
Income Approach:
Apartment owners who participate in subsidized housing programs may or may not receive above-market rental rates. For many years, HUD offered above-market rental rates as an inducement to property owners to participate in the program. There are two reasons for HUD paying an above-market rental rate:
to compensate for the inconvenience of dealing with a bureaucratic government program which mandates detailed inspections not typically required in the private market; and
to compensate for working with residents who tend to be at the lowest socioeconomic level in our society.
It has not been unusual for HUD to pay contract rent of $0.70 to $0.80 per square foot per month for subsidized housing projects, even though the market rent for competing projects might only be $0.45 to $ 0.50 per square foot per month. The rent and sales comparables used in this analysis are located in a neighborhood characterized by income levels in the bottom quartile of the Houston area, minimal new construction of residential or commercial buildings for 25 years and heterogeneous levels of quality and appeal. Some sections, such as Riverside, have experienced gentrification, but other areas are marked by poorly maintained properties. Both the market rent projects and the subsidized rent projects are located in the area south of downtown Houston, bound by 288 to the west, Interstate-45 to the east, and Almeda-Genoa to the south. Consider the following tables which list rental rates for projects which do not participate in a subsidy program (market rent projects) and projects which do participate in a subsidized rent program:
Sources at the Houston HUD office indicate that expiring contracts for subsidized properties are being reviewed – if the owner so desires – for only one year. After that term, it is uncertain which course the plan will take. Indications that are subsidized programs are changing from the current contract rent method to a resident voucher program. The voucher method would involve issuing certificates to individuals who may then use the voucher at any participating property. The voucher amount would be based on individual’s income. In addition to the plan to phase out above-market subsidized rents, another reason not to use contract rent when valuing subsidized housing is it is inconsistent with national public policy to penalize apartment operators participating in this program since the difference between market rent and contract rent is compensation for participating in the program and working with the low-income residents. It would also be inconsistent with practice in Texas to use contract rent instead of market rent when performing the income approach to value.
The three reasons contract rent should not be used in valuation are: it may include compensation for participation in the program and may not be equal to market rent, current plans are to eliminate the program and, it is inconsistent with national public policy Another factor to consider when performing the income approach is the market occupancy. Since tenants at the subsidized housing projects do not pay their rent or pay very minimal rent, the occupancy tends to be at above-market level. Consider the following tables which list the occupancy rates for both market rent projects and subsidized rent projects:
Sales Comparison Approach:
The sales comparison approach analysis further demonstrates the typical market values in this submarket. We have utilized information on comparable sales both from our internal database and from the Harris County Appraisal District database. Most sales within the submarket are listed:
Valuation of LIHTC Projects
The key difference between Low Income Housing Tax Credit project (LIHTC) and a market rent project is that the LIHTC project has deed restrictions which limit the maximum rent that can be charged. The restrictions also limit the maximum income of the residents. The Oregon Supreme Court ruled that the assessed value for LIHTC projects should be less than the assessed value for market rent projects since the rent at LIHTC projects is less than market rent, and the rents restrict the market. In Texas and most other states, the LIHTC project is limited by a 30-year deed restriction which runs with the land. In other words, it may not be revoked unilaterally by the property owner even if the property is sold or foreclosed. In exchange for these onerous restrictions, the LIHTC property owner receives a generous tax credit allowance from the U.S. government. Developers typically sell the tax credits for approximately 45 percent to 60 percent of the project development cost.
The primary difference between LIHTC projects and market rent projects is the rental rate. Operating expenses will be similar in either case, but the LIHTC project will likely have higher occupancy due to its below-market rents. Section (b) of the definition of market rent in the Texas Property Tax Code is as follows: both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use.
The LIHTC projects are located in targeted areas established by the federal government which have below-average income levels.
Income Approach:
The following are three income analyses of hypothetical 200-unit apartment complexes which each has 160,000 net rentable square feet. Contract rent is estimated to be $0.62 per square foot at the LIHTC project based on what is typical in the Houston area. (Our firm prepares approximately 20 market studies for LIHTC projects each year.) Market rent at new complexes in the Houston area is typically $0.80 to $1.10 per square foot per month. For the purposes of this analysis, market rent for new complexes is estimated to be $0.85 per square foot. Market occupancy is estimated to be 96 percent for the LIHTC project due to the below-market rents and 92 percent for the market project. Operating expenses may be slightly higher at the LIHTC project to account for accounting and communication with government agencies because of the LIHTC requirements, but this amount is expected to be offset by the lower ad valorem taxes. The analysis shows three income approaches. In addition to the LIHTC and upscale market rent projects, a mid-range project with rental rates roughly between the others is included for comparison purposes. A 10 percent capitalization rate for the LIHTC project has been included based on its below-market rents, which appear to make the income stream more stable. An 11 percent capitalization rate is used for the mid-range project since its rental rates would be far above market for the area. The capitalization rate for the upscale market rent project is 9.5 percent based on data in our files.
It appears clear that using market rent in the valuation of an LIHTC project would produce an appropriate result. Further, it appears the capitalization rate used in valuation of the LIHTC project using contract rents would overstate the values based on comparable sales. While investors would appreciate the stable income stream due to the below-market rents, few investors would want to pay $25,000 per unit for an apartment complex in an area where most complexes sell for $5,000 to $15,000 per unit.
Valuations of real property with above- and below-market rental rates offer challenges to property owners and assessment officers. There will likely be legitimate differences of opinion for the foreseeable future. Using the sales comparison and income approaches to value indicates a wide range of value. Thoughtful consideration and negotiation will be required to form a consensus on these issues.
By: Patrick O'Connor
Posted in Real Estate | Tags: Affordable Housing, Appraisal Techniques, Disadvantaged Areas, Exigencies, Fortune 500, Government Agency, Hud, Lihtc Program, Low Income Housing, Low Income Housing Tax Credit, Low Income Subsidized Apartments, Occupancy Rates, Operating Expenses, Project Developers, Property Tax Code, Purchaser, Section 1, Subsidized Housing, Texas Property Tax, Texas Property Tax Code | No Comments »
For Sale By Owner – 4 Ways To A Quick Home Sale
Spring is the season for selling homes. Over 40 % of homes sold in the entire year are sold in the spring time. Due to the fact that school let’s out and it is easier for families to move into their new home during the summer months.
When you are planning to sell your house for Sale By Owner, timing and planning are the most important tasks you must do to have a successful home sale. Proper staging of your home for sale can mean the difference between a quick sale or a slow one. Here are 4 ways that you can have the most appeal to the most amount of buyers.
4 WAYS TO A QUICK HOME SALE AND PRESENTATION
1. Timing & Planning – The best time to sell your house is in the spring time. So make sure you have taken the time to figure out what the proper asking price should be. You can do this by driving around your neighborhood and seeing what others are asking for their house. Also look up a on websites what the median price for your type of house is going for. Take the average of the two and price your house about ten thousand below that value. This will insure that your house will be the first to sell.
2. Provide Finance Options: Owner financing allows you the ability to make more than Fair Market Value on your house. By working with a contract buyer you can get all cash at closing when you set up your financing correctly. You can also work with mortgage brokers to help you get your buyer approved for financing.
3. Marketing Plan – An important step in selling your home is to have a marketing plan. How are people going to know that your house is for sale? Why would they want to buy your home? How can you help them buy your home? When creating a marketing plan think from the buyers point of view. You can use yard signs, classified ads in the paper, flyers and marketing strategies to create: Attention-Desire- Action.
4. Staging Your House: When the buyer walks into your home they will experience it with all five senses. Make sure you have new paint on the wall, new hardware on the sinks, doors, and electric sockets. Make sure your home is clean and free from clutter. Have the smell of fresh apples and cinnamon baking in the oven. Have soft music in the background. All these appeal to difference senses. At the end of the day people buy based on feelings and not logic.
By: G Allan Roberts
Posted in Real Estate | Tags: Asking Price, Best Time, Contract Buyer, Finance Options, Five Senses, House For Sale, Marketing Plan, Marketing Strategies, Median Price, Mortgage Brokers, Neighborhood, New Paint, Owner Financing, Paper Flyers, Point Of View, Selling Your Home, Spring Time, Staging Your House, Ten Thousand, Yard Signs | No Comments »
What Are the Best Neighborhoods to Buy Real Estate in Sao Paulo Brazil?
S?o Paulo is the biggest Metropolitan city in all of South America in terms of urban area population. It is also considered the largest economic metropolis in the region. The variety of housing types and real estate options available is quite overwhelming. There is so much choice that you can practically find a neighborhood to meet just about anyone’s needs or wants.
So Where Should You Buy?
That’s a tough question and there are several possible answers. This article will walk you through some of the most popular areas that local buyers are currently pursuing and why. It will also attempt to give you the average price of a home in all of the neighborhoods covered in this article in order to help you decide what suits you best.?
The Most Sought After Neighborhoods By Local Home Buyers are Pretty Disperse
The ton of neighborhoods in the city make it practically impossible to pin point what the single best location within the city would be. In fact, most home local buyers consider many things before they take the plunge. Factors which most affect the purchasing decision are:
How close the property is to their work location How safe the neighborhood is Which shopping areas are within walking distance Ease of mobility Whether or not the property is near the city’s Metro/Subway. How much can people afford to spend What the demand for rental property in the neighborhood is in the event they wanted to rent out the home at a future date. Who your potential tenants would be and what their average incomes are What traffic is like in the area (One of the most important) etc.
All these things play a huge roll when deciding what the best place to buy a home is.
Traffic is Probably one of the Biggest Factors People Consider
?
S?o Paulo is a huge city with tons of cars. In fact, statistics show that there are over 6 million cars within the metropolitan area. This makes mobility a huge concern since traffic and proximity can mean the difference between a daily commute of a few minutes to that of a few hours. So where people work and what the traffic is like is probably the biggest factor new home buyers consider before making the final purchasing decision.?
Access to S?o Paulo’s Subway / Metro
Those who can’t afford to live within walking distances to their work locations generally preffer to buy or rent real estate in neighborhoods that are close to the city’s Metro. This gives the general working family a more convenient method to commute to their work locations. It is also much faster than traditional public transportation methods such as city buses.
Neighborhoods Near the Metro and Real Estate Prices in the Sector
According to research done through Datafolha the following neighborhoods are in high demand because of their location:
Important Neighborhoods Near Av. Paulista: (Prices in here range from R$4.000 to R$7.000 Brazilian Reais per square meter)
Para?so Cerqueira C?sar Bela Vista Consola??o
Neighborhoods in the Southern Zone:
(Price around R$4.000,00/m2)
Vila Mariana
Neighborhoods on the East Side:
(Price around R$3.000,00/m2)
?
Tatuap? M?oca (A Neighborhood of Immigrants)
Datafolha Research classifies M?oca as the top ranking neighborhood within S?o Paulo. It is a neighborhood that has traditionally attracted a large amount of immigrants, mainly from countries such as Italy and Spain. Its culture is very diverse and people seem pretty happy here. It is known for having that small town aura where residents have a sense of community and there is a good feeling of peace and security.
M?oca is not too close the city’s Metro, however it is still considered pretty central and is easy to get to.
Real estate prices in M?oca
The average per square meter cost in M?oca is of around R$3,000 to R$3,500 per m2. The demand is also constant so the liquidity factor is pretty positive as well.
Popular Upscale Neighborhoods in S?o Paulo
For the higher income crowd, S?o Paulo offers beautiful neighborhoods such as:
Higien?polis Moema Perdizes Pinheiros Brooklin Campo Bel
?
Average real estate prices in these neighborhoods go for approximately R$ 4,000.00 to R$ 8,000.00 / m2.
Almost everyone in these areas drive cars so public transportation is not too great. The Metro is a bit far but these neighborhoods are still considered pretty central. Due to the high demand for property in these areas buying real estate here makes for a pretty good investment.?
Morumbi – A Surging Community
In the Western part of S?o Paulo we find one of the fastest growing neighborhoods in the city -? Morumbi. Morumbi has become quite popular and home prices are quickly escalating.
Real Estate Prices in Morumbi
The average per square meter price in Morumbi goes for around about R5,000 /m2 which is on the upper end of S?o Paulo real estate prices. This is pretty interesting considering there are two things which would lead people to believe the area would be worth much less.
Morumbi is very near Parais?polis which is one of S?o Paulo’s largest slums The neighborhood is a bit far from central S?o Paulo (approximately 8 to 14 kilometers)
Despite these facts, Morumbi is growing at an alarming rate and real estate here is considered a great investment. New construction projects are booming everywhere and home appreciation is accelerating quicker than in other S?o Paulo neighborhoods.
By: Serapis Murillo
Posted in Real Estate | Tags: 6 Million, Average Incomes, Best Place To Buy A Home, Economic Metropolis, Home Buyers, Many Things, Metro Subway, Metropolitan Area, Metropolitan City, Million Cars, Plunge, Proximity, Real Estate Options, Rental Property, Sao Paulo Brazil, Shopping Areas, South America, Urban Area, Walking Distance, Work Location | No Comments »
How You Can Own Your Own Dream Home At 90% Off Market Value
You most probably do not own the roof over your head. And the dream to own your own Real Estate looks so far in a dark tunnel that you can’t imagine how your hands can ever reach such a lofty desire without winning a lottery.
Interestingly a lot of people feel just as you do even though they can own their own Real Estate at 90% of market value. Unfortunately, just like you, they do not know how.
Take a pen and paper and calculate your annual rent for a couple of years. Later you will see that you would have spent more the amount you need to own your own house and leave the league of those paying ridiculously high annual rents.
Yes you can own your own Real Estate at 90% off market value by taking advantage of Real Estate auctions: The Auctions are legal and out there in every state waiting for you.
Did you know that over 250 000 seized Real Estates by government and other institutions in the United States are constantly available for auctions all over the states?
Did you also know that every month thousands more Real Estates are repossessed for public auctions by Governments, banks, organizations and institutions, and that ordinary folks like you are taking advantage of this very hot but obscure market to own their own dream homes?
Shouldn’t it also interest you to know that some people with entrepreneurial spirits have even gone into Real Estate business on shoe string budgets through Real Estate auctions, buying ridiculously cheap and selling at market value?
The seized Real Estates auctions are very unique with all transactions being very transparent, conducted in the open where you can clearly see that each item is won by the highest bidder. “Highest” in all cases being just 90% off market value.
Like several other opportunities out there, the Real Estate auctions are being enjoyed only by those who know and are taking advantage of their knowledge. You too should take a look at the Real Estate auctions and see how you can easily fulfill your dream of owning your own Real Estate, or even start your own Real Estate business.
By: Charles Neshah
Posted in Real Estate | Tags: Banks, Budgets, Dark Tunnel, Desire, Dream Home, Dream Homes, Entrepreneurial Spirits, Estate Business, Governments, Highest Bidder, Hot, Institutions, Lottery, Own Real Estate, Pen And Paper, Public Auctions, Real Estate Auctions, Real Estates, Rents, Shoe String | No Comments »
What Does Flipping Houses Mean?
Starting your career as a real estate investor who flips should begin with the practical answers to what does flipping houses mean? Flipping houses consists of purchasing a home at below market price and quickly selling that home at market value. It’s just value purchasing – getting more for your money. That’s a very vague definition because there are several ways to flip a home.
Many investors flip properties and never take title to the home and some never really own the property because of the swift negotiations. They never go though the closing or settlement process, never go through the financing and many never even use their own money. But no matter what the timing is for this transaction all home flippers have one thing in common; buying low and selling high to make a nice profit.
Flipping houses is one of the best real estate ventures an investor could begin. Buying and selling homes is a quick way to earn money. Done several times and flipping homes can make you rich. When it’s done as a career flipping homes creates steady cash flow.
Flipping homes is usually accomplished in a few months and you can have several deals going at the same time.
You can create an option to buy a property without the actual obligation to go thorough with the purchase. You can ask the property owner to lease the property to you as a tenant with the option of you purchasing the property within a given amount of time, usually within 6 months. The contract would also state that you have the option to sell the home to anyone. If the home is selling for $100,000 then you find a buyer and sell your option for $125,000. You’ve just profited $25,000 and the seller still gets his home sold at the price asked.
Many investors flip foreclosures. Purchase below market from a bank or at an auction and sell at a higher price. The profit potential is dependant upon the economy but foreclosures are always bought below market value.
Then again, you can always do your research and find that diamond in the rough. This all depends upon finding a home that is selling below market value that you know is much more valuable.
So finally, what house flipping means is simply to purchase low and sell high to make a profit.
By: Alex Nghiem
Posted in Real Estate | Tags: Amount Of Time, Auction, Best Real Estate, Economy, Flippers, Flipping Homes, Flipping Houses, Foreclosures, Investors, Negotiations, Nice Houses, Obligation, Property Owner, Purchasing A Home, Real Estate Investor, Several Times, Several Ways, Starting Your Career, Steady Cash Flow, Vague Definition | No Comments »
Port Orange Neighborhood Association
In my opinion, the main focus of every association is to protect the investment of each individual Port Orange homeowner. Now, there are a few association members in the area that take their roles in the association a little too far, but the majority are handled very professionally. The first thing a buyer should do is contact the neighborhood president or manager. He or she should be available by phone. Don’t hesitate to call him/her and ask any specific questions about the neighborhood and the governing rules.
Some Popular Port Orange homeowners restrictions include:
Pet Restrictions – The association may limit the size, type, and number of pets per household in the community. They may not allow clotheslines. Restrictions on flags are possible. Fences will have a height limit, and there may be restrictions on the type of fence too. Commercial vehicles are usually not allowed to be parked on the driveway. Home businesses may not be allowed. Some don’t allow the garage door to be left open Many do not allow boats to be parked in the front yard or on the driveway.
The most important step is to read the association documents. The package may be lengthy, but it is worth your time. I would also suggest talking with a few residents in the neighborhood to see how they feel about the association.
Don’t worry, there are many homes available in Port Orange that allow more flexibility. Contact Kevin for a list of Port Orange homes with or without neighborhood associations.
By: Kevin Kling
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Second Mortgages – Common Home Equity Questions
According to Barry Donovan, a financial consultant and writer for Nationwide, “One of the most powerful cash vehicles driving our economy is the new and improved home equity loan.” If you haven’t put the equity in your home to work for you yet, you probably have a few questions about taking out a 2nd mortgage.
How do I get a second mortgage?
Just like any other reputable mortgage product, tapping into the equity on your house will involve your credit score, your income, and other consumer debt. The value of your home will also factor into the equation. Of course, you will have a more challenging time qualifying if you have bad credit or heavy debt.
How big of an equity loan can I get?
The availability of equity will be based on the loan to value ratio, which is the value of the loan against the fair market value of your home. So a loan of $80,000 on a $100,000 home has a loan to value ratio of 80 percent, which is the standard ratio. Only a select few lenders offer 125% second mortgages. This is a second mortgage that allows you to exceed the value of your property.
Can I get a 2nd Mortgage without having to refinance my 1st mortgage?
Although refinancing your home to cash out on the equity is still an option, it is no longer a necessity in getting a second mortgage. Banks will consider your combined loan to value ratio is lending you money against your equity without you necessarily needing to refinance.
What’s the difference between an equity line of credit and home equity loans?
A home equity line of credit is a revolving account based on the amount of equity available in your home. They have lower interest than credit cards and lower payments, but have a variable interest rate. Home equity loans are set at a fixed interest rate, but are not revolving accounts like the credit lines. The principal and interest do not change.
What are the benefits to a 2nd mortgage?
There are many benefits to a 2nd mortgage. Equity credit lines can be used for expenses rather than a credit card. Using a credit line in this manner will give you a much better interest rate. A home equity loan can be used for debt consolidation at a lower interest rate giving you overall savings on the interest as well as monthly savings. And of course, second mortgages can be used for home improvement and the interest on these loans is normally a tax deduction.
What are the costs involved in a 2nd mortgage loan?
Mortgage costs include credit reports, points, closing costs and sometimes appraisal fees. Frequently an appraisal won’t be necessary, but there may be other fees involved and you should be aware of which you will be expected to pay. You should also check to see if the loan has a pre-payment penalty and try to find a loan without one. If you have a variable rate, your payments may also change with the interest rate. You can check second mortgage rates on sites like Bankrate. There are many products available and a little bit of homework will help you find the one that’s right for you.
By: Rebecca Oconnor
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