Ten Helpful Tips for Real Estate Investors

It’s a buyers market, to be sure. How do you make your property attractive? How do you get around pesky zoning problems and inspection issues? In short, what do you do if you’re a real estate investor looking to turn a profit? Listed below are ten ideas that should help you get on your way.

1 Go large

One house isn’t going to make you rich. Try buying a block of properties, either commercial or residential. The more you purchase, the more you can turn. Also, it becomes easier to collect properties from the government if you offer to buy in bluk.

2 Don’t go it alone

 

It never hurts to have other investors to help saddle the burdon. You’ll find pretty quickly that your costs are not what you thought they would be, and other people might have more time and experience (not to mention investment capital) to put towards your project.

 

3 Talk to the government

 

Local and state governments are often times sitting on blocks of homes that are foreclosed on or just vacant. Many times these are properties they will not only be willing to sell you for next to nothing, but they might even help you get the money for the properties. Their angle? If you fix them up and sell them, people who pay property taxes will live there, thereby helping to offset the cost of the homes.

 

4 Look to the community

 

Many community agencies, churches and centers will know of or be sitting on viable housing opportunities. Don’t pass these by! Many will already have information lined up on grants and housing contacts, all you need to do is show a serious interest and be willing to work to a common end of having a property that people want to live in when you’re done.

5 Realize you don’t know everything

 

You’re probably not an expert carpenter, plumber, electrician or other necessary repairman that can magically make your investment work. Realize pretty early on that you will need help, and that outside contractors will need to be called in. Remember, you can do it yourself and waste time, or you can do it right and turn that property.

 

6 Don’t dawdle

 

The longer you sit on a property, the longer it becomes a black hole for your cash. Don’t commit to purchasing properties if you’re only going to put Sunday afternoons into it; be ready to dive in and get to work. The sooner it’s ready, the sooner it can sell.

 

7 Don’t shoot for the moon

 

You will not make a million on your first sell, so don’t act like it. Remember, the name of the game is long-term accrual, not get rich quick. You and your investors might see a return of $10,000 profit on a sale if you’re extremely lucky. This is why bulk buying is key.

 

8 Collect them all

 

Don’t look for one property; look for a dozen that are in close proximity. Buying a neighborhood is easier than buying one because the combined low value of the homes will help to drive them collectively down. Therefore, if you buy multiple homes and fix them all up, this will collectively raise the property value of the neighborhood, making it more desirable to a higher-paying clientele.

 

9 Go to council meetings

 

Get to know the City Council, and don’t act like a jerk when they tell you no. Present your zoning case and make sure you’ve consulted a lawyer before potentially wasting everyone’s time. Most council’s will be open to rezoning within reason (don’t expect a residential to magically go to M1 just because you said please), but it still may take some persuasion. Be calm, and also don’t be afraid to broach the subject before you buy. Sometimes they will bend just to see the property increase in value.

 

10 Don’t be bossed around

 

If you are trying to turn a property that you have rented out and have a problem tenant, remember that the tenant is not a permanent fixture. A contract is a contract, and if they are resistant to any repairs or changes you make, remind them that you, not they, are the one that owns the property. Also, don’t be afraid to step up the ante. If they won’t play nice, let them know immediately where you stand with small claims court. Most people won’t take the time or money to push any issue past that basic threat.

 

For more information, try the following helpful sites:

 

www.biggerpockets.com

 

www.realtor.com

Title Seasoning: 10 Real Estate Investing Tips

If you are planning to buy homes and flip them for profit you will most certainly come up against title seasoning issues. Title seasoning is gaining in importance for real estate investors who wish to make a quick profit from real estate. It will be financial suicide to jump into the real estate investment business without having a thorough knowledge of title seasoning issues. The following are 10 important facts about title seasoning that every real estate investor must be aware of.

  1. During the recent real estate boom everyone seemed to have thrown caution to the wind and there were more scammers than genuine real estate investors operating in the real estate market. This has resulted in the unprecedented number of foreclosures. Gone are the days when you could take a small piece of paper, write a few words and some monetary value, hand it to the person behind the counter and walk away with huge amounts without having to show even your driver’s license.

 

  1. During the real estate boom it was possible for an unscrupulous investor to cheat a gullible home owner into agreeing to sell the home cheap and find a naive buyer to buy the home at a hefty premium. The buyer would be sent to an unscrupulous loan officer and appraiser who will validate the hefty premium price. The buyer would be sold a mortgage he could ill afford and the investor, loan officer and appraiser would make good money. Not surprisingly a year later the home would go into foreclosure. This became the norm during the real estate boom. Now the FHA and the lending institutions have become wiser and have brought in the title seasoning requirement.

 

  1. Mortgage insurance is provided throughout the United States by HUD, which is part of The Federal Housing Administration (FHA), on loans provided by FHA approved lenders. Alarmed by the spate of foreclosures in the recent past FHA and most of the lending institutions have enforced title seasoning requirements on real estate properties in whose mortgage they are involved.

 

  1. The FHA requires that a seller of a home must have been the owner of record of that home for more than 90 days. Even though there are some exceptions they do not apply to fixed-and-flipped homes.

 

  1. Further if you are selling a home to a retail buyer within a period of 12 months of purchasing it and the selling price is more than your purchase price then FHA may ask you to substantiate the increase in price through documentation like list of improvements made, receipts, before and after photos, etc. Additionally, if you are selling the property within 12 months for more than 100% of your purchase price the FHA may ask for a second appraisal.

 

  1. Other conventional lenders also have similar title seasoning rules. The title seasoning requirements however would mostly depend on the buyer’s debt service history and credit score. Therefore if you are selling within 180 days of purchasing a real estate property you should check with the buyer’s lender to find out about their stipulations regarding title seasoning. If you go ahead without checking it out you may end up with the house off the market for 30 days unnecessarily.

 

  1. Another scenario where you can land in deep trouble is when you take a hard money loan to buy a property, do a quick rehab and put it back on the market but find no takers. As they interest on a hard money loan is very high it would be better if you can avail a conventional refinancing of the home and pay off the hard money lender so that your interest burden can become manageable. However it will be very difficult to find a lender for the refinancing if you have held the title for less than six months because of most lenders’ title seasoning rules.

 

  1. It is not necessary that you have to deal with title seasoning issues in all cases where FHA is involved. Take the case where you are working on a foreclosure short sale involving a property having a FHA insured loan. As the FHA has insured the loan it must approve the short sale. Once the short sale is approved by the FHA you can buy the property with the FHA loan, flip it and sell it to a buyer who is not getting a new FHA loan. Here the title seasoning rule does not come into play.

 

  1. The above does not mean that you cannot use some creative financing to overcome traditional lending institutional guidelines regarding title seasoning issues. If you find yourself stuck then you can use the strategy of creating a seller financed note for structuring a deal. You can sell this note at the closing to a note investor for financing the deal. If you want to know more about note funding then look for note funding investor forums in Google or Yahoo and learn about it there. You can also visit www.notefunding.com and look under the title Creative Strategy to Buy/Sell Property.

 

  1. Another way a real estate investor can overcome title seasoning is through land trust. In essence land trust involves a bunch of papers but it is highly effective. Land trust involves three important things – land, beneficiary and trustee. The advantage of this is that conveying real estate property into a land trust will not break the chain of title. For example if a property has been owned for 5 years by the previous owner and after that you have owned the property for 3 months then title seasoning will show 5 years 3 month when the new lender requests a title binder from the closing attorney. Even though the fact of the conveyance of the property to the land trust will show it will not break the chain of title.

 

Real Estate in Ephrata, Pennsylvania: Best Times to Buy or Sell

Estate

If you are looking to buy or sell a home in Ephrata, PA, there are a few guidelines to consider which will help you to determine the best time to make your purchase or sale.

For the seller, there are some times of the year that are much more suitable for selling than others. I consider the spring and summer to be the best times to sell a home in the area. Ephrata, PA is stunning during these seasons. Wildlife and natural beauty abound. Amish roadside vendors offer a safe and family-friendly atmosphere. The natural beauty of the surrounding landscape will help to add curb appeal to your home. This is also a good time for open houses which are wonderful to attract buyers to your property.

The winter months are not the best times for a seller who is looking to find buyers for their property. Ephrata can be very cold during the winter which can intimidate some buyers. Snow and ice can also play a role in the sale of your home. These weather conditions can make it difficult for some buyers to see the real value of your home and can also make it difficult to schedule visits to the property.

For the buyer, there are also times that are more suitable than others. As I stated above, the spring and summer are wonderful times to purchase a home in Ephrata because you are able to see the true beauty of the property and its surroundings. The summer can also be a more suitable time to buy for families. It is a much easier transition for children if they are able to begin school in a new school year compared to changing mid-term. While there are benefits for purchasing a home during this time, there are also some downfalls. The buyer’s market is more competitive in the warmer seasons. There are generally more people who are looking to purchase homes during this time which could possibly lead to bidding wars.

For a buyer, I believe the best time to purchase, while keeping finances in mind, is during the winter. Sellers who put their homes on the market during the winter are normally more eager to sell. This fact combined with the slower market during the winter enable the buyer to get a better deal. Another tip is for buyers to become very friendly with their local real estate agent. A real estate agent can allow a buyer to see a property before it is even listed. This is a wonderful advantage for those who are looking to find their perfect house.

Whether you are a buyer or a seller, there are some times of the year that are better to make your sale or purchase. For both the seller and the buyer, it is important to become close to your real estate agent. The agent is the key to getting the best price for your home in both cases.