7 Reasons to Consider Buying with a Lease Option
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The American Dream has been put on hold for many deserving families as our country tries to climb out of the current real estate mess. The dream of home ownership is out of reach for many because they have credit issues, high debt ratios, or are self employed.
I’m from the government and I’m here to help. It’s no secret that lax credit requirements by banks (caused by the government pressuring banks to lower requirements to get more people into home ownership) was the reason why we got ourselves in the current real estate problem. The government often means well but its very involvement usually results in situations being worse off that if left alone.
As a result of Uncle Sam “tinkering” in the housing market, banks now have stricter requirement for someone looking for a loan to purchase a home. Down payment requirements have gotten back to more conservative levels 10 – 20 % like in the “good old days.” Many now just don’t have those large sums of cash. This has caused many families to put their dream of home ownership on hold.
However, there is an alternative to conventional bank and mortgage lenders – Lease Option. With a Lease Option, you can get over many of the show-stopping hurdles mentioned above. You can make a reasonable down payment, go ahead and move into the home, while working on credit issues to become qualified for a mortgage. Usually after a year or two of diligent work on credit issues you can refinance the home and close on the home.
A marriage made in heaven. There are also benefits of lease purchasing to current owners who need to sell their house. That makes for a marriage made in heaven. Often a Lease Option purchase is preferable for them instead of waiting for buyers with perfect credit. These sellers will work with us to put good families in their homes via Lease Option so they can move their inventory.
Here are 7 benefits of purchasing using a Lease Option.
- Minimum Cash Out of Pocket. Usually just a 3 – 6% option fee is required to move in verses 10 – 20 % now required by most banks.
- 100% of the Option Fee is credited directly towards the purchase of the home.
- Rent Money is Working Toward the Purchase of the Home. Every month a portion of your rent payment is applies towards the purchase price of your new home.
- Equity Appreciation. Since the sales price is locked in before closing, any increase in property value will mean that your equity is increasing in the home.
- Work with Credit Problems - Past credit issues (bankruptcy, foreclosure, divorce etc.) are issues that can be alleviated over time.
- Quick Move-In Time. Often you can move in to your new home 1 – 2 weeks compared to 4 – 8 weeks often seen with conventional home buying.
- Time to repair Credit. Time heals most wounds. It’s the same with credit. You will have 12 – 24 months to repair your credit.
Don’t let today’s challenges keep you from your dream. Lease Option is a great way to speed up the process of turning your dreams of owning a home into reality.
Don’t Fall Victim to the List Price Trap
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One of the key mistakes many people make, especially newbie real estate investors, is thinking they got a heck of a deal just because they purchase a property for less than list price. Even back when we were in a robust market, it was very common to get 3-5% off of list price. Don’t fall victim to confusing list price with actual property value.
In many cases, the list price is just a pie-in-the-sky price that the seller thinks he/she should get – or wishes to get – for their home. It can often be overstated by a savvy listing agent giving susceptible home owners an inflated price in order to get the listing.
To get a more realistic value for a property, you need to look at 4 key areas.
1. Sold Comparables – What have other comparable properties in the area recently sold for? This is by far the best way to value a property. It’s best to stay within a neighborhood if possible, a mile radius, and only look at homes that have sold within the past 6 months. You’ll need to look at similar homes in size, number of bedrooms and bathrooms, and overall lot size. Also look to see what selling costs were paid by the seller to get the real net price. Your local MLS is the best source of information for calculating comps.
2. Assessment Value - You can get this from the county tax records. The assessment value is used to calculate county property taxes. Historically this value was a % lower than actual market value. The % is often consistent within a county or area. However, with the recent decline in home values, this may no longer be the case as market prices are now often lower that assessment values. You can get free access to county tax records at Netronline.com.
3. Online Comparable Sites. Let me say up front that these sites can be all over the board in values. Here are four sites I look at. Zillow.com , Eppraisal.com, CyberHomes.com and RealEstate.com.
Eppraisal will actually show the Zillow and CyberHomes values if available so I always start there first. I take the average of these four sites. These values are not a good as sold comps but is a good indicator. KEYPOINT: Everyone goes to these sites (including your buyers) looking for values so I strongly suggest you have an idea what these sites say your house is worth.
4. Rent - What is the cash flow of the property in regards to rent prices in the area. You can go to sites such as these to get comparable rent prices for an area. My favorite three are RentSlicer.com, Zilpy.com and RentOMeter.com.
Access to the MLS is key in getting accurate market values. If you do not have access to your local MLS service, here are four suggestions.
- Get to know a Realtor (or two) that will look up information for you.
- Get to know a Realtor REAL WELL and they may offer you access. (They’re not suppose to do this so be real careful here.)
- Marry a Realtor.
- Get your real estate license.
While the listed price will give you an idea of current competition as you go to sell, you need to work off of actually solds for market value.
Do your homework and your own analysis to make sure you know what you’re buying. Listing Price is nice but list doesn’t cut it in making sure you’re getting a good deal.
5 Success Tips For Real Estate Investing
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Planning and establishing objectives is a good first step in getting started with any project. Then it’s time to act. This is especially true in Real Estate investing.
Many people struggle just getting started. But let’s say that you are successful in getting things off the ground, often its easy to get distracted and lose focus along the way. What do you do when you come across barriers that hinder your progress? I’m going to share with you 5 tips that are critical for your Real Estate investing success.
1. Keep On Keeping On – Have you ever failed at anything? I know I have. You feel devastated, like there’s no tomorrow, ready to just give up. However, I’ve learned over the years that it’s at such times as these that doors actually start to open.
Failing is not bad… if you learn from it. Actually success is a poor teacher, we learn more about ourselves when we fail. People are often so afraid of failing that they never do anything worthwhile – they play it safe. Sometimes, the greatest risk you can take is to play it safe.
So go out and try something new. “Since the way we learn is by making mistakes, the greatest risk of all is to wait too long to begin making those mistakes.” Robert Kiyosaki
2. Be a Decision Maker – Successful people are decisive people. When opportunities come your way, evaluate them carefully, make a decision, and then take appropriate action. Realize that indecision wastes time that could be spent on more productive tasks. You can avoid unnecessary risks by implementing your decisions gradually. Don’t attempt to make every decision at the beginning. Each action is contingent upon the success of the one that preceded it. “When I’ve heard all I need to make a decision, I don’t take a vote. I make a decision.” Ronald Reagan
3. Develop a Good Attitude – While having a good attitude may not guarantee your success, your odds are much greater than with a bad one. No one controls your attitude unless you voluntary surrender it. Others may do something to influence it but you control it.
Ask your self this question. “If I had a friend who talked to me like I sometimes talk to myself, would I continue to hang around with that person?” Decide if you’re going to get bitter or better. Either focus on the good and deal with the bad, or vice versa. Do yourself a favor, be an optimist. Believe you me, life will me more enjoyable.
4. Make Good Use of Your Spare Time – What are doing with your spare time? I remember someone saying that it’s what you do in your spare time determines your future.
Are you…
• Watching TV or reading?
• Napping or developing a skill?
• Talking to your friends or studying marketing?
We all have 24 hours in a day — how wealthy you become depends on how you spend those 24 hours. It all comes down to the choices we make every single day. In fact, you shouldn’t let one day go by without making sure you are taking at least one proactive step towards reaching your dream. It’s so easy to just do what you “feel” like doing. The next time you are looking for something to “kill time” ask yourself, “is this helping me more forward or is it just causing me to just run in place.”
Turn your spare time into money time. Most people live off out their primary income source. It’s what you do in your spare time that will mainly determine how you spend your retirement. It’s OK to goof off when you were a kid. What are you doing now?
5. Don’t Overlook Small Details – There is an old expression that says, “If you take care of the little things, the big things will take care of themselves.” It’s another way of saying that every job is composed of many small details, any one of which, if overlooked, can create big problems later.
If you have trouble dealing with annoying details- set aside a time during your work cycle (daily, weekly, or monthly) to deal with such unpleasant tasks. Prepare yourself mentally to deal with those tasks, and you may find that you dispense with them quickly and efficiently. You may even find that the job wasn’t nearly as unpleasant as you expected it to be.
There you have it. Heed this advice and just watch the difference it’ll make in your life.
To Your Success…
Wayne
It’s Not A Setback, Only A Test!
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Although I wasn’t an Einstein in school, I did O.K with my grades. Got a small scholarship… nothing to really brag about but I felt like I accomplished something. To be honest with you, I’d usually study for tests just enough to get a good grade. I think that’s what most students do. There are exceptions on both ends – the straight A kids and those who always got F’s no matter what.
But what always got me were those darn POP tests. Just when you least expected it – BAM!
Well that’s what I think we’re going through now with our economy – especially in the Real Estate market. Foreclosures, short sales, REO’s, declining market prices are all making the headline news. Most didn’t see this coming and many are just caught flat-footed and off-guard. (The sad reality is even if we KNEW it was coming, many would still be in the same pickle as they are in today).
Let’s be honest, for many it’s rough out there. The realities of this economy are painful for many.
As with every challenging situation, some people will respond positively and effectively, while others will miss the boat and be left behind. The winners are those that will act quickly, make the best of the situations and move forward. The losers, well they’ll whine, complain and wait for the government to help them out. They may never recover.
Here’s my advice… take this opportunity to look at where you currently are in your financial journey. If you’re not where you want to be, take a positive step in the right direction. Real Estate Investing is the ticket for so many people but for whatever reason, they never seem to make it happen.
Is it YOUR time? It’s not a setback, unless you allow it. If you feel you just made a bad grade, you can still pass the course with flying colors.
Learn How To Stop Being P.O.O.R
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It amazes me how many people who are not where they want to be financially, just won’t do anything about it. It’s like they suffer from the proverbial “deer in the headlights“ syndrome. They’re just frozen in not taking action and not knowing what to do. It could be that maybe they’re a little scared. Been burnt before. Tried and failed. That’s understandable… but really not a good excuse.
The word POOR actually serves as a great acronym that describes the reason for the condition – Passing Over Opportunity Repeatedly.
If this describes you in any way, don’t feel alone because you’re in good company. Most people find themselves in this boat.
Here’s the bottom line… if you consider yourself “POOR” and would rather be “RICH” then you’re got to make some changes.
We are currently looking at the best opportunity to get rich in real estate that this country has seen in the last 50 years. The number of foreclosures continue to rise. So are the opportunities to purchase real estate at wholesale, fire-sale, and greatly discounted prices. You just need to know how to capitalize on this trend.
So now is the time for you to spring into action and not let this one… pass you by.
Opportunity is knocking, are you going to answer the door?
There’s nothing to it… but to do it. Go here to find Great Foreclosure Values in the Atlanta area.
We are currently experiencing a very unique situation that we may not see again in our lifetime. I’m talking about the tremendous opportunity in real estate resulting from the tidal wave of residential foreclosures over the past 2-3 years. Because of recent price declines, many see real estate as very risky right now. Understandably so, people are just plain scared to jump in. But let me tell you – this crisis will eventually run its course and the opportunity to pick up great deals will also run its course. This opportunity is temporary.
Real Estate has always been one of the best ways to create wealth. The riskiest time for any investment is at the top of any cycle. Wouldn’t you agree with me that we are no longer at the top? I wish I could call the bottom – no body can – but I see 7 reasons why now may be the time to seriously consider getting in or increasing your holdings.
1. The fluff is gone. Back in the late 90’s Alan Greenspan spoke of “irrational exuberance” when referring to the speculative build up around the internet boom. Well that’s exactly what we had from 2001 – 2006 in real estate. Well that froth is now gone – and along with it the speculative and even fraudulent (in some cases) activities that ran up prices.
2. Prices have flattened and/or dropped in just about all markets. Prices for home in all price ranges are at unbelievable levels now. It’s a good time to pick up value.
3. Government Programs. Say what you will and think what you think about our over-reaching government but you can’t deny that government initiatives are making an impact on home sales. First time home buyers made up better than 50% of all homes sold in 2009 thanks to the home buying tax credits. Congress extended the deadline once already. Don’t be surprised if they do that again. I’d bet on it.
4. Mortgage interest rates are at all time lows. I remember thinking back in my 20’s how “lucky” my parents were to have a mortgage rate of 4.5%. At that time rates were 14-15%. Well that time is here again. Low interest rates will continue to spur buying where prices will eventually steady.
5. As people are forced out of their homes due to foreclosures - they all need a place to live. They have to rent from someone – so why not from you? Rents are bound to climb and this can generate very high rates of return for you if you pick up a property at a good price and at a low interest rate.
6. Simple supply and demand. The population is growing and they all need a place to live. God isn’t making anymore land.
7. The National Association of Realtors (NAR) predicts there will be 5 million home sales in 2010. They estimate nearly half – or 2.5 million will be foreclosures or either short sales. It’s a great time to pick up great value.
So what are you waiting on? I believe we’re right smack dab in the middle of “The Perfect Storm” for real estate investors. It’s time to get off of the fence and profit from what I believe is the opportunity of a lifetime.
5 Success Tips To Achieving All Your Goals
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Planning and establishing objectives is a good first step in getting started on any project. Then it’s time to act. Many people struggle just getting started. But let’s say that you are successful in getting things off the ground, often its easy to get distracted and lose focus along the way.
What do you do when you come across barriers that hinder your progress? I’m going to share with you 5 tips that are critical for your success.
1. Keep On Keeping On – Have you ever failed at anything? I know I have. You feel devastated, like there’s no tomorrow, ready to just give up. However, I’ve learned over the years that it’s at such times as these that doors actually start to open.
Failing is not bad… if you learn from it. Actually success is a poor teacher, we learn more about ourselves when we fail. People are often so afraid of failing that they never do anything worthwhile – they play it safe. Sometimes, the greatest risk you can take is to play it safe. So go out and try something new. “Since the way we learn is by making mistakes, the greatest risk of all is to wait too long to begin making those mistakes.” Robert Kiyosaki.
2. Be a Decision Maker – Successful people are decisive people. When opportunities come your way, evaluate them carefully, make a decision, and then take appropriate action. Realize that indecision wastes time that could be spent on more productive tasks. You can avoid unnecessary risks by implementing your decisions gradually. Don’t attempt to make every decision at the beginning. Each action is contingent upon the success of the one that preceded it. “When I’ve heard all I need to make a decision, I don’t take a vote. I make a decision.” Ronald Reagan.
3. Develop a Good Attitude – While having a good attitude may not guarantee your success, your odds are much greater than with a bad one. No one controls your attitude unless you voluntary surrender it. Others may do something to influence it but you control it.
Ask your self this question. “If I had a friend who talked to me like I sometimes talk to myself, would I continue to hang around with that person?“ Decide if you’re going to get bitter or better. Either focus on the good and deal with the bad, or vice versa. Do yourself a favor, be an optimist. Believe you me, life will me more enjoyable.
4. Make Good Use of Your Spare Time – What are doing with your spare time? I remember someone saying that it’s what you do in your spare time determines your future.
Are you…
• Watching TV or reading?
• Napping or developing a skill?
• Talking to your friends or studying marketing?
We all have 24 hours in a day — how wealthy you become depends on how you spend those 24 hours. It all comes down to the choices we make every single day. In fact, you shouldn’t let one day go by without making sure you are taking at least one proactive step towards reaching your dream. It’s so easy to just do what you “feel” like doing. The next time you are looking for something to “kill time”, ask yourself, “is this helping me more forward or is it just causing me to just run in place.”
Turn your spare time into money time. Most people live off out their primary income source. It’s what you do in your spare time that will mainly determine how you spend your retirement. It’s O.K. to goof off when you were a kid. What are you doing now?
5. Don’t Overlook Small Details - There is an old expression that says, “If you take care of the little things, the big things will take care of themselves.“ It’s another way of saying that every job is composed of many small details, any one of which, if overlooked, can create big problems later.
If you have trouble dealing with annoying details- set aside a time during your work cycle (daily, weekly, or monthly) to deal with such unpleasant tasks. Prepare yourself mentally to deal with those tasks, and you may find that you dispense with them quickly and efficiently. You may even find that the job wasn’t nearly as unpleasant as you expected it to be.
There you have it. Heed this advice and just watch the difference it’ll make in your life.
Self-Worth Is Just As Important As Net Worth
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Has honesty in business become a thing of the past? With so many people flocking to the internet, many are asking themselves this question as they fall victim to the dark side of the internet.
The internet has a reputation and it’s continuing to live up to it. As people search to find solutions to their problems, many end up spending their hard-earned money on “Get Rich Schemes” only to find out that they’ve been duped. The so-called bargain they hoped for really wasn’t a bargain at all.
As business owners, we need to clean up our acts and bring old fashioned business ethics into the picture. Businesses can and should be more than just for money. Profits yes, but profits can be more that just financial. What about the value we provide for our employees and for our customers?
The word ethics comes from the Greek word ethos, which means “character.” Reputation is what people think of you but character is what you are. For goodness sakes, don’t leave your character at the front door of your business. Let it in.
Here are seven ways you can bring ethics into your business:
- Treat your employees well. If you have employees, pay them enough and provide benefits that will better their lives. Be kind and grateful to them because they are your best assets.
- Be honest even when others are not. Worry about what you do and not your competitors are doing.
- Serve your customers, clients and tenants well by providing great value and by giving them convenience. If you give them fair prices, high quality products and services, in return they will give you their respect and loyalty.
- Provide good customer service. Not only does this meet their needs but is also helps your business earn public trust. Remember that your customers are your best revenue generators.
- Stay away from “Black Hat” practices. I remain amazed at the number of businesses that continue to use unethical practices to sell their product or service. So many people are turned off by these practices. Wouldn’t it be better to have a customer for a lifetime than to have tricked someone into a one-time sale?
- Be fair to your competitors. To make yourself look better, you can either tear down your competition or build yourself up. The latter serves you better. Look at your competitors as motivation to do better.
- Build a win-win situation. Building your business on a foundation of honesty is a two-way street. Your customer gets what they paid for and you get a repeat costumer that will go out and tell his/her friends. You’re building great relationships and a great reputation.
Conducting your business the right way with a clean conscience is also healthier for you. You’ll sleep better at night with gladness in your heart that you’re doing the right things. Gratitude will come your way and you’ll have less stress knowing you’re running your business with high ethics.
So, what will it be? Will you play clean, or dirty? The choice is yours! I know what I’m going to do. How about come along and join me.
Those who are experienced in real estate investing already to know where to find Atlanta real estate investment. Yet, if you are a new investor you’ll need to figure out first where low cost homes are before you buy and sell. When looking to start a real estate business you’ll first need to find the property to sell.
It’s easy to bring in these leads through marketing in newspapers and magazines, online and more. However, the best leads must be checked out first over the phone. They collect enough information to decide if the property is a good option and then meet with the owner. When you find a home that’s suitable to resale, you’ll want to contract in order to buy the home.
When you find a home you like you’ll buy it within a set number of days, for instance 30 to 90 days is usually seen. Lots of investors like to buy these homes with their own capitol. When you sell that home you’ll be able to make all of your costs back with a nice gain. Investors can also start marketing Atlanta real estate investment to their buyer’s list with the homeowner’s permission.
The title company is your next stop after signing an agreement to purchase contract. When trying to get a buyer to purchase the house before closing they’ll let the title company know they are looking to perform an ‘Assignment of Contract’. Letting another buyer purchase the home in your place is done with an Assignment of Contract document and of course, the homeowner’s consent. It’s a great idea because this method lets you sell your ‘option’ on the homeowner’s property to another investor.
When the investor finds a buyer for the property they will sign the ‘Assignment of Contract’ document together later the buyer pays a small ‘assignment’ — around two or three thousand dollars. It can be more if the house ends up being worth more or is a better deal for the buyer. When closing the deal on an Assignment of Contract you’ll introduce the buyer to the homeowner at closing and everyone will sign all the correct contracts and documentation and get copies of such. You’ll also want to take copies of the forms, contracts and agreements over to the title company so they can process the title transfer.
On occasion the buyer will express interest in taking the documents over themselves, let them. So, whether you close on assignment or traditionally it’s important to have a buyer lined up as well as some Atlanta real estate investment. Knowledge of the process makes it go more easily and lessens the risk of encountering problems along the way.
To Learn more…http://atlanta-real-estate-investment.com/
A Guide to the Zestimate for Real Estate Professionals
By · CommentsIf you’re a real estate professional you probably have heard about Zillow.com. Zillow has become one of the most popular real estate sites on the internet. Zillow provides tons of real estate information… all for FREE. You can search for homes for sale, home prices, home values, recently sold homes, mortgage rates, apartment rentals, and much more.
For a real estate investor, this is a fast and easy way to get a snapshot of a home’s value. But you do need to understand how Zillow calculates it’s home valuation – called a Zestimate.
This video does a great job of explaining just how they arrive at their Zestimate.