Buying Real Estate Foreclosure Property

Finding Foreclosures

The easiest way to find foreclosures in a particular area is on the internet. A Google search for foreclosures and an area will provide you with lots of leads. If you are looking locally for foreclosures coupling driving around with a Google search will provide even more information. You can also look up information on foreclosures in county offices in most states. A combination of all three will provide you with many candidates. Try to get an asking price for each property.

Winnowing The List

The next step is to use the asking price (for analysis purposes), taxes, assume an interest rate and estimate insurance costs. Add all of these to determine a monthly payment. Add 25% to 30% to this to get a reasonable rental price. Next couple each property with the bank that owns it. A Real Estate agent can help you with this process but remember, you need to pay the realtor a fee at the sale. If you deal with the bank directly, no fee is required.

Negotiate with the Banks

The next step is to negotiate with the banks. Use your analysis for rental costs to make sure that you can stay within your cost parameters. Explain to the bank why you must have the property at a specific price or lower so that the property will cash flow. Once you have determined a price negotiate a mortgage rate with the bank. This process should be repeated for each of the properties on your list. This may take some time, if a property you negotiated is sold by the bank before you complete your selection process, don't be concerned. This is investment property not something that you will live in. Think of it as a stock, there are always more to look at.

Pulling The Trigger

At this stage of the game, you have all of the hard numbers that you need. Now you must consider some of the qualitative factors. Where is the property located? Is the area desirable? Are there many foreclosures in the neighborhood? These are some of the factors that I use to make a decision. Use your own judgement. Also if you are buying two properties, should you get two medium priced properties or there lower priced properties.This part of the decision making is usually up to your own personal preferences. If you hired a Real Estate agent his or her opinion should be sought out. In any event, het off the dime, make a decision and get started!

Real Estate Agents & Property Buyers - What Is The Difference?

There are many differences between real estate agents and property buyers. Both offer professional services relating to real estate, but the differences are clear. You should be aware of the differences between estate agents and property buyers. Use the right real estate professional for the right house selling situation.

Property Buyers:

Property buyers are people who actually buy homes. If you need to sell your house, property buyers are the real estate professionals who actually give you an offer to buy your house. Property buyers do not charge you any commissions or fees and can typically buy your house very quickly.

Property buyers are real estate professionals that purchase many houses in your local area. Property buyers are also real estate investors so they many not be able to pay as much for your house as an end home owner would. With that said, if you are selling your house you typically have to pay 6 percent in real estate agent commissions. For a $100,000 house that is $6,000 in real estate commissions. Given the large amount of commissions you would have to pay when using a real estate agent, property buyers may be able to give you the price you need for your house.

A property buyer will give you a free, confidential, no-obligation offer for your home. So if you are thinking about selling your house I would recommend getting a free offer from your local property buyer. You have nothing to lose because if you do not like the offer you receive you do not have to sell your house to them.

The best time to use a professional property buyer is if you need to sell your house fast. There are many reasons people need or want to sell their house fast. If you are in any of the following situations I would recommend getting a free offer for your home from a property buyer.

Going through a divorce, need to stop foreclosure, being relocated by your work, you re an investor who want to cash out of an investment property, you do not want to be landlord anymore, you just inherited a property and need to sell it, you do not want to deal with a real estate agent, your home is not in excellent condition, your home is 100 percent financed and you have no equity.

These are just a few of home selling situations where you would be better offer selling your house to a local property buyer. The best way to get in contact with a local property buyer is to complete a very short on-line form from a company that focuses on buying houses. You basically complete the very short form, and then a property buyer will contact you with their offer. You have no risk or obligation to accept.

Real Estate Agents:

Real estate agents are real estate professionals who help home owners buy and sell real estate. They do not buy and sell real estate themselves. Real estate agents typically charge a commission of 3 percent for their service. The 3percent is the percentage related to the price of the home you are selling or buying.

When you enter into an agreement with a real estate agent you are signing an agreement with them that you will allow them to help you sell or help you buy a home. You can not go anywhere else or use any other agent to help you in your home selling or home buying needs.

Many times home owners sign an agreement with a real estate agent and months later, after their house sitting on the market want to cancel their agreement. Because the real estate agent has expenses for marketing, time and effort they are reluctant to let you out of your contract.

The best time to use a real estate agent is when you buying a home. Home sellers typically pay real estate commissions, so when you buy a home it is free to use a real estate agent. Now if you have bad credit and you want to buy a home, real estate agents are not always your best option. Many times a professional property buyer has many homes they will sell to you on terms. You may have herd of the terms rent to own, lease option, or lease purchase. There are homes that property buyers are selling to people who have trouble getting traditional financing.

The best time to use a real estate agent is when you are buying a home. Home sellers typically pay real estate commissions, so when you buy a home it is free to use a real estate agent. Now if you have bad credit and you want to buy a home, real estate agents are not always your best option. Many times a professional property buyer has many homes they will sell to you on terms. You may have heard of the terms rent to own, lease option, or lease purchase. There are homes that property buyers are selling to people who have trouble getting traditional financing, which in our current real estate market can be very easy.

How to Earn Money in Real Estate and Make a Nice Income

To earn money in real estate, you don't have to be someone who is certified and who went to school for you. You simply just have to know the ropes and know how to turn a piece of property into a nice income. By doing this, you'll be able to put some nice income into your bank account, and attain time freedom as well.

When you invest in real estate, you can simply earn money from your property by renting it out. This is what a lot of beginner investors do and it's a great place for you to start also. In this scenario, all you have to do is make minor repairs and upgrades and the place is ready to go. It doesn't matter the style of home you want to invest in, all you need is the right location and the proper tools to get the job done.

There are always risks involved however when investing, so you should be cautious with every transaction. When making investments, it's best to stick with the ones that will make the most sense and that will benefit you in the long run. You will make your money back in time as you invest in more and properties and your return on investment on each property will help with your income.

A simple formula for real estate investing is to fix up and repair your own home, and then sell at a higher price when market conditions are better. This is how a lot of people get their start in real estate and it's something that you can do too. If you can stay on top of the marketplace and know when the market is up or down, you'll be able to price your home accordingly for the best price to make it sell at.

And it doesn't matter how big or small your home is - you can still earn money from real estate by investing in your own home. You should consider repairs such as the kitchen, bathroom, carpet, dining room, and outside appearance to get the most bang for your buck.

For great real estate ideas, you should consider watching HGTV or the DIY channels for great design and home staging tips. These 2 channels focus on designing, renovating, and upgrading your home, and ways to sell your property for higher than what you bought it for.

Investing in real estate can be a great idea if you know what you are doing. Study the marketplace and get a sense of how the market will respond to your home. Take a look at the prices of similar homes in your area and prices that they have sold for. You will want to use this tip when pricing your own home, so don't take it lightly.

You will also want to visit open houses of homes that are up for sale for ideas on how to make your home sell. Whether you're selling your home or a fix-up home that you bought, the ideas that you take away from open houses are sure to benefit in the long run.

Good luck on your real estate investing.

The Eight Biggest Mistakes Buyers Make in Real Estate (and How to Avoid Them)

We see ourselves as advisors. With buyers, our role is to help clients find, negotiate, and purchase properties while avoiding critical mistakes in the process.

Recently we interviewed people from our team as well as our colleagues at Boulder Creative Housing. We also reviewed some of what we've learned in real estate here in Boulder and from our real estate experience on Nantucket.

The result is the Eight Biggest Buyer Mistakes and How to Avoid Them. As always, feel free to contact us with any comments or questions. You can also reach me at 303.746.6896.

The Eight Biggest Buyer Mistakes
(and How to Avoid Them)

Mistake #8. Skipping due diligence on location and community.

From the time it takes to commute to the quality of neighborhood schools, a lot of things can affect the enjoyment of your home that has little to do with the house itself. Will your property be impacted by the new transit oriented developments in Boulder and along the tech corridor?

Where is the nearest grocery store, post office, gas station, and city park? Is there a landfill or factory nearby that might affect the air or water quality? How close is the nearest EPA Toxic Waste Superfund site? Have you looked into the megan's law database for Colorado or contacted local authorities to check whether registered sex offenders might live nearby?

You can do a lot of research online, but community character is nearly impossible to accurately determine from a website. Yes, there are many resources on the Internet including this blog and a list of links and other resources we've collected. But that's not enough.

Before buying a home, you should invest the time to walk the neighborhood, talk to the neighbors, visit local schools, time your commute to work, and more. This kind of information is extremely valuable and may require several visits to the community. And it's well worth it if you want to be happy long term with the choice you're making.

Mistake #7. Not getting a building inspection.

Even if you are an expert carpenter with many years in the trades, we recommend a professional building inspection. In some cases (like established neighborhoods with mature trees between the house and the street which may be prone to root intrusions) we also recommend a sewer inspection with fiber optics/remote cameras. If there are signs of water damage or moisture in the home, we'll recommend a mold inspection as well. The upfront costs for inspection can start as low as $250 and it's cheap peace of mind.

Mistake #6. Overpaying for a property.

In Boulder and surrounding communities, many buyers are from out of state and compared to their home city, our local real estate can look like a tremendous bargain. Often sellers will toss out a high price to gauge the market. This also sometimes happens because the sellers chose a agent based on the highest comparative market analysis, and they'll need some time to adjust to market reality.

Smart shoppers will ask their agent for a list of compables before viewing homes and for more specific comparables before putting in an offer. Even unrealistic sellers have been known to come back to reality when confronted with well documented comparable sales. What else has sold in the past few months that is similar to this property? What is currently on the market that matches this property's characteristics?

Only put in an offer after reviewing comparables and knowing the market. This step can save you thousands of dollars. It's also something a good buyers' agent should be able to prepare for you.

Mistake #5. Compromising on your property requirements.

We ask our clients to take the time to prepare a list of "must have" features in a home. Based on these criteria and their chosen location, we'll set clients up with emailed alerts of modified listings and newly listed properties as they come to market. This is the most efficient way to get listings that fit a client's needs.

Most websites feature property that is days or months old. An MLS driven listing alert system is efficient and, when properly set-up, can save you countless hours cruising the internet.

But browsing the Internet is fun and we'll sometimes have clients call to setup showings for homes found online which don't have all their "must haves" features. If a client happens to fall in love and purchase it, it's likely down the road that the missing "must have" feature will start to bug them.

Just like the jolly guy in the furry red suit. Make a list and check it twice (and then stick with it).

Mistake #4. Not doing your homework on financing.

This mistake can cost your thousands of dollars, cause you to miss on the best properties, and potentially damage your credit rating.

A lot of potential buyers start the process by looking at homes while assuming they can get a loan. Sure, we like window shopping too but it's helpful to do some financial homework. Start by doing the basic math yourself using widely available online mortgage calculators, including the ones we feature on our website (on pages with property's details). You should also familiarize yourself with some financing basics.

Before you start to setup showings and view properties with an agent, it's smart to consult with a reputable lender and confirm your financial plans. You'll find out how much house you can comfortably afford based on currently available loan programs. Importantly, after the initial consultation, good lenders will also be available to provide a prequalification letter matching any offer you might make - a critical element in strengthening an offer.

We always recommend clients check out several lenders and available loans because mortgages are largely commodity products. The right loan for you could be an ARM, a fixed rate mortgage, cross collateralization with another property, or a plain vanilla FRM.

Good lenders can help you find the best loan for your specific situation. A lender with access to the best programs can save you thousands of dollars over the life of your loan. Even when putting together an offer, a good lender can help structuring the financing of your offer strategically and even help you present a stronger offer with a lower purchase price.

Sadly, buyers typically do little due diligence with lenders.

Mistake #3. Not seeing past cosmetics and following first impressions.

Sometimes the best deals simply don't show well. Maybe there are obvious visible blemishes or too much clutter. The dishes may not be washed. Walls may need to be painted and doors rehung. Maybe the basement even smells like cat urine.

To point, this week we closed on a house that was at least 10% under market value. When we first saw this house it was a mess. There was mud on all the floors. Boxes were everywhere from the tenant that was evicted. The backyard was filled with junk. And yes, there was actual critter droppings of some sort in one corner of the basement. In a single word, the property was Nasty!

Luckily, my buyers had vision. Through an inspection resolution we negotiated, the whole house was cleaned from top to bottom. There are no leftover tenant belongings. The yard is clean. All the walls freshly painted. The kitchen was even recaulked and the smell is gone. The house looks like its true market value now and the buyer, who I represented, saw beyond all the cosmetic issues and literally saved himself thousands.

Mistake #2. Trying to deal with the seller directly.

The allure of contacting a seller directly is strong and without knowing much about the real estate, I probably would have once been tempted to make this common mistake as well. The idea most people have is that if they call the agent or owner directly, they'll save on the real estate commissions.

Oops. This is not usually how it happens. If the home is listed, the owner will probably refer you to their agent because (by the contract they've made) even if they do all the work, they'll most likely still owe that agent a commission. Although certain sellers FSBO their property, they nearly always offer a buyers agent commission. If you negotiate directly with a FSBO without an agent, they'll try their hardest to pocket the commission themselves. After all, that's why they are FSBOing in the first place. It's not to save you money. Also in this situation, you have no representation or guidance through the process and your earnest money (and more) could be at risk.

In the worst case scenario, call the name off the sign or advertisement and you'll be dealing with a sellers agent. This person doesn't represent you or your interests at all but still collects the buyers/transaction agent and listing agent commission. In this situation too, you have nobody on your side negotiating and watching out for your interests.

Can you save money? Perhaps. It is possible to catch something before it hits the market. And with one notable $4MM exception, my experience is most FSBO sellers have an inflated sense of what their home is worth.

Top executives and others who deal with large transactions nearly always hire agents to negotiate when dealing with personal matters. Why? It's not because they aren't capable of expert negotiation in behalf of their clients or company. They do this kind of thing everyday, but they choose agents to go to bat when their personal interests are involved because negotiating directly in these circumstances rarely results in the best deal. A experienced and professional agent will present your offer in the best possible light and get you a better deal.

Mistake #1. Choosing the wrong agent.

Real estate is a business with low barriers to entry. We often find part-time or inexperienced agents on the other side of the table. Their unprofessionalism and inexperience can cause big mistakes and cost buyers serious money.

Choose a buyers agent with the same standards you would apply to your attorney, CPA, or other advisor. Once you find the right agent, trust them to do their job. Put them to work for you and you may find a good buyers agent is the best deal in real estate.

Want to know how well the local real estate market is holding up? Is Lafayette appreciating faster than Louisville? Ask your buyers agent.

A couple of weeks ago, I took time with client to go over contracts related to her offer. She had rented for 25 years and was becoming a homeowner for the first time. Nervous is an understatement. Because she was also legally blind, I read the buyer agency contract and the contract to purchase the property out loud, carefully explaining each provision, answering her questions, and covering "what if" scenarios. It took well over six hours.

I'm proud to report that because of the extraordinary efforts of our lender partner, despite multiple difficulties including appraisal issues and several mis-steps by the listing agent, my client closed on her house today. On time and below budget.

It's time to raise the bar in real estate. You can help by choosing your agent carefully.

Tags:Boulder, Colorado, Real Estate, Boulder Real Estate, Tips, Strategy, Buyer's Agent.

Note: Our objective is to make this blog one of the best resources on the web for real estate and development in Boulder Colorado and surrounding communities. The ideas and strategies in this blog are the opinion of the writer and subject to business, economic, and competitive uncertainties. The Silver Fern Team does not provide legal, tax, or investment advice and is in no way responsible for investment results derived from this article. One should always conduct due diligence before buying or selling real estate or other investments and consult with a tax, legal, and investment advisor. Like what you've read? Subscribe to this blog and get new posts in your email.

What Are Your Retirement Goals? A Case For Real Estate And Alternative Investment

Most financial advisors would have you believe that when planning for your retirement, the goal and the inevitable outcome is subsistence solely on the savings you have accumulated until the point of your exiting the work force. The reason they try to sell this strategy of mere sustainability is because the investments types they put forth-such as mutual funds, life insurance products, stock and bond portfolios, etc.-are typically the ones on which they stand to earn a commission. This designated route barely stands to keep up with inflation, let alone build long-term wealth and consistently pay for living expenses. That being said, the goal should be to NEVER worry about having enough money during your later years, but to see investments comfortably cover expenses while exceeding inflation, all WITHOUT depleting your savings and principal balances in your retirement account.

Think always of working to perpetuate and not simply to preserve. This means having your money continue to work for you, such that perhaps even your heirs will have residual wealth to use towards their own retirement. Investing in real estate allows you to obtain this goal because it produces above-inflationary returns and can grow your wealth in multiple ways.

First, real estate produces positive cash flow after monthly expenses. After the

mortgage payment, property taxes, insurance, repairs, and property management, you can still make 7% - 12% and more on your down payment. Using a loan from a bank or private financing institution to leverage your investment can help you see even higher returns on your money.

Second, depreciation benefits obtained from owning real estate can significantly reduce the amount of taxes owed on the rental income earned. Reducing taxes is imperative to wealth building since it is your biggest expense in life.

Third, properties purchased below market value come with built in equity, allowing for immediate profit. No stock allows for this same benefit, which comes in addition to possible future appreciation of the property's market value.

Fourth, if you purchase a property using a bank and put 20% - 25% down on the investment, you can pay down the loan every year, giving you one more profit center when investing in real estate.

The fifth, and most important advantage of investing in real estate is that you have control over your investment where other types often delegate it to another outside party. Buying a property and buying correctly puts the power of controlling cash flow in your hands. Furthermore, you have control over your exit strategy and you have collateral-in the form of a hard asset-for your investment.

With all of these benefits of investing in real estate, it's a no-brainer that you should include real estate as a large part of your retirement portfolio.

Real Estate India, Indian Commercial Real Estate Investors - Property Sales In India

Commercial real estate sector is in boom in India. After liberalization of the economy, Indian real estate business took an upturn in the last fifteen years. With the advent of multinational companies to India to set up base here, especially the IT sector ,the demand for land has risen up and with that the prices have also shot up. Research estimates that Indian Real Estate market is expected to grow from the current USD 14 billion to a USD 102 billion in the next 10 years. ..

The main growth thrust is coming due to favorable demographics, increasing purchasing power, existence of customer friendly banks & housing finance companies, professionalism in real estate and favorable reforms initiated by the government to attract global investors.

In India, the commercial real estate requirement is led by the leaders of the IT industry, this includes the BPO and ITES sectors.

It is estimated that the demand for space by the IT/ITES sector alone is expected to be 150 million sq.ft by 2010.

The demand for land in metro cities like Delhi, Mumbai and Chennai is huge and prices for the same have shot up to huge proportions. These cities are expanding in a huge manner to accommodate the ever demanding requirement for land. For example, Bangalore which is considered as the IT capital of India, is already short of land and is expanding to create something called as Greater Bangalore. This is to dedicate land to the IT and BT (Biotechnology) industries.

The increase in purchasing power has resulted in big retailing companies setting up base in India; as a result there is a mushrooming of retail centers across the country.

The industrial sector is experiencing a huge surge, resulting in increase demand for land. There is a shortage of land in bigger cities, which has resulted in companies setting up bases in smaller cities. These cities are also called as Two-Tier cities.

Indian real estate is experiencing an overall growth in all sectors like IT, BT, Industies, Healthcare etc,apart from this , in urban India, there is a shortage of space in the residential sector by approx 6.7 million housing units. The bigger cities are expanding to accommodate the growing population and as a result there is a huge demand for land.

Commercial Real Estate and Inflation - Part II

In the first part, I looked at what inflation is and why it is in our future. So now, what can you do about it?

What is the Effect of Inflation on Commercial Real Estate?  

Property acts as a store of value, like gold and other hard assets. Currencies come and go but real estate and gold go on and on. They have intrinsic value, because "the good Lord is not making any more," as the saying goes. In contrast, the government can print and spend money faster than anyone can count, inflating the money supply and thus devaluing the dollar. So, when the money supply is inflating, the dollar's value is falling and your property's value is rising in pace with or faster than inflation.

Rent. A second value that property can bring is cash flow from rents. People need a place to live and businesses need a place to operate and they will pay to use your property. Properties increase in value as the rents increase. Now commercial leases vary in length. The shortest terms are in apartments and self storage which typically lock in rates for 6 to 12 months before renewing with the possibility of a rate increase. Office and retail leases generally run from 3 to 5 years in length and often include fixed rent increases. Some leases to major companies for large spaces may run ten years with renewal options. During periods of high uncertainty about inflation, like the 1970's, the rent increases are keyed to the Consumer Price Index or C.P.I.   Bottom line - the Landlord wants the ability to raise his rents at the rate of inflation or faster. Landlords want short leases with CPI escalations while Tenants want long term fixed rate leases, so the prudent property owner will negotiate to protect himself from the erosive effects of inflation.

How does Inflation affect your Mortgage? The value of your mortgage is being paid down by your monthly payments of principle. But inflation helps because your mortgage value is declining in real terms as the value of the dollar declines. You are paying it off with inflating dollars. And the value of the property is going up faster along with the pace of inflation. So your equity, which is a smaller part of your property's value is going up at the rate of inflation while the real value of your mortgage is declining, magnifying the increase in the value of your investment.

 
Inflation and Interest Rates Historically, during times of inflation the Federal Reserve has been committed to fighting inflation. They do this by raising interest rates. Remember in the early 1980's when briefly we had 21% interest rates? In the present deflationary environment, interest rates are being kept artificially low to stimulate borrowing. They will rise again, and if inflation really kicks in, then The Fed may substantially raise interest rates to combat inflation. Therefore, the investor may want to consider taking the opportunity to borrow at today's lower interest rate level, as the value of having a lower interest loan will be greater when interest rates move higher due to inflation.   So we can see that Commercial Real Estate can perform well in an inflationary period because 1) property, like gold, is a store of value, 2) rents can be raised to keep up with inflation and 3) and a loan amount declines in real, inflation-adjusted terms, while you pay it back with inflated dollars.  I am definitely not saying inflation is a good thing. Inflation is bad! Inflation will hurt companies and their stocks may not go higher in value in an inflationary period. However, commercial real estate investments can be a good place to protect your wealth during inflationary times to come. First deflation, then inflation whiplash. Ouch!   Investment Realty Company is actively pursuing some excellent investment opportunities clients. Please call me to see how we can help you