Recession Real Estate Investing - The Short Sale

If you have been following the residential real estate market, you have probably already ascertained that the market has crashed.  Not  only crashed, but crashed and burned.  This is unfortunate for a lot of homeowners who can no longer afford to live in their homes.  Many are in the process of foreclosure because they cannot make the mortgage payments any longer. 

You can actually kill two birds with one stone by investing in these properties.  A home that is in foreclosure but not yet owned by the bank is called a short sale.  You can usually pick a home up like this for a fraction of the cost.  The owner, in most cases, just wants to be able to pay off the bank so that they do not have a foreclosure on their credit record.  A foreclosure can be devastating to credit and most people want to avoid this calamity. 

Finding short sale properties is not difficult in this economy.  You can either work with a real estate agent or you can do your own homework.  Foreclosures are a long process and is something that has to go through the court system.  A bank cannot just foreclose on an individual without getting a court order that gives them the title of the property.  Anything that goes through the court system is public record.  You can go up to your local county courthouse and find a list of properties that are in the process of foreclosure simply by looking on the court roll call.

Once you find a home in the process of foreclosure, you can then contact the owners and offer to buy the home.  You can find out how much the original mortgage was for the property through the county recorders office.  The mortgage and note are all recorded against the property.  This is a matter of public record.  If you have some knowledge of the real estate market as well and the current value of the properties in the area in which you are looking, you can find a real bargain.

You can find a home, for example, that is worth about $200,000 in which the owner is behind on a mortgage that is about $120,000.  You can offer to purchase the home for $130,000 and give the owner $10,000 in their pocket.  You can also offer to allow the original owner to stay in the house and rent it from you.  You will restructure the mortgage and make sure that you get a low rate.  You then have a home that is worth $200,000 for which you only owe a small portion and a renter who will, essentially, pay your mortgage. 

If the original owner buys the home back from you, they will have to do so under your terms.  You can then ask for the $200,000 when the market rebounds.  You have just made $70,000 profit in a few years, a much better yield than you can ever make in any other market investment. 

This may seem predatory, but you are really helping the original owner out.  If they are about to be evicted because they cannot pay their mortgage, you at the very least, buying them time and giving them a chance to get back on their feet.  If they cannot pay the rent to you, they will at least have had a bit more time to plan their move.  If they manage to buy the home back from you, it is a win win situation for everyone.

Sarah Miller offers real estate services in Bryan-College Station Real Estate. She is one of the RE/MAX Bryan-College Station realtors that has a long list of the finest real properties bryan tx, that any intending settler or buyer can choose from.

 

Tips On Making Money In Real Estate Today

If you are looking to get rich quick in the real estate market today, you are headed for disappointment.  The real estate market took a nosedive last year and has reached rock bottom.  Residential foreclosures are at an all time high and continue to grow. 

This does not mean that real estate investing is a poor idea.  To the contrary, now is the perfect time to invest in real estate.  Although the market is bad for sellers, it is excellent for buyers.  On top of that, the mortgage interest rates are lower than ever.  It is hard to imagine a better time than now to invest in real estate. 

Some tips on investing in real estate in the market today and how to make money are as follows:

Look for the long term investment.  Be prepared to hold onto the property for a few years until the market rebounds.

Look into renting property.  People always need a place to live.  You can rent your property to those who need a home and make money when you sell after the market regains its strength. 

Think about investing in commercial real estate.  Although residential markets are bad, the commercial market has remained stable.  You can invest in property such as strip malls and office buildings and still make money. 

Consider investing in vacant land.  Look for property in areas that are undeveloped.  You may find in a 10 years that your property is worth 10 times more than what it is today.  Think of the people who owned farmland in Orlando.  The property is now worth thousands of times more than original asking price.

Do not panic. This should be rule number one.  If you own a home, do not panic and sell.  This is how you lose money in real estate.  Hold onto your property and ride out the storm.  The market always rebounds. 

Consider new construction.  If you are able to act as a general contractor and build a home, there is money to be made.  New construction is always desired by most people as they like to be the first to live in a home.  If you are in the trades, consider building your own home.

Buy foreclosures.  Look at foreclosures that are on the market and that are owned by banks and mortgage lenders.  Put in a bid and do not be afraid to bid low.  There are thousands of foreclosures across the market, even in upscale neighborhoods.  This is where you can make some serious money if you buy low, hold onto the property for a while, and sell high.

Buying low and selling high is how you make a profit in any business and is no different in the real estate market.  The current market, however, does not make it possible to sell high.  There are more homes on the market than there are buyers.  Many of the buyers that are out there are foreign investors who can spot the opportunity of purchasing property in the United States at bargain basement rates.  Although this is not the market to sell high, it is definitely the market to buy low. 

 

FSBO Sellers – The Real Estate Agent Is Not Your Enemy

If you are selling your home without a real estate agent, you need to realize the agents in your area are not your enemy. In fact, they may prove very useful in moving your property.  

FSBO Sellers – The Real Estate Agent Is Not Your Enemy 

A common mistake made when people decide to list their home for sale by owner is to assume real estate agents are to be avoided. This is a mistake for a number of reasons and can significantly hinder your efforts to sell the property. Consider the following.  

A majority of buyers will use a real estate agent to locate and make offers on real estate. I am sure this is hardly a shocking revelation to you. Given this fact, many FSBO sellers make the mistake of treating real estate agents rudely. If you receive a call from an agent, you need to realize the person offering their services may be the same person that calls a week later with an interested buyer. If you burn bridges by being rude or hanging up on real estate agents, you run the risk of missing out on potential buyers. 

Even if a real estate agent does not bring a buyer, they can still be of assistance to a FSBO seller. Put bluntly, the real estate agents contacting you expect you to eventually give up trying to sell your property on your own. Although incorrect, this assumption leads them to view you as a potential client down the road.  The negative aspect of this is they will continually contact you. Ah, but there is a positive aspect as well. 

A real estate agent that sniffs a potential client can be very helpful. To generate credibility with you, they will give you an astounding amount of help for free. Many realtors, for instance, will provide you with all the contract documentation you need for the sale and purchase transaction for the property including a purchase agreement, escrow instructions, deeds, disclosures and a list of documents you will need. Some will even go so far as to provide you with free brochures for your home. Now, does that sound like an enemy?  

Make no mistake, a real estate agent will help you because they believe you will eventually become a client. You probably will not, but there is little reason to view them as an enemy in your efforts.

Sarah Miller offers real estate services in Bryan-College Station Real Estate. She is one of the RE/MAX Bryan-College Station realtors that has a long list of the finest real properties bryan tx, that any intending settler or buyer can choose from.

6 Reasons Why You Should Buy Real Estate In December

December and New Year's Day give you the perfect occasion to buy real estate. Not only can you pick up a bargain property from a motivated seller, you can save on your purchase expenses. 

1.  Home shoppers put off looking for a home because of holiday decorating, shopping, and parties. Plus, the cold weather makes home buyers prefer to stay home; they wait for warm weather to buy real estate. Get the edge with little competition from other buyers. 

2.  Home sellers who didn't sell during the recent buying frenzy are worried that their home will not sell. Any seller offering their home for sale during the holiday season is motivated. 

3.  Real estate agents need to keep their momentum going and can't afford to take too much time off. When the agents aren't as busy, you get better service. Plus, they're more likely to take low offers seriously. Agents love investors ready to buy real estate during December. 

4.  Interest rates continue to creep up. Who knows what the rates will rise to next year? 

5.  Lenders threaten to tighten up qualifications next year. Last summer, loan officers were able to get through almost any loan. Today is your best shot to buy real estate and get a great rate with the easiest qualifications. 

6.  Appraisers need work. Too many individuals became real estate appraisers when there was too much work. It used to take a week or more to schedule an appraisal. We just ordered an appraisal and the appraiser wanted to come out the same afternoon! Also, appraisal fees cost less today than last month. 

Clear some time from your busy holiday schedule and go find a bargain house. Make many offers. You won't get this break for another year.

 Sarah Miller offers real estate services in Bryan-College Station Real Estate. She is one of the RE/MAX Bryan-College Station realtors that has a long list of the finest real properties bryan tx, that any intending settler or buyer can choose from.

5 Useful Tips In Buying A House

Buying a house is a very serious matter that comes in to people’s lives. It is very risky to invest your money in buying just any house you find. You must have some guidelines that can help you decide which house is the best for you. Here are some: 

1.         Determine your rights 

When you are ready to buy your own house, be sure you understand your rights as a homebuyer. Knowing the process of buying a house prevents you from getting scammed. You can personally do your home work or seek for a knowledgeable person like a real estate agent or a broker. Make sure that the agent you hire is licensed and have a wide knowledge regarding the area. 

2.         Make sure you can afford it 

Your budget is really a big deal in buying your own house. What you want is different from what you need, so be practical. You don’t really need a big house if you’re just one person that travels everyday, right? Make sure that you make the best for your money. Seek help or ask for suggestions especially for those who have knowledge in real estate prices. If you can’t stay for at least a year, buying a house is inappropriate for you. You may save a whole lot more of money if you sell it urgently. 

3.         Make sure it fits your lifestyle 

Make your house a home. Be sure it really fits your way of life and you are comfortable with it. A good example of this is if you’re working in an office, a good place to find is near or in the vicinity of your office. If you love nature, a good place to find is outside the city with clean air, near parks, has a mountain view or near at the beach. Your personality really matters in finding a good house. Make sure to look at its suburbs first and try to gather some information about the area and its surroundings. Try also to consider the kind of neighbors you will have. 

4.         Consider your future plan 

If you’re newly married, you might to consider how many kids you want to have. You can assume the number of rooms or the home space you need. If you can afford a house that is near to a good school, it is better. School districts are more important to home buyers, therefore, it will increase your property values. 

5.         Be organized 

It is very important to make your document files organized and safe. Because it will prove that you own the house. It will help you a lot especially when it comes in paying your house payments (taxes and amortization).

Sarah Miller offers real estate services in Bryan-College Station Real Estate. She is one of the RE/MAX Bryan-College Station realtors that has a long list of the finest real properties bryan tx, that any intending settler or buyer can choose from.

5 Major Reasons Why You Should Buy A Home Instead Of Rent

There are times when it is better for a person to rent, but most often home ownership has many more benefits and advantages.  

About 10 years ago I had a retired aunt and uncle who rented a condo in Las Vegas. Uncle Jim (not his real name) was a retired minister. Throughout his career he and his wife lived in parsonages, which are homes furnished by the congregation while they ministered there.  

He and his wife told me that the biggest mistake they ever made was not to invest in buying a home.  In their retirement years, when their other retired friends were living in homes that were almost paid off and had appreciated greatly, Uncle Jim and his wife were using a huge portion of their limited retirement money to make expensive condo rent payments. They strongly cautioned me not to make the same mistake they had. 

Recent studies are showing that there are many benefits for both the owners and the community for owning your own home, including increased education for children, lower teen-age pregnancy rate and a higher lifetime annual income for children. Besides these, listed below are some of the primary advantages for owning your own house. 

1) More Stable Housing Costs

Rent payments can be unpredictable and typically rise each year, but most mortgage payments remain unchanged for the entire loan period. If the taxes go up, the increase is usually gradual. This stable housing cost especially important in times of inflation, when renters lose money and owners make money. 

2) Tax Savings

Homeowners can be eligible for significant tax savings because you can deduct mortgage interest and property taxes from your federal income tax, as well as many states' income taxes. This can be a considerable amount of money at first, because the first few years of mortgage payments are made up mostly of interest and taxes. 

3) Debt Consolidation

If you need to, you can refinance a mortgage loan to consolidate other debts (an opportunity you don't have if you are renting.) And the interest on this is also tax deductable. 

4) Equity

Instead of payments disappearing into someone else’s pocket, home owners are building equity in their own home. This is often one of a person's biggest investment assets.  Each year that you own the home you pay more toward the principal, which is money you will get back when the home sells. It is like having a scheduled savings account that grows faster the longer you have it. If the property appreciates, and generally it does, it is like money in your pocket. And you are the one who gets to take advantage of that, not the landlord. You can then use this equity to plan for future goals like your child's education or your retirement. 

5) It is yours!

When you own a home you are in control. You the freedom to decorate it and landscape it any way you wish. You can have a pet or two. No one can pop in and inspect your home and threaten to evict you. 

Even young people, like college students out on their own, can often benefit from home ownership. It puts them ahead of other young people their age financially by helping with their credit and giving them what is often an excellent investment. Often a college student buying a home will rent the rooms out, and his or her roommates end up making the payments for the house. When the student is ready to move on, her or she can sell the home (hopefully making a profit) or keep it as an investment and continue to rent it. 

Buying a home is an important decision. It is often the largest purchase a person makes in his or her life. Home ownership also comes with some increased responsibilities, and isn't for everyone. There are some disadvantages to homeownership that you should take into account. 

1) Increased Expenses

Your monthly expenses may increase, depending on your situation. Even if the monthly payments are the same, home owners still have to pay property taxes, all the utilities, and all the maintenance and upkeep costs for the home.  Often you need to supply appliances that were furnished with a rental. 

2) Decreased Freedom of Mobility

Homeowners can't move as easily as a renter who just has to give notice to the landlord. Selling a house can be a complex and time consuming process.  

3) Risk of Depreciation

In some areas with overinflated prices, there may be a risk that the house will depreciate instead of increase in value, if the prices go down. If you then sell the house, you may not get enough money from the home to pay back your mortgage, and you will still owe the mortgage company money. 

4) Possibility of Foreclosure

If for some reason you are unable to make your payments, you risk having the lender foreclose on your property. This can result in the loss of your home, any equity you have earned, and the loss of your good credit rating. 

When considering home ownership, you need to weight the advantages and disadvantages for yourself.  If you are like most people, you will find that homeownership is worth the risks and disadvantages.

Sarah Miller offers real estate services in Bryan-College Station Real Estate. She is one of the RE/MAX Bryan-College Station realtors that has a long list of the finest real properties bryan tx, that any intending settler or buyer can choose from.