Nu-Way Real Estate Investment Idea

Author: Jason R. Hanson

Preparation is one of the major keys to success. If you are prepared when you meet with a seller, then you will be more confident and more likely to close the deal.

Your preparation in meeting with a seller begins with filling out the seller information sheet. Is the sheet completely filled out? Do you know what is motivating the sellers to sell quickly? Have you identified if this is a subject-to, lease option, or short sale deal?

Once you have determined that you have a deal, you need to secure an appointment immediately. Try to make the appointment as soon as possible, so the seller doesn’t have time to talk to the competition.

The night before your meeting with the seller, you need to prepare an “information” folder. The first item that this folder will contain is a Special Report about how the property will be purchased (subject-to, cash, etc). This Special Report should be very detailed and answer all objections the seller may have. The next item in the folder should be several testimonials from previous satisfied clients. Testimonials are very powerful and have helped me secure several deals. Make sure that you always ask each seller or tenant that you assist to write a testimonial letter for you. Next, you will want to include every form pertaining to the type of deal you are trying to put together. You want to give the seller copies of blank forms so they can review everything they are going to sign. Every time you visit a seller, your folder should contain at a minimum:

1. Special Report
2. Testimonials
3. All contracts and forms

You will also want your own folder when going to meet with a seller. This folder will contain all of the forms and contracts needed to close the deal. It will also include a checklist of all the forms needed and other information you must remember. This can include remembering to put a lock box on the front door, checking the mortgage statements, or putting a bandit sign in the front yard. After your folder is finished, you are almost there. On the day you meet with the seller, dress appropriately. Arrive at least 10 minutes early to the meeting. If you ever think you are going to be late, always call the seller ahead of time. Greet the seller with a firm handshake and a big smile. Thank them for allowing you to visit with them today. Then ask them if it is alright if you take a tour of the house. While you are doing this, make small talk with the seller to build rapport. After you have inspected the house, sit down at the kitchen table and ask the seller if they have any questions before you begin to go over the paperwork. Once all questions and objections are handled, then review the paperwork. After the paperwork is reviewed, address any additional questions and then sign everything.

Clearly, you can see that if you are not prepared with your paperwork, not dressed properly, and don’t know how to handle objections, then the seller may not work with you. Prepare ahead of time to ensure you are coming home with a signed contract.

Author: Simon Volkov

If you play your cards right, investing in foreclosed properties can be a very profitable venture. Although it’s not quite as simple as the late-night infomercials lead you to believe, the following tips can help you prepare for what lies ahead.

Before property is labeled “Foreclosed” it must first be placed for sale through a real estate auction. In order to purchase property through the foreclosure auction, individuals must place a minimum bid equal to the amount of the loan balance, along with any other costs associated with the process, such as accrued interest and attorney fees.

Typically, foreclosed real estate is sold “as is”. Occasionally, the ex-homeowner may still reside in the home and individuals who purchase the property will have to deal with having them evicted. This is not a pleasant experience, so conduct research on any foreclosed property you are interested in to determine if the home is vacant or occupied.

If your bid is accepted, it will be your responsibility to pay-off any liens and/or back taxes attached to the property. You will also be responsible for taking care of necessary repairs or renovations.

While it is true foreclosed property can yield a good return on your investment, it is imperative you engage in due diligence. Learn as much about the property as possible before placing your bid at auction. Keep in mind much of the real estate placed on the auction block is not worth the amount owed on the note. Therefore, you want to look for properties that do not have tax or creditor liens attached or those in need of extensive repairs or renovations.

If the foreclosed property is not sold through auction, it is returned to the mortgage company, who returns it to the bank. At this point, foreclosed property becomes real estate owned (REO) property.

Once foreclosed real estate becomes bank owned, the mortgage note no longer exists. Generally, the bank will negotiate with lien holders to remove or reduce liens placed against the property. They will also take care of evicting individuals still residing in the home. Occasionally, they will invest in repairs and renovations.

REO properties are frequently listed on bank websites. Included will be the name of the contact person, along with their phone number or e-mail address. Prior to contacting the specialist, thoroughly investigate the property and conduct research on the market value of other homes in the area where the foreclosed home is located.

If possible, obtain estimates to determine the cost of repairs or renovations. If you plan to do the work yourself, determine the length of time it will take to complete the repairs along with the cost of materials.

Keep in mind banks are just like any other business. Their eyes are on the bottom line. If you want a good deal on an REO foreclosed property, make a respectable offer and leave room for negotiation. More often than not, the bank will respond to your original offer with a counter-offer. You may have to submit several counter-offers to obtain the price you want. Be persistent and remember, virtually everything in a real estate transaction is negotiable.

Not every foreclosed property will be a good deal. You will probably have to sort through quite a bit of rubbish in order to find your diamond. But, it can and does happen and there’s no reason you can’t grab your slice of the real estate pie.

Author: Jeanette Joy Fisher and Robert S. Kramarz

Even if you’re counting on rising property values to eventually make a profit on an investment property, it’s far more desirable to have a positive cash flow each month. If you’re losing money on a property every month, it may not take long until your future profits will have been lost. Owning investment property is much more enjoyable if you’re making money along the way.

Here are a couple of ideas for keeping your investment property cash flow in the black:

If you don’t already own your own home, your first goal should be to live in your first “investment” property. Interest rates and down payments are considerably lower for a primary residence, and you won’t have to deal with finding and managing tenants or absorbing the cost of an occasional vacancy.

Once you begin looking for your first “official” investment property, you’ll want to concentrate your search for less expensive homes, because they’re generally easier to rent for a profit than higher cost houses. You can also purchase two or three smaller homes for about the same cost as one larger one, thus giving you an even greater cash flow.

One of the easiest ways to achieve a positive cash flow is by obtaining a loan with a very low interest rate for the first several years. One example is known as a “payment option” loan, although these types of loans may not be available in all states.

These loans allow you to set up an optional minimum payment, which can result in low monthly payments, often for the first five years. During that period, your minimum payment will increase by a small amount every year, although it’s usually no more than a factor of 1.075. During the minimum payment period, your interest will still continue to accrue at whatever rate you’ve agreed on (such as 4.5%), but the interest that your payments don’t cover will be deferred. At the end of the first five years, that deferred interest is then added on to the loan, and the loan becomes a standard variable rate loan. Normally, that’s not a problem, however, because the property’s value probably will have increased enough to cover the deferred interest.

Another way to minimize monthly interest payments is through an interest-only loan. The period of most such loans is usually 5-10 years, during which time, you’ll be paying only the interest on the loan. To make this type of loan work most effectively, it’s best to sell or refinance the property by the end of loan period.

There are many other ways to realize a positive cash flow on your investment properties, depending upon the financing options available in your area of the country. But regardless of where you live, it’s always desirable to have your investment properties pay for themselves, and can move you a long way toward your goal of financial success as a real estate investor.