How To Become A Savvy Real Estate Investor

If you’ve turned on the television lately, at some point you'll hear the experts praising the virtues of diversification. Real estate has long been considered a conservative, long-term strategy to growing wealth. While some seasoned real estate investors make it look easy, to be successful, beginners should follow some basic principles.

Learn all you can. Consider attending a seminar or talking with individuals who are experienced in real estate investing. Look for people in your area or search for investor information on your favorite search engine.

Before committing your cash, you should have a fundamental understanding of real estate. For example, be aware that, in general, investment properties are not liquid investments. Barring exceptional circumstances, real estate does not sell at a moment's notice. It could take days or months to sell a property, depending on the strength of your local market conditions.

Consider your financial goals. It is possible to make a lot of money. However, you need to determine how hard you are going to work to do it, and how long you intend to keep each property. With each investment unit, you'll need to take into account cash flow, appreciation, equity, and depreciation. Talk with your accountant about tax liabilities and benefits.

Consider cash flow. You'll need to have enough capital on hand to cover any short-term losses due to vacancies between tenants, repairs, property management, taxes, mortgage, etc.

Start small. Look into buying a single family home or a duplex. Leave large apartment buildings and commercial properties to the professionals.

Inquire at your local Chamber of Commerce about companies relocating into or out of the area. Company movement is one indicator of demand for rental and/or office space.

Find a property that will be in demand when you are ready to resell. Look for a moderately priced home on a quiet street with three or four bedrooms, two bathrooms, and a garage.

Research the property. The most common way first-time investors lose is by failing to investigate a property thoroughly. Look beyond the front door. Investigate the reputation of the school district, the crime rate, and plans for expanding a nearby highway or developing vacant land. Check out Ask a local real estate professional about the area, its history, and how fast (or slowly) properties are moving. Find out the tenant demand in that market.

Inspect the home you're considering for signs of water damage, such as stains on the ceiling and crinkling or gathering wallpaper; open and close every door and window; and check all electrical sockets by plugging in an appliance. Get an independent home inspection, roof inspection and termite inspection. Unexpected repair costs can eat away resale profit. Because even the best inspection can't always predict problems, try to set aside some of the rental income for unexpected repairs.

Spend time driving the streets of the community noting the condition of other properties. Are lawns maintained? Are roofs in good shape? Are homes kept up?

Be ready to make fixes quickly and respond to the renter's needs. If you're not prepared to be a hands-on landlord, consider hiring a property management firm.

Find a real estate professional who has experience in investment properties in your market. They can pass on valuable information about rental prices in your market and the sale prices of other rental properties in the community.

Remember, investing in a property is much different than living in one, and while emotion and attachment can be prime motivators when it comes to homes, it is return on investment that counts when investing in real estate.

What You Need to Know About Your Real Estate Rental

Often a rental agreement is called a lease, especially if your renting real estate or immovable property such as building. You may rent real estate to park vehicle(s), storage, office/business space, agricultural, institutional, or government use, and of course housing. Basically the rental agreement will state who, what, when, and how much.

As the tenant or lessee, you may be required to state who will be living with you, whether its a roomate, family, or others. Also, the rental agreement will have the landlord's or lessor's policy on pets. Your rental agreement will have the landlords policy on when the landlord may enter your home, usually for emergency purposes. As the renter you are in possesion of the property and If the landlord enters your home without proper notice or authority, he will be violating your rights and he would be trespassing.

Rented real property or real estate may include all or part of almost any piece of real property including land. Sometimes the rental agreement will include access to certain pools, bathrooms, laundry rooms, off-set parking, and other things if the premise is split up. If access to rooms is outlined they will define the times you are allowed to use them.

Did you know when you rent a room at a hotel for a night your signing a rental agreement? Chances are you`ve already signed one then, but sorry to dis-appoint you but long-term rental agreements are usually more in depth. Rental agreements could specify that your staying just days, weeks, months, or years. Typically a rental agreement is month to month or annually and usually the rent for annual leases are cheaper because you exclude the month to month turn-over costs. The downside of having a long-term lease is if you decide to leave early, usually you are charged with penalties. The good news is though the rental agreement can specify to automatically renew your lease so a month to month lease may be your best option.

If a tenant is unable to pay or does not follow policy, then landlord may ask you to "quit" (legal term for leave) the premises at your own will, and if the tenant refuses to do so, the landlord then will 99.9% of the time proceed to serve an eviction notice on you. In many states it is illegal for the landlord to change locks on doors, or remove any personal belongings, and extremely illegal to forcibly eject a person, without a court order of eviction. If the landlord violates any of the above contact your lawyer, you are entitled to compensation for "triple damages", plus expenses from your attorneys' fees. The landlord then could face stiff criminal penalties if you decided to press charges.

Finally your rental agreement will state how much you will be paying and on what bases, month to month, annually, aslong as you want, or even in advance. A typical "down payment" will consist of how much the first and last months rent would be and a security deposit. If you do not return your property in ordinary "wear n' tear" condition, the landlord can with-hold your security deposit to pay for the damages. If a security deposit is required, some states will require the landlord to give you the bank account number and the banks name of where your security deposit is being held. Some states also require the landlord to list pre-existing damages to the property, or the state will force them to give back the security deposit.

Why A Team For Real Estate Investment?

I had a hard time at first with real estate investment. One of the reasons was that I tended to be a "lone wolf," trying to do too much myself. I've since learned that to really do well investing in real estate, you need to have a team of people you can trust and rely on. Here are some possible team members, and what they need to be on the team.

1. Real estate agent. A licensed agent with experience in the area you invest in and access to the MLS (Multiple Listing Service), can be a great help. If she is a seller's agent, she can still ethically bring the best deals to you once she knows you're a serious buyer.

2. Real estate attorney. This should be someone familiar with the laws and legal customs of your area, and have experience with the type of deals you intend to do (If you are buying rentals, she should be familiar with doing evictions, for example.)

3. Accountant or bookkeeper. Keeping proper books for real estate investments is getting more complicated with all the tax-law changes. Find someone that understands the law, and what you want.

4. Mortgage broker or banker. The first can offer many options, but the second can make the loan decision. Each has their advantages, and you could use both. In either case it's important that they understand what you want (fast closings, lower interest, corporate loans?)

5. Appraiser. Not only can a good appraiser give you an accurate valuation of a property, but they should be able to suggest ways in which you can raise the value of a property. Use someone that will talk to you.

6. Inspector. In some areas it is easy to become an inspector with little experience. It's best if you use one that is or used to be a contractor, so he can find the problems AND give you some idea of the cost of repairs.

7. Insurance agent. A good one will understand what you want, and find ways to save you money. Insure all your properties with one agent, and you're likely to have discounts available, and better service.

8. Escrow officer. They will usually be with a closing company. Look for someone that's efficient, and can explain things clearly to both sides. If he is confused by a slightly creative contract, he should educate easily or be replaced.

9. Cleaning person. Having a trusted person or crew ready means a fast turn around when you buy a rental or rehab project.

10. Property manager. Be sure that the company you hire has exerience, is responsive, and will have time when you call. A good property manager can tell you BEFORE you buy, what you should get for rent in a given area.

How To Figure Real Estate Value

What is real estate value? It isn't what you have into your house. It isn't what you feel it is worth. It is what the market will pay. How do you figure out what the market will pay? For single family homes, the best way is by seeing what similar homes have sold for.

Figuring replacement cost isn't very useful. It's difficult to say what land is worth in a city center where none is left for sale, for example, and tough to gauge depreciation of the home itself. Valuation from replacement cost is used as a secondary method, and for unique homes that can't be compared easily with others. However, the primary method of real estate appraisal used for homes is a market analysis using comparable sales.

Real Estate Value 101

First find at least three similar homes in the same area that have sold within the last year, and preferably within the last six months. You can find this information is in county records (sometimes online now), or from a real estate agent with access to the multiple listing service. Make sure you have the basic sales information: sales price, terms of sale, description of the property, etc.

Here is how you use this information to find real estate value. Write down the selling price of your first comparable. Review the description item by item, adding to the sales price of the comparable for each thing it doesn't have that your subject home has, and subtracting for each thing it has that your subject home doesn't have.

This sounds confusing, but it will make sense once you try it a couple times. For example, if your subject home has a second bathroom, and the a comparable doesn't, you add the value of the bathroom to the sales price of the comparable. If a comparable home has a blacktop driveway, and the subject home doesn't, you take the value away.

What you are doing is rectifying differences, to see what the comparable home WOULD have sold for if it was just like yours. Suppose a comparable sold for $140,000, with one less bathroom than your subject home, and a bathroom is worth $15,000 in your area (ask a real estate agent for help with these figures). You ADD $15,000 for the bathroom it doesn't have. You subtract, say $4,000, for the paved driveway it does have, that your home doesn't have. $140,000 plus $15,000, minus $4,000 gives you a comparable sales price of $151,000.

Do this with all differences between the subject home and each comparable. Once done, average the three comparable prices. If, for example, the three comparables now have adjusted sales prices of $151,000, 162,000, and 149,000, add the three figures and divide by three. The indicated value of the home is $154,000.

All appraisal is an inexact science. You might only find comparables sold over a year ago, and have to estimate appreciation in the area. If a comparable sold with seller financing, you have to decide how much this affected the price. Still, for all of it's flaws, for single family homes this is the most accurate method for finding true real estate value.

Mortgage vs. Real Estate Lead Generation

It is fairly common for real estate companies and mortgage brokers to use leads. There is a difference between mortgage lead generation and real estate generation. Mortgage lead generation deals with people who need to refinance their homes or apply for loans, while real estate lead generation is a service that connects potential buyers with real estate agents.

Mortgage leads are generated in a number of different ways. One way to create the leads is for the lender, that is the mortgage broker, to appear in a paper or online directory. This lets potential customers make the first contact. The lenders give information about themselves, like the interest rates they charge and types of lending programs they offer, along with their contact information. This allows potential borrowers to search out the lender that is best for them.

Real Estate lead generation is somewhat different. It involves connecting prospective buyers to real estate agents. It is usually a good idea to use a real estate lead generation service that uses only inbound leads, meaning that the buyer contacts the lead generator looking for a real estate agent. This way, the lead generator can get the most information possible from the buyer in order to find the most appropriate real estate agent. Many lead generation services use tricks to lure prospective buyers.

Mortgage lead generation helps lenders and borrowers find each other. This service benefits everyone involved. Some of the most successful businesses on the Internet are lead generation agencies.

Four Great Reasons To Invest In Real Estate

Why is Real Estate such a great investment? It’s because of the flexibility of it four potential benefits.
Think about this, how many investments are out there that give you the potential of monthly cash flow, having your investment paid by for by somebody else, gives you tax savings and benefits if you qualify and has the potential of increasing in value?Well if you think about it, there are not very many. That’s why so many people who have achieved wealth have done it in real estate.

The best thing about investing in real estate is that you can choose what you buy and the way you buy it. What I mean by this is you pick the type of property, the location, the condition and you determine the price that you are willing to pay. How great is that?If you want more cash flow, you could buy more units or arrange the financing so that the rental real estate produces more cash flow.

If you want to get the property paid for quicker you could use any excess cash flow and apply it to the loans.

If you want to reduce your taxes, you can use a benefit called depreciation to offset your income.

If you want big chunks of cash you could focus on appreciation. You could buy undervalued properties and sell them for a higher value or you could buy properties, fix them up and sell them for a higher price.

It’s amazing how many ways you can make money by investing in real estate when you understand the four benefits. The key is to make sure that you have set up a way to measure your results and to see if you are maximizing the benefits that you want.

You can measure your results by using a Excel spreadsheet. Make it easy to understand and easy to use and you’ll be amazed how fast you can see what benefits the real estate is providing you. You should use a tool like this before you buy, during your ownership and when you considering selling. I’ve created a simple one called the real estate analyzer that is available at http://landlordtools.com/landlord-software.htm. By either creating your own spreadsheet or using one that is already made, you will now become an investor that understand how to make any real estate investment work for you.

Real Estate Negotiation - Three Techniques

The following are some simple real estate negotiation techniques to try the next time you buy a home or investment property.

Using The Power Of Expertise

I was looking at a house once with an agent who knew building codes and construction costs. He had suggestions for converting the basement into livable space. He knew what size windows would make it legal, and how much it would cost. He had other good suggestions. In fact, he was so helpful with his expertise that it was easy to forget that his job was to sell the place to me at the highest price he could get.

That is the power of expertise. To use it when you are buying a house, have expert opinions ready. For example, if you might get the realtor to show the seller the official statistics for "days on the market" for listed homes, so he'll feel motivated to sell. Carry an expert's magazine article on the costs of maintaining old houses when you go to look at that Victorian home. If you know about roofing, point out any flaws to a seller.

Use Time And Other Investments

Money is not the only investment people make. Time, effort, and reputation are some of the other things that are invested in a negotiation. Nobody likes to lose what they invest, and using that fact gives you power - if you use it.

For example, if you are hoping to get a major price reduction, spend an hour or two talking to the seller. Only then should you make your low offer. He's less likely to walk away than if you made the offer five minutes after you got there.

The sellers decide what they want to invest into a negotiation, whether it is time, trouble, money, or whatever. You decide when to reveal your needs, demands or requests. If you can, wait until they have made some investment.

Real Estate Negotiation By Not Caring

Generally, he (or he) who cares least has the most power in a negotiation. I was once selling a piece of land, and the buyer drove a long way to meet with me. One of the first things she said was, "The price seems kind of high. Why are you asking so much?" I honestly answered, "I guess because it's such a beautiful property that I really don't care if I sell it or not." She paid full price.

The appearance of not being too concerned or anxious will help a lot. The most power, however, is in truly not needing to worry about the deal too much. To that end, try to line up other options beforehand. You may even want to mention these options during the negotiations. "You have a beautiful home, but the other three we are looking at are selling for a little less, so I'm not sure..."

Of course, a seller might mention that there are others coming to look at the place the next day. He might act unconcerned about selling, as I did in the example above. All of these real estate negotiation techniques are useful for buying AND selling. As a buyer, keep this in mind, so you know when they are being used by the seller. The lack of concern may be real, or it may just be a ploy.

Home equity loan

There are a number of different loan products available today, and the one that you select will depend upon your circumstance and budget as well as on the amount of cash that you need to borrow. If you are a homeowner and you’re looking to borrow a fairly substantial sum of money at a low rate of interest, you may find that a home equity loan will prove ideal for your needs. This type of loan can benefit you in a number of ways, and if you have the equity in your home you could get a really affordable loan.

The equity in your home is the market value of the property minus any outstanding mortgage or other loans secure upon it. The balance is the equity, and with these loans you can borrow against this equity. As property price have risen quite dramatically over recent years, many homeowners have found themselves sitting on quite a nest egg, giving them the leverage to borrow money against the property if the need arises.

A home equity loan basically allows homeowners to unlock the equity that is tied up in their property without having to sell up or move. The nature of these loans means that you can often borrow far more than you would be able to with an unsecured loan, and you can also borrow over longer periods of time, which can reduce the amount that you will pay each month. Also, because an equity loan us secured lenders can afford to offer lower interest rates, which can also help to reduce monthly repayments, enabling borrowers to take out a loan for a substantial sum at a really

Fixed Rate Home Equity Loans

A fixed rate home equity loan, sometimes called \'second mortgage\', is a borrowing against the equity of your home. Equity means the current market value of your home minus the outstanding liability. Certain percentage of that net worth is advanced as loan. This is known as Loan To Value (LTV) ratio. Disbursement of the amount sanctioned is made in one lump sum. Normally you can choose up to thirty years for amortization. The amount of monthly repayment inclusive of interest is fixed.

Lenders usually stipulate a minimum and maximum for the amount that can be sanctioned. The longer the amortization term, the interest rate will be higher though fixed. You must decide on the period for which the loan is to be taken based on your repayment capacity. The interest paid qualifies for tax deduction in most cases. The money obtained through the loan can be used for any purpose that you choose. It is prudent to utilize the funds to pay off high interest bearing advances like credit cards. If the money is spent for home improvement, your equity enhances.

Before applying for the loan it is wise to analyze the specific purposes for which the funds are required. Obtain a few quotations from different lenders and do a comparative study of the terms and conditions. Be wary of loan sharks and hidden costs. And remember that the cost of a loan is not constituted by interest alone. The chances are that there will be closing charges. Some lenders may stipulate other fees as well. A penal charge being imposed for pre-closing the loan is quite common. Those with poor credit rating may find it easier to obtain home equity loans.

There are risks involved. If repayments are not made on time, you could end up losing your house. If the house is sold before paying off the loan the money you get in hand will be limited.

Get all your doubts clarified before signing on the dotted line. Check with your financial advisor. Or you could get free consultancy from organizations approved by the U.S. Department of Housing & Urban Development (HUD).

What is a Fixed Rate Mortgage?

A fixed rate mortgage would suit someone who likes to know where they stand. A fixed rate mortgage, as suggested by the name, is a mortgage where equal repayments are made every month.

Fixed rate mortgages allow you to easily manage and plan your monthly expenditure - because the payment will be the same every month and you won't be affected by any rises in the base rate. If the interest rates rise above the fixed rate on your mortgage, you will see the real benefits of the fixed rate mortgage.

A fixed rate mortgage makes it easy to plan ahead, because as the name suggests, the interest rate on your mortgage stays fixed.

This means that as a fixed rate mortgage customer, even if the Bank of England Base Rate changes, the interest rate on your mortgage remains constant over a fixed period of time. This makes your budgeting easier, because you can plan ahead knowing exactly how much your monthly repayments will be.

The fixed rate period can be anything between six months and five years, but it's always best to refer to a financial services professional before deciding what period of fixed interest rate to choose.

The biggest advantage of a fixed rate is that irrespective of fluctuations in interest rates, your monthly repayments remain the same throughout the period of the fixed rate - usually six months to five years.

A fixed rate mortgage is suitable if your mortgage repayments take up a large proportion of your income as it protects you from rises in interest rates. However, you would not benefit from any reduction in the lenders standard variable rate.

Fixed rate mortgages generally incur a penalty if redeemed within the fixed rate period.

The advantage of a fixed rate mortgage is that you know exactly how much your mortgage will cost, and for how long. If interest rates on your mortgage rise, well the fixed rate will not. Conversely, however, when mortgage rates drop, your fixed rate mortgage will not drop with them.

The key benefit of a fixed rate mortgage is that you are able to accurately budget your repayments for a set period of time. In addition, fixed rate mortgages are an excellent option, if it becomes apparent that interest rates may be rising over the coming years, as you can protect your mortgage repayments against rises by choosing a fixed rate mortgage.

Michigan Personal Injury Settlements

For an individual who has suffered physically or mentally or has been injured through the carelessness or negligence of the other party, personal injury settlements provide opportunities to recover monetary damages, secure appropriate treatment, and limit further suffering associated with the injury.

Out-of-court settlements are the most preferred means by the insurance companies since they are far less expensive than filing the litigation and going through legal proceedings.

For example, if you are involved in a small car accident, with no serious injuries, it may be in your interest to reach a settlement directly with the insurance company, since the claim adjustor will often offer fair compensation without the hassles of going to court. Also in many other cases like serious injury, the personal injury settlements are offered instantly even while the injured party is in hospital, in the hope of preventing any impending legal proceedings.

However in cases like premises liability, the out-of-court settlement might result in the insured parry getting far less compensation than what it might have received through legal proceedings. This is because the insurer in out-of-court settlements often will not calculate the value of personal injuries, which include factors such as lost wages, pain and suffering, and decreased quality of life, as well as punitive damages.

Besides offering out-of-court settlements, insurance companies sometimes prefer to wait until the case has been filed. Settlement can be reached anytime between the time of the injury and the issuing of judgment by the court.

The laws for personal injury settlement vary from state to state. For example, in Michigan, a person intending to file a medical malpractice action must first serve the written notice to the defendant 182 days before the commencement of the action. Under the Michigan law, there may be more than one cause for an accident.

Because Michigan is a comparative fault state, the jury will take into consideration the conduct of all parties who may have caused or contributed to your injuries. The jury will then assess fault amongst the various persons. In Michigan a victim of accidental injury may be entitled to recover damages, including, but not limited to, medical expenses, lost earnings, lost earning capacity, physical pain and suffering, mental anguish, physical impairment and disfigurement in the past and into the future.

Personal injury settlements offer an attractive option for the insurance companies and the injured party. Accepting an out-of-court settlement means avoiding long bouts of litigation that might drag on for years and cause further financial problems for the injured party. In case of minor settlements, the injured party can deal with the insurer directly and get the claim. However, in case if significant claims it is advised to consult an attorney before opting for an out-of-court settlement.

Six Keys to Hiring a Great Personal Injury Attorney

Choosing the right personal injury attorney is not difficult if you know the right questions to ask. You can start your search on the internet with the words "personal injury attorny" plus your location.

This will provide you several names of local attorneys plus some sites that "refer attorneys" or are otherwise paid adds. Call or email 3-5 attorneys and ask them to answer the following questions:

- How many personal injury cases have you tried in front of juries?

- What kind of experts have you hired for your clients?

- What % of your income comes from personal injury cases?

- Have you handled cases similar to my injury? How many and with what results?

- Are you willing to advance expenses of litigation?

- Are you a mamber of any attorney organizations that primarily help injury victims?

The answers to these questions should give you a good idea if the attorney is an experienced and succesful personal injury attorney.

You want an attorney who is willing to and has gone to trial. Insurance companies know who is willing to go to trial. Attorneys that have not tried jury cases are not likely to command the respect to get you a fair offer.

If the attorney is not willing to advance expenses then you will be stuck advancing them yourself and you may not be in a position to do so. If that is the case then your case will have to be settled, likely cheaply.

With the answers to these questions in hand you are ready to sit down in the attorney's office and decide, after meeting the attorney, if this is a person you can have confidence in to get you full and fair compensation for your injury.

4 Main Risks Involved In Futures Trading

There’s no doubt that futures trading is inherently a risky business. Anyone who tells you it is 100% risk free is either ignorant or trying to sell you something. The truth is futures trading is a gamble. There’s no telling when you are going to win or when you are going to lose. The best strategy is to play this game based on the cards you have and hope for the best.

Futures trading does have huge rewards if you win and that’s probably the reason many people are attracted to it. However the chances of you losing big is just as great if not greater particularly if you are new to futures trading.

I outline the 4 main risks when trading in futures. You might want to read further before deciding futures trading is suitable for you.

1. Speculative Business

Futures Trading is speculative in nature. No matter what the experts tell you or predict, it is not always 100% accurate. Take it with a pitch of salt. The best investment strategy is not to put all your eggs in one basket, divesting your investment among different financial instruments.

2. Financial Backing

Futures Trading requires a large capital outlay at the beginning which is expendable. Therefore it is definitely not for the faint of heart. If you are thinking of making money in futures trading to pay your bills, then my advise is don’t. You should not use money to pay your bills/loans/grocery to dabble in futures trading. Only use money you can afford to expend.

Ideally, a person who wants to play in futures trading should have at least $10,000 USD in his/her personal trading account.

3. Technical Knowledge

Futures Trading requires an intimate knowledge of financial instruments. At the very least, you should be knowledgeable in the 4 main investments categories namely, income, growth, speculation and inflation hedges. Without adequate knowledge, it will restrict you to where you can invest on the market and lose potential revenue on a particular sector of the financial market.

You might be thinking I can always rely on my broker for advice. While it’s good to seek the advice of someone knowledgeable, you should be able to make intelligent decisions on your own and the only way to do that is if you have sufficient knowledge.

4. Only Invest What You Can Lose

I would not advise someone new to trading to dabble in futures simply because of the risks involved.

You should have a balanced portfolio with only a certain percentage invested in futures. My advise is about 10% but that depends on your financial standing and your investment strategy. In general, only use money that you can afford to lose in futures trading.

The 4 main risks I outline above is not meant to discourage you from futures trading. What I want to make clear is you fully understand the risks involved and also what you need to do to better your chances at winning in futures trading.

United States Top Five Real Estate Investment Tips, 2006 ~ 2007

There are countless tips on real estate investing available and this is by no means intended as a comprehensive list. While every investment has its own intricacies and problems that need to be worked out, there are some very basic aspects that are common to most investment properties. Understanding those aspects and asking questions about them can help you determine whether a particular real estate investment opportunity is for you.

Anything Can Change

Building in the capacity for change in your investment is not only good real estate advice, but good life advice. Aspects of an investment can change at any given time and building in a little cushion in your profit projections for that change will most likely give you a better outlook on the possible outcome of your investment.

This is especially true for something like the tax climate of your investment as changes in tax laws happen regularly. If the tax situation surrounding your investment is the only thing you like about it, it is probably not a sound investment. Solid investments can withstand changes in the tax code, so never rely solely on the stability of tax codes, you will be sorely disappointed.

Do What You Know

It is tempting to get involved in real estate investment opportunities outside of your comfort zone. Maybe the terms look good or the area is nice, but your lack of expertise in the field will ultimately hurt you over the course of the investment. If you are well versed in multi-family homes, do your best to uncover the best investment opportunities in that field. If your bag is fixer-uppers, stick with that. Success is difficult to replicate so if you have a knack for something, exploit that knack.

Compare, Compare, Compare

As any real estate agent will tell you, valuations for a new home put on the market are a direct reflection of other sale prices of similar properties in that area. Your potential investment is the same way. If you are going to rely on rents to make back the money spent on the investment, compare the rents your prospective investment property takes in against similar properties in the area. Are they too high? If so, that may indicate future trouble filling the building at those prices, which then cuts into your profit forecast.

If you are getting involved in a fixer-upper, compare what you think the home will be like in the future to homes that have sold that look similar to that now. Doing so will help you estimate your eventual sale price and the amount of money you should invest to net a decent return.

Hammer Down True Expenses

Just as you want to examine what your incoming cash flow will be on any real estate investment opportunity, you want to investigate your outgoing cash flow as well. What are the key costs involved in running the property? What are the taxes on the property? How much does it cost you when part of your multi-family property is vacant? Sometimes properties can look great when you examine the rent payments coming in but then lose their luster when you look at the cost of running the facility. You need to investigate both sides of the story to get an accurate view of the financial future of your investment.

Know The Building

In real estate investing, surprises are usually costly. Not only should you do a full walk through of the prospective investment yourself, you should also look in to hiring an independent, professional inspector as well. Uncovering problems with the foundation, roof or furnace early can either save you from making a poor investment or give you ammunition to negotiate a lower price.

Not all real estate investments are the same and you will likely run in to a unique problem on every property you pursue. However, by sticking to the tips here, you can give yourself a great foundation from which to operate. Above all, pursue information on the property as vigorously as possible to eliminate the possibility of regretting your investment later.

Online Investing Tips

When it comes to investing, the World Wide Web has opened many doors, allowing individuals of all ages and economic statuses to participate in making their money work for them. If you are interested in investing but feel intimidated by the often confusing stock market, look to the World Wide Web. There are a variety of investment websites that allow individuals to easily invest their money in everything from money market funds to stocks to bond without a great deal of fuss and worry.

The key to online investing is to find a suitable investment firm that fits your needs and expectations. And, there are endless options of investment firms that are waiting to do business with you. However, make sure you feel happy and confident with the investment firm you have chosen before committing any funds. It pays to investigate their history and not just take their word for it.

There are different companies for specialized purposes. If you plan to buy and sell stocks, mutual funds, or bonds on a regular basis, you must find a company that will allow you unlimited trades for a few dollars each month. On the other hand, you should find a company that will not penalize you for not meeting the minimum of your monthly transactions, if you would rather wait and see before investing.

After you have decided upon the investment firm that best suits your needs, begin looking into investments that fit your expectations. There are a variety of optional mutual funds, bonds, and stocks available to suit individuals wanting a minimal risk or those wanting to risk it all on the promise of high returns.

For source of investment related tips on the Internet, you should consider joining an investment website or group. In this way you would get fresh insight and perspective of other potential investors and tips on fresh investments that were unknown to you. Joining websites that produce monthly or weekly newsletters would provide you with up to date information on every investment options.

The money that you are investing online is what you have earned after a lot of toil. Always remember this fact. Investors tend to forget this while investing online because of the transfer taking place in cyberspace. Overlooking this fact and over investing may put you in debt.

Involve the entire family with the investment process, since it is always suggested you include everyone in decisions involving money. Be sure to speak to your spouse regarding your investments and ask his or her opinions with the specific bonds, stocks, or funds you plan to purchase. Also, include your children in the investment process in order to educate the next generation about the importance of saving money.

However you choose to invest online, do so today! Online investment is a great way to begin the saving process, whether it is a long term goal like education funds or retirement, or a short term goal like a vacation fund.

Take Over Mortgage

The loan known as a take over mortgage is designed so that the conditions and terms of a loan can change hands between two borrowers. That’s to say, one borrower can transfer the mortgage to a new borrower. It’s also called an assumable loan

People buying a home can take over a seller’s mortgage when they complete the transaction. Usually, you’ll need to get the lender’s approval before doing so. When you get a take over mortgage, monthly payments and interest rates come into your hands. That’s a big plus because it means it’s possible for you to save big money, particularly so if the existing loan’s interest rate is lower than the current one on newer loans. Be aware though that lenders are able to change the terms of the loan. So be prepared if that happens.

You also inherit liability when you take over a mortgage, along with the monthly payments and interest. If you don’t make the payments, for example, the lender can foreclose. Also, if the property in question ends up selling for a lower price than the mortgage’s balance, the lender can sue you for the remaining difference.

Don’t think of a take over mortgage as a walk in the park. It’s not. You have to go through a process of pre-qualification. You also have to pay closing fees before you get one. There’s also the cost of title insurance and appraisal.

For instance, let’s say you wanted to buy your friend’s house for $95,000, and the home’s take over mortgage came to $90,000 and had an interest rate of 7 percent. You’ll only have to make a down payment of $5,000 to take over the mortgage and home. You need to factor in the closing fees as well.

Another such example would be if a friend of yours took over a mortgage 15 years ago for $80,000 and with an interest rate of 6.5 per cent. The balance left over would be $70,000. What that means is that the current worth of the property is $160,000. To get a take over mortgage, only $90,000 would be required, in addition to the price of the closing costs.

Such mortgages have been available for a long time now. Take over mortgages let the consumer have the opportunity to get a loan at a lower interest rate, which makes them quite popular.

There was an all-time rise in take over mortgages during the ‘70s and ‘80s because of the soaring interest rates. The mortgages at the time had rates of five to seven percent, but as soon as the rates went up, so did the original percentages. This forced a payout of between 10 and 15 percent in the interest tied to deposits. That’s what prodded buyers to go for take over mortgages. They simply wanted loans that had lower rates.

If you’re in the market for a take over mortgage, don’t forget the cliché about things sounding too good to be a reality. There are also benefits in take over mortgages for sellers. For one, they are likely to charge higher prices for their houses. So you may need more money to make up the difference between the balance of the take over mortgage and the asking price. But remember the fact that assuming the terms of the mortgage means you can cash out at a later point; the value of the property might well go up in time.

A Short Beginner’s Guide To Remortgages

Nearly everyone is familiar with a mortgage, as it’s a banking term for a loan granted to purchase a home. Such a loan is secured against the purchased property, so if the loan is not paid as to the agreed upon terms, the lender has the legal right to take the property as repayment. The primary difference between a traditional mortgage and a remortgage is simple- the remortgage is a new loan on the same property. Below are a few bits of information that will aid the beginner in attaining a remortgage.

First and foremost, there is not just one type of remortgage option. Each type has its own benefits as well as items that aren’t as attractive:

SVR, or Standard Variable Rate, is a remortgage that has an interest rate that rises along with the average market rate. This most common form of remortgage typically has a fixed rate of interest for the first few months of the loan to make the loan more attractive to would-be borrowers.

Fixed Rate Mortgages carry the same fixed interest rate from beginning to end of the loan’s life. Your payments on this type of loan will be the same for the entire duration of the mortgage, even if interest rates drastically rise. For those who require stability in life, this option is the better of the two, although the rate will be higher than an enticing SVR.

If neither of these seem like the right selection for you, perhaps an intermediary mortgage option is more your style. Droplock loans, capped rates and trackers are different remortgage ideas that combine the traits of both fixed rate and SVR loans.

But some might wonder why someone would remortgage their property and original loan. After all, there are attached fees and such, not to mention that the life of the loan is extended. Even though the long term affects of a remortgage can seem somewhat saddening, the immediate financial benefits can be overwhelmingly positive.

For instance, if your home is in need of repair or could use a few improvements, the funds granted from a cash out refinance not only pays off your existing mortgage, but also allows you to keep the difference in funds to do with what you wish, like make the necessary home repairs. New windows and a bit of insulation can save lots of money on home heating bills.

Other reasons for remortgaging property include a lower interest rate, which translates into lower monthly payments, and paying off credit card balances with very high interest. Whatever the personal case may be, remortgaging can save money in a variety of forms in both the long and short term.

How Can A First Time Homebuyer Compare Mortgage Costs?

the interest rate and the APR when shopping for a loan. While these are indeed very important aspects of the loan, they may not even be the most important for a first time homebuyer. Comparing the Good Faith Estimate provided by the lender can help a first time homebuyer determine if they are really giving you a good deal or if they are trying to taking you to the cleaners. This article is about how a first time homebuyer can use the Good Faith Estimate to compare lenders' costs, but remember there is a huge difference between getting the best costs and getting the best loan.

Within three days after applying for a loan, by law the lender must provide you in person or in the mail a completed Good Faith Estimate. This is a form that represents an estimate of the fees and costs of necessary items to successfully process and close your mortgage loan. These items include origination fees, discount points and other fees. The Good Faith Estimate is normally a legal sized form that is divided into six different categories. These categories are numbered 800, 900, 1000, 1100, 1200, and 1300. It will be accompanied by a Truth in Lending statement that gives you the APR on the loan as well. You should pay some attention to the Annual Percentage Rate, but keep in mind that this is a figure that is easily manipulated and makes some very bad assumptions. APR assumes zero inflation and that the value or buying power of a Dollar today will be exactly equal to the value of a Dollar even 30 years from now. More significantly, the APR calculation assumes that the mortgage will never be paid off early. This is completely unrealistic. Very few first time homebuyers (or other borrowers for that matter) last longer than 5 years without refinancing or selling. So APR is a very poor method of comparing loans. When comparing Good Faith Estimates focus on the section that relates directly to the lender.

Sections 900 through 1300 of the Good Faith estimate are the where third party charges and fees are listed. The lender has only minimal control over these. Sections 900 and 1000 are items required by the lender to be paid in advance or deposited with the lender. This section is where you set up your accounts to pay the taxes, hazard insurance and mortgage insurance and also where you pay your prepaid interest on the mortgage. Although it says 'required by the lender", these charges are specific to the loan program and not the lender. At closing, they will be the same with every lender.

Section 1100 is where the charges from the closing attorney or title company will be. These will be controlled by the closing agent and not the lender. Most of the time, this closing attorney or title company will have been chosen by your real estate agent. You may notice that these fees vary between lenders. This is because the lender is the one that prepares the Good Faith Estimate for you. The lender will estimate these charges based on what these items typically cost. The lender has no control over items in these sections so disregard comparing these when comparing lenders. However, do take note if one loan officer has significantly lower fees in these sections than others do. Some lenders may try to trick you by giving low figures for the third party fees so that their higher lender fees on their Good Faith Estimate will even out. Then when you have to pay extra money at closing, they tell you their numbers are just an estimate, and your agent requested an expensive attorney.

Section 1200 includes all the government related taxes and recording fees. Again, these should be the same regardless of the lender so there is no reason to use these as a comparison. However, if a particular loan officer is significantly wrong on these items, you may want to find out how experienced they really are.

We skipped over section 800 until now because this is the one that includes the items to really compare. These are the charges and fees that relate directly to your particular lender. This is where a first time homebuyer should really focus and review items to make comparisons. This section may include administration fees, application fees, document preparation fees, funding fees, mortgage broker fees, processing fees, underwriting fees, wire transfer fees and any other fees that a lender might be charging. These can be confusing for a first time homebuyer. The key thing you must do here is simply ask why each fee is there and get a reasonable explanation. A competent loan officer will be able to explain these to a first time homebuyer and why each one is there.

Remember, it is vital that you look at the total package and not just focus on the interest rate. Unfortunately, first time homebuyer loans can be complicated and have several moving parts. These can be altered to make one part look more attractive if necessary. A lender can make any part of the loan attractive if they feel that is what is really important to you. For example, one lender may offer a $300,000 loan a half point lower but may have $3,000 in extra fees added in the Good Faith Estimate. Because of the ridiculous assumptions required by law to be used to calculate the APR, this loan may also have a lower annual percentage rate than a loan with lower fees and higher interest rates! So as a first time homebuyer, be sure to spend some time talking over the good faith estimate with your loan officer. Ask questions. Compare the entire package together to see which is really the best deal. In that conversation, take the time to get a feeling for whether your loan officer has your best interest at heart. A good loan officer, who understands the needs of a first time homebuyer, will take the time to put the numbers on that good faith estimate and fit them into the total context of your life.