Real Estate Investing Facts

How to stop Foreclosure assistance is available along with foreclosure training, if you are having difficulty in paying your property taxes do to financial problems. The government will likely place a tax lien on your property if you cannot resolve the problem. The next step that might happen is you are included on a tax foreclosure list.  You need to know how to stop foreclosure proceedings. Avoiding tax foreclosure is possible.

Before you lose your home and it becomes a tax foreclosure case, there are ways that you can resort to Avoid Foreclosure, among which are:

* Ask for more time in the paying of your taxes – This is a simple procedure you can use and often the local authorities are lenient in allowing you extra time when you make this plea with a payment plan you can propose which will be agreeable to them.

* The partial payment of taxes is an option that is allowed in some states. Different counties too have different procedures in dealing with the tax difficulties of their people and the citizens just have to request for these methods from the concerned officials.

* You can request for an Offer in Compromise (OIC) from the concerned authorities to settle your total tax dues at a lower amount. Note however that the lien on your property continues in spite of the OIC, and it is only when the OIC is accepted by the authorities and you have paid it in full, when the lien can then be removed.

* Organizations file for “Bankruptcy” to avoid losing their property to tax foreclosures. They request the bankruptcy court to reduce the amount in taxes that they have to pay or if they are lucky, even to have all taxes erased. The judge in a bankruptcy court decides the bankruptcy filing depending on how it is applied for. A bankruptcy relief however could be temporary in nature with limited benefits.

* A tax attorney’s help is important because he can effectively guide you in avoiding any impending tax liens as this is his field of expertise. He can also help you in negotiating with the tax department for more time in settling your tax obligations. You may also request for a tax reassessment if the tax attorney advises it. He could also be in a position to seek temporary relief on your property going into the tax foreclosures list.

Always be aware of the governmental guidelines regarding the payments of taxes and other dues so you can avoid tax problems. Try your best to pay taxes on time too. When you find yourself buying a new property, check out first any tax-related issues connected with the property you are intending to acquire.

Try to negotiate with the appropriate government authorities honestly when you cannot help having this problem. Try to avoid impending tax foreclosure if at all possible. Take action when you first start to fall behind on tour taxes, do not wait until it is to late.

Hans Anderson

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There are three strategies you need to learn to be effective and profitable as a real estate investor. Here they are:

- “Traditional” Cash Purchases

- Subject-To The Existing Mortgage

- Lease-Option

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Let’s take a look at each one right now:

“Traditional” Cash Purchases

This is the one that’s the most obvious, and here’s how it works:

The Buyer and Seller agree on the price for the property. The Buyer then brings cash to the closing table and pays off the purchase price in cash.

(It’s important to understand that the Buyer may have acquired a loan to supply the cash. It doesn’t really matter – there is still cash at the closing table which pays the purchase price.) While I prefer to use creative strategies to buy real estate, the “cash option” is always great to be aware of.

After all, there will be circumstances you face in which cash is the only real option, since the seller needs to receive a large amount of cash to make the deal work.

Even if you do not have cash (or the credit to acquire cash), you need to be familiar with cash transactions. Why? If you find a property worth $100,000 and the seller is only asking $50,000, do you think there’s a way for you to make money on that situation even if you don’t have the money to buy the property? The answer is a strong YES!!! (We’ll talk more about this type of strategy in a coming pst…)

“Subject To The Existing Mortgage”

This is, without a doubt, one of the most powerful strategies available to real estate investors. Imagine this scenario…
You, the wise investor, find a home owner facing foreclosure. The home is worth $250,000 and the balance of the debt is $180,000, including an “arrearage” (missed payments) totaling $12,000.

The home owner knows that they can no longer afford the home, and all they want is to save their credit from a foreclosure. So they agree to let you have the house for $180,000 – the balance of the debt.

Does this really happen? Every single day.

But the question is this:

What do you do if you don’t have $180,000 to pay off the mortgage? This is clearly a great deal, and the house is in excellent condition, but what do you do if you don’t have all of the necessary cash?

The answer to that is a “Subject-To” transaction. What if there was a simple way to influence the home owner to transfer title to the property to you (which causes you to be the owner), and in exchange you’ll simply make the payments on his existing mortgage for him?

This is a clear win-win scenario. The home owner, who knows they can’t afford the home, is relieved of the monthly payment. Furthermore, they are saved from foreclosure, which is the worst thing that can happen to a person’s credit report.

And for you, it’s a huge win…simply because you now own this property, without ever having to get a mortgage or put up the whopping sum of $180,000. Instead, you’ll just make payments on the existing mortgage.

Of course, you do have to pay the $12,000 in missed payments – but it’s a lot more practical (and possible) to find that amount of money rather than $180,000. All in all, it’s a HUGE positive trade-off in your favor.

“Lease Options”

The “Lease Option” is a great (and simple) strategy that allows you to either buy or sell a piece of real estate under very favorable terms. Here’s how it works:

A “Lease” is just an agreement that gives someone (the “tenant”) the right to use a property in exchange for payment of rent to someone else (the “landlord”).

An “Option” is an agreement that gives somebody (the “buyer”) the right (but not the obligation) to buy a property from someone else (the “seller”). The agreement specifies how long the buyer has to purchase the property, along with setting the purchase price and other important terms.

(For you legal beagles, the technical term for the buyer in an option agreement is “Optionee”, and the seller is called the
“Optionor”…)

The important point is this: If you purchase a property via a properly structured Lease-Option, then you have the following rights:

- To use the property however you like (within legal reason).

- To sub-lease the property to someone else and make a profit from doing so.

- To resale the property to someone else, and keep the profit from the sale.

And all of this comes without a credit check or the need for a lot of cash.

The Lease Option provides similar benefits to the Subject-To, but there are some critical differences. In fact, there are clear rules for when to use one versus the other, and violating those rules can cause significant legal difficulty.

We’ll talk more about those rules in the coming posts, so stay tuned!

Aiden Win

Mr. Foreclosure

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When a property enters pre-foreclosure, there is usually a period of at least 2-3 months for the owner to reinstate the property by paying off the amount that is in default.

It’s important to find out if a property has been reinstated before proceeding because the reinstatement will stop the foreclosure process.

Probably the best way to find out if a property has been reinstated is to contact the attorney or trustee that is assigned to the foreclosure.

The trustee cannot and will not typically answer questions about the property; they can however let you know if the property is still in foreclosure or not.

United States Pre Foreclosures

Canadian Pre Foreclosures

Hans Anderson

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I’ve written 5 important points that you need to be aware of when getting into real estate investing.

1. Don’t confuse an appraisal with a home inspection – you need both! An appraisal determines the worth of the property by estimating the market value of the land and building. A home inspection inspects the adequacy and condition of the building and all major systems.

2. Place conditions on your offer. Conditions provide you with the flexibility of withdrawing your offer if you are unable to obtain the necessary financing, or if the inspection reveals structural problems with the property. Even with pre-approval, Investors who make an offer without conditions do so at their own risk.

3. Understand closing costs. When buying a home, it pays to be informed about closing costs, which can represent up to three per cent of the purchase price, including: land transfer tax, lawyer’s fees, appraisal fees, title insurance and home inspection fees.

4. Have a firm strategy for a bidding war. In a competitive market, it is not uncommon for vendors to hold offers off until a particular date. This means you could be bidding for a property along with several other parties. It’s easy to get caught up in the emotion of the bidding war, so know your maximum price before you bid and stick to it!

5. Don’t do it alone – explore the benefits offered by mortgage brokers. Mortgage brokers act as a one-stop shop for planning advice and the best rates

Hans

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You may think you’ve found your dream house but what we see with the naked eye can sometimes be deceptive.

This is why it’s important to have critical inspections done before anything goes to closing!

Your so-called “dream house” may be the money pit when all is said and done and inspections can save you money and prevent you from making an ill-advised investment!

Once you have a contract, it’s time to get inspections ordered and completed in a timely manner!

Canadian Foreclosures

You’re probably just like I was when I was just starting out.
Absolutely clueless as to where to begin. What kind of inspections do you need?

Based on my experiences, I’d recommended having a termite, property and roof inspection at a minimum! Other inspections may be needed depending on individual circumstances. Different inspections could be necessary based on the property condition and location. Your real estate agent can usually help arrange whatever inspections that you or the lender may require.

I own my share of investment properties and I’ve ordered a ton of different inspections! I’ve ordered termite, roof, property, pool, spa, chimney, geological, well, septic, radon, lead, asbestos and structural engineering inspections. And, in the future, I’m sure I’ll order another type of inspection that I haven’t even thought of!

Termite Vs. Property Inspections

These distinct inspections require different skills. The industries are quite dissimilar. For example,termite exterminators estimate the cost to cure Section I and II type work and usually solicit contracts for the corrective work.

Property inspection firms don’t perform corrective work.
The purposes of termite reports and property inspection reports are not compatible and should not be combined.

Termite Inspection

Most lenders require a termite clearance and most buyers want to know the house they purchase is going to be free from infestation. A termite report covers two areas of concern called “sections”.

Section I is concerned with actual termite or beetle infestation
and dry rot, caused by moisture.

Examples: Termites in joists and studs. Dry rot (spongy floor)
around the base of a toilet.

Section II concerns itself with preventive measures that could lead to Section I type condition.

Examples: Dirt or wood in contact with wooden structures of the house, allowing termites access. A slow plumbing leak that could lead to dry rot.

Property Inspection

Along with termite inspections, property inspections are commonly ordered. Property inspections differ from termite inspections in that they concern themselves with the mechanical and structural health of a property.

The inspection includes a review of all major components from the foundation to the roof, including electrical, plumbing and heating systems.

Even if the house looks in good condition, the purpose of a
property inspection report is to evaluate the hidden components most home buyers cannot properly judge.

Property inspectors typically are trained or have years of
experience in the construction related industries. They know what looks right or wrong – what looks code complying – what looks dangerous.

Having a property inspection is like taking a car to a mechanic to check before you buy. A house investment is much larger making the inspection more prudent.

Value of Being at Inspections

This is your opportunity to “check under the hood” of your new home inspections for the same day to utilize your time off. Now is the best time to find where and how to turn off the “mains” to the gas, water and electrical supply to the house in case of an emergency.

The inspector can answer questions on the items that are addressed in the report so you will better understand it.

I’ve had my share of experience at buying properties on the cheap, sometimes in less than ideal condition, requiring all kinds of inspections. I can’t tell you the number of times that inspections have saved me from buying very troubled properties. So, don’t get upset when this or that inspection is required, be thankful!

To Your Success!

Aiden Win

Mr. Foreclosure

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