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Cash Now For Your Real Estate Contract

Oct 5

Posted by admin in Real Estate

BACKGROUND AND FUNDAMENTALS

The private mortgage industry is a relatively young business with roots that can be traced directly to the emergence of seller-backed, or owner, financing. Prior to the very high interest rates of the late 70s and 80s, seller-backed financing was not a common financing option. The only loan option for most real estate buyers was through a bank or savings and loan institution. But with interest rates topping out at 22 percent, financing for real estate was either unavailable or too unattractive for most buyers. Real estate sales plummeted.

Desperate, those with real estate on the market turned to innovative, unusual ways to attract buyers. One of the quickest to catch on was seller-backed financing. The seller would \”hold paper\” on the property, allowing the buyer to pay a mortgage directly to the seller. Simple and straightforward, the financing option appealed to both the seller and the buyer because it beat the high interest rates and circumvented the unavailability of traditional financing. Often this was the only way to sell real estate in the high interest rate market.

As more and more individuals held private mortgages (called private because they are not held by banks), a need developed for the holder to be able to sell these mortgages. Thus, the private mortgage industry was born. Seller-backed financing has developed into an accepted and standard way to finance real estate. As a result, the private mortgage industry has flourished, earning a place of respect in the financial community.

The amount of private real estate paper has risen dramatically. It is conservatively estimated that over $226 billion in real estate purchases is financed through private (non-institutional) notes.

Seller financing provides many advantages to buyers and seller, but one area of concern to many sellers is liquidity. How do they get cash from the note if they need it or want it? Will they be saddled with a 15-year note or longer rather then having the cash that is needed?

In response to this need, funding sources buy paper from note holders for cash, usually at a discount off the principal balance of the note. This provides a means for the holder to receive cash now instead of having to wait out the term of the note.

The evolution of this secondary market for privately-held paper has increased the attractiveness of seller-backed financing, giving the seller a \”fall-back\” position. Some sellers turn their notes over directly after the sale; others hold the notes until the cash is actually needed. Selling property, holding a note and then selling the note for cash is the yield equivalent of selling property for cash.

TRANSACTION DETAILS

In order to obtain an accurate quote, it is necessary to have up to date information about the note. All quotes will be subject to due diligence by the note purchaser.

The first critical item of due diligence will be verifying the credit worthiness of the payer (mortgagor). The lower the credit score, likely the lower the offer.

The second critical item is a drive-by appraisal or valuation with comparisons of similar houses and neighborhoods. The note purchaser wants to be sure there is adequate value.

One of the key things many people do not realize is they do not have to sell the whole note. The note holder will always receive more money over time if they only sell part of the note. We recommend that a note holder determine the amount of cash needed. A quote can be obtained telling how many payments will be required in order for the note holder to receive the necessary cash.

There are many options available when you have a contract or note and are trying to raise a lump sum of cash: 1) sell the entire balance of the contract; 2) sell a specified number of payments; 3) sell part of each payment, while continuing to receive the balance.

Would you like to turn your real estate note into cash? Save time and money… Work with a professional. With over a decade of experience, Louise Pointer can help you avoid common mistakes. Click -> http://www.NationalFundingResources.com

Writen By : Justin McWhirter

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French Riviera – A Gold-Mine of Real Estate Opportunities

Aug 5

Posted by admin in Real Estate

If you wanted to truly holiday in style and in luxury, the South of France would be the place to go. France’s coastline along the Mediterranean is one of the world’s favourite luxury holiday destinations. It’s where the rich and the famous from all over come to party, to relax and to generally live a ‘normal’ life. And Cote d’Azur, is as beautiful as it is chic. The azure Mediterranean waters, the miles of golden beaches, dense forests and mountains, splendid architecture, gardens and museums in quaint and cosy towns and villages are a delight to behold. Now what if you could have all of this, not just during a holiday, but all year round?

Yes, it is quite possible. If you wanted to change ‘holidaying on the Riviera’ to ‘live on the Riviera’, then you can consider looking at the property for sale in the South of France. And when it comes property, like everything else on the Riviera, it’s all about class, luxury and sophistication. With properties as stunning as the locations on the Riviera, it is little surprise that the who’s who from the world over should choose to make towns like Eze, Villefranche, Beaulieu, Ferjus or Grimaud their home. And it’s not just the locations; luxury French Riviera property spans the whole spectrum – from villas to bastides, apartments to chateaux, vineyards and more. With an elitist immobilier, no property is out of bounds.

Having your own luxury property on the French Riviera presents an all new way of enjoying this magnificent location. Not only can you come, stay and leave at your will, but luxury French Riviera Property takes privacy, comfort and indulgence to a whole new level. Any property for sale in the South of France comes with the added advantages of swimming pools, tennis courts, landscaped lawns and gardens, patios with spellbinding views, and most are fully functional, ready to move in to. All of these benefits are also available should you choose to rent a luxury French villa. Luxury Property Rentals in the south of France provide all the features of a privately owned property and more. With a professional and well-placed south of France immobilier, you will have chauffeurs, housekeepers, security, luxury vehicles and charters at your beck and call, should you choose to rent a luxury villa.

It is no secret that the trick to a successful French property transaction and a memorable French luxury holiday lies in finding the perfect real estate agency to anticipate and fulfil your needs. Apart from being an enticing luxury holiday proposition, luxury French property is also an investment, and a big one at that. If you intend to get a lot more than a few days of indulgence out of your property, it is very important that you pick an agency with the kind of expertise, knowledge and personnel to help you get the maximum out of your property deal. Someone who has experience and skill in dealing with the expectations of clients like yourself will be your best bet, assuring you of splendid returns on your investment on the Riviera.

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New Career and Financial Freedom – Home Based Business Versus Real Estate Agent

Jul 21

Posted by admin in Real Estate

The Home Based Business

With the change in the economy and the high unemployment rate, many are faced with having to look at new options for work. We can no longer put our eggs in one basket and think that we can stay with the same company for years. Good bye are the days of employment security. Our security lies in ourselves and the ability to create the financial opportunity for our own financial freedom.

The home based business gives us maximum freedom and the ability to be with our families, work the hours we want and to be as creative as our own minds can take us. The home based business can also give the maximum financial freedom, too. Just think, we can spend as much time as we want working from any remote, tropical, luxury or rustic location with internet access. It’s a lifestyle change that most people can only dream of doing because they do not understand how to start a home based business. Taking the first step is always the hardest.

There are two ways of looking at this. The first way is that the economy is so bad that thousands of agents are leaving real estate to start their own home based business. Or they are working what little bit of business is there while working on and developing a business online. That is me. I have been an agent for 12 years and know that I need to diversify for my immediate financial and lifestyle need and my financial future.

So, one could say that it’s a great time to start in real estate because of the massive exodus of agents we are experiencing. RE agents can make a lot of money while being self-employed, but you need to be diligent in getting started.

The other way of looking at this is that many people believe agents make a ton of money and that it’s easy. Well, we can make a great living and hmmm it’s easy when the market is robust. Today, it’s not. If you get your license, choose a broker to work with and follow a plan to get you started like the one I outlined in my article above, then you will have a chance at building your real estate business albeit slowly. Or you can do both the home based business and your real estate at the same time.

Either way, do your due diligence, talk with agents and home based business owners and make a well-informed decision. I would be more than happy to give you pointers from my perspective if you would like it. Just email me.

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Real Estate : Key Terms Buyers and Sellers Should Know

Jul 19

Posted by admin in Real Estate

So, you’ve decided to make that leap and become a home owner rather than a renter. Or maybe it’s time to trade up that first home for something larger to accommodate your growing family. Either way, choosing the right real estate agent relationship and being knowledgeable on the key terms is crucial to successfully purchasing or selling your first home.

The first step is to understand the three types of representation offered by real estate brokers: single agent; transaction broker; and non-brokerage. The non-brokerage representation is most commonly used for owners who are selling their houses on their own (For Sale By Owner or FSBO). Occasionally, a real estate sales person may contact a seller to request permission to show the property to a potential buyer. If the seller agrees, and the buyer makes an offer that is accepted, the firm will receive a commission agreed on between the seller and the broker. Before showing the house, the seller signs a non-brokerage agreement, and it is only valid for that one particular buyer. Another use for this relationship is when the seller finds a buyer, but chooses to have a brokerage firm handle the paperwork of the sale.

Transaction broker representation is the most commonly used, and in the state of Florida, it is the presumed relationship unless otherwise requested. The sales associate offers limited representation to both the seller and/or the buyer. This is ideal for both parties because the brokerage company can list the selling property and show it as well to prospective buyers. If the brokerage firm lists and sells the house, the broker receives commission from both parties involved. Limited confidentiality mandates that the sales associate cannot disclose to the buyer the minimum amount the seller is willing to take, nor can she disclose to the seller the maximum amount the buyer is willing to offer. This ensures both parties’ best interests are protected. Basically, the brokerage firm will provide leads and information in selling or buying a home, but will not provide advice on the negotiation process to either buyer or seller.

Single agent representation is when the brokerage firm is the sole agent for either the seller or the buyer, but not both. If the single agent contract is with the seller, the brokerage firm may list the home, but not show it to prospective buyers. If contracted with the buyer, the firm may not show their single agent contracted properties for sale. In this relationship, two brokerage firms must handle the sales/purchase contract -one for the buyer and one for the seller. The firm is loyal to the party contracted with, and will assist in the negotiation process to ensure their client receives the best deal possible. This relationship may be changed at any time upon signing the consent to transition to transaction broker notice. This type of representation is the least commonly used because of the limitations imposed on all involved parties.

There are some exceptions to these relationship disclosure requirements. The most notable is at “open houses” or model home showings. As long as the sales associate does not ask for confidential information, take any contractual offers or enter into negotiations concerning the purchase of the property, then no representation relationship needs to be established.

Besides the type of representation contract, there is one more contract real estate brokers will present sellers and buyers with. Concerning sellers, there are four types of listing contracts to choose from: open listing; exclusive-agency listing; exclusive-right-of-sale listing; and net listing. The most advantageous one for the seller is the open listing which allows the property owner to list the home with multiple brokers, as well as sell the property on his own. Whoever sells the property first is entitled to the commission. If the home is sold by the owner, then no commission is necessary.

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4 Items to Focus on Selecting Real Estate Investments and Minimize Downside Risk

Jul 16

Posted by admin in Real Estate

Often investors focus on returns to the exclusion of downside risk. This propensity is highly risky and can cost you all of your capital. Why not focus on investment characteristics to limit or eliminate downside risk? This concept can with relative simplicity create investment scenarios likely to produce good returns and assure that your capital suffers only very limited risk.

Item 1: Location quality defined by the quality of tenants, the economic trends surrounding the location, the consistently high occupancy levels, and the rent value trend is perhaps the foremost step an investor can put in place. Essentially, this approach assures strong appreciation, high quality revenue, limited revenue risk, and strong liquidity for the investment. Clearly, focusing on this choice offers very appealing characteristics for investors.

Item 2: Assuring favorable financing characteristics. Invest only on more limited leverage to avoid in place debt risk. Assure that reserves are strong for capital improvements, tax requirements, insurance requirements, and contingencies. Focus on Debt Service Coverage Ratios (DSCR) that allows for significant changes in the financing environment without creating unnecessary risk. Don’t invest in projects based upon the requirement for future financing conditions that could for almost any reason turn out not to develop. Ensure that financing in place offers more than and adequate time frames to replace one set of financing with another. Don’t create potential default conditions because financing timing fails.

Item 3: Invest with principals and partners who bring the economic strength to ride the economic ups and downs successfully. By this, invest with partners who can bring additional capital, banking resources, and other financial and service support to provide resilience against operational and financial challenges of time.

Item 4: Invest in opportunities where the management and operational strength of the partners is compelling. The principals should have vast experience with the legal, operational, marketing, leasing, maintenance, resident management, financing, regulatory, and other issues that will be experienced or may potentially be experienced.

Investors should not be shy about diving very deeply into these issues to assure the investment is credible, the plan robust, the resources varied and deep, and commitment strong enough to carry the investment through. This implies asking questions and digging into the background of the principals, finding out details about the other investors capacity and experience, and insuring that the deal structure is safe can go far to protect your hard earned cash from unnecesary risk and loss.

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Three Reasons Why Real Estate is Still a Great Career

Jun 27

Posted by admin in Real Estate

Recent years have seen the sub-prime mortgage explosion, plummeting home prices, a record number of foreclosures, and agents leaving the profession in droves. And, while all of this is certainly true, it is actually good news for the agents who remain. Don’t believe it? Here are three reasons that real estate is still a great career.

The first reason a career in real estate is still a great move is that many of the speculators and questionable prospects have been flushed out of the market leaving mostly serious and qualified buyers. Almost every agent has stories of working endless hours dragging around questionable clients looking at property they could not afford.

The second reason remaining agents should be grateful they stuck with it is because of the many agents who did not. So many of the agents who have left the profession were only doing a few deals a year anyway and the net result of their leaving is that the agents who remain have a better chance of working enough deals to make a decent living. What this means for the agents who have stayed is more prospects with less competition.

Finally, as the internet has matured and become an integral part of the home shopping experience, many people predicted the end of the real estate agent but this seems far from how things have turned out. While it is true that nearly everyone begins their search for a home online, this is only the first step in a process that culminates with the buyer contacting an agent. And, because these buyers have already seen for themselves what the market looks like, they are much easier to work with.

Contrary to what you may have heard, working as a real estate agent is still a profitable, rewarding, and worthwhile career. And, not only is this so despite the current economy, but also because of it.

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Real Estate Agents – A Lesson in Reality

Jun 26

Posted by admin in Real Estate

In a bustling economy, it seemed everyone wanted to become real estate agents. Some individuals even quit their regular jobs to get into a marketplace they had an opportunity to take full advantage of.

Of course, before being able to work the business, you need to go to real estate school. Different states have different requirements but in general all you need is a high school diploma. Schools average about 40 hours of coursework and this can be broken down into perhaps a few weekends, or other schools advocated one night a week for a few months, giving students a better opportunity to understand and remember the coursework.

After school is over you are then required to take your state’s licensing exam. Once you pass you are typically recruited by every real estate agency in your town because they have access to all the new licensee names.

As you go to interview with these agencies, you are rarely told how much money it’s going to cost you to get into the business. These agencies will do and say anything to get you to work for them because of course the more people they have, the better chance they have to increase sales.

As you see dollar signs in front of your eyes, you don’t realize that you are truly working for yourself. Period. And as any independent contractor, because that’s what you are, it costs money to be in business. Typically you will need to come up with over $1,000 just to start working at most agencies. You will be charged for MLS fees, office administrative fees which include use of phone, space, etc., along with business cards, general advertising expenses, liability insurance, and a host of other possibilities.

Once you are shown to your new desk, you’re pretty much on your own. This is where you realize that what you learned in real estate school isn’t helping you much at all. Real estate school teaches you about tax stamps and deed rights, but it doesn’t teach you a thing about how to sell property. Most agencies don’t provide much on the job training and you’d better find a mentor quick before you quit.

To help you get some customers you will probably be given the opportunity to answer phones for specific periods of time. You’re probably saying you didn’t sign up for this, but in reality this is how you will get your first customers. People see for sale signs with your company name, and they call in for information. This is your chance to try to schedule an appointment with them and sell them the home.

With a little experience you might be lucky to get your own listings, meaning you are being hired by sellers to put their home on the market. Of course, you are also responsible for spending your own money to advertise the house, and you need to spend money on gas driving customers around to see all your houses for sale.

For anyone thinking about getting into real estate, be aware that there are heavy expenses associated with the business where some commission splits are very low.

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