Friday, March 30, 2012
FACT FRIDAY!!!
Top three ways to get sued in Real Estate
Thursday, March 29, 2012
DO IT YOURSELF THURSDAY!!!
How to Help Control
Mold and Mildew in Your Home
http://www.youtube.com/watch?
Wednesday, March 28, 2012
WHAT YOU NEED TO KNOW WEDNESDAYS!!!
Tuesday, March 27, 2012
TIP OF THE DAY TUESDAYS!!
Real Estate Tips:
Buying & Selling : How to Buy a Home For Sale By Owner
Monday, March 26, 2012
Main Question of The Day MONDAY!
What is Your Exit Strategy?
I know a fireman who once told me that it's not safe to enter a burning building without first knowing where all the exits are. It seems like common sense to me. Does it to you?
The same thinking applies to the real estate business. Before you buy any property, you must first decide on your exit strategy. In fact, you should decide on your exit strategy before you make your offer. It should drive your offer.
In other words, when you know what you will do with the property, it will help you determine the offer(s) you should make and the financing source (if any) you should use.
This exit strategy would also require short-term financing. I say short term because you'll be in and out of the deal in less than six months. Good sources for this type of financing would be:
· Hard money
· A partner who wants to split the profit
· A private lender who's okay with a short-term loan
· Your credit
· Your home equity, or
· Your own cash
Remember this about your credit, home equity, and cash. Never tie it up for more than six months. If you do, you limit your ability to move quickly. You reduce your liquidity.
Your exit strategy determines where you'll buy
Here's another consideration when you choose to retail the house. It must be in a neighborhood where "A" credit buyers are buying! If it's in a neighborhood where "A" buyers are not buying--retailing is not a viable exit strategy.
It's the "A" buyer that's got "A" credit and can get the new, high loan-to-value financing that will cash you out. That's the essence of retailing--cashing out. If the house is in a neighborhood where "A" buyers are not buying, then you need to choose another exit strategy.
How will you know? Ask a Realtor. Another clue is if there's an absolute absence of Realtor signs in front yards, but there are F.S.B.O. signs. Realtors generally don't list houses that aren't going to sell to "A" buyers because in order for them to get paid, the buyer needs to cash the seller out.
Lease options can be sweet!
Or suppose your exit strategy is to sell it on lease option. This will require you to line up long-term financing going in. If the seller is willing to "be the bank" and hold a note, and it's obviously very desirable that they do, then you might be willing to pay a little more for the house.
In fact, if the seller is willing to carry back zero interest financing, you might be willing to pay a good bit more for the property. This is my favorite way to buy--bar none. (As an aside, a great ad to attract this type of seller goes something like this: "I'll pay your price if you'll sell on my terms." It works! Try it.)
When your exit strategy is "buy and hold"
If your exit strategy is not to exit, but rather to rent the house and hold it long term, that's fine too. But here are a couple of considerations. One, your financing needs to be long term. My humble opinion is that private lenders with a long-term time horizon are far better than going to the bank.No matter what the current rates are, a private lender is always better for limiting liability, flexibility of terms, and helping people in general.
Did you know that when you borrow a private lender's money, you are helping that person. You are providing them with an investment vehicle that is probably not available to them otherwise and presumably at a rate higher than they can earn anywhere else. It's true.
And if you're like me and make helping people a priority in life, then there's one more reason to use private lenders.
In this scenario, no balloon payment is most desirable. Balloon payments seem okay going in, but when they pop, and you're forced to refinance or sell, it adds stress to your life that you really don't need. So go for no balloon or a LONG term balloon (like 7 - 15 years) if at all.
One last thing about renting property...
Decide to use a professional property manager from the "get go." Managing them yourself is the fastest way to being miserable that I know, and I do know.
Oh, and if you think a property manager will cost you money, then you don't get it. You need to rethink the benefits. If you think that a property manager will cost you money, then you probably also think an accountant will cost you money. DUH!
So know your exit strategy before you even make the offer and be sure it's a viable one. Then line up the financing that the exit strategy requires, then do the deal!
For any questions, please comment below. For investment services, leave a message at 314-246-9484 or you can email at dhibb99@gmail.com
Friday, March 23, 2012
FACT FRIDAY!!!
Protect Yourself from Real Estate Scams 10 tips
1. Join your REIA and ask your leaders. Your local real estate investment group should have resources where you can ask for advice when something seems "fishy" or "too good to be true."
2. Ask for I.D. When you are dealing with a seller whom you've never met, and the home is vacant, ask for the seller's I.D. Some scammers pretend to own vacant houses and trade deeds for money.
3. Always place your deposit in your closing agent's escrow account. That says it all. If the deal goes sour, you're not chasing your money.
4. Your own attorney reviews all deals. Make sure your own attorney or closing agent represents you in every transaction.
5.Check city liens. Always visit the local governmental agencies to find out about pending liens that may not show up on the title search. This can save you thousands. Ask us how we know.
6Title Insurance--even for flips. If your name goes into the "chain of title," purchase title insurance. You only need one deal to go sour to pay for a lifetime of title insurance policies.
7.Run your own comps and drive by the comps given you. Obtain comparable sales reports from your own sources when you are not sure of the area's value. Drive by each comp to make sure you are making a wise investment.
8.Stay in control of your deal. Don"t be intimidated by your seller. Protect yourself and stand up for your rights in the contract.
9.Use your own mortgage brokers or money sources. Make these contacts before your first deal, so you are not pushed into using a money source you don't know. Rushing to get financing can be costly.
10.Contingencies can protect. If you feel uneasy about the transaction, be sure to use a contingency in the contract. A contingency is a clause that binds the seller, but gives the buyer the right to cancel within a certain period of time.
Hope we didn't scare you too much. We practice these tips each time we do a deal, and we've learned many of these tips the hard way. Hopefully you won"t have to. This is a great business and we love it.
Bonus Tip #11: When you do make an honest contact, don't lose it. Build on it and grow from there.
For any questions, please comment below. For investment services, leave a message at 314-246-9484 or you can email at dhibb99@gmail.com
Thursday, March 22, 2012
Tip of the Day Thursday!
How to Stage Your Home for Sale
http://www.youtube.com/watch?v=ec7QCZAxidY&feature=youtube_gdata_player
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Wednesday, March 21, 2012
What you Need To Know Wednesday!
What you need to know about Property Disclosures
When you sell a property, certain disclosures are mandated by state and federal law. Do you know what they are? Are there other disclosures that are recommended--even if not required? Let's address those issues.
Federal disclosures
Federal law requires disclosure of lead-based paint hazards on any property built before 1978. This is generally done on an EPA-approved form and the buyer is given a copy of the pamphlet, "Protect Your Family from Lead in Your Home," available at the EPA's website.
The law requires that you give your buyers a 10-day opportunity to test the house for lead.
State disclosures
Every state has different required disclosures, so it is best to research your own state's law. A good place to start is www.findlaw.com. Common disclosures include radon, mold, asbestos, meth labs, whether the property is in a flood zone, and other health and safety issues.
States like
Realtor disclosures
Typically, your real estate broker will ask you to fill out a 4-page property disclosure to give to the buyer. In most states, this is not a mandatory disclosure, rather a disclosure that the buyer demands in the purchase contract. I would recommend you fill it out either way, answering as truthfully as possible.
Common law disclosures
The common law rule is that you are required to disclose any known "latent" defects. That is, you must disclose anything that you know about that is not easily discoverable by a visual inspection of the property.
For example, if you opened up a wall to fix a mold problem and then sealed it up with new dry wall, there's no way for the buyer to know this. Such an issue should be disclosed to your buyer.
"As-Is"
Sellers commonly mistake the "as-is" clause in the contract as a substitute for full disclosure. It is not.Even if you are selling the property "as-is," you must comply with state, federal, and common law disclosures. Failure to do so could result in a lawsuit for monetary damages or rescission of the contract.
The bottom line is that disclosure is the name of the game. When in doubt, tell the truth, tell what you know or have reason to know. You will avoid many problems down the road.
For any questions, please comment below. For investment services, leave a message at 314-246-9484 or you can email at dhibb99@gmail.com
Tuesday, March 20, 2012
Tip of the Day Tuesday!
Tips on Getting Your House Ready for Sale -Pittsburgh Real Estate Market
GO TO
http://www.youtube.com/watch?v=1QW2iPL2wxs&feature=youtube_gdata_player
Monday, March 19, 2012
MAIN QUESTION OF THE DAY MONDAY
Real Estate Ethics
I think investors as a whole have a bad reputation. People think of us as sharks, piranhas, and vultures. They think we thrive on taking advantage of people in distress to better ourselves.
I don't believe that is true. I see investors as a group of folks who help people out of stressful situations. The people we help have gotten themselves into their situation, and we are there to offer a solution. I truly believe we help the public by offering a wonderful service.
We have to work together as a team to keep our industry on the up and up. When you hear about an investor who cuts people out of deals, tell everyone you know.
Let me ask you a question: If you attempted to make a deal with someone who at the last minute cut you out of the deal and you lost money, would you have wanted to know in advance that this person was unethical? I am certain the answer is yes. That is why we have to watch each other's back.
How it's supposed to work
Here is how it is supposed to work: Let's say you have a property you are trying to wholesale. Your plan is to call every investor you know to do a drive-by. You know many of these investors are also sending their people by the property as well.
If you put a sign in the yard, the investors who were sent by others can call you directly. If they do, you should ask them how they heard about the property. If you know they were sent by another investor, tell them they have to call the investor who sent them. Don't cut the investor out of the deal. This person is trying to make a living and is trying to sell YOUR property. Why would you try to steal a client that does not belong to you?
Let's put the shoe on the other foot. Let's say I send you to a property that is not mine but is a very good deal. You arrive and see a sign in the yard. You would have had no other way to know this property existed. You decide to call the person directly and cut me out to possibly save a thousand dollars. Why would you do that?
But what happens sometimes
Last month we sent someone past a property. They loved it and did some research to find the owner. They then called the owner directly and cut us out. We were livid when we found out and banned the person was banned from the REIA group. We did receive poetic justice, the deal fell apart at the last minute and didn't close. Not only did they lose the deal, they now have a VERY bad reputation and will lose many more deals because of greed.
Every property we place on our wholesale list has no sign in the yard. If you send a client past one of our properties you can rest assured that if they like it you can sell it to them and earn your fee. I encourage all investors to do the same. Many times other folks sell our properties for us. Why would we want to cut them out of the deal?
Let's watch out for each other
If another investor gives you a referral, remember to pay for it. Many times people call us with a property address that they don't know how what to do with and we make it a deal. We always pay them for the referral.
Folks, we have to watch each other's back and hope that others do the same. If you are uncertain about doing business with a new person, take a minute to call your local real estate club and see if they are willing to share with you what they know about the person. Trust me, word gets around fast when you do the wrong thing.
Friday, March 16, 2012
Fact Friday!!!
Fact: Well, let's see what a Supreme Court Justice had to say about that. Justice Learned Hand said, "There is nothing sinister in arranging one's affairs so as to keep taxes as low as possible.
Everybody does so, rich and poor, and all do right. Nobody owes any public duty to pay more than the law demands."
Fear #2: How come no one else I know is doing this? It must not be right.
Fact: The rich think differently about money and about taxes. We teach
the uncommon wisdom that the rich use to legally, ethically and
morally reduce taxes. If you haven't heard about this, it is likely
because the people you have talked with don't know these tax secrets.
Fear #3: The IRS will take everything I own and put me in jail.
Fact: We teach the way to correctly take deductions, so you are
protected in case of audit. If the IRS were to select you for audit,
the IRS would want to see that you had proper documentation. We teach that audit defense.
Fear #4: The IRS will audit me if I change the way I do my return.
Fact: The IRS does not flag your return for audit simply because you
change the amount of your income, deductions, or business structures.
The most common reasons for an IRS audit are:
Mistakes made in math on the return
Amounts reported do not agree to W-2s, 1099s, and 1098s reported to the government by others
The return was not signed
Schedules were not correctly completed
Fear #5: The IRS is everywhere and knows everything. They are to be feared.
Fact: The IRS audit rate is continuing to decline. When the average return is audited, most items can be handled entirely through the mail or fax. And, in all cases, you can appoint an IRS representative to handle all of the issues. The IRS will aggressively pursue taxpayers who fall in the following categories. If you want to minimize your IRS
audit risk, don't do these things:
Form illegal "targeted" business structures such as "pure" or
"constitutional" trusts
Fail to pay payroll taxes
Protest taxes. If you legally comply with tax law, the IRS may call you into an audit, but you have nothing to fear
Fear #6: It's too complicated to keep good records. I could never figure it out!
Fact: We provide the education and tools you need to know to
legitimately claim and keep tax deductions. And remember, you can hire
experts such as bookkeepers with your before tax dollars to help you
keep the records you need.
Fear #7: Getting a tax education is expensive.
Fact: Education isn't expensive--it's not knowing that is expensive.
Plus, the money you spend for educational products and seminars is tax
deductible.
Fear #8: Taxes are way too complicated for me.
Fact: You can create a powerful team of tax advisers who take care of
the details, so you can concentrate on what you do best.
Fear #9: I can't find anyone to trust.
Fact: First, determine what it is you need to feel trust. Sometimes
feeling a lack of trust is a good indication of your instinct, and
sometimes a feeling of lack of trust in others is because you don't
trust yourself. Figure out what is wrong and fix it. Don't let fear
stop you from you having all you deserve.
Fear #10: I'd rather pay more and not be audited.
Fact: The amount of tax you pay has nothing to do with your likelihood
of being audited. The idea that it does is more wishful thinking . . .
and is just plain flat wrong!
For any questions, please comment below. For investment services, leave a message at 314-246-9484 or you can email at dhibb99@gmail.com
Thursday, March 15, 2012
Do it Yourself Thursday!!!
Hey everyone!
Ever wanted to learn how to paint the exterior of your home?
Learn from Lowes!!!
Tune in!
http://www.youtube.com/watch?
Wednesday, March 14, 2012
What You Need To Know Wednesday!!
How to prepare for the Comeback of Real Estate!!
This last year has been a tough year for real estate investors looking
for ways to cash flow their properties. I've talked to a lot of
business owners or employees who have not yet invested in real estate
and wonder if they've missed out on the real estate rocket. And,
everyone wants to know, "What is the next big thing?" And here is my
radical response: I don't care.
You see, if you have trained yourself to see deals everywhere, know
how to create value where none existed, and have the ability to use
general wealth-building and tax-reduction strategies in
everything--well, if you have those things, you don't need to worry
about what the next big thing is going to be. You can create it.
1. Higher credit score = Lower interest rate
Did you realize that just one little item on your credit score can
bring your credit score down 100 or more points? And that might be
enough to raise your credit score by a point or more.
On an average priced home of $250,000, you could end up paying $61,000
more over the course of a loan. In fact, fix that one little item and
you suddenly have $200 or more each and every month in cash flow on
your property.
New laws make it easier than ever to buy and sell real estate through
your pension plan. Did you know that your IRA--or better yet, your
ROTH IRA--can borrow money with an up to 70% loan-to-value?
Consider setting up a RE IRA LLC. This special LLC is manager-managed with you personally acting as a manager. Your pension is the member of the plan. The LLC then writes the checks and makes the deposits. You won't need to run everything through an absentee administrator.
There was a lot of information contained in that last paragraph. It's
all possible, and won't tell you how to go through each step of this
plan that lets you make money and never pay taxes if you have a ROTH
IRA or delay taxes if you use a regular pension plan. Free up the
money in your pension plan and start making some real money with real estate.
3. New tax loophole: Production deduction
No one is talking about this amazing gift that Congress has given
business owners and real estate investors. If you are a
"manufacturer", and the definition is pretty broad, you get a 3%
deduction this year, and it won't cost you a dime. Of course, 3% isn't
a huge number, but it's free!
The definition of manufacturer includes pretty much any company that
takes something and changes it to resell or rent. That means if you
rehab a house, you're a manufacturer and get this new tax loophole. If
your business is involved in construction or engineering, you're
qualify and get the special benefit.
So many ways to accomplish your goals this year in Real Estate!! What
are you going to do?
For any questions, please comment below. For investment services, leave a message at 314-246-9484 or you can email at dhibb99@gmail.com