ReeHart - Blogging from the Heart

Posts Tagged ‘business;finance’

Knowing how to negotiate and close a deal is one thing. Being able to structure different types of transactions and think on your feet when in front of a seller is quite another. You need to become a transaction engineer so whatever comes your way you can handle. Here are some examples to work from and build your real estate portfolio.

1. Buying a property in pre-foreclosure involves approaching the borrower/owner and offering to buy the property outright. The borrower/owner can walk away with something to show for any equity in the property and avoid a bad mark on his or her credit history. The buyer has time to research the title and condition of the property and can realize discounts of 20-40 percent below market value.

If the loan is not reinstated by the end of the pre-foreclosure period, potential buyers can bid on the property at a public auction. Buyers often are required to pay in cash at the auction and may not have much time to research the title and condition of the property beforehand; however, a public auction often offers some of the best bargains and avoids the unpredictability of dealing directly with the borrower/owner.

2. Owner financing (also called seller financing or owner carry-back) is when the seller of a property allows the buyer to pay all or some of the purchase price over time. Typically, the transaction is set up as a private mortgage which means that the seller holds a lien on the property just like a bank. In many situations, this may be an optimum solution for both the buyer and seller.

With owner financing, sellers have the opportunity to attract a larger number of buyers, and overcome potential valuation problems, which can result in a higher sales price of their home. Buyers can obtain a mortgage when they might not qualify for one otherwise, and can achieve lower closing costs which could result in thousands of dollars in savings.

3. Investing in pre-foreclosures with short sales has never been better. With our home study real estate investing course, we take you step by step and introduce you to a creative technique called a real estate short sale. Short sales allow the real estate investor to discount the loan from the lender. You must know this technique if you want to be competitive in today’s market.

4. A lease option is just a technique that involves gaining control of a property, but not ownership. Just the right to posess a property and purchase that property at some future with terms you define today.

5. Subject to is getting the deed to a property without getting a new mortgage Instead, the seller signs over the deed to his or her home “subject to the existing financing” staying in place. The buyer in this case makes the mortgage payments on the old loan, but does not get a mortgage themselves to acquire this home.

Both of these techniques usually require little or no money down. In both of these techniques it is possible for the buyer to get money from the seller or the purchaser (or both) in the beginning of the transaction. These techniques, when used properly, can provide for huge profits. They are awesome strategies and when used hand-in-hand, are almost an unbeatable pair!

6. Retailing a property as an investor usually involves buying a junker subject or with money from hard money lender, doing the necessary repairs and selling for a profit. While this can be one of the most profitable ways to make money in the business, I don’t reccomend it for a beginner in the business. Doing a lease option on a property you aquired subject to on a pretty house is one of the easiest ways to get started.

7. Wholesaling It is simply finding a bargain property and passing it on to a bargain hunter. That bargain hunter will be an investor who will either purchase the property to resell it or purchase it to hold it for rental income. Your profit as a wholesaler should be between $5000 and $15,000 on each house. In some cases it will be higher than $15,000 and on some deals your profit may be a little lower than $5,000. Real estate investors choose to wholesale properties for a few reasons. They could be:

Quick cash, it is possible to turn a property around anywhere from 7 to 45 days and get cash in your pocket. If you need to get your hands on some cash quickly, this would be a reason to wholesale. Or, you may not need the cash immediately. You might just want to build your cash reserves. Wholesaling is a good way to do this quickly.

Too many houses - maybe you’re good at finding houses, but you find more than you need or can use at any given time. If this is the case, wholesaling is a smart move for you. You can still profit from your locating skills, even if you aren’t going to keep the property for your personal portfolio.

Flexibility - at any given time, you can determine whether you want to keep a property or sell it. This gives you flexibility as you locate and purchase properties.

Probably the most important thing that you need to remember when you decide to wholesale is, your buyer should get the majority of the profit! This is important because your buyer will be the one to purchase and rehab the property. There has to be enough room in the deal for your buyer to do this and still retain a nice amount of money for cash out and/or equity.

This does not mean that you find properties and give them away for $1,000. If you did that, you would be a bird dog, not a wholesaler. Your profit will vary depending on the house, but the better you are at locating properties and putting together offers, the greater your profit will be while still maintaining an excellent profit for your buyer.

Whether you’re starting a new business or you’re simply looking for a new bank for your current business, finding the bank that serves your business best generally isn’t as easy as simply opening an account at the bank where you do your personal banking. Businesses tend to have different needs than individuals, and the fact that a bank does well with personal banking services isn’t always an indication that they’ll be able to best fit the various needs of your new or existing business.

What to look for in a bank

When looking for a new bank for your business, there are a variety of factors that you should keep in mind. Request information on any business-specific services that the bank offers, the interest rates that they offer on certain accounts or the fees that they charge for certain services, and the availability of night deposits or online access to your business accounts. Some banks offer only some of these services, whereas others offer all of them… taking the time to investigate the offerings of several different banks will help you to determine which bank offers the best combination for you and your business.

Business services

Many banks offer services for business that are specific to the needs of those businesses. Some of these services may include specialized account statements detailing various aspects of expenses, interest, and deposits, as well as quarterly tax account preparation. Other business services offered by banks may vary from area to area and from bank to bank, and should be investigated fully before making a decision on one bank or another.

Interest rates

Interest rates on business accounts may vary from those offered on personal accounts, depending upon the type of account that you open for your business. Many business accounts may offer no interest at all, and may instead have fees associated with them… it largely depends upon the type of account and the bank at which it is opened. Investigate all of the options available to you so as to find the bank that offers your business the best account options.

Chequeing

One type of account that doesn’t differ greatly from those accounts offered to individuals is the chequeing account. While business chequeing accounts do tend to have fees associated with them (as most business accounts do), they function in much the same manner as standard chequeing; there are generally a few differences in the account statements and cheque-writing policies, however. It is important to get as much information on the fees, attributes, and policies associated with a business chequeing account as you can, so be sure to take the time to question the banks about the specifics and compare the account offerings of several different banks in order to get the most out of your business chequeing account.

Night deposits and online access

Accessibility is also a major factor that should be considered when choosing a new bank for your business. The bank that you choose should have a night deposit drop box (with a key given to you or to specific people in your business), instead of simply having to use an ATM or wait until business hours. Online account access is another major factor that should be requested… this way you can track your business expenses, account balances, and verify deposits from either your office or the privacy of your own home. Making sure that you find a bank that meets your business needs should be a top priority, so compare the offerings of several banks before you make a final decision.

Getting a cheap mortgage may seem like a daunting prospect. The process of getting a mortgage can be long, complicated and confusing, and the idea of taking on such a big financial commitment could deter you from engaging in the process with much enthusiasm. It is possible, however, to find a great deal on a cheap mortgage, without the headaches. Below is a quick guide to finding the best deal for you, with minimum stress.

Firstly, it is important to know exactly what kind of mortgage will work out to be the most cost effective for your situation. You may be interested in a repayment mortgage, where you pay back money on both the capital borrowed and the interest. Alternatively, you may wish to get an interest-only mortgage, which can free up cash for you now with lower monthly payments. Then there are interest rates; you can go for fixed or variable rates. Maybe, you are looking to let out your property once you have bought it; in this case, a buy to let mortgage is for you. You can save a great deal of time and money by making sure you understand all of these types of mortgage products before you start applying for quotes.

Cheap mortgages: search and compare

Then, it’s time to search the market for a cheap mortgage deal that suits you. There are so many providers out there, offering so many different mortgage products, that it can be difficult to even know where to start looking. In order to navigate the mortgage market more effectively, you may wish to employ a mortgage broker. Mortgage brokers use their skills, expertise and contacts to find mortgages on your behalf; essentially, you simply tell them what you want, and they find it for you.

There are two things to remember with mortgage brokers, however; firstly, some of them charge for their services, so it might be a good idea to find this out before you start, and ensure that a mortgage broker fee does not outweigh the money you might save on a cheaper mortgage. The second important point to remember is that the best mortgage brokers to use are those who are “whole market”; in other words, who compare mortgage products from all lenders, and not just a panel of those who they receive commissions from. This way, you won’t miss any great deals from smaller, less well-known lenders.

If a mortgage broker does not sound like the best option for you, you can use online mortgage comparison to find your perfect mortgage deal. Using online comparison can take the stress out of finding mortgage quotes. You simply enter your details online, stating what kind of mortgage you are looking for, and have a list of quotes for cheap mortgages, all with the click of a mouse and from the comfort of your own home.