tom-beaty.com views on real estate

Almost all the traditional lenders usually need proof of income to grant a loan. But, sometimes people may have difficulty proving how much income they make. It is mainly due to the nature of their job or source of income. Such things can happen to people if they are self-employed or new entrant in a business to produce any accounts; or doing part time jobs at different times and places. There are also people engaged in sales, relying on bonuses or commissions as earning.

It so happens that many self-employed people do not keep accurate or exact records of their income and as a result may not be able to provide past years of trading accounts to lenders when completing an application for a mortgage deal. Such borrowers may not be in possession of an adequate history of audited accounts or taking much of their income as dividends. Other types include contractors who may be on their first contract with no history of renewal, or may be contracting in an industry or profession outside of their previous experience. The scheme allows self-employed people to stay on the property market by enabling them to say what they estimate their income will be and not having to prove this.

However, if you want such a loan, then it is better to present to the lender all the important data and documents you have, what is available. It will up to speed up and makes the process easier. These papers can be in the form of utility bills, proof of identity and address, records on credit cards or other loans, pay slips and proof of monthly income and so on.

Understandably, these types of loans pose greater risk to the lenders, and therefore you can expect to be imposed with higher interest rates and stricter conditions as a form of compensation. Therefore, if a person could somehow prove his or her income it would be much easier and less expensive. In most cases, you are not required to provide the lender with statements of accounts, bank statements, pay slips or other income-related documents. However, to make sure of your repayment ability, the lender will run a credit check; analyze the credit score and references before considering your application. The reference is often done by your landlord, bank or accountant.

Since lenders regard such loans too risky, they usually expect the borrower to deposit a large amount as down payment, some times up to a fifth, or a quarter of the property value. Due to the same reasons, you cannot expect to get more than 75% or 80% of the equity value. Lenders are not that naive to simple believe your word with out any solid proof. They will check your credit rating, and may go on to demand even more evidence such as a certificate issued by a chartered accountant supported by bank statements.

However, a drawback is that since prospective borrowers are able to tell the lenders their anticipated income, they could obtain a huge mortgage, and possibly over commit themselves. In this way they could end up missing payments and getting into serious trouble. It is important that if you decide to go for a self-certification mortgage be careful not to inflate your income. Such oversights will be considered as mortgage fraud and if found out can come with serious consequences such as court cases and possible dispossession of your property on which you applied for the mortgage.

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There are many purposes of utilizing short sale as a work out or a real estate investing strategy on a pre-foreclosure property. These are some of them:

1. To save the home owner’s credit.
2. To simply sell a property that has encumbrances valued more that itself.
3. To help a borrower run away from his/her mortgage payment responsibility.

There is however one bottom line purpose why an investor is or should be doing a short sale. To make profits should be the only reason. If anyone claims to be doing it for charity or non-profit, check them very well. Chances are their interest lies somewhere else and it would not be surprising that they never close successfully or very low percentage of closings.

With that been said, without exiting a short sale deal, there will not be a profit. Here comes the famous saying; exit before you enter. This simply means one needs to know the methodology to apply make the profit before even picking up the deeds and contracts at all.

Sometimes, it may be necessary to determine what the final agreed offer would be in order to determine the right exit strategy. Some numbers are just better for some exit strategies than the other.

There are about 7 different ways to exit a short sale deal. Many of them can be done legally but many can also cause potential legal trouble in the future. It is always advisable to consult your legal advisory before concluding on using any of these exit strategies. Here are the 2 easiest and most straight forward exit strategies:

1. Buy and Rent For Monthly Income.

If you plan to be or you are actually are an experienced landlord, short sale is a beautiful way for you to pick up some good deals. The downside to this is if you actually have enough patience to wait on a short sale process. I would hope so because patience is suppose to be vital in any business.

However there is a thin line here. Some may mistake patience for wasting of time or vice versa. Monitoring short sale or bunch of short sales can be quite time consuming and may not be feasible for a busy landlord but may be good for 1-4 family residential land lords.

Buying in order to rent for monthly income is a good strategy and it is best when the margin at which you are picking up the property is not the greatest. The monthly rental income must be cash flowing significantly to be worth all your effort.

2. Buy and Flipping for a Quick Profit.

Tell me the truth; this is why you are reading. I do not blame you. Quick short sale flip involves investing only time and a couple of calls. There is no money or down payment necessary in most cases. It is simply the most cost effective exit strategy. This exit strategy is feasible especially when the bank has accepted to sell the property at a huge discount; sometimes big enough to net you $50,000 while you flip to your buyer at still attractive prices.

You can buy and sell (double close) the subject property at the same closing table on the same closing date. The difference of these two transactions is your profit. The tricky part to this is when there is a mortgage origination needed by your buyer to pay for this property. Lots of time, the mortgage lender will require a seasoned title. There are ways to maintain the chain of title but unfortunately it is best you consult your local legal professional or better yet, join a local real estate investment association to in order to do it right. The associations have the secrets.

These are my favorite short sale exit strategies. I personally prefer the latter but if you want to play it real safe, you can go for the former. There are many other exit strategies like lease option, lease back, buying with an option, taking a note back etc. These two strategies will bring you more money with no strings attached.

Tux Lawrence is a Short Sale Expert, Business and Real Estate Consultant. He has bought and sold numerous properties using mainly Short Sale for the past 5 years. For more information on becoming a Short Sale Expert, click here Short Sale Expert.

Are you looking to broaden your rental real estate horizons? The real estate market is currently prime for investors to purchase income generating properties. With the falling real estate prices and increasing foreclosure rates, real estate investors are not only considering building their property portfolio, but they are also looking specifically toward rental real estate opportunities.

Properties are available at significantly reduced pricing and interest rates are among the lowest in a decade, making now a great time to invest.

The Rental Property Opportunity

Many individuals are unable to purchase their own homes at the moment or are being forced to move out of their current properties and into smaller, less expensive properties. Increased foreclosure rates across the country are forcing individuals and families to rent, and many would prefer to rent a home as opposed to an apartment unit.

Investors can purchase a home prior to foreclosure from a home owner and rent it back to them, a strategy which is beneficial to both parties involves. Investors can also purchase a variety of lower value properties to rent to individuals who are losing their properties to foreclosure or to target the lower income rental market. All of these strategies offer financial opportunities to investors ready to enter into the real estate marketplace.

As a rental property owner, learning how to capture the individuals within the marketplace will enable you to capitalize on the current market conditions. One important program that fits within the overall rental real estate strategy is the Section 8 Rental Voucher Program.

What is the Section 8 Rental Voucher Program?

This program enables individuals of low income households to find more affordable rental housing options. The program will often pay the landlord of the rental property a differential between the familys household income and the fair market rent for the property.

In simpler terms, this program is a federally sponsored subsidy program for individuals seeking to rent properties, offering funds on behalf of the renter to the landlord. The program not only allows more families to find affordable housing options, but increases the openness of many landlords to rent their units to these individuals or families. With the added financial security of Section 8 funding, landlords feel more financially secure when choosing renters of lower income and personal credit status.

How do Landlords Qualify for Section 8 Funding?

The units must meet the standards as outlined by the PHA to qualify for Section 8 funding assistance. If the unit for rent meets the standards, the landlord will receive a payment from the PHA when the tenant moves into the rental unit. Landlords must offer reasonable rent for their area in order to qualify as well. To apply, landlords must apply to Section 8 for consideration.

While low income households may not be the only market that you serve as a landlord or even the most desirable in your mind, there is a tremendous amount of financial opportunity that is worth consideration to serve this marketplace. One of the biggest advantages of the Section 8 program is protection from the PHA for this group of renters. Part of the monthly rental obligation is covered under this program, often offering financial assurance to the landlord.

Owning rental real estate is an excellent strategy for not only creating a current stream of income, but for building personal wealth. As you consider all of your available rental real estate strategies, be sure to consider the Section 8 program, the types of rental properties that you are considering and how your overall investment strategy may benefit from these funding opportunities.

Cynthia Conradt buys real estate using none of her own money. She left the corporate world to become a successful real estate investor. Visit her blog at http://youcanbuycashflowrealestate.com to receive her FREE e-book; Using Creative Finance to become a Real Estate Millionaire

For a lot of homeowners, whether or not to do loan modification isn’t much of a decision. For them, the best answer is obvious. But what if you’re not sure? After all, in addition to loan modification other common options are foreclosure or a short sale. Here are a few pointers to help you determine which among these may be the best path.

Foreclosure

Foreclosure is perhaps the most painful of the options for all involved. Nobody wins with foreclosure, not even the bank. From a legal standpoint, your lender obtains a court-ordered termination of your equitable right of redemption. In other words, you lose all rights to ownership of your home. More specifically, the lender takes possession of the home while you lose the right to redeem it even if you somehow come up with the money to pay back missed payments.

Losing your home is obviously painful for you, not just in the loss of your house, but in the damage to your credit as well — which is pretty severe. But how is it painful for the lender?

Normally, if a homeowner has built up a lot of equity and the housing market is good, then the homeowner can simply sell the house, payoff the bank, and pocket a sizable profit. However, if a home is being foreclosed on, it usually means that there is little or no equity and/or it is unlikely that the home will sell at a profit.

What this means for the bank is that when they take over ownership of your house, they are likely to lose money on its resale. Given any other option, banks and other lenders would prefer to avoid foreclosure.

Short Sale

A short sale, like foreclosure, still hurts both borrower and lender, albeit the hurt factor is usually less. The borrower still loses the home, but takes less of a hit to their credit rating. The lender also takes less of a financial hit.

An important factor to be aware of is that in the vast majority of cases, a short sale does not result in a full payoff of the amount owed, nor will the bank forgive the remaining balance. That remaining balance often stays with the borrower and he or she remains responsible for it.

Loan Modification

A loan modification, in many ways, is a win-win scenario for both the home owner and the mortgagee. This is because the lender continues to receive payments while the borrower is able to keep their home, making smaller monthly payments that are more affordable.

In short, loan modification often results in a lower interest rate, lower monthly payments, and in rare cases even a lowering of the principal balance is possible.

Loan modification is a great option if you still have an income, just not enough to cover your current payments, or you have simply fallen behind due to some sort of financial crisis such as a medical emergency, temporary loss of income, or other factors.

Which of these options is best for you depends on many different factors. But knowing the basic facts of each will help you make a more informed decision and bring you comfort in knowing that you made the right one.

Federal Loan Modification Law Center, LLP preserves the American Dream of Homeownership by successfully renegotiating loan agreements between homeowners and lenders. Our team of attorneys and real estate experts works closely with lenders to negotiate the best possible loan modification solutions for homeowners who qualify. Ed Staff is a freelance writer.

We’ve all heard the news. The nation is in the grips of a housing crisis. Perhaps you have no need to hear about it in the news because you’re right in the middle of your own personal crisis, worried about losing your home or falling behind on payments. The good news is, though, that loan modification could bring an end to your worries.

If you’ve ever spent some time talking to acquaintances about ways to avoid getting a traffic ticket, then you know that common myths always seem to come up. Have you heard the one about the guy who refused to sign his speeding ticket? The court was unable to prosecute him and therefore unable to collect a fine. Though it may sound believable, it still isn’t true.

Just like myths abound with traffic tickets, the same is true of loan modification. Whatever you may have heard about it, it pays to contact a loan modification attorney before deciding on the word of hearsay that you won’t qualify.

Here are a few of the most common misconceptions regarding loan modification, along with a few truths that you can take to the bank — literally.

Myth: If you have poor credit, you won’t qualify.

The truth is that your credit score has very little affect on whether you qualify or not. This is because loan modification is not refinancing or taking out a new loan. It is simply modifying the loan that you already have.

Myth: If you’ve received a foreclosure notice, it’s too late to save your home.

Actually, as long as your house hasn’t been resold by the bank, they may still be willing to work with you. This is especially true in slower markets where houses don’t sell well. Banks often would rather work with you to get you to where you can afford to make payments again rather than potentially lose money by auctioning off the house.

Myth: I don’t need help getting a loan modification. I can just negotiate with the bank myself.

Technically, this isn’t a myth. You can try to negotiate a loan modification on your own. You can also represent yourself in a criminal case. In both cases, unless you are very well educated and experienced in the matter, the turnout is unlikely to be good for you.

A loan modification attorney understands the laws surrounding the process and has the experience needed to negotiate the best terms for you. You may even find that an attorney has ways to legally obligate a bank to negotiate even if they initially refuse to work with you.

Have you heard the story about the cop who forgot to put his hat on and therefore invalidated the ticket he wrote? Remember, just because you’ve heard somebody somewhere say something about loan modification doesn’t make it true. For the real scoop on how loan modification can help you, contact a loan modification attorney.

Federal Loan Modification Law Center, LLP preserves the American Dream of Homeownership by successfully renegotiating loan agreements between homeowners and lenders. Our team of attorneys and real estate experts works closely with lenders to negotiate the best possible loan modification solutions for homeowners who qualify. Ed Staff is a freelance writer.

You’ve worked hard your whole life, scrimped and saved, all so you could provide a home for yourself and your family. Finally the grand day comes — the day you become a proud homeowner. It might not be a dream home to most folks, but to you it’s a castle, your pride and joy, your most valuable — if not your most precious — possession.

Times were good when you made the purchase. You got great terms on your mortgage, and since that time you’ve enjoyed the benefits and pride that come with home ownership. But now the dark clouds of a down economy threaten to take it away.

Perhaps you’ve fallen on hard times with the loss of a job or a second income that you had come to rely on. Maybe the great rate you got on your ARM is getting ready to, or already has, increased beyond affordability. Or you might have missed payments on a few other bills in order to keep up with your house payments and you just aren’t sure how much longer you can keep it up.

Or things might even be fine for now, but you stretched your budget in order to live the dream of home ownership and are looking to lower your payments so you can start building up your savings.

Whatever your reason, loan modification may be the answer you’re looking for. Loan modification helps troubled homeowners keep their homes by adjusting a mortgage to make it more affordable. It’s a way to save money, but more importantly it’s a way to save your home.

So how does a loan modification work? The details are likely to be boorish to all but the likes of financial geeks. But, with the right people helping you, details are something you won’t need to worry about. What is important is knowing the type of loan modification that can and will be done for you. The more you know about the different ways your mortgage can be adjusted, the better equipped you’ll be to make the right decision for yourself and your family.

Common Types of Loan Modification

Loan modifications can range from the simple — like lowering your interest rate — to the more complex — like negotiating a lower payoff balance, rolling up other bills into your mortgage, extending the term of the loan, and more. Here’s a quick look at some of the most common loan modifications you’re likely to come across:

Lowering the Interest Rate — This is one of the more popular types, and may be something you’ve gone through already. If your interest rate is already low, then this option may only be enough to save you a hundred dollars or less per month. In such a case, additional options should be considered.

Extending the Term of the Loan — This works best if you’ve been in your house for at least a few years. One way to look at this is that you are taking out a loan to buy your house from yourself for the amount of the principle balance. The new loan resets to the original term (or longer in some cases), thereby lowering your payment.

Negotiating a Lower Principle Balance — For this option to be a serious consideration, your home value must have dropped to the point that you owe more than its current market value. This puts the bank in a position where it would be better for them to accept less money from you rather than going through the hassle of foreclosure and potentially losing more money trying to resell the home.

There are many more options in the field of loan modifications. The ones that are available to you depend on your specific circumstances. To learn more, talk with a loan modification expert. They’ll be able to assess your situation and negotiate with your bank on your behalf to get you the best results possible.

Federal Loan Modification Law Center, LLP preserves the American Dream of Homeownership by successfully renegotiating loan agreements between homeowners and lenders. Our team of attorneys and real estate experts works closely with lenders to negotiate the best possible loan modification solutions for homeowners who qualify. Ed Staff is a freelance writer.

If you take the time and allow yourself to learn from us, you can successfully generate a lifetime of positive and substantial cash flow and a net worth that you probably can only dream of today. All of this can be done while creating what in essence will be your home-based business in the distressed real estate field.

The design, implementation and successful development of your home-based business in distressed real estate cannot only create financial independence and financial security but can allow you the type of freedom you want and desire.

The obvious additional advantage of creating wealth with financial security and financial independence is the benefit and improvement in the lifestyle for not only yourself but your family and loved ones.

This journey into the wonderful business of real estate can be a venture where the future is lined with riches and personal freedom.

I hope you realize more wealth has been created for individuals in the history of the United States through the powers and miracle of involvement in the real estate industry than any other area.

The best test of riches to be made in the future is the recognition of how riches have been made in the past.

There is no investment in the world with more potential for constant and long term income and net worth growth than real estate. When you couple this potential with the minimization of risk offered by real estate, you have a combination of benefits unequaled in the investment arena.

In this era where we are just opening up the embryonic years of the twenty-first century, we have seen stock markets as volatile and violent as volcanoes, we have seen major domestic and international companies fumble and topple over voodoo accounting systems, we have seen the entire securities industry begin to rock in its base concept of how to value an asset.

Yet with all of these confusing and apprehensive trends, the ability to make a profit and enhance your net worth and cash flow through participation in real estate has never ceased. You may be simply overlooking the means to create a personal dynasty for yourself by not seriously making real estate a part or whole of your business and investment future.

Real estate has historically been one of the few enterprises where profits and wealth can be nurtured and secured no matter what stage the business cycle of our country is in.

Whether we are in the prosperity stage, the recovery stage, the recession stage, the depression stage or any other stage the economist want to label the current status of our country, the ability to maintain a consistent degree of substantial profit, growth and cash flow seems to be evident in the real estate market.

Like any field of business (and real estate is no different) it takes an energetic and dedicated entrepreneur willing to look at things in the eyes of a master (employer) and not as a slave (employee) in order to break out of what some may seem to say are the shackles of the all too common paycheck to paycheck thinking.

In addition to the tremendous opportunity offered in the real estate industry, it is one of the few businesses (and keep in mind this is a business and you need to look and smell and breathe like a business person) where your opportunities for success are not geographically limited. You can prosper and excel in any neighborhood and community in this country.

I am sure you will agree with me that if you treat your real estate future as a business and use sound and solid economic and business principles in operating your business, your expectations of cash flow and net worth will be tremendous and your probability of succeeding will be enhanced to maximum levels.

David H. Tedder is am author, public speaker, consultant and Foreclosure and Trustee Expert. View his blog now at http://www.DavidHTedder.com.

Everybody thought real estate ownership was a part of the American Dream. It’s kind of interesting because the original premise was that a person could would work and save and when they had enough money for a down payment and could prove their income, a bank would give them a loan. Then came the new home.

Well without getting into the fray, it seems that lots of people gave and received loans (up and down the socio-economic strata) where there wasn’t the proper amount of money or documentation to prove that people had the ability to actually repay those loans. Everybody thought that values would keep going up forever, never stop, never slow down and that increased equity would be the security for the loans, totally ignoring the fact that little or no down payment provides no security or equity in the event that the loan goes bad. Add to that the adjustable rate mortgages. This was the makings of a perfect storm for real estate.

You’ve probably heard all this in one form or another. Why am I going through this? We all think buying a home or piece of real estate is fool proof. In truth, it depends upon the amount of cash, equity, and income applied to the deal and whether you are operating on sound financial principles. We need to take some responsibility for our actions. We need to be operating on intelligence, not on emotions or desire alone.

At this point, the banks are pretty much scared stiff about doing anything that is not financially sound.

I came to these conclusions after watching some folks trying anyway they could to get a loan for a project or property. If a bank won’t lend you money, better yet if a bunch of banks won’t lend you money for a project or property, it probably isn’t:
A) A good idea
B) Something you are qualified to do
C) Something you have enough financial solidity to do.

Sure, get an Angel investor. It still doesn’t make it a good idea or a viable project. It just gives them something to take from you in the event of a bust.

Sound financial practice is essential. It doesn’t mean things are hopeless. Since most of the payment money at the beginning of either a fixed or adjustable mortgage is applied only to interest, it really doesn’t cost you anything to rent or rent with an option to buy a property if you can find such a situation.

Here’s what happens. First you get to live where and how you want. If you can strike up a deal with an owner landlord or a seller you may be able to show steady payments, good faith, build up some equity and get what you want without risking doing it too early and jeopardizing your credit.

There are lots of things you can do as alternatives to buying with large down payments and still come out on top. Considering renting to own.

Thomas Fazio does Equity Marketing, Real Estate Consulting and is a Licensed Realtor in the state of Colorado. He also consults on Denver condos, Littleton Co homes for sale, and 0 interest credit cards

All through 2007, Singapores real estate activity was booming, however, 2009 presents a slightly gloomy picture. The global recession has affected Singapore as well and both its residential and commercial property markets have seen sharp falls from 2007 by 80% and 62.4 % respectively. And, considering that the Singaporean Prime Minister stated that the economy is looking at 8% shrinkage the real estate market wont be long in following.

However, for expats and other foreigners looking to invest this should not be much of a deterrent. The drop in prices could get you some otherwise expensive properties at really low rates. Backing your Singapore property dreams is a report released by the Urban Land Institute and PricewaterhouseCoopers (PwC) called Emerging Real Estate Trends in 2009 which puts Singapore 2nd in rank among the top five Asia Pacific cities for property investments.

Real estate in Singapore can be purchased on a freehold or leasehold basis. Singapore is one of the most expensive Asian cities to live in the rent for an executive condo can reach the exorbitant price of SGD 3000 to 6000 per month and it goes higher for the more luxurious or high end properties, like the ones in District 9, 10 or 11. On the back of this, an average rent is pretty difficult to figure.

Expats generally prefer executive condominiums over HDB flats. HDB flats are only available to expats who have Singapore citizenship or at least those with one family member having Singaporean citizenship. Expats could also rent HDB flats considering the amount of time they will actually spend in the country. Executive condos are more expensive, however, as are all the good things in life. For foreigners, HDB flats are obviously not an option. Executive Condos or a house (bungalow/landed property) in an area of your choice would be feasible.

Another way of investing in Singapore Real Estate is through Singapore Real Estate Investment Trusts. These work in the same way as mutual fund corporations. They invest in real estate in Singapore by pooling together investments of small investors, who would otherwise be unable to purchase property in Singapore upfront. There is currently 20 such REITs operating in Singapore.

The only aspect that warrants caution is the rules and regulations of buying or leasing real estate in Singapore. Property buying for foreigners is not a hassle, but it helps to have a good brokerage firm or investment firm on your side who can help you through understanding how Singaporean real estate, trade and government works.

Jacob George is an Internet Enthusiast. Find Realestate agency with highly professionals for Singapore Property, Singapore RealEstate & Singapore Properties

How do you find the most expensive area in the worlds tenth most expensive city? Add to this the fact that the city was just 707.1 sq km in area. Well, that is Singapore for you. From a British Colony, Singapore has come a long way to becoming the fifth largest country in terms of GDP, with the busiest port in the world, boasting a high standard of living and a hotspot for tourists from all over the world. Bearing all of this in mind, just how expensive is it to live in Singapore?

Residential property in Singapore is quite affordable to Singapore citizens, who prefer living in the HDB flats built by the government. These flats are comfortable, almost as good as luxury apartments in most other countries. Private housing in Singapore is available for non citizens and comprises of luxury executive condos and bungalows. The rent for a 4-5 room condo could be between SGD 3000-6000, or even more depending on the area or locality.

Singapores commercial and central business district is the most expensive real estate you can find. This happens to be the Central Region, a region comprising of 11 urban planning areas: Marina East, Marina South, Downtown Core, Newton, Museum, Outram, Orchard, Rochor, River Valley, Straits View and Singapore River. Most of these are commercial, entertainment areas filled with shopping malls, restaurants, hawking zones and entertainment areas. They are places that locals and tourists flock to with great enthusiasm and thus are some of the most expensive areas in Singapore. The Central Region comes in Districts 9, 10 and 11.

However, the prices of private property in Singapore are dropping, in no small part to the global economic meltdown. At the end of 2008, prices of private property were down by 6.1%. This is obviously bad news for Singapore, but good news if you are in the market to buy. But even with the decrease in prices Singapore is the ninth most expensive property market in the world in 2009, according to the Global Property Guide. The price of one sq. m. in Singapore is a whopping $9,701 and it is only a little behind Tokyo and Hong Kong.

So how expensive is Singapore? Well, that is relative. To those living in much more expensive cities, especially in the Europe, Singapore may sound quite cheap for temporary accommodation. In fact many European citizens may actually use the current fall in property prices to begin investing in Singapore real estate. However, to most Asians, Singapore does become quite expensive when compared to Thailand or Malaysia.

Jacob George is an Internet Enthusiast. Find Realestate agency with highly professionals for Singapore Property, Singapore RealEstate & Singapore Properties