|Real Estate Information|
Real Estate Investing Myths That Steal Profits From Your Pocket
One of the things that distresses us about our industry is the amount of wrong or incomplete information available to investors. Some myths block what otherwise would be a great deal, while others would have you believe that a bad deal is actually great. For example, we encourage purchasing homes "subject-to" the existing mortgage as an option to finance the purchase of an investment property. This means that title to the property is transferred to the purchaser, but the loan remains in the original borrower's name with payments made by the purchaser. Unfortunately, many myths exist around this method which could rob you of your profits. Let's take this opportunity to dispel 5 of the most common.
Myth #1: Buying A House "Subject-To" The Existing Mortgage Is Illegal.
Absolutely not true! Most mortgages have a "due-on-sale" clause which states that if the house is sold without paying off the mortgage, the lender has the "right" to call the entire loan due. The key here is that they have a "right" - not an "obligation". In other words, it's their choice. We asked several attorneys in town who represent lenders to see if they had ever heard of a bank call a loan due because of a sale. In every instance they said not as long as the payments were made timely. Why? Because banks are in the money business - not in the real estate business. If they call the loan due, and it goes into foreclosure, they have a poor performing loan on the books (for which they have to increase their reserves), they incur additional costs, and they inherit a property. Or, they can just accept the timely payments from the new owner. Which makes more sense?
Myth #2: Buying "Subject-To" Is Complicated And Requires A Ton Of Paperwork.
The truth is that all you have to do is write it into the Purchase and Sales Agreement (PSA). We write it in right next to the Purchase Price. Here's an example using our PSA:
Total Purchase Price to be paid by Buyer is $80,000.00, payable as follows: "subject-to" existing first mortgage with a balance of approximately $77,500, and monthly PITI payments of $695; remainder of Sellers equity to be paid in cash at closing.
That's it. You and the Seller have now agreed that you'll purchase the home subject-to their mortgage. As a precaution, we have the Seller sign a disclaimer that they know that the loan has a due-on-sale clause, and that we make no promise as to when the loan will be paid in full, or how long it will remain in their name. We also prepare a letter from the borrower informing the bank that all future correspondence should be forwarded to us, and we have the right to act for the Seller in every way regarding the loan so they'll disclose loan information to us in the future.
It really is that easy. After closing, you just start making the payments. We don't hide our identity. We send in our own checks, and the house insurance is in our name.
Myth #3: No Homeowner Will Ever Sell Me Their House And Leave The Loan In Their Name.
If you're dealing with a seller who has no problems with his house, this may be true. But when you deal with motivated sellers - ones that either have financial, personal, or house issues - this will not be an issue. Motivated sellers need a way out - quickly! Often, they're already behind in their payments, and facing foreclosure. When you tell them that their worries are over, and you'll catch up their back payments, and make all the subsequent payments on time they'll jump at the opportunity. As a bonus, their credit will even improve.
The key to successful negotiating lies in your confidence. Realize that you're providing a viable alternative solution which allows the highest price to be paid, with the quickest closing, and immediate relief for the Seller's situation.
Myth #4: Kitchen Table Closings Are Perfect For These Transactions
Investors love to say that they "got the deed" at the kitchen table while they presented their offer. The concern is you have no validation of what you purchased. Without a title exam, there's no guarantee the correct owner even signed the deed, nor whether any other loans or liens exist on the property. You also have no title insurance to protect you from any unanticipated title problems. Finally, the actual payoff on the loan must be validated with the lender by requesting a statement of account. Do not use the principal balance payoff shown on the monthly statement because it does not include past due payments, other interest accrued, fees and penalties, and any prepayment penalties. We've seen actual payoffs tens of thousands of dollars greater than the principal payoff.
You could argue that what difference does it make if the loan isn't in your name and you gave the Seller no cash. The problem is that you may not discover any of these issues until much later in the transaction - maybe not until you try to sell the property. By then, you will have invested time, energy, and money in the property only to see it all lost, when all of these problems could have been avoided by conducting a standard closing with your attorney or title company.
Myth #5: I Can Always Just Walk Away If I Can't Pay The Mortgage
This is technically true, but not a great strategy for the successful investor. Legally, you are not responsible for the payments. But you do have your credibility and reputation to consider - which are critical to your long term success. You definitely don't want an angry seller defaming your reputation in the community, or submitting a complaint with the Better Business Bureau. Not to mention that you probably have cash invested in the house, which will all be lost. We recommend treating "subject-to" mortgages just like any other with your name attached - make timely payments.
FREE! Real Estate Investing Secrets To Earning $100,000 Your 1st Year! -- 11 Overlooked Real Estate Statregies That Will Turn Your Investing Business upside Down And On The Fast Track TO Success...Guranteed! Plus A Bonus Track With A Secret So Successful It Can Double Your Investing Income Overnight!
Erie County Real Estate Transactions Buffalo News
Real estate transactions Arkansas Democrat-Gazette
Massachusetts real estate transactions for Hampden, Hampshire and Franklin counties: Dec. 8, 2019 edition - MassLive.com
Massachusetts real estate transactions for Hampden, Hampshire and Franklin counties: Dec. 8, 2019 edition MassLive.com
Longmont-area real estate, commercial deals Dec. 8, 2019 Longmont Times-Call
This week’s top Philly reads; Checking in on the city’s real estate | Morning Newsletter - The Philadelphia Inquirer
This week’s top Philly reads; Checking in on the city’s real estate | Morning Newsletter The Philadelphia Inquirer
Know In Which Real Estate Market to Invest U.S. News & World Report
What Is Passive Income in Real Estate? Motley Fool
Real estate records, 12/08/19 | Announcements Lincoln Journal Star
Real estate transfers Mount Airy News
Investments: Thinking about purchasing real estate abroad? The Jerusalem Post
Real estate transactions for Dec. 8, 2019 | Business Roanoke Times
Letters: Real estate fees; members of Congress complicit; Rep. Ken Buck Boulder Daily Camera
Commercial Real Estate Attorneys Fort Lauderdale - Commercial Real Estate Legal Blogs Posted by Roy D. Oppenheim - Lawyers.com Blog
Commercial Real Estate Attorneys Fort Lauderdale - Commercial Real Estate Legal Blogs Posted by Roy D. Oppenheim Lawyers.com Blog
How Social Media is Shaping the Real Estate Industry Entrepreneur
Giving Back: Giving through real estate The Willits News
WHO'S NEWS Real Estate Weekly
La Crosse County real estate transfers for Sunday, Dec. 8 La Crosse Tribune
Real estate transfers: Nov. 25-29 | Toledo Blade Toledo Blade
Real Estate Transactions for Sunday, December 8, 2019 | Transactions Charleston Post Courier
GFP Real Estate Pursues Major Overhaul of 100 Pearl Street in Financial District, Manhattan - New York YIMBY
GFP Real Estate Pursues Major Overhaul of 100 Pearl Street in Financial District, Manhattan New York YIMBY
Chinese investment in U.S. commercial real estate dives 76% Los Angeles Times
Williams Toyota of Sayre and Sean Anthony Real Estate host 2nd Annual ‘An Evening With Santa’ - WETM - MyTwinTiers.com
Williams Toyota of Sayre and Sean Anthony Real Estate host 2nd Annual ‘An Evening With Santa’ WETM - MyTwinTiers.com
Routt County real estate sales total $9.6M for Nov. 29 to Dec. 5, 2019 Steamboat Pilot & Today
Christie's International Real Estate Fort Worth Fort Worth Star-Telegram
REAL ESTATE ONE -SOUTHGATE | Ads Southgate News Herald
Recent Commercial Real Estate Transactions The New York Times
Inman announces the first round of real estate company exhibitors for Inman Connect New York 2020 - Benzinga
Inman announces the first round of real estate company exhibitors for Inman Connect New York 2020 Benzinga
Walsh signals possible support for transfer tax on real estate sales The Boston Globe
Berkshire Hathaway HomeServices KoenigRubloff Realty Group to shorten name - Crain's Chicago Business
Berkshire Hathaway HomeServices KoenigRubloff Realty Group to shorten name Crain's Chicago Business
Real estate agent and husband get probation in welfare fraud case - Hawaii Tribune-Herald (subscription)
Real estate agent and husband get probation in welfare fraud case Hawaii Tribune-Herald (subscription)
Attorney indicted for alleged forged deed, real estate theft Hawaii Tribune-Herald (subscription)
L.A. limits campaign donations from real estate developers. Critics say it falls short - Los Angeles Times
L.A. limits campaign donations from real estate developers. Critics say it falls short Los Angeles Times
Hawaii real estate sales, Oct. 14-18 Honolulu Star-Advertiser
Real Estate Transfers: Dec. 8, 2019 | Business messenger-inquirer
Real-Estate Firms Rolling Out New Funds for Mom-and-Pop Investors The Wall Street Journal
Sponsored: Real Estate Confidential: The Infamous Lower Level Martha's Vineyard Times
DATA: Here is how commercial real estate fared in November in south Montgomery County - Community Impact Newspaper
DATA: Here is how commercial real estate fared in November in south Montgomery County Community Impact Newspaper
Dodge County real estate transfers Fremont Tribune
Shreveport-Bossier real estate: Estates with land Shreveport Times
Bulltrout Brokers LLC/Windermere Real Estate - Ad from 2019-12-08 Helena Independent Record
How will demographic changes affect Montreal real estate? Montreal Gazette
The five best things real estate could get from Albany The Real Deal
Coworking Revives Office Real Estate Morningstar.com
Redesigning Real Estate — RISMedia | RisMedia.com
Real Estate Thought It Was Invincible in New York. It Wasn’t. The New York Times
Real Estate vs. Stocks: Which Is the Safer Investment? Yahoo Finance
Firm Real Estate Offers Challenges and Opportunities in Equal Measure | The American Lawyer - The American Lawyer
Firm Real Estate Offers Challenges and Opportunities in Equal Measure | The American Lawyer The American Lawyer
These 4 Measures Indicate That Consus Real Estate (ETR:CC1) Is Using Debt Extensively - Simply Wall St
These 4 Measures Indicate That Consus Real Estate (ETR:CC1) Is Using Debt Extensively Simply Wall St
Martha's Vineyard News | Recent Real Estate Transactions: Week Ending Nov. 29 - The Vineyard Gazette - Martha's Vineyard News
Martha's Vineyard News | Recent Real Estate Transactions: Week Ending Nov. 29 The Vineyard Gazette - Martha's Vineyard News
Two Houston real estate firms engage in merger talks Houston Business Journal
Public Record: Muskingum County Real Estate Transfers Zanesville Times Recorder
StreetEasy's 2020 Housing Market Predictions CBS New York
Cheney University looks to monetize its unused real estate - Philadelphia - Philadelphia Business Journal
Cheney University looks to monetize its unused real estate - Philadelphia Philadelphia Business Journal
Fundamenta Real Estate AG's Listing on SIX Swiss Exchange Global Legal Chronicle
Why are real estate investors avoiding Chicago? Crain's Chicago Business
Brian Benjamin was set to hold a soiree with real estate honchos after flipping on good-cause eviction bill - Crain's New York Business
Brian Benjamin was set to hold a soiree with real estate honchos after flipping on good-cause eviction bill Crain's New York Business
The Keyes Company Continues to Revolutionize the Real Estate Experience in Florida With Lone Wolf's Enterprise Platform - RisMedia.com
The Keyes Company Continues to Revolutionize the Real Estate Experience in Florida With Lone Wolf's Enterprise Platform RisMedia.com
Real estate notes from The Oklahoman for Dec. 7, 2019 Oklahoman.com
Philly’s real estate boom spurs fear of eviction among one building’s senior citizens - The Philadelphia Inquirer
Philly’s real estate boom spurs fear of eviction among one building’s senior citizens The Philadelphia Inquirer
Howard Hanna Real Estate Realty USA - Ad from 2019-12-08 Glens Falls Post-Star
Q&A: Tech startup creates virtual hub for commercial real estate pros Finance and Commerce
Maine Commercial Real Estate: November Transactions Press Herald
Atlantic County foreclosures decrease dramatically during past two years Press of Atlantic City
Colliers International (Nasdaq: CIGI) to open its own office in Raleigh, nix license with current affiliate - Triangle Business Journal
Colliers International (Nasdaq: CIGI) to open its own office in Raleigh, nix license with current affiliate Triangle Business Journal
Selling Houses: The Basics of Design Psychology
I'm often asked about the basics of Design Psychology, which offers innovative interior and exterior design ideas for increasing profit and shortening market time. In reply, I begin by saying that Design Psychology's strategies go well beyond normal cleaning, painting, and repair.
Buying and Selling Real Estate in Florida
Florida is known as the "Sun Shine" state, and the reason is clear. People move to Florida for many reasons, but most that move there stay there.
First Impressions Will Sell Property Fast!
First impressions count, buyers will have already formed an impression before they step into your property. A well-kept garden, pathway and fence, plus a freshly painted front door are immediately appealing, whereas a scruffy outdoor space with a litter bin outside the front door may turn many prospective buyers away.
Most of us don't talk about money, finances, credit, debt..
What To Expect From Your House Appraisal
Having your house appraised can be a scary step in the moving process, especially if you don't know what to expect. Will your house pass muster or will they find some hidden defects and problems lurking in the basement and attic? Should you scrub the house clean?Don't worry - this isn't a test of how clean you keep your house or even if your house has problems (that will be for the home inspector to find out).
Where is Florida Investment Property
Florida Investment Property - Why Investing is a Wise DecisionThere are many reasons to purchase investment property in Florida, the foremost being value appreciation. Property values generally rise while debt decreases; making real estate purchases a good investment.
Product Review of Carelton Sheets No Money Down Course
Real estate continues to be a very important part of any financial wealth building strategy. Most wealthy individuals have real estate investments as a portion of their overall net worth.
New Housing Starts Do Not Guarantee Aftermarket Sales
We have been studying a trend of new home buyers in the US in light of this latest housing boom. And how we should adjust our strategies to deal with it.
A Possible Bargain: Foreclosed Properties
In the superheated San Francisco Bay Area property market, foreclosed properties are available at as much as 40% below market value, writes Srini Saripalli.The last few months of a calendar year are considered sluggish for transacting real estate, but Silicon Valley seems to be an exception to this.
Apartment Financing Explained
So you're interested in entering the world of property management? Have you thought about how you're going to get into this potentially lucrative market? Let's face it; unless you've just inherited a large sum of money or are otherwise independently wealthy you're going to have to borrow. This is where apartment financing comes in.
Buying a Newly-Built Home? Ten Benefits of Using a Real Estate Professional
It might not seem necessary to involve a real estate professional in a transaction where a buyer can deal directly with a builder. However, by using a real estate professional, you have someone to protect your interests and guide you along the right path.
Purchasing Florida Investment Property And Various Considerations
Purchasing Florida Investment PropertyConsidering researching the purchase of Florida Investment Property or properties for sale in central Florida? Do you find yourself wishing you didn't have that lawn to mow and the constant upkeep on a home? Purchasing Florida Investment Property can relieve you of all those household chores but purchasing a Florida Investment Property requires you do some homework. You need to know what you are looking for in a Florida Investment Property.
Real Estate Appraisal - Rental Properties
Real estate appraisal for rental properties isn't the same as for single family homes. If you were looking at a 24-unit building, it would be difficult to find similar ones nearby that have recently sold.
Escalation Clauses - A Home Buyers Secret Weapon
Today we discuss escalation clauses because much of the country is experiencing an extreme "sellers' market." By that, I mean there are more buyers than there are sellers, and that results in sellers' getting more than one offer to buy their property.
Follow-Up - The Key To Successful Closings
If everyone always did everything they said they'd do, we'd all be a lot richer. Unfortunately, tasks are overlooked, and the ball is often dropped.
Whats This about a Housing Bubble?
In his recent testimony, Alan Greenspan warned against the possiblity that we have seen home prices plateau. The bursting of the "bubble" could cause a big hit to the U.
Home Selling: Making It Easy On Yourself!
It's a dream for many to buy and take ownership of a home. It's something one aspires for in their lifetime.
How Much Home Can You Afford In Todays Market?
If you haven't figured your credit worthiness and borrowing power lately, you might be surprised at how much home you can afford to buy in today's market! Mortgage Lenders are very optimistic about the future of the real estate market and as a result they are willing to loan more on properties than you might expect! And, lenders are making loans at rates not seen since the late 1960s.We,as your Realtor, will be most willing to align you with one of our favored lenders for a private and complete analysis of your borrowing power.
Property Investing Secrets 9
Property Investing: Here Are Two Important Tactics You Must Do When Buying Real Estate Off The InternetYou can purchase property off the internet. The off line fundamentals of property investing apply on line.
Equity is the value of your home minus what you owe on your mortgage. For example, If Joe's home is worth $200,000 and Joe still owes $170,000, then Joe's Equity is $30,000.
|home | site map|
|© 2006 TIGER MEDIA|