BUYING REO PROPERTIES: TIPS, PROS & CONS
If you’re a Real Estate Investor or are just thinking about buying a home, you’ve probably heard about REO (real estate owned) properties. REOs are homes that have been taken back by the lender after being foreclosed on. They can be a great deal, and come with the opportunity to acquire properties with attractive profit margins. Another great way to acquire properties that offer an attractive return is to buy a house at the price of a car. Read on to learn more! BUYING A HOUSE FOR THE PRICE OF A CAR It hardly matters if you are new to Real Estate or a skilled expert, an able coach can help you find your way and achieve your goal more quickly. We at MY SMART COUSIN are there to guide you, with a special focus on serving Black and Brown folks and women, and help you move ahead in the right direction and scale your finances. As your trustworthy Real Investment Coach, we help people do what we do routinely and Buy a house for the price of a car through the hundreds of opportunities available daily. Are you in the market for a new home? Or maybe you’re an investor looking for your next big property project. In either case, buying a low-priced REO property can be a great option. Whether you’re just starting to think about it or you’re ready to take the plunge, read on for all the info you need! WHAT ARE REO PROPERTIES AND WHY ARE THEY A GOOD INVESTMENT OPPORTUNITY? A central plank in Real Estate Investing is finding properties with unrecognized or underpriced potential, and flipping them for large returns. What makes a Real Estate Owned property stand out is that the bank owns the house courtesy a foreclosure triggered by the homeowner not paying the mortgage loan on time or at all. Because banks are not in the business of owning houses as part of their core strategy, lenders tend to be willing to negotiate the sales price. These negotiations can result in lucrative investment opportunities–but only when they come up during your search process. Another benefit of REO properties is that the homes tend to be in somewhat reasonable condition rather than of the tumble-down variety ready for a wrecking ball. The reason is that the homeowner may still live in the house right up until the day that the house is sold. While deferred maintenance will likely need to be addressed, it’s unlikely that major structural issues will be the case in such a scenario. If the homeowner is no longer living in the home, the lender is taking on the responsibility of performing minimal maintenance through a third-party servicing company, again, minimizing the likelihood that the property requires a full gut rehabilitation. HOW DO YOU BUY REO PROPERTIES, AND WHAT SHOULD YOU LOOK FOR WHEN EVALUATING THEM? Purchasing REO properties is similar to other forms of house hunting, with a few exceptions: · FINDING PROPERTIES – Begin your search by identifying properties that are in your desired range and market. Meet with your local bank to determine if they maintain a list of REO properties for sale. · HUNT FOR LENDER AND FINANCING OPTIONS – In order to avoid finding a property, only to have your financing fall through, select a lender and obtain pre-qualification early. When the selling bank that has REO properties knows that you are financially eligible, they are likely to take more interest in your offer. · PREPARE A LIST OF SELECTION CRITERIA FOR REO PROPERTIES – It is important to determine what your key must-haves and dealbreakers are in a property before beginning your search. The more time you spend prepping your criteria, the easier it will be to make efficient, confident decisions when presented with multiple listings by different owners and brokers! Start by looking at the properties you own, or the type that catches your interest, to hone in on what your drivers are. Importantly, don’t allow price to be the only factor on your list. Consider other factors such as property location, size, current condition, ongoing maintenance needs, and so on. · GET AN APPRAISAL – Whether you’re purchasing a property for a primary residence or for an investment, appraisals help you determine the value of the property, warts and all, relative to its asking price. · MAKING THE OFFER – If you have a real estate agent, use your agent to make the offer and work with the lender. An agent offers you another set of eyes on things that you might miss, as well as helps to temper emotions. · HOME INSPECTION – Home inspections are important because they can help you avoid costly repairs after the purchase. A home inspection should always be done before finalizing any deal, but this holds especially true for real estate-owned assets as such properties often come without the protection of warranties or disclosures. · THE NEGOTIATION – Banks, like most sellers, will seek to maximize profits and close quickly. Banks, however, usually have multiple levels of approval involved in their chain of command. As such, be prepared for an extended process that is paperwork-heavy. If you are unclear about the purpose of any documents and what they mean, always ask, and then ask again, until you are clear. · FINALIZATION – Once you have come to an agreement with the seller and your lender is completing their close process, your lender will prepare the loan documents and verify the status of the title. · THE CLOSING OF THE DEAL – If everything goes well, you can close the deal on the REO property. The lender and you must sign the documents transferring the house into your name. WHAT ARE THE PROS AND CONS OF BUYING AN REO PROPERTY COMPARED TO OTHER TYPES OF INVESTMENTS OR HOME PURCHASES? THE PROS OF PURCHASING REO PROPERTIES · NO BURDEN OF OUTSTANDING TAXES When you buy a foreclosed property, there are often no outstanding debts or taxes to worry about. Banks will take care of these issues at possession in order to ensure that they remain the primary lienholder on the property. · HIGH RETURN
FHA APPRAISAL: GUIDELINES AND REQUIREMENTS IN 2022
As a Real Estate Investor or home buyer, you’re probably familiar with FHA appraisals. Appraisals are important because they help to protect both the lender and the borrower. Lenders like appraisals because the appraisal confirms that the property is worth enough to cover the loan. Likewise, borrowers like appraisals because it reassures the borrower that they aren’t overpaying for a property. If you’re looking to buy a house for the price of a car, FHA financing can be used to finance both single-family houses as well as small multifamily investment properties, as long as the house serves as your primary residence. MY SMART COUSIN specializes in helping aspiring property investors and homeowners, particularly people of color and women, buy a house for the price of a car. As a seasoned Real Estate Investment coach, we take budding entrepreneurs and property investors from idea to action, help you scale your financing, and walk hand-in-hand with you to develop and put in place your customized Real Estate Investment strategy. FHA BACKGROUND The Federal Housing Administration, or FHA, has been around for nearly a century and was founded in 1934. The FHA is a government-backed mortgage insurance company that insures mortgages for people who can’t afford a large down payment. Stepping in as a mortgage guarantor of sorts makes it easier for people to buy a home, as the lender knows that if push comes to shove and the borrower defaults on their loan, FHA will pick up the tab. With inflation and mortgage interest rates reaching new heights, it pays to stay current on lending practices. In this blog, we’ll take a look at what’s changing with the FHA appraisal process in 2022. Keep reading to learn more! WHAT IS AN FHA APPRAISAL? An FHA appraisal is required by lenders to ensure that a potential property is a good investment. Although, as mentioned earlier, FHA guarantees repayment of a large portion of the loan if a homeowner defaults, banks prefer not to find themselves in this situation. After all, the lender makes money by collecting interest payments on the mortgage, so having the loan paid off early by FHA runs counter to this. One of FHA’s top concerns when evaluating an appraisal is ensuring that the property itself is durable, safe, and fit for habitation. The hired appraiser will look at the property inside and out and check for health and safety issues— for instance, the structural integrity of the property, electrical wiring, and mold or mildew issues. Additionally, the appraiser will look at factors that impact the house’s value— for instance, a swimming pool, a garage, and the condition of the home, and major systems such as the roof or furnace. Appraisers also evaluate the features of comparable homes that were recently sold. So even if you have no interest in keeping up with the Joneses, FHA takes an active interest in them from a valuation perspective! BASIC COMPONENTS OF AN FHA APPRAISAL The FHA appraiser looks for the good, the bad, and the ugly regarding the value of the home and any factors that could prevent it from being occupied long-term, as these factors contribute to the property’s longevity and marketability. Two key areas of focus for the appraisal are pests and paint type. Pests don’t refer to an ant or spider here and there, but rather whether there is an infestation or any damage to the property— for instance, damage to supporting wood beams caused by termites or carpenter ants. Paint refers less to the color or style of paint and more to its safety, specifically, if there are areas of the house that have lead-based paint. Houses built before 1972 are more likely to have used lead-based paint versus newer houses. Other areas on the appraiser’s checklist include the following: · THE PHYSICAL CONDITION OF THE BUILDING ° The foundation, roof, and exterior must not be damaged. ° A big NO to insect infestation ° The wiring and the electrical systems must not be exposed. ° Sufficient ventilation of attics. · THE LIVABILITY OF THE BUILDING ° The utilities must be in good working condition including heat and clean water. ° A shielded sanitary sewage disposal system must be present. ° Lead paints should not be used. ° Fire codes and applicable safety codes should be met. · THE CONDITION OF THE PROPERTY SITE ° The soil should not be contaminated. ° The route of the drain pipes must point away from the home. ° The property must be accessible and safe. Market Comparables ° The appraiser evaluates the price of two comparable properties that have sold within the last 90 days. ° In a volatile market, a period of 30-60 days will be used and three comparable properties will be selected. ° Additionally, market comparables will be selected for properties that have not closed yet and are still listed for sale. Typically the appraiser will select two properties for this analysis. ARE THERE ANY POTENTIAL ISSUES THAT COULD ARISE DURING OR AFTER THE FHA APPRAISAL PROCESS? A clean FHA appraisal puts you one step closer to owning a home, but what happens if the appraisal report raises issues or has a lower than expected value? ° IF THE FHA APPRAISAL REQUIRES REPAIRS In some cases, the lender will conditionally approve a loan if the appraiser states that renovations or updates to the home are required to bring it into compliance with safety standards. In such instances, the buyer can negotiate with the seller to determine whether these renovations will be paid for by the seller or will instead be paid in whole or in part by the buyer. ° A LOW-PRICE APPRAISAL If the appraised value of the home comes in lower than the sales price, then, much as with the renovation scenario above, the buyer and seller will need to negotiate to determine how this lower value will be split. Buyers sometimes despair in the face of a lower appraised value, but this decreased value can force a seller’s hand to provide a price that while lower, is closer to market. FINAL THOUGHTS An FHA appraisal is an evaluation
Legal assistance for the most vulnerable in eviction cases is essential
I’m a landlord who owns several properties in Delaware, and I see renters every day who desire a great home to raise their family, but also face the financial struggles of doing so. When a renter finds themselves in financial straits, I do my best to work with them, and we often find a way collectively to navigate those hurdles without ever resorting to court. But, when we do have to go to court, I know that implicitly I have the upper hand. On two levels really— in terms of my familiarity, though by no means expertise, with the eviction process, and in terms of a day off from work not resulting in an unpaid day, as is the case for many. I often represent myself — a choice that I make, because I know what to expect and the legal requirements. I am familiar with the eviction process, and I am well-prepared to make arguments on my own behalf. And in instances when I don’t feel equipped to represent myself and instead hire an attorney, I know that this cost, while painful, won’t break me. My renters on the other side of the courtroom rarely have that advantage. Paying for an attorney is usually well beyond the limits of their pocketbook (and let’s face it, all too often it is a pocketbook rather than billfold), and consequently, they show up unrepresented by default, not by choice. It seems only fair to me that just as we assist people financially to rent a home when their income doesn’t allow it, That we assist those most vulnerable with legal assistance. I understand the importance of having access to legal representation, and it is for this reason that I support providing a right to representation for renters who are facing eviction. In Delaware, 86% of landlords have representation in court eviction proceedings, but only 2% of renters have representation. Many landlords and real estate investors ask me why I support changing a status quo that favors me, and them, so heavily with 43 to 1 odds. For me, it’s a matter of basic fairness and housing justice — it’s not lost on me as a Black woman that women and people of color have a more tenuous hold on housing, particularly during COVID-19 than other populations. That imbalance has almost always resulted in the same conclusion: families displaced from their homes. The right to representation bill that’s up for consideration in the General Assembly, SS 1 for SB 101 (also referred to as just SB 101), just seems like common-sense legislation. For low-income renters, in particular, who can’t afford help, it would level the playing field between landlords and renters by providing representation in eviction proceedings. To my mind, SB 101 also will help landlords who are unaware of or are overwhelmed by rental assistance programs, to get connected with resources and open the spigots to back rent owed by renters who’ve fallen behind on their payments. In summary, while I understand the concerns raised by landlords regarding SB 101, I don’t think that renter representation in one of the direst circumstances imaginable to a family — an eviction proceeding — attacks my rights as a landlord; it’s about ensuring that the rights of my renters are protected, too. SB 101 is an opportunity to address housing insecurity at the root of the issue and ensure that the most disadvantaged renters have a fighting chance to remain in their homes when facing eviction. I hope the House will vote “yes” when this bill comes up for a floor vote. Pam Hill is the founder of My Smart Cousin. She is also a Delaware landlord. Read on Delaeare online:- https://www.delawareonline.com/story/opinion/2022/06/03/legal-assistance-most-vulnerable-eviction-cases-essential/7489042001/ RECOMMENDED READ: History of the Social Security Act FOLLOW:- @MYSMARTCOUSIN
REAL ESTATE PARTNERSHIP STRUCTURE 101: Do’s & Don’t’s
Partnerships can be a great way to pool resources and increase your chances of success in Real Estate Investing, but there are a few things you need to know before you get started. Almost every successful real estate investor has gotten where they are today by teaming up with other people to do bigger and better deals. As the African proverb goes, if you want to dash off and go fast, go alone, but if you want to truly go far, go together. The integral component of a successful real estate business lies in being aware of its incredible opportunities and utilizing them at the right time. You can easily Buy a house for the price of a car and be the owner of your own sweet home. At MY SMART COUSIN, we act as your most trustworthy Real Estate Investment coach who is determined to make you aware and teach you about real estate investment strategies. We help our Black & Brown folks mainly women to scale their finances and how they can Buy a house for the price of a car, not one but thousands. If you’re like most people, you probably think of real estate as a pretty safe investment. After all, everyone needs a place to live, and demand for housing always exceeds the supply, right? Well, it turns out that real estate can be a risky investment after all – especially if you don’t know what you’re doing. In this blog post, we’ll take a look at some of the do’s and dont’s of real estate partnerships. So whether you’re just starting in real estate or you’ve been investing for years, read on to learn more! WHAT IS A REAL ESTATE PARTNERSHIP STRUCTURE AND WHY WOULD YOU WANT ONE FOR YOUR BUSINESS? When two or more investors combine their capital and expertise to buy, develop, or lease property is known as a Real Estate partnership. Both the real estate entrepreneurs decide to work together in a professional environment and put their endless effort into accomplishing a single goal. For most real estate partnerships, the general partner takes on more responsibility and liability in exchange for a bigger share of profits. However, some only have passive investors or limited partners who don’t participate actively except when necessary One might wonder, why would he want a partnership in the real estate business? Well, there are many benefits. For starters, it’s easier than trying to do this on your own! You also get more exposure and an outside perspective which can help guide you in the right direction when making decisions about what kind of investments or properties will best suit both yourself as well as those who invest alongside them (i e.; partners). You’ve probably heard stories before where one investor seeks out another looking for financial backing but if that isn’t possible then maybe consider putting together some sort of group deal-like structure where everyone contributing something gets their desired outcome. THE 3 MOST COMMON ENTITY PARTNERSHIPS There are numerous ways through which Real Estate partnerships can be formed. Amongst them the most common types are – ° LLC or Limited Liability Company ° LLP or Limited Liability Partnership ° S-Corporation The benefits of owning a real estate partnership are twofold. First, the income or losses from your investment will be passed through to you on personal tax returns which eliminate any taxation at both corporate and private levels; second these partnerships offer extra-legal protection should there be claims against other assets not directly associated with this particular business venture–you’re protected by virtue being part. THE BENEFITS & DRAWBACKS OF REAL ESTATE PARTNERSHIP The one who lacks real estate knowledge or experience must go for the idea of a real estate partnership. If for nothing else, a truly great partnership can easily be the one thing new investors need to get started on the right foot. The best real estate partnerships act as a solid foundation for creating a great deal of balance between relationships, satisfaction, practicality, and essentials. Here are some of the biggest pros and cons of a partnering up to help ensure the one you create will be as powerful as possible: BENEFITS OF REAL ESTATE PARTNERSHIP ° A correct partner will always open the door for extra resources such as more capital, skills, network, and connections as well as professional expertise. ° The partnership provides a flexible distribution of profit & losses. ° For the one who wants to generate a passive source of income, a real estate partnership is beneficial for them. ° The personalities of each partner can combine to create a powerful presence in meetings with lenders or additional investors. ° When one partner is responsible for day-to-day responsibilities, they need help with longer-term strategies. The Real Estate Partners are essential in making sure that the project runs smoothly and equally share their workload so there can be no imbalance or sole focus on any single task at hand. DRAWBACKS OF REAL ESTATE PARTNERSHIP ° When two or more people invest in the same business, each person’s share is limited by how much they put into it. The benefits of investment – such as monthly income and profits from its sale – must be shared among all partners involved so that no one investor can reap too many rewards at once! ° An unclear partnership agreement may give rise to several disputes arising between partners in terms of delegating responsibilities and can turn your profitable investment into a loss. ° Different personalities of the partner give rise to versatile management& organization styles, which can be the cause of conflict between the partners. ° Sometimes capital differences also become one of the causes of disparity in the partners. ° Partnerships can get strained when one partner feels they are doing more than their fair share without getting an equal return. This could lead to tension between the two parties and even resentment toward each other, which may result in strain on relationships over time if not resolved professionally/amicably WHAT ARE THE THINGS TO CONSIDER WHEN SETTING UP A REAL ESTATE PARTNERSHIP STRUCTURE FOR YOUR
HOW TO BUY A MULTIFAMILY PROPERTY ON A BUDGET
Interested in investing your money in a multifamily property? You might be wondering, “Can I buy a two, three, or even four-family building with limited funds?” Fortunately, the answer is yes, though it will take some work on your part. But before we get to that, let’s first look into the multifamily model. Multifamily investments involve buying a duplex, triplex, fourplex, apartment building, or condo building and renting these multiple units, sometimes referred to as ‘doors’. Multifamily investing offers the possibility of generating a large burst of cash flow and net operating income from one building and roof. For this reason, multifamily property investment is often viewed as the first step of moving into larger, higher-yielding deals and thus, a popular investment channel for Real Estate investors. If you’re thinking about buying a multifamily property and prefer not to go it alone, you’re in good company as the services of an able coach can help increase your likelihood of success. At MY SMART COUSIN, we work hand-in-hand with clients to find and evaluate lucrative multifamily investment opportunities, with our specialty being finding houses that you can buy for the price of a car. As a seasoned Real Estate Investor and Investment Coach, we help Black and Brown folks and women create wealth and scale their businesses. In this blog post, we’ll discuss the benefits of a multifamily portfolio, and look at options you can use to buy multifamily when your funds are on a diet shall we say, and seed capital is limited. If this scenario sounds like you, read on to learn more! THE MANY BENEFITS OF MULTIFAMILY PROPERTIES A Quick Way to Scale Your Portfolio: One of the biggest benefits of buying multifamily properties is that it allows you to increase the number of units that you own quickly, and often, at a lower cost per unit than buying each unit as a single-family property. A larger number of units allows you to spread fixed costs such as bookkeeping, legal fees, and marketing over a much bigger base. Additionally, the amount of time required to grow a portfolio from one unit to ten units is significantly more when growing through only single families versus multifamilies. Diversification of Risk: Another benefit of multifamily properties is that they can lessen the cash flow risk of your portfolio. As an example, if you own and rent out a single-family home when the home is vacant, it is 100% vacant, unless you are renting out a room or other area of the house on a short-term basis. The all-or-nothing risk to cash flow that comes from single-family properties can cause owners to face financial hardships when their unit is vacant for an extended period. Multifamily properties, on the other hand, have multiple units, which decreases the risk that every unit will be vacant at the same time. As such, there’s a much higher possibility that there will be positive cash flow at some point of every month for multifamily, particularly if the multifamily has five or more units. This risk diversification can help in ensuring that the loan used to buy the property can be serviced without interruption Economies of Scale: In much the same way that buying groceries at a wholesale store can lower the per-unit cost of each item, likewise a large multifamily property can increase your buying power and lower the per-unit cost of management and maintenance items. Property managers, as an example, will be more likely to offer you a discount if they are managing 20 of your units, all under one roof, than 20 separate single-family homes. Twenty apartments in one building mean that a dedicated leasing agent and handyman can be tasked with working at one location rather than traveling among multiple properties and learning the peculiarities of each. Likewise, electricians, plumbers, and other contractors may offer more competitive pricing for the security of having one large apartment building account versus multiple small accounts. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort So now that we have a sense of some of the benefits that a multifamily property offers, let’s dive into exactly how we can go about buying one on limited funds · AN EQUITY SHARE INVESTOR: THE KEY TO SUCCESS An equity share investor is someone who takes an equity interest in your property in exchange for funding a percentage of the acquisition costs and major repairs. As an example, if you strike a deal with an equity share investor to invest 30% of the costs to buy a $200,000 triplex, or $60,000, then the equity investor would be entitled to 30% of the rent on the triplex. In this regard, shared equity arrangements are like partnerships. One difference, however, is that shared equity agreements often have a limited time period, for instance, five years, after which the equity share investor will look to have their percentage interest purchased by the owner, at the presumably higher market value of the property in year five. Because shared equity investors own a percentage of the equity in your property and are recorded as owners on the deed and in tax records, it will be critical to work with an experienced attorney to document this transaction properly. · GET A LOAN FROM A FAMILY MEMBER OR FRIEND – A PRIVATE MONEY LOAN Private money lenders are lenders who are private individuals. As such, a private money lender can include your family member or a friend. If you lack the funds for a multifamily property and share common business values with a friend or family member, then you may want to explore having them serve as an official lender for your project. A private money loan with a close family should be treated just as seriously as it would be with a third-party lender: credit checks should be performed, and loan documentation and a payment schedule should be developed. The benefit of working with a friend is having a built-in sounding board to discuss issues or opportunities. · CONSIDER BUYING
HELOC PROS AND CONS YOU NEED TO KNOW
The housing market is on an upswing with prices climbing higher, driven by the twin forces of inflation and demand. Which begs the question: can you still Buy a house for the price of a car? Absolutely! On any given day there are hundreds of single-family homes, and even some viable multifamilies, listed for $60,000, $50,000, and even $40,000. At MY SMART COUSIN, we teach clients, especially Black and Brown folks and women, exactly how to evaluate and buy these properties, as well as how to start or scale their business and build their finances. As a successful real estate investor and real estate investment coaches, we help clients make the right choice, based on their present circumstances and goals. THE VALUE OF A HELOC If you’re a homeowner, you know that having a home equity line of credit (HELOC) can come in handy. A HELOC is like a credit card connected to your home’s equity – it’s a great way to borrow money when you need it. But before you decide if a HELOC is right for you, be sure to weigh the pros and cons. Here are some things to keep in mind: WHAT IS HELOC AND HOW DOES IT WORK? HELOCs are a great way to get access to money without the hassle of applying for credit cards or other personal loans. You can use your home equity line for anything you want, but there will always be interest charged so it’s important not to use your HELOC like your own personal ATM! HELOCs work like credit cards. You can use your home equity line of credit for both home-related renovations and repairs and non-home-related items like paying off car notes, credit cards, or other expensive debt. Since HELOCs are attached to your home, the cash you drawdown is essentially a second mortgage. Meaning that once you draw on your line of credit, you have two mortgages outstanding on your property instead of just the one you started out with. This point is worth paying special attention to as your house itself is at risk if you default on your HELOC. For those who are considering a HELOC while heading towards or are already in retirement, an emergency fund might make sense to add an extra buffer of protection and ensure that you can repay your HELOC. THE PROS OF USING HELOC TO FUND HOME IMPROVEMENTS OR OTHER EXPENSES · LOWER INTEREST RATES HELOC interest rates are much lower than credit cards or personal loans. The reason is that while credit cards are unsecured, relying solely on your promise to repay, HELOCs are secured by your home. HELOC loans often also have an interest-only component to them, allowing you to pay just the interest for as long as ten years before having to repay the principal. The interest rate is variable rather than fixed, so drawing on your HELOC during high-interest, high-inflation periods is less optimal than under low-interest rate and inflation climates. But that said, under certain conditions the interest payments on a HELOC are tax-deductible, helping to lessen the sting of high rates. · FLEXIBLE AND ADAPATABLE The greatest advantage of HELOCs is that they are flexible and able to accommodate your needs. Unlike a loan, a line of credit, once approved, sits in standby mode, giving you the convenience of having it available without the obligation of having to use it. Since HELOCs are approved for a ten-year period, the line of credit serves as a guaranteed secondary source of funding for ten years, should you need it or choose to use it. · USE OF MONEY Ideal uses for a home equity line of credit are saving and investing money. On the savings front, you can use your HELOC to consolidate debt or pay off more expensive loans. On the investment front, a HELOC can serve as seed capital to start a new venture, buy stocks or other investments, or buy an investment house for the price of a car. You are also allowed certain tax benefits if you use a HELOC for home renovation. · THE APPROVAL TIME The approval time for a home equity line of credit is very short, on the order of a couple of weeks, which means that you can get your finances in order and launch your investment or debt repayment plan much faster than if you were to apply for a business loan or personal loan. · FEWER ADMINISTRATIVE COSTS The HELOC application process is much more affordable than other loan applications. There may be some additional charges which have to be paid, but these are minimal in comparison with traditional loans that require high processing fees. THE CONS OF USING A HELOC TO FUND HOME IMPROVEMENTS OR OTHER EXPENSES · FLUCTUATING INTEREST RATES One of the most important factors to consider when applying for a home equity line of credit is whether it has a variable interest rate. Most HELOCs have some type of variable-rate feature, which means that the interest rate could increase over time. · COLLATERAL A HELOC requires that you own your property. You do not need to own it outright, you may have a mortgage on it already, but you can’t obtain a HELOC if you rent the property, for instance. The reason is that the collateral for a HELOC is the property itself. The line of credit available for a HELOC is usually capped at 90% of the equity you have in the home. Using an example, if your home is worth $200,000 and you have a mortgage of $100,000 on it, then your equity in the home is $100,000. A 90% loan to value ratio means that your HELOC would be $90,000. · HIDDEN FEES AND CHARGES Your lender may charge hidden fees if you cancel or terminate your HELOC. In some cases, the bank will bill an amount even when there is no balance owed at all. As always, it pays to read the fine print before taking out any loan because it could cost more than expected in unexpected expenses. · THE TEMPTATION TO MAKE ONLY MINIMUM PAYMENTS When you take
Long Term Rentals or Short Term: Which Strategy Would You Choose?
One of the great benefits of being a homeowner today is that you have the opportunity to make money on your property in two ways. The first way that most everyone is familiar with is an appreciation of the home’s value. While we all appreciate our home because it provides a roof over our heads, we don’t mean that kind of appreciation. We mean the kind of appreciation that happens as prices rise. Home prices generally rise with inflation. While inflation has been a sizzling eight percent of late, over the past 60 years it has averaged a little under four percent. At that rate, it would take approximately 18 years for your home price to double. Meaning, that unless your neighborhood suddenly becomes the place to live, or, our personal favorite, unless you buy your house for the price of a car, you’d better pack your patience when it comes to realizing the appreciation value of your home. The second way realizes a return on your house is by renting it out. And the good news is, that the range of rental options is increasing every year, allowing you to create a structure that works for you. Given these two methods of earning a return on your home-sweet-home, it pays to educate yourself on the numerous factors involved when buying a property, so that you can take advantage of both avenues. My Smart Cousin can help you figure out how best to wring appreciation and rental value from your current home, or help you find a house for the price of a car that has a high appreciation and rental value. If you’re a real estate investor focused on renting out your home, something you’ll need to decide early on is if you want to offer your property as a long-term rental or a short-term rental. Both strategies have their pros and cons, so it can be tough to decide which one is right for you. In this post, we’ll take a look at the advantages and disadvantages of each strategy, so you can make an informed decision about which option works best. A BRIEF INTRODUCTION · LONG-TERM RENTALS – In most jurisdictions, when you lease a property for more than one month (30 consecutive days to the same person), the rental is considered a long-term rental, and is regulated under landlord and tenant laws. The one-month rule holds whether you rent the entire home or just one room in the home. Likewise, the interpretation applies whether the tenant pays for utilities or does not explicitly pay for utilities (that is, you charge a room rate with no language in the contract regarding utilities). If the tenant doesn’t live at the home full time but has a one-month or longer contract, or, if you have permitted the tenant to store their belongings in the home while not ‘living’ there, the one-month rule would likely still hold. As such, if your intention is to rent out your home or a portion of it on only a short-term basis, then ensure that the contract and tenant occupancy match this intent. SHORT-TERM RENTALS – The best alternative to a hotel is a short-term rental. And in fact, many guests prefer staying at a home (either renting the entire home or just a room or sofa) rather than booking a stay at a hotel. Short-term rentals can be an excellent way for a guest to experience a city in an authentic way, can be more comfortable than a home, and are often more affordable. One of the biggest attractions of a short-term rental home, however, is that the guest can make use of private indoor space as well as outdoor space. If you have a balcony or lovely yard, this can place you at the top of the list for out-of-town and local guests. HOW DO YOU DETERMINE WHICH OPTION IS BEST FOR YOU The decision to use a property for either short-term stays or long-term rentals comes down to one important question – which option works best for you— your lifestyle and way of life? By considering the pros and cons of each option, you can make more informed decisions about how best to fit this investment into your plans. THE PROS AND CONS OF LONG-TERM RENTALS ADVANTAGES A CONSISTENT CASH-FLOW – Long-term tenants are perfect for those landlords who want a consistent cash flow that they can depend on. With a high-quality, long-term tenant in hand, you have a roommate who can help you pay for the expenses of your home. MINIMUM TURNOVER – If you hate the idea of a new person coming to stay with you every day or week, then a long-term structure allows you to minimize turnover. Less turnover not only minimizes the disruptions from revolving-door roommates but also cuts down on paperwork— from the marketing promotions that need to be done with a short-term rental, to the increased bookkeeping from tracking multiple transactions. UTILITIES – Unlike hotel guests or guests in a short-term rental property, long-term tenants will not be surprised when you tell them that they must pay a percentage of the utility bills. Water, electric, and gas bills can spiral out of control when you don’t see them or have to pay for them. Long-term tenants or roommates help keep these expenses under control. · DISADVANTAGES PROFIT MARGINS – A big disadvantage of long-term rentals is their overall profitability. Profits for long-term rentals typically are lower than for short-term rentals because short-term rentals charge a higher daily rate. A condo that is renting for $1,500 a month in an urban neighborhood, for instance, means that if the $1,500 were paid on a daily basis, the cost would be approximately $50 a day. On the other hand, finding a short-term rental in an urban neighborhood for $50 a day, for an entire condo, would be extremely rare indeed. CONTROL OVER THE PROPERTY – With a long-term tenant, there is much less privacy and control over the property, as you’ve rented out a room, for instance, to someone else, who has the right to stay in the house
SHOULD YOU HIRE A REAL ESTATE CONTRACTOR? IMPORTANT TIPS FOR HOUSE FLIPPERS
With housing demand still running high throughout most of the U.S., there are many opportunities for current and aspiring investors. Buying an old house that needs some updating can be very profitable if you know what to look for. And Buying a House for the Price of a Car, doubly so! When flipping a house, there are many important decisions to make. One of the most important is whether to hire a contractor or do it yourself. While on the face of it, it seems cheaper to do it yourself, there are a number of trade-offs and considerations to keep in mind. At MY SMART COUSIN, we help you build wealth and Buy a House for the Price of a Car by being your Real Estate Investment Coach. In this blog post, we’ll go over some tips for hiring a Real Estate Contractor. So, whether you’re just starting or have been flipping houses for years, read on! WHAT IS A RESIDENTIAL REAL ESTATE CONTRACTOR AND WHAT DO THEY DO? When you’re looking for a contractor to repair or rehab your investment property, you will most likely need to hire a residential real estate contractor. Residential contractors also called Home Improvement Contractors in some states, will manage and perform the overall renovation work for a residential property. The licensing, certification, and insurance requirements for residential contractors vary from state to state, so you will want to check with your state’s department of labor and industry for a list of registered contractors. A real estate contractor is responsible for making recommendations, identifying the need for additional specialized contractors (for instance, plumbers or electricians), and obtaining any required permits for the renovation and construction work. A real estate contractor can also be a great resource for identifying financing options, providing input on what’s hot in housing design, and discussing housing market trends in the city or neighborhood of your investment property. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort If you are unsure of where to find a capable contractor or how to evaluate them, a Real Estate Investment Coach such as My Smart Cousin can pay dividends in conducting detailed due diligence, providing a written assessment, and helping you to negotiate a strong contract. HOW TO FIND THE RIGHT REAL ESTATE CONTRACTOR FOR YOUR FIX & FLIP PROJECT? Flipping houses is not an easy task and requires patience to complete. Finding the right contractor can make all the difference between a house that is renovated quickly and with quality workmanship versus one that is always ‘almost done’ according to your contractor and yet looks nowhere near so. As such, it pays to invest time and do your research at the front end to help ensure a smooth renovation process. The list of challenges may seem long and daunting when hiring a new contractor. Before committing to a neighbor’s handyman or throwing your hands in the air and choosing the first person who calls you back, remember these tips: · When hiring a contractor, you must ask for references from people who know the contractor well and can give an honest assessment of their workmanship. Call at least three of the references, don’t satisfy yourself with just one. Also, conducting a little bit of detective work in terms of searching for online reviews regarding your potential contractor can shed light on any issues. If a contractor is unwilling or unable to provide you with references, you should think long and hard about hiring them. · Punctuality, both in terms of showing up to the job site on time and putting in a full day’s work, and completing the job on or ahead of schedule, are critical determinants when evaluating contractors. For Flips, it’s especially crucial because you need assurance that your house will be ready during key market windows such as the all-important spring and summer months when families are looking to move. The best way to make sure that your contractor values your time and deadlines is to make payments, including incentives and penalties, that are based on firm dates and specific milestones. · When you’re ready to hire a contractor, don’t let price be your pone and only guide. Yes, price is important, but the old saying of being penny-wise and pound-foolish is particularly so when it comes to hiring a contractor. It pays to hire a contractor who is licensed and insured rather than the cheapest vendor who might be unlicensed and/or uninsured as licensing and insurance-speak to the credibility and additional investment that the contractor is making in their business. · When negotiating the terms of the contract, ensure that you make payments for completed work rather than for mobilization and other forms of advance payments. Proof of completion can take place through a video, but an on-site walkthrough by you is best. If possible, seek to pay for the materials, based on receipts, to ensure that profit is not calculated on these. Also, when the job is completed, if you have paid for the materials, then any leftover materials belong to you and as such, you should store them so they may be used for future repairs or renovations. · Contractors are in very high demand. To ensure that your contractor completes your project rather than leaving you high and dry when another one comes along, have your final payment for the completed project be at least one-third and preferably half of the total project cost. Final payment of only ten percent or fifteen percent of the project cost might cause your contractor to continuously delay completion. HOW TO WORK WITH YOUR CONTRACTOR DURING THE RENOVATION PROCESS? The working relationship between an investor and their contractor can be amicable, but it takes time and determination on the part of both parties. Your goal in creating a constructive working relationship with your contractor is a relationship that is friendly but business-like, with expectations regarding the product, services, laborers/crew, timetable, price, deposits, materials, and liabilities clearly spelled out in writing. Communication, and really, over-communication, goes a long way in heading off
WHAT IS A TAX LIEN: DEFINITION AND FAQS
Investors are always on the lookout for new opportunities. Whether it’s about buying a house for the price of a car, investing in foreclosures, or purchasing property in tax lien auctions, there are strategies and on-ramps for virtually every investor. Paying property taxes, often assessed at the city and/or county level is one of the most important responsibilities of a property owner. Failure to pay can lead tax authorities to place a lien on the property, seize it and auction it if not paid in full. And if your investment property pays for city-owned and operated utilities such as drinking water, stormwater, or sewer services, those entities have the same attention-getting right! So let’s dive into what exactly is a ‘Tax Lien’ so that you can avoid it when it comes to your property and consider it as an avenue for investment properties. WHAT IS A TAX LIEN? A tax lien is a legal claim, usually filed by a federal government agency such as the Internal Revenue Service (IRS), or a county or municipal agency such as a local taxing authority, against the property of a delinquent taxpayer. While on the face of it, it may seem like the purpose of the lien is to take your home sweet home, its actual purpose is to obtain payment of the taxes owed, in much the same way that a mortgage lender will exercise their lien against a property if mortgage payments aren’t made. If you have a tax lien against your property, it’s important to take action to clear it up as soon as possible. Ignoring the problem will only make things worse. Here’s what you need to know about tax liens and how to deal with them. WHAT DOES A TAX LIEN MEAN FOR YOU AS A TAXPAYER OR INVESTOR? If there is an outstanding debt such as property taxes or utility payments owed to a government entity, the entity has the right to place a lien against the property to satisfy the debt. However, just as mortgage lenders are not able to immediately sell a property upon the first missed statement, likewise government entities must see several missed payments, typically three years in the case of residential properties and five years in the case of commercial properties, before filing a security interest against the property. HOW DO YOU GO ABOUT FINDING OUT IF THERE IS A TAX LIEN FILED AGAINST A PROPERTY? To find out if there is a tax lien filed against a property, perhaps one that you are interested in as an investment, or your own property that you are concerned about, you can call or visit the County Clerk’s office and check the tax records. Online images of these documents are also available as well as printed copies at the Clerk’s office, for a fee. In the case of a federal tax lien, you can contact the IRS’s Centralized Lien Unit or visit their website for information. beylikdüzü escort bayan, gaziantep escort, ataköy escort, esenyurt escort, seks hikayesi, kayseri escort, şişli escort, beylikdüzü escort, beylikdüzü escort WHAT ARE THE CONSEQUENCES OF HAVING A TAX LIEN FILED AGAINST YOU? If a tax lien is filed against your property, one of the biggest impacts will be on your ability to sell or refinance the property. As another entity essentially has a stake in the property, you are unable to sell it, obtain additional lines of credit against it or change the current financing terms on the property without the approval of the lien holder. HOW DO YOU GO ABOUT REMOVING OR DISPUTING A FILED TAX LIEN? One of your first steps if you find yourself with a lien placed against your property is to contact an attorney specializing in tax liens. The IRS or other government entity that has issued the lien will send you a notice of the amount you owe and make a demand for payment; the role of the tax attorney will be to evaluate your records with you to determine if there are any errors in the amount or in the process that was followed by the government authority, and dispute the demand if so. And should the amount and demand request be accurate, the attorney can help you negotiate a settlement, which could include payment of a much lower amount through the waiver or reduction of penalties, interest, and back taxes. FAQs ON TAX LIEN – READER’S MOST COMMONLY ASKED QUESTIONS ANSWERED WHAT ARE TAX LIEN CERTIFICATES? Municipal governments often prefer not to take on the role of selling properties that are behind on their taxes. To avoid being the seller while still obtaining payment on the amount, the municipality will create a tax lien certificate equal to the amount that is owed. The tax lien certificate will serve as a tool or instrument offered for sale, via an auction, by the local municipal government, to collect payment. Proceeds from the auction enable the municipality to recover unpaid property taxes, in this case, not from the owner, but from the auction participants. The winning auction bidders then become the owners of the security interest in the properties, and with it, take on the responsibility and the cost of foreclosing on the property after three or more years of unpaid taxes or utility bills by the property owner. Tax lien certificates also entitle the certificate owner to the interest payments on the unpaid debt, thus functioning in much the same way as a bond. WHAT IS THE DURATION OF A TAX LIEN? Ten years is the basic limitation set by the IRS. If the defaulter pays the lien in full or as stated in a negotiated settlement agreement, then the IRS will remove the lien and its right to seize the property. The IRS is required to remove the lien within thirty days of the taxes in question being paid. WHAT IS A TAX SALE? The sale of property that has unpaid taxes on it will often occur through a tax lien auction, where the
Secured vs. Unsecured Credit Card
Key Takeaways A secured credit card requires the cardholder to make a security deposit, whereas an unsecured credit card doesn’t require a deposit. A good credit score is not required to be approved for a secured card, but a good credit score will determine your interest rate and other factors for a secured credit card. Both credit cards can be a great tool for building a positive credit history and improving your credit score; each has its advantages and disadvantages. According to the Consumer Financial Protection Bureau, the government agency responsible for protecting consumers’ financial credit interests, more than 175 million Americans have a credit card. Although there is a common basis of what a credit card is, there are as many flavors of credit cards as there are credit cardholders. For example, some cards give points toward hotel stays or airline miles with every purchase. Other cards reward spending with cryptocurrency or contributions to a stock market account. However, one of the biggest differences between credit cards is whether the card is secured or unsecured. What is a Secured Credit Card Secured credit cards were created to enable those with less-than-stellar, limited, or no credit history to obtain a credit card. Although secured cards account for less than one percent of the credit card market, they play a vital role in helping build a positive credit repayment record. Therefore, they serve as an onramp to obtaining an unsecured card. Recommended Read: How Secured Loans Work The security behind a secured card is cold, hard cash. Your cash, that is. A secured card requires a security deposit, typically in the minimum amount of $200, to the bank that issues you the credit card. The cash deposit will then set the lower bounds of your credit limit. So how does it work? First, you must apply and be approved by a credit card issuer. Then, after approval, you deposit a set amount of money for the security deposit to back up the card. So, if your deposit was $200, the issuer will provide you with a credit limit of at least $200. Depending on your credit score and history, the limit could possibly be higher. Benefits of a Secured Credit Card In addition to a secured card giving you access to the flexibility of plastic in an ever-growing cashless economy, it provides these two other important benefits: a lower cost of credit and an easier approval process.Lower Fees Credit rating agencies classify FICO scores of 580 to 669 as ‘fair’ or ‘average.’ Approximately one-third of all Americans have FICO scores that fall within that range. Recommended Read: Tips on How To Improve Your Credit Score At the ‘average’ score level, unsecured credit cards can come with numerous fees, including a one-time fee to open the account, an annual fee for the open account, and a monthly fee to service the account. These fees can leave you paying $150 or more to open the account in year one and an ongoing $100 or more in years two and beyond to continue the account. And, of course, these costs are before you consider any late payment fees, which also tend to be higher. Secured cards, however, typically have no annual fee, or a relatively low one ($35-$50), and no or a minimal monthly maintenance fee. Doesn’t Require a Good Credit Score One of the top advantages of a secured credit card is that your FICO score tends not to significantly influence the credit decision. Why? If you miss a monthly payment towards your balance, the card issuer will apply a portion of your security deposit to cover the payment amount due. While it is possible to obtain an unsecured card with less than perfect credit, fewer options exist for those with FICO scores of less than 580. A must if you have a secured credit card is to make sure you never miss a monthly payment. Therefore, once you have built a record of consistently paying your credit card bill on time, you can ask your card issuer if they offer the opportunity for you to “graduate” with an unsecured card. If you are able to “graduate,” a typical benefit is refunding your deposit and increasing your credit limit. Cons of a Secured Credit Card A secured credit card may be a good option for someone with no or poor credit history. Since your credit score is not a dominant deciding factor for approval of a secured card, a security deposit is required. However, the security deposit can pose a challenge for some who are already struggling to save funds. Additionally, if you default on your credit card, the credit card issuer can take the security deposit that you’ve posted against the card. What is an Unsecured Credit Card Unsecured credit cards are held by 99% of all credit card holders and are generally referred to simply as “credit cards.” Unlike secured cards, an unsecured card does not require a security deposit to back it up. Therefore, the credit card issuer looks closely at your FICO score and other credit history indicators, and repayment ability when deciding on approval or denial of your credit card application. Pros of an Unsecured Credit Card The most significant benefit of an unsecured credit card is access to a 30-day revolving line of credit with no collateral requirements. The line of credit can be valuable for many reasons, such as quickly paying in the case of an emergency or unexpected expense arises. Additionally, unsecured credit cards offer numerous incentives and rewards, such as: sign-up bonuses travel points spending discounts cashback on your card; sometimes as much as five percent 0% percent interest rates during an introductory period; different cards have different time periods, but the introductory period is usually 15 or 18 months 0% percent interest rates offered on balance transfers the ability to borrow cash from the credit card in the form of a cash withdrawal Cons of an Unsecured Credit Card Although there are many benefits, there