F2G Property Solutions LLC

July 11, 2018 0

Selling a Home: How to Choose Between 5 Different Offers

Selling a home? Which offer will you accept?

When you put your home up for sale you’ll attract all types of offers. The most notable difference between these offers is normally financing, and how buyers intend to pay for their purchase. So what types of bids might you get? Which are the best choices for your situation?

1. FHA Home Loans

FHA loans have become incredibly popular over the past few years. These are government backed loans, similar to VA and USDA loans. These loans are known for low down payments, and lower credit requirements. However, these loans are also prized by those simply desiring lower interest rate loans as well. The biggest challenge with FHA mortgage loans is the inspection and property approval requirements. Property condition requirements can be far more stringent on these loans. If your property isn’t in great shape this can be a real problem. Condominium projects also must be approved in order to be eligible. Many aren’t. In fact some counties don’t have any FHA approved condos.

When FHA offers are good: You are in an area with a high presence of lower credit scores.

When FHA offers are bad: Your property has major repair needs, or the project is not approved by FHA already.

2. Conventional Loans

Offers contingent on conventional loans, and with conventional loan pre-approvals may suggest stronger buyer-borrowers, but that isn’t always the case. Credit and down payment requirements on these loans have been dropping. In fact, they can now allow a lower down payment than FHA home loans. However, these loan programs are not as restrictive on property condition, and do not require projects and buildings to be ‘approved’. However, there will still be minimum requirements. The property will still need to be livable and free of structural issues. Condominiums will still need to complete a questionnaire to verify their financial stability.

When conventional offers are good: It is a good property, in a stable neighborhood.

When conventional offers are bad: There may be roof or foundation issues, major repairs, or the community has potential legal or financial issues.

3. Cash Home Buyers

Cash buyers can be very attractive to home sellers. A cash buyer typically needs less time to close. There is no uncertainty or wait and see gamble as to whether the mortgage lender will come through or not. They may or may not purchase the property as-is, in any condition. Of course in return for these perks cash buyers will typically expect a discount.

When cash offers are good: When you absolutely need to sell quickly.

When cash offers are bad: An offer like this may be less attractive if time is not an issue, and your priority is simply the highest price.

4. Owner Financing

With mortgage lenders still being tough to work with more buyers are looking for owner financing deals. This is even true of well qualified buyers with good incomes and credit who just don’t want to pay extreme lender fees or deal with headaches at the bank. In this example we are specifically talking about seller held mortgages. These arrangements can be highly attractive for sellers. They can create ongoing streams of income, and great returns on capital. Again there is no guess work with conventional lenders. Any property repair issues can normally be negotiated, but don’t need to hold up a sale. This is a fast transaction. The downside is that you don’t get all your cash out immediately. It can also be tricky if you still owe money on the property yourself.

When owner financing offers are good: You need an expedited sale and top dollar, and planned to reinvest your capital anyway.

When owner financing offers are bad: You need all your money right now.

5. Rent to Own

There are multiple ways to structure a rent to own deal. This is a type of owner financing, yet mainly differs in that the transaction starts as a lease, with the option to buy later on.

When rent to own offers are good: You want top dollar, an income stream, and don’t need a lump sum of cash now.

When rent to own offers are bad: You are unsure you can fulfill your agreement to sell later on.

Summary

The above are all common types of offers home sellers may receive in the current market. What’s right for you is really down to your individual circumstances, financial needs, and priorities. In addition to the above sellers should also weigh each offer on the whole picture, including; contingencies, terms, closing dates, price, and net proceeds.

See original at https://www.cthomesllc.com/2016/03/selling-a-home-how-to-choose-between-5-different-offers/

Angela Cox

Home Selling, Uncategorized

July 11, 2018 0

4 Things To Consider When You Are Selling A Property

There are a handful of subtle things you should be doing if you are selling your property. Some of these are common sense but all of them can have a tremendous impact on your bottom line. Even in a seller’s market, it is not enough to list your home and wait for the offers to roll in. If you overplay your hand, buyers will simply move on to the next property. Doing excellent rehab work or making appropriate upgrades is not enough. You need to always present your property in the best possible light. Here are five things you need to consider if you are selling your property:

Use An Agent You Are Comfortable With. There are a lot of great real estate agents out there. To complete a successful sale, you need to choose the right agent for you and your specific propert

y. A good buying agent may not be the best at listing properties. An agent in one market may not be as knowledgeable about the market your property is in. You need to treat your listing agent search like you would anyone else on your real estate team. Don’t be afraid to ask them how well they know the area and how they intend to market the property. Commission is always important but may not be the most important factor. The goal is to get the property sold at the highest price. If you have to pay an extra half a point commission to get that done, it will be worth it in the long run. You should be able to feel if you and your agent are a good fit after talking with him or her a few times. You and your agent will communicate dozens of times throughout the entirety of your transaction so it is therefore important that you are comfortable with whomever you end up working with.

List At The Right Price. One of the most important things you can do to procure a quick sale is list at the right price. Not only will this help you sell quickly but it can also help you sell for the maximum price. Buyers and real estate agents are often influenced by the initial listing price. By pricing higher than the market suggests you run the risk of losing interest quickly. Instead of generating a buzz and creating a multiple offer situation, your property will most likely sit vacant while cheaper houses are being sold. With a high list price, you probably won’t get the showings you anticipated, and within a few weeks, you will be forced to make a decision about lowering the asking cost. Do you lower the price or hold steady and wait for buyers? Neither option is ideal. If you lower your price, it might be viewed as a sign of desperation and you can expect below asking price offers to come in. On the other hand, If you hold at your price, you could easily go weeks or months before you have a showing. The best option is to list at the right price from the start. This keeps your property fresh and real estate agents and buyers interested.

Perfect Conditions Every Showing. Listing at the right price helps but it may not be enough to get an offer. When listing your home, you need to put yourself in the buyer’s shoes. Walk the property through their eyes. Whatever your first impression of the property is, the odds are, it will be the same for potential buyers. Start with the exterior of the home. For as long as your home is on the market, you need to constantly update the grass and landscaping. You can’t have overgrown shrubs or brown grass. The moment a person steps inside the property, the first impression needs to be strong. Avoid cooking strong smelling foods the night before you have a morning showing. It is tough to mask the smell of a fishy dinner, which could be enough to drive a buyer away. If the house is vacant, you need to stay on top of the temperature. With the weather warming, the house shouldn’t be too hot. Having a strong heat hit your buyer as soon as they open the door will having them speeding in and out of the showing. First impressions are critical with every buyer. Make sure the property is perfect every time you show it.

Accept The Right Offer. It is important not to be tempted to take the highest offer. Price will always be a strong consideration but there is more to an offer than price. You need to check out the financing, closing date and contingencies. If you accept an offer that ultimately doesn’t close will force you to start the process all over again. There is no guarantee that buyers that were interested in your property weeks ago will still be around. It is quite possible that they have moved on to other homes. Review the pre-qualification letter with your real estate agent. Look at the type of loan they submit and the down payment. From there, you need to review the contract line by line. Are they asking for contingencies that are excessive or unreasonable? Are they looking for a credit or to keep certain items in the property? If the buyer is difficult when submitting an offer, odds are, they will be throughout the process. Only you, as the seller, knows what the final number is that you will accept. The right offer is usually the one that ends up closing in the easiest possible manner.

Selling your property can be confusing and overwhelming at times. Real estate markets change all the time and it is important to do everything right to get the highest possible price.

See Original at https://www.cthomesllc.com/2016/08/5-things-consider-selling-property/

Angela Cox

Home Selling

March 21, 2017 0

How To Find Your Perfect Retirement Investment Property

by Paul Esajian | @pesajian

Rental properties aren’t just a great way to inject your short-term finances with much-needed cash, but they can also offer a path to building long-term financial wealth through streams of passive income.

It’s worth noting, however, that most would-be rental property investors have a few questions: When developing a retirement investment property strategy to build wealth for the golden years, how many rental properties will I need? Better yet, how do I know exactly how much income I’ll need for retirement? And how can I be sure that I’ve made the proper calculations to ensure I’m protected when retirement age comes?

Here’s a quick step-by-step approach showing you the ins and outs of creating a retirement investment property strategy, and making sure you’re more than ready when the time to enjoy the golden years comes.

Retirement Investment Property 101

What is a retirement investment property?

As the name suggests, retirement investment properties are assets in which you derive tangible, passive income — through consistent rental payments from tenants — from real estate you own. Though most people think of rental properties as exclusively single-family dwellings, rental properties that serve as retirement investments can take many different forms: single-family, multifamily, office, retail, etc.

What makes rental properties one of the best retirement investments available is their predictability. When occupied, a retirement investment property provides a steady, reliable source of income you can depend on. Perhaps the most attractive selling point of a retirement investment property, however, is its ability to create a continually profitable asset using somebody else’s money, namely using your tenant’s income to pay off the mortgage of a property.

This isn’t to say acquiring retirement investment properties is an overnight strategy, but by adding one property after another to your retirement portfolio, you can slowly build a lucrative nest egg (without having to pay for nest materials yourself).

Begin With the End in Mind

So how do you determine how many rental properties you need? Well, this will depend on how much income you require over the course of your retirement.

This is figured by establishing three key elements:

How many years of retirement you need to account for (a life expectancy of 85 years is a good benchmark)

How much cash you’ll require each year (80 percent of your current income level is recommended)

How much cash you currently have saved

For example, if you you currently make $100,000 and plan to work until you’re 65 — and have $50,000 saved — your equation would look something like this:

20 years of retirement
MULTIPLIED by $80,000/year (80 percent of your current income)

MINUS $50,000 (money saved)

Which EQUALS 1.5 million dollars needed for retirement

Yikes! Well, certainly that pension fund or Social Security will help knock down that monumental number a bit. Or will it?

A Most Inconvenient Truth

The topic of Social Security is a controversial — and politically-charged — one. All we’ll say on the subject is Social Security should be a supplement to your retirement income, not the primary source of your retirement income.

As the Motley Fool addressed in a recent column, “Social Security is quickly burning through its reserves and scheduled only be able to cover 77 percent of promised benefits beginning in 2034.”

This wouldn’t be so bad if it wasn’t for the fact that, as the Motley Fool reported, 36 percent of American adults over 65 weren’t completely dependent on Social Security. And another 63 percent are dependent (but not reliant) on Social Security, relatives, friends or charity at age 65.

So, how do you combat the possibility that Social Security may not exist in the future? Well, one good strategy is to create a portfolio of retirement investment properties.

Finding Your Magic Number

Discovering how many rental properties you’ll need to retire just requires a bit of simple arithmetic.

Take the amount you need to retire (number of retirement years MULTIPLIED by your desired yearly income MINUS money saved)

DIVIDE that number by the estimated monthly income from each rental unit

Now, of course, this final number will depend on a variety of factors: location of your rental properties, condition of the properties, vacancy rates, etc. But a good rule-of-thumb number is to expect — after you pay off the mortgage of the rental property and deduct taxes, repairs and property management fees — approximately $400-$500 per tenant, from each rental unit.

So, if we take this number and put it into our formula it would look something like this:

1.5 million dollars (Amount we need for retirement minus money saved)

DIVIDED by the number of years in retirement (20)

DIVIDED by 12 (Months in a year)

DIVIDED by $400 (Average rental income per unit)

In doing so, we come up with a much more attainable number of 15.625 (we can round up to 16 just to be on the safe side.) This means your retirement investment property goal is 16 rental units at $400/month.

And this doesn’t necessarily mean 16 rental properties, but rather 16 rental units (meaning we could have a commercial property or apartment complex with multiple properties that help us reach our retirement goals).

Turning a Dream Into a Goal

Using real estate as the basis for retirement income and bringing cash flow to your golden years is not an overnight strategy. Doing so requires dedication, knowledge, time and capital to acquire the real estate needed to establish a healthy retirement investment property portfolio.

But by picking up pen and paper — and doing a bit of number-crunching — you’ll find that mythical goal of learning how to invest for retirement with real estate becomes less like wishful-thinking and more like concrete reality.

Angela Cox

Investing Information

January 31, 2017 0

5 Tips for Selecting a Property Management Strategy

Can You Do It Yourself or Do You Need Help?

Picture of Tips for Selecting Property Management Strategy

By Erin Eberlin

Updated October 04, 2016

The great thing about investing in rental property is that it is not a one size fits all approach. There are options available for those who want to have an active role in management and for those who want to be more passive managers. To select the best management strategy for you, you need to understand your lifestyle and what your goals are as an investor. Here are five tips to help you decide on the best approach.

5 Tips for Selecting a Property Management Strategy

Before you decide which management strategy could be the best fit for you as a landlord, you should do a little self-reflection. You need to evaluate how much time you can, and are willing to, devote to the property, how much experience you have with the various parts of rental property management and your personality. These five tips can help you make the right choice.

1. Distance From Rental Property

How far do you live from the rental property? If you are a quick drive away, it may be easy to visit the property frequently to take out the garbage, perform maintenance, handle tenant issues and collect rent. If you are an hour or more away, driving two hours round trip to take out the garbage may not be the best use of your time.

Your time is valuable. You have to consider the opportunity cost of traveling to the property. You may think you are saving money by doing everything yourself instead of hiring a building superintendent or a property manager, but when you take into consideration all of the time you are wasting traveling to the rental property, you may actually be losing money.

You could be using your time more efficiently to find other investments or discover other money making opportunities.

You should also not immediately discard a potential investment because it is too far away from your current home, even if it is in another state. In these cases, a hands-on property management approach will be unrealistic.

A hands-off approach that involves hiring a local individual or company to handle daily operations can still make the investment possible. You just have to determine if you are comfortable giving over control.

2. Size of Rental Portfolio

How many rental units do you have? It is much easier to manage one rental unit by yourself than it is to manage fifty. The larger your portfolio of rental units gets, the more you may want to consider bringing in outside help.

However, it is not necessarily an all or nothing approach. You can remain in charge of certain operations, while giving over control of other operations that have become too overwhelming.

For example, you have 25 rental units. You feel like you can still manage the paperwork part of management, such as collecting rent, managing leases and screening prospective tenants, but the physical management and property maintenance, such as taking out the garbage, fixing leaky faucets and showing the properties to prospective tenants, has become overwhelming.

In this case, you may not need to hire a property management company, but hiring a building superintendent could be very helpful to you.

3. Level of Skill

You have to be honest with yourself about your strengths and weaknesses.

Organization: Owning a rental property is a business. Successfully managing a business involves a fair amount of organization. For example, you need to know rent collection dates, lease expiration dates, when bills, mortgage payments and property taxes are due, when inspections will take place at the property, when garbage and recycling are collected and even when to change the batteries in the smoke detectors. Quicken Rental Property Manager can help you get organized. However, if you are still all over the place, hiring a property manager may be the best fit for you.
Business: If you are not the most business savvy individual, there are two different approaches: get help, or, learn as you go. As a property investor, you need to have a business plan in place, a strategy for dealing with everyday operations and the all-important exit strategy if you need to get out of the property investing business.
Maintenance: How handy are you? Even if you are handy, are you comfortable fixing any maintenance issues at your rental or would you rather hire a licensed individual to deal with the issues?

4. Desired Time Commitment

Are you more interested in being a landlord or being a rental property owner? If you are working another job 40-hours a week, it could be overwhelming to manage a rental property full time as well.

Either investment strategy is fine, as long as you understand what your goals are. If you like the idea of passively managing the property, more like investing in a stock, then an outside property manager may be the best fit for you. If you like the idea of active management, interacting with tenants and collecting monthly rent, then you will favor a more do-it-yourself approach.

5. Personality

Owning rental property is a great investment for all types of people. However, actively managing the property is not the right fit for everyone. You may be great with fixing all types of maintenance issues, but may have a short fuse when the actual tenant is complaining about the maintenance issue. Consider the following questions.

How Do You Handle Stress? Are you able to deal with unexpected problems? Can you multitask? Problems will come up and they always seem to come up when you are on vacation or during a holiday weekend. Can you stomach this kind of stress or would you rather have someone else deal with it for you?
How Do You Handle Conflict? Are you level-headed or more of a hot head? You will see a lot of tenant turnover if you are constantly fighting with your tenants.
General People Skills: Do you like interacting with people? You may be great at finances, but horrible when it comes to human interaction. Having a middleman between you and your tenants could be a great option if this is your personality type.

Angela Cox

Investing Information

February 24, 2016 1

Technology vs. People Skills: Which Real Estate Strategies Will Win?

The real estate industry caters to independent strategies. For every investor , there is another way to go about
conducting business. Some may prefer to utilize the convenience of
technology while others want to maintain personal relationships. However, for one reason or another, there remains a void between these two independent strategies. Smart investors will figure out how to incorporate technology into their business while simultaneously maintaining the personal relationships that they have worked so hard to create. Others will need to learn this before it is too late. Using the latest technology, in association with establishing lasting relationships, can go a long way in making a business successful.

Programmers, and the venture capitalists backing them, certainly want the real estate industry to be run through advancements in technology. At the same time, a number of the leading industry minds, and young entrepreneurs are dismissing technology as just another tool. So which real estate strategies will prevail over the next decade? The early adopters riding the next wave of technology? Or those taking customer relationships seriously? Perhaps both?

#NewRealEstateTechnology

Tech is invading real estate, and fast. The following advancements in technology have already been incorporated into the real estate industry:

Drones

Highly controversial drones have been flying their way into mainstream real estate applications. They are now being used for enhanced photography, virtual tours, and even property management.

Big Data

As the world becomes a planet of digital natives, more and more data is becoming available to the public. While big data may seem hyped up to many real estate professionals, better data means being able to pinpoint prospects with highly targeted marketing, and give them more of what they want. Theoretically, this means improved real estate marketing performance and ROI.

Curation

Curation remains a popular trend, though its value may be suffering due to larger trends, and the obvious need for originality.

Crowdfunding

Not only is technology creating more efficiency in mortgage lending, it is spawning new financing models altogether. The advantages of speed and streamlining operation technology can increase lender margins, or help keep interest rates and borrowing costs low. One of the largest new developments has been ‘buy to rent’ loans for single-family rental home investors. Crowdfunding goes even further, completely breaking from traditional mortgage lending and having to rely on banks.

Home Search

Home searches haven’t necessarily benefited from new technology much. The big home listing portals haven’t changed much. The many new startup attempts at mimicking these real estate search engines haven’t appeared to gain much traction. The data shows house hunters are still far better served turning to local real estate websites.

Website Design

Web design has changed significantly in the last year; both aesthetically and functionally. HTML 5 has taken over, and both responsive sizing and content is becoming the norm.

Augmented Reality

Augmented reality is rapidly gaining traction. Augmented reality and interactive ads are taking over as the top ads in print and outdoors. Google Glass is now being used on the streets by some real estate companies to coach agents and team members in real-time. Technology is also working its way into improving green building efforts.

Where’s the Personal Touch?

Technology is great. It can make life and business a lot easier, and more profitable for real estate agents, investors, and the companies they work for. However, some entrepreneurial thought leaders and real estate commentators are increasingly highlighting the benefits of offline, and personal connections.

It all comes down to what is best for business, and enabling real estate professionals to stay in alignment with the things they really care about. Efficiency from technology is great. It gets even better when it improves service for home buyers, sellers, and renters. Done right, integrated technology can make management easier, facilitate business growth, ensure sustainability and long term competitiveness, and significantly drive up ROI and profits.

Still, it shouldn’t be a replacement for real interaction and service. Unless this is kept at the forefront of the mind, short term gains will be just that – short term. Winning customers could become far more expensive, and those with the strongest relationships will be those that retain customers and benefit from their referrals.

With this in mind, some real estate professionals and companies have been taking another look at brick and mortar storefronts. However, they are also taking the time to build real relationships. These are all good things. But, unless the same care and attention to caring for customer needs, and wowing them with great service is maintained at all levels of an organization, it may not make much difference. In fact, you might be better off with just a website, instead of allowing poor customer service reps destroy your reputation, and brand.

The latest technology has been helping to blur the lines between offline and online. Perhaps this is the best strategy for real estate companies. Meet each client where they are and interact across multiple channels for efficiency, while still providing tailored, but high quality service.

Angela Cox

Technology

February 24, 2016 0

Real Estate Investing As A Business

“Investment is most intelligent when most business like” – Warren Buffett

If investing is better when conducted most business like, does it mean that more real estate investors ought to be investing in a more businesslike fashion? Should every real estate investor be investing as a business? What does that really mean? What does it look like? Does that limit the types of properties and strategies that can be applied? Where can help and support be found for building a more businesslike property portfolio?

What does Real Estate Investing as a Business Mean?

“Businesslike” investing suggests a less emotional, better organized, well thought out approach to real estate. Definitions of ‘business’ can range from describing a profession, to commerce and trade, to an actual company. All of these definitions likely influence Warren Buffett’s decision to be more businesslike in investing. It has certainly worked for him, and for his own prized real estate investments, and real estate companies. It could mean running a real estate company of some type, owning an investment (which is distinctly different from managing one), or just being more businesslike in every day investment and real estate decisions.

Why Should Investors Approach REI as a Business?

There are many practical benefits of taking a business approach to real estate including:

Scalability
Better true investment decisions
More profitable investment moves
Efficiency in organization
Separating personal from investment finances, assets, and income
Building substantial additional value within a business entity
Tax reduction
More free time

What does Building a Real Estate Business Look Like?

Not everyone envisions building a company and mounting an international conglomerate when they get interested in investing in real estate. So will you need an office, hundreds of staff, and have to go back to wearing uncomfortable suits again?

Most won’t.

Many simply want to generate some extra income, and perhaps build more wealth over the long run. Others aspire to building multinational real estate empires. Yet, what we are really talking about here is approaching investment with a businesslike mentality, and structure. Even for those wishing to go really big, most will find they can now operate a multi-million dollar company from their patios via their smartphones.

However, there ought to be businesslike characteristics regardless of size. This may include incorporation and forming a registered business entity, obtaining business credit and bank accounts, setting up a new business phone number, hiring professional vendors to help out, and having a real estate website.

What Types of Properties can be Invested in as a Real Estate Business?

Not all will incorporate as a C Corp, or LLC. Regardless, of which entity type is chosen, or none is used, every type of property is open to investment.

This may include:

Single-family homes
Small multifamily properties like duplexes, triplexes, and 4 units properties
Apartment buildings
Office buildings
Industrial real estate
Hotels
Retail property
Vacant land and lots

What about Real Estate Investment Strategies?

The same goes for real estate investment strategy. Virtually any real estate investing strategy can be formalized and systemized to create a business model.

These REI strategies include:

Wholesaling houses
Fixing and flipping homes
Acquiring and holding income generating rental properties
Commercial real estate investing
Mortgage debt investing and note investing
Private mortgage lending
Options
Buying, selling and leasing various real estate related rights
New construction

Where can Real Estate Investors find Support in Building a Business?

The majority of new real estate investors may have very little experience in starting and running a real business. So where can they find help in investing more intelligently, and building a real estate business which can produce better returns, and build more wealth over the long term?

Simply relying on out of date books, and trolling online real estate forums may not be well suited for investors that want to invest intelligently and businesslike. Look for an organized real estate course and proven system that has synergy with your big picture goals. Build on this by seeking out a mentor or coaching program which actually offers business building help, or combines both real estate and business.

Is This the Best Approach for Everyone?

Certainly not all investors want to, or are suited to full time investing, or even running a real estate investment business. There is nothing wrong with that. Yet, all can benefit from taking a more businesslike and smarter approach to investment. This applies whether simply renting out your old home, flipping one or two houses a year, or investing capital in real estate startups.

Those that want the best results, with the lowest risk, and see the value in fast tracking to their goals, while avoiding the pitfalls will see the wisdom in educating themselves on this approach to investing, and will incorporate the best elements to suit their personal goals and aspirations.

Angela Cox

Investing Information