Landlord, Protect Thyself!

Landlord First Commandment- Protect Thyself! Almost every landlord would state he is a good judge of character, and with the thorough credit report he does on every tenant, he has nothing to fear. He rents in a reputable area, in a nice building, with good neighbors. However, this attitude is naive. Every tenant has the potential to become enraged with the landlord, and if that tenant knows where you live, you and your family are in potential danger. There are countless stories of tenants "flipping out" over perceived injustice, damaging the apartment, and worse, attacking the landlord or his family. Every tenant has an extending circle of direct friends and family. The landlord will also be involved with a multitude of workers, any one of whom could be an opportunist waiting to take advantage of a too trusting manager. Remember, essential as they are, credit reports do not weed out alcoholics, drug users, or violent tempers, which can all be easily concealed in interviews.While this is intended to give you pause, it is not to scare you into selling off all your hopes of owning rental property. There are steps you can take to optimize your safety. Never give out your address, home phone number, or personal information on your family. Have a PO Box and a separate phone number for any business related communications. For $7 a month, get a separate phone number which forwards calls to your home phone, or for $10/month, get an extra cell phone number on the family plan, with voicemail. Take your name and address off of any group or public directory, and identify your wife who answers the phone as "the secretary" and yourself as the "maintenance manager". Use common sense in dark or isolated places, and always be aware of who is around you. Do not place yourself in vulnerable positions, particularly when you know a tenant is upset with you or others. Having a gun may be useful if you are home, but your dependents may not know how or want to use a weapon. The best defense is a good offense- arm yourself with these simple precautions, and you can deflect a host of potential problems.

Sell Houses Fast using the "SOLD" method!

In today's economy, everyone is running for cover hoping to wait outthis recession before it breaks them. Refuse to participate in thisdownturn! There are smart ways to continue to prosper, sell your housein record time, and keep that necessary cash flow spigot open. Excess inventory and falling market prices can be turned to your advantagewith a very simple system that William Bronchik calls “the S.O.L.D. system. “ This is the system that the best investors use, those 20 % of wealth generators who seem to consistently outperform everyone, even in the worst times. Any house can be sold at a fair price within 30 days using this system- even now. The basic principles of the SOLD system are:
S- Salesmanship- how to best market and present your property and close the deal
O- Owner Financing- many people don't have large down payments available, but may be able to buy if the owner accepts part of his equity in payments rather than large cash closings. A larger pool of potential buyers obviously increases the likelihood of a sell!
L- Lease/Options - rising interest rates have resulted in greater rental enthusiasm, with the benefit of higher rental rates. You can lease/option to avoid broker fees and pay no commission upon sale.
D- Dressing it Up- Staging gives your propertythe extra "wow factor" to promote quick sales for the optimal price. Confidence is often the key to success.

Let me help you make your property profitable despite any gloomy economic outlook!

Boys and Their Toys

Enquiring minds want to know? Do men really use their gigabyte better?With the growing use of technology in all business endeavors, do menplay the game better? Let's add a few more idioms.... do men do, andwomen just talk about it? Is it really a man's world?Since 60% of the real estate agents are women, are they at adisadvantage with the computer age? Men, typically described as moreanalytical, and "left brained", more logical and objective, are oftenseen as surpassing women in their use of modern technology, internet,and web based marketing. This is particularly compelling when bumpedup against the research that online marketing dollars spent correlatedirectly with the amount of revenue produced. Surprising to some,research does not indicate a significant difference in how men andwomen use computers in business applications. Men may indeed play thegame, but women do seem to know the score, and are as savvy as men inusing computers to their advantage in the real estate world. Maybe thenew idiom in the real estate world should be "behind every successfulwoman is a surprised man." But the critical factor to remember isonline marketing works, and it is an important tool in any real estate arsenal.

More Thoughts on the Bottom

The housing crash affected markets across the country with cities that had been resistant, like San Francisco, falling spectacularly in the past year by a whopping 32% or more. Most analysts present a pessimistic picture, but seem to believe housing prices have bottomed out in many parts of the country. Prices are at the level seen around 2003, but would need to fall to the levels of 2000, to go back to pre-bubble prices. The silver lining is of course that it is a buyer's market, and there are great deals out there. If the economy rebounds soon, with inflation ignited by the stimulus package, then home prices will rise again. However, albeit with the current very low mortgage rates, home prices compared to average earnings are still higher than they were at the height of the 1989 property bubble. When that bubble burst, it took 8 years for market recovery. This current crash is larger, and the recovery could be respectively longer.
What kind of loan would a savvy investor in our area need in order for their rental to cashflow? The chart below shows the current average rental rates in King and Snohomish counties, as recorded by The Department of Housing and Urban Development's 2009 Fair Market Rent Documentation :
Efficiency-$720
One-Bedroom-$820
Two-Bedroom-$987
Three-Bedroom-$1,395
Four-Bedroom-$1,704

The chart below shows the loan that could be supported by the average rents above:

Payment* Sales Price Loan Amount Cash At Closing*
$1,700.00 $460,000.00 $345,000.00 $122,907.36
$1,500.00 $407,000.00 $305,250.00 $108,971.68
$1,300.00 $355,000.00 $266,250.00 $95,298.93
$1,100.00 $300,000.00 $225,000.00 $80,837.36
$ 900.00 $245,000.00 $183,750.00 $66,375.80

Most investors will be looking for returns that do not require such a large cash outlay upfront. In that case, housing prices still have a ways to fall!

Is this the Bottom?

Now may be the brave loner's window of opportunity in snatching up great real estate, at bargain prices, with record low mortgage rates, as economists predict that we are already into a “jobless” economic recovery. First time buyers have the bonus of an $8,000 tax credit, which is currently scheduled to expire next month. Some markets are showing a cautiously optimistic uptick in activity and volumes are up at both the low end and the high end of the market.Both the Master Builders Association and the National Association of Home Builders predict continued depressed prices until a turnaround perhaps by the end of 2009 and the first two quarters of 2010. Investors would be wise to step up their offers now….

I Buy Houses!

You think you are ready to sell your home, but you are tired of the looky-loos who parade through with no intention to buy. You don't really want to invest in improvements that may or may not increase resale value, and you are terrified of the nightmare of buyers backing out when you have a binding contract with the perfect home, and now are watching your dreams tumble away. Perhaps your situation has suddenly become dire through the threat of foreclosure, or the trauma of divorce. You are panicked as you may have to struggle to pay two mortgages when the promised sale dissolves. This does not have to happen. Your old options of selling your home yourself, or using a realtor with all those fees, have now been made obsolete by the perfect new solution- I will buy your home outright, as is, for a fair price. I am a serious buyer. No fees, no repairs, easy sale, no hassles, immediate cash.....I am an investor who prefers to deal in real estate rather than stocks and bonds. I eliminate your stress by assessing your goals and situation, offering quick sale with no fees, expert handling of all paperwork, and paying all closing costs. You have nothing to lose by calling me, and I can give you an offer within 48 hours. For your home, I offer a fair price, for your peace of mind.... priceless. Call me today at 888-621-4999 or email HomeLandInvestment@gmail.com

Show Me the Money!

You are ready to invest in real estate; you even have found the right property and a willing seller, and now that pesky problem: where to find money?
Many options are available. For example, investigate using your HELOC. A HELOC , or Home Equity Line of Credit, is extended to a homeowner by using his home as collateral. There is a maximum amount that the owner can borrow, but he may draw on that line of credit as desired. The interest charged is usually the prevailing prime rate. Repayment schedules, which can vary form 5 to 20 years, are negotiable as long as the interest payments are made monthly. This option can be particularly powerful for the investor if he has amassed equity in his home, and if low interest rates are available. In this economy, this may be a viable tool for investors.

Secondly, credit cards may be a viable option in the short run. Hang on to those promotional offers!

Often times, relatives and friends are willing to partner in sound real estate investments. Don't forget that rich Uncle! You may be doing him a favor in providing an investment with better returns than his other investments are currently paying. Sometimes co workers or clients are open to investment opportunities, and through pooling such resources, you can accumulate a sizable amount.

Consider limited partnerships- such arrangements may give you the immediate cash flow benefit you need. The seller himself can often be creatively induced to enter into a funding agreement with you, particularly if he is highly motivated to sell, as many are in this economy.

Your 401 K is another source of funds that can be partially liquidated, or you could borrow against the cash value of your insurance policy. Stocks or other equities may be cashed in.

Of course, hard money lenders are always a possibility. Sometimes lenders can be flushed out by perusing the 'wanted to buy" ads, or even a more direct approach- take out a newspaper ad yourself asking for potential lenders who may be eager to invest in a real estate project with you. Tell the potential investor how he benefits- " I have the opportunityto buy a $200k house for $100k, but I need a cash investor. I do thework, you invest the cash, and we split the profits.”

The only limit to finding private money for your real estate needs is your own hesitation. With creativity and a little knowledge, you can be the greatest source of generating needed capital. Sometimes YOU can be the best source for private money- and that's OK!