WATERFRONT ownership: Tenants in Common

There are many legal forms of fractional ownership in real estate. Time shares are one example of fractional ownership with which most of us are familiar. Syndications in commercial property provide another example. Here is an example of how one might structure a single family home sale, using fractional ownership on the property described in my previous blog:

http://www.postlets.com/res/3317158

What do you think??

Featured Waterfront Under $400K!

FREE LIST OF 37 KITSAP WATERFRONT PROPERTIES UNDER $400k! Here's one featured property: Craigslist special price on 1960’s Northwest contemporary home with spacious 2323 sq ft, priced below market for a quick sale (currently listed with adjacent parcel for $390,000)!! Just 3 miles from the Seattle ferry dock! Home boasts a main floor entry which leads into a dramatic great room with floor-to-ceiling windows, new hardwood flooring, refurbished kitchen cabinets, and vaulted ceiling atop heavy timber construction. Located off the main living area, the custom kitchen includes tiled counters, skylight, and JennAir cooktop range. The main level has three carpeted bedrooms with good-sized closets. A separated full bath is located in the main hallway, with one room having a tub/shower combo and vanity, and the adjacent room with a toilet and vanity. The large master suite has a vaulted ceiling, double closets with louvered doors, and private bath, with two skylights, double vanity, vinyl flooring, and tiled shower and countertops. The finished, daylight basement level of the house opens to a large family room with views of the water, a wood stove fireplace, and its own separate lower level entry from the yard or from the garage. An additional ¾ bath is located off the lower level bedroom. The lower level also has a built-in one-car carport and a one-car garage. Adjacent parcel with three car garage, RV carport and shop, may be purchased separately. The house has been well-maintained with new septic (2004), new roof (2006), and new oil furnace (2006). Now with new hardwood flooring, new dock, refurbished cabinets!! Potential renovations for additional equity might include bathroom and kitchen upgrades and adding a downstairs kitchen to create an ADU or MIL unit. Don't wait long! Buy direct--This great price is available without real estate commissions! Check Zillow and CyberHomes to verify this big bargain! Priced as is, discount w/o real estate commissions....Buy direct from Agent/Owner for this great price! Please go to www.2525RockyPointRoadNW.com for more photos and documents. Leave a comment below to request our free listing of 36 other waterfront properties for sale in Kitsap, all listed under $400K! Find out why Money magazine voted the Bremerton/Silverdale area among the top areas in which to invest in housing!!

Affordable Kitsap Waterfront

Affordable Waterfront in Kitsap County
Kitsap County has over 300 miles of shoreline, allegedly more than any other county in the country! While I have not been able to verify this claim, there is an abundance of opportunity for the budget-constrained homebuyer to find some great deals and great variety on waterfront property here, within an hour’s proximity of downtown Seattle by ferry.
There are currently 37 listings on the Northwest Multiple Listing Service of waterfront properties under $400,000 in Kitsap County. These are properties on a lake or saltwater frontage, not including those on rivers or creeks. In the last six months, 20 similarly-priced waterfront properties were sold. The waterfront properties under $400,000 that sold in the last six months averaged three bedrooms, two bathrooms, 2200 square feet and sold for a median price of $325,000 or roughly $165/square foot. The average size of the current listings is two bedrooms, one-and-3/4 baths, 1200 square feet, and an average list price of $308,000. This is a significant difference in size, for not much difference in price—which means that the inventory will be slow to move. Simple math would indicate that there is at least a year’s worth of inventory on waterfront in Kitsap priced under $400,000.
At the same time, four years worth of NWMLS data indicates that the median price of waterfront housing in Kitsap is $600,000 – meaning that half the sales were for more, and half for less than $600,000. All that inventory under $400,000 represents a huge bargain and opportunity for today’s waterfront homebuyers.
In fact, Money magazine has recently named the Bremerton-Silverdale area as the NUMBER ONE place in the entire country in which to invest in the housing market! Come check it out, and see what Kitsap County has to offer, while the housing deals are still HOT!

Affordable Waterfront for Homebuyers

Guild Mortgage and Home Land Investment Properties, Inc. are hosting a free workshop for waterfront homebuyers in Kitsap County. The workshop will focus on AFFORDABLE Waterfront under $400,000 in Kitsap County. The workshop will be held from 7 – 8:30 pm on Wednesday, January 27 at the Silverdale Community Center, 9729 Silverdale Way NE. The workshop will cover current tax credits and financing available to homebuyers, as well as factors to consider in purchasing waterfront property in Kitsap County. Listings of current waterfront properties for sale and recent comps will be provided to participants. Presenters include Wendy Ceccherelli, Designated Broker, Home Land Investment Properties; Carolyn Frame, certified mortgage planner, Guild Mortgage; and John Kenney, tax and real estate attorney. The workshop is FREE, but space is limited. Please email HomeLandInvestment@gmail.com or call 206-355-1706 to reserve a space.

Promissory Note and Terms

Promissory Notes Tutorial
Some simple term definitions will help you approach the use of promissory notes with confidence, and at least the illusion of expertise. First, the maker or payer of the note is the borrower who executes the note. The payee is the lender. Both payer and payee must sign the note before it can be legally executed.
The promissory note will set forth the loan amount and terms, interest rate, method and timing of repayment as well as the payer’s promise to repay. With a deed of trust, the note may state that it is payable to the bearer. If used with a mortgage, the note may state that it is payable to the mortgagee. The mortgagee is the person who holds the mortgaged property as collateral for the loan. Other items stated in both those documents may be restated in the promissory note including charges or conditions for late payment and default, as well as notifications and cures for default. Specifics on the right to prepay the loan balance and also any other charges the payee may receive should be spelled out as well on the promissory note.
As in other negotiable instruments, the promissory note may be assigned to a third party who then has the right to the borrower’s periodic payments. In other words, a note may be sold to another party.

FHA Suspends 90 day Seasoning Requirement

GOOD NEWS FOR INVESTORS. As of Feb 1, 2010, Investors can buy and sell property with no worries that their retail buyer will need to have a conventional loan that is not FHA. FHA suspended the “90 day flip rule” which was causing many of us headaches and profit. If you have any questions on the rule, feel free to call and I can further explain it to you. With the 90 day rule being suspended and the Tax Credit still available, NOW is the time to make some money and turn these houses.

Purchase Price is Firm

When the Purchase Price Won’t Budge
Don’t abandon ship. Purchase price is just one variable in the entire equation. If the purchase price is non-negotiable, consider what other things might be up for discussion.
--Seller financing or adjusting the interest rate on seller financing
--Quarterly rather than monthly payments
--Amortizing over an extended period, perhaps even fifty years
--Exchange a down payment in return for improvements
--Loan assumption
--Extend the closing date
--Allow improvements before the closing date
--Reduce or eliminate the down payment
--Seller to pay closing or improvement costs
Many items on this list could translate to substantial savings and make the issue of purchase price less daunting. It is critical not to jettison a potential clear sail (sale?) just because one item doesn’t quite float as you had hoped.

Ways to Enhance Equity

Ways to Enhance Equity
While perhaps you cannot create something out of nothing, there are many strategies to create something better out of very little. For the creative investor, there are myriad opportunities to improve the value of your investment. Think out of the box in converting usable buildings to livable space. Could a horse stable become a funky college boarding house? Can a mobile home park or parking lot be converted to apartments? Sometimes something as simple as restructuring a floor plan slightly or adding a small room to increase living area can add value. Finishing basements or attics might be just the perfect bonus room a renter or buyer is seeking. Perhaps subdividing a large property, or adding eye catching landscaping can be the extra oomph a potential money maker needs. Enclosures like porches or carports or decks can be added, or sometimes just spruced up with decorative railing or screening.
Bedroom or bathroom additions can be pricey, but perhaps there are less expensive alternatives, such as converting an office to a bedroom or extra mud/laundry area to a small half bath. Adding a separate entrance to a bedroom may make a potential rental situation more appealing. Of course, don’t ignore the obvious income generators- increase rents when applicable, or decrease expenses when possible.
Investing can be enormously creative, and the more you think in novel ways, the more you will be able to find remarkable deals wherever you look. Approach every property with the intention to find the potential, and you may find a hidden treasure.

Seven Mistakes to Avoid

The Investor’s Guide to Top Stupid Mistake Avoidance- A short and sweet summary of wise investing
1. Don’t enter any transaction without first having a plan. Hope for the best, but have a plan for the worst. If the property doesn’t sell, do you have a lease option thought out? Don’t ever purchase without a good idea of several options of what you plan to do with the property.
2. Don’t think you will get rich quick- that kind of thinking is dangerous as you will make risky moves thinking this is the golden egg that buys your future. Investment is hard work, like any worthwhile endeavor and should be approached with that mindset.
3. Don’t go it alone- surround yourself with a network, a team of savvy and supportive people that will help each other in reaching their investment potential. A minimum support network includes a real estate agent, an appraiser, a home inspector, a closing attorney and a lender. The more professionals who mutually support and respect each other, the greater potential for investment recommendations you will receive.
4. Don’t pay too much for the property- do your homework and know your market. If you overpay from the outset, your profit margin is already compromised.
5. Don’t think you can skip homework now that you are out of school- do the research necessary to make wise decisions. Your investment decisions are only as sound as your knowledge of the market.
6. Don’t underestimate your cash flow. You need to have money for unexpected eventualities, which will always crop up. Expect the unexpected and plan for it, so that you will not find yourself out of cash by lost rental revenue, or large repairs. Plan for worst case scenarios, and if you can still afford it, it is a good deal.
7. Don’t do just one thing well- you must have volume- have multiple transactions in the pipeline at all times. You spread the risk and increase the potential for productive deals to materialize.

The Ethical Investor

The Ethical Investor
Dishonesty and unscrupulous behavior may succeed in the short term, but ultimately everyone loses when an investor is unethical. As in the recent devastating housing crisis that caused honest and dishonest investors alike to struggle and now bear the consequences of increased regulation, the backlash of poor ethics affects us all.
Some questions are harder to answer than others when it comes to ethical investing. Is it ethical to promote no money down deals that may save someone from bankruptcy, but the buyer may be naïve in his understanding? Should a landlord rent to all people who have the ability to pay, or should he make judgmental decisions on the kind of neighbor this tenant would make? What should be the guide?
These questions are simple when they apply to cases of obvious misleading or fraud. If there is a rule or regulation, it needs to be followed to the letter and spirit of the law. If that means investment returns are reduced on that transaction, so be it. As soon as law abiding becomes subjective, a society collapses. In investment decisions that are not as clear-cut, as in the above examples, a good rule may be to put yourself in the prospective client’s shoes. If you would feel correctly advised, informed, and fairly treated with the same tactics, then you may likely proceed with a clear conscience. If it is a deal that you would not accept were you to know all the facts, then it is likely a transaction with ethical issues.
Ultimately, the crux of the question is whether real estate investing is an honest endeavor? If you believe it is, then you should proceed to make deals that reflect that integrity. If not, then get out of this business and shine shoes. Your soul is too precious to throw away.