Getting Started in Real Estate Lease Options

Writen by Glenn Peters

Now that your credit score is increasing, let’s start putting our overall business plan together. Every business should have an overall mission statement.

I will let you use mine if you promise to follow it religiously. This will be your intent, focus, and motivation. I think a lot of people just head out, trying to look for real estate properties, with no plan of what exactly they are going to do when they actually find the “Sweet Deal”. Anyone can drive around looking at properties, look in newspapers, and have a realtor, but if you don’t have a structured plan in mind it will be difficult to make things happen.

Mission Statement

I am in the business of finding bargain properties in which I will sell on a lease to purchase agreement. I am looking for persons who want to buy a home, but have been denied lending through their financial institution. I help them repair their credit, introduce them to my mortgage broker, and within a year they own their very own home. After creating a happy and appreciative customer, I then acquire referrals. Now that you are focused on what you are supposed to be doing, you need to begin to put every thing in place.

Business Plan

“Target Property”

The most common clients you will have are young people who are eager to purchase their first own home. So at first your target property should be starter homes. You will probably be dealing with young couples that have been trying to purchase a home but just don’t have the credit. After you really build up your business their may be times that you find a buyer before you find the property. You can actually ask them exactly what they want, and then go find it for them. Starting out I would focus on a starter homes that you can pick up for at least 10 20% under market value.

“Ultimate Plan”

If you want to create a serious source of income you need to have a great plan and set goals for yourself. I will teach you two different ways to sell properties on a lease option or rent to own. The first will not require any of your money or credit. They are a bit more difficult to come across, but are very effective. They are called “Sandwich Lease Options”. You are purchasing the property on a lease option, but are also subleasing the property to your tenant. This can typically be done when a property owner can’t sell their home and is tired of making the payments. The downfall is there is not as much profit margin, and it is sometimes difficult to persuade the seller that they will have to wait a year for their property to sell. If your credit is a little beat up or destroyed, this is where you will start. It is a great technique for beginner investors because there is not a lot of risk and you don’t need to use your own credit or money. The way I like to sell lease options is to actually purchase the property first by acquiring an interest only loan.

There are also loans available with 100% lending, known as an 80/20. The lender will give you two loans, one of the loans for 80% of the purchase price, and the other loan for 20% of the purchase price. This type of loan will keep you from putting money down, and will also lower mortgage payments dramatically. If you are only going to own the home for a year, it does not matter what your interest rate is, or that you are not paying towards the principal. In both situations you will be requiring a deposit from the tenant; you will also have a descent monthly profit every month, and will also make your sizable profit at the end of the lease agreement. Now your ultimate business goal is to have numerous lease options in process at all times. You will make some great up front money, have a great source of monthly income, and will acquire your big profits from a few properties that are purchased from you every year. Are you ready?

Building You Team

“Mortgage Broker”

One of the key players in your team will be a really good mortgage broker with access to many different types of loans. Most mortgage brokers are able to get you “Interest Only” loans. They also should be able to provide you with 100% lending. Do not go to your bank, they are governed by the federal government and have specific underwriting laws. When you go to a bank, you will normally be required to put 5% down on the property. Huge insurance companies who have tons of money to invest generally fund mortgage companies. They provide the money to certain mortgage companies as an investment.

They do not have to follow the same laws as banks and are more flexible with their loans. Let your new mortgage broker know that not only will you be coming to them for investment loans, but you will also be bringing your tenants to receive funding as well. Be sure that they are dedicated to their job and are going to be available to help you. Find out what type of loans are available, and the credit score needed to acquire the loan. You will need this information when you go over everything with your potential tenant. Now you will know exactly what is available to yourself and your potential tenant. You will also be able to determine whether their credit score can be repaired to actually acquire lending within a reasonable amount of time.

“Realtor”

Another key player is a great realtor. They will serve a few purposes for you. Let them know that you are in the market for investment properties. A good realtor will be able to locate properties and run comparisons for you. Obviously you need to know the “Market Value” of a property before you make a purchase.

You need to be sure to leave yourself enough profit margins. Another great resource that a realtor can provide is they will know plenty of people who don’t qualify for lending. They will have clients that have them find a home for them, but when the time comes to make the purchase, they are unable to qualify for the loan. This is where you come in. Have the realtor give your card to people like this. You can even offer to compensate them for their efforts. If a realtor works with someone, and then does not get paid, this is a great way for he or she to compensate their time wasted. You can offer them 10% of your profit if the clients follow through and purchase a property from you. I think it’s worth 10% of my profit, if I constantly have people calling me who are dead set on buying a home. You will also establish a great relationship, create a win win situation, and have someone who will always assist you at the drop of a hat.

“Business Cards”

You are in fact starting a business and need to look professional. Nobody wants to go in to a contract with someone who appears to not have a clue as to what they are doing. Just get yourself some nice business cards for personal use, and be sure to give some to your realtor to generate leads.

“Setting up a Corporation”

At some point you will need to set up a corporation to protect your personal assets and save on your taxes. I recommend you contact a tax attorney to assist you with setting up your corporation.

Now that you are focused on what exactly you are going to do, it’s time to get going. There will never be a good time in your life to start investing in real estate. I think you better start now before things get worse. I think once you get out there building your team and setting up the foundation for your new business, the rest will fall in to place.

“Lease Options University” I have developed a training system which will allow you to help your clients improve their credit scores and get the financing they need to purchase your pproperties within a year on Lease Option. To find out more go to http://www.leaseoptionsuniversity.com

Estate Agents on the Costa Blanca Spain

Writen by Karen Milacic

Properties for sale or to rent on the Costa Blanca

As a general rule of thumb, newly built properties on the Costa Blanca are generally cheaper than existing or re sale properties cheaper still if you buy ‘off plan’ (before the house has been started). Property prices have rocketed here over the last five ten years and many fortunate people have found that their properties have grown in value enormously even before they had moved in! Even though the market is now leveling out, a property in Spain is still an extremely good investment. Visit www.villa angels.com for the latest properties on offer all over the Costa Blanca from Mar Menor to Valencia.

If you prefer a more traditional Spanish style country house called a ‘finca’, or one of the quaint village houses, the first thing you need to do is check the wiring. Spain has the highest percentage of unsafe wiring in Europe with over 78% of all installations over ten years old in a near lethal state of repair. There are good electricians to be found as well as some bad ones. Ask to see their qualifications and check to see if they have the appropriate testing equipment. You may have to pay a little extra, but better that than the alternative.

Not many houses are built to include a damp proof course and people often find that after the first winter and we do have winters here the paintwork starts peeling and bubbling along the bottom of internal walls. Check with the builder that it is included and if not ask that it be included as an extra. Older houses will not have one, so you may have problems that need to be rectified by a competent builder.

There is no such thing on the Costa Blanca as mains gas. You will need to set up a contract with the local Butane gas company to have it delivered to you. A lorry will then pass by your house once or twice a week to bring you full bottles and collect the empties to be re filled. You will need to supply the company with a copy of your escritura (deeds) or rental contract plus a copy of your N.I.E. certificate.

Obviously, it should go without saying, when buying a property DO NOT SIGN ANYTHING BEFORE YOU FIRST CHECK IT WITH A LAWYER. So many people have been fleeced by sharks acting as ‘estate agents’ who have demanded a deposit on a property that either was never for sale in the first place or has so many debts outstanding on it to make it worthless. In Spain all credit is guaranteed against property so if the debt is not paid, a charge is put against the property not the owner. In other words, the owner can disappear with your money and leave all the debts waiting to be settled by the you as the new owner of the property. Ask to see a copy of the ‘nota simple’, this will tell you if there any large debts lodged against the property as well as the legal size of the dwelling if any illegal extensions have been made to it. It’s also a good idea to visit the local town hall (ayuntamiento) to ask if there are any taxes outstanding on the property.

Almost half of all business in Spain is conducted ‘under the table’ so don’t be surprised to find that the amount you are paying for a property is not the amount written in the escritura (title deeds). This is nothing to be concerned about as it is done to save you and the seller significant tax bills. Duty on property sales currently stands at 7% which can add a large chunk to your investment, so it makes sense to declare a smaller amount on all the legal paperwork. Everyone does it and the authorities turn a blind eye as they would rather have some money than none at all if the whole deal were done in cash.

In any case, you need to budget for 10% above the property price to cover you for taxes, legal fees and paperwork.

Happy hunting!

If you would like more information on this topic or any other related to the Costa Blanca visit Costa Blanca World.

Karen Milacic is a graphic and web designer living as a British expat on the Costa Blanca for the past five years. Visit her other web sites at: http://www.villa angels.com; http://www.thedesignbusiness.co.uk; http://www.costablanca webhosting.com

Bulgarian Property Market Update 26 Jan 2006

Writen by Timothy Wright

Figures from the National Statistical Institute indicated that the average prices of flats in the Regional capitals of Bulgaria have shown a rise of over 36% in 2005.

The prices of flats in the capital of Sofia saw the highest rise of 20.2% with prices averaging 1,222.4 leva/sqm. The highest percentage of growth was registered in Vratsa, where the prices of flats rose by an astounding 86.1% and prices are at 464.8 leva/sqm.

Other areas of growth for the same period include:

Yambol up 72.1 per cent to 513.6 leva/sqm
Silistra up 70.1 per cent to 406.5 leva/sqm
Varna up 25.6% to 1,198.1 leva/sqm
Bourgas up 46.2% to 1,126.5 leva/sqm

* * *

Sofia Olympic Bid Gathers Momentum

In a move which signals the determination to put Bulgaria on the tourist map and commit to major infrastructure improvements, the government has confirmed its support for the Bulgarian capital to host the 2014 Winter Olympics.

“We should be aware that the road ahead is long and difficult. Achieving the aim will be good not just for the development of the Olympic ideal, but for the development of winter sports and winter tourism in Bulgaria as a top priority of the economy as well,” Prime Minister Sergei Stanishev said.

The first stage in the process concludes in June 2006 when the number of competing cities is narrowed down to four. These cities will then continue the bidding process right up until June 2007 when the winning city is named.

Major highway projects will be given priority as the State and Sofia Municipality, along with the Bulgarian business community work together to ensure the best possible outcome of their bid. Winter tourism will also greatly benefit as a result of a successful bid.

* * *

EU Integration

This week saw the arrival of European Commission Vice President Franco Frattini in Bulgaria. Frattini met with the Prime minister and many other government ministers along with Justice Minister Petkanov and senior judiciary members.

Items up for discussion included judicial reform, the suppression of human trafficking, corruption and the strengthening of the future EU external borders. All are seen as areas of concern and part of the EU accession process, with EU membership expected in 2007.

* * *

Brits Invest and Holiday in Bulgaria in Record Numbers

The British have been heading to Bulgaria in record numbers. The country is not only proving more and more popular as a destination for British holiday makers but many are also buying investment properties and holiday homes in the country.

James Knight, Managing Director of leading property specialist Knight International (http://www.knight intl.com), has predicted that 1.2 million British tourists will probably choose to visit Bulgaria for a holiday in 2008.

In 2002 there were 100,000 Brits travelling to Bulgaria for a holiday. This number has risen heavily each year and was up to 400,000 for last year, 2005.

Knight cites that Brits now know a lot more about Bulgaria and the country is now seen as been within their “comfort zone” for holiday destinations, along with other countries such as Italy, France and Spain.

The cost of a holiday is also vastly less than that of a similar holiday in France or Spain due to the lower cost of living. There is also an impetus on the expansion work been carried out at airports such as Burgas and Varna to allow the passage of an increasing number of tourists. Low cost airlines are also doing their bit with more flights than ever in and out of the country. The completion of construction work at the airports will open the market to more low cost carriers resulting in greater competition, lower prices and improved flexibility for the traveller.

On the property front, the number of Brits buying second homes in Bulgaria has risen 77% in 2005. Alex Wright, director of British Consultancy Company HIFX comments “Although France and Spain remain the most popular destinations to buy abroad, due to their proximity and the cheap price of travel; British citizens are starting to look further a field,”

He adds “Bulgaria also is booming and the Black Sea resorts are reminiscent of Spain 20 years ago; investors are buying in their droves and there is similar activity in some of the ski resorts.

While Spain accounts for 35% Brits homes overseas and France accounting for 24%, interest in second homes in these countries is declining and the going to other countries such as Dubai and Bulgaria where buyers can get more for their money.

Tim Wright is an international property investor and regular article contributor. He is the author of “Bulgarian Property The Overseas Buyers’ Kit” available at http://www.BulgarianPropertyBuyer.co.uk

Selecting a Real Estate Agent to Sell Your Home

Writen by Bill McRea

The equity in your home is not to be overlooked since in most cases it is your biggest personal asset. So you should not trust your most important asset to just any real estate agent. You should seek the very best real estate agent in your area.

Finding a top real estate agent will make your transactions flow more smoothly, and potentially make considerably more money. The following pointers will help you single out an exceptional real estate agent and may prove to be indispensable steps for a homeowner.

1. Collect names and contact numbers.

Referrals, classified ads and online sources are what people rely on when searching for real estate services. It’s easier to do a background check with referrals but if you want more choices, paper and online ads have a lot more to offer.

2. Interview Agents

Schedule appointments with at least three or more real estate agents, and be prepared. A prepared list of questions is good advice. Ask questions on the agents marketing techniques, follow up methods and number of active listings, sales records and the option for cancellation of your listing.

3. The working relationship with your agent is key to a successful transaction

After interviewing your perspective agents ask yourself, who seems to be the most sincere, and who do you think will respect your decisions best? Often your “gut feel” will be your most accurate. Consults other experts such as mortgage bankers, and escrow company personnel. Make sure that you prioritize your needs when contemplating which agent to choose.

4. Take your time.

It takes time, lots of thinking and work to make the right selection. If you find the “perfect” real estate agent, consider yourself fortunate. Now is the time when the real work begins.

But no matter how much work is involved, the whole process will work much more efficiently if you have selected the right agent. Selling your home without the assistance of a qualified realtor is difficult and ultimately cost you more money than you save.

Bill McRea is the publisher of Knowninfo a premium website dedicated to providing Information, Marketing Strategies and Quality eBooks. Visit our site daily for updated information, and unique products.

Don’t Leave Real Estate Donations for Others to Do

Writen by Ralph Maupin

Most people think that donating real estate to a charity is for the rich. This simple is not true. I have worked individuals, charities, and small corporations for years with donations process. For many people and companies is about the able to rid themselves of unwanted property. They simple want out. They are tired of property taxes, insurance cost and the liability exposure.

The following are the rules that apply for real estate donation:

Individuals:

The following rules apply if the donated property is owned in your own name, with your spouse or other persons: If you have held the property for more than one year, it is classified as long term capital gain property. You can deduct the full fair market value of the donated property. Your charitable contribution deduction is limited to thirty percent (30.00%) of your adjusted gross income.

Excess contribution value may be carried forward for up to five years. If the property has been depreciated, the fair market value must be reduced by its accumulated depreciation through the date of contribution. Fair market value is most commonly determined by an independent appraisal.

If you elect to deduct your cost basis of the donated property you are allowed a deduction of fifty percent (50.00%) of your adjusted gross income. Excesses here again can be carried forward up to five years. Which method you elect is dependent on the cost basis in the property donated, your tax bracket, the age and health of the donor and whether you plan to make future contributions. Corporate Donors

The following rules apply if a corporation makes your contribution, these rules apply:

If you have a controlling interest in the corporation and the property has been held for more than one year, the corporation can deduct up to ten percent (10.00%) of the net profit of the corporation. Excess contribution amounts can be carried forward up to five years. The fair market value here must be reduced by the amount of accumulate depreciation. If the corporate has elected “Subchapter S” status, then the contribution allowed will be reported on the individual shareholders K1 and may be deducted on the individual return. Partnerships, S Corporations and Limited Liability Companies

The following rules apply if a partnership, S Corporation or limited liability company is making your contribution:

The corporation may not claim a deduction for the property donated. Rather, the contribution passes to the individual shareholders on a pro rated based on their percent ownership in the S corporation. The shareholder can claim this deduction on their individual tax return. The same limits and carry forward rules will apply.

Partnerships and limited liability company contribution rules are the same as an S corporation with one exception the partners or member can claim a deduction even if they have no basis in the partnership or limited liability company.

Real estate investing by nature is risky. You can win, lose, or break even. We cannot guarantee a profit or loss. We do not provide legal, accounting, or contracting advice.

* Please consult your CPA/Attorney for your specific tax benefit.

Ralph Mark Maupin has purchased and sold in excess of 3,500 single family homes and many multi family properties. Mark teaches real estate investing seminars, and has real estate mentoring program. Mark co founded company Donate Real Estate, LLC http://www.donaterealestate.com

Condo Hotels Offer Innovative Way to Own a Vacation Home

Writen by Joel Greene

Many people dream of owning a vacation home. But often concerns about maintaining it, renting it out in the off season, or even justifying the expense when it’s only to be used for a couple weeks of the year keep them from making the dream a reality.

Now condo hotels, an innovative type of vacation home ownership, provide a welcome solution to all these problems. Also known as condotels or aparthotels, condo hotels have been growing in popularity as a hassle free approach to owning a luxurious second home in a great vacation destination like Miami, Orlando, Las Vegas, the Caribbean and Dubai.

Condo hotel buyers purchase an actual condominium unit in an upscale hotel or resort. The property functions as a full service hotel, and owners have access to all facilities, amenities and services just like hotel guests.

They receive a deed to their unit and can use their vacation home when they want. When not in residence, they can place their unit into the hotel’s rental program and share in the revenue it generates. Like most real estate investments, the owner can also sell his condo hotel unit at any time and may make a profit on its appreciated value.

Young professionals, baby boomers and seniors alike are just beginning to discover the benefits of owning a condo hotel unit. They appreciate the hassle free nature of condo hotels as a second home in which a professional management company handles everything from property maintenance to finding hotel guests to rent the units. They also consider condo hotels a means to diversify their investments.

Condo hotels differ from timeshares in a number of ways. With timeshares, buyers pay only for the right to use the property for a set amount of time each year, usually a single week. They don’t own the title to the property, and they do not receive any rent revenue for the weeks they’re not in residence.

Condo hotel owners can use their condos when they want throughout the year, within the guidelines of the individual development. They receive a percentage of any revenue their unit generates when they’re not there and the unit is rented out to hotel guests.

Timeshares traditionally diminish in value over time, rather than appreciate. While the history of condo hotel resales is rather limited, they are seen as an appreciating asset.

How do condo hotels differ from owning a traditional single family house or condominium? Consumers who purchase a regular condominium pay property taxes, insurance and maintenance fees, but typically don’t have access to hotel type amenities.

Condo hotels, on the other hand, are not your standard second home. They are beautifully furnished suites in some of the most prestigious hotels and resorts around the world.

The properties often feature four or five star amenities, ranging from full service spas and fitness centers to fully equipped business centers and fine dining restaurants. They also come with exceptional hotel services like concierge, valet and room service.

With condo hotels, owners reap the rewards of condo ownership while enjoying the privileges of a full service hotel.

Most condo hotels are operated by big brand management companies such as Hyatt, Four Seasons, Ritz Carlton, Starwood, Hilton, Trump, InterContinental and Rosewood. Typically they are luxury hotels located on prime land, overlooking the ocean or a golf course, near popular theme parks, or in the heart of a booming downtown.

Condo hotel units range from studios and full size apartments to luxurious penthouses and villas. Prices for these homes range from $250,000 to over one million for top properties.

What makes the condo hotel concept so appealing? When owners are not using their condo hotel unit, they have the option of placing it into the hotel’s rental program. They receive 40% 60% of the revenue their unit generates (it varies by property), with the balance going to the hotel operator. The revenue generated helps offset the costs of owning a holiday home.

While many hotel operators don’t guarantee the rental of the condo, by capitalizing on the hotel’s brand name, strong sales and marketing capabilities, centralized reservation system and management expertise, owners typically receive a higher level of rental income than they would from a traditional vacation home.

More importantly, ownership is 100 percent hassle free, as the hotel operator takes care of finding hotel guests and maintaining the unit as well as managing the property’s many facilities.

How are the ownership expenses split? As part of the rental agreement, the hotel pays for most operating expenses such as housekeeping, administration, sales and marketing. The condo hotel owner typically pays for real estate taxes, insurance and capital improvements. The rental revenue that owners receive helps defray these expenses and, in some cases, provides additional income.

While developers primarily sell their condo hotel units as a lifestyle and vacation home alternative, many buyers see merit in the condo hotel concept as an investment tool. They say it gives them the best of both worlds. They can enjoy all of the benefits of vacationing in a first class hotel or resort while they own a property that has potential to appreciate. It’s the ultimate second home and real estate investment combined into one!

Joel Greene is the President of Condo Hotel Center, a Miami based real estate firm that specializes in the sale of condo hotels worldwide. For further information about condo hotels and to see property listings, photographs and prices for over 120 exciting condo hotel opportunities available around the world, visit http://www.CondoHotelCenter.com and http://www.CondoHotelsDubai.com. Be sure to sign up for the FREE Property Alert newsletter to learn about new properties coming on the market and to receive a complimentary copy of the Condo Hotel Report.

Condo Hotel Center can be contacted at info@CondoHotelCenter.com or 305 944 3090.

Free Tenancy Agreements

Writen by Jennifer Tweed

Are you looking to download a FREE tenancy agreement? Finding a free tenancy agreement that you can download is fairly easy. But what you need to check is exactly what level of protection it would provide you and your tenants with. It is also worth considering what level of value there is in a product that is being readily available without a cost? Some may be free and others from as little as just