Monthly Archive for November, 2007

Buy Real Estate at the Right Price

Published on November 30, 2007 in General. 1 Comment

How do you buy real estate at the right price? This is one of the most common questions beginning real estate investors make and it is a very important one. After all, no one ever wants to pay too much for a property, in any real estate market.

When investing in distressed properties, most often there are repairs needed and it is important to figure in those costs when making an offer. You should also know the local real estate market so you have a clear picture of property values in the neighborhood where the home is located.

There are many free resources available today to determine recent home sales in a neighborhood. Several websites feature free property value estimates. Zillow.com and RealEstateABC.com are just two examples. You can type in the property address and you will see the estimated property value, assessed values from the tax collector and in some cases recent resale amounts in the neighborhood. This will give you a good idea of an approximate value of your investment property.

There are real estate professionals in the marketplace that also provide essential information, advice and property analyzers through education. Not all real estate edication costs and arm and a leg. There are reasonably priced and even free tools available to beginning investors. There is an online education course coming up that will take out the guesswork on finding good deals at the right price and how to pay less and maximize your profits. Learn More

“Subject To” Real Estate Investing

Published on November 20, 2007 in General. 0 Comments

I have heard a lot lately about “Subject To” real estate investing. “Subject To” is when you purchase an investment property subject to existing financing. The seller keeps the current loan on the property in place and a separate agreement is signed to make it available to the investor and eventually the buyer’s use.

Here is an example. Jane Homeowner lives paycheck to paycheck. Jane receives a promotion from her company, but has move out of state and sell her home. With the real estate market in her area slowing down, she is concerned it may take longer to sell her home and she will run out of time because she only has 30 days to move. Her local realtor told her she would have to take a financial loss on the home because she has very little equity and the prices on ouses have gone down in her area. She decides to put a classified ad in the paper and online to sell her house.

Joe Investor sees the ad and calls Jane Homeowner to see her house. After touring her home, he offers her the asking price with these concessions:

  • The current mortage is kept in place for 2 years to allow more time for equity to build before allowing the house to be sold at a profit
  • Jane Smith will have her mortgage paid off from the sale, plus will retain 10% of whatever profit is made from the sale after the mortgage and expenses are paid
  • Joe Investor will make the monthly payments on the mortgage after a “quick claim deed” is signed over to Joe by Jane.
  • Joe Investor then rents out the property to cover the monthly mortgage.

Jane takes the offer and moves on with her life. The property is sold in 2 years for a $60,000 profit and Joe Investor sends Jane Homeowner a check for $6000 10% of the proceeds from the sale of the house.

Not all Subject To deals work out in this manner. You should always enlist the advice of a good real estate attorney when determining the legalities of making deals.

It is also very helpful to gain additional knowledge from a real estate investment professional who has successfully completed these transactions. Check out an online education course on Subject To Investing and have your questions answered by a pro. Go to Foreclosure.com for additional information.