Sunday, September 25, 2011
I might make this a series on what stuff I see for sale in real estate investing on TV. This week I happen to see a guaranteed real estate return via buying tax certificates.
Let's start buy looking at is it guaranteed rate of return. Yes it is true the rate you bid and get you'll make at the end of the certificate. Why isn't it always the best thing to do? The ad claimed 16%-21% return which in some cases could be true. Usually though there is a bidding process that you need to go thru in order to get your rate of return. Basically you bid on what your interest rate that needs to be paid at the end of the certificate.
For example if you win the bid say for 18% and the amount on the tax certificate is $2200(it varies from state to state). The tax certificate you buy is what is owed in back taxes on a particular property. So when you win the bid an agree to the interest rate you have to pay $2200 in this example for the certificate to the tax authorities immediately.
You will get paid the 18%(usually this rate is a lot less), but not til the certificate is paid for by the owner. That could take a while, but you will not make anything unless the owner pays the back taxes. When they do they must pay the back taxes and your interest rate. That is when you will be paid your interest on that tax certificate.
If they don't then yes you do get the property. This does not usually happen though, but what if it does???????
If you do get the property which is rare, you are on the hook for all the properties liabilities. For example say you get a home. The home was also used cooking meth, the EPA has added a $50,000 clean up bill in order for the home to be livable. Your on the hook for that bill, in fact the EPA will probably knock on your door and personally hand it to you. You could owe thousands in utility bills. Basically everything that property encumbers your on the hook for. So getting the property is not always the best thing. You need to do research on every property you bid on.
Their is a lot to buying these type of certificates and I highly recommend you find someone in that type of business to help you if this is what you want to do.
I personally like buying the real estate and going through escrow. This is the safest investment for real estate investors. With prices as low as they are today why not go the safe route? You can take a look at homes we buy for our investors at Rooftopvideo.com.
I also believe my system is the safest to buy real estate with. Look at our system at Rooftoppofitmaxsystem.com . Brett Young Valley Realty
Sunday, September 18, 2011
I'm often ask when will the real estate market turn? Great question and I'm going to do my best to answer it in this blog.
The answer I believe is lending. People need to be able to get mortgages to buy homes right? Remember all the different loans they used to have to choose from? Interest Only, Buy Down, Stated income, Straight 30 year, 15 year, no doc and many other different types.
These types of mortgages would stimulate people to actually look for properties they could buy and know that they could get the money to do it. So to me that is the answer lending must to be more available. I not saying they need to go back to those bad loans, but lending needs to be more available. They could set up 4% down-10% down-20% down deals that would help people buy their own homes.
With the economy and job market the way it is it may take a while for that to happen. The great thing about real estate is people need a place to live. Even though they may not be getting a mortgage they still need a place to live.
That is why we are doing a lot of lease options for our investors. We are finding that people still want to buy real estate and own their own home. We require $1500-$2500 down, we also get a credit check to know how long before they can re finance the home. We base the length of time of the option on that data. For example if their credit report says it will take them 12 months to get their credit repaired, we give them 12-18 months on their option. A Lease Option will get you top of the market price on your home, and the optionee will pay top rental rates for the property. No realtor commissions at when you close your property. That saves you thousands of dollars. The monthly cash flow on our properties averages $600 net a month or $7200 a year.
We do have a website set up were you can see these types of properties www.Rooftopvideo.com . Go check out some of the properties we are doing and have done. This site is jammed packed with great information for you the investor! Brett Young Valley Realty
Sunday, September 11, 2011
I always look at the different types of real estate courses that are offered in the market. I noticed one that claimed to teach you everything over a weekends retreat. That is just 3 days to learn how to do basically do everything......
I've done over 500+ homes for myself and investors, so I think I can speak as an expert on this matter. Their are so many facets in this business that have everything to do with if your going to make money in real estate in this market.
I'm going to give you a few examples that I've run into. I had an inspector in one of the cities that we rehab homes, that did not like investors. In fact he informed me it would be a very rough inspection. He wasn't kidding either..... We did get the home done on budget and time. The most important thing in this matter was we knew the city building codes and that was very important in this case. We dealt with the inspector in a very professional matter, but let him understand we know the codes. If we didn't it may have cost thousands of dollars more.
How much should it cost to ground an electrical panel? Sounds expensive doesn't it? We also had to get a Permit from the city on that. That meant we had to be licenced and bonded with the city. Prices vary, but knowing what it cost will help you not to be taken advantage of.
Another important issue is knowing whet type of property are you looking at. Rental, Flip, Lease option. Land contract property? What are the differences that you need to know to make an informative decision. What type of paperwork is needed to get the rental, Lease option, Land Contract done. Who does that? Who Picks up the your checks if you need that? What are the evictions laws? What are some things to look for in a potential tenant-buyer?
These are just a few things you will need to know to be successful in the real estate business. Seasoned investors know how to handle all aspects of these types of problems and paperwork.
So be very weary of learning everything over a weekend retreat. I'm not saying that is not a great place to start, but be careful. Look at the charges. Getting with the right company that knows what their doing should not cost you an unreasonable amount of money. Remember you can buy your own investment property for what some of these companies charge.
One last thing look at how much is it going to cost you to get a property. Most courses do not offer actually buying a investment property. That is why I set up Rooftopinvestment. We help you buy investment homes that make sense at very reasonable fees. Brett Young Rooftopinvestment.com
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