Reviving Two Dead Real Estate Equities

vTurning Two Dead Real Estate Equities into Cash

The Background

Ralph and Patti Simons were both in their mid-60’s, recently retired, and in good health, but they had a financial problem needing a solution. They wanted to use their past business experience to build their net worth and their income.

Ralph was an experienced carpenter and Patti was an experience office manager and bookkeeper. Their goal was to buy a run-down house, fix it up, sell it; and then they would repeat the process and gradually build wealth and income. They had the idea, but lacked the know-how to do it.

They had enough retirement income from Social Security and pensions to just get by financially, but not enough cash to acquire a fix-and-flip property and upgrade it. They had the following assets: the equity in their house, good credit, a work ethic, a good idea, carpentry and booking skills, and $25,000 cash.

The property they felt comfortable buying and rehabbing would be a rundown, neglected house in a decent neighborhood that would cost about $185,000.

Getting Financing

They found the property they wanted and came to me for help

Loans Between Limited Companies For Property Investment

wvDo you have a company for your core business activities?

Are you being taxed heavily on the money that you withdraw from the company and invest in property?

The problem – tax on money you pull out of a company

The problem I see with many property investors who own limited companies is that they do not take into account the amount of tax they pay by taking wages or dividends from the company. If you are a higher rate taxpayer then you will pay an additional 22.5% tax on the money you take out of the company as dividends.

I have worked with a few clients who made a loss on a flip once they took tax into account. Why would you put in the hard work just to pay HMRC?

You may wish to claim entrepreneurs’ relief on your trading business activities and therefore do not wish to jeopardise this by investing in residential properties that you plan to keep long-term and rent out. As such you could have two limited companies:

One for trade business activities
One for investment activities

Scenario 1: Current structure

Let’s say you pay yourself

Things to Keep in Mind Before Investing in Yamuna Expressway

ewgConnectivity has always been a great catalyst of real estate growth in a city. As the physical infrastructure of a city improves, its real estate sector touches new heights of success. One such example is that of Yamuna Expressway. The 6-lane highway connecting Greater Noida with Agra has acted as a stimulant in boosting the property market of the city. Investors showed renewed interest in Noida real estate after some renowned developers started coming up with their Property in Yamuna Expressway. It has now been a few years after the popularity of this location as an investor’s paradise and now there are a few things investors must keep in mind before parking their money in Yamuna Expressway.

Be sure about the purpose of investment

This is probably the first thing you need to be sure about. Before you start home hunting, decide whether you want the property for investment purpose wanting to re-sell it after a few years or you want it for end-use. Also, make sure whether it is going to be a short-term investment or long-term. It is a growing market and there will

Here’s What You Need to Know About Real Estate Investments

So you’re planning to invest on the realty sector! Well, that’s certainly a great move as an investor! But, if you are planning to invest in the realty sector to earn a huge profit from the rental income and capital value appreciation, you will have to choose between residential and commercial real estate.

Even though the real estate market has been static for the past few years, improvement in macroeconomic scenario has made the investors take a step with their investment in realty sector. As an investor, it’s really important for you to understand the financial needs, and look for the advantages and disadvantages, so that you can make your investment earns you very good returns. Here are a few aspects you need to consider while choosing between residential and commercial real estate.

    1. Financing: Getting finance for a residential property is easier when compared to that of a commercial property. In some cases, the loan for as much as 90% of the property value will be available from finance companies and banks. But for commercial property, you will get finance for only 60% of the property value. The interest for is also high for commercial properties. So, commercial real estate is more

Repossessions, What They Don’t Tell You

Have you ever thought about getting into real estate investing? People love the idea of getting rich quick. They watch the American TV shows, hear about some guru who made millions, read a book, or taken a course. A lot of people think it is easy and flawless.

As a real estate broker and organizer of a Real Estate Investor’s Group in Montreal, I get a lot of phone calls from investors wanting to get into the real estate business. For a lot of these investors, their first thought of where to look are repossessions. It makes sense from the outside looking in. The owner could not pay their mortgage, the bank took over and now they are selling to recoup their money. A lot of people think that they will get a steal.

What most people do not know is that most repossessions end up selling for market value and on a few occasions, they even sell for more than market value. The banks are not in the real estate business and want to off load the property as soon as possible. They will hire a realtor and get their expertise advice on the market and the house’s present day value.

Tips for Buying A Luxury Investment Home

Buying a luxury home is a little different from buying the average tract house. Obviously the expense itself is a large concern, but more and more luxury buyers are using the home as an additional asset in their overall investment portfolio.

In the 1950s the dream was to find a home and pay off the mortgage, now many financial advisors recommend using the mortgage as a way to not only offset income taxes but to leverage capital for other investments. For those just entering the luxury home market, it’s important to know what to look for so that the home not only provides a pleasant living environment, but also appreciates in value.

First and foremost… location. Cities, communities, neighborhoods are all very important factors in purchasing a luxury home. More than many home purchases, finding the right real estate agent can make a huge difference. Your agent should be able to direct you to homes in areas with appreciating value and know the reasons why.

Communities and neighborhoods are also very important. Many luxury buyers look for gated communities; security and privacy are important aspects to the home’s location. If you are looking in a location which offers views, such as a beach

5 Indispensable Elements of a Due Diligence Checklist for Multifamily Properties

When purchasing vacant or occupied multifamily housing units, every business needs to exercise “due diligence”. Real estate investment, after all, is both highly profitable and full of risks. The unfortunate part is that many businesses are either partially aware or do not know what steps to take when evaluating multifamily properties before investing in them.

To help, we decided to discuss five elements that should be a part of your due diligence checklist.

1. Investigate the Urbanness of the Area

Purchasing properties in areas that are slated to become commercial hubs soon is a wise investment step, as renters prefer such locations and they fetch high rates on the market. You should also establish the level and type of activity in the property’s vicinity, as renters will not remain in your property if there is too much traffic or noise. To ensure any such potential scenarios, among others, don’t hurt your investment, inspect the property area in advance.

2. Check for Owners Corporation

The owners corporation is a body of all the owners sharing a mutual responsibility to maintain common areas such as driveways and grounds that fall within the property. If the property you are planning to purchase is subject to an owners corporation,

1031 Exchange Myths

There is no argument that 1031 exchanges have enjoyed explosive growth in popularity in recent years. Once the sole domain of professional investors and commercial brokers, today you will find 1031 exchanges being used by professional and casual investors alike.

However, along with this popularity has come many misconceptions about this powerful tax-deferral tool. Read on to debunk some of the most common myths about 1031 exchanges, and avoid trouble with the IRS down the road.

A taxpayer cannot complete a 1031 exchange with a related party.

FALSE! Related parties can buy or sell property in a valid 1031 exchange. When related parties (e.g., parents, spouses, children, siblings, etc.) exchange property, the related party is obligated to own the property for at least two years following the exchange before selling or exchanging it again. Failing to adhere to the Two-Year Rule will render the 1031 exchange invalid.

Vacant land does not qualify for a 1031 exchange.

FALSE! Any property that qualifies as real estate (as defined individually by each state) qualifies for a 1031 exchange. This means that things like water rights, mineral rights, leasehold interests greater than 30 years, and even air rights are eligible for an exchange. Of course, since each state defines

Great Reasons To Invest In Property

Anyone can make money investing in real estate once they know how to exploit some benefits that all real estate can generate.

Why is Real Estate such a huge investment?

Buying a property is concerning more than just finding a place to call home. Investing in the realty market has developed into more and more popular over the last 40 years and has become a universal investment medium. While the realty market has plenty of opportunities for making big profits, buying and owning real estate is a lot more difficult than investing in stocks and bonds.

The preeminent thing about investing in realty is that you can select what you buy and the way you buy it. What I mean by this is you choose the type of property, the location, property condition and you determine the price that you are agreeable to pay. How enormous is that? If you wish for more cash flow, you could buy more entities or arrange the financing so that the rental real estate makes more cash flow.

If you want to get the property paid for more rapidly you could use any surplus cash flow and apply it to the loans.

If you want to diminish your taxes,

Who Would Buy a Non-Performing Loan?

Whenever I talk to someone about the note business, I always start off describing loans that are being paid down monthly. Most people already understand the concept of owning a home that they can rent out for cash flow. It’s when we talk about investing in the debt payments apart from owning the property that eyes start to glaze over.

However, given enough time and a few actual examples, I can usually get them to grasp the concept that we can purchase the paperwork that directs mortgage payments to us rather than the bank or other lender. Although no one is claiming this is risk-free investing, there are advantages to letting the home owner take care of taxes, insurance, repairs and maintenance. If we own a rental property, all those (plus the dreaded middle-of-the-night calls) are on our plate.

So, the main attraction of buying performing loans is that the cash flow has already been established and we anticipate it will continue into the foreseeable future. That, and the fact that the borrower is responsible for the upkeep of the property, makes for an attractive investment.

A non-performing loan, also called a non-performing note (NPN) is a different beast altogether. This is a

Getting Motivated Seller Leads

If you want to close more deals, you MUST generate more motivated seller leads. It’s that simple. If you are not closing the number of deals you want to do per month, it’s because you are not generating enough leads.

Figure that you need 20-25 leads for every deal. Let’s assume that you want to close 2 deals a month, then you need to be generating 40-50 leads a month.

How do you generate more leads? Here are some lead generating techniques.

Implement marketing that will drive motivated sellers to call you. Be consistent and tenacious in your marketing. You’ll get the best results from a mix of marketing mediums, but be sure that you advertise a brand name so prospects will mentally link all your ads together. Be sure to include the call-to-action – in other words, what you want them to do: call this number; visit this website.

  • Direct mail will yield the best results. You can use letters or post cards. Mail to targeted lists such as: pre-foreclosure; divorce; evictions; vacant houses; probates. You can get many of these lists from a list broker like List Source; Flip This Real Estate List; or US Lead List.
  • Bandit Signs are cheesy and

How to Invest in Real Estate

Many people fail to see that skills fade, but assets are forever.

They don’t know their entire financial education in their lives is completely WRONG!

Too many people believe that a good job, good skills, and a positive attitude will make them great wealth. The problem is that it just doesn’t work that way. People who make an hourly wage and an annual salary cannot build wealth. This is because their money doesn’t work for them, and instead they work for their money. This idea keeps them from understanding that the only way to build wealth is to invest in multiple sources of income that you don’t have to work for, but instead build yourself or purchase from someone else.

Another misconception of multiple sources of income and passive income is that people assume government and financial institutions offerings such as the stock market, CD’s, and many other financial instruments are passive income. Most of the time however, unless it is a note or bond that pays you regular interest. It is not actually passive income or a stream of income. As a stream of income or passive income is income that you make every day, every month, and every year continuously as

An Important Lesson From a Class of 7 Year Olds

Recently I went to my daughter’s end of school year play. She was so excited for me to come and for good reason. It was clear that the kids worked really hard and they put on a fantastic show. I must say that I was pleasantly surprised.

There was a lot more to the show than entertainment. They had several skits and each skit was a life lesson the school was trying to teach the kids. There was one skit where three dogs each had an extra large bone to chew on and eat. Dogs love bones. As they were walking around bragging about their bones they came across a river. They looked into the river and saw three “other” dogs with bones. After a brief discussion, they decided it was best to take the bones from the other dogs so they could have more. They jumped in the river and ended up losing their bones. It was later that they realized they were looking at their reflection. What a story!

As I write about this wonderful show and the important lessons that us as real estate investors should understand, I am reminded of a less than successful investor that I spoke

Explaining Mortgages For Foreign Investors In A Nutshell

Today, more and more foreign buyers are making a beeline for the housing markets in the United States. These buyers are interested in this specific financial product because they may want to invest in a second home or in investment properties.

The mortgage industry in the United States is sophisticated when it is compared with those that are present in other parts of the world.

Before buying properties overseas, it is necessary to familiarize yourself with the entire range of international mortgage products and other related options. Basically, you will need to have the low-down on everything that is related to international mortgages. Since many fail to know completely about foreign national mortgages, we have penned this post. So let us get started, now.

Mortgage characteristics

Mortgage products vary from one country to the other. Before getting an international mortgage, there are a couple of elements that dictate it; these elements are as follows:

  • How does the lender determine the rate of interest?
  • How does the loan get amortized?
  • What is the time period by which the foreign national mortgage reaches its final maturity?

The varying element

Here is a list of all those elements that vary from one mortgage loan to another.

Interest type

Whenever you are set to buy

Ditching the Day Job? Make Sure You’re Ready

Nearly everyone that enters the Real Estate world in general has a desire to quit their traditional “day job”. However, knowing the difference between wanting to leave your day job and needing to is key to making the right decision for yourself and your family. What is even more important to know is that there is no set timeframe when this should take place. For some Real Estate Investors, this opportunity comes within the first 3 months, however, for others it takes 10 years. That’s a big difference, and a lot of different decisions being made during that time.

What Are Your Expectations?

If you are only looking to work a few real estate deals a year, there would be no reason to leave your current job, as that will not allow you the security of a regular job. However, if you are in the opposite position and you are receiving more leads than you know how to deal with, you may want to start seriously considering making real estate investing your main focus.

Is it a Want, or a Need?

If you are even considering quitting your job, we are going to assume that you must have a pretty steady flow of leads

Double Closing a Short Sale

Of course I need to start by admitting that I am not an attorney even though I did almost go to school to become one. Because I am not an attorney I am not giving legal advice and urge you to get your advice from someone qualified. This article is only based on my understanding after reviewing the Colorado Foreclosure Protection Act and the advice I’ve received from my legal advisors.

There is an amendment to the Colorado Foreclosure Protection Act (CFPA) that specifically addresses the short sale flip. A short sale flip is when a buyer of a property, through a short sale, re-sells the house to another purchaser for a profit. This is normally done with no work being done to the property and is actually not a bad strategy at all. If you can add enough value by discounting a payoff then you should be compensated. Many times the end buyer is another investor but more often it will be a homeowner. The problem with this strategy is that the bank that is taking the loss hates it.

It used to be that a short sale flipper would utilize a double close where they buy the house and sell

Top Ten Best Places to Invest in Property in the UK

The North West of England tops the charts as the best place to invest for high annual rental yields, whereas the South East benefits from huge increases in house prices.

Despite George Osborne announcing an additional 3% Stamp Duty to be levied on the purchase of additional properties in his 2016 Budget, investing in property can still be profitable, and here are the most lucrative areas to invest.

The North West of England topped the tables as the most lucrative area to invest in property to achieve high rental yields; and with four renters vying for each property, there’s no shortage of demand.

Conversely, those who have invested in the South East and London would benefit from the increase in house prices.

Invest in Property in the North West of England to Achieve High Rental Yields

More specifically, Manchester tops the poll as the best place to invest if you wish to achieve high rental yields. The yield is calculated by taking into account the average monthly rent and working it out as a percentage of the property’s market price. The average rental yield in Manchester is 6.02% and Liverpool came in a close second. The full list is below:

• Manchester 6.02%
• Liverpool 5.16%

Commercial Vs Residential Investment Prospects in Millennium City, Gurgaon

Fuelled by a number of Fortune 500 companies and rapidly developing startups, Gurgaon realty is a matter of pride for the entire property market of the country. Despite the slump in the realty in 2014-15, investors interests in this market did not go down too low. Price appreciations and market growth can always be seen in the market. However, one thing that confuses the investors is between residential and Commercial Projects in Gurgaon.

Residential and commercial both segments play their part is glamorizing the skyline of Gurgaon. Let us take a closer look at both these property segments.

Residential Realty

A recent study suggests that over the last one year, Housing Projects in Gurgaon have witnessed a price rise of more than 30%. Even after the slowdown of last year, such rate escalation is commendable. But there is also a flipside to this- Gurgaon has also presented the highest stock of unsold inventory in the whole of NCR. This is the reason why developers have now slowed down in launching newer properties. Supply for good quality homes in the popular localities is now slower. The increase in demand is not because of the availability of quality homes but it has been triggered by

How Will Raising Minimum Wages Affect Rentals?

How to put together and use a group to accelerate your business:

I have been part of several mastermind groups, with nothing but positive results. Sure it can be a hassle to structure it and it does take time, but my experience is you will make a significant amount of money that can be directly attributed to participating in your group. The first mastermind group I was part of pushed me to buy a 4-plex and two du-plexes, which I still own today. I have made thousands on the rents and hundreds of thousands equity from appreciation. These were deals that I put together with no down payments, and I would not have pulled the trigger or structured them the way I did without the help of my group. A support group is especially important in this industry. Real estate investing can be a lonely business, and it is important to have the social aspect from like-minded people.

Here are some tips to a successful mastermind group:

People matter: Picking the right people, or forming a group with the right people is the single most important part of a successful mastermind. You also need to be willing to make a change if you

Creating a Successful Mastermind Group

How to put together and use a group to accelerate your business:

I have been part of several mastermind groups, with nothing but positive results. Sure it can be a hassle to structure it and it does take time, but my experience is you will make a significant amount of money that can be directly attributed to participating in your group. The first mastermind group I was part of pushed me to buy a 4-plex and two du-plexes, which I still own today. I have made thousands on the rents and hundreds of thousands equity from appreciation. These were deals that I put together with no down payments, and I would not have pulled the trigger or structured them the way I did without the help of my group. A support group is especially important in this industry. Real estate investing can be a lonely business, and it is important to have the social aspect from like-minded people.

Here are some tips to a successful mastermind group:

People matter: Picking the right people, or forming a group with the right people is the single most important part of a successful mastermind. You also need to be willing to make a change if you