Facing Foreclosure

   

 Hi Prospects & Friends!

Year end is near, and many of us are ready to start the New Year off right. Some of us are tangled up in foreclosure or facing foreclosure, and have very limited resources or sources to save the property. The best thing one can do is learn your foreclosure timeline in your state, and once you get that information, then next contact your lender and either;

• Reinstate your loan
• Modify your loan
• Sell your home

If all else fails and you can't get the money fast enough to reinstate the loan, or get the application done quickly and timely enough to the lender to do the modification, then sell the property. What you don't want is the sale date to post with an actually date, because by then things will start to escalate with the lender and their foreclosure process, and your timeline will get more aggressive with how to get out of the foreclosure, and not lose the property.  So key here is to know before you contact the lender, what you're planning to do to prevent the foreclosure, and don't wait till you're told you have a sale date to take action. 

Over Pricing Your Property

  

 Hi Prospects & Friends!

Over pricing your property isn't a good idea at any given means, and it's even a worse idea if you end up in a bad market while doing it. We all want the best price for our property, but in reality market conditions actually have much of a bigger influence on what our property is worth versus what we think. You can make top notch repairs and improvements to your property, but it's a waste of money if your selling it in a bad market with:

• Neighbors and close by markets discounting their properties for quick sales.
• Foreclosures, shortsales, and loan modifications occurring more than normal proximate to your property and nearby market areas 
• Investors buying properties as is to buy just to remodel and rent right back out. This technique actually profits the investor owner doing this, but it devalues the next owners property if the investor decides not to sell the property fixed up. Example would be the investor buys a property in your market area as is and pays cash, while decides to remodel but not resale for immediate gain, but rather wants to lease property back out. Well this sales comp will affect the other property values, because it was bought as is, and it can't be ignored when analyzing your property values if it's comparable. If it's not comparable then it won't affect you.
• High Mortgage rates 
• Been rezoned in a 100 year special flood zone, or in any flood zone. This will discount your property no matter what remodeling you do. Best to know if your property is in a flood zone before you buy it, so you can discount it then.
• In a unrestricted community, but has some laws restricting certain business uses. This can really affect a properties value if you didn't research the property when you bought it. Example would be Sam bought his property 15 years ago. It was nonconforming and grandfathered in, and he has decided to sale it as a commercial property, which has allowed him to realize a 50% gain. Well new buyer decides to make offer on property thinking they will be able to use it as a daycare, but when buyer receives the updated zoning and deed restrictions they're informed they have to use it as is in it's nonconforming grandfathered use or tear down and use as SFR. Current owner realizes this issue will discount his property if appraised, and pulls off market and decides to rent out until get approval from their zoning committee to get rezoned as commercial, and hope it gets approved. 

These are just a few issues listed that could affect a already over priced property. Key here is to always factor in market conditions, and research the property thoroughly before you decide to sale it. Properties change just like anything else. You could be just fine while living in it as you have or even using it as commercial, but if things have occurred under your radar you never knew ocurred, you could affect your own properties values, and not even know it. No one wants their neighbors going to board meetings with a majority vote blocking other neighbors from doing things to their properties they thought they were allowed to do in the past. Attend those meetings, and if can't stay on top of the changes in your community. I recently ran across a MLS property where it went from $800,000 and reduced to $425,000. The agent said in comments "discovered bylaws have changed the use on this property and it's residential and can't sale as commercial like thought". Well I bet the seller is quite angry about this, since it's a lot money that they lost, but like I said research and stay alert with your community while don't overprice, and all will go well. 

Buying A Restaurant Business

 

 Hi Prospects & Friends!

Buying a restaurant business can be a great business endeavor if you know the aspects and handlings of the restaurant business, as well as have the appropriate assistance. When buying a restaurant business some things to take into consideration for analyzing as well as who would possibly needed to be hired would be:

• Financial Statements, Balance Sheets, Income Statements
• Appraisal of the business fixtures, and the business to make sure you're not over paying for it.
• Real Estate Attorney
• Real Estate Broker
• Business Broker
• Inspector
• Lender
• Insurance Company
• Title Company

Depending on your particular situation for your restaurant business, as well as where you're within your negotiated contract, you may not need all these items listed, but it would be wise to make sure you do realize having any of these will allow for your contract to go smoother, once you pin point who will benefit you better in your restaurant business contract. So in conclusion buying a restaurant business doesn't have to be difficult, if you know who you should be approaching to assist you from the very beginning. 

Buying Down Mortgage Rate

  

Hi Prospects & Friends!

What are discounted points, and how would you use them? Discounted points are actually points connected to your mortgage rate that you pay for to buy down your interest rate offered to you from a mortgage company. These point can be costly, and while it does look enticing to buy down your interest rate, it would make better since to only buy them down if you will actually save money from your loan. Example would be Tom wants to buy an investment property and is quoted an 9% interest rate for his loan. Tom knew he would have to pay a higher interest rate, because of his property being an investment property, and he also knew, because of the current state the economy is in with inflation issues, and federal funds rate being raised to stabilize the economy, which this rate affects the other rates on loans. So Tom's loan officer offers Tom the numbers and says for each rate but down it will cost you $1,000. Tom does the numbers, and calculated it will only cost him an additional $3,000 to buy down his interest rate to 6%. So in this case Tom gives the ok to loan officer to do this. Once the interest rate is bought down to 6%, Tom knows this will be his new fixed permanent interest rate. So in conclusion buying down points can work well if;

• Economy is unstable
• Mortgage rates are much higher for your property than would normally be.
• You can afford to pay the buy down point costs.
• You're not just doing it, because it's a "norm" or pressured too.
• You've done all the research on discounts points, compared all the lenders costs buying them, and you understand what you're actually doing in first place asking to buy down your rate with points.

So staying alert with some of these key tips will help assist, when thinking about buying down your interest rate.

Commercial Office Holdover Fees

 Hi Prospects & Friends!

When one leases a commercial office space, a key factor to know upfront is understanding holdover fees. If you're not familiar with holdover fees they will be explained in this post. Majority of landlords want to recoup their rent costs if you stay beyond your lease with a expired one or even not moving out on time if don't renew. What happens is holdover fees will generate against you coupled with even one months rent and you will be responsible for these fees. Example would be Mary's lease expired June 30, she doesn't renew and didn't move out in an timely manner out of her office space, and moved out July 2. The landlord sends her the July statement and she explodes when she sees her rent being charged as a holdover fee for July and another charge for Julys rent. Mary assumed 2 days wouldn't be a issue since the movers came late, but she didn't realize her landlord didn't view this as a simple just 2 days over. Best thing to do in cases like this in commercial office leases are if not going to renew;

• Contact your property manager and let them know well in advance your not renewing, as well as send them an email stating this along with the pictures showing your space is vacant when it's empty by your expiration date.
• Make sure you don't slip past your expiration date by even 2 days, it will cost you holdover fees and another rent payment.
• Don't damage the space while moving out, this will cost you the security deposit as well as holdover fees if the landlord thinks you did this neglectly. 

So if you apply these key factors against your commercial office lease move, you won't have any issues and will even walk away with a payment "your security deposit".

Self Storage Facilities

 Hi Prospects & Friends!

Self storage facilities are properties, that have within them separate divided units of different sizes that are able to store our things. Most of us have garages or out buildings to handle this task, but their are other options to use and self storage facilities are one of them. When deciding if it's worth to rent a self storage facility, always compare the prices for:

• Climate Controlled
• Non Climate Controlled

when analyzing this variable. Reason for this is a lot of the storage facilities will charge a cheaper price for a climate controlled unit varying it's location in the facility. So always pay attention when deciding what to rent, because why would you pay same or even higher price for a non climate controlled unit against a climate controlled one? Another thing to take in consideration is, majority of self storage facilities operate their rental units on a month to month basis versus a regular yearly or more lease, as well as the rates may fluctuate monthly or semi annual or quarterly, or etc. Knowing this information is key before you accept the lease. Self storage facilities can be a wise decision for leasing reasons, if you're crammed for space elsewhere or want to downsize, but not ready yet to lease or buy something bigger.

What Is NOI?

 Hi Prospects & Friends!

Whether you're a property manager or an investor it is wise to know what NOI is. Any investment property will have an NOI if you're generating income from it. NOI is "Net Operating Income", which is the income left after all expenses have been paid. So if your gross income is $6,500/month and your expenses total $10,500 you have a negative NOI and need to either adjust the income generated, reduce the expenses or sale the property since you have a -$4,000 monthly loss. Sometimes a negative NOI can be generated by a bad economy so best way to avoid a negative NOI is to just do your homework on the investment by analyzing the financial income statements, GRM and plugging in the numbers for the I=V/R equation. Doing that will detour you from buying the investment in the first place and avoid the negative NOI.  

Real Estate & Recessions

 

Hi Prospects & Friends!

Real estate always gets affected when recessions occur, because recessions affect interest rates, jobs, credit, and overall the economy in general. Knowing how to prepare for recessions go hand in hand against the real estate itself. Meaning know before you decide to engage with a real estate activity, how far on the recession scale will it get affected. Looking at the economy as of now, I think it's cloudy and I agree with majority of the economists we're heading towards a rolling recession. Whether you're a

• Buyer
• Seller
• Landlord
• Tenant
• Property Manager 
• Appraiser
• Loan Officer
• Inspector
• Developer
• Builder
• Escrow Agent 
• Consumer
• Company

staying alert on how recessions affect the real the estate industry will keep you within means of what you can tolerate against your real estate decisions, when time comes for you to make them. Interest rates and credit play major key factors in how recessions affect against the real estate, and knowing how to apply these key factors against your real estate decisions is key in surviving recessions affecting the real estate. So continue to stay alert on the general economy itself, and you should be ok.

Land As An Investment

 Hi Prospects & Friends!

The current changes in the real estate market, have many wondering where are other possibilities to invest in real estate besides rental properties? Well proposing land as an investment is an option, and many don't bother to use land as a holding investment, since it doesn't have a property on it generating monthly rental income. Land is a very excellent source of investment income if you look at is a holding investment in revitalization areas. Land can by far generate significant value appreciation if applying it with revitalization techniques. So next time you run across a parcel that fits in your investment perimeters, don't ignore it, because if you do you will regret passing on it if you find out the builder or developer beat you to it dirt cheap, and then held the land as an investment to build on, so they in return could immediately make you pay the higher land price for re-entry for the current available parcels.

Inflation & Real Estate

 Hi Prospects & Friends!

The economy is still showcasing signs of high inflation, and this economic factor is still affecting the buying and selling sides of real estate. If you're sellers and listing your property on the market understand the longer your inventory stays on the market, the buyer maintains bargaining purchasing power. If you're a buyer seeking to buy a home, understand mortgage rates are still not that low, and you could be looking at a higher interest rate than just 1 year ago. Overall don't let the current economy steer you in another direction you wouldn't elsewhere turn, because if you let this happen, you could miss out on many golden real estate opportunities, as well allow it to cost you whether you're a buyer or a seller.