Association Fees for Condos and Co-Ops in Real Estate Investing

real0

 

Rules and bylaws are abundant when dealing with condos and co-ops. Although you can encounter covenants and restrictions attached to typical single family homes, you can count on a long list of rules for condos and co-ops. For example, you might not be allowed to alter the address numbers on your exterior door or change a light fixture by your exterior door. Your choice in paint colors for the exterior of your unit might be limited. And having pets in your own space might be prohibited. The power of the rules is strong, and the number of rules can fill pages of paper. Once you are ready to buy a condo or co-op as a real estate investor, look closely for all of the restrictions that may affect your plans.

Association fees (charged for maintenance of a condo or co-op development) and special assessments (levied when some improvement or repair is needed or desired) have the potential to ruin your investing budget when you own a condo or co-op. You have no real control over the amounts of association fees and special assessments, which might have a disturbing effect on a building’s cash flow. You may have to vote in how things will be done, but your vote will not, by itself, allow you to control your own destiny with a condo or co-op. All you can do is hope for the best. You can look at historical data to build a reasonable assumption of what to expect in fee increases; unfortunately, a development that has been stable for the last ten years could go fee crazy after you buy into it. You simply have no guarantee, unless it’s in your purchase agreement, to prevent fees from increasing regularly. This one factor alone is enough to scare some investors away from condos and co-ops.

 

Association fees usually are fair. They cover a variety of needs and relieve property owners of maintenance headaches. This is an advantage to investors when the fees are realistic and stable. However, because most developments don’t have an annual cap on association fees, owners are at risk. And it’s entirely possible that the fees could be raised on a more frequent basis than annually. For these reasons, be very careful of the fee structure if you buy a condo or a co-op. When you review the documents on a development, determine what the association fee covers. For example, do snow removal and lawn care for the development come out of the fee? Dig deeply to see exactly what your money pays for.

 

Special assessments usually are levied only for big ticket items. If a building needs a repair that is costly and outside the scope of association fees, the price of the repair is placed on the shoulders of the owners of condos and co-ops within the development. Sometimes improvements are not necessary, but desired. For example, if the governing group decides to install a swimming pool, you could be required to pay for a portion of it, even if you don’t support the decision or plan to use the amenity. In some cases, the debt is divided equally, but it also may be divided on a percentage basis, based on the degree of ownership. Have your lawyer pay close attention to all documents, but get a particularly strong opinion on association fees on special assessment regulations.

 

Start Investing in Real Estate as a Young Student

real8

 

When in college, the last thing you are probably thinking about is investing. Time spent not up all night studying or working at a part-time time job is taken up with the little social life you have. But ever think about how much money you will spend over your academic career on rent and having nothing to show for it upon graduation. One day I wondered if there was a better way and begin to do some research on the home prices in my area and in real estate investing and I learned a few interesting facts.

The total rent you (and possibly roommates) pay for rent every month on your apartment or house is in most cases equal to or higher than a mortgage payment at this time of low interest rates of the house with very little down. What does this mean, you are most likely paying off someone else’s mortgage while they earn a little profit and huge equity on the property. This certainly seems like you are losing big money renting and its true. If a person takes out a mortgage for a house with as little as 5% down for 20 years and then pays for the mortgage and other associated costs , in 20 years, he would own a house for that small initial down payment. Even selling the house for the price that he bought it , would be an incredible profit (even though he will make an even larger profit for reasons I will mention later).

 

So after looking through some of the realtors websites, I found some houses at 150k or less which had 5 bedrooms, even a couple with the houses already split into apartments with own kitchen, bathroom and electrical meter in each apartment. These types of houses are the best investments. After using some online mortgage calculators and a bit of number crunching , I found that in some cases I could pay for more than the mortgage if I had 4 tenants in the house, I myself could live “rent-free” there. That’s a pretty good deal , especially if those tenants were some reliable friends and you wouldn’t even be dealing with strangers.

 

This sounds pretty good right ? , but what about your done college in say 5 years and you want to then go and get a house with you and your special someone. Well , you have two options , both which would show you how good of an investment buying a house is. The first option is selling the house , Well guess what all those payments that your tenants payed gave you a nice equity on the house. Every case is different about what you can make , but in may case , I could make $30,000 dollars profit from the equity earned over just 5 years after me living for “rent-free” all that time. That would be a nice payment on my student loans. The Second and more profitable option is to continue to rent out the property as long as you wish before selling. After the mortgage is paid off , then all those rent checks are pure profit and you now own a house after paying very little out of your own pocket.

 

And it gets better, on average, it seems that houses go up in value 5% every year , so you can imagine the profit you could be making in 20 years time. Anyways I hope I have at least inspired you to do some research on the topic and see if its the right investment for you. Also, remember this little fact , 76% of the world’s millionaires are real estate investors.

Home Buying Process: Real Estate Guide

real7

 

Buying a home can seem like a large task up front but break it down in to simple steps and it’s really not what it seems. The entire process can be done with little to no stress if you take it step by step and have the right expectations. Here is the 5 step process I use when purchasing and helping others purchase a home.

1.Go to the Bank – Search around for different loans. There are many different types out there and you need to find the one that works for you. You want to find out what options you have and how much you are going to spend on your new home. Starting out by taking this step will help you and your Real Estate Agent find properties you can afford. Many home sellers will want to see a pre-approval from a bank before they start working with you so you need to be prepared with one.

 

2.Get an Agent – As a buyer you don’t pay an agent (that’s fee comes from the seller) to help you so there’s no reason not to have one to help you out. Ask around to find out who people recommend. I suggest staying away from relatives in this process. You’d hate to have a problem occur during the home buying process and lose a relationship because of it. The realtor will help you come up with homes that are suitable to you and they generally are the first to know about new properties being listed.

 

3.Find a Property – Yes, your agent will be looking for a house for you but you can also put in some time trying to find what you want to buy. Spend time online researching prices and home conditions. This way you’ll know what to expect when your realtor comes to you with some homes to look at.

 

  1. Making an Offer – When you’re buying a home you always have the upper hand. Don’t seem needy when making your offer. Always find areas of the home to exploit in order to knock the price down a bit. Especially in today’s market, you want to play a bit of hardball. Many people are in a NEED TO SELL situation so make sure to use that to your advantage. Remember, when you make an offer it’s just an offer. Don’t go falling in love with the house yet. If you do, you’ll be let down often. Another tip when making an offer is to always make it contingent on an inspection. This way if you find something you dislike when you have an inspector come through you can still back out of the deal.

 

5.Get an Inspection – Once you’ve found the perfect home and have an accepted offer you will want to get a professional inspection done. Never skip this step when buying a home. This will help ensure you understand everything about the property you’re buying. You’d hate to find any major or minor problem after the purchase is made. It may cost a bit extra but it’s a great way to get a piece of mind when making a purchase this large. Plus, if the inspector finds something that needs to be fixed you can always rewrite your purchase offer. In the end the inspection can help you save when buying a home.

 

Follow these 5 simple steps on your next purchase and you’ll find the process of buying a home to be a happy one.

Buying a Foreclosed Home

real6

 

In today’s economic times, the foreclosed home market is huge. If you are in the market to buy a home for yourself or to use as a rental unit, now is the time to buy. Buying a foreclosed home is a great investment for the real estate community.

To explain foreclosure, it is when a lending institution uses a legal process to terminate a property owner’s right due to their inability to pay their mortgage. It is a lengthy process but once a foreclosure has been delivered, the families leave immediately. This means all foreclosed homes are vacant and ready to be lived in upon purchase. That does not mean that all foreclosed homes have been cleaned prior to moving in.

 

Because the lending company wants to sell the house quickly, the starting price is normally lower than market value. The key to buying a foreclosed home is to buy it as far below it’s assessed value as possible. This will help secure a larger profit margin when you sell the property. If the property is being bought to ‘flip’, the lower the price paid – the better the chance of selling it and making a bigger profit.

 

Purchasing a foreclosed home is relatively easy. The hardest part is tracking or finding the foreclosures in your area. A good website to use is www.foreclosuredeals.com. Your local county courthouse is another good resource. The legal section in your local newspapers also prints the foreclosures and when the foreclosure auction will be held.

 

Before you buy your first foreclosed home, do some research. It is very important to understand your states foreclosure laws. This information can be found on your state website and possibly on your county’s website. Individuals at your local county courthouse will be able to advise you were to find the information.

 

If you are buying the piece of foreclosed property as an investment, there are a couple risks. If you pay too much for the property you may not be able to sell it in a timely manner and you may not make as much profit. So be careful and do your homework.

 

Besides the price on a foreclosed home, there are other benefits. The first benefit, knowing there are no liens against the property as the lending institution will have taken care of that. The second, knowing there are no delinquent taxes.

 

Once you have found a foreclosed home to purchase, supplied and secured financing, you are ready to place a bid on the home. Bids may be made at a foreclosure auction or by sealed bid. There are times that a local realtor may submit your bid for such a property. To optimize the foreclosure situation start out bidding low to maximize your investment.

Is Real Estate Still a Good Investment?

real5

 

Over the past 2 years real estate prices have dramatically declined all over the United States. The foreclosure rate is higher now as compared to the past few decades. Some banks are even going under due to what’s happening in the market. We are officially in a recession, and there is even talk that the economy is headed for a total collapse. While none of us can predict the future we can look at what has happened in the past to help us make our decisions now.

Some people are wondering if real estate is still a good investment. Yes, real estate is still a good investment because while prices may go down, they typically go back up again over time. Real estate is still one of the best investments because it tends to hold its value longer than other investments. If you currently own a home and you’ve wanted to sell, its best to hold on your house for the time being. You want to maximize your profit and sell when the market changes and yes it will change. Back in the 1980’s prices plummeted due to high interest rates and a poor economy, similar what’s happening now. In time things picked back up again and homes retained more value.

 

So if you do own a home it’s best to hold on to your house and simply watch the market. If you have money to invest now is a good time to buy more real estate. If you buy low now later on you may be able to cash in on your investment in the future. Currently there is a wide variety of choices right at your finger tips. Rather than worrying about the poor economy why not take advantage of the situation.

How to Find the Best Real Estate Investment Club for You

real4

A real estate investment club can offer excellent opportunities for real estate investors to further their education, network with other investors, find real estate service providers such as real estate agents, attorneys and general contractors, and to find investing partners for real estate projects. However, you do need to do your homework before you join and pay any dues to a real estate investment club. Some clubs are formed with the main intent to pitch courses and products to their members. Other investment clubs may focus on areas of interest that do not match up with yours. So it pays to do your research before joining.

To find a real estate investment club you can search the internet and also local real estate publications. Spend some time thinking about what you would like to get out of an investment club. Are you interested in specific types of real estate investment opportunities? If so, you will want to check to see if the real estate investment club covers this type of investing. Are you looking to further your education, looking to network with other investors and real estate professionals, looking to form investing partnerships for real estate projects? Once you know what you are looking for, it will make evaluating a real estate investment club much easier.

 

Before joining a real estate investment club and paying any membership dues, ask if you can attend a few meetings for free. Find out what the main purpose of the club is. Is it to further the investing education of its members and provide networking opportunities, or is its primary purpose to pitch products and courses? Look at the line up of speakers and the topics that are covered in the meetings. Are the topics on practical, real world techniques or risky, unproven strategies? Also check to see if the club is primarily made up of real estate service providers such as real estate agents, loan officers and attorneys, or is the core membership made up of serious, experienced real estate investors? Try to talk to members to get feedback on what the real estate investment club is like. If you do your research ahead of time, chances are you will be able to find a good real estate investment club which meets your specifications.

 

A real estate investment club is an excellent way to network with other real estate investors and share experiences, tips, and resources based on real life experience. It is a great way to become familiar with real estate investment opportunities in your local area and to become familiar with who the major players are. If you do decide to partner with others on investment opportunities or hire service providers be sure to check references and credit history before making a final decision. Provided you do your research and investigate any clubs, potential investment partners, and service providers ahead of time, a real estate investment club can really enhance your real estate investing opportunities and help you become a well educated, successful real estate investor.

A Guide to Water Rights in Real Estate Transactions

real3

 

Water is one of the world’s most valuable resources, so it’s only natural that water rights should be considered when making real estate transactions. Water rights cover the use of ground water, as well as streams, rivers, and lakes. In addition, water rights are required to be able to construct a structure such as a boat ramp or dock ramp over the body of water itself.

Water Rights in Eastern States

 

Typically, all states east of Texas with the exception of Mississippi follow the riparian doctrine for water rights. This doctrine was developed during the Spanish colonial period and incorporates elements of English common law. Under riparian water rights principles, landownership is expressly tied to water rights. A property owner can not legally sever the water rights for land from the property rights.

 

Essentially, riparian water rights permit anyone who owns land which faces a body of water to use the water from it. Riparian water rights allow the property owner unlimited usage of the water surrounding the land as long as the flow of water is not altered and the water itself is not contaminated, although rights can not be used for long term storage such as the formation of a reservoir. In the case of a navigable stream or river, the property line is considered to end at the water’s edge. The state retains rights to the land under the body of water and the waterway itself is considered a public highway.

 

Water Rights in Western States

 

Western states typically follow the prior appropriation doctrine when determining who has the legal right to use water on a particular piece of property. Prior appropriation is based on the principle of “first in time, first in right” to settle disagreements over ownership of water.

 

Beneficial use is a key principle under the prior appropriation doctrine. Examples of beneficial use include growing vegetables, supporting wildlife, enhancing area recreation opportunities, or commercial uses such as growing fish in hatcheries. Water usage must be reasonable, without waste, and approved by the appropriate state controlling agency in order to qualify.

 

Selling Water Rights

 

Water rights encompass the right to use ground water, streams, rivers, and lakes for recreation, farming, or commercial purposes. Depending upon where you live, water rights to a particular piece of land can be worth several thousand dollars to prospective buyers.

 

Western states that use the prior appropriation doctrine to determine water rights allow these rights to be sold separate from the property itself. For landowners with a significant acreage, it is advisable to seek the assistance of a real estate property attorney before selling water rights. Farmers may be tempted sell water rights when it seems they can make more money from giving up their rights than by growing crops. Since water rights have a sizable impact on future property values, however, this is a decision that requires careful consideration.

 

Many people find themselves wondering how water rights and mineral rights are related to real estate transactions. In most cases, water rights and mineral rights are considered to be separate entities. Property owners are legally allowed to sell mineral rights to a piece of land without selling the water rights. However, many speculators and energy firms ask to purchase water rights when buying the mineral rights to property. Landowners who have previously sold mineral rights should review their contracts carefully to make sure they still own the water rights for the property.

 

Buying Water Rights

 

When buying real estate, it is important to make sure water rights are transferred with the sale of the property. Transfer of water rights should be conveyed in the same manner as a normal property deed. In most states, once a property owner has established beneficial use of the water, he is not required to give up water rights with the sale of the property. For this reason, you must keep in mind that appropriators are not necessarily landowners located near the source of the water in question.

 

If a particular piece of property does not have water rights, the owner may be able to buy water rights from another property and have them transferred. However, the transfer of water rights for a different purpose or at a different location requires permission of state authorities and public notice of the intended transfer. If no individual files a formal protest of the transfer, state authorities can then choose to either approve or deny the application.

How to Buy Las Vegas HUD Homes

real2

 

Las Vegas, Nevada, commonly known as Sin City, is well known for having many foreclosed properties for sale. HUD buys some of these foreclosures because they were backed by FHA before going into default. This a big financial loss, so HUD needs to resell these homes to members of the public to get back that money. Those trying to scout out cheap homes in Vegas can find Las Vegas HUD home listings online through a government website. These potential buyers can then find what they are looking for and place bids to buy HUD homes in Las Vegas through a Vegas real estate broker approved for HUD bidding.

Step 1:

 

You can easily find these HUD foreclosures in Las Vegas by going to hudhomestore.com/HudHome/Index.aspx, which is a HUD-owned government website that lists HUD’s properties for every state. In this case, select Nevada and then Las Vegas to find the HUD Las Vegas homes in this area.

 

There is a wide range of houses for sale in this area, so you may also choose to narrow your search for Vegas properties by several other factors, including cost of the homes, size by number of rooms and other characteristics. You can choose those options with the search tools at the top of the Las Vegas HUD homes search results.

 

Step 2:

 

Only a Nevada real estate broker will be able to place HUD bids for the properties you seek to purchase. Thus, you need to go back to the same website’s home page and click on “Find a Broker” to get to the broker/agent listings. Select Las Vegas to find a broker in Sin City that can help you bid on HUD homes in Las Vegas.

 

Step 3:

 

Most HUD Las Vegas property buyers do not have the actual cash to buy a home. If you fall into this group, then you need to speak to Las Vegas mortgage brokers to get a home loan.

 

Step 4:

 

Once your finances are in order, ask your Las Vegas broker to go ahead and start sending in bids to HUD Las Vegas. You might be limited to one bid at a time, so have patience when trying to buy Las Vegas HUD properties.

 

Step 5:

 

When the agency approves your bid, it will send work to your broker. You will then have to submit a deposit and start preparations for paying for the home at the closing. This “closing” will be conducted by a Las Vegas closing agent approved by HUD for home closings.

 

Step 6:

 

The last major step in a real estate deal is to complete the proper local deed filing. In all areas (not just Las Vegas), you should obtain a deed from the seller and file it in the county of the property that you bought. In this case, take your deed from HUD and file it in the recording office of Clark County unless you buy a Las Vegas-area HUD home outside of that county.

 

Sources:

 

HUD Home Listings

How to Buy Atlanta HUD Homes

real1

Atlanta is a very popular place for seeking out cheap real estate. This area tends to have many foreclosed properties throughout the year, and the Department of Housing and Urban Development (HUD) buys many of these houses at the local foreclosure auctions. HUD then sells them to average members of the Georgia public through a HUD bidding process. Buyers can use online resources to search for suitable Atlanta HUD homes. The buyers then hook up with an Atlanta real estate broker approved to submit bids to HUD on Georgia HUD properties.

Step 1:

 

HUD operates a website that lists data and even pictures of the HUD homes in Atlanta. You can access this home-listings government website at hudhomestore.com/HudHome/Index.aspx. Of course, you should look for the map and then select “Georgia” to get all listings for the state. You then pinpoint local homes by selecting “Atlanta” as the city.

 

Now, some HUD home buyers are owner occupants looking for a family home. Others are investors looking to make bucks off of flipping houses. Both buyer types may bid on HUD Atlanta homes, but investors are sometimes excluded from bidding on certain properties. To find the Atlanta properties open to investors, use the “buyer type” search option.

 

Step 2:

 

Atlanta has a slew of real estate brokers and agents. But you need one specifically approved by HUD to place bids on your behalf for HUD Atlanta properties. Select “Find a Broker” on HUD’s site (from the main page). Then, select Georgia or just Atlanta as the city to find local HUD brokers or agents.

 

Step 3:

 

If you need financing for a HUD Atlanta property, you will then need to speak to Atlanta banks or mortgage lenders about getting a loan. This is an important component of your HUD bid.

 

Step 4:

 

Get your Atlanta broker to go ahead and submit bids on the properties that you want. You might be limited to one bid at a time, so it could take a while to purchase an Atlanta HUD home.

 

Step 5:

 

Now, wait for HUD Atlanta officials to accept your bid. Once accepted, then a Georgia closing agent will be assigned to wrap up the sale. However, in the meantime, be aware that you will have to quickly pay a deposit and get ready to buy the house in full at the closing.

 

Step 6:

 

It is very important to protect your property interests in HUD homes in Atlanta once you have completed the sale. The way this is done is by getting a deed from HUD and then filing it in the county recorder’s office where the property is located. So if your property is in Fulton County, you would file there. Otherwise, you would file in DeKalb County or whichever other county your Atlanta-area home is located.

 

Sources:

 

HUD Home Listings

Patrick Mackaronis Presents: Building Your Online Space

Website

The following is a guest post from Brabble Director of Business Development Patrick Mackaronis. Patrick is a champion in the online realm. 

In this article, I’ll continue to discuss the general method you’ll need to use when building your web site. Remember–all businesses are unique, so don’t be afraid to adapt the method to suit your particular needs.

Once you finish planning your web site, you are ready to start building. These are the things you’ll need to do:

  1. Work out your design concept & build template.
  2. Scan/create/edit graphics.
  3. Input code, text, and graphics into your template.
  4. Upload your site.
  5. Test your site.

—-Your design concept

The way your site appears to first-time and continuing users is important to the overall impression you’ll make on your site’s visitors. When I am working on a web site, I usually start out “on paper” by sketching out different designs. Remember to keep in mind that you’ll need to include navigation buttons/links, room for headers and footers, room for the text, as well as any additional features you decide you might need. Once you have figured out the layout for your homepage, you are ready to start building!

One tip to remember when considering your design: Not all web browsers are equal. Although the most common web browsers (Netscape Communicator & MS Explorer) have been consistently updated by their respective companies, not everyone uses the most up-to-date versions. This means that not everyone’s web browser will accommodate JavaScript, frames, and other features that you might want to include on your web site. This doesn’t mean, however, that you should avoid features like frames or JavaScript in your site. Just be aware of some users’ browser limitations.

—-Your site’s graphics

Part of the beauty of the web is that you can combine text and graphics in attractive and useful ways. The graphics you use can make or break your site, so create them carefully. Some tips to consider when creating graphics:

** The size and resolution of computer screens varies, and you won’t be able to build a single page to suit everyone’s needs. The best you can do is to try to reach the greatest common denominator. My suggestion is to work to build your graphics to accommodate an 800×600 monitor.

** Most people surf the web over a modem–56K/V.90 being the fastest modems available. While this speed allows for a faster connection than was available only a few years ago, it still takes a long time for large files (like graphics) to download. To minimize this problem, make sure you set your graphics’ resolutions at 72 dpi (this is the highest that most computer monitors are able to resolve) to keep the size of those graphics files to a minimum.