The Real Estate Investor’s Resource

Turning Intentions into Action

Estate Planning for Real Estate Investors

Traci Ellis, my wonderful real estate attorney friend in Atlanta,  was the guest of my teleclass today on Estate Planning for real estate investors.  Among other things, Traci shared , “Although our mortality may not be our favorite subject, it is an important subject to address because what we leave behind is our legacy.”   By doing a little estate planning now, it can save those you love so much grief in the future.  Without that planning, the state ends up choosing how your assets are handled.  You are not working this hard for the state, are you?

At a minimum, we should all have the following:

1) Will  2)Power of Attorney 3)Living Will or Advanced Directive

If you have children, choose a guardian to raise your children should something happen to you. 

The important information regarding your estate and your wishes should be documented.  A family member or other person you choose should have a copy of the documentation and your attorney may also hold a copy.  There are also online services now to upload these types of documents so that they can be retrieved from anywhere.

Don’t miss our next teleclass with Traci when we discuss the use of Trusts for real estate investors.  Visit www.tranformit.net/eventscalendar to register.

Also, Traci offers an information packed blog of her own -visit it at www.traciellis.com.

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March 27, 2008 Posted by | Real Estate Investing, real estate investor associations, Uncategorized | , , , | Leave a comment

Yes, Investor Funds Are Still Out There!!!

Don’t believe everything you hear.  I’ve heard all kinds of stories from people and the media over the past few weeks about how there is no more money for funding deals; and it’ s just simply not true.   One ezine that came out this week stated that there are no more stated income loans.   Fortunately, on today’s Real Estate Reality Radio Show, Michael Gross of Dividend America Mortgage set the record straight on the lending market for real estate investors.

As for stated income loans, they are still available.  It’s just that you’ll need a 680 credit score or better and you’ll need to verify assets.  What has gone away in regards to stated income loans is the old stated income/stated assets.  It’s now stated income/verified assets.

Construction lenders are a great way to get into deals.  Using this strategy potentially allows you to refinance with a conventional lender and walk away from the deal with some cash in your pocket from the construction loan. 

What are conventional lenders looking for in a borrower these days? 

Safety:  They want to see equity in the property rather than investors trying to pull all of the money out of the property. Michael says leave 30% equity in the property.  If you don’t find a deal with that kind of equity -keep looking ! It’s a numbers game; and there are plenty of deals out there.   If you need to learn how to analyze deals and what to offer to make your deals work, check out www.dealsorduds.com -I developed this home study course to help you do just that.

Long Term Holds:  Lenders want to lend on deals that you are planning to hold.  Producing a signed lease goes a long way. It’s even better to have an appraisal that shows the property as rented or leased.  This strategy works well if you started with the construction loan, fixed the property up and then put a tenant in the property prior to closing on your long term convential loan. 

If you’re sitting back saying, I don’t have good credit, there’s still hope!  The fact that money is available to those with good credit just means that you need to get a partner.  You can partner on deals and apply for loans as a co-borrower with someone who already has good credit.   Finding partners is not that hard -people are all around you that have money and/or credit -start looking for them! 

We talked today about all this and more on the show, you can listen to the show  for more information. 

March 20, 2008 Posted by | Uncategorized | , , , , , | Leave a comment

Property Taxes too High? Here’s how to appeal…

Property Taxes Too High?

Property Tax Assessment Appeals to the Rescue

Are you watching your property taxes go up while your property value goes down?  Somehow it seems that even though property values are dropping, the taxes on property are still going up.  If this is the case for you, then exercise your right to the appeals process; it’s a fairly simple process.

First, you want to compare the tax assessed value of your property to the fair market real estate value.  Carefully check your property tax bill for the tax assessed value.  Then find the fair market value for your property by looking at recent comparable sales.  Real estate agents and websites such as www.homegain.com are good for performing a real estate fair market value analysis.

Let’s say that your property is 3 bedrooms and 2 bathrooms and is assessed at $155,000.00.  You want to look for recent sales in your area of other 3 bedroom/2 bath properties.   An example of the comparables sales in your area might be:

3/2   $138K

3/2   $140K

3/2   $157K

3/2   $165K

How would you make sense of these numbers?  If you just took the average of the numbers it would equal $150K.  

So, what do you do now?  Further define the differences in your property and the other comparable sales.  One way to do this is to use data from a real estate agent and website like www.homegain.com.   Another way is to simply drive by the address of each comparable property (this shouldn’t take much time since they are right in your neighborhood).   When you view the comparable properties, look to see how similar or different they are from your property.   You might find that the properties selling for the higher end prices of $157K and $165K are brick, while your home and those sold at $138K and $140K have siding.  Or you might find that the more expensive properties are larger than yours or have other differences that would make them worth more.  Whatever the situation, it is a good idea to take a picture while you are there to show the differences.

If you’ve found some substantial differences, it’s time to submit your real estate tax appeal.  There is a deadline for the appeals process so pay attention to the deadline dates on your tax bill.  Simply write a letter including your parcel identification number explaining why you are appealing the tax assessed value.  Include your comparable sales documentation, pictures and other documentation. 

You will receive one of two responses to your appeal letter.   Your tax assessed value may be adjusted based on your appeal letter.   However, you won’t always win the real estate tax appeal process that easily; your response letter may be a notice that you are required to go before the board of equalization to further dispute the tax assessed value.  At this point, you have to decide if it is worth your time based on the potential savings.

Don’t forget that the tax assessed value not only affects your bottom line, but if you get ready to sell your house, the buyer will have to consider the tax bill as part of their expense.  The tax amount on the property will impact their monthly mortgage payment, which impacts the amount they can pay for a house.  The simple fact that you have appealed your tax value and that it is in line with the fair market real estate value for your property can save you money now and be a help when you are ready sell. 

To learn more about real estate fair market value analysis, visit http://dealsorduds.com .

March 19, 2008 Posted by | Real Estate, Real Estate Investing, real estate investors | , | Leave a comment