Archive for August, 2011

Real Estate Investment – Construction Loans

Friday, August 19th, 2011

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Sometimes you see a home and know it would sell for more if it was rebuilt. Other times, you see a piece of land and can envision the perfect building on it. Then big question is where do you find the real estate investment capital to build this high investment returning property? Most businesses and individuals turn to construction loans.

What is it?

A construction loan is designed as a short term loan to cover the costs of constructing or building property. It is a harder loan to get due to the lack of touchable collateral. The loan is based upon the value of the completed project once the building is done. For some businesses and individuals, loaning institutions may require a larger down payment, deposit, or cash infusion to secure the loan. This makes the person taking out the loan financially invested in the property and more likely to finish the project. The cash infusion also helps to limit the amount of money the bank will have to recoup should the loan be defaulted on.

How does it work?

In the loan agreement, the bank will work with you to set up certain times and stages the project must be at to make a draw on the funds. The remaining money is put in an interest bearing account. The building interest in this account is used to make payments on the loan. At the end of the project, the loan is called in on, and the person that took out the loan must make payments on it.

Numbers talk

The interest rates of construction loans are pretty high due to the short termed nature of the loans. However, there are some loaning institutions that will offer individuals construction loans that turn into mortgages once the property receives its occupancy permit. These are known as construction-to-permanency programs. There is another option to help reduce the amount of interest on a construction loan. Some institutions offer rate-lock agreements that keep the interest rates at a particular rate until a certain date. The only problem with that is properly predicting the finish date of the project. If you don’t leave any wiggle room, chances are you may end up paying a higher amount of interest and still not be finished.

If you are going to do any building, your best option is a construction loan. However, if you don’t qualify for one or cannot find a granting financial institution, there are other types of loans and financial institutions out there you can try.

For more information on real estate investment financing or other real estate investment concerns, look us up at Homesvestors.com. We also have information and tips on real estate franchise opportunities.

T.E.A.M. – Together Everyone Achieves More!

Thursday, August 18th, 2011

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Peter Drucker, the legendary management consultant and author says this about leadership: 

“The leaders who work most effectively, it seems to me, never say ‘I.’ And that’s not because they have trained themselves not to say ‘I.’ They don’t think ‘I.’ They think ‘we;’ they think ‘team.’ They understand their job to be to make the team function. They accept responsibility and don’t sidestep it, but ‘we’ gets the credit…this is what creates trust, what enables you to get the task done.”

Today I want to put the focus on the power of teamwork, because as we all know: Together Everyone Achieves More!

Cheaper to Start Over?

Wednesday, August 17th, 2011

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When you are investing in real estate, there are times when the land the building is on is worth more than the actual building. In some cases, it’s just easier and cheaper to tear down the existing structure and to start all over again than to renovate and bring a home up to code. If you are considering real estate investment, be sure to look at the amount of money it will take to get the property in condition to rent or sell. You may pay too much to renovate if the building has these characteristics:

Condition: You know the home needs renovation or tear down if the rooms are too small, and the ceilings are very low throughout. Families these days need specialty rooms. If the house lacks a home office, master suite, or family room, it needs some drastic renovation. Families also want lots of space and big rooms to live in and entertain. If there isn’t an open floor plan or any easy way to open the existing one up, you may spend too much money trying to renovate. In addition, the structure of the building and the foundation play key roles in deciding whether to renovate or tear it down. If there is a lot of repair required, tear it down and start over.

Location: Where is the house located? If it is in a great neighborhood in the city, tearing it down and starting over is a good idea. If the house is tiny and old house but on a good, large piece of property, starting over may bring a greater return on your investment dollars. If other houses in the neighborhood have been torn down or majorly renovated, chances are the property will be better started over. The home is really a candidate if other neighborhood homes are larger homes or if the other houses are worth multiple hundreds of thousands.

Financing: If you have a mortgage on the property, the bank may require you to pay it off before you can tear it down and start over. Instead of a typical mortgage, you may have to obtain other types of funding from small investors or other nonbank sources. You may also qualify for a construction loan. The only problem is finding collateral for the bank on a construction loan. There isn’t an actual building to use to secure the loan.

When it comes to your real estate investment dollars, you want to get the most return on your investment. In some cases, starting over will bring you bigger bucks in the end. For more tips  n real estate investment, visit us at Homevestors.com. Remember, we also offer fabulous real estate franchise opportunities that make great real estate investment sense.

 

HomeVestors Real Estate Franchise Team Continues to Grow

Tuesday, August 16th, 2011

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Interest in the HomeVestors Real Estate Franchise Team continues to grow. We have already added more new franchisees in 2011 than all of 2010!

The newest member of our team is Clint Shipp. Clint will be buying ugly houses in the Phoenix area. His real estate mentor will be Development Agent Michael Ludlow. Michael, as an experienced HomeVestors franchise, will coach Clint as he learns the real estate investment business.

The past few months has seen a dramatic increase in the number of people looking at a HomeVestors franchise. Interest has never been higher in learning to invest in real estate. To learn more, go to www.homevestorsfranchise.com

Real Estate Investing Is Looking Better Every Day

Tuesday, August 9th, 2011

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The recent stock market fluctuations (that is the nice way to put it) are reminding people that the stock market is not a sure thing for investors.

More and more people are looking at investing in real estate as more consistent and predictable. Over time, even considering the recent market drop, real estate has shown a consistent upward trend.

Let’s give some specific examples. According to Zillow, single family homes in the US increased in value 56% from 2002 to 2006. Then, the values decreased 38% from 2006 to 2011. The net is still a gain of 12% over 2002.

How did the stock market do during the same time frame? The Dow Jones average peaked in 2002 just over 10,500. It then went up to a high in 2007 over 14,000, an increase of 33%. Where is it now? Under 10,900, a net increase of under 4%.

There are other things that are attractive about real estate. Even the most volatile markets in real estate did not see a 10% drop in values in a month. How about the stock market?

Over the long term, almost every agrees that real estate values will increase. If an investor is looking to roll the dice on a quick return, the stock market may be for you. If you are looking for a long term investment that will give consistent returns, nothing compares to real estate investing, particularly in single family homes!

If you are tired of worrying about your stock values, and would like to learn to be a real estate investor, there is only one choice – HomeVestors®.

One Woman…Many Hats

Tuesday, August 9th, 2011

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The real estate investing business is predominately populated by men.  That certainly does not mean that a woman cannot succeed in the business of real estate investing.  That is obviously the case, and one example of such a woman is Norma Mendez.

Norma Mendez independently owns and operates NorPeg Investments, Inc, a HomeVestors® franchise located in Dallas, Tx.  After working for years in the corporate sector, she was ready for a change.  She had experience investing in rental properties, and when the opportunity came to make a career move, she moved right into real estate investing by buying a HomeVestors franchise.  With some experience buying homes, and some knowledge of the construction industry, Norma began her new career as a real estate investor over five years ago.  Norma wears many hats on any given day.  She is a business owner, manager, home seller, rehab decision maker, home buyer, and multi-tasker extraordinaire (just to name a few).  Though there were some obstacles to overcome in this male dominated profession, Norma is thriving.  She has put together several full-time construction crews who she trusts to perform quality work.  She also enjoys working with her father, who is an experienced carpenter.  Being a real estate investor takes diligence and hard work, but it offers her the flexibility of schedule that she enjoys.

If you have a passion for real estate and a “can do” attitude, explore HomeVestors for opportunities to turn your passion into a reality.  Call 1-800-44-BUYER or visit www.homevestors.com.

Being A Part of Success

Tuesday, August 9th, 2011

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Sometimes an opportunity comes along that you did not expect, but you can not pass up.  Sometimes that opportunity can change your career and your life.  An opportunity like this came along for Charlie Calise…that opportunity was as a real estate investing franchise with HomeVestors of America.

Charlie owns an advertising agency, and he was called in to consult with HomeVestors and to pitch some marketing and advertising ideas.  He had the chance to dig deep into the ins and outs of the company and meet the CEOs.  After spending time getting to know David Hicks and Ken Channell and getting to know the company, Charlie not only had some great advertising ideas for them…he had a new career, too.  Charlie independently owns and operates Equitable Real Estate Investments, LLC, a HomeVestors® franchise located in Dallas, Tx.  When asked why he decided to join HomeVestors, Charlie said that he immediately recognized that Ken and David were dedicated to the company and to doing the right thing by the franchise owners.  Charlie knew that as a real estate investor he would benefit from HomeVestors’ trusted brand name, their lead generating, and their well-earned reputation for doing what they say they are going to do.  What started out as an advertising job ended up as much more, and Charlie is excited to be a part of HomeVestors.

If you have considered a career in real estate investing or if you would like the opportunity to explore becoming a real estate investor, contact HomeVestors at 1-800-44-BUYER or visit www.homevestors.com.  Do not let this opportunity pass you by.

Real Estate Investment – Bringing in the Cash flow

Monday, August 8th, 2011

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As a real estate investment, you bought and fixed up a fabulous 3 bedroom ranch style home. Now you want to sell it, but the real estate market in your area isn’t looking so hot for lending and home sales. Don’t panic! You have plenty of options left to you to start bringing in money on that investment… if you use a seller financing arrangement.

Seller Financing Arrangements

Although financing through a major bank or mortgage lender is the most popular way to finance a home, seller fianancing is becoming one of the hottest ways to sell a home right now. There are several different legal ways to “Seller Finance” a property.

The first one is an all-inclusive mortgage. In this arrangement, the seller agrees to carry the promissory note and mortgage for the buyer, after the buyer places a down payment. This is one of the most common seller financing arrangements used to date.

The second option is a lease. In this arrangement, the seller leases the property for a specific term to the buyer. This is similar to signing a contract to rent. In addition after setting up the terms and conditions, the seller agrees over a period of time to sell the property to the buyer. Usually, the rental payments are put towards the sale price of the property.

The third option is a junior mortgage. Some buyers may have problems finding financing for the entire purchase price of the property, especially if they have to finance more than eighty percent. If the seller wants, he can loan the buyer the difference between the purchase price and the blank loan amount. This is good news for buyers, but it can be problematic for the seller. Not every bank is willing to let there be a junior mortgage. Also, if the property is foreclosed on, the seller can only recoup his portion of the property sale after the bank collects the full amount due to them.

The fourth option is a land contract. In a land contract agreement, the title doesn’t pass right away to the buyer. Instead, it gives the buyer a temporarily shared ownership in the property. Once the buyer successfully makes all of the payments to the seller, the buyer gets the deed to the property.

Whether it’s a land contract, junior mortgage, or lease, seller financing can open doors for buyers and provide workable cash flow for further real estate investment. For more information on real estate investment and other real estate opportunities, look us up at Homevestors.com. We also have information on the investment opportunities available through real estate franchises.

How to Attract the Right Tenant

Monday, August 8th, 2011

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Being a landlord of a real estate investment property is never easy. It is a thankless job, but it does keep your real estate cash flow going. The most important part of being a landlord is picking the right tenant. If you pick a good one, the rent is always on time, the property is properly taken care of, and you can sleep all the way through the night without maintenance calls.

Marketing Strategies

If you want quality tenants, you have to advertise for quality tenants. Look at the location of where you place your ads as well as the wording of the ads.

The locations of your ads tell a lot about your expectations. By hanging them on telephone poles down the main drag, your potential tenants will think you are desperate. Think about posting ads online and in the local paper, as well as on local bulletin boards in town. You can also add signage in front of the property with balloons to attract interest.

By advertising with good descriptive words, like beautiful and executive, as well as the approximate location to local amenities, you provide something for potential tenants to mull over. Here is a great description:

Classy 3 bedroom/2 bath 2-story for rent minutes from great shopping and restaurants. Home features executive style office as well as a full master suite. Rent now for $800, plus deposit.

Perform Tenant Screening

After attracting potential tenants, perform background checks on them. There are many background check programs available that allow you to check references, criminal history, credit, and tenant history. By running these checks, you get a better picture of the potential candidates, and you have a better chance of picking the best possible tenant.

Be sure to include the fact that you will be performing background checks in your marketing campaigns. This helps to eliminate problem tenants before they ever apply.

Make it Must-have

One of the marketing tools real estate agents use is an open house. Have an open house for your rental property. By showing your property at an open house, you are allowing many potential renters see it at one time, and you create a need to apply now for the home. This creates interest in other rental properties you might have as well, and it gives you a list of potential candidates you could send information to about upcoming properties.

When you hand them the rental application, you can also hand them a handbook with all of your rental guidelines and procedures. When potential tenants see how upfront and professional you are, they will realize that they will be lucky to be one of your tenants, and they will work hard to keep being a good one.

For more information on every concern for real estate investors, including real estate investment and real estate franchise opportunities, contact us at Homevestors.com.

Short on Investment Time?

Monday, August 8th, 2011

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Recently, the stock market has been dramatically up and down due to our country’s economic affairs. It’s easy to become overwhelmed as an investor and feel like you are always short on investment time. There are several ways to keep from having to invest every waking moment hanging on to the market’s daily rise and fall.

Diversify

The most important way to keep from running out of time is to diversify your investments. By varying where your income or cash flow is coming from, you don’t have to stress as much if one source is not doing as hot as the others. Do not put your money into one market, one house or one stock. Your money will be safer when it’s spread out, and it will have greater growth potential.

Real Estate

Become a real estate investor. Real estate is not going to disappear. Everyone needs a place to live or work, and over time, the rent or lease will pay you back more than what you invest in it. The more real estate locations you invest in, the greater your cash flow will be.

Stock Market

Invest in general indexes and not as much in individual stocks. In general indexes, the values rise and fall together. Individual stocks may rise or fall dramatically, and there is nothing else to compensate for it. After investing, ignore the stock market. When you look at the short-term performance of the market, you are more susceptible to your emotions and decisions made from fear. Riding the market over the long term reaps more benefits.

Less Risk

Invest in safe investments like CDs, bonds, and money market accounts. Although these do not grow quite as fast as other investments, they also do not fluxuate quite as rapidly or have the greater potential for loss that other investments have. Leave them alone, and they’ll grow in interest over time.

Evaluate

Choose a day two to four times a year to sit down and evaluate the state of your investments. Make a projection for where you would like to see your money or investments go. Then, adjust your investment plan accordingly. By limiting your assessment to a few times a year, you limit your investment jitters and keep a level head in financial concerns.

Real estate investment, as well as other investments, is a great way to diversify your cash flow. The hardest part to investment is patience. You know what they say, “Leave it alone, and it will grow bringing income behind it!”

For more information on investing and real estate investment, look us up at Homevestors.com. We also have information on the fabulous investment opportunities in real estate franchises!