Real Estate Investors need to use an Action Plan.

There is a saying among Real Estate Investor's - "You Make Your Money when You Purchase the Property not When you Sell It."

There are so many things that can go wrong so it is important to make sure you buy the property right.

Smart Real Estate Investors need to develop an Action Plan before they are going to purchase an investment property. This plan should include the following:

• Identify a possible property for investment.
  • Make sure your SELLER is MOTIVATED to do the deal.
• Perform a market analysis.
  • What are going to be your carrying costs for the next 90 Days. Principal, Interest, Insurance, Taxes, Utilities, HOA fees....
  • After Repair Value ARV - What is the property worth after repairs. Look at the COMPS! Yes, the comparables.
  • Calculate your repair costs.
  • Calculate your Fair Market Rent FMR. See if the property is going to cash flow.
    • See previous posting and video about calculating Fair Market Rent FMR
• Secure Your funding for:
  • Purchasing the Asset.
  • Carrying Costs.
  • Repairs.
• Note: Don't forget to pay yourself for all this work you are doing!
• Make an OFFER based on the Maximum Allowable Offer MAO Rule, using ARV, Carrying and Repair Costs.
  • See previous MAO post at Using the MAO rule for determining your Investment Property Offer Price.
• What are you going to do with the asset? Develop an EXIT Strategy:
  • Flip the property for a profit or
  • Hold the property for Cash Flow.

This is the basic action plan which needs to be very fluid. Things change and you need to adapt.

Turnkey Property!

One of the more successful Action Plans we have used is to bundle a Section 8 or Plan Ocho tenant within the property FOR SALE. The tenant is part of the BUYER's Turnkey Package.

TURNKEY means the BUYER simply needs to turn the key to the front door and start making MONEY.

All the hard work has been done for the BUYER:

• Buying a Property that will Cash Flow.
• Rehabbing the property and brought up to Code.
• All utilities are functioning.
• Finding a reliable tenant.
  • We use Section 8 as a great resource for tenants because it is a very popular program for housing.
  • Section 8 Web Sites for listing Your Investment Property.
• Asset Protection strategy is already in place.
• Selling the Investment Property with minimal Closing Costs.
• Optional: Have it already furnished.

Investors should provide a turnkey solution for all their properties they plan to sell in the near future.

BUYERS like the idea of purchasing a property that comes bundled with a tenant.

Action Plans allow for Immediate Cash Flow and no Headaches!

Written by Bob Burns.

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Money in The Bank Baby! Real Estate Investor about.me/RobertKBurns Telephone #: 305-586-5280 email: sec8@planocho.com

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7 Reasons to Use a Land Trust

I was cruising my directory for articles that I have been collecting and I came across this one about Land Trusts. I can't tell you how many times a Land Trust has saved me while taking ownership of a property. If you are a serious real estate investor, YOU MUST master this asset protection method. You will reap many benefits, financially and legally.

The land trust is a very powerful tool for the savvy real estate investor. A land trust is a revocable, living trust used specifically for holding title to real estate. Each property is titled in a separate trust, affording maximum privacy and protection.

Here are seven reasons to use land trust for titling property to real estate:

1. Privacy: In today’s information age, anyone with an internet connection can look up your ownership of real estate. Privacy is extremely important to most people who don’t want others knowing what they own. For example, if you own several properties within a city that has strict code enforcement, you could end up being hauled into court for too many violations, even minor ones. Having your real estate titled in land trusts makes it difficult for city code enforcement to find who the owner is, since the trust agreement is not public record for everyone to see.

2. Protection From Liens: Real estate titled in a trust name is not subject to liens against the beneficiary of the trust. For example, if you are dealing with a seller in foreclosure, a judgment holder or the IRS can file a claim against the property in the name of the seller. If the property is titled into trust, the personal judgments or liens of the seller will not attach to the property.

3. Protection From Title Claims: If you sign a warranty deed in your own name, you are subject to potential title claims against you if there is a problem with title to the property. For example, a lien filed without your knowledge could result in liability against you, even if you purchased title insurance. A land trust in your place as seller will protect you personally against many types of title claims because the claim will be limited to the trust. If the trust already sold the property, it has no assets and thus limits your exposure to title claims.

4. Discouraging Litigation: Let's face it, people tend to only sue others who appear to have money. Attorneys who work on contingency are only likely to take cases which they can not only win, but collect, since their fee is based on collection. If your properties are hard to find, you will appear "broke" and less worth suing. Even if a potential plaintiff thinks you have assets, the difficult prospect of finding and attaching these assets will discourage litigation against you.

5. Protection From HOA Claims: When you take title to a property in a homeowner’s association (HOA), you become personally liable for all dues and assessments. This means if you buy a condo in your own name and the association assesses an amount due, they can place a lien on the property and/or sue you personally for the obligation! Don’t take title in your name in an HOA, but instead take title in a land trust so that the trust itself (and thus the property) will be the sole recourse for the homeowner’s association’s debts.

6. Making Contracts Assignable: The ownership of a land trust (called the "beneficial interest") is assignable, similar to the way stock in a corporation is assignable. Once property is title in trust, the beneficiary of the trust can be changed without changing title to the property. This can be very advantageous in the case of a real estate contract that is non-assignable, such as in the case of a bank-owned or HUD property. Instead of making your offer in your own name, make the offer in the name of a land trust, then assign your interest in the land trust to a third party.

7. Making Loans "Assumable": A non-assumable loan can become effectively assumed by using a land trust. The seller transfers title into a land trust, with himself as beneficiary. This transfer does not trigger the due-on-sale clause of the mortgage. After the fact, he transfers his beneficial interest to you. This latter transaction does trigger the due-on-sale, but such transfer does not come to the attention of the lender because it is not recorded anywhere in public records. This effectively makes a non-assumable loan "assumable".

As you can see there are many creative and effective uses for the land trust, limited only by your imagination!

William Bronchick, CEO of Legalwiz Publications, is a Nationally-known attorney, author, entrepreneur and speaker. Mr. Bronchick has been practicing law and real estate since 1990 www.legalwiz.com

P.S. If you need a good Land Trust attorney for South Florida, contact Paul B. Woods, Attorney at Law, (305) 559-9060, mobile: (305) 803-1818, email: pwoodslaw@gmail.com

Written by +Bob Burns.

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cya MREIA's President about.me/RobertKBurns Telephone #: 305-300-6242 email: rkburns@investmentpropertiesmiamiflorida.com MREIA's Web Page: www.miamireia.com

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