Determining Your Investment Property Value

A good Real Estate Investor is constantly looking for motivated sellers that are offering deals they can make a substantial profit on. Investors have to determine what they are willing to pay for this asset without losing money in the process. There are several problems that can occur with this investment objective :

• Finding Motivated Sellers. In order to make a substantial profit, investors must offer a purchase price substantially lower than the Seller is willing to accept. If the Seller doesn't negotiate with you on price or terms you are wasting your time. Move On!
• Determining the Maximum Allowable Offer MAO. This formula allows real estate investors to determine the MAXIMUM price they can offer the seller and still make a profit.
• Determining the Property's Repairs Costs. Sellers are usually motivated to sell their property because the asset or themselves are in a state of distress. As investors purchase multiple properties they get pretty good at determining the cost to bring the property back online.
• What is the After Repair Value APR? What will be the property's value be after cleanup and repairs are done? You need comparables to assess the property's value. The Multiple Listing Service MLS is a fantastic source for retrieving sale and property information but:
  • MLS is only available to Realtor Associations.
  • You have to be a Realtor Association Member.
  • Costs money to be a member:
    • Realtor License Fee.
    • Association Membership Fees.
    • Continuing Education Fees.

What if you don't have access to the MLS to determine property comparables or COMPS? How are you going to determine a property's value if you don't have access to information about the neighborhood?

Don't Worry!

There is plenty of information on the internet. Most counties in the United States provide free data concerning all the properties they currently have on their tax rolls. We provide a page on our web site that lists Property Information and Clerk of the Court data for each of Florida's counties.

Once you have determined the following items:

• Repair Costs.
• If you are financing the deal, Principle and Interest or P&I and closing costs.
• Monthly Fees like:
  • Electricity and Water Access.
  • Insurance.
  • Taxes.
• Determine the After Repair Value APR.

you will need to plug in these numbers into the MAO formula to determine your MAXIMUM Offer Price.

YOU MUST never, never, never, ever go beyond that price or you will lose money and the MAO price is only good for 90 days! It is based on a three month window.

Related Links, Blog Postings, Presentations or Articles:

• In the very near future we will provided a short video below this blog posting that will help determine a property's After Repair Value APR in Miami-Dade County, Florida.

Written by +Bob Burns.

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Never Quit! Real Estate Investor about.me/RobertKBurns Telephone #: 305-586-5280 email: sec8@planocho.com

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Do You need FUNDING to be a Real Estate Investor?

Eventually a Real Estate Investor will hear about a deal that is too good to pass up but their CASH is all tied up in another deal. There are no funds to purchase or repair! Time to borrow money!

But before the phone call is made, Investors need to:

 

 

• Act Quickly before the deal is sold to another investor.
• Ask questions about:
  • Will the owner accept "No Money Down?" If not, what is the minimum down payment?
  • Can the down payment be something other than cash?
  • Will the owner hold paper? If so, up to what percentage?
  • What are the monthly carrying charges? (Insurance, utilities...)
• Determine the properties Maximum Allowable Offer MAO so you can make an offer that is going to make you money quickly.
• Make sure you have multiple exit strategies.

Once you feel comfortable about the terms of the deal, time to dial your Lender's number! Good Real Estate Investors always have funds available 24/7 to take advantage of transactions that magically appear.

Lenders are adverse to risk so here are some questions you should ask the funding entity:

• What states are they licensed to lend money?
• Will they fund the deal based on the After Repair Value ARV (good) or the contracted price on the Purchase Agreement (bad)?
• Will they fund the repair costs?
• Is there a Prepayment Penalty?
• How long can the investor borrow the money for?
• Up to what percentage will they fund? If your contracted price is $150K and they will only fund 70% what is the total amount that they will lend? Answer:$105K. That means you have to come up with $45K. OUCH!
• If needed, can the investor get more time?
• What are the repayment terms? Are these terms negotiable?
• Are there any Closing Costs, Points, Etc.?
• What are the Minimum and Maximum amounts I can borrow?
• Are there funds available 24/7 to take advantage of NEW investment opportunities?

Every real estate transaction is unique so there are different type of loans you can use for each deal depending on the parameters. Here are a few names you have probably heard of:

• Conventional
• Hard Money (Quick but expensive)
• Private Money Lender (Best Option)
• Transactional Funding (Good for Short Sales)

These all serve a purpose and have advantages and disadvantages for real estate investors.

Here is a list of lenders that you can work with. Web Links are below:

Bridge Loan for Multifamily Properties

Bedford Lending Introduces 7% Interest Rate Bridge Loan
For Distressed Apartment Investors

Hard Money Lenders

Brookview Financial

Capital Funding

Financial Help Services

Hard Money Today

Hard Money Lenders Directory

Onward Financial

PeachStone Capital

Rehab Funding

Wooden Nickel Funding

Florida Hard Money Lender

Private Money Lenders

View Alan Cowgill's Private Money Webinar - Raise all the PRIVATE money you need for your Real Estate Transactions.

Mr Private Money

Trajan Financial CORP.

Transactional Funding (Good for Short Sales)

iV Transactional Funding

One Day Funding

Related Links, Blog Postings, Presentations or Articles:

• Palm Beach Mortgage Blog with Andres F. Escobar
• Our Real Estate Investor Funding Web Page

Written by +Bob Burns.

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I Love Fort Myers Beach! Real Estate Investor about.me/RobertKBurns Telephone #: 305-586-5280 email: sec8@planocho.com

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Top 20 Most Common Reasons Why Units Fail Section 8 Inspections.

One of your hats that you wear as a real estate investor is being a landlord. As a landlord, your job is to maintain the properties and keep them rented.

Keeping your properties fully occupied throughout the year increases your cash flow and provides a better return on your investment ROI but can be a difficult task! The longer a Unit remains unoccupied the less ROI landlords are going to have.

Below are several channels available to landlords to find qualified tenants:

• Retail Market - Newspapers, Word of Mouth, Church, For Rent Signs on property, internet, etc...
• Multiple Listing Service MLS - Database Realtors use to find rental properties for their clients
• Section 8, Plan Ocho, Sec 8, Plan Eight, Plan 8, Section Eight - Government subsidized rental payment plan.

The more channels you have, the greater possibility of finding a qualified tenant for your unit. SPEED is essential for success. Any delay will hurt ROI.

Section 8 will eliminate a lot of the drawbacks of being a landlord but you have to follow HUD's guidelines to be successful.

One part of the guidelines is the unit or property must pass an interior and exterior inspection. If you fail the inspection, more delays and your ROI will be affected. Being prepared for the inspection will help make the rental transaction a smooth process.

From my experience with Section 8, below is a list of items that will fail a HUD inspection:

1. Smoke alarms missing or not working.
2. Lack of ventilation in bathroom.
3. Outlet covers missing or broken.
4. Infestation by bugs or vermin.
5. Absence of handrails where 4 or more consecutive steps.
6. Utilities disconnected (must be connected).
7. Hazards (i.e. tripping as a result of floor covering or exposed electrical wiring.
8. One window in each room must open and have a screen.
9. Chipping paint on the outside of the building – gutters, outside surfaces of building.
10. Hazardous hole or trash in the yard.
11. Door not sealed properly (light can be seen coming through).
12. No hot or cold running water.
13. All windows must have sash cords or balancers and must stay in the open position without assistance.
14. All ceilings must be at least 7 feet in height in areas used for living, sleeping, etc….
15. All steps to landing or basements have handrails.
16. Baths without windows must have power fan or gravity vents in high rise buildings.
17. Open electrical distribution box must be covered with appropriate cover.
18. Windows in bedroom too small and will not qualify as areas for sleeping.
19. Security bars (rejas) can’t be opened from the interior will not be allowed to remain.
20. All bedrooms must have a built in closet.

I provided pictures of potential failure points below. Can you identify what would cause a failed inspection item?

Click on each image to view a larger photo!
Have you any experience with Section 8 inspections? Share them with US!

Related Links, Blog Postings, Presentations or Articles:

• Our Section 8 telephone interview - Podcast
• Our Sec 8 Power Point presentation given to the Miami Real Estate Investor Association MREIA

Written by +Bob Burns. ####    

Yeah Baby! Real Estate Investor about.me/RobertKBurns Telephone #: 305-586-5280 email: rkburns@investmentpropertiesmiamiflorida.com

Our Internet Footprint:

Section 8 or Plan Ocho Podcast

Below is a podcast I did with a buddy of mine named Larry King. I know what you are thinking but no not the CNN host. He did a telephone interview over the phone with me about Section 8 or Plan Ocho a while ago. The interview is slightly dated but evergreen (perennially fresh or interesting; enduring). I wouldn't post it unless I felt that it had some value for Real Estate Investors that will eventually be Land Lords.

The interview last for about an hour so make sure you set some time aside for listening.

Section 8 Podcast
(Click HERE)

Related Section 8 Blog Posts:

• Section 8 or Plan Ocho Offices in Miami, Florida
• Section 8's calculations for Fair Market Rents FMR
• Real Estate Investment Strategies for Rehabbing Houses

Do you have any experiences with Section 8 that you would like to share? Post your comments below.

Written by +Bob Burns.
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	"Words can Hurt or Remedy!" 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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Top 10 Real Estate Gurus I'd have a BEER with!

As I was starting out in real estate investing, I took the grand tour of the usual seminars, workshops, boot camps and REIA clubs. Webinars were not around and the internet was just grabbing our attention. I had the benefit of helping run the Miami Real Estate Investor's Association MREIA which provided us the conduit for all the Real Estate Gurus that were currently HOT at the time and are still going strong today.

I am creating this TOP 10 blog list for the benefit of people that are coming into the business and need some guidance. Some are local to Miami, Florida and some national.

Again, this is only my opinion and you may disagree with me and that's OK. Please forgive me if I leave someone out of the list but I am providing the names that taught or brought us into their inner circle of influence.

Here goes:

1. WOW, what can I say about Preston? I met Preston Ely in New Orleans but we didn't know each other. We know each other through Freedom$soft affiliate campaigns but if I ran into him on the street, I don't think he would recognize me. That's OK because he is an awesome internet marketer whose niche is real estate investing! I like his style and his humor. He goes against the grain but it works. I enjoy his outlook on life and business acumen. He is refreshing and made me a lot of money! That is why he is number one on the list.

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2. Mike Collins invited me to a Tampa workshop on real estate investing years ago. Mike was one of the first gurus to adopt the internet as part of his business. I drove up to Tampa Florida for the weekend and attended the event. I learned more about investing and realized that I had to adopt the internet as a channel for marketing my properties and business. Michael and his staff were very fourth coming with information about real estate investing and made me feel like I was very important to his success.

   Over the years I have seen Mike Collins speak at various real estate events and never lost that feeling that he was someone with a special gift of sharing his wealth of knowledge.

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3. I sat right next to Sam Bell in New Orleans in the front row. Same place I met Preston Ely. I like to think that I knew everyone that was a player in the real estate investing world but I didn't know Sam. He was quiet and didn't say much but we did introduce ourselves by the end of the event. Next time I saw Sam was in Tampa, Florida and to my surprise he was presenting. Man did he surprise me! He delivered BIG TIME. He combined hardcore internet marketing with Real Estate Investing. Every time I listen to him I learn something new. You have to place him on your blog reading list! You won't be disappointed. Light years ahead of me.

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4. Pete Youngs was the first guy I ever saw when I decided to start my real estate investing business. I started out as a rehabber and Pete was the guru's guru when it came to rehabbing houses. He was one of the very first GURU presenters with almost all the real estate investing clubs. I always enjoyed his rehabbing stories and his sense of humor. Also, due to his broad footprint among the real estate investment community, Pete would always have great investment deals or opportunities for his inner circle.

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5. Josh Cantwell is fairly new to my sphere of real estate gurus. I just finished an affiliate campaign in December 2010 with Preston Ely (See #1) and was still fired up about the campaign even though it was over. I received an email from Britt Walker (great contact for affiliate campaigns) who was promoting Josh's "Instant Cash Infusion" product. I said what the hell, since I trusted Britt. Wow, I was impressed! Josh's foreclosure system content was really fresh with current market trends. Home foreclosures vary from state to state but Josh and lawyer Jeff Watson seemed to be on top of their game concerning nationwide foreclosures. Check them out, you'll learn something.

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6. I have been working with Paul Woods since I started this business. Paul is a real estate attorney that has spoken at our real estate investment club many times. His strengths are Asset Protection using the Florida Land Trust and foreclosure defense. When building your team for real estate investing you must have an attorney that knows the legal structures (example: Florida Land Trusts) and contacts associated with real estate investing for your protection and success. Paul is your man!

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7. I met Joel Bauer at an information seminar in Broward, Florida. You know, Fort Lauderdale, college..etc. From my understanding Joel does not come out to the east coast (USA that is...) often so I decided to catch his presentation. He is not a real estate guru but was considered a Info. Marketer. I always want to get ideas about how I can enhance my marketing skills so off to see Joel. It was the fastest workshop I ever attended. He crammed more information into one day than anyone else I ever saw. I thought he was a little strange at first but this was part of his presentation. He kept it real and didn't sugar coat anything. I learned about photo and video editing, business card development, testimonial development, on and on and on...I was very impressed and would see him again in a heartbeat. He's different but that is what I like about him. Never boring and you never know what to expect. Either you like him or you don't. There is no middle of the road with Joel. Pure Energy! He brings it...Baby!

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8. Wayne Wagie is a different kind of real estate guru. He looks at the deal without money by negotiating the deal with the exchange of assets and or terms. Usually no money exchanges hands or very little. He runs a group called the "The Greater Miami Real Estate Exchangors (GMREE)" which meets weekly in Miami-Dade, Florida to discuss different strategies of exchanging real estate. You can exchange a piece of land for a boat or a car. Swap a house in Hawaii for one in South Beach, Florida. Create a note on your property and exchange the note for a percentage of another deal. Wayne teaches you to view and negotiate the deal using NO CASH! Awesome concepts! Check him and his group out.

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9. Paul J. DaCosta runs the Port Charlotte Real Estate Investor's Association on the Gulf Coast of Florida. When I first went to the meeting, I didn't know anyone but Paul had me introduce myself and the rest is history. He has spoken at MREIA several times about real estate investing. Paul is an investor, speaker, author, blogger, internet marketer and is very generous with his time. Paul makes you feel welcome into his social community and if you are ever on the Gulf Coast of Florida make sure you catch Paul at one of his meetings in Port Charlotte, Florida. Right down or across Rt. 75. You won't regret that you did!

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10. Last but not least, Donna Bauer is the first lady on our list. Donna is a real estate guru specializing in purchasing real estate notes. She was one of the first speakers I asked to present at MREIA since my first deal was a note purchase for 15 condo units. Controlling paper on a property is a great strategy for controlling an asset without managing the property. No cleaning toilets for me! She has a wealth of contacts and knowledge for anyone starting out in this business and wants to learn a very unique strategy of real estate investing.

    ---

Whew, that took me a long time to put together. There are so many gurus out there that it was difficult to narrow down the people who taught me the business. I Thank all of You!

Now it is your turn! Do you have a real estate investing guru that made a difference in your life? Please tell us about HIM or HER in the comment section below.

Written by +Bob Burns.
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	Sweet...... 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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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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