DEAN GRAZIOSI: DEAN GRAZIOSI REAL ESTATE

You searched for months for that perfect first home to buy.  You and your realtor looked at everything from foreclosures to new construction.  Finally you found the one that made you say “I could live here the rest of my life.”  You put in your offer and it was accepted.   After the initial joy wears off you realize you need to get your ducks in a row so you can close.  Below are 5 tips that if followed will help you on the road to a smooth and on-time closing.

Get All Back-up Ready for your Mortgage Company.

While you were searching for your home your mortgage company most likely provided you with a list of items you will need to give them before you can close.  Grab that list and start gathering everything you need.  That list will include things like recent tax returns, pay check stubs, identification and recent bank statements.   As you gather them get them to the mortgage provider so they can look them over and make sure they are what they need. 

Get Your Inspection Done

Most offers can be rescinded in the first few days if something is found to be fundamentally wrong with your future home.   A good realtor will have someone they recommend you don’t have to use that inspector, but often times it is good to use someone your realtor is familiar with because they know they can trust them.

No big purchases

Most mortgage companies will require you to have enough money in your bank accounts to cover the down payment as well as a month or two of mortgage payments.  Even after you have shown them your recent bank statements it is a good idea not to spend much money because they may ask to look again the day of closing.  If you need to purchase something for the new home wait until after closing. 

Don’t Use Credit Cards

Don’t use your credit cards for anything until after you are completely closed.  Using your credit cards can affect your overall credit score which could lead to your mortgage provider raising tour interest rate or worse.  Most mortgage companies will run your credit report the day of the closing to make sure you are still within the window of acceptance.  Anything you need should wait until after the closing.

Don’t Take Any New Lines of Credit or Open New Loans

It may be tempting to take a new line of credit to purchase the new floors you need for your new home, but wait until after the closing has been completed.  Opening a new line of credit or getting a new installment loan can lower your credit score and also increase your liabilities.  Both of which can cause your mortgage company to cancel the loan or raise your interest rates.  Anything you need for the new home should wait until you have completed closing. 

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Foreclosures are a great investment option. The key is knowing how to find just the right one. A bank foreclosure could be a house, apartment, condominium or any other type of property that has been seized by the bank. If you are planning on investing in such a property, you will want to consider the following tips.

Make sure the property is investment protected. Always take the time to research, learn more about and investigate any foreclosed property you are thinking of purchasing. Focus on its condition and history as well as the title. The age and location of the foreclosed property will provide answers to these questions. An inspector will also be able to give you advice on the condition of the property you are considering. By doing this, you won’t waste a lot of money on unnecessary renovations and repairs.

Learn as much as you can about the foreclosed property. Research its market value and stick to your budget when bidding. You will get the best deal by purchasing a foreclosed property at less than 50 percent of its market value. This is important as you may still need to spend quite a bit on renovations and repairs that are necessary to keep the property up to code.

Ask questions. This is what you give you some of the answers you are seeking. You will obtain the rest through tips you learn from others. These tips will point you in the right direction so you can continue your research.

Know what you are getting into when purchasing a foreclosed property. If you don’t have the money for renovations and repairs, or if this is just too much of a headache for you, buying a foreclosed property may not be the best option.

Foreclosures can make great new starter homes for some people who have saved up enough money to make the necessary changes and updates. While it is possible to find a foreclosed property that does not require such adaptations, most do so you will need to be prepared for that going into the proposition.

Purchasing a foreclosure will give you the opportunity to buy a lot of house for less than you would normally pay. You can then make the necessary changes, while adding your own personality into the mix. This can be a fun process and will definitely add value to your home. This will serve you well if and when you decide to sell.

Your foreclosure will be a great investment over time. Because you ppurchased it for less than you would have a brand new property, you will have the chance to make money on it in the near future. This, alone can make it a great option. The key is to research the property and carefully consider all you will have to deal with when purchasing a foreclosure. It may just turn out to be the best investment decision you’ve ever made.

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A Variety of Terms

When shopping for secured loans for buying a home, you will come across a number of lending options. Brokers and lenders offer varying terms to numerous consumers, some who even possess similar qualifications. Therefore, you have to be prepared when it comes to negotiation as the difference in the amount you are given versus someone with almost identical information will most likely be dispensed as compensation to the lender.

Look for Overages

An overage can result when the borrower agrees to pay a price that is above the lowest cost that can be given for a secured loan. Overages are included then in the quotes given to potential borrowers, and can be found in loans that have varied rates as well as those that come with fixed terms. Therefore, it is important that you have the financial lender list all the expenses related to the loan product. Once you survey the data, you may be able to make some concessions. Ask the loan officer to perhaps eliminate a charge or reduce the number of points. Ask him if he can improve the terms of the loan.

Locking in the Rate

Once you are happy with the quoted terms, you will want him to confirm these terms in writing. Ask that he include the agreed rate and the points. In other words, have him lock in the rate until a specific date. Be aware that you may be charged a fee for this service. However, you may be able to obtain a refund when the loan closes as well. A lock-in is helpful in safeguarding your loan from any rate increases while it is going through the mortgage loan process. On the other hand, if the market rates fall, you may have to talk your lender into some type of modification.

The Competitive Spirit

Comparison shopping then is essential if you want to obtain the best possible loan deal. Get a good idea of the rates by shopping on the Internet. Interest rates and points can be compared among several lending sources. While rates change day by day, you will want to keep on top of the variances. Make sure that the loan officers who you talk to are aware that you want the best deal for the real estate you select. Let them know that you are making price comparisons among several different loan companies.

Survey your Credit Report

If you have poor credit resulting from reasons such as temporary unemployment, don�t feel compelled to search only for loans that carry a higher interest rate. Even if you have some negative information in your credit history, you may be able to obtain a decent rate, especially if those negative marks can be explained. If your credit report shows items that are negative that aren�t easily explained, ask the lender what you will need to do to acquire a better interest rate. Take time to review your report so you can plan and make the necessary adjustments. It will be worth it in the end.

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As with any other business strategy, people that are successful at investing in foreclosures have learned how to navigate the system easily. Expert foreclosure investors make sure all paperwork is filled out correctly and turned in on time.  I can’t promise that you will turn into a foreclosure expert by the time you finish reading this article. I can however, give you some tips that will help you become a more savvy foreclosure investor.  1.Market Research – Know your area. The first thing you need to know when looking at foreclosure investments is what other houses in the market go for. When you know this information you will know how much to bid at the auction. This will help you to estimate the repair costs better. Knowing this information will also help you prepare for tax time by estimating your profits.  2.Know the Law – Some communities have laws which mandate that a buyer must live in the house for a certain period of time before selling the property. It is important to know if this is the case in the area where you are looking to invest because it will make a big difference in the time and money spent on a foreclosed home. Make sure you consult with a realtor or real estate attorney to verify the laws and rules where you are trying to invest. This will save you a lot of heartache later on down the line.  3.Line Up a Buyer – Try to line up a potential buyer before you attempt to secure financing. This will help you speed up the process. This will also make you look more favorable to the banks when you try to apply for a loan.  3.Plan Ahead – It can be quite a challenge to keeping a step or three ahead of the game. This is because time frames can change when dealing with foreclosed properties. Each county has different rules. Although it is difficult, having a plan in place every step of the way will help you keep it all together and know exactly what is supposed to happen, and when. This will also let the banks know that you are serious, just like a business plan for a new venture. Investing in foreclosed properties can be a very lucrative way to make money in the real estate industry. As with anything in business, you have to plan in order to be successful. Remember when you fail to plan, you plan to fail. Follow the tips given in this article and you will have a good foundation for building a successful foreclosure investing business.

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When investing in foreclosures, it is crucial to have the right bank helping you finance your deals. You must have a bank that will work with you quickly so that you can seal the deal on that prime foreclosure property you are bidding on. A bank that does not work within your time frame can hurt your business. It will not help you if they have great interest rates if the bank causes you to lose your foreclosure bid because they are moving to slowly. You need to look for four simple things when choosing a bank. This article will tell you what four things to look for when deciding if a bank is a good fit for you and your foreclosure investing needs.

Staff

How well you will do in the foreclosure investing world is often dictated by how will the staff at the bank you choose can relate to you and make your time at the bank enjoyable. Even if the bank you choose has an interest rate that is a little higher than the sorry bank down the road, it could be worth it to spend that extra money because your confidence and attitude will definitely be better if you can trust your bank than if the bank you used just got done giving you the run around.

Hours

Real estate investors don’t hold banker’s hours. You need to be sure to pick a bank and a banker that is going to be there when  you need them. Nowadays most banks are staying open later. Make sure you pick a bank with a 24 hour customer service line as well as online banking. Make sure the online agents are willing and able to assist you whether it is 12 midnight or noon.

Location

Make sure that you pick a bank with multiple locations. You want a bank that is going to be close to you no matter where you are. If your bank is close by, you will be able to go to the bank, get your check, and return before anyone notices that you are gone. It is also necessary to have a bank close by if you need to make last minute changes in order to snag a property.

Speed

It is crucial to have a bank that can act quickly. If your bank takes too long to respond, it can cause you to lose deals. Try to find a bank that is fast, friendly and efficient. If you can do that, you can sometimes win bids that other investors lose because they picked the wrong bank.

If you plan on investing in foreclosures, picking the right bank is crucial. You must look at the quality of the people, the speed at which the staff operates, the location of the branches, and the hours of operations. Be sure to pick a bank that works the way you like best and fits your needs.

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Real estate investors often tend to rely on emails for a variety of tasks during the process of making a deal. As it turns out, that may not be such a good idea. A recent ruling in New York Courts has shed new light on the necessity of being careful about email interactions. Since the case in question regarded a real estate transaction, it brings home the importance of the ruling to RE investors.

In the court case, a real estate broker sent an email to a potential buyer of a property saying that he would be afforded the right of first refusal. While he did not say that the deal was finalized, he did say that he potential buyer would get a chance to counter any new offers that were made.

This potential buyer went on for a time assuming that he was going to have a chance to buy the property if he still wanted it. Then, one day he found out that the broker had sold the property to a higher bidder without consulting him or giving him a chance to raise his bid.

The man’s response was to sue for breach of contract. As evidence, he used a printout of the email in which the broker had made the original promise. His argument was that he relied on the email as a valid form of communication in conducting the deal. The broker disagreed, countering that the email was not binding.

The lower court where the case was first presented sided with the potential buyer. It said that the email was as valid as a written contract. This ruling was explained as resulting because of the fact that emails are such a common form of communication, and because they can be easily traced to the sender.

A higher court disagreed and said that there was not a binding contract, but not because the email was not as binding as a written offer. Instead, the ruling was handed down because the potential buyer never replied to the email, so the communication was one-sided and may never have been seen by him. The case has been taken to yet another court, but so far the consensus is that an email, properly sent and received, is considered binding.

What this means to you as a real estate investor is that you would be wise to monitor yourself when writing emails during the deal-making process. Never say anything in an email that you would not want someone to later haul back into court. This does make investing a little less dynamic, but it is necessary to protect yourself in the future.

There may be one last alternative. If you include a disclaimer saying that no part of the email is binding, you might protect yourself from legal action. If you plan to take this route, do not just make something up yourself; have an attorney draft the wording so that it will stand up in court. Remember that emails have become the newest form of writing. Watch how you use them or you could face serious consequences in your real estate investing business.

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Whether you’re a homebuyer or a homeowner looking to sell, a qualified realtor can help you to get the best deal out of your investment. When seeking the help of a realtor, there are several questions you should ask to determine if the real estate agent of your choice will be able to help you get the most for your money. By knowing what questions to ask, you can help avoid wasted time and energy with realtors that do not have your best interests in mind. After asking your realtor some basic questions, you will be able to evaluate whether they will be able to provide the service you need to buy or sell your home at the best possible price.
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It’s a good idea to ask your realtor how long they have been a full-time professional realtor. You also need to make sure they can represent you either as the buyer or the seller. Always ask for references from previous clients that can verify their experience with the realtor. Ask your realtor if they have a team of people working with them who you will be working with. Make sure that you have ways to contact any people you’ll be working with when the time comes. A list of staff members working with you, complete with phone numbers, e-mails, and fax numbers would be ideal. A company website should also be included in the information you’re given, and the site should be updated regularly. Have your realtor explain their fees up front, ask for an estimate of all services pertaining to your listing, and get all of the information in writing to keep with your other important documents.

Don’t be afraid to ask your realtor what characteristics set them apart from other realtors. What do they specialize in, how can they help you to find the perfect home to buy or help you to sell your home at the best price, and so on. A good realtor knows their qualifications and is confident in their work; they will have your best interests in mind. Ask for a satisfaction guarantee. If your realtor is not working out for you, you need to be able to terminate the Buyer Agency Agreement. A good realtor understands that no one on the team profits unless you, as the client, profit. So talk to your realtor and find out what they can do for you

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At the International Commercial Property Exposition in Munich Germany, some pretty surprising and very disappointing numbers were released.  Foreign investment in U.S. real estate fell a whopping 77% in year-over-year comparisons.  The $14 billion outside investment in U.S. real estate fell behind the $15 billion invested in Japan and ahead of the $11 billion invested in the United Kingdom.

Perhaps the most startling transaction was the sale of the Worldwide Plaza at 825 Eight Avenue in Manhattan.  When the building was fully occupied in 2007, investor Harry Macklowe purchased the property for $1.7 billion.  After Macklowe defaulted on $7 billion in debt, Deutsche Bank took over the Plaza and eventually sold it to a joint venture spearheaded by George Comfort & Sons.  The selling price was $605 million.

The building is only 60% occupied with an initial net yield of about 6.3%.  If the new owners improve the building’s occupancy rate, the net yields should increase to 12%.

Also in New York, SL Green has agreed in principle to sell 49.5% of its interest in 485 Lexington Avenue to a joint venture between Gilmore USA and Optibase Ltd., an Israeli-based technology company.  The joint venture is paying $21 million and assuming the $450 million of existing debt.  Once the property is closed, the joint venture expects to acquire another 49.4% interest from SL Green.

While the downturn in the first half of they year was dramatic, July and August have seen investment from Germany and Asia begin to come back to the market.  New York and San Francisco have become popular targets for on and closed-end German and Asian funds. 

In Washington D.C., the largest transaction of the year has taken place.  Public REIT Vornado sold 1999 K Street to German investor Deka, an open-end fund.  The sale price was $208 million or $830 per square foot.  At the same time, Credit Suisse purchased 1099 New York Avenue from Tishman Speyer for $90.5 million.  Big investor’s are wheeling and dealing in big markets and betting on their ability to fill unoccupied space.

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The investor who takes a long view of real estate investing is a professional investor.  There is no substitute for buying low and selling high but real estate investors know the quick turnover is difficult to accomplish and that every real estate transaction has built-in expenses that cut into that quick profit.  Like all forms of investment, your real estate plan will include a description of your risk tolerance and appetite.  Making money in real estate involves hard work and discipline.  There is no way around those components.

To help analyze each transaction and assure conformity to your overall investment plan, real estate investors build a reliable team of professionals.  Your real estate consulting team should include:

·    An agent
·    An appraiser
·    A home inspector
·    A closing attorney
·    A lender for purchases
·    A lender for sales
·    A maintenance expert
·    A general contractor

The general contractor should have a general knowledge in plumbing, electrical, heating and air-conditioning, roofing, painting and flooring systems.  The maintenance expert should be familiar with cleaning costs, lawn services and windows cleaning services.

This team of experts can help in many ways.  However, their biggest contributions will help protect the real estate investor from the greatest sin, which is overpaying for real estate.

The reason to build a team of professionals is to heed their advice.  Investors must understand the numbers behind the numbers, but they must also respect the input of their chosen professionals.  When the numbers do not add up, it is time to move on to the next opportunity.

The evaluation of these numbers is the moment of truth in every real estate transaction.  When the transaction does not fit, the professional investor walks away.  Follow your plan and the profits will be there.

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It is easy to assume you will make money on an investment property such as an apartment complex, store/mall building, or business complex and in most cases you will. What makes the difference between making a few dollars and making maximum profits is to know what the costs are going in. Your first step is to learn how to understand a cash flow statement.
A complete cash flow statement will include, not only the upfront costs of operating an investment property i.e.: cost vs. rental unit’s value but also underlying expenses such as utilities, taxes, insurance.
You should also find out the turnover in your proposed rental. If your renters are already in place, if there are vacant spaces, typical lengths of stay are all a part of knowing how reliable your investment will be. These figures are less solid than the above expenses and you should always take into account that the possibility you will have less income than the building is capable of but your fixed expenses will remain constant and save accordingly for times when rentals are under-performing.
Once you have taken all of these figures into consideration and feel a property is a good investment you are still not ready to take the plunge. Figures look good on paper but the property itself needs to look good in person. Make sure everything is in operating order unless you know ahead of time you are going to be putting money into repairs. If you are open to fixing up a property the price should definitely reflect the costs you will be putting into a building before it is up to your standards.
Now you are ready to make that jump into the rental world. When you close on your property and hold the keys, you are a landlord in an exciting new world of real estate investments knowing you’ve made all the right moves to insure security and profit.

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