DEAN GRAZIOSI: DEAN GRAZIOSI REAL ESTATE

In recent years, online real estate bidding has been added to the incredible number of tasks you can do online. Like most online activities, it makes sense to examine whether it is better to do it on the Internet or in person. With online bidding, there are several pros and cons to consider.

Pro:

You are more likely to get fuller information and a larger variety of pictures for an online auction than one that is done at a physical location. Organizers of the auction realize that you may be too far away to see the property in person, so they use Internet tools to show the properties virtually. This gives you easier access to certain facts you need.

Con:

Assuming you are bidding from a location other than where the property is located, you may not have had the opportunity to see the property up close. Even though potential bidders often only get to see the outside of the home, that real-life look can be very eye opening in some cases. Pictures do not show everything and a personal view of the property is worth a great deal of cold data at times.

Pro:

You can bid from the comfort of your own home. You do not have to get caught up in the distracting noises and sights as you try to decide what to bid. Without the intense pressure of the crowds, you can easily keep a cool head. You may make much better decisions in the long run.

Con:

You might be more conservative in your bids without the tense mood of the in-person auction. Is this a bad thing? Possibly it is, if you plan on taking enormous risks. If you are a big-time real estate gambler, bidding in person might give you the competitive atmosphere that spurs you on to take greater chances. If you want more safety, online bidding might actually be better.

Pro:

If you do your real estate bidding online, you will have easy access to any notes, pictures and information you have gathered for each property. You can keep it all right there on your desktop as you keep up with the bidding. You can refer to it just before a property auction is starting, and have it there to glance at anytime you need to as the bid goes up.

Con:

When bidding online, it is easy to get hooked up with a disreputable real estate auction company, or a downright scam artist. The Internet is much easier to manipulate in this way than an in-person auction site. However, you can avoid this problem if you do your homework.

Check out the auction company before you enter the online auction. Then, type in the right website yourself to avoid getting sidetracked to a fake website. Read their terms of service and make sure you agree with them. Protect yourself, and the Internet can provide a very advantageous way to buy real estate.

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With the real estate market changing at what seems every second of the day it is important that buyers do their research before they make on offer on a house.  What many people find out these days is that sellers are putting their home on the markets without a real understanding of the current market.  A good realtor can help you do your research before you put an offer in, but the more you know on your own.

The first thing you want to do is to check the other houses that are for sale in your target neighborhood or neighborhoods.  When you do this make sure you are comparing apples to apples.  If the house you are looking at is 3 bedrooms, 2 baths with a garage than make sure the comps you look at are also 3 bedrooms, 2 baths with a garage. 

When comparing properties it is also important to know what type of upgrades your unit has compared to the other houses in the area.  If the comparable house has upgraded appliances and the one you are looking at doesn’t than they are not technically the same house.  This is potentially a place where you can get a little bit better of a deal. 

It is also important to do your research on the area you are looking at as a whole.  Even if you don’t have children it is important to know what the schools are like in the area and how far they are from the house.  Houses in bad school districts are often hard to sell while ones in good districts are often easier to sell.  Parents also need to look at if their child will need to take a bus or if they can get their other ways. 

Once you have settled on a house your realtor will send you a report on the area and the house.  This report will tell you everything you need to know about the house.  It will show any mortgages on the house, when the house was purchased, what it was purchased for, if there was ever any refinancing and if there are any liens on the house. 

Dig through this report very carefully to look for clues on what an owner may accept.  If the report shows the house fully paid off that may mean the buyer is willing to take a lower price so they can get rid of it and move on.   On the other hand the report may show that they are underwater on the house which usually means they won’t budge very much on the asking price.

Just remember that right now this is a buyer’s market so the buyer has the control.  There are far more sellers than buyers.  With the proper research you will be amazed at how much money you can save.

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Just because you have bad credit, it doesn’t automatically mean that you cannot purchase a home.  You may be required to pay a higher interest rate than other people, but you are not disqualified from pursuing a home purchase merely because you have bad credit.

If you have recently filed for bankruptcy it is recommended that you wait at least four years before applying for a mortgage.  If you have a foreclosure in your past it is recommended that you wait two years before applying for a mortgage, this means that in the case of a foreclosure you may qualify for as little as 3.5% down.

If you find a lender who will approve you sooner than the recommended waiting period, you may be forced to come up with a 20 – 35% down payment.  Along with the large down payment, you will also have a much higher interest rate and loan terms that are not favorable.  If you cannot meet these strict requirements, it may be better for you to wait the allotted amount of time before trying to purchase a home.

Proving to lenders that you are a good risk requires that you have reliable employment, a low amount of outstanding debt and are working to improve your rating regularly.  Lenders like to see that you are steady and can handle the responsibility of a mortgage payment.  Proving this to them may take some time, but once they recognize that you are not a high risk loan, they may approve your application.

If you have any outstanding debts, it is important that you pay off as many as possible.  This will show lenders that you are serious and you are working towards repairing your credit.  If a debt has reached the point of being sent to a collection agency, you will have to contact each agency and request that a payment arrangement be set up or if you able to pay the debt in full.  Many collection agencies will offer a discount of your balance just to get the account off of their books.  If they offer a discount take advantage of it, this means that you will be paying off the creditor for a lesser amount.

If for any reason you are not satisfied with the rates offered by a lender you may want to consider purchasing a home that offers seller financing.  In this case the seller would take the place of a lender and you would pay them directly.  Choosing to go this route means that you may not have to meet the strict guidelines set forth by lenders, your interest rate will be lower and you will close fast.  This is a very good solution for those who can’t meet the requirements of many lenders.

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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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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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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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