If you’re looking at Lease Purchasing as a business, you’ll obviously want to earn much more than the $20,000 per year in our “How To Give Yourself A $20,000/Year Raise Without Asking Your Boss” article.

Let’s review the numbers from that article:

For every 100 calls Sue makes on For Sale By Owner property, she either speaks with or leaves messages for about 60%. That’s about 60 people she puts the concept of Lease Purchasing in front of.

Out of that 60, approximately 10 will develop into true prospects. From these 10, 2 or 3 will develop into property we are willing to take on. The others may become consultations or manual sales.

(Please keep in mind, these numbers will vary a bit depending upon your particular area and current market conditions).

Now let’s condense these numbers for calls into a one month time frame.

What do you get?

The probability of two or three properties per month that you could do deals on. That equates to $10,000 to $15,000 per month.

But let’s be more conservative. Let’s say you do one deal per month for a $5,000 assignment fee (which is what we look for in a typical single family home). Now you’re looking at an income of $60,000 per year ($5,000 multiplied by 12 months).

Right there, you’ve built a very good income. But now factor in the additional income stream from consultations you can do on property out of your area, and you can significantly add to that yearly total.

Keep in mind, we’re only talking about one strategy here. Lease purchasing offers multiple strategies for doing business.

Bottom line, very conservatively, a realistic first year income for those working their business full time, is $50,000 to $75,000.

Your second year, as your referrals increase and you continue to grow your business, has the potential to see you well into six figures.

Now do you understand why we say Lease Purchasing is the best business we have ever owned and why we believe that it is the Perfect Home Based Business.

Oh yes, full time for us on deals and consulting is about 20 hours per week.

Copyright 2000, DeFiore Enterprises

Interested in having your own successful, home based creative real estate investing business? Chuck and Sue have been helping folks start successful home based businesses for over 19 years, and we can help you too! To see how, visit http://www.homebusinesssolutions.com for the latest FREE tips and tricks, educational products and coaching in creative real estate investing and home based businesses. No time to visit the site? Subscribe to our “how to” Home Business Solutions Digest, it’s like having your own personal coach: mailto:subscribeHBS@homebusinesssolutions.com

One questions many “for sale by owner” sellers ask is “how can I determine if a potential buyer can afford to buy my house?” In the real estate industry this is referred to as “pre-qualifying” a buyer. You might think this is a complex process but in reality it is actually quite simple and only involves a little math.

Before we get to the math there are a few terms you should understand. The first is PITI which is nothing more than an abbreviation for “principal, interest, taxes and insurance. This figure represents the MONTHLY cost of the mortgage payment of principal and interest plus the monthly cost of property taxes and homeowners insurance. The second term is “RATIO”. The ratio is a number that most banks use as an indicator of how much of a buyers monthly GROSS income they could afford to spend on PITI. Still with me? Most banks use a ratio of 28% without considering any other debts (credit cards, car payments etc.). This ratio is sometimes referred to as the “front end ratio”. When you take into consideration other monthly debt, a ratio of 36-40% is considered acceptable. This is referred to as the “back end ratio”.

Now for the formulas:

The front-end ratio is calculated simply by dividing PITI by the gross monthly income. Back end ratio is calculated by dividing PITI+DEBT by the gross monthly income.

Let see the formula in action:

Fred wants to buy your house. Fred earns $50,000.00 per year. We need to know Fred’s gross MONTHLY income so we divide $50,000.00 by 12 and we get $4,166.66. If we know that Fred can safely afford 28% of this figure we multiply $4,166.66 X .28 to get $1,166.66. That’s it! Now we know how much Fred can afford to pay per month for PITI.

At this point we have half of the information we need to determine whether or not Fred can buy our house. Next we need to know just how much the PITI payment is going to be for our house.

We need four pieces of information to determine PITI:

1) Sales Price (Our example is 100,000.00)

From the sales price we subtract the down payment to determine how much Fred needs to borrow. This result brings us to another term you might run across. Loan to Value Ratio or LTV. Eg: Sale price $100,000 and down payment of 5% = LTV ration of 95%. Said another way, the loan is 95% of the value of the property.

2) Mortgage amount (principal + interest).

The mortgage amount is generally the sales price less the down payment. There are three factors in determining how much the P&I (principal & interest) portion of the payment will be. You need to know 1) loan amount; 2) interest rate; 3) Term of the loan in years. With these three figures you can find a mortgage payment calculator just about anywhere on the internet to calculate the mortgage payment, but remember you still need to add in the monthly portion of annual property taxes and the monthly portion of hazard insurance (property insurance). For our example, with 5% down Fred would need to borrow $95,000.00. We will use an interest rate of 6% and a term of 30 years.

3) Annual taxes (Our example is $2,400.00)/12=$200.00 per month

Divide the annual taxes by 12 to come up with the monthly portion of the property taxes.

4) Annual hazard insurance (Our example is $600.00)/12=$50.00 per month

Divide the annual hazard insurance by 12 to come up with the monthly portion of the property insurance.

Now, let’s put it all together. A mortgage of $95,000 at 6% for 30 years would produce a monthly P&I payment of $569.57 per month. This figure was produced by our payment calculator. Add in taxes of $200.00 per month and add in insurance of $50.00 per month and the PITI necessary to purchase our house equals $819.57.

Putting it all together

From our calculations above we know that our buyer Fred can afford PITI up to $1,166.66 per month. We know that the PITI needed to purchase our house is $819.57. With this information we now know that Fred DOES qualify to purchase our house!

Of course, there are other requirements to qualify for a loan including a good credit rating and a job with at least two years consecutive employment. More about that is our next issue.

Bruce Andrews has been in the real estate business for over 20 years. He has experience in real estate investing as well as practicing real estate as a broker for several years. He is currently President of Fifty States Realty, www.fiftystatesfsbo.com a national “for sale by owner” website.

How much do you really know about investment property? Accurate research and professional expertise applied to the purchase of an investment property builds a solid foundation for financial success. You may want to work with a REALTOR who can help to identify the great opportunities in investment properties in the area of your choice. Or, you may choose to do the work on your own. A REALTOR can provide the inside line on properties with potential in the geographic area where you are looking for property. If you do choose to work with a REALTOR, you will save time, and you may have more choices and opportunities.

Research the Property’s Past and Present
Some essential information must be obtained about the property’s past. For example, do you know the history of the property, or even how old it is? What sort of upgrades have been made to the home? Is the roof waterproof, and is the plumbing and electrical in working order?

What’s the Neighborhood Like?
Once the overall condition of the property has been assessed, tax assessment records must be examined to determine property value trends. A good REALTOR will be familiar with the neighborhood where the property is located and if he or she is not, the REALTOR should check the neighborhood at different times of the day and night and speak to some neighbors. If there is a homeowners association, check the guidelines, assess fees, and be certain they allow rental of properties.

Assess the Bottom Line
For what purposes are you, the investor, going to use the property? To rent? To house your business? Or, to rehabilitate the property and sell it at a profit? Once this is determined, you can assess the bottom line.

Are you paying cash for your investment property? If not a mortgage will have to be paid. Have your REALTOR determine if rent and applicable fees will cover the mortgage, property management and maintenance. Consider property management if you do invest in property. Research fees and services provided by different property management companies, or ask your REALTOR if they provide this service, because many do. If you do not want to collect rents and contract repairs, find a property manager with the skills to negotiate, be your intermediary, and facilitate business in your absence.

For investors who rehabilitate and sell buildings at a profit, a decent turnaround is 60-90 days from the time of purchase to the time the property is put back on the market. Three to four contractors should be researched and they should provide written bids with time estimates on their projects.

Document Fund Availability with Your Offer
Once you find that dream investment property, don’t forget that offers need to be accompanied by your financial institution’s statement of fund availability or a lender’s approval letter. This will help make certain your offer will be accepted over other offers that may not come with appropriate paperwork.

There are still plenty of great deals on investment properties in this real estate market, and there are some less than desirable properties as well. Do your research. Or, hire a professional who will do it correctly for you. With proper planning and decision making, your real estate investment should be a profitable and worthwhile endeavor.


Elaine VonCannon is a REALTOR with RE/Max Capital in Williamsburg, Virginia, and she manages investment property as part of her business. Her husband Joe is a contractor who collaborates with her on rehabilitation of properties. She has helped numerous clients invest in and make money on property investments in Southeastern Virginia.

Did you know that it’s a proven fact that a properly maintained home sells substantially higher then a home that is dirty, depressed looking and clearly not maintained very well? When it comes to selling your house the statement “first impressions are the selling impression” couldn’t be any more accurate. This article will highlight some quick tips that will increase the amount of money you can ask for you home when you’re ready to sell it.

These tips wont consist of insisting that you perform a major renovation or complete overhaul of your home. Instead they will focus on what you can do outside around your house in order to increase your property value. These quick fixes can include things such as cleaning, painting, refinishing, and other such efforts. These are the projects that dont require all that much capital, and yet they make an immeasurable improvement to the overall look of your home.

Remembering what we said earlier about first impression prompts my first and number 1 tip. Always take the necessary time to tidy up around the outside of your home. This would include all debris, refuse or garbage waste as well as tools, childrens toys and yard care tools such as lawnmowers and weed eaters.

Always keep any bushes or shrubbery around the outside of your home neat, trimmed and well shaped. It creates the illusion of a well maintained home and subconsciously makes the buyer fell better about the house before actually stepping inside.

Planting inexpensive flowers around your home in order to brighten up the outside can have a positive effect on promoting your house. Many of my favorites include petunias, marigolds and zinnias. Flowers are especially attractive under windows, on porches and of course in flower beds.

Another sure winner when it comes to creating a positive buzz about your house is a properly manicured lawn. Make no mistake about landscaping plays a huge role in determining the value of your home. In fact, studies have shown that when the landscaping of a home is in excellent condition, it can sell for about 4 to 5 percent higher, while homes with landscaping in very poor condition can sell for 8 to 10 percent less. Thats a huge difference in the overall selling price of your home.

If you have a porch or any types of railing on the outside of your home then take the necessary steps to make sure that all of the wood used is in good shape. Make sure all wood screws are properly tightened and that nothing is molding or broken. Additionally make sure the railing is secure and not loose so as to pose a safety hazard.

If you have any shutters on your home make sure they are kept clean and serviceable. The reason for this is quite simple. When theyre well maintained and in good shape, they can add a warm, comforting touch to brick, stone, or just about any other finish. However, if theyre not well maintained, and are in bad shape, they are one of the fastest ways to make your home appear to be neglected; especially to prospective buyers.

Make sure to identify any areas around the outside of your home that require touch up paint. The small investment in time and the necessary paint supplies you purchase will significantly increase the appeal of your home and allow you to ask a higher selling price.

Finally perform one more look at the overall condition and cleanliness of your home prior to any prospective buyers coming by with a real estate agent. Inspect to make sure the gutters, windows and siding are all clean. Remember, your goal for the best possible curb appeal is a neat, clean, well maintained atmosphere. All of these items can be easily performed in a few hours, and theyll make an enormous difference for selling your home.

Timothy Gorman is a successful webmaster and publisher of Best-Free-Insurance-Quotes.com. He provides free insurance information and offers discount home, auto and life insurance that you can research in your pajamas on his website.

Other websites operated by Tim

Cellular-Phone-Solutions.com - Free information and resources regarding cell phone plans and free camera cell phones.

Military-Loans-Online.com Which provides free money saving loan quotes on your entire loan needs to include debt consolidation loans.

For small business owners, commercial real estate investment is the hottest new retirement asset. If your mind has already jumped to “REITs” — or shares in Real Estate Investment Trusts — think again. I’m referring to the ownership of the commercial facilities small business owners currently lease, or new commercial facilities they can buy or develop.

Small business owners can thank the U.S. Small Business Administration for this rather substantial opportunity.

The SBA sponsors a specialty lending program designed to assist successful small business owners who want to acquire or develop their own facilities. The SBA did not design the program as a vehicle for creating superior retirement assets, but it doesn’t take a financial genius to connect the dots — and the business owners who have done so already are profiting enormously from their decision.

It’s called the SBA 504 program and it’s been around, though not well promoted, for nearly twenty years. If a banker failed to mention it as an alternative, don’t be too dismayed. Traditional lending institutions prefer conventional financial instruments because they offer traditional lending institutions greater profit margins. The SBA 504 program is clearly intended to benefit small business owners, not necessarily the financial community.

Here’s what SBA 504 loans offer qualified small business owners: below market fixed interest rates, longer terms and with a cash investment as low as 10 percent of the total project cost. Typically, small business owners can reduce real estate expenses by up to 40 percent while building an asset that benefits them long after they’ve sold or shuttered their business. As an investment, this type of financing offers the highest cash-on-cash return available for commercial real estate, which means not only does their capital work harder for them, but they keep more of it to grow their business too. You can’t find a traditional lending product that can beat this.

Next to home ownership, being your own boss is the number one American Dream. That’s why most small business owners started (or acquired) their own business. And their success is almost entirely dependent on their drive, ambition, innovation and attention to detail. Eventually, however, they’ll sell their business or pass it along to their children or shut it down (very few small businesses go public). With SBA 504 financing, they can turn that drive and ambition into another long-term asset that offers immediate and significant tax advantages, as well as makes great sense for long-term financial planning.

It’s important to take an innovative approach to commercial real estate ownership. For most clients, it is beneficial to establish a separate real estate holding company to own the real estate asset — it separates their operating company – the one they may eventually sell or pass on to their children — from this new and important real estate asset.

The result is that, in 10 years or 25, when a small business owner sells their business or gift it to their children or shutters it, the real estate asset will retain important appreciated value in a separate holding company.

They will also have been paying themselves rent instead of some faceless landlord, effectively growing their real estate asset, building their equity and benefiting from the tax advantages all at the same time.

And once they sell their business, they’ll still have an income-generating asset that is one of the soundest long-term investments anyone can make.

Small business owners can continue to be landlords in their retirement, or they can sell the asset — typically at a rather significantly appreciated value.

Even if they gift the business to their children, the new owners will have to continue paying rent. Who would make a better landlord their children than themselves?

The value of the SBA 504 lending program is clear. Most business owners that are educated about this financial planning strategy adopt it.

For successful small business owners, this is almost a no-brainer. If they haven’t already done so, it’s time to stop paying rent to someone else and consider owning for all the right reasons.

(Ed. Note… Hurn is president and chief executive officer at Mercantile Commercial Capital based in Altamonte Springs. His company handles commercial loans and specializes in 90% financing for small business owners who want to acquire or develop their own facilities. The company, in business for 19 months, has closed some $30 million in loans already and opened offices in Miami, Tampa and Chicago.)

Interior colors are vitally important to selling your home quickly, and for more money. But you must always take your target market and selling season into account, using Design Psychology techniques, when choosing the colors for the inside of your home.

One of the biggest mistakes sellers make is to paint everything white, which will make the interior of the home look clean, but does nothing to make buyers feel and look good. Your goal is for your home to must make potential buyers feel and look great in your home. When you accomplish that, you’ll have a sale.

Consider Your Buyers

When choosing colors, always keep your target buyers in mind. If they’ll be wealthy and highly educated, you’ll want to use complex muted colors in your interior paint scheme. If your buyers will be less educated and in lower income brackets, concentrate on primary or pastel colors.

Your interior colors should also echo, in slightly lighter shades, the colors you’ve used on the outside of the house. That will give your home a greater feeling of harmony in the buyer’s mind, and since people look better in colored rooms, your buyers will also feel better in your home. As an added bonus, buyers who liked your exterior scheme are also going to appreciate your choice of colors for the interior, which will make them more inclined to buy your home.

Consider Your Selling Season

Your color choices will also depend upon the time of year your home will be on the market. Use warm-color accents, such as reds, yellows, maroons, if you’ll be selling during the fall and winter months, and cooler colors like grays, blues, and greens, if your home is going to be shown in spring and summer. Your ultimate goal is to create either the feeling of a cool desert oasis or a warm, inviting haven, depending upon the selling season.

Choosing Individual Room Colors

Consider how each room is used when choosing colors. For instance, kitchens look great and feel natural when painted with “food colors,” such as celery greens and scrambled-egg yellows.

Main bedrooms are places for intimacy and serenity, so medium shades of green or blue work well during warm selling seasons, and rouge red makes a dynamic impact in cooler weather. Other bedrooms show well and feel great when painted in soft creamy tones of green, yellow, blue, or pale shell pink.

Your choice of colors will affect potential buyers in subtle, but powerful, ways, and by using the principles of Design Psychology, you can make your home much more appealing, even though your buyers won’t even notice. All they’ll know is that your home makes them feel good, which will make them want to buy it, and that’s the most important thing.

(c) Copyright 2004, Jeanette J. Fisher. All rights reserved.

Professor Jeanette Fisher, author of Doghouse to Dollhouse for Dollars, Joy to the Home, and other books teaches Real Estate Investing and Design Psychology. For more articles, tips, reports, newsletters, and sales flyer template, see www.doghousetodollhousefordollars.com/pages/5/index.htm

Only the website missing something — an easily found address and phone number!

While researching realtor websites a few months, we came across a suprisingly large number of real estate websites where the contact information was buried. Some websites put their contact information on a Contact or About Us page. Even worse, a few had their contact information enbedded in an image. Search engines don’t read text in images. Users can’t copy and paste from an image if they want to copy your address to, say, a mapping program.

It’s like putting a sign above your office building and forgetting to unlock the door.

Don’t bury your most important information. Contact information should be in the footer of every page and preferably higher on the website’s home page. Each individual listing should have associated contact information. Real estate is one of the few types of websites where an interested customer is actually likely to pick up a phone and call rather than email you.

Sometimes, with everything that goes into creating and marketing a website, the simplest things are left behind. Don’t let it happen to you!

S.R. Daley is the web developer for http://www.myrealtyfeed.com, a service that allows real estate professionals to create, maintain and promote multiple RSS feeds with a simple web interface.

http://www.midastouchhomes.com/value/what’s-my-house-worth.html

It’s the ultimate dream for real estate investors. But why must it be a dream when it can just as easily be a reality.

Every day there are real estate investors making offers on high end houses just as there are real estate investors making offers on median price range houses and below. There are just a lot fewer going after the big game.

Why?

1) High dollar houses naturally instill fear in real estate investors as they feel if they make a mistake they will be sued for hundreds of thousands

2) Real estate investors perceive they need perfect credit, a high net worth and millions of dollars already to buy million dollar houses, so they exclude themselves as buyers and don’t pursue high end deals

3) Most real estate investors feel they don’t deserve to buy a million dollar house or to be talking with the people that own them. They have a self image that equates themselves with lower price range houses and the people that own them, so those are the houses they pursue.
All of these reasons are fear in one form or another, and none of them are real.
The beings that own high end houses are people, and they get divorced, lose their jobs, go out of business, make stupid mistakes, have bad financial management, and do all of the things that result in financial distress and necessitate a quick sale.

The high dollar properties they own are real estate, just like the two bedroom one bath house in the median price range neighborhood, It can be put under contract, optioned, or creatively financed just like any other house in any other price range.

But real estate investors avoid them, and in doing so, prevent their most heartfelt dreams from coming true.

The key point all real estate entrepreneurs and investors must understand is that owners of high end houses who are experiencing problems need the solutions that well trained investors can provide.

And as with all real estate deals, when done properly, everybody wins. The seller gets the house sold and some cash to move, the bank gets their loans paid off, the new buyer gets a house they love, and the investor makes a profit.
A six (or seven) figure profit!

Going after high end houses is a choice. Real estate investors can attract these million dollar deals to them by setting up marketing systems that target high end houses only, and leave the lower price ranges alone. By making high end homeowners the only people you contact with your marketing, high end homeowners are the only ones that call in response.

And when real estate investors have a steady stream of motivated sellers with high end houses calling them every day, their desks begin to fill up with million dollar deals.

Just like a hunter going after big game, the real estate investor who sets their marketing sights on high end deals, and persists, the moment arrives when their real estate investing dreams come true.

About the Author:
Ben Innes-Ker is a father, best-selling author, and real estate investing warrior. He has developed the “Motivated Seller Magnet” to help real estate entrepreneurs attract more motivated sellers with less effort and increase profits. To receive your 23 page special report outlining how anyone interested in investing in real estate can achieve this too, visit: http://www.motivatedsellermagnet.net

http://www.midastouchhomes.com/value/realestateappraisal.html
Content source: http://motivsell4realestate.blogspot.com/2005/10/is-your-real-estate-investing-comfort.html

The short answer is to build a database, so you can use contact software to maintain a relationship with people you know and meet online. Frequent and steady contact lets them know you take your business seriously and you want them as your clients, which is flattering to anyone. The long answer is much more complex:

How do you want to work?
Who is an appropriate prospect?
What is an appropriate method of contacting this person?
How can you get your value as an agent across to that person? The first thing to do is to focus on acquiring clients, rather than listings. Here are some ways to focus your business:

Decide what kind of business you want to build. A common mistake many agents make, especially in a big city like Dallas, is spreading yourself too thin. You’ve already stated that you want listings, so let’s start there. Ask yourself if there is a way to narrow your search for clients with listings. Most agents accomplish this by choosing a neighborhood to farm such as the area where they live, or by specializing in a certain type of home such as new homes in master-planned communities or older homes of historical interest, or condos and townhomes. Is there an area or type of home that interests you? This way you can become known as the expert.

Don’t be afraid that you will miss business by not becoming a general agent. You have to keep your time, advertising costs and other limiting factors in mind. If you are going to farm a neighborhood, hanging fliers, mailers and knocking on doors and introducing yourself is a good way to start. You will find your contacts will take you around the city without having to go to the expense of farming the entire city.

Appropriate contacts are everyone you meet. Appropriate contacts are people you want to do business with, but have an open mind as to where you can develop these potential customers. While many agents start with family and friends, don’t stop there. Remember that people like your dry cleaner, barber, fitness trainer and others you have daily contact with have already met you. It is a lot easier to do business with people who know and like you.

Include groups of people in your database you don’t see often, like former school chums, club and church members, sports acquaintances, business networking coffee groups, and neighbors. You’ll be surprised how many people you know.

Ask each person for their contact information, especially email, and tell them you want to send them some information about what you’re doing and that you hope to help them one day with a move. The worst that can happen is they say no, and the best is that they give you the information that one day leads to a sale.

Ask permission to contact prospects. They appreciate it. Ask the people you know and meet how they prefer to be contacted — by email, business phone, cell phone, and if it would be all right for you to keep them posted about the marketplace. You can do this with email newsletters, postcards, phone calls, and other means.

Your efforts will be appreciated. There isn’t a renter who isn’t wondering if now is the time to buy. You can keep renters informed about new building projects in their neighborhood, or good deals in affordable properties, and how prices are changing from month to month. People are interested in opportunities, so that’s what you want to keep in front of them. So you mix in a few buyers while you’re trying to get listings… it’s all business.

Most of your contacts, however, will be homeowners. There isn’t a homeowner who isn’t interested in how well their home is doing compared to the open market. Even if they have no immediate plans to sell, they enjoy knowing that their home is worth X amount more than what they paid. They also enjoy knowing local market conditions that affect the value of homes. Who knows? You might send them a piece of information that encourages them to make a move.

Even though you don’t have a lot of experience, you can make yourself sound more expert by paying attention to what is happening locally - all by reading the local paper and staying in touch with your local chamber of commerce or visitor’s bureau to find out what’s happening. Your local association should also have meetings and special information for their members so you will know if big deals such as new housing developments are happening or a new company is transferring employees to town.

You have value even if you are new to the industry. Don’t worry about being new to the industry — there is plenty of support for new agents if you know where to look for it. Don’t be afraid to quote your local association or MLS when it has homebuying statistics or news to report. Attend association meetings and listen to what the guest appraisers, developers, and city planners have to say. Join a networking group. Keep building your online skills.

Your previous career and school experiences can be valuable to homebuyers and sellers. Use it! If you have ever rented a home, bought a home, worked with numbers, managed or worked with people, decorated a room, bought a boat, scaled up or down in residence, you have valuable insights for your prospects.

You have powers of observation. Listen carefully when people talk, and you’ll soon hear those tell-tale signs that they might be considering a change. Drive your neighborhood, and note which houses are looking improved. You’ll get a feel for which neighbors to chat up — is the one putting up a new roof thinking of selling?

People appreciate enthusiasm and are inclined to give new people a chance. If you don’t have the answer, say so, but you can immediately follow up by saying you know where to get it.

Get help if you need it. Trail or offer to help a top producer with an open house, so you can watch a pro in action. Don’t be afraid to partner with another agent on a listing until you learn the ropes. Take advantage of every training session your broker or association provides. Hire a coach.Don’t lose hope. Getting your name out there is the hardest part, and if you follow these suggestions, coupled with a willingness to serve your clients’ needs, you’ll soon have enough business to keep you busy more…

http://www.midastouchhomes.com/create_wealth.html

Content source: http://realestatebooks.blogspot.com/2005/11/how-does-new-agent-get-listings.html