Stop Home Foreclosure » tax

Foreclosure Mortgage Lenders – are the Loans Worth It?

foreclosure — Tue, 13 Oct 2009 02:08:41 +0000

Would you like to make a profit from a house that has been foreclosed or forgotten? You may want to make money with houses that are or have been in foreclosure. Whether you are looking for a home or something you can renovate and sell, you could get a good deal by working with any of the foreclosure mortgage lenders. Your can make the choice that benefits you most.

A foreclosed home means there is a lender that needs to sell a property immediately. The accrual of taxes and the fact that a piece of property is not earning money means that a lender needs to sell. Time is most important to the lender when it comes to re-selling the foreclosed property.

As a buyer this is where you want to come in. The mortgage lender has four stages in the process of foreclosing. Knowing what to do at each stage is the key to making a successful turnover in the foreclosure process.

Pre-foreclosure is when the buyers are getting late on their payments and the lender begins to notify them that foreclosure is coming, at this point a lump sum of money is due. Some people just cannot make the payments and may be searching for a buyer during this first 90 days. Trying to save their credit score may be the motivation for a property owner at this point. Since timing is critical, it is important to work with an experienced lender that knows how to handle pre-foreclosure properties.

Once the 90 day mark has passed a property reaches stage 2 of the foreclosure process. The lender must process all the paperwork to auction the property by advertising a notice of Trustee sale. During this time you would do your research to find out if the property is worth investing in or not. The date of the auction will be soon and there is usually plenty of willing buyers ready to steal the deal.

At the auction is stage three. Day 120 has arrived. The city or county courthouse steps or any type of public place is where the auction is held. You will need to have cash or a cashiers check ready to show the auctioneer that you have the ability to purchase the property. If no one bids on the house, the property is now owned by the lender.

This brings us to day 121, the bank bidder out bid the others in the best interest of the lender or no one was qualified to bid on the property. Some auctions no one even shows up to bid, so the property defaults to the lender. This is how foreclosures lists are built, with properties such as these, then the lists are sold or given to certain companies for free.

Foreclosure mortgage lenders know more about who will pay and who will not pay, based on their experience, you will only need to prove that you are a serious buyer with every intention of making good on the loan. Another thing to keep an eye out for, especially in areas that have had disasters or abandoned homes, is the distress sale lists. You dream house may be just a click away!

By: Adam Hefner

About the Author:

MortgageLoans-101.com is a website fully devoted to providing you with the best information for your mortgage loans needs. Whether your looking for more on foreclosure mortgage lenders or any other types of mortgage loans, we have you covered!

Florida Foreclosure Fraud Protection Law Enacted – Foreclosures / Mortgage Loan Modification

foreclosure — Mon, 12 Oct 2009 15:36:02 +0000

Frederick A Neustein, an attorney with the Law Offices of Charles L Neustein PA and www.StopForelcosureLawyer.com respectfully submits the following:

Florida Foreclosure Fraud Protection Law Enacted.

The Attorney General clarified that this new law will not apply to the Attorney / Client relationship or the way attorneys are paid when they are hired to help distressed homeowners. This law brings much needed protection to those consumers / homeowners who have been taken advantage of by Mortgage Loan Modification Companies – many of which are scams…

Effective October 1st, 2008

501.1377 Violations involving homeowners during the course of residential foreclosure proceedings.

(1) LEGISLATIVE FINDINGS AND INTENT.–The Legislature finds that homeowners who are in default on their mortgages, in foreclosure, or at risk of losing their homes due to nonpayment of taxes may be vulnerable to fraud, deception, and unfair dealings with foreclosure-rescue consultants or equity purchasers. The intent of this section is to provide a homeowner with information necessary to make an informed decision regarding the sale or transfer of his or her home to an equity purchaser. It is the further intent of this section to require that foreclosure-related rescue services agreements be expressed in writing in order to safeguard homeowners against deceit and financial hardship; to ensure, foster, and encourage fair dealing in the sale and purchase of homes in foreclosure or default; to prohibit representations that tend to mislead; to prohibit or restrict unfair contract terms; to provide a cooling-off period for homeowners who enter into contracts for services related to saving their homes from foreclosure or preserving their rights to possession of their homes; to afford homeowners a reasonable and meaningful opportunity to rescind sales to equity purchasers; and to preserve and protect home equity for the homeowners of this state.

(2) DEFINITIONS.–As used in this section, the term:

(a) “Equity purchaser” means any person who acquires a legal, equitable, or beneficial ownership interest in any residential real property as a result of a foreclosure-rescue transaction. The term does not apply to a person who acquires the legal, equitable, or beneficial interest in such property:

1. By a certificate of title from a foreclosure sale conducted under chapter 45;

2. At a sale of property authorized by statute;

3. By order or judgment of any court;

4. From a spouse, parent, grandparent, child, grandchild, or sibling of the person or the person’s spouse; or

5. As a deed in lieu of foreclosure, a workout agreement, a bankruptcy plan, or any other agreement between a foreclosing lender and a homeowner.

(b) “Foreclosure-rescue consultant” means a person who directly or indirectly makes a solicitation, representation, or offer to a homeowner to provide or perform, in return for payment of money or other valuable consideration, foreclosure-related rescue services. The term does not apply to:

1. A person excluded under s. 501.212.

2. A person acting under the express authority or written approval of the United States Department of Housing and Urban Development or other department or agency of the United States or this state to provide foreclosure-related rescue services.

3. A charitable, not-for-profit agency or organization, as determined by the United States Internal Revenue Service under s. 501(c)(3) of the Internal Revenue Code, which offers counseling or advice to an owner of residential real property in foreclosure or loan default if the agency or organization does not contract for foreclosure-related rescue services with a for-profit lender or person facilitating or engaging in foreclosure-rescue transactions.

4. A person who holds or is owed an obligation secured by a lien on any residential real property in foreclosure if the person performs foreclosure-related rescue services in connection with this obligation or lien and the obligation or lien was not the result of or part of a proposed foreclosure reconveyance or foreclosure-rescue transaction.

5. A financial institution as defined in s. 655.005 and any parent or subsidiary of the financial institution or of the parent or subsidiary.

6. A licensed mortgage broker, mortgage lender, or correspondent mortgage lender that provides mortgage counseling or advice regarding residential real property in foreclosure, which counseling or advice is within the scope of services set forth in chapter 494 and is provided without payment of money or other consideration other than a mortgage brokerage fee as defined in s. 494.001.

(c) “Foreclosure-related rescue services” means any good or service related to, or promising assistance in connection with:

1. Stopping, avoiding, or delaying foreclosure proceedings concerning residential real property; or

2. Curing or otherwise addressing a default or failure to timely pay with respect to a residential mortgage loan obligation.

(d) “Foreclosure-rescue transaction” means a transaction:

1. By which residential real property in foreclosure is conveyed to an equity purchaser and the homeowner maintains a legal or equitable interest in the residential real property conveyed, including, without limitation, a lease option interest, an option to acquire the property, an interest as beneficiary or trustee to a land trust, or other interest in the property conveyed; and

2. That is designed or intended by the parties to stop, avoid, or delay foreclosure proceedings against a homeowner’s residential real property.

(e) “Homeowner” means any record title owner of residential real property that is the subject of foreclosure proceedings.

(f) “Residential real property” means real property consisting of one-family to four-family dwelling units, one of which is occupied by the owner as his or her principal place of residence.

(g) “Residential real property in foreclosure” means residential real property against which there is an outstanding notice of the pendency of foreclosure proceedings recorded pursuant to s. 48.23.

(3) PROHIBITED ACTS.–In the course of offering or providing foreclosure-related rescue services, a foreclosure-rescue consultant may not:

(a) Engage in or initiate foreclosure-related rescue services without first executing a written agreement with the homeowner for foreclosure-related rescue services; or

(b) Solicit, charge, receive, or attempt to collect or secure payment, directly or indirectly, for foreclosure-related rescue services before completing or performing all services contained in the agreement for foreclosure-related rescue services.

(4) FORECLOSURE-RELATED RESCUE SERVICES; WRITTEN AGREEMENT.–

(a) The written agreement for foreclosure-related rescue services must be printed in at least 12-point uppercase type and signed by both parties. The agreement must include the name and address of the person providing foreclosure-related rescue services, the exact nature and specific detail of each service to be provided, the total amount and terms of charges to be paid by the homeowner for the services, and the date of the agreement. The date of the agreement may not be earlier than the date the homeowner signed the agreement. The foreclosure-rescue consultant must give the homeowner a copy of the agreement to review not less than 1 business day before the homeowner is to sign the agreement.

(b) The homeowner has the right to cancel the written agreement without any penalty or obligation if the homeowner cancels the agreement within 3 business days after signing the written agreement. The right to cancel may not be waived by the homeowner or limited in any manner by the foreclosure-rescue consultant. If the homeowner cancels the agreement, any payments that have been given to the foreclosure-rescue consultant must be returned to the homeowner within 10 business days after receipt of the notice of cancellation.

(c) An agreement for foreclosure-related rescue services must contain, immediately above the signature line, a statement in at least 12-point uppercase type that substantially complies with the following:

HOMEOWNER’S RIGHT OF CANCELLATION

YOU MAY CANCEL THIS AGREEMENT FOR FORECLOSURE-RELATED RESCUE SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 3 BUSINESS DAYS FOLLOWING THE DATE THIS AGREEMENT IS SIGNED BY YOU.

THE FORECLOSURE-RESCUE CONSULTANT IS PROHIBITED BY LAW FROM ACCEPTING ANY MONEY, PROPERTY, OR OTHER FORM OF PAYMENT FROM YOU UNTIL ALL PROMISED SERVICES ARE COMPLETE.

IF FOR ANY REASON YOU HAVE PAID THE CONSULTANT BEFORE CANCELLATION, YOUR PAYMENT MUST BE RETURNED TO YOU NO LATER THAN 10 BUSINESS DAYS AFTER THE CONSULTANT RECEIVES YOUR CANCELLATION NOTICE.

TO CANCEL THIS AGREEMENT, A SIGNED AND DATED COPY OF A STATEMENT THAT YOU ARE CANCELING THE AGREEMENT SHOULD BE MAILED (POSTMARKED) OR DELIVERED TO (NAME) AT (ADDRESS) NO LATER THAN MIDNIGHT OF (DATE) .

IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR LENDER OR MORTGAGE SERVICER BEFORE SIGNING THIS AGREEMENT.

YOUR LENDER OR MORTGAGE SERVICER MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN OR A RESTRUCTURING WITH YOU FREE OF CHARGE.

(d) The inclusion of the statement does not prohibit the foreclosure-rescue consultant from giving the homeowner more time in which to cancel the agreement than is set forth in the statement, provided all other requirements of this subsection are met.

(e) The foreclosure-rescue consultant must give the homeowner a copy of the signed agreement within 3 hours after the homeowner signs the agreement.

(5) FORECLOSURE-RESCUE TRANSACTIONS; WRITTEN AGREEMENT.–

(a) 1. A foreclosure-rescue transaction must include a written agreement prepared in at least 12-point uppercase type that is completed, signed, and dated by the homeowner and the equity purchaser before executing any instrument from the homeowner to the equity purchaser quitclaiming, assigning, transferring, conveying, or encumbering an interest in the residential real property in foreclosure. The equity purchaser must give the homeowner a copy of the completed agreement within 3 hours after the homeowner signs the agreement. The agreement must contain the entire understanding of the parties and must include:

a. The name, business address, and telephone number of the equity purchaser.

b. The street address and full legal description of the property.

c. Clear and conspicuous disclosure of any financial or legal obligations of the homeowner that will be assumed by the equity purchaser.

d. The total consideration to be paid by the equity purchaser in connection with or incident to the acquisition of the property by the equity purchaser.

e. The terms of payment or other consideration, including, but not limited to, any services that the equity purchaser represents will be performed for the homeowner before or after the sale.

f. The date and time when possession of the property is to be transferred to the equity purchaser.

2. A foreclosure-rescue transaction agreement must contain, above the signature line, a statement in at least 12-point uppercase type that substantially complies with the following:

I UNDERSTAND THAT UNDER THIS AGREEMENT I AM SELLING MY HOME TO THE OTHER UNDERSIGNED PARTY.

3. A foreclosure-rescue transaction agreement must state the specifications of any option or right to repurchase the residential real property in foreclosure, including the specific amounts of any escrow payments or deposit, down payment, purchase price, closing costs, commissions, or other fees or costs.

4. A foreclosure-rescue transaction agreement must comply with all applicable provisions of 15 U.S.C. ss. 1600 et seq. and related regulations.

(b) The homeowner may cancel the foreclosure-rescue transaction agreement without penalty if the homeowner notifies the equity purchaser of such cancellation no later than 5 p.m. on the 3rd business day after signing the written agreement. Any moneys paid by the equity purchaser to the homeowner or by the homeowner to the equity purchaser must be returned at cancellation. The right to cancel does not limit or otherwise affect the homeowner’s right to cancel the transaction under any other law. The right to cancel may not be waived by the homeowner or limited in any way by the equity purchaser. The equity purchaser must give the homeowner, at the time the written agreement is signed, a notice of the homeowner’s right to cancel the foreclosure-rescue transaction as set forth in this subsection. The notice, which must be set forth on a separate cover sheet to the written agreement that contains no other written or pictorial material, must be in at least 12-point uppercase type, double-spaced, and read as follows:

NOTICE TO THE HOMEOWNER/SELLER

PLEASE READ THIS FORM COMPLETELY AND CAREFULLY. IT CONTAINS VALUABLE INFORMATION REGARDING CANCELLATION RIGHTS.

BY THIS CONTRACT, YOU ARE AGREEING TO SELL YOUR HOME. YOU MAY CANCEL THIS TRANSACTION AT ANY TIME BEFORE 5:00 P.M. OF THE THIRD BUSINESS DAY FOLLOWING RECEIPT OF THIS NOTICE.

THIS CANCELLATION RIGHT MAY NOT BE WAIVED IN ANY MANNER BY YOU OR BY THE PURCHASER.

ANY MONEY PAID DIRECTLY TO YOU BY THE PURCHASER MUST BE RETURNED TO THE PURCHASER AT CANCELLATION. ANY MONEY PAID BY YOU TO THE PURCHASER MUST BE RETURNED TO YOU AT CANCELLATION.

TO CANCEL, SIGN THIS FORM AND RETURN IT TO THE PURCHASER BY 5:00 P.M. ON (DATE) AT (ADDRESS) .

IT IS BEST TO MAIL IT BY CERTIFIED MAIL OR OVERNIGHT DELIVERY, RETURN RECEIPT REQUESTED, AND TO KEEP A PHOTOCOPY OF THE SIGNED FORM AND YOUR POST OFFICE RECEIPT.

I (we) hereby cancel this transaction.

Seller’s Signature

Printed Name of Seller

Seller’s Signature

Printed Name of Seller

Date

(c) In any foreclosure-rescue transaction in which the homeowner is provided the right to repurchase the residential real property, the homeowner has a 30-day right to cure any default of the terms of the contract with the equity purchaser, and this right to cure may be exercised on up to three separate occasions. The homeowner’s right to cure must be included in any written agreement required by this subsection.

(d) In any foreclosure-rescue transaction, before or at the time of conveyance, the equity purchaser must fully assume or discharge any lien in foreclosure as well as any prior liens that will not be extinguished by the foreclosure.

(e) If the homeowner has the right to repurchase the residential real property, the equity purchaser must verify and be able to demonstrate that the homeowner has or will have a reasonable ability to make the required payments to exercise the option to repurchase under the written agreement. For purposes of this subsection, there is a rebuttable presumption that the homeowner has a reasonable ability to make the payments required to repurchase the property if the homeowner’s monthly payments for primary housing expenses and regular monthly principal and interest payments on other personal debt do not exceed 60 percent of the homeowner’s monthly gross income.

(f) If the homeowner has the right to repurchase the residential real property, the price the homeowner pays may not be unconscionable, unfair, or commercially unreasonable. A rebuttable presumption, solely between the equity purchaser and the homeowner, arises that the foreclosure-rescue transaction was unconscionable if the homeowner’s repurchase price is greater than 17 percent per annum more than the total amount paid by the equity purchaser to acquire, improve, maintain, and hold the property. Unless the repurchase agreement or a memorandum of the repurchase agreement is recorded in accordance with s. 695.01, the presumption arising under this subsection shall not apply against creditors or subsequent purchasers for a valuable consideration and without notice.

(6) REBUTTABLE PRESUMPTION.– Any foreclosure-rescue transaction involving a lease option or other repurchase agreement creates a rebuttable presumption, solely between the equity purchaser and the homeowner, that the transaction is a loan transaction and the conveyance from the homeowner to the equity purchaser is a mortgage under s. 697.01. Unless the lease option or other repurchase agreement, or a memorandum of the lease option or other repurchase agreement, is recorded in accordance with s. 695.01, the presumption created under this subsection shall not apply against creditors or subsequent purchasers for a valuable consideration and without notice.

(7) VIOLATIONS. – A person who violates any provision of this section commits an unfair and deceptive trade practice as defined in part II of this chapter. Violators are subject to the penalties and remedies provided in part II of this chapter, including a monetary penalty not to exceed $15,000 per violation.

By: Frederick A Neustein

About the Author:

The Law Offices of Charles L Neustein P.A. and www.StopForeclosureLawyer.com is a law firm focusing on the representation of home owners and investors defending their homes and property from bank foreclosure. The goal of our foreclosure attorneys is to cost effectively stop foreclosure in Florida.

How to Defend Foreclosure in Nevada?

foreclosure — Sat, 10 Oct 2009 19:12:01 +0000

The Short Sale Process – A Realistic Possibility?

Anthony Y. Mauer — Thu, 01 Oct 2009 14:34:20 +0000

by Anthony Y. Mauer

The short sale process can be long and tedious. It begins with the homeowner in a situation where their home has a lower value than the balance on their mortgage – the short sale definition. It usually becomes dangerously close to foreclosure before the homeowner accepts the probability that the home is lost and makes an agreement with the lender to begin the short sale process.

There is no short sale without an agreement with the lender. It is an agreement between both the lender and the borrower and is a transaction that contains many complex factors and considerations. Most important for the borrower is that there will be no foreclosure awaiting them on the other side of the short sale process.

After agreeing to settle through this process, the two parties must then agree on the various aspects of the short sale – and there are many. Among many other complex issues, they must decide on the selling price of the home, the amount of debt to be forgiven, property taxes, insolvency issues, various fees, and the purchase agreement. For these reasons expert help is an absolute necessity. Do NOT attempt to handle a bank short sale on your own!

The lender will require the homeowner to complete the “hardship letter” in order to explain how they ended up in such financial distress. The borrower will be required to document statements in the hardship letter through pay stubs, investment documents, and bank statements. This will provide a historical time line leading up to the homeowner’s inability to pay.

The bank will then assess the fair market value of the home and work with appraisers, brokers, and real estate agents. This is done in order for the home to be appraised properly, and for the bank to recover as much as possible from the sale of the home. In the end it’s all about business, and lenders wish to keep their losses to a minimum.

If the home is sold at an acceptable price – within the acceptable time frame, the proceeds will be set forth to settle the debt as per the agreement. Remember, the bank is not going to sit around and wait forever. If the home is not sold on time, they WILL proceed with foreclosure. You can be sure that all of these issues will be drawn out clearly within the agreement drawn up by your lender.

Just because you go through the short sale process, your credit doesn’t have to be destroyed. There are many aspects to a short sale and many borrowers have missed deadlines relating to financial issues directly affecting their credit rating. Their credit was damaged as a result. Some end up with damaged credit due to having other areas of financial responsibility involved in the short sale process. Damaged credit is not a definitive result of a bank short sale. This is one of the more prominent reasons that we have to acquire experts and then follow their advice.

Our primary goal is to complete the short sale process and end up with as little damage as possible. If done correctly, we could end up with no unpaid property taxes, stable credit, legal fees paid, and without foreclosure. We may lose our home – yes, but we’ll be in the best position possible to buy again!

About the Author:

Perry Zohanson has been helping borrowers dealing with the short sale process for years. Be sure to check out his bank short sale blog for excellent tips and free advice on how to best make the short sale process work for you.

Real Estate Foreclosures

Moises DaSilva — Sat, 19 Sep 2009 17:32:56 +0000

by Moises DaSilva

With the increase in number of properties which are being listed under the real estate foreclosures and so as the number of people who are getting an opportunity to make money and profits because of it. With the increases in properties going for foreclosures, the number of people getting into the real estate business is also increasing.

The work of real estate owners is to buy and sell the property, but when it comes to foreclosures they buy the properties listed by government or buy the lenders under the foreclosures real estate, pay the dues on the property and renovate them to sell for a profit.

The business involves risks like any other business but the risk can be minimized to almost nil if the decisions are taken in the most appropriate manner.

The properties that are foreclosed by the lenders are the ones were the borrower failed to pay the monthly installments on the property for a certain period of time and therefore the lender or the bank got the right to foreclose the property and list it under real estate Foreclosures, they profits attained by these properties can be a lot more profitable as are sold at very low prices and the other in the category are the properties foreclosed by the government when the owner could not make a payment his taxes over a period of time.

These properties usually require a little renovation but at times the amount spend on the renovation can increase or decrease depending on the condition of the house. If the property is in good condition than the profit share of the real estate owner increases but if there is a last minute renovation that is required or there is something that was overlooked at the time of purchase then it decreases the profit margin by increasing the cost of renovation.

A proper inspection of the property is always advisable before buying these properties to estimate the profit margin of the real estate agent. The real estate agents at times can take help from the property assessors for the same.

About the Author:

Every business has a risk factor and so as the real estate business while buying the properties in real estate foreclosures, but if the decision is taken with a sound mind and keeping all kinds of implicit and explicit costs in mind the risk in the business can decrease leading to an increase in profit. Find foreclosure listings at ForeclosureDataBank.com.

The How To Guide to Tax Deductible Property Expenses

David McCammon — Thu, 17 Sep 2009 15:01:01 +0000

by David McCammon

If you own rental property, it is important to make sure that you understand possible deductions in order to improve your profit margin as much as possible. As the owner of rental property, it is always a good idea to consult a tax attorney or tax consultant in order to ensure that you have a good understanding of the items which may be potentially tax deductible. Below is a guide to some of the most common items which are frequently tax deductible for owners of rental property.

The most important thing which must be understood when you are determining what you may be able to deduct is the difference between improvements and repairs. Many owners of rental property commonly make the mistake of believing that anything they do to their rental property is tax deductible.

A repair is something that you do to the property in order to keep it in good condition. As such, it is often tax deductible for the year in which the repair is paid for. Common examples of repairs would include repairing, painting, replacing faulty light fixtures, etc.

Something that you do to the property in order to add value to it is improvement. As such, it is not usually tax deductible at the time when you pay for them. That said; however, you may be able to recoup the cost of improvements by depreciating the cost over the life expectancy of your property. Common examples of improvements would include adding a new roof, etc.

Often one of the biggest and most common tax deductions you can take when you own rental property are mortgage expenses. Of course, this is only an option if you have a mortgage on the property. It should be noted that any expenses which you incur in order to obtain the mortgage are not actually deductible immediately.

Common examples would include appraisals and commissions. Once you begin actually making the mortgage payments; however, you will typically be able to deduct the portion of the payment that is paid toward interest. It is always a good idea to keep very good records; however, you should receive a Form 1098 from your mortgage company that will detail how much you have actually paid in interest for that year.

You could incur travel expenses in relation to caring for your rental property. Keep in mind that travel expenses are typically only deductible if they are incurred in order to collect rent.

If you happen to travel to make improvements to the property, these expenses are not deductible immediately. Instead; however, you may be able to recover the cost as part of the improvements.

Keep in mind that you usually have two options when it comes to how you can deduct travel expenses. You may choose to deduct the actual expenses or you may choose to take the standard rate.

Other expenses which you may be able to deduct on your taxes. These expenses may include insurance, lawn care, taxes, tax return preparation fees and any losses which result from casualties such as floods, thefts, hurricanes, earthquakes, etc.

Whenever the rental property which you own is a condo or a cooperative, there may be some special rules which will apply. For example, with a condo you may pay assessments or dues which are intended to provide for the care of property which is commonly owned. These areas would include elevators, lobbies and the actual building structure itself and recreational areas.

Whenever you are renting out a condo, you can typically deduct expenses such as repairs, taxes, interest and depreciation; however, you cannot usually deduct any expenses which were spent on improvements. These costs must be depreciated over the life expectancy of the property, just as it would be when you own a single family rental.

When you are talking about a co-op, you may be able to deduct expenses such as maintenance fees. Capital improvements are a different matter; however. You would not typically be able to depreciate the cost.

Rather, you would need to add the cost of those improvements to a cost basis in the stock of the corporation. If this situation applies to you, be sure to speak with a tax attorney or tax consultant.

Be sure that you are prepared to back-up any expenses which you deduct on your taxes. These expenses must be carefully documented and you will need to make sure you provide documentation.

About the Author:

If the idea of profiting big in the huge world of real estate cash excites you, then you should get Davids free report and Free Real Estate Course. To learn the safest and most profitable strategies visit Davids website Free Real Estate Course.

Foreclosures Real Estate

Moises DaSilva — Wed, 16 Sep 2009 17:20:19 +0000

by Moises DaSilva

The business involves risks like any other business but the risk can be minimized to almost nil if the decisions are taken in the most appropriate manner.

About the Author:

Easy Financing Options for Rental Property

David McCammon — Sun, 13 Sep 2009 13:47:37 +0000

by David McCammon

A good number of people are now finding that rental property can be an excellent way to create wealth. If you are considering getting involved in rental property investing, it is a good idea to educate yourself as much as possible. First, you need to find out what it takes to become qualified to purchase investment property because it is actually much different than qualifying to purchase a home.

A common idea for this is the fact that a significant number of investors either walked away from properties or declared bankruptcy during the early 1990s. While you should certainly not be punished for someone elses problems, neither do lenders want to be left holding investment properties. Therefore, it is important to understand that the requirements for being approved for a mortgage on rental properties are somewhat different from what you are used to.

Property can often be purchased with low money down, especially if you are a first-time home buyer this is often not the case with rental property. Many lenders require a minimum down payment of 15% or even 20%.

Fortunately there are many different sources you can tap into for possible financing. These options include: Mortgage broker Local savings and loan or bank Private lender FHA; which stands for Federal Housing Association.

Regardless of which option you choose, you will find that most lenders will want to be assured that you will have a sufficient amount of rental income in order to cover not only the mortgage payment but also other expenses such as insurance, taxes and maintenance. Depending on the amount of income that will be provided from the property, some lenders may require a larger down payment.

There are also different types of loans which you can use to finance the purchase of a rental property. One option would be a residential loan. This type of loan can be used to purchase from one to four units. The exact options that are open to you often depend on whether the property will be owner occupied.

An even other option would be a commercial loan. This is an option when the property is five units or more or it will be non-owner occupied. Due to the fact that it is a commercial loan, it is often far different from a residential loan in regards to terms and requirements. One of the main differences between a commercial loan and a residential loan is the fact that fees and rates are very often higher on loans like this.

Sometimes a larger down payment is also often required. The down payment on a commercial loan typically runs between 25% and 35%. While there are some lenders who may be willing to agree to a higher loan to value ratio; the requirements for qualifying for such loans are often much more difficult.

The owner will also carefully examine the ability of the property to generate a cash flow that will allow you to repay your loan. As a result, the lender will typically examine the property to ensure it can provide an income that will not only allow you to cover the mortgage payments and other expenses but also provide enough of a cash flow that you will have additional income to place into other places.

Private party lending is another option for many prospective investors. One option would be to approach the current owner about seller financing. With this option the owner carries back the loan for a down payment and fair interest rate. You may find that you can save lending fees with the options and may also be able to take advantage of making a smaller down payment.

Another option would be what is known as a hard-money loan. This is a type of short-term financing where a third-party makes a loan to assist the investor with purchasing the property. Generally, this type of loan involves a higher interest rate due to the fact that the buyer has poor credit or because the property is in disrepair and requires extensive renovation.

FHA programs are usually offered through traditional lenders. Keep in mind; however, that FHA does not actually lend money. They do provide insurance for lenders; offering numerous loan programs. Regardless of which financing tool you choose, remember that there is always the option to refinance at some later point in order to obtain a better rate.

About the Author:

If the thought of making money greatly in the entire world of real estate investing stimulates you, then you ought download Davids free report and Free Real Estate Course. To find out the safest and most profitable strategies visit Davids website Real Estate Investing.

Establishing Valid Criteria for Selecting Tenants

David McCammon — Thu, 10 Sep 2009 05:50:32 +0000

by David McCammon

Tenant selection criteria can be one of the most confusing areas of operating rental property for many people. On one hand, you want to make sure you choose the most responsible tenant possible; a tenant who will pay his or her rent on time and one who can be relied upon not to tear apart your property.

Also you must make sure that you abide by fair housing laws. Before you actually begin renting out your property it is a good idea to sit down and determine the criteria you will use to choose find a good tenant.

If you don’t have guidelines you will have no choice but to rely on your instinct to choose the best tenant and this could result in trouble if you are only relying on your feelings to make a tenant selection. One of the worst risks you can take is to let your own personal opinions and biases guide you in your decision because this could open the door for legal problems.

You should always make sure that you notify prospective tenants that you utilize a fair system to make your decision. Ideally, it is best to include this type of statement on all rental applications. For example, you might state Our policy is to rent our units in compliance with federal, state and and all appropriate fair housing laws.

If you are fairly new to operating investment rental property, you may not be cognizant of fair housing laws. Be sure to consult your states fair housing office to determine those guidelines which you must follow.

Beyond fair housing laws, it is important to make sure you establish criteria that is concrete by which to judge all potential applicants. For example, it is common to require that the applicant provide identification that is verifiable. You may require the applicant to present a photo ID with their application so that you can make a copy of it.

It’s good to get this type of requirement because you may need it in the future in the event you need to describe adult occupants of the unit. If someone co-signs the application, it is also a good idea to obtain identification for them too.

You should also consider to require information which would help you to determine that the applicant has a sufficient income to rent ratio. If the applicant were applying for a loan to purchase a home, the lender would ask for and get similar information.

The general rule of thumb is to identify applicants that have a gross monthly income that is three times the amount of the rent. One way to document this information is by requesting copies of the applicants pay stubs along with their application.

Especially if the applicant is self-employed, you might ask them to provide their last tax return in addition to three months of bank statements. If you cannot verify the applicants income, this would be a perfectly legitimate reason to deny their application as you have no assurance that they will pay their rent.

Most managers and landlords also check credit ratings and scores on applicants as well. The purpose of this is to verify the financial responsibility of the applicant. The general guideline is to obtain a credit report on all applicants as well as any co-signers who are over the age of 18. Keep in mind that you will need to receive permission to run a credit report; however, you can request this on the application.

If you are approached by applicants with low credit scores could be legitimately denied on the basis on being unable to prove financial responsibility. In addition, you should check references. Typically, you should ask all applicants to provide the names and telephone numbers of individuals who can verify the applicants income sources as well as references as to character.

And make sure you follow-up to check that the applicant has been able to successfully rent a dwelling in the past and paid their rent on time. In the event an applicant is unable to meet this requirement but does meet all other requirements you may consider requiring a co-signer.

About the Author:

If the idea of making money greatly in the wide world of real estate investing excites you, then you ought download Davids free report and Free Real Estate Course. To find out the safest and most profitable methods visit Davids website Real Estate Investing.

Selecting the Right Tenants is The Secret

David McCammon — Thu, 10 Sep 2009 05:48:45 +0000

by David McCammon

By not using guidelines you will have no choice but to rely on your instinct to choose the best tenant and this could result in trouble if you are only relying on your feelings to make a tenant selection. One of the worst risks you can take is to let your own personal opinions and biases guide you in your decision because this could be the avenue for a lawsuit.

First, you should always make sure that you notify prospective tenants that you utilize a fair system to make your decision. Ideally, it is best to include this type of statement on all rental applications. For example, you might state Our policy is to rent our units in compliance with federal, state and local fair housing laws.

If you are relatively new to operating investment property, you may not be cognizant of fair housing laws. Be sure to consult your states fair housing office to determine those guidelines which you must adhere to.

Above and beyond fair housing laws, it is important to make sure you establish criteria that is concrete by which to judge all potential applicants. For example, it is common to require that the applicant provide identification that is verifiable. You may require the applicant to present a photo ID with their application so that you can copy of it.

This type of requirement is valid because you may need it in the future in the event you need to describe adult occupants of the unit. If someone co-signs the application, it is also a good idea to obtain identification for them as well.

It is also quite valid to require information which would help you to determine that the applicant has a sufficient income to rent ratio. If the applicant were applying for a loan to purchase a home, the lender would require similar information.

The good rule of thumb is to identify applicants that have a gross monthly income that is three times the amount of the rent. One way to document this information is by requesting copies of pay stubs along with their application.

If the applicant is self-employed, you might ask them to provide their last tax return in addition to three months of bank statements. If you cannot verify the applicants income, this would be a perfectly legitimate reason to deny their application as you have no assurance that they would be able to pay their rent.

Many property managers and landlords also check credit ratings and scores on applicants as well. The purpose of this is to verify the financial responsibility of the applicant. The general guideline is to obtain a credit report on all applicants as well as any co-signers who are over the age of 18. Keep in mind that you will need to receive permission to run a credit report; however, you can request this information on the rental application.

Applicants with low credit scores could be legitimately denied on the basis on being unable to prove financial responsibility. In addition, you should check references. Typically, you should ask all applicants to provide the names and telephone numbers of individuals who can verify the applicants income sources as well as character references.

Finally, make sure you follow-up to check that the applicant has been able to successfully rent a dwelling in the past and paid their rent on time. In the event an applicant is unable to meet this requirement but does meet all other requirements you may consider requiring the applicant to have a co-signer.

About the Author:

If the thought of profiting greatly in the entire world of real estate investing excites you, then you should download Davids free report and Free Real Estate Course. To learn the safest and best profitable strategies visit Davids website Real Estate Investing.