Are You Profiting From O.P.P.?
May 23, 2007
Are you profiting from O.P.P.? If not, why not?
We know many of you have the desire and dream of running your own home-based business. But, like so many people, you’re not sure where or how to start.
You’re not sure what type of business you should look for. You’re not sure if you could do it. You’re not sure if you really can achieve the financial freedom you want for yourself and your family.
You’re confused by all the get rich quick scams you see all around you. You can’t pick up a newspaper or get on the web without falling over an ad telling you that yes, you too, can be a millionaire by next Tuesday if you just buy my Secret Formula.
You’d happily make the investment of time, money and energy, if only you could find a business that was legitimate. You’re smart enough to know that any business worth having takes effort and requires time to grow.
But what to do?
Well, let us ask again. Are you profiting from O.P.P.? If not, why not?
Landscaping Adds Great Value to Real Estate And Helps You Sell
May 22, 2007
Over the years several of our clients have had professional landscaping done and it’s amazing to me how little landscaping, can be done for $5-10,000, by a professional Landscaper, and how little value it can add to your home.
Small shrubs, trees, and plantings add almost nothing, or actually nothing at all, to your home value on the open market — until they are several years older! There is another way!
Some savvy investors look for good homes that are poorly landscaped and after spending a couple of thousand dollars or less put the property right back on the market for much more money and sell it. In any given area there are seldom more than one of these folks who use the techniques described below.
Better landscaping can be done and it can be done less expensively. Yes… Bigger trees, shrubs, mature ground cover, and other plants are better, and far more valuable from the viewpoint of added property value in landscaping and they can be cheaper too! Even if you plan to purchase your personal Homestead and keep it forever — it pays to plan ahead.
Real Estate: Buyers Agent, Sellers Agent & Dual Agent (defined and explained)
May 21, 2007
There is a relatively new and not always well understood practice in Real Estate sales; it is called Buyer Agency or Buyer’s Agent. Until recently Realtors and agents usually represented the seller, in opposition to the buyer, during the real estate transaction. Even the real estate agent who drove you from home to home was not truly working on your behalf. By law, the agent was required to work on the seller’s side in order to get the highest price and the best terms for the seller — Period! Some agents still work this way.
In the last few years, first the law and now the practice of representation has changed. We have an entirely different set of options and agreements when we are buying real estate. These options were previously only available and utilized by large companies or wealthy individuals. In the past, the buyer would get a buyer’s representative by paying a fee up front and usually by the hour, until the transaction was complete.
Legal Information About the Real Estate Contract
May 20, 2007
The conclusion of final agreement between a seller and a buyer is the Agreement of Purchase and Sale. We know it as the real estate contract.
There are five mandatory requirements for a contract under contract law:
1. The name, address and contact data for the seller(s) and buyer(s).
2. A clear description of the property. We prefer the tax map and parcel number but a street address, or other clear description will do. Such as “parcel known as Hudson Farm, being 456 acres more or less fronting on west side of US Route One and County Rd. 264, being about 9 miles north of Rehoboth in Sussex County Delaware. The final description on the deed at settlement will contain the Book and Page number where it was purchased, a survey description and tax map ID. For the contract any clear description that could ONLY be the property being sold is sufficient. This can be the Tax I.D. number.
3. The price and terms of payment. For instance: cash at settlement in thirty days from the date of this contract. Here should also be noted the deposit or consideration which may be as little as one dollar BUT is normally 10% of the purchase price.
High Tension for the Buyer and Seller of Real Estate Can Be Reduced
May 20, 2007
Tensions can run high in both the selling and buying of real estate. After all, there is a lot of money and emotion involved! There are also time pressures and numerous privacy issues to deal with. The sale and purchase of real estate can be a lengthy process involving numerous professionals from many fields.
The Real Estate Center at Texas A&M University asked 3,000 Texas home buyers to describe their recent purchase, about 400 replied. Their responses showed how stressful buying a home can be, for buyers and sellers. The Realtors and attorneys who try to keep all tensions at bay in order to complete the transaction also feel the burdens of stress!
“The process is grueling in the best of circumstances, and the severe sellers’ market of recent times only increased the stress,” says Dr. Jack C. Harris, Center research economist. “In conjunction with Lawyers Title Company, the Real Estate Center asked recent home buyers about their buying experience and what changes they think would make the process more buyer friendly.” (quote from Real Estate News Information Service Feb. 24, 2001)
Tax Deferred Exchanges of Investment and Business Real Estate
May 19, 2007
The Primary Residence taxation, the Residential Replacement Rollover, Sec. 1034 exception is gone. Previous capital losses still apply, if the property is held as investment property and sold at a loss and that loss can be carried over for up to 7 years. For those over age 55 the primary residence or residential sale exclusion of taxation is gone. Tax deferred exchanges remain a viable way of deferring taxation on investment real estate.
It is required to analyze and pre plan prior to transaction. That analysis must be done by an updated tax deferred exchange professional such as those we have on retainer. Not only do you need a tax attorney, but a real estate attorney, and an expert attorney working with them - that is a specialist in only tax consequences; especially those of tax deferred real estate transactions. There must be proper forms and written documents before the transaction is done. This requires planning and a review of limitations as well as a formal and professional critique of assumptions and decisions.
Real Estate, Real Property and Leased Land; Definitions, Discussion and Explanations
May 18, 2007
Delaware, and the rest of the original British Colonies, has some land that is leased rather than owned by the residents of that land. Much of it is not evident to the casual observer.
The land on Lewes Beach is leased, not owned by the home owners. The land of Lewes Beach is owned by the Town of Lewes. The lands of Rehoboth by the Sea and Dewey Beach include leased land too. Most of the leases on that land will NOT be renewed but will return to the owners and the homes on top of that land will be removed by the home owners at their expense. Much of the land in Riverdale, on Indian River Bay, adjacent to Oak Orchard is leased as well. In Riverdale the leased land is owned by Chief Clark of the Nanticoke Indians.
We have about half the inhabitants of Sussex County living on leased land; most of that leased land is found in what people call mobile home parks or communities. However, in those communities there are seldom any homes that are truly mobile and there are even two story stick built homes on some of the leased lands in those communities. Condominiums and town houses are sometimes found on leased land as well. Some folks find all this rather difficult to understand.
What Can I Realistically Earn In A Lease Purchase Business?
May 17, 2007
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.
Various Aspects Of The Lease Purchase Business
May 16, 2007
In a previous article, we wrote why we believe that Lease Purchasing is the perfect home-based business, here we want to briefly touch on some of the actual aspects of operating such a business, the pluses and minuses and why Lease Purchasing represents a win-win situation for the seller, the tenant/buyer and just as importantly, you, as the business owner.
One of your goals in operating a Lease Purchase business is to contract for property that you then move to the tenant/buyer. There are a number of unique strategies that can be employed to reach this end.
You can lease purchase the property and then sub-lease to a tenant/buyer. In this strategy, you are taking on the responsibility for all payments to the seller. However, it also affords you great profit potential. You can collect money up front as option consideration, you receive the positive cash flow and you can make additional money at the end if the option is exercised. For those of you not familiar with the term positive cash flow, this is the difference between what the tenant/buyer pays you and what you pay to the original seller. This is also known as a sandwich lease purchase.
The Many Benefits Of Lease Purchasing
May 15, 2007
Lease Purchasing affords wonderful benefits and opportunities to sellers, buyers, investors and those who would like to operate a home-based business. Lease Purchasing allows you to control property without ownership which has benefits for all.
What Is A Lease Purchase?
A Lease Purchase is a process that combines a basic rental lease with an agreement to purchase, or with an option to purchase the property. The Buyer (or Lease-Purchaser) pays to the seller a monthly payment that usually approximates a rental amount or a typical mortgage payment on the home. A percentage of that payment is typically applied towards the purchase price. At the end of the term, the buyer has the right to purchase the property for the price and terms to which both parties have previously agreed.
Put another way, a lease purchase is essentially a rental agreement combined with a purchase contract with pre-negotiated terms. The buyer leases the property for a specific period of time and then purchases the property before the end of the lease agreement. Sales price, length of rental, rent credits, escrow instructions, etc., are all contained in the agreement.
