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Why Lease Options Are Excellent For Real Estate Investing

admin — Fri, 29 Jan 2010 07:10:59 +0000

As the real estate market evolves and changes, there are fewer mortgage loans available and fewer people who qualify as the factors for qualification become more stringent. Having less than perfect credit puts, a cramp on the ability to obtain the necessary financing for a traditional home purchase, but that does not mean that fewer people want to settle into a home and become a homeowner. Real estate investors are learning that they can benefit from this situation and make a profit by offering nontraditional means of obtaining a home to those with credit that is not well established or is less than satisfactory to a mortgage lender.

Lease purchase options, or rent to own homes, are a great source of income for the creative real estate investor who wishes to make money while helping those who cannot get into a home with their own credit to realize their dreams of owning a home. Lease purchase options work much like a leasing a vehicle, only on larger terms. It benefits the tenant buyer who cannot obtain a mortgage to purchase the home by offering them the opportunity to build their credit and make the choice to purchase later while also assisting the investor by maintaining an additional source of income for the duration of the lease period.

When a car is leased, there is a nonrefundable deposit paid to the dealership that equals a percentage of the car’s value. This is also done in a lease purchase or rent to own agreement and is referred to as the Nonrefundable Option Payment, securing the tenant buyer’s ability to choose whether or not to purchase the home at the end of the lease contract agreement. As with a vehicle, there is a lease contract signed in which the tenant buyer agrees to make a payment of a certain amount each month for a predetermined length of time, usually 12-24 months. This can be done in a manner that includes payments to be credited toward the purchase of the house or not, depending on how you want to set up the lease.

Finally, at the end of a car lease, the driver has the option to finance the remainder of the “balloon payment” owed on the vehicle in order to purchase it or to turn it back over to the dealership. In real estate, when working with a rent to own or lease option contract, this is referred to as the Option to Purchase contract, in which the tenant is given exclusive rights to purchase the real estate property without you offering it to the highest bidder first without obligating them to purchase when the lease is up.

If the option contract was signed so that the payments made during the lease period were credited toward the purchase of the home, the tenant buyer will need to obtain a mortgage loan equivalent to the remainder of the purchase price originally agreed upon. If there were no rental credits, the tenant buyer will need to obtain the entire purchase amount.

Lease purchase options and rent to own housing are excellent ways for a real estate investor to make a lot of money because there are three different sources of money coming in, all of which add up to a sum greater than the original investment by far. You put little money into the purchase, and in exchange, you receive an up-front payment, monthly installments, and finally a purchase payment equal to an amount greater than you paid.

By: Charles W. Moore

Review Of the Northwest Arkansas Real Estate Investors Association

admin — Thu, 14 Jan 2010 11:13:41 +0000

There are many advantages you can take advantage of when you become a member of the Northwest Arkansas Real Estate Investors Association. Many of the benefits include access to articles, forums, books, clubs, lenders, and more.

When you are a member of the Northwest Arkansas Real Estate Investors Association you have access to hundreds of investing articles. Having access to these articles provides an abundance of real estate and investment education. You can learn about wholesaling, exchanges, protecting assets, hard money lenders, leasing options, mobile homes, and more.

As a member of the Northwest Arkansas Real Estate Investors Association you also can have access to many online real estate investing courses that will help you learn and understand everything you need to know to be successful with your real estate career. Courses offered through the club include topics like leasing options, purchasing, short sales, pre-forclosures, tax sales, and more. These courses could cost you thousands of dollars if you were to take them through a school and you can access them for free when you are a member.

You can also have access to real estate investment clubs and cash flow clubs when you are a member of the Northwest Arkansas Real Estate Investors Association. You have the opportunity to browse up-to-date investment club listings on the internet and find investors who are near you. You also can find and interact with local cash flow clubs near you.

When you are a member you also can have access to all of the landlord tenant laws and investing and real estate laws. This allows you to be up-to-date and current on all of the laws so you are doing everything you need to be according to the proper statutes. You don’t want to break any laws and not know it.

When you are researching properties and you are a member of the Northwest Arkansas Real Estate Investors Association you can access information on the tax appraisal districts. This gives you the opportunity to be on top of information on tax appraisals and have a heads up while you review the tax assessor lists.

Another benefit you can take advantage of as a member of the Northwest Arkansas Real Estate Investors Association is that you can browse real estate classifieds you might not see under the MLA listings. You can have access to place your own free ads with these classifieds. This is an excellent opportunity to advertise your properties when you are an investor because there are hundreds of eyes that are reviewing these classifieds everyday looking for new investments. You cannot go wrong remaining active with their classified ads.

The Northwest Arkansas Real Estate Investors Association is a fantastic membership you should acquire if you are a real estate investor. You can meet plenty of other investors and find financing for endeavors if you need it. You can also chat and interact with other investors if you have questions or if you are looking for advice on certain things. Becoming a member allows you to take advantage of the education and updated information that will help you be extremely successful with your real estate investment business.

By: Brian Garvin

Mortgages For Real Estate Investors

admin — Wed, 13 Jan 2010 12:57:32 +0000

It is most exciting and somewhat frightening when you make that first decision to do some real estate investment. No doubt you have a sum of money of your own that you are going to invest but you also have a need for mortgages for real estate investors. This is an entirely different financial world compared to just going and obtaining the mortgage you had for your personal mortgage. Now you are in the investment world and if you are new to it then you have much to learn.

To begin with, you need to determine just where it is that you need to go to obtain mortgages as an investor. Then once you have learned this you will need to determine just exactly what do you need to present to the potential mortgage lenders in order to convince them that your property deal is worth investing in.

Finally, you need to have a good understanding of the mortgage jargon. This in itself becomes quite a challenge, as there are many different types of mortgages that may be available to you and not only do you need to understand them you may need to determine with is the best ones for you. Mortgages for real estate investors can seem very complex at the beginning but as you proceed to gain knowledge about them, you should soon become quite knowledgeable in the subject.

Here are some examples in the types of mortgages you may be faced with.

• You may be given the opportunity to pay your interest only which means that you will be paying lower amounts. This is fine if money is a little tight, but the downside is your rates could go up. This is an interest only mortgage.

• The rates of the mortgage may be low to start out with, but these rates could change and increase over the time that you hold the investment, which is your responsibility. This is an ARM mortgage (adjustable rate mortgage).

• You may want something a little more predictable and in that case, you would want to know right from the start what your rate is going to be and know that it will remain that way. The down side is you may end up paying more in interest if the rates should change. This is the risk that goes with this Fixed Rate mortgage.

• If you do not mind taking risks then one of the most favored and considered lucrative type mortgage is the zero down mortgage.

• Finally, you may be given the option to spread the amortization of the loan out over a longer period of time. The problem with this is that you will eventually end up have to re negotiate financing.

Although there are many mortgage choices it does not mean that you will qualify for every one of them, but most likely there will be a few to choose from pertaining to your particular investment. Therefore, as you can see mortgages for real estate investors can be a little more complex than one might perceive in the beginning.

By: Mike Lautensack

Real Estate Investor for Newbies – Strategic Action Plan for Bird-dogs

admin — Mon, 28 Dec 2009 06:29:25 +0000

As a bird-dog your Real Estate Investor action plan is just part of your long-term goals, short-term goals and monthly action plan. Your goals (will probably) also include your personal aspirations, which may include weight loss, exercise, spirituality and other personal goals.

As a bird-dog we are most concerned with the steps in your Real Estate Investor Strategic Action Plan, which at this point are relatively simple:

• Learn as much you can

• Find other Real Estate Investors

• Determine the number of leads you will pursue

• Generate the leads from a variety of sources

• Submit leads to your Investors weekly

• Follow up with Investors and get results An action plan requires that you take action. Real Estate Investors won’t come to you for leads. Don’t wait, put your plan together and act on it. Get started immediately, you can always make changes and adjustments as you carry it out and discover what works best for you.

As a bird-dog you need to establish How Many Leads You Can Generate in a Month. This is a good question. The answer of course is up to you. How much time and effort can you invest into your business?

For the first month as a bird-dog Real Estate Investor set a goal of generating 200 leads which is only an average of 50 per week. This is realistic and will get your feet wet, as you explore the various ways to find leads and learn the process.

As you fine-tune your lead sources the number of leads will drop, but your referral fees will increase. This is the result of concentrating on the sources and Real Estate Investors that are most productive. We will cover this later.

As a more experienced bird-dog you can goal to obtain between 300 and 500 leads per month. These are just some general guidelines, but you may be able to find even more!

Break your target number down to a weekly basis, 75-125 leads per week. This may seem like a high number, but it is perfectly achievable, if you are willing to work at it.

It is essential that you put your Bird-dog Real Estate Goals in writing. Furthermore, it is just as critical that you review them often. One of the best ways to make this a habit is to review your written goals each night before you go to bed and each morning before you start your day. This is a great way for all Real Estate Investors to remain focused!

By: Chris Parks