Dallas Appraiser L.L.C. wants your help and commentary on our Real Estate Blog

Title: 

Property Foreclosure

Word Count:

624

Summary:

When a person buys a home, he has to take a loan regularly. The lenders, generally banks, keep the title to home collateral in this case. When the person is unable to pay the dues and payments in time, the ownership of the home is moved to the lender. Transferring of ownership to lender is called Foreclosure.

Keywords:

Property Auction Zone,Property auction,sell your house,sell your houses,sell your houses fast, home appraisers, DFW appraisal, appraisals

Article Body:

When a person buys a home, he has to take a loan regularly. The lenders, generally banks, keep the title to home collateral in this case. When the person is unable to pay the dues and payments in time, the ownership of the home is moved to the lender. Transferring of ownership to lender is called Foreclosure. Buying foreclosure has been compared to playing poker. Considering as an investment, it has its own risks. First the lenders will check out if there are any junior liens. When they find any pending loans, they pay off everything so that they themselves have clear title to the property. Once this is done, the lender adds up all costs to the loan amount to be recovered, and again resells the property so that they can convalesce the expenses together with the loan amount. This is an ideal time for investors to buy such property. Buying a property that has been foreclosed already has many gains.

The foremost and well-known benefit is the fact that all properties bought from lenders will have clear titles and ownership rights, thereby saving you the difficulty of doing any research. Next fact is that the foreclosure is not for profit booking. When the lenders sell foreclosed property they need their money back, so they are ready to sell the property cheaper than what it could have obtained in open market under normal conditions. The first step of buying foreclosure is to gather information. The best idea is to make a database in a specific manner so that you will have separate data on all the properties and markets in clear sets. The next step is to directly get in touch with the foreclosure owners and start negotiating with them. If you have the address of property but not the name, online directories may help you to find the pertinent names. Buying foreclosure property as a beginner on your own can be risky and if you are trying to buy such properties get help from agents. 

One of the risks occurring is that when buying foreclosed property at auction, give just a week to deposit all the cash, and if you fail to do so, you may lose all your deposit at certain times. But as you keep on investing and making money, you can gain experience about bad construction, poor soils, problems with septic systems etc. Background reading and relevant information is extremely important before you get into foreclosure investing. Foreclosure laws in your state, priority of liens, bidding at auctions, title insurance, and bankruptcy are some key areas where you should obtain complete knowledge. You will be able to make better and safer investments in this way particularly. Property investment is not an easy game, and must be played only with caution and care. Little concerns for the person whose property is up for foreclosure are necessary for this process. But you can easily cut down the process of foreclosures into three primary stages. The first stage is pre-foreclosure, second stage is foreclosure auction and the third and final stage is bank owned foreclosures.

In general as you move along the timeline of the foreclosure process your potential for profit will diminish the latter you get to the foreclosure a property. If you're planning on making a full-time living eventually from real estate investment then you'll want to learn in baby steps how to get the most out of your time and efforts without any doubt. With that saying for those who are ambitious enough to do this full time work you have to learn how to find pre-foreclosures because they normally offer you the utmost leverage and profitability relevant to the most deep discounted properties available via bank owned properties.

Title: 

Property Foreclosure: An Ideal Investment

Word Count:

509

Summary:

When a person buys a home, he/she usually has to take a loan. The lenders, generally banks, keep the title to home collateral in this case. The ownership of the home is transferred to the lender when the person is unable to pay the dues and installments in time. This transfer of ownership to lender is called Foreclosure. Buying foreclosure has been compared to playing poker. As an investment, it has its own risks.

Keywords:

foreclosure, foreclosures, foreclosed property, foreclosure investing, buy foreclosures, buying foreclosures, foreclosure buying, home appraiser, home appraisal, DFW appraisers

Article Body:

When a person buys a home, he/she usually has to take a loan. The lenders, generally banks, keep the title to home collateral in this case. The ownership of the home is transferred to the lender when the person is unable to pay the dues and installments in time. This transfer of ownership to lender is called Foreclosure. Buying foreclosure has been compared to playing poker. As an investment, it has its own risks.

The lenders first determine if there are any junior liens as well. When they find any pending loans etc, they pay everything off so that they themselves have clear title to the property. Once this is done, the lender adds up all costs to the loan amount to be recovered, and then again resells the property so that they can recover the expenses and loan amount. This is an ideal time for investors to buy such property. Buying a property that has been foreclosed has many gains.

Benefits of acquiring foreclosed property from lenders:

The first and most prominent benefit is the fact that all properties bought from lenders will have clear titles and ownership rights, thereby saving you the trouble of doing any research.

Next is the fact that foreclosure is not for profit booking. When the lenders sell foreclosed property they want their money back, so they are ready to sell the property cheaper than what it could have fetched in open market under normal conditions.

How to buy foreclosed property:

The first step is to collect information. The best idea is to make a database specifically so that you will have separate data on all the properties and markets in clear sets. In addition, that way you will be aware of any specific laws that you may need to abide by while making an investment. The next step is to directly contact the foreclosure owners and start negotiating with them. If you have the address of property but not the name, online directories may help you find the relevant names.

As a beginner, buying foreclosure property on your own can be risky. Try to get help from an agent if you are trying to buy such property. They have all the required knowledge.

Risks involved:

One risk is when buying foreclosed property at auction, sometimes they give just a week to deposit all the cash, and if you fail to do so, you may lose all your deposit. As you keep on investing and making money, you will gain experience about bad construction, poor soils, problems with septic systems etc. Background reading and relevant information is extremely important before you get into foreclosure investing. Foreclosure laws in your state, priority of liens, bidding at auctions, title insurance, and bankruptcy are some key areas where you should gain full knowledge. That way you will be able to make better and safer investments.

Property investment is not an easy game, and must be played only with caution and care. Some compassion for the person whose property is up for foreclosure is also essential.

Title: 

What Is The Definition Of Cap Rate, And Why Does It Matter?

Word Count:

932

Summary:

Learn about cap rate and how it s used to determine the value of income producing commercial properties.

Keywords:

commercial real estate, real estate, cap rate, investment

Article Body:

In commercial real estate, cap rate, or capitalization rate, is used to determine the values of income producing properties such as apartments of five units or more, office buildings, strip malls and other such properties. The cap rate can represent extremely different things to different people in respect to their interests in commercial real estate. Before we investigate why cap rate matters, and what it means to specific people, let's look at the actual equation and see how it works.

Cap rate has two main components which area: net operating income (NOI) and price or estimated value of the property. NOI is found by subtracting all expenses from the gross income of the property. When the NOI is divided by the price or value of a property, you are left with the cap rate.

You can move the components of cap rate around in order to determine each of the variables in the equation. The different equations used to determine any of the three variables are below:

                   NOI 

Cap rate = --------

                   Price

               NOI

Price=  ----------

           Cap Rate

NOI = Value x Cap Rate 

As you can see, depending on the information you have regarding the property, you can determine any of the three variables.

That's great, you say, I can determine these three variables! But how does it affect my commercial real estate endeavors?

To show the main differences between cap rates, I am going to divide investments into three major categories:

Safe investment: Cap rate of 5%

Average investment: Cap rate of 10%

Risky investment: Cap rate of 20%

What the buyer wants out of the property determines what a buyer is looking for.

For example, property being sold at a 5% cap rate is often characterized by low vacancy percentages (less than 5%-10%), beautiful property grounds, good management, up to date amenities, and rents or leases priced at market rate. There is a positive and strong cash flow every month because the property is operating at its full potential.

This property's value is greater when operating at peak performance, so a higher price is asked by the seller, making the cap rate lower. Those who buy at low cap rates are often looking for retail, already performing property that brings in a steady cash flow every month. A buyer such as this is often part of a REIT, or real estate investment trust, or a professional, such as a doctor or lawyer, who wishes only to deal with good properties and watch the cash flow in.

A property being sold at a 10% cap rate is often characterized by higher vacancies (around 10%-20%), average grounds, an average management team and average amenities. There is definitely some room for improvement with these properties. A buyer who picks up a property like this is looking to make those improvements by increasing rates, renovating and fixing up the property, as well as employing a well operating management team. 

The sole purpose of this type of buyer is to create value in the property where it is lacking. It does take some work, and is more risky than the 5% cap rate property, so the asking price is less. Hundreds of thousands of dollars can be created in this difference between an average and good operating property. 

A property being sold at a 20% cap rate, or more, is usually considered a very distressed property with vacancies of 20% and more, rundown grounds, old buildings that are falling apart, a poor management team and even a problem owner. Because of the risk, low operating income and problems with the property, a person who is willing to undertake such a property must not be afraid of a little (or much) work and the risk involved in attempting to turn a property of this type around.

However, there are hundreds of thousands, sometimes millions of dollars to be made in these properties! It takes a keen eye and some varied and creative scenarios to determine if the property will perform as you expect it will.

As you can see, the cap rate can be great for one person, and horrible for another, depending on the type of investor the buyer is!

As a seller, the seller wants to sell the property at the lowest cap rate possible because that means it is being offered at the highest price possible. It definitely depends on the condition of the property, operating income, expenses, vacancies and management team to determine what the seller can get for the property. The market will dictate what the right price is for a property. 

Cap rates are considered the best way to determine the value of a property. Remember that a bank, or other type of lender, will be looking at the NOI of a property compared to the debt in order to determine if it is a safe investment for the lender. To a lender, the debt coverage is more important than the cap rate. However, if you can get the cap rate higher by getting a lower purchase price, then you can get a smaller loan, and possibly be able to cover the loan with the current NOI. It is a matter of working the numbers to see if a deal is feasible.

When you investigate commercial properties, use the cap rate to determine if the subject property fits your specific criteria. Always create future scenarios and manipulate the property's income and expense sheets to determine if you can get the money out of the property that you hope to get.

Gold mines can be found in higher cap properties, so check it out and see what you can discover in your own community.

Title: 

What Is the Best Color For Selling A Home?

Word Count:

444

Summary:

Love at first sight is a concept that applies to the real estate market. So, what is the best house color to sell your home to a love struck buyer?

Keywords:

real estate, house, color, sell, home, property, selling, houses, homes, home appraiser, Arlington appraisal, DFW appraisers

Article Body:

Love at first sight is a concept that applies to the real estate market. So, what is the best house color to sell your home to a love struck buyer? 

What Is the Best Color For Selling A Home?

When you go to social events, do you make an effort to snazzy yourself up? Of course you do. The simply fact is attraction is a key factor in forming relationships and the same applies to your house. When you put the house on the market, you need to make it look good for the dates with potential buyers. The color of your house can make all the difference. 

First, there is no absolutely correct answer to the best color. Instead, the decision depends on the makeup of your home and the surrounding landscape. Letís take a look at some issues: 

1. Whatever color you choose, make sure it doesnít clash with the other homes in the neighborhood. An otherwise appropriate color could end up making your house an eye-sore. 

2. The Roof. What color is the roof on your home? If it is a red tile roof, off-whites are probably going to be the best choice. Dark green will not. Unless you are going to invest money in a new roof, make sure the paint color doesnít clash with it. 

3. Highlights. If there is a particular part of your house that should be emphasized, used light colored paint around it to draw attention. 

4. Hide It! Conversely, if there are parts of the house that are mundane, use darker colors to draw attention away from them. 

5. On large flat surfaces, such as the side of a garage, keep in mind the color you choose will have a washed out appearance. 

Now we get to the fun part. After considering the above issues, make a preliminary list of colors and buy small cans of each color. In a private area of the house, start applying samples strokes a couple feet long and a foot or so wide. Try to paint examples in both shaded areas and those exposed to the sun. 

Do not immediately judge the results of your experiments. Instead, wait a few hours for the paint to dry and then start comparing. Dry paint takes on a very different appearance than wet paint. 

Once the paint is dry, take a long look at each sample. You will typically find the colors look much different than you thought they would. You may find one color is perfect or you may find something a little different would be best. Either way, youíll have come up with the best house color to sell your home.

Title: 

Words That Will Save You Big Time In Rehab Real Estate

Word Count:

578

Summary:

Use these magic words and reap more profits from your rehab real estate investments!

Keywords:

real estate investing, real estate investor, rehab real estate, distressed property, fixer upper, hard money, home appraiser, arlington home appraisal

Article Body:

Power Tip!

Have you ever wanted just one phrase that you could say at the right time, and it save you hundreds, or thousands of dollars?

When it comes to getting the best price from contractors, plumbers, electricians, HVAC techs, you name it, there is a simple phrase that often works like magic in reducing your costs.

These specialties are always competing for work. However, if you ask any of them they will likely tell you that they are extremely busy!

They might be. They might not.

There's a game going on here. They need to appear very busy so their services are in demand and support the prices they will ask for. At the same time, you need to appear to be willing and able to get prices from many sources. (Don't just make it appear that way, get multiple bids whenever it's practical!) It's a balance that must be struck.

The good part is that now you know the game...so play both sides since you know what the other side's play.

How to turn the tables

    * Have an idea of what the job will cost. Just a ball park idea will do.

    * If you are told something that you think it high, ask why so high. There might be more to it than you know. The reason for the high price might be reasonable. Discuss alternatives.

      (For example, if you electrician points out that the breakers you need are especially expensive, ask if he's got any used breakers that are still in good shape.)

    * Then use the magic phrase...

Here it is...

"Is that your final and best price?"

Very often the person you are talking to will squirm a bit at this point. They are having to think...

    "Is my price fair?"

    "Am I over pricing something here?"

    "Can I save this customer some money?"

    "Does the customer know something I don't?"

While your contractor/laborer thinks about this, don't say a word.

I've experienced many reactions from "That's the best I can do" to "If you give me the job, I'll knock it down to..." 

Often I've gotten a range of options that could save me money. More often than not, it saves my money!

It works like magic if:

    * They understand that they aren't your sole source of the service they provide

    * They know you are willing to wait for the best price

    * They know you aren't a push over

    * They know you might be a source of future income

But, it WILL work like magic when properly applied. In my own experience, I can point to many thousands of dollars of savings using this simple question.

We like to save money by keeping prices for services reasonable, true enough. At the same time, I advocate and approach of "don't let anyone get hurt." If you award a job to someone and it winds up costing them more than expected, I help that person out. I don't want someone to lose money on a job and leave with a bad taste in their mouth and never want to do work for me again. Be aware of when someone gets hurt. That said, watch out for those that claim to get hurt with each job.

Try out that phrase today. It works in many situations...not just rehab real estate, but in just about any competitive environment.

Title: 

Finding Structural Problems During Escrow in a Small Rural Home Example

Word Count:

491

Summary:

In rural home purchases, the transaction is often subject to a satisfactory home inspection being done. Any imperfections are usually corrected during escrow. Now and then, however, a home inspection uncovers severe structural problems. What happens then?

Keywords:

structural problems, Arlington home appraiser, Mansfield appraisal, DFW, appraise my home

Article Body:

In rural home purchases, the transaction is often subject to a satisfactory home inspection being done. Any imperfections are usually corrected during escrow. Now and then, however, a home inspection uncovers severe structural problems. What happens then?

Structural Problems ñ Small Rural Home

With a small rural home purchase, the discovery of structural problems can be more problematic. Typically, neither the seller nor buyer has sufficient funds to undertake major repairs. Still, solutions such as the following one can be found.

The house was a 3 bedroom, one bath, rambler built on a crawl space set on a one-acre lot in a rural setting. The sellers were a husband and wife both of who were disabled. I am not talking about slipping on a banana peel trumped up disability here. The husband had been electrocuted at work, spent 14 days unconscious and suffered a massive heart attack. The wife suffered from a progressive problem with arthritis. The buyer was a young widow with 3 children.

The home inspection turned up old termite and water damage. The termites had been killed and the drainage problem fixed, but the sill plates and floor joists were seriously damaged. The floors were somewhat soft and sagged in various areas. The young widow could not afford and did not want to deal with the problem. She asked to be released from the contract.

To complicate matters, the husband’s former employer had declared bankruptcy and had not paid his medical bills. The husband was borrowing money to pay the bills, but the medical bills were still growing. The sellers discussed the situation. They understood the buyer’s point of view, but did not know how to fix the problem. Their mortgage lender declined to make a second loan and the sellers did not have any savings left.

A business friend suggested the sellers ask a young builder friend to evaluate the structural damage. The goal was to get a ballpark idea of the cost to repair before throwing in the towel. It turned out that the builder could not remedy the problem because the house needed to be raised to give room for new sill plates and floor joists. The builder suggested a house-moving firm make suggestions.

The business friend also gave the sellers the name of a lender who had been useful to people in uncomfortable circumstances. The sellers contacted the lender and were able to get the necessary loan. The house moving firm and builder worked out a reasonable deal and the loan was used to get the necessary work done. The deal closed, the sellers paid off the loan, paid down bills and the buyer was happy.

The moral of the story? No matter what happens, do not get angry, do not lose your cool and do not give up. If you can keep your head, behave like a reasonable adult, and keep communication lines open, your chances of holding your deal together are amazingly good.

Title: 

Finding Structural Problems During Escrow in an Upscale Home Example

Word Count:

479

Summary:

When buying and selling homes, the property purchase is often subject to a satisfactory home inspection being done. Now and then, a home inspection uncovers severe structural problems. Here ís an example of a situation in an upscale neighborhood.

Keywords:

structural problem, appraise your home, home appraisal, appraiser, arlington texas, DFW

Article Body:

When buying and selling homes, the property purchase is often subject to a satisfactory home inspection being done. Now and then, a home inspection uncovers severe structural problems. Here ís an example of a situation in an upscale neighborhood.

Severe Structural Problems

Does the buyer walk away when there are serious structural problems? Yes, but not always. A lot depends on the constraints facing the buyer (are they relocating to start a new job, or just moving up in the same general area?) and on how much the buyer likes the property. The attitude, maturity level, communication skills, and flexibility of both buyer and seller also make a huge difference.

It ís easy to see a deal blowing up in this situation. Let me tell you about a situation I saw that actually worked out.

Structural Problems in an Upscale Neighborhood

The first involved two professional couples and a house one couple wanted to sell and the other wanted to buy in an established, up-scale neighborhood. The house was a colonial style, all brick, very traditional house built about 15 years ago using top of the line materials. The kitchen and bathrooms had been modernized and upgraded within the past 3 years. Top of the line materials (marble, ceramic tile, and granite) were again used.

The house was located on an acre lot that sloped gently down to the street in the front. About 10 feet from the right side of the house, the lot sloped steeply away to a pretty stream. The lot backed to a treed area of a beautifully maintained, historic estate owned by a university and open to the public on a fee-paying basis.

The home inspector noticed that the chimney on the right end of the house was pulling away from the house. It was about 2 inches away at the top, but the bottom was still attached. In the basement, there was some cracking along the wall the chimney was on. The home inspector would not certify the house as structurally sound, but recommended that an engineering firm take a look at it.

The buyer asked the seller to have an engineering study done. The seller was upset but did not go to pieces. Something was causing the chimney to pull away, so they called in an engineer. For legal reasons, the sellers also needed to understand what the problem was.

The engineer determined that shrink-swell soil was causing serious foundation problems. They recommended digging down a lot further than the original footers and constructing an elaborate new support system. The sellers agreed to do it and the buyers agreed to delay closing until the work was completed. Thirty thousand dollars later (out of the sellers pocket), the transaction closed.

In Closing

When considering the above example, what is the moral? If you keep a cool head and look for solutions, structural problems need not be a deal killer.

Title: 

Down Payment Gifts

Word Count:

344

Summary:

One of the biggest hurdles to getting into your first home is the down payment. Down payment gifts represent one way of dealing with this issue.

Keywords:

real estate, homes, houses, down payment, payments, gifts, sellers, buyers, non-profits

Article Body:

One of the biggest hurdles to getting into your first home is the down payment. Down payment gifts represent one way of dealing with this issue. 

Down Payment Gifts

Down payments can be one of the hardest things to overcome for first time homebuyers. Down payments can be extremely expensive, but the problem is they are extremely important. Although no down payment mortgage loans can be sought out, those loans are tricky and generally carry high interest rates meaning many avoid them. However, first time home buyers still need a way to be able to meet the down payment so they can proceed with purchasing their home. One of the forms of assistance that can be found to achieve this is down payment gifts.

Many organizations offer down payment gift options to home buyers. Also called a down payment grant program, down payment gift programs are offered by many organizations which essentially allow sellers of homes to help buyers with the down payment so they can sell the home to the buyer. You see, technically, sellers are not allowed to help with the down payment costs of buyers. However, through these down payment gift programs, sellers can go through a third party organization and the organization will handle the down payments and charge a small fee for doing this process. This is completely legal and there are no problems with doing this.

However, there are some things to know. The home buyer must qualify for a loan that allows gift funds. The funds provided can be used for down payments and/or closing costs. These funds can be used for new or existing homes, and any funds not used must be returned to the organization.

Down payment gift programs are just one way to help encourage new buyers to go through with their objective to buy their very own home. Buying a home can be expensive and extremely difficult, especially for new buyers, and down payment gift options are just one way to help make the process a little bit easier and more manageable.

Title: 

Selling Your Own Home - An Outline

Word Count:

624

Summary:

Thinking about selling your own home? Don't forget the important steps outlined in this article.

Keywords:

selling your own home, selling home, real estate

Article Body:

Selling your own home can be a time-consuming and frustrating process. Though listing with an agent is probably the best plan, I won't leave you do-it-yourselfers without some helpful information. In the right market, it may make sense to save the commission and do it yourself - if you know what you are doing. Use the outline here to do it right, and to avoid common mistakes.

<b>First Understand Home Value</b>

It's not what you think your house is worth, and it doesn't matter how much you put into it. The value is only what it's worth to potential buyers. See what they've paid for similar homes before you decide on a price. Do a market analysis - don't just guess. Over-pricing can cost you as much as under-pricing.

<b>Selling Your Own Home - The Rest Of The Story</b>

Be objective. Get your most honest and open friend to walk through the house with you. He or she will see problems you didn't even know were problems. "Sell" the home to him, telling him all the benefits of buying your house, and get his honest opinion of your sales technique.

Make a thorough plan. What will your kids say to those who call? Where will you close? Will your documents be prepared by an attorney? Plan well, and it will all go smoother.

Make a list. What needs to be repaired, cleaned, changed, or removed? Always do the most obvious things first. More on this in coming chapters.

Prepare the house for sale. Beyond the obvious cleaning up and repairing, look for easy improvements that will increase the value of the home.

Prepare your sales pitch. List any questions buyers might have, and be ready with answers. Prepare comparison sheets showing other home sales, so buyers can see the value in your home. Make a map showing nearby stores and libraries, etc. Sell the benefits, not the features. Never say "near stores." Instead, say "You can walk to the store in five minutes." Don't just say "garage." Try "No chipping ice off the windshield in the morning."

Put crucial information your advertising. Include the square feet, the number of bedrooms and bathrooms, the address, your telephone number, and the price. If you leave out the price, some buyers just won't call, plus you'll waste time with others who shouldn't be calling.

Listen to buyers. One mistake sellers make talking to buyers is to get defensive about their home. Listen to the criticisms, and resolve them or ask how important the issue is to the buyer. In other words, try to learn a little about selling.

Have forms ready. You don't want a buyer to say, "I love the house. I'll get an offer form somewhere tomorrow and then I'll be back." He might see another home he likes before then. Have copies of an "offer to purchase," or "purchase agreement" form ready. In real estate it is only legally binding if it is in writing. When you are selling your own home, you need to have ready the same tools that a real estate agent would have.

Have a clear sales agreement. Be sure it's understood by both sides. What happens, and when? What if the buyer doesn't get financing? What's included with the sale? When will the buyer take possession? Who pays the closing fee and the transfer tax? More on this in later chapters.

Make closing easy. Choose a closing company before you even have an offer. Have documents ready to sign. Prepare answers to likely questions. This will probably be the largest financial transaction in your buyer's life, so make him comfortable.

Use this basic outline, and you'll be doing better than the average seller when selling your own home.