Real Estate Tips

Though “flipping” real estate has become a popular practice, it is also pretty controversial. This is mainly because people have gotten into it without considering the ramifications of their actions and, consequently, engage in some very bad practices. The clumsy flipper can anger both the buyer and the seller-not to mention get themselves into some very awkward and costly situations-by flipping real estate. However, that doesn’t mean it can’t be done.

Flipping is simply the quick selling of a property that one has just purchased. The sale may take place that very day, or even at that very closing. The idea behind this practice is, if a property appreciates and I’m just going to turn around and resell it at a profit anyway, why wait? Why not buy up a whole bunch of properties, sell them quickly and make a ton of money?

See the allure? It can be done, but it is a tricky business. You cannot be a successful flipper without using some finesse. For instance, many people think they are being hugely clever by working the seller and the buyer against each other. The flipper, who sets himself up as a middleman without the knowledge of either party, actually gets the seller to agree to sell to him, then runs to the buyer for the cash, from which he pays the seller. Using this method, he makes the purchase without even using any of his own cash. Afterward, he simply pockets the difference.

But if he has sold a property to the buyer that isn’t actually his, and the seller learns what is going on, there could be trouble. The seller, aware that the flipper is in dire straits, will probably up his price. The seller now knows the buyer is expecting that property. It is even possible that the flipper has sold the property to the buyer and is then turned down by the seller. This puts the flipper in the position of having just sold something he can’t deliver.

According to Ken McElroy, author of “The ABCs of Real Estate Investing,” there are, however, companies that flip very successfully. This is because they follow a few simple rules, such as never selling something they haven’t actually purchased. On the surface, that sounds like such a basic idea, it is not necessary to mention it. However, you would be surprised if you knew the number of people who try to get away with not following this simple rule.

The companies who flip will resell a property that very day if at all possible, but they don’t sell at the very closing where they purchased the property. Instead, thy use mailing lists they have built over time to send out bulletins that they have a property for sale. It can cost hundreds of dollars to get the word out and arrange meetings. It can also require an entire staff to do it quickly enough to make it pay off.

Because of those particular limitations, it is often not lucrative for an individual to attempt flipping properties, although, conceivably, a particularly savvy individual could indeed make it pay off. The question is, is it a good approach for you?

About the Author:
Alex Anderson Connects Investors With Florida Investment Properties and Minnesota Real Estate Investment Property in Appreciating Markets.

Articles are for a variety of topics: real-estate, mortgage

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A Secured Loan Could Save You Money

What is a Secured Loan?

A secured loan is any loan that is secured on your home or property.
It is any loan which requires you to provide the lender with some
form of security other than just a promise to pay. The security will
be your property or home. The property may be mortgaged or owned
outright.

If you agree to a secured loan on your home, you should remember
that, although the property remains in your possession, it can be
repossessed by the lender if the loan and the interest are not paid
according to the agreed terms. The lender will then sell the
property in order to recover the money you borrowed plus any
additional costs incurred in recovering the money.

Secured Loan Benefits

In many instances secured loans can be repaid over a longer period
with a lower monthly repayment. The interest rate will be lower on a
secured loan than on a comparable unsecured loan. A secured loan may
also offer more flexible repayment periods.

1. If you’re a homeowner, you may get a lower rate through a
secured loan using your property as security. By taking out a
secured loan, you are agreeing to allow the forced sale (foreclosure
or repossession) of the asset in order to pay back the loan. The
risk to the lender is reduced so the interest rate offered is lower.
This is why secured loans tend to be cheaper than unsecured loans
and other forms of borrowing. The lender has the added benefit of
security, which provides protection in the event of your inability
to repay.

2. Secured loans are more easily accessible to those with a poor
credit record. This means that persons who are self-employed, or who
have recently changed jobs, or who have adverse credit (ccjs,
arrears, defaults, etc.) can take out a secured loan.

3. You can borrow larger amounts and repay over a longer period. The
amount available usually ranges from £3,000 to £50,000, although
some lenders will consider lending more. Compare this to unsecured
loans where you’re only allowed to borrow up to £25,000. If you wish
to borrow a larger amount or if you require a longer period in which
to repay the loan, secured loans may be the most suitable for you.

4. You can consolidate more expensive borrowings into a single much
cheaper monthly payment. You may choose to take out a secured loan
in order to consolidate debts and replace high-interest loans with a
low-rate loan. The loans being consolidated may include higher
purchase loans, unsecured loans and credit cards.

Useful Points to Remember

Before you take out a secured loan, make sure that you can afford
the monthly repayments. Also, read the loan agreement carefully and
pay particular attention to the rate of interest required, the term
of the loan, the repayments required and the total amount payable.
If you fail to repay the loan, the lender may repossess your
property or home and sell it to repay the loan. If you borrow money
using a mortgage as security you are agreeing that the lender can
claim the mortgaged property if you fail to keep to the agreement.
Your home is at risk if you do not keep up repayments on a mortgage
or other loan secured on it. You can read some more articles about
secured loans at: http://www.commercial-mortgage-guide.org.uk/loanguide/

© Copyright 2005, Bwalya Mwaba writes for the The Commercial
Mortgage Guide. Visit our website for mortgage related news,
articles, tools and more: http://www.commercial-mortgage-guide.org.uk/. This article may be reprinted as long as all the
above links are active and clickable and this author box (byline) is
not edited.

Blog Directory

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Good Credit Is a Necessity for Daily Living
Copyright © 2005 Jeanette Joy Fisher
Real Estate Credit Help Center
http://www.recredithelp.com/

Most of us want a good credit report to obtain vehicle
financing, credit cards for emergencies and luxuries, and to
finance a home mortgage. However, beyond these consumer
loans, a great credit report makes your life easier.

Having a credit card means that you can order tickets, rent a
car, and reserve hotel rooms. Your strong credit score makes
it easy for you to arrange cell phone service and necessary
utility services, without large deposits.

Besides these conveniences, your credit report can mean that
you must pay high deposits and rates for everyday services.
Did you know that poor credit history can keep you from
getting utility connections, good telephone rates, the best
auto insurance, high-quality home owner’s insurance, or even
prevent you from getting hired?

Some utility companies set minimum standards for service
connections. If your report shows collection accounts for
prior utility bills, you may not be eligible for service at
all. And if they do agree to connect your service, you’ll
need to pay a higher deposit than another customer with good
credit, who may not need to make any deposit. The same
requirements exist for telephone services. People with high
credit scores don’t need to pay deposits for home telephone
or cell phone services.

What many people don’t realize is that good credit enables
them to get better insurance rates. High-quality, low-cost
home owner’s insurance, auto, and life insurance companies
set minimum credit standards for their policy holders. This
means that consumers with poor credit have to pay more for
less coverage. Many automobile insurance companies now base
monthly premiums on credit scores. These companies offer a
17% discount if your score is over 625 and a 25% discount if
your score is over 725. Why? Because according to consumer
surveys, people who care about their credit also take care of
their property and drive with caution.

Terrible credit can cost you a job. More and more employers
look at a candidate’s credit report and hire the person with
better credit, assuming that better credit equals better
integrity and character.

What you don’t know about your credit could be hurting you.
Don’t wait until you need your credit to work on any
problems. Strong credit translates to personal reputation.

———————————————————————
Copyright (c) 2005 Jeanette J. Fisher. All rights reserved.

Jeanette Fisher, author of “Credit Help! Get the Credit You
Need to Buy Real Estate,” helps people buy their dream home
or finance multiple investment properties. Jeanette teaches
real estate investing and Design Psychology. For help with
your credit or answers to your questions, visit the Real
Estate Help Credit Center at http://recredithelp.com/ Get
the credit you need to buy one house or twenty!

Listening Strategically

By: Robert F. Abbott

Usually, we’re most interested in communicating outwardly; getting our
messages out to others. But finding ways to hear what’s going on around
us can be just as important.

Let’s start by identifying three different types of listening we do.
The first type - informal listening - comes naturally, as in listening
to another person. I take in what you have to say, and how you say it.

A second type, competitive intelligence, is a systematic process for
monitoring sources and gathering information. That information is
aggregated, processed to bring out the important points, and
distributed to others who can use it to make decisions.

In this article, we look at a third type, a less rigorous approach to
competitive intelligence, one that falls somewhere between simple
listening and formal competitive intelligence. Call it strategic
listening, a relatively simple way to stay on top of issues that affect
your organization.

Let’s start with objectives, which we normally do when looking at
something strategically. Ask two key questions, “Why are we doing
this?” and “What will we do with the information we gather?”

The first question focuses our efforts by putting them into the context
of our overall goals. The second question, “What will we do with the
information we gather?” relates to more immediate issues. It helps us
articulate how we will use the material, and that in turn, affects the
way we see our objectives.

Next, we need a process for gathering, managing, and storing the
information we gather. What sorts of sources? How will we get them?
What will we do with the material? How will we store it?

Once we’ve listened and gathered our information, we need to manage it.
All those mounds of paper and electronic files must be boiled down into
chunks of information that others can use easily.

This part of the process might involve the selection of excerpts or it
might involve writing summaries. It might require an argument or simply
a statement of facts that allows others to draw their own conclusions.

The final step in the strategic listening chain is to provide feedback
to those who provided raw information, and to get feedback from those
who used the processed information (or intelligence) we provided.

Giving feedback to those who provided raw information could be
considered a courtesy, and a way of encouraging them to keep supplying
us. Gathering feedback from those who used the processed information
will help us determine whether or not we met the objectives that got us
started.

In summary, one important form of listening is strategic; that is,
informally gathering and processing information that helps us stay on
top of issues that affect our organizations. The four key steps in this
process are: setting objectives, developing processes, managing the
information, and gathering and getting feedback.

Robert F. Abbott writes and publishes Abbott’s Communication Letter.
Learn how you can use communication to help achieve your goals, by
reading articles or subscribing to this ad-supported newsletter. An
excellent resource for leaders and managers, at:
http://www.communication-newsletter.com

Online Home Equity Loans: A Basic Glossary

Home equity loans can be a great idea for individuals looking to
get out of debt or make necessary repairs on their homes.
During the process, you will come across a variety of terms and
acronyms. We have gathered together some of the basic terms that
you come across during your home equity loan. If you have any
questions about any of these terms, make sure to consult with
your mortgage lender.

Adjustable Rate Mortgage (ARM): This type of mortgage has an
interest rate that will change over time. Typically the
interest rate will be lower than fixed mortgage products.

Amortization: Loan payments that will cover both principle and
interest in one payment. Your lender will likely give you an
amortization schedule outlining your payment schedule.

Annual Percentage Rate (APR): This is the cost of credit on a
yearly basis.

Appraised Value: An appraiser will determine the value of your
home based on experience, market data, and other information.

Cap: This is the limit on how much an interest rate can increase
over the life of your loan.

Closing/Closing Costs: This is the final step in the real estate
transaction. This would include the delivery of the deed,
signing of the notes, and final disbursement of the funds.
There will be various fees associated with a closing, such as
attorney fees and taxes, that are called closing costs.

Depreciation: An overall loss on a property due to age, physical
deterioration, and economic factors.

Discount Point: A buyer can pay the lender a set fee for a lower
interest rate. This is usually a percentage of the loan itself.

Equity: This is the amount of money that you have vested in your
home. This can be determined by subtracting the lien amount
from the property’s value.

Equity Loan: A loan or line of credit that is based on the
amount of equity that you have in your home. Your home is
essentially used as collateral.

Fixed Interest Rate: An interest rate that remains constant
throughout the life of the loan. A fixed-rate mortgage will
have the same interest rate and payments for the length of the
loan.

Home Equity Line of Credit: Similar to a home equity loan, but
you receive a line of credit that you can draw upon at any time.

Home Equity Loan: A loan based on the amount of equity you have
in your home.

Interest: This is the cost for borrowing money.

Interest Rate: This is the percentage of the loan amount that
you must add to your principle, for the privilege of borrowing
money.

Loan-To-Value Ratio: This is the ratio between the amount of the
loan and the actual value of the home. Some loans can give you
up to a 125% Loan-To-Value Ratio.

Market Value: This is the price that buyers would be willing to
pay for your home, at the present time. This can vary from the
actual sale price of the home.

PITI (Principal, Interest, Taxes, and Insurance): This is the
usual breakdown for mortgage payments.

Principal: The amount of your original loan before interest was
added.

John Ross is a freelance author who writes articles about
financial loans including: http://www.loanchbox.com/ ,
http://www.loanchbox.com/online-home-equity-loans.html , and
http://www.loanchbox.com/home-equity-loans-fixed.html The
Loanchbox is a user friendly website designed to inform
beginners about home equity loans.