Author View (Tina Merritt)

The thought of reading through a lengthy legislative act is painful to many of us; however, for a real estate investor, this is one that is a necessity.  Your State's Landlord and Tenant legislation is something investors must be familiar with and have on hand at all times. Why?  Because this legislation dictates how many properties one must own before coming under certain rules and regulations.  It talks about what happens when a lease expires and the landlord/tenant have a verbal agreement to extend.  It dictates the procedure for eviction and tenant personal belongings left behind.  It defines property abandonment and how more...

What defines what the investor considers to be a "good deal"?  Well, that depends on the goals of the real estate investor.  In order to determine what a good deal is, you need to know your expenses, your plans and your time frame.  There is no magic formula.  Each real estate investor must create their own definition of a good deal. For a buy-and-sell investor, the "good deal" is defined by many things:  holding costs, length of time needed to renovate, cost of renovations, cost of contractors, cost of financing, anticipated market time, etc. For the buy-and-hold real estate investor, the "good deal" more...

President Obama signed the Homebuyer Tax Credit this week.  This new tax credit extends and expands the credit set to expire on November 30th, 2009.  The new legislation is effective November 7, 2009 and expires April 30, 2010. Highlights are as follows: The first time homebuyer tax credit remains at: $8000.  First time buyer definition of eligibility:  must not have owned a principal residence for 3 years prior to purchase Repeat homeowner tax credit:  $6500 Current homeowner definition of eligibility:  Must have used the home sold or being sold as a principal residence consecutively for 5 of the previous 8 years Binding contract rule:  purchaser will have more...

It seems like there is always some defective construction product in the news.  Years ago it was lead based paint and asbestos.  Back in the mid to late 90's, it was EIFS, fire retardant plywood and Polybutylene plumbing.  Now, it's defective drywall from China.  What should you do?  Run away like everyone else from these properties or embrace an opportunity for a possible real estate investment deal? The answer is......it depends. EIFS (Exterior Insulation and Finish System) is an exterior coating used extensively in the 1980's and 1990's.  The product offers a smooth, stucco-like finish (though it is NOT stucco) that was very popular more...

There are many guidelines in the condominium lending world and investors need to know how these changes will affect them.  Why?  Well, the default rate on condominiums has increased substantially as units have faced foreclosure and associations have gone bankrupt.  Now keep in mind, I'm talking about condominium OWNERSHIP here, not necessarily the structure.  Condominium is a form of property ownership and a condo development can be the traditional apartment style structure, single family homes, townhomes or another variety of build-out. The new guidelines apply to all loans sold on the secondary mortgage market and insured by Fannie Mae or Freddie Mac more...

For many investors who rely on FHA-approved buyers to purchase their homes, the "Seasoning Rule" can be a big issue. What is the seasoning rule?  In a nutshell, with very few exceptions, FHA will not fund a mortgage for a property that has been owned for less than 90 days.  This causes many investors to lose money due to holding costs, extended time on the market and/or not being able to market to FHA buyers.  This rule pertains to any title transfer so if an investor transfers a property from one LLC to another, the 90 day rule goes into effect. On September more...

I hear it all the time from sellers, "I'm selling my house as-is".  Well, Mr. Seller, what if the buyer accepts the as-is provision, but the appraiser says the front porch handrail needs to be replaced?  What if the buyer's mortgage company won't lend on the property unless there is a clear termite and moisture inspection and your home needs a rotted board replaced in order to get a clearance?  Do you REALLY want to kill an entire sale over a relatively inexpensive repair? In most cases, if you truly MUST sell strictly "as-is", your buyer pool will be limited to cash more...

It's best to be judicious in your research regarding any Association you may become a part of as a result of a purchase.  Most people spend more time researching a stock to purchase than they do researching an Association in which they are buying a home.  Don't make that mistake!  The Resale Certificate.  This is usually a 2-4 page document which states whether or not the present owner is current on their dues, what the dues are, whether or not there are any planned assessments coming up, if the property being transferred conforms to the architectural guidelines of the community, etc.  This more...

Have you ever purchased something that made your life so easy that you wondered how you were ever efficient without it? That's how I feel (and my real estate investors feel) about our pocket video cameras.  Offered by many manufacturers, these cameras are often called by their brand names, Flip, Vado, Webbie as well as others. These inexpensive, easy to use tools have made us more efficient in more ways than we can list in a reasonable-length post.  Here are a few examples: As soon as we acquire a property, the contractor shoots a video to document what is there for insurance and draw more...

In a recent conversation with an asset manager, the topic of foreclosures came up and various stories about what you find when you first acquire that property. He told me about a recent default on a fraternity house.  Yes, you heard me correctly, the bank had to foreclose on a fraternity house.  He asked me, "Tina, what do we do with a 15 bedroom + 1 huge party room house that reeks of beer?"   Good question!  To add a bit more detail:  each bedroom had deadbolt locks, there were some creative "paintings" on the walls, the kitchen was pretty non-existent, and the more...

Have you ever gone on vacation and said, "I would really like to own a place here"?  Have you ever rented a large beach house with family members and/or friends?  Do you prefer to take a family trip within a one day drive of your home? If you answered "yes" to any of these questions, the concept of fractional ownership may appeal to you. As second home buyers are looking for more affordable ways to acquire their vacation home, fractional ownership has seen an increase in exposure.  Fractional ownership is, simply put, a group of friends, relatives or investors pooling their resources to more...

A fairly new real estate investor once explained to me why he gave up trying to buy a property on the courthouse steps.  He said it was a waste of his time because the group of investors who attended these auctions seemed to look out for each other and get all the good properties. Instead of trying to join them, he shunned them.  Who lost out there? Successful real estate investors seem to be a pretty close group.  They ride the hills and valleys together and often, tend to help each other out.  I've known quite a few investors who made good business more...

In my last post What is a Tax Lien Sale? I discussed what they were and how to earn money investing in tax liens.  Today we are going to review some of the issues real estate investors should be aware of if they are considering this type of investment. Tax liens are illiquid.  They must be held until they are repaid or the lien holder takes the action to foreclose.  While tax liens can be transferred to another party, they cannot be cashed in.   If the real estate investor does end up acquiring the deed to the property, they also acquire any problems more...

Tax lien sales are becoming more popular as unpaid real estate taxes continue to pile up and the general public becomes more familiar with tax lien investments. In the United States, 29 state (plus DC, Puerto Rico & USVI) tax collectors use tax lien sales to force owners to pay their unpaid property taxes.  But, here's the catch...you're not bidding on the property itself.  You are actually bidding on the unpaid property taxes.  If you are the winning bidder, you become the proud owner of an official property tax lien. Depending on the individual state law, it can take anywhere from a few more...

These sites may or may not list properties in the local multiple listing service.   Backpage.com Craigslist.com Kijiji.com Iwantanoffer.com www.hud.gov/homes/index.cfm  Militarybyowner.com Buyandsell.com eadsbyowner.com  Findmyroof.com Freeadlists.com Justrealestatelistings.com va.reotrans.com resales.usda.gov www.usmarshals.gov/assets/nsl.htm homesales.gov Bonus  site of course there is Trump University's Foreclosure Deal Source. Related Video by Tina -10 Free Sites for Real Estate Agents to Post Property Listings  Related Training: Learn How to Invest in Real Estate  Work with a real estate coach to find the right market Join Trump University's Network more...

When purchasing real estate, some lenders will require a survey of the property.  With most investment, short-term and hard money loans however, the survey is optional (as with cash purchases). The cost of a survey is typically fairly minimal, a couple hundred dollars.  When the property is waterfront, heavily wooded, rough terrain and/or especially large, the survey can run into a few thousand dollars.   By getting a survey, you not only see your property lines, you also see any encroachments, easements, infringements or right-of-ways on the property.  Encroachments and infringements can pose problems that you may want to have corrected prior to more...

Rental managers and owners are increasingly requiring that renters carry their own liability insurance. Approximately 2/3 of the people living in rental properties do not have renters insurance.  There is a general misconception among tenants that the landlord's policy will cover them in case of lost or damaged property.  The truth is, the landlord is not responsible for covering any of the tenant's personal property, unless the loss or damage is due to the negligence of the landlord. So, how does requiring renter's insurance help a landlord?  It is a way to minimize their own liability and insurance costs.  It also protects the more...

What is a HUD home? HUD stands for the Department of Housing and Urban Development. HUD is the insurer for the FHA loan program. When a FHA borrower defaults, the home becomes a "HUD" home, which you can buy. HUD homes are residential properties with 1-4 units. How do I get a list of HUD homes for sale in my area? Go to this site: http://www.hud.gov/homes/index.cfm and click on your state to find the homes available in your area. This is the MOST accurate place to find HUD homes. It is not necessary to pay or subscribe to a service for this information. Who can more...

Many in residential real estate investing found that in a buyer's market, the buyer's have a buffet to choose from and the sellers are always looking for new and innovative ways to stand out as the better choice in the line. Sometimes, offering creative ways of financing can open the property up to a new consumer or offer attractive financing terms the competition may not be offering.  Below are a few examples of these creative financing terms. Rent with the Option to Buy.  Commonly known as a Rent-Option, this type of financing usually has the buyer sign a lease to rent the property, more...

Yesterday, I had the wonderful opportunity to sit down and chat with Mike Veraldi, who has been in residential real estate investing full time since 2003. In his past life, Mike was an airline pilot for a large carrier.  With cutbacks and furloughs becoming an almost daily occurrence in the airline industry, Mike decided to take a 6 month leave of absence to start investing in real estate and has never looked back. What made you decide to try real estate investing? "A friend of mine recommended it to me.  I took some training classes and spent about $3900 learning the business.  Then, I more...

In the first part of this series, we talked about some of the basic issues in residential real estate investing. In this part of the series, we are going to look at finding and tracking residential real estate for investment. You have your source of funding lined up.  You have selected a real estate agent.  Now you have to find a property to purchase. 1.  The MLS (multiple listing service) is not the only source for finding properties.  In fact, since it is the most popular source, it can be a better idea to look outside the MLS to find properties others may more...

This is Part 1 of a 3 part series on getting a great deal with good returns on residential real estate investing in this economy.  Keep in mind that real estate is local and these tips may not apply perfectly to your current market. 1.  How are you going to pay for it?  Traditional financing can be difficult to obtain for residential investment properties right now unless you have a substantial down payment and stellar credit.  Home equity loans on primary residences can also be a challenge to get in this economy.  Consider sitting down with a reputable, local banker, discussing your needs more...

While we are constantly hearing in this real estate market, "It's a horrible market for sellers", the truth is, the market may only be unattractive for unreasonable real estate sellers. "Simply stage" your vacant real estate investments.  Add color to the bathrooms with shower curtains, towels and rugs.  Offer an inviting kitchen with some towels, a cookbook and a couple of wine glasses.  A bowl of fake fruit can make a boring countertop look more interesting.  A cafe table and chairs work great in adding depth to a room and a few attractive silk plants can add a much needed splash of more...