Ideas and Opinions from Donald Trump and TrumpU Faculty.

The Due on Sale Clause, or Acceleration Clause, is a clause in a mortgage which states that if there is any transfer of ownership or interest in a property, the mortgage can be called and immediately due to the lender.  With the exception of VA and FHA mortgages (which are generally assumable by a qualifying party), almost all mortgages have a due on sale clause. Keep in mind that generally, this clause is a contractual option by the lender.  This means that the lender may or may not decide to call the loan due once notified of a transfer in title or more...

Negative amortization occurs when the payment made by the borrower does not cover the amount of the interest incurred.  The difference is added to the loan amount. Traditionally, negative amortization loans have been used by lenders to allow for a lower monthly mortgage payment in the beginning of the loan period.   So, why would someone want this type of loan?  Well, it may be an option for a couple where one person is presently employed and the other is in school, graduating in a year or so and will be employed, bringing the household income substantially higher. In the 1980's when interest rates more...

As the economy has wreaked havoc on the second home market, some buyers are seeing an opportunity to own something they might not otherwise be able to afford. Others are finding themselves "stuck" with 2 properties and not being able to sell one. The IRS allows for up to 2 residences for a taxpayer to deduct mortgage interest. Also of note is what qualifies as a second home: House Townhouse Condominium Boat RV Mobile home Trailer The requirement states that the second home must have a sleeping space, toilet and a place to cook. In addition, the second home must be at least 50 miles from the primary residence.  (Note more...

A couple of years ago, I was asked by a lender to help them sell a new construction home.  The home was quite large (3,600 sq ft) and sat on 3 acres of land.  In performing my due diligence, I checked the title and permits at the courthouse.  I was incredibly surprised to read "modular home" on the initial building permit for the home.  By all accounts, the home looked like any other recently constructed home in the area. Not to be confused with mobile or manufactured homes, a modular home is built in a controlled environment and then shipped in pieces more...

I had mentioned a couple of weeks ago that the prosecutor in the trial of Amanda Knox should be thrown into jail, not Amanda Knox. Just recently, the prosecutor, Giuliano Mignini, was convicted of abuse of office in an earlier murder case. He was sentenced to serve one year and four months in prison for his role in the investigation of the case known as the “Monster of Florence” murders. These murders took place between 1968 and 1985 in the Tuscan countryside. Mignini is appealing the verdict and is being allowed to continue working during the appeals process. He reportedly said, “I more...

A LIBOR rate is based off the London Inter-Bank Offered Rate, which is the rate offered for the US dollar by a group of London-based banks. There are varying LIBOR rates, based on deposit maturities and are usually quoted in 1 month, 3 month, 6 month and 12 month deposits. A LIBOR mortgage is an adjustable rate mortgage loan based on the LIBOR interest rate. Usually only offered to well qualified borrowers, these loans are generally low risk and because of this, investors are willing to accept a smaller margin than they would on a traditional loan. LIBOR rates can be very volatile more...

"Subject to" (as it relates to real estate) refers to a method of purchasing a property while leaving the seller's existing mortgage(s) in place. The seller deeds the property to the buyer, who agrees to make the existing mortgage payments on the property.  In most cases, the seller is not released from liability on the mortgage.  In some cases, the agreement may also include the provision that the buyer either sell or refinance the property within a certain period of time. What is the main benefit?  The seller's costs to sell are usually very small with this type of transaction.  It's also easy more...

US News and World Report published a story recently forecasting the Top 10 Housing Markets for the Next 10 Years.  These markets were selected from economic analysis conducted by Moody's Economy.com. (in no particular order) 1.  Bremerton/Silverdale, Washington 2.  Santa Fe, New Mexico 3.  Glens Falls, New York 4.  Fort Collins/Loveland, Colorado 5.  Corvallis, Oregon 6.  Anchorage, Alaska 7.  Decatur, Illinois 8.  Duluth, Minnesota 9.  Pittsfield, Massachusetts 10.  Sandusky, Ohio As an economics major myself, I found this list to be very interesting.  What do all of these markets have in common and what can we learn from this list to forecast potentially untapped markets?  A few insights:  the average age of the more...

Video marketing is the new king on the block among popular marketing channels - not without good reason. You may be familiar with commercials from the television era, which have progressed to commercials and ads on the Internet during the current era of web 2.0. By now, people have developed a resistance that blinds them automatically to repeat commercials when they recognize that “hey, this is not information I am searching for but an advertisement trying to sell me something I may not need!” Marketing videos, on the other hand, are power packed with product information, visual description, and sometimes instruction more...

I have just been informed that Amanda Knox's family has hired a new law firm to help her turn around the injustice that was done in Italy by recently convicting her of murder.  I followed the trial closely and Amanda Knox is not guilty.  I hope the new law firm, led by a very talented guy named Theodore Simon, from Philadelphia, can turn around this injustice and turn it around quickly.  At the same time, I hope somebody in Italy goes after the "wild man" prosecutor who, as I understand, is already being looked at for abuse of power in an more...

1.  Turn off exterior water spigots.  There is usually a main shut off inside the home. 2.  Drain any and all exterior pipes and hoses (such as those to an air conditioner) 3.  Remove and store any window a/c units 4.  Get your HVAC system serviced and tuned-up 5.  If you have old windows, get a window insulation kit from a local home store 6.  Insulate you pipes - if they are warm to the touch, they are ready for pipe insulation 7.  Store all outdoor furniture, grills, hoses in a shed or garage 8.  Make sure the chimney is swept and fireplace debris removed 9.  Seal foundation cracks, more...

Since we have a New Year to challenge us, it’s a good thing to keep our resolution to be bigger than our problems. Problems come with the territory called life, and we are fortunate in more ways than we realize. We need to move forward with optimism. Change can be unsettling for everyone but it’s a necessary component for growth. Growth is an indication of life, for one thing. Life isn’t static, just as business shouldn’t be static either. Sometimes we have blips, sometimes we have catastrophes. I’m a strong believer in keeping things in perspective--it’s also a way to keep your more...

1.  First task for 2010, put your 2009 tax records together and send them off to your accountant.  Let's put 2009 behind us right from the get go. 2.  What is the one thing you need to make real estate investing easier for you in 2010?  A virtual assistant?  A task management program?  A new computer?  Whatever it is, write it down and start researching how to obtain it. 3.  Fill in the blank:  In 2010, I want to learn how to:  ______________________.  Now, whether  you wrote down sky dive, cook an exquisite French meal or lose weight successfully, schedule time on your more...

When a person dies, whether with or without a will, an Executor is usually assigned to oversee the assignment and/or disposal of the decedent's assets.  Depending on the State, the Executor has varying levels of power with regards to liquidating the assets. When an heir receives property, they also become responsible for the upkeep, mortgage payments, taxes, insurance, etc.  Sometimes there is just one heir and other times, multiple heirs who become the new owners. At this point, you should be able to see where the problems start to arise.  Heirs having to pay money for real estate they might not even want, more...

Ever since writing my first business plan I've had misgivings about the traditional business plan writing process. It took awhile to realize why, but eventually it dawned on me. As an entrepreneur I wanted to write action plans, not presentation pieces. Whether in business school or in business books, the goal of most how to write a business plan training is to raise funds from investors or bankers. For example, today's tech startup culture is completely geared toward attracting capital from outfits like Madrona Venture Group or Kleiner Perkins Caufield & Byers. This is fine if you desire to create the next more...