MMA Update

By Guest Author Steven Gillman

Real estate success? It happens by way of the many things you repeatedly do right, and it is your habits that ensure they get done. Here are some habits to develop for your real estate investing success.

Ask for people’s names, and tell them yours. People are your most valuable resource in real estate investing. The more you know, the more likely you are to find good properties, or buyers for your good properties. Get to know the right people too. Start with a real estate agent that gets many listings of the type you are interested in. Wouldn’t it be nice if he called you first?

Think numbers. Think people first, but know the relevant numbers. Ideally, when you look at a rental property, for example, you should be thinking about the income, the expenses, and the cap rate. You should be imagining how certain changes would allow you to raise the income, and what that would do to the value. Having a “feeling” about a property, and ignoring the numbers, gets investors into trouble.

Carry supplies. Always have at least business cards, pen and paper on you. You never know when you might see a property for sale, or hear about one. Mention that you invest in real estate, and sellers, buyers and other investors suddenly appear with information, opinions, and sometimes deals. Be ready.

Think risk reduction. Put those inspection, financing, and other contingency clauses in the offer, so you will get your deposit back when a deal falls through. Know your exit strategy before you buy. Find value by comparables, not “hunches.” Buy properties through your corporation or LLC. Always look for ways to reduce the risks.

Real Estate Success Is Found In Action

Set action-oriented goals. Get in the habit of taking regular steps towards real estate success. Require yourself to look at a certain number of properties, and maybe even to write a certain number of offers each month. Set at least minimum goals for all sorts of little steps, like making five phone calls per week, checking online for new listings twice per week, and so on. Action creates momentum, and repeated action creates habits. Good habits lead to success.

Finally, learning more about investing from books, magazines and even tapes or CDs is a great idea. Just be sure to spend as much time doing something as reading about it. Some of us let our fascination and enjoyment of reading about investing get in the way of actually investing, and of our real estate success.

Steve Gillman has invested in real estate for years. To learn more, get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

Keywords: real estate success, real estate, investing

About the Author
Steven Gillman, Tucson, AZ

Bob Roscoe, Mortgage Marketing Associates, Minneapolis, Minnesota

How a House Flip Went Wrong

By Guest Author Julie Lohmeier

The exterior of your home offers a first impression of your house and your style. Make the most of those initial seconds by maximizing your home’s curb appeal. This holds true whether you are selling your home or plan to live in it forever.

1) Clean up. The most important way to enhance your curb appeal is to clean up. Trim or remove overgrown bushes and shrubs. Eliminate all weeds. Cut the lawn. Spartan is better than messy. Repave or reseal your driveway. Fix anything that is broken. Power wash or paint stained concrete. (There are specially formulated paints for concrete.) And if a concrete stair or pad is sinking, have it raised or replace it. Make sure your roof is in good condition and that your brick mortar is well tuck pointed and your siding freshly painted. You wouldn’t want to meet people in dirty, torn clothes; don’t greet them with the housing equivalent.

2) Landscaping. Simple landscaping can go a long way. Arrange plants, trees, and shrubs in odd number groups using a variety of colors, heights, and textures. Be sure to leave room for growth. I’ve seen many a landscaping job look great for the first three years, only to be overgrown soon thereafter. If you know about perennials, plant those in a variety to provide blooms throughout the warmer months. If your knowledge of perennials starts and ends with hostas, planting annuals is as an excellent way to add color in spring and summer.

3) Shutters. I view windows as the eyes of your house. Shutters are a very easy way to make your home more welcoming. There are very few styles of homes that won’t benefit from shutters. They should be the height of your window from the sill to the top trim. When shutters were functional instead of decorative, they were to be half the width of the window so the pair would cover the entire window in bad weather. Now, just make sure the width is fairly proportionate to the window, and never less than 12″ wide. Your shutters can be any color but pick a scheme that complements your siding, brick, and trim. My personal favorite is deep hunter green, but black nearly always works. I prefer wooden shutters so you can paint them any color you wish, but if you get vinyl, be sure to replace them if the color begins to fade.

4) Door. If windows are your home’s eyes, then the door is the mouth. Make it inviting. Stained wood doors are most favored now in woods like cherry, mahogany, and even oak. Today you can get simulated wood doors made from fiberglass that look like wood from a distance, are very durable, and much less expensive. In many ways, I still prefer painted doors because of the endless possibilities of color for accent. You can paint the door the same color as your shutters, but I usually prefer a complementary color, often a shade of red - anywhere from burnt red brick to a deep red that’s almost plum. It all depends on your …

5) Color. A house with curb appeal has color. Several complementary colors. Most paint manufacturers offer groups of colors that work well together. This can give you some good ideas. I personally like to see siding, trim, shutters and doors in different colors. Typically I prefer the trim to be the lightest color with the shutters and doors providing the greatest accent. However, some houses are stunning when the trim is the most vibrant color. And with a “painted lady” Victorian style home, you can use several different colors all to accent various architectural features of the house.

6) Distinctive mailbox and numbers. Make a statement with your mailbox, especially if it’s on your house instead of the curb. These can get a bit pricey, but will really add appeal to your front elevation. Some single nail up address numbers will do the trick, but there are many more options these days. There are ceramic tile. Brass plates. Custom painted ceramic signs with flowers. Engraved stone if your house is stone or brick. When we were selling remodeled homes, our realtor always got us a custom painted ceramic address sign. It incorporated the colors of the house and added a truly charming element when people walked up to the front door. Have your mailbox and address welcome your visitors, not simply tell them this is the right house.

As you can see, there are six easy ways to enhance the curb appeal of your home. The key is to remember that the front of your house is typically the first thing visitors see. Make a good impression with a well maintained, landscaped home offering those little details and coordinating colors that add richness and luxury to your front elevation.

About the Author:

Julie Lohmeier is the veteran of numerous home remodeling and building projects. From working hands on and doing much of the work herself to hiring contractors and construction managers, she has seen the entire spectrum of home improvement. She shares her remodeling tips, home decorating ideas, and other various rants at http://www.myhomeredux.com. Sign up for her free email newsletter at: http://myhomeredux.typepad.com/blog/2005/09/get_my_home_red_2.html

Copyright © 2006, Julie Lohmeier, http://www.myhomeredux.com

Bob Roscoe, Mortgage Marketing Associates, Minneapolis, Minnesota
Home Sales Ideas

By Bob Roscoe

Kenneth Harney, a highly respected columnist for the Washington Post, expresses surprise in his column recently because home buyers in high-cost parts of the country like California, Hawaii, Boston and Washington, D.C. are not leading the nation in mortgage delinquencies.

Mr. Harney states in near amazement that the opposite is actually true–that home owners in the high-cost areas of the nation have the lowest mortgage delinquency rate. The Mortgage Bankers Association of America, which recently released its latest survey on delinquency rates, states that Hawaii has the lowest mortgage delinquency rate in the nation at only 0.89%, followed by California at 1.02% and Virginia at 1.32%.

These numbers are contrasted by the states with the highest delinquency rate: Mississippi at 8.5%, Louisiana - 6.7% (pre-hurricane Katrina numbers), Indiana - 6.66%, Tennessee - 6.32%, Texas - 6.31% and Ohio - 6.13%. Notice that most of the high delinquency rates occur in states with a lower than average per capita income. Mississippi and Louisiana have some of the lowest per capita incomes in the nation. Hawaii and California, on the other hand, have some of the highest.

You could read more about the numbers in his column at the Washington Post, but that newspaper requires you to sign-in and become a member just to read its articles. An easier way is to go to The Wichita Eagle (as in Wichita, Kansas) where Harney’s column is reprinted without the signing-in hassle.

While Harney doesn’t explicitly state that he expects the high cost areas to lead the country in mortgage delinquencies, the tone of his column highly suggests that. Harney’s recent columns have made no secret of his belief that home owners in the U.S. are overextending themselves because they are taking out more interest-only mortgages and other non-traditional type of mortgages to finance their home purchases and refinances. His implied expectation is that folks with these types of loans will be the new wave of foreclosures to hit the nation.

Actually, the opposite is true. Anybody with any long term experience in the mortgage or real estate industries will be able to tell you that higher cost does not equal more frequent mortgage delinquencies. Both mortgage delinquencies and foreclosures are usually the result of loss of income. Alcoholism, drug addiction and gambling addiction certainly are factors, but the number one reason people cannot pay their bills is because they are earning less money than they used to.

Every economic downturn produces a new wave of foreclosures, and the next downturn should be no different. This next time around, however, the pundits that predicted the crash of the so-called “real estate bubble” will be telling anyone who will listen that they told us so. They will equate the up tick in foreclosures with the popping of the “real estate bubble.”

They will be wrong.

Foreclosures and mortgage delinquencies follow the economic cycle as sure as sunrise follows sunset. Folks who are laid off their job or are the victims of downsizing are usually the ones who experience difficulty paying the mortgage. I have helped many clients avoid foreclosure, and the constant recurring theme I see with the vast majority of those people is loss of income.

It’s time that the media stopped trying to create the news rather than simply to report it. All of the media hype about an impending bursting of a “real estate bubble” is mere conjecture. Most of those who believe that the bubble will burst believe it because the media has harped on it so much. If you hear almost anything long enough and often enough, you begin to believe it. It’s the underlying principle of today’s advertising. For most of the U.S., the “real estate bubble” will not burst.

It will merely hiss a bit.

Copyright 2005 Bob Roscoe

About the Author

20 years of industry experience has given Bob an eye for detail lending him an expertise which ensures that mortgage transactions will flow smoothly. “Stress free” is Bob’s hallmark. Learn more at Mortgage Marketing Associates.

Article by Guest Author Donna Lewczuk

We’ve all heard the old stories. A successful, self-employed Canadian who can work wonders in his or her professional life can’t manage to secure a decent mortgage for a home. It strikes us as both ridiculous and unfair – given that nearly one Canadian worker in six is now self-employed. After all, these are some of the most independent and ambitious people in the country.

Thank goodness that times have changed for the self-employed! Policy changes at the Canadian Mortgage and Housing Corporation (CMHC) have begun to acknowledge the contribution and financial status of self-employed Canadians.

These days, self-employed homebuyers have the same access to mortgages as their salaried counterparts. It doesn’t matter what the nature of your income structure: whether you work on contract, whether your work is seasonal, or whether you’re a small business owner or an independent professional.

Now, newly self-employed Canadians can also get credit for their past work experience. Until early this year, you needed to demonstrate at least two years of employment in your own business, but that rule has been changed. Now, if you have two years experience in your field of expertise – whether you were salaried or self-employed – you can meet the new CMHC standard.

The new guideline is great news for self-employed Canadians who have extensive experience in their chosen field, but who are newly in business for themselves in that field. For example, maybe you’ve been building cabinets for years in a salaried workplace, and have decided to step out on your own. Now you can get credit for your experience.

The CMHC guidelines specify that you should be “performing essentially the same function with the same skill requirements” for your past experience to qualify. For the tens of thousands of Canadians pursuing their dream of self-employment in their field of expertise, the new guideline is great financial news.

The CMHC guidelines apply to any mortgage insured by CMHC… from any institution. It’s worth noting, of course, that some lending institutions are friendlier to the self-employed than others. Many lenders are still most comfortable with the traditional parameters for verifying employment and income. A steady stream of pay stubs is the simplest method of assessing your ability to service the mortgage debt.

If you’ve been self-employed for a few years, your lender may want to see detailed financial statements for the most recent years. That can be a problem. An astute business owner with a good accountant will be working hard to minimize taxable income for the business: a smart financial strategy. But according to traditional lending formulas – that business strategy could flag you as a high-risk borrower.

The most flexible and innovative lenders have discarded the old formulas for their self-employed clients. Some of the best mortgages for self-employed Canadians don’t even require proof of income. You could qualify for your mortgage simply on your own good credit and employment history.

If you’re self-employed, or considering taking the plunge into business for yourself, the latest mortgage news is encouraging. Check out your options… and get the credit you deserve.

About the Author

Donna Lewczuk, Burlington, On, Canada

More Details about mortgages for business owners here. Donna has been helping people take the struggle out of dealing with their finances for 20 years. She has been able to increase many of her clients’ cash flow by hundreds and even thousands of dollars a month. If you are struggling with debt please visit Donna’s website for more information. www.donnasmortgages.com

Bob Roscoe, Mortgage Marketing Associates, Minneapolis, Minnesota
Loan Application Checklist

By Guest Author Gregg Hall

Foreclosure begins when a property owner defaults on the mortgage of a property, mainly due to financial difficulties or the inability to keep up with the mortgage payments for some reason or another. In the event that a property succumbs to a foreclosure, it’s most likely that the property has not been maintained as it should have been.

This means that perhaps the roof is in dire need of repair, a damaged foundation or the landscaping has been severely neglected, or a number of other maintenance or repair issues that may be costly. Some foreclosure homes may only need a fair amount of TLC. The amount of repairs needed or required for the foreclosure property may greatly reflect on the asking price. A major fixer upper may be offered at a lower than normal price, whereas a property that is in fair condition may go for a price just the below the market value.

When a mortgage lending institution decides to foreclose on a property, they will file a notice of default that will become a public record for all buyers who are interested in locating foreclosed properties for purchase. There are many places buyers can look to find foreclosed properties such as: various web sites on the Internet, real estate agents or brokers and real estate magazines.

Once the buyer locates a foreclosed property they are interested in, the buyer can assess the public records and check for any liens on the property. Most liens that are placed on foreclosed properties are for unpaid taxes. Interested buyers should also check the values of the neighboring properties before entering into a contract, to make sure they would be getting a fair market value.

Novice buyers may be interested in checking out bank owned foreclosure properties. These bank owned foreclosure properties may prove to be at lower risks to the novice buyer. With bank owned foreclosure properties, there are usually no tenants to evict, no liens against the property and no past due taxes.

Some lending institutions may be eager to sell their foreclosed properties and may offer to finance the foreclosed property to the buyer at a low market rate or with a small down payment. If the lending institution has already done an appraisal, the interested buyer may not have to pay an additional appraisal fee. Most lending institutions that are eager to sell a foreclosed property may also include title insurance that generally removes most of the risks that come with buying properties early on in the foreclosure process.

The more experienced buyer may decide to find a pre-foreclosure property owner about to go into default and offer to buy the property for a portion of the difference between the property equity and the market value. This may be an acceptable offer to a property owner who doesn’t want to end up losing all of the equity that has been invested in the property. Some pre-foreclosure property owners may offer bargains to a persistent buyer. This is mostly because at this stage, credit collection agencies are constantly hounding the property owners, who would in turn want to resolve these issues to avoid any further harassment.

Buyers may sometimes find that contacting the owner of a pre-foreclosed property can be difficult. Usually by this time, the property owner may not have any electricity or a telephone. Sometimes these pre-foreclosed property owners may also be difficult to deal with directly, due to a drug or alcohol addiction that put them in their situation in the first place. Some owners may also be hostile to the buyer or unpleasant to deal with because they are bitter and frightened about losing their home and perhaps they have no other place to go. Some of these owners may even see the buyers of their foreclosed properties as their mortal enemy and may do some extra damage to the foreclosed property before evacuating the premises.

Many foreclosed properties are normally sold at prices close to the assessed value. Depending on what city or neighborhood the buyer is interested in, what the neighboring property values are, how long it has been on the market and what amount of work needs to be done to the foreclosed property will greatly reflect on the asking price.

About the Author

Gregg Hall is a business consultant and author for many online and offline businesses and lives in Navarre Florida with his 16 year old son. See house foreclosures at http://www.houseandpropertyforeclosures.com

Bob Roscoe, Mortgage Marketing Associates, Minneapolis, Minnesota
Name That Value