IRAs that invest in the stock market can lose value when the market falls. However, real estate almost always increases in value. While some workers have to put off retirement when their IRAs lose value, others are investing their IRAs in real estate and retiring on or even ahead of schedule.
Change the custodian of your IRA. Most banks and brokerages aren't set up to buy and manage real estate for IRAs.
Know the rules for buying real estate. These are very important, because if you use your IRA funds to buy the wrong property or commit some other violation of the rules regarding real estate and IRAs, the financial consequences could be devastating.
Remember that you can't deduct depreciation on your real estate. It's possible that the benefit to your IRA is worth the loss of this deduction on your tax return.
Avoid mortgaging your real estate. If you do, you won't be able to shelter the income generated by your real estate. Even if you only use a mortgage to pay for part of the purchase, you won't be able to shelter a corresponding part of the income from the real estate.
Make any repairs or improvements to your property with funds from your IRA only. This means that you'll probably have to have some cash value in your IRA that you can withdraw for these expenses.
Consider investing in a real estate investment trust (REIT), which lets you invest in real estate without the pitfalls of buying and managing the property yourself. Be aware, however, that the overhead costs of buying real estate this way can be considerable; they may even wipe out any income you receive from the investment.
Friday, November 14, 2008
Increase the value of your property
There are many ways to increase the value of your real estate. Attractive touches always look nice and give your real estate curb appeal. Curb appeal is the "hook" needed to arouse a prospective buyer's interest in your home. Increasing the value of your home doesn't have to cost a fortune, although it is ultimately up to the homeowner how much is spent on improvements to increase the value of a house.
Paint the exterior of your home with a fresh coat of paint. New paint work increases the value of real estate and cheers up an otherwise drab looking home. Coordinate the colors for a stunning look that transforms the home, giving it a much needed face-lift. Replace your old front door and its hardware. Be sure to put up a new door knocker and replace the door bell. This will make the home look inviting and welcoming.
Pay a professional company to resurface your driveway to eliminate pits and potholes. Depending upon the length of your driveway, a professional crew will usually be able to resurface it in one day. This not only looks better, it adds value to your real estate.
Landscape the front yard in a tasteful manner. Add fruit trees, shade trees, attractive shrubs and edging plants. Use edging pavers, stepping stones, statuary items and driveway pavers to enhance appeal and add value to your real estate. Many people are becoming eco-conscious and want edible landscaping trees and shrubbery as part of living "green."
Update old-fashioned kitchens and bathrooms. Rip out old kitchen cabinets and counter-tops. Replace them with new cabinetry and granite counter-tops for up-to-date modernization and added value to your real estate. Tile the old linoleum floor, or replace with laminate flooring utilizing under-floor heating for warmth and comfort.
Paint the exterior of your home with a fresh coat of paint. New paint work increases the value of real estate and cheers up an otherwise drab looking home. Coordinate the colors for a stunning look that transforms the home, giving it a much needed face-lift. Replace your old front door and its hardware. Be sure to put up a new door knocker and replace the door bell. This will make the home look inviting and welcoming.
Pay a professional company to resurface your driveway to eliminate pits and potholes. Depending upon the length of your driveway, a professional crew will usually be able to resurface it in one day. This not only looks better, it adds value to your real estate.
Landscape the front yard in a tasteful manner. Add fruit trees, shade trees, attractive shrubs and edging plants. Use edging pavers, stepping stones, statuary items and driveway pavers to enhance appeal and add value to your real estate. Many people are becoming eco-conscious and want edible landscaping trees and shrubbery as part of living "green."
Update old-fashioned kitchens and bathrooms. Rip out old kitchen cabinets and counter-tops. Replace them with new cabinetry and granite counter-tops for up-to-date modernization and added value to your real estate. Tile the old linoleum floor, or replace with laminate flooring utilizing under-floor heating for warmth and comfort.
How to Become a Real Estate Investor
Understand the fundamentals of estate investing. Real estate investing covers a wide range of areas. Before you decide to specialize in one area of real estate investing you need to understand the basics of real estate. Read as many books on real estate investing as you can. Ask an experienced investor for book recommendations. Take a course on real estate at a local community college to understand the basic concepts of investing in real estate. You may also want to join a local real estate investing club to learn and network from more experienced investors.
Get your personal finances in order. One of the benefits of investing in real estate is leverage. By using leverage and other people's money you can invest in a large property and even cash flow. However in order to be able to borrow money at the best rates your personal finances must be in order. Pay down as much debt as possible before applying for loans. Also pay your bills on time in order to have as high of a credit score as you can. Often getting the best interest rates is the difference between a profitable deal or one that is losing you money each month.
Decide on the type of real estate investing you want to specialize in. There are many ways to invest in real estate. You should find one that matches your goals and skills. You many want to buy and rehab homes quickly for a profit if you have the physical skills and desire to do so. Or you may want steady income and tax benefits without actively managing your properties. Investing in apartment buildings may be the real estate investment for you.
Study the market you are interested in investing in before you invest. Spend time looking at the local area and many properties before making an offer. You want to have a good knowledge of the area and properties to be able to know what a fair price is for any property.
Seek partners. If you are short on cash or experience taking on a partner may be an option. A partner can help contribute cash, skills or experience to the deal. Just make sure you have a good partnership agreement in place and that the partner is someone you can work with.
If you are starting out in real estate investing and don't have a lot of money consider bird dogging. Bird dogging means you find the deals and assign the deals to another investor for an assignment fee. Real estate investors are always looking for profitable deals and you can start bird dogging to raise money for your own deals later.
Beware of real estate get rich courses and gurus. You can find a lot of free or inexpensive information on real estate investing by getting books at the library or taking a course at a local community college. Many get rich courses are all hype and may be outdated or not effective in your area. There are no magic get rich technique to succeeding in real estate, just hard work.
Get your personal finances in order. One of the benefits of investing in real estate is leverage. By using leverage and other people's money you can invest in a large property and even cash flow. However in order to be able to borrow money at the best rates your personal finances must be in order. Pay down as much debt as possible before applying for loans. Also pay your bills on time in order to have as high of a credit score as you can. Often getting the best interest rates is the difference between a profitable deal or one that is losing you money each month.
Decide on the type of real estate investing you want to specialize in. There are many ways to invest in real estate. You should find one that matches your goals and skills. You many want to buy and rehab homes quickly for a profit if you have the physical skills and desire to do so. Or you may want steady income and tax benefits without actively managing your properties. Investing in apartment buildings may be the real estate investment for you.
Study the market you are interested in investing in before you invest. Spend time looking at the local area and many properties before making an offer. You want to have a good knowledge of the area and properties to be able to know what a fair price is for any property.
Seek partners. If you are short on cash or experience taking on a partner may be an option. A partner can help contribute cash, skills or experience to the deal. Just make sure you have a good partnership agreement in place and that the partner is someone you can work with.
If you are starting out in real estate investing and don't have a lot of money consider bird dogging. Bird dogging means you find the deals and assign the deals to another investor for an assignment fee. Real estate investors are always looking for profitable deals and you can start bird dogging to raise money for your own deals later.
Beware of real estate get rich courses and gurus. You can find a lot of free or inexpensive information on real estate investing by getting books at the library or taking a course at a local community college. Many get rich courses are all hype and may be outdated or not effective in your area. There are no magic get rich technique to succeeding in real estate, just hard work.
How to Find State Assistance to Prevent Foreclosure
State governments offer several ways to help you get your mortgage payments back on track after you've fallen behind. One of the first things you can do to prevent foreclosure is find state assistance when you are faced with losing your home.
Contact the Department of Housing and Urban Development. One of the main responsibilities of HUD is to help homeowners who are faced with losing their homes. Go to the HUD website (see Additional Resources below) for information about how to contact local HUD offices.
Seek the assistance of the Urban League. This non-profit organization offers counseling and assistance to help homeowners at risk of foreclosure. Go to the Urban League website (see Additional Resources below) to find your local chapter.
Call your state's Attorney General's Office. Many states now offer programs to help borrowers negotiate with their lenders to help the homeowner get current on mortgage payments. Visit the National Association of Attorneys General website (see Additional Resources below) to find out how to contact the attorney general in your state.
Apply for state aid through a Family Independence Agency office. Apply for aid such as food stamps and energy cost assistance programs to allow you to apply more of your money toward mortgage payments.
Have your proof of income and an affordable monthly budget on hand when you are attempting to find state assistance to prevent foreclosure. The representatives will request this information when you apply for assistance.
Your lender has options that may help prevent foreclosure. Always speak to your lender first.
Contact the Department of Housing and Urban Development. One of the main responsibilities of HUD is to help homeowners who are faced with losing their homes. Go to the HUD website (see Additional Resources below) for information about how to contact local HUD offices.
Seek the assistance of the Urban League. This non-profit organization offers counseling and assistance to help homeowners at risk of foreclosure. Go to the Urban League website (see Additional Resources below) to find your local chapter.
Call your state's Attorney General's Office. Many states now offer programs to help borrowers negotiate with their lenders to help the homeowner get current on mortgage payments. Visit the National Association of Attorneys General website (see Additional Resources below) to find out how to contact the attorney general in your state.
Apply for state aid through a Family Independence Agency office. Apply for aid such as food stamps and energy cost assistance programs to allow you to apply more of your money toward mortgage payments.
Have your proof of income and an affordable monthly budget on hand when you are attempting to find state assistance to prevent foreclosure. The representatives will request this information when you apply for assistance.
Your lender has options that may help prevent foreclosure. Always speak to your lender first.
How to Bid at a Foreclosure Sale
A foreclosure sale is a proceeding in which a bank (or other secured creditor) sells real property at auction due to the property owner's failure meet his or her obligations under the mortgage. Bidding at a foreclosure sale can be a good way to find and purchase affordable property but it does bear some risks. Here are some tips to assist you in bidding at a foreclosure sale.
Understand the procedures. Read your state's statutes regarding the foreclosure sales. Familiarize yourself with the process by attending foreclosure sales and observing the bidding procedure.
Read the notices. Notices of default and sale are generally posted at the local courthouse and in local newspapers or journals. These notices contain the name of the borrower, the property description and the date and time of sale. They will also provide the name of the person or firm you can contact for more information regarding the foreclosure sale, including the starting bid amount.
Do your research. Before even considering bidding at the sale, you need to research the title to the property. You will want to determine whether there are any other mortgages on the property, any lawsuits against the homeowner, any mechanics liens on record, or anything else affecting the status of title to the property. You should also physically inspect the property to determine its condition.
Attend the sale at the date and time set forth in the notice of default and sale. Listen carefully to the bidding instructions to see if there are any conditions or terms to the sale. Make sure that you are prepared to go forward with bidding on the property in light of any such conditions.
Bid. You will usually need certified funds, such as cash or a cashier's check, to bid on the property. You should call ahead of time to confirm the starting bid. Be aware that there may be other bidders at the sale that can increase the bidding amount. Know in advance which amount you are willing to bid up to and don't exceed it.
You should consult an attorney experienced in property and real estate matters if you have any questions at all regarding how and whether to bid at a foreclosure sale.
Be aware that you can spend a lot of time and money preparing to bid at a foreclosure sale only to learn at the last minute that the sale is postponed or terminated, or, even if it goes forward, you may not be the successful bidder. Be sure to weigh these risks before starting the process of bidding at a foreclosure sale.
Even if you are the successful bidder, the borrowers may still be living on the property. If this is the case, you will likely need to initiate legal action to have them evicted. Be sure to consider this potential problem in determining whether you want to bid at a foreclosure sale.
Understand the procedures. Read your state's statutes regarding the foreclosure sales. Familiarize yourself with the process by attending foreclosure sales and observing the bidding procedure.
Read the notices. Notices of default and sale are generally posted at the local courthouse and in local newspapers or journals. These notices contain the name of the borrower, the property description and the date and time of sale. They will also provide the name of the person or firm you can contact for more information regarding the foreclosure sale, including the starting bid amount.
Do your research. Before even considering bidding at the sale, you need to research the title to the property. You will want to determine whether there are any other mortgages on the property, any lawsuits against the homeowner, any mechanics liens on record, or anything else affecting the status of title to the property. You should also physically inspect the property to determine its condition.
Attend the sale at the date and time set forth in the notice of default and sale. Listen carefully to the bidding instructions to see if there are any conditions or terms to the sale. Make sure that you are prepared to go forward with bidding on the property in light of any such conditions.
Bid. You will usually need certified funds, such as cash or a cashier's check, to bid on the property. You should call ahead of time to confirm the starting bid. Be aware that there may be other bidders at the sale that can increase the bidding amount. Know in advance which amount you are willing to bid up to and don't exceed it.
You should consult an attorney experienced in property and real estate matters if you have any questions at all regarding how and whether to bid at a foreclosure sale.
Be aware that you can spend a lot of time and money preparing to bid at a foreclosure sale only to learn at the last minute that the sale is postponed or terminated, or, even if it goes forward, you may not be the successful bidder. Be sure to weigh these risks before starting the process of bidding at a foreclosure sale.
Even if you are the successful bidder, the borrowers may still be living on the property. If this is the case, you will likely need to initiate legal action to have them evicted. Be sure to consider this potential problem in determining whether you want to bid at a foreclosure sale.
How to Beat a Foreclosure on a Home
Even with a strong national economy, low unemployment and low interest rates, Americans are always subject to dealing with mortgage lenders arriving to foreclose on their homes. Housing experts say that the ease with which homebuyers, even those with bad credit, have been able to get mortgages over the years is the most common culprit of foreclosure. As a result, many buyers have overextended themselves, taking loans with unfavorable terms even when the housing market dictates extremely high price tags. Homeowners can and do beat foreclosures on their properties–-but only when they act the moment they begin to experience financial difficulties.
A forebearance or a deed in lieu of foreclosure is the best choices.
If you’re going to have trouble meeting your mortgage payment, call your mortgage lender immediately. Swift action may prevent the loss of your home.
Mortgage lenders will always want to work with you and help you find a way to keep your home. That’s because they’re in the money lending business not the real estate business.
If your mortgage lender has not had a payment from you for a month or two, and if they haven’t heard from you, they will assume you do not intend to pay them. In that case they will feel justified in trying to take back your house.
If you are in serious financial difficulty, you should seek professional assistance and/or legal counsel to best protect your investment and your home.
Before you call your lender, be ready to discuss your financial problems. They will need all the information you can give them in order to help you.
Make notes about your income and outgoings so you will be better able to answer questions. It will impress the lender if you seem to be making a sincere attempt to tell the truth about your situation and get your finances under control.
There are a number of ways in which your lender may be able to help. If you get in touch with a lender before you miss a payment, the lender might offer forbearance. This means they would put the soon-to-be-missed payment at the back of the loan, allowing you to skip a month and not getting a mortgage late on your credit. This is why you need to contact your lender if you've lost a job or had some other short-term setback. In fact, your lender may allow you to skip several payments and give you time to get back on your feet.
Ask your lender about restructuring your loan. Since the lender knows that mortgage payments are the last payments a person will let slide they already realize you are probably having a few other financial problems.
If you have some equity in your home, a lender may allow you to restructure your loan to lower the monthly payments. If you’ve missed some payments they may even agree to add the past amount due into the new loan.
Ask your lender about helping you get a one-time payment from the government’s FHA-Insurance Fund to bring your mortgage current. You may qualify if your loan is at least 4 months delinquent, but no more than 12, and you are able to begin making full mortgage payments.
If your problem is so serious that it can’t be resolved in a reasonable amount of time, it may be better for you to sell your home and find one with more manageable payments. In that case, sell the home, pay off both the mortgage balance and your delinquent debt, and avoid foreclosure.
If you can’t sell your home it may be possible to sign it over to a lender. This is considered a voluntary foreclosure and could damage your credit record. You will lose your home, but you will not be held liable if the home sells below the debt amount.
The last resort, when all other options fail, is to declare bankruptcy, since foreclosure proceedings are usually stopped until a bankruptcy is resolved. This may save your home although it will damage your credit record for at least 7 years and you will lose control of your finances.
Foreclosure is not better for you credit...there's no way. A bankruptcy stays on your credit report for 7 years... a foreclosure stays on the credit report forever. I'm in real estate and people think it's better for foreclose and really it's not. Most of the time they still owe money because the house didn't sell for the value of their mortgage. A forebearance or a deed in lieu of foreclosure is the best choices.
The banks have to make the whole amount of the loan including the late payments due at once. This is called the accelleration clause. This allows them to start the foreclosure process. They could not foreclose if the person in the default was never given the opportunity to try to make a payment. The purpose of the accelleration clause is for the bank to move forward, not to punish the person... by then it is already too late for them.
A forebearance or a deed in lieu of foreclosure is the best choices.
If you’re going to have trouble meeting your mortgage payment, call your mortgage lender immediately. Swift action may prevent the loss of your home.
Mortgage lenders will always want to work with you and help you find a way to keep your home. That’s because they’re in the money lending business not the real estate business.
If your mortgage lender has not had a payment from you for a month or two, and if they haven’t heard from you, they will assume you do not intend to pay them. In that case they will feel justified in trying to take back your house.
If you are in serious financial difficulty, you should seek professional assistance and/or legal counsel to best protect your investment and your home.
Before you call your lender, be ready to discuss your financial problems. They will need all the information you can give them in order to help you.
Make notes about your income and outgoings so you will be better able to answer questions. It will impress the lender if you seem to be making a sincere attempt to tell the truth about your situation and get your finances under control.
There are a number of ways in which your lender may be able to help. If you get in touch with a lender before you miss a payment, the lender might offer forbearance. This means they would put the soon-to-be-missed payment at the back of the loan, allowing you to skip a month and not getting a mortgage late on your credit. This is why you need to contact your lender if you've lost a job or had some other short-term setback. In fact, your lender may allow you to skip several payments and give you time to get back on your feet.
Ask your lender about restructuring your loan. Since the lender knows that mortgage payments are the last payments a person will let slide they already realize you are probably having a few other financial problems.
If you have some equity in your home, a lender may allow you to restructure your loan to lower the monthly payments. If you’ve missed some payments they may even agree to add the past amount due into the new loan.
Ask your lender about helping you get a one-time payment from the government’s FHA-Insurance Fund to bring your mortgage current. You may qualify if your loan is at least 4 months delinquent, but no more than 12, and you are able to begin making full mortgage payments.
If your problem is so serious that it can’t be resolved in a reasonable amount of time, it may be better for you to sell your home and find one with more manageable payments. In that case, sell the home, pay off both the mortgage balance and your delinquent debt, and avoid foreclosure.
If you can’t sell your home it may be possible to sign it over to a lender. This is considered a voluntary foreclosure and could damage your credit record. You will lose your home, but you will not be held liable if the home sells below the debt amount.
The last resort, when all other options fail, is to declare bankruptcy, since foreclosure proceedings are usually stopped until a bankruptcy is resolved. This may save your home although it will damage your credit record for at least 7 years and you will lose control of your finances.
Foreclosure is not better for you credit...there's no way. A bankruptcy stays on your credit report for 7 years... a foreclosure stays on the credit report forever. I'm in real estate and people think it's better for foreclose and really it's not. Most of the time they still owe money because the house didn't sell for the value of their mortgage. A forebearance or a deed in lieu of foreclosure is the best choices.
The banks have to make the whole amount of the loan including the late payments due at once. This is called the accelleration clause. This allows them to start the foreclosure process. They could not foreclose if the person in the default was never given the opportunity to try to make a payment. The purpose of the accelleration clause is for the bank to move forward, not to punish the person... by then it is already too late for them.
How to Delay Foreclosure
In today's economy, more people are having trouble making their mortgage payments. If you find yourself in this position, you should know what options are available to you to help you delay foreclosure. Doing so may allow you to keep your home.
Start by contacting the lender who holds your mortgage, whether it's one payment you can't make, or you can't afford your mortgage payment as it currently stands at all. It costs a lender quite a bit of money to foreclose on a home, so if you ask for their help, they're likely to work with you.
Opt for a reinstatement option on your mortgage, in which you promise to bring your mortgage up to date by paying a lump sum by a particular date. This option is best if your financial situation is going to improve quickly, not for those who are going to continue to struggle to make mortgage payments.
Refinance your mortgage, particularly if interest rates are lower than what you are currently paying. You can use the equity in your home to help pay your current late payments, and also to spread out your mortgage over a longer term to lower the payments to a more affordable level for you.
Investigate a deed in lieu of foreclosure with your lender. In this scenario, you sign the house over to the bank, agree to sell it within a certain period of time, and the debt is forgiven. There are many stipulations that vary by state as to who qualifies for this method of delaying foreclosure, so it's best to talk to a real estate attorney.
Sell your home on your own and pay off the mortgage with the proceeds from the sale. This will allow you to start over with a home you can more easily afford.
Start by contacting the lender who holds your mortgage, whether it's one payment you can't make, or you can't afford your mortgage payment as it currently stands at all. It costs a lender quite a bit of money to foreclose on a home, so if you ask for their help, they're likely to work with you.
Opt for a reinstatement option on your mortgage, in which you promise to bring your mortgage up to date by paying a lump sum by a particular date. This option is best if your financial situation is going to improve quickly, not for those who are going to continue to struggle to make mortgage payments.
Refinance your mortgage, particularly if interest rates are lower than what you are currently paying. You can use the equity in your home to help pay your current late payments, and also to spread out your mortgage over a longer term to lower the payments to a more affordable level for you.
Investigate a deed in lieu of foreclosure with your lender. In this scenario, you sign the house over to the bank, agree to sell it within a certain period of time, and the debt is forgiven. There are many stipulations that vary by state as to who qualifies for this method of delaying foreclosure, so it's best to talk to a real estate attorney.
Sell your home on your own and pay off the mortgage with the proceeds from the sale. This will allow you to start over with a home you can more easily afford.
Subscribe to:
Posts (Atom)
Posts
