Category: Real Estate

Advantages And Disadvantages Of Lease Option Real Estate Investing

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Lease option real estate investing is a creative way to get started in real estate investing. The biggest advantage of this investing method is “control”. It basically gives the investor the right to possess– be in control of– and profit from a property without owning it.

A lease option contract is a combination of two documents. The lease part is where the owner agrees to let you lease their property while you pay them rent for a stated period of time. During the lease period the owner can not raise the rent, rent it to anyone else, or sell the property to anyone else.

The option part represents the right you purchased to buy the property in the future for a specific price. If you decide to exercise your option to buy, the owner has to sell it to you at the negotiated price. The option part of the contract obligates the seller to sell to you during the option period- but it does not obligate you to buy. You are only obligated to make rental payments as agreed during the lease period.

When the lease option contract is written and structured properly, it can provide tremendous benefits and advantages to the investor. If the lease option includes the “right to sub-lease” the investor can generate a positive cash flow by renting the property to a tenant for the duration of his lease, or lease option the property to a tenant-buyer for positive cash flow and future profits. If the lease option includes a “right of assignment” the investor could assign the contract to another buyer for a quick profit.

Lease option real estate investing, is a flexible, low risk, highly leveraged method of investing that can be implemented with little to no money.

High Leverage

It is highly leveraged because you are able to gain control of a property and profit from it now–even though you don’t own it yet. The fact that you don’t own it also limits your personal responsibility and liability. Only if you decide to purchase the property by exercising your “option to buy” would you take title to the property.

Little to no money

The investor’s cost to implement a lease option agreement with the owner requires little to no money out of pocket money because it is entirely negotiable between investor and owner. There are a variety of ways the option fee can be structured such as an installment plan, balloon payment or other agreeable arrangement between both parties. The option fee can even be as little as $1.00. In order to secure the property for purchase at a later date, tenant-buyers typically pay a non-refundable option fee of approximately 2%-5% of the negotiated purchase to the seller. Depending on how the lease option agreement is written and structured, the investor could possibly use the tenant-buyer’s option fee money to pay any option fee owed to the owner.

Flexible

It is a flexible method of real estate investing because terms of the agreement like payment amounts, payment dates, installments, interest rate, interest only payment, balloon payments, purchase price and other terms are all negotiated between seller and buyer. Responsibilities of both parties are also negotiable. For instance, if the investor doesn’t want to act in the capacity of a landlord, he could specify in the lease option agreement that tenant-buyer will be responsible for all minor maintenance and repairs and the original seller will remain responsible for any major repairs.

Financially Low Risk

It is low risk financially. If the property fails to go up enough in value to make a profit, you have the purchased the right to change your mind and let the “option to buy” expire. Even if your tenant-buyer decides not to buy the property, you have profited by a positive monthly cash flow from the tenant-buyer’s rent payments and upfront non-refundable option fee.

Let’s look at an example of a lease with option to buy structured in a way that the investor profits in 3 separate phases of the investment.

Profit #1 non-refundable option fee

Future sales price negotiated with the current owner is $125,000 with an option fee of 2% of the sales price. Option Fee you owe the owner is $2,500. The future sales price you set for your tenant-buyer is $155,000 and the option fee is 4% of the sales price. Option fee the tenant-buyer owes you is $6,200. You collect $6,200 from tenant-buyer and pay $2,500 to the owner and your profit = $3,700

Profit #2 cash flow from monthly rental payments

The Monthly rental payment you negotiated with the owner is $1,000. You set the monthly payment at $1,250 per month for your tenant-buyer. Each month you collect $1,250 from your tenant-buyer and pay the owner $1,000 each month. Your profit is $250 monthly positive cash flow during the lease period.

Profit #3 is set up when the lease option contract is initially written

The difference in the negotiated future purchase price with the owner and the future purchase price set for your tenant-buyer. Let’s say the property goes up in value to appraise for at least $155,000. Your tenant-buyer decides to exercise their option to buy. You buy the property from the owner at $125,000 and then sell it to your tenant-buyer for $155,000. $155,000 – the $125,000 you pay to the owner = $30,000 profit.

Of course the key to making lease option real estate investing work, is finding motivated sellers and buyers. Finding these motivated sellers and buyers shouldn’t be difficult. The continuing down turn in the real estate market has created a large number of sellers who can’t sell their property and also buyers who can’t get financing to buy. The seller could possibly get a fair offer to be paid in the future by selling their property to a real estate investor on a lease option basis. A potential tenant-buyer could obtain home ownership without having to qualify through traditional home loan guidelines.

One disadvantage of lease option real estate investing involves the tenant or tenant-buyer possibly defaulting on monthly rental payments. This would make it necessary for the investor to come up with money out of pocket to pay the owner and possibly have to proceed with eviction process. However, there are certain provisions and clauses that can be written into the lease option to deter buyers from defaulting on payments.

If the investor fails to do “due diligence” before entering into a lease option agreement, he could end up with a property that is unmarketable. There could be a number of liens on it, issues involving ownership of the property or it might be in foreclosure. By diligently performing research before entering into a lease option agreement, the investor can avoid these mistakes. A few things the investor could do is– perform background and credit checks on both the seller and buyer, search public records in reference to ownership and property status, or do a title search.

Despite the few disadvantages, lease option real estate investing continues to be an excellent way to invest in real estate with little to no money and low financial risks. It also remains to be an excellent way to gain control of a property you don’t own and create positive cash flow and profits on flexible terms.

Bottom line, the secret to success in today’s challenging real estate investing market is to use only the best creative ideas, proven tools and strategies that have been successfully used by other investors to generate cash flow and profit from today’s real estate market. The more you understand and apply now, the more you will profit from today’s financial crisis.

Good Looking Marketing Flyers Are A Key Tool For Today’s Real Estate Agent

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With many types of word and photo processing programs available to busy real estate agents, what are the qualities that make some better than others? Today’s agents need the ability to produce high quality, picture incorporated marketing flyers to keep up with what is a rapidly changing housing environment. In an industry dominated by desperate sellers, home builders with surplus inventory, and banks which have a growing number of foreclosures, real estate agents who have the ability to sell and are equipped with the proper tools to sell are in very high demand. The housing market we all know is very challenged with a record number of over-built single-family homes covering the U.S.

The opportunity for sales agents to earn big commissions is as good as it’s been in a long while. You may say that there’s too much competition in the industry, and while perhaps true, the better agents not only have a wide variety of inventory selections to market, but they also have a large array of potential clients to represent. Today’s real estate agent has the luxury to pick and choose from quite a number of potential listings. They can take as many or as few listings based on how many hours that they want to commit to. Good tools are a necessity in maximizing the efficiency of time allotted to an agent’s busy schedule.

The most basic of tools, aside from a “for sale” sign in the front yard, is a well-written, quality produced marketing flyer displaying the best photography and copy layout. While anyone can put a generic 18″ x 24″ for sale sign in a front yard, the next requirement for collateral material is a great looking sales flyer. An agent can use a traditional word and photo processing program or a specifically, industry-designed program written by a real estate agent, for a real estate agent. A program offering good templates which are user-friendly and have the flexibility to quickly update the format is just what the doctor ordered for a rapidly changing home sales market. For the constantly on-the-go professional, software that allows the user to burn-to-disc and use multiple computers is also a necessity.

After all, a well thought-out and produced marketing flyer can be the difference between making a sale or not making a sale and selling a home at 75% of asking price versus 105% percent of asking price. Arm yourself with the best possible tools to make you efficient and successful.

How National Trends in Luxury Real Estate are Impacting Orange County

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Recent coverage of the luxury market at events like the National Association of Real Estate Editors conference has highlighted the market’s strong resurgence and steady sales. In fact, statistics from the National Association of Realtors suggest that the luxury market is rebounding from the recession faster that middle market and lower-end properties. All signals point to great news for luxury owners that may be considering a property sale in the near future. If you are contemplating listing a luxury property in the Orange County area, what you learn may surprise you.

What is considered a luxury property is changing: Today, a luxury property in many metropolitan areas begins at about the $4 million dollar price point or more than 3500 square feet of space. In more rural areas, the price point for what is considered a luxury property starts around the $500,000 mark. There is further differentiation regionally and even on a town by town basis. In competitive markets such as Orange County, the prices may be higher than anticipated.

Practical features are coming at a premium: When people are contemplating buying a luxury property, they typically ask fairly standardized questions about luxury amenities. Is the kitchen gourmet? Does the house feature a stunning view? But more and more, luxury Realtors are seeing the importance of what can only be dubbed -practical features.- For example, generators are one key trend throughout the country as more areas are affected by hurricanes, storms, and other inclement weather. More concern has also been show about factors such as privacy, safety, and exterior builds to protect cars and other possessions during weather events. Buyers still want traditional luxury amenities, but it is important that safety and emergency infrastructure has also been addressed at the property level.

Luxury townhomes and condominiums are on the rise nationally: A recent piece in the New York Times highlighted the trend of the growing luxury condominium market. While the piece focuses on the New York market, it underscores a trend that is taking hold nationally. More and more people are looking for luxury-level accommodations with the benefits and flexibility of condominium living. Some luxury home owners are even evaluating whether or not their homes can be divided and sold as condos to maximize profits. The success of this approach depends greatly on the home’s location, zoning laws and overall layout and design.

Lifestyle features are playing an increasing role: Another trend that has been noted is the importance of lifestyle features in luxury property purchases. Lifestyle features could be as simple an inside/outside design that allows more flow between a home’s interior and exterior spaces. In other cases, it is more specific to aspects like waterfront or riverfront property. Many buyers are also looking at factors such as golf course access, high end club houses, and other luxury community amenities.

Non-traditional buyers are entering the pool: While the prospective pool of buyers for luxury properties is more limited than for mid-tier homes, there’s been an increasing diversification within the luxury market. Many owners are finding offers coming from buyers that contemplate transforming the space into retreat centers, upscale boarding schools, and even wineries, thus opening up advertising opportunities for Realtors and owners alike with truly unique properties.

The luxury market is thriving in areas of the country such as Orange County. Staying on top of trends helps sellers to make the right decisions regarding their properties. The first step in the sales process is finding an experienced luxury real estate agent that understands your local market and can guide you through the process.

Anastasia Gubarieva – A Professional Real Estate Supervisor

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Anastasia Gubarieva has worked as a real estate agent in Los Angeles and surrounding areas. A skilled negotiator and a dedicated professional, she has been working hard to provide her clients with prosperities that offer the best value for their money. She believes that anyone looking for a good property should be able to find it at a genuine price. By maintaining a varied portfolio of properties in Las Vegas and surrounding areas, Anastasia Gubarieva offers her clients with choice and probability to find the property of their dreams. She is a hardworking real estate manager. Her skills in selling and managing properties have been appreciated by her peers and she has also guided many newcomers in the field on how to get leads and how to manage their properties in a professional manner. She believes that with her dedication and focus, she will make her mark in the real estate industry.

Anastasia Gubarieva

Turkish Jewelry And Turkish Real Estate Make Good Investments

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Buying Turkish jewelry or Turkish Real Estate is a wise investment. Turkey is noted for its naturally beautiful and historical landmarks. It is also famous for its gold deposits which outdistance the puny 19K in the U.S. or Canada; Turkish gold is 22K, 23K, and 24K. investing in either jewelry or Turkish real estate can double your investments.

Jewelry Industry

Turkey is fast becoming one of the worlds emerging leaders in the export of jewelry and precious metals, rivaling Italy. The country can produce 200 tons of silver and 400 tons of gold annually, but this capacity has not been fully exploited. The top producers of jewelry are in the Anatolia area, Ankara, and Izmir, but the center for jewelry production is found in Istanbul. The growth of the jewelry industry in Turkey has grown to employ some 250,000 people.

Turkish gold and silver jewelry are ornamented with precious and semi-precious stones. These are usually designed with Anatolian or Turkish influences, which make Turkish jewelry distinctive. Expect architectural and textile designs on bracelets, rings, and necklaces. But there are newer designs to cater to modern taste.

With a reputed jeweler, tourists can get the best gold jewelry with less the cost back home and a certificate will be provided for every purchase of jewelry to authenticate its value.

Turkey is also famous for its precious stonesblack amber and iridized opal. Black amber in the Turkish region and nearby areas dates back to 130 million years ago and is prized for the unusual color. Opal, another precious stone, is iridized to give it a shine.

A popular jewelry piece is the silver and gold gilded necklaces and bracelets highlighted with semi-precious stones in varying colors, earrings of black amber and opal set in gold, multi-colored opal bracelets, silver and gold double chokers and bracelets in lacy designs, handcrafted anklets, and Evil Eye bracelets.

Turkey’s Real Estate Industry

Purchase of real estate property is restricted to twenty-four countries; among these are U.S. and Canada. Other countries are mostly European countries and it takes one to two months before the title deed is given to the buyer.

There is an assortment of Turkish real estate properties on the market ranging from golf apartments or villas, hotels, vacation homes, apartments, and land. Prices vary according to upscale and provincial locations for 200,000 or 29,000. Buyers can choose any location and type of property in any part of Turkey.

Properties on sale can be viewed online but before a purchase is made, an ocular inspection is advised to ensure that the property is in good condition and the documents are in order. A reliable online broker can be trusted to handle the transaction. But when personally buying the property, a reservation has to be made. The customer’s passport will be submitted to the Land registry Office.

The papers of the property will be inspected by the Military Head Office to check if the property is not located in a military zone. Taxes and fees have to be paid to the tax office and the authorized bank. The payments are announced during the final transaction in the office of the land registry before the seller and buyer sign the land registry book.