Real Estate Genius Investment Software Blog

By John Huddleston

Most people form an LLC (i.e. Limited Liability Company) to hold and manage their real estate for two reasons. First, if the LLC is formed correctly and there is a claim or lawsuit relating to the real estate, then typically, only the assets owned by the LLC, and not the taxpayer’s personal assets, are subject to the claim or lawsuit. Second, an LLC provides tax advantages over other entity choices. For example, the profit or loss from an LLC with only one owner can be included on the taxpayer’s tax return, and the limited liability company may not have to file a separate tax return. By contrast, a corporation would have to file a separate tax return.

Forming an LLC is a relatively simple process. In most cases, the application can be filed online with the state. You will need to know the name of your business, the tax information for the members of the limited liability company (such as, names, addresses, and social security numbers), and the LLC’s contact information. You will generally pay a filing fee, which varies from state to state.

You can Google limited liability company, and you will find many companies that will create the LLC for you (for a fee). You will need the same tax information, however. Alternatively, you can Google your state name and “Secretary of State” to find your state’s online form. It is also best to create the limited liability company in your own state.

In order to gain the maximum protective benefits from an limited liability company, many taxpayers transfer the property to the LLC, so the LLC becomes the legal owner of the property. If the title is not transferred to the limited liability company, and there is a lawsuit against the property, the taxpayer may be personally liable.

A properly formed limited liability company will generally protect the owner’s personal assets from lawsuit or claims against the limited liability company, but it will not protect one asset owned by the LLC from being used to satisfy a claim relating to another asset owned by that LLC. In other words, all assets owned by the limited liability company are potentially subject to any claim against the limited liability company.

For example, if a limited liability company owned several properties and someone is hurt at one of these properties, then the person could sue the limited liability company. Consequently, all of the properties owned by the LLC could be used to satisfy the judgment - not just the property where the person was hurt. Therefore, the limited liability company could potentially lose everything from a lawsuit relating to only one of its properties.

To avoid these risks, taxpayers can form separate LLCs for each property owned. There are many factors to consider when making this choice. Some of these factors are the number of properties owned, the locations of the properties, and the way the properties are financed. You must also consider, the costs and administrative burdens associated with forming and maintaining numerous LLCs. You should discuss these issues with your tax accountant or CPA.

For more information about the tax benefits of forming an limited liability company, visit Use LLC for Real Estate Investments

Tax accountant John Huddleston has a law degree and masters in tax law from the University of Washington School of Law. He has been a guest tax expert on the radio. He advises small businesses in the Seattle Bellevue Federal Way & Everett area on various tax issues. His firm, Huddleston Tax Accountants, also provides tax preparation service, quickbooks consulting and general accounting and bookkeeping service. Profile information on John Huddleston and the CPAs employed by Huddleston Tax Accountants is available at CPA Tax Accountant Profile Seattle Bellevue tax accountant John Huddleston is a frequent publisher of tax saving ideas.

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By Steven Gillman

The following collection of real estate investing tips will probably have a few things that you already know. That’s okay. There will be a few you haven’t heard before as well, and in any case, we sometimes need to be reminded of what we know.

1. Find an agent with the right experience. When selling real estate, drive around and see what else is for sale in the same area. Look particularly at the name of the agents on the signs. The agent whose name shows up the most in your neighborhood will likely know best how to price and market your property. You can also do this by looking through real estate guides to find those agents who are either active in your area, or with your type of property.

2. Make low offers correctly. When making a low offer that may offend a seller, let him know that it isn’t personal, that this is just what you need to make the deal work for you. You can include a list of concerns or of things that you will have to repair, to justify the lower price. If you have a choice in a situation like this, it may be better to let the agent present the offer without you. It can be tough for a seller to hear you say anything bad about his property in person. A list of concerns is less personal, and less likely to offend him - which makes it more likely that he’ll seriously consider your offer.

3. Look for “extra” opportunities. When flipping a house, you might normally look for fixer uppers that can simply be “put into good shape” and sold for a decent profit. But if there are “extra” opportunities that other investors aren’t seeing, you can make even more. These are things like a full basement that can be converted into living space, or attic space that can be made into a bedroom or office, or an extra lot that can be split off and sold without reducing the value of the home much.

4. What to do when rentals won’t produce cash flow. People often buy rental houses, duplexes, and even four-plexes for homes, thinking they are “investing” as well. They pay according to personal values, so these properties can be priced well beyond where they would produce cash flow. Apartment buildings, on the other hand, are priced according to one thing more than anything else: net income. The lesson? When you can’t make cash flow with small rental properties, think bigger.

5. How to find motivated sellers. Real estate investors will often talk about the importance of “motivated sellers,” but how do you find them? When searching newspaper classified advertising, pay attention to the wording. “Need to sell,” “Must sell,” and “Will look at all offers,” are the usual indicators, but you can look at the rental ads too. “Must have a good job,” may indicate a landlord who is tired of tenants and ready to sell. Searching county records for out-of-state owners is another way.

6. Don’t rely on appreciation. If you are planning on rising real estate values as your primary way to profit, you’re speculating, not investing. Recent drops in values in many areas show the flaw in this strategy, but also keep in mind that transaction costs can be up to 10% of the sales price, so you have to have a big increase in value just to break even. Enjoy any appreciation as a bonus, but buy based on the cash flow, a plan to increase the value (fix and flip), or some other well-thought-out plan for profit. This may be the most important of these real estate investing tips.

Copyright Steve Gillman. To see a photo of the house we bought for $17,500, get a free ebook on how to buy Cheap Homes, and a free real estate investing course, visit: http://www.HousesUnderFiftyThousand.com

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There are a lot of catalogues of free insurance quotes, available on the web directories for the clients. The bank loan is offered for the customers by going through all process of loan. The banks are liable of repossessing the real property of the debtors if the debtor is unable to pay all loan charges, this process is known as foreclosure. The payday loans are provided for the customers for the short terms when they are in need of money urgently. The mortgage broker leads are offered for the customers who want to take loan on the basis of real property. The life insurance provides monetary security for the insurers in the case of any injurious or death case. The dental insurance provides the financial help to the customers who want to get services of dentist for teeth treatment.

By Leslie Collins

In order to successfully flip real estate contracts whether you’re involved with potential rehab projects or pre-foreclosures you need to have a solid investor network to present your ‘package’ to.

It is imperative long before you lock up any property that you can, within a few phone calls, contact active and willing investors who will consider your offer.

The key to successful real estate contract flipping is making it easy for your upstream investor group to quickly resell properties you’ve assigned to them. Consistently providing well priced deals that your investor group can turn over quickly gives you the credibility you need to flip contracts on an ongoing basis.

Many rehab investors have more money than time so by you doing the legwork you are providing them a valuable service.

Here are FIVE tips that’ll help you gain credibility with potential investors looking for properties:

1.) Accurate repair estimates - Investors don’t like surprises. When evaluating a property be able to estimate the repairs by a margin of about 20%. If you underestimate your repair cost, your investor will have to re-evaluate whether or not the property is really a good deal or not.

2.) Accurately estimate the Market value of the property - Don’t base your property value estimate on the asking price of other houses that similar in spec. You need to base your value on similar houses that have been sold in the area in the last 30-60 or 90 days.

3.) Understand the impact of holding costs - Know the average ‘Days On Market’ (DOM) for properties selling in that area. This will have a critical impact on your investors holding costs and ultimately your profit. If the average DOM is 90 this means the investor can expect to pay out 3 months of loan payments, most likely borrowed from a hard money lender at somewhere between 12-14%.

Of course if you know the average DOM is 15-30 days your deals will be all the more attractive to outside investors.

Again due diligence in the form of market research on your part will insure you are credible and are communicating the most accurate information regarding DOM to your investor group.

4.) Research the property - be prepared to examine and communicate to your investor group issues regarding deed problems, structural records, comps, zoning status, insurability report, and other key details that would affect closing and or re-sell. Again no surprises.

5.) Be serious and know your role - in other words, treat this as a real business. You are providing a service, a specialized niche that requires a combination of negotiating skills and knowledge of the real estate market. If your assignments turn over or ‘flip’ quickly and at the right price you will be getting weekly calls from investors providing you endless business.

Summary

The good news is flipping real estate contracts can be learned; there are some really good methods in the form of e-books available which are not very expensive. Successfull real estate contract flipping involves a mix of knowledge and experience, and probably the best way to get your foot in the door making money in real estate. Why not start the learning process? Most realize there’s nothing to lose and opens the door to acquiring wealth.

Leslie Collins has executed hundreds of preforeclosure deals in the last 5 years - which actually helped distressed homeowners as well as generating thousands of dollars in profits. Interested in learning about assigning realestate contracts for profit? - Visit: Find and Assign - beginners guide to real estate profits.

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The mortgage loan is given to the borrowers by taking their property documentation under the custody of the creditors till the last installment of loan charges. The loans are categorized into the various kinds, including personal loan, pay day loan, secured loan and unsecured loan etc. every one wants to have cheap loans with cheap interest rates. The business insurance is provided by the insurance companies for the establishment of the business with full security. The student loans are offered for the financial assistance of the needy students. The home equity loans are offered for the home owners who want to take loans by providing the real documents of their real estates. The business loan is particularly offered for the enterprisers to establish their business successfully.

By Mark G Chambers

Even Donald Trump says that now is the best time to buy Real Estate. The record high number of foreclosures are showing a multitude of amazing deals for the eager investor. Many experts are also predicting that housing prices are still going to drop as much as 50%. With all of this contradictory information, what should the small time average real estate investor do?

Housing prices have done a dramatic retracement recently. There are plenty of bargains out there for considering. Even if the prices drop significantly, the potential investor needs to look for ways to minimize their risk. This can only be done by understanding the current real estate market and by knowing which strategies work best in the current market.

Understanding the current market is not easy unless you’re a seasoned professional real estate investor. An in depth market analysis is necessary to understand all of the variables that can affect your future investment.

This market analysis can be performed by the investor themselves, or by a real estate expert. The benefit of having a pre-prepared market analysis is that all of the guesswork is removed. You will simply read the information and then be able to make an informed decision. It can be confusing to do your own analysis of the real estate market unless you have a lot of personal experience.

My recommendation is to seek out both the advice from experts, and to do your own research. By reading books and taking courses, you will learn more about performing your own research over time.

The second step is to understand which real estate investing investing strategies work best in today’s tough market. This can be done after you determine what the current market looks like.

An interesting strategy that works in all markets, and works especially well going into 2008 is by using the “Lease Purchase Agreement.” This strategy is also known as rent-to-own, lease purchase, lease option, lease option to purchase, lease purchase contract and lease option to buy. All of these names refer to the same strategy.

The magic of this strategy is that it helps you make more money monthly than a traditional landlord collecting traditional rent. This strategy also helps you to collect a higher purchase price than current market prices. It’s possible to sell a home on a rent-to-own basis for as much as 10% to 30% higher than the current appraised value of the property.

The Lease Purchase Agreement also allows you to collect more money up front than if you were to rent the property as a landlord typically does. The beauty of this is that if the tenant-buyer ends up not purchasing the home, the real estate investor get’s to keep the entire up front down payment money if the Lease Purchase Agreement is not activated.

The buyer also benefits from using a Lease Purchase Agreement because it allows them to have an ownership interest in the property. They will often agree to handle all maintenance of the property under the agreement because they are intending to lease purchase the property. Of course the LPA gives them the option to purchase the property, they do not have to. If they do not purchase the property under the contract, then the investor can sell the property to someone else at a later date for a higher price (possibly using another rent to own agreement).

The savvy real estate investor protects themselves from risk, and is setup nicely to earn extra profit under the lease purchase option agreement. It does not matter whether the tenant-buyer ends up purchasing the home under the lease option or not, the investor is protected either way under the rent-to-own system.

Mark Chambers is a Real Estate Investing expert. Mark teaches people how to purchase Real Estate creatively to build wealth quickly. For an in depth analysis of the current Real Estate market, including which strategies work best in today’s volatile market, please visit Mark’s website at http://www.LeaseOptionFortune.com.

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By Bruce Swedal

One of the hottest trends in real estate over the last few years has been “flipping” houses. You see it everywhere, in books, articles and reality TV shows. Flipping is hot and why not? There are several ways to do it successfully and here is a list of the most common.

The first way we will discuss is the most common. That is the buy it, fix it then flip it method. Basically you buy a fixer upper and repair it then sell it for a profit. Many successful real estate investors have been doing this for years. They have tested out the system and proven it for you. The key is to purchase home as a bargain that requires as little fix-up as possible and you can typically generate $15k to $50 in profit.

Another method for flipping is the as is flip which works in hot markets. If you are not interested in fixing up properties flip it untouched. For this to work you typically need a home that does not need much in the way of repairs. In a hot market you can price the home for sale just below market and quickly turn a profit in a short period of time.

Then we have the buy it and refinance it with a lease option flip. Using this method for flipping you buy the home, fix it up and sell it for terms. That means you are selling the property in a lease with an option to buy later. The mortgage payment for the home will be covered by the rent payment you receive during the lease. If your tenant later exercises the purchase option you will get your profits without incurring the cost of a realtor in most cases.

Yet another method of flipping is called the wholesale flip. You can use this method because the buy it, fix it and flip it scenario is so hot. When there are a lot of investors in the market seeking fixer uppers you can capitalize on this trend by finding the properties that show promise and re-selling them to investors ready to fix them up. Using this method does not generate the per unit profits that that fix it and flip it method does, but you can turn properties much faster for a smaller profit and not that much effort.

The last tactic to be covered is the pre-construction flip. This method should be used when the real estate market is very hot and appreciating at a rate of around 2% per month. By purchasing a home from a builder before construction is finished you can then complete the purchase when construction is complete and immediately resell the home for a profit. There is a potential down side on this method if the market should slip. Then you could end up with a home that is worth less than when you ordered it 6 months previously. Typically when home buyers are in the market for a newly constructed home they will pay a premium over the normal price if they can get a nicely upgraded home that is available to move in now.

If you are considering flipping homes for profit one or more of these methods should work nicely for you. You just need to evaluate the market you’re in and choose the method for flipping that will work best based on the market situation.

When you want to sell your home wouldn’t it be a good idea to have it listed on the href=”http://www.bruceswedal.com/” mce_href=”http://www.bruceswedal.com/”>Denver Real Estate website with the most traffic? Find additional resources at the Authority href=”http://www.authoritydirectory.com/Real-Estate/” mce_href=”http://www.authoritydirectory.com/Real-Estate/”>Real Estate Directory.

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By Matthew Soren

When you have a project on a timeline, you need to protect yourself and do everything you can to make sure things go as they should and within your budget. When investors run into problems it is usually because they don’t understand what a project entails and they are not as prepared as they should be.

Here are some steps you can follow to avoid these issues right from the beginning.

• Network for References - Aside from getting references from contractors (which you should always do) network with others on your power team for personal references.

Not only are you better off getting more reliable contractors, there are a lot times you can get a discount as a “referral”. When you get references, check to see that the quality of work matches what you want done. Someone’s idea of a “good job” may be very different from yours.

• Interview Several Contractors - Bids for a project can differ dramatically from one contractor to another. Though higher bids help for negotiating purchase price, we all know paying more for work does not necessarily mean higher quality workmanship.

Some contractors will provide steeper bids based on their workload, your lack knowledge or even your pocket book. Along with checking references, make sure they are specific with how they came up with their numbers and what they will do to complete the project. If the numbers, whether too high or too low, don’t add up and they can’t seem to explain it, it should be a red flag to you.

• Obtain License Information - Make sure they are registered, licensed and bonded with the state and provide you with copies of such. You can also check with the state Bureau of Consumer Protection or Consumer Affairs to see if any complaints, lawsuits, or judgments have been filed against them.

• Communicate Clearly - Make sure you communicate what you want done and make sure they have the same understanding. If you have a difficult time communicating with a prospective contractor in the beginning; that should be a red flag to look elsewhere for help.

Additionally, while the work is being completed, it is important to meet regularly to follow up on progress, payments, and to tackle any issues before they arise.

• Get Everything in Writing - I’m sure you have heard this before, and there is a good reason for it! Even if you hit it off with someone and they seem like a person you can trust, don’t depend on a verbal agreement (This includes the little things).

Though I feel most people have good intentions, what one person sees as “moral and ethical” may be very different to someone else. Unfortunately, contracts with a “handshake” don’t mean what they used to. There are a lot of people now who will rationalize an obligation later if they are not legally bound by a written contract. For more extensive projects it is also good to have an attorney look over anything you plan to sign to make sure your rights and assets are protected.

• Utilize Payment Phases - Never pay a large down payment on any project. Some may require you put down 10% or 20% depending on the scope of work involved, however, any more than this should be a big red flag. This is one of the biggest mistakes I see people make when hiring out work. You can avoid this by arranging payment phases and including them in the terms of the agreement. Also, before making the final payment on large projects, get a completed lien release from the contractor or crew.

Overall, if you follow these steps your experience with contractors will be much more smooth, positive, and productive. In turn you will avoid a lot of the nightmares you hear and read about. Hopefully these guidelines will give you some added protection to help this aspect of your business, as needed, to run more smoothly!

Copyright © 2007 Creativerealestatetools.com

Matthew Soren has trained thousands of people around the country for many large organizations. He is a leading authority in risk free, creative real estate investing techniques.

You can visit his website at: http://creativerealestatehelp.com to receive more information on how to maximize profits safely for changing market trends.

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By Denton Ward

The process of investing in out-of-state real estate is not any different than investing in real estate in your own community. You have two choices. You can do it on your own or you can work with a professional and reputable real estate company.

To an extent, investing in out-of-state properties has developed a negative stigma because investors have had bad experiences. Sometimes the problems arise because an investor “jumped” into a situation based on poor information provided by a friend, family member or business associate. Other times a bad situation is created by individuals or companies who are promoting themselves as “experts” in out-of-state real estate investing. Frankly, many out-of-state real estate companies don’t have any idea what they are recommending, have never been to the area they are recommending you invest in, and don’t care what you buy. They are simply looking for a way to get a pay check.

Before you invest, ask these questions:

1) Are they licensed and do they carry the proper insurance?

2) Is working with investors to purchase out-of-state properties the only focus of their business or is it something they do part time?

3) If they are a mortgage company, do they only recommend that you invest in areas/states where they are licensed to write loans? If so, what does that tell you?

4) What type of research do they conduct? Do they travel to every location they recommend? What demographic studies have they done? What reports have they read? Do they subscribe to any real estate investment newsletters they could recommend you read?

5) What services to they provide? Do they provide referrals for brokers, property managers and mortgage companies? Do they provide an escrow coordinator throughout the escrow process?

6) Are they recommending you become a speculator or an investor? (Speculator: get rich quick, big promises, take a chance. Investor: long term, buy & hold to create wealth)

7) What areas are they recommending you invest in? We can’t stress this enough. Are they doing what is easiest for them or best for you? Ask them for verification for everything you’re told (rental comps, sales comps, cash flow analysis, current appreciation rates - not last year’s appreciation rates, projections and demographics).

What types of properties are they recommending you buy? Are they matching your goals, tolerance level and financial abilities with properties that will help you achieve your goals? Or are they just selling you anything so they can make money? DO YOUR DUE DILIGENCE!

9) How long have they been in business of out-of-state real estate investing?

10) How many rental properties do they own and where?

Nationwide Real Estate Investments takes pride in helping investors make sound investment decisions that they can be proud for many years. Quality is never sacrificed for quantity. Do not hesitate to contact me if you have more questions about out-of-state real estate investing. This article is surely the tip of the ice burg when it comes to investing in residential real estate.

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