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New Tax Credit Video

admin — Tue, 03 Mar 2009 21:17:46 +0000

Here’s a little information about the 2009 Tax Credit for Home Buyers. Contact Pat or Beth at 515.537.9922 for more information about how you may be eligible to get up to $8,000 from the government just for buying a home!

9 tips for buying a foreclosed home

admin — Fri, 27 Feb 2009 23:47:01 +0000

9 tips for buying a foreclosed home

By Jeanne Baron

A tide of foreclosed properties has been sweeping into the beleaguered housing market, bringing down property values, dislocating families, and sending municipal governments scrambling to manage the crisis. But some buyers see a once-in-a-lifetime opportunity in the gloomy headlines; they are buying up foreclosed properties at ultra-low prices.

Real estate agent John Lynch of Keller Williams Greater Cleveland West says he has interested buyers calling from all over the country, and as far away as Israel. Some are buying in bulk. "One investor I am working with right now wants to buy 200 houses all under 10K."

Would-be homeowners are not excluded from the bonanza. Despite economic fears and the struggling housing market, Tonya Perkins-Stoudermire of McMullan Realty in Cleveland says this may be an ideal time to think about the dream of first-time home ownership.

She tells the story of a friend who waded into the foreclosure market and came out ahead. "My girlfriend bought a house last summer. It has two baths, a two-car garage, and two fireplaces. She loves it. Her house is $350 a month, with taxes and insurance. She’s in her late 40’s and had been a renter all these years."

Those are the high notes, but these agents tell other stories, too. There’s the one about a far-away buyer who learned he owned a bunch of vacant lots, instead of houses. "It’s not for the faint of heart," says Lynch. Lynch has seen the same house at foreclosure auctions more than once. "That hurts us all," says Lynch.

A check-in with real estate professionals, home inspectors, and federal housing officials offers these words to the wise on buying a foreclosed property.

• Budget carefully. Agent Tonya Perkins-Stoudermire says don’t let a small price tag lure you into a quick deal. Be sure to ask yourself a number of questions: Do you have the money for the extensive repairs these houses often need? "Do you have a crew. If you plan to rehab and then rent, can you afford the house if you don’t find a tenant? If you do your homework, there’s little risk," says Perkins-Stoudermire.

• See the house for yourself. "You can’t buy them sight unseen," says Bill Richardson, president of the American Society of Home Inspectors (ASHI). "If you’re an investor from Chicago and you’re buying in Tucson, you’ll need someone to evaluate the house in person."

• Look at the neighborhood. Your homework should include evaluating the neighborhood. You may not be able to recoup the cost of the repairs if the value of the house is depressed by widespread foreclosures or high crime in the area. Tonya Perkins-Stoudermire says she also encourages buyers to study the neighborhood’s appeal at all hours, including at night.

• How long has the house been empty? The longer the vacancy the more damage there is, in most cases. Bill Richardson, of ASHI, says if a house hasn’t been "moth-balled" carefully, a long list of ailments set in. "The plumbing seals dry out, sewer gases back up, and bugs that are in the sewer get a chance to get into the house. That’s true for the sinks, toilets, and washer drains," says Richardson.

• Was it winterized? Don’t turn on the utilities until you know the condition of the pipes. If the pipes cracked during a cold spell, water will leak into the walls, and mold could take hold when you turn the water back on.

• Look at the landscaping. ASHI’s Bill Richardson warns, "If the house has been neglected, untrimmed trees, vines and bushes contribute to the deterioration of the house." Vines crawl into the windows, and tree seedlings send roots down into the foundation. "It doesn’t take very big trees to mess up pavers, and dead branches crash into the house," says Richardson.

• Contract for a private inspection. Banks generally require a home inspection when lending money for a mortgage. But even if you’re paying completely out of pocket for an ultra-cheap find, all the pros say it’s crucial to get an up-to-date inspection.

Richardson says previous inspections "are only a snapshot in time," and conditions change dramatically. "There’s no caretaker on these properties. I’ve looked at quite a few," says Richardson. "We’ve seen vandalism. We’ve seen previous owners steal cabinets and fixtures. Copper piping has been stolen."

In some cases an inspection will prevent further damage. For example, if inspectors determine the pipes are cracked, repairs can be done in advance. Richardson said inspectors charge $300 to $500.

• Consider a HUD house. The Department of Housing and Urban Development is currently holding approximately 39,000 houses whose previous owners held mortgages insured by the federal government. HUD houses go to market about six months after foreclosure. Local governments get the first option to buy. After that, buyers who pledge to live in the house have the first opportunity to offer a bid. If the house is still on the market after a period of about 10 days, the listing is opened to investors. Owner occupants end up with about half of HUD’s properties, according to HUD officials.

A fraction of the total foreclosure market, HUD’s inventory is concentrated in Georgia, Indiana, Michigan, Ohio, and other states where the mortgage crisis has been especially severe. But if one of these houses suits your fancy, HUD spokesman LeMar Wooley says the feds offer a few advantages. "You will know the fair price of the property" because HUD updates its appraisals regularly. It offers a "property condition report" too, though that report is not updated. Wooley is thus among the chorus of experts urging buyers to pay for their own home inspection before closing the deal.

If HUD appreciates the value of a good inspector, inspectors likewise say HUD houses are better protected. "The feds often take the steps to winterize the houses. They put anti-freeze in the traps, and drain the pipes. When HUD’s involved it’s a little bit better," says ASHI president Bill Richardson.

• Don’t expect to profit from a quick sale. Investors who buy intending to do as little as possible to a house, hoping to resell for a profit when the market turns around, may find little profit and a lot of headache. Some cities are cracking down on neglectful property owners, charging penalties that increase over time, and unmaintained homes lose value quickly.

But real estate pros and housing officials report that, overall, investors are a welcome and all-too-scarce resource, and most are fixing up the houses they buy for rent or resell. What’s more, investors and new owner-occupants might get the satisfaction of helping to turn a hard-hit neighborhood around.

Easing the Transition to Your New Home

admin — Fri, 27 Feb 2009 01:34:08 +0000

You might also be interested in our MOVING WITH PETS post

Use the right boxes, and pack them carefully

Professional moving companies use only sturdy, reinforced cartons. The boxes you can get at your neighborhood supermarket or liquor store might be free, but they are not nearly as strong or padded, and so can’t shield your valuables as well from harm in transit.

Use sheets, blankets, pillows and towels to separate pictures and other fragile objects from each other and the sides of the carton. Pack plates and glass objects vertically, rather than flat and stacked.

Be sure to point out to your mover the boxes in which you’ve packed fragile items, especially if those items are exceptionally valuable. The mover will advise you whether those valuables need to be repacked in sturdier, more appropriate boxes.

The heavier the item, the smaller the box it should occupy. A good rule of thumb is if you can’t lift the carton easily, it’s too heavy. Label your boxes, especially the one containing sheets and towels, so you can find everything you need the first night in your new home.

For your family’s safety and comfort

Teach your children your new address. Let them practice writing it on packed cartons. You can lighten your load and reduce any storage space you need to rent by hosting a garage or yard sale.

Fill two "OPEN ME FIRST" cartons containing snacks, instant coffee or tea bags, soap, toilet paper, toothpaste and brushes, medicine and toiletry items (make sure caps are tightly secured), flashlight, screwdriver, pliers, can opener, paper plates, cups and utensils, a pan or two, paper towels, and any other items your family can’t do without. Ask your van foreman to load one of these boxes, so that it will be unloaded at your new home first. Why the second box? In case the movers are delayed getting to your house on the day of the move.

Keep your pets out of packing boxes and away from all the activity on moving day.

Let all your electrical gadgets return to room temperature before plugging them in.

Since you may need to call old neighbors or businesses from your new home, pack your phone book.

Work hand in hand with your mover

Give the mover’s foreman your reach numbers and email addresses so you can stay in contact.

Read the inventory form carefully, and ask the mover to explain anything you don’t understand. Make a note of your shipment’s registration number, and keep your Bill of Lading handy.

If you’re moving long distance, be aware that your property might share a truck with that of several other households. For this reason, your mover might have to warehouse your furniture and belongings for several days. Therefore, ask your mover whether your goods will remain on the truck until delivered. If they have to be stored, ask whether you can check the warehouse for security, organization and cleanliness.

Moving With Pets

admin — Fri, 27 Feb 2009 01:31:12 +0000

You might also find EASING THE MOVING TRANSITION interesting

As pets become a part of the family, moving them safely is important. However, relocating pets can be a tedious task.

It requires time and proper attention in order to provide suitable transportation for them. However, before moving your pet, analyzing the expenses involved, acquiring the documentation, arranging for transportation, and other such matters would have to be taken into consideration. The transportation required could be of different types, such as local, national or international. Relocating them within the city is comparatively easier than transferring them out.

Relocating nationally:
Usually, according to the law, you would need appropriate documentation of health before shifting your pets to another state. Though this is not problematical, yet it is very necessary to obtain these documents. If you need to shift from one city to another, the state officials might demand the following:

a) A permit letter for import.
b) Vaccination proof.
c) Tests to find out if the pet is ill.
d) Validity proof that the pet does not belong to an area with quarantine restrictions.
Relocating Internationally:
Relocating your pets internationally can be complicated, and requires the following information:
a) Knowledge regarding import and export documents.
b) Various veterinary processes.
c) The policies of specific airlines.
d) Requirements regarding the transportation.
e) Proof of the required quarantine.
f) How to accommodate the animal on board.
g) Animal identification proof.

Precaution while relocating pets within the state:
It is very important to understand the nature of your pets; whether they are shy or enthusiastic about traveling. In either case, it is risky traveling with them without taking relevant precautionary measures. To make your travel hassle free, you should take the following precautions:

a) Attach ID tags on you pets while traveling. Write down either yours or a friend’s telephone number on the tag.
b) Make sure your pets have the facility of the microchip ID, which contains your full and updated address and contact number.
c) Always keep your pets contained in an enclosure. You should ensure that they are tied safely, or kept in a place from where they cannot fall and injure themselves.
d) Pay attention to the temperature of the metallic pick up bed as it takes on the atmospheric temperature.
e) Though cats generally travel well in cars, yet they should be carried in a carrier to prevent them jumping out when the door opens, or disturbing the driver by jumping on him.
f) Try to contain dogs in a carrier inside the car, as it is safer for both the dog and the owner.
g) Temperature affects the mood of pets; hence, you should not travel with your pets in extreme hot or cold weather.
h) Always keep enough water to drink, as the lack of water could prove fatal.
i) Moving from one place to another could cause your pet great anxiety. Hence, you may need to consult your vet to prescribe a sedative to calm the pet down.
j) Ensure that you possess all the necessary vaccination certificates of your pets. If you do not have them, you need to get them from your vet. This is particularly important because the vet in the new location will need the information.
k) The rabies vaccination proof is very important because when dogs are emotionally disturbed, they may bite people, hence it is necessary to carry it while traveling.

Preflight Instructions:
Preflight instructions are required to be adhered to by the owner. These instructions ensure the safety of your pet, while ensuring their journey is as trauma free as possible. The following instructions can help in simplifying the hassles involved with moving pets from one place to another:

a) In order to minimize the animal’s anxiety and nervousness, they should be conditioned to travel many days before the day of travel.
b) You should not give tranquilizers or sedatives to pets during the conditioning period, as it might upset the pet’s respiratory mechanism, temperature control system, and cause loss of blood pressure.
c) Do not feed the pet or allow it to drink water for about six hours before the flight.
d) Pets should be allowed to exercise before taking them to the carrier.
e) A familiar toy or object should be placed in the carrier.
f) Leashes should be removed before the flight, but should be kept handy for the transporters. Choke chains or harnesses must be avoided.

Moving from one home to another may be necessary for you, but it could be a traumatic experience for your pets. Hence, if your pets need to be left alone after arriving in your new home, give them time to familiarize themselves with their new environment before leaving them by themselves.
Therefore, moving your pets can be made simpler by understanding their nature and needs. Although it may be a daunting task, it can be managed smoothly by following a few guidelines and taking some precautions.

The Way to Succeed as a RE Investor

admin — Fri, 27 Feb 2009 01:13:44 +0000

The Only Way to Succeed as a Real Estate Investor
by C.L. Jones

"The only way to succeed as a real estate investor", are my private thoughts from being in the real estate investing world for 4 years (and failing for the first 3.5 years). I am currently living in Bridgeport, CT where we have the highest gas prices in the country. So I bet you can imagine the price of real estate here. My reason for mentioning the gas and real estate prices is to let you know that if I can be a successful investor in my hometown, then you can too. So please stop saying that real estate investing doesn’t work where you live. Ok, its time to get a pen & pad and start taking notes.

The first thing key to being a successful investor (from my experience) is that you have to believe that you are a successful investor. If you don’t believe it, how in the world do you expect others to believe it. Do you agree that the only way for you to believe it is to do deals. And the only way to do deals is to tame the "Cobra" of fear! Before I move further, and more importantly, before you can move further, I want to put some laser beam focus on the word "tame".

I want you to know that the fear will always be there. Please note that I didn’t say that you have to eliminate the fear. I said that you only have to tame the cobra of fear. If you can grasp this concept, you will take the most important step (in my humble opinion) to becoming a successful investor.

I believe that you will agree that fear is the #1 enemy to your future success in Anything!

So please learn to act in spite of the fear, and what others say about your career as a real estate investor.

As we go forward with more articles, I will fill in the blanks and help you build a bridge your own real estate investing success. I hope this introduction article has given you the confidence to believe that fear is normal. You don’t have to wait until the fear is gone to start investing. I know that you can do it.

In your next article, I will go over 7 critical things that you must have to set up and run a successful home office. Make sure you check that site daily for new articles that will help you create your family’s real estate empire.

P.S.

To ensure that you never miss the latest article, make sure that you join our network of investors who are learning how to create generational wealth for their families with real estate.

To your Generational Wealth,

CL Jones

C.L. Jones is no stranger to adversity, but the idea of giving up on his dreams has always been completely foreign to this Connecticut native. Born to teenaged parents in Stamford, Jones grew up in undoubtedly one of the city’s worst housing projects. Despite his troubled environment he always knew he was destined for so much more. From a very young age C.L. had an entrepreneurial spirit, but without the guidance of positive role models to hone his skills, he turned to the fast paced world of drug dealing. Although he was very successful, Jones soon realized that the drug business would either lead him to a life behind prison walls or any early grave. Growing tired of losing his friends and family to drugs and crime, C.L. made the decision to change his life and enrolled in the United States Marine Corps. While in the Marines, Jones refined his leadership skills and became more determined than ever to become a successful businessman. After an honorable discharge from the Marines, C.L. tried his hand in several different fields, but did not achieve the satisfaction he was seeking until he encountered real estate. Jones left a lucrative sales career in the corporate world to start his own real estate investment firm. Within the first eleven months of investing he quickly amassed over two million dollars in real estate and never looked back. In just three short years C.L. Jones has established himself and his company, Pieces of a Dream, LLC, as a beacon of change in the community. His resume includes a stint on radio, as well as seminars and classes dedicated to educating the public on the power of investing in tax free pofits using real estate. Jones company was built on the premise that life is like a puzzle in which each person is an integral piece of the big picture. With a book in the works and several other promising ventures, C.L. Jones is committed to sharing his piece with the world. Availability: Available to give presentations/seminars to teens, adults & organizations on the topics of: Creative Real Estate Investment Techniques, The Power of Networking and Marketing, and Motivation

Selling Your Home in a Declining Market

admin — Fri, 27 Feb 2009 00:49:28 +0000

Selling Your Home in a Declining Market

by Richard Daskam

Selling a home in a declining market starts with a proper attitude and finding the right Realtor® who is optimistic and knows the right sales techniques in this tough market. Even though most people and economists are down on the housing market (feel it is depressed, that the economic recovery isn’t going to happen in the next few months, and consumer confidence is down), it doesn’t mean that you can’t sell your home.

The truth of the matter is many people will sell their homes between now and this summer. While many sellers and real estate agents take a reactive approach to market conditions, those sellers who take a more proactive and realistic approach to the market will be the ones who sell their homes. These are the sellers who take advantage of this market and move up to their dream home! First, be honest about appraising the condition of your home.

The key to successful selling in a ‘declining market’ is pricing your home at today’s market value, having your home in tip-top condition and being able to work with a prospective buyer on financing needs and terms. Don’t let your ego or pride get in the way when determining a price for your home. Put yourself in the buyer’s shoes and walk across the street. Curb appeal to a new buyer is a very important and is many-times overlooked.

Secondly, take a leisurely walk through your home jotting down the little things you might do to spruce it up. New carpeting, a fresh coat of paint, new light fixtures, mirrors, etc., are items that will give your home more emotional appeal and does not cost too much. Put away the clutter throughout the home. Rooms free of clutter will appear bigger and the new buyer can visually ‘move into’ your home much easier. Remember, new buyers are not buying your furniture.

Finally, be patient. The real estate market has changed considerably since the last run-up where homes sold in hours or days. We are now experiencing a more "normal market" where homes take 90-120 days to sell. Remember, inventories are at an all-time high right now. Bank foreclosures are all around you and many buyers will have difficulty qualifying for a new loan. Lenders also have very strict guidelines now and consumer confidence is very low. Allowing for a normal marketing period will do a lot to alleviate your impatience when you have few showings of your home or a lack of offers to review.

A good Realtor® will keep you abreast of market changes, activity on your home and others in the neighborhood, while maintaining a "teamwork" concept that is paramount for a successful sale. Properties need ample time to be exposed to the public and finding the right buyer requires a good understanding of the market as well as sales values. In all honesty, there are no easy answers but one thing is for certain, even in the worst markets, there are people selling homes and taking their equity!

IRA, LLC or Solo 401(K) for Investment?

admin — Fri, 27 Feb 2009 00:46:20 +0000

Should You Use an IRA LLC or Solo 401(K) to Invest in Real Estate?

by Phoebe Chongchua

Nobody would argue that there has been severe disappointment in the stock market performance. That has a lot of people looking for other options such as taking their retirement investment accounts into their own hands. Using the self-directed IRA allows you to enjoy the benefits of contributing to your retirement account while also being able to self-direct those funds into alternative assets such as real estate.

“The simplest way to invest in real estate with retirement accounts is with a self-directed IRA. An IRA has to have a custodian such as a bank or trust company that will hold the assets for the accountholder,” says Jeff Nabers, founder of IRA Association of American and CEO of Nabers Group.

“You can open a self-directed IRA and then roll your retirement funds into it and then you can ask the custodian to go out and invest based on your wishes,” says Nabers.

While this method of using your self-directed IRA to invest in real estate is becoming increasingly more popular, it has its downside. “It can become cost-prohibitive,” says Nabers. He says the fees that custodians charge can add up very quickly. And he adds, “The custodians can be slow to react to an accountholder’s needs. Sometimes they might not let you do an investment because of their policies.”

But Nabers says investors can create an IRA LLC (Limited Liability Company) which allows more freedom to invest in what and when they want. “You can pair your IRA with an LLC. The LLC is created and the IRA accountholder directs the custodian to invest some or all of its funds into the LLC. The accountholder then manages the LLC,” explains Nabers.

He says this method doesn’t require accountholders to get approval from a custodian to purchase real estate—with the IRA LLC the accountholders have complete checkbook control over their funds.

However, Nabers says another retirement vehicle that investors are turning to is the Solo 401(k). This investment vehicle provides checkbook control, allows 10 times higher contribution limits than the IRA, and provides the ability to borrow money from your retirement account, and, generally, it helps you avoid the UBIT (Unrelated Business Income Tax) — a tax that is often created through leveraged real estate ownership.

Unlike a self-directed IRA or IRA LLC, the Solo 401(k) allows you to be the actual trustee of the retirement plan directly. You manage the funds and you invest them in what you want.

“In an IRA everything about how it works is laid out in a section of the Internal Revenue Service code. With a Solo 401(k), the section about how it works describes how it can work, but how the Solo 401(k) actually works is determined by the plan documents. So, all IRAs work the same but Solo 401(k)s can vary a lot from one plan to the next depending on how the plan documents are written,” says Nabers.

“You can set up a Solo 401(k) anywhere; what it comes down to is how flexible and capable the plan will be. You could set up a Solo 401(k) with a stockbroker and then you’ll invest only in stocks, bonds, and funds. Or if you decided to invest in a less restrictive platform, then you open a Solo 401(k) at another company but all that company does is send you a binder on your account and doesn’t offer any real help,” says Nabers.

Here are five things to look for before deciding to open a Solo 401(k):

Expertise and knowledge. It is extremely important to find a company that is highly experienced in setting up a Solo 401(k). As the stock market plummets, the industry of self-directed investing is growing rapidly. Companies are popping up all over the Internet. It’s crucial that you find a company that has expertise and knowledge in this highly technical field. Without the expert support and financial intelligence, your retirement funds could be in jeopardy.
Additional services provided. Make sure the company that you use to create your Solo 401(k) plan documents offers you additional resources. Some companies will set up your Solo 401(k) but not offer any additional educational information on important issues such as prohibited transactions.
Make sure the company provides an IRS opinion letter to ensure the Solo 401(k) will receive favorable tax treatment as a qualified plan.
Review the Solo 401(k) plan documents. Don’t just open the account without understanding the limitations of the plan documents. Remember, these plan documents can vary drastically so it’s critical to discuss your specific needs with the company before you elect to set up a Solo 401(k).
Look for document provider rather than custodian. Custodians are not required for Solo 401(k)s. In order to have direct possession of your assets, you will want to make sure the plan documents offer more flexible terms than a custodian’s. If you use a custodian you will likely not have direct control of your assets and may have to go through the custodian in order to execute a transaction.

For more information on self-directing your retirement funds to invest in real estate, visit; nabers.com.

Published: February 6, 2009

Phoebe Chongchua is an award-winning journalist, an author, customer service trainer/speaker, and founder of Setting the Service Standard, a customer service training and consulting program offered by Live Fit Enterprises (LFE) based in San Diego, California. She is the publisher of Live Fit Magazine, an online publication that features information on real estate/finance, physical fitness, travel, and philanthropy. Her company, LFE, specializes in media services including marketing, PR, writing, commercials, corporate videos, customer service training, and keynotes & seminars. Visit her magazine website: www.LiveFitMagazine.com.

Phoebe’s articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, Rancho Santa Fe Review, and Today’s Local News in San Diego, as well as numerous Internet sites. She holds a California real estate license. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Phoebe’s writing is also featured in Donald Trump’s book: The Best Real Estate Advice I Ever Received and The Complete Idiot’s Guide to Buying Foreclosures. She is the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success.

Contact Phoebe at (858) 259-3646 or phoebe@livefitmagazine.com. Visit PhoebeChongchua.com for more information.

Creating a Tax Strategy for 2009

admin — Fri, 27 Feb 2009 00:44:36 +0000

Creating a Tax Strategy for 2009

by Peter L. Mosca

[Note: To follow is an excerpt of an interview with Peter Jeppson, co-founder of Money Mastery, a financial literacy and coaching program designed to help individuals and families get in control of their finances. To listen to the show archive or download an MP3, go to www.IncomePropertyInvestmentTalk.com/010709.]

Mosca: We know the goal of tax planning is to arrange financial affairs so as to minimize taxes. The good news for income property owners is that tax planning for rental property opens up many opportunities for sizable tax deductions. The bad news of course about being a landlord is that all the income you earn from your rental units is subject to Federal and State income taxes. Can you discuss ways real estate property investors can reduce their taxes in 2009?

Jeppson: When people have income of any kind, earned or passive, that dictates how it’s going to be taxed. When a person approaches real estate they need to approach it like a business, not a hobby but a real full-blown business. To do that, it’s important to keep track of your activities. Start a diary. For example, if I’m going to do something in real estate, it’s important that I have a meeting with everybody involved. Even if you have a meeting with yourself, keep an agenda and notes. If you have planned in advance what you need to be doing on the tax side, you can set up your real estate holdings inside of an entity.

Mosca: Do you do this to have of an exit strategy?

Jeppson: Yes, whenever you enter you must have an exit. Taxes are not everything; it’s just one part of the whole piece. So, pushing it around and pushing it into a new year is important. When you fail financially, let it come straight down and not go out laterally and hurt your credit, lose money in other areas, and then like the domino affect effect so many more things. It’s so important to be organized properly so that you have it in such a way that it doesn’t bump in to everything else and destroy it.

Mosca: What are some of advantages of creating an LLC?

Jeppson: You can set up the LLC to be managed by a member. A manager that’s not even an owner can also manage it. Say, for example, I have five children and they each own a fifth of the LLC, or 20 percent. I can manage that LLC and not even own any part of it. I can take a management fee, I can control everything, I can enter into all types of contracts, and I can market the company, whatever I wish as a manager. Now, let’s bring that home. If you were to total your personal assets, home, car, and savings, most people would have more money in the personal side than they would in the business side. Let’s say the business is really tiny. It’s a small circle. But on the left side is your personal and that’s a bigger circle, not to put any numbers with it. So, if someone is going to sue you, which circle are they going to sue? The bigger one on the left is your personal assets, home, car and savings or the one on your right, your business that doesn’t have very much in it? The goal is to create this business. You want to invest in real estate and grow your real estate business on the right side so it would be huge compared to your personal assets. In an LLC I can be a manager and not even own any of it. So none of the assets of the LLC are available to any creditors.

Mosca: Why don’t investors hear about ideas like this from financial planners or CPAs?

Jeppson: Let’s take a typical experience. Most people put their receipts in a shoebox of some kind, and walk into the accountant. Can you imagine how the accountant feels having to go through all the receipts and to do all the detail on that accounting? What happens is these accountants will hire people for $15 an hour to put all that detail together and charge you maybe $50 an hour for their services to cover overhead and their time. Bottom line: they don’t like seeing a shoebox with receipts. Are they going to stand up to you and say, “you’re an idiot and by the way I’m not going to do your taxes anymore?”

Mosca: No, not really because it’s to adversarial.

Jeppson: Well-said Peter. So, what happens is they never come to you before the end of the year. Notice that when you see them the year is done. The door is shut. You’re not going back and you can’t do one thing about it.

Mosca: What can we do?

Jeppson: Get organized. Control spending, eliminate debt, maximize your savings, and reduce taxation. That starts with a spending plan, and that starts with a tax plan. If you start with the end in mind, it helps. If you get some knowledge and information, then you know how to direct your accountant. That’s what we do. Accountants have a way of doing accounting. They have a system. Say to your accountant, “Set me up, set my books up and tell me how I should keep them and I’ll keep them your way and when I bring them to you then you can do them in minutes and charge me a whole lot less than I can take every advantage of all the tax savings.” [For a free consultation with peter, go to IncomePropertyInvestmentTalk.com/010709 and put in FREE OFFER.]

Mosca: What is your take on the Obama administrations plans as they relate to capital gains taxes. I believe he is going to leave them alone for the next 12-18 months. What do you see?

Jeppson: I agree with you Peter. I think he is going to leave them alone. If he jimmies them too much, I think they are going to fall off the edge. I don’t think he can afford to make too many more changes. When the Federal government puts a certain money supply out there and then the banks do not loan it out or to each other, the money is not moving in the economy. Until the confidence level comes back, we are not going to see money moving. When Lee Iacoca took charge of Chrysler Motors and they needed a loan and the government bailed them out, at the last moment the government said I want to buy stock in Chrysler instead of giving a loan. When Chrysler solidified, the government sold their stock for seven times more than they paid for it.

Mosca: What is your golden nugget?

Jeppson: Put a spending plan together. Tie it to the way you are personally organized. An annual review is important. See where you are, where you are going, what has happened well, and bad, and do the comparisons.

Published: February 5, 2009

Peter L. Mosca is president and founder of BAK Communications, Inc. He has over 22 years of communications and media consulting experience, serving a variety of nonprofit organizations, including the CCIM Institute and the REALTOR Association on all three levels – national, state and local. He is the Spokesperson Trainer for the CCIM’s Jay Levine Academy and trains hundreds of residential REALTORS nationwide to be effective industry spokespeople. He is consistently ranked as "excellent" by about 90% of those who attend his presentations.

While his principal consulting focuses are public speaking and media relations development and content delivery and management, Peter is also the host of the Voice America Network’s weekly radio program, "Income Property Investment Talk," a one-hour program that brings the powerhouses of commercial and residential real estate to property investors every Wednesday at 11 a.m. EST.

Peter is married 17 years to his wife Barbara. They have two children: Ashley, 15 and Kelli, 12. Hence, the name BAK Communications, Inc.

Success with Short Sales

admin — Fri, 27 Feb 2009 00:43:04 +0000

Success with Short Sales

by Phoebe Chongchua

It may truly be the choosing of the lesser of two evils — short sale or foreclosure — but, if you have to get out of your home, finding a way to complete a successful short sale may provide the best outcome for a distressed homeowner.

Since I’ve covered short sales in previous columns, see Short Sale: May be Solution for Delinquent Homeowners, I am not going to focus on what they are but rather how to make them successful. Short sales are typically more difficult than a regular real estate transaction but they are better than simply walking away from a home and letting it foreclose.

These days, with foreclosures and short sales comprising nearly 40 percent of recent home sales, the National Short Sale Center (NSSC) is receiving more than 3,000 calls per month from homeowners across the nation. The company has already handled more than 1,000 short sales in all 50 states.

Nearly 12 million homeowners are upside down with their mortgages — owing more than their home’s value — and the number is growing. It’s estimated that number will increase to 15 million within a year’s time.

Travis Hamel Olsen and some partners opened the NSSC a few years ago. He says the short sale is a "win-win" situation. The bank ends up losing less money than if it ended up taking back the property and the homeowner’s credit is not damaged as much as from a foreclosure.

But the short sale process is not easy or financially pain-free. Some lenders will absorb the difference between what the outstanding mortgage is and what the home sells for in a short sale. However, other times the lender will seek to collect the difference from the homeowner.

If you’re considering a short sale, here are some tips that you should consider.

Get expert help.

This is a must. Short sales are difficult and negotiating through the process can be very stressful. You need guidance and the best available information that you can find. "There’s no charge for our services to the homeowner," says Travis Hamel Olsen, President of National Short Sale Center. That’s because the NSSC is paid by splitting commission with the listing agent and the lender pays the company a closing fee that is authorized by the homeowner. For those fees, the company will help the homeowner navigate through rocky waters. "We will guide the homeowners, letting them know all the documents that they need to collect for their specific lender," says Olsen.

Start the process as soon as possible.

Contrary to what some homeowners believe, you do not have to be delinquent to start or complete a short sale. "Don’t sign title over to anybody else to conduct a short sale for you," cautions Olsen. He adds, "A lot of people will sign the deed of the property over to somebody to negotiate the property — that’s not needed."

Submit a hardship letter.

Even though you’ll utilize the services of expert agents and short sale specialists, you’ll still need to do your part to help convince the lender that the short sale is the best outcome for all. The hardship letter explains to the lender why it is impossible for you to pay the full amount of the loan. It demonstrates your true financial hardship. Experts say you have to be careful if there is a big gap between your current income and the income you used to get the initial loan to buy the property. A large gap could point toward possible mortgage fraud, unless your financial circumstances have drastically changed.

Price the short sale competitively.

Usually, it’s best to price the property at or near market value. Keep it competitive says Olsen. He says a lot of people want to list the property at what the debt is but that is not usually successful. The good news is that Olsen says banks are more willing to negotiate. "We are seeing more approvals and consequently more closings every single month," says Olsen.

The short sale can be a lengthy process, have, patience, quality experts on your side, and stay on top of what is needed from you to help close the deal. For more information on short sales visit: shortsalecenter.com.

Published: December 19, 2008

Contact Phoebe at (858) 259-3646 or phoebe@livefitmagazine.com. Visit PhoebeChongchua.com for more information.

Five Key Areas to Pay Attention to When Buying a Home

admin — Fri, 27 Feb 2009 00:41:55 +0000

Five Key Areas to Pay Attention to When Buying a Home

by Phoebe Chongchua

Looking for a new home can be exciting and frustrating. You can help alleviate the frustration by paying close attention to five key areas of the homes you’re considering buying; it may save you money in the long run.

Don Walker is an inspector and owner of Ace Home Inspections. He says there are five areas in homes that he frequently reports problems with. They are electrical, foundation, plumbing, the attic, and landscaping.

Electrical Walker says sometimes homeowners assume with newer homes that all will work just fine but that’s often not the case. "I [inspected] a brand new house — four years old but the electrical was all done incorrectly," says Walker.

Having a complete home inspection will help to rule out any problems and point out any areas of concern. However, even as you’re browsing homes, buyers can start to make note of the key areas that Walker mentioned, such as the foundation.

Foundation Walker says a four-year-old home he inspected recently was already showing trouble signs which could result in a costly repair project. "It was a model home. What [the homeowners] did was plant trees for shade to make it look really nice, but they planted the wrong trees and they’re going to crack the foundation and it’s going to cut the property value down by $50,000," says Walker.

Walker says in the case of that home, the trees were causing micro-fractures in the tile in various locations of the home. "As you walk through the house, 21 feet in and 30 feet deep, there’s just too much root invasion and it’s going to ruin their tile," explains Walker.

He says some tell-tale signs with this home were the minor cracks in the foundation that were causing a lifting and separation of the foundation. Also, the windows were not opening and closing properly, "which means the foundation is moving."

However, just because you see cracks doesn’t mean there is a foundation problem. "Most people don’t understand that there are natural cracks in a house. That’s why when we do an inspection report we have to look at it and say ‘Okay, this is a typical crack and this one is an untypical crack,’" says Walker. He says some cracks may lead to other problems while others won’t.

Plumbing Walker says another big area of concern is the plumbing. It’s an area that you can’t always spot as easily but it can create expensive repairs if plumbing issues go either undetected or are not properly fixed. "Mold forms underneath sinks when people have a leak and they fix the pipe but they don’t take care of the mold," says Walker.

He says things like caulking the sink can help prevent mold. "That’s my number one thing I always find — bad sinks," says Walker.

He says that when you look at the sink, look behind it and most of the time you will discover a little crack. "What happens is, when you wash dishes or you wash your hands in the bathroom or the kitchen, the water gets in that crack and seeps down. Once the water gets behind the cabinet it’s in a perfect position to create mold," says Walker. The dampness, humidity, and lack of light can turn that area beneath the sink into a mold-breeding ground.

Attic "You can tell everything about the house by the attic," says Walker. He says other areas of the home can be covered up if a repair had occurred. For instance, if there was a leak and it damaged a wall, with the right contractors and repairs it can be made to look like new and, hopefully, function like new. But Walker says the attic is sort of the eyes to the soul of the home. "In the attic you can tell where all the damage has been," says Walker.

"If you’re in a 20-year-old house and you see that the insulation is brand new, you know that there was a water leak because it had to be replaced," says Walker. He adds, "You can tell if the roof is good because you can look right at the wood."

Landscaping "There should not be moisture or plants next to your house," says Walker. He says there should be a 12 inch barrier between the landscape and the house. Walker says otherwise you run the risk of having the foundation crack and affect the home. What happens is, as the landscape that is too close to the home is watered, the foundation and soil expand. Then, when no watering occurs, the foundation dries up and shrinks and this can cause it to crack.

Remember, knowledge is power, so learning about the home before you close the deal on it will keep you from making a mistake that may cost you extra out-of-pocket money later.

Published: September 26, 2008

Contact Phoebe at (858) 259-3646 or phoebe@livefitmagazine.com. Visit PhoebeChongchua.com for more information.