Real Estate 101 (7)
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Now that we have the basics of an installment contract let's look at how to implement this strategy and where we can find a deal. Let's look at this from the the buyer's point of view first. The best way to promote your deal is to know and use the advantages to the seller.
First and foremost are tax advantages. An installment contract will provide interest income that will usually be taxed at a lower rate than his gains on the sale. The best aspect is that the gain is only taxed as it is received. In the early years... continue reading >>
Real Estate 101 (5)
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So, you're driving along and see a sign "For Sale By Owner, Seller Financing". You check your rear view mirror because you don't have a bumper sticker that says "Caution, I stop at FSBO signs" then slam on the brakes and pull into the driveway. You get out and check out the house looking in the windows and checking the outside. It all looks promising. Then you call the number on the sign. As a buyer, what do you say and do next?
Again, knowing what to expect will give you an advantage. Expect the property to be... continue reading >>
Real Estate 101 (4)
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So, you want to sell a house and to get an edge in the market, you decide to sell it under an installment contract. Advertising the property with seller financing opens up the market to buyers who know that they can not purchase property in a conventional manner. The seller needs to proceed with caution in order to accomplish the ultimate goal, that being an actual sale.
The best place to begin is at the end of an installment transaction. Closing the deal means the buyer has obtained the necessary financing to pay you off. In order for that loan... continue reading >>
HAPPY THANKSGIVING!
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HAPPY THANKSGIVING TO ALL!
I hope that you and your family have a wonderful holiday! No matter where you are remember that you are fortunate, whether or not you have financial success. You have opportunities that most do not enjoy. I hope that you will have time with family and friends this holiday, but if not, know they will be thinking of you too. Keep in mind those less fortunate than yourself, there are so many worse off than yourself in your local area.
If you have time, consider assisting in your community, a homless shelter, hospital or a nursing... continue reading >>
Real Estate 101 (3)
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One of the most common and oldest methods of acquiring real estate is the "Installment Contract". This is any arrangement whereby the seller transfers an equitable interest of ownership to a property under a contract that provides for the transfer of the deed upon the buyer fulfilling the terms of the agreement. Thus, they are called a "Contract-For-Deed" or "Land Contract". These contracts are very popular and effective in accomplishing a purchase transaction in an affordable manner, they are also misused and subject of questionable practices, scams and fraud.
A property owner may have underlying financing, a... continue reading >>
BE A REAL ESTATE MILLIONAIRE!
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Remember Enron? The oil giant that overstated assets and artificially increased income that ended up ripping off stockholders and devasting lives? The accounting practices used were in violation of law and you know where some executives are now!
Years ago I watched a TV real estate guru tell people how they can make millions in real estate. I guess that is what turned me off to gurus. He used a deceptive practice of overstating the value of assets. Overstating assets immediately after a real estate purchase is how the "instant equity" is earned. That is the basis for selling their... continue reading >>
Real Estate 101 (2)
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With all the strategies used by real estate investors would you believe there are only three basic transactions in real estate?
To transfer an interest in or to real estate you can either give a property away, sell it or transfer the use of the property.
Why would someone give property away? There are benefits to gifting property. I won't get into estate planning but transferring property can save the owner or their estate from taxation. They may also give property away as a means to achieve some other goal. This is common among developers, where the developer transfers property... continue reading >>
REAL ESTATE 101
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There is always hesitation when we begin to do something new. I have taught real estate classes and have given free finance seminars years ago so while the subject matter here is not new to me, this media is. As I thought about starting this I realized that we all hesitate to get started in something that is new to us.
There is always a lack of confidence in doing something new. For me I guess it's the confidence in my writing skills, I know I tend to be very wordy sometimes. For you, it might be because you are... continue reading >>
Real Estate 101 (6)
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Let's continue with our analysis of the Contract For Deed from the buyer's point of view after a quick review.
The past two articles have addressed several key points. The equitable interest acquired under an installment agreement, how equity may be established and future loan requirements. The ability of the buyer to perform under the agreement hinges on qualification for future financing and how proof of payment is necessary to establish the credit history and equities paid.
Servicing of the contract by a trustee or third party is worth seeking, but if such services are not available payments should be... continue reading >>