Refinancing is a simple process and is similar to applying for your first mortgage. Once you’ve been approved for a refinancing loan, the new lender will pay off the old mortgage loan, including any outstanding late charges or fees.

For homeowners who have more than 15% equity and whose mortgages are less than 90 days past due, refinancing is often an excellent way to stop foreclosure and regain financial control. Among other possible benefits, refinancing will:

- Stop foreclosure
- Roll in past-due mortgage payments and fees
- Lower mortgage interest rate
- Lower monthly mortgage payments
- Pay off higher-interest bills like credit cards
- Lower overall monthly payments by consolidating debts
- Improve credit by paying off delinquent accounts

For some homeowners hoping to stop foreclosure, mortgage refinancing may be the most attractive option.

Disadvantages of a Refinance:

1. Borrowers that do not have sufficient equity will not be able to refinance. Many homeowners who find themselves facing foreclosure have little or no equity in their homes. With home values dropping considerably, some homeowners find them selves “upside down”, or no equity (owing on the mortgage more than the house is worth), affecting a persons ability to refinance.

2. Interest-only payments or lower initial mortgage payments in an adjustable rate plan.

3. Generally speaking, it can be difficult for the borrower to refinance if the equity in the home is less than 15% of the value with a FICO score under 620. Lenders may require borrowers with credit problems and lower FICO scores have 25% equity.

Refinancing Example: Pete’s home is currently valued at $200,000. He will have difficulty arranging to refinance to stop foreclosure if there “mortgage payout” is more $170,000 on the home. Pete’s refinancing will become particularly problematic if their mortgage is more than 90 days past due, and then even greater equity may be required.

By: K. Patrice Williams

About the Author:
K. Patrice Williams has a BA in Economics as well as a law degree. She has successfully managed both residential and commercial multi-million dollar income producing assets and budgets for more than 10 years. As a 1st year law student, Patrice established a real estate development and consulting business and acquired over 30 rental properties. As the housing market values decreased- like millions of other Americans-her properties were negatively impacted by shifting ARM’s, combined by a sluggish economy. Patrice has researched and personally implemented almost all of the pre-foreclosure techniques detailed in the book: “6 Simple Steps to Avoid Foreclosure”. http://www.avoidforeclosuremanual.com

The bad news is that your low ball home offers are not likely to be accepted. The good news is that they work anyhow. Let’s look at why that is.

Most real estate sells for a bit less than the asking price, but a “low ball” offer on a home is one that’s lower than the usual discount. For example, if most of the homes in your area sell for two or three percent less than the asking price, and you try to get a house for 15% less, that will be considered a low ball offer. It will generally be frowned on by the real estate agent, which is irrelevant. If you have a good reason to do so, just make your offer.

What’s a good reason to make a low offer? It might be necessary. You may only be able to borrow a certain amount, and so you need a lower price for a given home. You might need to keep payments lower so you can get cash flow from a rental house. You might just want to buy low and sell for a profit. Whatever your personal or investment reasons, the idea is that you only get a deal if you ask. But will it work? Will the seller accept that low price? Very rarely, but that’s okay as long as you understand the process.

If you need a home right now, don’t go around offering 20% less than the asking prices. You probably don’t have time to waste trying to find that one-in-a-hundred sellers who will say yes. On the other hand, If you are an investor and it takes two months and a hundred offers to get a deal you can make $20,000 profit on, why not do it? Refine your technique and you might get one-in-thirty to say yes. That may sound like bad odds, but what if you made thirty offers per month? You would be making 12 profitable deals per year, right?

How To Make Low Ball Offers

Perhaps the most important point to make about low ball offers is that you don’t need to ever have one accepted to make money with them. That’s because a seller will often make a counter-offer. He is asking, $210,000, for example, you offer $162,000, and he comes back with $175,000. If that suit your purpose you say yes.

One of the primary functions of a low offer is to lower expectations. I was once trying to sell my car and the first offer I had was for half of what I was asking. I was shocked, and said no. But it got me doubting my estimate of value, and I was ready to accept almost any offer higher than that first one. That’s how the process works. Here are some other pointers.

Make a lot of offers. Some investors make offers without even looking at the houses to save time. They just write it up at 25% less than the asking price and include a good inspection clause so they can back out of the deal if the home has any serious issues. Of course most offers made this way are rejected, but the idea is to make the process efficient so that one-in-a-hundred can be found more quickly.

See uncertainty as an opportunity. Uncertainty does two things. It scares away buyers, or causes them to make really low offers. It simultaneously scares sellers into accepting less than they otherwise would. Both of these effects are good for an informed investor.

For example, I recently saw a fixer upper with a price of $50,000 get an offer for $5,000. The buyer probably guessed that it was worth more than that, but was uncertain about the repair costs. The seller said no, but was now probably even less certain about the asking price. An investor with the skills and knowledge to say with some confidence, “That will take $20,000 to fix up and will sell for $90,000, might have profitable buy at $30,000 (and the seller might jump on that offer after the first one).

With unique properties uncertainty is a given. This is why Donald Trump was able to buy a 25 million dollar home for 5 million, and why Richard Branson could buy a 3 million pound Caribbean island for just 180,000 pounds. With both islands and high-priced estates nobody can say for certain what the value is. The lesson is to go low when the property is not easily priced.

In fact, some uncertainty is almost a requirement. Why would a seller ever accept 20% less on a home if it is the similar to the other homes around it and they are all selling for close to asking price or appraised value? In other words, choose the right homes to make these offers on if you want to do better than one-in-a-thousand. The right homes include homes that are unique, have problems, have been on the market a while, have very motivated sellers, or have just been listed.

Let the sellers know why they should accept your low offers. List the problems you see, especially those that the sellers may not be aware of. But do this on paper; don’t confront sellers with their home’s flaws. You want to be nice. In fact, apart from the price, give them anything they want if it won’t cost you much, like a fast closing, time to move, or a higher interest rate if seller financing is involved (and especially if you’ll be selling soon anyhow).

To sum up, your goal is to get some of your low ball home offers accepted (maybe just one). So choose the right homes to begin with, see the first offer as a negotiating ploy, and be nice to the seller. Then keep trying until you have a deal.

By: Steven Gillman

About the Author:
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

Landlording and property management can be a great business to get into. There are many benefits to owning and renting out homes. It does not matter if you invest in one home or have many homes to rent out. The more homes, the more benefits, and if you know how to manage the properties and use those for tax advantages, then you will be very successful in investing.

Owning a rental property can be fun and rewarding. For many investors it gives them a sense of power and control over their destiny. For others it is fun and exciting and keeps them occupied. For all it is about the long-term benefits, the profits and sometimes the taxes. In some cases there are ways that you can avoid paying taxes on a rental property that you choose to sell.

A lot of investors like the additional income they receive from tenants, especially if the rental property is paid off and the rent is all profit. If you have a fixed mortgage on the home, then your payment will not change over time with inflation. However, the rental amount will increase with inflation, causing an increase in your profit margin every few years. One tax benefit does not have to pay taxes at all if you sell the home. A 1032 can be filled out when a home is sold that allows the seller not to pay taxes on the capital gains from the sale. The rule here though is that the next home you buy it has to be purchased for more than what you sold the other home for. Basically you have to be upgrading.

Having ownership of rental proprieties come with certain pluses. Although landlording and property management is not for everyone, if you know what you are doing, then it can be rewarding. One of the greatest things is that by owning rental properties you are creating a constant cash flow when they are occupied by paying tenants. You can build a great and profitable asset portfolio of homes and in 10-15 years sell them and cash out, making a large amount of money from the equity.

If you currently own a rental property or are thinking about lanlording and property management, then you can see there are many benefits to it. Most of them are all the same across the board. States do, however, all have their own sets of rules for taxes and may have some incentives of their own, but most of them are the same, too. Finding the best home to invest in and finding good tenants are just a few things that will ensure that all the benefits that can come from owning and renting property are there. Obviously purchasing a home cheaply and being able to rent it out for more than the mortgage is ideal. The key is that the longer you can hang onto the homes, then the bigger the money profits will be for you.

By: Jennifer Minge

About the Author:
For landlords to overcome these challenges then they need to focus on retaining the good quality tenants that they have today. For advice on how to retain existing tenants visit landlord success guide that shows you how to do this. For other advice on real estate investing and property management visit our website.

Unfortunately today there are many people who seem to think that getting involved in real estate investing means that they simply purchase a home and then sell it trying to make a good profit. This is not the case. You need a good real estate education if you are truly going to become a savvy investor. People who make any money at all without a good real estate education really are merely lucky and sooner or later they’ll end up dealing with problems that will show how shallow their investing knowledge really is. A good education in investing can really help you to avoid a lot of problems in the future.

Although it used to be a bit easier to invest in investment properties, it’s quite a bit harder now. It’s more difficult to find great properties, especially with the people who want to just make a quick buck. It’s important that you get the real estate education that can help you find great properties so you can be sure that you make money on the investment. Of course home inspections come along as well, and a good education can help you to determine if the home is really a great buy and you’ll learn how to deal with home inspections.

Often there are people who get started in real estate investing and they get so excited that they forget about a great education and about looking into repairs that are needed, and then they end up losing money in the long run. You’ll also find that financing can be difficult to find without a good education as well, and you need to really know what you are doing if you are going to borrow money to invest with. So, as you can see, it is imperative that you get a great real estate investment education if you want to make the most of your investments. Otherwise you’ll end up dealing with problems, wasting your own time, and wasting your own money as well, which can be a very painful lesson.

There is no excuse for not having a good landlording education behind you, since there are so many different options available where you can get excellent information. Here are just a few of the budding landlord options that you have to learn more about purchasing real estate and selling it for a profit.

Option #1 – Real Estate Seminars – First of all, you have seminars, which are a great option for education that will help you learn more about property investing, how it works, and how to invest wisely. Usually you’ll find that there are seminars all around the country, so finding one near you should not be difficult. Some of them may cost you, but they are great investments and you’ll even find that there are other seminars that won’t cost you a cent.

Option #2 -Courses – courses are another great option when you need a good education. You can take courses at a community college and some colleges may offer online classes that you can take as well. They will provide you with a great base in real estate so that you are able to go out and have the education needed to become a savvy investor that can really make a great profit from your investments.

Option #3 – Online Investing – Online investing sites can be found as well. Some have great information available and others will have teaching tools that will help you to learn how to make the right real estate investing choices. These are great options for you if you don’t have the time or money to actually take courses in real estate.

Option #4 – Forums – All you have to do is look online and you’ll find that there are many great forums out there that cater to people who are interested in investing. These forums are full of people who have already become successful investors in the investment property market. You can read through topics, ask questions, and read responses that will help you learn even more about real estate investing. Getting involved in a forum can help you to find successful investors that are willing to share tricks of the trade that will educate you and help you to become successful yourself in the real estate investing business.

Option #5 – Mentor – Finding a good mentor can be a great education in itself. You’ll find that there are many successful investors out there that are willing to mentor other investors who want to learn. Some of the best education in this market can come from mentors that help you along the way as you start out in the landlording business.

Option #6 – Actually Purchasing a property – Of course once you get other forms of education, you’ll find that purchasing homes, duplexes or apartments and going through the investing process will teach you a lot. While you can get a lot of great education that will help you to become a successful investor, you’ll also find that purchasing real estate yourself will teach you practical lessons that you won’t ever forget.

By: John Mazzara

About the Author:
Minnesota mortgage broker Venture Development is owned by John Mazzara
http://www.ventureloanapp.com
952-285-4319

We are located in Edina Minnesota and service the Twin Cities (Minneapolis/St Paul) and Greater Minnesota. We provide MN mortgage loan financing to buyers for relocation, move up buyers, investment property purchase, home equity lines of credit, second homes, new construction, rehab financing, reverse mortgage purchases, major remodeling, refinancing, debt consolidation, no closing cost loans, adjustable rate financing, VA financing, FHA, ARM’s, interest only, conventional fixed rates-30 year, 20 year, 15 year, 10 year. John also is a RE/MAX real estate broker associate at http://www.selling.mn

Besides beginning your online search immediately, you will be able to do research on the Cities surrounding Minneapolis/St Paul such as Eden Praire, Richfield, St Louis Park, Savage, New Hope, Robbinsdale, Maple Grove, Plymouth, Prior Lake, Eagan, Mendota Heights, Minnetonka, Lake Mtka, Lake Minnetonka, Lake Calhoun, Lake Nokomis, Lake Harriet, Lake Of The Isles

Liquidation options can help reduce the negative effect on your credit reputation. There are several different ways this might occur depending upon your financial circumstances. If you simply can’t afford to stay in your home and haven’t been able to sell it, you may qualify sell or “short sale” your home. Liquidation options include:

1) Selling your home. To consider this option, research the “sold for” numbers, or comparisons “comps” of similar homes in your neighborhood. Ignore the LISTING PRICES unless you live in a submarket that is not falling in real estate values. Complete this research by calling your local Realtor or checking the internet at a home value website. It is essential that sellers, realistically understand that houses in some market are taking up to 11 months to sell.

Selling your Home Example:
Be careful when listing with a Realtor. John, a real estate investor, almost lost an investment property to foreclosure due to Realtors trying to get the listing by enticing me into listing my home for the “top dollar” which would net them the “top commission”. Often incoming offers did not have enough equity to cover the mortgage and their commissions. Be sure that your realtor is looking at your best interest 1st, theirs 2nd.

2. Short Sale. If you can sell your house but the sale proceeds are less than the total amount you owe on your mortgage loan, the lender may agree to a short sale payoff or “short sale” and write off the portion of the borrower’s mortgage that exceeds the net proceeds from the sale. When a borrower receives a short sale offer, the borrower should contact the lender immediately. The lender normally takes them a month or two to consider the short sale settlement.

Disadvantages of a Short Sale:

o Sometimes the lender can take a long time to consider a short sale offer, in the meantime, your foreclosure clock is still running and the seller may tire of waiting and go to another house.

o Possible tax considerations, talk to your tax accountant about the 1099 ordinary income for the gift of forgiven loans, as well as the insolvency exceptions.

o Problematic option if you have a 2nd or 3rd loan, line of credit secured by the property. Although the 1st lien holder of the property may agree to a deed-in-lieu of foreclosure the subsequent lien holder have not. The subsequent lien holder loans can become unsecured debt that is attached to and stay with the borrower to pay off.

Short Sale Example: Sharon’s and her husband George separated. George left Sharon with the entire mortgage to pay. Sharon was not able to pay the mortgage by herself and decided to put the home up for sale. The payoff amount of the mortgage was $575,000. Ricky Realtor advised Sharon that her home value was $500,000. Sharon decided to put her home on the market, but attempt to sell it as a short sale. After 5 weeks, Sharon received an offer for $490,000. Ricky Realtor submitted the offer to the lender. The lender took the offer for $490,000, agreeing to take less than the payoff in the mortgage.

By: K. Patrice Williams

About the Author:
K. Patrice Williams has a BA in Economics as well as a law degree. She has successfully managed both residential and commercial multi-million dollar income producing assets and budgets for more than 10 years. As a 1st year law student, Patrice established a real estate development and consulting business and acquired over 30 rental properties. As the housing market values decreased- like millions of other Americans-her properties were negatively impacted by shifting ARM’s, combined by a sluggish economy. Patrice has researched and personally implemented almost all of the pre-foreclosure techniques detailed in the book: “6 Simple Steps to Avoid Foreclosure”. http://www.avoidforeclosuremanual.com

“First-Time Landlord: Your Guide to Renting Out a Single-Family Home” by Attorney Janet Portman, Marcia Stewart, and Michael Molinski is one of the NOLO/USA TODAY collaborations that are described as the leading publisher of legal information for consumers teamed with the nation’s largest circulation newspaper, to produce great books that feature up-to-date legal and financial expertise, a reader-friendly style, and USA Today’s famous graphics. I find these books to be just that, a great series of books and this one is no exception. I liked it and found it very practical.

“First-Time Landlord” provides a very good overview of being a landlord of a single-family home, and much of the information is relevant for other types of properties as well. The book is easy to read, organized well, and contains all of the basic topics you should know if you desire to be a landlord. However, for some topics, you will want more detailed and in-depth information and will have to look to other resources. In fact, there are several places in this book where they refer the reader to “Every Landlord’s Legal Guide” also published by Nolo. (I own and have reviewed that book and think it would be an excellent companion to this one)

This book covers the following topics:

One: Is Owning Rental Property for You? This chapter focuses on the good and bad parts of being a landlord and gets you thinking about why you want to be a landlord, what kind of property, what your profit may be, and what your goals are.

Two: So Happy Together: Landlording With Family or Friends. Should you be a landlord with a friend or family member? This chapter will help you decide, and provide guidance on how to do it.

Three: Preparing and Marketing Your Rental Property. This chapter is an overview on making sure your property is in rentable or better condition and then how you should go about advertising and showing it.

Four: Screening and Choosing Good Tenants. Remember the movie “Pacific Heights” where Michael Keaton terrorized his landlords Melanie Griffith and Matthew Modine? You don’t need a tenant that bad to realize the difference good tenants and bad can have on you being a landlord. This chapter will help you find good ones.

Five: Preparing a Lease and getting the Tenant Moved In. This chapter provides some information on lease and rental agreements but is one of the chapters that refers you elsewhere for assistance in drafting the document you choose. Good chapter for introduction to topic.

Six: Manage Your Rental Income to Maximize Tax Deductions. Because tax laws change so often, I recommend you use this chapter, which has some good advice, as a starting point to know what to talk about with your tax adviser. It is good basic advice, but you should seek professional advice from someone in your state and who keeps on top of all of the changes.

Seven: Keeping Things Shipshape: Repairs and Maintenance. If you own it, you are going to have to deal with fixing it. This chapter provides some good advice on the legalities of your obligations as well as some suggestions on adopting a good maintenance and repair system. For those not into handyman activities, the provide some information on hiring someone else to do the work.

Eight: Landlord Liability for Injuries, Crimes, and More. This chapter provides some basic information regarding liability for tenant injuries, environmental health hazards, crimes and some guidance on insurance. Every landlord need to be aware of these issues and unfortunately may have to seek further information if something bad happens.

Nine: Living in Perfect Harmony? Dealing With Difficult Tenants. You will not always have ideal tenants, and even if you do some problems may arise. This chapter has some good basic information on common problems and some suggestions on methods to resolve disputes. I’m glad they listed mediation, because as a mediator, I feel this is a great way for disputes to be resolved, rather than entering more expensive litigation. I would suggest learning more about the topics in this chapter from other resources since it could be very important during your time as a landlord.

Ten: Don’t Want to Do It Alone? Hiring a Property Manager. This chapter explains what a property manager does, and helps you determine if hiring a property manager is right for you. If it is, this chapter provides some guidance on how to find a good one.

Eleven: Read to Quit? Exiting the Rental Property Business. All good things come to an end, and this final chapter will help you plan your exit strategy. Good things to consider when you are ready to sell.

No one book has everything you need to know about the real estate business. However, if you are thinking about becoming a landlord, this is an excellent starter text to provide you with solid basic information. After reading this book you will be able to determine if you really want to be a landlord and will have the knowledge to get started. You will then probably want to invest in more real estate/landlord resources. This one is an excellent start!

By: Alain Burrese

About the Author:
Alain Burrese, J.D. is a mediator/attorney and an author/speaker through his own company Burrese Enterprises Inc. He teaches people to live with the warrior’s edge and make things happen through his writing and speaking on a variety of topics focusing on the business areas of negotiation and success principles as well as self-defense and safety topics. He is the author of Hard-Won Wisdom From the School of Hard Knocks, several instructional dvds, and numerous articles. You can find out more about Alain Burrese and read many more reviews, articles and more at his website http://www.burrese.com

As long as you have positive cash flow, rental homes are a great long-term way to make money in real estate. It is an inflation adjusted retirement plan, since rent – and so your income – goes up with inflation. The downside? Landlording isn’t much fun, and you typically wait a long time for the big pay-off.

Many people confuse making money from rental homes with making money speculating on price appreciation. You can certainly get do both with rental homes. However, this desire to gamble on rising prices leads many to buy rental homes that have more money going out than coming in.

It is hard to argue that you shouldn’t do this if you just sold a home for $120,000 that you bought for $90,000 two years ago – even if you had negative cash flow of $3,000 per year. This is risky, however. You could quickly find yourself in trouble if you own several such investments and they don’t go up in value.

Another important point is that there is a limit to how many negative-cash-flow homes you can own. At a loss of $3,000 per year, how many can YOU afford? On the other hand, if your rental homes are paying for themselves and even throwing off some real cash flow, you can own any number of them, right. The more the better!

Obviously, then, my number one recommendation is to buy rental homes that will have positive cash flow from the first month you own them. Think about this for a moment. If you bought a home for $90,000 and thirty years later it DROPS in value to $60,000, but meanwhile you paid off the loan and had cash flow the whole time, you’re doing great. You have $60,000 cash whenever you want to sell, and better cash flow now that the loan payments are done. That is much more secure than gambling on appreciation while losing money – but you still get any appreciation gains anyhow.

Rental Houses – The How To

Being a landlord and making money with rental homes is a big job. There are many great books that can help you avoid the hardest kind of learning – learning from your own mistakes. I recommend getting educated. In the meantime, here are some common mistakes that investors make with rental homes. Watch out for these.

Mistake : Not accounting for all expenses.

You hear something like this all the time: “The mortgage is $800, and the rent is $900, so my cash flow is $100 per month.” You even see real estate books and course that fall prey to this kind of fast and sloppy accounting. Cash flow is what you have (or hope to have) after all your regular expenses, which include taxes, insurance, maintenance, repairs, water bills, utility bills between tenants, garbage collection, advertising costs, and anything else that it costs to have that home.

Mistake : Assuming too much income.

If the rent is $1,000 per month, the rental income for the year will be $12,000, right? Only if you are very lucky! You have to plan on some vacancies. If tenants in the area stay around for a year on average, and it takes a month to clean and re-rent a home, plan on $1,000 less, or $11,000 annual income.

Mistake : Saving money by not repairing things or making necessary safety improvements.

This short term way to increase cash flow is often referred to as slumlording. Long term, it means not just lower rental income for you, but more problem tenants. Consider the math and you’ll see the logic of having a nice place. New carpet and repairing a dangerous porch might cost $3,000, but if you roll it into a refinancing (let’s say a 7% 30-year loan) it adds just $20 per month to your expenses. Even on a credit card it might cost you only $60 per month. You might be able to get that much more in rent for a nicer place, and you’ll have fewer problems.
Mistake : Not doing a background check on prospective tenants.

I once rented to a woman who admitted to doing jail time for driving without insurance. She seemed very honest and up front about it, so I didn’t investigate further. I later discovered that she actually had been arrested for writing bad checks – a lot more relevant information for a landlord. She ended up in jail again, and was of course unable to pay rent. I could have gotten a simple criminal background check and avoided the problem. Check out those tenants.
Mistake : Trying to do too much by yourself.

If you want to have just a few rentals and you enjoy fixing toilets and arguing with late-paying renters, you can do everything yourself. However, if you want to be a real estate investor and really make some money, your time is better spent finding and buying new properties than repairing broken windows. How many properties could you handle if you did everything yourself? Hire help when you need it.

Can You Get Cash Flow?

Probably the biggest problem with buying single-family homes is that it can be tough to get positive cash flow. This has become a bigger problem recently, because for years now the prices of homes have been rising faster than rents. What can you do about this?

First of all, I don’t recommend the common practice of buying properties that lose money every month, on the assumption that you can make your profit when you sell them in a couple years. This strategy is about to get a lot of investors in trouble soon, because home prices in many areas have stopped rising or even started falling (I’m writing this in December of 2006).

Also, how many negative income streams can your regular paycheck support? This is always a problem with investing in properties with negative cash flow. With positive cash flow, you can own as many as you want.

One way to get that positive cash flow is to invest in mobile homes on land. These often rent for close to what small homes get, but cost less than half as much. Other ways to get positive cash flow involve either finding ways to reduce expenses or increase income, or both. Here are some ways to do that:

1. Lower payments.

If you can’t get a lower interest rate from the bank, see if you can get seller financing. Also, amortize the loan over 30 years, not 15.

2. Lower operating costs.

Look for any unnecessary expenses that the property has,but which can be cut. These might include getting a cheaper management company, finding cheaper insurance, and getting the property taxes lowered if the property is over-assessed.

3. Raise rent.

Check area rents to see if an increase is feasible. Make improvements that will enable you to raise the rent more than enough to cover the cost of financing those improvements.

4. Lease it with an option.

You can often collect higher-than-market rent when you lease a home and give the renters an option to buy it.

Buying single-family homes as rentals is one of the easier ways to get started in real estate investing. If you do it only when and where you can get positive cash flow, it is also a very safe way to invest. Another big advantage it has, is that you have two markets for your properties when you are ready to sell them – both investors and regular home buyers.

By: Steven Gillman

About the Author:
Copyright Steve Gillman. For a Free Real Estate Investing Course, and to see a photo of the home we bought for $17,500, visit: http://www.HousesUnderFiftyThousand.com

For many real estate opportunity seekers of 2006, the reality of a quick-flip at market-high prices is beyond a glimmer of hope. With mounting negative cash flow from holding an over-priced property for months on end, the hold and wait recipe has now transitioned to renting until the market bounces back to pre-2006 price levels. Applying a tourniquet to cash wounds is number one for home sellers who thought the market would return for over-priced properties with the spring market in 2007.

Tread carefully, advises Mark Nash, author of 1001 Tips for Buying and Selling a Home. That newly renovated and freshly painted short-term investment could become an expanding financial nightmare if not managed properly as a rental. Novices to landlording should remember that finding the right tenant to care take their investment should be their number one priority.

-All prospective tenants should complete a lease application that includes a release for a credit check.
Don’t skimp on a credit and previous landlord reference verification.

-Security deposits are non-negotiable. Reducing or omitting one will cost you plenty down the road.

-Forget pets. People can be rough enough on property, pets add to the wear and tear.

-If you plan to market and show the property near the end of the lease term, plan on having the
tenants vacate before showing begins. Tenants don’t care if you sell, they’ll block showings and leave
beds unmade and dirty dishes in the sink.

-Consider short-term rentals for the newly relocated, home owners renovating their home,
or those”homeless” after exiting their last and gaining possession on their next, or the growing number
of ex-homeowners that are going through a life change such as divorce, death of a spouse or partner
or wait-listed for a skilled-care facility.

-If you’re new to landlording, contemplate hiring a property management company to interview, lease
and manage your rental day-to-day. They’re experienced in the pleasures and pitfalls of rental
properties.

-Factor in that renting your buyer-beautiful home won’t bring you positive cash flow, it will just soften
the financial hit you’ve been taking.

-If you’re not up to renting, bite the bullet, look seriously at sold comparable’s from the last six months,
and price your home right, and it will likely sell. Maybe not at that big fat profit you were looking for,
but the monthly hemorrhaging will stop.

Copyright 2007 All Rights Reserved. Mark Nash

By: Mark Nash

About the Author:
Mark Nash is a Chicago based residential real estate author, broker and columnist. His advice, analysis and tips have been featured on: Bloomberg TV, CBS News, CNN, Fox News Channel, NBC News, The New York Time, The Washington Post, Business Week, Parade, and Smart Money Magazines, The Library of Congress, Washington, D. C., http://www.HGTV.com, and http://www.RealtyTimes.com. Nash’s annual survey “What’s In, What’s Out with Homebuyers” is utilized by more than 500 news organizations in the U.S. and Canada.