Every Real Estate Investor Should Master

When you learn about something, when you are interested in new subjects, you also learn a whole new vocabulary you start using. Well, with real estate investing happens exactly the same. If you are a Real estate beginner or an experienced investor, you must understand and master all the terms and words of the investment vocabulary, especially acronyms, so here is a small list of every acronym a real estate investor should know:

1. PITI

Initials for: Principal (P), Interest (I), property Taxes (T) and Insurance (I). Essentially this means, the “bottom line” or the minimum amount needed when you estimate the acquisition of investment property with a loan. Frequently this is estimated monthly.

This amount is what you would might spend in the investment property over the life of the loan. Every and each month is the frequency of the PITI you have to pay in order to be in good standing. Thanks to this you will know how much rent you should pay.

2. GOI

GOI or Gross Operating Income, is related to the annual income that is collected from the property, including: laundry, parking, storage, etc. and consider any vacancies.

3. LTV

Initials for: Loan-to-Value, this is vital if you’re removing a loan on your investment property, it is estimated by dividing the loan by the property’s value; then, that number is expressed as a percentage. For example, to make it easy: if a loan is $200,000 and price of the property is $250,000, then the LTV is 80%.

You will have more equity in your property and negotiate more if the LTV is lower.

4. DCR

Initials for: Debt Coverage Ratio. This is referred to a commonly used term by lenders when they have to deal with underwriting loans for income-generating properties. How it is calculated? You need to divide the NOI (see below) by the total debt. If the ratios is 1.20 or higher, this is considered the average.

5. NOI

Initials for: Net Operating Income, this is the income left over from your rentals after paying all your monthly operating expenses. So, deduct your expenses from your GOI (Gross Operating Income) to get you the property’s NOI. For example, if you take in $20,000 in leases on all the units you have and spent $6,000 on maintenance including supplies, accounting, taxes, insurance, utilities and more, the NOI for the month was $2,000.

If you felt this information was useful and want to learn more about real estate. You can go to our Official Website and see all the incredible ways we have to offer to invest in real estate.

Real estate and how to avoid being scammed

 Last week, the California Bureau of Real Estate made an advisory to help consumers, especially senior citizens in order to avoid fraud on real estate for home loans, rentals, timeshares and property recordings.

Many people know how to trash unsolicited mail with official-looking seals that offer refinancing a home loan, take out a loan and find a place to rent or avoid foreclosure. But many people don’t know that exists a Department of Consumer Affairs where a consumer can recover accounts and present their cases on the California Bureau of Real Estate.

If you are an intentional fraud victim because of a California real estate licensee you can recover actual and direct losses up to $50,000 per business deal, with a total payout of $250,000 per licensee.

Want a tip? You can call the California Bureau of Real Estate at 1-877-373-4542 if you suspect you are a victim of real estate fraud.

In order to prevent those phone calls, we give you 10 fraud avoidance tips:

1) Be alert and don’t feel bad if you are suspicious of unwanted offers, suggestions and calls. Be careful with license numbers on mailings and websites.

2) Be in contact with the state business bureaus. Be smart and look for references. Do a research with the help of Google, Yelp or other websites to have important information about the company, and the most important: to see if they have a relation with other consumer scams or frauds.

3) Do not agree to pay money for a service, and always protect your personal info– specifically your SS number.

4) Avoid paying in advance for home loan or any foreclosure relief services.

5) If you can’t afford a property, never sign the agreement for that transaction.

6) Be totally suspicious if a real estate or home loan agreement is not clear, it is difficult to understand or encloses blank spaces. If an agreement has blank spaces it is easy to be manipulated for a scam artist.

7) Don’t sign your property over to somebody who claims such a transfer can and that he or she will help you with the reparation of your credit.

8) At no time sign a “power of attorney” to give any person or company the rights to your property if you don’t know them or trust.

9) Keep a track and always check the title to your real estate properties, if you detect something suspicious or fraud act immediately. Many signs can be related to: stop getting your property taxes, some real estate documents in the mail for operations you did not make or a notice of default of your home.

10) If you are the owner of an insurance policy on your property, contact the title company and check with them if you are protected against forged deeds or fictitious documents recorded after you bought the property.

Hope this tips help you, don’t hesitate to call if you see something suspicious. Check FCI if you are interested in real estate.

What is a mortgage pool?

Many times, when we are trying to learn more about the real estate world, we see many different words and expressions we are familiar to it, but do we really know what they mean? Really sure? Today, we are going to talk about mortgage pools. A mortgage pool is a group of mortgages in a mortgage-backed security (MBS) and held in trust as collateral for the issuance of this MBS.

Some people also know them as “pass-throughs” and trade in the to-be-announced (TBA) forward market. Click here, if you want more information about them.

How does it work? Here is an example:

Once a lender finishes a mortgage transaction, it usually sells the mortgage to another unit or entity. The entities or units that buy mortgages let’s say, Company A and Company B set hundreds of mortgages together into a mortgage pool. Then is when the mortgage pool acts as collateral for a mortgage-backed security.

Why is it important?

Pass-throughs or mortgage pools are involved with mortgages with close to the same maturity and interest rate. A MBS is collateralized by a mortgage pool. Mortgages pool usually have similar characteristics.

People have to be careful to not confuse MBSs with CDOs (collateralized debt obligations) because the last one is collateralized by a pool of loans with varying characteristics and they might have different terms (10-year, 15-year, 30-year) and adjustable rates.

 

How to obtain your first investment property

When talking about real estate we notice it is a very complicated subject. The problem is that it is very capital concentrated, especially for those who don’t have assets. The truth is that buying a good rental property is hard, but it is also possible.

Steps to acquire an investment property

Step 1: Learn and study everything about real estate

This is the toughest part but if you want to be successful you need to learn how real estate actually works. Read books, even if you only understand half of it, keep working through it and eventually you will understood most of it. If you don’t know a term google it but try a way to learn everything you can.

You will see that the beautiful thing about real estate is that there are different ways to make money (investing, brokering, research, tech, appraisals, renovations, etc.). That is real estate is a huge driver for the US and global economy.

Step 2: Commit yourself to own real estate

This is vital in the process. Not everybody comes from a wealthy family but that doesn´t mean you can own something, to be able to buy properties you have to be committed.

Embrace the fight, use it as motivation. If you are really committed, you will get it done.

Step 3: Develop a strategy

An attainable strategy for most people is to buy a single-family house with an investor and rent it out for income and price appreciation. This is just to start. Focus just on achievable goals.  Your strategy is to have goods that will cash flow. By the end of the year, the outlay must be less than what the property brings.

First, find a property: Go to Fci Exhange or other listing site and look what is on the market. Once you find a deal, make an offer.

Step 4: Find an investor

How? Well, talk about your goal to buy real estate. It can be seen as arrogant or even taboo, but this really works. You need to sound and look smart when talking about real estate and have a plan, people need to see that it works.

Final step: stay persistent

This step-by-step process is simple. You need to be patient in this business, you will have difficulties, bad tenants, renovation but don’t freak out and never quit.

The strategy to building this kind of longterm wealth is having interest work for you, not against you and buying rental property is the most achievable way to do this.

 

What you need to consider before purchasing non-performing notes?

Some years ago, banks would have been more persuaded to foreclose on a non-performing commercial real estate property. Nowadays there are more and more banks decided to sell their billions of dollars’ worth notes.

Why is this happening? Because banks are in the business of lending money, they don’t make money owning and operating real estate, besides, when the bank sells the note, it stays out of the chain of title and doesn’t have any concerns about the time—and expense—of other property management and ownership issues; and if you add to this the cost and energy of marketing the property to possible buyers following the foreclosure and the many existing properties already being carried on their books, there is a clear vision on why banks were looking for an alternative to foreclosures. Note selling has become a new alternative.

For people who become a buyer, the benefit of purchasing a non-performing note is simple and clear: they have the chance to acquire the loan and underlying property at a great discount from its initial price. After purchasing the note, the buyer has two options: to negotiate a new loan with the borrower, or foreclose on the property itself. It is more common that the buyer owns the site and forecloses.

Fci non-performing notes

 

There are many cases of buyer success in this depressed market. However, buyers must be aware of the business, if there are people wanting to buy non-performing notes in multifamily; they need to think about this:

1. Make sure you learn about all the foreclosure laws in the state in which the underlying asset is located. In some states, there are non-judicial foreclosures and the process can be a long one. But in other states, the process can drag on for quite some time.
2. Learn about the percentage of the multifamily asset that is leased and, of such leases, how many tenants are paying their rent consistently.
3. Find an effective way to get the original note and all related amendments and assignments.
4. Obtain as much information as possible from the lender about the asset before investing money on due-diligence investigations. The lenders have many files about each asset so you will probably have to push them to release the materials to you.
5. The situation of multifamily improvements is most of the times more critical than other property types since the turnover of leases is so frequent.

If you need more information, go to www.fciexchange.com to learn more about purchasing non-performing notes. Like us on facebook at Fci Exchange or follow us on twitter at @fciexchange.

How are you preparing for real estate’s new market reality?

You need to start to learn and understand! There are no more days when you could simply hand your clients information, now you need to explain them what are you sharing to them. It is said that there is a large gap between information and actionable knowledge.

Heart of a Teacher: This means that you shouldn’t be trying to convince someone to do something; you can help your clients trying to discover what their options are and let them make decisions that are best for them and their families.

Dave Ramsey says: “When getting help with money, whether it’s insurance, real estate or investments, you should always look for someone with the heart of a teacher, not the heart of a salesman”

Strong Visuals: People process visual information 60,000 times faster than text. With attention spams dropping, this can mean the difference between someone seeing and understanding your message versus missing it completely.

Go mobile or go home: Having visuals on your smartphone or tablet is just a way to earn the trust of your clients by confidently answering their questions wherever you are.

Keeping current is vital: In a day when market information and analysis are so important, staying on top of the changes and the impact they will have is perhaps most important.

For more information on real estate, go to www.fciexchange.com or follow us on twitter at @fciexchange

Are you considering real estate investment?

Some people may think that real estate investing involves risks but it also means investment success. Sometimes, what is most important in real estate, before the location, is the person who you are dealing with. In real estate most people will offer you “no-money” down methods of how to become a millionaire in a short time, but you and me know that not everyone is being honest.

Fci Exchange

If you are considering to invest in real estate property, you are going to need:

• Investment capital (of course)
• Knowledge of the real estate market and the neighborhood where the property is.
• Great administration and negotiating skills
• The ability to do repair work (it is easier than you think)

If you are not able to look for foreclosure houses, you will have to serve as a landlord for the property while it increases in value. When you rent your property you have to be very careful because the property must be well-maintained.

When talking about real estate investing, we are talking about having some money to make money, and for that you need available capital. This is why a lot of people go into real estate after coming into a sizable amount of money.

Another important thing to do is to research your location. You can start attending local town board meetings, do some research in libraries and go on the Internet to look for some data about the location today and the upcoming years.

Then you need to know about the REITs — Real Estate Investment Trusts. This is a way of investing in real estate for a lot less money and you don’t have to worry about fixing a tenant’s leaking bathroom pipes in the middle of the night.

REITS invest in many companies involved in real estate, ranging from industrial parks to shopping centers to construction companies. They work the same way as mutual funds, except they set up a diversified portfolio that deals only in real estate.

REITS have high and low periods, like: stocks, bonds and mutual funds, they can be strong investments over time and pay dividends. They are fairly liquid and are a much safer way of investing in real estate than buying property.

Ways to Succeed in Real Estate

If you are considering the idea about becoming a real estate investor you need to make sure to do your homework before jumping right in. Real estate investing can be enormously lucrative for those who approach it in the right way and learn how to stay ahead of the competition.

Step 1: Get Your Finances in Order

You need to have all your personal finances in order before making the first step to entering the real estate market, you need to consider this: while many investors see very lucrative returns from real estate transactions, you won’t receive those amounts of money  if you don’t have a required a solid plan and patience. Don’t underestimate or neglect to figure out all of the possible expenses that come along with buying property, such as renovations, utilities, maintenance, legal fees, etc. If you’ve decided to become an investor but don’t have resources stashed away to pay cash outright, you’ll have to consider financing options as well.

Step 2: Define your Role

There are diverse roles that investors can play in the market. Some select to be landlords and others buy exclusively to restore and resell. Knowing which type you prefer to be from the beginning will help narrow down the selection of properties in your local market to match your specific investment approach. It also it is about how much time they actually want to put into their real estate.

Step 3: Study the Market

Most successful real estate investors put an effort to study the location they do business in and know its history, neighborhoods, schools, transportation and planned developments like the back of their hand. They compare current prices in an area to understand where the demand for the property is as well as helps you to begin to distinguish fair from overpriced properties.

Step 4: Think Outside the Box

Finally, to be as efficient and successful as possible, there are numerous options to choose from, while you’re looking in your most desired locations, keep an eye out for signs of a developing area nearby. New construction can mean big returns if you get in on the ground floor of something that’s about to be a booming community.

Investing in real estate can be just as fun and exciting as it is profitable. Use your connections and local resources as much as possible to find your niche in the business.

So if you are thinking about investing in real estate, take a look to our website http://www.fciexchange.com

HOME BUYING AND SELLING LATEST TRENDS

 

1. Home Sell fast, no discounts: In most parts of the country the homes are selling really fast and they are being sold near or above the listed price so forget the days of low estimated offers on homes, sit back and wait for desperate sellers. In a latest study by ZipRealty about the market, homes have selling at or above the listing price and that included different states like San Francisco, Seattle and Washington DC.
2. More homes hit the market, but not enough: as home prices climb and more homeowners start to regain equity , home owners will be more likely to list their homes for sale, the number of homes for sale in US including condos had increased in the last months of the year, but you need to have reasonable expectations, price your house at the right price so you can sell it quickly.
3. Mortgage rates rise: the low rates have become part of history; however, rates are heading up and they are unlikely to return to the low levels again.
4. Say goodbye to rates in the 3 percent range and get use to rates in the 4 percent range. This means that as mortgage rise, shorter-term adjustable-rate mortgages may become more attractive to some homebuyers and refinancers.

                         

DO YOU KNOW THAT ONE OF THE MOST PERFECT PLACES TO INVEST MONEY IS ACTUALLY REAL ESTATE?

There is a ton of emotional sellers that you can make money off.

If you are looking to invest in real estate you need to have something clear: you can always find a deal as long as you look for it. If you have some fortitude and some patience, investing in real estate might be an excellent time to invest in real estate.

You don’t need to be experienced to learn about the deals and start connection to be successful. You can understand market trends and bargains so you will be more likely to make money.

You should only be bidding on properties that have been on the marketplace for 6 or more months, and you should always be cash-flow-positive with any property.

Don’t take features like schools districts for granted because homes with these types of desirable characteristics usually sell fast. Plus, homes with good school districts frequently have a lower crime rate.

You should consider another important fact, when you are looking to invest real estate, you are thinking about buying a new property and then selling it. But the truth of the matter is that buying and selling foreclosed properties is far more profitable than dealing with new ones. Why is that? When you buy a new property, you will be purchasing its value as its value market; however, with foreclosure properties you are buying far below the market value.

In conclusion, if you are looking to invest in real estate, there is always going to be an opportunity to you to earn money buying and selling properties. One of them can be find on http://www.fciexchange.com, dare yourself to start new things.