The first thing you need to know is that people that are new to the property management business (read: landlords) FAIL within the first year.
Being a landlord is simple... it's just not easy. You have to put in the hard work AND make sure you have a decent reserve of savings for the expenses you couldn't possibly foresee, particularly because you don't know what you are doing yet!
Most people decide to become a landlord while they are still working a 40-hour per week gig! The pitfalls are obvious; you won't have a lot of time to devote to responding to prospective renters, showing your property, running credit reports, checking with their employers, dealing with maintenance requests, screening vendors... and on and on...
If you aren't able to do the work up front, how could you possible do the work required to evict a bad tenant? Not to mention the costs associated with eviction and the money lost as property owner.
Pitfall 1: The biggest mistake you can make as a new landlord is to accept the first potential tenant that comes along because you are worried about paying the mortgage. This desperate outlook can cost you big time down the road.
Do not be desperate! This will kill your chances at being a successful landlord!
If you are really interested in becoming a great landlord and are just starting out, you may want to hire a professional property management company. That way, you can learn through watching. Let them screen tenants, handle phone calls in the middle of the night, deal with evictions, court and collecting back rent.
The cost is usually somewhere between 5% and 10% depending on where you live and how many responsibilities the property management firm handles in the contract. Although this price may seem high, it is nothing compared to what it will cost you to not know how to run your property efficiently (to say nothing about having to unload it quickly because you can't cover the mortgage).
Pitfall 2: Not having enough cash to cover unexpected expenses. You cannot just assume that the rent you charge will cover your monthly expenses. You better bet that there are costs you can't possibly foresee as a new manager that will arise. And as Murphy's Law dictates, it will always happen when you lease expect it!
Let me give you a hypothetical: Let's say you take the first prospect that comes along. She's happily paying her $1200 rent every month when all of a sudden, she stops paying (beautiful girls in Hollywood think they can get away with anything!)... suddenly you are put into the position of having to evict this young starlet... which you didn't predict taking nearly 3 months and time off work to show up in court and the time it takes you to file for a Writ of Judgment (more on that in another article), etc... and before you know it, you are $3600 short on back rent and another $600 in the hole for court costs! Whoops! Hadn't thought that far ahead, had you?
And, well, young Miss Garbot didn't care for the way you wouldn't give her special late rent privileges so she also dug her fingernails down the walls in your apartment... it's always the beautiful ones with the flawed logic! ☺ After 4 weeks and another $1550 to get the glitter out of the carpet and make the unit rentable, you begin listing your unit again and if you are lucky, you are able to begin collecting rent again about 5 months later. But remember, during this time without rental income, you are still paying for utilities, the mortgage, taxes, court costs and janitorial services... You could lost upwards of $10,000 if you aren't careful!
You have got to set some money aside to survive these types of situations if you want to make it as a landlord. And if you are able to, it is often advisable to borrow a minimal amount of mortgage so your payments are lower, allowing more positive cash flow. This will make it less painful when these unexpected costs raise their ugly heads.
Sunday, July 5, 2009
Loan Modifications and the Making Home Affordable Plan
Fiscal Establishments are getting better at processing loan modifications. For awhile it looked there there wasn't much action to support the PR that lenders offered. Now things are getting to standard speed. It simply took longer than predicted to line up the staff and processes needed to deal with the flood of borrowers who wish to have a mortgage modification. Banks are much better supplied now and a lot of them are making good religion attempts to help.
But that isn't the full picture. Even though lenders are now getting more alterations complete, they are inclining to change loans whose adjustment will cost them the least in revenue or auto loans after bankruptcy that were so patently defective to start with that they would have have been thrown out if they hit a judge's bench. Any bank that is caught with its documents down will quickly agree to a modification.
That is why the Making Home Affordable Plan is so vital. It addresses millions of homeowners whose loans are clean and legal or whose adjustment might otherwise cost the banks dearly. These are the people who've been getting the cold shoulder so far because they are close to making it without any help at all. These are the families that have been getting fell for loan alterations - the banks have been simply demanding continued payment.
How does the Making Home Affordable Plan {work?
First, your home loan payment must be no more than 38% of your monthly revenue. If you are over that percentage, the bank can either agree to take the first hit and reduce the mortgage to this benchmark out of its own pocket, or pass on doing the modification. So if your home loan payment is at or below 38% of your monthly revenue then your chances of being approved for the program are better. If your payment is well above 38% - it isn't so good. Banks get to pick which loans to change on this program, so it's natural that they will wish to provide alterations to loans that start out below the 38% mark {first.
This indicates that banks will tend toward modifying either smaller loans or auto loans made to folks with decent, stable incomes.
But that isn't the full picture. Even though lenders are now getting more alterations complete, they are inclining to change loans whose adjustment will cost them the least in revenue or auto loans after bankruptcy that were so patently defective to start with that they would have have been thrown out if they hit a judge's bench. Any bank that is caught with its documents down will quickly agree to a modification.
That is why the Making Home Affordable Plan is so vital. It addresses millions of homeowners whose loans are clean and legal or whose adjustment might otherwise cost the banks dearly. These are the people who've been getting the cold shoulder so far because they are close to making it without any help at all. These are the families that have been getting fell for loan alterations - the banks have been simply demanding continued payment.
How does the Making Home Affordable Plan {work?
First, your home loan payment must be no more than 38% of your monthly revenue. If you are over that percentage, the bank can either agree to take the first hit and reduce the mortgage to this benchmark out of its own pocket, or pass on doing the modification. So if your home loan payment is at or below 38% of your monthly revenue then your chances of being approved for the program are better. If your payment is well above 38% - it isn't so good. Banks get to pick which loans to change on this program, so it's natural that they will wish to provide alterations to loans that start out below the 38% mark {first.
This indicates that banks will tend toward modifying either smaller loans or auto loans made to folks with decent, stable incomes.
Issaquah Real Estate - Investing In Your Future Today
You have probably been hearing over the news that mortgage and real estate market is depressing. People are losing homes, which is bad but instead of dwelling on the negative effects of this in our economy, we should start thinking that this can also be good for you. And how can this be good to you? Housing prices are getting lower. When we talk about investment, for some people it's pretty simple - "buy low, sell high". Since homes are being sold in lower prices, you can sell them in the future higher than the amount you've paid for.
Now could be the best time for you to buy a perfectly nice home while prices have dropped to its lowest, especially if you are a first time home buyer. Now is your chance to get a great deal and put an investment in a house. Don't waste your opportunity and wait for a year to buy your dream home. Prices can go back up to 20% or you can just lose your return of investment. In this case, you wouldn't be able to afford the house you've always dreamed of.
On the other hand, if you wait to buy a home in a year, prices may go back up 20% or more, And if that's the case, you may not be able to afford the home you really wanted, or you just lost out on a 20% return on your investment, and that's not fun. Another thing that you need to keep in mind is that it's much easier to get a mortgage right now because of the incredibly low interest rates. Also if you want a lower priced home, then you need less of a loan.
Putting your money in an investment property like a multiple home property best for an apartment building is a great deal these days too! Take a hold of this once in a lifetime opportunity and hurry. Grab your real estate dream while the prices are still low. Remember - buy low, sell high.
Now could be the best time for you to buy a perfectly nice home while prices have dropped to its lowest, especially if you are a first time home buyer. Now is your chance to get a great deal and put an investment in a house. Don't waste your opportunity and wait for a year to buy your dream home. Prices can go back up to 20% or you can just lose your return of investment. In this case, you wouldn't be able to afford the house you've always dreamed of.
On the other hand, if you wait to buy a home in a year, prices may go back up 20% or more, And if that's the case, you may not be able to afford the home you really wanted, or you just lost out on a 20% return on your investment, and that's not fun. Another thing that you need to keep in mind is that it's much easier to get a mortgage right now because of the incredibly low interest rates. Also if you want a lower priced home, then you need less of a loan.
Putting your money in an investment property like a multiple home property best for an apartment building is a great deal these days too! Take a hold of this once in a lifetime opportunity and hurry. Grab your real estate dream while the prices are still low. Remember - buy low, sell high.
Friday, July 3, 2009
Obama Refinance Plan How it Works and Will You Qualify
If you are a homeowner who is struggling to make your monthly mortgage payments, missed payments or are even facing foreclosure, the Obama refinance plan may help you get the financial reflief that you need.
The plan was designed to stop the surge of foreclosures across America. It gives lenders and more incentives to provide loan modification for homeowners who qualify. How do you qualify?
Answer these questions:
A. Is your home your primary residence?
B. Is the amount you owe on your first mortgage equal to or less than $729,750?
C. Are you having trouble paying your mortgage?
D. Did you get your current mortgage before January 1, 2009?
If you answered yes to these questions, so far you are a good candidate for this program.
Here is some more information:
* Modifications may be available for borrowers who are delinquent (including those currently in foreclosure) or for borrowers facing the imminent risk of default because of a documented inability to continue making their current monthly payments. * The property must be occupied as the borrower's primary residence and most property types are eligible including, one- to four-unit properties, condominiums, co-ops, and manufactured homes. * Mortgages originated on or before January 1, 2009 are eligible and the unpaid pre-modification principal balance can be as high as $729,750 (more for two- to four-unit properties).
If you are eligible for this program, you will be able to lower your monthly mortgage payment to no more than 31% of you total monthly net income. This will be accomplished in the following ways:
- First, reduce the interest rate to as low as 2%, - Next, if necessary, extend the loan term to 40 years, -Finally, if necessary, forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.
This is a great program for those who qualify. If you want more information on this program and assistance to increase your chances of acceptance, just visit the links below.
The plan was designed to stop the surge of foreclosures across America. It gives lenders and more incentives to provide loan modification for homeowners who qualify. How do you qualify?
Answer these questions:
A. Is your home your primary residence?
B. Is the amount you owe on your first mortgage equal to or less than $729,750?
C. Are you having trouble paying your mortgage?
D. Did you get your current mortgage before January 1, 2009?
If you answered yes to these questions, so far you are a good candidate for this program.
Here is some more information:
* Modifications may be available for borrowers who are delinquent (including those currently in foreclosure) or for borrowers facing the imminent risk of default because of a documented inability to continue making their current monthly payments. * The property must be occupied as the borrower's primary residence and most property types are eligible including, one- to four-unit properties, condominiums, co-ops, and manufactured homes. * Mortgages originated on or before January 1, 2009 are eligible and the unpaid pre-modification principal balance can be as high as $729,750 (more for two- to four-unit properties).
If you are eligible for this program, you will be able to lower your monthly mortgage payment to no more than 31% of you total monthly net income. This will be accomplished in the following ways:
- First, reduce the interest rate to as low as 2%, - Next, if necessary, extend the loan term to 40 years, -Finally, if necessary, forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.
This is a great program for those who qualify. If you want more information on this program and assistance to increase your chances of acceptance, just visit the links below.
Obamas Mortgage Plan How Do You Qualfiy
If you are looking for information on Obama's mortgage plan, you've come to the right place. Here you will find out all the requirements for this plan. Meeting the requirements is the easy part, actually getting the file approved by your lender is another story...
For Obama's mortgage plan, you need to meet the following requirements:
1.Modifications may be available for borrowers who are delinquent (including those currently in foreclosure) or for borrowers facing the imminent risk of default because of a documented inability to continue making their current monthly payments. 2. The property must be occupied as the borrower's primary residence and most property types are eligible including, one- to four-unit properties, condominiums, co-ops, and manufactured homes. 3. Mortgages originated on or before January 1, 2009 are eligible and the unpaid pre-modification principal balance can be as high as $729,750 (more for two- to four-unit properties).
These are the main qualifications that need to be met. If you do meet these requirements, you may be able to reduce your monthly mortgage payment to 31% of your total monthly pre tax income.
This is accomplished by:
1. Lowering your interest rate to as low as 2%. This is the first step lenders take.
2. Extending the terms of your loan. If your payment is not low enough from step 1., they will try this to get it lower.
3. Finally, if necessary, your lender will forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.
This is all great, but not so great if you don't get your loan modified under these conditions. Lenders are still heavily backed up and your files have to be perfect to get accepted. If you would like more information on Obama's mortgage plan or help getting your files approved, just visit the following link.
For Obama's mortgage plan, you need to meet the following requirements:
1.Modifications may be available for borrowers who are delinquent (including those currently in foreclosure) or for borrowers facing the imminent risk of default because of a documented inability to continue making their current monthly payments. 2. The property must be occupied as the borrower's primary residence and most property types are eligible including, one- to four-unit properties, condominiums, co-ops, and manufactured homes. 3. Mortgages originated on or before January 1, 2009 are eligible and the unpaid pre-modification principal balance can be as high as $729,750 (more for two- to four-unit properties).
These are the main qualifications that need to be met. If you do meet these requirements, you may be able to reduce your monthly mortgage payment to 31% of your total monthly pre tax income.
This is accomplished by:
1. Lowering your interest rate to as low as 2%. This is the first step lenders take.
2. Extending the terms of your loan. If your payment is not low enough from step 1., they will try this to get it lower.
3. Finally, if necessary, your lender will forbear (defer) a portion of the principal until the loan is paid off and waive interest on the deferred amount.
This is all great, but not so great if you don't get your loan modified under these conditions. Lenders are still heavily backed up and your files have to be perfect to get accepted. If you would like more information on Obama's mortgage plan or help getting your files approved, just visit the following link.
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