Overcapitalisation – Why Cost Does Not Equal Value?

If you are unaware of the real estate terminologies then you might be wondering what overcapitalisation is. Basically, overcapitalisation refers to an overspend on construction or renovation costs which means the actual cost of a construction/renovation of the property is superior to its real market value. Overcapitalisation is also considered as asset inflation. Confused? Let’s make it simple. For instance, Mr A is planning to renovate his house by remodeling the bathrooms, basement and kitchen; upgrading the living room and bedrooms; adding a porch and swimming pool; installing vinyl siding, fencing front entrance and extending the garden. Mr A decides to use upper end expensive quality materials in the renovation. While doing so, he forgot to consider the real market value and quality of the houses in this area, which was lower than the value of his upgraded house. This is overcapitalisation.

Now the next question is what should be done to avoid overcapitalisation? Simple! When renovators and home builders are planning for home improvements, they must keep in mind some factors which have greater impact on the overall value of the property. For instance, evaluating neighbour’s housing style, demographics of neighbourhood, streetscape, design trends of neighbouring property, and recent resale prices of the homes in the area.

Although generally improvements and renovations add value to a property, it will be wrong to say they will ALWAYS increase its value. The reason is that if renovations and improvements are overdone, without keeping in view the real value of the area where your property is located, you might be overcapitalising your property. This means that your property cost will not equal its market value.

Hence, it is rational that a renovator or home builder is aware of overcapitalisation, and increases the value of the property only to an extent that it can cope up with. Remember, you’ve got to be really careful about overcapitalisation when upgrading or renovating your property.

Often overcapilisation occurs when people are not rational and business minded in their approach. Typically home owners will spend more on fixtures and fittings with the aim to live in the property.

Some cultures often prefer to live in larger homes as status symbols and will opt to spend more on improvements than is the norm in the locaility.

However if you are an investor or builder, it is important to get the mix right as this will result in higher profit margins. Getting it wrong can often mean longer selling periods and discounted prices. Do your due diligence to avoid disappointment.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Keith P

Home Staging Business Plan – 6 Steps to Get You Started

Are you thinking of becoming a professional home stager? You’ve done your research and met with other professionals in the field of home design and real estate. Now what? Before you jump right into the hustle of setting up your home staging business, you need to have a plan first. This will help you stay on track and focus your sights on your business goals.

A business plan will help you put down your business goals and strategies on paper. Whether you are writing a detailed formal business plan to submit to your loan officer, or whether it’s just notes and reminders you’ve jotted down on a notebook, a business plan will help your business prosper in the long run. Below are the main parts of a business plan. You can omit some of these parts if you are not writing particularly to request funding.

1. Executive Summary.

This comes in first, but you have to write it last. After all, it’s difficult for you to write the summary of something you haven’t even written. This should contain all the important points of your business plan, but remember to keep it brief, understandable, and straight-to-the-point for potential investors who are too busy to read the entire document.

2. Company Description.

This includes a description of the nature of your home staging business, how you plan to start your company, a profile of the company owners, the location of your company headquarters (may be your home or a small office), and the facilities owned by your company.

3. Home Staging Services.

It’s important that potential investors understand what kinds of services you are selling. Specify whether you are offering only consultation services, or if you also provide other home staging services such as designing and furniture rentals. Also, identify the competitive edge of your services as compared to other home staging services already available.

4. Market Analysis.

This section requires that you do a little bit of market research. Focus on describing your market and the current demand for home staging. Don’t forget to include an assessment of your competition. This will help you decide what marketing strategies to undertake when you start selling your services.

5. Marketing Strategies.

This is an essential part of the formal business plan. This section describes how you will promote your business, the costs of your marketing strategies, and how you will determine whether these strategies were effective.

6. Financial Data.

If you are still planning on opening your home staging business, this section includes your projected profits in the short and in the long run. For formal business plans, you may need to ask the help of an accountant in writing this part.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Angela Morrell

4 Objectives Of Home Sellers

When a homeowner decides, he is ready and willing to sell his home, he must examine, using the utmost degree, of objective introspective, why he has decided to do so, and what he wants to achieve/ accomplish (his personal objectives). In my, over a decade, as a Real Estate Licensed Salesperson, in the State of New York, I have determined, there are a wide variety of reasons, but, in the vast majority of instance, these fall into 4 specific categories. With that in mind, this article will briefly attempt to review, examine and consider, 4 objectives of most home sellers.

1. Best possible price: Obviously, when one sells his house, he hopes to receive the highest, best possible, price, for it! However, to do so, requires a strategy and focus, and the realization and recognition, the listing and selling prices, might be considerably different entities, in certain instances. These sellers should have a thorough discussion with their real estate professional, to come to a meeting of the minds, to determine what price to list, the house at, and the reasoning. strategic purposes. Depending on many factors, setting the price, right/ correctly, from the start, generally, garners the best price. This does not mean, merely setting a high price, because there are many instances, where doing so, may do harm, to the final result. Smart homeowners have a complete discussion, before they proceed!

2. Shortest period of time: There’s many reasons, getting the home sold, in a relatively short period of time, is beneficial to a homeowner. Studies indicate, in the vast majority of cases, the best, selling price, is generally offered, in the first few weeks, because, that is when, it is perceived, the house is hot! Many potential buyers tend to wonder, if a house is great, why didn’t it sell, sooner! Generally, this occurs, when the listing price is higher than it should be! In addition, one should understand the opportunity – cost of money, because a homeowner must continue paying the costs associated with the house, until it closes (including taxes, utilities, mortgage payments, upkeep, etc). One should also understand the longer the process lingers, the greater, the stresses and inconveniences!

3. Best terms: Often, price is not the only factor involved. Some buyers might put more money down, while others might be willing to waive contingencies, such as for receiving a mortgage, etc. The fewer the contingencies, the less might go wrong!

4. Least hassle: When homeowner and agent, have a complete conversation, and share strategy and process ideas and considerations, there will generally be less hassle. Understand, often, the process of selling one’s house, is a tense period of time!

Professional, quality real estate agents, recognize, understand, and fully examine and consider, the seller’s objectives, and do everything possible, to provide the best possible service and advice. Will you be guided accordingly?

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Richard Brody

8 Tips to Help You Arrange Furniture Like A Professional

If you want to arrange furniture in your house, you need to consider two elements first: function and form. Keep in mind that you don’t need to invest in new articles of furniture or shell out tons of money for the best decoration items. Given below are a few tips that can help you arrange furniture just like a professional. Read on to find out more.

1. Take Measurements

First of all, you need to measure the room and the furniture articles prior to moving any item. Your next move is to apply the following fundamental measurements based on the room you want to redesign.

  • Make sure you leave at least 2 and a half feet of space between each article of furniture
  • For easy conversations, there should be a distance of at least 8 feet between facing sofas and chairs
  • There should be a distance of at least 14 inches amidst the coffee table and the sofa
  • The table of your dining room must be a minimum of 36 inches from the walls

2. Have A Focal Point

As far as a living or family room is concerned, make sure you have a focal point, such as a fireplace, French doors, large windows or an entertainment area. You can decide on the purpose of this room.

3. Allow easy Conversations

You may want to arrange the seating area properly in order to allow people to talk easily. For instance, you can put the chairs and sofas in the right place.

4. Add Asymmetry

Don’t worry about matching every item in your house. The thing is that asymmetry happens when the furniture items have different heights. For instance, it will be awkward if you place two candles of different heights on a table.

5. Consider the Proper Placement of TVs

For your TV room, you should decide on where the visitors will sit to watch TV. During the day, the light will come in through the windows. Therefore, it may not be a good idea to place the TV facing the windows. Similarly, in the evening, the room lights shouldn’t shine on the TV screens. Proper placement of the equipment is quite important here.

6. Use a Big Piece of Rug

With an area rug, you can define a space like a focal seating setup. The rug must be big enough so that you can place all tables and seating on it.

7. Go for Banquette Seating

If you don’t have a lot of area in the dining room, you can use a regular dining table for kids crafts, paperwork or homework. Another great alternative is the banquette seating. This thing will offer additional storage.

8. Try Different Angles

The furniture pieces don’t have to be on a 90-degree angle as far as other furniture or walls are concerned. You can place chairs, love seats or sofas if you don’t have a lot of space.

Long story short, these are a few simple tips that can help you arrange your house furniture like a professional and get the most out of your available space. Hope this helps.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Shalini M

What Is the Difference Between Reinstatement Vs Modification of a Home Loan or Mortgage?

If your mortgage lender has sent you a letter demanding that you pay all of your back payments, as well as all late fees, penalties and legal fees in order to become current, then the process they are working with is called a reinstatement of your loan. Your lender views the delinquent amounts as defaulting on the terms of your home loan. This requires them to demand you catch up or they must foreclose on you and take your home. Can a home loan modification avoid this process and get you current without your having to pay this large amount? If the answer is yes, then why is this true? You may ask, what is the difference between reinstatement and modification of a home loan?

The demand for payment letter that a borrower receives is based on the terms of the loan. It only allows for paying the payment as described in your loan documents. If you are behind on your payments, you are still going to be held to the terms of your contract with the lender. There is no language in your loan to allow for changes. Therefore the lender has no other option other than collect or foreclose. You have fallen into default and the only contractual way to become current is to pay all past due amounts. Then your loan has become „reinstated“ and you can keep your home as long as you continue to make payments on time. This process is called reinstatement.

But, the problem with the reinstatement process is, that if you are too far behind then you will be unable to find enough cash to catch up all at once. The language of your loan, then triggers a foreclosure that you are unable to stop.

Unless….You are able to work out an agreement with your lender to „change“ the language and terms of your loan. This type of situation will call for „modifying“ your loan. You modify the terms to make it possible for you to continue owning and paying for your house. It would include interest reduction to lower your monthly payment and taking your unpaid payments and putting them back into your loan. The new terms would have the effect of creating new monthly payments, which would be affordable to you. Your monthly payments would now fit within your monthly budget.

Why would the lender do this? Because, your lender loses a great deal of money whenever they foreclose on a home. This is complicated, but the costs your lender must pay can include:

1. The cost of the foreclosure process going through the court system.

2. Your home will probably sell for less today that just a few years ago due to the economy. If your lender receives less than you owe them, then they lose this money.

3. Care of your home while it is in the selling process. This includes large realtor commissions, utility bills and upkeep.

4. The lender borrowed money from an even larger lender in order to loan you the money you used to buy your home. Your lender must pay this back.

5. While your home is in foreclosure or being sold, your lender cannot use it as an asset on the bank balance sheet. They are then criticized by government regulators.

Well what does your lender want? First of all, the lender wants you to catch up your payments on your own and get a reinstatement.. If that is not possible and you can identify the problems you have had that forced you to get behind, then the lender wants to work with you. The lender wants you to show what was wrong; what is different today; and what amount you can afford. Then they must see if they can make your plan work from their point of view.

If you can agree on terms that work for you both, then you can change the words, or terms, of your loan to incorporate the new agreement. You will not be getting a new loan or a refinance loan. You will do a „home loan modification“, which simply changes some of the terms of the loan, so that it now includes your new agreements.

Home loan modifications are done thousands of time per day, due to the present housing crisis. You can do it yourself, if you are familiar with the process. However, this can be tricky. I would interview several home loan modification process experts. Find out what they promise, what they charge and if they will take payments. For my recommendation see my resource box below.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Danny Hammond

4 Main Objectives Of Most Home Sellers

Let’s begin this article, by agreeing, no two homeowners, considering selling their homes, are exactly the same, nor necessarily possess precisely the same motives and reasons. However, it might be helpful, if we realized, most homeowners find the process of selling their houses, and relocating, to be a somewhat tense, emotional, stressful period. Perhaps, identifying the four major reasons people sell, and looking at their objectives/ goals, might be a beneficial one, because it will help create more empathetic real estate agents, who focus not only on the technical aspects of the transaction, including marketing, promotion, etc, but on the client’s needs, concerns, and priorities, as well. Here are 4 main objectives, it has been found, most home sellers, possess.

1. Best possible price: Obviously, most people would want to end up, with the highest possible price, when selling their house. However, there is more to this, than simply a number. Some of these factors to consider, when comparing offers, include: 1) Will it comp – out? Since most people buy homes with mortgages, an offer which far exceeds, the appraisal from the lender, will often create a deal – breaker!; b) What are the terms? Is this a true all – cash deal? An all – cash deal can either be; all – cash; or simply, no mortgage contingency!; c) What will be the downpayment? Obviously, the greater the downpayment, the better the chance of the deal going smoothly; d) Are they pre- qualified or pre – approved? The difference is the first means, based on merely the preliminary information provided, the applicant will be approved, while the latter means the applicant is approved for a mortgage up to a certain dollar amount, as long as the house also qualifies.

2. Shortest reasonable period of time: Recognize the opportunity cost of money. Every month extra it takes will mean the homeowner will have to continue to pay taxes, utilities, his mortgage, overhead, etc. Doesn’t it make sense to agree to a shortest – possible wait, for the closing date?

3. Least hassle: Hire a real estate agent, who informs you, every step along the way, and holds your hand, throughout! Have the possibilities and ramifications explained to you, so you are ready and prepared, because less uncertainty, usually equals less hassle!

4. Successful transaction: Remember, it doesn’t count, until it closes! What steps will your agent take, and have you take, to assure, as smooth a transaction period, as possible?

Some homeowners primarily care about one of these, while others care deeply about several. The more you know, and the better you prepare, the better the end – result!

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Richard Brody

How to Be a Short Sale Super Hero

Yes, You Can Be A Hero And Have Your Best Year Ever

„One out of 10 homeowners is not making their mortgage payment.“

„One out of six homeowners has an upside-down mortgage.“

„Seven out of 10 homeowners who lose their home to foreclosure didn’t contact a real estate agent or lender prior to foreclosure.“

These are just some of the statistics I heard at a Short Sale Summit in February in Carlsbad, California.

The guest speaker was Alex Charfen, co-founder of the Distressed Property Institute, who added that, with regards to today’s market, „What’s going on has just begun. If this were a baseball game, it’s inning number two or three.“

And while today’s market is no game, it is, says Charfen, a „once-in-a-lifetime gold rush“ if you become the short sale expert in your area. That doesn’t mean a reluctant „Yeah, OK, I’ll do that short sale,“ or a desperate „I’ll take that short sale – I’ll take anything!“ That doesn’t mean you just add „Short Sale Expert“ to your business cards and advertising.

It does mean you’ve spent serious time acquiring the knowledge to become an expert on helping people who are facing the worst (or close to it) financial crisis of their lives. It means you seek out prospects in a short sale situation. It means that you advertise for those prospects, you embrace those prospects, and you commit to helping them negotiate the best possible outcome.

It means you understand that you’re not doing this just for the commission check. You want to sell that home. You want to help that family avoid foreclosure and financial ruin. You want to help not just your client, but their entire community so it doesn’t turn into a ghost town of empty, neglected houses.

Why would I want to do that, you’re asking? Why not let some other agent deal with those people and their problems? Just give me a nice two-income family, 720+ FICO, steady jobs, big down payment, and I’ll find them the perfect home.

Of course you will. That is, if you can find that dream client.

There just aren’t that many of them out there. If they’re that dreamy, they’re generally already in a house and they’re not moving up or down or anywhere else until the economy is in better shape. It’s that lack of dream clients that’s driving record numbers of real estate agents out of the business every month.

So, who is out there to buy short sale properties? Plenty of first-time buyers, especially people who are renting. Relocating families who have to move. Investors looking to start or expand their portfolio. Short sales are an opportunity to acquire a property at below-market value. Read: A great deal for buyers. There are a lot of properties to choose from, and banks would rather sell the property than go through the time and expense of foreclosure (that is, „They’d rather remove a non-performing asset prior to acquisition,“ as Charfen puts it).

What’s truly a pity – it’s worse than a pity – is the number of people whose homes go into foreclosure when they might have had a successful short sale. There’s a wealth of misinformation out there, and there are many people who actually think, „Short sale or foreclosure – same thing.“ So they miss a mortgage payment, and then another and then another, and their lives go into a high-speed, downward spiral.

It doesn’t have to be that way, says Charfen. Once an agent is armed with training and a support network, „The agent lets people in his database and others know that he’s the short sale expert, he’s available, and he can help the seller sell and the buyer buy. He begins helping people, and his delighted clients enthusiastically refer him to their family members, friends and coworkers in similar situations. He becomes known as the short sale ‚Super Hero‘ who not only handles short sales professionally and effectively, but he saves people from foreclosure.“

That’s not to suggest short sales are easy – they’re not. They require significantly more, and different, paperwork than a traditional real estate sale, and one missing piece can delay the transactions for weeks or months – or kill it altogether. Being a short sale Super Hero requires exceptional negotiating skills as you represent the seller and interact with the buyer’s agent or offers from multiple buyers‘ agents. At various times you may be in contact with attorneys, title people, property tax people, contractors, tax advisors, accountants, and others. And then there’s the lender in the form of the loss mitigator, an overworked, underappreciated person who already has 300 files on his desk and why should he give yours priority? No, short sales are not easy. If they were, everyone would be doing them – right?

There are amazing opportunities right now for real estate agents who

o Are willing to spend the time to become educated about short sales.

o Are committed to putting the systems in place to help manage these complex transactions.

o Want more than a commission check – you want to help people get the best financial results possible and move on with their lives.

Those agents will prosper in this marketplace and make 2009 their best year ever.

Will you?

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Joe Stumpf

How to Sell Your House Yourself Easily?

Selling the house put people in a dilemma whether they should hire a real estate agent or not? Well, if you are capable of selling your house on your own then why hire a real estate agent with whom you have to share your profit.

Usually, property owners are expected to pay 5% to 7% of the sale price to an agent. However, if you choose to sell your property yourself then you will not only be able to save on the real estate agent fees but also will get the freedom to sell your property in your own ways.

Before you move further to sell your house yourself, do consider the following discussed factors that will make your selling easy:

The location of the property is believed to be one of the crucial factors. Since no one can change the location of your home to take it to the more desirable place, thus, the price you expect should be realistic. You will get nothing if you offer a much higher price in comparison to the other properties that are being sold in the same area. Therefore, it is recommended to do proper research to find out what neighborhood properties have been selling for.

What is the status of the housing market like at the moment? Find out the worth of the property a few years ago and now? Considering the history of the property prices, it is important that you price your property in line as per the current market conditions.

Check out the condition of your property at present. Before you advertise your property for selling, it is good to allow a property inspector to visit and value your home. On sell your house yourself; you may not be able to see the little defects and repairs that a professional can observe.

In many cases, the reason for selling your house influences the decision of the buyers. So, you should be clear about your words that describe the reason.

Next, you need to think like a potential buyer. You simply cannot show your emotions to get in a selling way. If any corner of your house needs repairs or changes, then you should get it repaired or changed immediately. Prior to starting the process of selling your house, think from a buyer’s point of view.

Sell your property yourself can save you from long meetings with agents and their representatives. By listing it on a reliable listing portal, you will be able to reach millions of potential buyers, investors, and renters. Such a quick reach is not possible with the traditional methods of selling homes that include putting advertisements on newspapers, television, and handing out flyers. These property listing portals will make you connect with more and more people by putting your minimal efforts. Furthermore, the cost-effectiveness of the internet cannot be overemphasized as it allows you to create the perfect online presence with an affordable advertising budget.

There are various portals online that allow you to advertise your property without charging any commission or hidden costs. Among such options, choosing the best one is vital to get the quickest outcome of your property.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Vinny Singh

House Flip For Profit – 7 Tips For House Flipping Success in Any Market

1. Get Prepared – Now that you have decide to start flipping houses for profit it’s time to get your goals and expectations set correctly in your mind. Figure out how much cash you have available for this investment. Make sure that you have enough money to cover a twenty percent down payment, the remodel of the home, and enough cash on hand to cover the monthly mortgage payment until the property is. I know it sounds overwhelming, but I will show you how to reduce the up-front cash and the funds for the remodel. It always make sense to write down your plan. It doesn’t have to be anything fancy, it just has to make sense to you. You can’t possibly know where you are going without a map to navigate by.

2. Identify a good property to flip – Now that you have some idea of your direction, it’s time to consider the type of property that would make a good flip. Figure out if you want to buy a single family home that needs work, or a multi-family home where your intention could be a condo conversion. For our purposes here, we’ll discuss the single family house flip. If you don’t have access to the Multiple Listing Service (MLS) in your area, find a reputable real estate agent who could provide you with access to the MLS. It is wise to have a buyers agent because it’s doesn’t cost you any money. The buyers agent is compensated by the listing broker’s agency. Once you have access to the MLS, you can start searching for properties. I like to search by zip codes in areas that I know to have desirable neighborhoods. In a down market, such as the one we are in now, there are plenty of rundown homes that happen to be in great neighborhoods. Those are the homes that will always sell first. You should focus on bank owned, short sale and foreclosed homes that are on the market. Keep in mind that it doesn’t matter how much the seller is asking for the home, what matters is if the project makes sense. I typically figure out the price I will pay for a home after I figure out the amount of work that needs to be done and how much I can sell it for. Remember, the market tells you what a home will sell for, not a price tag.

3. Inspection and Property Analysis – Before you can make an educated offer, you must know two things. First you must know how much it will cost to bring the house to it’s highest and best condition. You need to appeal to the type of buyer that is most likely to purchase the home. You should have a trusted contractor meet you at the house so they can give you an idea of the costs involved. Now add 20% just to be allow for unexpected costs. Once you know your cost you should consult with your real estate agent to determine what similar homes have sold for and look at the homes you will be competing with. Now that you have a good idea of the future selling price and the cost of the construction, you can now use basic math to add the cost to the purchase price and then subtract that answer from the estimated future sales price to determine if there is a enough profit margin for this house flip to make sense for you. Tip: Don’t forget to add sales commission to your cost if you plan on using a real estate agent.

4. If the Numbers Work, Get Financed ! – Once you know that there is enough profit after your acquisition cost, remodel estimate and sales cost. You now know the most that you should pay for the home. Before you make an offer, you must get your financing in place. This is my area of expertise since I have been a mortgage broker for several years. There have been many changes in the mortgage industry since mid 2006. Money is a little tougher to get, but it is still available with a down payment and decent credit history. Guidelines are always changing, but right now at the end of 2008, a minimum of 20% down payment is required to purchase investment property and the borrower must show income and assets to qualify. If after the 20% down, remodel money and cash to cover the monthly payments, you do not have much money left, you should consider a partner for the deal. You may not be a fan of long term partnerships, but when you are flipping property, you would be looking at a 4-6 month partnership, not a lifetime. If that works out you could always buy more property to flip in the future. It also helps split the risk and the tasks. Just make sure your expectations are set properly. If going the partner route I suggest opening a joint bank and funding it with 6 months of mortgage payments including tax and insurance. If you have more questions about financing, I would be happy to answer them. I will provide my office contact information at the end of this article.

5. Remodel / Rehabilitation Phase – It’s time to get this home fixed up and back on the market as fast as possible. You should now have your contractors come in to start the construction phase. Keep in mind that cheap labor will almost always be more expensive. Make sure that the contractors are pulling the proper permits. The last thing that you want is a forced work stoppage because the required permit was not pulled. Furthermore, if these workers do not know or build to code, it will usually cost you double to correct a code issue. By now you should have a detailed list of everything that needs to be done. Break it down by major systems such as heating, cooling, plumbing, electrical, and any other system that needs repair or service. Then go room by room and make a list of what needs to be done in each room. Joint compound and a fresh coat of paint goes a long way. Just make sure you use modern, neutral colors that would not be offensive to anyone. Make sure you inspect the exterior of the home for repairs and touch-ups. The yard should be clean and landscaped properly. Make sure you check in on the contractors daily to make sure things are on track, don’t assume all is on schedule. Finally, take advantage of using Lowes and Home Depot credit to avoid payments and interest for six to twelve months. You should be able to buy most of the materials with that credit. Just makes sure you pay the entire balance when the interest free period ends or you will get whacked with all of the accrued interest.

6. Sell your House Fast – Now that your home is complete and ready to go on the market. You should already have an idea of how much you will list this property for, but you must once again verify the value. The best way to do this is to have an appraiser or a real estate agent do a comparable market analysis. If you don’t know an appraiser, call your mortgage broker and ask him or her to use their appraiser to help figure out a range for you. I do it for my mortgage clients as free value added service, it’s just good business practice. You may want to sell your home yourself and that is fine, but you must have the time to show it and also be able to list the property on your local multiple listing service. If you are trying to avoid paying a full real estate commission, a local real estate agent will usually do an „entry only“ listing for a nominal fee. If you do not have the time or do not want to deal with the hassle of listing the home yourself, hire a real estate agent to list your home. You should have already added in the sales commission fee into your figures before hand. When figuring value make sure that you also look not only at similar homes that have sold, you should also look at your competition. Your home needs to be a great deal when the average buyer looks at it against others in the same price range. Finally, if you are not getting sufficient showings after a week or so the home may be priced to high, don’t be afraid to lower the price. Sometimes a little profit is better than no profit. That is why you must purchase the property that you want to flip as low as possible and estimate the remodel as accurately as possible.

7. Make Plans for your Profit – If you priced your newly remodeled house correctly, it will go under agreement and you will soon close. If you have planned correctly, you should have some profit coming to you. It would be wise to have a solid plan with regards to your profit. Here are some options; You could simply take the profit as well as your initial investment and place it in your bank. In that case, you just created a taxable event or in other words, a long or short term capital gain depending on how long you held the property. That option is better if the profit gain was minimal. If you made a significant profit and were planning on flipping another property, you can defer your taxes through a 1031 exchange. Basically a 1031 exchange is a tax code that allows you to defer capital gain tax to a later date buy reinvesting your profit into another investment property within a certain time frame. There are rules that must be followed in order to make the exchange valid but considering the benefit, it could be well worth it. The advantages of doing a 1031 exchange includes having more money available now and more buying power. It means not being taxed while your are building your real estate investment business. You can flip your profit, just like you flip a house. Here is an idea, why not flip homes until you have enough down payment funds to exchange into a 30 unit apartment building. Then you can turn your money into a cash flow. You could defer paying any taxes until after you sell the last property and actually take the money. It is always wise to speak with an accountant when making tax decisions, so always consult a professional CPA when dealing with tax laws, that is money well spent.

I will leave you with one last thought; Use professionals from start to finish. Licensed professionals may appear to cost more, but they will save you money by getting the job done on time and correctly.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Michael Dell’Ovo

Cheap Home Appraisals – 2 Ways You Can Get a Free Home Appraisal

If you are looking for a cheap home appraisal, or free home appraisal, then read this article. I will show you two ways to get your home’s value for free. In today’s real estate market you need to know the true value of your home before you list it for sale. If you are buying a home you need to know how much that home is really worth in a declining market.

Real Estate Agents – Using a local real estate agent you should be able to get a close estimate of the value of your home or property. Real estate agents have at their fingertips many tools that will give a fairly accurate estimate of your home’s value. What will this cost? Usually it is free. So what’s the catch? Well, most realtors will do this for you in hopes of getting your business. Should you let just any real estate agent do this analysis? I say no. You want to select a real estate agent that is familiar with your subdivision or area. You also want an agent that understands how the features in your home will either increase the estimate or decrease the estimate. Once you receive an home value estimate, then you should use the next method to verify that the estimate is correct.

Home Appraisal Websites – I like using some of the free online home appraisal websites, like HomeGain. HomeGain will give you a fairly descent estimate within a few seconds. All, you have to do is supply your address and a few details about your home. Click the button, and within a second or two you will have a free home appraisal. There are other sites on the internet that do this type of appraisal but many are not free. I suggest that you get at least two estimates from an online source and then compare it with a real estate agents estimate. This should give you a fairly good idea of how much your home is worth.

Immobilienmakler Heidelberg

Makler Heidelberg



Source by Jordan S Ashton

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