A Remainder Estate is one of the title interests in real estate. It is usually conveyed by deed, and as such, is a future interest in title that is much stronger than an Option because it survives the death of an owner and divides a property in such a way that judgment liens become very difficult to levy. Here's why:
Sub-prime lenders are bracing for a storm of loan defaults that are going to cost them millions of dollars. They are shutting down their sub-prime loan windows. It could take years before they resume making these loans.
I got a call recently from a young person who met me socially over 15 years ago. He was getting ready to enter college at that time. He graduated with a Degree in business, and bumped around a little, then found himself with a Real Estate license selling houses by sifting on new model homes and taking orders.
The world is changing. We've gone from a strong seller's market
into more normal times. It isn't exactly a buyer's market where
the buyer can dictate both price and terms, but it is a market in
which selling a house can take between 6 months and a year, and in
which houses must be offered in pristine condition and sometimes
staged in order to attract discriminating buyers. Many people
confronting higher payments on higher priced houses are opting to
rent and to defer buying until prices come down and loans are
easier to get. This is creating a strong landlord's market in
which tenants have to jump through more credit and reference hoops
in order to rent a house of a size, quality, and location that they
might otherwise have bought. There are some lessons to be learned
here:
Is negative cash flow all bad? When might it be good? The answers to these questions will vary with your individual status.
In spite of losses incurred because of sub-prime loan defaults, lenders will lend money to owner occupants with reasonable FICO scores who can qualify for a loan. The problem is that today, all those cushy 80/20 and 80/10/10 loans with convenient terms have dried up, so buyers will need to come up with significant down payments in order to buy better homes.
Continue reading “BUYING AND HOLDING BETTER HOMES WITHOUT NEGATIVE CASH FLOW”
I’ve found that splitting the equity and giving financially distressed owners reduced rent until they can get back on their feet to be readily acceptable. The key is to never give a seller an Option to repurchase the property under any circumstances. This has been construed to be usurious practice in most States. An owner who is having trouble making payments on a $55,000 loan balance on a $150,000 house might be delighted to sign over half the house to you in return for your making all the payments while he continues to occupy it. Now, the plot thickens: Let’s say that you would be making all the payments; It would be only fair that he pay you fair market rents for the half of the house that you bought.
Continue reading “Half of Something is Better than All of Nothing . . .”
A person can make money with houses (and mobile homes) many ways, here are ten of them:
1. Buy low and sell high simply by using negotiating skills and market savvy. Bear in mind that every listing is acquired from an owner who is willing to sell at a price where he or she receives less than full market value, even knowing that the house is going to be sold for more money. Negotiation is a very highly paid skill.
In the race between the tortoise and the hare, if the hares are wheeler-dealers, managers are the turtles. Over the years I’ve noticed that the high-flyers of yesterday never seem to get to the finish line. Bill Zeckendorf and Bill Levitt were two of the giants who went broke after making billions of dollars. Why? There’s a simple reason for this; those who buy and sell make a lot of money while they’re doing it, but they have four adversaries that rob them of success.
I get a lot of questions from people who are trapped in houses that they bought only to re-sell for a profit. Now the market has stalled and they can’t afford to hang on to their property. What do they do? They list with a real estate agent (as if he or she had some magic potent that would suddenly produce buyers) and sit around hoping for the best. That’s about the same thing that their agent is doing too.
Continue reading “In a Buyer’s Market, Sellers Will Have to Learn How to Sell”
