Home Buyer FAQ

Time for the BIG Move

So you want to look for the house of your dreams. If it is in the country, Crossroads Real Estate is the Broker you want to work with. Looking for a nice sized house on a few acres with maybe an extra garage, or a large pole building to house your business or hobby? That’s what we look for at Crossroads Real Estate. The countryside is full of properties like that in all price ranges.

Gathering the Facts

What’s holding you back? The commute time? You can check Google Maps to get an idea of the daily commute time and distance. Worried about paying extra for gas? Compare the prices and taxes on houses inside and near the city limits to those outside the major circle most people live in. Tax savings may not pay for all your gas, but it can offset the cost to an acceptable degree.

What about the job? If you work for an employer who allows you to work at home on certain occasions, you have it made. If not, here are a few ideas to consider.

The trick is to buy the house of your dreams while you are working for the same employer a number of years. Creditors like to see applicants with a long work history with the same employer. It makes the lender feel safe. But what about after you secure the mortgage and the house of your dreams? Then look for a new job.

How do you know you will be able to find local employers? You have to get out of the big city and explore the country side. The major growth in America over the past few years has been in and around small towns. Take a look at them. They sure don’t look like the same small towns a few years ago. Major companies have moved in. Not just the Walmarts and McDonalds. There are many more companies to choose from.

What are the advantages of working in a small town? If you do your research, you just may find a selection of small, family owned businesses to choose from. In the big city the big corporations are overflowing with departments that didn’t exist a few years ago. Those new departments and mangers love to track pert near everything. That requires a mountain of paperwork. You know those reports. You spend more time filling out reports than on the actual task at hand. In the real world we call that pressure. Small family owned businesses don’t have those departments or reports. They are looking for skilled people like you who just want to get the job done and do it to the best of your ability. They would love to hire a skilled worker like you who focuses on the task at hand and knows how to do their job. Finally you can get the best of both worlds.

How do you find employers like that? I’ve put together a few simple packages with links you can follow. I’ve done the footwork for you. All you need to do is choose a location, get pre-qualified for a home loan, and let me help you find the perfect place. Now for a quick run down on some of the most poplar and growing locations in Wisconsin. But first, here are a few of the best sites to search job openings. But remember, you may want to consider getting the house first, and then continue the job hunt.

The Job Hunt

Indeed Resume

Indeed is one of the best job hunting sites. Their layout is nice, easy to navigate, and with all job sites, you can set up your custom search and get email updates. The problem is, they will send you emails everyday. And you will see the same employers offering the same jobs over and over again. You may want to take a look at some of the employer ratings and comments.

https://www.indeed.com/?from=indapply

Glassdoor for Employers

Glassdoor is another job site. Glassdoor also has custom searches with email updates. The problems is, many of the jobs are outside your personal search criteria.

https://www.glassdoor.com/post-job

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Carrier Builder is another site I looked into and used. Like Glassdoor, they offer custom searches and many of the emails are beyond the scope of the search criteria.

https://www.careerbuilder.com/

Those sites will give you an idea of the available jobs and may be the best place to begin your search for jobs in the area you choose. At least you will get an idea of job opportunities in and around the community you choose. If you prefer to do additional research, you can check out a few more websites that contain growth predictions, home prices, and other community information.

Information on Local Communities

The American Registry | well deserved

American Registry will give you information on the largest employers per county.

http://www.americanregistry.com

American FactFinderAmerican FactFinderAmerican FactFinderAmerican FactFinder

American Fact Finder will give you information on average income, housing, education, and other details.

https://factfinder.census.gov/faces/nav/jsf/pages/community_facts.xhtml

GMAR, the Greater Milwaukee Association of Realtors will give you information on housing statistics.

https://www.gmar.com/resources/research-statistics/2018-home-buyer-seller-report

Whatever you are looking for, information is on the Internet. All it takes is a bit of research. I can’t promise you the perfect job in the perfect community, but leaving no stone unturned leaves you with the satisfaction of trying to accomplish what few people put into motion. And we do learn from our experiences. Our learning curve makes us more valuable on the work site. Living in a house gives you ideas on what to look for in the next house, how to remodel the one you are in, or how to build the house of your dreams if you choose to take that route. Experience is the best teacher. And it leaves you with something to pass along to other people.

Frequently Asked Questions Real Estate

Information is Power

We’ve all heard the term, “information is power.” But what does that mean in the Real Estate Industry? Let’s take a look at big time investors. What do they look at. Price of course. How do big time investors know if they are getting their best price? This applies to both the seller and buyer side. They check comparable properties in the general location. This is far more difficult for an industrial or retail property than for a single family home. They also look at local demographics. The key here is, “local.” It doesn’t matter what is on the other side of town with 32 competitors in between. The smaller the area is in the report, the more concentrated the information is. A new fast food store is concerned with local traffic. How many cars pass by in an hour and how many per day. What attractions are near by. You heard the term, “the most important thing in Real Estate is location.” Then why do people rely on websites to tell them a market price on a home they are going to buy or sell?

Website estimated values have major draw backs. They typically look at the zip code. Sure they have computer programs that give you an estimated price. The problem with computer programs is, garbage in – garbage out. What experience does the programmer have in Real Estate? What does the programmer know about your neighborhood? If major investors look at opportunities in a block by block spectrum, shouldn’t you take advise from successful people?

Websites have another problem. They want to increase site visits. The truth as it sits rarely attracts the flow of visitors those websites are looking for. So they add a little spice. They try to predict future market trends. A market crash attracts the most amount of attention. That is why you see websites predicting so many market crashes over the past three years when we have seen nothing but increased prices.

Those websites also predict high numbers of future foreclosures. The information is false, but it drives in repeat visitors. Those websites don’t have to be right. All they have to do is keep predicting news and information that brings in the maximum amount of visitors.

Websites sell ads based on number of visitors, clicks, time spent on the website, and a few other factors. Numbers are all those websites are concerned about. They could care less if you sell your home, or if you receive the right market price. On the other hand, a good, local Real Estate Agent only gets paid if the property is set at the right market price, receives an accepted offer, and closes. Real Estate Agents are paid after the closing. They have a lot riding on their local market analysis. They have to be right all the time. And they have the tools to look at a specific neighborhood for prices, time on the market, and actual sale prices.

Buying and selling a home is one of the few times when knowledge, the data you review has to be concentrated. It has to be local. It has to be up to date. And it has to be easy to understand. Get a report on the house you are selling, or looking at buying. No buyer or seller should make that final decision without a market report.

Internet Safety Frequently Asked Questions

Facebook Advertising

There seems to be a trend towards Facebook Advertising. There are many phases of Facebook Advertising. The first is of course doing it the easy way. Go on Facebook and place an ad. Then see if Facebook can live up to their claims. As usual, Real Estate advertising on any media brings out the wannabes. Those people who would like to buy a house, but never did the proper planning. And maybe, just maybe, a Facebook ad will bring in a new buyer or seller. But at what cost? There is the initial cost. Which is rather low compared to most social media outlets. But there is a time commitment. You have to try a number of ads to target different groups of buyers. Then you have to be wary of all the anti-discrimination laws and of course the way people view them. By groups, I am talking about price ranges and general interests.

Any type of advertising can work or fail. So – in steps the advertising consultants and experts. The problem is, most of them never sold a house. They have no idea what the Real Estate business is about. So they plaster the media with half hearted ads that may be less effective than any ad you designed yourself. If you are in Real Estate, you are supposed to know what people want. The best advertising Real Estate Agents can do is to present themselves as the expert in their field. What kind of impression does a Real Estate Agent make when they hire people to do a simple task for them?

Go with the simple ads that attract attention and show you are the expert – like:

What is the market doing in your neighborhood?

How can you be sure the Title work is complete and accurate when you buy your next home?

Real Estate Agents know and recommend the BEST Lenders based on their experience of actually working with them.

Those are questions every home buyer and seller needs to know. Stick with knowledge Buyers and Sellers need to know. Then step in as the expert in the field.

Of course Facebook adverting hatched a new set of scammers. Let’s face it. Many people with nothing more than a laptop, and some at Internet cafes launched a personal business trying to pass themselves off as Facebook adverting experts. Like I said, they know nothing about buying or selling homes, but they compete for your business. That is a dangerous road to travel. They can place you in hot water because they know nothing about the adverting laws Real Estate agents and brokers have to follow. You are the expert. You are supposed to know these things. If you don’t know them, you probably shouldn’t have a license.

Of course there are a few legitimate adverting companies who use Facebook as a media. And they may bring you in new business. On the other hand, you have to be wary of the fly by night businesses. Many of them are from overseas. Many of them are not registered and licensed businesses. You are supposed to be the expert. The NAR and congress placed the responsibility of being experts on Internet scams on the shoulders of Real Estate Brokers. We are supposed to be up on the subject and able to share that information with our clients. The NAR has articles on the subject, plans, and information we are able to share. Did you read it? Are you the expert you claim to be?

And of course there are companies out there that are what I refer to as snakes in the grass. Those are companies who try to recruit unsuspecting people and convince them they will make a fortune after taking their classes and training on being Facebook advertising experts. Beware of those snakes on the Internet.

They are good at adverting. They send out millions of emails. They use Facebook to advertise. They look like they know what they are doing. But they will never give you the step by step process you need to succeed. All they have is a script designed to separate a fool from their money.
I’ve looked onto one of those scammers. They claim to offer FREE classes, videos, books, and such. But that requires a monthly membership. I’ve even seen churches use that scam to offer Bible Studies and training. What is this world coming to? I’ve also seen this used in Real Estate Investing. I’ve seen people loose thousands of dollars. So I wrote an article about that. And it save thousands of people money.

https://crossroadsre.net/what-lures-people-into-an-online-scam/

When I look at the books the Facebook adverting scammers offer, it is like I am reading one of those self help books from the 1980’s. Remember those days? Self help books were all around. We had PC’s. That is short for personal computers. The computer was housed in a big tower. The screen was 14 or 15 inches and weighed a ton. But those computers worked. Many of those self help books concentrated on that new computer thing. Looking back I can see how useless those books were. The authors knew nothing about fixing computers. So they never give you any idea how to trouble shoot a computer, take it part, replace parts, or put together a custom computer. Those authors didn’t know a thing about programming. But they wrote about how you should be motivated to take advantage of the coming trend. None of those authors in the 1980’s saw anything like Amazon or Google. But they wrote about being in that 1% that would succeed and make a fortune. In other words, those books never told anyone how to actually take the first step to being successful. Those authors made millions and proved, you don’t have to have brains, know how, or experience to write books and make millions.

The books today copy the same ideas. If you ask me, they copy entire chapters from those old books. If you need a motivational book save yourself some money. Go online and buy some old used books. They have the same information as the new books. And neither will give you any idea of that the first step is to start a business.

Okay let’s let reality sink in for a moment. Some guy is telling you how to think outside the crowd and get rich. Well what is the first step? Of course the 1st step is to write a business plan. They all use scripts to scam money. But they are not gong to share that secret. Then you need to crunch some figures to set up a budget. Another detail those books, seminars, and videos seem to omit. Then you need to file for a business license and register in your state. Some of those scammers actually have a registered business. They went through the process and should be able to explain it to you. But they don’t. They don’t give a damn about you or anyone else. All they want is your charge card number.

Of course I am writing from the views of a Real Estate Agent. I am actually a licensed Broker and I own my own business. I am in the process of adding new Agents. I expect to find and work with Agents who know how to do their job. Like filing for the business license. They have to know about Internet security. And they have to know a lot about marketing. How are you going to sell a $500,000 house for a client if you don’t know how to generate your own leads? I put Agents who are experts in the field. They are Independent Contractors running their own business. And they better be able to prove they know what they are doing. My training is designed to make great Agents better. I don’t want to see one of them or anyone else falling to these new Facebook adverting scams.

Internet Safety Frequently Asked Questions

What Lures People Into an Online Scam

So you want to get rich in Real Estate. You don’t have much money, but you heard all the stories of how people broke the system and made it rich in Real Estate. The Internet is full of Real Estate Scams with one intent…. to quickly part a fool and the little money they have. Not only are these scam artists using the Internet, they have enough guts to hold seminars in major cities to collect more money. I can tell you —- beyond any doubt —- the only thing these people know about Real Estate is their scripted plan to suck money out of victims with high hopes and dreams of making it out of this depressed economy we seem stuck in. Let me show you how it works.

How Online Real Estate Scams Work

Charges begin at the very beginning. After a free introduction online or at a local meeting which consists of NO USEFUL information —- ONLY a load of hype, people fall for these plans like an unsuspecting fish goes for a shinny lure. Things look so good, fees seem like a small investment. Let me tell you what you are investing in. There is a scripted system you are investing in. This scripted system is not designed to make any money for you! It is a system to put money in the pockets of this carefully formed network of thieves. The first charge is a set of lessons, either online or a condensed live seminar. They will tell you about some secret list of foreclosed properties. Here is the hook. They tell you only certain Real Estate Agents get this list! Any suggestion of a separate list is against local MLS rules and agreements all Real Estate Agents share. Every licensed Real Estate Agent must sign an agreement to share all their listings with all other Agents on the local MLS. There is no secret foreclosure list. These people are trying to impress you will false information. Some of them are trying to get you to work with agents they hand pick, but this is very rare. It doesn’t take much effort to gather a list of new, inexperienced agents eager to make their first sale. All these people need to do is check public records to find newly licensed Agents, who may not know what they are falling into.

The next step is to provide you with a pre-approval letter or proof of funds letter. Boy — Do these people look like an answer to prayer. After paying a fee, you get a letter and these people promise to give you money to invest in their system without checking your credit. This is too good to be true! That’s because it is not true! There is a world of difference between a letter and cold hard cash. Of course there is a fee for the letter, and a fee for a credit check, another fee for an appraisal, another fee because they feel like sucking more from you. That’s the system you are buying into. All the money flows one way!

If you happen to have funds, you can elevate to their next level of scams. You get the gold script!!! This is what they will tell you. They will tell you how to bid. Of course you have to get an offer accepted. They will tell you about their plan that never fails —- and it sounds good. But of course will never work in the end. Here is their plan. Over bid on the property. The way they explain it makes sense. After all they are trusting you with their money…. all they are asking for is your trust in return. WHAT A SCAM! You have not seen a dime from them and they are pulling the TRUST ME CARD. By this point you paid them thousands and received nothing but promises. And now you are paying for some of the worst advice I have ever heard. Of course the best properties receive multiple bids and you have to find a way of getting your offer accepted. They tell you once you over bid and get the contact, which they tell you is a legal binding contract…. which is about the only truthful matter they will tell you, the Seller and you are bound by the contract. What they fail to tell you is, asset managers seldom negotiate price after you sign a contract. There is nothing in the contract saying the Seller has to deal on the price. When you fall for this scam, you missed one very important point! The Seller has a group of cash buyers waiting in the wings who can close in a hurry. The Seller can tell you to take a walk. In the mean time, you lost more money on the scam. They tell you they have a network of inspectors to look over the property, give you a report and instruct you on how to use their report to negotiate. Two problems here. Number one, you pay them for the inspection. More money for them. Number 2 – they DO NOT use state licensed inspectors. The contracts I use in Wisconsin states: A State Licensed Inspector must be used. You just wasted your money. Any Listing Agent with a year of experience will take one look at that report and know it is a fake. When I see this, I call the so called inspector and ask for his state license number. Guess, what… the house of cards immediately folds. Next on the scripted plan to part you from your money is the fake contractors. More money out of your pocket, more in theirs. Now here is the real heart break for innocent buyers like yourself. According to the contract you have 10 days or so for an inspection. If you don’t have a good agent, that time disappears. You lost that contingency to back out of the contract and get your earnest money deposit back. The worst part of this scam is the time it takes. Before you know it, time runs out, you fail to close and find yourself in a position to loose your earnest money deposit. Notice how you are the one putting up all the money…. and they are the ones making the money? When time runs out, you are in what is known as breach of contract. You failed to fulfill your part of the agreement. Some Sellers are insisting they keep the earnest money. At this time it appears to be the only way to combat this scam. Most of the time Buyers will get their earnest money returned but when Sellers see this scam, they may not be so lenient. Collecting earnest money is a long process most Sellers will not want to go through, but one Seller instructed me to go through the long drawn out process. In the end the Buyer lost the earnest money. The whole process is nothing but a waste of time for everyone involved and a waste of money for the Buyer.

Beware the Bite

There are other details the scam artists share to appear they are looking out for you. They show you how to alter standard contracts. They want to create the appearance they have your interests at heart, but make no mistake, these scam artists are looking out for themselves. Here is a short list for you to copy and paste. If you ever attend any of these scam artist’s meetings, you can go down this list with a smile on your face and your money in your pocket.

Unexpected Fees

  • They charge fees. Every experienced Real Estate Agent has worked with successful investors and is willing to share information for free.
  • Look out for useless hype.
  • Look out for facts and figures from outside the market area you want to invest in.
  • Look out for a system insisting one size fits all.
  • Look out for secret lists and inside information only a few people have.
  • Look out for networks they may claim to have.
  • If you did pay fees for training…. get out the first time you see a fee they forgot to mention.
  • Shy away from advice on how to alter state approved contracts.
  • Avoid systems which suggest negotiations after signing a legal binding contract.
  • Avoid systems telling you to over bid without providing you with current market conditions.
  • Avoid systems based on national statistics.
  • Avoid systems which teach you how to use an inspection to renegotiate purchase price.
  • Run from all inspectors, contractors, and LENDERS who cannot produce proof of a state license. 

The only system that works involves a few simple steps.

  1. Invest in an area you know and are comfortable with.
  2. Get a list of market reports for the area and know the current trend.
  3. Know market prices for both REO purchases and resale prices for turn key properties.
  4. Work with a reliable, licensed general contractor if you are not capable of doing all the repairs yourself.
  5. Get a little background on local ordinances for vacant properties and building codes
  6. Have your own team in place including a licensed Real Estate Agent, Lender, Inspector, and contractors. Form your organization.
  7. Keep expectations realistic…. the current market will do more to determine your success than any other detail.
Investor Fequently Asked Questions

The Best Financing for Real Estate Investments

I’ve had dozens of people ask me, “what is the best source of funds to begin my Real Estate Investing carrier?” The answer is simple. A home equity loan.

I’d hate to use the old saying, “it takes money to make money.” But it does. It doesn’t matter what source you use for funds. Every legitimate lender will want you to shovel out your own money before they add in their funds. That is common sense. People have to prove they have the ability to make and save money before any lender will trust them. Of course there are online stories and online lenders who claim to know secrets. The only things secret about them is their identity and what they are planning to do with the funds they extract from their victims. Other articles on my website cover aspects about Internet Fraud in Real Estate. This article will cover the best lending advise I have run across.

I’ve seen dozens of people build small empires using nothing more than personal savings and a home equity loan. The home equity loan does one thing. A home equity loan places you the investor in charge.

So you did your homework. You have your business plan in writing. You scoped out an area to invest and waited for that great deal to come along. You view the place. You do a quick spread sheet to estimate remodeling, taxes, and other costs. Including interest payments, insurance, and closing costs. Then you make the move. You write the offer as a CASH offer. In Real Estate cash is king. No doubt about it.

How Do You Get a Home Equity Loan?

Go to your local bank. The bank you are doing business with. Talk to the loan officer. Get the rates and costs. Most costs are very low. Only a fraction of the cost of a regular mortgage. In many cases the bank will loan up to 60% or as high as 80% of the market value on your home. How does that work? Say you own a $200,000 home. Your mortgage is $120,000. That leaves you with $80,000 equity. The bank will only allow 80% of the market value which in this case is $160,000. Subtract your mortgage amount from the $160,000 and you are good for a loan up to $40,000. These of course are rough figures. But they give you an idea of what a bank can do for you and how they calculate a safe loan amount.

The bank may use the tax value on your home. A few banks may have you pay for an appraisal. Talk to your bank to see what their qualifications are.

What Are The Advantages of a Home Equity Loan?

There are many advantages. If you are using the money to purchase an investment property, you can simply write a check. This gives you the advantage of writing a cash offer. You may have to write a check from your home equity loan to deposit money into your checking account and withdraw a certified check to present at closing. Details like that should be discussed with your Real Estate Agent and Title Company.

You only pay interest on the money you draw from your home equity loan. In other words, it is like have a personal account you pay back to yourself. Of course the bank keeps the interest.

You can pay the minimum payment or pay back as much as you wish. If you purchase a property, remodel it, then sell it in 3 months, you can pay off the home equity loan and deposit the profit in your personal or business account.

A home equity loan puts you in charge. Your name is the only name on the deed for your investment property. You spend the money when you need to buy materials, pay contractors, and other costs.

Fees are much lower than other types of loans. The origination fee and annual fees are lower than other types of loans.

Your Business Plan

You have to understand the fact you are using equity from your personal home. Which brings me to the subject of taxes. Check with your account to find out if the interest is deductible. It wouldn’t hurt to have your Real Estate Attorney look at the loan agreement. Since you are placing your home on the line, you better have a written plan. A business plan. You should have a list of contractors, insurance agents, inspectors, and other professionals on hand. You should have an idea of remodeling costs. Or get a quick one day estimate. You have to work with people you know and trust. Time is money. Make sure you have a set schedule. You may have to play general contractor during the project. Make sure you have all the proper permits. And don’t forget lien waivers from all the contractors. A more detailed list can be found on other articles on this site. And we will go over details when we meet and view properties. A Real Estate Agent is more of a partner. Their incomes relies on your success. Return business deserves a reward. You can see my section on Variable Rate Commissions to see my rewards program. Everything works together for success. The first investment property may seem a little shaky. But sit down, review your business plan and schedules. Do a little fine tuning and those little dips will turn into quicker and larger profits in no time. Discuss your business with people you trust and understand your progress and goals. Teamwork is the key.

Investor Fequently Asked Questions

Real Estate Investing with Bank Funds

It may seem like using bank funds is the right choice to begin your investment carrier. You can walk into the bank, talk to people face to face, and do business the old fashion way. But wait. Remember all those old movies when the bank moved in to take over the widow’s property? Does that really happen? It can and it will if you don’t make those payments. Let me ask a question. Do you really understand the terminology in the multi-page agreement? There may be more in those papers than you expected. You may want to have a Real Estate attorney look over those loan papers before you use bank funds to begin your investment carrier.

In many cases bank funds are great for real estate investors. Bank funds have been used for years and have funded some of the largest real estate investments in the world. Which brings up a point. Why is there one standard loan agreement for the little guy, and a host of others for large investor? Of course the large real estate investor will bring in a lawyer. Or a team of lawyers. That is common sense. Then why does the small investor skip that step? How do people skip important steps and expect to make it big in real estate investing?

There may be too many factors in real estate investing with bank funds to cover in one short article on the Internet. But there are a few details to consider before you begin signing contracts and agreements.

You are in the bank. This is your first loan for your first real estate investment. You have one loan and one property. Simple. You remodel the property, resell the property, the loan is paid off, and everyone is happy. But what happens as you grow? Do you get one loan for each property? What happens when your bank offers a blanket loan? That depends on the actual agreement. In exchange for the money, the bank holds the deed to the property as collateral. That makes sense. But what if 2 or more properties are involved? Will the bank release the deed for the one property you want to sell? If that sale will pay off the loan, no problem. If you don’t have enough to payoff the entire loan, you are at the bank’s mercy.

You shouldn’t see that problem if you are buying and selling properties one at a time. Investors more often than not see that scenario when they begin accumulating rental properties. The story usually goes like this.

You decide to buy an investment property. You go to the bank you have been doing business with for years. You sit down, talk to a loan officer, they collect information, and you are qualified for X amount of dollars to buy a duplex. In most cases you will need 20% down. You have to put up some of your own cash. You find a good property. The purchase closes. You get the deed, and the bank is on there because they supplied the money. Business as usual.

You did your homework. Your investment is making money and you are trying your hardest to avoid giving the majority of the profits to the tax man. You set aside a nest egg, and decide to buy another duplex. Over the years you accumulate a few more duplexes. Your system is running smooth. Real Estate prices sky rocket and you figure out you can make more money by selling off one or two of your properties. Your accountant has a great plan that will protect you from paying a ton of taxes. Then you suddenly get a bomb dropped on you.

That’s about the time most investors find out the bank talked you into a blanket loan. All your properties are under one loan. That is when you find out if your bank is as friendly as you thought they were. The bank has to release the lien on the deed so you can sell a property. You don’t just owe the original purchase price on the property you want to sell, you owe all the purchase prices for all your properties. Either the bank will release the lien on a single property for one large payment, or you are stuck with those properties until you come up with enough money to pay off the entire loan.

The bank makes money from interest. Which is part of your monthly payment. That’s what the bank is in business for. It is like you are paying rent on the money you borrowed. You make all of your payments on time and the bank looks at you as one of their best tenants. You are stuck.

Now you know why it is a good idea to talk to an attorney before signing the papers. There are good bank loans, and loans that can place you between a rock and a hard spot. A wise real estate investor will find ways of staying in control. Every bit of control you give to someone else can come back to bite you someday.

If you think you are working with a great Real Estate Agent helping you build your business, they better be having discussions with you during every showing. They should be asking you questions and helping you put your business plan together. Also sending you information on the local market. And every good Real Estate Agent knows the best Real Estate Attorneys. Consultation with a Real Estate Attorney is one of the most important steps you don’t want to skip.

It may seem like using bank funds is the right choice to begin your investment carrier. You can walk into the bank, talk to people face to face, and do business the old fashion way. But wait. Remember all those old movies when the bank moved in to take over the widow’s property? Does that really happen? It can and it will if you don’t make those payments. Let me ask a question. Do you really understand the terminology in the multi-page agreement? There may be more in those papers than you expected. You may want to have a Real Estate attorney look over those loan papers before you use bank funds to begin your investment carrier.

In many cases bank funds are great for real estate investors. Bank funds have been used for years and have funded some of the largest real estate investments in the world. Which brings up a point. Why is there one standard loan agreement for the little guy, and a host of others for large investor? Of course the large real estate investor will bring in a lawyer. Or a team of lawyers. That is common sense. Then why does the small investor skip that step? How do people skip important steps and expect to make it big in real estate investing?

There may be too many factors in real estate investing with bank funds to cover in one short article on the Internet. But there are a few details to consider before you begin signing contracts and agreements.

You are in the bank. This is your first loan for your first real estate investment. You have one loan and one property. Simple. You remodel the property, resell the property, the loan is paid off, and everyone is happy. But what happens as you grow? Do you get one loan for each property? What happens when your bank offers a blanket loan? That depends on the actual agreement. In exchange for the money, the bank holds the deed to the property as collateral. That makes sense. But what if 2 or more properties are involved? Will the bank release the deed for the one property you want to sell? If that sale will pay off the loan, no problem. If you don’t have enough to payoff the entire loan, you are at the bank’s mercy.

You shouldn’t see that problem if you are buying and selling properties one at a time. Investors more often than not see that scenario when they begin accumulating rental properties. The story usually goes like this.

You decide to buy an investment property. You go to the bank you have been doing business with for years. You sit down, talk to a loan officer, they collect information, and you are qualified for X amount of dollars to buy a duplex. In most cases you will need 20% down. You have to put up some of your own cash. You find a good property. The purchase closes. You get the deed, and the bank is on there because they supplied the money. Business as usual.

You did your homework. Your investment is making money and you are trying your hardest to avoid giving the majority of the profits to the tax man. You set aside a nest egg, and decide to buy another duplex. Over the years you accumulate a few more duplexes. Your system is running smooth. Real Estate prices sky rocket and you figure out you can make more money by selling off one or two of your properties. Your accountant has a great plan that will protect you from paying a ton of taxes. Then you suddenly get a bomb dropped on you.

That’s about the time most investors find out the bank talked you into a blanket loan. All your properties are under one loan. That is when you find out if your bank is as friendly as you thought they were. The bank has to release the lien on the deed so you can sell a property. You don’t just owe the original purchase price on the property you want to sell, you owe all the purchase prices for all your properties. Either the bank will release the lien on a single property for one large payment, or you are stuck with those properties until you come up with enough money to pay off the entire loan.

The bank makes money from interest. Which is part of your monthly payment. That’s what the bank is in business for. It is like you are paying rent on the money you borrowed. You make all of your payments on time and the bank looks at you as one of their best tenants. You are stuck.

Now you know why it is a good idea to talk to an attorney before signing the papers. There are good bank loans, and loans that can place you between a rock and a hard spot. A wise real estate investor will find ways of staying in control. Every bit of control you give to someone else can come back to bite you someday.

If you think you are working with a great Real Estate Agent helping you build your business, they better be having discussions with you during every showing. They should be asking you questions and helping you put your business plan together. Also sending you information on the local market. And every good Real Estate Agent knows the best Real Estate Attorneys. Consultation with a Real Estate Attorney is one of the most important steps you don’t want to skip.

Investor Fequently Asked Questions

Investing with Hard Money

If you are interested in investing in Real Estate, do you have the funds available to begin and finish the project? There is the old saying, “a fool and their money are soon parted.” Over my 15 years of Real Estate experience I’ve seen too many people with big dreams and small bank accounts. Some people watch 10 minutes of a half hour home improvement video and think they are qualified to handle any home remodeling job. I have news for you. The property will cost money. Tools and material cost money. And of course you have to pay those property taxes. I will cover facts about choosing the right property for investment in other articles. This article will deal with Investing with Hard Money.

Hard money lenders are a catch word in the Real Estate market for investors that loan money to people who buy, remodel, and sell homes. They are commonly known as flippers. Is hard money lending a good idea? It may and may not be. You have to know who you are dealing with. I would personally avoid any overseas lending companies you find on the Internet. They may or may not actually exist. If you don’t have a substantial amount of funds for a down payment and unexpected issues, you may want to stay out of Real Estate investing. Like everything else, it takes money to make money in Real Estate.

Look for local hard money lenders. Someone who you can meet face to face. They do exist. Have your attorney look over the paperwork and agreement. A consultation with an attorney could wind up saving you thousands down the road.

Hard money loans are generally for properties that will be purchased and quickly sold. Normally within 6 months. Interest and up front costs do vary. You will be paying a much higher rate than normal banks will charge. Check with local lenders to see what loan packages they may offer. A home equity loan may be a good source of funds.

I’ve seen investors try to use hard money loans to build an empire of rental properties. The problem is, hard money loans charge high interest rates, may be short term, and require high renewal fees. All of that cuts into your profit.

Image result for building house of cards wikiI’ve seen investors whose kingdom is a house of cards. Borrowing from one source to pay off one loan, then another, and another. Applying for charge cards, borrowing on those until they reach the limit, then searching for other sources. This is usually in the rental sector. You would expect to have tenants pay their rent on time. But that is not always the case. I’ve heard it before. All of a sudden a rash of tenants comes up short. Short enough that payments are not made and the foreclosure bandwagon moves in to pay their tune. You don’t want that to happen to you. Local banks have investment packages. But you have to watch out for certain conditions on those loans. I will cover those details in another article.

Hard money loans normally carry from 10-18 percent interest. Do the math. Gather all the figures and see what the sale price could bring. Then look at your profit. Is it worth all that time and work? Everyone wants a piece of your pie from the lender to the tax man and the insurance agency. Plan accordingly.

Farm

Right to Farm Law Update

What do you think, “Right to Farm Laws,” do for you? I know there are two sides to every issue. Homeowners want to pursue peace and quiet in a clean and wholesome environment free from harmful and annoying noise and odors. On the other side of the story is a family trying to make a living with enough troubles from changing weather, regulations, increasing taxes, and operating costs.

The usual story we hear concerning farming is after a new subdivision is built, people move in, and the country life does not agree with their dreams and what they imagined before making the move. So someone or a group files a complaint and then a lawsuit against the farmer or farmers in the area. The lawsuit may be as trivial as too much noise in the early morning to chemical over spray. Which may cause health issues. On the other hand, odors from chicken farms, manure spreading, and other sources are other popular complaints. Does the new neighbor or neighborhood have the right to put the farmer out of business, or make them spend countless funds to rectify a situation they lived with all their lives? My suggestion is to investigate the situation and location before you decide to purchase any home inside or outside the city. You are not only moving into a home, you are moving into a community.

It seems there is no open and shut case or clear explanation when it comes to farm rights. Everything hinges on who or what was on the location first. If the farm was conducting general business before a new residential area was added, the farm will generally have certain rights to claim. If a new operation is added that turns out to be a nuisance, the new residents may have a complaint. Every complaint is heard on a case by case basis.

Problems may arise. Remember, farming communities were based on the neighbor helping neighbor policy where a face to face meeting and a hand shake is worth more than gold. Talk it over with your neighbor. See of you can come to a solution, or find out the nuisance is only temporary. A good talk can solve problems and help you sleep at night.

This link is a rather detailed explanation of Wisconsin farm laws, and protection for farms. It is rather general. If problems escalate, the best step is to consult with an attorney who is familiar with farming laws and protection.

https://docs.legis.wisconsin.gov/misc/lrb/wisconsin_policy_project/wisconsin_policy_project_2_5.pdf

Frequently Asked Questions Real Estate

Smart Phones and Homes

There is something you may not have considered with your next home purchase. What if your next home includes some of the new so called, “smart devices?” What if the Seller has set up their home with door locks, surveillance, heating controls, and other controls on the house? If the proper measures are not taken, the Seller will still have access to your new home and control over features you don’t want anyone to control.

Buying a home with smart features requires another layer of preparation and for lack of a better term, set up. No one wants a former owner with access to video cameras, heating units, stove, refrigerator, nor the front door. So how do you protect yourself against the possibility of invasions when the house is transferred from one owner to another?

Smart Home Options

It seems there are a lot of options when it comes to purchasing smart home equipment. Most easily link to a smart phone app that offers a variety of options. When you read up on some of those options, it becomes apparent that some companies didn’t plan for the sale of the home and those features. What are the options? Depending upon the actual product, there may be no option other than to remove the equipment. At whose expense? Other smart home products offer a seamless transfer from one user to the next. Some products may offer agreements that can be included in the Offer to Purchase and final closing documents. That type of information is important. A good Listing Agent can and should investigate those types of scenarios and plan ahead. Those types of features need to be disclosed during the sale process.

Changing Smart Home Users

Smart devises normally operate through an application on a smart phone. They all require a password that is saved to your phone. The easiest way to transfer ownership of smart devices for the home is to:

  • Install the smart devise app on your phone.
  • You will need the password from the previous owner to access the devises.
  • The previous owner can change their password to a temporary password to transfer ownership and control.
  • The new owner enters the current password, accesses the account, then changes the password so only they have access to the smart devises.
  • Other set up may be required.

It’s a good thing we have the Internet and companies who market smart devises for homes have websites. Those websites have instructions and manuals that can be downloaded and reviewed. Most also have online support. Check with the Seller before the transaction is complete to get details on support. Is the support free? Is support limited, or lifetime? Are there fees involved in a transfer? Are there monthly fees involved? There are a number of questions that could come up. All of these details have to be addressed before the final closing and transfer when the home will be occupied by the Buyer.

Crossroads Real Estate Marketing

Crossroads Real Estate Marketing

Crossroads Real Estate has taken Real Estate marketing to a whole new level. Forget the one size fits all marketing strategy. That one size fits all theology may sell houses, but at what price? And who pays that price? Crossroads Real Estate does not apply the one commission fits all sizes concept to any seller or listing. Each property, Buyer, Seller, Client, and Customer are unique. Each requires a different approach and technique to assure success on both sides of every transaction.

Crossroads Real Estate Marketing is based on a long list of proprietary information. Few if any other Brokers in the nation use marketing techniques honed by years of experience, the local market, changing market conditions, economic conditions, and forecasts.

Crossroads Real Estate Marketing utilizes a high degree of research focused on understanding the local market. In turn that research reveals a number of Buyer interests. Buyers do have different interests in the same property. There can be anywhere from 3 to 6 major interests in any property. Each interest requires a different marketing approach to draw the greatest number of qualified Buyers to a property.

In many cases Crossroads Real Estate marketing results in multiple offers for the Seller to review. That is the goal. On the Broker side, multiple offers require more time, work, and effort. For the Seller, multiple offers places the Seller in the drivers seat and in most cases, places the Seller in a more relaxed stage throughout the sale process.

What does Crossroads Real Estate Marketing consist of? The actual process is proprietary information. Some of the general steps consist of gathering local market data. Automated systems are installed and refined to suit specific needs. Working with a Linux based system is one of the most important keys. Linux based systems are more secure. Which not only protects client information, but protects the actual process used by Crossroads Real Estate from prying eyes on the Internet. Internet security is a major concern for Crossroads Real Estate.

As you all know, Linux systems require a certain degree of programming knowledge and skill. Simple computer applications can track and report on local market conditions and changes that can effect the entire marking concept. A few properly timed changes to the marketing concept on a property can make all the difference.

Rest assured, Crossroads Real Estate does not rely on any third party involved with Internet information gathering, which most often relies on spyware, and selling information. All of the information used by Crossroads Real Estate is actually public information offered by the most reliable sources in the nation. The best news is, this information is free. Which allows Crossroads Real Estate to offer its clients the best commission rates in the area, along with services that go way beyond the cutting edge of the Real Estate Industry in general. This information and its sources is shared with Buyers and clients to help equip themselves with the information they need to make the right choice when it comes to making the decision on the next property they will purchase. Information is power.

Computers are a tool. The information is out there and available. All it takes is a little imagination and a few computer skills to put the best package together, and offer services the competition has never dreamed about. Crossroads Real Estate marketing brings that concept to reality. And with that concept and technology comes the innovative marketing techniques that Buyers and Sellers need to stand above the crowd.