Schizophasia Blog

Landlords and rehabbers take notice - you may soon be focused on the new concepts of “Virtual Real Estate Investing“. Everything from using the internet as an avenue to make more money in real estate to online games such as SecondLife seem to be included in the popular definition of this term.

To get the facts, I sought out the man generally considered to be the father of virtual real estate investing: Bryan Ellis of BryanEllis.com.

When I began using the term virtual real estate investing in the late 1990s, I did so because I saw clear parallels between the strategies used for profiting from physical real estate and those that would create income in the online world, said Ellis.

One example of the parallels between virtual and physical real estate Bryan Ellis cites is the similarity between the monetization of domain names versus physical property. “There’s a huge difference between a website and a piece of real estate, but the ways you can profit from them are similar: ‘flipping’, rental/leasing, advertising sales, etc…all of these apply to both markets” he states.

The parallels really are obvious. Consider: A valuable piece of real estate is valuable largely due to the interest that other people have in that specific location. Similarly, ownership of a desirable domain name is valuable for the same reasons. So it doesn’t matter if you own physical real estate or virtual real estate - you’ll likely use similar strategies to turn them into money in your pocket.

In our next installment of this series on virtual real estate investing, Bryan Ellis will share the internet analogies to the physical concept of real estate development.

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Donald Trump, a real estate tycoon says, “It’s tangible, it’s solid, it’s beautiful. It’s artistic, from my standpoint, and I just love real estate.”

Real estate is the term that covers land and other things that are permanently attached to it such as buildings. It is considered as synonymous to real property or realty. It is the exact opposite of personal property, chattel or personalty.

People behind a real estate investment must be good in purchasing and selling realties. They must buy, develop, appraise and sell lands, houses and buildings wisely in order to do business productively.

For sure, they know how to profit. Not jut ordinary profit but rewarding and fulfilling one.

However, in order to have a financially rewarding experience, you must be knowledgeable with the ins and outs of the real estate investment. Ask your self: Is the business deal you are about to enter into a good deal? How do you know if it is?

You must know first the techniques behind the real estate investment before you can be ready to enter it.

There are also keywords on real estate investment that you have to master and here they are:

1. Wealth flow. The first thing to consider in a real estate investment is the flow of money. You have to ask your self first. Is this realty viable? How persuasive can it be to the target market? Will this investment provide them future income? Aside from those, also ask your self, how important is personal income to you?

2. Leverage. Leverage, with regards to real estate investment, is the use of borrowed funds in order to purchase realty. This is done with anticipation that the purchased realty will boost the profit.

This process is important to investors. This is because the lesser cash you give on each realty the more you can have additional purchases. This does not end here, if the value of the properties soar, the profit will also increase exponentially.

3. Equity. Real estate investment equity may take several forms. These forms include foreclosure, re-zoning opportunity, discount, potential fixer upper and defectively managed property.

There are many ways of generating equity but the best way is buying into equity. You can do this by searching for a seller who wants to dispose of his property and that he is willing to renounce his equity for lesser that its full value.

4. Appreciation. Real estate investment is all about purchasing the right realty in order to realize great profits.

This can be a pretty difficult at times. This is because real estate is speculative and risky. You can be up on one point and down on the other.

5. Possibility. As you have read, real estate investment is pretty risky. If the realty did not appreciate in value, what will you do?

There are different outcomes available in real estate investment. They include overwhelming profits, average income and terrible loss. The latter is the most debilitating of them all.

6. Limited Liability. One of your concerns about real estate investment is the manner in which you can limit your liability. Perhaps, you know already that the real estate investment world is susceptible to unlimited liability. Be cautious of this fact. Be sure to limit your liability up to the maximum extent.

If you have already found a realty that satisfies you investor instincts, you are now more aware of what to do and what to ponder.

Robert Thatcher is a freelance publisher based in Cupertino, California. He publishes articles and reports in various ezines and provides real estate investment resources on http://www.best-real-estate-investments.info

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Using a credit line to borrow against the equity in your home has become a popular source of consumer credit. And lenders are offering these home equity credit lines in a variety of ways.

You will find most loans come with variable interest rates, some come with attractive low introductory rates, and a few come with fixed rates. You also may find most loans have large one-time upfront fees, others have closing costs, and some have continuing costs, such as annual fees. You can find loans with large balloon payments at the end of the loan, and others with no balloons but with higher monthly payments.

No one loan is right for every homeowner. The challenge, then, is to contact different lenders, compare options, and select the home equity credit line best tailored to your needs.

Be sure to review the home equity contract carefully before you sign it. Do not hesitate to ask questions about the terms and conditions of your financing.

Is a home equity credit line for you?

If you need to borrow money, home equity lines may be one useful source of credit. Initially at least, they may provide you with large amounts of cash at relatively low interest rates. And they may provide you with certain tax advantages unavailable with other kinds of loans. (Check with your tax adviser for details.)

At the same time, home equity lines of credit require you to use your home as collateral for the loan. This may put your home at risk if you are late or cannot make your monthly payments. Those loans with a large final (balloon) payment may lead you to borrow more money to pay off this debt, or they may put your home in jeopardy if you cannot qualify for refinancing. And, if you sell your home, most plans require you to pay off your credit line at that time. In addition, because home equity loans give you relatively easy access to cash, you might find you borrow money more freely.

Remember too, there are other ways to borrow money from a lending institution. For example, you may want to explore second mortgage installment loans. Although these plans also place an additional mortgage on your home, second mortgage money usually is loaned in a lump sum, rather than in a series of advances made available by writing checks on an account. Also, second mortgages usually have fixed interest rates and fixed payment amounts.

You also may want to explore borrowing from credit lines that do not use your home as collateral. These are available with your credit cards or with unsecured credit lines that let you write checks as you need the money. In addition, you may want to ask about loans for specific items, such as cars or tuition.

How much money can you borrow on a home equity credit line?

Depending on your creditworthiness (your income, credit rating, etc.) and the amount of your outstanding debt, home equity lenders may let you borrow up to 85% of the appraised value of your home minus the amount you still owe on your first mortgage. Ask the lender about the length of the home equity loan, whether there is a minimum withdrawal requirement when you open your account, and whether there are minimum or maximum withdrawal requirements after your account is opened. Inquire how you gain access to your credit line — with checks, credit cards, or both.

Also, find out if your home equity plan sets a fixed time — a draw period — when you can make withdrawals from your account. Once the draw period expires, you may be able to renew your credit line. If you cannot, you will not be permitted to borrow additional funds. Also, in some plans, you may have to pay your full outstanding balance. In others, you may be able to repay the balance over a fixed time.

What is the interest rate on the home equity loan?

Interest rates for loans differ, so it pays to check with several lenders for the lowest rate. Compare the annual percentage rate (APR), which indicates the cost of credit on a yearly basis. Be aware that the advertised APR for home equity credit lines is based on interest alone. For a true comparison of credit costs, compare other charges, such as points and closing costs, which will add to the cost of your home equity loan. This is especially important if you are comparing a home equity credit line with a traditional installment (or second) mortgage, where the APR includes the total credit costs for the loan.

In addition, ask about the type of interest rates available for the home equity plan. Most home equity credit lines have variable interest rates. These variable rates may offer lower monthly payments at first, but during the rest of the repayment period the payments may change and may be higher. Fixed interest rates, if available, may be slightly higher initially than variable rates, but fixed rates offer stable monthly payments over the life of the credit line.

If you are considering a variable rate, check and compare the terms. Check the periodic cap, which is the limit on interest rate changes at one time. Also, check the lifetime cap, which is the limit on interest rate changes throughout the loan term. Ask the lender which index is used and how much and how often it can change. An index (such as the prime rate) is used by lenders to determine how much to raise or lower interest rates. Also, check the margin, which is an amount added to the index that determines the interest you are charged. In addition, inquire whether you can convert your variable rate loan to a fixed rate at some future time.

Sometimes, lenders offer a temporarily discounted interest rate — a rate that is unusually low and lasts only for an introductory period, such as six months. During this time, your monthly payments are lower too. After the introductory period ends, however, your rate (and payments) increase to the true market level (the index plus the margin). So, ask if the rate you are offered is “discounted,” and if so, find out how the rate will be determined at the end of the discount period and how much larger your payments could be at that time.

What are the upfront closing costs?

When you take out a home equity line of credit, you pay for many of the same expenses as when you financed your original mortgage. These include items such as an application fee, title search, appraisal, attorneys’ fees, and points (a percentage of the amount you borrow). These expenses can add substantially to the cost of your loan, especially if you ultimately borrow little from your credit line. You may want to negotiate with lenders to see if they will pay for some of these expenses.

What are the continuing costs?

In addition to upfront closing costs, some lenders require you to pay continuing fees throughout the life of the loan. These may include an annual membership or participation fee, which is due whether or not you use the account, and/or a transaction fee, which is charged each time you borrow money. These fees add to the overall cost of the loan.

What are the repayment terms during the loan?

As you pay back the loan, your payments may change if your credit line has a variable interest rate, even if you do not borrow more money from your account. Find out how often and how much your payments can change. You also will want to know whether you are paying back both principal and interest, or interest only. Even if you are paying back some principal, ask whether your monthly payments will cover the full amount borrowed or whether you will owe an additional payment of principal at the end of the loan. In addition, you may want to ask about penalties for late payments and under what conditions the lender can consider you in default and demand immediate full payment.

What are the repayment terms at the end of the loan?

Ask whether you might owe a large payment at the end of your loan term. If so, and you are not sure you will be able to afford the balloon payment, you may want to renegotiate your repayment terms. When you take out the loan, ask about the conditions for renewal of the plan or for refinancing the unpaid balance. Consider asking the lender to agree ahead of time and in writing to refinance any end-of-loan balance or extend your repayment time, if necessary.

What safeguards are built into the loan?

One of the best protections you have is the Federal Truth in Lending Act, which requires lenders to inform you about the terms and costs of the plan at the time you are given an application. Lenders must disclose the APR and payment terms and must inform you of charges to open or use the account, such as an appraisal, a credit report, or attorneys’ fees. Lenders also must tell you about any variable-rate feature and give you a brochure describing the general features of home equity plans.

The Truth in Lending Act also protects you from changes in the terms of the account (other than a variable-rate feature) before the plan is opened. If you decide not to enter into the plan because of a change in terms, all fees you paid earlier must be returned to you.

Because your home is at risk when you open a home equity credit account, you have three days to cancel the transaction, for any reason. To cancel, you must inform the lender in writing. Following that, your credit line must be cancelled and all fees you have paid must be returned.

Once your home equity plan is opened, if you pay as agreed, the lender, in most cases, may not terminate your plan, accelerate payment of your outstanding balance, or change the terms of your account. The lender may halt credit advances on your account during any period in which interest rates exceed the maximum rate cap in your agreement, if your contract permits this practice.

Credit Card Help Desk was created as a site to help people with all there credit related questions. If you found this article helpful then you should take the time to visit our site and explore the many articles we have. You will find information on credit cards, mortgages, debt consolidation, credit reports, and much more.

Credit Cards, Mortgages, Debt Consolidation, Personal Loans, and More - Free Information

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You may be faced with the situation where you have to sell your house fast. The circumstances may be due to bankruptcy or an impeding foreclosure. So, how do you make sure that you get the best bargain and the best price at such times? Haste does make waste, but it need not necessarily be so under such circumstances with a little prudence and care. You can consider the following points.

BE PREPARED: You must be mentally prepared to sell your house. This will not be easy especially if you have been living in it for number of years. But it is a very essential step if you want to get the best advantage out of your sale.

INSPECTION TIME: Get the house inspected by a professional at once, so that any major defects can be discovered, before they cause any problems with potential buyers. This will help to avoid last minute glitches in the deal.

POLISH UP: Look at your house objectively and remove any flaws at once. Take the opinion of others too. Everyone must be consulted. By getting an open view of the flaws, you will be better prepared while deciding on the sale price of the house.

SPRUCE UP: A clean house will help you sell it better. Hiring a professional company to clean the house will be a very effective step in clinching the sale early. Do declutter the house, before showing it to prospective buyers. The less cluttered your home appears, the bigger it will appear. Do clean out and organize your closets, especially as closets can be a big seller. The larger your closets appear, the better your chances of selling the house will be.
Do give the house a fresh coat of paint. A neutral decor will be more appealing to the buyer, as it will help them see their own belongings in your home. And this will help you to sell the house more quickly.

REMOVING YOURSELF: Depersonalise your house at once, before showing it to prospective buyers. Your aim is to get the buyers to feel themselves in the house. If it is full of your personal articles and family pictures, it is not going to create much of an impact on the potential buyer. Buyers must be able to see themselves in the house, which is nearly impossible if everywhere they turn they stare at you! If you have a lot of pictures in your home, you may want to store some of them. The fewer pictures of you and your family, the quicker the sale.

PRICE IT RIGHT: The price is the most deciding factor while selling a house quickly. To sell your house fast you have to find a price that is attractive to buyers. If you price it wrong, it is not going to sell at all. You can definitely avail the services of a house agent who will help you fix the right price for your house. Remember, that as the house owner, you will not be able to fix the correct price objectively,
Do take market trends into account and if you have employed a house agent, follow his advice and set the right price. The best way to find out the market trend is to look for comparable houses in your neighbourhood that sold fast. Find out how much they sold for and compare your price to the prices the other houses went for. If the price you have fixed is above those prices, you need to do some serious rethinking

SET LIMITS: You must have a fixed plan in mind on your sales plan for the house. After fixing the sale price, you must set up your limits of flexibility. Define your initial asking price. Decide the time you will need before making a reduction? Set up the amount of cut you will accept in the price. Having a plan in place will help you react quickly and help to move the sale of your house just as fast.

By following these points you are definitely on the right path to selling your house quickly and getting the right price for it. So you need not fear that disclosure or bankruptcy, as you have the right price for your house.

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As a home inspector, I get to see many mistakes by people selling their home without a real estate agent, commonly referred to as FSBO’s or For Sale By Owner. If you do your homework and research and have some financial sense, you can probably sell your own home. However, I see many people who fail when going this route.

Here’s why:

1. Pricing The Home Too High: Seems everyone thinks they live in a goldmine. The common misconception is that they will price it high so they can come down a little bit during negotiations. This has several problems related to it.

Here’s one. Many homebuyers are on a budget. Let’s say I’m looking for a home like yours in your neighborhood and most of the homes there that are comparable are in the 135k to 145k ranges. However, you have tile floors and stainless steel sinks along with a few other cosmetic improvements. You think your home is worth at least 147k. Tack on a few thousand more “so you can come off of the price during negotiations” and you start your home at 152k

As a homebuyer, the most I can spend is 145k. Although your home is what I’m looking for, you’re outside my price range so I won’t even bother to look at your house.

That’s just one example of how a too high price is going to hurt you. There are many, many more!

2. Letting Emotions Direct Your Actions: Many times this is the reason your home is priced too high. Remember, this is a business transaction. You have a product to sell, you need act accordingly.

3. Failing to Get Your Home Inspected Before Listing: I’ve seen FSBO’s go to great trouble and expense to get their home ready to sell only to find out from the potential Buyers Inspector that there are major structural, plumbing, electrical or mechanical issues with the home.

Depending on the severity of the problems, this probably cost you a Buyer and it means your home will be sitting on the market for a few more weeks or months.

National survey’s reveal that homes that have had pre-inspections sell faster with less hassle at closing. FSBO’s are no different.

4. Being a Jerk: I see this one more than you’d think. For some reason selling your home by yourself seems to give you a special excuse to be a jerk judging by the way some FSBO’s act.

Being unreasonable in your actions will drive away Buyers. No one likes a jerk!

I’ve seen FSBO’s make some of the most stupid request of Buyers like; one guy would only show his home on Sunday afternoons between 4 and 6 p.m. and you had to RSVP so he’d have you on his “list”. He wondered why no one was showing up at this home. I saw another FSBO that would not allow his home to be inspected without him, his attorney and his inspector being present. He also required each item to be brought up to him and his group before telling the Buyer. Needless to say, we didn’t inspect this home. Note: many state SOP’s require that you do not divulge information to anyone other than the Client.

It’s a fact of life, being a jerk cost you money. Not only in real life, but also when you go to sell your home!

5. Not Pre-qualifying Your Buyers: Letting any old Moe and Joe lock up your home while they try and get qualified can cost you Buyers if they fail to qualify for a loan. Require that all potential Buyers be pre-qualified!

You have permission to distribute, copy and share this article in any way you see fit as long as the article remains intact including the resource box below.

Donald Lawson is a Houston Texas home inspector (Lic (#5824) and Oklahoma (#454). He currently owns and operates V.I.P. Home Inspections, a multi-inspector firm in Houston Texas. You can find out more by clicking here Houston Real Estate.

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If you are looking for a mortgage refinance, it never hurts to shop around for the best rate and deal. Shopping around could mean the difference between paying or saving thousands of dollars in closing costs, and interest fees’.

If time happens to be on your side, and you don’t need to refinance your mortgage immediately, take some time to educate yourself about the mortgage industry.

By educating yourself about the mortgage industry, you are essentially putting yourself into the driver’s seat.

There is so much mortgage jargon, terms, and definitions that will be thrown at you when considering a mortgage refinance, that it is impossible for any one person to understand everything.

It is not necessary to become an expert in the mortgage industry. You just need to have somewhat of an understanding. This way, while you are shopping around for a mortgage refinance, your decision on which lender you want to work with, will be all the more educated.

The mortgage industry is a very competitive one, so by shopping around, and making it clear that you are shopping around to the lenders or brokers you are dealing with, they will be forced to come back at you with the best deal possible. They know that they are competing with other mortgage companies, and they will not want anyone else to get your business, so they will offer you the best rate available to them in order to keep your business.

Keep in mind when a loan officer or broker offers you a deal that sounds too good to be true, it just may be, so be careful. You don’t want to get to the closing table only to find out you are not getting what you thought you were getting.

Remember, before you commit to a lender, ask for everything they told you to be sent to you in writing, this way you won’t have any surprises at the table.

This is why it is so important to educate yourself about the mortgage industry.

With just a fair amount of knowledge, you will have a general understanding of what you are being offered, and you will be able to determine whether or not the deal is reasonable.

My suggestion to you would be to allow for up to four loan officers or brokers to assess your situation. Whichever one comes back with the best, and most reasonable deal, should be the one for you to consider.

Jennifer Hershey has more than twenty years of experience in the Mortgage Industry as a loan officer. She is the owner of www.explainingmortgages.com/, a mortgage resource site devoted to making mortgage terms and products easy to understand.

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In the first three months of 2002, just 9% of all new mortgages were taken as interest only - but by the last quarter of 2005, the figure had risen to 23%. And amongst first time buyers, the figures rose from 6% to 15%. (Source: Council of Mortgage Lenders.)

The reason is obvious. It’s down to family economics. With an interest only mortgage, the monthly repayments only repay the ongoing interest so your monthly repayment is low. Repayment of the capital borrowed is delayed to the end of the mortgage when it has to be repaid as a lump sum.
So the popularity of interest only mortgages is a reflection of borrowers wanting to minimise their fixed monthly outgoings in order to preserve their lifestyle - they still want their nice cars, nights out and holidays abroad. But their reluctance to cut back on their life style spending, combined with steadily rising house prices, could be storing up problems for the future. If they’re not repaying some of the capital now, how are they going to repay it?

Egged on by the concerns voiced by the Financial Services Authority (FSA), many lenders are now becoming much stricter when assessing an application for an interest only mortgage. They’re insisting that there’s a viable repayment vehicle in place before they’ll payout the money. These repayment vehicles could be the tax-free cash forecast from a pension policy, or an ISA or some other regular investment or savings scheme. The danger is that having got the mortgage, the borrower subsequently cancels their savings scheme.

If that were to happen, when retirement finally arrives accompanied by the looming commitment to repay the mortgage capital, they’ll be faced with having to sell their home and down size simply to free up money to repay the mortgage. And that’s a scenario that lenders and the FSA are anxious to avoid.

Twenty years ago interest only mortgages were the accepted norm with endowment policies being used as the most popular investment to repay the capital. But as we now know, returns on endowment policies have not been as high as many had assumed. This has left thousands of homeowners with a capital repayment shortfall. Endowment policies have certainly failed to be the “guaranteed ” repayment solution that many of us had assumed twenty years ago. So, in today’s economic and investment environment, how certain can you be of any scheme to repay the capital?

When the shortcomings of endowment policies slowly became understood, interest only mortgages fell out of favour and repayment mortgages took over as the norm. But once again the pendulum is swinging. Interest only mortgages are back in a big way. It’s the result of high house prices and people straining to get onto and up the housing ladder without wanting to economise on other areas of their spending.

We’re sure that the pressures within family finances will continue to fuel the demand for interest only mortgages. However, it becomes the duty of mortgage brokers and the lenders to point out the alternatives open to their clients.

In the past, a 25 year mortgage term has been the norm for a young buyer. But now they can stretch the repayment period to 30, even 35 years. This makes the payments on a repayment mortgage far more affordable.

For example, the monthly repayments for a £125,000 repayment mortgage over 25 years at say, 4.9% cost £731.69 per month, but if the repayment period was stretched to 35 years, the repayment drops to £628.16 per month, a cash flow saving of £103.53.

The idea is that as and when family finances permit, borrowers can reduce the capital outstanding by making optional lump sum repayments. In practice, people tend to move house every eight to ten years and at each move a new mortgage has to be organised. These moves then represent an obvious opportunity to reassess long-term family finances.

But other solutions are available. You could arrange a mortgage where part of the loan is on a repayment basis with the balance on interest only. It’s a mid way option. At least these types of mortgage start the repayment process and later when you move home or the family income builds, you can take the opportunity to reassess the most suitable type of mortgage.

But please bear in mind that you shouldn’t speculate when it comes to your home finances. Mortgages are complicated and there is never just one solution. Our advice is take professional advice and use a mortgage broker who can search the entire market.

Brokers Online are a large uk finance based finance site specialising in Mortgages, Remortgages and Cheap Life Insurance all online.

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Refinancing can save you thousands of dollars in interest costs or alleviate your budget woes with a lower monthly payment. But not all refinancing products or lenders are created the same. You need to find rates and terms that fit with your needs. Fortunately, mortgage lenders can provide answers if you ask them the right questions.

1. What refinancing loan products do you offer?

Most mortgage lenders offer the same terms and rates for refinancing as they do for original home loans. That means you can apply for fixed or adjustable rates, or interest only loan. You also have flexibility with your terms. So you can lower your payments with an extended loan or get on the fast-track to pay off your mortgage with a shorten loan period.

Keep in mind that your loan features affect your refinancing rates and closing costs. For example, adjustable rate mortgages usually start off two points lower than fixed rates. If you plan to only stay in your home for a couple of years, this is a good refinance option for you. However, since rates can increase after the introductory period, a fixed rate refinance is better for those planning to keep their loan for several years.

2. What are your rates and fees for my credit?

Rates posted on websites or bank lobbies are great for getting a general idea about lenders. But for numbers to base your refinance decision on, ask for a personalized loan quote that includes the rate and fees.

Online refi lenders can usually get you a loan estimate within minutes based on credit information you provide. Or you can opt for a more accurate estimate by allowing lenders to access your credit report.

Just remember that each credit check temporally hurts your credit report, unless all the lender checks occur within the first 30 days. So once you begin asking for quotes, don’t put off your refinance decision.

3. How long does it take to lock in rates?

For lenders with the most promising rates and fees, ask how long it takes to lock in those good deals. Some mortgage companies will allow you to secure those rates by accepting your application online. Others require you to provide additional paperwork before they quote a final rate. With these companies, it’s important return forms immediately and follow-up with a phone call to make sure you lock in the rate before it rises again. For a list of reputable mortgage lenders who offer home refinancing see www.abcloanguide.com

With thousands of dollars in the balance, taking the time to ask a few questions is well worth the effort. When you have the proper information, you can make the right refinance decision for you.

View our recommended Refi Home Mortgage Loan lenders, and also see our reputable Online Home Mortgage Refinancing providers.

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