As private investors and members of the Star Investment Group, we're familiar with many ways to acquire and sell property. We've been assisting homeowners who have fallen on hard times or who were just tired of being in the landlord business, but were afraid of serious tax consequences if they were to sell their property(s). On the other hand, We've also assisted buyers in acquiring their first home even with bad credit and very little money for a down payment. When you understand the many options available outside of the traditional Real Estate transaction, you can achieve peace of mind much faster. Call us for a no cost confidential consultation.
7 Important Questions Every Investor Needs to Ask
1. How can I maximize the equity I have gained in recent years and leverage it into a much greater real estate portfolio with greater cash flow?
2. How can I reduce my investment risk factors by diversifying my portfolio should the market adjust?
3. How can I reduce the stress and time I spend managing my properties without sacrificing income or growth potential?
4. How can I minimize or defer the tax burden for my heirs, and myself and still grow my asset base?
5. How can I utilize the same strategies employed by the large institutional real estate investment firms?
6. Am I holding Title to my properties in a way that protects my estate and me?
7. Am I utilizing the maximum amount of depreciation?
If you’re not sure of the answers, please feel free to call. As real estate professionals, we are here to provide you with direction in these areas.
In most situations, investment properties amount to our most important and lucrative investments. Doesn’t it make sense to maximize their growth and potential?
Lease Options If You’re The Seller:
This is a great option to sell a piece of property to a buyer who may need to work out a few dings on their credit report and you need a guaranteed cash flow on your property. We find a qualified buyer who is willing to pay an Option Fee that is their promise to purchase at a specified time and price and pays you monthly rental payments. At the specified time, they will obtain their own loan to purchase the property. If they don’t exercise their option to purchase as agreed, the Option Fee is usually yours to keep depending on how the agreement was written and accepted. You can choose to renegotiate the lease or part ways and get another Lease Option Tenant Buyer. Another benefit is that the Optionor is more apt to care for the property than a regular tenant because they view themselves as an owner and want to care for “their” property!
Lease Options If You’re The Buyer:
As stated above, you may need some time to clean up your credit before you can obtain a loan. If you have some funds available, you may want to consider a Lease Option Purchase that locks in your purchase price and then you can exercise your option to buy before the option is due or at the specified time. The benefit to you is that you can use your monthly rent payments to show that you have been making payments on time and this will improve your credit rating much faster and you’ll be living in your new home today.
Sometimes a buyer may not have enough down payment to qualify for a loan. Or maybe they don’t want to use all of their available funds so they can make some home improvement modifications or upgrades. You can loan them the difference and receive monthly payments. Your loan is secured by the property so if they fail to make the payments, you can foreclose and take back the property. Your loan would be subordinate to the 1st mortgage, meaning it would be considered a 2nd on the property. If the buyer makes the payments on your 2nd, but doesn’t make the payments on the 1st, you can be notified of the default so you can cure the default and then foreclose on the 2nd and take back the property. If you’re relying on the income to subsidize your retirement income, you can state that the Note cannot be paid off for a certain period of time or include a hefty pre-payment penalty to guarantee you a certain income stream and avoid having to pay taxes if they paid it off sooner than you expected.
As private investors, we sometimes rely on private investors to fund transactions for us and our clients. These Private Investors have cash to lend and are dissatisfied with the rate of return they are receiving on Savings, CD's and Money Market Accounts from banking institutions or the volatility of the stock market. They are usually looking for short-term investments secured by real estate that provide higher rates of return. A typical bank will pay a small interest rate for the use of this money and then turn around and invest that money in real estate or other loans that are secured by real estate to guarantee that small rate and a profit for themselves. But, if you were to BECOME the lender, you could net substantially more by offering to lend your money secured by real estate for a higher interest rate or you could share in the profit when the property is sold. If you are interested in making higher returns on your money, please complete this questionnaire.
Everyone has a unique requirement and these are just a few of the more common solutions available. If you have a concern or need involving real estate, call us to discuss your options in more detail. There’s no obligation.
This information is provided for education purposes only. Parties should always contact competent legal and financial counsel to detemrine proper legal and financial remedies.