real estate infos

Archive for February, 2011

What You Need To Know About Real Estate Options

The first thing to understand about real estate option is that real estate option is not an absolute. There is no such thing as a generically “good” real estate option.

A property that is good for a residential dwelling is not necessarily good for an apartment an office building a factory and the like. Assessing the value of a property always requires the strategic perspective.Howeverwhen fully understood properly prepared and used correctly real estate options are an excellent way to conserve capital create leverage reduce risks and gain control of properties with immediate resale profit potential.

To avoid the potential risks and distinguish the various types of real estate options you first need to know:

1. What a real estate option is.
Real estate options are differentiated from most other financial options or real assets by their uniqueness. No two hotels are exactly alike no two pieces of undeveloped land are alike. In general legal terms a real estate option grants the party owning the optionthe optionee the exclusive unrestricted and irrevocable right to purchase property from the party selling the option.

2. The elements of a real estate option transaction.
Optionee?optionor?real estate option?option consideration?option period?exercise of option?expiration of option are the seven key elements of a real estate option transaction.

3. How a real estate option transaction works.
Here I will explain the outline of the mechanics of a real estate option transaction according to priority:
Firstlythe optionee pays a real estate option fee to the optionor.SecondlyThe optionor grants the optionee the exclusive unrestricted and irrevocable right and option to purchase a property at a fixed purchase price during the option period by executing a real estate option agreement with the optionee. Thirdlythe optionee assigns or exercises his or her real estate option or lets it expire.
Forthly if exercised a real estate option agreement turns into a bilateral agreement in which the optionee becomes the buyer and the optionor becomes the seller.
At lastthe seller transfers the property ‘s title to the buyer at the closing.

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Turning Paper Into Profits!

As seen on TV but without to pay for the tapes here is a good way to make money buying real estate with no money down. Let me show you how you can achieve this objective. There are a few prerequisites. First the property has to be free and clear. Next the seller must be willing to carry back a note that is secured by the property. So let suppose you have found a good property. Here are two methods:

Method 1:

You have found a free and clear single family home that is selling for 200000. The seller wants 40000 or 20 down.The terms of the note are:

Length of the note: 30 years
Interest rate : 10
Value of property : 200000
Monthly payment : 1755

What you do now is create a note for the full purchase price of 200000 due in 10 years. The balloon payment at the end of 10 years is 181875. You explain to the seller that you can give him the 40000 down payment but he will have to agree to go without the first 30months of payments on the note. He agrees to this after you illustrate additional financial benefits that he will realize from your creative financing.

Next you are going to sell the first 30 payments to a note investor for 44208 which will result in a 14 yield to the investor. You pocket the 4208 difference between the amount the investor will pay for the note and the 40000 you have to pay to the seller as down payment. After the 30 payments are received by the investor which you as the buyer will be making the payments will revert back to the property http://seller.Using your financial calculator the present value at that time will be 196752 with 90 payments remaining. Remember the seller received a 40000 down payment so he actually makes 236752 over the 10 years financing period plus ongoing interest on the remaining balance. The results are that the seller gets 40000 cash at closing. You purchase the property with no money down and keep 4208 at closing. Make sure that when you sign the purchase agreement the contract states ‘this agreement is contingent upon the buyer selling 30 monthly payments of 1755 for a minimum of 40000.’ Furthermore you should have the note sale close at the same time as your real estate purchase.

Method 2:

Let’s create 2 notes on the same property and sell the first one.

Here is one way of doing it:

Create a first mortgage for 125000 at 10 interest amortized over 30 years with a monthly payment of 1097.

You will sell this mortgage to an investor for 100000 or at a discounted yield of 13.8.

You will also create a second mortgage for100000 at 10 interest amortized over 30 years due in 15 years.

The monthly payment is 877 and the balloon is 81664.

The seller will keep this second mortgage. You will give the seller 80000 down payment from the sale proceeds of the first note and keep the remaining 20000 difference. Your benefit is that you get the property with no money down all the appreciation and the 20000 at the closing of the transaction.

Yes you are paying 5000 more for the property 125000 100000 20000 = 205000 but you will be paying for it over 30 years.

The seller gets a larger down payment of 80000 and a monthly payment of 877 for 15 years of 157860. After 15 years he gets a balloon of 81664. So the total amount the seller gets over 15 years is 288024. Of course you can give less to the seller and gets more in your pocket depending on your negotiating skills.

About the writer:  Cody THOMAS is a Real Estate investor and a REALTOR specializing in flipping properties. Learn how to create new note to flip properties at http://www.myForeclosureTips.com

Trinidad Chair By Nanna Ditzel

Nanna Ditzel knows how to make furniture design. From the start of her career in the post war years she has continuously been working with new materials and new techniques. Various materials such as fibre glass wickerwork and foam rubber are all included in here furniture designs.

The Trinidad chair is one of Nanna Ditzel’s greatest successes. The chair was designed in 1993. It has long since achieved the status of a modern classic furniture design. The distinctive chair takes its name from Trinidad whose traditional fretwork techniques inspired Nanna Ditzel.

Nanna Ditzel was a seemingly inexhaustible source of creativity and innovation that spanned a long life and career. The Danish queen of design had a very practical and operative method towards her design as well as combining that with many streams of influence and the result is a very eclectic range of creations. One of those most popular and influential piece is the Trinidad Chair inspired by the country of Trinidad in the Caribbean. Created in 1993 and was inspired by the islandlike feel and the tradition fretwork techniques done there she infused it with the modern and made it completely her own as the very distinct chair reflects the cool carefree nature of Trinidad. It has become one her most successful pieces and widely known and is still in production today.

It has been tagged as a true “modern classic” as the chair has a natural functionality about it as well complimenting any deacute;cor with its fan shaped back rest and matching flowing carvings creates a breezy and summery effect. The illusion that carvings produce makes light fully interrelate with the room creating layers with simplicity. The original model without any armrests is stackable and stands on four chromed steel legs as the seat mimics the backrest in design and shape where both are ergonomically designed to hold the individual with much comfort and ease. As the chair’s backrest curves to support the back and bolstered at the bottom of the wood to the frame giving it a very unique look. The chair wood options are maple beech cherry walnut birch black ash oak and teak as there is also the option of a wide range of colour lacquers. The Trinidad Chair also comes with the choice of an armrest or upholstered seat in fabric or leather of your liking.

The Trinidad Chair’s dimension includes a width of 48.5cm a diameter of 57cm a height of 84cm and a seat height of 45cm whereas the armchair’s dimensions includes all of these except it now has a width of 61cm. In addition the frame of the chair including the legs can also come in mat chrome black and metallic grey paint. The chair is currently being manufactured by Frederica Furniture and is a timeless beauty with its relaxed flowing feel and appearance still resonates today as it did when it was first created. Nanna Ditzel received many acclaim and even the ID Prize in 1995 as it was taken from a unique source of inspiration and the outcome was a very beautiful and prolific chair that will last for a long time.

About the writer:  Timothy A. Crane Private Real Estate Investor We buy houses and help people with their situations and give them options that they did not know they had. Cash For Your Home http://www.cashmoneyhousebuyer.com