How To Purchase House

Learning is the beginning of wealth. Learning is the beginning of health. Learning is the beginning of spirituality. Searching and learning is where the miracle process all begins, Jim Rohn
Investing in property may seem like todays flavour of the month. However, due to the large amounts of money changing hands, it is not something that you should try without proper training and guidance.
When I first started investing in property, I spent a lot of man hours educating myself. I bought every single book on property that I could lay my hands on. I spent a lot of time and effort attending workshops and seminars. When I had become confident of my abilities, I ventured out and bought my first property.
Buying my first property did not mean that I could now stop learning about property investment. In fact, it was the exact opposite. I was now spending more time learning the different property investment strategies; I was attending more seminars and courses and reading specialised books on investing. Had I stopped learning after my first purchase I would not be a successful property investor today.
A couple of weeks ago, I did some research to see what courses were being offered to help people get into property investment. Quite frankly, I was shocked by the results. I found single day courses and workshops ranging from 500 pounds to 10,000s pounds. And, thats not all.
I even found several portfolio companies requesting 6 figure sums in return for an off the shelf property portfolio! Today, every other person appears to be offering a property investing course. How do you choose which one is right for you?
Firstly, my advice would be for you to not pay anyone to buy a property portfolio for you. If you want success in property, you need to understand at least the basics of property investing. Paying someone a truck load of money to buy a few properties for you will not give you this knowledge.
Attending property courses should by definition increase your knowledge of property investment. However, prior to parting with any money you need to address the following issues:
- What are the credentials of the course organiser? Is he/she a property investor himself and how much experience does he/she have?
The best person to advise you on property investing would be someone who walks the talk – theres little to gain from a presenter who has never bought a property before.
- What are the course contents? Will advanced techniques be addressed?
Its the advanced techniques used by successful property investors that will set you apart from all those other wannabe property investors.
- How many people will be attending the course?
A course attended by hundreds of people may lack the personal touch, but will present networking opportunities to you.
- How much and how long is the course?
Paying several thousand pounds for a one day course is too much. You need to weigh up the cost, length and contents before making up your mind.
- Will I be given the opportunity to network with other attendees of the course?
The property business is a business of relationships. You need to network with others in the same business as you will not be able to do it alone.
- What is the location of the venue?
Is it worth travelling hundreds of miles to a course that may be offered closer to where you live?
- What support will be provided after completion of the course?
Course attendees quite often become unstuck after attending a course. You need to find out if any support is offered after you complete the course.
Only once you are satisfied with your answers to the above questions should you part with any cash.
Be warned though, attending a course by itself will not make you into a successful property investor. What will set you apart from any other attendee on the course is your level of motivation and determination to succeed in property investing.

How To Buy Property from the Bank and Pocket the Profits

The daily newscasters and “talking heads” feature regular stories of the tragedy of foreclosures in America. Indeed, the rate of foreclosures is continuing to increase, partially driven by the financially illogical variable rate mortgages. With that said, if you are a financially savvy investor with solid financials, this is a great time to capitalize upon these intriguing opportunities, especially in the form of REO properties.

Banks are in the business of lending money, not owning, managing, or selling real estate. However, oftentimes a bank is forced to foreclose on an investment, and a property reverts from an investment to Real Estate Owned, or REO.

Real estate investors can purchase REO properties from banks for less than the full market value of the property, but in most cases, REO properties are sold by lenders at or just below market value. A smart investor will have a strong strategic plan for bidding on and financing a bank-owned property to get the best value.

Bidding on REO property

Even though banks do not want to hold and manage real estate properties, there is a wide misconception that banks want to ‘dump’ REO properties at far below the market value simply to get if off the books. Closer to the truth is the fact that a REO property is not considered a liability, and banks will want to get full or near market value for their asset.

If an investor makes an offer on a REO property lower than the bank’s calculated full market value, the bank will probably make a counter-offer closer to the market value at which they want to sell. An important thing for investors to remember is that banks do want to sell their REO properties as quickly as possible, so patience and persistent bidding is the key for a potential investor to get a good deal. But also remember that a bank is looking after their own best interests – not yours.

Understand that REO is “as is” property

Banks will usually sell their REO properties in “as is” condition, meaning if there are any renovations or repairs needed in order to qualify for traditional financing, a bank will not perform the repairs. They may, however, offer a credit on the sale price for the deferred maintenance of a property.

Investors should analyze a property carefully and have thorough inspections performed by licensed inspection firms. A proper inspection will reveal items that an investor will need to consider improving before the property can be achieve full resale or rentable value.

If a property with numerous defects does not qualify for a traditional mortgage from a bank or other lender, a real estate investor will need an alternate plan to finance the property. The investor should form a plan for repairs and renovations and could work with partners to invest money in the fix up project. Hard money lenders may also be a source of short-term financing.

Enjoy favorable terms

An investor will often reap favorable sale terms from a bank REO property. The properties are usually clear of any prior liens. Additionally, a bank may offer financing to an investor will favorable terms, such as low down payment or low interest rate.

Swift closings can also be a great benefit since the title will be owned free and clear by the bank.

Benefits of buying REO

As previously mentioned, a REO home is generally free of all liens from prior lenders and contractors. Having a home for sale free and clear offers a safe investment and quicker closing times. A REO property will also be vacant and ready for an investor to occupy or begin renovations immediately after the sale. Any owners or tenants will already have been evicted prior to the final foreclosure.

REO properties can be a great investment – as long as an investor is savvy about purchase strategies. Knowing the condition of the property and bank REO selling procedures is an asset to the investor. With a little experience, a real estate investor can reap many financial rewards with a niche in REO properties.

The investment quandary as to the best method for acquiring foreclosed property at heavily discounted prices inevitably surfaces at the same stage in the real estate cycle every ten to twenty years. After housing booms and home prices correct back to affordable levels, real estate investors are suddenly inundated with an almost overwhelming supply of potential homes to choose from. These prospective buyers peruse city blocks searching for evidence of distressed properties that might lead to investment opportunity by taking dead lawns, unpaid utility notices, and default notices all into account. They investigate “For Sale” signs with “Bank Owned” or “Foreclosure” riders attached. Technologically savvy bargain hunters browse websites online to identify properties in default. These opportunists also compare notes with one another at various social functions, water coolers, chat rooms, and anywhere else real estate is spoken. Here they may learn that in order to obtain the most lucrative price, investors are best served to purchase property directly at a foreclosure sale on the court house steps. Regardless of the preferred method for locating distressed properties, it is imperative to thoroughly comprehend the different foreclosure processes in order to develop and implement a successful investment strategy. If a homeowner fails to make prescribed loan payments to the bank, the borrower is deemed to have defaulted on the loan. If the delinquent payments are not cured in a timely fashion, the lender is permitted to foreclose on the property to acquire title to the home as security for the unpaid debt. For national investors it is important to understand that lending practices and foreclosure procedures vary from state to state. For example, some states are considered “mortgage” states while other states prefer the “deed of trust” method of lending and holding title as security for the loan.MORTGAGES Mortgage states utilize a two party security system where a mortgagor (or borrower) provides a promissory note to a mortgagee (or lender), along with a voluntary lien called a mortgage that serves as security for the borrower’s promise to make the loan payments described in the promissory note. Since title to the property resides with the borrower when the mortgage is created, foreclosures in mortgage states can be relatively lengthy and costly for banks to pursue. Further, mortgages also provide borrowers redemption rights that allow borrowers a specified period of time after the foreclosure and ultimate sale to a third party to pay off the original loan amount and regain title to the property. As a result, buyers at foreclosure sales in mortgage states must be aware that they will often be unable to obtain clear title to foreclosed homes as the previous owner will likely be afforded the opportunity to pay off the original promissory note and reclaim the property.DEEDS OF TRUST A minority of states that include California favor the three party deed of trust system due to the relative cost efficiency and expediency provided to lenders in the foreclosure process. Additionally, lenders are often able to provide buyers of foreclosed property clear title as no right of redemption exists for borrowers. The Deed of Trust process involves a trustor (or borrower) that gives a promissory note to the beneficiary (or lender), and the trustor also gives title through a trust deed to a trustee (neutral third party) as security for the note. The important difference here is that title to the property is held by the trustee rather than the borrower. The trustee is typically a neutral third party designated by the lender to hold the deed of trust during the loan period with the power to more easily administer a foreclosure sale in case of default by the borrower. It is clearly important to determine whether one is bidding on a property that was subject to a mortgage or a trust deed at a foreclosure sale. This differentiation can often be confusing as many real estate professionals and experts in deed of trust states will often casually refer to home loans as mortgages. Many lenders in these states will refer to themselves as mortgage brokers or mortgage companies when they actually originate promissory notes secured by deeds of trust. Deed of Trust states also refer to foreclosure sales as trustee’s sales, where the highest bidder purchases the property in an auction setting. However, purchasing a home at a trustee’s sale can be a risky proposition as the buyer has little or no opportunity to inspect the home prior to purchase. Further, the buyer must pay with all cash as financing is typically not permitted at trustee’s sales. There is also no guarantee that the property is not currently occupied by tenants or a previous owner. Finally, purchasers at a trustee’s sale are not protected against clouds on the property’s title like tax liens from a previous owner’s unpaid property taxes, so title insurance is often unattainable for buyers at trustee’s sales.REAL ESTATE OWNED (REO) If a home is not sold to a new buyer through the foreclosure process, the lender holding the promissory note will often acquire the property and attempt to sell it on the open market to a new buyer. Once title to the home that once served as security for the unpaid promissory note is transferred to the bank, the property is deemed real estate owned (REO) by the bank. The bank will then typically retain a REALTOR® to market the property for sale at a price below market value, remedy any defects on title, remove any tenants or squatters occupying the property, and often retain contractors to repair any major physical defects in existence on the property. Although the typical price paid for an REO property may in theory be slightly higher than buying at a foreclosure sale, purchasing an REO property is clearly a much less risky proposition. REO sales also provide investors adequate opportunity to inspect homes prior to making offers to purchase, and buyers are permitted to utilize financing when purchasing these bank-owned properties. Whether purchasing foreclosed or REO properties, the various risks and rewards associated with an investment may not only depend on the characteristics of the home itself, but also the type of security the home provided to the previous owner’s lender. In order to avoid the displeasure of telling foreclosure horror stories in real estate investment circles, an ounce of diligent research into a property’s financial history can prevent a pound of investment headaches.

Property appraisal or property valuation is the process of determining the value of the property on the basis of the highest and the best use of real property (which basically translates into determining the fair market value of the property). The person who performs this property appraisal exercise is called the property appraiser or property valuation surveyor. The value as determined by property appraisal is the fair market value. The property appraisal is done using various methods and the property appraisal values the property as different for difference purposes e.g. the property appraisal might assign 2 different values to the same property (Improved value and vacant value) and again the same/similar property might be assigned different values in a residential zone and a commercial zone. However, the value assigned as a result of property appraisal might not be the value that a property investor would consider when evaluating the property for investment. In fact, a property investor might completely ignore the value that comes out of property appraisal process.

A good property investor would evaluate the property on the basis of the developments going on in the region. So property appraisal as done by a property investor would come up with the value that the property investor can get out of the property by buying it at a low price and selling it at a much higher price (as in the present). Similarly, property investor could do his own property appraisal for the expected value of the property in, say 2 years time or in 5 years time. Again, a property investor might conduct his property appraisal based on what value he/she can create by investing some amount of money in the property i.e. a property investor might decide on buying a dirty/scary kind of property (which no one likes) and get some minor repairs, painting etc done in order to increase the value of the property (the value that the property investor would get by selling it in the market). So, here the meaning of property appraisal changes completely (and can be very different from the value that property appraiser would come out with if the property appraiser conducted a property appraisal).

A property investor will generally base his investment decision on this property appraisal that he does by himself (or gets done through someone).

The winners: Singapore, South Korea and the Philippines

Singapore experienced Asiaâ??s highest residential property price increases during 2006, with 9.5% real (inflation-adjusted) house price rises.

There were also 9.3% real house price increases in South Korea, and 9.1% real house price increases in the Philippines. These were seen in the Global Property Guide House Price Indices, the biggest collection of residential property price indices.

Singaporeâ??s strong 2006 GDP growth rate, at 7.9%, pushed up demand for Singapore property. The Urban Redevelopment Authority (URA) private residential property price index rose by 10% (9.5% in real terms) in 2006.

South Korea also saw a strong rebound in property prices, despite continued efforts by the government to depress the market. The Kookmin Bankâ??s house price index rose 11.6% in Dec. 2006 (9.3% in real terms) from a year earlier.

In the Philippines, strong economic growth and reduced inflation contributed to the continued recovery of the real estate sector. In addition, demand from Overseas Filipino Workers (OFWs) and dual citizens has been strong, pushing prices up. Luxury condominium prices in the Philippines rose 15% (9% in real terms) in 2006, following an 11% nominal price rise in 2005, according to Colliers International.Japan and Hong Kong are laggards

Japanâ??s residential property market continued to fall in 2006, despite repeated attempts by the media to portray the market as rallying. Nevertheless, the residential urban land price index registered a smaller fall in 2006 (-2.8%) compared to last year (-4.7%).

Hong Kongâ??s property market turned negative (-2.13%) in 2006, after impressive gains in 2004 (27%) and 2005 (8%). Higher interest rates in the US, mirrored directly in Hong Kong, were a major cause of the downturn.

Taiwanâ??s messy political crisis seems to have frozen residential prices, with 0% appreciation during 2006. In real terms, Taiwan experienced a decline in house prices during 2006 (-1.7%). During three years prior to the second quarter of 2006, Taiwanâ??s Sinyi house price index rose 17%.

In Malaysia, house prices did not to keep pace with inflation. Malaysian house prices today are at the same level as 1995, in real terms.

Thailand saw the end of ending its strong post-Asian crisis property market recovery, as the political crisis impacted the economy. House prices moved up just 1.9% in 2006 (-2.4% in real terms), after 2005â??s price increase of 7% (1.5% in real terms), and 2004â??s rise of 9% (6% in real terms).

Indonesia managed to reduce 4Q 2006 inflation to 6% from 16% during the first three quarters. With the house price index registering a 6.6% increase in 2006; house prices rose by 0.5% in real terms.The 2007 elections â?? risks abound

2007 is an election year in Korea, Taiwan, and the Philippines, and political uncertainty is likely to increase. There will also be elections in Japan and Hong Kong, but they are unlikely to have much impact on the real estate market. In Thailand, uncertainty will increase if elections are not called. The Philippines. A victory for President Arroyoâ??s party in the upcoming Congressional elections would be positive for real estate. Election years in the Philippines bring money inflows, but also increased uncertainty. But if Arroyo wins enough seats in Congress she will push constitutional change, removing constitutional limits on foreign ownership of real estate and companies â?? good for real estate. South Korea. The economic interventionism of left-of-center President Roh Moo-hyun has been damaging for Koreaâ??s housing market. His support is crumbling, and a less interventionist president may be elected in December. But even if the opposition Grand National Party wins, excessive government intervention in the housing market has a very long history in South Korea.Taiwan. Parliamentary elections at end-2007 will provide a strong lead on whether the Kuomintang (KMT) can regain control of the presidency in 2008 from the Democratic Progressive Party (DPP). President Chen Shui-bianâ??s two terms have largely been spent on keeping him from being ousted. Significant banking and tax reforms have been held hostage by politics. Japan. Half of the seats in the upper house will be contested in July. Seats held by the Liberal Democratic Party (LDP) may be reduced, risking its reform agenda. These seats were won with the help of former prime minister and popular reformist Junichiro Koizumi. Hong Kong. Donald Tsang is up for re-election as chief executive where elections are still largely ceremonial and Beijingâ??s anointment is the only significant factor. Pro-democracy campaigners are hoping and pushing for reforms to full democracy and Mr. Tsangâ??s failure to push for constitutional reforms in 2005 means that this will be his last term.Thailand. The sooner elections are called, and Thailand is returned to democracy, the better it will be for the property market and the economy as a whole. The fate of Thailandâ??s property market hinges on the junta. If the junta prolongs military rule, the market will suffer.

The Global Property Guide sees inflation risks to be minimal in Asia in 2006. But other risks threaten the real estate market, particularly the re-emergence of bird flu in several countries, Indonesia in particular.

A decade after the 1997 Asian Crisis erupted, most housing markets in Asia are well on their way to recovery.

Boosted by strong economic growth and strong local and international demand, residential real estate prices in the Philippines, Singapore and South Korea rose by more than 10% in nominal terms y-o-y to Q1 2007.

In Hong Kong, after registering price falls in early 2006, the over-all residential price index is back in positive territory. The index rose 5.2% y-o-y to March 2007. However this is significantly lower than the annual price increases to the first quarter of 2005 and 2004, at 21% and 28%, respectively. No bubble this time

Although property prices in most Asian countries are still below their peak levels, rapid price appreciation has taken place over the past five years, leading to renewed fears that a speculative property bubble is forming in several Asian countries.

The fear is not unfounded; one has only to recall Asia’s spectacular and disastrous property bubbles of the 1990s.

However, the recent price increases are actually recoveries from the previous slump caused by the Asian crisis and other phenomena.

As of Q1 2007, property prices in most Asian countries are in fact still below their peak levels in real terms. Strong housing demand

Current economic and monetary conditions suggest continued strong demand for housing. All economies affected by the Asian Crisis grew by 5% or more in 2006. GDP growth from 2002 to 2006 has been markedly stronger than during the crisis period – 1997 to 2001, although slower compared to the tail-end of the “Asian Economic Miracle”.

As a result of financial and monetary reforms implemented after the crisis, banks and other financial institutions are in much better shape now. Asia’s mortgage market is set for a boom. This is despite the fact that mortgage lenders are more cautious of over-exposing themselves to particular sectors (some pundits worry that banks are actually being too cautious).

Despite recent interest hikes, in line with global interest rates, base interest rates for mortgage lending are generally lower now than before the crisis.

Socio-economic conditions also point to continued strong demand for residential properties. Strong urbanization and population growth has led to high population densities in several Asian cities.

In view of the relatively restrained dwelling price rises, strong economic growth and banking sector caution and healthy yields to be enjoyed on properties in Asia, talk of another bubble seems far-fetched. Other problems

A more pressing concern for Asian economies is the continuation of reforms to improve real estate efficiency and transparency. Transaction costs remain high and the property registration is still cumbersome in several countries.

While Malaysia is encouraging foreign property buyers, Thailand’s military junta is pushing them away. Thailand announced that it is completing a crackdown on foreign companies established for the sole purpose of buying landed properties. While the motivation for this move is unclear, the signal is clear “foreigners are not welcome.” Political uncertainty and policy flip-flaps by the ruling junta are undoubtedly hurting the real estate market.

In the Philippines, proposed property market reforms are languishing in congress. These laws include the establishment of a centralized agency for registering property and a standard property valuation system. Full Report:http://www.globalpropertyguide.com/articleread.php?article_id=93&cid=Economics Team:

Prince Christian Cruz, Senior Economist

Phone: (+632) 750 0560

Email: prince@globalpropertyguide.comPublisher and Strategist:

Matthew Montagu-Pollock

Phone: (+632) 867 4220

Cell: (+63) 917 321 7073

Email: editor@globalpropertyguide.comAddress:Global Property Guidehttp://www.globalpropertyguide.com

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Are you becoming wealthy on your house? Is your home your best performing investment? Is your house the only area that of your investments in which you are making money?
Red danger signals should be appearing in your mind. The housing market has gone up, up and up. Many people believe that they “have made x dollars from their house”. Is this true? Is this realistic? Will they ever be able to see or use their new found wealth?
It is true that. Even in 2004 it was said that housing prices had risen the most in 2004 in the past 25 years – that the OFHEO price increase was 13.4 %. Prices have been double digit and seemed to be able to go up and up forever. Indeed the price run-up from 1997 to 2006 was the largest in history.
What fueled this seemingly endless run-up in housing prices? The answer in 3 words was “low interest rates. China it seems wanted to maintain high employment figures for political and economic reasons. In order to maintain high employment levels the price of Chinese goods – at Wal-Mart or wherever had to remain low. If the Chinese currency remained low relative to the U.S. dollar or if the U.S. dollar remained at relatively high levels in relation to the Chinese currency this would be accomplished. It amazing that in our small global world decisions made by someone or a group of people in China can affect yours and mine economic position and future so greatly.
As a result China chose to pump money back into the U.S. buying U.S. treasury bills enmasse. The Amerian dollar remained high , the Chinese currency low. You could buy Chinese made goods cheaply at Walmart or Target stores. And interest and mortgage interest rates were at historically low levels.
As a result you could now purchase a house , upgrade your house or purchase a much larger and expensive house than you could of previously. Your banker or mortgage lender was only too happy to loan you the money for the mortgage – after all the loan , or mortgage was secured by good old fashioned real estate as collateral.
The housing market soared. People who could never of afforded to buy a home , condo or land could now afford one. So many new and additional buyers were entering the real estate market that not only did the demand for homes and other real estate increase but there were bidding wars for properties and sale and the supply for more and more houses and other forms of real estate diminished and housing prices soared. You may well of heard stories of people putting the proverbaial shingle on their home one morning and having it sold for unbelievable sale prices by the end of the day.
Along with this home builders were building scads of homes and selling them at these high sale prices. Mortgage lenders and banks were facilitating the process by selling and marketing low priced mortgages called “subprime” mortgages which offered an initial period of lower rates, the rate charged reverted to regular rates after the introductory period.
The key to all of this was that prices kept going up, up and up. There was no end in site. Not only that but what fueled the boom further was the fear that if you did not get in that you would be locked out in the future. The same house had risen from say $ 200,000 a number of years ago to $ 400,000 to $ 500,000 in one year, if I do not get in the market now; the reasoning went that home could be $ 600,000 or $ 750,000 next year. By getting in now I will get equity and be in the game. If I stay out – my family and I may be locked out of owning a home ever.
So went the logic. As well it seemed that the only place the family could make money in their investments was in the value of their home. One could not seem to “make money “in other traditional investments such as the stock market or their retirement plans.
Which brings us to the basic question? How is money being made? Can you ever spend this money for enjoyment or other goods? At coffee a Mr. Brown may tell you “I made $ 250,000 on my house.” It is true that profits on the sale of your home are treated different and better than other moneys made but the question is how did Brown come out ahead? He will be purchasing another property in the same market. As is said you “have to live somewhere”. If your house sold for a good dollar, that it was desirable, and was a nice home located in a nice neighborhood. It is highly unlikely that you are going to move to a much less desirable, more dangerous neighborhood where housing is much cheaper. You may be going to downsize somewhat but you are not going to move to a slum after enjoying luxury. So it goes this is not liquid profit that you can easily cash out. Even if you or wife decides that it is now time to sell the house since you can get a good price and “We can live in an apartment. So what!” you may well find out in a year that apartment living is not all it is cracked up to be. It was no accident in the past that you scrimped and saved to buy a house and move away from that noisy small, cramped apartment to a house. So it goes that after being reminded of your lesson that you find out that being out of the house and into an apartment for a year that it will cost you substantially for being out of your home for a year.
This all brings us back to our first question. Are you becoming wealthy on your house?

Attempts by Federal and State governments in the first quarter of 2009 to stimulate home sales have resulted in the creation of significant incentives for buyers seeking to take advantage of attractive housing prices across the United States. In order to reduce the large inventories of available homes for sale and thereby stabilize housing values that serve as security for loans held by financial institutions and investors around the world, an irresistible environment for real estate investment has been established that deserves closer examination.American Recovery and Reinvestment Act of 2009Included in what has become otherwise known as the Federal Economic Stimulus Plan, the United States federal government increased the first-time home buyer tax credit previously implemented by The Housing & Economic Recovery Act of 2008 (Summer 2008) from $7,500 to $8,000, and removed the requirement that the credit be paid back in the future. The expiration date for receipt of the credit has also been extended from July 1, 2008 to Dec. 1, 2009. Consequently, homebuyers must have purchased a home after January 1, 2009 and before December 1, 2009 to be eligible for the $8,000 credit. This credit only applies to first-time home buyers purchasing owner-occupied homes and not investment properties.State Tax IncentivesMany state governments are also independently attempting to address housing market distress within their own state lines by enacting legislation that provides further tax incentives for prospective home buyers. For example, the California state legislature passed a new-home buyer tax incentive as a portion of the state’s 2009-2010 budget. According to this incentive, purchasers of new single-family homes, that have never been previously occupied, as their principal residence between March 1, 2009 and March 1, 2010 will receive a tax credit equal to the lower of 5% of the purchase price or $10,000. Therefore, first-time home buyers in California who purchase a new home as their single family residence between March 1, 2009 and December 1, 2009 should qualify for both the Federal $8,000 tax credit and the State of California $10,000 tax credit at the same time, resulting in a combined $18,000 tax savings.FNMA Lending Requirements Relaxed for InvestorsFederal government sponsored enterprises have also reached out to real estate investors by providing them with increased ability to leverage funds and purchase more investment properties. Fannie Mae (FNMA) has announced that on March 1, 2009 it will increase the maximum number of permissible financed properties from 4 home loans to 10 home loans for borrowers seeking to purchase non-owner occupied properties. Investors attempting to take advantage of this policy revision must: have a 720 FICO score or higher, show funds in reserve to cover six months of future payments, pay a 25% down payment, have no history of foreclosure or bankruptcy, have no delinquent payments within twelve months, and provide full documentation of all rental income.Time will only tell as to whether these bold incentives will serve to generate the requisite number of home sales to effectively stabilize housing prices and the economy as a whole. Regardless of whether these enticements will succeed on a macro-economic level, the cumulative effect of astonishing low housing prices and interest rates combined with these new measures has clearly created a housing market ripe for prospective buyers.

It’s time to learn how to use your brain, not your bank account, to take control of a property and make money from it without ever actually buying it. Options are a smart and simple way to control property–especially highpriced real estate–with little or no cash. Options can generate lump sum profits, longer-term cash flow, or both–it’s all in how you structure the deal.
It’s not difficult, but it does require planning and attention to detail. The biggest challenge in using options is that most buyers, sellers, and real estate agents don’t understand them. So you have to know them well enough to be able to explain the process and clearly present the pros and cons.
Options can be used in any business where real property, goods, or services are bought and sold. Essentially, an option is a one-way right to purchase property under specified terms. Only the seller is required to perform; the buyer has a choice. Once the option is exercised, the agreement becomes a binding bilateral contract between the buyer and seller.
As you learn the techniques, though, you’re going to see other business applications for options, and your ability to profit from them is limited only by your imagination.
Here’s a hypothetical situation that is common in actuality, where a basic lease option in a residential real estate agreement would be the perfect solution. Sam Smith owns a three-bedroom, two-bath home as an investment and is open to either renting or selling the property.
If he rents it, he’ll have the cash flow and will build equity. If he sells it, he’ll have the lump sum profit to reinvest. Rents for similar properties in the area are $900 to $1,000, and Sam could probably sell the house in the current market for $105,000 to $108,000. His mortgage is $92,000.
Bob and Barbara Green like Sam’s house and want to buy it, but they don’t have enough cash to put down to get the mortgage payments as low as they want. So Sam offers to rent the house to them under a lease option agreement like this: The Greens will pay a refundable security deposit of $1,000 and a nonrefundable option consideration of $4,000, and will rent the house for two years for $1,100 per month. Of the monthly rent, $330 will be applied to the purchase price of the house if the Greens choose to buy it.
At the end of the two-year lease, the Greens have the option to purchase the house for $114,000, using the initial option consideration and the $330 per month, which totals $11,920, as a substantial portion of their down payment.
Lease option buyers enjoy a number of benefits. They can “test drive” the home before purchase; they have a lower up-front cash requirement than they would if they were buying outright; the rent credit builds up a forced savings account for the down payment; although the total monthly payment might be slightly above market rates, the net rent (the amount applied toward rent after the rent credit is subtracted) is generally lower than a comparable straight rental; and the purchase price is locked in. The term of a typical lease option deal is between one and three years, so the tenants have plenty of time to build their down payment credit.
If the Greens decide to exercise their option, they will be able to buy the house with the majority of their down payment created primarily through the rent that they would have had to pay on a place to live anyway. If, for any reason, they decide not to exercise their option–maybe there’s an unexpected job transfer in the picture, or they decided they don’t like the neighborhood or the house after all–they treat the end of the lease as any rental situation. They can renew the lease or move.
In the meantime, Sam has been collecting above-market rent for his property and building equity by paying down his mortgage with the rent. He has already collected (and probably reinvested) a $4,000 nonrefundable option consideration.
If the Greens buy the house, Sam will net more than $10,000 at closing. If they don’t, Sam is able to keep their option consideration and the profits from renting the house at above-market rates, and he still has the property to either rent or sell to someone else.
It’s a win-win situation for everyone, and it’s just one example of how options can make you wealthy.

Who says living in the desert region is just too dry and hot? Whoever said that must have not experienced the good life brought about this region, particularly in Arizona. This state famous for the location of the Grand Canyon is not only a perfect spot for tourists to visit. It is in fact one of the growing states wherein you can find the best homes to live. You can establish your families in here; retire at your old age and even a perfect place to stay temporarily when you are having a vacation. If you love the hot climate, this is the perfect place to stay. Despite being dry and hot, this place has all the action needed for a person to have a life.Now if you want to settle in a place there are several things that you need to consider before making a purchase. Arizona is a big place and you might want to get to know the various cities in it. For one, Phoenix is the capital that has the most population and is the fifth largest city in United States. However, if you want to retire in here, you can go to a more laidback cities where you can find the best homes are and that is in Gilbert.Power Ranch is one of the the best communities that you should be looking for as the community offers you all types of homes that can satisfy your needs. As mentioned a while ago, several things needs to done before you purchase a house. The following are:1.    Look for a house online and see what you can like. Also, check the prices and see if it fits your budget.2.    You can have yourself pre-qualified so that you will know how much loan you can make to purchase the house.3.    Once you have fixed your mind on what property you want to buy, you can formally apply for a loan. This is the time wherein you have to be ready for various documents to be reviewed. Once approved you will have to select a loan program that you think you can afford. Once you have chosen, you can start the processing but it could take some time.4.    Once the load is approved, there are three documents you will be signing and that include the deed. You might have to settle some fees but once it is done then you can have the keys to your new Power Ranch or Gilbert Home.It might not be an easy process and it may take some time, as lending companies are very vigilant in reviewing your profile, as well as your finances. However, if you have great credit history and a stable job, then this should not be a problem. You can have your dream house in no time.If you have bought a home before, probably this process is not new to you. However, if this is your first time to purchase, this outline is just a summary on what is going to happen when you want to purchase a home, particularly in Arizona. Happy house hunting and good luck in purchasing your dream home.SummaryBuying a home in Arizona is a good thing to do because most of the real properties in this state are really affordable. In case you want to purchase one through loan, these four steps can give you a simple explanation on the step-by-step process of purchasing a house through loans.