Easy Guide To

Besides the fact that it’s probably the average person’s largest financial transaction, buying or selling a home is one of those areas where mistrust and misconceptions are sure to be present. You can begin your education by asking friends, family, co-workers, real estate agents, real estate brokers, mortgage brokers and real estate professionals for help, search online for local lenders and get current interest rate quotes. Now before you apply for any , if you have a lot of bad credit because of consumer debt like credit cards or personal loans, you’ll want to try to eliminate or reduce this debt since it may affect your ability to qualify for a commercial or home mortgage and make the estimated monthly payment.

Keep in mind when you’re getting financing or refinancing that most people move or refinance within seven years. An adjustable-rate mortgage (ARM) means that the interest rate changes over the life of the loan, according to the terms that are specified ahead of time. If you’re working with a local builder within a sub-division or housing development and just making carpeting, lighting and appliance selections for a brand new home, you’ll probably be able to get a standard mortgage loan. But if you’re hiring contractors, electricians, plumbers, and painters, you’ll probably need a construction loan, which provides funds to pay the subcontractors as the work progresses.

Twenty-year fixed-rate mortgages allow you to make a consistent higher monthly payment throughout all of the 20 years you have the mortgage. The shorter term means you pay the loan off quicker and therefore pay less interest and build your equity faster than with a 30-year loan. The disadvantages of a fixed-rate mortgage include a possibly higher cost; these loans are usually priced higher than an adjustable-rate mortgage.

Your property taxes may be deductible so make sure to consult with your CPA or other tax advisor for the current tax information. Insiders know that the advertised mortgage rates are not always what you’ll get from the lender; it could be market fluctuations, economic news, any other of a dozen reasons, but interest rates can change throughout the day. If you’re having a problem getting a loan or home mortgage you might consider a lease-option on a property; a lease-option on the real property will allow you to set a good purchase price now, then apply a portion of the rent each month toward your down payment, building your equity in the process.

Work diligently with your mortgage broker or lender to develop an individual loan or mortgage program based on your credit worthiness. 15-year mortgages are an ideal option if you can handle the higher payments and if you’d like to have the loan paid off in a shorter period of time, for example, if you have plans to retire. There are plenty of options that are ideal for those people who have a few bad credit indications on their credit report.

The interest rate for an adjustable rate mortgage may be adjusted up or down at predetermined times which will make the monthly payment increase or decrease. If rates in the current market are high, you’ll probably get a better price with an adjustable-rate loan. Interest rates can go up if a rosy picture is painted indicating the economy is flourishing, for example more jobs being available; this can lead to inflation which will send the rates up.

If you’re a first-time home-buyer it’s possible that you may qualify for a lower down payment or a lower interest rate. You might want to check with mortgage brokers, online mortgage companies, your county housing department or your employer to see if they know of any programs available. A fixed-rate mortgage means the interest rate and principal payments remain the same for life of the loan but the taxes will probably change.

Make sure to get lots of advice about , mortgages, interest rates, mortgage rates, mortgage refinance, bad credit mortgages, etc., and think about what makes sense to you. Thinking positive about is important and so is being realistic. It is always good to know the truth about advertised current mortgage rates when you need .

Forget the Advisers! Buy Commercial Net Leased Real Estate and Control Your Own Money

I am mad as hell at these Shylock’s such as Bernie Madoff, and several others, posing as ‘trusted advisers’,responsible for painting an entire profession with the broad brush of incompetency and thievery. The same goes for the Wall Street high rollers with million dollar salaries and bonuses taking risks with our money that we individuals would never dream of taking. I am a commercial / investment real estate professional with 30 years of experience and believe me it burns my butt. I’ve worked long and hard for my reputation and quite deservedly, it is solid. So, the question is, where do you invest that will keep you in control over your own money? OK, so what’s my answer? My suggestion is to buy commercial real estate, bricks and mortar.

Net Leased Real Estate

By purchasing a net-leased property you are accomplishing many things. First of all, you own the real estate fee simple, i.e. not through a stock such as a REIT or some other type of real estate fund that collects your money along with hundreds of others and buys what they feel will be in your best interest. YOU OWN it. These investments are called net-leased because the tenant pay most if not all of the real estate taxes, building insurance and common area maintenance such as snow removal, grass cutting and other building upkeep expenses. Thus, the monthly rental income received is Net to you. This type of lease is a triple net lease. A double net lease has the owner ultimately responsible for the roof and parking lot replacement and building structural integrity.

Most of the net-leased properties that are available for purchase today are brand new construction with leases anywhere from 10, 15 to 25 years in length. Surprisingly, most are with credit tenants and the leases are corporate leases, not guaranteed by an individual or a franchisee. The properties are located all over the U.S. and typically in growth areas – they are the retail tenants you see in your community such as drug stores, dollar stores, auto service and parts stores and bank branches. The majority of these investments are in the retail sector but some, such as FedEx Ground distribution properties can also be available for purchase. Medical buildings are very much in demand.

Cost and Financing

Be prepared to pay anywhere from $850,000 to $6,000,000. These are conservative investments and expect an after-tax return of about 5% to 6.5% based on 70/30 financing with interest rates in the mid sixes to mid sevens. And speaking of after-tax, many of these properties are what are known as passive investments that qualify for the advantages of depreciation and interest charge deductions. Of course, your tax adviser should be consulted when considering any investment. And yes, there is money available for these types of investments – quality tenants and qualified buyers with minimums of 30% to 35% equity.

Conclusion

If you are ready to take control of your own investment dollars you should consider net-leased real estate. The leases for these properties are long term and require little or no management time or talent. Most are new construction in good locations and leased to credit tenants. For an investor that appreciates an investment horizon longer than one or two years, these are great vehicles for growth.

To find a property that fits your needs and long term goals consult with a commercial real estate professional who will represent your interest in the transaction thus having no prejudice for one property over another. My business is exactly that. I will work on your behalf but you are in control of what, when and where you invest your money. If you, like me, are fed up with other people handling your money – allow me to find you a net-leased property.

Understanding Why The Real Estate Fund Administration Needs To Be Outsourced

Real estate and private equity funds are defined as a type of mutual fund that focuses on investing in securities offered by public real estate companies. These are also described as securities that sell like stocks that are invested directly in real estate, either through properties or mortgages. Also known as REITs or real estate investment trusts, they receive special tax considerations and usually give investors high returns of investment.

There are different types of REITs that people can invest in and they are as follows: Equity REITS, which are when you invest in and own properties, which make you responsible for the equity or value of your real estate assets. The revenues for this REIT come in the form of property rentals. The second type is known as the mortgage REITs, which deal mostly with investment and ownership of property mortgages. These REITs involve loaning money for mortgage to owners or purchasing existing mortgages or mortgage-backed securities. Revenues for these types of REITs come from the interests earned on mortgage loans. And last but not the least, there are the hybrid REITs which combine the investment strategies of both equity and mortgage REITs.

A REIT is also a tax designation for a corporate entity investing in real estate, with the purpose of this designation being to reduce if not completely eliminate corporate tax. In return, REITs are required to distribute at least 90% of their taxable income to investors. These can also be companies that own and operate income-producing real estate that range from commercial office and apartment buildings to warehouses, hospitals, shopping centers and hotels to name a few.

Because multiple investments like these can be difficult to handle or manage, most REITs decide to outsource the services of a third-party fund administrator with specialized skills. They hire companies that not only offer traditional services but also companies that have significant real estate finance domain expertise. Outsourcing has long been something that is done by most companies as part of their re-engineering processes within their respective organizations.

Managing assets is no easy task and outsourcing especially as the more the organization grows, the more complex funds handling become, especially in real estate, which are multi-tiered financial structures that will need specialized management skills to run. Also, since they require timely financial reporting, tracking and analysis, it is important that they be streamlined for effective fund administration. Third party administrators enable you to fast track the processes, thereby increasing productivity and enabling more focus to be given to company growth.

Outsourcing third party fund administrators also allows for integrated communications especially since you will be dealing with asset managers, bank, legal and tax advisors. Third party fund administrators a customized fund community which can be accessed by your service providers to achieve faster tracking of important details regarding the fund structure, as well as access to key documents. These enhanced solutions reduce the number of manual errors and give you more time to focus on other priorities.