Refinancing Traps with a Fix and a Change – Keeping Ownership When Your Change Turns to Failure

He was young and inexperienced, but he was convinced that he was unstoppable. He had a lot of energy and motivation. The house was in Arvada, a northwest Denver suburb, and I bought it for an incredible price. It was part of a package with another house that he planned to keep as a rental. This one didn’t have a large number of rentals, but it looked fantastic as a hitch, so I bought both houses. I started the rehabilitation in both properties, with the focus on the planned rental; that would be a much easier and faster rehabilitation. That house went off without a hitch. I rehabbed it, rented it, and will refinance it. Because I used a hard money loan, I had no money and was producing positive cash flow in six weeks. The Arvada house was a different story. That one also ended up in my rental wallet, but it was far from planned.

It was after I finished with the first project that I began to notice the murky work at Arvada. There was work not allowed everywhere. There was a small addition that was falling out of the house, used building material that didn’t belong, leaks that were plugged, and faulty wiring. The budget was ruined even before it started, and it did not have the reserves to cover the extreme amount of surplus. I didn’t know what to do so I went cheap. I did a lipstick job, threw the house on the market, and crossed my fingers.

I lowered the price and then lowered it again. It got to the point where I couldn’t pay off my loan and pay a real estate agent, so I decided to keep it. To do that, I had to pay the money back to my lender, which means I had to refinance the loan.

This painful experience taught me many important lessons; Don’t go cheap on finishes, what to look for on a budget, and the pitfalls of refinancing. Loans have changed since then, so I reached out to Joe Massey at Castle and Cooke Mortgage, our preferred lender in Colorado, for help on the problems investors face today when trying to refinance their investment. Here is the list of cheats we discussed:

Value: It’s almost impossible to get a higher appraisal than the latest list price. In my case, I kept lowering the price, to the point where it was below what I could have priced. When I went for the refinance, the appraisal hit the last list price and I was forced to bring cash at closing to close the deal. Refinance appraisals are based solely on comparable sales (comps) in the area, as there is no other market indication for the appraiser to reference. Additionally, low-quality rehab is difficult for an appraiser to value, so it is common for low-quality rehab to have no impact on the appraised value. However, low-quality restorations have a large impact on real value. Once there is MLS exposure, which means anyone looking for a home can see it, the appraiser has real market information to get a more accurate value. Think about it, how can the appraiser justify a higher value than what is listed in the MLS? It is best if you have the value that reaches the lowest list price, or even below it.

Another hurdle with MLS exposure is time. This isn’t a big deal for most, but it’s worth mentioning. The property must be off the MLS for at least one day before you can apply for the loan. Again, it’s not a big deal, but this will create a one or two day delay in the process.

Credit: Credit requirements are a bit stringent with rental property loans compared to owner-occupied loans. Almost all loans are approved or rejected by a computer system, so scores can vary. For example, if you have less than perfect credit but a larger down payment, the computer might approve the loan. In the rare event that the loan is manually underwritten, your rental credit should be 620 or higher until you reach your fifth rental, at which point you should have a credit score of 720.

Entities: Conventional lenders will not make loans to an LLC or corporation; You must own the home in your personal name to qualify. Many lenders will not loan you money if at ANY time you owned property in an entity. Most fixes and fins operate on one entity, so you can see how this can cause you a problem with a refinance. However, all hope is not lost! Because Joe is a direct lender to Fannie Mae, he can finance it while your property is in his entity, but it will require you to transfer it to his personal name. If you hear a lender tell you that they can’t help you because you own your business in your LLC or corporation, know that there are lenders like Joe who can.

DTI: You may hear that you cannot finance a rental because your debt-to-income ratio will decrease, which means you are not making enough money to cover all of your debts. The issue here is often the amount of rent on the new property, and whether you can use it to offset the new mortgage payment. Some lenders will want to see the property on your tax returns to give you credit for income, which is always a loss in the first year you buy a new property and rehabilitate it; therefore, it is more difficult to qualify. If you get these comments, call another lender. The guideline here is that you can use 75% of the gross rental amount as income if you have a lease and can show at least one month’s rent collected and the security deposit.

Another problem with DTI is self-employed borrowers. I have written entire articles on this topic, because many self-employed people take as many deductions as possible. When you take a deduction, you reduce your taxable income, thereby saving on taxes. The problem is that when you lower your income, it hurts your DTI, making it harder to qualify for loans. It is not the fact that you are self-employed that prevents you from obtaining a loan, it is the income you report. The guideline here is that you can get a loan when you are self-employed if your income supports the debt. Income is documented with two years of tax returns, unless you have been in business for at least five years and have a credit score of 740 or higher, in which case you will only need one year of tax returns.

Bookings: As you start to go over budget or have trouble with your fix and change, it is very common to burn your reserves to save the deal. This is understandable but could create a problem. You must have reserves to qualify for conventional loans, so it is very important that you reserve them before applying for your refinance. The guideline is a bit confusing and is based on how many properties you own. The reservation requirement is:

6 months of mortgage payments on the property in question (PITI) plus …

  • 2% of unpaid loan balances on your other rental property loans for 1-4 financed properties

  • 4% of unpaid loan balances on your other rental property loans for 5-6 financed properties

  • 6% of unpaid loan balances on your other rental property loans for 7-10 financed properties

The principal balance on your home mortgage does not count in these calculations.

You can use some retirement money to meet this requirement, but you will also need money in the bank. Check with your lender if you plan to use retirement money to meet this requirement, and they can guide you through which funds should be where when you apply. If you start to run out of reserves, do what you can to make the house acceptable for an appraisal and then get the loan. Once the loan is in place, go back and complete anything you need to complete that will consume your reserves.

Changes in your situation: Several things can create problems here. If you are in the middle of the refinancing process, it is probably best if you do not take out any additional credit or even have it withdrawn. You don’t want to quit your job either, which seems obvious, but I feel the need to bring it up.

I wish I had this information when I was working at that house in Arvada, and I wish I met someone like Joe to help me through the process.

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Avoid emotions when buying a house

When you buy a home, it is easy to get carried away by emotions. Sometimes this is good, but there are times when it can be a very bad thing. Wrong decisions can easily be made when you let your emotions take over. The last thing you want is to regret when you are buying a home. It’s a decision that will take you until you get your next home, so it’s a great decision. Making rational decisions is usually the best option. There are three emotional traps people easily fall into when buying a home. This article will list and detail those pitfalls and tell you why these things should be avoided.

You often hear homeowners talk about how they fell in love with their home. This may be the case, but this can easily turn into a trap. It’s easy to fall in love with a great house and then not be able to afford it. This can crush the homebuyer’s experience and change their attitude for the remainder of the shopping period. This is something you should avoid. One way to avoid this is to get prior approval. If you do this then you will know what your price range is right from the start. So you can buy in that range and never have to fall in love with a house you can’t afford.

After you find your dream home that you can afford, you can make an offer on it. But what if someone else wants the same house? They can bid better than yours and it can turn into a bidding war very easily. This can end up paying more than the house is actually worth. If you let your emotions drive you through the bidding war, then this is an easy stumbling block to get into. You have to be logical about it and do the numbers yourself, or have someone tell you when to stop. The bidding war can be bad if you let your emotions take over. You don’t want to pay more for the house than you need to.

Another stumbling block comes in the form of repairs. If you are buying a home that is second-hand, you may need to make repairs. This may be a good thing, but you have to look at yourself and ask yourself if you can really do everything. Just because you are in love with a house does not mean that it is the best for you right now. Having a home that needs repairs will be very bad in the future and you will want to fix everything as soon as possible. If you can’t do this, the house may not be right for you.

These three things are crucial to remember when you want to buy a home. When you fall in love with a house, then you know it. But being rational in everything is definitely a good thing. Remember to avoid these things and you will be fine.

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Ten Commandments for Technical Writers

The main goal of a technical writer is to convey an idea in a concise and concise manner. A good technical writer does not need to have a master’s degree in English or communications. All a technical writer needs is a clear understanding of the software / product / application and basic grammar skills. We are here to facilitate your technical writing job by introducing the 10 commandments for technical writers.

1. Understand your goal

Before you start writing, try to understand the purpose of the whitepaper you plan to write. Ask yourself “What will you write?” And “Why are you writing it?” When you get the answer, start outlining the whitepaper.

2. Know your reader

The main purpose of a whitepaper is to serve its reader. So, it is very important to identify your reader. Remember that your reader is someone who does not know your product / application and this is the reason why they are reading the document. Focus on the key ideas the reader will be looking for in the document. Plan accordingly.

3. Plan the flow of information

Once you’ve planned the structure of your document, think about the flow. Decide which sections the document should contain and write a short outline of each section, as well as its subsections. Plan it in such a way that your reader moves from familiar to new information. Also, never write the document in the first person, use third person while narrating. Get your writing to the point. Delete anything that doesn’t support your point.

4. Use a template

Good technical writing is done on a template. A template contains paragraph styles, layout for each element on the page, such as headers, footers, headers, tables, paragraphs, steps, notes, caution messages, etc. It also contains all the elements of the book, such as the cover, title page, table of contents, chapters, glossary, back cover, etc. Apart from all this, a document written in a template is easy for the reader to read and edit in the future.

The templates are reusable. Design it once and use it when necessary. This will save you time and money.

5. Add a naming section

Always add a naming section at the beginning of the document and use the mentioned naming conventions consistently. It is always better to name a concept based on what it does. Apply this for the file naming convention as well. Always name figures or diagrams and give a good legend. This can contain multiple sentences that provide context and explanation. Also, don’t use different terms for the same concept. You can use synonyms to distinguish concepts that are not related.

6. Use tables, TOC, glossary, x-references, and subtitle numbers

A good technical writer always summarizes the procedures in a table. Name the table and give it a description. Include a glossary as technical terms can confuse the reader. In this case, a glossary is helpful.

Get in the habit of creating tables of contents (TOC), cross-references (x-refs), and subtitle numbers electronically instead of typing them. Number all equations in the document, even if there is only one equation in the document.

7. Be consistent

Always be consistent; whether in style, word selection (British or American), numbering system, concept naming, etc. Be sure to refer to every significant character (algorithm, concept, language) using the same word everywhere. Give a significant new character a proper name. Also, focus on a tense as it brings clarity and allows the reader to read it.

8. Follow the basic grammar rules

Put the concepts and all the important terms in subjects. Then match each subject to a verb that expresses a meaningful action. Always prefer the singular number to the plural. To distinguish one-to-one relationships from nam relationships, query each element in the singular.

Don’t use passive voice. Use past when describing an experiment or some other action that occurred in the past.

9. Avoid acronyms and abbreviations

In technical writing, avoid acronyms and abbreviations. If you are using them, please clarify the acronyms and abbreviations the first time you use them.

10. Review

Be sure to review the document you just created. You can ask one of the team members to read it aloud. Rewrite the words / phrases / sentences that are confusing to you. Look at the style and structure from the user’s point of view. Do a double spell check, replace contractions, and look for punctuation errors. Don’t use slang or colloquial English.

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How to get your exciting real estate license and what does it offer?

First, to obtain your real estate license, you will need to take a 63-hour pre-licensing course. Many online educational sites offer this and it can be done from the comfort of your home. If you are more of a class person, your local community college might offer the course. When taken in real class, the course may take 4-6 weeks due to scheduling. Online classes that you can do at your own pace. So if you want, you can do the whole course in one week.

Below are some requirements for the state of Florida to obtain its real estate license

General requirements:

You must be 18 years old, have a high school diploma or GED to obtain your real estate license.

Educational requirements:

Complete the 63-hour pre-licensing course and pass.

Exam and application requirements:

Submit a completed real estate license application, submit your fingerprints, and pay associated fees.

Pass the Florida Real Estate Sales Associate state exam with at least a score of 75 points out of 100 points or pass the Florida Real Estate Law exam with a score of 30 points out of 40 points.

· Activate your license with a real estate broker using the appropriate DBPR forms or your broker can activate it online.

These are the basic steps required to obtain your Florida real estate license. Getting your real estate license sounds easy and, to a degree, it is. However, the exam and the amount of study should not be taken lightly. I would recommend looking online a bit more before deciding on a real estate license. If you want to make a career change, it’s definitely cool.

So how do you really get started in real estate and what does it offer?

First of all, of course, once you’ve obtained your license, activate it with a broker. This is where you have to decide which path you want in real estate. Different companies offer different options, divisions, rates, training, etc. Take for example:

Property Management: It is best to search for local property management companies. There are also national property management companies that you can join. Once you join them, throughout your time in this field, you will gain knowledge and experience in all legal aspects of property management. There are many, from how to evict a tenant to how to post notices on their door and within what time frames. Property management is hard work and rewarding at the same time. Many agents are leaning towards this field due to the constant stream of monthly income. Others don’t want to deal with tenant headaches. For example, if you manage 150 units and have an average call rate of 10%, that would be 15 different problems to deal with during that month. These can range from non-working air conditioning units to plumbing problems; tenants locked out of their homes and in need of access, to tenants who disturb other neighbors. One of the positives that means that 135 units will not cause any problems. On average, the management companies charge about 10% of the monthly rent to the owners (all companies and the state are different), in return, you as an agent could get a percentage of that. Since all companies offer different payments, let’s just average the company’s monthly income. Let’s say 150 units rented for $ 1000 each month, which would be 10% of $ 1000, which is $ 100 X 150 units “equals” $ 15K of monthly income. Now you see the stable income that I mentioned earlier.

Luxury Real Estate – This is also a very nice niche once you get your license. There are pros and cons as with Property Management. When we talk about luxury real estate, we are talking about homes from 1M onwards. The obvious benefit of this is the amount of money you make on each transaction. For example, a 1 million sale with a 3% commission gives you an income of 30 thousand, now subtract your splits with your broker, let’s say an 80/20 split, the agent would receive a commission of $ 24 thousand, make it 4 times a year and you are at 96 thousand. Not bad to go to a 65-hour course prior to obtaining the license. Let’s point out the downsides. It is not as easy as it seems or how it is seen on television. This market is more of a referral-based market. You can definitely do it without reference, but at some point, you must have those buyers or sellers in your sphere. The cost to reach this price range is very expensive up front. We are talking about a marketing campaign in the range of 4k to 5k per month at least in advertising within those areas. After a few months of campaigning, you may get a few calls from sellers or buyers. There’s a lot more to mailing, it needs to be done the right way. So it takes a lot of investment to start over in that price range.

Real Estate Agent: The above two paths do not seem to everyone, I would say that 90% of agents follow the traditional Real Estate Agent path. This path, in a sense, also leads to the previous two. While in the field, you will learn from other agents, property managers, etc. The reason so many agents opt for the traditional real estate agent is because of their training and perhaps faster earning of income. If you put in the effort, you can earn income in as little as 30 days, while property management and luxury real estate take their time getting the business started. The downsides to this path are the amount of training, start-up, and hard work that you will have to put in up front due to inexperience and mistakes you will make before you have a steady, steady income (whatever is stable for you). Agents generally earn 3% of the amount of the home sale. Example, house of 200K, the commission would be 6K, let’s take the same division as before 80/20, the agent receives $ 4,800 X 1 a month X 12, the agent would earn $ 57,600 a year. Not bad. Keep in mind that some, most, or most real estate companies charge a transaction fee, desk fee, annual fee, etc.

All in all, the path to obtaining your Real Estate Licenses is entirely up to you. Keep in mind that what you choose will require hard work, countless hours of training, and possibly work on Saturdays and Sundays. All of these have their pros and cons. There is much more to each of these than what I described and you should do more research if you want a career in real estate.

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For Sale By Owner – Ask Your Loan Agent For Help

For sale by the owner

So you want to sell your house. You do not know what to do.

Look on the Internet. Ask your friends and relatives for advice on how to do this. You have a series of questions.

  1. What price should I ask for the house?

  2. How and where should I advertise it?

  3. How much should I spend on advertising?

  4. How long should I leave it on the market before the price drops or should I list it with a real estate agent?

  5. How did I negotiate with a buyer?

  6. Who draws up the contract?

  7. Can buyers even buy my house?

This is just a short list of questions you may have. After doing some research, you decide to try selling it yourself. You become a “for sale by owner” house. FSBO for short.

Thought of asking your mortgage loan officer for help?

Mortgage loan officers are not real estate agents and most likely can’t answer all of your questions about selling your home, but they can be a good ally. They are in the home mortgage financing business. They know a large number of service providers related to the real estate business. His sphere of influence and knowledge includes Real Estate Agents, Buyers, Sellers, Real Estate Contracts, Settlement Firms, Real Estate Attorneys, Appraisers, Home Inspectors along with other service providers you may need during the real estate sale by owner process.

If you are selling your home, you probably need a mortgage for your new place. Call your mortgage loan officer for pre-approval. When we meet for your pre-approval, you can discuss the ways you may need help selling your home.

The most important service they can provide is pre-approval of prospective home buyers. This will ensure that the buyer can buy your home. This step will save you a lot of time, money, and potential future heartache.

Some mortgage loan officers may also provide you with FREE marketing brochures. These brochures will be colorful, descriptive, and professional. You provide them with excellent photographs of your home. They’ll include those images along with your contact information, examples of monthly payments, and the amounts needed for your down payment and closing costs. If you need a home equity, they can recommend home valuation websites. They can also refer you to a real estate appraiser who can give you an accurate market value of your home for a fee. Most can show you how to get a real estate sales contract and fill it out. They can also refer you to a real estate attorney to do the contract if that makes you more comfortable. You may want your home inspected to provide a potential buyer with a clean home inspection. They can refer you to a home inspector for that service.

Remember, when you are a “for sale by owner” seller, use all the resources at your disposal. This includes your mortgage loan officer. They can be a great asset in your corner when selling your home on your own.

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Townhouses for sale

You can trace this word back to the royalty of England, where the term referred to a house that was kept “in the city” when the main house was in the country. Today, in the United States, it is a single family home with at least two stories. The house shares a wall with another semi-detached house. Although they are like a duplex, there is a difference. Townhomes are owned by an individual and duplexes are not. You can find townhouses for sale in areas where property prices are high and land is scarce. Many times people look at both condos and townhomes for sale because they think they are the same thing. However, there is a difference. Yes, some townhomes are sold under the listed condo, but the difference is the form of ownership. If you buy a condo or townhome listed as a condo, you will only own the interior of the building. You can also own the property abroad if you buy it as a townhouse. It depends on the rules of the homeowners association.


• Living in a townhouse that is flanked on both sides by other houses can reduce your heating bill, as only two of the townhomes have direct exposure to the outdoors.

• If you are part of a homeowners association, you have little responsibility for exterior maintenance, which can mean lower maintenance costs.

• Townhomes for sale are less expensive to buy than a freestanding home, which is good when money is tight.

• Being two floors there is less noise below or above and more privacy


• They have a lower value and if you sell your townhome, there will be less profit.

• If you have to sell your townhome in a depressed market, you could lose money.

• You may be disturbed by your neighbor’s noise

• Have little space for gardening and a small backyard.

• You have less say about the exterior appearance of your townhouse

• Since there are two sides, three if you live at the end of the row may have windows so there is less light in your house.

• In certain real estate markets, buying townhomes for sale can be financially risky.

• You may have to pay homeowners association fees, and they can be high

If there seem to be more cons than pros in buying townhomes for sale, there are many people who enjoy townhome living and will tolerate the cons. They like the proximity of their neighbors. They are glad they don’t have to be responsible for the maintenance of the exterior property, even if they have to pay the homeowners association dues.

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Creating Passive Income Self Directed IRA

Many people have questions about passive self-directed IRA income. Most of us would prefer our investments to be such that little work is required on our part, but the money keeps coming in. Here’s how this can be done.

Stocks, bonds, mutual funds, and certificates of deposit are the traditional options for the IRA portfolio. The problem today is that most of these investments grow slowly, without constant trading and without making the right transactions. Returns on certificates of deposit are barely adjusted for inflation.

One of the reasons those traditional options have been and continue to be popular is that you can usually see at least little steady growth over the long term. Holding a position requires little effort on the part of anyone.

There is another option for passive income self-directed IRAs. That choice is real estate. Real estate can help you increase your account balance faster, if you make the right deals. Now, of course, there is a bit of work involved, at least in the beginning, but any source of passive income requires a bit of upfront work.

Let’s say while reading the classifieds, you find a house that needs some work. After speaking with the landlord, she discovers that she is aging, in poor health, and plans to move in with her daughter. You want to move as quickly as possible, because you can’t even handle simple maintenance, like mowing the lawn.

He agrees to sell you the property for $ 28,000. You instruct the custodian of your IRA to make the purchase. Additional funds are needed for repairs and remodeling, say $ 7,500. Those costs should come out of the IRA as well.

While the improvements are completed, you can rent the property for one year. $ 10,000 in collected rent becomes part of your passive self-directed IRA income.

The couple renting the house like the location and the renovations, so they ask about buying the house. They agree to pay $ 135,000, the value of the house in its current condition.

After expenses, he made a profit of $ 93,500. It sounds incredible? It’s true. This is a real life example of a deal made by an Equity Trust client in DC.

You will find that most of the passive income in your Self Directed IRA is due to interest and tax advantages. If the client had conducted the real estate business with his own personal funds, his total profit would have been about $ 20,000 less, due to capital gains taxes.

Albert Einstein said, “The most powerful force on earth is compound interest.” Compound interest is the key to earning passive self-directed IRA income. You earn interest on your contributions, your earnings, and you earn interest on that interest.

If you are inexperienced in real estate investing, there are some experienced investors who are willing to help you find the right deal. If you can complete just a few offers like the one above, you’ll have all the self-directed IRA passive income you could want. And you can have the retirement you want … maybe sooner than you think.

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Do you need IDX for your real estate website?

You have probably come across many articles, bloggers, and some internet marketers who say you don’t need IDX on your real estate website. Their reason is that the top 10 real estate websites led by Zillow, Trulia and account for about half of all website traffic and therefore it is “useless” and “a waste of money” to try to compete with. they.

The term IDX is used a lot. When people hear IDX, they automatically think it’s just a home search for your real estate website. While property search is the core component of IDX, many don’t realize how to make the most of it and the valuable lead generation tools it provides.

In addition to providing home search on your website, I’m going to explain a few reasons why IDX is a must-have for any real estate website.

“Product” of your business

When I speak to real estate professionals, I always make this analogy. As a real estate professional, you are a company. You can think of your real estate website as your “store”. The MLS listings on your website are your “inventory.” Listings are all the products that exist in your “store” where visitors can browse and shop. What happens when someone visits your “store” but doesn’t have any products to offer? That person would do exactly what you and I would do … go off and go somewhere else where there is a product to look at and possibly buy.

These are valuable leads that you will lose if you don’t have IDX on your real estate website. Unless you are generating business from referrals only, your website (store) must have IDX (product).

Can create list pages

IDX gives you access to all the hundreds or thousands of listings on your MLS. As I mentioned earlier, this is your inventory and it’s like having thousands of products on your website.

By having access to all listings, you can create listing pages that focus on specific search criteria. For example, you can create a listing page that displays all listings at a specific price. Or you can create a listing page that displays listings in a specific subdivision, area, community, or school district. These listing pages provide a better user experience as they help direct your real estate website visitors to the listings they are looking for. Even more valuable is that these listing pages are search engine friendly, which is what I’ll talk about next.

Generate leads from Google search

All IDX pages that a platform provides are SEO friendly and indexed by Google, Bing, and all other major search engines. This means that all the listing pages within the IDX system are indexed by Google and it is an excellent source of organic leads. For example, for one of our clients, we created an IDX page that shows homes for sale in the Squires Elementary school district.

See what happens when you google

“Homes for Sale Squires Elementary School District”

Yes, our customer using our website with IDX is ranked # 1 out of 1,640,000 Google search results above Zillow and

With IDX you can create hundreds of these real estate listing pages and they will all appear in Google search results! Do you still think you can’t compete with Zillow?

Platform and tools for your clients

IDX is much more than just a property search for your real estate website. Many are overseeing or unaware of the valuable tools you will provide to your clients. IDX takes your real estate website to the next level by providing a platform for your clients. Visitors to your website can create an account directly on your real estate website to use IDX tools, such as saving favorite listings and favorite searches. It’s an experience your customers look forward to and will always return to.

Automatically email the latest listings to your prospects

An IDX system will be able to send your potential customers the latest listings automatically by email based on their search criteria. You can think of this as a lead promotion with listings. The user can define the searches himself directly on his website where he wants to receive the most recent listings. This is a fully automated process that will keep you in touch with all of your potential customers. When they see a list that interests them, they simply contact you.

A place for your existing customers to return

If you have established a relationship with your existing clients, they will use your real estate website when looking to buy a home again. They already trust you and your website looks familiar to them. They will already have an account within your IDX system where they can simply log in to perform their searches and use the tools that you provide. If you don’t provide home search on your real estate website, where will all your clients go? Yes … elsewhere.

Landing Pages + IDX = Powerful Lead Generation

Using landing pages is a very popular method of generating leads, especially on Facebook. When you combine landing pages with IDX, you create a very effective and powerful lead generation system.

You can create listing pages within IDX and use those pages for your landing pages. For example, you can promote a landing page that gives users access to all homes under $ 600K in the city of Clairemont. When a prospect fills out the form on your landing page, you can direct them to a listing page in your IDX system that displays these listings. Without IDX on your real estate website, a system like this would not be possible.

Offering a much more personal experience

Large real estate websites like Zillow and are highly commercialized and can be intimidating to the user. Their website is much nicer and offers confidence and a level of comfort. Since your website will focus on one area, this will also be much more familiar to your website visitors as they will know that you are a real estate expert in the area they are looking to buy from.

Do you need IDX on your real estate website? YES. IDX is a must have for your website for all the reasons mentioned above. The cost of having IDX on your website is very small compared to all the benefits you will get from it. Closing only a deal generated from your website with IDX can pay for your IDX and website service for 5-10 years!

All you have to do is look at the websites of the most successful real estate agents. Do you have IDX on your real estate website?

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Insurance as a device to manage risk

The true nature of insurance is often confused. The word “insurance” is sometimes applied to a fund that is built up to meet uncertain losses. For example, a specialty store that sells seasonal produce should increase its price at the beginning of the season to create a fund to cover the possibility of losses at the end of the season, when the price must be lowered to clear the market. Similarly, life insurance quotes take into account the price the policy would cost after collecting premiums from other policyholders.

This method of dealing with risk is not insurance. It takes more than the mere accumulation of funds to meet uncertain losses to provide insurance. Sometimes a risk transfer is referred to as insurance. A store that sells televisions promises to repair the set for a year free of charge and replace the picture tube if the glories of the television prove too much for your delicate wiring. The seller may refer to this agreement as an “insurance policy.” It is true that it does represent a transfer of risk, but it is not insurance.

A proper definition of insurance should include both the formation of a fund and the transfer of risk and a combination of a large number of separate and independent loss exposures. Only then is there true insurance. Insurance can be defined as a social device to reduce risk by combining a sufficient number of exposure units so that the loss is predictable.

The predictable loss is then shared proportionally by everyone in the mix. Not only is uncertainty reduced, but losses are shared. These are the important essentials of insurance. A man who owns 10,000 small homes, widely dispersed, is in practically the same situation from an insurance point of view as an insurance company with 10,000 policyholders, each of whom owns a small home.

The first case may be self-insured, while the second represents commercial insurance. From the insured person’s point of view, insurance is a mechanism that allows you to substitute a small, final loss for a large but uncertain loss under an arrangement whereby the lucky ones who escape the loss will help compensate the losers. few unfortunate. who suffer losses.

The law of large numbers

I repeat, insurance reduces risk. Paying a premium on a homeowners insurance policy will reduce the chance that a person will lose their home. At first glance, it may seem strange that a combination of individual risks results in risk reduction. The principle that explains this phenomenon is called in mathematics the “law of large numbers.” It is sometimes loosely called the “law of averages” or the “law of probability.” Actually, it is only part of the probability issue. The latter is not a law at all, but simply a branch of mathematics.

In the seventeenth century, European mathematicians were building crude mortality tables. From these investigations, they found that the percentage of males and females among births each year tended everywhere toward a certain constant if a sufficient number of births were tabulated. In the 19th century, Simeon Denis Poisson gave this principle the name of the “law of large numbers.”

This law is based on the regularity of the occurrence of events, so that what appears to be a random occurrence in the individual happens simply appears so due to insufficient or incomplete knowledge of what is expected to occur. For all practical purposes, the law of large numbers can be stated as follows:

The greater the number of exposures, the closer the actual results obtained will be to the probable result expected with an infinite number of exposures. This means that if you flip a coin a large enough number of times, the results of your attempts will be close to half heads and half tails, the theoretical probability if the coin is tossed an infinite number of times. .

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The REO Formula – Real Estate

To clarify, let’s describe what Real Estate or “REO” is. Real estate foreclosed by an institutional lender (primarily banks, mortgage companies, insurance companies, etc.) and now owned by that lender is owned by REO. Most lenders have an REO department within their business generally managed by an REO officer, a bank employee, or another lender. Lenders definitely do not want to own property that they have had to foreclose. They are under pressure from federal and / or other banking regulators to dispose of these properties. This also reduces your ability to make new loans.

Today, Short Sale is a very popular method of buying these foreclosed (or about to be foreclosed) properties from banks. There is another method or technique that real estate investors have used for many years and is known as the “REO Formula.”

Let’s look at an example of using the REO formula.

Let’s say you are a real estate agent with a very active and wealthy investor client who owns multiple properties and is always looking for a way to acquire more properties and / or raise cash. It seems that many investors always need cash to make another “deal”.

Let’s say your client owns several parcels of good building land. You would like to acquire more income generating properties. He tells one of his REO officer contacts about a small apartment complex for which the bank would take $ 250,000. You know the fair market value of the units should be around $ 350,000.

After consulting with his client, he presents the following proposal to the bank:

1) Your client will exchange development land valued at $ 250,000 to the bank for the apartments, as long as the bank loans your client $ 175,000 (70% LTV) in cash for the apartments.

two) Then your client will buy back the land from the bank with a down payment of $ 87,500 and the bank will loan the balance of $ 162,500 (65% LTV).

Let’s see the benefits for both parties:


1. You have completed a tax-deferred exchange of your development land for the apartments.

2. You have $ 87,500 in cash that is also tax deferred.

3. You have traded idle land for income-generating properties.


1. You have traded one unwanted REO property (a bad loan) for two good loans from a capable borrower.

Another way this could be structured could be for the bank to make the loan on your client’s land. Then your client could buy the apartments with an advance and a bank loan. However, using this method would not have the same tax benefits. Please note that I am not giving tax advice here. Before structuring any transaction that may have tax ramifications, you or anyone should consult with a certified public accountant or tax professional.

These publications are the opinion of the author who is not engaged in providing legal, accounting or investment advice. If such advice is required or desired, the services of competent professionals should be sought.

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