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How to Set Goals in Real Estate Investing?
William Bronchick want to challenge you to start setting some goals but remember if a goal is not in writing, it is simply a conversation. It must be in writing and it must have a deadline. Here are a few guidelines for setting goals in real estate investing.
Important Lease/Option Tips & Strategies
Lease/Options can be fun and profitable, but there are certain pitfalls. The following are some practical, legal and tax tips William Bronchick have learned from doing many lease/options deals over the years.
Read Before You Sign on the Dotted Line
Too many investors go to closing and sign documents without ever reading them, taking the word of the “professionals” involved in the closing. This is a huge mistake unless that professional is your lawyer, and he or she has read and understood the loan documents. Don’t presume that the lawyer you are paying represents you. Many banks have lawyers that represent them and charge that fee to the borrower says William Bronchick.
Mortgage brokers and lenders are not by their nature dishonest but there are enough shady characters that try to slip things by on borrowers. In some cases, it is a mistake by the lender or a miscommunication between the mortgage broker and the lender, both of which result in the borrower getting a different loan than what was promised.
The most common things that are incorrect on a loan are:
Prepayment Penalty
The most common “hidden” clause is a prepayment penalty that the lender does not disclose or that was supposed to be omitted. The only way to know for sure is to read your mortgage note to see if there is a prepayment penalty clause. In some cases, a lender may say there is no prepayment penalty but has inserted a “soft” prepayment penalty (applies to. In addition, read carefully how much the penalty is, and how long after the loan is originated the penalty applies.
Fixed versus Adjustable Rate
If you pay for a fixed-rate loan, you may end up with a surprise at closing in the form of an adjustable-rate loan that is fixed only for a certain time period, such as two years. In some cases, you may be promised a five-year fixed rate and end up with a three-year fixed rate. Moreover, read carefully about how the loan adjusts. Some ARM loans can only be adjusted twice a year, others can be adjusted monthly. Finally, look at the amount the loan can adjust each time, and the maximum rate the lender can charge over the life of the loan. All of this will be spelled out in the mortgage note. (Hint: if the note is titled, “Adjustable Rate Loan,” it’s a dead giveaway that you don’t have a fixed-rate loan!)
Owner-Occupied Loan
If you apply for the loan as an investor, the mortgage broker may submit it for approval as an owner-occupied loan, either by accident or on purpose. Read the documents carefully. Do not sign your name to any document saying that you promise to live on the property if you aren’t actually going to do so. In most cases, the mortgage or deed of trust will have a rider (addendum) that says you do not intend to occupy the property as your principal residence.
The bottom line my friends is READ before you sign. Once you sign, you are out of luck, because there’s no three-day right of rescission for an investor loan emphasis William Bronchick! Remember, having an attorney or mentor that understands real estate is always a bonus!
Originally Posted: https://bronchick.wordpress.com/2018/03/26/read-before-you-sign-on-the-dotted-line/
William Bronchick, Esq., is a nationally known attorney, author, entrepreneur and speaker. William Bronchick has spoken to tens of thousands of people at seminars.
Best-Selling Author and Attorney Colorado
William Bronchick, Esq., is a nationally known attorney, author, entrepreneur and speaker. William Bronchick has spoken to tens of thousands of people at seminars.
Creative Real Estate Marketing Ideas in 2018
The estate market continues to grow in 2018. Hence, agents should think about the ways to improve their estate corporate marketing methods this year. This is crucial to have tactics that will help individuals maximize visibility and stay apart from the competition, says William Bronchick.
There is a huge competition in estate industry these days, hence individuals needs online and offline marketing strategies. If you are looking for some marketing ideas then you are at right place. In this article, we have compiled a list of estate marketing ideas to help agents stand out in the digital age.
Following are some creative Real Estate marketing ideas that you should follow in 2018:
Create a Responsive Website
More than 30% of visits are from smartphones. Hence, you should make sure that your website is optimized for all platforms (Android, iOS etc.) as well as devices (smartphone, desktop etc.).
Upgrade the Quality of Photos
Actually, inexpert eyes can tell the difference between good quality photos and hurried clicks. If individuals are looking for home and pictures are blurry, it will leave a bad impression. Therefore, you should take some time to take quality pictures.
Active on Social Media
Todays, people of every age use social media to share updates about their lives. Being an estate agent, you can utilize the social media channel to grow or cultivate your real estate business. Moreover, you should share value-rich content on different social media sites.
Add Live Chat Option to Your Website
Live chat is an effective online marketing tool. This option allows website visitors to ask questions and get the answers in real time. Furthermore, live chat creates a stronger user experience and provide valuable information to reach out.
Create Content that Provides True Value
According to William Bronchick, the primary focus of an agent should be on clients who want to buy or sell a home. Estate agents have to share the content full of valuable information applicable to individuals not presently in the niche. Moreover, sharable content also increases agent’s exposure to prospective clients.
Follow Up With Clients
This is essential to stay in touch with your previous clients. There is a need to send newsletters and email on regular basis. By providing valuable information about your business and reaching out continuously, previous clients will more likely to remember you when they need some help.
Ask for Referral
Word of mouth marketing is one of the simpler, easiest and cost-effective marketing methods. Here, the key is to ask. You should create a referral program with affiliates, maintain a good relationship with clients and ask them for referrals. More than 80% estate agents agree the fact that referrals from present and past clients are the successful marketing efforts.
Bottom Lines
In order to grow and cultivate estate industry, it requires effort and time. The marketing tactics here are given by William Bronchick, which worth agent’s effort if they follow different techniques wisely and attentively.
Source By:
https://williambronchickblog.wordpress.com/2018/03/14/creative-real-estate-marketing-ideas-william-bronchick/
William Bronchick | Creative Real Estate Marketing Ideas in 2018
In order to grow and cultivate estate industry, it requires effort and time. The marketing tactics here are given by William Bronchick, which worth agent’s effort if they follow different techniques wisely and attentively.
If you’ve been buying and flipping or renting single family homes, you may want to look into apartment investing. There has never been a better time!
If you’ve been buying and flipping or renting single family homes, you may want to look into apartment investing. Yes, I know, you think you need gobs of cash to buy apartments when the fact is you can buy apartments with little or no cash out of pocket. I’ve done it, my students have done it, and you can do it, too by William Bronchick!
William Bronchick | Is Wholesaling Properties Legal Without a License?
William Bronchick: You buy a property, you wholesale it, you profit. Do you need a license to wholesale Property? In most cases, the answer is “no”.
Real estate brokerage is an activity regulated by states on their own terms, thus each state defines which activities require a license. There is a lot of vagueness and ambiguity in some of the state licensing codes, as well as “gray areas”, which complicate the matter. Furthermore, if you vary the techniques and your business practices beyond the scope of what I teach in my courses, it is not always clear how the state authorities might view your practices. Therefore, this discussion is limited to the simple act of buying and flipping as follows:
1. Sign a contract with a seller, assign it to another investor
2. Sign a contract with a seller, sign another one with a third party, then double close
“FOR ANOTHER”
The large majority of states use the “for another” language in their state licensing statutes. The “for another” language means the law provides a laundry list of activities that require a license if you do it “for another.”
A good example is the Ohio Statute:
§ 4735.01 Definitions. As used in this chapter:
(A) “Real estate broker” includes any person, partnership, association, limited liability company, limited liability partnership, or corporation, foreign or domestic, who for another, whether pursuant to a power of attorney or otherwise, and who for a fee, commission, or other valuable consideration, or with the intention, or in the expectation, or upon the promise of receiving or collecting a fee, commission, or other valuable consideration does any of the following:
The Ohio code then goes on to list all types of activity, such as buying, selling, offerings, leasing, negotiating, etc. This type of statute would clearly exempt you from doing any of the listed activity so long as you were doing it on your own behalf. The following court case clearly delineates the difference between acting on your own behalf and acting as a broker.
In Xarin Real Estate v. Gamboa, 715 S.W. 80 (TX 1986), an investor named Xarin entered into a purchase contract with the owner, Gamboa, then assigned his purchase contract to a third party, Baker. When the deal blew up, Baker sued Xarin claiming, among other things, that Xarin was illegally acting as a real estate broker without a license.
The court ruled that “No evidence exists to show that Xarin was acting for anyone but itself when it sold its interest to Baker. Xarin was shown on the sales contract to be only the purchaser and was not shown in any agency capacity… There is also no evidence that Xarin acted for Baker when Xarin acquired its interest in the property from the Gamboa’s. Generally, to establish that one person has acted for another in a normal agency relationship, there must be an agreement between two persons and one must exercise some control over the other.”
Two important points are worth noting here. First, the court acknowledged that Xarin had “an interest in the property” when it signed a purchase contract with Gamboa. As we will discuss later, having “an interest” in real estate allows you to sell your interest, which is specifically exempt from many state licensing laws. Second, the court made an important point that the Xarin did not have a deal with Baker in place when it made the deal with the owner of the property. This is important because the reverse can also be true; if you make a deal with a buyer first, then find him a property, a good argument can be made that activity is brokering on behalf of the buyer said by William Bronchick.
CLEAR EXEMPTIONS
Other states that do not use the “for another” language clearly identify specific exemptions in their licensing statutes. A good example is the South Carolina statute, which reads:
“This chapter does not apply to:
The sale, lease, or rental of real estate by an unlicensed owner of real estate who owns any interest in the real estate if the interest being sold, leased, or rented is identical to the owner’s legal interest”
However, you must have an interest in the property before you sell it. In general, a contract to purchase property gives the buyer an equitable interest in the land. 27A Am. Jur. 2d Equitable Conversion § 10. Thus, if you have an interest in the property, you are basically exempt from the licensing regulations in these states.
TRYING TO SKIRT THE LICENSING RULES
While the basic types of activity I have described is generally exempt from licensing regulations, there are cases in which a license would be required. For example, if you are finding buyers first, then shopping around for properties you can wholesale to them, this could be essentially acting as a buyer’s broker. The premises of my discussion assumes that when you go under contract with the seller you do not have a buyer to assign or flip to, thus you are “at risk”.
REGULATION FOR ALL
A few states limit the real estate activity of any persons, even if you are acting on your own behalf. SD, MN, WI, MI, MD & MN all have limitations on the number and frequency of real estate transactions you can do before you will need a real estate license. For example, Michigan law limits you to 4 transactions per year, although it is not clear whether using multiple corporate entities will be a workaround.
There’s few, if any, reported cases of people being prosecuted anywhere in the country for not having a real estate license. The issue of licensing is more relevant to the enforcement of your profit. For example, if you assign your contract prior to closing and expect the buyer to pay you at closing, he may stiff you and argue “you don’t have a license”.
The bottom line is that if you don’t act like a real estate broker, the state agencies that license brokers will leave you alone. If you use the licensing exemptions to skirt the licensing laws, you will likely hear from the state licensing agencies. It is important that you make it very clear to all parties in the transaction that you are not a broker and are acting on your own behalf. Sometimes having a trusted advisor, attorney or mentor can truly keep you out of trouble
Source By: https://bronchicklaw.com/is-wholesaling-properties-legal-without-a-license-in-colorado/
Read Before You Sign by William Bronchick
William Bronchick: Too many investors go to closing and sign documents without ever reading them, taking the word of the “professionals” involved in the closing. This is a huge mistake unless that professional is your lawyer, and he or she has read and understood the loan documents. Don’t presume that the lawyer you are paying represents you. Many banks have lawyers that represent them and charge that fee to the borrower.
Mortgage brokers and lenders are not by their nature dishonest but there are enough shady characters that try to slip things by on borrowers. In some cases, it is a mistake by the lender or a miscommunication between the mortgage broker and the lender, both of which result in the borrower getting a different loan than what was promised.
The most common things that are incorrect on a loan are:
Prepayment Penalty
The most common “hidden” clause is a prepayment penalty that the lender does not disclose or that was supposed to be omitted. The only way to know for sure is to read your mortgage note to see if there is a prepayment penalty clause. In some cases, a lender may say there is no prepayment penalty but has inserted a “soft” prepayment penalty (applies to refis only). In addition, read carefully how much the penalty is, and how long after the loan is originated the penalty applies.
Fixed versus Adjustable Rate
If you pay for a fixed-rate loan, you may end up with a surprise at closing in the form of an adjustable-rate loan that is fixed only for a certain time period, such as two years. In some cases, you may be promised a five-year fixed rate and end up with a three-year fixed rate. Moreover, read carefully about how the loan adjusts. Some ARM loans can only be adjusted twice a year, others can be adjusted monthly. Finally, look at the amount the loan can adjust each time, and the maximum rate the lender can charge over the life of the loan. All of this will be spelled out in the mortgage note. (Hint: if the note is titled, “Adjustable Rate Loan,” it’s a dead giveaway that you don’t have a fixed-rate loan!)
Owner-Occupied Loan
If you apply for the loan as an investor, the mortgage broker may submit it for approval as an owner-occupied loan, either by accident or on purpose. Read the documents carefully. Do not sign your name to any document saying that you promise to live in the property if you aren’t actually going to do so. William Bronchick says that in most cases, the mortgage or deed of trust will have a rider (addendum) that says you do not intend to occupy the property as your principal residence.
The bottom line, my friends, is READ before you sign. Once you sign, you are out of luck, because there’s no three-day right of rescission for an investor loan!
Source By:
https://bronchicklaw.com/read-sign-william-bronchick/
William Bronchick | 7 Reasons to Use Land Trusts in Colorado
William Bronchick: The land trust is a very powerful tool for the savvy real estate investor, and there are many reasons to use land trusts in Colorado. A Colorado land trust is a revocable, living trust used specifically for holding title to real estate. Each property is titled in a separate trust, affording maximum privacy and protection. Also known as an “Illinois Land Trust”, the title-holding land trust is recognized by statute in Florida, Georgia, Hawaii, Illinois, Indiana, Montana, North Dakota, South Dakota, and Virginia.
Colorado does not have a land trust statute, but since a land trust is a basic revocable, living trust, it would be recognized under common law trust principles.
Here are seven good reasons to use a Colorado land trust for titling property to real estate.
Privacy
In today’s information age, anyone with an internet connection can look up your ownership of real estate. Privacy is extremely important to most people who don’t want others knowing what they own. For example, if you own several properties within a city that has strict code enforcement, you could end up being hauled into court for too many violations, even minor ones. Having your real estate titled in land trusts makes it difficult for city code enforcement to find who the owner is, since the trust agreement is not public record for everyone to see.
Protection from liens
Real estate titled in a trust name is not subject to liens against the beneficiary of the trust. For example, if you are dealing with a seller in foreclosure, a judgment holder or the IRS can file a claim against the property in the name of the seller. If the property is titled into trust, the personal judgments or liens of the seller will not attach to the property. This is because of the unique nature of land trusts, which make the beneficiary’s interest in the trust “personal property”, and vests all legal and equitable title in the trustee. Thus, a judgment against X is not a lien on the property held in a land trust for X.
Protection from title claims
If you sign a warranty deed in your own name, you are subject to potential title claims against you if there is a problem with title to the property. For example, a lien filed without your knowledge could result in liability against you, even if you purchased title insurance. A land trust in your place as seller will protect you personally against many types of title claims because the claim will be limited to the trust. If the trust already sold the property, it has no assets and thus limits your exposure to title claims.
Discouraging Litigation
Let’s face it, people tend to only sue others who appear to have money. Attorneys who work on contingency are only likely to take cases which they can not only win, but collect, since their fee is based on collection. If your properties are hard to find, you will appear “broke” and less worth suing. Even if a potential plaintiff thinks you have assets, the difficult prospect of finding and attaching these assets will discourage litigation against you.
Protection from HOA Claims
When you take title to a property in a homeowner’s association (HOA), you become personally liable for all dues and assessments. This means if you buy a condo in your own name and the association asseses an amount due, they can place a lien on the property and/or sue you PERSONALLY for the obligation! Don’t take title in your name in an HOA, but instead take title in a land trust so that the trust itself (and thus the property) will be the sole recourse for the homeowner’s association’s debts.
Making contracts assignable
The ownership of a land trust (called the “beneficial interest”) is assignable, similar to the way stock in a corporation is assignable. Once property is title in trust, the beneficiary of the trust can be changed without changing title to the property. This can be very advantageous in the case of a real estate contract that is non-assignable, such as in the case of a bank-owned or HUD property. Instead of making your offer in your own name, make the offer in the name of a land trust, then assign your interest in the land trust to a third party.
Colorado’s Unique Trust Statute
In most states, a property in trust must be held in the name of the trustee, for example, “John Jones, as trustee under a declaration of trust dated June 2, 2011”. Colorado law (CRS C.R.S. 38-30-108.5) allows a trust to take title in its name, then the trustee may file a “statement of authority” identifying the trustee (CRS 38-30-172). If you want to change trustees in Colorado, you do not need a new deed, just amend the land trust and file a new statement of authority with the County Clerk and Recorder.
William Bronchick: As you can see, the title-holding land trust can be very beneficial for the owner of real estate in Colorado.
Source By: https://bronchicklaw.com/articles/7-reasons-to-use-a-land-trust-in-colorado/
William Bronchick | What to do if a Tenant Abandons Your Property
William Bronchick: Have you ever had a tenant leave in the middle of the night or the middle of an eviction? Did you ever wonder what to do when the tenant abandons the property?
Basically, when a tenant abandons the property, you do not need to file an eviction or wait for the sheriff. You can change the locks.
HOWEVER…
If you are not certain whether the tenant has abandoned the property, you should not change the locks. If you have the keys and your lease allows it, you could enter the premises, but KNOCK FIRST. Whether or not the tenant has abandoned is often a judgment call, looking at a combination of factors, such as:
· Did the neighbors see them move?
· Are the utilities shut off?
· Did the tenant put in a change of address at the post office?
· Is there any significant furniture left?
· If you have access, are there sheets on the beds?
Even if the tenant is not sleeping there, they are still “in possession” if they have their personal belongings in the unit and have not shown an intent to abandon these items.
If you do intend to claim abandonment, take pictures, gather evidence and cover all bases to prepare for a possible wrongful lockout claim.
Definitely, give the tenant notice in writing where you have stored their stuff (if you have anything) and give them adequate time to come get it. If you have ANY doubts, call your landlord–tenant attorney and do the proper legal eviction proceeding. Or, here’s another possibility… said by William Bronchick.
PAY THE TENANTS TO LEAVE!!
If the tenant has NOT abandoned your property, or you aren’t sure, or you messed up and they are coming back for their stuff, you should consider giving “Cash for Keys” to bribe the tenant to give up possession. While not deserving if they are behind on rent, it is smart BUSINESS because you avoid an eviction and possible damage to the property by the tenant. If you do this, however, make CERTAIN you get the tenant to sign a general release of liability form. This form, when signed by the tenant, will waive their rights to sue you (even if you messed up and they have a claim).
Make sure you contact an attorney to prepare a good general release of liability form.
Source By: https://bronchicklaw.com/tenant-abandons-property/
How to Pick a Good Colorado Real Estate Attorney
William Bronchick: No real estate course or seminar is a substitute for a good Colorado real estate attorney. Finding a good Colorado real estate attorney may be difficult since most attorneys are not themselves investors or familiar with creative transactions. Most attorneys will give you just enough advice to keep them from getting sued, but not enough advice to show you how to make more money out of a deal.
A good Colorado real estate attorney is one who advises you of the risks, suggest alternative ways of doing a transaction and charges a reasonable fee for doing so. A bad real estate attorney either says nothing, points out problems without offering solutions or systematically kill deals. This is why attorneys are frequently referred to as “deal killers”.
Ask other investors in your area who they use as an attorney. Join a local real estate investors association and ask for referrals. Ask local real estate agents and title companies for referrals. Do not Google search for a Colorado real estate attorney and pick someone who simply CLAIMS to be a real estate expert, but is really a jack of all trades, one of which happens to be real estate said by “William Bronchick”.
When interviewing a potential real estate attorney, ask the following questions:
» Do you own rental property yourself?
» How many closings do you do per year?
» What kind of unusual transactions have you done recently?
» Have you done any evictions? Foreclosures? Zoning board appeals? Condo conversions?
» Can you explain to me the following concepts: lease/option, wrap, AITD, installment land contract?
» Do you have an assistant who can return my calls?
» Can I email you with questions?
Get a feel for the experience and personality of the attorney. A good Colorado real estate attorney on your side is worth his weight in gold, especially if he can do creative closings.
Source By:
https://bronchicklaw.com/pick-good-real-estate-attorney-colorado/
“Release” Yourself from Liability | William Bronchick
William Bronchick: People settle claims out of court all the time, and that is often the smart thing to do. But, most people forget the one simple step that is crucial to the process. This simple step, if omitted, can result in a future lawsuit against you, even if you allegedly settled the claim.
Consider the act of settling with a tenant who his behind on his rent: you accept the keys, waive his back rent and he moves out quietly. But, the tenant can always come back and sue you years later regarding damage to his property because of a leaky pipe. There is a simple way to avoid this lawsuit from happening.
Consider the times you may have accepted or given an earnest money deposit on a real estate contract. The closing never happened, and you either kept or forfeited the earnest money. Does this mean you can’t be sued in the future for breach of the contract? Don’t bet on it!
Consider the times you may have settled a claim with your neighbor regarding any controversy that may have allowed him to sue you. It may have been a situation where he fell on your property and was injured. You offered to pay his medical bills and he graciously accepted. However, two years later, what is to stop him from suing you for additional damages for pain and suffering? The answer: nothing! OK, so now you are begging me to reveal the secret of how to avoid future liability on transactions such as these. The answer is simple: you need to get a written release of liability.
A release, also known as a “general release,” is a simple document by which someone agrees to release you from all liability. A properly drafted release will prevent the signor of the document (the “releaser”) from bringing any claims against you in the future that he had as of the date of the release. Keep in mind that the release will not prevent the releaser from suing you for new claims related to events that arose after he signed the release by William Bronchick.
So, whenever you have a dispute with any other party that is settled, make sure you have that party sign a general release form before you give any money or consideration. And, speaking of consideration, there must be consideration given for the release to make it legally binding. In other words, you can’t just get someone to sign a release with nothing in return. A promise to waive your own legal rights against the releaser is sufficient consideration (i.e., you may have to sign a release against the other party as well). If you can’t think of any consideration, consider any counterclaim you may have against the opposing party, and threaten legal action to create a “dispute.”
For example, if someone threatens to sue you over monies owed for services, consider questioning any part of the services provided that may have been performed inadequately. Of course, you may have to visit with a lawyer to determine what claims, if any, you may have against the party threatening you. In other words, don’t lie or make something up. Do what lawyers do: use your imagination, find a creative argument that might hold water, then bluff! Even if you have a very small chance of winning on your counterclaim in court, it is sufficient consideration to waive that claim in exchange for the opposing party waiving their own claim.
Source By:
https://bronchicklaw.com/release-yourself-from-liability/
The Mortgage Elimination Scam | William Bronchick
William Bronchick: You’ve seen the claims
“Eliminate your mortgage!!”
Can this really be true? Well, I’ve researched the law and here’s what I came up with.
The Claim
The claim they are making is that you can legally eliminate your mortgage based on a legal loophole that goes something like this…“If the lender who funded your loan used borrowed money to fund your loan, then the loan is not valid. And, since the loan is not valid, the security instrument is not valid either. All you do is simply march into court and ask a judge to void your mortgage lien, and you don’t have to pay it back.”
Now, without going into the legal issues, a common sense approach would tell you that the entire premise of this argument is patently absurd. Think about it… most lenders use borrowed money to fund loans, that’s the nature of the business.
So, if these promoters are correct, then millions of mortgages would be void. The entire economy would collapse.
The Law
The “mortgage elimination” promoters cite various court cases in support of their position. At first blush, it would seem there are dozens of court cases in which the judge actually did what they claimed, that is, declare a mortgage void because the lender used borrowed funds for the loan. But, since most laymen are not trained in the law, they take this stuff, hook, line, and sinker.
I’ve read the decisions and they all have a common theme: they don’t support the mortgage elimination theory. In fact, most of the cases are only vaguely on point.
The “tax protestor” promoters did the same thing… take a quote from a judge’s decision out of context and cite the case as support for their position. In the end, the tax protestors all lost in court, paid large fines and went away with their tails between their legs. The government went after the promoters of the scam.
Similarly, the government is going after the promoters of the mortgage elimination scam. The Federal Reserve recently issued a warning, a copy of which can be found at the end of this article. The Office of the Comptroller of the Currency issued a similar warning last year.
The Cult of Stupidity
As William Bronchick write this, undoubtedly a few “followers” of the theory will email me and argue that I don’t understand or that I’m part of the “establishment mentality” that keeps the little guy down. Of course, these are likely the same people who are collecting referral fees from the scammers that are charging thousands of dollars to consumers in exchange for a false promise to eliminate their mortgages.
How to Really Eliminate Your Mortgage
There are some legal ways to eliminate your mortgage:
1. Pay it off in full
2. File for chapter 7 bankruptcy (in which case you will not be liable for the mortgage note, but you will also lose the house)
3. Find a REAL legal challenge that a judge is willing to accept as a valid reason to declare the debt void, such as usury, gross violation of lending laws, fraud, incompetence or the like
Source By: https://bronchicklaw.com/mortgage-elimination-scam/
How to Create a Real Estate Business Plan | William Bronchick
William Bronchick: Any major endeavor worth doing right requires some sort of organized plan. Starting a business and getting it off on the right foot is no different. It’s amazing to me that most folks that are starting a business spend more time planning a 1-week vacation that they do laying out the steps of a business they intend to support them for many years into the future!
In order to help you on your journey, we will explore 7 key ingredients that are essential in a complete real estate business plan.
1. How Much Are You Going to Invest Initially?
It’s important for business plan purposes to at least allocate an amount of money that you wish to invest at first. This can be cash on hand, savings, a line of credit, IRA money, partner’s money or other. It’s not important to have an exact amount, just a starting point. The amount can be changed as needed.
2. Entities and Principals
I am always amazed in my roles as both an investor and business consultant at a number of investors, even those experienced, that do all of their business and hold all or most of their assets in their own names! A proper business entity (LLC, S- Corp., C-Corp. or other) can provide asset protection and help with your tax situation- in a BIG way! Most investors start out with an LLC, which is fine but there may be other entities, such as an S-Corp. that are better suited for their particular investment strategies. Many of us, that do a variety of investment strategies, have at least a couple (NOTE: Everyone is a bit different so, we recommend consulting an attorney, tax advisor; mentor or accountant versed in real estate for what will be the best option for their business). You also need to list the folks who will be part of your entities, their positions, and percentages of ownership.
3. Investing Strategies
Real estate is a business with many potential investing strategies. Some strategies work better in different types of markets and locations. It’s up to you to pick a few that make sense to you, depending on your education, available funds, location, type of market and more. Joining a local REIA (Real Estate Investing Association) or seeking the advice of a mentor is a good way to narrow down your choices. Educating yourself will help determine what may be a good fit for you and your partners.
4. Goals and Income for 1, 3 and 5 Years
It is also important to have an idea of your goals as to what you wish to accomplish over a period of time and the potential income that you can derive from those efforts. As far as goals, what do you want to do? Replace current income? Retire? Build an empire? It’s important to relate your business plan with your goals and to figure out what kind of income one can derive from that. Short term strategies such as Wholesaling, Rehabs etc. can yield anywhere from $3k to $40K + per deal. Long-term strategies such as Buy & Hold ($300- $500 per month) will take longer and yield less income annually but pay off big time after a few years. As far as goals, you obviously should be making quite a bit more in 5 years than at year 1.
5. Investment Areas and Target Sellers/Buyers
It’s important to figure out the area or areas where you will invest. Most of us start with areas close to where we live, but it is possible with the right team and plan in place to successfully invest in other states and other areas. Depending on your investing strategy, you will also want to identify who your target seller will be and market to them accordingly.
6. Marketing Plan
You can know all there is about real estate and have unlimited funds, but without a Marketing Plan, you have NO business! There are a variety of types of marketing within the grasp of the average investor and it’s up to you to try a variety of methods, track what works, and pursue it relentlessly! Your business plan should list the various marketing tactics you plan to use and maybe even include some potential marketing ideas for the future.
7. Exit Strategies
Nothing is forever. A great business plan also includes when and how you plan to exit the business. Some choices are; Closing the Business, Selling It, Giving it to Your Heirs and more. This can also be changed as time and circumstances dictate.
Hopefully, these 7 Tips will help you formulate a solid business plan that rockets you to success! Remember, a business plan is like a map. It can be changed, tweaked, adjusted and revised as your circumstances or the market circumstances change.
Sources:
https://www.legalwiz.com/create-real-estate-business-plan/
William Bronchick | Getting Started in Real Estate with Little or No Money
“William Bronchick” You’ve seen the late-night infomercials with self-anointed gurus promising you millions in real estate profits with no money down. The truth is that many of these charlatans never made a dime in real estate, but instead built their fortunes through selling over-priced or useless information to unsophisticated investors suffering from insomnia.
Most of us are smart enough to realize that no real estate “system” is foolproof, and if anything seems to be good to be true, it probably is. However, that doesn’t mean that you need excellent credit and a surplus of cash to get started in real estate. Here are some strategies for financially-constrained aspiring investors to begin generating real estate cash flow.
You Don’t Have to Own a Property to Make Money from It – Be a Dealer
There are two types of quick-sale real estate investors – retailers and dealers. Retailers buy properties outright and sell them for a quick profit. Their risk is highest, but so is their potential reward. Contrary to the late-night realty televangelists, retailers typically need substantial cash for a down payment, and at least decent credit.
Dealers, by contrast, buy and sell contracts, not properties. They find bargain properties and sign purchase contracts with their sellers. Dealers then sell these purchase contracts to retailers, making a solid profit in the process. This is known as “assignment of contract.” Usually, the only cash required is the earnest money to secure the deal. A good dealer can then flip the contract for a quick $1,000 to $3,000 without ever taking possession of the deed.
Use a Double Closing for Greater Profit Potential
A double closing allows a dealer to earn a higher profit margin than an assignment of contract. With an assignment of contract, there is always potential that the deal will ultimately fall through. The dealer is protected in this case because she has already received her proceeds from the sale of the contract, but the retailer who buys the contract from her is wary of the deal falling through, and thus, will factor it into the price he is willing to pay. With a double closing, the dealer assumes more risk, because if the deal falls through, she receives nothing. However, with this greater risk comes a greater reward.
A double closing begins with the dealer signing a purchase contract with the property owner. Then the dealer signs a contract with the retailer, in which the retailer agrees to buy the property from the dealer at a higher price, and deposits that amount in escrow. The property owner signs the deed to the dealer, who then signs it to the retailer. The retailer then signs the loan documents, and the process is complete – the property owner is paid his asking price, and the dealer is paid the difference. Note that the dealer came to the table with no money, and her credit was never an issue.
Be a Scout – No Cash or Credit Required
In addition to dealers and retailers, scouts are a third type of real estate “flipper.” Instead of flipping actual properties or contracts, scouts flip information.
Scouts face even less risk than dealers, and have almost no cash or credit concerns. They simply gather information about distressed properties and sell it to interested dealers and retailers. In effect, scouts do the dirty work for real estate investors, and investors are willing to pay them handsomely for doing it. Typically a scout will gather the following data on a potential deal: The owner’s name and contact information, the asking price, information about the mortgage and whether payments are current, outstanding liens on the property, a photograph of the house, and pertinent information about the owner’s motivation to sell – i.e. is he in the middle of a divorce, foreclosure, job transfer, etc.
Investors typically pay scouts between $500 and $1,000 for good information, but what happens if an investor doesn’t pay? Simple – don’t take any more deals to them. Successful investors realize the value of good information, and they are more than willing to pay for it.
Take over the Seller’s Mortgage Payments
Prior to 1989, almost all home loans were freely assumable. This meant that anyone could take over the payment of the loans without objection from the lender. However, due to a climate of rising interest rates that began in the late eighties, virtually all home loans issued since then contain a “due-on-sale” clause. This means that when ownership of a property is transferred, the lender can demand payment, in-full, of the outstanding loan.
However, “due-on-sale” is merely a contract clause – not a law. It is the lender’s prerogative as to whether or not this clause is exercised. If you buy a property and take over the loan payments, there is a distinct possibility that the lender won’t even notice. There’s an even greater chance that the lender will choose not to exercise the due-on-sale clause, so long as you make timely payments. After all, the cost of enforcing the clause is significant, and as long as the lender is being paid, it is unlikely to care who signs the monthly checks. Armed with this knowledge, you can potentially buy properties without a credit check.
Real Estate Success Always Requires an Investment
There are ways to profit from real estate without significant financial investment, however, that is not to say that success comes free and easy. At the very least, you will need to make a substantial investment in yourself. In order to succeed, you must be willing to work hard. Even with a million dollar real estate portfolio, your brain will always be your #1 asset. Be sure to invest in your education on a daily basis, and learn as much as possible about your local market, real estate law, and investment strategies.
Source By:
https://www.linkedin.com/pulse/getting-started-real-estate-little-money-william-bronchick-1/
William Bronchick is an best-selling real estate author with 20 years experience. He is the president of the College of American Real Estate Investors
Any major endeavor worth doing right requires some sort of organized plan. Starting a business and getting it off on the right foot is no different. It’s amazing to me that most folks that are starting a business spend more time planning a 1-week vacation that they do laying out the steps of a business they intend to support them for many years into the future!