Guide Before Having A Home

Many consider, owning a home, of one’s own, to be a main element, in the so – called, American Dream. However, while, certainly, being a homeowner, is, for most, a desirable course and path, it is important, for potential homeowners, to proceed, with their eyes, wide – open, in order to be certain, they are ready for, and prepared, to OWN a house. Relevant considerations, often include, factors such as: financial ability; personal needs and priorities; specific area; local neighborhood; school system; convenience to transportation; safety – related issues; religious considerations (such as convenience to their desired, house of worship); shopping conveniences, etc. With that in mind, this article will attempt to briefly consider, examine, review, and discuss, using the mnemonic approach, some of the factors, one should evaluate, before assuming, both the benefits, and responsibilities, of home ownership.

1. Options; opportunities; orderly process: One must make the personal decision, when owning is for them, or if, they would be, more comfortable, renting. There are options, to consider, such as one’s personal comfort zone, whether they are comfortable taking – on, the associated responsibilities, financial, and one’s personal comfort zone, etc. Is having their own place, focused on the best personal opportunities, but, more dream, than need? There is a necessary, orderly process, involved, with the responsibility, and, thus, each individual must/ should, consider, whether they are ready, willing, and/ or able, to do, what’s best, for them!

2. Where; why; when: When is the right time, to buy a house? While this is an individual decision, the smartest approach, is to balance financial/ fiscal abilities, including tax considerations, etc, with the preparedness, to assume the necessities! Why do you want to purchase a specific property, as opposed to another? Is it needs – oriented, affordable, and will you be happy, living there? Where would you want to reside? Will you take fully into consideration, your family needs, goals, priorities, finances, and personal comfort zone?

3. Needs; nuances; neighbors: What is best, for your personal needs, goals, and future considerations? Each of us, have specific needs, and orientations, and, thus, a future homeowner, should look at the specific niche, and nuances, needed and necessary. Look around the neighborhood, and speak to the neighbors, to ensure it’s somewhere, you’d like to live.

Are you ready, and fully prepared, to OWN a home, of your own? Will you take the time, to, introspectively, objectively, give yourself, a check – up, from the neck – up?


Perfect Time To Maintenance Your Home

Home ownership, is, both, a right, and an obligation! A smart homeowner considers how, to effectively, maintain, his house, in the best, most effective way, to minimize costs, hassles, and keep the home, well – maintained! Rather than waiting for obstacles and challenges, to become problems, the wise ones, realize and recognize, it’s a good idea, to do, regular maintenance, on a seasonal basis. After over a decade as a Real Estate Licensed Salesperson, in the State of New York, I have attempted to simplify this process, and refer to, this approach, as the 4 Seasons, of Home Maintenance.

1. Spring: Nearly everyone has heard of Spring Cleaning, and wise owners, approach this season, as an opportunity, to address, issues, which were brought on, by winter’s weather. For example, in colder climates, houses undergo certain stresses, during winter. Front hallways, often suffer, because of the dirt, brought into the house, by bringing in the elements, such as snow, salt, etc. In addition, they clear leaves, address plantings, repair cracks on paved paths, driveways, and exterior foundation, as well as examining, whether the weight of snow and ice, have created challenges, with the gutters. Also, now that weather has warmed, it is wise, to seed lawns, and take care of all the little things, you needed warmer weather, to do!

2. Summer: Towards the end of Spring, and during the Summer, and early Fall, take care of landscaping. Do as much exterior/ outside work, when the opportunity arises, and, do so, proactively, before minor issues, become major expenses.

3. Fall: As trees begin to lose their leaves, clear them from lawns, paths, drains, gutters, etc, so as to be prepared, for more extreme weather conditions! Towards the end of the season, drain, and turn – off, exterior water sources, in – ground sprinklers, etc. Have a pre – winter, heating system, preventive maintenance, to ensure fewer heating problems, when you most need to heat, your house.

4. Winter: Thoroughly perform snow removal, and clear away, paths, pipes, etc, to ensure fewer issues and challenges. Avoid using harmful chemicals, when melting ice, etc, and there are many safe products, on the market, today. Using certain chemicals, often cracks cement, etc. Remove hanging icicles, in order to reduce the stresses and strains on your roof, and gutters. Make certain, early in the season, to minimize wasting energy, by using a setback thermostat, and doing minor efficiencies, such as door sweeps, caulking windows, insulating behind sockets, etc.

It’s wise to have a home maintenance plan. Addressing these simple steps, generally saves a lot of hassle, and money!


Things You Should Ask When Hiring Realtor

The 5 most common questions to ask when hiring a REALTOR!

Selecting a real estate agent to assist in the largest financial transaction a person will likely ever make is a critical part of the home selling process. In a challenging economic environment where competition among real estate companies is on the rise, choosing the agent that’s right for you can be a confusing task.

Home sellers should start by interviewing several real estate agents to find someone with whom they “connect” with, However, chemistry is not the only variable to consider. The length of time an agent has been in the business, his or her home sale success rate and knowledge of the local market can also play a significant role in the decision-making process.

To jump-start, the conversation, try and ask these five essential questions home sellers should ask before selecting a REALTOR to represent them.

1. How long have you been in the real estate business and what has your success rate been in terms of home sales over the past 12 months? The length of time a real estate representative has been in the business and their home sale success rate demonstrates their knowledge and expertise in the industry. Ideally, a home seller will want to work with an agent who has a high percentage of completed transactions within your home’s price range.

2. What was the average amount of time it took to sell those listings? Comparing marketing times between the agents you are interviewing will provide you with an indication of how well that agent markets homes.

3. What was your list-price to sale-price ratio? Significant differences between original listing prices and ultimate sale prices can be an indication that the list prices quoted at the outset were unrealistic.

4. What is your online marketing plan to sell my property? In Canada, the vast majority of home buyers begin their home search on the Internet. Therefore, the one you select to help you in the sale of your home should have a strong online marketing presence as well as be visible through social media outlets in order to reach the widest possible audience. Before or after meeting with the candidate to a quick Google search for the agent’s name, company name and see what you find. PRO TIP: If you don’t find a lot of information, how do you expect buyers to find and locate your home when it is actively on the market?

5. Do you have references you can share from past clients? References allow you to gain additional insight into the day-to-day workings of the real estate agent. Gathering reputable references will help ensure that you select the best real estate representative for your needs.

PRO TIP: Selecting an agent with a strong online presence is strongly recommended, and checking online reputation and reviews of that agent is crucial. Do a quick Google Search for Online Reviews “agents name”, Do they have a Google Local listing, Facebook Business Page Reviews etc.


Tips To Hire Property Manager

Opting for property management for your house is a definitely good idea but remember it can be one of the most terrible things if you’re lacking the necessary information.

That being said, it is important for all to have the necessary information about management and the work of the property managers. This is an important part because it helps the property owners in deciding whether or not the manager they’re hiring is well suited to meet all their requirements.

Here is some information for you –

Property Management –

The process of operation, control, and oversight of real estate in the broadest terms are called property management. Management here indicates a need to be cared of, monitored, and answerability is given the property’s life and conditions. Including this, management of property also involves the management of personal property, equipment, tooling and other assets that are used in building, repairing, and maintain the end items deliverables.

Roles of the Property Management Agent –

  1. Setting The Property Purchase / Rental Amount – The first and foremost role that every manager or estate agency has to play is planning the cost of the property or the rental amount. This process would involve the property owner but should be done wisely after considering the important points like the condition of the property and the location where the property is located.
  2. Finding the Right Tenant / Buyer – The property managers will always be accessible to a wide number of property owners as well as property seekers which is why they are the best people to choose the buyers or tenants. Sorting out and picking the best is possible and it will always be a win-win situation for the property owners as well as the seekers.
  3. Screening Buyers / Tenants – For property owners selecting the best buyer or tenant isn’t always possible but when it comes to the property managers they can choose the one that is best. This is usually because the agents only choose the property seekers after carefully looking into their profile and getting a check of their background information.
  4. Collecting the Rent – When associated with rental property dealers the property owners can entrust them with the duty of collecting rent well at the time. This saves the landlord from wasting whatever time is wasted in chasing the tenants for rent.
  5. Handling Complaints & Emergencies – Whatever be the complaints of the tenants or buyers should be handled by the agent well within the stipulated time Further, if there are a few emergencies that need attention they again fall under the duty book of the estate agents and should be met with almost immediately or depending on the type of situation that has come up.
  6. Handling Moveouts – When a tenant vacates the premises, the manager is responsible for inspecting the unit. Their job is to check for damages and determine what portion of the security deposit will be returned to the tenant. After the tenants move out is completed, they are also responsible for cleaning up the unit and repairing any damages that may be filed to locate a new tenant and fill the vacancy.
  7. Dealing with Evictions – In case the tenant hasn’t been paying rent or has been causing disturbance you might have to get the house evicted by him. In that case, the property owner holds the complete responsibility of getting the property evicted at the earliest possible. Before the eviction, the manager needs to ensure all dues are settled and nothing is payable from both the sides.
  8. Maintenance & Repairs – Whatever is included in the maintenance work is the responsibility of the property manager and should be handled accordingly. Whether maintenance and repairs including hiring someone to take care of the leaks, performing landscapes, remove snow, eliminate thrash – it is all the work of the manager. He needs to ensure the right people are hired and in case someone is taking a day off from work there is always a replacement that is available.
  9. Maintaining Records – Maintenance of all property related documents is just another thing added to the list of the duties that the dealer is required to perform. The agents must ensure proper files are maintained for each tenant or buyer and the files include the necessary information. It should also include any dues that need to be cleared from both the parties.
  10. Responsibility for Taxes – The property manager can assist the property owner with comprehending the most beneficial way to file their taxes about the investment property. The concerned person may also be endowed with the power to file the charges regarding the property on behalf of the owner.

Even though property management might look like an easy management process remember it has a lot involved in it and everything needs to be managed in the best possible ways. Further, the varied roles assigned to the property manager depend on whether he is working on a rental property or the one that is being sold.

Secrets That Realtor Never Tell You

Buying or selling your house or any other kind of property is a big decision. All due to this, people never wish to do it alone, but in the association with an expert who has mighty experience in the process.

Real estate agents or realtors are such a people, group of people or even an organization performing this task on your behalf. They are the dedicated professionals, registered or unregistered, offering you all the assistance you need, whether to buy or sell a property.

And this is why it is necessary to consult a good, reputed and experienced real estate agent or firm only.

However, even when you consult the best one, there are a few things that the real estate agents do not tell their clients. Here is a list of these:

  1. First of all, you may not always need to hire a real estate agent to sell your house, especially if it is located at some plush location or is at a place that is yearned by many.
  2. Most of the real estate agents work on commissions. They may tell you that their commissions are fixed, but in reality, the commissions are always negotiable.
  3. And if you choose not to hire a real estate agent and sell your house yourself, you can even avoid those commissions.
  4. If you are about to sell your house, you would consider vacating it to offer a better view to your buyers. However, a furnished and tidy house is said to sell better than a vacated one, since the buyers can get an actual view of how they would keep their products.
  5. Buyers do have a view of your kitchen, but kitchens are not what people put on their priority list before buying a house.
  6. Agents may say that they do not have an idea about the neighborhood, but in reality, they actually know the kind of neighborhood you are moving in with.
  7. Do not doubt individual workers or small real estate firms, even if the big ones tell you tales about their inexperience or inefficiency. You may never know the real tales behind.
  8. Before you buy a house, you can even hire a home inspector and get the house inspected to know the hidden flaws etc. in the house. You can also get to know its real worth.
  9. Even your home inspectors may not tell you everything about the house.
  10. Most of the real estate agents do not wait for long to get you the best bid for your house. Instead, they would wish to get a fair deal and get it done within, say, a month’s time. It may get them a low commission but it needs less marketing and they can concentrate on other deals.
  11. A home you are buying should essentially be in a move-in condition. If it needs a few safety fixtures or a big investment, you are better off looking for something else.
  12. Even if you hired a good real estate agent, you need to keep a check on their activities and you can always fire them if you think that they are not acting on what they actually promised.
  13. There could always, always be a better deal. But then, there’s no guarantee.
  14. Agents may get commissions from both the buyers and the sellers. So never always consider them on your side.
  15. Holding an open house may actually find you a better client.

So while you buy or sell a property with the help of a real estate agent, do keep these elements in mind.

A bit of your vigilance may not always save your expenses but also prevent you from any sort of future regrets.


Real Estate On Canada

In recent years, the Canadian government took action to cool the overheating real estate market by lowering the maximum amortization timeframe from 40 to 25 years for Canadian Mortgage and Housing Corporation (CMHC) insured homes. According to financial and real estate experts, this reduction was out of concern for Canadians burdened with too much debt and a housing bubble.

This reduction in the amortization period has not really cooled the housing market (in particular cities such as Toronto and Vancouver). In fact, it is still hot, hot, hot! With the Bank of Canada maintaining a one-percent interest rate, it is still fueling the desire for home ownership for first-time buyers and allowing others to trade-up on their existing home.

Traditionally in Canada, most mortgage terms with banks are five-year closed. Remember, that the first two or three years, a homeowner is mostly paying the interest on the mortgage. Now, there are opportunities to have one, or two-year mortgage terms, but in most cases it is five year closed. As the five-year term gets close to renewal, banks give the homeowner the opportunity to ‘shop around’ for better rates. On a side note, a homeowner can ‘shop’ at anytime during the five-year term, but if the homeowner moves the mortgage to another institution, they will have to pay penalty fees to the current bank, sometimes as much as $45,000.

During the five-year term, homeowners can rest assured of how much they must set aside each month to cover their household expenses, including the mortgage. But, when it comes close to the term ending, it can become stressful, especially if interest rates rise. Most people usually budget for their home and expenses at the time of the home purchase; however, a lot can happen within the five-year timeframe; for example, unforeseen circumstances, such as a reduced income, a birth of a child, death of a partner, financial trouble, or economic changes in the world. If the budget doesn’t leave room to save for the unexpected, it causes an uncomfortable situation.

On the other side of the coin, banks at the end of the five-year term give clients the option to refinance and that opens the possibility of losing the client to another institution. This doesn’t promote brand loyalty for the bank.

In the United States, financial institutions have provided homeowners with a 30-year fixed rate mortgage. To have this type of mortgage, a homeowner sometimes pay a slightly higher rate than a shorter term mortgage and it takes more time to actually own the home.

However, the homeowner is rest assured of having one consistent monthly payment, because both the principle and the interest are evenly spread throughout the 30-year term. The banks get to keep their clients around and up-sell other services.


There are a few benefits to the 30-year fixed mortgage that could certainly help the Canadian homeowner:

Over the amortization period of the mortgage, the homeowner knows exactly what their mortgage payment is, because the interest rate is locked in for the 30 years. There’s a sense of security knowing that and the opportunity to weather any number of unforeseen circumstances.

The 30-year fixed mortgage allows the homeowner to save. The savings can go towards paying down on the principle faster or enable the homeowner to buy other investment products – another win for the financial institution.

– Homeowners are buffered from fluctuating interest rates, caused by an unpredictable or volatile marketplace. However, if the rate is lowered from their existing rate, they have the option to refinance the loan – no different from in the U.S.

It is not clear why Canada doesn’t offer a 25 or 30-year fixed term mortgage like the US. Some speculate that it’s not profitable enough for the Canadian banks. There may be other reasons required by the government. However, the advantages of the 30-year fixed term would certainly provide a peace-of-mind experience for the homeowner, provide a stable real estate economy and make banks look more favorably in the eyes of their clients. It would be beneficial for Canadian homeowners to ask their banks for 25 or 30-year full amortized mortgages. It may not be easy to get it, but if more people ask, institutions will have to eventually make changes.

It is only fair to discuss the partial amortized (five-year term) mortgage, because it has advantages too.

It’s a great way to buy a home for lower initial payments than a fully amortized loan, which allows the homeowner’s net income to be higher.

Often, partial amortization loans require regular payments on the interest and principal, with the remaining balance to be paid at the end of the term, or refinance into another five-year term.

As always there are disadvantages and a homeowner must realistically consider their own personal circumstances. A partially amortized loan is a risk for both the homeowner and financial institution:

If interest rates move substantially higher for a partially amortized loan the home owner monthly cost will increase. In the event that circumstances change and a homeowner cannot make the monthly payment on the mortgage as planned, there’s a risk of defaulting on the loan.

There is also another solution that provides Canadian homeowners with an alternative to the traditional mortgage. It is known as 100{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} HELOC or Home Equity Line of Credit. The benefits of this alternative are:

The interest rate is usually prime (variable bank rate) plus or minus.5 percent

It is an interest-only loan and there are no penalty fees to pay off the loan at any time.

Because it is an interest-only loan, during tough economic times, a borrower will be required to only pay the interest on the loan.

As the equity increases in the home, credit on the loan also increases, giving the home owner access to the equity at little or no cost.

It doesn’t take much to negotiate a lower interest rate, just call your bank and ask.

There’s no need to have a saving account with 0{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} interest paid to you monthly, just deposit all your extra funds on the line of credit and enjoy the real savings on the mortgage rate.

Withdraw funds at anytime to purchase your second home or investment property, without your bank’s approval.

While the pros to this alternative outweigh the con, it is very important to know what the con is to avoid disaster:

– 100{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} HELOC is very flexible – maybe too flexible. Homeowners can get into financial trouble by borrowing more than they need to. Make sure to have sufficient equity in the home already and follow a discipline budget when spending.

Guide For First Time Homebuyers

Being a first-time homebuyer can be challenging to say the least, but realtors help demystify the process and help make sure you get the house that best fits your needs.

Determine Your Long-Term Goals

The first thing that most realtors would recommend you do is to determine your long-term goals and how owning a home will fit into those plans. You may be tired of spending your earnings on rent and would rather put your money toward something that could actually turn a profit down the road. Or, you may simply want to be your own landlord for a change. Whatever your goals may be, get a clear idea of them before you start shopping around.

Finding the Home You Want

Once you have committed yourself to becoming a homeowner, you can expect the process to be a bit chaotic. More than likely, you’ll make a lot of offers and get a great many counter-offers in return. But don’t be intimidated or allow yourself to get frustrated. A professional can walk you through each and every step so that you’re not overwhelmed.


You will more than likely have a wide range of financing options, even if you don’t have the best credit. You may be able to find a loan backed by the federal government or get financing that doesn’t require the standard 20 percent down payment. In addition, the state you live in may provide special incentives for first-time buyers. Realtors can provide you with easy-to-understand information on all your options so you can feel confident while shopping around.

Making the Offer

Once you have honed in on the house that meets your needs, your real estate agent can help you decide how much you should offer, as well as any conditions you should request before signing on the bottom line. For example, you could ask the seller to pay your closing costs. Your agent will then take your offer to the seller’s agent, who will then either accept your terms or reject them and make a counter-offer. This back-and-forth will continue until you reach a deal or decide to move on to another option.

When you reach an agreement with a seller, you may be asked to put down a good-faith deposit. The transaction will then move into escrow, which is a period of time (about 30 days, typically) that the seller takes the house off the market. He or she will do so with the expectation that you will buy the home – provided that an inspection does not uncover any serious problems.

Realtors can help you find homes in the neighborhoods you prefer at prices that fit your budget. Once you’ve made your decision, they can help you through the entire purchasing process, from making an offer to getting a loan and wading through the seemingly never-ending paperwork. Realtors can provide invaluable assistance through a trying time.

Understanding Tiny Home Movement

The high cost of real estate has left many in search of alternatives to conventional homes that come at a more affordable price. The tiny home movement continues to grow in popularity, especially for those who are seeking to enjoy all the benefits of owning a house without the high costs and expenses usually associated with such an asset. Homes that have been specifically designed to be as small as possible without sacrificing comfort or utility have much to offer. These homes are designed to be highly mobile and offer the perfect solution for professionals whose career does not tie them to one specific location.

Unlike campers, trailers and conventional mobile homes that are often designed for either short term use or that offer limited quality and comfort, tine homes are designed for maximum efficiency. Houses that are rarely larger than a few hundred square feet can provide many of the environments and amenities that property owners would expect to find in a much larger structure. Eliminating any space that is not being utilized and making every effort to create the most efficient environment possible offers a way to pack a great deal of value into a very small package. Small homes are often designed to be as mobile as possible in order to better suit the needs of owners who lead a more nomadic lifestyle.

Owning a conventional home is often a more expensive undertaking than many first time property owners may realize. Landscaping, foundations and the utility costs associated with a larger interior environment can quickly become very expensive. Smaller structures and those that require less resources and effort to maintain can make the dream of owning a house far more attainable. Spending more to maintain areas and environments that property owners may be able to do without can make maintaining a property far more expensive. Houses that have been created to be as efficient as possible can often be owned and maintained for a price that few existing property owners may have believed possible.

Internet technologies and mobile devices have given rise to a workforce that is more mobile than ever before. Professionals who are not tethered to a single location are increasingly interested in any opportunities that may allow them to more easily travel. Homes that can be easily transported from one location to the next provide the perfect solution for professionals who are seeking to see more of the world. The ability to enjoy all the comforts of home when on the road or to more easily move to different regions and enjoy a wider range of short term living opportunities and arrangements.

While the first small homes were designed and build by their owners, the growing popularity of these structures means that those who are interested in owning one have far more options at their disposal. Professionally designed and built homes make ownership much easier, especially for those who lack the means or inclination to do the construction themselves. Working with a professional designer can provide plenty of benefits.

Online communities and forums offer owners and those interested in the advantages that smaller homes are able to offer the chance to discuss their situations. Learning all you can about any homes that may fit your budget and lifestyle may be easier than you would have expected. Making smarter and more informed decisions will allow you to avoid many of the common issues and pitfalls that first time owners may be likely to experience. Conducting a little research will ensure that you are able to make the best decisions possible and will help to ensure that you do not overlook any opportunities that may provide you with greater satisfaction or value.

The issues and expenses associated with owning conventional homes can pose a real obstacle for many owners. Smaller structures and homes that are designed to provide superior quality and comfort offer a more affordable way to make your dream a reality. Investing in the right opportunity or working with a designer or construction professional who will allow you to more easily meet your needs may allow you to more easily fulfill your dreams.

From mobile professionals to those who lack the resources and finances needed to invest in conventional homes, there are plenty of people who can benefit from a smaller and more affordable alternative. Homes created to provide the most comfort in the smallest amount of space have a great deal to offer, and may allow you to enjoy the lifestyle you have always wanted. Structures and homes that offer a more affordable and mobile lifestyle may provide the solution you have been seeking.

Tips To Securing Your Capital Estate Investment

I previously shared the steps for creating a professional plan for a real estate project; the importance of obtaining third-party validation; advice in how to find the right financing sources; and suggestions on presenting the project professionally, then closing the deal. This approach will enable you to obtain financing term sheets, letters of intent and/or financing commitment letters from lenders if your project is financially feasible and falls within the lending parameters of the financing institutions that you approach. Nevertheless, financing always requires a cash contribution, as 100{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} financing is not realistic in today’s market.

Lender requirements for cash equity contributions, deposits or down payments, typically fall between 15{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} and 40{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} of the total project cost (85{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} to 60{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} Loan-To-Value ratio). A portion or all of the equity value in the property can sometimes help reduce the cash deposit requirement, but it is very unlikely for a conventional lender to completely eliminate the cash contribution requirement because lenders want to ensure that the principal(s) are vested in the project, or have “skin in the game”. The cash deposit is necessary to close the loan and obtain financing.

So, where does the cash deposit come from? There are several potential sources:

  1. Your pocket
  2. Your partner’s pocket (if you have one)
  3. Equity from another property you may own (if any)
  4. Private investors

There are many advantages to infusing the cash equity requirement yourself, including the fact that you retain all profit and full control of the project at all times. This can often be the most advantageous funding structure because it maximizes your profit and control. However, there are also advantages to securing equity participation from investors, including:

· Less cash out of pocket enables you to be more liquid, retain more cash reserves and/or diversify your investments to earn profits from other projects or endeavors simultaneously

· Reduces your risk and exposure in the project

· Enhances your financing capabilities

There are 3 basic steps for securing equity capital for your real estate project:

  1. Prepare an investment proposition
  2. Source like-minded investors and private investment organizations
  3. Investment negotiations and agreement

1) Investment Proposition

There are many ways to formulate an investment proposition. I’ve seen an investment proposal written on the back of a napkin… and the deal was funded! (This was a developer seeking an investment from his grandmother). I’ve seen verbal agreements get funded by family members. I’ve also seen very intricate, elaborate and lengthy investment proposals not get funded. How you document your investment proposal is extremely important. The first two examples were appropriately prepared for their intended audiences; the third was not. If your project is financially feasible and can demonstrate reasonable gain for investors, securing investment capital becomes a function of proper documentation, sourcing, presentation and negotiation.

Regardless of whether an investment proposal is intended for a family member or a sophisticated investment organization, proper documentation always enhances your ability to secure funding. Your proposal should be professional, clear and concise. Following are some basic suggestions for documenting your investment proposal:

1. Provide a brief executive summary describing the project and the investment proposition. Within the executive summary, outline the investment amount required, return on investment, time-frame of the investment, and discuss the security, collateral and/or equity value that can help protect the investor.

2. Provide a financial summary of the uses of funds, sources of funds, operating projections and cash flow of the project.

3. Discuss the funding structure and capitalization plan.

4. Attach term sheets, letters of intent, financing proposals, and/or commitment letters from prospective lenders.

5. Attach the project plan.

Source Like-Minded Investors and Investment Organizations

Where do you find investors that would be interested in participating in your project? If your project is financially feasible and you’ve prepared a professional plan and a concise investment proposition, then you’re only steps away from finding your equity investor(s). It takes time and determination, but it can be a worthwhile effort that can last beyond a single project. Here are some suggestions for obtaining sources:

  • Contact local and regional mortgage brokers, real estate brokers, title companies, real estate attorneys, and other real estate professionals. Offer a finder’s fee.
  • Place ads online and in local and regional newspapers.
  • Prepare a project web page where prospective investors can find the project and review/download pertinent documents, including your investment proposition.
  • Hire a consultant or financing broker that specializes in securing equity participation.
  • Review your own contacts and business cards – You’d be surprised at how fruitful this effort may be.
  • Attend networking events and or conferences for private investors in your area and/or region, then collect business cards and make follow up calls and meetings.

Dedicate time to making calls, setting up appointments and engaging in meetings to present your project to prospective investors. Become an expert at presenting your project. Prepare a multimedia presentation to help them focus on the points you want to stress. Don’t stop until you get it done. If your project is feasible and profitable, it can get funded with proper determination and effort.

Investment Negotiations and Agreement

How much should you offer an investor? Depending on the nature of a project, perceived risk, profitability, location, your experience, competition, demand, supply and numerous other factors, I’ve seen investors require from 5{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} to 95{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} of the project and/or profit. Most investors want to see that you have “skin in the game”, generally 10{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} to 50{78873ccfce349f8de2455d9c74c13a14561029f75caa79bf4cd727f8af61e134} of the amount you ask them to invest in the project. Demonstrating that you have invested in the project or that you will invest into the project is adds value to the deal. You should document this clearly and provide evidence of the time and money you have invested in your project.

Other items that are open to negotiation include the percentage of control in the project, roles of the parties, reporting procedures for the investors, etc. You should provide benefit and value to the investors, but at the same time you don’t want to lose all control or receive minimal gain for your efforts. Finding the right balance is extremely importance. This is accomplished through open dialogue and effective communication between the parties.

There is no global formula for this, so it’s impossible for me to provide accurate advice on what to propose investors for your specific project. I would strongly recommend getting advice from a savvy attorney who can assist in preparing the investment agreement and structuring the investment terms. Meet with your attorney first so that you have an original structure for the deal; then use your attorney when negotiating any modifications with prospective investors.

If you have a history or recently completed real estate projects, document this clearly and share with potential investors during your presentations and meetings. If you don’t have a track record of successfully completed real estate projects, raising your first equity investment can be more challenging, but if you follow the above suggestions and you are determined, the sky is the limit!

Characteristic That Realtor Should Have

When one makes the very significant difference, to attempt to sell his home, a very important, first – step, should be, to interview several potential agents, and hire the one, he believes, will best serve his personal needs, goals, and priorities. While it is obvious, perhaps, for most people, the objectives of a homeowner, are usually, getting the best, possible price, in the least amount of time, with the least degree of hassle/ stress. In order to have a better chance, to achieve one’s objectives, it’s important to realize, these 6 things, a real agent, should provide, to his clients.

1. Responsive: Seek, and hire, someone, who emphasizes and prioritizes, being responsive, in all aspects of his representation. How quickly does the agent, respond to, and reply, to telephone calls (return missed calls)? Play – act, with your prospective agent, to see, how they actually, set appointments, and ask, when the agent arrives (how far in advance). Will you representative, create the inspiring methods and techniques, to garner as many qualified showings, as possible? How quickly will he answer your questions and/ or concerns, and how thoroughly? Will he provide regularly, scheduled, updates, etc?

2. Fiduciary/ serve you: How will each individual, you interview, explain how he will, protect your fiduciary needs, goals, and priorities, as well as respect your privacy? Opt for someone, whose focus, is, consistently, on serving you, and your needs, because you are their client. Hire the right person, for you, and your needs!

3. Marketing system: How will your agent, create, introduce, and implement, the best, customized, marketing system, for your particular house, and your specific needs, and prioritizes? Have each individual, you consider, explain his system, and reasons, and be certain, the system, is customized, and not, merely, the same – old, same – old!

4. Explain fully, and discuss: The individual, you hire, should be ready, willing, able, and eager to fully explain all relevant issues, and discuss them thoroughly, not to his satisfaction, but to yours! No question or concern, should ever be considered minor, if it stresses, you!

5. Bring meeting – of – the – minds: You’ve got to know when to hold them, know when to fold them, are the lyrics of a famous song. Quality representation means focusing on quality negotiating, and the ability to recognize, when one must push, the prospective buyer, to try to raise, the price, and when, it’s time to accept a reasonable offer. No one benefits from greed, or lack of insight!

6. Closing ability; enhance result of transaction: The difference between selling and simply, being, in sales, is the ability to close the deal, effectively, and comprehensively! Every effort must be focused on enhancing the overall results, and entire period of the real estate transaction!

These are not the only 6 things to look for, but are, obviously, important ones. Since for most people, their house represents their single – biggest asset, doesn’t it make sense, to hire the right real estate agent, for you, and your needs and situation?