Option Investors Should Focus on Finding New Owners for Obsolescent Properties

When people ask me what I do for a living, I tell them that I am a professional property locator who specializes in using real estate options to control undervalued properties with immediate resale profit potential. I then go on to give a brief explanation of how I go about finding new owners for all types of vacant properties that have outlived their original use but are structurally sound and still have a lot of years left in them before they are ready for the wrecking ball. And this is...

How to Use Bird Dogs to Find Potential Option Properties That Are Not Advertised

A bird dog is someone who comes into frequent contact with problem property owners within a specific neighborhood or area and is in a position to learn about non-advertised potential option properties that are for sale there. These types of hidden properties are never formally advertised as being for sale their availability is made known only by word-of-mouth. A neighbor, a relative, or an acquaintance may be the only one who knows of a property owner's willingness or need to sell. Once you...

You Must Base Your Denial to Rent on Legitimate Business Reasons

After you have used credit and criminal background reports and other sources to check, verify, and evaluate a tenant applicant's personal and business information, you must decide to accept or deny the applicant based solely on whether he or she is a good business risk and not on personal prejudices. The following are four examples of legitimate business reasons to deny rent to tenant applicants 1. Credit history People who do not pay their bills are a bad business risk. 2. Criminal history...

The HUD Rule Prohibiting Predatory Property Flipping with FHA Loans

Department of Housing and Urban Renewal (HUD) defines predatory property flipping as the practice whereby a property recently acquired is resold for a considerable profit with an artificially inflated value, often abetted by a lender's collusion with the appraiser. And on June 2, 2003, HUD imposed a rule that places time restrictions on the resale of properties financed by Federal Housing Authority (FHA) loans. This was done in an effort to try to curb predatory lenders and dishonest...

How to Use Classified Property Wanted Ads to Find Potential Option Properties

Over the years, I have had pretty good success using classified property wanted ads to find non-advertised problem properties to buy real estate options on. Most people call me because they do not have the time, desire, or money to market their properties themselves. Or, they do not want to go through the hassle of listing their property with a real estate broker. Sure, I have received my fair share of calls from flakes, loonies, and other assorted crazies. But I have been willing to put up...

Where to Find the Names of All the Property Owners in Your County

The name of virtually every property owner in your county is available at your county property appraiser or assessor's office on what's known as the property tax roll. The property tax roll lists every parcel of land in a given county. Depending on where you live, each parcel is assigned a separate tax identification number, either an assessor's parcel number (APN) or an appraiser's folio number. To find out if your county's property tax roll is available online, simply type the name of your...

The Five Main Reasons Many Rental Properties Become Mismanaged

From my experiences buying mismanaged rental properties, I have found that incompetent ownership is the number one reason that rental properties end up being mismanaged. This incompetence has a snowball effect and is the direct result of the owner's 1. Lack of knowledge about the local rental market, which results in rental units being rented at below-market rental rates This produces a breakeven cash flow, which is barely enough to pay for maintenance and debt service when the property is at...

How to Recruit Bird Dogs into Your Network of Paid Informants

The best way to find bird dogs to join your network of paid informants is to tell everyone that you come into frequent contact with that you are looking to buy real estate and that you are willing to pay a finder's fee when you buy an option on a property that they told you about. Here is a listing of the types of people you want to recruit into your network as bird dogs

Online Sources of Comparable Commercial Property Sale and Income Data

Comparable sale and income data for all types of commercial properties are readily available online for free or for a relatively small fee at the following web sites CoStar Exchange www.costar.com Loopnet www.loopnet.com National Real Estate Index www.realestateindex.com IDM Corporation www.idmdata-now.com DataQuick www.dataquick.com Apartment Comparable Sales www.apartmentcomps.com Real Estate Information Source www.reis.com

How Income from the Sale of Real Estate Options is Treated for Tax Purposes

Income earned from the sale of real estate options is taxed at the same rate as ordinary earned income. And for tax purposes, the IRS will consider you to be a real estate dealer versus an investor because you are buying options with the intent to resell and not as an investment. Real estate options are covered in Section 1234 of the Internal Revenue Code, which is provided for your convenience Internal Revenue Code, Section 1234, Options to Buy or Sell 1234(a)(1) GENERAL RULE. Gain or loss...

Package Properties to Fully Highlight Their Best Features and Future Potential

You do not need to be a rocket scientist to be able to quickly figure out that how much you are able to sell your real estate options for is tied directly to how well you are able to package the properties you own options on. Packaging a property means to present the property to prospective buyers in a way that fully highlights its best features and future potential uses. As part of my marketing plan, I compile a comprehensive property information sheet, which lists the following features about...

Why You Should Record a Memorandum of Real Estate Option Agreement

Finally, I highly recommend that you include a clause in your real estate option agreement that allows you to record a memorandum of real estate option FORM 17.1 Sample Joint Escrow Instructions On this ninth day of July 2005, Robert D. Jones as Optionor Seller and Donald S. Reed as Optionee Buyer agree to have Mr. John B. Good, attorney at law, whose law office is located at 6907 Charleston Court, Tampa, Florida 33607, hold the following documents in escrow for the period from July 9, 2005 to...

How to Locate All of the Outof Town Property Owners in Your County

Most out-of-town or absentee property owners become that way because they either inherited a property or, for whatever reason, were forced to relocate and failed to sell their property before they left town. Or, the property is owned by a business entity such as a corporation or limited liability company located outside the county. How do you know if a property belongs to an out-of-town or absentee owner Simply check the property owner's post office mailing address listed for the parcel on your...

Best to Hire an Experienced Title Abstractor to Perform Your Title Searches

Many option investors have gotten into serious trouble because they tried to save time and money by doing only a cursory title search without having their findings verified by an experienced title researcher or abstractor. You must understand that an uncovered, but recorded, mechanic's lien, federal tax lien, or third mortgage or deed of trust loan can come back to haunt you at a later date, usually when you are in the process of trying to sell the option on the property. Researching property...