A home or piece of property becomes a bank owned property when the owner is unable to make the required monthly payments on their loan. Once the loan is deemed delinquent a notice is sent to the owners to try and resolve the payment situation. If an amicable agreement can not be reached the property then falls into the category of a bank foreclosure.

Banks are not in the business of owning properties. However, due to a number of foreclosure cases, these properties fell on the hand’s of the bank hen the owner fails to pay their obligations.

When a property is sold through REO, the lender can sell the property for a price they want.

A buyer can purchase an REO property below the current market value. However, a good offer must be presented to the lender to get the deal.

For people who are on investing in real estate, it would be a good idea to invest in foreclosed properties. There are a lot of potentials in foreclosed properties. First, most of these properties are still in good condition. Except for the peeling paints and the unkempt gardens, one can easily restore a distressed property. In most cases, after cleaning up and doing minor repairs, the property would increase in value and one can sell it for a profit.

Buyers are often searching for good deals on home investment. And they can find good deals on REO’s. REO’s can be purchased below the market value if the buyer know how to negotiate and present a good offer the bank can’t refused.

REO’s can be acquired below the market value. However, there are other costs that the buyer would want to take a closer look like the cost for repairs needed for the proeprty. It’s advisable to inspect the property before giving your final bid.

By understanding the whole concept of REO, one can really find this as a great income opportunity.

After foreclosure auction and no bids were accepted, the property becomes that of the bank and referred to as Real Estate Owned or Bank REO.

Now may be a great time to buy bank owned properties. These are real estate properties that the banks have foreclosed on and are losing money on. A property that a bank holds is referred to as a bank R.E.O.

These REO’s would want to be sold by banks or mortgage company as quickly as they can in order to avoid additional expenses in holding the properties.

Banks are not in the business of selling properties. But due to the increasing number of foreclosure, banks want to be able to quickly sell the properties.

Banks are willing to give the property below the current market value just to help them from incurring additional expenses in keeping these properties.

One advantage of buying property after foreclosure is dealing with the bank directly and making sure that the property has a clean title. The bank shoulders all the liens and provide a clean title for interested buyer.

While others save on REo, one need to be sure that what she’s offering is worth her time and money. You need to have the property check and assess the repairs needed. This will help you in preparing your final offer to the bank and have your assessment to back up your offer.

It’s advisable for buyers of REO to inspect the property. This way, you can personally see the condition of the property and make an assessment as to how much you need to repair the property.

By Jafer Ali Shariff

Recent years have seen a surge in people investing in real estate. They seem to have finally realized that real estate is possibly the only investment which offers a tight safety-net in today’s volatile and highly unpredictable world economy. While the U.S. dollar can not seem to rise out of its nosedive and the U.S. economy seems to be a victim of a very bad case of volatility, land remains an important source of income for many people as it has remained for so many others since the beginning of time.

Up until the very recent past, the number one arrangement for real estate investment remained to be partnerships. Partnerships have been a force to be reckoned with, be it in terms of real estate or in terms of any other field such as sports, music, movies, etc. However, lately, people seem to be opting for TIC arrangements instead of partnerships for their real estate investment needs. This has proved to be a very wise decision as TICs are able to offer safety as well as the prospect of high profits by nullifying the hindrances found in partnerships.

Firstly, unlike partnerships where the investor would own a stake in the partnership which in turn would own the property, TICs allow investors to own a fractional interest in the property themselves. Secondly and more importantly, while all partners in a partnership need to be in accordance when replacing a property, TICs allow investors to easily cash-out of the investment or replace it without the need to consult other co-owners. Additionally, TICs further benefit investors by granting them the freedom to exchange their individual undivided interest at any time rather than having to wait for the disposal of the asset as is the case in partnerships. TICs also do not forcefully bind an owner to remain with any of his/her co-owners in the future.

Remember though that is not where the list of perks ends. TICs make it possible to compete with institutional capital and attain high-quality properties; so TIC owners not only attain access to better investment options, but they also have the option of diversifying their property types and geographical locations, thus reducing their risks. TICs also allow investors to benefit from professional third-party management which ensures a steady and reliable cash stream.

This third-party management plays a vital role in distinguishing TICs from other real estate investment arrangements. These third-party managers, known as Sponsors, take on all responsibilities of running the investment on a daily basis, hence freeing up time for owners. This concept thus runs opposite to partnerships where if you do give up the day-to-day responsibilities of the investment and become a general partner, you are forced to leave the daily running to one of your partners who may, or may not, be the right person for the job. TICs, on the other hand, ensure that the day-to-day running remains in the hands of professionals who know exactly what they are doing at all times. Additionally, since these Sponsors handle more than one property at any given time, they have considerable leverage with financial institutions. Therefore, they are able to attain very favorable lending terms for the investment.

TICs also allow an investor to benefit from various tax breaks. Moreover, these ingenious arrangements grant an investor the chance to diversify his overall investment portfolio of stocks, bonds, mutual funds, business investments, etc. So it is easy to conclude that TICs are here to stay. Whether you are for them or you are against them, you will not be able to deny that given the current economical situation in United States, TIC arrangements offer a safety net which remains unparallel in the market.

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The answer is yes! The Employee Retirement Income Security, ERISA, Act of 1974 passed the responsibility of retirement saving from the employer to the employee. Created in 1975, IRAs provide individuals a chance to direct where their retirement funds were invested.

The IRS code, instead of distinguishing which investments are allowed, identifies which investments are not permitted under these laws. Under both ERISA and IRS Codes, there are only two types of investments excluded: Life Insurance Contracts and Collectibles such as works of art, rugs, jewelry etc. Refer to Internal Revenue Code Section 401 (IRC 408(a) (3)).

How come I haven’t known about this?

The securities markets, when the ERISA was passed, were responsible for bringing the IRA and 401(k) to the public. Brokerage houses and banks created a misconception that buying stocks, bonds and mutual funds was all that was allowed through retirement products. This is 100% false! Brokerage houses and banks have a vested interest in having you invest in stocks, bonds and mutual funds-not real estate, businesses and other non-traditional investments. Don’t limit your ability to maximize the investment potential because of the lack of knowledge of your financial advisor. There are infact many great brokers who do understand that true diversification occurs when your funds are invested in a variety of different markets.

What are the different retirement funds I can use?

Traditional IRA Roth IRA SEP IRA Keogh 401(k) 403(b) And much more!

It needs to be noted that most employer sponsored plans like 401(k) will not let you roll your account into a new vehicle while you are still employed. Some employers, however, will allow you to roll a portion of your funds. To be certain you will need to contact your current 401(k) provider.

Are there a lot of people who have self-directed IRA accounts?

The self-directed industry is growing very strong and is expected to see around $2 trillion enter the market in the next two years. In the U.S. there are over 45 million IRA holders and less than 4% of those are held in non-traditional assets. This number is expected to grow significantly over the next 5 years as more individuals and their financial advisors attain a greater awareness of self-directed IRAs.

What are the limits to the investments I can make?

You cannot invest in Collectibles or Life Insurance Contracts. There are also certain transactions in which you cannot participate when using IRA funds. These transactions are referred to as “prohibited transactions”. Prohibited Transactions are defined in IRC 4975(c)(1) and IRS Publication 590. These transactions were established to maintain that everything the IRA engages in is for the exclusive benefit of the retirement plan. Sometimes professionals refer to these as “self-dealing” transactions. Self-dealing happens when an IRA owner uses their individual retirement funds for their personal benefit instead of benefiting the IRA. If you violate these rules, your entire IRA could loose its tax-deferred or tax-free status. It is important that you work with a competent Retirement Account Facilitator to avoid violating these rules.

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In investment finance, private equity real estate is an asset class consisting of equity and debt investments in property. Investments typically involve an active management strategy ranging from moderate reposition or releasing of properties to development or extensive redevelopment. Investments are typically made via private equity real estate fund, a collective investment scheme, which pools capital from investors. These funds typically have ten year life span consisting of a 2-3 year investment period during which properties are acquired and a holding period during which active asset management will be carried out and the properties will be sold.

History and evolution There is a long history of institutional investment in real estate both through direct ownership of property and through pooled investment funds. Initially institutional real estate investments were in core real estate, however, market conditions in the early 1990s led to the emergence of opportunistic funds which aimed to take advantage of falling property prices to acquire assets at significant discounts.[1] Private equity real estate emerged as an independent asset class in the beginning of the 21st century and has experienced huge growth in recent years. Strategies Private equity real estate funds generally follow core-plus, value added, or opportunistic strategies when making investment’s.

Core Plus: This is a moderate risk/moderate return strategy. The fund will generally invest in core properties, however some of these properties will require some form of enhancement or value-added element. Value Added: This is a medium-to-high risk/medium-to-high return strategy. It will involve buying a property, improving it in some way, and selling it at an opportune time for a gain. Properties are considered value added when they exhibit management or operational problems, require physical improvement, and/or suffer from capital constraint’s.

Opportunistic: This is a high risk/high return strategy. The properties will require a high degree of enhancement. This strategy may also involve investments in development, raw land, and niche property sectors. Investments are tactical. Features Considerations for investing in private equity real estate funds relative to other forms of investment

Include: Substantial entry costs, with most funds requiring significant initial investment (usually upwards of $1,000,000) plus further investment for the first few years of the fund. Investments in limited partnership interests (which is the dominant legal form of private equity real estate funds) are referred to as “illiquid” investment’s which should earn a premium over traditional securities, such as stocks and bonds. Once invested, it is very difficult to gain access to your money as it is locked-up in long-term investment’s which can last for as long as twelve years. Distributions are made only as investments are converted to cash; limited partners typically have no right to demand that sales be made. If a private equity real estate firm can’t find suitable investment opportunities, it will not draw on an investor’s commitment. Given the risks associated with private equity real estate investments, an investor can lose all of its investment if the fund performs badly.

For the above mentioned reasons, private equity fund investment is for those who can afford to have their capital locked in for long periods of time and who are able to risk losing significant amounts of money. This is balanced by the potential benefits of annual returns, which are often excess of 20% for successful opportunistic funds. Investors in private equity real estate funds tend, therefore, to be institutional investors or high net worth individuals.

Size of Industry The popularity of private equity real estate funds has grown since 2000 as an increasing number of investors commit more capital to the asset class. In 2000 private equity real estate funds raised $12 billion in equity commitments from investors. By 2005 this had increased to $58 billion and in 2007 private equity real estate funds raised a total of $79 billion. Private Equity Real Estate is a global asset class and in 2007, 46% of capital raised was focused on the US, 26% was focused on Europe and 27% was targeting Asia and the rest of the world. By providing online real time services one on one client attention is always in mind. There is a requirement for needed experience to switch to self-directed retirement plans, IRA-401K-Real-Estate can help investors chart a new – and potentially more profitable – course for their retirement years.

IRA-401K-Real-Estate finds sound investments for self-directed Individual Retirement Arrangements (IRAs), KEOGHs, and SEPs fund in real estate trust deeds note support unities in limited partnerships IRA-401K-Real-Estate is one of very few companies to offer expertise in investment real estate for self-directed retirement accounts.IRA-401K-Real-Estate is on top of changes in the fields of IRAs and investing – the principals were among the first to tackle the Roth IRA and the effects it had and is having on IRA -401k investing. Finding Investments for You IRA-401K-Real-Estate, Inc.’s primary service is finding and analyzing real estate-related investments for purchase by our clients.

We are investment real estate brokers and have been in business doing this since 2002. In 2002 we started working with IRA clients to assist them in finding appropriate investments in the real estate arena. We find these assets by our network of investment real estate brokers throughout the U.S. (a network built through the Real Estate Cyber Space Society). We meet with these investment brokers online daily. These networking arrangements are with 11,000 brokers, take place in Cyber Space in real time. By being an active member of the Real Estate Cyber Space Society we can satisfy our clients’ investment needs no matter how diverse.

Our clients give us direction on what it is they would like to purchase; when we find it we do a complete analysis of the investment and forward our due diligence to the respective clients. They can review the information, take it to any other advisors they have and make a decision. If they wish to purchase the product we go forward with the acquisition. If not, we find another for their review. On occasion our clients have requested that they pay our fee on real estate acquisitions and we then work as a buyer’s broker. As a free service to our IRA clients who use our investment services, we assist them in finding the correct custodian to service their account. not all custodians are the same and it is vitally important to choose the right one the first time. In Today’s world, to make things happen now, we need to be in Real Time Mode for our Clients

Manzanillo is one of Mexico’s best kept secrets. Every year the property values and tourism rates are going up in Manzanillo. Much confusion exists when it comes to buying land in Mexico. Especially when it comes to owning owning property in the “restricted zones” like close to the beach, and near the borders, Manzanillo included.

As experienced real estate owners in Mexico, let us clear up a few misunderstandings about owning International Real Estate. Having been down this road before, we will make this process as seamless and pleasant as possible. As experienced land owners in Mexico, the following is a partial explanation of how to buy property in the coastal zones.

Many people are still under the impression that the ownership of property in Mexico is not available to foreigners. Some people will swear up and down that you cannot own property in Mexico. What usually happens is that what the masses believe is totally untrue.

Reality is often different than the perception:

Once upon a time the government did not allow foreigners to buy land in restricted zones (within 50 km. of the ocean, border etc.) because they were worried about being taken over by foreigners. This system was included in the constitution and as a result can’t be changed. During these times, if you wanted to own real estate in Mexico, it was a risky venture at best.

The solution to this is a Fideicomiso, or land trust. The government has instituted this provision to allow foreigners to own real estate in the restricted areas of Mexic, such as the Manzanillo beachfront. Not unlike a trust created in Canada or the USA where assets are lodged in the trust and held for the exclusive use of the beneficiary, your Mexican trust holds the property deed for the sole benefit of you, the beneficiary. Your property is then yours, and you can build as you desire. You can occupy, rent, sell, develop, lease, etc. at your discretion. Making a trust eliminates the need to have a Mexican Will as you can lay out your beneficiaries in case of your death.

There are a couple disadvantages to getting land this way including a slightly higher price for the land trust and the yearly fee that you have to pay to the bank holding your documents. I look at this fee (tax on us) that Mexican’s do not have to pay, as a part of the price we pay to enjoy all that Manzanillo has to offer.

Even in a restricted area, owning land is a cinch and you are not required to be a Mexican national to do it. The regulations pertaining to ownership land are different than ours, however the results are the same. Though difficult, this system is complete and comprehensive. The fideicomiso system provides protection for all parties involved, both in the buying and selling. Your notary should abide by the proper procedures when notarizing your documents.

This should clear up most questions about the topic. There is lots of information on trusts in different publications and on the internet, most of which is factual. Getting a Fideicomiso is smooth sailing, all that is really required is some official stamps and notarized documents. With the right people helping you, it should be pain free and quick.

When you are in the market for a new home or are placing your home on the market for sale, a real estate agent can be a valuable resource to help you sort through the maze of negotiations and processes of buying or selling a home. A real estate agent is a licensed professional who is especially trained and is usually an expert on the market in which they cover.

Finding the right real estate agent for you depends on what you are trying to achieve. Many agents are exclusively seller’s agents, and they solely represent the seller of a home and guard their interests. Others are buyer’s agents who represent the buyer on the market and handle all the negotiations from the buyer’s perspective. Depending on what you are trying to achieve, this is an important distinction.

If you are selling a home, a real estate agent will make sure your home is listed prominently and handle all the marketing aspects to selling your home. They will find qualified buyers and handle all the negotiations and try their utmost to get the best price for you. When selecting a real estate agent to represent you, it’s a good idea to see what their track record is for selling homes in your area. You can do this by doing a little research and asking around about a particular agent. You may also want to interview several agents and ask them questions about their knowledge of the market and how they plan to market your home. It’s important to get a good feel for how the agent will work for you to aggressively sell your home, especially in a tight and competitive market that there is right now.

Finding the right real estate agent should not be something to leave to chance. If you know what you are looking for and have a good idea of the price range that you can afford, it is best to shop around and look for a real estate agent that will represent you as a buyer. If you are looking around in the community that you live in, you may want to ask friends or business associates for a referral.

A real estate agent is a valuable resource no matter whether you are buying or selling. They are tapped into the marketplace and know about property values, community resources, schools and taxes which are all important considerations when you are purchasing a home. They can also be of great value when marketing your home by presenting its features and benefits as well as expounding on the benefits of the community and answering buyer’s inquiries.

You can’t underestimate the importance of finding a good real estate agent to represent your interests in today’s competitive marketplace. With it being a buyer’s market these days, sellers need an real estate agent that will help get their home sold fast and at a price that is amenable to them. Buyers also need to find an agent that will direct them to properties that they can afford and meet their specifications.

Before you decide to go out searching for condominiums Chicago has on the market, make sure that you find a Chicago realty provider to guide you in your search. There are so many properties currently listed on the market that navigating through the endless listings can be time consuming and stressful. Real estate professionals can help make the search for a condo easier and they can give you their professional advice in pointing out good investment opportunities that are available.

There are many reasons why Chicago is one of the largest cities in the country. Millions of people reside in the city and millions more commute to the city every day for work. Chicago is home to a diverse group of people that takes pleasure in all of the exciting things that the city has going on. Chicago has the magnificent lakefront and hundreds of parks and other attractions to keep residents entertained.

The city has so much to offer that it is no surprise that people are constantly looking for condominiums Chicago has on the market. There are many benefits to living in the city, especially if you work in Chicago. The city is also a never ending source of entertainment. Moving to the city can provide you with many career and other opportunities.

If you need to get around the city, Chicago has an extensive public transportation system. There are many condominiums Chicago has available that are located close to public transportation, which can make traversing around the city simple if you do not want to drive.

By taking advantage of an expert Chicago realty provider, you will be able to focus your search on condos that specifically meet your criteria. You will have the opportunity to search by price range, location, or by the style of the condo that you have in mind; therefore eliminating any condos that don’t have what you are looking for.

The numerous neighborhoods located within Chicago each have their own character. Look around at few of the neighborhoods before settling on one so that you can experience the different locales that the city has to offer.

An experienced Chicago realty provider will make your search for a condo as uncomplicated as possible. Real estate agents have access to a number of resources that can help you to buy or sell a home.

Buying a condo in the City of Chicago is a smart real estate decision. The assistance of a professional real estate agent will make the entire experience significantly easier.

The Solo 401(k) for investing in real estate but it is perhaps the best kept secret.

“It is a powerful tool that most people don’t know about but should. There are at least four distinct advantages over an IRA (Individual Retirement Account),” says Jeff Moormeier co-founder of IRA Association of America, an alternative investment educational institution.

Moormeier teaches a program to real estate agents, CPAs, and investors on investing using the Solo 401(k). He says the advantages make this method of investing superior to a standard IRA.

He lists the following as the top reasons to set up a Solo 401(k) plan.

You can get money into a Solo 401(k) plan faster than IRA or SEP/IRA. You can use mortgage financing as leverage without triggering Unrelated Business Taxable Income. You can defer income into a Tax Free Roth account, inside the Solo 401(k). Getting money into a Solo 401(k) plan faster is a huge benefit. Let’s use a scenario to show the actual numbers: You have $100,000 of earned income, and you operate your business as a corporation with no employees.

“The maximum profit-sharing plan is 25% of earned income, which amounts to $25,000. Plus the maximum salary deferral is $15,000 and if you are over the age of 50 you may defer an extra $5,000. This is called a catch-up provision. In this example the total new money deposited into the Solo 401(k) is $45,000,” explains Moormeier.

“In the more common SEP account, the maximum contribution on the same income is $25,000. There is no employee deferral or catch-up provision in a SEP. The difference is $20,000 per year of additional money that may be added to a Solo 401(k) vs. SEP,” says Moormeier.

Many people are used to contributing to an IRA or a 401(k) plan, but not as many understand that they can actually have a 401(k) that can buy investment real estate with the money. In addition, you are able to borrow on a non-recourse basis to finance the purchase, thereby creating leverage in your retirement account. If you have leveraged property in an IRA there is a tax known as Unrelated Business Taxable Income. When the same transaction transpires in a Solo 401(k) this tax doesn’t apply.

“Now, what I am about to tell you, in my opinion, is far and away the greatest tax benefit the government has ever given us — as of January or February of this year the $15,000 salary deferral and the $5,000 catch-up provision can now go into a Roth account inside of this 401(k) plan and grow tax free. Tax free verses tax deferred growth is a monumental benefit to the Solo 401(k)” explains Moormeier.

He says the current Roth contributions have income limits.

“In other words if you make too much money you are unable to contribute to a Roth IRA. As of now regardless of your income, you are able to contribute to a Roth inside a Solo 401(k),” says Moormeier.

The IRA Association of America, online at iraaa.org, is where you can get the help you need to start a Solo 401(k) plan. Moormeier and co-founder Jeff Nabers have joined together to help people understand and make use of Solo 401(k) investing.

“We’ve created a company that helps you think. Quite frankly, there just aren’t a lot of tools out there to help people keep it all straight,” says Moormeier.

“We now offer a turnkey 401(k) package. We handle everything including determining eligibility, establishing the administration paperwork, opening a bank account, and handling your rollovers,” says Jeff Nabers, founder of IRAAA.

This 401(k) package will also soon be available directly through the many local IRAAA branches opening in early 2007. Remember, if you plan to have the Solo 401(k) plan help you by reducing your taxable income, then you will need to establish your plan by December 31 in order to claim a 2006 tax deduction. In 2006, if you are over the age of 50 you can contribute up to $49,000 for each participant, and jointly you and your spouse can deduct up to $98,000. If you are under the age of 50 you can contribute up to $44,000 for each participant, and jointly you and your spouse can deduct up to $88,000.

It’s always a god idea to perform home improvements. It increases the value of your home and makes it more attractive to buyers should you ever wish to sell – and of course, you can enjoy the amenities you have added even if you intend never to leave your home. One surefire way to increase the value of your home is to add an extra bathroom in your basement. This does take a lot of work, but the benefits of having done so are more than worth the effort involved.

Any sort of addition to your basement is going to be a big job; meaning that you may want to leave the work to a professional or at least get one to help you add a bathroom. A contractor will give you an estimate based on the size of the space you’re working with and what you want to add. Generally speaking, anything you can add to the space without crowding it should be. However, you may only have room for a sink and a toilet; just do what you can with the available space.

The benefits of professional can help you to avoid problems before hand and cost you less; if they have to fix your mistakes, it will cost a lot more. First, you need to measure your space then determine how much room you have to work with. Measure for fixtures such as overhead lighting and wall lighting too, working from the ground up will let you know how much space you have to work with.

After you find this out, you’re ready to go shopping for materials. If you’d like this extra basement bathroom to match the others in your home, then simply choose the same types of fixtures. If the basement bathroom will instead be intended to match the rest of the basement, then you can get creative with your design.

Many basement bathrooms just have a toilet and sink, adding a stand up shower is ideal if you have the space. They don’t take up that much room because a tub is usually not required. You will have to check about plumbing and water flow before adding one though. Using your existing sump pump for flooding or draining problems will help to make this decision easier.

You can also use unique fixtures to make your basement bathroom an even more value-adding feature in your home. You can user a stand-alone sink and a shower stall and use any kind of wallpaper or paint you like! Your extra bathroom will make a great addition to your home regardless of how you choose to decorate it – most homeowners would actually prefer an extra bathroom to an extra bedroom.

Other than the obvious convenience factor, the biggest benefit of adding a bathroom to your home is that makes your home a more comfortable place. While few homes need more than one kitchen or more than one attic, every home could use an additional bathroom.

Adding an extra bathroom in your basement is an investment in your home which pays off in the short term and over the long run. Having more than one bathroom is a strong selling point if you ever decide to sell – and the value it adds to your home will more than make up for your initial investment in making the addition.