Want Home Loan

By Peter Vekselman

 You’ve located the property that you are potentially interested in purchasing, have looked at it, and determined that it meets your basic investing goals.

Before you pat yourself on the back for a job well done, you need to establish its value to avoid potential financial disaster. If you take the word of the seller or the county tax rolls to establish its value, you could lose your shirt, especially in a real estate market that has seen values drop by tens of thousands of dollars within a matter of months.

Depending upon the kind of investor you are you’ll utilize one of the three methods of establishing the value of a property.They are:

Comparable Sales-If you’re investing in primarily single-family or multifamily properties with fewer than five units, by far the most popular method of establishing value is the comparable sales method. This method consists of locating recently sold properties that are substantially similar to the one you are considering purchasing and are located in the same general vicinity.

A skilled appraiser typically has many years of experience in determining value, but you can do the same thing either by going to your county courthouse and compiling the information yourself or by working with a realtor who might be willing to provide these figures to you. You can also get a rough estimate of values in many areas by utilizing an on-line resource.

Once you have your comparable sales figures you’ll need to compensate for any differences, such as the lack of a garage, fireplace, or even a swimming pool.

In order to compensate for the differences in square footage of your subject properties, you can divide the sales prices by the square footage of living space to come up with a cost per square foot.

Replacement Cost-While not nearly as popular as the Comparable Sales method, another way of determining the value of a property is by estimating what it would cost to re-create the same property in the same area. You would need to determine building costs, the cost of materials, and also make allowances for depreciation of the property so that it is substantially similar to the property you are considering purchasing.

If you’re experienced at estimating building costs accurately and are aware of the current cost of building materials and supplies, the replacement cost method may be one which you will want to utilize.

However, it isn’t utilized very frequently. If the Replacement Cost method is one that you’d like to use to determine value, you could very quickly arrive at a figure by contacting a local contractor and asking them how much they would charge you by the square foot to build a home in the area of your subject property. Don’t forget to factor in depreciation to match the condition of your subject property.

Income Valuation Method-The third method of determining the value of a property is to use the Income Valuation Method, sometimes referred to as the Net Income Approach. This method is used to determine the market value of a commercial property or a residential property with more than five units. It’s a relatively simple process. First, determine what the gross income is for the property and then subtract all expenses, including debt service on an annualized basis. Multiply that figure by a factor of ten. The resulting number is about what your property is worth.

What’s nice about this sort of property is you can increase its value simply by increasing its net income, reducing operating expenses, or both.

Once you’re able to determine the value of a property you can write an intelligent offer that doesn’t cause you to run the risk of overpaying for a property.

Remember, though, that real estate prices are extremely volatile right now, so make sure any properties you use for comparative purposes are recent sales figures. If you have accurate numbers, you can write impactful, precise bids that stand a greater chance of being accepted and allowing you to turn average returns into explosive profits.

Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1000 real estate deals, owned a construction company, been a private lender, and owned a property management

company. To learn more about Peter please visit

http://www.coachingbypeter.com.

Your Online Source For Home Loans

Relief to the Housing Market by Foreign Buyers
By zoltrifoot

 The economic condition around the country is very grim indeed. Not only is the real estate market taking a tumble but also it looks as if a recession is just around the corner. With the dollar weakening many wonder if relief is in sight. However, it is not all bad news. There is one thing that just may rally the housing market, foreign investors.

Homeowners are finding it very difficult to sell their homes. Unlike a few short years ago homes would not be on the market for maybe a month or two before offers started pouring in. But now potential homebuyers either cannot afford the prices or they simply cannot qualify for a new mortgage. So what choice do they have but to rent until the market stabilizes. With the shortage of buyers within the country, sellers are discovering new buyers from abroad.

Experts speculate that investment from Europeans is likely to increase in the coming months. Many speculate that foreign investors have recognized the value in buying homes in the U.S. Prices have declined, making them far more attractive. In fact, in some cases, foreign buyers could be poised to replace the niche that first-time homebuyers held before they were squeezed out of the market as a result of the recent real estate crash.

This could bold well for homeowners who need to sell quickly, either to upgrade to a larger home or get out of the homes they can no longer afford.

Brokers have reported an increase in the number of international buyers interested in purchasing US real estate grow as much as five times over the previous years.

So why is it cheaper for a foreign investor to buy homes in the US than it is for an American buyer? The Euro. A foreign buyer who invests in a home today would need far less money in terms of euros to make a substantial down payment on a home as a result of the weakening dollar.

In fact, foreign buyers today could make what is essentially a $50,000 down payment for little more than 34,000 euros today. A year ago that same buyer would have needed nearly 38,000 euros in order to offer the same amount for a down payment

The exchange rate has definitely provided support for increased spending power in many locations. In certain areas, like New York and Chicago, the demand has definitely increased. In some cases, the demand has grown so much that it is actually outpacing supply. California and Florida are also proving to be popular with foreign buyers and investors. The latter two markets, which have been among the hardest hit, are embracing the relief with open arms. Florida, in particular, is still struggling with the crash of the condo market.

Many properties are now being marketed specifically toward foreign buyers. High-end luxury homes that have languished on the market for months are among some of the first to be targeted for interested foreign buyers.

The Internet has proven to be a successful marketing tool in the past and today agents and sellers have discovered it is often the easiest way to reach foreign buyers. Compared to other advertising mediums it is often far less expensive and allows them to reach a broader audience. When marketing properties toward foreign buyers, this can be particularly important.

Foreign buyers may not be the full salvation that real estate agents and homeowners need to completely recover from the housing bust; however, they are certainly providing a bit of welcome relief in many beleaguered markets.

Even if your current financial situation is good now, things can change overnight because of our volatile economic situation. It is very important, as a homeowner, to know what to do if faced with a sudden financial crisis. To learn more about how to avoid foreclosure and other real estate related articles please visit Preventing Foreclosure today.

mobile home loans

You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.