Home prices are appreciating, and home sellers are realizing a sizable return on their investment as a result. Those who sold their homes in the first quarter of 2019 made a 31.5% return, pocketing an average gain of $57,500, according to the latest from ATTOM Data Solutions.

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Investing on real estate is a strikingly common concern of people all across the world. It is seen as a way of securing the future or as a source of lifelong income. Condos of Square one Area in Mississauga is one of the hottest choice among those who plan to invest on property. Indeed, buying a condo is a good investment plan, but it’s important to make the investment in a right way. No doubt, before buying a condo at Square One area you are sure to make some ground research; this article can be of good aid at directing you in making a proper ground research so that you make a wise investment.

About Square One Area of Mississauga City Centre

It won’t’ be a new of piece of information that Mississauga City Centre is a great place to live and work. In light of this, Square One Area has come up as an upcoming residential community in Mississauga City Centre. At a very quick pace, this community got occupied with well build condos like Tridel Ovation, Grand Ovation, One Park, Onyx, Limelight, Grand Park, etc; many others are on their pre-construction state. If you are also planning to buy a condo over here, just go through the following quick points:

Points to consider before buying Square One Condos in Mississauga

You can get the condo units at lower rates, if you buy these during pre-constructions. However, if you are thinking of investing that a small unit, then it won’t be a wise idea, as the return of investment (ROI) won’t be satisfying. There are chances of not even getting 10%, if you put a small condo on rent or sale. Reasons for this are simple; condos at square one area won’t be a cheap affair considering the richness of the locality, hence if some gets a condo there for rent or buy it as property, he would prefer to pay a bit more to have a spacious and comfortable house rather than investing a few dollars less to get a 550-square-foot one-bedroom. Hence, before yourself buying a condo, think from the vent of mind of your target buyer. At Square One area, you won’t get a buyer, who would be looking for a small room, where a bed even doesn’t fit properly. Hence, buying a small condo gives no ROI. By renting a Square One Condo, you should at least get 10 per cent or more, otherwise its better you invest on other forms of real estate investments. But if your plans still stick with condos, then go for unique and large condo unit to attract more buyers and renters.

Next point to be considered is that, you won’t be the single seller of condos in the market, because, when you are buying a pre-constructed condo; many others are also buying the same. They are your competitors, because they will also put there condos on sale or rent, probably at the same time as that of yours. Hence, don’t let your condo unit to be one of the hundred one bedroom units, as it will have low demand. Let your condo be unique and large. For better assistance, you can get the help of property dealers.

Source by Cecil Watson

Morgan Stanley is telling investors to “go long” on mortgage bonds and JPMorgan has raised its view of agency MBS, according to an article Tuesday by Bloomberg News. The investment banks cited a wider spread between the 30-year Fannie Mae current coupon and various measures of Treasury bonds to back up their recommendations, Bloomberg reporter Christopher Maloney wrote.

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One of my newsletter members recently asked if using a list broker was a good source of marketing leads to attract private lenders and, if so, how is it done. The answer is yes but with several precautions.


It is important to understand that I strongly recommend that marketing for private lenders is done on a local and low key way. I do not recommend any sort of website advertising or newspaper advertising because it can be viewed as a solicitation to an unsophisticated investor and attract calls from your state’s SEC. You do not want one of these calls!

The SEC and state authorities monitor Craig’s List and other similar bulletin boards for people doing unauthorized advertising for private lenders. When you advertise in this fashion, you can not restrict out of state people from reading your ad and as result certain authorities may deem this a solicitation across state lines. If this happens you may be required to register with the federal SEC.

List Brokers

So how do you market to potential private lenders using a list purchased from a list broker? You can start with a national list broker like InfoUSA or Melissa Data and purchase a list that is tightly defined to fit your needs. In fact, most large list brokers already have a predone list targeting high net worth investors. You may want to go with this type of list or customize to fit your needs.

I would start with people that have significant net worth over $500k and have IRA’s or CD’s investments. This fits the profile of typical private investors. You may also want to add retired people who have IRA’s over some fixed dollar amount. It is critical, however, that you only allow people with a primary residence in your Local County or state. Even once you receive your list, I would recommend you proof it once or twice to be sure you only have addresses in your county or state. I know it may be shock that someone may make a mistake, but it does happen and guess who will pay the price for the mistake. The SEC does not care that a clerical error was made.

Once you have a clean list, you can send each person a postcard or letter. Be sure that the message you use on the postcard or letter is more of an offer to provide more information or an invitation to a seminar as opposed to an offer to directly invest with you. You may even want to offer a free voice recorded message or website where they can go and get additional information about your company and investment information.

Source by Mike Lautensack

Starting out in small multifamily units is the best use of your money as a new investor for a multitude of reasons. For one, it’s a great way to start gaining experience and putting cash in your pocket to grow your portfolio versus the slow growth option of single family buy and hold.

Below are some of the top reasons you should be spending your time and energy looking for small multifamily properties as a first investment.

5 Benefits of Small Multifamily Properties for New Real Estate Investors

1. Better Financing

One of the best arguments for investing in small multifamily is the fact that you can obtain 30-year financing. There are a few key factors that make this attractive for investors.

First, you will likely get a lower interest rate with a 30-year fixed loan, unlike most commercial loans, which can be a percentage or two higher than the prime rate.

Secondly, since your payments are spread out over 30 years, your monthly cash flow will be higher because you don’t owe as much money per month to the bank. This is incredibly helpful when you are just starting your investing career.

It will take longer to pay down your home, but you always have the option to pay more than you owe each month. With a 15-year loan, you are required to pay a higher monthly amount no matter what. But having the option to pay a smaller amount is a huge bonus if you ever find yourself in a difficult financial situation.

Another huge financing benefit for small multifamily units is the ability to finance a property with an FHA loan or VA loan for little to no money out of pocket. You can buy a single family home with a VA/FHA loan and have a liability, or you can buy a multifamily property with the same type of loan and have an income-producing asset that will project you and your investments further and further ahead each month.

Related: What is a VA Loan and Why Should I Consider Using One?

2. Lower Risk During Vacancies

The next largest advantage of investing in small multifamily is the ability to spread your vacancies over multiple units. When you own a single family residence and that property goes vacant, you are responsible for covering not only the entire mortgage, but also the extra holding costs that most people don’t account for (like lawn care, electricity, water, and gas).

A vacant rental house in the Midwest during January can easily add $200 to $300 of utility bills on top of the mortgage! And a few months of winter vacancy can chew up your cash flow faster than you can save it up—a big problem for any savvy investor.

A mentor of mine once described it to me like this: “If you have a farm and your family relies on one cow for milk, if that cow gets sick, your family is going to go hungry. But if you have multiple cows on your farm and one gets sick, your other cows can at least feed your family while your sick cow recovers.”

It’s a concept that is beyond true and applies so well to real estate investing. This is the reason that professional investors do not spend their time buying single family homes. It’s all about economy of scale, and in this game, there is safety in numbers.

gray and white small multifamily real estate

3. Ability to Add Sweat Equity

The third advantage of small multifamily investing is the ability to add sweat equity while you are living in the residence. Sweat equity is a term that people use when they are referring to the process of adding value to their home through physical labor.

If you buy a building and update it with new paint, appliances, and fixtures, you are adding sweat equity. (You’ll be sweating because you’ll be working so hard to add that value.) This is beneficial as adding value to your home oftentimes allows you to increase the amount of monthly rent, thus increasing your overall income.

Multifamily homes are typically appraised like commercial properties because their value is based upon the amount of income they produce. So when you buy an apartment building, the main indicator of price is driven by the income that the building produces, whereas a single family home is often valued by factors like the amount of bedrooms, the type of fence in the backyard, the size of the garage, recent sales in the neighborhood, etc.

Many appraisers will do what’s called an “income approach” in their valuation of the building, along with seeking out recent comparable sales in the area. Thus you can add value to a small multifamily home by simply increasing the rents!

4. Ability to Self-Manage

Living in your own multifamily unit allows you a few key advantages as far as management. The opportunity to self-manage your building is one of them!

Most new investors want to be involved in the day-to-day management of their property, and the best way to be involved is to live in the rental that you own. We lived in a duplex as our first home and self-managed our tenants next door. We learned a TON about management, and it really pushed us to understand our local and state laws regarding landlords and tenants.

We no longer self-manage our rentals. But because we did at one time, we know exactly what we want out of future property managers, and we know a few of the extra addenda we want added into our leases.

Related: How to Safely Navigate Landlord-Tenant Laws as a Real Estate Investor

Open door with keys, key in keyhole

5. Live for Free

Let’s be honest, the number one most attractive quality to investing in small multifamily is the ability to live for FREE! And if you don’t live for free, you can at least live for far cheaper than if you would have purchased a single family home.

We purchased our first duplex with a VA loan, which allowed us to put $0 dollars down on a property up to four units. This enabled us to get in right away with no money out of pocket.

We did some research on local banks and found out that one in particular was not only offering the lowest rates available, but they were also giving a $5,000 credit toward closing costs. For us, that amounted to about $2,500.

So we walked away from the closing with a duplex and $2,500 in our pocket! Plus, we got to live in our four-bedroom, three-bathroom, 1,900-square-foot duplex for only $400 per month.

By creating this scenario, the money we were able to save over the course of three years totaled roughly $36,000. That gave us a huge head start in terms of making other investments, and all I had to do was buy a multifamily home to get there.


As you can see, there are many good reasons to start out in small multifamily instead of single family homes. Since investing in multifamily and “growing our herd,” we are able to sleep better at night, knowing that we’ll never be drowning due to one vacant unit.

The first vacancy we experienced with one of our single family homes was one of the most difficult times we’ve had in our investing careers. It brought about feelings of failure and dismay, because the house sat empty for two months. Meanwhile, we were paying out the nose for it.

We now only buy multifamily properties. When one unit is vacant, I can rest assured that the other tenants are still paying down the mortgage for me. We never rule out a great deal on a single family home, but for us, our future is all multifamily.


Are you considering investing in multifamily properties? Do you have any questions for me? Or do you prefer single family homes? For what reason(s)?

Let’s discuss in the comment section!


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You left me, sweet, two legacies, –

A legacy of love

A Heavenly Father would content,

Had He the offer of;

You left me boundaries of pain

Capacious as the sea,

Between eternity and time,

Your consciousness and me.

“You Left Me” is an amazingly concise poem. It communicates two immense ideas in the short space of two four-line stanzas.

Clearly, Emily Dickinson wrote the poem about somebody that was dear to her. It’s not clear whether the poem is about somebody who is far away or is about somebody who has died. Both were common in her life. The enduring nature of the poem is such that its meaning is consistent with either case and also consistent with additional cases where there is a physical or emotional separation between two people.

Chronologically, the poem was probably written in 1862, during the period of Dickinson’s most intense writing. In 1862 she wrote about 366 poems.

Her dear friend, Reverend Charles Wadsworth, left for San Francisco in 1862, and he is most likely the subject of the poem. Dickinson met him in Philadelphia in 1855 and only met him in person on two other occasions, including his visit to see her just before he left for San Francisco. However, her emotional attachment to Wadsworth remained strong for the rest of her life and she wrote him many letters. She called him her “dearest earthly friend.” Unfortunately, most of her letters to Wadsworth have not survived, and his letters to her were burned, at her request, after her death.

The first stanza of the poem, “You Left Me,” tells of being left with a deep love, one that even the Heavenly Father would be content with. That’s an impressive statement and makes any further description unnecessary.

The second stanza talks about an emptiness that has been left. It’s obviously a huge pain, as big as the sea and compared to eternity. This legacy stands as a significant contrast to the legacy described in the first stanza.

A third stanza to tie everything together into a conclusion was not written. The last line of the second stanza, “Your consciousness and me,” seems to sufficiently bring the reader back from the two huge ideas just presented to the groundedness of the consciousness of two real people.

The stanzas are written very formally with a ballad meter, iambic tetrameter followed by iambic trimeter. The rhyme is also very precise in the second and fourth lines of each stanza. There are no near rhymes in this poem. Also, the use of anaphora, the repetition of “You left me” to start each stanza, helps to create a very formally designed poem.

As a result of these poetic features, Dickinson was able to create an easily understandable yet highly meaningful short poem. The skill and the insights are both impressive.

Source by Garry Gamber

In residential real estate, prorated rent is a term that describes the amount of money a tenant pays to a landlord for occupying a rental unit for less than a full month.

The concept of prorated rent is central to both landlords and tenants, as each has a financial interest in when it is used and how it is calculated.

Before we describe when prorated rent is used, let’s first look at how it is calculated.

Calculating Prorated Rent

There are three common ways that prorated rent can be calculated, and each of the three will produce slightly different amounts. For the purpose of our calculations, we’ll assume a full month’s rent of $1,000 and that a new lease is to begin on May 15, 2019.

Close up view of bookkeeper or financial inspector hands making report, calculating or checking balance. Home finances, investment, economy, saving money or insurance concept

Related: How to Be a Landlord: Top 12 Tips for Success

365 Days in a Year

The first typical way to prorate rent is based on a 365-day calendar year. The formula is as follows:

(Number of Days Occupied / 365 Days in a Year) x (Monthly Rental Amount x 12 Months in a Year)

A $1,000 per month lease beginning May 15, 2019 produces the following:

(15 / 365) x ($1,000 x 12) = $493.15

The second way prorated rent is calculated is based on the number of days in a month. The formula is as follows:

(Number of Days Occupied / Number of Days in a Month) x Monthly Rental Amount

Using this method, prorated rent is calculated:

(15 / 31) x $1,000 = $483.87

Finally, some property managers use a 30-day “banker’s month,” regardless of the actual number of days in the prorated month.

(Number of Days Occupied / 30) x Monthly Rental Amount

This produces prorated rent as follows:

(15 / 30) x $1,000 = $500.00

From a landlord’s perspective, banker’s months will yield the highest prorated rent in every month except February. In a market with rapid turnover, using banker’s months might be a practical way to help offset high vacancy.

However, in more stable markets where tenants tend to stay for longer periods, the significance of strong tenant relationships might dictate using a method more favorable to your resident.

Critical, however, is that landlords are consistent in their application of prorated rent and its calculation. In fact, the formula used should be described in your rental agreement.  Inconsistent application of prorated rent could be interpreted as discrimination, which is prohibited by Fair Housing Laws.

From a tenant’s perspective, it’s vital to know that unless it’s stated in the lease or otherwise mandated by state or local law, landlords are not obligated to provide prorated rent.

Female hand holding key house shaped keychain.

Related: How To Rent Your House: The Definitive Step by Step Guide

Why Prorated Rent Matters

Move In/Move Out

The signing of a new apartment lease is the most common scenario in which you might encounter prorated rent. It’s important to know that if a lease begins on the first of the month and you don’t move in until the fifth by choice, the landlord is unlikely to offer prorated rent.

However, if a tenant knows that move-in will occur after the first, it’s essential to request that the landlord begins the lease on the projected move-in date. If the lease begins on the fifth, then the tenant is much more likely to be granted prorated rent for that month.

Prorated rent is most likely to become contentious when a tenant decides to terminate a month-to-month rental agreement. This is because rent is generally due on the first and paid in one-month installments. The landlord is not under any obligation to prorate a tenant’s last month.

For a tenant interested in paying prorated rent for the final month of occupancy, it’s always best to provide as much notice of vacancy as possible and come to an agreement in writing about prorating the final month.

Purchase and Sale of Rental Property

A more nuanced aspect of prorated rent is when investors buy and sell rental property. Most purchase and sale agreements will have a provision that entitles the buyer to receive one month’s prorated rent as of the closing date of the property.

As a buyer, this means the best day to close on your rental property is the first of the month. When you do, you’ll collect an entire month’s rent just for showing up to the closing table! As a bonus, though beyond the scope of this article, closing on the first means that your first mortgage payment will not be due until two months after closing.

However, if you’re selling rental property, the opposite is true: you want to close on the last day of the month. Doing so will minimize the amount of prorated rent you must pay to the buyer at closing.

So there you have it, prorated rent in a nutshell. Some concepts in real estate are complicated and require full-length articles to explain. Coincidentally, explaining prorated rent requires one that’s, well, prorated!

Does this make sense? Do you have any additional questions about prorated rent? 

Ask me in the comment section!


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Can someone explain to me why it seems almost every professional sports team has either changed their colors, added to their colors or adopted the dreaded alternate uniform, in BLACK!

It is a trend that quite frankly has irritated me for quite some time now. I know I shouldn’t be that concerned with such trivial matters as the color scheme of a few pro sports teams, especially in light of all the financial and political chaos in this country, but I am. Sports are about tradition and tradition has always been about building something meaningful and being proud of what you are and where you come from.

I did not reach my level of concern without first trying to understand and adapt to the current trend in pro sports apparel. I considered that black may be slimming and, that alone would be a legitimate reason to adopt the color. However this method of reasoning soon left my mind when I gazed upon Warren Sapp looking just as fat in Raider silver and black as he did in Buccaneer red and pewter. We’ll discuss pewter later!

I know my disgust will not be enough to cause a sufficient ground swell of emotions to overturn this trend in sports fashion, and I recognize that there may be some who disagree with my viewpoint. So, let me bring some solid factual insight to this matter.

Let’s start with the NFL.

Sometime after the 1990’s the Philadelphia Eagles began to wear black. At first they began subtly adding it in the form of trim and then openly began wearing a black alternate jersey. The Eagles are a proud and historic franchise that dates back to 1933. Their team colors have always been green and white, sure they added a splash of silver in the 1970’s, but it was the disco era and it was understated and tastefully done. Clad in the traditional green and white they played in three consecutive NFL championship games from 1947-1949, winning twice, 1948 and 1949. The colors would lead them to another championship in 1960. Wearing black the Eagles reached the NFC Championship game five times in eight years (2001-2008), losing four times – the one time they were successful they lost the Super Bowl. They were arguably the better team and at home for several of those games – blame the black.

The Detroit Lions entered the NFL in the 1930’s sporting the colors Honolulu blue and silver. Why you’d ever want to mess with Honolulu blue is a puzzle, but let’s stick with facts and save the commentary for later. Sporting their traditional colors, the Lions won NFL Championships in 1935, 1952, 1953 and 1957. Now I know they’ve had a little dry spell that has lasted some fifty years now, but adding black has provided them with eight consecutive losing seasons. It’s not the answer.

Other examples would include the Baltimore Ravens, Super Bowl Champs in purple. In black, nothing but disappointment. Teams that are also kidding themselves would be the Carolina Panthers; stick with the Carolina blue please. The Atlanta Falcons, sure they made the Super Bowl when they switched to primarily black uniforms, but it resulted in defeat, to the Denver Broncos, who were the worst Super Bowl performing team in history to that point – go back to red and stay true to yourselves boys. Jacksonville, go back to the blue, black will slow you down in the hot Florida sun – I’m just saying.

The only teams that are approved to wear black in the NFL are the Oakland Raiders, the Pittsburgh Steelers and the New Orleans Saints. Bengal fans settle down, your team should be thrown out of the league for the tiger striped horror show that appears every Sunday on television screens across America, trumped only by the “creamsicle” orange alternate uniforms adopted a few years ago.

Let’s examine our national pastime, Major League Baseball for a moment.

Allowed to wear black are the Chicago White Sox, the Detroit Tigers and the Pittsburgh Pirates – that’s it. I acknowledge there is some gray area with the Baltimore Orioles, Florida Marlins, Colorado Rockies and San Francisco Giants, but what makes fashion sense in baseball is to be traditional and wear white at home and gray on the road. Some suggestions would be the following; Orioles, I’m fine with black as a third uniform for you, but truth be told in the 1970’s when you first opted to have a third uniform you chose orange. Maybe you should be made to live with that decision. Marlins, black has been part of your original color scheme from the beginning, although you look more professional in the blue uniforms. Rockies just wear the purple and Giants you also took the path of the Orioles and chose orange in the 1970’s.

Wearing black for no apparent reason, the Toronto Blue Jays, winners of back to back World Series in 1992 and 1993 wearing their traditional sky blue uniforms and in black, nothing but losing.

The Arizona Diamondbacks seemed to have come to their senses as an organization, after having dabbled with many looks over the years, including the dreaded black uniform; they seem to have settled on red as a primary color and it looks sharp. Kudos to the D-backs.

The New York Mets entered the National League in 1962 and pronounced themselves “the team” for all of the former Brooklyn Dodgers and New York Giants fans, who no longer had a team to call their own. They even made a big deal of announcing that they were adopting the colors blue (in honor of the Dodgers) and orange (in honor of the Giants). Wearing those colors they would win the World Series in 1969 and 1986. Then for whatever reason early in this decade, they adopted black into their color scheme. Perhaps they thought black would make them look tougher! In October of 2000 the Mets found themselves in the World Series again this time against their cross-town rival Yankees, the team probably most responsible for hastening the demise of the Dodgers and Giants in New York during the 1950’s. The Mets lost, of course, black in the uniforms to blame and the looking tougher, well that theory went out the window when Roger Clemens fired a piece of Mike Piazza’s broken bat at him and Piazza and the Mets did absolutely nothing about it! Perhaps yellow may have been a more appropriate color choice.

The NBA is absolutely ridiculous and I am reluctant to test my blood pressure any more than necessary, so lets leave it at this, the San Antonio Spurs are the only team that should be wearing black in the NBA, period!

The Celtics, Knicks, 76ers and Bulls should know better than to mess with success. The Kings are probably just trying to toughen up after being called the “Queens” for years by Shaquille O’Neal. We know now that doesn’t work – see Piazza and the Mets. The Miami Heat should stick to red, the Orlando Magic, blue and the Utah Jazz, purple. The Portland Trail Blazers switched to black from red and now lead the league in arrests – your team colors are red; note your 1977 NBA championship team.

Hockey sadly has many of the same issues.

The Philadelphia Flyers with one of the most distinct uniforms in the league, orange trimmed in black and white, won Stanley Cups in 1974 and 1975. In this decade they have bowed to the trend and adopted a black uniform. The Flyers of the 1970’s certainly didn’t bow to trends, in fact they fostered a reputation of going against trends in the NHL and this new generation of Flyers should adopt the same stance.

The Chicago Blackhawks have traditionally sported, what I believe to be the nicest uniform in hockey. They get a pass here though, as originally they wore predominantly more black than red and won Stanley Cups clad in both red and black uniforms. A pass also goes to the Ottawa Senators and the Tampa Bay Lightning, though I like them better in red and blue respectively.

The Flames should never have deviated from the red and yellow that brought them a Stanley Cup in 1989. The Washington Capitals are looking better these days in their new federal blue uniforms – nice job. The Dallas Stars, cup winners in 1999 wearing green, have done nothing wearing black. The Anaheim Ducks or Mighty Ducks – forget it, they should be thrown out of the league for ever having been known as the Mighty Ducks.

Approved to wear black in the NHL, the Boston Bruins and the Pittsburgh Penguins. Of course with everything there is an exception to the rule and the Penguins are it. They originally entered the NHL in 1967 wearing powder blue and black. In 1979 they legitimately adopted the colors black and gold to keep themselves in line with the city’s other two sports residents, the Pittsburgh Steelers and the Pittsburgh Pirates. The Steelers had won four Super Bowl Titles at that point and the Pirates had just won their fifth World Series. The Penguins had suffered through seven losing seasons in their first decade. Since the switch to black and gold they have won three Stanley Cups.

Checking the “tale of the tape”, teams stated, wearing traditional uniforms have won 15-championships, when switching to black uniforms nothing! The Penguins are excluded, remember I legitimized them. So facts are facts and numbers don’t lie. If you want to be successful in professional sports keep your teams operating in the “black” and playing in their traditional colors.

By the way, any of you who read this and said to yourselves, “the Chicago Bears and New York Yankees wear black and he forgot to mention them.” They wear blue – and that’s a topic for another day!

Source by Frank Bilotta

Mortgage rates continued climbing in the last week, putting the recent historic drop further into the rearview mirror. Just a few weeks ago, mortgage interest rates posted the largest single-week drop in 10 years. Since then, rates have ticked back up. And that trend continued last week, but rates are still well below where they were a year ago.

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In recent months lenders have started focusing on doing more short sales than REOs. Their reasoning sounds logical enough; they want to get out of the toxic assets at a better price than going to the foreclosure sales.

We have a service that tracks the discount at which each short sale and foreclosure ultimately sells. The discounts are not always larger for REOs; sometimes the short sales are greater. The final figures fluctuate wildly and vary by bank and motivation of each lender.

The market has been stabilizing and depending on which statistics you believe, the real estate market is either falling, moving into a bubble or poised for the greatest run ever! Frankly, it doesn’t matter as long as you are wholesaling short sales. If you are holding long term, it doesn’t matter either. It matters the most when you are a rehabber and you have to sell when you complete rehabbing a property and you are unable to sell it.

Since we wholesale 99% of the time, the clauses in the short sale contracts are critical to our not losing money if we are unable to find a buyer before our inspection period is over. With REOs the lenders have their own addendums that stipulate the inspection period for each deal – usually 5, 7 or 10 days. So if you include any inspection period in your REO contract, it doesn’t matter because the lender’s addendum overrides it.

However, your short sale contract is not between you and the lender. It is between you and the homeowner. The lender is not on title until he forecloses, purchases the tax deed for the property or the homeowner gives the lender a deed in lieu of foreclosure. Until the lender is on title, he can only refuse to allow a principal reduction of the outstanding loan and stop the short sale.

Let’s assume your seller/homeowner is agreeable to a short sale and signs your contract. While you have a signed contract on the property, you can’t plan on selling it wholesale because you cannot be sure the lender will approve your short sale price.

Some wholesalers advertise the property for sale immediately. Technically they have an equitable interest in the property because they have a signed contract. If you sign a contract with an end- buyer, you have the legal obligation to sell him the property. But, if you don’t get it because the lender refuses to give you the price you need, you have “breached” your contract. The way to overcome this problem is to put a clause in your contract that simply says, “Contract is null and void if short sale is not approved at a price acceptable to investor.”

It is more advisable to wait until you get a written approval from the lender to start your marketing. However, if you wait then you need your inspection period to start after you get lender approval. The simplest way to handle this is to put the following clause in your purchase and sale contract with the homeowner/seller, “Inspection period to start after buyer receives written approval from seller’s lender.” The actual inspection period (we use 15 days) is located in the actual contract. I consider this the most important clause in the short sale contract.

This means that you have 15 days from lender’s approval to market and contract with an end-buyer. If you are unable to find a buyer, then you can cancel the contract and not risk losing your earnest money deposit (“EMD”). This is the way to wholesale properties without taking a market risk.

Real estate agents will try to make your inspection period start when you sign the contract (contract’s effective date) with the homeowner/seller. The way to explain this issue is that the short sale will take weeks or months and the condition of the property when the approval comes could be totally different than when you signed. If you sign the contract with your inspection starting immediately, you run the risk of losing your deposit if you can’t wholesale it before the closing.

The way to offset this potential loss of an EMD is to make the deposit as small as possible. We typically give a $250 to $1,000 EMD and are seldom asked for more. There will always be the rogue agent who wants a ridiculous amount – even as much as 10% of the purchase price. If you find one of these agents asking for a large EMD, explain that you do too many offers to have 10% on each one. If he is not motivated to help you, move on to the next deal.

In summary, real estate is a renewable resource and there will always be other opportunities. Do not allow yourself to be intimidated by agents or other investors who want you to do what protects them. The final decision is whether the deal is so good that you have to comply with unreasonable requirements – just make sure your EMD is safe and you are prepared to close or lose your EMD.

To your limitless success!

Source by Dave Dinkel