There have been only a few options for individual needing to access the equity in their home.  If one needs investment capital for a “can’t pass up” deal, but don’t want to borrow more money.  According to Dean Foust of Business Week, there’s A New Way to Extract Equity from Your Home.  If one has a mortgage for less than 67% of the value of the house, one may qualify for a REX™ Agreement. This new service called Real Estate Exchange (“REX”) that will typically provide cash up to 15% of the equity in the home.  Instead of charging you interest and principle payments, an equity position (up to 52%) in the equity of your home it taken with the Agreement.

This program will “partner up” with individuals on a new house or a residence already owned and shares in the appreciation or depreciation of the house. REX™ Agreements are only for primary, owner-occupied residences.  It is not for rental or investment properties.

The contract can be written in REX™ Agreement for up to 50 years, and it ends at the earlier of the expiration date or when the house is sold. When buying a house, the funds can be used towards the down payment, and if the house is already owned, the money can be used for whatever purpose the homeowner chooses.

There’s no minimum income or assets requirement, but the credit requirement is a credit score of at least 680.  If you want to terminate the agreement, you can “buy out” the REX™ Agreement for the appreciation or depreciation difference at the time of the buyout.

According to Brooke Southall, in InvestmentNews, consumers don’t pay taxes on the money that they receive from a REX™ Agreement, and many use the funds to hedge their investments from just real estate. As the article says “In 90% of the cases, customers used fund received to reinvest in securities or additional real estate.

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There are many things to consider when choosing a contractor.  I am sure we have all either had a negative experience with a contractor or have heard horror stories about someone else’s experience.  Finding an honest and trustworthy contractor who meets deadlines is a needed component to your real estate arsenal.  Unless you know how to do all the rehab work yourself and strictly aim to invest in the area you live.  This is something one should spend adequate time doing.   Find and develop a good business relationship with a contractor who has the above qualities.

A quality contractor will welcome bids on a job.  He will give you his bid and justify it.  I have not always gone with just price.  There are other value added services a quality contract will provide, and he knows it.

He will guarantee the quality of his work.  If the work does not pass inspection, a good contractor will usually redo anything that is not up to code that he was responsible for fixing originally at no additional cost.

Once a business relationship is developed, a quality contractor will offer a thirty-day net or grace period to pay invoices.  I would be very suspect of one that wanted all the money upfront.  I would even think twice if one asked for fifty percent to start the job.  Everyone needs to protect themselves in business, but if you check out financial and have equity in your property, there is little risk for the contractor.

Should you always use the same contractor?  I will take that up next time.  If you have an opinion, please let me know.

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As a beginning investor, I was lucky enough to work with a buyers agent.  Have you every heard of a Buyers Real Estate Agent?  Well, there was a lot of competition for listing in California in the late 1980s and these types of agents we not popular, but you could find them.  Or better yet, they could find you.  This particular agent advertised in the newspaper.  He simply stated he would help one find the house that was right for them whether they were a first-time homebuyer or investor.  He stated he would provide his services free of charge.

Later, I got to know him rather well.  We collaborated on business ventures and even partnered on a transaction.  When asked him he used this approach to find clients.  He stated that in actuality the seller of the property paid the real estate commissions.  That the competition for listings was very competitive thus he wanted to choose the road less traveled.  He also felt that having the buyer in any given transaction was most important.  If he had buyers he believed he could always find them a property.

I was very fortunate to work with such a competent and creative real estate agent in the early years of my investing career.  Are their still agents that focus on catering to the buyer?  I have not met any recently; maybe I will meet more in the months to come.

David Bach provides 3 Basic Rules for Hiring a Great Real Estate Agent, and The Big Picture provide some statistical data concerning the number of Real Estate Agent in A Bull Market of Real Estate Agents.

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With recent reports of even higher mortgage defaults, there is an interesting opportunity for real estate investors. The writing in on the walls so to speak but will we listen. There was a very timely article written about How Toxic is Your Mortgage? Some people have refinance to get from under the adjustable mortgage rate loans they took while being attracted to low teaser adjustable rates.

Now, the default rate is high. On Tuesday, March 13, 2007. The anxiety over mortgage lenders, particularly the sub prime lenders that make loans to people with poor credit, pushed The Dow Jones down by more than 240 points according to stock market experts. This is the second-biggest drop in nearly four years.

As an investor, should you buy, sell, refinance or build? Let us know your thoughts.

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What is your pleasure?  There are Real Estate Investors that love to flip and those who love to rent.  Those that live for the ‘big hit’, you know, the homerun, and those would want ‘residual income’ from rental properties.  Now, I don’t have anything against either.  Personality will play a big role in what type of investor you are or will become.

Speaking from personal experience, I have found it hard to focus on both at the same time.  I have done both, but have either focused on one or the other.  One thing you want to make sure to avoid if you decide to flip is a Flipping Scam that has victimized new investors.  Currently, I’m a Landlord, but I’m dreaming of flipping again.  What type of Real Estate Investor are you?

Popularity: 60% [?]