My Florida Home Builder

The financial stakes are much higher when you’re dealing with commercial investments rather than residential investments. With such deals, the rewards are greater, but the risk is also. So, it will pay you to understand completely the terms and wording of commercial loan documents. In this article, I’ll provide you with the necessary knowledge of the basic loan forms and language. First, however, you should understand the types of lenders you’ll be dealing with in this market.

Mortgage bankers are the type that represents most commercial lenders. They work on behalf of a fixed number of lenders and usually have a long-standing relationship with them.

The second kind are called “mortgage brokers.” They’re middlemen or “shoppers;” that is, they shop your loan application around to lenders and operate on an individual deal basis.

My preference is to go with mortgage bankers if at all possible. I have this preference for two reasons. One is that mortgage bankers are more likely to be well-connected within the financial community so they’ll be able to steer you to the right person for your project. The second is that they’re usually cheaper than brokers. When using the services of a mortgage broker, you have to pay two fees: one for the broker and one to the lender.

Now, let’s look at the standard commercial loan documents and their wording.

The Promissory Note A promissory note is a written promise to repay the loan. It’s spelled out in specific terms. Terms vary with the particular note, but they generally include the following items: * Date * Borrower and lender names * Address of lender * The principal sum * Interest rate * Term * Place of payment * Terms of repayment * Terms of late payment charges * Promise to pay * Acceleration and pre-payment stipulations * Deed of trust or mortgage attached * Attorney’s fees and other boilerplate items * Signatures and date

Priority of the Loan Priority simply specifies who gets paid first. The lender has “first position.” This is a protection for the lender and means that the lender’s rights are subject only to the payment of real estate taxes. This means the lender has the ability to pay the taxes to protect his or her position.

There are also “junior” positions-second, third, and so forth. If a lender is in second position, then he or she has to bring the loan up to current status or pay it off to eliminate any default on that loan. Priority is determined by the date of recordation.

Securing of the Loan Notes must be secured, and this is done by recording of the mortgage or deed of trust. They’re liens against the property and are security instruments. Recording of a mortgage or deed of trust has two purposes. One, it establishes the priority I mentioned earlier. Two, it makes public the fact that the lien exists. This allows prospective lenders to establish the priority of the lien in regard to any proposed financing.

Whether a mortgage or deed of trust is involved depends on the region of the country in which you live. Eastern states tend to use the traditional mortgage format while Western states tend toward use of the deed of trust. Both are essentially the same; the primary differences lie in who draws up these documents. In mortgage states, an attorney is usually required to prepare the document. In deed of trust states, it can be drawn up by a title company.

Both these non-negotiable security instruments are universal to all real estate property borrowing and are often standardized. They include such information as: * The account number * Borrower’s name and mailing address * Beneficiary’s name and mailing address * Trustee’s name and address * The date * Property description (location, town, county, state, address, etc.) * Note amount * Purpose of the document (”recitals”) * Terms and conditions * Mutual agreements (rights of assignment, damages, trespass, personal guarantees, etc.) * Additional security (if required) * Default provisions and remedies * Recording authority * Successors in interest * Rights of assignment * Signatures and date

Special Provisions Special provisions may be added to the general terms of the mortgage or deed of trust. Here are two examples:

Cross collateralization Assume a borrower has more than one property and offers them as collateral for the loan. In this case, the mortgage or deed of trust is recorded against all these properties. Thus, when any of these collateralized properties are sold, the proceeds go to the lender before any payment is made to the borrower.

Personal guarantee A personal guarantee occurs when the borrower doesn’t have sufficient collateral to secure the note in full. Thus, the borrower is required to guarantee to pay the difference of the short fall. My recommendation is to avoid personal guarantees at all costs since the lender can require you to pay the note in full! Avoid any situation where you may end up without money and are still stuck with the property!

As I stated earlier, this article is intended only as a basic introduction to commercial loan documents. Before engaging in any deals in this market, I recommend you study the documents in detail so you have full understanding of the terms and conditions you’ll have to abide with once you put your name on the dotted line.

Key Concept: Understand completely the terms and wording of commercial loan documents before ever signing them.

Most will remember that when you originally decided to start investing in real estate, one of the best things you were probably instructed to do was formulate a buyers list. This is simply a list of names and contacts that are looking for specific houses or properties. You were told with a good buyers list you may never have to put a property on the open market.

The “Buyers First Program” was designed to take that a step further. Instead of wholesaling to real estate investors with all the associated risks, I chose to work with Real Estate Agents and use the entire MLS as my inventory. I develop a “retail, end buyers list” to give to agents. Buyers First is fully RESPA compliant and is readily accepted by the traditional Real Estate community. You already know that Real Estate Agents only do things that are fully disclosed and traditional in nature. Dealing in the regular real estate arena, it has to be simple and fully compliant or agents won’t participate, and correctly so.

The buyers list should consist of people who are looking for a specific type of property. It may be someone who wants a 3 bedroom 2 bath house in the south part of town. There may be people on the list who are only looking for a certain kind of property at a set price.

Making a list of buyers is easy. One of the best ways to do it is with a three line classified ad promoting a special report titled “You Can Still Purchase a House Even if You Have Bruised Credit but have a Small Down Payment” or “The Seven Questions Every Home Buyer Should Ask A Real Estate Agent.” With that in the local newspaper and a toll free number, you can locate many people looking for a home. Some folks will call and are just curious. The easiest way to handle these people is to allow them to ask questions and answer them to the best of your ability. They usually call back later telling you they are now in the market for a house. Any way you do it, your list is made up by the contacts you make.

You can also gather names from other investors, family, and friends. People know people. Google Ad Words is yet another excellent way. By formulating a buyers list, you can categorize the individuals into groups.

Give the leads to a mortgage broker to pre approve the people on your list. Some people will have credit issues and will be repairing their credit. These are perfect prospects.

Putting together a retail buyers list is a great start on a plan of action. All businesses have a client base. This list is yours. The more you have, the more business you can do. The more you do, the more money you can make. By formulating a buyers list, you are building a strong, stable and long term real estate investment business

Self-directed IRA accounts, also known as checkbook IRA accounts, provide many options for investors. If you want to maximize your retirement account returns, investing in real estate is one of the best ways to go about it.

Real estate investing is a very diversified field, which can stymie some investors when it comes to determining how to invest their money. It needn’t be at all, however. Asking yourself a few questions will help you to quickly put together a real estate investment strategy for your self-directed IRA account funds.

Self-Directed IRAs: 3 Real Estate Investment Strategy Questions to Ask

What type of investor am I? Are you a risk taker, very conservative, somewhere in the middle? Before tapping your self-direct IRA funds to invest in real estate, you need to know what your risk compass is. This will guide you in selecting which type of real estate investment you want to make.

Is retirement looming, or in the distance? This question is designed to highlight which options you can safely take advantage of with your self-directed IRA account funds. Like any other type of investment, some real estate options are riskier than others. The closer retirement is, the less time you have to recover from mistakes. So, you may want to consider safer options like buying and holding property (eg, for rental income).

Retirement Income Needs: Most focus on the big number when they think about their self-directed IRA accounts. Eg, how much do I have/want to have in there? It’s important to break this down into monthly amounts. You should run projects for 20, 25 and 30 years. As in, will how much do I have to have in my account to sustain an income of $5,000/month over 20, 25 or 30 years (maybe even more).

There are quite a few more lessons to add to this list. But answering these three will go a long way towards helping you to formulate an investment strategy for your self-directed IRA account monies.

If you’ll be visiting the Costa Blanca in Spain then the best way to get around is by car. It will give you the ability to come and go as you please and you’ll be able to visit areas that other forms of transportation don’t reach. Don’t think that traveling on a budget prohibits you from renting a car; in many cases it comes out to the same or even cheaper than taking taxis, busses and trains. Here are some tips to renting a car in Costa Blanca.

Rental Locations

If you’ll be arriving by air then you’ll probably be arriving at the Alicante airport. There are several agencies located at the airport including Hertz, Europcar, Avis as well as other Spanish and European rental companies. Renting a car at the airport can be the most convenient especially if you’ll be departing from the Alicante airport.

There are also car rental offices in Alicante as well as other larger Costa Blanca cities such as Benidorm. This may be more convenient for you if you won’t be renting a car until later in your vacation. Prices at some of these in-town agencies may save you money so it’s worth checking into. Many of them offer a drop off and pickup service so it can be just as convenient as renting at the airport.

Booking your Rental

Make sure you reserve a car rental before leaving on holiday. Usually, the further in advance you make your booking, the better deal you will find. Not only will it save you money but during the peak season many agencies will be sold out.

The best place to compare prices is the internet. Websites give you the ability to compare prices and amenities of various agencies during the time you wish to rent. You can also reserve a car through a travel agent which can find you a deal especially if it’s booked as a package with air and hotel. Also look at individual rental websites; some agencies have the best deals on their own sites.

Consider Extras

The price that is quoted to you does not include some other “hidden” costs. This includes taxes and other fees. In most cases you’ll need insurance for your rental. Check beforehand if you think your own insurance or your credit card carries car rental insurance. There are usually different amounts of insurance so think about what you’ll need since sometimes the cost of full coverage can double the rental cost.

Other things to consider are amenities, such as air conditioning and automatic transmission. Air conditioning is a must in the summer months but not necessary the rest of the year. If you don’t know how to drive a manual then make sure you pay the extra for an automatic.

With all of these considerations, it will be well worth the cost. Renting a car is the only way to tour the Costa Blanca.

If you’ll be visiting the Costa Blanca in Spain then the best way to get around is by car. It will give you the ability to come and go as you please and you’ll be able to visit areas that other forms of transportation don’t reach. Don’t think that traveling on a budget prohibits you from renting a car; in many cases it comes out to the same or even cheaper than taking taxis, busses and trains. Here are some tips to renting a car in Costa Blanca.

Rental Locations

If you’ll be arriving by air then you’ll probably be arriving at the Alicante airport. There are several agencies located at the airport including Hertz, Europcar, Avis as well as other Spanish and European rental companies. Renting a car at the airport can be the most convenient especially if you’ll be departing from the Alicante airport.

There are also car rental offices in Alicante as well as other larger Costa Blanca cities such as Benidorm. This may be more convenient for you if you won’t be renting a car until later in your vacation. Prices at some of these in-town agencies may save you money so it’s worth checking into. Many of them offer a drop off and pickup service so it can be just as convenient as renting at the airport.

Booking your Rental

Make sure you reserve a car rental before leaving on holiday. Usually, the further in advance you make your booking, the better deal you will find. Not only will it save you money but during the peak season many agencies will be sold out.

The best place to compare prices is the internet. Websites give you the ability to compare prices and amenities of various agencies during the time you wish to rent. You can also reserve a car through a travel agent which can find you a deal especially if it’s booked as a package with air and hotel. Also look at individual rental websites; some agencies have the best deals on their own sites.

Consider Extras

The price that is quoted to you does not include some other “hidden” costs. This includes taxes and other fees. In most cases you’ll need insurance for your rental. Check beforehand if you think your own insurance or your credit card carries car rental insurance. There are usually different amounts of insurance so think about what you’ll need since sometimes the cost of full coverage can double the rental cost.

Other things to consider are amenities, such as air conditioning and automatic transmission. Air conditioning is a must in the summer months but not necessary the rest of the year. If you don’t know how to drive a manual then make sure you pay the extra for an automatic.

With all of these considerations, it will be well worth the cost. Renting a car is the only way to tour the Costa Blanca.

The real estate market in many places to day is lagging behind the times. It seems that many of the markets that were once major money makers for entrepreneurs are now dying down. But one such region in the United Arab Emirates, Dubai, is looking to be the next big thing in real estate investments.

Not everyone is looking to find opportunistic property just to resell or make a profit off the said property. Some would rather live in a highly popular neighborhood at highly discounted rates. For home owners looking for such a prospect, buying residential land in Dubai can be a very good buy indeed. After all, those who bought land in and around Hollywood at the time where real estate prices were low would be able to attest to the benefits of good real estate purchase decisions.

For investors, Dubai property is just as much of an interest as there is much money to be made in the Dubai real estate market. Dubai properties are expected to rise greatly in cost over the next decade as more and more tourist attractions are created. As more jobs, locations, and houses become in demand, the prices of real estate will skyrocket. For the investors that bought their property at low rates, this will prove to be a very high return on investment.

Investors aren’t only looking to obtain real estate to resell it, however. There is a lot of money to be made in commercial property that is near popular tourist attractions and locations. It is common for even the dullest of businesses to see a wide sales base if they have a prime location at the heart of Dubai. Because this is so, other investors are instead looking to buy commercial properties at cheap prices now to build businesses later to make recurring profits from.

Other investors in Dubai real estate who want to establish a long term income are buying real estate locations in order to develop apartment complexes, duplexes, and other rental and lease properties. When the real estate market reaches an all time high in Dubai, investors will make a massive sum of money on select real estate locations given proper circumstances.

Lastly, property in Dubai is good for an entrepreneur to make a name for one’s self. Since the region of Dubai is going to explode with tourists, businesses, and attractions- the job market will be a large one to fill. With some many jobs to fill, entrepreneurs can get excellent jobs and develop their own plans and ideas to make a huge profit off the success of the Dubai market.

Final Thoughts

In the end, Dubai property is a great investment for commercial investors, home owners, residential landlords, and a wide host of other types that are looking to get a firm profit from the success of Dubai. All that is required is a simple investment- often not much thanks to low prices. Getting in on this market now can mean an easy future for anyone educated enough to know a great opportunity when they see it.

If you are getting prepared to sell a home then you should know that an open house is the best way to show what you have to offer. Buyers love to drive around their favorite neighborhoods or follow their real estate agent in search of their potential dream home. An open house is basically a showroom and should be treated as such. Here are some things for you to keep in mind and consider if you are selling property.

Your home should be spotless so potential buyer can see it at its best. Clean everything including appliances and inside cupboards since buyers like to look at everything. If you’re not a neat freak or you have no time to do a spring cleaning then hire a cleaning service; it will pay off in the long run. If you are living at the property then it’s important to keep the home clean since you never know when the house might be shown.

Offensive odors are a big distraction and will turn away buyers. Take out your garbage regularly and keep your fridge clean. Make sure you remove any offensive odors and if you have pets then try as much as possible to hide signs of a pet from view and smell. Keep you yard free of dog mess and hide litter boxes. Pets may be a turn off to potential buyers if they have allergies.

Another turn off is clutter and if you’re a packrat then this can be a challenge. Not only should piles of clutter be out of sight but also other things that will distract potential buyers. Put appliances in cupboards so there is as much counter space as possible. Remove family photos and other personal effects since you want buyers to envision the home as their own. Don’t shove everything into closets since buyers like to look in closets. This is true for New York or property in Costa Blanca.

To make rooms appear larger, try to remove unessential furniture since buyers are looking for space. If you are planning on getting rid of some things anyway then have a garage sale before you put your house on the market. Otherwise, consider renting a storage unit and putting non-essential furniture there until your home sells.

Be prepared to show your home at anytime and while you may request 24 hour notice, you should know that many sales take place with short notice viewings. If you are serious about selling your home then have your home ready to show. Always be willing to accommodate potential buyers. Again, have your home clean and odor free.

Since people feel uncomfortable about asking questions in front of the owner, it’s a good idea to be away during an open house. If you’re there during the open house or while prospective buyers are there, they won’t take their time and feel comfortable.

Europeans really like to invest money in Costa Blanca real estate. Lots of Europeans have purchased holiday homes along the coast line. The prices can be extremely high in the tourist areas. To get a better value house then you should look in different areas, perhaps those which are not quite as attractive to tourists. You should be able to find plenty of cheaper locations which are still located close to all of the amenities which you need. A quieter location is also much better to help you unwind and relax.

Things to Consider when Purchasing Costa Blanca Real Estate

The first thing that you need to think about whenever purchasing Costablanca real estate is to set a budget. Decide how much you can afford to spend comfortably without overstretching yourself. You should make sure you choose properties which are below your price range.

When you are setting your budget you need to think about all of the costs involved, not just the price of the property. You need to allow for the taxes, lawyer costs and real estate costs. It is vital that you have a Spanish lawyer look over the contracts before signing. Allowing an extra 10% of the property price should be enough to cover these extra expenses.

You should then think about why you are deciding to purchasing the home. How do you intend to use the home. Do you want to use it just for your own vacations? Or do you intend on renting it out to other people to make some extra income? Also think about whether or not you plan on keeping the property for a long or short period of time. By finding the answers to these questions you will be able to decide which property you should purchase.

If you are only planning on using the property for your own holiday needs then you should think about what you personally want. You will be spending lots of time there. You don’t need to only think about the rental value of the property, you also want to enjoy your time spent there.

Check out how close the property is to transportation links. Particularly how close is it to the airport and public transport? Flying into Alicante airport is the most popular route into the country. Having a property close to the airport will make it much more convenient. If you are renting out the property then this is very beneficial.

Finding Costa Blanca Real Estate

There is no doubt that the Costa Blanca location is a very popular tourist destination. Many foreigners own property in this region which is either used for vacations or as an investment. You can find property for sale by looking on the internet. Get an idea of the property prices before you visit the region to look into it.

You should then visit the region off season as well as during the peak season. You want to see what the location is like during the winter. If everything closes down in the winter then you might not like the property.

If you’re an experienced investor, sooner or later you’ll want to seek extra protection for your hard-won investments. This article will cover key strategies for getting that protection. Of course, not every strategy I describe will apply to every situation. In other words, you may not have a use for all of them, but I’m willing to be they’ll come in handy at some time during your investment career.

A Basic Protection-the Memorandum of Option One disadvantage of lease options, in particular, is financial difficulties on the part of the seller, resulting in liens, delinquent property taxes and the like. The result can be the time and expense of getting these issues worked out before the property can be sold.

That’s why you need the Memorandum of Option. It’s an indispensable protection because it’s a public document that’s a record against the title of the property. Always record a memorandum because it lets everyone know that you have an interest in the property.

The memorandum has an important purpose–to prevent an unethical seller from selling the property out from under the investor’s nose to someone else. It also provides protection from bad faith sellers trying to squirm out of their obligations. My advice–always record a memorandum of option!

Advanced Strategy 1-the Deed in Escrow Usually, the term escrow refers to the deposit of funds by one party for delivery to another party upon completion of a specific event or condition.

But, the definition also refers to the deposit of deeds and other written financial/legal instruments. Here’s my suggestion–place the deed in escrow at the same time the memorandum of option is filed. When this happens, the seller signs the deed along with the other contracts. The deed isn’t recorded on the title at this point however; it’s held in escrow by an attorney or title company, and they’re provided with instructions for its release.

You should know that this action doesn’t protect against the filing of liens against the property. However, its effect is to impress upon sellers the fact that they’ve actually sold the property. The result-it creates reluctance on the sellers’ part to attempt to back out on lease option agreements.

This action another benefit for you; it allows you to close on the property without the seller being present! With the deed in escrow, you can then specify how and when the deed is to be released and recorded. The instructions can be simple, such as this example: “When Joanie Jay pays $200,000 in certified funds to Stan Wild, the deed will be released to him. By (date), these funds must be paid.”

Advanced Strategy 2: The Performance Mortgage This is a method whereby the seller pledges the property as collateral for the lease option agreement, ensuring good faith performance by that seller. When the mortgage is assigned to you, it prevents the seller from selling the mortgage to other people. (It replaces the filing of the memorandum of option.)

The performance mortgage allows the seller’s insurance company to put the buyer’s name on the owner’s policy as another insured. It also shows that the buyer is a lien holder and requires that he or she be notified if any type of foreclosure action is taken.

Naturally, some sellers dislike the idea of a performance mortgage and won’t agree to this deal! In the event that a performance mortgage is agreed to, an attorney should review the terminology of the mortgage to make sure the appropriate, specific clauses are included.

Advanced Strategy 3: The Land Trust Land trusts are formed by organizations established to hold land and to administer use of that land. You’ll find that this technique is very useful with subject-to’s because a land trust minimizes your exposure to litigation.

It accomplishes this by hiding true ownership. The actual owner or beneficiary is not recorded in the public records, just the name of the trust. This means potential litigants find it difficult to identify someone to sue.

Keep in mind that land trust contracts tend to be complicated and long so you’ll definitely need an expert lawyer to draw them up.

Advanced Strategy 4: Get Yourself a Seller-Partner There may come a time when you want to consider subject-to high-end properties (in terms of quickly appreciating value). Since there’s more risk involved, it’s a smart idea to spread that risk. You can do this by taking on the seller as a partner. With this arrangement, you and the seller share the profits.

Here’s an example: Assume a property is worth $800,000 and the monthly rental is $3,500. Under normal circumstances, you’d more than likely back away from this deal. However, let’s assume you discover that this home might be sold for $200,000+ in profits. This deal makes good financial sense for you and the seller. So, you agree on a 50-50 partnership (or another percentage arrangement), and you’re both happy.

My recommendation: If you take this course, require that the seller cover all the risks.

Advanced Strategy 5: Refinancing Refinancing is a great tax-deferment strategy. Here’s an example: Assume you have a house worth $300,000, and $230,000 is owed on it. Through a new mortgage, you can take out some or all of the $70,000 in equity, and it’s not a taxable event. The result-you can use that money to reinvest in other properties while still holding on to your original property.

It’s a good idea to check with lenders and brokers in your area to find out what refinancing programs are available and which ones best suit your needs.

Tax Concerns With any of the strategies I’ve just described, IRS regulations have to be met. So, you and your tax person should stay up to date on those regulations. They do occasionally change, and those changes can affect the legality and profitability of deals. One area to really be on top of is capital gains.

Capital gains are the profit on the sale of a property. At present, a person can sell his or her primary residence (the one actually lived in, not investment properties) every two years.

If you’re single, you can keep the profits up to $250,000; if you’re married, you can keep up to $500,000. In both instances, the profits are tax free. If the seller of a property lives in his or her home for two out of five years, then that property qualifies for a tax-free gain. The seller can rent the home out for three years - and not a single day more.

My Advice Never stop learning! Keep advanced strategies in mind as you grow your investment portfolio. It’s not likely you’ll need them for the majority of investments (especially early in a career), but, as is often said, knowledge is power. With that knowledge, you’ll be able to apply it quickly and easily when the right investment situation arises.

Key Idea: Always get the Lender’s written permission first. Study advanced strategies diligently, so you can make use of them at the appropriate time for maximum protection of your investments.

This article explains advanced strategies for well-experienced real estate investors who want extra protection for their investments. Keep in mind that the strategy chosen will depend on the type of investment strategy followed. In other words, not every strategy applies to a particular situation. Also, they some solutions may not be ones an investor commonly used. However, knowledge of those solutions may come in handy in the future.

A Basic Protection-the Memorandum of Option One disadvantage of lease options, in particular, is financial difficulties on the part of the seller, resulting in liens, delinquent property taxes and the like. The result can be the time and expense of getting these issues worked out before the property can be sold.

One basic protection for you is the “memorandum of option.” This document is a record against the title of the property and definitely should be recorded. It lets the public know that you have an interest in the property.

The purpose of the memorandum is to prevent an unethical seller from refinancing and selling the property to someone else. It also provides you protection from bad faith sellers who try to squirm out of their obligations. With lease options, always record a memorandum of option!

Advanced Strategy 1-the Deed in Escrow Usually, the term escrow refers to the deposit of funds by one party for delivery to another party upon completion of a specific event or condition.

But, the definition also refers to the deposit of deeds and other written financial/legal instruments. Here’s my suggestion–place the deed in escrow at the same time the memorandum of option is filed. When this happens, the seller signs the deed along with the other contracts. The deed isn’t recorded on the title at this point however; it’s held in escrow by an attorney or title company, and they’re provided with instructions for its release.

Now, this action doesn’t protect against the filing of liens against the property. But, its effect is to reinforce to sellers that they’ve actually sold the property. This, in turn, creates reluctance on their part to try to back out on a lease option agreement.

It also has another advantage: It allows you to close on the property without the seller being present! With the deed in escrow, you should specify how and when the deed is to be released and recorded. The instructions can be simple, such as this example: “When Sam Smith pays $200,000 in certified funds to John Jones, the deed will be released to him. By (date), these funds must be paid.”

Advanced Strategy 2: The Performance Mortgage With this method, the seller pledges the property as collateral for the lease option agreement, and, therefore, ensures good faith performance by that seller. Once the mortgage is assigned to the buyer, it prevents the seller from selling the mortgage to other people. (It replaces the memorandum of option filing.)

The performance mortgage permits the seller’s insurance company to put the buyer’s name on the owner’s policy as another insured. It shows as well that the buyer is a lien holder and requires that he or she be notified if any type of foreclosure action is taken.

I’m sure it’s no secret to you that many sellers dislike the idea of a performance mortgage and won’t agree to such an arrangement! However, if you do find a customer who agrees, your attorney should review the terminology of the mortgage to make sure the appropriate clauses are included.

Advanced Strategy 3: The Land Trust Land trusts are formed by organizations established to hold land and to administer use of that land. You’ll find that this technique is very useful with subject-to’s because a land trust minimizes your exposure to litigation.

It achieves this by hiding true ownership. The actual owner or beneficiary is not recorded in the public records, only the trust’s name. In other words, it’s difficult to get sued because litigants find it hard to identify anyone to sue.

Keep in mind that land trust contracts tend to be complicated and long so you’ll definitely need an expert lawyer to draw them up.

Advanced Strategy 4: Get Yourself a Seller-Partner There may come a time when you want to consider subject-to high-end properties (in terms of quickly appreciating value). Since there’s more risk involved, it’s a smart idea to spread that risk. You can do this by taking on the seller as a partner. With this arrangement, you and the seller share the profits.

Here’s an example: Assume a property is worth $800,000 and the monthly rental is $3,500. Under normal circumstances, you’d more than likely back away from this deal. However, let’s assume you discover that this home might be sold for $200,000+ in profits. This deal makes good financial sense for you and the seller. So, you agree on a 50-50 partnership (or another percentage arrangement), and you’re both happy.

My suggestion: If you use this method, insist that the seller cover all the risks.

Advanced Strategy 5: Refinancing Refinancing is a great tax-deferment strategy. Here’s an example: Assume you have a house worth $300,000, and $230,000 is owed on it. Through a new mortgage, you can take out some or all of the $70,000 in equity, and it’s not a taxable event. The result-you can use that money to reinvest in other properties while still holding on to your original property.

Check with lenders and brokers in your area to find out what refinancing programs are available.

Tax Concerns With any of the strategies I’ve just described, IRS regulations have to be met. So, you and your tax person should stay up to date on those regulations. They do occasionally change, and those changes can affect the legality and profitability of deals. One area to really be on top of is capital gains.

Capital gains are the profit on the sale of a property. Currently, a person can sell his or her primary residence (the one actually lived in, not investment properties) every two years.

If you’re single, you can keep the profits up to $250,000; if you’re married, you can keep up to $500,000. In both instances, the profits are tax free. If the seller of a property lives in his or her home for two out of five years, then that property qualifies for a tax-free gain. The seller can rent the home out for three years - and not a single day more.

My Advice Never stop learning! Keep advanced strategies in mind as you grow your investment portfolio. It’s not likely you’ll need them for the majority of investments (especially early in a career), but, as is often said, knowledge is power. With that knowledge, you’ll be able to apply it quickly and easily when the right investment situation arises.

Key Point: Make certain you get the lenders permission! Study advanced strategies in depth, so you can make use of them at the appropriate time for maximum protection of your investments.