An Expired Listing Letter Will Make Your Phone Ring

An Expired Listing Letter can help you generate more leads, get more listings and make more sales. It's a fact that many top producing agents can validate. However, do not expect an agent in your market to actually do it, because doing so could ruin their business.

On the other hand I have nothing to lose by sharing this commonly known but underutilized tool with you. Post why? Because chances are we're not in direct competition with one another. So, if you are not conducting a letter writing campaign you should think about it.

5 Reasons For Starting an Expired Listing Letter Campaign Today

1) Expired listing campaigns are effective lead generators and when using them you can expect to generate listings on a consistent basis. So, let me ask you a question. How many listings are you currently generating on a weekly basis? That's what I thought. Want more? Then target expired listings … and start today.

2) Every letter you mail is highly targeted and goes to someone known to be interested in selling their home; someone who may be more motivated to sell when they list with you than they were during previous listings. In fact, not only can you expect the owners of expired listings to price their homes competitively, you can insist on it.

3) Farming expired listings is easy to do and a good letter makes it even easier. Mail ten letters a day, which takes on average less than thirty minutes, and you'll quickly be on your way to a renewable source of leads.

4) When you place a "For Sale" Sign & Rider on an expired that you convert to a new listing it'll enhance your stature as a successful agent in your community. Every passerby, property owner, renter, visitor and investor in the neighborhood will potentially look to you as an agent to do business with – and that will generate even more leads, listings and sales.

5) Finally, an expired letter writing campaign can also generate investment opportunities. Sometimes owners are willing to sell in a hurry, thereby creating attractive investment opportunities. You can establish relationships with real estate investors to buy some of the homes you list, or potentially line up investors to finance your purchase of them.

The Sound of Success

So, do not procrastinate. Get yourself an Expired Listing Letter set and start mailing letters today. And when you do know that your phone will start ringing and when it does be assured that callers will be wanting to do business with you. Can you ask for anything better?

Source by Lanard Perry

How Important Are Financial Data Providers To Investors?

Financial investments are big investments that require thorough monitoring and keeping up with the latest to gain profits at the end of the day. There is no way you can invest and take a back seat and still expect to reap great results from your investment. Financial trading means knowing everything that is happening in the financial markets and making the right decision depending on the current situation to get the most from your investment. It can be a lot of work but fortunately there are so many sources you can use to make sure you are updated on the latest in the financials.

Financial data providers make very good bridges between you and the world financials. The data providers simply equip you as a trader with the proper tools to help you make the best investment decisions you can make. They make it simple for you to analyze the most important financial data and market trends so you are able to make important moves at the right time to favor your investment. Considering that opinions and news can highly influence stock prices, you are better placed working with a good financial data provider.

The truth is that the opinion and news that people read shapes public perception and public perception has a huge role to play in influencing the stock prices. This makes data analyzing very important to traders. The best thing about modern times is that social media offers a great platform for keeping up with what's happening. Financial data providers use social media too to get the opinions and news on the latest happenings; hence when using their services you can be sure that you will never miss out on important information that can impact your investment.

The best data providers offer the data to larger financial institutions and hedge funds through data feeds that are customizable and also offer the services to organizations and individuals as a service on software. This means that you are covered by the services, whichever kind of a trader you are.

Choosing Your Financial Data Provider

You want to have the best experience when getting your data analysis. For this therefore, make sure you choose a provider with a user friendly interface to give you an easy time understanding the data provided. For instance, a good provider should be in a position to break down the data in terms of velocity, impact, volume and sentiments for news you are interested in and be able to display this in a dashboard view that makes it easy for you to digest and understand everything. When looking for the best, it is also helpful to consider service pricing details and the available plans so you can gauge whether it is the best for your expectations.

You should also consider what features the provider has on the data platform and how important the features will be in helping you make the right moves and decisions. You should get feeds in real time for the services to be beneficial.

Source by Jovia D'Souza

Tax Deed Investing – What is an "Upset" Sale?

In Pennsylvania, some counties have two different tax sales; the "upset" sale, and the "judicial" sale. If tax sale properties are not sold at either of these two sales, the property then goes on the "repository" list and can be sold by private bid. The upset sale is held every year in the fall. It's called an "upset" sale because the minimum bid for the properties in this sale is known as the "upset" price; which includes any unpaid taxes from the county as well as any municipal liens. If a property is not sold in this sale, it is sold in the "judicial" tax sale in the spring. Not all Pennsylvania counties have judicial sales but they all have an upset sale.

What you may not know about the upset sale is that all properties are sold subject to any liens or judgments. That means that if you purchase a tax deed at this sale, you are responsible for any other unpaid liens or judgments on the property. Most people assume that when they buy a property at a tax sale, they do not have to worry about other liens such as a mortgage. This is not true at the upset sale. If you plan on bidding at any of these sales this fall, you'd better do your homework!

So how do you find out about other liens or judgments on tax sale properties? There are two ways that you could do this; one is going to cost you some money and the other is going to take some of your time. The first way is to hire a title search company to do a simple title search on all of the properties in the sale that you are interested in bidding on. This could turn out to be a little costly, so it's not my method of choice. Another reason why I do not hire a title search company to do title searches for me before the sale is that many of the properties will come off the sale list the day before or the morning of the sale. You may pay for a few title searches that you do not even need because the properties that you wanted to bid on are not sold at the sale.

Last time I went to the Monroe County Upset Sale, I did not even bid on any properties. I researched about 10 of the properties in the sale that were in an area that I was interested in. Through my research I narrowed this down to only two properties that I wanted to bid on. I did all of my research the day before the sale and I had checked that morning to make sure that all of these properties were still in the sale. But by the next morning (the morning of the sale) the two properties that I was interested in had paid and were no longer included in the sale. I'm glad that I did my own research and did not pay a title company to do it!

That brings us to the second method for finding out about liens and judgments on tax lien properties, and that is to do it yourself. There is a little bit of education and some time involved, but it is well worth it. In most states, to do this type of research you would go to the County Hall of Records. In Pennsylvania the office that has the records that you need to search is the office of the Prothonotary. The people in this office are usually very helpful and will help you to look up what you need to know. You'll have to look for liens and judgments by the name of the owner. If there are co-owners or joint owners, you will want to search under both names.

Keep in mind, however, that if new liens were not yet recorded they could slip through the cracks in the system and you will not be able to find them. There is always some degree of risk when you buy a tax deed, even if you are careful and do your homework. This is why it is always recommended that you do not buy tax deeds in your own name, but in the name of a separate entity. It could be a corporation or an LLC. If you need help forming a corporation or LLC for the purpose of buying tax deeds, I know of two excellent programs to help you. They were both created by Darius Barazandeh, Texas attorney and tax deed expert.

Source by Joanne Musa

Revenue-Based Financing for Technology Companies With No Hard Assets

WHAT IS REVENUE-BASED FINANCING?

Revenue-based financing (RBF), also known as royalty-based financing, is a unique form of financing provided by RBF investors to small- to mid-sized businesses in exchange for an agreed-upon percentage of a business' gross revenues.

The capital provider receives monthly payments until his invested capital is repaid, along with a multiple of that invested capital.

Investment funds that provide this unique form of financing are known as RBF funds.

TERMINOLOGY

– The monthly payments are referred to as royalty payments.

– The percentage of revenue paid by the business to the capital provider is referred to as the royalty rate.

– The multiple of invested capital that is paid by the business to the capital provider is referred to as a cap.

CASE STUDY

Most RBF capital providers seek a 20% to 25% return on their investment.

Let's use a very simple example: If a business receives $ 1M from an RBF capital provider, the business is expected to repay $ 200,000 to $ 250,000 per year to the capital provider. That amounts to about $ 17,000 to $ 21,000 paid per month by the business to the investor.

As such, the capital provider expects to receive the invested capital back within 4 to 5 years.

WHAT IS THE ROYALTY RATE?

Each capital provider determines its own expected royalty rate. In our simple example above, we can work backwards to determine the rate.

Let's assume that the business $ produces 5M in gross revenues per year. As indicated above, they $ received 1M from the capital provider. They are paying $ 200,000 back to the investor each year.

The royalty rate in this example is $ 200,000 / $ 5M = 4%

VARIABLE ROYALTY RATE

The royalty payments are proportional to the top line of the business. Everything else being equal, the higher the revenues that the business generates, the higher the monthly royalty payments the business makes to the capital provider.

Traditional debt consists of fixed payments. Therefore, the RBF scenario seems unfair. In a way, the business owners are being punished for their hard work and success in growing the business.

In order to remedy this problem, most royalty financing agreements incorporate a variable royalty rate schedule. In this way, the higher the revenues, the lower the royalty rate applied.

The exact sliding scale schedule is negotiated between the parties involved and clearly outlined in the term sheet and contract.

HOW DOES A BUSINESS EXIT THE REVENUE-BASED FINANCING ARRANGEMENT?

Every business, especially technology businesses, that grow very quickly will eventually outgrow their need for this form of financing.

As the business balance sheet and income statement become stronger, the business will move up the financing ladder and attract the attention of more traditional financing solution providers. The business may become eligible for traditional debt at cheaper interest rates.

As such, every revenue-based financing agreement outlines how a business can buy-down or buy-out the capital provider.

Buy-Down Option:

The business owner always has an option to buy down a portion of the royalty agreement. The specific terms for a buy-down option vary for each transaction.

Generally, the capital provider expects to receive a certain specific percentage (or multiple) of its invested capital before the buy-down option can be exercised by the business owner.

The business owner can exercise the option by making a single payment or multiple lump-sum payments to the capital provider. The payment buys down a certain percentage of the royalty agreement. The invested capital and monthly royalty payments will then be reduced by a proportional percentage.

Buy-Out Option:

In some cases, the business may decide it wants to buy out and extinguish the entire royalty financing agreement.

This often occurs when the business is being sold and the acquirer chooses not to continue the financing arrangement. Or when the business has become strong enough to access cheaper sources of financing and wants to restructure itself financially.

In this scenario, the business has the option to buy out the entire royalty agreement for a predetermined multiple of the aggregate invested capital. This multiple is commonly referred to as a cap. The specific terms for a buy-out option vary for each transaction.

USE OF FUNDS

There are generally no restrictions on how RBF capital can be used by a business. Unlike in a traditional debt arrangement, there are little to no restrictive debt covenants on how the business can use the funds.

The capital provider allows the business managers to use the funds as they see fit to grow the business.

Acquisition financing:

Many technology businesses use RBF funds to acquire other businesses in order to ramp up their growth. RBF capital providers encourage this form of growth because it increases the revenues that their royalty rate can be applied to.

As the business grows by acquisition, the RBF fund receives higher royalty payments and therefore benefits from the growth. As such, RBF funding can be a great source of acquisition financing for a technology company.

BENEFITS OF REVENUE-BASED FINANCING TO TECHNOLOGY COMPANIES

No assets, No personal guarantees, No traditional debt:

Technology businesses are unique in that they rarely have traditional hard assets like real estate, machinery, or equipment. Technology companies are driven by intellectual capital and intellectual property.

These intangible IP assets are difficult to value. As such, traditional lenders give them little to no value. This makes it extremely difficult for small- to mid-sized technology companies to access traditional financing.

Revenue-based financing does not require a business to collateralize the financing with any assets. No personal guarantees are required of the business owners. In a traditional bank loan, the bank often requires personal guarantees from the owners, and pursues the owners' personal assets in the event of a default.

RBF capital provider's interests are aligned with the business owner:

Technology businesses can scale up faster than traditional businesses. As such, revenues can ramp up quickly, which enables the business to pay down the royalty quickly. On the other hand, a poor product brought to market can destroy the business revenues just as quickly.

A traditional creditor such as a bank receives fixed debt payments from a business debtor regardless of whether the business grows or shrinks. During lean times, the business makes the exact same debt payments to the bank.

An RBF capital provider's interests are aligned with the business owner. If the business revenues decrease, the RBF capital provider receives less money. If the business revenues increase, the capital provider receives more money.

As such, the RBF provider wants the business revenues to grow quickly so it can share in the upside. All parties benefit from the revenue growth in the business.

High Gross Margins:

Most technology businesses generate higher gross margins than traditional businesses. These higher margins make RBF affordable for technology businesses in many different sectors.

RBF funds seek businesses with high margins that can comfortably afford the monthly royalty payments.

No equity, No board seats, No loss of control:

The capital provider shares in the success of the business but does not receive any equity in the business. As such, the cost of capital in an RBF arrangement is cheaper in financial & operational terms than a comparable equity investment.

RBF capital providers have no interest in being involved in the management of the business. The extent of their active involvement is reviewing monthly revenue reports received from the business management team in order to apply the appropriate RBF royalty rate.

A traditional equity investor expects to have a strong voice in how the business is managed. He expects a board seat and some level of control.

A traditional equity investor expects to receive a significantly higher multiple of his invested capital when the business is sold. This is because he takes higher risk as he rarely receives any financial compensation until the business is sold.

Cost of Capital:

The RBF capital provider receives payments each month. It does not need the business to be sold in order to earn a return. This means that the RBF capital provider can afford to accept lower returns. This is why it is cheaper than traditional equity.

On the other hand, RBF is riskier than traditional debt. A bank receives fixed monthly payments regardless of the financials of the business. The RBF capital provider can lose his entire investment if the company fails.

On the balance sheet, RBF sits between a bank loan and equity. As such, RBF is generally more expensive than traditional debt financing, but cheaper than traditional equity.

Funds can be received in 30 to 60 days:

Unlike traditional debt or equity investments, RBF does not require months of due diligence or complex valuations.

As such, the turnaround time between delivering a term sheet for financing to the business owner and the funds disbursed to the business can be as little as 30 to 60 days.

Businesses that need money immediately can benefit from this quick turnaround time.

Source by Kris Tabetando

Advantages And Disadvantages Of Using the Put Call Ratio

In this article we'll review some of the major advantages and disadvantages of using the put call ratio to help anticipate market turns and trends.

Let's start with the pros.

The principal point favoring the use of the put call ratio is that it allows investors to quantify and plot market sentiment, which many investors consider the primary market catalyst.

A second point in favor is that the options data used to calculate the ratio is easy to find and is available to anyone with an internet connection.

The third supporting point is that, because historical data is rather abundant, the ratio can be charted easily using most major trading platforms or charting packages.

The fourth point in support of the put call ratio is that it is an easy concept to grasp for even the beginner trader or investor.

And last (although not necessarily least) the fifth point in support is that it's a contrarian indicator and can help investors anticipate market moves ahead of the crowd. Other indicators rely on data that wil cause investors to "follow" the herd.

And now, for balance, the cons.

The primary point against using the put call ratio is also one of the strengths outlined above – it's simple. Because the ratio is a simple calculation, it does not always describe important nuances of market sentiment.

The second point in contra is that most people calculate the ratio using options volume, which does not take into account that most investors make decisions on the dollar amounts investors and not quantity of contracts. A dollar-weighted ratio can resolve this issue.

The third point in contra is that the ratio must be used in conjunction with other indicators and not as a stand-alone signal generator.

A fourth negative point is going to be that not all stock issues have options available. It's, therefore, impossible to calculate a Put Call Ratio for many stocks.

And the 5th and final consideration against using the ratio is that, even if a stock has options available, there must be enough volume activity for the ratio to be meaningful.

So there you have it, the pros and cons of using the put call ratio to identify market opportunities.

Within a final analysis, is following the put call ratio a good idea or a bad idea?

Like so many market indicators, it's good to follow this ratio but with the caveat that it has its limitations and must be used in conjunction with other indicators.

Source by David P James

Online Forex Trading – A Great Way To Make Money

For a long time, little was known about online Forex trading. Mostly wealthier individuals and companies were the only ones investing because large amounts of money are needed to invest in order to actually make a profit. Now, however, many individuals are becoming interested in the online Forex trading market because it is an easy way to make money.

A person can invest a smaller amount of money than larger companies and still make a small profit. They then choose to invest the same amount of money in addition to the profit they just made, and slowly work on building up their money so that they can invest larger sums of money.

In order to trade in the Forex market, one must open up an account for the market, and having a broker is a necessity. There are several articles available online that can help individuals figure out all of the details about how to choose a broker and what they need to consider when opening up an account.

For example, many brokers charge fees. For most, there is a fee for every single trade. This is relatively insignificant when a person is only interested in investing a small sum of money, and then letting it sit for a while. If a person only plans on making a few trades, this probably does not seem important.

On the other hand, many investors like to jump right in, or they wind up making more trades over time, they will need to take this into consideration to make sure that they do not wind up losing money.

The online Forex market is a great way to make money, but it can also be a quick way to lose money as well. If a person makes the wrong trade or does not understand how the market works, they can quickly wind up with almost no money.

This is one of the most important reasons that individuals are encouraged to read as much as they can about this form of investing before taking the steps to open an account. There are several software programs available that are becoming increasingly popular as more individuals are choosing to jump into the market.

These programs help keep an eye on the market, and can then let individuals know when is the best time to make a trade. Most of them include data tools that are used to formulate reports about the market and can help identify market trends. Some even take things a step further by having the option to make a trade for users.

With these programs, the users have to do almost nothing. They simply install the program, set the settings, and then decide whether they are comfortable with the robot making the trades for them. It can really be that simple.

Online Forex trading continues to increase in popularity among the average joe now that the internet allows any person to trade one currency for another. The invention of the internet has opened up this opportunity to allow every individual to enjoy making money through this market, and software programs continue to make it easier than ever before.

Source by Yamileth Castillo

Equity Method Accounting Makes a Big Difference

Equity method accounting is used when an investing company owns stocks of another affiliate company. There are several different ways of accounting for this ownership, but this method is perhaps the most popular.

Equity method accounting factors in the increase or decease in profits of the invested company. These differences are usually unrealized and not actually obtained by the investing company. The increase or decease is, of course, calculated on the percentage of stocks owned and does not account for dividends paid. For example, if an investor owns 100 shares of an affiliate's stock. And if that stock increases 10%, only those 100 shares will reflect the 10% increase. The investing company will then record that increase as profit on their ledger.

Before going further, it is important to note that if a parent company owns over 50% of a subsidiary company, equity method accounting is not allowed. Consolidated companies are required to combine the financial figures into one statement for the group of entities.

This information, found through equity method accounting, can be very helpful to a company. If understood correctly, the profits or losses of affiliate companies can help forecast the total equity of the company. This total equity can show trends of upward or downward value of the investing company.

If this information is wrongly considered, the effects can leave the company high and dry. Dry, in this case, meaning out of money. If the profits found with the equity method are considered physical liquid assets, the company's operating capital will be wildly off the mark. This is why it is very important to understand that equity method accounting determines value of investments, but rarely shows finances that can be readily used.

Equity method accounting highly increases the appearance of financial standing. Including all investment gains as profit really boosts the income side of the balance sheet. A major advantage to padding this stat is the likelihood of getting loans, raising capital, or getting investors.

Just think, as a loan officer, if a company showed records of $ 100,000 in profits instead of $ 75,000. That makes a big impact on whether or not to give a loan and how much to loan out. This scenario works the same for the decision of an outside investor or joint venture opportunity.

Other factors exist as to whether or not an investing company uses equity method accounting or not. There are tax requirements for the amount of investment in the affiliate company. If the investor has significant influence or not and the percent of ownership plays a role in using this method of accounting as well.

Source by Joe Coffee

Real Estate Investment Trust Versus RELPs: An Overview

Many people are sometimes confused about the difference between REITs and RELPs. RELPs, or Real Estate Limited Partnerships are a kind of syndication that possess many of a REIT's benefits.

These benefits include (potentially) financial rewards, investment security (potentially, once again) and, ideally, tax savings. The General Partner is the party responsible for the strategy, execution and day-to-day operations of the RELP, and whose responsibilities are comparable to those of a trustee of a REIT. The General Partner enjoys all decision-making responsibilities for the investment, and also assumes liability for it.

The other partners in the group are Limited Partners. These are the investors, and their status as limited partners means their financial obligation is limited to whatever amount they chose to invest at first – they do not have to worry about anything else. Just like with REITs, the Real Estate Limited Partnership investor is spared management responsibilities, and is relieved of liability for principal debt. And, just like a REIT, in many cases RELPs allow cash investments of any size.

Unlike Real Estate Investment Trusts, however, which offer long-term investment in a diversified portfolio of properties, and are also extremely easy to cash in, a RELP) is often used for projects that last for shorter terms. Also unlike REITs, RELPs often do not distribute cash until the end of the investment, and properties usually do not immediately generate revenue (which is one way REITs generate regular distributions. And if Limited Partnership vehicles did create revenue, the cashflow would probably be put to best use funding the projects' construction or redevelopment.

Once the development or renovation is complete, however, the value of the property will often be significantly higher than that of the initial investment. RELPs generally provide higher yields over the short term, and unlike REITs, RELP investments are generally not redeemable before a predetermined "liquidity event". In most cases any profit would be disbursed to the Limited Partners.

In summary, the main difference between Limited Partnerships and Investment Trusts is that the former are short-term investment vehicles with no payouts during the term of the scheme. However, both are considered to be a high-growth form of investment, and experience little if any of the ups and towns commonly found in the stock market.

This was just a short comparison between REITs and RELPs. Group-owned real estate investing is a big subject, and I look forward to exploring it with you in a future article.

Source by Bob Kawasaki

How to Avoid an Investment Property Scam

This article was first published in May 2006 as a warning to potential investors to take care when committing to property investments. Hundreds of investors actually signed up with us, and are taking part in a joint legal action, but many more, including many of the leading banks, some now in government hands, went on to get involved in hundreds more bad deals, and are counting the costs in millions!

For those of you that saw the Sunday Times front page article 'Buy To Let Property Fraud Hits Thousands' the week before Christmas 2008 will have seen the latest results of that misdemeanour, and the losses and heartaches this widely spread property fraud had on investors an f their families.

To many people, taking the plunge, and investing in property for their future is a major leap of faith. Imagine how they must feel, if their investment turns out to be an investment property Scam?

Is there a way out of any Investment Property Scam?

The first thing to realise is that if you do feel you have been conned, you are probably not the only one. It may feel like it, and you may feel alone, stupid, cheated, and angry or embarrassed – some of the common emotions felt at this time.

But, these are the emotions that developers with crooked minds will encourage you to think. They hope that you will feel 'suckered', and just do not want to tell anybody. In fact, with a clever scam, there may seem to be nothing to tell anyway, apart from your gut instinct, until you start digging.

But inertia is just what these criminals (and they usually are criminals) want you to think. In these circumstances, you must not hold it all into yourself. You must try and find if other people have been duped into a similar situation. You never know, you may be one of ten, twenty or hundreds of similar souls, and if you can find, and become identified with such groups you will stand a far greater chance of getting retribution, believe me.

I got caught up in such an investment property scam about 18 months ago (I know – gasp – shock – horror – and I sell investment properties!). For some months, I thought I was going crazy, I could not understand why I could not get tenants in at anywhere near the prices I was expecting, or even get tenants at all. This was the first revelation, as I had been promised that the properties would have been fully tenanted on completion. Well, at least, that's what the brochures said, as well as the sales manager at the presentation I attended. And I had bought a number of these 'beauties' each supposedly fully tenanted and making me around £ 500 each per month rental surplus.

Then I started to investigate the situation more thoroughly, and I soon identified the problem. It's a down and out highly complex investment property Scam!

So how did I, an experienced property investor, and a reseller of investment properties – get involved in an investment property scam?

I'll tell you how – perhaps Criminal Intent?

What I have done is to chronicle the events that actually took place with my investments, of which I have since found out there were well over 100 similar incidents.

Before I went into this investment, or even recommended them to others, which consisted of a number of refurbished houses converted into HMO's for students (Houses of Multiple Occupation) I investigated the company thoroughly. (Note the company and location of these houses is not mentioned in this report for legal reasons). I checked out at least 6 of their property conversions, spoke to their rentals people, and spoke with several existing investors. I took my business partner at the time with me to check out my findings. I was also comforted by the fact that these people were spending (and still are spending) a lot of money in the big national newspapers (Sunday Times, Telegraph, and so forth), and had produced a whole range of glossy brochures backing up their claims.

Some of their larger off-plan developments were also being featured in a two-page spread in one of the UK's leading property magazines. Not only that, but they had (and still do have) very large exhibition stands at a number of the leading UK Property Shows.

Everything seemed to stack up, so I bought a number of them, and encouraged my friends, close family, and business colleagues to buy some also. I paid my reservation fees, and just settled down to wait for these to be completed, and to start generating some surplus cash every month.

The first event in the chain of things was that the houses were very late in being completed, so we were in danger of losing the student intake for autumn 2005, but the investment still seemed quite good, and anyway we had all exchanged contracts by then . And, of course, we all thought we had at least an 11% equity holding in each property, plus the usual growth of 4-6% from last year. Also, when asked if we could inspect them prior to completion, we were told – "Sorry, as you have tenants in them, you have to give 48 hours or more notice". Then when we did try for appointments nobody could find the keys … Where were my alarm bells I hear you ask – Obviously on Silent Mode!

But then the dirt really started to rise to the surface …

These houses were all sold under the premise of 'All contacts for services under one roof for the investor – Use our Services for Sales, Recommended Solicitors, In-house Brokers, mortgages, Tenancy Management from our Own Company' – you know, a really good packaged deal for the armchair investor. '

Issue 1 was that the houses were not fully tenanted on completion, and in a lot of cases, the tenants seemed to 'melt away' after contracts had been signed. So much for the promises made in the developers' glossies that tenants would be in place before completion, with cross-guarantees so that there would be virtually no void periods, no issues with rent, as if one tenant failed to pay, the cross guarantees meant that the other tenants would be liable.

Also, in some cases, (not with mine luckily) no renovation work had been carried out at all, and the developers then had the cheek to ask for £ 3,000 per property to fix those that had not been done. Then, major issues with the building work started to surface. Basements would flood, not due to rain, (although this did happen on a number of occasions where the basements had not been 'tanked' correctly), but due to faulty plumbing, But if course we had a 12 month warranty contract – Right? Wrong?

Even after constant phone calls and emails, the management company failed to send us proper records, and they did not keep us informed of maintenance issues, tenants leaving, tenants not paying rent on time – all the sort of standard things one was used to expect from a 'proper' management company that charged 10% of the rent as fees.

And the hassle I had moving the management agreements to another company is another story for another day when it can be told.

Ok, so, this just seemed like rogue building work and an outright total lack of proper management by the department handling the tenancies. Not the sort of service to be expected from a firm carrying out so much nationwide marketing, but of course, being of such a high profile firm, you would have thought they would have fixed the issues. Right? Wrong!

So because of all these issues, I had by now started to do some very intensive investigation into this company, and the methods being used to package the sale of these houses.

It then transpired that most of these houses had been bought by the developer some three to four months prior to selling them, some the previous morning, for about £ 90,000 – in the developers words – derelict houses that were totally gutted; 3 bed properties that had basements opened out, and or roof conversions done, so adding as many as 2, 3 or even 4 more bedrooms, and supposedly converted to the highest of standards for HMO purposes, and these were sold to us for around £ 249,950 up to £ 325,000 and higher.

Ding Ding Ding – Alarm Bells …

Why were we quite happy to purchase them – because they all came with RICS (Royal Institute of Chartered Surveyors) valuations on the property value and the anticipated rental incomes.

All of which matched the developer's claims.

But when we noticed that several investors from other groups were having some of these similar houses repossessed – as they were not getting the rent, and consequently could not afford the mortgage, and the valuations were all coming in at around £ 80,000 to £ 100,000 BELOW THE MORTGAGE VALUE!

Our own investigations then uncovered that many of these properties had been valued by the same firm, and for comparison, they had used properties by the same developer on the valuation form.

We have come across instances where the mortgages that were granted they: –

· Were not valid for multiple occupancy homes – so why was a loan granted?

· Would not have been granted had the banks known the properties were already tenanted, and not sold as vacant possession. So why was a mortgage granted?

· Would not have been granted if the valuation rental assessment was not realistic. So loans were granted on incorrect information. If the investor had put the rental figures in, they would have probably been done for mortgage fraud.

· Would not have granted a loan (especially interest only) if the true valuation figure had been known.

· Would not have granted 85% of the assumed value had they known a Gifted Deposit was being paid (along with legal and other fees by the developer). The solicitor was aware, as was the broker, so how come the lender was not informed?

Now, as I like to think of myself as a 'savvy investor', knowing that gifted deposits, cash backs etc happen and quite often jump start the property market on the move, I had told my solicitor (s) what the side deal was , the broker told me what the deal was, so no problem right?

Wrong … I then find out that neither the solicitor (s) nor the broker had informed the lender.

Somewhere along the lines, something was wrong here.

The question is – Was it the fault of: –

· The Developer?

· The Solicitor?

· The Broker?

· The Investor?

In a society where regulations covering solicitors, brokers, mortgage loans, and valuers seem quite strict, I must say I think something is awry here, where the hapless individual investor can walk into such an unregulated trap!

If you feel you have been involved in such an investment property scam, and would like to see if there are others in the same boat, please visit my blog where you can voice your opinion, and even add your name to a structured list if you want so we can build up a database of like events that could be easily analysed to spot trends, or passed to 'Watchdog' for instance.

Source by Geoff Morris

Land Investment – Buying and Selling Land For a Profit

For hundreds of years land investment has been used as a vehicle for making money but was often reserved for the rich. However, nowadays, with the emergence of new cheaper land markets and the ability to invest in small plots of land the market has been opened up to a whole new category of investors.

It is essential with land investment that people do not get carried away with simply buying cheap land. Obviously a low-cost piece of land can seem appealing, however it is important to remember that your profit will only be made when selling the land and therefore there has to be some reason for the land to increase in value. A cheap land investment is great but if it has no reason to increase in price then how do you expect to make any profit?

So, with land investment there are a few important factors to consider when looking at a plot of land, no matter how large or small. The first to consider is obviously price. Is the land you are investing in worth the price today that is being asked? Secondly is how long you intend on holding your investment. You then need to compare that time with a realistic projection of what your land will be worth when you intend on exiting the investment. For example, if you only want to hold your land for 3 years but projections show that land values ​​in that area are not likely to rise much for the next 5 years then you are investing in the wrong land investment!

More importantly you need to consider what makes your land investment so potentially profitable. Are you simply buying a cheap piece of land and hoping it will increase in value or have you done your homework? If you are investing in an area that has reason to increase in value fast then this is the true investment that brings big returns. So, look for factors that could contribute to this. For example, is your land inaccessible at the moment but that is likely to change over the next few years by the introduction of a new road, railway access or airline route? Maybe it's cheap at the moment because the area is rather unpopulated or unappealing to tourists but the area is beginning to gain a growing amount of tourism each year and is looking to become a hot spot in the future?

Land investment can be very simple but the most simple thing is to forget the price you are paying and concentrate on what the cost you will sell at and how realistic it will be to achieve the returns you are looking for from your land investment. If you can not see a reason why the land value would increase then you're probably investing in something that will not give you the return you were hoping for.

If your land investment carries reasons for growth in the future then make sure you are paying the best price you can and take into account how other costs could affect your return. For example, a great priced piece of land is no longer a great priced piece of land if you have to add 60% to the price to cover legal costs, transfer fees and other associated land investment charges.

Land investment can be one of the easiest and most financially rewarding types of investment there is. The secret is to keep a cool head and select the right area by not looking at what makes the land good right now, but what makes the land look much better in the future!

Source by James LM