COPYRIGHTED MATERIAL INDEX

Transcription

1 INDEX A Affiliates, Agreements, negotiation/disclosure clause, 57 Amortization schedule, accelerating, 11, 32 Analysis paralysis, 43, 249 Ancillary businesses, insider profits from, 245 Appraisals, , 133 Appraisers, 50, 111 Assignable/assumable loans, Assignment clauses, purchase contracts, 24 Atlantic Richfield Oil Corporation (ARCO), 3 B Backup provisions, negotiation/ disclosure clause, 60 Balloon payments, 27, 29 30, 40 Banks. See Financing Breaching party, negotiation/disclosure clause, 59 Broker. See Real estate agents Brokerage fee, negotiation/disclosure clause, 59 Broom clean, Bucket theory of investments: bucket one/two/three investments defined, 1 2 planning exercise (Form 3.1), 10, 11, Porsche as premature bucket three investment, 5 Builders, partnerships with, Building inspection: checklist (Form 13.2), as closing roadblock, 115, 133 initial, 116, 117 kit, 72 73, 75 negotiation/disclosure clause, 57 58, 59 post-contract, 116 professional, 117 timing, types of (four), walk-through, negotiation/disclosure clause, 59 Building inspectors: amateur, 115 friendship with, 26, 115 professional, 117, 133 relatives as, 115 Burnout, real estate agents, 9 10, 247 Buyer(s): advantages of seller carryback for, closing problem checklist, COPYRIGHTED MATERIAL

2 254 INDEX Buyer(s) (Continued) converting tenants into, 161, 167, credit reports, 60 finding, for deals you turn down, 61 giving seconds to, 53 making fast turns to waiting, 53 as mentors, perspective on, real estate agent versus insider investor, representing both sellers and, 24 shifting to lister from, 53 stepping in for dropouts, 21, 38 C California: escrows and escrow instructions, 116 real estate market ( s), 8, 9, 31 termites, 49 Campbell County, Wyoming, 3 Cash flow: improving property and paying off mortgages with, 32, 137 no negative before taxes, 27, for real estate transactions, 8, 250 annual cash flow after taxes (Form 16.6), 150 before-tax financing analysis (Form 16.5), 149 City officials/planners, 111 Closing, appraisals, , 133 buyer, checklist (Form 15.1), , checklist of items to take to (Form 15.4), 113, 119, checklist of possible problems (Form 15.3), 115, 116, cooperative agent, 130 cover letter (Form 15.2), 115, 128 escrow, 116, , inspection and, 115, , insurance, 114 lender, 129 refusing to complete settlement, 118 seller, title company, 134 Commissions: effort required for, versus investments, 6 investing/planning for, 18, 19, 32 reinvesting in exchange for limited partnership in project, Community decision makers as information sources, Condition of premises, negotiation/ disclosure clause, 57 Cosigner agreement addendum to rental agreement (Form 18.8), 165, 192 Credit: building short-term borrowing ability, 250 buyer s credit report, negotiation/ disclosure clause, 60 reports/fico scores, 39, 40, 60, 247 signature line of, 250 D Decision tree, real estate, 138 Deed in lieu of foreclosure, 41 Demographics, seller, 33 34, 49 Depreciation, 28 Direct mailings, 37

3 Index 255 Disclosure, full: examples, 23 24, 52, 53, fiduciary duty and, 21, 57 lead-based paint hazards, Discrimination, in tenant selection, 161 Divorce, 34, 159 Domino theory, informal, 22 23, 35 Down payments: no-money-down schemes, 1, 249 successful real estate brokerage business as machine for, 7 12 Dual agency position, 24 Due diligence, before buying property, cultivating contacts as information sources, expenses, requesting source records of, 73 inspection (see Building inspection) market rent survey (Form 13.5), tenant estoppel statement (Form 13.4), 73, tenant interviews (Form 13.3), 73, 106 D words, four, 34 E Equity paydown, 11, 32 Estoppel statement, tenant (Form 13.4), 73, Ethical standards, 248 Exchange method, real estate decision tree, 137, 138 Exit interview, tenant (Form 18.34), Expenses: deductible, determining, percent factor, 43 requesting source records of, 73 worksheet (Form 9.2), Expired listings as leads, 33, 36 F Facts about Your Buyer (Form 12.4), 61, Faith, 247 Family, 247 Fannie Mae, 39 FICO scores, 39, 40, 247 Fiduciary responsibilities, 20 23, 57 Finances, personal, 247 Financial statement, negotiation/ disclosure clause, Financing: adjustable or variable rate mortgages, 27, assignable/assumable loans, balloon payments, 27, bank presidents as information sources, 111 closing checklist, 123 equity paydown, 11, 32 foreclosure and short pay, 9 lenders as affiliates, 49, 50 long-term fixed, 26 non-owner-occupied investor loans, 39 property and investor data summary (Form 16.4), Fitness, 247 Flipping, 21, 249 Foreclosure: deed in lieu of, 41 short pay and, 9 For sale by owner (FSBO), 33, 36 Freddie Mac, 3

4 256 INDEX Friends, 247 Full disclosure. See Disclosure, full Fun, 247 F words, six, 247, 248 G Goals, setting, 11, 31, 247 Bucket One Investments, planning exercise (Form 3.1), Insider s Performance Commitment, 13 Greater fool theory, 249 H Heating system, 93 94, 118 Holding power, 7 8 Hold versus sell, real estate decision tree, 137, 138 Home warranty companies as affiliates, 50 Hot sheets, Human resources departments as leads, 159 I Income: analysis of, from property under consideration for purchase, income-to-price ratio, 30 net, after deductible expenses, operating, net/gross, 149 personal planning, 16 17, 19 rental versus commission, 1, 32 sources, from a building (Form 9.1), 43, 44 taxable, 150 Indemnification, negotiation/disclosure clause, 59 Insiders. See Real estate insider investor Inspections: pre-purchase (see Building inspection; Building inspectors) rental property, inspection report (Form 18.26), Insurance: closing and, 114 coverage summary (Form 16.3), 146 fix up (Form 16.2), 139, negotiation/disclosure clause, 59 property/liability, title, 123 Internal Revenue Code (IRC). See Tax(es) Interviews, tenants: due diligence before purchase (Form 13.3), 73, 106 exit (Form 18.34), Investing: as insider (see Real estate insider investor) personal levels of (bucket theory), 1 2 speculating versus, 2, 5 6, 31, 40 Investment property: decision tree, financing, 27, (see also Financing) finding (see Properties, finding/qualifying) hold strategy, income producing, versus appreciation-based, 9

5 Index 257 location, 27, 30 managing (see Property management) personal inspection of, 27, purchase: negotiating (see Negotiations) price, 54 55, 57 terms, rules/guidelines, selling: automatic listing, 239, 240 checklist (Form 19.1), 240, insider advantages as a seller, real estate decision tree, 137, 138 reasons against, 240 taxes triggered by, 240 Lease: contract (Form 18.7), , length of, 159, 161 pet owners agreement (Form 18.12), 166, 197 renewal application (Form 18.14), 200 tenants release from if they buy, 159 Lenders. See Financing Limited partnerships, Loans. See Financing Location, 7 Long Beach, California, 5, 37, 50, 240 Los Angeles, 4 Lottery, 3 K Kankakee, Illinois, 165 Key receipts (Form 18.11), 166, 196 L Land banking, 26 Lead-based paint disclosure, Lead generation: bird dogs, 51 hot-sheet monitoring, human resources departments, relocation moves, 159 insider communication systems, 158 letter to tenants (Form 18.15), off-market sources of inventory, 22 sellers, 9, 21 22, M Mailing lists, professional, 159 Mailings, direct, 37 Maintenance of properties, 169 move-in/move-out inspection checklist (Form 18.25), notice to enter dwelling (Form 18.20), 211 preventive, 161 property inspection report (Form 18.26), resident s maintenance repair request (Form 18.21), semiannual safety and maintenance update (Form 18.24), time estimate for repairs (Form 18.22), 214 unit maintenance record (Form 18.23), unit make-ready report (Form 18.17),

6 258 INDEX Mentoring, 10, 33, 37 Money, net present value of, 245. See also Cash flow Moral/ethical standards, 248 Mortgage, escrow, or title businesses, 245 Move-out management, 167, 168 checklist (Form 18.16), 168, cleaning instructions to tenant (Form 18.19), exit interview (Form 18.34), move-in/move-out inspection checklist (Form 18.25), move-out closing statement (Form 18.35), 238 move-out instructions (Form 18.19), 168 move-out letter to tenant (Form 18.33), 235 Multiple offers, negotiation/disclosure clause, 60 N Negotiations, agreement of sale checklist (Form 12.3), 56, contracts, 37 38, 57 disclosures/clauses: agreements, 57 backup provisions, 60 breaching party, 59 brokerage fee, 59 condition of premises, 57 credit (buyer s credit report), 60 financial statement, indemnification, 59 inspections, Internal Revenue Code (IRC) section 1031 exchange, 57 multiple offers, 60 purchase price, 57 referrals, representation, 61 seventy-two hours (continue to offer), 60 short sale/notice of default, 60 verifications, 59 walk-through, 59 emotions and, 56 Facts about your Buyer (Form 12.4), 61, insider financing checklist (Form 12.2), 56, 64 items to determine prior to: initial higher price and terms, 56 target price and terms, 56 worst price and terms, 56 loan questionnaire (Form 12.1), 56, participants in, 56 purchase price, 54 55, 57 seller s net sheet, estimated proceeds on sale/exchange of property (Form 12.5), 61, throw away items list, for making concessions, 55 unacceptable counterproposal, finding buyer for, 61 Net present value of money, 245 No-money-down schemes, 249, 250 Non-smoking clause, 187 Notice to enter dwelling (Form 18.20), 211

7 Index 259 O Off-market inventory, finding sources of, 22 Owner-broker management agreement (Form 18.1), Owner demographics, as leads, P Paperwork. See Property ownership paperwork Parking: building inspection checklist, 79 monitoring, on premises, , 195 space for, as investment plus, 25 vehicle registration (Form 18.10), 195 Partnerships: avoiding, 8 profiting from, Performance Commitment, 12, 13 Pet owners agreement (Form 18.12), 166, 197 Pool, rules for community (Form 18.13), 167, Professional condominiums near major hospitals, 37 Professional mailing lists, 159 Promissory notes, purchase/or sale of, 245 Properties, finding/qualifying, 7, See also Due diligence, before buying property; Lead generation age of buildings, 25 appliances, 26 condition, 7 guidelines, rules, income analysis, inspectors/contractors and, 26 location, 7 long-term fixed financing, 26 master-metered buildings, 26 number of bedrooms, 25 off-market sources of inventory, 22 paralysis of analysis, 43 parking space, 25 pools, 26 positive cash flow, 7 rules, six inviolate, school districts, 25 Property maintenance. See Maintenance of properties Property management, cosigner agreement addendum to rental agreement (Form 18.8), 165, 192 discrimination, 161 finding tenants (see Tenants) golden rules of, hiring; owner-broker management agreement (Form 18.1), 161, 162, income from, versus commission income, 1, 32 inspection report (Form 18.26), insurance, key receipt (Form 18.11), 166, 196 lead-based paint disclosure, hazards, lease: contract (Form 18.7), , length of, 159, 161 renewal application (Form 18.14), 200 tenants release from if they buy, 159

8 260 INDEX Property management (Continued) maintenance/repairs (see Maintenance of properties) marketing/promotions, 162, 163 move-out management, 167, 168 checklist (Form 18.16), 168, cleaning instructions to tenant (Form 18.19), exit interview (Form 18.34), move-in/move-out inspection checklist (Form 18.25), move-out closing statement (Form 18.35), 238 move-out instructions (Form 18.19), 168, move-out letter to tenant (Form 18.33), 235 non-smoking clause, 187 notice to enter dwelling (Form 18.20), 211 parking, monitoring, on premises, , 195 pet owners lease agreement (Form 18.12), 166, 197 pool rules and regulations (Form 18.13), 167, promoting/marketing rental property, 162 rental agent performance report (Form 18.3), rental checklist (Form 18.16), rental inquiry (Form 18.5), 179 rental record (Form 18.18), 168, rent delinquency report, monthly (Form 18.29), 169, 228 rent payments, agreement for partial (Form 18.30), 169, 229 residential questionnaire (Form 18.31), 166, safety/maintenance update, semiannual (Form 18.24), safety precautions, systems/checklists for, traffic report (Form 18.2), unit availability list (Form 18.4), 163, 178 unit ledger card (Form 18.27), 169, 226 unit maintenance record (Form 18.23), unit make-ready report (Form 18.17), 168, vehicle registration (Form 18.10), 166, 195 warning notice, complaints from neighborhood/residents (Form 18.32), 234 waterbed and/or liquid-filled furniture agreement (Form 18.9), 165, Web site marketing, rental property, 162 Property ownership paperwork, decision tree, insurance coverage summary (Form 16.3), 146 insurance/fix up (Form 16.2), 139, photo of property, 138, 140 Property Summary (Form 16.1), 138, Property Summary Folder, replacement reserve worksheet (Form 16.9), 139,

9 Index 261 worksheets, 139 after-tax proceeds from sale (Form 16.7), before-tax financing analysis (Form 16.5), 149 performance summary (Form 16.8), 153 property and investor data summary (Form 16.4), Purchase price, negotiation/disclosure clause, 57 Refinance equation, 137, 138 Relocation moves, 159 Rental property. See Property management; Tenants Repairs: pre-purchase estimate for, 26 property management (see Maintenance of properties) Representation, negotiation/disclosure clause, 61 Retirement, 10, 35 Rumors, 22, 37 R Real estate agents: burnout, 9 10, 247 perspective on buyers, 36 representing both buyer and seller (dual agency), 24 Real estate decision tree, 138 Real estate insider investor: advantages, 20 24, 25 32, 33 35, 38 affiliates, becoming, buyers, perspective on (versus that of real estate agent), 36 down payment machine, 7 12 fiduciary responsibilities, 20 23, 57 Insider s Performance Commitment, 12, 13 perspective on buyers, properties (see Investment property; Property management) relationship with peers in area, 50 rules (nine) in business plan, tactics/opportunities, 52 53, team/staff, 48 51, 163 Referrals, 38, S Satellite/cable television, 186 School districts, 25 Self-assessment/monitoring, Seller(s): burnout, 34 carryback financing, divorce, death, disillusion, and debt, 34 financial conditions, 35 hot demographics, informal domino theory, 35 lead generation systems, 9, 33 35, 158 life-changing event, 34 needing emergency home, 158 reasons for selling, retirement, 35 Selling investment property: automatic listing, 239, 240 checklist (Form 19.1), 240, insider advantages as a seller, real estate decision tree, 137, 138 reasons against, 240 taxes triggered by, 240

10 262 INDEX Settlement. See Closing Seventy-two hours (continue to offer), negotiation/disclosure clause, 60 Short pay, 9 Short sale/notice of default, negotiation/disclosure clause, 60 Short-term solutions/flipping, 31, 249 Signature line of credit, 250 Snowball effect/theory, 9, 32, 240 Speculation versus investing, 2, 5 6, 31, 40 T Tax(es): deductible expenses, negotiations and sellers tax situation/bracket, 55 after-tax proceeds from sale (Form 16.7), annual cash flow, after taxes (Form 16.6), 150 before-tax financing analysis (Form 16.5), 149 performance summary (Form 16.8), 153 selling property triggering, 240 tax deferred exchange, 34 35, 55, 57 Team/staff, 48 51, 163 Temporary housing, Tenants. See also Property management: acquisition/selection, , 160, 161 discrimination in tenant selection, 161 looking at where they live, 161 qualifying, real estate insider leads/ communication systems, 158 as buyers, 161, 167, interviewing: due diligence before purchase (Form 13.3), 73, 106 exit (Form 18.34), lease renewal (Form 18.14), 167, 200 ledger card (Form 18.28), 227 move-out management, 167, 168 checklist (Form 18.16), 168, cleaning instructions to tenant (Form 18.19), exit interview (Form 18.34), move-in/move-out inspection checklist (Form 18.25), move-out closing statement (Form 18.35), 238 move-out instructions (Form 18.19), 168 move-out letter to tenant (Form 18.33), 235 notice to enter dwelling (Form 18.20), 211 personal and credit information (Form 18.6), pet owners agreement (Form 18.12), 166, 197 rental questionnaire (Form 18.31), 166, resident s maintenance repair request (Form 18.21), unit make-ready report (Form 18.17), Termites, 49 Terms of real estate purchase, Title companies as affiliates, 49 Title insurance, 123

11 Index 263 Too-good-to-be-true gurus, 249, 250 Traffic report (Form 18.2), U Umbrella policy, 167 Unit availability list (Form 18.4), 163, 178 Unit ledger card (Form 18.27), 169, 226 Unit maintenance record (Form 18.23), Unit make-ready report (Form 18.17), 168, Utilities: lease agreement, 189 net income analysis, 46 Utility room inspection checklist, W Walk-through, negotiation/disclosure clause, 59 Warning notice, complaints from neighborhood/residents (Form 18.32), 234 Warranty companies, home, 50 Waterbed and/or liquid-filled furniture agreement (Form 18.9), 165, Weasel clauses, 72 Web site marketing, 162 V Vehicle registration (Form 18.10), 166, 195 Verifications, negotiation/disclosure clause, 59

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