“I’ll gladly pay you Tuesday, for a hamburger today.”

No one’s falling for that line anymore, especially not retailers.  Realizing that their customers have maxed out their existing credit cards (and the daily barrage of new offerings has stopped) K-Mart, Sears, TJ Maxx and other large national retailers are bringing back an old favorite: layaway.

 

Back when Lyndon Johnson was president, credit cards barely existed. Store credit was so rare that shoppers would choose what they wanted to buy, then the store would hold it, charge a down payment and collect weekly payments thereafter.  After you paid in full, whatever you bought was finally yours to take home.

 

Like a prepaid phone card or credit card, layaway can help you reduce your consumer debt (while returning society to a cash-based economy.)

 

In college, I was the #1 customer of my employer, a now-defunct retailer.  Sheets, towels, dishes & clothes all went into a big bag at the back of the store. I would visit my purchases when I made my weekly payment.

 

Today you can even layaway online, layaway your vacation or even lay diapers away.

 

If you miss a payment, the store will charge you a fee and the put the items back in inventory.  With layaway, unlike a credit card, there’s no downside to the retailer-no chargebacks or defaults.  The responsibility and consequences belong to the consumer, and that sounds about right to me.

 

Posted by Betty Kincaid

 

Recap of MREI Session #4

 

How to be a millionaire in 4 easy lessons

 

 Step 1: Find your Big Why

Step 2: Know your numbers

Step 3: Find the perfect match

It’s now time to look for properties that meet your criteria.  Remember, you make your money going into the deal.  Always buy below market. Stick to your criteria, ignore your emotions and, when you find a match, act.

 

There are 2 buying strategies a MREI uses to create wealth:

 

1)      Buy & Sell:

There are 4 ways to do this:

Find properties for commission or referral fees;

Assign contracts for a fee;

Buy, then sell as soon as possible;

Buy, improve then sell. 

 

Right now, margins are tight. You’ve got to know your numbers cold.  Reserve for contingencies & be realistic about how long a property could take to sell.  The Buy & Sell strategy could be more profitable as prices rise. You‘ll have to know the daily changes in prices and inventory to gauge when prices will eventually rise.  

 

2)      Buy & Hold:

 

Put as much money down as you can and take out a 30-year fixed mortgage (15-year if the rent will cover it.)  Then let a renter pay the mortgage. The property will hopefully appreciate, and even if it doesn’t you can deduct depreciation and expenses on your taxes. 

Every single-family rental I’ve owned has fallen into this strategy.  If you buy your first rental at age 40 and pay it off in 15 years, you’ve created your first retirement account.  Now do it annually.

 

How you hold title to your investment property is a function of tax & legal liability.  Here are some common ways title is held in Nevada.  

 

I hold my properties in limited liability companies.  An LLC gives you the flexibility of a partnership (no additional taxes nor tax return) with the liability protection of a corporation (a creditor can only get a judgment against the property, not against your personal assets.)  Your trust can own the interest of an LLC, so you have protection from probate.

 

If you have only 1 or 2 properties, hold title in your trust and get an umbrella liability policy.  You can get $1 million of coverage for $200-$300 a year.

 

Set goals for 2009 that will get you to your Big Why.  Enroll others, especially your spouse or close family.

 

It’s time to stop talking about being a MREI and start being one. 

Virtual Mix & Mingle

At the National Association of Realtors® convention last week I asked my colleagues which social networking sites they connect to clients & fellow agents through.  Here are the top 4 , in ascending order:

Once the #1 site, MySpace is still popular with the under 20 crowd.  You can customize a MySpace page to include music, photos and backgrounds, which clutters the pages and makes them hard to maneuver It’s impossible to make a MySpace page look professional making MySpace the least favorite site among Realtors®

Instead of sending text messages to one recipient at a time, imagine sending them to the world and posting them online. That’s the genius behind Twitter, a “micro-blogging” site that lets you post only in 140-character increments. At a recent conference, attendees used Twitter to post reviews of speakers, exchange ideas & find each other for lunch.  With an simple text interface, keeping up with your friends is as easy as checking for messages.

 University of California graduate journalism student James Buck, and his translator, Mohammed Maree,  were arrested on April 10 in Egypt for photographing an anti-government protest. On his way to the police station, Buck used his mobile phone to send the message “Arrested!” to his 48 followers on Twitter.  Thanks to the message and Buck’s fellow Twitterers , he was released from jail the next day after the college hired him a lawyer.

Created purely for business networking, LinkedIn lets you post your work history, professional ambitions, and most importantly, contact database.  The database grows exponentially every time you add a contact, since you can now read that contact’s contacts.  LinkedIn lets you give testimonials to and receive them from colleagues. You can also feed your blog directly to LinkedIn and post presentations,. 

Originally used exclusively by Harvard students, this networking tool is now the #1 social networking site in the world with 132 million unique visitors in June.  It combines the best of the sites allowing micro-blogs, text interface, photo sharing & contact management. Unlike MySpace, Facebook’s pages look clean, professional & uniform.  

 Whichever site you choose, demand a return on your investment of time & energy.  Create a monthly goal to increase your sphere of influence and referral sources, consistently communicate with them & ask for the order.  Track your results to determine what worked best for you.

Now get out there and have fun.

Posted by: Jessica Kincaid

Writing a bank owned offer

Purchasing a bank owed property can be a tedious process.  So many things are different that it can be quite a headache if you don’t prepare yourself ahead of time.  Below are the five things I found most important to know when purchasing a bank owned property.

Expect to pay list price or over. Banks are realizing the competition is stiff and everyone is looking for a good deal. In response they are now listing properties low in order to create the traffic necessary to generate multiple offers. If it’s been on the market for a month or less or has had a recent price reduction, go in with your strongest offer first. If and only if the property has been listed for more than a month or it has been a month since the last price reduction, then it’s highly unlikely you will be in a multiple offer situation and your offer can be written accordingly.

Expect to write multiple offers. Because low priced, clean properties with little to no repairs are rare, you will probably not be the only offer submitted to the bank. Have a second, third, and even fourth choice in mind. Be careful not to get too attached to any one house until the deal is final. The bank may not take your offer and have the ability to cancel at anytime.

Expect long response times. After you sign the offer, it is sent over to the listing agent, then it gets uploaded to an online portal and the asset manager does their job in analyzing the offer. This can take anywhere from 1 day to 2 weeks and you still may not get the property. Patience is definitely a virtue.

Expect a 45 day escrow. Once you have your offer accepted by the bank, the clock starts ticking. However, everything on the seller’s side takes longer because the seller is a bank who is doing a large quantity of transactions and is severely understaffed. You may have a verbal acceptance or even an email, but may not see the final addendum (counter offer) for two weeks. In the meantime, your time is slipping away. Added to that, it is highly likely that the addendum has a clause in it stating a penalty if it’s your fault the transaction doesn’t close on time. (Typically about $50 – $200 a day) A longer closing gives your team of people the time to make sure it’s not your fault when closing doesn’t happen on time.

You will not receive a Seller’s Real Property Disclosure and will be required to waive the right to receive one. In the state of Nevada, NRS 113 says that the buyer must be presented with the Seller’s Real Property Disclosure (SRPD) form.  However, in this case the bank has never even seen the property so they have no idea what condition it’s in or what works therefore they require the buyer to fill out a Waiver of NRS 113. *Caveat: The bank will ask you to sign and notarize this form. Make sure you are only signing your right to receive the SRPD and not all your NRS 113 rights.

These are just a few of the areas bank owned transaction vary from the norm. When deciding to purchase a home in today’s market it’s important that you have someone who understands how to properly write the bank owned offer and manage the deal through the tedious escrow process. At the Kincaid Team we have the experience and knowledge to get the job done with the least amount of hassle on you, the buyer. Email us a info@thekincaidteam.com to get on our Great Deals email list.

Posted by: Jessica Kincaid