December 2009

Welcome to this month's newsletter

Each month I feature a different real estate investment topic. The purpose is to educate readers on ways that real estate is part of an overall wealth building financial plan - for those new to the game and/or for the seasoned investor. This months topic is about defining the different types of commercial real estate.

To Your Successful Investing!

Quote of the Month

"May the most you wish for be the least you receive."

- Anonymous

About Steven Peck

Steven Peck is a commercial real estate broker. His area of specialization is real estate investments. He has been extensively involved in real estate investing for the past 20 years, personally and professionally. He has purchased and managed various real estate investments - including residential, commercial, and farm properties.

408-307-9785 | speck@yournext1031.com | www.cresmartguys.com | My Business Directory

Buy Real Estate With Your IRA

Are stock market woes preventing you from building wealth in your retirement account? If so, you might be interested in a small, but growing trend among individual retirement account (IRA) owners by investing their retirement funds in real estate.

How it Works: Most banks and brokerage houses - the most common IRA account options - limit your choice of investment to certificates of deposit, stocks, mutual funds, annuities, and other financial products. However, Section 408 of the Internal Revenue Code permits individuals to purchase land, commercial property, condominiums, residential property, trust deeds, or real estate contracts with funds held in many common forms of IRA's, including traditional IRA's, Roth IRA's, SEP or SEP-IRA. You must have an IRA Custodian to administer your self-directed IRA, and there are many companies to choose from that offer this service.

Types of Investments: The types of real estate that you can buy with your IRA are endless! You can purchase nearly anything as long as you don't use the property as a personal residence or as your place of business. You can also rent the purchased property to anyone who is not a disqualified person, and use the monthly payment to grow your IRA, and to build equity over time. Here are many common property investments: houses, vacation homes, condominiums, multi-family, mobile homes, commercial property, and vacant lots. Since buying a property may require more funds than you currently have available in your IRA, you can have your IRA purchase an interest in the property in conjunction with other individuals, such as a spouse, relative, business associate, or friend. Unfortunately, the IRS will not let you use the real estateproperty owned by your IRA as your residence or vacation home. Nor can your business lease space in your IRA held property. The underlying premise for any real estate investment purchased with IRA funds is that you can't have any personal use of the property (until you have reached retirement age at 59 ½).

Operating an IRA held Property: Because all property expenses including taxes, insurance, and repairs must be paid from funds to your IRA, you'll need liquid funds available in your account. Of course, all income generated from the property will be deposited in your IRA account so you can use that money to cover your costs. You can also make annual contributions within federal guidelines. It is also possible to sell properties while they are held by your IRA, so long as the purchaser is not a disqualified family member. Once a deal closes, your IRA account now holds the cash - ready for you to make your next investment. An alternative is to sell an IRA held property with seller financing so that all payments made by the buyers are paid to the IRA.

Distributing your property: You can withdraw real estate from your IRA and use it as a residence or second home when you reach retirement age (59 ½ or older for a penalty free withdrawal). At that time, you can elect either to have the IRA sell the property or take an in-kind distribution of the property. Under that arrangement, your IRA custodian assigns the title to the property to you. You will then have to pay income taxes on the current value of the property, if it's been held in a traditional IRA. If the property was held in a Roth IRA, you won't own taxes at distribution. This makes a Roth IRA extremely attractive if you anticipate that your real estate investments will appreciate over time. Whether your retirement strategy is to hold properties or buy and sell for gain, real estate investing through your IRA can yield extraordinary returns toward your future retirement!

Real Estate Investment Book List

1.IRA Wealth: Revolutionary IRA Strategies for Real Estate Investment

- by Patrick Rice

Real Estate in IRAs and Keoghs: A Guide (CD-ROM)

-by Hubert Franz-Josef Bromma

Welcome to this month's newsletter

Each month I feature a different real estate investment topic. The purpose is to educate readers on ways that real estate is part of an overall wealth building financial plan - for those new to the game and/or for the seasoned investor. This months topic is about defining the different types of commercial real estate.

To Your Successful Investing!

Quote of the Month

"If you think you can, you can. And if you think you can't, you're right."

- Mary Kay Ash

About Steven Peck

Steven Peck is a commercial real estate broker. His area of specialization is real estate investments. He has been extensively involved in real estate investing for the past 20 years, personally and professionally. He has purchased and managed various real estate investments - including residential, commercial, and farm properties.

408-307-9785 | speck@yournext1031.com | www.cresmartguys.com | My Business Directory

Amazing Opportunities for Tenants

On October 7th, I was interviewed by Channel 7 newsreporter, Karina Rusk, about the status of the office real estate market in the San Jose area. Here is a summary of my TV interview, with a video link attached of my TV interview.

Many market experts think the seemingly endless downturn in the commercial real estate market may linger, which will create even more opportunities for new tenants seeking low leasing rates.

San Jose office buildings are suffering from an office surplus. The overall office vacancy rate for Silicon Valley is about 20 percent, which converts to approximately 14 million square feet of space. This amount of space is just about double the amount of space available before the economic downturn.

Commercial real estate broker Steve Peck says the result is a simple matter of supply and demand. 'What we're seeing now is distressed cases where tenants have too much space, we're getting sub-leasing, those are opportunities for new companies to come in at a lower rate and also landlords having empty buildings are negotiating a little bit better, they're giving free rent or other concessions,' Peck said.

The abundance of office space, and low leasing rates, created a “perfect storm” for Indu Jayakumar, who runs an Internet marketing company. She was able to obtain 1,200 square feet of office space in Cupertino for a discounted price of $1.50 per square foot.

'I was definitely in the driver's seat and I was able to demand a lot of things, like for instance, painting the office,' Jayakumar said.

Over the last four quarters, office rents in San Jose have sunk approximately 13 percent. Businesses that are able to take advantage of these amazingly low lease rates, and buyers who want to buy commercial space, will be among the few winners as we wait for a sustainable economic recovery.

Real Estate Investment Book List

1. Negotiating Commercial Real Estate Leases (Paperback)

- by Martin I. Zankel

Commercial Real Estate Transactions: A Pocket Guide for Tenants, Owners and Investors (Paperback)

-by Carlos Cooper

Welcome to this month's newsletter

Each month I feature a different real estate investment topic. The purpose is to educate readers on ways that real estate is part of an overall wealth building financial plan - for those new to the game and/or for the seasoned investor. This months topic is about defining the different types of commercial real estate.

To Your Successful Investing!

Quote of the Month

"Change is the law of life. And those who look only to the past or present are certain to miss the future."

- John F. Kennedy

About Steven Peck

Steven Peck is a commercial real estate broker. His area of specialization is real estate investments. He has been extensively involved in real estate investing for the past 20 years, personally and professionally. He has purchased and managed various real estate investments - including residential, commercial, and farm properties.

408-307-9785 | speck@yournext1031.com | www.cresmartguys.com | My Business Directory

Selecting Investment Property to Buy

The route from identifying the property, to actually owning the property can be a lengthy process. It is very possible that once negotiations to buy begin, the buyer may change his mind about the property. The price and terms of the sale that the seller is willing to offer will be the deciding factors for the buyer to accept. Also, a buyer may begin negotiating on a property, only to find another property that suits him better. If this happens, then the buyer is able to break off negotiations on the first property, and then moves on to the second property. Of course, the conditions of the real estate market for the types of property a buyer is looking for will affect the property selection and negotiation process.

10 Essential Steps in Selecting Property To Own

Buyers with the proper foundation for their property selection will have the best chance for success by following these steps prior to investment property ownership:

1. Find property in a familiar area

2. Know what your ability is, and stay within the scope of your ability

3. Find property that you are able to improve. This provides the best wealth building opportunity.

4. Know your maximum limits on financial capability

5. With proper due diligence, you will be able to manage risk by knowing as much as possible about the area, market, and the property.

6. Recognize that if you like the property, and can afford it, then this is one of the most important conditions of buying real estate.

7. Do not hesitate, and overanalyze a purchase.

8. Have the property inspected for problems by qualified people.

9. Look for trends associated with real estate in your area for the property you select

10.To know what is going on in the marketplace, look back to the past, as history repeats itself in real estate

In reality, investors do not select a property to buy, but instead they select a property they would like to own. With a set program, as identified above, a buyer will be able to move ahead with decisiveness and confidence through the property selection process.

Note: Please consult with your real estate professionals for further analysis and more information. Investors should always use professional tax and legal experts prior to investing in real estate.

Real Estate Investment Book List

1. Investing in Real Estate

- by Gary W. Eldred

The Commercial Real Estate Investor's Handbook: A Step-by-Step Road Map to Financial Wealth (Paperback)

-by Steven D. Fisher

Welcome to August month's newsletter

Each month I feature a different real estate investment topic. The purpose is to educate readers on ways that real estate is part of an overall wealth building financial plan - for those new to the game and/or for the seasoned investor. This months topic is about defining the different types of commercial real estate.

To Your Successful Investing!

Quote of the Month

"Ideas are the beginning points of all fortunes"

- Napoleon Hill

About Steven Peck

Steven Peck is a commercial real estate broker. His area of specialization is real estate investments. He has been extensively involved in real estate investing for the past 20 years, personally and professionally. He has purchased and managed various real estate investments - including residential, commercial, and farm properties.

408-307-9785 | speck@yournext1031.com | www.cresmartguys.com | My Business Directory

Top 5 Mistakes to Avoid Investing in Commercial Real Estate

Anyone who invests in real estate is at risk to make a blunder sooner or later. In almost every case the cause is traceable to a lack of knowledge about a few simple guidelines that form the ground rules of successful commercial investments. These are the basic practices that when used correctly will eliminate the most common causes of a bad deal.

Here are the 5 steps to avoid:

1. Ignoring local market conditions
There are two levels of due diligence required to evaluate a real estate investment-the market and the property. The local market conditions prevail between the two. Analyzing the demographic trends of population growth, income, and employment in the local market will tell you where opportunity lies, or not, and will help you know which property types are in demand, or oversupply. Investing in an area with declining demographic trends is destined for trouble. So learn your market.

2. Insufficient property due diligence
The second level of due diligence is the property condition, including physical items such as building systems, environmental matters and structural components. Just as important are the intangible items, such as title, survey, and zoning and land-use regulations. Knowledge of contract law, insurance, finance, accounting, and tax law is also critical to doing things right at the beginning to insure success at the end. Get accurate estimates from professionals of what it will cost to fix what is wrong.

3. Misunderstand the math calculations
Real estate is a numbers game. Value is dependent on net operating income-gross revenue minus operating expenses. That's why it is so important to get the real operating numbers, not projections Confirm and verify every element of income and expense. Value the property based only on present income only.

4. Borrowing Too Much Money
Highly leveraged deals do happen, but unless it's backed up by a solid plan with sufficient capital, it can be disastrous. For evaluation purposes, it is conservative to use 45% of gross income for expenses and vacancy.

5. Failure to have a property management plan prior to investment
Your plan should answer the questions of how the property will be managed; what improvements are needed and their cost; how money might be made (or lost); how long it will take; how to get out if things go wrong; and how to access the profits when it goes right.

Note: Please consult with your real estate professionals for further analysis and more information. Investors should always use professional tax and legal experts prior to investing in real estate.

Real Estate Investment Book List

Confessions of a Real Estate Entrepreneur: What It Takes to Win in High-Stakes Commercial Real Estate (Paperback)

- by James A. Randel

The Commercial Real Estate Investor's Handbook: A Step-by-Step Road Map to Financial Wealth
(Paperback)
- by Steven D. Fisher

Welcome to July month's newsletter

Each month I feature a different real estate investment topic. The purpose is to educate readers on ways that real estate is part of an overall wealth building financial plan - for those new to the game and/or for the seasoned investor. This months topic is about defining the different types of commercial real estate.

To Your Successful Investing!

Quote of the Month

"If we don't start, it's certain we can't arrive."

- Zig Ziglar

About Steven Peck

Steven Peck is a commercial real estate broker. His area of specialization is real estate investments. He has been extensively involved in real estate investing for the past 20 years, personally and professionally. He has purchased and managed various real estate investments - including residential, commercial, and farm properties.

408-307-9785 | speck@yournext1031.com | www.cresmartguys.com | My Business Directory

8 Convincing Reasons For Business Owners To Buy Commercial Real Estate

You have heard that vacancy rates are skyrocketing, unemployment is on the rise, and market predictions are that commercial real estate will be the next place to plummet. However, these are the exact reasons why now is a the time for business owners who currently lease space, and intend to be in business for the next 10 years, to consider owning their own property. If so, then the remainder of 2009 may present the best buying opportunity for many years to come.

Consider these Reasons:

1. Business owners need a place to operate their business
Real estate rental costs are typically the third largest expense a business incurs (after payroll and taxes). On average, lease payments typically increase by 3% or more per year, every year. Ownership will give the business owner more control of these escalations. Also, the tenant improvements, having a property sold at your place of operation, are at the business owner’s discretion.

2. Pride of Ownership
The business owner will also experience pride of ownership by owning his own building where the business conducts its business.

3. We Are in a Buyer's Market
This year is clearly a bad year for many commercial property investors; rental rates are down and vacancies are high. These investors, unlike business owners, depend on the rental income their property generates to pay the mortgage. The vast majority of investment property loans have balloon payments every 5, 7 or 10 years. In today's unstable market, banks are very conservative with property valuations and refinancing investment properties is harder than ever.

Many investors need to sell properties, even ones with positive cash flow, due to a lack of available financing. As a consequence, there are a large number of attractive acquisition opportunities available at historically low prices relative to the cash flow they can generate.

The investor's challenge is your opportunity. As a business owner you will use your business' cash flow to cover the mortgage expense. There is a good chance that you are already spending most if not all of the mortgage payment as rent.

4. Short Term Value Fluctuations Don't Matter
The idea is not that your owner occupied real estate is somehow immune to down market cycles. The point is that as a business owner you don't particularly care because you have no intention of selling in the short term. Certainly all property owners hope to enjoy increasing property values, but for owner occupied properties it's not a day to day concern.

5. Historically Strong Inflation Hedge
Commercial Real Estate has a long history of being an excellent hedge against inflation. Over the long term, commercial properties tend to increase in value at a rate approximately two percent higher than the rate of inflation.

6. Outstanding Exit Strategy Options
When you one day decide to retire, owning the property will provide several attractive options. You will be able to sell the business and lease the property to the buyer; sell the business with the property, increasing the business value and making the transaction easier to finance, or sell the business and the property to different buyers.

7. Tax Benefits
Property ownership provides many tax benefits and can help shelter business income. Interest deductions, depreciation, amortization, 1031 exchanges and other benefits will help you keep more of what you earn. Speak to your accountant to gain a better understanding on how commercial property ownership can help you keep more of your income and reduce your tax burden.

8. Excellent Financing Options are Available
Outstanding financing options through SBA 9 (a) loan programs are currently available to help business owners purchase or refinance owner occupied commercial properties. Several underutilized loan programs can provide up to 90% financing for qualified projects. These loans are fully amortizing, so you never need to worry about facing a balloon payment either.

It's hard to get up the courage to invest in commercial real estate when the market is in turmoil, but I urge you to consider doing just that. The benefits of ownership are compelling and the timing is right.

Note: Please consult with your real estate professionals for further analysis and more information. Investors should always use professional tax and legal experts prior to investing in real estate.

Real Estate Investment Book List

Commercial Real Estate Transactions: A Pocket Guide for Tenants, Owners and Investors (Paperback)

- by Carlos Cooper

The Site Book: A Field Guide to Commercial Real Estate Evaluation (Paperback)

- by Richard M. Fenker

Welcome to June month's newsletter

Each month I feature a different real estate investment topic. The purpose is to educate readers on ways that real estate is part of an overall wealth building financial plan - for those new to the game and/or for the seasoned investor. This months topic is about defining the different types of commercial real estate.

To Your Successful Investing!

Quote of the Month

"Diligence is the mother of good luck."

- Ben Franklin

About Steven Peck

Steven Peck is a commercial real estate broker. His area of specialization is real estate investments. He has been extensively involved in real estate investing for the past 20 years, personally and professionally. He has purchased and managed various real estate investments - including residential, commercial, and farm properties.

408-307-9785 | speck@yournext1031.com | www.cresmartguys.com | My Business Directory

10 Reasons for Motivated Sellers

In the current real estate market with property values falling, why is it possible to still find motivated sellers? Is it just that some sellers don't know what their property is worth? Sometimes this is the case, but only rarely. More often a seller is willing to sell for less because it means selling faster or more easily. In other words, sellers will trade a little equity for a fast sale or peace of mind, as in the following situations.

1. Death - After the death of a loved one, family members may want to sell any real estate cheap to be quickly done with the bad memories, or to get their inheritance faster.

2. New Job - A job transfer or new job can give a person a lot of motivation to sell fast, and therefore sell cheap. Often, the seller will end up with two payments, and you will be helping by taking one off his hands.

3. Divorce - When people divorce, sometimes they need to sell to settle things, and the faster the sale, the sooner they get to be done with it all. Also, sometimes neither one can afford a home that was being paid for with two incomes. A fast sale prevents late payments and credit problems.

4. Behind in Payments - If a seller is already behind in payments, he or she is facing possible foreclosure. Selling to you at a discount is preferable to losing a lot more equity in a foreclosure.

5. Back Taxes - In most places an owner has to be more than a year behind on property taxes before he faces losing the property. If he is close the the deadline, however, you may get a deal. Just be sure you take into account the taxes that have to be paid.

6. Absentee Owner - It is difficult to deal with a property from a long distance, especially rental units. These sellers often get to the point where selling fast and regaining peace of mind is more important than getting full market value.

7. Income Problems - Whether due to a lost job or declining business, a seller may no longer have the income necessary to keep his home or other real estate. He may need to sell fast to avoid further financial problems.

8. Negative Cash Flow - It doesn't make sense to lose money on real estate every month, so sellers with negative cash flow may drop the price to sell fast. Just be sure that you have a plan to increase that cash flow once you own the property.

9. Damage - This is one of the most common reasons for cheap real estate. The walls have holes, the roof needs replacing, and the cats peed all over the carpets. Fixer-uppers always sell for less, and the scarier they are the cheaper they get. But be sure you know what you are getting into.

10. Sudden Cash Requirements - Sometimes a seller has a better investment or other reasons to need cash fast. For example, selling fast might prevent him from losing another property to foreclosure, or it might mean getting into an investment that will make him far more profit than the little bit of equity he loses selling cheap to you.

Other reasons people sell below market value include sickness, partnerships gone bad, bad tenants, excess debt, and any number of changes in people's lives. Remember, however, that the immediate reason for a lower price is to get a faster or easier sale. To get cheap real estate, then, make offers that close fast and easy.

Note: Please consult with your real estate professionals for further analysis and more information. Investors should always use professional tax and legal experts prior to investing in real estate.

Real Estate Investment Book List

How to Sell a House Fast in a Slow Real Estate Market: A 30-Day Plan for Motivated Sellers

- by William Bronchick

Timing the Real Estate Market: How to Buy Low and Sell High in Real Estate

- by Craig Hall

Welcome to May month's newsletter

Each month I feature a different real estate investment topic. The purpose is to educate readers on ways that real estate is part of an overall wealth building financial plan - for those new to the game and/or for the seasoned investor. This months topic is about defining the different types of commercial real estate.

To Your Successful Investing!

View My Listings

Quote of the Month

"It's easy to get to the top after you get through the crowd at the bottom."

- Zig Ziglar

About Steven Peck

Steven Peck is a commercial real estate broker. His area of specialization is real estate investments. He has been extensively involved in real estate investing for the past 20 years, personally and professionally. He has purchased and managed various real estate investments - including residential, commercial, and farm properties.

408-307-9785 | speck@yournext1031.com | www.cresmartguys.com | My Business Directory

10 Universal Characteristics of Real Estate Property Billionaires

46 out of the world's 691 billionaires made their fortunes in the real estate industry. It has been discovered that this elite group has many common attributes, among their habits, lifestyles, and business styles.

Here are some common qualities shared by America's richest real estate tycoons:

1. Own Commercial property. Billionaires who make their fortunes in real estate have achieved their success by owning commercial properties, rather than residential properties. These billionaires are tycoons with kingdoms of office buildings, shopping centers, apartment complexes, and luxury hotels. These tactics worked very well for the owner of a privately held real estate company, Donald Bren, in Orange County, which made him the 6th wealthiest real estate billionaire. He is also one of the top 150 richest men in the world.

2. Improve your properties: Fortunes in real estate go beyond buying property and waiting for it to appreciate in value. Property values can increase substantially with improvement. Jon Sobrato of Sobrato Development Companies made his fortune in Silicon Valley over a 40 year period. He is a self-made man, and began his development business in 1953 in Santa Clara County. He boasts a portfolio of $1.5 billion, which includes buildings that he constructs.

3. Have a vision for the property possibilities: The area around a property may have changed since the property was first built, and existing property may no longer be the highest and best use for the area any longer. Also, zoning codes may have changed, and may allow for other possibilities for the property which would bring more value to your investment.

4. Earn a college degree. Of the 26 real estate billionaires whose educational accomplishments are known, 20 have a college degree or higher. Five have a high school diploma, and one is a high school dropout.

5. Think outside of the box. While 1/3 of the world's 46 billionaires inherited then grew their real estate fortune, 2/3 of this real estate mogul's are self-made successes of their own, in real estate.

6. Live in California. Of the 21 US billionaires who made their fortune in real estate, more than 1/3 live in Atherton, Los Angeles, Newport Beach, Palo Alto, or Stockton..

7. Be persistent and unrelenting. Billionaires don't let obstacles or pitfalls keep them from achieving their goals.

8. Be strong amid criticism and resentment: People can be resentful and jealous of successful people. Doesn't let criticism of your work deter you from your goals.

9. Get and stay married: Of the 43 real estate billionaires who marital status is known, 37 are married, while only three are divorced, and three are widowed.

10. Have superior information: Stay ahead of your competitors by doing more research, which will give you an advantage in all of your transactions.

Note: Please consult with your real estate professionals for further analysis and more information. Investors should always use professional tax and legal experts prior to investing in real estate.

Real Estate Investment Book List

The Outsider's Edge: The Making of Self-Made Billionaires

- by Brent D. Taylor

Trump Strategies for Real Estate: Billionaire Lessons
for the Small Investor

Welcome to April month's newsletter

Each month I feature a different real estate investment topic. The purpose is to educate readers on ways that real estate is part of an overall wealth building financial plan - for those new to the game and/or for the seasoned investor. This months topic is about defining the different types of commercial real estate.

To Your Successful Investing!

View My Listings

Quote of the Month

"An investment in knowledge always pays the best interest."

- Ben Franklin

About Steven Peck

Steven Peck is a commercial real estate broker. His area of specialization is real estate investments. He has been extensively involved in real estate investing for the past 20 years, personally and professionally. He has purchased and managed various real estate investments - including residential, commercial, and farm properties.

408-307-9785 | speck@yournext1031.com | www.cresmartguys.com | My Business Directory

10 Frequently Asked Short Sale Questions

Here are 10 frequently asked short sale questions that are very helpful especially if you are just getting started or considering short sales as a means to acquiring pre-foreclosures.

1. What happens to the seller's credit rating when they allow an investor to short sell their property?

What typically happens is the loan will show up as 'paid' on their credit report; however there will be a notation that says 'settled for less than originally owed' or something along these lines. It is more favorable for a homeowner to short sell than to have a foreclosure on their credit report.

2. Where do you find investors for short sales?

Depending on where you live, you may see investors who advertise with bandit signs or in your local newspaper. Call the investors directly and ask them if they are experienced in doing short sales and if they would be interested in working with you. Another good place is your local real estate investors club meeting.

3. Define a short sale?

A short sale is really a form of pre-foreclosure sale and occurs when the mortgagee agrees to accept less than the loan amount to avoid foreclosure. A negotiated short sale results in a discounted purchase price for the buyer. The buyer would finance the acquisition much the same as in any conventional realty acquisition... but without the luxury of time.

4. Can an owner profit from a short sale?

The seller cannot profit (monetarily) from a pre-foreclosure short sale.. But there are always exceptions to the rule.

5. How do bankruptcies affect the possibility of doing a short sale?

Most mortgagees won't consider a short sale if the homeowner is in bankruptcy...why? Because negotiating a short sale payoff is considered a collection activity. Collection activities are prohibited in bankruptcy.

6. Can somebody tell me what documents do I have to include in a short sale package?

Documents depend on the lender. Each lender has different requirements. It is typical to require hardship letter, purchase and sales contract, ECOR, settlement statement (HUD 1), net sheet, pay stubs, bank statements, personal financial sheet (monthly budget), amongst other things.

7. What percentage of mortgage companies send someone out for an appraisal on a possible short sale?

All lenders order full appraisal of the property before making their decision to accept or reject the short sale offer. This is there only way of assessing the value of the property.

8. How late in the pre-foreclosure process can you start a short sale?

Try to allow a window of at least 90 days to effectuate a mortgagee approved, pre-foreclosure Short Sale.

9. What is a Due on Sale clause?

'Due on Sale' Clause (DOS) Provision in a mortgage or deed of trust calling for the total payoff of the loan balance in the event of a sale or transfer of title to the secured real property. A contract provision which authorizes the lender, at its option, to declare immediately due and payable sums secured by the lender's security instrument upon a sale of all or any part of the real property securing the loan without the lender's prior written consent.

For purposes of this definition, a sale or transfer means the conveyance of real property of any right, title or interest therein, whether legal or equitable, whether voluntary or involuntary, by for deed, leasehold interest with a term greater than three years, lease-option contract or any other method of conveyance of real property interests. Standard language which states that the loan must be paid when a house is sold.

10. Will banks allow a short sale when the owner has some or a good amount of equity?

If a property has what the lender would consider a substantial amount of equity, chances are they would consider allowing the property to foreclose and then reselling it closer to the retail value. Focus on homes that do not have much equity. Your job will be to create the equity in the home by negotiating a successful short sale.

Note: Please consult with your real estate professionals for further analysis and more information. Investors should always use professional tax and legal experts prior to investing in real estate.

Real Estate Investment Book List

Short-Sale Pre-Foreclosure Investing: How to Buy 'No-Equity' Properties Directly from the Bank - at Huge Discounts

- by Dwan Bent-Twyford (Author) Sharon Restrepo (Author)

The Art of the Short Sale

- by Michael B. Citron

Welcome to March month's newsletter

Each month I feature a different real estate investment topic. The purpose is to educate readers on ways that real estate is part of an overall wealth building financial plan - for those new to the game and/or for the seasoned investor. This months topic is about defining the different types of commercial real estate.

To Your Successful Investing!

View My Listings

Quote of the Month

"If you go to work on your goals, your goals will go to work on you. If you go to work on your plan, your plan will go to work on you. Whatever good things we build end up building us."

- Jim Rohn

About Steven Peck

Steven Peck is a commercial real estate broker. His area of specialization is real estate investments. He has been extensively involved in real estate investing for the past 20 years, personally and professionally. He has purchased and managed various real estate investments - including residential, commercial, and farm properties.

408-307-9785 | speck@yournext1031.com | www.cresmartguys.com | My Business Directory

Why Own Real Estate Investments?

Today, wealth planning and investing stands critical to your health, wealth, and peace of mind for your future. Real estate investments can be a valuable addition to your portfolio mixed with your stock market securities.

Here are many reasons why people own real estate investments:

1. Build wealth part time while keeping your full time job.
2. Protection from stock market volatility.
3. Prepare for retirement with a steady cash flow stream from investment properties.
4. Save for children's college education expenses.
5. Build wealth through property value appreciation and rental income.
6. Use of leverage to maximize return on real estate investment.
7. Create multiple income streams.

Convincing evidence confirms that during the next 20 years, people who own single-family homes, duplexes, 4-plexes, and small apartment buildings will build wealth, and a profit-generating future, that they can count on. Savvy real estate investors will produce profits that will build in these six ways:

1. Dependable and growing flow of income (rent increases)
2. Property value increases (appreciation)
3. Mortgage payoff (amortization)
4. Value creation (property management)
5. Instant gain (equity from bargain purchase)
6. Government benefits (tax benefits, tax deductions, rent vouchers, etc.)

Although short-run economic downturns may jack up vacancies and depress rents, rent levels will go up over time because future demand will increase faster than future supply. Here are three

• Population growth - during the next 20 years, US population will grow by 50 million from 280 million people to 330 million people.
• Household growth - to house the population increase would require a net gain of 20 to 25 million households
• Incomes - the long term outlook for US productivity looks bright, and will add to household buyer power.

With pension plans, stock market volatility, social security, and lifetime jobs all engulfed in a fog of uncertainty, smart real estate investment for the long term will deliver a profit generating future.

Real Estate Investment Book List

Perpetual Income: How-to Generate Cash Flow from Low-End House Investments

- by Bryan Wittenmyer

Investing in Real Estate, 5th Edition

by Andrew James McLean