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Short sales aren’t for everyone, but there’s often a significant amount of money to be made when buying a property from a lender before a home has been foreclosed. So even though they can be frustrating experiences, short sales may be worth checking into as one of your real estate investment avenues. Here are a few suggestions for successfully negotiating short sales owners and lenders.

First, if you approach the home owners sympathetically, you’ll have a much higher percentage of success. Remember, they’re in a financial bind, otherwise they wouldn’t be facing foreclosure and the potential destruction of their credit rating, so when you talk with them about putting together a short sale, bear that in mind. You’re going to need their help throughout the process, so be as gentle and understanding as possible. After all, once the short sale is completed, their loan will show on their credit report as “paid,” rather than being a huge negative mark against their credit score. There will be a notation on their report that indicates the home was sold for less than the original loan amount, but it’s better than foreclosure.

Also, remember that a short sale is being negotiated while the foreclosure clock is ticking. You have to move relatively quickly if you want the sale to be complete before a sheriff sale or public auction is held. (There are some lenders that will halt the foreclosure process until a short sale has been completed or rejected, but that’s not always true, so don’t assume the clock will stop ticking just because you’re involved in a short sale negotiation.)

You’ll generally have to work fairly closely with the home owners to construct a strong hardship letter and to compile all the various things a lender will ask for, such as pay stubs, bank statements, and personal finance information. Lender requirements will vary, but all of them will require a sales contract between you and the homeowners. They’ll also want to see a broker’s price opinion (BPO) before they decide whether or not to accept your short sale offer.

The earlier you can step into the foreclosure process, the better, because you want to be able to help the home owners to jump through all the various hoops in time to close the short sale before the foreclosure date. Generally, 90 days will be enough time, but there are always variables, and the things lenders can ask for can often be frustrating and time-consuming.

Your goal should be to seek out properties in which the owners have little or no equity. Your chances of completing a short sale will increase if there’s not much profit to be made if the lender should decide to go through with the foreclosure process. If there’s a wide spread, the lender might do better to foreclose and sell the property as a repossessed home at a price closer to its market value.

One of the best known, but least understood, ways of buying foreclosure properties is to buy them at a live foreclosure auction. Depending upon where you live, a foreclosure auction will generally be held either at your county courthouse or in some other public place. Sometimes the auction will be conducted by the county sheriff and sometimes by a proxy appointed by the court. Regardless of who is chosen to conduct the auction, the result is the same: the property is sold to the highest bidder.

The first bid is typically made for the foreclosing lender by whoever is representing that company. The bid will generally be for the amount that’s owed, although there doesn’t have to be any actual exchange of money involved. If no one else puts in a higher bid, property ownership reverts to the lender.

In the majority of cases, no one shows up for the foreclosure sale except the proxies for the lender and whoever may be running the auction. That’s especially true if there’s no room for profit between what’s owed and the market value of a property.

Make no mistake: foreclosure auctions aren’t generally places for beginning investors, because you’ll need access to either significant amounts of cash or a large line of credit that you can tap into quickly. If you have either of those resources at your disposal, you can sometimes find great buys at foreclosure auctions, but you have to be careful, because most of the time the amount owed doesn’t leave much room for profit, if any. The properties that do contain a significant amount of room for a profit are most likely to be attended by a bigger group of investors. The key is to do your homework well, because a mistake can be very costly.

If you want to check into auctions yourself, the first thing you have to do is find out which publication is used to list them. Often it’s the legal section of your local newspaper, although some larger cities use specialized business papers to advertise foreclosure sales. There are also various services that will notify you of foreclosures in your target area if you subscribe. If you happen to be interested in a particular property, you can contact the firm in charge of the auction for information about the time and place of the auction. Call the day before the auction to see if the defect has been cured or the sale has been delayed for some reason.

Always remember, if you bid, you must follow through with the purchase. There’s no turning back once you’ve committed to buy a foreclosure property at an auction. So do your homework. It would be wise for you to choose a few target neighborhoods and specialize in those areas, so you’ll know how much profit is available even before you consider bidding on a certain property.

Although it’s rare, you can occasionally find some great deals at foreclosure auctions. If nothing else, you’ll find it educational just to attend a few, just to see how the system works.

You might say their owners love them, but since this article is about advertising, that’s not the answer.

The truth is, both houses that need new owners and dogs who need new homes share the “boring ad syndrome.”

Think about it. Most house ads don’t tell you a thing that creates desire or excitement to see the house. Dog adoption ads are the same.

House ad: “3 br, 2 ba, 5 A. family room, deck, 1800 s.f.”

Dog ad: “6 mo. Shep X male.”

Both ads are “supposed” to make readers pick up the phone and ask for more information. But what is there about those ads to even provoke curiosity? Not much.

If you’re advertising on the internet or in a flyer you produce, there’s no excuse for this brevity. You have the opportunity to paint as many word pictures as there are features to describe.

Your house ad can begin with something enticing such as “River rock fireplace dominates the family room…” and then go on to describe the cathedral ceilings, plush carpeting, redwood decks, etc. in terms that paint pictures in your reader’s minds.

Your dog ad can do the same. How about: “Buster loves to cuddle cats and chase frisbees! Only 6 months old, he already knows “sit and come” and is housebroken.” Then go on with his other fine features. You can even pull some heart-strings by telling how he came to be up for adoption.

But what if you must advertise in the classifieds and thus have very little space?

Describe the most desirable feature and let potential buyers call to learn about the vital statistics. Perhaps it’s the fireplace, or the many windows that bring the outdoors in. Maybe it’s a huge deck overlooking the river. It could be a luxurious master suite. Whatever it is, stress it. And don’t worry if that feature won’t appeal to everyone. You only need one buyer!

In the case of our fictional dog, describe his best personality trait. Let people picture themselves enjoying that dog.

Houses and dogs aren’t the only items for sale that suffer from boring ads. And now that I’ve mentioned it, I’ll bet you’ll see plenty of them every time you pick up a newspaper.

Make sure the ads YOU write don’t suffer from the same affliction. Next time you write an ad - for a car, a couch, a cat, or a kid’s snowsuit - start by painting a mental picture that makes people want to know more.

Get tips and marketing info weekly. Sign up for my free real estate marketing ezine: Real Estate Help. Just send a blank e-mail to realestatehelp@getresponse.com and as soon as you confirm your subscription you’ll have instant access to my special report on ad writing.

The National Association of Realtors recently conducted a study that found that most people select the first Realtor who follows up with them to be their buyer’s or listing agent. So many Realtors fail to follow up with potential leads that it creates an opening for the few who do. Why do so few Realtors follow up with their leads when it clearly leads to success?

The problem is that simply keeping track of potential leads can be a full-time job in itself. Luckily, modern Realtors now have access to inexpensive software that can do this work for you - many programs even automatically follow up with your leads!

Taking Advantage of Top Producer

Top Producer is the leading software program for Realtors. It has a great system that uses email to keep in contact with your clients. Most buyers and sellers enjoy email because it allows them to see that you’re taking care of and remembering them, but it’s unobtrusive. Many buyers take up to a year to make a decision on a home, and it can be easy to forget to call. If you set up an automatic email system through Top Producer, that buyer will receive frequent messages from you, even if you’ve forgotten that they’re still looking! What an easy way to make sure that when they do find that perfect house, they will call your number.

Top Producer Works For Low-Tech Clients As Well

For clients who don’t use email or who prefer a more personal touch, you can still use technology on your end. Set up reminders in Top Producer to tell yourself to call them. Top Producer can network with your handheld device, too, and be programmed to set off an alarm when you get an alert! Use this feature and you’ll never forget to stay in contact again.

Also set up reminders to send out your direct mailings. It can be tempting to put them off, but when it automatically appears on your to-do list, you’ll be reminded to keep up that contact. Make sure that you don’t lose a client when it can be so easy to keep everyone happy!

When you offer your home for sale the atmosphere of your house should be bright and airy. Raise blinds and pull back drapes. Turn on lights in dark corners. Check for burnt-out bulbs, espically in out-of-the-way places.

Noise. Turn off the television. If you wish, tune the radio to an “easy listening” station, with the sound very low. Have your children play outside.

Floors and carpeting. Fix loose tiles. Wax or polish floors. Have carpeting steam-cleaned and repaired as necessary.

Odors. Make sure there are no lingering pet, smoke or cooking odors. Place some potpourri on the stove or pop a baked good in the oven just before buyers arrive.

Clutter. Remove unnecessary clutter from the garage, basement, attic and closets. If your home is crowed with to much furniture, consider putting some things into storage. If a room needs a fresh coat of paint, use a neutral off-white color.

Remember, cosmetic changes do not have to be expensive. In fact home improvements do not necessarily offer a good return on your investment when you sell. It’sattention to the basics anything that says “this home has been carefully maintained” that will help you get the price you want. Keep in mind the following considerations when preparing your home for sale.

If anyone thought that the present sluggishness in many housing markets in North America was going to hurt Realtors the most is better off to think again. It seems that the slowdown in both the new construction and the resale markets and the consequential drop in pricing levels is having reverberations none other than in … Europe. This is so because we have reached such a high level of economic integration, that it can be safely stated that when we screw up in North America our European friends end up footing the bill.

Globalization is the term commonly used to refer to the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology. Clearly the economic interdependence between the United States and Canada on one side, and many members of the Eurozone - especially those belonging originally to the former Western Europe - on the other side has never been more remarked than now. Not only there is a vigorous flow of capitals going both ways, but also the trade of goods is at its apex. And this appears to be the problem.

The European Union has released economic data as to the end of the second quarter, showing a GDP growth of 3.7 percent annualized, its fastest in six years. So fast, in fact, that for the first time ever the Zone has outrun America, Britain and Japan. The engine that has spurred such record-breaking growth, however, was the ever-increasing consumerism mostly on the part of Americans. In essence, Europe has cashed in on the spending power of Americans, which has increased hand-in-hand with the credit that lenders in North America have extended to consumers, secured by their over-valued and over-appreciated real estate equity.

Consumers in North America have had more financial flexibility these past few years than ever before, and for good or bad they have taken full advantage of it. This flexibility has allowed them to choose to carry debt when in the past they may not have had this option. Additionally, it is certainly true that low interest rates have encouraged more borrowing, which in turn has spurred more spending. All the Porsches, BMWs, Volvos and Mercedes that we see on the streets are proof of it.

Now, however, the tide is changing and the American economic powerhouse is slowing down. This fact alone is causing a series of short-term changes that will make life harder for the Euro economies. North-American consumers seem to be more and more reluctant to snap up German cars, French perfumes and Italian vino. The United States, with an annualized GDP growth of 2.5 percent as at June 30 lead the way, and there is a high degree of scepticism among analysts that European consumers alone will be able to fill the 1.2 percent GDP gap so as to keep the Euro GDP high and steady.

Furthermore all this comes at a time when some Euro area countries, most notably Germany and Italy, are due to tighten their budgets. Their public finances need repairing, and they need to act fast. In Germany, the government wants to raise the value-added tax by three percentage points next January. Italy’s newly elected government, based on a very frail one percent majority of a coalition of center and leftist parties, is not openly talking about any such drastic moves but, nonetheless, has initiated already a series of public spending cuts which are sure to make the Fall labour market exceeding Italy’s sweltering mid-August heat by a few degrees. It would appear that the new economic theory of former Prime Minister Silvio Berlusconi of “lowering taxes and raising pensions” was more palatable to Italians than Romano Prodi’s neoclassical approach of “everybody out”. Some unions are calling already for a psychiatric evaluation of the new Prime Minister.

Finally, the European Central Bank (ECB) has begun raising interest rates last December and is expected to keep doing so at least until the end of this year. One may wonder why is the ECB poised to increase interest rates at a time when exports are slowing down. The reason lies not with demand but with supply, as unsold inventories are beginning to accumulate, mostly for political reasons. In fact no one dares to lay off workers now, after the civic commotion caused by the recent French rioting.

It turns out, therefore, that real estate agents in North America are not the casualties of the markets taking a breather, at least not the only ones - Europeans stand to lose a lot more.

Condo Hotel projects are on the rise. From skyscraper hotels to luxury resorts, condo hotels dot the landscape of popular vacation destinations, such as Florida and Las Vegas. And big hitter personalities like George Clooney and Donald Trump, wanting to capitalize on its popularity, can’t wait to attach their name to a condo hotel project. Even Nicky Hilton is jumping into the condo hotel craze. Her boutique style condotel, befittingly named Nicky O, opens this November in Miami, and she has plans for another condotel in Chicago.

But because a star is successful, does that assure his/her hotel will be, too? Steven Roszell, owner and broker of CondoHotels.com and HotelsforSale.com, doesn’t quite think so. “A big name on a project does not guarantee success,” says Roszell. “Ivana Trump, George Clooney, Michael Jordan, and even the famed Hard Rock Las Vegas project are some of the most recent examples of scrapped projects.” Roszell cautions potential buyers not to invest in a condo hotel solely for its illustrious name. “Big brands, such as Marriott, Hilton, and Four Seasons, and seasoned developers and management companies are a better indication of a project’s success. This is their business—they’ve been doing it for years,” Roszell adds.

The condo hotel’s location also does not predict its success. Orlando, the world’s top vacation destination, has reached its saturation point with condo hotels. “It may come down to there is too much supply,” says Roszell. “If investors buy with the intent of flipping the property to make a fast buck, the Orlando market may not be for them.” Roszell also adds, “Investors anticipating a high rental income may need to rethink Orlando for the time being. There’s potential for too much supply.”

Roszell advises his clients to look at three factors when considering a condo hotel: location, growth, and future income. “We tell investors that a condo hotel purchase is a lifestyle investment. Buy in locations where you want to vacation for the next 5 to 25 years.” Roszell also notes how condo hotels have become prevalent in major metropolitan cities, such as Boston, Chicago, and New York. “There is a limited amount of prime location areas that can be built upon in these major cities, and in time it’ll be harder to get a room during peak season in those locations.”

Condo hotels or condotels are hotels that convert a portion of rooms into condominiums and make them available for purchase. Once a property is bought, owners may enjoy their new luxury condo and/or choose to rent it. Owners receive a percentage of any rental proceeds and hotel management takes care of maintenance and cleaning.

The 1031 reverse exchange rules allow you to acquire your like kind replacement property before you sell your relinquished property. We will look more closely at the 1031 reverse exchange rules and potential ways this strategy is being applied.

Reverse 1031 exchanges give the Exchangor the flexibility to take all the time they need to locate the ideal replacement property, without the pressure of the forward 1031 exchange deadlines. Reverse 1031 exchanges have been structured by legal and tax advisors for years, but in terms of the actual “1031 reverse exchange rules” there was precious little guidance from the Department of the Treasury or Internal Revenue Service. Until very recently, investors only could look for guidance from certain tax court decisions that were handed down. Fortunately, exchangors no longer have to rely on the educated guesses of their advisors on 1031 reverse exchange rules about how to properly structure their reverse 1031 exchange transactions. Rules and guidelines have been established are basically as follows:

First, the reverse exchange must involve an Exchange Accommodation Titleholder (EAT). The EAT is an independent third party that holds, or parks, the Exchangor’s Replacement Property following or prior to the exchange period. The EAT must have a qualified indicia of ownership at all times from the date of acquisition until transfer.

There are several types of reverse exchanges. The Safe-Harbor Reverse is an exchange whereby the EAT parks the replacement property prior to the sale of the old property. The exchanger must identify the relinquished property or properties within 45 days of the parking arrangement, and must have the entire transaction complete within 180 days of the parking arrangement.

The Traditional Reverse is a reverse exchange that typically looks identical in structure to the Safe-harbor reverse, yet it will fall outside of the safe-harbor due to the fact that it can not be completed within the time frames provided. Typically, the exchanger is unable to sell their old property within 180 days of the parking arrangement, and therefore the time frames set forth by the safe-harbor are not met. This type of transaction is not necessarily a “red flag” for an audit by the IRS, but does require quite a bit more documentation and consultation by the intermediary to assure the transaction is done properly to avoid scrutiny by the IRS.

A Construction/Improvement Reverse allows the exchanger to park a piece of property or land that will be built upon or improved during the exchange period. This is the most powerful reverse exchange available, as it allows the exchanger to literally create the exchange property they will eventually exchange into through the development or construction process.

A common dilemma for real estate investors is the issue of flipping and taxes. In this article, we look specifically at the tax issues associated with flipping and capital gains.

In recent years, people have been looking at the real estate market as they once looked at the stock market, eyes filled with dollar signs. Flipping became a popular real estate investment strategy to make fast cash. However, one thing that people forgot in their haste to play the game was to be properly prepared with the knowledge to avoid paying high taxes on their profits. Towards that end, here’s some noteworthy information about taxes as you think about your flipping strategy.

First, in order to avoid overly onerous “ordinary income taxes” on flipping properties you must have the property treated as a capital gain. Most often, if you sell the property in less than a year, you will be taxed at the ordinary income tax rate, which can be in excess of 35 %. Only when you’ve held the property for more than a year, does the long-term capital gains tax of 15 % (for most tax payers) come into play. In order to have the property treated as a capital gain you must show that you had no intention of flipping that property. Ironically, this could entail holding the property for this extended period of time which counteracts the whole point of flipping - which is to make money fast.

Also, it’s not only about “when” you flip, but about “how often” you flip. If you flip too often, the IRS may view that this strategy is your “trade or business” and therefore the profits you make are subject to ordinary income and self-employment taxes. And you don’t want that.

Secondly, if you want to employ other strategies to avoid big taxes like installment or structured sales or private annuity treatment while flipping, you can’t. Spreading tax out doesn’t work because the property is not labeled investment property. This again goes back to issue of holding periods and intention of sale.

If you are hoping to use the 1031 exchange strategy as the approach for flipping and capital gains, again you will find yourself between a rock and a hard place. 1031 exchanges are reserved for investment properties only and if you can prove, through holding periods and intention, that the property is a capital gain or investment property, you will not be eligible. The IRS supports investors and savers, not speculators and gamblers.

Once most of your tax deferral options are exhausted, your last resort for flipping and capital gains may be to have that property re-characterized to a capital gain property by moving in to it and treating it as your personal residence. It may work, but holding even longer holding periods apply.

As an individual owner of a property we know the 1031 exchange is an IRS-approved technique to defer gains from one property into another one. This article looks at issues surrounding IRS 1031 exchanges and a partial partnership interest.

As a general concept, when relinquished property is owned by a partnership, the process of exchanging that property for another like-kind replacement property becomes a bit more complicated. Here are a few reasons why:

A partnership, much like a corporation, is an entity unto itself that assumes all characteristics of an individual and is regarded by governments and other institutions as an individual. While many people may have partial interest ownership of the partnership, they, as individuals, are not responsible or liable—the partnership is.

If one owner within the partnership wants to conduct a 1031 exchange, he or she cannot. The IRS will not allow a co-owner to exchange partnership interest for real estate. The partnership only, as an entity, can dispose of the relinquished property and the partnership, as an entity, can acquire the replacement property. In other words, the relinquished piece of real estate is exchanged for the replacement real estate by the partnership – not the individual partners in the partnership.

So what is an individual partner of a partnership to do in order to complete a 1031 exchange? A start would be to try to convince other partners to also complete a 1031 exchange on behalf of the partnership. If that doesn’t work and not all partners agree to the exchange, an individual partner could suggest to be bought out of the partnership. That then relieves an individual partner of any responsibility to the partnership. However, there is a good chance the exiting partner would have to pay taxes on his partnership gain.

If those two options above are unsuccessful, the various partners could consider dissolving the existing partnership arrangement and petitioning for Tenancy-in-Common treatment of the underlying real estate assets. This would restructure the ownership of the property and allow each of the partners to participate in his or her own investment strategies without impacting the other partners. However, there are strict regulations set forth by the IRS to determine what constitutes ownership in such an arrangement. It may take a year or so before restructured real estate ownership is acknowledged as eligible for 1031 treatment.