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| Prologue: Does Investing in Real Estate Still Make Sense? | |
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| Why Real Estate Offers Your Best Route to a Prosperous Future | |
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| A Dependable and Growing Flow of Income | |
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| Property versus Stock | |
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| What about Bonds? | |
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| Don't Fall for the Annuity Sales Pitches | |
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| Are Rent Collections Dependable? | |
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| Why Rents Will Continue to Increase | |
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| From Baby Bust to Echo Boom | |
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| New Construction Can't Keep Pace | |
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| More Good News for Property Appreciation | |
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| But First, the Reckoning | |
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| The Relevance to Property Appreciation | |
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| The Interest Rate Kicker | |
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| Reason, Not Faith | |
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| You Can Still Win with Properties (for Now) | |
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| Financing: Borrow Smart, Build Wealth | |
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| The Birth of "Nothing Down" | |
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| Should You Invest with Little or No Cash or Credit? | |
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| What's Wrong with "No Cash, No Credit"? | |
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| Leverage: Pros and Cons | |
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| What Are Your Risk-Return Objectives? | |
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| Maximize Your Leverage with Owner-Occupancy Financing | |
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| Owner-Occupied Buying Strategies | |
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| Homeowners, Too, Can Use This Method | |
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| Why One Year? | |
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| Where Can You Find High-LTV Owner-Occupied Mortgages? | |
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| What Are the Loan Limits? | |
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| High Leverage for Investor-Owned Financing | |
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| High Leverage versus Low (or No) Down Payment | |
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| Creative Finance Revisited | |
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| Are High-Leverage Creative-Finance Deals Really Possible? | |
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| What Underwriting Standards Do Lenders Apply? | |
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| Collateral (Property Characteristics) | |
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| Amount and Source of Down Payment and Reserves | |
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| Capacity (Monthly Income) | |
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| Credit History (Credibility!) | |
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| Character and Competency | |
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| Compensating Factors | |
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| Automated Underwriting (AUS) | |
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| Appraisal: How to Discover Great Properties | |
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| Make Money When You Buy, Not Just When You Sell | |
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| What Is Market Value? | |
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| Sales Price Doesn't Necessarily Equal Market Value | |
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| Lenders Loan Only against Market Value | |
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| The Three Approaches to Value | |
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| Property Description | |
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| Subject Property Identification | |
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| Neighborhood | |
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| Site (Lot) Characteristics | |
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| Improvements | |
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| The Cost Approach | |
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| Calculate Cost to Build New | |
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| Subtract Depreciation | |
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| Lot Value | |
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| Estimate Market Value (Cost Approach) | |
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| The Comparable Sales Approach | |
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| Select Comparable Properties | |
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| Adjusting for Differences | |
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| Explaining the Adjustments | |
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| The Income Approach | |
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| Income Capitalization | |
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| Net Operating Income | |
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| Estimating Capitalization Rates (R) | |
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| Comparing Cap Rates | |
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| The Paradox of Risk and Appreciation Potential | |
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| Always Compare Relative Price | |
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| Valuation: Final Words | |
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| Appraisal Limiting Conditions | |
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| Valuation versus Investment Analysis | |
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| Maximize Cash Flows and Appreciation | |
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| Will the Property Yield Good Cash Flows? | |
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| Arrange Alternative Terms of Financing | |
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| Decrease (or Increase) Your Down Payment | |
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| Buy at a Bargain Price | |
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| Should You Ever Overapy for a Property? | |
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| The Debt Coverage Ratio | |
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| Numbers Change, Principles Remain | |
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| Will the Property Yield Above-Average Appreciation? | |
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| Low-Involvement versus High-Involvement Investing | |
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| Compare Relative Prices of Neighborhoods (Cities) | |
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| Undervalued Neighborhoods and Cities | |
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| Beverly Hills versus Watts (South Central Los Angeles) | |
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| Demographics | |
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| Accessibility (Convenience) | |
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| Improved (Increased) Transportation Routes | |
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| Jobs | |
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| Taxes, Services, and Fiscal Solvency | |
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| New Construction, Renovation, and Remodeling | |
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| Land-Use Laws | |
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| Civic Pride | |
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| Sales and Rental Trends | |
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| Summing Up | |
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| How to Find Bargains | |
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| Why Properties Sell for Less (or More) than Market Value | |
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| Owners in Distress | |
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| The "Grass-Is-Greener" Sellers | |
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| Stage-of-Life Sellers | |
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| Seller Ignorance | |
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| List Your Screening Criteria | |
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| Bargain Sellers | |
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| Networking | |
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| Newspapers and Other Publications | |
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| Cold Call Owners | |
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| Agent Services | |
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| World Wide Web | |
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| Seller Disclosures | |
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| The Disclosure Revolution | |
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| Income Properties | |
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| Summary | |
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| Profit From Foreclosures | |
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| The Foreclosure Process | |
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| Lender Tries to Resolve Problem | |
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| Filing Legal Notice | |
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| The Foreclosure Sale | |
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| REOs | |
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| Buy Preforeclosures from Distressed Owners | |
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| Approach Owners with Empathy | |
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| The Difficulties of Dealing Profitably with Owners in Default | |
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| Prequalify Homeowners and Properties | |
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| Finding Homeowners in Default (Prefiling) | |
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| Networking | |
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| Mortgage Collections Personnel | |
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| Driving Neighborhoods | |
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| Finding Homeowners (Postfiling) | |
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| Meeting the Property Owners | |
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| Two More Drawbacks | |
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| Vacant Houses | |
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| Satisfy Lenders and Lien Holders | |
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| All Parties Are Better Off | |
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| Sometimes Losing Less Is Winning | |
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| Profit from the Foreclosure Auction | |
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| Why Foreclosures Sell for Less than Market Value | |
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| Make the Adverse Sales Efforts Work for You | |
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| How to Arrange Financing | |
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| The Foreclosure Sale: Summing Up | |
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| Profit From Reos and Other Special Sales | |
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| Buy Direct from a Mortgage Lender | |
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| Buy Safely | |
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| Why a Lower Price? | |
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| Finding Lender REOs | |
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| Follow Up with Lenders after Foreclosure Sales | |
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| Locate Specialty Realtors | |
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| HUD Homes and Other HUD Properties | |
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| Homeowners versus Investors | |
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| "As-Is" Condition | |
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| Potential Conflict of Interest | |
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| Buyer Incentives | |
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| The Bid Package | |
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| Department of Veterans Affairs (REOs) | |
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| Big Advantages for Investors | |
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| Fannie Mae and Freddie Mac REOs | |
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| Agent Listings | |
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| Investors Accepted | |
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| Federal Government Auctions | |
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| Buy from Foreclosure Speculators | |
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| Probate and Estate Sales | |
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| Probate | |
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| Estate Sales | |
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| Private Auctions | |
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| How to Find Auctions | |
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| Quick Profits Through Fix and Flip | |
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| Fix, Flip, Profit! | |
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| Looking for "Fixers" | |
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| The Browns Create Value in a Down Market | |
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| Research, Research, Research | |
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| Improvements to Consider | |
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| Thoroughly Clean the Property | |
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| Add Pizzazz with Color Schemes, Decorating Patterns, and Fixtures | |
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| Create More Usable Space | |
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| Create a View | |
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| Capitalize on Owner Nearsightedness | |
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| Eliminate a Negative View | |
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| Enhance the Unit's Natural Light | |
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| Reduce Noise | |
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| Required Repairs and Improvements | |
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| Plumbing | |
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| Electrical System | |
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| Heating and Air-Conditioning | |
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| Windows | |
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| Appliances | |
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| Walls and Ceilings | |
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| Doors and Locks | |
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| Landscaping | |
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| Storage Areas | |
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| General Cleaning | |
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| Safety and Health Factors | |
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| Roofs | |
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| Major Improvements and Alterations | |
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| Can You Improve a Location? | |
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| The South Beach Example: From Derelicts to Fashion Models | |
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| Community Action and Community Spirit Make a Difference | |
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| Many Neighborhoods Offer Potential | |
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| What Types of Improvements Pay the Greatest Returns? | |
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| How Much Should You Budget for Improvements? | |
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| Beware of Overimprovement | |
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| Other Benefits | |
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| No-No Improvements | |
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| Budgeting for Quick Resale Profits | |
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| Estimate the Sales Price First | |
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| Estimate Costs | |
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| Sales Price Less Costs and Profit Equals Acquisition Price | |
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| Comply with Laws and Regulations | |
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| Should You Buy a "Fixer"? | |
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| Too Little Time? | |
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| Put Your Creativity to Work | |
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| More Techniques for High Yields and Fast Profits | |
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| Lease Options | |
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| Here's How Lease Options Work | |
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| Benefits to Tenant-Buyers (An Eager Market) | |
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| Benefits to Investors | |
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| The Lease Option Sandwich | |
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| How to Find Lease Option Buyers and Sellers | |
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| A Creative Beginning with Lease Options (for Investors) | |
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| Lease Purchase Agreements | |
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| "Seems" More Definite | |
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| Amount of the Earnest Money Deposit | |
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| Contingency Clauses | |
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| Conversions | |
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| Condominium Conversion | |
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| Tenants in Common | |
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| Converting Apartments to Office Space | |
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| Master Leases | |
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| Assignments: Flipping Purchase Contracts | |
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| Summary | |
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| Negotiate A Win-Win Agreement | |
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| Win-Win Principles | |
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| The Purchase Contract | |
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| Names of the Parties | |
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| Site Description | |
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| Building Description | |
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| Personal Property | |
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| Price and Financing | |
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| Earnest Money Deposit | |
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| Quality of Title | |
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| Property Condition | |
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| Preclosing Property Damage (Casualty Clause) | |
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| Closing (Settlement) Costs | |
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| Closing and Possession Dates | |
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| Leases | |
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| Contingency Clauses | |
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| Assignment and Inspection | |
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| Public Records | |
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| Systems and Appliances | |
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| Environmental Hazards | |
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| No Representations | |
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| Default Clause | |
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| Summary | |
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| Managing Your Properties to Increase Their Value | |
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| The 10:1 Rule (More or Less) | |
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| Think First | |
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| Know Yourself | |
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| Know Your Finances | |
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| Know Your Capabilities | |
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| Smart Strategic Decisions | |
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| Local Markets Require Tailored Strategies | |
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| Craig Wilson's Profit-Boosting Market Strategy | |
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| How Craig Wilson Used Market Information to Enhance the Profitability of His Property | |
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| Overall Results | |
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| Cut Operating Expenses | |
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| Energy Audits | |
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| Property Insurance | |
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| Maintenance and Repair Costs | |
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| Property Taxes and Income Taxes | |
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| Increasing Value: Final Words | |
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| Develop the Best Lease | |
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| The Mythical "Standard" Lease | |
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| Your Market Strategy | |
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| Search for Competitive Advantage | |
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| Craft Your Rental Agreement | |
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| Names and Signatures | |
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| Joint and Several Liability | |
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| Guests | |
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| Length of Tenancy | |
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| Holdover Tenants (Mutual Agreement) | |
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| Holdover Tenants (without Permission) | |
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| Property Description | |
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| Inventory and Describe Personal Property | |
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| Rental Amounts | |
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| Late Fees and Discounts | |
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| Multiple Late Payments | |
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| Bounced Check Fees and Termination | |
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| Tenant "Improvements" | |
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| Owner Access | |
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| Quiet Enjoyment | |
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| Noxious Odors | |
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| Disturbing External Influences | |
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| Tenant Insurance | |
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| Sublet and Assignment | |
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| Pets | |
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| Security Deposits | |
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| Yard Care | |
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| Parking, Number, and Type of Vehicles | |
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| Repairs | |
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| Roaches, Fleas, Ants | |
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| Neat and Clean | |
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| Rules and Regulations | |
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| Wear and Tear | |
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| Lawful Use of Premises | |
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| Notice | |
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| Failure to Deliver | |
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| Utilities, Property Taxes, Association Fees | |
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| Liquid-Filled Furniture | |
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| Abandonment of Property | |
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| Nonwaivers | |
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| Breach of Lease (or House Rules) | |
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| No Representations (Full Agreement) | |
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| Arbitration | |
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| Attorney Fees (Who Pays?) | |
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| Written Notice to Remedy | |
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| Tenants Rights Laws | |
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| Tenant Selection | |
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| Property Operations | |
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| Evictions | |
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| Landlording: Pros and Cons | |
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| Possibilities, Not Probabilities | |
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| Professional Property Managers | |
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| Sell for Top Dollar | |
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| Agent Services | |
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| Obstacles to By-Owner Sales | |
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| Cost of Brokerage Services | |
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| Listing Contracts | |
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| Obligations of the Sales Agent | |
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| Obligations to Your Agent | |
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| Prepare the Property for Top Dollar | |
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| Compliance Issues | |
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| "As-Is" Sales Still Require Disclosures | |
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| Attract Buyers | |
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| Advertising and Promotion | |
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| Negotiate The Sales Contract | |
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| Pay Less Tax | |
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| The Risks of Change and Complexity | |
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| Homeowner Tax Savings | |
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| Capital Gains without Taxes | |
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| Rules for Vacation Homes | |
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| Mortgage Interest Deductions | |
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| Credit Card Interest | |
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| Rules for Your Home Office | |
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| Depreciation Expense | |
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| Land Value Is Not Depreciable | |
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| Land Values Vary Widely | |
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| After-Tax Cash Flows | |
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| Passive Loss Rules | |
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| Taxpayers in the Real Property Business (No Passive Loss Rules) | |
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| Alternative Minimum Tax | |
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| Capital Gains | |
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| A Simplified Example | |
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| The Installment Sale | |
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| What's the Bottom Line for Sellers? | |
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| Implications for Buyers | |
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| Tax-Free Exchanges | |
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| Exchanges Don't Necessarily Involve Two-Way Trades | |
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| The Three-Party Exchange | |
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| Exchanges Are Complex but Easy | |
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| Are Tax-Free Exchanges Really Tax Free? | |
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| Section 1031 Exchange Rules | |
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| Reporting Rental Income and Deductions | |
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| Tax Credits | |
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| Complexity, Tax Returns, and Audits | |
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| Use a Tax Pro | |
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| Property Taxes | |
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| Summary | |
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| New Trends and Developments | |
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| Lower-Priced Areas | |
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| What about Property Management? | |
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| Tenant-Assited Management | |
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| Property Management Companies | |
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| Emerging Growth Areas | |
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| The Creative Class | |
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| Implications for Investing in Real Estate | |
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| Right Place, Right Time | |
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| Emerging Retirement/Second-Home Areas | |
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| Where to Invest | |
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| Income Investing | |
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| Commercial Properties | |
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| Property Management | |
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| The Upside and Downside | |
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| Opportunity for High Reward | |
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| Commercial Leases Create (or Destroy) Value | |
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| Self-Storage | |
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| Mobile Home Parks | |
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| Profitable Possibilities with Zoning | |
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| Tax Liens/Tax Deeds | |
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| Localities Differ | |
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| Are Tax Liens/Tax Deeds an Easy Way to Make Big Profits? | |
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| Discounted Paper | |
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| What Is Discounted Paper? | |
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| Here's How It Works | |
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| Broker the Note | |
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| Do Such Deals Really Occur? | |
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| Due Diligence Issues | |
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| Should You Form an LLC? | |
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| Different Strokes for Different Folks | |
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| Insufficient Court Rulings | |
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| One Size Doesn't Fit All | |
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| An Income for Life | |
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| Less Risk | |
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| Personal Opportunity | |
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| Internet Appendix | |
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| Index | |