How Do Real Estate Leasebacks Work?

real estate leasebacks

Real estate leasebacks can be a great arrangement for both buyers and sellers.  They also work well with both residential and commercial real estate transactions.

What Are Real Estate Leasebacks?

There are three main elements to a real estate leaseback:

  1. Seller finds a buyer who wants an income property
  2. Buyer buys the property, and the seller remains as a tenant
  3. Buyer gets consistent rental income, seller frees up equity for other uses

How To Structure Real Estate Leasebacks

Real estate leasebacks aren’t seller financing and they aren’t like a lease purchase.  That’s because the real estate has already changed hands.

The buyer needs to do its due diligence on the seller, who is going to become the tenant.  Just because the seller owns real estate doesn’t mean they will have the money to pay the rent after the sale closes.

That’s what’s known in the real estate business as being property rich and cash poor.

Before closing escrow both the buyer/landlord and seller/tenant should have a written lease agreement in place, credit reports and background checks done, with monies from the sale forwarded to the buyer to cover any deposits and upfront rents.

Potential Problems With Real Estate Leasebacks

Real estate leasebacks can be a win-win situation for both the buyer and the seller.  At least for the time when the seller is leasing back.

But what happens when the lease is up and the seller vacates?  Buyers can suddenly find themselves holding a property that is difficult to rent to a new tenant.

Problems can occur with real estate leasebacks when the property is unique or has special deed restrictions placed on the property by the seller.

For example, convenience store operators often do sale-leasebacks as part of their normal business strategy.

But they will also put restrictions on the deed to prohibit the property being used as another convenience store for several years after the lease expires.  The result is that the buyer will be unable to lease to another convenience store and may have difficulty finding another good tenant.

 

Three Easy Ways To Increase Your Home Value

increase your home value

Here are three very easy ways to increase your home value and get buyers to pay more for it.   After all, like the saying goes, why spend (a lot) of money when you don’t have to?

Best Way To Increase Your Home Value

Real estate is all about location, location, location.  But real estate is also about appearance, appearance, appearance.

Improving the curb appeal of your home and its appearance is easy and relatively inexpensive.  Things you can do to improve the appearance of your home and increase its value include routine landscaping, decluttering, and fresh paint in today’s designer colors both inside and out.

Updated Fixtures

New faucets, electrical outlets and switches, and door handles are pleasing to the eye of the new home buyer.  Replacing these items is also pretty inexpensive and can usually be done without using a high-priced handyman or contractor.

You can increase your home value by thinking of updating fixtures as improving the curb appeal of the inside of your house.

Energy Efficient Appliances

For home owners who have a little extra money in their budget,  upgrading to LEED certified, energy efficient appliances can pay off in both the short- and long-run.

Are you thinking about selling your home in the not too distance future?  First-time home buyers will appreciate – and pay extra for – the work you’ve put into updating the appliances in your home to today’s Energy Star standards.

If you’re more of a buy-and-hold home owner, then the money you save by having energy efficient appliances will quickly add up over a few years.

Highly-rated air conditioning units, heating furnaces, water heaters, and kitchen appliances can help save a surprising amount of money with today’s energy efficient standards.

 

 

Real Estate Time Management Tips

real estate time management tips

Here are two real estate time management tips to help take running your real estate business to the next level.

Emails Take A Lot Of Time

There are certain tasks in any business that are affectionately called ‘time sucks‘.

Time sucks are things that, well, take up a lot of time without giving you anything in return.  Like more income, for example.

Email can be a huge time suck in any business, but especially in real estate.  That’s because real estate agents only get paid when a deal is done . . . and not by the hour or on a salary.

Even for correspondence that is time sensitive, checking, sending & receiving emails should be limited to two or three times each day.  Many people schedule their email times for first thing in the morning.  Then again around lunchtime, and toward the end of the day.

Have A Routine & Stick To It

Another good real estate time management tip is to have a routine and stick to it.

Devote a certain amount of time each day – at the same time each day – to tasks such as real estate marketing & prospecting, or client outreach, and administrative work.

Remember, having a successful real estate business isn’t about how many hours you work each day.

It’s about how smart you work!

Two Tips For New Landlords

tips for new landlords

Good tips for landlords are hard to come by, especially if you are new to the business of real estate property management.

Here are two more tips for new landlords that can save a lot of time, money and trouble.

Pictures Don’t Lie

Experienced real estate property managers and landlords leave as little as possible to the tenant’s imagination.

That’s why it’s a good idea to take photos of the appliances.  This includes the model label on the back of the machine.  Then, include this detailed information as part of the written real estate lease contract.

That way if an appliance happens to be missing during the move-out walk through it will be much easier to determine the replacement cost that the tenant is liable for.

Utilities Should Be Turned On

The rental lease that the tenant signs should specify that the utilities will be on when the move-out walk through is done.

Most leases actually call for this, but frequently the tenant doesn’t keep the electric, water, and gas turned on.

The reason for having the utilities on during the walk through is so the landlord or property manager can check for active water leaks and other damage that may have been caused due to tenant neglect.

Other Tips For New Landlords

New landlords are always anxious to get their first rental property rented.

But getting the wrong tenant will be much more expensive than taking the time to find and keep a great tenant.

A few other tips for new landlords include:

  • Don’t negotiate on the rent amount or down payment
  • Always run a tenant income and credit report and background check
  • Put everything in a written contract
  • Be aware of the landlord tenant laws in the market where your rental property is located

Remember, it’s always more expensive to get rid of a bad tenant – and to fix any damage caused by them – than it is to take the time and find and keep a great tenant to rent your property.

 

 

 

Three First Time Home Buyer Tips

first time home buyer tips

Buying a home isn’t as easy as it may seem.  Here are a few first time home buyer tips to make the process go smoothly and to help save on housing costs.

First Time Home Buyer Tips #1

It’s better to buy a smaller home in a neighborhood that you love, instead of a bigger home in an area that you don’t like.

There once was a couple who bought a new home that backed to a major highway.  Of course there was a lot of traffic noise.  But they figured it wouldn’t be a bother since they didn’t spend that much time outside.

Six months later they put the house on the market for sale.  Not because it had appreciated in price, but because they couldn’t stand living there.

They were so desperate to move, they were even willing to sell at a loss!

Two Are Better Than One

Although bigger isn’t always better, it is when choosing the number of bedrooms in your new home.

That’s the second most important of these three first time home buyer tips.

First time buyers tend to think only of their personal situation rather than how easy the home to be to re-sell.  Buyers who have a family, or are looking for extra space to rent out as a vacation rental property on websites such as  Airbnb, will automatically pass over a smaller home for sale that has only one or two bedrooms.

Creative Financing

Sometimes you have to be creative and think hard about how to make the best offer in a seller’s market.

As attractive as they might seem at first glance, interest-only loans can end up being a big problem for the first time home buyer.

Many people are used to a real estate market that only goes up.  But history shows that all markets – real estate in particular – run in cycles.

Financing with an interest-only loan means that none of the principle is getting paid off, and that the borrower thinks that interest rates will always be low.

Because interest-only financing options are for short periods of time, the buyer may end up having to re-finance the loan when interest rates are beginning to rise.

 

How To Get The Most From Your Freelance Real Estate Copywriter

freelance real estate copywriter

If you’re hiring a professional freelance real estate copywriter for your project you want to be sure you’re getting the most for your money.  Be it a small ad on Facebook or a real estate profile for LinkedIn, a blog article for your real estate website, or an entire content creation project.

Here are three things that you can do to ensure you get the five-star product you’re looking for.

Know Your Freelance Real Estate Copywriter

A lot of the real estate copywriting that I do is through the Upwork platform (click for my profile there) where I am a top rated freelancer.  But that doesn’t mean what I write is going to be a match for every client.

Some clients may want a different writing style.  Others may find my rates out of their budget.  Or I simply may have too much on my plate to complete their project in the time frame that they’re looking for.

Upwork makes it easy to see the past types of project a freelance real estate copywriter has worked on and their client satisfaction rating as well.

Know Your Real Estate Topic

Oftentimes clients who hire a real estate writer have only the vaguest idea of what their real estate topic is going to be.  Usually this happens with real estate people who are launching a new website.  Other times they are entering a new market – for example, a Middle Eastern client wanting to introduce its readers to the U.S. real estate market, or vice versa.

Sometimes a client not having a specific idea of a topic can be good, provided you have a good writer who can work from the basic guidelines that you give him or her.

Other times not having an idea of your topic can create problems, especially when clients – either accidentally or on purpose – ask for multiple revisions from their freelance real estate copywriter as a way of figuring out what they really want their real estate article to be about.

Know Your Target Audience

In order for your real estate writer to create the most effective copy possible, they need to know who they are writing too and also how to ‘get inside the head’ of your target audience.  The more you know about the characteristics of your potential buyers- or tenants if you are a landlord – the better.

Some clients believe that everybody is a prospect for what they have to sell, and on a very generic level that may be true.  But that’s how you end up with a generic piece of copywriting.

Take this article for example.  I could have written about copywriters in general, but instead we’re discussing freelance real estate copywriters.  It’s a subset of the copywriter category topic, and something that both you and I are specifically interested in.