Month: April 2020

Ways to Finance an Investment Property

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The world has gotten to the point where every income-oriented person is always looking for ways to make extra income, whether passively or actively. Many people love having passive income streams because they give them the chance and time to work on a lot of other things, especially if they have a regular job. One of the best ways to earn passive income is through investment property. And besides providing you with a source of income, you can increase your assets, stabilize your financials through investment property.

However, knowing how to buy an investment property in your name is always the first step. Buying the property is the hardest part, except, of course, you already have the cash lying around in the bank or a rich family member who is going to give you the money. If you are just an average Joe who wants to invest in properties, below are some options that you can use to finance an investment property.

  1. Apply for a bank loan

For investors just starting out in the world of investing, getting a bank loan is the most common go-to option. The only difficulty that many of these investors grapple with is the insistence of banks on up to 30% of the property’s value as a down payment. This could be a bit difficult for an investor who is just getting into the business. Some of the other limiting factors, including poor credit scores and a bad debt-to-income ratio, which make the banks tag them as bad bet and refuse them loans.

But if you can swing it, a bank loan is one of the best ways to finance an investment property. You can get good rates, and once the property begins to yield some income, servicing the loan becomes easy.

  • Tap into your home’s equity

Financially, we do not usually advise using your existing home’s equity, but if you are trying to buy an investment property, it could be a great idea. You have different options, which include using the home equity loan to get the amount you need or extending your mortgage or even cashing out all the equity that you have on your home. Whichever it is you choose, this is a viable option to finance your investment property.

  • Get a hard money loan

Not all investment properties are meant to be kept long-term to yield income. Sometimes you can get a “hard-money” loan in which the property will serve as the security. Lenders that provide loans like this will use the after-repair estimated value of the property to determine their risk. This kind of loan does not use your credit score or debt-to-income ratio to check your loan eligibility.

If you have your sights set on investment property and the whole process is overwhelming for you especially in the area of financing, it is time you talked to experts. Get in touch with Chang Legal LLC Attorneys at Law. Call 847 907 4971 to talk to a lawyer.

Ways to Fight Foreclosure

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A Foreclosure is a situation whereby your mortgage holder, lender, or the bank take over your property because of late in payment. But what do you do when you are behind in paying your mortgage? What do you do when the banks are threatening to foreclose your house?

People will answer these questions based on their experiences, which may differ from person to person. As each person must have had different experiences with different mortgage holders. However, this article is a compilation of a few possible alternatives to foreclosure.

  1. Ask for a Forbearance

This is an agreement you go into with your lender/financial institution to delay foreclosure. With forbearance, your payment is suspended for a few months to allow you to catch up with your previously due payments. With forbearance, you would eventually settle every payment owed, but in the interim, it helps you catch a break and reduces the piling up of debts and, of course, stops foreclosure.

  • Mortgage Modification 

With mortgage modification, you and your lender may need to come up with a modification plan, which in essence, means that you would not need to make any payment, or your required payment is reduced drastically until your financial crisis is over. This is another sure alternative to foreclosure.

  • Set up a repayment plan 

If you are behind your mortgage payment because of a short-term financial issue, for instance, the current lockdown, setting up a repayment plan might be your only option. You and your lender can come up with a new payment plan and structure which will not in any way affect or strain your pockets while the financial issue lasted.

  • Offer a “deed-in-lieu” of foreclosure

This will not keep your home, especially if you owe more than your home is worth; however, it is a viable option in case you have suffered a permanent loss of income. It also does less damage to your credit compared to what a foreclosure would do. This alternative is advisable not because it’ll keep your home, but because it’ll keep your credit at a reasonable level and your property won’t have to go into foreclosure.

  • Short-sale

This is also known as the pre-foreclosure sale. For this to happen, the bank has to agree to allow you to put your house on the market for its current value provided that’s less than you owe. This alternative is only viable for people who bought the property when the market was hot, which has now gone soft.

Conclusion

Whatever you do, complete honesty with your lender and the bank will go a long way in opening up opportunities for any of the above alternatives, because, the goal of these alternatives is to avoid your property from going into foreclosure; therefore, it is very important that you negotiate with your mortgage holder and leave no stones unturned, particularly if you are going the way of short-sale or deed in lieu of foreclosure. Ensure that any agreement you make with the mortgage holder absolves you of being responsible for the remainder of the debt because, if this happens, you would be stuck with that debt.

You can contact Chang Legal LLC Attorneys at Law for a more professional help on how to fight foreclosure or avoid altogether.

Things You Should Know About Buying a Vacant Land

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Sometimes it’s better to build your home than buy one, not necessarily because one is cheaper than the other, but largely because instead of remodeling a house to your taste, you get to build from scratch, be a part of the process and build to your taste. But for any of that to be possible, you have to, first of all, get land on which to build your home. And in every sense, purchasing vacant land can be very tricky, but the aim of this article is to highlight some simple tips that can get you started on buying vacant land.

  1. Have your money ready

Having your cash ready for payment is important because your chances of getting a bank loan to purchase a vacant property are quite slim. This is because there is not enough guarantee for the bank, just in case they have to foreclose or sell it. However, getting a construction loan from the bank is relatively easier. But to purchase the land, you are most likely going to pay with your own money, before starting the process of buying a vacant property, ensure that you have your money ready.

  • Do all necessary checks

Before shelling out the cash for empty land, it is important that you hire a surveyor to survey the land. You should also carry out environmental testing on the land to see if problems like fuel pipelines, toxic waste, poor quality of soil, etc. may affect your proposed building project. Also, if you don’t understand zoning, invite the local zoning authorities to help explain zoning better. With all these in place, it guarantees your safety in your new home and neighborhood, and in case you have to sell the property in the future, you have great features as negotiating tools.

  • Is the land accessible?

Accessibility is just as important as the land itself. And by accessibility, it means two things – easy access to utilities and road. A piece of land may seem the perfect place to build a home, but problems with access to utility lines and good roads can be the things that will make it a challenge to live in the property. Accessibility does not only help you as the homeowner or occupant, it also increases the value of the property in case you have to sell the property.

  • Consider the neighborhood 

Just in case you ever have to sell in the future, ensure that your home is built in a good neighborhood. Nearness to markets, good school area, residential area with low crime and violence rates are some of the essentials that you need first as an occupant and later, in case you have to sell.Buying a vacant property is extremely difficult when compared to buying an existing home, and if at all you have to tow that path, make sure you get all the possible assistance at your disposal. Chang Legal LLC Attorneys at Law is your go-to property lawyer. Get in touch today.

Do this before signing a commercial lease

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Signing a commercial lease involves having a clear picture of what you are about to sign. It may like too much work, but in your best interest, do your due diligence before putting pen to paper. Make sure you ask questions, read the lease agreement word by word and line by line. Do not assume the content of the lease because, most times, it does not contain the things that you expect.

Check below for tips on how you can protect yourself when signing a commercial lease. Doing these things will help you understand what you are getting into better and also avoid misunderstanding or trouble with your landlord. Let’s get to it;

  1. Read the lease over and over

The first thing to do when you receive the lease papers is to create time to read them. Maybe you have discussed some things with the landlord before, such as reducing the cost of the lease or providing certain utilities as part of the lease. Whatever it is that you may have discussed with him or her, read the lease to make sure he or she has included it in the written lease agreement. Also, check the leasing date and every other term that you negotiated to see if they are in writing. Do not take the word of your landlord for it. Anything you want your lease payment to cover, make sure the landlord puts it into writing. This way, you will be preventing future arguments.

  • Understand the lease terminology

It is one thing to read a lease agreement while it is another to get a full grasp of what you have read. There are numerous terminologies that lease agreements contain, which may be outside of the regular dictionary. Do not assume the meaning of a word. Make sure you understand the full meaning of every word you read in the agreement. If you need further help with interpreting a lease agreement paper, get in touch with your property attorney at Chang Legal LLC Attorneys at Law.

  • Is the lease flexible?

You should factor in some uncertainties or eventualities beyond your control. If, at some point, you decide to move your business elsewhere or sell your business, can you sublease the facility? You should put these into consideration and discuss them with your landlord so he or she can include them in the lease terms.

  • Work with your attorney

Your attorney is the only person that you should trust when signing a lease or contract. Your attorney is well-grounded in the law and will spot any unfair or unreasonable term in your lease agreement. Involving your attorney will help you stay ahead and avoid any issues in the future.To ensure that you have a good tenant-landlord relationship, take time to understand your lease and do not be blindsided into signing something you do not understand. Chang Legal LLC Attorneys at Law is the best you can work with when signing a commercial lease. Call 847 907 4971 to talk to a lawyer.