Insurance and Credit

What is so special about real estate as an investment vehicle, as a way to get wealthy, as a way to create passive income and retire young and rich? Why is this market so different? Why is this an advantage to the creative real estate investor?

I’d like to discuss a couple of things with you. Defaults are at an all time high. People are spending way beyond their means and this is not only on their homes, but with credit cards and other forms of debt as well. We have the bank as well as the home owners to thank for that.

Let’s take a step back and look at the root cause of all of this. Basically, banks would give money to anyone in almost any financial situation. In many cases, this was way beyond the means of most people. So, fastforward a few years and it only makes sense that the real estate market for all kinds of homes is suffering more foreclosures than ever.

Government-guaranteed loans including HUD, FHA, VA as well as many others are going bad. Fannie and Freddie even went belly up. On top of that, banks are being forced to repo homes that they cant sell. Its a great opportunity to buy at fire-sale prices.

The number of homes selling below market value is at an all time high. Because so many people are in a bind and can’t sell their homes when they need to, it’s a buyer’s market. That means we have Motivated Sellers. With so many options, it should be much easier to find a profitable deal.

We have all heard this saying – “in real estate you make your money when you buy and get paid when you sell.” You may put money in your pocket when you sell the property, but if you bought the property correctly, you have lots of money making options. But if you bought the property incorrectly, you may not have any options. So finding motivated sellers and properties below market value is the first goal while investing in real estate.

A great advantage of investing in real estate is simply that there are plenty of buyers out there and more coming every day if you know how to locate, prescreen and close them. Unfortunately the credit crunch is making it difficult, and in some cases impossible, for them to get financing. The creative investor will be able to capitalize on this market. Creativity and knowledge will let you step in where the bank used to and you’ll be paid handsomely for it! What if you could offer owner financing with your properties? What if you could sell to anyone with either cash or credit?

Isnt that amazing? If the prices are so low and the available homes for sale so high, why cant a buyer just find these deals on their own? Nine times out of ten, they lack the knowledge required to execute these transactions. Now you have the knowledge, so get moving!

In the real estate market in California there may yet be some hope. In the past 10 months there has been a shift in home ownership in California. The prices of homes in California have severely dropped and to make things easier for first time home buyers the government has set up a stimulus package and a tax credit when they purchase their first home.

The tax break from California home buyers affects those who purchase a home during the 2009 tax year. It only affects first time home buyers with the eligibility stating that you must not have owned a primary residence in the past three years. The benefit of this tax break equals out to be $8,000 on your 2009 tax return. Another important stipulation is that the purchased home must be your primary residence, which includes homes such as houseboats, condominiums and trailer houses. You must follow the established 2008 IRS guidelines and insist that your loan closing fall between January 1, 2009 and December 1, 2009 to be eligible for the additional return.

California home prices have taken a dramatic plunge, but have turned into a great advantage for the residents of the state. California home purchases have increased; making California one of the leading states in the country in revitalizing the real estate market. Most California homes on the market are the result of recent foreclosures and are owned by the finance company; however, most of these homes are in decent, sound neighborhoods providing the opportunity for people improve their living situations. The price reductions vary from county to county; for instance in Yuba county prices decreased by 41.5% making the average price for a home around $158,000. In Sutter County prices plummeted by a whopping 66% making prices as low as $166,000, prices throughout the state of California averages $224,000. It has been many decades since California homes have been this affordable.

It is a buyers market right now in California; however, the struggling families that are trying to keep their homes and those who are forced to sell because of their economic circumstances will take a loss a considerable amount of equity in their homes value. The government has enacted a program for these California home owners through counseling centers that specializing in refinancing and offering low interest loans. But unfortunately, for some it has come too late.

If you are looking to get involved with buying a home in California then the best method to do so is to use a real estate contact. Most times there are hidden bargains that are not always advertised openly. There may not be a for sale sign on the property, or an advertisement in the paper. Usually the only information that is listed is usually in the states MLS, which a real estate agent can access for you if you request them to.

The dramatic turnaround in California housing prices has now made it affordable for a family earning $53,400 annually to purchase a decent California home and join the ranks of the increasing number of proud California home owners. The new terms of mortgage agreements makes payments more comfortable and less likely for the buyer to fail making the payments.

Californians can take advantage of all the new programs and government incentives to reap the benefits of home ownership. Organizations like Neighborworks Homeownership Center, resale of HUD homes, Counseling and Education, veteran loans, Neighborhood Assistance Corporation of America, of Sacramento, California are some of the organizations to help Californians make their dream of home ownership come true.

As the population increases, more cars are filling the highways. With so many vehicles on the road, chances of car crashes have significantly increased. Even if you think you are a good driver, car insurance is vital for every car owner. Car insurance is required by law in all states and protects you if an accident occurs. Without insurance, you risk having to pay enormous costs in the event of a car crash. Liability Insurance and Collision Insurance are two important types of car insurance that everyone should understand.

Liability Insurance

The laws in most states require a car owner have at least liability insurance on any vehicle they drive. Liability pays for damages resulting from an accident where you have been deemed responsible.

Liability insurance is divided into two categories:

Bodily injury liability covers the policyholder or another covered policyholder if someone else is injured during a car accident. Bodily injury covers loss of wages, medical bills, rehabilitation expenses, pain and suffering, and other expenses associated with the accident. Property damage liability covers the policyholder or another covered policyholder if they damage someones car or property during a car accident. If you crash into someones property such as a house or fence, liability insurance will pay for repairs. State laws usually mandate minimum amounts, but higher amounts are recommended.

If you are in an accident where you are not necessarily at fault and the other driver does not have liability car insurance, you are protected by insurance known as uninsured motorist coverage.

It is suggested that you acquire at least $500,000 or $1,000,000 liability. You will rest easy knowing that you will be covered for all damages

Collision Insurance

Collision insurance is the insurance which pays for damages to your car if you are in an accident and you are deemed responsible. Your insurance policy will pay for costs up to the fair market value of your vehicle. You are covered in such instances as when your car hits another vehicle, when your car hits property such as a lamp post, and if your car hits a parked vehicle.

Advantages of having car insurance include:

If you car is leased or financed, the lender may mandate that you have collision insurance If you have a new car, collision coverage will pay for any repairs or replacements you need

Collision coverage is optional and deductibles vary from $250, $500, and $1000. If you have an old car that is not in great shape, coverage will only pay for the cash value of the car. Collision coverage is not required by law. However, if you are involved in a collision, you will be responsible for fixing any damage or replacing your car.

The amount you pay for car insurance depends on the make and model of your car, your driving record, your age, gender, marital status, and where you reside. When you decide to purchase car insurance make sure you compare quotes from at least three insurance companies. Ask insurers how much liability and collision insurance needs to be purchased to meet your individual or business needs. Check the terms and conditions to make sure they meet state regulations.

When you drive a car, you are carrying a tremendous amount of responsibility. You never know when an accident may happen. You may think you are a great driver, but that does not mean that all of the others on the road are great drivers. It is important to protect yourself in case of an accident. Without car insurance, you may end up in a financially devastating situation that will stay with you for many years.