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Roadmap For Commercial Real Estate Syndication

One of the most important requirements for purchasing commercial property is having enough down payment money, called equity, to complete the transaction. A very popular method of raising these funds when you dont have it yourself is by forming a group of people who pool enough capital to let you close the transaction. They get a portion of the income and appreciation for their funds, you get the rest for finding, analyzing, purchasing, and managing the property.

When you decide to take the step to form groups of investors through the process called syndication, you run into a situation where the law may require you take on a specific duty to fully inform your co-investors of all aspects of the property and the investment. Most people getting involved in group investments are usually under-informed or inexperienced with regard to the following group-investment concepts:

The legal aspects of the co-ownership of real estate.

Factors that affect the value of commercial real estate.

The process and responsibilities involved in commercial property management.

The fair compensation to the group manager or syndicator, who later becomes the property manager.

When you take on the role of syndicator, you actually create an agency duty to your co-investors. You have a higher responsibility to disclose all of the aspects that can affect a particular commercial property investment, both good and bad. So when you form a group for investment, its very helpful to have checklist for all of the things you need to do so that you meet your responsibilities to your partners. Part of that check list includes:

1.Researching the available commercial rental property in a particular neighborhood and choosing one to purchase.

2.Preparing a preliminary analysis of the investment. This would include its operating history, status of title, proximity to any environmental or natural hazards, the neighborhood, the local and national economies, and finally, the physical condition of the property.

3.Next, you have to get control of the property in your name with the ability to assign it to a successor entity through a purchase contract or option.

4.Once you gain control, escrow needs to be opened with your name as the purchaser, not that of the entity! Youll assign your purchase rights to the entity before you close.

5.Then you complete an analysis of the income and expenses, and confirm the Sellers disclosures regarding the condition of the property, including its improvements, location, title, and operations.

6.Youll also apply for new debt financing (or assume the existing), depending upon what you indicated in the purchase contract. This obviously wont apply if youre buying your commercial building all cash!

7.At this point in the process, you will want to review your plans for forming and operating your ownership entity (most likely a Limited Liability Company) with experienced accounting and legal advisors. Getting this part correct at the outset will save you major of headaches in the future.

8.Now you get really busy. Youll prepare the investment circular, subscription agreement, Articles of Organization and Operating Agreement for the LLC, pertinent exhibits, and addenda. The syndicator (you) is named as the Manager of the LLC in these documents.

9.You now can use the investment circular to solicit investors to fund your purchase, through the LLC.

10.Once youve chosen your investors (there will be a whole article devoted to this subject), you need to get their signatures on the Subscription Agreement and the Operating Agreement of the LLC. Youll also want to deliver their funds to escrow for the close.

That takes you up to completing the purchase. As you can see, theres quite a bit for a sydicator to do just to get the property purchased. We still have to detail the on-going operation of the property. Ill complete your roadmap in the next article and then we can move on to the individual steps in greater detail.

Article Source: http://www.articlesnatch.com

About the Author:
WANT TO USE THIS ARTICLE IN YOUR E-ZINE OR WEB SITE? You can, as long as you include this complete statement with it: “”The Investment Property Insider” is published by Craig S. Higdon, a veteran commercial mortgage banker. He publishes the e-zine and blog, www.InvestmentPropertyInsider.com, for commercial real estate investors, developers, and industry professionals. Visit the blog and get this free report: “The 7 Biggest Loan Mistakes Real Estate Investors Make And How To Avoid Them.” “‘

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The Short Sale Tax Implications

In case of a real estate there are short sale tax implications which have to be noted. Primarily there are chances of receiving a form 1099-C for the total amount of loss which the lender has to bear. According to an U. S government agency dealing with taxes named Internal Revenue Service this is interpreted as loan forgiveness. Tax payment has to be made on the basis of the financial status of the borrower. If the borrower is solvent and has some assets like saving, he has to pay the required amount of tax.

A borrower can make debt settlement with the lender for a lesser amount than the total amount due. Thereby the former might have to report this debt which has been forgiven as regular income along with some exceptions. The categories which fall under forgiven debt are money due after foreclosure or repossession of property or unpaid credit accounts. The exceptions are:

o The lender exempts an amount which is more than the principal amount of the debt. A 1099-C form has to be delivered to the borrower at the year end. According to the IRS the written off debt amount has to be reported as income while filing tax return by the borrower.

In case of non delivery of the form to the borrower it is assumed to have directly forwarded to IRS by the lender. If the borrower does not report the exempted debt amount as income, there can be serious consequences. One can receive a tax bill or an audit notice if IRS is aware of the transaction on their database.

o Circumstances where the forgiven amount of debt was treated as a gift, one is not required to report the same as income.

o The borrower faces bankruptcy and discharges the debt.

o Borrower’s insolvency before the creditor’s settlement of debt is considered.

Consultation is suggested from a qualified tax and legal counsel to check whether it is possible to avail the benefits from these exceptions.

The debt amount which a borrower escapes is sometimes referred to as phantom income. Often a lender makes a probe to judge the truthfulness of the status of the borrower. This is referred to as deficiency judgment which is the difference between the total amount due and the amount paid out of short sale. Henceforth the burden on the borrower increases further. He loses the property, earns nil from the transaction and can suffer from possible insolvency. This can result in a permanent setback for the borrower.

So there has been a solution to this problem. A new federal legislation has been formulated comprising of a temporary three years moratorium. It relates to the tax treatment of the exempted debt that does not exceed the basis of the owner in the home.

The lender in a short sale makes some verification regarding the estimated closing costs on HUD-1 form used by the settlement agent. The cost includes the taxes, real estate commissions, homeowner dues, title insurance costs and other closing costs. Approval of the said form by the lender is necessary for the closing of the short sale transaction.

The short sale tax implications has been formulated and reviewed continuously to suit both the lenders and the borrowers.

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About the Author:
Short Sale Tax Implications…what implications? All you need to know about Short Sales and tax considerations at http://www.nphsrealestate.org/short-sale/law-tax

The California Real Estate Rollercoaster

The year 2010 brings to a close one of the most volatile decades in the history of the California real estate industry. Median home prices increased at an unprecedented rate to all-time highs five years ago, while the second half of the decade witnessed the sharpest decline in home prices ever recorded. Its hard to imagine that the same ten years that saw homes being purchased sight-unseen at twenty percent above asking price also experienced widespread foreclosures and lofty inventories of properties for sale. Home builders that were once purchasing as much land as they could find were soon abandoning partially completed developments. Homebuyers that once struggled to find a home they could afford were suddenly availed to a wide array of reasonably priced houses. So now that the California real estate rollercoaster has rapidly taken us up and down, what does the future hold?

Excitement aside, it seems safe to say that market stability would be much more favorable when compared against the extreme fluctuations experienced over the previous decade. Thankfully most real estate economic indicators over the past several months do point towards a leveling out of housing values. However, the primary concern in the back of every real estate professionals mind is whether a second wave of foreclosures will negatively impact housing values in the near future. Should we be ready to pull back the safety bar and lift our arms in the air to prepare for the next plunge on the rollercoaster?

This determination should begin with an analysis of two of the most prominent real estate market statistics: housing sales and median prices. A look at California homes sales shows that between 500,000 to 600,000 single family residences have been sold each month in the state for the last year-and-a-half consistently. These stable statistics are well above the trough of 254,650 home sales that occurred in October of 2007. So given the currently high levels of affordability compared to the peak years of the housing boom, a dramatic drop in the number of homes sold seems very unlikely.

A quick examination of California median home prices during the first quarter of 2010 may initially raise fears of a potential double dip as housing values decreased from $306,820 to $279,840. However, it is important to note that the median price of $279,840 was actually 14.1% above the median from a year ago. Affordability is also more than double than the levels of a few years ago when the median home price in California exceeded $550,000. The fact that more buyers can afford to buy homes should continue to drive demand and prevent a significant decline in home prices.

When applying the law of supply and demand to housing values, one must assess the number of homes for sale in order to ensure that this supply, or housing inventory, does not exceed the current level of demand. The first quarter of 2010 revealed a housing inventory of 6.3 months the time it would take for all of the homes currently on the market to sell at the current rate of sales activity. Although this figure may seem large, Californias long-run average is 7 months of inventory. Accordingly, inventory levels below 7 months have always fueled year-to-year price gains in the past. So if inventory levels can continue to be contained, housing values should begin appreciating again in the near future.

Housing inventory is what leads us to the primary quandary as to whether record breaking loan default notices over the past year will lead to yet another wave of foreclosures that will ultimately be re-sold by lenders in bulk. In theory, this could dramatically increase housing inventories beyond demand and cause another drop in home prices. Fortunately this event seems unlikely now that both banks and the Federal Government are increasingly working hard on various levels to promote foreclosure avoidance through loan modifications and short sales. These efforts in combination with recently instituted housing tax benefits, increased affordability, low inventories and increased demand should all help to counter the effects of future foreclosures.

So even though most patrons dont enjoy a relatively slow and stable rollercoaster, it is safe to say that most Californians welcome the idea of this ride becoming a little safer and predictable.


Article Source: http://www.articlesnatch.com

About the Author:
Brian S. Icenhower, Esq, BS, JD, CRB, CRS, GRI, ABR is the CEO of Keller Williams Realty Tulare County, a real estate broker, an attorney, President-Elect of the Tulare County Association of REALTORS, a California Association of REALTORS State Director, a real estate litigation expert witness and former real estate law instructor at the College of the Sequoias.

Short Sale Highlights

We are aggressively and successfully performing short sales thus helping hundreds of people to avoid foreclosure in Charlotte, Lee and Collier counties. No worries if your property is not located in these areas. These highlights hold true nationwide. However, you should always consult your tax professional and attorney for your specific situation. With that said Here are some short sale highlights!!

    • A short sale can have a much less negative effect on your credit than a foreclosure or deed in lieu of foreclosure
    • A short sale acts as a traditional closing with specified close date once we get an approval
    • In most cases a short sale approval will have the language for a waiver of deficiency.
    • If you maintain your credit you may be able to purchase a home in 24 months or less.
    • We have other affiliates who have sold homes to people who have short sold their home 90 days from the short sale date. They kept current on their payment all the way to close and bought 3 months later!!
    • Banks are more willing to do a short sale than foreclose on you. The time is now when things are so lenient and the government encourages it.
    • Banks are making the short sale process even easier!
    • It is estimated that there will be another 3,000,000 short sales, deed in lieu of foreclosure and foreclosures combined nationwide before we see this slow down. Why foreclose when you do not have to?
    • A short sale will cost you NOTHING! If anyone is charging you money to do a short sale, RUN!
    • A short sale is a means to a quicker recovery for you and your family.
    • This can be time to relieve a bad asset for you! IE negative every month b/c the rental market is so low!
    • The short sale process is fairly easy for you There are certain documents that are required. Once we get them from you, it is all up to us!
    • We do not guarantee a short sale but we have a strong closing percentage
    • Short sales can be done with 2 mortgages on the property.
    • A short sale will clean up all past liens Back taxes, HOA fees, etc All are paid by your lender at closing.
    • We average 7 days on the market for short sales.
    • You do not have to be delinquent on your mortgage to do a short sale. It is a personal decision.
    • Depending on how the property is held, you may not be taxed on the deficient amount! Speak with your accountant.
    • Timelines for short sale approval are becoming quicker and quicker.

I am sure I am forgetting some other things, but these should answer some of the most common questions homeowners have about short sales.


Article Source: http://www.articlesnatch.com

About the Author:
Steve Daria is the Broker / Owner at Maxim Realtors, LLC in Fort Myers, Fl.

Maxim Realtors, LLC is short sale servicing all of Lee, Collier and Charlotte Counties That is Punta Gorda, North Fort Myers, Pine Island, Cape Coral, Fort Myers, Sanibel Island, Captiva Island, Lehigh Acres, Fort Myers Beach, Estero, Bonita Springs, Naples, Marco.

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New Developments In Short Sale Transactions

Whether you have done short sales in the past, or you have educated yourself about these transactions, you are probably fairly familiar with the basic function of the real estate deal. Essentially, the owner of the home gives a third party the right to the deed of the home and to negotiate with the bank for a discounted price on the home in exchange for avoiding a foreclosure. The owner of the home does not make any money on the deal, but is able to walk away with salvageable credit and no debt over their head in most cases.

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Foreclosures and Short Sales

In the past, real estate investors would do short sale transactions, and then sell the homes on the open market to make staggering profits. Some of my colleagues routinely made 20 to 50 thousand dollars on short sales in fairly short order once they obtained the deed to the property because people were so eager to buy homes. However, since the real estate market took a dive, short sales have become much more common. At the same time, selling short sale properties has gotten more difficult because there are so many homes on the market. As a result, real estate investors have had to find new and innovative ways to flip short sales quickly.

There are a lot of ways to move short sale properties quickly, but before you get started with that, you need to understand some of the pitfalls that can arise thanks to more stringent lending requirements. If you do not factor in these new developments in lending practice and short sale transactions, you may end up with a property on your hands that you cannot get rid of, your short sale deal could simply fall through all together.

One of the biggest issues with short sales is lenders requirement that the sellers name be on the deed of the property. In a short sale, you are the seller, but if you are trying to arrange a quick flip, you may not have been planning to (or be able to) get conventional funding for the purchase of the property. Ideally, you would have your buyer bring in their funding, then purchase the home and you would get the difference. However, many lenders will not give your buyer funding unless you, the seller, are on the deed. This means that you also have to get funding for the short sale.

Sounds difficult? It certainly did complicate things for a while. However, there is a simple answer to this problem that will enable you to get the funding that you need (and your name briefly on the deed) so that you can finish your short sale flip. Well discuss this solution in the next lesson.

Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1200 real estate deals, owned a construction company, been a private lender, and owned a property management company. Peter currently works with clients all over the US helping them achieve riches in real estate investing. For more information please visit www.CoachingByPeter.com

Article Source: http://www.articlesnatch.com

About the Author:
Peter Vekselman has been successfully investing in real estate since 1996.
He has completed over 1200 real estate deals, owned a construction company,
been a private lender, and owned a property management company. Peter
currently works with clients all over the US helping them achieve riches in
real estate investing. For more information please visit
www.CoachingByPeter.com

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Several Reasons For A California Probate Attorney

Unfortunately, the law isn’t waiting for anyone, and the deceased person’s estate needs to be settled timely. The Last Will and Testament of the deceased defines the person or people that will be responsible for the estate settlement.

The person named in the Last Will to conclude the process is called the estate’s executor. Los Angeles probate court appoints the executor as the personal estate’s delegate through the process. And when you abide in California, hiring a properly qualified California probate lawyer has to be a primary priority.

The deceased is entitled as intestate incase of death without leaving a valid will. State laws define the estate property’s separation by this process. Restrictions of a family member estate are a part of the intestate regulations under the jurisdiction of the state the deceased has lived in.

This is exactly why it is important to deal with a professional estate planning attorney in Los Angeles. Funds mentioned in a beneficiary trust’s name usually avoid the probate proceeding, thus providing better solitude and less administrative costs. This also lets the probate attorney to divide assets quicker.

As you could assume, all estates differ from one another and have uncrossed funds to be valued, vended or divided to beneficiary trusts. Anyway, in order to avert a situation difficult to solve, they should discuss it with the probate attorney prior to executor’s action.

The estate settlement might take anywhere from 9 months to several years before it’s completely paid out and closed.

The deceased also might have left an affidavit on his estate, let’s suppose it’s small. If you live in Los Angeles, then you would need to hire a highly professional probate lawyer that would understand how California small estate affidavit works and would be able to carry you through the probate court, while not violating any norms in California probate code. It is necessary and critical. Nowadays’ financial crisis is not the best time for you to lose your small estate affidavit, or let it stretch to years. Your interest is to settle things as fast as possible. And this is another important reason why you might need to hire a probate lawyer.

If you are an inhabitant of Los Angeles, and you have something similar going on in your life, don’t hesitate about hiring a probate lawyer, especially in case of California small estate affidavit. It’s all in your hands, but you would surely need a professional that would understand your needs and worries, a professional that would diligently carry the case through the probate court and lead you out of it in the rays of victory.


Article Source: http://www.articlesnatch.com

About the Author:
Gregory Lederman represents clients of trust, estate, and probate matters throughout California. estate planning attorney los Angeles, Estate planning lawyer los Angeles, California probate attorney, probate court.

Why A Short Sale May Work Better Than A Foreclosure

When a homeowner realizes that they can no longer pay for their mortgage, they may wonder about their choices. The option of foreclosure may be possible and so will the idea of a short sale in Las Vegas. There are a few differences in both of the choices, that could impact the financial future of person. Whether there is lots of time to decide or just a few days, there are always options that can be discussed.

A short sale is when the home goes on the market for just under what it owes. Banks often like this approach better than just leaving the home, because they may get more for the house selling it that way. Often a house that is up for sale under a short sale, will sell in a fast amount of time.

Homeowners can seek help from banks, real estate agents and legal representation when trying to make the choice. A legal department that specializes in bankruptcy and foreclosure may be able to tell someone what the points are to consider if leaving the home is the only option.

Often when someone knows what the pros and cons are to their choice, they will make one that is responsible for them. Using this type of measure to sell off a property, may be better for someone’s credit. They may be able to get out of their home through selling it, and manage a way to pay off the rest of their debt. Learning how to get out of debt without claiming bankruptcy, may be the best way to salvage a credit score.

When a home is up on the market under a short sale, real estate agents will keep their eye out for it. It is in other buyer’s interests to take a look at the property listed under these circumstances. Typically the buyer is just trying to get out of their loan and the home will be sold for under its value.

Buying a home for under its actual value can allow someone to sell it again and this time make a profit. This type of listing may be great for someone who wants to simply sell it, fix it up and sell or move into a house at a really good rate.

This choice can be made just days before having to foreclose. Real estate agents can put it on the market and try to have it gone again in a matter of days. In some cases bidding wars break out from people trying to get their hands on the cheap deal.

When debts are climbing and the mortgage just cannot be paid, there are other options. While temporary loans may help in the short term, often they are only a quick solution. If someone is out of work or not able to work, then the present situation may also be the same in the future. When time is running out, the best thing to do may be to consider a short sale in Las Vegas.

Article Source: http://www.articlesnatch.com

About the Author:
Schwartz Law Firm (http://www.andopportunities.com/) is focused on short sale Las Vegas as aims to help homeowners who are in financial distress by guiding them through the challenging process of selling their homes when they are worth less than they owe.

Short Sales And Credit Scores – Short Sale Education

A couple of months ago, I wrote the blog “Bankruptcy, Foreclosure, or Short Sale? What happens to my Credit Score?” This month, I’d like to give an update on Short Sales and Credit Scores.

Credit Score:Drops score approximately 60-100 points
Length of Time on Credit Report:7 years
Buying Another Home: Qualify for a mortgage with a decent interest rate after 18-24 months

Note: There are several caveats when it comes to a short sale because short sales are relatively new and credit bureaus are still trying to figure it into their credit risk modeling. In fact, in the future, it has been analyzed that some lenders may look at a short sale the same as a foreclosure.

Above states an 60-100 point hit for a short sale and this hit does depend on how many payments were missed prior to the completion of a short sale

For a short sale, it has been reported that a credit report will show Satisfied with a note that states “Creditor settled for less than the amount due”. If you are lucky, you will just get “Paid In Full”. This does not happen often. Most likely, a short sale will show as a charge off or a settlement

Lenders using the Fannie Mae and Freddie Mac mortgage approval system will see mortgage payments that are 120 days late or receipt of a Notice of Default the same as a foreclosure

Many lenders may not consider a short sale unless the homeowner is late, but more are considering a short sale even if the homeowner is not late with a convincing and full proof of a hardship

Homeowners who have a mortgage under water are more inclined to try a short sale ”short sale” before throwing their hands in the air and going to foreclosure or go through bankruptcy. In 2009, the National Association of Realtors estimated that about ten percent of all sales last year were short sales and it is expected to increase this year.

With Obama’s HAFA program, lenders are provided incentives to perform short sales and so are homeowners because under this program they would receive $1500 for relocation costs.

There is still a lot of confusion around how a Short Sale Secrets will affect a borrower’s credit score. It really depends on how many lates a homeowner has had on their mortgage and how the lender decides to report it to credit agencies, Experian, Equifax, TransUnion.

The main point that homeowners should realize is that if they are successful on doing a short sale to get out of their situation, the road to credit recovery is shorter than if they went to foreclosure. Protecting ones credit score will help to minimize the amount of interest a borrower pays on credit cards an loans.

It has been reported that a homeowner would be able to buy a home after 2-3 years, given they continue to work on their credit after a short sale. If they went to foreclosure, they would have to wait as long as 7 years.

Many homeowner are frustrated on figuring out how to resolve their mortgage being underwater and many are just walking away but this is a mistake. A homeowner can ask for a short sale even if they are not late on their mortgage, but the reality is that a lender has no incentive to allow a short sale if payments are still being made on time.

There are some states that do not allow lenders of 1st mortgages to pursue a seller for the unpaid balance. But in all states, second liens and equity credit lines can pursue the seller unless an agreement has stated otherwise. Borrowers will have to pay tax of any unpaid mortgage balance unless they meet IRS’s home exclusion or insolvency rules. Owners of second or investment properties do not qualify for the home exclusion rules.

Look out for our future blogs/articles from our Short Sale Leadership Series content.To view our blog updates, visit www.whbsolutions.com/blog.

Article Source: http://www.articlesnatch.com

About the Author:
For more information on becoming a Short Sale Education Leader in your community, join WHB Solution’s community of Short Sale Success and join short sale experts at www.whbsolutions.com/members

Funding And Closing A Short Sale

The Trustee is the owner of the property, not the Trust itself.
The Beneficiary has the power to direct the Trustee to deal with the title and proceeds of the property. They also have the right to manage, possess, use, control, sell, rent or mortgage the property. The beneficiary has an economic interest in the property.
When a homeowner puts a property into a land trust they convey fee simple absolute ownership to the Trustee. The land trust will state that legal and equitable title is vested soley in the Trustee with the homeowner named as the beneficiary.
The beneficiary can direct the Trustee to manage the property. Any liens remain in place but do not get paid off at this time. The land trust protects the property from other creditors by making sure no more liens are placed; this is good information for the short sale lender to know.
The homeowner will also sign a purchase agreement with the investors company as the buyer. The trustee is not named as the buyer. Once the trustee owns the property, a purchase agreement can be signed with the Trustee as Seller. Once the contract is accepted, the buyers lender will order a title search and find that the Trustee is the owner of the property and has the right to sell. This is the part of the process that typically stops the transaction. It all boils down to how the underwriter interprets the FHA guidelines.
Lenders (notably FHA and nonconforming) instituted an underwriting requirement that title must be seasoned for varying lengths of time (3 months etc). The rationale is based upon an observation that where properties were sold multiple times, within a short period of time, the loans had a higher default rate and tended to have artificially inflated appraisals and various other forms of loan fraud. Thus, the seasoning requirement was born. Note the key term “sold”, not transferred. The transfer of the property from the Seller to the Trustee is without consideration and constitutes a mere change of identity and therefore, does not reset the title seasoning clock.
Transferring the ownership of the Land Trust is akin to a corporation selling its shares to someone else, while selling some property that it holds title to – it has no bearing on the transaction contemplated between the Trust itself and the bona fide purchaser for value. Nor is there any reason why a personal transaction, that does not affect title to the premises, would be presented to the purchaser’s Lender. Again, it is the Trustee who holds legal and equitable title and is empowered to convey the premises not the beneficiaries who merely have a beneficial interest in the land trust – personally not realty. New York State, for instance, considered such interest to be an economic interest in real property thereby creating a blend of the two interests – a quasi real estate interest that does not rise to a fee simple interest – so that it may collect transfer taxes upon the transfer of such interest.
Once financing is in place, a qualified real estate attorney can help you proceed to purchase the beneficial interest in the property. Beneficiaries have economic interest in real property; therefore, transfer tax returns must be filed and transfer taxes paid when the interest is transferred to a new beneficiary.
This type of closing should always be performed by a real estate attorney who is familiar with land trusts. He will prepare the HUD-1 as if you were purchasing the property; the short sale lender is paid off at this time. The land trust stays in place; the trustee remains the same. Now the property can be sold to an end buyer with no problems.
The process can vary slightly from state to state and should only be done with a qualified real estate attorney who is familiar with the process. Proper structure with attention to the treatment of the beneficial ownership of the land trust is critical.
Due to the increase in real estate fraud and scams, many states have enacted stringent legislation concerning distressed assets. A qualified real estate attorney who has experience with short sales and land trusts will know what you can and cannot do concerning pre-foreclosed homes.
Jodi Funke is the founder of http://www.cashforshortsales.com a company who specializes in short sale transactions. Jodi is a transactional lender who provides funding for the investor to purchase a property on a short sale and sell the property for a profit the same day. Their team of real estate professionals, attorneys and title companies are experienced at handling these transactions while working at the highest level of integrity.

Article Source: http://www.articlesnatch.com

About the Author:
Jodi Funke is a transactional lender who understands this dilemma. “Lack of funds is the number one reason most real estate investors cannot close a short sale deal,” said Jodi. “We provide one-day funding for the investor to buy the property and our nationwide team of closing professionals, attorneys and title companies are experienced in doing back-to-back transactions so the investor can fund the deal and resell the property the same day. It”‘s a win-win deal for all parties involved.” Learn more about wholesale funding at http://www.cashforshortsales.com

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Understanding California Short Sale Rules

We are hearing more and more about the realities of short sales. Making the latest headlines are the concerns addressing the changing California short sale rules. Short sales options by California property owners represent about twenty percent of that regions housing inventory.

In general, a short sale is when a property owner has fallen several months behind in their payments on that property, and there is a new agreement made between the lender and that property owner, to settle the property for less than is owed. The remaining balance is pardoned by the lender, so that both parties can move forward from this irreconcilable relationship. But is it a true move forward?

Click Me! To Find Out Everything
You Need to Know About
Foreclosures and Short Sales

California short sale rules implies that the seller will still be ultimately responsible for the difference left between the money owed on the property and the new purchase price agreed to the new owner. This will still remain a problem for the original owner, after suffering through the lengthy, stomach wrenching ordeal, of the entire process.

The California Association of Realtors are franticly warning realtors that California property owners may be in danger of severe tax consequences if they decide to chose short sale over foreclosure, even if the lender agrees to allow the short sale to proceed after several road blocks, and so forth. The lender can still be instrumental in pursuing judgment against the previous property owner.

While the California short sale rules are still not clear, the possibility for government involvement to pursue wage garnishments for property owners believing that a short sale was their way of putting a bad experience behind them is very real. It is till being debated and reviewed in congress, but a solid decision is not coming fast enough.

Some say that it may be smarter to take the credit hit now and let the foreclosure happen versus try and save those few credit points, and still be subject to the ultimate financial ruin anyway. Either way, there will be some credit damage. Your final decision must be something that you are willing to live with long term. No easy solution, but there is a way to make the best choice for your particular situation.

For Californians, there are several non profit foreclosure counseling organizations, as well as some reliable real estate lawyers available that can help interpret the current California short sale rules for you and help you decide the best course of action to take. Be sure to make a check list. Strategy and planning will also aid you in being able to live with your final decision.

When reviewing the California short sale rules with your counselor, ask if it there is a possibility of owing the California Tax Board as well, as the IRS. You may want to bring up capital gains as well as if there are other work out plans in addition to the ones you may have to create a hybrid plan, and if so what are the long term effects on your credit?

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California Short Sale Rules…what rules? Visit http://www.nphsrealestate.org/Short-sale/California now, to get all the rules and facts on Short Sales in your area.

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