Good Time For Real Estate Investment Gains In Bulgaria Learn How To Construct A Letter Of Intent Owner Financing Safety Tips Sell Your Real Estate Notes
Bulgaria is a country blessed with great geographical atmosphere. Three mountain ranges run through the country (Stara Planina-The Balkans, The Pirin and the Rhodopes) offering wonderful conditions for skiing in the winter season. The Bulgarian Black sea coast offers a lot of picturesque spots for traveling and spending a nice holiday.You can also practice many outdoor activities like trekking and hiking, horse back riding, bird watching, swimming, skiing, climbing, hunting, fishing… Thinking of relaxing – amazing nature, sunny beaches, healing spas, monasteries and churches, hospitable towns and villages…
The Republic of Bulgaria covers an area of 110,910 square miles with a population of over 7 million. It boasts 354km of dramatic coastline along the non-tidal Black Sea. Its tourist industry is flourishing as people flock to the clear waters of the Black Sea and temperatures that beat the Mediterranean in the summer months.
Interest in beautiful Bulgaria has been growing rapidly as investors look this for the next ‘big thing’. The country is on course to enter the EU – European Union in 2007 and is predicted to see steady & fairly large increases in property prices over the coming years as a result money to develop its banks, telecommunications and transport is being splashed around. New Embassies, offices, conference centres, hotels and motorways are being built and international firms are moving to the Sofia, capital of Bulgaria. In short, these days Bulgaria offers an almost unrivalled quality of life and investment opportunity.
There are four international airports in Bulgaria – Sofia, Plovdiv, Varna and Bourgas and as such is ready for the tourism explosion which is expected here.
The city of Varna is the biggest city at the Bulgarian Black sea coast, situated at the Bay of Varna and offers unlimited number of accommodation facilities, for rent and for sale. The city is surrounded by lots of gardens, vineyards and deciduous groves. museums, the Cathedral of the Holly Mother, the Dolphin show, the Aquarium deserve a very special attention.
A letter of intent is a common way to express your intentions to purchase a property without having to write a formal, legal binding contract. The letter of intent is presented to a seller in the very preliminary stages of a project. The intentions of a buyer are spelled out clearly and simply so the seller knows exactly how the buyer wants to purchase the property, and under what terms.
In my experience, a casual, personal letter to the seller is often the best received way to present your intentions to purchase a property. Some people insist on drafting a formal, multi-page, non-binding contract filled with legal jargon that can often intimidate the seller. A seller wants to easily see how the buyer wants to purchase the property, and determine if he or she can accept the presented terms.
Read on to learn how to construct a letter of intent and what to include.
Let’s investigate the contents of a letter of intent so you, too, can construct one before putting a property under contract.
A letter of intent (LOI) must have five basic elements in its content:
1. The buyer’s name
2. The property address and description
3. Your offer which includes:
a. Purchase price
b. Down payment
e. Due diligence time
f. Closing time
g. Any other clauses or provisions
h. When a formal contract will be written up if the LOI is approved
4. A clause that makes the LOI non-binding
5. Your signature and a place for the seller’s signature
That is about it for the content, believe it or not; it is direct and straightforward without any fluff or nonsense. You are simply covering each detail so the seller knows exactly what the buyer intends to do.
Having an informal letter of intent also allows for easy negotiations. There is no filtering through legally written clauses and other such unnecessary information at this stage in the project. When the letter of intent spells out each detail clearly, the seller can come back with alternate terms of which he or she would be more accepting. This negotiation can go back and forth without the rewriting of lengthy pages that either party may misconstrue.
If the letter of intent is accepted, then the due diligence period will begin. It will continue until the time agreed upon by both parties in which, at the end of the term, a binding contract is constructed. Terms may change during this time if certain aspects of a property, previously not disclosed, are discovered. For example, there may be soil contamination in which the buyer will not want to purchase the property and will safely option out of the non-binding contract. Or, perhaps the property is in a lot worse condition than originally thought, causing the buyer to negotiate a decreased purchase price.
The letter of intent allows for all facts and figures to be verified so that the buyer understands exactly what he or she is getting in the property. If the buyer finds something that he or she can not accept, or something not originally expected, he or she can back out without any recourse or punishment.
Always use a letter of intent to present your preliminary offer to a seller. This will save you writing time, legal fees, and will be easily read and understood by the seller and any other interested parties who must be made aware of your intention to purchase the subject property.
Always construct the letter of intent with honest and detailed facts. Nothing must be overlooked as it can cause problems in the future. Be prepared to negotiate terms, and always know what you are willing to accept if you should get a counter offer.
Use this tool as an easy and direct way to purchase a property every time.
Why offer owner financing when you sell? A higher price, to start with. Add to that a good return on your money, a faster sale, and an easier sale of a “problem property.” Good reasons, but how do you do it safely?
1. Ask for a large downpayment. This is the most obvious way to be safe, but not always possible. The point of owner financing is to help the buyer get the property, and downpayment is one of the areas most buyers need help.
2. Ask for other security. If a buyer wants it with little down, and you like the return you’ll get, make it safe by putting a mortgage on other property that the buyer owns. Agree to release the mortgage when they’ve paid down the balance to a certain level.
3. Credit checks. Ask them to pay for and bring you a credit report. Bad credit might be okay, but type of bad credit is important. An unpaid hospital bill they’re disputing is obviously not as relevant as their unpaid loans.
4. Use your instincts. Are you usually right about people? If so, give some weight to your judgement of your buyer’s character. Personally, I’d trust a man who felt morally obliged to pay his debts over a playboy that happens to have decent income at the moment.
5. Look at the whole picture. Let’s suppose that a bank will loan your buyer 90%, and is okay with you taking back a second mortgage for up to 5%, allowing the buyer to get in with only 5% down. If you’re getting 6% more than you expected by accomodating the buyer’s needs, where’s the potential loss? You’re okay if he never pays, right?
6. Talk to a lawyer. In some areas it may take two years to foreclose on a mortgage through the courts, and only six months to foreclose on a “contract for sale.” Knowing these things can help you structure the deal in the safest way.
Owner financing makes it easier to sell, and to get a higher price. You just have to be safe about it. Let a real estate lawyer review your paperwork, and use the tips here.
People sell real estate notes to raise cash quickly. A real estate note is just the loan document created when you financed the sale of your house or investment property. It could be a mortgage note, or a land-contract or contract-for-sale. The point is that the buyer is making payments to you, and you want to cash in.
You can sell the entire contract, or just a certain number of payments if you want. The buyer of your property will have the same terms and payments. He’ll just be making those payments to somebody else.
Selling real estate notes can be an intimidating process. You know you won’t get the full face value for your note, but will there be other fees you have to pay too? How do you know if the buyer is reputable? What is a normal discount on a note? Here are some guidelines to follow:
1. No upfront fees. If they ask, go someplace else. You should be able to find many note buyers who will check your buyers credit and give you a quote without charging you.
2. No other fees, with a couple exceptions. The buyer has already figured his expenses before making the offer, so there are only a couple fees you should have to possibly pay. First, you may have to pay for the title policy, if there are problems with the title that prevent purchase. Second, if the property appraises at less than the sales price, you may have to pay for the appraisal. You should only pay exactly what these cost the note buyer though.
3. Be sure that the note buyer gives you a written purchase agreement with the purchase price and contingencies. Ask questions about anything that isn’t clear.
4. The note buyer should check the credit of your property buyer upfront. Unscrupulous buyers can quote one price initially, and then lower it later, using the excuse of the property buyer’s bad credit score. This is called “bait and switch,” and it isn’t ethical.
5. Contact several note buyers for quotes. You’ll need to provide information like the type of property, sale price, payment amounts, current balance, etc. They should respond within a day or two.
6. When you get a quote you like, you’ll have to send copies of the Mortgage or Deed of Trust, the Note, the closing or Settlement Statement, and the Title Policy. If there is no recent appraisal, they will usually arrange for that.
7. Processing time varies, so ask. Usually, once you agree to the offer and send the documents (if done by mail), you can expect to receive a certified check or electronic transfer to your account within two to three weeks.
Get Top Dollar When You Sell Real Estate Notes
Notes with a balloon payment get a higher price. “Seasoned” notes sell for more too. Those are notes that have had payments made on them for a while. Some note buyers will buy new or “unseasoned” notes, but if you can wait until six payments have been made, you’re likely to get a much better price.
Higher interest rates and shorter loan periods will get you more money too. This is something to consider before you sell the house, if you think you might sell the note in the future.
You can sell second mortgage notes, and other second-place real estate notes as well. Note buyers will look at these differently though. The first and second place notes can’t add up to much more than 70% of the value of the property, or you’ll be looking at a steep discount
Discounts, by the way, will almost always seem steep. It is common for note buyers to pay 20% to 30% less than the current balance on the note. I’ll let them explain why. Suffice it to say, they need to make money on the deal, and you should be sure you have a good use for that cash before you sell those real estate notes..
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