Table of Contents
Preface xi
Introduction 1
The First New World of Real Estate 2
The Credit Crisis, the Housing Crisis, and Mortgage Fraud 5
Today's Brave New World of Real Estate 11
1 Ten Things That Have Changed in Real Estate, Ten Things That Haven't 13
Ten Things That Have Changed in the Real Estate Industry 15
Ten Things That Haven't Changed in the Real Estate Industry 30
2 What Buyers Need to Know Now 41
The Old Rules of Residential Real Estate 43
The New Rules for Buying 45
3 The New World of Mortgage Finance 59
Financing (or Refinancing) Your Home in an Era of Declining Home Values 61
The Changing Roles of Fannie Mae and Freddie Mac 63
The New Rules of Mortgage Finance 65
Document Checklist for Your Mortgage Loan Application 76
Today's Loan Options: Fixed-Rate Versus Adjustable-Rate Mortgages 81
What You Need to Know About FHA Loans 83
What to Do When You Don't Have a Down Payment: Options for 100 Percent Loans 86
Getting a Jumbo Mortgage 92
Home Buyer Closing Costs and Fees 95
Changes in the Appraisal Industry 103
4 Fixing Your Credit History and Credit Score Forever 111
How Credit Scores Are Calculated 115
What Is the Difference Between Great and Fair Credit? 116
What You Need to Know About Credit Score Calculations 118
How to Repair Your Credit History and Raise Your Credit Score Forever 122
Credit Repair Scams to Avoid 129
What to Do When Someone Else Damages Your Credit 132
How to Contact the Three Major Credit Reporting Bureaus 133
Credit or Security Freezes 134
How to Protect Yourself Against Identity Theft 136
Credit-Monitoring Services and Other Tools 138
5 What Can You Afford to Buy? 140
Calculating Your Income, Assets, Expenses, and Liabilities 143
Expenses: How Much Do You Spend in a Year? 144
Adding Up the Costs to Own, Operate, and Insure Your Home 149
The Costs of Buying and Owning Investment Property 152
Making Trade-Offs and Compromises 157
6 Down Payment and Reserve Money: Where to Find it and Where to Stash it 160
How Much Cash Do You Need? 161
Sources of Cash for Your Down Payment and Closing Costs 162
Down Payment and Mortgage Assistance Programs 164
How to Find a Down Payment or Mortgage Assistance Program 170
Smart Places to Stash Your Cash Until You're Ready to Use It 171
7 Identifying Amazing Opportunities: Short Sales, Foreclosures, Fix-And-Flips, and Buy-And-Holds 177
What Is a Short Sale? What Is a Foreclosure? 179
The Skinny on Auctions 183
Why Buy This House Over That House? Learning Selectivity 190
Investors: Buying a Fix-and-Flip or a Buy-Hold Property 196
Creating an Amazing Opportunity Checklist 200
Building the Perfect Home-Buying Team 203
Seven Winning Contract Negotiation Strategies 210
Negotiating with a Lender for a Short Sale 212
Negotiating with a Lender for a Foreclosure 215
8 The Art of Savvy Real Estate Investing 217
Profiting from Trends and Opportunities 218
Finding Money for Real Estate Investments 222
Pricing Investment Property: Learning How to Calculate the Cap Rate 230
Understanding 1031 Exchanges 232
Starting a Real Estate Investing Business: When LLCs Make Sense 235
Onward and Upward 241
Appendix
I Top Ten Mistakes We're Now Making in the New World of Real Estate 243
II Do You Qualify for a Home Buyer Tax Credit? 250
III Six Tax Mistakes Real Estate Investors Often Make 253
Glossary of Real Estate Terms Every Home Buyer or Real Estate Investor Should Know 257
Acknowledgments 277
Index 281
About The Author 292