Sometimes profit and cash flow are misunderstood. Calculating cash flow is easy. Monthly cash flow is simply the remaining funds an investor has each month after collecting rent and paying all property expenses. Subtract the mortgage payment, insurance, property taxes, mortgage insurance (if applicable), and any other expenses or repairs. The remaining funds are the monthly cash flow. However, profit is a different calculation.

While most homeowners have title insurance, few understand what it does or what it covers. In Texas, most transactions are closed at a title company, and the title company issues a title policy which protects the buyers' ownership for as long as they or their heirs own the home.

In Texas, it is customary for the seller to pay a title policy. However, in any contact, commissions, fees, and terms are all negotiable. If a buyer is financing and obtaining a mortgage, the lender will require a title policy to be purchased as a condition of funding the loan. Regardless, we highly recommend all buyers have a title policy included in their transaction.

Should I use my IRA to purchase a rental property? I frequently have clients ask me this question. There are many advantages in purchasing investment property. I will discuss the advantages of purchasing investment property outside an IRA and also discuss the rules for purchasing a property using an IRA.

I personally invest in rental properties for the following reasons: 1)cash flow; 2)depreciation; and 3)leverage. Understanding these terms is critical if you want to build long term wealth using a portfolio of investment properties.

I just got back from a regional property management conference in Las Vegas which was sponsored by NARPM (National Association of Residential Property Managers). NARPM has yearly national conferences and several regional events for property managers. This conference was specifically held for broker/owners of property management companies (not employees or staff). One of the speakers was an employee of Yelp, a popular online website that allows users to provide feedback for company services. With the rise of social media sites and online tools, Yelp has evolved as a popular online tool. However, Yelp and its procedures raised quite a bit of controversy amongst property managers attending the conference.

We provide a very unique service. We are hired by owners to lease and manage their properties. It is our responsibility to find qualified tenants, collect rents, and manage repairs and any issues with the property. Property owners are our clients, and as licensed real estate agents, we have a fiduciary relationship to our property owners. Our signed management agreements require us to process rents, draft lease agreements, disburse owner funds, and establish specific policies and procedures that benefit our property owners.

I frequently have investors, landlords, or prospective buyers call and ask how the market is doing. Most articles state Austin has one of the best real estate markets in the county. This insinuates that we are experiencing healthy appreciation. In reality, Austin may be one of the best markets in the country. For example, our unemployment rate is lower than the US average and our real estate market is more stable than most areas. However, Austin's home appreciation has been flat if not experienced a slight depreciation the past couple of years. I don't think the real estate market will recover until consumer confidence improves, mortgage restrictions ease, and the unemployment rate returns to pre-recession levels.

Property flipping is a practice where a property was recently acquired by an investor and is sold for a considerable profit within a short period of time. Many lenders have title seasoning requirements for homes that are being flipped by investors. Lenders have specific guidelines that must be met before they will originate a mortgage for a prospective borrower.

Most lenders will require a seller to have ownership a minimum of 60 days before a buyer can obtain a mortgage for the subject property being flipped. Additionally, a desktop appraisal review will be required to further audit the initial appraised value of the home if the seller has not been on title of record for 90 days.

A homestead exemption gives homeowners a discount on their property taxes by lowering the tax assessed value by a set amount and placing a yearly cap on the amount the tax assessed value can increase each year.  In order to qualify for this exemption, homeowners must have owned the home  January 1^st of the current year of filing, occupy home as primary residence, and you and your spouse (if applicable) do not claim a residence homestead exemption on another property.

I frequently get calls from investors or prospective home buyers and sellers who use Zillow or other tools to estimate the value of their home or a home they may be interested in purchasing. These tools can sometimes provide an accurate analysis but are limited in providing a detailed and accurate market value. I will share my experience with three recent transactions. Read more...

A new law was passed April 2011 that changes how loan officers are compensated for a home purchase or refinance transaction. There are two options for borrowers. Borrowers have the option of paying for the cost of originating a mortgage (borrow paid) or have a credit be issued by the lender (lender paid).

The IRS has passed new rules regarding the issuance of 1099 forms for services performed by independent contractors, landlords, and businesses. I the past, businesses were required to issue a 1099 to any individual or business that was paid more than $600 in a single year. If the business was a corporation, you were not required to issue a 1099 form. The new law has changed these requirements.