Flipping Real Estate or Flipping Paper?

Flipping real estate properties is not for everybody but it is the fastest way to make a buck in the real estate business. Most everybody has heard of someone buying a “run down” house for a good price well below market value, fixing it up and selling it at a fair market price. Flipping a “fixer-upper” is definitely one way to turn a reasonably quick profit. I know some people who do it this way but they are more into the contractor and renovation business than they are of the investor mindset.

Some of these “fixer-upper” properties are in need of extensive repair and will involve electrical work, carpentry work, etc. If the investor gets involved and does some or all of this work then there could be enough profit there but if the investor farms out the required labour, profits could get eaten up quickly. For these types of flipping real estate investments, the purchase price needs to be at a huge discount and normally would be found somewhere in the foreclosure stage.

For the person that is in the mindset of investing rather than being in the renovation business then flipping real estate will only involve flipping the paper contract of the property without even taking possession of it. You can flip by entering an agreement to buy a property then sell the contract to another investor before close of escrow.

Using this technique won’t even require you to put your name on the title. Profits will generally be less than the fixer-upper investor but involves much less work and the whole process is much quicker. A fixer-upper investor would not be happy in making a profit of a few thousand dollars for a few months work on renovations but an investor that can just flip a contract for a few hours or days work would be.

Avoid disclosure of your profits to the new buyer by using a double closing.

After making a sweet deal and flipping a contract involving a juicy profit you may not want all these details to be revealed to your buyer. The solution is a double closing, transferring the property to you initially and then reselling immediately at the same lawyer’s office just an hour later to your buyer.

There is a drawback here and that is a double set of closing costs so you would have to weigh it out to see if it’s worth it to your particular situation or not. Further, you can use a title insurance company for the actual closings. For the issuance of the title insurance policy, the title insurance company will prepare the closing documents and close the transaction usually without an addition charge.

Advantages of an Exclusive Property Listing Agreement With Your Real Estate Agent

Property buyers are always exposed to lesser options than the availability. This is because of the unwillingness of estate agents to share the information about different properties at their disposal with each other. This may also give problem to the seller because the property gets exposed to lesser market, and it has fewer chances of getting the highest possible price. The seller is also vulnerable to losing track of the entire procedure, something that can have serious ramifications in the future. However, there is a simple yet efficient solution to this problem. And that resides in the formulation of an exclusive listing agreement between the realtor and the seller.

How does an exclusive listing agreement weed out the flaws of the current system? And how does such an agreement facilitate all the three parties involved.

  • An exclusive listing agreement works both for the seller and the agent. The agent is assured of being financially rewarded if he sells the property for a higher price and thus is more motivated to achieve the same while the seller is most welcome to any high bids that the agent brings in.
  • By law, an exclusive listing agreement allows the agent to put up a yard sign in front of the property for sale. Historically, 60% of all buyers are attracted to properties after noticing yard signs. So when a yard sign goes up, the seller is assured of a higher market for his property which increases the chance of him getting a better deal.
  • Carrying on from the first point, if an agent is assured of his financial future with the property, he will also invest more in advertising the property which will of course attract more potential customers, driving up the demand for the said property and along with it, the price.
  • Through an exclusive listing agreement the property is provided with exposure to other agents resulting in the increase of the demand of the property and involvement of more buyers. A better selling price can be achieved by this procedure.
  • The exclusive listing agreement keeps the property seller involved throughout all of the stages of the transaction. The agent shares all information with the buyer and ensures that it goes without any hindrance.

With an exclusive listing agreement the seller and the agent merge into one team and collaborate collectively towards one single goal; exacting the maximum price of the property. For obvious reasons, such an arrangement is better than a seller working alone trying to sell his property while juggling the task with his other daily activities. Team work has always been considered more beneficial. Therefore, you are recommended to have an exclusive listing agreement with your real estate agent. This will surely make things easier for you.

Key Characteristics of a Commercial Lease Agreement

There are many significant characteristics of a commercial agreement that involves property. The commercial lease agreement is signed between the tenant and the owner of the property to secure the rights of both the parties. The key elements without which this agreement can be termed as incomplete and of no use for tenant as well as for the owner are numerous like address of the property, start and expiry date etc. and are very crucial for the parties involved to know about them. The first is the correct and absolute address of the property. This is very important so that there is no biased feeling and confusion against any of the party. The contract is for a limited period of time therefore the start and the expiry date of the contract should be clearly mentioned in the lease agreement.

Other than the above mentioned features of commercial agreement, the correct name and signature of all the property that are part of the agreement should be written on the agreement and there rights should also be mentioned as well. The amount of the rent and the amount if paid as advance should also be part of the agreement. The commercial lease agreement should also have the mode of payment mentioned in the agreement and the time interval for the payment of the rent must be given there too. The conditions for the usage of property and the specifications for the renewal of the contract must be clearly stated in the agreement as the tenant may want to continue the contract but owner may like to state some more conditions for further use of the property.

Loan Philosophy: The Difference Between Lenders and Investors

As a mortgage broker, I have the pleasure of seeing quite a number of potential loan transactions. I used the word “potential,” because not all of them work out. Actually, there are quite a few turkeys in with the swans!

A common scenario is a refinance or a purchase where the investor comes to me with something like: “Man, this is the BEST property in the area, it’s worth $5 Million Dollars, and I’m buying it for $3 Million! I need a 90% loan and I need it NOW!” OK … so I’ve exaggerated just a bit. In reality the value of the property will probably be accurate for the market, but I’ll still get the request for the high loan to value.

Until recently, I probably couldn’t have gotten a 90% loan on a commercial property except in the limited case of a Small Business Administration guaranteed acquisition loan. First, because no one offered a 90% loan on commercial property and second, because the property most likely wouldn’t have supported the debt service.

The big change in that scenario has been the advent of the “small balance commercial lender” in the last couple of years. They blend commercial and residential underwriting methods to get higher LTVs. I’ll save an article on this kind of lender for later because I want to focus on the reason why a conventional commercial lender doesn’t really care how great of a deal the investor is getting in a particular property. It’s because there is a very basic difference in philosophy between lender and investor.

An investor is concerned with maximizing the return on his equity. Whether through leverage, adding value by making improvements, or adding value through improving a property’s cash flow, the goal is to make as much money on the equity investment as possible. The return he receives is commensurate with the risk he takes with his equity investment

A lender is concerned with something entirely different: Getting paid back! A lender approaches a loan as an “investment,” as well. In fact, in the loan business we often call our lenders “investors.” But these investors approach their investment from the standpoint of managing their risk in return for an acceptable rate of return: The note rate on the loan. The property that the investor views as a growing asset the conventional lender views solely as security for the loan. (Again, I’m not talking about private lenders who might have other motivations).

So when you hear an investor say something like: “I don’t understand why they didn’t give me the loan! The property is worth SO much and they can always take it back if I don’t pay!” Well, the reality is that the lender doesn’t want the property back … they just want their money back, as agreed.

Real Estate Investment Trust Versus RELPs: An Overview

Many people are sometimes confused about the difference between REITs and RELPs. RELPs, or Real Estate Limited Partnerships are a kind of syndication that possess many of a REIT’s benefits.

These benefits include (potentially) financial rewards, investment security (potentially, once again) and, ideally, tax savings. The General Partner is the party responsible for the strategy, execution and day-to-day operations of the RELP, and whose responsibilities are comparable to those of a trustee of a REIT. The General Partner enjoys all decision-making responsibilities for the investment, and also assumes liability for it.

The other partners in the group are Limited Partners. These are the investors, and their status as limited partners means their financial obligation is limited to whatever amount they chose to invest at first – they don’t have to worry about anything else. Just like with REITs, the Real Estate Limited Partnership investor is spared management responsibilities, and is relieved of liability for principal debt. And, just like a REIT, in many cases RELPs allow cash investments of any size.

Unlike Real Estate Investment Trusts, however, which offer long-term investment in a diversified portfolio of properties, and are also extremely easy to cash in, a RELP) is often used for projects that last for shorter terms. Also unlike REITs, RELPs often do not distribute cash until the end of the investment, and properties usually do not immediately generate revenue (which is one way REITs generate regular distributions. And if Limited Partnership vehicles did create revenue, the cashflow would probably be put to best use funding the projects’ construction or redevelopment.

Once the development or renovation is complete, however, the value of the property will often be significantly higher than that of the initial investment. RELPs generally provide higher yields over the short term, and unlike REITs, RELP investments are generally not redeemable before a predetermined “liquidity event”. In most cases any profit would be disbursed to the Limited Partners.

In summary, the main difference between Limited Partnerships and Investment Trusts is that the former are short-term investment vehicles with no payouts during the term of the scheme. However, both are considered to be a high-growth form of investment, and experience little if any of the ups and towns commonly found in the stock market.

This was just a short comparison between REITs and RELPs. Group-owned real estate investing is a big subject, and I look forward to exploring it with you in a future article.

Commercial Construction Tips – Facts About Construction Projects

Commercial construction is often an arbiter of changing economic conditions. Construction projects mean both an improving economy and a way to improve the economy of a given area. Read on to learn more interesting facts about it.

This type of construction helps public sector agencies as well as private firms. Big new schools in areas where people are moving give students a chance to learn in state of the art facilities. New office buildings bring jobs to the area, and the upward spiral continues. Not only do the buildings benefit the users, but the building process itself gives workers a solid job for several months, and the expenditures from the construction project go directly into the local economy.

The United States is second in the world in terms of this construction, regardless of where the company doing the building is headquartered. As much as 10% of all commercial construction takes place in the US, and New York is the city with the most commercial construction going on – $8.5 billion (that’s billion with a B) in 2013. A lot of the construction was for residential buildings. Following New York were Houston and Dallas. Those two cities spent $10 billion in 2013 on commercial projects.

One of the biggest trends in commercial construction is green building. Experts from the Environmental Protection Agency expect that by 2017 as much as 48% of new building will be done with green building materials. To put that in financial terms, it could mean as much as $145 billion dollars.

By 2018, 84% of residential construction companies plan to have at least some of their construction projects classified as green. To get an idea of just what kind of impact this has on the overall economy, consider that residential projects total as much as 5% of the current gross domestic product of the US. As more and more firms add green building to their plans, it might mean that as much as 18% of GDP will be based around green construction.

Big commercial office buildings are going green, too. LEED certification is becoming the main standard, and builders are up to 41% green as of 2012. Just how rapidly is this growing? Consider that only 2% of commercial construction, non-residential, projects were green in 2005. It’s no surprise that states like Hawaii and California are leading the way in LEED projects.

It’s not just the US that is interested in green construction, though. LEED certifications around the world are becoming more common. A study released earlier this year showed that as many as 69,000 LEED projects are going on globally in 150 different countries.

This construction is as important to the global economy as it has ever been, and the increases in such projects over the last few years signal a positive change after the worldwide recession of 2008-09 and the soft recovery that followed. With even more green projects being planned than ever before, commercial construction projects will also be kinder to the planet, meaning everyone will benefit for years to come.

10 Most Expensive Tax Mistakes That Cost Real Estate Agents Thousands

Are you satisfied with the amount of taxes you pay? Are you confident that you’re taking advantage of every available tax break? But most of all, is your tax preparer giving you proactive advice to save on your taxes?

The bad news is that you probably do pay too much tax and you’re probably not taking advantage of every tax break. And most preparers do a poor job of actually saving their clients money.

The good news is that you don’t have to feel that way. You just need a better plan. This article reveals some of the biggest tax mistakes that business owners make. Then, it gives brief solutions to actually solve these problems. Please note that this article is designed to be an informational tool only. Before you implement any of these strategies, you should consult a tax professional for more specific guidelines and requirements.


The first mistake is the biggest mistake of all. It is failing to plan. It doesn’t matter how good your tax preparer is with your stack of receipts on April 15. If you didn’t know that you could write off your kid’s braces as a business expense, it’s too late to do anything when your taxes are prepared the following year.

Tax coaching is about giving you a plan for minimizing your taxes. What should you do? When should you do it? How should you do it?

And tax coaching offers two more powerful advantages. First, it’s the key to your financial defenses. As a real estate agent, you have two ways to put more cash in your pocket. Financial offense is increasing your income. Financial defense is reducing your expenses. For most agents, taxes are their biggest expense. So it makes sense to focus your financial defense where you spend the most.

And second, tax coaching guarantees results. You can spend all sorts of time, effort and money promoting your business. But that can’t guarantee results. Or you can set up a medical expense reimbursement plan, deduct your daughter’s braces, and guarantee tax savings.


The second big mistake is nearly as important as the first, and that’s fearing, rather than respecting the IRS.

What does the kind of tax planning we’re talking about do to your odds of being audited? The truth is, most experts say it pays to be aggressive. That’s because overall audit odds are so low that most legitimate deductions aren’t likely to wave “red flags.”

Audit rates are actually as low as they’ve ever been for 2008 – the overall audit rate was just one in every 99 returns. Roughly half of those audits targeted the Earned Income Tax Credit for low-income working families. The IRS primarily targets small businesses, especially sole proprietorships, and cash industries like pizza parlors and coin-operated laundromats with opportunities to hide income and skim profits.


If you’re like most business owners, you pay as much in self-employment tax as you do in income tax. If that’s the case, you might consider setting up an “S” corporation or limited liability company to reduce that tax.

If you run your business as a sole proprietor, you’ll report your net income on Schedule C. You’ll pay tax at whatever your personal rate is. But you’ll also pay self-employment tax of 15.3% on your first $106,800 of “net self-employment income” and 2.9% of anything above that in 2010.

Let’s say your profit at the end of the year is $60,000. You’ll pay income tax at your regular tax rate, depending on your total taxable income. But you’ll also pay about $9,200 in self-employment tax. This tax replaces the Social Security and Medicare tax that your employer would pay and withhold if you weren’t self-employed.

An “S” corporation is a special corporation that’s taxed like a partnership. The corporation pays the owners a reasonable wage for the work they do. If there’s any profit left over, it passes through to the shareholders, and the shareholders pay the tax on their own returns. So the “S” corporation splits the owner’s income into two parts, wages and pass-through distributions.

“S” corporations are so attractive because even though you pay the same 15.3% on your wages as you would on your self-employment income, there is no Social Security or self-employment tax due on the dividend pass-through. Let’s say your S corporation earns the same $60,000 as your proprietorship. If you pay yourself $30,000 in wages, you’ll pay about $4,600 in Social Security taxes. But you’ll totally avoid $4,600 in self-employment tax on the $30,000 pass-through distribution.

The “S” corporation takes a little more paperwork to operate than the proprietorship. And you have to pay yourself a reasonable wage for your service. That means something like you’d pay for an outside employee to do the same work. But the IRS is on the lookout for agents who take all their income as pass-through. The reasonable wage for agents varies, depending on the amount of time spent on real estate activities and your location.


If you want to save more than the current $5,000 limit (additional $1,000 for taxpayers 50 or older) for IRA’s, you have three main choices: Simplified Employee Pensions (SEPs), SIMPLE IRAs, or 401ks. Generally, if you have a business retirement plan, it must be offered to all your employees and the calculations for contributions must be applied in the same manner as for yourself or any family employees.

The SEP and SIMPLE IRAs are the easiest plans to set up and administer. There’s no annual administration or paperwork required. Contributions are made directly into employee retirement accounts. For SEP plans, self-employed individuals can contribute up to 25% of your “net self-employment income,” to a maximum of $49,000 for 2010. For SIMPLE IRAs, the maximum contribution for 2010 is $11,500 (50 or older can contribute an extra $2,500 catch-up.) SIMPLE IRAs may be best for part-time or sideline businesses earning less than $40,000. You can also hire your spouse and children, and they can make SEP or SIMPLE contributions.

For even larger retirement contributions not limited to 25% of your self-employment income, consider a 401(k) retirement plan. You can even set up what’s called a “solo” or “individual” 401(k) just for yourself. The 401(k) is a true “qualified” plan. And the 401(k) lets you contribute far more money, far more flexibly, than either the SEP or the SIMPLE. For 2009, you and your employees can “defer” 100% of your income up to $16,500. If you’re 50 or older, you can make an extra $5,500 “catch-up” contribution. You can also choose to match your employees’ contributions, or make profit-sharing contributions up to 25% of their pay. That’s the same percentage you can save in your SEP – on top of the $16,500 or $22,000 deferral, for a total maximum contribution of $49,000 per person in 2010. 401(k)’s are generally more difficult to administer. There are anti-discrimination rules to keep you from stuffing your own account while you stiff your employees. Like SEPs and SIMPLE IRAs, you can still hire your spouse and contribute to their account.

If you’re older and you want to contribute more than the $49,000 limit for SEPs or 401(k)’s, consider a traditional defined benefit pension plan where you can contribute an amount to guarantee up to $195,000 in annual income. Defined benefit plans have required annual contributions. But you can combine a defined benefit plan with a 401(k) or SEP to give yourself a little more flexibility.


Hiring your children and grandchildren can be a great way to cut taxes on your income by shifting it to someone who pays less.

  • The IRS has upheld deductions for children as young as 7.
  • Their first $5,700 of earned income in 2010 is taxed at zero to the child. That’s because of the standard deduction for a single taxpayer – even if you claim them as your dependent. Their next $8,375 is taxed at just 10%. So, you can shift quite a bit of income downstream.
  • You have to pay them a “reasonable” wage for the service they perform. This is what you would pay a commercial vendor for the same service, with an adjustment made for the child’s age and experience. So, if your 12-year-old son cuts grass for your rental properties, pay him what a landscaping service might charge. If your 15-year-old daughter helps keep your books, pay her a bit less than a bookkeeping service might charge.
  • To audit-proof your return, write out a job description and keep a timesheet.
  • Pay by check so you can document the payment.
  • You have to deposit the check into an account in the child’s name. But the account can be a ROTH IRA, Section 529 college savings plan, or custodial account that you control until they turn 21.
  • If your business is unincorporated, you don’t have to withhold for Social Security until they turn 18. So this really is tax-free money. You’ll have to issue them a W-2 at the end of the year. But this is painless compared to the tax you’ll waste if you don’t take advantage of this strategy.


Surveys used to show that taxes were small business owners’ main concern. But now it is skyrocketing health care costs. If you’re self-employed and pay for your own health insurance, you can deduct is as an adjustment to income on Page 1 of Form 1040. If you itemize deductions, you can deduct unreimbursed medical and dental expenses on Schedule A, if they total more than 7.5% of your adjusted gross income. But most of us don’t spend that much.

But there is a way to write off all your medical bills as business expenses. It’s called a Medical Expense Reimbursement Plan (MERP), or Section 105 Plan. This is an employee benefit plan, which means it requires an employee. If you operate your business as a sole proprietorship, partnership, LLC, or S corporation, you’re considered self-employed and don’t qualify. But if you’re married, you can hire your spouse. If you’re not married, you can do this with a C corporation. But you don’t have to be incorporated. You can do this as a sole proprietor or LLC by hiring your spouse.

The one exception is the S corporation. If you own more than 2% of the stock, you and your spouse are both considered self-employed for purposes of this rule. You’ll need to use another source of income, not taxed as an S corporation, as the basis for this plan.

Let’s say that you are a self-employed real estate agent and you’ve hired your husband. The MERP plan lets you reimburse your employee for all medical and dental expenses he incurs for his entire family -including you as his spouse. All of these expenses qualify for reimbursement: major medical insurance, long-term care coverage, Medicare and Medigap insurance, co-payments, deductibles, prescriptions, dental care, eye care, chiropractic care, orthodontists, fertility treatments, special schools for learning-disabled children, vitamins and herbal supplements, medical supplies and even over-the-counter medicines.

You can reimburse your employee or pay health care providers directly. You will need a written plan document and a method to track your expenses. There’s no special reporting required. You’ll save income tax and self-employment tax.

If you have non-family employees, you have to include them too, but you can exclude employees who are: under age 25, work less than 35 hours per week, work less than nine months per year, or have worked for you less than three years. Non-family employees may make it too expensive to reimburse everyone as generously as you would cover your own family. But, if you’re offering health insurance, you can still use a Section 105 plan to cut your employee benefit cost. You can do it by switching to a high-deductible health plan, and using a Section 105 plan to replace those lost benefits.

For example, a married self-employed agent with two children pays 25% in federal income tax and 15.3% in self-employment tax. A traditional insurance plan was replaced with a high-deductible plan – $5,000 for the family which cut his premium by $7,620. So, even if he hits that $5,000 deductible, he saves $2,620 in premiums. And now, since he deducts his medical costs from his business income, his self-employment tax savings add another $1,156 to his bottom line. He’ll save at least $3,121 in taxes by switching from his traditional healthcare plan to the Section 105 Medical Expense Reimbursement Plan.

If you can’t use a Medical Expense Reimbursement Plan, consider the new Health Savings Accounts. These arrangements combine a high-deductible health plan with a tax-free savings account to cover unreimbursed costs.

To qualify, you’ll need a “high-deductible health plan” with a deductible of at least $1,200 for singles or $2,400 for employees and an out-of-pocket limit of $5,950 for singles or $11,900 for families in 2010. Neither you nor your spouse can be covered by a “non-high deductible health plan” or Medicare. The plan can’t provide any benefit, other than certain preventive care benefits, until the deductible for that year is satisfied. You’re not eligible if you’re covered by a separate plan or rider offering prescription drug benefits before the minimum annual deductible is satisfied.

Once you’ve established your eligibility, you can open a deductible health savings account. You can contribute 100% of your deductible up to $3,050 for singles or $6,150 for families. You can use it for most kinds of health insurance, including COBRA continuation and long-term care plans. You can also use it for the same sort of expenses as a Section 105 plan.

The Health Savings Account isn’t as valuable as the Section 105 plan. You’ve got specific dollar contribution limits, and there’s no self-employment tax advantage. But Health Savings Accounts can still cut your overall health-care costs.


If your home office qualifies as your principal place of business, you can deduct a portion of your rent, mortgage interest, property taxes, insurance, home maintenance and repairs and utilities. You will also depreciate your home’s basis over 39 years as nonresidential property.

To qualify as your principal place of business, you must (1) use it “exclusively” and “regularly” for administrative or management activities, and (2) have no other fixed location where you conduct substantial administrative or management activities of your trade or business. “Regularly” generally means 10-12 hours per week. The space doesn’t have to be an entire room.

Your business use percentage is calculated by either dividing the number of rooms used by the total rooms in the home if they are roughly equal, or by dividing the square feet used by the total square footage in the home. Special rules apply when you sell your sell your home, but the home office deduction is still a very valuable deduction for most agents.


If you take the standard mileage deduction for your business, you may be seriously shortchanging yourself. Every year there are various vehicle operating surveys that are published. Costs vary according to how much you drive – but if you’re taking the standard deduction for a car that costs more than 50 cents/mile, you’re losing money every time you turn the key. If you’re taking the standard deduction now, you can switch to the “actual expense” method if you own your car, but not if you lease. You also can’t switch from actual expenses to the standard deduction if you’ve taken accelerated depreciation on the vehicle.


The basic rule is that you can deduct the cost of meals with a bona fide business purpose. This means clients, prospects, referral sources, and business colleagues. And how often do you eat with someone who’s not one of those people? For real estate agents and other professionals that market themselves, this might be “never.” Generally, you can deduct 50% of your meals and entertainment as long as it isn’t “lavish or extraordinary.”

You don’t need receipts for business expenses under $75 (except lodging), but you need to record the following information: (1) How much?, (2) When?, (3) Where?, (4) Business Purpose?, and (5) Business Relationship.

You can also deduct entertainment expenses if they take place directly before or after substantial, bona fide discussion directly related to the active conduct of your business. You can deduct the face value of tickets to sporting and theatrical events, food and beverages, parking, taxes and tips.


Now that you see how real estate agents like you miss out on any so many tax breaks, you should realize what the biggest mistake of all is – failing to plan. Have you ever heard the saying “if you fail to plan, you plan to fail?” It’s a cliché because it’s true.

With just a simple investment of your time, you can implement valuable tax-saving strategies that will make a major difference come April 15.

Reinstating a Real Estate License in Ontario – Instructions to Reinstate Your Real Estate License

Real estate agents in Ontario must renew their real estate license every 2 years under the Real Estate Council of Ontario also known as R.E.C.O. They may do so with a registered realty Brokerage in good standing with R.E.C.O. Failing to renew their license on or before their specific renewal date, will result in being ordered to cease and desist trading real estate in Ontario. If the agent does not reinstate his license within 2 years from failure to renew date, R.E.C.O. will terminate the license with no further option of reinstatement.

You may have become an inactive real estate agent and let your license lapse but will probably find yourself back and active sometime in the near or far future. If you decide that your license is valuable enough and worth keeping it active then you will need to reinstate it as soon as possible and avoid total termination. Please be aware that you will need to be registered with a Brokerage. If you will be inactive then you may want to consider joining a non board member real estate Brokerage that assists licensees like you by holding your license without the high costs you may be accustomed to. Here are some simple instructions on reinstating your real estate license in Ontario under R.E.C.O.

A) Visit the R.E.C.O. website. Just Google the term and you will find it easily. Go to “publications and resources” and note and click the “registration forms” tab. The “New or Reinstate Broker/Salesperson” form is the very first one. Click and it should load up easily.

B) To reinstate you must fill out sections A, B, C and F. The second half of section F will be filled out and authorized by the real estate Brokerage that you have decided to register with. The Brokerage is your Employer. When completed, you will find that R.E.C.O. has made it simple to pay using a major credit card by adding their credit card payment form located on page 6. See the updated information on their form for pricing and remember that you will be invoiced for the errors and omissions fees after your application has been approved.

C) Important: Registrants within the first two-year registration cycle must successfully complete three additional educational courses designated by the registrar before making an application for reinstatement of registration. For all other reinstatement’s, you must fulfill the continuing education requirements also before making an application for reinstatement of registration. Make sure you read section D of the form and call R.E.C.O. direct if you are not clear on their information.

Finally, get that application to the Real Estate Council of Ontario as soon as possible. Your real estate Brokerage employer may take care of this for you but hand delivering it yourself is usually a better option and recommended. Here is their information: Real Estate Council of Ontario 3250 Bloor Street West, East Tower, Suite 600, Toronto, Ontario M8X 2X9 Telephone: 416-207-4800 or 1-800-245-6910 and Fax: 416-207-4820

Something originally inspired you to become a licensed real estate agent in Ontario. Inactive for whatever reason led to your license getting terminated. Give yourself the benefit of a potential comeback whether sooner or later and instead of losing this valuable asset, keep it active and reinstate it today. There are options for you now that will allow you to park your license instead of losing it and at a fraction of the cost you are accustomed to. To reinstate or not to reinstate, it’s totally up to you! Good luck.

Commercial Tenant Move in Checklist

In a commercial or retail property, it pays to have some form of checklist that applies to the move in procedure with tenants. The checklist will always help you stay on track when it comes to the correct processes and approvals.

First and foremost it should be said that a tenant must not move into premises until the lease documentation and all financial obligations have been satisfied.

The same rule also applies to fit out construction and compliance. The tenant must not have access to the premises in any way or form until they have successfully signed all lease documentation and paid the necessary rental and guarantees.

Different types of premises

There is a distinct difference in the complexity of the move in checklist that can apply when it comes to different property types. Retail property is perhaps the most complex of property types and for that reason will have a more detailed checklist. Office property will normally have less issues of concern however the checklist will still be reasonably detailed. An industrial property is always more basic and simple when it comes to tenant lease negotiation, fit out design approvals, and moving procedures.

So let’s look at the checklist that can be constructed relative to commercial and retail property management and leasing. Here are some of the big items around which you can add other matters of the local and property nature.

  1. The lease agreement should be completely signed between the landlord and the tenant. If the lease agreement is to support the final compilation of a lease document, then that should also have occurred.
  2. Any of monies associated with the tenant rental, rental guarantees, fit-out monies, security, deposits, and occupancy, should be paid by the tenant prior to access been given.
  3. Agreements should be reached between the parties regards the fit out construction, approvals, layout, and design. Those fit out works should not commence until the necessary landlord approvals are given, and the local building authority has issued the appropriate construction approvals.
  4. Providing the three issues above are completely satisfied and correctly implemented. You can then move to a simple checklist of issues to implement and move through.
  5. Here are some of those things to incorporate into your checklist.
  6. The names, address, and contact details of the tenants to be installed in the premises.
  7. Access details for the premises need to be set and agreed between the parties. That also includes some anticipated moving date. The tenants contract or associated with the fit out works will also need to be controlled when it comes to access.
  8. Give the tenant a list of contacts for the property relating to any general enquiries but also those that relate to any emergency issues. Those contacts would normally include a property manager, and maintenance contractors.
  9. Any special terms and conditions under existing lease documentation should be checked for compliance by the tenant as part of occupancy. That would normally include insurance obligations.
  10. Secondary tenancy issues relating to any extra licensed space and car parking should also be reviewed and implemented. These types of secondary issues may be supported on secondary documentation such as licenses for side agreements.
  11. Brief the tenant on security issues relating to the property and the premises. Take the tenant through the modes of access to the property during the day and then out of hours.
  12. Install the tenants detail on the tenant directory board as soon as they occupy the premises.
  13. Tell the other tenants of the property about the new tenant in the new location. Tell the new tenants in the property about the other tenants located near them. It is important that you integrate the new tenant into the existing tenancy mix and the overall chemistry of the property.
  14. Deliver to the new tenant the rules and regulations that apply to emergency procedures within the building.
  15. Exchange keys for the premises so that any emergency access can be provided as required.

So these are some of the rules that can apply to the installation of a new tenant into an existing commercial or retail property. This list can be expanded subject to your location and property type. You may even have separate checklists for the differences between retail, office, and industrial property.

Keep Organised

An organized process or approach to tenant occupancy always helps the easy transition of a new tenant into an existing investment property. A lease relationship between a landlord and tenant goes for a number of years, and on that basis should be commenced successfully and professionally. That is the job of the property manager.

How Businesses and Self Employed Borrowers Obtain A No Income Verification Mortgage

If you are self-employed, a new corporation or entity or simply took a loss on your personal or business taxes then you may find it difficult to get a commercial real estate loan approval – especially from conventional financial lenders. It sometimes seems that traditional lenders have an unspoken bias against the self-employed and new entities with less than 2 years in business, a company experiencing a bad year, or seasonal workers / businesses.

But there is one solution to this, and it is called a no-income verification mortgage. Now, let us explain about this mortgage first. Afterward, we will tell you about the property owners, corporations, businesses, and small to middle market real estate investors who need this financial product, and the different things to keep in mind before applying for a no-income verification mortgage in Florida and throughout the continental United States.

Navigating the no-income verification commercial lending landscape

A low- or no-income doc commercial loan lender will not demand documentations such as personal or businesses tax returns, pay-stubs, 1099’s, k-1’s, tax transcripts, and other personal or business related income docs. Generally, a commercial mortgage lender offers this financial product to those who are disqualified by banks and other traditional lending sources; the reasons for the disqualification majorly, include large losses displayed on the taxes, a lower taxable income, negative income, hard-to-verify or fluctuating incomes.

The business and self-employed lot, having an unstable income but strong credit, faces such problems. Applicants for a no-income verification commercial loan, however, have to cough up slightly larger down payments; i.e., a substantial deposit through personal savings or equity in security typically 25-30% of the appraised value.

Who requires this loan?

Some groups find it hard to meet the strict requirements of a traditional lender. These groups include:

  • New businesses
  • Contracted personal
  • Corporations or entities declaring a negative taxable income or larger losses than gains
  • Self-employed
  • Unemployed
  • Seasonal workers
  • New immigrants

What must be kept in mind before applying for this loan?

Slightly higher interest rates but competitive enough to allow your investment to create a positive cash flow on your investment

A no- or low-doc mortgage only requires asset based income and other related commercial real estate property documents, and that is why it is easier to qualify – but it generally carries slightly higher interest rates. The interest rates of a no-income verification loan mainly depend on lenders and your credit worthiness. A few lenders offer loans at discounted interest rates; the same figure an investor gets while securing a real estate investment loan traditionally.

Slightly larger deposits

Generally, every commercial lending institution requires a deposit of 25-30 percent; however, a few lenders may require smaller deposits.