Cover image for The home buyer's advisor : a handbook for first-time buyers and second-home investors
The home buyer's advisor : a handbook for first-time buyers and second-home investors
McLean, Andrew James.
Personal Author:
Publication Information:
Hoboken, N.J. : J. Wiley, [2004]

Physical Description:
xviii, 291 pages : illustrations ; 24 cm
Format :


Call Number
Material Type
Home Location
Item Holds
HD259 .M39 2004 Adult Non-Fiction Non-Fiction Area

On Order



The tax-smart guide for first-time buyers and second-home investors

Whether you're a first-time home buyer or a seasoned investor, this practical guide covers everything you need to know to invest safely, confidently, and profitably in today's real estate market-while getting the most out of the latest tax laws.

The Home Buyer's Advisor shows you precisely what to look for in a real estate investment, where to find the best buying opportunities, how to use proven holding strategies such as land-banking and lease options, and how to make your home a secure foundation for future real estate investments. Ideas for a secure retirement are also included. Packed with ideas, strategies, and real-world examples, Andrew McLean's Home Buyer's Advisor will show you how to:
* Take advantage of a wide range of financing methods, such as originating new VA, FHA, and conventional loans; loan assumption; wrap-around loans; and other alternative financing methods
* Hunt for bargain properties using the Internet
* Profit from HUD and VA repossessions and bank foreclosures, and bid for property at special auctions
* Use professional appraisal techniques to ensure you're getting the best value for your investment
* Utilize smart investment strategies and holding techniques
* Manage properties without all the hassles
* Minimize, defer, and transfer more of your tax liability
* And much more!

Author Notes

Andrew James McLean is an active investor in the Las Vegas and Mississippi Gulf Coast real estate markets. He holds a BA in business administration from Michigan State University

Table of Contents

Acknowledgmentsp. xiii
Introductionp. xv
Part I The Preliminaries
Chapter 1 Why Buying a Home Is a Great Investmentp. 3
Reasons Why Real Estate Outperforms Other Forms of Investmentp. 3
Other Benefits of Real Estate Investmentp. 7
Why Home Prices Rise and Fallp. 11
The Realties of Home Ownershipp. 15
Is Real Estate Right for You?p. 16
When You Decide Real Estate Is Right for Youp. 18
Chapter 2 Basic Guidelines for Successful Home Buyingp. 19
Establishing Your Investment Objectivesp. 19
Ways to Save for the Down Paymentp. 21
The Wise Use of Creditp. 23
The Basic Dos and Don'ts of Successful Home Buyingp. 25
Achieving Your Goalsp. 29
Part II Finance 101--How to Get the Money You Need
Chapter 3 The Mortgage Alternativesp. 33
The Cost Is in the Mortgagep. 33
Financial Terminology: Learning the Basicsp. 34
Buying and Selling Mortgaged Propertyp. 35
Types of Repayment Plansp. 38
The Loan Choicesp. 45
30-Year or 15-Year Mortgage?p. 46
Loan Prequalification versus Preapprovalp. 47
Special Types of Financingp. 48
Sources for Home Buyers with Poor Creditp. 52
Important Answers about Mortgage Alternativesp. 53
Chapter 4 Getting Financingp. 55
How Much Can You Borrow?p. 55
Maximize Leverage with Owner-Occupied Financingp. 56
Alternative Financing for Cash-Short Buyersp. 57
Shopping for a Mortgage Loanp. 60
The Loan Application Processp. 64
How to Overcome Common Mortgage Problemsp. 65
Part III Choosing the Ideal House
Chapter 5 Which House Is Right for You?p. 71
Choosing a Locationp. 71
City or Suburbs?p. 73
Consider Your Present and Future Lifestylep. 74
Three Principles to Maximize Your Investmentp. 76
What Exactly Is a Home?p. 78
The Wisest Choicep. 85
Chapter 6 The Resale Housep. 87
The Pros and Cons of a Resale Housep. 87
Features to Look for in Resalesp. 88
Choosing a Floor Planp. 95
Chapter 7 Other Home Choicesp. 96
New Homesp. 96
Having a Home Built for Youp. 98
Modular or Manufactured Homesp. 102
Adults-Only Retirement Communityp. 103
The Ideal Housep. 103
Part IV Team Members, Guidelines, and Valuation
Chapter 8 Selecting Your Real Estate Teamp. 109
Building a Winning Teamp. 109
The Real Estate Agentp. 110
The Mortgage Lenderp. 112
The Property Inspectorp. 113
The Escrow Officerp. 113
The Lawyerp. 113
Chapter 9 Key Guidelines to Making a Superior Investmentp. 115
Introduction to the 11 Key Guidelinesp. 115
How to Spot a Real Estate Lemonp. 121
Chapter 10 Appraisal--How to Determine Valuep. 125
The Four Methods of Evaluationp. 125
Reproduction Cost Approachp. 125
The Comparable Sales Approachp. 126
Capitalization Approachp. 129
Gross-Income Multiplier Approachp. 133
Conclusionsp. 133
Part V The Sources
Chapter 11 Where to Find Your Diamond in the Roughp. 137
Newspaper Advertisementsp. 137
Working with a Realtorp. 138
Dealing with the FSBOp. 138
Internet Shoppingp. 139
Federal Government Auctionsp. 139
Sheriff's Salesp. 140
Probate and Estate Salesp. 140
Auctionsp. 142
Lease/Purchase Option (for Investors)p. 143
Chapter 12 How to Buy Foreclosuresp. 145
Reasons for Foreclosuresp. 145
The Three Phases of Foreclosurep. 146
Buying from Distressed Ownersp. 150
Chapter 13 How to Buy HUD Homes and VA Repossessionsp. 157
HUD Homesp. 157
VA Repossessionsp. 162
Part VI The Middle Game
Chapter 14 How to Negotiate a Winning Dealp. 167
Secrets of Successful Negotiatingp. 167
Your Initial Offerp. 169
Contingency Clausesp. 171
Amount of Earnest-Money Depositp. 172
Chapter 15 Protecting Your Homep. 173
The House Inspectionp. 173
Home Inspection Checklistp. 173
Evaluating the Problemsp. 176
Insuring Your Homep. 178
Title Insurancep. 180
Chapter 16 The Closing and Escrowp. 181
Reviewing Closing Costs and Your Closing Statementp. 182
Taking Title to Your Homep. 184
Attending to Closing Day Tasksp. 185
Dealing with Buyer's Remorsep. 185
Celebratingp. 186
Chapter 17 Wise Things to Do after You Buyp. 187
Rebuild Your Cash Reservep. 187
Plan Your Allocation for Furniture and Future Renovationsp. 188
Consider Electronic Mortgage Paymentsp. 188
Avoid Premiums for Mortgage Insurancep. 188
Ignore Prompts for Faster Mortgage Payoffp. 189
Refinance Your Mortgage If Rates Fallp. 189
Know the Difference between Improvements and Repairsp. 190
Ignore Homestead Solicitationsp. 190
Take Time to Enjoy Your New Homep. 191
Chapter 18 Fixing Up the Fixer-Upperp. 192
Is Renovating a Home Suitable for You?p. 193
Finding a Fixer-Upperp. 193
Developing a Market-Sensitive Improvement Strategyp. 194
Improvements to Considerp. 194
Required Improvements and Repairsp. 198
Hiring a Contractorp. 200
Doing It Yourselfp. 201
Summaryp. 203
Part VII The End Game
Chapter 19 Profitable Holding Strategiesp. 207
Why Real Estate Is a Better Long-Term Investment Than a Short-Term Onep. 207
Long-Term Holding Strategiesp. 210
Summaryp. 216
Chapter 20 Property Managementp. 217
Showing and Renting Vacant Unitsp. 218
Rent Collectingp. 222
Evicting Tenantsp. 223
Managing Multiunit Buildingsp. 224
Renting Furnished versus Unfurnished Unitsp. 228
Obtaining and Maintaining Appliancesp. 228
Paying for Utilities and Trash Removalp. 229
Budgetingp. 229
Keeping Recordsp. 230
Handling Repairsp. 233
Points to Rememberp. 234
Chapter 21 Selling Your Propertyp. 236
Broker Servicesp. 236
Timing the Salep. 237
Price It Rightp. 237
Necessary Documents and Informationp. 238
Home-Selling Tipsp. 238
Property Information Sheetp. 241
Open House and the "For Sale" Signp. 241
Advertisingp. 243
The Sales Agreementp. 243
Summaryp. 245
Chapter 22 Pay Less Taxp. 246
Home-Owner Tax Savingsp. 246
Rules for Vacation Homesp. 248
Passive Loss Rulesp. 248
Reporting Rental Income and Deductionsp. 249
Capital Gainsp. 250
Depreciation Expensep. 251
Deductions from Rental Incomep. 252
Answers about Income Taxes and Real Estatep. 254
Chapter 23 Advanced Investment Strategies: Your Second Property, and Beyondp. 256
Advanced Investment Strategies for Higher Yieldsp. 256
Land Bankingp. 257
Renting Out Part of the Homep. 258
Subdividing and Building Another Homep. 259
Rolling Over a Short-Term Purchasep. 260
Converting Property to Another Usep. 262
Pyramiding Your Investmentsp. 265
How to Retire on the Housep. 265
Conclusionp. 266
Appendix A Useful Formsp. 267
Appendix B Web Sitesp. 276
Bibliographyp. 279
Indexp. 281