Lease Option Real Estate Investing: Advantages and Disadvantages | Real estate

One creative way to get started investing in real estate is to use a lease option. The biggest advantage of using lease options to invest in real estate is –control. This method of investing, basically gives the investor the right to possess — be in control of — and profit from a property without owning it.A real estate lease option contract is a combination of two documents.The lease part of the contract is where the owner agrees to let you lease their property, while you pay them rent for a stated period of time. During the lease period, the owner can not raise the rent, rent it to anyone else, or sell the property to anyone else.The option part of the contract represents the right you purchased to buy the property in the future, for a specific price. If you decide to exercise your option to buy, the owner has to sell it to you at the negotiated price. The option part of the contract obligates the seller to sell to you during the option period — but it does not obligate you to buy. You are only obligated to make rental payments as agreed during the lease period.When the lease option contract is written and structured properly, it can provide tremendous benefits and advantages to the investor. If the lease option includes the “right to sub-lease”, the investor can generate a positive cash flow by renting the property to a tenant for the duration of his lease, or lease option the property to a tenant-buyer for positive cash flow and future profits. If the lease option includes a “right of assignment” the investor could assign the contract to another buyer for a quick profit.Lease option real estate investing, is a flexible, low risk, highly leveraged method of investing that can be implemented with little to no money.High LeverageIt is highly leveraged because you are able to gain control of a property and profit from it now–even though you don’t own it yet. The fact that you don’t own it, also limits your personal liability and personal responsibility. Only if you decide to purchase the property by exercising your “option to buy”, would you take title to the property.Little to no moneyThe real estate investor’s cost to implement a lease option contract with the owner requires little to no money out of pocket, because it is entirely negotiable between investor and owner. Also, there are a variety of ways the option fee can be structured. It can be structured on an installment plan, balloon payment or other agreeable arrangement between both parties. The option fee can even be as little as $1.00.In order to secure the property for purchase at a later date, tenant-buyers typically pay a non-refundable option fee of approximately 2%-5% of the negotiated future purchase price to the seller. Depending on how the lease option agreement is written and structured, the investor could possibly use the tenant-buyer’s option fee money to pay any option fee owed to the owner.FlexibleLease option real estate investing is a flexible method of investing because the terms of the agreement, like payment amounts, payment dates, installments, interest rate, interest only payment, balloon payments, purchase price and other terms are all negotiated between seller and buyer. Responsibilities of both parties are also negotiable. For instance, if the investor doesn’t want to act in the capacity of a landlord, he could specify in the lease option agreement that tenant-buyer will be responsible for all minor maintenance and repairs and the original seller will remain responsible for any major repairs.Financially Low RiskIt is low risk financially, because if the property fails to go up enough in value to make a profit, you have the purchased the right to change your mind and let the “option to buy” expire. Even if your tenant-buyer decides not to buy the property, you have profited by a positive monthly cash flow from the tenant-buyer’s rent payments, and upfront non-refundable option fee.Let’s look at an example of a lease with option to buy structured in a way that the investor profits in 3 separate phases of the investment.Profit #1: non-refundable option feeFuture sales price negotiated with the current owner is $125,000 with an option fee of 2% of the sales price. Option Fee you owe the owner is $2,500. The future sales price you set for your tenant-buyer is $155,000 and the option fee is 4% of the sales price. Option fee the tenant-buyer owes you is $6,200. You collect $6,200 from tenant-buyer and pay $2,500 to the owner and your profit = $3,700Profit #2: monthly cash flow from rental paymentsThe Monthly rental payment you negotiated with the owner is $1,000. You set the monthly payment at $1,250 per month for your tenant-buyer. Each month you collect $1,250 from your tenant-buyer and pay the owner $1,000 each month. Your profit is $250 monthly positive cash flow during the lease period.Profit #3: is set up when the lease option contract is initially writtenThe third profit is the difference in the negotiated future purchase price with the owner, and the future purchase price set for your tenant-buyer. Let’s say the property goes up in value to appraise for at least $155,000. Your tenant-buyer decides to exercise their option to buy. You buy the property from the owner at $125,000 and then sell it to your tenant-buyer for $155,000. $155,000 – the $125,000 you pay to the owner = $30,000 profit.Of course the key to making lease option real estate investing work, is finding motivated sellers and buyers. Finding these motivated sellers and buyers shouldn’t be difficult. The continuing down turn in the real estate market, has created a large number of sellers who can’t sell their property and buyers who can’t get financing to buy. The seller could possibly get a fair offer to be paid in the future, by selling their property to a real estate investor on a lease option basis. A potential tenant-buyer could obtain home ownership, without having to qualify through traditional home loan guidelines.One disadvantage of lease option real estate investing, involves the tenant or tenant-buyer possibly defaulting on monthly rental payments. This would make it necessary for the investor to come up with money out of pocket to pay the owner, and possibly have to proceed with eviction process. However, there are certain provisions that can made, and also various “contract clauses”, that can be included in the lease option agreement, to deter buyers from defaulting on payments.If the investor fails to do “due diligence” before entering into a lease option agreement, he could end up with a property that is unmarketable. There could be a number of liens on it, issues involving ownership of the property or it might be in foreclosure. By diligently performing research before entering into a lease option agreement, the investor can avoid these mistakes. A few things the investor could do is– perform background and credit checks on both the seller and buyer, search public records in reference to ownership and property status, or do a title search.Despite the few disadvantages, lease option real estate investing continues to be an excellent way to invest in real estate with little to no money and low financial risks. It also remains to be an excellent way to gain control of a property you don’t own, to generate cash flow now, and possible future profits on flexible terms.Bottom line– you don’t have to miss out on the lucrative profits being made by investors in today’s real estate marketThe more you understand creative real estate investing strategies, and apply them now, the more profits you will make in today’s real estate market. Don’t put off getting the real estate investing education you need — to succeed in today’s real estate market.Learn these things and more:
Creative investing strategies and concepts for Lease option real estate investing, foreclosure investing, and wholesaling and flipping real estate.
How to structure every deal right so you make more on each deal and eliminate your risk.
What needs to be included in your real estate contracts now– to safely avoid issues that could cost you thousands!
The most powerful legal clauses you can use to completely eliminate your risk in all your offers.
The step by step approach to invest in real estate with minimal risk.
How and where to research properties effectively to save hundreds of hours in time.
The best ways to creatively finance your investment properties.
How to know the true market value of properties so you never overpay again.
How to control properties with no money, credit or income verifications so you can make a lot more.

Open Source Software in Higher Education | Education

The higher education sector is quite unlike other industries. It has its own processes and a different set of demands. Most commercial proprietary application vendors develop their applications focused on a wider domain spread across industries. This, academics complain, creates a distinct disconnect between software vendors and the end-users in academia.To overcome these shortcomings, the education industry started looking to “open source” as an alternate model. Around a decade back, institutions started debating total cost of ownership in adopting an open source based community approach vis-à-vis proprietary applications, viability of open source based business models, sustainability and security issues.The success of community developed open source software is quite well established. Linux and Apache are ample proof of its success. A similar trend, though not that widespread in its reach, can be traced to the development of community projects in education like the Moodle and Sakai.Through the course of its formative years, the open source community based approach in education has developed several alternative models. Some of these models and schools of thought have thrived and been implemented successfully across a significant spectrum of the industry. Progress and success in open source projects like the Sakai, Moodle, Kuali, uPortal, Shibboleth, and many more are being closely watched by the industry.Community Source ModelOne school of thought believes that open source sharing is more a philosophical approach than a viable alternative. The adoption of open source in higher education seems to suggest otherwise. FLOSS (Free/Libre and Open Source Software) communities are thriving well in learning environments too.The FLOSS model has been extensively used in initiatives like the MIT OpenCourseWare and Open Source Biology. Project Gutenberg, the Wikipedia, The Open Dictionary project are prime examples of how open source has been successfully adapted to education initiatives.In a community source project, multiple institutions come together to partner in the project. All partners contribute financially as well as in employing human resources for the effort. In the early stages, the partnering institutions provide all design and development efforts and only in subsequent stages is the project opened to the broader community. This way, the initial support is secured and the institutions have a substantial influence in deciding how the application is modeled and designed.The initial focus of community source projects is on collaboration between institutions. The focus in the crucial first stages is therefore to form a common economic outlook and an appropriate administrative framework rather than forming a community around a shared code. Most community based open source projects slowly migrate to open source in the later stages.The Sakai project, for example, started as a joint effort between four institutions (Michigan, Indiana, MIT and Stanford). The initial agenda was to set up a framework of common goals that would produce appropriate software based on an agreed list of objectives. The scope for participation was later increased by forming the Sakai Educational Partners Program (SEPP), whereby other institutions can join and participate in the community for a small fee.The Current LandscapeAn education enterprise like any organization has its own needs ranging from resource planning to budgeting. Additionally, they have typical requirements like the need to integrate with financial aid programs of the government, multiple payroll cycles, and student information systems (SIS) that handle admissions, grades, transcripts, student records as well as billing. All these call for robust ERP systems. Until recently, colleges and universities mostly rely on either custom-developed systems that are more than 15 years old, or have transitioned to commercial products from vendors like Oracle, SAP, PeopleSoft or vendors like SunGard that are geared towards the higher education market.Kuali Financials was borne due to the lack of open source solutions Enterprise applications in the higher education sector are comprised of a mix of some proprietary application vendors and some key open source community initiatives. PeopleSoft, Oracle, SunGard and Datatel are some key vendors that offer tightly integrated ERP packages for the education sector.Recent consolidation in the industry, like the acquisition of PeopleSoft by Oracle and of WebCT, Angel, etc by Blackboard, has caused considerable unease in the education fraternity. The concern stems from the fear that the trend of consolidation would lead to the monopoly of a few key vendors. The plans of these vendors to offer tightly integrated systems heightens the fear that this will provide an unfair leverage to these vendors as it would extend the community’s dependence on them.One area of concern about proprietary applications is a seeming disconnect between the industry and software application developers. Institutions also have strong reservations about the currently available administrative software and course management systems. The feeling is that applications provided by vendors such as SAP and PeopleSoft are adapted from other industries and does not work well for educational enterprises. Moreover, the proprietary nature of the applications implies that the source code is not available and customization efforts involve substantial costs.In the context of such a wide breadth of requirements, open source can prove to be a viable alternative. In fact, these constraints provided the impetus for open source initiatives in higher education. Some of the success has helped provide a strong foundation to building an alternative support model for the education industry.In the Sakai project, the participating institutions decided to integrate and synchronize their educational software into a pre-integrated collection of open source tools termed Collaborative Learning Environment (CLE). Sakai has active implementations running at multiple institutes including the University of Michigan and Indiana University.In parallel, Sakai also established a set of activity based communities that have spawned an active cooperation between the industry and application vendors. The Sakai Educational Partners Program allows educational institutions to participate in the program for a small fee. Besides, there are the Sakai Commercial Affiliates, who offer fee-based services for installation, integration and support..Kuali, on the other hand, mainly addresses aspects of educational administration. The Kuali Financial System (KFS) is the most prominent application. It handles administrative and operational tasks like general accounting, purchasing, salary and benefits, budgeting, asset management and grants. The system is designed around modules that enable it to be tweaked to work with existing commercial applications. For example, at Indiana University, Kuali applications work together with PeopleSoft’s HR and student system. The Kuali Foundation is a non-profit consortium of multiple universities and some hardware and software companies. The Kuali Commercial Affiliate program operates on similar lines like its Sakai counterpart. The community has been growing and now includes the University of California, Cornell, Michigan State University, San Joaquin Delta College (Calif.), and The University of Arizona.Significantly, according to the 2008 Campus Computing Survey, around 13.8 percent of the survey participants have already identified an Open Source LMS – either Moodle or Sakai – as the campus standard LMS.Besides these, several other projects offer SIS functionality. For example, openSIS manages student demographics, scheduling, attendance, grades, transcripts, and health records, and its parent company makes add-on modules to support additional features like disciplinary tracking, billing, food service, and bulk email/SMS messaging for emergency contact.Other Key intiaitives areJaSig community developing uPortal, and CAS (Central Authentication Services) two components serving as input to Kuali Rice.Internet2 – A consortium led by universities working in partnership with industry and government to develop and deploy advanced network applications and technologies including products such as Shibboleth and GrouperOpen Source CurriculaAs with any “open source” activity, open source curricula by its very definition is one that can be freely used, distributed and modified. A model like this would seemingly be antithetic to the concept of higher education as it strikes at the credibility of the education environment. Campus education is designed to operate as a structured learning methodology. The concept of community collaboration involving academics and students on the same platform brings a lot of unpredictability into the scenarioHowever, FLOSS communities (Free/Libre and Open Source Software) in education have proved to be quite successful. A key principle of this learning approach is its root in adapting it to the context of ones’ experience. With its stress on learners and their preferences, this learning approach focuses more on learning by collaboration, communication and sharing.Significant initiatives include the Connexions Project at Rice University, the OpenCourseWare project at MIT and the social learning medium of Wikipedia.The FLOSS approach in higher education has been operating in combination with traditional teacher centered approaches. The objectives of the FLOSS approach are not to replace traditional methods but to achieve synergies in combination and offer the learner an enhanced learning environment.The ‘FLOSS-like education transfer report’ published in September 2008, as part of the FLOSSCOM project, notes that FLOSS communities can create effective learning environments. The study has also come up with three different approaches that could be combined effectively with traditional teaching approaches.Economic Models of Open SourceOne aspect that clearly marks the adoption of open source as a winner is the fact that in this scenario, the developers are most often also the users of the software. This removes the perceived disconnect between the developer community and the end-users unlike in the case of proprietary applications. However, this is less evident in the case of administrative applications like payroll or HR. In such cases, adoption of open source has to be a directed process.Initiatives like the Kuali project have proved that open source can also build up sustainable models that provide adequate support mechanisms. In such models, there is active collaboration between the community that comprises not only developers and end-users, but also an extended support group comprising commercial vendors. These support groups are available to offer timely support to mission critical applications. The community approach also ensures that the code is not closed and that an active community of interest ensures that enhancements keep happening as necessitated.Projects like uPortal have been developed with minimal resources but are deployed across hundreds of institutions. The community approach has proved sustainable as in the case of the Sakai project. In terms of funding, the Sakai project garnered an investment of $6.8 million over two years.The viability of the open source, community based model stems not from the monetary or cost aspects but principally the adaptability that it offers. The debate over cost of ownership between commercially available proprietary software and open source applications is yet to be proved empirically. However, the fact that the code is open means it can be easily adapted to suit new requirements and does not involve significant investments in terms of customization or enhancements. This does make significant economic sense in the longer term.The case for open source in higher education is nicely documented in a study by the Alliance for Higher Education Competitiveness. In a 2005 study report titled, ‘Will Open Source Software Become an Important Institutional Strategy in Higher Education?’ Rob Abel notes how open source is a “great fit for higher education”. The study, based on an analysis of open source projects in education, opines that the community-based approach is an interesting model that also helps reduce the inherent risks in adopting an open source approach.As for the cost model, the study notes that while open source has helped generate cost savings in the range of 20 to 30 percent for the commercial sector, the same may not be entirely true in education. The community-based approach, the writer notes, with its associated participation fees, may prove only marginally beneficial in terms of costs. Institutions that have their own infrastructure and resources may however, benefit from substantially reduced costs from their open source initiatives.The FutureOpen source has proved to be adaptable and a reliable platform for collaboration and learning. In their quest for ideal application software to handle administrative, operational and education platforms, most CIOs are looking at interoperability, reliability and scalability of applications. Applications like the Sakai and Kuali have proved beyond doubt that open source applications offer great configurability.Development communities and the support of commercial vendors, as in the case of Kuali and Sakai, fuel a greater rate of innovation. Moreover, the advantage that is offered by collaboration also provides an impetus to continued improvement of the system. Support systems and enhancements for future requirements are ensured.On the question of how to approach or adopt open source as a model, the answer would depend on the needs, the infrastructure and the means available to an institution. The community development model has shown that costs can be broadly distributed amongst participants. Experience shows that universities and colleges can collaborate to produce open source software that caters to their needs in a way that is superior to some commercial products. The collaborative model enables educational institutions to pool their financial and technical resources. Moreover, a larger community ensures that the applications are tested in a variety of testing environments, thus aiding in building robust solutions.In term of core academics, learning systems will evolve to accommodate formative assessments and evaluation outside the classroom. Many higher education institutions have taken the lead of MIT and are offering online course materials that are accessible by anyone, free of cost. It has been adopted at Yale, Notre Dame, Tufts and Stanford School of Engineering, to name a few. The United Nations has launched an initiative that would leverage social media technologies and ideas to offer higher education opportunities to people who would otherwise not be able to afford the costs.Commercially, open source projects have taken their first steps in the marketplace. The model is evolving aided by some significant commercial vendor backing. For the community-based open source approach to prosper, substantial financial backing is an absolute necessity to prevent it from faltering and to avoid the pitfalls that arise form source code being easily modifiable and rebranded by a different vendor. From the commercial perspective, projects like Sakai and the Kuali Foundation are likely to thrive as they have substantial stakeholders from both the academic and the corporate world.What could derail further adoption? There are several potential risk areas:
Lack of understanding of entry points for adoption
Lack of support to adopt the applications
Minimal staff to support the applications
Lack of training / documentation to train staff
A “runaway” project that consumes much press and develops a negative bias toward the project
Many of these risks may be mitigated though co-operative initiatives between the foundations developing the open source solutions and commercial affiliates looking to support the solutions – and develop complementation solutions. Some examples:
Further publicity through conventional, non-education related channels such as Google and industry-based sites such as edu1world
Furrther innovation and cooperation – whether through ‘summer of code’ collaborations; or community collaborations that will transform the current listservs to more accessible forums
Commercial affiliates offering training and webinars
Commercial affiliates offering ease of use entry points, such as pre-installed servers or virtual images that can be downloaded and used out of the box
In conclusion, open source initiatives in higher education have a long way to go before they enter the commercial mainstream in a significant fashion. However, with industry and academic collaboration, it has a great potential to change the higher education landscape in the longer term.

What is Fashionable? | Fashion

Fashion is fitting into the scene and making one look the best that he or she can look. Fashion is the norm of clothing, cars, homes, and yes, even pets. Fashion is fashionable. What is fashionable though?Fashions change all the time. There are some constants about fashion though. The outfits should fit appropriately and be flattering. The vehicles should be safe and clean. The homes should be comfortable and personable. The pets should be well cared for. Now that we know the constants, how does one achieve these constant fashions?Fashionable outfits typically sport the name of a high end designer. This is not necessary though, since in other parts of the world, say the Philippians, fashionable pants include the Levi pant line. This is considered an expensive brand in the United States, but in other parts of the world, it is. Fashionable clothing is clothing that fits well and compliments the body of the wearer. Fashionable clothing does not show too much skin or appear to be too tight. Fashionable clothing does not restrict movement, but rather enables the individual to be as comfortable and natural as possible.Fashionable cars are much like fashionable clothing. What is expensive in one country is not in the other. In America, the BMW is considered one of the most expensive cars on the market. In Bosnia, everyone drives a BMW and people want the Ford Taurus. How is that for luxury and fashion? A fashionable car is a vehicle with personality and is clean at the same time. There should be plenty of the driver in the car and plenty of car to be seen. Dirty is never fashionable and clutter is much like dirt.Fashionable homes are sketchy. Everyone wants a home. Homes in themselves are fashionable. A fashionable home is a home that is well put together with general themes for each room. The living room should not have lawn chairs. The dining room should not have a weight bench. The kitchen should not be storage room. Fashionable homes are all about themes and cleanliness.Fashionable pets are scary. While it can be “fashionable” to have a specific breed, it is far more ‘fashionable” to have a healthy and happy pet. Remember though, pets are for life, not for fashion. Once you get a pet, you are in a till death-do-you-part relationship with that pet. Think before you purchase.