REAL ESTATE ACRONYMS

If you are new to real estate investing, you may often encounter acronyms when skimming through classified ads, while discussing with banks/brokers/other seasoned real estate professionals, or even while driving past a house that has a for sale sign.

While some acronyms can be easily deciphered, others may take some serious searching to find what they stand for. I know how it feels to be the only person in a discussion that does not know what something means, it can be a dead giveaway that you are a newbie when it comes to real estate.

To help save us from the trouble, I have started compiling a list of local real estate related acronyms and what they stand for, as most often used here in the Philippines.

AP - Asking price
APT - Apartment
ARV - After Repair Value
AV - Appraised Value
BR - Bedroom
CAR - Certificate authorizing registration
CCT - Condominium Certificate of Title
CF - Cost Factor
CG - Car Garage
CGT - Capital Gains Tax
CLOP - Contract of Lease with Option to Purchase
CRB - Certified Real estate Broker
CTC -Community Tax Certificate
CTS - Contract-To-Sell
CWT - Creditable Withholding Tax
DBO - Direct Buyers Only
DOAS - Deed Of Absolute Sale
DP - Down Payment
DR - Door
DST - Documentary Stamps Tax
FMV - Fair market Value
FSBO - For Sale By Owner
HOA - Home Owners Association
HVAC - Heating Ventilation and Air Conditioning
ISP - Indicative selling Price
LTV - Loan To Value
MA - Monthly Amortization
MAO - Maximum Allowable Offer
MBP - Minimum Bid Price
MR - Maids Room
MRI - Mortgage Redemption Insurance
NOI - Net Operating Income
OP - Over Pricing
PITI - Principal Interest Taxes and Insurance
PS - Parking Slot
RD - Registry of Deeds
REB - Real Estate Broker
REIT - Real Estate Investment Trust
REO - Real Estate Owned
RFO - Ready For Occupancy
RM - Room
ROI - Return On Investment or Return Of Investment
ROPOA - Real and Other Properties Owned or Acquired
RPT - Real Property Tax
T&B - Toilet and Bath
TCT - Transfer Certificate of Title
TT - Transfer Tax
VAT - Value Added Tax

I have also added useful links to more detailed explanations for acronyms and terms and I shall continue to add new links as they become available. This is a work in progress so if you can't find an acronym in this list, or if you need more details for an acronym or term, just leave a comment and I'll ask around from friends and contacts who are veterans in the real estate business, then I'll include them here.

Feng Shui Tips

Feng Shui is one of the ancient Chinese methods that provide insight for sustainable living as well as harmonious relationship between people, time, space and the environment. They define in terms of energy which they called “chi”. This method gives precise information to design your living area in alignment with the opportunities and your needs.

There are generally two types of Feng Shui you will find out there: traditional and modern style. Each Feng Shui master has different interpretations of the principles to be followed. They may agree in some, and disagree on other points.

This guide doesn’t follow one school of Feng Shui exclusively. Instead, it gives an overview of different methods and provides practical steps that you can use to introduce Feng Shui into your own area.

PROPERTY

Like in real estate, location plays a key role in Feng Shui. The correct location of our home, where we spend more of our time, is the primary key to having good Feng Shui.

So, just what are the things that we should look out for?

Situate your home within the natural landscape, floral and fauna that represents life and more positive energy.

Mountains and hills: The hills and mountains should lie behind the house (south-facing), because they provide protection against harsh winds from the north.

Rivers and roads: Rivers and roads are considered favorable as long as they’re not too fast-moving and don’t point directly at the home’s entrance.

Pools and ponds: Pools and ponds are particularly valuable to the south and west of a house, where they’ll cool warm summer winds. Pools and ponds should never have straight edges.

A flat terrain is acceptable in Feng Shui but it is better if the land at the back of the house is higher that at the front. As a general rule it is ideal if the house sits on land that is higher or the same level as the road. Try to avoid a house that sits on land that is lower than the access road.

Lot Shape

Feng Shui favors lot shapes that are balanced, such as squares or rectangles. Feng Shui considers triangular, trapezoidal, and L-shaped lots less favorable since the irregular contours of the lot can trap chi or prohibit it from entering. The worst shape is a triangle.

Manmade Structures to Avoid:

a. Bridges, offramps, and tunnels - Highly trafficked areas generate a wild and overwhelming chi.

b. Churches and houses of worship - Though these sites don’t attract bad chi, they can attract such intense chi that it overwhelms the chi of your home.

c. Garbage dumps, sewers, and landfills - Bad chi is attracted to refuse and rot.

d. Hospitals, cemeteries, and funeral homes - Bad chi clings to places of death and sickness.

e. Military bases, police stations, and prisons - With their connotations of war and violence, they generate mostly bad chi.

f. Power stations - These stations generate massive amounts of electromagnetic energy and bad chi.

g. Railroads and airports - Large, loud, fast-moving machines discourage gentle, flowing chi.

h. Schools - Schools are loaded with energy that can overwhelm the chi within your home.

If you do live close to any of these locations, you can still protect the chi in your home by following these guidelines:

1. Face your front door away from the location.

2. Put curtains on the windows that face the location.

3. Get more secure windows or double windows.

Watch out for more Feng Shui Tips and guidelines to maximize the potential of your home in my next blog. Happy Property Hunting!

Getting Started as a Real Estate Entrepreneur

Whether you are new to real estate, or have reached a "plateau", the following will help "jump-start" your real estate investing career.

Surround Yourself With Like-Minded People
"Creative" real estate is non-traditional, which means that most people don't do it this way. Thus, most people you speak with will tell you it won't work. If you tell them you heard it in a seminar or a course you bought from a late-night television "guru," they will laugh and call you "gullible." Attorneys and other professionals will denounce it, because it sounds unusual. Keep in mind that these people are either threatened by their own lack of success or are looking to protect their own butts.

The first thing you should do its join a local real estate association. These associations will help you keep your thoughts in the right place and prove to your subconscious that it really does work, despite the opinions of the 20/20's, Datelines, 60 Minutes and other self-proclaimed "consumer watchdogs." If you cannot find a group, form a "mastermind" group that meets for breakfast once a week. If you don't know what a mastermind group is, you should read Think and Grow Rich by Napoleon Hill. If you already read it, read it again, again and again.

Have a Team
Don't wait until you have a deal brewing to find the players. You need to find the following players on your team:

• Attorney - preferably one that does real estate deals for himself as well as others



• Title or Escrow Co - stay away from the big name companies; find one that caters to investors. Make sure they understand double closings, land contracts etc.



• Insurance Agent - find one that understands land contracts, landlords, etc.



• CPA - find one that is aggressive and owns real estate



• Contractor - one that will give you free estimates and knows how to "cut corners" in the right places



• Mortgage Broker - one that is savvy, creative and experienced with investors



• Partner - in case you need it for money or experience



• Mentor - someone you can call to smooth out the rough spots

Don't Talk to Unmotivated Sellers
This is the biggest mistake I see beginning investors make. They waste time talking to sellers who are marginally motivated. Even worse, they drive by the house and look for comps without even talking to the seller first! Never visit a house before speaking with the seller over the phone. I love Ray Como's Mastermind Script Book. It has hundreds of questions designed to extract the seller's motivation over the phone. Heck, the course will save you enough gas money to pay for itself!

Be Persistent
Anyone who has ever been in sales will tell you that few deals are ever made on the first try. In fact, most deals are made after contacting a prospect for the fourth or fifth time.

Let me give you an example. I contacted a person in May 1998 who had a junker house he was thinking of selling. I met with him once and made him an offer. He didn't like it. Did I stop there? No way! I called him twice a month for the last year. I mailed him two more offers he rejected. We finally came to an accord and closed this month.

Have a follow up system like a salesman. I use Symantec ACT! 4.0. I allows me to schedule follow ups and keep a running history of calls and conversations.

Keep Educated
"If you think education is expensive, try ignorance." I am not sure who first said it, but I give him credit. You can lose more money with a mistake than you can learning how to avoid one. Even if you have been at this business for years, you need to keep up with current trends and laws. As an attorney, I have to go to seminars every year. Some are boring, but I always learn something that either makes me more income or prevents a lawsuit.

Have a Plan
Don't just wander around looking for deals. Have a plan. Make X number of phone calls a week. Spend $X a month on advertising. Make X number of offers per week. Pass out X number of business cards each day. Eventually, you start to get "lucky." I mean that facetiously, because luck always happens to those who are at the right place at the right time. If you plan and persist, you get lucky.

Treat This as A Business
People are lured to real estate because of the quick buck that it promises. Don't hold your breath, you won't get rich quick. An "overnight sensation" usually takes about five years. I would guess that 90% of the people who take a seminar quit after three months. This is a business like any other. It takes months, even years to cultivate customers and have a life of its own. You need to treat it like any other business. Give it time, effort, attention and professionalism, and it will flourish before you know it.