Many people want to buy investment property in order to get some income in the form of rental. However, if you do not go about buying the rental property in the correct manner, you could face problems in the future.

• Investment properties come in many forms. You need to choose the type of property you want — vacant lot, rental home, condominium, apartment building, mobile home or store front. If you are just starting out in buying an investment property, then you should opt for a rental house or a small apartment building. These are not as regulated as mobile homes or condos, and you can get a lot of information from different sources to become a successful landlord.
• Once you know what you are looking for, it is time to select an area where the property should be located. A good location would be an area that has many employment opportunities. And, you should be looking for tenants who have a steady income to pay the rent on time. In addition, the area should be close to public transportation, shopping and schools. Above all, it should be a safe and secure area.
• You also need to some research on the values of the properties and the amount of rentals they attract. For this, you can contact a real estate agent. You can also use rental ads to contact landlords to figure out what they are offering prospective tenants.
• For any property that you select, you should make sure that it fulfills the criteria that have in mind. For example, the house should be able to give you enough rent to cover the mortgage payments.
• Always make use of a real estate agent who knows the area and has sufficient knowledge and expertise to handle investment properties.
• Once you locate a suitable property, try to get as much information as possible. This information should be things like how much will the property rent for, what will be the maintenance expenses, what will be the operational costs, and who pays the common area maintenance costs. You can get most of this information from the homeowner itself. However, take time to verify all the information that the owner or seller gives you.
• Once you are satisfied that the property covers all the selection criteria and it will be worthwhile, make an offer. Ensure that you get a professional inspector to inspect the property. If the owner accepts your offer, get your lawyer to draft out the contract.

Commercial Loan Modification is a subject not frequently talked about while the whole country focuses on the residential market however the facts are overwhelming and clearly show a huge problem on the horizon. While the government seems to have begun to pay attention to the commercial side of the real estate ledger by extending TALF through June 2010 and beginning discussion about how to resolve outstanding loans before they implode, there are no guidelines as of yet nor direction from the treasury as to what if anything they will do. In other words, the banks are keeping quiet about this issue because they don’t want tax payers and share holders to be aware of the hundreds of billions they carry in commercial loans coming due on their balance sheets. The banks are waiting for direction (more money) from the government so they can modify with guarantees from perhaps Fannie / Freddie in the event of default after modification.

Now is the time for property owners and banks to execute a plan for Commercial Loan Modification to resolve current loans coming due. The issue for most property owners is not the ability to make the payments rather it is the ability to refinance with the current lender, another lender or sell the property under current lending conditions where the conduits are gone and CMBS is all but shut down completely. So there are trillions in loans held by banks with borrowers who for the most part are paying on time but who will need to restructure that debt in the form of a Commercial Loan Modification or risk losing the property despite their best efforts.

Commercial Loan Modification is the only reasonable solution to the current problem to protect investors who currently hold CMBS loans and lenders who wrote the other 80% of them on balance sheet. By modifying the loans the banks create a window of time where they collect payments and the borrower has more time to search for new financing. Most Commercial Loan Modifications result in an extended term with perhaps interest only payments making the process productive for the borrower and very profitable for Commercial Lenders.

Currently there is fear regarding commercial loan modification for CMBS loans because of legal restrictions however, loans currently in default or those for which default is imminent may and often do qualify under current law and regulations to be moved from the master servicer to a special servicer who has the authority to modify a commercial loan if it is in the best interest of the investors. CMBS (commercial mortgage backed securities) loans make up about 20% of the total outstanding with 80% being portfolio loans. The portfolio lenders can modify as they see fit as well as be more flexible in offering commercial loan modification terms such as extended term, interest only and reduced principle payments. Regardless of the type of loan now is definitely the time for all parties to begin the process of modifying commercial loans thereby staving off a sure catastrophe in the near future.