Buying a Second Home

1. The Seven Rules of Buying a Second Home

• What's Your Main Reason for Buying a Second Home?
• Seven Steps Toward a Successful Second-Home Purchase

2. What a Second Home Really Costs

• Initial Costs to Buy the House
• Ongoing Ownership Costs

3. Crunching the Numbers: How Much Second Home Can You Afford?

• Don't Let Your Down Payment Dictate Your Budget
• How Much Money Comes in Each Month
• Where Your Money Currently Goes Each Month
• How Much is Left for Your Second Home Each Month
• How Much to Set Aside for Non-Mortgage Second-Home Expenses
• How Much You Can Spend on Your Second-Home Mortgage
• How Much You Can Pay for Your Second Home Overall
• How to Adjust Your Budget Around a More Expensive House

4. Narrowing Your Search: What and Where to Buy

• Reviewing Your House-Type Options
• Choosing a House Type: Price, Privacy, and Property Maintenance Needs
• Comparing House Types Using the P Factor
• New Build or Existing Home?
• Starting Your Search for a House Location
• Choosing a Location to Invest In
• Choosing a Location for Your Vacation House
• Choosing a Location for Your Retirement

5. Picking the Right House

• Evaluating the House's Physical Condition
• Adding Contingencies to Your Purchase Offer
• House-Hunting Considerations for Investors
• House-Hunting Considerations for Vacationers
• House-Hunting Considerations for Future Retirees
• Choosing a House That's a Good Investment

6. How Experts Can Save You Time and Money

• Working With Real Estate Agents and Brokers
• Working With Mortgage Brokers and Bankers
• Working With Real Estate Attorneys
• Working With Home Appraisers
• Working With Home Inspectors
• Working With Closing Agents
• Bringing in Financial and Estate Planners
• Bringing in a Tax Professional

7. Fixer-Uppers: Finding the Gems and Avoiding the Junk

• Are Fixer-Uppers a Good Deal?
• Are you Ready for Months of Chaos?
• Planning for Tenants? No Need for a Luxury Fix-up
• How Much Time and Money Will Different Repairs Require?
• Doing Walk-Throughs
• Making Your Purchase Offer
• Getting a Second Opinion From a Professional Home inspector
• Soliciting a Formal Estimate From a Contractor
• How Will You Pay for Repairs?
• Who Will Do the Repair Work?
• Keeping Track of Costs

8. Buying Straight from the Seller: FSBOs

• Why Some Sellers Go Without a Real Estate Agent
• Watch for Inconsistent Pricing of FSBOs
• Dealing With FSBO Sellers
• Enlisting Your Real Estate Agent's Help
• Finding FSBO Houses

9. Raising the Cash You'll Need Up Front

• Building Your Savings
• Borrowing What You Can't Save

10. How Family and Friends Can Help (and Why They'll Even Want To)

• What is a Private Home Loan?
• How Private Home Financing Helps the Family as a Whole
• How a Private Home Loan Helps You, the Borrower
• How Making a Private Home Loan Helps Your Relative or Friend, the Lender
• Your Family and Friends Don't Need to Be Rich
• Combining Private Loans With Other Loans
• Choosing Your Own interest Rate
• Choosing People to Ask for a Loan
• Requesting the Loan
• Preparing the Loan Paperwork
• After You Receive the Loan

11. Finding Your Way Through the Mortgage Maze

• Unique Features of Second-Home Mortgages
• Mortgage Basics: A Refresher Course
• How Conforming Loans Can Lower Your Interest Rate
• Got a High Credit Score? Get a Low Interest Rate
• Where to Start Shopping for a Mortgage

12. You Don't Have to Go It Alone: Buying With Others

• The Pros and Cons of a Shared Purchase
• Finding a Shared-Purchase Partner
• How to Determine Cobuyer Compatibility
• Co-Ownership Options for Holding Title
• Co-Ownership Agreements
• Whether to Form a Separate Business Entity Before Buying

13. Being a Landlord: What You Need to Know

• Should You Be a Landlord?
• Is Your Home Appropriate for a Long- or Short-Term Rental?
• Long-Term Rentals: What You Need to Know
• Seasonal or Short-Term Rentals: What You Need to Know
• Manage your Property Without Breaking Your Back or Your Wallet
• Protecting your Home, Your Stuff, and Yourself

14. Tax-Saving Strategies

• Types of Taxes Second-Home Owners Pay
• How Deductions Can Lower Your Taxes
• Basic Home-Related Deductions: Mortgage Interest, Points, and Property Taxes
• Additional Deductions If You Rent Out Your Property
• How to Minimize Capital Gains Taxes If You Sell

APPENDIX A -- How to Use the CD-ROM

APPENDIX B -- Forms and Checklists

Forms for Calculating Costs and Affordability

• Hud-1 Settlement Statement
• Affordable Monthly Expenditures Worksheet
• Estimated Maximum Loan Amount Worksheet
• Maximum Purchase Price Worksheet

Forms for Evaluating Individual Houses

• Initial Walk-Through Checklist
• Rental Property Annual Pretax Cash Flow Worksheet
• Return on Investment (ROI) Worksheet

Forms for Interviewing Professionals

• Real Estate Agent Interview Questionnaire
• Mortgage Broker Interview Questionnaire
• Attorney Interview Questionnaire
• Home Inspector Interview Questionnaire

Forms for Evaluating Fixer-Uppers

• Fixer-Upper State-of-Mind Quiz
• Fixer-Upper Walk-Through Checklist
• Fixer-Upper Cost-Tracking Form

Forms to Facilitate Down Payment and Other Informal Loans

• Annual Nonessential Expenditures Adjustment Worksheet
• Borrowing Against Home Equity: Comparison Worksheet
• Promissory Note

Form for Choosing Management Company

Property Management Company Interview Questionnaire

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