Monthly Archives: October 2011

Oct 28

Short Sales are Possible

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Short sales are real estate deals that happen when a home owner is in foreclosure, usually three payments behind, and you, the buyer, offer the bank less on the mortgage than is actually owed.  And hopefully, the bank accepts.

Short sales take longer to get an agreement on a purchase price than a sale involving only the seller, but it is possible to get deep discounts from the bank when you buy a property before it goes to the sheriff’s sale.

You must be patient with short sales because extra people have to agree on the purchase price.  However, the payoff is a higher profit with much nicer houses being bought and sold.

For instance, my first short sale involved a lot of patience, a lot of effort and a lot of positive thinking.

I was buying a wholesale deal from another investor/friend.  It was a short sale he was working on with the bank.  I told him I wanted to go with him when he talked to the seller.  I asked for copies of all the paperwork that he and the buyer signed.  The investor did all the talking with the bank.

It was therefore up to the investor to get the bank to agree to this deal.  He knew I had to get it closed by a certain date as I was buying the house via a 1031 tax exchange.

That meant that there was a deadline–a government deadline–to get the bank to agree to the deal in order for me to get my tax exemption.  If I missed it, I’d pay tax on the sale price of the house I’d sold six months earlier.

As you can imagine, my motivation was high to get this deal done on time.  Fortunately, I had responsible, dependable people on my house-buying team.  I knew I could count on them to come through for me in a crunch.

And I did what I needed to do.  I got copies of all the paperwork.  I noted all the important phrases that needed to be included for the future short sales I wanted to do.  Then I waited.  Without much patience.

I called the investor.  He was working fast and hard, but he didn’t have an answer.  The bank was slowing things down, not him.  Even so, I reminded him of my deadline for the tax exchange.  I also made sure he was communicating with the bank.

In the meantime, I kept working.  I called the exchange company to let them know the tight time table.  I prepared my title company and had them do a title search prior to the deal being accepted.  I called the insurance company to get hazard insurance on the property.

And I got money from my private lender to close the deal.

With time running out, I had all the pieces and players in place.  Then, with just a day and a half left to close, the bank finally agreed on a good purchase price.  Now the only remaining detail was to get the seller, Joe, to sign the closing documents.

Joe had been helpful throughout the process, but he was working a double shift and couldn’t get away.  So I got creative.  I asked if we could come to him.  He said we could.

The women from the title company and I met Joe at his place of employment at 11:30pm on the final day of my tax exchange.

We had thirty minutes to get the papers signed or my tax exchange expired, costing me my tax deferment.

We pushed.  And made it happen with nineteen minutes to spare.

Joe, now relieved of all his home owner duties, had the biggest smile of all.

Short sales are truly a win-win for all involved.  It was stressful but exciting.  This became the first of many short sales in my new career.

You can do it, too.  Be persistent.  Be positive.  Be proactive.

You WILL succeed.

Deb McMillan, OPHP, CMI, is a real estate investor and writer, living in Hamilton, Ohio, and has written a home study course on Short Sale Success Systems detailing how to get deep discounts from the bank when buying pre-foreclosures.  She has been investing in real estate since 1986 and buying, selling, and teaching short sale strategies since 2000.   She teaches how to talk to sellers to get them to do what is necessary to save their credit and reveals strategies to negotiate with the banks to get deep discounts when you buy the real estate.  She also teaches about bankruptcy and what you can and can’t do once a homeowner files.  Log on to http://www.shortsalesqueen.com for more information on how to make your deals close.

Oct 27

Buying Foreclosures

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Foreclosures have not been touched by the black plague; many are good options to look at when shopping for a home.  Sometimes they do need to be fixed up, but other times you can move into them right away. Despite the negative impression many buyers have, foreclosures can be a great way to buy a home and gain instant equity.

First, it is valuable to understand how a home becomes a foreclosed property. A simple definition is that someone borrowed money to purchase the home, and then stopped paying the money back (a.k.a. going into default on their mortgage). This allows the lender to take legal action and obtain ownership of the home to recoup their losses; and in turn causes the homeowner who was in default to lose any equity they had built in the home. You would think that banks would be happy to take the home to cover the money they loaned out; however it is bad for them to keep foreclosures on their books. To alleviate the problem lenders typically try to auction or resell the house as quickly as possible.

HUD (Housing and Urban Development) homes are also foreclosed properties. They are different from normal foreclosures because the lender for the loan was a government lender such as FHA (Federal Housing Administration) or VA (Veterans’ Affairs). When owners with government loans go into default, HUD steps in to take over the property and try to resell or auction it.

Now you know what a foreclosure is, and you can consider foreclosed properties that catch your eye without fear of the unknown. Keep in mind that you should still go through all of the appropriate channels to check out the house structurally and functionally before you make a buying decision. This includes getting a proper home inspection. An inspection will point out any existing or potential problems and will allow you to factor in estimates for repairs that will need to be made to the home right away. These repairs may include plumbing or wiring, the roof, flooring, paint and so on. Making these calculations will help you figure out the amount of equity you will really end up with, and allow you to make the best decision financially.

As you continue your search for a home, remember that foreclosures can be a good investment for your family. By doing your research you can find and entertain more options then you might have realized that meet both your price and living space needs.

Content provided by 10x Media. Established in 2003, 10x Media provides innovative online marketing tools.It has expanded its online presence through networks such as Inside Real state, Inside Finances and Grab Real Estate, which contain thousands of pages for city and state specific real estate information across the nation.

Article Source: http://EzineArticles.com/?expert=Jennilyn_Bylund

Oct 23

How To Find Foreclosure Investing Deals

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Many people will not achieve their property investment goals as they do not think there are any good deals left out there to be found.  But this is just not true; as long as you know where to look you will soon realize just what great investment opportunities there are to be had from foreclosure sales.

In this article we will provide you with a few ways in which to find foreclosure deals.

1.  Legal Notices

Foreclosure properties are required to have their procedural details printed in your local newspaper as well as being posted on public bulletin boards at your local County Courthouse.  Because it can be profitable to invest in foreclosure or pre-foreclosure properties such notices are a great way for you to find your next great investment deal.

2. Banks, Brokers & Closing Attorneys

Take your time to build up a positive business relationship with other real estate professionals and you will soon discover that they would be more than happy to refer foreclosure deals to you.  Just let them know that you are a real estate investor who would be willing to assist property owners whose property is in foreclosure or pre-foreclosure proceedings.  You may well be amazed at just how many great deals you can find just by simply talking to other people.

3.  County Recorder’s Office

Many people do not understand that any legal proceeding that involves a property foreclosure or pre-foreclosure is a matter for public record.  Therefore anybody can walk into the County Recorder’s Office and look for property information, tax liens, mortgage records, notices of trustee’s sales or any other indications that a residential property may be great deal for an investor.  So why not take some time out and visit your County Courthouse and the deal you have just been looking for may be waiting for you there.

4.  Online Foreclosure Listings

If you’re short on time, then it might be worth subscribing to a service that does all the work for you.  These listing services accesss all the public record information, and list it in one place where you can pick and choose the houses that interest you.

To be honest you will be able to get a great real estate investment deal anywhere and it does not matter whether the market at the moment is hot or cold.  All you need to know is where to look and your will soon find the right foreclosure investment deal for you.

Oct 19

Getting Rich with Pre-Foreclosures

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I’m sure you know what pre-foreclosure is. But do you know buying a pre-foreclosure can actually save you up to 40% of the market value of the pre-foreclosure house? Or you are actually already thinking to buy a pre-foreclosure? Either way, you will need info to know more about pre-foreclosure and further decide your strategy to buy pre-foreclosure.

For your info, pre-foreclosure happens when home owner has missed at least one payment of the loan. The lender will then issue a Notice of Default which is a public record asking the home owner to respond to the un-paid payment/loan. This is the first legal stage of a home being foreclosed. Home owners have to respond fast to show their motivation to solve the problem. Foreclosure home owners will be very motivated to look for home buyers to buy their house during this very period.

There are always advantages and disadvantages of buying pre-foreclosure. One has to get the balance point within the advantages and disadvantages. Buying pre-foreclosure could be very prosperous in return but in another hand, it might be a nightmare.

Talking on its advantages, the sale agreements of buying pre-foreclosure could be flexible and adjustable. For the agreement only involves 2 parties – buyers (us) and the home owner. Thus, as long as the pre-foreclosure homeowner agrees, the agreement is always negotiable. Secondly, buying pre-foreclosure could save you up to 40% of market value of the foreclosure home. It means if a foreclosure home’s market value is 250,000USD, you could save up to 100,000USD. Sure your neighbors will envy you for you owning the same house with them but with the different price they are paying.

Thirdly, buying pre-foreclosure straight from homeowner as compared to buying foreclosure home through auction or REO (Real Estate Owned) allows you to have adequate time to research on the conditions of the foreclosure home. As stated above, the agreement involves only you and the homeowner, you can always have a look on the title and other details of the foreclosure home as long as the homeowner gives a green light, can’t you? For most of the cases, buying pre-foreclosure needs lesser down payment and this make the fourth advantage of buying pre-foreclosure. As long you got your lender, everything should be going smooth.

Of cause, buying pre-foreclosure have not only these 4 advantages, but they are the major one. Having so many advantages in buying pre-foreclosure, does it mean buying pre-foreclosure is easy? I doubt it. Great bargains always need efforts and good things don’t easily have you unless, you planned your strategy properly in buying pre-foreclosure.

About The Author

Shawn Daren makes it clear on how to pick up great bargains on buying foreclosure. Learn the key of earning 100k in buying foreclosure. To know more on foreclosure, visit his buying foreclosure website. buyingforeclosure.biz

Oct 17

Investment Opportunities To Be Gained From A Foreclosure Home

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There are many investors today who covet bank foreclosure homes as they see the potential profit that they can make from one.  It is not uncommon to find a foreclosure home being sold at a price which is much lower than the actual market value.  If you follow the old saying “buy low sell high” you stand to earn a nice little return on your investment.

So what is a Bank Foreclosed Home?

These are homes that are owned by a bank or other lending institution because the lender has had to foreclose on the property.  Often foreclosure proceedings will be initiated by a bank when the owner can not pay the mortgage over a period of time.  But before the foreclosure is finalised an investor, if they so wish, has the opportunity to purchase the property directly from the owner.  Many owners are anxious to sell by this method so that they do not have a foreclosure black mark on their credit report.  Should the property have accumulated enough equity then the investor is likely to make a very nice profit from it if and when they sell it on.

However if the foreclosure becomes final then the property will be offered for sale either directly by the bank or the lending institution through a real estate auction.  When it reaches this point you will find that the lender is very eager to sell the property as well for several very important reasons.

1. It is not cost efficient for any bank or lending institution to own a foreclosed property as they are expensive to maintain.  They will need to cover the insurance on the property, pay any taxes that the property is liable for, as well as maintain and keep the property secure whilst it is vacant.

2. It does not look good for any bank or lending institution to have a large portfolio of foreclosed homes as this will just magnify what bad lending decisions they have made.

3. Many banks and lending institutions when selling a foreclosed property will recover any losses that they have incurred upon its sale.  They don’t care if they make a profit as well.

What is a Bank Foreclosure Home Auction?

This is where banks will sometimes sell foreclosed homes through a real estate auction.  If you do your homework right then buying a foreclosure home at auction can be a sound investment.  But if you do it carelessly then you could end up paying a lot more for a foreclosure home than it is actually worth.

What you need to do is inspect any foreclosure home thoroughly before you put a bid on it.  You will need to calculate the cost of repairing the property as well as what it is actually going to cost you to purchase.  Unfortunately there are times when an inspection of the property cannot take place so only bid on these kinds of property if you have a nice margin for any unknown repairs that may occur.

Unfortunately, as with anything that is going cheap, foreclosure homes do not stay on the market for long, so an important aspect of investing in such properties is to have good listings so that you can get to these properties before they are sold.   You can obtain foreclosure home listings from Courthouses, Lending Institutions or Government Agencies (but only use these methods if you have time to spare).  Otherwise the best way of finding good foreclosure home listings is to sign up with one of the online bank foreclosed homes listing services that are now available.  These will provide you with accurate and timely listings of foreclosed homes so that you can be one of the first investors on the scene when a foreclosure home becomes available.

Oct 14

Foreclosures on the Rise Means Opportunities for Real Estate Investors

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Many economic forecasters are predicting an increase in foreclosures over the next couple of years. While it’s not likely to be a uniform rise in every market, there are some issues that could create significant opportunities for real estate investors in many markets.

Over the past few years, housing prices in many areas escalated dramatically. To help buyers get into the house they wanted–which was often more than what they could really afford–lenders offered a variety of creative financing packages, including no-down-payment loans, interest-only loans, and adjustable rate mortgages.

With an adjustable rate mortgage (ARM), the initial interest rate is lower than the fixed rate at the time the loan is made, which means lower payments at the beginning of the loan. That low rate will typically apply for one, three, or five years (but any term can be negotiated). At that point, the loan adjusts to a rate according to an index chosen by the lender. In most cases, the adjustment is going to mean a higher interest rate and higher monthly payments.

Three-year ARMS became very popular about three years ago. The first wave of them are going to be adjusting this year and could mean significant increases in monthly payments for hundreds of thousands of homeowners–and many of those homeowners are not going to be able to afford the higher payments.

Here’s a typical situation an ARM borrower may find himself in. If he borrowed $150,000 on a three-year one percent ARM, the monthly principal and interest payment for the first three years of the loan will be $482. But if the rate adjusts to seven percent at the end of the three years, the monthly payment is going to climb to almost $1,000 a month. Most American families are not going to be able to cope with their mortgage payment suddenly doubling.

It’s estimated that $330 billion worth of ARMs will adjust upward in 2006 and $1 trillion will move by the end of 2007. More than 3 million homeowners are going to be facing bigger mortgage payments in the next two years. It’s possible some homeowners will be able to refinance into a loan they can manage, but many will not qualify. And others will just struggle along, gradually getting further and further behind, until the lender initiates foreclosure proceedings.

The opportunities for real estate investors who are trained in foreclosure and pre-foreclosure strategies are significant and growing. These homeowners are going to need someone who knows how to help them get out of a difficult situation with as little damage to their credit rating as possible.

Russ Whitney, chairman and CEO of Whitney Information Network, Inc., is a recognized worldwide leader in the real estate investment and financial training fields. He is the bestselling author of Building Wealth (Simon & Schuster); Millionaire Real Estate Mentor (Dearborn Trade Publishing), and The Millionaire Real Estate Mindset (Doubleday). Russ Whitney has also produced numerous successful investing and personal development training programs on general wealth-building, real estate investing, stock investing, communications, selling skills, credit, and more. For more opinions and comments by Russ Whitney, visit his blog at http://www.russwhitneyblog.com.

Oct 11

How To Find Free Lists of Foreclosures Houses

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When I started in this business, I used to get tons of free listing from the local Banks and Credit Unions.

I would simply call their REO department and ask for a free list of the Home Foreclosures and of course they were more than happy to provide this list on a weekly basis. Sometimes by mail, by fax or email.

However as my business picked up and the competition became more fierce, I had to find alternate methods of getting foreclosure listings. So here is a partial list of methods and resources:

1- Place an ad on Craigslist.org or similar free classified board telling people that you buy distressed property and homes about to go into foreclosure. This will probably get you a very few calls. But it’s free and will get your name out there.

2- Contact local Real Estate companies and ask for agents who specialize in foreclosure homes. They’ll have tons of listed properties in the MLS (Multiple Listing Service) that are either in foreclosure or already foreclosed upon.

3- Contact HUD, VA and FNMA foreclosure departments. These numbers are available with a little research on your favorite search engine. Also be on the lookout in your local newspaper as many of these government agencies will place large ads announcing the upcoming auctions of their foreclosed homes. (Here is the direct link to HUD. Do the same with VA and other government agencies:http://www.hud.gov/homes/homesforsale.cfm) 

4- Go online and search for “free foreclosure lists”. Be aware though as many of these are not real and they’ll end up costing you about $20 dollars a month. Many will give you a 7 day free search period which is plenty to get you started and get yourself a route.

5- County Recorder’s Office. I can’t tell you the wealth of information available for free at your local county recorders office. From foreclosure listings to death notices! Get to know your local recorder personnel and they will help you find just about any information you’ll need. I used to spend one day a week at the HUGE Los Angeles Recorders office and have enough data to keep me busy for 2 weeks.

6- Your local newspaper or legal paper will also publish Notices of foreclosure on a daily basis. You can simply visit your library and for 5 to 10 cents a page, make copies of pertinent data.

7- IRS, FBI, DEA and your local police department will also have special department of agencies who will handle seized property information. Many of these agencies will provide you with a free listing of their seized property and auction dates.

Look, the bottom line is that there are more free foreclosure lists and sources to provide you with at least 30 homes to look at on a daily basis. The ONE thing you need to do is to take action. Get your pen, notepad, camera and list together and hit the road.

Many more articles at Foreclosures Property

About the author:

Ed Allen offers information and articles for those interested in learning about investing in Under-Market Real Estate, Seized Property and Foreclosures Houses

Oct 09

Preforeclosures: How Fortunes Are Made

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What is preforeclosure? Preforeclosure is the time period from which the bank gives notice of default, once the homeowner is approximately 90 days late in payments, to the time the house sells at auction.  Preforeclosure is also the most crucial time in the foreclosure process. It is during this period that you as an investor stand to make the largest profits and can literally make thousands of dollars in months, weeks, days, or even hours!

The key to preforeclosure houses is equity. Simply put, equity is the difference between what a house will sell for (fair market value) and what is owed on the house. The whole concept to making money with preforeclosures is to buy a house for less than fair market valuing, thus immediately creating equity for yourself.

Here is an example of how this can work. Let’s say someone owns a house with a fair market value of $200,000. Now let’s assume that this homeowner has lived in the house for several years.  If you consider that the property has most likely increased in value over time, while at the same time the homeowner has been paying down the mortgage on a monthly basis, it is fair to assume they owe less than $200,000 on the property.

For this example let’s assume that the homeowner owes $160,000. This means there is $40,000 in equity in the house. As an investor, you would want to buy the house for $160,000 or slightly higher. If you can do this, you have a shot at making $40,000.

I know what you are thinking. Why would they sell the house for $40,000 under the market value? Right? Here is one reason why. If they sell the house to you, you can promise them a quick closing, thus stopping the foreclosure (losing the house at auction).

This will prevent a foreclosure from going on the homeowner’s credit record.  A foreclosure can stay on someone’s credit for seven to ten years making it next to impossible to get another mortgage in the future. This is just one of many reasons.

So let’s say they sell the house to you for $160,000. You can turn around and put the house back on the market for the $200,000 that it is worth. Once the home sells, you could put a whopping $40,000 in your pocket. Sounds pretty nice, huh? The best thing is there are ways to make similar deals with little or no money! An that is an example of how you can make money with preforeclosure houses.

In order to buy preforeclosure houses you first need preforeclosure leads. This is how you are going to get your leads.  You are going to implement a powerful direct marketing campaign soliciting those who are in preforeclosure.  How do you learn where to start looking?

One of the most valuable sources for preforeclosure leads is mortgage brokers.  Almost everyone knows a mortgage broker.  Maybe your brother is a mortgage broker. Maybe a good friend is a mortgage broker.

If you don’t know anyone in the mortgage business, network a little bit. I am confident you will be introduced to someone in the mortgage field that can help you.

If not, that is OK too!  You will just have to do a little more legwork.  Go through the yellow pages and look for mortgage companies.  Start calling around and introducing yourself.  See if you can talk to the manager.  If not ask to speak to a loan officer.

Ask them if they have someone in particular that handles foreclosure financing.  They may or may not.  Often times in mortgage companies, they will receive large volumes of calls from distressed homeowners.

These are homeowners who are trying everything to stop foreclosure.  Most of the time, it is too late for the mortgage company to help the homeowner because their credit is already shot.  At this point the mortgage company may refer them to what is sometimes call a hard money lender.  A hard money lender is a lender that specializes in high risk loans.  Often times, they are private investors.

This is where you come in.  These leads are invaluable. They are homeowners that are exhausting their last options to save their home.  What you do is have the mortgage company start to refer these deals to you.  If you can get the names and phone numbers of these homeowners, you can contact them directly.  More importantly, you can contact them when they are open to listening and expecting your call.  If the mortgage representative that can’t help them gives a high recommendation of you to the homeowner, they will be excited to hear from you.

–By Jeffrey Ringold
© All rights reserved.

About The Author:
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Jeffrey Ringold is the author of ‘How To Build A Massive Fortune Through Real Estate Foreclosures’.  He is a licensed real estate agent and investor who has bought or sold over $12 million in real estate over his 7 year career.  He is consulted by leading real estate developers and investors almost daily.

For more information on real estate investing and foreclosures, visit his web site at:http://www.MassiveForeclosureProfits.com
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