Fast Cash in Bank Real Estate Foreclosures

How You Can Survive Sub-Prime and Mortgage Meltdown

noreply@blogger.com (Stephan) — Sun, 16 Nov 2008 01:25:00 +0000

There are many causes for the current mortgage crisis in the US and financial meltdown worldwide. This article focuses on the subprime mortgage crisis and how it contributed to the financial meltdown. The mortgage crisis is one major cause for the financial meltdown.

For Decades, the type of loan a borrower would qualify solely depended on the borrowers FICO (Fair Isaac Company) score and loans were provided. A subprime loan will usually have higher interest rates than the conventional loans and were provided with no documentation or a stated income of the borrowers.

The subprime mortgages encouraged people to purchase houses that they could not afford based on their FICO score and income and savings. Many of them obtained 100% financing i.e., they did not pay a down payment for the house. This is risky as these homeowners were living almost on a month-to-month paycheck. Until the end of 2006 and early 2007, such loans were available for people with FICO scores of less than 620.

Soon, the homeowners’ inability to repay the loans made the lending institutions to increase the required FICO to 640. Still, many homeowners were unable to repay the loans and soon the subprime mortgage crisis began when the foreclosure rates increased nationally. Foreclosures are usually a loss for the bank because they end owning these properties. It is a loss even if the lenders end up selling the foreclosed homes. This is not an ideal situation.

During the real estate boom period, overbuilding lead to excess number of houses (excess inventory). As expected, the housing prices dropped end of year 2005 through middle of 2006.

There were many refinance options available so a lot of homeowners who purchased homes at higher interest rates were able to refinance at a lower rate. Between years 2006 and 2007, the real estate prices dropped again and the interest rate began to increase. The homeowners who hoped to refinance at lower rates could not find any lower rates. Some stats are varying but on an average during the year 2007, there were around 1,350,000 foreclosures in the US.

As the rate of foreclosures began to soar, the mortgage companies, investments firms and all those institutions that invested in subprime mortgages began to fail. This crisis is characterized by contracted liquidity in worldwide markets and banks. All these happened because weak global financial system and weak (and lack of) regulations that included the housing and credit systems. Some of the smaller financial institutions began to fail initially. Globally, over $400 billion losses were reported by financial institutions.

As of March 2008, around 11% of the homeowners had negative or zero equity (no equity) because their homes were worth less than their purchase price. The best option for them was to foreclose their home despite the negative rate impact. Some homeowners were able to sell off their home to pay the banks but most of them foreclosed.

There was surplus of homes. Research reports indicated that the home prices dropped by 18% in May 2008 compared to the previous year. This was after the 26% drop in 2007 compared to 2006. The bigger loss came to people who had purchased properties for investment. One example is that in Miami, FL, 85% of the real estate purchased was for investment purposes.

These were some of the reasons of the mortgage crisis. This article emphasizes on one aspect of the subprime crisis i.e., mortgage. While some believe that the practices of subprime lender and inadequate governance led to this crisis, others believe that the greedy mortgage brokers attracted borrowers to loans which were well beyond the borrowers’ means, and still some others blame the appraisers for falsely inflating the housing values. It is well known from the news that the Wall Street backed the subprime mortgage securities without doing their due diligence of determining the loan strength. Of Course some blame goes to the borrowers for signing up for loans that they clearly could not afford.

The lessons learned here are not to purchase a home if you cannot afford it, assess your financial situation rather than relying entirely on the mortgage broker’s assessment and also get advice from reliable friends, relatives and financial planners about your ability to buy a house. As a rule a house should be purchased if you have enough savings to make six - eight months of mortgage payments. This amount of saving will come handy in case of job loss and other financial disasters.

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

How You Can Buy A Home In Bank Real Estate Foreclosure

noreply@blogger.com (Stephan) — Thu, 28 Aug 2008 01:12:00 +0000

by Gabriel Adams

Buying a home is a huge investment. One important factor in the decision is to determine if you are getting a good deal for your money. Buying a home that is in foreclosure is a great way to purchase a quality home that is worth more than you will pay for it. This home can be used for your personal living or as an investment. Many real estate investors purchase homes in foreclosure then fix them up to resell. They are able to make considerable profits depending on the market in the area for homes.

Buying a home in foreclosure might be a good investment for you. There are various rules and regulations you will need to follow. You can get a listing of homes in foreclosure via the internet. You can get local listings in your newspaper. They are legally required to publish the information about homes in foreclosure as well as the date, time, and location where they will be auctioned for sale.

One of the biggest issues with purchasing home foreclosures is the lending. You will need to have a percentage of the purchase price available at the time you make the purchase. If you can’t secure financing you will loose that down payment. The best way to avoid this type of financial lose is to have financing in place ahead of time. Many people have a line of credit established with a lender so that they know the maximum amount they can borrow for any purchase.

You will want to inspect the home prior to buying it. Some homes are in foreclosure because the buyer simply couldn’t maintain the payments for one reason or another. Other homes are in foreclosure because they have serious issues that led the buyer to decide not to invest anymore money in the property. This could be due to structural damage, mold issues, lead paint, or many other factors.

Buying homes in foreclosure is quite simple if you take the time to look at what is available, having your financing in place, and thoroughly inspect the home before attempting to buy it. Some people say living in a home that you purchased under foreclosure will bring you bad luck. Others who have gotten a great deal on the home of their dreams would argue with that statement.

View Free Foreclosure Listings at http://www.foreclosurefetcher.com/

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Knowing What You Want and What You Don't Want in Bargain Properties

noreply@blogger.com (Stephan) — Thu, 31 Jul 2008 00:45:00 +0000

Home foreclosures and fixer-uppers have long been a focus of savvy real estate investors looking to quickly make big profits. Of course, if the target property doesn't meet certain criteria, an investor can lose their shirt almost as fast as a rock star on a tour bus.

A cautious and methodical approach is best for rewarding and risk-averse decision making. Keeping that mindset, here are some critical area's that must be considered when looking for real estate bargains for investing purposes.

They are not all equally important. But they must all be considered in their entirety. The property should firmly meet at least one of the criteria, and should have no unjustifiable issues in any one area.

Following these principles is essential for achieving a higher return on your investment and lessening your risk.

KNOW WHY ON PRICE

Most investors focus on price first and foremost.

They search for properties they think are selling for below apparent market value. It seems easy enough but there are several things to watch out for.

First off, never buy for less than market price until you know exactly why the seller was willing to cut the price. What was their motivation. Are they relocating or in financial duress?

If not, there may be problems with the property that require costly, time-consuming repairs. Structural problems such as a compromised foundation, or outdated plumbing and wiring could be deal killers.

CONSIDER HOLDING COSTS

A usually unforeseen profit drainer is underestimating the liquidation costs of holding and selling the property. This is not surprising when one considers all the cost components, including commission payments to real estate agents, closing costs, mortgage payments, taxes, plus repair and maintenance costs.

An faulty determination of true market value is another obstacle to the successful deal. Market value is essentially a subjective exercise where the true value is not known until someone buys the property.

It's essential to analyze similar properties in the area, keeping in mind that prices are set at the margins and may reflect the extremes of a particular housing market environment.

TAKE ADVANTAGE OF TERMS AND CONDITIONS

Investors often focus obsessively on price and location and discount other profit leveraging tools like the terms of the financing. This is especially advantageous if the property is intended an income producing rental.

In fact, used wisely, an investor can pay full price and use this positioning to negotiate lower interest rates or a smaller down payment. Over time, the rental cash flow will be in the black because of the generous terms given, combined with gradual rent increases and price appreciation.

KNOW THE LOCAL MARKET

Experienced real estate investors often rely on the fact they know more about the market than the seller does.

Rental market bargains come about because you know more about the market than the seller.

Consider the absentee owner of a rental property. They might be primarily concerned with vacancy rates, so they keep prices low instead of upgrading the property. In contrast, your research shows that particular upgrades like air-conditioning, second bathrooms, or enhanced security allow for both lower vacancies and higher rental rates.

LOCATION IS RELATIVE

Other than price, location is usually seen as the most critical component of finding a good deal. In reality, this matters much more in terms of finding a long-term residence than it does for a quick sale. It's more critical to focus on the potential profit margins than the area it's located in. If the ugly home by the dump is more profitable than the fashionable condo downtown, then it's a better deal, aesthetics aside.

FIXER UPPERS AND FORECLOSURES

A familiar area ripe for investment picking is distressed properties or fixer-uppers. Of course these are the houses that need repairs to some degree. And the investors job is to discount the costs of these repairs enough so that the profit is still suitable.

With small repairs such as painting, minor landscape, and basic flooring, profits may be available but not really worth the risk. More significant profits are found with extremely distressed properties. Those slipping down the hillside and selling for a quarter or less of normal area values. Or the plumbing is corroded, the roof needs replacing, and the interior needs to be gutted and remodeled, but the seller is asking 50% of the market value and you can repair it for much less.

GET IN A ZONE WITH ZONING

Zoning provides an opportunity to put the property to a higher or better use and is an area many investors ignore. Higher and better use means that the owner is getting the most out of the land. For example, if a lot is zoned for three units but contains a single lot, then it is not getting its highest and best use. Or if a lot is zoned commercial, yet there's a three unit residential building sitting on it, it is not getting its best and highest use, like a business or a store.

These are often bargains because the price is based on current utilization. So the single unit residential is priced low while the double unit duplex could be sold higher or rented out. Harder to find as developers stay more aware of zoning allowances these days.

Watch out for "midnight conversions" where owners, aware of the zoning ordinance, have made changes without the oversight of the local building authority. Garages being converted to second units on a duplex lot are common examples.

Zoning maps can be found at the local planning department. The biggest thing to watch out for with zoning bargains is properties with multiple zoning that is not reflected on the map.

Even if its not your core strategy, the zoning should be looked at just to avoid negative consequences. Something to beware of is a future zoning change from residential to commercial which might affect an income producing rental property.

BEWARE OF SQUATTERS

A common instance of buying bargain properties at foreclosure is handling a former owner who still resides on the property. Not facing reality or citing mortgage fraud, they refuse to move out.

You can begin action to get the individual evicted, but if they battle it in court the judge may not dismiss the case and now you have a potentially lengthy court battle on your hands. Costs totaling in the many thousands and time measured in multiple months could be the end result of the purchase.

In any other type of purchase, always stipulate the conditions of occupancy, such as the house must be empty, before closing the deal.

In closing, these are some important areas you should use as a framework when searching for bargain properties. It serves to remind us that there's a bit more more to it than simply price and location.

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Top Five Tips for Buying a Foreclosure Property Below Market Value

noreply@blogger.com (Stephan) — Thu, 31 Jul 2008 00:40:00 +0000

Contributed by: Jim Saccacio, RealtyTrac Chief Executive Officer

If you feel like the escalating costs of real estate have priced you out of the market, think again. It may be time to investigate the vast opportunities available in the foreclosures market.

For people willing to do a bit of homework, the foreclosure market offers some of the best opportunities available in real estate today. Experts point toward significant growth in available foreclosure properties, so there’s never been a better time to line up your resources and educate yourself about this previously hidden market. It’s not unusual to save from 10 to 30 percent of the market value on a foreclosure property, and certain properties offer savings of 50 percent or more! There really are bargains out there. You just have to know where to look.

Web-based services such as RealtyTrac give consumers access to foreclosure and pre-foreclosure information that was previously available only to professional real estate brokers and investors. Today, homebuyers can use these services to identify and research potential home purchases, as well as to find the tools and professional resources they need to help them close the deal. RealtyTrac, which provides all the foreclosure data for both MSN House and Home and Yahoo! Real Estate, has already compiled a list of over 550,000 foreclosure properties across the country.

The keys to a successful foreclosure property purchase are diligence and patience, along with taking an educated approach to investing in this market. RealtyTrac CEO Jim Saccacio offers five tips to help you close a deal on a foreclosure property:

1. Learn about the different types of properties and the foreclosure process.
Not all foreclosures are the same! You need to educate yourself on the difference between the three basic types of properties, including notice-of-default (NOD), notice of trustee sale (NTS), and real-estate-owned REO, as well as the positive and negative aspects of buying at each stage of the foreclosure cycle.

As a rule of thumb, the best savings can be made at the pre-foreclosure stage, where home owners can avoid a foreclosure and lenders can save the time and cost involved in going through the process. Another critical point in the process is immediately prior to the auction date, when all parties might be most open to a last-minute solution.

2. Secure financing early
It’s important for a buyer to be pre-qualified before engaging in discussions with a seller. This ensures that the buyer is in a financial position to purchase the property, and is in the strongest possible position to negotiate.

3. Engage a real estate agent as a “buyer’s representative”
There’s a distinct difference between a buyer’s and a seller’s representative. Buyer’s representatives have the home buyer’s interests at heart, and are charged with finding the right property and negotiating the best price for their clients. Picking the right real estate agent will make your life much easier. Ideally, select an agent who specializes in the foreclosures market and has specific experience in REO properties.

4. Do your homework
Purchasing foreclosure properties is somewhat more risky than buying traditional real estate properties. But, with that risk comes reward in the form of much higher potential savings. With the right examination and due diligence, buyers can significantly reduce the risks. As with any purchase, timing is everything! But, it makes sense to give any property under consideration a thorough examination, including determining its condition and value, finding out the amount in default and the remaining loan balance, and running a legal investing report to make sure the property is free of any financial liabilities. Of course, it never hurts to foster a positive relationship with the seller!

5. Make a realistic offer
If you want to be taken seriously as a buyer, you must be realistic when preparing an offer. Lenders aren’t likely to give properties away, particularly in a real estate market where prices continue to rise. Additionally, homeowners in financial distress may be difficult to deal with, particularly early in the foreclosure process. An educated buyer—one who knows how much is owed on the property and what its market value is—can usually come up with a realistic offer; one that offers significant savings, while meeting the requirements of the lender.

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Understanding the Four Stages of Foreclosure

noreply@blogger.com (Stephan) — Thu, 31 Jul 2008 00:35:00 +0000

When you buy a house, you do not consider the fact that someday you may run into financial problems and that foreclosure may be something that you're facing. Many people panic and think that when they fall behind on their mortgage, there really is no way out. The fact is that there are many options for those who face foreclosure if they do things in a timely manner.

There are actual stages of foreclosure that a person will go through, and actions you can take at each stage to possibly forestall or even prevent the foreclosure. If you know what the stages are, you can better plan how to get out of foreclosure. By knowing what to expect and what you can do, you will be on your way to saving your home.

The first stage: Your mortgage is late. There can be many reasons that make you fall behind on your mortgage. Perhaps you fell ill or you were laid off. No matter what the reason for which you lost your steady income, the fact is that you fell behind on your mortgage so now you are trying to make ends meet and save your house. You want to be sure to keep in contact with your mortgage company. Many people make the mistake of ignoring their lender and that can be very damaging to the loan. You will only add to the late fees you are accruing and there can be other costs as well when you neglect your lender's enquiries.

The second stage: Once you are late, you suffer the consequence of being reported as late. There can actually be legal fees that may apply due to the fact that your lending is filing for foreclosure. Your delinquency will be reported to the main credit agencies and this will damage your credit rating.

The third stage: Once the above stages have passed, your lender may start foreclosure proceedings. This can entail having you evicted from the property. Most lenders will give you anywhere from one to three months to get things in order to try and fix things. If you fail to fix things then local law enforcement officials may come to forcibly remove you and your family from the property.

The fourth stage: Once you have been removed from the property and the house is vacated of your belongings, your house will be auctioned. At this point, you still have a change to retain your property since you also have a right to bid on it at the auction. You may actually be able to buy your house at auction for a fraction of the cost that you owed on it.

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

How To Avoid A Forced House Sale

noreply@blogger.com (Stephan) — Sun, 18 May 2008 01:23:00 +0000

Many parts of the world are experiencing a severe downturn in their real estate markets. You only have to scan local newspapers to see the increase in foreclosures or mortgagee sales. All this is very upsetting to those involved especially for those losing there homes. Spare a thought also for those who have their savings invested in these mortgages. Just regular people who could be at risk of losing all their life savings when some of the less competent financial institutions are forced into receivership. You may say that they should have been more careful in the first place but it is very easy to be wise after the event.

Mortgagee sales and foreclosure are something nobody enjoys except, perhaps, for the opportunist that gets an outright bargain. For everyone else it is just worry, stress and heartache. So what can be done. For those home owners that have no equity in the home and have a 100% mortgage the best thing may be to just walk away from everything and just rent a home, even though it might make it difficult to borrow money again in the future.

For those who want to stay on in there home it may pay to seek the assistance of a financial advisor or prominent mortgage broker. Firstly they need to have their finances properly ordered and appropriate budgets put in place. Then they can search out alternative mortgage finance with better or more affordable repayments. There are many mortgage variations out there that could fit perfectly. Just simply lengthening the term of the mortgage could be all that is required. Try not to get a bad financial record before you look for an alternative mortgage and this can work very well for hard pressed home owners.

Sometimes it can simply be better to sell and salvage what money you can from your home. If you leave things until the mortgagee auction your interests are the last to be considered and the finance companies are only interested in getting most or all of there money out. You could and probably will lose everything. In this market finance companies panic and will take big losses on there loans just to quit them.

Other strategies that can be tried are swaps and trades. Try advertising to trade down. Offer to trade your home for a cheaper property that may be smaller or in a less desirable area. Do not be too fussy, the idea here is to protect your money. You can always sell again when the market picks up.
Maybe trade a car or a small business as part payment. A home owner traded a shop full of garden ornaments once as a down payment on his house that was difficult to sell. It was fairly inconvenient but it worked.

Whatever you do, avoid waiting until auction day thinking that it may never happen. Get proactive, find the best selling real estate agent in your town and get him to advise you. Get him to give you a realistic selling price and marketing campaign and if it makes sense go ahead with enthusiasm and get the thing sold.

Stephan Iscoe, Phd
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

How You Can Flip Homes Without Flipping Out

noreply@blogger.com (Stephan) — Mon, 12 May 2008 00:04:00 +0000

(NewsUSA) - Buy a run-down building in a nice area. Gut the rooms and rebuild state-of-the-art kitchens and bathrooms. Then sell the home for hundreds of thousands of dollars in profit.

The idea of "flipping" homes appeals to Americans. But for many aspiring flippers, reality does not live up to the expectations created by reality television and get-rich books.

Flippers buy distressed properties in nice neighborhoods. They often run into trouble with contractors to stay on budget for the home repairs or improvements. People attempt to make lavish improvements and don't realize how much time and money the ambitious renovations will really cost. By the time they sell their real estate project, many flippers barely break even. In some cases, flippers lose money. Sometimes people create a dream property, put it on the market, then watch the home sit for months without exciting buyers' interests. In the meantime, mortgage costs eat into flippers' profits.

When it comes to flipping homes, profits depend on quick sales. Before buying properties, people should learn how to sell them. Californian real-estate professionals have created a step-by-step system for homeowners looking to quickly sell properties.

The "Fast Action Homes Sales System" teaches homeowners how to create bidding wars with or without a real estate agent. Homeowners using the guide learn how to attract buyers' interest with signs, printed ads and custom-built Web sites. The advertisements lead to a frenzied weekend bidding war, giving sellers the advantage.

The whole process, from first step to exit, takes two or three weeks. Before potential real estate moguls invest in a property, they should start planning its final sale -; selling a newly renovated home quickly is key to making a profit-earning flip.

To access a quick-start guide to the Fast Action Home Sales System, either visit www.RealEstateKit.com or call 1-800-669-1038.

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

What You Need to Know About the Foreclosure Crisis

noreply@blogger.com (Stephan) — Sun, 02 Mar 2008 20:51:00 +0000

by Shawn Buryska

For several years low interest rates and low down-payment percentages enabled home buyers to get into increasingly larger and more expensive homes. Then as home prices rose, home sellers took advantage of the “equity” in their existing homes to move up to even bigger, more expensive homes. Housing prices continued to rise, which brought talk of a housing bubble into the picture and speculation regarding what would happen when the bubble burst. And the consequences of a burst housing bubble add many challenges and obstacles to overcome in the housing market.

During the last year we’ve been experiencing the fallout from the bursting bubble as the high volume of homes for sale pushed prices down and homeowners found themselves unable to get out from under unaffordable mortgages.

Now the big news is the “foreclosure crisis” and what this means for the housing market.

One of the challenges in trying to completely understand the magnitude of this “crisis,” is identifying and interpreting the data correctly. The most commonly cited resource for foreclosure statistics, RealtyTrac, is a marketplace for foreclosure properties. The site’s data includes several types of foreclosure filings in determining their statistics, including default notices, auction sale notices and bank repossessions, making it possible for a property to be included more than once in certain statistics.

According to RealtyTrac (realtytrac.com), foreclosure filings increased 75% in 2007 from the previous year, with more than 1 percent of all U.S. households in some stage of foreclosure, up 79 percent from 2006. There were 1,285,873 properties in some stage of foreclosure during 2007. Nationally, there were 215,749 filings in December, nearly double that of December, 2006 (97%).

In 2007, Minnesota ranked 25th in country in terms of foreclosure filings with 11,557 properties having some level of foreclosure filing (default notices, auction sale notices and bank repossessions). Minnesota’s foreclosure rate (.513%) was half the national average (1.033%) in 2007.

The 1,232 Minnesota filings in December 2007 represented an increase of 1.82% from the previous month and 71.83% from December 2006. For the fourth quarter there were 4,092 filings in Minnesota, an increase of 2.2% from the previous quarter and 113.35% (3834 properties with filings).

The rise in foreclosures presents challenges to both buyers and sellers. Sellers will encounter additional competition, exerting further downward pressure on home sale prices. However, while foreclosure properties may be lower priced as the seller tries to recoup some of their losses, buyers need to use extra caution when considering a purchase. These properties typically have not been well-maintained and may require costly improvements or upgrades to be habitable. A professional home inspection is essential when considering a foreclosure property. Traditional sellers are more well-advised than ever to be sure their property is in pristine condition to outshine the competition.

While the rise in foreclosure activity shows no signs of slowing down anytime soon, the government is working to assist financially troubled homeowners. In late 2007 President Bush announced a deal with the mortgage industry that would freeze some mortgage interest rates for up to five years. For details on this program, contact the Hope Now Alliance, which is a private-sector group of lenders, loan servicers and mortgage counselors.

Real Estate in Rochester MN can be provided by Realtor Shawn Buryska, who specializes in southern Minnesota MLS database searches, finding Rochester MN homes for sale or rent, or selling your current home or condo.

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Seven Sure-fire Ways You Can Avoid Foreclosure

noreply@blogger.com (Stephan) — Sat, 09 Feb 2008 22:28:00 +0000

Although it's a situation none of us ever wants to be in, home foreclosures are on the rise. If you ever reach the point where your lender is ready to foreclose on your home, the following tips may help you delay or even avoid foreclosure proceedings.

Tip 1: Deal with the problem head on.

If you can't make your monthly payment, face up to it and take steps to deal with it. Avoiding the problem will only make things worse.

Tip 2: Your lender is your friend.

The best way to avoid foreclosure is to maintain a dialogue with your lender. Although it may not seem that way at times, it is in their best interests to help you avoid foreclosure.

Tip 3: Do your homework.

It is important to know what rights you have should you go into default. Go over your loan documents so that you know what will happen and the time frame in which it will happen.

Tip 4: Consider talking to a housing counselor.

Housing counselors are available through grants from the United States Department of Housing and Urban Development. These counselors can take a look at your situation and help you get your finances organized. Some counselors will even represent you in negotiations with your lender.

Tip 5: Spend your money wisely.

When trying to avoid foreclosure it is important to spend money only on necessities. Take a look at your finances and eliminate unnecessary expenses so that you can make your mortgage payment and feed your family. Eliminate luxuries if need be, including cable TV, health club memberships, and eating out at restaurants. You should also consider delaying payment on unsecured credit cards if that money is needed for paying your mortgage.

Tip 6: Consider cashing out.

Take a look at your assets and consider selling them for cash so that you can pay your mortgage and any back payments you might owe. This includes higher-ticket items like jewelry, furs, cars, and boats. Lenders will be happy to work with people who are demonstrating that they will do whatever it takes to make their house payment.

Tip 7: Don't pay a fortune for someone to help you stop foreclosure.

While the vast majority of these companies are legitimate, they are simply offering negotiation services through a HUD approved counseling service (see Tip 4). In many cases, the HUD counselors will help you for free.

The important thing is to stay calm and know that there is help available for you.

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Discover Four Simple (But Not Easy) Steps To Real Estate Investing Success

noreply@blogger.com (Stephan) — Sat, 05 Jan 2008 00:06:00 +0000

Real estate investing is always good and sometimes it's red hot. When it's hot dozens of real estate seminars begin rolling across the country and thousands of people spend thousands of dollars for investing education.

It's startling to learn that of all those thousands of eager folks who attend these seminars only about 5% buy even one investment house. Why? The real estate gurus sell the "sizzle" and make profiting from real estate sound easy. The truth is that it's simple, but not easy.

Here's a quick plan that will enable anyone to begin building financial independence.

There are basically four steps to investing in single family homes:

1. Buy homes below full market value. Yes, people really do sell homes for less than the home's full value. The key is to understand that most home owners will only consider a purchase offer that is all cash and within 5% to 10% of their asking price.

The successful investor learns to find financially distressed home owners who have no choice but to sell for less than market value. They have lost their job or been suddenly transferred; they are divorcing; they been living beyond their income; the family has been overwhelmed with medical bills and, not uncommonly these days, their money has gone to support a drug habit.

Those are examples of motivated sellers. They have to sell and they will accept something other than a conventional, all cash offer.

2. How do you find motivated sellers? You work at it! Like any business it is important to develop a little marketing plan. One that is simple, yet very effective, is the one that was proven 75 years ago by the Fuller Brush company; door to door sales.

You are selling your skill as a home buyer to people who must sell. Your are there when they need you and you have the skill to help them solve at least part of their problem. With door to door prospecting you will learn more and buy more homes quicker than any other method. However, most people just won't walk door to door for three or four hours per week. OK, there are other ways.

You can watch public notices for the announcement of foreclosure sales. Meeting with a home owner right after they've received a notice that they are about to lose their home allows you to deal with a very motivated seller. Other public notices that provide buying opportunities include probate, divorce and bankruptcy. You can follow the Homes For Sale listings in your local newspaper or Internet site.

You can telephone the names found in these notices or, and this is the least time consuming, send a postcard expressing your interest in buying their property. It will produce buying opportunities, just not as many as personal contact.

3. After you've found a motivated seller you must understand how to frame offers that provide benefits for both you and for the home owner. A good real estate investor quickly learns that this is not a business of stealing property, but of solving problems in a way that benefits the seller.

The home owner is in a tight spot of some kind and you can save them from public embarrassment and, in most cases, give them at least a little cash to get a new start.

No investor can afford to leave cash in every deal. No one but Bill Gates has that much available money. You must use creative techniques like, leases, option and taking over mortgage payments. Little or no cash is needed for those deals. You can find plenty of reasonable priced educational material on those subjects in book stores or on EBay. The same education that seminars sell for thousands of dollars.

4. You make your profit when you buy! Never make a purchase until you've carefully determined exactly how you will get to your profit. If you hold it as a long term investment will the monthly rental income more than cover the monthly mortgage payment? Will you sell the deal to another investor for fast cash? Will you do some fix-up and sell the property for full value? Will you quickly trade it for a more desirable property? Have a plan before you buy.

There you have four steps that even a part-time investor can execute in three to four hours per week. What's the missing ingredient? Your determination and perseverance. If you will unfailingly follow the plan for a few months you will be well on your way to financial independence.

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

How to Use Lease Options to Make Money

noreply@blogger.com (Stephan) — Mon, 31 Dec 2007 03:08:00 +0000

Really, if you think about it, buying a property and renting it out is nothing new in the world of real estate investing. The practice has been going around much longer than any of the real estate gurus that created these "get rich" real estate courses!

So why is everyone making such a big hoopla about doing lease options?

No Money Down Deals
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One of the many reasons that lease options are so popular, is the possibility of creating a No, or Low Down payment to purchase the home. This is done by working directly with the seller of the house, and hammering out a deal between you and the seller.

That means, no banks, no credit checks and no qualifying! Of course, not every seller is going to be open to the idea of flexible terms for you, so it would be a good idea to work with motivated sellers.

Working With Motivated Sellers
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Although these deals are more difficult to find, they are out there and they exist. You just have to know where to find these deals. Many of these deals can result in no down deals if you offer the seller something that they desire. One such item is the sales price. Offer to pay maximum dollar before repairs to entice the seller to offer you good terms for buying the property.

While other investors come by and offer them low-ball insulting offers, you might get the nod for coming out and offering a better deal.

Remember, these people are in distress some how, and if you put together a fair offer for both parties, you may get the property at a really good price.

Giving To Get What You Want
======================

Nobody likes to be sold. Don't make your seller feel like they've been ripped off! Creative negotiating is the key to securing a great deal. There's no need to strip the seller of their dignity by insulting them with a totally one-sided offer. Make the seller feel like they are getting something out of the deal and you'll close more profitable deals faster with less problems.

While you are negotiating with the seller, find out just what they need to get rid of the property and go from there. Most sellers in distress don't have a lot of time or options and may offer you a very good deal.

Also take in consideration the condition of their property. You cannot pay full price if the house is in need of repairs. A good suggestion would be to only look at houses that are cosmetically damaged, and not structurally damaged.

Needing a new roof or new plumbing installed is different than just cleaning up the yard and putting a fresh coat of paint on. Actually, the more cosmetically unpleasing the property is, the better your negotiating leverage is. You'd be surprise the amount of discount you can get from an unpleasant looking property!

To ensure the property has no major problems, bring along a handyman and have them hand you estimate for getting everything done. Once he does, simply hand that to the seller and show them how much it's going to cost to get this property back into a livable place. If the seller can't or won't fix the problem areas, ask them to add the cost into the final sales price to make it fair for both parties.

Important Tips When Buying With Lease Options
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When purchasing property via "For Sale By Owners" (in other words, no real estate agents), always buy the property on a Land contract or a Contract for Deed. Both of these contracts are used when selling property between two parties without a real estate agent. Sit down with a real estate attorney and have them go over the details with you for a land contract.

If the seller offers a lease option to you, turn the offer down. Here's why. A lease is another word for renting their property, which means you don't own it.

If you are simply a renter of the property, the seller only needs to get a court order of eviction and your out of the property. If however you are the owner of the property, the seller will most certainly have to induce what is called a judicial foreclosure. The difference is probably $10,000 dollars or more in attorney fees, court fees and between 8-12 months time for processing.

A judicial foreclosure is very costly and time consuming for the seller, and would probably force him to negotiate more favorably towards you. All the while, the property is in a period of Stay, of course you are still required to pay the seller and follow through with your end of the contract. However nothing can be put into action until after the foreclosure is completed. Wow, that's a very important point.

Know that this has happen and the people ended up staying in the home mortgage free! They didn't fulfill their end of the contract by paying the seller their monthly mortgage payment like they should have, yet the seller couldn't do anything until the pending foreclosure had been resolved. Not even get the buyer to pay their monthly mortgage payment to them!

These are the extreme's. But it would be in your best interest to see that you are considered an owner then a renter.

Important Tips When You Lease Your Property
==================================

For the very same reasons listed above, when you look to sell your property, you first do it as a lease. If the buyer/renter insist on having an option contained within the lease contract, you write the option on a separate contract. If there was ever a dispute, you may gain an advantage in court since the original lease is basically a renter's agreement.

The option that you have your attorney write up, simply will include that the option is not an option unless terms of the lease agreement is met. Always make the option contain wording that has the renter fully complete the lease agreement first. A good term for a lease agreement is 24- 36 months. The option would be null and void if the renter moves out before the lease agreement is up or is late on any rental payment within that time.

By doing so, if your renter violates any portion of the lease, you simply file for an eviction and your tenant will need to evacuate the property within the time stated by the eviction notice given by a judge. No judicial foreclosures, no lengthy waiting periods and the defaulted tenant is removed in less than 45 days!

Also ensure that your contract has some type of clarification as to the sales price. Specifically the property should be priced at the market during the time of the sale, not fixed at the time of the lease agreement started. You also want to make sure that you stipulate that as a renter, the renter cannot sub-lease out the property and by doing so would violate their lease agreement. You don't want another investor in there trying to profit off of your deal.

If there is any violation of the lease agreement you can let the renter/buyer know that you may take them to eviction court if the violations aren't corrected.

Time To Cash Out Your Option
=======================

If the lease agreement is fulfilled as stated in your contract, then go ahead and offer your leaser the chance to own the property outright. Of course, they will have to qualify with a bank and get the whole sales price paid off. By doing this, you would have the funds to pay off your contract with the original seller, and pocketing the difference from your buyer.

Remind the buyer/renter that the sales price is based on what the price is at the present time, and not when they had initially started their lease. A tactic of negotiating for the buyer/renter is that the price should be set back to the price when the house was originally rented to them. You can let the buyer/renter know that you will offer them a 5% to 10% discount on the current sales price for being a good tenant.

With any of the strategies listed here, it is always wise to consult a real estate attorney to find out your legal options of any part of the deal.

Happy Property Investing!

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Real Estate Investing in Bank Foreclosures

noreply@blogger.com (Stephan) — Wed, 19 Dec 2007 20:31:00 +0000

Loan foreclosures on real estate property provide a multitude of opportunities and challenges to a real estate investor. When a homeowner faces default on their loan and the possibility of a foreclosure by the loan holder, an investor has an opportunity to help the homeowner out of their problem and to make a profit at the same time.

No foreclosure situations proceed identically, but let's talk about some of the typical problems, steps, and resolutions. Large books have been written that cover the wide range of problems and solutions, but for the sake of this short article everything will be kept simple.

Homeowners miss loan payments for a variety of reasons, and when a homeowner has been delinquent on their payment for a number of months the loan holder, most commonly a bank, will issue a Notice of Default. The Notice tells the homeowner how much they owe in missed payments plus how much they owe in attorney fees and other penalties. The Notice also gives the homeowner a time period to be able to pay all that is owed and bring the loan back to good standing. If the homeowner can't pay all that is owed, then the bank has the right to insist that the homeowner vacate the property and the bank can then put the property up for sale or auction.

During this period of time between the Notice and the foreclosure sale, often called the pre-foreclosure period, the homeowner has the option to sell the property and to use the proceeds to pay off the arrearage that is owed. This pre-foreclosure period is also a time when a resourceful real estate investor has the best opportunity to help the homeowner with their problem. However, the homeowner who is in default and the investor have to find each other.

Since the Notice of Default is a recorded document and is made public, the investor can often view the Notice shortly after it is recorded. In most states and counties the Recorder's office makes the Notice public by posting it at the local courthouse or by posting it on their internet website.

The investor will generally find the Notice on the Internet and then contact the homeowner. Through a combination of letters, post cards, phone calls, and home visits the investor introduces himself or herself to the homeowner and suggests some courses of action.

Often the investor can take over the property and the responsibility for the loan by offering a reduced sales price or by taking over the loan altogether. This allows the homeowner to leave the property and the problems behind while the investor deals with them. The advantage to the homeowner is that they can avoid having a property foreclosure on their record, which would damage their credit score and their chances to purchase property in the future. In exchange the homeowner will generally willingly give up a large part, even all, of the equity that they had in the property.

Now the investor has an opportunity to make a profit if sufficient equity has been left in the property for him to make arrangements. For example, the investor may be able to pay off the arrearage, fix up the property, and sell it for a profit. That takes a fair amount of time and resources. The investor could also pass the deal along to an investor who specializes in fixing up properties and take a small but quick profit. Or the investor could sell the property at an attractive discount before the property goes to the foreclosure sale and make a profit without putting much of his own money into the transaction.

If there is not sufficient equity in the property for the above solutions to work, then the investor could negotiate with the bank to reduce the outstanding loan balance in exchange for a quick sale. That would save the bank from having to foreclose on the property and having the property become part of the bank's non-producing inventory for an uncomfortable period of time. This solution gives the investor the necessary equity to be able to make a profit.

There are numerous other scenarios, complications, and solutions, but this article has highlighted several of the more typical and common situations. In the transactions discussed here the homeowner benefits by being able to escape a damaging foreclosure and the real estate investor benefits by being able to make a profit on their investment of time and resources.

Stephan Iscoe
Publisher,
MoneyMakersNews.com

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

How to Effectively Profit With Lease Options

noreply@blogger.com (Stephan) — Wed, 05 Dec 2007 04:26:00 +0000

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Real Estate Investing: Bank Foreclosures

noreply@blogger.com (Stephan) — Wed, 05 Dec 2007 04:22:00 +0000

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Finding Motivated Sellers

noreply@blogger.com (Stephan) — Wed, 05 Dec 2007 04:17:00 +0000

What makes a real estate deal, a deal? Well there are many reasons why, but one of the most significant sources of great real estate deals has nothing to do with the real estate itself. Sure...there are rundown homes that are selling for pennies on the dollar, but its selling for pennies on the dollar for obvious reasons!

Where the hidden "gems" are found is within the people who own the home. It's actually the situations that they are in, such as foreclosure, divorce or maybe a death in the family that present the opportunity. It's the situation that gives the real estate investor a chance to get the property cheaper than it's actually worth. Why are these situations so valuable? They present a possible problem to the current owner, where they may need to sell the property very quickly and at a price more favorable to the buyer, namely you!

The urgency to solve their existing problem gives you a chance to be a problem solver. This generally creates an opportunity if you know how to solve problems.

Uncovering The Hidden Gems!
======================

Since the majority of the time, "distressed sellers" aren't in plain view, we have to search for places that will provide us the information that will gives us hints as to their possible situation. These "hints" of information can be found at your local County Recorder's office.

The County Recorder's office has a myriad of information that can lead you to where the deals are. Here's some of the examples of listings that you may investigate through public records and some other tips that don't require research via public records:

1) Notice Of Default - this is a notice that the bank sends out to the borrower notifying them that they are delinquent on their mortgage payment. This information is readily available as it is public record. Ask your County Recorder clerk to assist you on finding this valuable information.

2) Notice To Condemn - this is a notice that is sent out to the homeowner notifying them that all or a portion of their property doesn't meet building or zoning code for that particular county. The homeowner has a certain time frame to fix it, or the County will force the owners out and condemn the property. You don't want to deal to much with the major fixer upper type, but sometimes people put on add-ons to their homes, without hiring a contractor to do the work. The results are sometimes not up to building code, which if not fixed within a certain time frame, can lead to the County to condemn it.

3) Notice Of Divorce - this is a preliminary filing to an inevitable divorce. Usually before the actual divorce, there is a hearing, and that hearing produces a formal date in which a divorce will be finalized.

4) Delinquent Property Taxes - these are self explanatory, however there are certain laws on how the State proceeds on recouping property taxes. You would do best to talk to an attorney about the process in your State.

5) Pending probate court cases where the beneficiaries live out of State. These cases are assigned to an "executor" to liquidate the assets for the beneficiaries. They can be a relative or possibly an attorney. You would simply contact the executor to see what price range the beneficiaries are asking for. Most times, the beneficiaries want to sell fast, because they have no interest in handling the affairs in a different State or they don't have the time to.

6) Out of State owners can usually qualify as a possible lead to a good deal. The property or situation though, has to dictate the reason as to why these owners would be motivated.

7) Rental houses - the idea behind rentals is that some rentals are on the market, because owners may have tried to sell in the past with no success, and are no stuck with a property that they really don't want. A good indicator you might want to look for, are houses that may have uncut trees or grass within the front yard. Broken window or graffiti may also be a good indication of an unwanted property. These are all things that are cosmetic, and can be fixed up with a clean up crew.

8) For Sale By Owner - some of these homes may not have enough equity to pay a realtor. These are prime candidates for a subject to type deal.

When doing any of these deals, you should always let the seller talk more, while you listen to their situation. People who are in difficulties tend to talk about their problems to make them feel better.

If they don't like to talk much, ask pertain questions as to why the house is selling or how quickly do you need to sell the house. By understanding their situation, you can better understand how you make an offer on the property. As a real estate investor, you are always looking for a reason to give you, the real estate investor, a benefit in the deal.

Here's some of those benefits you are looking for:

1) Lower price offering.

2) Subject to deals (see my other article on this topic).

3) Flexible pay plan or price offering.

4) Low to no downpayment required.

The main theme in these techniques, are two fold: getting a good deal for you the investor, and picking up the property before it becomes known to everyone else!

Another good idea is to have a handyman check the property to ensure that it is in good condition and if repairs are necessary, to get an estimate on the cost. This combined with the seller's situation, gives you a better idea on what your offer is going to look like.

Happy Property Hunting!
Stephan Iscoe
Publisher,
http://MoneyMakersNews.com
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Learn the Insider Secrets of Buying Bank Foreclosure Properties

"Subject To" Real Estate Deals Explained

noreply@blogger.com (Stephan) — Sat, 01 Dec 2007 22:16:00 +0000

"Subject To" real estate financing is fairly new on the real estate investing scene, mainly because many investors don't know what it is.

"Subject To" financing actually can be a win-win situation for both the seller and the buyer/investor if both parties understand their obligations to one another. The seller usually gets to sell his/her property at the asking price which was originally sought, and the buyer/investor usually gets the property with very little money down, if any, while not having to qualify for any bank loans.

We know, that traditional real estate investing is mainly about buying low and selling high, and making a profit from that difference, usually over time. There's absolutely no secret to that. While doing it this way, of course, you would incur all the paperwork and everything else that goes along with buying and selling a home like paying all the transaction fees that are involved like commissions, closing costs, title, recording fees and of course your time. On an average, the whole process usually takes a month and a half up to six months depending on the situation.

Creative financing, or "other than" traditional and/or conventional real estate investing, is basically working out an agreement that is fair both the seller and the buyer, without using banks or mortgage brokers. By incorporating this type of financing, the sellers can sell their property for the price they want, and in a timely fashion. The buyer/investor can create an environment for him/her to profit in some manner over a period of time.

By leaving out the usual suspects like title companies, real estate agents and loan officers, both parties stand to make the transaction more profitable for the buyer/investor and more cost effective for the sellers. Specifically this can be real profitable for the real estate investor because in any type of investing, and especially in real estate, it's about leverage. The leverage is what makes creative financing a powerful, profit-making tool for those looking to start a real estate investing business. The leverage is usually represented by how much money you put into a certain investment, and how much you make from that amount over time. "Subject To" deals make your leverage extremely high, since most of the time you place a small amount of cash, for usually a much lager return.

Let's go over a sample situation which would create an ideal environment for a "Subject To" agreement.

Debbie and Joe Blume bought their house five years ago for a $100,000 dollars. After 5 years, they now owe about $95,000 dollars, while their house is appraised for $160,000 dollars. Both Debbie and Joe have accumulated a credit card debt of about $20,000 dollars since that time, and of course, the interest on that debt is much larger than they really care to have.

Joe and Debbie take out a second mortgage to pay off their credit card debt, take a vacation and buy a new car. With their second mortgage, they do all those things and have about $10,000 leftover, after everything is done. After 7 short months, most of that $10,000 is gone also.

Shortly after this, Joe receives an offer within his company for a higher paying position, but in a different State. Joe and Debbie talk it over, and decide to take the offer and move out of State. Of course, deciding to do that, they must now sell their beautiful home.

Like so many of us, when we look to sell our house, we think logically and talk to a real estate agent. The agent informs them that there is little to no equity left in the house, and tells the Blume's that they will have to pay the agent's commissions out of pocket. Of course, Joe and Debbie can't do that, because they ran out of money and are basically living paycheck to paycheck until the new job starts.

Joe starts to worry a bit, because he needs to get to his new job out of State, within 14 days, and Joe and Debbie would like to spend a few days off together before going to his new job.

Joe starts to think and remembers a "We Buy Houses" sign down the street from their home and runs down and calls the number on his cell phone. After talking with the investor, Joe finds out that the investor isn't will to pay more than $120,000 for the house. Hearing that, Joe is mad and upset that such a person can come in with such a low and insulting offer. Besides Joe couldn't do that deal anyway because the second mortgage they took out last year, places their debt just about what the house is worth.

Getting worried and running out of time, Joe places an ad in the local newspaper advertising the house as a "For Sale By Owner".

Mostly everyone is trying to low ball him except for one guy who said "he will offer the asking price, so long as he can see the place first". Feeling excited and curious at the same time, Joe invites the man over.

A couple of hours later, Brad comes over and tells Joe that he is the one who called about the house. Brad tells Joe to explain to him a little about the house and his situation.

Joe spills his guts and describes his dilemma to Brad. After Joe finishes his story about his situation, Brad tells Joe that he thinks he can still offer the asking price and if Joe was still interested in selling?

But before they start agreeing any further, Brad says, that as an investor, that his primary motivation to make a profit on the house. Joe and Debbie understand that, so long as their asking price is met and the house is sold quickly.

Brad continues and tells both Joe and Debbie that because of his need to make a profit, he needs to offer an agreement which will satisfy both their needs. Brad continues and says "That offer is what's called a Subject To" offer. Of course bewildered and confused, Debbie and Joe ask what kind of program is that. Brad simply states, that it's a program that suspends both their money for the house and his profit on the house for 2 years, while Brad takes over the payments. Not fully understanding, Joe continues to listen to Brad's offer.

Here's what it entails:

>keep the current mortgage in place for 2 years, at which time the house will be sold, and Joe's originally asking price will be met, plus 5% of whatever profit is made by Brad

>escrow account is setup and paid by Brad to ensure full integrity of his contractual agreement with Joe
and Debbie

>property is claimed over to Brad which obligates Brad to continue making the existing payments to the escrow account. The deed will stay in the attorney's presence until the deal is fully obligated by Brad in 2 years

>relieves Joe and Debbie of the monthly debt for the mortgage payment so they can move on with their life

>Brad offers to pay closing cost and 2 months of mortgage payments to the escrow account to solidify his offer and his intentions to make good on the contract

After discussing the deal with each other and realizing that their options and time are running low, both Joe and Debbie agree with Brad over the details and sign over the deed to Brad via the attorney.

Brad then quickly rents out the house to cover the mortgage payments and manages the house as a rental.

Two years later, Brad sells the house for $210,000 and pays $160,000 dollars to Joe and Debbie's mortgage company, plus sends Joe and Debbie a check for %5 of the $50,000 dollar profits, which is $2,500. Everybody wins!

Best of Success,
Stephan Iscoe

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Subprime Foreclosures: A Lengthy Process

noreply@blogger.com (Stephan) — Sun, 08 Jul 2007 14:38:00 +0000

by Paul Sunndin

Subprime lending is defined as lending that involves elevated credit risk. Prime loans are typically made to borrowers who have a good credit history and have demonstrated to the lender that they have the capacity to repay their loan obligations. However, subprime loans are often made to borrowers who are perceived by the lender as deficient on one or both of these grounds.

There are a couple of questions that are often asked:

1)How have subprime mortgages contributed to increased foreclosure rates?

2)What is the foreclosure process for a subprime mortgage?

With all the teaser rates given to borrowers over the last several years, the question is really whether or not we will witness substantial foreclosures as these teaser rates increase. Lenders and note holders are not terribly excited to foreclose. As a result, it is common for loan payments to be several months delinquent prior to the start of the foreclosure process.

But when lenders proceed with the foreclosure process, the timeline can be quite lengthy. When foreclosing a trust deed, all amount owed and secured by the trust deed are accelerated and immediately become due and payable regardless of the maturity date specified in the note, provided that an acceleration clause is included in the promissory note and/or deed of trust. There are generally two methods used to foreclose deeds of trust: judicial foreclosure and non-judicial foreclosure.

In certain circumstances, a lawsuit is filed in superior court to foreclose on the property (judicial foreclosure). When the beneficiary files a lawsuit against the trustor in superior court, the property (unless the default is remedied) will be ordered sold. The judicial action to foreclose is generally more costly and will often take more time to complete than the non-judicial foreclosure.

In a non-judicial foreclosure, the trustee (under the power of sale clause contained in the deed of trust) may move forward with a foreclosure at the lender’s request and sell the property without court supervision. This privately held public sale will take at least four months to complete. If the deed of trust does not contain a power of sale clause, the only option is to foreclose judicially. However, most deeds of trust include a power of sale clause.

With the large amount of adjustable rate mortgages re-setting in the coming year, we should definitely witness increased foreclosure rates. But hopefully these foreclosures occur in markets with healthy local economies and adequate job growth. This would allow any sales of foreclosed properties to occur in a reasonable amount of time and at a reasonable price.

In the end, this would hopefully mitigate any substantial price decreases. Time will tell. All the questions should be answered in the coming year.

Want to buy foreclosure properties and make money doing it? To discover innovative tactics for the real estate investor and to obtain a free copy of the eBook “Everything You Have Learned About Real Estate is Wrong.” click here http://www.realtactic.com.

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

Flipping Homes - How to Find Your Next Money-Making Property

noreply@blogger.com (Stephan) — Thu, 28 Jun 2007 14:54:00 +0000

by Eric Rogers

The first thing to remember is that: you’re in this business for investment—I.E. to make money—not loose it. The quickest way to disaster is to let emotion get involved. Buying a property because “it looks exactly like the home you grew up in” or any other similar emotional reason is an easy but big mistake. When it comes to choosing a property, let your wallet choose. If you only have a modest budget to work with, don’t try to rehab a $400,000 property with foundation issues—you’ll eat through your budget too quickly. Choose your first project carefully—it should be easy enough to get your feet wet and relatively low risk. You might not make as much as a high-risk project yields but you’ll be learning as you go and in this business, knowledge and experience mean money.

The first step is getting your finances in order. This usually starts by contacting a loan officer or other mortgage professional and talking about what type of financing you have available. If you have a pool of savings to tap or can liquidate some assets to be able to pay cash for a home, that’s the best financing situation you can be in. Otherwise, talk with a mortgage professional about how much you can afford and get a letter of pre-qualification or pre-approval for that amount.

At the same time, you will need a budget for your rehab project. This should include projected expenses for selling the home once it’s rehabbed. Once you work out your budget, subtract 10% and that’s the amount you should use as your realistic budget with a 10% cushion.

The next question is how do you go about finding your first property to rehab? Well, your top resource is your local real estate expert. Being a local REALTOR, I see many properties come up every week that would make great rehab projects for first-time rehabbers. Just remember: as a buyer, you won’t have to pay your REALTOR for their assistance. When I work with buyers, my fees are paid by the sellers of the home you will eventually purchase with my help.

Once you have your budget and financing in place, contact your local real estate professional and give them the numbers—the more information you can give them about what your budget is and what types of homes you are looking for, the better they will be able to aid you. It won’t be long before your REALTOR starts sending you information about homes that meet your requirements.

You should always seek to establish trust with your REALTOR—your bottom line depends on them finding you a great project. Always be upfront and forthcoming about what you’re looking for and what you’re not. Once you find a few properties that meet your price range and budget constraints, have your REALTOR set up private showings for those homes. That’s where the real business of finding a good rehab project happens.

When preparing to go see a potential project, you should bring a few important things. These include a pen and notebook for taking notes, a measuring tape, trundle wheel or sonic tape measure, a small tool kit with basic tools and a flashlight. Remember, many of the homes you might be looking at are going to be in poor condition and likely be without power, water and gas service. Always dress for the occasion—in long pants/sleeves and work boots if you have them. A good pair of work gloves is also vital.

When you set foot on the property, you have to act like a detective. Look for hints of past and recent leaks, foundation issues, structural issues and other major defects that can kill your project. At the same time, you should be adding up the estimate costs of the rehab work that is needed. If you did your homework and have an idea of what things cost, you should be able to estimate some values. Make sure you take room measurements so you can better estimate expenses for carpet, tile and similar items.

After you’re done, it’s time to crunch the numbers. Go over your notes and start adding up estimated costs. Your goal should be to do this quickly. Often, good rehab projects sell quickly, so you may not have a day or two to think it over. Pay attention to big-ticket items that add up fast like a roof tear-off or foundation repair. These are the expenses that can quickly put a rehab project in the red.

At the end of the day, you should have an estimate of what the rehab work should cost. That will give you a good idea of what your bottom line is for purchasing the property. If the investment seems sound and you decide to go forward with the purchase, the next step is to make an offer.

Eric Rogers - Century 21 Pro-Team - Oswego Real Estate and Naperville Real Estate Expert
Article Source: The FREE Article Distribution Center

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Learn the Insider Secrets of Buying Bank Foreclosure Properties

10 Things You Need To Know About Buying Foreclosures

noreply@blogger.com (Stephan) — Sun, 17 Jun 2007 14:16:00 +0000

by John Montgomery

When it comes to buying foreclosures, every investor needs to be aware of certain aspects that can either make or break their bargain. The appeal of a foreclosed property is often found in the hidden potential that a home is thought to possess, but the fact that it can be purchased at a price that is often far less than the current market value is an equally attractive incentive to most buyers. While foreclosed properties can and often do produce a profitable return for investors, it’s important to keep the following in mind when perusing properties:

- Not every foreclosure is open to inspection. This means that you may or may not be able to view or evaluate the property, and could be required to make a decision based on nothing more than a visual and any information provided in the foreclosure listing.

- If a foreclosed property is open to inspection, it will be up to potential buyers to hire an inspector for the purpose of evaluating any necessary repairs or improvements. This will aid investors in the decision as to how much money they wish to pay for a property by giving them an indication of the work and cash needed to restore it.

- If you plan on buying foreclosures while they are still inhabited, either by the previous owners or renters, you will be responsible for removing them. In some cases, eviction may even be necessary.

- Buying foreclosures means purchasing a property ‘as is’ with no guarantee as to its condition.

- Investors who plan on buying foreclosures from HUD are permitted to enter the bidding process if no person(s) wish to bid as an owner-occupant. The initial phase of a HUD foreclosure auction is open only to those who wish to live in the home.

- Each state handles the process of buying foreclosures differently, but nearly every one offers a redemption period that would allow the former owner to regain control of the property by catching up on payments and interest. Buying foreclosures means that you need to be aware of local laws and how they may affect the ownership of a property.

- If you require financing, it’s important to check with a lender to arrange for a mortgage before placing a bid on a foreclosure. In at least one respect, buying foreclosures is similar to the purchase of other real estate in that the failure to complete the transaction may result in the loss of any earnest money provided.

- Prior to buying foreclosures, or any other type of real estate investment, do your homework. Homes built before 1978 may contain lead paint, which is why it’s important to learn as much as possible about the home’s age and condition, along with other potentially concerning aspects of real estate before signing on the dotted line.

- Successfully buying foreclosures as an investor means knowing the current market value for comparable properties in the area. If you plan to restore the home, you will need to figure in the cost of repairs and calculate a reasonable selling price in order to determine a feasible profit.

- Investors considering buying foreclosures can find local listings through realtors, lenders, the U.S. Department of Housing and Urban Development (HUD), the Department of Veterans Affairs (VA) and various other public auctions.

The information contained in this article is designed to be used for reference purposes only. It should not be used as, in place of or in conjunction with professional legal, financial and/or investment advice regarding buying foreclosures. For additional information, consult an attorney who specializes in real estate and/or financial matters.

To learn more, visit www.buyingforeclosureinfo.com, which offers helpful information on buying foreclosures.

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Stop Foreclosure Problems

noreply@blogger.com (Stephan) — Mon, 04 Jun 2007 15:22:00 +0000

Are you wondering how you are going to make ends meet and get the mortgage paid for the current month, you are not alone. There are many factors that have gotten you into this calamity and we are a company that wants to help. The cause of the craziness of the market is it seemed like there were not enough houses to buy so the prices were climbing out of control. In addition to the skyrocketing prices of homes the mortgage industry was creating plans so everyone could buy or in many cases buy many. Renters became homeowners and homeowners became house rich. If you did not refinance from 2001 to 2005 then you were the only one. People were refinancing and creating debt every year and refinancing to pay for the debt. Mortgage brokers were carrying money in wheel barrows and everyone was a real estate investor or a realtor. All sign were pointing to a way over inflated market with people making fake fortunes. Jump forward to May 2007 and it is a totally different story. Mortgage Brokerages have gone out of business and realtors are harder to find. The mortgage brokers and realtors are now in foreclosure. Everyone forgot the fundamentals our parents taught us and are we paying for it. Foreclosures are at an all time high every month the number grows. Sub Prime lender have tightened their restrictions and some have even gone bankrupt. The market is not right sizing and many homeowners are upside down in their properties. Even worse is if you purchased a house in 2006 in a new development were builders are still building your are way upside down and no chance of selling. Builders are even going as far as auctioning their houses to move them and get them off of their books. If you have been sitting on the sidelines waiting for a prime market for picking up houses you will welcome 2008 with open arms and wallet. 2008 will be the year to not only buy but steal houses for as much as 60% discounts over 2005 rates.I am now getting so many calls from wholesalers wanting to move properties and I tell them I am not in the market. 2008 will be my 2001 on steroids with purchases and inventory. Hold for 2 to 3 years and unload for a killing. Fortunately I got out of the market in 2003 and watched as people got so greedy and now look at them, foreclosure and bankrupt. All sign are leading to 2008 so start saving and get ready for the GOLD RUSH.

Foreclosure Help

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Investment Properties – Is It Best To Buy And Hold?

noreply@blogger.com (Stephan) — Thu, 31 May 2007 15:00:00 +0000

by Alex Anderson

Real estate investing can be seen as a complex issue, but that is only because there are so many choices. When you invest, you have a virtually unlimited array of ways to make money. But that entails being able to make choices. You have to decide how much you will learn about each aspect of real estate, whom to add to your team, where to seek properties, whether a particular property is a good one for you—and on and on.

One question you will find yourself faced with is what to do with a property once you have purchased it. You may not be the type of investor who wants to buy a property and hold on to it for a long time. You may not want to deal with property managers and tenants or to see to the upkeep of a piece of real estate. If these things don't appeal to you in the slightest, your other option is flipping.

Flipping a property is simply the practice of selling it as soon as you buy it, often at the same closing. At the very latest, flippers tend to begin the selling process the day of the sale. Some even begin before they own the property, which is very risky business. However one goes about doing it, flipping always entails a mad rush to the auction block because an empty property is always a liability.

However, when you hold a property, you have the opportunity to raise that property's value. If you get a really good deal, the amount you have paid for it will probably be a drop in the bucket compared to what you stand to make from it. And when you do decide to sell it, you will be able to do so at your leisure and get more than you would have by flipping.

This holds true especially if you property is a multi-family dwelling such as an apartment high rise. If it is a good property in a good location, and you take care of it, chances are that occupancy is going to stay up. With a property like that, your earnings tend to increase exponentially. With good management, that is almost guaranteed.

Speaking of management, you will need to decide whether you will do that yourself or hire a management company to do that for you. If you own a particularly large piece, or if you own many pieces, you will have to hire a manager. Ken McElroy, author of “The ABCs of Real Estate Investing,” strongly suggests that you hire a real estate management company so that your talents and your time will be put to better use elsewhere.

Those are the sorts of things you will have to consider if you hold a property.

Ultimately, however, whether you flip a property or hold it depends on what you would rather spend your time doing. Perhaps you thrive on the fast-pace workday that flipping entails. Maybe the adrenaline rush feels like an adventure to you. In that case, you should learn the proper way to flip properties (i.e., wait until you actually own a property to sell it and don't approach buyers at the very closing where you acquired a property).

However, if the idea of nurturing a property appeals to you, then buying and holding is the way to go. Depending on your talents, you personally may be able to make more money working one way as opposed to another. It's totally up to you.

Alex Anderson Has Sites For Minneapolis Real Estate Agents, St. Cloud Investment Property and Investment Properties.

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What You Need to Know about Deeds for the Transfer of Real Estate

noreply@blogger.com (Stephan) — Sun, 27 May 2007 15:42:00 +0000

by Bob Miles

The transfer of real estate involves particular dangers that are far more pronounced that the dangers involved in buying, say, a car or a hair dryer – and not just because real estate is more expensive either! One of the primary dangers is that the person who’s selling you the real estate doesn’t actually own it. This is more complex than you might think. Imagine shelling out a couple of hundred dollars for a prime parcel of beachside real estate only to have Paul Plaintiff sue you five years later claiming that Joe Grantor sold that property in 1895 to his great-great grandfather first as a passive investment, and then Mr. Grantor turned around and sold the same property in 1896 to the guy that sold it to the guy who sold it to the guy who sold it you. In that case a court might just award the property to Paul Plaintiff and you’d be sleeping on the beach digging for buried change with your metal detector. Of course you could always go after the guy who sold it to you in the first place, demanding a load of money from him. But this would do you no good if (1) he sold it to you under a quitclaim deed, (2) you couldn’t find him, or (3) if he didn’t have the money to pay you. In order to guard against this sort of thing, several safeguards have been developed and if you’re considering purchasing real estate you need to know how they work.

1. Title Insurance this is by far the most commonly used. A title insurance company will have their lawyer check the chain of title at the local land office to see if they believe there’s a possibility that there might be someone out there with a claim to the property that’s superior to yours (you can never be absolutely sure). If they’re satisfied, they’ll insure the title to your property.

2. Warranty Deeds - Warranty deeds will contain up to 6 warranties against title defects, and you can use them to sue.

3. Statutory Deeds – some states allow these types of deeds, and although they provide some protection, they are not as effective as warranty deeds.

Don’t buy real estate under a quitclaim deed without (i) carefully checking the chain of title, and (ii) demanding and receiving a deep discount on price to reflect the risk that your yard may be pulled out from under you some day.

DISCLAIMER: The following is intended for reference only and not as legal advice.

Real Estate Law in Plain English explains real estate law without the legalese.

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My Rules When Dealing With Private Lenders That Fund My Real Estate Deals

noreply@blogger.com (Stephan) — Sun, 20 May 2007 15:32:00 +0000

by Alan Cowgill

This is my business. After many years in a corporate job working for others, I left because I wanted to run my own business my way and that's exactly what I am doing. I am using my business skills to create the kind of company I want. Along with creating my own rules, procedures, and systems within my real estate business, I have rules that I follow regarding my private lenders. A couple of my rules are:

a) Make interest payment when property sells
b) One private lender per mortgage
c) I keep my word

Let me further explain what I mean on each of these...

a) Make interest payment when property sells...
I didn't start out that way. I thought everyone would expect monthly or quarterly payments, so I started paying some early lenders monthly. But after a conversation with a RE guru, I quickly changed and now pay when the property sells. What a huge benefit to cash flow and what a BIG help with the office paperwork. Not only is this a matter of less paperwork for the staff, there is another practical reason for doing this. When a lender's money is applied to a property at closing, the clock starts ticking. The interest rate starts. However, it may take a couple months to renovate the house and find a buyer or rent-to-own tenant. So the cash flow from the property will not even start for a couple months.

In addition, when you sell the house the lender gets a bigger chunk of money to lend back to you for your next project. Everybody wins.

b) One private lender per mortgage...
The #1 question I get from all over the country is "can I pool lenders money". The answer is maybe.

You cannot "pool" lender's money unless you fill out some paperwork with your state.

So, if you need more funds to purchase and rehab a property, then the 1st lender (the one with the most money) gets a 1st mortgage on the property and if you need more money to rehab the property, bring in a 2nd lender and they get a 2nd mortgage.

They are your "Bank" and they get a mortgage (lien) on your property.

You take possession of the property in a land trust and you get the deed. The lender gets a mortgage. These are the two key documents on any real estate transaction.

Actually, you can have as many mortgages (1, 2, 3, 4, etc.) as you like on a property as long as you don't over leverage the property.

c) I keep my word...
I follow my agreement with each lender exactly. I run my business with integrity. Like I said earlier, my rule now is that I make interest payments when the property sells. But there are a few early lenders with whom I made the agreement to pay monthly. I will stick to my agreement with them regardless of how long they invest with me. And, since they love those checks, they'll probably be around a long time -- and that's great as far as I'm concerned.

Alan Cowgill is a national speaker, author, and real estate entrepreneur. Alan had bought or sold over 200 investment properties. His step-by-step system "Private Lending Made Easy" teaches Real Estate investors and mortgage brokers how to find private lenders. Contact Alan at 937-390-0816 or 866-831-3540. For a FREE audio CD go to http://www.PrivateLendingMadeEasy.com
Article Source: The FREE Article Distribution Center

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Foreclosure and Home Devaluation

noreply@blogger.com (Stephan) — Thu, 17 May 2007 14:39:00 +0000

by James Copper

While just about everywhere in the United States the real estate market has come back robust and healthy and most people can count on their house selling after a short period on the market, there are some states whose residents are facing foreclosure in record numbers.

Ohio, Georgia, Texas and Florida are reeling from recent economic havoc created by their areas industrial demise and the subsequent concentration on the service industry with its less plentiful and poorer-paying jobs. Benefits for these service industry jobs are not nearly as good as those in the prior industrial industry, and in some cases they dont exist at all.

The mid-Atlantic states have been suffering from this loss of manufacturing jobs and firms for decades now and foreclosure and devaluation of homes has become commonplace.

Foreclosure might have been staved off in many of these situations, however, had the homeowners not been the victims of some less than reputable lending plans and firms, with ill advised financing options such as interest only loans that left these borrowers with little home equity when they needed to refinance or secure a second loan to save their home from foreclosure.

The interest only loans left them with little or no equity which meant no collateral for the loan. Their homes fell into foreclosure as a result.

An interest only mortgage loan is one in which the monthly payment is exactly the amount of the interest accrued so far on the loan and doesnt touch the principal.

This interest only feature only lasts for about the first five to ten years of that loan, and while borrowers have the right to overpay at any point their overpayment only goes to future interest payments - again, not the principal.

What this means is that for the years of the interest only option the borrower isnt paying off her or his loan. A 100,000 mortgage in 2000, with an interest only option for 10 years, will still have a balance of 100,000 in the year 2010.

Were the borrower to run into difficult making these payments and find the threat of foreclosure hanging over their head, they could be in serious risk of foreclosure. Lets assume, for example, that the houses market value in 2010 was 120,000.

Since literally none of the borrowed 100,000 had been paid off the equity in the home would be at a mere 20,000. If, however, the mortgage payment made each month to the borrower included 200 towards the principal at the end of that 10 year period the borrower would have another 24,000.

Actually the equity would be much greater because as the principal was paid down the interest on the balance would decrease and the same payment would pay more of the principal and less of the interest. This additional equity might save a home from foreclosure if the borrower were to get sick, lose a spouse, lose a job or otherwise get into financial trouble that made payments late or missed.

The general rule of thumb is that interest only loans should not be considered unless you know for a fact that your earning power five to ten months down the road will greatly increase and your outstanding bills will decrease.

Then the risk of paying a little bit now and a lot later isnt as great. You wont be risking foreclosure.

James Copper is a repossession consultant for http://www.repossession-stopper.co.uk/home_repossessions.php
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How to Buy Foreclosures at Real Estate Auctions

noreply@blogger.com (Stephan) — Mon, 14 May 2007 19:07:00 +0000

by John Ferreira

Attending The Auction -

A foreclosed property can be purchased at several different stages and sometimes they get auctioned off at an actual auction. There are several reasons why it would end up being sold this way:

1. The debt on the property is so high that if purchased before the auction there wouldn't be any profit potential.
2. The seller wouldn't sell before the auction
3. The seller can't be found
4. You have more cash on hand than time.

Anyone wanting to buy foreclosed properties at an auction should attend a few to get familiar with the way they work. They do present some great opportunities but some trappings as well. Some things you can expect are:

They are over very quick. You can be a few minutes late and miss it. Like any other auction there can be more spectators than qualified bidders so you can have the auctioneer verify everyone's qualifications by showing the required certified check before the auction starts. This way you know that the person you're bidding against is actually qualified to raise a bid and cause you to lose real money.

Any serious bidder must do thorough research on the financial situation of the property. You could bid up to $375,000 on a property valued at $500,000 and think you got a great deal then find out there was a $150,000 1st mortgage still in place. Knowing about this 1st mortgage you could verify your bid to be "above the 1st" and not "subject to the 1st" and so your bid would be from a base price over the 1st mortgage.

If you are the high bidder on a 2nd mortgage you can take over a 1st FHA or VA assumable loan. If the bank is the highest bidder on a 2nd they can substitute you and lend you the FHA money. The bank is usually the high bidder especially in states where auctions require all cash deals. Sometimes a private investor is the high bidder and sometimes the auction can be postponed all together.

Some things you need to know:

Depending on the state you are in, cash needed the day of the auction is 10% to 100%.

If you bid and win, then change your mind after putting down the deposit you can forfeit your deposit and be held liable if you change your mind.

Verify the bank's bidding instructions to the auctioneer because a lender may bid substantially less than the debt they are owed. The rules and laws vary from state to state but you can get much of the information on your local foreclosure procedures and bidding instructions from the sheriff's office or the court office clerk. Foreclosure properties can be a great way to make some very high profits in real estate in a short time but you must take the time to learn how to play the game and due the required research or else it can be a great way to lose money too!

Get tips and information on how to build your wealth the way most millionaires have; through real estate investment techniques such as foreclosure real estate and flipping at www.Real-Estate-Wealth-Builder.info

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