How To Avoid A Forced House Sale

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

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

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
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Learn the Insider Secrets of Buying Bank Foreclosure Properties