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Archive for the ‘foreclosures’ Category

Somehow online I downloaded a free ebook on real estate. I didn’t look at it but I must have gave my phone number because someone left a message saying he can get me started with real estate foreclosures making an average of $15,000 on each home. I don’t have any money to invest.Should I look into this opportunity even though I have no money or must I have money for real estate?

Not any more. You could before it all came crashing down. Now too many laws to prevent it.

I’ve been trying to put this together for a little while from my own experience, from others I’ve talked to, and from the One-on-One students I’ve worked with.. They’re in no particular order; I just put them down as I came across them. Remember, these are my own opinion, so take them as such.

1) Not knowing your market, and how to market to it.
How you effectively market to your area depends on the type of market you’re in, including how seasonal your market is. For instance, in working with students from fast-selling markets like California, we’ve found that bandit signs are effective. In slower markets like Denver, direct mail works very well also.

Additionally, think about your season. In colder climates, direct mail works well in the wintertime when houses sell slowly, and bandit signs are more effective in the summer months. However, in Arizona, summer is the slow time, and in the winter houses sell faster.

2) Not knowing if your marketing is effective, i.e. not tracking your marketing.
This is critical, and plays closely into number 1 above. If you have no idea how well or how badly a marketing campaign is working, how do you know where to spend most of your money? No matter how you do it, track your marketing. Keep weekly statistics, and keep them over time.

3) Not writing out your marketing plan
Many students I talk to have a shotgun approach to marketing. They mail out 100 postcards to out of town owners this week, a couple hundred letters to foreclosures next week, and then put up a few bandit signs. Then they get busy, and forget about the marketing they’d planned.

If you fail to plan, you plan to fail. Okay, old tired cliche, but it really does hold true. Write down your marketing plan, post it somewhere you can see it, and look at it daily so you know what you’re supposed to do that day.

4) Allowing a tenant/buyer to move in without an option deposit.
Oh man, I’ve NEVER done this, and had the tenant immediately stop paying rent, while renting out one of the rooms to a friend while collecting money from them which they never paid to me, and I had to evict them, and had a house vacant for two months and lost lots of money! @#($&Y%

Okay, this was one of my bigger blunders, and I definitely learned my lesson. Always, always, always get an option deposit on a lease/option, or a security deposit on a rental. Then if the tenant defaults at least you have something to cover the vacancy.

5) Being “nice” to tenant/buyers.
The reason I let the person above move in without an option deposit was she was a single mom, who had been through the mill, abusive marriage, just getting back on her feet, “I promise your kindness won’t go unrewarded Mr. Landlord”, etc. I bought the sob story, and paid for it.

Sometimes I work with tenants if they have a good track record, but only for a short while. In this business, we have to sometimes be more harsh than we want, but if you bend too much, it’ll only make your life more difficult.

Itinerant tenants will suck all your money and time.

6) Being scared.
This one’s pretty understandable. This is new territory for most people. I’ve talked to people who were high powered folks in their field, and are nervous talking to sellers or meeting with sellers for the first time.

There’s one way, and only one way, to overcome this. Just get out there and do it.

7) Not signing up deals because you’re not sure how you’re going to fill them, or they don’t fit your strategy.
I talk to many students that because they don’t know what to do with a property, or how to sign it up, just pass it by. My advice is just sign it up. If you do it wrong, there are lots of outs in the agreements, and you can always renegotiate with the sellers. If it doesn’t fit your perfect strategy, flip it to someone who wants it.

Being inconsistent.
Marketing hard one week, then doing nothing for two or three weeks is one example. Making one tenant pay on the 1st, and another on the 6th is another (and a possible legal liability).

Real Estate investing is a very new thing for most people, and working for yourself is also pretty new. So it’s pretty difficult to have a routine to follow. My advice is systematize your business as soon as possible so that you can hand over the mundane chores to someone else, and you can concentrate on what’s important. Watch what you do each week, and try to consistently do those things which make you money.

9) Procrastinating.
Many students spend lots and lots of time analyzing their market, setting up their office just so, writing articles about mistakes they’ve made, etc. Another word for procrastination is – FEAR. Like I said earlier, the only way around fear is to just get out there and do it.

10) Not setting aside reserves for unexpected expenses
I coach students to set aside enough cash to pay for two month’s rent on every property. However, after you’ve saved about 5 properties worth, you’re probably okay. But you have to be the judge of how much you want to have in reserve. Either way, you need to have something in the bank because unexpected expenses definitely do happen – and if they don’t, you’ve saved for that trip to Thailand!

11) Not setting up third party notification for water & HOA bills
Boy, have I learned my lesson here. The problem with water & HOA is the governing body can slap a lien on your house if the tenant isn’t paying the bill. I used to let tenants pay their own HOA bills, and I didn’t have any kind of notification set up that let me know when there were problems. Suddenly, I’d get notification from the HOA’s lawyers that there was a lien on the house. Same thing with the water bill.

I now pay the HOA bills myself, and the tenants reimburse me. I still get the same rent, but add the HOA on top of it. My thought is, they’re the owners (or future owners) of the house, they get all the benefits of the HOA, so that should be separate from the rent, and paid by them. Also remember if you don’t use my rental agreement that you make sure the HOA fees can be added to the rent, and they can be evicted for non-payment. If you’re using my forms, it’s already in there.

Same thing with water, but I have the tenants pay. The nice thing about water is, if it doesn’t get paid, it gets shut off. So the tenants generally have incentive to pay. But I still want to know if the bill isn’t being paid. If a tenant gets behind on this bill, make sure you keep checking with the water company, and make them pay it. Set up third-party notification for the water bill, and monitor it.

This certainly isn’t all the mistakes I’ve heard or made, but it’s a good start. One last one – Here’s the biggest mistake of ANY I’ve ever heard:

Not pursuing your dreams! Whether it’s through real estate, or MLM, Day Trading stocks, or that franchise, don’t let fear stop you. Do whatever you have to live life in the juiciest, best way you possibly can. Financial freedom is one of the first steps to the life you really want to live.

Scott Taylor
http://www.articlesbase.com/non-fiction-articles/mistakes-investors-make-55561.html

Tell me, do realtors make a smaller commission on foreclosures? I have excellent credit, a downpayment, and I have never owned a home before. Also, I am pre-approved. Why does he keep trying to sway me away from short sales and foreclosures? Obviously, there is something that is not in his best interest to sell me either of the two?
I know absolutely nothing about this business.
Please advise.

They’re just hard to deal with. If you really want a realtor that will have no problem showing you shortsales and foreclosures, do yourself a favor and look for one with a "SFR DESIGNATION." If you find a realtor with that designation they will be much more inclined to deal with shortsales/foreclosures. They are specialized in them. Depending on what state you are in, they may have different names. I am a realtor in Southern California and that’s what the designation is called here. You can look up more information at NAR.org i believe. I wish you the best of luck!

Friend of mine is losing her house and her mortgage lender Provident seems to be one of the strictest as far as getting what they want during foreclosures.

Has anyone out there dealth with Provident and received a 1099 after the house goes up for auction or has been pursued like crazy during the foreclosure. They seem to be much more agressive than other lenders out there right now.

Well, you friend does have a whole bunch of money that belongs to that bank. They obviously are letting your friend keep it, that is what the 1099 is for, so your friend can pay income tax on the money she actually got away with stealing. They are do that, that can’t legally allow her to keep the money tax free.

The Federal Housing Administration (FHA) offers mortgage assistance throughout the United States by insuring mortgages that are provided by lenders. FHA loans are not loans from the government, rather they are insurance for the loans that you receive from a lender, such as a bank.

FHA loans have allowed Americans to borrow money for home buying that they may not otherwise be able to afford. The FHA loan program started in 1934 during the Great Depression when foreclosures were at an all time high and many people were defaulting on their mortgages. FHA loans were put in place to provide lenders with insurance for home owners. At the time, some of the FHA loan programs were subsidized by the US government, however the long-term goal was to make the program self supporting based on the premiums paid by the borrowers.

Later on in the years, private mortgage insurance companies came to fruition making the FHA a primary service for people who can’t afford a standard down payment or who do not qualify for private mortgage insurance.

In 2007, many borrowers were hurt by the subprime mortgage financial crisis, and on August 31 of that year, the FHA added FHA-Secure, a new refinancing program.

For many Americans, the reasons for using FHA loans include:
Purchasing a home, including first time buyers
Repairing or renovating a home they currently own
Making a home more energy efficient.

Lenders can offer potential home buyers better deals when their mortgage is insured through the FHA loan program. With FHA loans you will find:
Lower down payment requirements
Lower closing costs
Easier qualification for mortgages based on credit.

The FHA can help you to purchase your first home as well by offering down payments as low as three per cent of the price of the home. Another benefit of FHA loans is that the majority of the closing costs associated with buying a home can be included in the loan ? this means less money out of pocket for you when closing the deal on your new home.

If you’re looking to purchase an older home that needs some renovations, you can purchase the house, fix it and include the reparation costs all in one loan. Likewise, if you own a home that requires renovations, your FHA loan can refinance your current mortgage and include more funds for the costs of repairs all in one loan.

The FHA also offers an energy efficiency loan to make your home more efficient in the usage of energy. You can even use an FHA loan to purchase mobile or manufactured homes, even those that are, or will be, located in a mobile home park.

For seniors over the age of 62 who live in their own home, own it outright or have a low balance on their loan, the FHA offers a reverse mortgage to allow seniors to convert some of the equity built into the home into much needed cash.

FHA loans help Americans own the homes of their dreams in an affordable way ? you can own your own home in Arizona today with an FHA secured loan.

Gen Wright
http://www.articlesbase.com/credit-articles/what-is-an-fha-loan-and-how-can-arizona-residents-benefit-711648.html

A homeowner holding this hand looks around the room to see if there are any players to help. Personal self-defense is based on fight or flight. The decision then is to stay and fight or choose flight and run away and take off to a safer place. When a borrower is faced with this situation there are three options for additional cash flow. Make more money, reduce expenses or do both. Once a decision is made to keep the home then the strategy must be developed to make that happen. If flight is the choice, decisions must be made to make that happen while perhaps downsizing and reducing the monthly housing expense. One of the best options, IF there is any equity at all, is to refinance to a lower fixed rate, which is now available. This is one of the great positives of the current market, low interest rates can save the day and give borrowers a chance to get into a stable payment situation. If a borrower can’t do that then other alternatives must be considered.

Although there is major hand wringing going on with these high risk hybrid subprime (higher credit risks) mortgages there is also an opportunity for many to finance to a lower fixed rate loan. There will be heavy refinances going on with those who can qualify and move into the lower fixed rate loans. This will be an answer for many. If the credit must be tweaked and improved to make that possibility a reality, then so be it. Pay off credit cards, settle collections, pay off judgements, put time and distance from any past bankruptcy actions while improving the debt to income ratios all as a means to better qualify for a low rate fixed rate loan. If a borrower is behind on their payments a lender may offer a “forbearance” option where the payment arrears are set up on a parallel pay back schedule while the normal payment is being made. This is a catch up mechanism. All of these options invoke the stay and fight decision, which comes to the front by selecting these choices. This selection must make sense and there must be a reasonable chance of making it happen. Employment needs to be solid and dependable income steams must be in place. If a part-time job is necessary, it must be done. As far as reducing expenses, trading down cars with large car payments to free and clear transportation may be necessary in the reducing expense mode. Gym memberships may need to be cancelled and settled, any ongoing sundry expenses can be eliminated until the mortgage crisis situation has passed and settled down in a year or two. Cable extras may need to be pared back. Dial up service versus a more expensive high-speed service may need to be likewise pared back. Cell phones may need to be converted to pay as you go throwaways to further cut expenses or eliminate them entirely. Eating out will be a thing of the past for the short term. Packing lunches may be an option. These are all tough options. If after all of this takes place and there is still a desire to stay and a borrower is still under the gun, a Chapter 13 Repayment Plan may need to be selected. This will not cut any mustard with the mortgage lender or other secured debt, but the non-secured debt such as credit cards can be lumped into the BK option. A Chapter 7 Bankruptcy may be selected if the borrower(s) do not make too much money per the new Bankruptcy Law restrictions. This would wipe out all the non-secured debt. It may take a few years to reestablish credit to the point where a new lower rate fixed rate mortgage can be put in place. Over time, values MAY appreciate a bit to assist in qualifying for a loan. If a borrower is not up to any of this, then the flight option can be selected.

The flight option basically comes down to selling the property and taking whatever equity is available and possibly renting or finding a lower priced opportunity in a market populated with the same disparate sellers all begging for offers. When a homeowner gets beat up on the price in selling there is a real possibility in making up the loss on the purchase of a depressed value property. When borrowers select to buy a lower price property then the family budget may be positioned to make a comeback with saving opportunities to stabilize the asset side of their financial statement.

When the stock market is in the full “Bull Market Mode” and keeps running up unabated until finally the “Bear Market” shows up then major corrections are experienced. When the chickens come home to roost and stocks with weak fundamentals, high price earning ratios, low or no dividends, and perhaps bad sales and profit news the stocks fall big time. Some stocks will get pounded more than others. Perhaps it was just a weak quarter or extenuating circumstances with big one time write downs, or it might be a big problem like a Chapter 11 Bankruptcy filing like many of the airlines and other companies are dealing with. When this happens in mass, the Dow Jones Average together with other stocks fall as a group due to fundamentals and consumer perception and confidence. Now, the spill over from the defaults in the Subprime, Fannie Mae and Freddie Mac are impacting the financial markets as well. Investors are nervous. It will be a period of adjustment until this “problem” is handled one way or the other. Much like the RTC fiasco of the Savings and Loans debacle, serious and painful resolutions will be required until these troubled properties get folded back into the housing stock through new family ownership. Supply and demand principles are in full effect.

Much is the same with housing. Stable and steady increases in some communities in the 3% to 5% appreciation ranges have had minor effect in the market depreciation fall with all other things being equal. In other areas where appreciation was hitting 12%-20% per year where investors were flipping left and right and making major hits it was the “new wild west gold rush” of money making opportunities. Many property flippers (buy, fix up and sell) were making $50,000 to $100,000 per deal. Buyers were camping out at builder’s offices to get in on the property gold rush. Builder concessions were non-existent. Builders did not have to offer anything to get buyers through the front door, so they didn’t. Then “It” hit the fan. Reverses occurred. New homes sat vacant. New and resale inventories swelled. Builders were gone with many seeking Bankruptcy protections. Existing homeowners selling their homes remained mired with no sales activity. Sales prices were adjusted down where homeowners absolutely had to sell and move. If owners found themselves in a situation of being upside down (owed more than the home was valued) only a few options were available. (1) Walks away and move out and let foreclosure take its course. (2) Stays in the house until the foreclosure happened and let the sheriff put them out on the curb. (3) Consider “deed in lieu of foreclosure” where the lender takes the property back and avoids a foreclosure action and moves out and moves on. (4) Consider structuring a lease-option with a buyer at favorable terms with hopes of appreciation that will kick in over a two or three year period. (5) Offer sales concessions to buyers paying all their closing costs and prepaid escrow and even hold a second mortgage for any shortfall behind a new first mortgage. (6) Propose to the lender to consider a “short sale” where the mortgage amount is reduced to accommodate a new buyer that puts a new mortgage in place. This particular option does not put one penny in the seller’s pocket, but the property is sold and the buyer can move on. The lender takes the hit, BUT it may be less of a hit for the lender then going to the full foreclosure option. This is by no means an exhaustive list of options but is a few of the more prominent ones.

On the positive side, this is a great time to buy with great interest rates in play. Values are down and good buys can be found. Sellers are motivated and flexible terms can be negotiated. Lenders holding loans on “upside” down properties are willing to make deals to mitigate the loans hanging on the books on a non-performing basis. Much like in the Dot.com era, many investors chasing the “good story” stocks lost big time. Likewise, buyers chasing the “good story” properties with multiple offers on listings and builder inventories will lose as values in many areas have fallen. A real estate value correction is underway. Warren Buffet has made billions seeking out values and taking long term positions. A little of this philosophy will go along way in profiting from future real estate cycles. No one is good enough to determine the absolute bottom or top of the market, but good values will always pay dividends with proper due diligence of the underlying elements. A deal is a deal is a deal. When a deal is found people of action can find rewards and long term returns. There is no reward for overpaying for real estate in the near term. This is a time of incredible opportunities to make sense out of the madness and profit during this period of market correction in this real estate arena.

Dale Rogers

http://www.brokencredit.com

Dale Rogers
http://www.articlesbase.com/mortgage-articles/foreclosures-are-explodingvalues-are-downhomeowners-are-stressedrates-still-low-119472.html

Obviously, when people are forced into bankruptcy because of health care bills they could never afford to pay, one effect of that is that they lose their homes to foreclosure. If America had passed health care reform say ten years ago, what percentage of current foreclosures could have been avoided? 5%? 10%? 20%?

Many. 62% of all bankruptcies in the US were caused by the costs of healthcare.

RE/MAX CEO Margaret Kelly explains how homeowners can avoid foreclosure with the newly announced government short sale plan.

Duration : 0:2:9

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Technorati Tags: credit, estate, Foreclosure, government, guideline, homeowner, real, REMAX, Sales, Short, Treasury

A look at the Crosby Mint Farm in St. Johns, MI, and how the foreclosure crisis is hurting them. Senate Bill 1306 would establish a moratorium on foreclosures and save this farm. The sponsor of this legislation is Senator Hansen Clarke.

Duration : 0:3:29

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Technorati Tags: 1306, bill, Clarke, Crosby, Farm, Hansen, Mint, Senate

In this video, acclaimed real estate speaker and trainer Terry Bontemps will teach you how to make a fortune amid one of the countrys worst real estate meltdowns. CLICK_HERE: http://reiwired.com/video/earn-profits-amid-the-mortgage-meltdownterry-bonte/ Watch and learn as Terry Bontemps shares with you pointers on surviving in todays housing market by taking advantage of foreclosures. CLICK_HERE: http://reiwired.com Discover how you can build relationship with banks so you can stop looking for deals on your own. And if you find it difficult to approach homeowners suffering from foreclosure, watch this video now and learn how you can win them over into calling you instead of the other way around.

Duration : 0:0:37

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Technorati Tags: Buying Notes, Defaulted Notes, foreclosures, homeowners, Housing Bubble, lenders, loans, mortgages, Nonperforming Loans, Nonperforming Paper, real estate investing, short sales, Terry Bontemps