Real Estate Investing Facts

Foreclosure is the process in which once a property owner has failed to make payments as agreed and has been provided with a notice of default from the lender, the property is sold by public sale. Foreclosed properties can be good investment opportunities for you to purchase a home at much less than its market value. But before buying foreclosed homes, be sure that you know and understand that it can be complicated and far more risky than buying a property that does not have that financial baggage. For this reason make sure you perform your due diligence while researching the property. If at all possible and the seller is willing, have the home inspected by a professional.

Many home owners that go into foreclosure have been struggling financially for about a year before they give up the property, which means that the house may not have received any repairs or maintenance required.

However, not all foreclosed houses are previously owned properties, as some foreclosed homes are new. Sometimes, the builders themselves were overextended as they built spec homes and then experienced financial hardships. Foreclosures can happen to all sizes, shapes, and styles of homes; from simple homes to exquisite estates .

Buying foreclosures can be complex, so to reduce the risk, consider bank-owned properties since the appraisal has already been done. It is the safest deal for first time foreclosure buyers and there are no taxes or liens to be concerned with.

If you are attend a foreclosure auction and are prepared to bid on a home, do not bid too high because it can lower your profit potential when reselling the property, if you are planning to flip it.

You can find a professional real estate agent that has experience in purchasing foreclosures or one of the many online coaches that are available.

Let your agent check the neighbor homes to find out if the price for a foreclosed property is really a good deal.

When a government agency is involved, get ready for loads of paperwork when buying a foreclosure.

Foreclosure Investing

Rein Canada

Double your income doing what you love Double your income.

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To make money as a real estate investor, you really only need 2
things:

1. A motivated seller

2. Know how to do no-money-down deals

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Last time we covered how to find a motivated seller. Today, you will discover how to buy real estate for no money down. If you are like me when I started, then you probably don’t have tens of thousands of dollars in the bank and you probably don’t have the best credit score either.

If you do, that’s great!

But if you don’t, then doing “No Money Down” deals is exactly what you need to do to start earning some big, fat checks in real estate.

So how exactly do you do that?

To make big profits in real estate even if you have no money for down payment and no-credit to qualify for any loans or mortgages?

Well, have you heard about a double closing?

Here’s what it is…

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Double Closing- A closing is a process where title is delivered by deed from the seller to the buyer.

In a double closing you buy and sell back-to-back; you do not need any of your own money to purchase the property from the owner before reselling the property to your end buyer.

Here’s how a double close works:

1. You sign a written purchase contract on a property with a
motivated seller such as a pre-foreclosure.

2. You sign another written purchase contract with your end-buyer where your end-buyer agrees to buy the property from you at a higher price.

3. The only party that comes to the table with money is your end-buyer. If your end-buyer is getting a mortgage from the bank, the bank will send the money directly to a closing agent (a middle-man, could be a lawyer or notary etc).

4. The seller signs his house title over to you, but gives it to the closing agent.

5. You sign the title of the house (which you don’t own yet) over to the end-buyer.

6. The closing agent delivers the money to the seller for the
purchase price and you get the difference. (Here’s your fat juicy profit cheque)

7. The closing agent will then register the title in the end-
buyer’s name at the land title office. (by passing you completely)

That’s it!

And this is just ONE way of doing it, I know about 40 more strategies that can be used in various different situations!

What’s interesting is that even experienced investors who are worth millions do No-Money-Down deals.

It just makes sense!

So why not do what the rich are already doing?

If you do, wouldn’t you get the same financial results as they?

From my personal experience… you definitely will!

But wait, just because you understand how to do that, doesn’t mean you can make as much profits as you set yourself to make.

You need a DEAL to make money.

As Donald Trump says, “The money is in the deal!”

If you’re thinking of spending thousands or even tens of thousands of dollars in real estate courses, then stop right now!

I did that myself, and when I finished those courses, sure…
I had more knowledge, but I still had no DEALS to make money with.

It was not until I had a DEAL that I started making money… a LOT of money.

With my pre-foreclosure listings, you don’t have to waste your time sailing the ocean (or surfing the net) to look for real estate deals. You are getting the hottest deals where you live handed to you on a SILVER PLATTER!!

It’s only a matter of time that you get your first…second… and third bank-breaking deal!

And what’s more… Foreclosure Insiders Club members get access to my educational resources. including 8 ebooks.

The first one is “No Money Down”, a perfect place for you to start educating yourself!

Don’t be like one of my members:

“I just found out (too late) that a house down the street from mine worth 680K and it was let go for 250K… ARGG!!!! Again
this was an inside deal with no realtors and they were in
pre-foreclosure…”

Take action, your success is in your control!

To Your Success!

Aiden Win

Mr. Foreclosure

Canada’s Largest Database

P.S. There are deals right under your nose!
Join Foreclosure
Insiders Club and become a member of a small circle of insider investors who are making a killing on pre-foreclosures that the public doesn’t even know exist!

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Investor Short Sales Finally Happening by Alexis McGee

Let’s define what Short Sales are to start – this is when a homeowner wants to sell their home but their total loans and liens exceed the value of the home.

You know my opinion of short sales: My time is better spent building relationships on the REO side so I can get many deals from a few sources, and work a lot less. However, short sales are becoming more and more prominent and investors can no longer ignore them.

Part of the problem in working short sales is you now have many people to negotiate your deal with. First, you must negotiate with owner in default to buy the home, with the owners getting no proceeds, just to stop the foreclosure, allowing the owner to get a fresh start. Next, you and the seller must get approval from the lender to take less than owed on the mortgage (and in most cases multiple mortgage lenders). A short sale requires a lot of paperwork and a lot of time! In the past it took 90 plus days just for a response.

Investors and Realtors who target short sales may have just gotten some help from an unlikely source – the Obama administration. The Treasury Department is rolling out a new program designed to encourage more short sales of distressed borrowers’ homes as an add on to its earlier “Making Home Affordable” loan modification efforts.

(Be sure to join me for Foreclosure Training a 3-Day Hands on Lab with a Foreclosure Veteran Investor. Here’s your opportunity to learn everything you need to know about foreclosure investing from Alexis and her team of industry experts. Become a top-producing foreclosure investor without using any of your own cash or credit! Read More)

In cases where borrowers can’t qualify for a loan mod – maybe because they’re unemployed or have excessive debt loads, the Treasury is now pushing for “streamlined” short sales to avoid foreclosures.

Short sales — that’s where lenders accept less than what’s owed from the proceeds of a negotiated home sale — can provide excellent opportunities to pick up properties at bargain prices.

Though short sale prices are often higher than what would be available at foreclosure sales or foreclosed (REO) homes, typically short sale houses come in much better condition. That’s because the defaulting owners have continued to live in the property and maintain it.

The idea may sound straightforward, in practice it is not. First, the bank needs to be convinced that a short sale will yield it more money at the bottom line than a foreclosure. That is not an easy task.

Plus, you’ll need to have a buyer for the house – one who’ll pay a price acceptable to the bank, and has financing to close the deal. If you happen to have a second mortgage or home equity credit line on the property, you’ll also need to negotiate how much that lender will receive from the sale proceeds.

This is all very tricky. In depressed real estate markets, the second-lien lender may be holding a note that’s worthless in a foreclosure because plummeting property values have wiped out the collateral. Yet that same bank is in a pivotal position: It has the legal power to block the short sale by refusing to sign on.

Equally troublesome in short sales is the fact that banks, mortgage servicers and bond investors often have conflicting requirements for documentation and financial yields.

Enter the Obama administration’s new streamlining plan, “Home Affordable Foreclosure Alternatives Program” (HAFA). Besides requiring lenders and servicers to use uniform documentation, pre-approved short sale terms and accelerated turnaround times, the plan also provides financial incentives for key players:

* Homeowners who successfully complete a short sale under the program receive $1,500 to defray relocation costs.
* Mortgage servicers can receive $1,000 per case.
* Investors get $1,000.
* Second-lien holders receive up to $3,000 from the sale proceeds.
* Real estate agents – the rules prohibit banks from forcing them to cut their commissions from the listing agreement as part of the final deal.

Most major lenders are still studying the fine print of the Obama program. But early reactions from big banks appear to be positive.

However, there could be one major issue…

The Obama plan tilts to consumers by requiring second-lien holders to drop all financial claims against short-selling borrowers beyond the $3,000 they take out of the deal. However, they currently obtain short-sale compensation from sellers as the price of their participation – in cash or through promissory notes – far beyond $3,000. So we’ll see how this pans out.

There is lots of work and precise timing to make your profit. If you want an easier, smarter way to find great deals, you need to focus on “getting on the inside” with REO agents and asset managers, so you can help them unload their non-performing assets and get a great deal for yourself at the same time.

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How to stop Foreclosure assistance is available along with foreclosure training, if you are having difficulty in paying your property taxes do to financial problems. The government will likely place a tax lien on your property if you cannot resolve the problem. The next step that might happen is you are included on a tax foreclosure list.  You need to know how to stop foreclosure proceedings. Avoiding tax foreclosure is possible.

Before you lose your home and it becomes a tax foreclosure case, there are ways that you can resort to Avoid Foreclosure, among which are:

* Ask for more time in the paying of your taxes – This is a simple procedure you can use and often the local authorities are lenient in allowing you extra time when you make this plea with a payment plan you can propose which will be agreeable to them.

* The partial payment of taxes is an option that is allowed in some states. Different counties too have different procedures in dealing with the tax difficulties of their people and the citizens just have to request for these methods from the concerned officials.

* You can request for an Offer in Compromise (OIC) from the concerned authorities to settle your total tax dues at a lower amount. Note however that the lien on your property continues in spite of the OIC, and it is only when the OIC is accepted by the authorities and you have paid it in full, when the lien can then be removed.

* Organizations file for “Bankruptcy” to avoid losing their property to tax foreclosures. They request the bankruptcy court to reduce the amount in taxes that they have to pay or if they are lucky, even to have all taxes erased. The judge in a bankruptcy court decides the bankruptcy filing depending on how it is applied for. A bankruptcy relief however could be temporary in nature with limited benefits.

* A tax attorney’s help is important because he can effectively guide you in avoiding any impending tax liens as this is his field of expertise. He can also help you in negotiating with the tax department for more time in settling your tax obligations. You may also request for a tax reassessment if the tax attorney advises it. He could also be in a position to seek temporary relief on your property going into the tax foreclosures list.

Always be aware of the governmental guidelines regarding the payments of taxes and other dues so you can avoid tax problems. Try your best to pay taxes on time too. When you find yourself buying a new property, check out first any tax-related issues connected with the property you are intending to acquire.

Try to negotiate with the appropriate government authorities honestly when you cannot help having this problem. Try to avoid impending tax foreclosure if at all possible. Take action when you first start to fall behind on tour taxes, do not wait until it is to late.

Hans Anderson

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How to do Your Own Foreclosure Appraisal to Determine the Market Value of a foreclosure Property

There’s a lot of buzz about foreclosure auctions, free government foreclosure listings and buying and selling them for profit. However before submitting an offer on every foreclosure – you need a foreclosure appraisal. Out of 100 properties that I consider, I would narrow it down to about 10 that are worth looking at in more detail, and then submit offers on maybe 3 of them. The more offers I make, however, my chances of buying one at a substantial discount is greater.

So how do I know whether a foreclosure is a good deal and worthy of further investigation? Well, you need to determine what price you can potentially sell it for. Here’s what you can do to do your own foreclosure appraisal.

1. Comparable Market Analysis.

How much are similar properties selling for in the area? You can find out in a couple of ways.

a. General market research

Drive around the neighborhood starting with properties within a
small radius and take note of all the properties for sale. Call the realtor or the owners (they usually have a lawn sign with their phone number) to find out what price they are asking for and compare what features the property has – bedrooms, square footage, age, bathrooms, etc. Then expand the radius and do the same thing. With this, you know what price sellers are asking, which may or may not being what the property can sell for.

b. Through a Real estate agent

This way is more accurate than the method described above. See if you can find a realtor who will help you. Realtors have access to an internal database of all properties that have sold through MLS real estate Canada. You can request them to print off a report of all the properties that have sold in your subject property’s area within a certain time period (I would go back 1 year usually). You can even search for only properties with a certain number of bathrooms, square footage, etc that is comparable to your subject property.

By seeing what similar properties sold for, you can now have a good idea of the price range of what you can sell your foreclosure property for if you bought it for resale.

2. Cash Flow Analysis and Capitalization Rate (Cap Rate)

This is typically done for investment properties or properties with rental income. The capitalization rate is the yearly rental income divided by the price of the property.

So a property with an annual income of $50000 and a price of
$500000 means that the cap rate is 10% (50000/500000 = 10%). Each area has a certain cap rate, so if you know how much rental income a property has in one year, you can divide it by the cap rate and you will get the price.

Eg. Yearly rental income = $30000 Cap rate in the area = 9%
Property value = $30000/9% = $333333

3. Checking the Government Tax Assessment Value

Every city has a record of how much a property’s value is assessed at for property tax purposes. This price is what the government says that the property is worth. Compare what prices properties are selling for to the government tax assessment value. If they are usually higher than the tax assessment value, find out by how much. Apply the same correlation to your subject property. If properties in the area are selling for about 10% more than their tax assessment values, and if your subject property’s tax assessment value is $500000, than the market value is probably around $550000.

Using Your Foreclosure Appraisal And Determining What To Offer

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Now that you have a good idea how much you can sell the property for with your own foreclosure appraisal, how do you know how much to offer the seller for the property? Now whether you are buying a foreclosure through foreclosure auctions and free government foreclosure listings will determine your strategy.

In a foreclosure auction, you basically have to bid an amount low enough that will give you enough profit but high enough to beat the other bidders. I don’t like foreclosure auctions because there is too much competition. I get pre foreclosures from government foreclosure listings sites, these properties are not being auctioned and usually have not been listed yet – which is perfect.

For these foreclosures, you need to do gauge how motivated the seller is to sell. The more desperate they are to sell, than the lower price they are willing to accept.

1. Finding Out How Long They Have Been In Default

Foreclosure listings sites sometimes has information on how long a property has been in default. If they have been in default 90 days, that means the mortgage lender(s) has just notified the owners that they will be foreclosed on if they don’t make payments or pay off the mortgage. The longer they are in default, the more desperate the sellers are because they do not want to lose all the equity in their property to the lenders.

2. Finding Out How Much They Bought It For and How Long Ago

Foreclosure listings sites sometimes include the original mortgage amount, which gives you a good idea how much the seller’s bought it for and how long ago. If they bought it 20 years ago, then there is probably a ton of equity in the property from the appreciation over the years. In rare occasions, the sellers are willing to sell their property for what they bought it for, which would be a killer deal for you.

3. Finding Out How Much They Owe On The Mortgage

Foreclosure listings sites sometimes include what they still owe on the mortgage. You can offer to pay off their mortgage, or offer a price between what they owe on the mortgage and the market value. However, this amount is usually the minimum the sellers would accept to sell you the property.

So now you know how to do your own foreclosure appraisal through comparable market analysis, cap rate, and tax assessment value. You also know how to find foreclosures before they are in foreclosure auctions from government foreclosure listings.

To Your Success!

Aiden Win

Mr. Foreclosure
P.S. Get the best of deals available for Price, Terms, Urgency,
Information from our database goldmine of the latest pre-foreclosure listings

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