Real Estate and Mortgage Secrets

Foreclosure Haven't Hit Rock Bottom Yet! You've been warned

2008-09-29T09:08:00.000-07:00

If you've watched and read my blog over the past few years, you would've seen that I called this mess a long time ago.

I know and predicted that Fannie Mae and Freddie Mac will be hit hard.
I called the booming market being a false bubble.
And I predicted the huge foreclosure increase.
And they all came true... Unfortunately.

Now what?
The mess is a crisis and is not behind us by any stretch.
It will in fact get worse before getting better.
All depending on what the market perceives the bailout to be - Helpful or Harmful.

I believe the bailout will pass this week.
I also believe that the financial markets will survive this mess, albeit, hurt real bad.

What to do?
Look for deals in high density residential areas.
Be sure to see it on the zillow.com heat map.
Make sure you're buying from a REO department of a bank.
Make sure to offer them at least 20% below lowest home prices in the area.

This is the recipe for success.
When to buy?
I would start looking for some awesome deals now and to continue to the first quarter of next year (2009)

Keep reading my blog for more insight to what's coming to the economy after the elections.

Visit Home Foreclosure Investing Blog to read Experts discuss Investing Strategies and tips guanateed to improve ones forclosure buying skills.

John Beck Free and Clear Program Review

2008-06-08T14:31:00.000-07:00

John Beck Free and Clear Real Estate Tax Investment Review

I've been watching lots of late night and early Sunday commercials for John Beck's Free & Clear program and I wanted to review it and see of its truly what they claim it to be.

So I went ahead and ordered it. Spend about 2 days reviewing the material and I gotta' say, its pretty comprehensive.

There are pluses and minuses to this program.
For example. You won't be able to get a house in a highly populated or desired area. Those homes will be sold in the Real Estate market in a heart beat.

Secondly, if there are lenders on the house, they'll easily bring the back taxes current because a bank will not lose their loan over a small $248 tax default. Yes, accidents do happen and banks do mess up. But mess up is not a business model I am looking for.

I look for duplicable business models where I can consistently find tax dafaulted homes and buy them for pennies on the dollar.

Having said all of that, yes it is entirely possible to make money with this system. And you'll find properties in the process where the seller or the bank won't let it go to tax sale, but they'll gladly sell it to you for favorable terms.

The Free & Clear Real Estate System is fairly cheap at $39.95 and he enrolls you in the monthly newsletter where he'll bill your credit card for $39.95 if you chose to continue. I canceled because I didn't need the monthly updates. But I found the information in the first copy very well put together and useful.

A very cheap way of buying and owning homes!!!!
Go for it. You can pick up a copy from this link here
http://tinyurl.com/4r3sbr

Ed

Visit Home Foreclosure Investing Blog to read Experts discuss Investing Strategies and tips guanateed to improve ones forclosure buying skills.

Find Bank Owned Real Estate Foreclosure Listings

2007-03-05T23:50:00.000-08:00

Find Bank Owned Real Estate Foreclosure Listings And Homes For Sale

I just saw several new reports on TV and the paper where it details the demise of some major sub-prime mortgage lenders.

Several have gone out of business and several are in serious financial troubles. One such company, just closed their Sub Prime mortgage division due to high deliquency rates and problematic loans.

This means massive opportunity for the foreclosure investor.
You see, one of the best allies you can have in this business is a bank with lots of REO homes for sale (REO = Real Estate Owned by the bank)

They are NOT in the home owning business. They are in the lending business.

So you need to do the following:
1- Find all the banks in your local market
2- Call or visit the REO department of foreclosure departments of said banks
3- Find or make friends with everyone there

Now get on their mailing list and be quick to visit every property they tell you about.
Once you visit the home, run some comparable market values using zillow.com or cyberhomes.com

Both of these fine tools will tell you what the homes in the area are selling for.
Take 80% of the average price in the area and make a short sale offer to the banker.

Short sale offer is when a bank accepts an offer for less than what they are owed on the house.

Why would a bank do that? Simple. They don't want the home. They are NOT in the home ownership business. They are in the lending business. So while you're at it, ask them for a loan too :)

Maybe not.
Let's locate then house first and get the offer accepted.
Next ... once the offer is accepted... start finding a buyer ASAP!
We'll cover this in the upcoming series of blogs.

So remember, finding bank owned real estate foreclosures is one of the most effective methods of investing as of right now due to the high number of deliquencies.

Visit Home Foreclosure Investing Blog to read Experts discuss Investing Strategies and tips guanateed to improve ones forclosure buying skills.

How To Buy Foreclosure House w/ Free Listing and No Money Down

2007-03-04T00:06:00.000-08:00

How To Buy Foreclosure House w/ Free Listings and No Money Down

NOW THIS IS A TALL ORDER!

The other day, as I'm fielding calls from several home sellers in serious financial trouble, I get a call from this guy asking me how he can buy a forclosed home with nothing down and no money out of his pocket.

He then goes to asks for some money out of escrow so he can fix the home.

I'm thinking to myself, self, you don't need this :)

He then asks if this is at all possible or a bunch of "BS" (that's his words)

Well. The short answer is YES. It is possible. All of the above is possible. In fact I do it daily.
Yes you can buy a home with no money down and nothing out of your pocket and I help people with this everyday. But one thing this fellow didn't have is a steady job and that, my online friends, is a hard one.

I can't take the chance of selling this house and have it go into forclosure because he didn't pay the payments.

So how is this all possible?
Here are the 3 basic home buying scenarios:
1- You have good credit
2- You have bad or no credit with lots of money
3- You have bad or no credit with NO money

Let's tackle situation #1:
You have good Fico credit history.
What's Fico you ask? That stands for Fair Isaacs Credit which is an evaluation of your credit history. The higher your Fico, the better off you are.

So let's say you have an awesome credit score. Good news. I can get you into one of my homes with nothing down and I'll pay 2 months of your payments while you settle in. In fact you can also easily qualify for some cash out in order to get the house fixed up.

Now aint that great :)
(Just joking around a little)

The second situation calls for Bad or no credit history but with money to put towards the purchase of the home. This is very doable and in fact, we run radio ads all day long and some of the people calling in, will love to assign their homes over to a suitable buyer for a couple of thousand dollars!

YES. For less than a month's rent payment, you can get into a house.

The last one, and this is a very tough one, is when you have Bad credit score and you have no money to put down. This is only doable if you have a cosigner and he/she wants to help you get into a foreclosed home.

Or we can provide you with a free foreclosure listing and you can call or visit the homeowner yourself. The free lists are public records and if you hit enough people, you can cerainly get into a foreclosed peoperty with nothing down.

That's it for now.

Visit Home Foreclosure Investing Blog to read Experts discuss Investing Strategies and tips guanateed to improve ones forclosure buying skills.

Foreclosure Seminars: The quickest way to the poor house!

2007-02-08T10:56:00.000-08:00

Foreclosure Seminars: The quickest way to the poor house!

Yes. That's my opinion. But I've never got anything from an overpriced $3000 seminar that I couldn't or didn't find from a $30 foreclosure book from Amazon.com or Barnes and Noble.

You need to understand that there are no secrets out there. Simply information that you don't know YET.

And I want to tell you this.... All the information you need to buy and sell foreclosure houses can be obtained for free from the internet. From my blog and hundreds of other blogs like mine.

However, to save yourself hours and hours of research, sometimes it is easier to find a foreclosure trainaing and information in an inexpensive book --- and definitely NOT an expensive seminar.

Do seminars have a purpose and can they be justified? In some cases Yes.
But if you are just starting out, foreclosure seminars will not be something you need to get started.

Many times, you can actually get much more use from a well produced foreclosure investing DVD and Audio set. Find them cheap on eBay and watch them in the comfort of your home. No pressure and no hype.

Training is essential to your success. Just don't overpay!

Visit Home Foreclosure Investing Blog to read Experts discuss Investing Strategies and tips guanateed to improve ones forclosure buying skills.

Redemption Period When Buying A Foreclosed Home

2007-02-05T12:18:00.000-08:00

Check the Redemption Period When Buying A Foreclosure home

One of my readers emailed me with a horror story.
After investing time and money in buying a forclosed home, the homeowners redeemed the house because the particular state allows a 6 month redemption period.

ALWAYS and I mean always, do your due diligence and know the particular rules and laws in the state or the city where you're investing in.

Visit Home Foreclosure Investing Blog to read Experts discuss Investing Strategies and tips guanateed to improve ones forclosure buying skills.

Property Flipping and Wholesaling

2007-02-01T11:06:00.000-08:00

Property Flipping and Wholesaling part 1

I'm really excited because a good friend of mine has decided to get back into buying and selling of foreclosed properties in the Southern California marketplace.

If you are a regular reader of this blog, you know I've been predicting the rapid increases in the foreclosure markets across the US.

Well the time is here and it's really geoing downhill from here.

BUT THIS IS NOT ALL BAD NEWS

In fact, I consider this a correction in the inflated foreclosure markets and the rediculous prices people were asking for their homes. Things are getting better and they'll keep on improving for the buyers throught middle of next year.

Anyhow, back to my friend....

He's spending a ton of money on advertising (and when I say a ton, I mean hundred of thousands of dollars) to bring in leads of people in foreclosure and homeownere who have below market properties.

He's asked me to help him run that division and since this will be a multi million dollar project, I've accepted.

And this is GREAT news for my readers because I'll be documenting some of the property sales, fixer upper projects and resale or wholesaling of these homes.

What's Wholesaling?

That's the process of purchaing a home, placing it into escrow or title and then reselling it while in escrow for a profit.

He just closed a deal where the lead was generated from an ad, house was placed in escrow for $370,000 (valued at $550,000) and resold for $420,000 in less than a week.

What makes this very interesting is the fact that no money was invested in the fix up or maintainance of the home. It was a simple flipper or wholesaling of a fixer upper home.

This is a net profit of $50,000 in less than a week (*Net not dedcuting for advertising costs and few minor expenses)

Anyhow, I hope you are as excited as I am about this. I'll place the videos on Youtube or Google Video and throught the eyes of the video, you'll be able to see first hand what I do with a house from the start to finish.

I am in the process of finishing a 9 townhouse project and once that's done, I'll update this blog more often.

Good luck to all.

Visit Home Foreclosure Investing Blog to read Experts discuss Investing Strategies and tips guanateed to improve ones forclosure buying skills.

Housing Market Bubble story on NBC with Brian Williams

2006-10-23T11:58:00.000-07:00

Real Estate Housing Market Bubble story on NBC with Brian Williams

Sorry for the short notice.
NBC News with Brian Williams is running an incredibly interesting show on the Real Estate Housing bubble and the future outllok.

This is a "must see" for all real estate investors.

Let me know your thoughts.

Visit Home Foreclosure Investing Blog to read Experts discuss Investing Strategies and tips guanateed to improve ones forclosure buying skills.

Rising interest rates + cooling real estate market = hot foreclosre market!

2006-10-15T16:55:00.000-07:00

Rising interest rates + cooling real estate market = hot foreclosre market!

One of the ingredients of a hot foreclosure market is rising interest rates. Well for a while, we had that and now they've stabilized a bit.

So we'll either see an increased sales of current bloating real estate inventory or we might see a small dip in the foreclosure market.

In either case, this is short lived and subject to radical fluctuation depending on the oil market, job market and other economic factors.

I read a rather interesting article by Ruth Simon of Wall Street Journal where she observes:

"Economists expect delinquencies and foreclosures to rise from today’s historically low levels. Nationwide, the percentage of home loans on which payments were past due fell to 4.41 percent on a seasonally adjusted basis in the first quarter, after rising to 4.70 percent in the fourth quarter of 2005, according to the Mortgage Bankers Association. A variety of websites have sprung up to cater to home buyers and investors looking to purchase properties in or nearing foreclosure. They include RealtyTrac.com, which ranked seventh among real estate websites in terms of unique visitors in May, according to comScore Media Metrix, a unit of comScore Networks Inc. Foreclosure.com, another popular offering, not only runs its own website, but also says it supplies data to more than 200 other websites."

So interesting is the observation by David Benham:

“We run into a lot of problems with foreclosure websites because a lot of the houses can’t be sold” because various legal requirements haven’t been met or the lender hasn’t readied the property for sale, says David Benham, owner of Benham Real Estate Group in Charlotte, N.C., which sells foreclosed homes on behalf of lenders..."

Yes, you need to be very careful when investing and as you might recall in my Step By Step Guide to Finding a Foreclosure I discussed the importance of research and asking questions from the homeonwer and/or his broker.

And using paid foreclosure listing services does in fact speed up your research. But errors do occur. So always do your due diligence.

Good luck and happy investing.

Visit Home Foreclosure Investing Blog to read Experts discuss Investing Strategies and tips guanateed to improve ones forclosure buying skills.

Step By Step Procedure in finding a Foreclosure Home

2006-10-13T22:23:00.000-07:00

Step By Step Procedure in finding a Foreclosure Home

Yesteraday, I get a call from my friend who was begging me for help in finding him a reasonably priced home in Southern California.

As if there is such a thing out here :) Just kidding!

Anyhow, here is the exact steps we took and it really was about 2 to 3 hours of work and we found 7 possible canditates. If you want a foreclosure home, even if you don't have a list of foreclosed homes, all you do is follow the system below.

1- Identify an area where you want to find the home
2- go to Craigslist.org and look for pre-foreclosed homes in your area
3- Write these down for further research
4- Now go to the online version of your local neswpaper and do some searching
5- Next go to Yahoo Real Estate and do some searching around in there
6- Now, if you have a foreclosure listing service like this one, then do some additional research
Note: We are just gathering addresses, names and phone numbers up to this point
7- Now, you have several homes to dig into. You've written the names and addresses, prices etc. You need to hit the phones.
8- Call the homeowner or the real estate broker and start asking questions. Don't get too personal. I know this is scary for the beginners, but I promise you, it will get easier as you do more.
9- Ask the following questions:
a- Minimum asking price
b- Are the taxes current
c- Would they carry a second or third
d- Would the seller consider a "wrap around"?
e- Would the seller consider an option to but?
f- If the property is in foreclosure, when is the sale date?
g- Is the enough time to close the deal?
h- Any other information that you think might be helpful
i- Write good notes!
10- Now that you have gathered additional information on each home, you need to check for property values. For this, we use Zillow.com which I blogged about here.
11- So go to Zillow.com and plug in the address and information for each selected property.
12- For a little more information on the high priced home sales in a city, use the "heat map" feature in zillow.com
13- Now we are almost ready to make some moves here
a- we have researched homes
b- we have called the homeowner or the RE Broker and asked questions
c- we researched the propert values in a given neighborhoud
d- now is the time to make our offers
e- make offers at a maximum of 65% to 75% of the average prices in an area
...PAY SPECIAL ATTENTION TO SQUARE FOOTAGE OF THE HOMES
14- If you fail, start the process from step number 1.

This is exactly what I would do if I was starting out. If you are more advanced, then by all means, get some additional paid tools to speed up your research and success.

Happy investing :)

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

What do Foreclosure Investing, Donald Trump and Kareem Abdul Jabbar have in common?

2006-10-10T11:22:00.000-07:00

What do Foreclosure Investing, Donald Trump and Kareem Abdul Jabbar have in common?

Well, I don't except for The Learning Annex.
Seems like once a year, Donald Trump gets a team of people together and they all talk about investing in Real Estate as well as stocks and other wealth building strategies.

I am always amazed to see what some of these fine people know about investing and making money in the real world. After all, some of the speakers are celebrities who have never worked in the real world jobs!

However, having said that and having attended several of these seminars put together by The Learning Annex, I can assure you that these are good seminars.

The advise offered is solid and you can't go wrong with The Donald.

In fact, if you register, try to dig for a discount code which allows you to get in for $99 dollars.

Trump gives you awesome investing and real estate advise. So get the code and have a fun day of learning. I think the code is donald99 but I am not a 100% sure.

Happy investing.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

House Flipping on the Decline as Home Prices fall

2006-09-29T09:03:00.000-07:00

House Flippers, beware as foreclosure investing becomes more risky with declining values and increasing inventory.

When available real estate inventory increases at such rapid pace, you might end up sitting on a property for much longer than in the past. This eats your profits and can quickly turn into a negative investment.

In a recent article by Amber Lester titles "Flipping houses loses its appeal as market cools" she covers some details of this same exact scenario.

She states:

"The news from the real estate world has been bleak since interest rates started rising, with investors or “flippers” taking a big hit. Flipping is the practice of buying a home to resell quickly, sometimes renovating it before sale. The past few years had been good to investors, who were able to buy fixer-uppers and sell them within days to shoppers caught up in the feeding frenzy. Now, with houses sitting vacant for months, flippers are starting to retreat."

My take on this is to be very careful in the foreclosure flipping market and be sure of the turn over times and inventory volume before jumping into a deal.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Fannie Mae Could Lose Upwards of 22 Billion Dollars Dues to Foreclosures

2006-09-20T02:46:00.000-07:00

Fannie Mae Could Lose Upwards of 22 Billion Dollars Due to Foreclosures

Gilchrist Berg, founder of $2 billion Jacksonville, Fla.-based hedge-fund firm Water Street Capital, said in a recent letter to investors that Fannie Mae could lose $22 billion to $29 billion if, as he expects, the housing bubble bursts and foreclosures increase.

Disaster in the works will translate into HUGE potential for the prepared investor. I am not implying that we should take advantage of people. I am simply stating the obvious. There will be alot of homes going into foreclosure. So get prepared and invest wisely. The "cycle" is here!!!!!

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Stopping via Partner Investor Method

2006-09-16T23:31:00.000-07:00

Foreclosure Stopping via Partner Investor Method

I always tell my inevestors as well as homeowners that we MUST be in a win win win situation or noone will be happy.

That's what I call foreclosure stopping via partners investors.

You get a partner investor when you ask for help from a foreclosure investor.
Alot if times we stay together for 2 to 3 years until your problems are over.
You then sell the house and we split the profits.

So when stopping your foreclsore, think about a partner investor instead of a bank or a lender.
Banks have a very straight-forward lending guidelines and will make life miserable for you especially if you have credit issues.

On the other hand, an investor does not care. All they want to know is that their money is safe and the house will insure them against losses.

Good luck

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Orlando Florida Foreclosure and Pre Forclsoure on the Sharp Increase

2006-09-15T19:05:00.000-07:00

Orlando Florida Foreclosure and Pre Forclsoure on the Sharp Increase

I was researching various counties and municipalities for some below market foreclosure deals and came across alot of data pertaining to Hud foreclosures, preforeclosures, and fannie mae foreclosures in Central Florida as well as sorrounding areas.

I haven't had time to crunch the raw data and figure out what's causing this or what to make of it.
All I know is that if you are looking for beach from foreclosure, lake front foreclosure property or oceanfront foreclosures, Central and South Florida are a definte must in your research.

Florida has probably suffered in property values due to recent hurricanes. However, it is still a very viable investment opportunity for a foreclosure. Free home listing report can give you a fast start in your search for a preforeclosure.

You can always buy a report and find a beach foreclosure front and ahead of all the competition. All it takes is research and perseverence.

Good luck and happy investing

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Home Listing Free Sources Revealed

2006-09-03T14:15:00.000-07:00

Foreclosure Home Listing Free Sources Revealed

By far, the number one question I get is where do I get listing of Foreclosure Homes for Free.
Well, I've covered parts and pieces in the past, and I personally have some free foreclosure listing resources that work well and have generated more home listings than any paid source.

Having said that, there are some meritts to a paid service and if you seriously want to get into foreclosure investing business, then I suggest you take a look at some paid foreclosure listing services as well. You owe it to yourself to have all the investing tools in your arsenal.

OK, now to the free services.

First thing you need to do is familiarize yourself with my earlier post titled "How to Buy Preforeclosed Properties"
The reason I mention this is to help you realize that most of your success will come from homes that are not YET owned by the bank (REO)

When you find a preforclosed home, you are in a better negotiating position vs if you were dealing with the Bank's REO (Real Estate Owned department)

So what do I do to find foreclosed homes?
One of my personal favorite methods is buying property for delinquent taxes!
Yes, this is not a foreclosure investing method, but it is very profitable and the list is freely available from your county assessor's office.

My next favorite method is VA Foreclossure Home Listings. The listing is free and you can obtain it directly from here.

Next, I visit craigslist.com for listing of foreclosure home.
This is absolutely free and craigslist is probably one of those hidden gems not too many people know about.

Also be sure to check out Yahoo's new real estate listing section which is all revamped and improved.

This will keep you busy for the next 2 weeks!
But I have additional sources which I'll blog about next week.
Good luck.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

How to find and buy preforeclosed properties

2006-08-13T20:41:00.000-07:00

How to find and buy preforeclosed properties

I often find more ways to find forclosed and preforeclosed properties than time allows for me to follow up on.

Here are just a few to get your juices flowing.
Be sure to check your local ordinaces because a technique that might be 100% OK in Marysville, California might be completely against the city rules in Detroit, Michigan.

1- Look in craigslist.org under foreclosure or preforeclosure keywords
2- Place small ads in local newspapers
3- Place small 3X5 at all local bulleting boards
4- Put some ground signs at all allowed locations and freeway exits
5- Signs on electrical posts or back/front of benches
6- Small ads in large national newspapers
7- Place Ads in free online classified boards
8- Read all the ads in your local papers
9- Networking and Word of Mouth
10- Small business card placed at strategic locations
11- A mailer to local bankruptcy lawyers
12- A mailer to local bookkeepers, accountants and CPAs
13- Talk to all your local banks and their REO foreclosure department
14- Speak to and netword with all local realtors
15- Contact local HUD foreclosure office and get their list
16- Local public listing of notice of defaults
17- Sign on your car advertingin your services

Like I said, this is just a tip of the iceberg and honestly, one person alone will not have enough time in the day to follow up on all these methods.

And if you were to go all out and hire some foreclosure specialists or assistants, then you'll probably not be able to handle the volume of homes in preforeclosure that'll land on your desk.

Start with a small area in your city and expand your efforts as money and time allow.
The larger the radius you cover, the more properties you'll find which will require more time and money from you.

This is not hard. It's hard work!!
Put in the effort and reap the rewards.

Once you implement some of these strategies, you'll find one, two or three methods that will generate majority of your foreclosure investment portfolio. Then only focus on those till you exhaust the well.

My best source and the biggest foreclosed property portfolio came from one person, working in the bank and in charge of their forclosed properties. She told me that I was the only person who approached her for their listings. And for years, I received all the data, analyzed and evaluated them and made offers to the bank.

Most of them were accepted and I never had to pursure other methods as outlined above. And you'll discover your niche as well.

Happy investing.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Free Foreclosure Listings Courtesy Of US Government

2006-07-25T08:04:00.000-07:00

Free Foreclosure Listings Courtesy Of US Government

We've seen the rapid rise of foreclosure homes across the US in the last few weeks and months.
So now you need to invest in a foreclosre. Free Government listing and bank foreclosure free listings are available if you know where and how to look.

First place to start is http://www.hud.gov/homes/index.cfm
This is the where you'll find free list of Government foreclosure homes all collected in one place.

However, VA has its own foreclosure lists and you can get further information by searching on www.homesales.gov

Also be sure to check out http://www.firstgov.gov which has a ton of useful information on buying Real Estate and Foreclosures from the Government.

Once you complete your initial search, then you need to research the prices and perfome some due diligence.

All I'm pointing out is the amount of free information available online and you should take advantage of it.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Investment Scam Uncovered

2006-07-21T22:51:00.000-07:00

Alleged Foreclosure Investment scammers indicted

I just blogged about this topic a few hours a ago and then read this article in the paper.

In essence, a women and 3 others found people in foreclosure through public foreclosure listing and arranged loans for them.

"Defendants could get 20-year sentence for charges of
identity theft and mail fraud.
By Samantha Gonzaga, Staff writer

LOS ANGELES - A Downey woman and two others on Thursday
were indicted by a federal grand jury for their alleged
part in a $12 million foreclosure scam that victimized
more than 100 Southern California homeowners..."

Except that they allegedely used illegal methods to do so.

I always say: There are many homeowners with financial troubles and in foreclosure and we can help them get out of foreclosure.

Preoreclosure houses are plentiful and ethical investors will be able to profit from this as well as helping the homeowner in foreclosure in the process.

Investing in Foreclosure must be a win win win for all parties and if not, don't do it!

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Scams

2006-07-21T21:11:00.000-07:00

Beware of Foreclosure investing and buying scams

Over the many years, I've come across some of the nastiest foreclosure investor scams.
Now, more than ever, the foreclosure investor as well as the homeowner in financial trouble needs to be aware of such scams.

Here is a very interesting article by Christi Lundquist that addresses some of the biggest foreclosure scams and how to avoid them. You can read the article here

I've included a short snippet of her article and strongly recommend reading the entire post on her blog.

Here are some signs that one should proceed with caution,
or even question the transaction. These can help protect
consumers from fraudulent transactions, and help loan
officers and mortgage professionals learn to recognize
fraud, and even help to educate customers in the event
that they need help in the future. Use extreme caution if
you are asked by an individual or a company to do any of
the following: (This advice comes from the U.S. Trustee
Program of the Federal Department of Justice for homeowners
facing foreclosure or having trouble paying their mortgage)

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Colorado Leads the nation in Foreclosure Rates

2006-07-14T23:39:00.000-07:00

Foreclosure Rates increase in Colorado (Link to Story)
Foreclosures Auctions up 26% in North Texas (Link to Story)

Foreclosure increases are coming from all across the Nation.
What I recommend to friends and family is to:

1- Get on as many free foreclosure listings as possible
2- Subscribe to any good paid auction and foreclosure list service
3- Read as many books and blogs on foreclosure investing
4- Get on a couple of foreclosure forums and groups and study what people are saying
5- Visit some of the houses from the lists you've gathered
6- Talk to the real estate agents in charge or a trust agent
7- Get some area prices by visiting www.zillow.com
8- Make an offer of 65% to 70% of the 30 day value of the property
(See my earlier blogs on definition of 30 day value)
==> Side Note: Most of your offers will be rejected. This is OK. You are gaining experience.
9- Look in the paper and see what people are asking for their homes in the area
10- Look at the rental rates and vacancy factors in the area you are targeting
==> Side Note: The rental research will help you know what you can get for rent in the even you are unable to flip the property quickly.
11- MAKE SURE YOU HAVE A WEASEL CLAUSE in the offers
Side Note: WEASEL CLAUSE: We'll cover that on the next blog posting

Good luck and happy investing

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Investing Hightens Because Of Cooling Home Market- According to WSJ

2006-07-06T20:47:00.000-07:00

Foreclosure Investing

Wall Street Journal reports on increasing foreclosure investments because of cooling home prices. You can see the article here.

WSJ reports:

"Rising interest rates and a cooling housing market are whetting the appetite of real-estate bargain hunters and fueling interest in Web sites that list homes in, or near, foreclosure.

Economists expect delinquencies and foreclosures to increase from today's historically low levels. Nationwide, the percentage of home loans on which payments were past due fell to 4.41% on a seasonally adjusted basis in the first quarter, after rising to 4.70% in the fourth quarter of 2005, according to the Mortgage Bankers Association.

A variety of Web sites have sprung up to cater to home buyers and investors looking to purchase properties ..."

This is the best time to get ready and do your research. There will be many more foreclosures coming to the market. Be prepared and do your research.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure House vs. Pre Foreclosure and which one makes more sense

2006-07-01T00:03:00.000-07:00

Foreclosure House vs. Pre Foreclosure and which one makes more sense

If you've been reading online, you've noticed that more and more homes are reverting back to the lenders.

Here's the dilemma for the investors like us:
1- Do we approach and offer the homeowner while the house is in pre-foreclosure
or
2- We only go after homes AFTER they been taken back by the bank and some work has gone into them.

Here is my take...

A home in pre-foreclosure requires alot more analysis and research because there might be all sorts of hidden liens and problems attached to it.

Also, the owners might have been in it a while, incurring back interest and penalties, as well as repair costs and combine that with the fact that many homes in foreclosure are the direct result of the homes being purchased at high prices with little or no money down.

Ok, on the other side, buying from the REO department of the bank.
Well, those days are gone when you could buy at low prices from the friendly banker.

Nowdays, some banks turn over their Foreclosed Real Estate holdings to local Real Estate comapnies and you need to deal with them.

So the decision is, where can you get a safer and a better deal.
From my own experience, I find dealing with the bankers (if they have their own foeclosure department and/or the Real Estate comapny handling the foreclosed properites) is the better way to go.

Banks realize that interest rates are on the rise and they are also privy to data showing decreasing values and increasing inventory and inventory hold times.

No bank wants to hold foreclosed homes on their books and they'll make deals if you can show them a win win situations.

You are also better protected because once the bank takes over and offers the property for sale, all other liens have been taken care of.

However, don't let this stop you from looking for pre-foreclosed homes in your target area. Everything is fair game in this game.

Happy investing.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Investing Success Steps and Principles

2006-06-25T23:12:00.000-07:00

Foreclosure Investing Principles of Success
By Paul Wells

During my years of foreclosure investing I've identified four key principles that have led to my success. This article describes those principles--do you have them?

1. You need to make a commitment to succeed. Real estate investing is simple, but it is not easy. Many, many long hours--punching in numbers, looking at houses, evaluating deals, talking to people, constructing deals, seeing where your profits will come from--are going to have to be spent in order to become proficient at buying and selling real estate. You need to have a plan and execute your plan to succeed. Remember, those who fail to plan are planning to fail. The investors I know around the country who are wildly successful have overcome challenges, stuck with it when times were tough, never gave up, and had a true belief in themselves that they would succeed and that failure was not an option.

Side Note: As author accurately points out, investing in foreclosure homes takes time and effort and don't let those late night TV commercials fool you. However, foreclosure buying is one of the most rewarding businesses I've ever been involved in.

2. You need capital or a way to raise capital. You can buy real estate with little or nothing down, as many people have indicated over the years. However, the person that has capital at the ready is the person that is able to pull the trigger quickly and potentially reap very large rewards. So you need to have money for your real estate transactions in some way, shape, or form. You might think that your resources are extremely limited. Through perseverance, ingenuity, creativity and enthusiasm, though, you can find all the capital you need through what is known as "private funding".
Private funding is the use of individual investors' money to fund your deals. These individuals are far less critical than banks when it comes to funding deals. Private investors look for a lower loan to value ratio than lending institutions do. Of course, it's easier to find willing private investors when you have a solid track record of success in real estate. But there are proven ways to find private investors as a beginner, too.

Side Note: Funding has been one of the least of my concerns. Getting a loan to buy the foreclosure home is easy if the Loan to Value is low enough. First things first... Find that below market home and then the loan will find you.

3. You need to leverage your resources. Real estate creates wonderful leverage for the investor, allowing them to parlay their investment into bigger and better real estate transactions each and every time, through shrewd research and prudent investing.

Side Note: One of the best ways to leverage yourself and your time is to find ways to adverise for sellers. Once you have a systematic way of finding foreclosure homes, then all you do is put deals together.

4. You need to take massive action. This means doing whatever it takes to make tons of offers and create massive activity that drives your investing business forward. If you do not create massive amounts of action in the first six months to get your property funnel filled with deals, you more than likely are going to lose your initial start-up money.

Side Note: Action is the name of the game. It does no good to read and read if you don't actually go out there and find something to invest in. Having said that, always be careful and always seek professional advise especially if you are just starting out.

Paul Wells has been investing in foreclosures full-time for more than 5 years. For more foreclosure investing secrets like the one in this article, subscribe to Paul's Free Foreclosure Investing course here: http://www.FreeForeclosureInvesting.com.

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

Conclusion: Author notes many solid points but one of the things he does not mention is the HOW TO of actually finding foreclosure homes. In all fairness, this was not the intent of his article and I completely agree with all his points. We'll cover the HOW To's in future blogs.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Investors find homes easier with the new Bankruptcy Reform Laws

2006-06-22T20:25:00.000-07:00

Foreclosure Investors find investment properties easier with the new Bankruptcy Reform Laws

Gone are the days where a homeowner in foreclosure could stop the home foreclosure process with a simple filing of bankruptcy.

The 2005 Bankruptcy reform law now makes pre-requisites upon the homeowner before asking for an automatic stay.

This simply makes more homes available via foreclosure proceedings and you can get into one by either:
1- Contacting the homeowner before the sale date and explain their options and your services.
2- Make it to the courthouse and buy at the time of auction.
3- Contact the foreclosing bank and make them an offer to buy after the fact.

Every part of the country is starting to show higher numbers of home foreclosures and luck favors the prepared!

Happy investing and good luck

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Investiong Alternative: Probate Property Investing Secrets

2006-06-20T11:24:00.000-07:00

Foreclosure Investiong Alternative: Probate Property Investing Secrets

I just came across a report by Bob Bruss, an accomplished and well respected author, which outlines probate property investing, here.

This is a very good addition to your reading list and another tool in your foreclousre investing arsenal.

I am a firm believer in trying to diversify methods of researching, locating and investing in Real Estate.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Investing Questions Answered By Yahoo!

2006-06-17T01:43:00.000-07:00

Foreclosure Investing Questions Answered By Yahoo!

I wanted to give you the heads up here on some awesome question and answer going on in Yahoo Answers dealing with Foreclosure Investing.
You should go there and check it out.

Here are some of the solid foreclosure investment questions being fielded as of today.

Is investing in foreclosure homes a good business to be in?

Is buying foreclosures a good way to invest?

Are foreclosures a good investment option?

Where can I find listings of foreclosure and repossed homes in Kansas for free?

What's the first step in getting started in real estate investing?

Can you buy a home after foreclosure and if so, how long does it take?

I am looking in to investing in tax deeds in Texas. Looking for any helpful information.?

how to find bank owned propertys?

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Google Answers and Yahoo Answers Tell you all you need to know about foreclosures!

2006-06-17T01:26:00.000-07:00

Foreclosure Investing Answers on Google Answers

One of my best sources of information has been Google Answers.
This is where readers offer a fee for answers by researchers, professors and pre-screened staff.

The awesome part is that you don't actually need to pay to read answers to other people's questions.

So you get to have all that knowlege for free.
Well this got a little better because Yahoo just came out with their version of Yahoo Answers.

As an example, I was researching a topic on Foreclosure property research and my first real answers came from Google Answers over here.

I then headed on over to Yahoo Answers and searched for "Foreclosure investing" and got this answer:

You see my friends, all your answers all available courtesy of your favorite search engines.

Good luck and happy investing.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Dangers of Sale-Lease Back when Investing in Foreclosures

2006-06-11T13:37:00.000-07:00

Dangers of Sale-Lease Back when Investing in Foreclosures

One of the oldest techniques when investing in pre-foreclosures is sale-leasback.
In essence you approach a seller in foreclosure, offer to buy the property and lease it back to him giving him the option to buy it back in a few years.

In essence hoping that he won't and you'll evict him.

Problem is, if not structured properly, and if you use creative financing techniques, the homeowner can claim the sale as being nothing more than a refinance or he can claim he didn't realize what he was doing.

You've got to be real careful when dealing with homeowners in foreclosure especially senior citizens.

Courts truly frown upon investors who try to take advantage of the elderly and I don't care how you structure it and how much you disclose the risks. When in court, the seniors have all the advantages and you as the investor are the "bad guy".

So keep this in mind when structuring your next sale-leasback or creative foreclosure deal.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Sneaky but powerful way to Buy a Foreclosed Property by investing in Delinquent Property Taxes!

2006-06-10T21:26:00.000-07:00

Foreclosure Investing using Tax defaulted liens

Investing in delinquent property taxes is one of the best methods I know of to get into Real Estate Foreclosure game.

For one, you get awesome ROI even if you never foreclose on the property. Simply because the owner or the lien holder has to pay you maximum allowed interest rates, as high as 18% or more in some States.

Your investment is secured by the Real Property. And if the property owner or lien holder does not pay you back, you have the recourse of foreclosing on the house and now you're proud owner of a home.

Of course, PLEASE do your research and check your local laws.
For example, here is some Property Tax Lien information for Montgomery County Md.
http://www.montgomerycountymd.gov/apps/taxliensale/
Here is some information on State of New York tax lien sales. This one is very comprehensive so be prepared to spend some time with it.

There are tons of resources pertaining to your own County and State on the internet.

So my advise as always is, be careful, research properly and seek professional advise before spending your hard earned money.

This foreclosre investing strategy using tax liens is very powerful and definitely worth a look.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Prospects of increased foreclosure inventory on your ROI

2006-06-07T23:50:00.000-07:00

Prospects of increased foreclosure inventory on your ROI

As you might have noticed, more and more homes are going into foreclosure.
I've predicted this for over a year now and just read some reports that reveal some interesting stats.

For example, a recent article in the Arizona Daily Star, outlines the exact reasons and problems that have caused this sharp increase in the recent weeks and months

SEE:
"Foreclosures go up sharply here
Trend linked to slowed home sales, inflation, adjustable rate mortgages
By Joseph Barrios
ARIZONA DAILY STAR
Tucson, Arizona | Published: 06.04.2006"

Now, how does this effect your ROI and should you hold off on investing in foreclosed properties.

This is a valid question and one that I am asked often.
Truth is that noone knows what the economy will look like in 3, 6 or 12 months.

We only have historical data and some stats to try to make some intelligent choices.
For example, most of the Real Estate industry experts predict a steady growth in sales and prices over the next 18 months.

Is this biased or factual? I don't know.

This is how I evaluate a property and the exact steps I take when selecting a foreclosed home.

First, I look at the 30 day pricing of houses in the area.
30 day pricing is "what price should I list a home in order for it to sell in 30 days or less"

This data can be gathered by contacting some Real Estate agents in the area, or by looking at sold reports on Yahoo Real Estate section.

Then, I make my offer for at least 20% below that if I don't have a ready buyer or 10% below the 30 day pricing if I do have ready buyers in the wings.

Either of the above situations guarantees me a quick profit.

Another method is the flip system discussed in my earlier blog posts.
This is where I don't even own the propert and simply assign the rights to a new buyer right in escrow for a fee of $5,000 or more.

Ok, so here are some numeric examples.
Pre-foreclosure home with total owing to the bank = $500,000
30 day price for this house = $525,000
I'll offer $420,000 to the bank if I don't have a buyer
or offer $472,500 if I have a ready buyer

I'll take a no point no cost no prepayment penalty mortgage and let the mortgage broker pay all my closing costs.

This will cause the interest rate to be slightly higher, but so what, I'm selling it in 30 days or less.

If my buyer backs out, I'll price it at $520,000 which is below the 30 day pricing and sell it quicker. Even before the first mortgage payment.

Please keep in mind that all of this is speculative and things don't work out so perfectly in the real world.

However, if you follow the example above, your chances of success and repetitive profit is extremely high.

As always, consult a professional before investing your money.
This blog is for general education purposes and not meant to be legal or real estate advise.

Good luck and happy investing

filed under: foreclosure investing

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Can You Really Buy Foreclosure Home with No Money Down?

2006-06-04T02:32:00.000-07:00

Can You Really Buy Foreclosure Home with No Money Down?

If you've ever had insomnia and watched late night television you may have seen the infomercials telling you that you can buy

real estate no money down. But can you really purchase investment property without having any cash? The answer is, "yes!".

Anyone can purchase property without having any cash, but it's not nearly as easy as the gurus proclaim. Can you do it even

if you have bad credit?? Yes, but it's a whole lot easier to do it if you have good credit.

In fact, with good credit it's easy to get cash when you buy. Here's how you can get paid when you buy a piece of property.

Example: Property is for sale for $100,000.

1. You ask the owner of the property to give you a note for $30,000 secured by other property you own or even as an unsecured

note (you can put a VA clause in the note allowing it to be moved back to the subject after the closing).
2. You get a conventional loan for 75% of the sales price.
3. You ask the seller to pay your closing costs.
4. You ask the seller for a carpeting allowance of $2000.

Here's how the deal works;

- You buy the property for $100,000.
- You pay the bank on a $75,000 mortgage.
- You pay the owner on a $30,000 mortgage.
- The seller pays your closing costs.
- The seller pays you $2000 for carpeting.

If the property is rented out for $1000, you collect the rents and security deposits.

In the above example the buyer would walk away from the closing with a $100,000 property, $5000 from the over finance, $2000

for the carpeting, and $2000 for the rent and security deposit. That's a total of $9000 for buying a piece of investment

property. NOT TOO BAD.

Will every seller be willing to do this deal with you? No, maybe only one seller in ten or twenty will be willing to do this

deal. But there are sellers who will do this deal. What you have to find is a motivated seller.

What makes a motivated seller?

- An owner who is in foreclosure.
- An owner who got the property as part of an estate.
- An owner who no longer wants to deal with tenants.
- An owner who is in divorce.
- An owner who has been transferred out of state.

Now that you've bought a property and put money in your pocket be prepared to deal with the tenants.

Yet there is another technique that virtually anyone can use as long as the property seller is willing to negotiate with

you. To be fair, not every seller will be interested (or even understand) the concept outlined. Your best bet is to find a

property that the owner has great interest in selling, whether because of moving, divorce or frustration with tenants.

In fact, if you are currently renting and thinking about using this technique perhaps your landlord would be happy to help

you out!

There are a few variations that can be used depending on you and your seller. Do they want the market price or are they just

eager to get out from the monthly payments - perhaps facing foreclosure?

The simplest method is to take over their mortgage payments - called 'assuming' the mortgage. You will need to be approved by

the original lender to assume the mortgage. If you cannot get approved for an assumable mortgage you may also try a 'subject

to' assumption where you merely make payments while the property remains in the seller's name.

WHAT IF THEY WANT A HIGHER PRICE?

You take over the original mortgage AND create a second mortgage on the remaining cost of the house with the seller. Offer a

high, interest-only payment for a short period of time - 2 or 3 years. Instead of having the money sit in a bank they can be

collecting a high interest over 2 or 3 years with the remainder due in full at the end of the term.

When the term ends you should be able to refinance the cost, or you can sell. Unless you hit a real bad market the value of

the property should have risen in that time.

WHAT IF THERE'S NO MORTGAGE TO ASSUME?

Easy. Most mortgage lenders merely want to make a good investment. While your local bank may still shy away there are plenty

of financial lenders that would love to make a deal.

Financiers like real estate. The mortgage is usually based on 60-70% of the VALUE of the property, so as long as they know

they get their money back in the value of the property if you default, they don't care what kind of money you make. Complete

the deal with a second mortgage created with the seller. If you default they can still foreclose on the property and sell it,

paying off the existing mortgage with the proceeds.

As you can see, it can be in the favor of a buyer and seller to work together - especially if the seller is motivated. If

they can't wait for a sale, you can still give them their asking price with a little flexibility on their part.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Homes Highest In a surprising city

2006-06-02T09:21:00.000-07:00

Foreclosure Investing

For years, I've always assumed that foreclosures are highest in large citied like Los Angeles and New York.

However, as I was reading this article, I was shocked to learn that Indianapolis leads the nation in Foreclosure rates!

Here's what the report reveals and why it is so...

"The foreclosure rate in Indianapolis is a perfect example of a very unsettling American economic trend," said Addison Wiggin, author of "Empire of Debt" and editorial director of "The Daily Reckoning." "Overseas manufacturer outsourcing, an undereducated working class, and a housing glut have combined to produce the nation's highest foreclosure rate."

A former agricultural and manufacturing hub, Indianapolis' gradual swing away from the manufacturing industry coupled with growth in the insurance and retail industries have put blue collar workers in a serious predicament. Wiggin believes this change could soon be mirrored in similar cities across the nation. "The shift from a manufacturing economy to a service society doesn't mean everyone who used to work in a manufacturing position will get a job in the 'new economy,'" ...

Visit the site to read the rest of the story.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Investing: Then and Now!

2006-05-31T19:17:00.000-07:00

Foreclosure Investing: Then and Now

I was reading Dallas Morning News and came across an incredible journey to the not so past history of home foreclosures as observed by a foreclosure specialist.

It is definitely worth a read even if you don't live in the Dallas area.

In the article, the interviwee reveals real estate investing differences and how foreclosures are different now and back then. Read the whole article here.

"...Take us back in time. When did the last major foreclosure cycle get under way?

Back in the early 1980s, we were seeing double-digit interest rates that at one point hit 16 percent. Consequently, it was just too expensive to build for a period of time. This created pent-up demand for more development.

It soon became a matter of who could make the money available the quickest. So there ended up being many, many more deals done than there should have been. This led to the beginning of a real estate recession, close to depression, in the D-FW area.

A "recession" or "depression" presumably led to some properties going back to the lenders?

Yes, foreclosures really began to hit in 1985. But unlike today, the first impact was on the commercial side, which had been hurt by massive overbuilding. The same thing that happened in the early 1980s is happening today, but on the residential side. The common denominator is money, and lots of it...."

"... In 2005, we saw 934 home equity loans posted for foreclosure, and that number continues to rise. In the first five months of 2005, there were 356 home equity postings. Over the same period in 2006, there were 429; that's an increase of 20 percent.

So with overall foreclosures, we're only about 75 percent of the way to 1989 levels. Obviously something is better this time around?

Back then we saw meaningful degradations of value, in some cases 25 to 30 percent declines. But we haven't seen that today. If you look at months' supply figures from 1989, inventories were running at 13 months, while today we're just at about seven months, so we're not at that point yet...."

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Investing Training and Apprentice Program

2006-05-28T10:59:00.000-07:00

Foreclosure Investing Training and Apprentice Program

This little foreclosure investing press release caught my attention the other day.
Jeff Adams is offering apprentice program for $20 a month. Although, I haven't seen the program or the content, I think anyone interested in foreclosure investing should at least take a look.

My education came from the school of hard knocks and on the street. No, I really mean hard knocks. I used to find homes in foreclosure from public information databases and go knockin' on doors.

Once, while in Los Angeles, I was welcomed by a man with a gun who claimed anyone trying to forclose on his house will be welcomed with bullets! So be careful if you chose this method of locating homes.

Anyhow, if you decide to give Jeff's training a try, please drop me an email and let me know your thoughts.

Happy investing :)

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Process: What's to do if your House is in Foreclosure

2006-05-25T00:11:00.000-07:00

We are so involved in foreclosure investing and finding foreclosure deals that we forget the person in foreclosure.

Sometimes it is good to put ourselves in their position and try to understand what the foreclosee is going through. Mainly to be compassionate and understanding of their problems but also to see what processes they must go through to solve their immediate problem.

For this, I utilized this guest article that eloquesntly outlines the foreclosure process.

If you are behind on your mortgage payments for any reason -- job loss, medical expenses, and/or unexpected emergencies -- don't panic! You CAN save your home and you don't have to spend a lot of money to do it.

It happened to me. I am extremely grateful I still have my home. After losing two jobs during the dot com bust and 9/11, I found myself unemployed and unable to pay my mortgage, not to mention any of my other bills. I was alone and afraid. I didn't know whom to turn to and I didn't have a lot of money to pay an attorney or seek other help. I sincerely hope that you don't find yourself in this situation, but if you do, immediately take the steps that I took so you can also avoid losing your precious home. This list is in order of importance.

1. Contact Your Mortgage Company
Call your mortgage company immediately, even if you are technically not yet behind on your payments.Your lender is not in the business of taking homes; believe me, they make far more money lending your mortgage payment to other homeowners. Your lenders may work out a payment plan that will help you until you get back on your feet. There are many different plans they may offer you -- a temporary grace period, a temporary reduction of payments, or, if you have already missed payments, stretching those missed payments for a period of time.

If you are already in foreclosure, you can still work with your mortgage company! I did. I worked out a "forebearance agreement". I had to pay my regular mortgage payment plus a portion of the missed payments every month. I also had to agree to send the funds certified or else they would have taken my home.

2. Speak To An Attorney
Attorneys are expensive. I wouldn't advise paying one at first. Try to find an attorney that will give you a free consultation, or consult Legal Aid. The money that you do have should be earmarked to pay your mortgage. That being said, if you cannot find free or cheap advice, I would then spend the money for an attorney. I was lucky. I asked around and I spoke to a friend of a friend for free. You don't need an attorney until you have to go to court --- then, please hire one!

3. Reduce Your Other Expenses
I immediately cut off my cable, reduced my cell phone plan minutes (I still needed mine for job searching), and made other cuts to my spending until I got back on my feet. For me, that also meant temporarily changing my dietary habits and purchasing cheaper food. I travelled less so I spent a lot less on gas and train fare. If you can, cancel your registration and insurance on your car so you can save those payments. Little changes go a VERY long way. Remember, it's only temporary.

4. Rent Your Rooms
I had three extra rooms in my house and immediately furnished and rented all of the them. This single step helped me save my home. I checked with my town to verify it was legal for me to do so. I used VERY little money to get this going. Once I was started receivng rent from my tenants, I was able to give more to the mortgage company. The benefit of this is that you will get money without working and you can deduct your expenses as a business!

5. Have A Yard Sale
Sell some of your things. I'm not talking about the family heirlooms here; I'm talking about extra pieces of furniture, used books, clothing, CDs, movies, etc. You'd be surprised how much money you can raise!

6. Spend Full Time Hours Looking For A Full Time Job
I have to tell you, for me this step was very hard. I did not want to look for another job, but I had to in order to save my home. For some, this step may take longer than others -- your mileage may vary. Looking for a job is numbers game - network, post your resume on the job boards, look in the classifieds. It may seem like it will take forever, but you will find something. I promise.

7. If Feasible, Work Part Time
Unemployment checks did not pay my bills in the slightest. In addition, receiving rent for your rooms and collecting unemployment may be prohibited under law. Check with your local unemployment office. In the meantime, find a part time job -- even if you are making only minimum wage -- and get some cash in your pocket. This will probably get you more than unemployment will give you anyway! Some part-time jobs have limited benefits as well. Plus, getting out of the house is a big energy booster. Having your home in jeopardy is very stressful and depressing. You NEED to get out of the house!

For some of you, health problems may prevent you from working, or you may have suffered some other unfortunate event that may not allow you to do all the steps above. At the very minimum, contact your mortage company and try to rent your rooms. If you can find a temporary place to live, you may want to consider renting your house in full. You may find a smaller or cheaper apartment or you may be able to stay with family and friends.

If all else fails, you may be faced with the choice of selling your home. Before you call a real estate agent or speak with an investor, call around and check the references of any agents or investors you consider. Not all investors are out to steal your equity or your home; many can make incredible deals with you that may even allow you to still live in your home and purchase it back, if push comes to shove. You may in fact be able to sell your home to an investor and save costly realtor fees. Be careful! Never make any decisions on the spot. Now would be a good time to pay for an attorney's advice.

I made an agreement with my mortage company and rented out my rooms. I found a job, and then kept my tenants to help "catch me up" on my other bills. Then, I just enjoyed the passive income that allowed me to pursue my other dreams. Unfortunately, to get to this point, I did spend money on services that didn't do anything I couldn't do myself -- and, in fact, they ended up not helping me at all. There are plenty of free resources and articles that you can read to help you make the right decision. Good luck. You will be fine.

Annika Smith is dedicated to teaching others how to be not only financially free, but wealthy and happy. Want to be rich? It’s easier than you think. Follow the exact path Annika took to massively improve her life by checking free information at http://cluestocash.rentrooms4cash.info.

Article Source: http://EzineArticles.com/?expert=A._Annika_Smith

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Home Foreclosures on the rise because of the Federal Reserve and Inflation Fears

2006-05-24T23:51:00.000-07:00

Home Foreclosures on the rise because of the Federal Reserve and Inflation Fears

An excellent Press release today artiulates house foreclosure rise due to Federal Reserve's raising of interest rates.

(PressMethod) - The recent rise in interest rates is contributing to a rise in property pre-foreclosures and foreclosures in Northern California and some home sellers find themselves trapped inside an interest rate bubble!

Wisdom shows us that home owners are getting squeezed by unconventional loans and are now finding that they cannot refinance in a falling market. Ed Fitch of Fitch Properties / http://www.realtydollars2u.com notes that "Sellers were sold a bag of goods by some mortgage lenders looking to make a fast buck and many sellers are now in trouble, and my fear is that it will only get worse." Negative amortization type loans, adjustable loans, interest only loans, 100% financing, 125% financing and now 50 year mortgages. It appears no thought went into the reality that interest rates do rise too! Right now if you are not in a fixed interest rate mortgage you are very likely feeling the pinch. "I am in the trenches, and it is very clear that listings are beginning to stagnate at the low end of the market, there is downward pressure there, and the low end is the driving force of the real estate market." "It can truly be said today that these are interesting times for real estate, and if the fed continues to push too far ... watch out!" Furthermore, with shrinking equity, real estate owners are finding it difficult to replenish their pocketbooks and/or payoff debts through the tool of equity lines that were the norm just a few months ago. Inflation fears continue to spook the market....
read the rest of the story here.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

files under: foreclosure investing

Is Foreclosure Investing Getting Tougher or Easier?

2006-05-23T23:20:00.000-07:00

Investing in foreclosures is getting harder due to the raising interest rates and the competition. But on the flip side, due to hardening economic condition, the number of houses going into foreclosure is also on the sharp climb.

I recently ran into this articles on Business Week which beautifully explains this.

GLOOMY PERSPECTIVES. Judging by the crowd of several hundred attending the recent Celebrity Conference seminar in Beverly Hills, there are a lot of people who want to fly like the bumble bee -- or at least make money in real estate like The Donald. Rancic's appearance was sandwiched between that of Wayne Gray, who was selling a $4,000 DVD and software package to help folks get rich in tax liens, and James "Mr. Real Estate" Smith, whose pearls of investment wisdom included this observation: "What do you think Jesus did for a living? He was a carpenter -- directly related to real estate."

Out in the real world, storm clouds are gathering on real estate's horizon. On May 10, the Federal Reserve raised its key lending rate to 5%, the highest level in five years and the sixteenth consecutive hike since June, 2004 (see BW Online, 5/18/06, "Will the Fed Go Too Far?"). The cost of a 30-year mortgage now tops 6.6%, the highest in nearly four years. Fears of continued inflation and rate increases have sent the stock market tumbling. Meanwhile, a closely-watched survey of builder attitudes conducted by the National Association of Home Builders recorded its lowest level since 1995.

The higher rates are beginning to impact home values. The median price of a house in the U.S. peaked at $227,000 in the third quarter of 2005, according to the National Association of Realtors. In this year's first quarter the median price was $218,000. "The boom is over," former Fed chief Alan Greenspan declared in a speech to bond firms in New York on May 18. "I think we can safely say that with a strong degree of confidence."

"CAUTIOUS INVESTORS." Some smart investors are starting to cash out. Houston entrepreneur Andrew Segal made a killing buying up second- and third-tier office buildings in the oil patch in the early 1990s, paying an average of $20 a square foot. He's been selling his properties recently at around $70 a square foot, mostly to out-of-state investors. Who could blame him? A lot of money has been flowing into the sector. According to the Mortgage Bankers Assn., commercial mortgage originations totaled $202 billion last year, a 48% increase over 2004.

Brock Harris, a Realtor in Los Angeles, sees changes afoot in his once-hot housing market. Gone are the days of multiple offers over the asking price and buyers agreeing to waive inspections. "What we're seeing right now is a lot of overoptimistic sellers coupled with increasingly cautious buyers," he says. "That's keeping a lot of inventory on the market." Home sales in Southern California fell 16% in April. "The pieces are in place for price reductions to begin soon." Harris says.

Some categories of real estate may fall farther than others. Take second homes and investment properties, for example. The National Association of Realtors reports that a record 40% of all homes bought last year were not a primary residence for the buyer. The trend is particularly strong among Baby Boomers -- more than a quarter of them own at least two homes. "We've seen a lot of entrepreneurs, a lot of customers trek to that market," says Kevin Kane, a senior vice-president at Fox Chase Bank in suburban Philadelphia. On the New Jersey Shore, Kane had been seeing customers buying $750,000 beachfront homes, tearing them down and building two homes on the lot. "They'd flip one and live in the other mortgage free," he says.

"MAKING A BUNDLE." That game is almost over, Kane says. For one thing, his bank has tightened lending standards, requiring at least 30% down in equity, up from just 10% a couple of years ago. Those buyers now have to come up with a larger percentage of cash for a more expensive home. Kane is predicting a decline of as much as 50% in sales of second homes. "The large scale appreciation, I don't think we're going to see it," he says.

Those still interested in investing are looking in more out-of-the-way markets. San Francisco interior decorator Marjory Graue has bought or sold six properties in the past six years, including two homes in Los Angeles and a duplex in Austin, Tex. She is still sitting on a lot in Los Angeles, even though she's already had plans drawn up for a new home. She waiting until the market cools. "Those contractors are just making a bundle," she says.

Instead Graue recently paid well under six figures for a three-bedroom, two-bath house in Marfa, Tex., an artists' community near the Mexican border. Graue figures she'll spend another $30,000 remodeling the place and then either rent it out or flip it. Her purchase price was so low, she doesn't have a mortgage. "My Dad said Rockefeller bought at 10 cents on the dollars and sold at 70 cents," she says. "I see these people keeping loans on top of loans. I'd rather buy really cheap and sell it to somebody else who'll make some money, too."

DEFY GRAVITY. We all can't be Rockefellers, or even Donald Trumps. But BusinessWeek Online will try to help you hang on to the money you've got -- and maybe even make a little more. In our online special report you can find how wealthy investors play the limited partnership game -- (see "Buying Property, Minus the Hassle") -- and read about five real estate stocks to avoid (see "Knowing REIT From Wrong"). We also feature conversations with David Lereah, chief economist for the National Association of Realtors, about his take on the current market (see "Housing Takes a Deep Breath"), and author John Talbott (see "The Growl of a Housing Bear"), whose book Sell Now tells why property owners may wish to head for the exits. And check out our slide show, "Savvy Steps to Enrich Your Home".

Bricks and mortar have been just about the best place you could have put your money over the past five years. What might the next five years hold? You don't have to fly like the bumble bee, you just have to keep your head above the ground.

Visit House Foreclosure and Investing Blog to read Forclosure Experts discuss Foreclosure Investing and Strategies on a daily basis.

Foreclosure Investing and Bird-Dogging Can Be Very Profitable

2006-05-23T22:50:00.000-07:00

Foreclosure Investing and Bird-Dogging Can Be Very Profitable

Are you anxious to get a piece of the wealth that is to be found in real estate investing? Until now, if you didn't have experience or cash it would be very unlikely that you'd be successful since real estate investing carries enormous risks and high startup costs.

New investors with a lack of knowledge have lost all of their savings from a bad investment. How can you prepare yourself to take on this lucrative market, especially with no cash? The buzzword among investors for those making a start in this field is "bird-dogging".

Don't forget it. WHAT IS 'BIRD-DOGGING'? Bird-dogging is a system which allows those who are interested in real estate investing to gain experience AND income with no risk. Bird-dogging combines the enthusiasm of the new investor with the money and experience of successful investors. Bird-dogs search out properties that are abandoned, lacking attention or are in disrepair and attempt to contact the owners about their interest in selling. The idea is to find home owners who are anxious to sell.

This may also include owners with foreclosures, divorces or a death in the family. Bird-dogs then show the property to the investor. If the investor is interested or closes the deal they pay a 'finder's' or 'referral' fee to the bird-dog for the service of locating the property.

HOW DO YOU BECOME A BIRD-DOG? Your first step would be to find a company who advertises on signs or in the newspaper that they buy houses, or take over payments. Tell them what you'd like to do and ask them which areas they'd prefer you to look at. Drive around the area and look for 'For Sale by Owner' signs, rental homes and boarded up homes. You will develop a sense of what individual investors are looking for over time.

This is the learning phase. You will pick up what experienced investors consider 'good' or 'bad' deals based on working with them. Expect your finds to be turned down at first as you learn. HOW MUCH DO BIRD-DOGS MAKE? Fees paid vary from $500 to $5000 depending on the investor or the cost of the deal.

Some businesses will also pay you a standard fee if you bring new investors into the business. You can make living as a bird-dog or save your new found wealth to invest yourself when you've mastered the art of spotting the perfect deal!

filed under: foreclosure investing

Finding Pre-Foreclosures For Investing and Profits

2006-05-22T01:33:00.000-07:00

Pre-foreclosure investing is very profitable and alot simpler than dealing with the bank after the sale has progressed far or taken over by the bank.

So I wanted to share this great article and let you see the methods by which you can find pre-foreclosure homes

Secrets to Finding Pre-Foreclosures for Short Sales
By Jarad Severe

By far, the most essential step in the short sale process is finding motivated sellers in pre-foreclosure. If you can't find motivated sellers in pre-foreclosure, then it will be very difficult to do short sales.

I will share with you a few of my secrets of finding motivated sellers and you just need to choose 3 or 4 of them to use that fit your style. The idea behind this is to maintain a constant flow of pre-foreclosure leads - potential homeowners who need your help and expertise. There are several ways in which to find motivated homeowners. Newspapers, ads, signs, courthouse, attorneys, just to name a few. See, when a homeowner is delinquent on their mortgage, a legal notice or notice of default must be sent to the homeowner to let them know that their property will be going to auction soon.

Once the legal notice has been recorded, you can go to the courthouse and research these files to find homeowners in default. These legal notices are published weekly, sometimes daily at the courthouse. This will be the first place to look. Go down to your county courthouse and ask to speak to the clerk of courts. Then ask him where they publicize the legal notices or notices of foreclosure or lis pendens. Depending on what state you live in, they may call it something different.

If you can't get any answers, then go to the recorders office. Any legal action must be recorded. You are looking for notices that show homeowners have defaulted on a loan and are now trying to collect the debt. Once you find them, make sure you don't take any of these notices or files out of the building, just ask them if you can make copies. Before you leave, ask the clerk or recorder if there is a county website or newspaper that publishes all the legal notices so you can save time by just looking them up on your computer. Most newspapers have a website with everything on it - yes even legal notices. Let me clarify one thing.

Ideally, you are trying to find homeowners who are 90 days from the auction because this gives you more time to negotiate a short sale with the bank. Every state is required to notify the public, usually by newspaper, that there will be a foreclosure auction on such and such a property anywhere between 3 to 5 weeks before the auction. So be aware that if you find legal notices in a newspaper, the auction is only 3 to 5 week away. You must act very quickly and know what you are doing. On the other hand, when you go to the courthouse or recorders office, typically the homeowner still has a few months before the auction. Real estate agents can become very useful to you. They are constantly looking at real estate, it's their job. Start networking with them. Come up with some sort of win-win.

Let them know if they ever see a property that is upside down or over-leveraged, to give you a call. If you buy the property, let them list it for you. Agents make their money from commissions. You treat them good, they will treat you good. Business cards are another great way to find pre-foreclosures. You can hand them out to everyone and let them know you buy distressed properties. Give them out to real estate agents, attorneys, friends, neighbors and so on. Anything that gets your name out there that you are looking to invest in distressed properties. Make them attractive so people want to call you back. Send them out in all your letters. Money talks for most people. So set up some sort of referral program where you give them money if they know of anyone who may need your help and you buy their home.

I don't know how many people I've talked to just because of a small finders fee. Most of the time it's friends and neighbors of the people you are doing the short sale with. They are so pleased with what you've done with them, they want you to help their friends or family, plus they get a finders fee. You could have something like this - “this card is worth $1000 to whomever finds me a property!” Attorneys work well because a huge number of people are filing for divorce or bankruptcy. If you know any attorneys that specialize in these areas, work with them. They can become one of your greatest assets. Other methods include flyers, magnets, newspaper ads, and signs you see on the side of the road. Try all these ways to find pre-foreclosure leads and then focus on the ones that bring you the best results.

Jarad Severe is a leading authority and expert in Foreclosures. He is President and CEO of Foreclosures and Flippers Inc. Jarad can be reached by email at: info@foreclosuresandflippers.com or you can visit his website at: http://www.foreclosuresandflippers.com to receive more information on foreclosures, short sales and more. Article Source: http://EzineArticles.com/?expert=Jarad_Severe

Use This Lease Option Method Alternative to Buying a Foreclosure Property

2006-05-21T17:21:00.000-07:00

Foreclosure Investing with a Lease Option Twist

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!

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 and if you put together a fair offer for both parties you may get the property at a really good price.

While you are negotiating with the seller, find out just what they need to get rid of the property and go from there.

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.

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.

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.

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.

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.

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.

You don't want another investor in there trying to profit off of your deal.

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.

Happy Investing

filed under: foreclosure investing

Hazards and Benefits of Flipping Foreclosures Properties For a Living

2006-05-21T16:23:00.000-07:00

Hazards and Benefits of Flipping Foreclosure Properties For a Living!

I can't tell you the number of times I've repeated this to people who ask for my opinion, but YES, there is money to be made in Flipping Foreclosure if you treat it seriously and as a business.

What I mean is that you need to put time and effort into finding the motivated sellers, decent location, motivated buyers, good financing, motivated real estate agents etc. etc.

What is foreclosure property flipping?
It is selling the rights to an escrow for a property you've tied up. You don't actually own it, but you are assigning the rights to someone else and letting them close the deal*
(*Note: Make sure you check the legalities and rules in your particular state and always make full dislosure in the contract as to your intentions)

Here's how the process goes down.
Let's assume you're just doing a flip and not taking possession of the property.

First thing you need to do is find a property. A good one that's below market, in a decent location and perhaps one that's in a good school district.

You then negotiate a fair deal with the seller, tie down the foreclosure sale in escrow or title and immediately advertise the house for sale via the best sources outlined in my earlier blog postings.

Once you find a suitable buyer, you negotiate a settlement and exit out of contract and assign the rights to the new buyer.

Here are some Hazards and Benefits of Foreclosure Flipping.

Hazards: Don't fall in love with the house unless you intend to live in it. Remember, foreclosure flipping is a business and the last thing you want to do is buy and hold these. I've been to mansions where I forgot the profit potential and wanted to live in the house soooooo bad! Don't do this. You're there to analyze and tie down the house for flipping.

Hazard: Don't hate the house. Who cares what the house looks like and what area it's located in. Look at the comps, the population density, active vs. sold real estate market in the area, the foreclosure rates, financing on the house etc. Let the market guide you and not the appearance of the house.

Hazard: Always have an exit clause. Don't ever tie down a house unless you know you have a way to exit out of it. In most states, financing is a pre-printed exit clause on every standard purchase contract. You don't ever want to get into a foreclosure transaction and not be able to get out of it (especially if you find information that's not favorable to this deal)

Hazard: You Snooze You Lose. Trust me on this. The opposite of be careful and be pateint applies here as well. I've lost more deals because of my slow progression on some hot foreclosure lists and to this day, I am angry by the profits I've left in the table because I just didn't move fast enough. Put in a good exit clause on your contracts and move at the speed of light on the hot foreclosure deals.

Benefit: It is extremely profitable. You can make as little as $3,000 on a small deal to as high as $200,000 or more on the bigger deals without EVER owning the foreclosure piece.

Benefit: It is zero risk. Because you are not actually buying and holding the property, you have no risk and no out of pocket. You find it, you sell it and you profit.

Benefit: It is very fast. You can research, locate, tie up and flip a foreclosure house in less than 48 hours. I've done in as little as 6 hours and made $10,000 in the process. This is not the norm but after some experience and the right knowledge you can duplicate this.

Benefit: You can make FULL time money on part time work! And it doesn't get any better than that.

Happy investing :)

filed under: foreclosure investing

Revealing Foreclosure Story on ABC Television- Watch the video

2006-05-18T20:34:00.000-07:00

Foreclosure rates on the rise...

Foreclosure Story (actually a short video on foreclosures) on ABC Television reveals the interesting uptrend in the foreclosures which is directly tied into the adjustable rates.

Sometimes I think to myself, adjustable mortgage rates are plain stupid. But then if you are an investor, taking advantage of low rates, especially when investing in a foreclosure property for the short term, is the best way to go.

Take a look at the foreclosure video on ABC by clicking here

filed under: foreclosure investing

ARMs Starting To Hurt... Causing Increases To House Foreclosures

2006-05-16T02:50:00.000-07:00

House Foreclosures on the rise due to increase in ARM rates

I read an article today at www.rockymountainnews.com titles "Those Arms Starting To Hurt"
It goes into many of the factors I've been discussing which contribute to sharp increases in home foreclosure rates in the past few month.

Here is a snippet of the article:

"Thousands of Denver homeowners gambled on adjustable rate mortgage loans three years ago.

The higher payments are expected to cost many homeowners in the metro area tens of millions of dollars in higher mortgage payments and drive up the already near-record number of foreclosures

In Colorado, 28.5 percent of homeowners have 5 percent or less equity in their homes, and 47 percent have 15 percent or less equity, according to a report released earlier this year by Christopher L. Cagan, director of research and analytics at First American Real Estate Solutions in Santa Ana, Calif.

Only Tennessee homeowners, on average, have less equity in their homes, the report said.
Last year, more than 14,000 Denver-area homeowners defaulted on mortgages.

Increasingly, people who locked in three-year ARMs with rates in the 4 percent range are finding loan rates rising by 50 percent or more.

Jalowsky estimates that 75 percent to 80 percent of homeowners defaulting on their mortgages in the Denver area took out ARMs in recent years.

"It is absolutely mortgage roulette," Bartlett said. When you combine ARMs, 100 percent financing, negative amortization, seller-paid closing costs, rising rates, falling prices, rising inventory and a continuing sluggish Denver economy, you have a recipe for 1987 to 1990 revisited."

Sometimes the rates change every month.

If you only make the minimum payment, the interest you don't pay is added to your loan amount. Now, he said, he is getting phone calls from people who want to refinance out of option ARMs into fixed-rate mortgages.

Now, people are wondering why they didn't lock in fixed rates at 40-year lows around 5.5 percent.

Cagan also doesn't think the hangover from people overindulging in low-rate ARMs will bring the economy to its knees.

The question he hears: "Do I swap my low rates for a 6.75 percent, fixed-rate loan today and pony up the extra dollars, or do I hold on to the low rate until the last minute, knowing that there's a good chance that rates will be even higher when the rates reset?"

Filed under: foreclosure investing

New Google Software Shows Interesting House Foreclosure Trends

2006-05-14T16:49:00.000-07:00

New Google Software Shows Interesting House Foreclosure Trends

Google recently unvailed an aboslute awesome piece of software that just blew me away.
What Google has does, in essence, is to open up their database and show trends for any give keyword.

So I wanted to show you what I uncovered when I searched for Home Foreclosures.

I plugged in the word "foreclusre" and I see this graph. And the graph pops up...

Here's the direct link:
http://www.google.com/trends?q=foreclosure&ctab=0&amp;geo=all&date=all

I see a downwards trend toward the end of 2005 and a sharp spike in the beginning part of 2006. The same trend is also visible for end of 2004 and beginning of 2005.

A sharp decline in search for "foreclosure" followed by an increase.

You can repeat this with many other words or word combinations.
I tried "foreclosure Investing" , "Foreclosure Help" and "Stop Foreclosure" and noticed a sharp decline for stop decline with the last word.

Foreclosure investing returned no results oddly enough!

I also ran some stats on "House Foreclosure" and want to show you some interesting stats and graphs that pop up for the term "House Foreclosure"

Note the cities popping up for House Foreclosure.

Not sure if you can use any of this data but you can use Google Trends to mine a ton of Real Estate and Foreclosure as well as all other data.

Good luck and happy investing

filed under: Foreclosure investing

How To Find Motivated Foreclosure Home Sellers

2006-05-12T23:47:00.000-07:00

How To Find Motivated Foreclosure Home Sellers

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.

Filed Under: Foreclosure Investing

Foreclosure House Listings on Yahoo!

2006-05-11T11:05:00.000-07:00

Foreclosure House Listings on Yahoo.com

One of the most important assets on the internet is the major search engines.
This is primarily what I use to find Foreclosure Homes and Pre Foreclosure listings.

More importantly, the listings are free albeit not as complete as the paid services.
In my earlier blog posts, I covered how to use Craigslist.com to find pre-foreclosure homes.

Well, Yahoo is another cool source.
Simply goto http://realestate.yahoo.com/re/buying/

In the search box, input the information of the are you want to find a foreclosed home in, then search. There are small buttons labeled "foreclosures" - A word of warning. That basically prompts you to sign up for a paid service, however, they do offer a free trial period.

This is just one of about a dozen resources available online to help you uncover foreclosed houses.

Step One: Do your research and find prospective homes.
Step Two: Check the approximate values with Zillow.com
Step Three: Do a drive by
Step Four: Place your offer or flip it to an investor

Go slow on your first 2 or 3 transactions. Foreclosure investing can be very tricky if you are not careful.

Good Luck and Happy Investin

Filed under: foreclosure investing

How I found 9 free foreclosure listings

2006-05-09T23:19:00.000-07:00

How I found 9 Free Foreclosure Listings in less than 10 minutes

Frankly, I don't think you really need any online paid sources to get some listing.
Alot of my readers ask, should I subscribe to a list service. And my answer is NO.

But let me elaborate.
In the beginning, you really only need to do some basic online searches to get the best results.

However, as you get busy, you might consider some online foreclosure listing services.

Here's a quick tip.
Go to: http://www.homesales.gov/homesales/mainAction.do
This is US Government's official online website for proprty listings.

Click on the desired state.
Pick the city and pops several properties that are either seized, foreclosed, available for sale etc.

Good luck and happy investing.

files under: foreclosure investing

Foreclosure Investing Conference Calls

2006-05-08T09:23:00.000-07:00

Foreclosure Investing Conference Call

Just wanted to give you information on 2 upcoming foreclosure investing conference calls.
Both of these calls are free, however, I'm sure they do sell some type of foreclosure course.

You don't have to buy anything. Just listen and see if you can pick up some valuable info.

Here is the information:
Date: Tuesday, May 9, 2006
Time: 9:00 PM ET
Phone: (212) 461-5800
PIN: 3301

and
Date: Thursday, May 11, 2006
Time: 9:00 PM ET
Phone: (212) 461-5860
PIN: 3301

One of the topics they'll be covering of most interest to me is:
"Where can you find the easiest money in the real estate investing business?"

Enjoy the call(s) if you make decide to call in.

filed under: foreclosure investing

Invest in Foreclosures in Following Cities

2006-04-29T22:20:00.000-07:00

Foreclosure Investing in appreciating areas

I was reading a very well researched article in MSN Money by Liz Pulliam Weston where she delved into the cities where investing in foreclosures might make more sense.

She details how certain factors including immigration rates effect foreclosure rates as well as housing market (i.e. housing inventory)

According to Ms. Weston, the following areas have the highest density of immigrant and offer great investment opportunity:

"...These so-called "established gateway cities" also have the largest populations of settled immigrants, and include:

* New York (where, in 2000, 24.4% of the population was foreign-born)
* Chicago (16%)
* Miami (40.2%)
* Los Angeles (30.9%)
* San Francisco (27%)
* San Diego (21.5%)

Of that group, only Chicago has failed to exceed the national rate of home-price appreciation in the past five years. Home prices have doubled in Los Angeles, San Diego and Miami, according to the Office of Federal Housing Enterprise Oversight, and are up 77% in New York and 65% in San Francisco. Prices in the Windy City are up 45%, compared to 50% growth nationwide."

Keep in mind that due to the high density, demand for housing and lack of inventory of reasonably priced homes in these area, foreclosure homes will also be more difficult to locate.

So it's a double edged sword.

Ms. Weston goes on to quote another source and conclude:

"Still, Painter found differences between the 1990 and 2000 Census records that indicate 14 cities are what he calls "emerging gateway cities" that are becoming the first or final destination of growing numbers of immigrants. These are:

* Atlanta
* Boston
* Dallas
* Denver
* Houston
* Las Vegas
* Orlando
* Philadelphia
* Phoenix
* Sacramento
* Seattle
* Tampa
* Washington, D.C./Baltimore
* West Palm Beach, Fla.

Residents in those cities could see home values start to gain more rapidly as their immigrant populations rise, Painter said. (The new gateways also could be particularly vulnerable if the United States should, for whatever reason, clamp down on the number of people entering the country.)"

filed under: foreclosure investing

Foreclosure Rates Increase by 72% in First Quarter

2006-04-26T00:31:00.000-07:00

Foreclosure Rates Increase by 72% in First Quarter

According to Realty Trac, lenders started foreclosing on 1 out of 356 homes in the US!
This translates to about a 72% increase in foreclosures in the first quarter alone.

Foreclosures are tracked when they hit 90 days delinquent. This means a large number of the homeowners are starting to feel the crunch of increasing gasoline costs, bills and the increase in the adjustables rates resulting from Federal Reserve's continued rasing of the Fed Rates.

This is going to result in an abundance of foreclosed homes flooding the marketplace in the form of increased home listings by real estate agents as well as increased REO inventory by the banks.

Get a hold of a good lender, get yourself pre-approved for a loan and start researching the markets using many free foreclosure lists discussed in my blog.

But most importantly, don't get too excited and be careful when investing. The last thing you want to do is end up on the foreclosure lists yourself!

Good luck and happy investing.

filed under: foreclosure investing

Quickest Way To Make Money With Foreclosure Investing

2006-04-25T00:21:00.000-07:00

Quickest Way To Make Money With Foreclosure Investing

I get asked this all the time and my answer is there is not quick way with foreclosure investing unless you want to lose your shirt!

Having said that, I'll give you guys and gals some of my methods of making money with foreclosures.

1- Recently I've had great success with finding deals and turning them into financing loans instead of a foreclores deal. This generates some referral fees to me ranging from $2,000 to $5,000 - More and more people know that they have equity in their homes and they won't sell it for the kind of prices I want to pay them. So instead, I'll see if they need a loan and chances are the do. So I Joint Venture a transaction and put the homeowner in touch with a loan agent and make a quick finder's fee.

2- I flip the deal in escrow/title before even closing it. This is good for short term profits but not so good for long term money. I average about $10K on a small house here in Los Angeles. That's not even owning the house! Please Note: depending on your state, you must place the right kinds of disclosures on the contract so to make the deal legal and correct. Otherwise, the seller/homeowner can back out of the deal.

3- I act as a bird-dog or finder of foreclosed proprties. I often come across deals that make sense on paper, but I have no interest in pursuing. For example commercial real estate too far from where I live. Or land that's not developed. For these, I have a long list of people who'll pay me a finder's fee ranging from $2,000 to $30,000 depending on the size and profit potential of the deal.

So you see, as long as you are looking and searching and talking to people, you'll come across deals that you can profit from.

Next week, I'll cover how to make money by stopping someone's house from foreclsoure.
Therefore, you stop the foreclosure and make money doing it.

files under: foreclosure investing

Foreclosure Acreage on Sale on eBay!

2006-04-20T22:37:00.000-07:00

Foreclosure Acreage on Sale on eBay!

I was searching my favorite auction site and one of my top resources for searching for foreclosed homes - also known as eBay - and came across an interesting acreage foreclosure listing.

It is a 1.32 acre site in Arizona which was foreclosed by the Government for non payment of taxes.

Here's a snippet from the auction page:

"This land was foreclosed on by the government for non-payment of back taxes! We traveled to Arizona and bought this land at dirt cheap prices and we're passing the savings on to you!"

You can probably access this auction for about 2 more weeks directly from eBay. After that, they remove any references. Here is the shortened link to the eBay Foreclosure Auction:
http://tinyurl.com/ny2w8

I would recommed some due diligence and reading of the fine print. At first, I thought this was an auction for purchase of the foreclosed acreage. But looking closely, I see it's only for the downpayment. The lucky buyer will still be responsible for the mortgage on this lot.

Who knows. This could be a great deal. I have no clue and have no interest in researching it. But as I always say, do your research.

Happy investing.

Filed under: Foreclosure Inevesting

Foreclosure Property Research Just Got a Lot More Fun

2006-04-17T01:08:00.000-07:00

Foreclosure Research

I was checking property values using my favorite property estimation tool, Zillow.com, when I noticed something very strange.

I was actually looking right at the house!
The actual house.

Now, that's ingenious. Being able to see what the foreclosure home looks like from a "bird's eye view" is just awesome.

It uses Microsoft's Virtual Earth to get closer to the potential investment property than anything I've seen.

All you have to do is to click on the house and click "see home details"

This cool research tool anables you to see the condition of the house and the neighborhood.
Especially comes in handy when looking for a property in a different state when you'll be investing as an absentee buyer/investor.

Give it a try. It's free!
You get an estimate of the value, get a map, directions to the home and a close up picture.

filed under: foreclosure research

Foreclosure Property Forums are Where You'll Find Answers

2006-04-14T12:39:00.000-07:00

Foreclosure Property Forums are Where You'll Find Answers

Some of the best places to find answers to any type of question on investing on Foreclosure Homes or even saving your house from foreclosure is the Forums.

Forums are like a gathering spot for people who ask and give opinion and advise on various topics.

I've found some foreclosure forums to be full of solid information you can't find anywhere else.

Take this one for example:
http://forums.biggerpockets.com/
It has information on Rehabbing, Real Estate investing, Investor Psychology, Commercial Property, Land Investments and Much more.

You can easily spend hours in this Real Estate Forum and search for your answers.

Then there is this one more dealing with the laws:
http://www.expertlaw.com/forums/forum-135.html

This one deals more with Hud Foreclosures and Government Properties:
http://www.easyhud.com/phpBB2/index.php

This foreclosure forum article on About.com tells it all:
http://homebuying.about.com/b/a/019180.htm

And DMOZ directory is probably one of the best places to find all sorts of listings relating to foreclosure investing and proeprties.
http://tinyurl.com/qxzlr

Just do a Google Search for:
"Foreclosure Investing Forum"
"Foreclosure Forum"
"Bank Foreclosure Forum"
"Foreclosure Investing Forums"
"Foreclosure Property Forum"
"Foreclousre Real Estate Forum"
"Foreclosure Bulleting Boards"
etc.

You get the idea.
Anyhow, good luck and let me know if I can help.

filed under: foreclosure investing tips

Foreclosures vs. Pre-foreclosures vs. Fixer Uppers

2006-04-11T09:56:00.000-07:00

Foreclosures vs. Pre-foreclosures vs. Fixer Uppers

I am often asked if foreclosures is the only way or the best way of investing.
The answer is NO.

Let me explain the differences here.
These are MY definitions and only for the purposes of this blog. By no means am I giving you the definitive foreclosure descriptions here.

Foreclosure refers to a house that has already been reverted to the lender and is being listed anew by the bank. I also refer to this as REO property (Real Estate Owned) which implies property is owned and managed by the bank.

Pre-foreclosure refers to a house that's in default and is behind in payments. It could be in various stages of being foreclosured upon.

Fixer uppers also known as Handy Man Specials.

I work and search out all kinds of properties including the 3 stated above.
You need to find a real estate bargain where you can and in competitive housing markets, one can't be too picky as to the source of the "deal"

By far, the house that's already been foreclosed upon and managed by the Bank (REO) is the hardest area to focus on if you are limited on cash or experience. Especially in a hot Real Estate Market. For an experiences investor, this is a prime area as he/she can negotiate directly with the bank/seller and get some good deals from them.

Pre-foreclosures are where the home owner is behind on his payments. This is a very competitive marketplace as you'll find alot of people chasing after these type of properties. We'll go into how you can differntiate yourself and how you can get into these deals where others will get turned down in an upcoming blog.

Fixer-uppers are another area where a new investor will find some good deals. One thing you have to be careful of is the structural integrity of the house. Do your homework and seek out professional inspection services to make sure you are not getting a lemon.

I'll cover each of these individually in future blog postings.
You need to keep an eye on any bargain in any real estate market and not limit yourself to just foreclosures.

Good luck and happy investing

filed under: foreclosure investing

What's The Best Method of Proespecting for Foreclosure Homes?

2006-04-08T07:49:00.000-07:00

Foreclosure Prospecting

One of the readers asked me the best way I knew of for prospecting and finding of foreclosure homes.

As you know, I am a proponent of free services and in fact in one of my earlier posts in this blog, I shoed how I used a free service called Craigslist to find a beach front foreclosure. I also use Yahoo Real Estate to do some prelimnary investigating.

Believe or not, the newspapers and Real Estate Agents remain and have always been my best sources of finding below market homes as well as pre-foreclosed homes!

The fact of the matter is, there are about a dozen solid ways you can conduct your foreclosure treasure hunt and have a prospective list ready to go within 48 hours and be in escrow within 7 days. I'll list a few here:

1- Real Estate Agents
2- Local Foreclosure Hot Sheets
3- Craigslist Real Estate Listing
4- Yahoo Real Estate
5- FHA and VA Foreclosed home website
6- News Papers
7- Free Online Foreclosure Listings
8- County Records Notice of Default and Notice of Sale Listings
9- Local Bank's REO listing department

and many more...
Word of caution. If you are going to wotk with a foreclosure agent (a Real Estate Agent specializing in foreclosures) be sure to have all your ducks in a rowe and have the financing in place or at least a pre-qual letter from the lender stating that you've been pre-approved for a loan.

Foreclosre market is very competetive and you want to be ready when the deal presents itself.

Good luck and happy investing

filed under: foreclosure investing

Foreclosure Rates are Expected To Hit All Time High

2006-04-06T00:43:00.000-07:00

Foreclosure Investing

Reading the pulse of the market, I am getting the sense that I am not alone in the Foreclosure Doomsday theory.

I have been stating that a large (VERY LARGE) of Foreclosed Homes are about to hit the market.

Evidence and stats are mounting as Stated are reporting unusually high forcloures and deliquencies.

A great article by Tom Jandt goes into details of why this is closer to reality than most think.
Here is a snippet of his article

"I believe America will have the largest foreclosure rate in history over the next 10 years and the real estate crash in the United States will make the stock market "Dotcom Crash" of 2000-2001 look like a blip on the screen. Ironically, I believe this will make the stock market go back up and even make all time highs."

So the wise investor should get ready and look for the best foreclosed property in the coming months.

filed under: foreclosure investing

Amazing Story Of My Friend's House in Foreclosure

2006-04-03T21:31:00.000-07:00

An Amazing Foreclosure Story

OK. This blew my mind. I was speaking with my friend and the conversation turned to his home.

A few short years ago, he purchased a HUD home for $117,000 in Palmdale Lancaster Area of Los Angeles. He barely made the payments and got by...

His house was recently appraised for $430,000 - WOW
This guy never made more than $2000 a month in his life and now is sitting on over $300,000 in equity in his house.

Or that's what I thought.
His house is in foreclosure and the bank has given him 90 day notice!
Unreal.

He has borrowed his way to the top.. except this top is the bottom.
How can someone blow through $300,000 in equity and end up in foreclosure proceedings?

By borrowing and refinancing the house over and over.
And what do you do with all that money? Pay your mortagage payments and buy lots of BIG toys.... And at the end, he ended up in foreclosure.

One of the biggest reasons for being in foreclosure is the greed and refinacing of the fast equity so many people have enjoyed over the last few years.

My advise to him was to try to restructure the loan with the bank and get some time to get his life in order. His loans now exceed his property value and a foreclosure will be the only option left for the lien holders.

There is alot to be learned from this story.

foreclosure investing

Foreclosure Invstors Meet Donald Trump's Wisdom

2006-03-31T21:12:00.000-08:00

Foreclosure Investing and Donald Trump Wisdom

The Donald gets paid 1.5 Millions Dollars to give speaches in front of 50,000 crowd about Foreclousre and Real Estate Investing.

As I had mentioned in one of my earlier blog posts, The Learning Annex has apparently discovered a niche in this sector of the Foreclosure Investor crowd.

Learning Annex stated in one of their press releases "Real Estate in San Francisco is now the drug of choice." I have come to see more and more of this as I scout and look for pre-foreclosed properties. I encounter people from every walk of life... from young college age kids to senior citizens looking for below market homes and foreclosures.

Not only this is better than the stock market (in my humble opinion) if all goes wrong, you can always live in a house!

The success of this expo speaks volume of the hightened interest in Foreclosure Investing in the US and specifically in California. So the sooner you educate yourself, the sooner you'll be in the position to spot a good deal.

My main advise is and will always be, Do NOT rush into a deal and don't allow the hype and excitement of the moment get the better of you. Foreclosure and Real Estate investing is the most profitable business I've ever been involved in, however, it is also one that can be very costly if you don't do your homework.

And in closing, I'll leave you with some words of wisdom from Mr. Trump himself!
"Be paranoid, get even and always, always get a prenuptial agreement"

filed under: foreclosure investing

Foreclosures Increase as Adjustable Mortgages Raise

2006-03-31T08:51:00.000-08:00

Foreclosure Rates Increase as Adjustable become fully indexed

One of the dirty little secrets lenders don't like to tell borrowers is that those low adjustables and negative arm mortgages will become fully indexed sooner or later and payments will increase, sometimes substantially!

In fact, here in California, Mortgage Bankers can not allow the principal balance on a mortgage to increase beyond 110% of the original borrowed amount. What this means is that if you have Negative Adjustable (or sometimes referred to as a Deferred Interest Payment) and if the interest rates increase substantially, like they Federal Reserve has been doing, then the bank has no choice but to increase your mortgage payment in order to make sure you don't owe more than 110% of the original loan amount.

So in the real life situation, the "Low Mortgage Payments" you started with have been increased beyond your affordibility level because the Feds raised the rates and the banks had to follow suit.

Fed raised interest rates in order to fend off inflation.
The nasty result of that is the substantial increase in Foreclosures.

According to Foreclosures.com President, Alexis McGee, "In San Diego County 50% of mortgages issued between 2003 and 2005 were either interest only, or so-called option adjustable rate mortgages with start rates as low as 1%. According to Dr. Christopher Cagan of First American Real Estate Solutions, when these loans convert to full amortization, the payment shock could be in excess of 300%. This is bound to lead to financial distress in many, many households."

Lessons to be learned here?
1- Foreclosure markets will be on a sharp increase in the coming months
2- Avoid Negatives arms unless you are a short term investor

filed under: Foreclosure Investing

Structure The Foreclosure Sales Leaseback Or you Might End up in Trouble

2006-03-29T21:14:00.000-08:00

Structuring of Sales-Leaseback in A Foreclosure Investment

One of the more effective methods I've found when I locate a good deal is to let the seller stay in the house!

Now you might ask, how does this help me?
Well. It is really simple.

Most foreclosure investors want the house now. They want to buy it, fix it up and resell it for profit.

The owner has a dilemma. He has nowhere to move to. His credit is shot and he will have a hard time renting a new house.

Now imagine for a minute the following scenario.
What if...
You buy the house.
Take a very low adjustable rate.
Let the owner live in the house.
He pays the mortgage, taxes and insurance.
His current rent payments will most likely be lower than what he was paying before.
After 12 months, you sell the house and split the profits with the owner.

You have a much better chance of getting a foreclosure house under this structure rather than trying to be like everybody else pounding on the door.

You need to approach people with their interest at heart if you want to succeed in foreclosure invetments.
Trying to "steal" a house while someone is in trouble is unethical and also can land you in trouble if not structured properly.

I strongly suggest to seek the advise and help of a good attorney when structuring a sale-leasback especially if the owner of the pre-foreclosure house is currently in bankruptcy.

Courts are very carefull these days in making sure people are not trying to avoid foreclosure proceedings by structuring "creative financing" deals.

These creative foreclosure sale-leasbacks can have serious ramifications if they are not structured properly.

filed under: foreclosure investment

Questions Every Foreclosure and Real Estate Investor Should Ask

2006-03-27T22:42:00.000-08:00

Quesions Every Foreclosure and Real Estate Investor Should Ask

"Real Estate Investor Checklist" by Robert Irwin is a unique book which helps new foreclosure and home investor wade throught the challenges when buying a home.

This is a very interesting format and covers just about everything you want to know before getting into that foreclosure home!

He does a great job of covering locating of the best investment property and also does a wonderful treatment of cutting transactional costs involved in buying and selling.

This is defintely a must read for beginner foreclosure investor.
There are a couple of errors in this book which I am sure will get corrected soon.

My recommendation is to get it, read it and apply it!
Book is available on Amazon.com, your local book store and at the Library (for FREE!)

filed under: foreclosure investing

Questions Every Foreclosure and Real Estate Investor Should Ask

2006-03-27T22:26:00.000-08:00

Real Estate Foreclosures: Four Tips for Investing

2006-03-26T16:49:00.000-08:00

Real Estate Foreclosures: Four Tips for Investing

I was reading a great article on Real Estate Foreclosures and Investing tips by David Finkel is an ex-Olympic level athlete turned real estate millionaire and one of the leading investing experts in the nation.

His tips on What to say when you knock on the sellers' door are excellent and I definitely recommend this article to anyone serious about Foreclosure Investing.

Here is the link: http://www.creonline.com/articles/art-229.html

Some of the topics he covers are:

Tip one: Banks do not want to foreclose on real estate
Tip two: Foreclosure tidbits investors don't know
Tip three: Other ways property owners default
Tip four: Don't be afraid to knock on doors

filed under: foreclosure investing

"Have an adjustable-rate mortgage? Brace for an adjustment"

2006-03-26T00:15:00.000-08:00

Foreclosure rates might jump in the coming months due to upcoming adjustments in the adjustable mortgage rates.

Michele Derus of MILWAUKEE JOURNAL SENTINEL reports:

"About 25 percent of outstanding home mortgages carry adjustable interest rates due to adjust upward soon, said Douglas Duncan, chief economist for the Mortgage Bankers Association in Washington, D.C."

I anticipate the rates and economy to play a big part in the rise of foreclosure rates.

filed under: foreclosure investing

How to Find Good Pre Foreclosure Properties Using Craigslist

2006-03-25T19:25:00.000-08:00

How to Find Good Pre Foreclosure Properties Using Craigslist

As some of you might recall, my attempt at showing you How To Find Foreclosed Properties Using Craigslist video was a failure.

I’ve figured out what needs to be done and the video will be re-done using different technology. But in the meanwhile, several readers asked questions and needed some more guidance.

Here is a step by step procedure as to how I find foreclosed or preforeclosed properties for free using a free service called Craigslist.org

Goto www.craigslist.org

1. On the right side of the screen, choose the major city nearest you
2. Under “Housing” section choose Real Estate for Sale
3. Under “keyword” box, enter “foreclosure” or “preforeclosure” or pre foreclosure”

I am looking for a beach front foreclosure property so I will be placing the following strings in the search box in order:

* Beach front foreclosure
* Beachfront foreclosure
* Beach foreclosure
* Beach-front foreclosure
* Beach front foreclosed property
* Beach front pre foreclosure
* And if all else fails, simply “beach front”

My wife has been asking to move near the ocean and I will be spending the next 2 months searching for a below market property. In fact, I will add “below market beach” to my list above.

This will take about 10 minutes. From the results, I will scroll through the listings and pick out 10 to 20 properties that look promising. I pay close attention to the wording and description and in particular, any hint of urgency to sell the house.

I will jot down the results in an excel spreadsheet with the following fields:
1- Address
2- Phone number
3- Square footage
4- Price
5- FSBO* or Broker
6- Notes
7- Zestimate*** FSBO denotes For Sale By Owner
** Zestimate denotes the approximate value derived by a free online home evaluation service www.zillow.com . I wrote a blog on zillow.com HERE

From the information gathered, I will sort based on relevance, value, my interest or any other factor which will make it easier to evaluate this search.

I’ll contact the sellers or brokers and ask them questions about the foreclosure property.
1- Condition of the property
2- At what stage of the foreclosure process are they in
3- Any assumable financing
4- Any owner financing (i.e. will the owner carry back a note)
5- How long before the house reverts back to the bank
6- How many bedrooms and bathrooms
7- Total amount of liens and late charges on the loan
8- How long on the market

Every question will be in a conversational mode and I won’t be bombarding the homeowner with questions.

It is important to be considerate of the homeowner. If he is in foreclosure proceedings, chances are he is experiencing a lot of stress in his life and you must be conscious of their feelings. (This is simply good manners)

Ok back to the search…
My search for the following list turned up nothing in the Los Angeles area.

* Beach front foreclosure
* Beachfront foreclosure
* Beach foreclosure
* Beach-front foreclosure
* Beach front foreclosed property
* Beach front pre foreclosure

I will repeat the search for the same list in the San Diego and other locations till I find something that appeals to me.

In the meanwhile, I came across the following property with a price reduction and it looks very interesting. It is not a foreclosure and it doesn’t seem to be below market, but I have a friend who’s been looking for a beachfront house in Malibu and this might be perfect for him!

Which reminds me to blog about 4 ways to make money with a foreclosed property even if you don’t buy it!!!

I think I’ll blog it next week. You guys and gals will love it.

Ok lets wrap this up because it is getting a little long.
You found several properties. Put them in a spreadsheet. Got their Zestimates. Called the owners/brokers and now you have some facts and information to proceed.

Craigslist is one of the best sources for free property and foreclosed home listings.
Anyone can list there and it doesn’t cost anything. So be prepared to weed through a lot of garbage listings before you find the few good ones.

Good luck and feel free to send in your questions.

Ed

filed under: foreclsoure property research

Michigan Foreclosures Double In 2 1/2 Years

2006-03-23T12:43:00.000-08:00

Michigan Foreclosure doubles in 2 1/2 years!

I came across this news article by API reporting as reported on Mercury News on Michigan Foreclosure rates:

"The number of homes undergoing foreclosure in Michigan doubled from February 2004 to February 2006 to a rate that is 2 1/2 times the nation's, according to a group that monitors foreclosures"

But then something more AMAZING popped up at me and I hope you'll see my point in a minute. The news article not only talks about Michigan Foreclosures and Foreclosure Listings but then it goes to state the fact the lenders lose up to $50,000 on the resale of each foreclosed property!

"Lenders lose up to $50,000 per foreclosed house as they sell them off at below-market prices. That can lower property values in neighborhoods, drive other residents away and hurt property tax collections for local governments"

What this is indicating is a rapid rise in House Foreclosure rates and if you position yourself properly, you can pick up some gems out there.

I know of people who travel around the country and attend foreclosure auctions and only pick up the select few foreclosed and distressed properties.

filed under: foreclosure investing

Foreclosure rates increasing in many U.S. housing markets

2006-03-22T22:06:00.000-08:00

Foreclosure rates increasing in many U.S. housing markets

Foreclosure listing services are reporting increased foreclosed numbers. And again, the wise foreclosure investor will be ready to monetize on this opportunity. I've quoted a little of the article here but suggest reading the entire article found in the source section below.

"RealtyTrac, a California-based firm that tracks the state of the national housing market, says default notices to bank ownership, i.e., foreclosures, rose 45 percent in January from the same period a year earlier. There was one new foreclosure for every 1,117 U.S. homes."

The report goes on to say...

"RealtyTrac said, although the number of foreclosures is low from a historical perspective, it has been rising steadily in the past year. With the rate of appreciation dropping and interest rates rising, a number of economists and industry observers expect the pace of foreclosures to speed up this year.

The highest foreclosure rates, according to MSN Real Estate, on a per capita basis are Georgia, Nevada and Colorado. In Georgia, the rate leaped 88 percent in January from the previous year. The publication also reported Georgia was No. 5 for the total number of foreclosures."
source: http://www.rockrivertimes.com/index.pl?cmd=viewstory&cat=2&id=12746

filed under: foreclosure investing

Indiana Hit Record Foreclosure Numbers

2006-03-22T21:54:00.000-08:00

Indiana Hits Record Foreclosure Numbers

"Indiana’s home foreclosure rate hit a record high in the last three months of 2005, and the state has led the nation in its rate of foreclosures since July 2004.

The Indianapolis Star reported that in the last quarter of 2005, more than 7,000 Indiana homeowners faced foreclosures. Why? The Star story attributed the boom in going broke to layoffs, personal bankruptcies and people taking lower-wage jobs as higher-wage work disappears. To that list, one could add that too many people don’t leave any slack in their budgets or build up the kind of savings they need to carry them through at least a few jobless weeks."
source: http://www.fortwayne.com/mld/newssentinel/14159468.htm

The more research I do, the more convinced I am that a wave of foreclosures is not far off.
This will be one of the greatest opportunities for Foreclosure Investors as the houses will be bought and sold quickly.

You see, the demand for homes remains high and as long as mortgage rates remain low, demand will be strong. But make sure you are buying in areas where (1) density is high (2) unemployment is low (3) inventory is low and (4) Mortgage money is in large supply.

filed under: foreclosure investing

HUD Foreclosure Homes for Sale

2006-03-21T11:43:00.000-08:00

Hud Foreclosure Homes for Sale

This is a direct link to HUD's government site.
It's free and you can often find small gems in there...
http://www.hud.gov/homes/homesforsale.cfm

Now go find a Home ;)

filed under: Hud Foreclosure Homes for Sale

My Foreclosure Research Using Google Video a Failure

2006-03-21T11:16:00.000-08:00

Secret Tip: Foreclosure Research Video Using CraigsList

I tried uploading my screen-cast video on GoogleVideo and it came out VERY blurry.
I'm not sure what the problem is and how to solve it but I've got an email to GoogleVideo and will try to get the Video redone and re-uploaded for you all.

Sorry about this.
For those of you who are brave enough to see this TERRIBLE quality video, you can see it below.

Bear with me and I'll re-do the video with some better software.

Filed under: Foreclosure Property Research using Craigslist

How to Creatively Finance A Foreclosed Property Purchase

2006-03-17T09:39:00.000-08:00

Creative Financing of a Foreclosed Property

Here is 3 quick methods of funding your home purchase:

Assume the current loans:
Some lenders will allow you to assume the payment. Always ask the seller if they have an assumable loan. Sometimes, this will be real simple especially with older VA and FHA loans

Take Over Loan: (also known as a wrap loan)
This is a situatin where the seller simply wants to walk away and tells you to take over the payment. You'll still need to do your research and make sure there aren't any undisclosed liens. You must use a title company in all instances.

100% Lender Financing:
If you have good credit, you can often find 100% financing from your better mortgage lenders in the area. You might even qualify for 125% financing which will allow you to actually walk away with cash at closing so you can fix up the house.

Investor financing:
Let's say you find a hot deal and it is way below market. You can often find many investors which will go into a joint venture with you and split the profits. You found the foreclosed house and they'll put up the money. You sell and split the profits in half.

These are just a few ways. There are many other methods of getting the house funded.
Just find a good deal and the rest is easy !

filed under: foreclosure investing

Risks and Rewards Of Foreclosure Investing

2006-03-17T09:26:00.000-08:00

Foreclosure Investing

There are many inherent risks as well as tremendous rewards when investing in foreclosures. I can't tell you the number of times I've noticed someone buying a foreclosed house not understanding that he/she is getting a whole lot of liens that are sitting on that house.

Why??? Because they didn't do their research.

I recently came across a great little article that goes into this same topic titles:
"Comoaring The Risks and Rewards of Foreclosure Investing"

"Buying Pre-Foreclosures

Buying pre-foreclosures involves working directly with the homeowner and sometimes the lender. Your goal is to create a Win-Win scenario. One win is for the homeowners (they make a sale) and one win is for yourself (you buy the property at a substantial discount).

To accomplish a successful purchase, most experts recommend the following: (1) locate loans in default, (2) evaluate and narrow selections to pursue, (3) inspect the property, (4) evaluate the property owner's needs, (5) determine the market value of the property, fix-up costs, potential sales price and profits, (7) arrange default work out by negotiating with the owner and the lender, (8) close on the property, repair and resell it quickly.

Pros: This is a great investing opportunity if done correctly. Discounts off market value can range from 20% to 35% on average. A low cash down payment is possible if structured properly. You have ample time to research properties. Unique and flexible sales agreements are possible.

Cons: It is sometimes difficult to contact the property owner. You will usually have a lot of competition. The court house research can be cumbersome. You may need to negotiate with the lien holders." .........

http://www.trel.com/foreinvest.html

Good luck and DO YOUR RESEARCH

file under: foreclosure investing

Online Auction Resources Bring Foreclosure Buyers and Sellers Together

2006-03-16T01:47:00.000-08:00

Foreclosure Auctions

Online auction type sites are making it easier for buyers and sellers to come together.
Sellers need to sell and buyers are looking to buy. RIGHT?

Here is a great concept and service --- But with any type of investing, be careful and don't let your emotions get the better of you.

RISMEDIA, March 7 —Jamacor, Inc., a national online pre-foreclosure auction Web site that brings together sellers and real estate buyers and/or investors, has debuted at www.preforeclosureauction.com.

The Web site targets people who are facing foreclosure and need to sell their house fast as well as people who are just motivated to unload their house quickly and are looking for someone to give them the best offer.

Good luck and do your research
Ed

Foreclosure Auctions

Yahoo Real Estate is a Great Tool If You Are Looking For Foreclosures

2006-03-16T00:12:00.000-08:00

Foreclosure Searches

If you are looking for a great tool to search out the forclosure listings in your area, here is one that we've all come across in the past. YAHOO!

Yup Yahoo! has a great feature that not only will allow you to search for Real Estate Listings in your area, but will also help you find foreclosures and all sorts of other property data.

Here is a quick way to search what you are looking for.

Goto www.Yahoo.com

Click on the Real Estate Tab

Put in a zip code or area that you are interested in searching

You'll see several listings of homes in your desired area.
You can sort by lowest to highest and start making some notes.
It really doesn't get any easier than that.

You then start checking the comps (values in the area) by using anothe free research tool I'd mentioned in an earlier blog post called zillow.com

This will give you the approximate values in the particular neighborhood.

I'm about half way done with a video of how I go from start to finish in finding a forclosure home, researching the values, contacting the owners and selling or flipping the property.
As soon as it is done, I'll upload it to Google Video and give my readers the link to view it.

You can really spend a full day on the computer and find enough property to keep you busy for a month. And if you land one of those in escrow, well then we're talking some good income.

Just get busy and play with all these free tools.
Finding the foreclosure home or even a below market property is only a matter some intelligent research.

Good luck

Ed

filed under: foreclosure research

San Jose Business Journal: Foreclosure activity up 15% in California in fourth quarter

2006-03-14T23:09:00.000-08:00

Foreclosure Activity Is Up

As adjustables start rising, homeowner's will start facing larger payments which will cause more opportunities for speculators.

This is a prime market for buying below market homes.
San Jose Business Journal ran this article recently:

Foreclosure activity up 15% in California in fourth quarter
Silicon Valley/San Jose Business Journal - February 10, 2006

Foreclosure activity in California was up 15.6 percent in the last three months of 2005, according to a report released Feb. 2.

Lending institutions sent 14,999 default notices to California homeowners during the October-to-December period, according to DataQuick Information Systems.

That was up 19 percent from the third quarter, and up 15.6 percent from 2004's fourth quarter.

All regions of the state saw an increase in foreclosure activity, ranging from 10.5 percent in the Bay Area to 19.6 percent in Southern California.

Santa Clara county saw a 5.6 percent increase, while Santa Cruz saw a 14.8 percent increase and Monterey went up 25.3 percent.

Dataquick said foreclosure activity hit a low during the third quarter of 2004 when 12,145 default notices were recorded. Defaults peaked in 1996's first quarter at 59,897.

"There's always going to be a certain amount of financial distress. People lose their jobs, have medical emergencies, get divorced, pass away or make bad money decisions at a certain rate. Because of the rise in home values, much of that financial distress has been covered by the increasing amount of equity that people have had in their homes. That equity is now being created at a slower pace, and default activity is inevitably on the rise," said Marshall Prentice, DataQuick president.

The annual home appreciation rate in the state hit 22.8 percent during the second quarter of 2004. Since then it has come down. In fourth quarter 2005 it was 14.5 percent. The appreciation rate is expected to fall below 10 percent sometime this summer.

The median amount owed when the default notice was recorded was $6,862 in fourth-quarter 2005, up from $6,130 for the same period a year ago.

Dataquick said that only about 5 percent of homeowners who find themselves in default actually lose their homes to foreclosure. Most are able to stop the foreclosure process by bringing their mortgage payments current, or by selling their home and paying the home loan off.

files under: Foreclosures Properties on the rise

Listing of Great Real Estate Search Tools

2006-03-14T22:46:00.000-08:00

filed under: House Foreclosure Tools

If you want to get better results, you'll need better tools!
When I research house forecolsures, I use as many tools as I can get my hands on. Especially online one.

There are maps, free foreclosure listings, Government foreclosures and many types home value evaluation tools all available for your taking.

Here is a terrific listings of some of the best Real Estate Research tools I've found compiled in one place. Courtesy of Gary Price at SearchEngineWatch.com

And don't forget to visit my post about Zillow.com

filed under: House Foreclosure Tools

Watch Values Carefully: Foreclosure Flipping Inflates Prices

2006-03-13T23:35:00.000-08:00

Foreclosure Flipping

When checking the values of foreclosed properties in a neighborhood, watch for flippers as they sometimes will artificially inflate the actual home prices.

Ada Focer is a Boston-based journalist writes a fantastic article on how speculators, flippers, fraudsters and the uneducated buyers all come together in a labyrnith that causes skyrocketing prices and increase the foreclosure cycle.

"Take, for example, the case of a buyer with absolutely no savings. Two identical houses are for sale on the same street. One is selling for $50,000 and the other is selling for $100,000, but the first would require a $5,000 downpayment. The seller of the second house is willing to take back a second mortgage for all the buyer's cash expenses. The buyer has no choice. They must buy the more expensive house or not buy at all.

That does not prove the house is worth $100,000. The financing was not typical. The buyer was not in a position to negotiate anything; the seller, in fact, was able to set the price. And arguably, the buyer was not particularly well-informed or acting in her or his own best interest in taking on a mortgage in excess of the property's true, $50,000 value."

So do your due diligence and check all the prices in the area.
Be careful and invest wisely.

Ed
filed under: Foreclosure Flipping

Check Out IRS Website for Free Listing Of Seized properties

2006-03-13T22:03:00.000-08:00

IRS SEIZED PROPERTY LISTINGS

One of the most asked questions I get is where to find listings of foreclosued and seized properties.

This is probably one of the best and most overlooked sites for finding seized property.

IRS (Department of Treasury) maintains a free listing of seized homes, land and personal property. In fact they used to email/mail updates but they've given up on that!

Go check it out. It's free :)

http://www.treas.gov/auctions/irs/cat_Real7.htm

Happy Hunting
Ed

files under: IRS SEIZED PROPERTY LISTINGS

Beware Of Foreclosure State Laws In Your State

2006-03-13T21:48:00.000-08:00

Foreclosure Law

Different States have different rules when it comes to foreclosures. Beware of them as this can cost you lots of headaches.

Some states allow for a redemption of the foreclosed property for several days after the sale.

Wikepedia offers a nice description of Foreclosure and explains various terminology.

"In the United States, there are two sorts of foreclosure in most common law states. Using a "deed in lieu of foreclosure," the bank claims the title and possession of the property back in full satisfaction of a debt, usually on contract. In the proceeding simply known as foreclosure (or, perhaps, distinguished as "judicial foreclosure"), the property is exposed to auction by the county sheriff or some other officer of the court. Many states require this latter sort of proceeding in some or all cases of foreclosure, in order to protect any equity the debtor may have in the property, in case the value of the debt being foreclosed on is substantially less than the market value of the immovable property (this also discourages strategic foreclosure). In this foreclosure, the sheriff then issues a deed to the winning bidder at auction. Banks and other institutional lenders typically bid in the amount of the owed debt at the sale, and if no other buyers step forward the lender receives title to the immovable property in return."

So check the Rules and Laws and make sure to consult a professional before you invest.

Ed

filed under: Foreclosure Law

Free Search Of Connecticut Public Notices And Find A Foreclosure Property

2006-03-09T11:13:00.000-08:00

Here is a completely free (Yes Free) method for searching foreclosure listing in Connecticut.

This is a snippet from their site:

"MyPublicNotices.com in collaboration with participating newspapers and the Connecticut Daily Newspapers Association provides online access to public notice advertisements from throughout Connecticut."

Here is the link: http://www.ctpublicnotices.org
I realize not everyone will be interested in purchasing an investment property in Connecticut, but the free listings are here if you are curious.

Happy searching.
Ed

CNN Money Reports Foreclosure Rise Among Minorities

2006-03-09T10:06:00.000-08:00

I was reading CNNMoney and found a very interesting article on the rise of foreclosures amongst minorities.
money.cnn.com/2006/02/22/real_estate/foreclosures/index.htm

Report: Minorities hit by foreclosures
Increase possibly among factors leading to a retreat in rate of black home ownership in 2005, newspaper says.
February 22, 2006: 7:19 AM EST

NEW YORK (CNNMoney.com) - Home foreclosures are rising, especially for minority homeowners, according to a published report.

The New York Times reports that the rate of black home ownership fell slightly in 2005, to 48.8 percent, from 49.7 percent in 2004, and that some studies suggest that an increase in home foreclosures for minority borrowers could be a reason.

It also reported that home foreclosures among minority homeowners could rise further in coming years due to rising interest rates and the greater use of so-called subprime loans, which charge a higher interest rate, by those borrowers.

The newspaper said the race of borrowers is not available on foreclosure documents, but studies that compare foreclosure rates to the racial makeup of the neighborhoods where the foreclosures are taking place suggest that the rate is rising higher for minority homeowners.

For example, the newspaper reports that a study by Cleveland State University researchers found that in Cuyahoga County, Ohio, which includes Cleveland, the ratio of auctions to regular sales was 23 per 100 last year in the eastern portion of the county, which is 52 percent black and 7 percent Hispanic. That's up from nine foreclosures per 100 regular sales in that area in 1995. By comparison in the western portion of the county, which is 82 percent white, the ratio was 11 foreclosures per 100 homes sold, up from 2.5, according to the Times report.

The newspaper also reports that in Chicago the number of foreclosures has tripled since 1993, and that neighborhoods where the population is more than 80 percent non-white account for 65 percent of all cases, up from 61 percent in 1993.

The newspaper reports that the Mortgage Bankers Association plays down the severity of foreclosures, noting that most new minority homeowners are doing well and some other statistics show foreclosure are becoming less of a problem, not more. The trade group estimates that fewer than 1 percent of all loans were in foreclosure in the three months that ended last September, down from 1.5 percent in 2002. For subprime loans, the foreclosure rate was 3.3 percent, down from 8 percent in 2002, the newspaper reports.

I've maintained all along that the next few years are awesome times for investing in foreclosures homes because of:

(A) Rising Interest Rates
(B) Too Many People Having Negative Arm Mortgages
(C) Teaser Rate Adjustables starting to make their full adjustments

Start doing small things today and you'll be in position to take advantage of the wave of foreclosures in the coming year.

You don't even have to buy a foreclosure home for investment purpose. You might consider buying for a seized or foreclosed home for your own residence.

Ed

Review Of Fast Cash In Foreclosure Book

2006-03-06T21:52:00.000-08:00

Fast Cash In Foreclosure

I have read many books on the subject of foreclosure investing and without a doubt, without reading books and attending seminars, I wouldn't have been as successful and as quick as I was.

But please be clear that as no book will take the place of action and experience.

Bottom line is that you need to start and take action by reading the papers, hitting the road, checking the values, making contacts, making calls, visiting real estate agents and all the other things that'll bring you closer to your first sale.

Foreclosure and pre-foreclosure investing is profitable and because the money potential is so great, there are many people trying to land that ONE deal that'll make them the big check.

In my early days, I made the mistake of going at it alone. Without a mentor and without guides. In all honesty, foreclosure investing was a small niche and noone really talked about it openly.

The one day, I set out to find a mentor and OH BOY, this one thing alone catapulted my success to levels I didn't realize was possible. I quickly got a hold of every paper, report, book and cassette tape on the topic of distressed properties and started my education all over again.

This leads me to the topic at hand.
Which books and authors are reliable and trustworthy when starting out in your foreclusre investment strategies?

One of the best books I've come across on this topic is Fast Cash In Foreclosure by Steve Maletos. He has basically covered everything you need to know in order to start and profit from this Real Estate Investment strategy.

Here is a preview of some of the topics he covers:

1. Acquiring Financing p. 12
2. Identifying Distressed Properties p. 38
3. Property Inspection and Valuation p. 72
4. Submitting an Offer to Purchase p. 106
5. Locating Buyers p. 132
6. Pre-Qualifying Buyers for a Mortgage p. 156
7. Assigning Contracts p. 180
8. Getting Started p. 200

Your Company p. 200
Your Office p. 201
Target Area p. 205
Target Group p. 206
Financing p. 207
Property Search p. 208
Continuing Education p. 209

About 288 pages of solid material that'll definitely give you a jump over your competition.

If you are serious about foreclosure investing, then give Fast Cash In Foreclosure a try.
He is offering a 90 DAY no Hassle Money Back Guarantee as well as 5 awesome bonuses.

Happy Investing :)

Ed Allen

filed under: Foreclosure Investing - Fast Cash In Foreclosure

Donald Trump The Apprentice Maker Teaching Virtues Of Foreclosure Investing

2006-03-02T01:02:00.000-08:00

Donald Trump The Apprentice Maker Teaching Virtues Of Foreclosure Investing

...... So I was browing the latest issue of Fortune Magazine and happened to notice Mr. Donald Trump teaching the ins and outs of Foreclosure Investing in an upcoming Seminar.

Now, I'm not saying he is the actual person teaching Foreclosure Strategies. But even The Donald knows how profitable this strategy is and that's why he is there because he sure doesn't need the money and doesn't need to be there.

Side Note:
Do you realize that some Foreclosure Investors don't even actually own the property? That's called "flipping" which is the simple act of placing a property in escrow and then selling the rights to this to another foreclosure investor.

Several years ago, I used to use this exact method to generate almost immediate cash on demand.

I'd find a suitable property, research all the data, negotiate the deal with owner and place it in escrow.
I would simply advertise the deal and sell the rights to transfer escrow to the new buyer. This is a fast way to generate $2,000 to $25,000 in cash with a few days worth of work.

Now back to Donald Trump

I was fascinated by this full page ad because his fees are not cheap. So this seminar must generate a ton of money for the organizers (The Learning Annex)

This is going to be a packe event...
Some of the topics they are covering at this Foreclosure Seminar are:

Finding Undervalued Property
Tax Lien Properties
Fixer Uppers
Foreclosure Mortgages
Probate Properties
Asset Protection
Discounted Notes
Analyzing Deals
And Much More

I'd definitely suggest anyone who lives near Los Angeles and interested in Foreclosures and Foreclosure Investing to attend this seminar. After all, how often do you see Mr. Trump talking about investing and making money in the Foreclosure Market.

I've been telling you guys and gals about this strategy for years and I still believe it to be one of the most powerful money making vehicles out there. In fact, with the Real Estate Bubble at the current level and interest rates on the rise, there'll be MANY more foreclosures in the coming months and years.

Those low adjustables are adjustin' and those Libor rates are starting to go up faster than you can say Donald Trump :)

So go out there and make some money.
I'll be posting on a mapping tool that'll absolutely blow your mind and save you a ton of time when mapping out the Foreclosures in a particular area.

Stay tuned

Filed under: Foreclosure Investing

Foreclosure Property Evaluation Tool- Free Service to Get Home Values

2006-02-25T01:01:00.000-08:00

Foreclosure Property Evaluation Tool- Free Service to Get Home Values

Ok. You've found some foreclsoures and homes in default and you want to know what they're worth.

This used to be real hard and expensive.
Zillow.com comes to the rescue. This is a free service and I've not seen any other free service come close to it.

This service makes it so easy and intuitive to get prices in a particular neighborhood.
Now, please keep in mind that this is only an estimate and will not replace the advise of a professional home appraiser.

But this will give you a good idea what the homes in the area are going for and how much of a profit potential you are looking at.

So here's what you do:

Go to http://www.zillow.com
Type in the street address and zip code of the potential foreclosure house you are looking at.
A map will pop up with all the houses in the area and what they sold for
For a more detailed plan, you can click on a little pop up where it says "see detailed sold report"

You'll be amazed at the amount of information Zillow has in their database.
Something to the tune of 60,000,000 properties.
For more tips and tricks on finding below market properties and seized or forclosed homes, be sure to visit my blog.

Ed

Filed Under: Foreclosure Property Evaluation Tool- Free Service to Get Home Values

Foreclosure Home Lists For Free

2006-02-18T23:59:00.000-08:00

List of Home Foreclosures

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

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

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

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

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

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

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

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

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

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

Look, the bottom line is that there are more free foreclosure lists and sources to provide you with at least 30 homes to look at on a daily basis. The ONE thing you need to do is to take action. Get your pen, notepad, camera and list together and hit the road. Drop me an email if you need some help. Also, One of the most powerful courses I've ever found on Buying Foreclosures With No Money Down is Buy Foreclosures With No Money Down.

Look for upcoming live listing of some selected Foreclosure Homes for free on my Blog

Foreclosed vs. Seized Houses

2006-02-17T22:36:00.000-08:00

Foreclosed vs. Seized Houses

Government Seized Property Auctions
By Daniel Holmbeck

When people commit crimes, the government seizes their property associated with the commission of the crimes. This means the government seized property becomes auction goods for the general public to bid on. At a government seized property auction, property can include the following:

VEHICLES:

The most common government seized property auction is easily vehicles. Luxury cars, SUVs, pickup trucks – even boats, RVs, ATVs, snowmobiles and motorcycles are government seized auction property available in your area. Since vehicles have a documented value you can check against the Kelley Blue Book, it is easy to calculate your savings when bidding on this type of government seized auction property. Be sure to check out government seized auction vehicles in your area.

REAL ESTATE:

Drug dealers and tax cheats have to live somewhere too, right? Some of the most expensive government seized auction property available for sale is real estate. Vacant land, cabin getaways, suburban houses and mansions are some of the private use real estate available at government seized auctions. Commercial property can include car dealerships and customization shops, restaurants, ranches, retail space, and anything else you can imagine. Government seized auction property often sell far below fair market value. For more information about government seized auction property inside with DEAauctions.com.

HOUSEHOLD HOODS AND FURNITURE:

All those criminals have things they no longer need when they go to jail. You can buy their government seized auction property for pennies on the dollar. Area rugs, appliances, bedroom and living room sets are all government seized auction property you can bid on. Big-screen TVs, video games and pool tables are some of the recreation property available at government auctions. Make crime pay for you! Click here for your helpful hints to bidding at government seized property auctions near you.

ANTIQUES AND FINE ART:

If you like antiques and fine art, but your budget doesn’t allow you to indulge this pastime, government seized property auctions were madefor you! Oriental rugs, listed painters, sculptures, Chippendale furniture, Stickley and Tiffany glass could be yours for Martha Stewart Living prices! Government seized auction property includes art and antiques you may not be able to otherwise afford. Be sure to find bargain priced art and antiques at a government auction near you.

DESIGNER CLOTHES AND JEWELRY:

The fabulous designer duds once donned by people now wearing orange jumpsuits everyday can be had for unbelievably low prices. Government seized auction property includes some of the best name brands on the market today. Versace. Prada. Burberry. Vera Wang. Ralph Lauren. Nautica. Jewelry by Tiffany, Harry Winston, Bulgari, and Cartier can all be yours at government seized property auctions. Don’t hesitate – click here for more information about government seized property auctions near you.

DIRECT ACCESS TO THE MOST COMPLETE INFORMATION

Some of the more common auction items include:

used autos • marine vehicles • jet skis • aircrafts • homes • real estate • commercial property • farm equipment • industrial • business • electronics • computers • antiques • art • coins • stamps • appliances • guns • travel • collectibles • clothing • crafts • boats • bikes • motorcycles • mobile homes • jewelry • toys • cars • trucks • mopeds • bicycles • cameras • televisions • clocks • furniture • unclaimed property • abandoned property • personal property • office furniture • condominiums • town homes • commercial property • vacant land • single family homes • machinery • tools • hardware • building supplies and much, much more...

Http://DEAauctions.COM is an unchallenged leader in the Auction information Industry and will transform the way you search & locate the Billions of dollars in property that is auctioned off throughout the country every year.

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

Foreclosed vs. Seized Houses

Need To Find A House In Foreclosure? Call The Bank!

2006-02-06T11:04:00.000-08:00

Need To Find A House In Foreclosure? Call The Bank!

I get emails all the time asking how to find houses in Forclosure.

There are 2 main methods that have been very successful for me.

1- Buy a list from many sources online. You can get them as cheap as $10

2- Contact Banks and Credit Unions in your area and ask to speak to the REO Department. If you get someone friendly, you will have access to some of the freshed houses in foreclosure.

This will give you the best chance of success.
Not only you'll have access to information not usually available on a list, you might even be able to get attractive financing terms from the bank.

I recently came across a house forclosure auction in North Carolina, where the Credit Union was offering a 100% financing to the potential buyer!

Unfortunately it was too far for me as I live in LA and I'd rather keep all my Real Estate Investments in the local area.

So get started today.
Get yourself a foreclsure list or call the local banks and speak to the REO department.

There are thousands and thousands of foreclosure houses for sale and you can purchase one with some research and a few phone calls.

Good Luck.
E.R.

40% of Homeowners Purchased With No Money Down in 2005! Why Not You?

2006-02-03T07:59:00.000-08:00

I was reading an article in the Los Angeles Times where they stated 4 out of 10 Homebuyers used No Money to put as down payment.

Imagine, getting into a house with Zero Money Down.
And if you structure it, you can even walk away with some cash at closing.
But that's another topic and we'll address on a future Podcast or Article.

The truth of the matter is that you don't need to pay hundreds of dollars for Real Estate Seminars or training courses to buy a home with No Down.

I've bought and sold dozens and dozens of homes with no money of my own.

Please understand that your ROI (Return on Investment) is incredibly higher when you don't actually put a down payment. However, your payments are also higher. So keep that in mind when you purchase a house.

Here are 7 methods of getting into a house with no down payment money.

1- Get a 100% Financing from the Mortgage Banker

2- Get an 80% loan from the Banker and ask the Seller to carry the 20%

3- Ask the Seller to carry %80 and get a Hard Money Loan or a Personal Loan for the remaining 20%.

4- Do an All Inclusive Trust Deed (Wrap) and refinance the property once in your name. The proceeds will then be used to pay the seller.

5- Find a house with an assumable FHA loan and assume it.
For example, there are hundreds of realestate for sale in Northern California that meet this exact criterea.

6- Find a house in foreclosure and where the sellers are walking away, have them transfer the title in consideration for a sum to be paid in the future IF you were able to save and sell the property. Then contact the lienholder and ask for a workout or an extension. Sometimes this will work especially if they know you are listing the property for sale immediately.

(There are some free foreclosure lists you can search for on the internet)

7- Find an investor where they'll put up the money and you'll be the bird-dog.
(You find the house - He'll put up all the money - You split the profits when you sell)

Here you go.
7 ways to get you started in buying a home with no money down.

I'll be doing future articles and audio seminars (podcasts) on actually implementing these techniques and also on methods of finding the property.

Make sure to educate yourself on the local County and State laws as well as find some free Realestate sales forms online to use when you make your offers.

Best of luck and happy hunting.

Truth of Foreclosure Home - Disadvantages of Buying pre-Foreclosure

2006-01-06T20:01:00.000-08:00

by Shawn Daren

Sure you have known the advantages of buying pre-foreclosure, haven't you? Adjustable agreement, up to 40% below market value foreclosure home, adequate time to research on the foreclosure home, lesser down payment, etc. Undeniable, buying pre-foreclosure has many advantages and they are real irresistible. Anyhow, there is always a balance point in everything. It's true that buying pre-foreclosure has a lot of advantages, but there are also disadvantages of buying pre-foreclosure.

Depending on one's needs, only you know which buying foreclosure approach (pre-foreclosure, auction and REO) best suits you.

First and foremost, the very first disadvantage of buying pre-foreclosure is getting contact with the foreclosure homeowners. Why say so? As you have already known, foreclosure homeowners are facing negative events of his life that causing him to fall behind his mortgage payment on that moment. Foreclosure homeowners are distressed. And the outcome of this situation, foreclosure homeowners usually refuse to meet with strangers or whoever he thinks unnecessary. To some foreclosure homeowners, this could may be help them to concentrate more on solving the problems, while to some other foreclosure homeowners, this will only isolate them from the problems. Either way, you will have works to do to get contact with them.

Some professional investors or real estate agencies will post their greetings, post card like stuff to foreclosure homeowner. But to me, it's not good enough. It's recommended to call up foreclosure homeowner in person. Talking to them is the best way to leave a deep impression to them; while calling can show your sincerity of buying his pre-foreclosure home too. Of cause, talking courteously and patiently is equally important. Put yourself in his shoe, do you want someone rude to take over his lovely home or someone gentle instead?

Buying foreclosure has risk in dealing with other liens. This is the second disadvantage of buying pre-foreclosure. Who knows how many lenders the foreclosure homeowner has borrowed money from? There are cases where homeowners get home loan from 2 different lenders to buy a house and get a third lender for home improving loan. These cases involve many legal works. You definitely can't settle it by yourself, unless you are a lawyer and your spouse is a bank manager.

No jokes on the legal works. It's really frustrating dealing with them. Thus, before buying a pre-foreclosure, make sure you do a throughout research on that pre-foreclosure home including its title deed, loan information, any hidden liens, etc. Get the professional help. And this situation contributes the third disadvantage of buying a pre-foreclosure. There are paper works to do to complete the deal and it's time costly.

However, these 3 disadvantages are actually nothing compared to the return of buying pre-foreclosure. To conclude, great bargains need hard work. You have to do research and truly understand the process of buying pre-foreclosure. It's recommended to buy a foreclosure book and do some real reading if you really want to get this pre-foreclosure bargain. I would say it worth your hard works.
About the Author

For being involved in both home loan and real estate career offline, Shawn Daren is experienced to share his knowledges with us. His buying foreclosure website provides info on picking up great foreclosure bargains. Learn how to buy foreclosure and earn your real estate money.

2006-01-01T19:53:00.000-08:00

Investing In Tax Foreclosed Properties

2005-11-18T17:20:00.000-08:00

by James Ficarro

Tax Properties

Every property that is owned is assessed property taxes that must be paid every year. Property taxes are paid to local and state governments based on the appraisal value of the real estate. All states, the District of Columbia, Puerto Rico and the American Virgin Islands and Canada have property taxes.

When a property owner doesn't pay their taxes, they are usually penalized and warned. If the owner still doesn't pay the taxes, the property is either seized, gets a lien placed against it, or both. After due process, the property is sold at a tax auction.

Tax auctions provide one of the most extraordinary investment opportunities that exist to date. If properly educated, an investor can by real-estate for a small fraction of what it is worth. They can rent, sell, or use the property for themselves.

In most states, the government taxing agency allows investors to pay a delinquent owner's taxes. The investor receives a tax lien certificate. If the owner wants to keep the property, they have a limited time to pay off the lien, including interest, fees, and any additional taxes that had been paid after "possession". If the owner fails to pay off the lien, the property is deeded to the investor.

In some states, the government taxing agency will not allow investors to pay the taxes, so the property is seized and goes to the agency. The property is then auctioned off, usually for back taxes, penalties, and interest. The successful bidder typically gets 1st lien, so the dead is free and clear.

In other states, the delinquent property is sold at auction for the amount of taxes, penalties, and fees, but the original owner has a time period to buy the property back. The buy-back price includes interest (often very high), penalties, fees, etc. The taxing agencies make the deal as sweet as possible to encourage investors to bid on the properties and solve the delinquent tax problem.
About the Author

James Ficarro provides an excellent resource for finding and buying tax foreclosed properties and liens in every county in the United States. http://www.tax-property-sales.com

What is a Tax Lien and How Can You Profit From It? Frequently Asked Questions About Tax Liens

2005-11-18T17:18:00.000-08:00

by Courtney Park

1. What is a Tax Lien Certificate?

A tax lien is the name of the claim that a taxing authority, such as the local or federal government, makes when an individual has not paid taxes for a lengthy amount of time. Tax Liens are most often applied to homes. Essentially, the government ceases control of the property, pending payment on taxes.

The taxing authority, will then sell a certificate for an asset, such as a piece of real estate or boat, if the owner of the property has been negligent in paying his or her taxes. Anyone can purchase a certificate by attending a tax lien sale auction in the county in which the unpaid taxes are owed.

2. How can I make money from my tax lien certificate?

You may be surprised to know that Tax Lien Certificates are far more profitable than Certificates of Deposit and just as safe. Tax Liens are also safer than the stock market and offer an equal rate of return.

If you invest in a tax lien certificate, you can earn a very high interest as much as 25% on the unpaid taxes from the owner of the property, which will be owed directly to you instead of the government.

Since the interest earned currently on a CD or a regular savings is only about 3-4%, it really pays to check out the tax lien strategy to get a higher payback.

Essentially, you are acting like a bank and gaining interest even though you never made the loan because you owe the certificate. Once all of the interest and taxes are paid, then the property owner can reclaim the property by gaining control of the tax lien certificate from you.

However, if the owner never claims the property or pays the taxes, then you will gain ownership of the property deed. Either way, you'll be in a position to make money from the tax lien on the property by gaining either interest or the property itself.

3. Can I purchase a tax lien in a town in which I do not reside?

Yes. You can purchase a tax lien in any town, even if you are not a resident of the particular town. The only trick is that you have to actually travel to the town in order to attend the tax lien sale auction.

4. What is a tax lien sale auction?

A tax lien sale auction is the method by which tax lien certificates are sold. Like any auction, bidders will bid for the property or tax lien properties that they are most interested in purchasing. You can bid for as many properties at one time as you desire.

5. Where do I find out where the tax lien auctions are?

Information on tax lien sale auctions are matters of public record. You can contact the local government in the town in which you choose to purchase a tax lien, or you can subscribe to a service online that provides that data to you. Visit http://www.liensource.net/ for more information on subscriptions to information.

6. How often do tax lien sales occur?

That varies. There are generally 1-3 tax lien sales a month per locality. Check with the local government for more information and to obtain a tax lien sale calendar.

7. How much capital do I need to begin?

The amount of money you need to invest into your tax lien purchase business depends entirely on the particular properties you're interested in purchasing. Properties range from small homes to mansions.

About the Author

© Copyright Courtney Park, All Rights Reserved.
About the Author: Courtney is owner of http://www.home-business-web.com For more information on home-based business ideas, and jobs for stay-at-home moms, check out http://www.home-business-web.com/part-time-business-ideas.html and http://www.home-business-web.com/jobs-for-moms.html

Real Estate Boom To End? - No!

2005-11-10T09:38:00.000-08:00

by Dan Lewis

The naysayers are proclaiming the end of the real estate boom once again. Once again, they are wrong.

Boom, Boom, Boom

In recent years, it's impossible to turn on the television or read the headlines without seeing a warning of impending doom. Experts claims there is a housing bubble and it is about to burst. Should first-time and move-up homebuyers be concerned? No.

We keep hearing about the bursting bubble, yet the real estate market continues to boom. How can this be? Demographics are the primary reason.

The most significant and frequently mentioned demographic is the "Baby Boom" generation, which refers to children born in the years following World War II. Economic forecasting expert and author, Harry Dent, has written extensively about how property buying habits occur in a predictable fashion as a generation ages. From needing an apartment in college, to buying a starter home and eventually trading up to something larger, it is all cyclical. Since the Baby Boom generation is the largest so far, their impact has been far greater than the generations that preceded them.

Now that Boomers have moved into their top earning years, they continue to push the housing market to new levels. They are purchasing larger primary residences as well as vacation homes and investment properties. The statistics for 2004 reflect this trend, with 36% of home sales going toward second homes and 23% of sales going toward investment properties.

Demographic trends don't end there:

Immigration - There has been a large influx of immigrants over the past three decades.

Children of Baby Boomers - This generation is now in their twenties and looking to purchase their first homes.

Retirees - While the demand for housing is expanding, the supply is decreasing. With advancements in medicine and treatments of disease, retirees are living longer. This means that they are occupying their homes for more years, which decreases the supply of homes available for purchase.

In addition to the demographic factors listed above, real estate has been a rewarding investment. Stocks and bonds have not performed as well as investors were used to, while real estate has exceeded expectations. In an uncertain world, people are more comfortable investing their money in property that will appreciate and can be lived in.

Don't buy the hype about a bursting bubble. Three years have passed since the doom and gloom predictions started. The real estate marketing will continue to flourish.
About the Author

Dan Lewis is a mortgage broker with http://www.gwhomeloans.com - San Diego mortgage brokers providing home loans and refinances. Visit http://gwhomeloans.com/services.html to learn more about options for San Diego mortgages.

Real Estate Investor Question: Rehab and Sell, or Rehab and Keep?

2005-10-31T11:36:00.000-08:00

By: Bruce W. Ford

Here's another awesome question I received from my discussion board. The question; Why bother keeping property after it's rehabbed? Why not sell it after the rehab and GET PAID!

Of course, the first questions that you must answer is how emergent is your need for quick cash? You can likely generate the most SHORT TERM cash by selling a freshly rehabbed house. But, you will give much of it away in taxes come next April.

If you keep it, you stand to make more! You will also enjoy some great benefits while you own it such as cash flow, a tax break, and MORE cash with the future appreciation. You can still pull some nice cash a few months after buying it when you refinance (post rehab) the property from your hard money (at 70% loan to value) to long term financing (at 85% or 90% loan to value).

The short answer is an investor is going to make considerably more money by hanging onto a property after it's rehabbed. There is a downside to it. You have to be a landlord, and you have to decide if you want to do that. I don't think it's too bad as long the landlording is done correctly.

Let me illustrate the difference in overall money between rehab and sell, and rehab and rent investing with this example;

Let's say appreciation rates are 5% in your town and the average price of a freshly rehabbed property in the neighborhoods investors buy in is $100,000. Let's also say there is Bill and Fred.

Bill sells his properties after rehabbing and makes $15-18,000 per house. Good boy Bill!

Fred keeps his rehab projects and cash-out refinances, pulling out around $10,000 per house within 3-6 months of ownership. (Fred trades his 70% loan-to-value (LTV) ratio hard money for long term, 30-year mortgages at a lower interest rate with an 85-90% loan to value ratio. He pockets the difference between what it costs to pay off the hard money and the new mortgage less closing costs. This works out to about $10,000 per property.)

Bill (rehab and sell) makes a great living. Ten houses per year is $150,000-$180,000 per year...nice jingle! The downside is that Bill has to keep rehabbing to keep making that living year-after-year and pays taxes on all that money as regular income (ouch!). So his $150,000 per year is in reality somewhat less.

Fred (the rehabber) also makes a great living. Ten houses per year makes him $100,000 or so in tax free, spendable cash. But, Fred controls a million dollars in real estate and it's going up in value year after year. Also, Fred pays no taxes on that money he gets from the cash-out refinances. It's part of a mortgage, so must be paid back, therefore is not income! I love that part!

Let's look at what Fred's doing more closely.

Let's say Fred bought 10 houses valued at $100,000 each, owes $90,000 on each one (after the 90% cash out refinance), so he controls $1,000,000 in property. If he keeps them 5 years (assuming a low appreciation rate...which is pretty conservative):

Purchase year - 10 houses x $100,000 = $1,000,000 Year 1 - Same 10 houses X $105,000 = $1,050,000 Year 2 - Same 10 houses X $110,250 = $1,102,500 Year 3 - Same 10 houses X $115,762 = $1,157,620 Year 4 - Same 10 houses X $121,550 = $1,215,500 Year 5 - Same 10 houses X $127,627 = $1,276,270

Essentially, Fred makes an extra $50,000 per year for keeping 10 properties. After owning them 5 years, if he sells, he puts $276,000 in his pocket.

Remember

- Some parts of the country will appreciate much faster than 5%. Heck some places properties will double in value in 5 years. - No tax benefits of keeping the property is included here. That equates to thousands of dollars in real income. - This is ONE ten-house year. Let's say you want to "top out" at owning 30 houses. Well, in just a couple of years your buying will slow down to a trickle and you'll start selling and cashing out of properties. I mean, how many ten-house years to you need to string together before you are set for life? - What if you hold these houses 10 years? The numbers get pretty exciting.

If you're like me and you don't want to do this for too many years, then holding properties for a few years makes a lot of sense, especially if you don't have much personal money invested in them.

So what of poor old Bill? Chances are, Bill will satisfy his need for short term cash, then start holding property. What do you think?

About the Author

Bruce W. Ford is the editor of Rehab-Real-Estate.com. Get his important Special Report entitled "12 Things Real Estate Investment Gurus Won't Tell You" at Rehab-Real-Estate.com.

A Consumers Guide to Buying And Selling With Lease-Options # 1

2005-10-31T11:21:00.000-08:00

By: William J Archambault Jr

This is the first of two articles on purchasing and selling single family homes with lease-options. We're going to examine buying on a lease-option, selling on a lease-option, and in article # 2 how to successfully buy and sell on a lease option.

Lease-options have spurred the imagination of would be buyers lacking the cash, and/or credit and more importantly lacking the knowledge that almost everyone can own their own home and/or investment properties. Also, promoted to those would be investors who lack the people skills or time necessary to be a landlord, but still want most of the benefits of real estate ownership without the responicabiltys!

Lease-options are real estate tools used by the good and the evil among us. Most lease-options are an agreement between good and evil people. We all know far to many real estate people who believe you only get rich by taking the suckers money, most people who attempt to buy on lease options are simply donating money to these sellers.

In my book "One House At A Time /Finding And Buying Single Family Rentals" I spend a lot of time on the option scam as presented to real estate investors. I say scam because in my experience these lease-options seldom result in a new home owner. But, I've only been in lending and real estate for 35 years, may be when I get more experience I'll change my mind. Even when good people try to help each other lease-options seldom turn out that way. They can work but they must be done right from the beginning, I included instructions in the book.

Before I offend you any more I need to define my terms.

"Guru," a Hindu spiritual leader or any unusual teacher. There are "Gurus" in all fields of life, but thanks to TV infomercials most of us think of real estate investment instructors. Not all "Gurus" are bad, thanks to my classes and writing I'm a real estate Guru.

"Option," the purchased right to purchase property. A type of sales agreement that obligates the seller to the buyer, but not the buyer to the seller. When use properly a great and powerful real estate tool. In the book I strongly advocate the use of short term option's in lieu of sales agreements whenever possible.

"Lease," a rental agreement for any property real or personnel. Most often used with reference to rental agreements for more than one interval, i.e.,: a one year lease calling for 12 monthly payments. The most common real estate contract.

"Lease-Option," a combination of the right to purchase, with a rental agreement. Like a mule it can be a powerful tool. Like a mule it's flawed lacking the sleek beauty and speed of a horse or the friendly cuteness of a surefooted donkey. All to often lease-options involve getting screwed by a jack ass.

"Scam," anything that purports to do one thing while obviously doing something else. Scams are normally immoral, but often not illegal. Scammers can often provide antidotal evidence that their program works, leaving out that it probably won't work as presented for you.

"Sucker," those dreamers who think they're going to get something for nothing. Those people who buy the programs about buying on lease-options. The victims of those people who bought the programs on selling on "lease-options."

Traditionally lease-options were offered by sellers who needed to entice a tenet to rent their property at a premium price, with or without an up-front payment to the seller. More recently lease-options are used by sellers who have to wait out a prepayment penalty. Sellers believe that a tenet with an option to purchase will take better care of a property they may someday own.

To protect yourself from being a scammer or being scammed you need to determine what's in the deal for the other guy, and what you hope to gain.

Landlords/sellers:

1. A better tenet is a good reason to offer a lease-option. When the lease is what, we call "triple net," where the tenet takes care of the property and pays for everything you're almost out of the landlord business.

2. Sub-prime and/or adjustable rate mortgages often have "prepayment penalties," a lease-option with a good buyer, having made a sufficient up front payment can be a good way to wait out the penalty. See #1.

3. You need money now and are willing to trade equity for the cash. You need more monthly income than the market rent will provide.

4. The down side:

a; You're committed to sell the house at a fixed price.

b; During the term of the option you'll not normally be able to refinance or sell the property.

Tenets/buyers:

1. You'd like to buy the house, but for some reason you can't commit at this time. IE: You haven't sold your old house yet, your new job is tentative, in the near future you'll qualify for a much better loan.

2. You want to tie up the house you're renting, so you can buy it later for whatever reason.

3. You're going to, with the owners permission, substantially improve a house ( like, repairing an older home, landscaping a new home) and you want to protect your investment.

5. The down side:

a; If the option requires a substantial up front payment, or monthly premium you're likely to lose it.

b; If you don't qualify for a mortgage today you're not likely to a year, or two, or three from now, either!

c; Your lender may not recognize your equity. Don't mistake this with losing your equity, but the lender may not use the current market value of the house or your credits toward equity, when determining the loan to value.

d; You're committed to this house at a set price. If for any reason you don't buy this house, you lose your money!

e; If you're ever late with a payment you will probably lose all your money!

Many, if not most, Gurus who advocate selling on lease options teach Landlords/sellers:

1. Take a large up-front option payment, and a large monthly premium.

2. Included a provision canceling the lease-option if the payment is received in as little as ten days late!

3. Demand payments in person.

4. Make yourself hard to find!

5. Evict!

6. Resell!

7. In a good year you can sell the property twice with substantial non refundable up front payments! In a great year three times!

I've tried to sum up several chapters in one short article lease-options are a tool, akin to a handgun! At one time lease-options can be a great benefit, fun, even sexy. Lease-options can be great protection, for a tenet. Finally lease-options in the wrong hands can do great evil!

Three final notes for would be tenets/buyers:

1. Never turn down a free or low cost option.

2. Never, never, never let an option expire without getting the property appraised. What you have thought was outrageously expensive might be a real bargain near the end of the option.

3. If you do want to use a lease-option watch for "A Consumers Guide to Buying And Selling With a Lease-Options # 2." There are things you must do at the start of a lease-option if the lender is to recognize your equity an the time of purchase.

Copyright 2005 William J Archambault Jr
About the Author

The author: William J Archambault Jr has been in lending and real estate since 1969. He writes about up to date RE with the wisdom of our Grandfathers. He's a mortgage broker in Las Vegas, NV He's the author of: "One House At A Time/Finding And Buying Single Family Rentals" a book for real estate investors available at http://www.reii.org e-mail author@reii.org

Tax Lien Investing - Secrets of the Wealthy

2005-10-23T11:36:00.000-07:00

by Gregory Nirshberg

Most people have not heard of tax lien investing. Yet there are millions of people across the country earning safe, secure, and most importantly, high percentage interest returns by investing in tax lien certificates. To put it simply, investing in tax liens is an easy, high profit way to invest in real estate, without needing large sums of money to do it.

So what are tax lien certificates?

Each year property taxes are due on all properties. The local government uses the money from property taxes to pay for various things in the community. If an owner doesn't pay their property taxes, the government still needs that money to be able to run their county effectively! So what's a government to do? They levy a tax lien against that property and auction it off at a tax lien sale. An investor, YOU, will purchase that tax lien with the understanding that you will earn a certain percentage interest rate. When the owner of the property finally pays off their taxes(plus penalty fees), the county then cuts a check to the investor for the principle amount invested, plus any interest or penalty fees accrued. The county makes out because they get the money they need to run things, the home owner or business makes out because they are given more time to pay off their taxes, and the investor makes out because they just earned a lot of money without really doing much at all!

Why should I invest in tax lien certificates?

Safety

Tax liens are sanctioned and run by the government. Your investment is protected by state law and secured by actual real estate! What other kind of investment option provides that kind of backing? Take a look at it from the other end. People do NOT want to lose their homes. So odds are they'll pay off their taxes, thus paying you off. And if they don't...you just may end up with a free property.

Minimal Competition

The great thing about tax lien investing is that, for the most part, it's a completly unknown investing option. Most people think that stocks, bonds, mutual funds, CDs, money markets, and traditional real estate investing are the only ways to invest their money. So what you have is a very small number of people "in the know" making tons of money in an extremely low risk form of investing.

High Return on Investment

Your return on investment will vary largely depending on what state and county you are in. But to give you a rough idea, interest rates will vary from about 5% to 25%. Now, given how safe and easy this is, these kind of interest rates alone would be worth the investment. But there's more. In most cases you won't have to wait a whole year to earn your 15% interest. If the property owner pays off their taxes in one month, you'll still earn that same 15% interest, but you'll get it one months time. Freeing up your money to invest again. Lets say you take that money, and each month invest in a tax lien certificate and get paid off right away. That's 15% interest, 12 times, giving you a final return of 180% over the period of the whole year. Because interest rates are always calculated over the period of one year, this is what's called your effective return on investment. This is why investors love tax lien investing. In a state like Texas your effective return on investment can be up to 300%!

Examining the alternatives

Here are some alternative investing options that the majority of americans invest in. Included with them is an average interest rate and the degree of safety of the investment.

Savings account - 1% - safe
Money market - 1-2% - safe
CDs - 1-4% - safe(interest rate depends on length of CD
Stock market - average growth 11% - unsafe, percentages vary wildly from year to year
Tax lien certificates - 5%-300% - Safe. Government run. Enforced by state law. Fixed interest rates.

The ultimate win/win situation

So what happens if the owner doesn't pay off their taxes? Well in many states you would initiate a foreclosure on the property. The property gets auctioned off at a tax deed sale, and as the tax lien certificate holder, you get paid off first. But in other states the property is signed over to you free and clear! That's right, your small investment geared to earn 15% just earned you a free house with which you can do as you please. Live in it, rent it out, sell it, whatever you want.

Conclusion

So why should you invest in tax lien certificates? Because it simply doesn't make sense not to. If you'd like to learn more about the ins and outs of tax lien certificates or specifically about tax lien auctions, more detailed information is available.
About the Author

Gregory Nirshberg owns and operates Tax Lien Investing Resource. A website dedicated to providing free quality information about tax lien certificates and the tax lien investing process.

Real Estate Auction Action - Buying A Home At Auction

2005-10-17T02:53:00.000-07:00

By Jakob Jelling

Due in part to the popularity of the U. S. Department of Housing and Urban Development (HUD)'s home auction program, more potential homebuyers than ever are buying homes at auction. Homes for auction aren't limited to just HUD, however. Many government entities auction homes for payment of back taxes, and some homeowners even auction their homes on eBay.com!

Homebuyers considering buying a home at auction should take some steps in advance to help them with their bid price, and even whether to bid at all on a specific home. There will always be a degree of risk when buying a home this way, but with a little diligence, potential homebuyers could save a lot of money buying in this manner.

Before the auction, you should have your financing arranged, and have enough cash on hand or in your bank account to cover a deposit on your purchase. You need to check the features, location, condition, and ownership history first. Afterwards, be sure to learn what the property is worth by looking at sales of comparable properties in the same area. Compare homes with the same number of rooms is possible, but be sure to allow for price differences due to pools, decks, carpeting, window treatments, etc.

At the auction itself, resist the temptation to get into a personal bidding war, just "to beat out the other guy". Have a set price limit and stick to it. Other houses will come along, and you don't have to win the first auction that comes your way.

You should know that the price of a home at auction is typically the loan balance (if foreclosed), plus any back taxes owed, plus legal fees and other expenses in foreclosing the property. This will typically be the opening bid amount, and the price will go up from there. Even so, it's possible to get a great deal in an auctioned house, with a little research and planning first.

Also, know that you probably won't be able to get an inspection, and are buying the home "as is". If you can't do any needed repair work yourself, or can't hire it done within your budget, you may not end up getting such a bargain in the end.

About The Author

Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Article Source: http://EzineArticles.com/

Which Types Of Real Estate To Invest In

2005-10-14T00:24:00.000-07:00

by Steve Gillman

There are different types of real estate, and different ways to invest in them. Which way is best is for you to decide, according to your particular needs. Here are a few ways to consider, with their advantages and disadvantages.

1. Rental houses. Advantages: One of the easier ways to get started, and good long term return on investment. Disadvantages: Being a landlord isn't much fun, and you typically wait a long time for the big pay-off.

2. Rent-to-own houses. Advantages: When you buy, then sell on a rent-to-own arrangement, you get higher rent, and the buyer is usually responsible for maintenance. Disadvantages: The bookkeeping is tricky, and most tenants don't complete the purchase (this can be an advantage too, but it does mean more work for you).

3. Low income rentals. Advantages: The same as with any rentals, but with higher cash flow. Disadvantages: The same as with other rentals, but with more repairs and tenant problems.

4. Fixer-uppers. Advantages: A quick return on your investment, and it can be more creative work. Disadvantages: Higher risk (many unpredictables) and you get taxed heavily on the gain.

5. Buy for cash, sell for terms. Advantages: You get a high rate of return by paying cash to get a good price, and selling on easy terms to get a high price AND high interest. Disadvantages: You tie up your capital for a long time.

6. Buy land, split it and sell it. Advantages: It is simpler than most real estate investments, with the possibility of great profits. Disadvantages: It can take a long time, and you have expenses, but no cash flow while you wait.

7. Boarding houses. Advantages: You can get a lot more cash flow renting a house by the room, especially in a college town. Disadvantages: You can get a lot more headaches renting a house by the room, especially in a college town.

8. Commercial real estate. Advantages: Long term triple-net leases mean little management and high returns. Disadvantages: Tough market to break into, and you can lose income on vacant storefronts for a year at a time.

9. Buy, live in it, and sell. Advantages: The new tax law means you can fix it up, and sell for a big tax-free profit after two years, then start the process again. Disadvantages: You have to move a lot.

10. Speculation. Advantages: Buying in the path of growth and holding until values rise can yield large profits, especially if you buy low to start. Disadvantages: Prices aren't that predictable, you have expenses with no income while you're waiting, and transaction costs can eat much of the profits.
About the Author

Steve Gillman has invested real estate for years. To learn more, and to see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com