» Example of How to Negotiate a Short Sale » Posted by Realestator
Yesterday, we discussed what is a Short Sale. Today, let’s show an example of How to Negotiate a Short Sale. In theory, the bank already knows it is facing a Short Sale situation if they try to sell the property either at auction or on the open market, so you will be saving them time and hassle of doing that by offering to pay off the loans. But not the face value. This is how you regain some of the equity in a property, and this is why Short Sales can be profitable to real estate investors. Let’s say you’ve found a homeowner who has two mortgages on their property for a total of $100K. The 1st is for $80,000, and the 2nd is for $20,000. The house, however, now has a Read More
» What is a Short Sale? » Posted by Realestator
Many people keep hearing the phrase and are asking, “What is a Short Sale?” Depending on the area you are interested in purchasing in, many homes that are going into foreclosure will have mortgages that are more than the property is worth. This situation is called being “upside down.” When a homeowner finds themselves in this situation, they have very little recourse. If they place the home on the market, and they owe more than it is worth, then they will have to make up the difference between what they sell it for and what they owe the bank out of their own pocket. Also, they must pay the realtor if they sell it the traditional way. Obviously people who are losing Read More
» Knowing How to Structure a Successful Foreclosure Deal » Posted by Realestator
Knowing how to structure a successful foreclosure deal is critical if you will be using this Buying Method. Usually it works one of Two ways: 1. Offer the seller “Cash to Walk”. Simply ask the seller, “What do you need to walk away with?” You’d be surprised how little some people want just to be rid of the headache and heartache. They know they don’t have a lot of equity anyway in some cases, so you would be doing them a favor, and at the same time saving their credit. 2. Propose an “Equity Split,”. This is the most common way these deals are structured. For example, the seller has a $260K mortgage that is $15K behind in payments and Read More
» Add to Your Real Estate Portfolio with Foreclosures » Posted by Realestator
Yesterday, I outlined the Foreclosure Process Timeline. So how can you, the Real Estate Investor, add to your Real Estate Portfolio while helping someone save themselves from Foreclosure? Typically not in the First 90 Days. That’s because finding these homeowners at this stage is next to impossible, and mentally they are not ready to accept the loss they are potentially facing. The Second 90 Days is the absolute best time to find these homeowners, because remember, the 90 Day Notice of Default has been posted publicly. You can sign up for services, for a small monthly fee, that will send you a list of these Notices on a daily basis so you know who to contact. Also, the Read More
» What is the Foreclosure Process Timeline? » Posted by Realestator
If Foreclosures are a Buying Method you are interested in, then understanding the Foreclosure Process Timeline is critical. I have outlined it below: First 90 Days: During this time, no payments are being made on the mortgage. More than likely the homeowner has either had a life altering event (job loss or reduction of income, divorce, death in the family), or their adjustable rate mortgage has reset, and now their monthly payment is more than they can afford. Now someone never having been in this position might think that the logical thing to do would be to take some kind of action right away and call the lender to negotiate. But it may surprise you to learn that 3 out of 4 people in Read More
» 8 Ways to Find Distressed Sellers » Posted by Realestator
Where do you find Distressed Sellers? There are many different techniques investors use. Here’s a list of some of them that may work for you: Read the classified ads and look for desperate language like “OWC” (Owner Will Carry) or “Seller Negotiable.” Pick a neighborhood you really want to buy in and look for “For Sale By Owner” signs. Leave post cards that say “I Buy Houses” on the front door or on parked cars at houses with For Sale signs. Advertise with signs or newspaper ads that say “I Buy Houses.” Get a list from your realtor of homes that have been on the market for longer than 3-4 months. Call landlords with For Rent ads in the newspaper and ask them Read More
» How to Make Money in a Distressed Seller Market » Posted by Realestator
We’re currently in a Distressed Seller Market. These types of sellers are often called “don’t wanters” - they simply don’t want the property anymore, the headaches, the payments, the deferred maintenance, the tenants, etc. etc. ANYMORE! In order for an investor to make money from a distressed seller, usually the homeowner must be willing to give away some or all of their equity in the deal. If there is no equity, then they must be anxious enough to sell for what they owe on the property, otherwise they’ll be faced with doing a Short Sale and possibly being foreclosed on. Some distressed sellers are created simply by being put in a situation they Read More
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