Monthly Archives: January 2012

Jan 07

Why Foreclosures?

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Some might ask, why invest in foreclosures?  You have to have money, a good job, and good credit, right? It is so saturated out there with investors, there is no way I will find a foreclosure, right?  First let’s get rid of all these fallacies, and focus on why you will love investing in foreclosures.

The beauty of foreclosures and real estate in general, is that you do not have to have money, a good job, or even good credit to start investing.  Don’t get me wrong, it is easier to structure deals if you have money, however, real estate is a very creative business.  So creative in fact that you can structure your deals “nothing down” or no money out of your pocket and anyone who tells you differently probably does not know much about investing.   I would like to encourage you, even if you have money, to structure your deals with “No Money Down”.  This doesn’t mean no money is required when purchasing properties, it means you will be using other methods of getting money, other than your own, to purchase these properties.

There are huge profit margins in foreclosures.  You can purchase properties anywhere from 20 – 40% under market value.  This is what makes foreclosures so attractive, because you can still sell the property to a buyer under market value and make a substantial profit.

At the time of this writing, interest rates are among the lowest they have ever been since the 1960’s allowing many individuals to qualify for a loan.  This is great for you as the investor, because you need buyers looking for great deals.

On the flip side of that, one reason for the low interest rate is because there have been a tremendous amount of economic hardships.  People are losing their jobs and forced into foreclosure.  Therefore, foreclosures are at an all time high right now, and there are plenty of them to go around for everyone.  You just need a little knowledge on where to find them and a strong desire.

Even though at the time of this writing foreclosures are at an all time high, it seems that the foreclosure market is one that will always be around.  Even when times are good, and the economy is flourishing, there will still be homeowners who fall behind on their payments forcing them to look for a way out.  History shows foreclosures have been around many years ago, and will continue for many years to come.

Finally, one of the best reasons to invest in foreclosures is because it can give you the freedom to do what you want, when you want, with whomever you want.  You are your own boss.  You can spend as much or as little time as you want and there is no cap on your income.  You can choose to quit your job or if you enjoy what you are doing, this could be another source of income for you.  If you have a spouse that works, he or she can invest with you full time.  If you have a family, this can free up your time to spend with them, and even give you the lifestyle you’ve always wanted.

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.

Jan 06

Buying Bank Foreclosures – What To Do If You Want To Buy A Cheap House

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There are many people around today who want to purchase property but do not have enough money to do so. So rather than entering into a binding contract to purchase a new home, why not look at purchasing a bank foreclosure property instead?

Bank foreclosure properties are those which have been foreclosed on by the lending company or government because the owner has failed to keep up payments on either a loan or mortgage on the property. Because the legal process regarding foreclosures is long and complicated the bank or finance company will be looking to sell the property right away in order to get the money that is owed to them from the proceeds of the sale.

Although foreclosure is sad for many people it should not stop you from purchasing one of these properties. Buying a bank foreclosure can turn a sad thing into a great opportunity for you.

The best way to secure a foreclosure home is to utilize the various sources that are available and which will lead to the funding that you require.

All banks will have a listing of their foreclosures and there are plenty of agents and brokers around who can help in finding bank foreclosure properties for you. The Government also posts announcements on any public auctions that they will be holding. Plus why not carry out a search on the internet – there are a wealth of sites where you can gain information with regard to foreclosed properties and bank foreclosure properties.

As you will see the above sources will lead you to venues and properties that will help you to get details of foreclosure properties and it is best if you utilize these sources as much as possible if you are seriously looking to invest in bank foreclosures or any other foreclosed property.

Other people decide to look for their own pre-foreclosure properties and will then contact the owner of the property directly. But a word of warning where this type of property is concerned. The case relating to the property may be a prolonged one and you may be waiting some time before you can actually purchase the property.

The best way to invest your money where bank foreclosures are concerned is stick with the ones which have already been foreclosed.

The good thing about bank foreclosure properties is that you can get the best deal for a house which you would not ordinarily get for such a price on the open market. Most of the time such properties are sold at a lower market price so that the bank or lending company can dispense with them more easily. Often such properties will be sold for between 5-50% of their total fair market value.

When buying a bank foreclosure property the proceeds will go to the bank right away and will be used to pay off the outstanding debt.

Below are a number of points to consider when thinking of investing in bank foreclosure properties:-

1. Are you going to sell it or keep it? When looking at foreclosure properties you need to decide whether you will be reselling it or keeping it. This will help you to find the right sort of property as some of the houses available can be easily repaired and then sold on.

2. Repair and Resell. Many of the foreclosed properties available are being sold because the previous owner was suffering from financial problems and the upkeep of the property is usually not maintained. Often this is a reason why such properties are sold for lower prices than the market value. It is important that you carefully consider this aspect when looking to purchase such a property and whether you will be able to earn a profit from it.

3. Carry out research. Carry out a little research in order to make sure that the property you are buying is a good investment. Unfortunately some inexpensive properties sound too good to be true. It may well be the case that they will not make you any profit despite the repairs you carry out to them, because of where they are located or the neighborhood around them. It may be wise to seek help from a property assessor to make sure that the property you are looking to invest in is a good deal.

As you can see investing in bank foreclosure properties is a great way to get on the property investment ladder. So do not hesitate to investigate and utilize this option when looking to invest in foreclosure properties.

Jan 04

Foreclosure Investing – Secrets of Finding Private Money

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You can acquire foreclosure properties by going to the bank and getting a loan. One of the challenges with that is you can only get so many loans in your name. As of this writing conventional lenders will only allow you to have 4 loans in your name. This article explains what I did instead: found private money.

The people you’re looking for are private individuals who have money to invest in real estate. Many of these people may currently keep their money in CDs, mutual funds, IRAs, etc.

Why do they put money into these types of accounts? They want a good return on their investment. If you can offer them a higher return than they’re currently getting on their CDs, money market accounts, etc., do you think they’d be interested in talking to you? Absolutely!

However, here’s one of the challenges. These people are not knocking on your door. You’ve got to go find them. Just like the creative real estate business is a numbers game, so is the ability to find private investors.

Are they hard to find? No. It’s simply a numbers game and it takes a little detective work to ferret out these investors–but you’d be surprised what can happen in a year.

In order to be successful, though, you’re going to have to put CONSISTENT effort into finding this type of person. If you’re not putting in the effort of finding funding partners, you’re probably in the wrong line of work. However, if you’ve got the attitude of I know I can, I know I can, I know I can, and will take massive amounts of action to find these private investors, you will do very well in this business and you will find your investors. And as long you continue to find properties that are profitable to the private investor the money will stick around. You’ll even start to get calls from these investors wanting to invest in you and your business if you are successful.

Private investors are relatively easy to find. You can find them by talking to people and telling them what the type of investor you’re looking for. Believe me, if you offer the type of returns that the creative real estate business can offer, the word will spread like wildfire that there is a person out there who can give above average returns on investments in a very short amount of time.

One of the easiest ways to get in front of private investors is to meet with all the private professionals that you know.  Do you have a doctor, a CPA, a lawyer? All of these people are great to start with. You’d be amazed at the amount of money that your CPA deals with on a daily basis for his clients.

You may say to yourself, “I don’t have the experience or track record to find private investors. Why would these people give me any money?” However, if you can offer them X amount of return on investment, secured by at least 70% to 80% loan-to-value on real estate, you’re going to find these people. Money follows opportunity. And in this case, you are the opportunity.

Show your potential private investor that you’ve done your homework. Provide them with the details they need to see. Provide them with the projected profit, and give them the peace of mind that you know what you’re doing. Believe me, if you continue to produce returns that excite them they may offer you more and more money and they will have friends that will do the same. It just takes time.

Just remember that most private investors who lend you money are interested in a return on their investment.  If you happen to make more money than you thought you were going to make on a deal, throw the private investor a little extra. Put a little more on the top. Whatever it takes to start using a private investor, use one.

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Paul Wells has been investing in foreclosures full-time for more than 5 years. To ask Paul a question, go to his Foreclosure Investing blog here: http://www.AskPaulWells.com

Jan 03

How To Find Out About Real Estate Foreclosure Properties

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Today investing in real estate foreclosure is considered to be one of the most intelligent and well thought out strategies for gaining money and getting rich. The procedures that are used for mortgage foreclosure provide us with 2 opportunities in real estate foreclosure when a suitable agreement can be made.

The first choice you have is to purchase the property when it is at the pre-foreclosure stage. The other choice is to purchase when the property has been foreclosed and it is at the auction stage.

During both these stages you will be in communication with property owners who have to sell their property or they are likely to lose it without getting anything for it. So as these people are beginning to run out of luck and are eager to sell they will offer large discounts to those who are willing to purchase the property from them. Another benefit of using this method is there is less risk involved with a real estate foreclosure as you will have ample time to carry out any research, work on sales comparables of similar properties as well as judge the property itself. Plus with these kinds of properties the competition for purchasing them is less severe and you do not need mess up deals when you are purchasing a real estate foreclosure property. So as long as you can strike up a good deal then you are likely to make a significant saving on such a property.

When planning to purchase a real estate foreclosure it is important that you look at all available investment opportunities via this process in depth. If the property is heading towards foreclosure but is still in the pre-foreclosure stage then you will be directly in contact with the seller. Although this is a no lose occasion for both parties there are a couple of drawbacks to this method. The first being that you may find it difficult to find a foreclosure homeowner, and secondly you could face tough competition from others who are interested in making that all important investment purchase which may well increase the price of the property.

The other method which can be used to purchase a real estate foreclosure is at auction. The biggest advantage of a real estate foreclosure auction is the potential profit it can provide to you the investor, especially if there isn’t a great deal of competition for the property. However be wary at such auctions as it is possible to over bid on such properties.

So when looking for a real estate foreclosure property there are plenty of places you can look for them and there are plenty of online sites which provide you with details of real estate foreclosure listings. You can go online and evaluate these foreclosure list sites and find which ones offer you the best value for money when looking for real estate foreclosure properties.

Jan 03

House Foreclosure – How To Find Them And Make Awesome Profits Today

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There are thousands of investors around the world who have now taken the opportunity to turn property investment into a full time career.  For some the best way is to find a house foreclosure, purchase the property and then sell it for a substantial profit.  For some they are now able to purchase a property in the morning, then sell it in the afternoon to someone else.  If you wish to profit from house foreclosure then all you need is a bit of savvy and follow the tips which are outlined below.

Be Informed
There are plenty of websites that promise to you give you information on homes that are pending foreclosure for a small fee but you will be just one of many people in your area who will be looking for a similar investment opportunity.  So carry out as much research as possible and learn about where house foreclosures are before they get listed online.  Make contact with local realtors, community officials or the county seat where tax information is kept if you want to find out ahead of the competition when someone is about to be foreclosed.  But if you don’t have a lot of time available, using an online foreclosure listing service may be a good option to save time.

Get to know your neighbors
If you know your neighbors then it may be that one of your neighbors is going through a difficult time and you don’t want to rub salt into their wounds by bringing up their problems in front of everyone.  So why not just hand them a business card and explain that you may be able to help them out.  If you come across as being considerate towards their situation then more than likely you will receive a favourable response (not necessarily straight away but at a time when your neighbors have had time to consider their options and then realized that there is no other route they can take).

Advertising
Place ads either online or in your local newspaper and mention that you are a foreclosure specialist and are willing to help people avoid foreclosure by selling their home to you.  For such people if they know that they can sell their home without having to pay realtor’s fees then your service will seem pretty attractive to them.  This is especially true if they have no financial burden once the mortgage has been paid off.

As you can see anyone can profit from house foreclosures and with the number of house foreclosures rising all the time it is a great opportunity to invest in a profitable future.

Jan 02

Pre-Foreclosures – Profitable for Investors

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Homeowners faced with major changes in their financial situation are often faced with foreclosure as well. Foreclosure is the process where by the creditor or bank works to make the homeowner or person on the loan pay the amount owed. Pre foreclosure is the grace period the bank or creditor allows the homeowner to come up with the money owed. If the owner is not able to come up with the money during the pre foreclosure, the lender may take back the house and resell it to the open market or in a public option.

Pre foreclosure is a vital time for the homeowner and in such a difficult situation, they may be under stress. Various situations such as job loss, divorce, health problems could have precipitated the foreclosure process. No homeowner really wants to lose the equity they have put into their property. They may be worried, angry or overwhelmed with the circumstances facing them. The grace period of the pre-foreclosure can allow them a bit of time to come up with the money or consider other options.

Boon to Investors

Many real estate investors work on pre-foreclosures or property that is ready to be auctioned or sold during this period. It enables them to get some property at up to 20 to 40 per cent under market value. If the local market is good, they can easily turn the property around for resale and make a profit or hold it as a rental as the market improves. There are classes, books and tools to help people who invest or buy pre-foreclosure property. It is important that the person looking to buy pre-foreclosure homes look into any other liens the property may have on it.

By selling their home at this time, the property owner may end up with some extra money from the equity depending on the buyer. The homeowner also saves their credit history. If they sell their home during the pre-foreclosure period, they avoid having the foreclosure on their credit history. The investor may find the prospective clients on lists and approach the homeowner directly. It usually takes several tries to get in touch with the person, as they may be stressed and or going through hardship. Sometimes the investor approaches the person in pre-foreclosure through a real estate agent that deals with foreclosures.

Flipping property has become a trend in the U.S. as the buyers market heated up and interest rates were low. Those with the financial means will continue to utilize pre-foreclosures as a way to increase their investment assets.