REO

WHY Pick RE/MAX?

There are lots of reasons why you might choose to select one agent or company vs another. Unless you have a best friend or relative who you “have” to use, I would like to show you how I am different. I believe I have an excellent value proposition as to why you would select me as your agent and RE/MAX as your company. I would welcome the opportunity to meet with you and discuss how I can help you meet your housing goals-whether it be buying or selling. Interview a couple of agents, you will see there is a difference. You may wonder how does RE/MAX stack up within the Twin Cities. The attached PDF’s will give you some market share information as well as agent productivity-based on a 2010 compilation of the numbers. While these are just some of the metrics on which to base your decision, success does leave clues. How can I help you?

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Down Payment Assistance Synopsis

Where there is a will, there is a way. There are many many programs today that are city specific. So, the attached synopsis is a multi county foreclosure down payment assistance pool. Basically, there is money available for purchasers of distressed homes. If you want to buy a home and are flexible in which area you make your purchase, we can try to find you some programs.

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Gifts and Grants can be considered towards borrowers funds on certain 3% down conventional loans

Yes, you read that right. I just got an email today from a leading mortgage insurance company that is willing to underwrite this loan. You will need at 740 or better score. But, what an opportunity. In many ways, this is like FHA, but with a little higher credit threshold. The KEY difference, besides credit score, is the lack of an upfront MI (mortgage insurance) premium and as well as a smaller required monthly premium. This product could be a game changer for the MI company and conventional loans.

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Purchase 80/10/10 and 80/5/15 STILL exists

As of this post, the 80/10/10 and 80/5/15 can still be done. While underwriting has allowed it, it has been very difficult to find a second mortgage product that would write a 5 or 10% second mortgage. Well, after many phone calls, we have sourced two lenders who at this time are willing to offer the second mortgage. One is a bank and the other is a credit union. As with EVERY program, the rules can and do change at any given moment. The key to both product is extremely high credit scores and a file that utilizes conservative ratios. If you don’t have at least a 700 score, this might not be something you can utilize at this time. For the 80/10/10, you will need a 740 or better score.

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What Is Your Home Worth Today?

I found a cool resource at http://www.FHFA.gov. If you go there, in the middle of the page you will find something called the Home Price Calculator. You input your home purchase information in terms of State, quarter in which you purchased and the quarter in which you’d like to get the valuation. Next, you hit calculate, and it will show you a chart. While it isn’t specific to YOUR exact home, it does give trends for your area. If you want specific information-specific to your home-within the Twin Cities metro-give me a call and we can discuss your situation. I can then give you guidance on what the value might be.

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Did you know-Current & Future Housing Data

Watch this video-then call me to help you buy or sell a new home or investment property.

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8 Tips For Finding Your New Home

A solid game plan can help you narrow your homebuying search to find the best home for you.

House hunting is just like any other shopping expedition. If you identify exactly what you want and do some research, you’ll zoom in on the home you want at the best price. These eight tips will guide you through a smart homebuying process.

1. Know thyself
Understand the type of home that suits your personality. Do you prefer a new or existing home? A ranch or a multistory home? If you’re leaning toward a fixer-upper, are you truly handy, or will you need to budget for contractors?

2. Research before you look
List the features you most want in a home and identify which are necessities and which are extras. Identify three to four neighborhoods you’d like to live in based on commute time, schools, recreation, crime, and price. Then hop onto REALTOR.com to get a feel for the homes available in your price range in your favorite neighborhoods. Use the results to prioritize your wants and needs so you can add in and weed out properties from the inventory you’d like to view.

3. Get your finances in order
Generally, lenders say you can afford a home priced two to three times your gross income. Create a budget so you know how much you’re comfortable spending each month on housing. Don’t wait until you’ve found a home and made an offer to investigate financing.

Gather your financial records and meet with a lender to get a prequalification letter spelling out how much you’re eligible to borrow. The lender won’t necessarily consider the extra fees you’ll pay when you purchase or your plans to begin a family or purchase a new car, so shop in a price range you’re comfortable with. Also, presenting an offer contingent on financing will make your bid less attractive to sellers.

4. Set a moving timeline
Do you have blemishes on your credit that will take time to clear up? If you already own, have you sold your current home? If not, you’ll need to factor in the time needed to sell. If you rent, when is your lease up? Do you expect interest rates to jump anytime soon? All these factors will affect your buying, closing, and moving timelines.

5. Think long term
Your future plans may dictate the type of home you’ll buy. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in the home for five to 10 years? With a starter, you may need to adjust your expectations. If you plan to nest, be sure your priority list helps you identify a home you’ll still love years from now.

6. Work with a REALTOR®
Ask people you trust for referrals to a real estate professional they trust. Interview agents to determine which have expertise in the neighborhoods and type of homes you’re interested in. Because homebuying triggers many emotions, consider whether an agent’s style meshes with your personality.

Also ask if the agent specializes in buyer representation. Unlike listing agents, whose first duty is to the seller, buyers’ reps work only for you even though they’re typically paid by the seller. Finally, check whether agents are REALTORS®, which means they’re members of the NATIONAL ASSOCIATION OF REALTORS®. NAR has been a champion of homeownership rights for more than a century.

7. Be realistic
It’s OK to be picky about the home and neighborhood you want, but don’t be close-minded, unrealistic, or blinded by minor imperfections. If you insist on living in a cul-de-sac, you may miss out on great homes on streets that are just as quiet and secluded.

On the flip side, don’t be so swayed by a “wow” feature that you forget about other issues—like noise levels—that can have a big impact on your quality of life. Use your priority list to evaluate each property, remembering there’s no such thing as the perfect home.

8. Limit the opinions you solicit
It’s natural to seek reassurance when making a big financial decision. But you know that saying about too many cooks in the kitchen. If you need a second opinion, select one or two people. But remain true to your list of wants and needs so the final decision is based on criteria you’ve identified as important.

G.M. Filisko is an attorney and award-winning writer who has found happiness in a brownstone in a historic Chicago neighborhood. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

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4 Tips to Determine How Much Mortgage You Can Afford

By knowing how much mortgage you can handle, you can ensure that home ownership will fit in your budget.

Here are six surefire ways you can get your finances in order before you buy a home.

Homeownership should make you feel safe and secure, and that includes financially. Be sure you can afford your home by calculating how much of a mortgage you can safely fit into your budget.

Instead of just taking out the biggest mortgage a lender qualifies you to borrow, consider how much you want to pay each month for housing based on your financial and personal goals.

Think ahead to major life events and consider how those might influence your budget. Do you want to return to school for an advanced degree? Will a new child add day care to your monthly expenses? Does a relative plan to eventually live with you and contribute to the mortgage?

Still not sure how much you can afford? You can use the same formulas that most lenders use, or try another of these traditional methods for estimating the amount of mortgage you can afford.

1. The general rule of mortgage affordability
As a rule of thumb, you can typically afford a home priced two to three times your gross income. If you earn $100,000, you can typically afford a home between $200,000 and $300,000.

To understand how that rule applies to your particular financial situation, prepare a family budget and list all the costs of homeownership, like property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care costs.

2. Factor in your downpayment
How much money do you have for a downpayment? The higher your downpayment, the lower your monthly payments will be. If you put down at least 20% of the home’s cost, you may not have to get private mortgage insurance, which costs hundreds each month. That leaves more money for your mortgage payment.
The lower your downpayment, the higher the loan amount you’ll need to qualify for and the higher your monthly mortgage payment.

3. Consider your overall debt
Lenders generally follow the 28/41 rule. Your monthly mortgage payments covering your home loan principal, interest, taxes, and insurance shouldn’t total more than 28% of your gross annual income. Your overall monthly payments for your mortgage plus all your other bills, like car loans, utilities, and credit cards, shouldn’t exceed 41% of your gross annual income.

Here’s how that works. If your gross annual income is $100,000, multiply by 28% and then divide by 12 months to arrive at a monthly mortgage payment of $2,333 or less. Next, check the total of all your monthly bills including your potential mortgage and make sure they don’t top 41%, or $3,416 in our example.

4. Use your rent as a mortgage guide
The tax benefits of homeownership generally allow you to afford a mortgage payment—including taxes and insurance—of about one-third more than your current rent payment without changing your lifestyle. So you can multiply your current rent by 1.33 to arrive at a rough estimate of a mortgage payment.

Here’s an example. If you currently pay $1,500 per month in rent, you should be able to comfortably afford a $2,000 monthly mortgage payment after factoring in the tax benefits of homeownership.

However, if you’re struggling to keep up with your rent, consider what amount would be comfortable and use that for the calcuation instead.

Also consider whether or not you’ll itemize your deductions. If you take the standard deduction, you can’t also deduct mortgage interest payments. Talking to a tax adviser, or using a tax software program to do a “what if” tax return, can help you see your tax situation more clearly.

G.M. Filisko is an attorney and award-winning writer who’s owned her own home for more than 20 years. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

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Minnesota Foreclosure comparison report

A very interesting year over year foreclosure report was just released. It takes the MN foreclosure crisis and breaks down the data into micro data. It is definitely worth looking at if you want to identify trends and opportunities.
http://www.hocmn.org/Stock/Editor/file/REPORTS/2010_YrEnd_ForeclosureCount/2010_Annual_ForeclosuresInMN.pdf

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Two Special Twin Cities Home Buying Programs

One program is called FPP-Foreclosure Partnership Program, and the other is NSP2 Homebuyer Assistance Program.  Both programs offer incentive money for a purchase.  I can use these financing programs with one of our mortgage investors.  Consider checking them out to see if they’d work for you.

HennipenCounty-Non-forclosedHomes-overview

HennipenCounty-Nsp2-overview

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You CAN do an FHA short sale

HUD recently issued guidance on this issue. IF you have an FHA loan, call me and we can work through the discussion of whether or not you may qualify for a short sale. See the HUD letter below.

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HAFA Update-More Beneficial

Apparently the OLD HAFA wasn’t as successful as hoped. Yet, the program had some great attributes. They’ve just tweaked it, and are about to roll out a new improved version. See the sheet between for a comparison. The ability to pay the second lien holder a larger amount to make a settlement is what I feel will allow more HAFA short sales to close.

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Rebuilding Credit To Get A Mortgage

Often, especially in this market due to the recession, we find potential home buyers who have had a life event or “bump in the road” that affects their ability to obtain a new loan. If you want to buy a home, you will have to have a certain number of reporting trade lines and for certain length of time. MOST mortgage programs require 3-5 trade lines and a minimum of two years of reporting. The other criteria is the actual credit score-which generally has to be 620, 640 or even 660 as it is all lender dependent. A manual underwriting where they use alternative credit such as rent payments, cell phone bill, utility bills, and the cable bill might be able to be used-but only with a few certain programs and lenders. So, the best bet is to re-establish credit as quickly as possible. HOW ABOUT NOW!! Don’t wait-it will only extend the time until you are going to be eligible. I have put together a list of resources that might be helpful. This list is only a starting place for your research. If you find another good resource please post it in the comments below so that the list can be expanded upon.

TOP IDEAS FOR CREDIT RE.doc

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Projected Loss Severity Of A Foreclosure-both 2010 & 2011

Short sales are probably going to be the loss mitigation method of choice.  When you look at the loss severity of a foreclosure, you can see why some other method might be preferable.  Look at the Fitch ratings report here and see for yourself.  This may be useful information when negotiating with the banks and servicer.

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Buying Rental Property In The Twin Cities

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Mortgage Insurance May Still Be Deductible For Some Buyers

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Is There An Opportunity Right In Front Of YOU

I just watched an amazing video which I’ve posted below called the Money Tree. There are so many different interpretations. One that struck me was that people are oblivious to opportunity that is right in front of them. How many of us are looking for something that we already have or is within our reach? How many people are NOT buying real estate today when they could be looking at this as an incredible wealth building opportunity for what it is over the long term-assuming properties rise again in value? I was showing homes this past weekend. It was incredible to see townhomes in great communities selling for 40-60% less than they had sold for just as little as 5 years before. Luckily for my client, we are going to make an offer and ACT. Watch this video and don’t let the opportunities in your life pass you by. Don’t let life pass you by. Happy New Year and may 2011 be your best yet!

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December Is The Time To Reflect

Are each of us doing all we can to make the world a better place? Many of us have our favorite charity and organizations we support. RE/MAX is a very large sponsor of Children’s Miracle Network. Many people don’t realize how much has been given. Each time I sell a home, I automatically donate a portion of my commission to this organization. Other RE/MAX agents like myself contribute from their commission checks as well. Together, with RE/MAX we have collectively given over 100M. I would encourage everyone to consider finding an organization they believe in and make giving a part of their life. Just imagine what the world could look like?

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Short Sales Are Today’s Investor Opportunity

Short sales can be win win transactions for everyone. Take a look at the video and give me a call to get started.

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Getting Ready to Sell Your House

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HUD Has A YouTube Channel-Here Is There Vid On Buying A Home

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Google lets you create cool templated websites

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Can Home Ownership Contribute To Your Wealth?

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Minnesota Foreclosure And Distressed Home Fact Sheets PLUS Twin Cities First Time Buyer Special Programs

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What Does The Foreclosure Moratorium Mean To A Distressed Homeowner?

Check out the PDF and share with your friends/family who might need this information.

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Minnesota First Time Home Buyer Tips

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Top Seven Tips For Home Buyers

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The Difference Between Judicial And Non-Judicial Foreclosures

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Foreclosure resource page

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Possible Effects From The Foreclosure Halt

By Rob Minton & John Mazzara

In case you’ve somehow missed it, many of the largest U.S. mortgage servicing companies have halted foreclosures. Ally Financial’s GMAC Mortgage, Bank of America, JP Morgan and PNC have stopped foreclosures in many states – BOA has, in fact, put a moratorium on foreclosures in all 50 states.

Pressing the pause button on foreclosures came as the result of several states’ attorneys general inquiring into the validity of foreclosure judgments for which mortgage servicers did not properly handle documents.
The “blind stamping” of documents – signing off on documents without really reading them – has come under fire after one manager admitted to signing off on about 8,000 foreclosure documents a month without reading them to verify facts. The mortgage companies have halted foreclosures while they investigate practices in their foreclosure processes.

Of course, it being an election year and all, members of congress are calling for a federal probe of lender misconduct. In the short-term anyway, the halt in foreclosures might give some struggling homeowners a little extra time to get on their feet. It might finally lead to overworked employees at busy banks getting the help they need to properly handle foreclosures, and it should make banks a little more willing to work with homeowners to modify distressed loans. With fewer foreclosures hitting the market, home values in some areas might creep up.

There are some long-term effects, though, that can’t be ignored. And some of them are downright troubling.
First, the halting of foreclosures for any period of time by banks that hold as many mortgages as these firms do is going to stop up the pipeline. Tons of foreclosed homes hit the market over the past two or three years, but there are more coming. Stalling that flow of homes now is going to drag out the process for a longer period of time. That means, for one, likely longer pressure on home values. Most experts will agree: The inventory of unsold homes on the market, many of them foreclosures, has to get smaller before home values will stabilize completely.

The effect on the volume of homes sales could be staggering if the moratorium lasts longer than a month or two, and/or if more servicing companies join the party. Across the U.S., foreclosures make up about 30 percent of all home sales. In California, Florida, Nevada – the states that have been hit hard by foreclosure – they make up a considerably larger percentage of all sales.

It’s also safe to assume that title insurance companies are going to be reluctant to insure titles on homes that have been foreclosed. That could be a huge problem because no lender is going to make a loan on home without an insured title. And what happens if the bank has already re-sold homes that were invalid foreclosures? Are the title insurance companies going to have to pay the new buyers?

On top of all that, the whole mess is going to make potential real estate buyers even more nervous about the market, which is already dealing with a huge drop in demand since the federal government’s tax credits for home buyers expired. Perhaps the delay in the flood of foreclosed homes to the market will give time for demand to return, but more likely is yet another “doom and gloom” real estate scenario that will scare buyers and investors off.

Hopefully, the big lenders agreement to halt foreclosures was a gesture of good faith made to the attorneys general, a sign that the firms are taking seriously the matter of following proper procedure in foreclosures. Hopefully, investigations will determine that for the most part, the banks are doing things the right way and will be able to move on.

Because while the short-term effects of the halt might seem attractive, a long-term foreclosure problem would not be good for anybody involved in real estate. In Minnesota, the market has definitely slowed, but some of this is seasonal. I think that the foreclosure issue will put more pressure on all parties involved to pursue short sales. Short sales are generally less expensive-in terms of loss-to the lender. Also, a short sale generally is viewed more positively on your credit. So, why aren’t more short sales being pursued? Rather than give you my conspiracy theory and explain who makes money throughout the foreclosure process, I would simply encourage you to follow the money.

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Monitor Foreclosure Fraud From Around The Country

Have you heard of the “think big work small” guys?  Unless you are in the mortgage or real estate industry, you may not know who they are.   In a nutshell, they are awesome.  They produce a 5 minute daily video synopsis of what’s happening in our industries.  Today’s video referenced a new site called http://www.4closurefraud.org I went there to take a look.  It is another excellent resource for anyone who wants to monitor articles and information regarding foreclosure fraud-meaning foreclosures done incorrectly with the likes of robo signers, faulty documentation, and more.  Go there and bookmark for future reference.

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Lenders Are Halting Foreclosures-Temporarily

Not all lenders, but a few of the largest-including Bank Of America- have recently suspended foreclosures in all 50 states. What will be the outcome and when will they move forward again with the process? It is all an unknown at this time. What we do know, is that they may not have processed the paperwork properly. Now, it appears they will be reviewing everything twice before they go forward. Ultimately, the end result will probably end with the home being foreclosed upon if the homeowner is actually behind and there hasn’t been a modification. But for many, this reprieve will probably be a nice relief in this tough economy. Here is a link to a recent article from our local paper http://www.startribune.com/business/104612084.html?page=3&c=y

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Here’s What The Federal Reserve Has To Say

There is an interesting report from the Federal Reserve entitled REO and Vacant Properties http://www.bos.frb.org/commdev/REO-and-vacant-properties/REO-and-vacant-properties.pdf You can read/download the report at this link.

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Data.gov – A Cool Site With Lots Of Great Info

http://www.Data.gov I just found this site and wanted to share it.  It has a ton of info and reports.  If you have a project or just an “inquiring mind”, this is sure to be a hit.  Check it out and get the data you need.

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Homepath.com is Fannie’s Foreclosure Portal

Fannie Mae posts their foreclosured properties with a Realtor of their choice and also on http://www.HomePath.com.  What is cool about a Homepath property is that many times they will qualify for Homepath loans (requiring only 3% down) and no appraisal.  They also have a homepath Renovation loan.  There is a program called FirstLook, which allows certain selected developers and non profits to purchase these homes for rehabilitation first, so you might loose a home that is really a good deal. Still, don’t let this deter you.  I recently sold a home in Brooklyn Center that was a HomePath property.  It was pretty nice, just a little dirty. Because it was in very good shape, we were able to use FHA financing.  I’ve found that FHA financing is cheaper than Homepath with a minimum down payment.  We’ll have to see if that changes in the future.

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REO Listings and How You Can Find Them Yourself

By Anthony Aires

REO listings are highly visible these days, though they were difficult entities to access a few years ago. Today, people have the knowledge to distinguish between foreclosures and REO bank owned properties. As a result, those interested in REO houses search for specific real estate owned listings at different places and not the foreclosure listings.

Finding listing of REO properties is of interest to direct investors and the REO brokers. So, here is a discussion on how to find these listings and how to use them for REO investing.

REO Listings for Investors

REO brokers are the best source for the investors to find real estate owned listings. As an investor, you must search for a reliable broker dealing in bulk REO properties and sign-up with their services to receive the regular updates on REOs available in the market. Here are some tips to find brokers offering these listings:

• Choose the broker offering listings even in the smallest towns in your region.

• A broker should offer all types of details of the REO property.

• You may also be interested in the brokers offering bulk REO listings available with a seller.

• Consider the reputation of the broker before trusting on the listings offered by him.

Finally, always try to take recommendations from people around you and also from the regular REO investors about the REO brokers in your area.

REO Listings for Brokers

If you are an REO broker, you can obtain REO listings in a number of ways. Getting registered with the asset management companies is the most popular way to obtain these listings. These companies are hired by the banks to help them dispose off the REO properties. You may also subscribe to the services of banks that don’t hire asset management companies but deal with REO properties of their own.

Another way to obtain real estate owned listings is by maintaining good contacts with the asset managers. It is important to build and maintain relationships with the asset managers who give preference to inform you about the latest REO properties added to the listings. You can ask your fellow brokers to recommend your broker service to the asset managers. In fact, being a part of the brokers’ network should help you obtain REO listings. You can learn even more tips in this direction by joining an REO broker training program.

How REO Listings Help?

REO listings help the investors learn about the latest bulk REO properties available for sale. As an investor, you can use these listings to compare the different types of REO houses on the basis of their location, space available with each one of them, number of bedrooms and other such things.

Before you go through the real etate owned listings, it is important that you assess your financial conditions. You must set a budget to set the price you can spend as investment in the REO properties. This will help you choose the listings that have properties matching your budget limits.

You indeed need to spend time and efforts to scan different REO listings available on the web. REO properties are hot and happening investment options and you must search for them at the right places.

Anthony Aires here and I want to help you learn more about REO Listings and how you can find them for yourself. Simply Click Here

Article Source: http://EzineArticles.com/?expert=Anthony_Aires
http://EzineArticles.com/?REO-Listings-and-How-You-Can-Find-Them-Yourself&id=4844633

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Why You Should Invest in REO Companies & REO Properties

By John C Hanlin

What are REO Properties?

“REO” is an acronym that stands for “Real Estate Owned” properties. A loose definition is: homes that have been foreclosed upon and subsequently become the property of the foreclosing bank or lender. REO properties are also known as bank owned residential property, bank REOs, house foreclosures, etc. “REO companies” are businesses that deal exclusively with these investments.

A New Industry Is Born:

Foreclosure has been front page news across America for the past couple of years. And this phenomenon is expected to continue unabated for the next 2-3 years, if not longer. And, as a result, foreclosure property investment has become an industry unto itself. This article is written to help investors understand the REO properties business and most importantly, the best way to profit from this tremendous opportunity: by investing in “specialized REO companies” .

Today, at any point in time, there are several MILLION homes in various stages of foreclosure. As a result, companies that are completely dedicated to the acquisition and resale of REO & bank owned residential property have been springing up all around the United States. These are called “REO companies” or “REO asset management companies”.

Specialized REO Companies Emerge:

As foreclosure properties were just beginning to grab headlines, various investors and real estate professionals began to approach banks and lenders for their lists of bank REOs. When the banks supplied these lists, they also provided the selling prices that they would accept for those homes. There was some negotiation room at that time, but the banks weren’t really willing to drop their prices too much below the amount of their original loans to the former homeowners. At the time, making a foreclosure property investment was basically an informal process done on a bank-by-bank, house-by-house basis.

However, that changed when foreclosures began to sweep across the US like a tidal wave. Banks and other lenders were literally being inundated with foreclosure properties every week and began to seek means to cut their losses and unload these bank REOs. This is because it costs money to hold onto a house with no payments coming in. The banks and other lenders still have to continue to pay fire insurance, maintenance, utilities and numerous other expenses on every one of their REO properties. As a result, they began to reduce their asking prices and became more willing to negotiate in order to unload their ever-increasing inventories — thus, an industry was born.

So, in the American entrepreneurial spirit, specialized new companies began to take shape. These new “REO companies” deal only with “distressed” real estate, including bank owned residential property, homes in various stages of foreclosure and homes that are in jeopardy of foreclosure. An over-simplified description of their business model is that they acquire bank REOs well below the current market value, repair them to “move-in” condition and resell them as soon as possible at a profit.

There are a lot of businesses that like to consider themselves “REO asset management companies”. However, most are not making any money. This is because they lack one or more of the following: experience, strong management, funding/cash flow, relationships with banks and lenders, networks of realtors, contractors and appraisers, etc. However, the REO companies that ARE profitable have ALL of these attributes and proven business processes as outlined below:

What Successful REO Asset Management Companies Do:

1) They request lists of bank owned residential property from their bank and lender contacts. These lists are often provided to these companies before they are released to the general public because they typically will buy in bulk and can quickly reduce the inventory of bank REOs significantly.

2) The best REO asset management companies have networks of associates “on the ground” around the country that physically inspect each of the foreclosure homes individually. They create a file for each property, describing its condition and all relevant details regarding repairs that need to be made and any other pertinent issues (complete with photographs).

3) They have a network of appraisers who will provide a “BPO” (broker price opinion) for each of the REO properties based on its current market value in “as is” condition. This will help them formulate their purchase price offer to the bank.

4) Next, the REO companies will submit their offers to the banks for each bank owned residential property that they believe has good resale potential. NOTE: offers will typically be no greater than 50-65% of the calculated current market resale value of the home. (This is where they make their money!)

5) Upon bank approval, the bank REOs are purchased.

6) Then, the REO asset management companies send in their networks of building contractors to make any necessary repairs to get the former REO properties into “move-in” condition.

7) Finally, the homes are listed for sale via their affiliated real estate brokers around the country. The properties are then typically priced under current market value in order to resell the the former REO properties quickly.

And, believe it or not, some of these REO companies are so efficient that they can buy, repair and resell these home in an average of 4-6 months!

How To Invest In Successful REO Companies:

Professional REO asset management companies will set out to acquire what is called an “investment pool” of bank owned residential property. Typically, they will first seek out investors as “silent partners” to raise a certain amount of capital to help fund the pool. For an example, let’s say they will raise $5,000,000. (This is money from investors like you and me.) The silent investors are not involved in the day-to-day management of the pool. It is a “passive” investment for them.

Once the $5,000,000 is raised from investors, the REO companies will usually go to their lending institution(s) and initiate a new loan for an additional amount of capital — leveraging the $5,000,000 of investor money that they have raised. Let’s say that is another $10,000,000. Now, they have a total of $15,000,000 in buying power with which to acquire bank REOs for their investment pool of homes.

Next, the REO companies will begin the processes listed above in Steps 1-7. They will purchase the “cream of the crop” from the bank REO lists until they reach their $15,000,000 limit. Now they have acquired their pool of homes. (Let’s say 100 homes, averaging $150,000 each.)

As an investor, you would now be invested in this pool of REO properties. When all 100 homes in the pool are finally sold (often within 4-6 months), the pool is closed. At that time, the $10,000,000 loan is repaid and the investors are repaid their original investments (totalling $5,000,000). Finally, net profits are calculated and investors are paid their pro-rated share of the profit.

NOTE: It is not uncommon for the top REO companies to payout HIGH double digit returns in just 4-6 months!

About the author:

John Hanlin is an Independent Investment Consultant specializing in high yield safe investments secured by real estate. He is a seasoned investor of over 25 years. Mr. Hanlin is the owner of the investors’ website: http://www.JohnHanlin.com.

To learn more about investing in REO Companies & REO properties, click on this link: CONTACT FORM

You have full permission to reprint this article provided it is kept unchanged.

Article Source: http://EzineArticles.com/?expert=John_C_Hanlin
http://EzineArticles.com/?Why-You-Should-Invest-in-REO-Companies-and-REO-Properties&id=2424504

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Check Out Energy Rebates

EnergyStar.gov –  Check Out Energy Rebates

This is a government site that offers lots of energy saving tips as well as explains what energy saving grants or credits might be available.

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Foreclosure Trends Newsletter

Here is the latest issue of my foreclosure trends newsletter.  As you can see, the trend is not our friend, in the sense that the housing market has not recovered.  Until jobs come back and people are employed and feel safe in their employment, they will tend to avoid making a committment.

ForeclosureTrends.pdf

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Foreclosed Property Coupon-10% off

When you buy a foreclosed with me as your agent, I will be happy to sign you up for a coupon from Lowes.   It entitles you to 10% off, up to a predetermined purchase amount.  Currently I believe it 10% off of up to a $10,000 purchase.  Of course, this amount and the coupon’s terms and conditions are subject to change by Lowes at anytime.

Besides Lowes, RE/MAX has exclusive deals with Cambria and Pods-to name just few of the suppliers we can help you save money with.  We’ve got your back.  Consider me when choosing your team.

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Twin Cities Foreclosure Trends-From our MLS & Realty Trac

Besides the board of realtor sites:  http://theThing.mplsrealtor.com and market data posted elsewhere at http://www.MplsRealtor.com I have a subscription to Realty Trac.  My subscription gives me additional data about foreclosures and trends within certain zip codes.  This is in addition to my daily subscription to Finance & Commerce (a business newspaper that prints all the foreclosure information as well as very timely articles regarding the business community).  If you are looking for someone who has experience and access to information about distressed sales, we need to be working together.  Whether buyer or seller-I can help you understand the market we are in and the options and opportunities available to you.  Give me call today.

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Real Estate Information

These are a couple of my newsletters that have a ton of valuable information. Go check them out.

Foreclosure Market Trends Newsletter
http://www.realtytrac.com/MarketTrends/NewsLetter.aspx?guid=131bd355-1b69-4bd1-99cd-2f0c9a936810

Real Estate Cyber Space Tips
http://www.REcyber.com/cybertips/r11627

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Understanding HAFA-What Is It & How It Works

This explains what the HAFA is and how it might work for you. This might work for people that are in distress and would like to try and avoid a foreclosure. Here is a link for additional information http://www.CDPE.com/hafa I work with homeowners who need help at this difficult time-let me know what I can do for you.

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Owner Financing – The Foreclosure Process

By Craig Meriwether

One of the great parts of the owner finance home sale is the opportunity to work with the buyer in the case of financial problems. By creating a solution that works for both parties a home owner is more than likely to stay in the house and the loan holder will continue to receive monthly payments. If a solution cannot be created then unfortunately foreclosure might be the only option to take. This article will present a look and some of the different ways foreclosures can be handled.

In some states, the beneficiary can choose one of two methods to foreclose judicial or non-judicial. In a judicial foreclosure, the beneficiary files a lawsuit against the trustor in Superior Court to foreclose on the property. The case is then set for trial. If the court rules in favor of the beneficiary, the property will be ordered sold at a public sale. In most instances, however, it is a non-judicial foreclosure. In a non-judicial foreclosure, the court system is not involved. To foreclose non-judicially, the deed of trust or mortgage must contain a power of sale clause. The power of sale clause gives the trustee the right to begin foreclosure without going to court. To include a power of sale clause does not require a specific form or language.

If, on the other hand, the security instrument does not contain a power of sale provision, judicial foreclosure is the beneficiary’s only way to obtain the property. Most conventional deeds of trust say “with the power of sale”.

Judicial and non-judicial foreclosures differ in many ways. The foreclosure method selected by the beneficiary has significant consequences for the trustor.

Non judicial foreclosure is relatively fast, as this method does not involve the court system. In most instances, non-judicial foreclosure takes, at minimum, about four months after the trustor has failed to meet the obligation or defaulted on the loan. Judicial foreclosure, on the other hand, may take up to several years.

Non judicial foreclosure is generally less costly than judicial foreclosure. In a non-judicial foreclosure, the trustee’s and attorney’s fees are largely specified by law. In a judicial foreclosure, however, there are generally no legal limits for attorney’s fees. As a result, the trustor may be liable for significant legal expenses.

Another major difference between the two foreclosure methods is the beneficiary’s right to a deficiency judgment. A deficiency judgment is a court order stating that the trustor still owes money to the beneficiary if the proceeds from the foreclosure sale are not sufficient to pay the balance of the debt.

Some state laws do not allow a deficiency judgment in a non-judicial foreclosure on residential purchase money loans. A residential purchase money loan is one in which loan proceeds are used to purchase the property. Furthermore, state laws do not allow deficiency judgments against the residential trustor where the loan was made by the seller of the property or by a third party lender (often a financial institution) on a four-unit or less residential property that is the principal residence of the trustor. If the beneficiary judicially forecloses on a non-purchase money residential loan, a deficiency judgment may be obtained against the trustor.

Non-judicial and judicial foreclosures also differ with regard to the trustor’s right of redemption after the foreclosure sale. This is the trustor’s right to reclaim the foreclosure property. In a non-judicial foreclosure, the sale of the property at the trustee’s sale is an irrevocable final sale, and the trustor does not have the right to redeem or reclaim the property after the sale. Judicial sales, however, are subject to redemption by the trustor.

This summary of the major differences between non-judicial and judicial foreclosure shows the advantages of non-judicial foreclosure for the beneficiary. The non-judicial foreclosure is timely, economical, non subject to redemption, and may command a higher sales price. In addition, it is unlikely that the beneficiary would recover any losses through a deficiency judgment, as the trustor could not make the loan payments in the first place. Because of these advantages, beneficiaries typically prefer to foreclose non-judicially. Beneficiaries might foreclose judicially when they see an opportunity to recover any losses through a deficiency judgment.

The following two sections give detailed information on each of the foreclosure methods.

Non-Judicial Foreclosure

This section describes the major procedural requirements of non-judicial foreclosure, discusses the trustor’s reinstatement and redemption rights, reviews legal provisions for trustee’s fees and summarizes special legal provisions affecting foreclosures in many states.

Many states allow the beneficiary of a deed of trust containing the power of sale provision to foreclose non-judicially after the trustor has defaulted on one or more contractual obligations. In case of default, the beneficiary may order the trustee to initiate foreclosure.

Notice of Default

Foreclosure begins when the beneficiary notifies the trustee that the trustor has defaulted on any obligations stated in the promissory note and deed of trust. The beneficiary gives the trustee information concerning the condition of the debt such as the amount of the unpaid balance and due dates. Upon receipt of this information, the trustee prepares the Notice of Default.

The Notice of Default must be recorded in the office of the recorder of the county where the property is located. If the deed of trust encumbers property located in more than one county, the Notice of Default should be recorded in the other counties as well.

The trustee must mail a copy of the Notice of Default to the trustor and to each person requesting notice within ten days of recording the notice. The law specifies additional notification requirements under certain circumstances. The Notice of Default must be published weekly for four weeks in a newspaper or personally be served on the Trustor, if the trustor has not requested to be notified of its recordation of the notice

Trustor’s should always notify the beneficiary and the trustee of any address changes to ensure prompt receipt of any correspondence from the beneficiary or trustee.

Before January 1, 1986, the trustor and beneficiaries under subordinate deeds of trust were given three months from the recordation of the Notice of Default to cure the default. An amendment to the law extended the expiration of the reinstatement period to five business days before the scheduled trustee’s sale. If the trustee’s sale is postponed, the reinstatement period is extended to five business days before the new date of the sale.

At any time during the reinstatement period, the trustor may stop the default by paying the beneficiary all sums of money due on the loan up to that point including additional costs incurred by the beneficiary, and attorney’s or trustee’s fees as specified by law. It is not necessary to repay the entire loan balance.

After reinstatement of the loan, the foreclosure proceeding is discontinued and the trustor resumes making the regular periodic payments.

Notice of Trustee’s Sale

If three months have passed since recording the Notice of Default, and the trustor has not begun to reinstate the loan; the trustee may proceed with the foreclosure by preparing a Notice of Trustee’s Sale.

The Notice of Trustee’s Sale must be recorded in the office of the recorder of the county in which the property is located at least 14 days before the date of the sale. As with the Notice of Default, the Notice of Trustee’s Sale must be mailed to the trustor’s last address actually known to the trustee.

The Notice of Trustee’s Sale also must be published in a newspaper of general circulation in the city, judicial district or county where the property is located. The notice must be published once a week over a 20-day period before the sale.

In addition to mailing and publication, the Notice of Trustee’s Sale must be posted for at least 20 days before the sale at the following locations:

o In at least one public place in the city, judicial district, or county in which the property is to be sold; and

o In a conspicuous place on the property to be sold

Improperly broadcasting the Notice of Trustee’s Sale typically will result in the cancellation and re-notice of the sale.

As mentioned before, the trustor can cure the default during the reinstatement period that runs up to five days before the schedule sale. After the reinstatement period expires, the trustor must pay the entire indebtedness plus foreclosure costs to avoid foreclosure. This is called redemption and only can be done during the five days before the sale. The trustor’s right of redemption ends once bidding at the foreclosure sale starts.

Trustee’s Sale

The trustee or the trustee’s agent must conduct the foreclosure sale at a public auction in the county where the property is located. The sale is to the highest bidder who must pay in cash, cashiers check or cash equivalent as specified in the notice and acceptable to the trustee.

The trustee may postpone the sale at any time before it is completed. The sale may be postponed at the trustee’s discretion, upon instruction by the beneficiary, or upon a written request by the trustor who has the right to request a one-day delay to obtain sufficient cash to pay the debt or bid at the sale. The trustor’s request for postponement must include a statement identifying the source of the funds. The law allows for three postponements. After three postponements, a new notice of sale must be given, except for postponements requested by the trustor or ordered by a court.

After the sale to the highest bidder, the trustee executes and delivers a trustee’s deed to the purchaser. The trustee’s deed conveys title to the purchase free and clear. The issuance of the trustee’s deed terminates the previous trustor’s legal and equitable rights in the property. It should be noted, however, that title to the property is conveyed subject to all senior liens, including liens for property taxes and assessments.

The purchaser of the foreclosed property is entitled to take immediate possession. A trustor who refuses to vacate the property may be legally forced to do so.

Rent and Rental Income

Generally, the trustor occupying the property does not have to pay rent to the beneficiary while in default. If a deed of trust should indicate a rent liability, enforcement of it would be unlikely.

The beneficiary may have a right, however, to any rental income generated by the property during the period of default. In the absence of such a provision in the deed of trust, the beneficiary is generally not entitled to any rental income.

Deficiency Judgment

In General, the law prohibits a deficiency judgment in a non-judicial foreclosure with a power of sale provision. Even if the proceeds from the foreclosure are inadequate to repay the loan, the beneficiary has no other possibility to recover.

Trustee’s Fees

The fees a trustee is entitled to charge the beneficiary or deduct from the proceeds of the sale are prescribed by law. The trustee may charge for costs incurred in recording, mailing, publishing, and posting of Notice of Default and Notice of Trustee’s Sale; the cost of postponing the sale by request of the trustor (not to exceed $50 per postponement) and the cost of a trustee’s sale guarantee. In addition to charging for these actual costs, the law provides for a fee schedule based on the amounts of the unpaid debt.

The legal limitations for trustee’s and attorney’s fees do not apply to attorney’s fees the beneficiary is entitled to recover under special provisions of the deed of trust.

Special Legal Provisions

Special federal and state laws may affect the manner in which the foreclosure is conducted. If the loan is insured or guaranteed by the U. S. Department of Housing and urban Development (HUD! EHA) or the Veterans Administration (VA), certain procedures must be followed. In the case of a VA-guaranteed loan, the trustor may be liable for any deficiency, unless the veteran obtains a release of liability from the VA. California law does not necessarily protect the trustor from liability for a deficiency on a VA guaranteed loan. Federal laws governing the VA loan program take precedence over any conflicting California law. Trustors should contact the VA for details concerning their rights and to learn about specific requirements.

Judicial Foreclosure

Judicial Foreclosure is tried in some state Superior Courts. The beneficiary, upon default of obligation by the trustor, brings a foreclosure lawsuit against the trustor. If successful, the court will issue an order to sell the property at a public sale. The beneficiary must use judicial foreclosure if the security instrument does not contain a power of sale provision. A mortgage or deed of trust containing the power of sale provision may be foreclosed judicially if the beneficiary chooses to do so.

The decision to foreclose judicially or non-judicially is not necessarily final. The beneficiary may discontinue judicial foreclosure at any time and commence non-judicial foreclosure.

Conversely, the beneficiary may abandon non-judicial foreclosure and initiate judicial foreclosure. Beneficiaries sometimes initiate both types of foreclosure simultaneously.

Foreclosure Sale

A court-appointed commissioner or sheriff in the public place must give notice of the sale of the property for 20 days preceding in the date of the sale. This same notice must be published in a newspaper of general circulation weekly for 20 days. The notice also must be sent by certified mail to all defendants at their last known addresses.

At the foreclosure sale, the property must be sold by the auctioneer to the highest bidder who is financially qualified.

Redemption of Property

In a judicial sale, the trustor has the right to redeem or reclaim the property after the foreclosure sale. For a trustor, the right of redemption makes a judicial sale attractive. It should be remembered, however, that a judicial sale might also lead to a deficiency judgment. This possibility does not exist in a non-judicial foreclosure.

Deficiency Judgment

In a judicial foreclosure, the beneficiary has, under certain circumstances, a right to a deficiency judgment. The deficiency judgment is limited to an amount equal to either the difference between the indebtedness and the fair market value of the property, or the indebtedness and the sales price at the foreclosure sale, whichever is less.

Rent and Rental Income

The trustor occupying the disputed property does not have to pay the beneficiary rent while in default. The beneficiary may be entitled, however, to any rental income generated by the property.

After the sale, the trustor retains possession of the property and does not have to pay the beneficiary rent while in default. The beneficiary may be entitled, however, to any rental income generated by the property.

Craig Meriwether is owner of Kula Investments, a company founded you help you get top dollar for you owner financed real estate loan. [http://www.ioubuyer.com]

Article Source: http://EzineArticles.com/?expert=Craig_Meriwether
http://EzineArticles.com/?Owner-Financing—The-Foreclosure-Process&id=2140489

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The Advantages of REO Investing

By Crystal Faith Dumangas

The country’s current economic conditions have consumed the real estate market with foreclosed homes. As thousands of properties are being reclaimed due to non- payment of loans, bank owned foreclosures have gained a strong reputation and popularity amongst real estate investors. Here are some reasons why purchasing an REO is a wise option if you are thinking of investing in a property.

Reduced value, no tax liabilities

The value of a REO is much reduced compared to their real worth which makes it a lucrative venture for home buyers. The banks become liable to pay taxes on the properties so they very anxious to get rid of these as soon as possible. The banks will offer better deals than they would offer on traditional properties and most often the properties will be available below the market price. The bank will also provide discounts for certain repairs.

Once a property becomes an REO, all liens against the property are removed and taxes are brought to current. This makes REO investing a secure venture compared with other real estate deals.

Saleable properties subject to inspection

Many foreclosures are often in deplorable condition. However, REOs are usually restored to at least a readily salable condition by the bank and evict the tenants, making it attractive to buyers. REOs can also be inspected prior to contract unlike properties at foreclosure auction. You can inspect the property before giving an offer to the bank. You are granted full access to the property and all utilities will be made available for you and your inspector. Most importantly, your deposit is returned and the contact voided if f you’re not comfortable with the condition of the house and do not want to proceed.

Easy low interest financing

One of the best features of REO investing is that buyers can get low interest financing from the same bank which makes the deal highly feasible. Sometimes, property lenders may even be willing to finance the property at less than market value. You may also get loan if you have a good credit record then. Most of the banks require only 10% down payment if the property is to be used as rental.

Fast transaction, more opportunities

Another great aspect of flipping REO properties is that the time spent for your deals is cut in half. There is no need to wait for a bidding to start. The deal moves pretty fast once you’ve agreed on the price. Negations are normally quick as banks have no emotions involved. This means less time on each property and more deals for you to get into.

Did you like this article? Crystal is a single mother who works at home. She shares her experience in the challenges of single motherhood and writes tips to working at home in the Philippines on her blog. She is also an SEO and freelance writer who creates unique articles for various websites.

Article Source: http://EzineArticles.com/?expert=Crystal_Faith_Dumangas
http://EzineArticles.com/?The-Advantages-of-REO-Investing&id=4549227

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Outstanding Video-An Inspiration To All-Be The Best You Can Be!

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Twin Cities Home buyer book

Thinking about buying a home but don’t know where to start? Why not start by reading the home buyer hand book that we have provided below. It is a great place to start to get the information you need. When you’re ready, we would love to help you find and finance a new home.

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The Short Sale Process For A Seller

This ppt. will explain the basics involved in a short sale. Today, lenders are starting to put in place systems that will make the short sale process work smoother. This presentation covers what is generally involved.

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Grant Available In MN For Foreclosed Homeowners

I’ve just learned of a grant of up to $3500 that is available for people who have lost their home to a foreclosure and need some cash to help with the transition of moving on. This is only available to metro area residents in the Twin Cities. The Target Foundation put up most of the funds and all monies are available on a first come-first served basis and is for relocation assistance. Go to

http://www.Hocmn.org

to learn more. On a national basis, visit

http://foreclosure-response.org

for more information on options and programs.

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HAFA Is Here & NOW- Additional Assistance On Getting Short Sales Completed

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How A FEW Are Profiting HUGELY From A Government Sweetheart Deal

If you haven’t been getting much success with a modification and wonder why-maybe this video will help explain things.  As an agent who works really hard to keep people in their homes FIRST, I found this very upsetting.  I can tell you many many people who would have stayed in their homes, albeit at a reduced payment if they had some payment relief.  Instead, lenders foreclosed or forced a short sale and ultimately lost a lot more than the interest differential.  It is sad to think that even one family might have had to leave their home because of a profit incentive that encourages it.  Here is the video:  http://www.thinkbigworksmall.com/mypage/archive/1/29027

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What Happens When They Come For YOU

While this posts title is just a play on the TV show COPS, it is possible that if you sell a home short or have a foreclosure that results in a loss, that the lender could pursue a deficiency judgement.  In MN, they are doing this more often.  The LAST thing I am giving anyone is tax or legal advice.  Just be aware of the fact in MN, lenders can choose how they foreclosure.  A judicial foreclosure can result in pursuing a deficiency vs a foreclosure by advertisement.  There are resources like http://www.HOCM.org which provide Minnesota consumers with information and possibly assistance with trying to figure out options and repercussions.  Research the Mortgage Tax Forgiveness Act of 2007, extended in 2009 until the end of 2012.  Also call the IRS at 1800-829-1040 or visit them online at IRS.gov

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Items Necessary to Submit a Short Sale Package

Just because you owe more than your home is worth does not mean that you will be eligible to do a short sale.  The key is being able to show that you qualify based on a acceptable hardship.  The lender needs you to explain your situation in a hardship letter.  With that, there are items they will need.  These items include the following:  A financial statement showing what your current assets are and what your expenses happen to be, A couple of recent paystubs if you are employed that show your year to date income, all pages of your bank statements, your two most recent signed tax returns, asset statements like 401K & IRA’s, and a list of any other liens that encumber the property title such as back real estate taxes, second mortgages, third mortgages, and IRS tax liens that are recorded against title.

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Minnesota Deficiency Judgements Due To Mortgage Defaults Appear To Be Increasing!! Be Careful!

I recently read an article about the banks pursuing judgements after a short sale or foreclosure. The Minnesota home ownership center is FANTASTIC. They have lots of great information. Here is the link to their article:
Minnesota Home Ownership Center: Sued – After A Foreclosure

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Open Source Documents-Unbelievable Resources-Find YOUR topic of Interest

If you’ve never visited http://www.Archive.org, you are missing a wonderful site.  From this site, you will find many resources that are out of copyright and you can download and use them as you wish.  You will find all the classics and some fun things as well.  Just for fun, I have the download of a book called “Little Gardens” which is a book about setting up a garden on a city lot.  This is just one of the MANY fun things you’ll find.  You can download and watch old music, movies, and cartoons as well.  Plan to spend some time on the site should you decide to visit, as it is very cool.  Click here to download the book Little Gardens

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FHA Loss Mitigation Options For Those With FHA Loans

Here is the latest FHA Mortgagee letter that explains what options are available for people in default with their FHA mortgage. There are options, you need to explore them if you are in danger of losing your home.

FHA Loss Mitigation

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Sell Your Home Faster-Learn The Home Selling Secrets Of Successful Sellers

Here is a special report that outlines over 450 ideas on how to sell your home faster.  This report is just one of the many home buyer, home seller, and investor reports that I can make available to you.  Read this report and call me to arrange a time to see how I can help.  Download Now

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Real Estate Investing in Rental Properties

There are many ways in which a person can make a living when it comes to real estate investing some of them carry more risks than others. It goes without saying that those that carry the greatest risks are often the very real estate investment methods with the highest potential profit but slow and steady, in many cases, wins the race. Flipping houses is in the news a lot because so many fortunes have been made doing this-more than a few have been lost in this venture as well but those don’t make the news nearly as often.

Working with rental properties isn’t nearly as glamorous and doesn’t provide the almost instant profits that flipping houses might but it is also a great and very valid method of real estate investing that will build a steady profit over time if you plan properly. Rental properties are in demand now more than ever with so many people going into foreclosure and losing the homes they’ve worked hard to build for their families. For this reason rental properties are a good thing to own at the moment, especially those that are family homes.

There are many reasons that people rent and while there are some risks involved when renting properties, the risks are much lower than the risks involved in flipping or pre-construction investment endeavors. There are a few things you should consider when purchasing a property for the sake of renting however in order to make a wise and long lasting decision for your real estate investment.

First, only invest in rental properties in areas that people want to live in. It may be true that you can buy property cheap in a few very run down sections of town but it is doubtful that you will turn those properties into profitable rental units. It is best to pay a little more for a more attractive address for renters. You will find that your properties are inhabited more often, which will make you more money in the long run.

Second, pay attention to the types of people in the area and buy rentals accordingly. It is quite possible to turn large homes into multiple smaller apartment units (according to local zoning laws) that are ideal for college students. You do not want to do this however in an area that is geared towards family homes and won’t be friendly or tolerant of college students. Design the rentals according to the market you are attempting to attract.

Third, don’t be greedy. The goal of owning rental properties is of course, to make money. At the same time if your price your properties too high you will find that they sit empty more often than not. Every month that your property is empty is a month that you aren’t making money on that property at best and a month that you are losing money at worst.

Fourth, know the market. Study the local market for buying real estate and renting real estate. This will help with many things, not the least of which is determining whether or not any given property will make an attractive rental unit. Another thing it will help you determine is how much rent the units you are considering can bring in month after month.

Finally, when renting properties you need to keep your eye on the long-term goals rather than shortsighted goals. Property rental is a marathon rather than a sprint with the greatest profits coming at the end. You will want to pay as little interest on the property as possible and pay the property off as quickly as possible in order to realize the maximum profit potential and acquire new properties. The real money when renting properties as a real estate investment isn’t in renting out one or two units but twenty or thirty. The more rental properties you own the more money you stand to make from owning them.

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Pros and Cons of Flipping Houses

If you have watched countless shows on television about flipping houses and making tons of money in a very short amount of time you’ve probably thought to yourself that you could do that and possibly wondered why you haven’t. If you are considering entering into the world of real estate investing through the role of one who flips houses there are a few pros and cons that you might want to carefully consider before taking the plunge.

Pros

Potential profits that are large and relatively quick. Those who flip properties as a sole source of income can make in a few months what the average worker in this country makes in an entire year. The potential profits are great in this line of work for the successful house flipping team.

Being your own boss. This is within certain limits of course are some areas have strict zoning ordinances and code requirements that must be respected and adhered to when working on a house. Even so you maintain a large degree of control over all the decisions having to do with the flip.

Getting to work with power tools. There is that little kid in most of us that really loves the idea of playing with power tools. In fact, that is the deciding factor for many who have gone into this particular field of real estate investing in the past.

It’s hands on. There are all kinds of different investments that you can put your money into but very few allow you to pour your heart, soul, blood, sweat, and tears into them the way that flipping a house does.

Cons

Risk. Real estate is a risky business in its own right. When you add the skills that are needed in order to flip a house, the wide variety of things that may go wrong during a flip, and the volatility of the market in general there is so much that can go wrong when it comes to flipping a house. You must be prepared to walk away with less than nothing in order to make the high dollar profits that a successful flip can bring to the table.

No easy out. If you invest in stocks that go bad it is possible to pull your money out of that stock and go somewhere else. It is a little more difficult to do this when it comes to a house flip. You need to be prepared to see it through to the finish if you begin flipping a house.

Expenses. It’s expensive to flip a house. You will need to come up with no small investment of your own in order to do this. It will take careful planning and diligent adherence to those plans in order to successfully flip a house but the rewards for your significant financial investment are most often well worth the effort.

Physical labor. For many first time house flippers who are accustomed to office jobs the aches and pains and inexperience of muscles and hands to certain jobs prove painful both physically and financially. Not everyone is as skilled as the next guy when it comes to physical labor, carpentry, painting, installing floors, hanging cabinetry, and countless other skills you will be called upon to perform while in the process of flipping a house. You will occasionally need the help of skilled professionals and on occasion need large doses of your favorite muscle ache ointment.

Despite all the pros and cons many people around the world embark on their first house flipping adventure each and every day. The allure of quick rewards often outweigh the need for cautious prudence. But for many of these people their efforts will pay off. Are you ready to take the plunge or have you decided that a safer difference between you and the power tools just might be the best bet? If you decide to go the distance and flip your first house I wish you the best of luck.

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Pre-Construction Real Estate Investing

If you have the heart and soul of a gambler or love extreme sports and activities such as skydiving or bungee jumping then you may be the ideal candidate for pre-construction real estate investing. Pre-construction profits are often among the highest in the industry.

At the same time so are the risks. You will find the greatest highs and lows that can be found in the field of real estate investing lie beneath the umbrella of pre-construction profits and many of the big names we know so well in the real estate investing field have made much of their fortunes through speculation and pre-construction sales.

Before I go any further, one word of caution should be spoken. While the potential for profits in this particular corner of the real estate market are unconventionally high the risks are also abundant. This is speculative real estate at its very best and as we have all learned in the past, when the bubble bursts in a specific market those who have the most invested are the ones who often loose most heavily.

As far as what pre-construction real estate is there are a few interpretations. The first is also the most obvious. You are buying real estate at some point before construction is complete. In hot markets you will often need to purchase the units before ground has broken on the project in order to get the lowest price for your investment and highest potential pay off for your pockets. Once you’ve purchased the unit or units you plan to sell you then begin seeking buyers for those units.

In markets that are on fire like some Vegas suburbs and big retirement and vacation cities along the Florida coastline the same property is not exactly uncommon for a property to change hands and have several owners before the unit is complete. Each one will take a little something home from the table for their efforts with those who get in earliest often taking the largest piece of the pie home with them.

You may be wondering why this occurs and the answer really is simple. When the contractors attempt to get funding for their buildings in these large complexes they often need to have a certain percentage of the units “pre sold” in order to convince the banks that there is an adequate market and to garner some of the revenue that is needed to get the venture up and running, so to speak. So real estate investors buy these units at rock bottom prices because essentially they are paying for the idea of the unit (which hasn’t at this time been built and isn’t yet approved to be built in many cases) rather than a brick and mortar property.
As the project draws closer to completion, particularly in markets where real estate is in high demand, the value of the property rises dramatically ending in ridiculous profits for those who have managed to hang on.

The risks however are many. There are any number of things that can go wrong on a project such as this not the least of which is that the demand for housing will be met before the unit is actually built. This has happened and continues to happen. Also recessions, business closings, economies collapsing, and tragedies in the vicinity can occur before the property is complete leaving everyone who has invested heavily in the project holding a little bit of the bag and loosing their profits and, quite possibly, their investment.

These projects generally take a great deal of time to complete which makes the risks that much greater and the anticipation of these events a little more difficult to map out ahead of time. If you can manage to make it through however many investors see more than a one hundred per cent return on their investment making it a popular type of investment among many despite the rather large risks involved.

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Multiple Streams of Income in Real Estate Investments

It doesn’t really matter what kind of investing you are participating in, it’s almost always a wise idea to have multiple streams of income in order to maximize your profits while spreading your risks. Even within the confines of real estate investing there are different types of investing that can help you spread your risks when markets meet turbulent times and this is a very good safety net for those who do not want to feel as though they are gambling away their investments on a real estate market that is fickle on its best days.

You really have two course of action when it comes to bringing in multiple streams of income when building your financial portfolio. The first is to spread your real estate wealth and investments across several different types of real estate investments. There are a few types that come immediately to mind. First there are rental properties. You have two options even with these. You can either choose to rent properties outright to families, students, singles, and the elderly in your town or you can offer a lease or rent to own situation for those who have struggled in the past but still have the dream of home ownership.

Other options for bringing in multiple streams of income through real estate is to have a few rental properties and couple those with a few flips in the works, perhaps a commercial property or two, and a pre-construction deal or vacation condo in the pipelines. One thing is certain you should always be on the lookout for your next real estate investment if you really want to make good money in this business while having a little added security. Rentals are passive income for the most part, especially if you have a solid property manager taking care of the details and the other investments are often icing on the cake.

If you want a truly diversified portfolio however, it is a good plan to include a few investments that aren’t related to real estate investing. While I firmly believe that real estate investing is the way to go for most people there is much money that can be made in other fields and it would be pointless to discuss multiple streams of income without mentioning a few that were unrelated to real estate investing. Retirement plans are a great option and you can now invest in a retirement plan of your own even if you are self-employed. It is definitely worth considering as yet another stream of income, even if it is income that you will need to wait a while to receive. Franchise businesses are often great money makers for those who need more immediate results from their investments efforts, and stocks and bonds are also great long term investment strategies.

The truth is that there are many things you can do to create even more streams of income to add to your real estate investments. From making money online through affiliate marketing, blogs, and direct sales you can also tackle brick and mortar businesses, though these tend to be just as time consuming as real estate. The point is that you want to bring in money from different avenues and real estate investing is one of many different routes to explore when deciding on your investment future and establishing those multiple streams of income.

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Managing Money During a Flip

Money management during any real estate investment venture is an essential skill. If this is your first time flipping a property it is probably more important on the first flip than any other as you need to fully realize how much things cost and how quickly those expenses can up. It is so simple for the budget on a house flip to get completely out of control. For this reason you need to take control of the financial situation from the very beginning.

Begin by establishing a realistic budget for the entire project. If you find yourself spending more money in one area than you had originally planned you need to either revisit the initial budget and plan for adding more money to the pot or you need to make cost lowering adjustments elsewhere along the way to recover the excess. You will need to have a firm idea of the projects you are going to tackle, big and small, as well as the costs involved in each project. Take a walk through a hardware store and get a firm grasp of today’s prices on the hardware, equipment, and supplies you will need to complete the job.

Use contractors when necessary but sparingly. There are times when it will cost much less to use a contractor on a project than to muddle through on your own. There are also times when local laws require a contractor. You need to use contractors for these times but you need to avoid paying the princely labor costs contractors charge for things that you could easily do yourself. You never want to spend a penny on a flip that you don’t need to spend and labor costs are a huge budget buster.

Get permits first and up front. Time is money when you are flipping a house and once you start the work that time is precious. Make sure you have all the permits you need and that they are paid for before you begin the project in order to save time and money after the project has commenced.

Then create a habit of accounting for every penny spent throughout the day at the end of every day. This becomes a good habit to have for your first and all subsequent flips. By doing this you will have a solid grasp of how much money you are spending as well as how quickly you are spending it. You will need money to spend on little things throughout the course of the project so if you are spending money too fast up front you may not have the money needed to take care of the small details that mean a lot when all is said and done.

One huge way to better manage your money during a house flip is to make a conscious decision and consistent effort to work according to your tastes. Chances are quite good, especially for a first flip that you will be working on a house for those who have less financial means than you may have. For this reason you need to keep your project within the budget of your buyers. This will save tons of money. In other words a lower income community cannot absorb the costs of granite, marble, and hardwoods in most situations so don’t go to that expense.

In order to turn a solid profit when flipping a house or doing any type of real estate investment you absolutely must have a firm grip on your money, where it is going, and what your plans are for the money. The less money you spend the more money, in many cases you stand to bring home in profit. Spend the money you need to spend in order to improve the value of the home but avoid luxury expenditures that aren’t necessary for the neighborhood or the home in question in order to maximize the potential profits you can bring home.

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Real Estate Investing-Everything You Need To Know!

I came across this e-book and I wanted to share it with you.  I thought the information was useful, the rolodex link in the back of the book with investor resources was incredible.  I think you will enjoy it-it is a pretty light read.  If you get all fired up and want to start looking for property, just give me a call.

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Avoiding HUD Home Headaches: Tips On Buying HUD Foreclosures!

Bidding & Buying on Minnesota HUD homes—it seems to be the hot ticket in town.

However – Remember these key points to avoid problems and advise buyers:

•    Only primary residence buyers allowed in the first round of bidding.
•    Determine if the home is being offered as eligible for Minnesota FHA financing:

o    Has an existing FHA appraisal that must be used (unless expired)
AND
o    The sales price has usually been based on the existing appraised value.  Bidding above the sales price may result in them paying the difference out-of-pocket between their bid and appraised value.

•    HUD does not automatically provide title insurance.  Make sure that the lender has disclosed this additional     expense to avoid surprises at closing.  Only if HUD has agreed to pay closing costs, could the insurance be provided at HUD’s expense.

•    If HUD is offering a repair escrow, that this amount can be ADDED to the MN FHA loan, but HUD doesn’t pay for it.

•    Lender documents must be to the title company up to 10 days prior to closing date in some states.

•    HUD signs closing packages first.  Then once the loan proceeds and the title company receives buyer down payment and closing costs, the buyer is allowed to sign.  Make sure that the lender is aware and has the ability to fund the loan BEFORE they have a completed loan package.

•    Closing delays are common due to “title clearing” issues. Foreclosed homes can have several liens due to utilities, taxes; etc that must be dealt with before closing can take place.  Minneapolis HUD Homes are a great investment when the buyer is prepared from the beginning for all potential challenges, such as rescheduling of moving trucks, and possible rate lock extension fees.

When you work with experienced professionals like John Mazzara with RE/Max Associates Plus in Edina Minnesota and Patti Mazzara with Venture Development Inc, a MN Mortgage Broker, you will get the guidance and straight-forward answers that make the process easy to understand. Let our experience help you through your home purchase.  Visit http://www.minneapolisstpaulhomes.com and http://www.ventureloanapp.com/

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Introduction of Home Affordable Foreclosure Alternatives – Short Sale and Deed-in-Lieu of Foreclosure

This is FANTASTIC NEWS!!!  FINALLY, they are establishing minimum requirements on resolving the short sale procedural process.  Here is the link to the government news release:

https://www.hmpadmin.com/portal/docs/hamp_servicer/sd0909.pdf

Short Sales have been difficult to close, and these new measures are a huge step in the right direction. One major highlight: A lender must give a yes or no answer to an offer within 10 days. Also included: a moving allowance, incentives for sellers and lenders, commission rules, and a stipulation that releases sellers from debt liabilities.

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RECENT News Release: Legal Service Plans Can Benefit Homeowners Facing Foreclosure

Pre-paid legal recently had a news release that explains how their service may benefit homeowners who are in distress and facing a foreclosure. We sell the PPD Pre-Paid Legal service plan at our website https://www.prepaidlegal.com/Multisite/Multisite?site=hub&assoc=mazzara You probably want to look at the family plans unless you are a small business. You can visit the site, watch the video, and learn more. I not only sell the plan, I am also a user of the plan. I think PPD is great based on my own personal experience. I have called upon them to answer questions and they have been of assistance over the years. If you have questions that aren’t answered online, call me.

Read the news release here:
http://www.prnewswire.com/news-releases/legal-service-plans-can-benefit-homeowners-facing-foreclosure-70452157.html

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Extension And Expansion Of Home Buyer Credit-4/30/2010

A Big WOW!!  The credit has been expanded to include homeowners who have owned their home for the past 5 years. No longer do you need to be a first time buyer.  The dollar limit is $8000 for first time buyers and $6500 for move up buyers.  This GREAT news.  Combine this with 50 year lows in interest rates, and you’d be crazy not to consider making a move.  If you feel secure in your job, think hard about buying  home at this time.  We can help you make the right move. Visit this site-which is from the National Association Of Home Builders  http://www.federalhousingtaxcredit.com/faq2.php This site give you all the rules and regulations as they now apply.

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Why Foreclosure Is Often Preferred By The Loan Servicer Instead Of Offering A Loan Modification

Have you ever wondered why a foreclosure occurs when a better solution might have been a modification?  Would you like to read the facts and figures and see how mortgages are bundled, sold and serviced?  You will soon see it is isn’t pretty, we are in the midst of a crisis, and it is likely to get worse before it gets better.  That being said, you can probably guess why-it’s about the money.  It is a little more complex than that-the report is 60 pages-but is explains the incentive and disincentives that are at conflict within the mortgage market today.  Once you understand how all the pieces go together, you can see that something “different” needs to be done.  I am a strong free market believer, but in this case, the government needs to have a mandate and rule that is guided towards keeping people in their homes.  Left to current industry solutions, the mortgage mess will continue to play out and get worse.  If you click on the link below, you will find the free report from the National Consumer Law Center.

http://www.consumerlaw.org/issues/mortgage_servicing/content/Servicer-Report1009.pdf

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Home Buyer Tax Credit Information Update

It’s now official!! The tax credit has been extended and expanded. YOU NEED TO HURRY! You now have until the end of April 2010. The following summary of the credit is provided by the National Association Of Realtors. The following two documents cover the changes in the new law. Now get out there and buy a home!!

NAR FAQ: Homebuyer Tax Credit Changes
NAR Issue Brief: Homebuyer Tax Credit Changes

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Freddie Mac Foreclosure Prevention

Are you wondering what the government has to offer as far as resources? Here are a couple of links that will hopefully help you make the right decision. There MAY be options that will help you avoid a foreclosure.

http://www.freddiemac.com/avoidforeclosure/

http://www.freddiemac.com/avoidforeclosure/stop_foreclosure.html

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Postponing a MN foreclosure-New Law

MN allows a foreclosure to be postponed, but there is a tradeoff-shortening the redemption period. This may help someone who is able to get back on their feet and catch up with the back payments. Click Here

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Minnesota Real Estate Newsletter Gives Access To Great Computer & Life Tips

I maintain a number of real estate sites, blogs, and newsletters. One newsletter that provides a number of computer tips to help you function better with a computer is http://www.REcyber.com/cybertips/r11627 The site is full of cyber space tricks and great places to visit. We have link to this site on the list of MN Real Estate links, but I wanted to highlight this particular newsletter because it different from what most agents provide. From this newsletter, you can also access all the back issues-from 2001 and beyond. It is really quite a useful resource-spend some time there if you have a chance.

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Buy A Minnesota Investment Property With Confidence

RE/MAX has put together a “how to guide” on how to buy investment property. Since knowledge is power, get the guide and brush up. It’s your money-get the information you need to become a successful Minnesota investment property investor.

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