Successful real estate investing means knowing how to spot a bargain and getting to it before everyone else has a chance. That is the big secret to real estate investing that the big investors know and those who try to invest never understand. You can still make money in real estate flipping and rehab properties if you understand the concept of successful real estate investing.
When you flip properties, you actually buy the property and hold onto it for a short period of time before turning it over to another buyer or investor. The best way to do this in this market is to buy rehab houses, although there are still wholesale houses that do not need any work that can be purchased below market value, if you know where to look. The trouble is that most people do not know where to look. Nor do they have the time to hunt down each lead.
Thinking of working with an agent? Chances are that by the time the property has gone to an agent, it has already been scoped out by other investors who deemed it to be a poor bargain. Plus you have the agent’s commission to think about.
Successful real estate investing means being there first and not last. That is all there is to it. Know your market, know the value of the homes in the area and subscribe to a list that will allow you to know when these homes become available. Whether you want to buy rehab houses or just wholesale houses that are priced below market value because of pending foreclosures, you can do so if you subscribe to a wholesale properties list and know the market. This is the best way for you to be come successful at real estate investing.
Detroit – Over the last several weeks I’ve noticed a substantial increase in the number of loan modification companies being investigated by various government agencies.
All I can say is that it’s about time.
Now don’t misinterpret that statement – I believe that loan modifications may be part of a viable solution in getting our country out of the current housing crisis, although it’s too soon to determine their actual long-term effectiveness.
I also have nothing against loan modification companies in general nor the people that work at them. I’ve met or connected with many individuals that are intent on really helping people and do their best to do so.
Lastly, many homeowners do need some type of assistance as lenders don’t have their best interests in mind when they do loan modifications and many lenders draw the process out seemingly forever.
On the other hand, I’ve personally heard many stories from homeowners victimized by loan modification companies, have heard the same stories from mortgage associates and have read many more on the internet.
From Subprime to Loan Mods
I predicted over a year ago that loan modification companies would become the new subprime “churn & burn” debacle. This was triggered by my observations that many local subprime loan originators were flocking to do loan modifications. I even heard several stories of these originators approaching the same clients they’d put in subprime loans, with offers to now do loan modifications for them.
There really is no barrier of entry to do loan modifications. All you need is a phone and the ability to find clients. Finding clients is easy with so many homeowners struggling with their mortgage payment.
This should all sound familiar as much of it applied to the mortgage industry in general until recently, when state governments started requiring individual licensing of loan originators and the federal government created a national registration system.
When Michigan enacted its Loan Officer Registration Act, April 1, 2009, the state expected 10,000 to register based on past data. To date only 3141 have met the requirements of 24 hours of class time, passed a multiple choice test and background screening. How many of the unregistered do you think are now using their limited mortgage knowledge to do loan modifications?
Desperate People do Desperate Things
One would think that a homeowner, burned by a bad mortgage, would be a bit more cautious when considering a loan modification.
The number of loan mod companies popping up however, prove otherwise. It’s basic supply and demand – the numbers of these companies wouldn’t be expanding if there weren’t desperate homeowners to support them.
So, how do homeowners get burned by these companies? In no particular order:
Paying upfront fees for a modification never completed. Being told they’ll get a principal balance reduction, when in reality it rarely happens. Getting approved for a modification that raises their payment or insignificantly lowers it. Following advice to not contact their lenders during the loan mod process, only to get foreclosed on. Not being made fully aware of the possible credit damage, legal issues and tax consequences.
It’s all boils down to these companies over-promising and under-delivering.
What Took the Government So Long to Act?
If I saw this problem coming over a year ago, you’d think the smart people in our government would’ve saw it coming also.
In a recent informal poll of mortgage originators by “Think Big Work Small”, 81% responded that over 50% of those doing loan modifications are “rats”.
Unfortunately, just like with the mortgage meltdown and the banking crisis, the government only seems to act after the damage has already been done. Here’s a list of the agencies currently chasing loan mod companies:
Federal Trade Commission United States Attorney’s Office for the Central District of California Arizona Attorney General’s Office California Department of Justice California Department of Real Estate State Bar of California Colorado Attorney General’s Office Idaho Attorney General’s Office Illinois Attorney General’s Office Iowa Department of Justice Kansas Attorney General’s Office Maine Attorney General’s Office Maine Department of Professional and Financial Regulation, Bureau of Consumer Protection Maryland Department of Labor, Licensing, and Regulation, Office of the Commissioner of Financial Regulation Massachusetts Attorney General’s Office Michigan Attorney General’s Office Missouri Attorney General’s Office New Jersey Attorney General’s Office New Jersey Department of Banking and Insurance New Mexico Attorney General’s Office, Consumer Protection Division North Carolina Department of Justice Ohio Attorney General’s Office Oregon Department of Justice Texas Attorney General’s Office Washington Attorney General’s Office
Charges are being filed because of deceptive and/or false advertising (Section 5 of the FTC Act), charging upfront for services before rendered, unlicensed activities, mail fraud, attorney misconduct and several others.
Solutions
The Obama administration really needs to step up and address this issue quickly. The crooks and sharks need to be forced out of the industry to protect homeowners. Honest professionals also need protection – from overzealous government agencies. It’d be a real shame if those that were actually doing good things for homeowners were put out of business, fined or jailed.
An easy to implement option would be to allow loan modifications to only be done by licensed mortgage companies and attorneys. The mechanisms are already in place across the country to control this.
A better solution would be for the administration to create a national solution instead of letting all 50 states come up with their individual plans.
For a list of the loan modification companies currently be investigated, click here and then click on “preview”.
Drew Sygit writes and speaks about the mortgage & real estate industries. He holds mortgage industry designations CMPS, CMC, CRMS, CMLO, CALO, has an MBA and is an approved industry instructor. He?s presented, spoken and/or written for HUD, Financial Planning Association, Financial Planners Association of Michigan, Michigan Association of CPA?s, Institute of Continuing Legal Education, Oakland Real Estate Investors Association, North Oakland County Board of Realtors and numerous industry publications. He also publishes his own blog: http://drewsmortgagenews.blogspot.com. He can be reached at dsygit@TheLendingEdge.com.
September 3, 2010 Comments Off
We all know that several of the solid multi-millionaires are made by owning real-estate. There is a reason to why an investment in Real Estate is solid as rock (or must we say bricks and sticks!) because the underlying asset is a ‘Real’ asset as compare to in many cases they are derivatives or contracts of options.
There are several ways to create wealth from Real Estate:
Residential Real-Estate – Buy/Hold. Flip, Rehab, Notes, Buy-Lease, Buy-Owner-Finance and so on. Commercial Real-Estate – Build, Acquire and Manage strip-malls, office-buildings. Multi-family Real-Estate – Build, Acquire and Manage multi-family apartments, apartments homes, Mixed-use Real-Estate – Mix of multi-family, retail and some commercial
All have their merits and de-merits like any other investments. Multi-family becomes a great investment because those who cannot afford to purchase a house need to rent it. So there is always demand and it may vary based on where the property is located and what amenities are provided with the rental.
Another reason why Options 2, 3 and 4 are more attractive because these assets’ are valued based on not market-place and location but more importantly cash-flow. In other words, the cash-flow takes care of the location, amenities and proximity to other facilities such as retail shops, transport station and access to highways.
Off-course, like any investment for it to be successful money-maker, the asset has to be acquired or built at ‘right’ price. One thing the recent recessionary market has taught our ‘loose-lenders’ is to evaluate the asset value very closely. This due-diligence by the lenders actually helps the investors because they know that the lenders, unlike in the past, will not bloat the market-value of the property.
Working with the right acquisition company and developers is the key. Many of the so called ‘gurus’ claim to be doing a great job of taking investment dollars and purchasing the assets at not so good prices, at least not a good price for the investors for sure. If the ‘gurus’ are so good at acquiring these properties, they did not have to go around spending millions in marketing to make multi-millions by charging students for their so called training classes. Well, not all the ‘gurus’ are same either.
It is also important how the loans are acquired and whether or not the investor and investors’ dollars are at risk. There are all kind of loans out there. The one who makes the most out of those is the lender itself and then makes it a ‘recourse-loan’. The right investment house is able to get great loan terms and ‘non-recourse’ hence protecting the Limited Partnership that may be acquiring the property as well as the investors.
If one does not have an experience in investing, it is a good idea to understand the terminology and pitfalls before investing. A well-managed Class-A multi-family asset can provide returns in mid to high teens easily. Off-course, it is not easy to make that claim across the board since there are lot of variables so be sure to do your own due-diligence before investing in an asset and in the market.
The key drivers that would drive the occupancy are: (1) Job Growth and (2) Infrastructure Growth. For example, there is a lot of infrastructure and employment growth in Texas triangle – Dallas, Austin and Houston. These are certainly hot places to focus for a multi-family investing since it buys more for your dollars.
Vick Kapil of Greenmark Developers has been investing in Commercial projects for the past several years. The corporation brings 60+ years of joint experience in development, acquisition and closing of apartment investments with non-conventional loans and private investing. Greenmark can be reached at http://greenmarkdevelopers.webs.com. The investors are also encouraged to read the blog at http://greenmarkdevelopers.webs.com/apps/blog/ and provide comments or properties (apartments or land) for acquisition.
September 3, 2010 Comments Off
Signs of Recovery – The Dallas real estate market is finally showing signs of recovery. Sales have sharply increased on both new construction and pre owned properties throughout Dallas, Collin, Denton, and Rockwall County. Realtors are reporting buyers are starting to jump of the fence and take advantage of great interest rates and unbelievable deals on homes in Dallas. Another factor contributing to the sudden increase in home sales and buyer confidence is the expected expiration of the home buyer tax credit at the end of November. Many 1st time home buyers are running to the table to secure their $8,000 tax credit in anticipation the program will not return.
Real Estate Appraisals – Agents around the country have reported issues with home appraisals in the past 12-24 months. Many residential sales transactions have fallen apart due to low appraisal values that are below the contract sales price and often below the previous sales amount the current owner paid for the property. This has created problems not only for the buyer and seller, but for the entire real estate industry and has led to a decrease in market value, sales, and confidence in the recent past. Dallas Real Estate is now breaking through these barriers and home appraisals are showing signs of stabilization and growth. Many agents have reported that homes in Dallas are appraising for or above the finalized contract price. This is great news for local and national buyers, sellers, and Realtors. The Fort Worth Real Estate market is also moving forward with positive statistics on homes sales indicating a move away from the recent recession.
The road to recovery will not be without obstacles to overcome. Unemployment continues to effect all areas of business and contribute toward the high foreclosure rates throughout local markets.
September 2, 2010 Comments Off
With the economic situation the way it is and home values down, many people have found that their once perfect credit is now tainted with late fees, over limit fees, closed accounts, and in the worse situations credit cards and loans that can no longer be paid, along with possibly bankruptcy or even foreclosure. However, with all these negative marks on their credit, credit scores are now even more important than before and banks, car dealerships, mortgage companies, and credit card companies are making getting loans and credit even harder than before. Not to mention that jobs, insurance companies, and a slew of other companies are also pulling credit reports now before approving applications or even offering jobs. In the dire straight of the economy the need to repair credit report has become even more imperative than before. Even if you plan to never own a credit card again or always pay in cash, fixing the credit you have is still important and if you can should be done.
Some basic steps to fix your credit to improve credit score are:
Get all your credit reports, from all three agencies, which are Trans Union, Experian, and Equifax Make sure all the information on the reports are correct Fix any and all information that is incorrect, misspelled, or wrong in any way Have any incorrect accounts or information removed immediately Contact the credit bureaus by filling out the appeal form they offer and by phone when necessary Contact all banks and credit card companies to see about negotiating terms to lower your interest rate, payment amount, and to remove all late fees and over limit fees Cancel almost all your credit cars, keep one or two for emergencies, but cancel the rest Close all loan accounts, even if they are not paid yet, close them now as you pay them off If the banks or credit card companies will not work with you, contact a credit repair agency to negotiate terms for you Make sure to make all payments on time from there on out Do not open any new accounts or apply for any additional loans, the extra hits on your credit will lower your score further, especially if you are denied
Credit report repair usually takes time. It will not happen overnight. It will take a lot of patience and due diligence to improve credit score. Making payments on time every month and correcting your credit reports will make the biggest difference. Also, again do not apply for more credit. Every hit on your credit report lowers your credit score even further. Remembering that it will take time and not to become frustrated or give up. Following these simple steps to repair credit report will pay off over time. After a year or two you will see definite improvements on your credit reports and probably in your business relations as well. It is never a hopeless situation, no matter how bad your credit report looks, it can be repaired. Information does fall off after a few years and you can get your credit back on track and in good standing again.
September 2, 2010 Comments Off
According to data by expert economists, America is in a recession. In economic terms, a recession happens when the gross domestic product (GDP) shrinks for at least two consecutive quarters.
By definition, U.S. economy has been in a recession since December 2007. So, what does that mean for VA loans? Is the VA Home Loan Guaranty Program resilient in an economic slump? And, like conventional loans, are there fewer VA loans now or more? Because the Program is resilient, there are more VA loans being made now.
In fact, there are several factors that have helped keep VA loans strong even in this recession: recent improvements in veterans’ benefits, the VA outreach program, and the abilities of private mortgage lenders to implement the VA benefits in a down economy.
Since the Veterans’ Benefits Improvement Act of 2008 was passed into law in October 2008, the guidelines under which VA-eligible borrowers can obtain a home refinance loan are more attractive than ever. First, the maximum guaranty for cash-out refinance loans has been made the same as that for purchase loans. Qualified veterans can now refinance up to 100% of appraised property value. And, the ceiling has been raised for VA’s refinance loan up to $729,750; provided that the loan does not exceed the maximum county limits established. Also, the VA’s authority to guaranty ARMs and Hybrid ARMs has been extended to September 30, 2012.
To protect the Federal Government’s guaranty, the VA has counselors to help veterans keep their homes even in the toughest economic situations. The VA’s outreach program focuses on two groups: those who use the VA loan guaranty program and those who don’t. The purpose of this outreach is to keep veterans in their homes. VA counselors can assist people with VA-guarantied loans to avoid foreclosure. And, they can advise VA-eligible borrowers with other types of loans about the benefits of refinancing to safer and more affordable loan terms associated with VA loans.
Are the VA Home Loan Guaranty Program’s improved benefits and counseling enough to stand up to a recession? A VA home loan is originated and funded by a VA-approved private lender. It’s up to the lender to establish its requirements for making a loan. Lenders must comply with VA income and credit standards when considering a VA home loan application; however, lenders may establish more conservative lending policies. That said, a VA home loan is still one of the only options left for zero-down, 100% refinancing.
Because VA loans are backed by the Federal Government, a VA-approved lender can make VA home loans to VA-eligible borrowers even in the worst of times. VA loan limit guidelines help VA-approved lending institutions determine how much a qualifying veteran can borrow.
In a recession, the VA Home Loan Guaranty Program can be resistant to many factors that drag the economy down. So, those VA-eligible borrowers (who may be in financial trouble due to their current high-rate mortgages) may qualify for VA refinance loans with safer more affordable VA terms.
It’s no doubt that there is a decline in conventional home loans. But, because of their recession-resistant traits, VA home loans may be on the rise. The VA Home Loan Guaranty Program can make it very possible for VA-eligible borrowers to emerge from even the worst economic stench smelling like a rose.
Eric Kandell has helped thousands of U.S. Veterans get approved for California VA loans and Texas VA Loans. Hopefully the article above provides you some insights that help you take advantage of the Veteran Benefits you are entitled to because of your service in the United States Military.
September 1, 2010 Comments Off
One of the best areas available in Texas is urban Dallas. With so much culture, entertainment, nightlife and job opportunities available, great living is easy to find when you lease an apartment in Dallas. For those looking for a great apartment in Dallas, one agency can help- Modtown Realty.
Modtown Realty is not your ordinary Dallas real estate agency. We go far beyond the traditional agency and offer you second to none customer service, comprehensive listings to find an apartment in Dallas that fits your specific needs and since we not only know about urban Dallas, but live here, we also understand the lifestyle that you want to lead. Here are just some of the ways that Modtown Realty can be your most important apartment in Dallas resource.
Modtown Realty offers our clients some of the best services available. We understand that you work hard and don’t want to waste your time looking at apartments not right for your needs. We also know exactly what questions to ask and we won’t waste your time with properties that are beneficial for us to drop on unsuspecting clients. Our job is to find an apartment in Dallas that fits your specific needs.
After finding out what fits your specific needs we will go through our comprehensive listings to find properties with the right fit. We offer one of the most comprehensive listings in all of urban Dallas and since we have our finger on the pulse of urban Dallas we are usually one of the first to know of new properties being listed.
Besides comprehensive listings, before you ever take off work or take the time out of your busy schedule to visit an apartment in person, we will make sure that we offer you images, floor plans, a list of amenities and terms of an apartment.
Our knowledgeable agents are always here to assist you. We understand that many of our clients will have specific needs and require agents that can answer your questions about the leasing process. You can count on our expertise and our real life experience living here in urban Dallas.
Besides all of the above benefits, Modtown Realty also offers those looking to lease an apartment in Dallas our locating services for free as our client. You may even qualify for our $200 cash back incentive that can be used towards your moving expenses.
For more details on finding a high quality Dallas Apartments, Downtown Dallas Apartments, Deep Ellum Lofts, and Dallas Foreclosures, please visit Modtownrealty.com today.
September 1, 2010 Comments Off
Oh here we go again. I heard from another realtor just this week; oh my seller cant sell a property and let someone take over the payments because the bank may use the Due on Sale Clause to ask for all their money. In the same conversation the realtor outlines the sellers best plan of action is to keep dropping the price (who cares that its the sellers $10,000 to $20,000 of equity just being thrown out the window) or rent it out.
Many realtors today without hesitation will suggest to their clients, if you cant sell, just lease it out yet the realtors dont sit down and list all of the ridiculous reasons landlords have been sued and LOST millions over. Renting has been around forever and the risks of being a landlord are just an acceptable risk verses the reward of not making vacant house payments or not letting the home go to foreclosure.
Yet at the same time, those same realtors because they are unfamiliar with owner financing as a selling option will say dont do owner financing its too risky. Oh really? Can the buyer living in the owner financed home sue the seller? Nope, not if you construct the transactions the way I do it. If the buyers dog bites the neighbor kid or the UPS guy, can the injured person sue the seller who provided the owner financing? Nope. If the buyer does something stupid, can he sue the seller who owner financed him the home? Nope. Yet if you substitute tenant and landlord instead of buyer and seller in the above questions. The answer becomes yes to everyone. In every one of those scenarios the landlord can be sued, has been sued and has lost.
So I decided I wanted to issue a challenge to all those Due on Sale Clause Nay Sayers out there. Find me lawsuits pertaining to violation of the due on sale clause. Youll find lots of articles from others saying, oh my gosh dont violate the due on sale clause. But find me some that actually have. I cant find any and Im on my third day of searching.
Id bet if youre someone who says to a seller (who cant sell) rent it out, you say that because renting has been around since the dawn of time. And the risks associated with renting are well known and people take that risk anyway.
I bet no one points out that a 10 year study finalized in 1998 showed that Landlords/Property Managers/Apartment Complexes were the MOST sued business in the United States. Granted only 50% of the landlords lost. But how much did it costs those landlords in time and legally fees to win the battle?
The Due on Sale Clause has been around since 1933. Can you please find me lawsuits where sellers have lost millions due to its enforcement. I cant find them can you???
Forte Properties is a full service real estate company that specializes in Owner Financed homes in Austin, TX and surrounding areas. We know how important the decision is when you have to choose professionals for various needs in your life; we take helping people like you who want to purchase a home very seriously.
August 31, 2010 Comments Off
The Federal Housing Administration is abbreviated as FHA. The FHA was created by congress in 1934 to make it easier for homebuyers to obtain a mortgage. They do this by insuring mortgages for single family and multifamily homes. The FHA mortgage insurance gives lenders protection against loss if a FHA homeowner defaults on their loan. The actual bank loan is made by a private lender, the FHA only insures it. Loans should meet the FHA requirements to qualify for this insurance. FHA and HUD have insured more than 34 million homes since 1934. They’re the largest insurer of mortgages within the world. The maximum bank loan amount for any single family FHA house varies by county, and is usually $200,000 to $250,000.
To qualify for any FHA bank loan the applicant should have at least 2 many years of steady employment, ideally within the same field. Income ought to be steady or increasing. Mortgage payments ought to be 30% or less of the applicant’s earnings. Total finance payments including the new house, auto payments, credit cards and other monthly accounts ought to not exceed 41%. You might only have one federally insured bank loan open at a time. If you’ve had a bankruptcy it must be at least 2 years ago with good credit established after the bankruptcy. If you have had a foreclosure it must have been a minimum of three many years ago. . Applicants which are delinquent on a federal debt, for example a student loan are not eligible for a FHA bank loan. Other credit guidelines apply
Advantages of a FHA bank loan consist of a low down payment, usually 3% but occasionally much less. The interest rate is frequently lower than other types of loans. It’s not necessary to have a perfect credit rating to qualify. Very first time homebuyers can frequently qualify.
The FHA loan isn’t the best kind of loan for each and every customer. Non FHA lenders have programs created to compete for this market. Rather than asking for any FHA bank loan, I suggest asking your mortgage broker for any comparison for various types of loans. The interest rate on a FHA bank loan is negotiable. You will be able to save by using FHA mortgage lenders.
As a research hound, I believe that sense + science go hand-in-hand. I’ve done the homework to bring you a comprehensive hub of
August 31, 2010 Comments Off
Filing a bankruptcy under the chapter 13 is very beneficial in various manners. When a bankruptcy application is filed under chapter 13, applicant is allowed to stop a foreclosure and may pay off his mortgage payment over the time.
The basics of chapter 13 bankruptcy:
When an individual files for the Chapter 13 bankruptcy, he or she gets an opportunity to repay some of the debts with some favorable terms like lower or no interest very unlike to the Chapter 7 where debts are restructured and assets are liquidate regardless of the income used to pay off the creditors. Chapter 13 thus applicable for those debtors who have regular income and are able to pay the bankruptcy adjustments.
If rules are to be visualized, The United States Bankruptcy Code allows a time shield of five years for creditors to pay the debt money back. The entire process of the bankruptcy is carried out with optimum supervision of the court and under an attorney’s guidance.
Chapter 13 bankruptcy filing process
When an individual moves to file chapter 13 bankruptcy, he needs to pay an amount for the court charges and also a case filing fee as miscellaneous fee. This accumulated fee is can be paid this fee in a maximum of four installments or within 120 days of filing of the bankruptcy petition. The process of bankruptcy filing starts with a petition and certificate of credit counseling and the documents having details of assets, income and debts.
In case of Chapter 13 bankruptcy, an individual trustee is appointed to observe the proceedings of the case. After a fortnight of case filing, the trustee arranges the meeting with the creditors where he quizzes the debtors. After the meeting, a crucial plan is developed to pay back the debts to the creditors. To confirm the execution of the meeting minutes, court conducts a hearing to give the decision in order to propose the verdict.
Basic eligibility for the Chapter 13 bankruptcy filling
An individual whether self-employed or running a business is eligible for the Chapter 13 unless the individual’s unsecured and secured debts are under a prescribed limit. The applicant can’t file bankruptcy application under the act if during the 180 days of preceding, a prior bankruptcy petition was dismissed by the authorities due to the debtor’s failure to appear before the court.
