Comet Settlement Real Estate

Anyone who has ever profited from doing a short sale has also without a doubt had one or two rejected at some point. Guess what? It is just the nature of the beastAs with all types of sales; you’re playing a numbers game.

There are very few investors who truly know how to successfully negotiate a Short Sale. We find that most investors have the perception that all that is necessary is to submit an offer and wait for the bank to give you an answer. If all goes well the offer will be accepted but in many cases it’s not that simple.

That’s why a strategic plan is necessary. “What do you mean?” You ask. A strategic plan means making the deal go your way by persuading the lender to agree with your offer.

There are several steps that will ensure your success when negotiating with lenders.

First of all, you must be able to determine if you indeed have a short sale opportunity on your hands. Many investors are under the misconception that every homeowner facing foreclosure is a good short sale candidate. This could not be any further from the truth. One of the most common mistakes made by investors is attempting to fit a square peg into a round hole. Not all deals are good short sale opportunities. You must know the difference between a good and a bad deal. Period! You’ll have to analyze the deal and develop an excellent plan of attack if you want to truly master the art of the Short Sale.

Second, you must not take no for an answer. No can never be the final chapter to your negotiation. If the lender says no you must ask yourself why. There must be a reason. Why did they say no? Is there anyone else I can speak with? Was my offer to low? How does the lender determine their bottom dollar? What else can I do? What was the BPO amount? These are just a few of the questions that need to be addressed each time you are met with some resistance from the lender.

We’d like to share an awesome deal that one of our students closed recently. His name is Thomas Stockman.

Thomas got a call off of one of his signs from a gentleman that had two properties in foreclosure. The two properties were on the same street and were bought as rental homes within the last year. Consequently, they were also financed by the same mortgage company. One property had a mortgage balance of approximately $150,000 and was in need of several thousand dollars worth of repairs. The other had a mortgage balance of $156,000 and was currently being rented for $1,100 per month. Both properties had very little equity but the neighborhood had been very active over the last 9 months. After qualifying the two potential deals he decided to attempt short sales.

He contacted the bank and began the process. His offer on the first house was $89,900 and $95,800 on the second house. The bank rejected both and asked for higher offers. After several conversations and some additional documentation to justify his offer, Thomas was able to get both properties for a total of $60,000 below market value. Thomas rehabbed the first property for $3,500 and put it on the market for sale. Since the second property was already occupied by a tenant he decided to keep it. His mortgage is roughly $400 per month (interest only loan/taxes paid at year end) he makes $700 in monthly positive cash flow. Not bad for a beginner (wink).

This would have never happened if Thomas accepted NO from the bank. If he would have not known what pressure points to touch and how to counter without increasing the offer amount we would not be talking about these deals.

This type of outcome is customary when you are equipped with the necessary tools and know how to turn a “No” into a “Yes” just by slightly adjusting your approach. Thomas got two great properties with lots of equity and a constant cash flow, the homeowner avoided TWO foreclosures, and the bank was satisfied.

Remember, the next time you are putting together a short sale offer, be prepared and take control of the deal. Never take NO for an answer. Be proactive not reactive. Don’t just submit offers without having a game plan. Do yourself a favor and take advantage of the opportunity to make lots of money in an industry where great deals are hard to come by. We hope that you have learned something and are on your way to much success.

Best Regards,

D.C. Fowler, Real Estate Investor/Educator
http://www.shortsaledeals.com

Mr. Fowler has been a real estate investor for over 15 years specializing in the area of pre-foreclosure/short sale investing. He has bought and sold over 200 homes in Georgia, Florida, Louisiana, and Tennessee using the same short sale techniques that he teaches in his course, Making Money with Short Sales: The Complete Guide to Acquiring Property Pre-Foreclosure. Mr. Fowler currently resides in Atlanta Georgia. He also spends many hours per month teaching his creative real estate investing techniques to other aspiring investors across the country.

Tags: foreclosures, no money down, pre-foreclosures, real estate investing, short sale, short sales

Some real estate investing “teachers” advise beginning investors to find many houses and to flip the houses quickly for outrageous profits. Perhaps you’ve seen the claims of real estate gurus telling you how you can make $30,000 to $50,000 per month, without any physical work, and for little or no money out of your pocket. In fact, these promoters tell you that you can get money back when you close.

Let’s take a closer look at these fast flips.

How do you find a bargain for $30,000 or more under market, for no-money down, and flip it right away? First, you would need to find a seller so desperate that they sign over their home to you. I’m not saying that this can’t be done. It’s just nearly impossible in today’s real estate market. Today’s sellers know they can sell their home fast and still get a fair price by only discounting the property by $10,000, without the seller carrying the financing. This is because there are so many home buyers looking to purchase a home to live in.

How does this affect the beginning real estate investor who was promised they could find many houses for drastic price reductions? These investors soon get discouraged because the promised method is so difficult to do. Not only does the investor have a hard time finding a home for way under market value, the investor with no money to put down has two obstacles to overcome. No money down and finding a bargain house. These aspiring investors, some who charged hundreds of dollars for bogus investing courses, just give up.

If you’re thinking about getting into real estate investing as a way to secure your financial future, be wary of investing systems that worked last century. Learn about real estate customs in today’s fast-paced market.

The real way to make money on fast flips is to get yourself ready to cash out a desperate seller fast. You can begin with your first investment home realistically two ways:

1. Buy a home to live in so you can purchase with no money down.

2. Refinance your own home and use the money for a big down payment to encourage a desperate seller to sell fast.

This method works because sellers who need to settle their affairs quickly will sell at a big discount to a buyer who doesn’t ask them to be the bank.

You can still build wealth by flipping houses. But, you need to have your finances in order when you go bargain shopping.

© 2005 Jeanette J. Fisher

Jeanette Fisher teaches beginning real estate investors how to find, finance, fix, and sell houses to build wealth. The difference in Jeanette’s system, fixing houses with Design Psychology, helps investors make more money on each house. Free “Design Psychology for Selling Houses” ebook http://www.doghousetodollhousefordollars.com/

Tags: build wealth, flipping houses, real estate investing

Nothing down? Exactly why would a seller want to walk away from closing with nothing? The truth is, they normally wouldn’t, and that brings up the most important point about real estate investing with no downpayment: A seller almost always needs cash at closing, but it doesn’t have to be YOUR cash.

Nothing Down – A Few Ways

Sometimes sellers are able to offer terms and a low or no downpayment, but often you have to find a way to get at least 70% of the price to them in cash. This is not only so they can get some of their equity out, but also because they will probably need to pay off the existing loan. So to get in with nothing down, you need to think in terms of how to get a primary loan, then how to raise the money for the remainder. A couple examples follow.

A few banks still do “no doc” loans, meaning they don’t require any verification of income, source of downpayment, etc. Since they generally loan only 70% to 80% of the property value, you need a seller who is willing to take a second mortgage from you for the other 20% to 30%, to make it a nothing down deal. They get 70% or 80% in cash, and payments for years to come. Since you’ll have two payments, you need to be sure the numbers work.

Another way to buy with none of your own money is to borrow against your home or other property to come up with downpayment. You might borrow for a “vacation,” and leave whatever you don’t spend in your checking account for a while. In this way, you can use it without violating bankers rules about borrowing for a downpayment.

Most towns have a few “note buyers.” These investors buy land contracts, mortgage loans and other “notes” at a discount. When a seller takes a purchase money mortgage from you for $100,000, for example, a note buyer might pay him $85,000 for it. How does that help you or him? I’ll explain with an example.

Suppose a seller prices his property at $195,000, expecting to sell it for $180,000. You offer $205,000 in the form of a mortgage for $160,000, and another for $45,000. As part of the offer, you have arranged for the sale of the first mortgage at closing for $136,000 to a note buyer. The seller gets that cash now, plus payments from you on the second loan for $45,000. $136,000 plus the $45,000 adds up to $181,000, which is about what he expected to get out of the deal.

A Personal Example

At the moment, I’m selling a small rental property, and will recieve payments of $400 per month. The buyer has good credit, and the $5,000 downpayment covers the closing costs and even the legal cost of a foreclosure, if necessary. So at this point, I really don’t care where he gets the downpayment. Suppose he took a $6000 cash advance on a low-interest credit card? This would cost him about $135 per month, and give him enough for the downpayment and his closing costs.

The rent is around $600 per month in this case, so he would be okay. However, in some cases, that extra $135 might cause negative cash-flow. You have to be sure that however you do it, the numbers work. I should mention though, that I would have accepted payments of $350, if he had asked, because it’s the price and the interest rate that mattered to me.

Are ther other methods? You bet. Creative real estate investing is all about making the deal work for all parties. If you can find a way to get the seller what he wants, you can buy with nothing down.

Steve Gillman has invested in real estate for years. To learn more, get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

Tags: nothing down, real estate, real estate investing

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

1. You need to make a commitment to succeed. Real estate investing is simple, but it is not easy. Many, many long hours–punching in numbers, looking at houses, evaluating deals, talking to people, constructing deals, seeing where your profits will come from–are going to have to be spent in order to become proficient at buying and selling real estate.

You need to have a plan and execute your plan to succeed. Remember, those who fail to plan are planning to fail. The investors I know around the country who are wildly successful have overcome challenges, stuck with it when times were tough, never gave up, and had a true belief in themselves that they would succeed and that failure was not an option.

2. You need capital or a way to raise capital. You can buy real estate with little or nothing down, as many people have indicated over the years. However, the person that has capital at the ready is the person that is able to pull the trigger quickly and potentially reap very large rewards. So you need to have money for your real estate transactions in some way, shape, or form.

You might think that your resources are extremely limited. Through perseverance, ingenuity, creativity and enthusiasm, though, you can find all the capital you need through what is known as “private funding”. Private funding is the use of individual investors’ money to fund your deals. These individuals are far less critical than banks when it comes to funding deals. Private investors look for a lower loan to value ratio than lending institutions do. Of course, it’s easier to find willing private investors when you have a solid track record of success in real estate. But there are proven ways to find private investors as a beginner, too.

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

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

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

Tags: bank foreclosures, forclosure, forecloser, foreclosure investing, real estate, real estate investing

One of the ways to get money to buy foreclosures is from private investors. This article discusses why private investors are so important to your foreclosure investing business.

A traditional way to get money for your foreclosure investments is through a hard-money lender. The hard-money lender will generally charge a percentage of the amount borrowed, or what is known as points. Three points would be three percent of the transaction. For example, if you borrowed $100,000, at 3 points, that would be $3000.

Many hard-money lenders charge interest-only on their loans, meaning they get their principal back in full and the way they make their money is on the interest. In a short term proposition this is not a bad scenario because at the beginning of any amortization schedule, the majority of the money paid out of the monthly payment goes to the lending institution. However, I have seen hard money lenders charge as much as 15 points on smaller deals to be able to fund the deal.

As I continued on with my business, and I started doing more and more deals, it become apparent that my number one need was going to be private money but without the points. So I had to put myself in the place of somebody loaning money.

Put yourself in their place. If you wanted to loan money what would you want to know about the person you’re loaning money to? Obviously, the number one criteria for someone loaning money is, how sure am I going to be that I am going to get my money back, or even a portion of my money back?

One of the most common problems with young investors is that they have no money to invest or their credit is too shaky to finance things themselves. Most banks seem to want more documentation than any person on earth can provide. The challenge in creative real estate is deals need to be done fast. Banks are notorious for not doing things at a speedy pace, but a molasses pace.

One of the exciting things about being a creative investor is that you can take ideas the average person would never have and build them into great dynasties of real estate wealth. Yes, I said great dynasties. It is potentially possible, if you have the ability to network your way through the private investment community, to add a tremendous amount of zeros to your bank account balance.

One of the true challenges for a young real estate investor is going out and finding a good deal but then not having the particular money in place at the time to pull the trigger. The power of private money can be the answer to your creative real estate financing problems and can help take you to the next level.

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

Tags: bank foreclosures, forclosure, forecloser, foreclosure investing, real estate, real estate investing

So why should you invest in foreclosures? In the long-term, it’s for lifestyle and financial freedom.

I do not define success in terms of winning or losing, but rather by whether I am challenging myself to be the best that I can be. One of the reasons I left my 9-5 corporate job, besides getting laid off, was because I wanted MY OWN lifestyle. I wanted to create my own lifestyle for me, my family, and my friends. I wanted to become a champion, the best at what I did. I believe that anything I set my mind to, I would be successful at that endeavor.

However, my biggest problem in working for a company where I was not the boss, the president, or the owner, was that I could not set my own schedule. I would not be able to go skiing when I wanted, play golf, or travel when I wanted. I was a terrible employee because I wanted to do things when I wanted to do them. And today I don’t want to be accountable to anybody, except myself and my family, and the people that are counting on me to create real estate transactions.

Don’t get me wrong. I was pleasant at my jobs, and I showed up, and I produced revenue. But the reason that I think I was a terrible employee was that I only wanted to work just 2 to 3 weeks a year. To me, a JOB means Just Over Broke and my time was not my own time, it was my boss’ time.

When I first started in the real estate investing business I had to ask my wife to give me a chance to make this work. I had a severance package, so I had three months to move forward. When we cashed the first check of $8,000, I took $4,000 and took my wife to Paris, a place she always dreamed of going. That helped tremendously in my pursuit of this business.

Now that I have established my business I take off one week for every six weeks of work. This gives me five to eight weeks of vacation per year depending on how my deals are going. I use this time to connect with my family, vacation, work on other projects, and just go out and enjoy life because isn’t that what it’s all about? If you’re working so hard that you’re not enjoying life then you need, in my opinion, to rethink your priorities.

My 15-yr-old son Nick and I go to hockey games, football games and other things that a 15-year-old and his dad can do together. My 6 year old daughter Chloe and I go skiing in the Rocky Mountains of Colorado where we live and we do it 10-15 times a year. We go camping, take motor home trips, fly to Maui to go to the beach and much more. This is truly a life that I am designing.

My belief is we should constantly have to better ourselves, to acquire new skills, to refuse to be bogged down with the feeling of failure, inadequacy, or that L word–loser. In my opinion, the losers of the world are those that never try. I would rather work with somebody who has tried 10 different businesses and failed than somebody who has worked 30 years successfully for one company and achieved moderate success.

When are you finally a financial success? Only you can answer that question for yourself and your family but to me the answer is when you can totally financially support yourself without having to show up for work. When you can do whatever you want, whenever you want, with whomever you want, anywhere you want, anytime you want to do it, as much as you want to do it, then you have reached financial success. That is the time that passive income is really working for you and your dreams are becoming a reality.

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

Tags: bank foreclosures, forclosure, forecloser, foreclosure investing, real estate, real estate investing