Home Equity Lines - An Investor Goldmine

September 21, 2009

In today’s very difficult financing environment for investors, a home equity line of credit option may be your best funding option for securing profits.

Let’s consider the following deal, which is typical in Tampa:

• Purchase Price:    $55,000
• Rehab Costs:          $10,000
• Marketing Costs:  $2,500
• Net Resale:              $102,000

The problem is how are you going to fund the almost $70K that is required to do this deal.  Obviously, the profits are outstanding but the cashflow can be brutal, especially since it may take 5 months to close on your deal if you sell it to an FHA buyer (title seasoning issues).

However, let’s now say you have a lot of equity in your home but would like to make some extra cashflow.  Here comes the use of a home equity line of credit to finance your purchase.  Suppose that you had enough to do 2 deals simultaneously with your line of credit…..  If you could turn those every six months, this would give you a profit of over $30,000 per deal or $120K of profit in a year.  Not bad for a side job.

A Home Equity Line of Credit (HELOC) is a form of revolving credit that demands one’s home as collateral for the loan sanctioned.  Many lending institutions claim to offer the best home equity line of credit loans in a variety of ways. While loans are available at variable interest rates, some come with attractive low introductory rates and a few with fixed rates. The choice is up to the individual home owner and investor.

When your considering your next investment purchase, don’t forget about your HELOC as a potential source of investment funds.

Where Real Opportunities Are In This Market: Our Case Study

August 26, 2009

I know we have been silent for a while here at NoBullRE.com. Quite simply, we have been busy doing real estate for our own accounts. Depending upon your location, you may be sitting on a small gold mine and don’t even realize it. In this upcoming series of articles, we will be providing an overview of what we are finding in our own market: Tampa, Florida. From the discussions that we are having with others around the country, you may find your market to be similar (and profitable).

So, over the next few days, here is our list of topics:

1. How We Are Getting 2-3 QUALIFIED Buyer Showings PER DAY, PER HOME.
2. The Unspoken Market….Where To Find 100’s Of Buyers
3. The Investor Myth: Why You WON’T Get Real Homes At 50-60 Cents On Dollar
4. How You Can Safely Profit From Us (And Probably Others)

We are getting ready for a big house sale in Tampa so I will do the best I can in getting this material out on a timely basis. However, we believe that for many of you around the country, it is important to learn from what we are seeing on the streets daily. Hopefully you can learn from our experiences and then profit.

How We Are Getting 2-3 QUALIFIED Buyer Showings PER DAY, PER HOME

Ever single day, I get 2-3 calls from realtors wanting to show our homes to first time home buyers in Tampa. So what is our secret? Let’s explore the possible reasons:

1. We Are Selling Dirt Cheap To Home Buyers: No, list price is 92% of fair market (and appraised) value;

1. We Have Spent A Ton Of Money Upgrading This House: No, our total rehab cost were $9,2000 and consisted mostly of painting, flooring, small repairs,

1. We Are Paying Extremely High Commissions To Realtors: No, we offer 3-4% to selling agents, just like everybody else in town;

1. Our Internet Marketing Is Dominating The Area: No, although we are big on internet marketing, it plays very little role in the area with simply listing on MLS the dominate factor.

Give up yet? Boy, this would be the perfect place to pitch a brand new course and all you have to do is pay XXX to get our wonderful secrets….. but I will make it even easier for you:

THERE IS REAL MARKET DEMAND FOR THESE HOMES

Let me explain. As we started to do our homework around Tampa and meeting with realtors, we kept hearing the same story, over and over again:

• 80-90% of the for sale market is short sales & bank REOs;
• New first time buyers just want to buy a house, not wait 6-9 months on a short sale or have to pay cash for a bank REO (and then fix it up);
• Almost all other properties actually for sale by owners are priced too high because they are upside down

Simply put, if you have a decent house, in move-in condition, and not a short sale, it will get traffic (in the right areas). One thing that most people don’t realize is that there is a good volume of people out there that did not own property in this latest RE crash. These first time buyers are sitting pretty and just licking their chops to find a good home and be able to buy for less than they are paying in rent. Realtors in Tampa are telling us that this is the best market they have seen in 3 years. All the while, the newspapers are still full of gloom and doom.

So, here is a tip for you. If you are interested in an area or even an investment property that somebody is trying to sell, call three realtors and tell them you are considering acquiring a property and turning around for resell. Talk to them about the market, realistic prices, etc. You may find out that you have a great opportunity already waiting for you.

Best REO Cities: Where Should You Buy?

June 29, 2009

For many people around NoBullRE.com, they have an interesting dilema:

They have cash, good credit, are excited about this market, but don’t know where to buy an REO property.

Frequently, their emails are bombed several times  a week from groups in Atlanta, Detroit, Pheonix, Kansas City, etc, etc, etc with great properties and they just get totally confused.  A common question that we get is how do I choose one deal, relative to another.  Our advice….. first choose the location where you want the deal.

Without stealing our thunder for tomorrow night’s webinar (sign up here), I will at least share with you how we approached this same question.  You see, we had the choice to locate our REO activities anywhere in the country and have decided on one specific location…. and this includes picking a location to add properties to our own portfolio.  So why did we pick Tampa over all the other interesting places?

In theory, this question would be easy to answer….. simply ask the question “in which location will a home that you purchase produce the most net profit (combination of cashflow and resell profit)”.  If we just pull out our magic genie, should be no problem to answer….. yeah, right.

Given that NO ONE can predict the future, then the next best thing we can do is ask:

What major city has REO properties that are most likely to produce high returns?

To help ourselves determine that city, here is the questions we asked ourselves:

1. What cities can we get sub $100K properties that ARE NOT IN WAR ZONES; AND
2. What cities can we get good rental income relative to price; AND
3. What cities have banks that are NOT PANICKING; AND
4. What cities are showing signs of stabalizing; AND
5. What cities have professional real estate investors that are bullish (rather than scared).

We have highlighted AND in red because we see a common mistake where people get confused….. they maybe focus on where the get the BEST cashflow or where they get the BEST price.  While that may make sense short term, we don’t believe that is how you maximize your returns in this market.  In our opinion, you need to find the location and the property where you give yourself the best shot at all the criterion above.

In our webinar tomorrow night, we will be diving into this question and how we answered for ourselves.  You may, or may not agree with our conclussions but we believe you will find the approach very informative.

Sign Up For Our Webinar.

NoBullRE.com Alert: How To Increase Your Cash Flow By 82%

June 18, 2009

In this market, everybody wants to increase their cash flow.  I don’t care if you are a real estate investor, a realtor, a business owner, or most anything else, producing cash flow is top of everyone’s mind.  Especially if you could almost double cash flow with a minimal amount of effort.  That is exactly what a close friend of mine has done recently and I thought the NoBullRE.com community would find his story interesting to see how it applies to their situation.

Make Your Phone (or Email) Ring…. The Only Answer

Let’s play a little game of what do these people need to increase cash flow.  As the figure shows, regardless if you are a real estate investor or any other business owner, one of your biggest needs is for the phone to ring.

Now, from my friend Larry who owns a local hurricane shutter installation business.  His results:  Phone calls almost doubled (along with sales) over a 2-3 month period.  Guess what?  His cash flow picture approximately doubled as well.

How Did Larry Double His Business?

Very simply….  He SUBSTANTIALLY increased his exposure where people where looking for exactly what he does.  The funny thing is that he increased this exposure in places where very few competitors even begin to know how to play.  Where did he do it?

The Web…. here is what his visits have looked like.

But Larry had a web site for a long time with ALMOST ZERO VISITORS.  So what happened to explode his call volume?  Very simply, Larry took the steps to DOMINATE in Google and other search terms.   Take a look at this Google output and Larry now owns 4 POSITIONS in Google first page.

Think about it…… somebody does not sit down at their computer and randomly search for phrases like “Destin Hurricane Shutters”.   At that exact moment in time, they are very interested in finding someone that can help them with that topic…… Larry has just put himself in a position to be that person.

Now, also look at Larry’s rankings in other, related search terms.  For a real estate investor, maybe the search term would be sell my house fast Tampa.

Larry is my long time fishing budding and now have to apologize to him…… he has gotten so busy he is having a hard time finding time to fish.

Larry Didn’t Lift A Finger To Do This

Larry will be the first person to tell you he knows NOTHING about getting his website in Google.  As far as he is concerned, it is pure witchcraft (in reality, its is very predictable).

How Larry did this is to participate as a beta test partner for a new, local web positioning service that is in launch stage as I write this.  The cool thing about this service is that a group of techies have figured out how to slash the cost normally associated with getting a web site to dominate.  Normally, this service is cost prohibitive except for those with revenues to $1M+ per year….. unfortunately, that leaves a lot of people out in the cold.

Instead, for applicable businesses, this new service can place them for a SMALL FRACTION of that cost.  As Larry recently stated:

“I can pay for a whole year’s worth of service with a single sale….. becomes a no-brainer for me and I would pay them lot more.”

FULL DISCLOSURE:  I am a partner in this venture that has been in development for about 18 months.

A Unique Offer:  We Need A Few More Larry’s To Fine Tune Our Launch

I want to make a unique offer to a few more “Larry’s” and thought that we would do this with some NoBullRE.com readers.   Specifically, by helping us fine tune our systems prior to launch, we will:

• Give you a custom software tool that we use (no cost) and training to find unique niches that will work like Larry’s;
• Consulting (no cost) with one of the principals (or me) to make sure you have the right approach.
• Over $1,000 off the cost of the service.

It is vitally important to us to work closely with a few charter members to really iron out our systems prior to launch.  If you are interested in this opportunity, then simply put your first name and email in below…. From there, we will provide you our custom software tool and video training so you can decide if this is right for you.

First Name Email

See Future Website: www.eMirrorMarketing.com

Home Builder Confidence Drops With Rising Rates

June 15, 2009

As reported in the Wall Street Journal today, the National Association Of  Home Builders confidence poll dropped due to rising interest rates.  In reality, rates are still very, very low but they have rebounded off their historical lows of a few weeks ago.

As reported by the WSJ:

A market sentiment index published monthly by the National Association of Home Builders dipped this month. The gauge reflects builder confidence in sales of new, single-family houses.

The drop in the NAHB’s housing market index reported Monday, to 15 from 16 in May, followed two months of increases that had nurtured hopes of a bottom to the housing crisis. Signs have surfaced this spring indicating the worst of the recession is past.

But mortgage rates have climbed in recent weeks, pushed by rising government bond yields. Investors are concerned about inflation because of increased spending in Washington meant to pull the economy out of recession. Freddie Mac data showed the average on a 30-year mortgage loan was 5.59% last week — 73 basis points higher than the average four weeks earlier of 4.86%, an advance that could hurt demand for houses.

via Higher Mortgage Rates Sap Builder Confidence - WSJ.com.

Short Sales May Get A Bit Tough In Florida

June 12, 2009

Some interesting news that has come out today about short sales and in particular, the ability to get title insurance on the flipped property.  It appears that some title insurance companies are getting uncomfortable with the practice.  There is a good article coming from the Tampa Tribune on this topic.  To quote a portion of the article:

TAMPA - It may be a bit tougher now for investors to flip short sales for big profits.

Attorneys’ Title Insurance Fund notified its 6,000 member lawyers this week that it will not insure deals made with a popular - but controversial - method for closing flips of short sales. A short sale occurs when a mortgage holder agrees to allow a home to sell for less than the mortgage balance so that foreclosure can be avoided.

The Orlando-based fund is a major underwriter for lawyers who write title insurance in Florida. In a letter to lawyers, the fund said it has become aware of short sale programs advertised on the Internet that promise to make investors lots of money with little or no work.

via Home short sale flips nixed.

It will be interesting to watch to see how this impacts the ability of investors to rapidly turn a profit on their short sales.

Housing Inventory Drops Again - The Market Continues To Improve

June 10, 2009

A number of news outlets are reporting today that housing inventory, which is the amount of homes that are for sale, dropped 3.9% this month.  In some areas of the country, housing inventory is actually returning to almost normal levels: of course in others, things are very much out of kilter.

This ties in very much with our data that we recently showed in the Tampa market where cash buyers where going turbo.  See: Tampa Cash Buyers Fuel Local Market.  As market begin to return to normal, we are going to see lots of mixed signals (some good, some bad).

While we are not predicting an INSTANT market rebound, we are seeing consistent pieces of information that this market is trying to turn.

See Wall Street Journal Article On Housing Inventory

Professional Cash Buyers Are Buying - Are You?

June 2, 2009

As we continue our series of blog posts about the change in real estate markets, we will now show a little known “secret”.   What the average Joe is doing, and what the professionals are doing, are 180 degrees apart.  Again, we will use Tampa as our example but what we show is happening in many places across the USA.

So What Is Joe Doing?

Referring to the typical home buyer as the “average Joe”, let’s see what is happening.  What everybody “knows” in the market is that times are tough and RETAIL prices are dropping.  Referring to the figure below, we see that this is true in every submarket in Tampa.

Chart Shows 12 Months Of Data For Various Tampa Submarkets

NOTE:  This is RETAIL pricing.  Prices paid by investors is RISING.

So, with this happening, Joe still believes now is not a good time to buy.  Let’s also look at the number of mortgages being written but let’s go all the way back to 2005 as we started coming off the boom in Tampa.  Here is what those charts look like for conventional, FHA, and VA financing.

Clearly, Joe is still on the sidelines.

What Is Sue The Professional Doing?

As mentioned in a previous blog post, there is now BIDDING WARS between professionals when a house goes on the market priced right.  Let’s see if we can really QUANTIFY that.  One very good measure of professional activity is CASH purchases.  Typically pro’s move in with very low (or zero) financing so if we look at the number of cash purchases, it  give us some indication as to the direction of pro’s and knowledgeable individuals.  We can also verify by being in the market that this is EXACTLY what is really happening.

Referring to the figure below, we see that Sue was not buying in 2005 when Joe was buying everything in sight.  We also see that now Sue, the Cash Buyer, is now buying while Joe is bailing.  The typical example of the pro’s doing EXACTLY OPPOSITE what most people do.

Just for comparison purposes, let’s now put conventional financing and cash on the same chart.

NOTICE THAT THERE IS NOW MORE CASH BUYS THAN FINANCED!!!  If that does not tell you something interesting about the way the pro’s think vs Joe.

The Cash Buying Pro Is Now A Huge Percentage

A natural question to then ask is what percentage of sales is cash now, and in the past.  This is shown in the chart below:

From this chart, we can see that cash buyers are now nearly 40% of the Tampa Bay market.  If you ever wanted an inside look at what the “pros” are doing in a market, this shows you.

Predictions For The Future

While we don’t have a crystal ball either, let’s see what predictions that we might be able to draw from this information.

1. Cash buyers & pro’s are buying everything in sight right now;
2. Conventional buyers still see “gloom & doom”;
3. Inventory will be absorbed by the professionals given rents versus prices;
4. At some point (we predict 6-12 months), Joe will wake up and then realize they are about to miss a golden buying opportunity;
5. Once a significant number of Joe’s start to “get it”, then prices begin to rise again as they scramble to buy homes before prices “rise too much”.

The joys of a real estate cycle……. it is just too predictable.

The Market Is Changing - Part 2 - Historic Rental Returns

June 1, 2009

In our last post, we talked about bidding wars occurring for properties, at least from the professional investor community.

I know that seems strange to many but it is really occurring.

As we progress in this series of blog posts to really show you what is happening behind the scenes, the next consideration is the unbelieveable change in cash flow that people can get from properties.  While this is occurring around the country, we will discuss a case study in Tampa, Florida where we have been spending a lot of our time.

Tampa, Florida Case Study

Let’s consider a simple, 3 bedroom house located about 5 minutes from downtown Tampa.  This is just a bread & butter type home we love for our own portfolios.   We will take a look at what has happened as we have gone from the peak of the market in 2005 to where it is today.

First, let’s get to the punchline which is shown in the figure below:  THE EXACT SAME HOUSE HAS HAD A CASHFLOW CHANGE OF $700 PER MONTH!

As we will see in a moment, the current house can be purchased for $92,000.  When you factor in vacancies, etc., this still results in a 15%+ cashflow based on a 20% down purchase.  Back in 2005, you would have lost several thousand dollars a year in cashflow.

Why Is The Cash Flow So Much Better?

1. Are rents better?  Not really, the rental market has been pretty flat as can be seen in the figure below

2.  The principal & interests is MUCH LOWER because of pricing

In this particular example, there was a $430 difference just in principal & interest between 2005 and today.

3.  Taxes & Insurance Are Much Lower As Well

When all is factored in right now, on the EXACT SAME HOUSE, we go from something that is a bad investment in 2005 to something that is a great investment today.

But Is Now The Right Time - Maybe It Will Get Better?

In tomorrow’s blog post, we are going to look at what is happening in the cash buyers market….. which is comprised of mostly local and national professionals.  As you will see, there is tremendous movement there right now which is very likely to stabalize, and then increase, pricing levels for properties.

The Market Is Changing- Part 1- Bidding Wars Have Begun

May 29, 2009

You have to be joking, right?  Are you telling me that bidding wars are starting to occur for homes for sale?  In case you fell asleep for about 5 years, this isn’t 2004.

In all seriousness, this market is changing and local pro’s can feel it and are acting according in many locations across America.  The interesting thing is that the “regular” house buyer market is still weak but the professionals are grabbing properties like the San Francisco gold rush.

There are several things that are driving this and point to a recovery in the regular housing market:

• Bidding wars now for severely discounted properties;
• Record rental returns;
• Unbelievable amounts of CASH BUYERS moving in; and
• A 3 month trend started in regular home sales.

In this blog series, we are going to look at each of these 4 parts and provide real evidence that as a real estate investor, if you are not paying attention to this shift, you can be missing a once in a lifetime? opportunity.

Bidding Wars

Bidding wars are literally occurring for severely discounted bank REOs and short sales.  Consider this quote from a recent Pheonix Market Trends:

“We have a short sale coming on the market soon at a normal market price.  Currently it’s being prepped and he tenant is moving out, though we have put a few ads out there to see the reaction and create an auction effect which will possibly give us several strong offers to present tot he lender and get this property sold.  The response is quite amazing.  We have a long list of people just waiting for it to come on the market.”

In addition in Tampa Florida, where we are starting to do a lot of business, real estate wholesalers are now complaining that their offers were typically the only offer on a bank owned house….. Now, there are an average of 5 offers per home, if priced appropriately.

All the while the latest headlines in the popular media are still gloom and doom.  For example, the latest Tampa Bay Business Journal on the topic announced:

Home prices take a tumble in Tampa Bay region

As we will discuss in this series of blog posts, this is a very unique time where professionals are going EXTREMELY BULLISH while the main stream market is still asleep…… We like times like this

New Appraisal Rules and Regulations

May 4, 2009

If you have not already heard, as of Friday May 1st 2009, as one industry expert put it, “the complete lending landscape just changed!”  To bring that back in from a more macroscopic statement, the way that appraisal are performed for certain types of real estate has changed.  Welcome to the new world “after: the introduction of the Home Valuation Code of Conduct (HVCC).  The HVCC pertains to mortgage loans (originated from May 1st onward) that are intended for sale to either Fannie Mae or Freddie Mac. 

SO REMIND ME AGAIN ABOUT THE HVCC?
Last week’s article went over the Good, Bad and the Ugly of the Home Valuation Code of Conduct, and before I continue I wanted to remind folks of a few things about the HVCC. 

According to the Federal Housing Finance Agency (FHFA), the HVCC builds on existing Fannie Mae and Freddie Mac seller-service guidelines to “increase the reliability of appraisals” for loans sold to the both these agencies.

To make a long story short, the changes being implemented through the HVCC are really intended to protect everyone and are for the greater good (yes - “the greater good”) by setting requirements so that the individuals and organizations requesting the appraisals have no influence on the outcome of the actual appraisal itself. Thus, the HVCC:

 * Prohibits lenders and 3rd parties from influencing appraisals;
 * Requires lenders to ensure that borrowers get a free copy of appraisal reports at least three business days before closing;
 * Allows lenders to have in-house appraisers, so long as they’re completely independent of the sales staff and their compensation does not depend on their estimates or on loan closings;
 * Requires lenders to test a randomly selected 10 percent (or other statistically significant percentage) of appraisals and report any problems to Fannie Mae or Freddie Mac, which may force lenders to buy loans back from them;
 * Requires lenders to report appraisal misconduct to applicable state agencies;
 * Etc. and so forth.

In a nut shell, the HVCC sets guidelines to prevent real estate appraisers from being intimidated, bribed or otherwise influenced in their developing their valuation on a particular property. As you can imagine, there has been a lot of resistance on the HVCC throughout the industry; Real Estate Brokers, Agents, Lenders, Appraisers, investors, and even the end consumer are all going to be affected in one way or another.

WHAT KINDS OF PROPERTIES DOES THIS APPLY TO?
Now, as far as the types of real estate properties that this pertains to, we would need to take a closer look at what both Freddie and Fannie to say. 

For Fannie, the HVCC only pertains to conventional, single-family loans and NOT to multifamily loans, or to loans insured or guaranteed by a federal agency.  For Freddie, the HVCC also only pertains to single-family mortgages as well (no big surprise there).

NOW THAT I KNOW THE INTENT, WHERE CAN I GET SPECIFICS?
To start out with, a copy of the HVCC can be found on the Fannie Mae web site. 

To download a copy, simply go to the following website and once you are there, then click on the link for “Home Valuation Code of Conduct”:

https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/

Along with any new code or regulations comes the issues with interpretation of such.  Specifically, exactly what does the code mean and what can (and can not) be done.  To help along with that, the various agencies have put out Frequently Asked Questions on the HVCC.   At the above link for Fannie Mae, you have access to not only to the 6-page code itself, but also Fannie Mae has put together a nice list of Frequently Asked Questions and a replay of a recorded Webinar on the topic.

Some of the more interesting outputs from the FAQs include:

 * The Code does NOT specifically prohibit communication by a real estate agent with an appraiser;
 * The Code DOES prohibit an appraiser from collecting payment for the appraisal directly from the borrower;
 * The Code ONLY applies to Appraisals and does not apply to other valuation methods (i.e. automated valuation models (AVMs), broker price opinions (BPOs), tax assessments, etc.); and
 * The Code prohibits mortgage brokers from ordering appraisal services, but brokers may initiate the appraisal process on a lender’s behalf in accordance with arrangements made by the lender.

Interesting to see how this all plays out, what tweaks are made over the coming months, and how this will impact not only the end user, but also anyone in the business or industry as well.

Home Valuation Code Of Conduct: Investors Be Ready

May 1, 2009

Today marks a major change in the lending landscape and the way loans are sold to Fannie Mae & Freddie Mac….  Specifically, how they are appraised.

If you have not heard of Home Valuation Code Of Conduct (HVCC),just ask your favorite mortgage broker about it and more than likely their response will be something like:

&$#@%^&%$#^%$#@#$%^

(sorry, but can print what they really will blast you with)

In short, this change is designed to fix the evils of the past.

As always, there are good and bad sides to every change.  We will explore the good, bad and ugly of this new approach but first, let’s synopsize what it is about.

WHAT IS HVCC (Short Story)
So what does the code say? Basically, it’s that the people responsible for originating mortgages can have nothing to do with the appraisal process.

In addition, the code also:

* Prohibits lenders and third parties from influencing or attempting to influence appraisals.
* Requires lenders to ensure that borrowers get a free copy of appraisal reports at least three business days before closing.
* Allows lenders to have in-house appraisers, so long as they’re completely independent of sales staff and their compensation does not depend on their estimates or on loan closings.
* Requires lenders to test a randomly selected 10 percent (or other statistically significant percentage) of appraisals and report any problems to Fannie Mae or Freddie Mac, which may force lenders to buy loans back from them.
* Requires lenders to report appraisal misconduct to applicable state agencies.

You can download a copy of the HVCC at: https://www.efanniemae.com/sf/guides/ssg/relatedsellinginfo/appcode/pdf/hvcc.pdf

WHY IS HVCC GOOD?
Let’s face it, the appraisal business has been a bit “rigged” over the last several years.

In short, only appraisers that could “get the deal done” were used on a repeated basis by mortgage brokers, realtors, and or builders.  It only makes sense that this is the way the system worked.  If you were a realtor, or even if you were a new home buyer, the last thing that you want is for your appraisal to come up short and the deal fall apart.

Since appraisals are somewhat subjective, the appraisers that always got called were those where the subjectivity worked out in favor of the deal.

However, many appraisers felt very pressured to make the deal work….. their future business counted on everybody walking away happy.  Of course we are now seeing some of the consequences of that type of approach with our current housing and mortgage crisis.

WHY IS HVCC BAD?
Because now your purchase or sale is a crap shoot.

Why?

Simply because appraisers will be pulled out of a “blind pool”.  From my personal experience, only about 20% of appraisers are good at their profession (you know, the ole 80/20 rule).

So you now have an 80% chance of a mediocre appraiser being assigned to your appraisal.  Are they really capable of determining the value?  I am skeptical.

In addition, most the incentives for the appraisers are now set up to appraise low…..  The safe play is to come in BELOW what you may be thinking is actual value.

CONSEQUENCES
HVCC will be implemented May 1, 2009.  Many people believe, myself included, that this is going to severely disrupt the home seller market, and investor market, for a period.

Everybody’s major hope is that soon, tweaks will be made into something that is workable for all in the industry.

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• Appraisers brace for industry change (appraisalnewsonline.typepad.com)

New Fannie Mae Investor Reserve Guidelines

April 22, 2009

I have been asked recently for some clarifications on the recent changes from Fannie Mae on Reserve Requirements when purchasing Investment Properties. As you may know, Fannie Mae has repeatedly changed its guidelines on this topic. Staying on top of this information is key as a real estate investor.

Per Fannie Mae’s February 6th Announcement:

When the borrower will own one to four financed properties (including the subject property) the reserve requirements are:
* two months of reserves on the subject property if it is a second home,
* six months of reserves on the subject property if it is an investment property, and
* two months of reserves on each other financed second home or investment property.

When the borrower will own five to ten financed properties (including the subject property) the reserve requirements are:
* two months of reserves on the subject property if it is a second home,
* six months of reserves on the subject property if it is an investment property, and
* six months of reserves on each other financed second home or investment property.

Note: The reserves calculation for a financed property is based on the monthly housing expense of the financed property. All reserve requirements are based on the new definition of reserves as defined in more detail in Fannie Mae Announcement 09-02.

So just as a numerical example, let’s say you want to finance an investment property costing $100,000 that will result in payments of $1,000 per month. Then your cash requirements will be:

1. 20% Down (typically): $20,000
2. 6 Months Reserve: $ 6,000
3. Closing costs: $ 2,500 (estimated).

In this example, then lender would be looking for $28,500 in your accounts to get approval.

You can click here for your copy of the announcement, or you can get it from:

https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2009/0902.pdf

Hopefully this helps clear things up for those of you confused on the new Fannie Mae Reserve guidelines for investors.

Buying New Homes For 77 Cents On TODAY’S Retail Amount?

April 15, 2009

In today’s market, everybody is looking for the next “great deal” which is obviously smart investing. However, many investors are also falling into the “you can buy at 50 cents on the dollar” trap. The trap that investors are falling into is that, unfortunately, these numbers are frequently referenced to yesterday’s market value and have little to do with what things are worth today.

Now let’s look at one way to buy new homes at a true 77 cents on the dollar relative to today’s retail value. To accomplish this, we are going to use a combination of a reasonable builder discount coupled with current, special IRS tax legislation. Using absolutely no “smoke or mirrors”, we are going to show you a real-life calculation, using IRS GO Zone tax law, to see how people are really creating equity for themselves.

Let’s look at the following REAL world example for a recent investor:

· True Retail Value: $141,128

· Net Purchase Value: $109,124 (Note 1)

· Net Cash In: $ 8,046 (Note 2)

· Realistic Profit In 3 Years: $51,664 (Note 3)

If you look at the above numbers, they are quite impressive numbers for purchasing and owning a BRAND NEW home and collecting some positive cash flow along the way (note that the positive cash flow has NOT been factored into the above for simplicity reasons). The difficulty is that many don’t recognize these “Net Numbers” when they see them offered on a home sales flier. In this article, we want to take you from actual purchase numbers and then show you how the above “Net Numbers” result. There has been 100’s of Millions of dollars in real estate done using these special tax results. Yet, most investors, and even most tax professionals, “just don’t get it!”

Referring to the above numbers, let’s now address the “Notes”:

NOTE 1: Realize that NO BUILDER in their right mind will sell you a home with that big of a discount to TRUE MARKET, especially when they are truly moving homes at retail prices. In this example, the builder has discounted their retail currently in this slow retail market. In addition, they have provided a reasonable discount to the GO Zone buyer.

The actual, discounted, purchase price on the home is $129,578. But, when you factor in GO Zone tax benefits, there is over $20,000 in real tax savings for an investor in a 35% tax bracket. When you take the actual purchase price and then subtract the tax savings, the NET purchase price becomes $109,124.

NOTE 2: Realize in this lending environment, most investor loans are pretty straight forward with 20% down plus closing costs. Obviously that is less than ideal but yesterday’s excesses impact you today.

In the above example, the total dollars required at closing is $28,416 which includes both the down payment and closing costs. But, when you realize that you get the tax savings back within a year or less, then your NET Cash In becomes that total amount to close minus your tax refund: or in this case, $8,046.

NOTE 3: In the GO Zone, while retail homes have seen a slow down they have not seen a “crash” like in other locations. Home pricing is very reasonable relative to income and the strong demand is expected to return with a small shift in the economy, home buyer incentives, relaxed credit, etc.

I know it seems strange to be discussing potential price escalation but at these locations, most professionals tend to agree that we have to go up in the area. Using a past, reasonable safe escalator of only 5%/year, you get to a retail value of over $163,000 in 3 years. Obviously nobody has a crystal ball and you can apply your own witchcraft here. However, when you look at the economic strength of the region, most agree that the area should do just fine over time.

Robert Kiyosaki once wrote that the wealthy “see” finances very differently than the average person by factoring in all aspects of a transaction including net tax considerations. As this example has shown, this is especially true for tax advantaged properties, such as found in the Katrina GO Zone.

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Do You Want $60K In Deductions From Uncle Sam?

April 13, 2009

‘Twas the week before tax day, and all through the country, not a sole was sleeping soundly, not even the wealthy.

I know, I know….. it’s terrible to take such liberties with a favorite Holiday story and ruin it with the tax season. But, it just seemed so appropriate!

As we all approach our favorite day of the year, April 15^th, we all make that vow that we do every year……., “I have got to do some better tax planning.” Unfortunately, it usually goes the same path as our vow to lose weight beginning January 1^st.

Fortunately, Uncle Sam has provided an easy way for real estate investors to substantially reduce their tax burden via buying properties in what is referred to as the “GO Zone”.

What Is The Go Zone?

The Gulf Opportunity (GO) Zone Act was passed in late 2005 as a mechanism to spur redevelopment in Hurricane Katrina impacted areas. In 2005, these areas included parts of Alabama, Mississippi, and Louisiana and are now referred to as “GO Zone” areas.

Modeled after the Liberty Zone legislation passed to spur growth in New York after 9/11, GO Zone legislation was enacted to entice the private sector to pour substantial dollars into hurricane Katrina impacted locations. The good news is that it has worked and we have seen it work first hand.

While there is a ton of potential benefits to you, the one most often discussed in real estate investing circles is called “Bonus Depreciation”. In layman’s terms, this allows investors the opportunity to claim a 50% bonus depreciation during the first year that a GO Zone qualified property is put into the rental pool. As the example below shows, this can be a huge tax benefit.

A Very Simple Example

Suppose that you buy a new house for $140,000 in Biloxi, Mississippi and put it into rental service. Also, let’s suppose that the lot value for that home is $20,000. Here is how the transaction would look.

House Purchase Price: $140,000

Land Value: $20,000

Net Structure Value: $120,000

Allowed Bonus Depr: $60,000

So how would you like to deduct $60,000 from your income next year before computing bottom line tax values? What if you bought 10 of these like some of our clients have? In addition, you may be interested to know that this loss could be carried backwards or forwards, so it is quite possible to go back and recover already paid in taxes.

So Why Hasn’t Everyone Bought GO Zone Properties?

While the GO Zone is certainly news to many people and many tax professionals across the country, realize that it has been used…… a lot. In many hurricane impacted areas, it has already played a significant role in putting housing back on the ground.

One of the reasons that you don’t see it discussed everywhere is that this is NOT something that fits every single person. Without getting too technical, the GO Zone tax code is wrapped around existing IRS depreciation code, passive losses, etc. So, let me give you the cheat sheet. If ANY of these categories fit you, then you may want to look at the GO Zone more carefully:

1. Real Estate Professionals: Those who spend 51% or more of their time in “the business” of real estate have tremendous opportunity to use their depreciation losses to offset their actual income. Note – you do NOT need to be a licensed Real Estate Agent to qualify for this category!

1. High Wage Earners With Non-Working Spouse: Many people have structured their affairs so that the non-working spouse manages their properties and gets classified as a real estate professional: this also DOES NOT mean that they have to become a licensed real estate agent.

1. Adjusted Gross Income < $150,000: Depending on exact income, there are some specific paths for deducting up to $25,000 of bonus depreciation loss.

My Recommendation:

After having participated in all aspects of the GO Zone since 2005 and running the largest GO Zone website (GoZoneOnline.com), let me offer an observation. Because this topic involves tax code, many people (myself included when I first got involved) spend days and days trying to understand what is happening and frequently end up frustrated. Unless you are well versed in tax law, you will pull your hair out.

Instead, here is what you REALLY need to grasp:

• If you are in one of the 3 above classes of people, then you need to answer if this makes sense for your personal situation? Once you understand the layman’s basics, then there are tax pro’s that for a couple hundred dollars, can assess your specific situation rapidly and advise you on how to proceed. More than likely, your regular tax professional will be in the dark as much as you. But with some outside help, you can rapidly determine your personal situation.
• Assuming you want to participate in the GO Zone, then you need to understand:
  • What areas to are best to buy in;
  • What types of properties are best to buy and why;
  • How to find a good deal.

It really is that simple and definitely is not rocket science. To help readers come up to speed, we are going to hold an introductory webinar, April 21, to cover these topics.

Sign Up For April 21st Go Zone Training Webinar

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Investor Alert: Rental Guarantees

April 9, 2009

Another one bites the dust.  Another investor lead astray by what looks like a great thing to the uninitiated: the rental guarantee.

As I write this, I learned that an investor went from buying what I think is one of the best properties that I have seen in the Go Zone to what is in my opinion, junk.  Why?  Because they were lured in by the “security” of the marketers rental guarantee.

Now don’t get me wrong….. Sometimes a rental guarantee is a great thing on an investment property but the reality is that it is rare.   In fact, we are evaluating a deal right now with a rental guarantee but our Red Flags were immediately raised…. Time will tell if the project we are examining happens to be one of those rare cases that works with a rental guarantee.

WHAT IS A RENTAL GUARANTEE?

Quite simply, it is an agreement between the seller and the buyer that they, or a related company will lease the property for some period of time.  One example that can work really well is when a subdivision builder sells their model home to an investor and then leases it back as a sales center.  That can make a lot of sense for everyone involved.

These rental agreements tend to be as short as 3 months and can be as long as 2-3 years.  In addition, the seller might be leasing back a single unit, such as for the model home above, or they may be leasing back a ton of units and then they plan to sub-lease them to minimize their negative cash flow.

RED FLAG #1

When done with multiple units for long periods of time, the lease back represents a substantial monetary liability to the seller.  So why would a seller offer this?  One possible (and common) explanation is that they are making a boatload of money on the sales of the units and the leaseback represents a small risk.   By offering a leaseback that hope to get a bunch of investors to start buying in which case the seller will do just fine.

Generally this occurs when the property is overpriced relative to market.  So the “game” is to mark up the property higher than market value, make a bunch of money, and then offer a rental guarantee to make this attractive to investors.  But of course, they can’t show that the property is overpriced so somehow they will also need to convince the investor that they are getting a good deal.

For this Red Flag, you should take any discussions on “appraised value” or “market value” with a degree of skepticism and really try to verify.  Every once in a while you will find a property that has a leaseback AND is actually priced right…… then you have found an interesting deal.  Just realize this is rare.

Red Flag #2

This leaseback can be a substantial financial undertaking for a builder/developer if many units are involved.  So, for example, suppose that they offer this for 50 units in a complex at $1,000 per unit, for 24 months.  So their total liability is:

50 Units *$1,000 * 24 = $1.2 Million

Obviously they probably PLAN on renting out these units, and they PLAN on selling enough units to be strong enough to cover this but will their PLAN work?  If not, good luck on getting all your PLANNED lease payments.   However, if what you are buying is till very rentable on the market, with or without them, then your are in a great position.

Red Flag #3

Is the leaseback consistent with market rents?  One other common “gimmick” is to offer a leaseback higher than market rents to make the numbers look good.  Based on Red Flag #2 and you always needing to plan on those leaseback payments stopping, then you really do need to know the market rent values.  If, however, the lease back amount does line up with market rents, then that is a good indication…… the question is how will you, as the investor, know what the market rents are for the area?

Conclusion

Again, don’t misunderstand my intent.  SOME RENTAL GUARANTEES are good and as mentioned earlier, we are evaluating a deal with one right now.  However, when you hear about an offered property with a rental guarantee, always go back and check your 3 Red Flags.

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Broker Price Opinions (BPOs) - How To Get A Good Short Sale Value

April 8, 2009

Oh, the games people play, especially in the real estate business.  This is especially true in the  short sale world with broker price opinions (BPOs).

For those of you not familiar with the lingo, a BPO is an estimate of value, like an appraisal, but is performed by real estate agents.  As it was put by one rather biased appraisor in an article recently,

“Unlike standard property valuations performed by licensed appraisers — which can run to hundreds of dollars — BPOs often cost $50 and are performed by real estate agents who may have minimal or no appraisal training and are subject to no regulatory oversight.”

Of course in this topsy turvey market, we have found that some very knowledgeable BPO agents have a much better handle on pricing than some appraisers but that is a different story.

As any experienced short sale investor will tell you, the BPO is the KEY TO MAKING A DEAL WORK.  Essentially, a loss mitigator for a bank has certain lattitude to get deals done that are within some % of the BPO.  As an example, if the BPO comes in at $150,000, then a loss mitigator may have full authority to accept offers of $130,000 or higher.

If the short sale offer is above that magic threshold, poof the deal gets done, the loss mitigator clears their desk, everybody is happy.  Below that number and you may as well try pushing a wet noodle up Mount Everest.  Each lending institutions have their own guidelines and these can definitely vary with time.

Many, many investors get stuck at this stage simply because they don’t understand how to play the games.  So how are the pros getting BPO valuations that work for them and the bank?

1. Always remember that the BPO agent is only making about $50-$75 so they want this done with little friction…. also remember that the bank is paying their bill so they want to make the bank customer happy;
2. Well before the BPO agent arrives, the short sale house is marketed on MLS by the investor.  They start the price at the highest value that might work and then start dropping the price some set amount (typically $5K- $10K) per week.  At the higher prices, frequently no house showings occur; i.e., nobody is interested.  As the price drops, you will find a price where a few showings occur and then finally a price where lots of showings occur.  For a good short sale investor, their job is to explain to the bank’s BPO agent that no showings occurred until they reached a certain price….. One could argue that this is a good data point for determining true market;
3. Next, the short sale investor will be very well prepared….. Lots of comps, lots of repair estimates, and any other justification that they can provide to the BPO agent.  It makes the BPO agent’s job easier and helps them truly evaluate real value.  A skilled investor can work magic at this stage.
4. And of course, the short sale investor ALWAYS, ALWAYS meets the bank’s BPO agent on site so they can explain their point of view.

For the short sale investors who understand how to “play the game”, they get 1 out of 2  deals approved and their are some really good investors that are hitting 90% approvals.

Want To Learn More About Short Sales?

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Good News For Short Sale Investors

April 6, 2009

Its Monday morning so do you want the good news first or the bad news?

Since we mostly hear bad news these days, let’s start with the good news for a change.  If you are a short sale investor, or someone considering getting into short sale investing, then you may be in luck.   A new report from the Department of Treasury shows that banks approved almost 3 times more short sales in the 4th quarter of last year as compared to the first quarter.

Referring to the table and chart below, we can see that this is really a significant increase.

One of the biggest complaints of short sale investors has been that the banks are dragging their feet in getting their deals done.  In part, this may be due to non-ideal techniques used by many short sale investors: there are some short sale investors that are getting a lot of deals done on a consistent basis.  Even still, it sure would help to ride a wave of increasing short sales by the lending institutions.

If you are thinking about investing in short sales, you may want to visit this video that we put together.

So What Is The Bad News?

The bad news is that in all categories of loan defaults, foreclosures where just not getting any better by the end of last year…. Gee, isn’t that a surprise.  While we will cover this topic in much more detail later, the short story (no pun intended) is that when you look at the number of loans that are

• 30-59 days delinquent;
• 60-89 days delinquent;
• 90 or more days; or
• Foreclosure in process,

all were going up over the course of last year.  Looking at those stats, you know that we are not out of the woods yet.  Unfortunately, many of these type detail reports are a few months behind so it is just one piece of the puzzle that we all need to be watching.

Poof - An Instant Housing Fix?

April 3, 2009

Regardless if you are bullish or bearish on this market, what if something was planned that could radically change the real estate market…… almost overnight.

On April 1st, we offered a poll to determine the percentage of people that are bearish on this market and those that are bullish.  The chart below shows those results as of the time this article was written.

Click Here To Register Your Poll Vote

Out of the people that participated in the poll, 21 indicated that they were bearish, while the majority indicated that they were bullish.  Unfortunately, in my opinion, there is no right or wrong answer…… you simply have to interact with the market based on your beliefs.

One of the comments we received indicated that the person believed that the “real bottom” was 2012 - 2013.  Unfortunately, none of us will know until 2014 if that is true.  For that person, with their beliefs, probably the right strategy for them is waiting until that date….. it doesn’t mean that their approach is right (or wrong), but at least it lines up with their personal beliefs.

But What If It Changed With The Stroke Of A Pen?

As a real estate investor, one of the difficulties that we face is that market conditions change much faster than we can react.  For example, many people were absolutely shocked at the rapidity that the real estate market stopped selling in mid 2005.

Now, let’s consider another potential event that could also have a major impact:  the Making Home Affordable (MFA) Initiative.  You can learn more here.  Under this initiative, some of the 3 to 4 million homeowners eligible for loan modifications could see interest rates as low as 2 percent.

I wonder what this could do to the current “conventional wisdom” prevalent right now with many professional real estate players.  Their view simplified is that:

• We are at the beginning of a wave of adjustable rate mortgage (ARM) Recasts;
• When these recast, especially option ARMs, tons more inventory will flood the market;
• This inventory will likely be in place for years to come.

But what if, with a pen stroke, that picture changes and now more people can stay in their home.  In turn, this means that we rapidly start to work through existing inventory, which then decreases supply.  Now, the building industry comes out of hiding, hires more people which then improves jobs, which increases demand, etc., etc.

PLEASE DON’T MISUNDERSTAND.  I am not predicting the above.  Most of the big money investors I know gave up on “predicting” years ago.  They make decisions based on the real data in front of them TODAY and when they see a deal that makes sense TODAY, and has a high probability of making sense TOMORROW, then they act.

Real Estate Investor Sentiment: The Bear & Bull Battle

April 1, 2009

A couple of weeks ago, we hosted an educational event for the REO & foreclosure world with several hundred people from around the country on the line.

We thought it would be interesting to see what the investor sentiment was given all the gloom & doom on the news.  We asked people how they were feeling about the real estate investment market.

Their choices where:

• I am bullish in this market and want to buy properties;
• I am bearish in this market;
• I am undecided

About 30 seconds after launching the poll, I was ready to fall out of my chair.  Well over 70% of the people responding were BULLISH.  Another 20%+ were undecided, and just a few percent where bearish.

Wow!   I was completely surprised with that result.  Given the news that exists out there today, I would have predicted a 3 way split….. Oh well, so what do I know.

As we launch NoBullRE.com, we thought it would be fun to do a similar poll here amongst the readers and let you see the results.  I know people are reluctant to do anything on the web but this is TRULY ANNONOMOUS and is really for everybody’s benefit.

Ok, I know it’s April Fool’s day but if you will, please vote how you actually feel so that everybody can use these results.

Vote To See Current Poll Results

Also, we would love to hear from you below and expound upon your thoughts and reasons.

San Francisco Area Sells 5,000 To Investors & Home Buyers

March 31, 2009

The market is totally dead, right?

Wrong!  Would you believe that about 5,000 homes are selling MONTHLY in the bay area right now.  Does not sound like the market is totally dead to me.

One of the interesting stats is that most of these homes sales are going to one of two categories of people:

• Investors; or
• First Time Home Buyers.

Let’s look at the first time home buyers first.  One of the things that has happened in the Bay area is the ability to use FHA financing for first time buyers.  Previously, the price points made this impossible but today, the FHA limit goes all the way to $729,250.  Personally I believe that is a bit ridiculous but that is besides the point.  So, with FHA financing, the buyer can put little money down and get into a fantastic deal.

The price points have changed dramatically as well in the area.  A couple of years ago, less than 10% of the homes in the area sold for under $300K…… Today, it is over 51%.

Investors are also finding good deals.  A recent article in the San Francisco Chronicle described how a real estate agent turned a quick $77,600 profit by buying a house with cash and the reselling.  While most investors are buying, then renting, then planning to sell in a few years, there is still a few flip type opportunities that exist.

This Is A Link To The Chronicle Article

No Bull Real Estate - What’s That?

March 28, 2009

What do we mean by NO BULL REAL ESTATE for investors?

That is a frequent question that we get but fortunately, it is very simple to answer.  Here is what I want you to do:

• Go to Google and type in the phrase “real estate investing”
• Look at the ads on the right had side;
• Click through to some of the sites.

When I did that, some of the ads that I see include:

Helps Get You Out of the Rat Race!

Get Rich In The Real Estate Market!

Secrets to Turning $10 into $16,547
In Real Estate Revealed!

Free Real Estate Investing Video.
Make A Fortune In Real Estate Fast!

Grow 1000% Richer With Real Estate

PLEASEEEEEE!!

I have personally participated in over $50 Million in real estate and most of this stuff is junk….. some value, but frequently very little.

We wanted to bring a web site together we some of the most ethical people we have found in the business.  While we are huge proponents of real estate investing, we wanted to offer information and properties without all the hype….”Just straight forward information with the Good, The Bad, & The Ugly exposed”.

Property Appraisals: Declining Market Adjustment

March 20, 2009

California is considered a “declining market” by lenders, the secondary market, and appraisers alike. Appraisers have been instructed to adjust the “comparable sales”, on a Uniform Residential Appraisal Report (Form 1004), by 1.5% per month. What this means is that the appraiser will use an exact model match (same size, floor plan, and location in the subdivision) from December, and lower the price by 3%, for a current appraisal. For example, if the property sold in December for $300,000, the adjusted price in February will be $291,000.

Sounds reasonable, right? Sometimes, that’s not necessarily a fair depiction of current market conditions.

Much of the Southern California market is driven by bank-owned properties. The banks, in an interest of disposing of the property, pursue a “fire-sale” pricing method in order to generate multiple offers. Ask buyers in the tony San Fernando Valley how hard is is to buy a bank-owned home. One of our borrowers has made over 30 offers, unsuccessfully, to purchase a bank-owned property,

The free market has “priced in” future market declinations and has “discovered the true bottom”. Still, appraisers have their hands tied. Pursuant to directives from the secondary market, the appraisers adjust those “free market base prices” because they were closed a month or two ago. The cycle becomes never ending. The lower adjustments provide an unnatural price pressure, driving prices even lower. The policy then becomes a market factor.

The policy can be counterintuitive to its originally stated purpose; to provide a “true” reflection of this “declining” market. It assumes that prices will continue on an 18% annual decline, forever.

Read Entire Article

The Risks and Rewards of Investing in Foreclosures

March 15, 2009

There are many different things to invest in these days. One investment route which individuals take is with regard to foreclosures. Foreclosures occur when the current homeowner of a property fails to pay their monthly mortgage and the property is repossessed by the lender. There are various risks and rewards which go along with investments of this type and some of these will be discussed below.

Advantages and Disadvantages to Buying Pre-Foreclosure Properties

One type of property sale which relates to foreclosures is the pre-foreclosure sale. A pre-foreclosure sale occurs when the lender allows the homeowner with past due mortgage payments to sell the home on their own and pay back the lender what they can from the sale of the home. The lender often agrees to this so that they do not have to get involved with possessing then reselling the home and the homeowner likes this option because it prevents foreclosure. The investor also benefits from this type of sale as well.

Some advantages to purchasing an investment property via pre-foreclosure sale include discounted price, speedy purchase and wonderful profit opportunities. As for the disadvantages, the investor who buys property by way of a pre-foreclosure sale may find that the homeowner is hard to contact and/or unwilling to sell, the research is cumbersome and there are other potential buyers who wish to purchase the property.

For those who wish to purchase property via a pre-foreclosure sale, they should do their independent research, approach the homeowner in a courteous manner and ensure that they make an offer that will not cause them to lose money in the end. By doing so, the investor may find that buying a house by pre-foreclosure sale will work to their advantage.

Advantages and Disadvantages to Buying at a Foreclosure Auction

Another way to purchase foreclosure property is through a foreclosure auction. Auctions of this type are usually held at the local courthouse of the county where the property is located within. This is a common way for foreclosed properties to be sold and this too has its pros and cons.

Read Entire Article

Foreclosure Investing - The Fastest Way To Get Started

March 7, 2009

Foreclosure investing is actually quite another world when people have finally taken that risk and go for it. This really applies to anything else in life. Remember all those late nights where you’d stay up and watch those “how to make millions in your sleep” commercials. Or perhaps you remember all those times you went to the book store and purchased tons of real estate investment study guides.

In fact you probably have a impressive home library and collection of real estate, investment, and how to get rich quick type books by now. Some people may get a feeling of being overwhelmed after wading through those thick books and studying all the complex terminology.

The truth is, if you are a naturally goal-oriented and self-disciplined person than you can probably achieve a full-time income in real estate within a year with the right system. So how do you choose the “right” system when everyone and his uncle says they are an expert or guru within the real estate domain?

One thing you might want to consider doing is to align yourself with a acquaintance or relative who is already successful in real estate investment or at least in the branch of real estate that you are interested in doing. Don’t be shy, definitely get in touch with them.

It may be a friend from high school or university, or perhaps even a former room mate that you knew when you were just getting started with your own life and needed someone to share the rent costs with in order to have your own place, etc. I am sure that if you brainstorm for a bit, you may even surprise yourself at how much opportunity there is in your own circle.

That is actually a very good idea- the number one way to get into real estate successfully is to have a mentor or at minimum someone that can really show you the ropes and provide feedback in real-time. No matter how well written the courses you’re looking at is, nothing really compares to a trusted friend or adviser that can actually walk you through this process step-by-step.

Read Entire Article

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• Who Is "REALLY" Making $ In Today's Real Estate Market? Our 29,689 Members Tend To Agree... It's Usually Not The GURUs Have you ever noticed that every "Guru" real estate pitch sounds the same........ They once were poor, but now are rich working only 5 hours per week, and you can be rich too if you just buy their "can't fail system". Or have you noticed that every property promote has a can't miss proposition, if you just buy TONIGHT.  At the NoBullRE club, we are huge believers in real estate investing...... but we also know that every approach has two sides: Nothing is perfect.  If you want unbiased ("No Bull") facts of who is making money, how are they doing it, and where do they get their knowledge, then you don't want to miss joining the NoBullRE Club  IT'S FREE (FOR NOW) Name Email See What Others Are Saying SECURE & CONFIDENTIAL Your info will never be shared CONFIDENTIALITY GUARANTEED

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