Foreclosure Flipper

Here is another gem by Raynor….
Author: Raynor James

From time to time, a homeowner can be put in a situation where
they really need to sell their property fast. As a FSBO seller,
there is one strategy you should incorporate.

Selling Your Property Really Fast As A FSBO Seller

From time to time, life can creep up and bite you in the
derriere. Events such as losing your job, massive medical bills
and so on can create a need for you to sell your property and
sell it NOW! If this occurs, you almost always need to take the
route of selling your home without a real estate agent. The
reason you should go this route is to avoid paying the real
estate agent commission of six percent that it typically
charged. Take a minute to figure out what six percent of your
asking price is and you will understand.

For whatever reason, you have come to the realization that you
need to move your property quickly. What strategy should you
employ? Well, you can list it on the market at a price lower
than comparable homes in your area. While this should eventually
lead to a sale, there is no telling how long it will take. It
could be a week or six months. Obviously, you need something
quicker.

One strategy to aggressively move your property is to start
calling mortgage brokers. No, you are not looking for a loan. A
mortgage broker, however, should have parties interested in your
property. A mortgage broker is in the business of locating the
best mortgage loan prices and products for homeowners. More
importantly, many real estate investors use mortgage brokers to
handle all of their financing needs. Since an investor is buying
multiple properties over and over, they simply don’t have time
to deal with the mortgage process on their own.

When contacting mortgage brokers, you are looking for
experienced brokers with over five or ten years in the business.
These individuals almost always have multiple real estate
investors as clients. The investors, in turn, have a standing
instruction to the mortgage broker to keep an eye out for any
investment opportunities. I think you can see where I am going
here. The mortgage broker is your link to investors who are
ready to buy and ready to buy now. These people do not quiver.
They will analyze your home and make an offer the same day if
they are interested. If the offer is acceptable to you, the
property is sold quickly and you have met your goal.

Will the investor offer lower than you are asking? Yes, but
everything is negotiable. Since you are a FSBO seller, you will
also have room to move on pricing given the savings you will
make by not paying real estate agent commissions.

About the author:
Raynor James is with the site – FSBOAmerica.org – sell your home
<a href=”http://www.fsboamerica.org“>for sale by owner</a> and
avoid paying realtor commissions.

I found this article to be somewhat helpful…

Author: Raynor James

You have seen the advertisements promising you can make out like
a bandit by purchasing foreclosed properties. Well, maybe you
can and maybe you cannot.

Considering Purchasing a Foreclosure

Foreclosed properties are almost always a result of mortgage
problems. When applying for a mortgage, you make a promise to
the lender that in exchange for a boatload of money, you will do
certain things. These things include making your monthly
payment, paying your property taxes and maintaining insurance on
the home so the lender can recover their investment if they
property burns to the grown and so on. If you fail to meet your
obligations during the term of the loan, the bank can then
foreclose on it and sell it off to recovery the amount it lent
you. In some states, the bank can even come after you for any
shortfall between the amount the home is sold off for and the
amount you owe on the loan.

One person’s problems are, of course, another person’s
opportunity. In the case of foreclosures, buyers often
immediately think they can get a deal on the property sitting on
the bank’s books. Banks, after all, do not want to own the
property. They are in the business of lending money, not
homeownership. So, can you get a great deal on foreclosures? The
answer is yes and no.

In some cases, you can get absolute steals when buying
foreclosed properties. In others, it can be an absolute
nightmare. The primary issues that arise having nothing to do
with the physical nature of the property. Instead, the problems
that arise have to do with why the foreclosure occurred.

The original owner obviously must have had some serious
financial problems if they lost the home. The important thing to
understand is many of these problems are affixed to the home,
not the previous owner. If you buy the home, you buy the
problems. For example, the home may be in foreclosure because of
tax liens or delinquent property tax debts. If you want to clear
the title on the property, you need to pay these off. Yes, you.
The home may also be encumbered by lawsuit judgments, which can
be a horrific problem to deal with.

The point I am making is buying a foreclosure is not the simple
process it may seem at first glance. You do not simply make an
offer to the bank and take possession. Instead, you need to
research, research, research the title and overall situation.
Why did the foreclosure happen? What is the situation with
title? Is the delinquent homeowner still living in the home and
how do you get them out? Did the previous homeowner trash the
property when moving out? The questions are endless and you need
to investigate them clearly. Unless you have experience with
foreclosures, you may want to retain a real estate attorney to
evaluate the situation. It is better to pay a couple of thousand
dollars now than get stuck with a nightmare later on.

Can foreclosures be good deals? Yes, but you must investigate
them closely and thoroughly to make sure they are not financial
traps.

About the author:
Raynor James is with the site – FSBOAmerica.org – information on
<a href=”http://www.fsboamerica.org/buyer.cfm“>home buying</a>.

This article by Milt Tanzer will help us learn from the Flippers that came before us. 

Twelve Deadly Mistakes Real Estate Investors Make and How You Can and Must Avoid Making Them

Mistake # 1. Spending thousands of dollars buying books, tapes and attending seminars and then putting all of that information on a bookshelf and never looking at (or using) it. Comment: I’m continually amazed at the number of “would be” investors who have spent a bundle of money attending seminars, getting an education and then never using it to start their investment program. Not only is it a waste of thousand of dollars but it could be the biggest financial mistake you can make.

Mistake # 2. Failure to learn the basics of real estate investing. Comment: The other extreme to Number 1 above, are potential investors who realize real estate is the best way to accumulate wealth and venture into the purchase of properties without knowing the basics of real estate investing. Those investors are almost certain to get into financial trouble.

Mistake # 3. Fear of making a huge financial mistake Comment: We all fear making mistakes, especially a large financial one. If you follow the advice in Number 2 above, you won’t have to worry about making a financial mistake.

Mistake # 4. Not looking at enough properties Comment: Don’t fall in love with the first property you look at. Too many investors buy properties because they “look nice” or they are just to lazy to see what else is currently on the market that may be better. Part of sound real estate investing is in giving yourself a choice so you can select the best one, financially.

Mistake # 5. “A better deal may be just around the corner” syndrome Comment: This is the opposite mistake of Number 4. This investor never starts his or her real estate investment program because they always hope a better deal may be out there somewhere if they just wait…and wait…and wait.

Mistake # 6. Thinking that real estate investing is strictly a complicated game that only the wealthy can play. Comment: First of all real estate is NOT complicated if you learn how to do it first. Did you know that even professional investors use a simple nine step process to analyze the financial feasibility of an investment property?

Here’s a brief idea of the nine simple steps they use in analyzing any type or size investment property. A Basic Financial Property Analysis 1. Scheduled Gross Income (Income if 100% leased) 2. Less: Allowance for vacancies 3. Operating Income before expense & Mtg. Pmts. 4. Less Operating Expenses (Taxes, insurance, utilities, repairs and maintenance etc.) 5. Equals: Operating Income (Income before Mtg. Pmts.) 6. Minus: Mortgage Payments 7. Equals Cash Flow 8. Plus: Mortgage Principle Payment 9. Total Return There’s a lot more to it than that, but you just read the basic nine step procedure most professional investors use when analyzing any income producing investment property.

Mistake # 7. Falling in love with a property Comment: Once you get your feet wet and become a real estate investor, you’ll wonder why you waited so long to begin. Now you’ll face another problem. Many investors fall in love with their property. They have seen how well it is doing, cash flow has been going up each year, and they have fallen in love with their tenants (not literally). Two big mistakes are made here. First, never fool yourself into thinking your property is doing too well to sell or trade up because your cash flow is considerably higher than when you purchased the property.

The second part of mistake number 7 is getting so friendly with your tenants that you fail to maintain rental standards based on what the market will bear. This greatly hinders your growth potential.

Mistake # 8. Failure to plan your financial goals Comment: Before you purchase that first property, which, of course, you financially analyzed, determine what you expect from your investments…your financial goals. It’s known as “The ‘time vs. money’” concept. The more you have of one the less you need of the other in order to reach your financial goals.

Mistake # 9. Trying to purchase properties that the seller is not motivated to sell Comment: I’ve seen potential buyers continually try to purchase investment properties that are not really on the market. This includes property owners with the attitude that “Sure, it’s for sale… for a price”. Unfortunately the ‘for a price’ part usually means it will make no financial sense for a buyer.

Mistake # 10. Believing you can get rich quick overnight with no money invested of your own. Comment:. Getting rich overnight will not happen . . . (regardless of what some of the so called “experts” tell you). It takes some time, effort and knowledge of real estate investing to do it with minimum financial risk. The important thing to remember is that YOU can do it, too. You can join the millions of investors who create sizable incomes by investing in real estate.

Mistake # 11. No money down investing usually isn’t. Comment: Somewhere, somehow there will be some money required to put a transaction together and make it profitable. It may be closing costs, repairs or upgrading, whatever. But somewhere, some money will be needed. There are ways around this problem without getting into a high risk situation. You may be able to finance every dollar you need, but it can come back to haunt you in the form of mortgage payments you cannot afford to make. Again, learn what you are doing first.

Mistake # 12. Not financially analyzing a potential investment property. Comment: This is the most serious mistake an investor, or potential investor, can make. I’ve seen a few pros in the business rely on a “worthless and inaccurate” rule of thumb to make a huge financial decision to purchase, with total disregard for how well the property will perform.

Oh, yes, there is one more major mistake many investor make: Mistake # 13. Thinking it’s important to pay off your mortgage as soon as you can because mortgages are a ‘necessary evil’.

Comment: First of all as a real estate investor, mortgages are good and not a necessary evil. You must learn why this is true. You must learn how, in the right situation, a second or third mortgage can be a good thing. Second: mortgages are one of the keys to creating wealth in real estate. You must learn how to use financing as one of the keys to creating your own financial estate, without concern for it being “risky”. Milt Tanzer

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Hello to all my fellow real estate investing junkies.  I started this blog for one reason and one reason only – I love flipping foreclosed homes.  Over time I intend to turn this blog into THE foremost weblog on the topics of finding, buying, and selling foreclosed homes in the United States.  I welcome any and all contributions, comments, and suggestions.  I am excited to get this thing started, so I will do my best to update it on a regular basis, however right now the foreclosure market is calling my name.  Wish me luck!…