By D.C. Fawcett, Business Building Coach to the Foreclosure Industry

Despite the opportunities that exist with either preforeclosures or bank owned foreclosures, I think there is also a certain amount of risk for the novice foreclosure investor. Profits can be lost and foreclosure investing opportunities can be missed when you lack the proper real estate investing training.

I hear from many investors that they’d love to enroll in serious foreclosure training but simply lack the money to do it right now. Folks, there are free sources of information out there and you owe it to yourself to pursue each and every one of them if money is currently a limited resource.

A great source of basic foreclosure information comes from preforeclosure articles. I, for one, have written dozens of preforeclosure articles to help investors just like you to get started in this exciting business. Preforeclosure articles can also be found on websites for real estate investment clubs or in their newsletters if you are a club member in your area (this is something I definitely recommend).

In addition, preforeclosure articles are abundant online when you search the term preforeclosure as part of your education in the business. Preforeclosure articles can be found in electronic magazine (ezine for short) sites or even on websites for your local newspaper. The bottom line is that if you can’t find preforeclosure articles, I would argue that you just aren’t looking very hard because these preforeclosure articles are out there and they are a great resource for you.

I assure you that there are virtually unlimited deals to be found within the realm of real estate foreclosures. Whether you’re just curious how to make money with foreclosures or really dive in and engage in serious investing, the countless preforeclosure articles that exist today (including this one) can help you break the ice and get started. There is a place for you in this business and you owe it to yourself to pursue it.

In today’s market, preforeclosures as much as part of real estate investing as any other part of the business. Make sure you have the resources you need to be as successful as I know you can be. Read all the preforeclosure articles you can find and use what you learn to build a team around you because the deals are out there to be had. Commit yourself to education and real estate training, and I wish you the very best in success in real estate foreclosure investing and in business as a whole.

Technorati Tags: pre-foreclosure investing, preforeclosures

I read the Orlando Sentinel newspaper this morning and found encouraging information about the Orlando residential real estate market.

The article reports:

“Members of the Orlando Regional Realtor Association sold nearly 5 percent more homes in November than they did a year ago, as prices continued to drop to levels not seen since 2004, which has made more homes more affordable, the trade group reported Wednesday.”

This upswing was initially forecasted earlier this year, when area real estate experts theorized that the record number of Florida foreclosures would eventually shift in favor of the homebuyer.

These numbers are certainly positive. And they support the theories of area experts. But they also pose interesting questions, as well as reason for concern.

First, the numbers might be too positive. While five percent is noteworthy, it is not miraculous. It might, however, still be enough to stir the market into action.

Caution should be exercised. A five percent increase in home sales, especially compared to 2007’s sales–when the market was tumbling in a downward spiral–do not necessarily reflect an overall turnaround in home sales.

Today’s enterprising homebuyer needs to focus on his or her personal financial situation. Regardless of market trends, jumping too quickly into a questionable investment could have consequences.

Second, if these numbers stir significant buyers into action, and the market is not yet stable, new homeowners and investors alike might well find themselves in the same situation as a year or two ago, when stagnant property, swollen market prices, and a decimated economy forced owners into foreclosure.

The key is to watch the numbers. If property prices continue to fall, wait to buy. If they flatten out, wait for Orlando’s economy to bounce back, then buy right before the iron gets hot.

For homebuyers, the article continues:

“Not everyone who wants to buy a home can do so right now, even if they have good credit. Despite the low financing rates, buyers are still having to meet higher credit standards as a result of the ongoing stress in the financial markets.”

Fortunately, Orlando renters have been spared dramatic increases in monthly costs. If a person wants to buy, but does not yet have the credit or capital to do so, now is a good time to rent property.

Wait until you are ready to buy. The real estate market serves wise investments well.

November’s positive numbers are positive numbers nonetheless. If you are ready to buy property in Orlando, the current prices might be the best you’ll see.

michaelrussell
http://www.articlesbase.com/project-management-articles/orlando-real-estate-the-good-and-bad-720976.html

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The Dallas Morning News reported recently that Dallas’s residential real estate market has a reason to feel encouraged.

The article reports:

“According to a new U.S. Census Bureau report, Dallas-Fort Worth drew in more people than any other metropolitan area in 2007. The area’s population increased by 162,250 people between July 1, 2006, and July 1, 2007. Population growth, affordable housing, relatively low interest rates, a central location and mild climate all point to strong future demand for housing.”

This upswing was initially forecasted earlier this year, when area real estate experts theorized that the record number of Dallas foreclosures would eventually shift in favor of the homebuyer.”

These numbers are certainly positive. And they support the theories of area experts. But they also pose interesting questions, as well as reason for concern.

First, the numbers might be too positive. While these combined elements are noteworthy, they not miraculous. They might, however, still be enough to stir the market into action.

Caution should be exercised. An increase in home sales, especially compared to 2006’s sales–when the market was tumbling toward a downward spiral–do not necessarily reflect an overall turnaround in home sales.

Today’s enterprising homebuyer needs to focus on his or her personal financial situation. Regardless of market trends, jumping too quickly into a questionable investment could have consequences.

Second, if this news stirs significant buyers into action, and the market is not yet stable, new homeowners and investors alike might well find themselves in the same situation as a year or two ago, when stagnant property, swollen market prices, and a decimated economy forced owners into foreclosure.

The key is to watch the numbers. If property prices continue to fall, wait to buy. If they flatten out, wait for Dallas’s economy to bounce back, then buy right before the iron gets hot.

For homebuyers, the article continues:

“Not everyone who wants to buy a home can do so right now, even if they have good credit. Despite the low financing rates, buyers are still having to meet higher credit standards as a result of the ongoing stress in the financial markets.”

Fortunately, Dallas renters have been spared dramatic increases in monthly costs. If a person wants to buy, but does not yet have the credit or capital to do so, now is a good time to rent property.

Wait until you are ready to buy. The real estate market serves wise investments well.

Positive news is positive news nonetheless. If you are ready to buy property in Dallas, the current prices might be the best you’ll see.

But if you’re interested in Dallas apartments, Promove has comprehensive listings, complete with photographs, virtual tours, maps, and will guide you every step on the way to your ideal apartment.

michaelrussell
http://www.articlesbase.com/moving-and-relocating-articles/dallas-real-estate-trends-697638.html

Beginning investors who find themselves strapped for cash often start real estate investing by wholesaling properties to other investors.

With the market in its current condition more and more investors find that they are coming across hordes of motivated sellers. Unfortunately, all of these potential prospects tend to share one thing in common. They don’t have any equity! This little dilemma is causing many investors to turn their efforts toward bank-owed foreclosures.

The single biggest advantage associated with REOs is the fact that equity can be created instantly either by finding a hot deal or through shrewd negotiation. There’s nobody telling the bank that they owe too much on a property and can’t lower the price a bit. In theory…any house could be sold for as little as a dollar.

In fact, there is only one downside to wholesaling REO properties. Non-assignability. When an investor gets a bank owned property under contract it always comes with multi-page addendums that make the deal non-assignable.

A lot of new wholesalers will consider this one obstacle to be the end of the line where flipping bank owned homes is concerned, never knowing that there are four ways to maneuver around this bump in the road.

Method #1 - Add to Contract, Then Quit Claim

Most banks do not have an issue with adding an additional party to a contract, they just do not want the ORIGINAL parties removed from it at any time. So Ivan Investor can get an REO property under contract for $50,000. Ivan calls Louie Landlord and after talking about the deal Louie agrees to pay a total of $60,000 for the property.

Ivan calls the bank up and requests that an addendum be drawn up that adds Louie to the contract and title. The Bank agrees and everyone shows up on closing day.

Louie brings TWO certified checks. One for $50,000 for the purchase of the property, and one for $10,000 made out to Ivan. All parties then show up for closing and both Ivan and Louie then own the home. Louie hands Ivan the $10,000 check and Ivan signs a quit claim deed removing him from title on that property. Pretty simple, right?

Pros: The advantage to this method is that there is only one set of closing costs. It’s a rather simple and straight-forward method that works for most deals. It works around the 90-day deed restriction that comes packaged with many Fannie/Freddie properties.

Cons: Here are the negatives that come with this method. This does NOT work for HUD properties because HUD does not allow any changes to the parties that are on the original offer and the end buyer usually cannot be getting a mortgage because a mortgage company won’t allow you to be on title if they are lending someone else money against the home.

Method #2 - Simultaneous Double-Close

The simultaneous double-close (also known as a simul close or a “dry” close) is actually two transactions. An investor is buying from the bank and then instantly reselling to a third party in a separate transaction. It follows a typical A-to-B-to-C deal flow.

The “twist” that comes with this method is that the wholesale investor never actually brings any money into play. The end-buyer’s funds are used to fund BOTH transactions. This is possible because, as long as both closings take place on the same day, it doesn’t matter which one closes first for the title company’s accounting purposes. The second transaction (B-to-C) could take place a 9am with all the paperwork for that transaction taken care of at that time while the first transaction (A-to-B) doesn’t close until 2pm.

What really matters is that the deeds are RECORDED in the proper order when filed with the county. It’s important at that time to have the A-to-B deed filed first with the B-to-C deed following on record.

Pros: This works well for those who have zero cash as long as they have a good title company that will still do these types of transactions. It still works even with end buyers that are getting conventional financing if the end buyer is getting their financing through the right lender.

Cons: This method is NOT an option if the end buyer is getting FHA financing. This method also does NOT work for Fannie/Freddie foreclosures in most cases because these super-banks put a deed restriction in place that prevents you from reselling the property to ANYONE for a full 90 days.

Also, with all double-close deals there are two sets of transfer taxes, recording fees, and other closing costs that cut into your profit. Of course you can just build that into the deal by lowering your offer price in order to circumvent this small annoyance.

The biggest roadblock to getting these transactions closed is the fact that fewer and fewer title companies are comfortable with the “dry” simultaneous close where the wholesale investor brings in no cash to the deal. In fact, they are often refusing to close these deals at all!

Method #3 - True Double Close

The true double close (also known as a “wet” close) is the same as the simultaneous close in that the investor is buying the foreclosure property and instantly reselling it to the end buyer for a profit. However, the wholesale investor is actually bringing in his own cash to fund his end of the deal.

This little difference makes the title companies happy but it doesn’t work so well for beginning investors that don’t have piles of cash sitting around to make the deals work.

Then came Flash Funding. There are “transactional funding” lenders will lend you all the money you need to do these same-day double-close deals…for a price. Most will never run a credit check or request an appraisal on the property.

The pros and cons to this method are pretty much the same as the simul close, except that on the good side more title companies are willing to do business with you if you go this route and on the bad side you have additional costs in the form of Flash Funding fees chewing away at your profits.

Method #4 - Sell The LLC

This last method has been popularized by Steve Cook who’s said that he swiped it from commercial real estate investors who have been using it for years to avoid paying transfer taxes.

The idea is that an investor would submit an offer in the name of an LLC. If the investor was placing an offer on 1221 Sycamore, he may send it in with “Sycamore Group LLC”. If the offer is accepted, the investor immediately faxes in his LLC articles of organization and creates the company to match the Buyer on the purchase agreement.

From there the investor finds his end buyer and they agree that on closing day the end buyer will purchase the entire LLC from the original investor for the amount of the wholesale fee. From there, as the new owner of the LLC, the end buyer is empowered to close on the original transaction and purchase the property.

Pros: The upside to this method is that you workaround the extra costs in the form of transfer taxes and/or Flash Funding fees that come with the two Double-Close methods, and for those who are concerned about guarding their privacy, your name never goes on the deal.

Cons: The major obstacle to this one is that the end buyer has to pretty much be paying cash. Banks do not loan traditional mortgages (either to owner occupants or investors) in company names. You have to buy it in your own personal name to get a mortgage. Other concerns are that if you do this often enough you may attract the attention of state regulators who are confused as to why you start and sell 5-10 LLCs each month.

Armed with these four workarounds, investors nationwide are able to successfully wholesale flip REO foreclosures. None of these methods require the wholesaler to bring his or her own cash into play other than the initial earnest money deposit and none require a credit check. One of these methods will work for pretty much any situation you will come across when flipping bank owned homes.

Brian Kurtz
http://www.articlesbase.com/finance-articles/wholesaling-bank-owned-foreclosures-a-definitive-guide-736881.html