Private Lending: Pros and Cons One of my investors called me up today and told me he had decided he was ready to get into the lending business. He had already purchased a number of properties over the last year or so and was ready to diversify his real estate investing strategy. Part of his decision making process had to do with the tedious financing process he had experienced when buying a property a few months prior, but I think most of the decision had to do with a desire to branch out … [Read more...]
The Hardest Part of Buy-and-Hold Real Estate Investing: Delayed Gratification
August 28, 2012 By Leave a Comment
The Hardest Part of Buy-and-Hold Real Estate Investing: Delayed Gratification Let me start this post by saying I love “buy-and-hold” real estate investing. I just wish it was easier.Flipping real estate or wholesaling deals is appealing, as cash is quick and you know in a short time frame if you have made a good deal. Unfortunately, buy-and-hold real estate can take a long time to generate a meaningful amount of cash flow.This leads me to today’s topic, as I want to highlight what I … [Read more...]
Don’t Get in Trouble Flopping a Short Sale
August 1, 2012 By Leave a Comment
Don’t Get in Trouble Flopping a Short Sale With the declining number of REO foreclosures on the market right now, many investors and wholesalers are having success acquiring properties through short sales. However, dealing with REO foreclosures and short sales can be two very different animals. While buying and selling an REO is typically straight forward, the laws surrounding the reselling of a short sale are quite different.For those new to real estate: a short sale is a real estate … [Read more...]
Building Trust With Sellers
July 31, 2012 By Leave a Comment
Building Trust With SellersThis month is all about building trust in our real estate investment business. And sellers are an important part of the business. We’ve talked about building trust from several angles, so let’s continue by talking about trust and our sellers. 1. Find Out What the Seller Wants One of the most important things you can do for a seller is find out what he/she wants from the deal. Do they want to sell quickly? Do they want cash? Do they want the best deal they can … [Read more...]
Why Aren’t Sellers Selling?
July 25, 2012 By Leave a Comment
Why Aren’t Sellers Selling?Several factors are driving the inventory drought which is dramatically changing housing markets, especially for properties under $200,000 in Western markets. HousingWire reported yesterday, for example, that Phoenix short sale prices rose 23 percent in June from last year, while foreclosures were up 36 percent and non-distress sales up 11 percent.Nationwide the drought helped push the average home sales-to-listing price ratio to 95.6 percent in June, according to … [Read more...]
An Investor’s View On Mastering Your Inspections
June 16, 2012 By Leave a Comment
An Investor’s View On Mastering Your InspectionsFrom real estate agents to banks, to flippers to buy and holders, to wholesalers to buyers and sellers (forgive me if I forgot you), inspections almost always have their place in the course of a real estate deal.I want to take a moment and view home inspections from a flipper’s point of view. My investment company currently holds mostly a short term exit strategy on our residential buying opportunities. In short, we are looking to get the … [Read more...]
“Smart Money” Woke Up – Now What?
May 29, 2012 By Leave a Comment
“Smart Money” Woke Up – Now What?I don’t know about your market, but I can point to the day the “Smart Money Woke Up” and started changing the real estate fundamentals for the buy-and-hold investor. It was like a starters gun went off and competition tripled, prices went up 20% in the distressed market and bidding wars became not only commonplace but also became the norm.I believe the trigger was pulled by Warren Buffett and his now famous quote that went something like this:“I … [Read more...]
Value Disputes and Bank of America Short Sales
May 22, 2012 By Leave a Comment
Value Disputes and Bank of America Short SalesIf you have completed more than a handful of short sales, then you have likely have been involved in a value dispute with the short sale lender. During the course of the short sale, the short sale lender sends out another Broker to complete a Broker Price Opinion (BPO) for the short sale listing. The bank then, in most cases, bases their price on the value stipulated in the BPO. However, often times, there is a discrepancy between the value … [Read more...]
What Does a Real Estate Note Buyer Look for in Your Note?
May 18, 2012 By Leave a Comment
What Does a Real Estate Note Buyer Look for in Your Note?Selling a property with a note can be a great way to get market value for your property, after all you are operating as the bank to the homeowner and therefore “lending” your money for their property purchase. Quite often note holders want to sell their notes for an immediate payoff but are not sure of what criteria a potential note buyer will use to judge their note value. It is important to know these items as you have a valuable, … [Read more...]
How to Address Closing Cost Credits in Short Sale Transactions
May 15, 2012 By Leave a Comment
How to Address Closing Cost Credits in Short Sale TransactionsAgents, buyers and sellers are abuzz because it’s a seller’s market again. Just a few weeks ago an agent friend of mine received 24 offers on his short sale listing, and another property in my area got 10 offers the very same weekend.When reviewing short sale offers with clients, it is important to look at the type of loan that the buyer will obtain: VA, FHA, or conventional financing. And, will the buyer require a closing cost … [Read more...]
Marketing a Seller Carry Back Deal
May 11, 2012 By Leave a Comment
Marketing a Seller Carry Back DealI feel extremely uneasy when someone refers to me as an expert, unless, of course, it has to do with breakfast cereal or cheap red wine. Luckily, this doesn’t happen very often. I also don’t like real estate professionals, social media consultants, bloggers and economists referring to themselves as experts. Seems a little vain to me.The only thing I really know about real estate investing is that I don’t know everything. And when I read the … [Read more...]
Do you know what a Non-Performing Note Could Cost You?
May 10, 2012 By Leave a Comment
Do you know what a Non-Performing Note Could Cost You?Non-performing note investing is not for the faint at heart. In fact, many note investors get excited about the prospect of buying non-performing notes at pennies on the dollar and they can only think of the upside potential of the note purchase. What really needs to be done is to consider the worst case scenario of being a non-performing note investor and hoping for the best, but planning for the worst.Here are a few things to consider if … [Read more...]
The 3 Types of Mobile Home Sellers (Inside Parks)
May 4, 2012 By Leave a Comment
The 3 Types of Mobile Home Sellers (Inside Parks)My real estate investing business changed forever when I began to see my sellers for what they really are; fragile, scared, vulnerable, friendly, and selfish human beings. As young children we rarely look to our parents with the attitude that these people are just as screwed up as ourselves. Perhaps a better way to phrase this would be to step outside the relationship that we typically have with mobile home and traditional real estate sellers, and … [Read more...]
Improved Short Sale Processing Time – Fact or Fiction?
April 24, 2012 By Leave a Comment
Improved Short Sale Processing Time – Fact or Fiction?If you are considering the purchase of a short sale or if you are an listing short sales, 2012 may be the year for you. First off, the Mortgage Forgiveness Debt Relief Act of 2007, which protects certain short sale sellers from tax liability, is set to expire at the end of the year. The Treasury has amended the HAFA guidelines for those short sale sellers interested in participating in the government’s HAFA short sale program. Bank of … [Read more...]
Changes at Bank of America With Short Sales
April 17, 2012 By Leave a Comment
Changes at Bank of America With Short SalesAs of April 13th 2012 Bank of America made a few major changes that may make our short sale processing times more efficient. The goal of these changes is to make short sale processing through Equator (the Internet-based platform) at Bank of America so efficient that short sale approval can be received in less than one month.First off, Bank of America will require their new third party authorization for all short sales being processed through … [Read more...]
Commercial Short Sale Boot Camp!
April 13, 2012 By Leave a Comment
Commercial Short Sale Boot Camp! You have to work hard to get the short sale process approved and to get through the process. Here’s how a commercial short sale works.A short sale is basically selling a property at the current market rate without adding in the debt owed to the owner or lender. This sale has to be approved by the mortgage holder in order to make the transaction happen, so that’s where the work starts.The ProcessThe first step to beginning a short sale is to get a market … [Read more...]
A Short Sale Could Be Like a Game of Clue With Out The Fun
April 10, 2012 By Leave a Comment
A Short Sale Could Be Like a Game of Clue With Out The FunRemember when it was Professor Plum in the library with the lead pipe? Well, solving the mystery in a game of Clue would be a much smoother and more efficient death than what you might see in the wacky world of short sales. If a short sale were like a game of Clue (by Hasbro), instead of a lead pipe you could be wiped out by an abstract of judgment, an HOA lien, or even an IRS tax lien. Weapons such as these will get in the way of … [Read more...]
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Learn from My Mistake: Why You MUST Understand Your Seller’s Needs
Learn from My Mistake: Why You MUST Understand Your Seller’s Needs Several weeks ago, I wrote an article about a deal I had to give up on because the bank wasn’t playing ball — it was called “Swing and a Miss.”The gist of that story is that I was trying to duplicate my deal of the year from 2011 in 2012 by buying the apartment build next door to my original 2011 purchase. In the story, I had to give up because I wasn’t able to structure the deal in the same fashion.Shortly after … [Read more...]