House Buying Coaching For Ownership and Investing

Here's the situation:

While Houston and Dallas rank 6 and 1 in the nation for commercial real estate growth, the commercial real estate field is very bleak.

North County times reports that: Banking analysts warn that the nation could be swept by a wave of foreclosures of apartment buildings, retail outlets, industrial space, and office complexes in the coming year.

So we just lowball and short sale all these properties right?

Sam Zell who made billions of dollars in commercial real estate doesn't think that will work, especially with apartment complexes not having much equity at all.

His suggestion: Invest in the debt!

Same can be applied in residential real estate as well. This is different from a short sale. Here the note is actually being sold for a discount. Different department all togethe

Hey guys,

Just giving you a heads up on the proposed HUD mortgage SAFE act. HUD ID 2009-155

It looks as if they are trying to limit Owner Financing to Home owners that actually live in the home they are trying to Owner finance.

Otherwise, they are looking to require licensing from people that they would then view as 'originating a loan'.

As you know that can really hamper some of our creative financing techniques.

Whether this passes remains to be seen. Either way, now is the time to start formulating strategies that work within the bounds of the proposal.

Government has tried to limti real estate investors in lease options, owner financing and title seasoning issues.

We'll survive this as well.

Dennis

PS Here are some proposed ways you can get involved right now:

The following information is extremely important!

 
HUD Issues Problematic Rules Interpreting SAFE Mortgage Licensing ACT

HUD has proposed to eliminate ALL seller financing unless the seller lives in the home or becomes a licensed mortgage originator. The proposed HUD Rules interpreting the federalSAFE mortgage act can be viewed at www.regulations.gov  Use the search parameter "HUD" and the keyword “safe”.  Please review and comment regarding the impact of this broad interpretation of the law. 

 “In addition to establishing HUD’s responsibilities under the SAFE Act, through this rule, HUD proposes to clarify or interpret certainstatutory provisions that pertain to the scope of the SAFE Act licensing requirements, and other requirements that pertain to the implementation, oversight, and enforcement responsibilities of the States. HUD solicits comment on the proposed clarifications and on the regulations proposed to be codified."


History:

 As you may recall, we lobbied hard last year to maintain the right for individuals to make up to five seller financed transactions per year before being subject to mortgage originator licensing, etc...  However, that law was passed subject to the Department of Housing and Urban Development's (HUD) approval of the law as "compliant" with the intention of the federal law.  If any state does not have a compliant law, the SAFE act allows HUD to implement licensing for the state.  HUD has since issued proposed rules.  In a nutshell, seller financing would no longer be allowed for non-owner occupied homes.

 How YOU can help:

 We learned about the publishing of the rules very late in the process... and the deadline for comment is upon us on February 16.  However, we desperately need for thousands of REIA members across the country to go on record with HUD on this issue.  We will be working to try to affect this law in other legislative ways, but cannot hope to gain traction unless our members have clearly communicated that they are opposed to this portion of the rules. This is your chance to be counted on this issue.

 

PLEASE SUBMIT YOUR COMMENTS TO HUD!  We have less than one week to flood this system with comments.

 

Follow these simple steps:

1.  Logon to www.regulations.gov   You will see two white boxes for searching

2.  On the left box labeled "Document Type", pull the menu down and select "proposed rules"

3.  On the right box labeled "Enter keyword or ID", enter "safe mortgage".  Then, press search

4.  Locate the blue search result "FR-5271-P-01 Safe Mortgage Licensing Act: HUD Responsibilities Under ...." To read the rules, click on this title.  You will be taken to another page. You will see "views".  You can click on PDF file or another symbol which will show you the rule document online. 

5.  On the right of the screen, click on "submit comment"

6.  Complete the form providing required information and your comments and then submit

What do you say?

Say what you feel, but say it politely!   The message should include that you would like the definitions in the proposed rules to be changed so that private individuals can originate and service loans on properties they personally own.  Some ideas from others:

• bank loans are not available on some types of properties

• the tight lending climate has made bank financing "out of reach" for many

• seller financing is an "age old" tradition based on private property rights

• these rules would prohibit even partial seller financing - i.e. a "seller second"

• according to HUD's "Residential Finance Survey" in 2001, roughly 40% of all non-farm residential properties in the US are owned free and clear

• an estimated 6 million Americans own a property other than their own primary residence

• an estimated 4.5% of Americans own three or more properties, many purchased solely as investment properties

• 40% of non-owner occupied residences are mobile homes which are more difficult to sell with bank financing

• approximately 5% of homes in US are for sale or for lease... seller financing may be key to liquidating this inventory

We've heard a lot of hope lately of finding the bottom to the housing collapse, however new reports from Housing Predictor indicate we may actually see another down turn!

Why? High unemployment, 2.4% downturn in the US economy and failures in the government.

Michael Lea, professor of finance at San Diego State Unversity actually said that 'the dam will break and we will see a significant increase in foreclosures'.

Now that's scary!

What do do ? It's still an excellent time to be a housing investor. Reading articles such as this also shows that you need to buy right and build in profits when you buy- not just relying on appreciation that may not come for a while.

Be more conservative in your after repair values and give yourself some more breathing room when it comes to holding time from purchase to sale or rental.

Dennis