I need to tell the truth.
Real estate investing is not just a bed of roses. There can be some serous legal implications when you're dealing with people, houses, land, HOAs, and banks.
The Subject To method is one of them.
Basically, with subject to the buyer or real estate investor, gets the deed to the home, but does NOT assume the mortgage or refinance the home immediately.
People investing in real estate need to disclose all the stuff that can go wrong to the homeowners.
They need to know that they will no longer own the home, but they will own the debt.
Transalation: if the new buyer stops paying, the bank's going after the Them, not the new buyer since the previous homeowners are the only ones that signed the mortgage or deed of turst.
You need to give the homeowners a dose of reality- good and bad. And the disclosure needs to be in writing.
Do it for their benefit
do it for your conscience
Do it, cuz it's right.
Do it for ......... Dennis
An Article in the FDL reporter saddened me as forclosures are happening in that area in exponential form.
What's worse, is that some banks just don't get it and as the article showed 'won't even budge'.
I commented there that homeowners need information and representation to stop foreclosure and tax sales.
Many banks have options such as :
Forbearance agreements
Repayment plans
Even Temporary Stays where payments are not due for a time period while the homeowner tries to sell the home
Short Sales
Etc.
Real Estate Investors also have a role in educating homeowners as well as at times providing the necessary cash or purchase needed to avoid foreclosure.
Real Estate Investors can also act in the capacity of private lender to forestall foreclosure and tax sale as well.
At times properties are not in prime condition and cannot be sold to the general buyer.
Investors with cash, construction financing, etc can also step in these situations as well.
Bottom line. Talk to a professional. Get some advice and get someone on your side.
Dennis
I get questions all the time as to how to make money quickly in real estate. Many of these questions are from new investors that are a bit frightened about doing their first deal.
Risk, the newness of it all, scares them a little bit.
You can do it! You just have to be willing to put in the effort and be willing to step outside of your comfort zone.
I had a real estate investing student of mine that signed up over 100 houses in his first two years in the business.
I'd like to share with you how he did it:
1) First he took some investing classes so he knew what a deal is supposed to look like. In other words, you need to know the numbers going in.
2) He learned how to market for properties
3) Put the property under contract
4) All the while, he was going to local real estate investment clubs and putting out flyers showing himself to be a bonafide wholesaler.
Guess what? He started doing deals by simply locking up properties under contract and flipping the contracts (purely legal by the way) to the investors that would actually close on the deal and pay him a fee for it.
You should expect to get about $1,000 for every $5,000 of profit your end buyer investor expects to get on the deal.
I have a property investing software on my website I would like to give you.
You just have to plug in the numbers to fit your local area, but you're welcome to it. Just use the Contact form and submit it!
Dennis
Looks like a lot of folks. And for good reason too!
The latest Homeownership Survey shows that foreclosure buyers and other investors are expecting to get 25% or better discounts and then having their property appreciate on top of that with an improvement in the housing market.
RealtyTrac.com reveals that lenders are anxious to unload tons of inventory of repossessed and foreclosed homes- offering them at very appealing prices.
With tax credits, and low interest rates, many investors hope to cash in on this current market.
Either way, you can't bank on appreciation alone. If the deal isn't good on its face (right now- in the present) .. then it isn't a deal.
You've got to know all your numbers going in. What are the repairs, holding costs, cost of investment. What is the after repair value- presently (not what you hope it to be).
My free property analyzer is available for the asking. Free when you ask nicely by using the contact form to the right :-)
Dennis
I'm talking about income here people :-)
Zillow has come up with a new list of celebrity foreclosure and pre-foreclosures for those of you out there that are looking to short sale $Million-plus houses.
Included among those in real estate financial woes are:
Actor Nicholas Cage whose home sold for half! of what he bought it for. Ouch!
NFL Detroit Lions' Lineman Luther Elliss
Singer Toni Braxton
Victoria Gotti from Growing up Gotti Fame
Comedian Sinbad
and a host of others.
Many would read this and say- Ha ha. I have even ready a few LOL comments left all ove the internet on this one, but I say: Size doesn't matter folks.
One's income and fame - even connections as can be seen in the Gotti case- does not matter.
Income doesn't matter if you continue to buy houses and other gadgets that are actually beyond your means.
Example: Income= $10million per year
You buy a house, cars, Villas, airplanes that cost you $12million a year in payments= You're in trouble.
The key is to find out what you can actually afford and live UNDER that amount each month and each year.
The Key is appreciating what you have and not buying stuff for the sake of buying it.
This applies to real estate investors as well, because we make up a part of these foreclosure numbers don't we?
You have to know your numbers getting into any transcation, AND provide yourself with a cushion just in case the deal doesn't go the way you had drawn it up.
You can always get my Property Analyzer software - Free for the asking when you fill out the contact form on my site.
Remember, run the numbers- and stay out of the headlines.
Dennis
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