House Buying Coaching For Ownership and Investing

The missing link to real estate wholesaling?

The Buyer.

When I first got started wholesaling properties, my biggest fear was how who to flip them out to.

Here's what you do:   1) Go to your local real estate investor's club and print up flyers that say that you are a wholesaler. Make it faxable so your investors can include name, phone # , email, area, price range etc.   You will get calls and faxes  
2) Many of your realtors that do HUD homes work with investors. Ask for names
3) Use Craigslist (FREE) to post your services as a real estate wholesaler
 4) Call on We Buy Houses signs and ads in your local area 
  This should get you a ton of prospective buyers.  

Now you have to qualify them.  

I'm doing a wholesale bootcamp in Houston this weekend. http://house-buy-coach-dennis.weebly.com  

I go over this in more detail   Hope this helps!  

Dennis

Investors get into the tax sale arena for two reasons:
1) Getting a guaranteed great return on their money
2) Possibly getting a deed to the property for really really cheap.

Now while these benefits are definitely attractive, you still have to keep in mind what you're getting into.

Are you buying a certificate that is redeemable by the owner or a deed itself?

If you're not getting a deed, are you willing to wait out the redemeption period where you really can't improve the home since you don't know if it will truly be yours or not.

So education is of prime importance in this business.
You really want to know what you're getting into.

In many municipalities, tax lien investing can be done completely online.

This has good points due to convenience, but you still have to do research on the property. You don't want to pick up some HAZ Mat piece of land that is of no profit to you at all.

In many cases, you actually have to bid on the interest rate paid on these liens. While the bidding might start up pretty high, you may also find yourself bidding the interest rate down to 7-8%. YSome positives are that you can invest in tax certificates and deeds from the comfort of your own home.

You can invest tax free by using a self directed IRA (More info here)

And there are ways to get tax deeds and tax liens that have very little competition.

One of the best things you can do, although many tax lien/certificate investors do not do is to deal with the homeowner themselves. This gets you into a great position way ahead of the competition.

An example of this is buying their redemption rights to the property. Pretty nice move!

Dennis

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

Zip Realty- one of the world's largest online realty firms has just partnered up with eRealInvestor to provide web based analytics for real estate investors.

They are catering to the 'new breed' of buyer out there, realizing that more and more people are seeing the fantastic opportunities in the market right now and are looking for ways to invest quickly and efficiently.

Here are some of the features according to CNN money:

Details of the "Investors' Info" tab include the following:

-- The tab allows real estate buyers to compare homes and rental properties side-by-side and estimates monthly cash flow, as well as calculating the potential return on an investment. -- Easy-to-use sliders allow site users to adjust variable inputs, including down payments and interest rates, to develop the most effective investment strategy for any individual property. -- The tab enables investors to view and analyze potential "hidden costs," such as property management fees, and allows them to include monthly utility costs, vacancy rates, and other expenses in their analysis. 

Not bad at all.

What to do?

First sign up for our property analyzer software so you can effectively run the numbers on any of your potential deals.

Second: Get with Zip realty.

I have contacts with Zip. Email me with any questions, and we'll get the right people to talk with you directly.

Have fun

Dennis


 

Property Wire, reports that the housing market is on the upswing for just about every US region except the Northeast.

This is part of a review of the past 3 months of data with a 2% increase coming in January.

The Detroit area, which has experienced a drastic decline actually saw a 14% gain.

It's still hard to tell if we have bottomed out or if we're in for anther dip. Real estate reports are like Medical studies which show that something is great for you one week and the next week, you might get cancer from it. Arghh!

Since we don't know what's going to happen, it's still important to buy smart:

Reduce and limit risk (wholesaling etc)
Buy right (conservative ARV's and add fudge factors for repairs and other expenses)

Cash flow is paramount. Whether you buy and hold notes, wholesale, whatever- good cash flow will see you through the hard times.

Dennis

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

I get this question often from newbies wanting to get started and feel that they need a mentor to take things to the next level.

I would start by going to the local real estate investors club. You can search here at creonline, and I also have a link on this site where you can search by state and city. Ask around. See who your local investors recommend.

Your mentor should not only be teaching but doing as well. He should being currently doing deals, and perhaps should be able to show you part of his portfolio of houses he controls/owns.

He/she should have a systematic way of moving you along your career that starts off with profitable- low risk strategies such as bird dogging and wholesaling and then gradually moving you from there.

Don't put too much money down up front. Take some basic classes- followed by a stand alone class such as wholesaling and start making money from there using some of your profits and experience to finance your further education.
 
Dennis

There are certainly a ton of ways to invest in real estate.

Buying REOs or real estate owned properties is one of them. Me personally, I like dealing with good old fashioned home owners. I like dealing with regular folks, and many times being the only buyer there. That's where the really good deals can be made.

Anothe reason why I like dealing with homeowners is- I like getting a Warranty Deed when it's all said and done.

With REOs you will get a special warranty deed. Why? Because banks have taken these properties from folks behind on their bills and probably owe other people too. So guess what? They're still stuck on the property which is why you get title insurance AND.. you try and get the lowest price you can for them.

Keep in mind that you should always have a formula for what you are offering. Don't offer 'just because' or so you won't get outbid.

Don't forget- just for filling out the contact form, you get a free property analyzer software.

So REO's are great but I like working with regular folks.

Dennis

Housing wire announced this week that Fannie Mae is adding to government home buy incentives.

They are offering a 3.5% discount on REOs to owner occupant buyers in order to reduce the large amount of vacant houses and bolster neighborhoods.

The discount can be applied toward's buyer costs etc and must be taken advantage of by May 2010.

You can check out these properties at HomePath.Com



3.5% Discount is a nice start, but homeowners are continuing to lose homes to banks that do not have the proper systems in place to work with homeowners to resolve their individual situations.

 

Additionally, while there have been some government consessions to relax constraints placed on real estate investors, more incentive is needed to allow inventory to move and be sold quickly.

 

Recent legislation just seems to hamper efforts by investors, while both sides should be working in unison.

 

Dennis

Private lenders are so valuable in they provide the fast cash in order to get deals done.

To start attracting private lenders, establish credibility. Start doing deals that lenders can see/touch. Create a small show portfolio of properties you own or have flipped. They need to feel comfortable and secured in their position with your comany.

The flexibility factor with private lenders is also a huge advantage. Instead of hard money- private lenders can provide the funds needed to purchase a property, do repairs, and pay for holding costs. Many times you are not making monthly payments, interest rates are favorable, and you have more control over when the money is due.

Private lenders can be found first among friends, family ,and within your circle of influence.

It's good to gradually bring them into your deals, for example as a small 2nd mortgage in order to do repairs on a home or for small amount needed to cure a defaulted loan in order for you to control a house.

From here, you can move on to larger loans and bigger deals- after you have established a comfort level with your lenders.

These lenders are gold- treat them well.