Foreclosure
4 Signs of a Depressed Housing Market
Wednesday, August 17th, 2011 | Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
For the second year in a row, residential housing construction failed to contribute to growth in the US. The demand for building permits fell, new home construction starts are down, and the foreclosure pipeline is as full as ever. As a result, banks are keeping a tight fist on mortgage lending standards. There are four main indicators that we can look to and determine that we’re still in a pretty significant housing slump:
- Fewer New Home Permits – Last month, there number of new homes under construction was at the lowest rate since 1970. Single-family home construction fell by nearly 5%, whereas apartments and townhouses rose by nearly 8%.
- Falling Demand – Increasing foreclosures are keeping real estate values down. As a result, builders have little incentive to put up more houses in an already flooded market.
- Strict Credit Standards – Getting a mortgage for the average homeowner remains tough. One of the reasons, according to the banks themselves, is there is “reduced or unchanged demand from creditworthy borrowers.”
- Weak Stock Futures – Uncertainty in overseas markets have economists nervous, especially following the recent S&P credit downgrade. The Treasury’s 10-year note fell to 2.27%, from 2.31%. The import index was down .3% in June.
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Note Buying Mastery
Friday, June 24th, 2011 | Bank owned, Foreclosures, Real Estate Investing, Uncategorized | No Comments
Hey, Josh Here,
Did you miss my friend Chris Gleize’s “Be the Bank” webinar last night? If you did, you’re in luck, because you can check it out here… it’s really some awesome stuff, so sit back, grab a pen and get ready to take on a new opportunity in real estate investing! You can also learn more at www.noteswithjosh.com.
Learn More at www.noteswithjosh.com
Top 5 Keys to Understanding Private Lending
Friday, June 3rd, 2011 | Bank owned, Foreclosures, Pre-foreclosure, Real Estate Investing, Real estate short sales, Short Sales | 1 Comment
Private lending is the absolute key to unlocking the door to successfully completing real estate deals. Why would you want to use a private lender? You are able to get money from individuals more easily, more cheaply and on better terms than you can from institutions. In real estate, where you may only need short-term money, the door to borrowing from institutions may be locked. What do we mean by private lending? Private lenders are individuals who will loan money on a one-to-one basis, often from their retirement accounts, for various types of investments. Borrowers sometimes secure more than one loan for their projects if the first private lender is willing to make the loan but doesn‘t have enough liquid cash to provide the entire amount needed. The demand for private money outweighs the availability, unless you know how to look for it. However, you have to make sure that you are careful in how you work with private lending. If you do it wrong, you are going to screw things up and will have a host of problems and chaos.
1. Know the Lender’s Concerns – There are three main things that are important for lenders in a private lending scenario:
- They want a smooth, simple transaction – be sure you can easily and clearly explain the purpose of the loan.
- They want to make sure the principle, the amount of money they are loaning, is going to be adequately protected.
- They want to know their rate of return – a function of both points and time; their overall return after legal fees, title work and lost opportunities.
How will the principal be protected? How will the principal be paid back? What is the anticipated profit? When will that be paid? Is there enough profit to make it worthwhile for both the lender and the borrower? The lender‘s job is to ask those questions.
The lender needs to vet the borrower and make sure this deal will happen. If you as a borrower can address those concerns up front and outline the deal in detail, before the private lender even has to ask, you take a load off his or her shoulders. Prove on paper that the deal makes sense, that it will perform and that it will close.
2. Know the Title Company’s Concerns – Whether you are the borrower or the lender in any private lending transaction, think carefully about the terms and respect the people that are instituting those terms. The title company is responsible for coordinating the transfer of property and the exchange of funds, and will want:
- Money to be wired to them or brought by way of a cashier‘s check, bank check or certified funds.
- Closing instructions from the private lender.
- Escrow instructions signed by all the parties involved (how they need to execute their tasks, handle the money and what their duties and responsibilities are for each party to the transaction.) The closing instructions will come from the lender, who is indicating under what terms they‘ll release their funds so that the transaction can go forward.
3. Knowing the Attorney’s Concerns – Most of the time, the responsibility of getting the correct paperwork in place for a privately funded transaction is going to fall upon the private lender and the private lender‘s attorney. Private lenders need to make sure that they have an attorney who understands these types of transactions; they are different. Anything and everything can be negotiated, and the attorney needs to understand what was worked out between the borrower and the lender.
- Loan and Real Estate Documents – Promissory note, mortgage, deed.
- Payment Documents – Closing instructions, projected payment history, accurate payment schedule and loan history.
- Business Documents – Personal guarantee, business-to-business agreements.
5. Knowing the Private Borrower’s Concerns – All private lenders should understand the issues that borrowers have to consider. They need access to the money. They wouldn‘t be looking to borrow money if they didn‘t need it, and they generally need it relatively quickly and easily. So access to money is their first concern. Are they getting access to someone with money to loan, and is that access something that can be responsive to their needs?
- Borrowers want a smooth, simple transaction.
- The money is there and can easily be applied to the task at hand.
- Borrower’s need to understand the private lender’s terms.
- Set up a win-win situation.
6. Putting Private Money into Motion – “He who has the gold makes the rules.” Private lenders make an important contribution to real estate investing. They make it possible. If you want to make a lot of money, you need to know how a private lender fits into the mechanics of your deal.
- Understanding do’s and don’ts of advertising for private money.
- Long-term or rehab deals.
- Quick turn or “flip” deals.
Here I’ve really just touched on what is involved in private lending for real estate investing. It is an integral part of successful investing, and if you know how to navigate the world of private lending, you’ll have access to a wider range of investing opportunities.
To learn more about private lending, or to kick your own real estate investing efforts into high gear, click here .
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6 Stages to Successful Property Rehabbing
Friday, June 3rd, 2011 | Foreclosures, Real Estate Investing, Real estate short sales, Wholesale properties | 6 Comments
Learning how to rehab houses gives you the best chance of building a sustainable real estate business that will open other opportunities for you. For many a successful real estate entrepreneur, rehabbing is where they cut their teeth. It’s where they gained the skills and insight necessary to build a foundation leading to other opportunities in real estate investing.
When rehabbing a house, there are six main stages of the process:
Stage 1: Pre-Construction – As soon as you close on a property, you want to get to work; after all…time is money. Below are some basic tasks to consider –– in some cases you can complete them before the house closes:
- Secure the Property – If you’re buying properties in a tough area, board up the windows and secure the locks. Even if the property is in a nicer neighborhood, rekey the locks; you never know who had a key to the house before you bought it. Have a few keys made and put a lock box on the front door so that your team can get in and out of the house.
- Switching Utilities – Put the utilities into your name (or company name) and have the date they are turned on coincide with the closing.
- Plans & Permits – Do things the right way and get your permits (construction, plumbing, electrical) before you begin work. This is also where you really nail down your “action plan” and begin lining up materials and scheduling skilled trades to do work.
- Foundation Repair – Account for the additional work and risk by buying the property cheap –– as low as 50-60% of market value minus repairs.
- Pest Control – This is a good thing to have on your list, but not always necessary. If you find a house full of fleas, termites or other critters…then make that call.
- Plumbing Pre-Demo – Have your plumber assess the property. Valves should be shut off, and any old appliances should be disconnected and removed.
- Electrical Pre-Demo – Unhook any appliances and fixtures that will be replaced. Any wiring that is in the path of something that will be demoed needs to be removed.
- Demolition – You need to have a good cleanup crew that is willing to go in and take on a dirty project. Once the house is cleaned out and the electrician and plumber have done their thing, begin tearing out the cabinets, walls, counters, etc., that you want to replace. Afterwards bring in a cleaning crew to sanitize, rid the house of pet odors and clean up the yard.
Stage 2: Rough Structure – Most of this work will be done above ceilings, below floors or in walls. Be on-site for as much of the work as possible, and keep a close eye on the cost of materials and labor.
- Rough Plumbing Under the House or Foundation – Rough plumbing takes place when you buy a house that either has a change of layout as part of the rehab, or you’re replacing pipes. If you buy low and have confidence in your plumber, then you should feel confident about making the repairs and turning the house for a good profit.
- Framing and Sub-floor – Remove any rotted wood. This may or may not involve structural work. If it does, then you’ll need to have an engineer on board as a part of the process, and you’ll need permits. Typical situations involve removing sub-flooring in bathrooms and kitchens, though porches, stoops and steps are also on the list.
- Exterior Doors – Replace any doors that are damaged. Know what the codes are for exterior doors in the area of the subject property, and buy accordingly.
- Windows – Replace those windows that need replacing. This can be a money item because it’s not just the windows, but the cost of installation and the potential repairs to the walls, casing and trim. But by strategically placing new windows, you can amp up a standard rehab project.
- Siding - Consider adding siding if you’re in an area where you’ll get a good return on your money. Otherwise, paint the exterior…but do one or the other.
- Exterior Trim – Window sills, window trim, eaves, door trim, corner trim and the fascia and soffit.
- The Roof – When inspecting a roof, look for curled, faded or missing shingles. Note how many layers of roofing material are on the roof. Ideally, two layers, maximum is acceptable. Pay attention to any weird angles that may indicate that the roof decking is rotted or slowly weakening. Work with a good roofer to get an estimate of costs to repair. Typical repairs include replacing shingles, flashing and vents.
Stage 3: Mechanical Systems – Stage 3 tasks can and will overlap with Stage 2, which leaves plenty of opportunity to lose track of what’s being done, by whom and for how much. You really need to stay on top of things, or costs can get out of hand.
- Fireplace – Get a chimney sweep in for a cleaning and an inspection.
- Rough Heating, Ventilation, and Air-Conditioning (HVAC) - Have a good HVAC specialist to check out the system – the furnace and air-conditioning unit, exhaust fans found in bathrooms, attics, kitchen, etc.
- Plumbing in Walls, Ceiling and Attic – Begin running new pipe in the walls, ceilings, etc. You’ll need to have all appropriate permits for this task. Complete any prep work for new appliances.
- Rough Electrical – Bring in your electrician to run wire and install junction boxes. Make sure you’re using a licensed electrician and that everything is up to code.
- Insulation – Once plumbing and electrical are installed and inspections have passed, begin insulating the exterior walls.
- Concrete Work – For a driveway (or apron), walkways and patios.
- Septic – These can be an expensive nightmare…and before you even buy the house you need to have a report examining the septic system –– paid for by the seller, if possible.
Stage 4: Unfinished Surfaces – This begins the work that people can see. Just like in the other stages, you need to stay on top of scheduling and costs.
- Drywall – Hang, tape and fix any issues with the walls and ceilings.
- Garage Doors – Adding a new garage door is a great way to add curb appeal, but is not a necessity.
- Gutters – Examine whether downspouts and gutters need to be replaced.
- Wood Floor Installation – In certain situations we will refinish wood floors, especially if the house is located in a great neighborhood. Rarely will I install new wood floors, unless I am excited and sure by the potential of a project.
- Cabinetry – Line up a few choices you prefer for your kitchens and bathrooms. Go with a cabinetry company that knows what you want, and can begin managing the process early when you’re just starting the rehab.
- Interior Doors – You can either buy a pre-hung door that is attached to the jambs and has the door handle hole already drilled (along with the hinges), or buy a “blank” door and hire a carpenter to drill all the holes, etc. When installing doors, there’s a lot of trim work to be done.
- Housekeeping – If you’ve done any of the above, then you’ve created a mess of pieces, parts and dust. Clean it all up. Get rid of the dust and debris, and begin prepping for the paint.
Stage 5: Finished Surfaces – This is where your vision comes together to create a product that is functional and pleasing to the eye. If you’ve managed to keep track of workers, materials and expenses, then you should be on budget to begin the cosmetic changes.
- Interior and Exterior Paint – The standard paint for interior spaces is latex, which is easily washed up with water. The shinier the paint, the easier it is to clean.
- Countertops – Granite, poured concrete, engineered stone, wood, ceramic tile, solid surface, or plastic laminate. Like every other decision you’ve made, you want the cost to be congruent with the type of rehab you are doing.
- Tile – Install tile anywhere in the house where you want it. For basic rehabs, you’ll use vinyl instead. For your standard rehabs you’ll end up using an inexpensive tile to enhance the aesthetic of the house. For a high-end house, spend the money and use high quality materials.
- Vinyl Flooring – The most common flooring used for both standard and basic rehabs…it’s cheap and easy to install.
- Final Plumbing – Make sure that everything…all the lines, pipes, valves, toilets, faucets, etc., is installed correctly.
- Final Electrical – Install the finishing touches (switches, plates, jacks, lights, smoke detectors, etc.).
- Final HVAC – Install new vents and a thermostat, or a new air-conditioning unit outside of the house.
- Finish Wood Floors – Either finishing or refinishing wood floors is the final task for this stage. Once done, you’ll want to keep traffic to a minimum as a way to avoid any unnecessary damage.
Stage 6: Final Details – In this stage, address all those details that, at times, will seem endless. Here are the small things that can add up to a fast sale at full price:
- Small Additions – There’s much you can do on a standard rehab to make it seem more appealing:
- Brass kick plate for the front door
- Two-piece front doorknob
- New knobs for the kitchen cabinets
- New interior doorknobs or handles
- Brass house numbers
- New doorstops
- New switch plates
- New towel bars
- New bathroom mirrors and doors (if an upgrade is necessary)
Appliances – We’ve enjoyed consistent success using a local turn-key appliance company, or you can use Home Depot or Lowes.
Carpet – We alternate between plush and Berber, depending on the neighborhood.The color is always neutral, and the carpet is always installed near the very end of the project so it doesn’t get soiled or damaged.
Landscaping – For a standard rehab, clean the yard, edge the walkways, edge the flower beds, and do some basic trimming. Remove any debris.
Final Cleaning
Staging the House – Consider bringing a local designer (who is inexpensive) onto your team who can help accessorize the property. You don’t have to spend a lot of money to make a house attractive and inviting.
Final List of To-Dos – The list you make after walking through the house and taking note of the few remaining items that either need to be completed or are unsatisfactory.
To learn more about how you can become a successful real estate investor and put money in your pockets now, click here – you’ll get access to tons of free training materials, videos, audios and paperwork – and kick-start your investing business.
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Foreclosure Activity Hits 3-Year Low
Tuesday, March 15th, 2011 | Bank owned, Foreclosures, Real Estate Investing, Short Sales | No Comments
Does this update signal a shift?
New data from RealtyTrac shows that foreclosure filings nationwide dropped 14 percent between January and February, as overall activity last month sunk to its lowest level since February of 2008. RealtyTrac says total foreclosure filings – including default notices, scheduled auctions, and bank repossessions – were reported on 225,101 properties in February, a 27 percent decrease from a year earlier and the biggest year-over-year decline since the company began issuing its report in 2005.
On the surface, all good news for an industry trying to get a handle on delinquencies and property repossessions, but RealtyTrac says the sharp decline is likely the result of processing delays following last fall’s robo-signing problems.
A total of 63,165 U.S. properties received default notices (NOD, LIS) for the first time in February. Foreclosure auctions (NTS, NFS) were scheduled for the first time on 97,293 homes last month, while lenders completed foreclosure on 64,643 properties.
Click here to read more.
Rising Oil Prices Impacting Housing Recovery?
Wednesday, March 9th, 2011 | Foreclosures, Pre-foreclosure, Real Estate Investing | No Comments
We’re all feeling the pinch of rising oil prices at the gas pump. We also know it’s impacting business across the country in a variety of ways. But will the soaring costs impact the fragile recovery of the housing market too? Many predict the answer is yes.
“The prospect of a much more expensive commute is beginning to make suburbia look less appealing. As demand for such homes weakens, economists worry that growth in the real estate market — and the broader economic recovery — could be stopped in its tracks.
The oil price spike could hardly come at a worse time for the ailing housing market, which, along with high unemployment, continues to weigh heavily on the U.S. economy. While financial and manufacturing sectors have recently shown strong signs of recovery, housing seems to get worse.
This situation isn’t helped by a lack of demand. For homeowners, the price fall can be a vicious cycle: Falling home values erode homeowners’ wealth, making them more vulnerable to default and foreclosure, which in turn tends to drive nearby home values even lower. As potential buyers see prices fall, they become less interested in making a long-term investment in a home. Until prices hit bottom and a home turns from a sinkhole into a bargain, buyers are expected to show the kind of tentativeness that aggravates a slump.
Oil could make things even worse…”
Click here to read the whole story.
Chicago Sheriff Says No To Enforcing Foreclosures
Wednesday, October 20th, 2010 | Bank owned, Foreclosures, Real Estate Investing | No Comments
Bank Of America and GMAC have both stated that they are resuming foreclosures. Not if the Chicago sheriff can help it. Until the banks prove to him that the foreclosures were handled “properly and legally”, he says he can’t evict people from their homes. What do you think? Read the full article over at CNBC -Josh
REVEALED : Brand New Real Estate Strategy
Monday, October 4th, 2010 | Foreclosures, Pre-foreclosure, Real Estate Investing, Real estate short sales, Short Sales | No Comments
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Best,
Josh Cantwell
Freddie CEO: Mortgage forbearance is preferable to foreclosure
Tuesday, September 28th, 2010 | Foreclosures, Pre-foreclosure, Real estate short sales, Short Sales | No Comments
CEO Charles E. Haldeman Jr. said that foreclosure is the least attractive option from a secondary markets perspective and considers forbearance a viable option to keeping seriously delinquent borrowers in their homes.
A full transcript of that conversation is in the October issue of HousingWire magazine.
Haldeman said that forbearance, as an option in loss mitigation, is not currently as popular as mortgage modifications or even short sales, but still one that Freddie considers highly useful.
Partner With Me And Let My Team Do All The Work!
Saturday, September 25th, 2010 | Foreclosures, Pre-foreclosure, Real Estate Investing, Real estate short sales, Short Sales | No Comments
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