May 29, 2008
Clark Howard - Is OK to Invest in Foreclosures Yet?
I found an article written by master of frugality and talk radio star Clark Howard. Clark is a big fan of investing in foreclosure listings, he’s be doing it since 1978. His article talks about the fear running through the housing market right now and that people are even afraid to touch foreclosures. Clark really makes some brilliant points. First that people should not be afraid to buy a foreclosure as long as the price is right. Second Clark also points out that all real estate is local but several unnatural market events came together to make the crisis we are seeing right now. The article is geared more toward owner/buyers and the average consumer but it’s a great insightful article so i thought it should be mentioned here. Check it out below.
Waiting out the storm of foreclosures
from the Clark Howard Show blog
A lot of Americans are afraid to buy homes right now. It’s no wonder that people are skittish about jumping from renter to owner when you think about the constant barrage of “housing crisis” headlines. Clark wants to offer some.., Click here for the rest
Filed under Main Content by ForeclosureListingsWeb.com
You don’t have to find all the foreclosure listings and properties yourself. There is an industry of people lined up and waiting to help you. There are countless others that will help you if you only ask and/or give them a reason.
- Use bird dogs. No, not really a dog but a person who looks out for distressed property. He or she finds potential deals and sells the “lead” to investors. Many people are willing to bird dog because it does not take any money or special skill to find distressed properties. What you pay this person varies because bird dogs can give you raw leads or they can gather more detailed information for you. Find these people at your local real estate investment club. Just one note of caution, some states, consider bird dogging real estate practice requiring a real estate license. Check with your state’s real estate commission for guidance.
- Ask your mailman. Who knows the neighborhood better than your mailman?
- Pass out business cards everywhere you go with a message on the back that says you buy houses and will pay for leads.
- Find a real estate agent who will represent you as a buyers agent. Agents work on commission and will support and help you to the end of the earth if they believe you are on the level. The problem is they get calls all day long from fake or wannabe investors. My advice; don’t ask too much up front. Try to get a list of properties and drive by them. Call your agent to show you the ones you are serious about and allow them to handle the sale. After a sale or two you will have a friend in the business.
- Stay in touch with your sphere of influence. The most successful real estate agents in the business get new business this way. Chances are you probably know 50 people, friend and family types you call by first name. Make it a point to speak with these people on a regular basis (every 1-2 weeks) and ask if they know of someone in need of selling a home. Tip: when you contact them make it a reason other than real estate.
- National Foreclosure Listing services. It’s probably like beating a dead horse at this point but the national foreclosure listing services like Foreclosure.com and Realtytrac can email you listings as they are posted on the market in real time.
Filed under Main Content by ForeclosureListingsWeb.com
Today I found an article by William Bronchick. He is a Nationally-known real estate attorney and investor and has been practicing law and real estate since 1990. He wrote the best selling book, Flipping Properties and he has trained countless people all over the Country to become financially successful investing in real estate. I hope you find William’s article helpful.
Seven Ways to Flip a Property
by Attorney William Bronchick
“Flipping” is the buzzword of the year in real estate - flipping books, flipping articles in the newspaper, and even flipping shows on TV! What is flipping, how does it work and how you can profit?
Flipping simply means buying a property and reselling it quickly, as opposed to holding on to a property long term as a rental. Flipping comes in several varieties, most of which are legal and profitable, some of which are not.
Flip Strategy #1: Buy, Fix and Flip
Let’s start with the most common form - the good, old “fix ‘n flip”. This process involves buying a property that needs work, fixing it up, then selling on the “retail” market, that is, to a person who will live in the property. This method is tried and true, and works very well. You can easily make $15 - $50k on one deal, depending on your market and how good you are at finding bargains.
The danger in fix and flips is either paying too much or underestimating repairs. Be very conservative in your fix-up costs and length of time it may take to resell. Also, make sure you include in your analysis the cost of paying a real estate agent to sell the property.
Flip Strategy #2: Buy, Refi & Lease/Option
Rather than sell the fixed up property for all cash, sell for terms. Once you have completed the rehab, refinance the property at its new appraised value. If you did the math correctly, you should have little or no money in the deal. Sell the property on a lease with option to buy. The rent payment from your tenant/buyer should cover your mortgage payment (if not, consider an interest-only or adjustable rate loan that is fixed for 3 years). When your tenant exercises his option to purchase, you reap a larger profit, since you don’t have to pay a broker’s fee. If the tenant exercises his option after 12 months, you benefit from a lower capital gains tax rate.
Flip Strategy #3: Buy & Flip “As Is”
Don’t like to do fix-up work? Consider selling the property “as is” as a light fixer upper. If the local real estate market is hot, you should be able to sell the property in poor condition just a little below market. This is especially the case with houses in “transitioning” neighborhoods. Make sure, of course, that you acquire the property sufficiently cheap enough that you can sell it below market quickly and still profit.
Flip Strategy #4: Wholesale
Strategy #1, the fix and flip, is very popular, which means there are a lot of investors looking for rehabs. You can buy the property cheap and sell it for just a few thousand dollars more to another investor without doing any work. You won’t make nearly as much as the rehabber, but you will realize your profit quickly.
“Flipping Properties” |
Make Fast Cash in Your Pocket and Get Jump Started Into Real Estate Investing!“Flipping” properties is your fast track to fast cash in real estate. This course will show you the legal, ethical and profitable ways to generate cash NOW, not years later in real estate. Covers every aspect of quick-turning properties, from marketing to contracts to collecting your paycheck. |
Flip Strategy #5: Pre-Construction
In very hot real estate markets, prices are appreciating as much as 2% per month. If you time things right, you can put a contract on a pre-construction house or condominium, then flip it to someone else when the development is complete. If it takes 12 months for the development to be complete, and the condo price is $500,000, you could make $100,000 or more in one year! Of course, the opposite is also true - you could end up losing money if the local economy tanks and you end up with a worthless condo that you can’t sell for more than you paid. Use this approach very carefully…
Flip Strategy #6: Scouting
The Scout is an information gatherer, so not technically a property flipper. He is the “bird dog” who finds potential deals and sells the information to other investors. Many people get started as a Scout for other investors because it does not take any cash or prior knowledge to look for distressed properties. The Scout finds a property for sale, gathers the necessary information, and then provides this information to investors for a fee. The fee will vary depending on the price of the property and the profit potential. The Scout can expect to make five hundred to one thousand dollars each time he provides information that leads to a purchase by another investor.
Flip Strategy #7: Illegal Flipping
OK, I am not advocating this approach, because it is illegal. Illegal property-flipping schemes work as follows: unscrupulous investors buy cheap, run-down properties in mostly low-income neighborhoods. They do shoddy renovations to the properties and sell them to unsophisticated buyers at inflated prices. In most cases, the investor, appraiser and mortgage broker conspire by submitting fraudulent loan documents and a bogus appraisal. The end result is a buyer that paid too much for a house and cannot afford the loan. Since many of these loans are federally insured, the government authorities have investigated this practice and arrested many of the parties involved. As a result, the public perceives is flipping to be illegal.
The fact is, “flipping” - as I described in the beginning of this article - is NOT illegal. Loan fraud in the process of flipping is what is illegal, so don’t confuse the two. The other six ways to flip are very legal, very ethical and very profitable!
For more of William’s brilliant articles click here to visit LegalWiz.com
Filed under Main Content by ForeclosureListingsWeb.com