Aug
21
A Day in the Life of a Bulk REO Investor
Posted By: Ramon Rivas on August 21, 2010 at 7:35 pmHey, I am not sure how this happened, but I was able to convince Kenny Rushing to let us inside his office and show us his business from the inside. In this video you’ll get to see the insight of the Multi-Million Dollar operation Kenny has created investing in Bulk REO Packages. You’ll get to see his offices in Tampa, FL and meet some of the key players in his team.
Pay particular attention to the video after minute 6:00 as Kenny will share some key tips he uses in his business to successfully bring profits in the hundreds of thousands of dollar in individual deals. Kenny is for real and he is the best at he does, so enjoy this free video.
If you haven’t done so already, Download Kennys Conspiracy Report here. This great information will be gone soon, so don’t wait.
Oh, one last thing, I almost forgot. Did you register already for the chance to Win One of the THREE (3) FREE Houses Kenny is Giving Away?
– >> Enter to win One of the THREE FREE Houses << –
Honesty in Flipping – What to Disclose
By: David Reinholtz
This article is about flipping short sale properties, and the parameters associated with this are much different than other types of property sales and investment and should not be assumed to apply to other, more traditional forms of sales. Short sales, as most people are now aware, occur when a property owner is behind on his or her payments and makes an arrangement with their mortgage lender to sell the property for less than its assessed, or true, value in order to avoid foreclosure, the stigma that goes along with it, and the credit damage that can come from it.
If your client, or someone you know, is in the business of short sale investing, meaning they intend to purchase short sale homes and immediately turn around and resell them for a profit, there are legal questions that go along with the process, many of which have never been addressed, but will undoubtedly come to light in a court of law at some point in the foreseeable future.
While buying a short sale home at a bargain and turning around and selling it at its regular price, or slightly less than its assessed value is completely legal, the term ‘fraud’ is being tossed around lately and it may behoove the serious investor to make every effort to offer full disclosure, or at least a modest modicum of disclosure to all parties involved.
The scenario
Imagine this scenario: You’re a homeowner who has fallen on hard times. You or your spouse may have lost his or her job and despite your best efforts, you can’t keep up with the mortgage payments. You are facing the barrel of foreclosure and work out an agreement with your lender to go ahead with a short sale. You know your home is in great shape, the lawn is meticulously maintained and you added a new kitchen and bathroom.
You have no choice but to let go of this home because you want to buy another one as soon as you recover from your financial setback, so the short sale seems fair. Several interested buyers flock to your house immediately and within a few days, maybe even that same day, you have an offer on it. The bank agrees and you sell the home, getting out from under your financial burden.
Two weeks later, you learn that your home suddenly sold for near full value. Perhaps forty thousand dollars more than you sold it. This is enough to feel as though you were taken advantage of. Maybe it’s enough to consult a lawyer. After all, if your home sold for its assessed value two weeks after the short sale, you could have made that sale directly.
Putting yourself in someone else’s shoes is the best way to determine what level of honesty should be used during the process.
Letting the homeowner know the truth
In most cases, homeowners who partake in short sales don’t have a choice, so whether you are going to turn around and sell their home at a profit or not, they don’t have the luxury of hanging onto any longer. Being upfront may sting for the homeowner, but you are protecting yourself legally.
The same holds true for the lender. Mortgage lenders make loans based on long-term earnings through interest rates. If they are aware of the intention to flip the house, there are some lenders that would not be willing to make the loan. Posting a statement of your intentions within the contract (which, as we all know, can be upwards of 100 pages or more), will cover you legally. Remember, loan officers don’t tend to read the contract thoroughly. You’re covered nonetheless from any legal action that uses the phrase ‘fraud’ in the future.
No legal obligation
While investors intending to flip short sale homes are under no legal obligation to disclose their intentions, most, if asked, wouldn’t want to become the guinea pigs in a legal dispute over a fraud allegation. Full disclosure is always a safe bet.
David
About the Author
David is the Founder and CEO of LoanOfficerSchool.com, an approved education provider for The Conference of State Bank Supervisors and The National Mortgage Licensing Systems’ (NMLS) required pre-licensing education and continuing education.
(ArticlesBase SC #3040471)
Article Source: http://www.articlesbase.com/ – Honesty in Flipping – What to Disclose
| Filed Under: Articles , Foreclosures Tagged with Adsense, Avoid Foreclosure, Bargain, Best Efforts, Foreseeable Future, Fraud, Full Disclosure, Google, Great Shape, Honesty, Investor, Legal Questions, Modicum, Mortgage Lender, Mortgage Payments, Parameters, Property Owner, Setback, Stigma, True Value |
I spent a few hours removing brush, outlined a driveway with logs, and hand painted a sign. Two weeks after I bought it I sold the land for $4,750, with $250 down, $100 per month, at 11% interest. With the capital gain, my annual return on investment was over 20%. This was my first real estate investment.
Creative Real Estate Investment – The Key
I bought the land cheap, because the seller needed fast cash. I solved his problem. I sold the land higher than the market value because the buyer needed easy terms. Second problem solved. Solving problems is the key to creative real estate investment.
Cell phone companies, radio stations, police departments and others need hill tops for their towers. The problem is that they can’t tie up their capital buying them. One creative investor found a way to solve their problem.
He got six month options on hill top properties for a few hundred dollars. Then, when he found those who needed them, he would get a long term lease signed. They built the tower themselves, of course. With a lease in hand, it was easy to get financing to exercise the option and buy the properties. He invested a few hundred dollars to create years of income.
Trees are needed by lumber mills. A friend of mine solved this problem by letting a company cut half the trees on his small property. They paid $4,500, and I couldn’t see the difference when they were done. The property was worth as much the day after the cut as the day before. My friend lived there, but a creative investor could buy property like his, sell half the trees, maybe clay or gravel too, and then re-sell the land.
To solve problems, you have to figure out what they are. Do people need easy terms? Cleared lots? Lumber? Better access to a piece of property? Smaller pieces of land? Condos instead of apartments? The list could go on. Just remember that solving problems is the key to creative real estate investment.
Without a doubt getting into real estate investing is sure to prove to be a very profitable exercise because people that have entered into this line of business have made tons of money. However, there is more to real estate investing than simply making money because you should also derive pleasure from your pursuit of investing in real estate. The truth of the fact is that wholesaling homes is a way of investing that lays the foundation for all other types of real estate investments and it is also a means whereby you can earn some quick cash.
Little Capital Required
In fact, it is quite common to earn as much as ten to fifteen thousand dollars per month from wholesaling homes and all it takes is to work as little as twenty hours in the week and without having to work over the weekends. If you are thinking about real estate investing you should also consider wholesaling homes because it is a great business that does not require much capital and there is also little need to get credit and, best of all, it is quite simple to learn the ropes. All you would need is having an investor list or two and within a short span of time you could be making good money.
As far as wholesaling homes and real estate investing go, it requires nothing more than to get control of properties, which are then marketed and sold to the investors that have enough cash. It is also a lot better way of making money than say, rehabbing properties in which you would need to wait six to eight months before you realize any serious money.
Essentially, wholesaling homes require that you locate lucrative looking deals and it also means having to market these homes mainly to those who are involved in rehabbing as well as retailing properties. The fact of the matter is that first buyers are always on the lookout to make a small though quick profit and will generally pass over the bigger profits to those who are indulging in real estate investing because they do not have the time, money and patience to repair properties that they have bought. And they also don’t wish or cannot afford to wait for months until the property can be sold after it has been properly rehabbed.
Thus, if you were considering real estate investing and more particularly wholesaling homes, you would want to buy the property and resell it as soon as possible and maybe make one or two quick deals each month. Such types of deals do not require that you have much money or credit and there are also no bosses to answer to. What it really involves is being able to locate a good deal and having someone to buy a property from you.
Actually, finding bargain buyers is not very difficult and the entire wholesaling of homes can be completed in just three weeks from start to completion of the deal. However, remember that in this form of real estate investing you need to ensure that you do not pay more than is necessary for a property and also ensure that you allow for enough scope for making a profit when selling to bargain hunters. Also, try to close the deal as soon as you can and for cash only and try to avoid buyers who want to buy through bank guarantees because that would mean delays in getting loans sanctioned and that is not good when wholesaling homes.
The bottom line is that wholesaling homes is a simple form of real estate investing and it does not require any great learning to get into this form of business. With a little luck and plenty of perseverance and hard work you can easily turn ten deals each month and thus make a tidy profit as well.
Real estate investing is a business that requires a significant amount of work and commitment to succeed in it. The earning potential in this business is truly big. However, it all depends upon how you manage it and make it work.
For an investor, finding the most phenomenal real estate deal is the key to make a great deal of money in the real estate investing business. That is why as a real estate agent, you should be able to come up with the best marketing strategies so that you will get to attract a lot of investors to make use of your services.
Common Mistakes Of Real Estate Agents
The common mistake of many agents in real estate investing is that they simply do what every other agent does. As an agent, you should be able to set yourself apart from the rest. The business of real estate investing belongs to a very competitive marketplace so if you are more innovative in your marketing strategies and other services, chances are you will be the choice to do business with.
Another mistake that most real estate agents make is that they do not clearly express the benefits that the buyers will get out of transacting business with them. Potential clients want to immediately know the benefits that they will be getting out of this venture. A great deal of real estate marketing nowadays revolves around the promotion of the agent instead of the properties and the benefits that one will get out of using the services of the agent. By making a simple distinction, you will see a great difference in the results that you will get.
Marketing Techniques
Many agents do not consider these options because of the amount that they will be spending for using these marketing techniques, but what they do not really know is that these are effective marketing strategies for most businesses and the real estate investing business is no different.
If you think newspaper ads and the like are not that effective, you might want to consider promoting your properties and deals online. Majority of buyers look out for properties and great deals over the Internet so where else would be the best way to advertise but online. However, when posting properties online keep the photos of your listings and other contents of the post as good as possible. Who would want to buy homes that are cluttered in the first place?
Of course, you have to evaluate the results that you are getting out of these marketing techniques. If you think that you are not getting actual business out of a particular advertising strategy then its time to move on to a more effective one. Above all, see to it that when you employ these marketing techniques, they must focus on the services that you offer and the needs of your prospective clients.
Real Estate Investing Courses
It pays to get educated. A lot of agents who are attending educational courses in real estate investing tend to earn higher amounts of income. By attending these courses, you get to learn more about the business of real estate investing as well as all of the fundamentals in terms of promoting properties and deals to your potential customers. You will be able to improve your skills as an agent and eventually turn out to be a high earner in the field of real estate investing.
Real estate investing as a business is a risk. However, if you dedicate a really good amount of commitment in it coupled with hard work, it would not be a difficult task to close deals and earn high profits in this type of business. The bottom line is that it still depends on how you work things out that makes this venture successful.
