Owner: Wet Feet - Atlanta Real Estate Investing URL:http://www.wetfeetblog.com Join Date: Tue, 16 Oct 2007 20:45:38 -0500 Rating:0 Site Description: No Bull Real Estate INvesting Info From Real Real Estate Investor. Site statistics:Click here
Chain of Title, Title Seasoning and Land Trusts 2007-10-15 19:53:51 These three strange concepts are tightly related and may make or break your deal.
Chain
of Title
is the real estate property ownership history. You may think that only current state of title is important, but in reality last couple years of ownership are important because of two words: mortgage fraud.
Here is the most common scenario of mortgage fraud. A scammer, mortgage broker and crooked appraiser work together to pull this off. Let’s say a scammer buys a house worth 100k, appraisal is done to show that house is worth 150k, mortgage broker falsifies documents and buyer from behind the interstate overpass is brought to the closing to sign the papers. The homeless buyer gets his $100 for troubles and $50k get split up by the 3 scammers. New mortgage never gets a single payment made and the house goes into foreclosure.
Banks are not dumb, after couple hundred cases like this they instituted a new requirement – Title Seasoning. What they saw is when house gets sold 2-3 times in a sh
3 Most common mistakes in finding motivated sellers 2007-10-12 16:04:55 I wan to start with a little rant. How much do you think it costs to run a classified ad in a major newspaper like AJC? The ones we run set us back about $200 for two weekends. From such ads we get quite a number of “investors” calling us, wanting a free house…. Go and read my old post I want houses with 0 down and take over payments. Someone would think that a desperate homeowner would spend $200 to say to all metro Atlanta: “TAKE MY HOME”. Get real!
Ok. I am done ranting. Now really think, would a desperate person spend $200 to place a classified ad in the newspaper to give away their house? I do not think so. Here we have the very first mistake that most of real estate investors make - calling on classified ads in a newspaper where you need to pay for classified ads.
Second most common mistake I think is placing an ad “We buy houses” in the local newspaper. Have you looked how many these type of ads you see there. Last time I checked, I counted 13 “We buy houses” a
Wholesaling 2007-10-10 13:18:02 What is wholesaling? In short wholesaling is selling to a reseller, not an end user. So wholesaling real estate means that you are selling the property to someone else who will be selling it to the end user. Wholesaling can be done with deals for all cash, subject-to (sub2) or with financing.
Let’s look at some examples.
We went out and put a nice 4 bedroom home under contract to buy it subject to the existing loans with no money coming to the seller at closing. House is worth $230k on a bad day, existing loan balance is $202k. We marketed it as take over payments deal for only $6k plus closing costs, which makes purchase price $208k and leaves $22k in equity for whoever buys it. So you need $6,000 to get it and you make $22,000 profit at the closing table. That makes 366% return on investment (ROI) on this deal.
All three parties benefit in this situation. Obviously we benefited by 6k, the seller benefited, since they got rid of the house they did not want or can afford to keep and
Don’t let the banks spoil the party. 2007-10-04 21:03:57 Let’s be hones, the current lending situation sucks. Sub prime lending industry disappeared literally overnight, banks
stopped giving out loans to everyone and their sister. The situation is such that if your credit is less then perfect, no bank will lend you money to buy your own home. So the only option is to rent? Not exactly. There are still couple ways to make your dreams come true. Those creative solutions are: lease option, take over payments and owner financing.
Today we will take a closer look at the Lease Option, also called Lease Purchase or Rent to Own. Like name implies there are two ingredients in this cocktail.
First ingredient is the lease. You are renting your dream home and get to enjoy almost all of the benefits that home ownership offers. You can try out the schools, shopping and dining in the neighborhood and the home itself. This lease period gives you time to improve you credit situation to be able to qualify for an excellent loan.
Second ingredient is the Opti
I want houses with 0 down and take over payments 2007-09-20 10:48:57 From time to time i bump into investors who want deals on a silver platter, zero down and no need to borrow money.
I would like a dozen of those too, but I have to disappoint you - buying a home with no money down and without getting the loan is impossible.
You either:
A. Buy with no money down by getting a loan and including closing and acquisition cost into the loan or
B. Buy by taking over payments and do not get the loan, but pay the closing and acquisition costs.
To buy a home you will have to close and that means attorney fees, recording fees, transfer tax, title search, title insurance and other misc. fees have to be paid by someone. You would like the seller to shell out couple grand to give you their house, would you? I would, btu have not met such owner yet.
And to acquire the property you have to market to attract sellers, go out research the property, make offers, negotiate with sellers, sign the contract, do due diligence on the property and the loan. All this takes time a Read more:houses
Subject To aka SUB2 2007-03-12 15:49:56 A lot of times I hear a lot of confused new investors talking about Subject to. So what does it really mean? I explain it to the sellers this way:
“I will take over your mortgage payments until I sell the house.”
sub2 means that you are taking(buying) the property subject to existing mortgage in this case. If seller has two mortgages you can take the property subject to both mortgages. If there are any other leans on the property you can take the property subject to those leans too. In essence you are acknowledging that there are liens/deeds to secure debt on the property when the title gets transferred to you.
How to execute a subject to deal:
Step 1. Agree on terms with the seller and sign the contract. (best to get one prepared by the closing attorney you will use to close the deal. And you will always do the closing with the attorney.)
Step 2. Get the seller to sign “authorization to release information” for each loan so you yourself can call the mortgage h
A little history or how it all began 2007-03-07 16:04:17 The most important thing is to take action. Stop wining and looking for excuses, get off your but and do it. If you put your mind to it you can achieve anything you dream up.
I came to USA in November 1998. I had one suitcase full of my earthly possessions and $200 in my pocket. I came from a small country on the Baltic Sea called Lithuania (Lietuva). Long story short I was not born with a silver spoon in my mouth. Everything I have I had to work for. Life was hard in the beginning, no job, no car (and you need to have a car in Atlanta to drive to work) no credit history, new country and new language.
About one year later my wife joined me here. In 2002 we bought our first home in which we still live. Sometime in 2004 I picked up a book by Rober Kiyosaki called “Rich Dad, Poor Dad” and our journey into real estate investing began.
Being a curious person I started reading everything I can find about real estate investing. I found tons and tons of information. I found out that there Read more:little
Choosing where to start investing 2007-03-07 09:42:01 So you decided to become an investor. Or to be more precise you want your money to work for you instead of the other way around. Great! So you think that real estate is the way to go, and I would agree with you. You see, population grows, but the continents don’t. So we have a situation where supply is limited and demand is growing constantly, which means that over time all real estate will appreciate which means that no matter what you do, you will come on top, if you wait long enough.
Now that we agree that the real estate is definitely worth investing into, let’s pick which path in real estate investing YOU want to choose. There is uncountable number of wait to invest, each with different rewards, involvement levels and activities required. You have to ask yourself what are your investing goals and how much time you can dedicate for your investment carrier.
If your goal is to quit your day job and to support you and your family form real estate investing you must choose differen
Leverage, Leverage, Leverage 2007-10-29 21:46:43 Recently I had a discussion with a friend about differences of investing in stock market versus real estate. Buck for buck historically stock market wins, but there is a really big but. That big rear end is called leverage. Leverage
d real estate outperforms any other kind of investment hands down.
Leverage is ability to use OPM - other people’s money. You can put 10% down on a house and borrow 90% of the purchase price to buy a house. Try going to the bank and borrowing some money to invest into stocks. I have not met anyone who has succeeded.
So lets look at a simple example. I have $100k in and John has $100k. I go out and buy 10 houses worth 100k putting 10% down on each. Now I have 10 houses worth 1 million. John goes out and buys $100k worth of stocks.
Lets say that John’s stock portfolio earns him a whopping 20% return on investment and after a year he has $120k. My real estate portfolio on other hand is not doing so well, it is growing at a pathetic 5% rate, but beca
Why would I buy Sub2 from you? 2007-10-30 20:33:58 I got into a conversation with one of my friends why would someone buy a house from me Sub2. Let’s look at the deal like this: $5,327 down and take over payments of$1,307 per month, you will buy $14k worth of equity. Which in essence means, that you are taking over payments on a mortgage which stays in seller’s name, you paying $5k out of pocket for a house worth $163k with the loan balance of $144k.
So what other ways can you purchase this house? The conventional way would be to go to the bank and get a loan. But wait, there is more. With current situation in lending industry the best deal you will get will require you to put at least 10% down and your interest will be somewhere in 9-10% range. So you will need about $15k to put down and you monthly payment will be $1,140 just for principal and interest. Add taxes and insurance and you are looking at $1,400+ per month. So the conventional way you need more money to put down and your payment is higher.
Also you can go and borrow ha
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