Getting Rich in Today’s Market

With Bank-Owned Foreclosures and “Rent-Smart” Lease Options

by Andy Heller

There are literally hundreds of wealthbuilding strategies available for real estate investors. Some are more lucrative than others, and many are simply way too much work for the money that an investor hopes to make. Fortune Magazine recommended Andy Heller’s “Buy Low, Rent Smart, Sell High” strategy among the top five recommended strategies for real estate investors. Like so many of us, Andy started investing part time, pulling aside a few hours each week for his hobby. Scott Frank and Andy Heller have approximately 40 years of combined real estate investing experience. During this time, they have bought, rented and sold approximately 100 properties. They have done this

while holding full-time jobs and putting their families first.

Getting Started

The lack of success of Andy and his partner Scott’s “buy and flip” plans led them literally by accident to a goldmine called buy low, rent smart, sell high. When Andy and Scott found buying properties from distressed sellers to be

tedious, hard work, and depressing, they discovered by accident a hidden gem in the foreclosure process…BANK OWNED REAL ESTATE. With bank-owned real estate an investor is able to purchase MULTIPLE PROPERTIES from single sources, without emotions, and with clean and clear title. Once purchased, when Andy and Scott were

unable to flip their first home after 9 months on the market, they modified the typical lease/purchase deal to come up with their unique rent smart and sell high formula. Their SHORTEST lease is 3 years, and each of their tenants accepts responsibility for repairs and maintenance. High turnover, nightmare tenants, and lengthy vacancies are non-issues when you “rent smart.” The Buy Low, Rent Smart, Sell High program offers at its core a win/win formula for

everyone the investor comes in contact with: sellers, tenants, and others. The three pillars of real estate investing:

Buy Low

1.Learn how to consistently purchase real estate below market.

2.Learn how to identify the right type of property for your preferred investment model.

3.Learn about the best ways to buy discount properties today. Take a deep dive into the Buy Low, Rent Smart, Sell High preferred method of buying low: bank-owned foreclosures (aka post-foreclosures and REO Properties).

4.Learn what most investors do when calling banks without success…and learn the Regular Riches way to successfully approach banks.

5.Learn about financing your purchases.

6.Learn our formula for establishing the Maximum Purchase Price for all types of properties, regardless of type, condition, or your investment strategy.

7.Learn how to negotiate to a successful purchase.

Rent Smart

1.Learn about Lease/Purchasing.

2.Learn how to establish the right lease/purchase terms.

3.Learn how to minimize Repairs and maintenance headaches…let other landlords deal with them…not you!

4.Learn how to reach out and advertise to find the best tenants.

5.Learn the ten point checklist for selecting the best tenants.

6.How buy and flip investors and buy and hold investors can benefit from lease/purchasing in today’s real estate market.

Sell High

1.Learn how to sell properties without paying real estate commissions.

2.Learn how to sell properties for fair market value without discounting.

3.Learn how to quickly get your property under contract

The Central Florida Realty Investors Association (CFRI) is a not-for-profit organization dedicated to promoting ethical real estate investing. We provide over 20 networking and educational opportunities each month to investors in Central Florida to help members gain practical knowledge of real estate investing.

CCFRI is the oldest and largest Real Estate Investing Association (REIA) in Florida and the proud recipient of the 2004 community service award, and the prestigious 2007 & 2009 Honoring Excellence Award – the highest honor bestowed on any REIA in the nation by the National Real Estate Investors Association. In 2008, CFRI was awarded the National REIA Award for Membership and Communications.

Learn from the best at http://www.cfri.net

Washington, D.C. – May 6, 2009 – (RealEstateRama) – An amendment by Senators John Kerry and Kirsten Gillibrand to protect renters from being thrown out of their homes after a foreclosure passed the Senate today as part of the larger housing bill, the Help Families Save Their Homes Act of 2009 (S. 896.) S. Amdt. 1036, the Protecting Tenants at Foreclosure Act, ensures that tenants and families nationwide have at least 90 days to find their next home if they are renting in a building that is foreclosed upon.

“More than 30,000 renters across New York, who dutifully pay their rent on time each month, may face eviction because they live in a building that is about to be foreclosed,” said Sen. Gillibrand. “These tenants have almost no rights when a bank seizes their home. Families without the means to find temporary housing or move into another unit can be kicked onto the streets, because their landlord failed to meet his or her obligation to pay. This is wrong and I am proud to partner with my colleagues to pass new protections for these families.”"Renters are blameless victims in the housing crisis,” said Sen. Kerry, who has previously introduced legislation to protect military families facing foreclosure. “Tenants who do no wrong shouldn’t be evicted without notice and without the necessary time to make alternative living arrangements. This victory will prevent a spike in vacant properties in our communities and give families who don’t have the means to find another place a chance to plan.”Renters often have no idea their home is about to be foreclosed upon. Depending on state law, renters in foreclosed properties may be evicted with limited notice, forcing families to move quickly and increasing the number of vacant properties in neighborhoods. Low-income renters who live in properties subject to foreclosure are lack the resources necessary to easily relocate.

The Protecting Tenants at Foreclosure Act states that tenants in any federally related mortgage loan (as determined under Section 3 of the Real Estate Settlement Procedures Act) or any dwelling or residential real property with a lease have a right to remain in the unit until the end of the existing lease. If a purchaser intends to use the property as a primary residence, the lease may be terminated and the tenant must receive 90 days notice to vacate; and tenants without a lease or with a lease terminable at will under state law must receive 90 days notice to vacate.

The amendment is cosponsored by Senate Majority Leader Harry Reid (D-Nev.), Senate Banking, Housing, and Urban Development Committee Chairman Chris Dodd (D-Conn.), and Sens. Edward Kennedy (D-Mass.), Richard Durbin (D-IL), Barbara Boxer (D-Calif.), and Jeff Merkley (D-OR).

“No state in the nation feels the pain of the foreclosure crisis as intensely as Nevada,” said Majority Leader Reid. “The most recent statistics show that one in every 27 Nevada homes is in some stage of the foreclosure process. Homeowners suffer deeply as they struggle to keep their houses, but renters often face sudden and unjustified loss of the roofs over their heads because of foreclosure as well. Those without the money to pick up and move unexpectedly suffer the greatest trauma, and this legislation provides them deserved and overdue protections.”

“A tidal wave of foreclosures is sweeping across the country and my home state of Connecticut, leaving countless victims in its wake, including many renters who are facing eviction through no fault of their own,” said Chairman Dodd. “This measure will help defend the hard-working tenants who pay their rent on time and are being unfairly forced out of their homes because their landlord is in foreclosure. Just as we have established protections for borrowers who fell prey to predatory lending, we must also protect these often-overlooked victims of the foreclosure crisis.”

“This amendment offers important protections to tenants who, through no fault of their own, are being forced out of their homes during this foreclosure crisis,” said Sen. Kennedy. “I commend Senator Kerry for offering this amendment, and I’m hopeful that it will be approved.”

“Renters have been the forgotten victims of the housing crisis,” said Sen. Merkley. “It is simply unfair that these families, who followed the rules and who may have lived in their houses and apartments for years, should be forced to leave their homes by circumstances beyond their control. I applaud Senator Kerry for bringing this issue to light and fighting for these innocent victims of the foreclosure crisis.”

http://RealEstateRoadKillUSA.com

If someone is about to lose their home to foreclosure, then you can guarantee they’re feeling stressed. They’re probably being bombarded by calls and letters from creditors, and for many people it all becomes too much to handle. They close their eyes and hope it will all just go away.

Reality is, that it won’t, and as an investor interested in buying foreclosures, the hardest part can be convincing the homeowner that they really are going to lose their house unless they do something about it. It can also be difficult to convince them that you really are trying to help them, even though you are helping yourself make a profit at the same time.

When you’re dealing with foreclosures, time is of the utmost importance. You need to have enough time to bail out the homeowner and take over the property before it’s too late. That’s why it can be a good idea to subscribe to a foreclosure listing service – you get access to listings at the earliest possible time, and don’t have to use your valuable time looking for potential foreclosure properties from other sources.

Many people facing foreclosure have spoken to an attorney, and are convinced that bankruptcy is their only option. In most cases this isn’t true, but attorneys tend to stick to what they’re familiar with, which is bankruptcy, rather than mentioning other possibilities such as:

- Deed in lieu
- Straight sale
- Foreclosure presale
- Compromise sale
- Short payoff
- Workouts
- Assignment

There are still more options than these, which shows that bankruptcy definitely isn’t the only choice for the homeowner. When you’re dealing with a homeowner in foreclosure, make it clear that you’re offering an alternative to bankruptcy. Find out whether they really understand what bankruptcy will do to their credit history and how it will affect their future.

If you’re serious about buying foreclosure properties, then you need to become familiar with everything that’s required in the process, and check everything for every property you consider. These items include:

- Loan and mortgage documents
- Loan amount, monthly payment, and interest rate
- Any outstanding taxes
- Existing insurance policies
- Any other liens or judgments

Make sure you have enough information to complete all the necessary tasks before the foreclosure occurs. If there’s not enough time, don’t even bother starting. Having said that, learn as much as you can about ways to delay foreclosure, and help the homeowner to implement them all. If may just give you enough time to take over the property before the foreclosure auction.

Above all, focus on creating a solution where everybody wins. It’s never an easy time for the homeowner, so be prepared for plenty of anger, frustration and resentment – some of which may be directed at you. Walk away if it’s obvious the person doesn’t want to work with you. Find someone who is interested in finding a solution, show empathy for their situation, put together a strategy to get the best possible result for them, and before long you’ll find yourself with a good portfolio of investment properties.

Real Estate Road Kill Usa .com

Newest figures show that buyer’s are coming back into the real estate market drawn by huge price reductions.  2 years ago there was a critical shortage of affordable housing and now it’s turned into a stellar buyer’s market.  It’s also estimated that as much as 40% of the homes sold are short sales, meaning the house is being sold for less than the amount of the seller’s mortgage balance.

When successful, a short sale transaction is a big WIN-WIN-WIN situation.  Sellers are getting out from under their unmanageable mortgage obligation, banks are unloading inventory and buyers are getting the deals of a lifetime.  Realtors® also benefit since most lenders will not consider short sale offers on For Sale By Owner properties.  Realtors® experienced in “negative equity” transactions are in high demand.

The key to being able to take advantage of the current market crises is patience.  When an offer is made on a property for less than what is owed on the mortgage the lender decides whether they are better off accepting the “short” offer or foreclosing on the property.  Foreclosures are typically a losing proposition for both sides and the offers from qualified buyers are welcome.  Unfortunately, lenders are unprepared to handle the volume of preforeclosure situations and the wait for a decision on a short sale offer is currently running from 1 to 4 months.

While an incredible opportunity for buyers, this type of transaction can be very frustrating for Realtors® and short sale negotiators.  Mark Greene, owner/founder of Short Sale Operations, LLC in Jupiter FL, explains, “since the buyer’s “due diligence clock” doesn’t start ticking until the bank accepts an offer many deals don’t come to fruition even after months of fierce negotiating.  The prospective buyer may have changed their plans during the long wait.

At this point the deep-discount price has been accepted by the lender and the contract must close in 30-45 days.  The good news is that the lender doesn’t really care who the buyer is once the transaction reaches this stage.  It is these deals (approved short sale offers with no immediate buyers present) that offer the precious low hanging fruit for opportunistic buyers.  A new website, www.RealEstateRoadKillUSA.com is receiving national attention for bringing this inventory of approved offers to the public. 

Realtors and buyers are flocking to it like bees to honey (or vultures to carrion).  These are the absolute hottest deals in town and all the work has already been done to prepare them for closing.  Simply, it makes sense to check this list as the absolute first step when shopping for residential real estate. 
         
Whether you find yourself on the distressed or the opportunistic side of this market be sure you are working with real estate and mortgage specialists who can present all your options.  Buying and selling in “short sales” situations requires specific knowledge of the procedure to be successful.  Consultations are always free at Elite Lending, 561-575-5626 and via the RealEstateRoadKill Regional Licensees that will be operating shortly. We are all proud to be serving our community in these trying times.

For the sophisticated home buyer, the current market conditions present some unique
opportunities. Gone are the days when it is necessary to pay “full retail value”, unless
you are looking to buy a property with very unique characteristics, or in a very specific
location.

The current local inventory is full of “distressed” property listings. So how should you
proceed.

Firstly, I would recommend that all buyers work with a local expert. A well established,
local, full time, Realtor is the most able to correctly determine the current value of any
property.

There seem to be many “bargains” around, that are selling for a fraction of their previous
selling price. But are they really such a “great deal?” Your Realtor needs to complete a
“Comparative Market Analysis” (CMA), to determine the actual current value of any
prospective purchase. You may be surprised to learn that even though a property may
be listed for ONLY 60% of it’s previous selling price, that it is still overpriced by 10-15%
versus other competitive listed properties.

So be careful !

What should you be looking for ? What are the choices ?

Pre-foreclosures (short sales)

These are properties that are typically at some stage of the foreclosure process. At this
point the homeowners have determined that they will be unable to sell for a price, that
will allow them to pay off any existing notes & mortgages. They will have priced their
property at less than the existing debt and are waiting for offers.

Only when an offer has been received, can they start the “short-sale” process with
their lender. This process can take many months and there is no guarantee that the
lender will ever accept an offer – They are not obligated to do so !

So, as a buyer – do you have 6 or more months to wait for a decision?

Bank Owned REO

These are properties that have already been foreclosed, and now belong to the lender.
They are typically listed with a local Broker, and offers are then presented to the bank
for their approval. Again there is no guarantee that they will accept an offer. The time for
acceptance can take many weeks, and they are geared up to receive and consider multiple
offers.

There is no guarantee that the price of the REO is actually a good deal. Very often buyers
fall into the trap of assuming that because it is a “foreclosure” property owned by the bank
-that it must be a steal ! Often this is not the case.

Short Sale Approved (Road Kill)

These are pre-foreclosure properties, on which an offer has already been submitted and
approved. For various reasons the “buyer” is unable to close. This then means that the
price has already been negotiated and a new buyer can close, normally within 30 days.
At this stage the bank do not care who’s name is on the contract. They have already made
a decision to take a loss and are just looking to close the transaction, and get the property
off their books, as soon as possible.

So if you are looking for a quick decision, a quick close, and at a price that can be quickly
researched for a “steal”. Then ROAD Kill is for you.

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This Blog will contain all sorts of information that owner occupant home buyers, investors and Realtors will find useful as they navigate through the maze of pre-foreclosures, short sales and REO’s.

As someone who has been negotiating “short sales” since the late 80’s (before they were even called short sales), I have learned a tremendous lot over the years about the whole process. This includes a lot of “tricks & tips”, that constantly change as the market changes around us.

The “Real Estate Road Kill” concept is a joint effort between Danny Poulos (mortgage broker) and Richard Butler (RE broker), who have both identified the need and opportunity to provide this listing service for others.

As the frustrations of working with banks, lenders has become even worse. There is a much easier way – and that is to work ONLY with short sales that have already been approved by the lending institution.

Get qualified, get ready to make an offer and close 30 days after acceptance, and get a real steal!!!!

Real Estate Road Kill USA .com