Stop Foreclosure FAQ's

Q. What is a foreclosure?


A. When a borrower (home owner) has been unable to make payments on his mortgage loan, the lender may determine the loan has is in default and will proceed with legal action to take control of the property. Any equity the homeowner may have realized in the home is lost, and the homeowner may have to vacate the premises. Laws on the amount of time a homeowner has before a lender can start foreclosure proceedings vary form state to state.


Q. I just received a notice of foreclosure. How long do I have to make my decision on what to do?


A. When it comes to dealing with late mortgage payments, time is not your friend. The sooner you act - the better. Your lender will be much more confident in your willingness to make payments on your mortgage if you deal with the situation immediately, rather than waiting until your back is against the wall. The home foreclosure process can take anywhere from a few weeks to many months, depending on your state law and the method of foreclosure your lender chooses to use, but it is imperative that you take action as quickly as possible.


Q. May I negotiate with my bank on my own?


A. If you are only a payment or two behind, you may try to discuss your difficulties with your lender on your own behalf and hope to work out a favorable arrangement. However, if your lender is not educated on loan renegotiation, or simply is not willing to speak wity you, then it is the time to contact a professional organization. It is not recommened to wait for more than a 10 days. Time is not on your side in these matters. We provide the professional representation that you need to achieve the best solution with your bank.


Q. How long is this going to take?


A. Working with your lender to reach a suitable arrangement can take anywhere from a few days to several months. It all depends on your current financial position, and whether or not foreclosure proceedings have already been started. Typically, it takes several weeks to complete a workout agreement and stop foreclosure proceedings.

How to invest in real estate with no money

The world of being a bird dog

This is one way to get in to real estate investing without any money and you will get paid 2 different ways. Bird dogs make money by finding deals and by getting a free education.

What do bird dogs do?
Bird dogs go out and find good deals for investors and turn over this information for a fee. They are not involved in the actual transaction at all, once they find a potential deal they let their list of investors know about it and if the investor buys the house they write the bird dog a check. There are a thousand different ways to find deals and it is up to the bird dog to figure out how to find the deals. They can call for sale by owners, they can call vacant rental properties, word of mouth and by driving around looking for vacant or run down houses.

How much do bird dogs make?
How much the bird dog can make depends on the deal, the investor and how much work the bird dog actually does. Some investors want just the address and they will take it from there, while others want to see comps, asking price and all available information. Obviously the more work and investigation you can do the more you should be paid. Most bird dogs make between $500 and $1,000. One or two deals a week should pay the bills.

The benefits of starting as a bird dog?
While you are out finding deals and running them by investors you will learn to tell the good deals from the ok or the bad. This is huge because if you find a bad deal, who cares? You just move on to the next one. If you jump in as an investor and purchase a bad deal you could be out thousands of dollars. As investors get to know and trust you, then you can ask if they will let you sit in on the negotiations and closing process. This is all a free education, well actually you are getting paid to learn.

Bird dogging can be done part or full time and takes no investment from you other than hard work and time. Treat it like a business and keep it professional. Remember everyone you meet may be a future partner and first impressions are huge.

Remodel ourselves, or hire contractor?

To pay or not to pay a contractor?

This is something that we struggle with constantly. We have the know how and experience to do all of the remodeling work on our flips. But is the best use of our time? We like to do the work on our own houses, but this is a business and we have to make decisions that benefit the bottom line not what we "like" to do. Here are some of the pros and cons that we have come up with.

Doing the work ourselves

We like to work with our hands and get a lot of satisfaction out of seeing the completed remodeling job and knowing that we did a quality job. The job is done correctly, exactly how we wanted it and it is cheaper. There are no issues with scheduling or babysitting contractors. The problem with this is that the time we spend on updating and remodeling houses might be better spent looking for more deals.

Hiring contractors to do the work

A professional contractor that you can trust is critical, but finding one is half the battle. Once you find a good one, you will not have to babysit or worry about the quality because they want your future business. You want someone that will team up with you and help you out in good times and bad.

Is it cheaper to do the work ourselves?

Yes and no. On paper if you are looking at one project yes, but you have to look at the big picture. Here is an example, let's say that your contractor charges you $40 per hour for a job that takes 40 hours to complete. You can do the job in 60 hours and can pay yourself nothing, which is a $1,600 savings. Right? NO! How much is your time worth to you? At the minimum you should figure $15 an hour, which cuts the savings down to $1,000. Now let's say that you hire Joe contractor to do the work and while he is working you are looking for your next project. If you were to find a deal on a flip that will bring you $20,000, what is your savings now? Would you have found that deal if your were elbow deep in paint making $15 an hour?

We are investors, we make our money off of finding houses to fix up and sell. We have found that companies like Reliable Remodeler are the best way to find reputable contractors to do their thing while we do ours.

Real estate bubble?

What is the real estate bubble?

This is a theory that the value of houses has gone up or inflated too much too fast and that houses are not really worth what people are paying for them. Real estate markets get saturated with buyers when they are hot and house prices go up per supply and demand. These buyers are a mixture of prospective homeowners and investors.

Will the real estate bubble burst?

There are 18,000 houses on the market for sale in Las Vegas right now. So, we have a huge supply of houses and all of the sellers are competing with each other, which is driving prices down. They are not drastic drops, but a big difference from a year ago when a seller would get multiple offers above asking price.

Is there a real estate bubble?

Yes and no. It depends on how you look at it. We look at real estate as being like the stock market. They both have their ups and downs (the stock market daily) and if you buy at the right time you will make money. A smart investor will have a diversified portfolio, whether it be stocks or properties. This allows you to ride out the slow times. Let's say an investor bought a house last summer for 80% of what it was worth back then and rents it out for a profit of $100 a month. If the market slows down and the value drops a little bit, who cares! That property is still sitting there making you $100 a month and eventually the value will go back up and you will have paid down the mortgage.

Do I believe that the bubble will burst? No. Do I believe that markets will slow down and bring down values? Absolutely. Can you make money in either scenario? Yes if you play the game right.

Las Vegas real estate market

The Las Vegas market is cooling off

In 2004-2005 Las Vegas was one of the hottest real estate and investing markets in the country. House values were appreciating through the roof and homes that were for sale were getting multiple offers that were higher than the asking price.

Buyers market

Things have changed. We are now in more of a buyers market that has people speculating that the bubble has burst. Homes are on the market for an average of 59 days and are selling at around 97% of the listed price. There are houses listed on the MLS that have been on there since December and earlier and have gone through a few price reductions. Homebuilders are starting to offer more and more incentives to entice future home owners to buy a house from them.

Has the bubble burst?

This depends on who you ask and what their motives are. In my opinion, no. The Vegas market is correcting itself from the crazy explosion that it had and interest rates are on the climb, which tends to slow down appreciation everywhere. We are getting back to normal. I would not expect to see double digit appreciation anytime in the near future, but we are starting to see a shortage of buildable land. This is causing builders to cram houses together, raise prices and start building up. I believe that this will help single family homes with yards, continue to appreciate at normal 4-5% rates.

The Las Vegas market has received some bad press lately because of the slowdown. Some people are running and some will take advantage of it. The median house price in Las Vegas has dropped down closer to $300k. This is good for buyers, but may be bad for sellers. There are most likely some homeowners that have their houses over financed with helocs and second mortgages.

Buying houses for no money down.

Buy real estate with no money!

You probably have seen the late night infomercials, with a slick salesman talking to you from his mansion about zero down investing. I have seen people spend a ton of money on these programs and courses that promise riches overnight, but the only person that gets rich is the one selling this so called information.

Can you buy real esate without money?

Absolutely, but you have to bring something else to the table. To buy investment property you need money, credit and/or ambition. One or two of these things can overcome a lack of the other. The gurus want you to think that all you need is their course and you will be buying houses in no time without any money. There is a whole lot more to it than that.

Money:

It is very easy to buy a house if you have a fistful of cash. I have seen people lose a lot of their own cash, because they feel that if they have the money they can go buy any house and turn a profit. They get lazy and do not do their due diligence because it is not required.

Credit:

With strong credit you can go get a 100% loan or a 95% loan. There are more and more no money down loan programs out there, but you have to be careful. If you have a house that is 100% financed and the value goes down you will come out of pocket to sell it. With good credit you can also pull out the money to make repairs, this way you can pay other people to make the necessary repairs. With todays bad credit loans there are more loans available.

Ambition and Hard Work:

This is where the real no money down deals come in. If you spend your days looking at houses, calling FSBO's (for sale by owner), watching the MLS and (here's the secret) making a ton of offers, you can find no money down deals. This is hard frustrating work because these deals are few and far between. The jackpot you are looking for is called a motivated seller. This is someone that just wants out of their house. Every investor should be looking for these deals, even if they have millions in the bank and have a credit score of 850.

No money down deals are easy to do, but hard to find.

There are a lot of ways to do zero money down deals:

• Subject To (take over payments)


• Owner financing


• 100% bank financing


• Combination of bank and owner financing (wraps)


• Silent money partner


• Wholesaling


• Borrow from friends and family

This is a short list of the infinite number of ways to buy a house without using your own money. The moral to this story is that you can do these deals, but it is very hard work. It is frustrating looking for these needle in the haystack deals, but they are out there for the few that are willing to work. You might have to start out with no money and spend months looking for that one deal and then use that profit to buy another one. Even the veteran investors look for no money down deals. The less capital you have tied up, the more houses you are able to buy.

The real secret to investing is... hard work, ambition, and creativity.

How to protect yourself against a bad flip.

We all know that there are people out there that are not honest. Flippers and investors are no different. As a potential house buyer, you need to keep an eye out and protect yourself. This is a true statement whether you are looking at a house that is for sale by an investor as well as a non-investor. Here are some tips that we suggest you keep in mind when buying any house.

Get an appraisal :

An appraiser is a professional whose job is to determine the value of real estate. This is a necessity and will be required by most banks before they will give you a loan or mortgage. Make sure that you use your own appraiser, insist on it. This will make sure that you are paying a fair price for the property.

Get the house inspected :

An inspector's job is to inspect the property and discover any major defects and/or code violations. Inspectors will not catch everything, but a good one will catch the big problems that can end up costing you a lot of money. You also want to insist on using your own inspector to ensure that you get an honest inspection. Ask for and check references, you want someone that you can trust.

What you can do yourself :

An honest flipper or investor will not have anything to hide. Ask questions! Find out what work they did, what work they had others do and what permits were pulled. If there was an addition, a room conversion or plumbing and/or electrical work done, they need permits. You can have serious problems selling the house later on if work was done without permits being pulled.

Look closely at everything

If something does not look right, it probably isn't. Look at the cabinets to see if they were re-stained, painted or replaced. See if the flooring is constructed of quality materials. Look for the little details that show quality. You want a flipper that is detail orientated.

Water damage

Inspect all of the areas surrounding sinks, baths and showers. There should be no discoloration. Kind of poke around to make sure that something was not just painted over. The caulking around these areas should also be in good condition. Walk around the house to make sure that there is no water damage on the exterior. Discoloration is not your friend.

Inspect the exterior

Too many people fall in love with the interior and layout of a house and never really look at the outside. Look at the roof the best you can for loose or missing tiles. Is the paint in good condition? Look at areas around windows and doors to make sure everything is there and in good condition. A lot of water leaks start from the outside of the house.

These things are common sense to some people, but to others this might as well been written in Greek. Even if you do not know anything about what I talked about above, you can do a thorough inspection. Walk the house with your inspector and ask questions, these people love to share what they know. Look at the house twice. You will be looking at the layout and overall feel of the house instead of all of those little things that you will notice the second time.

This information is not to scare you, but to inform you. You need to protect yourself. These problems can be passed on to you by the most honest person in the world, but if they do not know about a problem, that problem is now your expensive problem.

Is flipping houses illegal?

In a word, NO! Can you flip houses illegally? Sure, but this can be said of most professions (Enron?). There are people that will do anything to make a quick buck, even if it requires breaking the law. First of all, flipping and rehabbing are actually two different methods of investing in real estate, even though you will hear otherwise.

Rehabbing houses

is the process of buying an ugly house that needs repairs, fixing it up and selling for a profit. Rehabbers want to sell the house as fast as possible to cut down on holding costs, and this is why people refer to them as flippers.

Flipping houses

is the process of buying a house well below market that may or may not need repairs, getting it under contract and assigning the contract to another buyer. This is also known as wholesaling. Buy low and sell high.

Both of these methods are 100% legal, however there are people that cheat the system. The typical illegal scenario involves a minimum of 3 people, an investor, a mortgage broker and an appraiser working together. The scam starts when the investor buys a property for less than what it is worth. They will then find a buyer and have the mortage broker "preapprove them" for an amount that is more than what the house is actually worth. The appraiser will then value the property for more than what is worth and the unsuspecting buyer has now bought a house at an inflated number. This is also known as mortage fraud and is a federal offense.

These would be investors are no more than a common con artist. And of course these people are the only investors that you will ever see in the news. This has given the hardworking honest investors a bad name. This will only be countered with determination and getting the word out there that not all investors are like this. Integrity is doing the right thing even when no one is watching you. We are out there.