Register for next weeks webinar on how to mass market your business!

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I’ve been telling you we’re in a historic window of opportunity. The stars have all lined up for you this time.

With foreclosures at an all time high, getting your hands on even beautiful properties for pennies straight from banks has never been easier. Their practically giving houses away…you just have to know how to ask.

Last year I released my “Real Estate Millionaire Blueprints”, a product that’s been almost a decade in the making. This week I’ve decided to re–release a brand new updated version for 2010 because there’s never been a better time to get started.

I wish I was in your position. Lightening only strikes once and I’m positive we’ll never see a market like this again.

It may seem like it’ll take forever and a day for us to get out of this market–but your chance to profit in real estate will be gone in a flash.

If you want to take advantage of this historic flood of foreclosures, I’ll show you how I’ve done it, and how you can do it too.

With that said, on Tuesday, January 19th I’m re–releasing my “Real Estate Millionaire Blueprints,” containing the most powerful strategies to buy bank owned properties I’ve discovered over my last decade of successful investing.

Now you too can have the same secrets responsible for my success and the massive success of my students.

Keep an eye out in the couple days, because you don’t want to miss out.

To your MASSIVE success,

Jeff Adams

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 It all depends on where you chose to focus your efforts.  For example, the number of foreclosures on the market has been steadily increasing over the past couple of years.  Yes, people are losing their homes, and as an investor, now is the best time to invest in them.  A true entrepreneur will find opportunity even during the meekest of times.  Buying a bank owned property or foreclosed home is the best way to both help the homeowner and yourself.  

            Houses right now are selling for such low prices, that it is almost a shame not to take advantage of them.  Deals are out there waiting to be taken advantage of.  It is up to you to be in the midst of them and out there tracking them down.

            Use the current loan situation to your advantage.  There are currently so many loans in default and now is the time benefit from them.  Now is the time to consider buying bad notes from banks.  Why not do what the government is doing.  The government should not be the only entity to profit from the current loan situation.  There are definitely enough opportunities out there to share the wealth.  The government is not going to limit their purchasing of these notes and realistically speaking they cannot buy all of them, so why not buy them yourself and profit.

            It is time to cash in on these defaulted loans.  The time for note buying has never been better.  You would be surprised at the opportunities that are available for purchasing notes at discounted prices.  A good place to start finding out what deals are out there is consulting with your local banks.  Chances are more than likely, that they have taken back too many houses attached to too many bad notes and are they want to get rid of them.  Why not cash in on their situation.

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Before tackling such a business venture, there are several elements to consider.  First and foremost, an investor needs to decide on the best strategy for locating bargains with the most potential for profit.  Real estate owned properties (REOs), foreclosures, auctions, or for sale by owners (FSBOs) are all options to consider.  Also, working with a local area real estate agent offers much insight into the current market.

The type of financing that will be incorporated will also be a key component within this overall strategy.  There are several ways to acquire financing for an investment.  The sellers of the property, banks, government programs, investors, or private mortgage companies can provide funding.  Also, one has to decide if partners will be involved in the transaction, who will actually be doing the rehabilitation work on the property, and whether or not the property will be listed with real estate agents.

Creating a business plan is the next course of action.  This allows an investor to choose the proper alternatives that cater to each individual situation.  It outlines specific objectives and also highlights both the risks and rewards of the investment.  A business plan also offers a perspective and pinpoints the strengths and weaknesses of the potential purchase. 

Once the business plan is in place, an investor can begin his/her journey to investment by finding target properties.  A target property would generally be a single-family home in need of repair that is located in a decent neighborhood.  Lower to mid-priced homes in areas which first time home buyers wish to live in are great target properties. 

Looks do matter.  The best looking homes are not necessarily the best options for profit.  Houses that require only cosmetic repair are typically marketed nearer to their maximum retail value. Comparatively, houses that are structurally sound but need some work are ideal.  They are priced cheaper and when coupled with value added rehabilitation, they become assets, which in turn offer a profit.  Houses that offer causes for concern such as severe foundation settling, soil instability, plumbing problems, electrical system overhauls, extensive roof damage, or obsolete floor plans are not desirable investments.

Determining a purchase price is the next step in process.  Having a realistic idea of what you are getting into is key.  This price is contingent on a variety of factors. The maximum retail value of the property after repairs and renovation have been completed, comparable purchases in the neighborhood, real estate appraisers or agents familiar with the local markets all play a role.  A property’s purchase price can be determined by assessing the maximum retail value of the property and subtracting purchase costs (loans, brokerage fees, closing costs), rehab costs (repairs and improvements), holding costs (interest expenses for loans, utilities, taxes accrued between the purchase and the sale of the property), sales costs, the contingency factor (any unforeseen or unanticipated expenses), and profit (the amount netted after expenses).  This formula decides the maximum purchase price for the property.

After the purchase price has been established, a funding plan needs to be implemented.  One can either work with private mortgage lenders or receive financing from the seller or a combination of both.  An investor needs to identify potential sources of income and decide if he/she will supplement what is needed through personal savings, with other investors, or joint venture partners.

One popular choice is a renovation loan through a home equity line of credit or a mortgage.  This type of loan can generally be borrowed against ninety percent of the equity the homeowner will have when the house is completed.  The interest rate on a home equity loan is about the same as a mortgage but only about one hundred thousand dollars of this is tax deductible.   An even better way to procure financing is with a renovation loan paired with a first mortgage.  Loans can be borrowed against the house’s value after the rehabilitation and renovation work has been completed and the interest is tax deductible up to one million dollars.  Almost all lenders, the Fannie Mae’s HomeStyle program, and Freddie Mac’s Home Work! product offer this type of financing.

When financing has been established, it is time to find a real estate agent in order to proceed.  The expertise they offer is invaluable and they are knowledgeable of properties that are or soon will be available, price ranges, financing options, neighborhood characteristics, title issues, seller negotiations, and purchase offer submittals.  In addition, they have access to multiple listing systems (MLS).  These Local Association of Realtor databases are useful tools to have in the market.  Considering that only about fifteen percent of the properties in the market are for sale by owner and REOs can only be accessed through an agent, working with a real estate agent is crucial.

After the initial investment has been made and the property has been purchased, a rehabilitation strategy is implemented.  The ultimate goal is to enhance the marketability of the property.  All structural, mechanical, and electrical systems need to be repaired in compliance with the Federal Housing Association (FHA) construction standards.  High quality work by professionals is necessary to ensure the best possible renovation.   Curb appeal, kitchens, and bathrooms should be paid particular attention.   Monitoring the project, tracking expenditures and maintaining records, and also photo documentation of progression are essential. 

Over improving a property does not necessarily offer a greater profit, but rather hinders the sale of the house. Renovations should be comparable to other homes in the area.  To receive the maximum resale value of the property, rehabilitation and remodeling investments should not increase the retail value of the house by more than ten to fifteen percent above the median sale price of other homes in the local area. 

When it is time to sell, a powerful marketing strategy is necessary.   Finding a top selling real estate agent is imperative for maximum market exposure.  The listing agreement should include monetary incentives that stress the urgency factor of the sale and protections that define liabilities for all parties involved.  Keeping in close contact with the agent enables the seller to monitor the progress of the marketing plan.  Buyers can also be attracted with seller financing options. 

Buying, fixing, and selling a house is a huge undertaking that offers an investor a potential for a good profit within a relatively short amount of time.  It involves a lot of hard work and a large time commitment.  For those willing to put forth the effort and often times the elbow grease required, it is definitely an investment worth making.

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Having a variety of different types of investors can prove to be invaluable.   Making sure to include both high-end and low-end property landlords, contractors, rehabbers, new and seasoned cash buyers, as well as bargain buyers and wholesale buyers in your list puts you in a position to sell houses at every level.

There are several ways to go about finding buyers for your list.  Begin building your list of buyers by marketing to the masses.  Placing ads in the classified sections of the newspapers and also replying to current classified ads are good ways to start.  Sending direct mail to mortgage brokers and realtors can and connect you with potential investors.  Another way to network with potential buyers is by visiting your local Real Estate Investor Association (REIA) clubs where.  Use your business cards and get as many business cards of others as you can. Visiting local churches and letting the priests, pastors, etc. know what you do and offering your help to parishioners and members of the clergy is another way to connect with possible buyers. 

Take advantage of the massive resources technology has to offer.  Place ads in online classified sections, Craigslist, and eBay.  Peruse specialty websites such Home-Buyers.com, Buyers.com, FindMoreBuyers.com, and We Buy Houses.com.  A great resource for finding non owner occupied leads and wholesale buyers is Listsource.com.  Leads for landlord type buyers can also be generated via websites such as Socialserve.org or by just Googling the public housing authority for a specific area and viewing the section eight units.  Other buyers can be found on websites such as Kijiji.com, and Backpage.com.  Take part in online forums and websites specializing in real estate.  Peruse websites like Craigslist and eBay.  Join and visit social networking sites such as Facebook, MySpace, and Twitter.  Media marketing on television and over the radio is another way to generate leads.

When you do get responses from possible buyers you need to make sure you ask them the right questions to establish your relationship and secure the potential for future deals.  Knowing the right questions to ask is key.  Besides asking for general information such as name, telephone number, and email address, you should also ask for what areas they prefer and if they can close with cash immediately.  Asking what their price range is and if they would be interested in future deals is beneficial.  Investors should also be asked if whether or not they are interested in rental properties and rehabbing opportunities.  Inquiring about specific criteria will allow you to create a more clearly defined list of buyers in your database.

Building a buyers list is an ongoing process and should be constantly monitored, refined, and growing.  When the list has been established, it is time to find the deal and the money will come.

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Click here to join us for tonights call

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Check out this video I just watched.

It was created by Than Merrill and his team from A&E’s “Flip this House”
who are good friends of mine and one of the most successful Wholesaling
teams in the country.

In the video, Than shows you how to create a Business Listing for your real
estate business and how to get it up on Google in 15 minutes to start driving
in motivated seller and buyer leads.

It’s a killer strategy, especially in today’s market!

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Because it offers many advantages to the wholesaler, this type of investment is very attractive. No license is needed so just about anyone can do it, it involves a quick turn around time, and it gives the investor more personal time. Investing in properties that have been foreclosed upon also has unique criteria. It is much targeted and works in every market. It also has the built in problems of the homeowner losing the house and the bank wanting to get rid of it which gives an investor an advantage.

By definition, real estate wholesaling is the entering of a contractual agreement with another party for the purpose of purchasing property, and then assigning your interest in that contract to another investor for compensation.

The actual process of foreclosure varies depending whether a state is judicial or non judicial. The former requiring legal action and the latter not deeming it necessary. In non judicial states, the borrower can grant the power of sale directly to the lender. After a borrower fails to make several payments on a loan, a lender files a Notice of Default (NOD) and the foreclosure process is put into effect. After about three months, the lender files a Notice of Sale (NOS). The house is now in control of the bank or Real Estate Owned (REO) for twenty one days until the actual foreclosure sale.

As with any investment or business venture there are pros and cons when investing in a foreclosure. When buying foreclosure properties, an investor can either approach the homeowner directly, purchase the house at a public auction, or buy it from the bank. Approaching the homeowner gives you the ability to negotiate terms and offers huge margins for profit, but there are title, liability, and legal issues involved. Public auctions give an investor huge margins for profit but an investor has needs to make the purchase with all cash and usually there has not been an inspection and at times an eviction prior to the auction. Buying from the bank may not offer as much of a profit margin and or terms to negotiate, but it does offer the investor a sense of relief because the house has been subject to a full inspection and there is no title issues assignment.

Often times, foreclosed houses never make it to the public auction. This partly because homeowners have a variety of options they can use save their homes before they are sold publically. An investor could have made them an offer, any bank could refinance their loan, they could sell it with a realtor, or they could take out a second mortgage.
Once you have made an offer on a house and it has been accepted, you can proceed to write the offer with you as the Trustee, with the exact vesting to be determined. The terms and conditions of the purchase and sales agreements are understood and agreed upon by both parties and signed, and ownership of the property belongs to you. The next plan of action is finding a buyer to purchase your vested interest in the contract.
Banks usually have a “No Assignment” clause but there are ways of getting around it, so that you technically never receive title of the house. Using a land trust is one such way. A land trust is a contractual agreement between two consenting parties. The agreement is between the party that creates the trust and the party that agrees to hold title to the trust. The grantor of the trust can also be the beneficiary, which gets full rights and benefits of the property. The trustee on the other hand is just the name on the trust agreement and therefore does not have title to the property.

After this has been established, it is time to refer to your buyers list to find an aggressive investor that is eager to purchase your interest in the contract. When you find an interested buyer you can make an agreement between the two of you, as trustee and buyer where you give one hundred percent assignment to your buyer. If there is an HOA, it needs to be made aware of the assignment to the buyer. Your buyer can then wire the money and the deal closes with you as the trustee and since your buyer owns the trust, he/she is protected. When this transaction is completed, you can proceed to deed the property from the trust to your buyer. This in turn terminates the trust agreement and you are free and clear. The deal is complete and you can advance to the next deal that is just waiting for you to be found.

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