Ball asked:

When performing a short sale on the stock market, how much time are you given before you need to buy the stock back? Also, when I do a short sale am I typically going to be selling the actual brokerage’s stock? (as I don’t currently know anyone that would be willing to lend me theirs.

short sale

qflytieman asked:

The loaner is the one who actually owns the stock. How much do they get for loaning the stock for the short sale.

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Dominic Mazzone asked:




For the last month I have been travelling through Europe and I am always surprised at how beautiful that part of the world is, however this time I was also surprised by the painful strength of the Euro.

]]> http://www.azrealtyresults.com/14256/euros-have-two-ways-of-profitting-in-u-s-dollar-investments/feed/ 0 http://www.azrealtyresults.com/12532/greed-of-short-sale-investors/ http://www.azrealtyresults.com/12532/greed-of-short-sale-investors/#comments Sun, 15 Nov 2009 22:40:12 +0000 jswartz http://www.azshortsaleonline.com/210/greed-of-short-sale-investors/

Shawn Hutchison asked:

The first question is usually not about the investors’ greed, but about how they are screwing the home buyer.  Real estate agents will defend that they have a right to get their client the best deal possible.  I like that.  That’s what they should do.  The issue then becomes what is the best deal they can get on their own, not what is the best deal an investor, who either is, or has, experienced negotiators and integral knowledge of how the short sale process works.  So even though an investor provides the acceptable short sale discount in a timely fashion (as most buyers are either relocating or moving out of a previous place of residency and likely have just a couple months of a window to find a new place to live), the buyer should be entitled to this discount.

WRONG!  If it was up to a real estate agent, and I don’t blame them for not being any more proficient at negotiating short sales, the negotiation process would take between 3 and 12 months and would result in a much higher short sale payoff amount.  Thus, the buyer would pay more.  Of course this is not the agents fault, they are getting paid less than full commission and they have to do two jobs.

And I have never found a buyer that wanted anything less than a good deal.  A good deal, then, would involve getting a house for less than it’s worth, right?  And therefore, they are trying to profit immediately when purchasing a home, no different than what an investor is trying to do.  If they weren’t trying to make money on their purchase/investment then they should be happy at whatever price they feel is fair.  Yet, this is not the case.  Buyers = greedy.

The second fault of the greedy investor is that he is “screwing” the lender out of money.  This is really only an issue because tax payer money is going to them.  I can tell you this, if no investor made another dollar on a short sale, these banks would still take all of the money that was offered to them.  And in return they don’t lend it out, and rarely help homeowners stay in their property for more than a year.  Remember that these are the same people who developed “subprime loans” and “predatory lending” in order to get more money in a seemingly flawless economy.  Lender = Greedy.

The last complaint of the greedy short sale investor is that they are taking advantage of the homeowner.  When a homeowner has no other option they can only short-sale their property and keep a foreclosure off of their property.  The best chance of getting a completed short sale is to use an experience professional person who understands the process and specializes in negotiating short sales.  This is not real estate agent.  It could be an attorney, but if the homeowner can’t pay their mortgage where are they going to get their money to pay them?  Even an attorney won’t negotiate a short sale as effectively as an investor. Why? Why would they?  They get their money up front, win or lose, they get paid.  Not really a win-win situation.

The second part of this argument, then, is the investor exposing the homeowner to a larger deficiency judgment? If the bank were to go after the debtor/homeowner for the payoff deficiency they would first of all have to have a reasonable belief that the debtor had the money to pay them.  Otherwise they’d just be wasting money on court costs and attorneys (still not working for free).  Even if the lender pursues the deficiency judgment, the deficiency is always much, much less as a short-sale than it is a foreclosure and REO sale later.  And if you don’t have an experienced negotiator you may never find out if your property had the opportunity to be sold via short sale.  Not to mention, most short sale investors will remove themselves from the transaction if there is not enough of a spread between what they negotiate and what a buyer will pay.  

You really can’t lose if you’re the homeowner, unless you allow an inexperienced short sale negotiator, or an over-worked and under-paid real estate agent to handle your short sale negotiations and you don’t successfully short sale your property before foreclosure.

Investing in Real Estate?

Leslie Collins asked:


In order to successfully flip real estate contracts whether you’re involved with potential rehab projects or pre-foreclosures you need to have a solid investor network to present your ‘package’ to.

It is imperative long before you lock up any property that you can, within a few phone calls, contact active and willing investors who will consider your offer.

The key to successful real estate contract flipping is making it easy for your upstream investor group to quickly resell properties you’ve assigned to them. Consistently providing well priced deals that your investor group can turn over quickly gives you the credibility you need to flip contracts on an ongoing basis.

Many rehab investors have more money than time so by you doing the legwork you are providing them a valuable service.

Here are FIVE tips that’ll help you gain credibility with potential investors looking for properties:

1.) Accurate repair estimates – Investors don’t like surprises. When evaluating a property be able to estimate the repairs by a margin of about 20%. If you underestimate your repair cost, your investor will have to re-evaluate whether or not the property is really a good deal or not.

2.) Accurately estimate the Market value of the property – Don’t base your property value estimate on the asking price of other houses that similar in spec. You need to base your value on similar houses that have been sold in the area in the last 30-60 or 90 days.

3.) Understand the impact of holding costs – Know the average ‘Days On Market’ (DOM) for properties selling in that area. This will have a critical impact on your investors holding costs and ultimately your profit. If the average DOM is 90 this means the investor can expect to pay out 3 months of loan payments, most likely borrowed from a hard money lender at somewhere between 12-14%.

Of course if you know the average DOM is 15-30 days your deals will be all the more attractive to outside investors.

Again due diligence in the form of market research on your part will insure you are credible and are communicating the most accurate information regarding DOM to your investor group.

4.) Research the property – be prepared to examine and communicate to your investor group issues regarding deed problems, structural records, comps, zoning status, insurability report, and other key details that would affect closing and or re-sell. Again no surprises.

5.) Be serious and know your role – in other words, treat this as a real business. You are providing a service, a specialized niche that requires a combination of negotiating skills and knowledge of the real estate market. If your assignments turn over or ‘flip’ quickly and at the right price you will be getting weekly calls from investors providing you endless business.

Summary

The good news is flipping real estate contracts can be learned; there are some really good methods in the form of e-books available which are not very expensive. Successfull real estate contract flipping involves a mix of knowledge and experience, and probably the best way to get your foot in the door making money in real estate. Why not start the learning process? Most realize there’s nothing to lose and opens the door to acquiring wealth.

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Michael K. Houston asked:


If I were to ask if you ever thought about investing in real estate, my guess is you would answer “yes.” Many have dreamed of purchasing investment property to supplement their income, build wealth for retirement, or fund their child’s college tuition but have sat on the sidelines watching their dreams turn to mere wishful thinking. Well, now more than ever is the time to get off the bench and onto the real estate investing playing field. We’re experiencing a rare golden market for acquiring cash flow real estate property that we may not see for many years to come (or ever see again)!

How is this so? It is so due to a combination of historically low interest rates, drastically fallen home values and stable rent prices. A few years ago when home prices were skyrocketing by the day it was nearly impossible to buy a home, rent it out and receive a positive cash flow. Yet the tide had turned, and now it’s very possible to do just that! In the summer of 2008 I helped an investor client of mine find and purchase a deeply discounted renovated bank-owned townhome in Prince William County, VA and a few weeks later secure a tenant for her which provided her a substantial positive rental cash flow. And the beauty of this transaction is that as the real estate market rebounds over the long-term she will enjoy the equity appreciation, tax benefits, and monthly supplemental income while her tenants are paying for her valuable asset.    

I truly believe that real estate is the cornerstone for building generational wealth.  I have enjoyed the benefits (although not void of challenges) of owning cash flow rental property  for 11 years and have made it my professional mission to help renters become homeowners and homeowners become successful real estate investors.  The current real estate market provides one of the greatest windows of opportunity to begin that journey towards long-term wealth accumulation.  If you are ready to experience it for yourself, I recommend the following steps:  

Schedule a consultation with an investor-friendly real estate agent knowledgeable and experienced in finding and structuring profitable cash flow real estate investing transactions. This initial consultation will provide you an opportunity to share your goals and get professional guidance on developing a plan of action to bring your vision to reality.  Get pre-approved for investor financing. Your real estate agent should have a team of investor-friendly lenders experienced in financing investment property purchases and consulting buyers on the best loan options, down payment requirements and loan terms to achieve your goals. Lenders now have more stringent credit and down payment requirements, thus making this a critical step before hitting the pavement to see homes.  Start looking for your first, or next cash flow property.  This is the exciting part! Your real estate agent should be diligent in finding homes that will yield a positive rental cash flow within your loan approval amount.  This home search process should include analyzing recent sales comparables to determine the current market value and appropriate offer price, and recent rent comparables to determine how much you can charge for rent.  With this data you can perform a quick rental cash flow profit analysis by using this formula:  Monthly Rent – Monthly Debt Payment (principle + interest + taxes + insurance + pmi) – HOA/Condo fees – Other Recurring Costs (property management fees, maintenance) = Monthly Rental Cash Flow Secure a tenant. Once you have purchased your investment property your real estate agent should help you secure a tenant, if needed, so you can start receiving your monthly rental cash flow.  Plan to hold the property long-term. Wealth accumulation in real estate historically comes from significant equity appreciation that occurs over time. 
Note: For tax and legal advice concerning real estate investing matters consult a tax professional and attorney respectively.

Selling A House?

Chris Parks asked:

Lease with option to buy: a lease option has a longer term than a straight option, usually running for as long as one year or longer. Some will even stretch to three years, depending on the whim of the seller. While your lease is ongoing, you can rent out the property and be in a positive cash flow. The second advantage is, the property is appreciating in value. If you have a long lease option, you can then sell the property for the highest price you can obtain.

One last strategy for hot picks: be on the alert for long leases. Long leases will ensure that a property will be rented or leased for long periods of time, not just a year. Some commercial leases for example go for as long as 5 or 10 years. One example is the government. Take post offices as the best illustration. The government will usually rent space for post offices on a long term basis. If the property you are eyeing has government outlets like the post office, the automobile insurance board or the government-sponsored health centres, these buildings qualify as hot property! LOCATION!

You’ve heard about the three principal parameters in real estate? One – location, two – location, and three – location. Take that with a capital “L”. One trick in looking for that pot of gold at the end of the rainbow is to buy the worst property in the best neighborhood, NOT the best property in the worst neighborhood. This is a cardinal rule that sophisticated inventors try never to break.

If you are thinking about offering a lease option, check out: Insider’s Guide to Selling Real Estate

investing in real estate

Andrew Larder asked:

Any trip to Belize starts fantasies of owning a beach villa, or a jungle resort. There are a lot of North Americans in this English speaking, former English colony.

Belize is known for its reef, the second largest in the world, and the fantastic diving that goes with it. Even beginner divers have heard of the Blue Hole, a famous diving spot. Ambergris Caye, “La Isla Bonita” in Madonna’s song, is the main tourist spot.

Along with tourist shops and T-shirt shops, there are real estate shops on the dusty roads of San Pedro on Ambergris Caye. Belize prices can range from as low as $5-10,000 for a beach lot in Corozal Town, a sleepy border town, to much higher prices for properties on Ambergris Caye. The southern resorts like Placencia are somewhere in between, price-wise.

There is lots of online assistance available. Gringos resell their properties, and locals sell to gringos, often through real estate agencies. You can contact a local real estate agency when you are in Belize, or simply scour the listings online.

If you keep in mind the old “buying swampland in Florida” tale, you’ll realize that you simply MUST visit and see for yourself ANY property you buy. You’d take a $2,000 car for a test drive and kick the tires, wouldn’t you? Then why would you make a $100,000 purchase, sight unseen?

Oftentimes the most important part of a purchase like this is YOUR enjoyment – you can buy purely for investment purposes, but will get an additional bonus of sunshine and relaxation if you LIKE the area, WANT to travel there, and VISIT your property to keep an eye on it or stay in it.

As more and more North Americans travel, and with the ease of getting to Belize, and its English speaking, safer roots – there will be more people looking to retire and visit Belize. This should be a continuously appreciating investment with good rental prospects, if you do your home work!

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David Jacobsen asked:

When you look around, it’s amazing how many people are putting some of their extra cash into a real estate investment. Is it just that as the baby boomers get older, more of them are panicking about having enough money for retirement? Or is it just that all the reality shows on television about remodeling rooms and homes has given people the urge to remodel something?

Either way, there’s no doubt that plenty of people make good money from real estate, and so can you. But although you may have heard some of the stories about Joe Bloggs who bought a house without having a clue what he was doing, only to sell it and make a fortune down the road, chances are that won’t happen to you. As more people get into real estate investing, the harder it’s going to be to make money just through pure luck. You need to know what you’re doing to get the best results.

That’s where a real estate investing seminar can be useful. I’m sure you’ve heard the concept of modeling yourself on someone successful if you want to be successful too, and real estate investing is the same. If you can find someone who’s made a lot of money investing in real estate, learn their methods and then copy them, chances are you’ll be very successful too. Unfortunately, most people making lots of money from real estate aren’t interested in sharing their strategies with anyone. If you can find someone and get them to be your personal mentor, great.

But if you can’t find a personal mentor, then look around and find a real estate investing seminar run by someone who’s made a success of real estate investing. There are plenty of companies that run real estate investing seminars, usually because they’re trying to flog their latest development, and it’s probably a good idea to steer clear of those. Ask around, particularly if you have friends or family who invest in real estate, to see if they can recommend a seminar they’ve been to.

Do some searching on the Internet, and you’ll soon come across a number of real estate investing seminars. You can also search based on a presenter’s name, to see what other people have to say about the presenter’s background and the success of his or her techniques. Most importantly, leave your credit cards at home, so that if the seminar is mostly about selling you lots of expensive resources, you can go home and sleep on it before blowing a stack of money. After all, you want to use most of your money for investing in real estate.

investing in real estate

Marilyn Roberts asked:

Wholesale real estate investing is where you find a property that is below market value and needing repairs, then you resell the property to a real estate investor without you actually having to buy the property.

You would make an offer on the property and once it is accepted you would then sell it ‘as is’ to an investor. The investor will get the financing, buy the property, and make all of the repairs.

One thing you need to do in the contract is place an addendum giving you the right to assign the contract to someone else. This way you don’t have to apply for a mortgage, have good credit, have a lot of cash (usually $10.00 to $100.00 for a deposit) or make make repairs.

These types of deals can be made over and over in a short period of time. It is not hard to find investors that want this kind of property. They are always on the lookout for them and it is worth a fee (anywhere from $1,000.00 to $10,000.00) to them if the property will be making a profit for the investor. Sometimes the fee will depend upon how good a deal you find. The investor will look at the after repair value to determine the value of the deal.

You can find these types of investors in the newspapers all of the time or you can place your own ad. Real estate investments clubs are also a good place to find these investors. The club’s members consist of investors, hard money lenders, wholesalers, mortgage companies, and real estate companies, etc.

Although you won’t be making the kind of money you could make from flipping the property yourself, you can have fast deals with little money or work. You could build up a little nest egg pretty quickly.

Wholesaling properties isn’t for everyone but it is a good way for a beginner to get started without taking a lot of chances. You will be learning how the real estate investor is figuring the profit potential of a property and that alone is good experience to get before you start buying properties for yourself.

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