What does Short Sale Mean?

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Alot of new investors and homeowners are new to various strategies in selling a house, What does Short Sale meanand they typically ask what does Short Sale Mean? A short sale in real estate is basically the bank allowing you to sell your home for less than what you owe on your loan balance. Basically a lender will allow this if you are facing some sort of hardship, and they will want financial proof of your outgoing expenses, and a hardship letter. A bank usually takes 30-60 days to approve but its always important to stay on top of them to make sure the process is moving steadily. If the bank approves the home for short sale at a low price you better thank your lucky stars, and you should have no problem moving it immediately. There are more steps that is involved in the short sale process, so you should contact your bank so they can send you there short sale packet. So the next time someone ask’s you what does short sale mean, you will have a great answer for them. Thanks for reading and please leave your comments and feedback below, Thanks!

Transactional Funding

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Transactional FundingAlot of people get confused when they hear of the term transactional funding. So Im here to clarify what it is and how this sort of funding is used. Tranactional funding is short term funding you can request from specific funders to execute a double close on a property. This is usually requested when an investor needs to double close on a foreclosure because the banks do not allow assignments of contracts. Let me describe the steps of a double close and how transactional funding plays a part in the process.

1. I put a foreclosure under contract and I need to sell it to my end buyer. But the problem is the bank will not allow an assignment of contract to my end buyer. So in that case I have to double close. Enter the transactional funding.

2. The Bank will be “A” and Im in the middle as “B”.  I need to close with the bank first but I do not want to use any of my own money to do it, so I contact a transactional lender to let me borrow funds for a day so I can close the first part of the deal.

3. After I close with the bank with my transactional funding, I turn around and close with my end buyer who will be “C”. The funds from my end buyer will repay my transactional funder and pay me my profit from the deal.

The only drawback with transactional funding is that it includes additional fees that range from $1500 or more.  Click Here if you need to order transactional funding or a POF to get your deal rolling.

The Definition of a “Motivated Seller”

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Motivated Seller

A motivated seller by definition in real estate is a home owner that needs to get rid of their property quickly due to a situation they are facing. These people are usually desperate to sell because they are going through a divorce, have unseen bills to pay, relocating out of state or out of the country, or they are just tired of being landlords and they just want to get rid of their property ASAP because it is becoming a money pit. These reasons I just listed are a few of the most common reasons someone is a motivated seller but there are too many to name. When you find someone that is desperate to sell their home this usually equals to the investor getting a huge discount to put the property under contract and wholesale it to the end buyer for a pretty nice assignment fee. The last motivated seller I personally dealt with wanted to sell her property because it had been sitting vacant for 2 years after previous tenants left the property, and she could not handle paying the property taxes any more and she just wanted out. In this business you only want to deal with people that are highly motivated because you want to be able to put properties under contract for a low enough price so you can flip them quickly and not waste your time,and these owners are desperate to sell so they can be relieved of their burdens of the house.

Determining the After Repair Value

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After repair value

After Repair Value

Determining the after repair value of a house is more like an art and a science. It takes a lot of factors such as coming up with the repair and rehab costs, recent comparable sales in the neighborhood, and how low of a discount you can contract the property from the seller so you can wholesale it. The first thing when determining the after repair value is to get a list of recently sold homes in the neighborhood, this is also known as the comparables. The best source to get this list is from the MLS, but you can use other sources like Zillow, Trulia, etc, but use with caution. Get the average price homes have sold for, and take that price and multiply it by .65 . Then deduct the repairs, and subtract your wholesale fee and that is the price you should get the home under contract for with the seller. Coming up with the correct after repair value will be very critical in your real estate business because you do not want to come up with a ridiculously high estimate, because that will turn potential away. As a matter of fact you want to set your after repair value a little lower then the rest of the homes that sold in the neighborhood so you can get a quick sale.

Happy New Year!

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Happy New Years folks! This is my first blog post for the new year and im very excited for the success that will come to all my fellow Real Estate Investors and myself. If you havent wrote down your goals for the year I encourage you to do so as soon as possible. If it means taking an hour or two out of your busy schedule to write down what you want to achieve by the end of 2012, DO IT! If you need to jumpstart your business by mailing 300 Yellow Letters to absentee owners, get off your butt and get started writing! Time waits for no one, and neither does money. I hope you guys take action immediately, and CRUSH IT in 2012!

Marketing to Absentee Owners

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Marketing to absentee owners is one of the many strategies many real estate investors use to get leads for motivated sellers. Absentee Owners are owner of homes that do not live in the house anymore, they can live in another city, state, or in some cases another country. The reason why marketing to absentee owners is so effective is because they are fed up with the property because they do not live there and they do not want to pay on taxes anymore or property upkeep. There are many ways to find absentee owners in your area. One method of finding these leads is pulling a list of off Listsource.com or Melissadata.com. You can buy these lists for a couple of cents per lead and just do a mailing to all the owners on the list. Another way which is my favorite is to go to your city/county’s housing code violation site, and do a search of vacant houses. The code violations department issues fines and citations for houses that have trash in the yard, high grass, or anything that is a detriment to the community. Just search for the homes that are vacant and cross reference the home address in the tax assesors site to find the actual home address of the owner (this may not apply to you depending on your city) and send them a letter. I hope this information was informative to you and I am looking forward to your reply’s. Have a good day.

Need Motivation? Then Read This!

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Today im going to focus my blog entry for new Real Estate Investors or for anyone in general that needs a dose of motivation to get where they need to be in life. I know sometimes its hard to get started to get in the direction you want to go in, and im not going to sugarcoat anything it is going to take hard work and dedication. Starting out as a new investor you are going to want surround yourself among like minded people that has the same interests and goals as you do. By doing this you can bounce ideas back and forth off of other people, and they can give you tips on how to set up and start your real estate business. One tip I can give you is to attend your local REIA(Real Estate Investors Association) meeting. Networking with other investors is key to growing your real estate business. Another tip I want to share with you is to read motivational/self help books to change your mindset. Your mindset is very critical in any business you want to get involved in, because having the right mind frame imprinted in your brain will automatically set you in the right direction. One book I can definitely recommend off the top of my head is Rich Dad,Poor Dad by Robert Kiyosaki. Definitely pick it up from your local bookstore. Well thats all for today folks, I hope you enjoyed this post! Leave your comments and responses below and I’ll see you next time!

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