Posts Tagged ‘forclosures’

Some Truths About Foreclosed Properties

Monday, July 26th, 2010

When you say the word FORECLOSURE, most people have two popular notions about foreclosed homes: that they are being sold at bargain prices and that they are only located in crime-ridden areas. The former is not always true while the latter is definitely not always the case.

The price of foreclosed properties can be 30% to 40% cheaper than their current market values but that doesn’t necessarily apply to all. Most houses will likely be sold at about 5% less than their current value. This is because banks decide the listing price with respect to the condition of the property. Many factors including, but not limited too, the location and the type of neighborhood where the property is will also affect the listing price of the property. A common notion that a foreclosed home can be bought cheap, only requires a little fixing up, and can be sold at a hefty price is a big misinterpretation. Well, some properties may fit this idea, but this is no longer the norm for this type of real estate investment.

For foreclosed property buyers, this means one thing: in order to get the best deal, you really have to put in the time and legwork in finding the best property on sale. One thing you have to remember if you are considering this kind of investment is that banks will definitely not sell off the properties at cheap prices in ALL situations. They know the value of homes that they have foreclosed and they don’t treat them as liabilities, but as assets. However in many cases the lenders are holding A LOT of “assets”…so you may indeed get a lower price.

What about those properties that sell at bargain prices? Most, if not all, require major repairs or have eviction issues, or both. Electric and plumbing issues are the most common across the country. Followed closely by wood rot and decay. These handyman specials can be a great deal IF you can do the work.

Foreclosed properties can be found everywhere and can come in any form, shape, size, and price. This is contrary to the popular belief that foreclosed homes can only be found in crime-ridden areas. Meaning, finding a country villa, log cabin, beachfront home, and prime property among many others are within your viable options. But you should never, ever expect that these properties are sold dirt cheap. As the old saying goes, “you get what you pay for.” So, if you are eying a premier foreclosed property, just expect to pay the real cost or slightly lower than its current value because in the end, saving you from the trouble of repairs and dealing with the bad neighborhoods are really worth the extra bucks.

Doc Schmyz has invested all over the US and Canada. He owns a free website that shares Real estate investing information for all over the US. Find real estate information by state

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The Value Of A Home Inspection Prior To Buying A Investment Property

Monday, April 5th, 2010

Most fixer uppers are homes that usually need a number of home repairs that generally do not require special knowledge or expertise on your part, as the homeowner. Fixer upper homes can be excellent bargains when the “asking price” is significantly lower than the current market value of other homes in the area.

Fixer uppers needing a cosmetic fix-up can be a great investment property. Most need some repainting outside and inside (paint can do a lot of wonders), floor refinishing or new carpets, some new lighting fixtures, little repairs, complete cleanup and landscaping.

If the home necessitates massive repairs such as electrical and plumbing problems that usually are expensive, it will slash your profit back or worst, eliminate it.

Before purchasing any house , a professional home inspection should be considered because the inspector can provide you an accurate idea of what existing problems the home has and what repairs are needed as well as an approximate repair cost.

Here is a short list of common issues found during a home inspection.

Roofing

Insulation

Plumbing system

Electrical system

Central heating

Central cooling

Water seepage

Structural These defects requires expensive professional repair especially when talking about the value these repairs will return upon resale.

Most often, major defects go unnoticed because fixer upper buyers usually can’t see the inside workings, hidden out of view or behind walls. When buying you a fixer upper you need to turn over a few stones in order to find out the information you need to be aware of.

A broken “heat-exchanger” in the heating system, faulty wiring, termite damage and safety and health problems like lead accumulation, water pipes as well as asbestos insulation are common physical flaws that you can’t see immediately and need to be corrected before a re-sale.

Indications of these problems are as follows:

Moisture stains that can be found on ceiling and walls could mean plumbing problems.

Separations between wall and floor specifically for outer walls could mean structural problems.

Sawdust piles near woodwork or wall corners can be an indication of termites.

A home inspection from a professional

Professional home inspections can cost about 200-325 dollars depending on the kind of property, square footage, etc.

When hiring a professional home inspection of fixer upper houses, it is wise that you obtain quotations first from several competing companies. However, the lowest bidder shouldn’t be immediately given the job; aside from the price, you must inspect the “quality of service” they offer as well as the company name. It is important to choose a company with a good reputation.

Several home inspection companies have some kind of computer-like machines which can supply inspection reports and descriptions instantly then the company adds their “pre-printed” sections which are very helpful for you in order to understand the fundamentals of repairing, fixing and replacement.

The most important part of a home inspection is that the inspector gives an entirely impartial appraisal and assessment of the house, inspecting everything carefully from electrical systems, plumbing to structural to make certain that the fixer upper house you are purchasing is sound.

Professional home inspectors can make certain that all major systems (air conditioning, plumbing, furnace) are working properly or they can pinpoint defects to you because these kinds of repairs will cost you a great deal of money.

However not all major repairing problems automatically indicate that you shouldn’t purchase the fixer upper home, because they can and should be added in the home’s price negotiations.

A good fixer upper seller or realtor will and can factor in said considerations or concerns and you possibly can purchase the home for even less if you put it clearly that you will be responsible for the repair or replacements. Just be careful that you don’t get tricked. Never take anybody’s word that the plumbing, the furnace or the electrical have no problems at all; you have to make certain.

Sometimes walking away from a “deal” is the best option. Perhaps it is due to location or a disagreement on price with the current owner. (Repair costs are almost always a sticking point)

In order to really make a good investment in a fixer…you need to find the hidden “information”. Most of the time a seller will not go out of the way to tell you. In some cases it isnt done out of spit…it might be information the current owner isn’t aware of themselves.

Doc Schmyz has done real estate deals all over the US. He built a free website shares Real estate investing information for all over the US. Find real estate information by state

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Foreclosed Homes…How To Find The Deals

Thursday, March 11th, 2010

During a down real estate market, finding foreclosed homes can be easy but you can also find foreclosures in a strong market. To make your search easier, here is a list of the places where you can start your search for foreclosures.

Auction Houses

Many of the auction companies hold a large inventory of properties. Since the bidding is relatively quick and houses can be sold in a matter of seconds, prices of real estate can go over market value but you can also find really good properties in their inventory.

Web Sites Of Major Banks

Major banks maintain a good list of foreclosed properties. Some maybe listed on the homepage of the company website. Visit bank web sites and check out the foreclosed properties listing, or look for linking to the company REO (Real Estate Owned) department. Sometimes you will have to do some digging…but you can find information that will lead you in the direction your looking.

Online foreclosure companies

There are several online companies that specialize in listing foreclosure real estate. Some charge a one-time membership fee to anyone who wishes to access the list of foreclosed properties. The good thing about signing up on web-based foreclosure companies is that once you are in, you can get a wide selection of foreclosure properties available nationwide. More often then not, you can opt in for a email update on real estate in areas your looking at.

Real estate agents

Due to the internet, most agents are either maintaining personal web sites or are under real estate companies that sell foreclosed properties. Major cities have real estate offices where you can inquire into possibility of acquiring foreclosures. A lot of agents are dealing with large volumes of foreclosed real estate these days. Seek out and ask for a agent who has a track record of dealing with both foreclosure and short sale real estate.

Real Estate “Bandit” And Listing Signs

You don’t need to look anywhere else because you can find foreclosure signs around your neighborhood. Homes with signs like foreclosure, bank repo, and bank-owned are for you to consider. These signs contain address and contact information of the agents you can visit or call. The best thing about considering homes with real estate signs is that you can actually check the condition of the house on-site. And with one phone call, you can arrange with the agent the date when you want to see the interior of the house.

Government Agencies

Fannie Mae foreclosure homes, Housing Urban Development, Small Business Association, Department of the Treasury and other government agencies have a list of real estate properties for sale. Usually, when buying a house from these agencies, you are required to acquire the services of a real estate broker or personally submit an offer. Go to any of the government agencies web sites for more information.

Doc Schmyz has worked with investors all over the US and Canada. His free website shares Real estate investing information for all over the US. Find real estate information by state

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The 3 Tools EVERY Real Estate Investor Needs

Friday, June 5th, 2009
by Doc Schmyz

“Doc what advice can you give me that will help me with investing. What tricks of the trade or inside tidbits can you share with me?? ” My response is normally…”What is in your tool box?” Let me explain what this question means exactly

OK…Hey Doc..what do you mean “Tool Box”. Okay…let me explain it ad tell you the 3 important areas that make it up.

1)In your head tool box: This is all about how your thinking process works when it comes to investing, and more importantly how open minded you are about investing information. Are you willing to think outside the box in order to look at investment opportunities or must the investment fall within a cookie cutter method you having? In your head means you need to read books, articles, partake in discussions, and basically interact with that big grey hunk of goo that is in your skull.

It is the resaults of the information you have taken in about investing.

THINK ABOUT THIS: Every book store has some vast collection of books on real estate investing. You should take the time to add them to your reference library at home. Why? Because if some guru writes a book on RE investing that sits on the national booksellers ten best for 35 weeks…what do you think the chances are some one you will deal with has read that book? If you know what factors some one uses to make a decision…you have a better chance of influencing WHAT THEY DECIDE.

2)Your on-line tool box: Most investors use the web daily. Its a great information source, but most investors also have tunnel vision when they are on the web. we get stuck using a few websites that we think are the best at that will cover all our needs. WRONG answer. This causes a type of blindness I call “INFO INPUT SHUT DOWN”.

How do you avoid the INFO SHUT DOWN…easy…open your tool box to get more tools/ info.

Just go to the free email server of your choice…create a new email address that you will use to collect email updates/newsletters from various websites. then go thru them at your leasure.

Once your on a email list I suggest allowing a few weeks before opting out of it. Just because it doesnt give you the “diamond in the rough” on the first email doesnt mean the newletter your getting is worthless. Newletters to look can originate from RE investment clubs, Blogs, News sites…etc

I ,myself, avoid most ad based emailing lists. however, that doesnt mean that all of them are a waste of time. review a few and decide for yourself if they are worth keeping.

My favorite online tools/sites are the ones that cost me very little to use/buy or better yet are free to me. I love to find good resource sites. ( I admit freely I normally link them to my own) A good web tool is a great thing to find. Im not refering to another mortgage calculator…I mena that online tool your just dying to try out. When you find them…bookmark them.

3) Physical tools. tools we would use in the field. this can be anything from a lap top to a great flashlight for crawling under a house. (I know a ton of investors who get “EYES ON” when it comes to real estate. One of them keeps a jumpsuit in his trunk just incase he needs to dive under a house to check the foundation…by the way…the man is a millionaire several times over and is a very young 64 years old.) These are the tools we need when we need them..I am a huge fan of “dont fail me tools”. Flash lights, a good go by list, circut tester, actualy mortgage calculator…etc.

Thats about it. so go build your toolbox. pdate it often. Use it daily…and happy investing.

About the Author:
Doc Schmyz has invested all over the US and Canada. His free website shares Real estate investing information for all over the US. Find Real estate investing information by state

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3 Easy ways to a better credit score.

Thursday, May 14th, 2009
by Doc Schmyz

It used to be that “people” made decisions about your credit worthiness. You knew your banker and your handshake was all the collateral you needed. Those days are long gone, and now a single number - your FICO score - determines your credit worthiness.

We can talk about several ways to review your credit but to keep it simple we are going to focus on the credit model created by Fair, Isaac Company. Better known as FICO.

Your FICO credit score can be used to determine your interest rate and how much credit a lender will give you. So taking care of your score, and keeping your credit clean will save you money.

Preserving your FICO score, and improving it, is not difficult, but it may take time. Here are some tips to maintain and improve your score, based on three credit situations.

FIRST: Obtain a Credit History

You may not have a credit history for several reasons. Maybe you?re a student, maybe you pay all your bills with cash, maybe you have never needed a loan for anything. All this will have an effect on your history.

An easy way to improve your credit history is to get a loan and pay it off onetime. A loan such as a car loan (also known as an installment loan) is generally looked at as more important, and given more value, then a credit card loan.

A second idea is to take a sum of money, let?s say $1000, and put it in to a 6 month CD at a bank or credit union. Then you in turn go and get an installment loan against the first CD as collateral. The final part of this step is to take your new loan and repeat the process 2 more times at a different bank each time.

In the end you have 3 loans. Pay the minimum payments for 6 months…then cash out the CD’s and pay off the loans in full. Now you have a credit history.

SECOND: Keep your credit history clean.

Ok…now you have a good history. No major debt…now to keep the FICO as high as you can.

Make sure you don’t close your old accounts. (Unless of course they charge you a fee of some sort to keep it open.) Part of your credit score is based on the amount of credit available vs. amount used. If you close old accounts you may impact this part of your credit.

Another thing to be aware of is how you manage your money. Here?s the scenario: you have a $2000 credit card. Every month, you charge about $1800 to that card. And, every month you pay it off. But here’s what happens - your credit card company reports your credit information monthly to FICO. However if they report it on the day before you pay it off…the credit agency sees you carry a balance every month. If you can try changing the days you pay off your credit card.

THIRD: Repair Your Poor Credit History

Ok we all at some point have poor credit history. However you can improve your score. It takes time but can be done. If you?re really unsure of the steps you need to take contact a credit counselor. You can find several good services offered online.

The FICO score is most affected by your credit history. To repair a low credit score start paying your bills onetime. In order of value you need to pay your Mortgage, Installment loans, and last your credit cards.

The next largest portion of your FICO score is based on how you use credit. The fastest way to improve this is to pay down your credit cards.

At the end of all this, make sure you review your credit report. Get one report from all three credit agencies. Read every page. (I know it reads like stereo instructions in Greek) Look at the entries and call and contact the creditors to have them remove any errors.

Your FICO score is an important part of your financial life, and using these strategies may help improve your FICO score. Before making any drastic changes to your finances, consult with a financial advisor.

About the Author:
Doc Schmyz has worked with investors all over the US. He built a free website shares Real estate investing information for all over the US. Find Real estate investing information by state

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Where to look for foreclosures

Thursday, May 14th, 2009
by Doc Schmyz

In a down real estate market, finding foreclosed homes is easy, but to make your search easier, here is the list of the places where you can find foreclosures.

Auctions

Auction companies hold a inventory of properties, sometimes selling as much as 100 homes or more in just 1 day. Since the bidding is relatively quick and houses can be sold in a matter of seconds, prices of real estate can go over the board but you can find really good properties in their inventory.

Bank Web sites

Most major banks maintain a list of foreclosed properties that they now own. Visit bank web sites and check out the foreclosed properties listing.

Online foreclosure companies

There are a few companies online that specialize in selling foreclosed homes. A small,one-time membership fee is charged to anyone who wishes to access the list of foreclosed properties. Once you join you will normally have access to a list of property from across the nation.

Buyers agents/Real Estate Agents

These agents are either maintaining personal web sites or are under real estate companies that sell foreclosed properties. You can search them online or browse through yellow page listings. Major cities have real estate offices where you can inquire into possibility of acquiring foreclosures.

Real Estate Signs

You don’t need to look anywhere else because you can find foreclosure signs around your neighborhood.These signs contain address and contact information of the agents you can visit or call. The best thing about considering homes with real estate signs is that you can actually check the condition of the house on-site. Nothing is stoping you from walking the property to take a look to see if it is worth looking into. And with one phone call, you can arrange with the agent the date when you want to see the interior of the house.

Government Agencies

Department of the Treasury and other government agencies have a list of real estate properties for sale. Usually, when buying a house from these agencies, you are required to acquire the services of a real estate broker or personally submit an offer. Go to any of the government agencies web sites for more information.

About the Author:
Doc Schmyz has done real estate deals all over the US and Canada. His free website shares Real estate investing information for all over the US. Find Real estate investing information by state

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Real estate…the LONG TERM investment.

Monday, May 11th, 2009
by Doc Schmyz

Have you heard these “bits of advice”????This is not a good time to look at property investment? Now is not a good time to invest in the stock market? Now is not a good time to buy oil futures? We have heard this from every “GURU” on the nightly news. Just because everyone is screaming it…does not make it true. Now is the time to go against the flow of popular opinion and buy an investment. The risk must, however, be a reasoned one and never spend the rent money on risky things.

If you are willing to move against the flow you must seek out deals and only buy bargains. Property investment is great because you can feel the permanence of your investment and over time real estate has proved itself to be a solid money maker. Contrary to all the latter day negative gearing you need to make sure of a positive cash flow. Rents must give a return on investment. Simply put…. you do not buy at silly prices you buy only when the figures give you a return. You don’t have to love the investment…just enjoy the cash flow it brings in.

Current feelings of uncertainty in the real estate market makes buying bargains not very difficult. The foreclosure process is not nice for anyone to deal with and being a buyer at a foreclosure or mortgagee sale can make you feel very uncomfortable. These properties do have to be sold though and foreclosures will work to an investor’s advantage. Its just bargain shopping on a bigger scale.

You don’t have to work with just foreclosures. Many people got into the property investment business over the last few years with the promise of easy profits and now feel worried and insecure with mortgages over their family homes or repayment bills that will not lessen in the near future. They just want to quit the game no matter what and will take a loss to set themselves out. Just do not make the same mistake they made. Do the math!! Get a return on your investment. Lastly have the right mind set which is to buy for the long term. Property investment is a long term game and very lucrative over a long period. Just make certain that you are happy and secure with a long term investment and you will really cash in when the next real estate price surge hits. Whenever that might be.

Real estate has always been a long ” self life” type of investment. Just because the market in the last few years has offered fast profits to some…don’t consider that to be the normal exit for this type of investment.

About the Author:
Doc Schmyz has worked with investors all over the US and Mexico. His free website shares Real estate investing information for all over the US. Find Real estate investing information by state

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Foreclosure:Working with your lender to avoid it.

Wednesday, April 22nd, 2009
by Doc Schmyz

If your home is on the verge of foreclosure or you fear the chance of it, you certainly will do any possible means to save it. But the problem is how you will do it? The first step, is going to your lender and asking for help. DO NOT OVER LOOK THIS OPTION!

For some, contacting your lender at the first sign of financial problems seems to be not so good of an idea. It may be because you are embarrassed to discuss money issues to others or you simply don’t see the need to inform your lender right away of your present financial standing. But the truth is, asking for your lender’s help will save you a lot of trouble and it will could help you save your home.

People often have the perception that lenders, like banks, think only of themselves and don’t care about the future of the borrowers. This leads to the common notion that lenders show no mercy to homeowners who have defaulted on payments and will take the homes when the very first window of opportunity opens. The truth is lenders like owners will do everything they can to avoid home foreclosures.

If you miss payments for 3 consecutive months normally the lenders usually send a Notice of Default. However if you know your in trouble DO NOT wait until you get the notice to take action. Call your lender as soon as possible. Inform them of your reason of default on a payment and ask for an alternative payment schedule or temporary lower rates until your finances have recovered. You can also ask for Forbearance where your lender waives some of the penalty fees as a result of default or a mortgage refinance without going through the process of re-application. Mortgage lenders are more than willing to help you to avoid repossessing your home.

Talk to your lender, inform them of the situation, and ask for payment alternatives. Don’t wait too long before you make a move to save your home. Act fast. Understand the gravity of the situation and do something. It is your obligation to pay your mortgage but when worst comes to worst, your lender will help you keep your home. This is more true during economic downturn.

About the Author:
Doc Schmyz has done real estate deals all over the US. He owns a free website that shares Real estate investing information for all over the US. Find Real estate investing information by state

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