I have been told you can make some fast money in real estate. Buy a house cheap. Throw a coat of paint on it and some new carpet and you are on your way to instant wealth.
I get calls from people wanting to be investors all the time. People who want to flip property mostly, because they don’t want to deal with tenants. I can understand that I have had some tenants I would rather not have had to deal with either. But as the old saying goes: If it were easy everyone would be doing it. Now I don’t want to discourage you, if you are thinking about buying investment property, but you should know it is work.
There are some basic questions you should ask yourself before you begin.
What will the property sell for when it is remodeled?
Will the property I purchase resell fast/
Is the floor plan functional or does it contain some dysfunction?
What will it cost to repair the property?
Can I do any of the work myself?
Do I have a list of contractors or can I get a list of contractors?
Do I have enough cash reserves for the remodel?
Create a budget and stick to it. This is sometimes easier said than done. Do not over updates for the area. The appraiser is not going to over value the property just because you did, and neither is a buyer.
I have personally rehabbed several properties, rented properties and flipped properties. The knowledge I have obtained over the years does not come from seminars and books but rather life and the school of hard knocks. I have worked hard and been fortunate to find some really good deals. You can make money investing in real estate but don’t think it is like you see on late night t.v.
If you have questions about investing in real estate, please feel free to contact me at 405-213-2992 or visit my website http://www.sandiwalker.net
Patience, Patience, and lots of patience.
Short sales should be called long sales as in time requirements. It often takes many months to get a short sale accepted at the bank. However if you are not in a big hurry, you may be able to get a good deal.
The seller’s lender will need to sign off on the contract in addition to the seller. The majority of the time the lender will want to see an offer on the property before starting the short sale procedures. Local lender’s may want to determine value sooner than a larger national bank. Either way, the seller’s lender will do the following in order to complete a short sale.
1. Current owner will fill out a financial package to determine if they qualify for the short sale, including a hardship letter detailing why they need the short sale.
2. The lender will review the short sale packet. This takes time.
3. If the owner qualifies for a short sale, they will send out an appraiser to quantify the value of the property. They may also request a BPO (broker’s price opinion)
4. The current lender will use the appraisal price to determine the amount they are willing to accept on a short sale. Most of the time, the realtor will reduce or increase the list price at this time to match the appraisal price.
5. The lender will accept a net amount based on the appraisal price. (In my experience, this number has been 86-88% of appraisal price)—remember this the net to the seller’s lender after all expenses, realtor fees, etc. So there is not a lot of room off the appraisal price. Hopefully the appraiser has not over valued the property.
6. Several people at the bank will need to review the short sale offer and sign off on it before turning it over to a closer to set the closing up.
7. The new buyer will need to make sure their lending requirements are met. I do not advise buyers spending money to do inspections or appraisals prior to the current bank’s approval to sell. Once that approval is given, the rest of the sale works mostly like a regular sale.
Just remember that these homes are sold as is and where is and may have some repair requirements.
If you have real estate questions please feel free to call me at 405-213-2992 or visit my website http://www.sandiwalker.net
Borrowers who are months behind on their mortgage and facing foreclosure may be surprised to learn that the lender or guarantor of the mortgage may be willing to pay you to relocate following a successful short sale.
Some have asked why they would do this after not receiving payment for many months and possibly a year or more, having forced insurance put on the property and keeping the property taxes current.
Until the borrower pays off the mortgage, the bank is truly the owner of the property which it holds as collateral for the mortgage note. If the property is damaged by a irate and irresponsible borrower or by vandals, the property becomes worth less than it might have been had someone taken care of the property. Properties that are left vacant without utilities are more likely to become vandalized or have squatters move into the property.
If the borrower is not paying the note, the bank in time will get the property back in some condition and they will sell it. So it is sometime advantageous for the bank to entice the borrower to stay in the home, maintain it, and keep the utilities on in the property while trying to sell the property.
Last week, an FHA borrower received $750 from HUD as relocation assistance on a closing I did. This week I have a VA borrower who will receive a $1500 relocation incentive. I have heard of larger amounts to some borrowers in dire straits. While no realtor can promise that you will receive money for selling your home short versus allowing it to go to foreclosure, it may be possible to obtain these funds. More importantly, selling a home short most offend allows the borrower to have the deficient money forgiven.
If you are in a position where you can no longer afford to pay your mortgage, please call and let’s see if I can help you avoid foreclosure.
Please feel free to contact me, Sandi Walker, at 405-213-2992 or visit my website http://www.sandiwalker.net with all your real estate questions.