Real Estate Information

How I Became a Real Estate Investor


Recently I closed on the sale of two homes. They were located about a mile apart and had comparable market values. However, beyond these two similarities, the two deals were very different from each other. Let me discuss in more detail the similarities and differences of the two deals.

My business partner and I purchased both properties from families who were in preforeclosure. The leads for each property came from letters that I had mailed to families who had recently received Notices of Default. The one family responded to me within 24 hours of receiving my first letter. I met with them within two hours of receiving their phone call and signed a contract with them on the spot to purchase their home. The other family responded to me after receiving the fourth letter from me. After a couple of broken appointments and two meetings we signed a contract to buy their home. With each home we did a "kitchen table" type closing within a couple of days of signing the contract. Both homes were purchased "subject to" the existing financing remaining in place. The earnest money given for each home was one dollar.

First Deal

We began marketing the first house by advertising it in the newspaper at market value and putting signs in the neighborhood and nearby intersections. We had a verbal agreement with the seller that they would clear all of their belonging out of the house within two weeks. The house was very messy and dirty. When the sellers failed to make any progress clearing the house we went ahead with the marketing and reduced the asking price. Within two weeks we had only received a few phone calls from mostly non-interested prospects.

At this point we reduced the asking price further and changed our signs to notify the public that owner financing was available. At that point we started to get a larger number of phone calls from truly interested prospects. Our owner financed terms and the lower than market value asking price separated us from the hundreds of realtor represented homes that needed bank financing.

With the second home, purchased a month later than the first, we immediately marketed it with owner financing. When we purchased the home we stipulated in the contract that the seller had to vacate the property in two weeks or be charged a fee for failure to do so. The seller was agreeable and cooperative and moved quickly to remove their belongings from the house. The seller of the first house was still dragging their feet and the house was still a mess.

Shortly after changing the marketing of the first house, we received an offer from a highly interested buyer. This house was truly ideal for this family and we wanted to help them get into it. They offered to buy it with bank financing and we agreed to sell it to them. There was still enough time before the foreclosure auction to close the sale with bank financing.

I cautioned the buyer that he should seek a loan other than an FHA loan since we had not held title to the property long enough for FHA to approve a new loan. In case you didn't know, FHA recently changed a rule that now requires a property to be on title at least 90 days before they will approve a new loan. So guess what the buyer did?

Right. His mortgage broker and his real estate agent steered him toward an FHA loan program. Luckily, the buyer qualified for a good FNMA program as well. So I stipulated in the contract that the buyer had to gain approval for the FHA program within 5 days or else drop the FHA program and proceed with the FNMA program. Both the broker and the agent needed education on this point, which I provided in writing, and four days later the broker notified me that the buyer would not be approved by FHA and that they were proceeding with the FNMA program.

The next obstacle we faced was the home inspection. The inspection resulted in asking for several hundred dollars worth of repairs that we agreed to do. The repairs took two weeks to complete. While repairs were ongoing we ordered a property appraisal. The appraisers in our area are backlogged eight weeks but we knew an appraiser who would perform an appraisal within a week for 150% of his normal fee. Of course we didn't have the luxury of being able to wait eight weeks so we bought the expensive appraisal.

The next obstacle was to order a preliminary title search, which showed a clear title luckily. The previous owner did not have an as-built survey so we had to order an expensive set of survey documents from the county.

Now that the obstacles to closing were nearly erased and we were close to a hard closing date, we still had a problem with the previous seller. They had only moved a few things out of the house and the house was still well cluttered. They were getting around to moving out eventually but not fast enough to be out of the house before closing the sale. Their lack of cooperation and their inability to follow through with their verbal promises made it clear why they had neglected their home and let it go into foreclosure.

Since the utilities were turned off and the seller was no longer living in the home I had the legal right to declare their belongings as abandoned property and I notified them that I would move the items out for them. My partner and I spent a day boxing and bagging up the seller's personal items, and grudgingly they picked the boxes and bags up the day before closing. Whew!

Second Deal

Now, on the other hand, events with the second property proceeded much more smoothly. We bought the home, found a buyer for it within eight days, and closed on the sale eight days later.

We decided to sell the second home on a land contract or wrap mortgage with the existing financing remaining in place. We also decided to stipulate that the home had to be refinanced within two years or it would be foreclosed back to us. We did this to protect the previous seller's interest in the underlying financing. They didn't want it hanging out there for a long period of time.

Our "owner finance" signage attracted several buyers quickly. We required a large enough down payment to "cure" the loan, that is, to pay off the existing arrearage and attorney fees. We found an eager buyer who had sufficient cash on hand and a good income, but without enough time in the area to have a high credit rating. He understood the concept of the wrap mortgage and the underlying financing and we negotiated a contract with him at Starbucks. He negotiated a lower sale price by offering a larger down payment. Basically we were able to immediately receive all of the "back end" profit that would have been paid to us in two year's time when he refinanced. We received this up front in exchange for a lower sales price. It was a fair exchange for both parties.

He agreed to buy the home "as is" and to do some repairs himself. No home inspection was needed; no appraisal was needed; no repairs had to be made; no real estate agent needed to be paid; and no survey had to be ordered. The buyer paid all of the closing costs which were far less than he would have paid if he had used a real estate agent and a mortgage broker.We used a closing agent who is very familiar with transactions of this type, which she calls "unacknowledged wrap sales." Our closing agent has become a friend and has spoken at our local Real Estate Investment Club.

In summary, each of the two deals netted about the same profit, but it is obvious which deal one would prefer to do if given a choice. If I were Robert Kiyosaki I might call one deal my rich dad's deal and the other my poor dad's deal. We learned enough to make deals of the first type go more smoothly in the future but I'll take deals of the second type every day of the week.

I hope all of your real estate investing deals proceed smoothly and quickly.

*****************************
Garry Gamber is a public school teacher and entrepreneur. He writes articles about real estate, health and nutrition, and internet dating services. He is the owner of Anchorage-Homes.com and TheDatingAdvisor.com.


MORE RESOURCES:
Real Estate Articles from EzineArticles.com
05/05/2020 07:53 AM
8 Tips To Keep In Mind Before You Hire An Office Removal Company
If you are going to move your office to a new location, make sure the new space is suitable for your business operations. Before you go ahead and make the move, we suggest that you follow the tips given below. Read on to know more.
04/29/2020 09:40 AM
What Should We Expect From Real Estate, In The Near Future?
How might this pandemic, affect the real estate market, in the period, following the reopening of our economy? Will sellers, expect less, and change their expectations, in terms of price, etc? How many potential buyers, may no longer feel confortable, in terms of their personal comfort zone, making a major economic purchase, after this extended period of consumer fears, income disruptions, etc?
03/26/2020 09:22 AM
4 Real Estate Components Which Will Be Impacted
As a Real Estate Licensed Salesperson, in the State of New York, for over 15 years, I have observed, several previous, various types of markets. While, we often, think of only, buyers, sellers, and/ or, a neutral market, the present - day, pandemic, and associated, health, and economic crisis, will, most likely, have, some longer - term impacts, and ramifications, which might, permanently, change this horizon. With that in mind, this article will attempt to, briefly, consider, examine, review, and discuss, 4 specific, real estate components, which, will probably undergo, game - changing, longer - term, changes, and ramifications.
03/23/2020 10:48 AM
Real Estate in Anantapur
If you are looking to invest in real estate in India, then Anantapur is one of the best places. This is true about both commercial and residential properties. Over the years, investors realized that putting money in real estate is the best type of investment.
02/12/2020 03:24 PM
Upselling Home Inspections
Cost-conscious consumers sometimes find out too late that trying to save money on an inspection can result in an inadequate report. More often homebuyers find that the advertised fees for home inspections don't always include things like basement apartments and woodstoves.
02/12/2020 11:13 AM
Coworking Vs Virtual Office: Which One Is the Best for You?
Today, business owners and entrepreneurs can choose from multiple options as far as creating offices is concerned. They are not restricted to traditional offices anymore. The most popular options that are available to them include coworking space and virtual offices.
02/12/2020 11:12 AM
5 Benefits Of Hiring the Services of A Removal Company
Typically, when people move to another place, they suffer from a lot of stress and frustration. The same is true whether you are going to move within the city or outside. Apart from this, moving to another place doesn't mean collecting your stuff and transporting it to your new house.
01/16/2020 08:31 AM
7 Tips to Help You Get the Most Out of Your Coworking Space
Although having an office in your own home is a great idea, establishing a boundary between your personal life and work can be a great challenge. According to many surveys, employees that work in a co-working space enjoy a better experience. Given below are 7 tips that can help you get the most out of your shared working space.
01/15/2020 09:53 AM
Buyer, Seller, Agent, And Market, Have Different Perceptions Of Real Estate Value
One of the challenges, of creating a meeting - of - the - minds, when it comes to real estate transactions, etc, is, each party, often, has a different perception, of the value of any particular property! Generally, buyers under - value a potential purchase, often, seeking, a lower, than realistic, offering price. Sellers behave, quite to the contrary, often, over - valuing, what they own!
12/05/2019 02:18 PM
Pros and Cons of Buying Duplex Apartments in Kolkata
In many cases, a duplex apartment is a two-story dwelling space where one unit is placed on top of the other. Both are then connected by a common staircase. In reality, they are two separate residences with their own entrances and other features.
11/21/2019 02:29 PM
Properties in Nairobi, Kenya
Although apartment buildings have existed for centuries, apartments in Kenya have become trendy, classy, and the latest fashion that everyone wants to keep up with, and guess what? They are selling like hot cakes. As Kenya advances, the capital city, Nairobi is becoming more and more like a metropolitan place.
11/21/2019 02:29 PM
Apartments in Nairobi, Kenya
The fastest growing market in Kenya is real estate. Property development is increasing at a very high rate. People that own large houses with ample land are ready to either sell or develop their own land.
11/19/2019 01:57 PM
What's the Difference: Buying Vs Investing in a Residential Property?
Are you looking forward to starting a better standard of living? It is probably known to all that buying a new home with modern features opens the path towards a lifestyle of our dreams.
11/06/2019 01:41 PM
How Do You Know Your Home's VALUE?
Many homeowners, potential qualified buyers, etc, believe they know what a particular house, is worth, but, often, either, over, or under - estimate, its actual VALUE! Homeowners, seeking to sell their home, need to have an accurate idea, so they can ensure, it's priced right, from the start! Those, who are considering selling, should also, gain this knowledge, in order, to be certain, they are not, over - paying their real estate taxes, etc.
11/01/2019 04:19 PM
Explore a Luxurious Lifestyle With Flats in North Kolkata
It is believed that North Kolkata lacks the essential features to provide one with refined standard of living. It is true? The blog discusses the pointers that will hold up the truth to the readers about the current scenario in North Kolkata.
10/24/2019 07:23 PM
Beating The Instant Buyer
Being so close to Halloween, I thought I would write the scariest article to real estate investors and Realtors that I could think of. iBuyers are the zombies eating away at your opportunities. They are murdering growth and killing dreams!
10/08/2019 10:00 AM
What Your CURB Appeal, Says About Your House?
There is much discussion about what, we, in real estate, refer to, as curb appeal, but, very little, detail, or reasons, as to why, this is such an essential consideration, in terms of, precisely, how important, and why, this is so! We need to carefully examine, and review, what potential, qualified buyers, see, from the CURB, in order to use, this concept, to the homeowner's best avail! Although, this is important and essential, I have come, to realize, in my, well over a decade, as a Real Estate Licensed Salesperson, in the State of New York, far too often, this key consideration,...
10/07/2019 04:14 PM
Learn From Real Estate History: Markets Are Cyclical: 5 Important Factors
If we learn from the past, in a meaningful way, we would better understand, the history of real estate, should teach us, the housing markets, are, often, cyclical! There are up - markets, and down, ones, as well as periods, with a greater degree of balance, between these two. Most have heard references to buyers markets, as well as sellers markets, yet, it seems, people continue to over - react, to changing conditions, etc.
09/18/2019 01:04 PM
Is It Your Right HOME?
Since, for most of us, the financial value of one's house, represents our single - biggest, financial/ monetary asset, doesn't it make sense, to have a method/ technique, to ensure, you proceed, as wisely as possible, and consider, a wide variety of relevant options and alternatives? Qualified, serious, potential home buyers, should, consider, if the particular possibility, is the right HOME, for them. How can one do so, thoroughly, and carefully, in a focused way?
09/16/2019 09:23 AM
A SMART Approach To Real Estate
There are so many aspects, contingencies, scenarios, and differences, in real estate, it serves little sense, to seek, some, overly simplistic approach, but, rather, it makes more sense, to look at the bigger - picture, and proceed, with a SMART way/ method! Some of the considerations, should include: current economic state, as well as foreseeable future; consumer confidence; specific, personal needs; present finances; personal comfort zone; future financial possibilities; region/ area/ neighborhood, etc. With that in mind, this article will attempt to, briefly, consider, review, examine, and discuss, using the mnemonic approach, why this matters, and why, it is the wisest,...
09/12/2019 12:52 PM
Beat Them On Price
"I need your help!!!
09/03/2019 08:55 AM
Tips to Get Ready For Your House Valuation
If you take the right steps to get ready for your home valuation, it will make the process easy for the valuation expert and yourself. In this article, we are going to give you a few tips that can help you to get ready for your home valuation.
08/14/2019 08:23 AM
4 Factors Which Impact Real Estate's Future
Since no one has a crystal ball, there will always be, a significant degree of uncertainty, when it comes to trying to predict, and forecast, the future, and trends, when it comes to the housing market, etc! Although, past trends, are significant, and important, to understand, we must, also recognize, we live in an evolving world, and, everything, from how, houses are marketed (especially, the digital/ Internet considerations), to the extended, nearly, historically low, mortgage interest rates, differ, from what has been witnessed, and experienced, in the past. With that in mind, this article will attempt to, briefly, consider, examine, review,...
08/12/2019 09:03 AM
When To Sell A House
Taking the idea of trying to time the market out of the equation, how do you know when the best time is to sell a house with equity? I get this question from even the savviest investors all the time. I was just reading some articles from an experienced investor in the Denver area.
08/08/2019 09:05 AM
Gurgaon a Promising Location Exceptional Amenities and More
The millennium city, Gurgaon is the most sought-after destination for home buyers, investors, corporate homes, etc. It has easy accessibility to the national capital, Delhi. Gurgaon is developing at fast paced and is building around 12000 luxury housing units in a short time span.
08/01/2019 07:34 PM
UK Government to Crackdown on Unfair Leasehold Practices
The HCLG report on leasehold reform published on 19 March 2019 includes important and wide reaching recommendations affecting the management of blocks of flats and other leasehold property. The report recommends significant changes impacting block management agents, conveyancing solicitors, landlords, developers and estate agents throughout England and Wales.In July 2018 the Housing, Communities and Local Government Committee (HCLG) launched an inquiry into the Government's programme for leasehold reform. This followed the Government consultation in 2017 into tackling unfair leasehold practices in the UK property market.
07/15/2019 11:13 AM
Improving Seller Calls
It was a fall Sunday morning before a Denver Bronco game. I was playing fantasy football and desperately wanted to watch the pregame shows to make the best decisions for my fantasy team. There were bragging rights on the line after all, but instead of going to the remote, I went for my phone.
07/08/2019 09:51 AM
A Logical Guess: 3 Ways, Politics, May Influence Real Estate, In The Near - Term
One of the greatest, unknowns, throughout recent history, is being able to predict, and/ or determine, whether we will experience a buyers, sellers, and/ or, neutral real estate market, and, accurately, predicting, the anticipated duration! There are many factors, scenarios, perceptions, economic (local, regional, national, and international) occurrences, etc, which impact, real estate's performance, and, thus, its pricing trends. One of these factors, which is often ignored (and/ or, taken for - granted), is politics.
06/13/2019 09:18 AM
Debt Vs. Equity
As a hard money lender, I get calls daily from real estate investors wanting help funding their next project. Many of them are so focused on one way to do it, they sometimes miss opportunities to make money. It was a few months ago I spoke with an investor that wanted us to fund a deal in Denver.
06/04/2019 10:39 AM
Overturned Mortgage Rulings Creates Chaos at the Supreme Court and Bank Stock Falls
Controversial decisions made by the Spanish Supreme Court regarding the Stamp Duty payable on Mortgage Deeds. The Supreme Court overturns one of its own rulings in a shock turn of events.
06/04/2019 09:48 AM
Owning a Classic Craftsman Home in Northeast Los Angeles
NELA home architectural styles vary widely: Modern, Art Deco, Victorian, Tudors, and others. But perhaps the Craftsman residences get the most attention.
06/04/2019 09:43 AM
Real Estate Outlook September 2018
LOS ANGELES, CA. How will the United States increased tariffs on an additional sixteen billion dollars of goods impact the real estate market? China has announced retaliatory tariffs and has even decided to increase tariffs on another two hundred billion dollars of Chinese goods. There is a weakening trend due to trade disruptions. The actual impact on the real estate markets will only become fully visible later this year.
05/28/2019 09:20 AM
5 Things That Make A PG Different From Others
You can find multiple advertisements reinforcing the same old qualities of a PG. These qualities include ideal location, good transport system, security, spacious rooms, the facility of AC and the option of getting a room for yourself or sharing it according to your budget. These things are essential and very important for ensuring a comfortable stay and nobody will deny that fact. These are the things that every student or working professional will consider before finalizing a PG. Over the years, we have been forced to think that these are luxuries while they are not and consequently, we don't seek or ask anything more than these basic facilities.
05/15/2019 09:15 AM
Will We See Another Housing Bubble?: 4 Considerations
In the past few decades, we have witnessed a variety of different housing markets. We've seen buyers, sellers, and neutral real estate markets, to a wide variety of degrees. There have been periods, when it seemed, every house, sold, as soon as it was listed, at, or above, the listing price, and we have also seen, considerably more challenging circumstances.
05/13/2019 01:57 PM
The Perfect Disaster
Why trying to be perfect is a great way to fail - and how to avoid it. The best is the enemy of success! What I mean by this is so many of us are so focused on the best that we take very little action towards our success.
04/24/2019 11:45 AM
FINANCIAL DEFENSE The True Path to Wealth
"Congratulations! You play fantastic offense" This was said sarcastically by Thomas J Stanley in his famous book, The Millionaire Next Door. I have not read or listened to this book in more than eight years, but I still remember this phrase. That one, and the millionaire saying, "I drink two types or beer. Budweiser and Free."
04/23/2019 02:45 PM
BIG TAX BENEFITS? Qualified Opportunity Zones
I received another call last week about someone wanting to invest in an Opportunity Zone (OZ). I asked "Why?" and they said, "To save on taxes and make more money."
04/23/2019 10:21 AM
U.S. Real Estate Predictions for 2019
Similar as to how political pundits claim that this election cycle will be the most important in a generation, this year could be the most important year in recent memory in terms of mortgage loans and the residential real estate industry at large. (And if you believe that I have some swap land in Florida I'd like to sell you). For a variety of reasons, I have decided unilaterally to keep it short and sweet this year.
04/08/2019 10:53 AM
The Single Member LLC - Should I Use One?
Correct use of entities in a real estate investing business is one of the most common mistakes I see investors making. A Single Member Limited Liability Company or SMLLC, being the most common. In the states we work, we are lucky to be afforded the opportunity to use SMLLCs because not all states allow them.
01/30/2019 04:37 PM
Advantages of Living in a City
City life is commonly described as fast-paced. It is a life that is tangled with having a busy lifestyle such that every second counts. Despite this scenario, the advantages of living in the city still speak best about why there are still may families who choose to dwell in the urban jungle.
01/22/2019 01:08 PM
Drive for Show, Putt for Dough
Last week I shot a 97. That was my best round yet. I started golfing about 3 years ago, and I am enjoying the challenge.
01/18/2019 04:52 PM
Why Some, Who Can Afford To Buy. Rent?
Many people appear, to automatically, believe, people, who rent a place to live, aren't able to afford, to buy a home. However, many individuals, don't want to own a house (prefer to rent), for a variety of other reasons. This may be, because they are uncertain of how long, they will live in a specific area, whether they will enjoy the particular neighborhood, aren't comfortable with the unknowns of home - ownership, or don't want the responsibilities, etc.
01/07/2019 01:09 PM
How The Overall Economy Impacts Real Estate?
Many of us, who are involved, on a daily basis, with the many nuances of real estate, get so involved with buying, selling, marketing, and promoting homes, and making/ giving listing presentation, we often ignore, the many economic factors and other conditions, which impact the real estate market. Some of these factors are local, in nature, while others may be national or international/ global. Some are actual, while others are perceived (for example, belief in their job security, negative possibilities because of some action taken by government, etc).
01/04/2019 10:39 AM
Looking Ahead To 2019: What Factors Should Real Estate Examine?
Anyone, who, either, as a professional, or, simply, a curious observer, watches the real estate markets, and possibilities, must take a close look at the possible factors, which might impact, what might be trends in the housing market, as well as the overall economy. Beware, there are no guarantees, but, simply probabilities, or best guesses (also called, educated guesses)! After more than a decade as a Licensed Real Estate Salesperson, in the State of New York, I believe, the more educated and aware, a potential buyer might be, the better his chances.
11/28/2018 12:58 PM
What Does A HOME, Mean To You?
Most of us, have heard, the expression, A house, is not, a home, but, we often, pay far too little attention, to that, before we commit to purchasing a particular house. Wouldn't it make sense, if, we spent, a little more time, and effort, considering, what would make us, consider it, to be, a HOME, and what emotional, family, and personal considerations, and necessities, might differentiate between, simply living in some house, and truly, making it, a home, of our own? With that in mind, this article will attempt to briefly, review, consider, and discuss, using the mnemonic approach, some of the...
11/27/2018 12:59 PM
Financial Considerations Of Home Ownership
While we often, refer to, home ownership, as a core component, of the American Dream, it's important, for us, to take a realistic look, at the obligations, and necessities, involved, if this is, to truly be a dream, instead of a potential nightmare! Before embarking on this house - hunting, process, carefully, introspectively, objectively, examine and consider, your personal reasons, persona, what makes you happy/ satisfied, and whether, it's a good course, for you. After, you've determined, what's best, for you, and know, what you want, it's essential to clearly consider, and examine, what you might be able to afford...
11/16/2018 12:48 PM
What Should I Invest In? An Answer From The Expert
Do you want to know what is going to give you the best return on your investment? A while back, I was asked to participate in a YouTube Live video with a close friend of mine. Matt is an extremely savvy business owner and financial coach.
10/24/2018 02:54 PM
Why Is A House, Considered, REAL Estate?
Although, we, often, refer to the dream, of owning, a home, of one's own, many of us, fail to fully consider, what doing so, actually, means, and represents. to you, personally, rather than, what others, prioritize, and/ or seem to care about! One fact, which should be, important, is, a house, is one, meaningful, form of owning, and possessing, real estate, and why, this experiencing is truly, REAL.
10/18/2018 04:03 PM
Multi - Family Rental Property: Buying, Selling, Renting
Many of us, consider, whether purchasing a multi - family, rental property, is a good fit, in terms of being, a component of one's investment strategy, and process. Like anything else, a wise consumer researches, and becomes familiar with the possible, pluses, and minuses, and whether it, is for them. It is important to understand, and evaluate, the best, buying - opportunities, whether it should be sold, or if renting, is the best strategy.
10/08/2018 02:47 PM
Reasons Some Rent, Instead Of Own
Although it is generally, considered, to be the American Dream, owning a home, of their own, is not, for everyone! Although studies indicate, in the longer - run, it is more cost - effective, to be an owner, than renter, there are certain individuals, who, it is often, not for. With that in mind, this article will attempt to briefly, consider, identify, and discuss, some of the items, which might make someone, a less, than stellar, candidate, for home ownership.


home | site map
© 2006