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News and Notes
2008-06-03 04:56:00
I wanted to discuss a few of the interesting things I have heard in the news lately. According to the AP and Yahoo! News , construction fell again for the 26th straight month. That is absolutely astounding. The number of homes that are being build has been decreasing for the past 2 + years! This is interesting because this should have been an indicator to speculators, investors, and aspiring real estate owners that this cycle of rising home prices was coming to an end. In the future, anyone looking to get into real estate should look at these numbers as the signal as supply and demand issue that was left unchecked. What any investor has to realize is that the housing market is governed by the same rules of supply and demand that any other market is governed by in a capitalist economy. Therefore, simple indicators like decreasing production and increasing supply signal a slowdownh in the market. This is the same in manufacturing and the same in any other kind of market that is heard o...
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Lenders Not Helping The Crisis
2008-05-29 08:03:00
CNN and sfgate.com reports that many lenders are having a hard time conducting short sales and helping those people facing foreclosure get out of their loan. For those who are unfamiliar with the term "short sale"; this is a situation in which the borrower wants to sell their house to get out of a loan they can't afford so they take an amount that is less than what is owed on the loan and asks the lender to forgive the rest.What makes it difficult for these short sales to happen is the way the debt from these mortgages are structured. Most of the debt from these mortgages were converted to very sophisticated securties (mortgage backed securities) that investors trade on wall street. Banks and other lenders thought it was clever to convert these high risk mortgages to securities and pass the risk on to investors. Unfortunately, in the aftermath of the mortgage crisis, borrowers trying to get out of these mortgages are having a difficult time because their mortgage is owned by severa...
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Who's To Blame?
2008-03-07 17:30:00
Recent reports show that foreclosures have hit an all time high in the US. According to the mortgage brokers association and CNN, nearly one million people face foreclosure on their properties and many more are falling behind on their payments. Many are seeing their homes worth more than the mortgages they pay for them and are just walking away. The increase in foreclosures will only exasperate the problem adn lead to increased foreclosures. This is good for speculators and investors but is really hitting the economy hard.Now congress is looking for a scapegoat. Who else than the CEO's of these mortgage companies and financial institutions who make eight (or nine) figures while everyone else is losing their homes. Sure, their lending practices did cost a lot of people their homes and their credit, but Congress is diverting your attention from the real truth that lawmakers should have done something to regulate the industry. It went unchecked for to long, too many lenders were lendi...
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Presidential Candidates Stance on the Foreclosure Crisis
2008-02-23 23:14:00
The presidential primary campaign is in full swing and up next are the Ohio primaries. Many of the voters there are deeply concerned about the foreclosure crisis and knowing the plans of the future presidents may impact your investment strategy for years to come. Knowing their stances and how they intend to deal with the mortgage crisis can have a significant impact on real estate investing for the future.The candidates that are left which have a viable chance for the presidency at this point in the race are Hilary Clinton, John McCain, and Barack Obama. Below is an analysis of each of their plans:Obama: His plan includes the formation of a 10 billion dollar fund to help people who are in danger of losing their home due to the subprime crisis. He also wants to educate people and encourage more disclosure from Lenders. Many people got into these loans without realizing the consequences of the Adjustable Rate Mortgages and then ended up losing their home. What does this mean for inves...
More About: Presidential , Foreclosure , Candidates , Crisis

More great article about home foreclosures
2008-02-16 21:34:00
I have read some really great news articles recently about the foreclosure crisis. The Real Estate Journal had one here http://www.realestatejournal.com/buysell/ tactics/20080213-evans.html that discusses the do's and don'ts of purchasing a foreclosed home. This is a great article because it advocates a relatively conservative investing strategy. It insists that because there are so many savvy investors out there, the best course of action is to be safe and purchase a REO from a lender. These are homes that have been repossessed by the bank. These home are available for about 85% of the market rate for homes, and it is much easier to do your research and inspect the home. Going through a lender is a much safer bet when looking to purchase your home.MSNBC reports the amount of homes sold last month reached a 20 year low in California. Now, I certainly don't advocate trying to "time the market" but there are enough indicators out there that can provide some idea as to the general di...
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Buying "Subject To"
2008-02-03 18:20:00
I am reading a book entitled, "Making Big Money Investing in Foreclosures" by Peter Conti & David Finkel. I am trying to read more about this subject but every book I read, it seems like they are trying to sell me something. I was especially skeptical when the first chapter of the book reads: You Can Earn Up To An Extra $100,000 This Year In Foreclosures. I have heard that it is a good rule of thumb to be wary of claims or promises with a dollar amount attached.This one chapter however, talks about a situation in which you can buy foreclosures with virtually no money down (which is particularly interesting to me). It is called buying subject to existing financing and he has a narrative that goes something like this: -A seller wants to just "walk away" from a house -You, buyer, know this and want to help -You offer to buy this home subject to existing financing; seller deeds you the property for a small token payment. -The seller is no longer burdened by t...
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Reals Estate News and What This Means for Home Investors
2008-01-24 08:06:00
The housing market looks very grim for the average home owner. According to MSNBC, the median home price in California has dropped 15% from this point last year. A fifteen percent drop in one year on any investment is a very poor year, but in a market that is historically more stable, this is an enormous drop.As a result, many homeowners are paying down mortgages that are worth more than the house is currently worth. This leads to a vicious cycle of borrowers walking away from their homes becuase they simply aren't worth what they are paying.MSNBC also reports that new home building has dropped approximately 25% percent from this time last year. Home s and real estate are a market, which are drivien by supply and demand. When demand goes down, the supply rises. The huge wave of foreclosures have also increased the glut of homes that are on the market. Builders simply can't move the homes fast enough to justify building more.This last week, in response to all the bad news in the med...
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Investment Strategies
2008-01-15 22:36:00
There are many different strategies one could use when investing in foreclosed property. I want to discuss the possbile pros and cons to the various strategies that are out there.Speculation: This is used to describe investors that purchase homes they believe will go up in value in the near future just by the location of the home and the current market activity.Pros - This strategy has the potential for huge gains. A few thousand dollars can be worth a hundred times that if you make the right decision as to the location of the property. It also typically doesn't cost as much to get started as investing in an area that is already established.Cons - Speculation is based very much on luck. This not a good strategy because there are many risk factors to consider. You also stand to lose everything if you bet on the wrong property. A wrong guess could ruin you with this strategy.Flipping: This term is used to describe a situation in which you purchase a property at a bargain with some ve...
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Sources of Information
2007-12-29 09:50:00
One of the most frustrating things about real estate investing is the limited access to information. Most websites that offer comprehensive coverage of real estate investing or bargains are pay -to-use sites that cost 50 dollars a month. Most of the websites that offer free information are for a one week trial and then if you don’t remember to cancel it is fifty dollars a month as well. I have done my best to compile a list of sources that offer some really interesting material regarding real estate investing, foreclosures, etc. I will use this information to compile a list of foreclosures in my area and perhaps you can do the same for other investors in your area.The County Clerk’s Office – This has to be at the top of the list of sources to find foreclosed homes. All notice of defaults are filed within the respective county and are public knowledge. This is the first and most reliable source of information. Essentially, this is where websites like Realtytrac and others compi...
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REITs
2007-12-22 08:29:00
One interesting way of investing in real estate is through investment vehicles called REITs. These are Real Estate Investment Trusts and these are companies that specifically invest and run profit providing real estate. Many are listed on the New York Stock Exchange and can be purchased as one would stock in a company.This is interesting because many discussions about investing in real estate involve real property. You find the property, you conduct your due diligence, and you begin by contacting the present owner. This method of investing in real estate does not involve real property directly; however, there are many benefits.The first benefit is that you do not need the massive initial sum of money to begin investing. Many properties require a large down payment, or in the case of foreclosures, requires the entire purchase price of the home up front. With REIT's, all you need is enough money to purchase one share of the REIT and you have invested in real estate.The second benefit...

Sheriff's Sales
2007-12-17 17:20:00
I want to talk about sheriff's sales. Sheriff's sales are yet another way to purchase property at a huge discount. The rules for such sales differ by county so check with your local sheriff's department in order to find out if they do sales and where they have postings. Below are the rules for the Santa Clara County Sheriff's department in California. They have postings for all sorts of things they have seized and are auctioning off, including homes/property. The listings are right below the rules.1. If you are the highest bidder, you must be prepared to pay in cash, certified check, or cashiers check. Personal Checks, company checks, travelers checks or money orders are not acceptable.2. If you pay by certified check or cashiers check then make check payable to Santa Clara County Sheriff’s Department. You may not endorse a check payable to you, or anyone else, over to the Sheriff’s Department3. The highest bidder must be prepared to pay the full amount of his/her bid when: ...
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Purchasing Homes in Pre-Foreclosure.
2007-12-16 19:15:00
The foreclosure process begins with the notice of default that is logged with the county clerk. From that time until the auction, there is a three month period in which you may purchase the home. Many investors will search these properties from the notice of default, through to the end of the auction. Once that notice of default is logged, it is time to develop a strategy for how to contact the homeowner for a possible sale.The first is to do your research. Make sure the home has no additional liens. This is important because you do not want to be responsible for someone else's loans against the property or unpaid taxes, etc. Determine the condition of the home. You may have a local real estate agent go around and take pictures of the property and perhaps do some of the research on the home for you.Next, you want to contact the person who currently owns the home. Many investors will write a form letter and they will do blanket mailings to all of the homes they deem as potential inv...
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REO's
2007-12-14 02:44:00
Tonight's Article is on REO's. As mentioned in the previous post, a REO is a Real Estate Owned property. A person has purchased this home, defaulted, and has been put up for auction. If no one bids at auction, the house goes back to the lender and is put up for sale.Banks do not want these properties. They are not making money for the lending institution because there isn't a person paying interest on a mortgage for the property. Therefore, the banks oftentimes will put these homes out on the market and sell them for less then the market price.You may contact a lender and ask for a list of properties in your area but this can be an arduous task. Many times you will be transfered to and from different departments and may spend a lot of time on hold.I have done a lot of searching for these properties and you may find them by going to many of the largest lender's websites' and typing in REO. Many companies such as Citibank, Countrywide Financial, and Wells Fargo have extensive li...

News and the Foreclosure process
2007-12-13 06:39:00
The BBC News reported today that in response to the credit crunch felt by many of the largest commercial banks, the FED, Bank of England, European Central Bank, and the central banks of Canada and Switzerland are teaming up to auction loans off to many of the commercial banks that have been hit hardest by the mortgage crisis.Because so many of these commercial banks lost billions of dollars, banks are skittish about lending money, especially between other financial institutions. This is dangerous for the economy because banks lending to each other is one of the primary ways that money circulates in capitalist economies.Tonight, I wanted to discuss the overall foreclosure process in California. The foreclosure process is pretty similar overall but please consult your states statutes regarding home foreclosure. The process starts with borrowers who are late on their payments to the lender. Technically speaking, they have breached their contract with the lender. The lender may file wha...
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First Blog
2007-12-11 07:51:00
The housing market is in bad shape. The largest mortgage lenders, such as Countrywide Financial, Citigroup, HSBC, and Washington Mutual have written off assets in the multibillion dollar range and are even beginning to lay off workers (http://news.bbc.co.uk/2/hi/business/7137 708.stm). The crisis has not only extended across even the most prosperous states in the union, it has also affected international companies, such as the Swiss investment bank UBS.Individual owners are feeling the backlash as well. The Associated Press just reported late last week that home foreclosures are at record highs across the country (http://biz.yahoo.com/ap/071206/home_fore closures.html). The BBC news service, and CNN(http://money.cnn.com/2007/12/07/real_ estate/foreclosure_hotline/index.htm?post version=2007120719) are reporting similar stories that foreclosure rates all over the country are rising at an alarming rate. This has had a ripple effect throughout the economy and has not only forced President...
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