Texas |Home Loan | Mortgage | Refinance

Archive for May, 2010

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.

Romeo Burke: Musician songwriter Music producer Video clip -Producer Loan Debt Advisor 38 Years Single living in The Netherlands Europe\ Florida USA born in Suriname South America;

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With increasingly more people applying for mortgage modification loan, it is more important than ever to ensure that your application is completed properly in order to give you the best chance of getting approved for the mortgage modification loan that will prevent you from losing your home. So what should you do to give yourself the best chance of having your mortgage modification loan application accepted?

1: Firstly you should really familiarise yourself with what will count as a hardship for your lender. Some of them have more specific requirements than others and you would be well advised to check out your own lender’s guidelines before applying. Most accept the likes of unemployment, the closure or loss of a business, the death of a financially contributing member of the household etc etc. But remember it varies and check with your lender specifically.

2: Your hardship letter is critically important. Remember to be honest and frank about how you came to be in this financial situation and do so without feeding them a sob story. Be entirely honest and reread it. If you have even made the tiniest genuine accidental mistake on there it could throw doubt over you whole application. At the end of your letter, sum up by declaring your intention to stay with your lender in resolving the issue. They want assurance that they will get their money back.

3: Enclose the documents you lender can use to verify your claim, such as bank statements and tax returns. Submit everything together if possible. This will make the process more efficient for the lender.

4: Be realistic. Explain what you can afford to pay and aim somewhere between 32 and 40% of your gross monthly income for each monthly payment. If you are unrealistic and unreasonable, the bank will not be prepared to negotiate with you.

To find out more on how you can qualify for a Mortgage Modification Loan, all you have to do is Click Here

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Payday loans and no fax payday loans are much known these days. Most ads on radio, television, newspapers, the Internet, and even the email are dealing about these stuffs. And, if you have ever walked by a company in your neighborhood advertising “check cashed here”, I am sure that you may have noticed advertisements in the window promoting “pay day loans” and “no fax payday loans”. Having noticed it, you may have wondered what no fax payday loans were. After all, what do faxes have to do with loans? Why would such stuffs be something to advertise? Are there some benefits of no fax payday loans?

Payday loans, as you may know, are just short-term but very high-interest loans that are means to protect you against debts or between paychecks. Most of the companies even considered them as the peoples’ cash solution. And, they are commonly intended to be cashed instantly and then be paid off within a month in some instances.

In such world of payday loans, the no fax payday loans act as a logical result of the growing industry of payday loans. As several developments were made in the world of payday loans, most of the companies now are working and striving to provide the people with the more effective and convenient financial service for many customers and no fax payday loans are the main solution.

With the advent of computer system and internet, most of the no fax payday loans usually take place entirely over the web. In here, you and the other borrowers are needed to fill out an online application for no fax payday loans. Once the application is approved by the no fax payday loans management, you are now given the chance to get the loan amount, which typically less than five hundred dollars, at your local ATM. It is interesting to know that the usual advantage of no fax payday loans are faster processing times and the ability to apply for home. Others have claimed that at no fax payday loans, there is actually no need to run to your local pay day loan company just to apply for a certain loan. Therefore, the customers can greatly apply for no fax payday loans at any time of the day and night. And, there are some times that companies waive processing fees or lessen fees for no fax payday loans, which then can be a especially nice highlight since the payday loans are usually high-priced loans.

However, just like payday loans, no fax payday loans also carry some burdens. One of those is mainly the fact that no fax payday loans sometimes carry hidden fees, so you need to examine any fine print carefully before applying for one. And since the no fax payday loans carry a slight burden for the lender, they often need a higher income than the traditional payday loans. Therefore, extra care is also needed.

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