Foreclosures against the house and flat owners have increased in recent months.
In some areas the increase was 30-40% higher than last year. Experts say that foreclosures have doubled in the last three years in many places.
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Homeowners have struggled to deal with high prices, rising interest rates and mortgages to deal with the adjustment. This is the fallout.
In recent years, mortgage lenders to help develop many new loans, afford BuyerHomes. "MORTGAGE 1.00%!" "$ 800/MO $ 300,000 FOR A HOUSE!"
Buyers came in record numbers. 100% financing and record-low interest rates have helped some people who previously could not afford, homeowners, houses and apartments have become, and that have helped spur the explosion of incredible real estate records.
In Nevada, where I live, almost 62% of all mortgages are interest only and arms. We're second only to California. However, today the interest rates are higher. Combine this with a soft real-timeReal estate market and now you have a crackdown on owners of houses and apartments that are struggling to make higher payments on adjustable rate mortgages or are forced to refinance their loans, to try to lower their payments.
For example: Suppose you have 80% of the $ 300,000 home loan in 2004 and you have an ARM at 5.000% 3 years with a margin of 2.75%. The mortgage payment was $ 1,250 per month. It was tight, but it is thought it could afford.
If the loan (margin + index) this year fitsHe could face an adjustment to 8,000%. This would increase the payment to $ 2000 per month. You can not afford to stay home.
Sure, you can refinance, perhaps your only paying $ 100 - $ 200 per month from $ 1250, but if the circumstances have changed? Such as your credit is not so good? You can have a lot of equity so that you are still ok, but what happens in a slower market where you do not win more? Or have you removed all your shares through a creditline? Or your house is devalued because this purchase? The slower real estate market exacerbates the problem.
In recent years, homeowners with loans at risk could benefit from the rising value of their homes by refinancing to take on more favorable terms. Or for sale.
With house prices stabilize or decline, the refinancing option is not available. With a vastly inflated inventory of homes on the market and a 30% drop in sales last year, the sale is not a viable option.Quite simply, the rise in interest rates and house prices falling, a disaster.
In 2003, when the market was on fire, was the amount of 30 days past due claims half of what it is today. Foreclosures are more common today and many experts believe will increase significantly in coming years.
OK, so what does this mean for you and your customers? CHANCE!
Buying a foreclosure property market is one of the best opportunities in all realRealty. It is not easy and requires a lot of work.
It is not uncommon, except 10 to 30 percent of the market value of a property in foreclosure, if you just need to know where.
Do not think this is a plan to get rich quick will be attracted. Most of the foreclosed properties to sell for less than 5% on market value. The key is research, preparation, patience and perseverance.
Experts say that investors who do best in the foreclosure market price of 30 - work 40 hours per weekit.
There are many websites that detail how http://www.realtytrac.com go to these properties and get a list of properties in default by the sales representative for your preferred title company.
There are many different stages of the foreclosure process, but two are most important to you.
The first notice-of-default (NOD) is. This is when the creditor to the debtor that default has occurred and that legal action might get notified. This is very earlythe process. Once you get a NOD probably have a couple of months to cure the default before being effectively excluded. This is the best place to try as an investor, the property with the best available discount.
The next listing is the trustee sale (NTS). This is much more serious. This means that the lender has set a date to sell your house in a public auction. As an investor you have to offer over the competition.
The margins are very tight here, and it is necessaryhave a lot more knowledge about the property, its value and potential, before moving to the front. The window of opportunity opens up investment on the day of the slope, notice that a lawsuit is pending, is filed. The window closes the day the property is sold at auction.
The time between these two events enables an investor with the owner and financier of a workout strategy or a purchase of the property from the house before the date of sale to work to create.
TimeThis window remains open depends solely on state and local laws, as well as the behavior of the owner. Most of the properties were sold in 90-120 days from first notice of default.
There are many books and websites that show how many different ways to buy pre-foreclosure and bank-owned. For the purposes of this newsletter, we start with are the most profitable. The pre-foreclosure.
Consider the best way to try and, you or your customera house with a heavy discount.
Here's what you need:
Get pre-qualified for a loan so that we can act quickly if you find a property.
Identify the properties are in arrears by one of the sites realtytrac.com favorite title or your company.
To evaluate these properties and narrow the selection based on the most possible return.
Contact the homeowner. Thoroughly inspect the property and loan documents standards.
Determine the house needs ... need quick cash or simply go out?
Discover all the privileges of property and payments that require a purchase.
Calculate your selling price and the profit potential based on current market conditions.
Negotiate with the creditor, the owner and any lien holders.
Close you do, if necessary, repaired and sold for profit!
This is much easier said than done. Remember, who slammed the homeowners with the letters from the bank> Lawyers and collectors invoice. Some may even show up at his door.
You are not alone in this idea. There are other investors as the contact. All have three ways to contact him. In person, by mail or telephone.
You have to understand, many people are upset with the amount of a deduction, so I'm not a very pleasant situation, about what you're saying that you have excluded.
We recommend starting with mailings. Leave the houseI know you are interested in their financial problem, it has a solution and as a real estate investor specializing in the houses around it. Let the master of the house in your list which will help him to stop the foreclosure, save perhaps his credit, and perhaps a little too 'extra money.
Be creative and different with the delivery! A former client of mine used a banknote of 50 pre-foreclosure every owner to send a simple note that says in effect: "I care about whatWho are going through. Here you can find help for $ 50. If you want me to call to thank me, want some of the ways I can help further to discuss. "It 'was expensive, but it worked brilliantly and I shared this with a girl of 27 years, investors with whom I work, and it has to do with success, the same thing.
After sending these letters, not too aggressive. Give the borrower a couple of weeks and then follow by mail or telephone. The closer they come to auction, to underline the urgency. Always emphasize thatWant to help.
Always be kind and understanding. This person is still one of the toughest challenges of their financial lives and are completely overwhelmed by lawyers and creditors. You need the "savior", another person he did not run.
Everything we do now is to meet to determine whether he is also a candidate for your support. When you arrive at your event, make sure that the house has all its loans, mortgages and insuranceDocuments available, as well as notes of foreclosure.
You need to look carefully to determine their yield potential. If you intend to bid on the property are, you need the ', property of the loan and the debt or lien information. It is also necessary that the condition of the property.
In combination with the market value and the standard amount, you have all the ingredients needed to make your offer. Some investors in foreclosures, even to visit the most courageousProperty in person, without an appointment. One of my investor clients are convinced to go door to door.
However, you must be prepared, as you may end up with a meeting house angry that it is not known to show that you appreciate, to be at his door. Be polite and leave if asked. Never, under any circumstances, smell, inspect or generally trespass unlawfully on somebody's property. They are there to be a "savior" did not pry.
When finally the conference iswho need to quickly assess the needs of homeowners. And 'to save me his credit? He is looking for cash? Maybe it just wants to be saved? He is on the verge of bankruptcy, there is something you fear? Will he stay at home on a rent-back until they can get their feet on the ground?
If you meet his needs, is much more receptive to your offer.
Check out the property with the landlord, as a home inspector. Use a checklist and inspectiontake your information and estimated costs of repair.
Many homeowners who were going into foreclosure financial difficulties for a while 'before giving up. This probably means that the house is not necessary repairs or general maintenance for a while 'is. Experts say NEVER to bid at this point or give the money home.
If you want the property and how you think, make an appointment to meet him again to go home, crunch numbers, analyze allCommitments and payments, and return with your offer. Make sure you factor all the closing costs before determining the price.
The owners of houses and apartments are not as likely as an expert like you. I am also very skeptical. Change the offer, once made, because you made a calculation error will not be easy due to a fault. It will probably kill your deal.
Be sure to carefully check all the privileges have been filed on the property. You want to ask the homeowner if there are otherburdens, "pop" as late as possible.
If you would be taken as a serious buyer, we must be realistic when preparing an offer. The homeowners, regardless of their situation, are not able to give away the property. They know the value of their home on the open market and may lose in front of a shop where you feel ripped off.
Experts say the typical offer is 80% or less than market value.
How to buy foreclosure homes - A Real Estate Investment Opportnuity
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