Tag: Alameda buy my house

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Up Side Down, Right Side Up sometimes you just need to know your options

Owning real estate right now can be a tenuous proposition. Many people that we talk to bought their houses in the last 7 years or so. Unfortunately they bought their properties at the height of the real estate market. Now so many people are upside down, owing more than their house is worth. Being upside down in and of itself is not necessarily a terrible thing. If you can still make your payment comfortably and are reasonably sure that the value of the property will eventually be worth more than you paid for it, then you can ride out the market.

The problems come when you are stretching to make the payments. Sacrificing other payments to keep up with a property that you are upside down in can be a really bad for your financial future. For the last several years there has been a rash of Strategic forfeitures. People are just turn their houses over to the bank because they are so far in the hole.

In some cases they owe two thirds even twice what the house is worth. How are the banks dealing with this? They are putting up a fight and doing everything they can to stop this practice. Now I am not saying that people should just stop paying their mortgages and give the house back to the bank. For many this is not the option at all.

The Federal government has also made moves to provide relief to struggling homeowners. The red tape involved is often slow and difficult to wade through, resulting in spending a bunch of time that is wasted. I have read that less than 20% of those that submit the application are actually seeing results from the effort.

Also the requirements for government can be quite stringent. Those property owners that have been late in the last 12 to 18 months need not apply. I watched new conferences held by President Obama where he kept repeating, that he wanted to help out “Responsible Homeowners.” Personally I take offense to that. I know many people that have been late in the last 18 months for many good reasons, many of which had nothing to do with them being irresponsible.

Many people come to us, who are struggling; their house is one of those burdens that are often the straw that breaks the camel’s back. Often people make the tactical mistake of letting other payments go so they can pay their mortgage payments. The problem is that by the time they’re in trouble on their house they are not in a position to refinance or receive any help.

The best advice we can give is to seek assistance early. When you think that you might not be able to make your payment then seek help. The problem then is that many organizations will not work with you until you are 30 or even 90 days behind. It really is a catch 22.

If you find that you are in a position where you are in trouble and need assistance. Do not hesitate. Find out your options sooner rather than later. If you do that then you have more options available to you. When you are out of conventional options you can then seek out the more non-conventional options. Even though some of these options may not be well known, they are valid for specific situations.

If you find that you just don’t know what to do or even what you possible could do. Give us a call. We work in these types of situations on a day in day out basis. We work with many financial institutions and resources around the bay area. We don’t charge for a consultation. So don’t hesitate.

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The Importance of Selling Quickly in the Current Market

We know that despite the political climate and the way the media is discussing the economy and the economic outlook that we still have a way to go to get out of the mess we are in. Our region has been hit particularly hard with a high foreclosure rate and slow housing sales.   As a home owner who may need or want to sell, speed of the transaction will probably be at the top of your mind. Why? Well as you know the longer it takes to sell your property the more money it can cost you. Not just with the direct costs of mortgage, insurance, utilities, interest. But also with the indirect costs, houses that are on the market longer than 60-90 days take a price tumble. Most real estate agents that you talk with will say that if you do not have an offer in the first 30 days you need to revisit the price. So you lower the asking price $5,000, then it doesn’t sell in the next couple of weeks and they recommend another $10,000 - $15,000 to spur interest.   It is a vicious cycle. The original price was not right for the condition of the property and the market. So you need to adjust to get rid of the house. So you have to work hard to come up with the right price in the beginning and then market aggressively to sell quickly.   Let’s take an example of a house for $350,000. It doesn’t sell for 150 days. The agent asks for a $5,000 reduction at day 30, another on day 50, another $10,000 on day 75, another $5,000 on day 120. So at day 150 you get an offer for $320,000. You decide to take it. Then the house is inspected and the buyer wants you to fix about $3,000 worth of “miscellaneous” needs. So you go to closing at day 180 for a grand total of $317,000.   You factor in the cost of the closing, usually 3% and then the real estate agents commission 6%, inspections & miscellaneous fees (1%), and then finally the tax on the sale. So your $317,000 suddenly becomes $272,000 or so. Not to mention the 6 months of payments, interest, utilities and the like and you can see the result of waiting to sell the property the conventional way.   So time is a huge factor when selling. You can be much better off in the long run working with a professional Real Estate Service company that can buy your house at a reasonable price and get you out from under quickly.   So investigate your options and weigh them it could be that your “off the top of your head” thinking that you should only work with an agent could be leading you down a path of no return. Give us a call to see what options you may have. You may decide that you want to continue working with an agent is best for you but you will never know unless you have all the information.

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No Money or Credit Investing is a Crock

No Money or Credit Investing is a Crock! Why are you still teaching it? I am going to take a time out from my article series this week. I received an email from a person who got into real estate investing a couple of years ago practicing “No Money Down” investing. I have talked to him several times over the last year or so and yes, he got himself into a pickle. He watched those same TV infomercials that you and I have seen late at night. He heard about this wonderful world of real estate investing with no money down. He decided it was for him. The problem is he did not educate himself. He decided that he knew enough watching those 30 minute success story shows that he could go out and do it himself. He began by working with a real estate agent and mortgage broker. Please keep in mind that this was in a good market during 2005 to 2007. He found a typical “good deal” on the MLS that his agent “told” him was a good deal. He went to a mortgage broker who lined up a “really good” no down payment, interest only, negative amortizing loan that allowed him to roll in his closing costs. He then rented out those properties with negative cashflow. He did this several times. Over and over again, he buy my house at full retail. Over leveraged it and then rented it out for less than his monthly payments. You know, this is a real life version of the old story that if there is enough “Gross Revenue” there has got to be some “Net Revenue” around here somewhere. He was all set… All set for disaster that is! Anyway, with the market change and renters not paying on time and then having to evict them; problems started. The adjustable loans began adjusting and then the financing criteria began changing, so there were no loan programs to do a “cash out” refinance. Soon he was in a bind. Long story short… he is in big trouble. He lost his credit and properties and everything else. Foreclosure and Bankruptcy, Ouch. Unfortunately this is typical in today’s real estate market. But in his email to me he asked why I still taught “No Money or Credit” investing. Well frankly, because it works. I believe in getting trained properly to do what I am setting out to do. I don’t believe in trying to learn from a mortgage broker and real estate agent who are just trying to make commissions off of my transactions. I would rather spend $5,000 or $10,000 for training where I can multiply that same money over and over again. If I paid that same money in commissions I only learn from that one transaction. Paying someone who has been there and done that, I learn from every transaction that the teacher has ever done as well as from the people in the audience. I am not blaming the broker or agent for this transaction. (Well, yes I am… but really they did their job, which was selling their service to the investor. Not teaching him to be an investor.) The root of the problem was the investor. He didn’t educate himself and didn’t know enough about the endeavor to make money. He still sees me and other people who teach successful creative real estate investing techniques as the problem rather than he who got in over his head and listened to the wrong people as the problem.  I teach “No Money or Credit” Investing. The difference is I have yet to put a mortgage into my name and I have a solid exit strategy going into the purchase of the property or selling my property. He would have been fine if he would have took it slower, found a deal and then used his buy and hold exit strategy with the proper fixed rate mortgage that allowed cashflow. The problem was he lived in Southern California and when the market tanked, so did he. Remember there are Winners or Whiners, you choose which you want to be. Take responsibility for your own actions. He made the mess and he is cleaning it up. In a few years he will be in a position to try again. It is his choice to be a Winner rather than a Whiner!