April NewsletterWhen making offers on properties as an Investor, you will need to have your exit strategies in place prior to purchasing the property. What I mean by that is, who is your buyer and what type of financing are you going allow the buyer to use when sell the property. Knowing this will allow you to maximum your profits.

When I look at properties to purchase I always analyze the value of the property and how long I will have to hold the property before I am able to sell the property for a profit. The comparables that I use are through Realtytrac.com and also the Multiple Listing Service. Realtytrac will give me the values in the area, however, the Multiple Listing Service MLS in addition to values will provide me with how the property was sold ie; Cash, Conventional mortgage, USDA mortgage, VA mortgage or FHA mortgage. You can normally assume houses under $200,000 that many of the buyers purchasing at this price point are FHA mortgage buyers. FHA mortgages are mainly used for first-time homebuyers. The Mortgage Lender requires 3.5% as a down payment which attracts many first-time homebuyers.

What I have found in the price point of homes that are selling for under $200,000 is that 85% to 90% of the buyers will use FHA mortgages. The FHA Lender will put a restriction on the Seller/Investor called seasoning. What that means is that the Investor who purchased the property was expecting to have a quick exit strategy versus having to hold the property for a period of 91 days before they could sell the property to a FHA buyer. The restriction is called seasoning of the property. What that means is that the FHA Lender will look at the date that the Seller/Investor has purchased the property to the date that the Buyer signed the Purchase Agreement as a timeline for seasoning of the property. Let me give you an example: Investor purchased the property on March 1st and now we need to count 90 days from the purchase before the Seller/Investor can even enter into a Purchase Agreement with the Buyer. So the month of March has 31 days in it, the month of April 30 days, and the month of May has 31 days.
I would recommend that the earliest day that a Buyer can even present an offer to the Investor would be May 30th as that would be a total of 91 days. FHA does not count the days from the date that the Seller/Investor signs the Purchase Agreement but instead goes from the date the Buyer presents the offer. This is very important to know as I had one FHA buyer that was denied for a loan because they submitted the offer 60 days into the 90 days but I as the Seller/Investor accepted 91 days into the 90 days. I argued with the Lender that it was not an acceptable offer until the Seller/Investor accepted it but, FHA has their own guidelines and denied the loan anyway. They wouldnt even use an addendum to correct the dates and said that they should not even started processing it until the 90 days was up.

Therefore, when you are selling a house using the exit strategy to sell the property to a buyer using a mortgage, you will need to know what the requirement is from the Lender as to how long the Seller must own the property seasoning and add that additional 3 months of holding costs plus another 30 days to close for a total of 4 months into your profit.
Conventional, USDA and VA Mortgages will allow the Seller to own the property for a minimum of 30 days. I have heard that they will allow no seasoning through the grape vine, however, I have never flipped the house that fast that needed some rehab to test that theory. Obviously if you as the Investor/Seller was selling the house to a Cash buyer, it can close the same day you buy it allowing for a simultaneous closing. There are some conventional mortgages that will say that are conventional and you will think that you dont have to worry about seasoning but I have called and have been informed that they are mirroring FHA guidelines even though it is a conventional mortgage. What that means then is again, you have to hold the property for 91 days prior to selling the property to your end buyer using FHA financing.

Another requirement that FHA mortgage buyers lender require is that you will need to have two appraisals on the property to confirm the value. Should either one of the appraisals value come back less than the offer amount then that is the value that FHA will lend to the buyer. Once a FHA appraisal number is given to your property, that value on the home will stick to your property, NOT THE BUYER, for a period of 4 to 6 months stopping you from selling the property to another FHA buyer unless you accept the lower value.

Make sure you know what type of financing buyers will use on your house that you are flipping so that you are able to maximize your profit. Always fully disclose to your buyers lender that this is a flip house and find out their requirements BEFORE you enter into a Purchase Agreement.

Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to move through 2017 with high success and help you bring your Real Estate Dreams to Life this year!

Kimberlee Frank
www.ForeclosuresGoneWild.com
www.RealEstateJunkie.com
www.ShortSaleNegotiating.com
www.SellFastRealty.com
Like me on www.facebook.com/foreclosuresgonewild
Like me on www.facebook.com/sellfastrealty

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Mentors are for Millionaire Minds

When I first started in real estate, I spent over $250,000 flying all around the world attending boot camp after boot camp, learning all the different ways I could get involved in creatively buying, selling and holding real estate.  It seemed like it was always the same group of people flying around the world with me and taking the same training.  The only difference I noticed was that many of the people who had attended these trainings had never even made an offer on a property.  They never used the knowledge that they received and just kept on going to more and more seminars.  And as we all do, we exchanged business cards with individuals we met at these meetings.  At that time it was my husband, step-son and I attending all of these trainings.  When I got home from many of the meetings, I would get telephone calls from individuals who still didn’t understand the process of the training they received.

What I learned from all of telephone calls and working with a husband and step-son, was that everyone learned a different way.  Some people could pick up a book or listen to a CD and just do it, and let the chips fall where they may.  Other individuals were visual learners and if they didn’t go to the boot camps and physically see the teacher teach, they were just frozen.  A 3rd group of individuals had to totally understand everything from the beginning to the very end, before they would even take action.  Of course, there are also the social butterflies in the group that would do anything, but without having a teacher telling them to do it, they just froze up.  Bottom line, everyone has a different personality and you can always take the DISC test to find out what type of person you are, which is especially helpful when you are working with a spouse, family member or other business partner.

My personality is a “D”….determined, demanding at times, risk taker and able to pick up a book or listen to a CD and immediately take action.  Now my husband and step-son were a “C” personality that needed to know how everything worked from the very beginning all the way to the end.  I was working as a legal secretary for 18 years doing 1,000’s of closings which included all the paperwork, so I already knew much of the documentation.  However, when my husband and I started, it was his idea that we do this together and he was working at Ford Motor Company and we had a two small children and my step-son who was 18 years old.  The first course was Carlton Sheets.  When we both tried to sit down and listen to the cassettes and read the book, there was always, and I mean always, a disruption or simply not enough time.  So, the Course just sat after we tried to work on it together as a team.  I was so mad that we spent the money on this “get rich” book and it was his idea and he just wouldn’t take the time to participate.  One day, I got a call from Carlton Sheets’ staff who asked me how we were coming along with the Book and Tapes and said that they were offering a Mentor Program that would help us work together and change our lives.  So … I decided without the consent of my husband, that I would pay for this service because I thought if I had someone else telling him to read the book and listen to the tapes, then for sure we would start doing real estate.  The cost was thousands and what I thought was going to get my husband going, instead got me going.  Buckle up!  It was then that I learned about the different personalities.  It didn’t make a difference to my husband if we had a Mentor that we talked to once a week or not, he still wasn’t going to read the book or listen to the tapes because he was a VISUAL learner and he needed to be taught in a boot camp atmosphere.

Honestly, I can say some very valuable information I got from the Mentor was just that I needed to take the time to read, listen and then TAKE ACTION, no matter what.  I learned from the Mentor that a Purchase Agreement had many “out” clauses so if I offered too much, I could always back out. Now the next problem came along, where do I get the money to buy the houses?  We became members of six Local Real Estate Investment Clubs that really helped to keep us motivated.  We would listen to the people who were doing the deals and my husband would say “they don’t look as bright as us, why can’t we do it?”  Well, I recognized why we couldn’t work well together because 1) he was scared, 2) he would never talk to sellers unless we were one on one and 3) he could talk the talk but not really walk the walk.  I truly believed that he had what it took, but he refused to learn the paperwork, which if he would have, he would have been great at it.

Our next problem was where do you find the money???  We started buying, fixing, retailing and holding.  I heard many of the speakers say “just flap your lips and the money would come.”  Well, believe it or not, I couldn’t find the money until I went to the Real Estate Investment Clubs and met Private/Hard Money Lenders.  Having great credit, I thought why don’t I just use my credit to get started even though many of the speakers said that you need to be creative.  This is one tip that will hit your credit score but got me $75,000 to help us to get going.  I started collecting all those credit card applications that said I was approved for $5,000, $10,000 etc. and then I pulled out my telephone book.  I called every bank and credit union in the phone book and called on every credit card application.  I did all of this specifically within a 24 hour period.  Whatever money or interest rate they said they would give me, I took it.  By the end of the day I had obtained $75,000 which was about our annual income at that time.  They asked me what was my income for that year and since we were starting real estate I knew we would make at least double what our income was at that time, so that was my income.  Now you might think I was crazy, at least my husband did, but it allowed us to buy houses cash, fix them up, sell them and immediately pay off the credit cards or lines of credit and profit and by the end of the year, my income was higher than I thought!  I ended up with 40 rentals and lots of rehab houses.

The moral of this story is that having my Mentor was key!  I can give them credit for my success.  I was so stubborn and refused to do the real estate on my own, as this was initially my ex-husband’s idea and he said we were going to do it “together” as a team!  But he was frozen in place and not doing any of the work.  My mentor encouraged me and showed me how to keep moving forward on my own to create a successful real estate empire, which I have done.  I have found that my Mentors have always given me back a thousand times worth my investment.  If you are struggling on anything in real estate, I highly recommend a Mentor, and in order to have a successful relationship with your Mentor, you must take action in your business and not be afraid.  The cost of a Mentor is pennies compared to the results of either succeeding or failing in real estate and/or in your relationship with your spouse/business partner.  Learn from others’ mistakes, it’s a small price for you to pay, considering the huge price they have paid to forge through the learning curves that you won’t have to experience.  You do not have to recreate the wheel!

I hope you enjoyed this article and for many husband and wife teams out there, I recommend preparing a “duties” chart and each person pick what they want to do in real estate and just accept it and not get mad.  Women can change and Men can change, but only if they choose to and choose to for their own reasons, not because their spouse wants them to change.  I recommend that you accept each other with each of your own unique qualities and then maximize the benefits accordingly.

Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to move through 2017 with high success and help you bring your Real Estate Dreams to Life this year!  NO MORE DELAYS!

Kimberlee Frank

www.ForeclosuresGoneWild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

www.SellFastRealty.com

Like me on www.facebook.com/foreclosuresgonewild

Like me on www.facebook.com/sellfastrealty

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

Becoming a Successful Real Estate Investor

I am writing this article because I mentor so many people who desire to become successful in real estate; however, their life gets in the way of educating themselves. Making offers on the Multiple Listing Service (MLS) is a great way to find Sellers, yet, when you submit an offer to the Seller, the Realtor really doesn’t know the answers to the following questions. Is there a mortgage on the property? Are the Sellers in foreclosure (unless it is a short sale)? Is it a probate matter and how many heirs are in the estate? What permits have been pulled for the property and what dates were items like the roof or A/C installed (this information is sometimes provided in a Sellers Disclosure)?

After talking with a Seller and/or finding a Vacant Home, the research you do is a vital part of your business success. I provide students with over 43 ways to find motivated sellers without using the MLS. Knowing in-depth information about the Seller’s situation, ownership and mortgage balance allows me to negotiate and close more deals than just listening to what a Seller has told me. In fact, Sellers normally tell you what they want and not what they NEED. In order to make a deal work for all parties, we need to find out what they NEED, not what they want, then see how/if we can create a win-win situation.

There are many moving parts to the puzzle. I am recommending saving the following websites as favorites in your computer to be successful in your county, city and state. This allows you easy access to public records that may or may not be free, but are a necessity in order to negotiate and close transactions. Once you find your county, city and state websites, you need to spend at least 1 hour exploring it. Click on all links and call the helpline for each website to understand step by step how to research property. If you don’t understand over the telephone how they are telling you to search, they all have computers in their office that are free to the public. Go down to the county, city or state office and ask them to show you step by step and see if they have handwritten instructions. If not, then make sure you write it down step by step so you have it for future reference.

City/County Treasurer along with Property Appraiser Website – I work in multiple states and have found that each State, County and City are different. What you really need to find out is the following: Information on the taxes, square footage on the house, and permits pulled on the property. Let’s start with the Treasurer’s Office. Google search the name of your City or County Treasurer and look for Tax Information. Enter the Seller’s address and what I am looking for here is to see if the mailing address for the tax bill is different than the home address, if the property is being claimed as a homestead or is it a rental, and if the taxes are paid and the amounts. Some Treasurer’s sites will provide you information about the property and land which includes square footage, permits, purchase amount, dates and comparables.

County Website For Recording Deeds – Google search the name of your county register of deeds and look for official record search. This site is where they record all of the deeds, mortgages, and probate documents. Some websites are known by register of deeds and others are known as county clerk’s office. This allows you to search by the Seller’s name. What I have learned from many of these websites is that the less information you enter in the better. For instance, if your Seller is Jane L. Doe, I would only search by Jane Doe and I would read the instructions as some use last name first and some require commas in between last and first name. This also allows you to pull up other documents that may have been recorded against the property but did not include the Seller’s middle initial. I would sort everything chronologically by clicking on the ‘date’ column header and see if it will sort with the most current year at the top. You will also need to know your legal description of the property in question as this is how the county files official documents based on legal descriptions and not addresses. This information is provided to you by two different websites: Your County/City Treasurer or your Property Appraiser Website.

County Website For Civil and Probate –Google search the name of your county civil court or your county probate court and look for official record search. Let’s start first with the Civil Court. This site is where they record all of the civil actions against the seller such as a foreclosure action, any legal actions (divorce, credit card debts, etc.) The Probate Court may allow you to see that there is a Probate action filed and may name the personal representative; however, since this information is private, you would have to personally go to the court to view the records as to how many heirs and what assets and debts are included in the probate. Both sites allow you to search by the Seller’s name. Again, less is best when searching for a Seller (read above instructions). Sort by date, if possible, and work your way through the information. Civil actions may say ‘closed,’ but you should still open them to view the outcome of each record.

One of the most helpful sites that I like to use is www.RealtyTrac.com which has a program, costing less than $200/year, where I am able to look up hundreds of properties. I can see if they are in foreclosure, how many mortgages are on the property, date of purchase and amount, name and address of owner, comparables and lots more. I do have to say that some of their information is not always current, so you will have to look closely at dates, as with most other programs out there. If you are just looking for foreclosures, I would recommend finding a local list provider for pre-foreclosures, as RealtyTrac is more national. Remember, judicial and non-judicial foreclosure actions are listed differently.

I would recommend that even if you don’t have a property to research, use your own address or your neighbor’s address to explore and learn these websites. Print and keep this article near your computer for future reference. Remember, your success is in your hands, as I have provided you with the tools…now take action and follow through with my instructions!

Please keep sending me your questions and topics that you would like to hear about, so I can be sure to keep feeding you with the information that you need in order to kick off 2017 with high success and help you bring your Real Estate Dreams to Life!

 

Kimberlee Frank

www.ForeclosuresGoneWild.com

www.RealEstateJunkie.com

www.ShortSaleNegotiating.com

www.SellFastRealty.com

Like me on www.facebook.com/foreclosuresgonewild

Like me on www.facebook.com/sellfastrealty

 

 

Post Footer automatically generated by Add Post Footer Plugin for wordpress.

 Page 3 of 26 « 1  2  3  4  5 » ...  Last »