Tag Archive: foreclosure real estate investing


A very common question I get is “How soon after my foreclosure can I buy another home?” There are a couple of answers to this question and they depend on how soon and how badly you need a home.

The first option to getting a new home is to simply pick one and buy it with conventional financing. The lender who will be looking at your credit will be very reluctant to finance another home for you. However, with a large enough down payment (20% minimum) and your willingness to pay a higher interest rate, you could have a new home in 45 days.

Most conventional lenders will not allow financing another home after a foreclosure for as much as 12 – 24 months. It probably has to do with the ideal that if your previous home was lost to foreclosure, why would you be able to afford the new one. While this is good logic, it doesn’t take into account special issues with the original loss such as job loss, divorce, medical issue, or any similar problem that has had a final resolution.

I just heard of a women losing her home to foreclosure because of a job related injury and her employer not keeping her on the payroll. She became permanently disabled and was schedule to collect disability that would have easily paid her mortgage and forestalled the foreclosure. However, the first check was not sent until two weeks after the foreclosure sale and she lost her home. This is not the end of the story. I suggested she go to Legal Aid Services and fight the sale despite being beyond the redemption period. Her case is still pending but she had to get an apartment in the interim.

There are generally a couple of sources for the funds to buy a new home. The first is conventional lenders who will generally look at a foreclosure financing in 12 – 24 months at a rate about 1.25% to 1.5% above current rates for a “B” paper lender, and with a hefty deposit. The problem is that the 1%+ differential amounts to nearly a hundred thousand dollars in excessive interest over the life of the mortgage.

If getting another home is absolutely necessary, and you have a large down payment (35%), hard money lenders will loan for up to one year while you attempt to get another long term loan in place. The cost is usually 4% or “points” to close plus the usual closing costs and 12% to 15% per month. There are seldom pre-payment penalties for obvious reasons, but if there is one it should be for a maximum of three months of interest payments. Obviously, this is an expensive method of owning a home.

The next method requires a small down payment (usually 3%) and no closing costs. You should be able to move in within a week or less and the seller will be happy to work with you. This method is a Contract for Deed or a Lease Option. The Contract for Deed has the home transferred into your name with the financing in place by the seller. The agreement is that you will get permanent financing within a given time period, usually one year. However, your timely payments on the existing mortgage will go a long way with your new lender to get a better financing rate.

The Lease Option method keeps the home in the name of the seller, and gives you an option to purchase the property for as many as five years in the future. Each year the option price (“Strike price”) goes up, but this is negotiable. Should you decide not to buy the home, you will lose your deposit (“option consideration”). This method of getting a home quickly is the most cost-effective of the various options and all the aspects of the lease, purchase, partial credit for each payment toward the purchase price, no initial financing credit requirements, minimal cash, etc. are negotiable with the seller.

The key to doing a lease option is to get one document from the homeowner. The reason is that if you do have to go to court to enforce the option agreement or get your option consideration back, one agreement has been adjudicated by the courts as an equity-type agreement. This means that with every lease payment you make, you build equity in the property. If you sign two agreements, you can easily be evicted from the property and lose your option consideration with few or no grounds for recourse.

If your property has been on the market for a long time and you have been unable to sell home fast, chances are you are not doing something right. You may have planned to sell your home in order to move into a better place or to improve your financial condition. In case of the latter, you may be considering a sell and rent back option. Whatever the case may be, you can take a few steps to ensure that your house gets sold quickly.

Tips to Sell Home Fast

Here are a few tips that can help you make your home more attractive to buyers:

Complete all repairs: Remember the squeaking door that drives you nuts, the broken screens that let sunshine through in the wee hours of the morning or the tap that leaks? You can no longer defer fixing these. It may be a good idea to walk through your home and take a thorough look at everything that needs repair and get them fixed.

Opt for a pre-sale inspection: A professional inspection has dual benefits. Firstly, it brings out problems that you perhaps would never have noticed. It also helps spread the word around if there are no major issues. An inspection report sends out a clear message to buyers that you have nothing to hide.

Clean up thoroughly: There are three aspects to cleaning:

  • Remove the clutter so that buyers can visualize themselves staying in the house. A cluttered room not only makes the property look less attractive, it also makes rooms look smaller.
  • Create a neutral and impersonal atmosphere so that buyers think of themselves and not you when they look through your house. However painful it may be for you, certain items like family photographs should be packed up.
  • Further cleaning in terms of scouring bathrooms, shining windows and banishing all kinds of smells that could turn buyers off are a must do.

Redecorate for maximum effect: Highlight the focal points of the rooms with the correct placement of furniture. Remove all unnecessary pieces and rearrange them elsewhere if necessary. Take special care of the floors. A clean floor is not enough. Look for cost-effective alternatives for stained or cracked floors.

Impress with a splendid curb: Many buyers make a decision even before they go into the house. As most buyers surf online before they visit the property, landscaping counts. The photos of the exterior of your house should be impressive. Beautiful flowers and neat hedges are a good start. Think up ways to spruce up your lawn, paint the front door and ensure that potential buyers get all the right vibes as they walk in.

Sell Home Fast with the Right Strategy

Apart from making your property look attractive to buyers, you can take the following steps to ensure a quicker sale:

Select the right agent: When making the choice, ensure that your agent:

  • Can really sell.
  • Is trustworthy.
  • Knows the locality well.
  • Is enthusiastic about your home.
  • Gets along well with other agents.

Fixing the price: Never test the market with too high a price tag. Buyers will not make an effort for someone they feel is unreasonable. Fix the price on the basis of other houses in the area. You may also take the advice of your agent, as they are more in touch with the market and prices than you are. You will be flooded with offers from people who are looking for fairly priced houses.

How can I sell my house fast? Has this question been bothering you? You are not alone. Most homeowners have this concern. Even if you are looking for a good sell and rent back offer, ensuring that your home is in good shape and selecting the right agent will help you to sell home fast.

Real Estate Marketing

The single most important thing in real estate is marketing. It is the way you find sellers and buyers. Without it you have no hope of success in the real estate industry. There are two main categories of real estate marketing: offline and online. Both are essential in developing a profitable business. The following are ways in which you can optimize your advertising dollar.

Offline

Most of you have no doubt seen signs strategically placed around busy intersections and residential neighborhoods. These are called bandit signs, so named because technically they are not allowed in most city ordinances. Although there are usually no repercussions, the signs are removed regularly, so they will have to be replaced periodically. If you put your bandit signs out on Thursdays, you will have a good chance of them making it through the weekend at least. Choose locations near the types of homes you are interested in. Make sure the signs are visible with easily memorized contact info.

Direct mail consisting of postcards or letters is a good way to bring in leads. The post office has a system where you can set up your own campaign. Postcards are the most cost effective. Make sure they have an eye-catching design. Target only the areas you are interested in by mailing to specific zip codes.

Flyers, posters, handouts, inserts, and door hangers can be effective real estate marketing tools. Color is preferable to black and white. It can be time consuming to distribute this type of advertising. Often, you can hire a high school or college student in need of some extra cash to do this for you. Of course, there is always newspaper and magazine ads, however, these are fast being replaced by online marketing.

Online

Craig’s List is a great way to advertise. Not only is it free, it gets tons of traffic. Place your ads in as many relevant categories as you can. Make sure you change the ads from category to category as Craig’s List does not allow duplicate content. There are also other real estate sites that allow you to advertise on, some free, some not. It just takes a little research to find them.

A website with squeeze pages to capture information is a must. Not only do you need these things, you have to SEO them. SEO (search engine optimization) gives your pages importance in the search engines, ie Google, Yahoo, Bing. If you are not well versed in how to SEO, there are many great SEO companies out there that do great work in this field. It is almost a necessity to be on the first page of a search result in order to generate business.

Hopefully, these tips will help you in your real estate marketing. Remember it takes money to make money, but you don’t want to break the bank. Use your advertising budget wisely and keep track of your results. That way you can focus your dollars where they are doing the most good.

There are thousands of foreclosed single family homes available in the market today. These homes range from large sprawling estates to small-unit condos to townhouses. A common denominator among these homes is that they are all spacious enough to have two or more bedrooms, a living room, a dining and kitchen and a bath.

The more popular structure of foreclosed single family homes are detached and surrounded by outer spaces for a garage or a lawn. The prices of these homes vary depending on location, size, condition, as well as on the length of time they have been on the market. Some of these homes

only get sold after several price adjustments by the seller.

Foreclosed Single Family Homes

It is typical to find foreclosed single family homes at only a fraction of its actual price. With the right tools like a reliable online listings service, potential buyers can search for these homes by state or by price. These homes will likewise be listed on real estate companies, newspapers and the county courthouse. The listing will always have the contact details for the property manager that buyers can contact to inquire about the home.

These homes can be purchased at various stages of the foreclosure process. Many buyers purchase them during pre-foreclosure through a short sale. This happens when the home owner elects to the sell the home rather than get foreclosed on. With thelender’s approval the property is sold for a price that is lower than the outstanding debt owed by the homeowner.

Buyers with ready cash on hand purchase these homes through public auctions. Auctions are popular among buyers as it takes only a short time to transfer the deed of the property to the buyer. Yet another means of buying foreclosed single family homes is through real estate agents appointed by banks or the government to sell their foreclosures.