Buy Or Walk Away? | Part One

Buy Or Walk Away?Per a quick search of real estate comps, an investor can see the potential of a foreclosure deal. Foreclosures can seem like a great bargain, but how do you know if you are getting a great deal? Factors other than the price must be considered to get a good value. In some cases, a foreclosure may be a complete money pit after bringing it back to life is said and done. There are foreclosure deals to be found in every corner of our country.  Be certain you make solid investment choices based on solid information about the property and the location.

The first thing you have to ask yourself is the current status of the home. There may be outstanding tax debts or municipal fees tacked on the price, for example. Outstanding property tax debts can cost more than the property as it stands in some cases. These charges can add up quickly, so be sure when investing in foreclosures to account for any such outstanding fees.

Next time, I want to share another point to think about when considering the foreclosure investment.  I hope today’s post has been helpful. I look forward to sharing with you again.

Using Real Estate Comps To Win

Using Real Estate Comps To WinMost real estate investors start their careers with a basic knowledge of real estate comps.  Additionally, when they start investing, they start in their local area. The reason behind this is because we feel more comfortable with the areas and know the areas better. It is also easier to get local real estate information that we need. Investing in your local market is also cheaper to start out, there is less travel costs, you can see what you are buying to give you a comfort.

When looking at the market you need to see where other investors are buying their houses. Most of the best deals will be found in low to middle class neighborhoods. Look for safe neighborhoods that might have somewhat older houses and houses that are in reasonable shape for repair. Searching real estate comps will help you find the properties that you will want to invest in.

There are different types of markets to invest in. They are generally appreciating markets, and depreciating markets. Appreciating markets are markets where there are not enough houses or a very high demand for houses which causes the price of houses to go up. Depreciating markets are where there is a lot more houses than people to fill the properties. This causes prices to start going down. In these markets you can pick up several deals, while in appreciating the house prices are going to be much higher and harder to find great deals. The deal will still be out there, you just have to know where to find them.

Learning your market by using real estate comps is key to becoming successful. Every market can vary by neighborhood, so make sure you know your market well. Make your profit when you buy and go make your mark.

The Foreclosure Timeline

The Foreclosure TimelineA foreclosure of a property is the result of default on the mortgage.  Real estate comps generally reflect any foreclosures in a particular area.   When property owners fail to make their scheduled mortgage payments, or when owners fail to pay their property taxes or some related obligation such as homeowners’ association fees or special assessments for a prolonged amount of time, a foreclosure can occur.

A legal “notice of default” or a “lawsuit to foreclose” (depending on the state) is typically filed to initiate a foreclosure. This makes it formal to the property owners, and the public in general that legal action is moving forward to force a sale of the property. This notice is delivered to the borrower at least one month before a foreclosure sale (typically between 60 to 180 days) and subsequently posted on the internet and/or newspapers as public notice.

In response, a borrower can do several things to prevent or delay the foreclosure.

  1. Make a deal regarding the loan with the lender and perhaps reinstate or even refinance their amount they are in arrears.
  2. File a legal defense against the lender and there by dragging the process out for a year or longer.
  3. File for bankruptcy and automatically stay the foreclosure action. In certain instances, bankruptcy court can even annul a foreclosure sale that has already occurred.

Should these tactics fail or run their course, the property is auctioned to the highest cash bidder.  This is my main reason for stating that foreclosures are the easiest money producing investment option.

The Desire To Invest

The Desire To InvestBefore we get in to the nuts and bolts of real estate investing, we need to talk about desire. Investing should not consist of real estate comps only.  If you are going to be successful at anything, especially real estate investments, you have to have the desire to do it. In real estate investing, the desire must be there to really get satisfaction out of it.  If it isn’t there, then real estate investing is going to be hard to do. Real estate investing may not be for everyone, but real estate investing can offer anyone the financial freedom we all crave.  Remember investing can still help you make your dreams a reality and help you to get where you want to go in the future.

Making it in real estate takes someone who has a strong desire to change their lives for the better and the ability to think big. Anyone can become a great real estate investor. It is going to take a lot of work and can be a struggle at times but in the end it will be the most amazing feeling ever. A solid team can help you make your goals happen.  The importance of putting a team together is pulling individual strengths together to achieve a common goal.  Doing everything is a recipe for failure. You have to put together good people who you can trust and rely on. No one can become successful at something if they don’t want to do it and don’t get satisfaction out of what they are doing.

Landlord Success | Part Two

Landlord SuccessLast time, we discussed the changes that come with being a landlord, namely what you should expect, should you decide if you want to raise the rent(s).  There are many reasons that might prompt a rent increase, a search of real estate comps may support it, however, I want to use these reasons below to assist you with your decision:

  1. It is important to learn when enough is enough regarding everyone.  Take time to think about is there a valid reason for the rental rate increase?  If you can’t give one, don’t be greedy.  Lining your pockets is not a reason to potentially lose a solid tenant.
  1. Be sure to know your market.  We are talking basic supply and demand.  The market could be full of rentals and then tenants could jump from property to property.  If supply is scarce, than the opposite is true and you might not suffer any turnover.  It is a chance you take in the rental investment property business.
  1. Your rental should surpass or at the very least match surrounding properties.  How does your rental property’s location, condition and amenities measure up to other rentals in and around the area? Tenants are less willing to endure the stress and cost of relocating over a small rent increase when your property is one of the nicest in the neighborhood.
  1. Make sure that you are wise with the increase.  Modest increases given over regular intervals are more easily understood than irregular ones that surprise and undoubtedly will alienate your tenants.

My general thinking is, there will always be some risk when proposing rent increases because tenant expectations vary, circumstances vary, market conditions vary, and certainly personalities vary. Regardless, when the investor does his or her homework and then proposes an increase that has reasonable grounds, chances are good that it will be received with realistic agreement.