MrBPO.Net » Tips & Tricks

Really Low Real Estate Offers – Getting a Second Look From Banks

Mr BPO — Fri, 09 Apr 2010 17:19:44 +0000

Foreclosures in the country have pushed past over one million homes. Couple that with folks just trying to sell their home for whatever reason and there is a glut of homes in many markets. While this level is high it is within many historical swings of the past. The point of this discussion is to point out the incredible buyers market that exists in many areas of the country.

Arbitrage in the financial markets takes advantage of price differentials between more than one market.

Money is made taking advantage of the differences. In real estate, with the benefit of trained Certified Property Managers and the like, there exists the potential to invest in areas, which are depressed and hold good value in the future. Like examining the financials of a company so the same type of play can be marshaled with investment situations across the country.

In crafting offers, returns in the 25% plus range over say a two-year period must be factored in even consider the ramp up into these venues outside of oneâs backyard. Finding deals in the backyard would be best, however, lacking that one must look elsewhere.

In an example of buying a rental condo in a resort area that has abundant inventory and has plenty of foreclosures forcing prices down some investment play may be possible. If a rental condo is listed at $300,000.00 and has and existing mortgage of $280,000.00 with a pending foreclosure pressing the owner this might be a deal worth looking at.

Owners with ARM mortgages with accelerating payments and/or other pressures have come to bear on owners who find themselves in a fix. Many of these condo rental properties with onsite rental offices make for a decent cash flow. In some water front properties the gross rents will approach $30,000 plus per year. In trying to negotiate with a lender with a foreclosure action in hand it is best to have ones own financing or cash to bring to the table. That lender will not cut the price (mortgage) if they are being asked to hold the mortgage.

In this example, a proposed âShort Saleâ would be probed as a possible action. In this case, the owner receives nothing. The owner may save a foreclosure nick on their credit but thatâs it. The lender on the other hand will be offered an offer in the $240,000 range IF the return is figured. The lender takes a $40,000 plus hit on the deal with additional costs for legal fees, past payments, late charges, etc. in addition to the âshortâ settlement. This is a big hit for the lender. However, Real Estate Owner (REO) properties have to be liquidated. If the lender foreclosed and sat on the condo for another six months and took another hit at sale time, the proposed $40,000 plus hit starts to look pretty good.

An investor needs to determine the condition of market place in a year or two. The economy still has strength, employment is strong, so then it is a question of what will be happening in the market down the road. If that analysis comes up positive then one would continue on the track.

An outside force on these waterfront investor condo properties will come to into play as when possibly the dollar falls against the Euro or Pound. Those buyers coming into the market with stronger currencies will see these situations as strong buying opportunities and prices may spike back up. A Realtor needs to market to these buyers immediately. In addition, with stronger currencies abroad vacations in these waterfront condos can almost look cheap with a good deal of safety.

A few years down the road, the rentals could be pumping and the demand could be up for these specific properties which can be rented when not being used by the owners. Naturally, there is no guarantee that this will play out exactly that way, but it is an educated analysis basis on the facts currently in hand. When depreciation, interest deductions and other factors are put into the equation, perhaps a $40,000 âshortâ is not enough. Perhaps it will take a little more. In any case, an investorâs numbers should be shared with the lender to shore up the case for the âshort saleâ and give a little cover to the work out specialist who is signing off on the deal. The lender will have several BPOs (Broker Price Opinions) of the value as several AVMs (Automated Value Models) to further peg the value. However, if things have not been moving with say six months exposure to the market place, then the lender may be compelled to pull the plug.

Much like when the accelerated depreciation plug was pulled in the 1986 Tax Code, properties must stand on their own. Limited Partnerships and REITs were being offered with low (50% LTV) leverage to realize any kind of cash flow. In this case, a highly leveraged mortgage would insure a negative cash flow. Thus the return on investment will be calculated on a low leveraged situation. The 25% plus return then would be possible. Each case needs to be turned inside out before making an offer. If there has been several price reductions over the listing period with offers of paying all the closing costs and such, then this will garner further investigation. To save a lot of time, the question phased as: âTo save us both a lot of time, Iâm looking to buy at a deep discount from a motivated seller or a lender who will consider a deep âshort sale. Iâm very liquid in cash and can close quickly. Is there any shot at a deal on this property?â If not move on.

This glut of properties wonât be here forever. It took a few years to absorb the Savings and Loan fiasco and major write-downs that took place, but it was absorbed and money was made by many. The original owner being in an overly leveraged mortgage situation may have cast the initial foreclosure situation. High leverage kills when the underlying financing is an Adjustable Rate Mortgage in a rising interest rate market. Cash flow disappears. The bleeding begins.

Itâs no place for the faint of heart. Like arbitrageurs in the financial markets, it takes a strong will, liquid cash and a good feel for the current market and the future market and how it will all play out. The climate for a play is here and now in some targeted areas. Over 1,000,000 foreclosures, a glut of listings on the market, a falling dollar making attractive situational buys to foreign borrowers makes for a play now. âKnock, knock.â âWhoâs there?â âDealâ âDeal Who?â

To Deal Or Not To Deal, That Is The Questionâ

Dale Rogers
www.BrokenCredit.com
www.sellerhelpsbuyer.com

Dale Rogers is a thirty-year mortgage veteran and frequent contributor to the Broken Credit Blog. The BCB is a free website created to assist the general public with information about credit repair and responsible mortgage lending.

www.BrokenCredit.com
www.sellerhelpsbuyer.com

Foreclosure Auction Tips

Mr BPO — Sat, 03 Apr 2010 01:44:32 +0000

Planning to buy a property or a home in the foreclosure auction for the first time? You may be having few concerns at the back of your mind. If you follow certain steps, things are surely going to be much easier for you.

Find properties of your interest and file them up: First and foremost you have to keep a regular track of the properties available in the market and file them. If you have a proper tracking system, you shall be updated about the latest options you have and thus end up buying the best. After you end up tracking a suitable property, visit it, to know about the property, and the neighborhood in details.

Confirm if the auction is still on and get to know about the bidding process: Chances are, that after a property has been scheduled for an auction, the owner pays the required amount to the foreclosure lender and the bidding closes. The auctions may even get postponed for a later date, so before you visit the place of auction, get to know if the foreclosure auction is still on at the decided date.

Fetch enough details about potential bargains: Collect as much details as possible about the property. Get to know about the market value and also the amount owed on the property. Try also to know if the owner has liens against that property. You should also fetch information of the amount the bidding would begin at, and then compare it with the market value of the property. This would help you know if being a part of the foreclosure auction and purchasing the property would offer you any bargain, provided there is no one else ready to bid.

Determine how much you can bid: After you have fetched enough details on possible bargains, realize your financial capability and estimate how much you can bid at the auction. It is even more important to decide your bidding amount, if the foreclosure auction requires you to carry the amount in cashier’s check or in cash. If you know the exact amount you can bid, it will prevent you from getting influenced by the atmosphere and bidding more than your capabilities.

Bid at the auction and take ownership: Next you should confirm if the auction is still on. If yes, visit the place on time. If you are bidding for the first time gather enough knowledge about auctions, place your bids and if you are the winner, complete the legal procedures go through the document, and the property is yours.

Read more: http://www.articlesnatch.com/Article/How-To-Prepare-Yourself-For-A-Foreclosure-Auction-/1064635#ixzz0jzmzCiU

Do Lenders Focus on Net or BPO Value during a Short Sale Negotiation?

Mr BPO — Tue, 23 Mar 2010 02:17:50 +0000

Here is explained how to structure your HUD to accommodate lenders whether they focus on NET money to them or actual Broker Price Opinion (BPO) Value

Displaykey Software Installation for Windows 7, 64 Bit

Mr BPO — Thu, 24 Dec 2009 19:34:45 +0000

Amazingly it appears that Windows 7, 64 bit, will not properly install the DisplayKey 64 Bit Driver software on Windows 7, 64 Bit.

However with a few extra clicks, after the driver installation fails, you will be up & going in a few minutes.

Here is how you avoid a call to Tech Support.

Download the 64 Bit version from GeSecurity.com

Click on software downloads on the right side, then on the next page click on 64Bit Display

When the file has downloaded double click the file to begin installation. (Remember do NOT plug the cradle in until prompted by the software.)

During the install you will receive an error message “DPInst.exe cannot be run on this operating system,” ignore the alert and finish the install. ……. DPInst.exe is the Supra installer program and does, in fact, run correctly on Windows 7.

Now “right click” on “Computer” and choose “manage”.

When the next window opens up click on “device manager”.

You should see GE Supra DisplayKey USB Cradle with a yellow exclamation point next to it. This is telling you the driver is installed incorrectly.

“Right click” on “GE Supra DisplayKey USB Cradle” and choose “update software driver”.

When the update driver window pops up, click on “Browse My Computer for driver software.”
You will then go to browse here>> C:\Program Files (x86)\GE Security\dKeyUSBCradle\drivers
After clicking “ok” when you browse to the “drivers folder“, click “next”. It will ask you if you are sure you want to use this driver, click “ok”.

That’s it! This is the exact method the GE Customer support will tell you to do.

You can now charge and reset your key so you can show those 25 homes this weekend

MrBPO.Net » Tips & Tricks

Really Low Real Estate Offers – Getting a Second Look From Banks

Foreclosure Auction Tips

Do Lenders Focus on Net or BPO Value during a Short Sale Negotiation?

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