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Short Sale Discounts Growing

The discounts that banks and lenders are taking on short sales is rising. At least that is what the latest data from the LPS Home Price Index seems to indicate.

Since April 2007, when short sale discounts averaged only 10% while bank owned foreclosures sold for 19 percent discounts, the short sale discounts have jumped to 23% while foreclosures are now selling for a 29% discount.

These numbers are nationwide averages so it will be necessary to research your local markets. However, it appears that short sales have become a more rewarding target for both investors and retail buyers. The difference in discounts can often be easily outweighed by higher repair costs on foreclosed properties who are frequently vacant for an extended time or even vandalized, while short sale properties may be found in much better condition.

Where do you  find the best deals in your local market? Leave a comment below!

Flipping Foreclosures – The Best Gameplan

When setting out in the business of flipping foreclosures, real estate investors can pursue different strategies to maximize profits.

But how can you determine upfront which one will work best?

Among the different strategies are:

- Buying houses that need a lot of fix up work for bottom dollar, add value by fixing and resell
- Buying houses in good condition that need little work and sell either as is or after a few improvements have been made
- Buying high-end homes that have a high dollar amount of profit potential
- Buying low-end homes that have limited risk exposure

And many more…

All these strategies have a different mix of appeal, risk, competition, need for capital. I read recently on Investor’s Business Daily that the strategy to sell high is a great one, and to be able to do that the house should be nice, and in good condition when you buy it.

A quote from that article states that “Nice foreclosed properties are harder to find. The number available to foreclosed-property investors has slid 25% to 50% in the past six to eight weeks, he estimates. And competition among flippers has heated as large companies have gotten into the market to become landlords.”

This is the case in Riverside County, one of the most depressed areas in the country, second only to some counties in Florida.

Profits are waiting in each of these niches. Don’t hold yourself back thinking this or that strategy is the only one or even the best one. Choose the ne that’s most appealing to you, do some research and start moving.

What is your favorite foreclosure flipping strategy? Leave your comment below.


Predicted Foreclosure Tsunami Still At Large

The new wave of foreclosures, termed yet again as a “foreclosure tsunami”, and predicted by many major analysts for the past 6 months or so still has not arrived in the overall real estate market.

The WSJ cited data released by LPS Applied Analytics and CoreLogic, which shows that the waters are still relatively calm.

Home repossessions nationwide are at about the same levels of last year, and still below the peak set in 2010.

In many markets, the turn-around time of bank repossessions coming back to market and sale as REO inventory is surprisingly short, sometimes as little as four to eight weeks go by between the foreclosure auction and re-listing.

Overall, the scare and scarcity tactics of the media seem to benefit active buyers at this point.

What are you observing in your own market? Leave a comment below!


How To Find REO Agents Who Will Work With You

Do you have questions or suggestions about this video or real estate investing in general? Leave them below and we will answer them in a future video…

Texas – Produce The Note Challenges

Foreclosure laws vary from state to state, and some states are more in support of lenders than others.
In Texas for example, the time frame for filing a Notice of Trustee Sale is only 21 days prior to the sale, and this is the first public record filing in a non-judicial foreclosure required in Texas.
So also, in Texas the lender is generally not required to “produce the note” in order to show that its claim is legitimate and it has a right to foreclose.
I found this interesting opinion by a Texas law firm who apparently markets its services to lenders who are being challenged by borrowers demands to “produce the note“.
My comment is this:
The “produce the note” strategy is only the surface effect of a much deeper running concern.
Typically, a lender or loan servicer produces photocopies of paperwork that
1. Does NOT mention the lender or loan servicer in any principal role,
2. Does NOT link the lender or loan servicer to a principal role of the note,
3. Does NOT show that the lender or loan servicer is authorized by a principal of the note.
Since the original note has real value as a negotiable instrument in exchange for full payoff, accepting copies of the original is like taking the copy of a personal check that’s executed by someone else.
Nobody in their right mind would do that if they fully understood the procedure – not even in Texas.

Please let me know your opinion or if you’ve had any experiences or challenges that are related.