A lot of people wonder how in the world to make a trade in a market where choppy mood swings are an every day event. When
this happens, instead of blindly throwing money at a stock you think should run, you have to take into account what "could"
happen if you are on the wrong side of a huge drop.
What is the average trader to do? Well, during the worst volatility, sitting out is probably the wisest choice because you
can get so whipsawed it makes your head spin. But if you are one of the personality traits that says "I'll conquer this
volatility and anything else that gets in my way," here are some suggestions to help you do just that. First realize that
every average and every stock has a "trading range" that it goes through every day. For some issues it's only a 1/2 point,
but on some issues it can be much more. It becomes very necessary for you to look at some charts and get a feel for how much
your stock ranges in the course of normal trading before you can identify a move that is "outside" its "normal" course. So what do you do about that "abnormal" move? Do you sell in fear, or hold and hope? Here is a tip for you that may help.
Unless a stock has some fundamental reason to move higher such as a news release, a stock split, an upgrade, etc. it will
pretty much behave in step with the overall market. A "good stock" in the tech sector may be up nicely and moving well with
the NASDAQ up 20 points, but if the NASDAQ tanks, you can bet your stock will too. So, your tech stock that is now down
outside the "normal range" could certainly be there because the NASDAQ as a whole is now down 40 points. Now the question
really isn't "what's wrong with my stock" because the answer is nothing, the question is "what's wrong with the NASDAQ?"
This is where technical analysis actually becomes important and learning to spot support levels comes in. Let's say that your
tech stock that just took a beating has good support at a certain level. If the move down hasn't violated that support level,
keeping the trade in play probably isn't a bad idea since chances are the NASDAQ will have a move to the upside and bring
your stock back up with it. But, if the loss violates that support level, bailing out may be the best choice since so many
buy/sell programs are based on resistance and support that it could cause even more damage to the issue.
On the other hand, if the stock you were in was a pure momentum play and support is several points below, it is often wisest
to cut your loss quickly and get out while you can. When a momentum stock gets pulled back outside it "normal" range, it is
often a bad sign, no matter what the averages are doing. So, in times of big volatility, knowing where technical support
levels are in your particular stock, will often help you decide if you are still "okay" or about to get creamed.
Learn the basics of reading a chart and study them so you can recognize support and resistance in a heartbeat, they will ultimately help you a lot!
For your two week free trial to Stocks2Watch, just send a blank email to: stocks2watch@sendfree.com
Monday, February 25, 2008
More good news for those of us flipping houses....
Sales of existing homes fell to the lowest level in nearly a decade in January while the median price for a home dropped for the fifth straight month.
The National Association of Realtors said Monday that sales of single-family homes and condominiums dropped by 0.4 percent last month to a seasonally adjusted annual rate of 4.89 million units, the slowest sales pace on records going back to 1999.
The median price of a home sold in January slid to $201,100, a drop of 4.6 percent from a year ago.
The drop in sales and the fifth consecutive decline in prices underscored the continued pressure facing housing, which is struggling to emerge from its worst slump in a quarter-century.
Sales were weak in all parts of the country except the Midwest, where sales posted an increase of 3.4 percent. Sales dropped by 3.6 percent in the Northeast, 2.1 percent in the West and 0.5 percent in the West.
Sales of both existing homes and new homes tumbled for a second straight year in 2007 as the housing industry was battered by a severe credit crunch that hit in August as major financial institutions began reporting multibillion-dollar losses on their investments in risky subprime mortgages, loans made to homeowners with weak credit.
The market for subprime mortgages has essentially dried up and other types of loans have become harder to obtain as lenders have tightened their standards.
Lawrence Yun, chief economist for the Realtors, said he believed the housing market may be on the verge of bottoming out with a rebound expected to start toward the end of this year.
"Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales," he said.
He said he expected demand to be bolstered in coming months by the action of Congress in the economic stimulus bill to raise the caps on the size of loans that can be backed by Fannie Mae and Freddie Mac and the Federal Housing Administration.
The slump in housing that began in 2006 followed a boom period in which sales and prices had soared to record levels. Many economists believe that the sharp turnaround has severely depressed economic growth and boosted the odds that the country could fall into a full-blown recession.
The National Association of Realtors said Monday that sales of single-family homes and condominiums dropped by 0.4 percent last month to a seasonally adjusted annual rate of 4.89 million units, the slowest sales pace on records going back to 1999.
The median price of a home sold in January slid to $201,100, a drop of 4.6 percent from a year ago.
The drop in sales and the fifth consecutive decline in prices underscored the continued pressure facing housing, which is struggling to emerge from its worst slump in a quarter-century.
Sales were weak in all parts of the country except the Midwest, where sales posted an increase of 3.4 percent. Sales dropped by 3.6 percent in the Northeast, 2.1 percent in the West and 0.5 percent in the West.
Sales of both existing homes and new homes tumbled for a second straight year in 2007 as the housing industry was battered by a severe credit crunch that hit in August as major financial institutions began reporting multibillion-dollar losses on their investments in risky subprime mortgages, loans made to homeowners with weak credit.
The market for subprime mortgages has essentially dried up and other types of loans have become harder to obtain as lenders have tightened their standards.
Lawrence Yun, chief economist for the Realtors, said he believed the housing market may be on the verge of bottoming out with a rebound expected to start toward the end of this year.
"Subprime loans and other risky mortgage products have virtually disappeared from the marketplace, and over the past five months, this has been reflected in soft but fairly stable home sales," he said.
He said he expected demand to be bolstered in coming months by the action of Congress in the economic stimulus bill to raise the caps on the size of loans that can be backed by Fannie Mae and Freddie Mac and the Federal Housing Administration.
The slump in housing that began in 2006 followed a boom period in which sales and prices had soared to record levels. Many economists believe that the sharp turnaround has severely depressed economic growth and boosted the odds that the country could fall into a full-blown recession.
Sunday, February 24, 2008
We always get what we accept in our life's, no doubt about it.
I love to eat out and some times the meal comes and it is not prepared the way I requested it.
Most people say nothing and when asked by their server how the mealis will reply Fine,
Not me.
I will not hesitate to send a dish back if it is not prepared as requested.
Now this occasions are rare but it does happen
You get in life what you accept.
Most people never send anything back and will eat whatever is brought out to them and never say a word to their server or the owner who stops by to check on how they are enjoying the meal.
They just accept whatever is brought out and afterwards take their business elsewhere and never eat there again.
Most owners know this and would rather you speak up if something is not exactly right with your meal because they that the people who are not satisfied and say nothing do not come back and they lose a customer.
Yet some folks will just accept whatever it is , no matter how bad it is, say nothing but never return.
Everybody loses in that situation. Why am I talking about this today?
Well, how does this example relate to your life in 2008?
What things in life were you served that you readily accepted and said nothing about?
Who served you up a plate of criticism that held you back in 2007?
How about the plate of fear that came out steaming hot that you did not send back?
Every day, people are serving us stuff that we have to be smart enough and tough and wise enough to say no to.
Some of you were served the plate of "who do you think you are having a dream that big?
Or "who are you trying to kid with becoming a real estate investor"
It does not matter how ridiculous it is, people always love to serve it up, the more negative the better it is.
And people just sit there and accept it and never send it back.
You get in life what you accept.
Remember, the number 1 passion of people who do not have dreams is to destroy and cut down the dreams of others who have the guts enough to dream and believe in themselves.
They do not have the guts to have a dream so now their time is spent belittling those that do.
When this happens to you in 2008 , send that mess back to where it came from.
You deserve to be honored, loved and respected as do your dreams.
Accept only the best in every area of your life in 2008, even in the little things.
Most people say nothing and when asked by their server how the mealis will reply Fine,
Not me.
I will not hesitate to send a dish back if it is not prepared as requested.
Now this occasions are rare but it does happen
You get in life what you accept.
Most people never send anything back and will eat whatever is brought out to them and never say a word to their server or the owner who stops by to check on how they are enjoying the meal.
They just accept whatever is brought out and afterwards take their business elsewhere and never eat there again.
Most owners know this and would rather you speak up if something is not exactly right with your meal because they that the people who are not satisfied and say nothing do not come back and they lose a customer.
Yet some folks will just accept whatever it is , no matter how bad it is, say nothing but never return.
Everybody loses in that situation. Why am I talking about this today?
Well, how does this example relate to your life in 2008?
What things in life were you served that you readily accepted and said nothing about?
Who served you up a plate of criticism that held you back in 2007?
How about the plate of fear that came out steaming hot that you did not send back?
Every day, people are serving us stuff that we have to be smart enough and tough and wise enough to say no to.
Some of you were served the plate of "who do you think you are having a dream that big?
Or "who are you trying to kid with becoming a real estate investor"
It does not matter how ridiculous it is, people always love to serve it up, the more negative the better it is.
And people just sit there and accept it and never send it back.
You get in life what you accept.
Remember, the number 1 passion of people who do not have dreams is to destroy and cut down the dreams of others who have the guts enough to dream and believe in themselves.
They do not have the guts to have a dream so now their time is spent belittling those that do.
When this happens to you in 2008 , send that mess back to where it came from.
You deserve to be honored, loved and respected as do your dreams.
Accept only the best in every area of your life in 2008, even in the little things.
Friday, February 1, 2008
Foreclosed-upon home, even ones....
... needing repair, can be a promising option for owner-occupant buyers.
Investors have been in the market for rehabilitating properties for years now. New buyers have entered the rehab market of late, however, and they are not in it merely for fun or profit. These buyers are looking at foreclosed-upon homes, even ones that need fixing up, to move into themselves.
With an ever-increasing number of foreclosed-upon homes entering the market -- about 750,000 in 2007, -- you may be interested in purchasing a foreclosed home in need of work, if you are going to live there.
Many buyers are afraid of further price declines if they buy a home at today's market value. In some cases, buyers simply can't afford a market-value home -- but they can afford the price of a foreclosed-upon home and the repair costs.
You must be familiar with options for the combination of construction and mortgage financing that you may need and how the process will work.
Financing options (borrow up to $25,000 without banks, tap here)
Owner-occupied buyers are not treated the same way as investor buyers. These buyers often are not inclined to pay the types of rates and fees a hard-money lender would offer.
Therefore, you are left with three options:
1. Private construction loans with a single or double close: Many banks have their own construction-loan products, and they typically offer a choice between a single or double close.
Single-close loans start at a higher "construction rate," and then, once the work is certified as completed, the rate drops for the life of the loan. With a double-close loan, borrowers close on a construction loan and then return to close a second end-loan for the home once work is complete.
2. Federal Housing Administration (FHA): FHA has two options for you. The standard FHA-backed loan, with a small repair escrow attached, will work for properties where needed repairs are limited to a few-thousand dollars and the appraisal supports the increased home value. To complete the funding, you will need to get three competitive contractor bids for completing the work and escrowing the funds.
If repairs exceed $5,000, however, then you will be eligible for the FHA 203(k). The 203(k) program has one significant additional requirement: the FHA-approved 203(k) consultant. Clients must pay for the consultant in advance and work with the consultant throughout the funding process.
Although a consultant creates an extra safeguard for clients, this person can also mean extra paperwork for the broker and additional delays.
3. Government-sponsored-enterprise (GSE) loans: Standard agency loans may be the best option for foreclosure buyers. GSEs offer single-close options with one low rate for the life of the loan. In addition, with the Fannie Mae HomeStyle product, borrowers can receive renovation funding equal to 50 percent of the "as completed" value of the home.
This can work in the borrowers' favor because with foreclosed homes there is typically a large discrepancy between the home's purchase price and its as-completed value. Therefore, a GSE loan may allow the borrowers to get their home with a minimal amount of cash invested upfront and give them a good equity position at the end of construction.
The loan process
When you find a home, you need to decide if it is viable from an economic perspective.
Is the home livable in its current condition? Has the home been damaged by fire? Is there evidence of mold? Is the home condemned?
A property that looks bad in photos will have a hard appraisal review and will need additional inspections -- if the loan even survives the review. If the property is fire-damaged, you'll likely need additional engineering reports. A property with mold might need an estimate for remedy costs and additional environmental certifications. If the property is condemned, the bank will want the condemnation lifted before it will finance.
You should know about the possibility of these additional fees. If the house is condemned, then you probably can't get traditional financing and should look for another home or consider using a hard-money lender.
If the property is a good candidate for bank financing, you need to get a contract with the bank of sufficient length to process the loan. Although construction loans normally take about 45 days, a 60-day contract is usually the best option. It allows for extra time for back and forth between the bank and the contractor, if needed.
Once a contract is in place, you need to get a bid from a bonded and licensed contractor and get a corresponding budget. The contract needs to specify the work to be completed and the phases of the project. The proposed budget must accurately follow this contract. You must prepare a credit package and send this to the bank, in addition to a separate project package containing the contract and budget.
The most common problem at this stage is reconciling the budget to the contract and ensuring that the contract adequately explains the work needed. Contracts and budgets do not need to include minutia such as nails or screws, but they do need to include things such as fixtures and the level of finishing that will be done in every phase.
Problems can also arise if you and the contractor start revising the contract verbally before closing. This happens frequently, and you must strongly guard against this. Everything should be in writing, and the contract the bank gets should reflect all work to be done.
You should never assume anything related to contractors and should always ask for clarifications. Have your attorney review all contracts.
After the final project approval and your credit-file conditions clear, you will receive your cost-to-complete information and can schedule a closing. The closing will reflect the construction money to be escrowed, along with inspection fees and other documents related to construction draws.
As the housing crisis continues and foreclosures mount, owner-occupant buyers will recognize the tremendous equity and safety they can gain from buying homes needing renovation.
Technorati Profile
Investors have been in the market for rehabilitating properties for years now. New buyers have entered the rehab market of late, however, and they are not in it merely for fun or profit. These buyers are looking at foreclosed-upon homes, even ones that need fixing up, to move into themselves.
With an ever-increasing number of foreclosed-upon homes entering the market -- about 750,000 in 2007, -- you may be interested in purchasing a foreclosed home in need of work, if you are going to live there.
Many buyers are afraid of further price declines if they buy a home at today's market value. In some cases, buyers simply can't afford a market-value home -- but they can afford the price of a foreclosed-upon home and the repair costs.
You must be familiar with options for the combination of construction and mortgage financing that you may need and how the process will work.
Financing options (borrow up to $25,000 without banks, tap here)
Owner-occupied buyers are not treated the same way as investor buyers. These buyers often are not inclined to pay the types of rates and fees a hard-money lender would offer.
Therefore, you are left with three options:
1. Private construction loans with a single or double close: Many banks have their own construction-loan products, and they typically offer a choice between a single or double close.
Single-close loans start at a higher "construction rate," and then, once the work is certified as completed, the rate drops for the life of the loan. With a double-close loan, borrowers close on a construction loan and then return to close a second end-loan for the home once work is complete.
2. Federal Housing Administration (FHA): FHA has two options for you. The standard FHA-backed loan, with a small repair escrow attached, will work for properties where needed repairs are limited to a few-thousand dollars and the appraisal supports the increased home value. To complete the funding, you will need to get three competitive contractor bids for completing the work and escrowing the funds.
If repairs exceed $5,000, however, then you will be eligible for the FHA 203(k). The 203(k) program has one significant additional requirement: the FHA-approved 203(k) consultant. Clients must pay for the consultant in advance and work with the consultant throughout the funding process.
Although a consultant creates an extra safeguard for clients, this person can also mean extra paperwork for the broker and additional delays.
3. Government-sponsored-enterprise (GSE) loans: Standard agency loans may be the best option for foreclosure buyers. GSEs offer single-close options with one low rate for the life of the loan. In addition, with the Fannie Mae HomeStyle product, borrowers can receive renovation funding equal to 50 percent of the "as completed" value of the home.
This can work in the borrowers' favor because with foreclosed homes there is typically a large discrepancy between the home's purchase price and its as-completed value. Therefore, a GSE loan may allow the borrowers to get their home with a minimal amount of cash invested upfront and give them a good equity position at the end of construction.
The loan process
When you find a home, you need to decide if it is viable from an economic perspective.
Is the home livable in its current condition? Has the home been damaged by fire? Is there evidence of mold? Is the home condemned?
A property that looks bad in photos will have a hard appraisal review and will need additional inspections -- if the loan even survives the review. If the property is fire-damaged, you'll likely need additional engineering reports. A property with mold might need an estimate for remedy costs and additional environmental certifications. If the property is condemned, the bank will want the condemnation lifted before it will finance.
You should know about the possibility of these additional fees. If the house is condemned, then you probably can't get traditional financing and should look for another home or consider using a hard-money lender.
If the property is a good candidate for bank financing, you need to get a contract with the bank of sufficient length to process the loan. Although construction loans normally take about 45 days, a 60-day contract is usually the best option. It allows for extra time for back and forth between the bank and the contractor, if needed.
Once a contract is in place, you need to get a bid from a bonded and licensed contractor and get a corresponding budget. The contract needs to specify the work to be completed and the phases of the project. The proposed budget must accurately follow this contract. You must prepare a credit package and send this to the bank, in addition to a separate project package containing the contract and budget.
The most common problem at this stage is reconciling the budget to the contract and ensuring that the contract adequately explains the work needed. Contracts and budgets do not need to include minutia such as nails or screws, but they do need to include things such as fixtures and the level of finishing that will be done in every phase.
Problems can also arise if you and the contractor start revising the contract verbally before closing. This happens frequently, and you must strongly guard against this. Everything should be in writing, and the contract the bank gets should reflect all work to be done.
You should never assume anything related to contractors and should always ask for clarifications. Have your attorney review all contracts.
After the final project approval and your credit-file conditions clear, you will receive your cost-to-complete information and can schedule a closing. The closing will reflect the construction money to be escrowed, along with inspection fees and other documents related to construction draws.
As the housing crisis continues and foreclosures mount, owner-occupant buyers will recognize the tremendous equity and safety they can gain from buying homes needing renovation.
Technorati Profile
Saturday, January 26, 2008
Misconceptions About Mortgage Rates' Driving Forces Can Cost Borrowers
Each time the Federal Reserve cuts interest rates, borrowers converge upon their mortgage representatives expecting lower interest rates. Unfortunately, they find that mortgage rates often rise after the Fed cuts rates, and those who have held off on refinancing or locking rates thinking a Fed rate cut will reduce mortgage rates, are actually faced with higher rates than before the Fed's rate reduction.
Consumers who are looking to get the best mortgage rates need to understand that the Federal Reserve can only control the discount rate and the Fed funds rate, which are both very different from mortgage rates. Borrowers are constantly mistaken in thinking that rate cuts by the Fed will result in lower mortgage interest rates. That simply isn't the case.
Another common misconception is that mortgage rates are directly related to 30-year Treasury bonds or 10-year Treasury notes. "Both 30- year Treasury bonds and 10-year Treasury notes are government securities and backed by the full faith and credit of the U.S. government. They have no direct effect on mortgage rates.
Mortgage rates are based solely on mortgage backed securities. The trading performance of mortgage backed securities, which are issued by Fannie Mae and Freddie Mac, determine the direction of mortgage rates. Finding the catalyst that causes mortgage bonds to move will give consumers the keys to finding out what makes mortgage rates rise and fall.
Inflation is a key factor in pricing long-term bonds, because inflation erodes future returns. Since bonds pay out a set amount over a long period of time, that amount will be less valuable in future markets, especially if inflation is high. Because bond investors are very aware of this, they will require a higher rate of return or interest on their investment to compensate them if they feel that inflation will be increasing.
To understand the relationship between bond prices and mortgage rates, first put yourself in the position of a mortgage bondholder, like a mortgage lender. If it looks like inflation is going to cut away at the value of your bonds, you'll need to charge more interest on the mortgage loans you generate in order to compensate for that lowered value on the bonds. So if you anticipate increases in inflation, perhaps caused by the Federal Reserve lowering rates, you'll probably be raising mortgage rates in response. Therefore, because rate hikes by the Fed are designed to slow inflation, that is actually very good news for bondholders or mortgage lenders. A Fed rate hike can actually help reduce mortgage rates.
The Fed's rate cuts stimulate the economy by making borrowing cheaper, which in turn gives vendors the ability to increase prices. That leads to inflation, which erodes the value of long term bonds and more specifically, of mortgage bonds. When MBS values are in jeopardy, mortgage rates tend to rise.
While these key factors are better indicators of mortgage rates, borrowers and homeowners should remember that there is no surefire way to predict the market.
Keep an eye on the MBS market, but also bear in mind that the best rates may be behind us. Mortgage rates are still low, and we could see some quick dips. Borrowers should always consult a qualified mortgage planner who can advise on any market changes. If you're looking to refinance, be prepared to act, so you can make the most of any lower rates while they last.
Consumers who are looking to get the best mortgage rates need to understand that the Federal Reserve can only control the discount rate and the Fed funds rate, which are both very different from mortgage rates. Borrowers are constantly mistaken in thinking that rate cuts by the Fed will result in lower mortgage interest rates. That simply isn't the case.
Another common misconception is that mortgage rates are directly related to 30-year Treasury bonds or 10-year Treasury notes. "Both 30- year Treasury bonds and 10-year Treasury notes are government securities and backed by the full faith and credit of the U.S. government. They have no direct effect on mortgage rates.
Mortgage rates are based solely on mortgage backed securities. The trading performance of mortgage backed securities, which are issued by Fannie Mae and Freddie Mac, determine the direction of mortgage rates. Finding the catalyst that causes mortgage bonds to move will give consumers the keys to finding out what makes mortgage rates rise and fall.
Inflation is a key factor in pricing long-term bonds, because inflation erodes future returns. Since bonds pay out a set amount over a long period of time, that amount will be less valuable in future markets, especially if inflation is high. Because bond investors are very aware of this, they will require a higher rate of return or interest on their investment to compensate them if they feel that inflation will be increasing.
To understand the relationship between bond prices and mortgage rates, first put yourself in the position of a mortgage bondholder, like a mortgage lender. If it looks like inflation is going to cut away at the value of your bonds, you'll need to charge more interest on the mortgage loans you generate in order to compensate for that lowered value on the bonds. So if you anticipate increases in inflation, perhaps caused by the Federal Reserve lowering rates, you'll probably be raising mortgage rates in response. Therefore, because rate hikes by the Fed are designed to slow inflation, that is actually very good news for bondholders or mortgage lenders. A Fed rate hike can actually help reduce mortgage rates.
The Fed's rate cuts stimulate the economy by making borrowing cheaper, which in turn gives vendors the ability to increase prices. That leads to inflation, which erodes the value of long term bonds and more specifically, of mortgage bonds. When MBS values are in jeopardy, mortgage rates tend to rise.
While these key factors are better indicators of mortgage rates, borrowers and homeowners should remember that there is no surefire way to predict the market.
Keep an eye on the MBS market, but also bear in mind that the best rates may be behind us. Mortgage rates are still low, and we could see some quick dips. Borrowers should always consult a qualified mortgage planner who can advise on any market changes. If you're looking to refinance, be prepared to act, so you can make the most of any lower rates while they last.
Tuesday, January 15, 2008
Ways People Prevent Foreclosure
A short sale is one of many ways a homeowner can prevent a foreclosure. Whether you are an investor or homeowner you should know and understand all of your options. A short sale is often the best option available to the homeowner but knowing all options is in the best interest of all parties so an informed decision can be made.
For the purpose of instruction we will assume you are a homeowner facing foreclosure.
Foreclosure Rules
Rule #1: Contact your lender right away to discuss your options.
Rule #2: Never ignore the lender's letters or phone calls.
Rule #3: Ask the lender for a reinstatement or repayment plan.
Rule #4: Know your options
Reinstatement
Reinstatement might be possible when you are behind in your payments but can promise a lump sum to bring payments current by a specific date. Call the lender and ask to speak with the workout department. The lender would prefer to have the loan reinstated and have you stay in the home then to foreclose on the property.
Repayment Plan
If your account is past due, but you can now make payments, the lender may agree to let you catch up by adding a portion of the past due amount to a certain number of monthly payments until your account is current.
Example. You fall 5 payment behind on your house
Private Money Loan Up To $25,000
A Private Money Loan is often the best solution for the homeowner because it allows them to bring the other loans current. Most private money lenders require a total loan to value ratio below 75% and are equity based lenders meaning more importance is placed on the house securing the debt than a personal credit rating. Make sure you are dealing with a private money lender like ours and not a mortgage broker, bank, or hard money lender(all of these may charge exorbitant points and fees costing you more money). With a private money lender you keep the ownership of your house, borrow only what you need, and can repair your credit over time.
Sell Your House To An Investor
If 1, 2, & 3 are not an option then you can sell your house to an investor. On average a seller nets 85% of the sales price after taking into consideration all selling, closing, & misc. expenses. An investor will expect to make a reasonable profit but can close quickly with cash or may take over existing debt & bring the loan current. A credible investor closes quickly which starts rebuilding your credit immediately and may put cash in your pocket depending on your equity. If you have little/no equity see #6.
Sell Your House and Lease Option Back
This is a very popular option and must be done by a willing investor. Typically the investor takes over the existing debt or gets new financing then gives the seller the option to buy the property back at a later date for a higher amount. The seller gets to stay in the house and make reasonable lease payments while rebuilding their credit. Done right this can be a solution but the disadvantage is you lose ownership of the house and tax write offs. Another option that may be less expensive is getting a Private Money Loan. If you have little or no equity an investor may be able to do a short sale(see #6) then lease option the house back to you.
NOTE: We are not a big fan of lease optioning the home back to the owner because unless it is done correctly there is too much that can go wrong at a later date. We mention it here to cover all the options.
Short Sale
A short sale is when an investor purchases a property conditioned upon the lender discounting the loan(s) to a lower amount. This may be the only solution for sellers that have little or no equity or are over financed owing more than the value of the property. Make sure you work with a credible investor experienced in short sales. Do not do business with anyone that guarantees or promises results- they simply can't because there is no way of knowing what discount a lender will accept. Many times acceptance will not occur until just before the foreclosure date. Note: If you have little or no equity it is important to start working with a credible investor ASAP because the short sale process takes time.
List The Property With A Realtor
This is the option of last resort. FACT: there are thousands of houses listed on the MLS that Realtors can't sell. Average days on the market continues to climb! The foreclosure process limits the time you have to sell. You simply don't have the time. Realtors do not understand options 3, 4, 5, and 6. Realtors increase your costs with exorbitant commissions and most seasoned investors avoid working with Realtors on short sales.
Or sell to us, tap here now, and we'll see what we can do for you.
For the purpose of instruction we will assume you are a homeowner facing foreclosure.
Foreclosure Rules
Rule #1: Contact your lender right away to discuss your options.
Rule #2: Never ignore the lender's letters or phone calls.
Rule #3: Ask the lender for a reinstatement or repayment plan.
Rule #4: Know your options
Reinstatement
Reinstatement might be possible when you are behind in your payments but can promise a lump sum to bring payments current by a specific date. Call the lender and ask to speak with the workout department. The lender would prefer to have the loan reinstated and have you stay in the home then to foreclose on the property.
Repayment Plan
If your account is past due, but you can now make payments, the lender may agree to let you catch up by adding a portion of the past due amount to a certain number of monthly payments until your account is current.
Example. You fall 5 payment behind on your house
Private Money Loan Up To $25,000
A Private Money Loan is often the best solution for the homeowner because it allows them to bring the other loans current. Most private money lenders require a total loan to value ratio below 75% and are equity based lenders meaning more importance is placed on the house securing the debt than a personal credit rating. Make sure you are dealing with a private money lender like ours and not a mortgage broker, bank, or hard money lender(all of these may charge exorbitant points and fees costing you more money). With a private money lender you keep the ownership of your house, borrow only what you need, and can repair your credit over time.
Sell Your House To An Investor
If 1, 2, & 3 are not an option then you can sell your house to an investor. On average a seller nets 85% of the sales price after taking into consideration all selling, closing, & misc. expenses. An investor will expect to make a reasonable profit but can close quickly with cash or may take over existing debt & bring the loan current. A credible investor closes quickly which starts rebuilding your credit immediately and may put cash in your pocket depending on your equity. If you have little/no equity see #6.
Sell Your House and Lease Option Back
This is a very popular option and must be done by a willing investor. Typically the investor takes over the existing debt or gets new financing then gives the seller the option to buy the property back at a later date for a higher amount. The seller gets to stay in the house and make reasonable lease payments while rebuilding their credit. Done right this can be a solution but the disadvantage is you lose ownership of the house and tax write offs. Another option that may be less expensive is getting a Private Money Loan. If you have little or no equity an investor may be able to do a short sale(see #6) then lease option the house back to you.
NOTE: We are not a big fan of lease optioning the home back to the owner because unless it is done correctly there is too much that can go wrong at a later date. We mention it here to cover all the options.
Short Sale
A short sale is when an investor purchases a property conditioned upon the lender discounting the loan(s) to a lower amount. This may be the only solution for sellers that have little or no equity or are over financed owing more than the value of the property. Make sure you work with a credible investor experienced in short sales. Do not do business with anyone that guarantees or promises results- they simply can't because there is no way of knowing what discount a lender will accept. Many times acceptance will not occur until just before the foreclosure date. Note: If you have little or no equity it is important to start working with a credible investor ASAP because the short sale process takes time.
List The Property With A Realtor
This is the option of last resort. FACT: there are thousands of houses listed on the MLS that Realtors can't sell. Average days on the market continues to climb! The foreclosure process limits the time you have to sell. You simply don't have the time. Realtors do not understand options 3, 4, 5, and 6. Realtors increase your costs with exorbitant commissions and most seasoned investors avoid working with Realtors on short sales.
Or sell to us, tap here now, and we'll see what we can do for you.
Monday, January 14, 2008
Startling Predictions
As the U.S. economy slides into a protracted recession, baby boomers will recognize that they are poorer than their parents were when their parents were in their early sixties. Without the appreciation of a house to cash in on, they will give up their long-held dreams of retiring comfortably at 65.
Estate homes and multimillion-dollar condominiums will tumble in value, even below current prices. Many will be left vacant. It will take at least seven years for many of the properties that have been built in the past two years to be occupied. Investors in these properties will be wiped out.
More than 80 percent of the existing real estate development industry will go bankrupt.
Following real estate development will be the larger part of the banking and financial services industry. Thousands of young investment bankers and hedge fund managers will be out of work. This could happen as early as the middle of next year.
As the U.S. economy slides into a protracted recession, baby boomers will recognize that they are poorer than their parents were when their parents were in their early sixties. Without the appreciation of a house to cash in on, they will give up their long-held dreams of retiring comfortably at 65.
Now is the time to work with me at no cost, flipping properties, tap here
to get started now. You direct sellers to a website I give you and I do
the rest, but you get 50% of all profits and your cost is zero!
Estate homes and multimillion-dollar condominiums will tumble in value, even below current prices. Many will be left vacant. It will take at least seven years for many of the properties that have been built in the past two years to be occupied. Investors in these properties will be wiped out.
More than 80 percent of the existing real estate development industry will go bankrupt.
Following real estate development will be the larger part of the banking and financial services industry. Thousands of young investment bankers and hedge fund managers will be out of work. This could happen as early as the middle of next year.
As the U.S. economy slides into a protracted recession, baby boomers will recognize that they are poorer than their parents were when their parents were in their early sixties. Without the appreciation of a house to cash in on, they will give up their long-held dreams of retiring comfortably at 65.
Now is the time to work with me at no cost, flipping properties, tap here
to get started now. You direct sellers to a website I give you and I do
the rest, but you get 50% of all profits and your cost is zero!
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