If you’ve been investing in mortgage pre-foreclosure homes with little success, you may want to look into switching up your game plan and investing in houses with unpaid property taxes instead. Why? One simple reason: they rarely, if ever, are encumbered by a mortgage.

Houses with unpaid property taxes that make it all the way to tax sale have a few things in common.

First of all, they’ve had ample opportunity to be “saved” by their mortgage companies. Normally, if a house has unpaid property taxes and is in danger of being sold at tax sale, the mortgage company will come in and pay the taxes to avoid losing their stake in the property. More often than that, mortgage payments include property tax- so those houses would never end up with unpaid property taxes. (more…)

Private home sellers or those selling by owner are often unaware of the power of a conversation and are losing out on home sales everyday, and sadly they will not know why. Typically the seller who has lost the attention of a potential buyer will have thought this was purely down to the property on offer. In fact in many cases it may have been down to the individual selling the home, blissfully unaware that it was their conversation that lost the sale. I am going to explain how you should converse with a potential buyer and how a seller can have a profound effect on the likelihood of a sale.

You can change someone’s life.

Buying and selling a home is recognised as one of the most stressful things a person can do, get it right and you are on the pathway to happiness, get it wrong and it could be the biggest mistake of your life. Home sellers need to learn that they are in a position of power, a buyer thinks you may have something they want and you could be about to change their lives. No wonder a buyer will hang on to each and every word. (more…)

I think I am going to write the government. I just figured out how to solve a huge problem in today’s economy. I just figured out how to fix the housing market. The answer is to pass a law that nobody in America can rent out a single family house. Renting will only be allowed to apartments.

The only thing you can do with a single family house other than live in it, is to sell it rent-2-own. The reasoning is simple. It will make everything easier. In a standard rental of a single family house, an owner wants to get a cash flow from the rental and they want the tenant to pay on-time every month and never bother them. In comparison, in a standard rental, a tenant wants to get into a house and pay rent and they want the house to function well and be problem free. That is in a perfect world, but what really happens is quite different. The tenant has problems with the house because after all, it is a house and things break in a house. It’s nobody’s fault that the things break (sometimes) but that’s what happens. (more…)

Okay, the real estate market has gone down and a quick rebound is not likely, or possible. Homeowners are finding viable options to continue to make money in the real estate market despite the recent changes. By adapting to the environment, savvy real estate investors are still flipping home properties with a twist. They are purchasing lower cost single family houses in areas of great potential and updating them. However, rather than putting them on the market for sale right away, these flippers are becoming landlords, renting the property to keep building equity and pay the mortgages.

How long are these new landlords renting their flipped houses for? On average, the versatile businesses are renting as long as five years or as short as only two until they can find a home buyer. They are keeping the cash from the rented properties in the short term, but are banking on the idea that an improved real estate market in the future will help them get the profits they are aiming for years down the road. Of course, this type of stalled profitability attracts a limited number of former flippers, but it is an increasing option for home buyers investors. (more…)

Open houses are the most common method for marketing your property. While the majority of sellers see this as an effective way to sell their properties, some find open houses as just a waste of time. Neighbors and curious visitors mob to your house and go around, checking your private living space. Most of these individuals have no intentions of purchasing your house. This can be hazardous, as some of these strangers are in fact thieves, wanting to inspect your house.

Some brokers opt to hold private open houses, where other brokers in the place tour the house, remember their clients. This is helpful for both the buyer and the seller. The buyer acquires info inside about a house from their broker as soon it is positioned on the market. The seller has the advantage of not having to bother about opening their doors to just anybody else along the street. (more…)

When prices are falling, it doesn’t pay to fix up houses. In a previous post, I explained why I am raising rents and selling my rentals when they become vacant and I can’t raise the rents. The same holds true for fixing up houses.

Because most of the houses I own are in “bubble” areas where prices rose very swiftly for 5 years before the current downturn, prices are now dropping about 2%-3% PER MONTH. Suppose I bought a 1500 square food “fixer” for $78,000 that needs about $20,000 and a month to fix it up prior to offering it for sale. (more…)

Any time you are flipping houses it is less risky if you can complete the project more quickly. This is especially true now (2009) when prices may fall even further as you wait to sell the home. But at any time there are good reasons to move fast. One obvious one is that the faster you complete a project the sooner you can start the next.

Perhaps the biggest reason to move fast is that real estate always has holding costs. In fact, you might be paying out as much as $1,000 per month for interest, taxes, insurance and utilities while you are working on that home. This means a sale three months earlier for the same price nets you $3,000 more profit – the amount you didn’t have to spend to wait. (more…)

In my last post I was examining the profitability of buying a house in need of fix up to illustrate how major repair just isn’t feasible in a falling market unless a house can be bought for truly rock bottom prices. In the foregoing illustration, a house was bought for $75,000 and sold for $115,000 in six months for a meager profit. how could this be made more profitable?

First of all, I try to look at houses from the perspective of their cost per square foot, with not value allocated to the land they sit on. If a house is a “fixer”, I want to be able to sell it for $70,000 per square foot after all costs in a market where competing MLS houses are priced at $100,000. This means that a 1500 square foot house would be priced at $105,000 net to me. This guarantees a quick sale and easy loan approval. (more…)

There’s some money to be earned buying and selling real property, especially REOs, or real estate owned. These are real properties foreclosed by banks and unredeemed by the former owners within the allotted redemption period. Therefore they are now assets owned the bank and may be sold to interested buyers, the former owners included, at usually prices relatively lower than those in the regular real estate business. So the profit potential can be substantial for the intrepid broker.

However, dealing with banks on the matter of REOs can be very frustrating: banks are often terribly painful where REOs are concerned. When a REO property goes for sale, it is usually sold through bidding. The list of REOs is published or posted and a minimum bid is indicated for each piece of property as well as the end date of the bidding. The interested buyer then submits his bid for that property, not knowing if there are competing other bids or none at all.

That’s easy as pie and buying an REO should thus not be a hassle at any stage. But it is, in almost every aspect. Consider my recent example:

A REO came on the market, my first-time homebuyer bid. The bank sent him a series of counteroffer letters stating in effect he should make his ‘best and highest’ bid. The buyer might have been bidding only against himself, because if there were other bids they were not disclosed by the bank to my buyer, but he nevertheless submitted his ‘highest and best’ bid and ‘won’. We requested for an early sales closing and my buyer proceeded to arrange for his loan to purchase the REO property.

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Foreclosures on mortgaged properties happen quite often, but banks and owners do not desire such for simple reasons. The owner will lose his property, while the bank gains something it does not want, nor know what to do with. To forestall such an event, short selling may be the answer to benefit all parties concerned. But it is quite a hassle to do.

Short selling involves much physical work and paper pushing. Even if someone else handles the negotiations, phone calls and paperwork, there is still much labor and some possible frustration in store for the unprepared broker or agent. However, as in many things, there are always ways to make a success out of it. The first requirement is the willingness and desire to help the homeowner.

Even if they personally approached the brokers to sell their home, most homeowners who are in danger of being foreclosed on avoid talking to a stranger about their mortgage problems. This is usually for fear of being preyed upon, in the hope that something will come along to solve the problem, and to minimize the chances of their problems being ‘broadcast’ to others. Being sincere in trying to help them can open them up so that the broker can get the complete picture of the potential sales.

The second requirement in making a success of short-selling a house is to tread very carefully in exploring the reasons the owners are selling for the reasons stated above. Asking less personal questions that should reveal the reasons for selling can lead the conversation to the motivations, so that the parameters of the sales can be determined more quickly. “Why sell”, “At what prices do you believe your property should be sold”, “How fast would you need to sell?” are easy questions that can be important in finding the best way to sell the property.

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