Home » Real Estate

Learn The New Investing Secrets In The Post-bubble Real Estate Era

Nov 23, 2007
You would have to be living in a cave or tucked away on a deserted island somewhere in the middle of the Pacific Ocean not to know that the American real estate market has effectively fallen apart. Real estate investing techniques and strategies that have worked so well and for so long are no longer effective. If you want to continue making money in real estate today, you'll have to adjust your strategies accordingly, or risk being left behind in today's post-bubble market.

One such strategy is the short sale.

A short sale is nothing more than convincing the lender to accept an amount less than the current loan payoff amount as full payment for a property. Because real estate as we know it has changed so dramatically so quickly, banks are more motivated than ever to quickly unload these properties and get them off their books as soon as possible. The reason for this is really quite simple: Most banks are required to maintain cash reserves of up to six times the retail value of each real estate owned ("REO") on hand. Because an REO is actually a liability and not an asset - and there are so many of them - you have an unprecedented opportunity to simultaneously help a friendly banker as well as yourself.

Here's how it works.

Once you've located a distressed property owner and have convinced them that letting you solve their real estate problem is in their best interest, you'll need to prepare a real estate sales contract (signed by you and the homeowner) reflecting the amount you wish to offer the bank.

In addition, you'll also need some additional documentation for the bank's Loss Mitigation Department: A cover letter that fully explains your offer and the reasons why you simply can't offer full price for the property. If you've properly done your homework, the accompanying documents will help build your case. I'm talking here about area comp sheets, photos of the property that highlight the negative aspects of the property, a hardship letter from the property owner explaining the severity of their current financial situation, as well as a HUD-1 net sheet showing the lender exactly how much money they'll be left with after all expenses - closing costs, taxes, etc. - have been paid.

One last item you'll fax to the lender is critical to your offer. You need to send them a list detailing all needed repairs - and the associated costs - to help your offer seem even more practical. You don't have to tell the lender that the property is falling down. The estimate will do that for you.

Keep in mind: the lender doesn't want property back. You're doing them a favor by taking it off their hands. Because they're in business to make money from interest and not owning real estate, they're not going to try to get as much money as they possibly can from the property. Banks are far more interested in getting REO's off their books and freeing up the cash reserves requirement.

While the bank could conceivably finance the property for you, don't count on it. So be prepared to provide your own financing source either through your own bank or an alternative lending source that you've already lined up.

The new reality in real estate is that there is plenty of money to be made by investors who are prepared to seize the opportunity. Short sales are a great way to do this. As long as the foreclosure rate is rising faster than gas prices, you stand to have an almost unlimited profit potential. You can capitalize on these opportunities when they present themselves by lining up a ready supply of private lenders that are able to provide the cash you need at a moment's notice. Then you can truly build your American Dream.
About the Author
Mike Lautensack is a real estate entrepreneur and creator of the Private Lender PowerPoint Presentation Kit. This kit is loaded with tools and techniques to attract a consistent stream of private investors. To learn more about this powerful step-by-step kit go to http://www.RealEstateWealthToday.com.
Rating:
Please Rate:
(Average: Not rated)
Views: 113
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Accounting
    • Credit
    • Currency Trading
    • Debt Consolidation
    • Insurance
    • Investing
    • Leasing
    • Loans
    • Mortgage
    • Mutual Funds
    • Personal Finance
    • Stock Market
    • Structured Settlements
    • Taxes
    • Wealth Building
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources