FAQ: Answers To The Most Asked Questions - Start Here

While I understand your reasoning, 6 months may be valuable time wasted at this time in history. Yes, you must have a certain understanding of what you're doing, but don't let that hold you back from taking action. Learn as fast as you can, and GET OUT THERE! Like Dean said, "Fake it 'til you make it". Start practicing, and then go for it! NO RISK means NO SUCCESS! You have a whole DG family behind you and all the tools that Dean has provided. All you need is the confidence to use them! I am living proof of that. I used to be scared to try ANYTHING new in REI, til I came to this site!

So, like Anita's new signature line says, Just Do It!!
I look forward to the success of everyone here.

Rina

I'm in a unique situation where I am leasing a property with the first right of refusal to purchase at the end of the lease term. The property is located in Montana and is considered to be prime property with creek frontage and a commercial/residential zoning. The property was offered to me about $70,000 under last years appraisal which was actually a residential appraisal (commercial would bring in a higher appraisal). I don't have great credit and the mortagage amount would be higher than what our debt to income would support.

The question is...What would be the best way for me to capitalize on this situation?

I've been reading Dean's book and have spent some time on this site and know this is going to be a great place to pick some brains so all ideas are appreciated and welcomed!!!

Thanks Everyone,

Linda

Hi my name is Justin. I'm 19 years old and just moved in with my girlfriend. We've been looking at the real estate programs on tv and decided to get dean's book. I read it but i still have a few questions. I dont have any credit and not sure if i can get a loan at such a young age. I have not heard of any younger people doing this yet.I would love to get in this business to make a better life for us. I made a really regretful mistake by quitting school. And i wanna get on the right track. So if anybody has any advice, please write back.

Thanks,

Justin Freeman

I personally would just get that property "UNDER CONTRACT" and ASSIGN it to someone who can do something profitable with it, like another Investor, If you Market the property well, you should have multiple people interested in it. You should recieve a NICE "ASSIGNMENT FEE" out of it, SULLY

Welcome to the DG family, we're glad that you joined us and made a decision to take the big step, now is the best time to start your REI journey. You absolutely can do this at 19!! You don't need credit or money, just the knowledge to get you started. Start building your buyer's list, find motivated sellers, use an agent that works with investors and knows your needs. I wish you all the best, browse around and read some of the other young investors posts, it's a great resource.

God bless you,

I've been reading other posts on the site that refer to assignment but haven't got the big picture on that yet. So I should try to line up interested parties and pre-determine an assignment fee for myself?

Thanks for your help!!!

Linda

Yup, pretty much, just read up on ASSIGNMENTS, what the steps are from start to finish, SULLY

Hi Justin, you are young, and could still do this real estate business and continue your education. In regards to other questions you may have, the answers may be in the threads on this site. However, if you feel you still do not quite understand something, feel free to ask. There are many experienced investors eager and ready to assist you. Concerning developing credit history, maybe consider opening a credit card as well as maybe one or two store account. For the stores, maybe home depot, or Lowe's since you may need to purchase supplies for fix up and any other you desire. You are in the right business and the right website. Justin, you and the lady friend are on your way to success. All the best and God Bless.

Sandra

How do I get a list of the REO property's banks has in my area. Colorado Springs Co. I would like to try working with this type of propery first. From reading this may be the easiest way for me to get my feet wet. Would I be able to pull this up on the foreclosure Alert System.

Anthony

Hello: I'm new to this. My question is once you locate a property on the F/C Alert program what's next. The preforclosures who do you contact? The attorney,lender,owner? Is there a special sequence to follow? And once it is forclosed, does it atomaticaly go to sheriff sale? And finally, What do the letters next deed category mean? U,M,O,Q THANKS,

Ok.... So I've read about being a Note Broker. As most of you know, to start.....you bring together a capital firm & someone willing to sell their sell-financed note...or other cash flow.

As a Note Broker...you make the difference. Has anyone done this? Or can provide feed back as to this opportunity.

Thanks......!

Hi Sully,

How would you know if a property is a good deal or not to put it under contract and assign it? Please give me an example.

Shonda

Hi. One way to get a list of bank foreclosures is to contact a real estate agent in your area. I was recently looking at houses here in northern California with the assistance of an RE agent. From what I undeterstand banks sell their foreclosures through RE agents.

And by the way, welcome to the dg forum.
___________________________________________________________

Michael B

Thats actually a GOOD question, In order to recognize a good deal from a bad deal, you need to be VERY familiar with the area in which you are investing, meaning, you will want to have a pretty good idea of what property values are throughout your local area. You do this by just looking in your local newspaper and spotting a propery for sale, let's say it's a FSBO and the asking price is $130,000 well, it only takes me about 3-5 minutes to find quick COMPS and VALUES, and if there's a BIG enough spread(between the ARV and the asking price) then i'll look into it further, keep in mind that, an asking price is an asking price, THAT'S IT! SULLY

Thank you, Sully

Shonda

Michael's right, a realtor can get them. However, if you don't have a realtor you can go to the county recorder's website and see the lis pendings filed daily, if you can't do it from the web, then go to the courthouse yourself. Keep in mind that once this information becomes public they start getting bombarded by investors and 'foreclosure assistance' companies.

By the way, welcome to the DG family, glad to have you here!

Good luck and God bless,

In this community, there are real estate companies, lenders, and websites that offer listings of properties that the lender and the seller have agreed to short sale. These lists are most valuable in that they save so much time for you and I by putting all the short sale properties for sale in one basket. Once in hand, it is easy to put in a drive order (organize by address) to facilitate time and travel. Since the lender and the property owner have already come to grips with the problem of short sale, it makes having this type listing the easier to do.

In reality, there is no really easy way to do real estate. A person still must do their due diligence and inspection of the home and area. The idea of having a power team and bird dogs to find properties can also facilitate short sales.

I have purchase deans but along with the deans list. I have recieved a lot of information but I too am not sure how to start. I have found a few foreclosures at a great price but I have no money and extremley bad credit. What do I do and is it possible to use someones elses credit or as a cosigner?

Thank You,
Patricia Jones

I have found four great properties and the owner is willing to finance with a very small down payment with no extra charges but I don't have the first dime to put down and do not qualify for a loan. With me being a student for the last 2 years I have no proof of income. Does anyone have any Ideas

Thank You
Patricia Jones

I have found a four plex in dallas that is an REO. I bought the Dean Graziosi book and have read it but don't know how to get started. I have no money and bad credit but this is a price that I can not pass up. What do I do? Could you please help me?

Hey Patricia, Got Questions?, lol, If your Absolutley sure it's a great deal, then get the Darn thing "UNDER CONTRACT" already! If you read dean's book then you should remember that you DON'T NEED good credit(although it does make it easier) or much money at ALL. Set an appointment to go look at the property and oh crap!, you said REO didn't you? Your going to probably need a PRE-APPROVAL LETTER to submit an offer on that four plex.

Here's what you need to do: start looking for properties that Need LOTS of work, major REHABS were talking here, also VACANT properties, start "driving for dollars" just get in your car and pick a town to start looking for UGLY, VACANT HOUSES, and find the owners and tell them you want to make an offer to buy their house, also look for FSBO's in your local newspaper, there are PLENTY of threads on this web site that will HELP you, start reading up on anything having to do with BIRDOGGING and WHOLESALING, SULLY

I am wondering if you take on a foreclosure and get a good deal. How can you then sell it and make money? Who wants to buy houses now? How do you actually make money after you buy the house for cheap. I am confused. I just ordered the book so I have not read it yet.

by Benny L. Kass
source: http://realtytimes.com/rtpages/20060904_creativefinance.htm

In a slow real estate market, sellers, potential buyers and real estate agents begin to think about creative financing. Last week, we explored installment sales. Another approach is known as a "wrap-around" (wrap) mortgage.
Here is how it works.

You want to sell your house for $500,000 and have an existing mortgage loan in the amount of $200,000, with an interest rate of 5 percent. You have found a buyer, who has sufficient income but may have difficulty obtaining a mortgage loan.

You agree to sell the house. At settlement, you will sign a deed over to the buyer which will be recorded on land records. Your buyer will give you $50,000 in cash at settlement and agrees to make the monthly mortgage payments on the first trust of $200,000.

However, your buyer will sign a promissory note to you in the amount of $450,000, which is the difference between the sales price and the $50,000 deposit. This loan will carry an interest rate of 6 percent, and the monthly payment, based on a 30 year amortization, will be $2,698.00. This note will be secured by a second deed of trust recorded against the property.

The buyer will make the monthly payments directly to you, and you will in turn continue to make your payments to your lender as you have in the past. From the buyer's point of view, these payments are just like they would be from any commercial mortgage lender, although at a lower interest rate. Additionally, the buyer will not have to pay the various lender closing charges.

The sellers, on the other hand, are making a small profit. They are paying off their old mortgage at the 5 percent rate, but are receiving 6 percent from their buyer. So the sellers will effectively receive more than the 6 percent which the buyer is paying.

More importantly, this may be the key to making the sale.

This kind of transaction is called a "wrap-mortgage" because the second trust is wrapped around the first. But as mentioned, there are risks:

First, the Seller must have an assumable mortgage on the property. While these are not common in today's economy, there are still many Veteran's Administration or FHA assumable loans on the books. And some adjustable rate mortgages are also assumable.

Otherwise, if and when the seller's lender learns that the property has been sold to a third party, that lender may decide to foreclose on the property, using the so-called "due on sales" clause.

There are, of course, people who will take a chance that the lender will either not learn of the sale, or will allow the assumption to go forward. But sellers must fully disclose the risks to their prospective purchasers.

Even if the seller's existing loan is fully assumable, what happens if the buyer defaults on the mortgage obligations to the seller? The seller might have to foreclose on the property, and should the buyer's opt for bankruptcy protection, this could take a long time to be resolved.

If the seller does not make the mortgage payment for whatever reason to the original lender, that lender can foreclose on the property. It must be noted that even though the buyer is on title, the prior lender remains in first place on the land records, and is legally in front of the buyer. Accordingly, buyers will insist that they receive proof that the mortgage payments are being made. Indeed, some buyers may even insist that a neutral party, such as a bank or an attorney, make the first trust payments.

Under a wrap-mortgage, the seller receives the benefits of the additional interest payments. Accordingly, sellers may insist that the buyer cannot prepay the loan without a penalty. Obviously, buyers may object to such a condition, since it inhibits their right to refinance or even sell the house.

What are the taxable consequences of such a transaction?

The second trust will be recorded on land records in the jurisdiction where the property is located. This allows the buyer to deduct all of the interest which is paid on a yearly basis. Additionally, since the buyer will be paying the real estate tax, this can also be deducted. However, there is a minor problem. If the original lender is escrowing money for the real estate tax, at the end of each year, the lender will send the IRS and the seller the appropriate 1099 form which shows the amount of interest received and the amount of taxes paid. These deductions properly belong to the buyer, however, so an explanation will have to be given to the IRS as to the nature of this transaction.

Under proper circumstances, a wrap-around mortgage is a potentially useful tool for both buyers and sellers. However, if the existing loan can be paid off by the seller, it would be best for the seller to go to settlement, and take back a first deed of trust.

Published: September 4, 2006

Hello everyone, first off I want to commend Sir Dean Graziosi for a great job in creating a helpful environment where people unconditionally share information and lend a helping hand. And to everyone who extends help, the universe has a way of getting back and yes, it will give back a thousandfolds to all of you who share!

I am in New York and just starting out and I am intested in buying a property for investing, specifically a rental property. I currently dont have a home, I am renting. I plan to buy in Upstate NY or Queens. Can anybody please help me if this will be possible,l considering my circumstances?

Thanks all any help would be appreciated. I just dont know where to start.

Hi Gina,

Bank should be flexible with days. Even if your mortgage paperwork is expired, they should be able to extend it, though the rate may not be locked.

J.

Hi Daynah,

In general, as many peopel said, best place to start is to read the forum, Dean's books.

Specifically, there is one place you might be interested. I used to live in Queens. I know the area. New York is a tax deed state, i.e. city will auction the properties for back taxes. That might be a place to look at, although I haven't spend much time on it.

Hi Jmeg, your reply is most appreciated, thank you very much.

Tax Deed Sale does that mean - TAX SALE? as well? Where do you think I can find the lisitngs of tax Deed sales?

Thanks a lot, really hope you can reply back.

It's one form of tax sale(tax lien v.s. tax deed). In NY, you get the deed. see http://en.wikipedia.org/wiki/Tax_deed_sale

I would check queens county tax collector, or whatever jurisdiction who collect the taxes. Let me know your findings. I am also interested.

J.

It seems like your allready putting up road blocks. Stop. I am also very new to this but you need to be doing something towards your goal everyday. Go look at some properties or set up your business there are many things that you will need to do. Just don't quit and you,ll make it. Everyone at one time was new to this. Good luck.

You can do whatever you want to do. But you can't stop what other people want to do.