2009 is almost over, 2010 is just over the horizon, and it’s the time of year to take stock and figure out what we did well, what we’d like to change, and what we’re just glad is going to be “last year” instead of “this year.”
One of the things I’m happiest about is how the Bird-dog program is growing and bringing success to our team. From time to time, I like to highlight people who have successfully brought deals to us here at RE Rebel HQ, and once again I’ve asked Joshua Ramey-Renk of The Farwalker Chronicles to step in as a guest blogger to do the interview and write up the story…take it away, Joshua!
Thanks, Larry! And thanks for the opportunity to make a guest appearance again with the Real Estate Rebel!
Let me introduce you Rebellious Readers to Francine S. Francine holds an MBA from a prestigious university, but that’s not how she’s making money with Larry and his group. I spoke with Francine about how she got into real estate and how she identified the property that Larry’s team is currently moving through the contract process.
“I’ve been interested in real estate for what seems like forever,” Francine told me, “As a means of wealth creation and a way to flesh out my investments. I had done well on a personal level buying and selling my own personal homes over the years, and thought I could do a good job as an actual investor, not just a homeowner. So far, it’s worked out nicely.” She’s also quick to point out that she likes keeping a lot of balls in the air, and real estate is just one of her many interests.
I was very curious about how Francine found the current property she turned over to Larry. The house is in Northern California, while she herself is based in the Los Angeles area. She acknowledges that it’s definitely a bit far out off her beaten path, which is one of the reasons she turned the lead over to Larry. “I got a call,” she says, “From a loan modification expert I’ve gotten to know over the past few years. He was working with a distressed property up north, and the modification process wasn’t going well for the owner. He suggested that a short-sale investor might be a good way to go, and asked if I was interested. It was too far away from where I live and work to think about doing anything with it myself but I wanted to do what I could to help the owner out. I had met Larry at a Real Estate investment seminar and really liked what he was trying to do. Since I knew he focused on the San Francisco Bay Area market and is a good guy, I had no hesitation connecting him with the property owner. As you can see, it’s working out well for everybody.”
Francine told me that networking, getting to know people, and being considered a good problem solver are critical to success in finding properties and building contacts in the industry. Even if the problem you’re solving isn’t one that seems directly related to your own activities. “I once,” she laughs, “Helped a mortgage broker figure out how to get a notarized signature from a man in jail. I wasn’t involved in the deal, but the issue intrigued me.”
You also need to think outside the box to find properties nobody else has looked at. While talking with her, Francine told me about a friend of hers who is involved in commercial real estate. Driving anywhere with him is an adventure, because he makes a point of always going a different route, exploring side streets, and generally taking longer than expected to get from point A to point B.
“But it pays off,” she says, “Often in the least suspected way. Once when we were driving through a neighborhood we’d never been in, we noticed a small hand lettered ‘For Sale’ sign on a little multi-unit complex, something that 99.99% of the people driving by would have missed. My friend insisted on stopping the car and gathering the information from the sign. It turned out there was a messy mortgage structure combined with a messier divorce, and he was able to pick up an excellent property for a significant bargain because the owner wanted it gone as fast and as discretely as possible.”
What other tips does she have for identifying potential properties that would be good ideas to bring to Larry’s group?
“Just keep your eyes and ears open, and be somebody that people think of as a go-to person for Real Estate issues. Even if you’re just a shoulder to cry on, a soft shoulder can mean more to people than all the financial analyses in the world.”
There’s not much more that be said on that front!
Back to you, Larry…
Well, my Rebellious Readers, with success stories like Francine’s being created all the time by our Bird-Dog team, I’m sure 2010 will be an amazing year for all of us.
May 2010 be filled with prosperity, happiness, and good fortune for you and all your loved ones!!
-Larry
Wednesday, December 30, 2009
Tuesday, December 22, 2009
December RANT-but not really
Those of you among my readership know that I like to take one day a month and go on a bit of a rampage. It's my reward for being such a good little rebel (well, if that's not a contradiction in terms) and playing nice the rest of the month.
You've read about my frustrations with policiticians, with bankers, with loan rehabilitation "Specialists", and with crazy people who wait too long to buy/sell/invest etc.
But not this month.
I spent a lot of last month visiting some of the most interesting, inspirational, and above all beautiful places in the world (visit me on Facebook to see pics). I was also reminded that time is fleeting, to all good (and bad) things there comes an end. So I'm in a bit of a reflective and forgiving mood.
And it's Christmas. No matter what your religion: Catholic, Jewish, Pagan, Wongawongan (ok, I made that one up) or even Atheist, it's a great thing once a year to just think good thoughts about people. Say Happy Holidays to your neighbor (even if he hasn't mown the lawn), your banker (even if she doesn't return your calls) and even the customer service people who can't answer your questions about loan modification (hey, they only know the script they're given, and they're tax payers too!)
So, in this world of stress and struggle and fear of foreclosure, I think I'll salute the ultimate rebellious spirit that lies within us all, finding cheer and happiness in the dark depths of winter.
Instead of ranting, I'd just like to wish everybody a wonderful holiday, especially the Wongawongans, and a joyous and bountiful New Year. Stay rebellious, stay alert, but stay positive!!
Rebelliously Cheerful,
Larry
You've read about my frustrations with policiticians, with bankers, with loan rehabilitation "Specialists", and with crazy people who wait too long to buy/sell/invest etc.
But not this month.
I spent a lot of last month visiting some of the most interesting, inspirational, and above all beautiful places in the world (visit me on Facebook to see pics). I was also reminded that time is fleeting, to all good (and bad) things there comes an end. So I'm in a bit of a reflective and forgiving mood.
And it's Christmas. No matter what your religion: Catholic, Jewish, Pagan, Wongawongan (ok, I made that one up) or even Atheist, it's a great thing once a year to just think good thoughts about people. Say Happy Holidays to your neighbor (even if he hasn't mown the lawn), your banker (even if she doesn't return your calls) and even the customer service people who can't answer your questions about loan modification (hey, they only know the script they're given, and they're tax payers too!)
So, in this world of stress and struggle and fear of foreclosure, I think I'll salute the ultimate rebellious spirit that lies within us all, finding cheer and happiness in the dark depths of winter.
Instead of ranting, I'd just like to wish everybody a wonderful holiday, especially the Wongawongans, and a joyous and bountiful New Year. Stay rebellious, stay alert, but stay positive!!
Rebelliously Cheerful,
Larry
Wednesday, December 16, 2009
Back on Dry Land-But I Miss My Vacation!
Temple at Ggantija (older than the pyramids and Stonehenge)
CADIZ, SPAINI just wanted to share a couple of pics from my recent vacation. Thanks to all who followed along on Facebook! If you haven't joined me there yet, click on the badge to the left and add me as a friend!
More tips, tricks, and Real Estate Rebellion coming shortly! (I was just reliving my vacation...good times...good times...)
Wednesday, December 2, 2009
End of the (tax) year tip for Buyers AND Sellers
OK, my rebellious crew...vacation is over, the boat is back in port, I've slept off my turkey-induced coma from last week, and it's time to get back to work. Especially as the end of the year approaches and we all start thinking of that dreaded season of spending too much money on too many things...no, I don't mean Christmas...I mean TAX SEASON.
So in a departure from my usual split between Buyer's Tip and Seller's Tip, I thought I'd toss out one for both sides.
The last day of the tax year for most of us is a mere 28 days away. If you're considering or in the middle of a sale of property, either as buyer or a seller, NOW (not later, NOW) is the time to talk to your accountant about what the tax implications are between closing before or after Dec. 31st.
The answer, in general, is "it depends." And that's why you need to talk to your accountant NOW. Because in a couple of weeks the Holiday insanity will be in full swing, and nobody wants to be a Scrooge and get their RE Agent out of bed on Dec. 26th in a panic because a deal needs to close in three days or credits will expire (fer instance) and nobody wants to duck a seller's calls through New Year's because they want a transaction booked in 2010 (fer another instance).
So get the question in now, talk to your tax guy/gal, and work with your opposite number (depending on if you're a buyer or a seller), and work out something that works for everybody. And go into the holidays knowing that all you have to worry about timing is the Turkey...the potatoes...the casserole..the green beans...the stocking stuffers...
Stay Rebellious!
-Larry
So in a departure from my usual split between Buyer's Tip and Seller's Tip, I thought I'd toss out one for both sides.
The last day of the tax year for most of us is a mere 28 days away. If you're considering or in the middle of a sale of property, either as buyer or a seller, NOW (not later, NOW) is the time to talk to your accountant about what the tax implications are between closing before or after Dec. 31st.
The answer, in general, is "it depends." And that's why you need to talk to your accountant NOW. Because in a couple of weeks the Holiday insanity will be in full swing, and nobody wants to be a Scrooge and get their RE Agent out of bed on Dec. 26th in a panic because a deal needs to close in three days or credits will expire (fer instance) and nobody wants to duck a seller's calls through New Year's because they want a transaction booked in 2010 (fer another instance).
So get the question in now, talk to your tax guy/gal, and work with your opposite number (depending on if you're a buyer or a seller), and work out something that works for everybody. And go into the holidays knowing that all you have to worry about timing is the Turkey...the potatoes...the casserole..the green beans...the stocking stuffers...
Stay Rebellious!
-Larry
Thursday, November 26, 2009
Location Location Location-Happy Thanksgiving
Hey Rebels!
I'm taking it slow this week and enjoying the last bit of my vacation, but I did want to wish everybody a Happy Thanksgiving and extend my best wishes to everybody as the holiday season kicks off!
Take a look at this place-gorgeous! Unfortunately, it's on a volcanic island I recently visited, and all the water has to be collected from rain and stored in underground cisterns. Now THAT is Green Architectural design!
I'm taking it slow this week and enjoying the last bit of my vacation, but I did want to wish everybody a Happy Thanksgiving and extend my best wishes to everybody as the holiday season kicks off!
Take a look at this place-gorgeous! Unfortunately, it's on a volcanic island I recently visited, and all the water has to be collected from rain and stored in underground cisterns. Now THAT is Green Architectural design!
I'll be back next week with the kick of for December's tips, tricks, rants and raves!
-Larry
Friday, November 20, 2009
Where are the refinance operations?
Well well well, the banks are making money again.
( http://www.cbsnews.com/stories/2009/07/17/business/main5167450.shtml )
OF COURSE THEY ARE, we bailed them out.
Remember that? The banks were failing, not just because of toxic assets, but because they made some bad decisions and then some more bad decisions, then they didn’t have the money to cover themselves, but we, with our tax dollars, propped them up and injected financing and kept many of them afloat.
But we did that for a reason.
That reason was mostly to help the American homeowner who, with the economic slump, was struggling with house payments, going into default on their mortgage, and getting evicted from their homes.
So those banks were supposed to do something with that cash infusion. They were SUPPOSED to start lending it again, and to work out refinance arrangements with the people struggling with mortgages.
Now, I’m in the San Francisco Bay Area, and while I’ve seen a lot of new bank signs going up to replace the ones that came down-basically the winners of the government give-aways replacing the losers, I’m not seeing that there are a lot of refinancing operations going full steam. I keep hearing and hearing and hearing stories like I’ve brought up here, poor customer service, refinance departments unavailable or not returning calls, etc.
So I just have one question-when do the banks take some of the money that they’re making again and do the job we-you and I and the other tax payers-have paid them to do?
Anyone?
Anyone?
Hmmm.
-Larry
( http://www.cbsnews.com/stories/2009/07/17/business/main5167450.shtml )
OF COURSE THEY ARE, we bailed them out.
Remember that? The banks were failing, not just because of toxic assets, but because they made some bad decisions and then some more bad decisions, then they didn’t have the money to cover themselves, but we, with our tax dollars, propped them up and injected financing and kept many of them afloat.
But we did that for a reason.
That reason was mostly to help the American homeowner who, with the economic slump, was struggling with house payments, going into default on their mortgage, and getting evicted from their homes.
So those banks were supposed to do something with that cash infusion. They were SUPPOSED to start lending it again, and to work out refinance arrangements with the people struggling with mortgages.
Now, I’m in the San Francisco Bay Area, and while I’ve seen a lot of new bank signs going up to replace the ones that came down-basically the winners of the government give-aways replacing the losers, I’m not seeing that there are a lot of refinancing operations going full steam. I keep hearing and hearing and hearing stories like I’ve brought up here, poor customer service, refinance departments unavailable or not returning calls, etc.
So I just have one question-when do the banks take some of the money that they’re making again and do the job we-you and I and the other tax payers-have paid them to do?
Anyone?
Anyone?
Hmmm.
-Larry
Wednesday, November 11, 2009
November's Rebellious Buyer's Tip-Lower Rates, Higher Rates...Survey Says?
Ok, I think you all know my mantra about not waiting around.
But I'm going to repeat it. And repeat it. And...well, you get the idea, I'm sure.
Rebellious Readers, both you ladies and you (relative) gentlemen, I keep getting the same question from those of you out there who are on the investment side of things. It's some version of this:
"Larry, what's going on in the Bay Area foreclosure market? I've found a place I'd like to buy, but if I wait, there might be a better rate in a couple of weeks. Should I buy now or hold off for a bit??"
First, a reminder. NOBODY has a crystal ball. After all, who could have predicted Britney Spears making a decent comeback?
But I gotta say, that while rates did dip a bit in October, they seemed to climb right back up again shortly. AND, if you know what kind of buyer you are (see my posting from last month about that), then a quarter-point here or there doesn't matter much in the long run. Because remember, we're talking about real estate and short sale investments in the San Francisco Bay Area, and we're thinking about it REBELLIOUSLY.
So, assuming you DO know what kind of buyer you are, then we're talking about having found a place that you either want to hold onto for awhile, or want to turn over quickly, or want to move into. In any case, what your rebellious line of thought should be is:
"Can I afford the payment and still get the kids through college?"
Or maybe, "Can I rent it out and afford the payment for as long as it takes for the economy to rebound, whether that's one, two. or ten years away?"
Because whatever the rate is, is what it is. And if you buy today and the rate drops in a few weeks, maybe you'll be kicking yourself. But YOU WILL ALSO KICK YOURSELF IF YOU DON'T BUY AND THE RATE GOES UP AND/OR THE PROPERTY YOU WANT IS GONE.
Please, my Rebel Alliance, remember that what might go down might also go up, and it's all about what you can afford today and for your foreseeable future. I have met many many many more people unhappy about not having done something in California Real Estate than I have met people who regretted having taken action. So if you're going to play the odds, play the ones that land you a property TODAY at a price that fits both your budget and your buyer type.
Yours Rebelliously,
Larry
BTW-for those who don't know, I'm actually on vacation for a bit, even though I'm still keeping my ears and eyes out in the SF RE scene from away. If you're Facebook users, look me up and add me to your Friend list for pictures and stories from the Mediterranean Cruise that I'm on. But remember...what you see on Facebook STAYS on Facebook...
But I'm going to repeat it. And repeat it. And...well, you get the idea, I'm sure.
Rebellious Readers, both you ladies and you (relative) gentlemen, I keep getting the same question from those of you out there who are on the investment side of things. It's some version of this:
"Larry, what's going on in the Bay Area foreclosure market? I've found a place I'd like to buy, but if I wait, there might be a better rate in a couple of weeks. Should I buy now or hold off for a bit??"
First, a reminder. NOBODY has a crystal ball. After all, who could have predicted Britney Spears making a decent comeback?
But I gotta say, that while rates did dip a bit in October, they seemed to climb right back up again shortly. AND, if you know what kind of buyer you are (see my posting from last month about that), then a quarter-point here or there doesn't matter much in the long run. Because remember, we're talking about real estate and short sale investments in the San Francisco Bay Area, and we're thinking about it REBELLIOUSLY.
So, assuming you DO know what kind of buyer you are, then we're talking about having found a place that you either want to hold onto for awhile, or want to turn over quickly, or want to move into. In any case, what your rebellious line of thought should be is:
"Can I afford the payment and still get the kids through college?"
Or maybe, "Can I rent it out and afford the payment for as long as it takes for the economy to rebound, whether that's one, two. or ten years away?"
Because whatever the rate is, is what it is. And if you buy today and the rate drops in a few weeks, maybe you'll be kicking yourself. But YOU WILL ALSO KICK YOURSELF IF YOU DON'T BUY AND THE RATE GOES UP AND/OR THE PROPERTY YOU WANT IS GONE.
Please, my Rebel Alliance, remember that what might go down might also go up, and it's all about what you can afford today and for your foreseeable future. I have met many many many more people unhappy about not having done something in California Real Estate than I have met people who regretted having taken action. So if you're going to play the odds, play the ones that land you a property TODAY at a price that fits both your budget and your buyer type.
Yours Rebelliously,
Larry
BTW-for those who don't know, I'm actually on vacation for a bit, even though I'm still keeping my ears and eyes out in the SF RE scene from away. If you're Facebook users, look me up and add me to your Friend list for pictures and stories from the Mediterranean Cruise that I'm on. But remember...what you see on Facebook STAYS on Facebook...
Wednesday, November 4, 2009
November Seller's Tip-Don't Forget Curb Appeal!!!
I know, I know. Why am I blogging while I'm out of town? Isn't a vacation for PLAY, not for work? Easy answer-this stuff is fun and I like what I do. Plus, while I'm waiting for the Bonine to kick in I'd rather have something to focus on...
Like the basics of home selling.
Look, it's not particularly novel or even very rebellious, but it seems that in this market people have moved away from even the basics of putting a home on the market. Even if you're in default and you're hoping for a quick sale to get out from under your mortgage but don't have a lot of cash, you can still do the basics and keep your house in tidy shape.
So do this-
Step outside and go to the other side of the street, and look at your house. Imagine that you DO NOT KNOW anything about the place other than what you see, right there and then. Forget that the lawn is a little shaggy because the kid who mows it is down with swine flu, or that the reason the plants are a little bedraggled is because budgets are tight and you understandably don't have the time to just blow time and money at Orchard Supply any more. Just look at what you see-and really really SEE it from a stranger's eye.
Now, if the first few things you see are negatives (lawn, plants, dirty windows, etc), then I guarantee you that the first thing a potential buyer will see is one of those exact same things, and there are good odds they will go from a potential buyer to a definite NOT-buyer. Even if they overlook a few small things and consider making an offer, you can bet that any deferred maintenance will be brought up as a reason for a lower-than-expected offer amount.
Understand that I'm NOT saying you have to put a lot of money into your place in order for it to sell. If you had a lot of money for a remodel, you wouldn't be looking at a possible foreclosure-it's a catch-22 that I understand well. What I AM saying is take a good hard look and make sure that what CAN be done HAS been done. Is the yard tidy? Is the fence in decent repair? Are the windows clean? Are the blinds open/closed/clean looking?
All of these things can make a huge difference in the initial impression a potential buyer will have of your property. And every one of them can be done without a huge investment in landscaping, painting, or remodelling.
Do what you can, my rebellious readers!!!
-LARRY
Like the basics of home selling.
Look, it's not particularly novel or even very rebellious, but it seems that in this market people have moved away from even the basics of putting a home on the market. Even if you're in default and you're hoping for a quick sale to get out from under your mortgage but don't have a lot of cash, you can still do the basics and keep your house in tidy shape.
So do this-
Step outside and go to the other side of the street, and look at your house. Imagine that you DO NOT KNOW anything about the place other than what you see, right there and then. Forget that the lawn is a little shaggy because the kid who mows it is down with swine flu, or that the reason the plants are a little bedraggled is because budgets are tight and you understandably don't have the time to just blow time and money at Orchard Supply any more. Just look at what you see-and really really SEE it from a stranger's eye.
Now, if the first few things you see are negatives (lawn, plants, dirty windows, etc), then I guarantee you that the first thing a potential buyer will see is one of those exact same things, and there are good odds they will go from a potential buyer to a definite NOT-buyer. Even if they overlook a few small things and consider making an offer, you can bet that any deferred maintenance will be brought up as a reason for a lower-than-expected offer amount.
Understand that I'm NOT saying you have to put a lot of money into your place in order for it to sell. If you had a lot of money for a remodel, you wouldn't be looking at a possible foreclosure-it's a catch-22 that I understand well. What I AM saying is take a good hard look and make sure that what CAN be done HAS been done. Is the yard tidy? Is the fence in decent repair? Are the windows clean? Are the blinds open/closed/clean looking?
All of these things can make a huge difference in the initial impression a potential buyer will have of your property. And every one of them can be done without a huge investment in landscaping, painting, or remodelling.
Do what you can, my rebellious readers!!!
-LARRY
Wednesday, October 28, 2009
Alphabet Soup for the Forclosure Soul...
Happy (almost) Hallowe’en, my Rebellious Readership!
It’s getting awfully alphabet-soupy out there in the banking world right now. So I thought I’d devote a few serious (relatively) lines to a brief overview of the various programs and what-not which are currently part of the home foreclosure universe.
Ready? Here we go...
TARP: How about we begin at the beginning with the Troubled Assets Relief Program. This was the originally big bail out fund, where banks were supposed to sell their “toxic” assets to you and me (er…the government, with our tax dollars) for a chunk of money, then use that additional money to start lending again. Whether this is working or not is debatable. Really, really debatable.
HASP: The Homeowner Stability and Stability Plan: The first formalized effort of the Obama Administration, aimed at getting homeowner’s payments reduced, with the government guaranteeing some of the risk to banks, ultimately leading to…
HARP: the Home Affordable Refinance Program, within fairly strict guidelines, Freddie/Fannie Mac mortgages can be recast based on the current market value of their home. But if your loan is NOT part of Freddie/Fanny, then you can avail yourself of…
HAMP: Home Affordable Modification Program. Designed for mortgage holders with loans from OTHER than Fannie/Freddie Mac and who are more than 31 days in default, this program was launched this past spring. This program requires banks to re-work mortgage payments based on homeowners current income, and does not require the banks to reduce the capital of the mortgage, but loans are amortized at lower interest rates and can extend for up to 40 years.
CLEAR AS MUD, Right? It boils down to one thing-there are lots of programs out there that banks are able and supposed to be using to modify the mortgages of homeowners who are in default. But, as I’ve mentioned elsewhere, the number of mortgages actually being re-worked is dismally low.
I’d like to hear from you, the Rebellious Reader, about any experiences you’ve had navigating the loan-modification jungle. Drop me a note, visit me on Facebook, or post your comment here.
Alphabetically Yours,
Larry
It’s getting awfully alphabet-soupy out there in the banking world right now. So I thought I’d devote a few serious (relatively) lines to a brief overview of the various programs and what-not which are currently part of the home foreclosure universe.
Ready? Here we go...
TARP: How about we begin at the beginning with the Troubled Assets Relief Program. This was the originally big bail out fund, where banks were supposed to sell their “toxic” assets to you and me (er…the government, with our tax dollars) for a chunk of money, then use that additional money to start lending again. Whether this is working or not is debatable. Really, really debatable.
HASP: The Homeowner Stability and Stability Plan: The first formalized effort of the Obama Administration, aimed at getting homeowner’s payments reduced, with the government guaranteeing some of the risk to banks, ultimately leading to…
HARP: the Home Affordable Refinance Program, within fairly strict guidelines, Freddie/Fannie Mac mortgages can be recast based on the current market value of their home. But if your loan is NOT part of Freddie/Fanny, then you can avail yourself of…
HAMP: Home Affordable Modification Program. Designed for mortgage holders with loans from OTHER than Fannie/Freddie Mac and who are more than 31 days in default, this program was launched this past spring. This program requires banks to re-work mortgage payments based on homeowners current income, and does not require the banks to reduce the capital of the mortgage, but loans are amortized at lower interest rates and can extend for up to 40 years.
CLEAR AS MUD, Right? It boils down to one thing-there are lots of programs out there that banks are able and supposed to be using to modify the mortgages of homeowners who are in default. But, as I’ve mentioned elsewhere, the number of mortgages actually being re-worked is dismally low.
I’d like to hear from you, the Rebellious Reader, about any experiences you’ve had navigating the loan-modification jungle. Drop me a note, visit me on Facebook, or post your comment here.
Alphabetically Yours,
Larry
Wednesday, October 21, 2009
We were worried about this stuff YEARS ago!!
I wonder if we ever really do learn from history??
I was taking a look BACK at my collection of articles about the real estate world, and I came across a BusinessWeek article dated Sept 11, 2006. In it, the writer is discussing ARMs and calling them “nightmare mortgages” where “the bill is coming due”. YEP, that was three years ago, and that was BEFORE the most recent crash. The article goes on to talk about the fancy bookkeeping banks were doing to show higher-than-normal profits on these loans and to mask the risk of default. Three years ago, alarm bells were sounding in many similar articles, but this one really puts the problem in a nutshell-you can check it out here.
( http://www.businessweek.com/magazine/content/06_37/b4000001.htm )
And you know what banks and mortgage brokers did? Kept on lending. Kept on issuing ARMs, kept on telling consumers that things would be ok. Pretty much hiding their heads in the sands and hoping that the tremors they were feeling in the financial markets were nothing but bumps in the night.
And what are they doing now, three years later? Well, what they AREN’T doing is much to avoid another round of foreclosures. The Newsweek article refers to loans in 2004 & 2005 that would be coming up for re-adjustment soon. Many of those loans have already gone into foreclosure, but what about the loans that were made in 2006 and 2007, when credit was still cheap and ARMS were still popular?
Yep, that’s right. They’re all due for re-adjustment. In many cases, those loans will re-adjust upward, due to the nature of the then-vs-now financial markets.
You heard me, the loans payments will actually go UP! And that means people who managed to keep on top of their payments will suddenly be looking at not being able to make them.
AND their properties aren’t worth what they bought them for. Of course, there’s nothing new there. BUT, these buyers will actually be in worse shape than the buyers mentioned in the BusinessWeek piece, because these newer borrowers are the ones who bought in at the very top of the market. People who bought in 2004 and 2005 are screwed; people who bought in 2006 and 2007 are ROYALLY screwed.
And how’s the job market looking? I’m not seeing any kind of huge recovery where I am here in the San Francisco Bay Area-how about you? Sure, there are dribs and drabs of profit and people who have jobs are keeping them for now. But here’s a chilling thought-when that BusinessWeek article was published (Sept 2006), the Unemployment Rate in California was 4.8%. That’s right…4.8%.
Three years later, the CA unemployment rate for September 2009 was 12.2%-nearly THREE TIMES what it was when concern was being expressed over the ability of borrowers to repay their loans. (For good, but scary, historical unemployment data see http://www.labormarketinfo.edd.ca.gov/ )
HOLY MORTGAGE-BACKED-SECURITY, BANK-MAN! What are you going to do now that a whole new set of ARMs is ready to blow up your face and there are even fewer people with jobs?
Well, it looks like…not much. As I mentioned before, the banks seem to be having a very hard time actually implementing all the loan modification programs they’ve been instructed to put in place by their newest share holder-the Taxpayers.
So, who the hell knows what’s going to happen when payments go even higher. All I can say is, check your loan carefully, and if your ARM is about to reset, make sure you know what the new rate, and the new payment, is going to be so you can start getting your budget modified now.
Because that’ll be a whole lot more likely than actually getting your bank to work out a LOAN modification for you.
Stay tuned-next week I’m taking a look at the various programs in place for loan-modification. AND I’m having alphabet soup for lunch (TARP…NAMA…HAMP…)
Rebelliously,
Larry
I was taking a look BACK at my collection of articles about the real estate world, and I came across a BusinessWeek article dated Sept 11, 2006. In it, the writer is discussing ARMs and calling them “nightmare mortgages” where “the bill is coming due”. YEP, that was three years ago, and that was BEFORE the most recent crash. The article goes on to talk about the fancy bookkeeping banks were doing to show higher-than-normal profits on these loans and to mask the risk of default. Three years ago, alarm bells were sounding in many similar articles, but this one really puts the problem in a nutshell-you can check it out here.
( http://www.businessweek.com/magazine/content/06_37/b4000001.htm )
And you know what banks and mortgage brokers did? Kept on lending. Kept on issuing ARMs, kept on telling consumers that things would be ok. Pretty much hiding their heads in the sands and hoping that the tremors they were feeling in the financial markets were nothing but bumps in the night.
And what are they doing now, three years later? Well, what they AREN’T doing is much to avoid another round of foreclosures. The Newsweek article refers to loans in 2004 & 2005 that would be coming up for re-adjustment soon. Many of those loans have already gone into foreclosure, but what about the loans that were made in 2006 and 2007, when credit was still cheap and ARMS were still popular?
Yep, that’s right. They’re all due for re-adjustment. In many cases, those loans will re-adjust upward, due to the nature of the then-vs-now financial markets.
You heard me, the loans payments will actually go UP! And that means people who managed to keep on top of their payments will suddenly be looking at not being able to make them.
AND their properties aren’t worth what they bought them for. Of course, there’s nothing new there. BUT, these buyers will actually be in worse shape than the buyers mentioned in the BusinessWeek piece, because these newer borrowers are the ones who bought in at the very top of the market. People who bought in 2004 and 2005 are screwed; people who bought in 2006 and 2007 are ROYALLY screwed.
And how’s the job market looking? I’m not seeing any kind of huge recovery where I am here in the San Francisco Bay Area-how about you? Sure, there are dribs and drabs of profit and people who have jobs are keeping them for now. But here’s a chilling thought-when that BusinessWeek article was published (Sept 2006), the Unemployment Rate in California was 4.8%. That’s right…4.8%.
Three years later, the CA unemployment rate for September 2009 was 12.2%-nearly THREE TIMES what it was when concern was being expressed over the ability of borrowers to repay their loans. (For good, but scary, historical unemployment data see http://www.labormarketinfo.edd.ca.gov/ )
HOLY MORTGAGE-BACKED-SECURITY, BANK-MAN! What are you going to do now that a whole new set of ARMs is ready to blow up your face and there are even fewer people with jobs?
Well, it looks like…not much. As I mentioned before, the banks seem to be having a very hard time actually implementing all the loan modification programs they’ve been instructed to put in place by their newest share holder-the Taxpayers.
So, who the hell knows what’s going to happen when payments go even higher. All I can say is, check your loan carefully, and if your ARM is about to reset, make sure you know what the new rate, and the new payment, is going to be so you can start getting your budget modified now.
Because that’ll be a whole lot more likely than actually getting your bank to work out a LOAN modification for you.
Stay tuned-next week I’m taking a look at the various programs in place for loan-modification. AND I’m having alphabet soup for lunch (TARP…NAMA…HAMP…)
Rebelliously,
Larry
Wednesday, October 14, 2009
Buyer's Tip-Take a Look in the Mirror...
If you're considering buying a home in today's crazy market, I would encourage you to think carefully about what kind of buyer you really are before jumping in. With the chaos that I'm seeing in the Bay Area and beyond, there are fantastic opportunities to make some great deals, but that ALSO means, and I don't want to be too crude (I have a reputation for subtlety and finesse to maintain, after all ;), that there are tremendous chances to really screw yourself up.
Here are the three types of buyers-where do you fit?
WHOLESALE Buyer (WB)-
This kind of buyer buys low and looks for a quick turnaround. A WB needs to obtain a property in good condition that can resell fast, at a profit, and in some cases has a buyer lined up before the title transfer goes through. In this kind of market, buying like this can be tricky because many properties available through foreclosure will need significant updating/fixing before they can be sold on. A Wholesale Buyer needs to offload properties quickly and needs a good network of potential buyers in order to turn around a property as soon as possible. There are good bargains available, but you have to have a good eye and really understand the pluses and minuses of a given house before moving forward, or you can be stuck with something that has no appeal to the next buyer.
Investment Buyer (IB)
An IB buys and plans to hold the property for awhile. Maybe he'll rent it out, maybe she'll spend a chunk of change to update and modernize an older home and recoup the money in a few years when prices rise. IBs will need to have good down payments (see my earlier post about cash becoming king again). If this is the kind of buyer you are, you must have firm financial footing to be able to support the initial cash outlay plus on-going charges. If you want to buy and hold, this is a good time for that if you're ready to play landlord or are able to pay for remodelling out of pocket with no need for additional loans in this credit-tight market.
Retail Buyer (RB)
Call him a family-guy, or call her a modern woman...but this buyer is looking for something for themselves. If you work smart, you can take real advantage of what's going on right now. First, have a very very good sense of your finances and what you can afford to pay, not just right now, but in 5, 10 or even 15 years from now. Don't count on a home's value skyrocketing and your mortgage becoming a giant ATM machine to pay for college for your kids or the automatic refinance option in a couple of years. And even though cash is becoming king again, if you don't have the $100K+ that might mean in the SF Bay Area housing market right now, there are some good options to explore, especially as more and more sellers are getting creative (in a good, REBELLIOUS way, not a scheming high-commission, pass-the-risk-on mortgage broker kind of way). I'm seeing lease-to-buy deals happening, I'm seeing co-signing becoming big again, and I'm even seeing some private sellers willing to work with mortgages that are amortized over a few more years than normal to keep payments rational. Lastly, stop thinking of your home as an investment that you'll cash in some day-start thinking of it as a place you want to be, where you want your family to be, and where you want to stay for awhile.
So, yeah, today's market is crazy. It seems like loans are tough to find, foreclosure properties carry high risk, and maybe you'll have to sit on what you buy for awhile. But, if you know what you're looking for, and you REALLY have a good idea of what kind of buyer you are, then you can surf the chaos like a pirate ship riding a wave.
Buy Rebelliously!
Larry
Here are the three types of buyers-where do you fit?
WHOLESALE Buyer (WB)-
This kind of buyer buys low and looks for a quick turnaround. A WB needs to obtain a property in good condition that can resell fast, at a profit, and in some cases has a buyer lined up before the title transfer goes through. In this kind of market, buying like this can be tricky because many properties available through foreclosure will need significant updating/fixing before they can be sold on. A Wholesale Buyer needs to offload properties quickly and needs a good network of potential buyers in order to turn around a property as soon as possible. There are good bargains available, but you have to have a good eye and really understand the pluses and minuses of a given house before moving forward, or you can be stuck with something that has no appeal to the next buyer.
Investment Buyer (IB)
An IB buys and plans to hold the property for awhile. Maybe he'll rent it out, maybe she'll spend a chunk of change to update and modernize an older home and recoup the money in a few years when prices rise. IBs will need to have good down payments (see my earlier post about cash becoming king again). If this is the kind of buyer you are, you must have firm financial footing to be able to support the initial cash outlay plus on-going charges. If you want to buy and hold, this is a good time for that if you're ready to play landlord or are able to pay for remodelling out of pocket with no need for additional loans in this credit-tight market.
Retail Buyer (RB)
Call him a family-guy, or call her a modern woman...but this buyer is looking for something for themselves. If you work smart, you can take real advantage of what's going on right now. First, have a very very good sense of your finances and what you can afford to pay, not just right now, but in 5, 10 or even 15 years from now. Don't count on a home's value skyrocketing and your mortgage becoming a giant ATM machine to pay for college for your kids or the automatic refinance option in a couple of years. And even though cash is becoming king again, if you don't have the $100K+ that might mean in the SF Bay Area housing market right now, there are some good options to explore, especially as more and more sellers are getting creative (in a good, REBELLIOUS way, not a scheming high-commission, pass-the-risk-on mortgage broker kind of way). I'm seeing lease-to-buy deals happening, I'm seeing co-signing becoming big again, and I'm even seeing some private sellers willing to work with mortgages that are amortized over a few more years than normal to keep payments rational. Lastly, stop thinking of your home as an investment that you'll cash in some day-start thinking of it as a place you want to be, where you want your family to be, and where you want to stay for awhile.
So, yeah, today's market is crazy. It seems like loans are tough to find, foreclosure properties carry high risk, and maybe you'll have to sit on what you buy for awhile. But, if you know what you're looking for, and you REALLY have a good idea of what kind of buyer you are, then you can surf the chaos like a pirate ship riding a wave.
Buy Rebelliously!
Larry
Thursday, October 8, 2009
October Seller's Tip-Are You Counting on Loan Modification?
I've been saying it, but I think it bears repeating-if you’re the owner of a distressed property, and you’re hoping loan mediation/moderation may be the way to go to get your loan down, you may need to think again.
Recent data from the National Consumer Law Center suggests that loan servicers are in no hurry to actually do much to help modify a loan. The report confirms something that I’ve been talking about for awhile-there isn’t really much incentive for banks to actually bother to work on modifying a loan with you. The reports was brought to my attention because I keep an eye on anything that cover the California real estate market, which was one of the areas examined by the NCLC. Basically, the loan modification guidelines mandated by the government have no teeth, and the way the programs are implemented make it very difficult to jump through all the hoops. And I don’t mean financial hoops-I’m in FAVOR of requirements that help insure the soundness of a buyer's financial background. In this case what we're seeing are procedural hoops (red tape, bureaucracy, whatever you want to call it). The report goes on to recommend MANDATORY loan modifications-meaning the government will require lenders and mortgage servicers to work with borrowers in a timely manner. To read the report for yourself, follow this link http://www.consumerlaw.org/issues/foreclosure/index.shtml
But believe me, if the day ever comes that the current loan modification "guidelines" become "rules" with some teeth, it will be too late for many homeowners facing their foreclosure crisis TODAY. If you're in that situation, it may be time to explore all your options.
Rebellious Regards,
Larry
Recent data from the National Consumer Law Center suggests that loan servicers are in no hurry to actually do much to help modify a loan. The report confirms something that I’ve been talking about for awhile-there isn’t really much incentive for banks to actually bother to work on modifying a loan with you. The reports was brought to my attention because I keep an eye on anything that cover the California real estate market, which was one of the areas examined by the NCLC. Basically, the loan modification guidelines mandated by the government have no teeth, and the way the programs are implemented make it very difficult to jump through all the hoops. And I don’t mean financial hoops-I’m in FAVOR of requirements that help insure the soundness of a buyer's financial background. In this case what we're seeing are procedural hoops (red tape, bureaucracy, whatever you want to call it). The report goes on to recommend MANDATORY loan modifications-meaning the government will require lenders and mortgage servicers to work with borrowers in a timely manner. To read the report for yourself, follow this link http://www.consumerlaw.org/issues/foreclosure/index.shtml
But believe me, if the day ever comes that the current loan modification "guidelines" become "rules" with some teeth, it will be too late for many homeowners facing their foreclosure crisis TODAY. If you're in that situation, it may be time to explore all your options.
Rebellious Regards,
Larry
Wednesday, September 30, 2009
A Rather Convenient Truth...
It just gets weirder and weirder.
Each time I think that the mortgage companies and banks can’t get any more creative I find out something new. We all saw the rise of No-Doc loans, stated income loans, loans at 125% of value, etc; all of those were odd enough, but they were sort of, well, standard-weird.
Now it’s just gotten spooky.
One of my bird-dogs (see a previous post for a definition) recently talked to me about something that’s going on with the loan modification program. We’ve all been hearing about how well that program is NOT going, but here’s a new twist. It’s called re-capitalization.
Now remember, I’m not a big banking analyst, so I encourage you to take a look at this stuff on your own and make your own conclusions, but this stuff really making me think, so I figure I should get it off my chest and over to you, my rebellious entourage. In a nutshell, recapitalization is a way for banks and mortgage companies to hand-off their risk onto somebody else, this time via the Troubled Asset Relief Program (TARP) by taking all the fines and penalties and overdue $$ a homeowner owes and bundling it up into something that you and I (um…I mean the government, with our money) will buy up in order to bail them out.
Here’s how it works.
As it stands, TARP will only buy up the toxic asset at the value of the principal-the money the homeowner owes, net of penalties, late charges, fees, etc (which can run into the tens of thousands of dollars). Now, those items are important parts of a bank’s revenue stream. So how can a bank get TARP to reimburse them for all those fees that right now, they just have to eat?
By making a new loan to the homeowner, that’s how. And by making it a condition of the loan that all of those fees, late-payment penalties, etc, are now part of the CAPITAL, the amount of the mortgage. It then becomes one clean amount that TARP will happily spend your money on for you.
BUT wait-why the heck would a homeowner agree to that, you ask, with a rebellious look on your face and sharpening your cutlass, ready to cut away a bunch of financial BS.
After all, that new loan is a “modified” loan, offered to the homeowner at a lower interest rate designed to give them payments that are more affordable. It’s for a trial period, to see if the homeowner can make the new payment better than they were making the old payment. Exactly what the loan modification process is supposed to be doing.
So, at face value, the bank is doing everything it’s supposed to due to help out homeowners in trouble, via the loan modification programs. Right?
NOT!
Because the modified loan with the reduced interest rate is for a limited time (around 6 months is what I’m seeing). And part of the deal, is that at the end of 6 months, a new loan is created that encompasses all the outstanding interests, penalties, etc, and another NEW interest rate-usually HIGHER than what was being charged during the “trial period”.
So, the homeowner (who was struggling with the original amount due), now has a BIGGER mortgage than they started with, at an interest rate HIGHER than what they were offered as a trial, and which they will most likely go into default with AGAIN.
But the bank…ah, the BANK now has one nice and tidy mortgage that they can show to the government and have it bought up under TARP with our money. They win. The homeowner loses, you and I lose, the whole system loses.
Now, as I’ve mentioned, I do a lot of work with banks and mortgage companies and I don’t really believe that there are little banking trolls sitting around board room tables inventing ways to screw over their customers.
All this just seems awfully convenient.
That’s all I’m sayin’!
Sheesh! I feel better now.
Stay Rebellious!
-Larry
Each time I think that the mortgage companies and banks can’t get any more creative I find out something new. We all saw the rise of No-Doc loans, stated income loans, loans at 125% of value, etc; all of those were odd enough, but they were sort of, well, standard-weird.
Now it’s just gotten spooky.
One of my bird-dogs (see a previous post for a definition) recently talked to me about something that’s going on with the loan modification program. We’ve all been hearing about how well that program is NOT going, but here’s a new twist. It’s called re-capitalization.
Now remember, I’m not a big banking analyst, so I encourage you to take a look at this stuff on your own and make your own conclusions, but this stuff really making me think, so I figure I should get it off my chest and over to you, my rebellious entourage. In a nutshell, recapitalization is a way for banks and mortgage companies to hand-off their risk onto somebody else, this time via the Troubled Asset Relief Program (TARP) by taking all the fines and penalties and overdue $$ a homeowner owes and bundling it up into something that you and I (um…I mean the government, with our money) will buy up in order to bail them out.
Here’s how it works.
As it stands, TARP will only buy up the toxic asset at the value of the principal-the money the homeowner owes, net of penalties, late charges, fees, etc (which can run into the tens of thousands of dollars). Now, those items are important parts of a bank’s revenue stream. So how can a bank get TARP to reimburse them for all those fees that right now, they just have to eat?
By making a new loan to the homeowner, that’s how. And by making it a condition of the loan that all of those fees, late-payment penalties, etc, are now part of the CAPITAL, the amount of the mortgage. It then becomes one clean amount that TARP will happily spend your money on for you.
BUT wait-why the heck would a homeowner agree to that, you ask, with a rebellious look on your face and sharpening your cutlass, ready to cut away a bunch of financial BS.
After all, that new loan is a “modified” loan, offered to the homeowner at a lower interest rate designed to give them payments that are more affordable. It’s for a trial period, to see if the homeowner can make the new payment better than they were making the old payment. Exactly what the loan modification process is supposed to be doing.
So, at face value, the bank is doing everything it’s supposed to due to help out homeowners in trouble, via the loan modification programs. Right?
NOT!
Because the modified loan with the reduced interest rate is for a limited time (around 6 months is what I’m seeing). And part of the deal, is that at the end of 6 months, a new loan is created that encompasses all the outstanding interests, penalties, etc, and another NEW interest rate-usually HIGHER than what was being charged during the “trial period”.
So, the homeowner (who was struggling with the original amount due), now has a BIGGER mortgage than they started with, at an interest rate HIGHER than what they were offered as a trial, and which they will most likely go into default with AGAIN.
But the bank…ah, the BANK now has one nice and tidy mortgage that they can show to the government and have it bought up under TARP with our money. They win. The homeowner loses, you and I lose, the whole system loses.
Now, as I’ve mentioned, I do a lot of work with banks and mortgage companies and I don’t really believe that there are little banking trolls sitting around board room tables inventing ways to screw over their customers.
All this just seems awfully convenient.
That’s all I’m sayin’!
Sheesh! I feel better now.
Stay Rebellious!
-Larry
Wednesday, September 16, 2009
Jermaine Makes Money! (Guest Blogger)
The Real Estate Rebel Sez:
This is a guest blog written by a colleague, Joshua Ramey-Renk. I asked him to talk to one of my “Bird-Dogs” to find out more about her success as part of my team. I know Real Estate…Joshua knows how to tell people’s stories…this “Bird-Dog” knows how to spot a property…read on…
Jermaine Jenkins knows how to recognize an opportunity. Jermaine is part of Larry’s extended network of “Bird-Dogs”: people keeping an eye out for property owners that may be able to use his services to work through a short-sale. Not too long ago, Jermaine, who isn’t a real estate agent but has a good eye for properties, earned a nice Finder’s Fee by identifying an opportunity for Larry and his team. She did this just by talking to a potential seller about their distressed property and making the referral. She knew that even though the property wasn’t something a Real Estate agent could do a lot with from a marketing perspective, she could help the sellers by connecting them with Larry.
“The occupants were in default,” says Jermaine, describing the problem. “The property needed a lot of work, so a standard real estate agent listing wasn’t going to be an option, especially with the owners facing foreclosure and clock ticking. But I know that Larry’s business is helping people who are stuck in the pre-foreclosure madness, and I gave him a call.” Jermaine knew that Larry would treat the owners with respect and courtesy, and that, as an investor, Larry and his team could help navigate the short-sale process with the seller’s dignity intact.
I asked Jermaine how she found the potential sellers. “I was looking through the list of pre-foreclosures in my county, and calling on them to see if they were interested in getting some help. To be honest, I got a lot of hang-ups and some fairly rude responses, but on this particular property, the owners’ son answered the phone and was very open in talking with me.”
Jermaine felt that the property would be a good match for Larry and his team. And of course, she got some cash in her pocket too. “It works on two levels,” she says. “On the one hand, I like the referral bonus that Larry pays when an owner decides to put his property on contract, but I’m also really happy to have been able to help out some people in a tough spot. They got out from under the property, I got a spiff, and Larry got a lot of leg work done for him identifying a potential property. I think we all win.”
What advice does Jermaine have for people interested in working with Larry like she does? “First, make sure you know what Larry’s looking for,” she says. “Second, just start digging!”
The Real Estate Rebel sez:
She’s absolutely right! For more information about how to make money in Real Estate like Jermaine did, drop me a note! For more from Joshua...check out http://www.thefarwalkerchronicles.blogspot.com/
This is a guest blog written by a colleague, Joshua Ramey-Renk. I asked him to talk to one of my “Bird-Dogs” to find out more about her success as part of my team. I know Real Estate…Joshua knows how to tell people’s stories…this “Bird-Dog” knows how to spot a property…read on…
Jermaine Jenkins knows how to recognize an opportunity. Jermaine is part of Larry’s extended network of “Bird-Dogs”: people keeping an eye out for property owners that may be able to use his services to work through a short-sale. Not too long ago, Jermaine, who isn’t a real estate agent but has a good eye for properties, earned a nice Finder’s Fee by identifying an opportunity for Larry and his team. She did this just by talking to a potential seller about their distressed property and making the referral. She knew that even though the property wasn’t something a Real Estate agent could do a lot with from a marketing perspective, she could help the sellers by connecting them with Larry.
“The occupants were in default,” says Jermaine, describing the problem. “The property needed a lot of work, so a standard real estate agent listing wasn’t going to be an option, especially with the owners facing foreclosure and clock ticking. But I know that Larry’s business is helping people who are stuck in the pre-foreclosure madness, and I gave him a call.” Jermaine knew that Larry would treat the owners with respect and courtesy, and that, as an investor, Larry and his team could help navigate the short-sale process with the seller’s dignity intact.
I asked Jermaine how she found the potential sellers. “I was looking through the list of pre-foreclosures in my county, and calling on them to see if they were interested in getting some help. To be honest, I got a lot of hang-ups and some fairly rude responses, but on this particular property, the owners’ son answered the phone and was very open in talking with me.”
Jermaine felt that the property would be a good match for Larry and his team. And of course, she got some cash in her pocket too. “It works on two levels,” she says. “On the one hand, I like the referral bonus that Larry pays when an owner decides to put his property on contract, but I’m also really happy to have been able to help out some people in a tough spot. They got out from under the property, I got a spiff, and Larry got a lot of leg work done for him identifying a potential property. I think we all win.”
What advice does Jermaine have for people interested in working with Larry like she does? “First, make sure you know what Larry’s looking for,” she says. “Second, just start digging!”
The Real Estate Rebel sez:
She’s absolutely right! For more information about how to make money in Real Estate like Jermaine did, drop me a note! For more from Joshua...check out http://www.thefarwalkerchronicles.blogspot.com/
Wednesday, September 9, 2009
BIRD DOG 101
Ok, really this is Bird Dog 101A-"What is a Bird Dog". We'll get to the 101B-"How to Be a Bird Dog" later on...as needed.
Bird Dogs are the CORE of what it means to run a Real Estate Rebellion. These are people who want to make some money in real estate, who know their neighborhoods, know how to learn to do some basic research, and make cash by identifying homes that fit into my Rebellious activities. They are not Real Estate Agents, they don't lose out by refering a property to me, and they don't need to have any kind of special license. They just need sharp eyes and an understanding of what we're looking for.
A Bird Dog (BD, for simplicity), keeps an eye out for properties that are looking at foreclosure and could benefit from talking with a Short Sale person (like me and others on my team). They then refer the property to me and my team, and if the owner agrees to work with us for a short sale contract, the clever BD who spotted the deal and brought it to my attention gets paid.
Even better-
They might get paid TWICE! (more on that later...)
Simple enough? In the next couple of days, check back here for the story of Jermaine J. Her story of finding an East Bay property for us is a great example of how to make money in real estate without being a real estate agent, investing your own cash, or even having an office!
Oh, did I mention that I'll teach you most of what you need to know to identify properties for us? Silly me.
I'll teach you almost everything you need to know to identify properties for us.
The only thing I CAN'T teach you is how to have the drive and desire to put the energy in. If you KNOW you've got that, drop me a note and we can talk more about how to be a BDFR (Bird Dog for the REVOLUTION!).
Rebelliously,
Larry
Bird Dogs are the CORE of what it means to run a Real Estate Rebellion. These are people who want to make some money in real estate, who know their neighborhoods, know how to learn to do some basic research, and make cash by identifying homes that fit into my Rebellious activities. They are not Real Estate Agents, they don't lose out by refering a property to me, and they don't need to have any kind of special license. They just need sharp eyes and an understanding of what we're looking for.
A Bird Dog (BD, for simplicity), keeps an eye out for properties that are looking at foreclosure and could benefit from talking with a Short Sale person (like me and others on my team). They then refer the property to me and my team, and if the owner agrees to work with us for a short sale contract, the clever BD who spotted the deal and brought it to my attention gets paid.
Even better-
They might get paid TWICE! (more on that later...)
Simple enough? In the next couple of days, check back here for the story of Jermaine J. Her story of finding an East Bay property for us is a great example of how to make money in real estate without being a real estate agent, investing your own cash, or even having an office!
Oh, did I mention that I'll teach you most of what you need to know to identify properties for us? Silly me.
I'll teach you almost everything you need to know to identify properties for us.
The only thing I CAN'T teach you is how to have the drive and desire to put the energy in. If you KNOW you've got that, drop me a note and we can talk more about how to be a BDFR (Bird Dog for the REVOLUTION!).
Rebelliously,
Larry
Wednesday, September 2, 2009
September Buyer's Tip-Work with an expert to get the edge
Last month I talked about the advantages, for a seller, of talking to a short-sale expert as soon as things get rough and they're in default. There's a flip-side to that idea that I thought I'd bring to your attention this week.
This is one of the best rebellious tips I can give a buyer in this market, especially somebody looking to buy a home for themselves versus an investor looking for a portfolio property (although the idea certainly applies):
If a property shows up on the MLS or with a "For Sale" sign, you may already be too late for the party! Sad but true.
Once the sign goes up, it's like blood in the water for buyers of all types. And a lot of times, if you are looking at the same property that an investor is looking at, you are going to have less cash, less credit, and a weaker bargaining position.
BUT...
What if you do what one of my clients is doing? Let's call him...Ronnie Rebel.
Ronnie is looking for a few of things for his family:
This is one of the best rebellious tips I can give a buyer in this market, especially somebody looking to buy a home for themselves versus an investor looking for a portfolio property (although the idea certainly applies):
If a property shows up on the MLS or with a "For Sale" sign, you may already be too late for the party! Sad but true.
Once the sign goes up, it's like blood in the water for buyers of all types. And a lot of times, if you are looking at the same property that an investor is looking at, you are going to have less cash, less credit, and a weaker bargaining position.
BUT...
What if you do what one of my clients is doing? Let's call him...Ronnie Rebel.
Ronnie is looking for a few of things for his family:
- A good school for his kids
- A safe neighborhood with good opportunities for outdoor recreation
- Close proximity to his work because he likes to ride his bike
- Getting all that within his budget
Ronnie is NOT so concerned with:
- Finding his "dream house" with the spiral staircase and the built-in outdoor jacuzzi
- Waiting until the "perfect" place comes along
- Having a brand-new house
- Paying a premium for the "right" address
Ronnie is my kind of Rebel.
Ronnie came to me and told me what he was looking for, and mentioned a couple of neighborhoods that he liked. I mentioned it to a couple of my Bird-dogs (don't know what a Bird-dog is? Stay tuned for an upcoming Topic on how to make money in Real Estate WITHOUT being a Real Estate Agent) and they did some digging and located a couple of places whose owners were looking at default and are talking about the short sale process with those owners...if one of them is interested in working with us for a short sale, Ronnie definitely has the inside track. Because he is looking at buying a property that will never go on the market and never have a "For Sale" sign attracting a bunch of potential competitors to the sale.
So, be like Ronnie: invite a short sale expert in early when you are considering buying a property and want to take advantage of the best bargains out there.
Yours (and Ronnie's) in Rebellion!
-LARRY
Monday, August 10, 2009
OOOOhhh that makes me mad...(aug rant)
"Loss Mitigation Specialist" is what this guy's title was. He worked at the bank we were working with to get a short-sale approval before a property went to foreclosure. I'm not sure who designated him a "Specialist", but it was clear from the outset that he was just reading off a script, didn't actually specialize in anything. Our experience with him and his bank just re-affirmed for us our concern that there isn't a whole lot of committment to helping people who are in default and trying to work through the process diligently and honestly.
Granted, this was a tough situation-there was a tenant in the property who was making it difficult to show the property and get our inspectors on-site, plus rent was in arrears, and we had to go back to the bank to get an extension before they sent the property to auction. The "Specialist" we were supposed to be working with was almost impossible to reach, and when we did talk to him all we got was scripted answers with no regard for the fact that this was a situation nobody could have planned for. We got closer and closer to the deadline and the auction loomed.
We tried for weeks to get an extension. I can't tell you how many messages we left (you'll remember from previous posts-as an investor, I almost always get my call returned from banks who are serious about business deals). Finally, at 5:30pm on the Friday before the scheduled Monday auction, we got a-hold of somebody and got the extension. We had done all the right work on our end, including arranging to get the tenant off the property, and yet this house very nearly went into foreclosure when it didn't need to. And the price we had already negotiated with bank was significantly higher than they could reasonably expect to get at an auction.
The whole thing made no sense, in terms of the banks ability to recoup as much money as possible, in terms of the effort the seller was going through to make things work out, and our own up-front negotiation. But all this "Specialist" saw was that an auction had been set and that was it, period.
So...
Was this "Loss Mitigation Specialist" just a green recruit?
Was he following orders?
Was the bank overwhelmed and understaffed?
Frankly...I don't care. I've had a lot of really good experiences with banks, but frankly I've ALSO had a lot of experiences like this one. The banks have gotten a lot of support from us as taxpayers, and they need to step up their staffing and training. I wish I could say it was just this one guy, but there are a lot of jerks filling "Loss Mitigation Specialist" roles, and they are costing their employers clients, reputations, and worst of all (in banking terms), cash.
C'mon banks, get your people trained and empowered!
To my readers-Stay rebellious, demand better treatment!
LARRY
Granted, this was a tough situation-there was a tenant in the property who was making it difficult to show the property and get our inspectors on-site, plus rent was in arrears, and we had to go back to the bank to get an extension before they sent the property to auction. The "Specialist" we were supposed to be working with was almost impossible to reach, and when we did talk to him all we got was scripted answers with no regard for the fact that this was a situation nobody could have planned for. We got closer and closer to the deadline and the auction loomed.
We tried for weeks to get an extension. I can't tell you how many messages we left (you'll remember from previous posts-as an investor, I almost always get my call returned from banks who are serious about business deals). Finally, at 5:30pm on the Friday before the scheduled Monday auction, we got a-hold of somebody and got the extension. We had done all the right work on our end, including arranging to get the tenant off the property, and yet this house very nearly went into foreclosure when it didn't need to. And the price we had already negotiated with bank was significantly higher than they could reasonably expect to get at an auction.
The whole thing made no sense, in terms of the banks ability to recoup as much money as possible, in terms of the effort the seller was going through to make things work out, and our own up-front negotiation. But all this "Specialist" saw was that an auction had been set and that was it, period.
So...
Was this "Loss Mitigation Specialist" just a green recruit?
Was he following orders?
Was the bank overwhelmed and understaffed?
Frankly...I don't care. I've had a lot of really good experiences with banks, but frankly I've ALSO had a lot of experiences like this one. The banks have gotten a lot of support from us as taxpayers, and they need to step up their staffing and training. I wish I could say it was just this one guy, but there are a lot of jerks filling "Loss Mitigation Specialist" roles, and they are costing their employers clients, reputations, and worst of all (in banking terms), cash.
C'mon banks, get your people trained and empowered!
To my readers-Stay rebellious, demand better treatment!
LARRY
Sellers Tip for August-Find a short-sale expert early
I would never tell anybody to miss a payment, go into default, or willingly stare foreclosure in the face. What I will tell you is this:
If it's happening to you, get real about it. And get real, REAL fast. This will be one of the hardest times of your life. Having somebody to shepherd you through it can help ease your stress levels and help keep your credit score as healthy as possible. You also need to understand all your options before you have them taken away from you.
And while I'm good at what I do, I know I don't have all the answers (there's that dang honest streak again), but I bet among our readers we've seen just about every situation possible. So, post your dilemma's and questions, and I bet somebody from our Rebellious Readership will have some advice.
If it's happening to you, get real about it. And get real, REAL fast. This will be one of the hardest times of your life. Having somebody to shepherd you through it can help ease your stress levels and help keep your credit score as healthy as possible. You also need to understand all your options before you have them taken away from you.
And while I'm good at what I do, I know I don't have all the answers (there's that dang honest streak again), but I bet among our readers we've seen just about every situation possible. So, post your dilemma's and questions, and I bet somebody from our Rebellious Readership will have some advice.
Buyers Tip for Aug-if you want to DO the RE Boogie, prepare to Get (some) Down (payment, that is...)
My Buyers Tip For This Month: Down Payments are back, so prepared!
And you're looking for a home for your family versus a flip or a rental property, I think it's good news too. When down payments are required, you only buy the amount of house you can actually afford over time. And, there's less of a tendency to treat your house as a giant ATM machine. So people tend to keep expectations rational and prices tend to stay more realistic (I don't think a 2-bedroom condo would have hit $600K in most Bay Area cities if people had to have $120,000 in cash to get one...)
So get ready for it, Buyers, because having a decent credit score and unlimited optimism about the market is a thing of the past (for now). Investors should be thinking about 25%-35% down, and a retail buyer should be thinking around 20%. Believe me, we'll all be better off for it!
And I hate to admit it (well, actually, I'm perfectly happy to admit it), but I'm glad.
If you're an investor, you should actually have some risk in your investment. That's what keeps old Mr. Smith's Invisible Hand working in the market place. As investors, we should take risks that are commensurate with returns. Without that, prices rise with no basis, people jump in and out of the market for no good reason but quick returns, bubbles get created, economies crash, and suddenly schools in Scandinavia are struggling because of mortgage defaults in small towns in the US. As Bill Murray says in Ghostbusters, "DOGS AND CATS, LIVING TOGETHER!!! MASS HYSTERIA!! " Unbelievable.And you're looking for a home for your family versus a flip or a rental property, I think it's good news too. When down payments are required, you only buy the amount of house you can actually afford over time. And, there's less of a tendency to treat your house as a giant ATM machine. So people tend to keep expectations rational and prices tend to stay more realistic (I don't think a 2-bedroom condo would have hit $600K in most Bay Area cities if people had to have $120,000 in cash to get one...)
So get ready for it, Buyers, because having a decent credit score and unlimited optimism about the market is a thing of the past (for now). Investors should be thinking about 25%-35% down, and a retail buyer should be thinking around 20%. Believe me, we'll all be better off for it!
Rebelliously,
Larry
Wednesday, July 22, 2009
Seller Reality Check
The Housing Market’s getting better
The Housing Market’s not going to recover
The Housing Recovery already happened
We’re nowhere near the Bottom
I’ve been hearing every possible outlook projected by the so-called experts when they talk about what’s going on in Real Estate here in the Bay Area (And the country, for that matter). So what’s a seller supposed to believe? What should a seller do? Wait? Sell? Pray? Have a drink? (well, I’m always up for that, but it may not be helpful in this case)
Honestly, I don’t have a good, general answer. But for people who need to sell, who are facing foreclosure or are looking at a short sale, I do have one piece of advice:
Have realistic expectations about selling your property.
We’ve all felt the sting of the steep decrease in housing values, but it feels especially sharp when you realize that you’re going to HAVE to sell and you have to sell soon. You are going to have a much easier time of things if you accept that no matter what the market MIGHT do later, TODAY you have to get out of your mortgage. And it might hurt. If you have an offer that is much lower than you’d hoped, but it will get you through this crisis with your credit largely intact, it may be time to put aside your sense of “if only” and accept “what is.”
Also, think about the difference between emotional value and dollar value. This is especially difficult if you’re selling a family home. A buyer is going to be looking at how well THEIR furniture will fit in a room, not how much fun you and your kids had picking out the paint colors. A buyer also may not care about the yard that has great shrubbery that your husband trims into the shape of a fish every year, or how much you love that funky old kitchen sink.
I know this sounds harsh, but I promised you all honesty. And the most honest thing I am telling sellers right now is to be straight with themselves about how much their property is worth, and maybe take some time to consider the tough news in addition to the rosy potential described by that listing Agent who promises you the moon but can’t seem to line up a buyer. If it isn’t moving, there’s a reason. And it’s probably the price.
Yours in HONEST rebellion,
Larry
Do you have stories about your expectations and your reality colliding? I’d love to hear about them! Drop me a line and maybe we’ll feature your story in a future Real Estate Rebel Case Study.
The Housing Market’s not going to recover
The Housing Recovery already happened
We’re nowhere near the Bottom
I’ve been hearing every possible outlook projected by the so-called experts when they talk about what’s going on in Real Estate here in the Bay Area (And the country, for that matter). So what’s a seller supposed to believe? What should a seller do? Wait? Sell? Pray? Have a drink? (well, I’m always up for that, but it may not be helpful in this case)
Honestly, I don’t have a good, general answer. But for people who need to sell, who are facing foreclosure or are looking at a short sale, I do have one piece of advice:
Have realistic expectations about selling your property.
We’ve all felt the sting of the steep decrease in housing values, but it feels especially sharp when you realize that you’re going to HAVE to sell and you have to sell soon. You are going to have a much easier time of things if you accept that no matter what the market MIGHT do later, TODAY you have to get out of your mortgage. And it might hurt. If you have an offer that is much lower than you’d hoped, but it will get you through this crisis with your credit largely intact, it may be time to put aside your sense of “if only” and accept “what is.”
Also, think about the difference between emotional value and dollar value. This is especially difficult if you’re selling a family home. A buyer is going to be looking at how well THEIR furniture will fit in a room, not how much fun you and your kids had picking out the paint colors. A buyer also may not care about the yard that has great shrubbery that your husband trims into the shape of a fish every year, or how much you love that funky old kitchen sink.
I know this sounds harsh, but I promised you all honesty. And the most honest thing I am telling sellers right now is to be straight with themselves about how much their property is worth, and maybe take some time to consider the tough news in addition to the rosy potential described by that listing Agent who promises you the moon but can’t seem to line up a buyer. If it isn’t moving, there’s a reason. And it’s probably the price.
Yours in HONEST rebellion,
Larry
Do you have stories about your expectations and your reality colliding? I’d love to hear about them! Drop me a line and maybe we’ll feature your story in a future Real Estate Rebel Case Study.
Wednesday, July 15, 2009
HEY BIG BANK-REMEMBER WHO YOUR CUSTOMERS ARE!
How many times has this happened?
Ring ring
Ring ring
Ring ring
“Thank you for calling Big Bank, Inc. Your business is important to us! Press 1 for…”
For the third time.
OHHHHHH that ticks me off. Not that people or companies use voicemail-that’s just part of the modern world-what ticks me off is the banks and mortgage companies who have nothing BUT voicemail on the other end of the phone whenever you call. And who don’t call you back after you leave a message for the third time…or the fifth.
If you’re a customer trying to get your loan reworked or trying to do something to forestall foreclosure, working with the banks today is an absolute nightmare!
I’ve been lucky, being on the investor side of the short-sale and foreclosure transactions that I take part in, banks tend to return my calls. But many of my friends and colleagues here in the Bay Area have been sharing horror stories with me about their experiences with trying to reach their banks or mortgage companies to work on modifying their loans or trying to get something worked out BEFORE they go into foreclosure. And these banks have GOTTEN MONEY from all of us, in the form of government bailouts, to do exactly what they are avoiding doing by sending these callers into voicemail hell, and by not following up and returning calls.
What makes me mad is the total lack of respect this shows that many banks and mortgage companies have when it comes to their customer. I think it’s ridiculous that YOU, the person who bought their product (a mortgage, a line of credit, whatever), doesn’t even rate a return call when you are reaching out to them. Have they forgotten that you are a buyer who may be in difficulty today but down the line will have return business? It’s not like you don’t have a whole lifetime of profitable banking relationships to be had!
Even if your home goes into foreclosure, eventually you’ll rebuild your credit, buy another house or take out a student loan or open more credit card accounts-all business that Big Bank will spend billions in advertising to try to get from you. But they won’t return a phone call…or five phone calls…when you need some help today…and that could ensure your loyalty tomorrow.
THAT IS JUST RIDICULOUS!
I’ve even been hearing stories from the national stage about this, which means it’s not an isolated thing for a few people. I can’t even TURN ON THE RADIO with hearing an NPR story about people who have been trying for months to get their bank to work with them BEFORE they go into foreclosure but they just get voicemail and customer service “hold” muzak again and again. Even the Federal Government has noticed-a few days back Treasury Secretary Geithner sent a letter to batch of mortgage companies insisting that they step up their programs for re-working troubled loans.
I’ve been a businessman for more years than I care to share, and I’ve had to make tough decisions and handle all kinds of financial issues. I’ve had to cut off lines of credit and send customers into collection. But I can’t imagine running a business where one of my customers, even one who owed me a lot of money, wouldn’t get a return call to work out their account issues, ESPECIALLY when that customer was calling me to get ahead of any problems they saw on the horizon. And no matter what, my customers have always gotten the respect and consideration from me that any human being deserves.
Come on Big Bank! Remember who put all those profits into your pockets in the good times (heck, just remember who’s paying for your bailout TODAY, in the tough times) and step up to provide the customer service you always promised.
Sheesh.
To my fellow rebels-
If you’re looking at foreclosure, I’d love to hear your bank horror stories-drop me a line or post up in the comments section. Remember, even if you’re a customer of a bank looking at foreclosure, you’re STILL a customer and deserve respect and consideration.
Stay rebellious!!!
Larry
Ring ring
Ring ring
Ring ring
“Thank you for calling Big Bank, Inc. Your business is important to us! Press 1 for…”
For the third time.
OHHHHHH that ticks me off. Not that people or companies use voicemail-that’s just part of the modern world-what ticks me off is the banks and mortgage companies who have nothing BUT voicemail on the other end of the phone whenever you call. And who don’t call you back after you leave a message for the third time…or the fifth.
If you’re a customer trying to get your loan reworked or trying to do something to forestall foreclosure, working with the banks today is an absolute nightmare!
I’ve been lucky, being on the investor side of the short-sale and foreclosure transactions that I take part in, banks tend to return my calls. But many of my friends and colleagues here in the Bay Area have been sharing horror stories with me about their experiences with trying to reach their banks or mortgage companies to work on modifying their loans or trying to get something worked out BEFORE they go into foreclosure. And these banks have GOTTEN MONEY from all of us, in the form of government bailouts, to do exactly what they are avoiding doing by sending these callers into voicemail hell, and by not following up and returning calls.
What makes me mad is the total lack of respect this shows that many banks and mortgage companies have when it comes to their customer. I think it’s ridiculous that YOU, the person who bought their product (a mortgage, a line of credit, whatever), doesn’t even rate a return call when you are reaching out to them. Have they forgotten that you are a buyer who may be in difficulty today but down the line will have return business? It’s not like you don’t have a whole lifetime of profitable banking relationships to be had!
Even if your home goes into foreclosure, eventually you’ll rebuild your credit, buy another house or take out a student loan or open more credit card accounts-all business that Big Bank will spend billions in advertising to try to get from you. But they won’t return a phone call…or five phone calls…when you need some help today…and that could ensure your loyalty tomorrow.
THAT IS JUST RIDICULOUS!
I’ve even been hearing stories from the national stage about this, which means it’s not an isolated thing for a few people. I can’t even TURN ON THE RADIO with hearing an NPR story about people who have been trying for months to get their bank to work with them BEFORE they go into foreclosure but they just get voicemail and customer service “hold” muzak again and again. Even the Federal Government has noticed-a few days back Treasury Secretary Geithner sent a letter to batch of mortgage companies insisting that they step up their programs for re-working troubled loans.
I’ve been a businessman for more years than I care to share, and I’ve had to make tough decisions and handle all kinds of financial issues. I’ve had to cut off lines of credit and send customers into collection. But I can’t imagine running a business where one of my customers, even one who owed me a lot of money, wouldn’t get a return call to work out their account issues, ESPECIALLY when that customer was calling me to get ahead of any problems they saw on the horizon. And no matter what, my customers have always gotten the respect and consideration from me that any human being deserves.
Come on Big Bank! Remember who put all those profits into your pockets in the good times (heck, just remember who’s paying for your bailout TODAY, in the tough times) and step up to provide the customer service you always promised.
Sheesh.
To my fellow rebels-
If you’re looking at foreclosure, I’d love to hear your bank horror stories-drop me a line or post up in the comments section. Remember, even if you’re a customer of a bank looking at foreclosure, you’re STILL a customer and deserve respect and consideration.
Stay rebellious!!!
Larry
Tuesday, July 7, 2009
July Buyer's Tip-Just DO it!!
I get asked a lot of questions from potential buyers of short-sale real estate in the SF Bay Area about timing and what's going on in the market: "Is it going up?", "Is it going down?", "I found a good deal, should I wait and see what happens? What if the price drops even further?".
So here's my Buyer's tip for this month-JUST DO IT!
If there's a property that you're interested in, and it's a good price and it meets your criteria (are you buying a place to raise your kids? Something to fix up and sell in 5 years?), go for it! Sure, the market might keep sliding and you can pick something up in 3 months for a little cheaper than today, but it's equally possible that the particular property could get snapped up, or the economy could get turned around.
You should make a buying decision based on what IS, not what MIGHT be. I saw a sign in an antique shop down in Pacific Grove the other day that said "The treasure you see today might not be here when you come back next week." I believe that principle wholeheartedly. I also believe that for every time one you Rebellious Readers of mine has said, "I'm glad I waited" at least two more of you have said "Dang it! I shoulda jumped on that deal when I had the chance!"
I'll add one caveat to this-I'm assuming that, no matter what your buying reasons are, you're making a CONSIDERED business decision. For instance, are you sure you have the cash or talent to fix the plumbing in that reposessed property? Are you certain you can live with that yard that's a little smaller than you'd like? Can you actually afford the payments on that place you're planning on flipping if you can't resell the house down the road?
If you're looking at your purchase with eyes wide open and a sound reasoning, and all that's holding you back is a case of the "what if the price goes down a little later?" blues, then make like a pair of Nikes and JUST DO IT!
Rebelliously Yours,
Larry
So here's my Buyer's tip for this month-JUST DO IT!
If there's a property that you're interested in, and it's a good price and it meets your criteria (are you buying a place to raise your kids? Something to fix up and sell in 5 years?), go for it! Sure, the market might keep sliding and you can pick something up in 3 months for a little cheaper than today, but it's equally possible that the particular property could get snapped up, or the economy could get turned around.
You should make a buying decision based on what IS, not what MIGHT be. I saw a sign in an antique shop down in Pacific Grove the other day that said "The treasure you see today might not be here when you come back next week." I believe that principle wholeheartedly. I also believe that for every time one you Rebellious Readers of mine has said, "I'm glad I waited" at least two more of you have said "Dang it! I shoulda jumped on that deal when I had the chance!"
I'll add one caveat to this-I'm assuming that, no matter what your buying reasons are, you're making a CONSIDERED business decision. For instance, are you sure you have the cash or talent to fix the plumbing in that reposessed property? Are you certain you can live with that yard that's a little smaller than you'd like? Can you actually afford the payments on that place you're planning on flipping if you can't resell the house down the road?
If you're looking at your purchase with eyes wide open and a sound reasoning, and all that's holding you back is a case of the "what if the price goes down a little later?" blues, then make like a pair of Nikes and JUST DO IT!
Rebelliously Yours,
Larry
Wednesday, July 1, 2009
5 Questions for the Real Estate Rebel
Since launching the Real Estate Rebel, I’ve gotten a lot of questions about exactly what I’m up to. I’ve taken the liberty of consolidating those questions and their answers below-enjoy!
Q: Why did you launch the RE Rebel project?
A: I saw a need in the market for buyers to get out from under properties and for banks to start being realistic about how to handle distressed properties. There aren’t really any realtors out there who understand both sides of the distressed property equation. Homeowners want to save their credit rating and be treated well as they go through a difficult time. Lenders want to receive a payoff based on the fair market value (FMV) of the property. Short sales seem to be the only way to get both the lender and the homeowner out from under a house with a negative equity position. These are complicated transactions, both from a business perspective and the emotional side.
Q: What can we expect from your commentary?
A: Honesty. I think that both buyers and sellers of distressed properties can use a reality check. The Market is tough, but that doesn’t mean that your credit score has to be destroyed and it doesn’t mean there aren’t good deals to be had. My job is to make sure everybody is on the same page. I think we get a lot of mixed signals about where the economy is headed. I don’t think we, as buyers or sellers, should believe much of anything out of Washington (or Wall Street, for that matter), when it comes to making a property decision. The world of politics and the realities of the economy don't mix as well as they pretend to, so I’m trying offer a solid reality check in the market and how it impacts selling your house or purchasing a property.
Q: What are you seeing in the market right now?
A: Interest rates are inching up, but prices are still sliding a bit. So much depends on your unique situation that there’s not much I can say on this front. It’s not about the Dow going down or the Stimulus package getting approved, it’s about your individual needs (as a seller) or specific financial objectives (as a buyer).
Q: What markets do you primarily keep an eye on?
A: My focus is the California Bay Area and other California markets, but I’m keeping an eye out all over the country. The issues we’re seeing here aren’t unique, and I think my rebellious approach can work in just about any market.
Q: Isn’t buying low and selling high just good business? What makes you a Rebel?
A: I have to go back to my answer to #2: “Honesty”. I’m not out to low-ball anybody or to squeeze every last nickel out of a property. It’s like that Dudley Moore movie about the ad executive who has a nervous break down and then rebuilds his career with help from his fellow patients at the mental hospital. My favorite quote from the movie comes from the campaign that the Dudley Moore character creates for Volvo, “Yes, they’re boxy, but they’re SAFE”. Just being straight forward seems to be awfully unique in today’s world.
Here’s an invitation to all my Rebellious Readers (RRs): I want to make sure that both buyers and sellers distressed properties get value from what I do. I’m inviting people to post questions to this blog any time, and I’ll get some straight forward answers out there for everybody’s benefit. Please feel free to send me anything you’d like me to comment on. Also, check out our current inventory at www.sterlingedwardsrealty.com
Stay Rebellious!
-Larry
Q: Why did you launch the RE Rebel project?
A: I saw a need in the market for buyers to get out from under properties and for banks to start being realistic about how to handle distressed properties. There aren’t really any realtors out there who understand both sides of the distressed property equation. Homeowners want to save their credit rating and be treated well as they go through a difficult time. Lenders want to receive a payoff based on the fair market value (FMV) of the property. Short sales seem to be the only way to get both the lender and the homeowner out from under a house with a negative equity position. These are complicated transactions, both from a business perspective and the emotional side.
Q: What can we expect from your commentary?
A: Honesty. I think that both buyers and sellers of distressed properties can use a reality check. The Market is tough, but that doesn’t mean that your credit score has to be destroyed and it doesn’t mean there aren’t good deals to be had. My job is to make sure everybody is on the same page. I think we get a lot of mixed signals about where the economy is headed. I don’t think we, as buyers or sellers, should believe much of anything out of Washington (or Wall Street, for that matter), when it comes to making a property decision. The world of politics and the realities of the economy don't mix as well as they pretend to, so I’m trying offer a solid reality check in the market and how it impacts selling your house or purchasing a property.
Q: What are you seeing in the market right now?
A: Interest rates are inching up, but prices are still sliding a bit. So much depends on your unique situation that there’s not much I can say on this front. It’s not about the Dow going down or the Stimulus package getting approved, it’s about your individual needs (as a seller) or specific financial objectives (as a buyer).
Q: What markets do you primarily keep an eye on?
A: My focus is the California Bay Area and other California markets, but I’m keeping an eye out all over the country. The issues we’re seeing here aren’t unique, and I think my rebellious approach can work in just about any market.
Q: Isn’t buying low and selling high just good business? What makes you a Rebel?
A: I have to go back to my answer to #2: “Honesty”. I’m not out to low-ball anybody or to squeeze every last nickel out of a property. It’s like that Dudley Moore movie about the ad executive who has a nervous break down and then rebuilds his career with help from his fellow patients at the mental hospital. My favorite quote from the movie comes from the campaign that the Dudley Moore character creates for Volvo, “Yes, they’re boxy, but they’re SAFE”. Just being straight forward seems to be awfully unique in today’s world.
Here’s an invitation to all my Rebellious Readers (RRs): I want to make sure that both buyers and sellers distressed properties get value from what I do. I’m inviting people to post questions to this blog any time, and I’ll get some straight forward answers out there for everybody’s benefit. Please feel free to send me anything you’d like me to comment on. Also, check out our current inventory at www.sterlingedwardsrealty.com
Stay Rebellious!
-Larry
Thursday, June 18, 2009
HR 1728-Keep your hands off MY risk!
House Bill 1728: Keep your hands off MY risk!
For those of you out there who invest in real estate on your own, LOOK OUT for HB 1728. While it’s titled “Mortgage Reform and Anti-Predatory Lending Act”, it also places a significant road block for the individual real estate investor. I’m not going to dissect the Bill (www. http://www.govtrack.us/congress/billtext.xpd?bill=h111-1728), nor do I disagree with the Bill’s stated goal of ending predatory lending, but the RE Rebel in me can’t accept a key provision: the Bill limits how often I personally can provide owner-based wrap-around financing (if you don’t know what that is, Google it) to a buyer of one of my own properties. According to the Bill’s provisions, I can only make a wrap-around mortgage once every 3 years. WHAT??
Don’t get me wrong-I’m as ticked off as anybody at the mortgage scams that brought us into this current crisis. But this Bill goes too far. The problems didn’t come from individual investors taking calculated risks, it came from companies creating enormous portfolios of high-risk loans, then other companies buying up those portfolios. At every step the risk got bigger and the originator of the loan passed that risk along to the new portfolio buyer. Much of the pressure to build these portfolios came from commissioned sales people who carried no personal risk, but collected high commissions and then headed for the hills (or the Club Med, or the Porsche dealership)
HB 1728 won’t stop this. But it does stop me, as a rebellious investor who takes risks with my own cash, from making calculated business decisions. If I help a buyer to get into a property using a wrap-around, and then that buyer defaults, it’s MY credit rating and MY money that suffer. That’s my call, not the US Congress’.
It’s bad for buyers too! It cuts off another source of financing for people who have less than perfect credit and/or who can’t find a 20% down payment. For those of you reading this in other parts of the country…in the California Bay Area a 20% down payment on a CONDO is about $100K. How many of us have that kind of money just stashed away? An owner-financed wrap around mortgage from a seller like me can help good people gain the American dream.
Sheesh! It’s like throwing the baby out with the bathwater! The Bill has already passed the House and now sits in the US Senate-let’s keep our fingers crossed that the Senate manages to keep the good stuff in and toss this provision out the window!
Yours in Rebellion,
Larry
For those of you out there who invest in real estate on your own, LOOK OUT for HB 1728. While it’s titled “Mortgage Reform and Anti-Predatory Lending Act”, it also places a significant road block for the individual real estate investor. I’m not going to dissect the Bill (www. http://www.govtrack.us/congress/billtext.xpd?bill=h111-1728), nor do I disagree with the Bill’s stated goal of ending predatory lending, but the RE Rebel in me can’t accept a key provision: the Bill limits how often I personally can provide owner-based wrap-around financing (if you don’t know what that is, Google it) to a buyer of one of my own properties. According to the Bill’s provisions, I can only make a wrap-around mortgage once every 3 years. WHAT??
Don’t get me wrong-I’m as ticked off as anybody at the mortgage scams that brought us into this current crisis. But this Bill goes too far. The problems didn’t come from individual investors taking calculated risks, it came from companies creating enormous portfolios of high-risk loans, then other companies buying up those portfolios. At every step the risk got bigger and the originator of the loan passed that risk along to the new portfolio buyer. Much of the pressure to build these portfolios came from commissioned sales people who carried no personal risk, but collected high commissions and then headed for the hills (or the Club Med, or the Porsche dealership)
HB 1728 won’t stop this. But it does stop me, as a rebellious investor who takes risks with my own cash, from making calculated business decisions. If I help a buyer to get into a property using a wrap-around, and then that buyer defaults, it’s MY credit rating and MY money that suffer. That’s my call, not the US Congress’.
It’s bad for buyers too! It cuts off another source of financing for people who have less than perfect credit and/or who can’t find a 20% down payment. For those of you reading this in other parts of the country…in the California Bay Area a 20% down payment on a CONDO is about $100K. How many of us have that kind of money just stashed away? An owner-financed wrap around mortgage from a seller like me can help good people gain the American dream.
Sheesh! It’s like throwing the baby out with the bathwater! The Bill has already passed the House and now sits in the US Senate-let’s keep our fingers crossed that the Senate manages to keep the good stuff in and toss this provision out the window!
Yours in Rebellion,
Larry
Thursday, May 28, 2009
What does the Real Estate Rebel do?
“May you live in interesting times”-Ancient Blessing (or curse)
Lets face it-these ARE those “interesting times”; they’re here, and we’re living in them. That means there are both extraordinary opportunities and unexpected pitfalls. Today's real estate world abounds with phrases like "Loss Mitigation", "Short Sale" and, of course, FORECLOSURE.
When you are buying or selling a distressed property in these times, you’re making some of the most important decisions of your life. Our goal is to keep you informed of the trends in our local markets, and with property values fluctuating so much in recent months, our expertise can help you make sound decisions.
If you are a buyer, our goal is to provide you with the ideas for investing in distressed property, in the fastest and most modern way possible. With market conditions being what they are, you need the best information quickly to beat the other investors to the deal. We invite you to subscribe to our blog for the most rapid and complete updates on properties for purchase.
If you are a seller, we want to work with you to get the best deal for your home. We understand that tough economic times have forced many into situations they never expected to be in. Our experience in bank negotiation and stopping foreclosure means that you get treated with the respect you deserve in a time frame that works for you. Our team will work with you, negotiating with your lender(s) so you have somebody on your side during a difficult process. By subscribing to our blog, you can get updates on market conditions, ideas to assist you during this crisis, and more.
Thanks for visiting us-look for much more over the coming weeks.
Lets face it-these ARE those “interesting times”; they’re here, and we’re living in them. That means there are both extraordinary opportunities and unexpected pitfalls. Today's real estate world abounds with phrases like "Loss Mitigation", "Short Sale" and, of course, FORECLOSURE.
When you are buying or selling a distressed property in these times, you’re making some of the most important decisions of your life. Our goal is to keep you informed of the trends in our local markets, and with property values fluctuating so much in recent months, our expertise can help you make sound decisions.
If you are a buyer, our goal is to provide you with the ideas for investing in distressed property, in the fastest and most modern way possible. With market conditions being what they are, you need the best information quickly to beat the other investors to the deal. We invite you to subscribe to our blog for the most rapid and complete updates on properties for purchase.
If you are a seller, we want to work with you to get the best deal for your home. We understand that tough economic times have forced many into situations they never expected to be in. Our experience in bank negotiation and stopping foreclosure means that you get treated with the respect you deserve in a time frame that works for you. Our team will work with you, negotiating with your lender(s) so you have somebody on your side during a difficult process. By subscribing to our blog, you can get updates on market conditions, ideas to assist you during this crisis, and more.
Thanks for visiting us-look for much more over the coming weeks.
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