10 Habits of Highly Effective Real Estate Investors

Real Estate Investors come in all perspectives. There are those that do it part time while working a regular day job. There are those that keep a prior home as a rental when the move to a larger home they will occupy. Yet there are others that focus all their attention on the making real estate investing a full time occupation.

Whatever aspect you come from, here are 10 habits you must attain to be effective in your real estate investing:

10 Habits of Highly Effective Real Estate Investors

Here's to your successful investing. Cody

The 4 Most Important Things to Remember When Evaluating Real Estate Deals

There are a lot of things to consider when evaluating a deal. As real estate investors, we must find great deals, not good deals. Read the entire text of this article at this link from Biggerpockets.com.

The 4 Most Important Things to Remember When Evaluating Real Estate Deals


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Cody

Mortgage Closing Costs increase be 36%

According to a study by Bankrate.com, the average closing costs to a consumer have increased 36.6%. Watch the video below for more details about their findings.

2010 Bankrate Closing Costs Study

FHA Launches Short Refi Opportunity for Underwater Homeowners

FHA just released a Mortgagee Letter that fully describes their new "underwater" refi program. This program is designed to assist homeowners that are "underwater" in their house. The link below will take you to the HUD.Gov website for a general overview of the program. That general overview contains a link to the actual Mortgagee Letter with specifics. I certainly hope this government program has better success than previous programs.

FHA Short Refi Program Announcement

A Fifth of Porland-area homeowners underwater on mortgage

Wow! This is an amazing statistic. According to an article in yesterdays Oregonian, written by Jeff Manning, 22.6% of Portland-area homes owe more on their mortgage(s) than the house has value.

You can read the complete article by following this link.

http://www.oregonlive.com/business/index.ssf/2010/08/a_fifth_of_portland-area_homeo.html

Ten Warnings Signs of a Mortgage Modification Scam

Here are 10 warning signs of a Mortgage Modification Scam:


1. “Pay us $1,000, and we’ll save your home.” Some legitimate housing counselors may charge small fees, but fees that amount to thousands of dollars are likely a sign of potential fraud – especially if they are charged up-front, before the “counselor” has done any work for you. Be wary of companies that require you to provide a cashier’s check or wire transfer before they take any action on your behalf.

2. “I guarantee I will save your home – trust me.” Beware of guarantees that a person or company can stop foreclosure and allow you to remain in your house. Unrealistic promises are a sign that the person making them will not consider your particular circumstances and is unlikely to provide services that will actually help you.

3. “Sign over your home, and we’ll let you stay in it.” Be very suspicious if someone offers to pay your mortgage and rent your home back to you in exchange for transferring title to your home. Signing over the deed to another person gives that person the power to evict you, raise your rent, or sell the house. Although you will no longer own your home, you still will be legally responsible for paying the mortgage on it.

4. “Stop paying your mortgage.” Do not trust anyone who tells you to stop making payments to your lender and servicer, even if that person says it will be done for you.

5. “If your lender calls, don’t talk to them.” Your lender should be your first point of contact for negotiating a repayment plan, modification, or short sale. It is vital to your interests to stay in close communication with your lender and servicer, so they understand your circumstances.

6. “Your lender never had the legal authority to make a loan.” Do not listen to anyone who claims that ‘secret laws’ or ‘secret information’ will be used to eliminate your debt and have your mortgage contract declared invalid. These scammers use sham legal arguments to claim that you are not obligated to pay your mortgage. These arguments don’t work.

7. “Just sign this now; we’ll fill in the blanks later.” Take the time to read and understand anything you sign. Never let anyone else fill out paperwork for you. Don’t let anyone pressure you into signing anything that you don’t agree with or understand.

8. “Call 1-8800-FED-LOAN.” This may be a scam. Some companies trick borrowers into believing that they are affiliated with or are approved by the government or tell you that you must pay them high fees to qualify for government loan modification programs. Keep in mind that you do not have to pay to participate in legitimate government programs. All you need to do is contact your lender to find out if you qualify.

9. “File for bankruptcy and keep your home.” Filing bankruptcy only temporarily stops foreclosure. If your mortgage payments are not made, the bankruptcy court will eventually allow your lender to foreclose on your home. Be aware that some scammers will file bankruptcy in your name, without your knowledge, to temporarily stop foreclosure and make it seem as though they have negotiated a new payment agreement with your lender.

10. “Why haven’t you replied to our offer? Do you want to live on the streets?” High-pressure tactics signal trouble. If someone continually contacts you and pressures you to work with them to stop foreclosure, do not work with that person. Legitimate housing counselors do not conduct business that way.

For more information, please go to my website at http://www.northwestpropertyoptions.com/.

Finding Gold at a Yard Sale

I just picked up at a yard sale for $1 Robert Kiyosaki’s Rich Dad Poor Dad Cash Flow Quadrant on audio cassette. Imagine that; one whole dollar. Such wealth of information for such a price. I listened to the beginning of the first cassette driving home from the yard sale and was reminded about the four quadrants.

The reader talked about the differences of the right side and the left side of the quadrant. One difference is that there are few tax breaks for those on the left side of the quadrant, and many tax breaks for those on the right side of the quadrant. Another difference is that on the left side of the quadrant, YOU are doing the work. On the right side, others, or your money, are doing the work. Doesn’t that sound like a better way? Sure does to me. I like the saying “Don’t work for money; have money work for you.”


The point I am trying to make in a short time is that many of you reading this or know others that are doing the work from the left side of the quadrant, and you could be making money from the right side of the quadrant. Drilling down a bit more, many of you have, or know others that have, retirement funds that are not working well for you.


So, I remind you, that you can purchase real estates, or invest in notes secured by real estate from a self-directed IRA. I work with a “facilitator” that can assist in setting up the proper LLC for your IRA so you can invest your money and become a passive investor in real estate. If you would like to know more about this, please contact me.

Isn’t it about time you take control of your financial future and move over to the right side of the quadrant?

Fannie Mae's New Website - KnowYourOptions.com

Fannie Mae has just opened a new website called KnowYourOptions.com. This site is designed to assist struggling homeowners by providing quality information on the foreclosure process, and advises them of the various options available to them to help avoid foreclosure.

This is a comprehensive site that provids volumes of information, things to watch out for (scams) and some checklists. I especially like the Contact Log that helps you keep track of the various people and entities you talk with.

Check out the site:

http://www.knowyouroptions.com/

6 steps to Fire Protection

As the summer heat continues, we need to prepare our properties against the threat of fire. Here are 6 steps to fire protection.

http://www.inman.com/buyers-sellers/columnists/paulbianchina/6-steps-fire-protection

Foreclosure Loses in 2010 expected to exceed 2009

More than 1 million American households are likely to lose thier homes through foreclosure in 2010. Read the article at the link below for the complete story. I suggest that rather than losing the home, consider selling the home on a short sale prior to the foreclosure auction. If you would like to find out more information, please go to me web site at www.SellHousePortlandOR.com for information.

http://www.foxnews.com/us/2010/07/15/homes-lost-foreclosure-track-eclipse-levels-banks-work-backlog/

'Shadow Inventory' still gowing in some markets

Inman News is reporting today that the "Shadow Inventory" is still growing in some markets. Portland, OR shows a shadow inventory of 34.5 months, which the article further reports is at the peak, but not yet retreating.

The article's final paragraph is quite telling: "To liquidate these properties successfully, we believe servicers may be forced to reduce their prices. And as these reduced-price homes hit the market, the supply will keep keep rising -- which could drive prices further down."

Read the full article by following this link:

http://www.inman.com/news/2010/06/16/shadow-inventory-still-growing-in-some-markets

Be sure to become a fan of Northwest Property Options on Facebook.

I took a call last night from an out of state landlord that appears to be interested in selling his house. He responded to a postcard that was mailed from my service late last summer. He has held the card for that long. His renter is moving out and he just might be ready to sell.

Follow me through this transaction as we document our steps via video.

http://www.youtube.com/watch?v=Tf1I48yjCzM

Ever wonder what the difference is between a "short sale" and a "deed-in-lieu of foreclosure". This link below explains the differences and the advantages of one or the other. There are also some links to the IRS website that talks about the "Mortgage Loan Forgiveness Act of 2007".

http://www.foreclosures.com/forecast/ff_Jun10/default.asp?topic=marketing

Senate Passes Finance Reform Legislation

Anti-Predatory Lending Laws to Hurt Investors

National REIA - Despite the ardent opposition from National REIA, many state associations across the country and other industry organizations, the Anti-Predatory Lending laws that we have been fighting are now closer than ever to becoming the law of the land after the recent passage of HR 4173 in the Senate on May 20, 2010.

To fully grasp the impact that this legislation could have on the Real Estate investing industry, as well as the economy as a whole during this fragile recovery process please see the Economic Impact of Seller Financing graphic.

*This flow chart, based on a study conducted by RealTrends and Harris Interactive, commissioned by Personal Real Estate Investor Magazine and other partners explains that for every one percent of homes sold by investors each year that $3.2 Billion dollars in Seller financing transactions occur. The one percent is a very low estimate and some industry professionals would estimate that more than 5% of homes sold by real estate investors are sold via seller financing. This would mean that $16 Billion dollars in real estate transactions are going to be eliminated.

History of our fight

On March 26, 2009 Rep. Brad Miller (D-NC) introduced HR 1728, the Mortgage Reform and Anti-Predatory Lending Act which passed the House on May 7, 2009. After speaking with Rep. Miller’s staff during our 3rd Annual Day on the Hill event, even he was unaware of where the language referring to individual property owners came from. According to his staff it had not been his intent to negatively impact property owners in such a way, but we’ve all heard the term, unintended consequences.

Despite its rapid movement in the House, HR 1728 died in the Senate Committee on Banking, Housing, and Urban Affairs, which we were very happy about. Our sense of comfort was short lived, however, when we learned that the exact wording from HR 1728 had been cut and pasted into HR 4173 the Wall Street Reform and Consumer Protection Act which was introduced in the House on December 2, 2009 by Barney Frank (D-MA) and passed on December 11, 2009. The passage of a bill that would seek to reform the entire financial system (the bill is over 1,400 pages in length) in less than two weeks is unheard of, but this is what we’re up against.

Unlike HR 1728, which had no companion bill in the Senate, HR 4173 was tied to S 3217, Restoring American Financial Stability Act, and we knew we’d have to fight to have the language we have been concerned with all along removed. Considering Senate Bill 3217, introduced by Senator Chris Dodd (D-CT) did not contain the same harmful language we were optimistic that we may have a chance to have the section pertaining to individual property owners removed if the bills required a conference committee. In a surprising and unfortunate move, however, the Senate dropped debate on S 3217 after repeated attempts by Senate leader Harry Reid (D-NV) to force cloture, and passed an amended version of HR 4173 which contained the same language requiring all sellers who finance more than one of their own deals in every 36 month period to become licensed as Mortgage Loan Originators.

What’s Next?

As the Senate version and the House version of HR 4173 are different they will require a conference committee hearing, but because the language in Title VII does not differ, the committee will not even address our concern. The final bill has not yet been passed by either chamber or signed by President Obama, but these are just formalities now that the real work has been completed.

Our next move is to continue our advocacy efforts regarding HR 3440, the Installment Sales bill that we have been supporting since its introduction in 2008. This legislation if passed may be a vehicle for an amendment to HR 4173 that would clarify an exemption for individual property owners and it is now our mission to identify a legislator who will be willing to introduce and support this type of amendment.

Despite the feeling that we have been dealt a direct blow, it is important to remember that our industry was not the specific target of the financial reform efforts. We must continue to clarify our intentions to professionally rebuild communities, and point to the positive impact that real estate investors can have on communities across this country.

As we again push the reset button in the wake of another hard fought battle lost, we must reassert our dedication to our businesses, and take aim at initiatives that will enable us to continue playing our role in the ongoing economic recovery process.

If you have questions about how you can help, please do not hesitate to contact your local Real Estate Investors Association which you can find at http://www.nationalreia.com/.

Would you walk away? | Inman News

Would you walk away? Inman News

Here is an article by Teresa Moardman with Inman News that speaks about walking away from your home loan.

Did you see 60 Minutes last Sunday? They did a piece on Strategic Defaults. Here is the piece:

http://www.cbsnews.com/video/watch/?id=6470184n&tag=api

Freddie Mac News on Emerging Fraud Trends: Short Payoff Fraud

Freddie Mac has just released a news item regarding Short Payoff Fraud. Plainly stated, if you purchase a property at a discount and the lender must accept a short payoff, but you already have a new purchaser under contract and do not disclose that purchase transaction to the shorted lender, they consider that fraud.

Here is a link to the news on the Freddie Mac website:

http://www.freddiemac.com/singlefamily/news/2010/0412_payoff_fraud.html

First-Time Homebuyer Credit for Members of the Military

While the First-Time Homebuyer's Tax Credit is set to expire soon, there is a special exception to these deadlines for the military. In summary, if you were a member of the military and/or certain other federal employees that served outside the US, you have an extra year to buy a principal residence and qualify for the credit.



To be eligible, you must have served outside the US for at least 90 days during the time of January 1, 2009 and April 30, 2010. You must be in contract to purchase a principle residence by April 20, 2011 and close on the transaction by June 30, 2011. There are provisions for eligibility of you had to return to the US for medical reasons prior to the 90 period.



For complete details, follow this link to the IRS.gov website:



http://www.irs.gov/newsroom/article/0,,id=215594,00.html



Thank you, and check back often. Cody

First Time Homebuyer's Credit soon to expire

The First Time Homebuyer's Credit will soon expire. You must have a fully signed sales contract in force by April 30, 2010 and close by June 30, 2010 to qualify. First time homebuyer's may receive a credit up to $8,000, and move-up purchasers may be entitled to a $6,500 credit. There are some income and qualifications to receive the credit. Watch the video below from the IRS for a few more details.

http://www.youtube.com/watch?v=GkzB03uuGlg

Thanks, Cody

Radio Interview with Bill Valentine of Valentine Ventures

I just completed a telephone interview with Bill Valentine. In case you don't know Bill, he is a money manager and owner of Valentine Ventures in Bend, OR. Bill's clientele are investors with an investable net worth of $500,000 or larger. ( A special thank you to Chris Starling with Arbor Mortgage Group in Bend for referring my information to Bill.)

Bill was very interested in the mechanics of how my Partners in Profits program and the Perfect Tenant program works to fill the void in today's home ownership and investing market. The interview will air this Sunday, during the noon to 1:00 pm segment on station KXL 750 in the Portland area. Bill's program, "The Rich Life with Bill Valentine" is aired every Sunday from 11:00 am to 1:00 pm, and is heard on 10 radio stations throughout the state of Oregon. He also archives the show for future listening.

I hope you get the opportunity to listen to the program, not only this Sunday but on an ongoing basis. Here is a link to his website:

http://www.valentineventures.com/rich.htm

Thanks for listening.

Indy Mac sweet deal at your expense

I just watched a short video and thought you might like to see this. It illustrates what our government is doing with our money, specifically regarding the mortgage industry. Do you wonder why mortgage modifications seem to be so tough and rarely get approved?

The FDIC has a special arrangement with One West Bank. One West Bank purchased the mortgage assests of IndyMac Bank back in 2008. They purchased these at 70% of the loan amount. They have a "arrangement" with the FDIC on how they reduce their risk in the event of default. In case you werent' aware, One West Bank is owned by a VP with Goldman Saks Bank and George Soros among others.

This video will make blood shoot out of your eyes:

http://www.thinkbigworksmall.com/mypage/player/tbws/23088/1385485

Forward this to everyone you can think of. Let me know what you think.

Cody

Two New Programs

This posting is an update of my status and contains information of a release of two new programs. This is from an email that was targeted towards mortgage broker contacts I had while a Mortgage Wholesale Account Executive. You are likely aware that I left SunTrust Mortgage back in mid-December. I did not leave for a new job with another lender; rather, I took some time and spent the balance of December with my family, particularly with my son. He is a Marine and was home for the holidays on a pre-deployment leave. In early January, he was deployed to Asia and is currently on a Marine Expeditionary Unit (MEU) for 6 months.

I’ve also taken time to contemplate my next move. This is where you come in. I am not that interested in going back into the mortgage industry. 27+ years seems like enough. Yet, I have always been interested in real estate. I formed a real estate investing company a few years ago, but wasn’t active until last year. I’ve determined that NOW is the right opportunity to ramp up that business.

Part of my complete business model can benefit you as a mortgage broker/banker. There are two opportunities to partner with me for you to make some money. Allow me to outline both of these methods.

Partners in Profit
Our Partners in Profit program is where we fund our property acquisitions with private money. Not hard money, but from people with under-performing IRA’s or other investment accounts. People you know.

I am not interested in financing my property acquisitions through traditional bank or mortgage company financing. Rather, I am looking for private investors who are looking for returns better and/or more stable than what they may get elsewhere. As you may know, the IRS allows people to hold real estate or notes secured by real estate in their IRAs. I look for people with IRAs that are not comfortable with the volatility in the stock market, perhaps they don’t have the time to actively watch their investment accounts, and have an interest in passive income through real estate. My company would borrow money from the IRA, secured by a note and trust deed on the house being acquired, and pay a monthly interest payment for the duration of the note, usually 24 – 48 months.

I have a relationship with a local company that can assist with initiating the proper self-directed IRA to use for this purpose. You may know of one as well. They handle all the particulars, and I never have my hands on the money. It gets disbursed through escrow, the loan is secured by a Trust Deed and note, I set up and pay for a monthly contract collection account, and the investor receives passive income deposited directly back into their IRA account. Since I generally acquire these properties at a significant discount, their loan is secured in a high equity position. If anything goes sideways, they could take the house back at generally a 65 – 70% LTV, dispose of the property at market value and receive back there original investment plus the additional equity amount. It’s really a no-brainier for someone that isn’t happy with their current IRA performance and desires passive income. These notes are generally written for a 2 – 4 year period. They are not used to finance flips or short term holds, although sources for that type of funding are welcome.

Your opportunity is to source these Partners in Profit private investors and connect them to me. I am confident you have at least one client in your database that has an IRA that could work for this purpose. When I acquire a property and use funds from your referral, I pay you a 1% fee of the amount borrowed paid through escrow. You get paid simply for the referral; no loan application to process, no appraisal to order through an AMC, no loan package to submit to a lender and manage conditions. Sound Good?

The Perfect Tenant Program
I’m sure you have a drawer full of clients that are looking to become homeowners, but are not quite within the parameters required for approval of financing within the current lending restrictions. These are good people, deserve a home and might be eligible for financing if there was some sub-prime or Alt-A loan programs available. In 2 – 4 years, they could qualify for a standard loan program.

What we do is match these clients with the properties that are financed under the Partners in Profit program described above or another property I have in my inventory. We then draw up the appropriate Lease with Option to Purchase document for that client on that house. You continue to work with that client during the Lease Option period, making sure they are ready by the end of the Lease Option term, and handle the financing when they exercise the option to purchase. You get paid again!!

When the client exercises their option to purchase and we pay off the private lender, then we do it all again, and you get paid 1% again on the new use of the private funds. It becomes a repeated cycle of income for you.

This is a niche alternative for your clients that you would previously put into a sub-prime or Alt A type product. Today, we are all looking for a unique niche that sets us apart from the standard vanilla loan products available.

Now, a few things. First, if you have any questions, please call me or email me back. If you have any suggestions, I welcome the feedback. If you have no interest in this, let me know and I will remove you from further mailings. Most importantly, if you are interested in the programs outlined above and have candidates for either the Partners in Profit program or the Perfect Tenant Program, let’s talk. You can contact me through any of the avenues listed below.

Thank you for this opportunity to once again bring you a viable program that can prove profitable to all parties.

Cody Cox
Northwest Property Options, LLC.
503-682-1946 Office
503-784-1417 Mobile
503-685-6339 Fax

Email: northwestpropertyoptions@gmail.com
Website: www.northwestpropertyoptions.com
Blog: http://northwestpropertyoptions.blogspot.com

Great short Video

You really need to watch this video. I think you will enjoy.

http://www.youtube.com/watch?v=jXeCAeACmJE