UTAH REAL ESTATE INVESTOR

In this video I walk through a brief property analysis to evaluate the potential of a property in American Fork, UT for subdivision (lot split) possibility. This property has been on the market for about 1 year because the asking price does not justify what the property can become.

This property needs 150 feet of frontage to subdivide into 2 lots. Many people have approached the neighbors about buying the missing land but the neighbors do not want to sell. Using Highest & Best Real Estate Investing techniques we uncover another option.

This video goes through the steps of the initial property analysis to determine if there is enough potential to pursue this property (and move to the next step in the evaluation process).

“A Las Vegas bankruptcy judge has dealt a blow to an obscure but critical piece of the mortgage enforement machinery that could slow foreclosures.

“After a rare hearing in front of three judges last year that initially encompassed 27 cases, U.S. Bankruptcy Judge Linda Riegle has ruled that the Mortgage Electronic Registration System (MERS) could not represent lenders seeking to foreclose on delinquent homeowners already in bankruptcy unless it could produce the actual loan note. This goes to the heart of how home lending has evolved over the past two decades, with a loan rarely staying on the books of the originator but often being sold several times to other institutions or investment groups. As a result, producing a loan document is far more complex than opening a drawer in a filing cabinet.” (Tim O’Reiley)

Essentially the court ruling means that a lender must be able to produce the actual mortgage note in order to foreclose. While this case has been appealed, it awaits to be seen what the ultimate ramifications are for all the mortgage notes being serviced by someone other than the lender and what rights they maintain through the foreclosure process.

I want to start investing but I don’t have any money. What can I do to get started investing in real estate?

Getting started investing in real estate does not require money. Money is an important tool but it is not a requirement for investing in real estate. While there are a myriad of ways to invest without cash here are a few ideas to consider.

• Assist an experienced investor
• Shadow an experienced investor
• Apprentice with an experienced investor
• Partner with an experienced investor
• Use your good credit and work history (traditional funding and refinancing)
• Access Lines of Credit (HELOC, BLOC, SBA, etc.)
• Use OPM (money inside your (SOI) Sphere of Influence)
• Seller Financing options

Let me summarize each of these options and show how they fit into our real estate investing business model.

Assist an experienced investor
Investing in real estate on a high level requires a team of people doing various jobs. Someone is responsible for doing research on each property before it is purchased, discovering property details, market conditions, target market parameters, financing options and so forth. Another person may be responsible for the follow-up with sellers, buyers, lenders, repair crews, cleaning crews, construction managers & workers, city officials and marketing campaigns. The next team member is responsible for the paperwork associated with each project or deal, completing everything from purchase contracts & addendums to work orders, repair requests, permits & applications and so forth. Another team member may be responsible for answering and returning phone calls, arranging contractor bids, setting appointments and showing property, tracking down owners of vacant property and many other tasks. So being involved in real estate investing can simply be a question of time, effort and energy spent in a good real estate deal.

Shadow an experienced investor
One significant aspect of investing is meeting with buyers, sellers and investors. These meetings and contacts are best done in teams (groups of at least 2 people). Our business includes knocking on the doors of homeowners in many neighborhoods of our cities. Often we stop to visit with For Sale By Owner (FSBO) sellers as we drive by their homes. This can pose a potential safety issue but going in teams increases the safety of our partners. It also creates an opportunity for a novice investor to shadow an experienced investor and learn how to talk to and negotiate with sellers, buyers and investors. It also allows the investing team to leverage the use of their experience to contact more people and increase the opportunities for investing.

Apprentice with an Experienced Investor
Working directly with an experienced investor allows you to see the details of getting an investment deal done. By helping and creating the marketing campaigns, advertising and flyers there is an opportunity to understand how to be successful in finding property and selling projects. There is also an opportunity to help with the business promotion to find additional investors and capital for the group. This allows you to learn the less glamorous but essential side of investing and it leverages the experience of the investor to get more work done.

Partner with an Experienced Investor
Partnering is a step above assisting, shadowing and apprenticing because you become a significant part of the actual investment deals. As a partner you are significant in finding equity & capital for the deals. There is a responsibility to find referrals & leads of buyers, sellers and investors who are not yet associated with our group. As a partner you begin to receive part of the profits, equity and cash-flows of each project.

Good Credit and Work History
Many people have good credit and a solid work history but just haven’t been able to save enough money to invest in real estate. These people are a significant part of our long-term investment strategy. In our business model we buy property, increase its value and sell it for a profit; but if the property doesn’t sell we refinance it and hold it long term for all the benefits of real estate investing. But there is a limit to the number of loans any one investor can have so we are constantly looking for additional people who can refinance our investment properties for the long-term. As our equity partner they get a large percentage of the profit and generally have no additional obligation to the project. And there is no cash required from our equity partners.

Lines of Credit
These investors have a different role in our system. Unlike the previous investors who refinance for the long-term, these investors use their money for the up front and short-term aspects of the project. This includes the earnest money deposit, inspections & fees, applications & permits, fix-up & repair, upgrades & construction, buying notes & loans, etc. These monies are used short-term and are repaid upon the sale or refinance of the property. Most people who have good credit and a strong job history can qualify for unsecured lines of credit, credit cards, HELOC (Home Equity Line of Credit), BLOC (Business Line of Credit), SBA Loans, etc. There are a lot of funding options even if your personal savings account is small.

Use OPM (Other People’s Money)
There are many individuals out there who have created money to invest, either through personal savings, intelligent investing, retirement accounts, etc. Many of these people want to be able to invest their hard earned money in safe and secure investments. Because you may know some of these individuals you can bring them to our group. We gain access to their funds and they get fabulous returns on their money (usually doubling their investments every 3-5 years) and you get a portion of the profits from the deals.

Seller Financing
Seller financing can allow for the purchase of property with little or no money out of pocket. Once properly understood and utilized, the investor understands that seller financing is actually better for the seller than the buyer but it does allow the investor access to the property. While the applications of seller financing are virtually infinite, the point is that there is the ability to invest in real estate without money from your own pocket.

This is just a brief summary of a few options available to someone who has the interest and desire to invest in real estate but may not have the funds currently available to invest with. We’re looking for people who want to be involved with the amazing industry of real estate investing. If you’re interested and would like to get started investing please contact Khayyam Jones at (801) 787-7797 or email to Khayyam@KhayyamJones.com and we’ll contact you shortly.

There are several sources for finding foreclosure homes. But to be more accurate, the foreclosure homes are the ones that are actually at the auction. Those auction notices are published daily in your local newspapers.

Finding the properties before they go to auction, while in pre-foreclosure, you will probably want to talk to your local Real Estate Investment Association (or club). They are probably already tracking most of the Notice of Defaults already but can show you where to look yourself. Usually a title/escrow company will email that list weekly. You can also check with you local county land records (usually online) daily.

After the foreclosure sale you will be looking for bank REOs (Real Estate Owned). These are usually on the market 2-6 months after the auction. They have to get appraisals or BPO’s (Broker Price Opinions) to estimate market value as well as other paperwork for the specific institution before they get listed and sold to the general public. These are found through a few local realtors who get the bulk of these listings and you can find them online through your local MLS, Realtor.com or most of your local agents will have some link to local housing information searches. (If you go this route I would recommend finding the main agents and contacting them directly…you’ll get faster information and less red tape since they make more commissions if you buy directly through them.)

Each stage of the process has it’s pros and cons…

Pre-foreclosurePros: You get a chance to work directly with the owner, the banks have some flexibility on price (for a short sale), great discounts on junior liens, more options and terms to negotiate.
Cons: Not all homeowners are willing to work with you (in a state of denial), not all lien holders feel the need to negotiate, usually need cash or access to quick money, usually requires educating the sellers.

Foreclosure (auctions)Pros: opening bid is usually at the amount of the first lein only, (right now) few bidders & lots of property, no negotiations.
Cons: requires cash, no guarantees (it only takes on idiot to bid up the price), no inspection period.

REOsPros: regular purchase process with loan qualifying time and inspection periods, full representation.
Cons: more competition from investors, less flexibility from banks, subject to rules of traditional lending.

Keep in mind that all three options have opportunities for fabulous deals. It’s up to you to pick an option that fits your style for investing.

Additional websites:
RealtyTrac.com
Foreclosure.com
ForeclosureFreeSearch.com
Foreclosure.net