Short that Sale

Short sales are all the rage right now. It seems like every week I get a new email from someone advertising their Short Sale package. Are you getting the same emails I am? Well, there is a good reason for that. Simply, short sales are hot.
When the foreclosure rate is high short sales are a great option in your RE investing.
There are three basic strategies on how to make money in the short sale world.
1- Put the property under contract, get the short sale accepted and then assign the contract out to a third party for closing.
2- Get the short sale approved then close on the house, fix it up, turn around and sell on the market.
3- Get the short sale approved, have a third buyer ready to sell to(usually another investor for a great price), close with hard money, then turn around as sell to the third party.

One thing you need to understand as a new short sale investor, these take time. Anywhere from 1-5 months depending on the bank and how motivated they are. Once you get a good number of short sales going then you can hope to close a few a month but it is not a matter of fast profit in most cases.
Also, there is a lot of work involved. Both form you and the sellers. Make this clear up front.
I hosted a great teleconference with David "The Diamond" Oswald last week. Is a a top expert in the field of Short Sales and I highly recommend getting on his free newsletter. http://www.davidoswaldonline.com/

Happy investing.

The Deed is Done!

Well, this morning President Bush signed the Housing Rescue Bill.
This from the AP-

"The measure, regarded as the most significant housing legislation in decades, lets homeowners who cannot afford their payments refinance into more affordable government-backed loans rather than losing their homes.

It offers a temporary financial lifeline to troubled mortgage companies Fannie Mae and Freddie Mac and tightens controls over the two government-sponsored businesses.

It aims to spare an estimated 400,000 debt-strapped homeowners, many of whom owe more their houses are worth, from foreclosure by allowing them to get more affordable mortgages backed by the Federal Housing Administration.

The FHA could insure $300 billion in such mortgages, which would be available to homeowners who showed they could afford a new loan.

Banks would first have to agree to take a large loss on the existing loans in exchange for avoiding an often-costly foreclosure.

The plan also is designed to relieve a broader credit crunch that has taken hold because of rising defaults and falling home values. To free up safer and more affordable mortgage credit, the bill permanently would increase to $625,000 the size of home loans that Fannie Mae and Freddie Mac can buy and the FHA can insure. They also could buy and back mortgages 15 percent higher than the median home price in certain areas."

Here's the biggest challenge in my book. This bill is nothing more than a bail out for a majority of these people who bought too big of a house or a house that they had no right to get into in the first place. Someone who got a 100% or higher LTV mortgage on a Neg AM loan and now can't afford the adjustable or, surprise, the house has gone down in value from the 110% LTV loan they got and now they want my tax dollars to bail them out? That should be called a seminar they took, not a slap on the wrist and we'll take care of the bill for them.

Then there' s the banks who lent out these crazy loans to people they knew could not afford them. I am all for companies making a profit as long as it is within a little thing called integrity. They did this out of greed.

The only silver lining is the amount of people this won't help and that the economy still needs creative real estate investors. There are many people this bill will not help that you can when using creative strategies. Get the education you need to do so. Start dabbling. The one thing this Bill, and others that will come, I'm sure, will guarantee is this is not the last change we will see. The time is now to get in the game.

Housing Prices Drop Again

Not a good month in May for houses. Prices dropped the steepest rate ever, according to the
S&P/ Case- Shiller 20 city index.
It was a drop of 15.8% compared to a year ago.
the index has only been around since 2000, but that's still a pretty good decline.

No city in the Case-Shiller 20-city index saw price gains in May, the second straight month that's happened. The monthly indices have not recorded an overall home price increase in any month since August 2006.

Nine cities that had record declines in May were: Las Vegas, Miami, Phoenix, Los Angeles, San Diego, San Francisco, Seattle, Wash., Portland, Ore., and Washington, D.C.

Las Vegas recorded the worst drop, with prices plunging 28.4 percent in the month. Miami came in a close second, with prices down 28.3 percent.

Can you believe that there might be a bright spot in the report though? 7 Cities had smaller then usual declnes — Tampa, Fla., Boston, Detroit, Minneapolis, New York, Dallas and Atlanta

Charlotte, N.C., posted the smallest drop at 0.2 percent. Until April, the North Carolina city had been the last city still showing price gains.

Want to know the top 10 best cities to buy in?

10. Atlanta, GA

9. Jacksonville, FL

8. San Francisco, CA

7. Charlotte, NC

6. Dallas, TX

5. San Antonio, TX

4. Philadelphia, PA

3. St. Louis, MO

2. Austin, TX

1. Houston, TX

According to Forbes Magazine, these cities are still doing well in both median home price and the local economy.

New RE numbers don't look good.

Have you seen whats going on in the market lately?
30 year mortgages hitting their highest level in a year, therefore pushing down the applications coming in, Fannie Mae and Freddie Mac issue, Indymac being taken over by the Feds and the housing market slumping more than expected.

When will it all work itself out? Dunno! Are you taking advantage of the opportunities? Last week I saw a house in Irvine California where the value was 1.1 million and it was being sold by the bank for 450K. That's the type of stuff going on out there.

The true bad news, not what the media is telling you, is that it looks like the "Bailout Bill" is going to get passed and signed by the President. At first he said he planned on vetoing it but now, under political pressure, he has said he will sign it. This means, among other things, that responsible home owners and tax payers will be paying the bill for those who got into mortgages they should have never gotten into. So the lesson learned is no lesson at all: "The government will always be there to bail us out." What type of example are we setting for our young people? Don't worry about your actions, if you buy something you can't afford, or lie on your mortgage application in order to get into a home and ten you find yourself in foreclosure, the Government will come in and take care of it. I think we should all be careful how much we really want the government involved. Talk about your slippery slope. Isn't this one of the reasons we separated ourself from England?

Any who: guess I showed my cards there. One of the sad things I see is people being afraid to get in the RE market because of the media. However, if you have the ability to learn, you have the ability to make money in this market. Get educated. Get involved.
The opportunity that is available right now will never happen again! Think I am crazy, look how they Fed's have already changed mortgage rules, do you really think it will stop there?