Presented By:

Ken R Fisher & Associates, Inc.

KenFisherRealtors.com

Real Estate: The Business

Lead Generators

Foreclosures Repossessions

Sellers Real Estate

Buyers Real Estate

Mortgages

Appraisals

Inspections

Concierge

Contact Us

Foreclosures and Repossessions

Everyone wants to get in on the fantastic foreclosure and repossession business.  FLIP, FLAP AND FLOP!  That’s the problem!  ‘Everyone’ causes the prices to rise, considerably, and the deals to fall, considerably!  Foreclosures abound with recently purchased overpriced new construction.  Consumers buy with no money down and the closing costs paid (all of these fees and costs have been added into the price of the house often without disclosure).  Appreciation starts to occur somewhere about the 5^th to the 8th year.  The owner loses the property in about the 3^rd year.  Liens against the property include the 100% mortgage and the added on closing costs from the first mortgage plus unpaid interest and attorneys fees.  Unscrupulous lenders may have also made Second Mortgages on these properties.  Now what?  Potential investors seek out these properties to ‘make a killing in real estate’.  Guess who frequently 'gets killed’.  And our good old friend, the Television always tells us how best to literally 'screw' the public in general.

There are deals out there.  It takes an experienced real estate agent and a potential investor who can move fast to secure that deal.  It takes a potential investor who knows what it will take to honestly get the property ready to sell and to add in the selling costs.  It takes an experienced real estate to market these types of properties to secure quick sales because holding a property can be a disaster to the investor’s bottom line.

A major foreclosure and repossession business problem is the potential investor bent on defrauding a potential buyer for a fast buck.  The potential investor hires the cheapest labor on the earth and installs the cheapest improvements.  A dumb founded buyer walks in and buys a disaster waiting to happen.  And then, it does!  Within a year, the vinyl siding falls off the house exposing rotted and defective siding, the vinyl soffits fall off exposing rotted soffits and rafter ends,  the vinyl flooring curls up, the cheap carpeting rolls up exposing patched and rotted floors, the roof leaks indicating poor installation, the poorly installed water pipes break, the new 'used' or knockoff furnace fails and on and on and on.  The buyer failed to get a home inspection because they were 'advised' otherwise.  The buyer doesn’t know enough to get a good attorney and go after the seller.  The buyer loses the house, another potential investor buys it and starts the process all over again.

The Number One Reason many Investors lose everything is the “buy low sell high” mentality coupled with a lack of specific market and marketing knowledge ... and, in numerous cases, working with a greedy unknowledgeable real estate agent. 

There is a better way and that better way is education.  We recommend working with a long-term real estate broker who knows the market well and can provide market research data in a timely manner.  Obviously, this can be a commission broker or a consultant type broker.

You can buy a property for what seems to be a great “low” price, improve it to make it marketable or to add it to your stable of rental properties, and then sell it at a later date for a profit.  This is true success!

Or, you can quite easily find out in the end that you have over-improved the property beyond its’ marketability' in its’ given location and will soon have the repo guy knocking on your door.  This happens more often that one would imagine.   Most investment books and TV shows don’t discuss this possibility at all (keep in mind that they are selling books and tapes and TV shows, not real estate!).

It happens for many reasons other than being over-improved.  Consider high crime areas where people steal things from your property faster than you can replace them (air conditioning units, appliances, furnaces).  Consider areas that are truly declining in the marketplace.  Consider areas that are increasing in population density because landlords are, with or without their knowledge, renting to multiple family members.  Consider areas where every third property is boarded up.  These are not investment areas unless you are seeking tax write-offs on your losses.

It happens for another reason that appears to be somewhat worthy of note, and it happens more often than not.  You decide you have the time and the money and the credit (often an equity loan on your own home) and the interest to get into investment properties, so you just jump in without really giving a particular property much thought.  You make a really big mistake by selecting a greedy agent.  The clock starts ticking immediately (and your bank account turns anorexic rather quickly)...  sorry, you screwed up and it really is your fault! 

Credit Score Scams are on the rise with unsuspecting novice investors.  People with good credit, rushing to get rich in real estate, instead, fall for bad deals with consumer-preying investors.  Sometimes, unscrupulous real estate agents, mortgage representatives, appraisers and title company personnel band together to bilk the unsuspecting investor ... they disappear when the law comes knocking!  Whoosh, there went your hard earned money!  Whoops, it was YOUR fault!

The average victim of a credit score scam is an inexperienced investor with good credit who is approached by an individual looking to use their credit to fund a real estate deal.  Although they may promise you a big payoff, what usually happens is a foreclosure situation and ruined credit report in the end.  The first-time investors should never work with anyone who seeks access to your credit report or bank account.  Did you ever hear of a pigeon drop or a gypsy scheme?  Do you live in a total fog!  Perhaps, you deserve what you get !!