Spouse Objections to Rehabbing Real Estate
I’ve run across a lot of folks who tell me they’d love to do what I do, but their wife is just not comfortable with it. That’s a powerful objection, and sometimes it’s one that cannot be overcome. Most times, I think it can be, if you really want to. All too often, I get the impression the potential investor doesn’t want to jump into rehab real estate bad enough to work through the spouses objections. It’s the old “it’s easier NOT to” mentality!
The issue is usually not that your spouse doesn’t want the financial rewards that accompany the real estate rehab business. The reasons spouses object is usually good ol’ fear. For example:
fear of the unforeseen
fear of financial loss
fear that you don’t yet know what you’re doing (my favorite!)
The latter two are the big leaders. These fears may come from something they’ve heard, or they may be rooted in them not really understanding the transaction or what you’re trying to accomplish.
For my wife, her fears were that something would come up that I hadn’t thought of, or that a house may sit empty for several months thus depleting the bank account.
How to deal with the fears of your spouse regarding rehab real estate
Sit down and discuss their fears. Find out what they really are. You always want to deal with a known entity.
Be sure your spouse understands the importance of rehab real estate in your long term financial goals, and how it fits into your family’s security.
Always encourage your spouse to ask questions!
If your spouse expresses general fear of the whole thing, that may be because of a lack of understanding of the process or they are very intimidated by it.
Encourage questions!
Explain how the transactions will work
Explain how you are minimizing the risk to your family.
Yes, the numbers might be big, but if you aren’t putting a lot of your own money in it, then your risk of loss is minimal.
Go over the worst case scenarios. Explain that worst case, the property could be quickly sold for SOME profit.
Reveal to your spouse the folks you have working with you, such as your mortgage broker, your wholesaler (flipper), appraiser, and anyone else you’ve identified up to that point.
My wife was very distrustful of these folks in the beginning. I had to explain and show her that these folks had EVERYTHING to gain by my first deals going very well, if they wanted to continue making money with me.
If the fear seems to be of the unforeseen
Explain that while this seems complicated, you’ve done your homework and you’ve learned about all you can learn without actually doing a deal for experience. (You reach a point where this is true!)
Explain that you won’t own the property a minute without enough insurance to cover anything that could happen.
If the fear is financial loss
Depending on your personal financial situation, you should focus your spouse on how real estate can and does improve the lives of investors.
If you’ve already identified a property, reveal your worksheet and how much you stand to make off that property.
Agree with your spouse NOT to take on too much risk. Set your boundaries together. I assure you that you’ll easily revisit these the first time you bring home a large check.
Fear that you don’t have the knowledge
Be sure you are well studied! Remember, knowledge comes before the money! Spend the money on a good course, or book. Don’t rely on just one. Get several author’s take on the subject. There are inexpensive ways to do this!
Explain that you have studied this thoroughly. Heck, you’ve got a head full of knowledge that needs to be put into action in order to move forward.
Agree with your spouse. That’s why you are tapping into the knowledge of those real estate professionals around you! Explain who’s on your team, and what they have to gain from you. Remind your spouse that you are tapping into the knowledge of those around you, those that know your area very well.
When your spouse comes around and is resigned that you are going to do this, they may:
Sign on and dig in beside you for the deal and what follows (throw total support behind you).
Flatly say, they don’t agree, but if you must…
Something in between, like “Honey, you do whatever you think is best.”
This last possibility is what I predict will happen to most. This allows your spouse to give you the room you need, but at the same time not completely agree. That’s where my wife went. It was a safe position for her. And, it’s a safe position for you! You’ve got the go-ahead, so go ahead!
I was in that position myself. If was a good feeling to watch her fears fall away as I complete my first couple of projects. Her eyes got nice and big when I refinanced my first two properties at the same time and brought home more money in one day than I’d ever held in my hands before. I also watched her understand the benefits more completely while sitting in my CPA’s office and having him say to her “These properties are saving you big time on your taxes.” I dare not say, I told her so, but I told her so
Sure, there are challenges, but the paydays are great.
So, over time, my bride is my full partner taking on whole aspects of the business freeing me up to do the parts I do best.
Spouse objections can be show-stoppers, but these suggestions will hopefully help you deal carefully with them. It’s not enough to merely brush them aside and charge ahead. I recommend a loving, cautious approach because in good time and bad, your spouse is your greatest ally. Keep them close!
Showing posts with label sub prime. Show all posts
Showing posts with label sub prime. Show all posts
Friday, December 28, 2007
Friday, November 23, 2007
Black Friday Foreclosure Shopping
The foreclosure market continues to boom as no relief appears in sight for stretched subprime mortgage holders. As the economy shows more signs of a slowdown, this trend is likely to continue.
Although the real estate industry would prefer otherwise, foreclosures continue to make headlines. The latest data showed superficial relief, with September foreclosures down 8% from some 243,000 in August, but still more than double last year -- and still with more to come.
It may be a harsh analogy, but I often think of foreclosure buyers as the forest-floor ants consuming the dead wood to clean the forest.
That means three things. First, as I see it, the sooner we get through this credit mess, the better. Second, the faster properties get through the foreclosure process and find buyers, the sooner we'll get through the mess. So third, foreclosure buyers clean out the dead wood (I like) and get great bargains in the process (I also like).
I can save how much?
My recent column broadly covers the discount you can expect from market value if you buy a foreclosure. It varies by region, but using information published by real estate portal and foreclosure specialists RealtyTrac, I saw discounts ranging from 15% in Hawaii to 40% in Alabama, with 20% and 25% being a rule of thumb.
Not bad. So then the next question, incidentally raised by several readers, is "how do I find those bargains in my area?"
Finding the for sale signs
To locate specific foreclosures in your area, RealtyTrac is a good place to start. Visit the nations #1 site for foreclosures and find homes for half the price.
The site lists foreclosures by ZIP code and foreclosure stage, ranging from preforeclosure property to bank-owned real estate. It's a broad and fairly deep picture of foreclosure availability in your area.
Some have found RealtyTrac less than precise, as the task of keeping up with foreclosure listing activity across the company is large, to say the least. And to get specific information on the property, RealtyTrac requires a $49.95/month subscription after a seven-day free trial.
But realize that RealtyTrac sits behind other real estate sites, so sooner or later you'll probably run into RealtyTrac. If you're serious about foreclosure shopping, you might want to sign up.
Combining sources
If you aren't ready to make the financial commitment or "come out of the closet" as a registered foreclosure buyer, there are several other paths which work surprisingly well:
Bank sales. To their chagrin, banks and financial institutions are going into the real estate business in a big way. Too bad for them, but you can find a lot of bargains on their Web sites: Bank of America, Countrywide and U. S. Bank have good listings, to name a few. Countrywide, for example, has 300 listings in California alone priced under $170,000.
Agency sales. Banks sell their "REO" (Real Estate Owned) but often hire agencies to do the job. Such agencies include Keystone Asset Management, Lenders Asset Management Corporation and HomeEq Servicing. Some of these agencies may operate bank sites, so you may see a similarity.
Government and government-backed lender sales. Government agencies ranging from FHA and VA to HUD and the Department of Justice sell real estate, visible through a single portal. And government-backed Fannie Mae and Freddie Mac also operate sites. The variety of properties available is, shall we say, wide, but Fannie Mae in particular lists a lot of solid mainstream real estate values.
Auctions and auction houses. Local and regional auctions are becoming bigger as banks and others pile up inventory. A real estate auction specialist will announce an auction of dozens, maybe hundreds of properties in a large region or metro area. Auctioneers include Real Estate Disposal Corporation (REDC) and Williams & Williams. Experience helps in playing this game, although the auctioneer sites walk you through the process.
Local real estate specialists. A lot of agents know about action in a particular area and can hook you up with the sellers. Good agents have their eyes and ears to the ground at all times, and get tips and hear about stuff coming on the market. You can often Google "foreclosures (area)" to get local listings.
Don't forget: reward comes with risk
Remember that, while foreclosure properties often sell at a healthy discount, you may run into poorly maintained properties. There may be other foreclosures in the immediate area, hurting the quality and value of your investment. Double check other adjacent listings and visit the area if you can.
Remember: Good value investors buy assets at the right time in the right place at the right price. Real estate is no different.
Although the real estate industry would prefer otherwise, foreclosures continue to make headlines. The latest data showed superficial relief, with September foreclosures down 8% from some 243,000 in August, but still more than double last year -- and still with more to come.
It may be a harsh analogy, but I often think of foreclosure buyers as the forest-floor ants consuming the dead wood to clean the forest.
That means three things. First, as I see it, the sooner we get through this credit mess, the better. Second, the faster properties get through the foreclosure process and find buyers, the sooner we'll get through the mess. So third, foreclosure buyers clean out the dead wood (I like) and get great bargains in the process (I also like).
I can save how much?
My recent column broadly covers the discount you can expect from market value if you buy a foreclosure. It varies by region, but using information published by real estate portal and foreclosure specialists RealtyTrac, I saw discounts ranging from 15% in Hawaii to 40% in Alabama, with 20% and 25% being a rule of thumb.
Not bad. So then the next question, incidentally raised by several readers, is "how do I find those bargains in my area?"
Finding the for sale signs
To locate specific foreclosures in your area, RealtyTrac is a good place to start. Visit the nations #1 site for foreclosures and find homes for half the price.
The site lists foreclosures by ZIP code and foreclosure stage, ranging from preforeclosure property to bank-owned real estate. It's a broad and fairly deep picture of foreclosure availability in your area.Some have found RealtyTrac less than precise, as the task of keeping up with foreclosure listing activity across the company is large, to say the least. And to get specific information on the property, RealtyTrac requires a $49.95/month subscription after a seven-day free trial.
But realize that RealtyTrac sits behind other real estate sites, so sooner or later you'll probably run into RealtyTrac. If you're serious about foreclosure shopping, you might want to sign up.
Combining sources
If you aren't ready to make the financial commitment or "come out of the closet" as a registered foreclosure buyer, there are several other paths which work surprisingly well:
Bank sales. To their chagrin, banks and financial institutions are going into the real estate business in a big way. Too bad for them, but you can find a lot of bargains on their Web sites: Bank of America, Countrywide and U. S. Bank have good listings, to name a few. Countrywide, for example, has 300 listings in California alone priced under $170,000.
Agency sales. Banks sell their "REO" (Real Estate Owned) but often hire agencies to do the job. Such agencies include Keystone Asset Management, Lenders Asset Management Corporation and HomeEq Servicing. Some of these agencies may operate bank sites, so you may see a similarity.
Government and government-backed lender sales. Government agencies ranging from FHA and VA to HUD and the Department of Justice sell real estate, visible through a single portal. And government-backed Fannie Mae and Freddie Mac also operate sites. The variety of properties available is, shall we say, wide, but Fannie Mae in particular lists a lot of solid mainstream real estate values.
Auctions and auction houses. Local and regional auctions are becoming bigger as banks and others pile up inventory. A real estate auction specialist will announce an auction of dozens, maybe hundreds of properties in a large region or metro area. Auctioneers include Real Estate Disposal Corporation (REDC) and Williams & Williams. Experience helps in playing this game, although the auctioneer sites walk you through the process.
Local real estate specialists. A lot of agents know about action in a particular area and can hook you up with the sellers. Good agents have their eyes and ears to the ground at all times, and get tips and hear about stuff coming on the market. You can often Google "foreclosures (area)" to get local listings.
Don't forget: reward comes with risk
Remember that, while foreclosure properties often sell at a healthy discount, you may run into poorly maintained properties. There may be other foreclosures in the immediate area, hurting the quality and value of your investment. Double check other adjacent listings and visit the area if you can.
Remember: Good value investors buy assets at the right time in the right place at the right price. Real estate is no different.
Wednesday, October 3, 2007
Where to find foreclosures?
There are a plethora of places to look when you want to find foreclosure properties. The key is finding them before someone else does. You can find foreclosure properties on the web, newspapers, lis pendens lists, seminars, direct mail, word of mouth, friends, real estate agents, real estate offices, and lending institutions just to name a few.
The internet is a good place to search for foreclosure properties. Several foreclosure listing companies actually search out notifications of default and sell a subscription to those who are willing to pay for this information. Just remember, this is the easiest way to find properties, so beware of competition. Also beware that some of these subscriptions are just a way to make money and provide little or outdated information on these foreclosure properties. If you decide to test one out, make sure they give you a free trial period so you can see how current the listings are.
Newspapers are another great way to find foreclosure properties. All states are required by law to post a public notice of auction in a newspaper for all foreclosure properties. You can look up these notices and send a letter to them, call them or stop by. Another option, you have as a creative investor, might be to place an ad in the newspaper yourself to attract those who are in foreclosure. Believe me, if you have a good ad, your phone will begin ringing off the hook. You see, sooner or later the homeowner finally realizes they cannot save their home. Then when time runs out, they have no choice but to call, and during this time they are very motivated.
Direct Mail is one of the best ways to find the "GOOD" foreclosure properties. This is because you can talk to a person who is still in the pre-foreclosure stage and negotiate a nice discount on the property. There will be fewer investors that even know about the property, however, there is more work involved these kind of foreclosure properties.
Real Estate Agents are a good way to find foreclosure properties. Normally, banks that end up with foreclosure properties will hire an agent to represent them. Banks are not in the foreclosure business, they are in the lending business, so they too are very motivated to sell. Agents have connections and can get a list of some "bank-owned" properties.
Word of mouth is a technique that all the good investors use. Let it be known to everyone you come in contact with that you are a real estate investor who specializes in foreclosure properties. You should make some business cards as well that say "I specialize in foreclosure properties" and hand them out to everyone you know. You will be amazed what this will do for you. You may get a call from your friend's, friend's, sister's, friend who needs help avoiding the public auction.
There are so many excellent ways to find foreclosure properties. In fact there are many more than what are listed here. The idea is that it's a numbers game. You've always got to be working to find more deals. Find out which methods of finding works for you and go with it.
The internet is a good place to search for foreclosure properties. Several foreclosure listing companies actually search out notifications of default and sell a subscription to those who are willing to pay for this information. Just remember, this is the easiest way to find properties, so beware of competition. Also beware that some of these subscriptions are just a way to make money and provide little or outdated information on these foreclosure properties. If you decide to test one out, make sure they give you a free trial period so you can see how current the listings are.
Newspapers are another great way to find foreclosure properties. All states are required by law to post a public notice of auction in a newspaper for all foreclosure properties. You can look up these notices and send a letter to them, call them or stop by. Another option, you have as a creative investor, might be to place an ad in the newspaper yourself to attract those who are in foreclosure. Believe me, if you have a good ad, your phone will begin ringing off the hook. You see, sooner or later the homeowner finally realizes they cannot save their home. Then when time runs out, they have no choice but to call, and during this time they are very motivated.
Direct Mail is one of the best ways to find the "GOOD" foreclosure properties. This is because you can talk to a person who is still in the pre-foreclosure stage and negotiate a nice discount on the property. There will be fewer investors that even know about the property, however, there is more work involved these kind of foreclosure properties.
Real Estate Agents are a good way to find foreclosure properties. Normally, banks that end up with foreclosure properties will hire an agent to represent them. Banks are not in the foreclosure business, they are in the lending business, so they too are very motivated to sell. Agents have connections and can get a list of some "bank-owned" properties.
Word of mouth is a technique that all the good investors use. Let it be known to everyone you come in contact with that you are a real estate investor who specializes in foreclosure properties. You should make some business cards as well that say "I specialize in foreclosure properties" and hand them out to everyone you know. You will be amazed what this will do for you. You may get a call from your friend's, friend's, sister's, friend who needs help avoiding the public auction.
There are so many excellent ways to find foreclosure properties. In fact there are many more than what are listed here. The idea is that it's a numbers game. You've always got to be working to find more deals. Find out which methods of finding works for you and go with it.
Thursday, September 20, 2007
Free Connecticut Foreclosure Auctions
Free Connecticut Foreclosure Auctions is serving New Haven County with listings of upcoming home and land foreclosure auctions.
In all foreclosure auctions, a notice must be published locally. Although your county clerk's office is a great real estate resource in identifying foreclosures, it can be very time consuming and not worth the headaches when this information is readily available here. Foreclosure Times.com offers the largest real estate database of foreclosure homes in the country, including Bank REO, Pre-Foreclosure, Government Foreclosures including the Federal Deposit Insurance Corporation (FDIC), HUD, Government Services Agency (GSA), and even the Internal Revenue Service plus bankruptcy and by owner properties.
BIDDING AT AN AUCTION:
If you think you want to purchase a foreclosure property, you must check the title, get a true value for the property if it is sold on the open market, and allow for sales costs, fix up cost etc., when deciding to bid.
If you win at auction, you do not become the owner of the property. You get a "Certificate of Purchase." This certificate entitles you to receive interest money, at the rate of the first mortgage. However, a Certificate of Purchase is subject to redemption by the owner or by junior creditors.
AFTER THE FORECLOSURE SALE
Once a Certificate of Purchase has been issued, you must then present cash or certified funds in the exact amount of your property bid. The Public Trustee will then obtain a redemption amount. If an owner wants to keep their property, they must pay the redemption amount in cash or certified funds to the Public Trustee. The present owner still owns the property until their redemption period ends. That period is normally 75 days (or six months for agricultural property), during which time they can pay off the Certificate of Purchase amount, plus interest and fees. In this case, no Public Trustee's Deed is issued.
During the owner's redemption period, any junior lienors, or creditors, with a recorded interest in the property can also file their "Notice of Intent to Redeem." The junior lienors who file these Intents have specific time periods (after the end of the owner's redemption period) in which they're allowed to redeem if the owner does not.
If no one redeems and all the redemption periods expire, the Certificate of Purchase holder (potentially you) can be issued a confirming Public Trustee's Deed. In this case, the title vests free and clear of all liens and encumbrances junior to the foreclosed lien except omitted parties, or parties that were not notified of the foreclosure but who have an interest in the property.
And the property belongs to you!
- BUYING FORECLOSURES
- HOW TO PURCHASE AT A FORECLOSURE SALE
- FIND PROPERTIES THAT WILL BE SOLD AT AUCTION:
In all foreclosure auctions, a notice must be published locally. Although your county clerk's office is a great real estate resource in identifying foreclosures, it can be very time consuming and not worth the headaches when this information is readily available here. Foreclosure Times.com offers the largest real estate database of foreclosure homes in the country, including Bank REO, Pre-Foreclosure, Government Foreclosures including the Federal Deposit Insurance Corporation (FDIC), HUD, Government Services Agency (GSA), and even the Internal Revenue Service plus bankruptcy and by owner properties.
BIDDING AT AN AUCTION:
If you think you want to purchase a foreclosure property, you must check the title, get a true value for the property if it is sold on the open market, and allow for sales costs, fix up cost etc., when deciding to bid.
If you win at auction, you do not become the owner of the property. You get a "Certificate of Purchase." This certificate entitles you to receive interest money, at the rate of the first mortgage. However, a Certificate of Purchase is subject to redemption by the owner or by junior creditors.
AFTER THE FORECLOSURE SALE
Once a Certificate of Purchase has been issued, you must then present cash or certified funds in the exact amount of your property bid. The Public Trustee will then obtain a redemption amount. If an owner wants to keep their property, they must pay the redemption amount in cash or certified funds to the Public Trustee. The present owner still owns the property until their redemption period ends. That period is normally 75 days (or six months for agricultural property), during which time they can pay off the Certificate of Purchase amount, plus interest and fees. In this case, no Public Trustee's Deed is issued.
During the owner's redemption period, any junior lienors, or creditors, with a recorded interest in the property can also file their "Notice of Intent to Redeem." The junior lienors who file these Intents have specific time periods (after the end of the owner's redemption period) in which they're allowed to redeem if the owner does not.
If no one redeems and all the redemption periods expire, the Certificate of Purchase holder (potentially you) can be issued a confirming Public Trustee's Deed. In this case, the title vests free and clear of all liens and encumbrances junior to the foreclosed lien except omitted parties, or parties that were not notified of the foreclosure but who have an interest in the property.
And the property belongs to you!
Friday, August 10, 2007
RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties
RealtyTrac publishes the largest and most comprehensive national database of foreclosure and bank-owned properties, with over 1 million properties from nearly 2,500 counties across the country, and is the foreclosure data provider to MSN Real Estate, Yahoo! Real Estate and The Wall Street Journal’s Real Estate Journal.
“Foreclosure activity subsided somewhat in June after hitting a 30-month high in May,” said James J. Saccacio, chief executive officer of RealtyTrac. “And the drop in activity was fairly broad, with 33 states reporting month-over-month decreases. Still, the foreclosure rates in most states remained substantially above last year’s levels.”
“Foreclosure activity subsided somewhat in June after hitting a 30-month high in May,” said James J. Saccacio, chief executive officer of RealtyTrac. “And the drop in activity was fairly broad, with 33 states reporting month-over-month decreases. Still, the foreclosure rates in most states remained substantially above last year’s levels.”
Foreclosure Filings Still Up 87 Percent From June 2006
Foreclosure Filings Still Up 87 Percent From June 2006
A total of 164,644 foreclosure filings - default notices, auction sale notices and bank repossessions - were reported in June, down 7 percent from the previous month but still up 87 percent from June 2006. The national foreclosure rate for June was one foreclosure filing for every 704 U.S. households. "Foreclosure activity subsided somewhat in June after hitting a 30-month high in May," said James J. Saccacio, chief executive officer of RealtyTrac. "And the drop in activity was fairly broad, with 33 states reporting month-over-month decreases. Still, the foreclosure rates in most states remained substantially above last year's levels."
A total of 164,644 foreclosure filings - default notices, auction sale notices and bank repossessions - were reported in June, down 7 percent from the previous month but still up 87 percent from June 2006. The national foreclosure rate for June was one foreclosure filing for every 704 U.S. households. "Foreclosure activity subsided somewhat in June after hitting a 30-month high in May," said James J. Saccacio, chief executive officer of RealtyTrac. "And the drop in activity was fairly broad, with 33 states reporting month-over-month decreases. Still, the foreclosure rates in most states remained substantially above last year's levels."
Subscribe to:
Posts (Atom)
