All Forum Posts by: Jason Barnett

Good advice from both of the other posters. Some other things to consider:

- A HELOC can be nice for covering SHORT TERM emergency repairs if you need that security. Don't get it if you are the type of person that racks up credit card debt.
- (If possible in your market) Try to buy a building where your total rents will be more than 133% of the PITI payments for the mortgage. This helps your debt / income ratio to purchase more properties and is generally a smart investing decision.
- At this point ARMs should be avoided at all costs.
- If you agree with me that interest rates are going to continue rising then you would be wise to leverage to the hilt now by using the highest LTV FIXED RATE loans you can find and re-investing your money into more investments. The junk rates of today are equal to (or less than) the prime rates of tomorrow!

You could go stated income fith a great FICO. It's just that your rates will be higher.

Bottom line: anyone, with any amount of cash and any credit score can get into this game... but the question is how much interest are you going to have to pay for the funds and how hard is it going to be to find the right lender / program?

As a guarantor of a loan the lender is going to hold him 100% liable for the debt. This is not a pipe dream... he can get into REI with no cash, but he will still have risk (e.g. if the partner doesn't follow through with the project and he gets stuck with the loan).

The bank is just trying to deal with principals rather than bird dogs such as yourself. If you have the funds available then it is pretty easy to just purchase the REO and then resell it to another buyer via a new HUD-1. This is why you occassionally see messages on this board stating "need to borrow $100K by this Friday" or "need $100K for short term loan".

Banks say they do this because they don't want to see inflated prices from speculative investing. This is partially true; they also do this because they want to get as much for themselves as they can!

The biggest problem here is for realtors (and I assume you are not one). Realtors are considered "experts" and they shouldn't be trying to negotiate preforeclosures because that might end up with you in court.

The truth is that investors can really make people happy by solving their problems while still putting a little coin in the piggy bank.

Remember: the purpose of bankruptcy and foreclosure are to minimize losses to lenders while redistributing assets to make them productive again. In a preforeclosure sale you are simply accelerating this process.

I agree with wesley. Without knowing more about the situation... it is entirely possible that this squatter has been at the property so long that they can legally lay claim to it without paying you a dime. That's definitely a risk!

If this is the first property that you are going after then I would suggest that you pass on it. Wait until you have a little experience with some easier properties first.

I think you have to watch out for mortgage fraud from some unscrupulous sellers trying to "refund cash" to potential buyers. Definitely not something that a young mortgage broker wants on their resume.

Are we talking pre-foreclosure or post-foreclosure?

After the foreclosure is finalized the title will be clean with the exception of IRS tax liens and property tax liens. Preforeclosure you will need to contact any and all lienholders and arrange for some sort of settlement.

That's a good approach... pretty much what I was going to suggest.
It seems like people respond best to branded messages that are sent several times. Once a month should be enough. They won't contact you until the reality finally hits them, but it's good to be the first one that they think about.
You absolutely have the right idea. The best way to go about this is to realize that you are here to solve a problem (their inability to pay the mortgage). Education and solid advice go a long way to developing rapport with these people.
I have never tried this. Quite often the owner is no longer living at the address (if they are alive at all). Usually sending a plain letter with "return service requested" is sufficient. Of course if you try this I would love to hear the results!
Never tried it. I would be interested in the results for this as well! I know the value of good hard statistics, but I just haven't put forth the resources to actually do this.
Never tried Shark Bait. I'm more of a nuts and bolts guy and I've rolled my own. Takes more time to set it up, but ultimately is more rewarding with the control that I have over the sales process.
Yes! :lol: The problem with this method though is that it's more like a hammer when all you really want is a nice sharp knife. I get a lot of calls for properties in areas where I don't really want to buy and these calls are basically just a waste of my time. Then again I'm looking at it from a rehabbing perspective and there are only certain neighborhoods where it is easy for me to market the property once I'm done with the rehab. If you are looking to strictly wholesale / bird dog then by all means have at it!

I agree that your brother's "style" is lacking. However, I would differ with you on one thing. You don't *have* to post the eviction notice on the first day the rent is late. However, you *do* have to start trying to collect the rent. I know some landlords that charge late fees and they are quite happy to collect those late fees over and over so long as they eventually get the rent. It's more hassle, but in a soft market it might make sense (because it might be hard to find another tenant).

I am also a section 8 landlord and I can share some tips with you. Actually you might want to search these forums for "section 8" to read about my own personal horror story. :shock:

Maximum rent is pretty much dictated by HUD housing rates. I don't have the link handy, but search their website and you will know pretty much what you can expect (it's mainly dependent on area and # of bedrooms).

Another thing that Zeke covered... some tenants have more of their rent paid by section 8 than others. But what Zeke might not have mentioned is that if the tenant income is low enough then section 8 will pay 100% of the rent to you. So my suggestion is to focus on finding tenants whose vouchers will cover 100% of your rent.

Also regarding character of the tenants: it's a mixed bag of good and bad. I also was told that section 8 screened tenants... so explain to me how a section 8 woman came to me with a rap sheet a mile long!?! I actually gave her a shot and she's been a model citizen except she doesn't work and thus doesn't pay me her portion of the rent.

:violin: