All Forum Posts by: Simon Campbell

First, once a redemption period passes, you still have to wait until the bank lists the property with a real estate agent. This can take months even years. Banks do not deal with buyers directly.

If you have the cash, why not contact the original property owner and have them redeem the home and then sell it to you. Offer them $5k for their effort. It is more than they will ever see if they just let the redemption period pass. 

The issue here is that many investors, wholesalers and others have approached owners in foreclosure under the guise of helping them financially, only to take advantage of them and get their house pennies on the dollar. The laws have been enacted to protect homeowners.

Additionally, wholesaling foreclosure properties are very difficult. You only have a limited amount of time to complete the transaction until the property goes up for auction. Every day additional fees, interest and penalties are added on making finding an end buyer more of a challenge. You also will have trouble doing a double-close or a contract assignment when a bank is involved. Plus, short sales can take up to 6 months and most investors do not want to wait that long. 

Without seeing the deed, this title problem does not seem detrimental to the main property. I have considerable experience in this type of problem. 

First, can the property you are purchasing stand on its own without the missing lot? In other words, does it have legal road access w/o crossing that lot? Is the existing lot large enough to satisfy set back requirements w/o the missing lot? Does the tax id number include the missing lot in the legal description?

If you can answer no to each of these questions, then you should not have a legal problem to sell the lot. The problem lies in the transfer of the mysterious missing lot. That is your title problem, not the property that can transfer. 

Second, would you be able to sell the house property with title insurance as long as you do not "sell" the missing lot? Check with a title company about this. 

Many have found that yellow letters are quite effective. This puts the ball in their court, however. But if you set up a website that has a "Please contact me" or an email address to get a free something, you can get contact information that way.

If you qualify, VA offers loans with no down payment or mortgage insurance which can accelerate your return on your investment. There is never a pre-payment penalty and VA loans are assumable.

But, when it comes to investing in real estate and VA loans there is a problem. VA does not write loans for investment properties. You must live on the property. How can you get around this? VA will finance properties with up to 4 residential units and 1 commercial unit. This means that you could buy a 4-plex, live in one unit, rent out the other 3 AND get some awesome funding.

How do you become a property investor when you don't have savings set aside?

Real estate investing without cash means that you need to take it slow and steady to build equity. The worst thing you can do is overextend yourself and trash your credit even further. Here is what I would recommend:

Find a house that you can either sublet, rent to own or by on a land contract. Now you have to make sure that you find a good quality house with either two or three bedrooms. Why? You want to buy a house that others would want to live in and one that is not going to turn into a money pit.

If you want to earn a little extra money each month, find a place to rent where the rent is below market and then make sure that the rental contract will allow you to sublet. This means that you can turn around and re-rent it out for more. Finding cheap rent helps. For example, you rent a house for $600. You then find someone to rent it for $675. Every month you make $75. Of course, if they do not pay the rent then you have to cough up the $600. So find a good tenant. Now, do not spend this money. Save it to invest again.

Another option is to rent to own. For a time you pay rent and an additional rent premium which is used as the down payment on the home. After 2 to 5 years, you then use this equity to go get a bank loan to purchase the home.

The other method is to buy on land contract. Because mortgage rates are so low, this is not always the cheaper option but it keeps you from going to get a bank loan. In a land contract, the owner plays the role of the bank but he will charge you a rate higher than the bank, especially if your credit is poor. You put a little money down, let’s say $1,000 - $5,000, then you make monthly payments to the property owner for generally a period of 3 to 5 years. At the end of the payment period, you have to pay the remaining amount in one lump sum. That is when you get a loan. By then, you have equity and hopefully a higher credit rating. Meanwhile, you rent out the property for at least what you are paying. 

Would you be in a position to buy two or more of his properties at a time? If so, he may be willing to make a better deal. Just make sure that you do you due diligence and make sure of the market rent amount and/or check the length and terms of the current lease agreement. 

College town rentals can be very profitable - if you know what you are doing. You will want to talk to either your real estate agent or an experienced property management company to get market based vacancy rates for college student rentals. Also find out what the market rent is for a student rental. Often these are rented by the room with individual leases for each occupant which cuts down on the risk.

Proformas are nice reading, but never ever base a purchase price on them. Always verify actual expenses. Get copies of the lease agreements - even if you have to sign a non-disclosure agreement. Make sure that the property can cash flow using the 50% rule.

Never, ever, tell them that you know they are having financial problems or are approaching foreclosure. They know it. They are embarrassed by it and having a stranger say that they know it to only adds to their pain. Approach it as a business transaction, not "I'm here to do you a favor/help you out."