Foreclosure Investing

My First Hockey Post of the Season

2008-04-23T08:29:00.001-07:00

Hopefully not my last. I know it's also nothing about Short Sales.

Why the hockey post today? Just because the San Jose Sharks beat the Calgary Flames in Game 7 and move on towards the greatest trophy in all sports, The Stanley Cup!

That's why. (That and I have a Hockey Hangover, eh?)

For you non Hockey speaking readers here's what the cup looks like:

A quick Hockey Primer for you:

30 Teams compete during the season to be one of the 16 that enter the playoffs.
8 teams in the East, 8 teams in the West.
Teams play the best of 7 in a series. No Ties.
There are 4 Series or rounds in the playoffs;
1. Conference Quarterfinals
2. Conference Semifinals
3. Conference Finals
4. Stanley Cup Finals
Lose 4 in a series and you're "playing golf".
Win 16 Games in the Playoffs and you "Hoist the Cup!"

The Conference Quarterfinals ended last night. We're now down to 8 teams.

In the East

The Montreal Canadians will play the Philadelphia Flyers

and the Pittsburgh Penguins will play the New York Rangers

In the West

the Detroit Red Wings will play the Colorado Avalanche

and the San Jose Sharks will play the Dallas Stars

If you are graphical in nature here's a quick little Bracket I made for my computer desktop.

Ok, that's enough Hockey for now. I have to get back to work.

Go Sharks!

Suburban Renewal In The News

2008-04-04T21:38:00.001-07:00

I was interviewed by the San Jose Mercury News the other day. I had a couple of great in depth conversations with Sue McAllister, the real estate reporter for the paper.

You can read the entire article HERE, I cut the portion that directly involved S-R below.

Part of the problem is that lenders are overwhelmed by managing so many short sales nationwide, said Mike Mueller, co-founder of Suburban Renewal, a Concord short-sale negotiator. Another problem is that many agents handling such sales lack experience at it.

"Most don't know how to put together a compelling package and push the lenders' buttons," to get a swift sale, Mueller said.

Despite recent changes in federal laws, some sellers owe tax on the portion of their debt "forgiven" by the lender. But whether or not the lender reports the forgiven debt is negotiable, Mueller said.

One Bay Area homeowner in the midst of short-selling her home said so far, she's in favor of working with an intermediary company. The woman, an information technology consultant with three young children, said she needed to sell her Contra Costa County townhome following her recent divorce. She owes more for the home than it's worth, and her real estate agent suggested working with Mueller.

"He's given some amazing tricks and tips on what you need to do to make a short sale work," said the homeowner, who did not want her name published.

The townhouse was listed in February and got four offers, which her lender received about a month ago, she said. She hopes the lender will make a decision in the next week or so. "It's a stressful situation. It's nice to have someone else dealing with the ugliness of it."

Thanks Sue.

We're all doing our best, trying to make the best of the situation.

BTW: Sue writes a pretty mean blog: Square Feet Check it out!

Local Notice of Defaults

2008-02-21T11:37:00.000-08:00

Notice of Defaults Last week (week ending Feb 20th) we saw the following NOD filings.

For the State of California: 8,178

By County

Alameda: 323
Contra Costa: 487
Sacramento: 678
Solano: 180

By City

Antioch: 89
Modesto: 163
Oakland: 107
Sacramento: 400
Stockton: 216
Vallejo: 70

Data courtesy of :

California Notice of Defaults 2/7/07

2008-02-07T18:31:00.000-08:00

Last week (week ending Feb 5th) we saw the following NOD filings.

For the State of California: 6,736

By County

Alameda: 460

Contra Costa: 339

Orange: 334

Sacramento: 512

San Joaquin: 212

Santa Clara: 174

Sonoma: 273

Stanislaus: 276

By City

Antioch: 85

Bakersfield: 143

Elk Grove: 63

Fontana: 107

Hayward: 99

Modesto: 149

Oakland: 171

Sacramento: 326

Stockton: 110

Tracy: 50

Vallejo: 63

The highest: 6.3 Million for a 3 bedroom / 2 bath in Winchester, CA - It must have some view!

The lowest: a 3 bedroom / 2 bath in Anaheim that is behind on their $2,333 loan!

Data courtesy of :

Local REO Listings

2008-01-15T14:31:00.001-08:00

I just uploaded the current local REO listings covering the following cities:

CASTRO VALLEY
CONCORD
DUBLIN
LAFAYETTE
MARTINEZ
MORAGA
ORINDA
PACHECO
PLEASANT HILL
RODEO
SAN RAMON
WALNUT CREEK

The cheapest was 1133 Meadow Lane in Concord at $110,000

The most expensive?

Almost 1.3 million at 3709 Stonehenge Way in San Ramon.

There's a wide variety of bargain housing out there.

Here's the complete list: West Contra Costa County REO List

Your IRA and Unlimited Gains

2007-11-05T17:00:00.001-08:00

There was a local cement company that had the slogan on the side of their trucks,

"Find a Need and Fill It!"

I was thinking about that truck last weekend when

I found the NEED!

For the Real Estate Agent to begin discussions with the lender on a Short Sale they need to have an offer in hand. That offer doesn't have to be full price but it does need to be real. This is a very big NEED. The Loss Mitigation people will actually hang up on them if they do not have an offer.

NOW Here's the FILL IT!

Your Self Directed IRA has the capability to purchase real estate. It has the ability to buy it outright and it has the ability to put 20% down and finance the rest. Your Self Directed IRA has the ability to flip properties with no capital gains!

SUSIE SELLS SHORT SALES DOWN BY THE SEA SHORE...

Here's how this works... Susie Sells has just taken a listing for a $400,000 short sale. Susie needs to have a real offer in hand to begin negotiations with the lender. Your IRA offers to buy the property for 50% ($200,000). Remember the home may be valued at 450,000, the short sale listing is at $400,000 and you just offered to buy at half price.

Chances are the Lender isn't going to snap at the offer Susie presented them. Then again - they might. We're hearing some very amazing offers being accepted these days.

If the lender accepts the offer, you just secured an investment property at 50%! You can keep it and start playing monopoly with real houses or list it with Susie at 75% tomorrow. Either way, you win!

Chances are the offer will not be accepted. Don't cry. Move on to the next one. Don't invest too much time and energy in this. This is a game of speed.

If Susie calls and says, "Mike, I need you to make an offer on this clean 4-plex I took a short sale listing on today." You say, "Can you be here in 10 minutes?" It's all about the numbers. Play the game and eventually you may become the owner of a Real Deal.

Teamwork

In the meantime, you've given Susie the one thing she really needs right now, an offer. Susie now owes you. You can bet Susie is going to do everything she can to make you happy. You need to get on Susie's Team.

If you are looking for a local Susie of your own, give me a call. I know plenty in all areas of the country.

If you need help setting up a Self Directed IRA - I can do that too.

Mike Mueller - 925 288-9977 Ext 104

DirectBuy Sales Tactics

2007-10-29T09:50:00.001-07:00

When investing in foreclosed properties chances are the unit will need a little rehab. Reducing this expenditure as much as possible is a natural. Every dime you can save in the process of turning into cash positive is vital and crucial.

So you might be tempted by the infomercials you see of DirectBuy. Don't be. Investing in any distressed property requires all your noggin power and that includes on the rehab as well.

Being tempted by the seductive commercials is normal. When my wife suggested last week that we should "go check them out" I knew it was time for this post.

Here's the scoop

DirectBuy is a sales company right out of the timeshare industry. Here's what happens when you "check them out".

First you'll be greeted by your personal sales rep, after some "It's nice weather we're having...", you'll be ushered into a sales presentation, usually given by women. The presentation is very well scripted. It's been crafted to make a lot of economic sense - according to their stats. They say the best way to lie is by using Stats. That's what my Stat Professor used to say.
From there you'll be moved to closing. At least two managers will come in. They'll present the contract to you. If you stop to read the contract someone will ask you a question, "Mike, what style of cabinets do you like better, Colonial or Modern?" The question doesn't matter. The distraction does.
It's now or never. With the inner secrets they've allowed you to see they "can't let you walk away and think about it." Here comes the "Fear of Loss Close"
They already have an answer to every objection you have. Their closer's have role played the same scenario over and over again.
Want to compare prices? They've got you covered on that as well. They'll try to compare the prices you come in with against closeouts and non comparable items. The cabinets they quoted you in the signing room that beat the pants off the quote you have from the Home Depot, are probably not in stock, are discontinued, and unavailable. They don't exist.

Assuming you lost all sense of reason and signed on the dotted line, you are in for some surprises.

You'll pay a huge up front fee for signing up. You'll pay a monthly fee for access. There is virtually nothing in stock. Pay now - and wait. Now wait some more. Keep waiting. How does 6 to 8 weeks sound?

You'll pay for shipping - and shipping isn't cheap!

How about returns? Did you know they don't take back anything? NO RETURNS! Of course, you would had they let you read the contract.

Want to get out of the contract? Not a chance. It's been reported to be as tight as a drum.

Want to read some more? Here's a great compendium of disgruntled DirectBuy'ers.

www.InfomercialScams.com

Eduardo Ledesma

2007-10-19T13:49:00.001-07:00

Every Friday, Eduardo Ledesma searches the local MLS systems of Alameda, Solano, and Contra Costa for distressed investor properties.

Every Friday I get an email listing of all the properties Eduardo has found. It's a link to every property that he has determined fits my particular search requirements. He has put them all on one single page. Understand this, Eduardo doesn't just send his email to anyone. He sends the list to me because I am in his group.

Eduardo doesn't stop there. Eduardo also leads a small weekly group on a tour of selected Bank Owned Properties. You can't come. You have to be invited to go on this tour. Eduardo is what is called an REO Expert. He specializes in Short Sale and Bank Owned opportunities.

You see, Eduardo doesn't work like most Agents. He has a very defined and specific way of doing business. Eduardo will only take on clients who are ready and serious.

I bring this up because I just received a call from a reader who wanted me to forward the "Eduardo List". There's something wrong with that. This person doesn't know Eduardo. He doesn't know them.

Technology has enable the free flow of information all across the web. While the flow might be free, the work it takes to put it together isn't. The list Eduardo puts together takes up his valuable time. He's very willing to give his time to the right people.

One of the very first jobs I had was at The Sizzler back in 1977. I remember my first boss, Pat Malan. Pat had a saying he was fond of. It has stuck with me to this day.

"Don't take kindness for a weakness". Not that the caller was trying to personally take advantage of Eduardo. This is more of a case of the caller assuming that all information, especially on the internet is free.

In the end, I have introduced the the caller to Eduardo. They'll meet and Eduardo will develop a better understanding of what it is she is looking for. Instead of her receiving an overwhelming amount of useless information - she'll now get only the highly detailed and targeted content she needs.

If you would like to discuss your ideas with Eduardo - give me a call, I'd like to introduce you to him!

Mike Mueller (925) 288-9977

Technorati Tags: foreclosure investing, bank owned properties, short sales

Tax Lien Investing

2007-10-17T08:50:00.001-07:00

Last year a good friend of my wife had watched a late night infomercial where they were selling a program that taught you how you could buy homes for next to nothing. Buying Tax Liens. After watching the hour long program she thought it was "all good". She ordered the $500 package and was eager to start on becoming independently wealthy - just like the program touted.

Somewhere along the line she started to think. If she was buying a home for pennies on the dollar, she was certainly coming out a winner. So who was the loser?

She called me for my insight. I told her that someone has to lose. Chances are the home was not vacant and abandoned as the commercials always seem to show. Instead, if she bought a tax lien home she might be displacing an elderly person or maybe a homeowner that was down on their luck. Maybe the original homeowner passed away - the current heirs to the estate (think sons, daughters, and grandchildren) didn't know about the delinquent tax bills. I posed the question to her that would she feel right to take the equity away from that grandchild, maybe preventing her from going to college?

In the end she returned the 38 CD set and fought for months to get her money back.

I read a news story today about an 89 year old Widow. She is losing her 35 acre farm due to her failure to pay a $38 tax bill. That's no typo - that was Thirty Eight Dollars! The tax bill was from 2003 and was purchased in 2005 by a Tax Lien speculator.

Oh, did I mention she was blind?

Prairie State Properties LLC, the owner of the Tax Lien is set to make out pretty good. They have "Billie Bob's Tax Lien Sale System" down. Win - Win just isn't in their vocabulary.

NOTE: What Prairie State is doing is perfectly legal. It's a loop hole in the system. I'm all for capitalism. I'm not for "Pirate-ism". Stealing equity, stealing capital, stealing anything is just not ok. It's really not ok when you put a face to it.

Technorati Tags: Tax Lien Sales, Fraud, Theft

Clouds

2007-09-21T07:00:00.001-07:00

"Partly Cloudy", said my local weather person. Partly Cloudy is good thing if you are laying back after a picnic with your sweetheart on a summer day.

Any sentence with the cloud word in it is the last thing you want your real estate professional to utter, especially from your escrow / title person. A clouded title can easily kill a deal.

What's a Cloud?

Generally, a cloud on a title is due to someone owing someone something. Generally, that someone either didn't know about the debt, wouldn't pay the debt, or simply couldn't pay the money. Generally that cloud can be removed by a simple quit claim deed. That's the end of the generalizations.

Why is this important?

When the stock market has a correction to the downside we see the professional traders looking to buy bargains. The same holds true for real estate. There are some great bargains out there. The pro's are already looking and buying real estate. As we continue, the amateurs are going to be tempted to look for that bargain.

Obviously, those bargains can be found in various distress sales. Those distress sales come in three different flavors and have three very different levels of cloud risks associated with them.

Buying a Foreclosure or home that is has a Notice of Default filed against it.
Buying a Short Sale
Buying a REO or Bank Owned Property.

Buying a Foreclosure

This seller has been running behind for a long time now. There's a reason they are in default - they couldn't pay. If they couldn't pay the mortgage, they probably owe other people too. Some of those people have the ability to put a lien on their home. There's a cloud. This lien could be just a little light and fluffy cloud or it could be a thundercloud. Garbage liens - usually light and fluffy. Tax Liens or Mechanics Liens have the ability to seriously hamper a deal.

When you are buying a Foreclosure you are buying from the homeowner. Chances are they are not represented by a real estate professional (can't afford it). Are they going to initiate the title search prior to your contract? Not a chance. in a foreclosure purchase, the cloud is usually discovered after the contract. You can see how that just doesn't work, right?

Buying a Short Sale

This seller usually has a real estate professional guiding the way. They have brought the lender in on the deal. Usually they have had a title company complete a title search and discovered any liens that might be on that title. When you purchase a Short Sale, both parties will usually have a clearer picture of the deal. No surprises. That doesn't mean there won't be clouds. But those clouds will be known and can be dealt with prior to the contract. This is a big difference.

Buying a Bank Owned Property (REO)

The seller is the Lender. The property has been through the grinder. It may have started as a Short Sale. It didn't sell and so the owners fell behind to the point where it became a NOD. Once again, no sale. Finally the Trustee Auction came and due to the lack of equity it didn't sell and was turned over to the Lender.

Here's the bright and sunny on this picture. Chances are all clouds, all liens, all liabilities attached to this home were taken care of as it as it passed from the homeowner to the lender. Buying a REO? You'll probably have a clear day when it comes to title.

Wise Words

If you are looking for deal, no matter which flavor of distress you like, do yourself two favors.

Always use true real estate professionals who are familiar with the type of deal you are considering. As my friend Brian Brady says, "If you thought dealing with a professional was expensive, wait until you find out how much dealing with an amateur costs!"
Always buy the best title policy you can buy. This is not a place to try and save a few bucks. You did know that there were different levels of policies available, didn't you?

Now, just because the REO has the least chance of having a clouded title this doesn't mean you should look only at REOs. The title issue is just one piece of the puzzle. Each version has it's own specific Pro's and Cons. That REO also has the highest chance of being the most abused of the three as well. But that's an article for another day.

Technorati Tags: REO, Short Sale, Foreclosure Investing, Clouds on Title

Bank Owned Properties

2007-09-20T10:07:00.001-07:00

Or what is commonly called REOs. That stands for Real Estate Owned.

The other day I gave you the link to Countrywide REO listings.

Now here's a couple other banks.

One caveat that bears repeating; The Listing Agent has a fiduciary responsibility to the Seller in all real estate transactions.

What this means in plain english is that they are going to do the best for the Seller - not you, the Buyer. You should be represented by a professional real estate agent who is very familiar in the process of buying a REO. The Buyers Agent has a fiduciary responsibility to you, that's a good thing!

Technorati Tags: Buying REO, REO LIstings

Got REO?

2007-09-17T15:52:00.001-07:00

Thinking about buying an REO in the near future?

Here's a link to Countrywide's REO pages. Each one is listed with a licensed real estate professional*.

* Remember the fiduciary responsibility of the Listing Agent is to the Seller (Countrywide) - Use your own agent!

The cheapest in all of California is...

This is where Alex used to live...

58 TRILLIUM PL,
ALISO VIEJO, CA 92656

Listed at just $467 but you can bet that's a typo. I went looking for the property and found only this comment in a Disney Fan site for Hannah Montana (Miley Cyrus):

Dear Miley from Alex
Hannah Montana (Miley Cyrus) Ilove your songsand I cant wait untill you make another.Please mail me am autograph haha just kidding! But if you have time please mail me one my address is 58 Trillium Place my zip is 92656 Aliso Viejo,CA im 9 years old and I love You Peace! Your pic is a big hit!

I'm thinking Alex deserves the autographed pic, she's already been through some tough times. Of course, she's now 11 years old and certainly doesn't live there any more.

Second is a SFR in LAKE ELSINORE, CA for $34,900.00. That sounds a little more reasonable.

What's the most expensive listing in Countrywide's REO storefront you ask?

877 ISLAND AVENUE UNIT 1102,
SAN DIEGO, CA 92101

That better be the penthouse at $1,754,900.00!

Update: That's not a typo, I checked. Here's the listing. It's a penthouse alright. And I hope you like baseball.

This is your view...

Click on the map to check out the Hood

I would think that if I was paying 1.7 for a 2 bed/2.5 bath, 2914 sq.ft Penthouse, I'd have that scoreboard lowered as well.

Play Ball!

Here's some local REO listings to feed on.

Countrywide REO Properties in Contra Costa

City	Address	Type	Contact Name	Contact Phone#	List Price
ANTIOCH	1116 BOND COURT, ANTIOCH, CA 94509	SFR	JIM MANN	925-7790700	$324,900.00
ANTIOCH	1214 SYCAMORE DRIVE #4, ANTIOCH, CA 94509	Condo	CECILY TIPPERY	925-6347820	$149,900.00
ANTIOCH	1305 MARIE AVENUE, ANTIOCH, CA 94509	SFR	C. DAVID BROWN	925-9431414	$304,900.00
ANTIOCH	1316 WEST 7TH STREET, ANTIOCH, CA 94509	SFR	JOHN CASE	925-3087045	$219,900.00
ANTIOCH	1872 MOUNT CONNESS WAY, ANTIOCH, CA 94531	SFR	ELIZABETH "LIZ" MAHONEY	925-3314100	$497,900.00
ANTIOCH	1909 WOODLAND DRIVE, ANTIOCH, CA 94509	SFR	ELIZABETH "LIZ" MAHONEY	925-3314100	$314,900.00
ANTIOCH	1915 BADGER PASS WAY, ANTIOCH, CA 94531	SFR	ELIZABETH "LIZ" MAHONEY	925-3314100	$502,900.00
ANTIOCH	1965 HULL MOUNTAIN C, ANTIOCH, CA 94531	SFR	CECILY TIPPERY	925-6347820	$634,900.00
ANTIOCH	2045 CRATER PEAK WAY, ANTIOCH, CA 94531	SFR	CECILY TIPPERY	925-6347820	$389,900.00
ANTIOCH	2080 GOLDPINE WAY, ANTIOCH, CA 94509	PUD	CATHERINE MARPLES	925-6348040	$589,000.00
ANTIOCH	2121 DENNIS DRIVE, ANTIOCH, CA 94509	SFR	C. DAVID BROWN	925-9431414	$274,900.00
ANTIOCH	2427 CARPINTERIA DRIVE, ANTIOCH, CA 94531	SFR	CECILY TIPPERY	925-6347820	$469,900.00
ANTIOCH	2460 SEQUOIA DR, ANTIOCH, CA 94509	SFR	C. DAVID BROWN	925-9431414	$337,900.00
ANTIOCH	2480 SILVERIA WAY, ANTIOCH, CA 94531	SFR	CECILY TIPPERY	925-6347820	$582,900.00
ANTIOCH	2524 HOOFTRAIL WAY, ANTIOCH, CA 94531	SFR	DAVE KELLEY	925-2289985	$429,900.00
ANTIOCH	2709 STANLEY COURT, ANTIOCH, CA 94531	SFR	CECILY TIPPERY	925-6347820	$679,900.00
ANTIOCH	2756 CAPISTRANO STREET, ANTIOCH, CA 94509	SFR	JIM MANN	925-7790700	$269,900.00
ANTIOCH	2918 MORRO CT, ANTIOCH, CA 94531	SFR	CECILY TIPPERY	925-6347820	$343,900.00
ANTIOCH	3015 N. FRANCISCO WY, ANTIOCH, CA 94509	SFR	CECILY TIPPERY	925-6347820	$359,900.00
ANTIOCH	3209 ISLEWOOD COURT, ANTIOCH, CA 94531	SFR	DON MCDONALD	707-4224411	$299,900.00
ANTIOCH	3321 G ST, ANTIOCH, CA 94509	SFR	C. DAVID BROWN	925-9431414	$347,900.00
ANTIOCH	3901 WELCH WAY, ANTIOCH, CA 94531	SFR	ELIZABETH "LIZ" MAHONEY	925-3314100	$432,900.00
ANTIOCH	3940 FOLSOM DRIVE, ANTIOCH, CA 94531	SFR	ELIZABETH "LIZ" MAHONEY	925-3314100	$439,900.00
ANTIOCH	4127 MOUNT ISABEL ROAD, ANTIOCH, CA 94531	SFR	CECILY TIPPERY	925-6347820	$449,900.00
ANTIOCH	4208 MERCED CIRCLE, ANTIOCH, CA 94531	SFR	FRANK BATCHA	707-7496315	$432,900.00
ANTIOCH	421 WEST 10TH STREET, ANTIOCH, CA 94509	SFR	C. DAVID BROWN	925-9431414	$349,900.00
ANTIOCH	4454 BUCKEYE WAY, ANTIOCH, CA 94531	SFR	ELIZABETH "LIZ" MAHONEY	925-3314100	$614,900.00
ANTIOCH	4831 KNOLLCREST DR, ANTIOCH, CA 94531	SFR	ELIZABETH "LIZ" MAHONEY	925-3314100	$423,900.00
ANTIOCH	49 BRYAN AVENUE, ANTIOCH, CA 94509	SFR	JIM MANN	925-7790700	$249,900.00
ANTIOCH	5009 CRESTPARK CIR, ANTIOCH, CA 94531	SFR	CECILY TIPPERY	925-6347820	$367,900.00
ANTIOCH	5016 WAGON WHEEL WAY, ANTIOCH, CA 94531	SFR	DAVE KELLEY	925-2289985	$386,900.00
ANTIOCH	5054 CRESTPARK CIRCLE, ANTIOCH, CA 94531	SFR	CECILY TIPPERY	925-6347820	$393,900.00
ANTIOCH	5101 COMANCHE COURT, ANTIOCH, CA 94531	SFR	GINA FORONDA	510-7993579	$432,900.00
CONCORD	1471 DEL RIO CIRCLE UNIT C, CONCORD, CA 94518	Condo	JIM MANN	925-7790700	$244,900.00
CONCORD	1747 LEMONWOOD DRIVE, CONCORD, CA 94519	SFR	JIM MANN	925-7790700	$484,900.00
CONCORD	1806 LANDANA DRIVE, CONCORD, CA 94519	SFR	FRANK BATCHA	707-7496315	$443,900.00
CONCORD	2200 LAGUNA CR G,, CONCORD, CA 94520	Condo	FRANK BATCHA	707-7496315	$199,900.00
CONCORD	2877 LA SALLE AVENUE, CONCORD, CA 94520	SFR	C. DAVID BROWN	925-9431414	$324,900.00
CONCORD	2900 HILLTOP ROAD, CONCORD, CA 94520	SFR	ELSA LEWIS	918-2176424	$369,900.00
CONCORD	3030 TOSCA WAY, CONCORD, CA 94520	SFR	MICHELE MANZONE	510-6628545	$342,900.00
CONCORD	5442 E ROUNDTREE CT, CONCORD, CA 94521	SFR	JIM MANN	925-7790700	$246,900.00
Concord	108 SUMMERWOOD PLACE, Concord, CA 94518	Condo	ELIZABETH "LIZ" MAHONEY	925-3314100	$438,900.00
PITTSBURG	1094 CHESAPEAKE DRIVE, PITTSBURG, CA 94565	PUD	GINA FORONDA	510-7993579	$435,900.00
PITTSBURG	1333 MAPLE STREET, PITTSBURG, CA 94565	SFR	JIM MANN	925-7790700	$289,900.00
PITTSBURG	134 PEPPERMILL LN, PITTSBURG, CA 94565	PUD	GINA FORONDA	510-7993579	$209,900.00
PITTSBURG	1918 PLYMOUTH DRIVE, PITTSBURG, CA 94565	PUD	JIM MANN	925-7790700	$329,900.00
PITTSBURG	2 BROOKTRAIL CT, PITTSBURG, CA 94565	SFR	DAVE KELLEY	925-2289985	$594,900.00
PITTSBURG	2203 JACQUELINE DR, PITTSBURG, CA 94565	SFR	CECILY TIPPERY	925-6347820	$369,900.00
PITTSBURG	348 E 3RD ST, PITTSBURG, CA 94565	SFR	GINA FORONDA	510-7993579	$389,900.00
PITTSBURG	52 BELL DR, PITTSBURG, CA 94565	SFR	CECILY TIPPERY	925-6347820	$334,900.00
PITTSBURG	827 CARPINO AVENUE, PITTSBURG, CA 94565	SFR	MICHELE MANZONE	510-6628545	$309,900.00
PITTSBURG	973 PROMENADE DRIVE, PITTSBURG, CA 94565	SFR	FRED EVERETT	707-7458800	$558,900.00
Pittsburgh	1075 Muir Creek Dr, Pittsburgh, CA 94565	SFR	DON MCDONALD	707-4224411	$518,900.00
PITTSBURGH	304 SADDLEHORN DRIVE, PITTSBURGH, CA 94565	SFR	GINA FORONDA	510-7993579	$859,900.00

Technorati Tags: Buying REO, Countrywide REO

Always Use an EXPERT

2007-09-10T07:35:00.001-07:00

I posted on the Foreclosure Report... an article from one of the smartest and most knowledgeable short sale experts I know, David Petrovich of Oakhurst, NJ. David had an interesting take on the current state of real estate professionals. I cannot agree with him more. His writing was aimed towards the homeowner facing foreclosure and the importance of using a professional who extensive experience in dealing with a short sale.

What goes for them, also applies to the other side of the coin, the buyer of the short sale property.

Since all agents are having a hard time right now the obvious solution would be to follow the "action". So we're seeing quite a few Professional Agents, who are switching gears right now. While they know plenty abut the purchase and selling side of a transaction - the short sale is a vastly different animal.

Working with a professional agent who is just entering this arena of short sales could cost you.

Suzy "Sells Homes" Smith might have her signs up all over the neighborhood. She might have sold you your home. She might even have her commercial going before the previews at the movie theater. Suzie might be bigger than life, but using Suzie for your Short Sale might cost you your one chance at completing the transaction on that short sale.

Always work with a Professional Real Estate Agent that has extensive Short Sale Experience.

If you don't know one, ask me I can find one for you.

Mike Mueller - (925) 288-9977 ext 104

Technorati Tags: Short Sale Professionals, Short Sale, Short Sale Problems

The Next Big Bargain

2007-09-07T06:53:00.001-07:00

The San Jose Mercury News sent me a snippet via email entitled...

The Next Big Bargain

A record number of homeowners are in foreclosure, according to data compiled from April to June by the Mortgage Bankers Association. The problem is caused by subprime mortgages in California, Florida, Nevada and Arizona. According to the bankers' association, "were it not for the increases in foreclosure in those four states, we would have seen a nationwide drop in the rate of foreclosure filings."
What does this mean if you live in California? The Golden State has 17 percent of all adjustable-rate subprime mortgages. Declining home prices have made it hard to refinance the loans. And it's also hard to sell the homes: thanks to a building spree the inventory of homes available for sale in the western region of the United States was at an all-time high in June.
And then there are the investors. About one-in-five defaults in California as of June 30 were from mortgage holders who didn't live in their homes.

Yes, it's true foreclosures are going high and only going to increase, yes it's hard to sell homes, yes jumbo loans and guidelines have become increasing difficult. Life is hard.

In a previous life as an Alaskan Brown Bear I learned if all the fish are swimming one way, it's best to face the other way. Doesn't it make sense to look at this time as a golden opportunity to buy?

That reminds me of a line from Cannonball Run

If you are going to be a Bear... Be a Grizzly!

Technorati Tags: Buying Foreclosures, Foreclosure Investing, Buying a Bargain

First Time Buying, and the Short Sale

2007-09-05T16:32:00.001-07:00

Here's an interesting twist.

Yesterday I wrote about what might very well be the very best First Time Buyers Program in California. I got a call almost immediately from a reader who was a first time buyer and was looking at buying a short sale property in bay area.

Buying a short sale is an exercise in patience. From the Listing Agent's perspective it's often an exercise in frustration.

Once the offer is made, the numbers are submitted to the Lender and everyone waits for them to accept or deny. This often takes a considerable amount of time. The frustrated buyer often has a couple of other properties they are considering and in the meantime moves on to one of those instead. Pre-Approvals and interest rate locks go stale very quickly.

That brings us to CalHFA (the first time buyer program I mentioned). The absolute beauty of this program is that it moves slowly, (well that and it will do 100% financing plus cover a certain amount of closing costs). Normally that would be a bad thing. We want lightning quick approvals and locks right? Speed is a double edged sword. With the speed that quick approval comes with, it also means that rates can adjust, guidelines can change, equally quick. That's a bad thing if you are waiting on a short sale. I have seen entire deals fall out just because a simple little guideline changed making the buyer ineligible.

CalHFA rates change very slowly. While we saw rates for traditional programs change twice today for some lenders, CalHFA rates have not changed since August 9th! Not at all. That's no change in a month! Their guidelines change very slowly as well.

That leads me to believe that if you have not owned property in the last 3 years (that you have lived in), and you are looking to buy a Short Sale Property soon, this may be

The Very Best First Time Buyer Program For Short Sales Ever!

I mentioned on the previous post there's one catch. You need to work with a mortgage professional that is certified to complete these special programs. Unfortunately very few mortgage originators are certified for CalHFA loans.

I am - Just give me a call. (925) 288-9977 Ext. 104

Technorati Tags: CalHFA, Cal HFA, 100% Financing, No Money Down, Short Sale Purchase

Buying a Short Sale

2007-08-30T15:32:00.001-07:00

Buying an short sale for either an investment property or a residence can try the patience of all parties involved. We know that here in the Bay Area we are presented with plenty of opportunities. How do you buy a Short Sale?

Here's a quick run down of a typical purchase.

Step 1: Assemble your team. Don't go it alone. Your Agent, Loan Officer, Appraiser, Home Inspector, Escrow Officer. Use a real estate agent that knows how to manage a short sale purchase. Don't use your cousin's husband who just got their license. This is not the place for nepotism. Use only true professionals. Your team has to work very well together, very well. One of my favorite quotes is from fellow blogger, Brian Brady, "'If you thought dealing with a professional was expensive, wait until you find out how much dealing with an amateur costs!" If you need help getting the right team together start with just one, either a Loan Officer or Real Estate Agent. Ask them who they recommend. They'll be better at providing the missing professionals.

Step 2: Have all your ducks in a row. Pre-approved, Pre-qualified, ready to go! The same goes for your Mortgage Professional. Additionally, know the property type you are looking for, the price range, the expected rental income for that area, will the proposed property cash flow? Is the property in Notice of Default? When is the Trustee Sale? Will the Lender stop the proceedings? Have you checked for liens against the property? Do your homework now.

Step 3: Make the offer. In a short sale there are two things that are important. The purchase price and the strength of your position. For the Lender to accept the offer they'll want the highest dollar amount they can get, but they also are concerned with a couple of other items. How fast can you close? How strong is your approval? What is the Loan to Value? What do you have in contingencies? All of these factor into the offer being accepted or declined.

Step 4. Take a deep breath and wait. then wait some more, and some more. The loss mitigation and short sale departments of Lenders are swamped as can be expected. Many short sale transactions fall out because the lender took too long to accept. When they finally did the buyer was long gone. In the meantime you might want to keep your eye on other properties or make backup offers on your second and third choices. Better yet, take your Team to lunch!

Need help? Just ask the right people.

Risks and Rewards

2007-08-29T10:32:00.001-07:00

In searching the internet for relevant Investment information I came across another well written article and much to my surprise it was written by a local bay area investment real estate agent, John Nazareno.

Here's is the post John wrote. You can also read it as he wrote it here.

There are many different things to invest in these days. One investment route which individuals take is with regard to foreclosures. Foreclosures occur when the current homeowner of a property fails to pay their monthly mortgage and the property is repossessed by the lender. There are various risks and rewards which go along with investments of this type and some of these will be discussed below.

Advantages and Disadvantages to Buying Pre-Foreclosure Properties

One type of property sale which relates to foreclosures is the pre-foreclosure sale. A pre-foreclosure sale occurs when the lender allows the homeowner with past due mortgage payments to sell the home on their own and pay back the lender what they can from the sale of the home. The lender often agrees to this so that they do not have to get involved with possessing then reselling the home and the homeowner likes this option because it prevents foreclosure. The investor also benefits from this type of sale as well.

Some advantages to purchasing an investment property via pre-foreclosure sale include discounted price, speedy purchase and wonderful profit opportunities. As for the disadvantages, the investor who buys property by way of a pre-foreclosure sale may find that the homeowner is hard to contact and/or unwilling to sell, the research is cumbersome and there are other potential buyers who wish to purchase the property.

For those who wish to purchase property via a pre-foreclosure sale, they should do their independent research, approach the homeowner in a courteous manner and ensure that they make an offer that will not cause them to lose money in the end. By doing so, the investor may find that buying a house by pre-foreclosure sale will work to their advantage.

Advantages and Disadvantages to Buying at a Foreclosure Auction

Another way to purchase foreclosure property is through a foreclosure auction. Auctions of this type are usually held at the local courthouse of the county where the property is located within. This is a common way for foreclosed properties to be sold and this too has its pros and cons.

The main advantage to purchasing property at a foreclosure auction is the reasonable price for which one can bid on a property. Although there will be other bidders, the resulting price is usually one that is quite attractive. Another advantage relates to the profit which the purchaser will see when they resell the home. Since the home was won at a reasonable amount, when the highest bidder goes to resell the property they will most likely see a good profit margin from that sale.

With regard to the disadvantages, purchasing a home at a foreclosure auction has a few which are tied in with it. The first disadvantage is at auction homes are usually sold as is, the bidder who wishes to adequately inspect the home beforehand will be unlikely to do so. Another disadvantage to purchasing a home via auction is that the purchase price and deposit is due via cash or cashier's check in many instances which may be difficult for many investors to obtain on short notice.

Advantages and Disadvantages to Buying Real Estate Owned (REO) Properties

One last type of property purchase which relates to foreclosures is real estate owned properties, or REOs. An REO is when the property returns to the exclusive hands of the lender and then needs to be sold from that point. The lender is looking to sell their newly acquired property as soon as possible since they do not want to be in charge of the property and its necessary maintenance. The lender will then look for potential buyers of the property.

Some advantages to buying an REO are that they usually have good title, property taxes will be up to date and repairs may have been made to the property by the lender to ready it for sale. As for the disadvantages, those who purchase REOs may find that the savings which they see by purchasing an REO are not as great as they could be and therefore, the profits may not be as great as well.

Conclusion

When purchasing property in any of the previously mentioned ways there are a few things to keep in mind when doing so. It is extremely important to do independent research with regard to the properties and purchase methods, ensure necessary funds for purchase and inspect the property whenever possible. This will help to ensure that the buying process goes as smoothly as possible.

The Three Phases of Buying Property in Foreclosure

2007-08-22T12:03:00.001-07:00

I was doing my normal daily reading and came across this excellent article written by a local real estate agent who happens to be in my home town of Walnut Creek, CA.

Peter Maclennan works for Prudential California Realty
He can be reached at (925) 932-1000

With all the press generated about sub-prime mortgage failure and defaults, many more people are curious to know about buying a foreclosure home. Most people hope that by purchasing a foreclosure home they will be getting a better bargain and saving some cash. This may or may not be the case.

Unfortunately, when people begin to neglect their bills they also begin to neglect their home. Frequently a home that is in a state of foreclosure has deferred maintenance and is in need of repair. The amount of disrepair varies from home to home.

If a person is willing to put in some "sweat equity", then this type of home can be a good buy. It will take either time devoted to the repairs, or additional funds to pay for the repairs. However, if a person has a history of failing to complete tasks and is short on cash, this is not good choice no matter how great a deal. It is very likely that the house will stay in a state of disrepair, and make home-life unbearable (Husbands read UNHAPPY WIFE).

Three Phases of Foreclosure

Pre-Foreclosure

When a homeowner fails to pay their mortgage, the bank or lender will send them a notice of default and file this with the appropriate government authority. The notice of default begins the foreclosure process and the homeowner is in a state of pre-foreclosure. The pre-foreclosure period varies from state to state. In California the borrower or homeowner has 90 days to bring the account current, called the reinstatement period.

If after 90 days the account has not been brought current, the lender will file a notice of trustee's sale. This notifies the home owner and the public that the house will be sold at public auction. The homeowner has until 5 days prior to the trustee's sale to redeem the house and pay off their loan. The trustee's sale ends the period of pre-foreclosure.

Buying a Home in Pre-Foreclosure

There are varying views on buying a home in pre-foreclosure. When you buy a home in pre-foreclosure you are usually buying the home from the homeowner. Some people question whether or not this is ethical because you are profiting from another's misfortune. Other's will argue that assisting the borrower in their time of need can actually help them. It can prevent them from having a foreclosure or bankruptcy on their credit record.

Homeowners can be in foreclosure for a number of reasons many of them unpleasant: divorce, job loss, medical bills, death of a bread-winner, etc. Contacting a homeowner in any of these distressed states can be touchy. One must tread carefully and attempt to provide a win-win situation for the homeowner and buyer alike.

Trustee's Sale

The trustee's sale occurs after the notice of default and the notice of trustee's sale has occurred. The auction often takes place on the steps of the county courthouse. The notifications of these sale dates and times are frequently obscure. The house is sold to the highest bidder. At many trustee's sales the lender buys the home back to cover their losses.

Buying a Home at a Trustee's Sale

A trustee's sale does offer bargains, AT TIMES. However, most of the time a buyer is not able to inspect a home prior to purchase. What appears to be a good deal, may not be. The cost to repair the property combined with the purchase price may exceed the property's value. This can make buying a house at a trustee's sale a risky endeavor for the novice.

Bank Owned or REO (Real Estate Owned)

At many trustee's sales the bank or lender will repurchase the house to minimize their losses. Most banks are not in the real estate business but in the lending and interest business. If they have money tied up in real estate, they have less money that they can lend to borrowers. This costs them money in interest earned each day they hold the property.

Banks will list the property for sale on the local MLS with an agent. Many of these are sold "as is". Some lenders require that the purchaser be pre-qualified for a loan through them.

Buying a Bank Owned or REO Property

There are many good deals to be found at this stage of the process. The benefit for the average buyer is that because the homes are listed, they can be visited and viewed. Visiting the house with a carpenter or repair man, provides an estimate of the cost of repairs before the purchase, not after. An initial offer should be adjusted to account for repair costs.

The beauty of investing at this stage is their is no "emotional attachment" to the home by the current owner (bank or lender). For these owners it is a simple business decision. They want to minimize their loss. As time passes their loss grows and they are more likely to lower the asking price or accept a lower offer.

Summing Up

Buying a home in foreclosure can be rewarding. The homes are often below value. If you are willing to add value to the home through repairs and upgrades, you may be way ahead at the end of the game. However, it is not for everyone.

Always remember the real estate mantra "Location, location, location." Don't buy the best home in a bad neighborhood, rather buy the worst home in a great neighborhood. - Peter

Buy, Hold or Sell

2007-08-21T10:26:00.000-07:00

One of the cornerstone ideas in investing in RE that we push is cashflow.
You must have proper cashflow.

Investment in anything means looking at your ROI, "Return On Investment".
If you don't get a good ROI, why invest in the first place?

How do you get a return in RE?
Only two ways I know of:

Cashflow
Appreciation

Think about that for a minute.

What do we see in the marketplace these days?

Flippers? Not many.
Let's talk about appreciation in terms of flipping.
Flipping is, buying low, then turning around and selling higher.
It's not that easy of course. Can it be done with foreclosures, short sales and bank owned homes? Probably.

Sometimes you need to buy low, invest big $ to fix and fluff, just to be able to sell higher - right?
We'll that's "Appreciation".
The cashflow in flipping comes into play when the first mortgage payment is due.
No rental income means total negative monthly cashflow.
That's ok for the short term if the flip yields enough appreciation.

The greatest ROI comes from the strategy of Buy and Hold.
You know this. Look back over the years and during good times and bad, property just keeps on chugging along.
Yeah, we're in the bad now, but take a step back and look at a wider view.
Somebody somewhere said ( I can't remember right now) that property values at least double every ten years, as an average, since the 1930's.
Never less than double.

As a real example let's look purchasing a $500,000 income property and holding for 10 years.
Let's assume you put down 100,000 (20%), have good cashflow, and you never pay a dime towards principal.
Let's also assume we have a dismal appreciation rate over the course of those 10 years of only 5% each year.

Now let's look at the numbers:
Present Value would be what you have in it now - $100,000
after 10 yrs appreciation the market value or Future Value would be $820,088
subtract the loan amount of $400,000 and you'll have $420,088 in equity right?

Now go put that in a calculator and see what your ROI was.
Oh, here's an online one I found: LINK
What did you find out?

Your ROI was 15.43% right?
That's each and every year and at a very dismal 5% appreciation rate.
Still don't believe it?
Take any regular calculator, or an 8th grade math student (Hey Emily, i have a project for you...),
and start by adding 15.43% of 100,000 to itself.
The first one is going to be easy $15,430 added to 100,000 is 115, 430.
Now add 15.43% of that to the total and so on and so on.
Do it 10 times and you'll come up with $420,088 give or take a penny.

But is 5% appreciation too small?
You might think so. Most professionals would agree with you.
We may never see triple digit appreciation again, but what about double?

Go back and do the same at 10% a year.
Now at year 10 the same property is worth roughly a cool $1.3 Million!
Subtract the loan amount of 400,000 and that leaves 942,355 to be exact.
Pop that in the ROI calculator.
WOW!
25.15%

And that folks, is why Buy and Hold makes so much sense.

Yeah, I know.
I left out Inflation, Taxes, 1031 Exchanges, Realtor Fees, and so much more.
Let's not cloud the issue, the point is more about the "WHY".
Why anyone would want to buy and hold RE.

But there's a catch.
To properly buy and hold, you need to be able to HOLD.
This is where the Cashflow comes in.

Proper cashflow allows the investor to hold.
It may provide anywhere from a decent or minimal income each month.
But the real returns are usually found in the appreciation, not in the cashflow.