1605 Grant - Lincoln Park - 3br/1ba - $36,500 In Equity!

Price: $37,500

Comps: $72,000+

Repair Estimate to Make Rentable:

$500 - $2500

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100% No-Money-Down Financing is STILL Available!
Call Me TODAY For More Information Or To Invest in this Property!

734-799-1013

Property Details

Style: Bungalow/Cape Cod Bedrooms: 3 Bathrooms: 1 Basement: Yes - Unfinished Garage: Yes - 1 Car, Detached Square Feet: 1,444 Heating: Gas F/A Comps: $72,000+ (see video below)

Property Overview

This is a great 3 bedroom with a HUGE equity spread!

It’s pretty much in move-in condition.  It has a kitchen/bathroom/paint/carpet.  It has some new vinyl windows but a few of the old wood ones are left.

The basement is clean and dry, a few small cracks like the ones found in most homes this age, and is unfinished.  Descent looking furnace (see video) but we have not tested it yet.  The water heater looks like it needs to be replaced.

If you are interested in "Hands-Off" Investing, We Can Help Place a Tenant In This Property for You!

Video Tour

Comparable Property Data (Comps)

Click Here to Download Comp Report

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How to Wholesale Bank Owned REO Foreclosure Properties

Wholesaling is one of the most popular approaches to real estate investing.  It appeals to both beginning and seasoned investors.

Cash strapped beginners often start here because it’s possible to achieve fast success even if they have little money and their credit is in shambles and veteran investors who have had their fill of rehabs and tenants are drawn to the simplicity that wholesaling provides.

Traditional wholesaling breaks down to finding a motivated seller that has a significant amount of equity in a property, placing that property under contract, then assigning the contract to a 3rd party end buyer for a slightly higher price.

With the market in its current condition more and more investors find that they are coming across hordes of motivated sellers.  However, this windfall of prospects all seem to have one trait in common.  They don’t have any equity! This little dilemma is causing many investors to turn their efforts toward bank-owed foreclosures.

Real estate owned by banks (REOs ) come packaged with a number of benefits that make them very attractive.  Any back taxes due are paid by the bank, past due water bills and city inspection fees are also usually paid by the bank, and the homes are always vacant and easy to inspect.

Of course the biggest advantage associated with REOs is the fact that equity can be created instantly either by finding a hot deal or through shrewd negotiation.  There’s nobody telling the bank that they owe too much on a property and can’t lower the price a bit.  In theory…any house could be sold for as little as a dollar.

In fact, there is only one downside to wholesaling REO properties.  Non-assignability. When an investor gets a bank owned property under contract it always comes with multi-page addendums that make the deal non-assignable.

Many investors stop right there and turn away to other paths such as short sale negotiation or subject-to investing not knowing that there are in fact four different workarounds to this small roadblock.

Before I go into the nitty-gritty of how you can put these methods to work in your wholesaling business, we need to clarify the three major categories of bank owned REO foreclosure properties.

1) Fannie Mae/Freddie Mac Foreclosures – once a mortgage is granted to a homeowner there is a high probability that it will be sold on the secondary market and end up in the massive portfolio of one of these two mortgage giants.  When foreclosed upon they end up as Fannie Mae or Freddie Mac REO foreclosures.  Investors are often unaware that the homes Fannie/Freddie sell tend to come with strings attached which make it very, very difficult to wholesale these deals.

2) HUD Homes – when homes backed by FHA mortgages go bad they end up in the inventory of the Department of Housing and Urban Development.  HUD homes are unique in that the buyer has to submit their social security number (or EIN number if writing an offer through a business entity) when making an offer.

3) Regular REOs – the majority of foreclosure properties fall into this category.  They are comprised of prime, subprime, Alt-A, and a host of other mortgage types that have fallen back into the hands of various banks.  Their common bond is that there is no government policies that control the method in which they are sold.

Now that you know the three different types of foreclosures let’s tackle the four different methods that you can use to quick-turn them for a profit and hammer out their pros and cons while we’re at it.

Method #1 – Add to Contract, Then Quit Claim

Most banks do not have an issue with adding an additional party to a contract, they just do not want the ORIGINAL parties removed from it at any time.  So Ivan Investor can get an REO property under contract for $50,000.  Ivan calls Louie Landlord and after talking about the deal Louie agrees to pay a total of $60,000 for the property.

Ivan calls the bank up and requests that an addendum be drawn up that adds Louie to the contract and title.  The Bank agrees and everyone shows up on closing day.

Louie brings TWO certified checks.  One for $50,000 for the purchase of the property, and one for $10,000 made out to Ivan.  Everyone closes on the property at which time both Ivan and Louie are the owners of the home.  Louie hands Ivan the $10,000 check and Ivan signs a quit claim deed removing him from title on that property.  Pretty simple, right?

Pros:
The advantage to this method is that there is only one set of closing costs.  It’s a rather simple and straight-forward method that works for most deals.  It works around the 90-day deed restriction that comes with Fannie/Freddie properties.

Cons:
Here are the negatives that come with this method.  A) This does NOT work for HUD properties because HUD does not allow any changes to the parties that are on the original offer, B) the end buyer knows exactly how much you are making on the transaction, and C) the end buyer usually cannot be getting a mortgage because a mortgage company won’t allow you to be on title if they are lending someone else money against the home.

Method #2 – Simultaneous Double-Close

The simultaneous double-close (also known as a simul close or a “dry” close) is actually two transactions.  An investor is buying from the bank and then instantly reselling to a third party in a separate transaction.  It follows a typical A-to-B-to-C deal flow.

The “twist” that comes with this method is that the wholesale investor never actually brings any money into play.  The end-buyer’s funds are used to fund BOTH transactions.  This is possible because, as long as both closings take place on the same day, it doesn’t matter which one closes first for the title company’s accounting purposes.  The second transaction (B-to-C) could take place a 9am with all the paperwork for that transaction taken care of at that time while the first transaction (A-to-B) doesn’t close until 2pm.

What really matters is that the deeds are RECORDED in the proper order when filed with the county.  It’s important at that time to have the A-to-B deed filed first with the B-to-C deed following on record.

Pros:
This works well for those who have zero cash as long as they have a good title company that will still do these types of transactions.  It still works even with end buyers that are getting conventional financing if the end buyer is getting their financing through the right lender.

Cons:
This method does NOT work if the end buyer is getting FHA financing.  FHA has a rule that says as soon as you take title to the home a 90-day clock begins to tick and until that time runs out, nobody seeking to buy from you can do so with FHA funding.

This method does NOT work for Fannie/Freddie foreclosures in most cases because these super-banks put a deed restriction in place that prevents you from reselling the property to ANYONE for a full 90 days which rules out your plan to resell to your end buyer.  There is, of course, a workaround to this problem but that requires separate study.

Also, with all double-close deals there are two sets of transfer taxes, recording fees, and other closing costs that cut into your profit.  Of course you can just build that into the deal by lowering your offer price in order to circumvent this small annoyance.

The biggest roadblock to getting these transactions closed is the fact that fewer and fewer title companies are comfortable with the “dry” simultaneous close where the wholesale investor brings in no cash to the deal.  In fact, they are often refusing to close these deals at all!

Method #3 – True Double Close

The true double close (also known as a “wet” close) is the same as the simultaneous close in that the investor is buying the foreclosure property and instantly reselling it to the end buyer for a profit.  However, the wholesale investor is actually bringing in his own cash to fund his end of the deal.

This little difference makes the title companies happy but it doesn’t work so well for beginning investors that don’t have piles of cash sitting around to make the deals work.

Then came Flash Funding.  There are “transactional funding” lenders will lend you all the money you need to do these same-day double-close deals…for a price.  Most will never run a credit check or request an appraisal on the property.

The pros and cons to this method are pretty much the same as the simul close, except that on the good side more title companies are willing to do business with you if you go this route and on the bad side you have additional costs in the form of Flash Funding fees chewing away at your profits.

Method #4 – Sell The LLC

This last method has been popularized by Steve Cook who’s said that he swiped it from commercial real estate investors who have been using it for years to avoid paying transfer taxes.

The idea is that an investor would submit an offer in the name of an LLC.  If he was writing an offer on 123 Main Street, he might put the offer in with the buyer as “Main Street Holdings LLC”.  If the offer is accepted, the investor immediately faxes in his LLC articles of organization and creates the company to match the Buyer on the purchase agreement.

From there the investor finds his end buyer and they agree that on closing day the end buyer will purchase the entire LLC from the original investor for the amount of the wholesale fee.  From there, as the new owner of the LLC, the end buyer is empowered to close on the original transaction and purchase the property.

Pros:
The upside to this method is that you workaround the extra costs in the form of transfer taxes and/or Flash Funding fees that come with the two Double-Close methods, and for those who are concerned about guarding their privacy, your name never goes on the deal.

Cons:
The major obstacle to this one is that the end buyer has to pretty much be paying cash.  Banks do not loan traditional mortgages (either to owner occupants or investors) in company names.  You have to buy it in your own personal name to get a mortgage.  Other concerns are that if you do this often enough you may attract the attention of state regulators who are confused as to why you start and sell 5-10 LLCs each month.

These four major methods are pretty much all an investor needs to know in order to start wholesaling bank owned REO foreclosures.  None of these methods require the wholesaler to bring his or her own cash into play other than the initial earnest money deposit and none require a credit check.  One of them will work for pretty much any situation, whether the end buyer is paying cash or getting financing enabling you to earn large checks on a consistent basis by wholesaling REO foreclosure properties .

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Brian Kurtz is a real estate investor and licensed Realtor actively involved in investing in the Michigan Real Estate Market.  His video blog which shows others how to achieve success in real estate investing is located at: –>

http://www.PremierRealEstateInvesting.com

Investing In Real Estate With Your IRA

Using your self-directed IRA to invest in real estate is becoming more and more popular with the recent and continued stock market declines.

With properties at all-time lows and able to cashflow between $300 & $500 per month, it’s a smart place to be.

Watch this episode and learn more about the benefits of this approach.

Twitter for Real Estate Investors

Unless you’ve been hiding under a rock you’ve probably heard someone enthusiastically talk about Twitter.  You many know that it is a "Web 2.0 Social Media" thingy.  You may also have made the mistake of writing Twitter off as simply being the "next MySpace" and being of interest only to Text-Message obsessed teens.

I have to admit that until I discovered that some very smart people that I know were using Twitter, I thought it was a total waste of time.  Boy was I wrong.

Watch this video to see exactly WHY Twitter is a great relatinship buiding tool, and keep watching all the videos in this series to learn how you can incorporate it into your Real Estate Investing Business.

The Truth About “Getting Rich”

Recently I’ve come across a SLEW of articles, books, and advice that pressures people to find ways to trim little things our of their life (like Starbucks) and to save that money and invest it for their financial future.

Now I’m all about saving, but it is my firm belief that if you are living pay-check to pay-check (esp if you have a family) that it is almost impossible to "save" your way to financial freedom.

The reason for this that the experts don’t talk about is something that I call the "Transmission Factor" .  What is the Transmission Factor?  You’ll have to watch the video to find out.

The Secret Source

One of the problems that investors are running in to is that it is VERY hard to get conventional funding on investment properties without ridiculously large down payments.  It doesn’t matter if you have stellar credit or not.

Being a cash investor doesn’t help much either.  Even those with cash have limited amounts of it so when you have to put 20-30% down on each and every property and cannot get those funds back out to buy the next one for a year, your ability to buy many homes is chop-blocked.

I recently discovered a loophole that enables those with exceptionally good credit to be able to invest in properties using No-Money-Down "Hybrid" Conventional Financing!  I’m christening this method as my "Secret Funding Source" and will be revealing it in detail in a separate video series due out soon.

If you are on our Priority Email List then you’ll be notified when it goes live.  If you are NOT on the list then you should sign up at http://www.TheWholesaleHotList.com or just enter your information in the signup form to the right.

Lines of Credit

Access to revolving lines of credit can be a great way to fund your real estate investing purchases.

With access to enough credit, you can purchase "cheap" homes without applying for a mortgage. Simply draw down the funds from your credit line in order to fund the purchase and/or rehab costs.

A Home Equity Line of Credit (HELOC) or Unsecured Business Lines of Credit are the two main sources of credit lines that are primarily used by real estate investors.

While a HELOC can be set up at your local bank very easily, setting up Unsecured Business Lines of credit can be a little more tricky.

My partner and I purchased an inexpensive course to learn how to do this properly. You can learn more about it by clicking the link below:
http://www.geteasybusinesslinesofcredit.com/

Pros:

Home Equity Lines of Creidt (HELOCs)
Ease of Access - setting up HELOC lines has been a favorite lending medium of banks for the last few years.  Business is still rather competitive for HELOC customers such as yourself among lending instituions.  The "Credit Crunch" has taken  toll on the HELOC market as well, but not as much as other lending avenues.  Many banks have cut back large $300k - $400k available balances down significantly in an effort to  bring things in line with today’s values, but if you are not looking for major credit source like that and you have descent credit, tapping the equity in your home should still be an easy avenue.

Tax Benefits - many homeowners glean tax advantages from the interest paid out on HELOC loans.  This varies from person to person on each individual situation, and it is usually best to consult  a tax professional if this is a something you want to be able to count on.

Unsecured Business Lines of Credit

These types of credit lines do NOT report on your personal credit profile.  Thus their usage does not impact your personal credit score.  And because they do not show up on your personal credit profile, it is possible to assemble many of them at one time in order to build your own "Mini-Bank" for investing in real estate.

They can also be set up rather quickly.  Usually within a few weeks of establishing a new LLC or Corporate entity.

Again, to do this properly you may want to check out the course by Thomas Kish before charging forward in an unorganized search for funds.

Cons:

HELOCs
The single largest disadvantage to investing in real estate with HELOC funding is that you need to actually own a home with equity!

If you’ve got that base covered then the other major disadvantage is that a HELOC shows as a revolving line of credit on your personal credit profile.

Regardless of that fact that payments are made on time, the scoring models consider such activity "higher risk" for personal profiles (not so with business profiles) and can cause a point drop.

If you are the type that worship your credit score, checking it on a weekly basis, and feel that your score is a personal reflection on you yourself, then you may wish to use Unsecured Business Lines of Credit, Hard Money, or Private Money to fund you real estate deals.

Getting approved for a HELOC also require a credit appication, and if you have a poor score, getting approved for one may be tricky.

Unsecured Business Lines of Credit

Again, the only real disadvantage to using Unsecured Business Lines of Credit is that there is a proper way to go about applying for them.  If you take the proper steps, then getting access to Other-Peoples-Money (OPM) using this resource is a snap.  But if you do it the wrong way, you’ll find yourself a bit frustrated.

The good news is that you can lean how to handle the upfront process of getting you access to up to $250,000 in Business Credit, which does not report on your personal credit report, in only a matter of weeks.  Click here to find out how.

Seller Financing

Seller financing is a great way to buy your next real estate investment property…if you can find a seller willing to sell to you on owner-financing.

Most sellers are afraid of selling to someone who may or may not actually keep their end of the bargain.  After all, if they sell a fixer-upper to you on owner financing with a low down payment and you start fixing up the place and decide that you don’t like this whole "real estate thing" after all…they are stuck getting the place back again.

Buying on owner-financing from traditional homeowners is like trying to find a needle in a haystack these days too because pretty much everyone owes too much on their home.  So finding sellers that are willing to work with you and actually have a house that you can make money on is rare indeed.

The good news is that we make many of the hot properties avaiable on The Wholesale Hot List available with owner financing!  So with a small down payment you can be on your way to real estate success regardless of your credit, income, or other factors.

Pros:
Very flexible. If you find a seller willing to work with you, the details are hashed out between you and the seller directly. This method is very fast too.  Pretty much as soon as paperwork can be drafted and you can supply a check is how long it takes for keys to change hands and get you in business on a new property.

Cons:
Rare.  Between the lack of equity most sellers are faced with and the fact that there are very few investors like us who will buy a property then wholesale it on terms vs. cash makes the number of deals you can buy this way severely limited.  So count yourself among the lucky few that have a direct line to properties that can be bought week-in and week-out this way.

Private Money

Private money is the "Brass Ring" of all real estate investment financing.  When one person loans money to another person directly, they are making a Private Money Loan.  So if your rich Uncle Joe gives you $65,000 to buy a house and fix it up, and he takes back a mortgage on a home, you have just entered the realm of Private Money.

It is also known as "Relationship Lending" because most private lenders loan to people they know personally or have come to know over time.

Pros:
Ultimately flexible.  The terms of the loan are forged directly between you and your lender.  You can set payments up however you want.  You can set up the interest rate however you want.  You can get the loan taken care of without a formal appraisal.  You can get the funds in a matter of days (if not the same day) from the time it’s requested.

Cons:
Because it’s relationship based, you need to actually talk to REAL PEOPLE, explain what you are doing, and ask them if they want to get involved or not.  For many people this is a big barrier.  They’d rather borrow from a faceless bank like First Franklin than ask someone they know to loan them $100,000.

Also, Private Money is limited to the amount of funds the private lender has available.  Not everyone has $250,000 in cash sitting around waiting for you to come around and borrow it and put it to work for them.  Some only have $25,000 or $50,000 and you need to match the funds committed to a deal that you bring online.

Basics of Real Estate Investment Funding

In this video series entitled "Funding Fundamentals" I’m going to go through the 7 major sources of investment funding that you can use to build your real estate investment  empire.

As we go through the various sources you’ll see that some are more attractive than others.  As we focus in on each them I’ll point out the pros and cons of each funding method.

While you watch each of the videos in the series, try to keep an open mind and ask "How can I make this funding source work for me?"  Don’t forget that you can often "combo" up the different methods in order to achieve your goals.

Once you are done with this video series you’ll know without a shadow of a doubt that if you REALLY want to take advantage of the ultra-low prices on investment properties available today you can find all the money that you need to buy as many houses as you want.