My reason for this is there are just too many foreclosures and short sales out there!!

I know this is a good thing for investors, but for regular buyers it is kind of turning out to be a bad thing. Why? Because most of the properties out there needs work and regular buyers are not willing to do the work. They want something they can just move right into.

Especially if they are FHA buyers. Who wants to deal with a 203K loan having to wait months for a contractor to do some work, the bank inspecting the work, then rinse and repeat a couple of times until the job is finished? Mostly no one and I don’t blame them!

What these buyers are failing to realize is that they are getting a good house at a great price. Most of these deals don’t need that much work. Just a little cosmetic repairs and voila! you will have a beautiful home.

Of course we investors are jumping at the opportunity to get to these homes for dirt cheap prices but I try to get regular buyers on these shorts and am having a difficult time.

On the contrary though…

I have received many text messages and phone calls from wholesalers and bird watchers asking if I have any properties. Although my property inventory is down, I can see myself making a lot of money this summer.

If I can just get my hands on a good hard money lender then I will definitely be okay.  Especially since NJ has just passed a new law giving first time home buyers who buy in this state a $15,000 tax credit.

Yes you heard right. Although the federal government has expired their tax credit, NJ has implemented their own.

This means many more people will be calling me for inventory that I do not have

If you have not heard the news, but you are in the NJ area for investing then you might want to check out this article.

http://activerain.com/blogsview/1679835/new-jersey-assembly-approves-2010-tax-credit-for-home-buyers

It may mean more money for you as well.

This is what happened.

I have a construction company that was doing work on the dentist’s son’s house (who is a doctor by the way). And the dentist saw our work and wanted us to do some things to his house as well.

He lives in Staten Island NY and we are based here in the Newark NJ area. Anyway one day the dentist tells my project manager that he was ready to buy a house that could be flipped basically.  So of course the manager told him about me and what I do.

The doctor told him to give me his number and for me to call.

Immediately I thought to myself this is going to be a waste of time because a hard money lender could go anywhere to get this done, so I didn’t call for the first week.

My project manager told me the following week that he was waiting for my call. By this time I figured well maybe he’s motivated if he keeps asking about my calling so I gave him a call.

Long story short, he seemed very anxious and motivated and he made an appointment to meet with me in Jersey.

We met up and the meeting was only for about twenty minutes. So now I’m thinking “wow, he is really motivated since he drove about a half an hour to come here only for a fifteen to twenty minute visit“.

In the meeting he informed me that he didn’t want to purchase for himself. He actually wanted me to purchase and do what I do but he would fund the deal. He was only interested in becoming a hard money lender, not an investor.

Seriously? I thought. Well I need to move quick before he changes his mind.

The following week was actually a holiday week so it took me two weeks to find a good deal for him to fund.

Then it happened.

I called and he said he would call me back but I received no returned phone call. Then I had the project manager call and he said he got no answer or return call.

So after waiting a couple of days, I decided I would call him today.

I asked if he changed his mind because my time is valuable and I don’t want to waste it if he was not serious about being a hard money lender and he hit me with “I have a pending deal with someone in Brooklyn. If it doesn’t work out I will call you back.”

For real? Did he really have me waste my time?

Because of the person I am I probably will not answer the call if that deal falls through because he already wasted like two weeks of my time already. Hard money lender or not, I have no time for games.

How crazy is it to lose a hard money lender before you even got ‘em even after he came to you?

They denied my first short sale offer of $110,000 without informing me at all. I did not know it was denied until February 2010. I gave them this much time because they always tell me they need 30 days for the negotiator to get back.

However, they never got back.

Anyway, once they informed me that it was denied due to an unacceptable offer, I countered at $120,000. Again this was in February. It took them about two weeks to tell me the file was in their system.

Now, the negotiator did get back to me on the 30th day after the file hit the system, and all she did was asked me what was the realtor’s commission and if there was a second.

I responded via email as she asked. It then took her 13 days to get back to me and when she did, it was another denial.

This wouldn’t have been so bad except the Sheriff Sale was on April 28th 2010 and she gave me the denial on April 26th.

Now if you ask me it seems like it was done that way intentionally.

I resubmitted another short sale offer for $135,000 on April 27th.

Then I had to go to the lawyer the next day (April 28th, the sale day) so he can write a letter where he and the owner gave me permission to postpone the sale.

I went down to Union County Sheriff’s Department and postponed it for two weeks. In NJ, you get either two 2 week adjournments or one 30 day adjournment.

Obviously I should have went for the 30 day adjournment because as I was calling on the counter, I was getting no where as the negotiator never even looked at it.

Everyone kept giving me the information on the $120,000 offer and I had to keep telling them there was a counter on the very next day.

Needless to say, I was told that they could not pause the foreclosure as the offer was given within 15 days of the sale date.

How is that so, if I’ve been doing this since February?

At any rate, the next sale date was today May 12, 2010 and again I had to go postpone it. This made the sale date May 26th. Now this even furthers the time frame from when I submitted the counter offer to the date of sale, but whatever.

I wasn’t going to even bother with the postponement but  did it anyway.

I am going to see what they have to say now. If they continue to be reluctant then I am just going to attend the auction and see if I can get something else.

Or, I may just wait till the property hits the REO list and get it from there for less.

I’ll keep you posted.

In fact, I just went to one that was conducted by American Foreclosures on Sunday, May 2, 2010.

The founder, Craig Laube, discussed how he came about with the idea of the company.

He gave a timeline about his being a struggling realtor, who then learned how to get the lis pendens from the courthouse in Trenton NJ.

He then started selling the lists to other realtors and the snowball basically grew from there.

He now owns websites that give you a list of foreclosures in your town, Americanforeclosures.com as well as a couple of lis pendens sites, NJlispendens.com, NYlispendens.com and Phillylispendens.com.

For a membership fee, you will have access to updated pre-foreclosure lists in NY, NJ and Philly.

They seminar basically informed you about foreclosures, preforeclosures, and shortsales.

There were different specialists for each criteria, including their own title company, Sheriff Sale Auctions specialists and more.

My purpose for going was not only to learn a little more if possible, but also to network. Unfortunately, I was only able to stay for an hour and a half and it ran from 10:00am – 5:00pm. I didn’t get there until 12:30pm and left around 2:00pm.

However, there weren’t many people there. I thought the seminar would be packed, but it was like maybe…

…15 people there that were not part of the organizers so I was a little disappointed.

It didn’t make matters any better that I had to go get my daughter but it is what it is.

They were selling a packet, but never gave the price. I guess you had to go to the desk where the packets were to get the price even though he gave you a whole run down of what was in it and what it was worth on a slide show.

They were also pushing a course that was given by the short sale specialist, but I didn’t stay long enough to hear about that.

Anyway, I say this to say that it is always good to attend seminars even if you feel that you know all you need to know about foreclosures.

If not to meet other investors, bankers, etc but to learn a little something that you didn’t already know.

What did I learn? Well I learned about the above websites and feel that they are very useful if you cannot go to your town hall and get the information yourself. Although you can get the information yourself, it is very tedious and you do have to pay for each lis penden you get (at least in Essex County, NJ).

P.S. I have no affiliation with American Foreclosures or their affiliates in any way.

… I advise that you sell your home in a short sale rather than do a loan modification or a foreclosure. However, there is even a downfall to doing a short sale.

Here is what I decided. I am going to list the positives and negatives for each of the above options and I guess you can decide which works best for you.

LOAN MODIFICATION

Pros:

• You get to keep your home
• Your monthly mortgage payment will be lower

Cons:

• The bank usually asks for a substantial downpayment
• You will still owe the bank more than what the house is worth

FORECLOSURE

Pros:

• You will no longer have the bank hassling you about a payment
• You will no longer have to deal with obnoxious tenants (if applicable)

Cons:

• You will have a negative blemish on your credit
• You will have problems buying a home for at least 3 years

SHORT SALE

Pros:

• You can negotiate that an investor pays you to take over your home
• You will not have a foreclosure on your credit report

Cons:

• The bank can come after you for the balance that was written off due to the short sale
• You may have to pay taxes on the loss amount (loan amount minus short sale price=loss amount)

These are the pros and cons to each one and I guess it is up to you to decide what works best for your and your family’s needs.

Because they do not have the credit.

Well let me say this. Credit is the least of your worries.

If you have a job that pays well and you can afford the mortgage along with your other bills, then you are 3/4 past the battle.

Credit is something that can be fixed. There is no need to pay astronomical payments to get it done neither.

If you have no credit, then that is probably even better. There is no negotiating to get your payments down and all those other hassles.

All that needs to be done is for you to get yourself a couple of prepaid cards that report to the 3 main credit bureaus. Maybe you can add some electric and gas services in your name where you are living now and make sure you pay your bills on time. If you were not doing that before, then make sure you start the moment you get your cards.

Why rent when you can buy? The same amount that you are paying in rent is what you would pay to own your own home.

Right now, you are paying someone else mortgage for them to have something to call their own. Why wouldn’t you do that for yourself.

With the prices of homes at a low, you can get a three family, live in one of the apartments for free, assuming the other two units are rented, and still may have a profit left over, depending on how you play your cards.

I do not see any substantial reason why people would rent when they can buy other than fear. Fear of excelling and getting out of the rat race.

You either get one or the other.

I am finding buyers willing to buy but having horrible credit that may take at least six months to a year to repair. Or I am getting people with good credit, but no job or a job that pays very little and they therefore cannot afford a mortgage.

When I do find someone with good credit and a good job, they want to do my job instead of just buying a nice home for themselves.

Everyone thinks they can purchase a home and do the repairs themselves, but if that was the case, then why did they come to me in the first place.

It is crazy!

They look at the income that can be made and feel that they can just jump right in. Not realizing that this takes time, patience, and know-how when it comes to buying foreclosures that need total rehab.

I have been in the game since 1999 and I still do not like having to do total repairs. It is just too much of a headache and hassle.

I came up with a couple of tips to try to find good qualified buyers:

Craigslist
Local Newspaper
Word of Mouth
Flyers
Signs

Because we are in the world of the internet, we are getting away from the “old school” way of advertising.

Word of mouth, flyers and signs are the still my most effective way of advertising.

I get a couple of hits from Craigslist and I personally don’t really bother with the newspaper because it costs over $100 to advertise in the Newark Star Ledger on Sundays, which is the best day. However, it still proves highly effective for other investors.

Whatever method you choose to use, you have to remember you are always going to get some people who are just “window shopping”, but you can see them for who they are immediately.

It is your decision if you want to continue the conversation with them or not. I always do!

I never turn anyone away because they can become future clients. I offer them assistance to repair their credit and or I just let them know that when they are ready, they can save my number and I will assist them later.

I advise you to do the same as you never know, they may know someone who is looking to buy or sell and they can then refer that person to you.

As a result, that person may have just found you a good buyer.

Well I am preaching that you should never procrastinate in real estate. If you do not make moves then guess what? You will not make any money.

It is very easy to tell yourself that you cannot make it. This then becomes the excuse for you not going forward and just doing something to put you one step closer to getting and closing a deal.

You have convinced yourself that you will never be able to make a dime because you do not have any money to start.

I know the feeling because I had that same thought when I first started.

I had $500 and bought the Carlton Sheets package and after reading and listening to it, I told myself that the no money down methods that he taught would not work in New Jersey. Therefore, convincing myself that I needed money to get started.

Although I started making calls, I was not fully confident until I had some money. I am not going to lie. I waited until I got some money before I purchased my second property.

It really wasn’t until I bought a couple of properties using my own money and credit before I learned the no money or credit techniques actually work.

And those techniques were learned through experience and information from the streets, not from what I learned through Carlton Sheets.

Anyway, I say all this to tell you that you can and will make money with no money down and any other way. You have to be in it to win it!

Get out there and do something! Make some phone calls! Talk to people! Do anything you can to give yourself a confidence booster.

Once you make the initial contact, the rest will come like second nature. It really is just the first phone call that is scary.

After you hear the voice of a pleasant person on the other end, even if they are rejecting your offer, you will realize that it is not that bad.

Be like Nike, Just Do It!

The main reason for this is that when people first decide that they want to be real estate investors, they go in looking at properties from a personal level.

They look at a property and decide that they are going to change the home and fix it up to look like something they would live in.

This is a bad move!

When fixing up a property rehab you must remember that you are going to either do one of two things:

1. Keep it
2. Sell it

If you keep it, then you are going to rent it out to people who have no financial interest in the property.

Therefore, you have to make decisions based on what you are willing to lose. When purchasing materials, always think of the worse and look for the best.

Assume that the tenant will destroy the item. Therefore I would advise for you not to purchase expensive items.

Don’t buy the cheapest neither. I would probably go with next to the cheapest.

In some instances you can get good quality for a cheap price. These are the items you are looking for.

If you are going to sell it, then you need to keep in mind that the new owner can always upgrade or that they themselves may just want to rent it out.

In any case don’t overdo it.