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From Foreclosure to Forbearance - The Art of Negotiation
As an active real estate investor you probably already know that the most important phase of your investment is when you buy the property. Most of us are getting the bargains in the foreclosure market. You will agree with me that the best time to buy is before the actual foreclosure. This is commonly known as pre-foreclosure. If you ever found yourself in the heat of a foreclosure auction you would agree that this is not the situation you want to be in. To get into the pre-foreclosure market you need to have quick access to all kind of information. You can imagine that there's a huge competition in the pre-foreclosure market. Everybody wants a piece of the pie and the bigger the pie gets the more people want a piece. We are looking at a tidal wave of new foreclosures within the next 1-3 years. I'm talking about all the interest only mortgages and special mortgages that enabled homebuyers to get more house than they actually can afford. These loans are converting into higher interest loans or fixed rate loans. Either way these folks will be looking at about a 40% higher mortgage payment each month. For most families this will be disastrous. That's why I predict a tidal wave of foreclosures. As a real estate investor you might say "great", but in reality it will kill your business. Residential real estate is typically appraised through the recent sales comparison method. This means that the value of your home depends on how the market works in your area. As an example; you just bought a bargain foreclosure home in a nice sub division. There are a total of 50 homes in this development. You got the house for 30% under market value. Now your purchase price will be factored in into the comparison model for the next appraisal. In itself this is not a big deal. A small percentage of under market deals will not spoil the market for the next regular sale. Imagine that instead of 1 or 2 foreclosure deals all a sudden 5 or 10 foreclosures happen. If you were the first to buy a foreclosure in this development you're looking at financial challenge. Your so called bargain buy represents the new lower market value. Actually you're lucky if you do not own an overpriced piece of investment real estate. So, watch out for the tidal wave. There's a better way to deal with foreclosures. This requires a little bit of negotiation skills and a sincere motivation to help other people. This is called Forbearance. What does this mean? It means that you will be in the business to help people to avoid foreclosure and if you're successful you will charge a fee for your services. Forbearance is much more than just a form of charity. You will actually cash in on both sides of the foreclosure process. You will earn a fee for helping distressed homeowners and if you fail to stop foreclosure you will have a first hand bid on buying the property. But your first and most important goal is always to help the homeowner to keep their property. If you don't set this as your primary business mission you will be out of business in no time. If you fail to build a circle of trust you will have no business. Most real estate investors I know tell me that they are rather take the big checks once in a while than working in a regular base on a fee based business. If you're related to Donald Trump, go for it. If not, you will have a huge cash flow problem at hand. With a Forbearance business you will have control over your cash flow. By simply calculating how much money you need to pay your bills you can calculate how many deals you need to do to cover these expenses. Let's say you need $8,000 a month to cover your living costs. At a fee rate of $1000 per Forbearance case, you need just 8 cases per month or 2 per week. The Forbearance business is a full time business. There's simply no way that you can negotiate with lenders after hours. Also you need to be flexible to talk to homeowners during evening hours and weekends. Although it doesn't take a lot of time to work on a single case it takes a lot of commitment to run this business. A homeowner trusts you to save his home and you don't want to disappoint him. So why would you step into this business? Again it's all in the cash flow. Investing in real estate is fun, but these big checks are just not happening every day. You need to pay your bills and support your family. Forbearance allows you to do exactly that; generating cash flow. You will have enough time at hand to hunt for great real estate deals. So you get the steady income plus the big checks once in while. I think this is a great real estate business model and worthwhile to spend more time researching. Some states regulate the Forbearance business and some actually have laws in place that don't allow you to charge for offering a service like this. Do your homework before you start and make sure that you have a good working relationship with a real estate attorney. You don't want to start this business without a real estate attorney. Sincerely, Peter Dobler is a 20+ year veteran in the IT business. He is an active Real Estate Investor and a successful Internet business owner.Learn more about foreclosure investments at http://www.suncoastrenttoown.com/foreclosuresdaily or send a blank email to mailto:suncoastrenttoown@getresponse.com
MORE RESOURCES: Elon Musk Warns Of A Real Estate Crash: Our Approach Seeking Alpha Signature Bank's New York Real-Estate Problem National Review 8 Best Places to Live in Texas, According to Real Estate Experts Travel + Leisure Eight Must Reads for Real Estate Investors Today (March 28, 2023) Wealth Management Michael Saunders makes top 500 real estate ranking Your Observer Next Dor: From Fashion to Real Estate | Detroit Jewish News The Jewish News The Top Real Estate Companies in Georgia Real Estate Crescent Real Estate exec heads to West Dallas investor The Dallas Morning News GFP Real Estate Signs Eight New Leases Totaling 13291 SF at 209 ... Real Estate Weekly Real Estate Transfers (Week of March 27) Times Bulletin How do real estate agents get paid? Stephanie Jones tells us what we need to know when buying a home WLUC Cottage real estate rush slows to a stall Financial Post Island real estate transactions - 03-29-2023 The Anna Maria Islander Plan B Investments Buys 70 Property Portfolio from Trei Real Estate Sovereign Wealth Fund Institute Mignon Lagatta Real Estate purchases Reno building | Serving ... Northern Nevada Business Weekly Commercial real estate firm, agents and staff recognized by parent ... Greater Wilmington Business Journal Real estate market hits seasonal slowdown in Capital Region The Saratogian Real Estate: March 13 – March 17 Newport This Week Private equity real estate firm acquires St. Mary’s County shopping ... Maryland Daily Record Market Turmoil Slows Momentum for Real Estate Interval Funds Wealth Management Acento Real Estate Partners Buys DC-Area Apartments Multi-Housing News Real estate, utilities ETFs see outflows; crypto products lure inflows ... Pensions & Investments Forren retiring from West Virginia Real Estate Commission post Parkersburg News Wilton Real Estate Report (March 17-23, 2023): Five Properties ... Good Morning Wilton HOT PROPERTIES: 79-acre site along I-185 sold GSA Business Real estate plans from candidates Brandon Johnson, Paul Vallas Crain's Chicago Business Real Estate Experts Rank TOP 8 Texas Cities To Live In 2023 Traveling Lifestyle Real estate developer Robert Rosenberg, who died Friday, had ... Greater Wilmington Business Journal Public Records: Muskingum County Real Estate Transfers Zanesville Times Recorder Prairie Land REALTORS® partners with MLS Grid to manage real estate data feeds, standardize vendor licensing Yahoo Finance Real estate professionals crucial to helping sell home Cleveland Jewish News Sheppard Mullin Lands Five-Attorney Real Estate Team Business Wire Tedisco Helps Open New Mechanicville Real Estate Firm The New York State Senate In Duluth, Real Estate Collides With Climate The New York Times 2023 Distinguished Real Estate Award University of Cincinnati State of Federal Real Estate | Transportation and Infrastructure ... The House Committee on Transportation and Infrastructure Link Real Estate Investment Trust : REIT's Rights Issue is 240% Subscribed Marketscreener.com REAL ESTATE | DPW crews rehab salt shed in Hartford, WI | By ... washingtoncountyinsider.com Delray dream run real estate professional Pecotic set to achieve dream by combining work with tennis, sets goal of playing 25 tournaments this year TennisUpToDate.com City Likely to Settle with Ex-Real Estate Adviser For $9.4M Voice of San Diego Bridgemarq Real Estate Services Files Management Information Circular and Annual Report Marketscreener.com Tahoe real estate TV show to launch in April Tahoe Daily Tribune Former Tampa Area Real Estate Professional Sentenced To 24 ... Department of Justice Estate Mogul Tied to SF Scandal Buys $15M home The Real Deal Routt County real estate sales eclipse $12.5M from March 17-23 Steamboat Pilot & Today School of Business Launches Online Real Estate Development ... Montclaire News How the Banking Crisis Could Hurt Real Estate Lending Knowledge@Wharton Real estate market appears to be stabilizing Addison County Independent This One Rookie Homebuyer Move Drives Real Estate Agents Crazy Realtor.com News |
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