Archive for June, 2008
Carry Paper, Carry the Market - Seller Financing Can Soften the Housing Crisis
June 17th, 2008 categories: Real Estate News, Seller Financing
Below you’ll find a few snippets of just-released, juicy information that sound fairly bearish, but there is opportunity everywhere. Sellers and buyers can adapt to the current climate and still get the benefits of buying and selling property. Seller financing (carrying paper, seller carry back) figures beautifully into the equation.
- Housing starts have fallen to their lowest level in 17 years, a 3.3% decline from April and a 32% crash from this time last
year - Starts on single-family homes fell 1%, to a 17-year low
- Building permit applications declined, down 1.3%
- Builder confidence has fallen to a record low. The National Association of Home Builders/Wells Fargo housing market index has sunk to a score of 18
- U.S. mortgage rates are currently at an eight-month high
- According to Freddie Mac, the average 30-year fixed-rate mortgage is 6.3%
- “Mortgage rates jumped this week after a number of Federal Reserve officials… expressed concern over a threat of inflation,” said Frank Nothaft, Freddie Mac VP and chief economist. “This led some market participants to believe that the Fed will raise rates more aggressively over the year than previously thought.”
If you’ve been following me at all, you know that my passion is putting win-win deals together without bank financing. This will provide liquidity, support prices and help both buyers and sellers get the benefits that they’re looking for, regardless of market conditions.
What if a seller can get top dollar by offering terms and close in 21 days or less instead of languishing on the market and expiring unsold?
What if a buyer can acquire a home or investment for his family without the hassle and expense of dealing with an ailing mortgage industry?
What if taking a fresh and innovative approach can take a deal that is falling out of escrow and throw it back in?
What if someone who just needs out of their mortgage can walk away without foreclosure or short sale?
The “bad” news I reported above can make you depressed and worried, or you can trust that the answers are out there and get excited about the possibilities. I hope for the latter.
- I want to carry paper, please help me create a valuable note
- If I Carry Paper, How Much Will I Get Each Month?
- How Much Will You Pay for My Note?
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Related Reading:
- Seller Financing Explodes As More Owners Become Willing to Carry Paper
- What You Don’t Know About Notes Can Cost You Listings, Sales and Closed Escrows!
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Inaugural Meeting of the Naked Lady Real Estate Investors Club a Raging Success!
June 16th, 2008 categories: Seller Financing
These are really exciting times in real estate, especially if you’re an investor. I learned so much and was very inspired by the things I heard at the kick off meeting of a brand new RE Club: Naked Real Estate Investors Club. Rosie Nieto is launching a whole new way to run a club. In her own words:
“You guys, I’m gonna try and do the impossible with my club . . .
I want to create a club that is a true, educational, networking, deal-making, friendship-making environment without all the hype, without all the sales-y, pitchy poo, crap that we have to suffer through in order to continue our education and networking in this industry.
I heard Bruce Norris say the most incredible thing a couple months back and it resonates with what I am determined to accomplish here. When he first started presenting, there was a man who he thought of as a mentor that showed up at his first several speaking engagements. He didn’t really know why he was there, but he supposed that the man was just trying to support someone who was doing an honorable service to the industry. THAT’S IT!
This is what I am setting out to do. I can’t stand the BS that is being feed to all of us investors by some events and gurus. We are here to be of service to others and to: “Support Those Who Are Doing an Honorable Service to the Real Estate Industry.”
I absolutely love Rosie . . . she is such a delight. Not only is she fun and crazy and committed to learning, but she has the heart of a lion. Integrity saturates her flesh, right down to the bone. She truly cares about people, and is dedicated to avoiding the exploitation of novice investors. She had these successful, down-to-earth successful investors at her meeting: Tony Alvarez, Mike Cantu, and Bruce Norris.
I’m thinking that between now and the end of 2009 will be prime time to adopt a buy-and-hold mentality. My own personal goal is to pick up at least 6 properties (maybe more) that will stay in my family’s wealth portfolio long term. One down, 5 to go . . .
If you’re serious about learning strategies to help you take advantage of this real estate market, tap in and stay tuned to what is happening at the Naked REIC: The Bare Truth About Real Estate Investing.
Her personal blog is also a great resource
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Seller Financing and Drinking Wine in Pasadena
June 13th, 2008 categories: Seller Financing
I know wine goes well with a lot of things like cheese, crackers, fruit, dark chocolate, love . . . it’s just that I didn’t know it
went well with a nice chat about seller financing. And actually, the more wine you drink, the better the conversation gets and the more brilliant you feel . . . that nice fuzzy feeling of, “Wow, we’ve really shared a nice connection here . . .”
Last night I attended a wine tasting event put on by the PFAR Charitable Foundation (Pasadena-Foothill Association of Realtors). The evening couldn’t have been more beautiful as we watched the day fade over the Brookside Golf Course from the back yard of one of Pasadena’s highly desirable homes.
I was all dressed up, and if I hadn’t spent the evening sinking into the lawn with my stiletto heels, I’d have almost felt sophisticated.
I ended up being able to catch up with some people I haven’t seen in a while, and had some nice conversations that I really didn’t expect. Even just a couple of years ago, I couldn’t seem to hit a single chord of resonance in this type of crowd when I would talk about notes, seller financing, carrying paper, creative financing. I’d usually get a sort of disinterested stare and I imagined them thinking, “This one needs to get locked up.”
But as it turned out, I had more than one conversation last night where we were on the same page. It was nice.
One mortgage broker was interested because he owns some apartment units and would like to buy the ones next door, but the owner doesn’t want the capital gains hit, and doesn’t want to exchange into any more property. He owns it free and clear.
The broker got very excited when I told him that the installment sale was a perfect solution, and that I’d be happy to come in as a consultant to facilitate the deal coming together. The broker can put 20% down, so the seller can safely carry the balance in a first deed of trust.
And, he should be happy to do this when he realizes that the installment sale lets him defer capital gains. He’ll only pay on the principal he receives in any given year. The rest of his money sits in the property working for him, and collecting payments on a note is easier than managing property and paying property taxes and insurance.
It’ll be fun to meet with him next week. Helping people put or keep deals together by thinking outside the box is one of my all-time favorite things.
Related Reading:
- Become the Bank on Your Own Property and Kiss Your Hassles Good-Bye!
- What You Don’t Know About Notes Can Cost You Listings, Sales and Closed Escrows
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