Buyers Market Business
With high foreclosures in the country & a buyers market & the high GAS!!!
I want to start a business where I buy from this high inventory of houses.
Rent them to people who need nice homes to live in.
I quess this would be a rental housing business.
Does anyone know & have any advice on what I should do. Do I get my Business plan & go to a bank, interest rates are very low. How should I do this & does anyone know of any other business that got started and is doing this? Any business names or their stories of how they got started would be great. Thanks
Chris has outlined the plan... many of us have done this for the past several years, getting really cheap money. However we are at the tail end of the cycle. Conventional Banks are tight lenders right now. A minimum 720 FICO is now the norm for NOO property financing. Stated income loans are very hard to find above 65% LTV. FNMA restricts investors to 4 loans as of August 1.
So in step #4, go to the smallest local (commercial) lenders first, and try to get a foot in the door. Very few residential lenders service their own loans, most require following FNMA guidelines. Better is to find a private lender who can fund you. The difficulty is getting low rates to make solid cash flow.
Another option when you exceed FNMA limits is to bring in a "credit partner" and borrow for the next set of houses in their name.
Chris
Chris, you have a great set-up there. I do not yet have the equivalent of your mother in law.
I would like to do something similar, but with my potential funding partner not at the trust level that you have, I need to get an equitable process defined to make this work for my scenario.
This is very good stuff
Real Estate business is good idea but require lots of money and information.
[addsig]
Are they not obligated to perform? If they are in breach of contract, you may require (depending on state?) that they "perform" (e.g. sell) per the contract... although for REO they usually have weasel clauses, just like REI often do
The last two FNMAs that I closed in August went smooth as silk. LAs and Closing attorneys were organized and easy to communicate with. Even returned calls promptly.
Shoulda known it was too good to last.
A lot of the deals in my Real Estate office are on hold or dead becase of this.
My free and clear listings are going under contract quickly[ Edited by Turnerg1 on Date 10/12/2010 ]
Our short sales are still closing as well as our REO purchases.
When we spoke to Chase on one of our files about it they said it was a lot of posturing but in their office it was "business as usual".
We have an attorney speaking tonight who has been able to revoke a number of trust deeds on property based on breaches of federal statute. IT should be interesting,
If you are in town stop by at 6:30 www.slreia.com
I think that the banks will try and get through legislation that protects them from their dirty tricks but hopefully clear minded politicians will protect the people and not the lender servicer.
We found out that several of our clients have notes serviced by Wells and the note holder is actually in Hong Kong or Germany!
[addsig]
I really believe Fannie Mae is trying to honor contracts. An update, per late afternoon 10/15/2010: I have a new closing date... only delays closing 3 or so weeks so not a big deal for my case. May be a problem for financed transactions if the postponement pushes closing over the loan commitment date. My guess is FNMA would help as best they can. The funny thing is the single page paper I have to sign. Dated simply "Jan 2010" at the bottom, with REO# at the top, it has 2 boxes checked: EXTENSION OF CLOSING DATE and OTHER, with Extension required due to affidavit issues. under OTHER. There is no form number and minimal other text. Interesting.
I had a trustee try to delay the final papers from an upset bid auction. And I already have the property deeded to me! Thankfully I was able to convince her to call around, I need those final papers to start the civil process (eviction) on former homeowners.
I think a lot of this is just salaried workers trying to take a break and making things up as they go blaming it on "the news"
Just an update, the property was released in December and I closed right before Christmas. We had to make a new contract but with the same terms. Good thing I still had the cash!
Great, glad it worked out...patience pays off!
This industry needs patience and when one can better known to this then there will not be any problem and everyone will willing to get started with some new deals.