Millionaire Real Estate Investing with Jim Pellerin
Episode #108 - Investing Is The Step That “Makes” You An Investor

Episode #108 - Investing Is The Step That “Makes” You An Investor

September 22, 2020

If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast ...  then click this link invest.jimpellerin.com

 

There are several phases when looking to do a real estate transaction. The first few phases are where you are looking for properties, you are analyzing properties, you are searching for, and you put together a business plan. You have all these preliminary steps. What you do next is to invest, where you perform a transaction. There are many ways to do that.🏘️💰📁💲

 

You can make private transactions where you yourself can make an offer directly to the person

 

There are forms out there where you can do this, fill in the form and you can make an offer yourself, or you can get a lawyer involved where the lawyer will create the offer for you.📝👩‍⚖️

You can also get a realtor involved to be able to issue an offer especially if it’s a listed property on MLS you are going to need a realtor because once it’s in the listing MLS domain you have to use a realtor to conduct that transaction. When searching for properties the next step is to invest. 👨‍💼🏘️💲

To make that offer means you now come to a point where you are done your analysis and you think that property is going to fit into your portfolio, whichever is it... whether its fix and flip, whether rent to own, or whether it's wholesaling … it fits all the criteria that you have.

You looked at the financials at high levels and you put in the offer. So this is what you want to do prior to investing. Without offers you are never going to get a property without offers, you are never going to get a deal.💲🏘️📊🤝

 

People say, I spent all this time analyzing and you know, I've never gotten any deals, never put any offers. Well, if you don't put any offers, you're not going to get a deal.

 

The other thing you are going to get with offers is you are going to get feedback and you are going to build up your network.

 

So usually these offers are to people that are listing a lot of properties for other people. Usually, it's with realtors; maybe it's a private deal. Maybe it's an online tool that you're looking at or an online database or online offering.🤝📋🏘️🖥️

Episode #107 - What Is Seller Financing And How To Use It

Episode #107 - What Is Seller Financing And How To Use It

September 18, 2020

If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast ...  then click this link invest.jimpellerin.com

 

One of the ways you can finance a real estate transaction is using what is called using seller financing.💰🏘️

 

I call seller financing any time a seller is actually providing you a mortgage as part of it's a transaction. 

 

For example, when a seller is trying to sell a property and they have not been able to sell it, they may be very motivated to hold a mortgage on this transaction. That’s normally known as a vendor take-back mortgage. 👨‍💼🏘️

 

Another example is, let's say there is a property out there and it's worth 300,000. And you’d like to buy that property, however, you don't have the money, or you don't have all the funds. And maybe the bank doesn't want to lend you all the money. 🏘️💰

 

You then approach the vendor, the owner, or the seller about taking back a second mortgage.

 

What that means is as part of that sale of the $300,000 that maybe they have enough equity. So maybe they have $100,000 equity in there. And they say, okay, I'll hold the mortgage for $100,000.

 

The reason why seller financing is advantageous to you is that usually, the terms of that mortgage are a lot better than what you would get at a bank or a private lender.

 

Because the seller is motivated you can usually negotiate with the seller for very low rates of interest.

 

Let's say, for example, the sellers are willing to hold a mortgage for $100,000. You could say, okay, I want that at 0% interest for five years, I have done that before when I purchased the property and I have asked the seller to hold back a second mortgage for 0% over five years.💲🏘️⏳

 

I also used to be able to get that seller as a second mortgage holder so that I wouldn't have to put any down payment.

 

Nowadays banks actually want you to have some money as part of the down payment. 

 

So that is another scenario that you would have to look at when trying to get financing. Usually, a mortgage broker can help you do that. 🏘️👨‍💼

 

The other thing which is really interesting is if the seller owns the property outright which means they own 100% of the property. So if they don't have a loan they may be willing to finance the entire loan for you. Maybe they are an investor and they bought the property 20 years ago. The property now has no mortgage on it.👨‍💼🏘️⏳💲

 

What they can do is sell you that property for $300,000 and they hold back the entire value of the mortgage for you. In that case, they are probably going to want better terms. They probably want a good rate of return. Sometimes they can get a better return than they can get instead of investing in another type of investment. 💰📈👍

 

The advantage for you is you don't have to usually qualify for the mortgage. Now you would have to do some kind of qualifying. 

 

The owner will want to look at your credit score but they may not be as stringent as going to a bank.

 

How many more properties you have is also usually not a concern. 

So, private or seller financing is when the seller will finance a portion of the transaction or all of the transaction so that you can actually purchase the property from them.👨‍💼🏘️💲

Episode #106 - What Does Transfer of Deed Mean in Real Estate Investing

Episode #106 - What Does Transfer of Deed Mean in Real Estate Investing

September 17, 2020
If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast ...  then click this link invest.jimpellerin.com

 

Another way you can get the seller to participate in a purchase real estate transaction is you can get them to do what is called a transfer of deed or a subject to the transaction.👨‍💼🏘️📜

 

What that means is a seller transfers the title to you.

 

What happens is you will negotiate with them to transfer the property or to transfer the deed to you, to sell you the property subject to them staying on the mortgage. It's kind of an interesting situation and everybody thinks it's really weird. And it probably is. But what happens is the owners are selling you the property. You don't have to purchase it. You are going to then service the mortgage for that seller. 🏘️↔️📜👨‍💼

 

The seller is still on the mortgage for the property, but no longer owns it.

 

The banks aren't crazy about this. There is usually a mortgage due-on-sale clause. Which essentials mean whenever a property is sold, the mortgage is automatically due on sale. Meaning you have to pay off the mortgage.🏦💰 

 

Some lawyers will not execute a subject to a transaction for that reason, but if you can get it done, it means that you now own the property. You are on title. You are the sole owner of that property. 👨‍💼🏘️

 

The mortgage for that property is still on that property. But the owner of that mortgage, the mortgagor of that property, is the seller who has no rights to that property anymore. 

 

It’s kind of a strange situation. What you then do is you approach the mortgage holder, the bank, let's say whoever, whoever is the mortgage person for the mortgage lender for that property, and you start paying them directly. You can get the seller, or you can do it yourself to contact the bank and say I'd like to change the monthly payments to come out of this a bank account.🏦👨‍💼🏘️💰

 

Normally I've never seen the bank execute the due-on-sale clause. Normally the banks will allow it as long as you continue to make payments. The bank should never block or ever know that this situation exists, where you are now the owner, but you are not on the mortgage documents. 

 

It's very critical that you continue to make those mortgage payments. 

 

The problem with that too is it is if the seller ever declares bankruptcy or there is ever a problem with their financial situation, then when they have to go after the property, there is going to be an issue there because you really own the property. And the mortgage on the property is still in their names.👨‍💼🏦📉🏘️

 

It becomes kind of messy. I've never had those situations exist or happen to me. So I don't know the details about what would happen in that situation, but it's just something to keep in mind. 

 

When negotiating with the seller, if they usually just say I just want to get rid of this property. And usually, it's people that were transferred or it’s people that are investors. They just don't know what to do. 🗣️👨‍💼🏘️

So you basically take over their mortgage payments and you become the owner of the property, but they stay on the mortgage. That's commonly known as a subject to the transaction. 💰👨‍💼🏘️

Episode #105 - How to Get Financing for Real Estate Investments

Episode #105 - How to Get Financing for Real Estate Investments

September 16, 2020

If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast ...  then click this link invest.jimpellerin.com

One of the ways you can get financing when trying to finance your real estate investment is by working with mortgage brokers.💲🏘️👨‍💼

 

Mortgage brokers are people that are going to find you a mortgage through multiple sources or through one of many sources.

 

The difference between a mortgage broker and somebody who works for a bank is that a mortgage broker has access to many different lenders and those lenders could bank as well. 

 

What happens is you go in, you fill out an application and you do all the necessary paperwork for a mortgage broker. They sit down and they look at your finances and look at your current situation. They look at your credit score. They look at your capability, they look at the property. They look at all the same things as a bank mortgage initiator does or whatever they may be called at the bank.📝💰📊🏦

 

What they do is then they go and they look at their list of mortgage providers, meaning the list of lenders. From that, they determine who is going to be the best fit for you. Now that doesn't necessarily mean that those lenders are going to approve you, but then what they do they will submit it to the one who makes the most sense. 👀👨‍💼👍👌

 

By the most sense, I mean is the one that looks like they are aligned the best with what you're looking for. 

 

Some people specialize, or some lenders will allow for investment properties, and some won't. Some will allow for situations that are unique to your credit such as your credit score, some require higher credit scores and some will allow for lower down payments than others. 🏘️💰👨‍💼

 

There are some rules that would stop them from providing you with a higher loan to ratio mortgage than others.

What they do is submit your application to this lender. And if the lender approves you, they come back and then you finish all the necessary paperwork.📝👨‍💼

 

The big thing about mortgage brokers is they only pull your credit once.

 

If you don't get approved by that lender, they can resubmit it to another lender and another lender, and it doesn't affect your credit score because they've already pulled your credit. That credit is recorded on your application. The other nice thing about working with mortgage brokers is that they have access to what's called “A” lenders, meaning banks, which are, big banks. “B” lenders, which are smaller. 📝➡️👨‍💼🏦

 

There are banks that specialize in mortgages. There are companies out there that provide financing that only do mortgages.

 

For example, mortgage investment corporations (MICs) are one example. There are a number of institutions that only do a mortgage. They have not deposited banks. meaning you don’t hold a bank account with these banks that you are going to send your application to. 🏦📝

The other thing that the mortgage brokers work with is private lenders. In addition to having access to all these A and B lenders, they also have access to private lenders or just individuals or individual companies that are investing in mortgages.👨‍💼👩‍💼💰

 

What they do is they take your application and they'll send it off to this private lender. 

 

Private lenders are people that understand the risk better. 

 

Private lenders are more open to a higher ratio, mortgages. They are more open to problems with your credit score. As a result, you are going to pay a higher premium or a higher interest rate.👨‍💼📈📊

 

For example, today's mortgage rates might be 3%, 4%. A private lender might be charging you 7%, 8%, 9%, or even 10% for the same type of mortgage. 

 

You should never go to your bank directly to get a mortgage because if you do, and you don't like the terms you have to go to another bank and that is going to affect your credit score.

Go to a mortgage broker who also has access to many banks. And I guarantee you they will give you the best mortgage that is the most suited for you, that is the right fit for you. 👨‍💼🏦👍

Episode #104 - How to Use Friends and Family for Real Estate Investments

Episode #104 - How to Use Friends and Family for Real Estate Investments

September 15, 2020

If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast ...  then click this link invest.jimpellerin.com

 

If you are looking for joint venture partners or investors to invest in your real estate deals, you just have to go out and you have to start looking for them. The obvious place to look for real estate investors is through friends, families, and coworkers.👀👨‍💼🤝👨‍👩‍👦‍👦

 

Now, this sounds probably very weird to you that you would be going to a friend or to a family member to ask them to be your joint venture partner or ask them to invest with you in a real estate transaction because you're worried that if anything goes wrong, you'll never be able to see them again. You’ll never be able to talk to them. They'll be very upset. 👨‍👩‍👦‍👦🏘️💲

 

So, maybe you don't want to get family members involved in your real estate transaction. The other side of it is a lot of them may not want to do it. They understand what you are doing, but for some reason, they don't want to invest in your success. Even though you might have a track record of very successful transactions. 👨‍👩‍👦‍👦💲📈

 

The other side of investing is that people are upset if you don't ask them to invest.

 

For example, I had a bunch of people that I used to work with, and they knew that I was investing in real estate. And when I say work, I also was doing my IT consulting on the side and they found out I was investing and they said, “Well, why can't I invest with you? What would I do to be able to invest with you?”💻💲👨‍💼

 

If you let people know that you are investing in real estate, there is a chance that they are going to start approaching you about your investment opportunities

 

Especially if you maintain a fairly high profile about what you are doing.

 

A lot of people, don't want people to know that they are investing in real estate. So they keep it very hush-hush. To me, that is not the thing to do if you are trying to scale your business very fast. Especially if you want to invest in multiple properties.👨‍👩‍👦‍👦📊🏘️

 

The way you invest in real estate and grow your portfolio really fast is by bringing in third-party investors

 

These people are out there, these people are looking for you to invest in.

 

Another place you can go to find real estate investors is through the local real estate investment associations. These are real estate groups that meet every now and then. I've even put ads with these groups. 🔎👨‍💼🗞️

When I have investment properties that I'm looking for investors for, I put ads out on the classifieds on Kijiji, on Craigslist, or in the various sites like Trulia or Zillow or whatever sites are out there.💲🏘️🗞️

 

You can put ads out there saying you've got this property and you are looking for an investor to help invest.  You have to be a bit careful about those types of postings. 🗞️🔎🏘️

 

There are a lot of people out there with a lot of money and they are looking for a place to park their money that is safe, secure, and that will give them a good return.

 

Real estate is probably one of the best ways to do that. Even in times of fluctuation. If you hold onto real estate long enough, it will give you a better return. It may be that people are upset that they have to stay in the deal a bit longer, but that's cyclical. You just have to understand where you are in the market and where you are investing property. That comes with experience. And that is what people are looking for you to provide.👨‍💼🏘️💲💯

 

You will be the person that will be doing all the heavy lifting, going out, finding properties, making sure that everything's in place to do the deal, whether it is a fix and flip, whether it's a rental, whether it's a rent to own. 👨‍💼🔎🏘️🤝

 

All an investor would be doing would be investing cash and writing a check for their portion of the investment.

Episode #103 - How to Work with Mortgage Broker to Fund Your Deals

Episode #103 - How to Work with Mortgage Broker to Fund Your Deals

September 14, 2020

If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast ...  then click this link invest.jimpellerin.com

 

Probably the most common place to get a mortgage these days is going directly to a bank. Yes, people still do that. Now I'm not saying it is necessarily a bad thing, depending on your situation, especially if you have a good relationship with the bank.🏦👍

 

I talked earlier about how to go use a mortgage broker, not a bank, but their banks are still the biggest provider of mortgages. 🗣️👨‍💼🏦

 

What the banks will do is they will look at your situation similar to what mortgage brokers do.

 

They will go through your statements, look at your credit score, look at the loan that you're trying to get, look at the down payment that you have, look at your financial situation, and of course, take a look at the actual property.📊💲👀🏘️

 

The nice thing about banks, they have these different products where for example, you can get a line of credit instead of a mortgage.📑💳💯

 

What happens is, as you pay the mortgage down, the available principal now becomes available on your line of credit.

 

There are some unique products that they have that they can make available too.      

 

The other nice thing about banks is you have a relationship with the bank. Sometimes the bank manager can help pull a few strings for you.🏦👍

 

You keep all your banking in one place. You have got your checking account, your savings account, and you might even have your investments through them. Any investments in the stock market or mutual funds might be through them.🏦💲

 

If you are looking at going to a bank, you want to make sure that when you go to them that they don't give you what is called the standard rate.🏦📈

 

A lot of banks have the option to give you a discounted rate. 

 

So yes, banks are a good source of funds. It's probably the number one source of funds. But I hear all the time people are concerned about, Hey, you know, my bank will only provide me up to four houses or financing for up to four units. There are restrictions on banks.🏦👍💲

So be careful when trying to use a bank that it doesn't affect your ability to scale with when looking at investing in real estate.

Episode #102 - How To Find Investors For Your Real Estate Investments

Episode #102 - How To Find Investors For Your Real Estate Investments

September 11, 2020

If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast ...  then click this link invest.jimpellerin.com

 

One of the things you want to do when you start investing in real estate is you want to start looking for investors. And these investors you want to look at are going to become, what's called a joint venture partner.👩‍💼↔️👨‍💼

 

A joint venture partner is someone that is part of the transaction. They aren't just writing you a check necessarily. Well, they might be, but they're not a mortgage lender. They are not somebody who is just loaning you money, money that is expecting a certain return on a regular basis. 👨‍💼💰👩‍💼

 

A joint venture partner is somebody who is usually writing you a check and usually paying for a lot of the purchase not expecting a monthly return.

 

For example, let's say you are purchasing a property worth $400,000, and you need money to buy that property. And it's worth $200,000, or it costs $200,000 and you need another $100,000 for renovation costs.🏘️💰

 

What you do is you go out and you look for a joint venture partner or multiple joint venture partners.

 

I've had a couple of people involved in a single deal and that's okay too. You pull all your resources together and you go out and you buy the property. When you do that, you put together what is called a joint venture agreement.👨‍💼🤝

 

In the joint venture agreement, you lay out what each person's responsibility is as part of that agreement.

 

In the case of a money partner, which is a type of joint venture partner, they would be responsible for providing all the cash required in the transaction.

 

And the way you would write that up in the joint venture agreement, you would say they would be responsible for purchasing the property. That may be that they come up with all the cash, or maybe they go get a mortgage. It's really up to them.✔️💰🏘️

 

However, they know that they can purchase that property as well as providing any construction costs or any costs that are going to be required to carry the property for X period of time. They are in the deal just like you are in the deal. 

 

Your role in that joint venture partnership and that would be documented in the joint venture agreement, might be that you are responsible for purchasing the property, for acquiring the property, for looking for properties, for the ongoing management of the property, for the general contractor of the fix and flip let's say if that's also what you're doing. 👩‍💼↔️👨‍💼🤝🏘️

 

You might also be responsible for collecting the rent if it's a rental property for paying out all the different people that are required and making sure that the mortgage payments are being serviced, that the taxes are being paid, that insurance is being paid that there if there is any monthly profit that it's distributed properly, and any ongoing maintenance is being handled for this property.📥💰🏘️

 

Everybody’s tasks as part of this joint venture have to be documented properly

 

The joint venture agreement must be signed by each party. As I mentioned, you can have a number of different people involved in the joint venture. You can have many partners … you can have a deal maker for example whatever you want to call the relationship or activity that you are performing as part of this joint venture. 👩‍💼↔️👨‍💼🤝

Episode #101 - How To Use Private Financing For Your Real Estate Deal

Episode #101 - How To Use Private Financing For Your Real Estate Deal

September 10, 2020

If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast ...  then click this link invest.jimpellerin.com

 

One of the ways you can finance your real estate investment deal is through private investors or private lenders.👩‍💼👨‍💼

 

There are private investors that are just going to give you a mortgage. Meaning, if you are buying a property, let's say for $300,000, and you put 20% down … so that's $60K. What the private investor will do is they will give the remaining funds and put a lien on your property, in the form of a mortgage. 👩‍💼👨‍💼💲🏘️

 

The other thing is you can actually do is get a joint venture partner as a private investor. 

 

They are not just a mortgage provider. They are part of the whole deal

 

For example, let's say you're buying a property and you're going to fix and flip. You buy that property for $200,000 and it's actually worth $400,000 and you're going to put another $100,000 into it. So you are into it for $300,000. Depending on where you are in the relationship with that person, that person may lend you up to the entire $300,000 that's required to purchase the property and to actually do the renovation costs. 🏘️💲⚒️

 

Normally you are NOT going to get that kind of investment from somebody you have just met somebody that's new to you. 

 

To do deals with these people, they may be willing to advance you more funds and they would be willing to have more skin in the game as you get into bigger and better deals and as you prove to them that you are creditworthy. 👍🤝💳👍

 

So the difference between private investors and the private lenders that you might get through a mortgage broker, is that the private investor becomes more of a joint venture partner. And by that, what I mean is they are going to share in the risks and the rewards. 👩‍💼🤝👨‍💼🎖️

 

It's not just “Hey, I'll give you this $300,000 and we're going to make a $100,000 profit. I'm going to get my $300,000 back plus another $50,000 profit split. And that's all going to happen in six months, right?” 

 

If there are changes in the cost of the renovations, they are going to know about this, and their returns are going to be reduced. 💰⚒️📉

 

If you do the work in less time and there is actually a higher profit, they're also going to benefit

 

Normally when I invest with joint venture partners, it's a 50 / 50 deal, meaning we're going to split all of the profits and any losses 50 / 50. 

 

And normally this is for a shorter period of time if you are doing a fix and flip for, you know, three to six months. ⏳⚒️

 

However, I have had joint venture partners on rent-to-own deals where the partner has gone out, purchased the entire property, and stayed on the property for three years. At the end of the three years, we sold the property to the tenant-buyer and whatever profit was made through that whole transaction we split it 50/50. 💰🤝🏘️➗

 

I say 50 / 50 because that is normally the split that I want to do with any of my investors. 

 

So, what the split is, is something to consider as well when you're working with joint venture partners or investors. ➗🤝👩‍💼👨‍💼

Episode #100 - How To Use Home Equity Lines of Credit (HELOC) To Buy Real Estate

Episode #100 - How To Use Home Equity Lines of Credit (HELOC) To Buy Real Estate

September 9, 2020

If you would like to learn more about real estate investing and how you can scale your business and build a large portfolio fast ...  then click this link invest.jimpellerin.com

 

A common tool or a common financial vehicle that a lot of people use when investing in real estate is what's called a home equity line of credit or a HELOC. ⚒️🚗💲🏘️

When you go in and you take out a loan or you take out a mortgage, that's called the line of credit on the property that you already have equity in.

Normally that is on your own personal residence. 🏘️

 

So let's say you have this property, that's worth 500,000 and you apply and you can get a line of credit for up to let's say, 80%. That means you have no access to $400,000. 🏘️💲

 

What people will do is they will take an advance on that line of credit. Meaning they will actually take money out. 

Let's say it’s $100,000. They can then use that as a down payment towards the purchase of another property.

 

This is how a lot of people scale when they purchase real estate investing through this home equity line of credit. The good news about a home equity line of credit is usually it is at the rate in which you can get mortgages at the current prevailing mortgage rate. Usually, it's variable, but that's okay. 👨‍💼⚖️💲

It is a lot cheaper than if you were to go into a bank and just ask for a loan to buy a car. 

 

For example, let's say loans for cars or the standard consumer loans are six, seven, 8% mortgages are usually in that range of two, three, 4%. So it's almost half of what you would get if you were going to try to get a consumer loan. That is a big advantage. 💰📈

The disadvantage of using a home equity line of credit, when you go to buy a property in an investment property, is that you have to service that debt, meaning you're going to have monthly payments on that debt.

For example, in this case of $100,000, your monthly payments may be let's say $400 or $500 or $600 a month to pay for that mortgage. That second mortgage payment is on top of the first mortgage that you are going to get when you buy that rental property. 💰🏘️

So the additional expense on the rental property is you have the down payment that you took out from the line of credit.

Let's say that is $300 a month. Plus you are going to have your mortgage payments for the actual loan … the one you took out for the property itself. That could be another $1,000. You then add in all the other expenses. 💰⏳🏘️

 

Because you borrowed the money for the down payment, and when I say borrow, you actually used funds from your line of credit. You end up having a situation where your expenses exceed the rents, which means you are now operating at negative cash flow.💰💳📊

 

This is what happens a lot of times and people don't understand that. And they say, well, I'm just going to take a loss while I let the property appreciate assuming that the property appreciates. That's the wrong thing to do. ⏳💰🤔🏘️

When you purchase a property for investments, you want to make sure that it cash flows right from the start, even with all the finance in place, even with all the expenses in place.

Episode #99 - How To Get Access To Foreclosures and REOs

Episode #99 - How To Get Access To Foreclosures and REOs

September 8, 2020

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One of the places you can find motivated sellers is at foreclosures. And where do you find foreclosures? 👀👨‍💼🚪

 

Foreclosures are usually initiated by the lender which is usually the bank. 

 

What banks do is they initiate legal action against people that haven't paid their mortgages because they are looking to recover their payments through something called a foreclosure. Basically, that means they are going to come in and they are going to take the house from the owners. 🏦👨‍💼💰🏘️

 

Banks are a good place to find foreclosures. Usually, they will list these foreclosures. I think by law, they have to list foreclosures prior to selling them. What happens is after they go into foreclosure, the bank will try to sell them and they try to sell them on the open market, usually through another real estate agent.🏦🚪💰👨‍💼

 

After a property goes into foreclosure and after the bank takes possession, the property is now referred to as real estate owned (REO).

 

There are realtors that actually specialize in foreclosures. There are Realtors that specialize in bank-owned real estate or real estate owned as it's called.

 

You can actually go online and find specific realtors that specialize in this or you can just ask around and start talking to realtors even those that don't specialize in bank-owned real estate. They probably come across various auctions and real estate owned properties once in a while.👨‍💻🏦

 

The other place you can go to for foreclosures is mortgage brokers

A lot of times prior to going into foreclosure people are looking at refinancing and looking to see if mortgage brokers can help them.

So, to find foreclosures check with realtors, check online and check with your mortgage brokers.

 

There are different levels of foreclosure. I'm not that familiar with them but there is pre-foreclosure and there is foreclosure. If you can get in there at the right time, you might be able to get a good deal.📊🚪🤝

 

Pre-Foreclosure is when the owners have been given notice and they have to make up payments prior to them going into foreclosure. 

 

Pre-foreclosure is usually when owners get three months behind before the banks can foreclose on them.🚪⏳

 

And it's not necessarily the bank that's going to foreclose. It could be a second mortgage holder that's going to try to foreclose. If there is a second mortgage on the property, maybe the lender in the second mortgage position is going to try to foreclose.

 

The other thing is if the bank is trying to foreclose, maybe the second mortgage holder will step in and actually make-up the payments for the arrears that are due and then add it to the second mortgage. I've seen that happen a few times.🏦👨‍💼💰⏳

 

Those second mortgage lenders are usually MICs or mortgage investment corporations where they hold the second mortgage. Also, mortgage brokers would probably have insight into foreclosure if owners have a second mortgage through a private lender.💲👩‍💼🙅‍♂️

 

So, those are some ways to find motivated sellers that are in difficult situations that are going through pre-foreclosure prior to going into real foreclosure and prior to going into real estate owned properties.🔎🚪🏘️

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