Should there be a Moratorium on Foreclosures?

The new headlines catch phase is “Robo Signer”. These robo signers have been signing foreclosure documents at a rate of up to 1 document per minute. That’s 5,000 – 10,000 per month. Everyone knows that it is not physically possible for these robo signers to have read every document. That is the reason everyone is calling for a moratorium on foreclosures. Or is it?

If everyone was upset with the fact that these robo signers were not reading all the documents, then why wasn’t everyone upset that congress has passed health care and over a trillion dollars in stimulus programs while all along admitting that no one could possible read all of it before voting on it. So ask yourself, are they really upset that the robo signers didn’t read the documents. If you are honest with yourself, then the answer would have to be no.

So what is the real reason everyone wants a moratorium on foreclosures. Politics… In 3 weeks there is a major midterm election and this could be one of the most historic elections in our country. The politicians on both sides of the isle are looking for something to blame and point fingers at to make themselves look like they care and that all our problems are the banks. 

In reality, these so called robo signers have whole departments of people to create the documents and make sure that everything is correct before giving them to the robo signer for their signatures. This is how all business works. This is how congress and the president pass bills.

Now to be fair, there are reports of fraudulent mortgage documents on the banks part, but these isolated incidents are rare and need to be dealt with. For those few homeowners who were victims of falsified documents, they should end up with their houses free and clear. However, that should not cause the banks to free all foreclosures for the remaining 99% of foreclosures that were done correctly.

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Flipping Foreclosures

What is Flipping Foreclosures?

Flipping foreclosures is becoming the hottest real estate trend.  With banks foreclosing on millions of houses in the United States there are lots of great deals out there.   Flipping foreclosures is simply finding cheap bank owned houses and then selling them to other investors for a profit.  How simple is that?  All you have to do is find the house, find the buyer, fund your transaction and then collect your check.

What is the best type of house to flip?

The best type of house to flip is a first time home buyer house. 80% of property sold in the last year sold to first time home buyers.  These are the easiest types of houses to find and sell quickly.  A first time home buyer house is a house located in a working class neighborhood.  Neighborhoods where you don’t see a lot of huge houses but all of the houses are nice and well maintained.   The average house is a 3 bed 1 or 2 bath, ranch style house.

The best types are houses in these neighborhoods that are somewhat Junkers.  That way you can have more room to negotiate, which results in you getting a lower purchase price. Banks will negotiate on Most Junker property.

So why do we want to be flipping first time home buyer houses?

Other investors, rehabbers, and land lords are buying these types of houses.  And we are just flipping the house quickly to other investor buyers.   These houses are by far the easiest to sell.

Where to Find Foreclosed Deals?

MLSInternetRealtorsVacant HousesBanks

The Problem with Wholesaling REO deals

There is one major problem with flipping foreclosures. Banks will not let you assign the contract.  So you have to come to closing with the money to close on the REO.   How do you do this when you have no money?  You get what is called transactional funding.   So you simply have your transactional funder fund the deal under your end buyer closes.

Where do you find the Buyers?

Let me tell you that buyers are everywhere.  Even in the current market there are hundreds of buyers looking for great deals.  So where do you find the buyers?  Here is a quick overview of where cash buyers hang out.

Foreclosure Auctions- If People are Bidding on property you know they have to have cash to buy.Real Estate ClubsMLS- Look up Who Has Bought Property With Cash

Once you have your buyer simply get him to sign a contract and then close and cash your check.

Wholesaling or Flipping Foreclosures is such an easy way to make lots of money in our current economy.  There are millions of foreclosures on the market and more coming every day.

What are the Keys to Success in Wholesaling Foreclosures or Flipping Foreclosures?

The key is to not be greedy.  For one there are millions of foreclosed houses out there.  Another thing is that you want to make sure that your wholesale fee is reasonable.  Make sure the investor has room to make $20,000 or more.

Get Preston Ely’s Products where He will Teach you How to Wholesale Houses and How to Wholesale REO’s

Filed under: Wholesaling Real Estate

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