Buying Real Estate for Pennies on the Dollar.

In this article I'm going to show you how in no time at all you can be buying real estate for pennies on the dollar. I will first explain why the real estate market has fallen so dramatically. This will help you to understand why we can find these amazing deals in today's market.

How I learned my Lesson

Well it has finally happened. The bubble has burst and there is blood on the streets. I can remember the entire ride. I guess about six years ago or so I was renting a house in Van Nuys California looking to buy my first house. I remember looking in the recycler news paper for (FSBO) for sale by owner ads. I saw houses listed for 180k - 190k in my neighborhood. At the time those prices seemed ridiculous. Especially for a 1200sq' house in a barely decent part of town. After much floundering I decided to hold off. What a mistake that was. Three years later those same houses were selling for 500k and I missed the boat. Lesson learned.

Why did the bubble burst?

What happened to the Real Estate market was inevitable. You see investors on wall street were basically looking for high interest returns on their invested money. They were able to get these high returns by buying mortgage backed securities from various lenders. Because they were paying so well for these securities the lenders couldn't make new loans fast enough to sell to the investors. In order to create more loans to sell they had to make it easy to qualify for these loans. So now you have individuals with poor credit buying houses with little or no money down. Throughout most of the country the value of real estate was rising so fast that there was never a problem with these individuals not making payments. If they were short on cash they would just refinance. Take out enough cash from their equity to buy some nice things and make payments for another 6 months. Well, this went on for about 3 years. Everybody was happy. The investors were getting a great return on their investments. The lenders were making new loans charging points on new refinances. The consumers were using their equity to buy BMW's, Rolex watches and seadoos. A win/win/win right? Wrong!!!

What happens when you lend someone with poor credit 400k and they run out of equity? A mortgage crisis that's what. The value of real estate began to decline and the actual value of property began to be realized. So now people that truly could not afford to make their payments could no longer refinance and get cash to pay the bank. So the bank forecloses. The problem was that it wasn't just one family in trouble. We're talking about millions of homes and hundreds of billions of dollars. That's a problem.

Banks are in Big Trouble

So many people are in trouble with their loans that the banks cannot even keep up with all of the foreclosures right now. That's how you can buy real estate for pennies on the dollar. You seen banks are not in the business of holding property. They are in the business of lending money. Every additional piece of property that a bank holds is that much less money that they have to lend out. This means a great opportunity for people that are motivated and want to be rich. I'm guessing that means you. There are insane deals to be made right now. Banks are selling properties for pennies on the dollar.

Finding Deals

A great way to find real estate for pennies on the dollar is simply to go to a Real Estate office and tell them that you are looking for bank owned properties to buy. They should have a list for you that is several pages long with addresses and prices right on the list. You can also Google "bank owned properties" or "REO" online and look through specific banks websites to see what they have available. Next you want to pick some of the properties that are in your price range. Copy the addresses. Then visit a website such as www.zillow.com. Put in the property address and you can check on comparable sales in the area. This will give you an idea of what the property is actually worth. When you find a property that is worth a minimum of 3 times the list price you can make an offer. Make sure that you visit the property with a contractor to see how much fix up the property will need before you actually close on your deal. You don't want to get stuck with too much rehab work as this will kill your deal.
At this point you can either hold the property with a renter or attempt to flip the property for a quick re-sale. My advice in the market would be to hold and rent it out.

This is just one way that you can buy real estate for pennies on the dollar. There are many more ways to make a ton of money in this market. I hope this article has helped and given you some ideas for wealth.

You can do it, you just need the tools. Here is all of the information that you will ever need to have the success that you
deserve.

Now this is some real exciting stuff that we are about to get into. There is so much opportunity here for you that it just blows the mind.

I'm sure that you've all heard of the real estate bubble bursting. Turn on the news or pick up any newspaper and you read about the banks being in trouble, huge mortgage companies closing their doors or needing to get bailed out. Coming from this industry, I can tell you that there is blood on the streets for sure. There are more foreclosures now than there have been since the "Great Depression". That's no joke either. It kind of sounds like doom and gloom, and I suppose for some it is, but I'll tell you what it really is. "A HUGE OPPORTUNITY" to make more money then you ever dreamed about. At the same time helping people and having lots of fun.

There are two areas that I want to talk about in more detail.

1. Foreclosures
2. Pre-foreclosures

The difference being that a foreclosure is when the bank has already taken back the property from the owner. A pre-foreclosure means that they have started the process but, depending on the state there is a timeline and a process to get through before the foreclosure can actually take place.

I'll be focusing on pre-foreclosures for now and get into foreclosure investing in a later article.

Basically the situation is that a homeowner has gotten behind on their payments and they have no way to catch up. See in the past, a homeowner in trouble could simply refinance, and take cash out from the equity in their home. Many people were doing this twice a year and using the money to live on. Home values in many areas were going up so fast that this was easy to do. The problem now is that the values are falling, there is no more equity and so people are not able to make their payments. In California, once they are about 90 days behind on payments, the bank files what they call a (NOD) notice of default. Basically letting the world know that payments have not been made and they intend on foreclosing.

Here's the thing. Banks don't really want to do this. Banks are not in the business of owning real estate. Banks are in the business of lending money. Every property they own decreases the amount of money that they have to lend. With all of the foreclosures that are out there right now, banks are eager to avoid the foreclosure process. In many cases they are actually willing to take a lot less for the property than is owed.

For example: Property Value as is = 200k

If you were to contact the bank and tell them that you were willing to offer 140K you have a good chance of getting them to accept that offer. I know it's true, because I've done it myself. You can then either quickly sell the property to an investor say for 160k and make a quick 20k profit, or you can get some easy financing (no credit check) improve the property and sell it for 200k. That's 40k profit, more than many people make in a year. Imagine if you did just 1 deal per month. This is very possible and it's done all the time.

Now there is some leg work involved in this. You have to know how to find these pre-foreclosures. You have to negotiate with the bank. You have to make sure that you get the proper paper work together but once you've done this a few times it really becomes easy. I'll be talking more about different foreclosure strategies in later articles, but if you want to start learning right away then here is your opportunity

In the previous articles I revealed to you several ways toe buy real estate for pennies on the dollar. Wholesaling a property simply is the process of selling your property quickly, most likely to another investor. The investor has the resources to improve the property and turn it into a rental or sell the property for a retail price.

It's easy to find investors who have lot's of money and are looking for great deals. The better the deal, the easier it will be to find an investor. You can look in newspapers in the classified ads section where people lend money. Also people place ads like "cash for your house" for example. There is a ton of money out there. You can look on websites like craigslist as well.

Wholesaling is the fastest way I know to make a profit with the real estate that you are buying for pennies on the dollar. You will need to get a thorough understanding of the basics.You can do that right here.