Background on My Company ... Seized Real Estate Market

All Kinds of Seized Properties

You may wonder why anyone would let their property go into foreclosure when they have a large equity position in their property. But consider the following example. The homeowner purchased his home for $100,000 ten years ago and faithfully paid his mortgage payment until a severe illness sets in or he loses his job. With no savings to substitute for the lost wages, he falls behind in his payment. His initial thought is that he can catch up when he is only one month behind but then he gets two months behind.
He may now request and get a promise from a relative or friend that they will lend him money to make up the back payments for which he is in default. For one reason or another, the friends and relatives don't come through and with the delay he becomes three or four months behind on his mortgage payment. The biggest mistake that property owners make when facing foreclosure is thinking that something or someone is going to bale them out but the relief never comes. This is the situation 95% of the time.

Seized Properties Potential for Profit

There is no magic involved in making money in seized properties and the potential gains are for real. The potential for profit is greatest when a homeowner has owned a property for several years (usually 5 years or more but may be less in areas where property values are increasing rapidly) and has accumulated substantial equity. Equity builds as a result of the homeowner making scheduled payments. A portion of each payment reduces the principal balance and increases the equity. The increase in equity also benefits from inflation which continues to push up the price of all housing. Over time, the combination of these two factors can result in a homeowner building up a substantial equity position in their home. When a homeowner with a large equity position goes into foreclosure, there is very good potential for profit for the informed investor.

Why Do Foreclosures Occur

The stage is set for a foreclosure when a homeowner fails to make mortgage payments as specified by the terms of the note he signed when he purchased the property. Technically, he is default when he misses the first payment but most lenders will not initiate foreclosure procedures until three or more payments have gone unpaid. The reason lenders delay taking action is that most people who miss one or two payments eventually cure the default by paying the amount due plus any late fees. Although the lender delays starting foreclosure proceedings, you can be sure they make multiple attempts to contact the homeowner to gently nudge them into bringing their loan current. As the number of months that the loan is in arrears increase, the lender notices increase in severity. Finally, if the homeowner does not respond to lender notices or cure the default, the lender is forced to initiate foreclosure proceedings.

Making Money with Seized Real Estate

Buying seized properties is one of the best ways to make a substantial amount of money in a short period of time. Successful investors have been known to make $50,000 or more on a single transaction. However, the competition for seized properties has increased dramatically in recent years as real property values have experienced double digit increases.

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Unsolicited Testimonials

"Pete Cowley has vast knowledge of Real Estate Investing and has taught me several strategies to help kick start my Real Estate Business. When you're ready to learn about Investing in Real Estate Pete will support you on your ride to success."
... Sal F. - New York State

"Pete is one of the most intelligent men I ever had to converse with, he is an outstanding real estate master mind, and he's taught me so much." - "I purchased 400 Acres in CA for less than 2 Dollars an Acre!!" -
...Ben - California

"Pete has a wonderful talent for finding Real Estate at Deep Discounts...
I bought a Property in Kansas
at less than 11% of it's appraised Value!!"
... Linda P. - New Mexico

"Pete Cowley has shown us the reality of literally purchasing real estate
for "pennies on the dollar"
...Damien & Adrienne J. - California

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Living Beyond Your Means

It's a sad story but people who live beyond their means or don't have savings to fall back on when they encounter an emergency may find themselves faced with losing their home. In many homes, both the husband and wife work to maintain their life style. When either of them loses their job or gets sick, it has the potential to be a financial disaster. In this case the home value had appreciated to $150,000 and the loan balance was approximately $90,000. The equity is calculated by subtracting the balance of $90,000 from the current value of $150,000 which yields a $60,000 equity position in the property. In spite of the substantial equity position, the homeowner will most likely not be able to borrow money from a bank to make up his back payments since he can not show a source of income to repay the loan. The best option would be for the homeowner to quickly sell the property but often times the homeowner delays taking action and the lender forecloses before he can figure a way out of his situation.

Most lenders will start foreclosure proceedings if they have not received payments in three months or more. The Lender does not want the property but they have to protect their interest and the only way to insure that they recover the money they lent out is to foreclose on the property. The foreclosure process requires the lender to file a notice at the court house and to place a legal ad in the newspaper giving notice of their intent to foreclose.

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Tax Sale 101

What is a Tax Sale?
A public auction of tax deeds and/or tax liens used to collect delinquent real property taxes.

What is a Tax Deed?
A written document used to convey title to real property after the property is sold at public auction by a local governmental authority for nonpayment of taxes.

What is a Tax Deed Sale?
A public auction, mandated by state statute, of tax-defaulted real property. Tax deeds are sold to the highest bidder. Typically, bidding begins at the amount of delinquent taxes, interest charges and related fees due to the County.

What is a Tax Lien?
A claim registered against a property by a local
governmental authority for non-payment of assessed taxes.

What is a Tax Lien Sale?
A public auction, mandated by state statute, of tax liens. Tax liens are sold for the amount of delinquent taxes, interest charges and related fees due to the County. A tax lien does not convey ownership to the property. Rather, it entitles the purchaser to full payment by the delinquent taxpayer of the full lien amount paid at the time of auction plus interest. The percentage interest varies from state to state. If taxes remain delinquent (period of time varies by state), the purchaser has a right to foreclose on their lien with the hopes of attaining ownership of the property.