Online Real Estate – Time Limit Bidding

Time Limit Bidding – The next generation of homes for sale online

The residential real estate industry has taken quite a hit over the past few years from the recession since 2007. Much of the recession has come at the hands of corporate or even “Wall Street” not providing more transparency to “Main Street” in the real estate transaction. As homes were bought and sold, many home buyers did not quite understand the underlying home values, mortgage industry or complexity of the real estate transaction. For years to come the average home buyer will be very cautious entering into new real estate transactions and the increased demand for transparency and credibility with homes for sale will emerge.

What has changed in the market? Real Estate Owned properties (or Bank Owned Properties / Listings) in the recession have allowed more bidding to take place. The Real Estate Owned (or REO) properties provide a larger discount to home buyers as they were previous foreclosures. Given that the bank needs to sell the home at a discount, it offers a better opportunity to home buyers and/or investors. REO properties for sale have become very popular and will help transcend the paradigm of online home buying from an “offer” world to a “bidding” world. In a few years, all residential home buying will be open to this process and “Main Street” will be more comfortable with the new paradigm.

Online, the business models of buying and selling homes have not changed much over the years of the Internet. With web 2.0, the home buyer clearly has been provided more data but the businesses models still have remained very ad-based – delivering leads to real estate agents. Websites like Zillow and Trulia still just generate leads for real estate agents and produce other ad products or services. A new paradigm will soon emerge online where online bidding and time limit bidding becomes more of the norm. Time Limit bidding puts more trust back into the home buying transaction as it creates visibility to all parties as to bids on a residential home listing or ‘for sale’ property. Unlike our current system where a home buyer merely submits an offer to a real estate agent, it is up to the agent to work with the Seller. The Seller can view offers ‘behind closed doors’ and decide on its ‘highest and best’. However, with Time Limit Bidding online, the home buyer can view all the bids of all interested parties in a home – whether it’s an owner occupier bid or an investor bid. In addition, many REO web sites are beginning to provide more credible data to home buyers to place bids – whether it is the original loan amount, property details, scoring, etc.

With the recession, REO properties offer such a discount to market prices that the new bidding paradigm can emerge. Bank owned properties need to be sold quickly and have more attractive prices than the traditional residential real estate market. Today, there are emerging web sites like GoHoming where time limit bidding on REO properities is permitted. It will be interesting to see how it all pans out in the coming months.

01 Jul 2016

Why You Need Real Estate Agents For Buying Or Selling Property

Transacting real estate is probably the most complicated business process in the world today. An individual, like you and me, who is not normally devoted to this kind of work will not have all the tools he needs to conclude any deal, whether it be purchasing or selling a house, satisfactorily. What are these tools?

You need their Theoretical Knowledge and Practical Experience

Buying and selling real estate isn’t like purchasing shoes at the mall where all you need is to bring out your cash or your credit card, and then have your new sneakers packed in a box for you. The process of buying shoes is more complicated at the seller or retailer’s end. However, it is still much, much less complicated than selling real estate.

Only a trained professional agent knows all the requirements that have to be met to make your transaction legal and binding in the eyes of the law and the business community. Getting a good one to do things for you will be worth every cent of the commission or wage you are paying him. You may even end up paying less if you are the buyer or getting more if you are the seller than if you had decided to try and do it all by yourself.

They know the Properties in their Locality

Rather than waste days searching newspaper ads and browsing the internet for people buying or selling properties, you can just go straight up and inquire from an efficient agent and he will probably have the list fitting your purchasing or selling requirements before you in a matter of minutes.

That way, you will have plenty of time and energy left to devote to studying and comparing your different options.


Real estate prices change frequently. What you thought cost a million based on your research a month ago may be worth two today. Because professional agents need to know about prices, they have all the updated listings ready for you when you visit them. These listings will be updated to the second with the more efficient professionals. Besides, before actually starting any transactions, they double check their sources to see if their prices are still accurate.

Salient Advice for Real Estate Investment

Besides knowing the current prices, agents have computers which can furnish them with statistics on which pieces of property are likely to up in value and in how long. People thinking of buying real estate for investment absolutely need to have some friends who are professional and active real estate agents. These experts can give them expert advice and opinions about which properties to buy for long-term or short-term investments.

Protection from Harassment and Scams

People with no adequate exposure to the real estate market may be bled dry in a spectacular and humiliating way by unscrupulous brokers and agents if they choose to cross blades with them. Builders and sellers will always try to double their profits at the expense of buyers. On the other hand, professional investors in real estate know how to lead developments around to make huge profits out of their purchases.

The only way to protect yourself from these sharks is to hire the services of good real estate agents.

01 Jul 2016

3 Simple Tips for Building Homes of Your Own Success

Building Homes of Your Own is a computer game where you are challenged to get a loan, select and purchase property, design and build a house, and sell it for a profit. There are three levels to the game, Urban or Suburban, Rivers and Lakes, and Coastline. For each progressive level you will be given a larger loan for your budget. On the third level, Coastline, you will receive a loan for more than 1 million dollars.

Construction Technology Engineering is the main focus of the software. It is meant to be as close as possible to real world situations in the building homes industry. Many students in Technology Education and Engineering class utilize this software to learn the steps to planning and building a house.

Here are some of the main tips for being successful in the Building Homes of Your Own game. First, you need to remember that you are not designing the house for yourself. You will be given different situations depending on which property location that you choose. Most design something they would want to live in while ignoring the demographics of the surrounding area. The surrounding houses and neighborhoods are big clues to whom you may want to sell your house to. You must check the demographics for information surrounding your property. For example, average population age is very important. You don’t want to build a skate park in the backyard of a neighborhood where the average age is 65 and older.

Second, when designing your floor plan and interior remember you are trying to make a profit on the property. Your profit is the amount of money above what you spend on building the house. For example, if you design a very large house with the most expensive interior choices, you will not be able to make as much profit on your property.

Third, planning for your house designing decisions is the most critical step that most people overlook. There are three planning phases you need to consider. The “site phase,” where you find and purchase your property. The “building phase,” where you decide on your floor plan, exterior, and interior. The “sell phase,” where you advertise and sell your house to potential buyers.

Your home will be judged by how much profit you make on your property. You must be able to find the right buyers by checking their credit information. They will be rejected by the bank for a home loan to buy your property if they have bad credit. A score of 70 percent or higher means you can go on to the next level. Remember these tips and tricks for reaching the next level when playing Building Homes of Your Own.

01 Jul 2016

Building Beach Homes – Different Types and Components of Foundations

In examining the different types of foundations the first that we review is the raft foundations. A raft foundation is basically a large concrete slab designed to cover the whole area or part of the site. It is used on soft or weak natural soil or made-up ground (fill) or ground liable to subsidence as in mining areas, or where column are closely spaced that their bases may be to close, touch or overlap, for example, where seventy-five per cent of the site may be covered. Though a raft foundation is used for weak soil it cannot be used for Jamaica beach homes that require a much more sturdy foundation.

Types of Raft
Solid raft consists of a solid two-way reinforced concrete slab. Light rafts are used for small load bearing type buildings or light framed structures with low bearing pressures. For heavier and larger building thicker and deeper raft are used.

Beam and slab raft consist of slab bearing directly on the ground with bean ribs project above it. It is useful where loads or rigidity needs require a slab thicker than three hundred millimeters. This was experimented on for some beachfront property for sale in Jamaica, but the concept was quickly abandoned.

Cellular Raft consists of top and bottom slabs (rafts) with edge and intermediate beams in both directions forming hollow cells. This is useful where raft stresses are high and deep beams (nine hundred millimeters) are necessary to provide the greater rigidity required.
Sometimes the depth may be full basement storey or storeys using reinforced concrete cross-walls, monolithic, with floors and rafts.

Pile Foundations
Pile foundations are those which transmit loads to deeper levels by means of long column bedded in the soil They are suitable on soils of low bearing capacity, where the water table level is high, where there is the presence of shrinkable clays or other materials near the surface which is liable to movement. This is what is used for most beachfront properties for sale in Jamaica.

Types of piles
Friction piles transmit their load to the surrounding soil by means of friction between the pile surfaces and the soil, that is, the piles are supported by friction between soil and pile. End bearing piles carry their loads through weak strata down to a bearing in firm strata below.

Short-Bored piles are relatively short length piles used in firm shrinkable clay as a means of pitching the foundation below the zone of moisture movement. They are usually large in diameter (three hundred millimeters) relative to their short lengths so no steel reinforcement is normally necessary and they are stiff.

Factors which determine Width and Depth of Foundations
The width and depth of foundation varies with the:
o Character of the subsoil
o Weight of the wall and the load which it carries
o Nature and strength of the materials to be used in the design of the foundations; and
o Likely behavior under load of the soils on which the foundation rest

Concrete in Foundations
The strength of concrete is influenced by a number of factors:
1. Proportion and type of cement
2. Type, proportions, grading and quality of aggregates
3. Water content
4. Method of accuracy of batching, mixing, transporting, placing, compacting and curing concrete.

The majority of concrete foundations contain ordinary cement, although this may be varied special circumstances. The customary standard mix is 1:2:4.

Foundation Selection Factors
o Soil conditions
o Type of structure
o Structural load economics of foundation types
o Time available for construction
o Life of building
o Future use of building

Settlement is the vertical downward movement of a foundation on a compressible soil.

Causes of settlement
1. Consolidation of soil particles
2. A reduction in the moisture content of certain soils which shrinks on drying out
3. The general movement of the earth due to various causes
4. Overloading the soil

The foundation is the most fundamental aspect of Jamaica beach homes as no matter how good a design is, it will not hold up if the foundation is weak.

01 Jul 2016

The Challenges of Wholesaling Owner Financed Properties

Investors wholesaling homes have been prompted to search for owner financing deals from the beginning, but while potentially highly profitable, can also come with their own unique sets of challenges and dangers, especially in the current housing market.

Wholesaling seller financed homes, lease options, rent-to-own deals and properties with owner carry back mortgages or other types of assumable financing can open many doors for real estate investors. Owner financing means not having to obtain new bank financing to make acquisitions or flip houses, and even if simply flipping real estate contracts can make the resale side far easier.

Today these deals can be incredibly valuable and attractive to new wholesalers getting started with limited resources and little or no cash of their own or credit. Similarly they can also help veteran investors to take full advantage of current market conditions and ramp up their volume to make even more money.

These strategies have come around full circle to being very popular again due to tight mortgage credit and the roller coaster ride home values have been on over the last seven years. However, while seller financing deals may appear to be a dream come true and offer the ability to turn around homes faster and easier with little to no money down there are potential kinks that can trip up investors causing them to lose money and time, and see their reputations bruised if they aren’t aware of them.

So what’s wrong with wholesaling lease options or homes with seller financing?

Many see these as being zero risk deals as little or no new money is injected and normally nothing reflects on personal credit. However, there are two main threats in the current market that real estate wholesalers should be aware of.

1. Ability to Resell

Whether wholesaling lease options or owner financed contracts investors need to complete thorough due diligence to ensure that properties can be flipped, and on the terms promised. Today the marketplace is ridden with underwater homes and properties with a large variety of liens on them. This can prevent resale or refinancing, or at least soak up so much equity that it isn’t feasible or profitable. So make sure you know exactly what issues may affect title prior to signing.

2. Ability to Refinance

Many of those wholesaling lease options or properties with seller held private mortgages don’t give a second thought to the ability of end buyers to refinance down the road. They are in, out and paid well before then. However, if end renters or buyers aren’t on a plan to fix their credit and are carefully documenting their payments they could find it impossible to refinance into a long term loan before a private mortgage balloons or lease option expires.

This may not immediately and directly affect your own wallet, but it can affect long term performance. The more you do to educate and help both sides make it a smooth, profitable transaction, even when you are out of it the more they will share you and send you referrals.

01 Jul 2016

Real Estate Tips: Staging Homes For Sale

Most sellers know that it is important for their house to look its best to stand out amongst all of the homes for sale. No matter how many marble countertops and double sinks you install, your house still needs to be staged to sell. So what exactly is staging? Staging is essentially setting up your house to remove all personal touches and making it look like a space that could appeal to any homebuyer. Potential buyers don’t want to see or feel you in the space. They want to see a blank canvas that could work for them. You don’t want empty rooms, however, as people need to see the potential of a space. Sound confusing? It’s really not! Read on for some simple staging tips and see how fast your home sells!

In The Kitchen

– Remove all appliances and clutter from counters. They should be completely clear. While you’re at it, make sure your appliances are as clean as possible.
– Clear out your dishes. Leave behind one set of matching dishes in your cabinets or cupboard and display them neatly. This allows buyers to see how open the space is and how they can utilize the storage.
– Clean out cabinets and the fridge, as well. Again, you want your kitchen to look as neat as possible so buyers can really see all the space.
– Create a welcoming ambiance. Have the table set with plates, napkins, and seasonable d├ęcor. Some real estate agents even suggest baking cookies for the delicious, homey smell it lends to your home.

In The Living Room

– Remove items from shelving and other surface areas. This also includes pictures hanging from the walls. Buyers need to be able to picture their own families in homes for sale, and lots of personal mementos make that difficult.

– Make sure the carpet is clean. This is one of the first things people check for.

– Arrange your furniture so that it highlights the best features in the room. Get rid of pieces that won’t make sense to someone else. If you have a ton of furniture, it might be a good idea to put some in storage so that visitors can really get a sense of the room’s space.

– Place fresh flowers in a vase on the coffee table or side table. This is a small detail that can really make a space feel like home.

In The Bathroom

– Get rid of all the products in the shower and on tops of counters.
– Clean out medicine cabinets.
– Replace rollers on sliding doors. This is a cheap fix, and will make a difference when viewers try to enter the shower to look in.
– Invest in a new set of towels for showings. This makes the bathroom seem well decorated and organized.

In The Bedrooms

– Clear off dresser tops and nightstands. Again, you don’t want personal items displayed.
– Keep your closet as empty as possible. Visitors will want to imagine how many of their items they could fit in there.
– Invest in new linens. The idea is for your room to feel like a nice hotel room.
– Make sure the windows are clean.

Staging is simple and makes a big difference when you are trying to make your property stand out among the hundreds of homes for sale in any particular market. Follow just a few of these tips, and you’ll notice a big change in how potential buyers react to your home!

01 Jul 2016

Win Your Next Property Tax Appeal in Texas – 10 Basic Steps

First – Learn the Facts

You are most likely to succeed with your property tax appeal if you find factual errors in your property tax record, also known as an “appraisal card”. Mistakes in real estate appraisals, such as errors about the age of improvements or incorrect square footage measurements are not uncommon.

After you file a Notice of Protest, the appraisal district will schedule an informal conference with one of their staff appraisers. Bring any proof for your case to the appointment in the form of photos or other documentation supporting your claims. The appraisal district will need to keep your evidence for their file, so remember to bring extra copies.

Understand How Your Home Has Been Appraised

Harris County Appraisal District [HCAD] has over a million single-family residential properties to appraise. Montgomery Central Appraisal District [MCAD] has responsibility for valuing about 250,000 homes. The daunting reality is that there are not enough well-trained staff appraisers to go around.

In the real world, appraisal district employees sometimes are not able to inspect much beyond new construction or additions. Even when properties are inspected, the examination may be hardly more than a drive-by. It is more common now for appraisal districts to rely on aerial pictometry for various aspects of property inspection. The level of technological resources now available to most appraisal districts is impressive.

Given the overwhelming number of properties that must be re-valued, these appraisal districts are dependent on computer mass appraisal models. The mass appraisal models that counties use are inevitably imperfect, although some are better than others. Your quest will be to determine the ways and the degree to which your property and your neighborhood have not altogether fit the model.

You may ask a real estate agent to help you find some comparable homes and their actual sales prices. Most good agents don’t mind helping you, because you may work with them later. Remember you want to be able to prove that your house is in a lesser condition than the comparable sales. Try to compare your home to the best ones in your neighborhood. If you can find information on better homes that sold below your assessed value during the prior year, you may have the grounds for a reduction.

Research the Value of Your Neighbors’ Homes

The easiest way for most homeowners to develop an appeal is to use the sales comparison approach to market value in their appeal, however the sales do not always favor your case. Another angle you can try is to determine if your home has been appraised in a “uniform & equal” manner to other similar properties in the same neighborhood.

Check if the appraisal district’s value of your house is at, or below, the median of the tax appraisal value of other homes in your neighborhood. Texas appraisal districts will have this information available online through their websites.

Obtain the Appraisal District’s Evidence

Along with your “Notice of Protest”, submit a request in writing for all the evidence the appraisal district used to value your home and intends to present at an Appraisal Review Board [ARB] hearing. It is also referred to as the House Bill 201 [HB 201] packet. Review this information to ascertain how the appraisal district determined the value of your home. You may find that this uncovers shortcomings the appraisal district’s case.

Don’t Lose Hope – You Have a Few Chances to Get It Right

If you are unable to settle your case one-on-one with a staff appraiser in an informal conference, the next level of administrative appeal is a formal Appraisal Review Board [ARB] hearing. Montgomery Central Appraisal District [MCAD] will have your formal hearing the same day. They immediately escort you down the hall and show you to the waiting area to present your case. Harris County Appraisal District [HCAD] will reschedule you to return to their office on another day to have a formal hearing. You will almost always wait two weeks.

The ARB hearing will be like a minor courtroom setting in which you make the presentation of your case. An experienced senior appraiser will represent the case on behalf of the appraisal district. A panel of at least three, supposedly impartial, appraisal review board members will hear the case and render a final decision. Important Warning: The ARB has the authority to actually RAISE your property value, so consider this risk. Also, do not forget to bring extra copies of all your evidence ( five altogether ) for the appraisal district and the ARB panel.

If your formal ARB hearing does not have a satisfactory outcome, you may still have two additional options available. For residential properties valued below $1-million, you can file an application for binding arbitration through the office of the Texas Comptroller of Public Accounts. There are fees of $250 or $500, depending on the level of involvement of your case. The other option is to file a law suit in district court against the appraisal district. As both of these procedures are time consuming and costly, you will need to decide if they are practical in your case.

Get Started – 10 Action Steps

1. Get a copy of your property tax record, or “appraisal card”. Texas appraisal districts will have this information online through their websites. If you cannot find it, call the appraisal district office for assistance.

2. Review the appraisal record for errors in your favor.

3. Find out if you are eligible for any special exemptions and apply for them. Examples are the Texas general homestead, over 65, disabled, or veterans exemptions.

4. File a “Notice of Protest” before the statutory deadline. This is usually May 31st or within 30 days of sending your “Notice of Appraised Value”.

5. Study the appraisal district’s evidence, the HB 201 packet.

6. Try to get help from a real estate agent to identify the details about good comparable sales (… and remember who helped you whenever you have a real estate transaction that pays ).

7. Take photos of your home and the other properties you are using for comparison. If you do not have a good camera, borrow one; or ask a friend to help you.

8. Make detailed written notes about precisely what you think should be the right value and the reasons for the reduction. Prepare your presentation and be able to show the proof to support your claim. This needs to consist of factual evidence such as dated photos, documentation of recent sales, and neighbors’ appraisal values.

9. Be kind and respectful to the other appraisal district staff and ARB members. Never forget they are also human and have feelings, like you. Remember the time tested expression, “You can catch more with honey than with vinegar.”

10. If you think it stands in your best interest, appeal your case to a formal ARB hearing. This may be a roll of the dice though. Depending on the make-up of the panel and their state of mind on the particular day of your hearing, your ordeal could be more favorable or it could become even worse.

01 Jul 2016

How to Start a Foreclosure Cleanup and Property Preservation Company

A new article on June 3, 2009 from MSN Money writer Michael Brush indicates that there is a third wave of foreclosures still to come from prime borrowers (i.e. those previously “safe-borrowers” with sound credit and fixed-rate mortgages) as a result of job losses thanks to the worsening economy (“Coming: A 3rd Wave of Foreclosures”).

The article states that “In the first quarter, the percentage of these borrowers who were behind on their mortgages or in foreclosure had doubled from a year earlier, to nearly 6%” and goes on to say that “Credit Suisseanalyst Rod Dubitsky predicted last week that 8.1 million mortgages, or 16% of all mortgages, will go into foreclosure over the next four years. A weak economy, continued declines in home prices and rising delinquencies among prime borrowers all but ensure that foreclosures “will march steadily higher,” he says.” Not such great news for the economy, but good news indeed for entrepreneurs interested in starting a foreclosure cleanup business to clean and repair foreclosed homes for the banks.

To put this in perspective, this means that there will be over 2 million foreclosures a year and more than $2,025,000,000 up for grabs in money that will be spent on cleaning up these foreclosed properties (since the average bill is $1000+ to clean up one of these properties).

Let’s take a look at how you can position yourself to capitalize on this coming foreclosure movement

Set Up Your Company Properly

If you want to be hired for cleanup or preservation work, you’ll need to operate your business as a professional company. The good news is that you can set up a business quickly and inexpensively, and usually on your own. Many people decide to set up an LLC (Limited Liability Company) because of how quickly and easily it can be done but you’ll want to check with your accountant or other business professional to select the type of business entity that’s right for your personal situation.

If you do decide to start an LLC, you can usually find all of the documents you need online from your state’s government website. Usually the branch you’re looking for will be called the “Industrial Commission” or “Corporation Commission” or similar. Try typing in “start a business + ______ (your state)”. Anything ending in “.gov” is usually a good place to start as it indicates a government site.

Once your business is set up, you’ll need an Employer Identification Number (EIN), which is like a SSN for your business. You can register for one online: type in “IRS” & “EIN” into a search engine to find the online registration link.

As soon as you have your EIN (which you can usually get immediately online), you can open up a business bank account for your company. This step is very, very important. In the excitement of things, many people get caught up in the day-to-day dealings of running a business and use their personal accounts to pay for business expenses. Not only does this present an accounting nightmare at the end of the year, but it could present problems for you with the IRS if you don’t keep your personal and business finances separate.

Once you legally set up your business, you may be required to register your business with your county or city in order to get a business license to operate. You can start by calling City Hall or the Office of the County Clerk to inquire as to whether or not you need a city/county/state business license and if so, how to get one.

So to recap:

1. Legally set up your business
2. Get your EIN # and set up a business bank account
3. Apply for a business license
4. If you want to do preservation work, determine whether or not you need a contractors’ license

Get Insurance

You absolutely must have a Commercial Liability Insurance policy and Workers’ Compensation Insurance in order to run your business. Not only is insurance essential for protecting yourself from liability and protecting those that work for you in the event of a work-related injury, but many asset management companies will not do business with you if you do not meet their minimum insurance requirements.

Insurance will likely be one of your largest start-up costs, however, most insurance companies allow you to pay the premium on a monthly (rather than yearly) basis, which definitely makes this expense more affordable.

General Liability Insurance policies can cover the following: bodily injury, property damage, contractual liability, personal and advertising injury, professional liability (also known as Errors & Omissions (E&O) insurance, this coverage protects you and your business from litigation caused by charges of professional neglect or failure to perform your professional duties), hired auto and non-auto liability and umbrella liability.

You’ll want to speak directly with your insurance agent to get a better idea of the extent of the coverage provided by their particular policy and one that is best suited for your individual needs

Workers’ Compensation Insurance is required in most states when you have W2 employees, and some states also require your insurance to cover your 1099 contractors also. Workers’ Compensation (“Workers’ Comp”) covers your employees’ medical and disability expenses related to work-related illness and on-the-job injuries.

In the states where you are not required to cover your 1099 contractors you would need them to provide proof that they carry their own Workers’ Compensation insurance. Although tempting to shift the financial burden of maintaining a policy onto your 1099 contractors, in all reality, you are probably better off to take on the cost of all staff Workers’ Compensation (all W2 employees and 1099 contractors). The reason is that it’s difficult to find only independent contractors that have their own policy. In addition, this industry has such high turnover that if you put this restriction on your independent contractors, you’ll waste valuable time and lost revenues trying to find replacements in a hurry.

Here’s a great tip: sometimes you can get “pay-as-you-go” insurance where your workers’ compensation insurance premiums are based on your actual payroll, rather than an estimated amount. This is great for companies that are just starting out or have a fluctuating workload. Type in “pay as you go workers comp” into a search engine for results in your area.

As a second tip, we’ve used Farmers Insurance for years and have always had excellent customer service and great rates. Just Google “Farmers Insurance” for an agent in your area.

Foreclosure Cleanup v.s. Property Preservation Services

As the name suggests as a Foreclosure Cleanup Company, you’ll be cleaning out all of the junk in the house (also called a “trashout or a “junk out”), as well as cleaning the interior of the home. You may also be required to remove vehicles on the property. Usually foreclosure cleanup companies are also responsible for doing a basic landscape cleanup which includes hauling out any junk from the front/back yards, cutting the grass and trimming trees/bushes.

Cleaning up the property is the extent of services offered by a Foreclosure Cleanup Company, whereas a Property Preservation Company is also involved in the “securing” of the property and the “preserving” of the property.

Here are some of the services that a preservation company may offer (note that a Property Preservation Company will generally also offer cleanup services):

Securing the Property
o Initial vacant property inspection
o Lock changes
o Boarding of windows and doors
o Temporary roof repair
o Securing swimming pools

Preserving the Property
o Exterior Debris removal
o Abandoned vehicle removal (cars, boats, etc.)
o Interior Debris removal (junk-out)
o Hazardous waste removal
o Interior cleaning services including carpet cleaning
o Window washing/graffiti removal
o Window replacement
o Pool services (draining, acid washing, maintaining, etc.)
o Pest control services
o Yard maintenance/landscaping
o Snow removal
o Winterization
o Gutter cleaning
o Pressure washing
o Carpet removal & replacement
o Tile/Floor repairs
o Painting
o Sheetrock/drywall repairs
o Carpentry repairs
o Plumbing fixtures repairs & replacements
o Fire & mold remediation
o Fence repair

Here are a few things to consider when determining the extent of the services you want to offer:

A Contractors’ License is generally not required for Foreclosure Cleanup Company but is likely required for preservation companies doing work over a certain dollar value (usually $500 – $1000+). Sometimes this license can be obtained by attending a course and successfully passing a test whereas other states require previous, verifiable industry experience.

The insurance premiums tend to be higher on companies that offer preservation services as they are considered to be a “general contractor”. However, the revenue potential is much higher as preservation services tend to run from a few thousand dollars upwards instead of $800 – $1500 for each cleanout.

Usually what people do is start out initially offering just the foreclosure cleanup services and then when things pick up, they’ll add preservation items to the list of services they offer. This let’s them get their foot in the door without having to spend a whole lot of money upfront when setting up their company.

Source the Right Equipment & Tools

The great thing about starting a foreclosure cleanup company is that the initial expenses are quite low as much of the equipment and tools needed for cleaning foreclosures can likely be found in your own garage:

o Cleaning chemicals (i.e. all purpose cleaner, disinfectant, toilet bowl cleaner, window cleaner)
o Cleaning supplies (broom, mop, scrub pads)
o Vacuum cleaner
o Garbage bags and shovels
o Work gloves and disposable plastic gloves
o Lawn mowers & lawn tools
o Wheelbarrow

For the smaller items you don’t have on hand, check your local dollar store. Their prices can’t be beat and they usually have the same chemicals and cleaning supplies as the other retailers. Once you start doing some volume, consider shopping for your supplies at Sam’s Club or Costco to keep your expenses low.

You can also find used equipment in great shape (such as vacuums) by going around to your local Saturday morning garage/yard sales. If you have a “Re-Use” center or a Salvation Army, you may consider checking there also as they often have vacuums and other small equipment or yard tools for sale.

For hauling junk, you’ll need some sort of trailer and a vehicle large enough to pull it. If you don’t have a truck and a trailer, you can always borrow a friend’s truck and rent a trailer from U-Haul or just go ahead and rent a moving truck from U-Haul. (Remember though, that you’ll be charged a daily rate plus a per-mile rate when you rent a moving truck whereas if you use your own truck and just rent the pull-trailer, you’ll only incur the daily rental rate for the trailer.)

Sometimes you’ll be required to clean a property that doesn’t have electricity or water. In the event that there’s no electricity, you’ll need a generator to operate the vacuum cleaners and other electrical equipment. These can be rented at Lowe’s or Home Depot and is a much better alternative to purchasing one outright unless you’re going to use it on a regular basis (a new one will run you about $500+).
To save on expenses, it’s best to rent equipment in the beginning.

Once you get up and going, it may be worth looking into purchasing equipment of your own. Check the online classifieds ads (such as Craigslist, Kijiji and Backpage) for used trailers, generators, etc. You should also check with U-Haul as they have been selling some of their excess trucks as of late.

Stay Safe on the Job

As a business owner, you’re responsible for keeping your staff safe while working on the job. Working safely is paramount to the health of your staff and the reputation of your business (and also keeps your insurance premiums low). It’s imperative that you review safety issues prior to allowing anyone to work on the job – you must provide both classroom and on-the-job safety training to all new hires.

Now, it doesn’t have to be anything fancy; you can spend 20 – 30 minutes reviewing safety policies, safe working practices and answering any questions and then you’ll be done! Make sure you have people sign in and out of the meeting and that you document that a safety meeting took place.

It’s also very important that you become familiar with OSHA and Safety Standards as well as the health & safety hazards associated with this industry so that you can keep your staff safe, avoid accidents and costly fines. You can find the OSHA Pocket Guide to Construction Safety (it’s a short and an easy read) at the main website (OSHA DOT gov) by searching for the report name.

Another way to protect your staff and your business is to make sure that you check references before you hire someone. Insist that they list non-related references (i.e. not mother, sister or best friend) and instead list references of previous employers or someone they know in a professional capacity. We also do drug testing and background checks – it might sound paranoid to some, but the safety of our staff, our customers’ property and our company’s reputation is far too important to risk not spending $20 on a background check or drug test.

Price Your Services Right

In this industry, the lowest price always wins the bid (unless, of course, the lowest bidder has a terrible track record of not completing work and is utterly irresponsible and unprofessional, in which case the company has just committed “reputation-suicide” and will never be hired again). Lenders don’t want to spend any more than they have to on these properties so you want to make sure you price your services comparable with the going market rates (but at the same time, priced so that you still make a great profit and don’t leave any money on the table).

For cleaning out foreclosures, most banks expect to spend anywhere from $500 – $1500 for a cleanout (trashout, interior clean and initial landscape cleanup), but it could be a bit more or a bit less, depending on your area. It’s important to know that most lenders have prescribed “price caps” for the maximum amounts that they’ll pay for services.

If you’re also providing preservation services, a great site that we’ve used before to determine our prices for doing repairs is for getting the market rates for construction costs – you can get a free 30 day trial (no need to enter credit card – it really is free!). There are over 3,000 cost items adjusted for over 210 local, geographic regions to create your bid and you can add as many others as needed. If you want to sign up after the trial, it’s only $15/month.

Market Your Services

It’s true – “nothing happens until somebody sells something”… and you’ll need to get out there and sell, sell, sell your business. Once you’ve done a few jobs, you’ll find that word of mouth advertising and referrals will provide a large pool of new jobs for you, but in the meantime, you do need to do everything possible to let customers know you exist.

A large portion of work will come from the relationships that you build with Real Estate Agents (“Realtors”) who list bank-owned homes (often referred to as REO listings). They are often given the task of bidding out the cleaning and repairs of new listings by the asset management company so you’ll want to make sure the agents in your area know your company handles this type of work.

A great way to find out which Realtors in your area list REOs is to go online to the major bank’s REO websites and “data mine” the contact information for the listing agents (name, email, phone numbers). It can be painstaking work, but definitely worth it.

Here’s an example of a bank REO sites to get you started collecting Realtor information

WELLS FARGO (Properties managed by Premier Asset Services):

NOTE: In order to access agent information, select the state and click search. Then, individually select each listing and click on “Print Property Report CVS”. Each listing and corresponding information (such as agent name, phone # and email) will be created in an Excel spreadsheet. You can access the page

Remember to follow up with a phone call a few days later. Don’t be shy about asking the Realtor if he/she has any jobs for you to bid, either – most of them are very accommodating and willing to give a new company the opportunity to provide estimates.

The other way jobs are bid out is through large Asset Management Companies (also referred to as Marketing & Management Companies, REO Field Service Companies and Property Management Companies). Essentially, the lender says, “ok – I have thousands of properties to get rid of. Here, national ABC Asset Management Company: clean, fix and sell these properties for us”. And the national Asset Management Company will then subcontract out the work to local foreclosure cleanup and property preservation companies. In order to work for these companies, you usually need to sign up your company as a potential vendor. Many times this can be done online.

There are both positives and negatives associated with working for the larger companies. On the positive side, you will probably be given a few projects to work on at a time so you will be kept relatively busy. On the negative side, they usually want you to offer ‘wholesale pricing’ and don’t pay until 30 – 60 days after you invoice them for the work. Working for one of these companies, however, will give you the experience you need to go after more work.

Other possible customers include wholesale property investors (groups of investors that purchase foreclosed homes at the auctions and then sell them to smaller investors at a wholesale price), investors, landlords, property management companies, Realtors and so on.

You should also consider attending your local networking events such as the Chamber of Commerce meetings and any local investor meetings in order to hand out your card and network with potential customers. The more you get out there, the better chance you’ll have of securing some great, long-term customers!

01 Jul 2016

How to Buy Foreclosure Homes – A Real Estate Investment Opportnuity

Foreclosure filings against homeowners have increased dramatically in the last few months.

In some areas, this increase is 30-40% higher than it was last year. Experts say that foreclosures have doubled over the last three years in many places.

Homeowners have struggled to cope with high prices, rising interest rates, and mortgages that are adjusting. This is the fallout.

Over the past few years, mortgage lenders devised many new loans to help buyers afford homes. “1.00% MORTGAGES!!” “$800/MO FOR A $300,000 HOME!!”

Buyers came out in record numbers. 100% financing and record-low interest rates helped some people who previously could not afford homes, become homeowners, and that helped stimulate the most incredible real estate explosion on record.

In Nevada, where I live, nearly 62% of all mortgages are interest-only and ARMs. We are second only to California. However, today interest rates are higher. Combine this with a soft real estate market and you now have a squeeze on homeowners who are struggling to make the higher payments on adjustable-rate mortgages or are forced to refinance their loans to attempt to lower their payments.

For example: Let’s say you did 80% financing on a $300,000 home in 2004 and you did a 3 Year ARM at 5.000% with a margin of 2.75%. Your mortgage payment was $1250 per month. It was tight but you figured you could afford it.

When that loan adjusts this year (margin + current index) you could be facing an adjustment to 8.000%. This would increase your payment to $2000 per month. You cannot afford your home any longer.

Sure, you can refinance it and maybe only increase your payment by $100-$200 per month from the $1250 but what if life circumstances have changed? Like your credit is not as good? You may have a lot of equity so you are still OK, but what happens in a slower market where you are not gaining much? Or you have removed all of your equity through a credit line? Or your home has depreciated since that purchase? The slower real estate market compounds the problem.

In recent years, homeowners with risky mortgages could take advantage of the rising value of their homes by refinancing at lower rates. Or by selling.

With housing prices stabilizing or decreasing, the refinancing option is not available. With a vastly inflated inventory of houses on the market and a 30% sales decline from last year, selling is not as viable an option. Quite simply, rising interest rates and decreasing home values spell disaster.

In 2003, when the market was on fire, the amount of 30 day delinquencies was half what it is today. Foreclosures are much more common today and many experts believe they are going to increase substantially in the coming years.

OK, so what does this mean to you and your buyers? OPPORTUNITY!!!!

Buying a property out of the foreclosure market is one of the best opportunities available in all of real estate. However, it is not easy and takes a lot of work.

It’s not unusual to save from 10 to 30 percent of the market value on a foreclosure property if you know where to look.

However, don’t be lured into thinking this is a get-rich quick scheme. Most foreclosed properties sell for less than 5% off market value. The key is research, preparation, patience and persistence.

Experts say that the investors who do best in the foreclosure market spend 30 – 40 hours per week working it.

There are many internet websites like that detail these properties and you can also get a list of properties going into default from the marketing rep at your preferred title company.

There are many different stages to the foreclosure process but two are most important to you.

The first is notice-of-default (NOD). This is when the lender notifies the borrower that a default has occurred and that legal actions COULD proceed. This is very early in the process. Once you get an NOD you probably have a few months to cure the default before you are actually foreclosed on. This is the best place for you as an investor to try and get the property with the best possible discount.

The next is notice of trustee sale (NTS). This is much more serious. This means the lender has set a date to sell your home at a public auction. As an investor, you will have to bid against the competition.

The margins here are much tighter and you need to have much more knowledge about the property, its value, and its potential before moving forward. The investing window of opportunity opens the day the Lis Pendens, the notice that a legal action is pending, is filed. The window closes the day the property is sold at auction.

The time between these two events enables an investor to work with the homeowner and lender to create a workout strategy or a purchase of the property from the homeowner before the sale date.

The amount of time the window remains open depends solely on state and local laws, as well as the behavior of the property owner. Most states sell properties within 90-120 days from the first notice of default.

There are many books and internet sites that tell you how the many different ways to buy pre and bank-owned foreclosure properties. For the purpose of this newsletter, let’s stick with the most profitable method. The pre-foreclosure.

Let’s examine the best way to try and get you or your client a home at a serious discount.

Here is what you need to do:

Get pre-qualified for a loan so that you can act quickly if you find a property.

Find out what properties are in default through one of the websites like or through your preferred title company.

Evaluate these properties and narrow your selections based on most possible return.

Contact the homeowner. Inspect the property thoroughly and the default loan documents.

Determine the homeowner’s needs…does he need quick cash or to simply get out?

Know all of the liens on the property and the payoffs that a purchase will require.

Calculate your selling price and the potential profit based on current market conditions.

Negotiate with the lender, the owner and any lien holders.

Close the deal, repair as necessary and sell for profit!!

This is much easier said then done. Keep in mind, the homeowner is being slammed with letters from the bank, attorneys, and bill collectors. Some may even be showing up at his door.

You are not alone in this idea. There are other investors like you contacting him as well. You all have three ways to contact him. In person, by mail or by phone.

You have to understand, many people being foreclosed on become upset with the amount of negative contact so they are not in a very responsive position to listen to what you have to say.

It’s best to start with mailings. Let the homeowner know that you are interested in his financial problem, you have a solution and as a real estate investor, you specialize in homes in his area. Let the homeowner know in your mailing that you can help him stop this foreclosure, possibly still save his credit, and maybe even get him some additional cash.

Be creative and different with the mailing! A former client of mine used to send a $50 bill to each pre-foreclosure property owner with a simple note that basically said, “I care about what you are going through. Please find $50 to help out. When you call me to thank me, let’s discuss some ways I can help further.” It was expensive, but brilliant and it worked! I shared this with a 27-year-old investor I work with and he has been having success doing the same thing.

After you send this first letter out, don’t be overly aggressive. Give the borrower a few weeks and then follow up by mail or phone. As you get closer to the auction date, stress the urgency. Always stress that you want to help.

Always be courteous and understanding. This person is facing one of the most difficult financial challenges of their life and they are being completely overwhelmed by attorneys and creditors. You need to be the “savior,” not another person hounding him.

All you want to do for now is get a meeting to determine if he is even a candidate for your assistance. When you get your meeting, make sure the homeowner has all of his loan, mortgage and insurance documents available, as well as the foreclosure notices.

You need to carefully review these to determine profit potential. If you are going to make an offer on the property, you must have the loan, ownership, and debt or lien information. You must also assess the condition of the property.

Combined with the market value and the default amount, you have all the ingredients necessary to formulate your offer. Some investors in foreclosures even make the very courageous move of visiting the property in person without an appointment. One of my investor clients firmly believes in going door-to-door.

However, you have to be prepared as you may end up meeting with an angry homeowner who doesn’t appreciate you showing up at his door. Be polite and leave if you are asked to. Never, under any circumstance, snoop around, inspect or generally trespass unlawfully on somebody’s property. You are there to be a “savior,” not a snoop.

When you finally get your meeting, you need to quickly assess the needs of the homeowner. Is he looking to save his credit? Is he looking for cash? Does he just want to be bailed out? Is he on the verge of bankruptcy? Is there something else he fears? Does he want to stay in the home on a rent-back basis until he can get his feet on the ground?

If you meet his needs, he will be much more receptive to your offer.

Inspect the property with the homeowner as you were a home inspector. Use an inspection checklist and record your information and estimated costs of repair.

Many owners of homes that go into foreclosure have been struggling financially for a while before they give up. This likely means the house has not received needed repairs or general maintenance for a while. Experts say to NEVER make an offer at this point or give the homeowner any money.

If you like the property and think you want it, make an appointment to meet with him again, go home, crunch the numbers, analyze all of the liens and payoffs, and come back with your offer. Make sure you factor in all closing costs before determining this price.

These homeowners are not as likely as savvy as you. They are also very skeptical. Changing the offer once made because you made a calculation error will not come across as a simple mistake. It will likely kill your deal.

Make sure you carefully review all liens on the property that have been filed. You will also want to ask the homeowner if there are any other liens that may “pop” up later.

If you want to be taken seriously as a buyer, you must be realistic when preparing an offer. Homeowners, regardless of their situation, aren’t likely to give properties away. They know the value of their home on the open market and will likely lose it before making a deal where they feel ripped off.

01 Jul 2016

Looking For A Home Try Out a Reliable Property Home Swapping Service

Home swapping is a relatively new concept and after the commercial success of the Kate Winslet and Cameroon Diaz starter Hollywood flick The Holiday, home exchange has become a fancy business. The internet is full of home swapping websites that are diligently catering to this increasing breed of customers who are ready to exchange their home with new people. This is a new and cost effective way to plan a vacation and replace your home for a certain time with other likeminded people. You can make the most of this facility since this is available in both the national and international market.

Though it is quite natural to be skeptical at first about transacting with unknown people, you will soon realize that you are dealing in a secure and friendly online platform. Once you are assured that you will be safe, you can explore the various lucrative offers that property home swapping has in store for you. You may come across some members in the website who are eager to visit your place and stay at your accommodation. Likewise, you might also be willing to venture out to an entirely new location or even a new country. This way, you can save a lot on costly accommodation and travel expenses.

Vacation home swapping also enables you to stay in a rent free house where you will not only get a home to stay but also free meals. You can also arrange with your swapping partner to exchange cars. All you need to do is find a suitable party and make the necessary arrangement before finalizing on the exchange. You can take an unlimited number of holidays with other home exchanges during your membership. What is unique about this entire concept is that you not only get to exchange homes, but also widen your horizon and meet new people, learn about different culture and tradition, try new cuisines and have lots of fun.

International house exchange comes with lots of advantages. For instance, if you are travelling to a new country, you will have to take care about numerous things most important being hotel stay, travel expenses and sightseeing. However, if you opt for an international house exchange, everything will be taken care of by the other party, provided you do the same for them. What’s more, you need not have a luxurious house or apartment; it should simply be large enough so that a family can comfortably stay for a few days. No one demands to exchange like for like, only that you should be open about the amenities and facilities available in your house.

Keeping in mind that a whole new world awaits you, join a reliable home swapping website and become a trusted member of the group. In order to do this, search for house swap USA and you will be greeted with a number of websites. Once this is done, you will come into contact with people from across the globe. Share your plans and ideas with other members and be a part of the fun and entertainment.

01 Jul 2016