If you are looking for a bad credit real estate investor loan, pay attention here. This article will show you how to land a good deal that will get you financing…
We’ve been over and over it: Your job as a real estate investor is to find a good deal, and if you find a good deal there is more money than you could ever imagine available to you to fund it. You will always get a bad credit real estate investor loan as long as you find a really good deal.
So now let’s talk about how to find a good deal that will get you a bad credit real estate investor loan…
I frequently tell people that I do not care if the real estate market goes up or down. I just care that it moves. I have had people telling me that I’m insane. If the market goes down that is not good.
News flash: Nothing could be further from the truth. What you want as a real estate investor is volatility because it opens the way for opportunity. Volatility brings opportunity, and real estate investors are opportunity seekers. If things are fluctuating, there is opportunity, which is the lifeblood of successful real estate investment. There has never been a better time to find amazing properties and amazing deals than the market we find ourselves in right now. What you need to do is find volatility.
Thousands of people are going to experience volatile situations, and I actually want to take you through the process of volatility for a homeowner. First, something is going to happen in the life of a homeowner. They might get a zoning notice because they are illegally renting the downstairs apartment, or it may be that their roof has a problem and they can’t afford to fix it, or maybe they are going through divorce or have lost a loved one and the property is going into a probate situation.
It may be that they are doing a Chapter 7 or Chapter 13 bankruptcy. It may be that they have a job that is transferring them to another state and they now have two homes.
Perhaps they rented the property out and tenants have just trashed it, and now they want nothing more than to get rid of this property. Maybe they bought a property that they aren’t in love with and need to move, or they need to be closer to family members. There are all kinds of volatile situations that can arise with an individual, not to mention having their interest rate go up on their loan to a level they can no longer afford.
There are so many different ways that volatility relates to an individual homeowner, and that volatility becomes opportunity for you as a real estate investor. As a real estate investor it is about creating value. Money and earning money are about value exchange, when it comes down to it.
When you go into a restaurant and sit down for a nice dinner of steak and potatoes, the waiter comes out and takes your order and then goes back and tells the chef to prepare this fine meal for you. It is plated beautifully and has a fabulous aroma, and you are there with your significant other enjoying the atmosphere. When you are done with the meal, you exchange value; the value of that experience and of that steak dinner was worth more to you than the $100 you are going to pay for that dinner.
So, what you are saying is, “I am willing to exchange value. The value of the experience was worth more than the value of the money to me.” Everyone has a different value proposition.
For some people it would have to be enormously nice, and they will be willing to pay enormous amounts of money; and other people don’t need things that nice or they are not willing to pay that much money. There is a value exchange, and understanding this value exchange will help you be successful as a real estate investor.
As we talk about opportunities and we talk about people that are going through some type of a hardship or change, and the volatility in their personal lives, remember that the key to getting to those people is to offer them value. That’s how you can become successful with your real estate investment.
Offer them something they want that is more important than what they have. If you can trade something that you have for something they want, then you can be successful as a real estate investor. Just as importantly as your success, you can be helping people exchange what they have for what they need or want.
Next, I want to talk about volatility that happens. Once a homeowner is unable to make payments, then more volatility occurs. There is a notice of default that is filed by the financial institution hold loan, and that is basically a public notification. This notice gets recorded, and everybody can find out what is happening on that property. They are able to see who the owner is, property address, and that type of information.
After that, there is a redemption period, during which the homeowner is able to try and redeem the loan before the foreclosure process begins. Once that happens; typically a notice of sales is filed, and that notice tells people who may be interested in buying this property, or that may have a lien on this property, to show up on this date, at this time, and place a bid. This is the typical process for foreclosure.
The timeframes for these will vary from State to State, but this is the overall process. The redemption period is another opportunity arising for great volatility for the homeowner, who may be very receptive to any kind of offer from you. Following the redemption period, there is the auction itself, where people will show up and make bids on the property. Sometimes no bids are made. Remember that you can always get a bad credit real estate investor loan as long as you find good property.
If the highest bid that is made is for more than the lender’s starting bid, then that money is due right away from the highest bidder. It is important to note that the bank’s bid may or may not be for the amount that is owed on the property. It is not uncommon for banks to have bid less than what is owed because they want the property sold. In other situations the bank may go for everything that is owed, plus fees, interest, and every dollar they can tack on.
It is really going to come down to the bank, the equity, the time of the money, and whatever else is going on with the bank’s overall financial picture. It is also important to know whether you are bidding on the first or the second position note. There have been many disjointed bidders that found out they purchased the property subject to a first mortgage that is substantially more than the property is worth.
In the event the highest bidder is willing to pay more than the bank’s bid, the highest bidder has to come with cash to pay off the lender, and the person with the winning bid then owns the property. If there are no bids, the property is now owned by the bank. If the property goes back to the bank, it typically goes to an asset manager, and there is a chance for a real estate investor to find and buy that property directly from the asset manager.
If the asset manager does not end up selling that property, then he will typically list the property with an REO agent, which stands for “real estate owned.” REO agents are specialists that work with banks to try and liquidate property; they are basically liquidation managers. They actually liquidate the asset.
If a bank takes a property back, they have to show it on their books as real estate owned (REO), which is where that terminology came from. The problem for the banks is that the properties they own diminishes the amount of future lending they can do, and so they have to get it off their books. As a real estate investor, you always have such golden opportunities. Don’t worry about getting a bad credit real estate investor loan. If you find good property, you will get the money.
Many times, banks will try to unload these properties as fast as possible. There is really nothing different between an REO Agent and a real estate agent. REO is just their specialty, meaning they specialize in helping banks liquidate properties they own in their respective areas.
In addition to REO properties, you have regular properties listed on multiple listing services. There are also HUD, FHA, and VA properties. There are short sale opportunities prior to foreclosure, and other pre-foreclosure opportunities. There are many, many, ways to find good deals, and again, your job as a real estate investor is to find a good deal. Once you find that good deal, it will attract money like a magnet, and you will be able to be successful as a real estate investor.