By Bill J. Gatten
Obviously for some, working foreclosures is a safe, lucrative and wholly moral enterprise. One doesn’t even have to have good credit or a lot of experience if done properly. However, my favorite way to work foreclosures is to do it without a penny out of pocket without need for a bank loan, credit or credit application, and ending up with pure profit and no payments, management or maintenance. (Got your attention? Good. Read on).
The problem today with working the foreclosure market is that the practice has garnered some bad press and an unsavory reputation (quite justified in many instances). It’s a fact that many investors have shown themselves to be blatantly unscrupulous when dealing with people in foreclosure. As a result, the practice of buying foreclosures has come under some very close governmental scrutiny as of late within the enactment of some quite stringent prohibitive laws in many jurisdictions (e.g., California’s civil codes 1695 and 2045). The reason for the government’s stepping in is obviously to curb the unconscionable treatment of the tens of thousands of homeowners in distress. These people who, while in their doldrums, are far too often unwittingly coerced into just giving up, and giving away thousands upon thousands of dollars of valuable real estate equity to those who take far more than they need, while offering nothing what-so-ever in return.
One popular ruse by those seeking big and quick profits has been to loan money to homeowners with which to cure their default, requiring that the borrower pay the loan off in full, with all principal and exorbitant interest in one year. When the homeowner is unable to come up with the money, the “benefactor” forecloses on the property costing the homeowner his home, his equity and his self-esteem, while he and his family end up on the sidewalk.
Another popular scheme has been to make the foreclosed-upon homeowner a long-term, fully amortized loan with exorbitant interest, with which to bring his mortgage current, thus increasing the monthly payment obligation well beyond what the homeowner has already demonstrated he couldn’t afford in the first place. At the first sign of slowness, foreclosure ensues, and the moneylender resells the property for tens of thousands in clear profit, leaving the homeowner scratching his, wondering what just happened.
Given all of this, the foreclosure market is still an excellent pathway to real estate wealth. There is now a far better means for making money in foreclosures, while honestly helping people in the process. With the following system, you can take over the distressed party’s burden and leaving all or some of their hard-earned equity in tact for them.
As an example, we came into a foreclosure opportunity yesterday (one of a few this month). We got the property for an agreed upon $500,000 though it is appraised at $568,000…with a $426,000 first mortgage on it at $3,600 per-month. Due to the way its being handled, the property will cost me nothing...I will have no payments to make, no risk to take, and I won’t need to qualify for a loan, fill out forms or provide anyone with a credit report. Moreover, I’ll make between $70,000 and $200,000 dollars on it (unless the planet explodes in the next seven years).
The deal is this: I merely mentioned to the party in foreclosure that if he wished to, he could just walk and I’d take over the payments, bring the loan current and repay him his equity in a few years. I explained that at the end of our agreement, his loan will be retired and from the proceeds, I’ll take a refund of my $26,000; and he will be paid $49,000 (his equity: $75,000 less my $26,000 contribution). Whatever remains will be my profit.
Picture the following if you will…
• Fair Market Value - $568,000
• Existing Mortgage - $426,000
• Arrearages - $26,000.00
• My Cost - $500,000 (less the $26,000)
• Equity Owed to Seller - $75,000 less the $26,000)
• My Own Beginning Equity –$68,000
Before consummating the transaction and being required to spend any money, I’ll take a Non-Exclusive Option to acquire the property in, say, 30-45 days…after completing all of my “due diligence” (e.g., obtaining the lender’s Reinstatement Quote, verifying balances, having the property appraised and inspected, checking on mechanics liens, utility liens, zoning ordinances, insurance, property taxes etc.) …and finding a resident co-owner.
During this option period, I will use the time to locate a suitable co-owner to live in the property, make the payments and handle all maintenance, insurance and property taxes—in exchange for homeownership benefits, including full income write-off for the mortgage interest and property taxes.
Once identified, the resident will come in at a mutually agreed value of $560,000 ($60,000 more than my acquisition price, and $8,000 less than FMV) and will pay between 5 and 7 percent of the agreed value up-front (e.g., $28,000 to $40,000, far less than a down-payment would be). Once the funds are ready and cleared, I’ll exercise the option and have all of the documentation prepared and executed.
In the process, I should clear a few thousand up front, $60,000 in “bumped-equity,” $14,000 in equity build-up from the loan’s principal reduction, and given any appreciation over the term maybe another hundred thousand or so.
The Road Map…
• Find the foreclosed upon party (County Records or a Foreclosure Notification Service)
• Get a general acceptance of terms (on the phone)
• Get a reinstatement Quote from the lender (owner calls and requests it)
• Ascertain the Fair Market Value (comps or appraisal)
• Issue a proposal inclusive of a Non-Exclusive Option
• Advertise for, and identify a Resident Co-Owner (newspaper, sign on property, etc.)
• Exercise the Option
• Have the property vested in a Title-Holding (Illinois–type) land trust
• Take a 90% beneficiary interest in the trust, leaving the seller with 10% interest to be forfeited to you at the trust’s termination following a refund of his equity and in consideration of your prompt payment record
• Have the trustee for the trust lease the property to the resident party while simultaneously making him/her a beneficiary in the trust (with from 10% to 80%, interest depending upon your objectives (e.g., for the end-result to be analogous to, say, an equity share, a wrap-around, a contract for deed, an option, a conditional sale, etc…but without any of their downsides and risk)
Is there any reason why anyone reading this article (newbie, or knobby) couldn’t do this three or four times a month in the prevailing market? I think not.
Bill Gatten
Creator of the NARS Equity Holding Trust Transfer System™
North American Realty Services, Inc.
West Hills, California
www.landtrut.net
home@landtrust.net
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, May 29, 2008
Thursday, May 22, 2008
FAIRNESS AND HONESTY. DO THEY FIT IN CREATIVE REAL ESTATE BUYING?
- By Bill J. Gatten
Question: If I buy a property for $50,000 and sell it two days later for $100,000, have I cheated anyone…or was this just a good business transaction for myself? For the analogy, let's consider the following seller types, and see if the “type” of seller makes any difference:
A. The seller is an elderly woman whose husband recently passed-away, and who knows virtually nothing about finances, much less real estate values. She is distraught and sees me as one who can save her from financial ruin if I can only help her convert her only rental property to cash without too much delay.
B. The seller is a young couple with income property, whom have grown weary of managing rental real estate and just want “out.” They find themselves in a serious financial bind, and just are willing to take my word and my sales pitch relative to the value of the property, if only I can convince them that I am trustworthy.
C. The seller is a fellow real-estate investor, who is anxious to sell at a good discount, being wholly unaware that the city's formerly announced plans to build a freeway immediately adjacent to property (which he fails to tell me about) had been permanently cancelled just this morning (a fact to which only I am privy).
In each case, I have seen an ad in the newspaper that says” Property for Sale, Seller will Carry. Make an Offer.” I answer the ad and set up an appointment with the seller. I make my low-ball ($50,000 offer), justifying it with the assertion that repairs, refurbishment and remarketing costs are going to be exorbitant, and that I need to build-in at least a 20% profit for myself. I then explain that even though the property may be worth $100,000 I’m probably going to receive no serious offers higher and $90,000. At first, they decline, holding out for more money, but being over-the-barrel, they quickly recant when they see me about to walk way. At that, the seller accepts my story and clearly sees that I know my business and am a real professional.
Now (a week later, let’s say)…I do a NARS PACTrust™ at a Mutually Agreed Value of $95,000 to a couple acquiring their first home. I show them comps at $110,000 and minimize the cost of the repairs that will need to be made. I walk away with $45,000 less a few costs.
Now the real question: Who got cheated here? A, B or C…and why would/should it make a difference? Honesty is honesty, isn’t it…irrespective of whom you’re dealing with? Of course most people would say that the deal would have been OK with client “C,” and maybe even Mr. and Mrs. “B,” but that I shouldn’t have done such a thing to little old Missus “A.”
The key here, in my opinion, lies within the phrase “Fair Market Value.” Let's analyze the words for which the initials "FMV" stand and see if any one of the three sets off any bells or whistles in our conscience? Not that we’re not supposed to stand and salute when the phrase is uttered: but "FMV" is what a reasonable buyer acting on reasonable (accurate and honest) data is expected to pay, as long as its "FAIR." When I am the buyer, I determine the amount I'm willing to pay (take it or leave it: Golden Rule... "I got the gold I make the rules"); when I'm the seller, however, I don't have the right to trick someone into paying more for something than I know its worth…especially by withholding information or misrepresenting pertinent facts ('got burned like that once myself on a mail order I placed for some Sea Monkeys). As a professional... I'm someone who sells wholly because of assertions that I personally make, and can prove, re. my integrity and trustworthiness (as you undoubtedly do as well): as a buyer I am one to check out all the possibilities and verify all the data for myself, rather than expecting someone to be particularly honest or do it for me.
Here’s the true key to success (and fairness) in all business transactions (called the Hubbard Principal):
1. Show up
2. Pay attention
3. Be honest
4. Remain unattached to the end-result
That’s it! As simplistic as this saying may seem at first glance, it is truly the most complete road map to fair dealing and success in business that I have ever come across. It simply will not (can not) fail you. Remember that buying a Tiffany lamp for ten dollars at a garage sale, and selling it the next day $20,000 (although a "dealer" might be subject to scrutiny), is not the same as selling a ten dollar K-Mart look-alike for $20,000 by sticking a fake Tiffany label on it. “Caveat Emptor (“buyer beware”) went the way of Snake Oil, mood rings and Spiro Agnew (and those stupid do-nothing Sea Monkeys) a long time ago. Wait! Wait! Better example...too close to the fire to see the woods (to mix a non-metaphor)! I frequently (very frequently, as a matter of fact) buy and sell SFR properties for more than they're worth. Sometimes, a lot more than they’re worth. But the reason I do that is because when I buy them, I get something of significant value in addition to the property itself... I get "terms" and "concessions" (no down, no bank qualifying; no credit qualifying; no risk, no argument...just shut up and take it). In all of these cases, I’m willing pay for those extras that I get. Then, when I eventually bring a resident co-beneficiary into this property (via a two-tiered PACTriust™), the property’s true value is fully disclosed and completely understood. Then to that “true value” I add the value of the terms and concessions that I am willing to extend (no down, no credit qualifying, no penalty for BK’s, past foreclosure, etc.). This all then adds up to my own "MAVI (i.e., Mutually Agreed Value at Inception)," which is always the true appraisal value, OR the underlying loan amount: whichever is greater…plus the value of all my concessions. Why shouldn’t one pay more if they don’t have to qualify, and if I’m going to trust them when no one else would (lenders, other sellers, etc.). Now…whose being cheated? Me? My resident co-beneficiary? Or…is it the seller, whom, if he knew as much as I do about land trust conveyances, could have done the same thing himself, and not had to relinquish his property ownership at all? Why, he might even have been able to earn back all that equity he lost, and all the appreciation he missed out on due to the preceding recessionary period. Now I’m the one who will profit. Fair? Unfair? Honest or dishonest?
Bill Gatten
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Question: If I buy a property for $50,000 and sell it two days later for $100,000, have I cheated anyone…or was this just a good business transaction for myself? For the analogy, let's consider the following seller types, and see if the “type” of seller makes any difference:
A. The seller is an elderly woman whose husband recently passed-away, and who knows virtually nothing about finances, much less real estate values. She is distraught and sees me as one who can save her from financial ruin if I can only help her convert her only rental property to cash without too much delay.
B. The seller is a young couple with income property, whom have grown weary of managing rental real estate and just want “out.” They find themselves in a serious financial bind, and just are willing to take my word and my sales pitch relative to the value of the property, if only I can convince them that I am trustworthy.
C. The seller is a fellow real-estate investor, who is anxious to sell at a good discount, being wholly unaware that the city's formerly announced plans to build a freeway immediately adjacent to property (which he fails to tell me about) had been permanently cancelled just this morning (a fact to which only I am privy).
In each case, I have seen an ad in the newspaper that says” Property for Sale, Seller will Carry. Make an Offer.” I answer the ad and set up an appointment with the seller. I make my low-ball ($50,000 offer), justifying it with the assertion that repairs, refurbishment and remarketing costs are going to be exorbitant, and that I need to build-in at least a 20% profit for myself. I then explain that even though the property may be worth $100,000 I’m probably going to receive no serious offers higher and $90,000. At first, they decline, holding out for more money, but being over-the-barrel, they quickly recant when they see me about to walk way. At that, the seller accepts my story and clearly sees that I know my business and am a real professional.
Now (a week later, let’s say)…I do a NARS PACTrust™ at a Mutually Agreed Value of $95,000 to a couple acquiring their first home. I show them comps at $110,000 and minimize the cost of the repairs that will need to be made. I walk away with $45,000 less a few costs.
Now the real question: Who got cheated here? A, B or C…and why would/should it make a difference? Honesty is honesty, isn’t it…irrespective of whom you’re dealing with? Of course most people would say that the deal would have been OK with client “C,” and maybe even Mr. and Mrs. “B,” but that I shouldn’t have done such a thing to little old Missus “A.”
The key here, in my opinion, lies within the phrase “Fair Market Value.” Let's analyze the words for which the initials "FMV" stand and see if any one of the three sets off any bells or whistles in our conscience? Not that we’re not supposed to stand and salute when the phrase is uttered: but "FMV" is what a reasonable buyer acting on reasonable (accurate and honest) data is expected to pay, as long as its "FAIR." When I am the buyer, I determine the amount I'm willing to pay (take it or leave it: Golden Rule... "I got the gold I make the rules"); when I'm the seller, however, I don't have the right to trick someone into paying more for something than I know its worth…especially by withholding information or misrepresenting pertinent facts ('got burned like that once myself on a mail order I placed for some Sea Monkeys). As a professional... I'm someone who sells wholly because of assertions that I personally make, and can prove, re. my integrity and trustworthiness (as you undoubtedly do as well): as a buyer I am one to check out all the possibilities and verify all the data for myself, rather than expecting someone to be particularly honest or do it for me.
Here’s the true key to success (and fairness) in all business transactions (called the Hubbard Principal):
1. Show up
2. Pay attention
3. Be honest
4. Remain unattached to the end-result
That’s it! As simplistic as this saying may seem at first glance, it is truly the most complete road map to fair dealing and success in business that I have ever come across. It simply will not (can not) fail you. Remember that buying a Tiffany lamp for ten dollars at a garage sale, and selling it the next day $20,000 (although a "dealer" might be subject to scrutiny), is not the same as selling a ten dollar K-Mart look-alike for $20,000 by sticking a fake Tiffany label on it. “Caveat Emptor (“buyer beware”) went the way of Snake Oil, mood rings and Spiro Agnew (and those stupid do-nothing Sea Monkeys) a long time ago. Wait! Wait! Better example...too close to the fire to see the woods (to mix a non-metaphor)! I frequently (very frequently, as a matter of fact) buy and sell SFR properties for more than they're worth. Sometimes, a lot more than they’re worth. But the reason I do that is because when I buy them, I get something of significant value in addition to the property itself... I get "terms" and "concessions" (no down, no bank qualifying; no credit qualifying; no risk, no argument...just shut up and take it). In all of these cases, I’m willing pay for those extras that I get. Then, when I eventually bring a resident co-beneficiary into this property (via a two-tiered PACTriust™), the property’s true value is fully disclosed and completely understood. Then to that “true value” I add the value of the terms and concessions that I am willing to extend (no down, no credit qualifying, no penalty for BK’s, past foreclosure, etc.). This all then adds up to my own "MAVI (i.e., Mutually Agreed Value at Inception)," which is always the true appraisal value, OR the underlying loan amount: whichever is greater…plus the value of all my concessions. Why shouldn’t one pay more if they don’t have to qualify, and if I’m going to trust them when no one else would (lenders, other sellers, etc.). Now…whose being cheated? Me? My resident co-beneficiary? Or…is it the seller, whom, if he knew as much as I do about land trust conveyances, could have done the same thing himself, and not had to relinquish his property ownership at all? Why, he might even have been able to earn back all that equity he lost, and all the appreciation he missed out on due to the preceding recessionary period. Now I’m the one who will profit. Fair? Unfair? Honest or dishonest?
Bill Gatten
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, May 15, 2008
HUD PROPOSES NEW RULES ON FHA LOAN FOR “FLIPS”
As many of you may be aware, there has been a lot of negative press recently about “flips,” that is, buying and quickly reselling properties for profit. Despite all of the misinformation floating around, flipping properties is perfectly legal, ethical, moral, viable and profitable. The misinformed sources (realtors, bankers, title companies, etc) that tell you flipping is becoming illegal reminds me of that game we played as kids; one person whispers a secret into another’s ear, which is passed on and on until the message gets distorted beyond belief! A new proposed HUD rule just keeps feeding into the stupidity . . .
According to HUD, “property flipping” occurs when a property “recently acquired is resold for a considerable profit with an artificially inflated value, often abetted with a lender’s collusion with an appraiser.” First of all, the “often” part bothers me as a capitalist; if a recently acquired property is resold at a substantial profit, isn’t that called “capitalism?” Let’s face it folks, half of the properties that have sold in the last two years are “artificially inflated” based on low interest rates and the dot-com stock market hype. If flipping is legal and colluding with a lender is not, then HUD should just call “property flipping” what it really is: “LOAN FRAUD.” From this point on, you and I will call buying a property and selling for a profit “flipping,” ! and we’ll call the other thing “loan fraud.”
Enough of my personal tirade, let’s get back to the facts . . .
Since many of these “loan fraud” cases have involved low-income properties with FHA-insured loans, HUD has decided to get involved (this after a Senate hearing that blamed HUD for the problem!). Under proposed 24 USC Sec. 203.37a, any property that is being sold within six months of acquisition will not be eligible for FHA financing. This means if you buy a property, fix it up and sell it to a retail buyer, that buyer cannot get an FHA loan to buy your property.
Is this the end of the world? Of course not! There are dozens of other loan programs for low-income and first-time homebuyers that are not HUD-insured. You could also wait an extra month or so to sell the property (after all, it usually takes at least 2-3 months to acquire, fix-up and sell a rehab property). Thus, when you make an offer to purchase a property, you must figure on an extra two months of holding costs. For those of you who have been doing this business a while, you can remember when it used to take six months to buy, fix and sell a property. If you cannot afford to hold a property for an extra two months, then get a lease/option tenant to rent it for six months before buying. With a lease/option, it will take you longer to get your cash back, but it will usually mean a higher selling price and no realtor commissions!
If you read the new proposed regulations further, you will note that HUD has provided a loophole. On a case-by-case basis, HUD may grant an except to the 6 month rule if the buyer can show that the property is really worth what he is paying. The rules specify that the borrower can submit information such as a list of repairs, comparable sales and the fact that the investor bought the property cheaper in a distress sale. Of course, you, as the investor, should have this information ready to submit with the buyer’s loan application. Is this a pain in the neck? Of course it is, but you pay that price for dealing with Government-sponsored programs.
Another part of the proposed rule is that the purchase must be from the “owner of record.” Of course, this means you cannot assign a contract to a buyer who is getting an FHA-insured loan. To me, this is meaningless, since I only flip contracts to other investors. However, some people in sandwich lease-option deals have buyers that will apply for FHA loans. In this case, you may have to find another loan program or let the seller buy you out of the deal and close directly with the subtenant. Another way to handle this may be to convert your lease/option agreement with the seller into a land contract six months before the subtenant-buyer’s application for a loan. This is a gray area, since HUD has not defined what an “owner of record” is (in theory, a recorded land contract would show you, the investor, as the “equitable” owner of record). Also, you may be able to try the land trust trick as described! in my previous article (essentially buying the property in a trust name that relates to the seller’s last name, so the underwriter assumes your trust and the seller are on and the same!).
Finally, investors are panicking at the though that FNMA regulations may follow HUD’s lead and require the same six month moratorium. Personally, I doubt this will happen. HUD only got involved because most of the loan fraud cases involved FHA loans and the Senate blamed HUD. There are many stringent loan regulations over the years required for FHA loans that have not been adopted as FNMA standards.
Worst case scenario: what if ALL lenders require the new six-month rule? In that case, I will be looking for partners to get into the loan business. I will capitalize on this opportunity by creating a niche that nobody else is working. I am being facetious, of course, to make a point: some other lender will seize the opportunity and work with investors. As the stock market declines and interest rates are dropped by the Fed, the lenders’ competition for our business will only get stronger, leading to more and more creative loan programs.
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
According to HUD, “property flipping” occurs when a property “recently acquired is resold for a considerable profit with an artificially inflated value, often abetted with a lender’s collusion with an appraiser.” First of all, the “often” part bothers me as a capitalist; if a recently acquired property is resold at a substantial profit, isn’t that called “capitalism?” Let’s face it folks, half of the properties that have sold in the last two years are “artificially inflated” based on low interest rates and the dot-com stock market hype. If flipping is legal and colluding with a lender is not, then HUD should just call “property flipping” what it really is: “LOAN FRAUD.” From this point on, you and I will call buying a property and selling for a profit “flipping,” ! and we’ll call the other thing “loan fraud.”
Enough of my personal tirade, let’s get back to the facts . . .
Since many of these “loan fraud” cases have involved low-income properties with FHA-insured loans, HUD has decided to get involved (this after a Senate hearing that blamed HUD for the problem!). Under proposed 24 USC Sec. 203.37a, any property that is being sold within six months of acquisition will not be eligible for FHA financing. This means if you buy a property, fix it up and sell it to a retail buyer, that buyer cannot get an FHA loan to buy your property.
Is this the end of the world? Of course not! There are dozens of other loan programs for low-income and first-time homebuyers that are not HUD-insured. You could also wait an extra month or so to sell the property (after all, it usually takes at least 2-3 months to acquire, fix-up and sell a rehab property). Thus, when you make an offer to purchase a property, you must figure on an extra two months of holding costs. For those of you who have been doing this business a while, you can remember when it used to take six months to buy, fix and sell a property. If you cannot afford to hold a property for an extra two months, then get a lease/option tenant to rent it for six months before buying. With a lease/option, it will take you longer to get your cash back, but it will usually mean a higher selling price and no realtor commissions!
If you read the new proposed regulations further, you will note that HUD has provided a loophole. On a case-by-case basis, HUD may grant an except to the 6 month rule if the buyer can show that the property is really worth what he is paying. The rules specify that the borrower can submit information such as a list of repairs, comparable sales and the fact that the investor bought the property cheaper in a distress sale. Of course, you, as the investor, should have this information ready to submit with the buyer’s loan application. Is this a pain in the neck? Of course it is, but you pay that price for dealing with Government-sponsored programs.
Another part of the proposed rule is that the purchase must be from the “owner of record.” Of course, this means you cannot assign a contract to a buyer who is getting an FHA-insured loan. To me, this is meaningless, since I only flip contracts to other investors. However, some people in sandwich lease-option deals have buyers that will apply for FHA loans. In this case, you may have to find another loan program or let the seller buy you out of the deal and close directly with the subtenant. Another way to handle this may be to convert your lease/option agreement with the seller into a land contract six months before the subtenant-buyer’s application for a loan. This is a gray area, since HUD has not defined what an “owner of record” is (in theory, a recorded land contract would show you, the investor, as the “equitable” owner of record). Also, you may be able to try the land trust trick as described! in my previous article (essentially buying the property in a trust name that relates to the seller’s last name, so the underwriter assumes your trust and the seller are on and the same!).
Finally, investors are panicking at the though that FNMA regulations may follow HUD’s lead and require the same six month moratorium. Personally, I doubt this will happen. HUD only got involved because most of the loan fraud cases involved FHA loans and the Senate blamed HUD. There are many stringent loan regulations over the years required for FHA loans that have not been adopted as FNMA standards.
Worst case scenario: what if ALL lenders require the new six-month rule? In that case, I will be looking for partners to get into the loan business. I will capitalize on this opportunity by creating a niche that nobody else is working. I am being facetious, of course, to make a point: some other lender will seize the opportunity and work with investors. As the stock market declines and interest rates are dropped by the Fed, the lenders’ competition for our business will only get stronger, leading to more and more creative loan programs.
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, May 8, 2008
Geo or Mercedes Benz? Is It Up To You or Up To Your Attorney The NARS Equity Holding Transfer System™
by Bill Gatten
What would you think if you asked your auto mechanic if you should buy a Mercedes Benz, and he told you to buy a Geo Metro instead? “After all, you don’t need a Mercedes, Geos are just fine. What could anyone want in a car other than getting from here to there, stopping, going, speeding up and slowing down? Oh, yeah, and…they are far easier (for me) to work on because I never went to Mercedes school and don’t wish to take the time to do so now. Sure, the manufacturer says they are better, safer, built stronger, last longer, have better re-salability; that they are less likely to kill you in a crash, blow off the road in a high wind, or skid off a mountain road in a snowstorm. But…I ask you, how can I stay in business by suggesting that my clients seek out more knowledgeable sources?”
For the record, I do not advocate proceeding in any real estate related transaction without the advice of a "good' and "knowledgeable" legal professional. However, the quandary in which I find myself is that there are very few attorneys who know much about the use of trusts in general, and even fewer know beans from a box of matches about what a "land trust" is...much less what it does, or how it differs from other inter vivos trusts. Most attorneys have never even heard of such a thing; and there are even fewer yet who are competent to offer sound advice…Yay or Nay relative to the use or safety of an "Illinois-type, revocable, inter vivos, title-holding, beneficiary-directed, third-party trustee, co-beneficiary land trust transfer (i.e., the NEHTrust System™)." In other words, “Go buy that Geo.”
Ordinarily, when one engages the services of an uninitiated attorney for the purposes of reviewing a land trust transfer (much less a NEHTrust Transfer™ with all of its appendices, directions, Escrow documentation, creditor letters, assignment, lease, etc.) he or she is faced with a true pointy-horned dilemma. The only two options being:
1) Get out to the law library and spend billable hours getting educated on land trusts, or…
2) Render advice (pro or con) on something about which virtually nothing is known. I can assure you, the advice will always be con because ‘con’ is surer, quicker, easier and more profitable than ‘pro’).
I'd presume no less than 8 or 10 hours would be needed to research the pertinent codes and cites and the myriad features, benefits and uses of the land trust (i.e., $3,000 to $ $5,000 billable?); Think about it...if you were a busy attorney whose itinerary was over-burdened with money-making time constraints, what would you prefer to do? Would you opt to:
1) Spend your "billable" hours doing hard research for free for a transaction you'll probably never see the likes of again;
2) Risk your client's walking away when he hears what the bill is going to be, and receiving nothing for your time, or
3) Convert the entire transaction to something that you better understand, and are more competent to advocate...and something on which you could make some money, despite any disadvantages there may be?
Similarly, if you were the client hoping to pay only for a simple review of documents, would you be willing to finance your attorney's continuing legal education at the rate of $375 per-hour? Me neither.
My hope is that no one would accept that the entire transaction should be converted to something less effective but more "manageable (for the attorney)." Perhaps a nice "Contract for Deed" or maybe a little (innocuous, volatile, due-on-sale violating) lease option. After all, let's face it, there just isn't much billing potential in telling a client, "I'm not competent to advise you in this matter."
Being told to "convert to something else," to bebefit an attorney is a reversion to the very short falls and serious risks that the NARS NEHTrust Transfer™ is designed to circumvent. Shortfalls such as due-on-sale violation; a resident's claim of "equity" forestalling eviction and forcing foreclosure (to buy time and free rent); the constant threat of creditor and/or tax liens attaching to the property due to untoward actions by the other party; the insidious susceptibility to partition actions and/or charging orders by judgment creditors; involvement in the other party's Probate or forced ancillary administration issues; public recordation and notification of the transaction; absence of a third-party holding entity to ameliorate potential for disputes.
If you or I were to consult with a medical practitioner about treatment for a brain tumor, a good doctor would refer us to a neurologist. However, the mindset of the legal practitioner is too often analogous to as physician's advice that we simply contract a more manageable disease. "I missed the class on brains, so how 'bout I treat you for hemorrhoids instead?
But…what are you trying to say? Should I seek the advice of an attorney or not?"
Yup you sure should! Indubitably, as a matter-of-fact (so say I)! However, be certain to choose a truly competent one who has experience with land trust transfers in creative real estate transactions. And if they start talking about Lease Options, Lease Purchases, Land Contracts (Contracts for Deed), Wrap-Around Mortgages, Equity Shares, Subject-To's or ‘Silent Seconds’ ...run for your life!
Bill Gatten, CEO
North American Realty Services
6520 Platt Ave. #548
Westhills, CA 91307
home@landtrut.net
www.landtrust.net
The remainder of the original article (never published)
However, there are a few nice people with whom I've become familiar over the years who do practice law and who do understand the concept (albeit a limited few, to be sure…though this list is by no means complete). I cannot vouch for any of them (learned the hard why one should never “vouch”), but I can list their names (addresses and phone numbers are up to you):
AZ, Gareth Hyndman, Phoenix/Scottsdale
AZ, Harvey Dye, Phoenix Scottsdale
CA Steven Zipperman, Santa Ana
CA, David Robinson, Los Angeles
CA, Gary Gitlen, Agoura Hills
CA, Jay Swob, San Diego
CA, John Brady, San Diego
CA, Judy Wrentschler, Foster City
CA, Mark Blankenship, Riverside
CA, Martin Slater, Los Angeles
CA, Michael Kilmartin, Simi Valley
CA, Paul De Witt, Los Angeles
CA, Peter Gibbons, Riverside
CO, Bill Bronchik, Denver
FL, Mark Warda, Ft. Lauderdale
ILL, Henry W. Keno, Chicago (but alas…he died)
ILL, Doug Lansky, Downers Grove
MA, Birnbaum and Monahan, L.Q.
MA, Michael Moskos, Worcestor, Mass
MD, Bryon S. Bereano, Upper Marlboro
ME, Jennifer H. Pincus, Portland
MI, Jean Marie Hansen, Detroit
MI, Russell Messina, West Bloomfield
MO, Richard L. Zinn, Kansas City
NC, Clinton S. Forbis Jr., Kannapolis
NC, Susan Hunt, Greensboro
NJ, John H. Crammond, Bloomingdale
NY, James De Brosse, Queens Village
NY, John Freeman, Manhattan
NY, Nabisubi (“Nobi”) Musoke, New York City
NY, Steve Butcher, Rochester
OK, David Eldridge, Oklahoma City,
TX, Blue Ransfeld, Fortworth
TX, Bryan Dunklin, Dallas
TX, Jerry Corbin, Midland
TX, Theresa Smith, San Antonio
TX, John C. Blazier, Austin, Texas
The following are some attorney quotes, in answer to: "Why aren't there more attorneys to call on who know something about land trusts?
"Because very few know how to use them and even fewer recognize the benefits."
Mark Warda, Attorney, Florida
"If you can't find the expertise [when seeking a competent attorney], you have no choices but to keep on looking, or take upon yourself the task of trying to educate your advisors and counselors."
Jay Douglas Swob, Attorney, Cincinatti
"Another problem with using attorneys is that most have a negative attitude. They will probably advise against using a land trust because they [themselves] don't understand it."
Bill Bronchik, Attorney, Denver
"In that the 'land trust' is less frequently used outside of Illinois where it was first created [1920 its precursor in 1891], it is unlikely that many will be immediately familiar with its benefits or structure."
Henry W. Kenoe, Attorney, Chicago (Deceased) (Keno on Land Trusts, IICLE, 1989)
"No! Don't do it! Oh m'god! These can only be done in Illinois. They violate the Doctrine of Stepped Transactions. Lease tenants can't take tax write-offs. You crazy? No court in the country would see such a thing as a conversion of real estate to personal property! Run Gertrude, run! Run like the wind!”
“But wait. Before you rush off, Gertrude, let me create an all-inclusive wrap-around mortgage for you instead. It'll do the all the same things and I'll only charge you $2,000." The Due-on-Sale Clause? Oh, don't worry about that...lenders never pay any attention to those things. I'll build in a nice exculpatory paragraph anyway (so you can't sue me) and it'll be in bold print. Could the buyer get the property embroiled in a lawsuit or tax lien while you're still on the mortgage loan and unable to make the payments or sell the property? Well, I suppose so, but that hardly ever happens either...don't worry about it. Could you evict the buyer if he doesn't make his payment? Well, no. But, hey, there's always judicial foreclosure, Unlawful Detainer, Ejectment and quiet-tile action: which I will be more than happy to handle for you (at $225 per hour plus court costs...no guarantees of course).
“Huh?
"Would the property be tied up in the other party's Probate proceedings, if they die?" Well, um, yes, but most people don't ever die of anything serious: but even if they did, that would just be a matter of another paycheck for me, now wouldn't it? I don't see any problems here."
Unnamed, famous, anonymous former attorney, Riverside, Ca.
"There is no person on the planet that is more apparently knowledgeable about the law relative to anything new, than a lawyer who doesn't know what the hell he's talking about.”
Bill Gatten, Author, Entrepreneur,
Seminar Leader, West Hills, Ca.
If your, or your client’s, attorney tries to put one over on you by suggesting tht the client do something else via another type of transfer vehicle, he/she would only do that if they were too busy, too lazy or too misinformed to tke the time to justify their opinions. Should this happen, just ask him/her (the attorney) if he/she will sign an agreement declaring that the suggested alternative will do everything the NEHTrust can do.
In other words, will the suggested alternative serve to avoid –
…a due-on-sale (DOSC) violation
…the need for option fees and/or rent-credits (that create “equity” violating the DOSC)
…the ability of any party to it to act unilaterally (alone, without the other party/ies)
…any untoward, illegal or deceitful actions of another party to the transaction
…the potential for any party creating clouds on title
…the ability of any party to over-encumber the property
…the need for foreclosure and ejectment action re. eviction
…the tenant’s worries about the actions of the landlord/optionor
…the misdirection or embezzlement of funds (pmts, taxes, ins., etc.) by any party
…partition or charging orders by outside creditors (even the IRS)
…the need for deceit and subterfuge (re. an underlying lender’s admonitions)
Or can the suggested alternative provide –
…avoidance of the “due-on-sale” clause (options, wraps, land contracts & equity shares certainly do not)
…free, centralized 3rd-party professional collections and disbursement of paymnts
…automatic notice of default to all parties
…legitimate recordation in the name of another (without due-on-sale threat or loss of control)
…full income tax benefit to the acquiring party throughout term of the agreement
…quick and easy eviction without risking claims of “Equity” to force foreclosure and stall ejectment
…higher rental income for the landlord (re. transfer of tax benefits)
…lower after-tax housing cost for the tenant (re. access to tax benefits)
…the safest and most silent contingency sale vehicle ever
…easiest purchase and disposition of property at termination
…transfer of full ownership benefits without equity transfer
…privacy of ownership without compromise or public notice
…24-hour monitoring of all aspects of the transaction
…freedom from all management, maintenance and collections
…avoidance of credit damage and debt-relief taxation (re. foreclosure or short-sale)
…a history of never having been challenged in court or by the IRS
NOTE: In order to accomplish all of the above, one need but (with the proper documentation) vest the property in a land trust and make the tenant a co-beneficiary. [See Title 12 USC 1701-j-3; Title 12 US CFR(a) 591(vi); Rev. Rul. 92-105; IRS Sec. 163(h)4(D)]
ANOTHER NOTE: Bill Gatten, the author of this article, is not engaged in the practice of law, or in rendering dependable professional advice of any kind what so ever. For legal or other expert assistance and direction, the services of a competent professional should be obtained. Do not expect Bill Gatten to know anything about anything...ever.
STILL ANOTHER NOTE: Want to get your attorney to do the right thing? Give them a copy of this article. If they review the above list and tell you they don’t agree that these benefits are attainable, it’s because they simply don’t know anything about land trusts, much less what can be done with them, and choose not to learn.
The attorney’s creed: I’ve been to Know it All School, so If I don’t know it by now, it is either unknowable or wholly without merit.
Bill J. Gatten
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
What would you think if you asked your auto mechanic if you should buy a Mercedes Benz, and he told you to buy a Geo Metro instead? “After all, you don’t need a Mercedes, Geos are just fine. What could anyone want in a car other than getting from here to there, stopping, going, speeding up and slowing down? Oh, yeah, and…they are far easier (for me) to work on because I never went to Mercedes school and don’t wish to take the time to do so now. Sure, the manufacturer says they are better, safer, built stronger, last longer, have better re-salability; that they are less likely to kill you in a crash, blow off the road in a high wind, or skid off a mountain road in a snowstorm. But…I ask you, how can I stay in business by suggesting that my clients seek out more knowledgeable sources?”
For the record, I do not advocate proceeding in any real estate related transaction without the advice of a "good' and "knowledgeable" legal professional. However, the quandary in which I find myself is that there are very few attorneys who know much about the use of trusts in general, and even fewer know beans from a box of matches about what a "land trust" is...much less what it does, or how it differs from other inter vivos trusts. Most attorneys have never even heard of such a thing; and there are even fewer yet who are competent to offer sound advice…Yay or Nay relative to the use or safety of an "Illinois-type, revocable, inter vivos, title-holding, beneficiary-directed, third-party trustee, co-beneficiary land trust transfer (i.e., the NEHTrust System™)." In other words, “Go buy that Geo.”
Ordinarily, when one engages the services of an uninitiated attorney for the purposes of reviewing a land trust transfer (much less a NEHTrust Transfer™ with all of its appendices, directions, Escrow documentation, creditor letters, assignment, lease, etc.) he or she is faced with a true pointy-horned dilemma. The only two options being:
1) Get out to the law library and spend billable hours getting educated on land trusts, or…
2) Render advice (pro or con) on something about which virtually nothing is known. I can assure you, the advice will always be con because ‘con’ is surer, quicker, easier and more profitable than ‘pro’).
I'd presume no less than 8 or 10 hours would be needed to research the pertinent codes and cites and the myriad features, benefits and uses of the land trust (i.e., $3,000 to $ $5,000 billable?); Think about it...if you were a busy attorney whose itinerary was over-burdened with money-making time constraints, what would you prefer to do? Would you opt to:
1) Spend your "billable" hours doing hard research for free for a transaction you'll probably never see the likes of again;
2) Risk your client's walking away when he hears what the bill is going to be, and receiving nothing for your time, or
3) Convert the entire transaction to something that you better understand, and are more competent to advocate...and something on which you could make some money, despite any disadvantages there may be?
Similarly, if you were the client hoping to pay only for a simple review of documents, would you be willing to finance your attorney's continuing legal education at the rate of $375 per-hour? Me neither.
My hope is that no one would accept that the entire transaction should be converted to something less effective but more "manageable (for the attorney)." Perhaps a nice "Contract for Deed" or maybe a little (innocuous, volatile, due-on-sale violating) lease option. After all, let's face it, there just isn't much billing potential in telling a client, "I'm not competent to advise you in this matter."
Being told to "convert to something else," to bebefit an attorney is a reversion to the very short falls and serious risks that the NARS NEHTrust Transfer™ is designed to circumvent. Shortfalls such as due-on-sale violation; a resident's claim of "equity" forestalling eviction and forcing foreclosure (to buy time and free rent); the constant threat of creditor and/or tax liens attaching to the property due to untoward actions by the other party; the insidious susceptibility to partition actions and/or charging orders by judgment creditors; involvement in the other party's Probate or forced ancillary administration issues; public recordation and notification of the transaction; absence of a third-party holding entity to ameliorate potential for disputes.
If you or I were to consult with a medical practitioner about treatment for a brain tumor, a good doctor would refer us to a neurologist. However, the mindset of the legal practitioner is too often analogous to as physician's advice that we simply contract a more manageable disease. "I missed the class on brains, so how 'bout I treat you for hemorrhoids instead?
But…what are you trying to say? Should I seek the advice of an attorney or not?"
Yup you sure should! Indubitably, as a matter-of-fact (so say I)! However, be certain to choose a truly competent one who has experience with land trust transfers in creative real estate transactions. And if they start talking about Lease Options, Lease Purchases, Land Contracts (Contracts for Deed), Wrap-Around Mortgages, Equity Shares, Subject-To's or ‘Silent Seconds’ ...run for your life!
Bill Gatten, CEO
North American Realty Services
6520 Platt Ave. #548
Westhills, CA 91307
home@landtrut.net
www.landtrust.net
The remainder of the original article (never published)
However, there are a few nice people with whom I've become familiar over the years who do practice law and who do understand the concept (albeit a limited few, to be sure…though this list is by no means complete). I cannot vouch for any of them (learned the hard why one should never “vouch”), but I can list their names (addresses and phone numbers are up to you):
AZ, Gareth Hyndman, Phoenix/Scottsdale
AZ, Harvey Dye, Phoenix Scottsdale
CA Steven Zipperman, Santa Ana
CA, David Robinson, Los Angeles
CA, Gary Gitlen, Agoura Hills
CA, Jay Swob, San Diego
CA, John Brady, San Diego
CA, Judy Wrentschler, Foster City
CA, Mark Blankenship, Riverside
CA, Martin Slater, Los Angeles
CA, Michael Kilmartin, Simi Valley
CA, Paul De Witt, Los Angeles
CA, Peter Gibbons, Riverside
CO, Bill Bronchik, Denver
FL, Mark Warda, Ft. Lauderdale
ILL, Henry W. Keno, Chicago (but alas…he died)
ILL, Doug Lansky, Downers Grove
MA, Birnbaum and Monahan, L.Q.
MA, Michael Moskos, Worcestor, Mass
MD, Bryon S. Bereano, Upper Marlboro
ME, Jennifer H. Pincus, Portland
MI, Jean Marie Hansen, Detroit
MI, Russell Messina, West Bloomfield
MO, Richard L. Zinn, Kansas City
NC, Clinton S. Forbis Jr., Kannapolis
NC, Susan Hunt, Greensboro
NJ, John H. Crammond, Bloomingdale
NY, James De Brosse, Queens Village
NY, John Freeman, Manhattan
NY, Nabisubi (“Nobi”) Musoke, New York City
NY, Steve Butcher, Rochester
OK, David Eldridge, Oklahoma City,
TX, Blue Ransfeld, Fortworth
TX, Bryan Dunklin, Dallas
TX, Jerry Corbin, Midland
TX, Theresa Smith, San Antonio
TX, John C. Blazier, Austin, Texas
The following are some attorney quotes, in answer to: "Why aren't there more attorneys to call on who know something about land trusts?
"Because very few know how to use them and even fewer recognize the benefits."
Mark Warda, Attorney, Florida
"If you can't find the expertise [when seeking a competent attorney], you have no choices but to keep on looking, or take upon yourself the task of trying to educate your advisors and counselors."
Jay Douglas Swob, Attorney, Cincinatti
"Another problem with using attorneys is that most have a negative attitude. They will probably advise against using a land trust because they [themselves] don't understand it."
Bill Bronchik, Attorney, Denver
"In that the 'land trust' is less frequently used outside of Illinois where it was first created [1920 its precursor in 1891], it is unlikely that many will be immediately familiar with its benefits or structure."
Henry W. Kenoe, Attorney, Chicago (Deceased) (Keno on Land Trusts, IICLE, 1989)
"No! Don't do it! Oh m'god! These can only be done in Illinois. They violate the Doctrine of Stepped Transactions. Lease tenants can't take tax write-offs. You crazy? No court in the country would see such a thing as a conversion of real estate to personal property! Run Gertrude, run! Run like the wind!”
“But wait. Before you rush off, Gertrude, let me create an all-inclusive wrap-around mortgage for you instead. It'll do the all the same things and I'll only charge you $2,000." The Due-on-Sale Clause? Oh, don't worry about that...lenders never pay any attention to those things. I'll build in a nice exculpatory paragraph anyway (so you can't sue me) and it'll be in bold print. Could the buyer get the property embroiled in a lawsuit or tax lien while you're still on the mortgage loan and unable to make the payments or sell the property? Well, I suppose so, but that hardly ever happens either...don't worry about it. Could you evict the buyer if he doesn't make his payment? Well, no. But, hey, there's always judicial foreclosure, Unlawful Detainer, Ejectment and quiet-tile action: which I will be more than happy to handle for you (at $225 per hour plus court costs...no guarantees of course).
“Huh?
"Would the property be tied up in the other party's Probate proceedings, if they die?" Well, um, yes, but most people don't ever die of anything serious: but even if they did, that would just be a matter of another paycheck for me, now wouldn't it? I don't see any problems here."
Unnamed, famous, anonymous former attorney, Riverside, Ca.
"There is no person on the planet that is more apparently knowledgeable about the law relative to anything new, than a lawyer who doesn't know what the hell he's talking about.”
Bill Gatten, Author, Entrepreneur,
Seminar Leader, West Hills, Ca.
If your, or your client’s, attorney tries to put one over on you by suggesting tht the client do something else via another type of transfer vehicle, he/she would only do that if they were too busy, too lazy or too misinformed to tke the time to justify their opinions. Should this happen, just ask him/her (the attorney) if he/she will sign an agreement declaring that the suggested alternative will do everything the NEHTrust can do.
In other words, will the suggested alternative serve to avoid –
…a due-on-sale (DOSC) violation
…the need for option fees and/or rent-credits (that create “equity” violating the DOSC)
…the ability of any party to it to act unilaterally (alone, without the other party/ies)
…any untoward, illegal or deceitful actions of another party to the transaction
…the potential for any party creating clouds on title
…the ability of any party to over-encumber the property
…the need for foreclosure and ejectment action re. eviction
…the tenant’s worries about the actions of the landlord/optionor
…the misdirection or embezzlement of funds (pmts, taxes, ins., etc.) by any party
…partition or charging orders by outside creditors (even the IRS)
…the need for deceit and subterfuge (re. an underlying lender’s admonitions)
Or can the suggested alternative provide –
…avoidance of the “due-on-sale” clause (options, wraps, land contracts & equity shares certainly do not)
…free, centralized 3rd-party professional collections and disbursement of paymnts
…automatic notice of default to all parties
…legitimate recordation in the name of another (without due-on-sale threat or loss of control)
…full income tax benefit to the acquiring party throughout term of the agreement
…quick and easy eviction without risking claims of “Equity” to force foreclosure and stall ejectment
…higher rental income for the landlord (re. transfer of tax benefits)
…lower after-tax housing cost for the tenant (re. access to tax benefits)
…the safest and most silent contingency sale vehicle ever
…easiest purchase and disposition of property at termination
…transfer of full ownership benefits without equity transfer
…privacy of ownership without compromise or public notice
…24-hour monitoring of all aspects of the transaction
…freedom from all management, maintenance and collections
…avoidance of credit damage and debt-relief taxation (re. foreclosure or short-sale)
…a history of never having been challenged in court or by the IRS
NOTE: In order to accomplish all of the above, one need but (with the proper documentation) vest the property in a land trust and make the tenant a co-beneficiary. [See Title 12 USC 1701-j-3; Title 12 US CFR(a) 591(vi); Rev. Rul. 92-105; IRS Sec. 163(h)4(D)]
ANOTHER NOTE: Bill Gatten, the author of this article, is not engaged in the practice of law, or in rendering dependable professional advice of any kind what so ever. For legal or other expert assistance and direction, the services of a competent professional should be obtained. Do not expect Bill Gatten to know anything about anything...ever.
STILL ANOTHER NOTE: Want to get your attorney to do the right thing? Give them a copy of this article. If they review the above list and tell you they don’t agree that these benefits are attainable, it’s because they simply don’t know anything about land trusts, much less what can be done with them, and choose not to learn.
The attorney’s creed: I’ve been to Know it All School, so If I don’t know it by now, it is either unknowable or wholly without merit.
Bill J. Gatten
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
Thursday, May 1, 2008
I then ask the Owners:
"Are you SELLING Your Home?" and when the ask me Why (and/or after they are through cussing me) I state:
"Your Lender has publicly posted it for sale and I thought I'd call to see if there was anything I could do...
Tel Me WHAT WOULD YOU LIKE TO SEE HAPPEN REGARDING YOUR MORTGAGE ISSUE with the BANK?"
Sometimes they ask me "What can YOU DO?"
I reply: "I don't know...I am just an Investor but I also deal with Lenders to HELP Owners Like You to HELP YOURSELVES!
And of course I do this for a PROFIT...
"But you've probably Got This Problem with your Lender WORKED OUT ...Don't You?"
At this point they either OPEN UP THE FLOOD GATES of WHY the Lender Won't Deal with them ...or
They probably ask me "How can I meet with you to see if YOU CAN HELP ME?"
Try it using Bill's Script for the 52 Calls. It works like MAGIC for Me here in little ole Jackson!!!
Now GET ONLINE and FIND THE INFO YOU NEED FOR YOUR COUNTY!
DERRICK ALI
-0-
I think these "national" foreclosure sites mainly serve you up
REO's from FHA,VA,FannyMae-that is to say information you
can get for free from the various websites. I don't think REO's or even purchases at the auction is what most people on this Discussion Board are interested in. Preforeclosure is prime. The Lis Pendens has to be published in either a Legal newspaper or the local kitty liner. Find it and get busy.
I don't know anything about Michigan's foreclosure process. I think that the time between the first publication of the Lis Pendens and the Auction sale is very short-like under a month!. You'd do well to listen to Derrick Ali. He knows his stuff and is very creative.
Because you're under a time constraint your best bets would be the phone or knock-on-a-door. I must tell you that I
have no experience with either approach. I rely exclusively on mailers. I have friends who tell me that the only approach is personal contact (knock on a door). They claim that nothing can compare to a face to face meeting. I'd have to really be motivated (read:desperate) to do that.
I've never telemarketed. I think you could use Derrick's script.
I'd add that it's first necessary to understand that these people are scared, depressed,angry,in denial-you get the picture. I feel that you first have to establish some sort of rapport, some sort of trust before they will open up. Here are some thoughts on which you can expand and embellish:
a.Ring , Ring
B.Hello
a. John? This is Sam Greenstein with XYZ & Associates.
B. Yeah
a. John, I just heard about your financial difficulties and I
want to tell you that I'm SORRY and I know it REALLY isn't
your fault. I've been able to help MANY good
people like yourself and I MAY be able to help you. I DON'T
KNOW, would you be INTERESTED in a minute of my----
-NO COST-----NO OBLIGATION---- HELP [At this point he's going to hang-up or tell you to go to Jackson or that "everything has been taken care of"(send a follow-up letter,'in case things don't work out as promised') or he will accept your offer.]
Next comes the collection of information in a conversational
manner-not like an interrogation e.g."John tell me about your problem".
Next you express the urgency of meeting with them(H/W) so you can explain ALL their options and how you've been able to help others with the same problem.
Next you tell him that you're a "nice guy" and you will treat them fairly. You should tell them that you need to make a profit. They understand.
Next meet with them. If you're interested, do the deal. If you're not interested then give them their best alternatives as if they were blood relatives and leave them with some shard of hope.
-0-
Good morning;
We have had good success running a "Stop Forclosure" ad in the local Thrifty Nickel. Cheap and read by a variety of people. Follow scripts used by both Derrick and Sammynevada.
Problem you will run into is that by the time people are, as Bill says hurting, they will also be two - whatever behind in payments. At that point you will need to decide if you can help them and make some money yourself.
Good luck,
-0-
To find out more about Landtrust and Equity Transfers Using Landtrust, Click Here.
"Are you SELLING Your Home?" and when the ask me Why (and/or after they are through cussing me) I state:
"Your Lender has publicly posted it for sale and I thought I'd call to see if there was anything I could do...
Tel Me WHAT WOULD YOU LIKE TO SEE HAPPEN REGARDING YOUR MORTGAGE ISSUE with the BANK?"
Sometimes they ask me "What can YOU DO?"
I reply: "I don't know...I am just an Investor but I also deal with Lenders to HELP Owners Like You to HELP YOURSELVES!
And of course I do this for a PROFIT...
"But you've probably Got This Problem with your Lender WORKED OUT ...Don't You?"
At this point they either OPEN UP THE FLOOD GATES of WHY the Lender Won't Deal with them ...or
They probably ask me "How can I meet with you to see if YOU CAN HELP ME?"
Try it using Bill's Script for the 52 Calls. It works like MAGIC for Me here in little ole Jackson!!!
Now GET ONLINE and FIND THE INFO YOU NEED FOR YOUR COUNTY!
DERRICK ALI
-0-
I think these "national" foreclosure sites mainly serve you up
REO's from FHA,VA,FannyMae-that is to say information you
can get for free from the various websites. I don't think REO's or even purchases at the auction is what most people on this Discussion Board are interested in. Preforeclosure is prime. The Lis Pendens has to be published in either a Legal newspaper or the local kitty liner. Find it and get busy.
I don't know anything about Michigan's foreclosure process. I think that the time between the first publication of the Lis Pendens and the Auction sale is very short-like under a month!. You'd do well to listen to Derrick Ali. He knows his stuff and is very creative.
Because you're under a time constraint your best bets would be the phone or knock-on-a-door. I must tell you that I
have no experience with either approach. I rely exclusively on mailers. I have friends who tell me that the only approach is personal contact (knock on a door). They claim that nothing can compare to a face to face meeting. I'd have to really be motivated (read:desperate) to do that.
I've never telemarketed. I think you could use Derrick's script.
I'd add that it's first necessary to understand that these people are scared, depressed,angry,in denial-you get the picture. I feel that you first have to establish some sort of rapport, some sort of trust before they will open up. Here are some thoughts on which you can expand and embellish:
a.Ring , Ring
B.Hello
a. John? This is Sam Greenstein with XYZ & Associates.
B. Yeah
a. John, I just heard about your financial difficulties and I
want to tell you that I'm SORRY and I know it REALLY isn't
your fault. I've been able to help MANY good
people like yourself and I MAY be able to help you. I DON'T
KNOW, would you be INTERESTED in a minute of my----
-NO COST-----NO OBLIGATION---- HELP [At this point he's going to hang-up or tell you to go to Jackson or that "everything has been taken care of"(send a follow-up letter,'in case things don't work out as promised') or he will accept your offer.]
Next comes the collection of information in a conversational
manner-not like an interrogation e.g."John tell me about your problem".
Next you express the urgency of meeting with them(H/W) so you can explain ALL their options and how you've been able to help others with the same problem.
Next you tell him that you're a "nice guy" and you will treat them fairly. You should tell them that you need to make a profit. They understand.
Next meet with them. If you're interested, do the deal. If you're not interested then give them their best alternatives as if they were blood relatives and leave them with some shard of hope.
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Good morning;
We have had good success running a "Stop Forclosure" ad in the local Thrifty Nickel. Cheap and read by a variety of people. Follow scripts used by both Derrick and Sammynevada.
Problem you will run into is that by the time people are, as Bill says hurting, they will also be two - whatever behind in payments. At that point you will need to decide if you can help them and make some money yourself.
Good luck,
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