August 7th Tour of Seller-Financed Homes For Sale in Seattle

You are invited to Seattle’s Sunday Tours of Homes this August, which will feature properties of special interest to investors, cash-buyers, and first-time homebuyers. The tours are free, and sponsored by Home Land Seattle.

The first tour is scheduled from 1-3pm this coming Sunday, August 7.

We will meet at 1 pm sharp at the first house on the tour, 8818 30th Avenue West (please be sure to confirm the location before you show up by checking the Seattle Real Estate Investor blog at www.wendywonder.blogspot.com). You will pick up detailed maps, directions and information of the featured houses at the first house.

There will be 5-7 houses on the tour, approximately half located in northwest Seattle, and the other half in West Seattle. Houses planned for the tour (at this point) range in price from under $200,000 - $349,500; with two – five bedrooms, and an average size of 1900sf.

The Tours are scheduled as follows for the month of August:
8/7 - Seller Financed Properties for Sale- Meet at 8818 30th Ave W
8/14 - Estate Sales (Free & Clear) Properties
8/21 - Fixers
8/28 - REOs, Foreclosures

No reservations are necessary; no sales pressure, no obligation. You drive your own vehicle, so you may stop at whichever homes you wish to see. As a part of a larger group, you will have opportunities to learn from the constructive comments of your fellow tour members.

The Sunday Tours of Homes are led by Wendy Ceccherelli, Designated Broker for Home Land Investment Properties, Inc. She is an experienced real estate investor, and the tour provides valuable guidance for first time home buyers, real estate investors and other bargain house-hunters.

To be notified of upcoming Sunday Tours of Homes, call our free 24/7 recorded real estate hotline at 888-621-4999 x4.

Saving the World...One House at a Time

Great program last night at the Real Estate Association of Puget Sound, on securing real estate with private funds from home sellers and other individuals. A real win-win for both the buyer and the seller. The seller broadens the pool of available buyers by offering seller financing; sells the home more quickly; and for more money than a conventionally-financed deal. The investor buyer, working with private funds, is able to fix up a house, helping to improve the neighborhood, and provide affordable housing for an end-buyer. And the private lender earns 2-3 times what they can earn through the bank or stock market, with their investment secured by tangible real estate.

With that understanding, there are great deals out there on the local MLS by savvy sellers offering owner financing. This will be the theme of the homes selected in my first homes tour of the August Sundays Tours of Homes.

The tours are free! You drive your own vehicle, so you may stop at whichever homes you wish to see. There will be lots of other buyers on the tour, and show times are exact. If you are interested in one of the homes on the tour, we can arrange a lengthier private showing at another time.

There is no sales pressure, no obligation being a part of a larger group and you will enjoy the constructive comments of your fellow tour members. Each tour features a different class of Seattle property.

Here is how it works: Our tours begin on selected Sundays. Each tour runs from 1-3 pm and you may meet us at any home on the tour. Tours begin at 1pm SHARP at the first house on the schedule where you will pick up detailed maps, directions and information of the featured houses. I will post the schedule of houses on the tour 3 days in advance on this Seattle Real Estate Investor blog.

Tentative Schedule:
8/7 - Seller Financed Properties for Sale
8/14 - Estate Sales (Free & Clear) Properties
8/21 - Fixers
8/28 - REOs, Foreclosures

This first tour on Sunday, August 7 will feature approximately three houses in N Seattle and 3-4 houses in West Seattle that all advertise some form of owner financing. Asking prices on these homes range from just under $200,000 - $390,500. They range from 2-5 bedrooms with an average of 1900sf. Perfect for investors, cash buyers or first-time homebuyers!

If you are interested in this FREE tour, please message me privately, call me at 206-355-1706, or respond to this post. We'd love to see you on this tour!

Multiple Offers from Investors

As so many investors are interested in wholesaling, this blog article focuses on different offers that a wholesaler might make to a seller to secure a deal.

So as a wholesaler, you have done your mail campaign, or your drive-bys, or run an ad, and all of a sudden, you get in touch with a seller! Now what?

I recently blogged about “pre-screening the seller” to gather information to ensure that this property is truly a deal, and to establish a rapport with the seller. You have done that, and promised to get back to the seller with an offer within a relatively quick timeframe.

It may be possible to present some options that very day, but only if you are sure you have done all necessary research in advance and are comfortable with the options you wish to present. If not, offer to get back in touch within the next day or two to present your offer.

Please do not think that price is the only negotiable term, although for many sellers it will be the most important one. Previous articles have outlined the numerous terms that are negotiable in a real estate transaction, and any offer should be crafted to address the seller’s particular set of issues.

Many investors like to present multiple offers. Like a multiple choice quiz, the respondent is very likely to pick an option, as opposed to a simple “yes” or “no” answer. The goal is to keep the discussion open and the possibility that if not now, at some point in the future, one of your options will make enough sense to be attractive. Savvy investors know that a “no” now, is just a “no” now. Sellers do come back, if they are truly motivated and can’t find a better alternative.

With options, you give some attractive alternatives for a seller to mull over or discuss with you. I like to begin with a full-price offer, or one with a very generous purchase price. Agents and sellers are usually thrilled when they hear you are making a full-price offer.

Then reality sets in, because at full price I am also going to set the terms. This full price offer may include a low- or no-down payment, deferred payments or interest, or a very low or no rate of interest on installment payments. There may be other negotiable terms, including long-term seller financing. This “high” purchase price offer will typically include a number of terms that make sense for the investor, but may or may not be comfortable for the seller.

My last option will include an all-cash, buy-it-now price for a deep discount offer. It may remove all financing and inspection contingencies, and I may offer to pay all closing costs.

I may also include 1-2 additional options, with a price between the high purchase price and the all-cash price, with terms that vary but may include simple interest or amortized payments. These can be custom-crafted to match the needs of both the investor and the seller.

This technique of multiple offers is also quite effective when you are not sure of the seller’s true needs or motivations, and will allow you to identify these fairly quickly by targeting the options that seem most attractive to the seller.

So armed with multiple alternatives for your sellers, go make some offers!

First-Time Renter?

Here's a sweet little rental that is perfect for first-time renters, folks with little or no furniture, and/or those looking for the flexibility of a short-term rental.

AVAILABLE DEC 2011! Enjoy the holidays in Seattle! Partially furnished, with futon, most furniture, curtains, linens, towels, kitchen supplies, etc. 2BR apartment (one large bedroom, 2nd room for guests, study, office,etc) in elegantly restored house-share with old world charm and details -- walking distance to Lake Washington, stores and restaurants in a quiet residential neighborhood just 2.5 miles from downtown Seattle.

Dramatic lighting and divided living spaces, funky but nice! This unit has good light, its own separate entrance from the house, a small kitchen, washer and dryer (shared with upper floor), with wall-to-wall carpeting in a large living area and the larger of two separate bedroom spaces.

The smaller bedroom has hardwood flooring, but not a true legal bedroom. It would work fine for overnight guests, office, study/media or workout room.

Cozy, functional kitchen with refrigerator, electric stove/oven, exhaust fan and microwave. Quite a bit of space for someone who wants more than the typical cramped one-bedroom in this price range!

Semi-private partially-fenced backyard with deck and awesome view of Mt Rainier, Cascades, Lake Washington and Bellevue skyline. Not a noisy apartment complex--this space also comes with one off-street parking space in a shared driveway.

Free utilities include wireless internet, basic cable TV, electric, garbage, sewer, and lawn maintenance. Easy access to I-90, highways, and bus lines.

All monthly tenants must submit an application, with screening on background, credit, income and rental history.

Mortgage Interest Rates Over the Past Two Decades

This is a pretty cool chart showing the trend in mortgage interest rates over the past two decades:

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In addition to the drop in housing prices, it makes owning a home even more affordable today!

Learn How to Earn a Better Rate of Return!

Are you disappointed in the performance of your portfolio of stocks, bonds and equities? Are you looking for a higher rate of return on your bank savings and CD accounts? Would you like to be earning more money for retirement on your IRA and 401K accounts?

What type of investments are most attractive to you? What are the most important factors you consider when deciding on an investment?

What rate of return do you need to make to feel satisfied with your investments in mutual funds, IRAs or 401K?

What rate of return do you expect from your money market, savings, and bond accounts?

What rate of return would you look for on your real estate invesments?

What rate of return do you expect for lending private funds? Have you thought about lending private funds?

If you would like to learn more about private funding, and how it works, please send for our free report on private lending by responding to this post, or confidentially to me at HomeLandInvestment@gmail.com. There is no obligation or cost to get some free information, and to determine whether private lending is right for you.

Can't You Get a Mortgage?

Inevitably, when approaching a seller about providing owner financing, this question comes up.

Well, if you can put 10% down and pay 5% interest, why don't you get a mortgage?

Here is my response.
First, a bank may not let me put as little as 10% (or less) down on a property today, and certainly not if it is a non-owner-occupied investment property or rental. Investors are significant buyers in today's market, the first to go in where others fear to tread. By requiring a 20-30% down payment, as many traditional lenders do, an investor who often plans to spend that much in remodel costs anyway, will balk. Better to find a deal that does not require that much out-of-pocket cash.

The less cash I have to put down, the more deals I can buy. Or the more I can put into fixing up the property.

Banks have all kinds of requirements that an investor might find onerous. For example, lenders will limit the number of properties that a single investor may finance. The limit may be four, or it may be ten properties. Again, with seller financing, an investor does not have to limit the size of his portfolio and can buy more properties than dealing with a bank.

Until recently, FHA financing required a lengthy amount of time for "seasoning." (See my previous post on this). An investor was unable to buy a property, fix it up, and resell it without having to wait for this "seasoning" term to expire. Therefore, many investors stopped flipping and hence, stopped buying.

Banks require appraisals, pre-payment penalties, mortgage insurance and other fees that add to the cost of a property, and limit an investor's flexibility.

Nationally-known note-buyer Eddie Speed claims that 50% of deserving buyers cannot qualify for a mortgage today.

A seller offering owner financing has a larger pool of potential buyers, can get a higher price for his property, and receives an above-market rate of return on his cash. In some cases, through seller financing, he may be able to defer capital gains taxes. And his investment is secured by collateral (his property he sold)that he knows.

Sure there are risks for the seller, but these can be mitigated. If the buyer/borrower has a good credit score - say anything higher than 690 - good references and track record, good income, and/or some "skin in the game" (which includes not only the down payment to the seller, but also the investment they intend to make in the property), then the seller can feel more secure about making a loan.

And if the buyer should default, the seller gets to keep all the money he has already received, all of the improvements to the property, and gets his property back to keep or sell again. Furthermore, Washington is a non-judicial foreclosure state, which means that the foreclosure process is much faster than in a judicial state.

Why can't the buyer get a mortgage?
Well, maybe he just doesn't want one....

Great Refinance News for Investors!

This just in, courtesy of Guild Mortgage:
Fannie Mae recently released new guidelines on cash out refinances for investment properties. These new rules will open the doors for a significant number of investors to re-coup their money when they purchase a property and for those who own 5 or more properties. No longer will an owner have to wait six months to get their money back when they purchased a property with their own funds. Before this change a homeowner who paid cash for a new investment property would have to be on title for six months before Fannie Mae would allow a cash out transaction for them to get their money back.

Here’s how it works. Fannie still considers it to be a cash out transaction, but as long as the owner meets the following conditions they can get their money back and help with their cash flow.
The new loan amount can be no more than the actual documented amount of the borrower's initial investment in purchasing the property plus the financing of closing costs, prepaid fees, and points (subject to the maximum LTV/CLTV/HCLTV ratios for the transaction).
The purchase transaction was an arms-length transaction.
The transaction is documented by the HUD-1, which confirms that no mortgage financing was used to obtain the subject property.
The sources of funds for the purchase transaction are documented (such as, bank statements, personal loan documents, HELOC on another property).
All other cash-out refinance eligibility requirements are met and cash-out pricing is applied.
Note: The preliminary title search or report must not reflect any existing liens on the subject property. If the source of funds to acquire the property was an unsecured loan or HELOC (secured by another property), the new HUD-1 must reflect that source being paid off with the proceeds of the new refinance transaction

The news also keeps getting better. Before these new guidelines were implemented people with 5 to 10 financed properties were out of luck. They couldn’t do a cash-out transaction at all, regardless of how long they owned their properties, they were limited to standard rate and term refinances. The doors are now open for them as well. As long as they meet the stricter standards set for those with multiple properties, they too can get their money back.

Don’t keep this news to yourself it could open doors for more investors and those that have been stymied by the long time frames in the past.

Sunday Tour of Bargain Homes In August!

Our Sunday Tour of Bargain Homes in Seattle will be starting up again in August. We will be featuring properties of special interest to investors, cash-buyers, and first-time buyers. Now is a great time to cherry pick from among the many motivated buyers in the marketplace! Inventory is up, prices are down, and mortgage interest rates have never been lower.

Here is our tentative schedule of tours, every Sunday in August from 1-3pm:
8/7 - Seller Financed Properties for Sale
8/14 - Estate Sales (Free & Clear) Properties
8/21 - Fixers
8/28 - REOs, Foreclosures

We try to focus on desirable Seattle neighborhoods and desirable home configurations (eg. 3BR/2BA) as much as possible, to find the very best deals for our buyers!

The tours are free! Please post a comment here or contact me directly, if you are interested in any of these tours.