The Wall Street Journal
DECEMBER 1, 2009
Guidelines Aim to Ease Short Sales
By RUTH SIMON
The Obama administration laid out final guidelines on Monday that should make it easier for some financially troubled borrowers to sell their homes.
The guidelines are designed to encourage the use of short sales, transactions in which the borrower with lender approval sells the home for less than what is owed on the loan. The program also makes it easier for borrowers to voluntarily transfer ownership of properties through a "deed in lieu of foreclosure."
Short sales can result in higher prices than foreclosures and can be less damaging to local neighborhoods, in part because homes aren't left vacant and exposed to vandalism. But these transactions are often difficult to complete.
Under the plan, borrowers will receive $1,500 from the government if they sell their homes for less than the amount of their mortgages. Mortgage-servicing companies will also receive $1,000 for each completed short sale. The program is open to borrowers who may be eligible for the government's loan-modification program, but don't end up qualifying, or are delinquent on their modification, or request a short sale or deed-in-lieu transaction.
The short-sale program is the latest addition to the Obama administration's $75 billion foreclosure-prevention plan, which includes incentives for mortgage companies and investors to rework troubled loans. The government first said in May that it would include short sales in the program, but it has taken months to finalize the details.
Under the new guidelines, second-mortgage holders can receive up to $3,000 of the sales proceeds in exchange for releasing their liens. Investors who hold the first mortgages, meanwhile, can collect up to $1,000 from the government for allowing such payments.
Borrowers who complete a short sale under the program must be "fully released" from future liability for the debt, according to the guidelines.
Write to Ruth Simon at ruth.simon@wsj.com
Printed in The Wall Street Journal, page A6
http://online.wsj.com/article/SB125963239592170665.html
Friday, January 8, 2010
Sunday, January 3, 2010
The Pros and Cons of Renting to Section 8 Tenants? by Mike Lautensack
Here is a great article on the pros and cons of renting to Section 8 tenants. It’s written by Mike Lautensack of http://www.learnrealestateinvestingblog.com/. Here is the link; check it out: http://www.learnrealestateinvestingblog.com/property-management/the-pros-and-cons-of-renting-to-section-8-tenants/
The Pros and Cons of Renting to Section 8 Tenants? by Mike Lautensack
You may be a brand new investor or a seasoned investor looking for new ways of increasing your income. Some of the real estate guru’s have made big money selling real estate investing courses touting the benefits of government programs, specifically Section 8 housing, and how you can make money hand over fist.
Others take a more cautionary approach, essentially arguing just the opposite.
With two opposing views, who’s right, who’s wrong, and what’s the difference?
There are a couple of Pros to Section 8 investing. But as you will quickly see the list of Pros is much shorter than the list of Cons.
First, if you rent to Section 8 tenants, you know you’re going to get your rent money. As a general rule, it’s going to come in like clockwork. You’ll have your money each and every month, conveniently deposited into the bank account of your choice.
Second, if you advertise the fact that you accept Section 8 tenants, you will have no shortage of prospective tenants lining up with a housing voucher ready to move in on a moment’s notice. When tenants are hard to come by, say in a strong housing market, it’s an excellent way of guaranteeing a steady flow of renters willing to be your tenants.
Unfortunately, this is where the list of positives ends.
Section 8 tenants can present a host of challenges and problems to you from a variety of angles.
First, as a property owner, you may be lured by the easy money that renting to Section 8 tenants can generate, but if you think the Paperwork Reduction Act applies to Section 8, you have a lot to learn.
Whenever you deal with any government bureaucracy, there are massive paperwork considerations. If every I isn’t dotted and every T crossed on every form the government throws your way, you’re in jeopardy of not being paid, having your payment delayed or even worse being declared a slumlord.
We have also seen when all the paperwork and other delays can take anywhere from 3 to 5 months to complete. During this period your property sits empty with no income.
Second, Section 8 requires property inspections. In order to participate in Section 8 you first have to qualify as a property owner, which means an inspection. If the inspector finds deficiencies of any kind, they have to be corrected on the government’s timetable. Once you’ve met the timetable, you have to repeat the inspection process. When you’ve waded through all the red tape necessary to accept tenants, you really get into the heart of the problem of the Section 8 program dealing with tenants.
Third, there are Section 8 tenants who are attentive to your rules, but there are plenty of bad apples. If you have a troublesome renter one that can’t/won’t pay their rent on time or is a constant troublemaker, your inclination is to give them their walking papers (i.e., eviction). But if the individual you’re trying to evict is a Section 8 renter, you have to follow due process rules that are stricter than any state laws anywhere.
Once you’ve begun eviction proceedings, Section 8 tenants are entitled to free or very low cost legal assistance. Once an attorney enters the picture, this turns into an expensive, time consuming process. You need to ask yourself at what point does a guaranteed rent payment become not worth the hassle, the expense and the headache?
Fourth, we generally see that Section 8 pays about 70% to 80% per month of what you might get for normal tenant. So you need to make decision as to whether this discount is offset by the consistent payment source.
Fifth, Section 8 renters aren’t famous for taking care of your property. So unless you’re willing to entertain the thought of having to make extensive repairs with little hope of recovering damages it is probably in your best interest to not involve yourself in the program to begin with.
As you can see the Cons of Section 8 investing outweigh the Pros. Our experience is the program has many problems and we rarely recommend Section 8 investing.
The Pros and Cons of Renting to Section 8 Tenants? by Mike Lautensack
You may be a brand new investor or a seasoned investor looking for new ways of increasing your income. Some of the real estate guru’s have made big money selling real estate investing courses touting the benefits of government programs, specifically Section 8 housing, and how you can make money hand over fist.
Others take a more cautionary approach, essentially arguing just the opposite.
With two opposing views, who’s right, who’s wrong, and what’s the difference?
There are a couple of Pros to Section 8 investing. But as you will quickly see the list of Pros is much shorter than the list of Cons.
First, if you rent to Section 8 tenants, you know you’re going to get your rent money. As a general rule, it’s going to come in like clockwork. You’ll have your money each and every month, conveniently deposited into the bank account of your choice.
Second, if you advertise the fact that you accept Section 8 tenants, you will have no shortage of prospective tenants lining up with a housing voucher ready to move in on a moment’s notice. When tenants are hard to come by, say in a strong housing market, it’s an excellent way of guaranteeing a steady flow of renters willing to be your tenants.
Unfortunately, this is where the list of positives ends.
Section 8 tenants can present a host of challenges and problems to you from a variety of angles.
First, as a property owner, you may be lured by the easy money that renting to Section 8 tenants can generate, but if you think the Paperwork Reduction Act applies to Section 8, you have a lot to learn.
Whenever you deal with any government bureaucracy, there are massive paperwork considerations. If every I isn’t dotted and every T crossed on every form the government throws your way, you’re in jeopardy of not being paid, having your payment delayed or even worse being declared a slumlord.
We have also seen when all the paperwork and other delays can take anywhere from 3 to 5 months to complete. During this period your property sits empty with no income.
Second, Section 8 requires property inspections. In order to participate in Section 8 you first have to qualify as a property owner, which means an inspection. If the inspector finds deficiencies of any kind, they have to be corrected on the government’s timetable. Once you’ve met the timetable, you have to repeat the inspection process. When you’ve waded through all the red tape necessary to accept tenants, you really get into the heart of the problem of the Section 8 program dealing with tenants.
Third, there are Section 8 tenants who are attentive to your rules, but there are plenty of bad apples. If you have a troublesome renter one that can’t/won’t pay their rent on time or is a constant troublemaker, your inclination is to give them their walking papers (i.e., eviction). But if the individual you’re trying to evict is a Section 8 renter, you have to follow due process rules that are stricter than any state laws anywhere.
Once you’ve begun eviction proceedings, Section 8 tenants are entitled to free or very low cost legal assistance. Once an attorney enters the picture, this turns into an expensive, time consuming process. You need to ask yourself at what point does a guaranteed rent payment become not worth the hassle, the expense and the headache?
Fourth, we generally see that Section 8 pays about 70% to 80% per month of what you might get for normal tenant. So you need to make decision as to whether this discount is offset by the consistent payment source.
Fifth, Section 8 renters aren’t famous for taking care of your property. So unless you’re willing to entertain the thought of having to make extensive repairs with little hope of recovering damages it is probably in your best interest to not involve yourself in the program to begin with.
As you can see the Cons of Section 8 investing outweigh the Pros. Our experience is the program has many problems and we rarely recommend Section 8 investing.
Thursday, December 31, 2009
INVESTORS! Do you have access to funds and are looking for a real estate DEAL!
INVESTORS! Do you have access to funds and are looking for a real estate DEAL!
Email me to be added to my exclusive buyers list. If I locate a deal, I will send you the information on the cost, Rate of Return (ROI), and After Repair Value (ARV) – so you know how much money you will potentially make at the backend.
These deals may not be for everyone, but they may be right for you. Please, email me with any questions. There is no cost or obligation.
Email me at liveoakproperties@gmai.com.
Email me to be added to my exclusive buyers list. If I locate a deal, I will send you the information on the cost, Rate of Return (ROI), and After Repair Value (ARV) – so you know how much money you will potentially make at the backend.
These deals may not be for everyone, but they may be right for you. Please, email me with any questions. There is no cost or obligation.
Email me at liveoakproperties@gmai.com.
Tuesday, December 22, 2009
GIVE..and you will receive!
Hey all!
I received this link (http://theforsakenchildrenproject.com/) in my email earlier today. I checked it out and it looked really good, so I donated.
Here is how it works. Go to this link http://theforsakenchildrenproject.com/ and donate twenty dollars to them. Why? Because it’s Christmas and the feels good to give! Now, here is something they are giving back…over $5,500 in free real estate investor training, programs, eBooks, etc. These resources come from some of the top real estate investors around. It was definitely worth the twenty dollars, and I felt good about my donation.
Merry Christmas!
I received this link (http://theforsakenchildrenproject.com/) in my email earlier today. I checked it out and it looked really good, so I donated.
Here is how it works. Go to this link http://theforsakenchildrenproject.com/ and donate twenty dollars to them. Why? Because it’s Christmas and the feels good to give! Now, here is something they are giving back…over $5,500 in free real estate investor training, programs, eBooks, etc. These resources come from some of the top real estate investors around. It was definitely worth the twenty dollars, and I felt good about my donation.
Merry Christmas!
Saturday, December 12, 2009
Welcome to Investing!
Hello!
We are Live Oak Real Estate Investments located in Charleston, South Carolina. We focus our investments on many forms of real estate investments.
We are always looking for:
Private Money Lenders (earn 8% to 12% on your investment – SECURED in real estate!)
Motivated Sellers – We pay cash and close quickly!
Buyers – Let us find and structure a deal for you. Many investment options! Contact us at liveoakproperties@gmail.com to put your name on our buyers list.
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