MAKING MONEY IN 2015

WITH

SHORT SALES

&

REO INVESTING

Maryknoll Road

Pikesville, MD

Profit - $14,280

Valarie Scott

Short Sale Mentoring – Deals Done 4 U Program

(410) 715-9696 - info@REiSuccessCenter.com

Arcadia Avenue

Capitol Heights, MD

Profit - $19,616

Hobart Ct

Randallstown, MD

Profit - $19,901.60

Valarie ScottsCenter.com

Arcadia Avenue

Capitol Heights, MD

Profit - $22,000

Valarie ScotteaCenter.com

Manatee Drive

Virginia Beach, VA

Before Rehab After Rehab

Profit - $30,657.23

Valarie – Deals Done 4 U

Spike in Foreclosures

According to CNBC in January 2015:

There was a spike in foreclosure activity

Pre-foreclosures – 48,838 (lenders began foreclosure

process)

Auctions – 51,782 homes were scheduled for foreclosure

actions

Foreclosure – 37,292 homes were repossessed

States With Highest

Foreclosure Rates 1) Florida

2) Nevada

3) Maryland

4) Illinois

5) New Jersey

Valarie Scott ogra

Spike in Foreclosures

How does this spike in

foreclosure activity impact

Real Estate Investors and

those who want to start

investing in Real Estate?

Valarie Scottra

Spike in Foreclosures

Lots of Inventory!!

Plenty of Houses For You

To Make Lots of Money in 2015!!!!

Valarie Scott Do 4

Spike in Foreclosures

What are some ways you can

make money investing in

foreclosures?

Wholesaling Fix and Rent

Fix and flip Lease Options

Valarie Scott

Realty Trac reported last month, that

approximately 119,888 properties were in

some stage of foreclosure.

Many of these houses are bound to end

up going through one or more of the four

stages of the Foreclosure Process.

Four Stages of the Foreclosure Process

1) Pre-Foreclosure - This is the phase in

which the homeowner stops making

mortgage payments to the bank. The

homeowner is receiving default letters

and if the delinquency is not resolved, a

notice of default is filed.

2) Foreclosure - The property is sold at

public auction.

Valarie Scott

Four Stages of the Foreclosure Process

3) Redemption Period - This is the phase

after the foreclosure sale and the property

has been sold at public auction. This is

the homeowners’ last chance to save their

property by paying off the mortgage in full

along with all fees. (A Redemption Period

is not applicable in all states)

Valarie Scott

Four Stages of the Foreclosure Process

4) REO (Real Estate Owned by the

Bank) If an acceptable offer is not

received at the public auction, the

property is then taken by the bank.

The bank will then try to sell the

property to (regain or recoup) some

of its loss.

Valarie Scot

Today, we will focus our attention on the first

and last stages of the Foreclosure Process.

Pre-Foreclosures and REOs

Pre-Foreclosures!!! This is the stage in which a

Short Sale can occur.

Foreclosure Laws

It is imperative that you

comply with all state and local

foreclosure laws

Valarie Scott

Short Sale Mentoring – Deals Done 4 U Program

(410) 715-9696 - info@REiSuccessCenter.com

Applicable Maryland

Foreclosure Laws Protection of Homeowners in

Foreclosure Act (PHIFA)

Owner occupied properties

Not more than four (4) single family dwelling units

Mortgage payment is at least 60 days in default

A purchaser can not represent directly or indirectly that

they are acting on behalf of the homeowner to save their

house from foreclosure

Valarie Scott

Applicable Maryland

Foreclosure Laws

Maryland Credit Services Business Act

No up front fees

2009 issued regulation stating you must be licensed to

provide loss mitigation consulting, loan modification

services, etc.

2013 revised regulation, no longer requiring a Credit

Services Business License to offer these services

Valarie Scott

Applicable Maryland

Foreclosure Laws

Maryland Real Estate Commission

Maryland Real Estate commission Short Sales & Real

Estate Licensees

www.dllr.state.md.us/license/mrec/mrecshortsales.shtml

Valarie Scott

The sale of a property that generates

less money than the amount owed on

the property

A Short Sale occurs when both the

lender and borrower agree that selling

the property at a loss is a preferable

alternative to foreclosure.

Valarie Scott

What is a Short Sale?

Creating Equity

The objective of a Short Sale for an investor is to create

equity in properties that have no equity.

What is Equity?

Equity is calculated by taking the market value of a

property and deducting the amount, if any, still owed on a

mortgage

Example: $187,000 Market Value

- $ 72,000 Amount still owed on mortgage

$ 115,000 Equity

Essential Building Blocks

for Successful Short Sales

“You” the Smart Investor Analyze and evaluate properties to determine

purchase offers

Estimate property repairs – Hammerpoint.com

Pull and analyze Comps (comparable sales)

Free Websites Paid Websites

Zillow.com realquest.com

Redfin.com mris.com

Valarie Scott

Real Estate Agents

Most banks want short sale properties listed on

the MLS

Per Fannie Mae guidelines:

Standard short sale/HAFA must be listed with

an active status on the MLS for a minimum of

5 consecutive calendar days, including 1

weekend, prior to submitting an offer to

Fannie Mae for review. Valarie Scott

Real Estate Agents All FHA short sale properties must be listed on the

MLS (Amount of time listed on the MLS determines

amount property will be discounted)

Liaison between the seller, bank and you (the buyer)

Collect and handle the short sale paperwork

Prepare Purchase Contract and submit Your Offer

to the bank

Valarie Scott

Real Estate Agents Locate Real Estate Agents

CDPE.COM website

MRIS

REIA Meetings

Valarie Scott

Real Estate Agents

Interview Real Estate Agents

How many short sales have you done

Do you like working with short sale properties

Explain to me the short sale process

Will you attend the BPO or will I be required to

meet the BPO agent?

Motivated Cooperative Sellers

How to Locate Potential Short Sale Properties

Realty Trac Your Website

List Source Social Media

Foreclosure.com Farm Neighborhoods

MRIS/Realtors Bankruptcy/Pacer

Craigs List Bandit Signs

Valarie Scott

Motivated Cooperative Sellers

Market to Delinquent Homeowners

Yellow Letters Real Estate Agent

Post Cards Social Media-Facebook

Valarie Scott

Short Sale Mentoring – Deals Done 4 U Program

(410) 715-9696 - info@REiSuccessCenter.com

Motivated Cooperative Sellers

Bank Incentive for Homeowners

HAFA Relocation Assistance increased from

$3,000 to $10,000 on February 1, 2015

Bank of America Cooperative Short Sale

Program

$2,500 - $30,000 in financial assistance

Valarie Scott

Short Sale Mentoring – Deals Done 4 U Program

(410) 715-9696 - info@REiSuccessCenter.com

Exit Strategies

Your exit strategies must be determined prior

to submitting an offer to the bank

Wholesaling

Fix and Flip

Fix and Hold as rental

Fix and Reside in the property

Valarie Scott

Exit Strategies

When Wholesaling a short sale property the

following closing strategies can be utilized

LLC Assignments (most common in this area)

Double Closing (when allowed, rarely used)

Land Trust

Release of Contract

***PLEASE NOTE*** Short Sale

Contracts Cannot Be Assigned

Investor Friendly Title Company

All Title Companies may not subscribe to the

closing strategies required to effectively close

your short sale deals.

Therefore, it is imperative that you have at

least 3 or more Title Companies / Attorneys

on your team.

Valarie Scott

Essential Building Blocks

For Short Sale Success

Loan Look Up

To determine if the homeowner has a Freddie

Mac or Fannie Mae Loan, use the following

websites:

Freddie Mac Loan Look Up tool

www.w3.Freddiemac.com/loanlookup

Fannie Mae

www.knowyouroptions.com/loanlookup

Valarie Scott

Some Advantages to

Short Sale Investing

In many cases, NO Earnest Money Deposit

Required

Real Estate Agent prepares Purchase Contract

and Applicable Addendums

It is not difficult to get out of contract if you no

longer want the property

What Is A REO?

A REO is Real Estate

Owned by Banks

Valarie Scott

How Do We Locate REO

Properties?

MRIS – Contact a Real Estate Agent

who can search for properties that meet

your buying criteria

Valarie Scott

Online Sources for

REO Properties

Hubzu.com Frankly.com

RealtyTrac.com Redfin.com

Zillow.com Homefinder.com

Foreclosure.com Homegain.com

Realtor.com Homepath.com

Valarie Scott

REO Bank Websites

www.reo.wellsfargo.com

www.servicing.chase.com/REO/Property/GetAdv

AdvancedSearch

www.realestatecenter.bankofamerica.com/pages/

map-search

www.ocwen.com/reo/home.cfm

Additional Sources of

REO Properties

Fannie Mae

Freddie Mac

Internal Revenue Service

The Department of Veterans Affairs

Hudhomestore.com.

Valarie Scott

Making REO Offers

REO real estate investing is a numbers game and

many offers must be submitted. If you are not

making lots of offers, you cannot make money

with REO Propeties.

As a REO investor, your goal is to acquire

properties at discounted prices. Therefore, your

offers will be typically low as compared with the

After Repair Value (ARV) of the property.

Tips for REO Investing

1. Banks Do Not like contracts with

contingencies Avoid using the following

contingencies:

Subject to home or interior inspections

Subject to Property Repairs

Subject to a Partner’s Approval

Subject to Termite Inspection

Tips for REO Investing

2. We Do Use a Financing Contingency to

avoid losing our earnest money deposit if for

some reason we are unable to close on the

property. Please note that some of your offers

may not be accepted when the financing

contingency is included in the purchase contract.

However, it is better than losing your Earnest

Money Deposit on a property when your offer has

been accepted and you are unable to close.

Tips for REO Investing 3. It is best to have the REO Listing Agent

write the contract. Remember Real

Estate Agents are commissioned driven.

REO agents make less on REO properties

than standard transactions. Typically 1%

to 2% per transaction, 2% to 4% if the

REO Agent gets the listing and selling

commission.

Valarie Scott 4 U

REO Accepted Offers

When the Bank Accepts Your Offer:

Your Real Estate Agent will receive an email

advising that the offer has been accepted and

Bank Addendums will be generated by the

bank.

Be sure to read the Bank Addendums carefully.

Valarie Scott ng – Deals

REO Accepted Offers

When the Bank Accepts Your Offer:

All terms are outlined in the Bank Addendums,

Purchase and Sale Agreement

- Closing Date

- Financing Contingency Accepted or Not

Accepted

- Assignment of Contract

- Etc…

Valarie Scott

REO Closing Strategies ***Please Note*** REO Purchase Contracts

Can Not Be Assigned

If you plan to wholesale the REO property, the

following c/losing strategies must be used:

Double Closing (A to B, B to C)

LLC Assignment

Valarie Scot U

Legitimate Reasons to

Get Out Of A REO Contract Property Condition – If the condition of the

property has deteriorated since your offer was

accepted by the bank

Code Violations – Code violations that the

bank refuses to correct

Closing Delayed – Bank fails to close on time

due to foreclosure complications

Valarie Scott

Legitimate Reasons to

Lower Your REO Offer

Condition of property has deteriorated

since you signed the contract

Property has been recently vandalized

Code Violations or liens discovered by

the Title Company

Valarie Scott Pro

Some Advantages to REO Investing

You do not have to deal with

homeowners

You do not have to deal with

applicable foreclosure laws

regarding homeowners in

foreclosure

Valarie Scott m

Some Advantages to REO Investing

Short purchase time

In most cases, Real Estate Agent

prepares the purchase contracts

and applicable addendums

Valarie Scott

Short Sale Mentoring – Deals Done 4 U Program

(410) 715-9696 - info@REiSuccessCenter.com