January 2010

Investment Exchange

An educational real estate newsletter

GETTING YOUR HOUSE IN ORDER

If one of your New Year's resolutions is to buy yourself a house, you've come to the right place.

The market is still ripe for the picking. You have a lot of choices, especially when it comes to the distressed property market. There are lots of great properties in areas all over the country, so there has literally never been a better time to buy.

Even better are the low mortgage rates — some under five points — and government tax incentives designed to sweeten the pot. With up to $8,000 back in your pocket and a crazy cheap mortgage, your dreams of becoming a homeowner aren't far from reality.

Of course, good deal or not, a home purchase is still a big investment. You need to crunch the numbers and get your credit in order to figure out what kind of property you can afford. The last thing you want is to get in over your head — that's what caused the housing market we're experiencing now.

So, lots of inventory, cheap mortgages, and cash back for your purchase. What's the catch?

Only that it's ending soon. Mortgage rates are expected to increase in the early spring and the government tax breaks disappear April 30. And, as the economy continues to improve, the best properties will start to disappear ... fast.

Not sure what you can afford? Worried about your credit? Stuck in a lease? Get your answers here. This New Year's edition is all about helping you get your ducks in a row so you can make a purchase as soon as possible.

Time is money ... especially in real estate. Here's to a prosperous 2010!

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Site feature spotlight

ATTENTION FIRST-TIME BUYERS!

Amazing foreclosure deals are coming up and being sold every single day. This market is so hot that your dream house could be here and gone without you even knowing it ever existed!

That means that first-time homebuyers need all the help they can get.

It's Foreclosure.com to the rescue with our First-time Homebuyer Program Webinar.

Taught by 23-year residential real estate veteran Patrick Butler, the First-time Homebuyer Program will teach you how to:

• Find the best financing
• Get involved in housing assistance programs
• Choose and work with real estate professionals
• Spot those amazing deals
• Make the power of Foreclosure.com work for you

Patrick's expertise and easy-to-understand style combine to make this Webinar perfect for those of you looking to save a bundle by buying distressed properties. A short sale expert and Director of Partner Relations for QuickSale.com, Patrick helps first-timers navigate the process like old pros.

This Webinar is currently available On Demand, which means that you can watch it whenever you like. There's no waiting around, so get this Webinar to learn the tools to first-time homebuyer success — when and where you want.

In the hottest buyers' market we're likely to see in this lifetime, get the resources you need to find those foreclosure properties fast and cheap. The First-time Homebuyer Program will teach you everything you need to know.

Act now before it's all just a memory.

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Web site search tips

HOME AFFORDABILITY CALCULATOR

When you're thinking about buying a new home, it's essential to know what you can expect from any given purchase.

The current market situation was created by people who got in way over their heads and then lost their homes. It was a mistake from which you can't afford not to learn.

Literally.

Foreclosure.com's home affordability calculator is a helpful tool for figuring out what your budget can and can't handle. Simply input your monthly income, debt and expected loan rate, and you have a ballpark figure to keep in mind when house hunting.

The calculator also lets you see how much you can afford with various down payments, loan terms and more. Think of it as a snapshot into the future: It should give you a good idea of how to shop within your price range.

Before using our home affordability calculator, make sure you draft a rough personal income statement. Don't forget about income from investment, alimony, pensions, etc. In a similar vein, remember all of your debt load — car payments, student loans, credit cards.

The more thorough you are with your income and expenses, the better prepared you'll be. However, it's always wise to tack on an extra 10 percent for unforeseen expenses. Better to have a little financial cushion than to be stretched to the max once all is said and done.

Foreclosure.com's home affordability calculator is free to use, so click here to get started. While you're at it, you can check out all of our other calculators to help make your purchase as straightforward and predictable as possible.

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Hot off the press

TIME'S RUNNING OUT ON LOW RATES

Mortgage rates, many of which are still below 5 percent, won't stay that low forever.

Lenders are still luring buyers in with rock-bottom numbers, but the clock is ticking.

The Federal Reserve, which is largely responsible for the low rates, will end its program of buying up mortgage-backed securities on March 31, 2010. That's when private investors will get involved, meaning that rates will likely rise to "normal" levels.

Stuart Hoffman, chief economist for PNC Financial Services, predicts that "mortgage rates will rise to attract investment," creating another forthcoming step in repairing the stock market and the overall economy.

He expects rates to stay level until buying season in the spring, which will trigger a rate increase that could get as high as 6 percent by the end of the year.

Therefore, if you want to take advantage of the rates while they're still low, the time to act is now. That means you have to start checking out properties and make sure your credit is as perfect as possible.

If you don't know your credit score, find out as soon as possible. Then deal with any blemishes that could cause lenders to balk. Check for fraud and dispute inaccuracies. Sometimes it doesn't take anything more than a couple of phone calls to get your credit back in ship-shape.

If absolutely necessary, contact a credit repair specialist (but only after you've done everything you can on your own first). Be wary of who you solicit for help — choose someone with references and a proven track record.

Your credit score is the gatekeeper between you and your mortgage. Get cracking now so you can get that hot property with a steal of a mortgage before it's too late.

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Our success stories

YOUR BEST YEAR EVER

We can't stress it enough: If you're thinking about buying, the time is now.

Here are the top four reasons that 2010 is your year for making your real estate goals come to fruition:

#1: Rock-bottom interest rates

Interest rates vary from state to state, but the trend is still remarkably low. With the national average hovering around five points, we can safely say there's almost never been a more affordable time to get a mortgage.

#2: Tons of inventory

If it's selection you want, it's selection you've got. All across the country, there are thousands of properties just waiting to be snapped up. Urban, suburban, apartment-style, single-family, renovated or fixer-upper, your ideal property is out there and it's in your price range.

#3: Super undervalued properties

It's simple supply and demand: All this inventory has driven home prices way down. That means that your dream home is not only more affordable than ever, but it also means that once you buy you're poised to make a killing when the market recovers.

#4: Government incentives

Saving up to $8,000 on your taxes just for buying a home sounds like a pretty good deal, doesn't it? That's what's waiting for you as long as you act right now. Even non-first timers can now get in on the deal — up to $6,500. Don't wait because these perks expire on April 30, 2010, and it can take several months to close a deal ... so get yourself in gear!

These combined factors make right now an absolutely perfect buyers' market. Stop dreaming about being a homebuyer and/or property investor and start making those dreams a reality.

You'll be kicking yourself if you let these once-in-a-lifetime market conditions pass you by. Get  started on Foreclosure.com today. Your 7-day trial is on the house.

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Real estate tips

PLAN YOUR EXIT

Wish you could buy but stuck in a lease for several more months?

It's a common issue for first-time homebuyers. You want to buy a home but you obviously need somewhere to live while you're searching. Many landlords simply aren't willing to rent to you month to month.

Here's what to do if you've got a lease you'd like to get rid of with as little hassle (and money) as possible:

• Communicate with your landlord early and often. Get to know the people who hold the lease over your head. The kinder you can be, the better — people are more likely to be nice to you if you're nice to them.
• Be transparent about the fact that you're house-hunting. Landlords do not like this type of news sprung on them. Most will be happy to let you out of your lease if they have someone else lined up to take your place. Be ready to cover any interim months during which the property is vacant.
• Offer to help find a tenant. Perhaps you know someone who's looking to rent. Perhaps you could tidy up, take some photos of the place, and place an ad online (many services let you do this for free).
• Be flexible about showings. You could even offer to conduct the showings yourself. The easier the process is for your landlord, the more likely it is you'll be able to get out of your lease whenever you want.
• Re-read your lease. Perhaps there is a clause in there that lets you out early. Also check for clauses that your landlord may not have upheld to the letter. More serious matters may be grounds to void the lease. If you think this may be your situation, check out the tenancy laws in your state.

If all else fails, work out a payment plan with your landlord. You don't want anything ugly on your credit when you're getting ready to apply for a mortgage.

Remember, it's better to take advantage of the real estate market while you still can and lose a couple of thousand on rent (worst case scenario) rather than miss out on a deal that could both save you thousands now and make you big bucks down the road.

The math of real estate investment is not always super straightforward. That's why we've compiled a list of handy calculator tools to help you figure out what you can — and can't — afford.

We have loan calculators, down payment calculators, home equity calculators, rent vs. buy calculators and more. It's everything you need to start doing the math on your next property acquisition, all on one page.

To check out the Foreclosure.com calculators click here.

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BONUS ARTICLE

THAN MERRILL:

MARKETING —
THE FOUNDATION OF YOUR REAL ESTATE BUSINESS

Read more

At my real estate seminars I am often asked by my students what area of the business they should focus on first. I can relate to their concerns because I know how much there is to learn when you are building a real estate investment business. Unfortunately, some investors flounder the first couple of years in the business because they try to learn a little bit of everything without mastering anything. As a speaker and educator, I think the opposite approach is better. Instead of trying to dabble in every niche, I think you should spend the majority of your time studying the areas of the business that generate revenue NOW! You can learn the rest of the business as you go along, but what is important now is to get your phone ringing off the hook. You are looking for motivated sellers willing to sell you their properties at 50 to 65 cents on the dollar. In order to do this you must become a Master Marketer!

Your knowledge of marketing will be the foundation from which your business is built. Marketing is what makes the phone ring and generates leads. Leads are the lifeblood of your business. They are the oxygen your business breathes. The more leads you have the more money you will make. So how do you become a better marketer? First, you must understand the principals all successful marketers live by.

Real Estate Marketing Principal #1: Define Your Target Market

You must understand that only 5% of all sellers are truly motivated and will be willing to sell their property at a significant discount. Therefore, you will want to gear your marketing efforts towards people who have a reason to sell their property under market value. There are many reasons why someone would want to sell their property at a discount. Death, divorce, bankruptcy, and foreclosure are just a few of the many examples of why someone would want to get rid of a property quickly. You can find many of these lists through the public records with a little effort. Once your target market is located, you must then reach out to these people through your marketing efforts.

Real Estate Marketing Principal #2: Create a Compelling Message

Once you have narrowed down your target market you then must compel the prospect to take action. Distressed property owners are by nature procrastinators and thus unlikely to respond to a generic offer. Therefore, you must create an irresistible offer so compelling it gets the prospect off the couch and over to the phone. The message must strike an emotional chord within the prospect if it is going to be effective.

Real Estate Marketing Principal #3: Create Systems for Outsourcing and Deliver

Most prospects don't respond to your marketing efforts until they have seen your message at least seven times. Successful marketers realize they need a system to accomplish this. It is virtually impossible for any investor to fulfill all of their marketing campaigns by themselves. Without systems you will continually be short on time and short on quality leads.

If you ever have the pleasure of visiting my office you will see that we have a system for every one of our marketing campaigns. For example, we mail to homeowners in bankruptcy every Monday. Every week my marketing assistant grabs the new list off the internet. She then downloads the names into our database for tracking purposes before emailing the list off to an intern. The intern then uses the pre-designed letters and postcards on file to fulfill the mailing. The mailings are then organized and mailed out on Tuesday. The beauty of the system is that I have nothing to do with the process and all I have to do is pick through the deals when they come in.

It is your job as the business owner to understand the importance of using systems that can be outsourced to other people. Otherwise, you will forever be stuck in your business and will never free yourself from the drudgery of WORK.

Real Estate Marketing Principal #4: Test and Track

One of the most common problems real estate investors make is not testing and tracking their marketing. When it comes to marketing and running a business the devil is in the details. Marketers are usually ultra-creative people and often times allergic to the bottom line. However, there is nothing more important when it comes to building a business. Your goal as a marketer is to have a system to concisely test and track your marketing and understand the numbers. Measurement eliminates waste and tracking your results will help you build a profitable real estate investment company.

I sit down every month and review my marketing expenditures. I look at how much was spent, how many leads came in, and which campaigns produced actual deals. I then make decisions for the next month shifting money from one marketing campaign to another so as to maximize the return on my investment. If you don't have a tool for testing and tracking your marketing then precious dollars will slip through the cracks. I created a tool to track my marketing and it is highly effective and has literally saved me thousands of dollars over the years.

Than Merrill, CEO of FortuneBuilders, INC and CT Homes, LLC is currently a full time real estate investor, speaker, and one of the most successful investors in the nation. He is also the star of A&E's hit TV show "Flip this House". In the past few years his company has bought and sold over 350 properties across the nation. Than's clients are some of the most successful investors around the country as a result of the cutting edge marketing and wholesaling systems he has developed.

Than is a graduate of Yale University and he currently resides in New Haven, CT. After college, he played in the NFL with the Chicago Bears and Tampa Bay Buccaneers before moving on to real estate development. To find out more about Than's powerful real estate seminars and home study courses click here or call his office at 203.789.1111.

Remember that Than is also going to show you how to "Make $20,000 While You Sleep" in an upcoming Foreclosure.com training Webinar! To learn more and/or reserve your seat today click here

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Deals of the Month

HOT FORECLOSURE DEALS!

Pataskala, OH
$134,900
3 beds/2.5 baths
1,767 sq. ft.

Baxter, IA
$145,900
4 beds/2 baths
1,568 sq. ft.

Southern Pines, NC
$224,995
4 beds/3 baths
2,230 sq. ft.

Linda's Learning Lane

SETTING GOALS CAN BE A POSITIVE
AND FRUITFUL EXPERIENCE

Indeed, getting in the habit of writing down what it is you really want will add clarity and focus to your life. This year, Foreclosure.com is going to show you how to do just that (if you don't know already), while taking you on a journey of investing in distressed real estate.

This month's issue focuses on credit and getting your "financial house" in order. And there is no better time to
start than the present!

What can you do in the next few months, weeks and days to increase your credit score? What different expenditures can you give up to realize a long term goal?

First, you must take a hard look at your situation and set reachable and measurable outcomes. Then as you set these goals, list out milestones on how you plan to achieve them so that you can chart your progress. Lastly, it's important to define the daily or weekly tasks you will need to do to complete them.

Now that you have done your planning, go to work!

Sometimes I find more enjoyment in the journey than the finish line. So as you reach your finish line, be prepared for what you would like to accomplish next. Baby steps can make a huge difference in realizing your dreams.

The key is consistency.

Never give up, keep pressing forward and the prize will be yours for the taking!

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