Have you ever thought about living in low income housing? The low income housing program was set up by HUD to allow people that were living in poverty to live in a better place.

In order to be eligible for low income housing, your income must be at or below poverty level. You can check these qualifications by going to HUDs website.

HUD will directly pay to the landlord a portion of the rent. You are responsible for the rest of the rent.

Go online to find low income housing. There are many websites you can use to find low income housing. You just need to know where you want to live, how big of a house you want to live in, and whether or not the landlord accepts section 8.

When you go look at the low income housing, be sure you bring some paper and pen to note what you like and dislike about the apartments. This is what you will use later to help you make a decision regarding the low income apartment you will move into.

Find out from the resident of the low income housing what they think of the place. Some answers you might want to find out are, how does the landlord treat the tenant? Does the landlord take care of issues quickly or is he more of an absentee landlord. You can generally get a good idea of how well the landlord takes care of the house by looking at the exterior and interior.

When going through and looking at the inside of the low income housing, point out all the problems and have it recorded. Tell the landlord to get it fixed before you rent the place.

Some landlords may not know what low income housing program is and therefore not accept section 8. In this case, you can tell the landlord about low income housing and how it would be benefit both of you.

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Home foreclosure is a not the best situation to be in. Once the notices start coming and the phone starts ringing you can’t really keep hiding. Your going to hear from lots of people who claim that they can help you. These calls are from organizations and companies that have their own motives and goals. Beware, in desperate times even a good sales pitch may sound like a miracle. Lets take a look at what they really want.

There are a number of people who are going to send mail or call. Most likely they were able to get your address or your number from the court system. Due to the legal nature of the process your information will be deemed as public and be published. This means anyone with internet access can find you. In some cases they may get your name from a list that was generated on the web…most of these lists go to investors/ investment trust companies.

The most common people or organizations that are going to give you call:

Swindlers/Con Men/Crooks

These are the ones you have to be aware of. (And there are a lot of them out there.) All of them offer promises and refer you to a chapter 13 attorney for collect a fee. In worse cases, they will take the deed of the house and force you to pay rent while leading you to believe that they can save your home and in the end you loose it all because they do nothing but take your “rent money” and skip town.

This is the most common problem you will face besides the actual foreclosure. Be very wary of anyone offering this type of “help”.

Mortgage brokers

They can help you by refinancing your property. However, these loans may have higher interest rates and closing costs than what you payed at the bank. Some may even charge you more to see how much you are willing to pay and take advantage of it. Not all brokers will rip you off. Over the last several years mortgage brokers have gotten the short end of the stick in the press. Shop around and ask family and friends for a referral if you decide to use a broker. (and just for the record..no I am not a mortgage broker)

Lawyers

This is your last resort. Most attorneys don’t really care about the situation you’re in or give you the attention you need.

Mortgage negotiators/Mortgage “Mod gods”

They negotiate repayment schemes with mortgage lenders. You can negotiate with the bank but in case it fails you can ask the help of a professional to get the plan approved. Some banks may impose a much more demanding plan and these professionals can get you a more favorable agreement.

Private Financers

These people are normally wealthy and are looking to loan you money, to cover your mortgage, at a higher interest rate. In some cases they will over to buy your house and lease to own it back to you…for a higher interest rate of course. (this may not be a bad option IF you can arrage something that works fr your financial position)

Mortgage/note holder

Your mortgage holder will call you to reinstate your house. This can be a good option depending on your situation. These are usually offered by mortgages backed by the government.

Whoever calls you or wherever the mail comes from be aware and think things through. You can stop a home foreclosure with the right options applicable for your situation. Do not throw in the towel if you don’t have to.

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What do investors regret the most in their first real estate direct marketing campaigns? They did not spend enough time in choosing the best mailing list available for their budget.

A good mailing list is an integral part in the success of a direct marketing campaign. Every experienced marketing professional already know this for a fact. They highly prioritize the process of choosing their mailing lists aside from the basic focus on their headlines and offers.

A basic direct marketing tenet every real estate investor should know is the 40/20/40 rule.

When working on your real estate direct mails, you should allocate 40% of your time and energy in crafting your offer; 20% should be allocated for design and content; and the last 40% to analyzing what mailing lists to choose and how to further refine it.

But the real tricky part is in finding a good mailing list. The best thing to do according to experts is by using a list broker. But be sure you know what to ask your list provider in order to properly choose the mailing lists.

So in order to select the mailing list that targets your market, you need to ask some questions. Specifically, use some of these the next time you speak with your list broker:

Make sure you know you customers well. Direct marketers must know very well their customers so that their list broker can give them a high quality mailing list. If you can provide him with sufficient information about your target market, likewise he’ll provide you with a better list.

Make sure to give him precise details such as the exact location of the customers you want in the list.

Identify your real purpose. Make sure that you are aware of what you want to accomplish whether to gather leads for future follow-ups or to increase your sales. When you let your list provider know your objectives, the job would be a lot easier on his part.

So if you want to achieve marketing success, you must really work doubly hard. Follow these steps carefully so you’ll be able to find a good list for your real estate marketing campaign.

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Distressed real estate is the diamond in the rough that all RE investors are seeking. HOWEVER, without doing your research you may lose far more then you will gain.

A cautious and methodical approach is best in this decision making process. Keeping that in mind, here are some critical area’s that must be considered when looking at real estate bargains for investing purposes.

Keep in mind…this isnt listed in any particular order. Its just things to keep in mind the target real estate should meet at least one of the criteria, but not be too heavy in any other areas.

Here is the list I have used:

WHY THE ASKING PRICE

Price is the first thing and investor sees.

So the goal is to buy for cheaper than the current market value and sell within market value or above. So how come the seller is offering such a GREAT price. Is it to settle debt??? Is it due to divorce? Death in the family?

Are there problems with the property that will cost a small fortune to fix? Out dated plumbing??? Poor electrical wiring? In older houses these problems are VERY common. Dont forget to consider holding costs.

Holding costs are one of the biggest profit killers to investors. Taxes, mortgage, commissions to agents (both selling and buying) gas, and electric…all these things add up…and FAST.

If youre not up on the market youre shopping in…Youre going to lose money.

Check out other property near the one youre looking at investing in. what prices are they pulling in? Are they the same size? Lot size close to the one youre looking at? Same style of structure?

TERMS AND CONDITIONS CAN HELP YOU

While price and location are important; don’t discount other profit leveraging tools like the terms of the financing.

In fact, used wisely, an investor can pay full price and use this positioning to negotiate lower interest rates or a smaller down payment. Over time, the rental cash flow will be in the black because of the terms agreed upon by the buyer and seller, combined with gradual rent increases and price appreciation.

KNOW THE LOCAL MARKET

Experienced real estate investors try to learn everything about the market they are shopping in. Sometimes its the small details that give the property you’re looking at the best chance to appreciate. For example: How close is the nearest church? Is the area family friendly? What is the local crime rate… is it close to good school? Where is the closest Fire/police station? Does the neighborhood have a community watch program? Next factor in the local floor plans that surround your target property. Was the last owner primarily concerned with vacancy rates, so they keep prices low instead of upgrading the property? In contrast, your research shows that particular upgrades like air-conditioning, second bathrooms, or enhanced security allow for both lower vacancies and higher rental rates.

As the man said…it is all about location.

Most investors think location is the second most critical thing in the investment next to price. Truth be told…it is only critical if you are looking for a long term residence/renter scenario. If you can make a great profit on an ugly house in a less then great area. It may out shine the “perfect condo” by the beach.

FIX AND FLIP AND FORECLOSURES

Most new investors and some seasoned ones, seek out fix and flips and distressed foreclosures for the opportunity to increase the profit margin. If youre going this route make sure you have a good eye for the details and a solid understanding of basic home repair.

Distressed property is a gold mine. IF you know what youre looking at. How old is the roof on the property? How much will it cost to repair/replace? How is the plumbing? Is the foundation/slab sound? Once you have asked a lot of the basic questions…and you have an idea how much it will cost to fix/correct, do yourself a favor. Add 5% as a buffer.

Know what it is ZONED for.

Zoning provides an opportunity to put the property to a higher or better use and is an area many investors ignore. Higher and better use means that the owner is getting the most out of the land. For example, if a lot is zoned for three units but contains a single lot, then it is not getting its highest and best use. Or if a lot is zoned commercial, yet there’s a three unit residential building sitting on it, it is not getting its best and highest use, like a business or a store.

Think of it this way, what could make you more money…a single small house on the land you just invested in…Or a duplex on the same land? One tenet or two? Zoning is a gift or a curse depending on your plans with the property…makes sure you know before you buy it.

Classic zoning “no-no’s” are garages converted to bedrooms. Non-permitted granny flats and detached garages.

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Term of the Day for Friday, July 17, 2009

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