> How do we profit from the increased foreclosures and ARM's reseting

**jaschoenly** · 08-29-2007, 05:12 AM

As a full time investor I am trying to strategize how to profit from the increased number of foreclosures and ARM's reseting. Many of the leads I have been getting in this category have payments that are extremely high in relationship to the loan amount and they have little equity. One "guru" I listened to said the strategy he uses is to get the deed and then try to negotiate a short sale. Does this make sense? I think he also puts in the contract with the seller that if he is not able to negotiate a short sale they will be given the deed back. Any thoughts???

**annemayhugh** · 08-29-2007, 06:14 AM

Getting the deed and working a short sale is an option, but not necessarily your best one. You can usually get the lender to negotiate directly with you if you have a signed release of information agreement. Short sales are hard to make work if the owner is over leveraged. They are easier if the property carries a 2nd mortgage as that lender is much more likely to negotiate. The hardest part of the short sale is actually locating the department that makes the decisions. Good luck.

**jaschoenly** · 08-29-2007, 07:06 AM

So you would try the short sale without getting the deed? I hear what you are saying about the 2nd I have heard that from others as well. I haven't done many short sales, but I think it is time for me to learn more about that strategy given current market conditions. I guess there are not other options with regard to owners in this situation? You thoughts are much appreciated.

Best Wishes,

**InRealEstateSolutions.com** · 08-29-2007, 07:06 AM

I've tried negotiating short sales. Down here at least, banks have been uncooperative. And it's not just me, local colleagues are reporting the same difficulties, from real estate agents negotiating for their clients to investors trying to get the properties, to professional negotiators just getting a negotiation fee.

Some lenders have moved the foreclosed housed out of their non-performing assets list to some other securitized investment. They have no real incentive to avoid taking back these properties now. As for other lenders, I guess they just haven't figured out how bad things are and just how many properties they are taking back!

What about equity sharing? I've heard a few people talk about it, but I don't know if there's a way to make it work if the owners are upside down and won't have any equity in the foreseeable future.

If anyone has info on this, I would love to hear it.

**jaschoenly** · 08-29-2007, 07:09 AM

You would think in this market they would be motivated, but I guess they aren't yet. I think equity sharing as I understand it would be tough if there isn't much. Does anyone have any experience with this and how to do that?

Best Wishes,

Josh

**InRealEstateSolutions.com** · 08-29-2007, 10:31 AM

There are different ways to structure one of these deals.

Investor buys an interest in the property:

1: Investor makes a lump sum while occupier continues monthly mortgage payments or
2: Investor makes monthly payments

At the end of a specified period, the occupier buys back the interest in the property, or they sell it and split the proceeds.

The key for the investor is that there is some future equity in the property, even if there isn't any today. Or at least an increase over today's value. Even if the occupier might not make any money, it could lessen his/her/their loss.

I'm just not sure on the details of how to figure out who gets what, and how to cover yourself as an investor, or even a homeowner. There are probably other ways to structure it as well.

That's about all I understand.. if I'm wrong, please, someone correct me...

**dbar** · 09-06-2007, 08:20 PM

One of the reasons I just joined this forum was to learn more about buying foreclosures in this type of market. Do any of you "seasoned" investors have any recommended threads to read or books that are non-hyped and not trying to sell me something?

Thanks.

**professional-lists** · 09-10-2007, 09:41 PM

I've noticed many people working the delayed payers to try to rescue them from bankruptcy. Many people are purchasing 30-60-90 day late contacts. This strategy coupled with direct mail and cold calling can produce results!

While it does take some effort, anything worth a buck doesn’t come easy.

This is really profiting from 'pre' foreclosure, so I am not sure if this is on topic, however I believe it's better for the market if people stop others from going into foreclosure, which can take some serious 'sales man ship'

Tom

**InRealEstateSolutions.com** · 09-11-2007, 07:01 AM

Originally Posted by dbar

One of the reasons I just joined this forum was to learn more about buying foreclosures in this type of market. Do any of you "seasoned" investors have any recommended threads to read or books that are non-hyped and not trying to sell me something?

Thanks.

The problem I'm having with foreclosures in this market is that none of them have equity. They all refinanced all their equity, the market dropped and they're upside down.

Anyone found a good way to filter through all the junk and find good properties?

**dbar** · 09-11-2007, 05:42 PM

This is really profiting from 'pre' foreclosure, so I am not sure if this is on topic, however I believe it's better for the market if people stop others from going into foreclosure, which can take some serious 'sales man ship'

I've read a little about this. Is this very profitable? Seems like there would be a lot of headaches involved. If there are not a lot of headaches, you could make a good profit, and help someone from losing their house, that sounds interesting, if I understand this correctly.