banks

Last Monday, one of my co-investors asked me how the multi-billion dollar economic bailout would affect Seller Financing and other similar financing techniques.

I think we are still a ways away from seeing much effect from the bailout on regular mortgages and loans. Even with relief, banks will still  be bloated with foreclosed properties they are desperately trying to unload.

So, how do you find a great deal on an REO or bank-owned property? Here are a few tips:

1. Focus on small credit unions and banks. You can often find the REO portfolios for these local banks on their websites.

2. Look for the income-producing properties in the REO porfolio first.

3. As I’ve said before, banks WILL seller finance to you. However, DO NOT just walk in and “ask for Seller Financing”.

4. Instead, visit your bank’s REO representative, and tell them, “We are willing to purchase any of your REO / Loss Mitigation / Bad Debt portfolio list that:
- Meet our criteria, OR
- You (the bank) are willing to finance

Those are just a few tips. You can find more on any one of my recent Training Calls and Webinars.

I’ve also just introduced a new tool called “THE List” that is helping many of my students uncover amazing new Seller Financing opportunities. I’ve called this tool, “The Most Profitable Tool In Today’s Real Estate Market!”. If you’re serious about finding and profiting on real estate deals right now, this tool should be one of the big guns in your “Non-Compete” arsenal.

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If you’ve been reading my blog, you know that banks are willing to just about anything to get rid of bad debt (their REO portfolios). Banks are also afraid of more properties entering their REO portfolios. At the most basic level, they want to avoid foreclosing on any more loans – almost at any cost.

In our current market, I am seeing people harness that fear to lower the interest rate on a loan they have. Here is a simple scenario of how that might work, where a Property Owner goes into meet with a Bank VP:

Property Owner: Hello Mr. Bank VP! Times are tough, I’m worried about not making my next mortgage payment.
Bank VP: That’s too bad, I wish we could help.
Property Owner: Actually, you can!
Bank VP: Oh?
Property Owner: I think all I need is a slight reduction in the interest rate, and I’d be able to keep my head above water.
Bank VP: Hmmm, we really can’t do that.
Property Owner: Well, in that case I’m afraid things don’t look good. With the way things are going, I don’t think I’ll be able to make the December payment. Do you really want to foreclose on another loan?
Bank VP: Not really, bu-
Property Owner: - I recently saw your REO portfolio on your website, and its huge. Really, all I need is a slight reduction on my rate, and we’ll keep me OFF that list of bad debt properties eating away at your profts.
Bank VP: Well, that makes sense, What if we….

And you’re off to the races!

It CAN be that simple. Many of you are owners of investment properties and income-producing properties that are in legitimate distress. Many of you are negotiating with banks to buy properties. Talk to your bank. Don’t take NO for an answer. I recently took a variety of questions about this topic on a Seller Financing Q&A Training Call with my students. You can now access a free recording of that call.

Over the next few days, I’ll talk about how to make a non-assumable loan ASSUMABLE, and how to find amazing deals in distressed REO portfolios at your local banks. Stay tuned!

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This past Monday, I shared a great experience with over 175 of my students and investors. I hosted a question and answer call, and took Seller Financing questions for almost two hours. We covered a LOT of Seller Financing techniques. If you weren’t there, you missed out.

I wanted to share one of the highlights from that call…. the “Perfect Storm”.

Our current real estate market and economy have created a “Perfect Storm” for investing! Here are just a few of the reasons why you should be buying income-producing properties NOW. I didn’t say buy them “next week”, or buy them “soon”, I said buy them NOW.

Here are the first 4 factors in our economy and real estate market that are creating this rare opportunity for educated investors: (I’ll share the other 4 factors tomorrow)

1. Prices are falling
   This is no secret. We all know that residential housing has taken a hit, and is still dropping. But, no one is talking about how income-producing properties are also falling in price! Commercial and multi-family properties are also being foreclosed on at alarming rates. Smart investors know how to find these properties.
2. Interest rates are low and could go lower.
3. Great terms and Seller Financing opportunities are abundant.
   In addition to banks now offering Seller Financing, many property owners are more open to Seller Financing than ever before.
4. Income is rising.
   By “income” I mean rents and income from income-producing properties. Not as many people can afford housing and/or get financed, and this is creating an increase in the number of renters looking for housing.

I’ll share factors 5,6,7, and 8 tomorrow. Stay tuned!

We discussed a lot more on that Q&A call, and I’ll try and share more of the questions in upcoming blog posts. Our market is changing daily, and so are the investing and Seller Financing opportunities. Due to these constant changes, we’ve really ramped up the number of training events we’re offering at MWI. We’ve got Training Calls, Webinars, and live events that are all addressing how you can create big profits right now. Many of them are free. You have NO excuse!

I have another Seller Financing Webinar THIS Friday at 12:00pm MT. Don’t miss it!

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One of the techniques I have spent a lot of time teaching lately is how to negotiate with banks. That’s right! You CAN negotiate with banks!

Recently, one of my students was negotiating with a bank, and was trying to get a partial release from the bank. A partial release is a mortgage provision allowing some of the pledged collateral to be released from the mortgage contract if certain conditions are met. This student asked me a few questions during the process, and I thought it would be a great blog post to share our dialogue:

Question: Mike, I really appreciate all of your help and we are committed in partnering with you. We are working on getting the bank to do a partial release on a property we are trying to buy. At first, the bank said “no” to a partial release, but a few days later said “yes” to extended financing over the long term. Any advice?
My Answer: Partial releases are one of the hardest things to get right now. Almost impossible. The reason is because there are a lot of condo conversions across the country where the conversion got done and only a handful of units sold. Then the bank had to take back a less than whole project. The only real answer I have found for this issue is put it in your contract or you won’t buy the project.  If you negotiate a contract, and THEN ask for it later, good luck, it probably won’t happen.  The best leverage is, “I can’t buy the deal if you don’t include a partial reconveyance.”  The second-best leverage is a do-or-die addendum prior to the end of due diligence that says the bank will include it or the addendum serves as a cancellation notice.  Sometimes we need to make the biggest threat (loss of a contract) to get the biggest results.

Question: I’m rehabbing some of the units before I close. How can I secure the fix-up money before closing on the property?
My Answer: The best leverage on work before closing is a recorded purchase contract with the seller’s authorization, and having every sub and contractor lien the property for their work. If the seller doesn’t close, they have some major problems now.

Question: I’m an auditory learner. Is there a time we can talk  to discuss these and some other questions?
My Answer: Yes there is! I am hosting a teleconference this Monday called “Ask Mike Any Seller Financing Question”. It will be a live teleconference where I’ll be taking as many seller financing questions as my students, partners, and fellow investors have. The teleconference will take place on Monday, October 27th, at 1:00pm MT. You can reserve your place here. I’m counting on you being there, you have some great questions!

I’d like to invite you to this special Q&A call as well. Any questions related to seller financing are welcome! Remember, banks WILL offer seller financing now as well. I anticipate many questions about that topic.

Don’t make investing harder than it needs to be. Let me help answer a few of your pressing questions!

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