Property Rights or Entitlement? How Long Should Homeowners Be Allowed to Stay Without Making Payments?

I got a call this week from someone who found my number on the internet. He’s called me before to ask he can get started in real estate investing. On this call, he was asking if I knew any magic answers for homeowners who are behind on mortgages and dealing with the banks. You see, this man was out of work for almost 20 months, stopped paying his mortgage 12 months ago, and is still living in what he says describes as a $220,000 home. While he, thankfully, now has a job, his take home pay is half of what he formerly made. He said that Chase promised to restructure his loan and instructed him to stop paying his mortgage a year ago, while they processed the paperwork. I have no doubt they really told him this, as I have heard the same story from many other distressed homeowners. The thing is, without a job, this man won’t qualify for a loan modification.

When I shared my concern with him, he said that is exactly what he eventually found out. I shared with him that just last week, Chase approved a short sale for a seller I am working with, and I asked if he had considered selling his home. He replied that that was not an option, because without this home, he would be sleeping in the streets. I asked if he had considered taking in roommates. He scoffed at that, saying, he had done that before and it didn’t turn out so well. I suggested that maybe it is time to consider downsizing to a less expensive home, or even an apartment, since he does have a job now. For whatever reason, this person feels he should be able to stay in his home, without making payments, until he is able to secure a higher paying job. I can understand the anger this man feels, having been strung along with false promises by Chase Bank. What I can’t understand is the feeling of entitlement that the shareholders of Chase should carry the cost of the mortgage for this man indefinitely because he can no longer afford to pay his mortgage.

What do you think? Was I wrong to suggest this person might want to consider taking in roommates or downsizing to a less expensive home? Should the banks allow unemployed homeowners to say in their homes indefinitely, incurring more debt on homes that are already under water?

Patti Robertson HomeVestors Franchisee & Development Agent

Patti Robertson

HomeVestors Franchisee & Development Agent

Licensed Agent With CoastalVA Realty, Inc.

patti.robertson@homevestors.com

757-472-2547 (mobile)

757-HOM-VEST (office)

UGLYHOUSE GAL’S TOP iPHONE APPS FOR REAL ESTATE INVESTORS

Here are some of my favorite iPhone apps I use when looking for Ugly Houses to purchase.  What are your favorite real estate apps?

1.     ZipRealty – Feeds For Sale, and Sold comps from MLS

 

 

 

 

 

 

 

 

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2.     Blue Atlas – Feeds For Sale, Rent comps from MLS + had foreclosure activity

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3. RulerPhone – Measure anything with your iPhone camera

 

 

 

 

 

 

 

 

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4.  QuickVoice – E-mail/text voice  messages to avoid texting while driving!

 

 

 

 

 

 

 

 

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5. Signature – Makes a graphical signature  to be used in e-mail – not yet for texts

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6. SUPRA – eKey – Replace your Agent Key with an iPhone adaptor  to open Supra lock boxes and manage your Supra keys.

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Patti Robertson HomeVestors Franchisee & Development Agent

Patti Robertson

HomeVestors Franchisee & Development Agent

Licensed Agent With CoastalVA Realty, Inc.

patti.robertson@homevestors.com

757-472-2547 (mobile)

757-HOM-VEST (office)

Tip for Non-Licensed Real Estate Investors

Note – I buy real estate in Virginia, and the references here refer to Virginia code.  The laws may be similar in other states, but refer to your state’s licensing department for your local requirements.

I can’t tell you how many times I’ve heard investors say they have not become licensed agents because of the “conflict of interest.”  As an investor who is a licensed agent, I have never one time felt as if my license jeopardized a FSBO purchase, or that I was crossing any ethical lines.  Sellers who don’t want to “deal with Agents”, are avoiding the process, not the person.  Those of us who are licensed have to disclose that fact to our sellers.  I explain that as a licensed agent in the state of VA, I am held to a higher standard than a non-licensed purchaser.  This means that if I do anything illegal or unscrupulous, there is a regulatory board the seller can go to for restitution in addition to the regular court of law.  I think it is this “higher standard” that scares most investors from getting licensed.  The reality is that, licensed or not, most of the Disclosures and laws agents follow, are required to be followed to anyone selling a home, regardless of whether or not they are licensed.  Below are some of the common mistakes I’ve seen non-licensed investors make.  Be careful that you become educated about your legal requirements as a real estate seller, regardless of whether or not you ever become a licensed agent.

Using the REIN Contract – All the REIN forms are copyrighted and only REIN members are authorized to use these forms.  Personally, I only use the REIN contract when I’m purchasing through MLS and the listing agent requires it.  My own contract is easier for a buyer and seller to understand and is customized to provide me maximum protection.  If you don’t have your own contract, any local real estate attorney can provide you with one. Our own TRIG President, Steve Gunther, has a great forms CD available that contains every form you’ll ever need to be a real estate investor.

 

Not Providing the Required Disclosures – The Applicability paragraph of Chapter 27 of the Virginia Residential Property Disclosure Act says the Code applies “whether or not the transaction is with the assistance of a licensed real estate broker or salesperson.” While there are some exemptions, most all of the real estate transactions investors are involved in, are subject to this Code of Law.  There are some commonly overlooked Disclosures you need to be aware of if you are entering into contracts for the sale, exchange or lease with option to buy of residential property.

1)    Residential Property Disclosure Statement – This form can be obtained from the Real Estate Board and contains seven different paragraphs of required disclosures.  These Disclosures protect the seller, as they point out many different guidelines that may affect the buyer’s use and enjoyment of the property.  The Statement points out that it is the responsibility of the Buyer to investigate all the items disclosed before purchasing, as the seller offers no warranty regarding them.  If you have never read this form, you’d be surprised at some of the items you are required to warn your buyers about.  Each paragraph begins with “The owner makes no representations with respect to…” and then points out things such as warranties as to the condition of the real property, the restrictions of historical districts, the Chesapeake Bay Preservation Act, and dam break inundation zones.  Start using the Residential Property Disclosure Statement today to offer you one more layer of protection in each transaction.

2)    Required Disclosures Pertaining to a Military Air Installation – Most people know that sellers are required to provide the noise and crash zone information about a property.  Did you know though, that if you accidently classify the noise zone of the property you are selling in a lower zone, and the property is in a noise zone higher than 65, the buyer has one year to seek recourse?  And case history shows the courts are likely to rule in favor of the buyer!

3)    Septic System Waivers – It used to be that if a property had a waiver for the current septic system, the waiver would transfer to a new owner.  This is no longer the case.  If you sell a property that has a septic waiver, the property becomes uninhabitable at closing, unless the reason for the waiver was addressed by the seller before closing.  Sometimes the property has a waiver because an addition surpasses the capacity of the current septic system.  Sometimes the waiver requires a new owner to get connected to the city sewer.  Surprisingly, we even have addresses in populated cities such as Virginia Beach that fall in this scenario.  If your property is not connected to the city sewer system, investigate whether or not a waiver is in place.

As you can see, licensed agent or not, all residential real estate sellers are bound to the Real Estate Code of Virginia, and it actually protects you as a seller to follow the guidelines.  You can review Chapter 27 of the Virginia Code, the Virginia Residential Property Disclosure Act at this web link.

http://leg1.state.va.us/000/cod/TOC55000000027000000000000.HTM

Happy investing!

Real Estate Investor looking for Apprentice

http://bestrealestateinvestortips.com/ – November 27th, 2010

You see these signs everywhere – “Real Estate Investor Looking for Apprentice.” If you want a mentor to learn the real estate business, here are some questions you should ask:

  • Where did you learn to invest in real estate?
    • If they did not learn from a credible source, what can they teach you?
    • There are many “real estate gurus” that make money selling books and tapes. Though they may have bought houses in the past, the real estate market is going through monumental changes. Anyone not involved in the market daily is out of touch.
  • How many houses have you purchased? How many this year?
    • Many of the real estate seminars teach putting these signs up. The fact is, they may not have bought many more houses than you have.
  • Will I actually be buying houses, or just finding houses for you?
    • Most of these signs are looking for people to do legwork for them. If you actually find a house, you will make only pennies while they make the real money.
    • The reality is, people putting these signs up probably do not have a reliable source of leads for people trying to sell their house. So, they need people like you to “bird dog” for them. They don’t have the time to do the real work.

If you are looking for a real mentor, and a real system for buying and selling houses, you should talk to a Development Agent (DA) for HomeVestors®, the We Buy Ugly Houses® company. These DAs are experienced in actually buying and selling houses in your market. Learn more about how the DA is a true mentor at www.homevestorsfranchise.com

Don’t Mess With Ugly! HomeVestors Attains Victory Over Trademark Infringers

HomeVestors Attains Victory Over Trademark Infringers

– Eastern District of Texas Court Enters Ruling in ‘We Buy Ugly Houses®’ Case –

– HomeVestors of America Remains Diligent in Protecting its Trademarks –

DALLAS, Nov. 23, 2010 /PRNewswire/ — HomeVestors of America, Inc., known for its registered trademark We Buy Ugly Houses®, recently reached a settlement with individuals who were infringing the HomeVestors trademarks by using the marks as part of domain names and in text on competing websites.

As part of the Settlement Agreement, HomeVestors and the defendants filed an Agreed Permanent Injunction with the U.S. District Court in the Eastern District of Texas.  On August 20, 2010, United States District Judge Michael H. Schneider signed this Permanent Injunction and ordered the defendants to refrain from further using the HomeVestors trademarks.  Further details on this case can be found in the Eastern District of Texas, Civ. Action No. 4:10-cv-00282.

“We were happy to get an injunction from the District Court Judge.  This victory is a strong step toward successfully protecting our brand for years to come,” said HomeVestors Co-President David Hicks.

Since the time of the Permanent Injunction issued in the U.S. District Court, HomeVestors has successfully reached settlement with several other infringers who had bought domain names from the Defendants in the above-styled case or who use the HomeVestors trademarks on their competing websites.

“This ruling supports the enforceability of HomeVestors’ trademark portfolio, and serves as a warning to infringers,” explained HomeVestors litigation attorney Darin Klemchuk of Klemchuk Kubasta LLP.

HomeVestors is diligent in protecting its trademarks.  HomeVestors has owned and used the HOMEVESTORS®, WE BUY UGLY HOUSES®, the UG™ family of marks, and other proprietary trademarks continuously for many years.  Over the years, HomeVestors has spent significant amounts of time and resources in developing its brand and maintaining the goodwill it has built in its trademarks.

Use by unaffiliated third-parties of the HomeVestors trademarks constitutes trademark infringement under Section 32(1) of the Lanham Act, 15 U.S.C. Section 1114(a).  Furthermore, use of the HomeVestors trademarks as part of domain names constitutes cyberpiracy under the Lanham Act, 15 U.S.C. Section 1125(d)(1) for which statutory damages can be awarded in the amount of $100,000 per domain name. Such violations are serious and cause consumers to be confused as to the source of the services offered under those trademarks.  It allows competitors who employ such tactics to trade on and compromise the substantial goodwill that HomeVestors has built in its trademarks.  In addition to trademark infringement under federal law, such actions constitute unfair competition under Texas Law.

About HomeVestors of America

Dallas-based HomeVestors of America, Inc. is the #1 buyer of houses in the U.S.  The first franchise company of its kind, HomeVestors has been franchising since 1996.  HomeVestors has about 200 franchises in 33 states.  HomeVestors trains and supports franchisees that specialize in buying and rehabbing residential properties.  Most commonly known as the “We Buy Ugly Houses” company, HomeVestors strives to make a positive impact in each community.  In 2009, for the fourth consecutive year, HomeVestors was among the prestigious Franchise Business Review’s “Top 50 Franchises,” a distinction awarded to franchisors with the highest level of franchisee satisfaction.  For more information, visit www.HomeVestors.com.

Patti Robertson HomeVestors Franchisee & Development Agent

Patti Robertson

HomeVestors Franchisee & Development Agent

Licensed Agent With CoastalVA Realty, Inc.

patti.robertson@homevestors.com

757-472-2547 (mobile)

757-HOM-VEST (office)

10 Mistakes New Real Estate Wholesalers Make

As a HomeVestors franchisee and President of the Tidewater Real Estate Investor’s Group in Hampton Roads, VA, I witness lots of people try to break into the real estate investing arena.  These are the top 10 mistakes I see new investors make when trying to wholesale a house to a landlord or rehabber.  In future blogs, I’ll expand on each of these mistakes, so stay tuned!

1)   Paying too much for the house in the first place

2)   Using tax assessment, Zillow, or an old appraisal as the value

3)   Inflating the ARV when marketing to your investors

4)   Deflating the repair estimate when marketing to investors

5)   Not getting termite/moisture inspections

6)   Under estimating what it will cost in real estate agent commissions, buyer’s closing cost assistance, and repairs to get it sold

7)   Buying houses with White Elephants

8)   Not knowing who the real cash buyers are

9)   Putting houses under contract without options when they don’t have the financial ability to close

10)  Not putting a property they have under contract in MLS if they don’t get it sold the first two weeks.

Patti Robertson HomeVestors Franchisee & Development Agent

Patti Robertson

HomeVestors Franchisee & Development Agent

Licensed Agent With CoastalVA Realty, Inc.

patti.robertson@homevestors.com

757-472-2547 (mobile)

757-HOM-VEST (office)

 

 

Why Do Real Estate Investors Have To Pay So Low? Because It Costs SO Much To Get House Sold!

One of my favorite real estate agents just called with what she thought was an awesome deal on an ugly house for me to buy and rehab in Norfolk, VA.  This happens all the time.  In this case, it was 4 bedrooms, 2 bath brick house that would sell for $260,000 fixed up.  The agent thought I could get it for $199,900.  To most people this sounds like an awesome deal.  To an experienced real estate investor, it sounds like a sure way to lose money.  Coincidentally, just yesterday I bought a 4 bedroom, 2 bath, 2 car garage, brick home in Virginia Beach that will retail for $265,000 fixed up, so the numbers were right on the top of my head.  Here’s how I explained why I couldn’t pay anything close to $199,900.

$260,000 – The price the house will sell for when it is fixed up

$28,600 – What it will cost to sell this house to the end buyer.  We budget 11% for the cost to sell.  It could be a little more, or a little less.  6% goes to the agents, 4% goes towards assisting the buyers with closing costs.  (In our market we have lots of VA buyers, and VA allows the seller to pay up to 6%.)  Almost every realtor contract has a 1% contingency expense added in for flaws found by the appraiser, etc.  That 11% ads up quickly!

$30,000 – The amount it is going to cost to update this house with a new roof, windows, kitchen, baths, paint, floors, and probably HVAC.  Because it is brick, we won’t have to side it, but if the moisture/termite inspection finds anything this $30,000 can go up to $40,000 in no time.

$8,000 – The cost to close it on the buy side and the cost of money to fund the purchase and rehab.

$193,400 – The price I would have to buy the house for to BREAK EVEN, with no contingencies built in for the unexpected.

So, as you can see, what sounded like a super real estate investment deal was a recipe for disaster for a real estate investor.  That said, this would be a great price for a home buyer who wanted to live in a home.  They could buy it, spend their money and invest some sweat rehabbing it over time, having built-in equity from day one.

Want to learn more about real estate investing?  Join your local real estate investing groups.  In Hampton Roads we have Tidewater Real Estate Investors Group that meets in Norfolk (www.meetup.com/trigofva), and the Peninsula Real Estate Investors Association, that meets in Hampton (meetup.com/va-preia).

Want to hang out with real estate investors?  In addition to the formal investor club meetings, HomeVestors hosts an Investors Networking Night once a quarter in Virginia Beach. All real estate investors, and wanna be real estate investors are invited.  Vendors who support real estate investors (mortgage brokers, contractors, insurance agents, etc.), are invited too, but their price for entrance is to donate a door prize for us to give out in exchange for us plugging their business at the event.  Our next event is April 12, 2010.  To learn more about the location and RSVP, click here.  http://www.meetup.com/homevestors/calendar/12918634/?from=list&offset=0 You’ll have to hit “JOIN US” to RSVP, but membership is FREE!

Patti Robertson is a HomeVestors (We Buy Ugly Houses) franchisee in Hampton Roads, VA. She is also a licensed real estate agent and President of TRIG, Tidewater Real Estate Investor’s Group.  To see the houses I have for sale and sign up to be on our investor list, check out our website at www.ptr.homevestors.com.  You can reach me direct @ 757-472-2547.

Happy real estate investing!

Patti Robertson

HomeVestors Franchisee & Development Agent

Licensed Agent

757-472-2547

Ptr.homevestors.com

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