10 Ways Coach Mitch’s Tax Delinquent Real Estate “Ridiculousley Simple System…” is better than foreclosure investing! Post 16

Coach Mitch’s REFLECTIONS™

The “Foreclosure Bomb” is upon us. Foreclosures are up 40% over last years record breaking number and that is just the 1st quarter.

The “Foreclosure Gurus” are shouting “Now is the time to get into real estate investing and investing in foreclosures is good.”

Coach Mitch says – “Be Warned and Be Careful.”

Know what you are getting into – before you jump. The issues that must be overcome in foreclosure investing are significant. But all these issues which are true in foreclosure investing – are not issues with Coach Mitch’s “Ridiculously Simple System…”

Consider…

1 In foreclosure investing you are dealing with the judicial mortgage process. This means legal proceedings with all of its attendant costs, time schedules, burdens, attorneys (a burden), demands, procedures, etc.

2 In foreclosure investing you have a significant amount of competition. Foreclosures (REOs),pre-foreclosures, short-sales and OREOs have been an enduring way to do real estate investing – since the beginning. It is certainly the most popular subject amongst REI gurus.

3 In foreclosure investing, as an investor, you are dealing with the banks lawyers, which is difficult. They often will not give you information and they certainly will not give it in a timely manner.

4 In foreclosure you need large amounts of cash or credit – at the snap of a finger so that you can pay off the arrearages and/or buy the house or investment and have to come up with the amount owed or 70% – 80% of the amounts owed. Your ability to raise credit or capital is crucial. Without both, you are not going to be successful in this area of real estate investing.

5  In foreclosure investing, you had better have an Information Release, signed and ready before you can ever expect to get an answer to almost any question from the sellers bank and/or attorneys. They need permission to give out private information. Well, if a couple is going through a divorce and is separated, it is not always easy to get a Release signed by all parties.

6 In foreclosure investing, the sellers are very resentful of the situation that they are in and resent you, even though you are going to help them get ‘something’. They feel that since they are losing everything, that you should not be gaining ‘anything’ , especially at their expense. It is just human nature at work.

7 In foreclosure investing, the real estate investor has almost no control over any of the relevant items or procedures. This ranges from lawyers not communicating, to banks not being responsive (until it is too late), to sellers who distort (lie) or who do not cooperate with needed paperwork (etc.), to your lenders who are not complying with hard time schedules, or Realtor’s who are tired of spending their time giving you CMA’s without getting paid or OREO bank real estate agents who frustrate you because they want to sell at full value and not at a discount, etc.

8 In foreclosure investing there is tremendous pressure on the real estate investor because of the many details that must be covered and the lack of control and time available to do what is necessary to complete a transaction.

9 In foreclosure investing the situation does not lend itself to ‘creative real estate investing’. The bank wants to be cashed out. That is it. Somehow a large amount of cash or credit needs to appear to satisfy the mortgage lender or they will go to auction. Virtually the sellers only defense is to delay the proceedings by going bankrupt. That is not a very good tactic for the sellers future and often, it only delays the auction by about 45 days.

10 In foreclosure investing you have very little time to create a suitable transaction. Foreclosures occur in stages and all too often the seller contacts the real estate investor just after they have stopped “denying” the situation and just prior to the auction, often leaving the investor barely 2 – 3 – or 4 weeks to do all that is necessary to do a deal.

It is just not enough time. So the investor calls in favors; asking a Realtor to drop everything else they are doing and do a CMA for you, for free, and then meet with the bank Realtor to alter a BPO, and get a Information Release and banks records from attorneys and negotiate with the 2nd mortgage holder for a greatly reduced payoff and also try to reduce down the amount owed to the first mortgage holder – but your playing tag with the mitigation department, etc

This is the real world of foreclosure investing.

BTW, none of these situations occur in dealing with tax delinquents when utilizing Coach Mitch’s “Ridiculously Simple System…” How? Well, we’ll talk about that another time.

See Coach Mitch’s “Ridiculously Simple System…” ™ for details.

Until next time,