Jeff Adams Foreclosures - Real Estate Investors Paradise for 2016

If you have taken a look at the tabloids lately, you probably know that 2016 is a promising year for real estate investors. The market is slowly recovering from the slump in previous years and investors are confident about the road that lies ahead. Home prices will remain lower as compared to last year, therefore the investment opportunities are attractive. Interest rates continue to remain highly inviting in 2016.

But how should you go about with foreclosure investing this year? Read on to find out…

Foreclosure Investing Strategy – 2016
This year will be extremely promising for investing in foreclosures. By devising an effective strategy and making quick, well-informed decisions, you are bound to achieve success in the foreclosures investing arena.

Get A Broker

It is a known fact that home buying rules are common in most situations. However, this does not mean complacency in making buying decisions. There is nothing wrong with seeking a broker’s help to scan for houses. Where you will start house searching from scratch, brokers will already have a database of January 2016 foreclosure homes. Avail of their services and save precious time.

Know The Market

Knowing the houses is not enough. You must also carefully examine the localities that you are looking at. Remember, it is the area that creates the market. Features such as school systems, complexes, other attractions and key features of the area add a whole lot of value to the property. Veteran, real estate investor, Jeff Adams recommends learning about the complete ins and outs of the market.

Understand the Scenario

Making buying decisions is a challenging task only for investors who choose to play smart. Understand the property scenario in 2016. It is predicted that home prices will continue increasing steadily this year. But do not take this for granted. The 2006 estate market slump reminds us that we must always be prepared for market fluctuations. Start your recee early and carry it throughout to keep track of price trends.

Cost-Benefit Analysis
Do not take over ambitious decisions just because they seem promising from a distance. 2016 will prove to be highly lucrative for the foreclosure investor, but do not let the price trends bedazzle you. Simply because you get a $250,000 loan approved at low interest, does not mean that you have to avail it. Look for the most financially viable option. Remember, the aim is to invest in foreclosed homes, not to undergo foreclosure yourself.

Overhead Evaluation
You are bound to encounter foreclosed houses that are no short of being the ‘perfect deal’. But keep in mind that appearances can be deceptive. Home repair costs are an extremely important factor that sellers will try to avoid. Make sure that you budget the cost of these repairs and adds them to the total property cost in order to get the complete picture.

There is nothing better than getting a clear cut view of what lies ahead in the property market. Jeff Adams real estate provides you with the most common real estate trends that will help you ace the foreclosures investing game in 2016.

Tenant Demand 2016

Single-family homes for rent will be in high demand in 2016. The extent of demand is predicted to be so high that it will overshoot the availability within the first quarter. The markets that were strongly hit with foreclosures will see a rise.in demand greater than 25% as compared to 2015.

This may be a great sector for the foreclosure investors seeking to re-sell foreclosed homes within short periods. Another interesting trend is the increase in leases continuing since consecutive years, particularly in markets such as Tucson, Port St. Lucie, Riverside, and others.

Short Sales & Supplies 2016
The tenant demands in 2016 will be stronger than ever, at its peak since 2010. That is a definite area of interest for foreclosure buyers. Coupled with this is the over 8 cap rates all across the country. They will be noticeably stable since year 2011. Given these conditions, how will supply position itself?

Fewer foreclosures were sealed and completed in 2012 as compared to 2011, as contrary to mass expectation. There was a straight drop of 80,000 completed foreclosures. The 2012 figures closed at 860,000 as compared to a 780,000 in 2011.

Short sales have risen in popularity with lenders. This implies a decrease in completed foreclosures as the year 2012 witnessed. There were many first-time buyers who missed the price slump last year. Realizing this, numerous new buyers will enter the foreclosures market owing to discounted prices of properties. This trend is expected to continue till the latter half of the second quarter.

Hence, it is safe to conclude that the year 2016 will be highly lucrative for investing in foreclosures. Jeff Adams hopes that you can make the best of these opportunities using the above strategies and predictions.

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The Process of Foreclosures: Understanding the Intricacies

Experiencing a foreclosure first hand really impacts you. However, the intensity of the impact depends on what role you play in the process of a foreclosure. Whether you are new to the term, have experienced it before, involved in the legal process or feel that you may soon face a foreclosure, you need to understand how the process takes place because, although it may sound like a heavy legal term, foreclosures are, in fact, easy to understand.

What is a Foreclosure?
A foreclosure is a legal process that is set into motion when the owner of a property cannot make payments of the principal and/or interest towards his loan. Thus, the property is then seized and sold so that the lender can recover the amount that was borrowed.

When do Foreclosures occur?
The first step leading to a foreclosure is the borrower not being able to return to the lender his loan amount. That’s when a foreclosure occurs and the process begins.

The Stages of Foreclosure
The process of a foreclosure moves in different stages, each of which is mentioned below.

1. When a borrower misses his payments for three or more months in a row, the lender sends him an NOD (Notice of Default) stating that his/her property shall face foreclosure on account of the non repayment of the loan. The lender gives the borrower a fixed brief time period allowing him to make a quick payment. If the borrower fails to do so, a foreclosure is inevitable.

2. The owner of the property, that is, the borrower, then receives a Notice of Sale stating the date of the foreclosure sale of the property. This notice is also placed on the property and in the local newspapers for a short span of time, informing people about the foreclosure.

3. Those who are made aware of the foreclosure can take part in the public auction if interested. Most people find it profitable to buy a foreclosed home because the property is priced at a much lower rate than its market value.

4. The opening bid for the auction is set by the lender. He takes into account the loan balance, interest, attorney fees and any other additional expenditure he may have incurred in the process of the foreclosure.

5. The public auction then occurs and bids are placed and the property is thus acquired by the highest bidder.

Buying a Foreclosed Property
While the process of a foreclosure does sound pretty simply, buying a foreclosed property is not a very easy task. Acquiring a real estate property for a lesser rate than the market value is quite luring to many who make use of real estate as an investment, especially the big hedge fund companies, who are on the lookout for foreclosed properties to buy them for a lesser price at public auctions and sell them off later or give them up for rent them at the market value, thus, making a profit.


The factors that work in favor for the buyer are as follows:
1. Buying property at a cheaper rate
2. Using this property as an investment to make a profit


The factors that do not work in favor for the buyer are as follows:
1. The winning bid has to be paid in cash. Also, a deposit needs to be paid up front and the remainder of the amount needs to be paid in 24 hours. Thus, the winner needs to have the money at his disposal, since he cannot make payments in installments.

2. Experiencing the emotional trauma of the owner and his family losing his property with nothing left for them.


Bank Owned Properties – REOs (Real Estate Owned)
When the property that is put up for sale at a public auction is worth much less than the amount that needs to be recovered, it is difficult to find a bidder to meet the opening bid. The property, thus, doesn’t get sold and then comes to belong to the bank, i.e. the lending source. These properties are deemed as REOs (Real Estate Owned).


How to Avoid Foreclosures?
If you are at the receiving end of the foreclosure process and are facing the loss of your property and home, there are ways in which you can avoid your property being taken away from you.

1. Make sure that you do not quit your job, or even if you want to, do so only when you find yourself a new job to make sure you have a stable income. If you are downsized, try looking out for a new job as soon as possible.

2. If you have received a Notice of Default, you can gather up all your resources to pay off your loan and can also solicit financial help from a friend or family member.

By simply understanding what the entire process of a foreclosure, it can be used to your advantage, no matter what role you play in the entire process.

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Foreclosures – An opportunity in distress

Foreclosure is a specific legal process through which a lender attempts to recover the balance amount of a defaulted loan by forcing the sale of the asset used as collateral against the loan. Large scale foreclosures signal an economy in distress and have significant implications to the real estate market.

Usually the lender is not into the real estate business and does not want to go on accumulating he foreclosed property.  The lender does not have the resources to manage real estate property. Moreover, accumulating bad debts does not reflect well on the lending institution. Therefore, the lender is eager to sell off the property at a discounted price so as to close the account by booking partial loss.

The Economic Recession
The occasional foreclosures are individual failures. These can occur because of a variety of reasons affecting a particular individual, such as divorce, relocation, arrest or plain inability of the borrower to repay the interest and the balance of the principal amount of the loan. Such incidents become the subject of common gossip.

However, when foreclosures occur on a wider scale, it signals an alarming recessionary trend in the economy.  It indicates slowing down of business and industry, a rise in unemployment and an economy in distress. During the recessionary period no one dares to borrow money and make new investments.  There are few t takers of loans and. consequently, the interest rates fall.

An Opportunity to Invest
Large scale foreclosures offer a great opportunity to buy properties at heavily discounted prices. Everyone shuns away from buying property at such times. Few have the daring to take risk. However, according to Jeff Adams, a seasoned advisor for investing in real estate, it is the right time to take a plunge.

Of course, an opportunity to make quick and huge profits attracts big sharks to the dark waters. The hedge funds, with their full access to technology and information, have already sniffed their meaty nourishment in the troubled waters and waste no time in getting there. They elbow out all small investors and, with their huge capital resources, leave no room to small players.

Hedge Funds
Hedge funds constitute a group of high net worth investors. Collectively, they have huge funds at their disposal. This gives them the great power to manipulate the markets to their advantage.  The hedge fund managers have a free hand in making investment decisions unlike other publicly accountable funds, such as mutual funds, pension funds etc.

The only concern of the hedge funds is not to keep the funds locked in idle investments for too long. Therefore, they have to reap quick profits and to move out well before the scenario changes.

The small investors, however, can exercise speed and daring to buy good properties in the adjoining area.  They can hold the property a little longer till the demand picks up.

Interest Rates
The interest rates play an important role in property investment decisions.  Apart from the ability to borrow money, they also indicate the demand for property.  The central monetary agency uses the leverage of interest rates to nurse the sick economy back to health. They use this leverage to regulate the flow of gross savings into developmental investments and also into real estate or the housing sector.

Foreclosure Terms and Explanations

·         Foreclosure: The buyers make fixed payments to the lender every year towards eventual ownership of the mortgaged property. In the event of defaults, the lenders exercise their right to take possession of the mortgaged property, which is technically known as foreclosure.

·         Pre-Foreclosure:  This stage precedes foreclosure, where the lending bank sends a notice to the owner giving a stipulated time to pay up the amount in default.  The failure to comply will follow foreclosure. The owner, however, has the right to sell the property during the notice period and pay the dues preventing foreclosure.

·         REO’s: Here the lending institution repossesses the foreclosed property put up for auction in case there are no bidders. Hence it is known as REO or the Real Estate Owned .

The foreclosures are of following two types:

·         Judiciary:  These are legal property transfer records which permit the owner to reclaim the property after paying the amount due within the stipulated period of time.

·          Non-Judiciary:  Here the auction process is handled by an independent third party. There are no redemption periods in such cases unless agreed upon by the owner and/or buyer.

Conclusion:

 It is highly profitable to buy foreclosed property at auctions. Large scale foreclosures often throw up a gem of opportunities to buy properties at highly discounted prices.

A low interest rates regime has been prevailing in the market for quite some time. Borrowing money now at fixed rates of interest is very much advisable, as the current rates are unlikely to go further down.

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Investing In Real Estate: The Advantages and Disadvantages

It is true that because of the significance that real estate holds in the present scenario, an investment in real estate hardly ever goes wrong. However, I am not stating that it never goes wrong. Real Estate cannot be considered as the safest form of investment, neither is it the most risky. It stands on neutral ground.

The risk that you might be undertaking is stepping into real estate investment turf without the aid and advice of an experienced realtor or know-how of the field. It is imperative for you to know the advantages and disadvantages of real estate so that you are aware of where you could go wrong and therefore, avoid such situations.

3 Tips for Successful Real Estate Investing by Jeff Adams

3. Depend on Expert Advice
No matter how much you have read up about real estate, if you are new to the waters, you shouldn’t trust the depth too easily. Always solicit the advice of an expert realtor with every decision, especially when you are in doubt because experienced realtors know the different trends prevailing in the field of real estate, that tend to change from time to time.

2. Set a Budget
Always set a minimum and maximum realistic value that you can spend on your investment. Besides your budget, it is also good to be prepared at the outset as to the square footage, number of rooms and proximity of the property to prime geographical locations that you are looking for.

1. Do not base Investments on Assumptions
Real Estate Investment works on a thorough study of the property, trends in the market as well as research. You cannot operate real estate investment on assumptions, that is, you cannot assume that there will be no change in tax laws, or the price of a property will appreciate or will depreciate.

The most important thing that you should bear in mind is keeping your real estate investments profitable. You should begin with an investment where you are certain that you will either break even or make a profit. Do not opt for dilapidated properties at the outset of investing because you do not know the expenditures you will incur in making the property worthy of re-selling or renting. Also, do not opt for properties involved in legal battles; this is leaving aside foreclosed properties.

Real Estate comes with its advantages and disadvantages and if you know each factor well, you will be able to successfully conquer the real estate game and soon come to be a real estate investor that others entering the field will trust for advice.

The Advantages of Real Estate Investing

1. You can make a significant profit
Real Estate Investing is such a field where profits can touch the skies. If you manage to invest in a property when the market rates are low, you have struck yourself a good deal right there. Once the market value of the property appreciates, you can make sell it off, thus, raking in the big bucks as profits.

Putting the property up for rent is also a good option to make a profit because instead of acquiring your amount once and for all through sale of the property, you receive your money in timely, stable installments.

You can find property at a low price when it is a foreclosed property, the owner is desperate to sell the property because he is moving or for other personal reasons, the property needs a little repair or there is no one to claim ownership of the property.

2. Real Estate Investing Acts as Additional Income
Besides the money that you gain from your job and profession, you can use the money that you gain from your putting up your real estate investment on rent as a second income. Thus, you are one step closer to all your dreams because of this increase in income.

3. Getting a Loan is Easier
When you want to apply for a loan to make any purchase, you are asked to provide your income statement to a financial institution. On seeing your high income, that is a joint sum of your salary and investment gains, the process of loan sanctioning occurs faster because you are finally sound.

4. It Benefit the Generations after You
A real estate investment is not only beneficial to you, but also for your generations to come. If you sell the property, you can fund your children’s plans with that amount. If you rent the property, you can leave that property to your children who can then enjoy the rent amount after you.

The Disadvantages of Real Estate Investing

1. First Time Investor
Usually when you are a first time investor and your income is not too fancy; banks hesitate on giving you a loan. This may delay the process of acquiring a loan.

2. Debt from Loans
A new investor may not have enough resources to make his entire payment while buying property. Thus, he may have to depend on a loan, which causes debt for him and debts are never pleasant.

3. Legal Hassles
Real Estate Investment comes with legal procedures and formalities which require a lot of running about, time consumption and expenditures.

4. Rental Property Upkeep
When you rent your real estate property, the maintenance of the home depends on you. Hence, you have to incur the expenditure on the repair and maintenance of the home to ensure that your home is pleasant enough to attract prospective customers.

Considering both the advantages and disadvantages of real estate, you come to realize that you cannot really take a stand, but the biggest advantage that benefits an investor is the demand of real estate in today’s times considering the number of people who want to have their own home.

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