I write about and teach real estate investing in distressed properties, opportunity properties, yet I keep hearing about people who knew someone in trouble that didn't act to help. All to often they did nothing because they didn't believe the property had any equity to save. Worst of all are the would be "Bird Dogs" who say I thought I had an opportunity for you but the owners had no equity! I want to scream!
Private Equity Fund Of Funds Maybe it's the TV infomercial gurus showing all those big checks, implying that people are anxious to give you huge equities just for asking. They didn't recognize the opportunity! They think opportunity is money lying in the street.
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Curve Equity Exposed Fund They think that opportunity is finding underpriced houses! If that were the case, your local realtor could make you rich, they can't! (More about your realtor in my books, "One House At A Time / Finding And Buying Single Family Rentals" in a chapter called "Why Your realtor Can't Make You Rich" and in "A Baker Dozen / A Real Estate Anthology" in an article called "For The Same Reason A Plumber Pipes Leak.") If you're looking for houses get a good realtor. Houses themselves are not opportunities! People are opportunities, troubled people!
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Equity Income Funds The difference between real bird dogs and hunters is the dog sees a Cock in the field and the hunter sees "Pheasant Under Glass!" Yes, poorly trained, dogs will try to eat the bird, but it's not the same meal the hunter and his family enjoy Sunday afternoon. It's exactly the same with "Bird Dogs" and Investors. Too many would be "Bird Dogs" and would be Investors, only see the Cock. A skinny Cock may not look like much of a meal but when the right cook does their thing it's wonderful. It's the same with opportunity real estate!
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Capital Casebook Equity Maybe I'm being too hard on people because the second hardest thing in investment/opportunity real estate, is recognizing opportunity! Most people will see a shinny bird where some of us see Sunday dinner. Let me put it simply. The hunter's dog's job is to point out the Cocks not look for dinner. The Investor's "Bird Dog's" job is to point out troubled real estate owners, not to judge the value of the deal!
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Private Investment In Public In "One House..." I write about one deal where the people had no equity, and only about 40 days left before they would lose the property to their first lender. The people holding the second on this property were ideal candidates for a short sale, so we settled with them for about 60% of their principal investment and none of their accrued interest. The first lender not only waived most of their NOD charges, but allowed the buyer to assume the loan. We did this by using a "Net Offer" option, adding the buyer to title and refinancing the second. The results: $10,000.00 cash to the sellers, $10,000.00 cash out plus a $2,000.00 television to the buyer, and real equity. That's about $30,000.00 in real equity that didn't exist 30 days earlier. The story is in the book, what isn't in the book is the effect of time. When we created the equity we did nothing to the value of the property, today about five years later that a $140,000.00 house purchased for about $135,000.00 is now worth more than $350,000.00!
Individual investors are also interested in equity funding. This works almost exactly like an equity loan against your mortgage. Equity is established by subtracting any amount you owe from the value of your business. Lenders agree to advancing money in amounts equal to a specific percentage of your equity. Since equity funding is a type of shared ownership, some equity lenders will impose conditions on you. For example, they may want some management control.
Equity Mutual Funds A short term "Flip" for the same client (also in "One House...") had a Father and Daughter owning a home in foreclosure, with the Daughter in bankruptcy. Having tried for more than two years to sell the house through a series of realtors with no luck they had abandoned the house and were waiting for the lender to take it. When my client's "Bird Dog" told her about it the seller's had no equity and had given up any hope. The lender had an FHA loan so there was no potential for a "short sale" but we did negociate away a lot of NOD fees, we paid the Daughter's attorney to petition the court and got rid of all the other liens, now we had equity. Then we refused to list the property, but we did co-operate (paid the selling realtor half a commission), the results my client and I made money (her check is in the book), the seller's attorney got paid $2,000.00 ($1,000.00 on his existing bill and $1,000.00 on work for us) and the sellers got $5,000.00 cash! We created equity with a few phone calls. Not a big deal, but we created $30,000.00 from nothing in about 45 days. The only thing we did to the house was to turn the power on and clean it.
Birmingham Contact Equity You might believe these deals took some secret knowledge to do. I saw a new TV guru this week end offering to sell you the "SECRET" well here it is. Find someone with a problem and make sure they are better off for having met you! Lenders only agree to short sales when it's beneficial to them. Sellers only accept offers they see are for their good. The courts and even the IRS will deal when it's in their best interest. Remember it's rare that only one person has a problem, the people doing the foreclosure also have a problem.
Private Equity Investment Firm Sometimes all it takes is a sympathetic ear and some empathy. Yes some people will just hand you their equity. The same client and I did a deal in Pahrump, NV when one of her tenants told her she was going to walk away from her home just to get rid of it, she even offered to pay someone to take it. We paid her. My client made $25,000.00 in profit in 60 days. We painted the master bedroom in that property only because we told the buyer we were going, to before she saw it. (We sold this house four years ago for $96,000.00, the buyer had it appraised to refinance this month, 2-06, it is now valued at $226,000.00.)
Complying Deal Equity Funds So far we've seen "Short Sales," "negotiations," and "a Sympathetic Ear" and "Time" used to create equity.
Equity Msn Private Wyoming My last deal with this client was a more typical "Flip" it took six months and a lot of up front cash but the client made a $65,000.00 profit, not bad.
American Equity Investment Recognizing opportunity is the subject of my latest book "Flipping For Fun And Profit"
Equity Index Funds
Equity Private Team Wyoming William J Archambault Jr, is the author of "One House At A Time / Finding And Buying Single Family Rentals", "Get The Money / A Consumers Guide To A Successful Mortgage Application", "A Bakers' Dozen / A Real Estate Anthology" and "Flipping For Fun And Profit" Available @ http//www.reii.org He's been in lending and real estate since 1969. He writes about upto the minute real estate, sales, and personal philosophy, with the wisdom of our grandfathers. You can write him at: author@reii.org
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