Save $$ by learning how to re-key your own lock sets.
Loan resets are a big problem, but not the biggest one
There are approximately 57,200,000 loans in the United States. 42,900,000 out of that 57,200,000 were originated between 2003-2007. (many of these at a 6% or lower rate)
Delinquencies are skyrocketing for the following reasons:
Too much money was lent to unqualified buyers with too little skin in the game
Owners pulled equity out and spent it
Monthly payment hikes occurred at the worst time
Price declines have placed a huge amount of people in a negative equity position
Unemployment has significantly increased the problem
Owners are finding it acceptable not to make their house payment
Loans are often non-recourse
IRS lets people off the hook
*ABOVE INFORMATION COURTESY OF BRUCE NORRIS www.thenorrisgroup.com*
I do see an opportunity to acquire properties with fixed rate, long term debt that will cash flow as rentals. In most cases they will be worth less than they are owed but by implementing good property management skills these can pay off big in the long run.
2010…. The year of the tenant
2010…. The year of the tenant
My focus for 2009 was to concentrate on seller financed transactions. This would allow me to “stretch” my available capital making it possible to control more property with the funds I had available and hold them long term. Well….. It worked. Using this strategy allowed me to acquire over fifty rental “doors” in 2009. However, this success comes with its own set of challenges. In order to effectively control our inventory we had to build our own “in house” property management team. This involved recruiting staff, adopting property management software and making sure everyone was willing and able to deal with the dreaded “toilets, tenants and trash” that is so feared and hated by most investors.
What we found along the way is that most OWNERS hate property management as well. Eight out of Ten of our acquisitions in 2009 were from “tired landlords” that were raising the white flag. With property values dropping, they felt trapped and were more than willing to shift the joy of ownership and management to someone else. (I actually think some of them thought they were taking advantage of us!)
So, after developing our own brand of management, we were curious how satisfied other owners/investors were with their current property management. The answer was surprising. Most of those we contacted felt that their managers were not doing a good job and in fact hadn’t spoken to them in months. We began to offer “master leases” to these owners and were able to increase their rents while capturing revenue for ourselves as well by using our existing management infrastructure.
Our focus in 2010 will be to continue with our seller financed purchases. We will also be adding more master leasing in our business plan. These strategies do not depend on equity but rather controlling costs through effective management so that the properties can produce solid monthly income. I don’t know when the Nation will recover from housing price drops but I do know that people need housing and I want to be their first call.
Shawn Watkins
This is a property we are taking via a 5 year master lease. $15k down will cover the first 26 months of “master rent” of $575 per month. Market rent is $1000 per month.
Tenant says there is a “funny smell” in the basement. Could it be because he has been PEEING into two liter bottles and keeping it down there????
