How to gain respect from a high end swing set manufacturer!

Lee’s Notes: My family is pretty artsy.. We build a lot of things, and my son doesnt thing there is a single thing he can break, that I can’t fix… Well, except for when Daddy sat on his Avalanche toy truck and snapped the wheels off, but I digress…

We have been looking for a playset for our son, and came upon Cedarworks. They have some brilliant stuff, and we have been in awe of their equipment since last year when we ordered one of their catalogues. Well fast forward a year, and my father who is very handy decided to take one of their Rascal Ramps for inspiration and built a ramp for one of his clients.. Came out rather well, and Cedarworks liked it as well!

If imitation is the sincerest form of flattery, consider us very flattered. We recently received an email from Dale Smith of Indy, Indiana (“a corn field with a race track in the middle” according to Dale) in which he describes an unusual project he had just completed. It seems that the assistant minister of his church needed some way for his son to access the loft area of his bedroom, and asked Dale whether he could help.

As Dale then describes, “I found your company on line, and requested a catalog.  When it arrived I was thrilled to see all the wonderful units you offer.  I am a bit artsy, so many of your units inspired my thinking.” Dale continued “I always liked the rascal ramp you use, so I drew up drawings of MY ideas and here is the end result.”

And quite an end result it is: beautiful, functional, and fun – just like what we want everything to be here at CedarWorks. According to Dale, the lucky boy who gets to use this every day and all his friends just love it. And that’s also just what we we want from anyone who uses a CedarWorks swing set.

How to get Fannie Mae financing on an investment property!

My real estate investing lawyer, Matt Griffith, hit me up last night about a new Fannie Mae program that allows investors to get financing on some of their REO properties… This comes from a local mortgage broker, Mickey Brooks (317 218.0283), who has the contacts to get deals done in a couple of states nationwide, so give him a call, and if he can’t help you, he can prolly refer you to someone who can!

“Dear Valued Partner,

As we enter 2009, the crisis in the financial markets seems to be the top story on every news channel. But many of the reporters and so-called pundits don’t understand what really happened, what’s happening today…and what may happen next.
That’s why I’m excited to tell you about a series of articles I’m creating to put an end to the confusion once and for all! In these easy-to-understand articles, with help from many resources, I explain in layman’s terms exactly what caused the current financial crisis, what the almost daily news reports really mean – and what to be watching for in the near future.  The content for these articles comes from various services that I have invested in to stay up to date and educated, in order to always best serve as your trusted advisor. It’s important to me to stay on the leading edge as a professional, and when I saw these resources, I wanted to make them available to you as well.   I’ll attach basic stories behind the crisis for your review, to help you better understand what happened, why, and where we’re going from here. The few minutes you spend reading them will open your eyes to what very few experts truly understand.

As your trusted advisor, I’m committed to doing whatever I can to help you understand what the current economic situation means for you going forward in 2009.
Give me a call if you want to discuss strategies for strengthening your financial future in the weeks and months ahead.

Fannie Mae HomePath Financing Program
Fannie Mae has just released a new program called HomePath to help consumers buy and finance many of their REO properties.  All FNMA REO properties are not eligible for HomePath financing.  Only those properties listed at the following web site www.homepath.com  with the HomePath logo qualify for this program.

Mortgage Financing  The benefits include:
•  Low down payment and flexible mortgage terms (fixed-rate, adjustable-rate, or interest-only)
•  You may qualify even if your credit is less than perfect
•  Available to both owner occupiers and investors (Primary, Secondary, Investment)
•  Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit organization, state or local government, or employer (2% Seller Maximum)
•  No mortgage insurance
•  No appraisal fees
•  Also eligible for HomePath Renovation Mortgage (see details below) (Primary Residence Only)

Available only on homes you make your primary residence  and offers these benefits:
•  Financing to fund both your purchase and light renovation.
•  Low down payment and flexible mortgage terms (fixed-rate or adjustable-rate).
•  Down payment (at least 3 percent) can be funded by your own savings; a gift; a grant; or a loan from a nonprofit, state or local government, or employer.
•  No mortgage insurance.
•  Renovation funds are borrowed as part of the purchase financing and held in escrow until the renovations are completed.
•  Renovation Costs limited to 20% of the “as repaired or completed” value or $30,000, whichever is less, and renovations must be completed within 3 months of closing.

About Fannie Mae Homes

•  Why does Fannie Mae have properties for sale?  Fannie Mae works with all of its partners to help homeowners prevent and avoid foreclosure; however, sometimes it is unavoidable. When foreclosures occur on mortgages in which Fannie Mae is the investor, our goal is to sell properties in a timely manner in order to minimize the impact on the community.

•  What kinds of properties are available in the Fannie Mae HomePath database?  Fannie Mae’s HomePath database includes only properties that are owned by Fannie Mae. There is a wide selection of homes, including single-family homes, condominiums, and town houses — located in a variety of neighborhoods. The number, types and the sales prices of the homes that are offered for sale may vary substantially. Many of these homes are relatively new; however, older homes are offered in some areas. Some homes may require repairs.

•  How is buying a home owned or managed by Fannie Mae different from other home purchases? Usually, when you buy a home, you deal with a seller who lives in the home. Fannie Mae has acquired these properties through foreclosure, deed in lieu of foreclosure, or forfeiture.  When buying a Fannie Mae-owned home, you should know the condition of the property, as explained in more detail below, the cost of any needed repairs, and the steps in the loan qualification and closing process before you enter into a purchase and sales agreement.•  Has Fannie Mae fixed everything in the house? Fannie Mae may make some repairs to properties to increase their marketability; however, the buyer should be aware that other repairs may be needed. Fannie Mae sells each property “as is,” which means that the buyer accepts the property “as is.” Fannie Mae is not responsible for fixing any problems after settlement. Even if the house has fresh paint, brand new carpet, new appliances, perhaps even a new roof or siding, it doesn’t mean everything in the house is new, or even works. Fannie Mae does not warrant or guarantee any work that may have been done on the property, whether as part of its efforts to sell the home or pursuant to conditions in the purchase contract. Where a home warranty is available, you may wish to buy it at your own expense. You should also consider hiring a qualified professional to inspect the property, whether it has been repaired or not. Hiring a home inspector is a recommended practice, no matter what type of home you buy.

•  What can you tell me about this house? If Fannie Mae knows of any hazards on properties we own or market, we disclose this information through our real estate listing agents. However, we may not have been informed by the previous owner of all hazards. We encourage you to have the property inspected by a professional before you buy.

•  What type of sales contract does Fannie Mae use? Fannie Mae uses a state-specific real estate purchase contract and a real estate purchase addendum for our properties. If there is anything in the document you don’t understand or aren’t comfortable with, you may want to contact a real estate attorney, the real estate sales professional who has listed the property, or any real estate professional of your choice to review these documents with you.

•  Do I have to use Fannie Mae’s selected title, settlement, or escrow companies? No. You may designate the title, settlement, or escrow company of your choice, subject to the terms of the contract.

•  Will Fannie Mae accept an offer contingent on the sale of my house? No, Fannie Mae will not accept offers contingent on the sale of your current home. Other types of contingencies will be considered on a case-by-case basis.

•  Why does Fannie Mae require a lender’s prequalification statement before negotiating a home purchase offer? Fannie Mae wants to be sure that prospective buyers will be able to complete the sales transaction, including obtaining financing when needed. Prequalification allows you to see how much house you can afford and the mortgage amount you may be able to qualify for before you make an offer on a home. It also helps you focus on homes in an affordable price range. A loan prequalification doesn’t mean your loan is approved. You must apply for a loan separately, after you are prequalified and your purchase offer is accepted.

•  Does Fannie Mae provide special financing? Special financing is available on many properties through HomePath Renovation Mortgage.

•  Can I buy a house directly from Fannie Mae without going through a real estate sales professional? No. Fannie Mae depends on the expertise of local real estate sales professionals and accepts offers only through our real estate listing agents. You may work with any real estate sales professional to submit an offer to the real estate agent who has listed the property.What happens if Fannie Mae gets more than one offer? All interested parties may be asked to submit their best offer in writing though the listing agent no later than a specified date and time. Fannie Mae may accept or provide a counteroffer that we determine to be in our best interest. Fannie Mae is not obligated to accept any offer submitted.

General Mortgage Lending Terms
(Underwriting conditions may change on a per transaction basis)

30 Year Fixed & 30 Year Fixed with 10 Year Interest-Only Option
3/1 and 5/1 LIBOR ARM & 3/1 and 5/1 ARM with Interest-Only Option
Property Type	Max LTV	Max CLTV	Min Credit Score	Notes
1-2 Unit Primary Residence	95%	95%	660	1 Unit Warrantable Condo Pud
	80%	95%	580	1 Unit Warrantable Condo Pud
1 Unit Second home	90%	95%	660	1 Unit Warrantable Condo Pud
	80%	95%	580	1 Unit Warrantable Condo Pud
1-2 Unit Investment property	90%	90%	660	1 Unit Warrantable Condo Pud
	80%	90%	580	1 Unit Warrantable Condo Pud
30 Year Fixed & 30 Year Fixed with 10 Year Interest-Only Option
5/1 LIBOR ARM & 5/1 ARM with Interest-Only Option
Property Type	Max LTV	Max CLTV	Min Credit Score	Notes
1-2 Primary Residence ONLY	97%	105%	660	1 Unit Warrantable Condo Pud

Real Estate Wholesaling.. Get rich quick scheme, or a lot of work?!?

Real Estate Wholesaling.. Get Rich Quick Scheme, or a lot of work?!?

I work with a lot of investors. I have a booth at our local REIA(Real Estate Investors Association), and I am constantly looking for experienced investors looking to buy my properties(yes I wholesale), or newbie investors looking to get their feet wet with private money lending and tutoring.. Point is, I see A LOT of newbies who want to get their feet wet by wholesaling. A lot of these guru’s preach how easy it is to make 5, 10, 50k on a single wholesale deal.. Most guru’s don’t tell you how much work is involved.

Yes, you can make money in wholesaling, but there is a lot of work involved. There is many facets to wholesaling.. It’s not just making lowball offers on houses, and then selling them quick and easily… You are going to need to find sellers(banks/reo properties are easy enough, but there is decent competition there, so don’t depend on these). You will need buyers(Investors who have cash and are ready to go on a moments notice). You will need to know how to be creative and market effectively. Finding sellers and buyers and coming up with the marketing and the marketing itself are all things that are going to take time… Lots of time!!

Let’s run down the main process, as if we already have some buyers(investors) on the line, and we are looking at REO/Bank Owned properties, and since we are in fantasy land, lets say you are a Realtor and can make your own offers(I kid, I kid!)..

On average you will write 20 offers on houses before you will get 1 under contract… So that means you are going to go look at 20 houses(30 minutes a piece), then spend 10-15 minutes a piece writing up offers to submit. Let’s say they all counter offer and it takes you another 15 minutes each to write a counter to their counter, etc So 1 hour per house @ 20 houses = 20 hours per week plus or minus. Add in multiple second or third counter offers and the time limits can go up.

Once you get one under contract it will be time to submit your earnest money and then on to crunch time and getting it sold… You need to be calling all your investors and getting them in to see the house. Once you get one on the hook, you need to get them to give you the wholesale money and get them on the contract. Sounds easy right?

Let’s talk issues….

You don’t have your Realtors license… You have to drag a Realtor to 20 houses a week. You have the Realtor look up comps for your deal. You have the Realtor write up the contracts on 20 houses. You have the Realtor submit and defend all the offers. You have the Realtor submit your earnest monies. You are probably going to have to submit earnest money checks with each offer(don’t worry, they won’t be cashed unless the deal gets accepted). If you can’t close, your Realtor is going to have to fight to get you your earnest money back.

You can’t find a buyer…. Most likely you didn’t get a good enough deal for most investors, or you missed some repairs. You either buy it yourself, or you have to get out of the contract, and get your earnest money back. Be aware that getting your earnest money back might not happen, and in most cases it will take a LONG time to get your money back(2-6 weeks or longer). Your Realtor will be pissed because he/she drug you around to 20 houses, and you couldn’t complete the deal.

You don’t get any offers accepted….. Most likely you are having a problem comp’ing the house, or the repairs. Your offers are coming in way to low, and the bank is just laughing at you.. hehe Your realtor is going to start getting irked at all the work and no payoff.

You find a seller…. You are going to need to spend time with them, hold their hand, explain the process. You may spend 1-2 hours, or more, dealing with a seller to get them to the point of signing a deal with you. Then you are going to have a lot more time holding their hand throughout the process. You plan to hold their hand right?!?! Most people who sell to us are dealing with stressful extenuating circumstances. You need to understand this and help them feel comfortable with their decision. I know this process is about you making money, but you need to understand that you are doing a far better service for the seller. You are helping them offload a burden, in most cases. You may very well have to listen to a 3 hour speech about how the family pet died and it’s been a downward spiral ever since… DEAL WITH IT!!!

20 hours a week to preview and submit offers on bank owned homes to get 1 deal UNDER CONTRACT. Half a 40 hour work week to get 1 deal under contract. Don’t forget the time you will be spending marketing and dealing with buyers and sellers. Don’t forget the time you will be working with your Realtor(if you aren’t one). There is a lot of time involved in wholesaling. Doesn’t stop me, but I don’t have delusions of grandeur. There is no get rich quick scheme in wholesaling… Lots of hard work will pay off in the end..