Real Estate Buyers

This section is dedicated to providing information to Real Estate Buyers. It doesn’t matter what price range you are in, you want to make the right decision when it comes to buying a new home or any Real Estate property. No one wants to make a mistake when it comes to a Real Estate purchase. But it happens every day.

The Home Buying process is rather simple when you follow the prescribed order.

  • Talk to a local Lender to get pre-qualified for a loan.
  • Talk to your Real Estate Agent and let them know what type of house you want, features, location, and other vital information.
  • View Houses
  • Check Market Value
  • Review any irregularities with the Lender
  • Write an Offer to Purchase
  • Negotiate price and contingencies
  • Submit paperwork to your Lender after an offer is accepted.
  • Go through the Lending processes
  • Final walk through before closing
  • Final closing

Each of those steps are covered in greater detail on articles in the Buyer Section of this website. This Website is designed so you can find information fast. Information is updated on a regular basis. So bookmark this site or sign up for E-mail updates.

The pull down in each category will feature the majority of information on the subject. Additional information can be found using the Search window, or Category Pull Down. If you have any ideas, questions, or suggestions, post a comment, or E-mail us directly.

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Ez1 Realty is dedicated to making your home purchase Ez. We pride ourselves on closing on time, keeping you updates, informed, and comfortable with the home buying process.

For the Serious Investor

Home Town Realty is seeking out the best investments for the serious investor. This page is not intended to post all the investment properties available. We can of course post our own listings for Sellers who appreciate the additional marketing Home Town Realty offers. One of the many personal sides of the Real Estate business all our clients appreciate. We can also post investment properties offered by other Brokers who decide to cooperate and take advantage of our advanced marketing skills. Contact Home Town Realty for additional details.

In my humble opinion, this is one of the finest investment opportunities I have seen over my long Real Estate carrier. This 4 family unit built in 2006 is a rare find. Two of the units are over 1600 square feet and 2 of the units are over 1300 square feet. The sale includes an additional poured concrete pad for a future 4 family unit. This allows the investor to build and operate an additional 4 family unit. Other nearby lots may be available.

MLS Number 1528022


Campbellsport is a small community thriving on family owned businesses. For the serious investor this means, long term, steady employment. The serious investor is also concerned with local government and their commitment to growth. At the present time the Campbellsport town board is considering plans to grow the community in both the business and housing sectors. Similar towns in the area have experienced outstanding growth over the past few years. The serious investor has the rare opportunity to get in on the ground floor on these expansion plans.Whenever an investor is considering a property, location is always a major concern. Along with location the job market is also an important consideration. This particular 4 family unit is located within a short distance of three major cities in Wisconsin, Fond du Lac, West Bent, and Sheboygan. Between those cities are a number of smaller towns with a vast array of job opportunities. At the present time Campbellsport including surrounding towns and cities are experiencing a shortage of workers for available job openings. The area is also experiencing a shortage of homes and living spaces. This makes for the perfect investment opportunity.


For additional information about the 4 family unit or the community, call the Listing Agent Tara Henke 920-376-9506 today.

We appreciate your input to help us increase our level of service to every client we serve. Fell free to contact us with any input or suggestions. Also feel free to share this information with family and friends.

 

2 Unit Package Deal with Seller Down Payment Assistance

There are 2 separate properties available – N3958 the 2 Story home and N3962 the single story home.

N3958 includes a 2 story home with a large kitchen area, dining room with full length windows, large living room complete with fireplace, 2 bedroom, and 1-1/2 baths. It has a steel roof, ornate exterior woodwork, porch and sits on 2 acres of land. The house is heated by propane through a forced air furnace. The lower level has a full unfinished basement.

 

N3962 is a single story ranch house with 2 bedrooms and 1 bath. It has a crawl space for a basement. An attached 2 car garage and 3.78 acres of land. A large pole building is also included.

2 Unit Package Deal with Seller Down Payment Assistance

The Seller would like to sell these 2 properties N3958 and N3962 (MLS 1604092 and1605077) as a package deal. The seller also wishes to enter into a long term lease on the pole building. The seller is flexible. A portion of the pole building can be divided and used by the Buyer. All details would of course depend on the Offer to Purchase the Buyer drafts.

The interesting feature on this package deal is:

The Seller is able to pay a long term lease for the pole building in advance.

If the Buyer’s Lender will allow the advance lease payment to be used as a down payment on the purchase of the property, the Buyer could have a nice size down payment and reduce interest payments on a loan. Based on actual numbers, this could be quite an investment.

For more information contact”

Dennis Herman 414-426-1784

Rent to Own

What is a rent to own? The actual paperwork is called an Option to Purchase. That is a written offer on a house or duplex to purchase the property in a given time, at a specific price. The Option to Purchase is normally used for buyers who do not have the down payment to complete the purchase. So the buyer moves into the house, pays rent, and many times a portion of that rent is applied to the down payment.

The Option to Purchase is good for a buyer who finds a house but has a low credit score. In that scenario the buyer needs to find a lender who is great at credit score couching and credit repair. The buyer’s credit score has to be raised as quickly as possible. It is very important to choose the right lender in this situation. The wrong lender could lead to a tragic and costly loss for the buyer.

The key is to work with a local lender as well as a local Real Estate Agent. I have no idea how many fake lenders and Real Estate sites are lurking in the dark world of the Internet. Based on experience, Internet lenders may or may not really exist. There are a few large companies that actually lend money. Remember there are a number of fees involved in the lending process. Do you feel safer putting your charge card number into a web page and pressing a button? Or do you feel more secure walking into a local bank, sitting down face to face with a lender in their office and handing over a check?

The key to credit repair is to preform a specific set of steps. At the very least you have to give you Social Security number to the lender so they can check your credit score and print a report. There may be a list of loans on that report you never heard of. There are companies who file fake reports, and for a few hundred dollars will remove that negative information from your credit report. How do you think they got your Social Security number? From the Internet. Be careful with whom you share your information. Real Lenders are required to use extra layers of Internet security.

The key to a successful Real Estate transaction is to choose a local, experienced team. At the very least that team will begin with a Real Estate Agent, a Lender, and Home Inspector. Each person will be state licensed and know their particular fields. The Real Estate Agent will know how to conduct specialized searches to save time, establish marker value, and find the home you want at the best market price. The Lender will guide you to the right loan for your situation and needs to work with the Real Estate Agent to see certain events and plan for them before they arise. The Inspector will know the local codes, and features of a home that may be a concern, and explain basic home maintenance and financial planning to achieve that goal. The team will also need a good Title Company to ensure all the paperwork is signed and funds are collected and properly distributed. Each member of the team has to be a local expert in their field to avoid costly mistakes. The Internet offers a broad range of opinions that may or may not apply to your local circumstances. You need the right experts in the right fields, in your local market to complete a purchase. Don’t be fooled by Internet parties claiming to know every local law, code, and Real Estate Market.

Rent to Own or Rehab to Retail

Finding a home has just become easier. Now there are two new options for you to choose from.

Rent to Own or Rehab to Retail.

Both options are designed to make the home buying process for qualified home buyers a simple and enjoyable process. Only a few easy steps are involved.

1. Pre-qualify

Once you have been pre-qualified you will know exactly how much home you can afford.

2. Look for a home.

You will work with a professional Real Estate Agent who will guide you through the search process.

3. Price the updates.

A team of contractors will provide pricing for any updates you may require.

4. Agree on a final sale price.

When a purchase price and remodeling upgrade have been agreed to, the home will be purchased, remodeled and ready for to move in as little as 3 weeks.

Call for additional details 414-426-1784.

That’s right, just like the title says – there are some houses purchased as foreclosures and flipped. Some of those houses may have seen severe mold problems. I’ve seen a few of these. I’ve been asked to list some. My response has been, “we have to disclose problems that may severely effect property value.” Seller’s response has been, “I’ll look for another agent.” It doesn’t take much for investors to find Real Estate Agents who don’t ask questions.

How do you protect yourself against those types of issues? Most of the time its not that difficult. Many REO properties with mold problems can only be viewed after signing a release. Any Real Estate Agent worth a plate of beans will be smart enough to look at the property history on the MLS to get an idea of how much the seller paid for the property. A quick look at the old listing will tell if it had a release for mold attached to the listing. After all, if the Real Estate Agent your working with represents you, don’t you think they should be looking out for your best interest? This is one reason why it’s important for a Buyer to have an Agent represent them.

Don’t expect your Agent to do miracles on price. It all depends on the quality of the work done on the property and what buyers are willing to pay in the area. Most foreclosed properties have few if any pictures which makes it difficult to gauge the amount of work done on the property. If the property did have a mold release form attached to the listing, the seller should have proof of proper mold removal by a licensed or certified professional. After all, the seller has to pay income taxes on profits from the sale and a deduction would come in handy. Common sense tells you the repairs should be accounted for.

An experienced Real Estate Agent will be able to walk into a remodeled home and assess the quality of the repairs. After viewing hundreds of foreclosed and remodeled homes in the area, Agents are familiar with the quality of repairs and sometimes the investor doing the work. Real Estate Agents are not licensed to perform a complete inspection or tell you if repairs are up to local codes or not, but can point out questions to bring up to the licensed inspector of your choice. Buyers are often surprised at details that come up when they have a new set of trained eyes looking over the property. This is why its so important to work with a good Real Estate Agent and hire a good inspector.

What Lures People Into an Online Scam

So you want to get rich in Real Estate. You don’t have much money, but you heard all the stories of how people broke the system and made it rich in Real Estate. The Internet is full of Real Estate Scams with one intent…. to quickly part a fool and the little money they have. Not only are these scam artists using the Internet, they have enough guts to hold seminars in major cities to collect more money. I can tell you —- beyond any doubt —- the only thing these people know about Real Estate is their scripted plan to suck money out of victims with high hopes and dreams of making it out of this depressed economy we seem stuck in. Let me show you how it works.

How Online Real Estate Scams Work

Charges begin at the very beginning. After a free introduction online or at a local meeting which consists of NO USEFUL information —- ONLY a load of hype, people fall for these plans like an unsuspecting fish goes for a shinny lure. Things look so good, fees seem like a small investment. Let me tell you what you are investing in. There is a scripted system you are investing in. This scripted system is not designed to make any money for you! It is a system to put money in the pockets of this carefully formed network of thieves. The first charge is a set of lessons, either online or a condensed live seminar. They will tell you about some secret list of foreclosed properties. Here is the hook. They tell you only certain Real Estate Agents get this list! Any suggestion of a separate list is against local MLS rules and agreements all Real Estate Agents share. Every licensed Real Estate Agent must sign an agreement to share all their listings with all other Agents on the local MLS. There is no secret foreclosure list. These people are trying to impress you will false information. Some of them are trying to get you to work with agents they hand pick, but this is very rare. It doesn’t take much effort to gather a list of new, inexperienced agents eager to make their first sale. All these people need to do is check public records to find newly licensed Agents, who may not know what they are falling into.

The next step is to provide you with a pre-approval letter or proof of funds letter. Boy — Do these people look like an answer to prayer. After paying a fee, you get a letter and these people promise to give you money to invest in their system without checking your credit. This is too good to be true! That’s because it is not true! There is a world of difference between a letter and cold hard cash. Of course there is a fee for the letter, and a fee for a credit check, another fee for an appraisal, another fee because they feel like sucking more from you. That’s the system you are buying into. All the money flows one way!

If you happen to have funds, you can elevate to their next level of scams. You get the gold script!!! This is what they will tell you. They will tell you how to bid. Of course you have to get an offer accepted. They will tell you about their plan that never fails —- and it sounds good. But of course will never work in the end. Here is their plan. Over bid on the property. The way they explain it makes sense. After all they are trusting you with their money…. all they are asking for is your trust in return. WHAT A SCAM! You have not seen a dime from them and they are pulling the TRUST ME CARD. By this point you paid them thousands and received nothing but promises. And now you are paying for some of the worst advice I have ever heard. Of course the best properties receive multiple bids and you have to find a way of getting your offer accepted. They tell you once you over bid and get the contact, which they tell you is a legal binding contract…. which is about the only truthful matter they will tell you, the Seller and you are bound by the contract. What they fail to tell you is, asset managers seldom negotiate price after you sign a contract. There is nothing in the contract saying the Seller has to deal on the price. When you fall for this scam, you missed one very important point! The Seller has a group of cash buyers waiting in the wings who can close in a hurry. The Seller can tell you to take a walk. In the mean time, you lost more money on the scam. They tell you they have a network of inspectors to look over the property, give you a report and instruct you on how to use their report to negotiate. Two problems here. Number one, you pay them for the inspection. More money for them. Number 2 – they DO NOT use state licensed inspectors. The contracts I use in Wisconsin states: A State Licensed Inspector must be used. You just wasted your money. Any Listing Agent with a year of experience will take one look at that report and know it is a fake. When I see this, I call the so called inspector and ask for his state license number. Guess, what… the house of cards immediately folds. Next on the scripted plan to part you from your money is the fake contractors. More money out of your pocket, more in theirs. Now here is the real heart break for innocent buyers like yourself. According to the contract you have 10 days or so for an inspection. If you don’t have a good agent, that time disappears. You lost that contingency to back out of the contract and get your earnest money deposit back. The worst part of this scam is the time it takes. Before you know it, time runs out, you fail to close and find yourself in a position to loose your earnest money deposit. Notice how you are the one putting up all the money…. and they are the ones making the money? When time runs out, you are in what is known as breach of contract. You failed to fulfill your part of the agreement. Some Sellers are insisting they keep the earnest money. At this time it appears to be the only way to combat this scam. Most of the time Buyers will get their earnest money returned but when Sellers see this scam, they may not be so lenient. Collecting earnest money is a long process most Sellers will not want to go through, but one Seller instructed me to go through the long drawn out process. In the end the Buyer lost the earnest money. The whole process is nothing but a waste of time for everyone involved and a waste of money for the Buyer.

Beware the Bite

There are other details the scam artists share to appear they are looking out for you. They show you how to alter standard contracts. They want to create the appearance they have your interests at heart, but make no mistake, these scam artists are looking out for themselves. Here is a short list for you to copy and paste. If you ever attend any of these scam artist’s meetings, you can go down this list with a smile on your face and your money in your pocket.

Unexpected Fees

  • They charge fees. Every experienced Real Estate Agent has worked with successful investors and is willing to share information for free.
  • Look out for useless hype.
  • Look out for facts and figures from outside the market area you want to invest in.
  • Look out for a system insisting one size fits all.
  • Look out for secret lists and inside information only a few people have.
  • Look out for networks they may claim to have.
  • If you did pay fees for training…. get out the first time you see a fee they forgot to mention.
  • Shy away from advice on how to alter state approved contracts.
  • Avoid systems which suggest negotiations after signing a legal binding contract.
  • Avoid systems telling you to over bid without providing you with current market conditions.
  • Avoid systems based on national statistics.
  • Avoid systems which teach you how to use an inspection to renegotiate purchase price.
  • Run from all inspectors, contractors, and LENDERS who cannot produce proof of a state license. 

The only system that works involves a few simple steps.

  1. Invest in an area you know and are comfortable with.
  2. Get a list of market reports for the area and know the current trend.
  3. Know market prices for both REO purchases and resale prices for turn key properties.
  4. Work with a reliable, licensed general contractor if you are not capable of doing all the repairs yourself.
  5. Get a little background on local ordinances for vacant properties and building codes
  6. Have your own team in place including a licensed Real Estate Agent, Lender, Inspector, and contractors. Form your organization.
  7. Keep expectations realistic…. the current market will do more to determine your success than any other detail.

FC Factor

What is the FC Factor in Real Estate? It is the knowledge, people receive from two major motivational factors. Those are either FEAR or CONFIDENCE. Most Real Estate sales people work on one of two those factors.

Confidence is what great sales agents learn to hone. How do Real Estate Agents build confidence with a Buyer looking for a home, lot, investment, or business? It is far more difficult to master the Confidence Factor, because each has its own learning process.

Homes are the most common and easiest to work with. It all begins with proper training. Not all training is equal. Some Brokers pride themselves on the level of training the provide to Sales Agents. Others provided either the minimum, or nothing beyond state requirements to obtain a license. And of course there is always shades of gray between. There are too many aspects of proper training to cover here. The main aspect of this article is to familiarize readers with signs of the two basic factors.

Another major step in the Confidence Factor is working with a group of great Inspectors. Those are people who show us what to watch out for. Good Inspectors are also great at explaining maintenance issues. A good Real Estate Agent will accompany Buyers during the inspection and learn from the experience so they can help pass that knowledge along to future Buyers.

Inspections

In most cases, Real Estate Agents are not licensed home Inspectors, and are not allowed to provide a complete assessment of a property. But we are allowed to point out obvious defects. In many cases, defects may not be obvious, but fall into a questionable category. Issues like foundations, electrical, plumbing, and roofing are some examples. A Real Estate Agent may see cracks in basement walls, but is neither qualified, or licensed to provide a valid assessment of the issue. But a good Real Estate Agent will point out the possible problem and explain how a license professional can properly assess the situation. The same is true for electrical, plumbing, and roofing issues. If a roof looks bad, let a licensed expert made a recommendation. If electrical wiring doesn’t look right, most Real Estate Agents don’t know electrical codes, but may be able to point out wiring that appears to be added after the house was built. A good Real Estate Agent will point out issues for a licensed Inspector to look at.

Major Defects

By law, licensed Real Estate Agents are required to disclose major defects in writing to both parties. The trick is, those defects have to be known and verified. Real Estate Agents have to know how to balance that law with another law telling us to be fair to both parties. That means Buyers and Sellers.

As an example. A roof may look bad to a Real Estate Agent standing on the side walk 50 feet away. But that roof may have an issue the Real Estate Agent is not trained to properly assess. The defect may be a fungus, dirt, or debris collecting on the roof. It would be inadvisable for any Real Estate Agent to offer an opinion that would drastically effect the value of that home in the eyes of potential Buyers. That would not be fair to the seller.

State licensed Inspectors are trained to inspect roofs, as well as other areas of homes. A good Inspector will determine the type of roofing, expected age, and remaining life period. A good Inspector will also look at other areas on the roof to determine quality of the materials used and installation. Inspectors will also be able to determine if the roofing materials faced recall notices, or other issues. Those are details Real Estate Agents are not trained to observe, nor share opinions on.

Having sold my own properties, I’ve seen a number of Real Estate Agents in action. Some, a few, but not many, walk through the door attacking the property. They point out every flaw trying to impress Buyers with their knowledge. They are trying to win Buyer’s confidence by convincing them, they will find every issue in an effort to obtain the lowest price. Is that being fair to the seller? Agents like that are trying to feed on the fear factor, getting Buyers to think, they will never find another Agent who is willing to do battle for them.

Disclosing Defects

There is a process Real Estate Agents must follow to disclose major defects. They must be disclosed in writing. In most cases, this involves a series of steps from third party licensed professionals involved in the transaction. An Inspector most likely will be one of them. Because Real Estate Agents are not trained or licensed in many of those areas of expertise, Buyers have to rely on other licensed experts. Once the proper inspections are completed, that can trigger a chain of events every good Real Estate Agent should be able to explain. It can be a little different from case to case, and the procedure may be a little different from Real Estate Agent to Agent.

Major defects to watch out for relate to safety in and around the home. In most cases here is Wisconsin, safety issues must be addressed and fixed before the properly can be sold. This is especially true in transactions involving a loan. In some cases involving cash purchases, the Buyer may choose to correct the issues themselves. But defects should always be disclosed in writing to protect the interest of all parties involved.

Major Fear Factors

It took me years to figure this racket out and how it works. I lost count on the number of sales I’ve lost to this type of, what I consider, Real Estate scam.

I’ve worked with dozens of Buyers for months, then one day, find out they purchased a property from another Agent. In some cases it turned out to be an Agent holding an open house. The Buyers walk in, like the house, and the Agent turns up the fear factors on high. Buyers are often told the house has an offer the Seller is considering, or someone is about to submit an offer. The Agent at the open house offers to help the Buyers I’ve been working with by getting them the best deal or out bidding another party. That Agent just happens to have a contract ready for the Buyer to sign. Notice the fear factor?

Another issue I’ve seen repeated is where a Buyer gets a phone call out of the blue from an Agent who happens to know how much the Buyer is qualified for, and what type of house they are looking for. Those Agents follow their script to make the Buyer sign a contract and purchase a home out of fear. In many cases I’ve received phone calls months down the road asking me what to do. The Buyers either didn’t get the property inspected or used the inspector suggested by the Agent and the property has a number of major defects.

In both cases, those Agents chose to ignore ethics codes. In the later example, Agents choose to purchase information stolen from computer hard drives. Both cases rely on the fear factor to force people into making rash decisions.

Investments

There are certain procedures Investors need to follow to be successful. I am not going through all those steps, but I will list a few factors Agents may use to force a quick decision. The major factor they dwell on is using information spread through the Internet. Most investment sites are in business to make money for themselves, not you the customer. I’ve seen dozens of people ripped off form Internet investment sites. I’ve posted what I’ve been able to piece together for what I believe is a script sold on the internet. That script is designed to drain potential investors of funds.

How Online Real Estate Scams Work. 
http://ez1realty.net/2018/04/19/how-online-real-estate-scams-work/ Link to the detailed story. 

There is a process to follow and each Real Estate Agent has their own procedure. I have a set procedure and like to follow a particular order. First find out what if the Buyer watched any online videos. Many Buyers watch a half hour video and think they know it all. This makes working with them difficult. They are filled with false expectations and some of the online methods are either impossible or illegal.

The next step is to find out the Buyer’s experience level. I like to send new investors information on landlord training if they are starting out, or buying their first duplex. I use this to gauge enthusiasm. Of course I check to find out if they are a cash buyer or if financing is in place.

Buyers have to be familiar with the area they plan to invest in. We go over prices in a few areas. Then assess price and condition. When a Buyer makes a decision, I send them a market report with active and sold prices over the past 6 months within a half mile of the property they are interested in. We also look at the number of foreclosed properties in the area to help estimate future prices or problems.

Looking at market data in the immediate area is the most important step. But some agents use the confidence factor to lock up another sale. In this situation, a Real Estate Agent will use information they know is prominent on Real Estate investment websites. They encourage the Buyer to purchase the property by saying something like, “all you need to do is paint, put in new carpeting, and resell this property for $100,000.” Some Real Estate Agents work on hopes and dreams build up on the Internet.

Listings

Some Real Estate Agents use the confidence factor to talk Sellers into listing their homes for sale. It is a simple process I’ve seen used, and although it may be technically legal, I do not consider it ethical. If you look on the standard Listing Contract in Wisconsin, you’ll see the contract is between the Seller and Broker. Not the Real Estate Agent, but the Broker. Some Real Estate Agents are instructed by their Brokers to use that loop hole to their advantage. What do they do?

Some Real Estate Agents use office sales figures to impress Sellers. Since the contract is between the Seller and Broker, the individual Real Estate Agent uses office sales figures to impress the Seller by presenting office listing and selling figures as their own. But the office nor Broker have anything to do with most of the tasks involved in listing a house. The individual Real Estate Agent fills in the contract, gets it signed, takes measurements, pictures, collects data, and writes up the ad for the property. The individual Real Estate Agent also handles any offers to purchase and negotiations. The Broker has very little to do with the property listed for sale, and hopefully sold, other than collecting the sales commission and filing paperwork.

So you can see, most Real Estate Agents will work with a combination of fear and confidence factors. How they use those factors is important. Do good agents use that fear factor? Can the fear factor be used in a good way? Only when it is used within the restraints of the law. Real Estate Agents are also required to disclose what is called adverse defects. What is an adverse defect? It usually concerns conditions around the property. That can include legislation, certain improvements, and other factors that could drastically effect the value of the property. The Real Estate Agent has to know about those conditions to reveal the source, most often news, or updates on local issues. A few examples may be plans for a new expressway, zoning changes, and other factors involving major improvements in the general area. That is not a fear factor, but providing vital information.

What to consider when investing in Real Estate

This is the most important part of Real Estate Investing. Have a written plan. Write down your target purchase price. Get familiar with actual sale prices in the area. Always do a quick market analysis before submitting an offer. You have to know how much the rehab will cost. If time allows get a written quote. Know all the costs, fees, taxes, everything involved. You can use an inflated figure to estimate. A Real Estate Agent should be able to give you a basic idea on this. On a normal purchase of $60,000 and resale of $100,000 I typically use an estimated cost of $10,000 for commissions and fees. Based on the home and time of year, this may also cover a portion of taxes. Add to this the cost of improvements, loan costs, and any city charges, a targeted profit of $10,000 is about standard. This is why it is so important to write everything down. Create a form or simple spread sheet. Keep records and learn from failures as well as from your success.

Avoid Real Estate Investment Scams

How do you avoid hard money scams? A wise teacher once told me, he never asked a question without first providing the answer. Here is a list of things to look out for.
Up front fees
Bad advice which is designed to appear free.
Charges for lists.
Delays in paperwork.
Delays in returned calls
Avoid high up front fees. This is exactly what Internet scam artists in the hard money market thrive on. A fee for this, that and the other thing. They want you to invest, then they have you hooked. It is the oldest trick in the book. Do they really have a book? You better believe scam artists have a written step by step procedure to get you to send more and more money. Look at the scams where they tell you they will transfer millions of dollars to your bank account. They don’t have any money, just a long list of promises, excuses and fees. This is why it is so important to have your own written plan. Look at it as preparing for battle. Scam artists know you do not want to loose money and target that emotion, reading off a list of promises to get you to send more money. Don’t let them turn this into an emotional mind game. Stick to business facts.
Beware of anyone claiming to be an expert in the field of Real Estate investing using simple terms putting the entire Real Estate market in a single basket. Any experienced Real Estate Agent will tell you investing and investigating is on a block by block basis. In the past three months I have identified areas in Wisconsin which have doubled in value while a few miles away values are still declining and everything in between. Anything outside a 4-6 block radius can be misleading information.
If a company charges for a list, use your head and finger. Leave the site. Especially sites with tiers like basic, expert, elite services. Come on now. If I was standing in front of you as a licensed Real Estate Broker and I asked you what level of service you expected, would you work with me knowing up front I was not going to provide you with the best service I am able to provide? How would that make you feel? Does writing it out and posting it on a web site make it any different? Let me tell you a little secret in the Real Estate industry. Every Agent will tell you 80% of their business depends on return customers and referrals. Why would I give up 80% of my business which is in fact FREE advertising to make a few extra dollars? Get real. Slow down and examine the facts for what they really are.

Experienced Lender

Experienced lenders know their contracts, just like experienced Real Estate Agents know the major questions to write an offer to purchase. A legitimate lender will know the usual fees and conditions of a loan. A scam artist will change the subject, tell you how much you are going to make, do anything to keep you off balance. A nominal application fee is normal, but you need to see something in return. Ask for a standard contract in advance. See what they say. If they cannot explain it, time to begin paying closer attention. E-mail them a list of questions and examine which they prefer to answer and how.
One thing I have seen that is consistent with hard money lenders who never close is their phone etiquette. It does not matter what type of loan you are getting, FHA, conventional, or hard money. If a lender has a difficult time returning calls, it can only get worse. I have seen this happen a few times, the result is always the same, delays in the entire process. Lenders have to complete certain tasks on a particular schedule. With few exceptions, I have seen a direct correlation between lenders success on the phone and the entire loan process. Some of the on line Real Estate hard money lenders I have dwelt with never answered their phone and never came up with the money to close. The result is always the same with you the Buyer holding the bag. And you know what it is filled with.
If you want to invest in the Wisconsin Real Estate, I may be able to help. I’ve worked with hard money lenders, found them properties, listed and sold properties for them and also work with a local lender to arrange loans. If you want to explore this market, feel free to contact me. As with everything else, it does take money to make money. If you are a new investor, 10 to 20% down from your own funds is not out of the ordinary. You also have to show cash funds to complete repairs. Having a written plan will help. It is a simple process that takes a while to build, but can and has been done. Hopes and dreams may be great, but don’t plan on wasting peoples time by not putting in the required effort on your part first. But putting in your time and effort can save you a lot of time, headaches and money in the long run.

After posting a number of articles about my experiences with hard money lenders, reading a number of posts, and investigating web sites offering Real Estate hard money loans, I have come to the conclusion, much of Real Estate hard money lending is like chasing the wind. Most web sites charge a fee. Some give you a few names they claim will provide money, but in today’s age of research show how little they actually have to offer. I am the type of guy who believes one should exhibit the morals they live by. Demanding money before providing a service is not what the Real Estate industry is founded on. Real Estate Agents and Brokers do not see a dime until the job is done and the deal is successfully closed. The same with Title companies and others involved in the industry. Inspectors do not charge until they show up at the property, perform the inspection, showing the client their expertise and value. This is the moral standard the Real Estate industry should build upon. But the advent of the computer age has tried long and hard to change that.

A Little on Wisconsin Laws on Referrals

There are laws governing referral fees. The Internet opened doors for a number of industries to come in and side step those laws. In Wisconsin no one is allowed to split commission, or pay a referral fee to anyone who is not a licensed Real Estate Agent or Broker. The same is true for lenders. Out of state on line companies ignore this law by advertising a referral service, then try calling it an advertising fee to get around the law. Think of what this is doing to the Real Estate industry. If you are selling your home, your most important asset, do you really want to begin a business relationship with any company willing to break the law to make a sale? This is why I do not and will not participate in any unlicensed referral service. If these services were legitimate, they would wait until the transaction closed before collecting any fee.

Fees

Lenders are the only aspect of Real Estate that charge an up front fee. Usually an application fee and funds to pay for the appraisal. The appraiser gets paid after providing services, but before closing, whether or not the transaction closes. But what about hard money lenders? Based on experience and the things I see on the Internet, much of the so called hard money industry is based on up front fees with little or no success based on the company you are dealing with. I suspect many of those companies exist only as a web site with no hard cash to back them up. The problem is, how do you tell the difference? What can you do to protect yourself? Who can you trust?

Search for a Real Estate Hard Money Loan

The first logical step would be a local Real Estate Agent. Most work in offices with a number of Agents dedicated to helping one another, which establishes a network of information and people. Call around until you find someone with a local connection for a personal hard money loan. You are always better off dealing with someone face to face, hopefully a licensed lender able to arrange a loan with private funds for of course a fee. Within minutes, at the most a day or two, you should be able to find out if you qualify. They should also be able to discuss terms in simple language. Ask questions about fees, length of the loan, penalties, and options. Don’t forget to clarify the cost of the options. Ask for everything in writing to review. This may cost you an application fee, but local fees are normally far less than those charged by Internet based companies. It is also a good idea to have your attorney review everything before you sign. Who knows, once your attorney sees the conditions, they may want to provide you with a private loan.

Highest and Best Offer

To deal with the highest and best offer requires a constant monitoring of email accounts. Most often we are given about 24 hours to reply. It also requires a great deal of organization to have the information to fill in the counter offer, get it signed and submitted on time. Today’s technology allows us to do things quicker, but only if you have the information and programs available.

One of the features used by Real Estate Agents is E-sign. A counter offer can be quickly generated and e-mailed to a client for review and signature. Once it is returned, submitted to the Listing Agent or uploaded to sites such as Homepath. The other alternative is to have a blank form available and meet personally with the Buyer for their review and signature.

This exemplifies the need to have all the details in place before bidding. One of the biggest obstacles we face in Real Estate is Buyers dragging their feet, taking their time providing proof of funds, or a preapproval letter from a licensed lender. Most Sellers, or asset managers will not consider an offer if it is not accompanied with proof of funds or a preapproval letter. Once we enter the counter offer stage requiring a highest and best bid, it leaves little time to tie up loose ends.

The number of people calling me, thinking they know what it takes to buy foreclosed properties surprises me. Many of them watch online videos produced by companies which may, or may not exist, often paying fees to receive online advice. It seems online video viewers are the majority of unprepared buyers. They take advice from someone on an online video about Real Estate who may or may not have purchased foreclosed properties. They seem to know little or nothing about the actual process which causes the majority of delays. The very first step is getting the funding inline. Do you cash your check and put money in your wallet before or after you go to the store? How do you shop? Do you run around looking for the best bargains? Do you wait to find the bargain of your dreams then decide to make a payment on your charge card, wait for the funds to clear, then run back to the store to see if the item is still available? This seems to be the way some people like to shop for houses. By they time they take care of funding, the house is gone.

Straying from the tried and true process most often results in wasted time and energy.