Understand that loses in the real estate market on home values are pure fiction. No I am not saying your investments are not worth less money than they were. However, what I am saying is that you do not realize any loss in value unless you sell the property. 

Therefore, key #1 is to ride the downturn or stated simple "Don’t Sell!" 

Thats right is you hold onto the property until values come back you will never experience a loss. So look at your whole situation and if possible don’t sell.

If you look at the last 100 years of real estate values you will see that there have been ups and downs but overall value always goes up over the long haul. So be in real estate for the long haul. Despite how troubling the current market is, it will turn around. So wait for the turn around if possible. 

The last thing I want to address with this is fear. If you own 10 homes now and they are rented out. Its easy when one goes vacant to panic and thing the market is catching up with you. I have seen many sell at this stage. Don’t! Don’t let fear take over. Vacancies are normal and people have to have a place to live. Its actually easier now than ever to find tenants. So stay the course and find a new tenant. Remember, as long as you hold the property you don’t realize a paper loss! 

Don’t feel left out, most people have not heard of this process or program. 

So let me start with telling you what it is. A Short Refinance is similar to a loan modification in the fact that you are renegotiating the terms of your loan with the investor who owns your note.

Any many of you know, loan modifications typically reduced your interest rate to a level where your payment becomes affordable. 

However, loan mods do not address the bigger issue and that is the amount owed on your home or the mortgage balance. 

This is the real issue as so many people are underwater with their homes. Meaning they own more on their mortgage than what their home is worth in the market today.

The problem with a loan modification is it does not address this problem which is the real issue dragging the housing market down.

That is where the short refinance comes in! With a short refi, you get a new refinance loan with a new bank. Then you negotiate a short sale on your home. Meaning you negotiate a payoff with your current lender for the current market value which is less than what you own. The new mortgage or refinance pays off the original lender and you have a new loan on your home at the current market value! 

Nice, don’t you think? Well, in theory it sounds great. However, in practice it has been very difficult to do. 

But, this might be changing. There is a bill in congress right now that will offer banks an incentive to accept these sort of deals. My guess is another 6 months from now this might be the big opportunity we all need to really fix the housing market and your personal mortgage issues. 

Keep checking back as I am following this issue real close and will let everyone know when its something they have a chance at! 

Investing in free and clear properties removes the need for a bank loan entirely! The process goes like this. You find a home that have no mortgage or liens against it. You offer to buy the property from the current owner at the price he wants as long as its within fair market value. But you only give him this price if he or she will offer you terms on the sale. Meaning they will act as the bank and you will make payments to them at an agreed interest rate for an agreed time period! 

Essentially, they are becoming your bank and just as with any typical transaction you will own the home with title in your name! Simple right? It actually is very simple. The hard part is finding these homes. I have put together a video to show you how to do that. But lets just say your best resource is a title company and a postcard! The title company can get you the info and you can write and mail the postcards. Then just wait for the phone to start ringing!

Lets take a closer look, shall we? Now I’m going to use general numbers to illustrate and assume there is no down payment (which there will be, so real numbers will be even better) but you’ll get my point! If you buy a home for $50,000 on a 30 year mortgage at 7% interest your monthly payment will be $333 a month. If you figure another $200 for taxes and insurance your at $533. Homes like these are renting all over the place for $700, $800 and even $900 a month and I’ve even seen more! 

Now instead of doing a 30 year mortgage why not do a 10 year mortgage? The difference is amortized over 10 years with a 6% interest (the rate will be lower because its a shorter term) your monthly payment is $555. Add in the same $200 for taxes and insurance and your at $755. Put a tenant in the home for this price (not hard as its actually the market rate) and you’ll own this home free and clear in 10 years. Just about the time I’m thinking this crazy market will be getting back to normal. 

The beauty of this is that that entire rent now goes in your pocket and not the banks for as long as you own that home and rent it out! Not to mention rental rate will continue to go up over time. Imagine doing this with 10 homes now. In ten years assuming nothing changes like rents actually going up you will have over $65,000 a year in passive income coming in regardless of if you decide to get out of bed or not! 

Take this one step further and use Section 8 tenants and you will have the government making your mortgage payment for you! For years investors couldn’t make Section 8 work because of the cost of a home. Well now you can!

I have found that mailing postcards to people who are in pre-foreclosure or are in some other from of distress generates huge numbers of leads very quickly. Fortunately for you this is easy to do. 

Your post card doesn’t have to be anything special, just your offer and a call to action. Usually for the prospect to call you about selling their home to you. 

The real key to this method is finding the people to mail these postcards to. While there are many resources for this I recommend a website called NextMark.com. On this site you can search for all kinds of mailing lists and rent that list to mail out your postcard. 

One market I highly recommend you try is the free and clear property market. These are homes that do not have any mortgage on them. The reason this is good for you is because you can offer to pay the owner what they want for the home (assuming it is reasonable) as long as they will offer a seller carry back. Meaning they will act as the bank for you purchase and you make monthly payments to them instead of a bank. This is a huge opportunity because you can avoid the whole bank qualifying process and have a tenant in a home you own making cash for you immediately. Give it a try, you’ll love it!

Also, you should be building your business credit so you can buy property anytime you find a good deal without needing a bank loan. You can get our free business credit secrets training here.

If you would like to get help in establishing your business credit visit: The Business Credit Workshop

Until next time!