What’s the most direct route to real estate investing prosperity in 2012? Buy and hold or flipping? In this month’s Home Stand, we tackle this issue head on, and we also touch on other crucial information including:
- State of the California Pre foreclosure market
- Helpful analysis of 2012’s most lucrative investing strategy
- Number crunching: December’s California pre foreclosure report
- California foreclosure law: what you need to know before you invest
- California legal round-up: SB708 – In or Out???
Rentals Seen as Pathway to Prosperity for Buy and Hold Investors
While some real estate investors crunch numbers, refine strategies and otherwise try to determine the best ways to make money from real estate in 2012, other investors are rolling up their sleeves and diving headfirst into “buy and hold” real estate investing.
The reason is simple: Great deals are abundant, prices remain low (especially when compared to the market highs before the market implosion), and there remains an abundance of pre foreclosure and REO property on the market.
For investors with access to cash, institutional financing, self-directed IRAs, hard money loans, and other financial resources, 2012 offers the opportunity to buy low – sometimes very low – and hold property as a steady stream of consistent revenue, banking on future prospects of equity appreciation.
Investor-Friendly Federal Rules Changes on the Horizon?
The federal government has tried multiple tactics and strategies to encourage positive improvements in the U.S. housing market. Determining in advance what any federal agency will do is foolhardy, but it’s important to point out that multiple housing experts are predicting that government regulators are beginning to embrace the idea that real estate investors may play a crucial role in any sustained recovery.
What form will this role take? Will federal housing authorities eliminate recently enacted “arm’s length” restrictions preventing lenders and short sale buyers from renting properties back to the former owner? Think it can’t happen?
It could.
Right now, Sallie Mae and Freddie Mac are considering exempting themselves from these same rules so they can get in on the landlording action. If they exempt themselves, might they not also revisit the rules for others? It’s possible. Only time will tell.
If these rules are relaxed, explosive new opportunities will exist for real estate investors to take advantage of already lucrative buy and hold opportunities. Rule changes would make it even easier for investors to get into the buy and hold market, reaping the rewards of positive cash flow while laying a foundation for equity appreciation once property values once again begin rising.
California Notices of Default and Notices of Trustee Sale Numbers Released
Solid improvement in the California pre foreclosure market is well underway, according to the numbers for December 2011. How much better are these numbers than those posted in November? What do the numbers mean? Find out now by reading our press release yourself at www.live-pr.com.
California Foreclosure Law: What You Need to Know Before Investing
Failing to understand the California foreclosure process could be a costly mistake. Aggressive civil and criminal penalties make it imperative that you fully understand California foreclosure law before you begin investing in this pre foreclosure rich state.
Unlike many states, in most cases California foreclosures operate on a non-judicial basis, meaning that it isn’t necessary for lenders to take borrowers to court in order to gain legal control of foreclosed properties. Instead, borrower legal protections are ensured by a Trustee, a neutral advocate selected by the state to ensure that California foreclosure law is followed. This person acts in much the same way as a judge.
Once a scheduled mortgage payment is missed, the homeowner officially falls into default on their obligation, and the foreclosure clock begins ticking. In most cases, the lender will immediately reach out to the borrower to encourage compliance with the mortgage agreement. Lenders are required to give borrowers a minimum 30 day period to bring their payments current before beginning any foreclosure proceedings.
If the homeowner fails to bring their mortgage payments current within 60 days of the first missed mortgage payment, the lender will file a Notice of Default, which places the borrower on notice that their ability to retain ownership of their home is in jeopardy.
The lender will continue working with the borrower to resolve the mortgage deficiency. A minimum of 90 days after the Notice of Default is given to the borrower, the lender is allowed to serve the borrower with a Notice of Trustee Sale. At this point, all is not lost for the borrower, but the sand in the foreclosure hourglass will be decidedly low. A minimum of 20 days after the Notice of Trustee Sale, the property can be sold.
It’s also important to point out that California has special protections in place for renters. Because renters can be faced with displacement in the event that the property they live in is foreclosed, California state law requires that all tenants be provided with written notice of any impending foreclosure action to ensure that tenants can seek alternative housing solutions. This 60 day period is twice as long as the 30 day foreclosure notice period granted to homeowners facing foreclosure.
California’s foreclosure process is fairly straightforward and easy to understand, although it can be a bit confusing for homeowners (and real estate investors) taking their first foray into the California foreclosure process.
Extension of SB708 in the Works?
California lawmakers are in the process of extending SB708, a popular legal provision that provides California homeowners and other interested parties a bevy of legal protections. Some of the highlights of these provisions include:
- 30 Day Foreclosure Process Delay – Before lenders are allowed to initiate foreclosure proceedings against a delinquent homeowner, this law requires lenders to make a good faith effort to contact the borrower and work out an equitable solution.
- 60 Day Renter Protection – Because renters aren’t always in the loop of timely information, this law gives them a little extra time to locate appropriate housing before they can be evicted as a part of the foreclosure process.
- Forced Property Maintenance – Another key provision of this law is forced property maintenance. The reason is simple: As foreclosed properties fall into a state of disrepair, properties can become eyesores for neighbors. Forced property maintenance seeks to remedy this problem by assessing fines to offenders at $1,000 per day. This helps to encourage lenders to maintain their properties, regardless of whether they have willing buyers ready to take properties.
As you can see from this month’s newsletter, it’s important that you stay abreast of the latest real estate investing news, investing strategies, and market research to give you the best possible chance of succeeding in California’s real estate market – or for the matter, any real estate market.
To give yourself an edge in your own business, we recommend you plug into the best pre foreclosure data available in the industry. To learn more about Default Research’s detailed pre foreclosure reports, visit www.defaultresearch.com