Only it’s not the end. In a simultaneous escrow the investor has already “flipped” your house to another buyer for a hefty profit. You don’t know anything about this transaction. Wouldn’t you be upset if you found out? Wouldn’t you feel rather dumb that you didn’t get the price for the house that the investor was able to? Wouldn’t you feel taken advantage of?

This is basically what the real estate “gurus” are teaching when you hear about one of them putting on a seminar or a workshop. As a Realtor, we are not allowed to do this type of investing without full disclosure to all of the parties. It just seems to me if everything is above-board, that’s the way it should be.

"Before Tim Larkin"

When you, as a real estate investor sells to a sociopath, this is what all the investor teaching gurus don’t tell you.

Not every “vanilla” real estate deal comes out “sweet”.

Five yrs. ago I sold my mobile home on an installment contract to a man named Timothy M Larkin. Due to the mobile needing some work, I sold it “as-is” at a discounted price. Mr. Larkin had just split with his family and wanted to stay close enough to spend a lot of time with his daughter, but could not get financing due to an IRS lien. His lawyer wrote me a letter stating that the lien would be cleared up with in the next year, and other than that Timothy M Larkin had a pretty good credit report.

I thought this would be a “win-win” for both of us. I agreed to carry the paper with 10% down at the current market rate, amortized over 30 yrs. due in 5. This kept the payments affordable for Mr. Larkin and would provide a monthly paycheck for me. That’s one of the things the real estate gurus preach. “Buy a bunch of houses with a positive cash-flow and build your wealth.”

At one point about a year and a half into the contract, he paid me $35000.00 of what was owing, and I gave him credit for over $47000.00. Once again, a win-win. Supposedly during this time he had also remodeled.

In the meantime, he harassed the lady across the street from him so much, he finally got her removed from the park. She was a little crazy, but not dealing drugs as he had claimed every time he called the police out there. He had also encroached on the next door neighbors lot so much that she couldn’t even use her driveway. She put her mobile up for sale. The people directly across from him who had had that mobile for years, he harassed them so bad about painting the outside of the mobile, they painted, and then put up a for sale sign in their window. He demanded the owner of the park remove another mobile across from him, and when the owner had it all set up to move it, Mr. Larkin declared it was a health hazard, and stopped the whole thing! Through all of these things I should have gotten a clue as to what type of person Timothy M Larkin was, but nothing prepared me for what came next.

First he had a lawyer write me a letter trying to claim fraud when I sold him the mobile home and I should give Mr. Larkin the mobile home and all of his money back. Luckily I am a very good Realtor, trained by two ladies that dotted every “i” and crossed every “t”, so needless to say that letter didn’t lead to anything. I had offered to sell him his note for a discounted price, and instead of negotiating, he just quit paying. I had to file a Notice of Default to get the back payments. After that it was as if I had to file a NOD to get almost every payment.

The park is now in flux. The owner wants to convert the mobile home park to condos. He’s been fighting for a while now, but has lost each fight as the park fills the City’s need for low income and senior housing. If you live in the park full time, it is rent controlled and the space rent is quite low.

The contract was going to be up this Feb. 2011. I really thought that he would renegotiate for longer time or try to buy out the contract at a discount. Instead, with a balance of over $88000.00 owing, all he offered was $10,000.00 and instead chose to go through the foreclosure sale. I haven’t been able to get inside yet, but he’s out and I did get some pictures from the outside. Timothy M Larkin chose to totally gut the place of everything that was in it leaving me with the shell. While I half expected as such, my boyfriend when he saw it was just devastated. He just kept saying “How could somebody with any kind of conscience do something like this? This man’s an animal!”

This is what happens when you as a real estate investor meets a sociopath. This doesn’t even touch on all of the time taken to do paperwork, etc. because he had no integrity and didn’t keep his end of the bargain.

"After Timothy M Larkin"

Disclaimer: I don’t for a fact know that Mr. Larkin has ever been diagnosed as a sociopath. I only know he appears to have no conscience for his actions toward other people.

If you’re really asking “Have we hit the bottom of the California housing crash?”, I would have to say I don’t think so, not yet. Millions of homes are still being foreclosed on, and despite what everyone says, banks are still not truly working with their customers. While working on loan modifications on one hand, the banks are taking the homes to the courthouse steps with the other.

If you’re asking “Should I sell my home now before it loses any more value?” I would say that this is the slow time of year to sell even in a good market. It’s true, your home may lose more value if you hold on to it going into 2011. As I said, I personally don’t believe we’ve hit market bottom yet. Right now rates are at an all time low, which allows more buyers to buy, giving the seller a larger market. Historically, around the middle to end of February rates start to rise knocking people out of the affordability circle. You also widen your market if you are willing to do a little ‘creative financing’ such as carrying back a note for part of the money you receive and having the buyer pay on an installment contract.

Last but not least, if you’re asking “Is this the time to buy a house?” I would say it’s a great time to buy if you’re planning on being in it for awhile. Unless you’re buying a fixer upper way below market and doing the work yourself, the days of flipping it right back out and making a huge profit are a little slower these days. If you buy a home planning to raise a family, or stay located in that spot for the next 5 to 10 yrs., opportunities abound.

You have the advantage of the lower rates, and this time of year most sellers who have their home on the market are sincere about really wanting to sell. The inventory may not be as large, but neither is the competition for the same house. Sellers tend to be a  little more negotiable when there aren’t any offers coming in.

If you’re just curious about what’s happening in your neighborhood because you’re trying to keep track of where you are financially, equity wise, I would be happy to give you a full report of the activity in your neighborhood for free. No obligation. Just remember, I only deal with the Santa Clara County, California area. I can be reached at 408-313-3270 or at LauriBeamish@gmail.com

Unlike San Jose with such a vast area and so many people, Santa Clara has been able to maintain that “small town” feel. Since moving here last October I have received “quarterly reports” on how the City is doing. Guides on City services available, activities, etc.  I love the fact that the city of Santa Clara has it’s own electricity vs. going through PG& E. Thank goodness the people saw through that proposition on the ballot last June!

Santa Clara is a great place for Seniors. They have a beautiful new center and if you are over 50 yrs. old it costs nothing to join. Due to budget cuts they have had to cut back on some of the hours that it used to be open, which is really a shame. I think they could probably charge a small yearly membership fee and they would still have plenty of people wanting to join.

The city of Santa Clara also seems intent on reminding people to support their local businesses. Obviously there is a method to their madness, more revenue to the City, but it’s still great for the small business owners in the area.

Santa Clara feels “clean” and safe to us since we’ve been here. We live in a rental neighborhood and we all know how bad some of those can be. I’m sure Santa Clara has some parts of it that are worse than others, but I have to say that I very much enjoy the beauty and the feeling I get living in our area. We have my mother with us also, so naturally I have to be concerned about her safety as well. Around here it doesn’t seem to be a problem.

To see if you also would love living in Santa Clara, feel free to contact me by phone or email any time.

As Realtors we are reminded all the time about safety when it comes to holding open houses, but here are some open house safety tips for home sellers.

You are trying to sell your property and have decided to hold an Open House. While an open house can be a great sales tool, but it also exposes you to numerous unfamiliar people for the first time. Stay safe by practicing these guidelines.

I would say the number one tip is to hold the open house with someone. As they say “there is safety in numbers”. If you can get a spouse, neighbor, someone to sit with you through the open house hours. Not all agents, buyers and sellers are who they say they are. Predators come in all shapes and sizes. We tell our children not to talk to strangers. You need to be aware of who your are talking to also. If you have a gut instinct something isn’t right, follow your gut.

Strangers will be walking through your home during showings or open houses. Hide any valuables in a safe place. For security’s sake, remember to remove keys, credit cards, jewelry, crystal, furs and other valuables from the home or lock them away during showings. Also remove prescription drugs. Some seemingly honest people wouldn’t mind getting their hands on a bottle of Viagra, uppers or downers.

Call the local police department and ask them to have a squad car drive by during your open-house hours.

• Check your cell phone’s strength and signal prior to the open house. Have emergency numbers programmed on speed dial. Make sure your cell phone is fully charged.

• Determine several “escape” routes that you can use in case of an emergency. Make sure all deadbolt locks are unlocked to facilitate a faster escape.
• Turn on the lights and open the curtains. These are not only sound safety procedures, but also great marketing tactics.

• If you were to escape by the back door, could you escape from the backyard? Frequently, high fences surround yards that contain swimming pools or hot tubs.
• When prospective buyers begin to arrive, jot down their car descriptions, license numbers and physical descriptions. (In theory this is great practice, but you may not have time if several buyers show up at once).  At an open house, be alert to the pattern of visitors’ arrivals, especially near the end of showing hours. In some areas, a group of thieves will show up together near the end of the open house and, while a string of “potential buyers” distracts the seller, the rest of the group walks through the house, stealing any valuables they come across.

• When showing the house, always walk behind the prospect. Direct them; don’t lead them. Say, for example, “The kitchen is on your left,” and gesture for them to go ahead of you.
• Notify a friend or a relative that you will be calling in every hour on the hour. And if you don’t call, they are to notify the police immediately.
• Inform a neighbor that you will be showing the house and ask if he or she would keep an eye and ear open for anything out of the ordinary.
• DON’T leave personal information like mail or bills out in the open where anyone can see it. Be sure to lock down your computer and lock up your laptop and any other expensive, easy-to-pocket electronics, like iPods, before your showing.
• You are responsible for your pets. If possible, animals should be removed during showings. Be aware that buyers and agents are sometimes attacked, and the owner will be held liable. Maybe you have a dog, cat or bird that isn’t allowed outside. Accidents happen. You wouldn’t want to find your pet out in the middle of the street.

Finally, whether after an open house or a standard showing, make sure that all doors and windows are locked. Thieves commonly use open houses to scout for valuables and possible points of entry, then return afterward.

I hope these Open House Safety Tips For Home Sellers help keep you aware and safe. As always, if I may be of service, don’t hesitate to contact me.

I felt very fortunate today to be in on a conference call with a fellow Realtor, Jeff Schrager in Fresno, whom I have never met, but obviously has a good heart. He is willing to teach any Realtor whose interested how he put together a network of everything the homeowner going through foreclosure could need. He is in a what used to be very small and rural part of California and he’s been able to make it work. It seems we in the Bay Area with so many resources should be able to do a really bang up job, if everyone would just work together.

Have you ever seen that demonstration with a strand of hair? You take one strand of hair and try to break it. It’s pretty easily done. You put 3 strands together, it’s almost impossible. That’s how I feel about this program. None of the resources anyone has is enough to save all of the homeowners in trouble, but if we combine together and have a huge network, while we can’t save everyone, we can save more than we could alone. On top of all this is, these services are free! You should not be paying anyone to help you if you’re in trouble in the state of California. It is illegal for anyone to charge you any kind of upfront fee, whether it be for loan modifications, or anything else to do with your home once you’ve gone into default.

One of the things that’s so great about trying to put something like this together, is that no one wants to help you until you’re in trouble. I would like to see people getting help when they ask for it. Most people know they’re headed down a bad path, and they can’t keep it up much longer. Why do the banks not pay attention to your warnings? Why don’t they help you before the foreclosure process begins, saving them money as well as you? I don’t know. I think it’s shear stupidity and too big a business. I would like to see what we can do to help change some of that. For some of you the help comes too late, as it did for me.  If you’re in trouble or about to be, seek help now. It’s free. You don’t have to 1)sign over your house 2)pay someone up front fees 3) pay someone monthly fees to help you. There are so many agencies that only came into existance for this disaster. Take advantage of it and get assistance.

If I may be of service in anyway, don’t hesitate to contact me. All my contact info is here on this site. I would be honored to help. There is a lot of help out there for homeowners in foreclosure needing help.

Evidently the banks have rules based on the “2001 Patriot Act” to use due diligence to find out where the money comes from before it gets deposited. Due to the Patriot Act, if you’ve tried to open a bank account lately, they want to know everything down to the size of your underwear almost.  So foreign dignitaries, etc. have found a way to launder money through our American system, because really, when it comes to buying and selling something, what American doesn’t like “green”?

Tens of millions of dollars pass through our system. Foreigners buy million dollar mansions here, jets there, etc. Due to an exemption given to real estate and escrow agents by the Treasury Dept. in 2002, it makes the real estate market very easy to manipulate with “ill-begotten” funds.

What cracks me up is here we are again, where the rights of others come before those of our own. When I have a buyer for a house, I have to be able to show a complete “paper trail” for where those funds have come from. From this investigation, if you’re a foreign dignitary, etc. all you have to do is have the funds. Nobody seems to care where they come from. Of course if you’re doing a multi-million dollar transaction and most of it is cash, guess what? Yes, cash is still “king”.

One article stated “The report said Nagler worked with a colleague in the insurance industry to provide insurance coverage for Obiang’s 32 motorcycles and cars, which included seven Ferraris, five Bentleys, four Rolls-Royces and two Lamborghinis.” Must be rough, aye?

At least we’re not in it alone this time. Money laundering in real estate is happening with the help of not only real estate agents and escrow officers, but lobbyists, insurance agents, and real estate lawyers. The corruption and greed will never cease to amaze me.

On a different note, I’ll be holding an open house in Mountain View,

2/10/2010

California this Wednesday from 11:30 am to 2:30 pm. For information about this lovely home, visit http://www.whismanhomeforsale.weebly.com

If you have any questions regarding real estate in California, please feel free to contact me. I’d be happy to help.

Now that “they”, the powers that be have decided that all the government issued help hasn’t done what it was meant to do, and they’re afraid of FHA going the way of Fannie Mae and Freddie Mac, we can get ready for some new rules to play the real estate foreclosure game. Real Estate financing is still changing, trying to find another way to keep homeowners in their homes, and put new families into affordable housing.

We all have heard the rumors about FHA being the next entity to go under. On Jan. 20, 2010 FHA announced changes to strengthen and stabilize themselves, while working on several occasions with the National Assoc. of Realtors to keep it a viable resource for homeowners and home buyers. One thing NAR did score was keeping the down payment minimum requirement at the current 3.5 % and allowing the upfront mortgage insurance premium to be financed. What FHA did do was raise the premium from 1.75 to 2.25%.

The other change regarding financing that wasn’t in place before will be that borrowers with a credit score of 580 or below will be required to put down a minimum 10%, instead of the allowed 3.5% for prime borrowers. One thing they did that may open the door to more sellers co-operating with FHA financing, is reduce the seller concessions from 6% to 3%, making it a little more attractive. This would also open the market for home buyers.

FHA also says it’s going to crack down on lenders. In the past, they always say they have their rules, but cannot force the lenders to go by them. The lender may have their own requirements. Now they are planning on implementing a sort of “watch system” to see that their FHA endorsed lenders are actually lending. That is a big score for home buyers.

Tomorrow, Fannie Mae news regarding down payment assistance.

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What the heck?

It’s pretty scary times for real estate out there, and I don’t just mean because of foreclosures and big drops in value causing people to lose all their equity. It’s scary because on one side you have people who still think like it’s 2005, on the other side you have “real estate gurus” coming out of the woodwork teaching creative financing and doing deals like they did 30 yrs. ago, and then in the middle you have the government relaxing standards and doing the same kind of loans that got us here in the first place.

Then I see a question posted in one of the Real Estate forums from someone wanting to know about hiring a Realtor or a real estate attorney to help with the paperwork on a piece of property she’s buying. One of the answers she got was from someone saying to let the other agent do the paperwork, and the title company handle everything. That’s how they bought theirs and there was never a problem. While I concede that there are many deals between people that didn’t use either a Realtor or an attorney that turned out OK, there are many that turned into nightmares. In a transaction described like the one above, who is looking out for her interest? What recourse is she going to have against the seller if she has the seller’s agent write up the contract? Do you think that agent is going to worry as much about taking care of her as he is the person that actually hired him and is paying him? I don’t think so. While we have a code of ethics that states we have to be “fair and honest” in all our dealings, do you think everyone really is?

Then we have the ads on Craig’s List where investors love to advertise to buy homes. One I read yesterday specifically said “No Realtors or attorneys”. Now why do you think that is? I understand they want to save on costs so they don’t want to pay commissions, or a lawyer a fee for looking over the paper work, but do you think it might be also because all their contracts, etc. may be geared their way with no concern for the seller, or buyer, whichever the case may be?

Remember the old saying “Desperate times call for desperate measures”? Don’t be so desperate you make your situation worse instead of better. If you’re in a situation where you need some help with a contract most Realtors will look it over for you for free (like me. LOL) in the hopes of either getting your business in the future or a recommendation to your friends on what a nice person they were. Take advantage of the service.

I have a buyer that has a friend whose a Realtor, but until I came along no one ever went through the contract with him and his wife to know what they were signing. It’s like hiring a stock broker. No one is going to watch out for your money with the same love and care that you are, and the same is true when it comes to getting involved with buying or selling real estate. It’s your job to make sure you are protected. No one is going to cry with you when you get yourself into a mess. All the courts care about is what you signed your name to. It’s up to you to make sure it’s something you can “live” with.

If I can help with any of your real estate needs, please feel free to contact me by phone, email, or leave a comment below. I’d be honored to help in any way I can. Like I said, it’s pretty scary times in real estate right now.

Investing in Foreclosures

Investing in real estate in Silicon Valley is a real possibility right now but there is not much of a margin for error. As prices have fallen and rates are low, it is possible to buy a “rental” property for specifically that reason, to rent it out. This is an opportunity for investors we haven’t seen for many years and they are coming out of the woodwork like crazy. I must get at least 5 e-mails a week from somebody with a new “system” for buying up property. Unfortunately, they’re not “new” and most of them are totally illegal for a licensed real estate professional here in California.

I’m sure most of you have heard that the FDIC is going broke. That FHA is in trouble. Fannie Mae and Freddie Mac have been in trouble. Besides what’s on the market (the MLS) these institutions are dumping properties as well.  It’s amazing some of the bargains you can pick up, although you do have to be careful and do your own due diligence. Make sure you crunch all the numbers. A condo that looks attractive numbers-wise when you figure the mortgage payment, may not be so attractive if you add in a hefty Homeowner’s Association Fee, along with insurance on the unit itself. Remember, the Homeowner’s Association only insures the outside of the unit, nothing inside the 4 walls.

What is amazing to me is that for as much as everyone is saying credit has dried up, etc. many of the same loans that got us where we are today are still out there. Oh sure, for now your credit score has to be a little higher than it used to be, but I’m not sure how long that’s going to last since now even people with A+ credit are going into foreclosure. FHA has laxed a lot of their standards so that their loans are more usable. Not only that but they have a loan program that will help you buy the property and give you “fix up” costs. It’s almost as if they will pay you to fix up your new property. VA still has a no money down adjustable rate mortgage. Some of the conventional lenders are willing to bend criteria a bit to get properties off their books.

The one thing FHA has tightened up on is “flipping”. They have a “no flipping rule” that says if you buy a property using an FHA loan, you may not sell it for at least 90 days. Now to me, if you move into a property you’ve bought, fix it up while you live in it, which is not at all unusual for investors, and you’re flipping houses every 91 days, you can still do quite well. You have to pay to live somewhere anyway. Why not the property you’re buying to fix up and sell? Not only that, but the lenders look much more kindly on properties that are going to be owner occupied.

I realize it’s pretty much a feeding frenzy out there, but if you’re going to invest, invest smart. The “gurus” of real estate don’t talk about the properties they get stuck with, or the holding costs, or the bad tenants. They talk about the upside without the downside. I’m all for investing in real estate to build your wealth, but be prepared. It’s not all the bed of money it’s cracked up to be. And if you think you can go negative cash flow on a house because it’s only $50 or so, think about how much that turns into per month if you do 10 of them, or 100.

If I can help you with any of your real estate needs, whether looking for a bargain on your first home, looking to invest in a rental property, or selling your home for the best price in a down market, feel free to contact me or leave a comment below.