Archive for March, 2012

Though foreclosures have been in the news for quite a while, the issue has received even more media attention in 2011, and probably will continue to dominate the financial headlines well into next year.

According to new RealtyTrac data, lender delays in processing home-loan defaults are slowing down the foreclosure process across the U.S. Compared to last year, average time from initial bank notice to complete seizure is now 318 days, as compared to 277 days a year ago.

Foreclosure filings are also declining. From the third and fourth quarter of 2010 to the first and second quarter of  2011, the national average for  foreclosure filings declined by 25 percent.

The drop in filings is temporarily inflating home prices. As Greg Hebner of Community Rebuild Partners states, “You’re seeing an artificial floor. If supply flooded the market without all the delays, you’d see another 10 percent price drop.” However, Washington State is bucking the trend. A report on King and Snohomish County foreclosure filings compiled by Fairplay Foreclosures shows rates here have also declined, but not as rapidly.

Though RealtyTrac shows national filings are down 25 percent, King County’s only dropped 20 percent during the same period. Snohomish County’s are down by just 14 percent. Compared to the national average, these counties have more properties in the foreclosure process, many of which are expected to come up for auction soon. “If you’re considering investing in foreclosures, this is a prime time to get your ducks in a row,” says Bill Widmer, CEO of Fairplay Foreclosures. “There’s a backlog of properties in Washington that will make it to auction sooner rather than later.” He adds that it’s also a good time to invest in traditional real estate. “As compared to much of the U.S., prices here are steadier and more accurate.”

As a full-service real estate investment firm, Fairplay is dedicated to helping all levels of investors succeed in both the traditional and distressed real estate market. It offers free online tools, personal mentorship and an exclusive database of properties, which is updated constantly to reflect any change in status of those properties. “Our goal is to bring these outstanding investment opportunities to anyone willing to take the time to learn,” Bill Widmer, CEO of Fairplay Foreclosures, says. “We provide a number of resources they can use to become savvy, successful investors. And, let’s not forget how important investors are to the recovery of the market.”

Every Thursday, Fairplay holds new investor workshops to introduce people to the basics of foreclosure investing.  Afterward, they hold their weekly Investor Café, which meets over drinks and appetizers to discuss investment strategies, home improvement, financing options and “featured properties,” selected for their excellent investment potential.

All services are free to members. Fairplay only charges a fee when they purchase a property at auction. If they choose, members can also take advantage of optional services, which include lending through Fairplay Financing, which offers competitive traditional mortgages as well as Bridge 3.0 an easy, streamlined approach to purchasing properties at auction with cash from a bridge loan. Fairplay Financing is available for any property, even those acquired through other real estate companies.

Fairplay represents clients in Washington and Oregon, with plans to move into Los Angeles County in California, Clark County in Nevada, and Maricopa County in Arizona. We encourage anyone with any interest in distressed properties to visit www.FAIRPLAY.com to sign up for a free membership, or attend one of our Thursday workshops, and prepare yourself for opportunities that will keep coming up, now and well into the future.

About the author…
Shane Gallagher is one of the co-founders of Fairplay Foreclosures and is responsible for the sales, marketing and growth of the company. His background in the real estate and financial services industries includes multiple awards and an unbroken track record of sales and revenue increases. Respected by customers and colleagues alike, Shane is known for his integrity, follow through and
commitment to excellence, which he brings to his position at Fairplay.

“REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

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In today’s market for residential property, foreclosures are a significant source of potential investments for people who anticipate buying low, improving the property and then selling high(er).  So the investor attends the trustee’s sale, bids on the property and if successful in the auction, receives a trustee’s deed.  Is the investor then free to enter the property, make the changes that the plan calls for and sell the house at a profit?  What if a tenant is occupying the property?

An investor who buys at the trustee’s sale is entitled to possession of the property twenty days after the sale, as to anyone except tenants who were in possession of the property at the time of the trustee’s sale.

In order to gain possession against tenants who were in possession of the property at the time of the trustee’s sale, the investor who bought the property must give the tenants a special statutory written notice saying that the tenants must vacate the property within sixty days after receiving the notice.  First, it must be provided by regular mail and second by either certified or registered mail, with return receipt requested.  The notice must follow required wording in the statute.

If the tenants do not leave the property by the end of the sixty day period after the sending of the notice, then the investor must begin an unlawful detainer case against them in court in order to obtain an eviction.  The unlawful detainer case requires a summons and complaint which must be served on the tenants and the tenants must be given time to respond, usually at least seven days.  The tenants must be named in the summons and complaint as the defendants in the lawsuit.  The investor must ask the court for a writ of restitution of the property, and if the tenant does not contest the complaint, the writ can be issued and the sheriff will then execute the writ and physically evict the tenants.  The writ of restitution is the document that directs the sheriff to restore possession of the property to the purchaser.  If the tenant does contest the complaint then the court may order the issuance of a writ of restitution after the trial.

The investor also has the right to offer a tenant that was in possession of the property at the time of the trustee’s sale a new rental agreement.  If the investor does this, what happens to the tenant’s deposit that was given to the previous owner whose interest was foreclosed?  Under the Residential Landlord Tenant Act, the tenant’s deposit is to be transferred from the foreclosed landlord’s trust account to a trust account of the new landlord.

Investors who plan their holding periods to be approximately ninety days in order to allow for all necessary rehab work to be done and the property marketed and sold will be pinched for time.  It may take almost the entire ninety days for the investor to gain possession of the property if it is occupied by tenants at the time of the trustee’s sale.  Technically the tenant who was in possession at the time of the trustee’s sale should be paying the rent to the investor who bought at the trustee’s sale, until the tenant leaves the premises.

Some investors use a “cash for keys” approach to shorten the period they must wait to begin their rehab work.  Under this technique the investor approaches the tenant cooperatively and offers to pay some amount such as five hundred dollars if the tenant agrees to move out in two weeks rather than forcing the investor to go through the statutory notice procedure and file an unlawful detainer case.  The trustee in the foreclosure should have notified the tenant that the foreclosure sale would be occurring and so the tenant should not be surprised at being asked to move, and sometimes this approach can be successful in helping the investor’s schedule to remain on track.  The foregoing is intended for instruction only and should not be considered as legal advice.

About the author…
Doug Owens practices real estate law and general business law from his office in Seattle.   He offers a 10% discount for REAPS members and he can be reached at (206)985-6679 or [email protected] ?

“REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

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An innovative business model and focus on bridge financing has put Fairplay on the fast track. Inc. Magazine recognized the tremendous growth of this Seattle-area company on its 5000 List, ranking Fairplay in the top 8 percent of the nation’s fastest growing companies.

Between 2007 and 2010, Fairplay achieved a phenomenal 857 percent revenue growth, which placed it in the upper echelons of real estate firms, including those that specialize in commercial and residential real estate on a nationwide basis.

Fairplay’s financing services is the key factor contributing to this recognition. Inc. Magazine credited Fairplay as one of the “engines of the economy.” But while other companies on the list contributed to job growth, Fairplay has also contributed to the financial success of its clients, many of them regular people looking for a good investment.

Fairplay is able to offer quick and simple bridge financing to clients interested in
purchasing distressed properties at auction, which requires cash on the spot. Bridge loans are an important part of the process, because they can help the investor realize greater potential rewards with the same seed capital, using the power of leverage.

“Customers often come to us with cash from an inheritance or settlement, looking to buy a property at auction,” says Bill Widmer. “By using that cash as down payments for bridge loans, rather than sinking all of it into one investment, they can purchase multiple properties, diversifying their risk and increasing potential cash-on-cash return.”

Bridge loans make it possible for investors to purchase multiple properties, so if one ends up being sold at a loss, the profit from the others could make up the difference. The potential risk in investing in five properties, for example, is less than investing in just one. In the meantime, the borrower can write off the interest and depreciation costs.

Fairplay also offers traditional mortgages, which come with a much lower interest rate. After the client owns the property outright, Fairplay can immediately begin the refinance process so the bridge loan can be paid off quickly.

In addition to lending services, Fairplay also offers its members comprehensive online and personal resources to help bring even novice investors up to speed quickly, so they can invest with knowledge and confidence. They include an exclusive database with both distressed and traditional property listings, which tracks the distressed properties as they move through the foreclosure process, as well as weekly investor meetings and one-on-one coaching. Fairplay representatives will even accompany clients to the foreclosure auction to make sure everything goes smoothly.

“We started Fairplay with the goal of opening up the real estate market to everybody , ” stated Bill Widmer. “We sought to simplify the confusing world of distressed properties by giving people everything they need — from online tools to personal coaching to financing  — to make the same type of smart investments as those of us with years in the business.” If Inc.’s ranking is any indication, Fairplay’s goal has been achieved.

All services are free to members. Fairplay only collects a fee upon purchase of a
property. Fairplay represents clients in Washington and Oregon, with plans to move into selected counties in California, Nevada and Arizona. We invite you to sign up for free on our website (fairplay.com) and attend one of our new investor workshops for a solid introduction to the world of real estate investing.

After the workshop, stick around for our Investor Café, which meets weekly over drinks and appetizers to discuss investment strategies, financing options and more. We also present
“featured properties” chosen by our analysts for their excellent investment potential. It’s a good way to check out one of America’s most promising young companies and come away
with some promising investment opportunities.

About the author:
Ian Morell is a seasoned financial analyst and mortgage expert. Previous to joining Fairplay Financial in 2008, Ian served as both a loan officer and branch manager in the mortgage industry for nine years. As our fund manager, Ian brings his decades of experience to ensure our clients’ integrity and Fairplay’s continued financial strength in the open markets.

“REAPS is the oldest – and largest – Professional Association for the real estate investor this side of the Mississippi. We provide education and networking resources for real estate investors, those who want to be investors and anyone who provides value to our members. Our goals are to motivate and support our members and guests through education, discussion, legislative action and networking. We host over 40 live events a year around Puget Sound and they are all open to the public. If you’ve never attended one of our meetings, just email our office at [email protected] and be our guest for free!”

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