Investor says only one road to foreclosure profit

Written by jordan on . Posted in Blog

by Matt Padilla, Register Reporter and Blogger

I quizzed Lee about the mortgage market, his business, and his prediction for a housing rebound. I have a feeling this interview will appeal more to housing bears than bulls.

Q. Foreclosures in Orange County have broken all the records set in the housing slump of the early 1990s. When is this bloodbath going to end?

A. I’m projecting that the market will start stabilizing in four to five years from now – 2012-2013. That’s not to say home prices will be back to their peak, which could take up to eight years. I base this opinion on proprietary information Foreclosure Trackers has at its disposal. Banks turn to Foreclosure Trackers as the first line of defense because we are defaulted mortgage experts and buyers. Banks send their portfolios to us for evaluation every week before anyone else in the nation. Our company is on the “inside track” with the banks and often times receives information first before the “outside” track – such as the government, title companies, investment firms, lawyers, real estate firms, and even competitor foreclosure sites.

Q. With so many foreclosures, how is an investor supposed to make money buying a property in some stage of foreclosure? As the housing bears like to say, isn’t buying a foreclosure now akin to catching a falling knife?

A. Precisely. There are really five main strategies for investing in foreclosures. But four of the five rely on equity, which doesn’t really exist in today’s market. An equity purchase, foreclosure auction, short sale or REO purchase can all be profitable, wise investment strategies – just not in today’s market. There is only one strategy that makes sense in this market and that’s defaulted and performing mortgage (notes) investing.

At Foreclosure Trackers free seminars, we teach investors how to “buy the loan, not the home” and “work out, not kick out” strategies for defaulted mortgages and note investing. As I said, there’s no equity in properties today. By buying the loan at a substantial discount, we create equity and we are able to turn a profit on the property while helping Americans to save their homes.

This is an example of how it works: a bank may hold a note for a defaulted 1st mortgage in the amount of $800,000. The Broker Price Opinion may state the value of the property is $600,000. This property is over-encumbered or upside down. Foreclosure Trackers buys the note for $325,000. We then deploy our “work out, not kick out” strategy of working with the homeowner and reduce the principal balance to $480,000. The homeowner gets a principal reduction of $320,000, and is able to handle their mortgage payments going forward.

We’re doing our best to get the word out so the movement will start to make a real difference, both to those looking to earn great profits and those who want to help save America one home at a time.

CLICK HERE to view full article

Apartment Building Security

Written by jordan on . Posted in Blog

By Robert Levitt

We are our “brothers keepers”. If we don’t look out for others, who will look out for us? This is especially true when it comes to crime, whether it be potential assaults or property crimes (theft or vandalism). Know who your neighbors are and they should know you. Not only does it make for a better community, but it is also better security to know who should be on the premises.
Each of us can do our bit to prevent crime before it happens by being alert and following the following suggestions throughout your building. Learn these tips and make them part of your everyday habits and teach them to your children.

Building Entry
Suspicious or unknown people trying to get into the building should be referred to the building superintendent, management or security. If you do not want to talk to them, then let the building superintendent, management or security know about these people immediately.

NEVER allow strangers to enter the building as you are leaving or entering any apartment building. Be aware of anybody hanging around the door who looks disinterested but makes a dash to hold open the door after it has been unlocked. Make sure all outer doors are kept locked at all times.

DO NOT buzz anyone you don’t know into the building. Criminals have been known to randomly buzz people’s apartments saying it is a pizza delivery and another tenant is not answering so can you please let them in.

List only your first initial along with your last name in the lobby tenant directory.

Do not let canvassers into your building. They do not have the right to be in the building unless there are there for government elections, or for organizing tenants into a tenants’ association, where under the applicable laws, these people do have a right to be in the building.

If your apartment doors do not have a “peephole”, have one added.

Also, criminals, or people you just don’t want to bother you, can use the peephole in reverse. They can look in from the outside to see if the light coming through is changing and (if the quality of the image is good enough even if it is very small,) if it appears something is walking across the room, to indicate someone is in the apartment even if you are not answering. The solution to this is very simple. Take a small flap of leather, plastic or other opaque material, and affix it on the inside of your door above the peephole with a small short screw or even a thumbtack so that it covers the peephole. I used a piece of a new plastic watchstrap that I replaced on a friends watch for the job. That way nobody on the outside will ever see any light coming through it; it will always be dark. When there is somebody knocking at your door and you want to look out, wait until your face is close to the door (to block the light) then rotate the flap out of the way to look out, and when you are finished before moving away from the door, rotate the flap back; All the person on the outside will see is darkness through the peephole and will not know you just checked out that they were there.

Ensure that a new lock has been installed when your tenant moves into an apartment so that a former tenant can not gain entry.

Replace the entry lock from the common hallway into your apartment if it is one where the keyhole is in the center of the doorknob. These can be easily defeated. Replace them with deadbolt locks (preferable with minimum one-inch/25mm long bolts). Deadbolt locks are ones with rectangular bolts that go into the doorframe when locked.

“Jimmy plates” are a scam. These are pieces of metal which fraud artists claim will prevent criminals from sticking in a credit card between your door and frame to enter your apartment. This cannot be done to a rectangular deadbolt. These “installers” are the criminals. They often want to charge you $10 to $20 for each installation. (Think about it. If they can get 200 tenants in a building to pay them $10 each for installing 10 cents worth of useless metal, they can make almost $2000 off of just one building.) Jimmy plates are useless.
Legitimate locksmiths can do things to improve the security of your doors. When installing improved locks, they can securely install metal sheeting that wraps around the front, side and back of the door, with a hole where the lock goes through. These plates are meant to reinforce wooden doors around the lock. If you have a metal frame for your door it is unlikely you need anything to improve it. If you have a wooden door frame, a locksmith can examine it to make sure it is solid and tight fitting, and if not, they can remove the wood molding to add extra wood inside the frame, and then attach the strike plate (the metal plate added to wooden door frames where the dead bolt goes through when locked) with extra long screws (2.5 inch/6cm,) before putting back the moldings. Of course the locksmith may change the lock or add a second one with a higher security lock.

If you lose your keys, you should replace your lock.
You may want to install an alarm system in your apartment.

Windows and sliding doors
You may like to keep your windows and sliding door open. Criminals also like you to do this, especially if you are in a basement, first floor or a second floor apartment.
You can limit how much your windows (for ones that slide sideways,) and sliding doors open, to an amount less than a person can fit through, by putting a piece of broomstick or other object of similar size, cut to the right length, into the sliding track. For older upwardly sliding windows in wooden frames, you can drive a large nail into the frame at a level above the window to limit its travel to just enough of a crack to let in the air, then remove the nail and then push it back into the hole that remains (you don’t want this to be permanent in case of a fire where you may need to get out of the window yourself).

Look to see who is in the elevator before entering.
DO NOT enter the elevator if you do not feel comfortable; Wait for the next one.
When in the elevator, stand beside the control panel and know where the emergency alarm button is.
If a suspicious person enters the elevator, exit before the door closes.

Parking garages
If your underground parking garage is too dark, contact your municipal (city) building inspector, as many cities have building standards as to the minimum brightness of underground garages.

ALWAYS be aware of your surroundings.
If there are suspicious characters in the garage that arouse your concern, go back. If you are entering the garage from the apartment, go back quickly into the building and lock the door behind you, and if you are coming into the garage with your car drive your vehicle out of the garage. In both cases let the superintendent, building management or security know about it immediately.
Do not loiter in the garage. When going to your car, have your keys ready in your hand with the correct key next to your index finger, which will enable you to enter your vehicle quickly, plus keys can be used as a weapon to poke an attacker in the face with to defend yourself if necessary. When leaving your car, do the same.
Always check the inside of your vehicle through the car window before entering.
Always leave your automobile locked, and remove any valuables.

The Telephone
Tell you children not to let callers know if they are home alone, unless they are the ones making a call and it is to the Police, Fire Department or 911.
Don’t have a message on your telephone answering machine that lets callers know no one is at home, that there is only one person living there, or that you are on holidays. Instead say that “we are “presently not available to come to the phone”; That way a caller will not know that you live alone or that you are out, only that you and others may be busy with something else but may be there. If you are going away on holidays, you will have to let friends and family know that you are away, so they do not keep calling the answering machine.

Going on vacation
Inform a trustworthy neighbor of when you are leaving and when you will be back. Have them pick up any items such as junk mail left outside of your door or in your mailbox, so there will be no visible sign left for criminals to know you are away.
Cancel all deliveries for that period; Thing like the newspaper.
Use timers to turn on and off lights and/or radios at various times to disguise your absence.
DO NOT leave a note to inform people that you are not home.

If you see one or more strangers removing items out of a neighbor’s apartment without the neighbor being present CALL 911.
When you arrive home, if you believe a crime may have occurred, do not enter. The criminal(s) may still be in the apartment. Use a neighbor’s telephone and call the police.

If a crime has occurred, also use a cell phone or a neighbor’s telephone to call the police. DO NOT touch anything or clean up until the police have inspected the apartment or vehicle for evidence.

Write down the descriptions of any suspicious people and the license number of any suspicious vehicles.

You should also keep a list of all your valuables in case a crime ever does occur.

The economy of California

Written by jordan on . Posted in Blog

Click Here to view a video from Forbes on the current economy of California.

The video states that the economy is definitely hit some bumps, but still is growing more than expected and promises growth in the near future. Exports are up, agriculture is up and the big tech industry is still putting a lot of money into R&D, and post not cutbacks in spending.

The housing market is hurt, which anybody could tell, but will not turn into a waste land, since 70% of California home owners do not have sub-prime mortgages, and he states that the “bottom fishers” are picking up these properties at a high rate. San Fransisco and San Jose still post high home prices.

Some disturbing news is that lot of jobs are being lost in the home building and financial sector in southern California, but is being offset by job growth in other areas in California.

No rate cut! That’s the bet on Fed

Written by jordan on . Posted in Blog

Here is an article from Jon Lasner (O.C. Register) on Real Estate about the forecast of rate cuts in the coming year.

Economist Mark Schniepp of California Forecast: They’ll hold steady. Economy looking more stable than two months ago. Dollar is strengthening, core inflation is reasonable. Raising rates would risk deepening the havoc in housing. When will they raise again? When oil prices are clearly in decline. When mortgage rates are a little lower. When there is less risk that raising rates will produce increases in the indexes that adjust adjustable mortgages. So , not this year.

O.C. Treasurer Chriss Street: The Fed will stand pat on Wednesday. The real economy is already in much worse shape than is being reported and this is early in the down business cycle. The case for raising rates is the obvious piece of the iceberg you can see. Inflation is trending to the 4.5% or higher level. With the discount rate set at the 2% level, that means the real net interest rates are actually “negative” by about 2.5%. Present this to an accountant and the answer is clear that rates need to rise at least 50% of the spread to slow the economy and create enough “slack” to slow the economy down. Unemployment appears to be headed to 6% or higher. This is the big iceberg that you and the Fed should be very afraid of.

Click Here to view the full article.


Written by jordan on . Posted in Blog

By John C. Maciha

Meeting, Welcoming & Leasing To
Prospective Residents

How a prospect is greeted when they walk through the door of the leasing office will often determine whether or not they lease. The greeting is the prospect’s initial first-hand impression of the community and the staff. Therefore, it is important that the greeting be carried out properly.
1. Tools for a Warm Welcome — In Person:
• Prospects must always be greeted with a smile. A smile is contagious and is the first step towards establishing good rapport.
• Leasing Consultants must always stand up and walk around the desk to greet the prospective resident. This tells the prospect that he/she is important and makes them feel welcome.
• Eye Contact must be established immediately. Looking directly at the prospect indicates that the Leasing Consultant is giving him/her full, undivided attention.
• When greeting a prospect, the Leasing Consultant should always introduce herself/himself and obtain the prospect’s name. A handshake may or may not be appropriate and the Leasing Consultant should make this determination. Once the person’s name is obtained, it should be used throughout the presentation.
• Enthusiasm should be a part of every greeting. This helps to create a positive introduction and serves to immediately interest the prospect in both the Leasing Consultant and the community.
2. Tools for a Warm Welcome — On the Phone: Your Voice Smiles! Your Heart Cares!
Often, the first impression a prospective resident receives of the property is on the telephone. Therefore, it is important that the telephone is always answered in a friendly enthusiastic manner. The telephone should always be answered in the following manner:
“Hello, ___________________ Apartments.
This is _____________________. How may I help you?”
If the caller is a prospective resident, the following will help guide you through the call:
• Ask for the caller’s name.
• Identify the size of apartment, date needed and number of people to occupy the apartment.
• Ask if they have any special needs for the apartment.
• Ask if they have pets.
• Describe the apartment’s benefits and the property’s amenities.
• Describe the community.
• Don’t mention price. If they ask, tell them what we pay for (utilities, cable, etc.) and then tell them the price. Never give the price before describing the benefits.
• Invite them to visit the property.
• Set an appointment time.
• Give clear directions to the property. It is important to know how to give directions from different areas; i.e., “If you will be coming North on the 405, or South on the 5, etc.”
• Thank them for calling and give a friendly good-bye.
It is important to control the conversation, be enthusiastic and make an appointment! You may find it helpful to have guest cards by the telephone. As you ask the questions above, fill out the guest card. When the prospective resident comes in for the appointment, you will be ready with a guest card already filled out. This gives the resident a welcome feeling.

1. Purpose:
• A sales presentation should never be made without first qualifying the prospect. Qualifying is necessary in order to determine the prospect’s needs and wants. This will enable the sales presentation to be directed towards those needs.
• Proper qualifying enables the Leasing Consultant to develop a rapport with the prospect and determine his/her buying signals. The sales presentation can then be planned around those specific buying signals.
• Identifying the prospect’s specific needs allows the available apartments to be narrowed down to one. It is important to create a sense of urgency.
• Qualifying enables the closing process to begin. Closing is a continuous process which begins as soon as the prospect walks in the door.
Remember, the worn out be true phrase, “a person’s home is their castle; accordingly, everything you do as you meet, welcome and lease to your prospective resident should center on making that person feel that indeed, you can provide that castle that theywill call their home. Y
Source: The Operational Apartment Guide & Desktop Reference By John C. Maciha & Associates • Copyright © 1995

John Maciha is a former vice president of The Irvine Company and now serves as a consultant in the area of asset management. He can be reached at (714) 542-9224.

California: Most Popular State To Move Into

Written by jordan on . Posted in Blog reveals a study showing the moving trends, and where everybody is heading.

“According to the survey results, California and Texas are the two most
popular states for people to move in 2007, based on interstate and intrastate
moves combined. Surveys over the past decade have shown that California (the
largest state by population) has always ranked first in terms of destination
state for people changing residences. This trend continues, despite the
growing mortgage crisis, which has heavily affected many areas of California.
The effect of declining home values combined with the high cost of living has
not kept consumers away. Only 43 percent of people moving to a new location
in California currently live in California; thus 57 percent of all moves to
California are people moving from other states.”

Click here to see full report from

Housing: It’ll get worse

Written by jordan on . Posted in Blog

By Les Christie, staff writer
Jun 12th, 2008

Hard hit cities like Sacramento, Phoenix and Las Vegas are set for more steep losses. Some real estate experts are bracing for price drops of as much as 50%.

NEW YORK ( — With home prices plunging by more than 30% in some markets, bargain-hunters are ready to pounce.

But it may pay for buyers to wait. Many housing experts say that the worst-hit metro areas have even farther to fall, and could see total drops of as much as 50%.

“The housing boom was unprecedented in U.S. history,” said Michael Youngblood, a portfolio analyst with FBR Investment Management, “and the correction will be as well.”

Click here for full article

Toxic Black Mold

Written by jordan on . Posted in Blog

by Clark “Sparky” Beardslee

The Basics
Mold spores are everywhere and cannot be avoided. They float in through your open windows and doors, or come inside by riding on your clothing or your pets. Real problems in homes and buildings rarely occur unless there has been intense flooding, usually in basements, sometimes from leaky roofs, or where there has been an extensive plumbing problem.
If spores land on a moist or damp surface, usually in a poorly lit area — they can grow.
So the key to mold control is moisture control. Water-damaged areas must be dried within twenty-four to forty-eight hours to prevent mold and mildew growth.

Health Risk
Most people have a natural immunity to antigens present in mold, but some are more sensitive than others – and a moldy home is not a healthy home. At-risk individuals are mostly infants, the aged and asthmatics being treated with steroids. The highest level of danger is for those with pre-existing respiratory diseases such as tuberculosis or cystic fibrosis and those undergoing chemotherapy or other treatments that adversely affect the immune system.
The most common health concerns include symptoms similar to hay fever. Others may experience respiratory difficulties or skin and eye irritations. There are some reported extreme reactions, too.
According to the Centers for Disease Control and Prevention, determining the level of health risk is mostly a factor of looking at the individual and assessing whether they fall into one of the risk groups. However, exposure to mold is not a desirable living condition and it should be removed, just like you would also throw away moldy bread without eating it.

The Cleveland Incident & the CDC
There has been a widely reported case regarding the deaths of some Cleveland infants between 1993 and 1994. Some articles say eight infants died. Other articles say ten died. One article even says that forty-five died.

The cause of death, according to these articles, is that the babies died of acute idiopathic pulmonary hemorrhage that was traced back to water damage in their homes and the subsequent infestation by the mold species Stachybotrys ChartarumIn.
The articles also say that the cause of death was determined in a study done by The Centers for Disease Control and Prevention.

The CDC (Centers for Disease Control and Prevention) web site says something different. They say that “this remains to be proved” and that no one really knows what causes acute idiopathic pulmonary hemorrhage.
The cause of death may have been the mold, as the articles claim. However, the claim that the CDC identified that as the cause of death is not true. So, to paraphrase Fox Mulder of the X-Files, “the truth is still out there.”

Differing Opinions and Lawyers
There is some disagreement on the seriousness of the mold issue. Some say it is an expanding problem because modern homes — with air conditioning, heating, and energy-saving insulation – are much more airtight and susceptible to infestation than homes of the past.
Others say the problem has always existed and the current frenzy is an invention by attorneys so they can mine this latest “pot of gold” with expensive lawsuits. It has become a major profit center for attorneys, inspectors, laboratories, and test-kit developers.
As one lawyer states in a recent Time magazine article, “For science to prove something, it has to be 100% certain. In a civil lawsuit, it only has to be proved 51%.”

Identifying Molds
Some molds can be identified by their growth patterns, but that requires an expert. Even experts make errors based on a visual inspection, because growth patterns of different molds can appear similar to one another. To correctly identify a mold species requires a sample that can be examined in a laboratory by an experienced technician using a microscope.
The most important thing is to remove the mold.

However, if someone has a health problem that may be caused by the mold, you may want to identify it. Wearing rubber gloves, take a piece of scotch tape, lift some spore samples from the mold, and seal it in a Ziploc bag. Then you have something you can take to your doctor or a laboratory.

There are lots of mold-testing laboratories available on the web. It’s become a “hot” industry in the last couple of years.
The most common indoor molds are Cladosporium, Penicillium, Aspergillus, and Alternaria. Some rarer molds, such as Stachybotrys, may be more dangerous but its spores are only found in two to five percent of homes and only a small percentage of those homes provide an environment for growth.

Mold Growth and Cleanup
Mold flourishes in dark, damp places that are poorly ventilated and in areas where water collects. This provides an environment for ever-present dormant mold spores to collect and grow. The first step in mold clean-up is to eliminate the source of moisture.
No one should attempt to clean mold or mildew without wearing rubber gloves. Sensitive people should wear a dust-resistant facemask or carbon filter respirator.

If the mold patch is less than a foot square, it can be removed with a chlorine bleach solution (one cup of bleach in one gallon of water). Never mix bleach with other cleaning materials, period. It is difficult to tell what cleaning materials contain ammonia, and bleach mixed with ammonia creates a toxic gas.
The mold should come off with simple gentle scrubbing. Do not scrape a mold that has dried because this could release mold spores into the air, where they can circulate through your air-conditioning or heating system and land elsewhere.
Once you have washed away the mold, the area should be dried completely. Make sure to remove or repair any sources of excess water, such as leaky plumbing or a faulty roof.
Absorbent materials (such as ceiling tiles and carpet) that become moldy may have to be replaced.
If the moldy area is larger than two feet square, you should seek professional assistance or call your local government health agency for guidance.

Conclusions & Homeowners Insurance
Once a mold appears, all it generally takes to prevent health problems is a little bit of bleach and water – and maybe a blow dryer. There are exceptions, however – and those exceptions should be treated seriously.
When mold growth is massive or hidden behind walls, professional help is required. Clean-up costs can range between $10,000 and $50,000 for a moderately sized home.
One result of the recent trends toward lawsuits involving black mold is increased homeowner’s insurance premiums. Another effect is that insurance providers are asking states to allow them to exclude mold coverage in policies.

The Benefits of a Walkable Neighborhood

Written by jordan on . Posted in Blog

Here is an article from wisebread that weighs in on the benefit of a walkable community. I am always fascinated at the idea about being about to walk to school, work, the grocery store, nightlife, etc. from home; yet I live in Orange County, and there is not that many communities that allow this. Yet with the rise of reurbanization and new apartment complexes located nearer to conveniences, this could be the future, and help our wallets with less gas being churned.

“When I lived in Honolulu, Hawaii, I walked practically everywhere because my family did not have a car. The grocery store was a block away, and the beach was less than a mile south. Nearly everything we needed was within walking distance because Honolulu is a fairly densely populated city. Before my family moved to California, we heard from my aunt that not having a car in California is like not having legs because you have to drive almost everywhere. Unfortunately, this is certainly true in the exurbs of Southern California and many suburbs in the Bay Area. As a result, we now drive almost everywhere.

I think there are quite a few benefits to live in a highly walkable neighborhood. One obvious reason is that you can save quite a bit of money and time on transportation. When I visited my inlaws in Southern California last winter, I felt like we spent hours and hours inside of cars. Most of the trips were small errands like going to the grocery store or getting lunch, but they seemed to take a very long time. When I told an aunt that my commute to work each day is 9 miles each way she said to me, “That’s not a commute! That’s going to the grocery store!” Understandably, it does not make sense to walk when the nearest grocer is so far away, but the cost of driving so much really adds up especially when gas is topping $4.50 a gallon here in California.”

Click here for full article and discussion

Where are they heading?

Written by jordan on . Posted in Blog

This week the news certainly has been confirming our worst fears as homeowners; thousands are left with no other option than to give up their homes, and pack up all their dreams of living in their own homes in paradise (sunny, southern California). With the largest drop in home prices in the nation, and with foreclosures at its record, the California real estate market does not hopeful for the next year, and maybe even longer (too many are predicting too many things to be sure).

But where are all these people going? Are they packing up, leaving town, and looking for new markets to enter that are easier on the wallet, such as the mid-west. Or are their families into apartments? Could it be a mixture of both?

California, on average, adds over 25,000 in population each year; but will that change now due to our drastic crunch (only time will tell). Will there be more urban developments, allowing families to move into rental units that are closer to their jobs, lessening the strain on gas, even though that means not owning their dream house. Maybe in this economy it is their only hope to live in the Greater Los Angeles area, where so many people call home and find work to bill pay the bills.

I have been looking in the re urbanization of Orange County (since that is where I live) and I feel that there is a lot of room for improvement. More apartment units that are in reasonable walking distance to local food markets, jobs, and entertainment. A better transportation system could be implemented. I’m not saying to imitate Europe, but there is so really good models to benefit from. More cost-efficient ways to live that help our wallets, and that help our environment.

Today’s market may not be the best for home builders-just check the financial news and you will see their predicament. Yet it may be the time for apartment owners/developers to seize the opportunity and make living more affordable for those who can not afford a house in the suburbs, and 200 bucks on gas a week to drive to work.

If you have any thoughts about the apartment housing industry, or the real estate market, send me a comment, and let us know what you are thinking?