Промышленный лизинг Промышленный лизинг  Методички 

1 2 3 4 5 6 7 8 9 10 [ 11 ] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90

What about real estate lenders who loan 90 percent or 95 percent of the retail value? Wont that put them in jeopardy in the event of a default?

Thats where private mortgage insurance (PMI) companies step in. For an insurance premium paid by the borrower, the private mortgage insurer will insure the real estate lender for any defaults above an 80 percent loan-to-value ratio.

Lets say the borrower received a 90 percent loan from the lender ($180,000) and made only a 10 percent down payment ($20,000) on the same $200,000 property.

Loan-to-Value Ratio

Appraised Value $200,000

Loan Percentage X 90%

Loan Amount $180,000

With the same $10,000 borrower default, the lender still has $10,000 of protection.

Lender Protection

Appraised Value $200,000

Maximum Loan Amount - $180,000

Default Amount - $ 10,000

Lender Protection $ 10,000

Lender Loss 0

Even if the borrower defaulted in the amount of $25,000, the PMI would pick up the additional $5,000 beyond the borrowers $20,000 equity (down payment).

Private Mortgage Insurance

Appraised Value $200,000

Maximum Loan Amount - $180,000 Default Amount - $ 25,000

Lender Protection ($ 5,000)

Private Mortgage Insurance $ 5,000 Lender Loss 0

Reason 2: Buying from a Wholesale Seller

It is important to identify who sells wholesale property. Once you know who the sellers are, you can prepare your strategy to



achieve the best results. There are only three sellers of foreclosure property.

Two of the sellers have a big financial stake in the property. One of the sellers has no financial stake in the property. Two of the sellers are professional sellers. One of the sellers is not.

Buying from the Seller in Distress Sellers in distress have a big financial stake in the property. Not only will it destroy their credit if their property goes to a foreclosure sale, but they will lose all their equity in the property. And, obviously, the seller in distress is not a professional seller.

Well use some of the numbers we have already shown to illustrate our point. The appraised value of the property is $200,000. The loan amount on the property is $160,000. The borrower is in default in the amount of $10,000. The borrowers equity position before the default is $40,000.

Where does the borrowers $10,000 default amount come out of? As we have already seen, the $10,000 default amount comes out of the borrowers $40,000 equity. The further the borrower gets behind in their mortgage payments, the more of the borrowers remaining equity is eaten up.

Your mission with sellers in distress is to show them how to avoid the foreclosure sale. We will spend a chapter teaching you how to do this (see Chapter 7).You are going to become an educator to the seller in distress. You will make an appointment with them. At the appointment you will educate them on their eight foreclosure options.

For their sake, we hope that you will be able to get the information to them before it is too late. One of the foreclosure options you will present is for them to sell you their equity. You can only pay them a wholesale price. They will get some of their equity back if they work with you. If the property goes to the foreclosure sale, they will get none of their equity back.

You might offer them $9,000 for their remaining $30,000 equity. Remember, you will still have to come up with an additional $10,000 to make up the default to the lender. You would now have $19,000 in the property ($9,000 to the seller and $10,000 to the lender).

You would also get the property subject to the $160,000 loan.Your total in the property would be $179,000. The property is worth $200,000.You have a $21,000 profit potential, which is more than a 100 percent return on your $19,000 investment.



Profit Potential

Loan Amount

$160,000

Buy Sellers Equity

$ 9,000

Default Amount

$ 10,000

Amount in Property

$179,000

Appraised Value

$200,000

Profit Potential

$ 21,000

$21,000 -v- $19,000

= 111%

Buying at the Foreclosure Sale Foreclosure sales are conducted at a public auction. The highest bidder gets the property. The seller at the foreclosure sale is a trustee or representative of the lender. So the seller at the foreclosure sale is really like an auctioneer. They are professional sellers. Yet they do not have any financial stake in the property. They are just doing their job.

Once it gets to the foreclosure sale, the owners are out of luck. If you have not been able to help them, or work out a purchase for their equity, the owners will lose all of their equity at the foreclosure sale.

You must have cash or cashiers checks to bid at the foreclosure sale. It is best to check with the foreclosure-sale seller before the actual foreclosure-sale date to find out how the seller wants payment.

Credit Bid The opening bid is called a credit bid. The credit bid is put forward by the trustee or the representative of the lender. The credit bid is the total of the remaining loan balance, payments in default, and any costs associated with the foreclosure sale. If no one bids above the credit bid, then the lender winds up owning the property. Any bid made above the credit bid has to be made in cash. Lets say the foreclosure sale expenses are $1,900. What would the opening credit bid be? Again, we will continue to use the same numbers we have used throughout this chapter.

Opening Credit Bid

Loan Amount $160,000

Default Amount $ 10,000

Foreclosure Expenses $ 1,900

Credit Bid $171,900

Winning the Bid What if you bid one dollar more than the opening credit bid? If you could buy the property at the foreclosure sale for



1 2 3 4 5 6 7 8 9 10 [ 11 ] 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87 88 89 90