A number of things likely come to mind when you think of virtual real estate investing. Depending on how familiar you are with real estate investing already, you might think of hard money lenders or real estate portfolios and real estate retirement plans, or you might focus on short sales, bulk reo investing and virtual real estate investing. You may also consider what roles these things play in your life as a real estate investor in different economies.

There is a great deal to know about real estate investing. The best way to optimize your real estate investing education is to know the basics ahead of time. Whether you are interested in short sales, bulk reo sales, virtual real estate or just improving your abilities as a real estate investor, you need to know some real estate investing basics in order to succeed. You should review these three real estate investing basics to learn things even some experts do not know:

1. You will always get a positive yield with real estate investing education. You can create thousands of dollars in potential wealth with each real estate deal. Knowing how to get that wealth is the key to success. Learning as much as possible about real estate will increase your odds of success whenever you do a real estate deal. Small investments yield big results when you invest in learning and then implement what you learn.

2. Any economy allows for success in real estate investing. Many people think that you can only succeed in real estate when the economy is booming. In reality, poor economies are great for real estate investors. You can often find properties to buy at deep discounts. Also, you might find deals that simply could not exist in a booming economy. Real estate investing often is what turns the tide for poor economies. When the economy is not so good, short sales, bulk reo sales and virtual real estate are great. You can save yourself from financial difficulty along with others by knowing how to do these deals.

3. You do not need lots of your own cash to be a successful real estate investor. You can make a success of real estate investing no matter how much or little money you have. There are many deals that will let you use other people’s money to do them. Private lenders will lend you their money if they think you are a good investment. An investor who is a good investment knows as much as they can when it comes to real estate investing. Then you will represent a good investment to other people who have money for real estate investing but do not know how to use it.

Real estate investing is a good way to generate a great deal of wealth. You can create an income in any economy. You can create your own success using your knowledge of short sales, real estate investing, bulk reo sales and virtual real estate. Knowing the basics of real estate investing will help you succeed as a real estate investor. Knowing some real estate investing basics (beyond what older gurus like Robert Allen teach) and applying them will help you succeed as a real estate investor.

Great real estate investing resources are available at RealEstate.BryanEllis.com.

When you think of virtual real estate investing, a number of things may come to mind. If you are already familiar with real estate investing you may think of short sales, bulk reo investing and virtual real estate investing or you may think of it in terms of real estate portfolios and real estate retirement plans or even hard money lenders. Likely you also wonder how these things will factor into your life as a real estate investor in the current economy.

There is a lot to learn about real estate investing. To get the most out of real estate investing education, be familiar with basic information ahead of time. No matter whether you are interested in short sales, bulk reo sales, virtual real estate or just enhancing your knowledge as a real estate investor, knowing some real estate investing basics will help you succeed. Check out these three real estate investing tenets that many experts do not fully know:

1. You always will get a positive result from investing in real estate investing education. You can create thousands of dollars in potential wealth with each real estate deal. The knowledge of how to get that wealth is the key to your success. Learning about real estate increases your odds of success when you do a real estate deal. A small investment in your education can yield big results when you implement your learning.

2. Any economy allows for success in real estate investing. Many people think that you can only succeed in real estate when the economy is booming. In fact a bad economy is not a bad economy for real estate investors. You will likely find properties that you can buy at deep discounts. In addition, you can find deals that simply would not exist in a booming economy. Poor economies can have the tide turned based on real estate investing. Short sales, bulk reo sales and virtual real estate all thrive when the economy is less than thriving. Knowing how to do these deals can create wealth for you and save others from major financial difficulties.

3. You do not need lots of your own cash to be a successful real estate investor. You can succeed in the real estate investing arena no matter how much money you are working with. There are lots of deals that you can use other people’s money to do. If you appear to be a solid investment you may be able to use a private lender’s money. A person who is a solid investment knows as much as possible about real estate investing. This will help you show people that you are a good investment if they have the money to help you with real estate investing but they do not know how to use it.

A good deal of wealth can be generated with real estate investing. You will have the ability to create income in any economy. You can create success for yourself using knowledge of real estate investing, short sales, bulk reo sales and virtual real estate. Knowing the basics of real estate investing will help you succeed as a real estate investor. Knowing some real estate investing basics (beyond what older gurus like Robert Allen teach) and applying them will help you succeed as a real estate investor.

Great real estate investing resources are available at RealEstate.BryanEllis.com.

When a bank’s level of non-performing loans and foreclosed assets increases to the point that the bank’s costs and expenses exceed its revenues, the resulting deficit erodes the bank’s net worth and reduces stockholders’ equity.  Depending upon the particular bank’s level of net worth, a serious problem will result at some point in time unless steps are taken to mitigate the problems.  This article deals with the administration of real estate properties that have already been foreclosed.

The lender must examine and truly understand both the regional laws of foreclosure, and the documents for the specific loan at hand.   Depending upon the various factors contained in loan documents and the nuances of state foreclosure laws, there are usually factors that dictate the timing of when a foreclosure must be initiated.  In some cases, a lender’s failure to initiate a foreclosure at the proper time might result in the postponement of the foreclosure to a much later time, allowing further arrearages to accrue and possibly further deterioration or damage to the collateral property.

Once the lender has decided to foreclose, the bank needs to have its foreclosure department ready to go.In the common language of a commercial bank, foreclosures are known as “OREO” (Other Real Estate Owned), as separate from the properties the bank uses and operates, such as their own offices.  The equivalent term at savings banks is Real Estate Owned or “REO.”

Here are some guidelines for the successful management of foreclosed properties:

• Make sure that the homeowners’ or fire and extended casualty insurance is cancelled and that the property is added to the bank’s blanket insurance policy for foreclosed properties.  (Note:  I have seen properties lost to fire where there was no insurance coverage due to failure to monitor this activity.)
• Assign the responsibility for managing foreclosed properties to one person.  If the level of foreclosures is sufficient to occupy one or more people fulltime, then this person almost certainly must be a new-hire.Don’t depend on the mortgage consultants that helped create the predicament to somehow solve the problems that they didn’t see coming.  It is advantageous to have some “distance” between the OREO/REO managers and the original borrowers.
• Secure the properties immediately after foreclosure or abandonment.  Maintain a central key repository in the OREO or REO department.
• Keep the properties looking decent.  Do whatever is required to avoid deterioration of the properties.No property buyer, commercial or residential, wants to purchase an ugly piece of real estate.
• If there are things to be fixed on the property, find a “buy & fix-it-up” expert, and provide financing to make an attractive deal for all involved.  Include a commitment to provide financing for the ultimate customer to whom the fix-up specialist will sell.
• Put up the “For Sale” signs immediately after the foreclosure.  (Note:  It is astonishing to me how many times I have gone into OREO and REO operations and found management amazed that a property has not sold, yet there is no “For Sale” sign on it!)
• Only list with a real estate agent if truly necessary.Your Department of OREO or REO will understand the property than any realtor, and your financing will be a major selling point to the purchaser.You are the one to control the financing, not the a real estate agent.
• Talk to the people next door and around the foreclosed property.Friends and family of the owner will often be interested in the property.  Your offering favorable financing might be the factor that tilts the scales in favor of a relative relocating close to another relative.
• Inspect the properties regularly, and document what you find.  Take any needed corrective actions immediately.
• Offer financing to entice buyers.  Remember that a sale turns a cash consuming asset into a cash producing asset.
• Consider holding periods and the net present value of a probable future sale when setting a sales price.The “net” part of net present value allows for the holding costs which include insurance, taxes, any required maintenance, landscaping, and any expenditures such as repainting and other cosmetic projects that may be required to market the property competitively.
• Take note of OREO / REO events and issues at meetings of the Board of Directors.  Directors often have market knowledge and contacts that can help with OREO / REO problems.

Getting all of these done can be quite a challenge.  It requires special expertise to initiate all of these various activities and to keep them moving toward the multiple finish lines

About the Author

This article was written by one of Consolidated Consultants Co’s Banking Expert Witnesses. He is a manager and banking regulator, has successfully managed millions of dollars of distressed and foreclosed properties including single-family houses, condos, and land developments, apt complexes, and many others across the country.  He is available on a contract basis to discuss your bank’s particular needs, and works regularly with real estate experts.