Archive for July, 2008

Two “Gems” purchased at the July 18th Foreclosure Auction

The foreclosure auction was very good for our investors on Friday July 18th 2008.

We purchased two properties at auction that day and both were exceptional deals. The first property was a beautiful home in the Bridle Ridge neighborhood of Bellevue.  Tne home was last sold in December 2006 for 1.099M.  The prior owner then proceeded to spend an additional $180K in upgrades and remodelling. 

We bought this house at the foreclosure auction for an investor for one dollar over the opening bid of $723,000.  By that afternoon we had all cash offers from potential buyers for $905,000.  We will be re-listing the property on the MLS for $1.1M in the next couple weeks and expect to sell very quickly.

Below are some pictures of the property.

The 2nd property we purchased was a house less than one block from Greenlake.  We purchased the house at auction for $378,600.  According to the tax records the property was only a 2 bedroom 1 bath but the former owner had almost completed finishing out the basement which adds another bedroom and bath and approximately an additional 400 sqft.

The investor will spend about $25,000 fixing up the house and the ARV (after repair value) of the property is between $550,000-$600,000

If you would like to learn more about how you can purchase foreclosure properties like this at signifigant discounts you are invited to attend our weekly investor training class held every Tuesday at 4:30 at our downtown Redmond office. 

Understanding the “Saver vs. Investor”—A New Way of Thinking

The difference between savers and investors

There is an important difference between people who save their money and people who invest their money. It’s leverage-the ability to do more with less. 

Old beliefs and financial habits are deeply ingrained and hard to change. Yet educated investors know how to use leverage and other people’s money to create their wealth. Savers also invest, but they invest from a saver’s point of view-mutual funds, 401(k)s, stocks and bonds. A well-informed and disciplined investor can gain much higher returns with much less risk and less money, but doing so requires financial leverage.  Most savers don’t use financial leverage. They’re more passive about borrowing. They don’t use debt to their advantage, and they don’t use it to get richer. Investors, however, use smart borrowing techniques to make their money grow faster.

What are the benefits of OPM and OPT?

Most people have the ability to apply the strategies of wealthy people by using OPM-other people’s money. Using OPM is a solid path to creating long-term wealth. As an example, banks are eager to lend money for smart real estate investments. It’s a win-win situation: banks earn money by lending money, and you earn it by purchasing properties below market value and having your real estate appreciate. 

In contrast, most bankers will not lend money to buy mutual funds. Why? Apparently bankers think that mutual funds are too risky and that real estate is a safer investment. 

It’s also wise to use OPT-other people’s time. This is a very important factor in effectively using leverage. Engaging professional assistance can help you gain more knowledge about leverage and become more astute about how you invest your money. It also enables you to save your valuable time and enjoy it with family and friends. 

Retirement is easier for investors than it is for savers 

With so much opportunity to become financially secure, why do so many people continue to do nothing?  Simply put, it is because of fear. Fear that mortgage interest is a bad investment, fear that equity pulled from a home will be lost in risky investments, fear that a home could be lost, even fear that we lack self-control and would waste available money on unnecessary luxury items.

The irony of this is that continuing to maintain large equity positions in our homes can be extremely risky. The risk of losses from unexpected life changes, housing market drops, even natural disasters, are increased when too much of our cash is buried in a single asset-our home.

For more information on leverage and how you can use it to your advantage contact us.

Zach Anderson

Cobalt Financial Services

425-828-2651

zacha@cobaltfs.com

Sucessful Week at the Foreclosure Auction for our Investors!

Due to the 4th of july holiday, there were two foreclosure auctions held the first week of July.  One on Monday July 7th and the other last Friday the 11th.  As expected, Monday’s sale was pretty light, but we were able to pick up a great Renton Townhome for an investor.
The property was built in 2004 and was over 1600 sqft.  Similar units in the same development are currently selling for $310,000-$320,000.  We were able to purchase the property for $241,800.00.  75% of market Value.  Since we knew the owner had already vacated the unit, we knew our investor could do a very quick turn-around and re-list almost immediately. The investor who purchased this unit finished out an additional room on the ground floor, did some paint touch ups, and installed new appliances and he should see a pre-tax profit of $30,000-$35,000 after all aquisition, holding, fix-up and selling costs.

Purchase Price  $241,800
Market Value $320,000
Equity Gained $78,200
Friday’s was a much busier day.  We bid on several properties that were truly excellent deals and were able to purchase two properties for our investors.  The 1st property is a 2 bedroom condo in Renton just off Sunset Blvd and I-405.

Purchase Price  $120,250
Market Value $170,000
Equity Gained $49,750

                                                                                                                                                                   
The 2nd property we purchased was a very nice home in Bellevue.  While the yard was severely overgrown, the home was actually in great shape.  The prior owner had done some updating and left the house in very clean condition. The only thing the buyer needed to do was landscaping.  Since the house has been vacant for a while the grass was about 2.5 feet tall.  We purchsed the home for $355,000.  The current tax assessed value is $403,000 with a market value of $450-470K.

Purchase Price  $355,000
Market Value $450,000
Equity Gained $95,000

If you would like to learn how you can purchase and profit from buying foreclosure properties you are invited to attend our weekly Foreclosure Training seminar held every Tuesday afternoon at our Downtown Redmond office at 4:30 pm.
Real Estate Investment Firm
 16300 Redmond Way
#202
Redmond, WA 98052
RSVP to attend