Of those 203 properties:

• 11 were picked up by 3rd parties at the auction
• 51 reverted back to the bank
• 141 were cancelled/sale off

Since we started the week with over 300 properties on the list, there were aslo over 100 postponements granted as well.

We specialize in foreclosure auctions, short sales, REO/bank owned properties

As of tonight, there are 307 properties scheduled to go to auction next Friday.  Should that number hold out, this upcoming week would turn out to be the largest, in terms of properties taken to sale, that King County has ever seen. 

A lot can happen between now and then and several properties will end up getting postponed or cancelled before going to auction, but with such a high numbers of scheduled sales,the sheer volume of homes this week will definately  present an opportunity for the savvy real estate investor to pick up a property or two at rock bottom bargain prices. 

If you are an investor or perhaps just a homeowner looking to get a great deal on your next property purchase then you owe it to yourself to look closely at buying at the auction.  There is simply no better vehicle today that affords the low prices that we have seen lately on the courthouse steps.

Here are some of the numbers broken down by city for Friday’s King County foreclosure auction.

City	No. of Properties Scheduled	Hot Deal
Seattle	83 properties in Seattle currently scheduled for auction	Large house less than 10 blocks from Green Lake. EMV = $550,000  EOB = $265,000.  That is 48 cents on the dollar
Redmond	7 properties in Redmond scheduled to go to sale	Close to Marymoor Park and Lake Sammamish.  EMV = $475,000  EOB = $236,000.  50 cents on the dollar!
Bellevue	8 Bellevue properties	Factoria 1 bedroom 1 bath condo.  EMV = $200,000  EOB = $120,000.  60 cents on the dollar!
More stats by city:
	Kirkland	14 properties scheduled for auction
	Issaquah	8 properties
	Renton	18 properties
	Kent	29 properties
	Medina	1 property
	Mercer Island	4 properties
	and many, many more….

Every Tuesday at 5:30 p.m., Real Estate Investment Firm, holds a FREE workshop on “How to buy foreclosures” at their downtown Redmond WA office location.  I would encourage anyone who may be interested in capitalizing on current market conditions and wants to buy their next property at a significant discount to attend this Tuesday. 

The end result is that approximately up to 10,000 homeowners will have their foreclosure stalled for a few weeks in order to allow time to work out modifications with them.  For those homeowners, this is certainly good news, especially considering the upcoming holiday season.

Many of the people I spoke to were surprised to learn that so few homeowners would be affected by the announcement.  The reason is simple however, the majority of homeowners in foreclosure took out loans that Fannie and Freddie would never dream of purchasing.  They were the no income, no asset, no credit check loans that are the root cause to our current financial market’s collapse.

And no amount of bailout or releif programs are going to be able to help most of those borrowers.  When they couldn’t verify income or assets in the first place, it is highly unlikely they will suddenly be able to now, and one of the major tenants of all of the announced releif programs are that the borrowers must show they are able to qualify for the new loan terms.

It’s nice to know that the people at Forbes and the 700+ real estate professionals they surveyed for this piece echo the same sentiments that we at Real Estate Investment Firm have been saying for several months now.  When you look at the fundamentals of the Seattle area real estate market and the local economy, there is no better place to be to position yourself to make large gains when the turn around occurs.

You can read the entire article here.

As reported in a Seattle Weekly article on November 12, 2008, Steel talks about the current foreclosure market and how his company plays a part in it.  Helping thier investors find the “Hot” properties at auction each Friday or helping clients who are behind on their monthly mortgage payments find a buyer, through a short sale, to avoid foreclosure all together.

To see the full article in its entirety, go to http://www.seattleweekly.com/2008-11-12/news/foreclosure-vultures/

     

GOAL: The primary goal of Toys for Tots is to deliver, through a shiny new toy at Christmas, a message of hope to needy youngsters that will motivate them to grow into responsible, productive, patriotic citizens and community leaders.

OBJECTIVES: The objectives of Toys for Tots are to help needy children throughout the United States experience the joy of Christmas; to play an active role in the development of one of our nation’s most valuable natural resources - our children; to unite all members of local communities in a common cause for two-three months during the annual toy collection and distribution campaign; and to contribute to better communities in the future.

We treat people with kindness and respect, and we give without regard to race, creed, sex, lifestyle, residence, or other discriminatory consideration.

          Real Estate Investment Firm Cares   

                       GENTLY USED COAT DRIVE

Did you know that 90% of homeless adults need a new, warm coat each winter because they have no place to keep one over the summer months? But it’s not just homeless people who need our help; thousands of families are forced to make a choice between buying a winter coat and putting food on the table, or meeting other basic survival needs.

This year REIF Cares want to collect gently used winter coats and distribute them to thousands of men, women, and children who would otherwise go without.

Happy Holidays & a Joyous New Year

REALESTATEINVESTMENTFIRM

16300 Redmond Way, Suite 202, Redmond WA 98052

Please contact LoAn at 425-214-6744 with any questions or for drop-off information & locations. 

The roller coaster swings of the stock market, the federal bailout package, the collapse of WAMU, Fannie Mae and Freddie Mac and much, much more have created what I can only call the perfect storm of opportunity to buy these properties at discounts of 30-45%.

With such a small amount of liquidity available these days, the investors of a year or two ago can no longer play in this arena.  Since there are no more stated income loans, little or no down loans, etc. many real estate investors are forced to sit on the sideline and a new breed of investor has emerged to capitalize on this unprescendented opportunity. 

Today’s investor is likely to work at companies like Microsoft, Google, and Boeing, etc.  They do not see real estate investing as the path to overnight riches and a lavish lifestyle.  Rather they see real estate investing for what it should be.  What they do see though is opportunity. 

With the banks taking the radical ^{(Yes that is sarcasm)} position that for a person to qualify for a home loan they need to be able the document the following items:

1.  A steady and verifiable source of income (ie. they need to have a job)

2. Verifiable liquid assets (money in the bank)

3. A history of paying back loans (good credit)

many would be buyers and investors have been frozen out of the market.  This seemed to reach its peak during the beginning of October when you had the Dow Jones dropping like a lead balloon and Congress unable to come together at first regarding the bailout package.  This caused uncertainty and resulted in a 90% drop off of properties that get purchased by 3rd parties at the foreclosure auctions.  When 3rd parties don’t buy, the banks in turn end up with even more REO properties and they quickly realize that unless they act dramatically they will end up taking back even more of the foreclosure properties that go to auction.  When this happens the only real remedy the banks have is to stimulate 3rd party interest in the properties again.  The only way they can do that is to dramatically drop their opening bids down to levels that will assure that the foreclosures end up getting bid on at the auction instead of reverting back to the beneficiary.  THIS IS EXACTLY WHAT THEY HAVE DONE!  Lenders have begun to discount their opening bids by as much as 50%.  This equates to several hundred thousand dollars in some cases.

One example is a West Seattle property one of our clients purchased at the foreclosure auction on October 24th 2008.  The foreclosing lienholder was a first mortgage with a balance owed of $636,000.  Late Thursday the lender posted an opening bid of $311,000.  Our client was able to purchase the property at the King County foreclosure auction for $326,000.  The current market value of this custom built 2003 home is $500-550K.  That represents over $200,000 in instant equity for the buyer. 

This is just one example of many in the month of October.  November is traditionally a very busy month at the foreclosure auctions.  Don’t let this opportunity slip away. 

You can register to attend our free workshop, “Never Pay Retail” held every Tuesday at 5:30 in our Redmond office.  There you will learn how you can participate and profit from buying foreclosures at the foreclosure auction.  Sign up today!

•  Deed of Trust
•  Construction/Mechanics Lien
•  Federal Tax Lien

Another might be subject to:

• 1st Mortgage Deed of Trust
• 2^nd Mortgage Deed of Trust
• HOA lien
• Delinquent property taxes

As a general rule, in Washington State, the priority of liens depends on the order in which they were created.  Lien priority is established by the date the lien documents are recorded with the County Recorder.  The lien that gets recorded first gets first priority for payment.

There are a handful of exceptions to this rule.  Special attention must be paid by anyone buying a foreclosure property as to the status of any property tax liens, condo association liens, mechanics liens and IRS tax liens. 

Property Taxes and Special Assessment Liens from Municipalities - These liens always have the highest lien priority.  Any past due taxes will need to be paid and brought current as will any outstanding special assessment liens (typically for local improvements such as road paving or sewer lines).

Condominium Association Liens - Laws have been enacted in 16 states and the District of Columbia granting community association liens senior lien status under certain conditions.  These liens are referred to as “Super Liens”.  Washington State is one of the 16 states that allow for “Super Liens”.  In Washington State, a lien for unpaid condo dues is granted lien priority over liens that may have been recorded before it.  The statute does cap the amount to be paid to 6 months prior dues.

Mechanics Liens - Mechanic’s Liens, otherwise known as Construction Liens may have a higher lien priority than other liens recorded before it.  The determination of lien priority in the case of a mechanic’s lien is based upon the date the work started on a project or the date materials were first delivered to the job site.  For example, a property that had the following liens:

•  
  • Deed of Trust* (Recorded August 15^th 2006)
    • *Foreclosing Lien Holder
  • Mechanics Lien (Recorded October 12^th 2006)

In this example the mechanics lien would take priority over the Deed of Trust, only if the work began or material was delivered to the job site prior to August 15^th 2006.  If work commenced after that date or material was delivered after that date then the lien would have junior lien priority to the foreclosing deed of trust. 

There is also a secondary exception with mechanic’s liens.  Since Washington State’s statute provides for a time limitation as to the validity of mechanics liens, a mechanic’s lien is only valid for a period of eight months.

“No lien created by this chapter (Washington Revised Code RCW 60.04.061) binds the property subject to the lien for a longer period than eight calendar months after the claim of lien has been recorded unless an action is filed by the lien claimant within that time in the superior court in the county where the subject property is located to enforce the lien.”

Unless the claimant takes the additional step to convert the mechanics lien to a judgment by filing suit in Superior Court in the County of Jurisdiction then the mechanic’s lien will self expire after a period of eight months and one day.

IRS Tax Liens - An lien filed for unpaid income taxes is often mistakenly thought to have a higher lien priority than other liens.  This is not the case.  Lien priority for IRS Tax Liens is based upon the date of recording.  What is granted under federal statutes is a redemption period.  If a property is sold at foreclosure auction and the IRS has filed a tax lien against the property, then the IRS has a 120 day right to redeem the property to satisfy the unpaid debt.  If the IRS exercises their right to redeem, it can only do so by reimbursing the purchaser.

The IRS’ redemption payment to a purchaser of a property at a foreclosure auction would include the following:

The winning bid plus 6% interest from the date of sale,

PLUS

• Expenses incident to the preservation of the property:
• All payments made to senior lien holders,
• Any necessary legal fees (i.e. title defense, etc.),
• A prorated reimbursement for prepaid property taxes and fire insurance premiums.

MINUS

• Any income the new owner received from the property and/or the fair market rental value of the new owner’s occupancy of the premises.

*Any improvements made to the property will not be reimbursed by the IRS.

It is important to note that the IRS has not redeemed a property in King County in over 4 years.  That does not mean that they won’t do it tomorrow, it just means they don’t do it very often.

When it comes to buying properties at a foreclosure auction, having detailed knowledge of the condition of title is important.  What is more important though is understanding lien priority and how the various liens of record may affect you and your investment.

Of the 465 properties scheduled to be sold at auction, 289 sales were cancelled, 140 properties reverted back to the bank or foreclosing lender and 36 were purchased by a 3rd party.  That does not mean their were only 36 good deals to had.  It only means that there were only 36 people or investors willing and able to buy that month.  Many of the 140 properties that reverted to the banks were great deals and represent a tremendous missed opportunity for anyone wanting to capitalize on this market.

To learn more about investing in distressed and foreclosure properties and how you can buy properties at 60-80 cents on the dollar, please sign up to attend our Free weekly workshop called “Never Pay Retail” held at our downtown Redmond, WA office.

The above quote was written by Warren Buffet in his 2004 letter to shareholders of Berkshire Hathaway.  At the time Mr. Buffet penned the remark he was commenting on investors who try to “time the market” and was saying that if they insist on doing so, then they should keep in mind to “be fearful when others are greedy, and greedy when others are fearful.”

There is another famous quote regarding “greed” from Oliver Stone’s 1987 movie, Wall Street where the character Gordon Gekko, portrayed by Michael Douglas proclaims that “greed is good”.  The question then becomes, when should you be greedy!

In my opinion, that time is NOW!  Never before has an opportunity to purchase distressed and other below market real estate existed like the one before us now exists.  It is also likely to never occur to this degree again. 

Two or three years ago when the money flowed like wine from banks and other lending institutions and the masses were eager to run out and leverage not only all that they had but often they also leveraged what they didn’t, it was wise to be cautious.  It seems that any time their is a bull market in real estate most people develop amnesia and forget that real estate also follows a cycle.  You have periods of market appreciation and periods of market depreciation.  Tracked over any extended period of time and that line graph will always end up higher than when it started, but in-between there are always periods of ups and downs.

How many people who bought real estate in 2006, when just about everyone fancied themselves a real estate investor just because they watched a handful of “flip this house” episodes now are upside down on their “investment” or have already lost their house to foreclosure.  A perfect example of “being fearful when others are greedy”.

On the other hand, NOW is a perfect example of when to “be greedy when others are fearful”.  The savvy real estate investor knows that every crisis or correction in the market is only an opportunity to buy at a great discount.  Several factors have combined today to create a perfect storm of opportunity for those willing to educate themselves on the realities of the market.  While so many are afraid and sitting on the sidelines, those that pull the trigger today will reap the rewards of that decision tomorrow.

To learn how you can take advantage of the opportunities in this unprecedented market and buy investment or primary real estate please visit Real Estate Investment Firm and take the first step in creating long term and lasting wealth for you and your family.

The following is a very insightful video-blog from Zach Anderson at Zach Anderson at Cobalt Financial Services about the current market conditions and the opportunity that is available during this turbulent time.  Zach is a Certified Mortgage Planner and Strategic Wealth Advisor with CFS. 

Thank you Dean Ono from The Legacy Group for the valuable information and allowing me to repost it here for all of you.

The Chinese have a proverb: “May you live in interesting times.” And we are living through interesting times indeed.

Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of “toxic” mortgages. This has a lot to do with FASB 157, also known as “mark to market”.

Each day, lenders must mark their assets to the marketplace. It’s like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But “mark to market” does not allow for this, which creates a vicious cycle.

Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to “mark to market” requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio…at cheap prices. And this makes the vicious cycle continue.

And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn’t just A paper or B paper etc. it’s everything. It’s got some A paper, B paper, C paper…and even what looks like toilet paper. An “A” investor buys the whole pool but because they are an “A” investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this, the opportunistic “shorting” done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.

This is not easy to understand for the general public. In fact most politicians don’t get this either. That’s why it is a difficult yet critical bill for them to vote on.

Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.

Dean Ono
The Legacy Group

As the turmoil in the financial markets continue it creates an amazing opportunity for investors and others to be able to purchase property at significant discounts to market value.  At Real Estate Investment Firm we help our clients create long term and lasting wealth through the acquisition of distressed property at 20-40% under market value.

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. 

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

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