Hook Me Up!

There is really no simple answer to this interesting question. The answer will more than likely depend on the individual. By considering a few basic concepts you can determine for yourself whether you have what it takes to get into buying and flipping foreclosures. You may see the late night infomercials talking about how much anyone can make by investing in foreclosures. Before you dive into your wallet and fish out your credit cards here are a few things to be considered. When you’re not investing money you’ll be investing time to learning and getting things done. You’ll have to get over any shyness as you’ll be meeting and talking to plenty of people, often having to make first contact yourself. Those easily discouraged by rejection need not enter into this realm as you’re likely to hear 100 no’s before you hear 1 yes. After considering this and you’d still like to move forward you’ll want to familiarize yourself with a few key concepts.

The first concept in buying and flipping foreclosures is knowing what a foreclosure is. It is basically a home that has been repossessed by the lending bank for nonpayment. This is good because the loan balance on the home is $0 so the selling bank makes pure profit from the sales price. Normally when you buy a home from a person they are still paying off a mortgage (money they borrowed to buy the home in the first place) which must be paid in full before the seller can sell or make any profit. Along with other factors this is the main reason why foreclosures can be sold so cheap. The downfall of this is that banks maximize their profits on a selling a home by doing as little repair work to a home as possible and often sell homes as is. This will leave a buyer not knowing what problems a home may come with or more importantly how much it will cost to make necessary repairs. Investors know this in advance and adjust their strategies accordingly.

Next is the concept of finding foreclosures. Today foreclosure is a huge buzz word in the world of real estate and pop culture in general. Because of this foreclosures are easier to find nowadays compared to being almost nonexistent in years past. The reason for this is that banks make money by collecting interest on the money they lend. When they have to take back a house that someone stopped paying for it takes money away from monies used for lending and that isn’t something they go around advertising. However due to the recent drastic rise in foreclosures more sources have popped up to help bargain seekers and investors locate foreclosed homes. If you’re a serious buyer you can go to through a real estate broker for free and they’ll do all the leg work for you once you tell them what you’re looking for. There are other foreclosure home locater services that may charge a fee that you can use at your leisure from the comfort of your home computer. There are a few that have a free service like RealtyStore.com’s Free 7-Day Unlimited Trial.

Finally is where the money comes in. The best suggestion is if you get to this stage and you haven’t done it already do some research on investing and your local real estate market so that you know what you’re doing. Good investors normally have an idea of the amount of money they will make and how they will make it even before starting an investment. Here the idea is to make sure that you can “flip” or quickly sell whatever foreclosure you plan to buy. There are many ways to accomplishing this goal which goes back to doing your research to know which way will work for you and your situation. Most successful investors use a Real Estate System that takes most of the guess work out of the process of what to buy, what to sell, and ensures that they make profitable deals. One of the biggest myths about real estate investing is that one needs a huge bank account to start with. Nowadays creative individuals are making thousands of dollars by using little to no money of their own and without having credit good enough to get a loan. Some famous finance authors like Robert G Allen (Multiple Streams of Income and Nothing Down) have begun offering programs for those looking to begin investing with little or no money.

Online stock trading site Zecco.com has recently announced the addition of social networking features for their customers. Zecco gained popularity a few years back by being the first and only site to offer no fee stock trades. That has since changed to the requirement of a $2500 minimum account balance to get 10 free trades per month. The fee charged per trade now is $4.50. In order to add value and community to their site, Zecco now offers a forum, blog spaces, and explorable member profiles.

Me personally, I am strictly an amateur trader who was lured into actually taking the plunge into stock trading by Zecco when it did have free stock trades no matter your account balance. The other factor that finally got me started was that the site didn’t and still doesn’t require a minimum deposit to open an account. I started with just $25 and invested in a few penny stocks (stocks valued under $5 a share). Unfortunately my busy schedule hinders tracking of my account combined with the fee for trading a stock makes me a horrible investor. Therefor I am subject to the rise and fall of the one stock that I now own a few shares in. I do however check once in a while to see how I am doing and for the most part my investment has stayed at a higher value than at which I purchased it.

Another footnote in my stock trading experience is Wall Street Survivor. This is an online fantasy football type league for stock traders. You get a fantasy amount of money to start investing with and for a period of time you compete with other members to see who has the highest valued portfolio at the games end. Again my schedule kept from fully taking advantage of this opportunity to learn more about stock trading. There are social features at this site as well with members from all levels of trading experience from beginning to expert are willing to share knowledge.

I have no experience with Zecco’s community features but if it is anything like Wall Street Survivor’s it would be beneficial for everyone to take advantage. From what I’ve experienced there are many aspects of stock trading and only a small percentage of traders know every one. Online trading has opened the door for a whole new wave of younger and eager investors who can stand to gain a lot from networking with those more experienced.

All in all now that Zecco has the new features I do plan to take advantage and “step my stock game up”. For those toying with the idea of online stock trading I would suggest making sure you have the time. You’ll need time to research trading in general, different trading companies, and most importantly what strategies you will use in your investing. You can actually leverage Zecco.com for your research because you can sign up for an account and begin networking before you ever fund your account. It would be a very good idea to read the blogs and forums first then begin communicating with other successful investors by letting them know your situation. There should be no shortage of members willing to give advice. As with everything you should always use caution when taking someone’s advice. A word of advice from me would be always consider the source and do your own due diligence before making any serious moves.

The Short Change Edition

I will clearly have to make more time to do this in the future. For that I must apologize in advance for the length of this edition of the carnival. On my part I have luckily gotten so busy to the point that I’m writing these either the day before or the day of the deadline. Although there is another factor to it that I must re-address. That would be the content submitted. I’m looking for articles that people with little or no money can read and get ideas or inspiration from. I am also looking for content that is not common place in blog carnivals such as affiliate marketing ,web design, and search engine optimization. In the future if I am able to continue this blog carnival I will dedicate an issue to just that. Now on to the second edition of The Broke And Need Money Carnival….

Remember when you had to sneak in Canadian coins, well now you get change!

MAKING MONEY

That crazy alien Zork from It’s the Recession, Stupid! with UFO Recession Tip 55 - Collect Aluminum Cans for Cash. Surprising how many people don’t know of this.

Joshua C. Karlin of Marketing & Fundraising Ideas tells us How to Ask For A Major Gift. By gift he means cash!

Word has it both Britney and Jamie Lynn Spears were booked at photo shoot time.

STRETCHING YOUR DOLLARS

R.O. aka Japan Man shows us How to stack your first million A very interesting read.

Before dropping out of college and moving back to mommy’s for funding check out Dormearning.com’s Chelsy Albertson with Saving Money During College

Very common sense but very true. Zork, once again at It’s the Recession, Stupid! presents UFO Recession Tip 57 - Read Books for Free at the Library Save a tree, get your books at the library.

Looks like Shawna has Bumblefucked her way in to this edition with Frugal, cheap or stupid? Silly things I do to save money

Please tell me where the **** in Wyoming did Walt go!?

THINK AND GROW RICH

Cameron from SuperSonicSuccess says “Feel Good” Movies are Making You Fear Success. “Why aren’t you as rich as you could be? Here’s a clue - it has nothing to do with how hard you’re working or how smart you are.”

Well that concludes this edition of The Broke And Need Money Carnival. Thank you to all that submitted material !

I don’t know what you guys are paying for gasoline but here in California we are paying $3.50 and up per gallon. A few weeks ago my sister forwarded me an email from a friend of hers that works in the oil/petroleum industry. He was kind enough to share some inside tips when buying gasoline and gave permission to share those tips. I’ve just started to try them myself but they seem practical and logical. These days I think its worthwhile to give it a shot! So without further ado here are some insider tips when buying gasoline…

For starters, only buy or fill up your car or truck in the early morning when the ground temperature is still cold. Remember that all service stations have their storage tanks buried below ground. The colder the ground the more dense the gasoline. When it gets warmer gasoline expands, so buying in the afternoon or evening almost guarantees that your gallon won’t be exactly a gallon. In the petroleum business, the specific gravity and the temperature of the gasoline, diesel, jet fuel, ethanol, and other petroleum products plays an important role. A one degree rise in temperature is a big deal for this business. Too bad the service stations do not give back for temperature compensation at the pumps.

When you’re filling up do not squeeze the trigger of the nozzle to a fast mode. If you look you will see that the trigger has three stages: low, middle, and high. In slow mode you should be pumping on low speed, thereby minimizing the vapors that are created while you are pumping. All hoses at the pump have a vapor return. If you are pumping on the fast rate, some other liquid that goes to your tank becomes vapor. Those vapors are sucked back into the underground storage tank so you’re getting less worth for your money.

One of the most important tips is to fill up when your gas tank is HALF FULL or HALF EMPTY. The reason for this is, the more gas you have in your tank means less air is occupying the empty space left in your tank. For your gas tank, this means evaporation begins occur. Gasoline evaporates faster than you can imagine. Gasoline storage tanks have an internal floating roof. This roof serves as zero clearance between the gas and the atmosphere, so it minimizes the evaporation. Maybe car manufacturers will take a hint!

Another reminder, if there is a gasoline truck pumping into the storage tanks when you stop to buy gas, DO NOT fill up! Most likely the gasoline is being stirred up as the gas is being delivered. You will most likely end up picking up some of the dirt that normally settles on the bottom. Hope these tips when buying gasoline will help you get the most value for your money.

Before I start let me get the disclaimers out of the way. Every house, seller, lender, and bank situation will be different so when using the advice given here, use due diligence in finding out whether a deal you find is right for you.

In this real estate market full of foreclosures, falling home prices, and interest rates there are definitely deals out there to be made. The hard part is finding those deals and being able to make a move on them. If you want to get the most for your money in this market you must make sure that your deal is actually a deal. What I mean is that you are spending the least amount of your money possible and getting the best value. Lets say you find what you think is an amazingly low priced property. If the property is in an undesirable area with the inside gutted out, you could actually be headed toward spending double what you paid just to get the home back into selling condition if your investor. If that home is your next move you’d be stuck either paying 2 mortgages while that home is made livable or if you’ve already sold your old home you’ll find yourself in horrible surroundings until the new house is finished. All the while you’re spending money.

It is very possible to find great low priced high value opportunities with foreclosures and bank owned properties. If you aren’t already familiar with what these are then I’ll very briefly explain. When someone uses a loan to buy a house, until the loan is paid in full the bank or lender actually owns the home (in a sense) while the person who got the loan lives in the home and makes payments back to the lender or bank . Should that person stop making payments for a long enough time the bank/lender takes back the home (or forecloses on it). Its possible to make deals on these homes because the basic way a bank/lender makes money is loaning money and profiting from the interest paid. They have a limit on the amount of money they can loan which is further decreased by having to foreclose and resell a home. Each home represents a piece of the money they can lend. If they can,t lend money, they can’t stay in business. You can profit from it being in a banks’ best interest to not have homes on their books (taking the place of money they can lend).

The down side to this, at least in California, is that when you do find a great price on a bank owned property the home is sold to you as is with no guarantee. You can get a great price but may find yourself in the situation described in the beginning of this article. Often people who can’t avoid loosing their homes to the bank do some awful things to a house out of anger and spite. This goes double for disgruntled renters. To make things even harder not all lenders and banks are willing to take much off their asking price or play hard ball for quite some time before letting a property go for a low price. The reason for this is that banks want to look strong and won’t publicly admit that they have a vast supply of bank owned properties. Trust me you’d be hard pressed trying to find information on a bank or lenders website about this. If you are interested in these types of properties, contact your real estate agent or go to a bank in person and ask a branch manager.

When you are looking for a true deal and I mean true deal, pre-foreclosures is the best way to go. Pre-foreclosure? You mean it is possible to know when someone is not making their mortgage loan payments and will be foreclosed on? In all actuality, yes. You just have to know where to look and “keep your head on a swivel”. It isn’t a great thing to be behind on your mortgage and looking ahead to loosing your home so use tact and care when dealing in these situations. Why are these deals so great then? Because they can be advantageous to you and everybody involved. Also more often then not you can see the inside of the home before you buy. People that haven’t run out of time and still living in the home won’t be subject to damaging a property especially if there’s hope. This also brings me to my other point. Those running out of time and solutions are open to just about anything that can prevent them from home loss or financial ruin.

Normally a person facing foreclosure in this market will owe more than their house is worth. This means they are in a short sale situation and have accepted that keeping their home is not an option. They would rather sell and get away from their biggest debt which is their mortgage. This leaves the window wide open for you to make whatever kind of offer you want to make as long as their bank/lender that they owe money to will accept it and free them from their mortgage obligation.

If you do find a person who has their heart set on keeping the home for whatever reason you can help there too. Have them short sale their home to you for as low as the bank/lender will accept and let the seller stay in the home and pay you rent to cover the mortgage. In this situation you won’t be living in the new home but you would instead become an investor which opens up a new world of opportunities for you. Make sure that the amount of rent charged covers your mortgage payment plus a little extra for yourself. You are now making money every month and the seller has avoided foreclosure. Once you have built equity in that property you can use it to help buy your next home or your next investment.

Short sales are the most common and easiest way to come upon pre-foreclosures. They are rampant on the multiple listing service used by real estate agents. To get access contact your Realtor and let him/her know that you are interested in looking for short sale property and they will be more than happy to assist you. There are other uncommon ways to find pre-foreclosures but you’ll have to do a little more digging to find them like for sale by owners, homes with notices of default, and public records at the county recorder.