I am really interested in Jeff Adams’ way of getting REOs and foreclosures. His course teaches to buy them with a land trust and it all seems well and good, but I read another ebook “How to Be An REO Rockstar” or something similar. He states that banks aren’t going to want to do business with someone using a land trust and they muck up the deal down the line with other investors, etc.
What is correct? How are those wanting to learn about investing to seperate the wheat from the chaffe, so to speak. I was really interested by Jeff Adams’ approach as it could be a way to acquire properties with no money, but I don’t want to spin my wheels on something that has little chance of working. Of course, I’m wary of some things he teaches such as writing a check for $500 deposit money with the reckoning they won’t deposit it for 3-4 weeks and in that time find a buyer. What if they deposit sooner? What if you can’t find a buyer in the interim? Seems like a good way to get in legal trouble.
Banks also aren’t going to want to do business with someone who can’t put any money into the deal - especially in this market. Don’t get wrapped up in the “late night TV” mentality. You’re not going to buy houses worth $50K for $350. I’m not saying out of the ordinary things never happen, but they’re sure not likely. You can be sure a bank is going to look at you closely in today’s market when you’re applying for a loan. Loose lending standards is what got them the foreclosure in the first place. Work hard, save money, and take good care of your credit. Read as much as you can on here and post any other questions you have. I definitely wouldn’t intentionally write a bad check. Not only is it illegal, but you’ll get a bad reputation in the beginning which can cripple your efforts to acquire properties.
I was on Jeff Adams webinar, and yeah, I was a little wary myself, about the whole floating a rubber check thing. I guess if it worked for him in the beginning good for him, but well, yeah, just not my style.
I hope Jeff is not advocating writing a bad check.
Instead, I suspect Jeff is saying that if you write a check for earnest money, it probably won’t be deposited for awhile. In the interim, you find a buyer and collect a deposit from your buyer.
Your buyer’s deposit reimburses your earnest money deposit, so you seem to be in the deal with none of your own money.
In practice, it is true that the earnest money check is not deposited until the bank has accepted your offer. Unfortuntely, there is no guarantee on how long it will take the bank. It could take anywhere from three days to three months.
To keep yourself out of trouble, don’t make an offer on any property that you can not close on yourself. Even if you have a buyer in the wings, buyers change their minds.
All of those silly gimmicks are leftovers from the real estate boom (which is now bust). At this point, things are back to basics. If you read about some guru speak that sounds iffy - IT IS! If you read about some guru stuff that sounds too good to be true - IT IS! If you read about some guru stuff that sounds shady - IT IS!
Real estate investing isn’t brain surgery and it doesn’t take a bunch of gimmicks to do it right.