How to make money when there is no money - Posted by StevenS(CPA)

Posted by wobbliebox on August 12, 2007 at 17:25:48:

I work for one of the subprime lenders that is still in business. It is being discussed there as well as at my local REI Club.

Every month the REO inventory is building up and will continue to grow at least through next year.

Take a look at there are now 116 lenders in bankruptcy and this list is growing every day.

How to make money when there is no money - Posted by StevenS(CPA)

Posted by StevenS(CPA) on August 10, 2007 at 10:13:23:

This is probably the very best time in the world for professional creative real estate investors to make money and I think the time is only going to get better as the months go on.

When even people at the grocery store are talking about mortgages getting harder to get a panic is starting to set in.

I have read that some banks are making margin calls on their hedge fund clients which in turn drys up some of the easy money.

From what I’m hearing from a mortgage broker friend is that in the next few weeks low doc loans will be going to low doc heaven.

Plus with FICO changing their rating system in September it may be another round of credit crunching as spouses lose their AU benefit and millions of people credit score goes haywire.

By late this year we may find that anyone with less than 700 be shut out of the market or pay a high cost to enter.

Which means that there will be fewer retail buyers and less novice investors.

Professional investors will be hot if they play L/Os, 60% LTV or/and wraps. Putting together investor pools will still be a nice way to make money also since the there will still be moms and pops with cash laying around.

When everyone is scared and running for the exits is when we as investors should be picking up every good deal in sight.

Another side benefit is that this market will kick out the weekend investors, who thought all you had to do to make money is buy it, paint it and sell it at a higher price. Those days are gone in most markets too.

So, this is a great great time. I hope to hear of some great deals coming on these boards soon.

But that’s just my opinion.

Re: How to make money when there is no money - Posted by Mark (SDCA)

Posted by Mark (SDCA) on August 13, 2007 at 10:34:27:

Yup. Countrywide and WAMU is just another shoe dropping. The more loans they have to keep in house, the fewer they can make. Loans WILL be drying up even more than they already have.

Fewer loans = fewer buyers.


cherry pick and stay out of debt… - Posted by lukeNC

Posted by lukeNC on August 10, 2007 at 18:16:46:

Yep great deals to be had all over. And will only get better.

Be smart and wholesale. Build cash. Buy cheap rentals cash. Buy cheap homes / land and seller finance – keep the paper. Nows the time to put money in real estate when the prices are bargain basement.

You’re only subject to the subprime garbage if you owe money. Stay out of recourse debt.

What does this mean to beginging Investors? - Posted by Joseph (OR)

Posted by Joseph (OR) on August 10, 2007 at 18:05:57:

What does this mean for us begining investors with low FICO Scores? Does this mean we are out or does this mean that low FICO score investors need to be more creative?


How to make money - Posted by dealmaker

Posted by dealmaker on August 10, 2007 at 14:21:06:

Last time I saw this was in the '80s in Houston. Everyone was saying; “jump on these deals, NOW”. Well I didn’t because I was too busy in graduate school.

However, 3 years later, AFTER PRICES HAD DROPPED CLOSE TO 50%, I did get in!



Re: cherry pick and stay out of debt… - Posted by wobbliebox

Posted by wobbliebox on August 11, 2007 at 18:56:46:

Don’t think prices are in the basement yet. The foreclosure peak will arrive March 2008 and there is talk that the REO’s that the banks are accumulating will be possibly dumped next year in a Resolution Trust style sale.

If you remember the late 80’s properties going for 10 to 15 cents on the dollar through the Resolution Trust Savings and loan disaster.

thanks Luke - Posted by acw

Posted by acw on August 11, 2007 at 07:32:08:

thanks Luke!

Re: What does this mean to beginging Investors? - Posted by Eric (MI)

Posted by Eric (MI) on August 11, 2007 at 08:59:20:

My FICO has nothing to do with my investing.

Re: How to make money - Posted by Rich-CA

Posted by Rich-CA on August 10, 2007 at 15:33:50:

Too many people have subscribed to the quarterly results fever that has gripped the corporate world. Cycles go in much longer intervals than quarterly. Patience is the only way to be a success long term.

Re:Talking heads - Posted by celeste

Posted by celeste on August 12, 2007 at 07:55:47:

Where did you get your info of the Resolution trust coming back into play?