Beware of the Mortgage Rescuers

These criminals skip over foreclosure notices on newer homes with subprime loans and mortgages made with low downpayments or none at all.

They are looking for foreclosures on homes with loans that are a decade old or more, those that have a nice buildup of equity. They arrange to get that equity for themselves.

Though there are legitimate, mostly nonprofit, operations that can help homeowners in distress, there is a growing army of criminals that prey on this group.

They get leads from sites such as PreForeclosure.com and All-foreclosure.com. The sites compile public records to provide leads for legitimate investors, but anyone can access them. People on the list say they receive letters daily that offer to help them avoid foreclosure.

Here's how the scam works. Rescuers say they will refinance through a designated investor or arrange a rent-to-own plan that will allow homeowners to buy their homes back. Somewhere in the paperwork, there is a quit claim or deed of gift in which homeowners sign their houses over to the investor.

At that point, the rescuers charge the former owners rent high enough to ensure they can evict them and pocket the equity built up in the property.

The rescuer may also take out a first and second mortgage on the property. If the former owners do get the property back, what they owe on it could be more than the house is worth.

Several states have passed foreclosure protection laws, but it's still up to individuals to protect themselves from scam artists.

Blessings to your Real Estate Investing Riches,

Milton B. Yates

www.miltonyates.com

You Can Still Buy even if You Haven't Sold

If you have the right credit and the ready cash, you could make
two mortgage payments until your old house sells. Another  strategy
is to take a short-term, low interest Adjustable Rate Mortgage on
your new house that will give you some breathing room while you find
the best buyer for your home. But this is often an unrealistic choice
for homeowners who can't swing two mortgages.

One rather obscure choice is known in commercial lending as a 'blanket
mortgage.' In some cases, a blanket mortgage might help bridge the gap
between your new property and your old one. A blanket mortgage is a loan
secured by two or more properties,sometimes making the loan payment lower
than the total outlay on two or three individual mortgages. The borrower
only has one payment and one closing. Usually this type of commercial loan
is made to developers buying many lots at once. But in this case, it would
combine your present mortgage and the mortgage on the home you want to buy.
When the first home is sold, part of the mortgage would be paid off, bringing
your payments down to where you want them to be. It is possible that the
lender will want to issue a release before the property is sold.  If equity
in the remaining property isn't high enough, a new mortgage (or mortgages)
could be required. Your local bank may not offer blanket mortgage since it
is an unusual way to solve the problem you describe. As with any mortgage,
be sure to check your costs, the terms of the loan, and interest rates
carefully.

I don't usually recommend blanket mortgages that secure multiple properties.
The combined equity in several properties securing the mortgage could be high.
In case of a personal disaster leading to foreclosure, the borrower might not
recover full equity. But, for some buyers with special circumstances, this
obscure financing method could work. Remember to weigh all of your options.

Blessings to your Real Estate Investment Riches,

Milton B. Yates
www.miltonyates.com

Investing in townhomes and condos is the NEW GROOVE!

It should be no surprise that sales of condominiums and townhouses are on the rise. According to the Urban Land Institute, single-parent households, single-person households, empty nesters, and couples without children now make up the majority of American households.

Many are choosing to live in the city where they are closer to their workplaces and where they can have a maintenance-free lifestyle.

And they want to drive less. One survey shows that residents of townhouses, condos, and apartments decreased vehicle miles traveled by 38 percent from when they lived in a single-family home. According to the American Public Transportation Association, ridership on public transportation jumped to the highest level in five decades in 2006.

While some condo buyers seek upscale units, many properties are reasonably priced. Some buyers consider them their "starter homes."

Residents of high-density housing say it's wonderful to be able to walk to places they want to go.

Blessings to your Real Estate Investment Riches,

Milton B. Yates
www.miltonyates.com

Is today a good day to buy a HOUSE?

Trying to "time" a real estate market is not the best idea. Too many variables are involved. Real estate experts say the average price of a home will decline by 3 percent in 2007, but that average is for the entire country, not necessarily your home town.

Home sales are often triggered by the events of life such as an employment transfer, an increase in family size, a death, a divorce, or a pending foreclosure. These homes are available now, and people want to sell as soon as possible. Life's events are more likely to produce a favorable selling price than national statistics predict.

The best time to buy a home is when you are ready to do it. That means you have access to cash for a downpayment, you have private money, hard money, or a retail buyer lined up.

Getting ready to buy includes checking your credit to avoid errors on your credit report and visiting a bank to determine how large a loan you will qualify for. It's all work, learn an easier way when you get a chance.

Blessings to your Real Estate Investment Riches,

Milton B. Yates
www.miltonyates.com

Landscaping Sells Homes

Looking for a simple, inexpensive upgrade to give your property a selling edge?
 
Try some lovely landscaping.
 
It doesn't matter whether you are planning to sell this year or five years from now,
beautiful landscaping will give you very high returns on your investment now and
later. And, with landscaping, the value usually increases with time and a little TLC.  For
return on investment, landscaping rivals kitchen and bathroom remodeling, experts say,
but a simple landscape upgrade can be done for much less than either of those
interior upgrades.
 
According to Realtor Magazine, a minor kitchen remodel averages about $15,000  and
returns than 98 percent of the cost. Landscaping done well can return 100 percent to
200 percent of an investment and can be accomplished for an average of $5,000,
according to Money Magazine.

Sources differ on the value beautiful landscaping adds to a home.  However, estimates
range from a 10 percent to 20 percent increase in value. This Old House magazine
April 2003)puts the value at 20 percent. Smart Money magazine (March 2003) reports
that if you spend 5 percent of the value of your home on landscaping, you increase
the value by 15 percent.

Experts generally agree that landscaping should be modest.  Complicated garden
designs and vegetation that requires a lot of tending won't increase most home
values. f course, landscaping alone won't help sell a home in poor condition, but
it will lift a home's profile among similar properties.

Don't confuse landscaping with simple exterior curb appeal.  Nearly any property
can be made more appealing by keeping the lawns trimmed and mowed, removing lawn
ornaments, and judiciously placing flowers. Landscaping  involves more permanent
elements, such as ornamental and shade trees, flower beds, and water features.

If you decide to improve your home's landscaping, consider getting professional
advice from a landscape architect or designer. Even if you do the actual
installation yourself, getting professional advice can prevent some common
landscaping errors that actually decrease the value of your home. One typical error
is planting pine trees too close to the home. The trees may look nice when they are
small, but 20 years later an enormous pine tree can dwarf a home.  Planting the right
trees can make or break your landscape.

Blessings to your Real Estate Investment Riches,

Milton B. Yates
www.miltonyates.com
 

There are Many Ways to Purchase a Home

Although my methods are more renegade and non-traditional, we still need to know how regular people do things...lol...PAT ATTENTION!!!

Finance all of it, part of it, or none of it. Whichever you choose, you've got plenty of company.

The National Association of Realtors reports these trends:

Age: Buyers age 45 to 65 and older are less likely to finance a home purchase. They are often repeat buyers or are downsizing.

Average buyer: The typical buyer tends to finance 91 percent of their home purchase.

First-time buyers: They are usually younger and don't have cash from a previous home. Last year, the average first-time buyer financed 98 percent of their home. Nationwide, 40 percent financed the entire amount.

Sources of downpayment: Savings are the chief source of downpayment funds for home buyers in general and for 73 percent of first-time buyers. About 40 percent of repeat buyers drew on savings for a downpayment, while 60 percent of repeat buyers used the proceeds from the sale of a primary residence for a downpayment.

After savings, the second most popular sources of funds for first-time buyers was a gift from relatives or friends.

Types of mortgages: Loosely defined, mortgages are either fixed-rate or adjustable. Within these categories, however, specific terms vary widely.

About 71 percent of recent home buyers reported that they had a fixed-rate loan; 8 percent had an adjustable rate loan. First-time buyers were more likely than repeat buyers to start with a fixed rate loan that eventually had rates adjusted.

Some buyers start with an adjustable rate and then convert to a fixed-rate mortgage. Others begin with a fixed-rate mortgage that then adjusts the rate periodically.

Surprisingly, 3 percent of home buyers don't know what type of mortgage they have.

Blessings to your Real Estate Investing Riches,

Milton B. Yates

www.miltonyates.com

Make Sure You Have a Financial Plan!

With so many ways to spend your income, it can be difficult to set priorities. Financial planners at Charles Schwab Corp. say this is how to plan.

Pay off high-cost consumer debt first. Paying off an 18 percent credit card is like getting a tax-free 18 percent rate of interest on your money. Pay off the card with the highest rate first.

After that, save enough cash to live on for three to six months in case of emergency or job loss. And save at least something for retirement.

With a cash cushion in place, invest in your retirement 401(k). Invest at least as much as the company will match.

Put retirement savings before saving for your kids' college expenses. You can borrow for college costs, but you can't borrow for retirement.

Don't prepay your mortgage unless you are saving 15 percent of your income for retirement.

Insurance: Make sure homeowner and auto insurance are up-to-date. A full-time worker should have life insurance equal to six to 10 times their income. Consider long-term care insurance which will help pay for time spent in nursing or assisted living care.

Make a will to ensure that your wishes are carried out. Have a durable power of attorney and a health-care power of attorney.

Blessings to your Real Estate Investment Riches,

Milton B. Yates

www.miltonyates.com

Milton's 11 Rules for Building Wealth

1. Start early. By saving $1,000 a year at age 25, you could end up with five times what you'd have if you started at age 45.

2. Use your 401(k). You put in pretax dollars so it's a great savings plan. Passing up employer contributions is giving up free money.

3. Keep it simple. Choosing three or four index funds and a small-cap stock fund will give you broad exposure.

4. Don't try to beat the market. Even the best fund managers have trouble beating the S&P 500.

5. Don't chase trends. If you hear about a "hot" stock, investigate it. Go to investopedia.com.

6. Make saving automatic. If you are maxing out your 401(k), get payroll deductions transferred to a Roth IRA or a high-interest savings account.

7. Go heavy on stocks. The simplest formula: subtract your age from 120. That's the percentage you should have in stocks, the rest should be in bonds.

8. Hold down fees. Be wary of any mutual fund charging a management fee higher than 1 percent. Or stick with an index fund.

9. Get rid of credit card debt. Rank them by their interest rate and pay off those with the highest rates first. For low-interest student loans, consider making minimum payments and investing in your 401(k) instead.

10. Defer taxes. In a taxable account, you'll pay 15 percent in capital gains taxes every time you sell a winner you've owned for more than a year. At tax time, sell losers to take advantage of the annual $3,000 capital loss deduction.

11. INVEST IN REAL ESTATE

Blessings to your Real Estate Investment Riches,

Milton B. Yates

www.miltonyates.com

Save the REAL WAY!!! What if there's an EMERGENCY?

A rainy day could come your way

You might be surprised to know how many people live comfortable lives but have saved little or nothing.

Most believe that if they made more money, they would save. But it doesn't work that way. When the raise comes, they increase their spending instead of saving. That's why there are six and seven figure earners who are broke and in debt.

They may think saving deprives them of something. They fail to understand "pay yourself first" and don't consider the consequences of going further into debt when a cash need arises.

If you are among the non-savers, get your emergency plan on track. With many responsibilities, it might seem difficult or pointless to save just $20 or $30 a week. But within a year, $20 a week comes to more than $1,000.

If you consider your spending habits, however, you might find that you spend $5 or $10 per day on things you don't really need. Whatever you can put together, start setting it aside in an emergency fund. Having money automatically saved from your paycheck is an easy way to start.

People may say the way to security is to come into a lot of money or get a big increase in their income all at once. But that won't do it. People who handle money wisely, and people who don't, are found at all income levels.

Blessings to your Real Estate Investing Riches,

Milton B. Yates

www.miltonyates.com

Be Careful with the Pre-Construction Financing Programs

You've seen the ads in the newspaper and on television. Home builders and real estate developers offer great mortgage deals and bonuses to help you buy one of their properties.

Aside from the obvious, selling you a house, how do they benefit from these deals? The builder makes a little extra money. More importantly, using their affiliated lender gives them control over the transaction. It's less likely that a problem will delay the closing.

Today, more builders are offering special deals that may be tied to using their affiliated lender. A recent survey by the National Home Builders Association shows increases in the number of builders who offer to pay closing costs and provide other incentives.

Most buyers do use the affiliate. Pulte Homes, Inc., says 90 percent of its buyers who need a mortgage use Pulte Mortgage. Centex Mortgages finances 80 percent of Centex Corp. customers. By law, however, buyers can't be required to use the affiliate.

The National Association of Mortgage Brokers claims that builder-affiliated mortgages may not be the best deal. They say builders could reduce the price of the house and make the difference back in higher fees. The U.S. Department of Housing and Urban Development says it gets complaints from the mortgage brokers, but also from some individuals.

Before signing a mortgage offered by a builder, be sure to ask for a written estimate. The estimate should include the interest rate and points, plus closing costs, fees, and terms of the loan.

Be sure to get another quote. You can easily have another lender quote on the same loan on the same day.

Finally, compare the offers considering the mortgage costs and whatever deals are tied in to using the builder's lender.

Blessings to your Real Estate Investing Riches,

Milton B. Yates
www.miltonyates.com

If you don't have a 401(k)...you might want to GET ONE NOW!!!

Last August, Congress passed the Pension Protection Act. It encourages companies to sign up employees automatically for 401(k) plans.

Previously, only a third of eligible employees participated, but the new rules are changing that. The 401(k) plans have three compelling benefits:

* Investments are made with pre-tax dollars. Investments and interest earned are not taxed until you withdraw your money at age 59-1/2 through age 70.

* You get "free money." Employers can match contributions dollar for dollar. Typically, however, they match 50 cents on the dollar up to 6 percent of your salary, according to Fortune. Some match 25 cents on the dollar.

* The federal limit on your contributions is $15,000 per year or $20,000 for those age 50 or older. The minimum contribution is set by the plan.

A plan generally has a set of default options for investing your money. They are primarily balanced mutual funds and investment pools that include a mix of stocks and bonds. Some companies include target-date or lifecycle funds, which change the mix of stocks and bonds according to how long it will be before you retire.

Fund tracker Morning Star reports that balanced funds returned an average of 9.7 percent a year since 2004, making them a good choice.

Most 401(k) participants depend on the plan to make their investment choices. Participants who feel knowledgeable about investments, however, can make or change their own choices from various investments available within the plan.

Advisors at Fortune say letting your investments grow on "autopilot" with the plan's choices has paid off for most people over time.

Blessings to your Real Estate Investment Riches,

Milton B. Yates
www.miltonyates.com