Friday, February 27, 2009

111-TNG Radio - Ward Hanigan 2-28-09

Bruce Norris is joined once again by California trustee sale and foreclosure expert and educator, Ward Hanigan.

Bruce talks about Ward’s reputation that is so important in this business. Ward talks about why it’s so important to stay on top of current trends and how his students help him do that.

Bruce talks about the foreclosure problem and all the new “solutions” the government is throwing at the issue. Bruce brings up SB1137. Ward says this bill just delayed the inevitable and now they are coming back on the market. Bruce talks about fines being given out by the cities and how lenders are taking additional huge hits by way of code fines. Bruce met with a Southern California city that says they hired four employees that get paid only when they write code violations. He talks about a recent boot camp and a fine that was levied on the house for something silly. He sees fines upwards of $20,000 on some of these lender-owned California properties.

The quantity of foreclosures is making it difficult for lenders to handle it all. Bruce talks about the cities and counties that are now getting money. Ward likes the programs because a fair amount of the money is going towards the first time buyer assistance programs which help us. There’s also an $8,000 tax credit for certain buyers.

Ward’s view on the new Foreclosure Prevention Act won’t do much as there are plenty of investments that it won’t help. Ward talks about a large number of non-owner occupied homes that will be let go from speculators. Bruce asks where those stats come from because when he looks at County Records Research, Bruce finds that around 70% are owner occupied and 100% financed. Ward says some people coming to him say they were able to finance investments 100%.

Bruce talks about how quickly people went from a positive equity position to negative. Bruce asks Ward how he prepared for the downturn. Ward said he lined up lines of credit in 2006 but did not borrow on them. He owned several homes free and clear. He did a little spec building that worked out well at the peak. Now he’s in a great position.

Bruce asks Ward what he tells people who are having start over. Ward tells them to be a survivor and not a victim. They got caught up in the euphoria, don’t blame yourself, pick yourself up and start over. You have to get over it and get started on something new.

Bruce hears every quarter that now is the best time to buy real estate. Ward says as Option ARMs adjust it will only get better. Ward likes to eat every day and he feels the same way about investing. He makes money in all times of markets. It’s about the deal considering the market you in. Trying to time bottom is not important.

Bruce asks Ward how important it is to him to have his basic needs being taken care of automatic pilot. Ward’s “Dingbat Retirement” program has made him very happy. It’s important for him to have his keepers paying him every month. He has retirement section 8 that’s done quite well. Putting himself in this position allows him to make much more calm and wise decisions.

Ward rents to a very unique group of people. Ward rents to retired individuals. Ward learned early on he wanted to rent to those in their last 20 years of life. He wants people with no job and people who were settled. Retirees want peace and quite, individual units away from other people, don’t have to have a garage, no need for a yard, and overall just want something that’s simple to maintain and is cheap. Bruce asks what the age of these homes are and he says they are typically from the 20s.

Bruce asks about neighborhood safety. Ward says that it’s not too important. They want level ground for safety reasons and they, of course, don’t want heavy crime areas.

Bruce asks how Ward advertises his homes and gets the right people there. The inventory he has helps with that. Ward’s average turnover is 17 years. Ward is looking forward to picking up more.

Bruce and Ward talk about Fannie Mae raising their loans to investor back to 10. Bruce talks about the confusion between speculator and true investors. Investors need to be part of the market. We will need more than 10. foreclosureforum.com

Ward Hanigan is a full-time foreclosure specialist and trainer in San Diego County. He brings you over 37 years of real estate experience, with a degree in Economics and a Doctorate in Law. He has worked in California's foreclosure market exclusively since 1982, and as a consequence he has extensive experience finding cash, researching title, handling evictions, rehabbing, reselling, consulting, and is a "one-on-one" trainer and mentor to some of the most successful foreclosure practitioners in the Western United States.

Next week is Tony Alvarez.

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Friday, February 20, 2009

110-TNG Radio - Ward Hanigan 2-21-09

Bruce Norris is joined this week by California trustee expert and trustee sale trainer, Ward Hanigan.

Ward talks about training people about trustee sales from different states. He does so to train investors how to specialize in their area. Different states handle foreclosures differently and he makes sure he caters his training to the area they are investing.

Is the foreclosure explosion good or bad? Ward says its good it’s mind boggling. Comparing it to past downturns, there’s nothing like it. Credit is frozen, the stock market is bad, and unemployment is way up, it’s a bad combination. This is definitely the worst downturn he’s seen. Bruce says the speed has been surprising too.

Bruce asks what niches Ward sends people to. Ward says there’s some niches that work and some that don’t. Bruce brings up a sample of a 10 year old house that went to trustee sale that had no equity. Prices have really got hit hard.

Bruce asks Ward why people are losing their homes. Ward apologizes for his abruptness but says he doesn’t really care. He tried to figure it out but the end result is still the same. You can’t change personal situations and it’s whether or not you are going to purchase the house.

Ward says anything negative, including unemployment, frightens the average person. There’s less competition right now. That’s good for investors. Bruce says that many people think the foreclosure business is simple. Ward sees too many people who don’t do their due diligence and are buying seconds. Google Earth photo and Zestimates aren’t real research. No one helps other investors at trustee sales and even if they did, the person probably wouldn’t believe it. It’s a pros game and not to be taken lightly.

Ward talks about trustee sale buyers and how it is typically the only thing they do. It takes a lot of research and you don’t have time to do other things. Bruce says he knows very few trustee sale buyers that do other investments strategies.

Bruce and Ward discuss their first time bidding at a trustee sale and overbidding by $100. Both talk about if you don’t know your information, you better not show up. Ward teaches his students to over analyze the deal so they’re filled with confidence and nothing can rattle them.

Bruce and Ward talk about lenders now lowering the specified bids at auction. Ward says they are doing it so often and frequently he’s worried about competition showing back up. Bruce asks how much warning you get. Ward says hardly any if at all. Lowering the bid at the last minute doesn’t have the desired effect. If they don’t let the investors know, the investor can’t do the research. Some lenders are posting one day in advance.

Bruce and Ward discuss some new terminology they are using at the trustee sales. Drop bid means the bid is going to be dropped. It could also mean the lender can raise it on you, it becomes almost like a reserve auction and the caller is bidding on behalf of the lender. The lender, in this case, is fishing. Specified bid means the purchase price is dropped and it’s in essence an absolute auction. Ward talks about what he does with that information at the beginning of the sale.

Bruce talks about title. In the trustee sale business, you MUST have access to that information. Ward says title companies need the work. Now is the time to work with them and ask for access in exchange for a partnership.

Bruce and Ward talk about how Ward got into the business of foreclosures and trustee sale investing.

Ward says he is getting back to trustee sales now. He says people laugh at him because he still does it but he loves it. He’s putting together funds now to invest more.

Ward joins us again next week for the second interview. You can find out more about Ward Hanigan and Foreclosure Forum at foreclosureforum.com.


Ward Hanigan is a full-time foreclosure specialist and trainer in San Diego County. He brings you over 37 years of real estate experience, with a degree in Economics and a Doctorate in Law. He has worked in California's foreclosure market exclusively since 1982, and as a consequence he has extensive experience finding cash, researching title, handling evictions, rehabbing, reselling, consulting, and is a "one-on-one" trainer and mentor to some of the most successful foreclosure practitioners in the Western United States.


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Friday, February 13, 2009

109-TNG Radio - Mike Cantu 2-14-09

Bruce Norris is joined once again this week by California investor and property manager expert, Mike Cantu.

Bruce asks about how Mike feels about the use of leverage in this market. Mike says leverage when buying at the right price is fine. Finding the long term leverage is the issue. It’s a challenge because banks want fully qualified and documented loans and stated income is out for investors. Bruce thinks this will change because they’ll have no choice but to open up to investors. It getting over the issue of investors being considered the “speculator” and everyone realizes we’re part of the solution.

Bruce asks Mike what his long term rental would look like. Mike goes into details exactly what he looks for in long term holds including structure and neighborhood. Mike and Bruce also talks about paying a little more for property that is premium. Both talk about neighborhoods and why he likes certain types.

Mike goes into a little more detail about renters and what he looks for when considering renting to a consumer. Mike goes over his job description concept. It’s truly unusual for the renters to hear what Mike has as expectations. Mike says a few people get offended by his direct questions but he ends up with some of the lowest turnover in the business.

If he and the renter make it to signing the rental agreement, he hopes that the renter forgets what he looks like because he never has to hear from them and visa versa. He rarely sees many of his tenants because of correct tenant selection.

Mike talks about liking to rent to blue collar workers. He loves tenants that fix things along the way and then sends him a receipt. Better to solve problems as they come up instead of letting them turn into big problems.

Bruce talks about questions Mike asks that are legal on the first meeting. He says humor and personality are important. Mike talks about things you can’t talk about as outlined in the Fair Housing Guidelines. You can’t not rent to people because of moral issues so be careful and understand what you’re getting into.

Bruce asks what the biggest surprise was that a renter ever gave Mike. Mike talks about a few good surprises and some bad experiences.

Bruce asks Mike about Section 8. Mike says he has mixed feelings about Section 8. Mike likes to be a little more independent. He has seen good and bad. The biggest issue comes with inspections. In his experience, houses don’t break themselves. People break houses and inspectors expect you to fix what renters break.

Bruce asks about rents and if he expects them to go down. Mike has seen his rental market get stronger as people move back to his area that had once gone to the high desert but have now foreclosed. He had a few vacancies but once they were fixed they were rented within 30 days. He says he’s even done a round of rent raises this year and no one has moved.

The biggest mistakes are buying the wrong house and overestimating rent. You can’t be way over on rent. Investors have to do their homework on the tenant and accepting a person check for deposit and first months rent is a huge mistake.

Bruce asks about who handles evictions. He’s been very unhappy with services and luckily he doesn’t have very many. He’s seriously thinking about taking them on himself again.

Mike does not use a property manager and he urges people to learn what it is that an investor is about to pay somebody else to do.

Mike talks to Bruce about the time it takes from an REO purchase to rehab to rental. Mike would like people to start doing houses one at a time and not try too many at once.

Mike is teaching his “Rental Properties and Management” seminar live for the first time February 21st in Riverside. This course is being presented by The Norris Group. Visit thenorrisgroup.com for more information. Next week, Ward Hanigan!

Mike Cantu is undoubtedly one of Southern California's best real estate investors and a long-time friend of The Norris Group.

Mike Cantu has been a full time real estate investor for over 25 years. This is round three of a down market for Mike. He runs a buy/sell operation, wholesales, and manages a rental property portfolio.

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Friday, February 6, 2009

108-TNG Radio - Mike Cantu 2-7-09

Bruce Norris is joined this week by expert investor, Mike Cantu.

Bruce starts by asking Mike what he did before real estate. Mike talks about his background in professional skate boarding. Mike moved from being a skate boarder to a very young start in real estate. Bruce says in the 1980s the interest rates were not that great so was curious why Mike liked real estate. Mike Cantu talks about an info commercial that changed his life and how he started.

Bruce asks Mike about his education and why he is such a supporter of education since he’s already so successful in the business.

Mike talks about his long-term plan. He’s really built as a buy and hold guy. Mike talks about his overall strategies and his mentors.

Bruce asks about the difference between a “B” and “C” neighborhoods and how Mike chooses which properties he’s interested in holding. Bruce and Mike talks about how important being able to purchase below market was to his business.

Bruce asks Mike if he thinks 2009 will be the best buy and hold opportunity we’ve ever seen. Mike thinks that this year will be a great year. Prices for houses are very low in some areas and rents are still relatively high.

Bruce asks Mike where he’s buying his properties and how long it’s taken for some of the properties he’s buying to close. They discuss the extraordinary price declines. Mike says he’s still contacting people directly but not as much. He says 2/3 of sellers are still in denial of what’s happened in the market.

Mike and Bruce discuss about carrying paper to have deals make sense. Mike says he did that he did that in the 80s and 90s but not as much recently.

Bruce asks Mike if he had to do something over in 2006 what would it be. Mike says take a two year vacation! It was a lot of work for sometimes little results.

Bruce and Mike talk about different strategies and how it changes the outlook on what real estate is going to be for different investors. Mike has a large portfolio of rentals and he knew prices were going to fall. Mike has a different philosophy. He wasn’t too interested in leveraging them all to the hilt. Mike says he saw leveraging work for some and others it was their downfall.

Mike talks about each of his houses and having a job description for each one. Mike doesn’t plan to touch any of these. Sometimes people feel it’s sometimes unsophisticated but “unlocking equity” has its own risks and Mike says he’s very clear on what his portfolio does. He heard horrible stories of people’s lifetime of work being wiped out by being too risky.

Mike discusses his two piles of houses and his goal for each pile. Bruce asks how he thinks people can get back on their feet if they have lost everything. He says go back to the basics.

Bruce asks about his calmness level over the past few years as the market has tanked. Mike says he planned for this and knew it was coming. He went through it before and was determined not to make the same mistakes. Bruce said he was glad to go through the 90s. Going through the pain makes you learn some important lessons. Going through the 90s for both Mike and Bruce gave them a very different outlook and respect for down markets and they’ve done things very different this year.

Mike is teaching his Rental and Property Management Seminar for the first time in conjunction with The Norris Group coming up February 21st. More information available at thenorrisgroup.com.

Mike Cantu is undoubtedly one of Southern California's best real estate investors and a long-time friend of The Norris Group.

Mike Cantu has been a full time real estate investor for over 25 years. This is round three of a down market for Mike. He runs a buy/sell operation, wholesales, and manages a rental property portfolio.

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