Lancelot's Blog

Rescuing Property Values

2008-05-21T12:57:01Z

One of the things that I am most passionate about in my life is animal rescue. I have a great fondness for all animals and I am without any doubt that dogs truly are man's best friend. If you've taken the time to look at the Kettler Kares section of my website you know that helping our furry friends is one of my life's missions. Whenever I am at a rescue center or adoption event I am overwhelmed with joy when I see a canine friend adopted by a loving and caring owner. Sometimes the animals have seen some difficult times. They aren't quite themselves, they're unkempt at best, injured at worst. But it is always amazing to me how different they look after a bath and a little TLC. The transformations are amazing.

A friend recently pointed out that my love of REO property is similar to my love of dog rescue. I hadn't ever thought of it quite in that way before. But upon closer examination I definitely see what she means. I love looking at an empty house and looking beyond the neglect to see all of the possibilities. I love matching a home to a prospective buyer and knowing that there is a mutually beneficial relationship about to bloom. I love driving by months later and seeing the home happily occupied, the lawn trimmed and flowers in the flower box. I derive great satisfaction out of seeing things of great value that have been overlooked restored to their rightful place of happiness and respect.

If you have a loving home and would be happy to welcome a furry friend into your life, make sure that you check out Kettler Kares for suggestions as to where you can adopt a pet in need of a home. If you are interested in purchasing an REO property, savings tens if not hundreds of thousands of dollars while at the same time building equity please contact my office so I can show you the homes available for adoption.

Could've, Would've, Should've

2008-05-21T12:31:44Z

By Lance Kettler

Is there anything you wish you'd done, but didn't? What about right now? Is there anything that you are doing that you think you might beat yourself up about in 20 years time? I'm more interested in what you aren't doing. What aren't you doing right now that is going to lead to a Could've, Would've, Should've moment in your future?

Nobody can look into a crystal ball and tell the future, so I don't even try. But what about looking back? There are lots of lessons to be learned from the past. Everyone seems to be talking about the recession these days, are we in a recession, are we not in a recession? The funny thing about a recession is that by definition in can only be called a recession after the fact. We can only see true recessions in the past never in the present.

What can we gain by looking at recessions in the past? First the reassurance that recessions happen, they are survivable and they pass. We can also see that recessions are the period of time before a period of growth. It isn't a coincidence that millionaires are made in recessions. A smart investor who is willing to shop for bargains can certainly find them in times of economic strife. Then when times improve the investor finds themselves holding property that is valued at significantly more than they paid for it. This is how millionaires are made, its called buy low, sell high.

As you've probably heard, prices are low now. In the REO market they are even lower. I have clients who are purchasing property for 20-30% below market value. Even by today's standards they have a valuable property and as the market rebounds their investment is going to grow. You can make the same choice or sometime in the future you could be saying I Could've, Would've, Should've. The choice is yours.

REO Treasure

2008-05-21T12:29:15Z

REO Treasure

By Lance Kettler

Do you like to hunt for treasure? Some people like to hunt for antiques. Some people like to find bargains on EBay. Others like to hunt for real estate bargains and treasures. I have to admit I love to hunt for treasure.

REO treasure comes in all different sizes and neighborhoods. Not everyone is interested in looking for treasure and sometimes the treasure is somewhat hidden. Some people walk into a home and are unhappy if they see flaws.

For me it depends on the flaw. For instance if I view a home that has multiple repair issues, a hole in the wall, a missing lighting fixture, a damaged counter top, I don't think, "What a shame." I literally hear a cash register singing "Chu-Ching" because I know that although these are minor repairs and easily fixable they are going to force the seller to lower the price significantly.

Of course there are some flaws that I do say "What a shame." If a repair is so extensive that it means that a home will not be able to be lived in for a significant amount of time, or if the repair is so expensive in nature that not even a concession on the seller's part makes the sale worthwhile, then the home cannot be viewed as treasure. Treasure is only treasure when the value can be seen with only a minimal amount of polishing.

The good news is that there is more treasure available right now that at any other time in our lifetimes. If you are a serious treasure hunter, you don't want to miss this opportunity. Give me a call and let me welcome you to the hunt!

Buy in Your Own Back Yard Part 2

2008-05-16T13:53:25Z

To bring this story home, I want all of you to look in your own backyard FIRST. I mean this. People here in Los Angeles have been saying "Gee, I can't buy anything in town for under 500k." Well I just saw a home, a 2 bedroom home, on a smaller lot for $324,000 in an OK neighborhood. So why would I go to Florida, buy a condo in a seasonal market, pay a property manager 10% of the seasonal rental, only find out I cannot secure a stable monthly income from a tenant?

My advice is until you slick your hair like Donald T, stick to your own backyard. Map out a territory and search diligently on every street in that grid. Get out of your car and ask the neighbors who might be moving, who got divorced, or relocated. Work with a local broker. Remember it does not cost you a dime since the commission is paid almost always by only the seller. You might be surprised by what is becoming available in your own area. Sometimes the best deal or advice is right there in front of us and we are blind to it.

Speaking of missing the obvious, did you see my socks? Yeah the ones with my name ironed in them. I know they were right here a moment ago! Get my drift here?

"Buy in your own backyard" Part 1

2008-05-09T14:29:20Z

I am telling you to buy real estate in your own back yards.

When you become interested in buying real estate beyond that of a primary residence, you may be lured into investing into our of state rental properties or second homes.

DON'T DO IT!!!

Well at least not until you read my blog pertaining to "Familiarity and bottom line profit."

I had breakfast recently with a friend who old me he had invested in 4 houses/condo, all out of state within the past 2 months. He had attended a seminar of a self proclaimed guru who prescribed some that was going to make him and his wife rick in real estate.

To illustrate my point of familiarity, here is part of his saga. One of the properties my friend bought was a townhouse in Florida. So far so good, except as they tried to rent out the unit, the market tanked, and the builder could not unload his inventory. The builder today still owns over 50% of the 300 town homes in his project and they are all vacant!

Imagine having 150 homes in your real estate portfolio and they are all vacant, burning the biggest hole in your bottom line profit game! My friend has a property manager who for the past 5 months cannot rent out his unit. Now he will have the competition of the builder, who in a desperate move will hold on to the units and rent them until the market regains strength. Sounds like a huge REO debacle in the making. I know I should have been a psychic.

Understanding the REO Investment Part II

2008-04-29T21:14:46Z

by Lance Kettler

Most of us are interested in saving money, especially in today's economic climate. In general a home is the largest investment an individual makes in a life time. So it stands to reason that if you could save a lot on your home purchase while still buying a home of great value, it would be a worthwhile venture. This is exactly what the right REO purchase can do for you.

As we have talked about before a REO property is one that is now owned by a bank or lender. In today's market there are a tremendously high number of REOs, the number is high in part because of the large number of foreclosures. An REO is a liability to a bank or lender. While it is in REO status it is not creating income, it is simply costing the bank money. Additionally, a large inventory of REO properties doesn't exactly inspire confidence in investors. So banks are highly motivated to sell their REO properties.

Keep in mind, this doesn't mean they want to give them away. We've all heard the urban legends of being able to buy a house for 50% of its market value and unfortunately that's all it is, Urban Legend. But REO property is moving for between 10 and 40% below market value, which is still a substantial savings. Look at it this way, if the REO property you purchase is appraised at $1 million dollars and you bought it for 20% less you ended up saving $200,000. Not bad for a day's work.

Because lenders are motivated to sell to a qualified buyer, they will often make concessions that are worth additional money. In some cases they will either make repairs to the property or grant an allowance for the repairs. They have even been known to offer a lower interest rate as an incentive to purchase the property. Working with a motivated seller is always a buyer's advantage.

Check back for the next installment to learn how REO hunting is like treasure hunting!

Understanding the REO Investment Part I

2008-04-28T11:40:56Z

How would you feel if you missed out on the deal of the century? I don't want you to find out. I said in an earlier blog that it really tears my ticket that so many people are charging tremendous prices to educate the public about REOs. I think of this blog as REO 101. Pull up a chair and learn what all the excitement is about.
As you may already know an REO property is one that has gone through the entire foreclosure process, including an auction and did not sell. The property has now reverted to the bank/lender that held the note. Now the bank/lender will sell the property in order to recoup their initial investment.

Here are some important facts to remember. I will discuss each at length in future blogs.

Banks/lenders are not in the real estate business, nor do they want to be. It is not in their best interests to keep an inventory of REOs as they are a financial liability to the lender. Translation: They are motivated to sell!

REO property has many advantages over purchasing foreclosure properties. You can inspect REO properties at your leisure and if there is a tax lien on the property it is frequently forgiven. Translation: When you purchase REO property you know exactly what you are investing in.

Banks and lenders prefer not to advertise their inventory of REOs - it's not good for business. Translation: In order to find the right REO for you, you need to be working with the right REO specialist who has a working relationship with the bank/lender.

When banks/lenders sell REO inventory they are looking to recoup their original investment as well as the costs incurred in the foreclosure process. Depending upon the size of the original loan an REO property can sometimes be purchased for between 10 and 40% less than market value. Translation: Bargain!

At this point you might be thinking, "Wait a minute, if this property didn't sell at auction it probably isn't worth purchasing." In some cases this is absolutely true, but not in all cases. This is why I train my clients to look for value. Often a foreclosed property won't sell at auction because tax liens on the property make it ill advised to purchase. However as we discussed above that tax bill is frequently forgiven if the property becomes REO.
Purchasing REO properties takes patience and know how, but it can really pay off.

Make sure to catch the next installment of Understanding the REO investment as we go further in depth with this superlative opportunity.

REO for the 1st Time Home Buyer

2008-04-25T10:27:13Z

Congratulations on being ready to purchase your first home. You probably could not have picked a better time. Chances are that 3 years ago you were wishing that you were in a position to own a home. Now that you are ready you might be hearing a large amount of conflicting advice. Buy now, don't buy now, it seems like everyone has an opinion and they are all conflicting.

Hopefully I can be the voice of reason in the cacophony of real estate predictions. Here is the common sense guideline that really gets to the bottom line. Value is value. What does that mean? Markets are going to fluctuate, they always have and they most certainly always will. When you own something of value you can survive any market. It's important to look at cost, but always remember to factor in value.

If you are a first time home buyer and want to score a great bargain with high value then you certainly want to take a look at what the REO market has to offer. Give me a call and let me show you the value that is available to you.

REOs on the Rise!

2008-04-24T13:02:51Z

ForeclosureS.com, one of the most recognized authorities in foreclosure statistics is reporting that REOs are up more than 70% in the first quarter of 2008. This number comes as no surprise to those of in the real estate business. We expect for the number of REOs to rise over the next few months as more and more of the ARM loans reset and home owners are unable to meet the new adjusted mortgage payment, refinance their homes or sell the home quickly for an equitable rate.

This large amount of REO property entering the market is potentially a once in a lifetime opportunity for investors who are looking to make a long term investment in the real estate market. If you are interested in positioning yourself with valued real estate for bargain prices you need to take a look at what the REO market has to offer.

In all areas of real estate it is important to have the right professional representing your interests; this is especially true in the REO market. Banks and lenders are reticent to release their property holdings list to the public. If you aren't working with the proper professional who has access to this inside information you can lose valuable time and information. We are the leaders in the Los Angeles REO market, contact our office and ensure that you are working with the highest caliber professionals in the business.

REO: The Hot Investment Opportunity of the Decade

2008-04-22T21:29:06Z

Why are REOs so hot right now? The simplest answer is that there are so many of them. With a record number of homes entering foreclosure and record numbers of homes going on the auction block, it only stands to reason there would be a record number of REO properties. As we discussed in the last blog REO means property that was foreclosed upon and did not successfully sell at auction. The property has now reverted to the lender.

Even in economically sound times there are REO properties. But in general a bank won't have a large inventory of REO properties. They don't want to have a large inventory of homes. They aren't in the real estate business and it actually reflects badly on the bank's business to have a long list of bad debts. Currently lenders are finding themselves with an increasing inventory of REOs. The upkeep and maintenance alone on these properties is expensive and undesirable for the lenders. They prefer to sell the property than to maintain it. This creates a motivated seller.

Across America we are seeing a large number of REOs entering the market on a daily basis, with motivated lenders looking to sell to qualified buyers. In some cases we are seeing REO property sold for record discounts at better than average interest rates. If you are waiting to buy your first home or to further invest in the real estate market - don't wait. Let me show you what the REO market has to offer you. You won't be sorry.

Next Up: Which foreclosure property is the best buy when there are so many foreclosed homes in the area you want to live in?

2008-04-18T17:02:11Z

Tying into our last article about "Foreclosure Logic," here are some tips when you set your sights on a specific community of homes.

Pay close attention to your surroundings. Is there traffic in the morning and/or evening that wind its way past certain homes as a shortcut to the freeway or major thru fare? Are there some homes in the tract that are on smaller lots or have only a carport vs. an enclosed garage? Are some homes protected from thru traffic because they are on a ul de sac? Do some homes back up to commercial buildings? Do some properties have an alley where others have no access (trash cans in the rear) out of sight vs. in the front yard? Are there restrictive homeowners rules that prohibit RV's and even cars from being parked out in front of the homes?

These are just a sample of fact finding questions you should ask in determining long term value. Remember in the biggest picture you are "buying this house for what the next buyer wants." Sounds confusing? We will answer this next on Lance's Blog.

Lance Kettler answers: Why REO? Why Now?

2008-04-17T20:53:09Z

Chances are that some time in the last month some one has said REO to you, and they weren't talking about the band from the eighties. REO property, which stands for Real Estate Owned has been one of the best kept secrets of the real estate industry for numerous years. Purchasing REO property wasn't something the general public was even aware of. Suddenly everybody's talking about it. What's the big deal? Why now?
I'm glad you asked. I'd be happy to tell you.

Let's start with a quick definition of what REO property is. If a home owner falls behind in their mortgage payments the lender will start foreclosure proceedings. If the homeowner is unable to get caught up on their mortgage payments the property will ultimately be offered at auction. If the foreclosed home does not sell at auction it becomes REO - Real Estate Owned by the lender. Once the bank/lender owns the property they will attempt to sell it to recoup their original investment.

You might be asking what's the big advantage of buying a property that no one wanted at auction? The first and most obvious reason is price; there is a sizable discount on REO property generally between 10% and 30% below market value. Frequently a property won't sell at auction because there is a sizable tax lien on the property that the highest bidder will be force to pay in addition to their winning bid. With REO, any tax liens on the property are usually forgiven. This can be a substantial savings over purchasing at auction. And when you buy REO you are capable of inspecting the property before you purchase, which is either difficult or impossible with auction foreclosures.

Is your interest peaked? Check back for my next installment when I explain why REO property is the hottest opportunity of the decade. Feel free to subscribe to my blog if you don't want to miss it.

The Best REO Advice

2008-04-16T16:06:38Z

Every time I turn around I see another ad for a HOW TO book promising to teach the reader everything they need to know about buying REO and foreclosure property. Then there are the endless ads for seminars offering to teach the same thing. It's mind boggling to me how many people are trying to make a buck these days off of educating the public about purchasing REO and foreclosure properties. Don't get me wrong, I'm all about education, but some of these seminars cost thousands of dollars and at some point every seminar, every book that is written on the subject says, "Find a Real Estate Professional who specializes in REO and foreclosure property" or something to that effect.

I happen to be one of those real estate professionals who specializes in REO and foreclosure properties. To anyone who is considering paying $29.95 for the newest book on the subject or $1,295 for a weekend seminar - consider saving your money. My name is Lance Kettler, I'm with Kettler Financial. Read my blog for free to learn more about buying REO property and the REO process. And if you live in Southern California give me an opportunity to be your financial expert on buying REO property. Take the money you save and invest it in real estate, you'll be glad you did.

Foreclosure Logic

2008-04-15T18:11:12Z

It is important when searching for a home to know that there is always a reason why a property went "REO". The first question I ask myself is "Why did these people just walk away from this home?"

Many times the answer is obvious. The owners lost their job, or an illness, or divorce. Other times the answer is subtle. The property is on a busy corner, or there is commercial in close proximity. When this is the case the owners make an "executive decision" to vacate, as the overall neighborhood is declining in value.

We are witnessing this in communities throughout the U.S. right now. Recently there was a front page article about a tract in Denver just south of the airport area. Blocks of homes are in foreclosure. Where people have little or no equity and have to pay a mortgage, property taxes and insurance, they cannot justify the expense, so they pack up and vacate. These same folks then rent in the same neighborhood for 50% of what they were paying for home ownership down the street. Example: Rent is $1,100, where principal is $1,860, property tax $240, insurance $95, and equals $2,195!

INTO ACTION... Kettler REO!!!

2008-03-31T13:02:53Z

This is an exciting moment in time for me and the company of Kettler REO.

My name is Lancelot Kettler. I have been active in the real estate industry here in Beverly Hills for 21 years. I grew up in Beverly Hills at 256 South Maple Drive.

As a loan agent for ten years at Home Savings of America, I met the movers and shakers, from Hollywood movie stars, to prominent doctors and attorneys.The interesting thing here is that I also funded the loans for the housekeepers and the gardeners of the celebrities from their referrals about me!

From owning my own mortgage company to being the " in-house" loan rep for the number #1 Coldwell Banker office in the Nation,known as Beverly Hills South. In reflection, I have fulfilled a lot of my objectives professionally.

At Kettler REO, I bring all the professional experience gained from institutional training coupled with a compassion and personal touch to my help clients acheive their goals.

It is my hope to offer all participants here a forum to discuss what is going on in my world of REO business plus welcome any related questions to Beverly Hills real estate in general.

Oh, and just to let you know, the air is just the same here in Beverly Hills, and people still get a traffic tickets, and toilets still back up!

Lancelot Kettler