Prosper Newsletter: August 2006 > Real Estate
You understand that the following information is educational in nature and is not intended to be legal, accounting, or tax advice. You are responsible for your own financial decisions and should consult your own legal, accounting, and tax advisors before making your financial decisions.
New Orleans Distress Turns Into Investment Dream; Help For Hurricane Victims!
I just wanted to thank you for the help these last few weeks. I now have 6 houses under contract. Ten other motivated sellers are asking us to sell their destroyed New Orleans homes. I made 35k two days ago and I'm just getting warmed up. We now have buyers in other major markets on our list and appointments with investors to flying in and tour all of our discounted New Orleans wholesale properties. In addition to this I am setting up a foundation to donate housing and labor to teachers and musicians that were affected by hurricane Katrina. Really anything that would help the community but right now it seems that would be a good start.
- Daniel L.
Metairie, LA
PMI (or Private Mortgage Insurance) is charged with home buyer's decide that they need or want to put less than 20% down on the purchase of a property. PMI is designed to help lenders feel safe making loans to buyers who can only put a small amount down. Most purchasers who have to use PMI because of a low down payment pay a monthly premium for the policy to insure their lender. This policy will typically stay in tact until the owner has achieved at least 20% equity in the property (typically the policy must stay in effect for at least a two year period before it is canceled). Once the buyer believes they've achieved at least 20% equity in the property they can request that the insurance is canceled, however, before the request is honored the owner must pay for an appraisal to prove the value. Since years and years may sometimes pass before 20% equity is achieved and because appraisals can often be quite expensive the total cost to carry PMI on your loan can be a strain.
Other options for dealing with Private Mortgage Insurance include paying it upfront as a one time fee. Not many buyers seem to realize that for approximately 1% of the purchase price they can pay for PMI in one lump sum and not have a lingering monthly fee. This eliminates the need to wait for a 20% equity position to be free of the charge. It also saves buyers hundreds of dollars that they would otherwise have to spend at a later point for the appraisal required to prove value and drop the insurance. The 1% upfront PMI charge can be rolled into the purchase price and financed along with the rest of the home (as long as the home's original appraisal comes in high enough) or it can be paid in cash upfront. Another option for avoiding PMI costs along with hassles the program sometimes presents is to get what is often referred to as "Piggyback financing". When this type of financing strategy is used the buyer will typically obtain an 80% first mortgage and a separate 20% second mortgage. By combining these two loans a buyer can come in with no down payment at all and still make the first mortgage holder feel secure in their position. The benefit is that the buyer won't have to pay any PMI costs at all, however, one draw back of this approach is that second mortgages often carry higher rates and fees which can negate some of the savings. It's important when dealing with PMI to know your rights and your options. Weigh in advance which approach might be right for you … and don't be afraid to ask questions.
MyProspectPro.com
Features:
- Motivated Sellers
- Bank owned properties
- Easily qualify all prospects with little effort
- Property data research
My Prospect Pro is a property prospecting tool for real estate investors. It contains a database of leads throughout the United States, as well as several other tools for use with their investing.
Leads
Leads in the database include FSBO properties as well as bank owned foreclosures properties. Once the student's account is activated, they will be able to specify up to 300 zip codes in whichever markets they prefer to invest. They can then search and call on as many leads as they like. The leads within the database are free to call on and available to everyone who has access.
Premium Services
The system also contains advanced features including the "On Demand Assistant" and "Property Profile" tools. These tools are features that come standard with membership and can later be renewed or upgraded by purchasing additional "Qualified Leads". These tools will give the student the ability to further qualify the prospect with little effort on their part. They can have a personal real estate prospecting assistant that will work on their business when they can't.
On Demand Assistant Leads
Students receive Ten On Demand Assistant (ODA) leads to get started and can purchase additional leads later via the website at $20 per lead. With the screening the student will also receive a report with important property data which is called a "Property Profile".
Activation
Your account will be activated within 3-5 business days from your purchase. An email will be sent out to the email on your account with login information and helpful tips for navigating through the site. To login in, go to www.myprospectpro.com. There is a box for a serial # and a login box. You will never need the account serial # because the account is already enabled. Use the username and password provided in the email. Once in, notice the LIVE NOW operator. This is a tool that allows you to ask questions to support. Since you have to login to your account in order to access the LIVE NOW chat, the customer support will know who is contacting them. If for some reason you are not able to login, you may reach My Prospectpro.com by calling 888-596-5313 or emailing Randi at randid@4realestateleads.com.
