I have been looking around and I would like to get into the real estate investment area. I have little experience in this area, Could you please send me some information on how the passive investor program works, I have the 15,000 to invest, I would just like the particulars. Thanks! Scott 

I am an entrepreneur as well, and after life has thrown not one but two or three curve balls my way I have lost all positive perspective I used to have and am just plain tired! But I need my life to be different, better. I have people depending on me and I would like to get my life on track again. I used to be a Covey consumer, but I am so tired mentally, spiritually and physically, with things only seeming to get more difficult the more I try, that its an effort to even care. My faith has dwindled to a hope. There could be some positive changes for me in the horizon, but I'm afraid I won't be ready for them. Signed, Awaiting some direction.
I'd also think of the people who I most wanted to benefit from my success my family, and keep them fresh on my mind. Then there are those who had treated me like I couldn't do it, become successful. Who had thrown me curve balls. I wanted to prove I could! I'd keep these things on my mind all the time. To push me forward. To get me to reach down deep inside myself for the extra strength I sometimes needed to keep going, and to pray for strength when I just felt I had no more.
What choice was there really? To stay in a rut, or never give up until I made it happen.
No it wasn't easy, infact it was hard! I had many years of struggle however, it sure has been worth it!

I would really appreciate any insight from you. I'm currently reading your book "Get Rich Foreclosures or the Reality of Foreclosure Investment". I like it and boy I have a lot to know and learn. Looking forward to hear from you soon. 
Thanks Nadia

Dear Allen, I have recently purchased Carlton Sheets "No Money Down" coarse for the second time. I run a Life Insurance agency and have always wanted to get into real estate.  The problem I have, is I just don't seem to be able to follow the 1st and 2nd morgage, sections OR creative finacing part. I am smart enough to run a 25 person agency at 32 years old and be ranked #3 in the U.S, but for some reason this section HAS ALWAYS kept me from following my dreams and goals to get involved. I then saw your ad when looking for property and found your web site. Do you do walk thru classes, step by step (in laymens terms) or even one on one consulting? 

My seminar is jam packed with meat & potatoes information because I'm simply not a puff & fluff kind of guy. The out line is on the web site of what I cover. I also offer a mentor program.  And I would be happy to answer a specific question for you.

When I watch the tapes or seminars the problem is, it seems the people involved understand morgages already. I look forward to hearing from you and am a firm believer in following successful people. It is mandatory in my agency to read motavational books and listen to tapes. Successful people are successfull for a reason, they don''t try to reinvent the wheel, they go to the inventor and ask for help. THANK YOU SO VERY MUCH,  ERIC N

I appreciate your insight. Keep that attitude up, keep moving forward, you'll get there, and most important you'll positively influence others along the way as your already doing and more!

Thank you for replying, I was in the middle of ordering your book online when your email came thru. I believe I may try to get into your next seminar.  When is the next date?

April 5th. You can call 219-979-4607 to reserve your seats. Last one was sold out. 

 and bring a friend. We were looking at purchasing a bar, but feel this is a much safer investment. Thank you again, and look forward to meeting you soon.  Sincerely Eric N

Personally, I would say real estate investing in much better.!

Hi Allen, I was just wondering if you had "sure fire" tactic for getting people to respond to you while they're in their denial stage during the pre-foreclosure period. I have three great prospective properties and have one phone number. The other numbers are unlisted. I've tried cross-directories to no avail. I've sent them all a letter introducing them to me the concept of helping them out of at least part of their problem. I left my cell number as a call-back, but nothing's happening. I called the party who's number I do have, but they will never take my calls. Are these situations where I just have to wait for the inevitable - the auction? Andy V.
Sometimes. I would keep trying every couple weeks until they were finally ready to talk or it went to auction.

Hi Allen, I have purchased your book two weeks ago and right after I've finished reading your book I feel very confident about investing in real estate. Your book contains a lot of very useful information that were based on real life scenarios. I very much like the case in point section. 
Thank You!

I found a house that will be auctioned this coming March 11th. I did your research just like the book suggested. I found out that the judgement amount is for its second mortgage. It has a federal tax lien of almost $20K. The owners still occupies the property and they are in their late 50s. The guy is deaf.
So you would be bidding on the second mortgage and willing to pay the 1st as well.

My questions are as follows: 1) What happens to the federal tax lien if I successfully get a hold of this property? 
I bought one once with a $27,000 IRS lein. It was wiped out. Wouldn't hurt to contact
them to verify their position on the matter.

2) How would you deal with the owners in this case after successfully getting a hold of the property? 
It really depends on the circumstances. Bottom line is, if I want a tenant and I like them, and they prove the ability to pay, it is easier to keep them on. Otherwise, they have to move. I may help them with 1st month's rent and security deposit. Also, talk with their other family members, who may know of the circumstances to help them.

3) Will a title company do a title search on a property that will be foreclosed? 
Sure as long as your willing to pay them, which is at risk if you don't win the bid. You could do your on track search through the county building. Let me know how it works out. Check out my mentor program on the web site. It has recently been re-structured.

Second mortgages at auctions. How does that work? Do you then pay off the first mortgage even if it has been kept current (not being foreclosed on)? Do you then after purchasing the 2nd mortgage, then purchase the note to the 1st mortgage? Please provide a detailed laymens explanation.
If you buy a 2nd mortgage at the auction you are then responsible for the 1st mortgage. It remains a lein on the property until you pay it off, or work something out with them. If you ignore them and not pay, they are simply forced to foreclosure. 
If you buy a 1st mortgage at the auction and the 2nd does not show to bid, they get wiped off, cleansed from the property as does all junior liens.
Thank You, Sincerely, J. Badal

Dear Allen,
I cant tell you how much I appreciate your book, and its personal inscription to me. I started reading it and didn't let go of it till I finished it the next day. It is indeed the real deal, the meat and potatoes. And Allen, after a long weekend of a lot of hot air and big talk at the seminar in Florida, the way you present yourself and the things you revealed about yourself in your book were very refreshing and appealing.
Thank You for your kind comments.
This is very new to me. I'm still in the gathering and thinking stage, reviewing my personal situation, considering the pros and cons. I'm leaning strongly to asking you to consider accepting me as a student should I decide to go forward-I cant imagine working with anyone else and I cant imagine doing it with out the mentoring of someone I could trust. Before I get too excited about that idea, is there any reason to think you wouldn't?
No. I do offer mentoring, you can check it out on my web site.
I realize that you are selective and also that the fact that I am hearing impaired may be a problem. But I hope you'd consider me as a student. Sincerely, Anna R 
We are only limited by that which we allow to limit us. Certainly, being hearing impaired is a nuisance. So you learn to work around it, reading lips, carrying a note pad, and it of course will sometimes work to your advantage, because people are generally sympathetic, and would say yes to you, when they otherwise would say no to someone else. You just conduct yourself boldly, with full confidence moving forward, not allowing it limit you anymore than absolutely necessary. And others will be inspired by you!

Allen, When I bought your book, you said I could email you with any questions. I have found a house to buy, and I have a BIG question. None of the banks I am contacting are willing to lend the full appraised value. They want 30% down because it is not our primary home, and more points on interest, etc. How do you ever get to do this? Are there special banks that will lend the full amount?
No. I'm not aware of any lender that would loan the full amount of value to an investor.
Scenario:Other houses in the area are worth $135K. I have made a deal for $100k. The house needs some work. I want to borrow the full amount of the $135.... I want to fix it up and sell it for market value with some of the money and I want to make some money too. They want to only lend 70% of the agreed selling price, with my putting 30% down. You would think that with $35,000 between what I am able to buy it for, and the market value of the homes in the area, that this would be the right house and the right deal....but what should I do??? 
Should I buy the house outright with cash and then get an Equity line? But some banks won't give an equity loan right away, you have to wait so many months. Also, the rate is then flexible instead of fixed, and they will only loan up to 80 - 85% of appraised value. If I put the $100k.back in my pocket, it doesn't leave me a lot to work with or have made any money as is outlined in the book. So I have to think there are banks that do this on a daily basis for investors, that don't penalize us. Right? Who are they, or what do you suggest I do? Thanks for your help! Barb B
Even in 1983 when I started this was a problem. I just kept searching until I found a lender who required no seasoning, and would allow cash back. Seek out lenders who are portfolio lenders, meaning they keep the loan in house, and don't sell on the secondary market.
I generally use cash first, fix, rent, and then refinance for cash back. Which means money above what I have into the deal. It is tax free money until I sell, if I ever do. 
The profit potential in this deal you describe. is not $35,000. You mentioned it needs work, and what about acquisition, holding, and selling cost. These are real numbers that need to be considered up front. Perhaps you don't have enough room in this deal.
Could you turn around and assign your contract to a handy home buyer, and make a little profit without actually owning the property?
Yes, depending on the actual numbers. 

Dear Allen, I just found your website and found a lot of interesting information. I will definitely invest in your books and sound advice. My question is... I found a seller of a home that will be going into foreclosure soon. After spending a couple hours talking with the seller, it came down to this... They just want out of their home. They want me to simply take over payments of their mortgage. I know that I need to insure the title and get the deed transferred over into my name with the witness of a notary public. What else do I do? Are all mortgages transferable? Do we need escrow if no money is changing hands? As you can see I am new at this and don't quite know how to go about doing this. Can you please inform me as to what steps to take? Thanks A Million! Terry J
It really depends on the specific circumstances. With the general information provided I will give you a general response. 
Just let them deed it over to you, and give you possession. No, you do not need to spend money for title insurance yet. The mortgages are not in your name, and you are not liable for them. By the seller deeding their interest over to you, whatever that interest may be, gives you control of the property. Now with that control you can order title to firm up what all the liens are. You should have the seller provide you paperwork, and contact information on all the liens they acknowledge. Also, have them sign a letter authorizing the lien holders to talk to you about their lien. Likely, the the home is over indebted thus the reason they are so willing to sign it over for nothing. That is OK, now you can work on getting lien holders to accept a short sale (discount) to create the necessary profit, or if that does not work out, you could rent the home and make the mortgage payments for a cash flow. If there is no cash flow, don't make the payments, rent until the banks takes back or agrees to a short sale. 
Just don't make any promises to the sellers that you may not be able to keep. You can only promise to work with the situation and make the most of it.

Dear Allen , About 5 months ago my bankruptcy was discharged. I am desperately trying to get a loan to refinance my 1st and 2nd mortgage into one. With a fixed rate and low interest. I a single mom one child in collage and it is getting harder to pay these two mortgages. Please help me in finding out who can help me? How long do i have to wait be discharged before refinancing? Can i have any bank refinance my second mortgage only with a lower interest rate? I AM LOOKING FOR A SOLUTION TO MY PROBLEM PLEASE HELP. Thank You
You should start with the company that has your 1st mortgage currently, see if they would refinance enough to take care of the 2nd, and give you a low enough interest rate to make it worthwhile. If not it is just a matter of keep shopping till you find someone who will. Some lenders prefer waiting a year or 2 after your BK, but there are a lot of lenders out there, so just keep trying it will happen if your persistent. Always ask what you need to make happen in order for them to be able to finance you or give you a better rate. So you'll know what to focus on making better.
Once you find someone to do the refinance, don't just ask the 2nd for a pay off letter, & don't tell them what your doing, just ask if they would consider discounting what you owe them to get all cash now. See how they respond. Good Luck!

Hi Allen;
Sorry I couldn't make the session you recently had I know hope everything went well. I have a question there's a woman I meet who told me when she purchased her property through Fha she was able to get money at the table simply by telling her agent to have the other(sellers)agent to change the price on the mls--first off had always been told that through fha you could not receive money at the table and through my broker that it would be unethical to change the mls price and against the rules; could you please expond on this----
Just that is correct. Anything done to deceive is not negotiation. It is simply deceit!
I found a single family home for 32,000 I'm having some contractors look at for me hence my question of changing the mls to get some money for rehab... Cynthia D
Just negotiate with the seller to give you an updating allowance at closing. You may even allow the seller to participate in the profits at the end of the deal for cooperating.

It has been so long since I needed to use someone else's money,  no I don't have a contractual form already prepared to give you. You could pay an attorney for something with a lot of hard to understand legal jargon. But likely if he were to stiff you wouldn't sue anyway, just pass the word and stay clear of him. So what I have done many years ago, and will now get around to preparing one for my course. But for you right now, prepare an agreement called Contractual Agreement, put by & between, put your names, and state what each of you agree to do and not do, sign it and move forward. Have a separate agreement for each property. You'll have to take a leap of trust and if it works out, it will be a good relationship. Sounds like your just giving him a lead that is going to the auction. You should go with him to the auction. 

Hi Allen, 
Patrick C here from Chicago. I attended your seminar in your home with my grandmother about 6 months ago. We have since invested in my grandmothers 3 flat building which was paid off. We applied and received a home equity line of credit. Appraisal value was 699,000. We have $150,000 available for credit. Since then we have invested in our own building. New windows for all units, 2 of the 3 units rehabbed (upper scale interiors, the finish of this project Feb 1) owe around 120,000 approx. We did a great job (learned the terrors of bad contractors). You probably wonder why we started with our own property. The area we are in is booming, also the property was in need of work and I wanted my grandmother to live nicely. After we finish with the work the building will appraise at 950,000. So a loss/no loss and increased rental. However we occupy the rehabbed units. My grandmother has never owed this much she paid something like $50,000 back in 1966. Now she is worried that she will ever be able to repay the debt. 
Tell her not to worry. My guess is you'll probably be inheriting the building at some future date, and tell her that your concern is for her to just enjoy
the years she has left as comfortably as possible.

I have read numerous books on working leverage OPM!!!! We did that now I want to do as planned and buy an investment property. I found one in Michigan near my moms home. Property is a total gut rehab. This is exactly what we have been doing at my grandmothers building. She is now apprehensive at spending more for more debt. The property is a repo. 25,000. The realtor said an offer for 20,000 was denied a month ago. Realtor commission is 1,250. I think an offer of 21,000 with financing or a check for 18-19,000 cash would take it. A friend of mine who helped with our Chicago rehabs estimated costs with me and found a rehab with middle class amenities. (same as neighbors) Would cost 37,400 - 44,400. Of course we want to keep it low or lower and will be doing a majority of the work. Comp properties in the neighborhood sell for 92,000 - 99,000. Investment seems to be 55 - 60,000. 
$65,000 is the high estimate. This should include holding, and selling cost.

You pay no tax on the money you draw from your credit line, remember? Because it is borrowed. You only pay tax on profit after maximizing all possible deductions. Check with your accountant or tax advisor. Basically, all expenses associate with your investment are deducted from your sale proceeds, then what is left is profit and with that you cannot not avoid tax. Oh well, the great USA only takes a little, you get the majority of it.

Feeling bummed because I was unaware how my grandmother was worrying some...mind you she is ok but was not wanting more debt. I KNOW I CAN DO THIS!!!!!! I WANT TO! Any help on any situation we are now in is greatly appreciated. Thanks Allen.
My guess, her concern is for you. Just reassure her and share the numbers and game plan of how it will prove to be profitable. Then prove it to her. After all, she is your financial partner and needs to be well informed. If the numbers and plan make sense, her worry will be significantly reduced. Nothing will completely reduce it, that is what "Mom's and Grandmother's do" She will be very proud once the deal is done and you show her the check for your profit! 
You should consider the mentor program.

Allen,
There is a property here in Illinois that I have a good chance to buy from the bank, prior to the sheriff sale. In your book you mention that a property would still go through the sheriff sale even if you bought it prior to the sale. Is this always the case? I would like to avoid going to the sheriff sale if possible as I can probably buy the property for significantly less than what the judgment amount (opening bid) would be. Thanks. 
Roddy G.
Prior to the sale the bank can only sell you an assignment of their interest, not ownership. Which is simply paperwork securing their loan. The borrower is still the owner until the judge approves the auction. So you could buy the lenders paper for less than is owed on it however, you have to go through the auction to get ownership. If the owner files bankruptcy prior to the auction then your stuck holding the paper or (mortgage or trust deed) and getting monthly payments. If you buy the paper & get the owner to deed over his ownership, then its a done deal.

Hello Mr. Watkins
I have only one question that I didn't find addressed in the text. When you buy a property at auction or by REO, if there are tenants with leases, what is the status of any advance rents and deposits they paid the previous owner? Do you factor these in as part of the cost? I can't imagine trying to collect it anew.. Thank you for an informative book.
Just as the Sheriff or Judicial Deed wipes out liens, it also voids any lease agreements. You have no responsibility to tenants. They just become a victim of the prior landlord. I usually work something out with them to remain on as my tenant, when circumstances are right. 
What is your service called that lists the foreclosures with all the research done? Ted B
The Foreclosure Report of Chicago & Suburbs On my web site click on State of IL, then the report.

Hello, we are sort of confused on a few things and I am hoping you can help us out. We live in Hobart and we are looking to make investments and we're new at this. Can you please tell us in "plain English," not some confusing lingo what the difference between these are and what is the best way: What is a Sheriff Sale and is it smart? 
A foreclosure auction, open bidding format.
What is the difference between Sheriff sales and tax sale?
Sheriff sales are for delinquent mortgages, you get deed in IL & IN with in 30 days.
Tax sales are for delinquent taxes, you get deed after a 2 year redemption period. Unless it is a commissioner tax sale then you get deed with in 30 days however, generally the properties that go to sale are the bottom of the barrel. 
Which one is better?
Sheriff Sale.
And, what's the difference between these and buying a foreclosure home. We are going to go to an auction this Saturday just to check it out. But can you PLEASE help us understand the language.
Sheriff sales are foreclosure homes. Within the foreclosure process you can deal with the owner before they lose the home, go to the auction, or if no one buys it there, buy from the bank.
If your serious about learning, my book is only $25, very informative, then there is the board game. A real life virtual experience!
Thank you Very MUCH Pete and Karen

Dear Allen, 
I am just finishing up your book and want to thank you for your approach. Based on your forward, it sounds like you have your priorities straight from my point of view, God first!
I was wondering if you knew anyone on the West Coast, Southern California, that I could look up to be my mentor? I would be willing to pay someone for their time if I could have some hands on experience at the courthouses, learn to read files, etc. I currently own 2 homes here in So Cal, which I purchased full price. I am very interested in the foreclosure market but would love for someone to show me the ropes.
If you know of anyone, I would greatly appreciate the opportunity to meet them and learn. Thanks again for your time, your book, and your insight. I hope you know someone that can help me. Sincerely, Jim P.
Thanks for your comments! I'm not sure you understand what a good mentor will actually do for you. They actually do not do things that you can do for yourself. Like go to the court house to show you where locate the files, read through them, and become familiar with the different documents. Performing this physical activity, and mental exercise would not be the best use of their time. Because you can do it with just guidance and direction. If one was offering to do such things it would be because your willing to pay a lot of money to have them do it. This however, would show their lack of wisdom and real success. Because it is not just about the money. 
Myself, as well as other successful people turn down offers for money all the time. Not because the money is not good, but because we have reached a level of wisdom and financial success to realize our time has more value than just money, and so does the students. To advise students with wisdom, for their greatest long term financial, and learning experience benefit, and not just for the mentors monetary gain, is a sign of a true mentor. 
A mentor provides guidance, direction, knowledge, encouragement, accountability, motivation and thoughts of wisdom based on experience. What more could you ask for? 
Check out my mentor program on my web site.

What happens to an IRS lien on a foreclosed property sold at auction. I understand that they have a right to redeem up to 6 months? Tom J 
Not in IL, I bought one with a 27,000 IRS lien. It was wiped out immediately.

Dear Allen,
I have just read, and re-read your great e-book. I am impressed by your very apparent honesty and genuine wish to help people. I have never bought property so some of the terms are new to me. However I wish to learn more and start investing as soon as possible. I am overseas at the moment but will be back to the Seattle area in March 03.I have $30.000 in savings and good credit. I am one of those good handymen who do a thorough and honest job. I need to know the nuts and bolts of doing the research on a foreclosure property (I believe this is where the most land-mines are) and then how to proceed step by step to the auction and if I am lucky, what to do after that. Would you please recommend the best book or course for me?
I wrote the book that I wished would of been available to me when I first started out.. Lots of testimonials on web site.
I visualize myself buying a series of small fixer-uppers for rental and borrowing money on those to continue building my empire! Would this be best for someone with a small amount of money, or should I look at turning each one over and rising up the value scale each time? It would seem to me that 4x $50.000 houses would generate more income than 1x $200.000 house and the risk is spread wider?
That is correct!
I also read that well known ghost written book by a real estate developer in Hawaii with two fathers which was all "puff and fluff" and no "meat and potatoes but he did mention one interesting thing and that was by using a 1031? you can sell a property for a profit and by reinvesting in another property, not have to pay capital gains tax. What is (if I have the number right) a 1031?Phewwww....
Robert was talking about the 1031 tax free exchange. More completed than it sounds. I have never personally done one, but hear it is done by some. I like buying, fixing, renting, refinancing for return of all my out of pocket money, plus a tax free profit, and then a monthly cash flow. Those are cash flow machines.

Allen, 
I just finished reading your book about foreclosure investing. I didn't need to read more than about two chapters to know this is something I'm going to start doing as soon as possible. The question I have is this: Although you state that the profit is tax free when you refinance (by renting the house instead of selling), don't you pay taxes on it at whatever point you end up selling?
Yes. When you sell it then becomes taxable. But if you have done it right, you have created a money machine that you may never want to sell. 
Let's say I buy a house for $40K, put $5K into it, and then it is worth $80K. I then refinance it for 75% of its value, which would be $60K. I then have profit of $15K which you term "tax free." Two years later I sell it for $100K. Without including selling expenses in my example, I then have 40K of profit from the sell, but I'm actually liable for profit totaling $55K., because of the $15K that I took out two years earlier. All you're actually doing is postponing paying the tax man, which for some people could end up coming back to bite then in the behind. Is what I'm saying accurate, or did I miss something?
Any examples I use for tax free profit I intend on holding long term. Even if I sell years later, I still had the use of that tax money for all those years for free. Perhaps, I should of explained it further. But I do consider it tax free profit since my intent is to never sell the money machine I have created.
Any way, thanks for writing the book. I only hope there aren't many people around here that read it also! :-)
Barry P

Hi Allen, 
 I just refinanced my primary residence, and while talking to the broker about foreclosure acquisitions, he told me that things will be getting much more difficult in January. Evidently, Freddie Mac and Fannie Mae will be tightening up the rules for buying and selling investment and rental properties. The appraisers also are valuing properties bought at auction at barely over the cost of the property, as opposed to the "fair market" value. In addition, I'm told if someone sells a property within 6 months of having bought it, or if someone wishes to strip the equity of a recent purchase through a refinance, the banks are making things extremely difficult. They charge a higher interest rate, add points, and in some cases won't do the deal. The guy told me of one deal, where an investor took out a loan for the purchase of a "fixer upper" and extra money for some repairs/home improvements. The bank allowed this because they knew that after the repairs, the home would still sell for much more then they had into it. When the improvements were done, the home went up for sale. When the would be purchasers applied for their loan and had the appraisal done, the appraisal came back for significantly less than the current owner had into the house. So, no sale!! Allegedly this is all a response to Fannie and Freddie's new posture. Is any of this true?
I doubt it. What you described wouldn't be legal.  I can't speak to the specific circumstance above, (Did the guy over improve for the area?).
If so, what do we do in the future? 
You find lenders who make portfolio loans which are not subject to Fannie Mae guidelines, or do commercial loans, on your residential property.

Investor financing has always had its ups & down with acquiring it. When I don't get what I want with one lender I find another. I adjust, I get creative and find a way to make it work. People can "what if" themselves right out of ever making a deal. However, I have run into a bad appraisal, though rarely. I just dispute it, find another appraiser, or another lender, or adjust and move on. There will always be road blocks or mountains to conquer from time to time. Don't let the challenge stop you, pursue your dream!
Andy V

Allen,

I just finished reading your book about foreclosure investing. I didn't need to read more than about two chapters to know this is something I'm going to start doing as soon as possible. The question I have is this: Although you state that the profit is tax free when you refinance (by renting the house instead of selling), don't you pay taxes on it at whatever point you end up selling?
Yes. When you sell it then becomes taxable. But if you have done it right, you have created a money machine that you may never want to sell.
Let's say I buy a house for $40K, put $5K into it, and then it is worth $80K. I then refinance it for 75% of its value, which would be $60K. I then have profit of $15K which you term "tax free." Two years later I sell it for $100K. Without including selling expenses in my example, I then have 40K of profit from the sell, but I'm actually liable for profit totaling $55K., because of the $15K that I took out two years earlier. All you're actually doing is postponing paying the tax man, which for some people could end up coming back to bite then in the behind. Is what I'm saying accurate, or did I miss something?
Any examples I use for tax free profit I intend on holding long term. Even if I sell years later, I still had the use of that tax money for all those years for free. Perhaps, I should of explained it further. But I do consider it tax free profit since my intent is to never sell the money machine I have created. 
Any way, thanks for writing the book. I only hope there aren't many people around here that read it also! :-) Barry P

Allen-
I am very interested in your mentoring program. My main problem now is lack of access to capital to buy foreclosures, though. Banks don't want to extend me an unsecured line of credit without income, and they don't really consider the foreclosure business to be income because I haven't started making money doing it. I have some existing personal credit I can draw on but not a lot. I don't mind sharing some of the profit on my 2nd and 3rd deal, but it seems like this would be most appropriate if you were able to also help arrange some investor financing for these initial deals. 
The teacher teaches the student how to do for themselves. 
The first thing I teach you is how to locate investors. That is your first assignment. Yes, I offer myself as an investor but I don't push it or want you depending on me completely. I may or may not be available at any given point in time. As soon as I get my money back from deals, I put it right back into deals as soon as I can. I also have investor resources. There are plenty of people out there who want to invest. I will help you find them. 
You would then take your cut of the profit after these investors are paid their preferred return. 
We get our cut always after the financial partner gets his. Usually it is at the same time. 
It's my impression from your website that there are people who are willing to be passive investors in these deals. If we could line up some funds from these people, that would solve the capital problem. 
Yes, I have some in place. 
If you think something like this is doable, I would like to sign up for your mentoring program and will send you a description of my motivations and background. Ted

Hello, Allen & Debra! I cannot thank you enough for the enjoyable day spent in your lovely home on Saturday. It was a very rewarding and informative day, made all the more enjoyable by Debra's gracious role as our hostess. Martha Stewart, herself, could not have done it any better! Upon my arrival home Saturday evening, I immediately delved into your book, Allen; and I have scarcely been able to put it down. The expert knowledge you personally shared with us Saturday, as well as the detailed information in the book are far superior to the other books and courses I have spent the past several months gathering. I have decided to get out the door and get going on this new venture. . . TODAY! I am excited to tell you that I have found a local house in foreclosure (from our little weekly newspaper). It is located in a very exclusive and expensive neighborhood not far from here. I will be doing a drive-by look this afternoon, and IF I can muster the courage to do so, I'll knock on the door and see what I can learn. This is definitely NOT something I would have even considered doing a week ago; so you see, Allen, your wealth of information has the power to change lives! Keep up the good work, and thank you for sharing your knowledge and encouragement. Kathryn S.

Hello, I am considering subscribing to your foreclosure service. Before I do, I want to make sure I understand what kind of information I am getting. Is the info only for properties owned by the banks, also know as REO's or Bank-Owned Real Estate?
No. I teach people on dealing with owners in foreclosure, buying at auctions, buying REO's, Wholesaling and more.
Or do you also provide pre-auction properties and/or Lis Pendent lists, as published by local counties?
Yes, on my web site, click on State of IL, then Foreclosure Report of Chicago & Suburbs.
Anything else you provide that I don't know about? I live in Chicago.
It is all on the web site and more will be added!
thank you, Steve F.

Hi, I would like to have more information on the foreclosure directory.
The sample on the web site is a sample right out of one of last years reports.
Available per the State of IL page.
Does it tell what properties are being auctioned at what auction houses
Yes. The auction entities are also listed toward the bottom of the sample page.
and how current is the information.
The weekly publication is current within the week.
I have been told that a publication issued every other week will include properties that have not been auctioned even though some auction houses are auctioning every day, this is sort of confusing to me.
This comment is confusing. Our publication is every week with new information of recent foreclosure filings and the auctions coming up in 2 to 3 weeks. No repeats, unless a property was postponed or cancelled, and then rescheduled. 
You may call the auctioning entities directly to question them.
The Foreclosure Report of Chicago & Suburbs is as accurate and timely as humanly possible. It is a service that saves you a lot of time. You can accumulate the information yourself. In my book I teach you how. DELORES H.

Dear Allen
Hi, my name is David G and I have ordered the course on the internet that was free ( thank you ) is this course different than the" Foreclosures Investing Miracles " course?
I believe it is the same product, partially anyway, I'm sure the free one  is a lead into buying the real meat & potatoes course. But I do not market either one. Foreclosureworld.com has a license to re-package and market my book.
I have picked up a list at the sheriffs office on the sales in this local area. I have found a house that the sales list says $62,008.48. I will admit that I really don't know what the value of the house is but it would have to start at least $150 k and up. I called the attorneys phone # on the list and was told this was the first lien, but their records indicated three more liens had been on in the past. She gave me the names of the three liens but that was all they had, nothing showed if they were paid off no addresses, no numbers, just three names. I am trying to learn through this research of this property and I will attend the sale but I won't be able to bid because I do not have any money. This is where I wish I could find an Investor that is interested and maybe I could get a finders fee. I don't know what to do next, do you have any suggestions?
You did well getting the information out of the attorneys office that you did, they are not always so cooperative. I give you ideas in the book to locate financial partners. My Wholesale/Flipping Systems Course, ideas on locating people to flip to. When at the auction, there is likely potential financial partners there, or people you can just flip a deal to.
I would like to tell you how I feel about what I have learned in reading your materials but I really don't have the words, but I will say a great thanks. Thank you so very much for your valuable time, I hope I can achieve just a small fraction of what you have. Maybe one of my toughest obstacles at this time is my being on SSI disability and trying to make that first investment get me started, but I don't, and won't give up. Thank you for your time. Sincerely yours David G

Allen, 
First off let me say that I have your book on foreclosures that I downloaded from the net via foreclosure world. I haven't read it thoroughly yet, but I'm in the process. I stopped to visit your web page, for it is mentioned in the book. I have been very interested in real estate for a long time, and have bought, rehabbed, rented and then sold those properties for a SMALL profit. I quit, because of my problem with the tenants, and some other unfortunate personal circumstances ( wife's cancer ). Fortunately, she is much better now.
I further see that you are a member of The Church of Jesus Christ of Latter Day Saints. I am also a member, although I was not born or raised in the church, my children have been. I'm not mentioning this to sway any catering, I just wanted you to know that you are receiving an e-mail from a fellow brother in the church, that has a burning desire to become independent from the same old hum drum of working for someone else to make a living. I know that real estate is an excellent vehicle to accomplish that desire. I shall not lead you on as to try and impress you with what I do know, and what I think I know, I will tell you that I have acquired a vast library of how to books over the past few years. I've studied these courses in depth to try and learn as much as possible before venturing out into the investment world again. Enough said here, I just wanted you to understand a little of my background, although it is not thorough. Now on to my question.
I have a family member who is incarcerated, his house is in foreclosure! He is not the deed holder. The house is in an estate. It belonged to his now deceased mother and it was never taken to probate. I have in my possession the foreclosure notice, the original deed to the property, the original mortgage note. I've had him sign a authorization letter, and have faxed it to the mortgage company so I may speak with them. The trouble is, they will not talk with me,( I think for his last name is different from his mother's last name). She divorced his father and took back her maiden name, therefore, they do not recognize him as an heir. Outside of waiting for this property to go to sale at the courthouse, do you know of anything I can do to possibly acquire ownership? Will he still need to go through probate?
This is a legal issue requiring expert legal advice.
The property is in need of total rehab, for he has trashed it out, I did manage to tell the mortgage company this fact, and that I'm willing to buy out the mortgage for 50% of the loan balance. I still just get the run around. According to him, he's approximately 6 mo. in arrears on payments. I have spoke with the legal firm handling the foreclosure, and they are (supposedly) mailing me the reinstatement fees. Can you shed some insight into what I may be able to do?
Well they don't need anyone's permission to sell you the mortgage. You can point out that they do have the right during the foreclosure to protect their interest by rekeying and assuring that the property is secured. At the same time of course having a Broker give a price opinion of value and estimate of repairs. This may convince them it is not worth spending more money in legal fees.
It would be a great ego booster if I can pull this off. I need to prove myself with certain members of my family, who think I'm full of ______ (hot air), I believe you understand that blank line!
Whether this works out or not, you use the need to prove yourself, to keep driving you forward. It worked for me.
Any hints or solutions that you can suggest would be greatly appreciated! I know you are not in business to give out free advice, and I respect that, but I'm not in a position (financially) at the moment to indulge in mentoring classes. I'm in Kentucky, if that helps in anyway with your reply, I know each state has their own respective real estate laws. I appreciate any insight you may provide. Respectfully, Kenneth B.

PLEASE CANCEL MY SUBSCRIPTION TO YOUR GET RICH FORECLOSURES I AM SORRY BUT JUST DON'T HAVE THE FINDINGS....TAMMY
Sorry, but your telling the wrong guy. I don't have what your trying to cancel. I think you need to contact www.foreclosureworld.com They are licensed to re-package and market my course. You need to contact them. Sorry your having a rough time. I did too when I first got started in this business. 1983 I refinanced my used car for the $500 fee to attend my 1st real estate seminar. Turned out it was a lot of puff & fluff, and not enough meat & potatoes. I shortly thereafter became unemployed, divorced, was living off credit cards, sleeping on a cot in a warehouse, taking sponge baths, and eating 99 cent TV dinners. So I also know what it is like to have it tough. I also know what it is like to pull my boot
straps up tight and move forward one step at a time, and make things happen in my life. 
Believe me, if I can do it so can you!

Read and re-read your book and now I am ready. I've looked at houses and making offers. However, I find that investors only want to pay 75% of the asking price. So I am going to start flipping properties for that quick paycheck. I found 2 houses to flip. The asking price was 129,777 and I was able to negotiate with the realtor at $115,00.
Asking price and actual value can be significantly different. Did you check out sold comparables? If it is actually worth 125,000 your off to a good start. You could sell for 120,000 and make 5,000.
The other asking price is 127,500. And I was able to negotiate it at $122,000.
May not be enough room depending on actual value.
Both houses are ready for move in. What do I do next?
Find a buyer at a higher price. The book gives you techniques for finding buyers.
The realtor is asking $1000 each earnest money contract. And of course I don't have it. Please advise.
A clause like: "It is the intent of purchaser to extend considerable effort to locate an assignee (another purchaser) Seller may continue to market home as before. Earnest money will be paid upon acquisition of the assignee." This will take some convincing on your part however, what does the seller or Realtor have to lose? Nothing! Your just another marketing source.
I've also talked to RE investors and they want to pay 100,000 flat.
That is a little more than 75%. Keep their information for future properties.
I've advertised it for sale in the paper and no bites?
I would have to see the ad to comment. A good heading might be "$5,000 Below Value"
I also looked at an REO property. The asking price is $126,000. They foreclosed at 102,000 which is the amount of the loan. I made an offer of $102,000 thru the realtor and the bank countered at 120,000. Is this one of the situation where I use my walk away power?
Debt never determines value. I'm surprised they didn't require proof of funds. You will not be able to convince a bank to accept the above clause. Would be best if you had the buyer 1st. They like and expect to negotiate back & forth. 102,000 is more than 75% of value. Yes, when you can not get your price after much negotiation, then walk away. Can always come back days or weeks later and try again.
Do you have arm chair investors in Houston? Maybe you...just kidding but I thought I'd ask. Thanks again and have a nice day.
I have resources reserved for my mentor students. You are clearly off to a good start by the obvious effort your putting forth. However, you need more specific guidance, which I do have available via my mentor program described on my web site. When I started I learned a lot by trial and error. Cost me tens of thousands I'm sure. I wish I had someone like me. I would of saved a lot of time and money. To be fair to my mentor students I cannot answer any more questions for you. I hope the above is helpful. Whether you sign up for mentoring or not, I would still like to hear of your success and a testimonial. You should also take pictures of your deals, and copies of your checks. I wish I had of my 1st deals.

Allen,
I just bought your book and started reading it. I want to get involved in real estate. This has been a very strong desire of mine for years. I feel now is the time to act on my desire. I have $30.000 in a 401k which seems to lose money every time I receive a statement, I feel this money would be put to better use if I invested it in real estate. I know I would be hit with a penalty if I withdraw it. I am just tired of loosing money. What do you think? Terry B.
Sounds like your being penalized for keeping your money in there! I've experienced real estate out performing other investments I see others make, in security of investment, return on investment much higher, and controllability. Even as a passive investor in our program one can do a lot better.

Hi Allen,
Regarding your passive investing program, I would like to know whether the interest on investments is paid from the profit of each investment or it is interest earned on the money invested?
The interest is paid on the principal invested and paid upon the refinance or close of the sale of the property. Or at a lower interest rate if can be paid monthly, and escrowed to be rolled over with no break in interest payments.
Also is it possible for one to have the choice of reinvesting the money earned up to a certain level and after that start receiving income on a regular basis? Looking forward to your reply. A lieu M.
Yes. Money would be secured against the real estate and when sold or removed from the property can be placed into an escrow account until used again on another property. All under your control and still earning the agreed upon interest rate.

Allen , I just read a page on your website which spoke about "armchair" investors, which I am interested in. Can I obtain more information about this method (really all I want to know if there is a chance of loosing the "My" investment?)
I have never lost my investment or others money that I have invested in the 19 years I have been in the business. Lost some profit due to bad contractors & tenants though. However, I have developed systems to minimize that happening again.   I love real estate, it's solid! You have collateral worth more money than you paid for it. As long as you bought it right, like I teach. You control the collateral. Whether the market is high or low people are always going to need a place to live. Unlike those other riskier investments that are available in the market place.
Otherwise, is it simply a matter of contacting some one there and indicating that I have $5000 to invest?
You just did. However, understand that we will tend to use the money from people with higher pledges. Enough to cover the deal. It is easier to deal with one person VS more than one by grouping their smaller pledges together to cover a deal.
PS. What is a large investment considered to be? 
About $100,000 + for my market.
Awaiting Your reply, Larry P.

Hello Allen, 
In your advice column you mention your mentoring program. Can you work with someone at a distance (I'm in New York). What's involved? I'm very interested in winning bids on foreclosure at auctions. 
Yes, my mentoring is done at a distance. In person it would cost a lot more just because of the value of time. I love teaching however, it has to cover my time while not making deals. Frankly, I can only devote a limited amount of time to it because of all my activities. Plus, I believe via e-mail to be the best because it; 
1. allows reflection, and a thought through response to questions, and for me to give the best guidance and direction possible. 
2. it provides a written record, a journal of our correspondence that can be read and re-read by the mentoree. Repetition is the Mother of all learning. 
3. Time flexibility. I usually respond within 24 hours or sooner. Sometimes late at night or early in the morning. 
Winning bids is easy if you pay too much. Winning bids at a profitable price is the main ingredient to success. I've seen people get caught up with their ego and pay too much just to win. Expensive ego's create failure's. 
Also a little feedback about your site. I've developed hundreds of sites so I'm speaking from a professional point of view. I know this is an unsolicited critic and you have every right to tell me to go jump off the nearest bridge. If you're making the kind of money you claim, why not drop a couple of grand to make your site look more professional? 
Good point! However, my main focus in life is not the web site. I still actively invest. When I drop a couple of grand it is usually toward real estate or for my family. Having grown up and starting out in the hole, I can sometimes be tight minded when it comes to letting go of what I have worked so hard to acquire. It has been a work in progress for a few years now. It will continue to get better. I'm certainly open minded. 
To be honest when I saw your site I was disappointed. It actually hurts your credibility to have a site that looks amateurish. 
Your going to hurt my personal assistants' feelings! Actually, she has improved upon what I developed. Your point is well taken. I am an amateur when it comes to computers, marketing, and promotion. It is interesting though, I have rave complements on it as well. Even what I created years ago. I think it depends on the individuals knowledge and experience. Certainly, it is more the content and not so much the presentation. That is why I heard from you, right! I'm open to suggestions or perhaps a barter. I realize the presentation is a factor to making the site a bigger success. 
Also, most realtors I know have a glamour shot they use to promote themselves. You should replace that snap shot you use with a professionally done photo. 
Check out the Allen Watkins page. That is a glamour shot although, about 7 years old. I plan to get it updated. I just need to make the time. 
Your site should project an image of success. It should scream money. Just my opinion. 
Your absolutely right! Part of it is probably my "No Puff, No Fluff----Just the Meat and Potatoes!" point of reference. I welcome suggestions. 
I am very interested in your mentoring program and would like information.
The web site pretty much covers it and what I said above, if you have a specific question, I'll be happy to answer it! Thanks for your comments! 
All the Best, Bob O. Online Sales Manager

It all depends on your financial strength with your bank, talk to your banker. What assets do you have available for collateral? Give them something to work with. Equity in your personal residence, life insurance, etc. A private partner. I do have 2 names of private financial partners in the Chicago-land area who work with investors. However, since I give that information to my seminar attendees and mentor students, it wouldn't be proper to give out otherwise. You could buy from the bank after the auction if no one else gets it then you would have the time for financing. But you'll have to negotiate your price.

3) In your experience, should I pursue purchasing the property through the RE agent before auction? How?? I have spoken to the agent. I asked her if there was significant room to move down on the price (since it will start much cheaper at the auction in 2wks). Her reply was that it is worth every bit of the asking price. Thanks in advance, and God Bless.

Maybe she has a hidden agenda. Make your offer. Then make sure it gets presented even if you have to contact the seller yourself. Of course, time is of the essence. You'll have to contact the attorney for the mortgage company and convince them to postpone the auction allowing time for your deal to close.

Hi...how are you doing? I am currently reading your book. I have bought my first house in February and I just finished restoring it. I refinanced it and I am currently looking for a renter. Any way...I had a taste of the real estate market and I am hungry for more. My first experience was a good one, although it was a HUD property and I see that you are not really a big fan of buying HUD properties.
That is correct. I have seen many people pay more than they should unknowingly, for various reasons.
The HUD property worked out for me and I feel that I was successful in turning a profit from it.
I'm curious, how much profit?
HUD properties are getting really competitive now and I feel that I need to reach out to other ways of buying properties.
Yes, always have been. More profit potential in the other areas of foreclosure resources.
This is why my interest towards foreclosures. My first question is a simple one: I have found out where the sheriff sale is being held and I acquired a copy of the listings from my local news paper. I am living in Philadelphia and of course this is where I am investing. the notice gives me the address and the people whom have defaulted on their loan, and I guess the amount owed?
As of a certain date.
that is my question---is the amount on the notice ,than same amount that I have to pay at auction?
No, plus daily accumulated interest, and legal fees, etc.
or do they start the bidding at another number that the bank would need to satisfy the loan?
Total amount owed to the penny, to through that date.
I will keep reading your book ,it is helping me to get started, but some questions pop up in my head sometimes and I cant seem to find the answers. I would hope that you would respond and give me an answer on this one. I would like to be prepared for when I go to auction. Thanks Rick W.

Dear Mr. Watkins:
I am writing to ask you a few questions regarding your book, "The Reality of Real Estate Investing".  Does your book explain how to locate financial partners and/or joint venture partners to help an individual purchase, fix-up, and resell the properties?
Yes.
Is locating financial partners something which is difficult to do?
Only if you do not approach people and ask the
question I give you in my book.
Is starting this business, your way of investing, difficult to do?
Depends on the individual. Is working a 9 to 5 job
for 40 years, that holds you back from achieving your
goals and dreams difficult to do?
Does anything in life really worthwhile and valuable to
you, just come easily.
No, it did not come easily for me. It took some hard
work and effort. However, it sure has been worthwhile!
I have to keep my full-time job for now until I start earning some money. Thank you very much for your time and help. I greatly appreciate it. Respectfully, Bob S.

Hi Allen:
I enjoyed your book on foreclosures and have attended a few sales.
Before purchasing foreclosures at a bidding do you pre arrange insurance coverage?
Yes.
If so, which company or agents from which company do you use?
Universal Fire & Casualty is one I have used in the past. I have not had association to use them for years now.
My traditional insurance agent informed me that normally a purchased residence must be empty and in relatively good shape; a purchased residence with habitants that need to be evicted is a type of risk traditional companies will not normally write.
There is insurance for those who work on rehab properties, and build new homes. It is called Builders Risk. I have it through Allstate. Although, with the rates ever increasing I need to start shopping around again.
As the various sales I have attended predominantly had inhabitants who need to be evicted there are legal and insurance issues to be overcome.
Besides insurance at purchase what do you suggest as an eviction process. Your answers are appreciated.
That is why I teach in my book to always make contact and see if establishing rapport is possible, it makes all this easier. Sometimes, you can treat the property as tenant occupied. Talk with more agents with experience who have answers that your current guy fails to discover.
Sincerely, Dan S.

From time to time I come across properties where the foreclosing plaintiff is Mortgage Electronic. What exactly is this?
Never heard of them. Just a name for a company.
Is it not a good thing to consider bidding on a property that is being foreclosed on by the City of Chicago?
Could be, if the numbers are right. It would usually be for a demolition lien. One of my best deals ever was being foreclosed on by the City of Chicago.
Because it is not the primary mortgage holder which is foreclosing. Finally is it ever OK to bid on a second? For instance, if both the second and the first combined are still well below the market value of the property.
Sure, I've done it.
How would I go about gaining title if I bought the second.
If you bought the paper before auction then you would wait for the first to go to auction and bid above them. Otherwise, foreclose yourself. If you bought the second at the auction you would get deed after the Judge enters the order approving the sale like normal. There would still be the interest of the first on the title. You would have to work something out with them to pay them. Otherwise, they would foreclose.
B.C.

Hi I am a subscriber to your foreclosure report. I was at an auction on 7/2/02 at the inter-county judicial sales corp. in Wheaton. Two of the properties listed in your report showed only one outstanding mortgage. I researched it myself to verify this. Yet at the sale the auctioneer said that both of the mortgages were seconds. Is it possible that the only outstanding mortgage on a property can be considered a second.
When there is a 1st & a 2nd and the 1st gets paid off. 2nd is still a 2nd although it is now in 1st position.
Some lenders when making an equity loan will call it a 2nd even when there is no 1st. Makes no sense I know! I believe this scenario is more un-common than common.|
If this is so how can I ever be certain if it is a first?
Perform a track search yourself or get a title report. To be certain that is, otherwise ask the attorneys office.
Also does it really matter what it is referred to if it is the only outstanding mortgage?
NO. Thanks, Brian 

I found your book at Amazon and ordered. I enjoyed it very much. I've done a couple of deals over the last 18 months and continue to learn. In hindsight I'm sure I missed out on a few deals that I could have made work with your insights. I'm also an Elder's Quorum President - Midland, MI 1st Ward. In fact, I'm one of the reasons I ordered was the reference to you serving as an EQ president and spending time with your family. I'm hoping you have time to answer a couple of questions. Does Illinois have a 6-12 month redemption period after the auction?
No. The law changed several years ago putting it before the auction. It was 6 months.
Michigan does, but it can be shortened if the house is shown to be abandoned. My first foray into buying houses was at auction and I waited the 6 months because I got such a good deal. It was a real fixer-upper, but I like them because the risk is low and the competition as well. I enjoy building and got my builders license a year ago. I am reluctant to bid unless I know that the house can be declared abandoned and the redemption time shortened. Any advice?
No guarantees. My experience was that the court would shortened the redemption if shown abandoned.
I have come across at least two other houses that appeared abandoned. I tracked down the owners which have turned out to be older people in rest homes. Even having power of attorney, their sons/daughters were reluctant to sell because any proceeds can be taken by the state as compensation for their rest home expenses (I believe the Fed government foots the bill, but requires the State to seek compensation). Meanwhile the homes deteriorate. Have you come across a means of them sheltering proceeds from the sell of their home in such a situation?
Not been faced with that however, a tax accountant would be the person to ask.
Finally, I found an abandoned home and tracked down the owner. I wasn't in a position or I would have bought the first mortgage at auction. The loan was FHA insured and since went to HUD (Jan 02). HUD has yet to auction or otherwise. Is this home in hopeless bureaucracy until HUD figures out they have it? The house would be attractive at the price of the 1st FHA mortgage. It is not attractive when you add in the 2nd mortgage (I don't know if it was FHA as well). Thanks for you time.
Yes, you'll just have to wait until HUD gets through their paper shuffle. However, even then you'll likely find that they are asking more than you will want to pay per the strategy I teach. FHA does not insure 2nd mortgages. I wish you the best!

Dear Allen, 
I wanted to ask you opinion about a house I am interested in. Paul and I think it may be a good long term investment but are unsure about how involved this house may end up being. The home is in one of the most prestigious neighborhoods in Kingwood. It is 6000 plus and may be 7000 plus square feet ( the MLS lists 6134 but the realtor says past listing were 7000 something) The home has been on the market for 3 years and has been in foreclosure for about 5 months. We made an offer with a contingency (to sell this home first) and they turned us down flat. I want to put in an offer again with out the contingency but for about the same dollar amount and include a list of "grievances" since the home is as is. I want to add the contingency that if they do eventually accept our offer we can get out of it if their is foundation damage ( there is a crack running through the brick heading for the ground). I had a contractor (referred by a friend) come and do an estimate on stabilizing the foundation, and repairing a couple major repairs that can not wait. He mentioned he saw no obvious cracks at the time but warned that with time the cracking would lead to the foundation. What is your advice? 
Make your offer subject only to a home inspection within however many days you need to complete it. With the list of problems from the inspector you can then re-negotiate the deal if appropriate.
What does a cracked foundation do to a house?
Depends on how severe it is and where it is located. Seek the advice of the home inspector, and the contractor?
Can an offer with an "out" clause be submitted and would it be worth any time to submit the grievance list?
The home inspection is your out clause. If with the list of problems that appear will likely be on the inspectors report, can not be negotiated to your satisfaction, then your out. The inspector's report serves as your grievance list.
I would also put in a clause that "the earnest money check shall not be deposited until buyer approves of the home inspection. Should the home inspection not be acceptable to buyer then the earnest money shall be returned automatically."
The house is listed for 389,900.  Thank you, Tara
Do you how much the mortgage is? 1st and 2nd? Back payments?

Hello,
My name is Fernando S., and I'm very much interested in acquiring foreclosed property for rental income and reinvesting. One thing I've learned in life is that nothing is ever as easy as it sounds, but I'm not looking for ease as I am looking for financial opportunity for myself and my family. I know what work is, but I also know there's a better way to accumulate wealth. I'm a chemist and have been for 25 years. My wife has been a nurse for 22 years. We do well financially, but would like to accelerate our ability to accumulate wealth. We currently live in a two flat in well to do area of Chicago and recently re-mortgaged and bought a handyman special which is nearly complete and will be ready to rent in June. So we have a building with a mortgage and one that is fully paid for. We also have very good credit, but at this point we're in a fair amount of debt. We would like to accelerate the rate at which we can pay off some of our debt and increase our wealth, and be able to provide college tuition in the next two years. At this point, how would you recommend we proceed? 
If it is debt you really want to pay off, refinance your 2nd building which will likely be at a much better interest rate than the debt you describe. Use the balance of the money for investing. Of course, plan it so that you still have a positive as well. 
I must confess I'm not very keen on the advantages of foreclosures. How can you help us? 
I provide you the knowledge I acquired through trial and error. 
And what would it involve? 
Your acquiring knowledge and taking action! 
Risk? 
Minimal if you follow the information I share. Keep in mind the real estate is your collateral for your investment. You control it and people are always going to need a place to live. Unlike the stock market, no collateral, no control! 
Time? 
The amount you make available. 
Cost? 
I started with nothing and I teach others how to do the same. If you have money available it is just that much easier and more profitable for you. My soft cover book $20, hardcover $25, no risk seminar $299, pay after the seminar as long as you agree it is worthwhile. I paid $500 for my 1st seminar that had a lot less than what I offer. 
Thank You For Your Time! 

Allen,
If I buy a property at Auction for $50,000 cash, and refinance it (under my name) later for 75,000. I don't pay taxes on the difference ($25,000), because it's borrowed money. Now if I sell this property for $80,000 to a buyer, I pay capital gain on $5000. So my total profit from the transaction is $30,000 but I pay taxes on only $5,000.  
Did I understand the tax free advantage correctly? P.P.
No! You only enjoy the 25,000 tax free as long as you own the property. Once you sell then it becomes taxable.

Allen, I just purchased your book yesterday and I have found it to be very helpful. I was hoping you could clear up a few questions I have about foreclosure auctions. I am planning on bidding at a foreclosure auction very soon. The property is in Chicago. 1. Assuming I am the high bidder, at what point should I have the home insured. Once I pay the balance of the bid, what would happen if the house was destroyed by fire before I received the deed. Would my bid payment be at risk immediately after payment? 
Yes, When I won the bid on properties, a.s.a.p. I would be on the phone to my insurance agent. 
2. The home I am bidding on had a judgment for foreclosure in December of 2000. The first Notice of Sales was filed in March 2001 for a sale at auction in April 2001. For some reason, the property is now being auctioned in April 2002. The court case file contains nothing dated after the April 2001 Notice for Sale. Is it common for auctions to be held up this long? Would something like a bankruptcy hold it up without any record in the case file? Unfortunately, the plaintiffs lawyer and the sales agent are not forthcoming with any more information than is in the court record. 
Yes bankruptcy can hold up the case, sometimes mistakes by the attorney can force them to start over again. Some people steal documents out of those court files. 
Thanks in advance for any answer you might have. I would very much appreciate an quick answer because the auction is very soon. I look forward further contact with HOMEBARGAINS.COM in the future. I just found your website last week and think it will be a great resource for me in the future. Thanks! B. K.

Hi Allen,
I'm interested in pursing a second career in Real Estate Investing. I've recently finished your book "Reality of Real Estate Investing" along with some other good books available in the market. Considering, the depth of information provided, your book is one of the BEST. I was looking for complete information on foreclosures for a long time, and you provided everything into one book. I think, you are selling very valuable info for a very low price. Anyway, I would like to ask your opinion. 
1) What happens if the original owner files for a Bankruptcy shortly after the foreclosure in the state of IL?? Some states follow Durrett's rule, under which the foreclosure sale will not be valid. Thank you in advance, Prerak P.
It stalls the foreclosure until the Bankruptcy Judge decides on the case. Sometimes the lender will be forced into accepting payments as directed by the court, other times the property may be dismissed from the case, and the lender allowed to continue the foreclosure. Bankruptcy is sometimes just a stall tactic. I am not familiar with Durant's rule.

Allen:
I recently received the course. I took and afternoon and read over the material. Although it is decent information it was not was I expected. I recently started a business and finished up my bachelor's degree at BYU. Have a substantial amount of debt in the form of student loans and credit cards that got me through school.
You should really spend some time absorbing the information. Not just glancing through it in one afternoon.
I have an extremely difficult time believing that an "investor" would put up money in real estate with someone who is completely inexperienced, and who doesn't even have a real estate license.
Your absolutely wrong! The book gives you the knowledge you need. When you start applying the information then it really starts to stick in your mind. People don't care much about your experience as long as the facts you present to them about a deal makes sense. If they see its secure and they can make money, that is what counts. You could find the deal and just give it to an investor for a finders fee and move on. Re-read page 61 sources for investors. This is exactly how I did it! People who get their Real Estate license do not know anything about investing, it is not taught in license school. You do not need a license, unless your selling for someone to earn a commission!
The idea about opening savings accounts is a good one...if you have 500 dollars to spare each month. 
Re-read, it says nothing about 500 every month. Just one 500 deposit. And this is just one idea to build credit.
Using credit cards doesn't seem to be the best idea, as I already have 4 of them and am having trouble meeting the monthly payments with the limited income from my small business venture.
Well, when you use your credit cards for consumer purchases, that you do not already have the money to pay for when the bill comes in, that is what happens. Lines of credit are for investment to make money. I've used the credit card companies money to buy properties and make money many times. It always feels great! 
I don't believe that I am a skeptic or pessimistic,
Yes you are! But you can over come that, if you don't, do you think it is really possible to ever lift yourself up from where you are now? Open your eyes!
but I just don't see how someone in my position would be able to have cash available to purchase foreclosure properties at auctions or anywhere else without money. 
That is true, however, it does not need to be your money.
The saying, "you got to have money to make money" comes to mind. This course seems to advocate that philosophy as well. If you don't have money you have to find someone who does, and that someone who does isn't going to trust their money with someone who is a beginner and just starting out. I know that I wouldn't. Sure once I had some deals under my belt, I know several people that would invest with me. But I also know they wouldn't invest until I had some experience under my belt, or at least my real estate license-which requires more money that I don't have, and time. 
Wrong! It is more the facts of the deal and not your experience. 
So until my situation with my business changes and I have some capital to work with, or you all know of "investors" that are interested in a prospect like, this I don't really see, no matter how "creative" I am, that this can possibly work. I have no cash to pay with even if I do track down a great deal. 
The problem here in your not being creative at all. Get rid of "I can't" Find a way to say "I can!" 
I'm glad that you have accomplished so much from a limited beginning. I both respect and admire that. I think having a mentor is a wonderful thing,
As you can read in my book on page 56, it was all my effort. Working for free 12- 14 hours a day, 6-7 days a week for 3 months. A lot of it was grunt work, to acquire some knowledge. He didn't finance a single deal for me, or hold my hand. With the little bit of knowledge I acquired from him, I built upon it through trial & error. Wished I could of had my book instead! Would of saved lots of time, made more money and made less mistakes. 
but I don't believe that a book can serve as a mentor. 
It has been enough to help others get started. None of your excuses are legitimate. They are just excuses to not put forth the effort. 
Unless you know someone in the SLC area that has used your program successfully, or an investor that is willing to work with a beginner, I need to return the material. Thank you for you time. I wish you continued success. Shane S. 
There are plenty of people with money who would like to invest for the high return that is possible through real estate. However, you have to make the effort to find them. Return the material, the loss will only be yours. Since you purchased through one of my distributors, I only earn an override of less than $10. That is nothing. The only reason I am spending my time trying to help you is because I know it can be done, and hopefully you will be sparked to reach deep within side yourself for the strength to make it happen! That is what all successful people have to do when they are starting out. 

Allen,
I am looking to sell a property in Englewood to an interested buyer who is looking for $0 down and possibly cash back at the close. The frame 2 flat appraised for $100,000 prior to rehab and did not include the adjacent vacant lot that I also own and would be part of the deal. (worth approximately 10k) In its rehabbed condition it can easily generate $1500/month in rental income. I currently owe $75,000 and I am looking at a possible $125,000 sale price, which would be little under the comps for the area. I figure this way I can give the buyer a little equity and cash back at close of $3k-5k and I get my equity. This is my first sale of my investment properties and I want to make sure I am doing it the right way. Any advice or guidance would be appreciated? Thanks Kevin

Well, that is a legal question and can best be answered by an attorney. I personally would start by asking the title company that I or the seller intend to run the title work through. After all, they are the ones who have to insure clear title for me. They can consult with their attorney on how to best clear the title up.

 Hi Allen,
Went to a foreclosure downtown last Friday just to observe. It lasted about 10 minutes and only one property was actually bid on. The others were either going through bankruptcy or continued. Thanks for answering my questions through your advice column. I have one more for you, though. You have to have 10% at the auction in a certified check. You have to have the certified check made out in advance but how do you know how much the bidding will stop at so the check amount is correct? Thanks for your time, Perry

Allen,
What is needed to perfect the title and get title insurance for refi or sales of the property after they are acquired from the auctions. Can you please enlighten me on this subject? Thanks in advance. Don

Once you get the Judicial deed, record it. Title will be pulled before a refi or sale of course. There is no title insurance for your purchase. Of course you could go ahead and order a title once you record the deed just to check to make sure that everything is cleared off. Just place a title order for the refi or sale like normal. I never had a problem. In IN one has to have an attorney actually go to court and do what is called a quiet title. The judge enters an order and that wipes everything off.

Dear Allen, 
I need your suggestion on something, there is a 12 family property that is a FSBO that is for sale in a suburb of Milwaukee for $650,000, there was another similar 12 family that sold in the area for $625,000 last year. 
So 25,000 more than a similar building, perhaps too much? 
The NOI is $52,000 on a $76,000 gross. 
Yea, that is what the seller says. Which you can take at face value with your offer. Plus a clause "Subject to buyers approval of seller's Schedule E, and permission to verify with I.R.S.) Those forms are easy to fake. you need to also, consider what is left after debt service.
According to MLS records the property was listed for $650,000 and expired in 2001 which leads me to believe the seller was willing to pay a commission, since I have limited funds, and If my broker will be willing to take less of a commission, is it realistic for me to think that I can get a loan of 90% without any other collateral. 
You'll need to talk to lenders for that information. My guess is no however, not much in this business is 100%. Find out the real needs of the seller. Perhaps, he only needs 10% and a monthly cash flow without management responsibility.
I would appreciate your thoughts and ideas,  Sincerely, Rick 

Hi Allen,
I went to your seminar and bought your book about a year and a half ago. I really thought it was informative and interesting as well. I'm planning on making a trip downtown to a foreclosure sale just to see what it's about and get a feel for it. I've got good credit but just overextended on it (owe much money on them). How much money do you have to have to buy your 1st foreclosure at the auction? I know you have to have 10% but what does a foreclosure that your looking at cost total? I know you have to have the total sum within 24 hours also. 
Enough to pay your maximum bid on a given property, which will be different for each property.
I have a rental property duplex for over a year now and that's going well. I bought that with credit cards and am still paying on them. I put $20,000 down with the cards. Should I use the equity out of the rental property? 
Yes, because your likely to get a lower interest rate and free up your credit cards so you can use them again. 
If you are going to an auction in the near future, can I meet you there just to see it done right? I do not buy at IL auctions currently, busy enough in IN, even then I send someone to do the bidding for me. That kind of personal instruction is available under the mentorship program.
I want to make sure I don't make a drastic mistake and an expensive one. 
You should focus just on wholesaling (referral as briefly discussed in the book) which is the technique I now encourage for beginners. It helps you get some experience without as much commitment and risk. And quickest way to your 1st pay check. 
Thanks for your time, Perry

Dear Ira, 
Per our conversation and based on the facts that the home in question, is;

I have been reading your book Reality of Foreclosure Investing. Awesome!! I can't tell you how many books that I have read regarding foreclosure investing, they pale in comparison to yours. Thank you so much. I will let you know of my success stories in the future.

Anyhow, getting to my question. I was contacted by a group called PMG Inc. (professional mentor group) They want to charge between $4000- 15,000 to supply a mentor. OK so, wouldn't it be smarter to invest that in RE. Just wondering, as I figured you could be my mentor, through the book, of course :) . Just wanted a pros thoughts on it. Thank You again. Angela R

Thanks for your comments. Your right, do not pay anyone up front for the right for you, to help them invest their money, to make money.

I ____________ filed a chapter-13 in July of 2001 the deal fell apart in November 2001.
Why?
My lawyer fail to mention in court that we had a H.U.D. offer to finance the home
What was the offer?
As a result the judge awarded the house the lawyers ( Codilis & Assoc. )
Does that mean it has already been to auction and the judge issued an order approving the sale?
I'm afraid that we will lose the house very soon if we don't make some arrangements very soon.
Maybe so however, the stress and turmoil on your family can be minimized. Answer my questions and I will respond again.
I need your help as soon as you read this.
Also, How much to pay off the liens completely, 1st 2nd and so forth?
What do you feel the home is worth and what makes you feel that it is worth that amount? 
How much in repairs are needed?

Allen,

I am requesting assistance because I am in a distressed position somewhat like your Lincoln shire client, my home went into foreclosure in January 2001, I filled a chapter 13 bankruptcy in April 2001 with the bankruptcy payment and mortgage payment totaling $1981.00, its becoming difficult to pay, after trying to combine the two payment and acquiring one mortgage I was turned down because they said the bankruptcy needs to discharged. I am in need of assistance please help. thank you, Kelly B 
Once the BK is discharged, anyone who would give you financing would charge a lot, and likely still not be affordable for you.
3 choices;
1. Sell and start fresh with money in your pocket with something affordable.
2. Sign the property over to the bank to avoid foreclosure.
3. Just live there rent free until the bank forecloses.

I found your site in one of the links which was the best thing that happened that day to me. I have a few questions for you , Mr. Watkins.  
Can I apply your foreclosure techniques here in California? 
Yes. 
Are there any challenges to be encountered dealing with foreclosures and REO's in this part of the country....such as, they are priced more than the rest of the country? or hard to find...etc?  Benjamin M
The numbers may be higher in most instances because of the higher values. Otherwise, basically similar approach to analyzing the numbers to see if you can make a profit. Of course you need to become familiar with the specific laws for your area. You do that by getting involved and asking questions as I explain in my book.

Hello Allen,
I am interested in purchasing a foreclosure, and possibly using your
services. I have some questions. You list the balance due and subsequent encumbrances. Would this represent the total amount that the buyer would be liable to pay?

Also, what sort of problems could there be with the title?

Do you list those in the report, or would a title company give that info to me if I gave them the address?

Rarely happens, in fact I don't recall it ever happening to me. I always 
make it a practice to communicate with the occupant to work out a smooth turnover of possession. Again, discussed further in the book. Take Care!
Allen

To: Allen@HOMEBARGAINS.COM
Subject: motivated learner

     I recently worked with a company that purchased foreclosures at the auction.  They bought a ton of properties.  I was the individual that researched the information, compiled it, and prepared it in spreadsheet form, with the opening bids, for the acquisition specialist for when he attended the sale in an attempt to purchase.  I    I was just on salary.  Now I am out of a job but know a lot and can put together a lot.  However, I have no money. I did read your book. Still, I have no money.  What else do you suggest Mr. Watkins.  Like with many, I have a family and a lot of bills.   I have a skill and knowledge, but, again, no money.  I am familiar with the Foreclosure Report of Chicago, as well as, other forms of information pertaining to the pursuit of foreclosures.  Nevertheless, I need serious feedback. Please help. I admire your work and I could really use more of your wisdom. Maybe you can be my mentor.  I really hope to hear from you. Sincerely, LM 

I get your message "you don't have any money!"  So!  
I didn't have any either when I started. You do have a lot more than I did though, and that is the knowledge you already have, just keep adding to it and start making deals.  
You do not actually even need to own real estate to make money. I've done it, & I teach people how.  You have read the book so what is stopping you?   
If you would like to meet me and hear me teach in person, I suggest attending my seminar in my home. It is only $299. I'll even take payments. 
I refinanced my car to get the $500 tuition to attend my 1st seminar. My seminar is better.
www.HomeBargains.com
Allen Watkins 
It is far better to attempt success and fail,
than do nothing and succeed!

You told me how it is.  I admire that. I am going to read your book again, and I will see how I can scrape the tuition together to attend your seminar. It sounds like it may take me over the top once I do.   Thanks again, Allen. I hope that it was okay to just call you Allen.  LM

 Dear sir:
     I'm looking for a home equity loan, I have been having an extremely hard
time getting it, I've tried refinance, 2nd Mortgage, but to no avail I've been
turned down lied to, and even made to think that one company was truly
willing to help me, as it turns out after all her lies and deceit I was
turned away, my last hope, My name is Catherine, and I bought this
home 2 yrs ago, its a pre 73 double wide mobile, we done so much in the
improvements that I shorted myself, I wish I hadn't but It happened. I'm so
ashamed of it, but why I'm writing is because of your ad under the government
listings, saying you can help, and it has been the most promising ad I've
seen so far. That's why I write, I'm a singled mother, who has taken on a
disabled renter, who pays me 500 a mo. I work two jobs, I am a teachers
asst. in the day full time, and in the evenings I work on a peppermint farm,
during summer, but I receive an income while on summer break. the yr wage
was split into 12 months so I get a check from school. then when I'm back in
school in winter, at nights I work for OSU concessions, as an usher.
     I am in knee deep in debt, and the promise from a few companies have
really crushed my faith in humanity, Your ad almost seem to have needed me
to fill out an application. but I didn't know how to get it. All I ever wanted
after my divorce was to clean up my credit and do a few more repairs on my
home, before the rains set in again, Its been a hard 3 month's, trying but all
these people have done looking into my credit, was ruin my scores, then the
credit agency's sent back my request to investigate the false reports on my
credit, and their P.O. box has been cancelled, so now I'm ruined, as for the
companies that have never told me of scoring in my credit, they have gone to no
ends to break my scores where no one would even look any more, and I wanted
so much to make things right that I cant anymore. I have found that I have
severe attention deficit hyper, disorder, and I need you r help, I don't want to
seem like I'm begging, so I have an extra lot for sale, if your company cant
get me an equity loan to save me and pay my bills, and take care of my son
who has been for the most part, the medical problems, that have put me in
this position.
     If anyone has ever needed more help in this world it would be me, I'm
sorry, that I couldn't do everything to keep myself from getting into this
mess as far as I have, and there is no one person I can turn to anymore, and
that add told me you could, I've always believed in god, and I pray every
day, for his help, and it seems he doesn't answer me, or has turned away, I've
a hard working woman, who can no longer handle the stress, and I have always
helped everyone who ever needed it , but it seems no one cares anymore, can
you please help, Its so important now days that we believe in miracles, and
your most likely my last. please call me or Francis, who is my renter
if you need any information, I give you full permission to speak to him, or
you may e- mail me for anything at, if you can please help, please call, or
contact me, or Francis. Thank you so much for putting up with my letter
                                  Catherine 

Hello Allen, My husband and I just entered into an agreement to purchase
three rental houses from my uncle.  We got a great deal, its owner financed
25 yr. mortgage, but I have a question, he is talking about doing a "Land
Sale Contract" instead of the regular title transfer?", for at least the
first 2 or 3 years.  What is the difference exactly?  I know he said at least
our taxes wont be reassessed right away and be twice as high, but is this
maybe not such a good thing for us?  He said our name will be down as owners
and his on there as lien holder?  Like buying a car.  Any Info would be appreciated!                                   Thanks Deidra D.

Hi Deidra,

    A land sale contract, contract for deed is owner financing and accomplished usually by an attorney preparing what is called "Articles of Agreement". Instead of deeding the property over to you and then entering into a mortgage for the money you owe, your uncle is going this route. A safer route for your uncle and less beneficial for you, would be a lease option agreement. If you were to default all he would have to do is evict. These other methods in my opinion is that the bottom line is, if a dispute were to occur and you were both standing before a judge he would deem it a mortgage and require a foreclosure law suit as your Uncle's only remedy.

Your Uncle's suggestion is a good one for you. He will still hold title in his name and you can still enjoy the benefits of ownership with full control of the properties. When he is comfortable or you can refinance for perhaps a better interest rate, and or to pull out some equity, then concern yourselves with the title transfer. A deed should already be prepared for recording, to transfer title into your name upon completion of the terms of your agreement. Held by his or your attorney. Have him prepare the paper work then have your attorney review it before signing. Your attorney should ensure there is language to protect you in the event of his untimely death.

Good luck, Make it Happen!

Hello Allen.  My name is Matthew __________.  I am a friend of Rosalie P.  She gave me a copy of your book "The Reality of Real Estate Investing".  Two and a half years ago I had a bankruptcy because of medical bills.  It was discharged (CHAPTER 7) in January of 98.  I discharged my mortgage and second mortgage then.  I did not sign up for payments to either mortgage.  I started making payments to my first mortgage later but not my second mortgage.  The second mortgage was provided by my friend who built the house.  Last year I entered a business deal as the Vice-President of a company that was supposed to go places.  You guessed it, it didn't work and my house is in foreclosure.  My house appraises at 105000.00 and my mortgage is 69000.00.  My escrow is 2620.63.  My delinquent amount is 8389.92.  My late charge is 397.92.  My mortgage payment  is 750.53.  My second Mortgage is 14000.00.  My wife and I have no credit and 4000.00 saved up.  My mortgage company will refinance me if I could come up with 6000.00.  My lawyer says I can walk away on the sell date.  I talked to an investor who might buy it to save my credit.  I talked to somebody who might sell me a duplex rent to own if I can come up with 12000.00.  Half my rent would be paid by a rental.  I have nowhere to go, bad credit, and don't know what to do.  If you have time could you please advise me?  I can answer your questions via E-Mail or phone at 618-452-4025.  I am sorry to bother you, I know you are busy.  I do not know what to do.  

Thank You, 
Matthew ___      

Hi Matthew,

Some things I do not understand about your story
I am not aware that you can wipe out secure mortgages on your home by filing BK?
In foreclosure by the first, second or both?
So your total debt is 94,406, That leaves about 10,000 in equity. The only way this would be worth while for an investor to buy is to seriously discount the second with your friend. Otherwise I don't believe it is likely that he will buy. Because there will be cost to him, and if there are any repairs, 10,000 is not enough room. If your friend will discount, have him do it to you. Either way you probably need to sell, try by owner to avoid commission, due to your limited equity, read my chapter on marketing. Get what money you can out of it and start fresh. If you can make the deal on the duplex great! If not rent until your back on your feet.

Hey Allen, My Wife and I went to a foreclosure auction last Thursday in our county.  We ran into the auctioneer on the court house steps and he told us a lot about the whole process.  He mentioned it's usually better to not bid on a property if there is not competition, and then buy it from the bank directly a couple of weeks later. Thanks Jerry C.

Dear Jerry:
The auctioneer is wrong!
"He mentioned it's usually better to not bid on the property if there is not competition and then buy it from the bank directly a couple of weeks later."
Ask him how many he has bought?  Once the bank owns the property they can ask any price they want not just what was owed. They like to try and get as much as possible naturally. More often than not the bank also list the property with a Realtor which involves a commission being paid. At the auction, if you bid one dollar more and there is no competition, you just got it for one dollar more than the balance owed.