Real Estate Investing

Craigslist, a legitimate online classifieds site, can be a great place to find landlords, tenants, pre-foreclosure deals, investment property, roommates, vacation rentals or simply a really great home. This blog has recommended the site many a time. However, there are vultures lurking, ready to pounce on the innocent and trusting, and vigilance is required.

In 2005, Craigslist CEO Jim Buckmaster told MSNBC that fraudulent postings made up only one-tenth of one percent of the site’s overall listings. The site has a very well-established method for users to “flag” posts for removal if they are posted in the wrong area or posted too often, etc. (signs of fraudulent activity). Furthermore, Buckmaster said the company was considering charging landlords to post property rental ads on the New York message boards, in the hopes of discouraging fraudulent real estate postings in the area where such activity apparently posed the biggest problem in 2005.

Not sure if they actually implemented such a policy, but it sounds like a reasonable one to implement nationwide because three years later, the problem persists. KGET 17, a Bakersfield, California news station, reported yesterday that a local woman was prey for an online real estate scam artist. As it turns out, the property photos and description that were so appealing to Tiffany Llamas were actually ripped verbatim from a listing handled by a legitimate realtor — the same one who happened to be working to help find Llamas a home. According to the KGET web site:

“The return email read: ‘I and my wife came over to the U.K. for missionary work, so I hope you will promise us that you will take care of our house.’ Llamas said, ‘That’s great but I still want to see the house first, and when he told me send $2,400 via Western Union and then he would, you know, send the keys to me.’”

Llamas didn’t fall for it, but such predators persist on a variety of Internet networking sites hoping that someone will fall for it. Apparently, tenants aren’t the only ones being preyed upon either. This is undoubtedly occurring in the property resale market as well. The Real Real Estate in Connecticut blog points out what can happen to landlords and (in the comments section) what can happen to those seeking roommates on Craigslist.

The blog points out some red flags to beware of with Internet dealings. It may sound biased, but the following qualities are true in the vast majority of cases:
-Poor English, i.e. broken sentences, misspellings and bad grammar.
-Asking questions about details you already gave in the advertisement.
-No direct contact information.
-The writer is overseas. Many of the scams are from people claiming to be in other countries.
-Very often, these people represent themselves as high-income individuals, like doctors, lawyers or professors.

Again, Craigslist itself is not bad, but the way it works has the potential to introduce a lot of people to a lot of scam artists. Never, ever give anybody cash, check, bank account information, etc. without having first met with them and thoroughly checking out the situation. Follow your gut instinct, and above all else, the old rule applies — if it sounds too good to be true, it probably is!

Some of the housing markets hardest hit by the foreclosure epidemic are seeing small signs of new life, thanks to eager bargain hunters seeking to capitalize on a golden opportunity. Home buyers in Detroit, Las Vegas, and Chicago are saving 30% to 50% by buying foreclosures, according to USA Today.

The article tells the story of Ruth Ahlbrand, a Las Vegas realtor who capitalized on her city’s tremendous foreclosure rate. Ahlbrand trained her agents in foreclosure deals, transformed her marketing campaign and even purchased a 40-seat bus to escort deal seekers around the city. Not only will bus tour participants see actual foreclosures available on the market, they will have the added bonus of hearing an agent on a loudspeaker lecture them on the ins and outs of buying foreclosures.

“It’s like a seminar on wheels,” Ahlbrand told USA Today. “Buyers are saving up to 30% or 50%. People are really looking for a deal. I’d almost call it a frenzy. We’ve hit the bottom, and Las Vegas is growing.”

Leading the pack in terms of reduced housing costs are Las Vegas and Miami with more than 19% reduction, Phoenix with around 18% reduction, Los Angeles and San Diego with more than 16% reduction and Tampa and Detroit with over 15% reduction. If ever you’ve thought of owning a home, now’s the time. Just don’t be afraid to wait out the seller or even pitch a low-ball offer. Amber Gilmore, one home buyer mentioned in USA Today, played the waiting game and earned a reward of $100,000 off her foreclosure purchase. While many buyers are still tentative about dipping their foot in the real estate waters, content to wait out the deals, it’s good to see that the really hard-hit cities could start seeing a turnaround soon.

Looking for a new home? Gone are the days of driving around neighborhoods, scouting out For Sale signs. Newspapers are even irrelevant to the home search nowadays. And you can forget trucking it over to your local open house. Online MLS listings, online classified ads, online high-powered search maps and even online virtual tours have made it so that the first human contact may not come until the closing.

It’s shocking, but true - it’s a digital age. Some say it’s convenient, but others say it’s sad. At any rate, most people (particularly under age 35) could name at least three great web sites to aid the real estate search. However, in a recent column for USA Today, tech wiz and radio show host Kim Komando compiled a pretty comprehensive list:

-Realtor.com is the official site of the National Association of Realtors.

-RealtyTrac.com categorizes listings according to pre-foreclosure, bank-owned, government-owned, FSBO, auction, resale and new. It’s very comprehensive and user-friendly, but costs about $50 monthly after the seven-day free trial.

-Foreclosures.com has foreclosure listings with market value and the percentage of equity in the home. Again, a seven-day free trial followed by a $50 monthly fee.

-BargainNetwork.com advertises thousands of foreclosures and FSBOs nationwide, but will not allow you to browse the site without signing up for a free trial membership, to be followed by a $40 monthly fee. The catch on these seven-day trials is that you must enter your credit card information, which will be charged if you do not call the company and cancel. In some situations, there may even be a $40 or $50 hold placed on your card during the trial period, so be forewarned.

-HomeSales.gov lists federal government-owned properties to be sold at auction, many of which are HUD homes.

-Trulia.com allows searches to be saved and referenced later, and e-mail notices can be sent out whenever there are new listings matching your search criteria.

Kim Komando lists other resources, like the home value calculator and neighborhood property value “heat maps” on Zillow.com. Of course, we wouldn’t want to forget about sites like FSBO.com and ByOwner.com, and Komando also recommends searching official government web sites for foreclosure listings. And of course, there’s always our good friend Craig. Warning: searching for real estate online, regardless of whether you are serious about buying, is a very time-consuming and addicting process. Proceed carefully!