Sub-prime mortgage crisis and ARMs Explained

Are You Ready to Cash In on the sale?

As a Canadian real estate investor, it is our job to find deals that give us the best return on investment and upside. As I travel the country in search of deals I run into many investors that are simply frustrated with the lack of deals that provide the ROI we have experienced in the past.

Like many Canadian investors before me, I decided to look south and take advantage of what many are calling the biggest sale on real estate since the great depression. My partners and I looked at the whole US market to determine how best to capitalize on the once in a lifetime sale happening due to the foreclosure crisis.

After exhaustive research, a few cities including Phoenix AZ became our focus due to employment, demographics, economy, growth history and projections, climate and a number of other factors.   We found it possible to buy properties from 30-70% below the cost to replace or build them!

Sub-prime and Adjustable Rate Mortgages

Historically, 2008 and 2009 is when the sub-prime mortgage properties were affected by the market crash. 2010 through to the middle of 2012 will see the foreclosures due to the Adjustable Rate Mortgages (ARM).

This disaster was caused, in most cases, by enticing people who couldn’t normally qualify for a mortgage with low “teaser” rates that would adjust to a higher rate in 3-5 years. Many people qualified for these mortgages with no documentation and were told they would be able to refinance their properties prior to the rate adjustment as property values continued to increase.

Of course, those values did not increase and people found themselves in an “upside down” position, meaning their mortgage became a higher value than the value of their property. As the mortgage adjustments happen, it becomes impossible for the mortgage holder to meet their new monthly obligations which can be many hundreds of dollars higher per month. As a result we have the unprecedented foreclosure epidemic and people walking away from their underwater properties and becoming renters.

Warren Buffet says: “Be fearful when others are greedy and be greedy when others are fearful.” It is a time when Americans are fearful and it is times like these that the biggest shift of wealth occurs and millionaires are made. Will you become one of these millionaires?

We as Canadians can help our fellow Americans by providing them good quality homes for purchase or rental and profit nicely at the same time. If you see yourself getting involved in this great sale and would like to benefit from our experience, please contact us. Rather than take the time to do the same arduous work and make similar mistakes as we have in our learning curve, join us as we educate fellow Canadian investors and assist them in the whole purchase process.

This process includes:  market research, property identification, bidding, negotiating, due diligence, financing, closing, repairs and renting, as well as legal and tax structure setup to minimize tax and liability.

We do the things needed that go far beyond what a realtor will do for you.  Why subject yourself to a year of learning and costly mistakes like we did before becoming an expert? Take advantage of our knowledge and our fantastic team to move you onto your path of financial freedom within days…not months or years.

For more information, email me at info@propertyprophets.ca.

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Sub prime mortgage crisis and ARMs Explained