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Real Estate Investing For Today

April 20th, 2008
Investing in real estate today is really no different than any other time. Years ago, people were playing the short term investment “flipping” game and some were making good money. This is really not how real estate investing is supposed to work and it is no wonder that the bottom fell out of this market. Real estate is mean to be a long term investment opportunity. 
 
You can invest in real estate today just as easily as you could have years ago. Actually, you are better off to invest in real estate today more than ever. The reason for this is that not only are the housing prices low, but the mortgage rates are lower than they have been in decades. The Federal Reserve just lowered the interest rates again in a futile attempt to stimulate the economy. You can take advantage of this fact and buy low with a low interest rate.
 
Be prepared to hold onto your investment for at least four years. This is a wise rule of thumb when it comes to real estate investing, anyway. The old rule was that you should be prepared to live in a home five years if you were going to make any money. This rule still applies, but as the prices of homes have reached the bottom, you can safely say that things will take a turn for the better in four. The longer you can hold onto the home, however, the better you are. This is especially true if you are using the home as your residence.
 
Investing in real estate is a lot like playing poker. You have to know when to stay in the game and not to fold. Many people who have property today are panicking and selling their homes to get out of the market. They are folding too early. In order to make money in real estate, you have to know when to hold on to the investment and the right time to sell. The good part about this is that there are usually plenty of people around who will tell you this. There are also flags that you can look for. When real estate agents start contacting you for business, you know that business in your area is hot and this is a good time to sell. Follow the trends.
 
The real estate economy is often discussed on television and news reports as well. If you own property or hope to own property, you should watch these programs so that you can learn to pick up on the trends. This is how you learn to make money in the market. You will be more in tune with the entire real estate market if you take the time to learn about it and the growth trends. 
 
The most important aspect when it comes to real estate investing is always the location of the property. The better the location, the more money the property is not only worth, but the faster it will appreciate in value. A property in a blighted location may not appreciate in value at all, it may depreciate in value or stay stagnant. 
 
Look for homes in a good area where people want to live and make bids on foreclosed properties or others where the owner is eager to sell. You can get a good deal because of the fact that there are more sellers than buyers and also take advantage of the low interest rates. 

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Real Estate Investing 101

April 19th, 2008
Just because the residential real estate market has crashed is no reason to think that you cannot still make money in a buyers market. The country is heading into a recession and has been for over a year. We have not yet reached rock bottom. However, you can make money in real estate during a recession.
 
Real estate is one investment that is needed by everyone. Everyone needs a place to live. If you cannot afford to purchase a home of your own, you have to rent. One way to make money in a down real estate economy is to buy a home on the verge of foreclosure where the residents are still living in the home.
 
By purchasing a home that is on the verge of foreclosure, you can allow the former owners to stay in the house and continue to make payments to you as their landlord. You will be getting all of the tax benefits as well as be the ultimate owner of the home. You can refinance the mortgage so that the interest rates are lower and the mortgage rate is much less than what the people were originally paying. You can help them out of their bind by lowering their monthly rent payments and allowing them to stay in their home for a period of time until they can afford to either buy the home back from you or move on.
 
If they cannot afford to continue to live in the home any longer, you can rent the home out to other people. The home will be a long term investment for you as well as a tax write off. If you are planning on investing in real estate in this manner, make sure that the home is located in a solid area where the property values are increasing. In a few years, the market will rebound making your home worth a lot more than when you purchased it. 
 
In many cases, a person who is on the verge of foreclosure has no idea what they can do to help themselves. If they have children who are attending a nearby school district, they do not want to uproot them. You can help them and make a wise investment if you purchase the home before it goes into foreclosure. This is known as the short sale and you will be merely assuming the payments as well as the incurring the debt from the bank. Since banks rarely lend out more than 80 percent of the value of a property, you are already getting, at the very least, a 20 percent discount off of the home. The longer the people have lived in the home, the less they likely owe for the mortgage. You will assume the mortgage payments, refinance the property at a lower interest rate and then rent the home to them. 
 
This will make the people who are on the verge of foreclosure happy to be able to stay in their homes as well as have the potential to make you some money. If they have gone into foreclosure because of some unforeseen circumstance that will be alleviated, such as someone losing their job, you can make them an offer to rent to buy, which means that a portion of their rent can be used as a down payment if they want to buy their home back when things get better. Either way, you make a solid investment and have renters who will most likely take care of the home.   

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The Truth Behind Pre-foreclosure Lists

April 18th, 2008
Today’s real estate market is characterized by an extraordinary number of foreclosed homes. More homes went into foreclosure in 2007 than in any other previous year and that number is expected to increase in 2008. Very often times the lender seizing the property will auction the house off at well below market value in order to recover their debt as quickly as possible.
 
If you perform a search online for the word ‘foreclosures’ you will discover endless advertisements for foreclosure based money making opportunities. Many of these opportunities involve lists of homes that have gone into foreclosure only recently and therefore present big opportunities for investors. While many of these lists contain nothing more than information that could be found in your local newspaper, some of these lists can provide you with the information you need to make a killing with foreclosed homes.
 
Some experts believe that buying a foreclosed home before it reaches the auction block can drop the price by as much as 50%. The drastic pre-auction price reduction allows an investor to easily double their money with a single property. Pre-foreclosure homes are great too because they give the investor the opportunity to thoroughly research the property before they purchase it.
 
As already mentioned, most pre-foreclosure lists contain information that is freely available to the public. Before you purchase any such list you should always do a little bit of research online and contact your county clerk or county records office. Many times your local government offices can provide you with the same information as list brokers but won’t charge you a dime for it.
 
However, list brokers will many times be able to provide you with much more detailed information than a trip to your county records office might. A list broker can provide you with such detailed information as the phone number of the selling agent, property liens, loan amounts, and the price of the foreclosed property.
 
Unfortunately, investing in pre-foreclosure homes can have several disadvantages that investors should consider before risking their money and time. The biggest danger for foreclosure investors seeking to take advantage of the disparity between the low auction prices relative to market value is the actual condition of the home. Foreclosed homes have an unfortunate tendency to fall into disrepair, including homes that may seem to be in otherwise pristine condition.
 
The emotional distress faced by the homeowner simply causes the homeowner to stop maintaining their home in the way they normally would. The cost of repair and restoration can quickly eat away at the investor’s potential profit. Before investing in a foreclosed home, an investor should have the property in question thoroughly inspected. Failing to do so could be a nightmare for the investor.
 
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Foreclosure Scams You Need To Know

April 17th, 2008
The collapse of the housing market coupled with the meteoric rise in consumer debt has dramatically increased the number of annual foreclosures. Last year there were both record number of home foreclosures and bankruptcies reported across the US. Those who endure the hardship of foreclosure face possible loss of their home and this in turn causes them to seek out assistance.
 
Those facing foreclosure face tremendous emotional distress much more so than those facing bankruptcy. The extraordinary stress of foreclosure causes ones judgment to become clouded and makes it easy to fall victim to scammers.
 
It always astonishes me that no matter how bad off an individual might be there is inevitably another individual willing to exploit that persons suffering for their own financial gain. Con artists and scammers have wasted no time in preying upon the extraordinary distress of those facing foreclosure.
 
Scammers attempting to siphon money from those facing foreclosure primarily rely upon two scams: the equity scam and the fake counseling scams.
 
An equity scam is where an unsolicited offer is made to those facing foreclosure to find a buyer for their homes and immediately solve their financial problems. The individual making the offer will even offer to take over the debt in exchange for their deed to the house.
 
Once the house is deeded over to the scammer, the house is then rented out while the foreclosure proceedings remain in progress. Foreclosure proceedings can take many months offering the scammer the potential to earn thousands. Those who deeded over the home ultimately do not discover the scam until their home has been auctioned off. They are then stuck with the original mortgage debt and the loss of their home.
 
With the fake counseling scam, an unsolicited offer is made for “expert” advice and assistance in exchange for a small fee. The “experts” will then figure out a way to reduce your monthly payments and even reduce the original mortgage debt. What really ends up happening is that the money is turned over to experts who offer advice that could have found freely been on the Internet.
 
 Often times the consulting fees for such a service can cost hundreds and even thousands of dollars. The best a consultant can really do is get you a short grace period, usually of no more than a couple of months. Again, information for the grace period could have easily been retrieved from the internet or by a quick trip to the local library.
 
The easiest way to avoid being scammed while enduring foreclose is to remember the golden rule marketing; if it sounds to good to be true, it probably is. If someone offers “expert” advice and assistance, you should do a search for the information they provide on the internet. More than likely you will find the very same information that the “experts” have access to but without the price tag.
 
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Now Is The Time To Purchase Real Estate!

April 16th, 2008
Now is the best time to purchase real estate. If you have thought about investing in real estate for any reason, know that there has never been a better time than now to invest in this market. The real estate market is in a recession and there are more sellers than buyers. This means that the supply is up, the demand is low and the prices are rock bottom. This is the time to buy.
 
The real estate market will rebound again. It will again become a sellers market in which there are more people looking to buy homes than people willing to sell them. This will probably not occur for at least another four years. During that time, things will even out a bit and housing prices will level off. When the sellers market hits, the prices will begin to rise again.   That is when you want to sell. 
 
In addition to being a great buyers market with tons of foreclosures on the market, another aspect of real estate market today is the fact that the mortgage rates are lower than they have been in 40 years or so. This gives you the opportunity not only to take advantage of the low asking prices on homes, but also rock bottom interest rates. 
 
You should look to your real estate investment as a long term investment at this point. It will take several years for the market to rebound from this slump. When it does, you can then sell and make some money on your investment. In the meantime, you can use the investment for practical purposes. Either you can live in the home yourself, have family members live in the home or rent it out to tenants. The mortgage will be covered and eventually you will be able to sell the property that you purchased for a lot less than market value, for a profit. 
 
Real estate is one of the best investments that you can make. It is a tangible asset that not only can be used, is something that must be used. One of our most basic needs is shelter. Real estate is the only investment that you can make that attends to one our basic needs. You certainly cannot invest in food as it does not last for the long haul. And clothing? Too trendy and never worth more used than when new. But real estate is a winner. Shelter is the one thing we all need and you can actually make money by investing in real estate, even in a depressed market. 
 
Take a look around and purchase real estate in an area that is either about to hit a growth spurt or is stable and established. If you are looking for a home for yourself, take a look at the many different foreclosures that are on the market. You can get quite a deal as there are thousands of these properties all over the United States, even in upscale neighborhoods. When you find a property that you like, bid low. Take about 20 percent off of the asking price. The seller can always counter offer with a higher figure. 
 
Shop around for the best mortgage interest rates and packages. There has never been a better time than now to invest in real estate. 
 

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Now Is The Best Time For Real Estate Investing!

April 15th, 2008
If you think now is a poor time for investing in real estate, you are dead wrong. There has never been a better time to buy an hold onto a piece of real estate for a long term investment. Real estate is meant to be a long term investment. Toss everything that you heard during the early part of this century out the window and consider the following:
 
Real Estate Is Meant To Be A Long Term Investment
 
People who were flipping homes made some money. A lot more lost money. They were using the booming economy as a way to make quick money similar to playing the stock market. This was a gamble for them and some of them lost. Worst of all, they ended up driving up the price of homes to the point that they were over inflated. There are many people today who actually owe more on their property than it is worth. 
 
Real estate is meant to be a long term investment, not a quick way to make a buck. It is also something that you should invest in carefully. Look for homes in an area that is stable and is preferably growing. Offer a low price for a home that has been on the market for a long time. You can either live in the home or you can rent it to others. The main objective is to hold onto the property for a few years until the housing market rebounds. Real estate is meant to be a long term investment. 
 
Property In Blighted Areas Is Not A Good Investment
 
Properties in areas that the value of the homes has declined in the past few years, have a heavy crime rate and are dilapidated are poor investment choices. Even if you only pay a few thousand dollars for such a house, you are better off to stay away. This is where you lose money. 
 
Purchase property in a location that is either up and coming or desirable in which to live. If you have information that a plant is coming to the municipality that will guarantee more jobs, you can take that knowledge and use it to your advantage and buy in that municipality as chances are very good that the price of the homes will skyrocket. 
 
Make sure that you understand the location in which you are buying and stay away from blighted areas unless you know something about the area, such as it is designated for a major rehabilitation. Even then, you are taking a risk as these projects are usually politically motivated and plans have known to be altered. 
 
Many people who are targeted to invest in real estate are given erroneous facts. They are either persuaded to invest in blighted areas or are told that they can make a fortune overnight. Know the facts. Location is everything in the real estate market and there is no sure way to make a quick buck. Real estate should be treated as a long term investment. 
 

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Making Money In Real Estate During A Recession

April 14th, 2008
When the real estate market crashes, like it did over the past two years, it takes everything with it. The entire country heads into a recession. This has happened several times over the past 30 years. The good news is that the real estate market always bounces back. 
 
You can make money in real estate during a recession if you look at the long term investment instead of the short term flip sale. When the economy was booming, people were purchasing new construction homes at the onset of construction and then selling them to another buyer once construction was completed. Homes were appreciating in value at such an accelerated rate that this was possible to do and quite profitable. This practice was known as real estate flipping. 
 
Remember all those infomercials that talked about making millions in real estate overnight? They were teaching people to flip homes. Because so many people go in on the action, it actually created a false market for new construction in some areas and over inflated prices of homes in others. It finally became evident that there were more investors than buyers and the market crashed. It is Economics 101 - the law of supply and demand. 
 
Now that the supply is so high on all sorts of residential real estate, anyone seeking to buy has their pick of many different options. Not only that, but there is also another incentive to investing in a down real estate market. In the past, when the real estate market crashed, the mortgage rates were usually around 12 percent. Now they are down below 5 percent. The Federal Reserve keeps cutting the rates in a sorry effort to boost the economy, as this has worked in the past. As a result, you have houses priced lower than market value, a wide range of homes in foreclosure, even in upscale neighborhoods and low interest rates.
 
You can make money with the long term investment in several ways. One way is to actually buy a home where you plan to live. You can get more bang for your buck than ever before, especially if you buy a foreclosure in an upscale neighborhood. In most cases, you can get the home for a fraction of its value. 
 
Another way to make money in the down market is to buy cheap residential real estate that is in foreclosure or on its way to foreclosure and rent it out. You can even rent the property to people who are on the verge of foreclosure with an option to buy back the property. You will have the property and a nice profit if and when they ever buy the property back from you. In the meantime, you are holding on to a piece of property where you have solid renters who will most likely take care of the home.
 
Still another way is to buy new construction or partially constructed homes and complete the construction in order to sell them. Many residential contractors have already gone bankrupt and others are on their way. You can pick up partially constructed homes for a fraction of their worth.
 
Remember that this is the time to buy and that you should buy as cheap as possible and plan on holding onto the property for a few years until the economy rebounds. 

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Making Money In Real Estate - New Construction

April 13th, 2008
If you think that because the residential real estate economy has gone bust that there is no way to make money in this market right now, think again. There are thousands of upscale neighborhoods across the United States in which new construction of homes was halted because of the collapse of the real estate market. Most of the homes that were under construction had been purchased by real estate investors who hoped to flip the home upon completion to a new buyer and make a sizable profit.
 
When it became apparent that the majority of people who were commissioning new construction homes to be built were investors and there were not a lot of buyers, the entire market crashed. Investors lost money and many developers went out of business. They had a lot more homes in their new subdivision for sale than there were buyers. On top of that, they owed banks money for financing the subdivision. Pretty soon, banks took over these areas, which are located throughout the United States and particularly in Florida, California and Nevada. These areas were booming in the 1990s and then crashed. 
 
There are many homes in these upscale neighborhoods that are in the process of construction. When the builder went bankrupt, the construction was halted. Banks took over but have no interest in getting these properties constructed. They are simply looking to get their money back.
 
If you know about new construction or are in the trades, you can buy one of these partially constructed homes for a fraction of their cost and finish the construction yourself. You have to be careful, though, that you understand what you are getting into.
 
You will have to know about building codes and make sure that the home is completed in accordance with the codes. In addition, you should also be aware that some municipalities have ordinances that require that construction be completed within a specified amount of time. If the house has not met that specification, there may be fines associated with the property. A title search will allow you to discover if there are any fines that have been levied against the property from the municipality for non completion of construction. 
 
In addition to doing as much of the work on your own, you can also find labor relatively inexpensively throughout the United States. The trades were hit hard during this recession and there are many people who are experienced in all aspects of home building that are out of work. Many small trade companies have even gone out of business. You can find cheap labor to help you finish the construction of your house.
 
Buying new construction is usually a way to make money in real estate during any type of market. But even in this recession, you can buy partially constructed homes, finish them and then get ready to sell. Although you may make a small profit selling the home after construction is completed, you can make an even larger profit if you look for the long term investment and wait until the market turns around .
 

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Making An Offer On Real Estate In A Recession

April 12th, 2008
What should you look for when you are making an offer on a piece of real estate during a recession? You naturally want to get the best deal possible, so you should be careful about doing your homework before you are ready to make an offer. Here are some tips that can help you make a good offer during a real estate recession:
 
Discount anything the real estate agent tells you about the price.
 
Real estate agents are paid on commission. It is not in their best interest to see you “get a deal” on a piece of property. It is in your best interest, though. Do your homework and take a look at the amount that other homes in the area have sold for, not for the amount that they are listed, but for how much they sold. This is all public record. Take a trip down to the county recorders office and you will find the information on any homes that have been sold in your area. 
 
Offer At Least 20 Percent Less Than The Listed Price
 
The rule of thumb used to be to offer 10 percent less than the listed price. This was considered a low offer. With the economy today, the rule of thumb is 20 percent less. There are so many homes on the market today that you really have quite a choice when it comes to where you want to buy and how much you want to spend. 
 
Take A Look At How Long The Home Has Been On The Market
 
Be sure to look at how long the home has been listed. Homes that are fresh on the market should be looked at as they are sometimes listed a lot lower than they should be by either an inexperienced or greedy real estate agent. If the home has been on the market for less than a month, chances are that the owner has delusions of grandeur and refuses to believe that there is a recession. You can offer less, but chances are that they are going to want to get other offers.
 
If the home has been on the market for a year or more, there is either something really wrong with the house or they are not budging on their price. This is a good one to skip. There have been houses that have remained on the market for several years, vacant. 
 
Be Pre Approved And Have Nothing To Sell
 
Although a seller will probably take any type of contract in this market, you are a lot more attractive as a buyer if you have nothing to sell and have been pre approved for the mortgage. A pre approval letter is different than being pre qualified. Someone who has been pre qualified has not gone through the gamut of giving in all the paperwork needed for the loan. A pre approval letter means that you have gone through the entire mortgage approval process and are ready to close.
 
Follow these tips before you make any offer on real estate in the market today. You can invest in real estate during a recession - you just have to understand how to go about making the right offer. 
 

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Make Money With New Construction

April 11th, 2008
If you know something about new construction, you can make money in the real estate market today. Either you can purchase a foreclosure that is in the process of construction or you can purchase a lot and construct your own home. Either way, you can put your skills to work for you in today s real estate market. 
 
There are thousands of new construction homes that are in foreclosure throughout the United States. If you are a skilled tradesman or have friends in the trades, you may be able to not only get a home for yourself in which to live but also make some money in real estate today.
 
Although the real estate market is in a recession, there are countless homes that are under construction that have not been completed. The new housing recession caused many developers to go bankrupt which left many home in the process of construction. These homes are owned by banks that are seeking to get rid of them. You can find this information from banks or simply by looking in different sub developments that have been foreclosed upon by banks. There are many of these throughout the United States. 
 
It is not difficult to find out which bank owns the property in which you are interested. This can be ascertained by anyone in the real estate business as the homes will be listed. You can then make an offer based upon how much money it will cost to complete the construction of the home. 
 
By using your own labor, you can get paid when you sell the home upon completion. Or, you can live in the home and hold onto it for a while before selling. Eventually, the home will appreciate in value and you can then sell. Either way, you will have a home that you have completed and made ready for sale. 
 
There is always money in new construction, especially if you do some of the work on your own. Even if you are not in the trades, you can still save money by completing construction by laying your own tile and painting. Any skills that you have can help. Even acting as your own general contractor can save you money as they usually make about 20 percent of the total value of the home. 
 
In addition to buying a foreclosed property that is in the middle of construction, you can also purchase a lot and construct your own home. You can live in the home or sell it once it is completed. Be aware that the new home sales are just as tough as existing home sales and that you may be better off to live in the home for a while until sales bounce back.
 
If you are looking for a home of your own, there has never been a better time to general contract your own new construction home. You can easily get the labor that you need as well as materials and supplies. You can also get easy home loans that can help you finance the project. New construction is always a good way to get a home of your own. It will also appreciate in value, earning you money when you sell. 

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