Archive for May, 2009
Real Estate Investment Math: Investor Realtor Loyalty Success!
You may be reading in the real estate blogosphereand hearing from the experts out therethatnow isa great timefor real estate investingdue to the incredible amount of deals and foreclosures that exist across the country. Banks are giving homes away.
I do agree as Iwork withthese deals all the time. However real estate investing can be a risky business and a very slippery slope. One thing that is indisputable investing in Real Estate involves MATH.
Yes our favorite subject. But it is really quite easy and Here it is:
INVESTOR REALTOR LOYALTY= SUCCESS
1. First you mustnot it would be nice if you did butyou mustinterview local real estate agents in the area you are thinking of investingbecause they are in the trenches every day with buyers.Realtors know what buyers want what neighborhoods are in transition declining revitalizing and which areas will likely bring investors the best return on their investment down the road.
2 Once you have interviewed several Realtors to see which onesare selling not just listing the properties inyourchosen area then commit to them. Let me say this again….commit to your Realtor because they will work hard to make the entire transaction smooth and bring it to its ultimate conclusion….closing.
There are many many steps along the way from contract to closing. If youare loyal to your Realtor they will be loyal to you andwill be a considerable assetin your investment plans. As a good investor you must realize the importance of having a good real estate agent in your corner. It can mean the difference between success and failure. Your TIME is money and your Realtor saves you an incredible amount of time from negotiating the contract to setting up the inspectionto working with the lender appraiserandthe closing attorney the list goes on and on.
3. If you buy to renovate and resell guess what? The Realtors are a wealth of information when it comes to contractors who they recommendfor your project. They have had the opportunity to see how these contractors work their fees their reliability etc. Bad contractors can eat away at your profits quickly so you need good ones.
4. Okay so now you are ready to resell the property. It is here where many investors think the hard part is over. They think theywill just put a FOR SALE BY OWNER FSBO sign in the yard and sell this thing ontheir own. BIG mistake in this market. Now more than ever you need a Realtor working hard to getthe home sold. They have access to buyers that you do not whena buyer does comes along again the negotiation process starts and you do not have to deal with that buyer face to face. As an investor there are significant benefits in NOT having to deal with the buyers directly. Remember TIME is money and many investors mistakenly think hey I can sell this home on my own and save thousands in commission but forget to realize that they will likely hold onto that property for a longer period of time than if they had used a Realtor from the start.
Here is what happens so many times. Investor puts thehome on the market on their own it sits there unsold for a few months or moreand THEN theycall upon theRealtor. Well they have just lostequity by having to pay their mortgage note for themonths that the home sat unsoldon the market.Realtors willtell you the longer it sits it becomes stale and you will most likely have to reduce your price to sell.
Depending upon your margin you may have lostmost if not all of your profit/equity…not a good situation but one in which many investors fall into.
5. If you use a knowledgeable Realtor to buy the home use the same Realtor to sell the home why not they know all about it from start to finish.If you stay loyal to the Realtor guess what? They will become a “bird dog” for you and start findingYOU thedeals. Now that is what I call Success!
Investor Realtor Loyalty= Success.There is NO fuzzy math here….Agreed?
Now go out there and do good things! Invest in Real Estate Todaybut do not go it alone get thetraining coaching andmentoring you need to reap the rewards this business can bring to you.
About the writer: Peter Vekselman has been successfully investing in real estate since 1996. He has completed over 1000 real estate deals owned a construction company been a private lender and owned a property management company. Peter currently works with clients all over the US www.CoachingByPeter.com .
Real Estate Bubble: The Effects Of A Hangover
We all know that 2000 2005 comprised one of the hottest real estate markets on record in which the industry enjoyed tremendous growth. But are there any consequences to the industry?
“Definitely” says Stefan Swanepoel author the annual Swanepoel Trends Report in his latest 2007 edition. “During this period of growth the country experienced a buying frenzy fed by low interest rates a plate full of new mortgages bullish customer confidence low unemployment strong economic growth and excellent price appreciation. Many economic factors were required to be in place for the prolonged real estate boom” Swanepoel says. “The consumers’ hunger seemed to have no end but it took more than just an appetite for bigger and better to fuel such a run in real estate”.
According to many sources outside the real estate industry this market is destined to have its bubble burst with higher mortgage rates a downturn in home sales an increased inventory of unsold homes and an economy headed for a recession. Industry insiders however paint a much different picture based upon: strong employment; an artificially high demand for home buying that has dissipated; the balancing out of homes purchased by investors for rapid appreciation being put back on the market; lower interest rates; and a strong economy.
Supply and demand form the basic foundation of a capitalistic market. In real estate terms if an increase in home buyers and investors including flippers and speculators has artificially driven up demand and hence prices then when the lowinterestrate stimulus is removed a “correction” will occur. If the increase in demand is a result of job growth or an influx of new homebuyers to the area then the resulting home price appreciation is naturally driven and hence there will be little or no correction if interest rates change.
According to the Report a surge in media directed new programming at the housing market from homerepair to fixandflip to homemakeover shows and compounded the frenzy. Many people started looking for a “getrich scheme” while others just didn’t want to be left behind. Tens of thousands of people were pulled into real estate as it became the new “Internet Craze” where anything containing the words “home or real estate” seemed to be as hot as anything with a dotcom during the late 1990s.
“Adjustments on various levels not just pricing would be a good thing for the real estate industry” Swanepoel says. “The industry still has to deal with the morning after affect and challenges such as:
Too many agents and brokers
Too many inexperienced agents
Too many new mortgage brokers
A decrease in housing prices
A rise in the number of foreclosures
An increase in mortgage fraud”
Swanepoel cautions that for a great many agents who have never experienced anything other than the most recent feeding frenzy this is the first time they’ll be learning them and for the rest who have “been there before” it’s a time to reflect on the last time through the cycle and add the new lessons learned.
“The effects mentioned above will of course be felt differently in every region” Swanepoel says “as the impact will be regionally amplified in areas where home prices have risen sharply or had a disproportionate surge in agent count.”
It’s not that the industry hasn’t experienced any of these challenges before Swanepoel says. It’s rather that the combination of all of them including the changing consumer and advancing technology will probably expedite the restructuring of the real estate brokerage industry.
So how will the industry deal with the effects of a hangover? For a balanced and invigorating discussion on this and many other real estate issues affecting the industry get a copy of the 2007 Swanepoel TRENDS Report http://www.RealEstateBooks.org. This 159page Report will give you lots of food for thought.
About the writer: Ron Victor is a Expert Author for We Buy Houses. He written many articles in various topics like We Buy Houses in Canada We Buy HomesWe buy houses for cash and We buy houses. For more information visit We Buy Houses.Contact him at ron.seocopywritergmail.com
Property Prices Are Falling Here Is A Simple Solution
The property market after many years of good growth is starting to slow and with the stock market falling home owners are starting to worry that house prices could nose dive to.
However there is a simple way to protect yourself from these falls and its becoming more popular than ever.
The Outlook
The property boom is over for the time being for the following simple reasons:
Liquidity in the economy is being curtailed by higher interest rates.
This makes both exiting and new mortgages cost more and less people can afford new housing or to move.
Even if rates were not to rise any further the above still applies to a lot of homeowners:
There are a huge percentage of mortgages that were sold with low starter rates which have now increased and this is equivalent to a rate rise to these people.
After a boom a best normally follows and that is what we are likely to see.
If the stock market continues to fall then liquidity will be squeezed even further and less money means less wealth and housing prices will suffer even more.
A simple solution
There are schemes that will allow you to lock in the value of your house at current rates for a small premium.
If house prices fall then you can get the value you locked in your property at and you are protected against a plunging property market.
If house prices rise you are unaffected and can take advantage of the full gain in prices.
So you protect yourself from falls and can take advantage of any rises which gives peace of mind.
In a raging bull market these companies dont do much business but in a falling market business is booming and it is perhaps something that any homeowner should consider.
The amount paid for the protection offered is affordable and gives peace of mind and is applicable to the majority of home owners.
Not only is this significant for home owners it also cuts the risk of people investing in property and can be used on commercial property as well.
History repeats itself
The housing boom has been great prices have risen strongly and economic conditions now point to lower prices.
Locking in property values against price falls looks set to become more popular than ever.
About the writer:nbsp;nbsp;MORE FREE INFO ON PROPERTY PROTECTION
On how to get peace of mind and locking in the value of your property at current value visit our website for a huge resource of articles features and downloads and at http://www.netplanet.org/index.html