20 Dec 07 
5 Things You Can Do To Make Money in Real Estate
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1. Buy and HOLD – Hold onto your property and over the years it will lose value, gain value, lose value and gain value again. The real estate market is cyclical and traditionally sees a 5-6% average annual increase in value. How’s that for an investment you are making small monthly payments on?
2. Location, Location, Location – Real Estate is local and then even more local. Areas within cities gain more value than other areas within the same city. Research your way to a great real estate investment and refer to surefire tactic #1 after you do purchase a new home or real estate property.
3. Buy When You Are Ready – Being ready doesn’t mean that you want or even need a new home. Buy a home when your credit is good, there are low interest rates and the market is a buyer’s market (like right now). Buy a home when you plan on holding onto the property and try your best to put down a considerable amount of money. Higher down payments coupled with a good credit rating scream lower interest rates and payments.
4. Rent Your Property out and Break Even or Create a Little Cash Flow - Refer to surefire tactic #2 (location) and #3 (buy when you are ready) and rent your low monthly payment investment to a good family with good credit history. Then you will need to refer back to surefire tactic #1 and HOLD. Keep in mind that in some markets today, it is very hard to purchase a new home and breakeven, or to cash flow the property without a large down payment.
5. Buy a Foreclosure or Short Sale Home – A good way to make a little extra cash and boost your equity is to profit off someone else’s misfortune. It’s unfortunate that people lose or cannot afford their homes but you will do yourself a favor by buying a home the bank doesn’t want and the homeowner unfortunately can’t afford. Read over surefire tactic #3 (be ready), #2 (Location), #1 (HOLD) and #4 (if renting is your goal) once again and be sure to research and get professional advice.
Surefire tactic tip #1 - Don’t Listen to The Media! – The media isn’t always right and doesn’t always report what you need to hear. I’m not saying the media lies, I’m just stating that sometimes they paint broad strokes and don’t always consider surefire tactic #2 (Location) and the rest of the surefire tactics to make money in real estate. It’s difficult to analyze data and report on every location throughout the United States so listen to your local experts and let them tell you where and when to buy a new home. You never know, your real estate agent might actually have your best interest in mind!
Surefire tactic tip #2 – Get Off the Fence! - If you are ready to buy a new home, can find a great deal, have researched location and plan on holding – buy a home now. It defies all logic to think that demand will increase or supply will decrease by waiting to buy a new home. If no one buys a new home they won’t be sold. Do us all a favor and buy a new home if it’s right for you.
Surefire tactic tip #3 – Don’t Add to Our Current Dilemma – If you can’t afford a new home and don’t want to ask or do a little research to ensure that you buy a new home that works for you-you should rent. Rent a home or condo until you are ready to buy; when you do buy – don’t get into a loan program that will put you in a bad situation after the interest rate increases as they told you it would.
Tags: federal reserve board, Homes for Sale, interest rates, new homes, rate increases, real estate investment
03 Oct 07 The Real Solution is In the Supply
One-way to rebuild a healthy real estate market is to decrease the amount of homes available for sale. Our recent efforts have been geared towards increasing the demand to buy homes. It’s pretty obvious that several experts, and the media, aren’t going to stop highlighting every negative aspect in the real estate market, so it might be a little difficult to increase demand. It’s their job to report the news, but why can’t they report positive news as well? When you want to know about something don’t you turn to the news or a well known expert?
What if a program, or several programs, were developed that encouraged owning a rental property or keeping your home off the market? If there were a few programs, homeowners could choose which works best for their situation.
The government could give tax incentives to sellers that agreed to keep their property off the market for X-amount of years? This might entice investors or homeowners because their payoff, if they agreed to hold onto their investment, would be greater.
The government, or lenders, could offer an annuity type of loan to homeowners. The loan would slowly tack onto the principle of the home loan each month. Homeowners wouldn’t receive a large lump sum of money, but their mortgage payment would decrease by X-amount each month and would slowly increase over the years. The lender and borrower would determine how much of a loan was suitable based on the homeowner’s needs and the lenders ability. The lender could stop paying the annuity at anytime if a borrower failed to meet their payment obligations.
Lenders could offer locked or lower interest rates to homeowners that agree not to refinance or sell their homes for X-amount of years (same concept as a pre-payment penalty). They could set the homeowners up on steadily increasing payment plan giving them lower payments initially, similar to an ARM, but instead of giving these incentives to new customers, lenders will be trying to avoid costly foreclosures.
Hopefully, these programs would keep homes off the market and help regulate when homes are placed back on the market. Programs like these would interest some sellers because many of them can’t sell their homes right now; in many cases, if they do, they’ll take a loss. I think most sellers would love to hold if they could cover or minimize their negative monthly cash-flow and others will be happy with keeping more of their money from the eventual sale of their home(s). Not everyone would qualify or benefit from programs like these but it could be a nice way to decrease the supply of homes for sale and improve the health of the real estate market.
I am pretty sure that we’ll need to develop several solutions to fix some of the mistakes or oversights that helped fuel this “over” correction. I know real estate is cyclical, but feel that some decisions have lead to a rougher market. There are some possible downsides to this solution such as the probable increase in new home cancellations, possibility of homeowners defaulting on new agreements and difficulty in implementing these plans, but there definitely could be a viable solution found in focusing on our supply of homes for sale as opposed to trying to increase the demand. Many of our markets have great potential and with a little help, we could be back on track!
Just a thought…
Tags: homeowners, housing information, housing programs, interest rates, lenders, property, Real Estate, refinance, rental property, sell a home
24 Sep 07 Great Tips to Improve or Maintain Your Credit Rating
5 Tips to Keep or Improve Your Credit Score
We all dream of owning a new home in a new community for most of our lives. The increase in interest rates and decrease in available loan programs has made it more difficult to qualify for a home loan. The number of variables that determine an individual score make it impossible to say that one particular action will increase a credit score by a certain number of points. Below are some tips that will help you maintain your good credit rating, or help improve your current credit score, so that you will have more options in securing your desired Arizona real estate loan.
1. Monitor your credit report often.
Note that it is acceptable and reasonable to request and verify your own credit report. This will not affect your score, given that you order your credit report directly from the credit reporting agency or through an organization authorized to provide credit reports to consumers. Look for errors that could be affecting your score such as accounts that do not belong to you, payments reported as late that were actually paid on time, satisfied debts that are shown as outstanding, or old debts that should have been removed. (Negative account records should be deleted after seven years, with the exception of bankruptcies, which can stay for as long as 10 years). After mending errors, the fastest means to a better rating is paying down balances on credit cards.
2. Pay down high balances on credit cards.
Contrary to what many credit advisors say, paying off credit cards each month is not always the best solution to improve your credit rating. Make your credit card payments, but keep the rolling balance between 25-35% of the credit limit. Paying the balance in full may actually lower your credit score. Accounts with zero balances do not compute significantly in your total score. Any balance keeps the card active so it calculates into your credit score. Even out your credit card usage by transferring the balance from a card that is near its limit to other lower balance cards.
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Tags: Arizona Real Estate, credit cards, credit report, Credit Tips, interest rates, maintaining your credit, new homes
