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Ideas and Opinions from Donald Trump and TrumpU Faculty.
Defective Construction Materials - Easy Fixes or Nightmares Waiting to Happen?
It seems like there is always some defective construction product in the news. Years ago it was lead based paint and asbestos. Back in the mid to late 90's, it was EIFS, fire retardant plywood and Polybutylene plumbing. Now, it's defective drywall from China. What should you do? Run away like everyone else from these properties or embrace an opportunity for a possible real estate investment deal?
The answer is......it depends.
EIFS (Exterior Insulation and Finish System) is an exterior coating used extensively in the 1980's and 1990's. The product offers a smooth, stucco-like finish (though it is NOT stucco) that was very popular
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What's Up with Condos Lately?
There are many guidelines in the condominium lending world and investors need to know how these changes will affect them. Why? Well, the default rate on condominiums has increased substantially as units have faced foreclosure and associations have gone bankrupt. Now keep in mind, I'm talking about condominium OWNERSHIP here, not necessarily the structure. Condominium is a form of property ownership and a condo development can be the traditional apartment style structure, single family homes, townhomes or another variety of build-out.
The new guidelines apply to all loans sold on the secondary mortgage market and insured by Fannie Mae or Freddie Mac
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The FHA 90 Day Seasoning Rule
For many investors who rely on FHA-approved buyers to purchase their homes, the "Seasoning Rule" can be a big issue.
What is the seasoning rule? In a nutshell, with very few exceptions, FHA will not fund a mortgage for a property that has been owned for less than 90 days. This causes many investors to lose money due to holding costs, extended time on the market and/or not being able to market to FHA buyers. This rule pertains to any title transfer so if an investor transfers a property from one LLC to another, the 90 day rule goes into effect.
On September
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Trump International - Scotland
I am pleased to announce that work on site on my golf course in Aberdeenshire, Scotland, will begin this week, ahead of schedule. We plan to build the greatest golf course in the world. There are hundreds of acres of magnificent sand dunes and the seaside landscape includes three miles of spectacular oceanfront. 2000 acres in all, and the location couldn’t be better.
I spent five years reviewing sites and turned down over 200 possibilities for development throughout Europe. When I saw the links land at Menie Estate, which is in northeast Scotland’s Grampian region, I knew it was the right place. I
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Selling "As-Is" Can Mean Many Different Things....
I hear it all the time from sellers, "I'm selling my house as-is". Well, Mr. Seller, what if the buyer accepts the as-is provision, but the appraiser says the front porch handrail needs to be replaced? What if the buyer's mortgage company won't lend on the property unless there is a clear termite and moisture inspection and your home needs a rotted board replaced in order to get a clearance? Do you REALLY want to kill an entire sale over a relatively inexpensive repair?
In most cases, if you truly MUST sell strictly "as-is", your buyer pool will be limited to cash
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Before Buying Into a HOA or Condo Association...
It's best to be judicious in your research regarding any Association you may become a part of as a result of a purchase. Most people spend more time researching a stock to purchase than they do researching an Association in which they are buying a home. Don't make that mistake!
The Resale Certificate. This is usually a 2-4 page document which states whether or not the present owner is current on their dues, what the dues are, whether or not there are any planned assessments coming up, if the property being transferred conforms to the architectural guidelines of the community, etc. This
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An Essential Tool for Real Estate Investors
Have you ever purchased something that made your life so easy that you wondered how you were ever efficient without it?
That's how I feel (and my real estate investors feel) about our pocket video cameras. Offered by many manufacturers, these cameras are often called by their brand names, Flip, Vado, Webbie as well as others.
These inexpensive, easy to use tools have made us more efficient in more ways than we can list in a reasonable-length post. Here are a few examples:
As soon as we acquire a property, the contractor shoots a video to document what is there for insurance and draw
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Architectural Critics
Over the years I have dealt with many architectural critics, some of them bad, some good, some excellent. I do not rate excellence just on what they’ve said about me, but rather on their level of taste and expertise.
One of the best I’ve ever known is the late great Herbert Muschamp of The New York Times. His reviews were not only interesting, in the terms of the building, but also literarily superb.
Generally speaking I have done well with architectural critics. I have found though, somewhat sadly, the choice of the architect is usually more important than the building itself. Certain trophy architects,
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Thinking Outside the Typical Real Estate Box
In a recent conversation with an asset manager, the topic of foreclosures came up and various stories about what you find when you first acquire that property.
He told me about a recent default on a fraternity house. Yes, you heard me correctly, the bank had to foreclose on a fraternity house. He asked me, "Tina, what do we do with a 15 bedroom + 1 huge party room house that reeks of beer?"
Good question! To add a bit more detail: each bedroom had deadbolt locks, there were some creative "paintings" on the walls, the kitchen was pretty non-existent, and the
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Little Property Deal Killers: Six Easy-to-Miss Reasons to Walk Away from a Real Estate Deal
The property you’re considering looks good. The price is right. It’s just what you’ve been looking for, and you’re about to make an offer. But think twice, because you need to do a little due diligence to make sure the deal doesn’t contain any hidden pitfalls.
Here’s a list of easy-to-miss deal-killers. They represent very good reasons to walk out of a real estate deal and continue your search for other properties:
Property Deal-killer #1:
The local government makes it impossible to get work permits. The town will make you wait three months for a permit to put in a new sidewalk
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What is Fractional Real Estate Ownership?
Have you ever gone on vacation and said, "I would really like to own a place here"? Have you ever rented a large beach house with family members and/or friends? Do you prefer to take a family trip within a one day drive of your home?
If you answered "yes" to any of these questions, the concept of fractional ownership may appeal to you.
As second home buyers are looking for more affordable ways to acquire their vacation home, fractional ownership has seen an increase in exposure. Fractional ownership is, simply put, a group of friends, relatives or investors pooling their resources to
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Other Real Estate Investors....Competition or Opportunity?
A fairly new real estate investor once explained to me why he gave up trying to buy a property on the courthouse steps. He said it was a waste of his time because the group of investors who attended these auctions seemed to look out for each other and get all the good properties.
Instead of trying to join them, he shunned them. Who lost out there?
Successful real estate investors seem to be a pretty close group. They ride the hills and valleys together and often, tend to help each other out. I've known quite a few investors who made good business
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15 Websites for Real Estate Investors to Search for Properties
These sites may or may not list properties in the local multiple listing service.
Backpage.com
Craigslist.com
Kijiji.com
Iwantanoffer.com
www.hud.gov/homes/index.cfm
Militarybyowner.com
Buyandsell.com
eadsbyowner.com
Findmyroof.com
Freeadlists.com
Justrealestatelistings.com
va.reotrans.com
resales.usda.gov
www.usmarshals.gov/assets/nsl.htm
homesales.gov
Bonus site of course there is Trump University's Foreclosure Deal Source.
Related Video by Tina -10 Free Sites for Real Estate Agents to Post Property Listings
Related Training:
Learn How to Invest in Real Estate
Work with a real estate coach to find the right market
Join Trump University's Network
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Do I Need a Real Estate Survey?
When purchasing real estate, some lenders will require a survey of the property. With most investment, short-term and hard money loans however, the survey is optional (as with cash purchases).
The cost of a survey is typically fairly minimal, a couple hundred dollars. When the property is waterfront, heavily wooded, rough terrain and/or especially large, the survey can run into a few thousand dollars.
By getting a survey, you not only see your property lines, you also see any encroachments, easements, infringements or right-of-ways on the property. Encroachments and infringements can pose problems that you may want to have corrected prior to
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Should a Landlord Require Tenants to Get Renter's Insurance?
Rental managers and owners are increasingly requiring that renters carry their own liability insurance.
Approximately 2/3 of the people living in rental properties do not have renters insurance. There is a general misconception among tenants that the landlord's policy will cover them in case of lost or damaged property. The truth is, the landlord is not responsible for covering any of the tenant's personal property, unless the loss or damage is due to the negligence of the landlord.
So, how does requiring renter's insurance help a landlord? It is a way to minimize their own liability and insurance costs. It also protects the
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Zero-Cost Ways to Get a Piece of the Real Estate Action
Are you eager to get a start in real estate, but short on cash? Don't give up. These strategies can get you started with minimal investment:
Barter your professional services. You could be a contractor, landscaper, accountant, attorney--whatever. Offer your services in exchange for a percentage of the sale.
Collect a finder's fee if you can find investment properties for a developer. One great strategy is to run a newspaper ad in another state that says, "Attention Developers! Distressed properties available in [your state]. Call XXX-XXXX now." Being a remote agent for developers is a good way to generate interest--and commissions. Where will
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In Real Estate Investing, It Pays to Work the Numbers
Lets’ face facts. Only a small percentage of real estate ventures generate as much profit as the investors were hoping for. And many investments actually lose money.
When ventures lose money, the problem is usually that the investors failed to work the numbers carefully. And working the numbers is not all that difficult. Let’s take a closer look.
First, consider this investment that lost money:
An investor named Joan bought a pre-foreclosure property for $180,000 from a seller who said, “Houses like this in this neighborhood should sell for $300,000.” So Joan spent another $50,000 on renovations, then discovered she could sell the house
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So, You Want to Buy a HUD Home...
What is a HUD home?
HUD stands for the Department of Housing and Urban Development. HUD is the insurer for the FHA loan program. When a FHA borrower defaults, the home becomes a "HUD" home, which you can buy. HUD homes are residential properties with 1-4 units.
How do I get a list of HUD homes for sale in my area?
Go to this site: http://www.hud.gov/homes/index.cfm and click on your state to find the homes available in your area. This is the MOST accurate place to find HUD homes. It is not necessary to pay or subscribe to a service for this information.
Who can
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Real Estate Development - Leverage Your Way to Success: Develop a Property Your Family Already Owns
If you want to get started in real estate development without spending a cent, why not develop a property that your family already owns? It could be a house belonging to an aging relative who is about to go into assisted living, a cabin that you and your siblings inherited but never use - or a vacation condo that your uncle owns, but hasn’t visited in years.
Many families end up owning more unused properties than used cars. If you can pinpoint some, your next step is to structure a real estate development deal that works for you and all relatives who
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How to Write Real Estate Ads that Sell Properties - Fast!
First, how not to write real estate ads.
Take a moment to think about this real estate ad that appeared in a suburban newspaper recently:
A babbling brook runs through the back yard of this spotless cape with new furnace and cabinets. Asking $350,000. Sellers anxious. Call 888-8888 today.
I don’t know how that ad strikes you - it describes a brook, a furnace and the agitated psychological state of the current owners. But I think that you will agree that it does very little to get the house sold, for one very simple reason: It fails to address the desires and needs of
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These Overlooked Real Estate Investments Are Great Choices Today
A smart older real estate investor once told me, “In lean markets, buy raw land and hang onto it. Land can’t burn down. Nobody can steal it. If you’re patient, its value always increases. And you don’t even have to insure it.”
That’s wise advice. Yet undeveloped land isn’t the only smart real estate investment for lean times. Here are some other investing options that can generate self-sustaining income while they increase in value.
Buy rural or suburban land where you can build and operate a self-storage facility until the market strengthens. Self-storage facilities are great “placeholder” businesses that generate income from land
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Real Estate Investing: Creative Ways of Selling a Home to a Buyer
Many in residential real estate investing found that in a buyer's market, the buyer's have a buffet to choose from and the sellers are always looking for new and innovative ways to stand out as the better choice in the line.
Sometimes, offering creative ways of financing can open the property up to a new consumer or offer attractive financing terms the competition may not be offering. Below are a few examples of these creative financing terms.
Rent with the Option to Buy. Commonly known as a Rent-Option, this type of financing usually has the buyer sign a lease to rent the property,
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Interview with A Real Estate Investor
Yesterday, I had the wonderful opportunity to sit down and chat with Mike Veraldi, who has been in residential real estate investing full time since 2003.
In his past life, Mike was an airline pilot for a large carrier. With cutbacks and furloughs becoming an almost daily occurrence in the airline industry, Mike decided to take a 6 month leave of absence to start investing in real estate and has never looked back.
What made you decide to try real estate investing?
"A friend of mine recommended it to me. I took some training classes and spent about $3900 learning the business. Then, I
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Real Estate Investing Market Update - New York and New Jersey
This week we are running real estate investing events in the following locations:
New York/ New Jersey
Jun 1, 2009 - Jun 4, 2009
Learn More and Register Here »
The following is our market analysis for the NY/NJ area:
Many students may have thought that residential or investment properties in the New York/ New Jersey area were out-of-reach, or that there were fewer opportunities due to prices usually above the national average. But today’s market provides the savvy buyer in the area with more opportunities for profit than ever - and even bigger profits are on the horizon for those ready to invest. This week’s
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Real Estate Investing Market Update - Tampa Bay & Sarasota
As our real estate team travels the country teaching people how to invest in real estate we compile market updates to help our members understand the changing market.
This week we are holding free real estate trainings in the following South Florida areas:
Tampa, FL/ St. Petersburg, FL/ Sarasota, FL
May 26, 2009 - May 28, 2009
Learn More and Register Here »
Florida is home to a large proportion of America’s foreclosed real estate, and foreclosures are continuing to rise, with many banks desperate to sell off property and recover their assets - which means opportunity for real estate investors. Recent news shows that:
Real estate
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Real Estate Investing Market Update - Austin, TX edition
This week we are holding free real estate trainings in the Austin, TX area. To keep our members updated on the changing market conditions across the country and in the local market we put together the following market update:
Austin, TX
May 19, 2009 - May 20, 2009
Learn More and Register Here »
According to some, Austin’s real estate market has worsened over the past two or three months. Inventory has risen, prices have fallen, foreclosures increased. But buyers are still out there, there are signs that they’re waiting for deals, and prices area-wide may be nearing the lowest point we can expect. This
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Real Estate Investing Market Update - South Florida edition
As our real estate team travels the country teaching people how to investing in real estate we compile market updates to help our members understand the changing market.
This week we are holding free real estate trainings in the following South Florida areas:
Ft Lauderdale, FL
May 18, 2009 - May 21, 2009
Learn More and Register Here »
Miami, FL
May 18, 2009 - May 21, 2009
Learn More and Register Here »
Market Analysis:
Florida is home to a large proportion of America’s foreclosed real estate, and foreclosures are continuing to rise, with many banks desperate to sell off property and recover their assets - which means opportunity
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Residential Real Estate Investing: The Smart Way, Part 2
In the first part of this series, we talked about some of the basic issues in residential real estate investing. In this part of the series, we are going to look at finding and tracking residential real estate for investment.
You have your source of funding lined up. You have selected a real estate agent. Now you have to find a property to purchase.
1. The MLS (multiple listing service) is not the only source for finding properties. In fact, since it is the most popular source, it can be a better idea to look outside the MLS to find properties others may
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Smart Residential Real Estate Investing, Part 1
This is Part 1 of a 3 part series on getting a great deal with good returns on residential real estate investing in this economy. Keep in mind that real estate is local and these tips may not apply perfectly to your current market.
1. How are you going to pay for it? Traditional financing can be difficult to obtain for residential investment properties right now unless you have a substantial down payment and stellar credit. Home equity loans on primary residences can also be a challenge to get in this economy. Consider sitting down with a reputable, local banker, discussing your needs
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You Asked for a Powerful New Way to Find Foreclosures . . . And Here it Is!
“I hate the feeling that foreclosure opportunities are slipping through my fingers daily,” a young real estate investor named Joanne told me lately. “A few years ago, I knew just where to go to locate promising foreclosed and pre-foreclosed properties. But with the current explosion in foreclosures, where am I supposed to look?”
Joanne is not the only frustrated investor today. We have been hearing comments just like hers more and more often over the last few months. That is why we developed a new product that cuts through the avalanche of information out there and allows investors to quickly locate properties
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Making the Right Call
I was on Neal Cavuto’s show yesterday and we were discussing economic conditions and Atlantic City. I stepped down as chairman of the Trump Entertainment Resorts after my offer to buy the company was turned down by the bondholders. I was hoping that I might be able to reverse its fortunes.
My holdings there represent substantially less than 1% of my net worth, and I am not involved in management. It has been tough going for awhile and brings to light the timing that is necessary in business to make the right decisions at the right time. These are very tough times
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The 3 D's of Real Estate
The real estate market is such these days that one thing has become apparent: If someone is selling in this market it’s usually because of the 3 D’s:
Death,
Divorce
Debt
When the value of property is low, it is common sense not to sell it. You hold onto it until the realty market changes. Therefore it’s common sense to notice that those who are selling are encountering one of the 3 D’s just mentioned. Otherwise, their actions would be nonsensical.
It doesn’t take a sixth sense to figure out what is going on. Maybe it’s clearer to me because I’m experienced in real estate and
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Mr. Trump on CBS Evening News Tonight
CBS Evening News with Katie Couric is producing a special primetime broadcast that will air tonight at 8 p.m. EST (Channel 2 in NY). It is the first time CBS Evening News has ever been broadcast in primetime.
The show will feature a story examining possible solutions to stabilize the commercial and residential real estate markets. CBS is interviewing Mr. Trump to get his views on what he believes the US Government and private industry can do to stabilize real estate prices and provide a foundation for economic recovery. This interview should be at the top of the show.
Stay tuned tonight...
Updated 1/29/09
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A Proposal to Solve the Subprime Mortgage Crisis & Real Estate Glut
I consider myself a creative thinker and in-touch with the problems facing the housing markets and lending markets around the country. The surplus real estate inventory with fewer people who can qualify is only going to get worse before it gets better, I am afraid. I say this because with all the financial bailouts going on, lawmakers really aren’t focused on getting the vacant houses filled as much as they are about playing the blame game with the mortgage industry.
Let’s keep that in the peripheral but look at what reforms can be made to get homes bought and sold and
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What's a Loan Modification?
About every 10th spam email I receive these days is talking about services offering something called a “loan modification”. Since many people have no idea what that is, let me define it and then offer up tips on how it works in the real world.
First of all, a loan modification as defined by the US Department of HUD website is “a permanent change in one or more of the terms of a mortgagor's loan, allows the loan to be reinstated, and results in a payment the mortgagor can afford.” The loan modification process is a direct result of banks trying to stay
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Bad Press - Bad Influence
As I go about my day, I find myself hearing the gloom-and-doom media using scare tactics when it comes to addressing the real estate market. The truth is the media is not just in the business of reporting, they are in the business of selling ad time to advertisers. It’s no surprise that the worse the news, the more our sick little minds want to know about it. It’s how we’re wired and THEY know it.
Let’s start with a positive...I am positive that there is no such thing as “a” real estate market bust or even “a” mortgage crisis”. It’s true
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Real Estate Investors Seek New Options
While lenders are fairly well settled into what they will require for a buyer to qualify for a loan in this new credit economy, many real estate investors find themselves disenfranchised from the process because they are no longer eligible.
It’s true. Whether it be for credit, income or a significant enough down payment, only a fraction of those who would have been eligible just 12 months ago, can still make it happen. So for every action, comes a reaction. The market has gotten creative and I am seeing a resurgence of unique ways people can still buy and sell real estate.
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Real Estate 101: Why Banks Short Sell Pre-Foreclosure
Last month I was coaching about a hundred or so seasoned real estate agents on how to buy and sell pre-foreclosures. It occurred to me that for most, it was a mystery that the best deals are found before the bank forecloses rather than after. The reason this happens is that not only in today’s market but in any market, the bank generally doesn’t want to own the real estate secured by their loans. They will often take less than what is owed and this is called a short-sale.
Most real estate professionals are unclear as to how a short-sale works
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Scotland: You're Hired!
This story started over five years ago, and as of this week, it has a happy ending. I had spent five years reviewing sites throughout Europe, and turned down over 200 possibilities for development. Then I saw the links land at Menie Estate, which is in northeast Scotland’s Grampian Region. I had never seen such a dramatic unspoiled seaside landscape--it had three miles of spectacular oceanfront and sand dunes of immense proportions. To put it mildly, I was excited. I knew this was the right place for my golf course, and I had two additional reasons for that: My mother was
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Contract Assignments - Friend or Foe?
Our current housing markets as a whole being sluggish have brought out a tremendous influx of investors wanting to take advantage. The competition is fierce for those trying to find properties at bargain basement prices so investors have to be creative in locating them. One way that is seeming to be catching on is through contract assignment.
A contract assignment occurs when an Assignor (middle-man) finds a property and secures it with a contract. He or she then finds a buyer for this property and assigns said contract to them at a higher price than what he negotiated but usually still at
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A Case For Tenacity
Jones Beach on Long Island has been an important part of many New Yorker’s lives since childhood, including mine. When my venture, to be called Trump on the Ocean, was announced in the spring of 2007, it was met with opposition as well as support. Some people saw it as historic preservation, other people saw it as a blight on the landscape. Whenever I do anything, the scrutiny can border on the ridiculous, but I refuse to give up.
Just last Friday it was announced that I’d won a big victory, and here’s the press release:
DONALD TRUMP WINS HUGE VICTORY AGAINST NEW
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Real Estate Is Not Dead: Invest Now While the Market's Reeling
While the press has made the economic downturn and the credit-default swap debacle a top story, don’t let it stop you from living your life and making your dreams come true. Bad news sells better than good news and I am not here to sell anything.
Listen up to what I am about to say...the real estate market is not dead. That being said, there has been a major correction to many of our nations markets but that is just the way that cycles work. The question becomes: Do you want to take advantage of the buying opportunities or sit on the
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Credit-Default Swaps: Understanding the Debacle
Before last month, you probably had to be in the trenches of the financial sector to have known anything about credit-default swaps. That’s why it comes as a huge surprise to find out that there’s been a 55 trillion dollar dirty, little secret on Wall Street. It’s almost unfathomable that these types of hedging practices could have brought down some of the largest and oldest financial institutions in our nation’s history... and most of us didn’t even know they existed.
A CDS contract involves the transfer of the credit risk of municipal bonds, mortgage backed securities, or other corporate debt between
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Real Estate Exchange Agreements: Heard of the REX?
The REX Agreement (or Real Estate Exchange Agreement) is a way for a homeowner to “tap” into their existing home’s equity without incurring any monthly payments or interest charges. A home owner can do this by agreeing to share a portion of the home’s increase or decrease in value over a period of time.
It acts as a leveraging tool: A homeowner who has equity in their home can get an “advance” of a portion of that equity with no out of pocket charges and no new debt service. The home owner gets a few options as to how much they wish to share
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Mortgage Fraud - It Affects All of Us
In the lending business, we are all about rules, regulations and guidelines. We are dealt a set of guiding principles and are expected to work within their framework. The mortgage industry depends on ethical people with honest core values to make loans for the American people and the rate at which people in this industry are breeching this fiduciary duty is growing at an alarming rate. There are a myriad of excuses which can be given for this lack of self-control but the bottom line is that there is NO EXCUSE for it.
The FBI investigated over 1200 cases in 2007 of
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Incorporate: The Life You Save Could Be Your Own!
Real estate investors often ask me how they should structure their business. They ask, “Should I be a sole-proprietor, LLC (Limited-Liability-Company), or an S-Corporation?” The answer is “Yes!” In my opinion, there is a time and place for each of these types of organization but I favor the LLC.
In the beginning and certainly if you just own a couple of homes as rentals, the sole proprietor approach should be sufficient. It is an inexpensive way to organize but offers you no protection to the exposure of liabilities. No need to fear! You can insure against this risk with the proper insurance policy which will offer you around
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Real Estate Investing Is Like a New Business
As an investor, it’s easy to get blinded by the fancy window dressing that a particular agent or seller is putting on when presenting a property. I want to encourage you to evaluate each property on a standalone basis much like you would if you were buying a business...because you ARE. Whether you own one property or one hundred, the recipe for its success is virtually the same. You will need to create a business plan complete with earnings/expense pro-formas while projecting rates of return and contingencies for cost overruns.
There are many different ways to approach this plan and Trump U offers courses and
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Accidental Landlord-How Does It Happen?
Statistics show that at least one landlord in five are now doing so out of necessity rather than by planned and conscious choice. These people did not purchase their properties with the intent to lease them out...it just sort of happened.
For instance, my friend Dave and wife, Delores in Dallas had a home built in the suburbs by a new home builder about two years ago and moved in. They added all the fancy upgrades such as a media room, hardwood floors, etc. The home turned out beautifully and almost simultaneously, Delores sought and attained a great job in the Houston area at the
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The Opportunity is High in Rental Properties Right Now
Think about this... around the country, there are many areas that are experiencing a pricing downturn in home prices. Simultaneously, home loan requirements are on the rise making it more difficult for homebuyers to qualify. Add that to the millions of foreclosures causing families to be displaced looking for more affordable housing. Where are those families going? The answer is simple. They are moving into rental properties that are more in line with what they can now afford to pay.
This of course spells opportunity for the buy and hold for those interested in real estate investing looking for long term rental income. Are you hedged in enough positions
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The Rewards of Real Estate Mentoring
My last blog about real estate mentoring was aimed at challenging readers to reach out and mentor others. Part two is all about reaching up the ladder and seeking mentoring from others who can provide valuable information to help you grow both personally and professionally. Just like in religion, we seek mentoring from our pastors, preachers, rabbis etc. What I am suggesting is to find a real estate mentor of integrity, who has been there, done that, and get them to help you learn what to do and not to do in order to achieve your ultimate goals. You don’t have to “re-invent the
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New Act Aimed at the Housing Market Bubble
H.R. 3221, the American Housing Rescue and Foreclosure Prevention Act of 2008, soon to be passed and is supposed to help the US housing market survive the current cycle. One piece of this legislation that I am greatly concerned with is the FHA Modernization provision. More specifically, how it creates a larger barrier to home ownership and real estate investing for borrowers by increasing the required down payment from 3% to 3.5%, raising the interest rates for acceptable borrowers with less than perfect credit thru risked-based add-ons, and ELIMINATING seller-funded, down payment assistance programs.
Many of you don’t know that FHA just increased their
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Quick Ways to Change the Appearance of Property
I tell my clients that there are 2 things that we can’t cost effectively change to make their property more desirable when trying to sell an investment property...location & floor plan. Everything else is fixable.
If you bought a property in an undesirable location and are trying to sell you had better make everything else unique and perfect. Take some time and give it a quick home makeover. Find out about the demographic of the type of people most likely to buy in the area and then cater to them when staging the property. For instance, if it’s near a “trendy” area, make sure you get modern
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Learn, Share and Succeed with Real Estate Mentoring
We all have special qualities and skills that are too valuable to be kept to ourselves. I feel compelled in my life to mentor others in those areas as a form of community service. I have been blessed with an incredible family, a level head on my shoulders and a wide variety of life experiences which have shaped the person that I have become. In the past, I have mentored disadvantaged kids and currently am serving on the Board of a sizable children’s shelter and counseling center in my local area. I am passionate about seeing to it that children, whose voice is often
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The Surefire Way to Minimize Cost While Selling Your Property
It’s no secret that MLS is the most popular residential real estate database in the country. It’s proprietary and the only ones that have full access to add, edit, and manipulate the data are licensed real estate professionals. Here’s the secret...these days there are many other databases buyers can use to search and find homes without having to wait on their Realtor® to discover them. This spells opportunity for the smart independent real estate investor.
While using a skilled Realtor will most often net you more money than if you chose to go it alone, there is something to be said about “super-charging” your
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Benefit From Inflation!
I know you are all relieved to know that Fed Reserve Chairman Bernanke is now going to set his sights on curbing inflation (sarcasm). However, in the unlikely event his efforts are not effective, here is an idea I think is worthy of noting. Have you ever heard of “if you can’t beat ‘em, join ‘em”? I am talking about a way to be in a position to help you offset or even benefit from the inflation we are beginning to experience.
My solution is investing in real estate. It’s what the millionaires and billionaires are doing. They are taking full advantage of the soft real estate
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There May Be Too Many Fingers in The Pie...
Today I am wanting to discuss the topic of too much real estate finance competition in the lending industry causing consumers to have paralysis of analysis. We are inundated with advertisers trying to get us to use their financing. Everyone from our insurance agent, realty agent, bank teller, home builder, accountant, lawyer, financial planner, tax preparer, accounting software company, newspaper and magazine subscription and web search engines are trying to sell us a mortgage. I apologize to any bartender or golf pro who I may have omitted from my list.
The fact remains that with so many of our current trusted advisors and vendors soliciting
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Builders and Their Business Arrangements...
Have you ever walked into a builder’s model home and after some small talk with a sales representative and a preview of some of the floor plans, been told about the thousands you can save by going thru the “preferred lender” and “preferred title company” when you are looking to buy an investment property? My guess is that if you have visited a builder, then your answer is “YES”.
The program typically works like this... The builder is offering $5,000-$10k in free upgrades if you use “ABC Lending” and will only pay for your title policy if you use “XYZ Title Company”. They know
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Energy & Tax Extenders Act of 2008
HR Bill 6049 could be another great incentive to get into investing in real estate! While “the bill” as proposed, takes a multi-pronged approach to help stimulate a variety of industry sectors, today I want to address how the bill particularly could impact both the residential and commercial real estate markets.
One of the most exciting line items in the bill allows for investors to get a bit of instant gratification for improvements made to their properties being leased. Traditionally, capital improvements have had to be straight-line depreciated over a 15 year period. In the proposed bill, a investor can take an investment property write
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Does Size Matter To You?
Another golf analogy...
I have a few buddies on the national long-drive circuit and recently went to watch an event when they came to town. As a golfer, I can’t help but be amazed at how unbelievably far these guys can hit it. They are extremely strong and surprisingly flexible. While I can’t compete with them in this arena, I can usually beat them in the root derivative of this game called golf. It seems that there is more to golf than just beating the ball as far as possible and hoping one stays on the course.
The same can be said for every business along with
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"US Open-Like" Economy
I am a huge golf fan and enthusiast. I play to a 5 handicap and DVR most of the PGA tournaments to watch in my down time. Since this week is US Open week and which in my opinion, the biggest tournament stage in the world. I thought about how the US Open relates to business in our current economy and here is what I have come up with.
The US Open is a tournament which anyone with a 1 handicap or better can register to play in qualifier tournaments being held around the country. In other words, it’s OPEN to amateurs and pro’s alike and
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Solar Energy - Is it Worth the Expense?
I am trying to learn how to be more energy efficient these days and along with hybrid cars being all the rage and solar panels being used as a renewable energy source for residential and commercial investment properties should be evaluated.
The best I can tell, there would be about a $25,000 cost to install 100 sq ft. of solar panels on my southerly facing rooftop. If I consider that the system has an economic life of at least 25 years, then the math is pretty simple. It will cost me about $1000/ year to own the solar panel system. I can expect a 40-60%
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Think Green and Make Green
I am always trying to think outside “the box” in an effort to distinguish myself and services from everyone else’s in this 2 million-horse town. It requires some serious disposable time in order to be able to accomplish this and with three kids under the age of six and it is not something I have a lot of. An area I think we should all be focusing on is how we can have progress in both our personal and professional lives while being mindful of the environment. It sounds cliché, but since going “green” is the “IN” thing, there has never been more financial
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Learn from Microsoft's Mistakes
A rather hot topic these days aside from the economy is the new operating system being force-fed consumers by computer software giant, Microsoft. I was recently tasked with the assignment of purchasing a new laptop after having dropped mine and damaging the power supply. These days, it costs about the same to repair a laptop as it does to buy a new one ($400 plus shipping).
So, I get my new machine back to the office and discover the new Vista program had been installed. I was willing to give it a go and began installing my peripherals and software one by one. I tried and
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Are There "No Cost" Loans?
I have been in the lending business for 17 years now and am truly amazed at either how well the lending community has disguised the real estate finance process or how many consumers don’t care learn what they need to know before proceeding with borrowing money. It may be a combination of both, though, and lenders are counting on these uninformed or under-informed consumers to get their phones to ring.
On one hand, many finance companies are attracting business thru bait and switch tactics and I am fed up with it. They run “adv-enticements” for “No closing cost” mortgage loans and/or artificially low rates
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Be Your Own Real Estate Tycoon
Ok...so you are not Donald Trump but you have aspirations of joining the ranks of the wealthiest in the business. This business is tough and there are a lot of cut-throat competitors so you will need to equip yourselves with a few tools in order to survive.
First things first. It’s important to have the necessary real estate finance available so that you are positioned to move on a transaction when the opportunity presents itself. Even “The Donald” leverages himself with borrowed monies or equity partners. It spreads out the risk and allows you to increase the scale of your investment capabilities.
Next it will be
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Stage Your Properties
Whether your real estate investment is for sale or for lease, one sure way to get the highest return is to “stage” it properly. Doing this will paint the picture and imagery you want for your target audience and make them want the feel you have created.
Identifying your target audience is key. What demographic are you trying to reach? Are they “yuppie urbanites” looking at a condo or condo project in the city? If so, you will probably want to go with a modern and trendy look to stage the property. Use some contemporary furnishings and focus on the art and accent groupings. Be creative and also
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Live in Your Investment
I am constantly trying to help my clients come up with creative ways to buy and sell real estate. When I get the type of client that I think would be interested, we talk about how a great way to get into real estate investing is to buy an income producing property that you can utilize for yourself, too!
Whether you want to buy a residential or commercial property, you can get more favorable bank terms by “owner-occupying”. The actuarial tables for projected default to the banks show that if you own property and are occupying it for your use, you are less likely
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Afraid to Buy
It’s hardly a surprise but in the midst of today’s terrible economy and the nation’s housing crisis, the majority of Americans say they don’t plan to buy a home anytime soon.
In fact, more than a quarter of homeowners worry that their home will lose value over the next couple of years, and one in seven mortgage holders are afraid that they won’t be able to make their monthly payments in time over the next six months.
People are worried that housing prices will continue to fall which is good news if you want to buy but obviously terrible if you have a
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5 Tips to negotiate the highest return in selling real estate
You make your money in real estate when you purchase it. In other words, it’s extremely important that you shrewdly negotiate to win when you buy to give yourself the highest return on real estate when you sell. To do this, follow my 5 simple negotiating tips and you should succeed.
Don’t fall in love - Treat your purchase as a business and check your emotions at the door. Use your head rather than your heart because this will keep you from buying at any cost. If the deal makes financial sense.
Don’t just low ball...validate - When submitting an offer which is below what the seller
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2, 4, 6, 8 Don't Forget to Depreciate!
Today I want to make investors aware of a well known tax break offered up by the IRS that allows them to depreciate their properties as they would any other fixed asset as a business owner. While it’s not a new concept, not all investors are aware of this and with the influx of new investors into the market, it’s important to bring this into light.
The government, in its attempt at fair taxation, realizes that just like any other piece of capital equipment used in a business, a piece of investment property will wear out over time. They currently allow you to depreciate
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Should you hire a property manager?
As an owner of an investment property, the question arises as to whether or not you should hire a property manager to help you. It’s an important decision and the answer can vary on a case-by-case basis for several reasons.
I recommend that most “first-timers” go ahead and enlist the help of a property manager in the beginning so they can get a feel of what to expect from the monthly processes that encompass the task. You can learn a lot of ways to efficiently handle the marketing, leasing, billing & collections, repairs and most importantly of all, what rights you have in your
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Challenged Credit is Good News for Investors
One thing that has come from the economic downturn of late is the need for viable housing options for those consumers with damaged credit and who may have recently lost their homes to foreclosure. In my market area, I see plenty of this and have been unfortunately declining many loan applications due to credit and lack of available loan programs for these types of customers.
As a real estate investor, I think this is a wonderful recipe for success. Where are all of the people going to live who were formerly candidates to buy and now are forced to continue to lease for another
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Tax Freedom Day April 23rd for most
I recently read a “special report” published by the Tax Association boastfully declaring April 23rd as the official date that most will have earned enough income to pay their share of all necessary federal, state and local taxes. The study shows that due to the expected impacts of the economic stimulus package, this date has been moved up by three days after having moved later each of the last four years. Well isn’t that profound?
Who would have thought that the government returning billions of dollars to its rightful owners would shorten the number of days that tax-payers would need to work to contribute? While
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The Real Estate Market is Perfect for 1st Time Homebuyer
I consider myself an extreme advocate for the first time homebuyer. After all in my businesses, they are the ones who need the most representation. While a nice chunk of my business comes from repeat customers and high-end clients, I always take the time to help out the first-timer because I have an affinity for educating consumers. When I get the phone call, it usually goes like this....”I know you usually work with much bigger deals than mine, but I heard you could help me or at least refer me to someone who works with first time buyers.”
My response to this is “I really
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Don't Let Bad Press Scare You Away From Buying Real Estate!
Ever notice how when you turn on the news, you usually get the bad news first. They first have to tell you all about the murders, burglaries and tornadoes. Then, if there is time, they will throw in a “feel good” story at the end to try to leave you with a positive taste in your mouth.
The same can be said about how the media is portraying the current real estate investing markets across the country. You can’t turn on a television or pick up a newspaper without being inundated with the reports about how terrible the market is. I believe this is occurring because
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Real Estate Marketing Ideas During An Economic Downturn
So you are one of the millions of people in America who has real estate for sale and you haven’t yet found an agent with any fresh ideas to help get your property sold. Keep looking because there is more to selling a home than posting the home on the local real estate association’s website and sticking a sign in the yard. You have to be different...STAND OUT in the crowd given just about every economist is skating around saying we are already in a recession.
Sure, there are more databases you can list with, expensive ads you can run and commission bonuses you
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Important Tips To Keep In Mind Prior To Investing In Real Estate (Part 2)
A week or so ago, I wrote about the 7 common “delusions” that most new real estate investors have when investing in real estate. The first one was about how they want me to find them properties that are 30-40% below market value and then they will “buy and flip” them. Today’s topic will focus on the second most common one...
Delusion #2 “Rates are low and I should be able to get a loan with no problems.”
This may not necessarily be the case. Our lenders in today’s market are much more conservative than they were even just last week! They have “written down” tons of
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Surefire Ways to Increase Real Estate Market Value
I recently wrote about what improvements can mean to your home in terms of return on investment. The National Association of Realtors publishes an annual report detailing a range of updates one can do to their home and what percentage of increase in value to the home might occur upon sale. What I want to identify are a couple of areas to key on when deciding on what do to improve your home’s worth and get maximum return on your real estate investments by maximizing market value.
I can’t stress enough the importance of a good first impression. Just like with people, you only get
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Gas Prices and Real Estate
Is there a correlation? I say yes! As the price for a gallon of gas blows by the $3 mark and according to experts could “bee-line” towards $4, I would say that this is further bad news for suburbanites living more than 30 minutes from the business epicenters of major cities. People’s fears about the long commutes to work and the fuel costs associated with long drives twice per day, will one day soon change their minds about where they should live.
It’s my belief that they will start choosing to live much closer “in” to those cities to avoid some of the rising
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Time is now for Real Estate Investors
We have in our country an interesting dynamic going on as it pertains to the real estate investing market. Due to the generically sluggish sales of both new and pre-owned homes, and an apparent historical glut of foreclosures we are looking at a tremendous buying opportunity in much of America. Add to that the normal cycle of “non-distressed” homes for sale by move-up or move-down sellers, and even the shrewdest of investors should be salivating.
I have just mentioned about the supply of inventory being bountiful, now let’s talk about the demand for these properties. The percentage of people who can now qualify for a
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Should I Update Before Trying to Sell?
When deciding to sell a home in today’s market, investors and homeowners alike often ask me to tell them what they should do about updating their home and what will give them the most “return on investment”. According to the National Association of Realtors’ “Cost vs. Value” Report, the average returns for most updates/ remodels yields between 65%-95% nationwide. The trouble with using these figures is that in any given area of the country, there could be more or less demand for the type of updates needed. DO refer to the Cost vs. Value Report to see the average demand for particular types of
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Important Real Estate Investing Tips To Keep In Mind Prior to Buying a Property
Daily I receive calls from prospective clients who are 1st time real estate home investors looking to capitalize on a slumping real estate market. And, for the most part, they always have the same 7 delusions about how to go about making money in the real estate game. It’s like they all were lying awake watching the same infomercial at 2 o’clock in the morning on their couches. I will discuss these “delusions” separately over the coming weeks individually as each one deserves it’s own detailed response. The end result will be to show each reader what to look for and how to
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Homeowners in denial
It’s obviously a really tough time right now for homeowners who are trying to sell. The housing market is in a bad place, and all over the nation home values are showing incredible declines.
But don’t tell that to homeowners. According to a recent survey, more than three out of four homeowners still believe their own home has not lost value in the past year. More than one-third believe their home has actually increased in value.
Many industry analysts estimate that home values declined 5% on average last year, with many parts of the country showing much steeper drops.
So are homeowners not paying
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Buying Unsold Homes: There's No One Strategy that Applies
News has been coming in from around the country that documents - without a doubt - that American builders have built far more homes than they can possibly sell in the coming months. That’s good news for would-be real estate investors who want to buy houses at rock-bottom prices and wait for the market to turn around.
The problem is, there is no “one-size-fits-all” strategy that can be used across the country. When you dig down past the national trends, you realize that the housing glut plays out quite differently in different parts of our country.
In Oregon, at least one developer is offering
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A look at foreign real estate investment in the U.S.
We’ve all heard enough about the troubled real estate investment markets in many parts of the United States and how sub-prime lending is being offered up as the sacrificial lamb to foot the blame. I want to focus on an interesting dynamic this has created for foreign investors and what we can learn from them.
As times are tight here in the U.S. and our dollar’s value is near it’s all time low, many foreign investors and investment companies are seeking opportunities to pick up some bargains in real estate. They are flush with cash and are finding no shortage of deals to be
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How to Turn Problems into Opportunities in Today's Real Estate Market
RealEstateJournal.com, the Wall Street Journal’s online report on real estate, is worth bookmarking and visiting often. The moderator is Lew Sichelman, an encouraging real estate expert whose advice to readers is consistently wise.
Just this week, Mr. Sichelman responded to a question from a woman who was paying off a mortgage amount that far exceeded the value of her house. She had been trying to get her bank to lower her loan amount and reduce her monthly payments, but they were stonewalling. Meanwhile, she was having a tough time keeping up with her monthly payments. Mr. Sichelman urged her to keep trying to
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Inside Information on Buying Foreclosures Like a Pro
“Buying Foreclosed Homes without Going the Auction Route,” a recent article by Kelly Evans and Sara Murray in the Wall Street Journal, is an important one to read if you are thinking about investing in foreclosed properties.
Here’s what I took away from the article:
Auctions are not the best place to snag bargains today. Aggressive, experienced buyers frequent them, making competition fierce for any properties that represent good value. Another problem? Some properties are so over-mortgaged that banks are trying to sell them for more money than they are really worth.
Those factors, however, can make it a good time to look for
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Real Estate: What to Do Until the Rebound Begins
This week’s RealtyTrac report about U.S. foreclosures is a real eye-opener. You can read the full text by clicking here, but here are some highlights:
The foreclosure rate in America’s top 100 metro areas has hit 1.38 percent.
Detroit registered the highest foreclosure rate of any of the 100 largest metro areas, with nearly 5 percent of all homes going into foreclosure.
1.775 million foreclosures were filed in the last year - a one-year increase of 78.2 percent.
California, Ohio and Florida are the hardest hit.
For smart investors, it remains a very advantageous time to acquire foreclosed and pre-foreclosed properties at very attractive prices. Plus,
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Foreclosures Become a Campaign Issue
In the last day, articles in the Wall Street Journal and The Virginian Pilot report that political candidates are beginning to use the current foreclosure crisis as a campaign issue. The Virginian Pilot article reports that Hillary Clinton, while campaigning in Virginia, proposed a 90-day moratorium on new foreclosures. The moratorium, she states, would allow homeowners a chance to find ways to keep their homes. And the Wall Street Journal article reports that foreclosures have become an issue in a Maryland election between two candidates who are running for the U.S. House of Representatives - one, an incumbent.
Of course, many homeowners
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Great Mortgage News: Falling Interest Rates! Lenders Begging for Business!
If you have been reading the financial headlines, you could reasonably think that nearly all lenders are going broke, nearly all mortgages are in default, and that no homebuyer or real estate investor stands a chance of getting a new loan or refinancing an existing mortgage.
Unfortunately - and as is often the case - journalists have distorted this story. True, some investment banks and some primary lenders have suffered larger-than-expected losses on their subprime/underqualified borrower loans and the corresponding mortgage-backed securities. However, for the great majority of credible homebuyers and investors, the mortgage market is improving - not falling apart.
Here's the Real Story
First, contrary to the dominant news stories, it's a promising time
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Can You Sue Your Agent if You Paid Too Much?
A front-page article in today's New York Times reports that a home buyer in California has filed a suit in North County Superior Court, claiming damages because she paid too much for her house. The buyer claims that the broker, in an effort to protect a commission, concealed the fact that comparable homes in the area were selling for less than the price that the buyer had agreed to pay.
It is a bombshell, and a case that is worth watching. Frankly, I doubt that the court will award damages to the buyer. After all, isn't it the buyer's responsibility to do a market comparison and be
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With Interest Rates in Free Fall, What Strategies Do You Apply?
An article by Floyd Norris and Peter S. Goodman in yesterday’s New York Times paints a grim picture of real estate trends in the U.S. Here's some food for thought:
New home construction has fallen by 40 percent since in 2006.
New home sales have plummeted even faster.
The large inventory of unsold homes could depress home prices another 15 or 20 percent before the turnaround comes.
And to make it all more troubling, the authors of the article wonder out loud whether lowering interest rates again will do anything can to strengthen the economy in the short term.
We’ll be offering focused advice for real estate
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Real Estate: Cast Your Knowledge Net Wider
We don't suffer from false modesty at Trump University. Our courses and live events provide the best real estate training available anywhere.
But when we find a good source of information elsewhere, we feel duty-bound to let you know about it. So be sure to check out a useful blog roll online, The Top 50 Real Estate Marketing Bloggers, compiled by International Listings. It offers an especially good collection of links to real estate blogs.
Trump University does not endorse the experts whose blogs are listed, nor do we recommend all the strategies they offer. But we also know that the more we all know about real estate, the better we will all do.
Have you noticed that smart, educated people usually create opportunities for
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Homeowners' Associations: Can You Live with the Rules?
If you buy into an organized co-op, condo, townhouse or subdivision development, a homeowners' association (HOA) will require you to live under its regulations and rules.
Don't take a casual glimpse at these associations and move ahead with your purchase under the assumption that membership is just a formality. Because the fact is, these associations can and will fine you for violations of rules, assess monthly dues that they can raise at whim, demand that you pay for improvements that you don't really care about - and otherwise make your homeowner's experience feel a lot like living in a socialist state.
Here are
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Are Female Real Estate Investors at a Disadvantage?
On Saturday night I watched an episode of TLC’s Property Ladder that followed one property investor’s difficulties in fixing and flipping a house. It was a familiar story, similar to others you will see on other “fix and flip” TV shows. She underestimated the renovation costs and had to exceed her $55,000 renovation budget for fix-ups.
In the end, the female investor still made $80,000 when she sold her property, so all ended well. But she definitely encountered some unpleasant surprises during her renovation. The roof needed not just new shingles, but new sheathing underneath. The backyard needed an expensive new drainage system, not just a cheap application of
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Don't Get Spaced Out of Real Estate Profits
When pricing properties, sellers, sales agents, and appraisers frequently use price per square foot comparisons. For example, a 1,500-square-foot property listed at $350,000 would figure out at $233 per square foot.
The agent or seller then might toss in a statement like, "We got this house bargain priced at less than $235 a square foot. Nothing else in this neighborhood has sold for anything under $275 per square foot."
Okay, sounds good so far. But before you bite, check the facts.
Watch Out for Errors of Measurement
Appraisers, sales agents, sellers, and property tax assessors mismeasure properties all the time. In fact, sellers or realty agents often
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Tell Me About Your Favorite Real Estate TV Show
Flip This House, a popular show about people who apply the flip-and-fix strategy to real estate investing, is a big hit on A&E. Over at Bravo TV, you’ll find another show, Flipping Out, on a similar theme. If you watch them, you already know that they offer very different perspectives on real estate development.
I have personal opinions about what is realistic about these two shows, and what is not. But instead of writing about what I think today, I’d like to invite all of you to post your comments here about what you like and dislike about those two shows -
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The Truth about Credit Repair
"Erase bad credit," the credit repair ads say. The Federal Trade Commission (FTC) says something quite different . . .
"Don't be misled by credit repair ads ... Promises to repair or clean up a bad credit file can almost never be kept."
How do these firms get away with making false promises? They just operate until the government shuts them down; then they open shop again under a new name.
In fact, many of the tactics used by these firms can land their victims in jail. For example, one trick they pull is to get you a new credit file under a different (false) Social
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Trump University Takes It Live!
An Interview with Dee Colwell, the power behind Trump University’s new Live Events
Trump University has already gained recognition as the world’s fastest growing institution of electronic and interactive learning. So why is Trump University introducing an equally fast-growing series of live seminars and workshops? Barry Lenson, our Executive Editor, talked with Dee Colwell, Trump University’s Director of Operations, to learn more.
Barry: Why is Trump University, a center of online and interactive learning, moving into live events?
Dee: There’s no doubt that interactive learning is powerful and flexible. But to take advantage of certain areas of hot opportunity like foreclosures, people need knowledge
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Mortgage Mayhem: How to Survive and Profit
I read two disquieting articles in The New York Times just two days ago:
“Credit Time Bomb Ticked, but Few Heard” provided a timeline that showed at a glance just how may subprime lenders have shut their doors since 2006. It also predicted coming bankruptcies and told the stories of young professionals who have put their home-buying dreams on hold while they ride out the crisis.
“Loan by Loan, the Making of a Credit Squeeze” was even more disturbing. It told the story of a husband and wife in Connecticut who bought their first house for a relatively modest $180,000, but then paid for a new
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Beware Doom and Gloom Thinking about the Current Real Estate Market
The recent foreclosure crisis has caused some experts to say that this is a very bad time to invest in residential properties. The market is flat, they say, and sure to remain so for the foreseeable future.
Don't listen to them. Since World War II, home prices have frequently jumped by 10 or 20 percent a year. It is true that on occasion, prices have held steady for as long as three to five years. There have also been times when certain cities have experienced severe downturns in their local economies, causing prices to fall temporarily. During the early 1970s, for example,
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Trump University's Free Foreclosure Training Programs: New Locations for You!
"In March 2006, my husband and I attended a class with Denise DeVoe as the instructor. Since then, we have purchased over $2.3 million worth of properties [and achieved] a net worth of $700,000. We know that Denise DeVoe's class was the beginning of an improved lifestyle for us and our family. We would and do recommend her to everyone!" - Denise Barone
People in cities from coast to coast have raved about Trump University’s free foreclosure seminars, hosted by Denise DeVoe.
Denise is a powerhouse of a real estate investor. At the age of 19, she bought her first property. She has
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Flipping Out on Bravo TV: Adventures of an Out-of-Control Real Estate Developer
I don’t know whether you watched the premiere of a new reality show called Flipping Out on Bravo TV last night. I did. The show will follow a real estate developer named Jeff Lewis as he buys, renovates and sells upscale houses in Los Angeles.
Lewis engages in some pretty erratic practices. He consults psychics and spiritualists before buying or selling properties. Before he put his own house on the market, he replaced all his own furniture with special “staging” furniture that he keeps in storage for the purpose. Then he forced his eye-rolling staff to light candles and take part in
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Separating Real Estate Facts from Fiction
“When I started out, I spent a lot of time researching very detail pertinent to the deal. I still do the same today.” - Gary W. Eldred, PhD
Savvy entrepreneurs search beyond conventional wisdom, “facts,” opinions and fanciful dodges or assertions. They know that quality facts provide the ingredients for quality decisions. As you move forward in real estate (and life), use multiple data points and sources of information. Interpret, think, analyze, and verify. Avoid a rush to judgment. The world overflows with GIGO (garbage in, garbage out) decision making. But with verified facts on your side, you can outperform the crowd.
Say
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Why Real Estate Outperforms Stocks and Bonds
When I first began buying rental houses and apartment buildings, I could easily find properties that offered net unleveraged rental yields* of 10 to 16 percent. In some areas of the country, such as the Midwest, you can still achieve such favorable results. More typically, today’s rental properties yield four to eight percent.
You might tell me that four to eight percent doesn’t seem like a great rate of return. But relative to stocks and bonds, properties win hands down. Let me explain why.
Why Rental Properties Outperform Stocks
At present, the annual dividend (income) yield on the S&P 500 stock index barely reaches
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Pinpoint Your Ideal Buyers and Renters
Who are the ideal buyers for your properties? Who are the ideal renters?
You may have heard other real estate investors divide their prospects into housing segments such as empty-nesters, yuppies, first-time home buyers, move-up buyers, the age 55+ market, and, more recently, the Hispanic market, the Asian market, and even the Islamic market.
Although any or all of these labels might stimulate your thinking, never let them determine your market segmentation strategy.
I learned that lesson during the 1990s while I was conducting my Stop Renting Now! Seminars throughout the country. My seminar attendees fit no specific demographic. Their ages ranged from 25 to
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Profitable Lessons from Multi-Unit Foreclosures
A real estate developer I know said something interesting to me last week.
“Virtually all the foreclosed properties out there are single-family homes or condos,” he said. “If you can find me more than a handful of foreclosed multi-unit properties, I’ll eat my shirt. It’s because people almost always make money in multi-units, so they don't go into foreclosure.”
An interesting statement, for sure. So I started searching online for statistics about multi-family foreclosures. What percentage of all currently foreclosed properties are multi-units? I had no luck finding out.
But then I went to a popular online foreclosure listing service, Foreclosurewarehouse.com. Sure enough, I found multi-unit properties
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Winning Real Estate Strategies for Uncertain Times
How do the smartest real estate investors minimize their risks in uncertain times?
“Five Ways to Reduce Commercial Real Estate Risks” an article by Will Moore from Pacific Security Capital offers some excellent ideas. Although Moore writes from the perspective of a company that specializes in commercial real estate, its strategies apply to most any real estate investing tactics you can make.
Here is a summery of the five of the risk-minimizing strategies it recommends:
1. Buy or build from the market’s perspective. Understand what product type and demographic location the highest market demand is seeking and how you appeal to it.
2. Know market costs and dynamics, as well as market prices,
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Is This Your Year to Invest in International Properties?
“Real-Estate Investors Head Overseas,” an article by Jeff D. Opdyke in Thursday’s Wall Street Journal, reported that more American real estate investors are acquiring property in foreign countries. Other U.S. investors are investing in foreign REITs and real estate funds.
It’s intriguing to think about investing abroad, but it can be speculative and risky. Without an insider’s knowledge of the countries where you intend to invest, you can be in for unpleasant surprises. Exchange rates can work on your behalf, or against you, when you buy or sell. A strong dollar can make foreign properties bargains; a gradually weakening dollar can make
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Real Estate: More Shingles are Shaking Loose for Investors
An article in yesterday's Miami Herald provided more evidence that to be successful in real estate today, you have to keep your eye on a number of trends at the same time:
Slowing construction. Construction of new apartments and homes dropped by 2.1 percent in May to 1.474 million units - 24.2 percent below the level of a year ago.
A lingering surplus of available new homes. Thousands of new homes are unsold and homebuilders are offering new sales incentives to buyers, including kitchen upgrades and free decks.
High interest rates. Freddie Mac's national survey of interest rates for 30-year mortgages hit an 11-month high of 6.74 percent last week.
And then on the same
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Trump University Foreclosure Seminars Coming to California Next Week
If you are eager to learn how to make a great deal of money in foreclosures and would like to minimize your risks at the same time, I would urge you to investigate two foreclosure workshops that Trump University will be holding in California next week:
Friday June 15, 9AM - 3PM at the Portofino Hotel and Yacht Club, Redondo Beach, CA
Saturday June 16, 9AM-3PM at the Renaissance Agoura Hills Hotel, Agoura Hills, CA
Both seminars will be lead a member of the Trump University faculty who has built a substantial real estate empire that includes many foreclosed properties. Like all Trump University
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There's More Profit in Multi-Unit Properties
For some great insights about why multi-unit properties offer great investment opportunities, I urge you to read last Friday’s post on this blog.
But to invest safely, you also need to be aware of the risks. If you fail to ask these questions before real estate investing, you could be making a very big mistake:
Are all the rental units in the property legal? Have your attorney check with the municipality where the building is located to be sure that they are. If units turn out to be illegal and the city disallows them, that could damage your rent roll and turn the
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Why Multi-Units Offer Maximum Profits
Very few first-time real estate investors have a lot of money to get started. So to gain a foothold, they buy single-family homes and hope to expand from there.
Sounds logical, right? Maybe yes, maybe no, because there are many reasons why investing in smaller multi-family homes or apartment buildings offers a better way to start, provided you know how. There’s a very simple reason:
Leverage
It’s the near-magic principle of letting other people's dollars work for you. Let’s take a quick look at some advantages of multi-units:
They provide multiple income streams and enhanced cash flow. If you analyze the rent roll and fixed expenses on the properties you’re
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No-Fail Financing Strategies for Today's Market
When history books are written, the year 2007 will probably be called “The year of real estate upheaval.”
First there was all the talk about the real estate bubble. Then came the subprime lending crisis, followed by a surge in the number of foreclosed properties hitting the market. Then just last week, there were widespread reports about falling prices and a surplus of newly constructed homes across the country.
What does it all mean if you are trying to get your first mortgage and get started in real estate?
There’s some good news. Despite all the uncertainty in the markets, you can still strategize
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Cash In on the Boom in New Home Sales
If buying and holding new houses is your strategy for investing in real estate, this could be your lucky day.
Thousands of new homes are on the market - and they are selling for record low prices. Here's what the Associated Press reported yesterday:
981,000 new homes sold in April. That’s a jump of 16.2 percent over April of last year - the biggest one-month jump in 14 years.
But at the same time, new home prices are tumbling. The median price of a new home fell 11.1 percent between March and April alone. As the AP article explained, “The big price decline indicated that builders are slashing prices in an effort to move a
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Don't Let Foreclosure Riches Pass You By
Every day brings new data about the current foreclosure boom. Just yesterday, Foreclosure Bank released statistics indicating that property foreclosures across the 50 states are running at a rate 46% greater than last year at this time. And during the first quarter of 2007, foreclosures rose 25% over the final quarter of 2006. How can you not pass on the profit from foreclosure opportunities?
I would urge you to register for our Real Estate Foreclosure Coaching Program. There are no other courses like it anywhere. But in case you think my only purpose here this morning is to enroll you in one
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Use Other People's Money to Leverage Real Estate Riches
A recent article in Forbes highlights the risks of using other people’s money to leverage personal success.
Using other people’s money (or “OPM” as slangsters like to say) can be extremely risky in the corporate world - especially if you drain the corporate coffers to fund initiatives that don’t work out. But in the world of real estate investing, where it is possible to apply leverage in all kinds of different situations, it can be a very smart thing to do.
I recently spoke with one real estate developer, for example, who leveraged his way into owning a lot of property by
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