January 2008 Archives

As a landlord for over the last 10 years I can tell you I had my share of good tenants and share of some bad tenants, as do all landlords. Today I want to share with you some ideas and techniques that I use to at least limit the possibility of a bad tenant. In my experience I have encountered on a few occasions where no matter how much time and effort you put in, you just can`t predict the future, and because you can`t you won`t be able to for-see your tenant lose their job resulting in you not getting your rent. Will get to more on that in a moment.

When you are in the business of real estate, then you should really brush up on your knowledge on property metrics. This is because such knowledge will extensively help you in the determination of the investments you will be making in real estate. Thus, there is indeed a need to keep certain KPIs, or key performance indicators, in mind.

Foreclosures have been steadily increasing over the past few months in most American cities. Some of the cities with the highest number of foreclosures include Atlanta, Los Angeles, Miami, Detroit, Phoenix and many others. There are many different reasons why homes go into foreclosure. One of the most important reasons today is the day so called sub-prime mortgage mess. This occurred because many banks relaxed their lending guidelines. A lot of people who would otherwise not be able to buy a home were able to buy a home over the past few years because of these relaxed guidelines.

National housing analyst Tim Sullivan of the Sullivan Group has put together a seven-point test to track the market's recovery. We will be following these indicators closely during 2008 to help keep your finger on the pulse of the Market:

Welcome to the Twelfth Edition of The Carnival of Smarter Investing! Each week we’ll post featured articles by investors and writers in the areas of business and real estate, with the best article of the week being featured on the front page of boozwatt.com, for thousands to see! So get those creative juices flowing and send in your submissions. A new Carnival will be posted every week. To submit your article for next week’s edition, you can do so here.

Sensitivity analysis involves changing one variable at a time over a possible range of outcomes to evaluate the effect of that change allowing real estate analysts to review each variable's impact upon the investment property's present value. Sensitivity analysis has become popular because easy-to-use investment analysis programs (template-based spreadsheet software for the computer) can calculate and recalculate a range of variables quickly and hence help the real estate analyst determine the best possible scenario for buying or selling investment property.

So many times I get the question "How do I get started wholesaling properties?"

OK, here is the answer. I will give you the actual first step. And the best thing about it is that you can start implementing it RIGHT NOW! No preparing stuff, no setup steps, no excuses - you are ready now!

Welcome, readers and writers, to boozwatt.com and the 72nd Edition of the Carnival of Real Estate! We're proud to be hosting this Super Sized edition of the Carnival of Real Estate, and the very first of the new year. Due to the holidays, boozwatt.com was tasked with hosting a two week version of the Carnival, so we received a TON of great submissions. In the spirit of manageability for you, the reader, however, we've narrowed them down to our 15 favorites, as well as our Pick of the Week. So, without further adieu, read on and enjoy the best articles submitted for the first edition of the Carnival of Real Estate in the new year. And, when you're done, take a second to look around our site and some of the great articles we've assembled on various topics of real estate and real estate investing. Thanks for stopping by, and enjoy!

As a real estate investor, I’ve done it, seen it, or heard it all. The news is filled with doomsday predictions daily, and Real Estate investors are bailing left and right. The good news is, there is still money to be made in real estate, and with less and less real estate investors in the market, there’s even better deals to be had, and more money to be made than before. 

The number one question we're continuously asked by new investors is “how do I get started investing in real estate without a bunch of money in the bank?” It’s a legitimate question. Let’s face it, most people that begin investing in real estate more than likely aren’t happy with their current financial situation in life, and are looking for and expecting more. Therefore, most of those people don’t have $10,000 - $40,000 in the bank to spend on their first property. Even if you happen to have excess money in the bank, maybe you don’t want to use it to acquire your investment properties. Whatever the situation, investing in real estate with no money down is a very important part of growing your real estate empire. 

There are countless changes, upgrades, and updates that can be made to any given property. What separates successful, long term real estate investors from the rest is the ability to maximize their resources (time and money), and in turn, their profits. This has become more important due to the relatively thin profit margins available in today’s real estate market compared the margins available over much of the past decade. Thinner profit margins leave a much smaller margin of error. In order to assure a much greater chance of success on a flip property, it’s absolutely crucial to maximize every ounce of your available resources for your flip project. No matter their timeline or their bankroll, investors doing flips always have limited resources because time equals money due to mounting carrying costs, and the more money expended on renovation equals less available profit on the back end. Therefore, it is crucial for each real estate investor to understand how to maximize their profits from a flip project. So let’s get started. You’ve followed the formula here and the tips and suggestions here, and you’ve identified a potential flip property. Now on to the planning stage.

I recently wrote an article elsewhere on the site discussing investment strategy as it relates to finding potential rental properties. In that article I discussed the inverse relationship between rental properties and renovation / “flip” projects, and I received a lot of emails asking for elaboration on the subject. After clearing it with our company’s other lead partner, I’ve decided to answer the call for more elaboration, and describe in detail our company’s investment strategy. While you’ve already learned elsewhere on this site how our company evaluates “flip” properties and rental properties (see link above), this is how we put it all together. When I was starting out in real estate, one thing I looked everywhere for was real world success stories, and how individuals and investment companies got where they were. My thought was, if not necessary, there’s no reason to re-invent the wheel. The problem is, a majority of the time you can only find that type of information in books, and I didn’t feel like having to pay for it. Secondarily, I’ve always wondered, if you’re so good at real estate investing, why are you writing books instead? But I digress. Here is our strategy, free of charge, to the loyal readers of boozwatt.com:

Flipping properties isn’t the same business as it used to be. Even as short as two years ago, “lipstick” alterations (meaning cosmetic changes such as paint and etc.) would yield massive returns. There’s no question that the market has changed, however. Discussions about the changing real estate market are on every news channel, every real estate website, and even within these pages of boozwatt.com. Flipping properties has become more of an art form now. It requires not only the transformation of a formerly ugly property to something of uniformly appealing taste (appealing to uniform taste is harder than it sounds), but also an efficient maximization of renovation dollars. The reality of today’s real estate market means that the margins on flipping properties is smaller. A prudent investor must buy for a good price, spend efficiently on the renovation, and then list below the market price in order to sell quickly and avoid carrying costs, which can become devastating the longer a home goes unsold. 

Today’s foreclosure market is absolutely record setting. Recent results have shown that foreclosures have increased 93% compared to last year. NINETY THREE PERCENT!! That’s insane. This is good news for real estate investors for two reasons. 1) A majority of these properties used to be on the regular market before they went into foreclosure, soaking up buyer interest and padding the inventory numbers, thus the foreclosure process will remove them from the pool, and 2) more foreclosures equals more deals. The second part is the obvious one. More foreclosures equals more deals. Duh. But what isn’t so obvious is the impact. Not only are there more deals to be had, due to foreclosures, but there are less investors to take advantage of these deals. 

Welcome to the Eleventh Edition of The Carnival of Smarter Investing! Each week we’ll post featured articles by investors and writers in the areas of business and real estate, with the best article of the week being featured on the front page of boozwatt.com, for thousands to see! So get those creative juices flowing and send in your submissions. A new Carnival will be posted every week. To submit your article for next week’s edition, you can do so here.

The first step in locating a home foreclosure is to find them, a little research and patience, but the rewards are can be well worth the time. The majority of properties in default are easily identified by the first legal foreclosure document that is filed this is known as a "Notice of Default" or a Lis Pendens, in most states. A "Notice of Default", of NOD, commonly used in non-judicial states and the Lis Pendens normally used in judicial states; not all states are the same and some have their own laws and regulations.

We all remember the heady days from late 2003-2005. It was a market where, despite the realities, just about anyone could get into the investing or purchasing of a new home without really making all the motions necessary to protect themselves from the "worst case scenario. But just like common rules of economics dictate, markets with high profitability soon will get flooded with competition. Unfortunately, millions of innocent families got swept up in the rush, either buying property that had low "teaser" rates, or just plain buying above market price, sometimes both. Lenders point fingers at their financial pools and investors, many pointed the finger at Wall Street, real estate brokers, underwriters, and homeowners alike.

As you probably know, a foreclosure is a legal proceeding in which a bank or lender sells a repossessed piece of real estate due to the owner's inability to make scheduled payments on the mortgage or deed of trust. Banks and other lenders typically consider a mortgage to be in default when several months have gone by without payments having been made. Now despite being a dreaded word, a foreclosure can actually be extremely fortuitous for those looking to invest in real estate or just to buy a house to live in at discount. The foreclosure process is a sophisticated process that is comprised of three main stages, each presenting a bargain buying opportunity. This article specifically discusses the first stage of foreclosure known as the pre-foreclosure stage, considered by many real estate investors and other professionals to be the best time to buy a foreclosure.