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Six Ways Investing in Real Estate Can Save You Money

In Buyers, Commercial Real Estate, florida, Investing, Investor, IRS, miami, miami beach, Miami-Dade County, Multi-Family Real Estate, real estate, Roth-IRA, Self-Directed IRA, Sellers, tax deductions, Tax Matters on May 10, 2013 at 1:28 pm

There are many investment vehicles. Stocks, bonds, art, coins, postage stamps, toys, commodities and real estate, among others.

Some economists even suggest that as long as you are disciplined and can comfortably pay for it, you should buy any investment you can. If you can finance the purchase, even better.

However, real estate is probably the only one against which you can borrow and have the asset pay itself off through rental income, EVEN as it pays YOU.

In fact, I have spoken to property owners who have managed to leverage a property two, even three times in their lifetime, by borrowing against the property they now own free and clear, to buy another.

What’s more, the income from the new property (let’s call it property B), paid with borrowed funds from say, property A, plus the income they still generate from that newly leveraged property A, can over time, pay back the loan on A from rent collections on A and B, while proving the owner with a boost in passive income. In other words, party money.

Even if you can purchase property in cash, many recommend you consider financing after the fact. Leveraging allows you to possibly, acquire two or more properties, update or fix them up and let themselves carry the burden of paying down the loans with rental income.

Over time, you would have the ability to acquire even more properties and eventually, when you are at the right stage in your life, own them all free and clear while enjoying all that income in retirement. The ultimate 401K or IRA.

Of course, you must buy right and be disciplined throughout. With every payment received in rents, you must set aside a portion every month to pay for licenses, taxes, insurance maintenance and miscellaneous repairs, improvements, etc. In short, you must budget as you would with any business.

Below, we examine some of the advantages for owning investment property and in particular, multi-family property.

1. Economies of Scale

When you buy a single family house or condo unit, small investors often feel they’re easy to manage. That may be true to some extend. On the other hand, consider that with a multi-family building, you only deal with one roof and/or one yard to mow, you are the board that approves tenants or how many times a year you rent your property and in one single trip, you can fumigate, inspect and have a punch list ready for your handyman, plumber and/or electrician to take care of, minimizing headaches.

2. Lower Taxes

There are several tax incentives for real estate investors. If you are employed, deductions from real estate investments may be used to offset wage income. In addition, there are a number of tax breaks for real estate investment which often allow property owners to turn a loss into a profit. Deductions can include any actual costs involved in financing, managing and operating the property, to include maintenance, repairs, property management fees, travel, advertising, and utilities. In addition, the IRS allows a depreciation deduction that accounts for a portion of the building (not the land portion of the property) over time, usually some 27 years.

3. Cash Flow

A property can generate negative or positive cash flow. Cash flow simply refers to the amount of money that flows in and out in pursuit of maintaining a property. Rents are an example of cash flowing in while taxes and insurance must be paid out, typically from a portion of the rents received. When the amount of income received exceeds the payments, it is said you have a positive cash flow. There are times when the amount of payments exceed your income and in these cases, you are said to have a negative cash flow. Regardless, when it comes to real estate investment, there are two more important concepts involved: pre-tax and after-tax. A pre-tax positive cash flow for instance, may also be said to occur when income received is greater than expenses before taxes are paid. However, even if your are experiencing a negative cash flow, you may end up with an after-tax positive income when your expenses are more than your collected income, but the tax breaks bring you back in the black. Depreciation can often help turn a negative into a positive.

4. Use Leverage

An old rule of thumb in real estate is to never spend a dime on your real estate investment unless you have to and/or unless it will save you money. Leverage is an important aspect of saving money through real estate investment because a real estate investor uses leverage to increase their assets without spending their own money. By taking advantage of your equity, you also improve your return on equity and it provides you with tax-free funds to help fund your next deal or improve the value of your existing property by making updates, upgrades or repairs that entice tenants (to come in or stay) and should allow you to raise rents and improve your bottom line.

5. Equity Growth

The best way to save money and earn money, is to build up equity from real estate investments. That way, with high equity you are able to save on your mortgage while earning a nice chunk of profit. However, idle equity is like idle funds in the bank. Ideally, you are always utilizing your equity to improve the value of the property and/or pursuing and acquiring new opportunities. Often, selling is a great way to take advantage of existing equity, which would allow you to reposition yourself in a potentially better property with better opportunities. For instance, you may own a building sitting on prime land which may allow you to build a much larger structure for more potential. However, you are not a builder and you’re not in the mood to start. Even if that property is making money, selling it may bring enough to allow you to purchase a more suitable property or properties.

6. The Benefits of Inflation

Generally speaking, inflation can help you save money on your real estate investment because as rent increases, your mortgage costs will remain static (assuming it is a fix-rate loan), which means you will improve your position with the increased cash flow from the rent and equity growth. Although inflation is quite low these days, there is a typical amount of appreciation properties experience as a result of even low inflation, which adds to your equity without a single penny out of pocket.

Of course, it is not all rosey with real estate investing. There are a LOT of factors that deter people from getting involved. It is scary, you could lose a lot if you engage from an emotional standpoint and there are headaches and horror stories borne from bad tenant situations to fill a few books.

Regardless, I reiterate that if you buy properly, budget properly and stay involved, you may never have to worry about money when it counts – throughout the live of the property and during your retirement. What could be more beautiful than that?

Most real estate professionals can help a buyer or seller make the right buy or sell decisions. Obviously, as you would listen to a quality attorney, doctor or accountant, listening to a quality real estate professional’s valuable information will go a long way in helping you achieve your buying or selling goal. Budgeting however, is a function of habit and here again, you must proactively seek qualified, quality, professional advise.

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NAHB: In Fla., 44% of homes headed by 55+ adult

In 55+ Community, florida, Home Buyer, home sellers, Industry trends, Miami-Dade County, real estate on July 19, 2012 at 6:55 pm

WASHINGTON – July 19, 2012 – A recent analysis of government data by the National Association of Home Builders (NAHB) finds that the geographic distribution of households headed by someone age 55 or older is fairly even across most of the country – no state has less than 30 percent of all households meeting this description.

In Florida – the No. 2 state for older adult head-of-households – 44 percent of households are headed by an adult at least 55-years old.

According to NAHB, however, more baby boomers will cross the 55-year age mark, and the percentage of older-adult households will continue to grow. NAHB’s long-term forecast indicates that the share of 55-plus households will increase yearly through 2019 until it account for nearly 45 percent of all U.S. households.

“As more baby boomers approach retirement and the average age of the U.S. population increases, many businesses – including home builders – are showing increased interest in designing products that appeal to customers 55 and older,” says Paul Emrath, NAHB’s vice president of survey and housing policy research. “This research shows that 55-plus developments should be possible in every state.”

Findings

• In the U.S., 43.9 million households are headed by someone 55 years old or higher, accounting for nearly 38 percent of all U.S. households.

• Among the 50 states and District of Columbia, the share of households ranges from 31 to 45 percent.

West Virginia tops all states, with 45 percent of its households headed by someone 55 or older, followed by Florida at 44 percent, Hawaii and Maine (43 percent each) and Pennsylvania and Montana (42 percent each).

• Utah and Alaska are the only states where less than one-third of the households are 55+.

• For 97 percent of all 3,143 U.S. counties, the share of households age 55 or older is more than 30 percent.

• 44 U.S. counties have a 55-plus household share over 60 percent.

• Sumter County and Mineral County, Colo., have the highest percentage of 55-plus households at 77 percent.

NAHB 50+ Housing Council Chairman W. Don Whyte says the new baby boomers are “radically different” that the generations that precede them. “The customers are fitter, more computer savvy and plan to live an entirely different lifestyle from what they might have thought previously – or what we would have aimed at providing for them,” he says.

NAHB has posted its full analysis of the baby boomer households on its website.

Reprinted by permission: © 2012 Florida Realtors®

5 Buyer tips for Distressed Properties

In bank-owned properties, Buyers, closing, credit, Distressed Sales, Downtown Miami, fannie mae, FHA, First-Time Buyer, Fl, florida, forclosure, foreclosure, Freddie Mac, government, Home Buyer, home sellers, HomePath, HomeSteps, HUD, Investing, Investor, lenders, Loan Program, miami beach, Miami-Dade County, mortgage, real estate, REO, Short Sales, South Beach on January 24, 2011 at 4:56 pm

Miami Beach, Fla. – Jan. 24, 2011 – Wenceslao Fernandez, Jr, a Florida real estate agent with Keller Williams Realty who specializes in Downtown Miami and Miami Beach properties, has come up with five tips to help distressed property buyers. These tips should work in virtually any U.S. market.

Wenceslao says that, “even seasoned investors don’t always follow or understand these practical tips”.

1. Work with a full-time Realtor(c). After the bust, many agents left the business so, not all real estate agents are in the business full time or even Realtors(c) any more. The term Realtor(c) can only be used by members of the National Association of Realtors (NAR), who adhere to their strict Code of Ethics. When it comes to distressed properties, a specialist is your best bet. Look for a Realtor(c) who is also a Certified Distressed Property Expert (www.CDPE.com), and who’s able to guide you with the right strategy for making offers on Short Sales or REOs. Many buyers assume that all agents have the knowledge to help them with these two distinct types of distressed property sellers. Like with hiring any professional (doctor, attorney, plumber, CPA), hiring the right agent to help you through this process, is key.

2. REO properties have the advantage of faster closings. Their disadvantage is that, more than 90% of the time, they only sell for cash and there may be multiple, competing offers on the table. On the other hand, although you can also pick up a Short Sale at a bargain price, there is nothing “short” about the amount of time they take to even be accepted. Some lenders negotiate quickly, others still drag their feet. It is not unusual to wait two or three months or longer, just to hear whether your offer was accepted by the seller’s lender – then the actual sales and closing process begins. Their advantage is that often, they are in better condition, especially if they are still being lived-in by the owner(s), and your offer may be the only offer the lender is considering for approval – minimizing the bidding wars of multiple offers often seen with REO sales.

3. Bargaining for less than the asking price will be a function of many factors. Many REO’s are listed well below market and attract a lot of attention. Making sure you offers wins the “bid”, may require a full-price offer and often, even a slightly more aggressive offer. Short sales may allow you a little more flexibility – as long as the offer is within reason for the property condition and local (building or area), market condition. Sellers of REO don’t typically want to hold these too long and are usually motivated. Lenders who have been going through a long, pre-foreclosure process are also motivated but may only be “servicing” the loan and the bulk of the decision, may be dependent on the investors behind the loan and/or mortgage insurance folk.

4. Avoid complicated offers. REO sellers typically prefer clean offers. The less contingencies you attach to your offer, the cleaner the transaction flow is expected, the better the chances are that they’ll agree with your offer. Lenders looking to approve a short sale may agree to some concessions. The worst that can happen is that they say no. In either case, sometimes lenders are quite accommodating – even REO lenders who already have possession of the property are known to give concessions if inspections reveal certain problems not previously known or problems which were not readily visible. Otherwise, most of these purchases are “as-is, where-is” and you should know what you are getting into. Being “handy” may not qualify you to throughly inspect and understand what you are about to buy.

5. Get the right pre-approval from the right lender. Regardless of which type of property you intend to buy (whether distressed or not), having this approval letter ahead of time will ensure you move forward. Most offers to be considered, must be accompanied by this letter. REO properties are typically sold for cash. However, properties now held by Fannie Mae, Freddie Mac or HUD, will often consider financing offers during the first 15 days a property is listed, as long as the buyer is an owner-occupant. Even if the REO or Short Sale property needs repairs, there are loans that allow the buyer to borrow additional funds for repairs. Make sure you lender understands FHA-203k, Home Steps and Home Path loans and that they have a thorough understanding of any other government program you may qualify for.

Want to know more? Contact Wenceslao Fernandez Jr HERE.

Miami sales up – and it’s no longer just me saying it…!

In Buyers, closing, Downtown Miami, First Time Sellers, First-Time Buyer, florida, Home Buyer, home sellers, Industry trends, miami, miami beach, Miami-Dade County, real estate, second home, Sellers, South Beach, vacation home on December 23, 2010 at 12:49 pm

It is no longer me saying it. The Miami Herald just published the article in the link below.

http://www.miamiherald.com/2010/12/22/1985942/condo-sales-heat-up-as-deals-resume.html

If you are THINKING about buying…well….I’m not really sure what there is to think about.

Think about it too long and with Average AND Median “closed” prices up in October AND November, PLUS interest rates up for 5 weeks straight, “thinking” may start to get expensive – even price you right out of the market.  THE WINDOW MAY BE STARTING TO CLOSE. Snooze and well…lose?

Sellers can’t get too excited still though. Properties sold are still the properties “on sale”. Who in their right mind would buy milk  for $9 a gallon if they can pick it up down the street for $3.49/gal.?  Not many, I’d guess.

This is no time to let greed creep up your spine if you are looking to get your place ‘sold’. This is the time to sit with your agent and find out what exactly needs to happen to move your property from the “for sale” (hope and wish list) or “expired” (rejected), side of the ledger to the “sold” side of the ledger.  What a weight off your shoulders if this needs to happen for you soon.

If you don’t need to sell right now and you intend to wait for the right buyer to come along, you may be much better served taking the property off the market and reposition it to SELL in a few months when you see yet more confirmation that you can finally get that magic number you need or want.

Keep in mind though, if you are waiting to sell in order to buy your next home, that other property may also cost you more when you finally get yours sold. If you are looking to find a bargain you can buy…getting that property sold today will help ensure you don’t miss this great opportunity to also buy at bargain prices.

As the old saying goes…pay the piper now…or pay the piper later. Perhaps you Sell low and then Buy low. Otherwise, may be you get to Sell high to Buy high. You choose.

I Can’t Pay My Mortgage and I Don’t Know What To Do :-/

In Distressed Sales, fannie mae, FHA, First Time Sellers, florida, forclosure, foreclosure, foreclosure moratorium, foreclosure prevention scam, Freddie Mac, government, HAFA, HAMP, home sellers, homeowner, HomePath, HomeSteps, HUD, Industry trends, IRS, Market Report, miami beach, Miami-Dade County, modification, mortgage, NAR, National, option-arm, real estate, REO, scams, Sellers, Short Sales, South Beach, Tax Matters, Trends, Wenceslao on December 22, 2010 at 4:05 pm

About 75% of folk who lose their home to foreclosure, do so because they either do not seek help, or they get the wrong kind of help.

I am often asked legal questions to which I must invariably reply…I am not an attorney. The best I can do is speak from personal experience and remind them that it is imperative to seek competent and relevant legal and tax advise from active professionals.

In real estate for example, not all real estate agents are even Realtors.  Realtors are agents who as members of the National Association of Realtors(c) (NAR), they must adhere to NAR’s strict Code of Ethics. In addition, many are no longer in the business full-time nor are they truly keeping up with all the industry changes.

Homeoners looking to sell must always seek the assistance of full-time professionals. When in distress, they must take extra precautions in order to avoid falling victims of scams and even, downright fraud.

Below are some of the most common Frequently Asked Questions (FAQs) about foreclosure avoidance.  If you have further questions not addressed below, or would like additional information and resources, feel free to Contact Us.

Do I qualify for a short sale?

The qualifications for a short sale include any or all of the following:

  1. Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
  2. Monthly Income Shortfall – In other words: “You have more month than money.” A lender will want to see that you cannot afford, or soon will not be able to afford your mortgage.
  3. Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

What is a mortgage modification?

A mortgage modification is a process through which your mortgage lender changes any or all of the following:

  • Your interest rate
  • Your principal balance (through a reduction)
  • Your loan terms (example: from an adjustable to a fixed rate)

This process can allow borrowers to stay in their property when they can no longer afford their current mortgage payments.

Why would a lender modify my mortgage?

Lenders have realized that in some cases it is better for them to work with current borrowers to lower payments or possibly improve terms in order to keep homeowners in their properties. The average foreclosure can cost a lender from 35-50% of the value of a property, so keeping borrowers in their homes is a good option for everyone.

What do I need to qualify for a mortgage modification?

According to the Making Home Affordable Web site (www.MakingHomeAffordable.gov), you will need the following information for your lender to consider a modification:

  • Information about your first mortgage, such as your monthly mortgage statement
  • Information about any second mortgage or home equity line of credit on the house
  • Account balances and minimum monthly payments due on all of your credit cards
  • Account balances and monthly payments on all your other debts such as student loans and car loans
  • Your most recent income tax return
  • Information about your savings and other assets
  • Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources

If applicable, it may also be helpful to have a letter describing any circumstances that caused your income to reduce or expenses to increase (job loss, divorce, illness, etc.)

How do I qualify for a mortgage modification?

The first call you make should be to your lender, have the information above ready to discuss with them and call your customer service line to ask them what options you have available. If the person you speak with does not understand what you are asking, you can ask to be referred to one of the following departments (different lenders have different names for these departments):

Prior to contacting your mortgage lender you can quickly complete an eligibility test atwww.MakingHomeAffordable.gov. This test will let you know if you are eligible for a modification through the government-sponsored Home Affordability and Stability Program (HASP). For a list of mortgage lenders and servicers, visit www.HopeNow.com.

What if I don’t qualify for a mortgage modification, can’t afford my home, and owe more than it’s worth?

You are not alone and foreclosure is not the only option. If your mortgage lender or servicer will not work with you to reduce your payment, you may want to consider a short sale. Agents like me, with the Certified Distressed Property Expert® Designation, have undergone extensive training in how to process and negotiate short sales. A short sale allows you to sell your home for less than what you owe and avoid foreclosure. Speak to your market expert to see if you may qualify.

What is a Home Affordable Refinance?

If Fannie Mae or Freddie Mac owns your mortgage, you may be eligible for a Home Affordable Refinance. This will allow you to refinance your home and often lower your payments.

What are the qualifications for a Home Affordable Refinance?

According to the resources released by the government, following are a list of qualifications:

  • You are the owner occupant of a one- to four-unit home
  • The loan on your property is owned or securitized by Fannie Mae or Freddie Mac (see Useful Links)
  • At the time you apply, you are current on your mortgage payments (you haven’t been more than 30 days late on your mortgage payment in the last 12 months, or if you have had the loan for less than 12 months, you have never missed a payment)
  • You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house
  • You have income sufficient to support the new mortgage payments, and the refinance improves the long-term affordability or stability of your loan

Courtesy:  ©2009 Distressed Property Institute, LLC. | All Rights Reserved

The Distressed Property Institute LLC is behind the Certified Distressed Property Expert (CDPE) designation that over 29,000 professionals now hold.

MIAMI’S CLOSED PRICES UP FOR SECOND MONTH IN A ROW

In Buyers, First Time Sellers, First-Time Buyer, florida, Home Buyer, home sellers, homeowner, Industry trends, Interest Rates, Investing, Investor, Kiyosaki, miami, miami beach, Miami-Dade County, real estate, second home, Self-Directed IRA, Sellers, Short Sales, South Beach, Trends, Wenceslao on December 10, 2010 at 3:16 pm

Not surprisingly, Miami-Dade county’s Average and Median Closed prices were up again, for the second month in a row.

Recently, you read my blog post “LISTENING TO NATIONAL REAL ESTATE NEWS MAY BE DANGEROUS TO YOUR FINANCIAL HEALTH” where in response to recent news claiming that national resale prices were down 2% in Q3/2010, I reported that these were already stale reports that were 2-months old and that by contrast, in October, 2010, the Average Closed Price in Miami-Dade had gone up 6.3% while the Median Closed Price went up 5.5% from September, 2010.

As it turns out in November, 2010 and for the second month in a row, the Average Closed Price in Miami-Dade went up another 5.7% and Median Closed Prices also went up another 3.8% from Oct./2010.

Although the number of properties Sold went down 9.4% from October, 2010, and 1.1% from October, 2009, the number of Pending Sales was up again by 4.1% from October 2010 and up 38.3% from October, 2009.

So, is this proof certain that we’ve hit bottom? I don’t know.

What I do know is that, if you are looking to buy in Miami-Dade county, and you are looking to close before the 12/31/2010 deadline so you can get the deductibility and Homestead Exemption, you must hurry.

Although you do not need to have the deed recorded by 12/31/2010, all documents must be executed by then.

Also, waiting may already cost some people about 12% more based on the recent increases in the Average Closed Price since September, 2010 and 9.3% more based on the Median Closed Price since September, 2010, which stood at $125,000 then and stands at $135,000 as of November, 2010.

Sellers must also understand that, this is NO time to play or allow greed to take over. It is time however to get serious about discussing your marketing with your Realtor.

There are several components of marketing and Sellers control one of the most critical: PRICE

Although a buyer’s ability to have easy access to see the property and how the property shows (is it staged or cluttered), are also two-critical components sellers control, price is a function of almost everything else, including property condition, market condition and other factors we cannot control.

Your professional Realtor controls the promotion and marketing of the property. However, when a property does not show very well or making showing appointments becomes inconvenient for buyers, your Realtor’s best efforts to get the property sold at the highest price, within the shortest time and the least hassles, may be (at least to a degree), negated.

Buyers on the other hand are competing for deals with other buyers and investors. This is no time to hesitate, over-analyze or waste time before looking at the potential deals your Realtor is sending you. It is also no time to second-guess prices if you are at risk of suddenly, being priced out of the market.

With prices on the rise and interest rates also on the rise (even if marginal), the combination of higher prices and higher rates could be lethal to a border-line buyer.

If you are looking to make a purchase or selling decision in the next 15-30 days, don’t hesitate to contact a professional Realtor (remember, not all real estate agents are Realtors – members of the National Association of Realtors who adhere to a strict Code of Ethics), and one who is additionally trained in helping you navigate through the idiosyncrasies of distressed properties*.

If you are looking to sell (not list for sale but list to sell), you may request a Free Market Analysis at FreeMiamiHomeValuation. There is no cost or obligation and you will also get two special reports with your Free Valuation report and will also entitle you to a 30-minute, no cost or obligation consultation.

For Miami Beach, the numbers are even more staggering.  Closed sales in November, 2010 were up 5.9% from October, 2010 and up a whopping 38.5% from October, 2009.

At the same time, Pending Sales in November, 2010 were up 42.1% from October, 2010 while up an incredible 80% from October, 2009, clearly demonstrating that the beaches, as a localized location, is quite more attractive and continues to produce strong results.

More on Miami Beach on a separate post.

*Visit www.CDPE.com and find a Certified Distressed Property Agent near you.  With about 29,000 CDPE’s nationwide, this is the largest professional association of its kind in the nation.

YEAR-END OFFER FOR BUYERS

In Biscayne Boulevard, Brickell Avenue, Buyers, Downtown Miami, florida, foreclosure, foreign nationals, Home Buyer, miami beach, real estate, South Beach on November 12, 2010 at 12:05 pm

MY WAY TO STIMULATE THE ECONOMY…AND YOUR BOTTOM LINE

 

I may not be able to solve the national debt issues, but I do have a way to help stimulate your economy

I am offering Qualified Buyers my VIP Buyer Year-End Special Offer.

 

It consists of a credit at closing of 20% of my commission for purchases closed on or before 12/31/2010.

If you are a cash buyer, ready to commit today, you may qualify and receive at closing 20% of my commission.

Use this towards closing costs, repairs, decorations or anything you want

 

This is my way of saying THANK YOU for your loyal business in 2010

 

Just email me at UpscaleMiamiLiving@Gmail.com or

call 786-693-2269 and make sure to slowly and clearly spell all names and numbers.

Beacon Economics: Housing most affordable in more than 40 years

In Buyers, Distressed Sales, fannie mae, First Time Sellers, First-Time Buyer, florida, forclosure, foreclosure, foreclosure moratorium, foreclosure prevention scam, government, Home Buyer, home sellers, homeowner, lenders, miami, miami beach, Miami-Dade County, modification, mortgage, new rules, real estate, REO, scams, Short Sales, Wenceslao on October 15, 2010 at 3:51 pm

Beacon Economics: Housing most affordable in more than 40 years SAN FRANCISCO – Oct. 13, 2010 – Beacon Economics’ new Beacon Economics Home Affordability Index finds that in August homes were at their most affordable level since data became available (1969). Beacon Economics developed the Beacon Economics Home Affordability Index based on the percentage of income an average family would need in order to make mortgage payments on an average priced home.

The August estimate shows the cost of homeownership (mortgage interest plus principal payments after a 20 percent downpayment) falling to 16.9 percent from 17.1 percent in July. Overall, the Beacon Economics Home Affordability Index has remained below 20 percent for the past twenty-one months.

“Home affordability has reached an historic high,” says Beacon Economics Founding Principal Christopher Thornberg. “Nationwide, prices are down approximately 25 percent from their peak, and mortgage financing rates are at all-time lows.” Moreover, the high level of affordability is likely to drive demand and reduce the stock of excess inventory, ultimately resulting in the need for new housing, a rise in prices, and a pickup in new construction, according to Thornberg.

“While prices may fluctuate modestly over the next several months, we believe the worst of the housing crisis is behind us,” adds Beacon Economics Research Manager Jordan G. Levine. “We expect prices to stabilize around current levels and likely be higher in the next twelve months.”

Thornberg agrees. “Although there could be some modest volatility over the next several months, our research indicates the housing market is at or near the bottom,” he says.

The Beacon Economics Home Affordability Index is intended to help homebuyers and policymakers alike understand the current state of the market.

Reprinted by Permission: © 2010 Florida Realtors®

Open Letter to Obama and Congress

In bank-owned properties, Buyers, credit, Distressed Sales, First Time Sellers, First-Time Buyer, florida, forclosure, foreclosure, foreclosure moratorium, government, Home Buyer, home sellers, homeowner, Industry trends, Investing, Investor, IRS, lenders, Loan Program, Market Report, miami, miami beach, Miami-Dade County, mortgage, NAR, National, new rules, Obama, real estate, REO, Sellers, Short Sales, South Beach, Wenceslao on October 15, 2010 at 11:08 am

With our economy draging (in spite of the recession being over according to “experts”), it is more important than ever to find common ground, leave politics aside, get comfortable, get friendly and come together to find answers, compromises and solutions.

The recent foreclosure fiasco is absolutely appalling. The government and oversight entities, failed; banks and investment houses, failed; borrowers failed and everyone in between, failed; while those who were never even interested and stayed in the sidelines,  are all paying for it.

Some title insurers are already issuing statements refusing to insure recently litigated foreclosure properties.

If we want to see this country come out of the ashes and be the beacon of financial opportunity for everyone again, we need to start coming up with ways to incentivise certain bahaviour and dis-incentivise other.

For instance…for prices to begin to stabilize, even increase, real estate needs to improve. For this to happen, we all agree that jobs must improve.

Looking at the stabilization of real estate, there are certain actions that can be taken with government policy/legislation that will motivate lenders to act in a way that will, in my view, improve market conditions.

The now on-going foreclosure fiasco, has investors/first-time buyers in the sidelines or competing for less properties. An unintended consequence of this may be that prices may begin to rise as buyers/investors compete over remaining inventories, raising the bottom to new highs during this period.

Temporarily, this may also drive investors across the proverbial fence if they insist in avoiding Short Sales and feel that they don’t want to compete at higher prices for the REO inventory now in play.

The higher prices go, the more diluted their returns can be if they feel that the increases are still unsustainable until the employment/ tax situation is sorted.

Lenders must be given a choice to either continue to pay more attention to the REO area of their business, rather than to actually begin to pay attention to short sales and to divert attention and resources that lead to the settlement and conclusion of these, less costly deals.

To continue to ignore this cheaper, friendlier and still competitive alternative that helps save money in legal and other REO related expenses and legal responsibilities and liabilities, while helping to stabilize neighborhoods further, would be a shame.

Worst still…for the government to continue to incentivise rather than dis-incentivise lenders to take the REO route with pain – pleasure oriented programs that help lenders “choose” to continue rather than to abandon the REO alternative (unless absolutely necessary), in favor of the short sale route, would be aweful.

Leadership, starts with our government and the policies they create on behalf of and to help the citizens they represent. If the policies implemented create an environment where sellers can get their property sold with dignity, while keeping a gleam of hope for some future chance of home ownership again, then we are helping multiply the blessings in the future.

Otherwise, foreclosed home owners loose their chance of buying again while required to answer whether they’ve ever had a property foreclosed on or gave it back to the bank in lieu of.  Lenders in the future will be reluctant to lend to these folks.

To create policy that “overlooks” the foreclosure / character side of the mortgage application process in the future as a patch to address the needs of these borrowers 10 years from now, will be in that future, a hindrance to good lending practices. Instead, those borrowers should be allowed to sell with dignity today so they can perhaps buy again tomorrow.

Diverting resources and creating policy that “encourages” lenders to make a deal in a short sale rather than foreclose, will help stabilize prices, will help buyers get into good properties, and will help those outgoing homeowners get their act together so they can consider buying again in 3 to 5 years.

In the meantime, investors will consider buying short sales (once expediently processed), so they can enjoy rental income and then sell to future home owners when things improve, or continue to repair and resell to end-users and other investors as they have. Again, only if they can avoid the pain of the current short sale process.

I’m not coming up with anything that hasn’t been thought of. However, it is time for simple, sensible leadership, NOW.

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OPINIONS WELCOMED

Americor / Vacation Finance Lunches New Lending Product

In Buyers, credit, Distressed Sales, florida, forclosure, foreclosure, government, Home Buyer, Industry trends, Investing, Investor, IRS, lenders, Loan Program, Market Report, miami, miami beach, Miami-Dade County, Military, mortgage, National, Qualified Retirement Plan, real estate, Roth-IRA, second home, Self-Directed IRA, South Beach, Tax Matters, Trends, vacation home, Wenceslao on October 13, 2010 at 7:51 am

Using your IRA to buy Investment Real Estate

Posted: 12 Oct 2010 09:35 AM PDT

Americor Mortgage is launching a new loan program for investors who are buying investment property with their self directed IRA. Our mortgages will be NON-RECOURSE, and the individual does not need to qualify, the property does.

So even borrowers with recent credit challenges, low or retirement income, can get a mortgage through their IRA.

IRAs can buy condos, single family residential, and commercial income producing properties.

Contact Americor-Vacation Finance for more info: info@vacation-finance.com

To learn more about Self-Directed IRA rules visit http://www.IRS.gov

You may also contact Jason DeBono at Entrust Florida (www.EntrustFl.com) at JDeBono@EntrustFl.com who are qualified administrators for Self-Directed IRAs

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