Six Ways Investing in Real Estate Can Save You Money

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.

15 Ways to Prep Your Multi-Family Building Exterior for the Spring Market

Spring is the season for rain, sun, flowers and humidity buildup. It is also the season buyers and sellers traditionally come out of hibernation. It is a time when folks turn to spring cleaning, regardless of whether they are selling their property or not.

However, if you are in fact, looking to sell, you will definitely want to pay close attention and properly prepare. This article will hopefully, help you get started and get you to a fast closing that nets you the most money in your pocket, ready to enjoy, retire other debt or reinvest.

As I flip channels and sometimes watch a particular product they may be selling, particularly jewelry, I notice that ‘shine’ is critical. I also notice the effect I feel when I walk up to a car dealership that keeps its cars sparkling clean versus when I walk up to a car that seems poorly maintained.

Similarly, I notice what I feel when I approach a property. As I walk through it, I notice the big and little things that say WOW. The question is, what follows that “wow”? Is it, wow this is great or is it, wow this needs a lot of work!

As rents climb or stabilize, buyers are watching for opportunities. Your job as a seller is now to convey the message to the buyer that your property has been well taken care of and that it will provide a handsome return and that it is therefore, worth their investment.

The tips below will cost little money and could go a long way to convey the right perception that attracts buyers to make an offer. Even if you are a distressed seller, the more appealing your property looks, the higher the perceived value and the more money you could net.

With this in mind, here’s how to get the exterior of your building shipshape so it tell buyers, “yes, this is a good investment”:

1. Clean the glass covers of all light fixtures and make sure to remove all bugs. Also, replace any broken or missing glass covers. Make sure they all match. If not, replace them all to match and improve the look of the fixtures.

2. Replace missing or burnt bulbs. Consider replacing every bulb with bright white energy efficient bulbs. They brighten up the common areas making it more appealing and saves energy while helping deter crime.

3. Clean or replace mailboxes. Busted mailboxes often convey a sense of neglect.

4. Clean or paint all doors and frames and replace or polish their hardware so they all match throughout.

5. Make sure the building address number and each unit number are clearly visible and neat.  You may also want to consider replacing them for a clean look.

6. Make sure all stairs, hallways and stair guardrails are clean and/or painted as needed.

7. Wash all windows and seal them right to avoid water leaks while improving energy efficiency. See that tenants cooperate by keeping old tape used during a prior hurricane watch or warning and even odd window coverings, off windows.

8. Make sure to pressure clean parking areas and that they are swept clean. If necessary, cover driveway and parking areas with a fresh coat of tar. Check that all parking stoppers are painted and if appropriate, labeled.

9. Rake the lawn and ensure all green areas are trimmed.  Use fresh mulch or stones accordingly to cover patches, driveways and other areas. Plant fresh flowers or plants if possible. These are often inexpensive and greatly ‘green-up’ common areas.

10. Clean all debris from gutters and drain spouts and repair or replace them as needed.

11. If there is a community barbeque, be sure to clean it thoroughly and wash down the lid if there is one.  Replace a worn cover if needed.

12. If there is a community swimming pool, make sure it sparkles. Treat or repair any surrounding pool ground area that isn’t perfect.

13. If there is patio or pool-area furniture, make sure it is clean. Remove or replace any broken pieces.

14. Check your roof and make sure to repair or replace any missing or damaged shingles or tiles. Make sure to apply a sealant to flat roofs. Even if it does not seem necessary, this is a small expense compared to what a poor roof inspection result may represent.

15. Paint. Although this could be the costlier of the cosmetic preparations, I can’t say enough about this, especially if the building has not been painted for 3+ years. When it comes to selling, remember, ‘sparkle’ is key and nothing sparkles more than a fresh coat of neutral color paint. Make sure it is properly done and that cosmetic cracks are patched prior to application.

Now, go ahead and comment on any of the above or add your own to the list.

As a buyer, what items do you look for when you walk through the exterior of a building you are considering?

Also, as a buyer, HOW is your offer price affected by either a positive or negative impression you experience while walking the exterior of a property? How much more or less would you offer be as a result of your experience?

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

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.

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

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.

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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.

So…What is a Short Sale?

Whether buying or selling, knowing what a Short Sale is and how they work can help you through the process. In this article, I will concentrate on helping home owners in distress explore this very important alternative to foreclosure.

A short sale can be an excellent solution for homeowners who need to sell, and who owe more on their homes than they are worth. In the past, it was rare for a bank or lender to accept a short sale. Today, however, due to overwhelming market changes, banks and lenders have become much more negotiable when it comes to these transactions. Recent changes in corporate policy and the Obama administration have also improved the chances of getting a short sale approved.

But to be technical, here’s a more official definition:

• A homeowner is ‘short’ when the amount owed on his/her property is higher than current market value.
• A short sale occurs when a negotiation is entered into with the homeowner’s mortgage company (or companies) to accept less than the full balance of the loan at closing. A buyer closes on the property, and the property is then ‘sold short‘ of the total value of the mortgage.

For homeowners to qualify for a short sale, they must fall into all of the following circumstances:

• Financial Hardship – There is a situation causing you to have trouble affording your mortgage.
• 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.
• Insolvency – The lender will want to see that you do not have significant liquid assets that would allow you to pay down your mortgage.

This seems simple enough, but it is a complicated process that takes the expertise of experienced professionals. Find a CDPE in your area by clicking here. Together, you can identify all possible options and, when possible, a CDPE can assist you in the quick execution of a short sale transaction.

Ignoring your lender and court notices can be very costly over the long run. For instance, many employers may frown on a foreclosure record, including some financial industry, military and positions requiring security clearance to name a few.

Also, selling short can allow you to buy again in as little as two to three years. A foreclosure would stop you from being able to buy again for at least 5-7 years, it stays in your credit report for at least 7-10 years and requires you to answer “yes” to any loan or employment application where you are asked if you have had a foreclosure in the past, affecting your ability to borrow (even if allowed, your rate, down payment and other factors may cost more), or apply for certain employment opportunities.

Even more important, there is the issue of what happens to the short fall. Lenders can choose to issue a 1099 causing “phantom income” that must be reported with your income tax (consult a competent tax expert/CPA to see how this may affect you), or a deficiency judgment.

A deficiency judgment is an injunction against you the lender obtains from the court that allows them to pursue you for the shortfall (consult with a competent real estate/bankruptcy attorney for possible solutions), possibly stretching this difficult period beyond the foreclosure date.

Although either is also a possibility with short sales, the size of the short fall is usually mitigated during a short sale, where a foreclosure typically leads to bigger shortfalls. This means that allowing the property to be foreclosed, may cost you more in the long run than if you were to work with a team of competent experts to sell your house ‘short’.

For more information and to explore this option to foreclosure CONTACT US today.

Frequently Asked Questions About Foreclosure

It is understandable to have questions when coping with a new and challenging situation, especially when a home is at stake. The reality is that millions of homeowners across the country are finding out that they have more questions than answers.

We hope that the following information will help you better understand the circumstances. If you have further questions not addressed below, or would like additional information 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):

• Loss Mitigation
• Mortgage Modification
• H.O.P.E.

Prior to contacting your mortgage lender you can quickly complete an eligibility test at www.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

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Locate a CDPE in your area for an evaluation of your individual situation, property value, and possible options.

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If you or someone you know and love is facing this difficult challenge, make sure to Contact Us. 7 our of 10 foreclosures happen because the borrower (home owner), did not seek proper professional advise from experts dedicated full-time to helping folk find ways to overcome this challenge. Get the answers that suit YOUR needs, today. Get more answers at http://www.cdpe.com/faqs

Beacon Economics: Housing most affordable in more than 40 years

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®

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Open Letter to Obama and Congress

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

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

MILITARY: NAR’s HouseLogic Launces effort to help You

NAR’s HouseLogic launches to help military families WASHINGTON – Oct. 12, 2010 – The National Association of Realtors®’ (NAR) HouseLogic launched Operation Home Relief, a Facebook campaign to increase awareness, rally support and raise funds for USA Cares, a nonprofit organization that provides counseling and financial foreclosure assistance to post-9/11 active duty U.S. military service personnel, veterans and their families.

HouseLogic – a free, comprehensive consumer website about all aspects of homeownership – will donate $1 to USA Cares every time someone “likes” the Operation Home Relief Cause page on Facebook and will match individual donations made to the cause, up to $20,000.

“HouseLogic’s Operation Home Relief aims to help sustain homeownership for military families who have already given so much to support our country, and we hope others will join together with us to support this worthy cause,” says NAR President Vicki Cox Golder.

HouseLogic’s Foreclosure Guide highlights personal stories and offers information and tips to help homeowners facing foreclosure make smart, proactive decisions about what steps to take, where to find help and the alternatives to foreclosure. The guide also includes ideas for how others can get involved to combat foreclosures in their community.

“U.S. military service members bravely face danger around the world every day on behalf of all Americans. Yet, some military service members and their families also face financial dangers and hardships at home,” says William H. Nelson, executive director, USA Cares. “USA Cares’ sole mission is to help these service members and their families in their time of financial need. To that end, we’re excited to have the support of HouseLogic and the National Association of Realtors. Their new Facebook Causes campaign highlights the work USA Cares is doing, reminding Americans of the many challenges faced by U.S. military service members and their families, and generates support via Facebook for the help that we’re offering every day.”

For more information on sustaining homeownership, and many other housing topics, visit HouseLogic at www.houselogic.com.

Reprinted by Permission: © 2010 Florida Realtors®