eRealtyInvestors Blog

CA Foreclosures Point to Housing Bottom

noreply@blogger.com (Denton Ward) — Wed, 06 Aug 2008 18:36:00 +0000

Dan Levy and Daniel Taub from Bloomberg News have suggested in their article, "Foreclosures point to housing bottom," that California is well on it's way to reaching the bottom of the real estate market, and is most likely the closest of all 50 states. They continue to explain how bidding wars are common place.

In my opinion, they are right on! In the East Bay real estate market we most often see multiple offers on hot properties.

Please enjoy this article!

Click here to read more

How Low Can East Bay Homes Go?

noreply@blogger.com (Denton Ward) — Tue, 29 Jul 2008 22:53:00 +0000

Years ago, real estate buyers would have never thought that homes in East Contra Costa County would be priced as low as they are today. Homes in Brentwood, Antioch, Oakley, Pittsburg, Bay Point and Concord have reached low low prices. Buyers are finding bargain properties with little or no work needed. With everything on sale, buyers have a plethora of options from which to choose.

But with so many options, and buyers, it can be difficult to have your offer accepted by the banks. These inexpensive homes are receiving multiple offers within the first hours of it being listed. In addition, even though a home may be listed extraordinarily low, the multiple offers are coming in well above the asking price. Banks have realized that listing a property with a lower than market asking price, will entice home buyers to flock to the property. Within a few days, homes have soared past the original asking price and go into contract quickly.

There is talk around the town that home prices will continue to drop throughout East Contra Costa County. That may very well be true…but consider that homes are already reaching a low price point. Homes are beginning to fall into the $110 dollar per square foot range. When a home is being sold for that price per square foot, there really isn’t much room for it to come down in price. That is not an absolute statement, but it’s normally true. Furthermore, while foreclosures continue to flood the real estate market, trends do not show a slowdown into the future. Banks will more than likely continue to take on more inventory and keep cutting deals on their properties.

As a home buyer, this is one of the best, if not the best, times for you to purchase a home. Rates are considerably low, first time home buyer programs are outstanding, and there is tons of inventory available. While inventory levels remain saturated, it does not mean that buyers can wait on the sidelines. The best deals out there are getting multiple offers within hours of putting it on MLS. The point is, if you are planning on getting a deal, be prepared to act quickly.

Narrow down where you would like to purchase a home. Either the community, neighborhood, street, area, whatever is important to you. Once you do that, work with a reputable Realtor or real estate agent to find you the deal of a lifetime. Act quickly, and the next one just might be yours! We may not be at the bottom, but it sure would feel good to know that you bought near it, instead of on the upswing.

Indy Mac May Be Investigated for Fraud

noreply@blogger.com (Denton Ward) — Wed, 16 Jul 2008 23:22:00 +0000

By now, almost everyone has heard of Indy Mac failing on Friday, July 11, 2008. Reports are saying that investigative measures are being considered. Oh, what a blessing!

Let me explain...

When real estate was hot, mortgage brokers and lenders (really real estate professionals) were your best friend. They were your doorway to riches and home ownership. Almost everyone you knew had "the best" agent, or new of one. However, that was mainly because everyone knew they could get a deal or two under their belt when lending guidelines were laxed and real estate prices were booming. Now-a-days, real estate agents are jumping through hoops to regain the trust they lost so easily (okay, not all agents, but the "agent" in general).

If Indy Mac's roots are investigated for falsifying documents, it may help clean up the real estate agent persona. To be honest, when real estate was hot, a real estate license was really a "license to steal." Mortgage brokers and agents were able to charge ridiculous points to get people into a house. When they falsified mortgage applications and income statements, there were doing injustice to more than just themselves, but to shareholders and depositors across the globe.

Once the mortgage mess settles, and real estate (on a national level) goes back to a normal state, will mortgage brokers and agents be redeemed from their corrupt counterparts. Indy Mac officials, employees, whatever their "title," I hope...have another thing coming.

Who's Your Bird Dog?

noreply@blogger.com (Denton Ward) — Tue, 17 Jun 2008 23:23:00 +0000

In today's real estate arena, investors are looking for that bottom dollar deal. Okay, let me rephrase, investors are always looking at the bottom dollar, but with the talk of foreclosures and bank owned properties, people are seeking the deal of a lifetime. Today it seems as though people are doing a lot of searching for these bottom dollar deals, when instead they could have a "bird dog" do it for them.

Bird Dog: informal. a person hired to locate special items (or real estate)

If the average investor could hire a trusted bird dog, they would be able to spend less time searching for properties and more time "researching" them. Instead of scouring the internet for probable investment properties, you would have someone, or some company, working for you. By leveraging their time, you would create more time for you to investigate the potential each property has in your real estate portfolio.

Whether that time is used for crunching numbers, investigating long and short term real estate trends or analyzing demographic growth, you would be more efficient in your decision making process. However, it's not suggested to make uninformed decisions or act more quickly than normal, that is beside the point. Working with a bird dog will help you find the right investment for you.

Finding a trusted and well established bird dog is not always difficult, but finding one that works for free is. However, eRealtyInvestors could be the answer you were looking for. They don't charge a fee, they have located, tried and tested real estate markets spread across the U.S., and they will help you along the way.

The point of a bird dog is to maximize your time by leveraging another's. See if eRealtyInvestors can help you find what you've been looking for.

Is Property Management Right For You?

noreply@blogger.com (Denton Ward) — Fri, 06 Jun 2008 23:13:00 +0000

Real estate investors are either turned on or off about becoming a landlord. For the most part, there are two ways to go about property management. You can choose to do it yourself, or you can pay someone. Both options have pro’s and cons.

Self serving property managers tend to enjoy the excitement of getting their hands dirty and being in on all the action. Whether it’s finding a tenant, fixing the stove, replacing the water heater, or even weekly lawn maintenance, this investor is there. Likewise, being your own property manager involves a lot of time, work, and sometimes stress.

While self serving property managers are doing all the work, the passive landlord tends to take on the less hands-on approach. Typically, passive landlords pay a professional property a monthly percentage fee to manage their property. The monthly percentage paid to the property manager will pay for them to fix a problem or to evict a tenant (unfortunately, it does happen). Often times, real estate is purchased in distant cities or outside the investors home state. Trying to be an active property manager is difficult when you are 3,000 miles away from your property.

In both cases, determining which investor you want to be is up to you. Let’s look at the pro’s and con’s of each:

You are the property manager:

Pros

Choose tenants
Repairs
No added fees
Direct control
Save money

Cons

Time
Stress
Not a professional (expertise)
Rules and Regulations
Liability

Hiring a property manager:

Pro's

Time
No emotions
Professional
Sleep at night

Con's

Monthly fee
Tenant approval
Repair costs and time

Take a minute and see if you can think of anything else not on this list. If it applies, I will add it to the list. Leave a comment below to add to either list.

Looking at both lists, they are almost a mirror image of one another. Being your own property manager saves you money, allows you to choose your tenants, and you have direct control over your property. However, you may receive calls in the middle of the night from your tenant who has a water heater that broke, or that the septic tank has overfilled, or that the roof is leaking from the rain. Situations may occur where to have you evict a tenant. Be aware of eviction laws and proceedings to stray yourself from lawsuits. That is the last thing people want to deal with. Plus, how do you deal with people in general? Are you willing to let people pay you late? If so, be sure to settle between landlord and friend.

On the other hand, when hiring a property manager, many of these issues are not a factor. Even though a monthly fee is taken in consideration for their services (whether something happens or not), it is considered to be well worth it by many passive property managers. Taking this route can lead to many more nights of sleep knowing that if any problems arise, they don’t have to get out of bed and drive to the investment property. Or, what if you are a lousy property manager? Aren’t you glad that you hired a professional who starts the eviction problem on your house on the 10th day of the month? For a hundred or so dollars a month, professional property managers will manage your property for you.

Before you consider becoming a property manager, or hiring one, print the Property Manager Checklist. It will help you understand the quirks of professional and effective property management as well as outline what is expected in the job performance.

Many investors will agree that hiring a professional is easier and more cost effective than to try and become a professional themselves. Leveraging time, money and expertise is how successful real estate investing happens. Before your next investment property purchase, consider if you are fit to be a property manager. If not, consider hiring a professional (not that you won’t be good…). The opportunity cost of hiring a property manager may outweigh the monetary costs to managing your own property.

Cash on Cash Return Formula & Example

noreply@blogger.com (Denton Ward) — Tue, 03 Jun 2008 16:22:00 +0000

Investors often refer to a cash-on-cash return ratio while evaluating income property. Cash-on-cash return is normally a simple calculation and does not take into account appreciation, depreciation, or tax benefits. Investors generally use this quick and easy formula to determine cash flow potential, as well as if a property is underpriced.

Example

Joe Investor is considering purchasing a four plex with a purchase price of $285,000. When all four doors are rented, Joe will receive $3,200 a month in rent. However, to purchase this property, Joe must invest $65,550 (including downpayment and closing costs). Fully rented, this four plex will cash flow $1,067 per month. Joe’s cash on cash return would be 19.5%.

Real Estate Investing Webinars Now Available!

noreply@blogger.com (Denton Ward) — Wed, 28 May 2008 21:23:00 +0000

eRealtyInvestors has chosen to host online webinars for their investors. Seemingly, it makes the busy professional more inclined to learn more about real estate investing from the comfort of their home, business, or even while on vacation (must have internet connection).

Please refer to http://www.erealtyinvestors.com. eRealtyInvestors also holds in person real estate investing workshops in San Diego, CA and Concord, CA.

Instant Gratification Leads to Impatient Investors

noreply@blogger.com (Denton Ward) — Fri, 16 May 2008 18:06:00 +0000

Today’s lifestyle promotes people to receive instant gratification. Whether it be starting up the gas fireplace with a flick of the switch, or popping food into the microwave to sit down and watch your favorite recorded shows while skipping past the commercials. Of all things we can think of, unfortunately, real estate does not work that way.

Remember back in the 90’s when we had dial up internet? It took over 5 minutes sometimes to load pages. Could you imagine waiting that long to look at the weather, check your email, or even look at real estate listings? Google and Yahoo! take only milliseconds to find hundreds of thousands of results now. Shoot, back then it was easier and faster to wait and watch the news to hear the local forecast! Ok, maybe not, but with all the creative inventions and time saver products that are out there in the world, there is not a way to speed up time to make money in real estate.

Effectively building wealth takes time. There are no cheat codes for money, health, winning poker hands, and glamour in life. Wealth is not something you can turn on and off with a remote. It doesn’t happen overnight unless you inherited money from a rich uncle or you won the local sweepstakes. Considering the alternatives to making it rich overnight in real estate, you have rampant appreciation and flipping homes.

As a real estate investor, it is not only incredibly difficult to ride the appreciating wave or make it in the flipping game, but these niche investments take time, dedication, and precision. One minor calculation or market change, and the investment could be toast. Let alone if you put a few eggs in one basket. Comparing gains from losses in most speculative deals, if it were as easy as everyone said it was, why isn’t everyone rich? Easier said than done, right?

While looking at flipping houses and following the appreciating markets, there really are not many “wealthy” people who made their money flipping homes. Yes, most successful people have made their money in real estate, but they did so by not selling their equity. Holding real estate is part of true wealth, where your total assets (things that make you money, not just money alone) make more than your total liabilities (things that cost you money).

Over time, wealth can be achieved by any investor. Success rates can be attributed to the types of real estate markets that people invest. Area’s that forecast above average growth are markets that can yield better returns. Let your wealth gratification build with time. As much fun as it would be to create wealth overnight, for the majority of people, it is impossible and irrational. Furthermore, until Google, Yahoo! and Microsoft create a time machine, you should quit thinking of the get rich quick real estate investments, and begin building your wealth. Every day you keep looking for that killer deal is another day you could have added to your wealth creation. A day at a time seems like forever, but your payday will be here before you know it.

What’s The Big Deal With All The Deals?

noreply@blogger.com (Denton Ward) — Wed, 14 May 2008 22:55:00 +0000

Most people agree that buying something under priced is the name of the game. How much fat can you trim before you start getting to the muscle, bone, or until it’s severed off? Time will tell with today’s talk about foreclosures and REO's. Everyone I run into asks if they saw this week’s list of sold foreclosures. Or if I saw the latest listed properties that are priced so low, people are offering more than the asking price to purchase the property. Has it ever dawned on you that the banks understand the deal with deals? Price them low enough and people won't be able to resist the deal, bailing them out of the mess they created for themselves.

I have seen them. I have heard about them. I have thought about what those people are actually buying, and I figure that people are glad because they got a deal. The deal made it fun, not the fundamentally sound choice for purchasing, or the likelihood of the returns that property will make in time to come. Like Louie has said before, “When you go to Macy’s and the signs say 40% off, what does that really mean? It means that you are paying 40% less of the marked up price.” In other words, how much was that marked up in the first place?

Looking at home prices throughout the East Bay Area within the last few years, the markup was incredibly high. Although prices are becoming affordable again, the homes that are marked way down, even though they are still overpriced, are like the clothes you find at a Goodwill store. No one else wanted them so they get rid of the inventory at below clearance prices.

Be weary of missing fixtures, dead landscaping, broken windows, or holes in the wall because often, this is what people are buying. So the big deal about today’s deals is that you got a deal. The deal is to say to one another, I bought this home for only $__ thousand dollars is all most people can brag about. On the other hand, this is the correction of the over valuated housing market. And, it has provided some good buys for the few smart purchasers.

The point of all this is that don’t buy a foreclosure to say you’ve bought a foreclosure. Make sure the bank owned property fits your need; financially and not emotionally. Be sure that the property fits comfortably within your lifestyle and tolerance level. I sure know I don’t want the deal in one of America’s ghetto’s for $135,000…I can tell you that much right now. That might be a steal, but I don’t know if I would want to go there and sleep, let alone visit. Consider what you are buying, what you intend to do with the property; and if you have the tolerance to put up with your “deal.” Sometimes a deal isn’t the deal you’re looking for. Be selective and find the right purchase for you, albeit a new home, one a few years old, or a REO/foreclosure.

Friends, Family and Investing Don't Always Make A Good Combination

noreply@blogger.com (Denton Ward) — Mon, 12 May 2008 23:47:00 +0000

Horror stories tend to come up when people say investing, friends, or family in the same sentence. Okay, maybe its not that general, but most of us can say we have heard a story where investing with friends or loved ones went awry. Shoot, just look at Paul McCartney!

While getting together with those closest to us, we talk about investment opportunities and how great it would be to go into them together. Everything pencils out nicely and the commitment on the good ole’ fashioned handshake begins the new venture.

Before getting caught in the exciting thrill of a new investment, with real property or not, make sure you have a binding contract that spells out what is to happen when. A properly written agreement will ensure a peaceful exit of the investment opportunity, successful or not. Ventures dealing with substantial financial investment can often turn sour when forcasts and opinions conflict. Most importantly, a handshake will not hold up in court, so be sure to not only trust your partner but require all the interested parties (including you) bound to some agreement that you originally had planned. I figure that anyone worth going into business with would not mind spelling out who is to get what, at what point, and for how much initially, so on and so forth.

Like Paul McCartney, he unfortunately did not make a wise choice as he lost over $48 million to his now ex-wife. I don’t think Heather Mills contributed much to McCartney’s $800 million estate…but who really knows? Maybe she was a background singer, off camera and off stage…or singing at home even???? Oh, that’s right…she was there for moral support! (I do have to say, look at her return on investment….$48 million through only 9 years of marriage! Not too shabby)

The point of the example above is that even those that you love, at least at one point or another, can take advantage of you. Consider speaking with an attorney to see how you and your close business partner/friend should approach your venture. Having partners in a real estate deal should not be excluded.

Mortgage Relief Act of 2007

noreply@blogger.com (Louie LeLaurin) — Fri, 09 May 2008 22:46:00 +0000

What is the Mortgage Forgiveness Debt Relief Act of 2007?
It was enacted on December 20, 2007 and allows homeowners to exclude income realized as a result of modification of the terms of your mortgage, or foreclosure of your principle residence.

What changed?
In the past debt that was forgiven or cancelled by your lender would have been included as income on your tax return, and would have been taxable. The Mortgage Forgiveness Debt Relief Act of 2007 allows you to exclude certain cancelled debt on your principle residence from income.

What about refinanced homes?
Debt used to refinance your home qualifies for this exclusion, buy only up to the extent that the principle balance of your old mortgage, immediately before refinancing, would have qualified.

Does this apply only for the 2007 tax year?
No. It applies to qualified debt forgiven in 2007, 2008, and 2009.

If the debt is forgiven from income, do I still have to report it on my tax return?
Yes. The amount of debt forgiven must be reported on Form 982 and the form 982 must be attached to your tax return.

Can I exclude debt forgiven on my second home?
Not under this provision. Only cancelled debt used to buy, build or improve your principle residence or refinance debt incurred for those purposes qualifies for this exclusion.

How do I know or find out how much was forgiven?
Your lender should send you a Form 1009-C, Cancellation of debt, by January 31 of the year following your debt relief.

Is there anything else I should know?
Yes. Because The Mortgage Forgiveness Debt Relief Act of 2007 was passed so late in the year, the software systems used by tax preparers and the IRS needed to be updated to accept the revised Form 982. This occurred in the first week of March, 2008. If you filed earlier than that and are qualified to receive the debt forgiveness, you should speak with a tax professional as soon as possible about your options. For more information on this topic, log onto www.IRS.gov.

Happy Investing!

Information provided herein is deemed reliable but is not guaranteed. Please consult with an attorney or tax consultant before making any decisions.

Timing the Real Estate Market Can Be Like Casino Gambling

noreply@blogger.com (Denton Ward) — Thu, 08 May 2008 23:42:00 +0000

Trying to time the real estate market is similar to gambling at a casino. You sit around the edge of a table waiting for it to get “hot,” or you wait until someone leaves a slot machine after playing for hours on end. The fact of the matter is, when that table does get hot, you have no where to sit! People who recognized the opportunity began playing well before you, and now you are kicking yourself in the butt for not sitting down earlier.

The same generalization can be applied to real estate. Too many times do I hear investors that tried to time the market and regretting doing so. Sometimes they were not able to buy the property they wanted because someone else beat them to the punch, or because they realized it was going to get hot again a little too late while missing their window of opportunity. Furthermore, we all could say…”If I had only bought 10 years ago” or “I should have never sold that house.” Likewise, the gamble on timing real estate is almost always not worth it.

By purchasing real estate for the right reasons, there really is no need to time the market. When numbers work, they work in good times and in bad. When they don’t, that isn’t the property for you. It really is that simple. Today’s real estate opportunity stems from a mess created years prior. If you are financially healthy today, you can take advantage of the available inventory before everyone else does. If you secure a 30 year fixed mortgage, and the numbers work on the investment property, it will still work 5 or 25 years down the road. Real estate investing can be thought of like a mutual fund. You don’t worry about the short term up’s and down’s, but the upward potential it has over time. The greater benefit to owning real estate rather than a mutual fund is that you have leveraged funds doing more work for you while obtaining tax benefits.

Don’t be the one to sit on the sidelines and say “Shoulda, coulda, woulda.” This time be that person who takes initiative and buys at the bottoming real estate cycle, instead of on the rise. If the property value decreases it won’t hurt your cash flow because you were smart financially and secured a fixed rate loan.

My advice comes from all the stories I have heard about while growing up from people who have kicked themselves in the butt. It is just not worth it. Your reward will most definitely outweigh the risk when you purchase for the right reasons.

Easy Way to Attract Renters: "Wow Them"

noreply@blogger.com (Denton Ward) — Tue, 06 May 2008 22:26:00 +0000

Many of us have all gone new home shopping. Whether or not we planned on purchasing a home, or just wanted to dream about what it would be like living in the well-planned community. Most of us can say we have at least looked.

Remember walking through the model homes and distinctively thinking that one model stood out more than the others. The floor plan was just perfect for a new family. The house was large enough to raise school children in a nice neighborhood near the best schools in town. The master bedroom was large and tucked away from the rest of the house, instilling privacy and silence. The home was built in a growing neighborhood, near shopping and arterial freeways, making short trips to the store or the commute to work easier than ever.

The same things you think about as a home buyer run through renter’s head. Often, the people who rent your investment property will have similar likes and dislikes about the community, floor plan, privacy, and ease of incorporating the new home into their lives.

The next time you consider purchasing an investment property, think of things in a home that are important to you. Did you buy a home in the best school district in the city; county, or even the state? Will people enjoy their front yards with block parties and safe streets, or will people be utilizing that newly sodded front yard with an additional parking space for their run down vehicles? Will your home stand out from others in the neighborhood when it comes time to sell the property? Does carpet or hardwood floors better suit the home? How about it’s durability?

Considering these things can help you purchase a home that renters prefer. Most people make up their mind within 30 seconds of meeting someone. The same goes for homes that people choose to live. As the prospective renter drives up to your home, their decision is already half way made. Now it comes time for the renter to see the inside of the home. Having upgrades like tile instead of vinyl floors can help, along with blinds and, if customary, a rear yard fence. These little additions can make the world of difference for a renter, and the landlord. If anything, the emotional response can revert renters back to your house time and time again. The concepts are not new, not difficult, and most likely will not change for a long time.

When the renter drives up to your property, you want them to say “Wow!” Wow those with a quality home and you will attract a quality tenant.

Fear

noreply@blogger.com (Louie LeLaurin) — Mon, 05 May 2008 23:39:00 +0000

“Of all the emotions that motivate us I believe that fear is near the top of the list. And so it goes with many real estate investors. Personally, fear was what motivated me to invest in real estate. My fear wasn’t “the home is 2000 miles away from my primary residence” or “what if it takes 3 months to rent the home” or “what if the tenants trash the house”. I understood there would be bumps along the way. My fear was that for the first time in my life I realized that my employer was in control of my life AND my retirement- that thought scared the hell out of me! When you approach your mid-forties you think about issues like that (too bad it takes most of us that long). What if I was in my fifties and I was downsized, outsourced or frankly I just didn’t want to do that job anymore? What if health became an issue & I couldn’t work? Bottom line, I needed the income from my job to live and support my family.

“FEAR COMES FROM NOT KNOWING WHAT YOU’RE DOING”
Warren Buffet

After researching different investment ideas I found that investing in real estate would be a good solution to resolve my fear of not having control of my future. The rents I collected would create a passive income stream! Over a period of time those rents could become my income, thereby replacing the income from my job!

Also at that time I realized - 1) that I was in a good financial position so the banks would loan me the money I needed to invest in real estate 2) I had the desire 3) I had all the information available to make good sound investment decisions. At any time my situation could have changed and the banks would not have loaned me the money (looking back it was the banks situation that changed). Like life insurance, you can’t buy it when you need it; you have to buy it while you’re healthy and at that time I was financially healthy. Fortunately I acted on my fear and haven’t looked back. I am now in control of my future”.

“Money lies on the other side of fear”
Gary Keller

This exert is from a newsletter I wrote 2/2007. Back in 2/2007 you could still finance non-owner single family properties with 5% down AND have positive cash flow. Now the minimum down payment is 10%. So, again let me make the same point I made before.

You know what the circumstances are today. If the numbers work, you have performed your due diligence, you have the ability, the desire and the investment fits your long term objective, then buy it. There is not anything to wait for. If you wait there are many external factors that can and usually will arise that will prevent you from making that investment in the future.

Happy Investing!

Economic Stimulus Package: Can We Really Stimulate The Economy?

noreply@blogger.com (Denton Ward) — Fri, 02 May 2008 19:54:00 +0000

From coast to coast people are talking about the economic stimulus payment. The purpose of this gifted money is to help stimulate the economy, right? That is supposed to relieve people of the downtrend economy and aid our view of the economy.

Get real…

Consumers will more than likely spend their money on credit card debt, foreign electronics, fancy food & entertainment, or might even gamble it all away on a Lotto ticket (you never know). Not even considering the additional debt that younger generations are taking on due to this move.

First and foremost, most constituents in the U.S. have accumulated some sort of debt, probably through overspending on credit cards. I would guestimate that a large portion of the monies allocated by the stimulus incentive will be used to pay down credit cards. Ask yourself, “Does this help stimulate the economy?” Not really. Why? Because whether or not the credit agencies receive “principal” payments or not, it will not increase jobs, it won’t help us get out of, dare I say, the recession. They just have more money to lend and some people will save a bit of money on their interest payments to the banks. However, with less money being allocated toward debt, consumers may be able spend more frequently on other goods. But beware, what goods might they buy?

How about a new HD flat panel television? Or a surround sound system, a new computer, or a Playstation 3 gaming console with the Blu-Ray DVD player already equipped. While consumers have created more spending room on their credit cards, do you think anyone might go and buy some sort of new electronics? And if so, price almost always is a major decision in the buying process. Foreign countries dominate in terms of price, quality, and popularity. What brand will you buy?

Next comes food and entertainment. We all could use some fine dining or a fancy weekend get-a-way. This, of all the alternatives, is most likely to help line our fellow American’s with additional revenue. However, the spending will be short lived and temporary at most.

Don’t forget about gasoline prices. As gasoline prices continue to rise, the only one benefiting is the oil companies, who year after year post record sales and earnings. On the other hand, it will pay some fuel bills for a month or so for most people.

If you plan on spending your stimulus money a new bluetooth headset, or those outdoor lights you wanted in your front yard, consider buying something made in the U.S. With millions of people buying American made goods and services, it can help. Stimulate our economy by not blowing it on something that is taking more money out of our country. Through the last few years, we have not retained our capital but instead, have borrowed from other countries. Do your part and help your fellow neighbor down the street. With the right attitude, things can get better. My recommendation: before you go spending your $600 or $1,200, think of ways that actually “would” help preserve our nation’s wealth.

Real Estate and Technology? Do they match up?

noreply@blogger.com (Denton Ward) — Wed, 30 Apr 2008 17:24:00 +0000

While the internet has become a major avenue for businesses and commerce, will it ever take the real estate industry by storm? If so, what implications would it have?

Personally, the internet has made purchasing items easier than ever. Reports by large research companies have stated that most home buyers start their research online. Furthermore, more and more people are beginning to purchase property online.

A big leap of faith for many people, but this is where the U.S. is headed. School test scores, neighborhood testimonials, and reviews by homeowners are written about communities and can all be found online; making a decision about purchasing real estate more personal and simple. Reading information about a particular area has never been so effortless to locate, perform, and execute. As well, people are finding that real estate blogs are helpful when purchasing homes as a home to live in or as an investment.

Realtor.com, Trulia, and other large “media” companies are gaining massive attention by the general public. Consumers are able to view properties based upon personal criterion, which makes these sites attractive. In addition, many real estate agents are packing these websites with their listings, gaining more exposure than on their local MLS. No need to first contact a real estate agent when you can find the home you want online, for free, and aren’t limited to the inventory one agent possesses. Likewise, once you have located some homes, a call to a local real estate agent or investing professional can help close the deal.

Researching and purchasing real estate through the internet is becoming more than a trend, it is fitting the new medium. Some downfalls to purchasing real estate online is that you are not able to physically touch the property before your interest is enticed. People must also rely on the information posted; although we all know some numbers and statements are less than truthful. Moreover, personal interaction is how humans are accustomed to buying products or using services. Finding properties online, and making an education decision about your real estate agent, will bring successful transactions.

The instant satisfaction of Google and Yahoo bringing our most relevant results to us in milliseconds is something not to overlook. Real estate online has become a major influence on home buyers, and will continue to gain popularity into the future. Shoot, the younger generations, no offense to anyone, do most of their daily tasks online. How do you think they are going to look for real estate when it comes time?

Last laugh

noreply@blogger.com (Louie LeLaurin) — Wed, 30 Apr 2008 00:13:00 +0000

Global warming, the Iraqi War, the presidential elections, the cost of gas, recession, food prices, the mortgage meltdown, foreclosures, terrorism, taking the kids to soccer practice, swim meets and so on and so forth…

With all these issues to deal with on a daily basis who in the heck has the time or wants to think about investing in real estate? But then, by being paralyzed by all the crazy news, and not doing anything: that becomes your plan. Is that a good plan?

Everyone likes to talk about real estate. Read the papers and listen to the news every day. It is always in the headlines. It apparently is one of those subjects that people like to discuss. Sort of like the New York Yankees or the Los Angeles Dodgers. I will watch those two teams not because I like them, but because I want to see them loose!

I think the same is true with real estate. If you don’t own it or never invested in it you enjoy hearing and reading about it being in the tank. In many areas, like the two coasts, Arizona, Florida and Nevada, it is in the tank. It makes you feel good because all those evil real estate investors are “getting theirs”. But you know what; those evil real estate investors will be fine. They are investors, and investors bought their properties with the proper financing, for the right reasons and financially didn’t over extend themselves.

Real estate investors will have the last laugh. 20 years from now their properties that are in the “tank” today will be worth considerably more, how many times have you said “I should have bought 10 of them? How much more will they be worth? It’s hard to say, but across the board in the U.S. over the last 40 years, real estate has appreciated at an average of about 6% a year. Example - if you paid $170,000 in 2005 for a rental property and it appreciated at an average of 4% a year for 20 years, in 2025 it would be worth $451,060. But, just to be real conservative lets say it was only worth $370,000. Let’s say it only cost you $20,000 out of your pocket to close escrow. This is a bad thing?

The best part is the people today that are laughing and enjoy seeing the real estate market down (because they were smarter than everyone else); they are the same people that will have paid off my mortgage for me. Who will be laughing then?

Happy Investing

Quick Tip to Minimizing Vacancies | Buy Rent Ready Homes

noreply@blogger.com (Denton Ward) — Mon, 28 Apr 2008 21:34:00 +0000

One of the biggest fears people have before buying rental real estate is not being able to get the property rented. Consistent vacancies can diminish returns and cost investors money out of pocket. Luckily, here is a quick tip to minimizing your risk of vacancies.

Make sure the home is rent ready!

One may ask, what does rent ready really mean? I have heard of this, but I do not fully understand the term.

When someone refers to rent ready, they are stating that their property has amenities that renters want. Each local market may call for different amenities to be considered rent ready. While there is no cut and dry answer to what is and what is not rent ready, here is a list of common items, appliances and upgrades that renters look for when browsing new single family homes.

Refrigerator
Washer/Dryer
Rear Yard Fence
2" Wood Faux Blinds
Screened Porch
Patio Covering
Ceiling Fans
Microwave

There are certainly some items that can be added to this list that were not included. Sometimes a rear yard fence is not customary for the neighborhood, so it would not be a good idea to install one. Enclosing the property in a fence can sometimes be seen as a offensive gesture; unless dogs are inhabiting the property. A washer and dryer can create maintenance issues, but having them in some instances can make your home more desirable. Screened enclosures are only needed in certain parts of the nation. The point is that each area in which you invest may or may not need some of the items listed above.

By including many of these amenities, your home is ready to be rented (hence, rent ready). Renters appreciate a landlord (not always) who provides these fixtures and appliances. In addition, eRealtyInvestors negotiates with builders to provide these items in the sale price of the home.

Setting your investment property apart from the competition is the name of the real estate investing game. Set your next property apart from the rest by equipping it with a rent ready package.

Housing Seems Bleak: Bleak Means Opportunity For Smart Investors

noreply@blogger.com (Denton Ward) — Thu, 24 Apr 2008 15:48:00 +0000

The nation’s housing and economic outlook seems grim for the rest of 2008, and even into 2009. Home prices have deflated throughout 2008, correcting themselves for the irregular appreciation they had earned in years prior. In appropriation with income levels, homes being sold are now again more affordable.

According to Realty Times “Good Time to Buy, But Money’s Tight” video news clip, a survey by Reuters/Zogby noted that over 53% of Americans feel that “now” is a good time to buy a home. Another study by the Associated Press and AOL shared that over 60% of people believe that home prices are favorable. However, the Associated Press noted that over 60% of those who agreed home prices were becoming favorable will not buy homes within a two year period.

As a smart investor, one must come to realize when opportunity strikes, take advantage! Most people believe that their local housing market is showing more favorable signs of real estate prices, they agree that the time to buy is now, yet they do nothing! Unfortunately for them, that is a salivating investor’s dream come true.

People aren’t purchasing homes because they are not able to qualify; they follow the heard, and they don’t listen to their instincts. When these same people who are on the fence now begin to buy, the bottom will well be past them and then they will be kicking themselves in the rear after they tried to “time the market.”

Timing the market is extremely difficult to do and happens mostly with luck. We have all made mistakes purchasing items before in the past. Like that printer you bought that went on sale the week after, or how your tickets to Hawaii were $500 more than the week “before” you bought them online (although there are not too many flights there anymore…). Point being that timing the market is mostly luck, and when you are investing in real estate, you should be buying with a strategic game plan, an exit strategy, and in markets that possess the necessary fundamentals to achieve your goals.

If you are planning to buy and hold property, sitting on the sidelines is not going to make it any better. Waiting for the bottom of the market could pass you by while you are in escrow, while you are talking to a real estate professional, or while you were sitting on the couch reading all the “good” news about the real estate market. To be quite honest, if you are hearing good real estate publicity on the major networks, then the bottom is clearly gone and you can only try to hold on to the next part of nation’s housing cycle.

Control your future today, because nobody knows what tomorrow will bring!

The view from above

noreply@blogger.com (Louie LeLaurin) — Wed, 23 Apr 2008 21:55:00 +0000

In the last 4 months I have been in Florida, Texas, California, Arizona, Tennessee, Oklahoma and Alabama. I have not been everywhere in these states, Texas alone could take 4 months, but I have traveled enough in these states that I get the idea.

It is especially interesting to be able to see the ground from above. Recently while flying into Phoenix, AZ you could see the results of their real estate bubble. On your decent to land, miles and miles from the center of town, you will see ground that has been prepared to build, but no building has been started. Then, you’ll see ground that has been prepared to build with roads completed and a few homes here and there. Then you will see subdivisions about ½ completed and then closer to the center of town you will see completed subdivisions. (It reminds me of how you tell the age of trees; by their rings). Put a pin in the center of Phoenix, draw circles going out from there and you can almost tell the year a subdivision was build. I’ve noticed a lot of the same as I fly into and out of different towns and cities in Florida, California and Nevada.

But then there are other cities I fly into and I don’t see the same. As an example Tulsa, OK. From the air I didn’t notice empty subdivisions. Not even subdivisions that are ½ completed. Tennessee isn’t too bad, nor is Alabama or Mississippi. Texas is growing in every direction possible. I suppose that is why the real estate markets in many of the Southern towns aren’t experiencing the same big downturn many cities are in the west are experiencing. The real estate markets in those cities weren’t driven by speculation and therefore the supply and demand are more in balance.

I guess it just proves the old saying that the three most important aspects of real estate are location, location and location and that real estate is local. If you buy for the right reasons and hold for the long term, whether it is an investment or to live in, you will be just fine.

Happy Investing

Closing Cost Credits Can Save You Thousands...And Help Your Cash Flow!

noreply@blogger.com (Denton Ward) — Tue, 22 Apr 2008 23:14:00 +0000

Financing investment properties is how most people invest today. While lending guidelines have become more stringent, buyers with good credit, money in the bank, and those that are financially healthy are setting themselves to reap the benefits of tomorrow’s real estate market.

While investing in real estate, locally or out of state, be sure to ask for closing cost credits and other seller concessions the builder is offering, but may not have told you. Most builders are able to credit buyers with some concessions, whether it is a flat amount or some percentage of the total purchase price. Either way, take advantage of what the builder will offer because it could hurt your cash flow and your return on investment. By not asking for these incentives, you may be spending more money out of pocket than you planned on; or more money than you had to really.

One good way to take advantage of seller concessions is to use it for an interest rate buy down. Non-owner occupied interest rates are considerably higher than owner occupied because banks and mortgage companies have been hit hard by the rising foreclosures. Because mortgage rates for non-owner occupied housing have become more expensive (although still quite low compared to historical data), it is beneficial to use the 2% seller concessions on buying down an interest rate.

Deducting the sale price of the home using closing cost credits will minimally help your monthly cash flow and your return on investment. Personally, financing an extra two or four thousand dollars over a 30 year term (or your holding period) will cost you peanuts compared to the gains you will possibly experience.

Your closing cost credits can also be used for blinds in the windows, for a refrigerator, or washer and dryer (if customary for the area), whatever you may need to make the home “rent ready.” Making your home rent ready will help your prospective tenants decide to rent your house among various others because of the added amenities. Best of all, by receiving the additional closing cost credits you may not have to spend extra money out of your pocket to acquire these appliances or fixtures!

Closing cost credits will save you thousands of dollars out of your pocket and help you achieve your goals while real estate investing.

Happy investing!

Investing in Real Estate vs. the Stock Market

noreply@blogger.com (Louie LeLaurin) — Mon, 21 Apr 2008 20:47:00 +0000

I have been investing in real estate and the stock market for a number of years. I have had many discussions with friends and colleges about which type of investment is a better long term investment.

I tend to lean towards real estate as being the preferred investment simply because of the power of leverage. I can invest in a $200,000 home with only $25,000. If it averages 6% appreciation my $25,000 earns 6% of $200,000, not just the $25,000 I took out of my pocket. If I invest $200,000 in the stock market I will need to need to take the entire $200,000 out of my bank account. The link below is to an article in the Contra Costa Times newspaper today. It is written by a retirement planner comparing investing in real estate vs. the stock market. Surprisingly it makes a good argument for real estate. This must have been painful for him.

http://www.contracostatimes.com/business/ci_8976904

There are times when I wish I had never invested in real estate. You know, when rental homes are vacant (my wife hates writing those checks), a home needs repairs, you have to evict tenants and so on. Occasionally, my frustration will lead me to an exercise of computing if I made the right decision to buy that home vs. what if I would have invested the money it cost to buy that particular home in the stock market. The end result is always I made the right decision to buy the rental property. (It also helps every year when I receive my taxes back from my CPA – no other investment offers close to the tax benefits that real estate does).

Remember, investing in real estate is a business. As with any business there are costs associated with it. Don’t loose site of the end result. It will be worth the bumpy ride.

Happy Investing

Cashflow Analysis Tool's

noreply@blogger.com (Denton Ward) — Mon, 21 Apr 2008 04:50:00 +0000

eRealtyInvestors is days away from completing their on-line cash flow analysis tool available to the general public. Investors often do not know all the underlying factors involved or needed when seeking investment opportunites. Even more of a reason that eRealtyInvestors free online cash flow too will help users find properties that cater to their investing needs.

With this tool, users will be able to get a snapshot of a property with current and accurate information. Many times companies provide a cash flow tool, but figures are left blank which do not show a true cash setting for the property at hand. However, we understand how important it really is while going through the initial setup of purchasing out-of-state real estate.

Take a minute to browse our new website and hopefully you will have access to the new cashflow analysis tool. It is really slick and useful.

Visit eRealtyInvestors

Happy investing!

Investing Was Never Soooo Easy

noreply@blogger.com (Denton Ward) — Mon, 14 Apr 2008 22:06:00 +0000

While subscribing to many different real estate authors, I found this post to be quite informative of the 2008 real estate market. People during the late 90's just into the new millenia thought that was "typical" real estate market. Unbeknown to them, real estate is quite cyclical and the ease of lending helped shape the real estate market from years prior.

Nonetheless, people have begun to walk away from their personal and investment properties creating floods of inventory. While foreclosure rates actually remain quite low (although some areas like the Central Valley, CA and parts of Florida) people are losing their butts on mistakes they made 2-8 years prior.

Greed must have come over them with all the $$ signs. I guess some people don't know where to stop, sort of like gambling. Oh well, this post by Bigger Pockets blog should help clarify what exactly I mean.

Enjoy!

Brave New (Real Estate) World

Welcome to eRealtyInvestors Blog!

noreply@blogger.com (Denton Ward) — Tue, 25 Mar 2008 22:09:00 +0000

eRealty Investors is proud to announce their new blog!

Keep checking back for tips on real estate investing, opportunities, and local market data. In addition, we strive to write about current topics and useful information all relating to real estate investing.

If you have any ideas you'd like to share, or would like to add content, feel free to contact us.

Happy investing!

Denton Ward