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Posts Tagged ‘Real Estate Investing’

Up until 1996, home values appreciated at about the rate of inflation. Then, the housing market changed. External factors caused homes to appreciate at exorbitant values. People began to believe that real estate had changed, that equity could be gained just by owning a home for a few months. That theory crashed quickly when the housing bubble popped.

Many potential buyers are fearful of buying because they believe real estate values may continue to drop. While that might be true for some areas, there still are several advantages of buying your own home as a long term investment.

Most people look at a real estate purchase from the perspective of the monthly payment, not from the perspective of the value of the asset, and monthly savings it will provide once it is paid off. 30 years is so far away, it doesn’t seem like you’ll ever actually “own” the home. Most people refinance their homes several times during the course of the loan, and usually with an additional 30 year fixed loan. This just postpones the payoff date.

There is a huge but often neglected benefit to buying a home. Eliminating the monthly housing payment. The house payment is the single biggest monthly expense for most Americans. If you didn’t have to make a mortgage payment, how much monthly income would you really need to have?

Mortgage terms shouldn’t, and don’t have to be 30 years. Mortgage interest rates are currently at their all time lowest rates. Home affordability is the cheapest its been in years, and many can actually afford to buy a home with a 15 year loan, rather than a 30 year fixed mortgage.

15 year mortgage loans aren’t the only way in which to pay a mortgage off early. If your interest rate is already really good, and you don’t want to pay the up front costs of refinancing, then simply add additional principle to your monthly payment. You can add extra each month, or make additional monthly payments. By making mortgage payments every four weeks rather than monthly, you can cut 7 years off your 30 year mortgage.

The sooner a house is payed off, the sooner most people can retire. The sooner you buy a house, the sooner you can start paying it off. The all time low interest rates make it a great time to buy, even if home prices see slight declines in the near future.

It is currently a great time to make an investment in real estate as your primary residence. To search homes for sale in Baltimore, visit Homes for Sale Baltimore MD

Recently, Bank of America sent out close to 100,000 solicitations to distressed homeowners offering them a chance at a deed-in-lieu transaction. “Deed-in-lieu” means giving the deed to your home to a lender in order to circumvent the foreclosure process. You get to walk away from your house, and the lender states the debt resolved because you returned your collateral. Many lenders have announced that they will offer a variety of incentives for this type of transaction because it saves them a great deal of time and money in processing costs even though they may take a hit when they try to sell the home in today’s market.

Some short sale investors are viewing this new trend with concern, particularly since some lenders have stated that they find deed-in-lieu transactions preferable to short sale transactions since they take less time. Additionally, homeowners who are going to lose their homes anyway may find this to be a more acceptable alternative since it is being portrayed as a route to 100% resolving the debt rather than worrying about being followed up with later for the remainder just when you have gotten back on your feet.

Short sale investors, should not be too worried about this. For starters, there are tons homes that will still go through the short sale process, and not all circumstances are going to warrant or qualify for a deed-in-lieu. You can also point out to homeowners who may be backing out of a short sale that unless the wording in their deed-in-lieu a arrangement states that the debt is considered entirely resolved by the return of the property, which is not always the case.

While deed-in-lieu and a short sale do go on your credit history and impact your credit score, a deed-in-lieu remains on your history for a full 7 years, and you may have to request that it be removed. According to new legislation, short sales may be removed as soon as 3 years.

Certainly, some homeowners may opt for a deed-in-lieu transaction instead of a short sale transaction with you. However, the current deed-in-lieu “push” could actually be a positive, since it may put a dent in homes that lenders were unwilling to short sell anyway. Simply be prepared to answer questions about this style of transaction, then continue doing your short sales and helping people in trouble resolve their personal housing issues.

For some great video training visit www.FreeShortSaleCourse.com

There are many opportunities available for real estate investing that require minimal upfront funds. Due to the housing crisis, an individual can easily set up a short-term or long-term income with very little initial investment. A person who is investing in this market will want to research it carefully before committing funds.

A few tips for wise investing will help you to secure the property that will provide you with the return you expect. Making an investment in property requires that an individual work with several professionals who are knowledgeable in investing, development, and generating sustainable income.

Before making the investment an individual will need to have a clearer idea of what they want to do with the property. Some individuals invest in property primarily to generate a sustained long-term income. Others, investing in homes with the sole purpose of “flipping” the home after a quick renovation. The cost or either of these, must be taken into consideration prior to making the investment.

If the property is going to be used primarily for income, it will be necessary to understand the demographics of the area, median income, and family size. Purchasing a home that will be affordable for the average working family in that neighborhood will provide you with the sustained income for and in definite.

When flipping a home, the primary consideration will be their real costs involved in renovating, and the expected return on investment. These will be predicated on rental income factors as well as costs of renovating. It is important you have a thorough knowledge and understanding of the property and what must be done to bring the home and property up to the level required to meet your expectations for return on investment.

When renovating a home, or preparing it as a rental, it will be necessary to work with many contractors and subcontractors. Before entering into this type of investment, it will be very beneficial to establish a network of individuals who are currently in the investment market. These people will have good knowledge of contractors, subcontractors, agents, and others who will be able to secure your income from the property.

When anticipating real estate investing, it is a good idea to discuss your needs and requirements with an individual who has knowledge and expertise in the field. This person will be able to give you a better understanding of the costs involved in both establishing a long-term income, and a short-term return on a real estate investment. By understanding the costs prior to making the investment you will be prepared for any issues that may arise.

Get an automated system that finds profitable pre-foreclosure properties that you can buy for pennies on the dollar right here at: Real Estate Investing.

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