Tag Archives: alternative investment

Tips for Spotting a Desperate Seller
With fewer homes on the market, it is still a seller’s paradise. They can choose from a variety of offers until they find the best one. This might lead one to believe that the seller still has the advantage. However, there does seem to be a few sellers out there who are desperate to sell their property as fast as they can. When buyers come across this type of seller, the advantage suddenly shifts in their favor. Of course knowing how to find or spot this type of seller isn’t always easy.  Look for terms like, “priced to sell,” “quick close,” or “seller relocating,” to provide you with some clues as to the buyer’s state of mind. If you are looking to find a good deal or a desperate seller, start by searching for properties that have been on the market for a long time. The longer...
Boomerang Buyers Returning After Foreclosures
Chances are if you asked the estimated 5.3 million people who lost their homes during the real estate crisis if they thought they would ever be able to own a home again, their answer would probably be no. Seven years later, however, with their credit rebuilt or on the mend, some of these same former homeowners are re-entering the market. The comeback being staged by this category, also known as the boomerang buyer, is being driven by rising rents and a desire to own a home again now that the economy seems to be stabilizing. Experts see this growing trend happening in various markets across the country, with the most popular being Riverside-San Bernardino, California (4.1%), Los Angeles, California (3.7%) and Phoenix, Arizona (3.6%). Since California is one of the biggest indicators and predictors of what will happen in the housing market, this is good news...
The Influence of Buyers & Sellers on Supply & Demand
No matter what industry you look at, supply and demand always plays a large role. This is especially true of real estate and home prices. When there is a large inventory of homes for sale, pricing declines, while a lack of inventory will drive up pricing. This is usually how supply and demand works. However, there are times when a large supply of highly desirable inventory is paired with a large demand. When this happens, pricing may also rise. There are many factors that can play into this, such as the location of the homes. The more desirable an area, the more people will want to buy a home there, and even if there is a large amount of inventory, there will still be competition to buy the best of that inventory. Another influence on supply and demand in the housing market is the type of people...
What Do the Next Five Years Hold for Home Pricing?
The days of home prices reaching levels seen during the real estate bubble seems to be over. Though pricing in 2013 was down 20% compared to its 2006 summer highs, the S&P Index Committee did report that prices were up 23% from their March 2012 lows in both the 10 and 20 city indexes. While 2013 proved to be a banner year for the housing market, with an appreciation rate of 6.4 percent, experts do predict that prices will cool somewhat due to rising mortgage rates, less inventory and a lack of good bargains. In fact, most economist, real estate experts and real estate investment strategist predict a moderate annual rise in prices of 3.7% over the next five years. This translates to a cumulative change in home value of 19.7% by the end of 2018. This housing market pricing picture is based on a recent study...
Real Estate Bidding Wars Spark Housing Bubbles in Hot Markets
You may have seen the headlines…“Bidding Wars Return to Boston Condo Market”…“National Association of Realtors (NAR) Announces Home Sales Lowest Since 1999”…“Why Real Estate Listings Are So Hot Right Now”… and others. Do these headlines contain typos? No. Home prices are rising in many areas across the United States and investors from Wall Street and other countries are leading the charge.  They took advantage of distressed real estate during the short-sale glory days, purchasing properties at bargain-basement prices and, rather than flipping those homes as might happen in a healthy housing market, renting homes to former homeowners displaced by short sales and foreclosures. Now, with fewer homes for sale and increasing buyer demand, the bidding wars have begun in earnest, producing bubbles in the hottest housing markets like Charlotte, Los Angeles, and San Diego. Are we headed for another housing crash? No, says Zillow’s director of economic research,...
Flood Plains and Flood Pains
A law most Americans have never heard of quietly went into effect on October 1, 2013, the same day as the U.S. government came grinding to a shutdown. The law, known as the Biggert-Waters Flood Insurance Reform Act, will roll out over several years. Each year, a portion of the subsidies that keep federal flood insurance premiums artificially low for over 1 million policy holders around the country will be eliminated. Homeowners qualified for the subsidy because their property existed before the initial drawing of flood insurance rate maps. Approximately 20% of all property owners with federal flood insurance receive these subsidies. For example, some homeowners who currently pay approximately $1,000 per year for federal flood insurance will end up paying, after all subsidies are removed, an estimated $8,000 and $9,000 per year for the same policy. Premiums are based on the cost of the...
Back Again: Bubble-Like Markets
A lot of people are worried that stocks are headed for another crash. Stocks have been rising almost daily, but the missing component is the expected backtracking that comes along with health ascents. And so the questions loom, when is the crash going to occur? Why is this happening is and what can we do to prevent it? Larry D. Fink, whose company, BlackRock Inc., is the world’s largest money manager ($4.1 trillion in assets), has recently stated that the Federal Reserve Policy is contributing the “bubble-like markets”. Fink is quoted as saying, in October 2013, that “We’ve seen real bubble-like markets again. We’ve had a huge increase in the equity market. We’ve seen corporate-debt spreads narrow dramatically”. The most apparent danger for stocks is, in essence, the Federal Reserve; and, because of the contributing factors, it is now imperative that the Fed starts to reduce their heavy...
You Don’t Need to be a Weather Man to Know It’s Warm Outside
To simply make the declaration that “it is warm outside” can be a reckless statement, depending on your audience. A person from Orlando, FL will likely have a different definition of ‘warm’ than someone from Juneau, Alaska. You need more facts than just the air temperature to best assess the situation and make a comment that fits the scenario. Recently, RealtyTrac LLC. released its recap of U.S. foreclosures for the United States, during the 3rd quarter of 2013. The report found there were 131,232 properties indicating a default notice, scheduled auction, or bank repossession during September. On the surface, this may appear like a lot of properties, or referring back to our weather analogy, “warm”. In actuality, we need to view it in context of where the U.S. real estate and mortgage industries have been over the past few years. This number actually represents a...
Taking a Good Attribute and Distorting it with the Deed of Trust Originator and the Borrower
An industry standard is for a Broker to strengthen the offering (to Investors) of the Trust Deed to investors by creating an interest reserve for the borrower.  An interest reserve account is money set aside to ensure the investors interest payments on a loan over a specified term.  This can be a good feature in the correct circumstances; however often times the actual source of the interest reserve and the math is not to the benefit of the investors and this may hide the weakness in the borrower’s cash flow and qualifications. The PITFALL occurs by a taking a good attribute and distorting it with the Deed of Trust originator and the borrower.  For example: Borrower acquires a parcel of land for $100,000 with $50,000 down payment.  This land later ‘appraises’ for $500,000.00 based on that value; Borrower requests a loan of $375,000 (75% LTV) The investor is offered...