Tag Archives: brian davison alternative investment

A Guide to the Top Real Estate Terms
You might be ready to buy or sell your home, but how much do you know about real estate lingo? Before you venture into the world of home buying and selling, it might be a good time to familiarize yourself with the top phrases. Top Terms for Buyers Adjustable rate mortgage – a mortgage loan with an interest rate that adjusts over the life of the loan. The adjustment rate is usually determined by a market indicator, such as the weekly average of U.S. Treasury Bills, but is limited by how much and often it can be adjusted. Appraisal – the determined value of a property based on initial purchase price compared with the sales prices of similar properties in the area. Your bank or mortgage company may require an appraisal before they will lend you the money for the home. Closing costs – all monies that need to...
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...
Foreclosures are Still Selling in Tampa
Conventional housing prices might be on the rise, but according to RealtyTrac’s Year-End 2013 U.S. Residential & Foreclosure Sales Report, foreclosed or distressed homes still account for more than one in four of all home sales. One of the states where this definitely holds true is in Florida and more specifically in the Tampa/St. Petersburg/Clearwater area. In fact, Florida still leads the nation in foreclosures. In the Tampa area this means that about 30% of all homes for sale are priced 40% less than traditional properties. Since the process to sell a foreclosed home in Florida also involves the court system, the selling process is delayed, which has become a growing concern among the lenders and banks who possess these homes, especially as the housing market recovers and the number of foreclosures in other parts of the country decreases. The good new is that like most other cities...
As Feds Slow Bond Program, Mortgage Rates Jump
United States mortgage rates soared to their highest since September 2013 as real estate investors speculated the Federal Reserve’s slowdown on its $85 billion-a-month bond-buying program is aimed at maintaining lower borrowing costs. Freddie Mac reports the average 30-year fixed mortgage rate was 4.46% during the first week of December, up from 4.29%, while the average 15-year rate rose to 3.47% from 3.3%. Despite near-record lows in May, mortgage rates have steadily climbed, all while the Fed continues to weigh when it should scale back its stimulus. 10-year Treasury notes yields are their highest in two months, due to lower unemployment rates. The Treasury notes are considered a benchmark for home loans. Experts agree that the Federal Reserve is likely to taper sooner, not later. With a December 17 meeting looming, Federal Reserve Bank of Atlanta President Dennis Lockhart said he is optimistic about the economy's outlook. "I...
The Renter Nation: What’s Behind It?
“After going through what was the housing market's darkest hour, housing is now one of the most popular investments in America.” (StreetAuthority) During the recession, many homeowners found themselves facing some very tough decisions. Renting a home became a viable, albeit temporary, housing option. Or so Americans believed. However, some former homeowners have permanently embraced renting, along with those individuals who cannot yet purchase a home, or those who remain indecisive about home ownership. Along with these changing views of the rental lifestyle, real estate investors are loosening the strings on short sale and foreclosed homes in their portfolios, allowing more rental homes to flow into the market. Together, these forces have created a renter’s nation. Jeffrey Friedman, CEO of apartment REIT Associated Estates Realty, predicts that “of the 5.5 million new households (newlyweds, boomers, college grads) that will be formed between now and 2016, an estimated 3.8...
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...
A Unique Credit Instrument Fueling an Equally Unique Trend in Home Ownership
From the time of the real estate pricing peak 2006, the average price or residential real estate across the United States fell 35%. This price drop precipitated the start of a quiet trend among private equity firms, hedge funds, and real estate investment trusts. Companies such as Blackstone Group LP have entered into transactions to purchase almost 200,000 residences, paying upwards of $20 billion for the properties. Many of these properties are in some of the hardest hit housing markets in states such as Florida, Nevada, California, and Arizona. These companies are looking to take the landlord/tenant relationship to a new level. When purchasing distressed properties, in bulk, from lenders that foreclosed on their original mortgagees, these companies gain several significant advantages. First, they are able to negotiate a better price.  A commercial lender is in the business of lending money, not managing real estate. ...
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...
Property Valuations, Loan to Value
In private lending where loan to own underwriting is very prevalent this category has the greatest pressure on it for manipulation to get the loan closed.  Proper valuation of a property to base the Deed of Trust on is a basic aspect of underwriting, however this seemingly easy item can be very murky for investors, especially if Real Estate is not your fulltime occupation with a few hundred transactions in experience.  Any estimate, valuation or appraisal of Real Property is only an estimate.  One does not need to hold any particular license to hold a different opinion of a property at any given time. Value is difficult in slow moving markets as there is limited (market) data to review in closings to estimate value and in rapidly changing markets some will lean toward on the side of where the market came from (past) and some will...
What You Need to Know About Limited Exit Strategies
Exiting the investment is one of the most crucial aspects of Trust Deed investing; it determines the net or actual profitability of the investors.  An investor should never assume or accept the primary exit strategy offered by the borrower or Broker, as in many cases it is the only real one for the investors. Remember the example on PITFALL #5? Well for the borrower the exit strategy is the development of the property for a profit, taking of the principle (for other uses) and Deed in Lue the property back to the investors to stop the Foreclosure.  The investors are left with typically an over-encumbered property (that’s why the borrower defaulted) to decide to take a principle loss now or wait to see if the future offers something better in market valuations. Solution: Invest in properties that have multiple exit strategies; improved properties that are rentable for cash...