Category: Real Estate

I have written numerous times about the tremendous supply deficit in Natural Resources brought on by the industrialization of Emerging Markets like China and India.  As these countries, build-out their infrastructure commodities such as copper, aluminum and zinc are required.  Due to the fact, that it takes 3-5 years to bring these minerals to market; coupled with very little investment over the past decade; it is very difficult for mining companies to meet demand.  High demand and low supply means higher prices.  This is a trend that many people with profit from over the next 10 years.  The old adage the trend is your friend has never been more true.

Personally, I am going to milk the commodity trend as long as possible, but I always have my eyes open for other trends.  Up until recently real estate investing was the greatest no-brainer on earth.  Everyone was buying and flipping real estate.  However, like all good things - it must come to an end.  Real Estate speculation has not ended, but it has slowed tremendously.  So, should investors give up on real estate and plow all of the money into commodities.  If you have the aptitude for trading stocks certainly, but if not search for niches to exploit in the real estate market.

One such niche is investing in student housing.  I remember living in the dorms in college.  The state of the bathrooms after a weekend of non-stop parties was simply disgusting. Today’s students don’t won’t to deal with such.  They want nice accommodations with cable television and high-speed internet.  Savvy real estate investors are satisfying their needs.

An Introductory Course in Student Housing Investing

Three ways to go broke in real estate – this article is generous.  A month ago, many market observers were anticipating an interest rate cut as soon as the end of this year.  However, the most recent economic reports have not supported that assumption and rate hikes are once again being discussed.  Many real estate investors speculated on properties using adjustable rate mortgages.  That may turn out to be very costly.

 

Source: MSN Money
by Jeff Schnepper

I’ve been involved in real-estate investing for years, and I’ve learned some hard lessons based on what was purported to be great advice. Like: “Buy property. Buy it now. It will always rise in value, and you’ll never go broke.”

Trust me, you can not only go broke, but you can actually pay taxes as you do it. Let me show you three ways you can get creamed and suggest some strategies to limit your risk.

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I have spoken about this several times.  Crisis equals opportunity for those with the dough.  I am sorry, but there are no excuses for not having any dough.  Two months ago, gas was over $3 per gallon now it is in the low $2s.  What are you doing with your new found money? Are you one of the ones that have been contributing to increased retail sales.  If you are not blowing it in the stores – you should have an extra $50-100 per month.  It may not seem like much, but it adds up.  After awhile, you will be positioned to take advantage of some of great investment opportunities like the one described below.

 

Source:  Best Syndication

For the first-time real estate investor or seasoned veteran, the current market conditions are a window of opportunity for those shopping to buy real estate property just before foreclosure. A growing number of homeowners have withdrawn all their equity (sometimes as much as 110% of their home’s value.) and now house values have turned down and they are upside down -where they owe more than they can sell the house for. Trapped in a situation where they can’t pay their debts and they can’t find a buyer for their home, real estate investors who understand the default process can offer a solution that offers the homeowner in default a way to escape from their mortgage payments and for the investor a way to secure a property in the process.

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I would think with the current state of the housing market creative ways to access capital such as using your IRA to purchase property is slowing.  Many of you probably didn’t realize that was possible.  You need to get out more.  If you do own property in your IRA – be careful.

 

Source: Union Tribune

A year ago, a popular financial magazine featured a story about an enterprising fellow who purchased a fixer-upper and then sold the house for a quick profit after remodeling it. The story would have been unremarkable except for a couple of important details.

The money for this real estate deal was plucked from the man’s Individual Retirement Account. While few people realize it, using retirement cash to buy a house, a condo, a parking lot or even a Laundromat is completely legitimate. But what even fewer investors seem to realize is that investing in real estate inside an IRA can transform the retirement account into a Molotov cocktail.

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No one cares more about your financial well-being than you.  It is imperative to become financially educated or you will pay a steep price.

Source: Market Watch
Can U.S. curb the ‘exotic mortgages’ frenzy that puts homeowners at risk?

…..In some instances, according to regulators, the lenders knew that the only way the loan could be repaid was to either refinance or sell the home. Such “collateral-dependent” loans fit the classic definition of unfair and deceptive lending practices under federal consumer protection laws…..

Studies show that a large number of borrowers with simple ARMs don’t understand the terms and underestimate the amount their mortgage payment could rise. Nontraditional ARMs are even more complex. 

Most of the exotic loans have low introductory interest rates that ultimately adjust to market rates, usually after two years. Some loans require that only the interest be paid, putting off the day when the borrower must start to pay down the principal. Some of the loans allow borrowers to make a monthly payment that doesn’t even cover the interest, resulting in a negative amortization when the unpaid interest charges are added to the principal. And most of such loans sold in the subprime market have large prepayment penalties that make it expensive to refinance.

So home buyers rely on professionals to advise them, to tell them what products are best for their circumstances, what they can afford. “That creates an agency problem,” said economist Dean Baker. The person you’ve hired to take care of your interests, Baker says, might have interests of his own that conflict with yours.

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