Wednesday, May 26, 2010

10 Important Tips to Successful Real Estate Investing

When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know: 

1. Compare property values and rents Financial statistics only go so far; the best measure of a property's market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a must.

2. Pay attention to tax laws Don't base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.

3. Specialize in something you know Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you'll benefit from experience by specializing in one aspect of investment real estate properties.

4. Know the costs before getting started Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.

5. Know where your tenants are coming from If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants' security deposits at closing.

6. Assess the tax situation Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.

7. Investigate insurance coverage If a seller's coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.

8. Confirm utility costs Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant's rent.

9. Consult your accountant Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.

10. Inspect Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.

By Paige Tepping

Saturday, May 22, 2010

Foreclosures Begin to Level Off

U.S. Foreclosure Market Report™ for April 2010, which shows that foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 333,837 properties in April, a 9 percent decrease from the previous month and a 2 percent decrease from April 2009. One in every 387 U.S. housing units received a foreclosure filing during the month...  click here for more.

When Will the Housing Market Rebound?

All the signs are there for continued improvement in the economy as well as housing markets, but it will be several years before real estate practitioners can expect to see markets returning to equilibrium, two of the country's top economists told REALTORS® this week.

By the end of this year, practitioners should see 5.4 million existing-home sales and home price growth of up to 3 percent, said NAR Chief Economist Lawrence Yun.

Already many markets are seeing home price increases, including San Diego, where prices are up some 16 percent. Orange County, Calif., and Boston are two other strong areas, with price increases of 10 percent to 12 percent, Yun said.

Did the Tax Credit Make a Difference? 

The federal home buyer tax credit has been essential for getting buyers back into the market, stabilizing inventories, and shoring up prices, Yun said. He estimated that the credit -- which is available to buyers who had properties under contract by April 30 and who close on their sale by June 30 -- brought more than 4 million households into the market since it was enacted about two years ago. That includes about 1 million who otherwise wouldn’t have bought. 

More fundamental to the improving housing picture is the increasing strength of the economy, which is on track to expand by 3.1 percent this year after shrinking 2.5 percent last year, Yun said. 

With inflation tame and interest rates low, businesses are enjoying robust profitability and their balance sheets are in the best position they’ve been in for years, said Mike Zandi, chief economist for Moody’s That’s helping with employment, which about two months ago turned positive for the first time since the economic crisis began and is now seeing about 125,000 net jobs added a month, he said. 

Working Through the Inventory

Even with those good signs, practitioners are unlikely to see home prices reach a level that balances with the country's growing population for several more years, maybe not until 2014, Zandi said. It'll take that long to work through the country's large overhang of inventory from high foreclosures. 

There are almost 4.5 million distressed residences in the United States today, meaning the homes are in foreclosure or the owners are several months behind on their payments, Zandi said. The housing market can't return to equilibrium — which Zandi defined as something over 7 million sales a year to meet population demand — until that overhang is addressed. 

In the meantime, those distressed homes are keeping downward pressure on prices. He doesn’t think values will start to show any signs of improvement across the board until next year.

What Could Jeopardize Recovery

Both Yun and Zandi cited the federal government’s budget deficit as a risk that could derail the economy if a credible plan for addressing it isn't put forward. Zandi said the government's emergency intervention to stem the mortgage crisis was necessary -- despite sending the deficit higher -- because without it the economy would still be in a crisis and interest rates would be much higher, making recovery that much more difficult. 

Now, he said, the government must make it a priority to rein in the deficit.

Yun said what's happening in Europe, as Greece wrestles with its credit crisis, also poses risk to the United States. If Greece defaults and other countries run into trouble, the global market for U.S. mortgage-backed securities could be hurt badly, forcing up interest rates and driving down home sales. 

The crisis in Greece could also be a preview of what the United States will face if it doesn't turn its attention to deficit reduction. 

- By Robert Freedman, REALTOR® Magazine

Friday, May 14, 2010

America’s Top Places to Live for 2010

The three most important things to remember when moving and buying a new home are: location, location, location. As potential home buyers start looking for new homes,, a leading website in providing relocating consumers access to resources for their upcoming relocation, has released its 13th annual list of “America’s Top Places to Live for 2010.”
The “Top Places to Live” list features several breakout categories such as the Top 10 Recovery Cities, Retirement Cities, ‘Earth Friendly’ Cities, Recreation Cities and Small Towns.
New for this year, the Top 10 Recovery Cities focused on areas poised for swift economic recovery. Many of these communities did not see the massive real estate bubble that formed in other areas and have a more diverse economy.
To be considered for the list, a community is nominated at From the thousands of submissions,’s editorial team reviews the nominations and selects the top places to live, as well as the Top 10 for each smaller category, based on interviews with local leaders; feedback from residents; and economic, environmental, education, crime, employment and housing data for the past year.
“Given the tough economic times our nation is facing, home buyers have re-evaluated their priorities and are looking to relocate to communities that offer plenty of perks, but minimal hassle and cost,” said Peter Meyers, Vice President, Research and Content Development, at “While some cities are facing a road to recovery that could take years, others are poised for a quick rebound – and already have seen growth. We wanted to highlight those cities that are on the road back to economic health.”
Top 10 Overall Cities:
  1. Huntsville, AL
  2. Washington, DC
  3. Austin, TX
  4. San Diego, CA
  5. San Antonio, TX
  6. Tulsa, OK
  7. Charlotte, NC
  8. Raleigh, NC
  9. Boulder, CO
  10. Minneapolis, MN
Top 10 Recovery Cities:
  1.  Huntsville, AL
  2. Austin, TX
  3. Las Cruces, NM
  4. Washington, DC
  5. San Antonio, TX
  6. McAllen, TX
  7. Billings, MT
  8. Albuquerque, NM
  9. Everett, WA
  10. Boulder, CO
Top 10 Retirement Cities:
  1. Ashville, NC
  2. Bella Vista, AR
  3. Green Valley, AZ
  4. Sarasota, FL
  5. Prescott, AZ
  6. Tampa, FL
  7. Greenville, SC
  8. San Antonio, TX
  9. Hot Springs Village, AR
  10. Colorado Springs, CO
Top 10 ‘Earth Friendly’ Cities:
  1. Portland, OR
  2. Boston, MA
  3. Madison, WI
  4. Boulder, CO
  5. Austin, TX
  6. Chicago, IL
  7. Minneapolis, MN
  8. Fort Worth, TX
  9. Ann Arbor, MI
  10. Huntsville, AL
Top 10 Recreation Cities:
  1. Boulder, CO
  2. Santa Cruz, CA
  3. Flagstaff, AZ
  4. St. George, UT
  5. Ithaca, NY
  6. Corvallis, OR
  7. Salt Lake City, UT
  8. Stevens Point, WI
  9. Wilmington, NC
  10. Portland, OR
Top 10 Small Towns (<40K pop.):
  1. Grinnell, IA
  2. St. Augustine, FL
  3. Fairhope, AL
  4. Stillwater, MN
  5. Summit, NJ
  6. Ashland, OR
  7. Batavia, IL
  8. Ithaca, NY
  9. Peachtree City, GA
  10. Trumbull, CT

Are We There Yet?

Strong evidence that the market has bottomed and that a more balanced housing market is emerging in many parts of the U.S. can be found in the latest HouseHunt Current Market Conditions survey data reported during the first quarter of 2010.  Although uneven, the results show prices have stabilized after steep declines over the past two to four years and in some cases are actually appreciating despite the drag of foreclosures, short sales, job uncertainties and reluctant lenders.
Perhaps the most positive news is that the buyer-seller ratio is almost dead even in HouseHunt's national random survey of member-agents.  Also important, repeat buyers now represent 50% of all transactions with first-time buyers when investors are factored into the equation.  Three months ago, repeat buyers accounted for only 34% of home purchases.  The normal ratio is two-thirds repeat buyers.
Improvement is also seen in the average time needed to sell a home.  Fifty-two percent of HouseHunt's member-agents report that their customers received 95 to 100% of their asking prices.  Another 35% said they received more than 90%.
"From the member-agents I talk to, there seems to be a sense the market has hit bottom and sales activity is continuing to pick up," observes Michael Bearden, president and CEO of HouseHunt, Inc.  "Business is by no means easy but is getting better and more reliable.  Our lead flow remains good with plenty of interest in real estate.  Consumer demand is building, especially from repeat and move-up buyers.  The federal $8,000 and $6,000 first-time buyer tax credits approved by Congress last year were strong motivators for fence-sitters to do something.  Any increase in current mortgage interest rates could stimulate additional buyer activity this summer and fall."
When individual agents were asked if the housing market has bottomed in their communities, their opinions ranged from "yes" to a flat "no."  A majority of them agreed that more personal contact with customers is needed, both by phone and by e-mail, to meet changing market demands.  Here's a sampling:
"I'm definitely trying to spend more time being in touch with my customers," said Steve Hinrichs of Edina Realty, who with his partner Jean O'Reilly are agents in Maple Grove and Rogers, MN, in the suburban Minneapolis area.  "I'm currently offering to update my customers on a monthly or quarterly basis on homes that have sold in their communities.  It keeps me in front of them and allows me to see what is going on in their areas.  As far as local market activity, our focus has been on first-time buyers.  We're seeing a little price growth in some areas but will know better in a month or two.  Our market will come back.  Our biggest problem right now is consumer confidence.  People are nervous and unsure about their jobs and the economy.  I try to be honest and forthright with them.  Trust is of utmost importance now."
Geri Boyer of Altura Real Estate Group in Laguna Beach, CA, said she is seeing a stabilization of prices but expects a little more price dropping through the end of the year.  "The activity is out there," she said, "but our biggest problem is getting loans for my buyers.  Competition from second home buyers and investors is also keen for properties in the $350,000 range.  Recently, I had a listing on a bank-owned property that attracted 33 offers.  It sold for $100,000 over the list price.  First-time buyers are being outbid any investors with cash."  Boyer added: "I'm doing everything different to compete in this market.  I've had to reinvent myself."
Dealing with the lenders is also a big problem for Alexia Gallagher of Keller Williams Realty Atlanta Partners in Suwanee, South Forsyth County and Cumming, GA.  "The majority of buyers who come to us are looking for deals, so we're looking at foreclosures, short sales and distressed properties.  Our biggest problem is getting banks to be reasonable and to get them to respond in a timely manner.  We have been in multiple bidding wars.  It's a different market."  She noted: "I think as far as value goes, we probably have bottomed out price-wise.  Our inventory of unsold homes is down quite a bit, which is very good.  We've had a surplus of inventory with lots of new construction.  We continue to have a record number of foreclosures as well.  So we have a mixed market with some positive signs and some negative signs."
Not convinced that the housing market has bottomed is Barry Newman of Century21 M.B. in Glenview, IL, a suburb of Chicago.  "I feel that we're over-inventoried.  I also have a hard time believing that there are as many buyers as sellers out there.  I had a great December and January, then things started to dry up, which was disappointing."  Newman continued: "One thing I am doing to be more effective in this market is to talk more with my customers rather than e-mail them.  I now see that talking directly to people is the best way to go.  It's better to be in front of your customers than communicating the way I have been doing."
By: Mike Bearden

Monday, May 10, 2010

April 2010 Market Report

Monthly Highlights

•678 single-family detached homes were reported sold for April 2010, the highest number of April sales since 2007.

•Pending home sales for single-family detached homes are up 52.03% from the previous year and increased 18.01% from the previous month. April 2010 is the 2nd month this year that pending home sales passed the 1,000 mark.

•The median sale price for single-family detached home sales held steady at $175,000 for the 2nd consecutive month.

Contact: Mark Pando, 2010 GAAR President, 505-249-0188

PDF File Read the full April 2010 Market Report 

Create Your Own Buyer Stimulus Package

The Federal Government's Homebuyer Tax Credit may have expired on April 30, but just because Uncle Sam has turned off the financial spigot aimed at housing doesn't mean home buyers still can't get "something extra" during their purchase... click here for entire article and video.

Sunday, May 2, 2010

New Mexico March Housing Trend Stats Posted

U.S. House Stats New Mexico March and 2010 First Quarter reports have been posted on The number of single-family home sales in New Mexico in March increased 21.5% from March 2009. The median sales price of a New Mexico home during March 2010 was $171,000. The March median sales price is .6% higher than February’s median of $169,950.

Real Estate 2010 Biggest price drops

The big question is when to make your move. Act swiftly if prices are already stabilizing in your area. Click here for price projections for the country's 384 metropolitan areas.