Dean Graziosi’s Real Estate

Expertise is so essential when it concerns purchasing property. Dean GraziosiCheck out on to learn some terrific recommendations about getting started in the field of real estate.

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Your credibility is vital to the success of utmost significance when you venture into realty financial investments. This makes you integrity with the area and assists you gain their loyalty.

Find similar individuals with similar minds and speak with them. There are a lot of individuals curious about property. There are most likely lots of groups creating in your area that focus on this type of thing. If you cannot discover one close by, you can find online forums online where other investors hang out. Go out there and see what your peers.

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There are to essential rules to making a financial investment in an industrial or commercial property market. You wish to see to it that you get a fair bargain on the land. Do not pay too much cash on business itself. You should settle on great numbers in order for you to make the property is something you’re interested in.

Be sure to select areas that are in a widely known location in which possible occupants might be interested. This is vital because it will make best use of the value that you get when selling. Try looking for properties that can easily be maintained.

Land that is situated near water or in the future.

Don’t spend your money in genuine estate with doing the field. Errors in investing can be incredibly costly.

It could well be unlawful for you to dig, and it pays to discover this out up front.

Do not get realty found in bad neighborhood. Know all there is to find out about the property before you purchase it. Do all of your research prior to you decide. A bargain on a good house could imply that it’s in a bad location. It may be tough to offer this kind of home and this sort of house can be vandalized easily.

Ensure you’re getting back your investment, plus an added profit.

Don’t permit your emergency situation reserve or cash fund. Investing in property requires a great deal of money that you can not get back immediately. Be specific that you can manage this without triggering financial pinch as an outcome.

Do not buy a property merely to increase the number of investments you hold. Investigate each home extensively before you invest and keep in mind quality over quantity. This will certainly help secure your financial investments.

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Work well and play will certainly with other real estate investors. This allows you to share resources and resources. You can find a great deal of potential and eventually pleased clients if you help one another. This is the secret to developing excellent will definitely help improve your track record.

Don’t invest in property if you don’t have a cash reserve. This reserve can be made use of for the remodellings that you do. Another factor for having money is simply in case you cannot lease the home swiftly. You still have to think of costs even when your property is unoccupied.

Ensure to have the home for needed repairs prior to making a purchase. Repairs require to be made before offering the house. Factor upkeep into your budget if you intend on leasing any piece of property.

These various legitimacies are going to vary from city to city so it assists to understand exactly what to anticipate ahead of time. Speak with regional officials to guarantee you stay within the law before you sign any contracts.

Avoid novices when looking for good real estate agents. You need to have a skilled expert if you’re going to discover the very best opportunities.

Be ready and willing to make sacrifices. You will certainly invest a bit of time in genuine estate investing. You might end up needing to quit much of your luxury costs in order to have adequate space to find success.

Avoid investment properties that are too costly or inexpensive. Buying homes too cheap is a waste of money on upgrades. Look for an affordable price home in suitable condition with fairly low maintenance.

You can be sure that you’re making excellent choices when you put in the time to study investments in property. Plainly, you have to make sensible choices and stay clear of investments that will certainly not pay off. Work gradually and regularly toward your goals, and you make sure to meet success.

Links on Real Estate: http://en.wikipedia.org/wiki/Real_estate


Fun with Fannie and Freddie

A recent summary of various polls of Congressional Job Approval was published at RealClearPolitics.com. The average numbers posted were 10.8 percent of respondents approving of the job Congress is doing, and 79.8 percent disapproving of congressional job performance. In many surveys done over the last few years, the comment heard often is that members of Congress are ineffectual, bickering and throwing mud, but accomplishing very little.

In 2013, there were five laws, of around 60 passed, that were particularly interesting in a discussion of job approval:

  1. A bill to set the size of new commemorative coins to be issued by the National Baseball Hall of Fame.
  2. A law honoring various people by using their names for government and military buildings and facilities.
  3. Former Senator Kay Bailey Hutchison from Texas had an entire section of the tax code named after her.
  4. A bill granting 28 acres of the Buffalo Gap National Grassland in South Dakota to construct the Minutemen Missile National Historic Site and parking lot.
  5. A law to grant the U.S. an easement to a 67 acre property in Mississippi known as the “bean field property.” The easement is to restrict the use of the parcel to uses compatible with the Natchez Trace Parkway.

There’s probably nothing really wrong with any of these initiatives, but with all of the economic, employment, and housing problems we have these days, perhaps other more important things could come first.

When it comes to the restructuring or outright dissolution of Fannie Mae and Freddie Mac, there has been a lot of talk, a couple of bills introduced, and nothing really accomplished. One group wants to see them go away completely, but with the intent to roll their functions into yet another government entity that will still be in the mortgage guaranty business. Another group wants to keep them around, just tinkering with the rules under which they operate. A third option, also with backers, is to liquidate their assets entirely, and not have any government involvement in housing finance.

There are a number of intricate actions and rules being proposed, some of which would leave current investors holding a bag of air while taking actions to let the taxpayers off the hook for some of the massive debt, as well as stopping all future bailout actions. The fact is that we’ll almost certainly see nothing being done this year along any of these lines.

With political pundits generally agreeing that the Democrats will not be able to take the House in the November elections, there will not be much substantive work in Congress until after November. With a lot at stake in this year’s elections, few incumbents will want to do anything crucially important for fear of alienating some constituent groups. After the elections, if the situation doesn’t change with the houses split as they are now, it’s likely that we’re in for a long period in a decision vacuum when it comes to the tough problems we face. As a popular country western song says, we need “a little less talk and a lot more action.”
Dean Graziosi


Knowing the Ropes in the Foreclosure Purchase Ring

I’m using a little bit of boxing terminology here because buying a foreclosure property can be a lot like a boxing match. You definitely need to know that it’s an adversarial process; the bank is not your friend. In fact, during the negotiation and closing process you may wonder if the lender even wants to sell the home.

I’ve bought a great many foreclosure properties over the years and can tell you that you can end up pulling your hair out if you’re not prepared for the hurdles the lender places in your path to a closing. I’m going to share some of the pitfalls and headaches with you here, but it’s definitely not a complete list.

“As-is” means nobody knows: the bank normally has no knowledge at all of the condition of the property, and you’ll be signing that you’re buying it “as-is” no matter what’s wrong with it. In a recent purchase, though even a cursory look would lead you to suspect problems, an inspection turned up the need to replace the entire roof and much of the plumbing system damaged due to freezing weather. Once you do their job for them and pay to turn up the problems, don’t expect any changes in price or concessions due to condition.

Listing broker is little help: the agents who list foreclosure properties for the bank become very good at filling out the bank’s online forms and following their instructions to the letter. If they don’t, they get stuck without reimbursement for payments they’ve made for things like utilities and repairs. They aren’t going to be of much help when you’re upset with the process or the banks’ shenanigans. They’re also almost always taking a reduced commission, so their goal is to get the deal to closing without a lot more work, as they’ve been taking care of the property for a while.

One-sided Contracts: in nearly every state, real estate agents have purchase contracts mandated by the state or real estate associations, and they’re used to using those contracts that are designed to be fair to both sides of the transaction. The first thing you’ll almost always see when that contract is submitted to the seller is the return of an addendum/amendment that changes or does away with just about all of the protections for your side. It’s likely that:

  • The bank will absolve themselves of any liability for property condition.
  • The contract will allow the bank to be late in closing or even completely back out of the deal at any time for any reason.
  • However, you will be agreeing to close on time or be subject to daily penalties of from50 to200 in most cases.
  • The bank will routinely question every document and take days to weeks to review even the simplest single-sentence document. Their contract addendum will allow this with no recourse by the buyer. If those delays cause your side to not be able to close on time, you may be paying those penalties though they caused them.

You’ll pay when they won’t: the banks will refuse to pay “normal and customary” closing costs, including some attorney fees for preparing deeds, water rights or other documents you need. You’ll see those refused charges showing up on your side of the HUD statement.

Those are a few of the most common issues you’ll face when you’re buying a foreclosure property. I’m only giving you this information to help you to prepare for the process, as many of the very best deals I’ve made over the years have been foreclosure purchases. Be prepared, put on the gloves, and come out fighting.


Dean Graziosi


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Self Defense for Your Next Home Purchase

I’ll start by saying that the tactics I’m suggesting in this article are definitely not for every future home buyer. However, the few who use them properly will emerge with instant equity and solid protection against reasonable market fluctuations to the downside.

It’s now eight years after the housing and mortgage crash that began in 2006, and a lot of media attention is on increasing prices and even bidding wars for homes in many areas. However, there are also analysts who fear that this is a “mini-bubble” that can’t last. Much of the activity is still cash buying by small and institutional investors buying up foreclosures and distressed properties.

A couple of major problems are contributing to pessimism in the current market. First-time homebuyers are just no longer in the market much at all. Many are living at home with their parents, unable to qualify for a purchase, burdened with student debt, or short an acceptable down payment. Even if they can buy, the second reason we’re not really in a major recovery comes into play.

Not only first time homebuyers, but would-be buyers in general as well, are fearful of the stability of market improvements. The American Dream has been tarnished, and many people are afraid to commit and buy when they aren’t sure about future appreciation. They’re also concerned about an economy that’s not supporting new job creation or wage increases.

The techniques I’m going to suggest in this article, if you choose to use them, are based on solid strategies used by investors to “buy right,” locking in a profit at the closing table. They aren’t used by the normal retail consumer buyer because they aren’t easy, nor are any of the lenders or new home builders really terribly interested in bringing them to your attention. In fact, you aren’t going to be using them for any new home purchases. This is all about distressed existing homes.

Generally the retail buyer isn’t getting in on the down-and-dirty foreclosure buying action because the homes are not in livable/financeable condition when purchased, so lenders will not approve a mortgage. They want all repairs and renovation completed to secure the long-term mortgage.

First make a decision to buy at a deep discount to the ARV, After Repair Value, of the home in the current market. Get help to determine what the home you like would be worth if it was ready to live in. Then you go to a lender who will be happy to help you with a FHA 203k home loan. This is really a combination of two loans, one for the repairs. Then that loan is rolled into a long-term mortgage.

You get hard quotes from contractors to do all of the necessary work to make the home livable and make the lender happy. The 203k loan is structured in two parts, the first to get the repairs done. The lender controls release of the funds to the contractor(s) as the work is completed and approved. An appraiser has already given the lender the ARV of the home, so the goal is to get the combination of purchase price and repairs to a level below that value.

A recent real life example was a buyer who found a foreclosure with a negotiated purchase price of $ 125,000, then received contractor written bids of $ 42,000 for all repairs and renovation to make it a nice home again. The ARV of the home according to the appraiser would be $ 192,000. Since the total of the repairs and the purchase was $ 167,000, this buyer locked in equity and profit of approximately $ 25,000 at the closing table.

That’s a comfortable 13 percent equity from the first day of ownership. Sure, it took a bit longer to make this deal a completed reality, but it was well worth it in the end. And, there were no retail competitors bidding for this home. This buyer was able to locate a home in a neighborhood they liked, and they could visualize it in totally restored condition.

The key is to do the due diligence and get your own reliable estimates of the value of the home once it’s repaired. Then get some preliminary quotes from contractors for the obvious work. If you can pad that some and get the right purchase price to guarantee instant equity, you’re on the right track. This self-defense strategy for buying your next home will give you a nice cushion for market gyrations and a comfortable feeling of control of your financial future.


Dean Graziosi


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Challenges to the American Dream

Our grandparents and the baby boomer generation have enjoyed the American Dream of homeownership, and they’ve by and large been rewarded with increasing values and the forced savings of mortgage payments. That’s at least until 2007 or so. However, even then, if homes were owned for a number of years prior, they’re now seeing some improvement in a recovering market.

What is the future for the dream of homeownership these days? Actually, it may not be the fact that the dream is alive but unattainable. It may be more that the dream isn’t as big a deal to the younger generation. There are divergent opinions, and it’s probably a bit of both. Many younger Americans living at home with parents would love to own a home but can’t due to rising student loan debt and lack of a down payment.

Owning a home may be desired, but the younger generations have some harsh economic realities to overcome. Gone for most are the days of getting a job with a large company, working for 20 years and retiring with a nice pension. The loyalty of company-to-employee and vice versa just isn’t there anymore. Along with shorter employment duration comes shorter residence in the area in many cases. People are moving more often and farther away for work.

Recent surveys are yielding some interesting responses from the younger generation when they’re asked about renting versus owning. Right now, with lower prices and interest rates, rent-versus-own ratios in most areas show that it’s cheaper to own than to rent. Even so, younger workers and professionals are renting anyway. Even those who can afford to buy and have a down payment aren’t doing so. When asked, their attitudes revolve around:

1. Little confidence in their long term employment prospects.
2. They anticipate that they may have to move away if their job or employer changes.
3. Even if home values are rising, it can take at least five to eight years in many cases to recoup the costs of sale through equity appreciation.
4. If they rent, they can upsize for family or other reasons every year. If they buy, they would probably oversize their home selection to anticipate future needs due to item 3.

While lenders are loosening up a bit, there are still plenty of unanswered questions about the future of Fannie Mae and Freddie Mac. The role government will have in mortgage guarantees going forward is unknown. Mortgage lending is a competitive business, though with far fewer major players than before. However, without some guarantees to cover losses due to default, lenders will raise the barriers to getting a mortgage and/or increase interest rates to offset risk. All of this uncertainty is helping to depress desire for home purchases.

There has been increased interest in lease purchase of homes, mostly spurred by the ability of real estate investors to do “sandwich leases.” They can take control of a home from a motivated seller and place a tenant buyer in it for a monthly cash flow profit and a profit if both purchase options are exercised. The investor has no obligation to buy, so they aren’t at risk if their tenant buyer decides not to do so. If more consumers learn of lease purchase options, there could be an increase in demand from buyers. They can enter into a lease purchase, usually for three to five years, an acceptable window in today’s uncertain employment world. They have the option to purchase at or before the end of the lease, but not the obligation to do so.

The American Dream may not be dead, but it’s ill and needs some TLC from the economy. If the economy begins to improve and buyers perceive it to be sustainable, they may just start dreaming of homeownership seriously again.
Dean Graziosi


Millennials, Jobs and Home Buying

The great thing about the Internet is that there are so many ways to seek out information and research trends and the news. The problem with it is that it’s easy and free to publish information, which tends to fragment information into lots of smaller bites. This is especially true with SEO, Search Engine Optimization, as a goal. Writing an article with a single topic focus is usually better for search engine exposure.

In my news feeds and resources about housing, I also have to watch employment and economic trends. This week it’s been interesting reading about the Millennial Generation and their time in jobs and even their home buying plans. It took four different recent articles to piece together my impressions for this one. Two of them deal with the time today’s younger generation stays in a job before moving to another, one deals with their plans for buying a home, and the last addresses what some call the “five-year rule for buying a home.”

It’s obvious that there is a lot of attention on this younger generation, as the first time home buyer market has been depressed for a while now. As first-timers were a significant force in home price appreciation, their lack of participation is considered a big damper on an improving market and economy. So, what’s the story?

Stan Humphries, the chief economist at Zillow, has been tweeting about the Millennial Generation and their future home buying plans. One graph published shows the results of a survey showing a whopping 85 percent of respondents expect the median age of first time home buyers to rise in the coming years. More of them are expected to stay at home with their parents longer, while there will be a corresponding decrease in new household formation in this age group.

Another article over at moneyning.com speaks to advice received by a first time buyer. The major point family and friends made was that you shouldn’t buy unless you stay in the home for five years or longer. They called it the “five-year rule.” This isn’t a new concern, as the closing costs and commissions involved in selling a home to buy another have always been high enough to require some time in the home to build equity and enjoy appreciation.

The advice to offset these limitations hasn’t changed either. Avoiding buying the most home you can afford is first. This way you may be able to pay extra payments toward your mortgage to get to break-even sooner. Another newer trend relates to our current housing situation. Some buyers are buying a home with a plan to move in less than five years, but moving without selling. They intend to rent out the home for income rather than selling at a loss.

Two other articles about changing jobs are only slightly different in the number of years their data says today’s Millennials stay in a job. One states 4.6 years, while the other says 4.4 years. Surprisingly, this is actually longer than in the past, up from 3.5 years in 2002. One survey says that 91 percent of Millennials expect to stay in their current jobs for less than three years. If this group adheres to the five-year rule, there’s not going to be a lot of home buying going on.

From a real estate investor’s point of view, I see some good years ahead for rental property owners. They’ll need to be selective, as this generation knows what they want. Buying the right homes which appeal to their lifestyles and where they will be employed should keep occupancy and rents high. I’m not wishing for continued bad news for home prices and overall purchase numbers, but I can certainly take advantage of the situation.
Dean Graziosi