AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2012 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/4 Secrets to Scoring a Bank-Owned Property Dealhttp://realestate.aol.com/blog/2012/03/29/4-secrets-to-scoring-a-bank-owned-property-deal/http://realestate.aol.com/blog/2012/03/29/4-secrets-to-scoring-a-bank-owned-property-deal/http://realestate.aol.com/blog/2012/03/29/4-secrets-to-scoring-a-bank-owned-property-deal/#commentsFiled under: , ,

Bank owned propertiesScanning the foreclosure listings to snap up your dream home on the cheap?

It's tempting indeed to take the bottom-fisher route, especially when bank-owned deals are so plentiful and annual housing prices in 20 major cities combined declined 3.8 percent in January, according to the closely watched S&P/Case-Shiller U.S. National Home Price Index released Tuesday.

But veteran real estate agents offer up some sound advice for would-be buyers homing in on bank-owned properties, short-sale deals, and foreclosures. Here's how to keep the frustration level low when shopping for your bargain-basement dream home.


1. Get your terms straight.

"Foreclosures" is a loose term that buyers bandy about when telling their real estate agent to seek them out. In most cases, homebuyers aren't really looking for foreclosures in the technical sense.

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"A real foreclosure is when the owner is losing their house and it's being auctioned off on the steps of the courtyard. You need to have cash to buy these houses, so it's usually only investors who buy foreclosures and get amazing deals," says Kristi Roberts, a real estate agent with McGuire Real Estate's Berkeley, Calif., office. "If the house doesn't sell on the courtyard steps, then it becomes a bank-owned house."

Nonetheless, when clients ask to be shown foreclosures, most real estate agents know they are likely asking to see bank-owned properties. Chris Dasaro, a Coldwell Banker real estate agent in the Grosse Pointe Woods, Mich., office that also serves the Detroit market, estimates that upward of 80 percent of his clients want to be shown bank-owned properties.


2. Don't get too excited about lowball listings.

In the greater Detroit area, where January housing prices were actually up 1.7 percent over last year, according to Case-Shiller, Dasaro has seen a couple of instances in which bank-owned properties were listed as much as 50 percent below the market rate. That, of course, generates a feeding frenzy where bidders in some cases end up paying above the market rate for a particular house.

Dasaro estimates that he encounters lowball situations like these in about 5 percent to 10 percent of the houses he sees, and notes that buyers would be wise not to get overly excited with anticipation that they could snap up the house at that listed price.

The lowballing is not a sales technique, but rather the likely result of the banks relying on broker price opinions rather than appraisals for the properties, says Roberts. She notes that she has also seen situations in which the banks have overpriced properties by a large margin, but often in those cases potential buyers are not disappointed if they don't get the house.


3. Prepare for big differences in bank-owned property sales.

Compared to purchasing a house from a private owner, there are more hoops to jump through when buying a bank-owned property, real estate agents say. Buyers should brace for:

o. Far fewer disclosures from the seller regarding the condition of the property, because the banks rarely, if ever, visit the property they are selling, say real estate agents.

o. Being pressured to buy "as is." Mary Ann Griffin, an associate Realtor with RE/MAX in Atlanta, says buyers should always make a contract contingent upon the buyer's home inspection, even if the contract notes that the sale will be done in "as is" condition. Griffin notes that securing a VA or FHA loan requires banks or other sellers to make appraiser-recommended repairs.

o. "Gotcha" addenda in the contract. Roberts notes that banks will often include an addendum to the contract that may contradict something called for in the beginning of the document. Other addendum provisions may include clauses such as a $100-per-day penalty fee for every day the buyer is late in closing the deal or fulfilling a contingency.

o. Lots of fine print. "Buying bank-owned property is like the Wild West of real estate. Sometimes you just have to put on your cowboy hat," Roberts says. "I'm a real cautious person and address these things by reading the document carefully and having a good team, where we stay on top of it and pay attention to the timelines and deadlines."

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4. Know what you're in for in short-sale situations.

Bargain hunters are also keen to take a gander at homes listed as a short-sale. But venturing down this path can often lead to long delays in home ownership, and can sometimes fail in the end.

Under a short sale, the owner puts together a hardship packet that's sent to the bank and will sometimes include a sales contract with a prospective buyer, Roberts says. But it can take as long as six months before a bank responds as to whether they will accept the seller's plans for a short sale.

Roberts knows of one particular case in which an investor bid on a Berkeley, Calif., foreclosure on the courthouse steps. Although this investor lost the bid, he was curious nonetheless about the house that sold for $365,000 at auction. In making an inquiry, Roberts learned that the same house was in the final stages of approval for a short-sale for $425,000.

Not only was it a case of the left hand not knowing what the right hand was up to at the bank that was overseeing the transactions, but it ended up costing four months of time for the prospective short-sale buyer, Roberts says.

Another tactic short-sellers use is the illusion of a tight deadline. Recently, Roberts has seen a couple of short-sale auctions in which the listing price is set extremely low but the bids end up closer to the market rate -- but surprisingly, the window of opportunity doesn't close after the auction is over. The short-sale real estate agent continues to accept offers on the house for several more days in order to land the absolute highest price.

Says Roberts: "I have clients who want to go to these fake auctions, and we'll go, but I see how frustrating it can be for them."

Griffin offers these tips to short-sale buyers:

o. Try to avoid "potential short sales" and seek out "approved short sales" instead. In some cases, banks will approve a homeowner conducting a short sale, even if no prospective buyers are listed.

o. Work with an experienced agent who has a track record with short sales.

o. Document all correspondence (for example, by using email).


All About Home Short Sales

 

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]]>bank owned home salesbank owned homesbank owned propertiesbuy foreclosurebuying guideforeclosures for saleshort salesDawn Kawamoto, The Motley Fool2012-03-29T15:00:00+00:00Iowa Land Boom Defies U.S. Real Estate Slumphttp://realestate.aol.com/blog/2012/01/03/iowa-real-estate-boom-defies-slump-felt-elsewhere/http://realestate.aol.com/blog/2012/01/03/iowa-real-estate-boom-defies-slump-felt-elsewhere/http://realestate.aol.com/blog/2012/01/03/iowa-real-estate-boom-defies-slump-felt-elsewhere/#commentsFiled under: ,

As the Iowa Republican caucus hogs the media spotlight, a less reported but perhaps equally compelling story continues to unfold in the Hawkeye State.

While most of the country continues to struggle with the aftershocks of the housing meltdown, Iowa is riding the wave of a remarkable real estate boom. Republican primary candidates in Iowa needn't fear broaching the subject of real estate as they might in other states: farmland prices in Iowa have skyrocketed more 30 percent in the last year alone, MSNBC reports.

The rapid climb in prices continues a trend that has emerged over the last few years in states across the grain belt. Prices of farmland in some parts of Iowa rose 23 percent last year, The New York Times has reported. The spike has been driven by a boom in crop prices. Buoyed by rising demand for ethanol, the price of corn, for example, has tripled in only half a decade, reports MSNBC.

Some land in Iowa recently sold for $20,000 an acre, setting a state record.

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Reminiscent of the real estate boom leading up to the 2007 meltdown, the rise in farmland prices has some experts cautioning that Iowa and its neighbors could be incubating the country's next real estate bubble. The Times reports that the president of the Federal Reserve Bank of Kansas City, Thomas M. Hoenig, told the Senate Agriculture Committee in February that farmers could suffer from a drop in real estate prices if grain prices were to fall and interest rates tick up.

But the risk of implosion may not be as high as some fear, since many land buyers are paying hefty cash down payments for their purchases. MSNBC was told that buyers are often required by banks to pay for close to half of the land that they buy upfront. Strict lending standards like that stand in stark contrast to those that fed the subprime loan crisis.

For the moment, Iowa appears to be poised to enjoy the current rise in real estate prices.

Meanwhile, real estate markets for much of the rest of the country are still sputtering. The Standard & Poor's/Case Shiller Index released last week reported that real estate prices dropped in 19 of 20 cities from September to October. And as of October, banks looked to be on track to repossess 800,000 homes by the end of 2011.

One recent report from the National Association of Realtors has offered a glimmer of hope on an otherwise bleak horizon, however. According to the report, pending home sales in November reached their highest level in a year and a half, possibly indicating the beginning of a market turnaround.

Also see:
How Large We Live: Average Home Sizes Across the U.S.
2011 in Real Estate: The Top 11 News Stories

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]]>farmland iowaiowa farmlandiowa farmland bubbleIowa land boomiowa real estateiowa real estate boomiowa real estate bubbleNational Association of Realtorsreal estate iowaTeke Wiggin2012-01-03T16:15:00+00:00Where Are the Real Home Bargains? Not Where You Think!http://realestate.aol.com/blog/2011/11/02/where-are-the-real-home-bargains-not-where-you-think/http://realestate.aol.com/blog/2011/11/02/where-are-the-real-home-bargains-not-where-you-think/http://realestate.aol.com/blog/2011/11/02/where-are-the-real-home-bargains-not-where-you-think/#commentsFiled under: , , , , , , , ,



What if you could buy a house for $25,000 in a neighborhood that wasn't a battle-scarred slum and rent it out for $750 a month as soon as the ink was dry on the deal? Where are these deals that let you recapture your investment in just three years and from then on enjoy a steady monthly income from the property?

If you said Phoenix, Las Vegas or south Florida, you'd be wrong says Paul Habibi, a principal of Habibi Properties and real estate professor at UCLA Anderson School of Management.

Here's a hint to the place Habibi thinks is the hottest investment around.




Yep, Habibi is humming "Kansas City" right along with Wilbert Harrison, Fats Domino and the 50 or so other recording artists who covered that tune. As for a real estate investment, Habibi says Kansas City, Mo., is ripe for the picking.

Habibi's approach to real estate deals is not for novice investors, but it is for those who can tolerate some risk and buy into a statistician's mind. He's developed a matrix that filters the top 30 MSAs (metropolitan statistical areas) through their projected growth rates (increasing population is good), unemployment (the lower, the better), and whether the city has a diversified job platform (Silicon Valley won't get his money).

He also rejects places where other investors have already scooped up the bargains (forget Florida and Las Vegas). Phoenix, popular with many investors, also fails his litmus test. It was built as a retirement community and lacks a job infrastructure for future growth, he says. And those Texas cities that everyone bandies about -- Dallas, Austin, San Antonio -- while their prices have remained flat and they seem to have escaped relatively unscathed from the recession, there are so many investors already there that they're tripping over one another.

Kansas City is just about perfect, said Habibi, whose company recently concluded its first phase of buying 32 single-family homes there in "C-level" neighborhoods for a price point of $25,000 each, spent $5,000 to $10,000 on repairs and now rents them out for about $750 each. He expects to double or triple his holdings in Kansas City with his second investment fund, for which there is a minimum buy-in of $100,000 for accredited investors to participate.

Kansas City's population grew at a faster-than-national average pace from 2000 to 2010. With an unemployment rate of 8.7 percent, it falls below the national level of unemployment of 9.1 percent. The city has a diversified industry base that includes Sprint Nextel Corporation, Hallmark Cards, the Fort Leavenworth military base, UPS and a Ford assembly plant. Google has selected the city for its ultra high-speed broadband network project. Plus Kansas City has a business-friendly reputation for encouraging retention of companies.

Habibi discourages individual investors without much experience or tolerance for risk to try to fly solo. He credits much of his success from having an infrastructure in place -- people to scout and inspect the homes, screen for tenants, manage the properties on-site and swiftly deal with eviction issues.

For those who don't want to listen to the expert, click on the images below of some homes for sale in the Kansas City area that are worth checking out:



See other homes for sale in the Kansas City area at AOL Real Estate.

Also see:
College Town Real Estate Investments Score High Marks
Upside Down on Your First House? Just Buy a Second One!
Viewpoint: Why No New Houses May Be a Good Thing

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Find out how to calculate mortgage payments.
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]]>how to invest in real estatePaul Habibireal estate bargainsreal estate investingAnn Brenoff2011-11-02T11:45:00+00:00$1 Million Parcel of Land Can Be Yours for $350http://realestate.aol.com/blog/2011/11/01/1-million-parcel-of-land-can-be-yours-for-350/http://realestate.aol.com/blog/2011/11/01/1-million-parcel-of-land-can-be-yours-for-350/http://realestate.aol.com/blog/2011/11/01/1-million-parcel-of-land-can-be-yours-for-350/#commentsFiled under: , ,

The economic downturn has caused pain for countless American homeowners and wreaked havoc on businesses small and large. But there's one segment of the population that just continues to do better and better: real estate investors. For proof, look no further than the latest real-estate reality programming, "Flip Men," in which two tough guys buy foreclosed properties at auction, sight unseen, in the hope of finding a gem among the crystal (crystal meth, that is).

But you don't have to be a TV star to pick up property for pennies on the dollar. Consider Tuesday's tax foreclosure auction in Ann Arbor, Mich. According to Washtenaw County Treasurer Catherine McClary, as little as $350 -- the minimum opening bid -- could land you a choice parcel worth about $1 million. "I don't know where you can buy acres and acres of land for single family homes for $350," McClary told Ann Arbor.com. (That's one of the 21 available parcels pictured above.)

While bidders in Michigan have to show up in person if they want to take advantage of the "last chance" prices, most municipal foreclosure auctions have moved off the courthouse steps and onto the Web. Last year, foreclosure-plagued Florida, for instance, became the first state to to turn to cyber-auctions to process distressed property sales, making it possible for potential buyers anywhere to get a piece of the action. That may be one reason why foreign buyers accounted for 31 percent of all Florida home sales through March of this year, according to a Fox Business report.

McClary's auction is for properties foreclosed on for back taxes, but with so many homeowners in distress, property auctions of all kinds are enjoying a spike in popularity these days. Take a gander at these luxury homes, for instance, all upward of $1 million (in some cases way upwards) and all soon to be or recently on the block:

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Also see:
5 Foreclosure Flip Tips From the 'Flip Men'
Luxury Homes on Auction Block in Bid to Buy Some Buzz
Tempted to Invest in Real Estate? Read This First

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
See celebrity real estate.

 

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]]>1 Million Parcel of Land for 350Ann Arbor real estateFlip Menforeclosure auctionreal estate auctionstax foreclosure auctionWashtenaw CountyWashtenaw County Treasurer Catherine McClaryAOL Real Estate Editors2011-11-01T14:18:00+00:00Are Low Mortgage Rates Killing the Housing Market?http://realestate.aol.com/blog/2011/10/31/are-low-mortgage-rates-killing-the-housing-market/http://realestate.aol.com/blog/2011/10/31/are-low-mortgage-rates-killing-the-housing-market/http://realestate.aol.com/blog/2011/10/31/are-low-mortgage-rates-killing-the-housing-market/#commentsFiled under: , , , , , ,

This may fall under the category of "too much of a good thing," but there is growing sentiment that the historically low interest rates on mortgages are actually fueling the stagnation of the housing market.

By keeping rates low, the hope was that more people would be motivated to buy homes. And when that didn't happen, fingers of blame were pointed in the direction of more stringent lending standards. People can't qualify for loans, can't avail themselves of the low rates -- so went the bank-bashing.

But along came some numbers that tell a different story. Yes, lending standards are making it tougher to qualify for loans now, but the reality is that fewer people are even trying. The national Mortgage Bankers Association, which tracks new mortgage applications weekly, says those applications were down 14.9 percent last week from one week earlier. The group expects to see mortgage originations fall from an estimated $1.2 trillion in 2011 to $900 billion in 2012.

Could it be that when Federal Reserve Chairman Ben Bernanke announced that the low interest rates would be around through 2013, buyers just plopped back on their couches waiting to see if the housing prices would fall even further?

The 'Luxury of Waiting'

"By keeping rates low for two years, you gave buyers the luxury of waiting to see if the market is at the bottom," says Paul Habibi, professor of real estate at UCLA's Anderson School of Business Management. "Why wouldn't you wait if you were a buyer?" he asks. "There are no expectations of home value appreciation, so all that low interest rates have done is create a big holding pattern in buyer behavior."

So should we be praying for rates to start creeping up?

"Rising rates are absolutely a better motivator than falling ones," says Dan Green, loan officer with Waterstone Mortgage, who runs the award-winning TheMortgageReports.com website. He notes that for the second straight year, low rates sparked a boom in refis, but did little to help the purchase market.

It's kind of maddening for mortgage guys like Green who underscore that a 1 percent mortgage rate drop, like the one we've had since last year, translates into an instant 11 percent increase in purchasing power.

"Falling mortgage rates do more to help home affordability than falling home prices," he says. Yet still no one is buying.

Which leads to the next line of thinking: If lower interest rates immobilized buyers, might not rising rates serve as a cattle prod? A few good pokes in the bellies of reluctant buyers might just get them off the couch and back into the game.

Also see:
Want a Mortgage? Avoid These 8 Mistakes
Upside Down on Your First House? Just Buy a Second One!
Mortgage Mod Hell: Trapped Between Lenders, Collectors

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Find out how to calculate mortgage payments.
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]]>Ben Bernanke mortgage ratesDan Green Waterstone Mortgagehome saleslow mortgage ratesmortgagesrefinance your homerefinancingrising mortgage ratesTheMortgageReports.comAnn Brenoff2011-10-31T11:00:00+00:005 Foreclosure Flip Tips From the 'Flip Men'http://realestate.aol.com/blog/2011/10/25/5-foreclosure-flip-tips-from-the-flip-men/http://realestate.aol.com/blog/2011/10/25/5-foreclosure-flip-tips-from-the-flip-men/http://realestate.aol.com/blog/2011/10/25/5-foreclosure-flip-tips-from-the-flip-men/#commentsFiled under: , , , ,

AOL Real Estate asked Utah-based real estate investors Doug Clark and Mike Bard, whose show "Flip Men" premieres this week on Spike TV, for tips on how to flip a foreclosed home. Here's what they had to say to novice investors:


1. Pick a property that is well within your means.

Don't allow yourself to get too overextended on the property. Way too often, we have seen people show up at a foreclosure auction and then after one bad deal, their own house is in foreclosure. Everything will take more time and money then you anticipate, so don't bite off more then you can chew.


2. Prepare to break in.

Foreclosed homes don't come with keys or contracts. It is up to you to find a way in. Our favorite methods are: Slip the lock with a credit card, lift a window, lift the garage, put your hand through a doggy door and unlock the door from within, climb on the roof and look for an open window.

Get creative and have fun with this step! If you want a set of keys to your new property you need to make your own or call a locksmith and pay $150 to get the job done. Make sure you research the local laws regarding abandoned property. You may have to store any items you find in the house for a period of time before they are yours. Former owners almost never come back for their items, so it's not out of the question to find cash, furniture, collectibles, firearms and even vehicles.


3. Check everything.

Most foreclosures were abandoned. These homes have many issues, so check all the systems thoroughly. The last thing you want is to find out that the roof is bad or the furnace needs to be replaced the day before closing.

A great tip: Speak to the neighbors. You would not believe how much they know about the houses around them. Don't avoid disclosing bad news with the house, because the people you sell to will notice everything. Budget for contingency items because they are always there, especially in foreclosures.


4. Tour other houses for sale.

Take an afternoon and tour two or three homes similar to the one you hope to flip. This is your direct competition, so view it that way. How is the curb appeal, paint colors, smell, clutter, layout, backyard, etc. This is especially important if you are new to the business and don't have the same reference points that a professional flipper does.


5. Price aggressively.

It's easy to overprice a listing, it's difficult to under-price one. If you under-price the property, you will get a lot of attention and showings fast, and people will compete for the house. Set the price to move. If you are not getting showings and no one is calling to see the house, then it is priced too high. If you are getting a lot of attention and people are walking through but no offers are being made, then the price is right, but there is something wrong with the house. Call the agent for details and don't be afraid to ask why the buyers are passing on your house.

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Also see:
Mansion or Meth House? Flip Men Want to Know
Viewpoint: Feeling Guilty About Buying a Foreclosure?
'Mortgage Prof': 5 Reasons Banks Would Rather Foreclose
Tempted to Invest in Real Estate? Read This First

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]]>Ann Brenoff2011-10-25T14:40:00+00:00Hey, Foreign Investors: Buy a House, Get a Visa!http://realestate.aol.com/blog/2011/10/20/hey-foreign-investors-buy-a-house-get-a-visa/http://realestate.aol.com/blog/2011/10/20/hey-foreign-investors-buy-a-house-get-a-visa/http://realestate.aol.com/blog/2011/10/20/hey-foreign-investors-buy-a-house-get-a-visa/#commentsFiled under: , , ,

home soldIt's no secret that one of the few bright spots in the housing market today comes from all-cash buyers, many of whom are foreign investors. But a new bipartisan bill in the Senate aims to take this trend to its most logical (and controversial) end -- buy a house and you'll qualify for a resident visa in the U.S.

The bill, proposed by Sens. Chuck Schumer (D-N.Y.) and Mike Lee (R-Utah), seeks to lure foreign buyers by offering a resident visa in exchange for a cash purchase of at least $500,000 on a single-family home, condo or townhouse, according to The Wall Street Journal.

The proposal takes its cue from the "EB-5" program (formally known as the Immigrant Investor Program), in which foreigners who invest in job-creating projects that are worth at least $500,000 in high-unemployment areas are granted green cards.

The bill is not, however, without its detractors. Richard Smith, CEO of Realogy, the parent company of realty heavies like ERA, Century 21 and Coldwell Banker, told The Wall Street Journal that it's an unnecessary measure -- even without the incentive, foreigners are already snapping up American property.

And he may be right. Of the $1.07 trillion spent on existing home sales between March 2010 and March 2011, about $41 billion changed hands thanks to foreign investors, according to the National Association of Realtors. Additionally, all-cash sales accounted for 30 percent of all purchases -- much of which is generated by foreign investors facing favorable exchange rates.

On the other hand, Sen. Schumer told the Journal, the proposal is a quick way to shore up demand for the country's housing overstock without costing the federal government anything. Until first-time homebuyers overcome the hurdles at the banks, and repeat buyers find ways to unload their current homes, increased sales to foreign investors may be the best way to absorb some of the nation's enormous inventory of homes.

The investor visas would not leapfrog current waiting lists, which should prevent wealthier foreigners from jumping ahead of other immigrants. The bill also requires investors to apply for a separate visa to work in the U.S, says the Journal.

Readers, what do you think? Would such a bill help or hurt the U.S. economy?

Also see:
Viva Las Vegas! Sin City Now Bargain City
When It Comes to Square Footage, the U.S. Is Cheap
Require 20% Down on a House? Hong Kong Tried That
Pity the Homeowner Who Tries to Sell in These 10 Cities


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]]>buy house get visabuyers marketChuck SchumerEB-5foreign investment in US real estateforeign investorsimmigrant housingImmigrant Investor Programimmigrant real estateSen Mike LeeStefanos Chen2011-10-20T16:00:00+00:00Thinking About Investing in Real Estate? Take 5 Tips From a Prohttp://realestate.aol.com/blog/2011/09/22/thinking-about-investing-in-real-estate-take-5-tips-from-a-pro/http://realestate.aol.com/blog/2011/09/22/thinking-about-investing-in-real-estate-take-5-tips-from-a-pro/http://realestate.aol.com/blog/2011/09/22/thinking-about-investing-in-real-estate-take-5-tips-from-a-pro/#commentsFiled under: , , ,

With home prices and mortgage rates surfing the bottom of the real estate trough, it's no surprise that folks with money to spend are jumping into the investment market. According to a recent study by Move.com, real estate investors are buying three houses for every one house bought by someone for their personal use. And it's a trend that's likely to continue for the foreseeable future. So AOL Real Estate invited the experts from BiggerPockets blog to help our readers understand the opportunities--and pitfalls--around real estate investing. In this column, veteran investor Michael Zuber explains what he would do if he were starting out today.

The very first thing I would do is get down on my knees and thank my lucky stars to be beginning my investment career at absolutely the best time of our lifetime. Remember, fortunes are made by investing at depressed levels and at the bottom or near bottom of cycles.
Step One: Analyze Your Market & Learn What Deals Really Are
The next thing I would do is get off my butt and start doing my basic homework. I would go out and see no less than 50 and probably 100 properties in my investment area of choice. I am not kidding! I would immediately build a spreadsheet with data on no less than 100 properties. Things like Prices, Expected Rents, Repair Budgets, etc. This would give me the basis or foundation to understand what is a good deal, what is a bad deal and what is a great deal.

Step Two: Establish Your Deal Selection Criteria
After I have built my basic understanding of the market I would decide on what criteria I want to use to decide on what is and isn't a good deal. I recommend every investor pick one metric that is easily transferable between property types. For me that metric is "yield," or my expected return on all cash outlaid to secure and rehab a property. Today I personally look for expected yields in excess of 20% in my market.

Step Three: Start to Make Offers
After understanding my market and deciding on my criteria for identifying a great deal I would start making offers on properties that met my criteria. I would hold fast to my criteria and not let bidding wars drive up prices. In fact, you should only expect to get 1 out of every 10 properties you make an offer on. If your success rate is higher than that I believe you are offering too much on your properties.

By following this strategy I am convinced I could secure four investment properties with government-backed loans inside of 90 days and secure 10 properties inside my first year. Every property I bought would have a 30-year fixed interest rate and I would be a very happy man.

As an Alternative: Find Passive Real Estate Investment Opportunities
Now if my market didn't offer these types of returns or I didn't have the time to devote to learning a new market I would still find away to participate. I would find an investor with a proven track record, a simple-to-understand process and become a passive investor. This would insure a decent return with a lot less headaches, reduced risks and still give me the upside I want.

In the end if I were starting today I would not let this investment cycle pass me by. I would become a very active investor in my market and if my market didn't offer returns I would find a way to be a passive investor in another market that offered great returns.

Michael Zuber is an active buy-and-hold real estate investor who still has a full-time job. Michael is not an agent or broker, and simply uses the internet and agent relationships to drive his business. He currently averages at least one deal a month and has developed laser focus on his 5-step process. You can learn more about the process and past deals at www.wealthbuildingpro.com. This post originally appeared at BiggerPockets.com.

See also:
Tempted to Invest in Real Estate? Read This First
College Town Real Estate Investments Score High Marks
Young Real Estate Investor: Where to Stash That Extra Cash?

More from BiggerPockets:
Deciding When to Sell Your Rental Property
Are Home Inspections Necessary for Real Estate Investors?

More on AOL Real Estate:
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]]>biggerpocketsInvestinginvesting in real estatereal estate investingBiggerPockets2011-09-22T14:00:00+00:00Real Estate Investing: Learn What the Pros Knowhttp://realestate.aol.com/blog/2011/09/16/real-estate-investing-learn-what-the-pros-know/http://realestate.aol.com/blog/2011/09/16/real-estate-investing-learn-what-the-pros-know/http://realestate.aol.com/blog/2011/09/16/real-estate-investing-learn-what-the-pros-know/#commentsFiled under: ,

There were plenty of people to blame for the housing bubble -- our politicians, the big banks, average American homeowners, and of course, the investors and the speculators. Many acted like the market would keep climbing forever, ignoring the reality that was staring us in the face all along -- fundamentals matter.

I mention this because I'm here to talk to you about real estate investing, and to do so without reminding you about the dangers of ignoring the fundamentals would be remiss of me.
For over six years now I've run an online real estate investing community called BiggerPockets.com where I've heard thousands of stories of success and failure. I've seen new investors who've been wildly successful and some very experienced ones make truly poor decisions. The main reasons that people fail is that they either don't fully understand the fundamentals of what they are doing or they ignore them.

Real estate investors are now responsible for purchasing a significant portion of homes on the U.S. market. This trend will increase as we continue to struggle as a nation.

What does that mean for you?

Real estate investing isn't for everyone; there are plenty of other investment vehicles that people can and should explore. But there are few other strategies that will allow someone as much control over their financial future as real estate investing.

Many new, starry-eyed investors are seduced by the hope of getting rich quickly through real estate. And while some will, most won't. Like anything else, sustained success in real estate investing comes from hard work.

With education, effort, time, planning and, hopefully, the support of your friends and family, you can become extremely successful in real estate, and my goal is to help you to do just that.

Each week, Bigger Pockets will bring AOL Real Estate readers insights from a wide range of experts. My hope is that these men and women who spend their days in the trenches of real estate will be able to give you the tools you need to become a successful real estate investor.



More From Bigger Pockets:

Also See:
College Town Real Estate Investments Score High Marks
Top 10 Towns for Working Toward Home Ownership
Will Baby Boomers Rock the Housing Market?


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Joshua Dorkin is the founder and CEO of BiggerPockets.com, the country's premier real estate investing community. He has been investing in real estate for more than 10 years and built BiggerPockets to change the way real estate investors do business.

 

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]]>biggerpocketsjosh dorkinreal estate investingJoshua Dorkin2011-09-16T07:00:00+00:00Young Real Estate Investor: Where to Stash Extra Cash?http://realestate.aol.com/blog/2011/09/08/young-real-estate-investor-where-to-stash-extra-cash/http://realestate.aol.com/blog/2011/09/08/young-real-estate-investor-where-to-stash-extra-cash/http://realestate.aol.com/blog/2011/09/08/young-real-estate-investor-where-to-stash-extra-cash/#commentsFiled under: , ,

Andy Buman, 29, got interested in real estate a few years ago while working in construction. Since then, he has purchased two bank-owned single-family homes near Omaha, Neb., as rentals, and last fall bought a primary residence for himself and his fiancée, Valerie (both pictured at left). He has managed to save $20,000 in cash, and is looking for the smartest way to apply it.

Buman, an Iowa State graduate who now manages a call center, comes from a family of strivers. His great-grandfather emigrated from Germany and started the farm in Harlan, Iowa, where Buman grew up -- and where his uncles and grandfather still raise 2,000 head of cattle and 1,000 acres of corn. (His dad went into banking.)

From the outset, Buman focused his real estate interests on a few small towns surrounding a retail distribution warehouse and a trucking center, about 25 miles from Omaha. The Omaha/Council Bluffs, Iowa metropolitan area had an unemployment rate of 4.9 percent in June, which explains how Buman managed to rent both homes five hours after listing them.

"There's a lot of employment -- services, farming, cattle, railroads, stores -- it's not hard to get a job here," says Buman. "A lot of employees want to be close to work and the cost of living in these little towns is next to nothing."

His first purchase was a two-bedroom, 900-square-foot home for $24,000. He invested $5,000 in repairs, rented it for $550 a month, and has already paid off the mortgage. Buman followed up with a four-bedroom 1,500-square-foot home. He paid $34,500, invested $7,000 in repairs and rented it for $700 a month. The home still has a mortgage balance of $16,500 at 5.5 percent.

Last fall, Buman and his college sweetheart, who are marrying later this month, bought a three-bedroom ranch 10 minutes from Omaha for $185,000. It's close to family, and to the University of Nebraska Medical Center, where Valerie begins her residency next spring.

The home has a 30-year, fixed-rate mortgage at 4.25 percent, and a balance of $168,000. When the balance on the loan falls below $148,000, the couple can stop paying mortgage insurance, which costs $94 a month.

Buman's question: With his extra $20,000, should he pay off the mortgage on the rental property? Pay down the single-family home to eliminate the mortgage insurance payment? Or consider another option?

See the full story at Daily Finance.

Also see:
College Town Real Estate Investments Score High Marks
Low Refi Rates Are Great, But Not for Everyone
5 Reasons Why Real Estate Deals Collapse

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]]>Andy Bumancash investinginvesting extra cashmortgage insurancemortgage ratesmortgagesreal estate investingrental incomeyoung investorsDailyFinance Staff2011-09-08T08:00:00+00:00Agent's Commercial Property Sale on eBay Includes a Bankhttp://realestate.aol.com/blog/2011/09/06/agents-commercial-property-sale-on-ebay-includes-a-bank/http://realestate.aol.com/blog/2011/09/06/agents-commercial-property-sale-on-ebay-includes-a-bank/http://realestate.aol.com/blog/2011/09/06/agents-commercial-property-sale-on-ebay-includes-a-bank/#commentsFiled under: , , , ,



Give it to central Indiana real estate agent Jeanne Clarkson for thinking outside the lockbox. The former eBay power seller has packaged three buildings and posted them to the popular online site where the public can buy just about everything -- including, thanks to her, a bank building in the town of Anderson, Ind.

Jeanne ClarksonClarkson (pictured) told AOL Real Estate that she's sold $6 million in commercial real estate using eBay's classifieds section, and is frankly a little surprised that other agents haven't caught on to the idea. Right now, she's got a package on the site priced at $4.5 million that includes a good portion of Anderson's skyline: the First Merchants Bank building (pictured below), the Union Building (shown above) and a property at 11th and Jackson streets; she already sold the Union Building once using eBay. While there's plenty of real estate being auctioned on eBay, her listings appear under eBay's classifieds section.

Clarkson, who is the broker of Elan Real Estate Inc., told WRTV Indianapolis that it's important to use technology in marketing real estate. She said she's already heard from people around the world on this listing. Her client is a California investor.

And we suppose if eBay fails, she could always try Craigslist.



Also see:
Realtors' Latest Challenge: A Surge of Squatters
Low Refi Rates Are Great, But Not for Everyone
How to Buy Foreclosures
VIDEO: All About Short Sales

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]]>Anderson IndianaAnderson Indiana real estateeBayElan Real EstateFirst Merchants BankJeanne Clarksonproperty sale ebayselling real estate on ebayUnion BuildingAnn Brenoff2011-09-06T14:30:00+00:00House of the Day: Living Large at the Jersey Shorehttp://realestate.aol.com/blog/2011/09/02/house-of-the-day-jersey-shore-mansion-gives-reality-show-a-run/http://realestate.aol.com/blog/2011/09/02/house-of-the-day-jersey-shore-mansion-gives-reality-show-a-run/http://realestate.aol.com/blog/2011/09/02/house-of-the-day-jersey-shore-mansion-gives-reality-show-a-run/#commentsFiled under: ,



Thought Snooki and her partners cornered the market on conspicuous consumption? Then you haven't seen this Jersey Shore mansion. With 22 rooms, a 15-car-garage and 650 feet of beachfront (provided Hurricane Irene didn't do any re-landscaping), the place gives the reality-TV cast a run for their booze-soaked bills.

Located in Mantoloking, an uber-ritzy community "down the shore," the home, listed at $16 million, has eight bedrooms, five bathrooms, and stunning views from multiple porches and decks, as well as a brick patio, pool and 200-foot dock.



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Robert Schwartz of Van Sciver Realtors has the listing.

Click on the pictures below to see some other mouth-watering residences in Mantoloking, N.J.:



See more Houses of the Day and other homes for sale in Mantoloking, N.J. on AOL Real Estate.

Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email ann.brenoff@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to respond to each submission.)

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]]>House of the Dayjersey shorejersey shore houseMantolokingnew jersey real estateSnooki houseTeke Wiggin2011-09-02T06:00:00+00:00House of the Day: Detroit Gem in Need of Polishinghttp://realestate.aol.com/blog/2011/08/22/house-of-the-day-detroit-gem-in-need-of-polishing/http://realestate.aol.com/blog/2011/08/22/house-of-the-day-detroit-gem-in-need-of-polishing/http://realestate.aol.com/blog/2011/08/22/house-of-the-day-detroit-gem-in-need-of-polishing/#commentsFiled under: , , ,



Flipping through the Detroit MLS these days produces some sad-trombone listings, but we keep coming back to a 10,395-square-foot baronial Tudor listed for $759,000.

Since not even the Motor City can stay woeful forever (that's our inner Pollyanna speaking), we decided to feature what appears to be a steal. Yes, it is in Detroit proper. Properties in the suburbs, while down in value, still carry heftier price tags than those in the city -- where officials were literally giving homes away to first responders who would take them and just agree to please live there.

But this one? It looks like a gem that needs some polishing to us. Your thoughts, readers?

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What you need to know: It's the brick-and-limestone mansion built in 1922 for Charles Van Duesen, then the president of S.S. Kresge, one of the 20th century's largest and best-known retailers. The Kresge chain was renamed the Kmart Corporation in 1977 and today is the parent company of Kmart and Sears. Let's just say that Mr. Kresge had a good eye for the fine finishes and the wallet to back his tastes.

Located in Palmer Woods (for non-Detroiters: This is a good thing), the seven-bedroom mansion has gigantic rooms and has been completely restored. There is a large walnut-paneled central great hall with a fireplace and art-tiled flooring, another huge living room with a carved marble fireplace, and a dining room with a stenciled beamed ceiling. The library is built with quartersawn oak and there is lots of art-tiling in the bedrooms. The home has a billiards room and a two-bedroom apartment over the garage.


Kenan Bakirci, a Realtor with Max Broock Realtors in Birmingham, is both the owner and listing agent.

See more Houses of the Day and other homes for sale in Detroit, Mich. on AOL Real Estate.

Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email ann.brenoff@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to respond to each submission.)

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]]>Charles Van DuesenDetroitDetroit estatesDetroit real estateHouse of the DayPalmer WoodsAnn Brenoff2011-08-22T06:00:00+00:00House of the Day: A Sparkling Waterfront Condo for Much Lesshttp://realestate.aol.com/blog/2011/08/15/house-of-the-day-a-sparkling-waterfront-condo-for-much-less/http://realestate.aol.com/blog/2011/08/15/house-of-the-day-a-sparkling-waterfront-condo-for-much-less/http://realestate.aol.com/blog/2011/08/15/house-of-the-day-a-sparkling-waterfront-condo-for-much-less/#commentsFiled under: , , , , ,

Many investors have Miami Beach in their sights, so we thought we'd do a little bargain-hunting ourselves. We turned up this uber-sophisticated 20th-floor condo on Miami Beach's Millionaires' Row with a price tag of $1.2 million. At the market's peak, it would have been listed at least 30 percent more.

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The two-bedroom, two-bath unit was built in 2008, a year that will likely go down in Florida real estate annuals as the year they wished never happened. But as a result of the housing market crash, there's this 1,322-square-foot marbled-floor gem with ocean views, glass sliding interior doors that replace room partitions, and loaded up with designer fixtures and appliances.

The kitchen has glass counter-tops and top-of-the-line everything. And the master suite has a heated Neorest toilet, spa tub and a rain shower.

The unit is in Mei, an Asian-influenced building. It's located on 175 feet of beachfront and the building is covered in shimmering glass, surrounded by flowing water.

Amenities include a lagoon pool, 24-hour concierge, valet parking, tea lounge, Zen library, spa, yoga studio, and a state-of-the-art fitness facility with private massage rooms.

Judy Zeder at The Zeder Team has the listing.

 

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]]>Florida real estate marketHouse of the Daymiami beachmiami beach condosmiami beach real estatereal estat investorsreal estate investingAnn Brenoff2011-08-15T06:00:00+00:00College Town Real Estate Investments Score High Markshttp://realestate.aol.com/blog/2011/08/10/college-town-real-estate-investments-score-high-marks/http://realestate.aol.com/blog/2011/08/10/college-town-real-estate-investments-score-high-marks/http://realestate.aol.com/blog/2011/08/10/college-town-real-estate-investments-score-high-marks/#commentsFiled under: , ,

college real estate

The closest thing to a sure bet in real estate may be going to college.

Investments in college towns -- places where the community is shaped by a university's presence -- have done well while other niches in the housing market have, for the most part, fallen off the Dean's List. It comes down to the basic law of supply and demand. College enrollments have increased while the supply of on-campus housing hasn't. More often, students are turning to off-campus options. And that's where you should be standing with your wallet ready to fill with rent checks.

How secure an investment is college housing stock? The default rate for Fannie Mae and Freddie Mac's student housing portfolio has been less than one-half of 1 percent -- outstanding given what's been going on in the rest of the housing market.

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Michael Zaransky, co-CEO of Prime Property Investors and author of "Profit by Investing in Student Housing: Cash In on the Campus Housing Shortage," says the formula to finding the best deals is simple. Take the number of students in a university and divide it by the number of on-campus beds. Start with the big universities that get a lot of applicants, the schools everyone wants to get into, Zaransky said.

Yes, you have to be willing to become a landlord, and some of your tenants may be frat boys majoring in Partying 101. But if you can get beyond that, there is money to be made.

A Steady Stream of Available Tenants

Zac Bissonnette, 22, a 2011 graduate from the University of Massachusetts, Amherst, agrees. He bought his first rental condo near campus at the end of his freshman year. While he intended to move into it, he realized that he could rent it out -- even hiring a management company to handle any problems -- and still be cash-flow positive. A year after he bought the first unit, he bought a second, larger condo that he shared with a friend whose rent helped cover the carrying costs.

"It's a smart investment," said Bissonnette, the author of "Debt-Free U: How I Paid for an Outstanding College Education Without Loans, Scholarships, or Mooching off My Parents." He added, "When was the last time you heard of a college or university spending money to build a new dorm?"

Zaransky says the key to the success of the student housing niche is that the tenants' ability to pay rent isn't tied to their having jobs. In most rental situations, renters leave when they lose or change jobs. A vacant apartment is a siphon hose to an owner's bank account. But when it comes to students, there is a steady stream of them; those who graduate in June are replaced with new faces in September. College enrollment has been up, no one is building new on-campus alternatives and, even in communities with rent control, the turnover is so rapid that the laws don't seem to curb rental income growth.

Where the Growth Is

Zaransky likes the sun states with high population growth: Florida, Texas, California. He says to stick with the top-tier marquee schools -- "the places where everybody wants to go." At some state universities, like the University of New Mexico in Albuquerque and the University of Nevada in Las Vegas, fewer than 10 percent of students live on campus.

His company is the largest off-campus landlord for Purdue, Notre Dame, the University of Tennessee and Florida State in Tallahassee.

According to a national study by Move, Inc., investors are expected to outnumber traditional homebuyers in their local markets by 3 to 1, and 56.5 percent plan to put their investments to work as rental properties.

"Local markets with universities or colleges can be an attractive option for many local real estate investors," said Move, Inc., Chief Executive Officer Steve Berkowitz. "Housing demand in college towns is generally high and vacancy rates are usually low. Combine the supply and demand ratio with rising admissions and the 5 percent rise in rental rates expected by the end of the year, and rental property in college towns can be a smart option for the right investor."

Also see:
How to Make Renting Off-Campus Pay
Off-Campus Rentals: Staying Safe in a College Town
Why Are So Many Real Estate Deals Falling Apart?

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]]>college town real estatecollege townsinvesting in college townsinvestment propertyNotre Dameoff-campus housingreal estate investmentrental propertystudent housingtop+10+real+estate+markets+in+college+townstop10realestatemarketsincollegetownsAnn Brenoff2011-08-10T06:30:00+00:00House of the Day: Where the Deer and Antelope Playhttp://realestate.aol.com/blog/2011/08/08/house-of-the-day-where-the-deer-and-antelope-play/http://realestate.aol.com/blog/2011/08/08/house-of-the-day-where-the-deer-and-antelope-play/http://realestate.aol.com/blog/2011/08/08/house-of-the-day-where-the-deer-and-antelope-play/#commentsFiled under: , ,



While it doesn't carry a price tag quite as mind-blowing as its neighbor (nearby Jackson Land and Cattle Ranch is listed at $175 million), this $100-million ranch near Jackson Hole, Wyo., known as "Walton Ranch," still is certainly one of the most expensive properties on the American market.

The 1,848-acre property nestles between Yellowstone and Grand Teton Parks, and plays host to a rich array of wildlife. Elk, bear, moose, mountain goats, bighorn sheep, antelope and deer roam its expansive woodlands and meadows, which stretch along three miles of Snake River. And even with all that nature at hand, the ranch affords residents easy access to world-class ski resorts and vibrant nightlife -- it's just five miles to Jackson Hole.

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To protect the property's pristine environment, the former owners placed it under conservation easement in 1983. That distinguishes it from neighbor Jackson Land and Cattle Ranch, whose heftier price stems partly from the fact that it has 35 separate lots open for development. Walton Ranch is a functioning cattle ranch and hay farm with a two-story main house and manager's complex containing two homes, bunkhouse outbuildings, sheds, barns, and, of course, corrals.

Ranch Marketing Associates is handling the property.

Got a tip for House of the Day? Know of an exceptional or unusual property currently listed for sale? Please email ann.brenoff@huffingtonpost.com with your suggestions and be sure to include links to listing details and photos. (Due to the volume of response, we unfortunately are unable to respond to each submission.)

See more Houses of the Day and other homes for sale in Wyoming on AOL Real Estate.

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]]>100 million housecattle ranchGrand Teton National Parkgrand teton parkHouse of the Dayjackson holeJackson Land and Cattle RanchWalton RanchYellowstone National ParkTeke Wiggin2011-08-08T10:15:00+00:00Watch: When to Pay Off the Mortgage Earlyhttp://realestate.aol.com/blog/2011/07/13/watch-when-to-pay-off-the-mortgage-early/http://realestate.aol.com/blog/2011/07/13/watch-when-to-pay-off-the-mortgage-early/http://realestate.aol.com/blog/2011/07/13/watch-when-to-pay-off-the-mortgage-early/#commentsFiled under: , , ,

pay off your mortgageWhile paying down the mortgage is undoubtedly one of the largest financial burdens many Americans have to contend with, it's certainly not the only long-term investment homeowners need to consider. This is particularly true for homeowners nearing their 60s, for whom financial investments made today can have a lasting impact on their post-retirement income. Our sister site, DailyFinance, addresses this issue in the latest entry of their "Ask the Expert" video series with Regina Lewis.


For 57-year-old Ed, a homeowner nearing the end of his fixed-rate mortgage, the decision to pay off his debt early or begin investing his money elsewhere can make a real difference in just how far his savings will take him. Read his full question, and Regina's video response, below.



Ed asks: I am 57 years old with a couple more years to work before I retire. I currently have an equity mortgage on my home with $30,000. The house payment is less than $100 a month. I pay $1,100 a month toward the loan. Here is my question. Should I be paying minimal on my mortgage and putting the rest in my 401(k) and hopefully make money on that money, or would you pay the house off by continuing to pay the accelerated payment to get it paid off as quickly as possible? What is my smartest move? I think I know, but want to hear a professional's point of view.

For more expert advice from Regina Lewis, visit DailyFinance.

And to ask the DailyFinance team your own personal finance question, add your comments here.

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]]>dailyfinancehomebuyinghomebuying tipsmortgage paymentspay off mortgage earlyAol Real Estate Staff2011-07-13T14:52:00+00:00Pay Off Your Mortgage Early? It Dependshttp://realestate.aol.com/blog/2011/06/23/pay-off-your-mortgage-early-it-depends/http://realestate.aol.com/blog/2011/06/23/pay-off-your-mortgage-early-it-depends/http://realestate.aol.com/blog/2011/06/23/pay-off-your-mortgage-early-it-depends/#commentsFiled under: , , , , ,

pay of mortgageNot that long ago, people bought one house and stayed put in it. After 30 years, they owned it free and clear, and this was a good thing, so went the thinking. Some folks celebrated with a mortgage-burning party, where they took a match to their mortgage papers and rejoiced.

Then along came the housing boom years, and the thinking changed. Only fools stayed put in one loan, let alone in one house. The pressure was on to buy bigger houses and/or refinance into even lower-rate loans; who cared if those lower rates lasted 90 days, let alone 30 years? Anyone who couldn't keep pace would find themselves priced out of the housing market forever, we were told.

Well, forever came and went pretty quick.

Today, as people look to trim expenses and reduce household debt, you may be wondering whether to remain in the 30-year club or pay off your mortgage early if you can. The answer depends on many factors, including your stage of life and how strong a tolerance you have for its uncertainties.

Broadly speaking, experts say you should consider paying off your mortgage if:
  • You are nearing retirement.
  • You expect to stay in your house for at least several more years.
  • You have enough liquidity from other investments to handle emergencies.


Let's take a closer look at each of those considerations.

Retiring

Having a mortgage is a great tax deduction. But if you don't have much taxable income -- the largest taxable income is likely your paycheck -- you may not need that deduction once you retire.

The other side of this coin is that if you won't have income, it might be nice to not worry about paying for your shelter each month. Remember that you'll still have property taxes, home upkeep and maintenance and, if you live in a condo, an HOA fee.

Deciding factor: Check with your accountant and determine the impact on your taxes of paying off your loan early.

Staying Put in Your House

This is a factor that depends on your age, health and family situation. Is your house suitable for you to age in place?

Things to consider are whether there are stairs, a bedroom on the ground floor, and room for a live-in caregiver should you need one. Is it near good health care and convenient for shopping? Close to family, friends and the activities you enjoy? If you anticipate limiting your driving, is the house in a location where you can get around by public transportation?

Deciding factor: The decision to move is one that can be made at any point; you don't need to make it on the day of your retirement party. And as such, you also don't need to rush to pay off your loan that day either.

Liquidity

You presumably have considerable cash reserves if you're contemplating paying off your loan. Would investing that money elsewhere serve your interests better?

If you took the money you would use to pay off the mortgage and instead invested it in your 401(k) or IRA, would you get a better rate? "Use the money to build wealth," said Wayne Bogosian, president of the PFE Group and the co-author of "The Complete Idiot's Guide to 401(k) Plans."

By paying off your mortgage, you are taking a highly liquid asset -- your cash -- and converting it into something far less liquid -- home equity. Once your money is tied up in equity, the only way to get at it is through a home equity loan. In other words, the bank will charge you to use your money.

Deciding factor: Do you really have enough cash in your emergency fund and have fully funded your retirement? If not, save the match or find something besides your mortgage to burn with it.

For more insight on mortgages and related topics see these AOL Real Estate guides:
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
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]]>mortgagespay off your mortgageAnn Brenoff2011-06-23T08:00:00+00:00Tempted to Invest in Real Estate? Read This Firsthttp://realestate.aol.com/blog/2011/06/03/tempted-to-invest-in-real-estate-read-this-first/http://realestate.aol.com/blog/2011/06/03/tempted-to-invest-in-real-estate-read-this-first/http://realestate.aol.com/blog/2011/06/03/tempted-to-invest-in-real-estate-read-this-first/#commentsFiled under: , , , ,

invest real estateWith home values depressed and interest rates low, a lot of folks are beating the drum for real estate investment. "Record affordability provides rare window of opportunity," announces a recent Inman News report on the hottest investment markets. "Housing is back -- beat the crowd!" urges Fortune magazine. Don't get left behind in the interest-rate dust, warns the Mortgage Bankers Association.

So if you have the means and you're tempted to buy property with the aim of renting it out and/or flipping it for a profit, what do you really need to know? We asked seven leading real estate investment bloggers for their best advice on how novices can jump into the game.

1. Richard Warren, author of "A Rehabber's Tale, the Reality of Fixing and Flipping Real Estate" and frequent speaker before real estate investment clubs:

Start small with something you can handle. My first foray into real estate investing was a learning experience of epic proportions. After watching a few too many episodes of "This Old House," and having some very basic experience in home improvements, I set out to renovate a foreclosure on Long Island. I embarked on a project that was so ambitious that I'm still amazed that I not only survived, but made a small profit. It was planned as a six-month project but actually lasted more than two years.

I can't stress enough that novice investors need to stay within their abilities until they acquire some experience. Risk is inherent in real-estate investing. It is not something that can ever be avoided, but it can be managed in a way that increases the likelihood of success. While experience is certainly the best teacher, there is much that can be learned from books and real estate websites such as Bigger Pockets. Take the time to learn before taking the plunge into investing.

2. J. Scott Steinhorn, a fix-and-flip rehabber and landlord out of the Atlanta area:

In many ways, being a professional investor is analogous to being a professional athlete -- you don't start by hitting home runs or shooting three-pointers. Instead, you hone your skills by spending time learning, practicing and truly understanding the basics.

For real estate investors, these basics include: researching your local real estate market, analyzing investment deals, understanding property values, estimating renovation costs, defining your business and tax entities, networking with successful investors, etc. With the plethora of websites devoted to real estate these days, all the information you need to put yourself on the track to becoming a world-class investor is right at your fingertips. If you truly want to achieve long-term success as a real estate investor, take the time to build a strong foundation of knowledge and skills.

3. Peter R. Giardini, expert in current economic and housing issues, successful real estate investor and coach:

Don't just jump in! Spend time learning your local market from both an economic and housing point of view. Become a member of your local real estate investors association and network with other investors who are actually doing deals. Offer to take them to lunch and learn from them which strategies (wholesaling, rehabbing, renting, lease-option, tax liens, etc.) are working in your market.

Develop a plan that captures those strategies, recognizes your weaknesses and plays to your strengths. Figure out what resources (critical education, contractors, Realtors, funding sources, etc.) you need to get started. Pick one strategy and become an expert at it. Stay focused and don't switch strategies! Remember Rome was not built in a day, and you can't eat an entire elephant in one sitting.

4. Joshua Dorkin, founder and CEO of the real estate investment website
BiggerPockets.

It is so easy to get caught up in the hype and excitement that go with the premise of getting rich from real estate investing. One of the most common mistakes I see new investors make is to jump in and buy a property without the fundamental understanding of what happens next. In fact, they typically don't understand if what they just bought is even a good deal.

If you don't know how to evaluate a property -- from the perspective of a potential landlord or flipper -- learn how. If you don't know how to manage, market, evaluate, lease or sell, then learn. Treating your real-estate investing like a business will save you hardship and potentially serious financial losses. The popular saying in real estate is that you make your money when you cut your deal to buy the property, not when you sell it. That's 100% true.

5. Marty Boardman, Chief Financial Officer for Rising Sun Capital Group, LLC, a real estate investment firm based in Gilbert, Ariz. His firm purchases homes at the courthouse steps and public REO auctions.

So you want to be a real estate investor? What should you do first? Become a Realtor. As a Realtor, you'll have total access to the Multiple Listing Service in your area. That's where you'll find bargains on REOs and short sales. More importantly, you'll need the MLS to do market analysis. It's unrealistic to ask a Realtor to do this work for you, especially in the beginning.

Most Realtors I know don't have the time to help fledgling real estate investors with their due diligence. Sure, there are real estate attorneys and investment gurus that say you shouldn't hold a real estate license. That's because as a real estate professional you will be held to a higher standard. If you are a licensed Realtor and act irresponsibly while transacting a deal there will be painful consequences (like stiff fines and penalties from the state real estate board). But I like being held to a higher standard. I also like knowing if I get into a deal and there are problems I'll have the support of my real estate broker and the state association of Realtors.

6. Jon Holdman, Flying Phoenix LLC, real-estate investor who owns Denver rental properties and has invested in fix-and-flip, development, and mini-storage projects.

If you want to buy rental properties, you need to understand the reality of expenses. New investors sometimes are told "This property has a cash flow. The rent is $1,000 a month and your PITI with 20% down will be only $700. That's $300 a month in your pocket." While taxes and insurance are the start of your expenses, they're only the start. There are many other costs, such as maintenance, property management, utilities, advertising, and legal and accounting charges. In addition to expenses, there will be big capital items such as new roofs, furnaces and sewer lines. Sometimes you have some outlandish expense like a tenant who goes ballistic and does a lot of damage. Or, you have to spend six months with no rent doing an eviction.

If you own one property for a few years, you might get lucky and avoid these items. But if you want to build a portfolio of a dozen properties and hold them for several decades, you will have to deal with these things. A roof lasts 20 years. So, you better budget 5 percent of the cost of a roof every year for every property. If you own 20 properties, you'll be replacing, roughly, a roof every year. And you will have vacancies. Even if vacancies are low in your area, when one tenant moves out you will have to do some cleaning and repairs -- "make ready" as it's known in the business -- before the next one moves in. It's impossible to predict the exact expenses that will apply to any particular property in any particular year. Nevertheless, it is almost always more than taxes and insurance. Setting aside some of your cash flow to cover these unpredictable but inevitable expenses will keep you from losing your property when you're faced with a big bill.

7. William Barnard of Barnard Enterprises, Inc., a full-time real estate investor who has invested in spec building, land development, foreclosure acquisitions, flipping and landlording. He does millions of dollars of real estate transactions each year.

To become a real estate investor, you need both determination and self-motivation. Many try and fail at real estate, mostly because they believe that making money in real estate is easy. It is not. While it is not rocket science, it is hard work.

For me, starting out was an emotional roller coaster. One day, you feel like you are on top of the world, and the next, in a hole too deep for a ladder. Individuals must understand that you must weather the storm, which is where the determination comes in. If failure is not an option, how can you fail? Education is the third important factor and without it, negative life-changing errors can be made. Get educated properly from those with experience in the specific strategy you intend to utilize. Focusing on one strategy will help prevent you from spinning your wheels."

How to Profit from Real Estate Investments

Are you tempted to invest in real estate now in order to rent or flip it?
Yes, to rent it.80 (49.1%)
Yes, for resale.50 (30.7%)
No, are you flipping crazy?12 (7.4%)
I only wish I could afford to.21 (12.9%)



These AOL Real Estate guides can help, whether you're in the market to buy, rent or sell:
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.

 

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]]>how to invest in real estateinvest real estateinvesting in real estatereal estate investmentAnn Brenoff2011-06-03T10:59:00+00:00House of the Day: Iconic Redwood Grove Lists at $8.75Mhttp://realestate.aol.com/blog/2011/05/27/house-of-the-day-iconic-redwood-grove-lists-at-8-75m/http://realestate.aol.com/blog/2011/05/27/house-of-the-day-iconic-redwood-grove-lists-at-8-75m/http://realestate.aol.com/blog/2011/05/27/house-of-the-day-iconic-redwood-grove-lists-at-8-75m/#commentsFiled under: , , ,



The iconic Garberville estate known as Redwood Grove, designed in 1926 by Hearst Castle architect Julia Morgan, has come on the market at $8,750,000. Located in Northern California's Humboldt County, the 5,416-square-foot home has been meticulously restored over the past four years with great attention to its architectural integrity.

The home sits on two acres that border the Eel River and are surrounded by protected California Redwood state parks. The grand manor house has a Gothic-style great room with an exposed redwood beamed cathedral ceiling. There's a wood-burning fireplace and the original leaded glass windows. It is being sold furnished.



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The chef's kitchen to-die-for has custom cabinetry, top-of-the-line appliances and a copper salad sink. The master suite overlooks the river and, of course, the ancient redwood forest beyond. It, too, has a cathedral ceiling.

There are two additional bedroom suites, an office with a built-in desk and cabinets, and a finished basement with a 1,000-bottle wine cellar crafted by a master artisan with bloodwood wine racks.

The property includes a two-bedroom, two-bathroom guesthouse with a fireplace. The original carriage house is a one-bedroom apartment over the two-car garage/shop.

The flat, expansive grounds include an organic orchard and garden, Koi pond with lilies and five terraces for entertaining -- one which sits directly above the river and has a built-in Viking kitchen. Many of the furnishings are custom-made and include Persian rugs and artwork.

Julia Morgan is best known as the designer of the the Hearst Castle and nearby Hacienda at San Simeon Ranch. She designed more than 700 homes, institutional and commercial buildings in her 45-year career, including rebuilding The Fairmont Hotel after the 1906 San Francisco earthquake. Morgan's trademark references to nature are evident throughout this home at Redwood Grove, which includes the restored hand-painted wall panels.

The home is co-listed by Melody Rogers-Kelley of Nourmand & Associates, Beverly Hills and Dave McKenny of McKenny Advisory and Suzi Schultz of Integrity First Real Estate Depot.


More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.

 

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]]>Ann Brenoff2011-05-27T06:00:00+00:00