What if the Bubble is Real

If the bubble is real and real estate values tumble across the country one thing is for sure, people will still need housing of some sort. So how do you as a real estate investor profit in this type of climate. I think it's more important than ever to be positioned in a hot market. Sure the overall US market will have an effect on a hot market like Provo Utah for example, but if the economy stays strong in Provo then we investors should still be able to make a profit there and in other hot markets. There are still several hot markets in the US to invest in.
You should also consider buying silver, gold, foreign currencies and other investments your financial adviser can help you with. To have part of your wealth in investments that protect you from our falling US dollar is just plain smart. It also allows you to convert back to cash when the bargains appear in the next year or two.
I also like foreign investing more than ever. My properties in Costa Rica and New Zealand are appreciating well and should continue to do so. At the very least I expect them to hold steady if the US market goes down further. I encourage real estate investors here in North America to investigate opportunities in South America, Central America, Australia, New Zealand and Europe to diversify their real estate portfolios. My favorite resources for researching foreign real estate are internationalliving.com and escapeartist.com. These sites report weekly covering several foreign countries on subjects such as, affordability, safety, health care, quality of life, real estate investing,and other criteria. Many North Americans have profited in foreign investing and will continue to do so. In the near future I will be organizing a buying tour of New Zealand. If you are interested in this tour please email me at Kurt@realestatesolutionevolution.com for more info.

Remember, in any market there is money to be made, you just have to figure out how the playing field has changed.

researching emerging markets

The telephone is a great tool for researching new markets to invest in. Here are some of the questions I ask realtors and economic developement staff.

Questions to Ask Realtors to determine if you have found an emerging market to invest in.

1. Is your market a buyers or sellers market? { if it’s a sellers market when did it change from a buyer’s market to a seller’s market}.


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2. Is your market appreciating? {if it’s appreciating how much and what’s the source of information}
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3. What is the inventory of unsold homes on your MLS now? What was it 6 months and 12 months ago?
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4. Where are the buyers coming from? {we want to know if the buyer’s are mostly from out of state coming for the new or expanding job opportunities.}
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5. What is the most sought after property, { you need to know what type of property is in demand to position yourself with the easiest to sell property}.
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6. When did your market start to change from a buyer’s market to a seller’s market, or visa versa? { you want to know how long the market has been in it’s current phase}.

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7. Which direction is the growth heading? {you want to determine where to purchase in the path of future growth}.
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8. Have you seen new employers come to town? Have you seen existing employers expand their operations in your town?
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Questions for Economic Development Agencies to determine if you have an emerging market to invest in.

1. How many jobs were created in your MSA,{metropolitan statistical area} in the last year?

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2. What type of jobs were created,{You need to know what type of jobs were created to determine the average income for the workers. This helps you know what price range of homes the new employees will be looking for}.
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3. Do local politics help or hinder growth in your MSA, {You want to know if there has been legislation passed to give tax breaks to new employers to entice them to relocate}.
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Mortgage Brokers

Be very careful chosing a mortgage broker as they are not all alike. They need to know how to communicate effectively with the underwriters and get the job done. When looking for a good mortgage broker make sure they have 10 years or more in the business and work extensively with investors. Also demand good customer service. If they are hard to get in touch with or don't return calls there is someone else out there that will. It's getting harder to borrow money thanks to all the foreclosures. Real estate investors need to be sharper than ever to get the job done.

Salt Lake City market continues upward

The Salt Lake City market continues to amaze me with it's appreciation gain. The four bedroom, two and a half bath two car garage pre-construction home I bought in September of 2006 has gone from $259,000 to $345,000 in nine months. St George Utah is even hotter. If you are considering buying in either of these markets be sure to do your research. Find out what areas and what type of properties are in demand in these hot markets. Use realtor.com to find listing agents and ask several of them what they think is the best property to buy and what are other investors buying. Be sure and start out the conversation with " I'm calling about your listing I saw on realtor.com, could you please tell me about it"? Then you can transition into market questions.
Good luck!

Real Estate Bubble Bursting

Is the so called real estate bubble finally bursting. The press would have you think so with all of the articles lately on the subject. They have to have something to sell the newspapers and magazines with and real estate is a hot topic. I too read these articles with great interest about the glut of condos and single family homes on the market in Florida, Virginia, Arizona, Las Vegas and other hot markets of yesteryear. There are still a few very hot markets out there that don't seem to get mentioned in these articles and for the savy investor that's just fine for now. By the time the hoard of investors find these gem markets it will just about be time to sell and find the next emerging market that the press and hoard of investors will descend on about a year too late.

Salt Lake City is Hot

Way back in September of 2005 I invested in several pre-constuction homes near Draper Utah. The best of these I bought at $259,000 and is now worth $325,000. The Salt Lke City and Provo areas are on fire. With appreciation running around 2-5% per month it's a beautiful thing. To succeed in this market you have to do your due diligence on what the best zip code is and what type of home to buy. There is still room to profit in this market if you get in now. See my earlier post about investing in emerging markets and good luck to all.

Joint Venture Agreements

A great way to share the wealth is to bring others in on a real estate investment deal with you. Assuming your getting to the point where your track record is great and you only have so much cash to put down you now need to look at bringing in a joint venture partner. This helps in two ways. You can use their credit to obtain a mortgage and or use their money for the down payment and any expenses along the way are split 50/50. I split the expenses 50/50 with my partners but when we sell I get 60% and they get 40% of the profits. This is because we are using my knowledge of real estate investing and I do all the work. The only work my joint venture partner needs to do is go through the mortgage process if I'm using their credit. If I use them only for a credit partner I pay them $500 up front when the deal closes and $2,500 to $3,000 when I sell the property. For a good Joint Venture Agreement example check out Bill Bronchick's book Flipping Properties page 199.

Real Estate Investing Resource

It takes time effort and knowledge to find the most profitable emerging real estate markets in the U.S. but there are shorcuts available. I use Signil Wealth to help me locate emerging markets. They spend over $100,000 for data and then sift through it to find the best markets for their clients to invest in. Signil's process takes the guesswork out of the process of finding emerging markets for the average investor. They do charge a fee for their service but it is very reasonable considering what you get. The service includes their market selection of where to invest, plus they have already set up a team on the ground in that market to assist you in every phase of the process. To find out more on Signil Wealth go to signil.com and see for yourself what they can do for you.

Another Internet Tool For Real Estate Investing

Check out census.gov and go to the Business and Industry catagory. Click on local employment dynamics, on the next page click on local employment dynamics again and then click on State Partners. There you will find the blue coded states that submit emploment figures and articles about that particular states job market. This will help you determine the econmic health of a market. If the job market has been weak but getting stronger this could be a good place to invest. If the job market has been moderate to strong but a large employer is moving to town, pay attention to the neighborhoods that will supply housing for new employees. The more jobs the better chance for real estate profit.

Let Your Mortgage Make You Rich

For several methods of paying your mortgage off early I suggest emailing Lin Ennis at lin@linennis.com and there you will get info on how to shorten the life of a mortgage by as much as 20 years off a 30 year mortgage. I highly recommend her book Let Your Mortgage Make You Rich.

How to Pick a New Construction Home

First thing is to find a viable market to buy a new construction home. Do your research through ofheo.gov and by contacting realtors in that market. On ofheo look for the markets that are coming off previous low appreciation that are now appreciating at 8% or more. Then contact several realtors to find out what is happening in their market as far a growth in the job market or large influx of retirees. These are some of the key indicators of sustainable appreciation. Ask the realtors what is the most popular type of proerty. Is it a condo, or a single family home. Also ask how many days on the market before a property sells and the difference between sold price and list price. In a hot market you will see several sold prices higher than the list price.

Pre-Construction Homes

Some of the best deals can be found in the pre-construction arena. If you pick the right city and the right subdivision you can make huge bucks on a single family home. It's important to get in on the first phase or two of a subdivision. The power is in a small down payment to hold the home while waiting for ground to be broken and the house being built. It can take months for this process and if you pick right your house will appreciate tens of thousands more than your purchase price. It can also stay at the same price you bought it at if you pick the wrong city and subdivision. That's why is't so important to learn how to analyze markets.

Making Money on Your Primary Residence

You can make money on the home you live in by buying low and selling high two years and one day or more later. The gain on this type of sale is tax free up to $250,000 for an individual or $500,000 for a married couple. This is a great way to get ahead if you get a good deal going into the home and can sell for a large profit when you exit.

Real Estate Guru Ranking

If you want to find out information on a famous real estate guru try johntreed.com for opinions of how several gurus performance is rated. This is not the only information you should obtain but should prove to be helpful.

Why Get a Home Warranty

I recommend getting a home warranty protection policy on homes older than 10 years. I always ask that the seller pay for this coverage. It usually costs around $350 depending on the company you buy it from and if you choose add ons like air conditioning or appliance coverage then it can cost up to $450. It covers your new house for one year.

Bandit Signs

Bandit signs are an effective and cheap way to advertise. A bandit sign is a sign that you don't pay someone for the privilege of displaying your message. I use fluorescent colored poster board and cut it into quarters to hang on telephone poles in the vicinity of my rent to own homes. I use the full sized poster board{22x28 inches} on the house itself. These bright colors are great attention getters. In most cities it is illegal to hang your bandit signs on public or private property however if you put them up on Friday afternoon and take them down on Monday morning you usually won't have a problem from the authorities.

Investing Outside of Your IRA

It is possible to invest in real estate using your IRA. This type of investing is known as outside of your IRA real estate investing. This method allows you to use IRA funds to invest in a vacation home that you can use. It also allows you to keep the cashflow from a rental purchased with IRA funds. To find out more go to urangafinancial.com

Magnetic Car Signs

A good way to advertise cheaply is to put " I Buy Houses" car signs on your car. The signs cost about $50-$60 and get a lot of exposure. Be sure and put your cell number or other telephone that you answer the most on the sign.

Realtor Interview Questions pt two

8. How many of your clients are investors?
9. Do you own investment properties? How many? What type of properties? How long? What is the net worth of your real estate portfolio?
10. How are you handling your investments.
11. If Not an Investor: How do you feel about R/E investing?
12. Do you attend R/E investment club/ Chamber of Commerce meetings?
13. What are your top three horror stories and how did you handle them?
14. How available are you.

Realtor Interview Questions pt one

1. Are you passionate about working as a real estate agent
2. What geographical areas are your areas of expertise
3. How long have you been in the area
4. What is you reputation
5. What do you consider to be your best assets
6. Are you a good listener
7. How would you describe your creativity