Real Estate Investment Property - Something's Devouring Profits?

You can spot "alligators" of all sizes in real estate investments by their ability to "eat" away profits. How did we get "alligators" in California where the housing market was soaring? I'll tell you how. Properties that won't sell eat away at pure real estate investing profits. On the market for months and no deal yet. Monthly payments, taxes, utilities, insurance. Ouch!! What a nightmare!

Robert Kiyosaki, best known for his Rich Dad, Poor Dad series of motivational books, talked about "alligators" that just keep eating and eating away at would-be profits and he's right. But is real estate investing endangered in California? Not by a long shot. How about the rest of the country? The old "as California goes, so goes the country," right? The great thing about investing in real estate is that there is always an opportunity to be had right around the corner no matter what the doom-and-gloom sayers say.

You might ask, "Will we invest the same way we did when these same properties were selling in hours or days, not weeks and months?" The answer is "a big fat NO!"

Another question to consider, "Will we be more cautious?" A resounding "absolutely!"

The key to investing in a market with so many "alligators" is to buy right and buy smart. Buy right and you won't be so concerned about the sale. Buy right and you can move your property to another investor or just offer it well below market value to a homebuyer. Buyers are thrilled because they get a great deal, and you have plenty of wiggle room and still come out ahead. Buy smart and consider the timing. You may find that "alligators" in California, or anywhere else in the country for that matter, create many motivated sellers. Find a way to solve their most pressing problems that will also give you an advantage, and you will create a powerful and persistent stream of income.

Buy right and you control the deal instead of the deal controlling you. If you bought too high then the "alligators" will be after you. If you have made this mistake, you will know it because the tell-tale sign is that your profits are whittled away every month, and there is no end in sight. Is your property "cash-flowing" or costing you every month? Do you have a viable exit strategy, or are you fretting as the market ebbs and flows? If you answer "yes" to the latter, then you have "alligators" wherever you are.

I have had my share of nightmares in the real estate investing business, and some of them included "alligators." However, I will tell you that when you buy right and buy smart, the nightmares go away and so do the "alligators."

Why Not Purchase Bali Real Estate And Move To Bali?

Bali is an island in Indonesia which lies between the province of Java and Lombok. Bali has been a popular tourist destination for many years. Tourists from all around the world choose Bali as their vacation destination due to the rich culture and topography of this province. Bali is also referred to as the island of peace and tranquility.

Bali being an island, has been naturally blessed with beautiful pristine shorelines and clean beaches. It enjoys a sunny and warm weather for most of the year. This is why you can choose to fly to Bali anytime during the year and still enjoy enough sunshine to get a tan. There are all kinds of resorts and restaurants which offer traditional local delicacies. There is something for everybody here in Bali.

Bali is also known as the island of gods, which is due to the number of temples that you can find here. Most of these temples have been around since ancient times. Some temples have been carved out in the mountains and in rock formations. You will be awestruck by the beauty and grandeur of the temples seen in Bali.

Lately the Bali real estate market has witnessed a boom in sales together with an influx of tourists visiting the island all year round. Many people love the island that much and consequently decide to purchase property in the area. Buying Bali real estate is nothing short of securing your own piece of paradise. You need to be here in order to understand the beauty of the place. The photographs you see online do not do justice to the natural beauty found in this destination.

The real estate agents here are very friendly and professional as well. They are aware of the regulation and know the in's and out of the Bali real estate market. They would be your best bet if you wish to own property in Bali. Based on your needs they will advise and guide you in making the right purchase. They will ensure that all basic utilities such as water, electricity and broadband access are available for your convenience. As a foreigner they will also help you with the legal proceedings associated with owning property in this province.

Some of the most popular Bali real estate can be found on small hills that have rice fields sloping down towards the beachfront. You get an awesome view of the sparkling beach and the soft wind wafting through the rice fields. If you do not wish to live in Bali the entire year you can opt to rent your property to tourists or give the keys of your Bali home to family and friends who wish to take a break from the hustle bustle of city life. They will love the place and be grateful for the opportunity to spend time in a destination that many refer to as paradise on earth.

Strategies for Flipping a Real Estate Investment Property

Fixing and flipping (fix n' flip) - this is the first thing that comes to mind when people think of flipping a real estate investment property. It is whereby you purchase a property that needs repair, finance all the repairs at your own cost and then sell it as retail property for some profit. Fix and flip is the most reliable way of generating lots of cash on a single deal. If you are not careful enough though, you can run into real trouble when you pay excess for repair or underestimate the cost that repairs will take. As such, you should account for all factors before you make any deal. You should further be conservative and smart enough during repairs, lest you end up spending all your profit.

Refinancing and leasing-option - this second option works as the first strategy but rather than resell the property to generate a profit, you can appraise it at its new value and then go ahead to restructure the financing linked to it. As such, you can be able to sell the property with a lease-option meaning the rent of the tenant should at least cover the mortgage and in case the tenant ever decides to purchase the property, it will mean you will not need to hire a realtor to market and sell the property again.

Wholesale - instead of selling the property as retail, you can think of passing it to a fellow flipper who is looking to employer the fix and flip strategy mentioned above. This way, you will have to wait until you get a lucrative deal in a good market and then turn around and flip your property to a rehabber without having to make any fixing or repairs. It will mean that you will sell the property 'as is', under the existing market value - exactly what your fellow flipper is searching for). Even though you could make a tiny profit as compared your fellow flipper, you will not incur any repair costs meaning you could walk away with several thousand dollars.

The last strategy that you can employ in investment property, although it's somewhat riskier than the rest, involves predicting your local economy. If you bump into a lucrative real estate market and make perfect timing, you can get into a contract for a condo or house under construction, or even one under planning. If all fall into place, you can wait until the end of the development and construction process, and then resell the condo or home at a retail market value for a huge profit. Important to note however is that in case the local economy backfires on you, you will be stuck with your property which without a shadow of a doubt will deflate in value.

Fantastic Deals in Ogden Valley, Utah Real Estate - A Property to Invest In

Ogden Valley in Utah is the most picturesque place on the earth. If you are a lover for raw natural beauty then this valley has a lot to offer you. Living in the lap of nature is a divine experience. This place is really perfect for nature lovers. It has a natural charm that has been untouched by man's exploitation of his surroundings. It is free from pollution since most part of this valley is rural with typical mountain community. Commercial zoning is very little. You can either live or vacation in this mountainous region. Snow basin real estate consultants can help you acquire property in this area. However, if you are considering it as a tourist destination, you should hire the services of Ogden Utah Lodging.

Information about the Valley

The valley is centrally located between Snow Basin, Powder Mountain and Wolf Creek, Utah. It has three townships renowned for snow sports, music concerts, biking, hiking and dining. It is also famous for skiing. Talented tri-athletes participate in huge numbers for snow sports competition. This place is perfect for a vacation. If you are thinking of investment or buying a second home then Powder Mountain real estate can be of great help. They have thorough knowledge of this place. When you live in a place for 20 years, you know every nook and corner of it. This experience serves as an advantage and you can expect the best advice.

Tips to Hire Ogden Valley Utah Real Estate Consultant

There are some features that you must consider while hiring a real estate consultant. In this article, we share some tips to help you make the right decision.

* The real estate consultant should be forthright in his approach. He should be honest, diligent and fair in his dealings. Exaggerating facts, over-selling, miss-selling and inflating the rates are unfair business practices. Stay away from such realtors. It is easy to identify them. All you need is a little presence of mind and carefulness. Pay them a visit personally to find out their traits and qualities.

* Ogden Valley real estate consultant possesses great knowledge about the area. It usually comes with experience and may be extensive if the realtor is a local. Someone who has lived around the valley or city will know more about the place than an outsider will.

* The realtor should be thorough with legal framework. Ideally, he must appoint a lawyer for preparing the property agreement. Ensure that the paperwork is in place, if required get it checked by a lawyer.

* The broker must possess a valid license for trading in real estate/property. This pre-requisite will protect you in case there is a discrepancy. Keep these tips in mind while hiring Ogden valley Utah real estate.

How To Wholesale Real Estate and Get Quick Cash

Out of all the ways to make money in real estate investing - Wholesaling and quite honestly is one of my favorites, personally. It is the strategy we used to avoid financial disaster in 2001, when the events of 9/11 caused the collapse of my aviation business.

Wholesaling is when you get a property under control and assign your interests to another investor at a marked-up price. And if it appears that I have chosen my words very carefully, you are correct!

Two things you MUST know before we go any further:

1 - It is a well established principal of contract law that EITHER party can assign a contract, unless the contract itself says otherwise. There is a lot of confusion in the marketplace about this - often times the source of the confusion are well meaning, but ill informed real estate agents and real estate brokers. Again - YOU CAN assign any contract (assuming you are a valid party to the contract) unless the contract says otherwise;

2 - Anyone can sell their own property without a real estate license. O.k., so what is property? Property is any tangible thing in which you have some from of ownership interest, including a fully ratified sales contract.

O.k., so before I get in trouble for practicing law, understand this, what I have just said, and will continue to emphasize is that this is about BUSINESS Advice, specifically in the area of real estate investing. NOT legal advice. If there is anything I have written that is confusing, or you are not quite sure about, you need to go speak with YOUR attorney and get her blessing before proceeding.

And since everyone has "Pre-paid" Legal, or an attorney available to them, then this will not be an issue. Dudes, Dudettes, if you are investing in anything, or for that matter living in the US, you need an attorney. Someone to look over your shoulder. If you refuse to have a team of advisors, including an attorney, you really do need to turn off the computer right now and go back to watching re-runs of Gilligan's Island cause you're never going to get rich with a DIY (do It yourself) mentality.

We move on...
So wholesaling is the act of getting a property under agreement (contract, letter of intent, memorandum of understanding) and then assigning your interests to another investor. This is the theory, for the actual mechanics of how it works you are going to invest a little more time than simply reading a blog post. Something for you to now ask about when you attend the next REIA meeting or National Real Estate Investor Conference.

Wholesaling is great because it works in ANY market.

When you have low interest rates, like we have seen over the past three years, and most of the "end-buyers" are rehabbers and first time home owners, you can wholesale to them. And when you get into a higher interest rate environment (like now) and the "buy/hold" investors start coming back into the market, you can wholesale your deals to this group.

However, what I like best about Wholesaling is that it GIVES YOU AN EXCUSE! That is an excuse to get to know more experienced investors. How? By agreeing to wholesale deals to them and in exchange for doing so, you get to know what they know.

Unfortunately, there is not enough space here to go into all the details of advanced wholesaling strategies, but I will come back to this in future posts. What I do want to touch on now is the need to stop confusing Wholesaling with "Flipping" - they are not the same. Or, more accurately, they do not mean the same thing in all circles.
The term "Flipping" comes from the world of Commercial real estate, where wholesale deals occur ALL THE TIME.

On any given day in Washington, DC, or Baltimore, or any major city in America, smart and savvy investors are putting small pieces of property under contract (and making millions) with absolutely no interest in closing on the deals themselves. These street-savvy investors fully intend to take their contracts and assign them to investment groups with much deeper pockets who are in the process of "assembling" a city block to build a huge office building.

The larger investors often times encourage the smaller investors to do this because if the property owner really knew XYZ Corp wanted their property, the price would quadruple. A few years ago, the term "flipping" slid into the language of the folks doing single family deals. "Flipping" originally meant to "flip" ones contract.

However today "Flipping" means many things, including "going to jail". HUH???
Yes, in 2003, the Federal Government (HUD) issued a ruling that broadly labeled "Flipping" as illegal. This ruling has to do with collusion and other bad stuff that resulted in a number of mortgages (which were insured by the Government) going into default. This HUD ruling has absolutely NOTHING to do with wholesaling, but most people do not care about details. They hear the words "illegal" and "flipping" in the same sentence and go no further.

In addition to the HUD ruling, HGTV started producing a television show called "...Flipping...". Again, this show has nothing to do with wholesaling. In the HGTV show (which is a knock-off of a British Show called Property Ladder), the participants buy, rehab and then sell houses. If you have ever watched this show, you would know it is probably something you will never want to do, unless you want to drain your savings account and end up in divorce court.

Unfortunately, whether it is a Federal Ruling, or a TV show, the term "Flipping" has come to mean different things to different people. Therefore, it is probably best to not even use the term.
Wholesaling will make you money. "Flipping" may, or may not get you into trouble - depending upon what type of "Flipping" you are doing.

Again, in a future article (after I get through the other strategies) we'll come back and discuss the various ways to make money wholesaling. For now understand this: Wholesaling works in ALL real estate markets, regardless of interest rates, or the economy.

Scenic Montana Real Estate and Fly Fishing Properties in the Gallatin Valley

Looking to relocate to Montana? The Gallatin Valley offers incredible mountain scenery, world class fly fishing, close proximity to the college town of Bozeman, and a variety of exciting recreational opportunities. All of this and more awaits you in this friendly community of ranchers, farmers, college students, expert fishermen, all with a small town mind-set.

With plenty of wide open space, the best in outdoor recreation and the best fly fishing in the country, the Gallatin Valley in Montana is ideal place to live if you are looking to get away from the hustle and bustle of city life. With full views of the Bridger Mountains and located near Yellowstone National Park, the valley offers a world of splendor, enticing recreational opportunities, and a friendly community spirit that is unmatched in other parts of the country. For those looking to relocate to this peaceful region, there are several resources offering a large selection of Montana real estate and fly fishing property for those with an enthusiasm for the sport.

In the Gallatin Valley of Montana, there are 100's of acres of land for sale and mountain properties for those wanting to reside in this unique region of Montana. Enjoy amazing views of the entire valley, seven snow capped mountains, rivers, and ranch lands. The access to fishing and hiking, incredible geological formations and horseback riding facilities are beyond compare. Located just a half an hour from the lively college town of Bozeman, there are a variety of shopping opportunities, exciting entertainment and a unique way of life to experience. Montana real estate is a significant investment right now, and there are many opportunities to find Montana land for sale.

The Gallatin Valley, including the towns of Bozeman, Belgrade, Manhattan, Churchill, Amsterdam and the ever popular Yellowstone National Park offers an ideal place to reside with an economy largely based on agriculture, and more recently tourism and the high tech industry. The area offers clean air, national forest access and a moderate climate make this a perfect place for outdoor recreation. For those who like to stay a little closer to home residents enjoy the variety of shopping opportunities, parks, world-class museums, and arts and cultural attractions.

TACT Program - Solving the Real Estate and Banking Crises is Simple

There have been numerous articles and books written on the theories or reasons behind the residential real estate bubble and its bursting in 2006, which led to what will likely be remembered as the Great Recession. I can add that I am not one of the parties that share the blame. I was living in Europe from 1994 - 2007 and did not even own real estate in the US during most of that time period! Chalk that up to luck, not prescience.

I would like to focus on what can be done to get out of this mess. The answer is surprisingly simple, although as so many things in life that are simple, it will not be so easy to implement due to the number of banks and organizations involved. They need to change or eliminate the policies, guidelines, and artificial barriers these organizations created to stop the free market from correcting the situation.

The easiest way to understand the solution, is to realize that a bank's balance sheet is far stronger when it has a performing mortgage loan, rather than a bank owned (REO) property on its books. A REO property is in reality a liability to the bank, inhibiting its ability to borrow and lend. A performing mortgage loan is an asset that can be sold in the secondary market, or used to borrow against to make more loans. The situation is similar when a bank has a performing mortgage loan (even at a lower face value), rather than having a non-performing loan that exceeds the value of the real estate backing it.

In the simplest terms, the solution is for the banking industry to use some of the same strategies as real estate investors currently use since bank loans are not available. Investors whose livelihood depends on the returns they earn on their invested capital, do not wait until a buyer comes along with the ability to get financing. With few mortgage loans being made, there are very few such buyers. The investors package financing in with the property sale to have a competitive advantage. The only step the banking industry took in this direction over the last year was their proposal to allow former owners to stay in their homes as renters. The banking industry lacks property management skills, so they picked the worst strategy to try. The banking industry needs to focus on providing financing to sell the homes, not to get into the rental business.

I have been working on this solution for 18 months and so many naysayers told me it could not be done, that I initially believed them. Fortunately I heard about a gentleman across the country that had been working on the same concept. He had sufficient success acquiring bank owned properties from small local banks, that he started holding seminars on the topic. He coined the phrase "Bank Seller Financing" and pitches it as a great way to acquire properties. He appropriately cautioned that this was not a phrase that would get a positive reception within the banking industry, since "seller financing" was viewed as competition by mortgage lenders. I am indebted to Michael P. Watson and his seminar for rebuilding my determination to expand this simple solution to resolve a massive problem - the US housing market crisis.

Let me summarize the US residential real estate market issues, as if there was a US real estate market. In reality there are many sub-markets with varying degrees of these problems and opportunities. Detroit, Cleveland and Buffalo (where I was born & raised) are very different real estate markets than Las Vegas, Los Angeles, Phoenix (where now I live and invest), or most metro areas in Florida. The key issues are:

- property values have declined, in some markets precipitously,
- many homes are now below their mortgaged value, and far below their "market value" during the bubble,
- banks have too many properties they own due to foreclosure,
- banks are faced with many non-performing loans and the prospect of even more foreclosures,
- some counties (like Maricopa County where I invest) are sending out ridiculously low assessments for 2011 and scaring more homeowners into turning their keys over to their lenders, and
- with the current high unemployment rate the majority of people believe that real estate prices will continue to decline, despite evidence to the contrary.

As a case in point, I was shocked when investors at a recent meeting of the Arizona Real Estate Investors Association (AZREIA) were polled about whether they believed housing prices would fall further, are near bottom, or are rising. Approximately 75% felt they would decline, 14% said it was at or near bottom, and 1% (including me) felt they were rising. All of those investors have access to the same very detailed market data, so I was shocked how differently we each filter that data based on what the media and the gurus are saying.

Back to the issues, there is one key issue which is both the crux of the problem, and the crux of the solution. There is not enough money available to make mortgage loans to meet demand. Ask your friendly bank executive if money is available for mortgages and they will give you the party line - "yes, we are lending every day and have plenty of funds available". Publicly available data on lending, current underwriting requirements, and government issued guidelines give a totally different answer. The truth is banks do not have sufficient reserves to make enough loans.

Since banks are not lending, hard money lenders and private mortgage lenders (like my company) cannot even meet 20% of the investor demand for loans, despite charging annual rates of 12-18%. If plenty of mortgage money is available, why do I get daily requests, far exceeding our capacity, for Private Mortgage Loans, Transactional Funding, Seller Financing, Contracts for Deed, and our Lease-to-Own program? Trust me, it is neither because of my good looks, nor because I offer rates below government subsidized bank loans.

Many people believe that demand for real estate is low, and that is depressing the market. The opposite is true in many markets. In the Phoenix market, sales in 2009 and so far in 2010 were on par with the peak years of 2004-2006. Pending sales are now at levels that make those earlier years look like slow periods. Incidentally, during the peak years the Town of Buckeye, where I live, was the fastest growing housing market in the US. By 2008 the bubble burst and about 90% of the properties for sale were distressed sales. Like the rest of the Phoenix market, sales now exceed the peak years, and I have prospective buyers asking for our financing help daily since they can't get bank financing.

The solution to the real estate and mortgage crises is simple, and it is not new and stronger regulation. To the contrary, the more the government meddles the worse things will likely get. The banking industry, and I include the mother hens in FHA, Fannie Mae, and Freddie Mac along with the banks, need to eliminate the self inflicted policies they imposed and barriers they constructed after the real estate market collapsed. These policies are analogous to locking the doors once all the horses escaped.

I recently submitted a number of purchase contracts on bank owned (REO) and short sale properties (with non-performing loans). So to those that say there is no demand - I am ready and willing to buy hundreds of properties that meet my cash flow requirements, if the financing is available. There are another 100 investors like me in the Phoenix area flocking to the auctions, bidding on REO listings and on short sales. If financing were available, prices would be rising even faster than the 13% year-over-year increase we saw in April. That was not a misprint; Phoenix area prices rose 13% since April 2009!

Here are a few of the barriers to mortgage financing:

- REO properties require high reserves, inhibiting lending,
- non-performing loans require accruals and reserves, further inhibiting lending,
- bank REO, short sale and mortgage modification departments are understaffed,
- lending departments have policies to inhibit financing the sale of their own bank's REO's and short sales (notice the Catch-22),
- most mortgage loans help the bank selling the REO more than the one issuing the new loan (not a great incentive for issuing new loans),
- few investors and homeowners have FICO credit scores exceeding 720 (the new underwriting norm),
- individual investors, even those at the top of the Forbes 400 list are restricted to 10 mortgage loans in their name, regardless of assets, net worth and income,
- entities whether corporations or LLCs, as most investment funds are structured, cannot get mortgage loans regardless of their assets, profitability or book value, since those loans cannot be sold on the secondary market,
- bank executives are not aware of the conflicting policies they have put in place,
- too many separate governmental organizations regulate and "try to fix" the mortgage and banking industries, and
- there is intense pressure from the US Treasury for banks to buy T-Bills to finance the deficit.

To me it is very obvious from this list - banks do not have the money to lend due to their weakened balance sheets and reserve requirements. When distressed homeowners face this same dilemma, they reach into the bag of tricks investors use, selling their homes with seller financing, on a lease-to-own contract, contract for deed, or even turning over the deed "subject to" the investor taking over the payments.

Banking industry, meet the enemy - look in the mirror. It is time to heal thyself by implementing the TACT (Toxic Asset Conversion and Transfer) Program. Learn from and work with real estate investors and buyers to sell off your REO and short sale properties. You will strengthen your balance sheets and income statements, property values will continue to rise, fewer people will hand over their keys, and the real estate market will return to normal. This can be done in months, not in decades. For more detailed description of the TACT Program review other articles in this series.

Banking Industry: We have met the enemy, The enemy is us.