Finally, an article above Readers Digest but below Wall Street Journal – like as much as I do both periodicals. But as I’ve often said, ‘don’t get your financial advise from Woman’s Day and don’t get your cooking ideas from Forbes’.
The approach to real estate investing is not about jumping in or jumping out. Its not the sound bite on the 6 o’clock news. ‘You are NOT buying a candy bar’; this is your hard earned money you are investing so you can improve life a bit. This is the more in-depth approach I prefer to take. Having invested since my senior year in college, and being the son of a real estate broker who invested in 3 states and did quite well, I’ve bought, rehabbed, sublet, rented, built new, managed for self and others, and done it in about every kind of market and every season. As far as I’m concerned, as far as I’ve seen in the 34 yrs I’ve been at this, there is virtually always an opportunity in every market and at any time.
Sometimes its in a cash deal, sometimes its in the timing – time of year, sometimes equity and profit comes from improvements, other times subdividing land. Take a glance at the article or call me and we’ll chat further.
There are always questions you’ll want to ask yourself, eg:
- What do I have more of, time or money?
- Do I need cash now or want to save up for future period?
- Am I in a tax bracket that would be a better fit for setting up a separate holding entity?
There are many more.
If you are working with a professional, make sure they ask you some in-depth questions BEFORE they help you spend your hard earned money.
Article Link: http://e.house/archives/2593
In fact, read everything you can in this website and call me in the morning: http://e.house/
Sample articles –
Home prices in those areas fell about 40 percent on average from their highs, peak to trough, Rood said. And inventories are the tightest in Detroit compared with the other cities listed in Rood’s top five. Detroit only has two months of inventory available for sale, while there’s about seven months of inventory in Ft. Lauderdale, for instance.
Meanwhile Mobile, Ala., one on the worst housing markets to invest in, according to Rood, has about 19 months of inventory.
Along with that region, Chicago, Charlotte, N.C., Philadelphia and St. Louis are among the worst housing markets to invest in right now, according to Rood.
( google the article title for full story)
If population could increase value of real estate, Africa would be a wealthy area. But as the WSJ notes, you also need job &/or income growth. Will “right to work” help bring income to MI ?
It’s help other states that enacted such laws. Further impact on real estate inventories is how foreclosures are handled. In states such as NY where the bank must initiate a legal case action to foreclose RealtyTrac points out that prices are much more slow to return to growth than in non-judicial (e.g. MI ) states.
For us left in MI, here’s some sobering stats and realities. Per the Wall Street Journal:
“Between 1980 and 2011, total employment in right-to-work states grew by 71%, .. in non-right-to-work states … 32%. .. in Michigan … 14% during that time…. inflation-adjusted compensation grew 12% in right-to-work states, but just 3% in the others….
…the bill he signed into law on Tuesday is “pro-worker,” …does not change any aspect of collective bargaining other than preventing employees from getting fired for choosing not to join or remain in a union and pay union dues or agency fees, which may go toward political causes they don’t support. Options are of course part of the reason America was formed, in contrast with communist & socialist economies.
The good news ? MI just became a RTW state – as such, we are now in competition for importing businesses & workers to fill new jobs. This should bring buyers where we’ve had sellers for so long. Those that are against this new law I can’t really agree with, to wit: “Collective bargaining still exists … workers are of course free to organize….”
[MI is the only state to loose population in the last 10 yrs…. the statistics go on and are overwhelming in their conclusion ….so what is this guy thinking >] “…Democratic Rep. Doug Geiss threatened: “There will be blood. . . . There will be repercussions.”
After you read the below article I posted in 2012, jump on forward to this:
… so said Time mag back in July 2011. Click the photo to check their logic.
I wouldn’t have called out the buyers quite so quick, but now I’m bullish on buying. Why now ? Here’s a couple Detroit area articles showing recent price movements.
BTW, nationally, the big increases are right now happening in the areas that took the biggest hits….no surprise in that, to wit: Miami, Detroit, Arizona, LasVegas…etc.
- Home prices rise in Michigan, across U.S. in September over 2011 levels 9/2012
Hot Foreclosure States
States with the largest % of savings based on September 2012 avg. sales price vs. avg. foreclosure sales price.
State Foreclosure Savings Kentucky 50% Massachusetts 48% Michigan 48% Connecticut 45% Illinois 45% Ohio 44%Select State:
Michigan Cities with the highest increase in quarterly average home sales prices based on the last two calendar quarters, updated Nov 2012.
City, State Avg. Home Sales Price Quarterly % Change Lansing, MI $70,417 37.05 % Otsego, MI $125,500 36.02 % Rockwood, MI $157,702 32.01 % Ecorse, MI $15,238 31.90 % Spring Lake, MI $174,808 31.41 % Eaton Rapids, MI $119,000 23.94 % Twin Lake, MI $105,474 21.64 % Milford, MI $255,177 21.16 % South Lyon, MI $237,061 20.25 % Davisburg, MI $237,600 18.72 %
Local statistics for the 2nd quarter/2012 show # homes for sale down, avg time on market down, avg price up, etc… by small margins. more
The least expensive housing market nationally at the beginning of 2012 was metro Detroit, followed by nearby Toledo, Ohio, according toNAR The third-cheapest market was Lansing-East Lansing, Mich.
In the first quarter of this year, half of the houses sold in the Detroit area went for less than $52,300 per NAR.
|Cape Coral-Fort Myers, Fla.||28.1 percent|
|Grand Rapids, Mich.||19 percent|
|Palm Bay-Melbourne-Titusville, Fla.||16.9 percent|
|Erie, Pa.||16.6 percent|
|Tampa-St. Petersburg-Clearwater, Fla.||16.1 percent|
|Fort Wayne, Ind.||14.8 percent|
|Peoria, Ill.||13.6 percent|
|Bismarck, N.C.||12.4 percent|
|Elmira, N.Y.||12 percent|
|Sarasota-Bradenton-Venice, Fla.||11.1 percent|
“We are right back where we were two years ago. I would put money on 2012 being a bigger year for foreclosures than 2010,” said Mark Seifert, executive director of Empowering & Strengthening Ohio’s People (ESOP), a counseling group with 10 offices in Ohio.
“Last year was an anomaly, and not in a good way,” he said.
…….The big investors are wooed by what they see as a vast opportunity. There are close to 650,000 foreclosed properties sitting on the books of lenders, according to RealtyTrac, a data provider. An additional 710,000 are in the foreclosure process, and according to the Mortgage Bankers Association, about 3.25 million borrowers are delinquent on their loans and in danger of losing their homes.
With so many families displaced from their homes by foreclosure, rental demand is rising. Others who might previously have bought are now unable to qualify for loans. …….. more
If you’re thinking about investing in a rental property, experts say low home prices combined with low interest rates make this the best time in years to become a landlord. 5 specific tips
In theory, it should be a good time to buy a home. In the worst-hit areas, properties have lost more than half their value.
Yet as the average 30-year mortgage rate has slipped below 4 percent, the combination of employment insecurity and unusually tight standards for lending are discouraging buyers en masse. Lenders are asking for extensive income verification and tax returns. One lender I contacted for refinancing even wanted me to get an accountant to certify that I wasn’t lying to the IRS…….
But to be successful in today’s real estate market, you need to understand that the game has changed.
Here’s my list of the biggest shifts: full story
……But now is an amazing time to buy investment property. Purchase a foreclosure or two (or up to 10, if you can find the financing), and focus on how much income you can get each month. If you buy a foreclosure in the Atlanta area for $75,000 and can get $800 to $1,000 per month in rent, that’s a terrific return on investment.
Palm Coast, Fla., Las Vegas and Cape Coral, Fla., were all among the former high fliers. Many large counties which have 20% or higher occupancy rates are in these same regions. Lee County, Fla., Yuma County, Ariz., Mohave County, Ariz., and Osceola, Fla., each had a precipitous drop in home prices and increases in vacancy rates as homebuyers disappeared when the economy went south. ………..
Vacant homes and homes which lose double-digit amounts of their value each year irreparably undermine the tax
base. And, as services fall, fewer potential homeowners will consider investing in the area.
again, full story – click photo
1. Lake County, Mich.
Number of homes: 14,966
Vacancy rate: 66%
The states with the most distressed housing inventory are New Jersey, Illinois, Maryland, and Florida,… read more
..Existing home sales plunged nearly 10 percent in February to their lowest level in nine years. It was the largest drop since July. Forty percent of those sales were on distressed properties. And new home sales are on track to come in at just 250,000 this year, the fewest since the Kennedy administration, when there were 120 million fewer people in the United States….
Nationwide, forecasters expect house prices to drop at least 5 percent more this year.
..A recent study by Capital Economics found that 60 percent of sales are to foreigners and investors, most of them paying cash. In fact, in international real estate circles, the U.S. is viewed as the “new emerging market,”………..
the “buyers’ strike” has caused house prices to drop, along with an epidemic of foreclosures. What’s worse, the long depression in real estate is probably not over. S&P has forecast that home prices will drop by 7% to 10% this year. The S&P Case-Shiller Index has dropped for most of the 20 largest real estate markets over the last several months. RealtyTrac recently reported that more than 1 million homes were foreclosed upon in 2010. more
Cities like Flint, Mich., have economies based on a single major industry. In Flint’s case, that industry is auto manufacturing. When that industry began to decline, Flint was unable to diversify to prevent a population exodus.
……..Since the American auto industry began its decline in the 1980s, Flint has consistently lost at least 10% of its population each decade. Massive layoffs and plant closings have devastated the city, and unemployment rates remain well into the double digits. more
Ask me how this affects investment in the area.
The era of get-rich-quick real estate is dead. The era of increasing long-term wealth in your home is back.