Real Estate Investing – German Llanos

Real Estate Update 04/20/2013

The Real Estate Expert answers the following questions:

1. Why aren’t they accepting my offer if I am sending full price?

2. What do you mean by “Multiple Offers” and “Highest and Best”?

3. Why the properties that I finding in RedFin.com or Realtor.com are gone when I try to schedule appointments?

4. Are they lying about the rentals in Craiglist? Bait and Switch scam

5. Is this a good time to buy? Procastination nation.

Looking to buy, sell or rent? Contact the Real Estate Expert to german@24chitown.com

En Espanol: Comprar Real Estate en el Peru en 2013?

Hay una burbuja inmobiliaria en el Peru? Hasta donde van a subir los precios? Que ha determinado que los precios hayan subido tanto? Es sostenible esa subida de precios? El experto analiza las condicionantes de la subida de precios en el Peru y hace recomendaciones de inversion.

Para consultas particulares escribenos a: german@24chitown.com

Agradeceremos sus comentarios.

New mortgage lending rules to limit loan options

The Consumer Financial Protection Bureau is planning a Thursday morning announcement of new lending rules that it hopes will move the mortgage market toward a sustainable middle ground, somewhere in between the free-wheeling days of no-documentation loans and the current, restrictive environment.

For most borrowers, the rules will mean no more interest-only mortgages, no more loans where the principal due increases over time, no more loans that carry a balloon payment and no more loan terms of more than 30 years. In addition, would-be borrowers will be less likely to qualify for a mortgage unless their total debts account for no more than 43 percent of their monthly gross income.

These so-called qualified mortgages are expected to be embraced by lenders, because by following the criteria, they will have a better chance of shielding themselves from lawsuits from consumers whose loans go bad.

The provisions of the Ability-to-Repay rule, which follow closely the lines of protections called for in 2010’s Dodd-Frank legislation, will take effect in January 2014. Richard Cordray, the bureau’s director, is expected to detail the regulations at a public hearing Thursday in Baltimore.

A senior official of the consumer protection bureau, the agency charged with implementing the new mortgage requirements, said the lending standards are not much different than the guidelines currently in place. Still, while the rules might ease uncertainty among lenders who have worried about the scope of the regulations, it could cause additional anxiety for consumers trying to qualify for a home loan.

“It will add some certainty to the mortgage industry about what the rules of the road are going forward,” said Guy Cecala, president and CEO of Inside Mortgage Finance, a trade publication. “But it basically says we want everybody to make plain-as-vanilla mortgages.

“The legitimate concern is that this will cement the tight mortgage underwriting standard that we currently have in place, and most people agree, from (Federal Reserve Chairman) Ben Bernanke to the person on the street, that they’re too tight.”

To not upend the housing market’s recovery and assist consumers who can’t meet the 43 percent debt-to-income threshold, the agency said it was establishing a second, temporary category of qualified mortgages that meet most of the new guidelines but also would qualify to be purchased, guaranteed or insured by Fannie Mae, Freddie Mac or various other federal agencies. The temporary provision would end as those agencies issue their own qualified mortgage guidelines or if Fannie and Freddie end their government conservatorship or in seven years.

The bureau wanted to give the mortgage market time to adjust to the new standards and ensure that well-qualified people could still buy homes, the agency official said.

For all types of mortgages, to help determine a borrower’s ability to repay, lenders must look at eight factors. They include current income and assets, employment status, credit history, the mortgage’s monthly payment, other loan payments associated with the property, monthly payments for such things as property taxes, other debt obligations and a borrower’s monthly debt-to-income ratio.

Teaser interest rates no longer will be allowed to be used to judge a borrower’s creditworthiness. For homebuyers who apply for adjustable-rate mortgages, the monthly payments no longer can be computed using just an introductory rate that might be artificially low. Instead, the monthly payment must be computed using whichever is higher, the fully indexed rate or the introductory rate.

In addition to the other rules defining a qualified mortgage, the bureau also mandated that a qualified loan cannot charge to the consumer points and fees that exceed 3 percent of the total loan amount.

The mortgage lending industry has worried for months about the rules and heavily lobbied for protection from lawsuits brought by borrowers.

Under the new rules, lenders who make qualified mortgages to well-qualified borrowers that carry a lesser chance of defaulting could be shielded from lawsuits from these prime borrowers who say the lender did not satisfy the ability-to-repay requirements. Riskier, subprime borrowers could challenge the lender’s assessment of their ability to repay the loan but borrowers would have to prove that a lender didn’t adequately factor in living expenses and other debts.

“They appear to favor lenders’ interests above consumers,” said Diane Thompson, of counsel at the National Consumer Law Center. “You have to prove what’s in the creditor’s records. It may be that no homeowners are able to challenge it. Otherwise, you’re relying on regulatory oversight, and we saw how well that worked.”

The rules, in various forms, have been in the works for years. Other agencies continue to formulate their own rules, and one still in development about what constitutes a qualified residential mortgage might increase a consumer’s mortgage down payment in order to ensure that borrowers have more “skin in the game.”

By Mary Ellen Podmolik, Chicago Tribune reporter
January 10, 2013 Chicago Tribune Company, LLC

Renters Looking to Own Are Ready to Buy, PulteGroup Survey Says

Among renters who one day hope to own a home, a poll finds a dramatic increase in the number who now say that they intend to buy in the near future. Offering more evidence of a swing toward homeownership as the housing market continues to recover, the survey by PulteGroup reports that about 6 in 10 of those renters plan on buying a home in the next two years.

That’s a 60 percent increase among those potential homebuyers in the past year, PulteGroup reports. “We’re definitely seeing a renewed sense of optimism,” said PulteGroup spokeswoman Jacque Petroulakis.

The PulteGroup survey’s results fit other findings in 2012 that bode well for home prices and sales in 2013, according to Jed Kolko, chief economist of listing service Trulia.

Kolko attributes the reported rise in renters’ interest in homebuying to an improved economy, which has helped potential buyers save for down payments, as well as to rising home prices, which have bolstered consumer confidence in the housing market. A Trulia survey conducted in 2012 also showed a significant increase in renters who intend to buy, he said.

The top reasons renters polled in the survey cited for wanting to buy in the near future were:

• They like being able to call themselves homeowners (49 percent).
• They view it as a good financial investment (44 percent).
• They need more space for their family/children (36 percent).

The PulteGroup survey also found that, compared to two years ago, twice as many homeowners now expect to have adult children or aging parents living with them.

Thirty-one percent of respondents to the 2012 survey said that they anticipate at least one adult child moving back home in the future, while 32 percent expect to take in an aging parent.

The demographic shift to multigenerational homes is likely to spark construction of more “smart” homes that break from recent tradition, Petroulakis said. “What’s important is that the home is planned smart … that it really maximizes your communal space.”

Extra bathrooms, downstairs bedrooms and large kitchens are examples of features that characterize these homes, she said.

Multigenerational homes share of total households already has swelled over the past decade. They are up by 30 percent between 2000 and 2010, according to the U.S. Census Bureau.

PulteGroup says its survey of renters was conducted online in March 2012 among 506 adults who rent a home or apartment across the United States and intend to purchase a home in the future. The survey on multigenerational housing was conducted online in September 2012 among 511 homeowners across the U.S., ages 35 and older, with children between the ages of 16-30 and among 550 U.S. homeowners, ages 18-65, with living parents. The margin of sampling error is reported as 4.3 percent.

Source: http://realestate.aol.com/blog/2013/01/02/renters-want-buy-home-pultegroup-survey/

U.S. rate on 30-year mortgages rises to 3.59%

WASHINGTON (AP) — Average U.S. rates on fixed mortgages rose for the second straight week, staying slightly above historic lows.

Mortgage buyer Freddie Mac says the rate on the 30-year loan increased to 3.59 percent, up from 3.55 percent last week. Two weeks ago, the rate fell to 3.49 percent, the lowest since long-term mortgages began in the 1950s.

The average rate on the 15-year fixed mortgage, a popular refinancing option, rose to 2.84 percent. That’s up from 2.83 percent last week and a record low of 2.80 percent the previous week.
Cheap mortgages have helped drive a modest housing recovery this year. Home sales are higher than last year, although they are still below healthy levels.

U.S. home prices are also rising. Prices for all homes, including distressed properties, jumped 2.5 percent in June from the same month in 2011, according to a report issued Tuesday by data analytics firm CoreLogic.

Builders have grown more confident after seeing increased demand for homes. In June, they increased their spending for a third straight month.

Low mortgage rates could also provide some help to the economy if more people refinance. When people refinance at lower rates, they pay less interest on their loans and have more money to spend. Many homeowners use the savings on renovations, furniture, appliances and other improvements, which help drive growth.

Still, the pace of home sales remains well below healthy levels. Many people are still having difficulty qualifying for home loans or can’t afford larger down payments required by banks.

Mortgage rates are low because they tend to track the yield on the 10-year Treasury note. A weaker U.S. economy and uncertainty about how Europe will resolve its debt crisis have led investors to buy more Treasury securities, which are considered safe investments. As demand for Treasurys increase, the yield falls.

To calculate average rates, Freddie Mac surveys lenders across the country on Monday through Wednesday of each week.

The average does not include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.

The average fee for 30-year loans was 0.6 point, down from 0.7 point last week. The fee for 15-year loans also was 0.6 point, unchanged from the previous week.

The average rate on one-year adjustable rate mortgages fell to 2.65 percent from 2.70 percent. The fee for one-year adjustable rate loans was unchanged at 0.4 point.
The average rate on five-year adjustable rate mortgages rose to 2.77 percent from 2.75 percent last week. The fee remained at 0.6.

Bucktown’s six corners sees burst of development

(From Crain’s Chicago Business) — Bucktown’s busiest intersection may be getting a whole lot busier.

A local group is vying to transform the neighborhood’s tallest building, the 12-story Northwest Tower at 1600 N. Milwaukee Ave., into a boutique hotel. Across the street, the former Midwest Bank property is being redeveloped into retail space anchored by a Walgreens and a Caribou Coffee shop.

Just west of the well-known six corners intersection, where Milwaukee, North and Damen avenues converge, a restaurant with concert and event space is planned at a former auto body shop along North Avenue, while a new health club also is in the works.

The flurry of development activity demonstrates the desirability of urban retail markets at a time when other regions continue to struggle.

“It’s the closest thing you have to a downtown-type area on the North Side,” Paul Sajovec, chief of staff for Alderman Scott Waguespack (32nd), says of the ward’s bustling intersection.

A joint venture of Donald Wilson, head of trading firm DRW Holdings LLC, and Chicago-based hotel developer AJ Capital Partners recently bought the note on the distressed Northwest Tower through a complicated deal involving two banks and two separate mortgages. The venture is expected to negotiate to take control of the tower from developer Krzysztof Karbowski, who faces foreclosure and has personal guarantees on the loans.

Mr. Wilson did not return a phone call, and AJ Capital CEO Ben Weprin declines to comment. Three years ago Mr. Karbowski proposed a 90-room hotel for the site, which is wedged between Milwaukee and Damen near a Blue Line el stop.

“It’s the trophy property in Bucktown that was at one time zoned for a boutique hotel,” says Keith Lord, president of Chicago-based Lord Financial Advisors LLC, whose debt-sale business sold the notes to the new venture.

A hotel would add a new element to the expanding retail scene in trendy Bucktown and Wicker Park neighborhoods.

“What’s terrific about the six corners intersection is that you’re drawing from a lot of income levels,” says Joe Seigle, a principal at JFS Realty Capital who is one of the developers of the restaurant and event space.

AJ Capital, which has hotels in the United States, Mexico and the Caribbean, also is redeveloping another 12-story distressed building. The firm is converting the former Days Inn at 1816 N. Clark St. in Lincoln Park into a boutique hotel expected to open early next year.

Buying the Northwest Tower notes was complicated by the financial woes of Mr. Karbowski. He faced a $4.5-million foreclosure suit from Harris Bank N.A. for a mortgage on the top 11 floors. Meanwhile, Mr. Karbowski’s Time Properties Inc. — which had a mortgage on the first floor from Chicago-based Lakeside Bank — filed for bankruptcy protection. Mr. Karbowski did not respond to messages.

Mr. Waguespack’s office had not immediately been approached by the Wilson-AJ Capital venture regarding a hotel project there. But Mr. Sajovec says the site has drawn inquiries from many prospective hotel developers in recent years.

“People definitely are interested in it,” Mr. Sajovec says. “It would have a lot of positive synergy with the surrounding retail in the area.”

Despite the 1929 building’s upside as a hotel, the project won’t be easy, even after the venture negotiates with Mr. Karbowski.

People familiar with the property say the Art Deco building’s interior has small rooms that are poorly suited for a modern hotel. While retrofitting the interior, the developers probably will be required to preserve the historic look of the exterior, such as the facade and window work.

Mr. Karbowski’s proposal encountered community opposition. The alderman’s office opposed a zoning permit for the hotel in 2008 because of a lack of specifics from Mr. Karbowski, who had never developed a hotel. Mr. Sajovec says concerns mainly stemmed from a “lack of sophistication” in the planning, such as suggesting that an existing Sprint phone store remain on the ground floor of a hotel.

A zoning permit was granted in October 2008 with the condition that it would expire in three years. But Mr. Karbowski’s project, estimated to cost $15 million, never got beyond the planning stages. Today, the building’s occupants are the Sprint store and some office tenants, all on short-term leases.

In taking on two redevelopments at one of the most high-profile intersections in the city, Mr. Wilson continues to make his mark in real estate with opportunistic moves on financially failing properties.

A separate venture of Mr. Wilson is redeveloping the former Midwest Bank property at 1601 N. Milwaukee Ave., which was acquired through a deed-in-lieu of foreclosure deal last summer.

Walgreens will open a drugstore in the 15,500-square-foot two-story former bank building. The developers gained approval from the city to replace the building’s dark windows with clear ones that show off the ornate ceiling, says David Nelson, senior portfolio manager at DRW.

In the bank’s former parking lot at 1611 N. Milwaukee Ave., AT&T and Caribou Coffee have signed leases for a new structure with about 11,000 square feet of retail space. Mr. Nelson says both retailers are building out their stores and that two spaces remain available.

Mr. Wilson’s venture bought the property’s $13.2-million loan from PrivateBank & Trust Co. for an unknown amount, then took control through a deed-in-lieu of foreclosure from the previous owner, a venture led by Jon Goldman of CG Development Group LLC, which acquired the property for $18.4 million in 2008.

At 2040 W. North Ave., a venture led by Marc Realty principal Larry Weiner is planning a health club that would be its sixth location. The venture, Chicago Athletic Clubs LLC, has clubs in Evanston, Lincoln Park, the West Loop, Lakeview and Lincoln Square.

Mr. Weiner bought the Bucktown property last September for $2.6 million and is working to finalize city approval for his plans.

At 2033-35 W. North Ave., on the opposite side of the street in Wicker Park, Mr. Seigle and Nick Moretti are redeveloping a 9,300-square-foot former auto body garage into a Chicago Chop Shop restaurant with 5,000 square feet of event space in the back. They spent nearly $1 million to close on the two-story, 1913 building in July and plan to begin a gut rehab in September.

The Chicago Chop Shop will occupy the storefront space, serving deli sandwiches in the daytime and small-plate dinners at night. Venue, the name of the event space, will be available for concerts, art shows and other events. There will be at least 400 seats, the developers say.

“The demographics of the neighborhood make it ideal for a flexible space that can be used by a lot of different people,” says Mr. Moretti, a vice-president of leasing and retail development at Chicago-based First American Properties Inc.

Fannie Mae announces program to boost Miami condo sales (sigue traduccion al espanol)

I have 8 clients with over 700 credit scores, more than $15K in down payment and most of them make more than $50K a year. All of them want to buy in Miami “those great condo deals”. All of them are no cash investors and want to play vultures here in the “Ground Zero” of Real Estate. The problem was: No financing… in the buildings with those deals. In the expensive ones, where the price doubles there is financing. If you wanted to buy 20, 30 cents out of a dollar…. it needed to be cash.

Well, good news! Fannie Mae announced a new program to provide financing. Now, is Fannie Mae a bank? Is she a rich aunt from Europe?

Nop. Fannie Mae is a government-sponsored institution who re-purchase the loans that banks make. Bank of America or Chase “originate” residential home mortgages but they do not keep those in their portfolio, they originate and immediately turn around and sell the loan to Fannie Mae (or Freddie Mac) for cash. Banks do not like to keep loans (portfolio) because it drains their liquidity for 30 years. They rather turn around, sell the loans for a discount, make a profit and keep moving forward.

The problem was that if Fannie Mae did not repurchase loans in specific building due to their bad finances and number of foreclosures…. banks did not want to lend on those buildings. Then without being able to resell many sellers went to foreclosure or sold at ridiculous prices.

Now this might change. Email me to send you a list of buildings with the “Special Approval” designation of Fannie Mae. As you can see there are dates for some of those because this status might change… so do not procastinate again!!! This is a window of opportunity so take it.

Give me a call for questions, we can go into more detail over the phone.

German

847-962-0923 / german@24hourschicago.com

________________________________

EN ESPANOL

Tengo 8 clientes con mas de 700 en su score crediticio, mas de $15,000 para downpayment y casi todos hacen mas de $50K al ano. Todos quieren comprar esos “increibles deals” de Miami. Todos ellos no tienen cash pero quieren ser esos buitres que se levantan los mejores deals. El problema es que No Hay Financiamiento…. en los edificios donde esta lo bueno. Los edificios caros, donde los precios estan mas del doble alli si hay. Pero si usted quiere comprar a 20, 30 centavos por dolar, tenia que ser cash.

Bueno, buenas noticias! Fannie Mae anuncio un nuevo programa para proveer financiamiento. Pero, es Fannie Mae un banco? una tia rica de Europa? Quien es Fannie Mae?

No. Fannie Mae es un institucion sponsoreada por el gobierno americano que se encarga de re-comprar los prestamos que los bancos hacen. Banco de America y Chase “originan” prestamos hipotecarios residenciales pero no se los quedan en sus portafolios, ellos originan e inmediatamente se dan la vuelta y los vende a Fannie Mae (o Freddie Mac) por efectivo. Los bancos no mantienen estos prestamos en su portafolio porque les quita la liquidez por 30 anos. Ellos mejor se dan la vuelta, los venden a descuento, hacen una utilidad rapida y siguen para adelante.

El problema es que Fannie Mae no compraba los prestamos en determinados edificios debido a las malas finanzas y elevado numero de casas reposeidas de los mismos…. los bancos entonces no querian prestar en esos edificios. Lo que terminaba pasando es que la gente que queria vender en los mismo terminaba en foreclosure o rematando las unidades de sus edificios pues los compradores no podian conseguir financiamiento.

Ahora esto podria cambiar. Escribanme un email y les mando la lista con edificios con “Aprobacion Especial” de Fannie Mae. Como puede ver hay fechas pues este status puede cambiar en cualquier momento. No lo piense 4 veces y deje pasar esta oportunidad.

Deme una llamada si tiene preguntas y vamos sobre mas detalle.

German

847-962-0923 / german@24hourschicago.com

30-year interest rates hit a new record low

WASHINGTON – Dec. 4, 2009 – The average interest rate for a 30-year mortgage dropped to a record low of 4.71 percent this week, pushed down by an aggressive government campaign to reduce borrowing costs.

The rate, published Thursday by Freddie Mac, is the lowest since the mortgage finance company began tracking the data in 1971. The previous record of 4.78 percent was set during the week ending April 30 and matched last week.

The Federal Reserve is pumping $1.25 trillion into mortgage-backed securities to try to bring down mortgage rates, but that money is set to run out next spring. The goal of the program is to make homebuying more affordable and prop up the housing market.

Despite the government support, qualifying for a loan is still tough. Lenders have tightened their standards dramatically, so the best rates are available to those with solid credit and a 20 percent downpayment.

Freddie Mac collects mortgage rates on Monday through Wednesday of each week from lenders across the country. Rates often fluctuate significantly, even within a given day, often tracking yields on long-term Treasury bonds.

This week’s drop reflects a rush of investors into the security of government debt after concerns about financial trouble in Dubai drove investors to safe harbors. But rates climbed back later in the week, and analysts say they are likely to remain volatile.

“There are no guarantees that mortgage rates are going to stay at these low levels,” said Greg McBride, senior financial analyst at Bankrate.com.

And millions of American families have not been able to take advantage of them, particularly in the areas where home prices have fallen the most.

About 11 million households, or 23 percent of homeowners with a mortgage, owe more on their home loans than their house is currently worth according to First American CoreLogic, a real estate information company.

That makes refinancing difficult.

While the government has launched a program designed to help these “underwater” borrowers, only about 140,000 homeowners have used it so far.

In Orlando, mortgage broker Chris Brown says the low rates are a boon to first-time homebuyers who can qualify for a loan. But he says he isn’t getting much business from homeowners looking to refinance.

“Most of the people that could refinance probably have” done so, he said. “Rates have been artificially low for quite some time.”

The average rate on a 15-year fixed-rate mortgage fell to a record low of 4.27 percent, from 4.29 percent last week, according to Freddie Mac.

Rates on five-year, adjustable-rate mortgages averaged 4.19 percent, up from 4.18 percent a week earlier. Rates on one-year, adjustable-rate mortgages fell to 4.25 percent from 4.35 percent.

The rates do not include add-on fees known as points. One point is equal to 1 percent of the total loan amount.

The nationwide fee for loans in Freddie Mac’s survey averaged 0.7 points for 30-year loans. The fee averaged 0.6 points for 15-year, five-year and one-year loans.

Buyers and homeowners who want to refinance are picking up their phones. Mortgage applications rose 2 percent last week from a week earlier, the Mortgage Bankers Association said Wednesday, driven by a more than 4 percent increase in purchase applications and a nearly 2 percent increase in applications to refinance existing loans.

US$8,000 First Tax Home Buyer Tax Credit extended until April of 2010

Congress has finally extended the first time home buyer tax credit into 2010. President Obama signed the bill into law yesterday. Here are the specifics so you can see if you qualify:

– You need to have your contract ready by April 10th, 2010
– You need to close on this purchase by July 1st, 2010
– First time home buyers are defined as anyone who has not owned a home for the past 3 years.
– If you will buy in 2009 you will get your US$8,000 tax credit after you file your 2009 Tax Returns in 2010.
– If you will buy in 2010 you will get your US$8,000 tax credit after you file your 2010 Tax Returns in 2011.
– If you own your home for more than 5 years and you want to buy a second one, you will receive a US$6,500 tax credit.
– The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
– The purchase price of the home must be less than $800,000.

Text me or give me a call if you have questions 847-962-0923. You can also email me to: german@24hourschicago.com

German

“Be a millionaire with Real Estate in Half an Hour or your money back guarantee”, a quick comment about those midnight infomercials.

A few weeks after a tremendous amount of traveling, I couldn’t sleep very well so I started zipping the remote at 3 a.m. and I was amazed/annoyed!!! There were a bunch of guys talking about these “Magic Real Estate courses” with zero money down, no credit, and no income necessary to buy, rent, sell or flip showing all these amazing homes, cars, beautiful women, beaches, boats, all the “things that we dream about”. You just need to pull out your credit card and call now!!!

It came to my attention since I do Real Estate for a living. I bought a couple of those courses to see the “magic formulas” and I found out that there was a lot of marketing and not as much substance. The advertisement alone looks to me misleading: “you can buy even if your credit score is horrible, if you filed bankruptcy or if you do not have a job” It reminded me of the factors that caused the Real Estate bubble and of the “car salesmen” of Real Estate who are a disgrace to the profession. It reminds me of a happy family that is being cheated and disappointed by a “consultant” who has no idea of reliable advice.

So is anyone ready to deal with vacancies, evictions, liability issues and housing repairs with no money down and no reserves? Is anyone ready to find good financing, deal with appraisal issues and markets that go upside down?… A housewife who barely has a high school diploma or a guy who can barely handle arithmetic is ready to handle million dollar deals. Sorry, but I am little bit skeptical. Licensed Realtors and Mortgage Loan Officers, many of whom have college educations, got many people in trouble with loans that they couldn’t afford. I think it might be irresponsible to suggest Real Estate as an easy business for many people. Even if they tell you “Yes, but there is a 1-800 number and you can ask everything there to dedicated specialists”… oh really? Someone in some town of Arizona is going to tell me how to deal with problems in Waukegan, Illinois or in Hialeah, Florida?

The people who read my blog are people that I love: friends or clients. I do not want them or you to get ripped off. In the same way that there are no magical pills to make you lose weight, there is no secret $199 mail course that can teach you how to be a millionaire in 30 minutes. Let’s get real please!

Here are some points that you should consider when investing in Real Estate:

-Do you homework: understand all the specs of every single deal, since all are different!!! Crunch the numbers, study the market, statistics, trends, demographics, etc. Do not let computer software tell you an undisputable truth.

-Be on top of things. One of these gurus said that “collection is automatic”. Really? So if I put “any tenants” I do not need to worry that they won’t pay and that the income will flow from their checking account to yours. Again, Really? I wonder if he understands the word “lay off”, bad character or unemployment. Also, I did not hear anything regarding building reserves to cushion your vacancies or evictions or foreclosures.
Build a healthy portfolio of income generating properties takes time. It does not happen automatically or overnight.

-Be your own property manager “hands on” to get to know the business. If you never handled these matters you need to learn the trade like an apprentice. You cannot hire a Property Manager if you do not know what it is involved. Like all of the midnight TV guys… he might rip you off.

-Get a specialist who you trust and who has a verifiable success record in Real Estate Investment. You do not need to use me, but you need someone to walk you through the first deals so you can ride the bike alone on your own. If you get bankrupt on the first or second deal, there will not be many more to come.

Real Estate Investment is great. You can make a lot of money, but it is not for everyone. You need to be “hands on”, detail oriented, cost cautious, knowledgeable and hard working. I know these infomercial guys hate “hard work” (that is why they sell courses on TV) but there is no other magic way. You need to work hard and learn the trade before you will actually switch into automatic pilot. Four years ago in the middle of the Real Estate Forum I was called an “Old timer” and “Risk Adverse Old School Investor” by a bunch of South Florida’s fancy investors. Yes, I proudly am. Guess what??? My Real Estate portfolio in this current crisis has a positive cash flow… 2 out of 4 of those guys filed for bankruptcy last year, the other 2 are in serious trouble. Like Anthony Robbins says: “Massive Success is the best revenge”.

I would love to get a phone call from you to talk about Real Estate. I hope you are doing well with your investments and do not forget to have fun with them.

Have a great and profitable week!

German

Pssst…. Have you seen interest rates recently? I have an updated to the hour chart below on the right side of the blog, if you want to take the pulse to the 30 years-fixed.