Post about "Real Estate"

Resort Real Estate Market Insight – Where Is The Second Home And Resort Market And Where Is It Going

Many times, it seems like there are more questions than answers about today’s real estate market. Real estate is difficult to analyze due to its local nature, with submarkets and niche-markets to take into account. At the same time, it’s a mistake to ignore the effects of regional and national market forces on what happens in our own backyard.Why is the market slow?The short answer is frenzied buying and building based on speculation resulted in an oversupply. But the good news is that both local and global economic conditions seem favorable for a market recovery. In Brian Blackstone’s and Greg Ip’s July 7 Wall Street Journal analysis, the authors conclude that the job market’s June performance, along with signs of vigor in the manufacturing sector and a buoyant stock market, suggest the U.S. economy is moving into the third and fourth quarters with a “considerable head of steam.”Even better, Blackstone and Ip point out that the economy is chugging along with inflationary pressure, enjoying what they dubbed “a Goldilocks moment – not too hot, not too cold.” Inflation appears to be in check, with the Consumer Price Index (CPI) stabilized at approximately 2.5% and with a decrease in the core inflation rate (CPI minus food and energy). Thus, the influential Federal Reserve Rate remains stabilized, further building consumer confidence.Consumer confidence is one of the biggest factors in the rise or fall of the real estate market. According to Lawrence Yun, the National Association of Realtors’ (NAR) Senior Economist, “As consumer confidence improves, home sales will rise.”Moving to micro-economic factors – our area’s activity – it’s interesting to track a resoundingly negative effect of what was very positive real estate sales activity. Within the last 12 months, a South Walton beachfront home sold for $9 million cash, well into the market correction. The news of the sale elated sellers and Realtors alike gleefully used this sale as a comparable for their listings, reasoning “my property is worth at least as much on a square-footage basis.” The result was a misguided sense of pricing with sellers not adjusting prices to the actual market.The corollary of this price-focused fallacy is on the buyers’ side. Just as the $9 million sale set an unrealistic expectation for sellers, distress or otherwise low-price sales have set an unrealistic expectation for buyers. One or two of the outlying sales do not constitute the market.In both up and down markets, we typically have these “outliers.” However, their effects are exacerbated when people are particularly sensitive to small market changes. We tracked this same market phenomenon in the heyday of the amateur day-trader, who focused on often infinitesimal daily market blips. As Warren Buffett commented at the 1997 Berkshire Hathaway annual meeting, “If you’re an investor, you’re looking at what the asset is going to do. If you’re a speculator, you’re commonly focusing on what the price of the object is going to do.” Long term trends are important, and history shows it is almost impossible to perfectly time any market.So what’s the best course for someone invested in or simply interested in area real estate?Due diligence is essential to ensure that the real estate you purchase is not only a good value but a quality property. Here on the Emerald Coast, we are unique in that we have a resort market where many properties are characterized as second homes. This market sector continues to show an upward trend. NAR’s research highlights this trend in their May 2007 online article, Vacation Home Sales Sets Record in 2006, even though the real estate “slowdown impacted the purchase of second homes as well,” continued “low interest rates and a relatively high inventory of properties on the market inspired a significant percentage of home buyers to purchase vacation homes.”Resort real estate is an investment in monetary terms. But in recent years, its value as an investment in buyers’ families has often been overlooked. A vacation home is a place to spend time together and create memories. Five years ago, the typical answer to “What will you use this home for?” was “as a second or vacation home for my family, and also as an investment.” During the recent frenzied period, the response changed to “an investment we will use on occasion.”The April, 2007 NAR survey of second-home buyers revealed that a clear majority – 79% — planned to use their new home as a family retreat or for vacations. Still, more than one-third of respondents purchased a vacation home to diversify investments. Some 28% planned to use their vacation home as a primary residence sometime in the future. A quarter of buyers said they bought their second home for tax benefits; 22% for use by a family member, friend or relative; 21% because they had extra money to spend; and 18% to rent to others. We are beginning to see the return of the end user who is investing in resort real estate for the enjoyment of their family, with a realistic long-term vision of the asset’s potential appreciation.There is nothing wrong with purchasing a property that you and your family will enjoy, even if you did not purchase for a rock bottom, seller-bleeding price. If you are willing to pay for a home that is exactly what you and your family want and will enjoy for the next 10 years or more, it will be worth it. Real estate is, after all, a long-term asset.The current market correction has occurred steadily over the last 18 months, but it appears to be stabilizing. The NAR is predicting only 1% decline for 2007 and a positive pricing outlook for 2008.In our area, we foresee a trend of less negative numbers with an increase coming soon. We’ve already seen an increase in market activity, indicating buyer willingness to re-enter the market and the realignment of seller expectations with the market reality. Prosperity across the globe; low and stable mortgage rates and the fact that the net worth of Americans is at an all-time high all point to an upturn.There has been some talk about the high end of the market dodging the ill effects of the downturn. In point of fact, it all depends on how the so-called “high end” is defined. Sticking to Warren Buffets maxim to find an outstanding buy at a sensible price rather than a mediocre buy at a bargain price–some opportunity does exist at the high end of the real estate market.Some high-end communities have been negatively affected in the recent market due to multiple purchases by individuals or entities, and purchases by individuals for the sole purpose of flipping the property prior to or just after closing. It is difficult to calculate the number of these properties still hovering in the market. Some of these investors who have a lower cost basis may reap a sizable profit. High carrying costs or other circumstances may force other sellers to sell at a loss.Two years ago, our market was clearly overheated (see my article “Getting Back to Normal” published in the Emerald Coast Winter 2006 edition of Condo Owner.) Savvy buyers are now recognizing that the choice of property available, and the quality of property available, yields a rare opportunity.

7 Top Real Estate Investing Jobs

Real Estate investing has long been proven to make tons of
CA$H for the active investor and many of the real estate
investing methods and techniques used to make some of
the biggest (and quickest) CA$H only require a little time
and a bit of knowledge (i.e., NO MONEY and NO CREDIT!) to
rapidly bring home a really big check!That is the appeal of Real Estate investing courses to most
people ¨C to do deals that require little/no money or credit
yet pay back huge rewards for the time and knowledge you
get from following their systems.Yet, the “investing” gets a bit lost in most of the world of
“Real Estate Investing” – there is no “investing” other than
a bit of time – there is no ROI (Return On Investment) other
than the time-for-money factor.That is why I call these activities Real Estate Investing Jobs -
they stop bringing income as soon as you stop working
them.Real Estate Investing through these jobs, while they make
you CA$H, will never give you financial freedom as they only
generate quick money and not long-term, passive income.This article will look at some of the more popular methods of
Real Estate Investing jobs.One of the biggest challenges to overcome is the fact that,
when discussing the money made through Real Estate
Investing, the numbers of dollars are much more than your
common corporate job, and many people simply are not
ready to handle such discussions.You see, when you were very young, you were
programmed to think that $X was a large amount and often
this amount was only a few hundred, or perhaps, a few
thousand, dollars.Yet, when discussing Real estate investing deals, there are
often multiple thousands of dollars at stake.Most people simply are not used to discussing such
numbers, and wind up not making the money they could.
They simply have not learned the language of Real Estate
Investing.One of the first lessons I teach my students is how to get
past the fear of discussing hundreds of thousands of dollars
and changing the programming you were given as a child to
form open ideas about money and investing to make even
more money.One quick step you can do to begin this journey is to look
deep inside yourself and ask yourself how you feel about
money. Can you comfortably discuss figures in the hundreds
of thousands of dollars?Most people learn quite quickly – with just a little bit of
practice.With that in mind, it is time to look at these Real Estate
Investing Jobs more closely.These ‘jobs’ bring you various levels of income, depending
on your area, so instead of discussing them in dollar values,
we will look at them from a percentage standpoint.Of course, with these examples, the amount of work, time
and knowledge you put into it will certainly pay off more (or
less);1. Property Profiling (birddogging) – this popular way to get
started in real estate investing provides a real estate
investing job with a decent income – something along the
lines of what a factory worker would make in the area.2. Lease Purchase – this powerful tool can be utilized to buy
and sell property with no money out of your pocket (a Real
Estate Investing sandwich), while keeping a nice pocketful
of money for your time (can you tell this is one of my
favorites?) An active person can make about 1.5 – 3 times
more than the Property Profiler, on average.3. Subject To – with a bit of training, you can make this
method of real estate investing really pay off big. Once you
know how to negotiate these deals, your real estate
investing income will reach that of corporate executives –
with much less of a time requirement.4. Foreclosures – while highly lucrative and one of the top
income producing methods of real estate investing, the time
and knowledge required to actively pursue such deals is
becoming more difficult all the time.The payoff to those that can perform these deals is huge –
about 10 times that of the Property Profilers, however,
finding deals is much more difficult due to the number of
people looking for them.5. Tax Lien certificates – this is a true form of Real Estate
Investing – actually putting your money into something that
produces a return – one of the safest investments around
with returns that beat any other form of passive investing.
If you have money to invest, this is a great area to get into
with 15%+ return with almost no down side.This is still a real estate investing ‘job’ as tax lien
certificates are short term, quick turn profit generators, not
sustained over time, plus they take skill and talent to make
the maximum profits.6. Short Sales – this form of Real Estate Investing is another
job, as your knowledge level and timing are extremely
important. A lot of money can be made with this type of
Real Estate Investing job – as much or more than any other
form – once you know how.7. Secondary notes/Purchasing Equity positions – a ‘higher
level’ of real estate investing, where more knowledge is
needed to limit the risk, however, the returns on equity
position purchases can be extremely high – from 6%-10%
for fully passive results and ‘sky’s the limit’ for purchasing
equity positions.Yes, once you get past the internal false programming – the
LIES you have been taught all your life about money, you
can begin a successful career in Real Estate Investing –
through a variety of Real Estate Investing Jobs and then
onto true, full, watch-your-money-grow Real Estate
Investing.