Real estate investors need to use the benefits of the internet and use free websites that can allow them to understand more about specific properties and areas. We can not just rely on others but we need to learn how to back up what others on our team might tell us about properties and areas.

Trulia.com

We can search for a particular area or zip code to bring up properties. After focusing on a particular property we can click on the google map of the property and click on the street view. Many properties will allow us to see a photo of the property and also see how around the neighborhood. This can allow us to get a feel for how old the neighborhood is and if there are discouraging points that we see. This allows us to assess it without having to drive out to the neighborhood. We can also look at sales graphs and see the reports on properties sales in that area. We can also use the comparables tab and see the whole list of similar homes have sold in the area. Look over the list and compare the latest comparables and eliminate those that are much older sales.

Education.com

This website can be helpful for us to determine the insight of the schools in the same area we are searching for properties. We can click the links to all of the schools in the area. Click on the details and look at all of the statistics of the teacher to student ratio etc. We then could click the link to the school district. We call them up to determine which of these schools are OK to the better schools. They are more likely to give us insight if we quote them statistics that we have already researched out. Our intent is to target properties in areas that don’t have the really rough schools that buyers and renters would not like their children to attend.

Bestplaces.net

This website can allow us to get statistics on areas of interest. We can see a percentage of projected future job growth. We can call the chamber of commerce and determine based on their statistics as well what the projected jobs will come from. The intent is knowing that buyers and renters want to be in areas with more jobs.

These websites are free and allow us to become more savvy real estate investors. We don’t want to just take our teams word on their insight but we want to verify it by doing our own due diligence. These websites can feel more confident in our investing.

A recent survey of participants at the Southeast chapter of the Real Estate Investment Advisory Council included a survey of the 165 participants to obtain their views on when the current recession would end. These participants whose primary focus is commercial real estate agreed that the primary leading indicator would be the housing market – that is “investors will know an economic recovery is under way when the housing market finds price stability and foreclosures moderate”. These and other opinions from the survey are contained in the article below which was recently published in the National Real Estate Investor.

Investor Survey: Housing Market Bottom Will Signal Recovery

Mar 25, 2009 1:09 PM, By Sibley Fleming, National Real Estate Investor

ATLANTA — Investors will know an economic recovery is under way when the housing market finds price stability and foreclosures moderate. That’s the majority view of a regional real estate investment group.

“During the housing boom, consumer spending grew faster than income because their wealth was fueled by home equity,” said Sam Chandan, president and chief economist of New York-based Real Estate Economics LLC. “Households lost $5 trillion of wealth in the fourth quarter and about $2 trillion in the third. It’s unprecedented.”

Chandan’s remarks came during a meeting this week of the Southeast chapter of the Real Estate Investment Advisory Council (REIAC), where roughly 165 members voted electronically on current economic topics, offering an instant snapshot of the developers’ and investors’ concerns. Kieran Quinn, vice chairman of Bethesda, Md.-based Walker & Dunlop and outgoing chairman of the Mortgage Bankers Association, served as moderator.

When the audience was asked which event would signal that an economic recovery had begun, 39% said the bottoming out of the housing market would be the leading indicator. New job formation followed close behind with 36% of the vote.

“If you look at the 2001 recession, according to the National Bureau of Economic Research, it ran until November of 2001,” said Chandan. “We continued to experience job losses in the recovery for another two years after that. The magnitude of the numbers can’t stay at 500,000 or 600,000 but the job market is going to be a lagging indicator of stability in the economy.”

Others on the panel, including Egbert Perry, chairman and CEO of Atlanta-based Integral Group LLC, a director of Fannie Mae and former director of the Atlanta Fed, agreed.

The relationship between the housing market and commercial real estate is worth noting. “There’s that old axiom that commercial lags residential by six quarters,” said panelist Chris Marinac, managing principal and research analyst for FIG Partners LLC, based in Atlanta. “We’re going to top at about 4.5%, which means we’re just at the edge of commercial delinquencies.”

The audience and panelists were also asked to look into their crystal balls and predict when the recovery would begin in earnest. The second half of 2010 drew the most responses at 39%, followed by sometime in 2011 at 25% and year-end 2009 or the first half of 2010, 21%.

An overwhelming number of respondents — 64% — expected unemployment to peak at 10% to 12%. “The unemployment rate, in our view, will creep to 10% to 12%,” said Chandan. “Part of what is being reflected here is a lower labor participation rate. There are fewer people looking for work, a larger number of discouraged workers so the number is a little bit misleading.”

The U.S. Region with the brightest future over the next five years was the Southeast with 57% of the vote. Atlanta was ranked the U.S. city with the brightest future, at 45%. Population trends indicate that 40% of the U.S. population will be living in the Southeast by 2050, according to Perry.

Overall U.S. commercial real estate supply/demand fundamentals over the next two years are expected to weaken significantly with widespread problems of greater severity and duration and many tenant and ownership defaults, according to 53% of the survey respondents. Another 31% expected that supply/demand fundamentals are going to weaken only moderately with serious weakening isolated in specific geographic areas and commercial real estate sectors.

“One area that we should have concerns about of further deterioration that haven’t really been anticipated by the market is industrial warehouse distribution,” said Chandan. “The risk is we could adopt more protectionist policies in the United States. That will limit the flow of goods in and out of the country. Once you separate services and look at the aggregate flow of goods in and out of the United States, it’s down about 35% from a year ago.”

Not surprisingly, participants predicted that retail (52%) will be the weakest sector over the next five years and multifamily (77%) will be the strongest.

In terms of the least problematic solution to the U.S. banking crisis, 45% of respondents said an aggregator bank to remove “toxic assets” and recapitalize banks was the best option.

“I think the greatest transfer of wealth is happening right now as we wipe out everybody’s values,” noted Perry. “But I think the biggest problem we have in an effort to accelerate or purge the problem out of the system, we’re dumping so much product onto the market that the banks themselves by trying to respond to regulation are in fact aggravating the problem.”

If you are looking for good real estate markets look where jobs are plentiful, the economy is strong and where populations are growing (bestplaces.net is a good place to start your research). Below is a compilation of 10 markets where the local job market is strong. If people can find work, they can make money. If people are making money they can pay rent or buy houses. This creates demand for housing and ultimately drives up rents and home values.

10 Cities to Look at If You’re Looking for Work

If you’re looking for a job, try Madison, Wis. It tops the list of places where jobs are plentiful, according to a survey by Ajilon Professional Staffing.

Ajilon researchers relied on statistics from the U.S. Bureau of Labor to identify places with a low unemployment rate and a high number of new jobs created in the last six months. Then it compiled information from its own professionals to find the cities with the best job opportunities.

Madison has a wide range of industries, plus it is the seat of state and county government.

Here are the top-10 cities where employers are hiring:

Madison, Wis.
Washington, D.C.
Boston, Mass.
Richmond, Va.
Milwaukee, Wis.
Pittsburgh, Pa.
Baltimore, Md.
Seattle, Wash.
Houston, Texas
Dallas, Texas

Source: Forbes, Tara Weiss (01/05/2009)

Foreclosures are sky-rocking, we all know that, but what is happening to all these homes? According to Dataquick, in California alone in the 3rd Quarter of 2008, over 94,000 homeowners went into default. 94,000 in a THREE month period in California alone. This is a staggering number. Many of these homes become great potential short-sale deals.

If you have ever pursued a short-sale you may be rolling your eyes thinking “yeah right, good luck getting the bank to respond to you, let alone accept your offer�. While that may be true, the article below talks about steps being taken at a very high level to streamline the foreclosure and short-sale process making it easier to get these deals done.

There are tremendous opportunities with foreclosures and short-sale deals, so don’t give up.

Short-Sales Standards on the Horizon

Fannie Mae and Freddie Mac conservator James Lockhart got an earful about short sales from REALTORS® last week at NAR’s Conference & Expo.

Practitioners complained about lenders’ slow and inconsistent handling of loan modifications and short sales, but Lockhart made it clear there are no quick fixes in the works. “Servicers are stressed,â€? he told a packed room.

Lenders were unprepared for the drop in housing values and the subsequent rise in foreclosures and short sales and, among other things, the lack the staff or structure to manage the volume of processing they face, he said.

As a result, households are needlessly losing their homes to foreclosure, while real estate professionals are seeing transactions collapse because buyers have too much inventory to choose from to wait around for months while lenders decide whether to accept their short-sale offer.

The problem is on the radar screen of lawmakers in Congress. NAR First Vice President Ron Phipps testified about the scope of the problem before the U.S. House Financial Services Committee this fall, and NAR has made the problem part of the four-point legislative plan that it wants Congress to take up as part of a lame-duck session of Congress before the end of the year.

Lockhart, who heads up the Federal Housing Finance Agency and took over as the conservator of Fannie and Freddie in September, said positive signs are on the horizon.

Foreclosure Prevention

The two secondary-mortgage-market companies are well aware of the market pain and are taking a number of steps to provide relief, particularly to prevent foreclosures.

Among other things, Freddie Mac is allowing lenders to modify their at-risk loans into 40-year, lower interest-rate mortgages and to reduce borrowers’ burdens by permitting them to roll up to six months of missed payments into what amounts to an unsecured second loan. The two companies are also ramping up their staff and adjusting compensation so their internal structure better matches the size and complexity of the processing demand they face.

What’s more, to help facilitate short sales, Lockhart’s agency will be releasing a large-scale, streamlined, standardized process for expediting short sales, which he said will give lenders flexibility and tools like principal forbearance that they can’t easily use right now.

But Lockhart made it clear that the bulk of the problem isn’t with Fannie and Freddie loans, but debt in what the financial services industry calls private-label securities, the Wall Street loans, many of them subprime, that are held by investors all over the world.

The streamlined short sale process his agency will be announcing soon—he didn’t give a time line—could go a long way to focusing the minds of lenders on the problem. But ultimately the problem won’t go way until interest rates come down, buyers start streaming back into the market again, and prices firm up, he suggested.

—Robert Freedman

Posted by Carter Brown

Looking for a place to invest out of your area or perhaps you live in a good area to invest and need a friendly reminder. Below is a list of affordable communities where housing has remained relatively stable and where future job growth looks promising.

It was interesting for me to find this list because a handful of these areas are where I am recommending people research when contemplating a move or looking for a good market for investing. I still truly believe there are good deals to be had in any market, and I always recommend people start their research and due diligence in their local market. Oftentimes people start looking in other markets while great deals are passing them by in their own back yard.

Cities Where Your Dollar Goes Furthest

Money goes further some places in the United States than it does in others.

Housing, in particular, has remained most affordable in the South and the Midwest. That’s because of less stringent building, an abundance of land and growing populations in the South, says Daniel McCue, a research analyst at Harvard’s Joint Center for Housing Studies.

To determine the cities that offer the best quality of life for the least amount of money, Forbes magazine calculated the ratios between a city’s median home price and its median household income. It also factored in projected job growth. And it compared median income to Moody’s Economy.com’s cost of living index.

Here are the 10 cities that it found to offer the best value, and the cities that it believes offers the worst value.

Cities Where Residents Get the Most for Their Money
1. Austin, Texas
2. San Antonio, Texas
3. Indianapolis, Ind.
4. Houston, Texas
5. Charlotte, N.C.
6. Columbus, Ohio
7. Dallas
8. Minneapolis/St. Paul
9. Denver
10. Portland, Ore.

Source: Forbes, Abha Bhattarai (10/10/2008

Posted by Carter Brown

A large part of chasing short sales is educating the homeowners and serving as a type of consultant helping them understand the process. Many homeowners in default have never heard of a short sale and will rely on you to walk them through the process.

Below is an interesting twist to the short sale process. This doesn’t mean all lenders are taking this approach but it is something you need to consider when dealing with homeowners and lenders. Find out if the homeowner is willing to do the deal even if they are going to have some ongoing responsibility with the balance due. Don’t be turned away if they are not as you can still submit an offer to the bank for their review. At the end of the day the bank does not want the property back and there is always the chance they will accept your offer – but you have to make it.

Banks: No Exceptions for Short Sales

Increasingly, sellers seeking short sales are encountering a new twist.

Lenders are agreeing to let some short sales go through, but they want the home owners to sign a note promising to pay some or all of the balance due – debts that could burden borrowers for the rest of their lives.

Moody’s Economy.com estimates that about 10 million home owners have negative equity, a condition known colloquially as being upside down or underwater. By next June, the forecasting company expects the total to rise to 12.7 million — a quarter of all home owners who have mortgages.

“The first wave of foreclosures involved a lot of investors who just disappeared,� says Lance Churchill of Frontline Seminars, which teaches real estate practitioners how to negotiate with lenders on short sales. “Now, home owners with jobs and assets are underwater and want to sell. The banks want as much as they can get, today or in the future, and the owners want to get away clean.�

If the lender does a short sale without extracting anything from the seller, everyone in the country who is upside down could try to wiggle out from under and banks will take a fresh wave of hits. But if the lender pushes too hard, the borrower will default, leaving the bank in worse shape.

Source: The New York Times, David Streitfeld (09/18/08)

It is not easy to get information and insights regarding foreclosures and short sales directly from banks and lenders. They are obviously a critical party involved as they are the ones doing the foreclosing and who will ultimately be making the decision on your short sale offer. Below are some great insights shared by Jim Satterwhite who is the vice president of price default management at Chase Bank.

Smooth Short Sales: Tips from a Lender

WASHINGTON — Real estate practitioners who’ve worked with clients on a short sale often complain about constant transaction delays, particularly in getting the deal approved from lenders.

On Wednesday at NAR’s Midyear Legislative Meetings in Washington, D.C., a representative from lender JPMorgan Chase & Co. shared some advice on how you can help move a short sale along as smoothly as possible.

“We’ve found a brave lender to stand in front of a room full of agents,â€? short-sales expert Robert Kutschbach, broker-owner of Carleton Realty in Westerville, Ohio, said in his introduction of Jim Satterwhite, vice president of prime default management at Chase.

A short sale occurs when the net proceeds from the sale of a home are not enough to cover the sellers’ mortgage obligations and closing costs, and the seller is unable or unwilling to bring sufficient liquid assets to closing to cover the deficiencies.

Patience Is a Virtue

Satterwhite said that just as practitioners are being hit with a wave of short sales, they must recognize that lenders are too.

“Be patient. The decision process may take several weeks,� Satterwhite said, adding that a big lender may be dealing with a quarter-million delinquent loans at any given time. It can be a challenge to obtain approvals from everyone involved in the short sale, including investors and insurers, he said. He encouraged practitioners to stay in contact with the servicer of the mortgage to keep everything moving.

Another common problem he sees: When short sale offers are submitted days from an impending foreclosure sale, which is not an adequate amount of time for a lender to reach a decision.

Research, Follow-Up Can Avoid Delays

Satterwhite shared these recommendations for practitioners:
• Find out if there are any liens on the property, which can become big problems for lenders and real estate professionals. Secondary lien holders may require money to minimize their losses and can balk at approving the short sale. Frequent objectors include tax lien holders and mechanic’s lien holders.
• Engage both primary and secondary lien holders at the same time because all parties will need to approve the contract.
• When working with the seller, ensure that all paperwork is completed and submitted on time. Also, make clients aware that they may be asked to reduce the lender’s loss by making a payment or by signing a promissory note.
• When working with a buyer, make a reasonable offer on the property. A ridiculously low offer is a waste of everyone’s time, he said. “The servicer’s primary goal is to minimize the investor’s loss on a property with a distressed borrower,â€? Satterwhite said. Therefore, the lender will try to obtain fair market value for the property, so offers way below fair market value just cloud the process, he said.

What Price Should I Offer?

One audience member asked Satterwhite why lenders can’t provide some type of guidance on what price they’ll accept so practitioners can avoid having multiple offers rejected. But Satterwhite said that would be too good to be true: Just as you wouldn’t try to sell your car by advertising the lowest price you’ll accept, lenders won’t do that in a short sale.

“We want to do what is reasonable, but we also want to do our best to recover our indebtedness,� he said.

— By Melissa Dittmann Tracey for REALTOR® magazine online

Posted by Carter Brown

Below are the ten best perfoming markets with the percent increase and the ten worst performing markets with the percent decrease from the 1st quarter of 2007 to the 1st quarter of 2008.

Best performing markets

Binghamton, NY — 11.8%
Peoria, IL – 10.4%
Spartanburg, SC — 10.1%
Elmira, NY — 9.6%
Yakima, WA – 9.0%
El Paso, TX – 8.5%
Amarillo, TX – 8.2%
Glens Falls, NY — 7.7%
Farmington, NM – 6.3%
Beaumont-Port Arthur, TX — 6.1%

Worst performing markets

Miami-Fort Lauderdale-Miami Beach, FL — -17.2%
Memphis, TN-MS-AR — -18.5%
Las Vegas-Paradise, NV — -20.2%
Grand Rapids, MI – -20.7%
Los Angeles-Long Beach-Santa Ana, CA — -21.3%
Sarasota-Bradenton-Venice, FL — -22.2%
San Diego-Carlsbad-San Marcos, CA — -22.9%
Lansing-E.Lansing, MI – -26.9%
Riverside-San Bernardino-Ontario, CA — -27.7%
Sacramento–Arden-Arcade–Roseville, CA — -29.2%

Posted by Carter Brown

I frequently talk with investors and hear investors talking about how they are scared to death of “getting stuck with a property�. I think we all know, or at least have heard, prices have come down in most markets, there are a lot of houses on the market and good deals are to be had. However, what sense does it make to buy a property if you can’t sell it? I have blogged in the past about how homes are still selling albeit at a slower rate and only the “right� properties or those in good areas that are a good value are selling.

But what about renting? Who cares if you can’t sell a property as long as you can get a good tenant who is going to cover your mortgage, taxes, insurance, etc? Finding cash flow properties is a much easier task now that prices have come down. Areas that have historically been difficult to buy positive cash flow properties in are now full of cash flowing properties. The market is going to turn positive. It is a very lucrative strategy to be buying properties now at a discount, renting them out for some positive cash flow and waiting until prices start moving north again. Once prices start moving up again, those that bought, will be sitting on a significant amount of equity and great cash flowing investments.

I’ve included a brief article about rental demand and where rents have gone lately.

Rental Demand Pushes Rates Up

It’s getting harder for renters to find an affordable place to live with rents rising and availability falling.

The median asking rate for rentals has jumped 14 percent, from $591 a month during the fourth quarter of 2003 to $673 a month in 2007, according to the U.S. Census Bureau. Vacancy rates are down from last year, and average rent is projected to rise 5.3 percent in 2008, up from a 3.1 percent increase in 2007, according to the NATIONAL ASSOCIATION OF REALTORS®.

“We’ve seen demand for rental housing go up,” says Mark Obrinsky, chief economist at the National Multi Housing Council. “The ownership side is retrenching, and we’re seeing the demand going to the rental side. There’s a lot of hesitancy to buy. Others can’t get (financing), so they’re remaining renters longer.”

Here are median rents for the first quarter of 2008 in 12 major metropolitan areas:

Atlanta: $986
Austin: $907
Boston: $1,645
Chicago: $1,355
Las Vegas: $1,056
Los Angeles: $1,699
Miami: $1,368
New York: $1,751
Phoenix: $939
San Francisco: $1,810
Seattle: $1,211
Washington D.C.: $1,687

Source: Rentometer and USA Today, Mark W. Williams (04/22/2008)

Posted by Carter Brown

“Without continual growth and progress, such words as improvement, achievement, and success have no meaning�

Benjamin Franklin

This quote applies to all walks of life and can certainly be applied to any Real Estate business, no matter how successful. As an Investor, you should constantly be evaluating your business and strategies, and more importantly, be making necessary changes to improve what you are already doing. Don’t let your business get stuck in a rut. Think of the ways your Real Estate business can be improved. Is there a more effective way of finding potential deals? Is there a better way of financing deals? Is there a more accurate way of evaluating potentials deals? Are there team members we need to get rid of or team members we need to utilize more effectively?

Take some time and re evaluate your goals, your strategies, your successes, your failures and your overall business plan and improve upon what you’ve already done.

Posted by Carter Brown