Tips On Picking "Sleeper" Real Estate Property

Real estate investing is all about perception. Your perception of where the market is going, in conjunction with where it’s actually going. The aim, as always is to buy low and sell high.

You want to buy a cheap tract of dirt and sell it as a high priced piece of developed real estate, after it’s appreciated enough to turn a tidy profit. Selling the property is an art in and of itself.

Buying an initial tract of dirt lends itself to some solid, rational guidelines:

First, look at trend lines for housing prices in your area. While most housing markets are in decline (and the housing markets in Florida and California are adjusting from more than a decade of over-valuation), there are markets where the housing prices are going up. This is a decent leading indicator that there’s a market for expansion.

Second, look for job related news. Home purchases require a steady source of income. New employers moving into a city, or a government branch office opening up are a strong indicator that good, well paying jobs are likely to come up. Where well paying jobs roost, home purchases follow.

Related to this, talk to your local city planning office. Are there recent purchases of “right of ways” to lay down sewer lines? Is the local telephone cable making plans to run out fiber optic lines – a “must have” trend in new home construction. These things point to areas where home growth is immanent. Other big tip offs are school bond issues (found in your local news paper) and new parks being opened up.

Before you look at the land, check out the adjacent commercial real estate usage. Look for “family friendly” or “residential friendly” commercial properties: Houses that are close to grocery and clothes shopping tend to fetch a higher price than ones that are farther away. If there’s a movie theater nearby, or plans for an elementary or middle school, factor that into the size of the homes you build, and what their amenities will be; buyers looking for those features are looking for “mover upper” homes – with a bit more floor space, and two (or three) bedrooms for the kids. Other spots to look for are anchor stores, like Wal-Mart and Best Buy. These companies spend millions on surveys of purchasing patterns before buying a store location; if they’re buying a plot of land, you’ve got about a year to a year and a half window to look into nearby real estate for single family residential and rental residential properties.

You can even flip this on its side – if you can talk to a group of commercial real estate investors, building a shopping center as the nucleus for home development is also a viable combined strategy. This also applies to highly urban areas. Many downtown areas that have been abandoned by businesses can be converted to apartment buildings, and some of the older housing projects are being torn down for mixed-use spaces …

The Real Cause of the Credit Crisis

Politicians and other talking heads (and thus the general public) seem to agree that the current credit crisis was caused by lack of governmental oversight of the big bad bankers. In actual fact, it was just the opposite. The cause of the crisis was Government pressure (mostly but not entirely from Democrats in the White House and Congress) imposed on the mortgage lending industry as far back as the beginning of the Clinton era. Semi-government institutions, Freddie Mac and Fannie Mae, caved in to the pressure, and by readily buying ever-increasing numbers of shaky loans, they made it highly profitable for loan originators (mostly local brokers and bankers) and loan "bundlers" ( Wall Street) to willingly go along.

Starting in 1992, a majority-Democratic Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, became aggressive and creative in stimulating "minority gains." The Clinton administration investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae's and Freddie Mac's portfolio were made up of loans to low-to medium-income borrowers by the year 2001. The Clinton administration criticized the mortgage industry for looking at " outdated criteria, "such as the mortgage applicant's credit history and ability to make a down payment. Threatening lawsuits, Clinton's Federal Reserve demanded that banks treat welfare payments and unemployment benefits as valid income sources to qualify for a mortgage. That isn't a joke – it's a fact.

By 1999, liberals were bragging about extending affirmative action to the financial sector. A Los Angeles Times reporter hailed the Clinton administration's affirmative action lending policies as one of the "hidden success stories" of the Clinton administration, saying that "black and Latino homeownership has surged to the highest level ever recorded." After 2001, a major new market was found for these loans-illegal immigrants.

Meanwhile, a few economists (but no politicians) were screaming that the Democrats were forcing mortgage lenders to issue loans that would fail as soon as the housing market slowed and overly-stretched borrowers couldn't get out of their loans by refinancing or selling their houses. In Bush's first year in office, the White House chief economist, N. Gregory Mankiw, warned that the government "implicit subsidy" of Fannie Mae and Freddie Mac, combined with loans to unqualified borrowers, was creating a huge risk for the entire financial system . Rep. Barney Frank denounced Mankiw, saying he had no "concern about housing". The New York Times reported that Fannie Mae and Freddie Mac were "under heavy assault by the Republicans," but these entities still had "important political allies" in the Democrats.

During the 2004 presidential campaign, George Bush bragged about the fact that a greater percentage of Americans owned their own homes than ever before, but (except for praising low interest rates) he did not explain how or why this happened. President Bush pushed even farther; he asked lawmakers to eliminate the down payment normally required for FHA loans. So Republicans have dirty …

Due Diligence for Real Estate Investing – An Overview

Due diligence drives the land development transaction because it supplies you with information you will need about a whole range of issues. These can include details about the zoning, location of public utility lines, soil classifications and prior subdivisions of the property. This need for information arises in your very first contact with the land parcel and continues as long as you are pursuing it or are involved with it by contract. In fact, your need to know different things about the property exists until you: (a) decide not to buy it; (b) put it under contract and subsequently bail out of the deal; or (c) sell the land or assign the contract to someone else.

While location may be the most important characteristic of a real estate parcel, thorough due diligence is critical to determining if the potential land development deal is viable. The information you obtain through your investigation is focused on your bottom-line question: do I want to buy this land parcel?

When you're doing your research, you should remember a couple of basic principles. Effective, thorough investigation usually must be hand's on. It will be time consuming to do and there are usually no short cuts. For every piece of data, there is a primary source. The primary source is likeliest to be the most accurate and current source of information. For instance, the primary source for real estate documents that are recorded (such as deeds, liens, easements, mortgages and subdivision plans) is the actual record of filings maintained by the applicable governmental department as well as the documents themselves that show the recording information on them. These are usually kept at the courthouse for the county in which the property is located.

Your local government or municipality is the primary source for zoning, subdivision and other ordinances because they originate and enact these local laws. The governmental body (local, county or otherwise) that is empowered to issue land development approvals is the source if you need to verify what conditions and restrictions may have been imposed when the parcel was subdivided. FEMA is the primary source for flood mapping and information because it is the repository and publisher of this data.

You might wonder if you could save time by doing the research online. After all, why should you go look at the actual document if you can obtain the information by using a database? The short answer is that you can't be sure that what you're getting online is accurate and up to date. In short, databases are great tools as long as you remember that they should never be used as a substitute for hands-on research at the primary source.

At best, these online collections of data (including those maintained by governmental agencies or departments) are secondary or tertiary sources, not primary ones. (The governmental database, however, may be the next best thing to the primary source depending on the manner in which it was created and the frequency with which it is …

The Real Purpose of Government Grants

We all know that government grants are a way for the citizens of a country to get free money from the tax payers, but the question is what's the whole point of doing that? Many people work very hard and do great things with their intelligence and business acumen, but get no help from the government at all. Why provide government grants to some people and not others if we all pay our fair share of taxes? The real purpose of government grants is so that the government can make a political decision of where to invest its money for the greater good of the country. It's their decision making that helps excel certain programs that can compete against foreign countries. It's intent is to continue to be a super power by putting money where it is needed.

For instance, one way government grants are offered are through small businesses. In the economic downturn, President Barack Obama needed to do something to help stimulate the economy again. People were losing their jobs and everyone was saving their money causing business to go down. The issuing of grants helped small businesses get back on their feet. These businesses now had the opportunity to hire more workers which provided more jobs to everyone. Money was being spent because people were getting their jobs back. The use of these grants can do great things if pointed in the right direction.

Many grants are also offered to help research facilities and technology developers to get their ideas rolling. The use of this money can help pay for a lot of expensive equipment that can expedite these companies' course of plan. If the United States is the first to discover something new, the government grants have done its job. It couldn't hurt to attempt to apply for these grants. Being honest and convincing can help you beat out your competition. If you are truly good at what you do and know your ideas can be put to good work, you should definitely apply for government grants to help make your dreams a reality.

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Locating Unclaimed Abandoned Property and Financial Assets in Israel Finding & Locating Real Estate

In Israel, thousands of assets totaling approximately 15 billion Israeli Shekels currently remain unclaimed. These unclaimed assets include land, developed real estate, bank accounts, stocks and bonds.

“Abandoned property” is defined in section 1 of the Law as an asset in respect of which no one is entitled and able to be treated as owners, or an asset whose owner is unknown.

Naturally, the need for claiming, finding such property, assets, lands by their rightful heirs arises. The process of locating lost, abandoned or unclaimed assets in Israel requires, among other things, a very competent, diligent Israeli attorney with depth understanding as well as a proper investigation to trace those lands & assets. How to find and locating a lost or abandoned property in Israel? This article discusses this matter.

The first step is to gather any relevant data including family tree and or any ID number in order to start the due diligence and genealogical evidence to track the property, estate in the Israeli Land Registry Offices “The Tabu”, Minhal or Hevra Meshakenet. We will learn the name of the current or historic landowner as well as his Israeli ID number or American/any passport. The information held by the Israeli TABU is considered highly credible and sensitive, and it is part of the Israeli land database.

Second step is to check: 1) managing the abandoned assets for the benefit of the private owner/s and 2) releasing the assets to those entitled to them after getting a Israeli probate court order, or where beneficiaries can not be located, transfer the property to the State of Israel until the right heirs will be found.

We handle various types of abandoned assets in Israel, including real estate, lands, personal property, funds and bank accounts. By law, an “abandoned property” in Israel is defined as an asset in which its owner or manager cannot be found or is unknown, and can be released only by a probate process and a court order that will determine the right heirs, and now owners of the Israeli land or any financial asset in Israel.

The Israeli government concludes its management of the property in one of three main actions. Firstly, it can release the asset to the person who is the lawful owner again by a Israeli probate court order. Alternatively, it can transfer the asset to the State of Israel. Thirdly and lastly it can transfer the asset to The Company for Location and Restitution of Holocaust Victims’ Assets, if appropriate.

We will discuss in detail the first aforementioned action – negotiation with The TABU over unclaimed property. In this case, the person claiming a right to the property must prove to the satisfaction of the Israeli Administrator General that he is the legal owner of the asset. In this process, the Israeli Administrator General will act very carefully to ensure that it has received sufficient information regarding the applicant’s rights and a probate court order that proofs the person are the legal heir. Then, …

Real Estate Appraisals – Get Yourself Prepared For Knowing the Value of Your Home

The collapse of the economy began with a reality wind blowing against the sub-prime mortgage house of cards. We are all living with the results of over aggressive lending practices and over active government intervention. With all these friends who needs any enemies?

As the market realigns, property valuations have plummeted. Some of you may even be "upside down" on your mortgages. Do you buy? Do you sell? Do you ride out the tsunami? This series will go through all the major questions that we normally encounter in determining the value of a property. What are the drivers? What are the inhibitors? What you need to know to get the best value.

What is Property valuation / real estate appraisal?

The purpose of property valuation is to provide a current market based value for a property in comparison to others in its immediate vicinity. So an appraisal is time, location and geography specific. It is a comparative value – not an absolute. Second, real estate appraisals are broken into two broad categories – residential and commercial. For the purposes of these papers we will be discussing strictly residential appraisals. Residential real estate appraisers are licensed by their respective states and have different levels of license levels based on the value of loan for the property. They have to take classes and pass certification tests to gain and maintain their license status. They are also usually bounded by county because of the way Multiple Listing Services (MLS) keep and sell their records. So a good appraiser really knows their geography and what to look for.

Why does it cost so much?

Real estate appraisers are traditionally independent contractors / business people – no appraisals = no money. So while you are paying a relatively standard one time fee (eg, $ 400) they have to make sure they get as many appraisals in as they can to make any profit at all. How's that? After all they've got your $ 400. An appraiser has to cover all out of pocket expenses the same as any business person (education, health insurance, MLS fees, liability fees, business insurance, state fees – the list goes on). In addition a good appraiser may spend anywhere from 3 to 6 hours in preparation (looking for comparables, etc.), have a 45 minute or more drive time to location, 2 hours driving comparables and taking pictures and then another 1 -3 hours writing the report and then if the bank wants more info or kicks anything back they have to invest the time to answer questions, etc.

Also, is they get your request from another appraiser or from one of these new rip off government created middlemen called AMCs – they may have to split the fee. These are all just the costs of doing business. So when someone stops by for 30 to 60 minutes with a tape measure know that it's the tip of the iceberg and you're getting a good deal.

Do I own the appraisal?

10.2 Percent? Would the Real Unemployment Rate Please Stand Up

Today, the federal government released statistics showing that the unemployment rate rose to 10.2%– more than expected. Unfortunately for the United States, that number, while grim for many, doesn’t remotely reflect the true unemployment. The jump past 10% was attributed to changes in teen unemployment and the self-employed. Although many economists were surprised by the leap, it shouldn’t have come to a shock to anyone who really understands the unemployment figures. Anyone that delves into the Bureau of Labors Statistics (BLS) statistics, the organization that calculates official unemployment, would know that the true unemployment rate likely lies somewhere between 17% and 22%.

Both families and individuals need to make smart decisions about their spending as the government and the press paints a picture of a recovering economy. The government has a vested interest in consumers opening up their pocketbooks to get the economy going again. However, if such spending is done on credit, as was the case for the first seven years of this decade, households will only find themselves further behind in the future. The recent stimulus programs including Cash for Clunkers and the recently extended Homebuyer tax credit take the two largest debt producing transactions and incentivize them with a relatively modest 3% to 18% contribution from the federal government.

It is smart for the government because the sales and income taxes generated at the state and local level make all governments as a whole even on the transaction. Since the Federal government would likely have to bail out some of the states, particularly California, such programs allow the government to make a tax transfer indirectly instead of providing additional grant funds or emergency loans. But if consumers were fully aware of the state of unemployment, would they be so eager to buy a house or an automobile?

The official unemployment statistics give a relatively rosy picture of America. Simply interpreted, one would think that 9 out of every 10 Americans are employed. That thinking is completely erroneous and fails to understand the nuances of the governments’ statistics. In order to fully understand how unemployment is calculated, one needs to first know its official definition. The official BLS definition of employment is:

Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work.

Such a definition is open to a significant amount of interpretation and most importantly excludes those who have given up all hope of getting a job. The BLS also requires specific evidence that someone has been looking actively for a job, in absence of such evidence, the individual is considered to be “Not in the Labor Force”. If large numbers of unemployed persons were not being counted, one would expect to see a surge in those “Not in the Labor Force”. Such a dramatic increase has been occurring since the 1990s and has only accelerated in recent years. The table below is taken from the BLS Household data …

How The Overall Economy Impacts Real Estate?

Many of us, who are involved, on a daily basis, with the many nuances of real estate, get so involved with buying, selling, marketing, and promoting homes, and making/ giving listing presentation, we often ignore, the many economic factors and other conditions, which impact the real estate market. Some of these factors are local, in nature, while others may be national or international/ global. Some are actual, while others are perceived (for example, belief in their job security, negative possibilities because of some action taken by government, etc). With that in mind, this article will attempt to briefly consider, examine, review, and discuss, how the overall economy impacts the real estate/ housing markets.

1. Mortgage/ interest rates: When the Federal Reserve announces they are raising, planning to, or considering raising rates, in most instances, mortgage rates follow. About 2 years ago, we witnessed historically low mortgage rates, and today, while, from an historic perspective, they are still relatively low, they are about one percent higher, than they were, at the low. When mortgage rates are low, many buyers qualify for a higher price, and thus, we often witness a rice in home prices. As they rise, generally, prices, and, especially, the rate of increase, slows.

2. Taxes: When local real estate taxes are comparatively low, the effect on monthly carrying charges, is a positive, for the housing market. When they rise, they cause homeowners, to have to pay more monthly. Some houses, neighborhoods, regions, counties, etc, have lower taxes than others, so when one region abruptly raises rates, that local market is hurt, and certain surrounding areas benefit. In addition, in higher tax areas, such as New York, New Jersey, Connecticut. Massachusetts, Illinois, California, last year’s tax legislation, may have potential longer – term ramifications, on the housing market. That inclusion, known as State and Local Taxes, or SALT, limited/ capped the federal tax deduction, permitted, for state and local taxes, to a total of $10,000. Since many houses in these regions, have much higher taxes, and, several of these areas, also have state and/ or regional taxes, these caps, have the potential, to harm the real estate market, especially, if, they increase, any more.

3. Jobs: Do people perceive, they have job security? Is the job market, strong, or relatively weak? Are incomes increasing? The more confident, and comfortable, qualified potential buyers, are, the stronger the market.

4. Overall economy, and world news: For example, if the present, partial government shutdown, continues, for a substantial period, many workers, industries, and small businesses, especially, will be negatively impacted! There seems to be lots of fears, doubts, and insecurities, about safety, etc. The more confident, the public is, the better off, usually, is the real estate market.

These items are just the tip of the factors, which have an impact on the housing market. Beware, prepare, and plan accordingly.

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Looking Ahead To 2019: What Factors Should Real Estate Examine?

Anyone, who, either, as a professional, or, simply, a curious observer, watches the real estate markets, and possibilities, must take a close look at the possible factors, which might impact, what might be trends in the housing market, as well as the overall economy. Beware, there are no guarantees, but, simply probabilities, or best guesses (also called, educated guesses)! After more than a decade as a Licensed Real Estate Salesperson, in the State of New York, I believe, the more educated and aware, a potential buyer might be, the better his chances. That’s why I have been using my trademarked slogan, for many years, I’ll always tell you what you need to know, not just what you want to hear. (TM)

1. Interest rates and mortgage rates/ terms: Most economists are forecasting a gradual, moderate rise, in interest rates, and the Federal Reserve, has stated, its intentions to raise rates, twice during 2019. Most believe these will be, relatively minor increases, and, with present mortgage rates, relatively low (from a historic perspective), the overall result will probably be, fewer qualified buyers, slightly higher monthly payments, and probably, a slower rate of price increases (especially in terms of the pace). When rates rise, potential buyers often shop for slightly less house.

2. SALT: In the tax legislation, passed, at the end of 2017, there is a cap placed, on the amount of State and Local Taxes, known as SALT, which remain tax – deductible. In higher tax states, such as New York, New Jersey, Connecticut, Massachusetts, Illinois, California, etc, this becomes significant, in terms of selling a house, especially if it is, in the higher price range. Potential buyers might consider, home ownership, as less beneficial, from a tax standpoint, and, this might, hinder the perceived value, and desirability, of purchasing certain types of homes.

3. Uncertainties: No one knows for sure, how long, the present, partial government shutdown, might last, and continue, but, at present, the opposing sides, appear far apart, and not close to a meeting – of – the – minds! Uncertainty is the enemy of nearly every financial market! Will the Stock Market continue on its present downward spiral? Will the changing political climate, be a positive or negative influence? How will consumer confidence be, during 2019? Will potential buyers perceive, job security, which encourages, especially, new buyers, to seek a home, of their own?

An educated consumer, who pays close attention, and is aware, and prepares, normally, is most successful. What are your real estate plans, for 2019?

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