DEAN GRAZIOSI: DEAN GRAZIOSI REAL ESTATE – REAL ESTATE FEED BY DEAN GRAZIOSI

There is a massive ‘shadow inventory’ of around 7 million units, which is primarily made up of distressed and foreclosed properties, in the pipelines that the banks haven’t put up in the market yet. Once this shipload of inventory hits the shelves of sellers, it is going to further pull the rates down. This is one of the reasons why top researchers like Senior Managing Director of Research for Wall Street, Amherst Securities, Dr Laurie Goodman, believe that the market is going to go down further in the coming months, due to impact of the low cost inventory building up.

Dr Laurie Goodman also indicated that the prices could see a fall of around 8-10 percent in the forth-coming months. This may not completely push down the prices since the consumer demands are also increasing, which might just counter balance the price depression. Adding to the inventory of homes are the delinquent accounts, which have not been able to sustain the repayments due to a job market that has not really improved. Thus, with income in trickles, many have not been able to meet their commitments. These homeowners have been forced by circumstance to approach banks with foreclosure requests to qualify for government programs. The foreclosure rates in the country have increased over the second quarter by 5 percent.

There are multi fold factors, which have increased the foreclosure rates and will most likely keep them high for some time to come. Most lenders have not yet pressed foreclosures due to the loan modification programs extended to the homeowners. When this period ends, and the modifications don’t bring in the necessary economic relief, many more will be forced to close.

Adding to the difficulty is the yearly rate adjustments in flexible home loan rates, which will kick in now and may produce increased commitments resulting in greater financial difficulties for owners. Compounding to the fiscal problems is the mounting unemployment of 9.8 percent, which is slated to increase further. Therefore, most believe there will another tide of foreclosures soon.

The picture looks bleak and gloomy for many, but for others who have saved enough and are in financially secure positions, the situation is ripe for a home. The interest rates are the lowest and going down week by week, the prices are low and the choices are many, including resale homes. If you are financially stable, you should drive a hard bargain not only on the price of the house, but also on the interest rate of your home loan. This might be your best opportunity, but do your financials right and get them double-checked before you take the plunge.

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Smart real estate investors retain a real estate attorney.  Investors have one week to review the purchase and sale offer and one week to review loan terms and conditions.  Why gamble?  The right attorney can serve as consultant, tax adviser and listener.  You could do a lot worse.  Yes the attorney will cost some mo0ney, but the peace of mind is well worth the investment.   

Real estate investments are sizable.  Your investment is a serious, business transaction.  Attorneys who specialize in real estate law are worth their salt and can protect your interests, make sure you get what you expect while helping to negotiate with all interested parties.

Here are a few of the services your real estate attorney will provide:

·                     Review and explain the purchase offer and contract.

·                     Resolve all contingencies including issues with the structural inspection.

·                     Check that there are no covenants, easements, liens or other conditions that could affect the title.

·                     Prepare and register all legal documents.

·                     Review, explain and clarify the terms of the mortgage.

·                     Modify mortgage terms

·                     Calculate all adjustments to be made at closing including tax adjustments and utility and water credits.

·                     Review all documents prior to and at closing.

·                     Attend closing.

·                     Arrange title insurance protection.

·                     Make sure everything proceeds in an orderly manner and that you receive what you expect.

When selling, there is more to do than collect the money.  You need representation to accomplish the following:

·                     Review the purchase offer and contract.

·                     Help clarify all negotiations.

·                     Prepare the deed for transfer

·                     Procure power of attorney if you will not attend closing

·                     Attend closing

·                     Review all closing documents and statements

·                     Arrange for transfer of deposits

·                     Arrange insurance certificates

·                     Calculate credits

·                     Confirm and arrange mortgage payout.

Many of today’s homeowners would not be in the position they now find themselves had they elected to retain legal representation.  Can you imagine spending hundreds of thousands of dollars and entering into a financial commitment for 15 or thirty years without expert advice?  It doesn’t make sense, does it?

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At the International Commercial Property Exposition in Munich Germany, some pretty surprising and very disappointing numbers were released.  Foreign investment in U.S. real estate fell a whopping 77% in year-over-year comparisons.  The $14 billion outside investment in U.S. real estate fell behind the $15 billion invested in Japan and ahead of the $11 billion invested in the United Kingdom.

Perhaps the most startling transaction was the sale of the Worldwide Plaza at 825 Eight Avenue in Manhattan.  When the building was fully occupied in 2007, investor Harry Macklowe purchased the property for $1.7 billion.  After Macklowe defaulted on $7 billion in debt, Deutsche Bank took over the Plaza and eventually sold it to a joint venture spearheaded by George Comfort & Sons.  The selling price was $605 million.

The building is only 60% occupied with an initial net yield of about 6.3%.  If the new owners improve the building’s occupancy rate, the net yields should increase to 12%.

Also in New York, SL Green has agreed in principle to sell 49.5% of its interest in 485 Lexington Avenue to a joint venture between Gilmore USA and Optibase Ltd., an Israeli-based technology company.  The joint venture is paying $21 million and assuming the $450 million of existing debt.  Once the property is closed, the joint venture expects to acquire another 49.4% interest from SL Green.

While the downturn in the first half of they year was dramatic, July and August have seen investment from Germany and Asia begin to come back to the market.  New York and San Francisco have become popular targets for on and closed-end German and Asian funds. 

In Washington D.C., the largest transaction of the year has taken place.  Public REIT Vornado sold 1999 K Street to German investor Deka, an open-end fund.  The sale price was $208 million or $830 per square foot.  At the same time, Credit Suisse purchased 1099 New York Avenue from Tishman Speyer for $90.5 million.  Big investor’s are wheeling and dealing in big markets and betting on their ability to fill unoccupied space.

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The investor who takes a long view of real estate investing is a professional investor.  There is no substitute for buying low and selling high but real estate investors know the quick turnover is difficult to accomplish and that every real estate transaction has built-in expenses that cut into that quick profit.  Like all forms of investment, your real estate plan will include a description of your risk tolerance and appetite.  Making money in real estate involves hard work and discipline.  There is no way around those components.

To help analyze each transaction and assure conformity to your overall investment plan, real estate investors build a reliable team of professionals.  Your real estate consulting team should include:

·    An agent
·    An appraiser
·    A home inspector
·    A closing attorney
·    A lender for purchases
·    A lender for sales
·    A maintenance expert
·    A general contractor

The general contractor should have a general knowledge in plumbing, electrical, heating and air-conditioning, roofing, painting and flooring systems.  The maintenance expert should be familiar with cleaning costs, lawn services and windows cleaning services.

This team of experts can help in many ways.  However, their biggest contributions will help protect the real estate investor from the greatest sin, which is overpaying for real estate.

The reason to build a team of professionals is to heed their advice.  Investors must understand the numbers behind the numbers, but they must also respect the input of their chosen professionals.  When the numbers do not add up, it is time to move on to the next opportunity.

The evaluation of these numbers is the moment of truth in every real estate transaction.  When the transaction does not fit, the professional investor walks away.  Follow your plan and the profits will be there.

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Here I was, a woman, having gone through foreclosure, and yet still having the firm belief that I could purchase another home (no one in my family believed in me).  Everyone told me to “forget it.” There was just no way I was going to be able to purchase another home. I would get comments like: “Don’t worry! You’re a woman, when you get married your husband can help you purchase another home.”

I didn’t want that! I didn’t want to live with the failure of never being able to buy my own home. It had nothing to do with whether I was a woman or not!  So, one day, as I was lamenting my situation I saw a comment on twitter about how it was possible to purchase a home again, even after going through a foreclosure.

The twitter comment redirected me to a Wiki, that went on to give me the basic steps which needed to be followed to be able to purchase a home again:

The Wiki went on to say that the first thing that needed to be done was to re-establish credit. I read all the way through it, and then continued to do research elsewhere, and that’s when I found Dean Graziosi , who confirmed a lot of what I was reading on blogs, wikis and on twitter.  From the weeks of research I did, I learned the following.

The First Year after Foreclosure is the Toughest. When the foreclosure has been discharged you can start reestablishing credit, but the first year after a foreclosure is the most difficult.  Your credit score will sit somewhere around 550 or lower, and with this score you could qualify for a home loan but you will qualify for the highest rate. If you wait a year then your score can increase to 600 and drop your mortgage rate by a point or two, and by the second year, if you play your card right you can have a good credit standing and get a normal mortgage loan.

So, I decided to wait a little over a year before I started home shopping again, but during that time I also worked on improving my credit score. I opened a new credit card account, and started paying everything on time. I started saving for that down payment, which also helped my credit score.

Then once I was ready, I first checked my credit report to make sure that everything was correct and accurate. I didn’t want to have to pay for other people’s mistakes!

Another great thing I learned from Dean Graziosi was how to plan out my house payments, and figure out what my mortgage payment was going to be even before “shopping for the home.” I learned about different types of mortgages, and what type I wanted, or needed, what type of home I could afford and what to look for in a home, what features were important and which weren’t.

Today, my family and friends have realized that a woman can do more for herself without having to depend on her spouse, and that it is in a woman’s best interest to be financially independent.

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It is easy to assume you will make money on an investment property such as an apartment complex, store/mall building, or business complex and in most cases you will. What makes the difference between making a few dollars and making maximum profits is to know what the costs are going in. Your first step is to learn how to understand a cash flow statement.
A complete cash flow statement will include, not only the upfront costs of operating an investment property i.e.: cost vs. rental unit’s value but also underlying expenses such as utilities, taxes, insurance.
You should also find out the turnover in your proposed rental. If your renters are already in place, if there are vacant spaces, typical lengths of stay are all a part of knowing how reliable your investment will be. These figures are less solid than the above expenses and you should always take into account that the possibility you will have less income than the building is capable of but your fixed expenses will remain constant and save accordingly for times when rentals are under-performing.
Once you have taken all of these figures into consideration and feel a property is a good investment you are still not ready to take the plunge. Figures look good on paper but the property itself needs to look good in person. Make sure everything is in operating order unless you know ahead of time you are going to be putting money into repairs. If you are open to fixing up a property the price should definitely reflect the costs you will be putting into a building before it is up to your standards.
Now you are ready to make that jump into the rental world. When you close on your property and hold the keys, you are a landlord in an exciting new world of real estate investments knowing you’ve made all the right moves to insure security and profit.

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Just about anywhere you go online looking for real estate information will have a handy calculator meant to show you how much you can afford to spend on a new home. While some of these can be very detailed and accurate, many rely solely on your income.

Many of these figure your housing budget at 40% of your annual income, the figure used by most lending institutions.  However, you should always figure out for yourself how much you can afford, as it may be more or less than this number depending on a number of other factors in your life. By following a few pointers when adding all this up, you may get a much clearer understanding of your financial situation and hopefully avoid any future issues with your mortgage payment.

The first step is to determine the total amount of your income after taxes, then take out your expenditures. This should include all your monthly household bills including pet expenses, child care, fuel, etc. as well as whatever portion you either set aside or think you may need for unforeseen expenses. If you are currently renting, your monthly rental payment can be added back into your income as you won’t have this expense once you buy the new house. If you currently own a home you’re planning on selling, keep that payment in the equation until it is definitely sold so you will not be in danger of losing either the existing house or a new one.

Whatever is left out of this calculation is your “surplus income.” Surplus should never be used to its limits, especially if you do not have a sizeable emergency savings account, because you never know when your costs may go up or your pay may go down. Ideally, a house payment will be no more than half of this “surplus”, though it’s not always possible to keep it to that low of a percentage. If needed, cut out unnecessary bills such as entertainment, restaurant dining, or anything else that may be discontinued if need be to allow you to purchase the home you want.

Knowing the exact market price you can afford for a home requires knowing the terms of a potential loan. Run a credit report, then discuss your options with a lender to try to get a general idea what percent interest you’ll be paying.  Determine whether points are available and whether you plan to purchase any. Finally, discuss what kind of closing costs will be charged to you or added onto your loan. Now you have all the information necessary to place a dollar amount on what you can afford based on the monthly payment you can afford.

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A year ago when I had my last child, I sat down analyzed my life and decided it was time to start thinking differently about life. I was tired of the rat race and I wanted to stay home and enjoy my son. I needed to continue to work but I did not want to work out of the house.  Was this one of those gender disputes? Maybe! But I wasn’t interested in what others thought. I just knew I was a single parent, a woman, who wanted to work from home on something that was worthwhile to me and be around for those important moments in my children’s lives.The first place I turned was the internet, because it was a huge resource of information and it was easily accessible. I didn’t really know what I was looking for but I started reading real estate reviews. I figured if I was going to stay home and work, then I would start by looking into a field that wasn’t considered “in” for the female gender.  After all I enjoyed purchasing my home, so why wouldn’t I enjoy real estate investing, and I wanted something that would eventually allow me to work less, so real estate investing seemed ideal. Unfortunately I didn’t know much about real estate investing, but I wasn’t “dumb” either.  I just needed to learn as much as I could about real estate investing before jumping in, so I read real estate review after review.

I came across wikis, and talked about it on twitter. I read, I watched, and I listened. While I was listening and reading, I came across a wiki that mentioned Dean Grazziosi  and the real estate success academy. Now, I know there are a lot of online businesses that are frauds, but I had heard a lot of good things about Dean Grazziosi. So after careful consideration, I decided to join the real estate success academy. I wasn´t going to allow any guy to crack a gender joke at my expense, I really wanted to know everything there was to know about real estate investing and becoming a true millionaire. I didn’t want to just dream about being a millionaire, start on some fraud program, end up spending a small fortune and get nowhere.

I was sure the Success Academy was a legitimate business, and one that would help walk me through every real estate investing dream I had. They would show me the “ins and outs,” the type of documents I needed and everything that would keep my transaction profitable.

To date I am not sorry I became a part of the Dean Grazziosi team. It has been one of the best decisions I made and today I am well on my way to becoming that real estate  millionaire I always dreamed of becoming.

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Whether you are a real estate wholesaler, rehabber, flipper or landlord, you probably don’t have to be told that selling a property in 2009 is not the piece of cake it was in 2005.  Yes, times have definitely changed, and in order to profit from real estate right now, you must create and use a different set of techniques to get the job done.

While it may seem impossible to make real estate millions in a down market, the truth of the matter is that it is not that difficult if you know how to market yourself and your properties creatively.  If you specialize in wholesaling real estate, one of the most effective tools you can use to find buyers in today’s market is to create your own VIP buying program.  It is a very simple concept.  The idea behind this is to make buyers feel special.  By giving a club of buyers “insider only deals”, you are able to make them jump when you need them to jump, and this gets your real estate sold.

So how does it work?  First of all, you have to decide how a buyer will get on your VIP list.  Make it simple, but make it work for you.  When someone buys one of your properties, put them on the list.  Moreover, make potential buyers want to be on your “A” list.  Once someone is on your list, make it a point to contact them whenever you have a new deal and offer them an exclusive pre-market discount.  There is almost nothing that will sell real estate better than “insider” discounts and in a down economy, they should be incorporated into as many deals as possible.

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Thanks to the Internet everything has become more sedentary—and easy. Perhaps the value of a sedentary lifestyle is an argument for the National Obesity Society to argue (if there is such an organization), but what it means for real estate investors is your job couldn’t be easier thanks to modern technology.
What used to require legwork now can be completed from the comfort of your couch, home office work station, or bedroom. Your commute is only as far away as your keyboard. Thanks to listing sites online, foreclosure sites online and even county records often accessible online you don’t have to leave home to find out any of the information you used to have to chase after in the past. In fact, some investments can be handled more than 90% from your home. If you are interested in operating a finder’s service for other investors you may never have to leave your home at all except to sign the final deal.
Surely, many real estate projects will require some legwork (even if your legwork involves 4 wheels and an engine, you still have to go outside) but even then unless you are doing the construction work on a flip yourself much of the contracting can be done from your workstation at home. Most real estate projects can be handled from beginning to end with a telephone, a computer, and very minimal outside work.
The biggest part of most real estate transactions involves research and that is where the Internet comes in. Everything is online making finding information easy. The next most important real estate investor necessity is networking, connections, market and strategy information and all of that is so much more accessible now than it was in the past. Prior to the Internet and its vast connections new investors often felt alone in a sea of confusion. Thanks to the connecting abilities of the Internet it’s easy to find others who are working toward the same end, have experience to learn from and are eager to share it.

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