After many months of deliberations, the Senate finally passed a housing bill in a special Saturday session of Congress to come to the aid of the widely troubled real estate market and struggling government-backed mortgage companies, which have been pressing the government for aid since September of 2007.

The real estate market has been plagued by a surge of foreclosures, mortgage defaults, and deflating home values since the market bubble burst in 2007. Many homeowners have been struggling to make mortgage payments and stay in their homes as adjustable rate mortgages (a popular financing option during the boom) reset to higher interest rates.

To compound the problem, home values continue to deflate as more inventory and foreclosures hit the market. In areas like Las Vegas, Southern California, and Southwest Florida, some communities have lost up to 50% of their home values in the past six months.

"This legislation won't perform miracles. But as others have said, it's a step - and I hope an important step - to putting our nation on the road to economic recovery," Senator Christopher Dodd (D-Conn.) chairman of the Senate Banking Committee and a principal author of the bill said to CNN.

The previous Wednesday, the House of Representatives passed the bill that would allocate up to $300 billion in loans for struggling homeowners and bail out troubled mortgage security giants Fannie Mae and Freddie Mac.

The legislation passed shortly after President Bush reversed his stance on the issue. Previously, Bush vowed to veto any housing bill that came to his desk. In February, Bush remarked to reporters: "We are committed to a good housing bill that will help folks stay in their house as opposed to a housing bill that will reward speculators and lenders. I will veto the bill that's moving through the House today if it makes it to my desk."

The House passed the bill last Wednesday with an overwhelming 272-152 vote. Just hours before the House voted, President Bush withdrew his veto threat saying the housing market and the economy as a whole could use a "bolster in consumer and investor confidence."

Shortly after the House vote, the Senate met on Saturday to nearly unanimously approve the bill. The Senate voted 72-13 in favor of the housing bailout bill.

Despite the bipartisan push to approve the bill, the housing bailout was not without its staunch opponents. Many have argued that mortgage lenders and Fannie Mae/Freddie Mac should not be "bailed out" for their reckless and often predatory lending practices.

"You make your bed, you lie in it," says Toni Gehman, a high profile real estate investor. "It's [the housing bill] irresponsible and the American tax payers should not be the ones held accountable for the greed and predation of banks and mortgage lenders," a heated Gehman continued.

If President Bush passes the bill as expected, the provisions would include:

Expanded FHA Program- the Federal Housing Administration would be permitted to insure up to $300 billion in new fixed -rate mortgages for at-risk borrowers, which would begin October 1^st.

Stronger Regulations for Government Sponsored Enterprises- the bill would essentially give greater regulatory oversight in government sponsored enterprises (GSEs) that have a major impact on the mortgage and housing markets, i.e. Freddie Mac and Fannie Mae.

Permenant Changes to FHA Loan Limits- the bill would permanently increase the cap on federally guaranteed mortgages from $417,000 to $625,500.

Tax Refunds- the bill includes a provision to give tax refunds (up to 10% of the home's value with a $7,500 limit) to first time homebuyers.

Eliminate Down-Payment Assistance for FHA Loans- Sellers would no longer be allowed to provide assistance by providing down payments on FHA backed loans.

State Grants for Foreclosure Rehab- the bill would allocate $4 billion to states to buy up and rehab foreclosed properties. Foreclosed properties bring down property values in the surrounding neighborhood and are notorious magnets for crime and criminal deviants.

Real estate investing in a general sense involves the purchasing of real estate for

Advantages of Real Estate Investing

There are many entrepreneurs out there who argue that real estate investing is a win-win situation where you simply cannot lose money. Of course, this has to be false because there is no fail-safe way to invest in anything without some risk. Despite the risks, there are plenty of advantages to investing in real estate.

The first major advantage to investing in real estate is that you are purchasing an extremely expensive product. Therefore, each property you sell generates more profit potential.

Next advantage with real estate investing is leverage, or the ability to borrow based on the value of the property. It is much easier to finance real estate than any other investment product. Investing in other assets requires you to have the full purchase payment available to obtain that asset. However, when investing in real estate, you only need to have a fraction of the purchase price available (like a 5%, 10% or 20% down payment per say). As a result, real estate, although extremely expensive, is still easier to buy than say, a piece of industrial equipment of the same value.

Furthermore, local advantages in real estate investments is very rarely discussed, yet it stands to reason that you would know your city, town, and neighborhood better than any real estate investing expert from another part of the country or world. This is an advantage that the beginner real estate investor can capitalize on.
 
One way a beginner can get started in real estate investing with minimal personal risk is to bird dog. ‘Bird dogging' is when you search for good deals for another, more experienced investor. This way the beginner learns to find, recognize, and understand a good value.

It should also be noted that the bulk of the world's assets are in real estate.

Disadvantages of Real Estate Investing

The biggest disadvantage in real estate is that is is a non-liquid investment that requires maintenance and taxes to be paid. An optimal investment portfolio would have some liquid assets that can be quickly converted to cash in order to sustain real estate investments when their returns are not sufficient enough to pay recurring costs.

During a real estate boom, a lot of speculators were prone to making purchases without pre-calculating the purchasing costs and the ongoing costs involved. Then, of course, real estate started working against these investors, rather than for them, resulting in a loss at resale.

And another disadvantage is that there is no guarantee that home values will maintain themselves as the economy and society evolves and fluctuates.  

Real estate tycoon Donald Trump set a new record last Tuesday, as he agreed to sell his sprawling Florida mansion to Dmitry Rybolovlev, a Russian billionaire who owns Uralkali, a mining company whose net worth is said to be over $12 billion.

The 62,000 square foot mansion located at 515 N. County Road in Palm Beach, Florida, was purchased by Trump in 2004 in a bankruptcy sale for a mere $41.3 million dollars. The mansion, known as Maison de l'Amitie (The House of Friendship), features:

• Nine bedrooms
• A Ballroom
• A 100 foot long swimming pool
• A conservatory
• A 48-car garage
• Over 6 acres of property
• And 475 feet of prime oceanfront beach access

Trump closed the deal last week by accepting a $95 million contract plus brokerage fees, which put the final sale price of the home at just over $100 million. Another $655,000 in documentary taxes was also paid on the sale. Property taxes on the home are said to be a staggering $16 million annually.

The sale of the mansion is believed to be the most expensive home ever sold inside the United States. "I love breaking records, and this is a record," Trump exclaimed to the Palm Beach Daily News.

Rybolovlev confirmed he was the buyer of Trump's Palm Beach mansion in a statement released by the Wall Street Journal.

And, according to several sources, Rybolovlev may consider tearing down the $100 million mansion to replace it with a new one.

Trump originally put the Florida mansion on the market for $125 million in 2006.

Check out some of these projects and tips to help you easily update your bathroom:

Upgrade Accessories- One of the easiest and cheapest ways to update your bathroom's look is to upgrade your accessories. For instance, replacing old faucets, shower heads, shower curtains, electrical switch plates, toilet seats, etc. can give your bathroom a "facelift" without having to make any major repairs. Upgrading your bathroom accessories is probably the easiest and cheapest way to polish up your bathroom's appeal because these can all be done yourself and don't require a lot of money to do.

Upgrade Shower- If your shower is in pretty good condition, consider replacing just the shower head, faucets, drain, shower curtain and rod. However, if your shower has a few minor problems, consider spot treating these problems by replacing a few tiles, by spot repairing with fiberglass compound, or by replacing the liner. And, if your shower is in complete disarray and desperately needs to be replaced, a low cost option is to install a prefabricated shower stall unit, which is pre-formed in a factory and is ready to be installed the moment it gets delivered to your house. Pre-Fab shower units are light-weight, flexible, and easy to install yourself.

Upgrade Lighting- If your bathroom still dons the vanity lighting of yesteryears; consider spending some money on new vanity lights. You can find cheap vanity lighting at any big chain hardware store. Installation can also be done yourself, so there is no need to pay for labor on a project like this. Check out Bob Vandervort's step-by-step vanity lighting installation guide.

Upgrade Vanity and Cabinets- While replacing an entire vanity is the ideal way to upgrade a bathroom, it can be very expensive and you'll most likely have to hire someone to install it. A cheaper and do-it-yourself alternative would be to rehab your current vanity. To do this, you can paint the vanity or cabinets in the same way you would paint kitchen cabinets. Then, replace your old cabinet knobs with some new decorative pull knobs and your bathroom will look fresh and new again, without having to buy and replace the entire vanity.

(Posted by K.Skowronski)

Are you

After several years of frivolous lending practices - where people with poor credit and no down payment could obtain excessively large loans - banks, lenders, and most importantly: homebuyers are now paying the price.

New Jersey mortgage broker Pamela Brown says, "I've been getting more mortgage applications in the past six months than I've had in years. And unfortunately, I can only put less than half of them into loans."

This trend is happening all around the country, according to the National Association of Realtors. And, in deeply depreciating markets, lenders are even more reluctant to issue loans unless homebuyers put down at least 10%.

What's more, buyers seeking to purchase investment properties are getting hammered even harder. Banks and lenders are telling investors to come up with at least 25%, or even as much as 35% of the purchase price to obtain a loan.

"In situations like these, homebuyers and investors should take advantage of alternative financing methods like seller-carry financing," says Brown.

Seller financing, which is also called owner financing and carry-back financing, is when a homeowner helps to finance a real estate transaction by taking back a second note or by financing the purchase -- if the seller owns the home outright. 

Owner financing differs from a traditional loan because a seller does not loan the buyer cash to complete a purchase, as does a lender. Instead, owner financing involves extending a credit against the purchase price of the home while the buyer executes a promissory note and trust deed in the seller's favor.

To find out more information about this type of financing, visit http://www.butterflylister.com/About-Us.htm

(Posted by K.Skowronski)

I get so frustrated lately reading all the latest news from the major media outlets like ABC, NBC, MSNBC, etc. Their portrayal of the housing market situation grows bleaker and more grossly exaggerated on a daily basis. I'm tired of all this negative nonsense. Yes, I admit that lenders, a group of homeowners, and the general marketplace is in a trough, but why the news of impending doom on a daily basis?

Clearly the writers and editors down at the major news stations don't see the bright side of the housing downturn. I guess they don't realize that lower housing prices is a good thing for investors and homebuyers. Now that home prices have dropped to affordable (and more accurate values), the millions of buyers who were edged out of the market during the boom, can finally afford a home.

Another bright side of the real estate market trough is the ability of investors to find some great deals. With high foreclosure rates and even higher inventory levels, there are plenty of "good buys" out there. While investors can scoop up some amazing deals, they may have to wait it out a few years for the market to shift to a seller's market once again. In the meantime, many investors will be renting out their purchases for some added income, until they can sell the home for a profit.

Now, if you are on the other end of the spectrum... the seller, you are more than likely struggling to get your property sold. However, there are several proven strategies that can help you sell your property faster and at a higher price, without paying huge fees to hire a realtor.

Use the following procedures as a guideline to improve your chances of selling your home faster, and at a higher price:

• 1. Debut on Friday- According to many different internet sites, Friday generates more online traffic than any other day of the week. Use this to your advantage. Since the majority home buyers will be browsing pages on Friday, a great strategy would be to debut your listing on Friday. And because your listing is new, it will most likely appear at the top of the page. This could potentially generate much more traffic to your listing then if you debuted on Tuesday.
• 2. Market Online- Research has consistently shown that online marketing is the single best tool to get the word out about your property. According to the California Association of Realtors, seventy-two percent of California home buyers use the Internet as an important part of the home-buying process. This statistic highlights the importance of marketing your property online in order to increase exposure to potentially decrease the time it takes to sell and increase the properties value. Since the overwhelming majority of people now use the internet as their primary source of information, you cannot afford to pass on this valuable marketing resource.
• 3. Do not Overprice the Property- A high listing price can sometimes cause an interested buyer to bypass your property without a second thought; call it real-estate sticker shock if you will. Often times, listing at a lower price will a.) generate greater interest in you home, b.) encourage interested buyers to become more aggressive in bidding and negotiations for your home.
• 4. Wait Until Foreclosures are Off the Market- With the enormous surge in foreclosed properties, it is unlikely that your area has not been affected in some way, shape, or form. Foreclosures have a devastating effect on surrounding properties and could lower you property value by an average of $5,000, according to a report from the Center for Responsible Lending. Moreover, banks are typically eager to unload foreclosed properties at substantially lower prices; giving your listing some stiff competition. As a result, it is wise to wait until any foreclosed properties in your surrounding area have gone off the market. If you simply cannot wait, you will have to account for it in your listing price.
• 5. Stay Motivated- The proverb, "A squeaky wheel gets the grease" is still relevant for real-estate and selling a home. Studies consistently show that motivate and engaged sellers are able to sell their properties up to 30% faster than typical sellers. Staying on top of communications between buyers and agents can substantially increase the chances of selling your home quickly and at a better price. Aloofness in any business can deter buyers since most people favor direct interpersonal communication. Moreover, being outgoing can encourage a better deal with buyers and motivate agents to be more aggressive on your behalf.

(Posted by: K. Skowronski)

With the

"We are actually seeing rental rates for apartments and other properties rise in most parts of the country, probably as a result of the housing market downturn," continues Clark. Thankfully for investors and landlords, the news comes as a refreshingly positive note, especially as the real-estate market has been plagued by recent surge in defaults and foreclosures as a result of predatory, no-money down lending practices.

In recent months, asking rental rates have increased up to 14% in some regions. Moreover, vacancy rates of rental properties have hit all time lows, making the rental market prime time for both investors and renters. The surge in families and individuals choosing to rent rather than own can most likely be attributed to increasingly stringent lending standards.

"Most people with decent credit histories are finding themselves turned away by mortgage lenders," says Clark. The stringency of lenders is leaving renting the only option for many families who can either not qualify for a traditional loan, or would get struck paying astronomical interest rates.

And, many rental markets are hot for investors. With falling housing prices, investors have the option of scooping up discounted properties and renting out the home until the market picks up again and investors can then sell for a hefty profit.  

According to Forbes.com, the following are the best markets for renters:

1. Atlanta
2. Denver
3. Phoenix
4. Las Vegas
5. Tampa
6. Houston
7. Cincinnati
8. Indianapolis
9. Sacramento
10. Dallas

(Posted by K.Skowronski)

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Clearly, the best way to make money in real estate is to

In today's market, the housing crisis has left a flood of available inventory at incredibly low-bargain prices. It has never been a better time for buyers.

According to recent data from the National Association of Realtors, home prices have been declining for more than ten consecutive months. Many homeowners are finding themselves with negative equity on the homes they bought during the housing boom (when it was a seller's market).  And, many sellers are in a must-sell position and may take little or no profit from the sale of their homes.  

Consequently, many markets are sizzling for buyers.  A few of these markets include, but are not limited to, Florida, Utah, Arizona, New York City, and California. In some instances, you can purchase a house for more than 10% below the asking price!  

Of course, whenever there is a surplus of inventory, prices drop and sellers work overtime to attract buyers, especially by adding incentives. And, sellers are trying anything to entice buyers, including additional upgrades, paying for closing costs, and even adding vacation incentives. Things have gone berserk," says Dan Updike of the N.A.R. "Buyers should capitalize on this advantageous market," Updike continues.

Now, let's review. There is a plethora of housing inventory to choose from.  Sales are extremely slow, prices are declining, and sellers are offering incredible incentives. Because markets are beginning to bottom out from the market's historic downturn, great deals are plentiful and ripe for the picking. Smart buyers would do well to get off the fence and snatch up prime real estate at unheard of discounts.

Here's a bit of insider information: Butterflylister.com has these amazing deals you're looking for. Check it out.

(Posted by K.Skowronski)

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In

In cities like Charlotte, Seattle, Atlanta, Houston, and Dallas, the bottom of the market has already hit and they continue to post price gains despite nationwide troubles. These cities boast quality, affordable markets that have excellent job, economic, and population growth.

However, in major metro areas like New York City, Philadelphia, and Washington D.C., economic conditions and housing inventories in these cities suggest they are hitting price troughs and are perfectly ripe for investments.

Then there are markets like Denver and Detroit, which are expected to recover more slowly due to sluggish economic growth and a gross surplus of inventory.

It is important to understand that real estate is a highly localized industry. While nationwide, the collective market is in a recession, there are still local markets that defy the trend.

Here are several indicators of a recovering housing market:

• Falling Inventory- this is basic rules of supply and demand... if demand decreases, supply must also decrease to keep home prices steady.
• Increasing Sales- in order to have falling inventory levels, there must be an increase in sales of new and existing homes to keep a market in balance.
• Decreasing Number of Days on the Market- the average numbers of days for-sale homes sit on the market before being sold is a good indicator of a market's health. Less time on the market equals a stronger market.
• Fewer Foreclosures and Short Sales- foreclosures and short sales bring down property values in their surrounding neighborhoods... the less there are, the better.
• The Return of Investors- professional investors will go out and find good investments, even if a market hasn't "officially" bottomed out, they know where to find the good deals.

(Posted by K.Skowronski)

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Fears over increasing loan defaults and a loss of consumer confidence caused

The two government-backed mortgage lenders suffered their biggest losses in more than 15 years, as investors scrambled to dump shares and bonds as a result of exponential increases in mortgage defaults over the last several months.

At one point yesterday, the Wall Street Journal reports Freddie Mac losing nearly 30% of its value.

And, while the decline in Fannie and Freddie's stocks were sharp, the biggest impact will be felt within the mortgage market. If the companies fail to meet their capital, it will be extremely difficult for Fannie Mae or Freddie Mac to buy and guarantee mortgages.

As a result, borrowing cost to homebuyers would likely increase which would more than likely further drive down home prices. Because Fannie Mae and Freddie Mac are the two largest lenders and backers of mortgages, the health of the housing market is crucially linked to these two companies.

Fannie Mae and Freddie Mac are chartered by Congress to keep the U.S.'s mortgage market stable, liquid, and affordable in all economic conditions.

Freddie Mac has financed more than 50 million homes, or 1 in 6 homebuyers and more than 4 million renters. The company financed more than 3 million homes in 2007 alone.

Fannie Mae is the leading market-maker in the secondary mortgage market, which helps replenish the supply of lendable money for mortgages by ensuring that money continues to be available for new home purchases.

Together, these companies own or guarantee more than $5 trillion of home mortgages, which is almost half of all home loans. With the companies suffering from more than $11 billion in loses since the 4^th quarter of 2007, investors and politicians are growing extremely nervous about the companies' and the mortgage market's future, especially as loan defaults are expected to continually increase over the next few months.

Fannie Mae shares were down by nearly 17% yesterday (-$3.04) to $15.75 a share. Meanwhile, Freddie Mac's shares were down nearly 18% (-$2.60) to $11.90 a share. This marks the lowest close for both companies since the early 90's. Over the past year, Freddie Mac has lost 80% of its value. Similarly, Fannie Mae has lost more than 75% of its value.

While the situation looks bleak, both Congress and the White House will certainly keep pumping money into mortgages, as the health of these companies are synonomous with the health of the housing market.

According to the data, median home prices dropped to $196,300 in the first quarter of 2008. This is down almost 5% when compared to October, November, and December of last year.

One reason for the decline in housing prices is the slowdown of sales of higher priced houses as a result of very few jumbo loan originations.

For example, in California during 2007, jumbo loans (loans over $417,000) accounted for 40% of the homes sold.  In 2008, only 10% of home loans made in California were jumbo loans. This reflects the slow home sales in higher priced areas.

However, in February, the government changed the cap on jumbo loans from $417,000 to $729,000.  These so called "jumbo conforming loans" are backed by the government enterprise giants Fannie Mae and Freddie Mac.

But despite the new standards, rates on these types of loans continue to increase by as much as 1-2% above average mortgage rates. As a result of the higher rates, buyers are being discouraged from purchasing higher priced homes.

Also impacting the data is the surge of foreclosures across the nation and in the hardest hit areas like California, Florida, Las Vegas, and Rust Belt region.

While some areas threaten to get worse, other markets are beginning to see some buyers come down from the fence and purchase heavily discounted properties.

(Posted by K.Skowronski)

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First, there are a few things to consider.  Ask yourself the following questions before diving into your first project:

• Are you going to be able to sell the home in the current state of the market?
• Are you financially able to afford mortgage payments and taxes if your home does not sell?
• What price can you expect considering the improvements you will be making?
• Are you ready to put a considerable amount of time and money into your investment?

If you answered no to any of these questions, get out now.  Flipping can be a roller-coaster ride, and if you are not ready for the personal and financial commitment, I recommend you move on and find another way to invest.

With all that said, flipping real-estate can still be a profitable and fulfilling business. Here are some professional tips to help get you started:

1. Do Your Research- I cannot stress enough the importance of research. Before you dive into any project, first spend some time getting as much information about flipping as you can. Talk to your local real-estate agent and learn about the current state of the market. Explore all search possibilities for the perfect home to flip, such as realtor services, classified ads, websites, auctions, and bank foreclosures to find the best deal out there. Look for a home that needs only cosmetic repairs. Consult with a home inspector BEFORE purchasing the home to make sure the home is structurally sound and will not need any costly maintenance.
2. Be Prepared to Work- Plan to devote a large chunk of your time and resources for best results. Be present to monitor and supervise the work. It is also a good idea to document your project with pictures and organized records of repairs, contracts, building permits, vendors, specifications and paint colors. Do whatever you can yourself to save money, i.e. painting.
3. Form a Professional Team- You should form a professional team to assist you in all areas of the flip. Some important people to have on your team include a real-estate agent, mortgage broker, home insurance agent, attorney, and a contractor you can trust.
4. Know What Sells- Improvements to certain areas of the home can really boost your profit. Focus on updating kitchens, bathrooms, flooring, and landscaping to make an impression on your potential buyers. For kitchens, it's all about cabinets, granite countertops, and new appliances. For bathrooms: tile and a clean layout and design. Adding wood or tile flooring throughout the home can substantially increase its value. You can also enhance your home's curb appeal with some elegant landscaping.
5. Know Your Numbers- Be sure to know ALL the cost associated with flipping. These Include:

• Purchase costs- upfront mortgage fees, attorney's fees, regular closings fees, title, survey, etc.
• Carrying costs- it's more than just the repairs! When you're flipping real estate, you're likely paying higher interest rates than on a primary residence or second home. In addition to the repairs, you have to consider monthly payments, taxes, insurance, utilities, etc.
• Selling costs- again, you have to consider closing costs and possibly real estate commissions.

     6.   Expect the Unexpected- regardless of whether this is your first or fiftieth flip, you will run across something that you didn't expect. You'll almost always run at least a little over budget or hold it a little longer than you anticipated. Stay patient and stay with it.

(Posted by K.Skowronski)

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• Low-E Window Films- Another very simple way to save on energy bills is to install low emissions window film. When the film is applied one way, it keeps solar radiation out of the home, keeping it cooler during summer months. When applied the other way, the film holds radiation inside, keeping it warmer during the winter months. This is a great DIY project since the films are easy to apply and can save you potentially 60% of the heat lost through windows.
• Detox Paint- Up until just recently, many paints contained highly toxic volatile organic compounds, or VOCs. The risk associated with this paint is that it can emit hazardous gases into the air and potentially cause adverse health effects. Not a great thing, especially if you have children. Many people are becoming increasingly aware of VOC paint and do not want them their homes. Applying non-toxic paint to your walls can also be a great selling point to a potential buyer with children.
• Green Water Heater- Did you know that hot water accounts for up to 14% of your typical utility bill? There are two very simple ways to potentially save energy, lower bills, and save the environment. 

                o Wrap your hot water heater with a layer of insulation. For a nominal cost of $15 you can reduce heat loss through the walls of the tank by up to 40%.

                o Reduce the temperature of the thermostat to 120 degrees. Doing this can save you 10% or next bill.

• Green Your Lights- This one is just common sense. Switch your old light bulbs with new compact fluorescent bulbs. Though the compact fluorescent bulbs do cost a little more than conventional bulbs, it will pay for itself in just a few months. Not only will these bulbs save you money, they will prevent 450 pounds of power-plant emissions being released into the atmosphere over the bulbs lifetime.
• Energy Efficient Mortgage- In 1979, President Carter signed an executive order directing federally-sponsored secondary market institutions to offer consumers incentives for energy-efficient homes. Energy Efficient Mortgages allow homeowners to use their commitment to the environment to leverage bigger loans for both. To qualify, you'll need to provide a Home Energy Rating System report. HERS reports indicate that your house meets all energy efficiency guidelines.
• Green Washing Machine- Ideally, replacing your machine with a front loading, Energy Star label washer can use 50% less water and save you $120 a year. However, if you cannot afford to buy a whole new machine simply using cold water and waiting until you have a full load every time can save you a lot of energy and potentially a lot of green.
• Unplug!- Did you know that even if you turn off a device, leaving it plugged in will still drain electricity? A television can draw in 12 watts even after you've turned it off! That means when you're done with the coffee pot, hair dryer, microwave, etc. just pull the plug and start saving money! Try plugging in your electronics to a power strip; when you're done, just switch it off.

(Posted by K.Skowronski)

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If you've ever had a business

I once had to wait over five months on a home without a furnace because the bank wasn't sure if they wanted to lend me money on the type of house I was rehabbing. The bank just didn't understand that you buy them ugly and cheap, then fix them up and sell them for a profit.

If only I would have used a private lender on the deal. By the time the bank got around to closing, I could have had the home fixed and sold if I'd of used a private lender.

The beauty of using private lenders, sometimes called hard money lenders, is that I have the finances I need, when I need them. There is no time lost waiting around for the bank to evaluate every aspect of my loan and dissect why they shouldn't give me the money.

This way, when a great opportunity comes my way, I can snatch up the deal before my competitors because the money is there for me and I don't have to scramble around for bank applications. Then my crew can swoop in and rehab the property before anyone else can get a loan from the bank. That is the beauty of have private lenders.  

Another reason having private lenders is so beneficial is because of the flexibility you can have with loan terms. When I started using private lenders more frequently for my real estate investments, I learned that some of my lenders were willing to be flexible when it came to loan terms and payments.
 
The benefit is HUGE. Imagine that instead of monthly payments, you structure a loan so that you repay when the property is sold. As a result, cash flow is improved.

Clearly, the benefits of having private lenders is pretty remarkable. Not only do you not have to wait around for a bank loan (if you can even get one nowadays), private lenders are often flexible with loan terms and can improve your cash flow.  

(Posted by K.Skowronski)

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Currently, the collective national real-estate market is bitterly cold now that the housing bubble has burst.  But does this mean it is a bad to time to invest in real-estate? 

Absolutely not.  While collectively, the national market may be slow, real-estate is different in each individual market. 

Therefore, while it may be a bad idea to invest in an area like Cleveland, where the housing market is freefalling due to a wave of foreclosures. Meanwhile, markets in North Carolina and New York City are still appreciating and warrant consideration for investment . 

Yet even in a slow market, there are still ways to invest in real-estate and make money.  For instance, you can buy foreclosed and real-estate owned (REO) properties at auction for bargain prices.  Then, instead of fixing up and selling, you can rent the property out. 

This way you can retain the equity on the home while the renter pays for your mortgage.  Once the mortgage has been paid off, or when you decide sell the property once the market picks up, you've essentially made a good investment with minimum money spent. 

It should be noted that when a market is slow, this is usually the best time to invest.  In cold markets, inventory is high and demand is low.  Therefore, you can shop around to find a great bargain price. 

Conversely, in a hot market, inventory is low and demand is high, which drives up prices.  As a result, buying in a cooling market is the best way to find a good deal.

(written by: K.Skowronski)

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The Ball is in the Buyer's Court in Today's Real Estate Market

According data collected by the National Association of Realtors (NAR), the number of existing homes sold during the month of May increased 2% from April's numbers. In April, the adjustable annual rate for existing home sales was 4.89 million units. That number rose to 4.99 million units in May.

Despite the increase, the sale of existing homes is still 16% below May 2007's rate of 5.93 million units. However, the 2% increase from April to May 2008 could signify that the market is finally beginning to stabilize from the mortgage crisis that has wrecked havoc on the real-estate market that has pushed millions of homeowners into default and foreclosure.

The increase in existing home sales also signifies that homebuyers are beginning to get off the fence. Home prices have been falling over the last year and many homebuyers have been waiting for the market to bottom out before purchasing. The increase in sales also reflects the beginning of the summer real-estate season, typically the period with the most home sales.

As buyers begin to come down from the fence and start buying the market's overload of inventory, a stabilization of home prices will begin to occur. However, it is important to note that the data lags interest rate cycles and may not represent the actual current state of the market.

(Posted by K.Skowronski)

Investors and landlords may be surprised to hear that vacancy rates of rental properties are at all time lows.  What's more, asking rental rates are near all time highs. And, with increases in demand for apartments and rental houses, it is the perfect time for some rental property investments.

"Rental housing is simply more attractive than for-sale housing for a lot of people at the moment. If they're waiting for a really great deal to come along before buying, they may be figuring that it's best to just rent in the mean time," says Abigail Johnson, supervisor of the National Housing Division.

The numbers concur with William's statement, as the median asking rents were $1,052 for rental units completed during the third quarter of 2007, breaking the previous high of $1,025. This strongly suggests a general overall improvement in the rental market.

Meanwhile, regional markets, including the Northeast, the West, and the Midwest have the highest median asking rents. The reported median asking rents in each region are at more than $1,150. While these rent prices are typical in places like the West and the Northeast, it is the first time rents levels have reached these levels in the Midwest.

And not surprisingly, asking rent prices for existing apartments also have steadily improved and are either at or near all-time record highs, thereby signifying that the rental market is stronger then ever and a great time to capitalize on the mortgage crisis.

As it is getting hard to get new mortgages due to stricter lending standards based on the surge of defaults and foreclosures, there is another way for homebuyers to buy a home with lease purchases. There are number of websites offering lease purchase agreements that require no new loans.  Check out ButterflyLister.com, a highly reputable website of seasoned real-estate investors that can help homebuyers get into a home without a traditional mortgage.

(Posted by: K. Skowronski) 

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The answer is alternative financing methods. Alternative financing is any type of loan or financing option that is not a conventional bank loan.  I think everyone has become familiar with subprime loans and adjustable rate mortgages with the crisis that has been plaguing the housing market. But what many homebuyers might not know is that there are other creative financing methods they can use without having to obtain risky subprime or adjustable rate mortgages.

The alternative financing method I want to discuss is called Seller Financing. Seller financing is a loan in which the buyer assumes the seller's mortgage while the loan stays in the seller's name.  In other words, the owner or seller of the home leaves their existing loan in place and the buyer simply takes over the payments, often times with extra interest payments tact on. The buyer becomes the owner of the property when the seller signs the grant bargain, sale deed, or other specific device to transfer the property. In most cases, the buyer gives the seller a down payment and then continues to pay the seller interest each month.

This growing practice and is also known as:

• Owner Financing
• Seller Second Mortgage
• Seller Carryback Financing
• Subject-to loans

Often times, sellers can offer No Qualifying Loans to their buyers in order to make their property more attractive for sale.  While selling a home with No Qualifying does reduce the stringency of traditional loans, it does not necessarily mean the buyer has bad credit.  A lot of the time, lenders require two years of residency before giving out a loan. No matter what the buyer's credit status, you should get about a 10% down payment on the house. You can also raise the interest rate to add additional income to your pocket every month.  The potential profits on this kind of investment can be phenomenal. 

Also, let's not forget that the seller can use owner financing to his or her advantage when advertising the property. Sellers can use this to grab buyer's attention, especially in cold markets where financing is hard to come by.

And, as always with any real estate investment venture, there are risks.  However, by using an adequate investment structure, you should not have any problems.  Many people like to use loan servicing companies to collect buyer's payments and to disperse the funds accordingly to the ‘lenders'.  By doing this, the seller will not have to worry about missed payments and their credit score being affected. 

It may also a good idea to set up a trust account with the loan servicing company (usually with the money received from the down payment), just in case the buyer misses or is late with a payment, you will be covered. There are many other ways to protect yourself and reduce unnecessary risks associated with seller financing. That is why it's a good idea to go through investors with seller financing experience. For instance, Butterflylister.com is a group of investors specializing in this type of financing.

Hopefully you have learned a little bit more about alternative financing methods. You can find more information at http://www.butterflylister.com/About-Us.htm or http://www.butterflylister.com/About-Us/Real-Estate-Blog.htm.

(Posted by K.Skowronski)

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According the

California's filing comes on the same day Illinois files suit against Countrywide Financial for "unfair and deceptive" business practices. 

The complaint was filed with California's Superior Court by California Attorney General Jerry Brown. In the suit, the state claims: "Defendants viewed borrowers as nothing more than the means for producing more loans, originating loans with little or no regard to borrowers' long-term ability to afford them and to sustain homeownership." The lawsuit also alleges that the company misled borrowers into adjustable rate mortgages, home equity loans, and pay-option loans.

During the housing boom, these types of loans were prevalent among borrowers.  Adjustable rate mortgages offer a low introductory interest rate for a short period of time, followed by a dramatic increase in payments. Countrywide Financial is responsible for a large portion of these loans going into delinquency or default and pushing the housing industry into a crisis.

Countrywide Financial Corp. is the largest mortgage lender in the United States. Besides California and Illinois's lawsuits, Countrywide is also facing numerous other lawsuits and intense federal scrutiny.  Countrywide shareholders are also expected to vote in favor of a takeover by Bank of America Corp. within the next few days.

(Posted by K.Skowronski)

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Here's a dose of positive news for the widely troubled real estate market: Foreign investments in U.S. in both

With the Euro exchange rate hitting a record high on April 22 ($1.62), it's no wonder that foreign investments in U.S. commercial and residential real estate has increased. The attractiveness of the weak dollar has led to an influx of foreign investors that are bargain hunting for hotels, apartments, homes, offices, and warehouses.

Thankfully, a flood of foreign investments in U.S. property does have a list of benefits. The first being that foreign investing helps to create new jobs, either by direct investing in business or real estate, or by providing cheaper forms of funding for domestic businesses to reinvest. 

Foreign real estate investments also play an important role in keeping mortgage rates low. While these foreign investments helped fuel the housing boom over the last few years, there is still an ample amount of funds to help lower mortgage interest rates. This, in turn, helps to encourage domestic investing and make real estate properties more appealing to investors.

Because of its openness, size, and variety of investment options, the United States real estate market is increasingly attracting foreign investors. The weak dollar, softened economy, and troubled real estate market is causing an influx of foreign investments both commercially and residentially.

Despite the plague of negative headlines outlining the real estate market, this tidbit of news may be the industry's silver lining. Our fingers are crossed.  

(Posted by K.Skowronski)

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Often times, the basic home improvements, like paint and carpet, can cost you thousands of dollars alone. But, you should know that there are some very simple and cheap ways to improve a home. The following is a list of 5 things you can do to improve your rental home that are inexpensive and easy-to-do:

Paint kitchen cabinets

If your kitchen cabinets weren't fabricated in the last decade, chances are they are desperate for a makeover. But replacing cabinets can be really expensive, so instead, just paint them. Use a semi-gloss paint and don't even bother with the insides.

Replace Shower Curtain

I never could understand why rental owners don't replace shower curtains and liners. It's such an easy and cheap way to make a bathroom look cleaner and newer. Just go to any large discount chain and you can find a nice curtain for $30. While you're at it, replace the curtain rod as well (less than $20 at Home Depot).

Replace Switch Plates

Did you know that switch plates only cost about 50 cents a piece to replace? Such a minute detail like electrical switch plates often get overlooked when renovating. But such a simple thing can make a big difference with the aesthetics of a home. Most landlords never replace the switch plates and even worse, some paint right over them. I'm telling you, don't overlook this, installing new ones will make a big difference.

New Doors

Doors are another cheap and easy improvement that goes overlooked. New replacement doors can be as cheap as $20 a piece for the basic hollow-core door. A new front door is also a good idea, if you can afford to spend a few hundred dollars. If not, you can always paint the existing door to look fresh again.

Replace or Paint Trim

If your home already has trim, consider giving it a fresh coat of bright white paint. If your trim is old and ragged looking, consider replacing it. Trim and molding is only 50 cents per sq. ft. Molding and trim will dramatically improve the appearance of the rooms in your home.

(Posted by K.Skowronski)

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With the current slump in the housing market and interest rates teetering around lower rates, the market has never been a better time for buyers, especially first time buyers. According to a recent AP article states that U.S. home prices have fallen across the nation for the eight consecutive months. And many sellers are in a must-sell position since they've lost so much equity or fallen so far behind in mortgage payments and may take little or no profit from the sale of their homes.  As a result, many markets are highly conducive for buyers to find great deals.  Some of these markets include Florida, Utah, Arizona, and the D.C area.  In some cases you can by a house for 5 to 10 percent below the asking price.  According to economist Mark Zandi, "We are half way done in terms of price decline.  Prices are down about 4% and I expect another 4% to 6% drop-off.  Home prices in early 2008 will be back to where they were in 2005." 

Whenever there is a surplus of homes, and prices begin to drop, sellers will work harder to attract buyers, including added incentives.  "Incentives are all over the place," says Salli Kirkpatrick, founder of SK Associates. "No closing costs, no payments for six months, $10,000 toward a built-in swimming pool. Things have gone berserk," he added. There has never been such a wide range of incentives available to a buyer.  Buyers should take advantage.

Ok, so let's review.  There is plenty of housing inventories to choose from.  Sales are slow, prices are falling, some sellers are offering incentives, and interest rates are historically low. Sounds to me like a great time for buyers to get into action and make some great deals.

For more information visit: http://www.butterflylister.com/About-Us/Contact-Us.htm.

(Posted by: K.Skowronski)

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With the fallout of the mortgage crisis and the steadily cooling real estate market, inventory levels have risen to record levels. As a result, the market has shifted to a buyer's market. This has also allowed artificially inflated home prices to deflate to normal price levels.

For first time homebuyers, this is the sign that it is a great time to buy.  First time buyers have the advantages of wide inventories to choose from, lower home prices, and sellers who are desperate to unload their properties (often at discounted prices with fantastic incentives). 

However, there are a few roadblocks getting in the way of first time homebuyers.  For instance, lending standards have gotten significantly tighter since the influx of foreclosures and defaults.  If a first time buyer doesn't have stellar credit, it may be very difficult to obtain a conventional mortgage.

One option to detour this problem would be to find a seller offering owner financing.  Owner financing, also called seller financing and subject-to financing, is essentially when the buyer assumes the seller's existing mortgage, where the buyer typically puts some money down and then continues to make monthly payments on the home until they find a standard mortgage. Try websites like Butterflylister.com to find properties being sold with the owner financing option. 

Lastly, there is always the fear that home prices will continue to drop. Buyers sometimes will try holding out until prices reach their lowest point. However, these buyers often miss out on great opportunities because they think prices will go lower. And, if you plan on owning the home long-term, price appreciation over the next few decades will make holding out for lower prices pointless.

As a result, my advice to first time homebuyers is to jump into the market, the conditions are right and you may find yourselves a fantastic deal. 

(Posted by: K.Skowronski)

Of course, you are allowed to decorate your home however you want, but you should know that once you are selling your home you have to keep in mind what buyers are looking for, not what your decorating taste may be.  When you stage your home to sell, it is impossible to satisfy everyone's tastes so it is a good idea to play it safe by keeping it simple and generic.  A tidy home with conventional colors will move faster for when selling, renting, or leasing than an empty or overly decorated home.

"Its all about staging your home to make it look bigger, brighter, cleaner, warmer, more loving," say professional staging expert Kathy Cubanio.  The plan is to encourage your potential buyer/s to imagine being settled into your home.  Therefore, you should keep everything neutral and generic so your buyers can envision the details and personal touches for themselves.

Advice and Strategies

To do this, start by purging your home of distracting personal décor, photos, and/or personal items.  Decorate and paint with neutral colors and avoid trendy, over the top accessories and décor.  The trick is to create scenery that appeals to all five senses.  Use soft inviting fabrics, like silk, chenille, or fleece.  Display knickknacks and chotchskies in units of 1, 3, and 5 to keep things symmetrical and pleasing to the eye.  Use inviting scented candles or oils like cinnamon and vanilla to gently scent the air.  And leaving out a tray of homemade cookies or delicious finger foods may not be a bad idea either.  It may sound crazy, but what person isn't enticed by fresh baked goods and free food?

Professional Tips

Professional stagers often use a variety of accessories to dress up a vacant or empty home.  These are simple, safe, and generic elements that can add a homey feel without going over the top, for instance, mirrors, plants, silk flowers, throw rugs, inflatable beds, love seats, ottomans, and desk/floor lamps.  

The kitchen is most often the selling point of a home, because it is essentially the heart of the home.  Try giving your kitchen a colorful, culinary feel, by putting a large bowl filled with colorful fruits like apples, oranges, and lemons.  Keep countertops spotless and free of clutter (put away any unnecessary appliances).  For an added touch, try setting the table with your nice china and flatware.  Also, if the cabinets look dry and dull try wiping them with orange oil to renew them to their original luster.

Bathrooms are also essential to staging as well.  They should appear clean and uncluttered.  Clear away all your usual toiletries, toothbrushes, etc.  Wipe down faucets and countertops until they are shiny and spotless.  A good staging trick is to fill a basket with spa items like bath salts, lotions, scented soaps, and pretty hand towels. 

Don't neglect the backyard either.  Try setting up a simple patio table and chairs with some potted plants and flowers to add some color to the property.  Also, keep the lawn mowed and hedges trimmed (even if the home is vacant, as unkempt lawns lower property value).

Staging a home to sell is easy if you keep it simple, neutral, and safe.  But when in doubt you can hire a professional home stager to set up your home.  Their services can run anywhere from $500 to $5000 or more depending on the size of your home and how intricate you are looking to get.

#1. How much home can you afford?

A. Whether you are buying a first home, or any home for that matter, it is normal to get carried away with excessively nice homes that are beyond your budget. It is important to stay reasonable and within your price range.  If you don't know how much you can afford with your current income, try MSN's Home Affordability Calculator to get a good idea of how much home and monthly payments you can handle. Always buy a house with a monthly mortgage payment you can afford to avoid the pain many homeowners are feeling nowadays.

#2. What is your credit score?

A. Before you even begin your search for a new home, it is check your credit report and review it for accuracies.  Make sure you dispute any discrepancies and raise your score by paying off some items and increase your chances at a better interest rate.   (Note: start by paying off the smallest balances first.) Also, make sure you pay all your bills on time each month to avoid paying higher interests rates.

#3. Have you done any research?

A. Another crucial step in the home buying process is to research various loan programs, the local real estate market, and several different mortgage lenders in order to find the best deal.  Be sure you understand everything about loan terms and other real estate jargon and get good advice from someone who is well-informed and trustworthy.  I've seen a lot of people get sucked into adjustable rate mortgages without completely understanding the terms and the fact that their rates will increase substantially after the short-lived introductory period is over. As a result, make sure you do your research and know exactly what you're getting into before getting into any transaction.

#4. Are you house searching sensibly?

A. Please don't get crazy about the aesthetics and details of your home, especially if you're a first-time homebuyer. Instead, look for the aspects that may affect your property's value and future benefits. Be sure you're looking out for the long-term if you plan living in your home for the next decade or so. You should be interested in future market values of your prospective home and also the potential upgrades you can make in the future.  Pay close attention to the quality of the neighborhood and its future, including school districts, local tax rates, and flood zones. 

#5. Are there benefits of owning the home?

A. Obviously the benefits of purchasing a home vs. renting are significant.  Bottom line is: renting wastes your money, while owning makes money and helps to minimize your taxes. Consider this point: when you rent, you help pay someone else's mortgage and get no claim to ownership.  Meanwhile, monthly payments on a mortgage gets you closer to owning the home outright. Whatsmore, the appreciation and equity in your home can earn you a nice profit when it comes time to sell your property.  Next, homeownership helps to build your financial credibility.  And furthermore, homeownership fosters better neighborhoods because homeowners are concerned for their neighborhood as it directly affects their property's value.  And lastly, buying a home is essentially, the American dream of everyone that lives in this county.

(Posted by: K. Skowronski)

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1.) Boston- While CNN believes the Boston metro area to be #2 on the best cities to invest list, I am cautious to agree with this one.  Yes, Boston was hit with the real-estate downturn of the recent housing crisis, and according to Boston realtor David Gordon, "Sales for the month of February, were: 38 Single Family homes, median price $371k, average price $509k ranging from $185k to $1.899 million, averaging 126 days on market and selling at 89% of original offer price."  Boston's market is still sluggish, though demand remains relatively steady.  As a result, investors will see this buyers market as a great opportunity to snag up some discounted property.

2.) Atlanta- I absolutely agree with this choice because Georgia, specifically the Atlanta region, has one of the best economic outlooks in the country.  According to a quote from renowned economist Arthur Laffer  to the Atlanta Business Chronicle, "Georgia's economic outlook is rosier than that of any other state in the n