November 11, 2009

First Time Home Buyer Tax Credit Extended - April 2010

On November 6th, President Obama signed legislation which extends the first time home buyer tax credit of $8,000 until April 30th of 2010. Many experts to date feel that the original $8,000 tax credit has had a contributory effect to the stabilization of residential real estate values, especially for property valued under $200,000. In fact, the Case-Schiller Index - one of the most respected real estate indexes has shown four consecutive months of real estate growth.

I believe that this tax credit will help further stabilize the housing market through at least the first half of 2010, especially because of the addition of an existing home owner tax credit. That's right, there is now a tax credit of up to $6,500 for anyone who has lived in their property for 5 consecutive years, out of the last 8 years and makes less than $125,000 (single filers) or $225,000 (joint filers).

Regardless of whether you are applying for the first time home buyer credit or the existing home owner tax credit, binding contracts must be signed by April 30th, 2010 and closed by June 30th, 2010. Also, the law allows you to take the tax credit for either 2009 or 2010.

How To Value Real Estate - James Smith

November 3, 2009

National Manufacturing On The Rise: A sign of economic strength

In a report released on November 2nd by Reuters, manufacturers are reporting an increase in output, as well as an increase in lead time for supplies.

The manufacturing industry is view by economists as a key sector, because ultimately supply starts with the manufacturing industry. When retailers are pessimistic about sales, they cancel orders and manufacturing suffers. When retailers are optimistic about sales, they initiate new orders and manufacturing benefits.

In October, manufacturers reported their 3rd consecutive month of growth in new orders and the highest rate of growth since April 2006. Furthermore, 13 out of 18 manufacturing industries reported growth.

According to industry experts, the growth was initially fueled by the need for retailers to replenish their depleted inventories; however, the more recent growth is merely the result of a increases in consumers' buying patterns.

Although manufacturing is only one sector of the U.S. economy, its recent growth is something to be positive about.

October 23, 2009

9.8% Jump in New Home Sales

Wow, October is really proving to be a monumental month in terms of the stock and real estate markets. In this month, the stock market pierced the 10,000 point mark which is perceived by many to be a sign of potential strength. Also, the real estate market reports were released today which showed that the September sales for existing homes jumped nearly 10%.

This is excellent news because this shows what I have been preaching all along... at the right price point, there is always movement and money to be made. Obviously the bulk of this jump is accounted for by middle and lower-middle class housing markets, whereas the upper end of the market remains soft. It will be interesting to watch what happens to his robust segment of the market once the $8,000 tax credit expires in November, but for now and for the next 6 weeks, I predict that we will have continued growth for housing in the sub - $200,000 price point.

October 9, 2009

When Fear Becomes The Enemy

When Franklin D. Roosevelt addressed the nation during his first inauguration, he looked upon a tired and worn constituency, beaten down by the weight and immensity of the Great Depression. Many of the banks had closed shop, unemployment was astronomical and he knew that the only way he could get the country back on track was by challenging people to over come their number one obstacle, fear.

In his landmark speech, he boldly declared that the “only thing we have to fear, is fear itself!” Even though many decades have passed since FDR spoke those famous words, they remain true – now more than ever.

It is interesting how logic and behavior are so often at odds with one another. When people shop for clothes, they look for sales. When we shop for computers, we want discounts and opportunities to buy directly from the manufacturer. When novice investors buy real estate however, they get excited when prices are on the… rise.

No single person can control the market. Not Greenspan. Not Obama. Not Trump. Like any game, you have to have a strategy to profit from the conditions that are in front of you. Although most investors that are active in the market today haven’t seen a recession like this before, they know that there is enormous opportunity. In fact, some have labeled this as the best buying period of our lifetimes.

Compared to five short years ago, today’s market offers a host of advantages.


  • Adjusted for inflation, housing prices in some metropolitan statistical areas have fallen to back to levels not seen since the 70’s.
  • Investors are able to purchase properties at prices that will immediately cash flow. In the hypermarket, investors often struggled to profitably rent properties unless they put 30% or more down. With prices at record lows and increased competition for rentals due to qualification barriers, new landlords are realizing increased profits.
  • As a facet of the economic stimulus package, the federal and state governments are offering tax credits and other benefits for first time homebuyers. Albeit, investors typically cannot participate in these benefits directly, smart investors are positioning themselves to indirectly benefit by purchasing discount properties directly from banks and are profitably reselling them to first time homebuyers.
  • In today’s market, seller financing has become a staple, especially for the commercial real estate category. When lenders make it hard for buyers to qualify, they are indirectly impeding sellers from being able to sell. This creates a perfect storm for seller financing. Remember the key to seller financing is an effective presentation.
  • Closing costs are always a negotiating point, but in the midst of the hypermarket, it was common for the buyer to pay the closing costs, in order to make their offer stand out. Therefore, even if the buyer had 90% loan to value (LTV ) financing, they still had to come to closing with a fair amount of cash. Current financing is conventionally around 80% LTV; however, sellers are now stepping up and offering to pay all of the closing costs for a potential buyer. This reduces the cash that a buyer needs to bring to closing.
This above list is only a short run-through of the common and obvious benefits of the current market. Less obvious, but enormously powerful strategies include subject-to offers contingent upon loan modifications and the shorting of subordinate financing.

In the end, the only thing that can hold a person back in this market is the fear of getting involved. Fear is a natural part of life, it cannot be avoided and to a small degree, it is a healthy emotion that causes us to double check our facts and figures.

What people have to ask themselves is whether or not they believe that there is money to be made in real estate. If your eyes are open, you will notice that money is being made – it is simply being made by savvy investors these days rather than any person who can qualify for a mortgage. The fact that real estate can be profitable is undeniable and if you didn’t believe this to be the case, you probably wouldn’t be reading this article.

If you answered, “yes” to the question about the potential to earn income from real estate, then the only question left to ask is what difference there is between you and the people who are succeeding in this market. I believe that the great divider between the real estate have’s and have not’s is training and confidence.

There are plenty of people who had all of the money in the world a few years ago and today they are hard stretched to pay monthly expenses. On the other hand, there are countless individuals today that are having trouble with monthly expenses; however, with the right training and support, soon will have all the money in the world.

Remember, your past and present don’t predict the future. If you are looking to discover financial freedom, this is simply the best opportunity to do so in decades… you just need to formulate a game plan based on the trends of the current market.

If you are serious about finally making a difference in your life through real estate, you owe it to yourself to invest in the training and support to get yourself there.

To reach our enrollment advisors at the Accelerate Wealth Team, simply dial (866) 496 – 8006.

October 4, 2009

Fall Housing Market Equals Very Motivated Sellers

I was talking to a few of my students this past week about their thoughts on the cyclical nature of the residential real estate market. Most people know that the Spring and early-Summer often times represent a spike in home sales volume. While this is the time that a significant number of people jump in a buy, I have found that the Fall and Winter months present some of the best buying opportunities around.

The main reason that I look forward to the Fall and Winter is because a lot of the home that are STILL for sale in October, were up for sale in the Spring, but were passed by. Sellers are typically VERY motivated coming into the holidays because they know that buyers are rare in the holiday months. Families don't like to move during the school year, especially during the holidays and homeowners looking to sell the properties are unlikely to get many offers at this time.

Rather than slow up your investing during this cyclical down period, be sure to keep your eyes on the prize and make more offers than you usually would... yours just might be the first one that the homeowner has seen in a long while. Even if they rejected your same offer 6 months ago, a seller may accept it (or less) now that they have lost yet another buying season.

Remember, if you follow the crowd, you are going to get what they have. If you want to get ahead, you have to be willing to put in the effort especially when the buying activity subsides.