November 16, 2009
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.
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.
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.
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.
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.
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- 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.
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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.
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.
September 25, 2009
The James Smith YouTube Channel
I just wanted to let everyone know that I am setting up a channel on YouTube.com that will broadcast dozens of tutorials on topics ranging from real estate, retirement planning and investing in general. My training team has done an incredible job helping me put together the best information available in my seminars and boot camps and now they are helping me build online training as well.
We plan to add a few new tutorials every week so be sure to click on the Gold "Subscribe" button on the YouTube page. The subscription is free and it will automatically load my new videos into your personal YouTube account, each time we upload something new. It won't bombard you with emails or anything of the such - just good information, in a convenient location.
Go ahead and check out my channel!
James' YouTube Channel
www.youtube.com/jamessmithseries
Be sure to comment and leave your feedback! It will help my team continue to enhance the training quality.
We plan to add a few new tutorials every week so be sure to click on the Gold "Subscribe" button on the YouTube page. The subscription is free and it will automatically load my new videos into your personal YouTube account, each time we upload something new. It won't bombard you with emails or anything of the such - just good information, in a convenient location.
Go ahead and check out my channel!
James' YouTube Channel
www.youtube.com/jamessmithseries
Be sure to comment and leave your feedback! It will help my team continue to enhance the training quality.
September 21, 2009
2Q 2009 Housing Price Index: Appreciation by State
The real estate market never ceases to amaze me... perhaps that is one of the reasons that I love investing so much. The Federal Housing Finance Agency release their second quarter report, which provides a break down of appreciation state-by-state.
According to the 2Q FHFA Housing Price Index, the top ten states for appreciation are:
1 - Alaska
2 - Oklahoma
3 - North Dakota
4 - South Dakota
5 - Kentucky
6 - Texas
7 - Missouri
8 - North Carolina
9 - Kansas
10 - Wisconsin
While some people may be inclined to rush to these states and start investing, take a step back and breathe first. If there is one thing the hyper market taught us, it is that appreciation alone does not constitute a sound investment. In fact, I have been spreading this very message for the last 20 years. It's not what you have on paper that makes you secure, its what is coming in each and every month that makes a difference - it cash flow.
Affordability is hovering around a 30 year high and single family homes in many areas are at prices where investors readily rent them for consistent profits. The key to cash flow is being able to find a great property, buy it at the right price and acquire financing that allows you to rent the property for than your mortgage payment. If you are not sure about how to accomplish these steps in fine detail, then be sure to order my home study course. It comes with 8 easy-to-read investor guides, along with audio versions for those of you who prefer to listen to books on tape (CD).
According to the 2Q FHFA Housing Price Index, the top ten states for appreciation are:
1 - Alaska
2 - Oklahoma
3 - North Dakota
4 - South Dakota
5 - Kentucky
6 - Texas
7 - Missouri
8 - North Carolina
9 - Kansas
10 - Wisconsin
While some people may be inclined to rush to these states and start investing, take a step back and breathe first. If there is one thing the hyper market taught us, it is that appreciation alone does not constitute a sound investment. In fact, I have been spreading this very message for the last 20 years. It's not what you have on paper that makes you secure, its what is coming in each and every month that makes a difference - it cash flow.
Affordability is hovering around a 30 year high and single family homes in many areas are at prices where investors readily rent them for consistent profits. The key to cash flow is being able to find a great property, buy it at the right price and acquire financing that allows you to rent the property for than your mortgage payment. If you are not sure about how to accomplish these steps in fine detail, then be sure to order my home study course. It comes with 8 easy-to-read investor guides, along with audio versions for those of you who prefer to listen to books on tape (CD).
September 17, 2009
Condo Investment Heads-Up
In the recent market, few property types have been hit as hard as the condo market. It is my opinion that developers vastly over estimated people’s desire to live in a box… regardless of the maintenance perks. With a large percentage of condos within complexes going into foreclosure, investors need to be extra diligent in their due diligence process.
Due diligence, the process of assessing a property’s value and condition prior to closing, is more complicated today than ever. One additional check that needs to be added to all condo investors’ lists is the need to review the health of a condominium’s respective Home Owner Association (HOA).
HOAs are established to maintain the value of a community by providing property maintenance, rules, and general insurance. The cost to operate HOAs vary considerably and HOA budgets have been severely impacted by the foreclosure wave. When home owners stop paying their mortgages, they usually stop paying their HOA dues as well. When enough residents fall delinquent on their dues, a condo complexes maintenance may suffer or worse… the insurance coverage may lapse from non-payment.
Before investing in a condo, ask for a copy of the HOAs bylaws and ask for an accounting of current and projected dues. Also, ask the head of the HOA for a disclosure of the master insurance policy and if they anticipate any special assessments due to budget shortfalls.
September 11, 2009
Seller Financing: More Relevant Than Ever!
With all of the discussion about the current state of the economy, it surprises me how focused people get on the factors that just aren't in their control. In the news this week, there are articles about a major U.S. job index increasing 6 points in the last 30 days (largest jump in 4 years) and about French and U.S. think tanks stating that the recession is drawing to a probable end.
As you can imagine, I have people come up to me all the time and ask me what I make of the news and the current state of the economy. While the question is a fair one, instead of asking what I think about the economy, ask me about how you can capitalize on the economy. Theory and postulates are good and well, but at the end of the day, you have to take meaningful action in an effort impact your economy.
One of the enormous benefits of this economy is the fact that institutions have been rocked to their core. Non-traditional and mainstream financing is more difficult to attain today than it was a few short years ago. Rather than sit on the sidelines and wait for banks to start lending again, savvy investors are using seller financing more effectively than ever.
If sellers cannot find qualified buyers and buyers cannot qualify, than the most effective solution is for the seller of the property to actually finance the buyer, with the property as collateral. There are dozens of forms of seller financing (i.e. agreement for deed, land contract, wraparounds, seller seconds, installment contract, contract for deed, installment trust deed etc) and trained investors need to learn how to structure a deal that gives the seller security, cash flow and a down payment (if possible). While most properties are purchased via bank financing, seller financing is completely legal. In fact, many deals that involve seller financing utilize escrow, closing companies (closing attorneys and escrow agents in non-title company states) appraisals and inspections.
Prior to the rise of widely available bank loans (circa 1950's) seller financing was one of the most common financing strategies. Like most trends, everything comes full circle. Several years ago, banks financed everything imaginable, today your seller just might also be your bank.
When you are considering a request for seller financing, you need to assess what the owner's need are. Do they need immediate cash? If they have equity and were to receive a large lump sum, how would they reinvest the money (a loan to you might yield a higher rate of return)? If they don't have equity, what is their mortgage rate, term and is there a balloon?
Not every seller who wants to finance you, can actually afford to. As a disclaimer, be sure to consult a legal professional if you ever have questions or are unsure about how to structure a deal. Attorneys, like other professionals are hurting for business and may be willing to discount their rate so that you can receive top-notch advice for a cut rate. To find a qualified real estate attorney, you may want to talk to your local title company. They work with real estate attorneys on a weekly basis and they could give you an idea of who to use.
As you can imagine, I have people come up to me all the time and ask me what I make of the news and the current state of the economy. While the question is a fair one, instead of asking what I think about the economy, ask me about how you can capitalize on the economy. Theory and postulates are good and well, but at the end of the day, you have to take meaningful action in an effort impact your economy.
One of the enormous benefits of this economy is the fact that institutions have been rocked to their core. Non-traditional and mainstream financing is more difficult to attain today than it was a few short years ago. Rather than sit on the sidelines and wait for banks to start lending again, savvy investors are using seller financing more effectively than ever.
If sellers cannot find qualified buyers and buyers cannot qualify, than the most effective solution is for the seller of the property to actually finance the buyer, with the property as collateral. There are dozens of forms of seller financing (i.e. agreement for deed, land contract, wraparounds, seller seconds, installment contract, contract for deed, installment trust deed etc) and trained investors need to learn how to structure a deal that gives the seller security, cash flow and a down payment (if possible). While most properties are purchased via bank financing, seller financing is completely legal. In fact, many deals that involve seller financing utilize escrow, closing companies (closing attorneys and escrow agents in non-title company states) appraisals and inspections.
Prior to the rise of widely available bank loans (circa 1950's) seller financing was one of the most common financing strategies. Like most trends, everything comes full circle. Several years ago, banks financed everything imaginable, today your seller just might also be your bank.
When you are considering a request for seller financing, you need to assess what the owner's need are. Do they need immediate cash? If they have equity and were to receive a large lump sum, how would they reinvest the money (a loan to you might yield a higher rate of return)? If they don't have equity, what is their mortgage rate, term and is there a balloon?
Not every seller who wants to finance you, can actually afford to. As a disclaimer, be sure to consult a legal professional if you ever have questions or are unsure about how to structure a deal. Attorneys, like other professionals are hurting for business and may be willing to discount their rate so that you can receive top-notch advice for a cut rate. To find a qualified real estate attorney, you may want to talk to your local title company. They work with real estate attorneys on a weekly basis and they could give you an idea of who to use.
September 9, 2009
Residential Market Is Showing Strong Signs of Support
Buyers of residential real estate have a little more to smile about in July than they did just a month prior. According to the National Association Realtors, pending home sales increased 3.2% from June to July, continuing an upward trend that has lasted for 6 months.
The index was created in 2001 and the 6 consecutive months of pending sale increases is an index record. Relative to July 2008, pending home sales are up over 12%.
It seems as though the first time home buyer tax credit is having a substantial impact on the middle class, residential home market.
The index was created in 2001 and the 6 consecutive months of pending sale increases is an index record. Relative to July 2008, pending home sales are up over 12%.
It seems as though the first time home buyer tax credit is having a substantial impact on the middle class, residential home market.
Just Getting Started
My name is James Smith and I want to welcome you to my blog. For those of you who know me personally, you are probably shocked that I am finally blogging, but I finally broke down and started this blog so that I can stay in touch with the great people that I meet nationwide.
If you do not know me, allow me to introduce myself. I am a real estate investor, speaker and trainer. I am a featured speaker for Get Motivated and hold several Financial Success Conferences a month. I put a tremendous amount of effort into making the Financial Success Conference a high energy, informative and innovative event.
During the 3 day event, investors learn dozens of advanced strategies about how to build wealth quickly and efficiently. Make no mistake, this is not a “get rich quick” conference. My team and I teach people how to systematically build wealth by through real estate, stock, currency and especially self-directed retirement accounts.
A realization that hit me a while back is that in life you are ultimately taking two risks; either you take the risk of becoming financially independent or you take the risk that someone else’s attempt to do so will employ you long enough for you to retire.
Financial independence starts with a belief – a belief that you are no different from the men and women who grace the pages of Forbes. You have to believe without a doubt that the only obstacle that has held you back is your own lack of knowledge about how to succeed.
If you have this uncommon belief, then I can equip you with the knowledge and tools to succeed. If you do not have this belief, then I hate to say it, but nothing shy of the lottery will give you the independence that you think you want.
In the coming weeks, my team and I are going to build out a library of free downloadable tutorials to help you get started (www.jamessmithseries.com). When you are ready to kick it into over drive, give my company a call and let us train you one-on-one!
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