Minnesota Real Estate Investors Association, Inc.

In the 11th inning, the House of Representatives finally passed the closing date extension to September 30th for the first time homebuyer’s $8,000 tax credit. This is good news as an expected 180,000 transaction that were successfully signed and finalized by the April 30th deadline that supposed to close by June 30th, didn’t close.

There are many reasons why these transactions are taking so long, but the primary reason is because the most of those transactions are short sales and getting to the closing table with short sales can be a headache to say the least. But now they have an additional 90 days to rap them up and close by September 30th. 
Read More...

Many Real Estate Investors start out rehabbing properties to resell for a profit. Many of these investors eventually migrate to wholesaling or become landlords, but some become experts and just keep on rehabbing. Most rehabbers build a system and once they have it fine tuned, don’t deviate from that system. If they build a system rehabbing rental properties for landlords or for first time home buyers, then that is what they always do, because it works for them.

However, a few rehabbers make the leap from rehabbing properties in low to middle income neighborhoods to rehabbing properties in upper middle class to affluent neighborhoods. But very few move beyond that and take the step to rehabbing extremely expensive houses. And even fewer are true visionaries.

A close friend of mine, which many of you already know, Robyn Thompson, the Queen of Rehabs started out rehabbing multi-families in firs time home buyer neighborhoods in Connecticut. She then took a huge leap in faith in herself and her abilities and now rehabs multi-million dollar mansions in Florida. That is something that I hear a lot of people say is too big of a rehab, and to those people I say, you are just not thinking big enough. 
Read More...

Look at the drop starting on May 1st. This graph should be all you need to realize that the first time home buyers tax credit drove a lot of sales at the moment, but they would be sales that were pulled forward. In other words, if the tax credit wasn’t there, the sales would probably still have happened, but they would have been spread out over time rather than pushed back into April.

First of all, the banks are short staffed, so they can’t file NOD (Notice of Defaults) and complete the foreclosure process as fast as new borrowers are falling into default. The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics. That is the first part to Shadow Inventory.

Click To Enlarge

This has also created other problems. I had a closing that kept getting pushed back because FHA hadn’t review the file to release the funds because they were so backed up. We finally closed last week and from talking to the buyers at the closing, they just wanted to close before they lost the credit, but it wouldn’t have stopped them from buying, they just bought now rather then this summer when they originally planned on moving.

You may have heard this term thrown around lately, but what the heck is it? Shadow Inventory is basically inventory that hasn’t made it to the market yet. There are several components to Shadow Inventory.

First of all, the banks are short staffed, so they can’t file NOD (Notice of Defaults) and complete the foreclosure process as fast as new borrowers are falling into default. The average borrower in foreclosure has been delinquent for 438 days before actually being evicted, up from 251 days in January 2008, according to LPS Applied Analytics. That is the first part to “Shadow Inventory”.

Secondly, a lot of lenders that are taking properties back through the foreclosure process are supposedly holding on to them through holding companies and not releasing them to the market. Their reasoning is actually a valid one. They are afraid that if they release too much inventory to soon, housing values could plummet. And I agree with that assumption, but I am one who prefers to rip the band aid off quickly.

I have heard and read, but n
Read More...

According to the EPA: “Common renovation activities like sanding, cutting, and demolition can create hazardous lead, dust, and chips by disturbing lead-based paint, which can be harmful to adults and children.” Just in case you were stuck in the stone age, the EPA thought we needed to be reminded of this fact.

EPA:
-----------------------------------
To protect against this risk, on April 22, 2008, EPA issued a rule requiring the use of lead-safe practices and other actions aimed at preventing lead poisoning. Under the rule, beginning in April 2010, “contractors performing renovation, repair, and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and must follow specific work practices to prevent lead contamination.”

After April 22, 2010, property owners who perform these projects in pre-1978 rental housing or space rented by child-care facilities must be certified and follow the lead-safe work practices required by EPA's Renovation, Repair and Remodeling rule. To become certified, property owners must submit an application for firm certification and fee payment to the EPA. The EPA began processing applications on October 22, 2009. Afterwards, the agency will have up to 90 days after receiving a complete request for certification to approve or disapprove the application.
Read More...

Only mere hours ago we all saw live the Dow drop near 1,000 points in a startling amount of time. As I’m writing this the market has “recovered” but such volatility will not leave the minds of those who have their savings and IRAs in a stock portfolio that is certainly showing more red than they are accustomed to. To think that such a small country like Greece can trigger such waves because of the liquidity has compromised the integrity of the stock market and the following stories, finger pointing and possible domino effect that may be looming will leave these investors looking for a safe haven.

Suddenly the idea of investing into private money secured by real estate is looking a lot better
Read More...

Obviously it is, but how is it changing and what direction are we headed is the question most people are asking themselves these days. Some of the old school investors/realtors will relate to this article, but for most of you, this will seem like a radical new approach to real estate. You see, the changes I am going to be talking about or nothing more that real estate cycles coming back around full swing.

Over the last ten years or so, all you needed was a pulse and a few months to build appreciation in order to make money in real estate. That has changed drastically, today not only do you need a pulse, you also need a creative thinking brain. However, just having a pulse will not get you a mortgage anymore. In fact, I think the only way to get a mortgage today is to prove that you absolutely don’t need it, and then you have at least a fighting chance to get past underwriting.

Over the past two years, the real estate market has been going through a market correction, because of the over inflation of housing prices. Most of these properties have been either short sales or foreclosed upon by the banks and put back on the market at reduced prices. In many areas, prices have begun to stabilize and the new market values have been established. The first time home buyers tax credit helped boast these sales and stabilize prices. However, access to financing is getting harder and interest rates are expected to increase over the next few years. This will help to bring down prices of the surrounding properties over the next few years. 
Read More...

When it comes to all the technology and options that we all now hold at our finger tips, whether we know it or not, it’s important to recognize that because tools exist it’s not a reason to use them! There is a lot of buzz going, especially in a relatively new internet environment, that suggests that your business NEEDS to implement these tools. This message has its pro’s and con’s because it exposes people to new tools, but sends a message that they must be used. Such a message can really overwhelm and confuse investors who are just trying to get a grasp of the tools available. The confusion stems from one undeniable truth.

“Tools are meant to serve a purpose, not the other way around!”

We’ve been working hard to get the message out that it is incredibly essential to get a website (preferably one of ours because they are specifically made for investors with years of experience behind them), but when we pull you into the internet age we are bringing you into a whole Home Depot of tools.
Read More...

This blog post is a little bit of a spring cleaning exercise that is meant to cover some of the professional matters of real estate investing. Together we are going to be covering some points that you will want to keep in mind as you absorb 1,000s of facebook updates, in addition to the average number of marketing contacts that you encounter on a daily basis. There are 3 things that I want to make as clear as day for you that I see mucking up YOUR path to becoming a successful real estate investor:

1. The dream of getting rich quick
2. The hype that takes advantage of that dream
3. Your very own view of your business

The dream of becoming wealthy and successful is something that we can all relate to, but where do we draw the line in the sand between that dream and reality? If you’re not quite sure what I’m talking about stick with me here… There is no shortage of people online and on facebook right now selling dreams, using big numbers of what students have made, and checks they’ve cashed. However, keep in mind that their success does not translate directly to your success, as many a disclaimer will tell you. This is very important to note because anybody these days can create a system and the fact of the matter is that many of these “gurus” hire freelancers to write their materials and do their marketing.

In my opinion the only value these “gurus” provide is how to hype and sell a dream. 
Read More...

On our Monday night Training Webinar, I was asked a question from one of our students about driving traffic to their free website that everyone receives with their free account at Real Estate Promo. I gave them a suggestion to find another investor who has a property for sale right now and get their permission to market that property(s) on their websites. Then start creating ads on craigslist, kijiji, backpage and other online / offline marketing medias. This sparked a lot of interest and questions, so I decided to post a blog about the idea for everyone.

One of the struggles new investors have is activity. They spend all their time learning how to invest in real estate, but they don’t take a lot of action right away. This is probably due to fear and their misconception that they need to learn everything before they take any action. I am sure a lot of you seasoned investors can relate to this feeling of a newbie. Our Free Weekly Webinar Training is designed to not only to educate the new investors, but also to encourage them to take action, even if it is just small little baby steps to get started.

One of the struggles for seasoned investors is selling/renting their inventory. Personally from my own experience, my biggest struggles is when I have a property for sale, I spend all my time trying to fill the property that I stop doing what I am good at, which is locating and negotiating good deals. After I have that property filled, I then get back to finding more deals. All that time I have been marketing and driving traffic to my website. But if I don’t have any properties for sale on my website for a month or two, I am wasting good traffic from buyers, so I occasionally will market properties from fellow investors, just so that I have activity on my website. 
Read More...