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When Will Real Estate Values Begin to Appreciate Again?

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This is the $64,000 question that real estate professionals, investors, and mortgage professionals would like to know. The truth is nobody can accurately predict the return of the real estate values market. Like everyone else, I can’t predict the end of this crisis either, but what I can do is tell you what will have to happen to facilitate that change. The answer is quite simple: America must reinvest in herself once again. Without an investment, real estate is as worthless as the Dollar is today.

Real Estate Values Begin to Appreciate
Think back, or read a history book, about how families in the ’40s and ’50s used to buy homes. Young couples lived with Mom and Dad during the “courtship” prior to getting married, until they had saved 20% to put down on their “dream home”. They made an investment in America, (i.e. the American dream). In the years that followed we have devalued that investment in lieu of credit and the easy access to it. Property values rose artificially and our nation became addicted to credit.

The value of the dollar has been demolished due to the same principle. When we place value in assets based on their ability to be easily bought and sold versus the value that has been invested in the asset, we devalue its worth. For example, two years ago I could have bought an $800,000 house (and I assure you that I cannot afford a house that expensive). The owner of that asset (the $800k house) placed value on his asset based on the availability of buyers like me who could buy the home. The problem is, this homeowner probably had less than 5% invested in the home. Where do you think that homeowner is today?

Had he put 20% down on his home, he would then own a valuable asset in which he has a real investment. This outlay of cash forces him to buy and sell his home in the same manner he would move an $800k investment around in the stock market – very carefully. Thus, the home has REAL value. However, having bought the home with little or no money down, the asset became disposable and so follows the real estate market.

So, as I said earlier, I cannot predict when the real estate market will bounce back, but I can tell you what needs to happen before it does. America needs to reinvest in herself by getting back to solid buying and selling principles. This strengthens home values, which encourages investors who employ builders who employ carpenters, painters, real estate agents, loan officers and so on. America was built on the “American Dream” which has turned into the “American Nightmare”; she can only be rebuilt by hard working Americans, not by Wall Street.

Manage Your Holdings for Maximum Income

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When you buy a piece of income real estate, you must go through what is called the contract and closing steps. These two steps are called the passing in some states. Both these steps are easy for three reasons:

  1. Your work is little more than showing up and having your papers ready.
  2. Your attorney and accountant will know exactly what to do and will give you this information.
  3. The average contract signing will take only about one hour of your time. The average closing will take about 1.5 hours. So you will invest about 2.5 hours, during which your attorney will be present to tell you which papers to sign and to explain the various details of the contract signing or closing.

Manage Your Holdings for Maximum IncomeSince the contract and closing stages are so routine in the purchase of income real estate, I am skipping the details here. Also:

  • Your attorney will be at your side to explain every step in the process, should you ask. Your attorney can explain what’s going on much better than I can. So I am sticking to the business and cash flow aspects of your income real estate deals in this book.
  • Your attorney is an expert on the legal aspects of your transaction. And your book’s author is an expert on the business and cash flow aspects of your income real estate investments. After you buy your income property, you will probably receive some rent security deposits. These can range from $1,000 for a small property to as much as $50,000 or more for a large property. But you are not allowed to spend these security deposits; instead, you must keep them in a bank account where they are safe and secure for your tenants.

Increase Your Profits from Every Property

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Having made the improvements suggested above (which will take about two months), you are ready to raise the rents in your building.  Here are a few guidelines I find work well in all types of apartment houses:Increase Your Profits

  • Tune in to today’s economy by ridding your mind of ancient rent guidelines. Rents have risen enormously! Be sure you raise your rents to reflect the increases that have taken place.
  • Never be afraid of losing tenants. You can always rent an apartment to someone else.
  • The bottom line always is: You must make money on the property; otherwise you will have to get rid of it. So you must take action to raise the rents as soon as possible.
  • Your tenants will usually be willing to pay higher rents if you improve the property. Thus, their sympathies will be with you when you take steps to improve your building.
  • Be certain you know the numbers (income, expenses, profit) of your buildings before you increase your profits any rents.
  • Make careful computations so you’re sure that the increases cover all your expenses and give you a profit and positive cash flow (PCF). Never support a building by putting cash into it each month.

Take the Billions Being Offered to Real Estate

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Take the Billions Being Offered  – Your reaction to the heading directly above might be intense laughter. If so, please don’t call me to tell me you tried 116 lenders and they all said no. I know what our situation is; I wrestle with the problem of finding more borrowers for our real estate money. Plenty of my friends in the business tell me they, too, have the same problem. Since I have actual, daily, experience in lending money for real estate purposes, I know that you can find the money for your real estate deal that involves attractive and “lendable” properties.

Take the Billions Being Offered

Take the Billions Being Offered to Real Estate A lendable property is one that has a value somewhat greater than the amount of the loan you seek. Of course, if the property is worth a lot more than the loan you seek, your borrowing will be made much easier. Because I struggle daily to find more real estate borrowers, I am convinced there is plenty of money around for your real estate deal. All you need to do is go out and look for the real estate money you need! You can look for this money in a number of ways, such as:

Writing to various lenders asking them if they would be interested in your real estate loan. Calling lenders in your area who might be interested in lending on your real estate proposal.

Visiting in person lenders whom you think would be willing to help you. Looking on the Internet for real estate lenders who might work with you on the deals you have. Reading the Real Estate Section of your local large-city Sunday newspaper, looking for ads run by lenders in your area.

Consulting the various directories of real estate lenders listed at the back of this book to find the names, addresses, and telephone numbers of many lenders. One of these lists contains 2,500 names of active real estate lenders.

So please believe me good friend of mine when I tell you that real estate money is available to you. What you have to do is look for it in a way that you find is suitable to your lifestyle and method of looking! And by using the smart and proven methods we give you in this book, you can borrow your way to real estate riches! Take it from someone who works both sides of the street as:

A Borrower for Real Estate Investment Purposes.

A Lender Who Loans to Real Estate Investors.

Plenty of Free Advice and Assistance Can Be Yours

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Income real estate is not a complicated business. You’ll find that many attorneys and accountants know the ins and outs of real estate. So you do not have to run around looking for people who know things about a business that is highly complicated.

Plenty of Free Advice and Assistance

How can we say this? Because:

Experienced real estate attorneys can easily draw up the papers you need to buy or sell real estate.

Documents such as leases, security agreements, and maintenance contracts are almost what attorneys call “boilerplate.” Nearly every document you’ll ever need can be found in the standard reference books containing often-used documents for real estate attorneys.

However, you must always have the Plenty of Free Advice and Assistance of a competent real estate attorney whenever you buy or sell any real estate. Likewise, you should also have the services of a competent Certified Public Accountant (CPA).

Your accountant will not have much of a problem with the average real estate deal. Why do I say this about accountants? Because the arithmetic aspects of real estate are well known to accountants. You can easily learn them yourself if you wish. I suggest that you get to know the “numbers” of real estate because doing so can mean a big difference in your income. Later in this book you will get you started on the numbers you’ll need to know to borrow your way to real estate riches.

Federal Reserve Board

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Federal Reserve BoardThe Federal Reserve Board (Fed) announced that economic activity is picking up, noting that there is increased activity in the housing sector. The Fed reaffirmed its ongoing program to purchase a total of $1.25 trillion of Fannie Mae and Freddie Mac mortgage-backed securities and up to $200 billion of their debt. However, in recognition of the improving economic conditions and to promote return of private investment to these markets, the Fed has decided to spread its purchases over an additional three months, through the end of March 2010. Previously, the Fed had planned to complete these purchases by the end of 2009.

On October 15, 2009, NAR submitted a letter to the Fed, Treasury and FHFA noting that that the manner in which the Fed unwinds the MBS program is critical to the housing and mortgage industries as well as the economy as a whole. In the letter NAR provided several recommendations for how the Fed could accomplish this as well as requesting a meeting.

Successful Real Estate Developers

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In recent years, many economists have recognized that the lack of effective real estate laws can be a significant barrier to investment in many developing countries. In most societies, rich or poor, a significant fraction of the total wealth is in the form of land and buildings. In most advanced economies, the main source of capital used by individuals and small companies to purchase and improve land and buildings is mortgages — bank loans for which the real property itself constitutes collateral.

With the development of private property ownership, real estate has become a major area of business. Purchasing real estate requires a significant investment, and each parcel of land has unique characteristics, so the real estate industry has evolved into several distinct fields.

Cities such as Vancouver, British Columbia have experienced remarkable growth in real estate prices in the new millennium.

Successful Real Estate DevelopersNow a days property is play many role it is use as investing money or for a living purpose If your desire is invest money in property then it is not bad for now a days but u r looking for living reason then there are many precautions that is keep in our mind earlier than the buying .If you are moving out of your rented flat and you want to your bond back. Then decide which city is good for you & your future then decide to buy it .as we know that in metropolitan city the price is touch to sky then it is not easier to buy a house. Then you should city as your budget.

Because the amounts of money involved are typically very large, a majority of real estate development projects are financed with a large amount of debt leverage. Because expense is high, sale is difficult, and return on investment is delayed, real estate investment is inherently risky. A large part of the work of developers is the management of risk.

Successful real estate developers can become enormously wealthy due to the large sums of money being transacted and the value of the assets they control. However, because of the illiquidity of their assets, they are also very often cash-poor. Inability to remain cash solvent is the primary cause of business failure for real estate developers.