For investors and homeowners alike, the trend in short sales is good news. Based on analysis of a short sale report issued by RealtyTrac, the volume of short sale houses is up and prices are trending downward. However, it’s still takes a long time to close a short sale deal.
Being from January of this year, the data is a little bit aged, but this trend was anticipated and it is expected to continue into the future. It just takes time to collect and analyze the data.
Nationally, the number of short sales increased 15 percent year on year while sales of foreclosed houses declined by 12 percent. The clear leader, measured by volume, is Bank of America with a monthly average of 5,000 short sales. Chase and Wells Fargo came in second and third respectively. Both averaging a little less than 3,000 short sales each month.

way of measuring the increased volume of short sales is by the largest percentage increase for the major banks, lenders, and servicers. The clear leader was PNC Financial Group by posting a 140 percent increase in completed short sales. However, the three government entities of Fannie Mae, Freddie Mac, and FHA also had a substantial increase at 120 percent.
When it comes to the lowest average selling price, the three big government powerhouses took the lead at slightly below $130,000. According to The National Association of Realtors, the national median price for a house at the same time was $154,700. This would include short sales and real estate owned by banks. The point being is that at an average of $130,000, short sales are selling for significantly less than traditional sales.
Deutsche Bank came in with the second lowest short sale average price at $132,996, with Sun Trust Bank third at $144,024.
Of course, one of the major detractions to short sales is that the time to complete them is anything but short. Fannie, Freddie, and FHA, as a group, averaged a little less than 200 days from the time the foreclosure process began to the time they approved a short sale. Next, is Ally Financial at a whooping 321 days, followed by PNC Financial Group at an alarming 353 days.
Those are the most current short sale facts for investors interested in that sector of the real estate market.
All the Best,
Peter Vekselman

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In the commercial sector, there is plenty of talk about apartment building investing. And that’s appropriate because rents are going up and vacancies are going down. However, purchase prices are also going up because of the solid return on investment. So let’s take a look at warehouses as a better commercial real estate investment.
A recent survey by PricewaterhouseCoopers found that commercial investors are bullish on commercial properties in general because they have seen a national average increase in value of 28 percent since the hit bottom in 2010. What makes particular sense are warehouses and industrial properties in areas that are experiencing the strongest economic recovery. Those include Silicon Valley in California and select major cities in Texas. Home to high technology and energy industries.
The reason warehouses in particular make sense is because they are little more than big boxes that you can rent out with minimal maintenance expense. As long as the roof and walls don’t fall down and the electricity stays on, your tenants will be happy to send you a check every month.
Warehouses are also versatile. Retailers and manufacturers of all types need storage for inventory. Clubs rent warehouses as clubhouses. Manufacturers convert them into factories. Walls can be put up to convert them into office space. Warehouses really are big boxes that can be used for almost any commercial need.
Warehouse space is also inexpensive and easy to expand. Investing in a warehouse with vacant land to build additional buildings allows you to expand your warehouse business once you have cash flow from the existing building.
Besides Silicon Valley and Texas, other areas to look for solid warehouse investment opportunities are international gateway cities. As the global economy continues recovering, it will soon reach a need to expand. Although the economic news from Europe is dominating the news, China never even saw a recession. China did see a reduction in growth but growth at 9.3 percent in April, it’s the envy of the global economy. The point being, warehouses on the west coast positioned for global trade can expect expansion opportunities for years to come.

All the Best,
Peter Vekselman

PS: Private Real Estate Investment Coaching Available:
http://coachingbypeter.com/mki/
PPS; Watch my You Tube Channel
http://www.youtube.com/user/InvestmentReal?feature=watch

Private Real Estate Investment Coaching Available:
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Everyone makes mistakes. Unfortunately, in real estate a mistake can be extremely costly to the point that an investor never recovers. For that reason, I hope readers will avoid these common mistakes.
First, educate yourself before investing. There is more than enough information available for you to learn how to avoid mistakes made by others. Long-term financial security is only achieved by learning multiple investment strategies.
A common mistake made by beginning investors is learning a single investing strategy and applying it to every deal that comes along. For instance, some people try to use the lease option to gain control of every property they are interested in because it’s a no cost or low cost way of getting started. The truth is that most sellers want out of the property entirely but a lease option doesn’t allow for that.
Another common mistake investors of all calibers make is looking at every property on the market. It’s a huge waste of time and effort. You are not looking for properties, you are looking for motivated sellers. Instead of looking for properties, you want to be looking for pre-foreclosures, job transfers, divorces, and eviction notices. Those and similar situations are where you find motivated sellers.
Moving on to mistake number three is not having an exit strategy. As the old saying goes, you make your profit when you buy, not when you sell. You need to know how you will sell the property (or hold it) before you make a purchase offer. Knowing what you will do with the property is the only way you can make a purchase offer where the numbers make sense.
That brings us to mistake number four, not having a backup plan. Things go wrong. People change their minds. The most valuable properties have multiple exit strategies. One of the best investments you will ever have is from a motivated seller where you have the option to flip, wholesale, or rent.
Of course, that brings us back to rule number one. You need to educate yourself about investing in real estate before you ever put a dollar on the closing table.

All the Best,
Peter Vekselman

PS: Private Real Estate Investment Coaching Available:
http://coachingbypeter.com/mki/
PPS; Watch my You Tube Channel
http://www.youtube.com/user/InvestmentReal?feature=watch

Private Real Estate Investment Coaching Available:
http://coachingbypeter.com/mki/

The market is clearly turning around. Competition for the best real estate investments is developing. As I’ve been saying for months, the opportunity to buy at the bottom may be disappearing. However, that only means new opportunities are opening up.
Namely, investing in real estate notes and deeds of trust. Investing in real estate paper has clear value today when people that want to buy homes can’t get bank loans. I’m not saying there are not quality properties out there worth buying because there definitely still are. What I am saying is now is the time to look at an alternative way of investing in real estate that your competition is most likely over looking.
As a lien holder, you don’t have to deal with tenants. You deal with borrowers. You collect 10 percent or more in interest without having to manage the property. As a lender, your primary concern beyond the monthly payment is that property taxes and homeowner’s insurance are being paid.
Obviously, your main risk is the borrower quits making the payments and you face the unpleasant and expensive task of foreclosing on the property. There are a couple of things you can do to reduce the possibility of foreclosure and to make it relatively easy to take over the house if you have to.
First, since there are still plenty of good real estate deals around, you want to make a loan that is significantly less than the market value of the house. Preferably at least 20 percent below market value. That way, if you take back the house, you know you’ll recover your full investment.
Second, you have the borrower sign a quit claim deed as a condition of the loan. A third party holds the quit claim deed. It is only recorded if the borrower fails to make the loan payments according to the loan agreement. In the event they don’t comply, you record the quit claim deed, making it much easier and less expensive than foreclosure.
That is how you out negotiate, out maneuver, and out smart your competition.
All the Best,
Peter Vekselman

PS: Private Real Estate Investment Coaching Available:
http://coachingbypeter.com/mki/

 
PPS; Watch my You Tube Channel
http://www.youtube.com/user/InvestmentReal?feature=watch

PS: Private Real Estate Investment Coaching Available:
http://coachingbypeter.com/mki/

Rental rates are up and sales prices are down along with interest rates. The time to invest in real estate with strong positive income will never be any better. When you add in the tax advantages and depreciation, it’s a wonder there isn’t a flurry of investment activity beginning to drive prices up.
Of course, local markets vary greatly. Downtown Manhattan and downtown Des Moines Iowa are never going to be the same. None of us are going to invest in Manhattan but all of us should be looking to invest locally. Homeownership continues declining, causing increased demand for rental properties. Historically, housing prices always appreciate in value. Being able to buy at these low low prices means strong cash flow making loan payments. Outside of real estate, there are not many investment opportunities where income from the investment actually pays for itself while appreciating in value. The reasons for investing today are very compelling.
If you are an investor holding money in the bank, you need to reevaluate your strategy. At best, that money is earning one or two percent interest. If you put it to work earning an income stream you will do much better. The objective with real estate investing is buying low and selling high. That is exactly the opportunity the market offers today. Buy low, let the income stream pay the loan, and be prepared to sell high in a few years.
A word of caution. This might not be the time to branch out into unfamiliar sectors of real estate without the help of a mentor that knows the sector that is new to you. If your niche has always been single-family homes, today’s commercial market is too unstable to jump into alone. However, under the guidance of an experienced commercial investor, there are tremendous opportunities in multifamily apartment buildings. And of course, the financial rewards for investing in commercial properties are much higher than residential. Apartment buildings are designed to be big money makers. Single-family homes are not. Whichever you decide, now is the time to be active in the market.
All the Best,
Peter Vekselman

PS: Private Real Estate Investment Coaching Available:
http://coachingbypeter.com/mki/
PPS; Watch my You Tube Channel
http://www.youtube.com/user/InvestmentReal?feature=watch