Future of the Real Estate Market

[dmk112]

Runner,
It takes a long time to learn the real estate business and to understand how to read the market and to market a home. It's not something that you can learn overnight or in a week or two. Plus it's always advisable to know the legal ramifications and to have a good real estate lawyer handle any transaction for you. Foreclosures are homes that the mortgage lender or bank has taken back from the owner for failure to pay the mortgage. It doesn't necessarily mean the home is a lemon or that it isn't marketable and that it can't be sold. The main factor is that the owner could not meet their mortgage commitment or obligation and the lender took it back. Usually because the owner or buyer initially didn't have enough down payment and got in on a shoestring and the mortgage payment is so high that they get strangled by the monthly payment an end up falling into arrears on their commitment. There are numerous legal actions that have to be cleared up in these cases to get a free and clear title to the home. Be wary of trying to do it on your own without the proper legal representation by a lawyer who knows how it works and the ins an outs of foreclosures. My advice would be to take an available real estate course at a local junior college or university or at a real estate school. These courses usually require about 72 hrs. of course work and passing the final examination which then allows you to take the state examination which will differ from state to state. Some states are now requiring 2 years of college as a prerequisite plus the required 72 hours of study in that subject matter. It is not as simple as it seems and as some will try to convince you that it is. Buying and selling homes can become a negative action just as easily as a positive one if you don't know your market and what your are doing.

Ski, will taking these classes give you any type of certification or maybe a real estate license?

If anyone's interested http://www.success.org/ provides courses on Real Estate. I downloaded into my iPod and this guy seems pretty honest and good. He's not trying to make any money, he just wants to spread knowledge on the real estate game, hence the .org website. He's a Shaolin master too! LOL

[dmk112]

Oh, and the gist of the whole course is how to get your to become a multi millionaire in 20 years or less. Basically buy 6 properties and pay them off (mostly rental properties generating positive cash flow). I'm about 2/3 through the Master Real estate course and it's pretty good so far and I recommend it.

[lemonjello]

But this cycle has been stretched out and exacerbated by the Fed actions after 9/11 by a couple of years. The hot markets are still heading down but the ones that didn't run up are probably already stabilizing - Texas for instance. Lots of buyers are cashing out of Cali and moving money to Texas.

All real estate is local.

Generally that is true...However, in 1994 there were some fantastic foreclosure deals in West LA...Real Estate usually goes in 9 year cycles...Values will drop a lot in the next few years...Right now they are going after those that think they can get a deal...It is too early in the cycle...Doug

[lemonjello]

Runner,

I know quite a few real estate investor (multi)millionaires that got started from situations similar to yours. If you're seriously cutting grass you might be in a great position to talk to lots of people about their property and look at lots of real estate on your job as you drive around - something people that work in offices can't do as easily. There may be deals you drive by every day and don't know about.

Here's a website from a legit investor that retired from the military and decided to get into RE investing you might find interesting. Check out the articles.

https://www.rehab-real-estate.com

Here's a site from another ex-military Harvard MBA legit investor where he rates gurus and has some of his own pubs. Sometimes he can be almost too pessimistic.

http://www.johntreed.com/Reedgururating.html

I’ll keep an open mind to what my cousin has to say and dig in. I always have felt that being a good student of anything you’re interested in helps. Anything that is worth having requires a plan and due diligence. I’ve never had anything put into my lap and in fact have had to fight tooth and nail for everything I’ve got.. One thing is for sure I can learn with proper mentoring. I realize he is not going to give me a 10-step list that I must follow to become successful.

I have always wanted to get involved in real estate and now might be the time.. Part of my thinking is to use some of my profits from my current business to help in the financial aspects. Oh I forgot to mention I cut grass for a living...LOL

[Websman]

I'd say we are fast approaching denial...the time to buy will be when we approach Panic down thru Despondency....You will still be able to get some great values up thru the approach to Relief....Doug

Judging by my local market, I would have to agree. If you talk to any local realtor, they will tell you that sales are way down, but then they'll say that the market is only in a temorary downswing and will be back up next year. That sounds like denial to me.

The average family can't afford a home. Something has to give and it will...

[skiracer]

Ski, will taking these classes give you any type of certification or maybe a real estate license?

If anyone's interested http://www.success.org/ provides courses on Real Estate. I downloaded into my iPod and this guy seems pretty honest and good. He's not trying to make any money, he just wants to spread knowledge on the real estate game, hence the .org website. He's a Shaolin master too! LOL

DMK112,
My wife an I have had our NJ sales agent real estate licenses for 20 years an they are active and hanging at our brokers offices so I can list and sell any listing that is listed in any Multiple Listing Service or by any licensed real estate agent in NJ. I was talking about taking any course that is validated and certified such that if you pass that course you can then register and take the state examination in your state an if you pass that exam you will be eligible to obtain your state agents license. All states differ in their process towards obtaining that state license. Taking any course or tutorial can and will increase your knowledge base but will not allow you to buy or sell any listed, LISTED being the operative key word, property. If an owner of a property lists that property with a brokerage or an agent for a brokerage then they cannot just sell that property to anyone that walks in the door. Because of the contractual obligations of the listing agreement they have to market and sell the property through that agent or some licensed brokerage in that state as long as the term of the listing agreement is in effect. So that closes down alot of opportunities. Not to say that you can't buy that property but it has to be bought through someone licensed.
On the other hand if the property is not listed an is up for sale by the owner himself he can do what he wants with it in regard to how he sells or markets it. Having the license just opens the door to alot more activity but does not necessarily shut you out from investing in real estate if you don't have a license.
I have bought and sold numerous properties, residential and commercial, over the past 20 years or so and the pitfalls are many. I don't want to disuade anyone from thinking they can make money in real estate, basically buying and flipping residential homes or vacant lots, or fixer uppers and flipping them, because there are always plenty or good deals out there if you know what you are looking for and know your market and timing. But the guys that are sellling these "make a million if you follow my example" are making more money selling those tapes and courses than they are selling real estate if you get my drift. It is much easier and quicker to sell that commodity than it is to buy and sell houses in general.
As far as buying to own and then rent out to a renter is concerned you had better look into the laws governing that type of situation in your state because you will find out things about how it works that will amaze you. Most renters have more rights towards the property than the owners and eventually they will have you talking to yourself or thinking about killing the bastards renting from you. Once they are in they are hard to get out if they renige on the rent and the process is time consuming and very lengthy on top of the mental anguish the entire process will put you through.
I have at times owned a dozen homes and rentals and my logic was that owning a construction company with access to all the trades it would seem to be a great fit. The continous stream of things that will breakdown becomes another job in itself and the costs to keep everything running when factored into the profit and loss statement doesn't make it all that enticing in the end. You are also at the mercy of the equity curve rising and falling as the real estate cycles rise and fall. The value of the property can easily fall much lower than the initial price you pay for it.
Leveraging or the system of buying one and then building a base off of what you think is equity and buying another and another is a viable way of approaching building a real estate portfolio but do not think that it isn't filled with pitfalls. Leveraged systems are made to collaspe an without the proper capitalization and money in the bank it doesn't take much to make the entire pyramid fall. Of course there are a few out of thousands that will succeed with this type of model but for everyone that does build that so called empire there are thousands that have failed an are now trying to find a way to pay off the debt from the collaspe.
I still continue to look for depressed situations an any opportunities that will hold water but it is not an easy task and very time consuming especially if you are running other businesses. I have plenty of capitalization an access to as much as I want or need to do as I please but am still always wary and do the DD until I am sure. As I said earlier, I am not trying to disuade anyone from thinking they cannot make money in real estate but just trying to put it into the proper perspective. You will never know unless you try but it is always good to listen to the voice of reason an experience.
I've been subjected to gamblers an basically a gambler all of my life in the sense that I am not afraid to take the risk or the plunge when I feel I'm right about any situation but I never gamble unless I feel or make the edge in my favor. I am against leveraging in any sense of the word when you do not own the cash to back yourself up just in case. Of course I will always try to work with someone else's capital if the terms are reasonable and work within the model but to try to build on leveraging without some capital base is asking for trouble an I strongly suggest anyone not to do that until they can acquire some capital of their own behind them. Other that any of this I would say take the plunge as long as you have done your homework and aren't deceiving yourself by not understanding fully what you are doing or trying to accompolish.

[Runner]

Lemonjello, I looked into Reeds site and was quick to pick out on how quickly he discredits the rest of the gurus. I then notice he is selling books. It makes me weary of those who bash others in order to elevate themselves does not sit well with me. I think the road to any successful venture is filled with potholes and challenges. The potholes and challenges lets us truly look at who we are and what were made of…

I did recently attend a Whittney’s seminar and was quick to capture the salesmanship. I did some research of the company RUSS.OB and new this was not for me. It was interesting the guru was talking about how anyone could make a fortune in real estate and he was quick to show us the sale price and the benefits of buying it today. You would not believe the number of people lined up to fork out 1,000.00… I left the meeting and was wondering how much money this guru made in just a few hours…..If fact I often wonder why market gurus sell all these services? Is it to offset the down drawls they face? Could it be they make more cash from people joining then investing? Not sure…

[peanuts]

I’m going to start buying some houses through Carleton sheets program. I looked at a huge spike in bankruptcies and foreclosures occurring in my area. I wonder if this can be done with zero money down? Ya’ll think I joking….

I know for a fact that you are not joking about the foreclosures in your area!!!

The problem I see, is whether the city across the river will continue to redevelop downtown and attract big names in business like the company your wife works for. If so, you might be OK by the northern lake area, east of the border.

I can buy houses in my hometown for zero money down. That place is a dump, however

[lemonjello]

I know some local guys who are very good at doing real estate deals that have gone into the seminar business. They are all legit and teach real workable info. My take is the money in seminars is a lot easier and faster than real estate investing. If you can sign up 500 people in a seminar at $1000 each in a couple of weekend seminars it's some fast money. I've heard from the horse's mouths that only about 10% of those people will actually do anything with the info from the seminars. Turns out real estate investing is usually a lot more work than most people think it is. OTOH the guys giving the seminars were themselves among the 10% that had paid for other people's seminars when they were starting up.

In any case, I'd stay away from the national gurus and look for a local person that knows what works in your market.

Lemonjello, I looked into Reeds site and was quick to pick out on how quickly he discredits the rest of the gurus. I then notice he is selling books. It makes me weary of those who bash others in order to elevate themselves does not sit well with me. I think the road to any successful venture is filled with potholes and challenges. The potholes and challenges lets us truly look at who we are and what were made of…

I did recently attend a Whittney’s seminar and was quick to capture the salesmanship. I did some research of the company RUSS.OB and new this was not for me. It was interesting the guru was talking about how anyone could make a fortune in real estate and he was quick to show us the sale price and the benefits of buying it today. You would not believe the number of people lined up to fork out 1,000.00… I left the meeting and was wondering how much money this guru made in just a few hours…..If fact I often wonder why market gurus sell all these services? Is it to offset the down drawls they face? Could it be they make more cash from people joining then investing? Not sure…

[lemonjello]

BTW, I met a guy last year who had followed some gurus advice and bought up a bunch of rentals and is now facing bankruptcy since the alleged gurus didn't know what they were talking about and have since vanished. Caveat emptor.

Here's an interesting blog showing how people get themselves into trouble. Was this guy ethical? I imagine there are a lot of people in similar situations right now in Cali, Arizona and Florida.

http://iamfacingforeclosure.com/

[Runner]

BTW, I met a guy last year who had followed some gurus advice and bought up a bunch of rentals and is now facing bankruptcy since the alleged gurus didn't know what they were talking about and have since vanished. Caveat emptor.

Here's an interesting blog showing how people get themselves into trouble. Was this guy ethical? I imagine there are a lot of people in similar situations right now in Cali, Arizona and Florida.

http://iamfacingforeclosure.com/

Lemonjello, I did check out that kids blog and I must admit I’m impressed with his honesty as he shares his mistakes with the world. I bet this kid will be a millionaire one day if he sticks with it. We all make mistakes everyday and yet few wish to admit when they are wrong. What I find interesting is the moment you wish to try something that is different you get attacked by all the nay Sayers telling you how you can’t do something…

[lemonjello]

Yeah, that video was very interesting. Especially the part about the kid following some guru's advice. Of course there are successful real estate investors that never even got close to a predicament like that. Seems like that kid's situation is the almost exactly the same thing that happens to some stock traders. They get too greedy and blow out their accounts. No position sizing and money management.

Once again, I'm just throwing this stuff out there for general information to people reading the thread. Personally, I'd rather not go thru what that kid is going thru. I'm crazy like that.

Lemonjello, I did check out that kids blog and I must admit I’m impressed with his honesty as he shares his mistakes with the world. I bet this kid will be a millionaire one day if he sticks with it. We all make mistakes everyday and yet few wish to admit when they are wrong. What I find interesting is the moment you wish to try something that is different you get attacked by all the nay Sayers telling you how you can’t do something…

[dmk112]

In any type of investment vehicle, following a guru is usually a bad idea. Hence those morons who buy Cramer's stocks in AH at a 10% premium and then the stocks goes down the next day.

I was recommended a real estate website which allows you to search for homes in your area that are up for sale. A good practice is to write down the asking prices of homes and then the final sale prices. This will allow you to gauge how the housing market is doing. If someone asks $500k for a home and then sells it for $400 is a sign of a housing slump, etc.

The website is...

http://www.realtor.com

Has anyone bought any investment real estate on this forum? I want to hear from you!

[Runner]

I called my cousin last night and was talking to him about real estate. I asked him about the market and how he was dealing with the slow down. He told me it is not a problem for him because he is not greedy. He said it is always a buyers market. I told him that this does not make sense and his response was again I do not get greedy. Then he went on to explain the greed factor in real estate. I was blown away with what he was saying. In fact the same principle applies to the stock market.

Example:

A realtor is selling a house for 250K down the street from where my cousin is selling one.

My cousin drops his profit a little and lists the house that is worth 250K to 240K. He sells the house because it is a buyers market. He makes a nice profit and the realtor makes 6% commission if it sells. The buyer is now happy because he got a great deal. My cousin is happy because he made a nice profit…. In a nutshell this is how he is dealing with the slow down and has 3 houses closing this week. Everyone loves a deal…. Of course it is not this simple and he did say you must do the DD before entering into any deal.

[dmk112]

I called my cousin last night and was talking to him about real estate. I asked him about the market and how he was dealing with the slow down. He told me it is not a problem for him because he is not greedy. He said it is always a buyers market. I told him that this does not make sense and his response was again I do not get greedy. Then he went on to explain the greed factor in real estate. I was blown away with what he was saying. In fact the same principle applies to the stock market.

Example:

A realtor is selling a house for 250K down the street from where my cousin is selling one.

My cousin drops his profit a little and lists the house that is worth 250K to 240K. He sells the house because it is a buyers market. He makes a nice profit and the realtor makes 6% commission if it sells. The buyer is now happy because he got a great deal. My cousin is happy because he made a nice profit…. In a nutshell this is how he is dealing with the slow down and has 3 houses closing this week. Everyone loves a deal…. Of course it is not this simple and he did say you must do the DD before entering into any deal.

You need to get some details for us Runner! How does he find these deals? What's his strategy? ETc..

Interesting chart I found today: