House Buying Coaching For Ownership and Investing

Housing watch posted an article showing that although the sub prime meltdown had a role in the housing collapse, it was actually downfall of REPO - Renew Sale and Repurchase. This is a $20 trillion unsecured market in charge of collateralizing securities.

Once things started going down hill, REPO who is tasked with keeping money flowing took a dive as well.

Either way, as the author brings out- knowing what may have caused the collapse still doesn't make anyone feel better.

The problem is that all of us have a part to play: from bankers, to buyers, to real estate agents, appraisers, brokers, and real estate investors.

Everyone was just thinking that things would always continue on the way it was going, when in fact it was too good to be true. People were lying about how much money they made, appraisers were puffing up the actual value of the properties and builders were over building and everything was over hyped.

It really is time to live below our means and think before we make large purchases such as these.

For now, homeowners to have options and real estate investors do have an important role in moving all of this housing inventory.

Dennis

For real estate investors, handling your business the right way is essential to prevent your own mini housing collapse.

Standard and Poors reports that it will take at least 3 years for the REO Back log to clear out.

With mortgages continuing to fail at a faster rate than REOs (Bank owned real estate) are being sold, we're heading into a serious back log of properties well into the next few years as well as diminishing home prices.

With the continued under performance of the Home Affordable Modification Program, home prices will continue to go down well into the end of 2010.

Bad news all around.

Homeowners need continued help with Loan Modifications and be well informed and educated as to its use so Loan Modifications don't simply turn into forestalling the inevitable.

Real Estate Investors will also need to watch how they buy. Investors don't want to overextend their purchasing not knowing which way prices will go.

A nice mix of wholesaling (limited risk while earning a nice income) as well as buying at a sizeable discount can help limit risk as well as get you in on a buyer's market that won't be seen for years to come.

Dennis

Builders are trying to cash in on the home buyer tax credit- building up spec homes in hopes to lure first time homebuyers and 'move up' buyers as well.

These buyers come from somewhere and if they're buying these new homes, they're not buying existing homes. It's an emotional move as brought out in the Wall Street Journal article, but is it the right one for people?

Remember how we got in this mess in the first place!

Buyers still have to be careful and not buy just because they can or because there's a deadline to beat.

I've included direct links to IRS forms that new buyers will have to fill out if they will be taking advantage of the tax credits (see Tax Credit category on the right)

Current home sellers can add to the attractiveness of their home by providing financing through lease to own programs or owner financing.

Here's a link to a Free Rent to Own Ebook.

We all have a responsibility in how we get out of this housing crisis.

Dennis

Property Wire, reports that the housing market is on the upswing for just about every US region except the Northeast.

This is part of a review of the past 3 months of data with a 2% increase coming in January.

The Detroit area, which has experienced a drastic decline actually saw a 14% gain.

It's still hard to tell if we have bottomed out or if we're in for anther dip. Real estate reports are like Medical studies which show that something is great for you one week and the next week, you might get cancer from it. Arghh!

Since we don't know what's going to happen, it's still important to buy smart:

Reduce and limit risk (wholesaling etc)
Buy right (conservative ARV's and add fudge factors for repairs and other expenses)

Cash flow is paramount. Whether you buy and hold notes, wholesale, whatever- good cash flow will see you through the hard times.

Dennis

Housing wire announced this week that Fannie Mae is adding to government home buy incentives.

They are offering a 3.5% discount on REOs to owner occupant buyers in order to reduce the large amount of vacant houses and bolster neighborhoods.

The discount can be applied toward's buyer costs etc and must be taken advantage of by May 2010.

You can check out these properties at HomePath.Com



3.5% Discount is a nice start, but homeowners are continuing to lose homes to banks that do not have the proper systems in place to work with homeowners to resolve their individual situations.

 

Additionally, while there have been some government consessions to relax constraints placed on real estate investors, more incentive is needed to allow inventory to move and be sold quickly.

 

Recent legislation just seems to hamper efforts by investors, while both sides should be working in unison.

 

Dennis