All Entries in the "Investors" Category

Housing Supply Shrinking Home Sales Increasing

The July residential statistics have been released from our regional Board of REALTORS® and shows our housing inventory in the local market has decreased by seven months since January.  Covering Palm Beach County, Martin County and St. Lucie County, the association states that 12.6% more of homes were sold this year over last year.  Leaving our current housing inventory for single family homes at 13.5 months for Palm Beach  County, 6.9 months for St. Lucie County and 15.3 months for Martin County.  Townhomes and condos were at least 4 months longer in inventory across the board in all three counties.

However, median sale prices decreased from 2008 to 2009.  St. Lucie County suffered the biggest drop in prices at a -28.5% decrease from $144,000 to $103,000.  Martin County decreased -20.7% from $290,000 to $230,000 and Palm Beach County a -16.5% decrease from $285,000 – $238,000.  Personally, I like the sound of that.  Prices are lower and demand is picking up.  I see a potential for some sweet equity down the road.  A great time to buy and a great time to invest.

It looks like Palm Beach County is strong with current real estate sales activity.  As of July 2008 total number of units pending and contingent is a strong 3,394 single family homes versus St. Lucie County with 1,709 and Martin County with 450 single family homes.

Lets see what happens over the next few months.  I’m hoping the tax credit is at least extended and sales continue.  Without the tax credit extension, I predict sales will drop off.  But, I just don’t see our government letting that happen.  We’re headed in the right direction. UP!

Key Real Estate Investment Terms

Successful real estate investors have extensive knowledge of the real estate industry.  They are equipped with the information, facts and figures necessary to make important real estate investment decisions.  The following key terms will apply whether you are purchasing a small, oceanfront condo in Jupiter, Florida or a multi-million dollar commercial property in Manhattan.

An investment property is a piece of real estate you purchase with the objective of earning a return.  Your primary residence is not considered an investment property because the primary purpose of your purchase is to provide a place to live. Common investment properties include rental homes, apartments, condos, townhouses as well as commercial properties such as business or industrial parks and shopping centers.

Depreciation is another way of saying something is decreasing in value.  Investment properties may experience depreciation, because typically as a building ages the value of the physical building depreciates.  It is important to note the actual depreciation realized is related specifically to the value of the physical building. The value of the land is integrated into the equation as well, and traditionally land increases in value. When we look at investment properties, we normally see an increase in value thanks to the continuous appreciation of the land the building was built on.

A land contract is fairly simple.  The land contract for the investment property outlines the terms of the agreements, such as the monthly payments, interest rate, and maturation date of the loan.

Before buying an investment property you will want to make sure the property does not have a lien against it.  A lien is basically a claim against the property.  A lienholder owns a legal right to extract their money from a property should the borrower default.  If you buy a property that has lien on it, and the person you bought the property has defaulted on their loan, you may find yourself in second standing for right to the property behind the bank that has the lien. It is important to do your due diligence and ensure you are not setting yourself up for a fall by investing in property that can be claimed by others.

Real estate investing can become rather complex.  However, if you gain a good grasp on the fundamentals of investing, such as depreciation, liens, and land contracts and auctions, you will be in a position to earn a positive return on your investment property for many years to come.

Joseph Quirk, Broker, Cobblestone Realty in Jupiter, Florida.  Joe is also a real estate investor and has accumulated over 50 investment properties in five years in Palm Beach County, Florida.  For more information about real estate investments, contact Joe at jquirk@cobblestonefl.com.  Visit our blog, Jupino to learn more.

Top 3 Reasons Why Now is the Time to Buy Real Estate

Strong indicators show that we are in the best market to purchase a home.  Whether you are interested in buying a home as an investment, as a first time home buyer, or to move up to a bigger home, it doesn’t matter.  It’s still a great time to buy for everyone.  There are many more reasons why, but to make things easy, I can boil it down to three main factors.

1.  Housing prices are declining. The old saying, “buy low, sell high” applies here.  There’s no need to wait it out for the lowest price.  In fact, waiting it out could do you more harm than good.  You will miss a lot of great deals out there waiting for the market to bottom out.  Because real estate is for long term investing, your purchase will pay off even if you didn’t buy your home at the lowest point in the market.

2.  Mortgage rates are at a low. CBS Financial Analyst, Ray Martin, appeared on the CBS Early Show saying, “Rates on a 30-year, fixed-rate mortgage are at a level we won’t see again in our lifetime.”  Be full warned, when housing purchases increase, rates are going increase as well and historically they have increased rapidly.

3.  $8,00 First-Time Home Buyer Tax Credit. Buy before December 31, 2009 and you’ll get an $8,000 tax credit if you’re a first-time buyer.  Know the definition of a first-time home buyer!  You can previously have been a home buyer and still qualify.  The law defines “first-time home buyer” as a buyer who has not owned a principal residence during the three-year period prior to the purchase.  For married taxpayers, the law test the home ownership history of both the home buyer and his/her spouse. See First-Time Home Buyer Tax Credit.

Not sure how to proceed?  I’d meet with your mortgage broker and find out what you can afford to buy.  Credit score needs some work?  No problem, a good mortgage broker can help you improve your credit score.  Then, call me.  I can help you find the best home at the best price.

Susanne Quirk is a Realtor® with Cobblestone Realty specializing in residential homes in Jupiter, Juno Beach, Palm Beach Gardens, Florida. Contact Susanne at (561) 386-0350, e-mail, or visit our website www.TheJunoBeachRealtor.com to learn more.

Is It Time To Be Greedy?

“We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful.”

WARREN BUFFET

This mantra of investment from one of the gurus of American business sounds uncomplicated. Its context was strategy for capital appreciation on Wall Street, but its’ application to all markets seems obvious.

When the dot.com and technology stocks of the late 90s launched the market into outer space, the wise men of trade just shook their heads, sat tight and waited for the rough reentry they knew was inevitable. Greedy became fearful in a very short time.

This has a familiar ring. The real estate and lending greed of ’04 and 05’ has turned to a fearful cancer that is metastasizing throughout the economy.

Right now others, actually most, are fearful. Is it time to be greedy? No crystal ball on my desk, but I have noticed the sniffing sounds of capable investors. They haven’t cracked their piggy banks yet, but they are positioning themselves with market trends and other information. They will be many steps ahead when the media lets everyone know that it is OK to buy real estate again.

In the same vein, the pent up demand of second home purchasers and retirees will over flow soon. Those who have worked for 40 years to tee it up or land a 30 lb dolphin under a bright blue Florida sky will grow impatient with a newspaper telling them to wait. My best recent successes have been vacation home buyers with their eyes on the prize and disregard for the negativity that blocks their pursuit of happiness.

My friends, a great time of year is upon us. Baseball season opens with eternal hope, the madness of college hoop culminates in a true determination of a champion and a roar is echoing from Amen Corner. The traditionally active spring and summer real estate season is not far off. Will the fear persist or is it time to get in the game?

Mike Galleher is a Broker Associate with Cobblestone Realty. Mike specializes in golf communities throughout Martin and Palm Beach County. Contact Mike at (772) 285-6637 or visit his website at www.michaelgalleher.com.

Tracking A Real Estate Investor

Not too long ago, I would have many friends, neighbors and coworkers calling me and following me to see where I would buy next. As an investor, I was always looking to see where the best “preconstruction” deals were and how I could be the first in line to get the best picks. Sometimes I would pay people to stand in line. On at least one occasion I hired someone to sleep overnight while waiting in line for the games to begin the next morning.

We began this journey at Tuscany, a subdivision in Abacoa. That was a lark. In the beginning, all I wanted was one piece of investment property. The next thing I know we had close to 50 properties. After Tuscany, the list goes something like this…Botanica, Harbour Oaks, Antigua, Traditions, Harborage, the Edge, Midtown, Martinique, Mallory Creek, Canterbury, Astor, Boca Rio and on and on we went.

I became friendly with the sales people from most of the developers and that gave me an extra advantage from time to time. At the peak of the buying frenzy, I remember going to one “lottery” and there were 4,000 people lined up at 8:00am, each holding a cashiers check for $40,000.00. We were there to get one of 120 units. Everyone was going crazy. They picked names out of a hat and I got picked early. Everyone was told that if they got picked, they would only be allowed to purchase one unit. Our sales person allowed us to buy four units without a hitch. It’s good to have contacts!

I have learned more about buying investment property in the last 5 years than what most people learn in a lifetime. I haven’t stopped buying. As a matter of fact, I’m aggressively looking for great deals today. I recently picked up three units in Jupiter, preconstruction that will not be completed until the end of this year. The great thing about these units are this…they won’t be done until the end of the year and they may be the best deals I ever made…so far.

The phone  has stopped ringing and the knocks stopped knocking. Where are all of my friends now? It’s funny how quick things change. But, investing in real estate is something only for those who have the stomach for it and in the case of the current market…deep pockets. If you believe in long term investing, you have to believe in real estate.  I’m not sure if we have hit bottom yet, but I’m not waiting to find out before I buy my next few units.

I was on the phone today negotiating with a developer for four more units. I may get lucky and pick these up to add to the portfolio, I may not. One thing is for sure, it’s a buyer’s market and I’M A BUYER!

You may not be ready to buy and that’s understandable. If you would like to follow me on my searches and purchases, let me know. I will be more than happy to let you in on my purchases. You can decide for yourself if you think I’m doing well and whether or not you would follow. Give me a call or send a quick e-mail and I will fill you in on my latest buys.

Whether you decide to rent or buy, always consult the advice of a Realtor®.  You will want a Realtor with strong negotiating skills backed with a long history of buying experience.  A Realtor® who can put his money where his mouth is.

Happy hunting and e-mail me to hear about my investment picks.

Trump Says Now Is When Fortunes Are Made In Real Estate

Donald Trump sat down Thursday night with Jim Cramer of Mad Money (see video) to discuss the current economy. Although the discussion covered a variety of economic topics, what was most appealing to me was his thoughts on real estate. For quite some time now we have been advising our clients that the time to buy is now. In his interview with Cramer, Trump confirmed our advice and said, “…now is when fortunes are made in real estate.”

Now, that is not to say that everyone is interested in making a fortune. But, everyone wants to get a good deal. Remember, getting a good deal doesn’t mean waiting until the market has bottomed out. As I have said before, no one knows when that will be. Just know when you have a good deal in front of you and take advantage of it. There are good deals out there now.

We know that Fed Chair, Bernanke, is expected to lower interest rates again at the end of the month. Yesterday, President Bush announced a $140 billion stimulus package will be formulated to ward of a recession. Both are positive signs that our economy will improve and the housing market will benefit from it. All these efforts will provide a window of opportunity for attractive housing prices before prices begin to climb again due to consumer demands. Interestingly enough, Trump, who has investments throughout the nation, sees that the only two places in the nation doing well are Manhattan and our Palm Beach. We live in a unique area that does not follow the nation when it comes to the housing market.

As Trump stated, you have to find the right deal and the right place. We mentioned in a previous posting that developers are providing great incentives to purchase a home now (see Buying a Resale Home vs. Buying a New Home). We have a strong knowledge base of residential and investment opportunities in the area. Contact Cobblestone Realty for a qualified Realtor® to help you through the buying process.