“Get Off Your Butt and go Buy a House.”  This is a statement I had heard years ago from an old friend when I was complaining about being a broke struggling want to be investor, so I listened to her and did it. That was back in the late 90’s and it was a good ride for many years.  But the last few years have been tough on a lot of real estate investors, me included.  Many of us had to hunker down, retrench and then recover from our battle wounds.  The length of recover was/is directly proportional to the magnitude of your original symptoms.  Some people unfortunately didn’t have the financial or emotional strength to weather the storm which I completely understand as I was almost one of them.  But now it is time to look forward and plan for the future rather than having to deal with repercussions from the past. 

I understand that there will still be a few things we all need to deal with from the past few years as we move forward, but move forward we must, and this is the year to do it.  Even though last year was a relatively good year for real estate investing, it was still a tough year for many investors because of all the competition and the lack of inventory on the market.  I personally struggled finding rehabs as well.  Between my partner and me, we looked at over 400 properties, make close to 200 offers and only got one MLS offer accepted.  Looking back, off all the properties that we made offers on that sold, they were all in multiple offer situations.  Even though we had plenty of cash to buy and always offered quick closings without contingencies, we were always out bid with very similar offers.  Many of those other properties that didn’t sell are still on the market and still overpriced.  Read More...

Beginning on January 1, 2013, a new real estate capital gains tax will take effect to pay for Obama Care. When Obama Care was passed back on March 23, 2010, one of the funding measures was to take from Medicare.

“Bet you didn’t know that, did you?”

So how are they going to recover those costs for Medicare that they stole for Obama Care? Simply increase taxes on real estate and other interest and dividends. This new 3.8% tax is expected to raise $210 billion over the next 10 years.

The new 3.8% Tax Rate applies to:

• Individuals with adjusted gross income (AGI) above $200,000
• Couples filing a joint return with more than $250,000 AGI

Types of Income:

• • Interest, dividends, rents (less expenses), capital gains (less capital losses)

The new tax applies to the LESSER of:

• Investment income amount
• Excess of AGI over the $200,000 or $250,000 amount Read More...

When I first started real estate investing back in the early 1990’s, it was a struggle to find good training for beginners.  So I eventually got my real estate license and through marketing, I found a few local and successful investors who took me under their wings and that is where I got most of my training, but it was still very limited, because those investors only did one thing, but they were good at it.  However, for me to get out on my own and do things their way would require me to have a rich uncle who died and left me a fortune to invest with.  But I didn’t have a rich uncle so I had to learn something different.

That is when I started looking for alternative training sources, and in my state, there was no local resource.  That is when I started seeing a rise in infomercials and I started buying their training courses, and I got upsold to their seminar, and then their coaching programs.  And slowly, I started to do a few deals that I never even knew could be done before I bought those courses.  I started creating seller carry back notes, selling those notes to raise the down payments.  We did substitutions of collateral, wrap around mortgages and then I learned how to buy pre-foreclosures.  I was doing short sales for years before the term short sale was first used outside of the loss mitigation departments.  I was rehabbing and then I learned how to Wholesale, which I said couldn’t be done, until I bought a course on wholesaling and I made it work J

I learned all that because of infomercials.  However, these days, our inbox is loaded with infomercials.  And finding resources to learn real estate investing is easier than ever before, thanks to the internet, emails and webinars.  It seems like no matter where you turn, there is another infomercial in your inbox, on your smart phone, on the TV and everywhere you look. Read More...

We knew this was coming, just a couple of weeks ago, BoA (Bank of America) sent out a letter to 1,000 customers who are currently in default offering them the option to rent the property back from BoA at fair market rent if they simply deed the property back to BoA in lieu of a foreclosure. This will only add to the currently unknown number of properties in the Shadow Inventory.

On Thursday April 5, 2012 the Federal Reserve issued a policy statement on the rental of REO’s.

The general policy of the Federal Reserve is that banking organizations should make good-faith efforts to dispose of OREO properties at the earliest practicable date. Consistent with this policy, in light of the extraordinary market conditions that currently prevail, banking organizations may rent residential OREO properties (within statutory and regulatory holding period limits) without having to demonstrate continuous active marketing of the property, provided that suitable policies and procedures are followed. Under these conditions and circumstances, banking organizations would not contravene supervisory expectations that they show “good-faith efforts” to dispose of OREO by renting the property within the applicable holding period. Moreover, to the extent that OREO rental properties meet the definition of community development under the Community Reinvestment Act (CRA) regulations, they would receive favorable CRA consideration. In all respects, banking organizations that rent OREO properties are expected to comply with all applicable federal, state, and local statutes and regulations.

http://www.federalreserve.gov/newsevents/press/bcreg/bcreg20120405a1.pdf

I just wonder if the banks are going to have to follow all the local rental guidelines as the rest of us have to follow. And what kind of shape will these properties be in when they finally make it back on the market, if they ever do?