Saturday, December 25, 2010

Merry Christmas




I just wanted to wish all the readers of Wholesale Real Estate Investing a great Christmas and happy holidays! Safe travels, Merry Christmas, and thanks for making this a great year for our blog.

Sunday, November 7, 2010

Mortgage modifications may lead to foreclosure http://ow.ly/35RNe

Monday, November 1, 2010

More About Success in Real Estate Investing

“If you don't have a competitive advantage, don't compete.”
- Jack Welch

Back in May 2010, I wrote about gaining a competitive edge in real estate investing. Today I want to share with you other attributes in developing a successful real estate investing business. You will have thousands of training, ebooks, CDs in the how to be successful in real estate investing. In my opinion the basics of real estate investing are not difficult to be taught. What it is difficult at times is how to become successful. Why is it that some investors are more successful than others and why success remains elusive for many real estate investors. Is there a secret and/or formula of doing real estate investing profitably on a consist basis?

In my opinion, the level of success of each investor boils down to their level of passion for his or her investing. This "passion" is what helps them create the competitive edge and drives them to make better decisions and in some cases be able to see what others are missing. In other words, the passion drives them into the development of a vision which in turn drives them into success.

Another attribute in conjunction with their drive is their optimistic attitude. Which it makes sense. When you are driven to accomplish a goal there is no one that can stop you. Michael Jordan is a good example of this. He became such a good player and a success because of his drive, focus, or passion. He would not be denied of his success. He would not stop. In real estate investing, You WILL be be bombarded with objections and inundated with adverse comments. Trust me on this one. People will give a thousand reasons why your idea wont work. So how can you swim yourself through these waves of negativity? Determination. without this positive attitude or determination you will sink and be dominated by fear.

Another attribute of successful business people is that they are specialists and an avid learner. See real estate investing is a broad realm, and if you pretend to be an expert on everything, you may set yourself for failure. I suggest that you focus your efforts in the area of real estate investing that are of high interest to you. For example, I have know people that are successful in low income housing. The reason, that was his passion. He determined to venture in an area that many investors would not venture to. As soon as you’ve found your niche or passion, learn as much as you can about it. Become an expert in your area. Excel where others have failed. I know this contradicts today's trainings of becoming rich without thinking. I just do not agree with that philosophy.

One area that I see missing from many of the trainings being sold today is goal setting. Real estate investing is like any other business. You must treat it like such. A business without goals has greater chances of failure than one where the owners spent time in directing the resources towards a common goal. A fool with a plan has greater chances of success than an "expert" without a plan. Can you imagine sending a football squad into the field without a plan, it is suicide. Goals are necessary in ALL business ventures. When you lack of a plan, you will definitely have no way of realizing which solution to turn when faced with a choice. It is important that your goals are specific and time-oriented and they need to be written down and measurable.

Finally, seek the help of a mentor/coach when needed. Specially if you are a beginner in this field. Ask any success athlete or business person and you will see that they will attribute their success to them. Investing is not something that you should do alone. Networking, Mastermind groups and leveraging the strengths and information of others will provide a huge the competitive edge you need to achieve your goals and attain success. Seek out local groups, join real estate associations and attend seminars and seek someone who has more experience than you and is keen to share his or her wisdom.

As you can see there is no one element to the success in real estate investing. However, most of the obstacles to achieving success are found within you, in your thought processes and attitudes. By changing your mindset, you will be able to increase your chances for success.

Saturday, October 30, 2010

America's Most Affordable Cities

Top 5 Most Affordable Cities

1. Oklahoma City, Okla.
Metropolitan Statistical Area: Oklahoma City, Okla.
Cost-of-living rank: 12
Unemployment rank: 4
Housing-costs rank: 2
2. Pittsburgh, Pa.

Metropolitan Statistical Area: Pittsburgh, Pa.
Cost-of-living rank: 6
Unemployment rank: 15
Housing-costs rank: 1
3. Buffalo, N.Y.

Metropolitan Statistical Area: Buffalo-Niagara Falls, N.Y.
Cost-of-living rank: 16
Unemployment rank: 9
Housing-costs rank: 3
4. Rochester, N.Y.

Metropolitan Statistical Area: Rochester, N.Y.
Cost-of-living rank: 25
Unemployment rank: 1
Housing-costs rank: 8
5. Nashville, Tenn

Metropolitan Statistical Area: Nashville-Davidson-Murfreesboro-Franklin, Tenn.
Cost-of-living rank: 3
Unemployment rank: 23
Housing-costs rank: 11

Source: Forbes

See the rest of the article here

Fear of Success?

Many times we come across of articles or other professionals talking about the "fear of success". You may be thinking of who can be afraid of success. Who can be afraid of achieving goals in life?

I think that what it is referred to as "fear of success" is more a fear of responsibility. See to be able to succeed it requires to work. In today's environment where people are promoting the "get rich doing nothing" philosophy, people have a real hard time with real businesses and opportunities. See to do what it takes to be successful requires work, commitment and being focused. Many translate that to hard work and pain.But what you may not realize is that responsibility can be liberating.

Create value for your business and embrace the responsibility that is required to be successful and you will become free!

Wednesday, October 27, 2010

Sucess is Difficult Without Goals

When it comes to setting goals, you will notice that it will help you choose a path for your life and to help keep your life pushing forward. You will know what you want to achieve and where you place your concentration. You will be able to spot all the things that will sidetrack you or distract you from the main goal. When you have a goal and plan, you will find that you will know when you are on tract with the goal and when you are not. When you set your goals properly, you will find it to be motivating and help you stick with the main focus. Every time you reach a goal, you will find yourself wanting to keep moving forward. You want to be able to reach for something and be truly focused on it or you’ll never reach anything. Goals help you stay on the right path and they help you stay out of trouble.

You will find that your mind is a wonderful tool and your life will be designed to reach for your dreams and live your life the way that you have designed your life. You are able to focus on what you want for your life and then when you set a clear and comprehensive goal you know that you can have such an achievement. Your achievements are marked because you worked so hard for them. When you place a goal on paper, you are able to mark a path for where you want your life to go. Then you are able to physically see that you can do whatever you need to or achieve your goal.

Who uses goals? Well, everyone uses goals to help them make it to their dreams. Businessmen and women, athletes, students and more use goals to help them make it to their dreams. Without goals, you must not have dreams because you cannot reach your dreams unless you set your goals down and a game plan. When you set goals, you are able to motivate yourself and be able to visualize who you are. You may find that you may have to do a lot of research for you to be able to set your goals properly. You are also going to have to organize your time and find some resources to help you make the most out of your life.

For you to properly set a goal, you must be specific. You need to think about all the details of your goal and what you have to do to meet your goal. You want to make sure that you have everything covered in the plan. When you aim for a goal, you will find things that will distract you. Have a plan when it comes to the distractions. Do you have a friend to help keep you on track? Do you have anyone who cares enough to help you find the path that you stray away from? Hopefully you can find a backup plan to your problems.

Why are goals so important? Goals give a person direction, and if you don’t have direction then you have no other option by to wonder. Wondering is okay when you are very young, but when it comes to being a responsible adult you are pressured by society to have goals and plan. You are expected to know what you want out of life and how to get to your life goal at a very young age. When you are twenty or three you will find yourself wondering what you want for your life. If you set a goal early, you can at least have some direction in life, but as you grow you can always change your goals to something that you want.

Sunday, October 24, 2010

MetLife says its foreclosure affidavits are accurate http://ow.ly/2YAZ6

Saturday, October 23, 2010

FREE BUSINESS PUBLICITY

It does not matter what type of business you are operating, you should strive for as much publicity for your business and your products or services, as possible. Free marketing/publicity is critical for the success and growth of your business.

Before you start with the marketing efforts, please remember that your publicity efforts should be well though out, even if they are free, to achieve maximum results. One of the most basic form of obtaining publicity is through press release. This is generally a one page story about your business, your product/service or an event/happening related to your business that is about to, or has recently occurred.

A press release, news release, media release, or press statement is a written or recorded communication directed at members of the news media for the purpose of announcing something claimed as having news value. Typically, they are mailed, faxed, or e-mailed to assignment editors at newspapers, magazines, radio stations, television stations, and/or television networks. Commercial press release distribution services, such as PRWeb, PR Newswire, CNW Group, MarketWire and Business Wire, are also used to distribute them.

When you send your press release, send a short cover letter addressed to the person you want your material to be considered by. You wont get the results you want if you send it to a general department such as advertising, circulation or business managers. Also,it wont help to mention that you are a long-time advertiser, subscriber or listener. The bottom-line is to get to the person who has the final say as to what is to be published or broadcast. Press releases should follow a proper presentation if you expect it to be used by the media. Here are some of the suggestions for press releases; it must be typed, double-spaced, and short - about a half page in total length. Here are some places where you can find help:

http://www.publicityinsider.com/release.asp
http://www.wikihow.com/Write-a-Press-Release

Choose the media best suited for your press release. Select those that carry similar write-ups on a regular basis. Always use a cover letter of some kind. It pays to call ahead to find out the name of the person you should be sending your press release to. Use the proper press release form, complete with a headline that will interest the man deciding whether or not to use your item. Also, please spell check your press release prior to sending it. Finally, w hen your item is used, send a thank you note or call the editor on the phone and thank him/her for using your press release.

Sunday, October 17, 2010

Life Mapping: A Vision of Success

Success is more than economic gains, titles, and degrees. Planning for success is about mapping out all the aspects of your life. Similar to a map, you need to define the following details: origin, destination, vehicle, backpack, landmarks, and route.

Origin: Who you are


A map has a starting point. Your origin is who you are right now. Most people when asked to introduce themselves would say, "Hi, I'm Mary and I am a 37-year old, Realtor. Well, this does not tell you about who Mary is; it only tells you her present preoccupation. To gain insights about yourself, you need to look closely at your beliefs, values, and principles aside from your economic, professional, cultural, and civil status. Moreover, you can also reflect on your experiences to give you insights on your good and not-so-good traits, skills, knowledge, strengths, and weaknesses. Upon introspection, Mary realized that she was highly motivated, generous, service-oriented, but impatient. Her inclination was in the biological-medical field. Furthermore, she believed that life must serve a purpose, and that wars were destructive to human dignity.

Destination: A vision of who you want to be

"Who do want to be?" this is your vision. Now it is important that you know yourself so that you would have a clearer idea of who you want to be; and the things you want to change whether they are attitudes, habits, or points of view. If you hardly know yourself, then your vision and targets for the future would also be unclear. Your destination should cover all the aspects of your being: the physical, emotional, intellectual, and spiritual. Continuing Mary's story, after she defined her beliefs, values, and principles in life, she decided that she wanted to have a life dedicated in serving her fellowmen.

Vehicle: Your Mission

A vehicle is the means by which you can reach your destination. It can be analogized to your mission or vocation in life. To a great extent, your mission would depend on what you know about yourself. Based on Mary's self-assessment, she decided that she was suited to become a real estate investor, and that she wanted to become one. Her chosen vocation was a real estate investing. Describing her vision-mission fully: it was to live a life dedicated to helping families achieve homeownership.

Travel Bag: Your knowledge, skills, and attitude

Food, drinks, medicines, and other traveling necessities are contained in a bag. Applying this concept to your life map, you also bring with you certain knowledge, skills, and attitudes. These determine your competence and help you in attaining your vision. Given such, there is a need for you to assess what knowledge, skills, and attitudes you have at present and what you need to gain along the way. This two-fold assessment will give you insights on your landmarks or measures of success. Mary realized that she needed to gain professional knowledge and skills on financing and taxation so that she could become a better investor. She knew that she was a bit impatient with people so she realized that this was something she wanted to change.

Landmarks and Route: S.M.A.R.T. objectives

Landmarks confirm if you are on the right track while the route determines the travel time. Thus, in planning out your life, you also need to have landmarks and a route. These landmarks are your measures of success. These measures must be specific, measurable, attainable, realistic, and time bound. Thus you cannot set two major landmarks such as earning a master's degree and a doctorate degree within a period of three years, since the minimum number of years to complete a master's degree is two years. Going back to Mary as an example, she identified the following landmarks in her life map: completing a real estate investing training course within the next 30 days; scan her real estate database for great opportunities within the next 60 days; and close her first real estate deal within the next 90 days.

Anticipate Turns, Detours, and Potholes

The purpose of your life map is to minimize hasty and spur-of-the-moment decisions that can make you lose your way. But oftentimes our plans are modified along the way due to some inconveniences, delays, and other situations beyond our control. Like in any path, there are turns, detours, and potholes thus; we must anticipate them and adjust accordingly.

Saturday, October 16, 2010

The Failed Promises of Promissory Notes

Promissory notes are promoted as safe, lucrative investments. However. many times investors are left with failed promises. Remember that when an investment sounds too good to be true, it usually is.

Promissory notes are short-term debt instruments (similar to a loan or an IOU) frequently sold by little-known or nonexistent companies which are used by a company to raise money. Typically, an investor agrees to loan money to the company for a set period of time. In exchange, the company promises to pay the investor a fixed return on his or her investment, typically principal plus annual interest. While promissory notes can be legitimate investments, those that are marketed broadly to individual investors often turn out to be scams.

Fraudsters (who may or may not be part of a bogus company) brokers persuade clients to make large investments that promise lucrative commissions. What is the catch? The brokers are generally located outside of the US, aren’t licensed to do business in the US, and lack the resources to deliver on promises. The main target for this scam are affluent seniors, but no one is immune.

What is the hook? Investors are tempted by the promise of a high, fixed-rate return (sometimes upward of 15%-30% monthly) with very little or no risk. The notes are highly attractive because the seller will falsely claim that they're “guaranteed” or “insured.” May times the fraudsters will target agents who are the ones approaching their clients to make the presentations to their clients who already have and implicit trust in them.

Red Flags: Watch out for claims “risk-free” investments and promises of fast and "guaranteed" double-digit returns, labels of “prime quality” on a start-up company’s notes, notes for a nine-month period or less, unlicensed sellers, and notes offered to the general public (most are not sold this way).

How to mitigate the risk to fall victim? Ask tough questions – and demand answers – before you consider investing in a promissory note. Be sure you understand how they work and what risks they pose. Here are some tips:

* Bear in mind that legitimate corporate promissory notes are not usually sold to the general public. Instead, they tend to be sold privately to sophisticated buyers who do their own "due diligence" or research on the company.

* Find out whether the investment is registered with the SEC or your state securities regulator – or whether it's exempt from registration. Most legitimate promissory notes can easily be verified by checking the SEC's EDGAR database or by calling your state securities regulator. If the promissory note is not registered, you'll have to do your own thorough investigation to confirm whether the company has the ability to pay its debt.

* Be skeptical if the seller tells you that the promissory note is not a security. The types of promissory notes involved in promissory note scams usually are securities and must be registered with either the SEC or your state securities regulator – or they must meet an exemption.

* Make sure the seller is properly licensed. Insurance agents can't sell securities – including promissory notes – without a securities license. Call your state securities regulator, and ask whether the person or firm is licensed to sell securities in your state and whether they have a record of complaints or fraud. You can also get this information by calling FINRA's public disclosure hotline at (800) 289-9999 or by visiting their website.

* Beware of promises of "risk free" returns. These claims are usually the bait con artists use to lure their victims. Always remember that if it sounds too good to be true, it probably is.

* Watch out for promissory notes that are supposedly "insured" or "guaranteed," especially if a foreign insurance company is involved. Be sure to call your state insurance commissioner to find out whether the foreign insurance company can legally do business in the United States.

* Compare the rate of return on the promissory note with current market rates for similar fixed-rate investments, long-term Treasury bonds, or FDIC-insured certificates of deposit. If the seller promises an above-market rate on a short-term note, proceed with caution.

If you believe you've invested in a promissory note scam, act promptly. By law, you only have a limited time to take legal action.

Contact the SEC's Office of Investor Education and Advocacy. You can send us your complaint by using our online complaint form. Or you can reach us as follows:

U.S. Securities & Exchange Commission
Office of Investor Education and Advocacy
100 F Street, N.E.
Washington, D.C. 20549-0213
Fax: (202) 772-9295

Quality Versus Quantity

Many times I have been asked about the reason why some investors become successful in real estate investing and others fail at it. One of the observations I have made is that those that are successful tend to have an area of focus. They focus on quality instead of the quantity of transactions.

When I say quality I mean the focus in the cashflow generated by transaction. This is critical when you are starting. Our resources are limited so we need to be smart about where to invest those funds. In real estate investing I suggest that you establish a target of minimum amount of cash flow you want on each property. For example you may establish a goal of $300 per month per property. Now you may say that is not enough, but remember we talking about monthly cashflow, net of all rental expenses. Therefore on a real estate transaction where you have invested $20,000, you will experience a cash-on-cash return of 18% annually, not bad.

I understand that many times investors must flip properties to generate some cash to pay off bills and to generate cashflow. However, as you develop a real estate portfolio based on quality you will generate cashflow from each property which will generate a monthly income for your family. Please remember that it is not the number of houses what is important; it is the amount of income from each property. Many times investors set up their target on the number of properties they want in their real estate portfolio, I think that is the wrong approach. Let me explain, would you rather have ten houses with $300 of cashflow per month per property or have thirty properties with $100 cashflow per month? Both portfolios have the same amount of income. However, one of this portfolios will give you the biggest bang for your buck? Which one will potentially provide you the most amount of headache in managing the properties? Which portfolio is going to have the most repairs costs?

Sunday, October 10, 2010

The Meaning of Leadership

“You cannot teach a man anything. You can only help him discover it within himself.” (Galilei, G. Coaching People, Pocket Mentor Series, Harvard Business School Press, 2006, p. 4.)

Many times we hear people talking about leadership. What exactly is leadership? What does it take to be a leader?. That is what I will attempt to answer here today.

Why are talking about leadership on a real estate investing blog? As mentioned before, real estate investing to be successful you must treat it like a business and leadership is the most important single factor in determining business success or failure. So What is Leadership? Leadership could be defined as the "process of social influence in which one person can enlist the aid and support of others in the accomplishment of a common task." (Chemers, M. M. (2002). Meta-cognitive, social, and emotional intelligence of transformational leadership: Efficacy and Effectiveness. In R. E. Riggio, S. E. Murphy, F. J. Pirozzolo (Eds.), Multiple Intelligences and Leadership.) In simple terms, leadership is the art of motivating a group of people to act towards achieving a common goal. Therefore, we could say that a leader is the person that "influences a group of people towards the achievement of a goal".

Real estate investing consist of working with other professionals and team members towards the achievement of a common goal. To be a successful real estate investor you need to be able to motivate and lead others to the achievement of a common good or plan. The subject of leadership is one that has been covered for many years and you can find thousand of books, articles and commentaries on the market offering ideas and theories on this subject. However, we cannot the importance of leadership in our businesses, leadership emerges in response to situations that require the very best you have.

The process of leadership requires the three Ps : Person, People and Purpose. The first P "Person" is the you the leader. The question is "Is leadership a position of office or authority? Or, is leadership an ability in the sense that he is a leader because he leads? Many times we confuse the role of the leader. A leader is not a tyrant, you could "lead by force", but that does not make you a leader. We may know of people who are in positions of leadership but who are not providing leadership. "Titles" and "position of office" are no guarantee of leadership. Remember that a true leader is one who goes first and leads by example, so that others are motivated to follow him. That is a basic requirement. To be a leader, a person must have a deep-rooted commitment to the goal that he will strive to achieve it even if nobody follows him!. He/she must have a clear vision of what they want.

Everyone is a potential leader, as long as they develop and execute effective leadership qualities. Here are some of the qualities that the Person must posses:

1. Integrity - Great business leadership is characterized by honesty, truthfulness, and straight dealing with every person, under all circumstances.

2. Courage - The ability to make decisions and act boldly in the face of setbacks and adversity is the key to greatness in leadership. Leadership is not
the absence of fear, but the control and mastery of fear.

3. Power - Power gravitates to the person who can use it most effectively to get the desired results. The key here is that leaders use power to advance the
interests of the organization rather than themselves.

4. Other qualities - realism, ambition, optimism, empathy, resilience, independence, emotional maturity, superb execution and foresight.

The next P is "Purpose" or Personal vision - the ability to visualize your goal as an accomplished fact; a thing already achieved.

"The very essence of leadership is that you have to have vision. You can't blow an uncertain trumpet."
Theodore M. Hesburgh


How do you become a leader with a purpose? You need guidance "Trust in the LORD with all your heart and lean not on your own understanding; in all your ways acknowledge him, and he will make your paths straight.(Prov 3:5-6). Next, is the realization that the goal cannot be achieved alone, without the help of others. The leader must integrate his (or the organization's) goal with his followers’ personal goals and then communicates this goal in such a way that they embrace it too and the goal becomes a common goal.

"The leader has to be practical and a realist, yet must talk the language of the visionary and the idealist."
Eric Hoffer


The Leader must communicate goals with "AIMS":

Achievable ... realistic yet faith stretching
Inspiring ... challenging your people to give of their best
Measurable ... quantifiable
Shared ... declaring your conviction in and commitment to the goal

The final P is "People"; To be a leader, one must have followers. To have followers, one must have their trust. What makes some individuals more effective than others as leaders? I think it can be summed up as follows:

1. Persuasion skills,

2. Leadership styles, and

3. Personal attributes of the leader.

4. Influence (a critical element of leadership - love for people). When people are convinced of your love for them and that you always have their interests upon your heart, they trust you and they will follow you up the highest mountain and into the deepest sea.

The real estate industry of today is a relatively mature industry with stable growth prospects. Real estate has emerged as an asset class of its own. Leaders of the real estate investing industry must work now in not making the mistakes of the past to prevent us from falling to the same traps and create the disasters caused. However, the recent collapse of the real estate market, thought us that the mentality of "If you build it, they will come,” will lead us to a tremendous oversupply. This coupled with unfounded lending practices caused the debacle of not just the real estate and banking industry, it almost collapsed our country. I understand that nobody wants to be responsible for moving the market out of balance, particularly in this uncertain economy,” however as leaders we must have the courage and integrity to do what is right.

This is not a complete list of the qualities of a leader. I invite you to share your thoughts about what qualities you think a leader should have.

Saturday, October 2, 2010

Colombia One of Top Hotel Investment in LATAM for 2011

As reported by the Jones Lang LaSalle hotel investment report, Bogotá, Buenos Aires, Lima and Santiago emerge as key strategic markets for Latin America in 2011. This report reveals four of the most favorable destinations for hotel investment in South America.

Bogota, Colombia surpassed Brazil, as it provides strong demand fundamentals and a favorable investment environment which is resulting in real estate opportunities. Bogotá, is experiencing growing demand for hotels and it finds itself on a solid path of recovery.

Unlike São Paulo and Santiago, Bogotá did not experience a significant amount of hotel construction during the past 15 years due to the country’s previous political instability. In addition, the stock of institutional-grade, four- and five-star hotels is expected to grow by 37 percent between now and 2012, which creates a myriad of investment opportunities, including potential conversions and management contracts.

Domestic and international hotel investors should keep Bogotá on their radar as the cities’ economic and demographic trends continue to strengthen, resulting in a number of exciting hotel investment prospects.

Credit Score Myths

As I have mentioned before, as real estate investors we must be at all times reviewing our credit scores and looking for ways to improve it. Here I share with you some of the myths and misinformation spread in the net.

1. The less credit I have the better for my credit score
2. If I lower my credit limit my credit score will increase
3. If I close my credit cards my credit score will increase
4. Keep a balance to have a good credit score
5. If I request my credit report it will hurt my score
6. I cannot get credit because I had a foreclosure or bankruptcy
7. If I pay my bills on time I will have a perfect score

In summary I will share with you how your credit score is affected:

10% Credit type (mortgage, installment, revolving, finance cards)
10% Inquiries
15% Age of the accounts
30% Outstanding balance
35% Payment history

So what do lenders look for:

1. Credit
2. Income - potential to fulfill the obligation
3. Cash in the bank - liquidity
4. Down payment

So what can you do to improve your credit score:

1. Keep credit card balances under 30% of their limits
2. Have at least 3 revolving credit lines
3. Verify the accuracy of your reported credit limits
4. Have at least 1 installment loan
5. Remove all errors from your credit report
6. Get a letter of deletion before paying a bill in collection
7. Create a restructuring plan

I hope this helps. I recommend that you seek professional help in the implementation of a debt restructuring plan. Please remember that the above suggestions are just general and specific situations may require other measures.

Saturday, September 18, 2010

Saturday, September 11, 2010

5.2% Rise in Pending Home Sales

The number of existing homes increased in the month of July. The National Association of Realtors said its seasonally adjusted index rose 5.2 percent from a month earlier to a reading of 79.4. Economists surveyed by Thomson Reuters had expected the index would fall to 74.9. The sales report was driven by a nearly 12 percent jump in the West and a more than 6 percent increase in the Northeast. Sales were up 4 percent in the Midwest and about 1 percent in the South.

Even-though mortgage rates are at or near the lowest level in many years, the economy remains weak. In addition, many home-buyers continue to be scared away by the possibility that home prices could experience a downward turn again — something that most analysts expect.

Colombia The Rising Star of South America

The Republic of Colombia located in the northwestern region of South America. It is the second largest country in South American after Brazil and the fourth largest in Latin America in economic terms. Bogotá is the capital and the official language is Spanish. Official data reveal that around 46% of the population has been estimated to live below poverty line, with about 17% classified as extremely poor.

However, the recent economic growth of this country has been quite impressive. Colombia's growth rate has been among the highest in Latin American countries. One of the most discouraging facts has been the wars between the government and the cocaine warlords. For the tranquility of the foreign investors the situation has improved tremendously over the last decade. I personally have been living in Colombia for the last three years and have found the country enchanting, the people welcoming and the opportunities are all over. Here are a couple facts about Colombia that you may find to your interest and should take into consideration in your decision to invest in this country:

* In 2006, Lonely Planet ranked Colombia among the top ten tourist destinations in the world.
* The ecotourism industry has been thriving enormously in recent times, providing indirect boost to the Colombian real estate market development and international real estate investment in Colombia.
* Colombia’s peso is one of the strongest currency in South America. The Colombian peso’s 13.3 percent rally this year against the dollar is the best performance among all currencies tracked by Bloomberg.
* Colombia’s credit rating outlook was raised to positive from stable by Moody’s, citing the government’s push to cut debt and “favorable” oil and mining production expectations, according to a statement on the company’s newswire. Moody’s rates Colombian foreign debt Ba1, one level below investment grade. This doesn’t apply to Colombia’s local- currency debt, which it grades one level higher at Baa3, Moody’s said.

This country is not perfect, it is country in the making which is the opportunity for the investors. Real estate, infrastructure, oil & gas, and mining investments require smaller entry fees which allows the risk on cash-to-cash investment to be lowered and the return to be increased. This country counts with qualified employment in most of the industries which permits the investor to minimize the learning curve. Also, this country continues to make improvements towards the foreign investment and improvement of the investment security.

We invite you to contact us, with any questions on how to invest in Colombia.

Saturday, September 4, 2010

Is The Homebuyer Tax Credit Coming Back?

The Homebuyer Tax Credit received an extension a couple of months ago, now we are wondering about the revival of this tax credit. Currently, there's no formal discussions of extending the homebuyer tax credit further. This situation comes after the statements Housing Secretary Shaun Donovan made on August 29, 2010, when he stated that housing sales figures were worse than expected. When extending the tax credit for a third time last fall, lawmakers stated that it would be the last one. However, when Mr. Donovan was asked about considering reviving the homebuyer tax credit in an attempt to improve the recent bad real estate news, Donovan said, "I think it's too early to say after one month of numbers whether the tax credit will be revived or not. All I can tell you is that we are watching very carefully." This remarks suggested that the revival of the tax credit might come back into play.

Lobbying again for the revival of the tax credit are 1)National Association of Realtors and 2) National Association of Home Builders. These industry groups who lobbied hard for its extension last fall, want to see it come back now that it's expired, the San Francisco Chronicle reported.

The biggest opposition on the three different versions of which were in place between April 9, 2008, and June 30, 2010 is worth an estimated $22 billion loss in revenue through 2019. To add to the opposition, eventhough more than 2.25 million homebuyers had claimed the credit in its various forms as of July 3, some critics say many of them would have bought a home anyway, and that the tax credit spurred only a fraction of those transactions.

Stay tuned!

Friday, September 3, 2010

New FHA Mortgagee Letter 10-29

Today was issued Mortgagee Letter 10-29. This Mortgagee Letter introduces new minimum credit scores and loan-to-value (LTV) ratio requirements for FHA-insured loans.This guidance is effective for case numbers assigned on or after October 4, 2010.

Basically, borrowers with credit scores at or above 580 are eligible for maximum financing. Those with credit scores between 500 and 579 are eligible for 90 percent LTV. Finally those with credit scores below 579 are not eligible for FHA insured mortgages.

You can find the complete Mortgagee Letter 10-29 Read more.

Saturday, August 28, 2010

Thursday, August 26, 2010

Monday, August 23, 2010

Mortgage rates still dropping, hit another low; 30-year benchmark hits 4.42 percent with 15-year at 3.90 percent
http://ow.ly/2tL1C

Sunday, August 15, 2010

10 Basic Real Estate Investment Formulas

Successful real estate investing calls for a wise apprehension of many important financial indicators and formulas. Without them, an investor cannot make wise decisions, which in turn, forbid the investor from achieving his or her investment goal, even lose income on the opportunity.

So to aid you better interpret real estate investing, I've accumulated a group of ten formulas I recommend be used by all investors. These are basic just ten basic formulas to help you in your analysis of your real estate investment.

1. Potential Gross Income (PGI) - This is the property's entire yearly income, assuming that all the space was occupied and all the rent collected. For example, assume you have a 30 unit building and each unit the rent is $1,000. The PGI = 30 units x $1,000 = $30,000.

2. Vacancy & Credit Loss - This is likely rental income lost imputable to unoccupied units or lack of rent by tenants. This is sometimes calculated as a percentage of the PGI, when preparing your projections. For example: $30,000 x .05 = $1,500 is the estimated vacancy loss. The actual vacancy loss is determined on a month to month basis. For example, the units can be rented for $1,000 and you have 3 units rented for $900 and 2 vacant units. This month Vacancy & Credit Loss is 3 units x ($1,000 - $900) + 2 units x $1,000 = $2,300.

3. Gross Operating Income (GOI) - The GOI is the potential gross income - vacancy and credit loss, plus income gained from extra sources such as coin-oprated laundry facilities.
Example: $30,000 - $2,300 + 1,000 = $28,700

4. Net Operating Income (NOI) - Net operating income is one of the most crucial calculations since it acts as a return on the purchase price of the property. It shows an objective measure of a property's income stream.
Formula: NOI = GOI - Operating Expenses (Operating expenses does not include depreciation nor debt service).
Example: $28,700 - $10,100 = $18,600

5. Gross Rent Multiplier (GRM) - It is the ratio of the price of a real estate investment to its yearly rental income before expenses:
Formula: Gross Rent Multiplier (GRM) = Sale Price / Potential Gross Income
Example: $360,000 / 30,000 = 12

The GRM is valuable for comparing and choosing investment properties where operating costs can be anticipated to be consistent across properties. We can employ this data to quickly calculate the value of comparable properties for sale.

6. Capitalization Rate ("Cap Rate") - It is the rate at which you discount future income to ascertain its present value. Capitalization rate is used to forecast the investor's potential return on his or her investment.

Formula: Net Operating Income / Value = Cap Rate
Example: $18,600 / 360,000 = 5.20%

7. Cash on Cash Return - This stands for the ratio between the property's annual cash flow (usually the first year before taxes) and the amount of the initial
capital investment (down payment, loan fees, acquisition costs).

Formula: Cash Flow before Taxes / Cash Invested = Cash on Cash
Example: $7,500 / 110,200 = 6.80%

8. Operating Expense Ratio - This renders the ratio of the property's total operating expenses to its gross operating income (GOI). The operating expense ratio establishes the portion of a property's revenue that is being used to pay maintenance and operational expenses.

Formula: Operating Expenses / Gross Operating Income = Operating Expense Ratio
Example: $10,100/ 28,700 = 48.79%

9. Debt Coverage Ratio (DCR) - This is the ratio between the property's net operating income and yearly debt service for the year. Lenders commonly ask for a DCR of 1.2 or more.

Formula: Net Operating Income / Annual Debt Service = Debt Coverage Ratio
Example: $18,600 / 15,100 = 1.23

10. Loan to Value (LTV) - This assesses what percentage of the property's appraised value is attributable to financing. A high LTV implies bigger leverage or financial risk, whereas a lower LTV means less leverage or lower financial risk.

Formula: Loan Amount / Lesser of Appraised Value or Selling Price = LTV
Example: $245,000 / 360,000 = 68.06%

I hope you find these formulas helpful in yout analysis of your real estate investments.

Saturday, July 24, 2010

China Facing Lending Concerns

Chinese banking faces concerns to recoup almost 23 % of the 7.7 trillion yuan ($1.1 trillion) they have loaned to finance local government activity infrastructure plans. Roughly half of all loans require servicing by secondary generators including sureties since the ventures can not bring forth sufficient income. The China Banking Regulatory Commission has adviced financial organizations to write off non-performing project loans by the end of this year.

Commission Chairman Liu Mingkang, enounced that borrowing by the alleged local government financing vehicles may endanger the banking system. China’s five-largest depository financial institutions, including Agricultural Bank of China Ltd., plan to raise approximately $54 billion to refill capital subsequent to the sector reached a record $1.4 trillion in credit last year. This situation resembles what the United States experienced during the period of easy money in the real estate market that culminated in the collapse of the housing market and initiated a world-wide financial crisis. The local governments arrange the funding options to finance projects such as highways and airports due to restrains on their ability to immediately borrow money. China's central government this year controlled borrowing on fear money isn’t being applied for feasible projects. It is written under the Chinese constitution that local governments cannot offer their own debt.
Many don't qualify for Obama's foreclosure prevention http://ow.ly/2g2xn

Thursday, July 15, 2010

Goldman to pay $550M to settle fraud charges; SEC had alleged firm mislead buyers of mortgage-related investments http://ow.ly/2ca07

Sunday, July 11, 2010

November 12, 1999 A Day To Remember

Many people say that history repeats itself. Obviously real estate and the financial industry are not exempt from it. November 12, 1999 is the year that initiated the big financial crisis and almost put the whole world to a halt. I know many people will tell you that it started in September 2008 when Lehman Brothers publicly announced they were folding. However, the problems started way before that.

The fall of Lehman was the result of the event of November 12, 1999. This date is when President Clinton step up, possibly against his better judgment, and sign into law the brand-new Financial Services Modernization Act (also known as Gramm-Leach-Bliley), repealing Glass-Steagall of 1933. Then less than a decade later after the signing, this new act of 1999 would be directly responsible for bringing the entire world to the brink of financial ruin.

For those of you that do not remember, the Glass-Steagall Act of 1933, was the post–Wall Street crash legislation that prevented commercial banks from merging with investment banks, thus eliminating the opportunity for the "investment guys" to get their hands on limitless supplies of depositors’ money. Glass-Steagall was nothing less than a barrier, and it stayed in place for more than sixty years, but the major U.S. banks wanted it abolished. They’d tried but failed in 1988. It would take another four years for this Depression-era legislation to come once more under attack.

In early spring of 1998, however, a Wall Street detonator exploded, sending a sharp signal that the market was willing to go it alone despite the politicians. On April 6, 1998 Citicorp announced a merger with Travelers Insurance, a large corporation that owned and controlled the investment bank Smith Barney. The merger would create a vast conglomerate involved with banking, insurance, and securities, plainly in defiance of Glass-Steagall.

The $70 billion merger between Citicorp and Travelers went right ahead regardless. The result was a banking giant, the largest financial conglomerate in the world, and it was empowered to sell securities, take deposits, make loans, underwrite stocks, sell insurance, and operate an enormous variety of financial activities, all under the name "Citigroup". The deal was obviously illegal, but Citigroup had five years to get the law changed, and they had very deep pockets.

Then in November 1999, the necessary bills were passed 54–44 in the Senate and 343–86 in the House of Representatives. The investment industry said that this time it would be different. However, we know better and there were a reason for the 1933 law to be in place to begin with. I knew that Glass-Steagall had been put in place very deliberately to protect customer bank deposits and prevent any crises from becoming interconnected and forming a house of cards
or a row of dominoes. This old law that lasted for six decades had successfully kept the dominoes apart for more than half a century after his death. However, on November 12, 1999 this all changed. The rest of the story you know it by now.

Monday, July 5, 2010

Mortgage Rates Are Down But Not Helping The Housing Market

There is a strange phenomenon occurring at the mortgage broker offices these days. Mortgage rates have sunk to levels not seen in more than a half-century, for example 4.58 percent for an average 30-year fixed loan. Yet brokers and lenders report not a flood but a trickle of customers. So What is Happening? Lending standards prevent many from refinancing, qualifying for mortgage; the famous tale of the haves and have-nots. The haves are those who stand to save money from refinancing and have the financial standing to do so. Since mortgage rates have been low for so long, most of them already have refinanced in the past 18 months. Doing so again wouldn't be worth the cost for most. For many of the homeowners who refinanced over the past two years, rates would need to drop to around 4 percent for refinancing to be financially worthwhile.

The have-nots? Those are the millions of Americans pummeled by the housing collapse. They have little or no home equity or no money for down payments. Or they lack the credit or steady income to get or refinance a mortgage. The 4.58 percent average for a 30-year fixed-rate loan last week was the lowest on records that mortgage company Freddie Mac has kept since 1971. The last time rates were lower was the 1950s, when most long-term home loans lasted just 20 or 25 years. However, mortgage lending standards have tightened so much since the financial crisis that many people with decent but not-stellar credit can't qualify. Lenders are demanding stronger credit scores and higher down payments or home equity. In other words, the pendulum has swung too far the other way. Most people in the lending industry acknowledge that lending standards were far too lax during the boom. May be the goal is to have tighter qualifications to prevent the mortgage crisis we just lived, but allowing the market to flow, in other words, the pendulum needs to come back to the middle.

Another factor that seems to affect the slower demand for new loans, is that some borrowers who do have good credit and solid jobs are still being rejected for refinanced loans. It's because their homes are worth less than they owe on their mortgage. About a quarter of American households with a mortgage are in this predicament. Blame the housing bust. It shrank home values and depleted home equity.

Home Buyer Credit Is Extended

On July 2, 2010, President Obama signed into law bills extending the closing deadline for claiming the federal homebuyer tax credit and temporarily reinstating the National Flood Insurance Program. Under HR 5623 homebuyers who were under contract by April 30 now have until Sept. 30 to close their home purchase and claim the federal homebuyer tax credit, if they meet other eligibility requirements. Real estate and lending industry groups said thousands of homebuyers would have missed the original closing deadline of June 30 because they were waiting for bank approval of short sales, or coping with other delays caused by third parties handling their closings.

Monday, June 21, 2010

China's Yuan Getting Stronger

It was announced over the weekend by China's central bank that it would loosen the yuan's peg to the dollar and allow it to gradually strengthen. This decision will have a mixed reaction on the market. In one end, it is expected to add buying power to its exploding middle class. This is a win for American electronics industry, which can sell more computersi and iPods to a hungry market. However, at the same time, it puts a squeeze on U.S. retailers like Walmart because Chinese imports suddenly cost more. The impact is so mixed the same company that seems a winner could be impacted negatively. For example, Apple can sell more iPods and iPads to China, where customers will now be able to afford more. But Apple also depends on China to manufacture many of its products, so its production costs could rise.

China's decision to allow the yuan to rise is mainly political: China was seeking to defuse complaints that it deliberately keeps its exports artificially cheap to strengthen its hand against inflation and keep its economy humming.

Winners
Big machines: From construction machinery to cars to planes, U.S. manufacturers should benefit. Automakers could earn more profit from the cars they make and sell in China.

Coal producers: Several U.S. coal companies could benefit. How much is uncertain. A stronger yuan would make that coal cheaper for China to import. China is the largest coal consumer in the world, though Australia dominates the Chinese market.

Poor countries: As pay rises in China, the production of lower-value items such as toys and textiles has already begun to shift to countries like Indonesia, Pakistan and Vietnam, economists said. A stronger yuan could accelerate that trend.

Fast food restaurants: A rising yuan should help Yum Brands Inc., which owns Taco Bell, KFC and Pizza Hut. About 10 percent of its nearly 35,000 restaurants are in China. McDonald's Corp., which has about 1,110 restaurants in China's mainland, should also benefit.

Losers
Retailers: Eight of the 10 largest importers from China are retail companies, according to Panjiva, an international trade data service. They include well-known giants like Wal-Mart Stores Inc., Lowe's Companies Inc., J.C. Penney Co. Inc. and Macy's Inc. A more expensive yuan should make Chinese-made goods sold in U.S. stores, particularly clothes, more expensive, analysts say. But Walmart and other merchants with stores in China would also benefit because their goods would be more competitively priced there.

Consumer electronics: Components for cell phones, personal computers and other consumer electronics are largely manufactured in China. So as the yuan rises in value, those parts get more expensive.

Sunday, June 20, 2010

Saturday, June 12, 2010

Lawmakers Working on Extending Homebuyer Credit

Homebuyers may get an extra three months to finish qualifying for federal tax incentives that boosted home sales this spring. Senate Majority Leader Harry Reid, D-Nev., wants to give buyers until Sept. 30 to complete their purchases and qualify for tax credits of up to $8,000.

The proposal is intended to for those who already have signed contracts to finish at the later date. Joining Sen. Reid, were Sen. Johnny Isakson, R-Ga., and Christopher Dodd, D-Conn. There is preassure from the constituents of Se. Reid who faces the highest foreclure rate in the nation. Also, the National Association of Realtors has been pushing hard in Congress for the extension.

Tax Changes Affecting Real Estate Investing

On Friday, May 28, 2010, the House of Representatives passed the American Jobs and Closing Tax Loopholes Act of 2010 (the “Act”). It is not certain when the Senate will consider the legislation. One of the changes with this new act, is the ordinary income treatment for carried interest. The proposed legislation would treat part or all of a partnership’s carried interest as regular income, as opposed to a capital gain. The legislation is primarily aimed at private equity funds and venture capitalists, but would have a huge knock-on effect on commercial real estate since many property investments are structured as LPs and LLCs. Carried interest is the portion of the venture profits paid to general partners of such structures after the property has been sold, separate from the fees the general partners earn for managing the property.

The measure is now in the Senate, where it is expected to be modified. This modification decreases the amount of carried interest that is recharacterized as ordinary income from 75 percent to 65 percent and increases the amount treated as capital gains from 25 percent to 35 percent in taxable years beginning after December 12, 2012. The change further decreases the amount of carried interest that is recharacterized as ordinary income to 55 percent and increases the amount treated as capital gains to 45 percent for gain or loss attributable to the sale of an asset which is held for 7 or more years.

Please keep in mind that eventhough most of the focus has been geared to investment funds, it impact goes beyond that. For example, it is expected to dramatically change the taxation of developers in the typical real estate operating partnership. As currently drafted, the rules may curtail the ability of real estate developers to use tax depreciation and other losses from the property and would accelerate tax on certain transfers of the Carried
Interest.

The Act is intended to be effective immediately after enactment, with income for the year of enactment allocated between the pre- and post-enactment portions of the tax year.

Monday, June 7, 2010

Saturday, May 29, 2010

Mortgage Rates Fall To Record Low

With the roller-coaster in Wall Street and the crisis in Europe has helped push mortgage rates closer to a record low. With this, we are expecting an increase in mortgage refinancing. Freddy Mac announced on May 27 that the average 30 year fixed rate loan was lowered to 4.78%. This represents the lowest rate this year and barely above the record established on December 2009 of 4.71%.

This window of opportunity is not expected to be there for long. As the confidence of investors continue to grow, they will shift money from the bond market to the stock market which will make mortgages more expensive. The Mortgage Bankers Association has announced an increase in mortgage refinance. However, many homeowners due to the collapse in home prices they bought homes during the housing boom and have little or no equity left, so they can't refinance — a problem compounded by far tighter lending standards these days.

Before you decide to refinance your mortgage you should think carefully the process and costs, since upfront costs can be high and new mortgages extend the period of indebtedness unless borrowers substitute a shorter-term loan. However, sometimes the savings can be substantial: A monthly payment of principal and interest on a $350,000 loan at 6.25% is $2,155; at 4.75% the payment is $1,826, saving nearly $4,000 a year.

Gain a Competitive Edge in Real Estate

Real estate investing success does not occur overnight. There are many factors that need to be taken into consideration for a successful real estate investing business. Real estate investing goes beyond locating for properties that are advertised at "Below Market Value" or watching for the mortgage interest rate levels. To be successful you must develop an eye and nose to detect gems that are being overlooked at the moment.

To have a successful real estate investing business you must have a plan and execute it. You must work hard and continue to improve your skill. You must stay abreast of the drivers that affect the real estate market. For example, the residential real estate market is affect by more than the interest rate. You need to take into consideration general factors such as, employment levels, income levels, interest rates, wage rates, transaction costs, and purchasing power. The relationship between national economy, regional economy and local economy should be inspected as well. This will help an investor to identify all the possible effects of all the variables on residential real estate investment.

Going beyond some of the economical factors that have an impact in real estate investing, you need to take into consideration social factors. Factors such as age distribution, crime rates, and education. You also need to think like the buyer, regardless if the buyer is another investor, rehabber or a family. Some other factors influencing the purchase of real estate are legal, political, and governmental factors. Down to the more specific factors that influence the purchase such as access, public transportation, schools, police protection, and fire protection. Also, shopping center, school, freeway, central business district, and parks must be taken into consideration.

As you can see, the purchase process is more than looking for the obvious. You must go beyond what everyone else is doing to be successful. You must have a competitive edge. As Jack Welch said "If you don't have a competitive advantage, don't compete". If you go beyond what everyone else is doing and gain a competitive advantage, then you can get one step ahead of rest people.

Thursday, May 20, 2010

Mortgage rates fall to lowest level of the year http://ow.ly/1NW5d

Wednesday, May 19, 2010

Four Tips to Improve Your Results in Real Estate Investing

As I have mentioned before, real estate investing is not complicated. It offers many great opportunities, as well as grants financial freedom to those who are determined to succeed in their chosen career path. However, to succeed as a real estate investor you have to avoid making costly mistakes that can significantly affect the way you run your business. Here we discuss four tips to help you with your real estate investing enterprise:

1. Real estate education. I am a big believer of real estate education and the results in improving our skills which will translate in higher profits and greater efficiency. Applied knowledge is power, like Napoleon Hill mentions on his famous book "Think and Grow Rich". A word of caution, avoid the notorious gurus. See the article written about real estate scammers http://tinyurl.com/37sfvjy.

2. Trusted advisor. Many real estate investors fail because they don’t recognize the importance of having the guidance of a seasoned colleague. I am not talking about the real estate marketers or "gurus" that are only there to sell you their useless crap. I am talking about a seasoned real estate investor that can partner with you and you learn how to handle real estate transactions from A to Z.

3. Buy Below Market Value. I know, you are think DAH!. You will be surprised how many real estate investors buy properties at or near market value, which does not allow them to cover any costs for improvements and the rental income wont cover their mortgage. Remember, in real estate investing you make money when you purchase a property, not when you sell them.

4. Create an investment plan. Buying properties without a plan is suicide. Take time to develop your goals you want to achieve. Develop an action plan where you list how you are going to achieve your goals.

Success in real estate is possible. It requires to have a clear vision of the direction you want to take. These tips will reduce the risks of loss in real estate investing and increase your chances of profit.

Monday, May 17, 2010

Saturday, May 15, 2010

1031 Exchange Transactions

The easiest method to begin a 1031 Exchange transaction is to contact a good Exchange Company. The information concerning the exchanger, time and place of the closings, and a copy of the contract to sell the relinquished property are the preliminary papers to start the process.

A 1031 Exchange, like any real estate transaction, involves balancing competing pressures in speed and quality. Therefore, companies in this line recognize pressures and design their service to satisfy both. Good companies manage all aspects of the exchange. They provide service that is quick, easy to use and backed by experience. In good companies, experienced attorneys are the managers. The senior staff will be rich in experience with regard to investment property transactions. The specialized team of attorneys mainly deals with more complex reverse and build-to-suit exchanges.

The main parameters that distinguish a good and bad exchange company are speed, service and the security they offer the client. Speed lies in the pace at which the company prepares the document. The documents are then sent to the closing table, allowing the seller to close and proceed with the exchange. Service is the dexterity in preparing all documents required for the exchange, including reminders of 45 and 180-day time limits and extensive complimentary consultations.

Friday, May 14, 2010

Mortgage rates sink to five-month low; National average for a 30-year fixed loan is slips slightly to 4.93 percent http://ow.ly/1LgVn

Real Estate Investing Scams and How To Detect Them

Today I will share with you my views on an unfortunate event that happens in our industry. Real estate investing is not exempt from scammers. These scammers come in different forms. These scammers have become more sophisticated in their presentations and now they take their show on the road. Do you remember the movie "Yes Man" with Jim Carrey?; lots of people crammed into a amphiteather building the tension until the presenter comes out and people explode and start screaming Yes!. They kept repeating it everytime the speaker ask them to do it and after the show is over, people leave like zombies repeating Yes!

Scammers have found new ways to motivate young and inexperienced investors into spending money in what many times are useless and outdated strategies. Many times is the same information repackaged into a different format. Many years ago I remember it was the infomercials. Now a days they come in the form of expensive investment seminars where a motivational speaker, an investment expert or even a self-made millionaire will give you advice on investing and will try and convince you to follow high risk investment strategies. Also, the internet is filled with many landing pages with free offers for you to get useless information so they can have your contact data. These free offers will then be followed by enticing offers that seem unreal on how easy is for you without knowledge and without working to become a gazillionare real estate tycoon. While investment advice can be legitimate and beneficial, it is important to look carefully at what an investment scheme or seminar is offering.

In my opinion the organizers of these seminars and real estate investment schemes make their money by charging you an attendance fees, and by selling you over-priced reports or books. They are real estate marketers more than real estate investors. Many of them are so humble that they have done the research for and bring you a list of properties ripe for the picking (ouch! many of these are their properties they are trying to sell) and you do not need to seek an independent advice. The unfortunate event here is that these scams do great harm to beginning investors, who waste hundreds of dollars on old information. What is worst, those beginners soon get discouraged and miss out on the true (and profitable) adventure of real estate investing.

The problem is not the scammer, it is us. We allow them to do this. They exist because of us. We do not want to work and become rich. We want to become experts and not have to think. We want the food already chewed so we do not have chew it ourselves. We go to 7-Eleven and other "convenience stores" and pay somewhere around 15% more for the milk than going another block to get it at a fair price.

So how can you detect a scam? Here are 10 basic points that will help you on how to spot a B.S. artist:

1. Emphasis on luxurious lifestyle. The B.S. Artists want to present a fantasy where you live in your own island and all of the money was made from real estate investing and best of all you did not have to work for it. The B.S. artists feature the imagined lifestyle of the rich in their TV ads. They also accessorize themselves with flash jewelry, rented limousines, and rented private jets. Bottom-line they imply that they have achieved great financial success. Real investors do not need to try to oversell their success.

2. The "Expert" claim. These "gurus" are self-proclaimed experts. There was a time when you needed it to prove your knowledge and experience by your actions. You earned the "expert title" and it was given to you by true independent third parties experts. Today there are real estate investment experts everywhere describing themselves as the “leading real estate expert in the United States today” and “Number One, most-sought-after...” Blah, blah, blah.

3. No Risk. Please read this carefully, there is risk on ALL investments. However, these B.S. Artist insist that they have discovered a way to defy the financial and investment laws. Real estate investing is a real investment, thus it exposed to tax, lawsuits, economical changes, etc. To be successful in real estate investing you must learn to mitigate these factors.

4. Emphasis on no-down, low-down techniques. In their fear the their victim will object to the "opportunity", they like to emphasize on the fact that their programs do not require any money from you. They like tell you that there is no risk (see point No. 3). Fundamentally, these techniques are unsound. It has been proven time over time that when you over-leverage your real estate properties you are exposing yourself to a higher risk of loss during the natural fluctuations of the market. Also, the higher the amount of the loan the more difficult it is to cover the monthly mortgage payments of the property. They will try to convenience you that the higher loan amount will generate higher interest expense which is tax deductible. This is useless if you cannot make the mortgage payments with the rental income and have to cover the deficiency with money out of you pocket.

5. Pressure to get your credit card limit raised. When you have a guru ask to raise your credit card limit, you need to be concerned. Only a scam artist will ask you to raise your credit limit and spend it in their products. They are concerned about THEIR financial success.

6. High prices. Legit real estate books should not cost more than $80 depending on whether they sell in book stores or only by mail. A legit real-estate seminars should not cost more than $500 per day. More than that, you should question the reason for the higher price and the value received. I am in favor of training and improving our skills, I think that it makes us better investors. However, we should pay a fair fee for the information.

7. Use of "Puff" Selling Words. The fraudsters will use marketing puffing words to entice you into believing that you are being offered a "secret" (which is no longer a secret after the first book is sold) or invited into an "exclusive club" making you a "perfect offer" to make "easy money" the "lazy way". This is a "risk-free" opportunity which is "bullet-proof" or what they offer is a "no brainer". The use of these type of words in their offer indicates that they are trying very hard to sell you a scam.

8. The focus is entirely on the acquisition phase of real-estate investment. Real estate investing goes beyond the acquisition phase. Real estate investing just starts at the acquisition phase. A legit "guru" will tell you how to buy, finance, renovate, manage, and sell real estate and how to avoid paying income taxes in the process.

9. Catchy title. These gurus love to award themselves titles like "Mr. Flipper", "The Millionaire Man", "The Wholesaler Lady". These are just hype! These titles prove nothing, it is just a PR title which offer no proof of its accuracy. Stay away from them.

10. Allowing Automatic debiting of your account. This is one of the strong signs that this guru is after your money. Think about it, a legitimate business is not afraid to have you reconsider whether you want to pay them monthly or annually. Customers know that if I offer a quality service and deliver what I promise I do not have to bind them, you will want to come back, you want more of what I have to offer. Illegitimate businesses fear that you think about their offer and decide against it. That’s why they want to get you to sign non-cancellable leases and “mentoring” contracts, and other documents to prevent you from looking somewhere else, after all you already spent your hard earned money with "Mr. Guru". If someone is trying to get you to agree to let them debit your account, run away.

This is a short list of warning signs that can help you detect a potential scam. I hope this information is useful to you. If you have any other ideas on how to prevent scams, please share them with the rest of the readers of this blog.

Monday, May 10, 2010

Is Fannie Mae Closing The Doors on Investors?

As you remember back in November 2009 Fannie Mae launched its "First Look initiative" Program. This program has gone thru a recent adjustment to facilitate the sale of REOs to owner-occupants and entities using public funds, such as local housing and community development agencies. According to Fannie Mae says these buyers bring permanency and stability to tenuous markets where swollen inventories of foreclosures have taken their toll.

One of the main changes is that First Look properties will now be listed on HomePath.com rather than MLS. This program has been designed to put owner-occupants in homes. This is an honorable idea, now what I wonder is that if they are trying to exclude or reduce the number of properties available to investors. For example, for the first 15 days of "Fannie Mae REO listings", only offers from owner-occupants and public entities will be considered. What I wonder is the reason to exclude the rest of the public (investors) from the bidding process. I understand their fears of the past mistakes. However, having the government now control the real estate market may be going a little too far. I agree with making corrections and legislations to prevent the past mistakes. Like history has shown us, everyone is better served by letting the forces of the market work on its own. Something that we should consider is that if an investor is willing and capable of making a higher offer, then Fannie Mae and the taxpayers would benefit by recouping more of its losses. What is next, will a governmental agency will exclude certain batch of stocks from the market for 15 days and only a certain group of buyers will be able to acquire them?

Sunday, May 9, 2010

Is This The End of Zillow?

Many of us in the real estate industry have used the services provided by Zillow.com. Now Santa Ana-based First American CoreLogic Inc. has filed a federal lawsuit against eight rivals, including the popular real estate website Zillow.com, accusing them of infringing on a 1994 automated appraisal patent, according to the lawsuit.

The seven other firms named in the suit are Fiserve Inc., which is based in Wisconsin; IntelliReal LLC, based in Denver; Interthinx Inc., based in Agoura Hills; Lender Processing Services Inc., based in Florida; Precision Appraisal Services Inc., based in New Jersey; Real Data Inc., based in Houston; and Realec Technologies Inc., also based in Houston.

Are you a user of Zillow.com? What is your opinion about these on-line valuation services?

Real Estate Investing Oppotunities in Colombia

Colombia offers more than coffee and emeralds. It also offers a wide range of real estate opportunities for investors. The options go from the caribbean coasts of Cartagena and Santa Marta to the cosmopolitan Bogota to the coffee regions of Pereira and Armenia. Colombia is trully an amazing place, it offers environments that will appeal to pretty much any taste, from urban enclaves to quiet beach towns… from highland retreats to steamy tropics . Also, Colombia offers low cost of living, inexpensive properties and a colorful and diverse culture. Unless you’ve got your heart set on snow, you’re almost certain to find your ideal spot in Colombia.

Here are a couple of points on the real estate market of Colombia:

> A 1,200-square-foot apartment in the Chapinero sector goes for $64,000.
> A 1,400-square-foot apartment in a new, exclusive condo building in the exclusive secto of Rosales was selling for $171,000.
> For $55,000 you purchase an older three-bedroom apartment in Santa Marta and for $125,000 you can buy a new beachfront condo in the 12th floor.

As a opposite to the United States and many parts of the world, the real estate market in Colombia has been solid and the rental market is strong. So whether you’re an investor, a second-home buyer, a retiree, or just someone who wants to try a new country, you will find a climate and setting in Colombia that’s just right for you.

Saturday, May 8, 2010

How Real is Virtual Real Estate Investing?

The internet and other advancements in the technology has made real estate investing simpler. Virtual real estate investing (VREI) takes the traditional concept to another level. Today, I would like to talk to you about real estate investing utilizing technology to allow you to multiply yourself and reduce costs.

Virtual real estate investing is possible, if you know how to and take it seriously. It is not a game. VREI combines the power of the internet and technology with real estate investing. The traditional real estate investing method requires that you visit several properties, screen them, listen to sellers tell you about their wonderful properties and why you should pay more for theirs, then come the several documents needed to bring the transaction into closing. With Virtual Real Estate Investing you utilize the power of the internet and technology to reduce time and costs, and promptly implement marketing techniques to advertise the properties for sale until they can be sold for a profit. With the internet it is easier and faster for investors and buyers to find each other.

Another advantage is that the internet has connected the world, paperwork no longer has to be signed in person, and buyers are not normally dead set on seeing a property first hand before they purchase. Now real estate listings do not have to be handled by agents on a local level, but rather than be bought and sold over long distances by the investors websites. This is the way to implement your wholesale business. Even though virtual real estate investing, may not be able to be implement 100% virtual, it will expedite the process of the acquisition and sale of your properties. The faster your turnaround the faster you become liquid and reduce your costs of financing your transactions. Conclusion more profit.

I encourage you to implement technology into your real estate investing business. Now a days there are many options for all budget sizes. For example, contract negotiations can occur largely via e-mail and instant message and all of the marketing for the property can be carried out via social networking and social media channels rather than through traditional marketing techniques.

To be successful in today's market you have to be on the cutting edge. Virtual real estate investing and especially virtual wholesaling is the wave of the future. Here I share a couple of resources for you that could help your business.

CRM - http://www.zoho.com

Real estate social network - http://www.real-estate-investing.com

The best part is that they are free!

Wednesday, May 5, 2010

RT @trandafirstef: The Million Dollar Bookshelf. http://dlvr.it/nBz1

Recession and Real Estate Investors

Recession can be a good opportunity for real estate investors to get a great deal on a home. The recent real estate meltdown has provided an inventory of millions of foreclosed homes and hundreds of banks and other lenders desperate for liquidity. It is possible to take possession of a foreclosed home for pennies on the dollar.

I am a believer that real estate is one of the best investments available. I am not talking about the saying "homes is my greatest investment". I am talking about real estate as a hard core and cold investment. Using real estate to build wealth. With a solid investment strategy, an investor has an opportunity in this market to build a solid real estate portfolio.

Savvy investors understand that real estate investing always carries with it inherent risks. Before you sink your hard earned capital into one of these opportunities, you should understand exactly what the investment entails. Understand the market where you are planning on investing and understand your level of risk. I always suggest that you should not invest "scared money", if you need the money to pay your next month rent or buy food; do not invest it.

In the current market we are in, you need to be prepared to wait longer to recover your investment and the credit market is tighter which may require more of your capital to be put at risk. Finally, to be able to succeed in real estate investing you must take action. So once the analysis is done, you must take action.

Five Mistakes Made in Real Estate Investing

Real estate investing can be a rewarding profession. It has been proven that wealth can be built with real estate investing. However, it has also been seen when many investors have lost their pants with real estate investing. Many of the loses can be minimized by following some basic procedures.

Here I share with you five mistakes commonly made by those that have lost in the process of real estate riches:

1. Lack of planning. This is a typical mistake made by novices. Many times investors purchase a property because "it seems like a good deal". I know many courses will sell you the idea that you do not have to think to become a real estate investor. However, I do not agree. Real estate investing like any other profitable business, requires planning. Instead of buying for the heck of buying and then developing a strategy, the investor should focus on developing a plan and gearing their purchases on the strategy developed. This will ensure that good properties matches the strategies developed.

2. Get Rich Mentality. Again many real estate investment courses will sell you the idea that you will get rich quick with real estate. I understand them, it would be hard to convience someone to buy a course where the title is "With dedication and proper planning you will get rich". You mean I have to actually work and think? Yeap. The get rich quick on real estate is only a myth and the reality is that the ones getting rich quick are the ones selling the courses.

3. Doing it alone. To become successful as a real estate investor you need to build a team of professionals. You need a power team that will assist you in the successful completion of your transactions. For example, you should consider having in your team a real estate agent, an appraiser, a home inspector, a closing attorney and a lender. Other members of your team could include insurance agent, a real estate tax accountant or attorney, and a bird dog.

4. Overpaying for a property. This is one of the reasons many real estate investors fail in this industry. You remember the old saying "You make your money when you buy, not when you sell", well it is true for real estate investing. Paying too much and locking up all the funds in the erred property deal will leave you with no money to redeem yourself.

5. Not doing your homework. This goes along with the planning mentioned above. However here is more specifically about the studying the market where you are planning to invest. Learn the basics of the market where you are planing to venture. Understand the dynamics in the area, demands, economics, etc.

By avoiding these mistakes, you will increase the chances of improving your experience in real estate investing. Like any other business, real estate investing requires preparation and dedication. I hope you find this information useful. If you have any other suggestions or comments I want to hear from you.

Friday, April 30, 2010

Is The Worst of Florida's Real Estate Crash Over?

Florida real estate experts believe the worst of the downturn is over. That's according to a quarterly survey by the University of Florida's Bergstrom Center for Real Estate Studies. The center asked appraisers, commercial real estate brokers, bankers, investors and others to take stock of the state's real estate market. Their verdict: Commercial and residential property have hit bottom.

This said, we need to be realistic in our real estate investment decisions. I do not expect an immediate bounce back in the Florida market. This state is battling record-high unemployment and tight credit that continue to hinder any recovery. This coupled with weak economy in the state, will keep increase in housing price down for a while.

The positive notes for the real estate market are:

1. Apartments. As former homeowners lose their homes to foreclosure, they need to live somewhere.
2. Life insurers and real estate investment trusts are beginning to buy investment properties again. Those real estate investors had taken a hiatus, but they have cash to spend and don't need mortgages to buy commercial properties.

Thursday, April 29, 2010

Home prices post 1st annual increase in 3 years http://ow.ly/1EXHo

Saturday, April 17, 2010

3 Steps Towards Improving Your REI Business

Many are seeking for ways to improve their real estate investing business. Here I will share with you three simple steps towards improving your real estate investing business.

1.Do not over-commit. Many, specially beginners, are guilty of this of this common mistake. Consider your budget carefully. Allow time to relax and family.

2.Take action. The faster you act, the better position you will be in. Do not commit the sin of paralysis analysis. Do not over analyze but make a lot of plans.

3.Research. Take time to research about your lender and the market you are planning to invest. Locate those financial institutions that can finance your real estate investment business. Get the financial backing under control and become knowledgeable of your local real estate market.

Action a Key Element for Success

Action is a fundamental key to all success. Many times when I have time to read the posts in real estate investing websites, such as real-estate-investing.com and realestateinvestor.com, one of the common posts I see is about how to get their business going. How do I get started?

Many beginners suffer of fear which causes them paralysis. There are many reasons for this fear, fear of failure and fear of the unknown are a couple of them. One way to address this fear, as mentioned before, is to parter up with someone else who has the financial backing and/or experience to create a stronger team.

I am believer that uncertainty will always be part of our profession. There are no guarantees of the future and it does not matter how many courses you buy, there is always uncertainty. None of the course you buy can give you 100% guarantee. If what you are looking for is a 100% guarantee that you will invest and get 200% ROI in one year, then put your money in the stock market, oops no I mean put your money in a bank account, yikes!

Let me share something with you, real estate investing is a business of taking action. Nothing happens in real estate investing, actually in any business, without taking action. Right now, I am in Colombia a foreign country with foreign rules. The only way I have been able to succeed here by taking action. I must confess, not all my deals have been profitable. However, when I add up all of my deals the results are positive.

Real estate investing is not easy. However, if you take the proper steps to mitigate the risks associated with real estate investing you increase your chances of success. The most important step you can take towards your real estate investing success is to take action. Start small, consider bird-dogging for a while until you gain enough capital and experience. The bottom-line is to take action.

Friday, April 9, 2010

30-Year Home Loan Rates Increase

30 Year home loan rates increased last week to the highest level in eight months. The home loan rate increased from 5.08 to 5.21 percent this week. In December the rates dropped to record low of 4.71 percent due to a campaign by the Federal Reserve to reduce borrowing costs for consumers. This program ended last week.

Saturday, April 3, 2010

There is reason to be concerned about a Hong Kong real estate bubble

Concern over Hong Kong real-estate bubble are warranted. Recently there has been much speculation about the price bubble in the Hong Kong residential property market. Many have wanted to brush this away. However, Hong Kong Financial Secretary John Tsang recently announced significant measures that will be taken in order to mute the real estate trading activity. Some of the measures announced will include a higher levy on luxury properties, adjustments to the rate of land auctions and tighter scrutiny on bank lending.

According to a report issued by the University of Hong Kong’s Residential Real Estate Series (HKU-REIS) indicated that, in January, the price of residential properties continued to rise increasing 1.53% since December and 29.57% since January 2009. The HKU-REIS is a report based on similar methodology to the S&P/Case-Shiller indices yet suited to the Hong Kong property market.

If you had $200,000, How would you invest it in real estate?

If you had $200,000 to invest in real estate right now, how would you go about it? Share your thoughts and advice on how would you approach real estate investing in today's market.

Wednesday, March 31, 2010

Oversight Risk Consulting Opens Office in Colombia

Oversight Risk Consulting announced today the re-opening of their office in Bogota, Colombia. Oversight specializes in security risk management, consulting and services. They see great opportunity in Colombia. The security situation continues to improve, generating greater foreign investment in a variety of sectors, from mining to tourism. The near-term outlook appears favorable.

Sunday, March 28, 2010

Foreclosures Slowing Down?

According to information released by RealtyTrac, Inc. last week, the foreclosure crisis isn't over, but the pace of growth may finally be slowing down. The report said that the number of U.S. households facing foreclosure in February grew 6 percent from the year-ago level, the smallest annual increase in four years. However, concerns remains on the hundreds of thousands of homeowners who are still being evaluated for help under loan modification programs. Many analysts say most of those borrowers will eventually lose their homes, sparking a new round of foreclosures later this year.

The report issued by RealtyTrac follows the encouraging news from the MOrtgage Bankers Association which stated that the percentage of borrowers who had missed just one payment was reduced to 3.6% in the last quarter of 2009. We must continue watching the developments in the areas of unemployment and reduced income.

The top 10 states reporting the highest levels of foreclosure:

1. Nevada
2. Arizona
3. Florida
4. California
5. Michigan
6. Utah
7. Idaho
8. Illinois
9. Georgia
10. Maryland

The top 5 metro areas reporting foreclosures are:

1. Las Vegas
2. Cape Coral-Fort Myers
3. Modesto
4. Riverside-San Bernardino-Ontario
5. Stockton

Friday, March 26, 2010

Facilitators vs Business Trusted Advisors

Here some information I want to share with you about facilitator vs business advisors. As I mentioned before, one of the aspects that will set us apart from the rest is our knlowdege foundation. We will be able to do more than the typical facilitator who only wants to make a quick buck without regards of future business or establishing a relationship with the client.

To be successful in real estate, we must be more than facilitators, me must know about the products, markets and know when is a good time to buy and why. When the clients are having difficulties in arranging their the logistics of payment, we will be able to assist them due to our understanding of financing and real estate market. We must provide solutions.

Many facilitators are mainly "order fillers". They have no idea about the property, and in most cases they cannot solve the challenges that typically accompany the real estate market. Many times the facilitators in their fear of losing their "commission" is willing to say what the clients want to hear. Many times jeopardizing not only the business relationship with the customers and with other business partners, but most importantly reputation.

In todays business environment there are many orders and offers in the internet. There are daily offers being made of properties that are being recycled from one facilitator to another. None of them have an idea about the origin of the property, margin%, room for negotiation, payment terms, quality or even if the order is still valid or outdated, etc. All they know is that they found this opportunity and they want to make a commission. In conclusion they lose respect, since they do not add value to their clients.

Trusted advisors are client advocates. They are not afraid to follow the courage of their conviction, think rationally, and maintain their discipline, even in the worst of times. They set expectations, educate their clients, and work in a collaborative fashion-always putting their clients’ interests first.

Here are some differences between facilitators and a trusted advisors:

1. Courage of conviction-Trusted advisors carefully evaluate a client’s situation and make recommendations that are in the best interests of the client, even if the client initially disagrees or wants to do something different. In contrast, a facilitator may allow or even encourage a client to make decisions that might feel good in the short run but are counterproductive long-term. They might do this out of fear of losing business or a preference for expediency. Facilitators generally do not bring discipline and rationality to the investment process, which is a big part of the value of having an advisor.

2. Stated philosophy-Trusted advisors have a clear and unwavering approach to business. They take the time to educate their clients about their approach and are willing to turn away prospective clients that are not a good fit. Facilitators, on the other hand, usually don’t have a clearly stated business philosophy. They want the flexibility of being able to offer a prospective client whatever the client is looking for. Facilitators might offer several different solutions, even if they are philosophically inconsistent with each other. As a result, they may have clients following conflicting strategies, which makes it impossible to send a consistent message to clients.

3. Coaching and Educating-Trusted advisors act as coaches for their clients. Whether it is in sports or business, the role of a coach is the same. A coach is an educator and teacher who understands the objectives and defines and implements a process to achieve them. He or she also communicates collaboratively in a team-building fashion, and provides the discipline to ensure good, long-term results. Education is also critical to a successful advisor-client relationship. Clients benefit from learning about economics, finance, and how markets work. A trusted advisor is able to facilitate substantive discussions about these and other important topics.

In conclusion, clients make smarter decisions when they have useful and timely information. Facilitators often lack the skills needed to truly educate and advise their clients, and must fall back on other means, such as persuasive sales skills, to retain client relationships. They may not be willing to spend the time, or simply may not have the knowledge, to properly educate and inform their clients. A good advisor has a high level of expertise, as well as the skills necessary to impart that knowledge to others in an effective way.

Thursday, March 25, 2010

Speeding up short sales; Government, lenders try ways to make short sales simpler and quicker http://ow.ly/1qH2V

China Warning

According to Citigroup economists, China appears to be on track for an “asset boom, bubble and bust” that may take three years to play out and probably won’t be thwarted by tighter economic policy. This process is expected to begin in the residential property market before spreading to commercial real estate and ultimately to stocks. This process may take as long as two years for the asset bubble to form and at least three years for it to burst. This is similar to what happened to the United States, United Kingdom and other developed contries recently which caused the recent major financial crisis.

We should keep a close attention to the China economy as it has signs of a potential crash in the near future. This is important as many of the current surge in prices of commodities have been dictated by the increase consumption by this nation. The question is how long will they be able to sustain this pace? Will they be able to correct the current signs and prevent what happened to the United States?

Here are couple of economic facts about China:

1. The country’s economic growth quickened to 10.7 percent last quarter, helped by a 4 trillion yuan, ($586 billion) two- year stimulus plan for railways, airports and homes. <--- This has created a huge demand for raw materials such as steel, iron, coal, cement to name a few.

2. Property prices in 70 cities climbed 10.7 percent from a year earlier in February. <--- This has created similar situations as in the United States where prices of homes had increases annually that were in double digits. This coupled with low interest rates creates a lot of movements in the financial sector and potential speculations in the housing and commercial markets. Again this increases in home valuations creates demands for new constructions as more permits are issued due to the movement created in the market, this in turn creates higher demands for similar commodities mentioned above as well as higher demand for electricity, water, etc.

3. The Shanghai Composite Index of stocks gained 80 percent last year and is valued at 32 times reported earnings, compared with 52 times at its peak in October 2007 and the Standard & Poor’s 500 Index’s 19 times. <-- Just look at what we experienced in the US right before the crash. No need to say more.

According to Citigroup economists, higher interest rates and an appreciation in the yuan are necessary to prevent the economy from overheating further. It is important to keep an eye on how the government manages the balance between the valuation of its currency, interest rates and the lending policies. We should all care about it since when the asset bubble breaks, the impact will be painful not only for China; it will have a negative ripple effect for its trading partners.