New City Investment Solutions, LLC

Monday January 4, 2010

Philadelphia Business Journal

Cash is and will be king for 2010. With banks still lagging and hesitating on providing financing, having cash will be the difference between getting deals done or not. The next two articles outline why banks are still slow to come around.

http://philadelphia.bizjournals.com/philadelphia/stories/2010/01/04/story11.html?b=1262581200%5E2666081&ana=e_vert

http://philadelphia.bizjournals.com/philadelphia/stories/2010/01/04/story1.html?b=1262581200%5E2665401&ana=e_vert

Although the residential housing market still has a way to go. With low interest rates, an $8,000 tax credit and prices still on the cheap, you can still find a great opportunity to be a homeowner. But know and understand the risks.

http://philadelphia.bizjournals.com/philadelphia/stories/2010/01/04/story10.html?b=1262581200%5E2666011&ana=e_vert

Tuesday October 20, 2009

Money Magazine (October 2009)
5 Things You Need to Know About--- FHA Loans - Beth Braverman

Important information for all potential homeowners. If you are looking to buy your first home, you need to be familiar with FHA loans - it might be your only way to get an affordable mortgage this year.

More people than ever are using FHA loans (was 3% now 25% of all new mortgages). It's the only loan in town that will allow you to put down less than 10% on a house. (You can put as little as 3.5%)
FHA loans used to only be available to low income borrowers but today there is no limit on what you can make in order to qualify. They also raised the amount that you can borrow and it changes based on the area (for example you can borrow more in expensive areas like New York or California).
If you plan on getting a FHA loan, know that the appraisal process is extremely strict. All required repairs have to be fixed prior to closing and FHA appraisals remain for six months so if you get a low appraisal and the deal doesn't go through, you're stuck with it.
There are some added fees and costs when getting an FHA loan but considering the big picture, it can still save you money overall.
People never wanted an FHA loan because they took forever to close. Mountains of paperwork made closings more difficult than conventional loans. But more recently they have streamlined the process and now it only takes a few days longer than conventional loans.

Tuesday August 25, 2009

Entrepreneur Magazine (August 2009)
Can your business still land a loan? -- Carol Tice

A solid article about how the lending standards have changed over the last 12 months (but that doesn't surprise anyone who's been alive since last summer). Here's what did get my attention and something you should know if you need funding for your company.

Top Bank Lenders for small businesses since October 2008.

1.  Wells Fargo & Co.			$353M
2.  U.S. Bank				$181M
3.  Wachovia Bank			$94.7M
4.  Huntington Bancshares Inc.		$90.4M
5.  TD Banknorth Inc.			$88.5M
6.  PNC Financial Services Group	$85.3M
7.  Compass Bancshares Inc.		$83.7M
8.  Temecula Valley Bank		$76.4M
9.  Live Oak Banking Co.		$69.9M
10. Banco Popular North America Inc.	$67.8M

Monday August 10, 2009

Money Magazine (August 2009)
5 Things You Need to Know about Getting a Fair Appraisal

One major change since the market crash is how appraisals are ordered. Before, lenders were able to use their own appraisers (effectively giving sellers a bit more control) when doing deals. But now, lenders must use an independent appraiser because people felt that lender-controlled appraisers drove up the value of the properties. According to Money Magazine here are the 5 things you need to know about this change.

New rules don't guarantee accuracy. Because an appraiser is randomly selected, he or she may not know the area and can provide an appraisal that is too low.
Finding out how much your house is worth on your own, is worth the effort. Ask a realtor to get the most recent comparable sales in the area. That way you have a gauge on what you can sell your house for in the event of a low appraisal.
Curb Appeal! Appraisers are human beings so if your grass isn't mowed and that front window has a crack in it, it will affect the appraisal negatively. Do your best to increase your home's curb appeal.
If you have special amenities or hidden values (such as newer piping), make sure you point it out to the appraiser so he or she can factor it into their paperwork.
If you are unhappy with the value, you can fight back. Ask for a copy of the appraisal and make sure there aren't any errors. If there is an error and the appraiser is unwilling to comply then you can complain to the Real Estate Appraisal Board.

When it comes to selling your home, you cannot afford to have your appraisal come in too low. So stay on top of it at every step and make sure you are being treated fairly.

Tuesday August 5, 2008

The New York Times
At Freddie Mac, Chief Discarded Warning Signs - Charles Duhigg

The Chief Executive of Freddie Mac revealed that in 2004 he sent a memo predicting that the intake of all of these riskier loans will not only end up hurting the company but the country as a whole. He claims that pressures from shareholders and from congress to buy more loans from lower-income families forced them into these bad decisions. Many however, are now calling for these executives' jobs for knowingly putting people at great risk. The debate as to who is to blame for this housing crisis continues and will continue for a long time. The important thing for you as an investor to understand is that during a "boom" everyone is susceptible to let greed influence their decision making. Just because a bank is willing to give you a 100% interest-only loan, it doesn't mean that it is in your best interest as a buyer. No matter what the markets are doing, you have to make sure that you are always making the best and smartest business decisions.

Monday June 17, 2008

Money Magazine

Each year Money magazine does an annual report on the current real estate market. If your local newsstand gets Money Magazine, I suggest you pick up this month's issue to get all of the details. I also suggest getting a subscription to this magazine as it is an excellent source for information on personal finance. Here are some of the highlights of this year's report:

Philly is Strong!

Despite the average one year price change for homes in the United States is -8.9%, Philadelphia actually rose by 1.3%.
The median mortgage is a smaller percentage of a homeowner's income in Philadelphia than in the rest of the country.
The foreclosure rate in Philadelphia is also lower than the national average.

If you are looking to sell but don't have to, stay put. You are competing against other sellers facing foreclosure and bank auctions where buyers can get similar properties at a discount. Wait out the storm so you can get top dollar.

If you have to sell, consider offering to pay all or part of the buyers closing costs, this will make the deal much more attractive and you can hopefully sell it faster.

Consider renting for a while before you buy. You don't want to buy a house today that will be worth less next year. Wait for the market to calm down, and then make that purchase.

However if you are going to buy, focus on areas with great schools - they typically fare better in downturns and appreciate faster.

Wednesday April 9, 2008

Yahoo! News
Bush Administration widens homeowner aid - Patrick Rucker

The housing crisis has affected banks, realtors, homeowners and investors and now it's officially causing problems in Washington. Republicans and Democrats alike have been trying to come up with a bipartisan solution to this housing crisis. There have been many proposed solutions including a freeze on adjustable interest rates that were scheduled to reset, a subsidy to banks to help write off their bad loans and even a tax credit for people who purchased foreclosed properties. In this article, the Bush administration is trying to assist banks in actually reducing the principal on certain people's loans whose homes have lost significant value. For investors, these new policies can lead to certain opportunities so remember to do your due diligence and make responsible business decisions.

Tuesday January 22, 2008

The New York Times
Feeling Misled on Home Price, Buyers Sue Agent - David Streitfeld

It's 2008 and it seems that the bad news is still coming. Since the boom, everyone is now paying the price for being greedy at the expense of integrity and better judgment. Investors and homeowners who wanted to get rich quick or buy a more extravagant home than they can afford are now paying for it by losing these properties and ruining their credit. Lenders who took advantage of uneducated buyers and gave them loans that they couldn't afford and were clearly very risky are not only being sued but their practices are now being closely observed by the federal government. Now it seems, realtors are now lying down in front of the guillotine. Realtors, who often are the only people that the buyers actually put trust in, have the obligation to look out for their best interests. However giving anyone that kind of control in a market where quick and large commissions are possible can be very dangerous. There are realtors that knowingly took advantage of buyers and literally led the sheep to slaughter. This entire boom should be a cautionary tale for those who want to get involved with real estate. No matter what the market conditions, you must always do your due diligence and make smart business decisions. There is no such thing as a free lunch.

Saturday November 10, 2007

The New York Times
A Real Estate Speculator Goes From Boom to Bust - John Leland

Another cautionary tale... What's very important to point out is that even when the market or industry that you're in is in the middle of a "boom", you still have to remain business savvy. For years people's bad "business" decisions were being masked by a booming real estate market and now that things have slowed down, these same people are now dealing with the consequences of making poor choices. For example, no matter what the market looks like, you need to calculate an exit strategy. If the bottom falls out and you are confronting your worst-case scenario (a scenario that should have already been accounted for), you need a plan to get out of trouble. Clearly the investor in this article never thought farther than the short-term. He never prepared for the possibility that housing prices might fall and he is paying for that mistake. Real estate investing is not an activity, it is a business and you must apply strict business fundamentals when making decisions. Before becoming an investor it is wise to have some type of background in business or work with a partner that does.

Monday October 1, 2007

The New York Times
Can These Mortgages Be Saved? - Gretchen Morgenson

This is a great article dealing with the many problems that face owners who are in danger of losing their homes. This article puts a spotlight on how lenders respond to this crisis. To much dismay, lenders are not working hard enough to help borrowers recover after they fall behind on their mortgages. They'll allow a homeowner to purchase a loan that could put them in trouble down the road, but they are not putting the same fervor into keeping you in your home. Don't make the mistake of thinking that your lender will have your back if you get into any trouble. At the end of the day, you have to make sure that you are making the right decision for you and your family. Don't accept your loan officer's word as gospel. Their job is to close deals and make money for their company. Your comfort and stability is not their number one priority. Read this article and approach each deal that you do with extreme caution.

Monday September 24, 2007

The New York Times
A Reality Check for Home Sellers - Austan Goolsbee

In the current declining housing market, people who overpaid for their homes thinking that prices would continue to increase are facing a problem. Do they cut their losses now and sell at the current market price, or hold on and hope that the market takes a turn? The right answer really depends on your situation. If keeping the property has become a financial burden (i.e. you've already bought your next home and you are struggling to pay two mortgages), then your best bet is to cut your losses now. Extended holding costs would eventually cut into any gains that you'd expect down the road anyway. However, if you can still hold on to your property either by staying if it's an owner-occupied or renting if its an investment property then you should hold. Then you can comfortably wait for the market to correct itself and take advantage when prices rise again. In both cases the decision must be strictly a financial one; you cannot let your emotions come into play. You must be realistic; you cannot put your house on the market for a price well above what houses are selling for. No matter how much you "think" your house is worth, no one is going to buy your house for $75,000 more than the guy around the corner. Putting a house up for sale is draining emotionally and financially so only make the decision to sell when you are prepared to close a deal at market rates.

Wednesday July 25, 2007

The New York Times
Top Lender Sees Mortgage Woes for "Good" Risks - Vikas Bajaj

Five years ago, the housing boom received credit for helping the economy; now it is perceived that the slumping market will ultimately hurt it. Countrywide, the largest mortgage lender, is seen as a microcosm for the rest of the market. So when it claimed that many "good" credit customers are defaulting on loans and that it didn't see the housing market recovering until 2009, Wall Street ran for cover. The S&P 500 had its largest single-day dip in five months and the dollar dropped to a new low against the Euro. Other major companies including Bear Sterns and Toll Brothers are joining Countrywide with a similar skeptical outlook on Real Estate. Many people on Wall Street closely associate housing with how strong the economy is and make decisions accordingly. While these affects are real and should be closely monitored, it's not nearly as "dreadful" as people would have you believe. The market only looks bad now because it's correcting itself after years of unrealistic gains and returns. These "good" credit consumers who are defaulting isn't a result of a collapsing economy but rather because they bought a home 4 years ago that they never could have afforded in the first place. They took out adjustable rate mortgages with no money down and the increase in their mortgage payment is killing them. Although Wall Street may panic, that doesn't mean that you must follow suit. Continue to make smart decisions and stick to your strategy and you can still make money in real estate.

Monday June 4, 2007

The Boston Globe
"Flip This House" star accused of fraud - Doug Gross, AP

When something looks too good to be true, chances are it is. When the housing boom was at its peak, you just couldn't avoid another story or example of how someone was just getting rich overnight. People wrote books, held seminars and sold DVD's and CD's to thousands of people trying to escape the rat race. When "Flip This House" started it was an instant hit. Viewers got a chance to see various investors make tens of thousands of dollars and they ate it up. However "blind support" of this show is quite dangerous as people's love of affluence clouds the fact that the show has no more credibility than any of the infomercials that we've seen at 3am. The producers of the show manage to squeeze an incredibly complex and difficult investing strategy into a 30 minute program. There's no way that the audience can get any educational value because there are simply too few details. The news about Sam Leccima makes it even worse. Shown on several episodes making large profits, Leccima is now being accused of fraud. Homes that he's claimed to have "flipped", he never actually owned, personal friends and family members staged as homebuyers and the "rehab" work that was done was mainly elaborate touch up jobs to look good for the cameras. (Feel free to read the article for the rest of his exploits.) The truth is, flipping property is no joke and needs to be taken very seriously. Deals take months to complete and require hours of due diligence and labor. Don't throw away your hard earned money because of what you saw on television. If it seems too easy, it probably is. You can't get rich overnight and you can't learn how to flip property on A&E.

Monday March 5, 2007

New York Times
"Mortgage Crisis Spirals, and Casualties Mount - Julie Creswell and Vikas Bajaj"

During the housing boom, many mortgage companies and brokers made countless millions selling mortgages to aspiring homeowners and investors. One of the most lucrative demographics was low income individuals with poor credit. Not able to easily obtain financing, these people were forced to accept subprime loans (loans with higher interest rates and poorer terms) of which, more than half of these loans had adjustable rates. But as the market dipped and many of these loans went into default, lenders are starting to distance themselves from the subprime market. These loan practices are now falling under federal investigation and many of these companies will go under the microscope for allegedly taking advantage of their mortgagees. The end result is that lenders will start to tighten up the requirements on mortgages and make it more difficult for people with poor credit to get loans. So make sure that you keep your credit scores as high as possible and check your credit reports frequently. Also buyers beware. Subprime lending, which looks good initially, can get you into trouble if the market value of your home drops or the terms on your loan change and your payments increase. Rather than accept terms that are below what the market is offering, be patient, work on becoming a stronger buyer and apply for a loan when you can command a more economical loan.

Monday January 8, 2007

If you haven't noticed by now, the housing "boom" is pretty much over. Therefore, 2007 will be a year of adjustments and the market correcting itself. Can you still be profitable in real estate even though the days of double-digit increases are over? The answer is an astounding yes. All the "boom" did was allow inexperienced people to make money without doing their due diligence as it was much more difficult to make mistakes. The same principles that have made real estate investors successful over the past century still apply.

For Buyers:

With housing prices continuing to fall in most areas, it is now a strong buyer's market.
Make your initial offers at least 15%-25% below the asking price. A seller is more likely to sell at a discount if he feels that his home's value is decreasing.
Flipper Alert: You will quickly find out that flipping is not the quick, get rich option that it was 5 years ago. It can still be executed but extreme caution must be taken at all times.
- Assess the fair market value (FMV) of the property and determine how long similar properties are taking to sell.
- Make sure that your total expenses (purchasing and construction) do not exceed 80% of the FMV.
- Work to sell as quickly as possible as opposed to waiting for the highest price.

For Sellers:

If you don't need to sell, don't.
Don't put too much money into new construction; you are less likely to get all of your money back for the work.
Don't be greedy. If you can sell today, do it.

If you have a "Creative Mortgage":

Now might be the time to transfer that ARM into a fixed rate mortgage. The interest rate climb is beginning to slow down and you can eliminate the risk of your monthly payments doubling when your term ends.
Be really careful before accepting a new ARM or interest-only loan. Obtaining a loan that has a short-term rate puts pressure on your property to increase in value. If you need to refinance or sell when your loan's term ends and your property is actually worth less, you can be in trouble.

If you Buy and Hold:

You might be in the best position of them all. Although prices continue to fall, it is still very expensive to purchase a home. Furthermore, people are scared to buy a home that they feel might depreciate in value. This means that they will be looking for a place to rent.
With an increase in demand, you will be able to charge higher rents and increase your monthly cash flow.

Saturday October 28, 2006

As most of us are told, our biggest investment in our lives will be the purchase of a home. However if you do not financially benefit from it, then it's just a "big" investment. For example, if your first home happens to be the dream home that you plan on living in for the rest of your life, how do you ever profit? Unless something forces you to move, most people stay in their homes for many years; earning equity but never using it to improve their lives. When a homeowner idly sits on her equity, it's called "dead equity".

With this recent real estate boom, there are many ways that we can "borrow" against our equity. Since 2000, billions of dollars worth of home equity loans and home equity lines of credit (HELOC) have been lent out. Unfortunately there isn't too much discussed of what you can do with all of that money to help yourself now!

Periodically, we at New City Investment Solutions will provide you with information and resources on how to take advantage of the equity in your home, with or without having to move.

"Get out of debt!"

It might sound strange, but you can actually get out of debt, by obtaining new debt. We live in an age where we use credit cards to buy everything. However, with that comes high-interest rate debt. In fact the average interest rate on a credit card is 15%! The same goes for when you go to purchase a car. High interest rate debt costs you thousands each year and all of this money isn't reducing your debt, it's just profit for your creditors.

There is an answer to this endless cycle of paying high-interest rates on your debt - Your Equity. You can now take out a home equity loan with an interest rate of anywhere from 6-10% and use this lump sum of money to pay back all of your credit cards and other loans. This interest rate reduction can save you money every year. This will help free up more money in your budget to help achieve your other financial goals. Also, with less of your money going to interest, more money will go towards your principle thus getting you out of debt faster. In addition, the interest that you pay on a home equity loan is 100% tax deductible. This tax break will put even more money in your pocket at the end of the year. Finally, you will improve your credit score by substituting your credit card debt for a home equity loan. The credit bureaus look more favorably upon mortgages and home equity loans than credit cards and your FICO score will reflect that. Contact your lender today to see if you can use your equity to effectively get out of debt.

Properly managing and leveraging debt can no doubt better your financial situation.

Thursday August 10, 2006

USA Today
"For some, renting makes more sense - Noelle Knox"

Is an increase in demand for renting good or bad for real estate investors? Well the answer is both. With the price of homes still extremely high in most cities and increasing interest rates, buying is becoming much more difficult for the average family. This will pose a huge problem for investors whose primary strategy is to "flip" property. With less people willing or unable to buy, selling at the highest possible price to maximize profits is unrealistic. Furthermore, this lack of demand is actually driving down the price of homes in some areas. For those investors who bought high and were hoping on appreciation, might end up losing money. On the other hand, investors who are currently holding rental properties for monthly cash flow are about to see their bottom lines increase. When buying gets too expensive, people turn to renting. Currently the median mortgage payment across the country is nearly double the median rent which means finding a nice apartment in a good neighborhood makes more financial sense. This increase in the demand for apartments will no doubt drive up the rent rates. So if you use the "buy and hold" approach, you will benefit from this latest trend. No matter the situation, you can still make money in real estate. The only thing that you will have to alter is your investment strategy.

Sunday July 30, 2006

Periodically, we at New City Investment Solutions will provide you with information and resources on how to take advantage of the equity in your home, with or without having to move.

"Invest in Paper Assets!"

I know what you are thinking. How am I going to borrow money and then invest it in the stock market? Isn't that too risky when I'm borrowing against my home? What if my portfolio loses money? This concept is not as crazy as it might originally sound. First of all, the stock market, if you invest intelligently, is not that risky. While there have been ups and downs, the stock market has averaged an 11% return since its inception. That's not bad considering it counts the great depression and the recession in the early 80's. The truth of the matter is that over the long term, the market is profitable.

So how does this relate to my equity? You can take out some of your equity and place the money in various stocks, bonds and funds. This investment strategy has some incredible benefits.

Taxes - First of all, you don't have to pay taxes on the money that you've borrowed because it is a loan. You would only be taxed on the money that you earn in interest. However this "tax-loss" will be partially offset by the "tax-gain" that you'll receive when you write-off the interest you pay back on the loan.
Accelerated Gains - When you invest in paper assets, the key term is compound interest. The more money that you have gaining interest, the larger and quicker your portfolio grows. Typically, investors put an initial deposit down and contribute monthly so it could take some time to reach an amount of $50K or $100K. With your equity, you could be earning interest on these large sums from day 1. This will significantly increase your earnings over a given time period.

The one glaring problem with this strategy is the interest that you will have to pay back on the loan. Right now with a decent credit score, you can get a home equity loan for about 6%. You can also get a low risk mutual fund that will give you returns of anywhere from 8%-12%. So let's say you find a fund that will give you a 9% return. While the 6% will take away from your earnings, getting 3% on a large sum of money that didn't come out of your pocket is still an incredible deal. And if you take into consideration that you can write-off the entire 6% interest you're paying back, your returns increase. However if the returns on your investment falls below the interest that you are borrowing then you will be losing money so make sure that you invest wisely.

Outside of your interest rate, you really need to consider the monthly payment. While this may pose a problem for some, think about it this way. Let's say you were going to contribute $300 a month towards your investment, all you need to do is borrow an amount that has a payment of $300 or less and you will not negatively affect your budget.

This strategy will work for those who have been a homeowner for a while and is a little late on retirement savings. It is also ideal for those with rental properties who would like to benefit off of their equity because they do not plan on selling in the near future. For these people, the returns are even greater because the tenants will be paying back the loan!

You can use your equity to help you achieve your financial goals, but sometimes you need to think outside of the box to do it.

Sunday June 11, 2006

Money Magazine (May 2006)
"The New Way Lenders Size You Up"

Just when you thought you've got all of the answers... they change the questions. This is how people are going to feel about their credit score when they hear about VantageScore (www.vantagescore.com). No longer will FICO be the only credit scoring system. The three credit bureaus have decided to collaborate and create a more universal scoring system - the result is VantageScore. With this new system, scores will range from 501-990 and will be broken down into grade format.

	      Grade Breakdown

	      901+	= A
	      801 - 900	= B
	      701 - 800	= C
	      601 - 700	= D
	      501 - 600	= F

This system was created to eliminate confusion amongst people who complained that they could not tell the difference between the scores of each bureau. For example, is a 700 from Equifax as risky as a 650 from TransUnion? However it will cause confusion in the beginning because a 720 FICO score will give you the best rates and products but a 720 VantageScore is considered below average.

Regardless of the scoring calculation that is being used, the fundamentals of improving and maintaining good credit will never change. Don't let this new system intimidate you, keep up that good behavior and you'll be fine.

Friday April 14, 2006

New York Newsday
"New Study: Housing Bias won't move on - Kenneth Harney"

Racism and prejudice is nothing new in America and unfortunately real estate is not exempt from these ills. A recent study surveyed 73 real estate agencies across the country to determine how realtors treated white and minority customers. One of the most disturbing results of the study revealed that white families were openly discouraged from viewing properties in Black and Latino neighborhoods despite asking to see homes in those areas. On the other hand, Black and Latino families weren't shown property in white neighborhoods even though they asked and were financially capable of affording homes there. This article is a must read.

It is very important that you know who you are working with. Real estate is a very serious business and you need to know if these people have your best interests in mind. You do not want to miss out on any opportunities because of someone's personal prejudices.

Thursday February 23, 2006

Money Magazine (February 2006)
"Four Steps to Spotless Credit - Jean Chatzky" - Associated Press

Any successful real estate investor will tell you that she has earned and saved thousands of dollars because of her good credit standing. Because real estate relies so heavily on borrowed money, having a strong credit report and score is vital when trying to secure a loan at a favorable interest rate. The following highlights some of the key points in this article that provides information about your credit.

Identity theft is real. Always make sure that you are taking the necessary steps to protect yourself and your credit.
- Use shredders
- Keep your social security number away from everyone.
If you feel that you are a victim of ID theft. Contact the credit bureau that reported it immediately and if necessary, contact the police.
The best way to track your credit is to order your free credit report each year from the three credit bureaus (Experian, Equifax & TransUnion)
- www.annualcreditreport.com is the only "free" website to get your credit report from. Other websites ask you to subscribe to additional services.
- Printing out the form and receiving your report through the mail may take a few weeks but going through the online process can get tedious and difficult if you can't remember some of the fine details from your past.
- Find out what your credit score is from www.myfico.com. You can get is for around $45
When you receive your credit report, always check it for errors
- 25% of all credit reports have errors that can deny you credit.
- Tiny errors such as typos can be fixed with a phone call or through a bureau's online service. However more serious claims should be dealt with through a certified letter.
The best way to improve your credit and maintain your current status is to continue to pay your bills on time. (Your track record impacts your credit score by 35%)
- Don't max out your credit cards - having a high debt to credit ratio will have a negative impact
- Don't close out old accounts - a long history of credit will improve your score.
- Asking for too many lines of credit can hurt your score. Translation: Don't fill out every credit card offer that you receive.
If you have a poor score and want to make a change for the better, improving your behavior is the sure fire way. However don't be afraid to ask for help from a credit counselor if you feel like you cannot handle it on your own (www.usdoj.gov/ust, www.nfcc.org)
All negative marks remain on your credit report for 7 years and a bankruptcy or a foreclosure might remain on your report for up to 10 years. However lenders consider your recent trends as a much better indicator of your credit risk. Bottom line, it's never too late to improve your credit.

Tuesday September 6, 2005

Boston Globe
"Housing Slowdown Looms" - Associated Press

The dreaded "bubble" - Many people, Boston specifically, have been scared away from real estate for fear of the bubble bursting. How concerned should we be? Before we answer that question, allow this point to be made - the media needs to sell newspapers and increase TV and radio ratings. The same media that reported the untold millions that the average Joe can make in real estate overnight is the same media that is going to scare you into believing that the sky is falling. They just want to get your attention.

With that being said, should we be concerned? The answer is, yes. When investing, you should always be conscious of industry trends and market conditions. Here's a fact, in each of the last 125 years, real estate as a whole, has appreciated. Although over that period of time, few markets did decrease but real estate is still the safest investment around. The key is to be smart. Don't follow trends. It is unrealistic to think that certain areas will continue to bring in double digit returns each year, those markets will be hit the hardest when the market changes. You want to find a stable area where consistent long-term growth is realistic. Furthermore, do not strap yourself financially buy obtaining an ARM or interest-only loan to buy a home that you cannot afford. Because if the market does dip, you could end up owing more than your home is worth. And if interest rates were to rise, your monthly payments could skyrocket. The successful investors and homeowners are the one's who take the time to find the right properties in the right areas and remain within their financial capabilities.

So read this article and others with caution. Do your due diligence. Because even if the sky is falling, people still need a place to live, which means real estate investors are still in business.

Friday August 12, 2005

Boston Herald
"Profiting from Properties" - Pat Curry

Real estate investing has become the new "in" way for people to create wealth. According to the National Association of Realtors, nearly 1/4 of all U.S. homes were sold to investors. But many people feel that because its popular, that it's easy to invest in real estate. The truth is, there are many risks involved and if you are not careful, it can turn ugly very quickly. Here are ten common mistakes novice RE investors make:

Single-family homes - Main problem, if tenant skips out... you're left with the bill. With multi-family units, if a tenant leaves, you are not out in the cold, especially if you occupy one of the units.
Emotional attachment - When investors allow their emotions to get involved, they are less likely to view the numbers objectively. This could lead to buying a property that will lose money.
Lack of Due Diligence - Research, Research and then double and triple check all of your information. A property has dozens of components, which are not always easily accessible. Missing information can end up costing investors thousands.
Expecting a great mortgage deal - the best rates and terms are typically reserved for homeowners and not investors
Not pre-screening tenants - bad tenants are impossible to deal with and even harder to evict (and more expensive), so know who you are bringing in to your property.
Breaking your own rules - Landlords who aren't consistent with their own rules leave themselves open to a myriad of problems
Long-distance investing - Especially for novices, it is not the smartest move to be too far away from your rental property. Travel is expensive and so is a property manager - they can both eat away at your profits.
Overpaying for units - if you feel uncomfortable making a very low offer, then you are not cut out to invest.
Not studying the competition - Not paying attention to how successful landlords do business is the best way to have vacant properties.
Not carrying enough insurance - If a settlement is reached and your insurance does not cover the full amount, then you become personally liable and your personal assets are then at risk.

Friday July 15, 2005

Boston Herald

Want to avoid PMI? Of course you do. PMI, which stands for Private Mortgage Insurance, is an extra expense to homeowners and investors if you are unable to come up with down payment of at least 20%. In some cases, PMI can add over $100 to your monthly payments. But recently lenders have been providing mortgage products that are designed to eliminate PMI. Basically you would get your standard first mortgage for 80% of the home's total value and the remaining 20%, which would have normally come from a down payment would be rolled into a second loan. In addition to not having to come up with thousands of dollars for a down payment, there are two additional benefits for getting a second loan on a home. The first is the lowered monthly payments. The two payments of the first mortgage and second loan are lower than the combination of the first mortgage and PMI payment. The second benefit is added tax savings. While you are not allowed to deduct PMI payments you will be able to deduct the interest payments on the second loan. There are some drawbacks to getting a second loan. Multiple closings, two monthly checks and it is more difficult to obtain a home equity loan because it would be the third loan on a property. But the pros outweigh the cons and homeowners should try and avoid PMI whenever they can.

Monday March 8, 2010

Monday January 4, 2010

Saturday December 5, 2009

Tuesday November 24, 2009

Tuesday November 10, 2009

Tuesday October 20, 2009

Wednesday October 14, 2009

Tuesday August 25, 2009

Monday August 10, 2009

Tuesday July 28, 2009

Thursday April 30, 2009

Monday April 20, 2009

Tuesday, March 5, 2009

Tuesday, February 3, 2009

Wednesday, January 28, 2009