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HUD properties are available all over the United States, and make great investments for anybody that is interested. These homes often get a bad rap for being in bad condition, but in all actuality they are not any worse than other foreclosed homes that are available. Just like anything else, there are some HUD properties that are in good condition, and some that are in need of repairs. It is simply a matter of how well the past owner cared for the home.

HUD properties are homes that had loans which were insured by the Department of Housing and Urban Development (HUD). But when the owner fails to live up to the financial obligations that are expected, the bank then takes over the home and it becomes an HUD property. At this point, the Department of Housing and Urban Development is in charge of repaying the lender any money that they lost on the deal. So as you can see, the Department of Housing and Urban Development sticks their neck on the line when they insure the loans on these homes; if the owner doesn’t pay, they are stuck with owing money to the lender.

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Bizjournals recently analyzed private-sector employment patterns in America’s major metropolitan areas using data from the past five years. Using a nine-part formula, with data compiled since 2003 by the U.S. Bureau of Labor Statistics, they analyzed employment trends in the nation’s 100 largest labor markets.

According to the report, these are the top 10 labor markets in the country:

1. Houston, TX
2. Austin, TX
3. Dallas-Fort Worth, TX
4. Raleigh, N.C.
5. Seattle, WA
6. San Antonio, TX
7. Charlotte, NC
8. Oklahoma City, OK
9. Durham, N.C.
10. Salt Lake City, UT

It’s interesting to note that Texas has four of the hottest jobs markets in the country.

And once again, last place belongs to Detroit which has ranked as the coldest job market in America for the past two years. The biggest problem remains Detroit’s heavy reliance on domestic automakers, resulting in a loss of 30,800 jobs since mid-2007.

We just announced our latest real estate investment opportunity located in Ocean Springs, Mississippi.  (Ocean Springs Investment Duplexes)

This one happens to be very unique because of the Small Rental Assistance Program (SRAP).  The SRAP program can provide you $73,000 of free government money to purchase your real estate investment.  With this investment you end up gaining over $73,000 of instant equity!  What better way to quickly increase your net worth.

Visit our website and download the free Research Report for complete details, or just click here:  Ocean Springs Investment Duplexes.

People.

The U.S. Census indicates that our population is increasing by approximately three million people each year. All those people will need a place to live, work and shop. So there will continue to be demand for housing and that growth will continue to provide opportunities for real estate investors.

The primary factor driving real estate appreciation is migration. When you have more people moving into an area than those moving out (or passing away), you drive up demand which will ultimately increase home values.

But what drives migration?

Jobs! The largest determinant of migration is job growth. People go where the jobs are, and retailers go where the people are.
Demand for housing will continue, the question is where?

Even though U.S. job growth has been down recently, Norada’s goal is to find where job growth is up. So we begin by identifying markets with solid job growth and narrow our focus to neighborhoods that provide solid real estate investment opportunities.

Hurricane Katrina was our nation’s worst natural disaster – referred to as the “100 Year Storm”.  It destroyed 64,000 homes and 47,000 rental units.  But it also may have provided us with one of the greatest investment opportunity of our lifetime.

Prior to hurricane Katrina, the Mississippi Gulf Coast real estate market was showing significant strength due to the expanding casino market, expanding defense industry and baby-boomers looking for more affordable Gulf Coast living.  In many respects it offered people a similar but more affordable lifestyle than Florida, at a substantially lower cost.

Following the devastation of Katrina, many construction firms concentrated on the areas needing immediate clean up and repair work.  The Governor of Mississippi then announced that there was an urgent need for 100,000 new affordable homes to be built within the following 12 months.  But the true rebuilding of single family homes in the area has only recently commenced.  There were over 100,000 people living in FEMA trailers.  Today 30,000 of those people still live in trailers, and another 40,000 families are living with friends and family due to the severe housing shortage.

Other factors contributing to the demand for housing include the job growth from larger employers such as the Kessler Air Force Base, the Stennis Space Center expansion, the growing aerospace corridor, shipbuilding, growing international trade zones, and the overall Mississippi business climate.

Additionally, Mississippi changed its gaming laws to allow casinos to build 800 feet onshore.  Many of the local builders were given lucrative construction contracts to repair and rebuild casinos.  Contractors were hired to work around the clock to meet tight deadlines on getting the casinos up and running.  Today the Mississippi gulf coast is the second largest gaming destination in the USA next to Las Vegas.

Recent economic studies show that the Gulf Coast area is recovering.  Statewide, gross state product and employment have surpassed pre-Katrina levels and a reconstruction boom is anticipated for the next five years.  Post Katrina employment growth in the state more than offset jobs that were lost due to Katrina.  Retail sales in the twelve months after Katrina are 19% above pre-storm levels, indicating further strengthening in the economy.

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Real estate is the most powerful way to build wealth, and more people have become millionaires through real estate than any other means.  Despite the obvious need to save for retirement, a recent Wall Street Journal article indicated that a startling 95% of Americans will face financial difficulties at retirement!

Of course, you have several options for your retirement and other savings, but most of these options pale in comparison to real estate.  Consider options like savings accounts, CDs, bonds, and money market accounts.  These are safe options, but you certainly won’t reach a goal of building significant wealth through these means.  For the most part, these options will barely outpace inflation.  Think of it.  How many millionaires do you know who have become wealthy by investing in savings accounts?  The stock market can bring you some interesting returns, but it can also lead to some big losses.  You have very little control over the companies you invest in, and there aren’t significant tax advantages to owning stock.

Historically, real estate has provided investors with a stronger return than other options.  Consider the growth of the median price of a home from 1950 to 2007 (57 years):

Click to enlarge.

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eppraisal.com released their National Market Analysis Report for the three months ending August 2008. Of the 188 market areas tracked across the U.S., 43.6 percent show a decline in median home values, which is up from 32.4 percent from the previous three months. This ends the upward trend from the last three reports where the number of markets showing an increase in median home values was on the rise.

Most markets in the report are showing signs of leveling out or increasing values, with California being an exception. California again tops the bottom of the list with 27 of the 28 markets tracked by eppraisal.com showing declining median home values. Chico, CA is the only market that is showing signs of rebounding (see figure below). For this report Chico, CA, saw an increase of 1.70 percent to a median sales price of $245,000.

Six California markets saw double digit declines: Madera down 10 percent, Bakersfield down 10.7 percent, Riverside-San Bernardino down 11.1 percent, Modesto down 11.3 percent, Salinas down 14.3 percent, and Merced down 11.5 percent.

Markets in North Carolina, South Carolina, Ohio, and Oregon continue to gain in value and continue to show signs of a changing market. For example, the Raleigh-Cary, NC, Florence, SC, and the Dayton, OH, markets all saw median home value increases of over five percent. Raleigh-Cary, NC, increased by 8.1 percent to $200,000, Florence, SC, increased by 8.7 percent to $106,000, and Dayton, OH, increased by 10.6 percent to $110,000.

Texas continues to hold on to the postitive trend while Florida starts to dip back into negative waters. In the last report 11 of the 20 areas tracked in Florida by eppraisal.com showed positive increases in median values. This month the number of Florida markets showing increases in home values is down to six: Fort Walton Beach-Destin up 9.7 percent to $203,000, Palm Coast up 8 percent to $175,000, Panama City up 6.7 percent to $176,000, Palm Bay-Melbourne up 5.7 percent to $156,000, West Palm-Boca Raton up 5.6 percent to $285,000 and Jacksonville up 1.7 percent to $183,900. Texas shows the opposite with seven of the 11 areas tracked by eppraisal.com showing increases in median values. At the top of the list sits McAllen-Edinburg with an increase of 7 percent to $115,875, Waco with an increase of 6 percent to 119,621, and Midland with an increase of 4 percent to $172,500.

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Real estate has been regarded as one of the safest investments for quite some time.  However, despite the relative safety of real estate investments, there is always the possibility that the real estate market can fall just like any other investment.

Over the long term, real estate remains relatively safe simply due to the fact that the population of the world continues to increase while land is a limited resource.  When there is an occasional downturn in the real estate market, it is important to recognize certain strategies which can be used in order to keep a real estate investment from becoming a complete loss.

The first thought many people have when they realize the market has turned down is to attempt to sell the property as quickly as possible before the market gets worse.  In reality, most investors have found that it is often better if they can hold onto the property and ride out the market downturn.  While it is possible the market might dip lower before it rebounds, historically real estate markets always come back.

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In some of the worst housing markets in the country, deflation has reached double-digit proportions.  While housing woes have spread around the country, California appears to be poised to rank among the worse.  One of the primary reasons for this is the fact that in the last few quarters California has experienced the largest rate of deflating home prices.  In fact, home prices in California have fallen to levels that have been unprecedented.

Miami, Florida has also proven to be a difficult market at the moment.  The weak mortgage market and record high rates of foreclosures have led to declining home values as well.  In fact, Miami has been among the worst home markets in the country for two years running. The condo boom in Miami just a few years ago has further fueled the problems that have now spiraled into a massive real estate bust.

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This may be the most amazing buyer’s market in decades!

Think about it.  Interest rates are at historic lows.  Housing inventories are at 20-year highs.  Nationally, housing prices have dropped 16.3% since last year.  Sellers of every kinds (home owners, investors, builders, and developers) are motivated to sell their property to liquidate or stay liquid in these tough economic times.

I’m sure most of you have heard these stats before:  Only 2% of retirees will be financially independent by age 65, while the other 98% rely on family, the government or a job to get by financially.

If you want to make a fortune in real estate, and I’m talking about millions of dollars, then now is the time to buy!  Forget about the uncertainties of the stock market and worrying about a recession.  Now is the time to position yourself for real wealth simply by buying real estate in growth markets around the country.

If you’re not sure how to get started then call me.  I will help point you in the right direction.

Real estate has always been the fastest and safest investment vehicle to acquire wealth and reach millionaire status.  But without a down payment your real estate investment goals will be difficult to achieve.

Every year that you don’t invest will cost you money in lost opportunity.  So where do you get your down payment?  How do you do it?    Continue reading »

Back in 1999, Fannie Mae introduced a pilot program that lowered the credit requirements on loans that it would purchase from banks and lending institutions.  The program was is intended, in part, to increase the number of minority and low income home owners who tend to have lower credit ratings than non-Hispanic whites.

The pilot program started with 24 banks in 15 markets and expanded nationwide in less than one year.  However, even back in September 1999 there was concern that Fannie Mae, a government-subsidized corporation, could run into trouble in an economic downturn.  And if that happened it would prompt a government rescue similar to that of the savings and loan industry in the 1980’s.

With the recent problems in the financial markets and the government’s proposed $700 Billion bailout package, it looks like history may be repeating itself like it did with the savings and loan crisis of the 80’s.

What can you do as a real estate investor today?  Well, if you have good credit and the funds to invest, now is a good time to find all kinds of great real estate deals coupled with low interest rate financing.  If you’ve been sitting on the fence then take action today.

If you stop and think about it, it was the housing market collapse that pulled these large financial institutions down over the last several weeks.

Fannie Mae and Freddie Mac owned or guaranteed one-half of the $12 Trillion mortgage market.  Lehman Brothers had over $60 Billion in mortgage related assets on its books.

This has all led to a credit bubble burst in the shadow of the housing “bubble”.  So what happens if credit tightens even more because money isn’t available to the financial system?  Simply put, we may see house prices fall even further in most parts of the country because those who want to buy won’t be able to.

If the housing market doesn’t stabilize, then the financial market won’t either.  Are we talking a year or two from now?  There is strong evidence that the worst hasn’t even happened yet – particularly in states like California and Florida.  You can expect to see banks taking back and unloading a lot of inventory over the next twelve months or more.

In the meantime, focus your real estate investing in markets that have strong economic fundamentals to maximize your short and long term appreciation and overall return on investment.

In just the past week the US experienced the largest bankruptcy filing in history, the stock market fell over 500 points, the largest drop since the markets reopened after September 11, 2001, and recovered almost as much with the government’s announcement for a federal bailout.

Lehman Brothers, a company that has been around for over 100 years and survived the Great Depression, is one of the latest in a series of unprecedented implosions in the financial sector.  The magnitude of the Lehman Brothers collapse dwarfs the combined failure of WorldCom and Enron by several times.

Other casualties include IndyMac, Bear Stearns, the Freddie Mac & Fannie Mae bail out by the federal government, CountryWide’s likely buyout by Bank of America, and now Merrill Lynch which may layoff up to half of its 60,000 employees. Continue reading »

Last month resales jumped 3.1% to the highest level in half a year.  Additionally, new home sales jumped 2.1% according to the Commerce Department.  This came as a mild surprise to Wall Street.

Resales were up all around with the West leading the country with a  solid 9.7% increase.  Following that was the Northeast with a 6% gain, the Midwest with a 1% gain and the south with a minor drop of 0.5%.

New home sales showed a similar pattern with the Northeast gaining a 39% increase, the West with a 10% increase and the Midwest with an 8.2% jump.  The south had a drop in new home sales with a 2.5% drop.

Can this be another sign of a market turnaround?  Although this is very good news, we must keep some facts in perspective.  A large number of these sales come from first time home buyers and real estate investors sitting on the fence waiting for a clear signal that prices may have bottomed.

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Setting the right rent can be one of the most difficult areas for many people who are investing in rental property.  If your property rents out in no time, it could be an indication that you are not charging enough rent.  On the other hand, if your property seems to take a long time to rent out, it could be a clear indication that your rent is too high.  So, how do you go about setting a rental rate that is in line with the current market?

One of the best places to start is the local newspaper.  It is imperative that you do some research to find out what rent prices are driving the local market. Location is the most important factor in determining rental rates. For example, a three bedroom, one bath home in one part of town may rent for $1,100 a month while a similar property on the opposite side of town may only be able to draw $900 per month.

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The ultimate goal of investing in rental property is to turn a profit.  To ensure that you achieve that goal it is essential that you follow several critical guidelines.

First, always make sure that you check tenant references.  This can be a burdensome step and many landlords overlook it because they feel as though they have good instinct when they meet with the tenant.  But not checking references can lead to a number of problems later on.  You will uncover a wealth of information about potential problems before you rent to a prospective tenant.

Second, make sure you have everything in writing.  This is to protect your rights as a landlord as well as the rights of your tenants.  Everything from the code of conduct you expect your tenants to abide by while renting your property to the rental application itself must be in writing.

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As a real estate investor, you can help maximize your profits by knowing the liquidity of a given real estate market. By knowing the liquidity of a market, you will better understand that market and therefore be able to take advantage of the various buying strategies afforded by it.

One of the measurements frequently used to gauge the liquidity of a given market is the absorption rate. This is basically the rate in which a specific segment of a real estate market sells in a given time frame. These segments are usually categorized by price range but may also be categorized by property type.

The easiest way to understand absorption is to put it in more tangible terms and measure it in “Months of Inventory”. In other words, we take the number of active listings and divide it by the total number of sold transactions within the same month to give us the months of inventory.

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As the housing market continues to decline in areas around the country, especially Florida and California, and with the threat of a recession looming like a dark cloud overhead, Texas’ economy and housing market remains strong.

According to numbers released by the U.S. Census Bureau, eight out of the 10 fastest-growing metropolitan areas in the U.S. are in the South, and the South also accounted for more than half of the 50 fastest growing regions.

Dr. James Gaines, a research economist at the Real Estate Center at Texas A&M University said, “From 2000 to 2007, 3 million people moved to Texas, a 14.6 percent jump in the population, making Texas the fastest growing state in the country.”

“In the next 25 years we’ll add another 13.6 million people, that’s the equivalent of another Metroplex, metropolitan Houston and metropolitan San Antonio with enough left over to add another Corpus Christi.”, he said.

Dallas/Fort Worth drew in more people than any other metropolitan area in 2007.  The population there increased by 162,250 between July 1, 2006, and July 1, 2007, according to a new U.S. Census Bureau report.  Houston, Atlanta, and Phoenix also witnessed a swell by more than 100,000 people each.

With its affordable housing, low cost of living and cost of doing business, rising employment opportunities and attractive lifestyle, more people than ever before are being drawn to Dallas.  Continue reading »

With interest rates still at historic lows, and investment opportunities in single family homes abundant, 2008 may one of the best years to invest in 30 years.

Even if prices drop a little more within the next twelve months, you may still be getting a great deal over the long term given the low interest rates which may not be around in the years to come.

It is best to stick to well-located detached single family homes in well researched markets that offer good prospects for growth and resale down the road. Middle of the road, bread-and-butter homes might be best in most cases for attracting your largest resale market.

Duplexes also make for smart investments but remember they are a little more difficult to sell because your typical buyer will probably be another investor.

And finally, avoid condos since you lack the control you have in single family units. Condos also require extra due diligence to make sure that you are not buying from speculators or developers at prices above market value or where there is excess inventory for sale.