Norada Real Estate Investments

Who Can You Trust?

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Our "favorite housing economist" Dr. Bob Shiller thinks the market (especially housing) is already overheated.  "We are in a very unusual circumstance," says Shiller, "because of the massive bailouts, the homebuyer tax credits, the Fed's purchase of mortgage-backed securities – and these things are coming to an end.  I don't trust the trend we have."

"So the question is, are we at risk for even more price increases, and another bubble?  I think we are at risk, but I'm not predicting it," says Shiller.  "I think it's more likely we don't do so well from here," Moneynews reported Shiller telling The Motley Fool.

So is that "a yes, a no, I know, or a maybe?"

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How To Find Underpriced Real Estate Deals

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In real estate, there is a saying that you don't make your money when you sell, you make your money when you buy. The name of the game is finding amazing deals and then either keeping them for the long term or turning around and flipping for a handsome profit.

Of course, if great deals were that easy to find, everybody would be doing it. The forces of supply and demand would inflate the price of properties to the point that there would be no deals left!

Naysayers claim that this is true of today's housing market. But in reality, there are endless deals to be found almost anywhere at almost anytime. Finding these deals takes experience and talent, but this is a head start for novice investors – or a refresher course for old pros.

Distressed Owners Make for Distressed Properties…

…and vice versa. What is a great deal? Quite simply, it's when you buy a property for well below its actual value and/or with favorable terms. The only way this can happen is for the seller to be ignorant of the market, completely uninterested in profit motives, or extremely motivated to sell.

Your chances of making a career out of finding homes owned by people who don't know any better or who don't care are slim, so it's best to concentrate on identifying motivated or "distressed" sellers.

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3 Specific Attacks on Real Estate Investors by the Obama Administration

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(Part 1 of 3)

Let’s get straight to the heart of it:

Attack #1: Would it bother you if you learned that the Obama administration has specifically targeted investors like you and me for massive tax hikes?  These tax hikes apply only to investors and nobody else… Because you are an investor, you have specifically been targeted by this administration for financial penalization and increased government control of your business!

Attack #2: And would it bother you if you learned that the Obama administration has written regulations that make it illegal for you to sell any of your property via seller financing without first passing a government-created test and being registered with the federal government?  That’s exactly what’s happening, and all current information suggests these new regulations will take effect on July 1, 2010. Again, because you are a real estate investor, you have specifically been targeted by this administration for financial penalization and increased government control of your business!

Attack #3: And how does it make you feel that the Democrat-controlled U.S. House of Representatives has already passed a bill that will require that every home in America – including your personal residence, and every you own or acquire in the future – will have to pass a government inspection and certification before your home can be sold to any third party?

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U.S. Housing Market Intelligence Report (April 2010)

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Categories are graded from A thru F:

Economic Growth:  D+
Spending remains high and income improved, but the unemployment level remains very high. Overall economic growth improved slightly this month, and the results for our economic growth metrics were generally positive. The revised fourth quarter GDP growth rate increased to 5.6%. The pace of job losses eased this month, and the number of mass layoff events is plummeting, but employment has still declined 1.7% year over year.

The unemployment rate was flat this month at 9.7%, but the broader measure of unemployment, the U-6, increased to 16.9%. The length of unemployment in the labor force increased to 31.2 weeks this month, reaching a record high level since the BLS began tracking the statistic in 1948. Personal income improved and has returned to positive year-over-year growth for the second time since December 2008, increasing by 2.0%. The CPI (all items) increased to 2.3% from one year ago, while the Core CPI (minus food and energy) dropped to 1.1%.

Leading Indicators:  C+

Overall leading indicators held relatively steady this month, but several individual metrics actually improved. The Leading Economic Index has increased for the past eleven consecutive months. The ECRI Leading Index – an indicator of future U.S. growth – increased 13.9% year-over-year, and has experienced positive year-over-year growth for the past 10 months. Stocks improved once again in March, and all four major indices have now experienced large positive year-over-year growth, ranging from +43% to +57%.

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How to Create Your Own "Luck"

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Are you lucky? Research shows that few people answer in the affirmative when presented with that basic question. Of course, even the most preliminary reflection would demonstrate that “luck” is highly subjective at best – yet when asked about “luck” everyone seems to have a clear idea of what it entails… and who it seems to bestow itself upon.

Upon closer inspection, it appears that those considered “lucky” by themselves and others actually share several important traits. Savvy would do well to adopt these easy to implement practices in their personal and professional lives:

1. Proximity – Like the old adage “success breeds success” it seems your mother was right. The company you keep DOES matter! Learn how to put yourself in the right place at the right time with the right people by creating opportunities to learn from others, network and form strategic relationships that create ‘win-win’ opportunities for all involved.

2. Practice – You’ve heard it before but we'll say it again…practice really does make perfect. It’s one reason we bring in experts for our webinars as well as put together all the tools you need to get started. Rather than having to start from the beginning, you have the advantage of using our experience (and practice) to jump-start your own portfolio of properties.

3. Persistence – If at first you don’t succeed – try and try again… it’s actually good advice. Most “lucky” individuals are actually highly motivated and simply don’t stop. When evaluated by their number of failures, many are not extra-ordinary whatsoever. Instead, they simply persist when others stop.

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5 Common Mistakes of New Real Estate Investors

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For new real estate investors, learning what mistakes to avoid can reduce risk and prepare you for success. Often these mistakes can be easily corrected with the right education.

"Real estate investing fever" has hit like a plague. Zillions of "newbie" investors are jumping on the bandwagon trying to make a profit after losing big in the stock market. I meet them all the time, and many are making big mistakes!

Mistake #1: Stock Market Mentality

You'd think after losing $7 trillion in the stock market, people would have learned! Nope, they are making the same mistake, which is assuming that what happened yesterday will happen tomorrow. Nine out of ten new investors I meet say they are interested in real estate because they saw someone else make money from the rapid appreciation of the market in the past.

But, buying real estate solely for short-term appreciation is often a big gamble! If you buy investment property to hold for ten years or more, chances are that you will come out on top. If you buy a property and flip it in within a year, you'll probably do fine, too. And, despite the risk, many people can intelligently time the "boom" of a local market (or subdivision within a market) and make a profit. But, if you buy a rental property for full-market price with break even or negative cash flow, you'd better have a backup plan if the market doesn't keep going up. Investing is a lot like surfing; if you don't know how to ride the wave, you can drown!

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National Housing Price Slide May Be Over

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A year after record-setting declines, the slide in national housing prices appears to be nearing an end. CoreLogic projects overall price appreciation of 4.5% over the next 12 months.

National home prices were down less than 1% in January compared to one year earlier, and down 1.9% from the previous month, according to First American CoreLogic’s monthly home price index (HPI).

The 0.7% year-over-year decline in January was better than the 3.4% decrease in December. January’s narrowed decline comes exactly one year after the CoreLogic HPI took its biggest annual decline in the 30-year history of the index.

Excluding distressed sales, prices declined 0.4% year-over-year in January, CoreLogic said. That’s better than 3.3% in December 2009.

CoreLogic projects house prices will continue to decline another 3.7% into the spring before bottoming out in April. After prices begin to stabilize, there will be a modest recovery for the balance of 2010. Excluding distressed sales, prices are projected to decreased only another 0.9%.

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Fiscal Survival of the Fittest

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Survival of the fittest applies to economics as well as biology – in fact, some would argue the concept is better applied to the financial arena than any other area of study. Unfortunately, it’s a fact few Americans want to face head on… it goes against the steady diet of “American ingenuity” and the (false) belief that any child born in the good old USA can grow up to be anything they want.  While there are exceptions to every rule, survival of the fittest is an economic trend currently undergoing the equivalent of an ice-age extinction as one era gives rise to an entirely new one. Research by consulting firm McKinsey found a few unsettling statistics that demonstrate the depth of the problem:

Over 70 percent of currently employed Americans work in jobs for which there is low or declining demand. This includes both blue collar and white collar. Competition for jobs that cannot be shipped overseas (healthcare for example) has created high competition which is driving down wages and promoting part-time, per diem, and other “job sharing” situations.

Mainstream stores are doing double-takes as consumers shift spending habits. Not only are brick and mortar stores under heavy competition from online retailers like Amazon but the bleak economy is finally taking a toll.  Violating one of the core marketing principles ‘never undercut your own product', heavy weights ranging from Proctor & Gamble to Macy's are rolling out discount versions of their more expensive popular items.  Cost of Tide got you down?  Don’t worry, you can now buy Tide Basic…a discount version.  Research shows 1/2 of Americans have already reduced spending and 1/3 plan to do so permanently with 18 percent of consumers switching from name brands to generics in the past two years alone.

So, how are Americans spending their money both today and into the near future?

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U.S. Housing Market Intelligence Report (March 2010)

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Categories are graded from A thru F:

Economic Growth: D+
Overall economic growth was about the same this month compared to last, and the results for our economic growth metrics were mixed. The revised fourth quarter GDP growth rate increased to 5.9% from the preliminary estimate of 5.7%. Much of the growth was still the result of recent government stimulus and an increase in inventories. The pace of job losses also eased this month, although in the last 12 months the U.S. has lost 3.24 million jobs, which is equal to a decline of 2.5% of the total payroll workforce. The unemployment rate remained flat this month at 9.7%, while the broader measure of unemployment, the U-6, increased to 16.8%. The length of unemployment in the labor force declined slightly to just under 30 weeks this month, yet remains the second highest month on record since the BLS began tracking the statistic in 1948. Personal income improved in January and has returned to positive year-over-year growth for the first time since December 2008, increasing by 1.1%. The CPI (all items) decreased to 2.6% from one year ago, while the Core CPI (minus food and energy) also dropped to 1.6%.

Leading Indicators: C
Overall leading indicators held relatively steady this month, but several individual metrics actually improved. The Leading Economic Index 6-month growth rate declined in January to 9.8% from 12.2% last month, and remains very high compared to history. The ECRI Leading Index – an indicator of future U.S. growth – increased in January to its highest level since May 2008. The index increased 21.5% year-over-year, and has experienced positive year-over-year growth for the past 8 months. Stocks improved in February after declining in January, and all four major indices have now experienced large positive year-over-year growth, ranging from +46% to +62%. The S&P Homebuilding Index also improved this month. The spread between corporate bonds and the 10-year treasury fell in January, declining to 160 bps after peaking at nearly 270 bps in March. Since the 10-year treasury is seen as a risk-free investment, the spread between corporate bonds and the 10-year treasury displays the perceived risk of investing in corporate bonds, which has declined recently as Wall Street has become less worried about businesses failing. According to the 4th quarter CEO Confidence Index, CEOs are now much more confident about the economy. Despite the increase, the outlook index remains lower than earlier this decade. Business credit availability remains very poor, but deteriorated at a slower rate in the first quarter of 2010.

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Jacksonville, Florida Investment Property

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Florida is back!

We just released our latest real estate investment in Jacksonville, Florida.  These are fully refurbished foreclosures within the greater Jacksonville market.  The properties are all tenant occupied and managed by a professional management firm.

The properties provide investors with a positive cash flow of $100 to $250 per month (assuming a 20% down payment), generating a cash-on-cash return of 9.4% within it's first year of operation.

Additionally, all our properties are 25% below market value.  And many are up to 30% below market value.  That is a tremendous return on your investment of 20% down.

These are 3 and 4 bedrooms single-family homes, with 2 to 3 baths, and up to 2 car garages located in desirable neighborhoods.  The fact that they are like-new and fully refurbished makes them an attractive turnkey for novice as well as seasoned investors.

Download the Free Investment Report here: Jacksonville Investment Property

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Norada Real Estate Investments 30251 Golden Lantern, Suite E-261 Laguna Niguel, CA 92677

(949) 218-6668
(800) 611-3060
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