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Jacksonville, Florida Investment Property

March 8, 2010 by Marco Santarelli

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 investment properties 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 real estate investment for novice as well as seasoned investors.

Download the Free Investment Report here: Jacksonville Investment Property

Filed Under: Real Estate Investing, Real Estate Investments Tagged With: Florida Foreclosures, Florida Investment Property, Florida Real Estate, Jacksonville Foreclosures, Jacksonville Investment Property, Real Estate Investing, Real Estate Investment, Refurbished Foreclosures

Where's Housing Headed? Follow Rents

February 17, 2010 by Marco Santarelli

It may not be the most widespread measure of housing prices, but if you want to follow a powerful driver, look at rents.

Specifically, it's the rents Americans pay on condos, apartments or houses that are about the same size, and share the same neighborhood as your ranch or colonial, that in the end determine what your house is worth.

"If you look at the trend in rents to see where housing prices are headed, you're looking at the right measure," says Yale economist Robert Shiller.

In recent reports, Deutsche Bank demonstrates how steady or even falling rents have pulled down housing prices, to the point where in many markets it costs about the same amount to own as to lease. That's a golden mean that America hasn't seen in almost a decade. The DB research also offers convincing evidence that the wrenching adjustment in housing prices is finished for much of the nation, with a bit more pain to come in selected areas.

Before we get to the numbers, let's examine why rents exercise a kind of gravitational pull over home prices.

[Read more…]

Filed Under: Economy, Growth Markets, Housing Market, Real Estate Investing Tagged With: housing forecast, Housing Market, housing outlook, Housing Prices, Real Estate Investing, rents

The LLC-IRA for Real Estate Investing

February 3, 2010 by Marco Santarelli

By now I am sure you've heard that it is legal, permissible, and profitable to invest in real estate using your self-directed IRA, SEP, or Roth IRA. If you've been using this technique, you know the drawbacks – delays in funding, fees from your custodian, potential lawsuits against your IRA.

Well, there's a solution… the LLC-IRA.

Instead of investing directly from your IRA, we set up a single-member LLC that is owned by your IRA. Your IRA account is the sole member of the LLC. The LLC is a legal entity that has powers and protections that are not possessed by any individual or by any regular IRA.

The combination of the self-directed IRA custodian and the LLC produces great results. This is an entirely new type of LLC, not your run-of-the-mill LLC you may have done before. It generally requires an attorney to draft the operating agreement and provide an opinion letter to your IRA custodian. If the LLC operating agreement is improperly drafted, the entire LLC-IRA may be disqualified and taxed.

Lawsuit Protection of Your IRA Account

[Read more…]

Filed Under: Asset Protection, Real Estate Investing Tagged With: Asset Protection, IRA, LLC-IRA, Real Estate Investing, self-directed IRA

FHA's Gone Nuts!

February 1, 2010 by Marco Santarelli

The FHA has gone crazy, making sweeping new changes in several policies. You've got to keep these in mind when clients consider FHA loans.  Here are some of the most extreme changes:

  • Raised up-front costs for insurance
  • TRIPLE down-payment requirements
  • Cut seller concessions by HALF!

The government hopes the new policies will help the organization better handle risk. And they've got every reason to be nervous. 9% of all loans that the FHA insures are past due. FHA claims have been skyrocketing with the organization paying out of its capital reserves.

30% of all new loans (and 20% of refinances) are backed by the FHA. This is a 1,000 percent
increase over 2006. This seems like shaky ground for the company. The FHA is hoping to scale back to pre-crisis times and minimize their exposure.

[Read more…]

Filed Under: Financing, Real Estate Investing Tagged With: FHA, Mortgage Loans, Real Estate Investing

Ben Bernanke: "Dumbass of the Decade?"

January 22, 2010 by Marco Santarelli

Ben Bernanke, "Time Magazine’s Man of the Year".

How about “Dumbass of the Decade?”

You just can’t make this stuff up! This choice by Time Magazine displays the collusion between the government and the main stream media. Bernanke as "Person of the Year" is almost as bad as President Obama receiving the Nobel Peace Prize.

I believe in the next year or so it will become apparent to all the "sheeple" out there, who just gobble up all the BS from the main stream media as the truth, that Ben Bernanke is actually "Dumbass of the Decade" instead of "Man of the Year" when everyone realizes what he actually did with our money. The only true way to find out what he did is to audit the Fed. Unfortunately, if the Fed were audited today we would probably have another stock market crash when everyone realizes where all the money went to.

The Dumbass Bernanke Timeline:

[Read more…]

Filed Under: Economy Tagged With: Ben Bernanke, Economy, Fannie Mae, Federal Reserve, Freddie Mac, Man of the Year, Real Estate Investing, Time Magazine

No Money Down Technique: Owner Financing

January 20, 2010 by Marco Santarelli

Owner financing is the most common way to buy a property with "no money down".  Instead of getting cash at closing, the seller agrees to finance all or some part of the purchase price. What this means is the owner of the property will act as a bank and lend the buyer all or part of the money needed to purchase the property.

It is estimated that nearly 35% of all the properties in the United States are owned free and clear (no mortgage financing).  A surprising number of those owners would be willing to finance all or part of the purchase price as a mortgage and take payments over an agreed upon period of time.

Generally, you will be getting a second mortgage from the seller.  That means you will get the majority of your financing (the first mortgage) from a primary financing source like a bank.  The seller would provide most or all of the balance in the form of a second mortgage.

There are four types of owner financing to that you could ask for:

[Read more…]

Filed Under: Financing, Real Estate Investing Tagged With: creative financing, no down payment, nothing down, owner financing, Real Estate Investing, seller financing, zero down

20 Tips for a Positive New Year

January 5, 2010 by Marco Santarelli

Amidst all the difficulties we hear each day in the media about the economy, we must remember that there still are opportunities out there.

Here are 20 tips for a positive new year:

1. Stay Positive. You can listen to the cynics and doubters and believe that success is impossible or you can know that with faith and an optimistic attitude all things are possible.

2. When you wake up in the morning complete the following statement: My purpose is _______________________.

3. Instead of being disappointed about where you are, think optimistically about where you are going.

4. Take a morning walk of gratitude. It will create a fertile mind ready for success.

5. Eat breakfast like a king, lunch like a prince and dinner like a college kid with a maxed out charge card.

6. Transform adversity into success by deciding that change is not your enemy but your friend. In the challenge discover the opportunity.

7. Make a difference in the lives of others.

[Read more…]

Filed Under: Real Estate Investing Tagged With: new year, positive tips, Real Estate Investing

The U.S. Housing Market's False Bottom

January 1, 2010 by Marco Santarelli

Existing home sales surprised the markets by rising 7.4% to an annual rate of 6.54 million units in November, the highest since February 2007, according to the National Association of Realtors (NAR). That's only 10% below the all-time peak in 2005.

What's more is that house prices, as measured by the S&P/Case-Shiller 20-City Home Price Index, rose for the fourth consecutive month in September before stabilizing in October when prices were flat.

The NAR is inevitably convinced that the worst is over and that housing is due for a rapid recovery, and that home prices will take out 2006's peaks some time in 2011 or 2012.

Not so fast, guys!

The recovery in housing has been boosted by just about every artificial means imaginable:

  • Interest rates have been kept historically low at 0% – 0.25% for a very long time.
  • Fannie Mae and Freddie Mac, the bankrupt behemoths of housing finance, have been bailed out with what amounts to a blank check from taxpayers.
  • The Federal Housing Agency (FHA) went on making mortgages with 3% down payments when nobody else was, thus very likely landing taxpayers with another bill for some large fraction of $1 trillion.
  • And the government has been handing out cash subsidies for refinancing houses that were about to be repossessed and $8,000 subsidies for first time buyers – now $6,500 for all homebuyers.

Of course it looks like the housing market has recovered! The question is what happens when some of these subsidies are taken away?   [Read more…]

Filed Under: Economy, Housing Market, Real Estate Investing Tagged With: Economy, Housing Market, Housing Starts, Real Estate Economics, Real Estate Investing, Real Estate Market

The Quick and Expected Climb to 6% Mortgage Rates

December 28, 2009 by Marco Santarelli

Mortgage rates have been steadily climbing, from a low of 4.5% around November 27, 2009 to above 5% on December 22, 2009.  For the past two months I've been warning that this will eventually happen.  It's not because the economy is recovering; it isn't recovering.  The reason mortgage rates will rise to 6% or above, sooner rather than later is because that is the "natural" market.

About a year ago, the Federal Reserve announced a $1.25 Trillion mortgage rates subsidy, by purchasing mortgage-backed securities in the open market, through March, 2010.  Right before the subsidy was announced, mortgage rates were at or above 6%.  The subsidy was referred to as Bernanke's "nuclear option" meaning he was using an extraordinary monetary stimulus to keep mortgage rates artificially low.

One year and 12 months into the 15-month game, we're at $1.07 Trillion spent on this open market MBS purchase program.  This means that the Fed still has about $150 Billion to spend in three months, so mortgage rates should stay around 5%, right?  After all, the Fed only spent $80 billion/month and they have at least 2 months of money left.

Markets are discounting mechanisms meaning that traders anticipate how potent the Fed can be.  The Fed is just about out of bullets and MBS traders know it.  Let me try to give you an example of what the Fed did by recanting the explanation I gave, to a Del Mar Realtor, on the beach this summer.

[Read more…]

Filed Under: Financing, Real Estate Investing Tagged With: Financing, mortgage rates, Real Estate Investing

Government Handcuffs Real Estate Investors

December 24, 2009 by Marco Santarelli

Leave it to the government to take a crippled housing market (which they helped destroy) and make it worse by prolonging its recovery.

Regulators have taken a loose and passive role watching the housing bubble inflate.  Now, true to their nature, regulators are making the problem worse with their slow response and lack of real-world solutions.

Real estate investors, in my opinion, have been unfairly squeezed by the ever tightening underwriting guidelines.  We are dealing with larger down payments, higher credit scores, larger cash reserves, and lower debt-to-income ratios.

As a real estate investor, Fannie Mae and Freddie Mac require you to have a bullet proof credit profile to even be considered for financing. When you consider that investors put up a larger down payment than most home buyers, require better credit, and typically research and buy investment property with a cash-on-cash return, lenders and regulators should be more willing to finance these solid transactions. They would also help solve the housing crisis by reducing the excess foreclosure inventory sought by rehabbers and wholesalers.

[Read more…]

Filed Under: Financing, Housing Market, Real Estate Investments Tagged With: Fannie Mae, FHA, Financing, Freddie Mac, Housing Market, mortgages, Real Estate Investing

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