Norada Real Estate Investments

Single-Family Homes and Their Potential

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As we continue to go through Morgan Stanley's “Housing 2.0: The New Rental Paradigm” we're more confident that 2012 will be a big year for real estate investors.  For one, the financial services company boldly concludes, “…gross rents are historically attractive relative to current distressed prices. Adding to this attractiveness is the fact that multifamily data shows rents continuing to rise.”

This is a good indicator for real estate investments. Anyone who’s been active in the market clearly knows why rental properties have become precious assets among investors. And for the newbie, it isn’t that difficult to discover the logic here. A depressed housing market with very affordable properties means that demand for homes are down. This indicates that buyers opt to rent properties instead of buying a home. With this surge in rental demand, real estate investors are just as excited as everyone else who are poised to earn positive cash flows from their rental properties.

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The Great Potential of Cleveland Investment Property

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Though the current economic climate has left many people without homes and jobs, smart and determined are finding in the Cleveland housing market.  Our new is an excellent opportunity for those that want a great deal of cash-flow and long-term appreciation potential.

All properties are extensively rehabbed with up to $25,000 in work per property.  All properties are tenant occupied and managed by professional management  Properties range from 3 to 5 bedrooms, 1-3 baths, and up to 2 car garages.

Cleveland's cost of living is 15.5% lower than the U.S. average. It has also been undergoing major revitalization in all sectors.  The Economist has repeatedly voted Cleveland as one of the most livable cities, not only in the U.S., but in the world.

If you're serious about beating the hard economy and making a great investment in cash-flow real estate then you should evaluate our latest offering of .

If You're Going to Buy Investment Property, Do it Now

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It looks like the majority of U.S. housing markets have bottomed. So, if you’ve been thinking about buying , this may be the time to make your move.

When the National Association of Homebuilders released its NAHB Index for October last week, it showed a drop of one point in homebuilders’ view of the market, from 19 to 18.

The good news:  The index is at double its level from last spring – when it bottomed out at nine – meaning homebuilders see an improving market.

The bad news:  The index is based so that a reading of 50 is the “neutral market” view. That means there’s a long way to go.

30-year mortgage rates are still close to their all-time low, currently around 5.1%. But rates probably won’t remain that low for long. Building inflationary pressures and the huge U.S. budget deficit will combine to eventually push interest rates higher.

Even if house prices drop by another 10% in some markets (except in the very worst areas, I wouldn’t expect too see anymore than that), you still may end up saving more on financing costs by buying now than you would by waiting for any further declines.

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Flipping Homes No Longer Profitable, Investors Pursue A Long-Term Strategy

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Homeowners are facing an economic crunch from the housing crash, but investors often face even more severe repercussions. More than 1 in 3 foreclosures are of investment properties, and should the foreclosure epidemic worsen as forecast, that number is expected to rise as more investors walk away from mortgages.

During the real estate boom investors and speculators bought homes, fixed them up and many sold within months. But the real estate crash prevents them from doing just that. Living in a home intended to be an has become the answer for some investors, while others select to rent the property. More than 240,000 homes sit vacant nationwide, according to the U.S. Census Bureau.

A key strategy of buying a home to flip has gone by the wayside as more and more purchase properties for the long term. Just when and how long it will take to reap profits from their investments is an uncertainty with some economists saying that it could take more than 10 years for the market to become healthy enough to make a good profit.

In his book “The Millionaire Real Estate Investor”, Gary Keller, founder of Keller Williams Realty International, keeps a basic theme: “Buy real estate right, pay it down and pay it off.” The ultimate goal should be to own lots of real estate free and clear for maximum cash flow. That mantra is attracting millions of investors and wannabe investors back into the depressed housing market to invest.

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Getting Paid to Borrow Money

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It is well known that income producing real estate is one of the best investments you can make. What is less well known is that income producing real estate allows you to get paid to borrow money. At least that’s been the case historically.

The reason for this has to do with the reality of inflation. In times of inflation, your best protection against the declining value of the dollar is high quality, long-term, investment-grade, fixed-rate debt attached to a piece of income producing property. In a nutshell, the right kind of debt is good.

Here’s how it works:

Assume that you purchased a property back in 1979 and that a dollar was actually worth a full dollar ($1.00). Then, thirty years later you find that same dollar worth only $0.24 because of continued inflation (driven by the government’s absurd economic policy).

Although the overall purchasing power of the dollar has decreased over those thirty years due to inflation, the principal balance on your long-term debt is never adjusted in step with that inflation. By paying down your fixed-rate debt with continually CHEAPER DOLLARS than those you originally borrowed with, you are effectively saving yourself a lot of money each and every year.

Now, think about it another way:

Assume you purchased $1 million worth of income producing property with a combined mortgage balance of $800,000. And let’s assume that over the course of one year you didn’t pay down any principal and there was a 4 percent rate of inflation. Your loan of $800,000 would now be worth only $768,000 in terms of real dollars. That’s a reduction of $32,000 in one year!

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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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