Income properties are the best and most underutilized investment vehicle available to middle America. They are the best because they offer income, capital preservation, tax benefits and appreciation all in one comprehensive package. They are the most underutilized because regular folks don’t know where to find investment opportunities, think it’s just too hard or consider it too much hassle. When done correctly, investing in income producing real estate is a thing of beauty and I will give you 10 damn good reasons why you should own some.

1. No rollercoaster fluctuations

I’ve got nothing more to say on this except that unlike your 401(k), your investment real estate will not do this:

2. Captured Equity

Due to the combination of plentiful foreclosure inventory and motivated sellers, deals below market value are within reach. We are seeing some foreclosed properties being sold at 20-40% below their true market value. Acquiring these properties at this time would essentially capture this significant level of equity (difference between price paid and market value) that the investor would cash in on when they sell or refinance the property. This one characteristic is hard to match by any other investment vehicle outside of running a pawn shop and who wants to do that?

3. Steady Cashflow Read the rest of this entry »

Transactions involving bank foreclosures come with their own original set of difficulties, and that’s not even counting obstacles created by institutional red tape and incompetence. So it’s only natural that when Buyers are looking to purchase REO foreclosures (assets owned and  liquidated by banks), plenty of questions arise. As they should. Given that we love answering  questions, it made sense to put together a list of the 10 questions most frequently asked by home buyers and demystifying them with some straight forward, plain speak answers. So, without further ado:

Q: Where can I get a list of foreclosure properties and how much does it cost?

The Foreclosure Secret will tell you in no uncertain terms where I stand when it comes to online services pimping foreclosure lists of publicly available information. Bottom line: 99.8% of bank foreclosures are listed on the MLS by real estate agents, which means the information is available to everyone and anyone. How do you get to it? Hunt for  Houston foreclosures or search pre analyzed investment property deals.

Q: How long does it take banks to respond to an offer on a foreclosure property?

This is an answer you will hear often when dealing with banks: It Depends. Most banks will respond within 48-72 hrs but some may take as long as two weeks. Patience is definitely a virtue when dealing with this institutions. Long waiting periods stem from bank staff being slammed with a volume of properties they not accustomed to handling. Read the rest of this entry »

The benefits of purchasing and owning investment real estate are well known or you wouldn’t be here in the first place reading this post. But in order to make that ownership happen, you have to be aware of your financing options and know their pros and cons so you can put them to work within the right investment strategy. One financing options may be a perfect fit for one strategy and Nightmare on Elm Street for another. During our consultation sessions with our clients, this question comes up every single time as it very well should. And we always say, there’s no one-size-fits-all solution – you just have to know your options so you can pick the perfect fit. Read the rest of this entry »

As stimulus package was signed into law this past Wednesday, speculation about the housing provisions in it ceased. During the course of congressional negotiations we went from a $15,000 tax credit to nothing, and everywhere in between.

The simple facts

Under the $787B recovery package, first time homebuyers (that make less than $75,000/year) are eligible to get an $8,000 tax credit that does not require repayment, if they purchase a primary residence from January 1st, 2009 through December 31st, 2009. The credit is refundable – If the annual tax liability is less than the credit, the taxpayer will receive the difference in a check. The tax credit does not apply for investment properties or second homes.

Here’s an idea

The median home price in Houston Real Estate as of January 2009 is about $130,000. In the current environment, buyers are getting an average discount of about 7% off asking price. Bank and government foreclosures are often priced 15%+ less than their true market value. With FHA financing, homebuyers can purchase a Houston home with a 3.5% down payment. Finally, the stimulus package tax credit amounts to about 6% of an average priced starter home.

To put it all together: You would be purchasing a home at a sweet 31.5% Off!! As in 68.5 cents on the dollar.

Need I say more to support my conviction that this is THE best time to buy a home in the last 50 years? To spin off a Warren Buffett nugget of wisdom: Be agressive when others are fearful and fearful when others are agressive. The time is now…

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Photo Credit: Lisa Brewster