DEAN GRAZIOSI: DEAN GRAZIOSI REVIEW – REAL ESTATE FEED BY DEAN GRAZIOSI

We have all heard of the saying about the glass that is either “half full” or “half empty.” In fact I remember my parents always bringing that “half glass” up every time my thoughts turned to the negative, but whether you see the glass as half full or half empty, really depends on who is looking at it. This quote about “the glass,” and the current real estate market seem to have a lot in common.  Like that half full glass, the real estate market trends really depend on your focus. If you look at job loss, the economy, the world financial crisis, mortgage availability, bankruptcies, and delinquencies, then you probably have a pretty negative view of the current market, and you may not even want to consider how to buy or sell houses in this market.

But if you look a bit closer, then you can also see some positive aspects, and trends in the current real estate market. Think about it! today houses are much more affordable than they were two years ago. The severe national crisis and the sheer number of foreclosures have caused the end of the housing boom. Houses are experiencing great price reductions, and mortgages are being offered at extremely low rates. Mortgages have dropped as low as 5 and a half percent, for a fixed rate mortgage, which means low monthly payments for the term of the loan. What about that! Isn’t that good news? It certainly sounds like it. To some this may mean that now is the time to buy or sell houses.

Now, add this to the government’s January plan to cut the fixed rate mortgage to as low as four and a half percent, and offer a 10% tax incentive. Then you have the formula for success in any home investing plans, no matter why the investment is made.

The  idea is to promote the housing market, thus stimulating the economy. This means that if you want a great investing opportunity, you want to start looking at homes now.

Even if you are not interested in real estate investing, but you do happen to be renting, then this is the perfect opportunity to invest in your own home. By purchasing a home at this point in time, you will probably save more monthly money by buying, instead of renting, and you are creating a nest egg for yourself.

When the housing market fell in the 1970´s a similar stimulus was created and this had very positive effects on home purchases, and on the whole of the economy. If this type of programming is put in place again, then there should be extreme advantages to buying real estate, for any reason.

So, whether you are looking for a safe place to put your savings, or want an inexpensive place to live, you really want to seriously consider the real estate market… and soon!

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Purchasing real estate simply because it is cheap, is not the smart thing to do.   While finding the hugely discounted properties is important in most cases, there are countless other things that should be considered before you jump in.  Real estate experts such as Dean Graziosi have been trained through education, research and above all, lots of experience.          

If you are in need of immediate cash from a real estate transaction, then cash flow should be one of the biggest factors in deciding whether or not a property is for you.  You need to ask yourself, will this property produce an income for me?  If you need cash now, but the property you are looking at is in no shape to rent, sell or flip without substantial work, you may want to pass on the opportunity.  In other words, if you don’t have the time to do a lot of repairs, don’t buy a fixer upper with the “hope” that it will work itself out. 

Leverage is another factor that you should consider before purchasing any property.  The more money you put down on the property, the less you can put down on another.  You want to make sure that the properties you are investing on are solid investments because the money you put down on them will ultimately determine whether you have a negative or positive cash flow.  The more debt you have in a property the greater your loss could be in the long run.  This is why it is important to invest in real estate markets that will appreciate in the long run.  If the value of the property goes up, so does your rate of return.  Choose your neighborhoods wisely and watch the market trends.  You may have to look a little further than your backyard to find a deal worth investing in.

Obviously, if you can buy a property with a large amount of equity, your chances of success just increased substantially.  Equity comes in many forms, from huge discounts and fixer uppers to foreclosures and properties that can be rezoned.  If you want to invest in a fixer upper, make sure that you are at least getting a discount equal to double of the amount you will have to invest in it to fix it. 

Lastly, never invest in any property without assessing your risk.  If you purchase a property that happens to depreciate in value, will you be able to rent it for a positive cash flow?  If you find that you can’t sell it as quickly as you wanted to, can you survive with less income or will you find yourself in dire straights?  All of these questions are worth asking before you make any real estate transaction. 

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We’ve all heard the startling news stories, the ones that provoke fear into the hearts of home owners and novice real estate investors alike.  Despite the fact that housing prices have fallen to the lowest values in decades and the credit crunch has made it difficult for consumers to get new loans, real estate experts such as Dean Graziosi, have taken the bad news and turned it into profit.  

While it is true that the vast majority of the United States is seeing astronomical foreclosure rates and low property values, there are still some housing markets that have seen appreciation of home values rather than depreciation.  Finding and purchasing homes in these areas is just one of the ways you can ensure your real estate investment success.  If you are looking to invest in the immediate future, make sure you take a close look at what the following cities have to offer.  These cities are considered to be the best housing markets in the United States in the year 2008.

Biloxi, Mississippi

Salem, Oregon

Bismarck, North Dakota

Spokane, Washington

Yakima, Washington

Austin, Texas

Grand Junction, Colorado

Fargo, North Dakota

Mobile, Alabama

Idaho Falls, Idaho

New York, New York

Glen Falls, New York

Salt Lake City, Utah

Grand Forks, North Dakota

Pascagoula, Mississippi

Hattiesburg, Mississippi

Albuquerque, New Mexico

Kellogg, Idaho

Boise, Idaho

Provo, Utah

Ogden, Utah

Edmond, Oklahoma

Oklahoma City, Oklahoma

Amarillo, Texas

Lubbock, Texas

In today’s market deals are everywhere.  The problem is that there are so many deals that for a novice investor, deciding which deals are good in the long run can be a nightmare.  While you may have to look a little further than your backyard when it comes to making a wise investment, there are definitely deals to be had if you know where to look for them.  Wise investors not only take the time to research the real estate markets they are considering, they also know when to pass up a deal.   Anyone that has any experience in real estate knows that location is one of the most important factors when deciding whether or not to invest in a particular property, and perhaps in today’s sluggish economy, it is the single most important factor. 

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Here is a little secret that Dean Graziosi has known for many years and has used to his advantage. ¨Most real estate agents don’t know very much about the market they work in.¨ Now this is an advantage to any real estate investor because it means that you as a real estate investor can become more successful just by learning. You can have an edge over real estate agents, investors, and other people in the market just by acquiring as much market knowledge as you can. It is so crucial that you research the market in which you plan on buying your real estate investment. This way you will ensure the profitability of any property you buy

Even today, when Dean Graziosi invests in real estate he learns everything he can about the market in the area, and then makes a decision on what to do as far as investments go.

Most real estate investors, agents, and anyone in the real estate market will tell you that it takes time to get that ¨sixth sense¨ which helps you understand the real estate market place for any area. But with all the technology we have available today, you don’t have to wait to get that experience through trial and error. You can begin at any time, and learn everything that will make you an expert investor. There are all sorts of places where you can pick up information. You can look online, read books, read local news. All of these sources will give you a great start at acquiring the market knowledge you need.

Here are a few rules that will get you started:

1.      The first rule of thumb is to remember that real estate is governed just as any other market by the law of supply and demand. So if the buying or selling of a home and the price will be influenced by the consumers buying and selling practices.

2.      Cause and effect also affect the real estate market, so when there are positive current events then there will be a positive effect in the real estate market.  A good economy will lead to a strong real estate market and  high appreciation of homes and when the economy hurts then the real estate market goes down, and prices go down which according to Dean Graziosi is the perfect time to buy.

3.      Look at history – It will always repeat itself. There are cycles in the Real estate market and prices will go up and down. There are periods of fast real estate appreciation and times when values neither move up nor down.

When you know what the market is doing, then you will know what you are doing and will be the expert you need to be. All you have to do is your research, and get an understanding of what is happening in both the financial and real estate world to be successful at what you do.

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In this time of unsettling economic news and talks of bailouts and stock losses, it’s time to focus on what new real estate trends are coming into play as we head into the final quarter of 2008. Here are a few for all you savvy investors:

·        The market is returning to the traditional decent price with a qualified, approved buyer who has a down payment to put towards the purchase.

·        Real Estate agents are spending more time developing quality leads in order to better sell the inventory they’re representing.

·        Agents are also putting a realistic price on a property rather than playing games with numbers and pricing real estate with an unrealistic “value range.”

·        Short sales are becoming a more common way for buyers to purchase a property.

·        The market is changing and for the better with an increase in real sellers and a decrease in buyers who are serious about purchasing a property.

·        No longer are real estate agents as concerned about what their commission is going to be and more concerned about truly representing their clients.

·        Real Estate offices are cutting staff in an effort to reduce their own overhead. Smaller staffs to manage provide real estate agents with more time to work on generating leads, following up on client calls, more time to show properties, etc.

·        The market is going from a fast market to a slower market which allows for more quality real estate deals getting done.

·        The real estate agent pool is slimming down. Gone are the agents who were only interested in making a ‘buck’ and with a smaller real estate agent market, the true real estate professional is now back in demand.

·        Strategy meetings in real estate offices are concentrating on getting back to the fundamentals of real estate where agents spend part of their day on lead generation, write tighter contracts and deal with fewer but more serious buyers.

These trends in the real estate industry are positive ones for buyers and sellers and should allow for stronger deals and quality transactions.

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As the real estate market once again becomes a viable opportunity for investment, Dean Graziosi wants to remind readers of some important tips to remember when trying to buy or sell a piece of real estate.

One of the most important first steps is to get a copy of your credit report and make sure your report does not contain any errors. If it does they should be corrected before you approach a bank to secure a mortgage loan. Check for errors such as charge-offs that were actually paid and department store credit card accounts that show late payments.

Take a look at your current living expenses budget and develop a plan for living within your means. This will certainly help you in securing a mortgage loan.

Carefully consider what real estate office/agent you want to have represent you. It’s important to weed out those agents who only got into the market when it was a strictly buyer’s market. Check the agents/offices track record before making your choice.

When you’re ready to start looking for investment properties it’s ok to think small, initially. You will be purchasing a property that in most cases you’re going to rent out and thus provide you with a steady income. Once you’re adept at being a landlord, you can move on to purchasing more properties.

Remember that the ‘perfect’ property only exists in fiction and fairy tales. So, purchasing a property that is new or fully renovated is a good opportunity and shouldn’t be passed up.

Make sure you consider location when looking for a property to purchase. Dean Graziosi believes that taking on a property in an up and coming area will pay off in the future as you’ll have a piece of real estate that others will be interested in renting.

Always try to find properties that are nearby your residence. It’s best to keep them within a two hour drive. You’ll have an easier time fixing problems and you’ll be able to keep an eye on the property.

Utilizing these tips by Dean Graziosi will help you become a stronger real estate investor and provide you with a steady income for years to come.

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The south has been hit hard by Hurricane Ike. And because of the damages to the housing industry the U.S. Housing and Urban Development Secretary announced that HUD will offer federal disaster assistance in a timely manner to several counties in Texas and Louisiana. According to Dean Graziosi this is good news! This means that homeowners in these areas will have the assistance they need through the Federal Housing Administration.

When Hurricane Ike hit Texas and Louisiana, it brought with it winds at 100 mph and a lot of rain. Many homes now either need to be rebuilt or repaired and HUD is offering the following assistance:

1.      They are making mortgage insurance available to disaster victims. Victims have the ability of rebuilding or buying another home and are eligible for 100% financing and that includes closing costs.

2.      They are offering Section 108 loan guarantee assistance. HUD will make available to these states federal guaranteed loans to help with housing rehabilitation, and economic development.

3.      HUD is offering the state and local communities the ability to use money set for other projects for disaster relief. This will include housing and services for the tornado victims.

If you have recently bough property, or own a home in any of these areas that were hit by the natural disaster, then be sure to check with your local authorities to get the funding you need to either repair your home of to find the right mortgage for the right new property. Remember the key to being successful is being able to handle whatever comes your way, and take advantage of the good things that can come from it.

Don’t wallow in despair, now is the time to start acting and getting the help you need to make those repairs, buy that home, or change something that was affected.

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Today with the real estate market being in such a slump, you want to do anything you can to make your real estate property more appealing. Actually there is a great way to make your property stand out against all others. The most popular houses on the market today are those that are energy efficient. An existing house can be retrofitted to both save and produce energy. This new type of energy efficient home is becoming very popular and houses that are environmentally friendly sell more quickly and produce more profits than comparable houses that are not environmentally friendly.If you pay attention to the news, you will know that energy costs are rising and people are becoming more aware of alternative fuels, and want to save whatever existing energy we do use. There are some things you can do to make a traditional home more energy friendly and according to Dean Graziosi more appealing to buyers.

1.      Create high performance insulation of the entire home using both air barriers and insulation. Use form fitting doors and windows that don’t allow air to escape.

2.      In stall energy efficient lighting and appliances. These are extremely attractive to potential buyers.

3.      Use solar panel cooling and heating systems. These have come way down in costs and are extremely helpful when saving energy. Dean Graziosi believes that the use of solar panels even if it’s just for water heating will improve the attractiveness of your home.

4.      If you can find someone to install a photovoltaic system to offset electrical costs, this is another great addition to a home.

Whatever you can do to make your home more energy efficient will help improve its marketability, your investment, and the price you get for it. Some of these remodeling projects are not that expensive, and others cost a bit more, but are still well worth it.

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There are a great number of bond investors out there who are experiencing reduced returns due to economic factors.  Interest rates are very low, thus bond yields, though steady and safer than holding stocks, are quite small as well.  Hundreds of billions of dollars in retirement assets are invested in government and corporate bonds in this country.

·         Government bonds, frequently backed by the “full faith and security” of the U.S. or state government, are considered quite safe.  After all, they can just raise taxes to generate revenue.

·         Corporate bonds are a bit more risky, but they almost always pay higher yields for that reason alone.  You’re betting on the continued operation and financial health of a corporation.

Perhaps you’re a bond investor with substantial holdings in either or both of these bond types.  After all, most financial planners will advise you to diversify.  They’ll also point out that bonds are safer investments, and that makes their lower yields acceptable if you are near or in retirement.  All of this is very true, and we wouldn’t advise anyone to liquidate bond holdings to re-allocate money to real estate investing…unless they do their homework at least.

If you have considered moving money from bonds to direct real estate investment, here are some characteristics of these investment types that may help to you make a decision.  Remember, we’re talking about active investing, though you may hire others to manage your properties.

·         Historically, real estate has provided appreciation and rental yields at multiples of the yield rates of bonds.

·         The history of real estate in this country has proven the safety of the investment if done properly with due diligence and intelligent purchasing.

·         While bond yields suffer with inflation, the rental property investor usually profits from it.  The cost to build goes up, so their properties appreciate, and usually rents increase with inflation as well.  All the while, your fixed mortgage payments stay the same.

·         Bonds have a fixed value, with the only return on investment coming from the interest or dividend yield.  Real estate will often produce an equal or higher rental yield, while appreciating in value as well.

·         When home buying becomes unaffordable for many, or mortgage avenues dry up, there are more tenants because they cannot afford to buy a home.

·         Our population continues to grow, with the normal first home for younger people being a rental of some kind.

Examine your life goals and your investment objectives.  If you have the time and ability to invest in real estate, particularly rental property, then you may find that a partial re-allocation of your investments from bonds to real estate is for you.

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That’s a question Dean Grasiozi is often asked and the answer is simple, the time is always now, especially since the market has slowed and homes are being listed for longer periods of time—meaning the price continues to drop.

In April of this year, inventory of homes on the market rose by 10.5% with about 4.5 million homes listed as for sale compared to the same time frame in 2007. So there are bargains to be bought.

There are a number of niche markets that prospective real estate investors should consider looking into:
a) For Sale by Owner Market.

b) Condominium market.

c) Foreclosure market.

d) Resort and Vacation home market.

If you’re looking to buy something in a geographical area you don’t currently live, Dean Grasiozi suggests you use the World Wide Web to find articles and information about the area you’re interested in. There are a number of websites that keep up to the minute information about trends in real estate and the perfect place to look.

You might also consider making sure you have other professionals on your team to help you with questions that come up when buying investment real estate properties.

• A Real Estate attorney is great to have especially one who is experienced in handling all types of purchases.
• A Contractor is useful when you’re looking to buy a property that needs fixing up.
• A certified public account that knows real estate and preferably has already purchased several properties.
• Of course it is quite possible to become a successful real estate investor without any of those aforementioned professionals.

So there’s no time like the present to start buying your own real estate investment properties and add to your investment portfolio.

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