The FHA not immune to defaults…FEAR on the rise.

I won’t begin to regurgitate all the details, however suffice it to say that the FHA is seeing more and more defaults on loans insured since 2008!! What? Yes, that’s right since 2008.  Review the entire article here by the way the article is well written by Keith Jurow of the Real Estate Channel.

My point is to make a claim, right now, and right here on our Market Advisors Blog…August 10,2010. “Market Momentum is still knee deep in the FEAR stage which will lead to further market price deterioration across all residential real estate markets in the US.”

Now when I deliver my seminars and workshops during the next year with Entrust and Pensco I can refer back to this published statement and say “Told You So!”

However, do not  get me wrong. I am a buyer at these “fearful” times. I have no problem investing in properties that deliver positive cash flow at over 12% return and a 5 GRM. With these real numbers I will be happy to “Buy/Hold” or “accumulate and wait”. With a less than 1% CD rate…plllleeease and thank you.

Have you checked out Fortune or Money magazine lately?

Take a look at the June 2010 Money Magazine…specifically page 82…”Stock up for more Income”. Or, the June 14 2010 edition of Fortune Magazine, specifically page 82 “Our 2010 Retirement Guide: You Can Still Win”.

Let me summarize…Its all about investing in “Funds” and it is all about being satisfied with marginal investment gains…apparently less than 5% if you are LUCKY!

Fortune magazine even goes so far as to suggest “asset class diversification” …but sadly stops short at anything other than publicly traded Funds. (of course that is where the big $$$ are, especially when  it comes to fueling advertising for these financial rags.)

True diversification should also include “alternative assets” , such as Real Estate, and look toward specialized niche sponsors that can offer greater returns with minimal risk.

Just how can you find out more about how to take advantage of these opportunities? May I suggest you first become knowledgeable of your retirement options. Look to these websites for easy to understand content about self-directed retirement.

Pensco Trust Co.

The Entrust Group

U Direct IRA Services

Lots of good info…and when it comes to a good investment opportunity, specializing in real estate, contact me at

john@mymarketadvisors.com

Foreclosures Good for the Economy?

Strange as it may seem there actually might be a consumer spending benefit to the economy due to increasing defaults on home mortgages.

WHAT ??!!

Yes, the latest rise in consumer spending numbers is juiced by the simple fact that as more and more Americans stop paying on their mortgage…that frees up cash which finds it way into retail coffers.

YOU HAVE GOT TO BE JOKING??!!

No, strange but true. Check out this latest report from CNBC and Realty Trac.

Though someone might seem to think this is good news, think again, Foreclosures, NODs and Short Sales are INCREASING at a record pace which is continuing in the 3rd year since the burst of the bubble. Home values continue to suffer.

Let’s not forget that the single most important asset to the average American family is the “HOME”, which is being wasted. What this country needs is a paradigm shift back to values, and Government needs to do all it can to support “HOME VALUE” by creating JOBS and stimulating (or rewarding) HOME BUYERS.

Why Invest in Condos…

Interesting how a great majority of real estate investors shun investing in Condos during this fantastic distressed property extravaganza. I wonder how well thought out their investment portfolio strategy might be when investing in foreclosure real estate?

Here are some points to consider when comparing condo product to typical single family.

• Price per sf  in todays distressed market averages 30% less.
• Investor competition is minimal.
• HOAs provide a wealth of information on product condition, amenity condition, restrictions and HUD compliance before you buy.
• Monthly assessments are competitive to insurance, maintenance, and services required for a typical single family.
• You can insure against unforseen special assessments.
• Gross rents per sf are superior.
• Remodel costs are less.
• Optimizes Buy/Flip or Buy/Hold strategy.

These are just some of the reasons why I prefer Condos for my Buy/Flip and Buy/Hold strategies.

Real Estate Rants

Today Case Shiller released its 1st Quarter 2010 report on home prices, so lets sum it up… “Housing prices rebounded from crisis lows, but recently have seen renewed weakness as tax incentives are ending and foreclosures are climbing.”

As an active real estate investor it is of no surprise to me that housing is soft again. When will we learn that short term government stimulus programs are just that?…short term.

When will we learn that real improvement in unemployment will lead to a sustained housing recovery?

When will we learn that investors should be given incentives to put more money to work in real estate, rather than impede their profit?

When will we learn that overly strict lending guidelines are a constraint to the housing market recovery, rather than a  remedy to the cause of the foreclosure crises?

What will save the housing market, and where can an investor put money to work?

Quite simply “Jobs” will save the housing market overall, and in todays market an investor should put money to work in properties that offer real value and savings to a prospective buyer…meaning  “You can own this house for less than rent”.

I am putting my money to work in properties like these…check it out http://mymarketadvisors.com/deal.html

Why The TEAM Matters…

And YES this has absolutely nothing to do with the playoffs…

Today’s Blog has everything to do with improving your real estate investment results by joining the RIGHT TEAM.

I have been doing a lot of public speaking lately, the subject of which continues to be educating Investors as how important it is to assemble a TEAM that can improve your chances of success.

The fact of the matter is that it is difficult and time consuming to put together a winning TEAM…and…wouldn’t it be easier just to join a winning TEAM?

I am inviting you to join the Market Advisors TEAM; our expert bird-dogs who feed us property deals in choice markets, our phenomenal design team that can transform a wreck of an REO into a valuable property (Watch Foreclosure Makeover), the portfolio managers who maximize the value of our Funds assets, to our expert Preferred Advisors who can counsel our clients investment/retirement strategy, together with our continuous education (Webinars and Seminars) make for a priceless combination.

Why not supercharge your investment and retirement portfolio today! Contact Us and find out how you can join our TEAM.

Resolution Time! My Retirement Checklist…

Happy New Year! Time for me to check up on my retirement strategies going in to 2010.

I want to make sure my strategy is built on a simple foundation (a foundation that I can understand)

• Place as much of my investment power (this is my war chest…my investment dollars and collateral) as possible in tax-advantaged accounts. For me these are: HSA (Health Savings Account if you don’t have one of these you should), ROTH (convert my IRAs to ROTH just too damn good), SoloK (awesome because I am self-employed), Defined Plan (benefits me and my company).
• Make sure I control the choice of investments I make. I want to be flexible, I like to make my own investment decisions, I prefer to write my own checks. I LIKE BEING IN CONTROL.
• Invest in Real Estate…Simply take advantage of one of the best historical BUY opportunities.
• Work with Experts to facilitate my strategies.

HAPPY 2010

OUTLOOK 2010

I wish everyone a very happy and successful New Year. I am excited about the potential for some very juicy acquisition opportunities coming our way in the residential real estate markets.

Here are my top 3 factors contributing to the BUY opportunity in 2010.

1. Short Sales will become even more opportunistic with the prospects of actually closing deals better than ever as Banks choose the path of a kinder, gentler approach with their troubled borrowers.
2. (2) major contributing factors to increased foreclosure activity will be Unemployment and a large volume of  “reset” or “recast” activity on existing ARM and Pay Option mortgages.
3. Feds squeezing banks by upping the ante on capital reserves will push more REO inventory out onto the marketplace.

Our portfolio for Market Advisors Real Estate Fund LP  is anticipating acquisitions with upwards of 18% cash on cash ROI. For January I am releasing only 20 units to Investors at $25,000 each. These won’t last long, reserve yours today. You may contact me by e-mail john@mymarketadvisors.com

Short Sales Beginning To Make Sense?

It seems that I am reading that the volume in successful short sale transactions are picking up in volume. I certainly hope that this is the case, as the portfolio manager for Market Advisors Real Estate Fund LP, I am particularly interested in negotiating short sale transactions.

Apparently, Banks are becoming more responsive and have finally “seen the light” that short sales can be a win win for everyone involved. Part of this development is the pressure that the Obama administration is putting on Lenders to workout their defaulted assets , rather than foreclose, therefore short sales are a remedy that satisfies the Feds.

I like short sale deals…what is your opinion?

Real Estate Speculators Getting A Bum Rap?

During a Market Advisors live seminar last night an interesting topic was discussed. Are speculators (flip investors) getting a bum rap as more and more lending constraints are impairing the ability to flip properties effectively…

The short answer YES!

Speculators contribute to the process of “working our distressed inventory” and also contribute to the cause of “increasing property values”. There should be a concerted effort on the part of Big Banking to assist all types of Buyers, including Investors, to bring distressed properties back to livable condition, as well as, moving these non-performing assets off the balance sheet of the big banks.

Constraining Buyers of any type or investment style is just plain stupid, and goes against “free market” principals.