REMarketStats Real Estate Market Timing Blogspot

Blastoff - An Awesome way to Generate extra income

2009-10-23T08:55:00.000-04:00

An awesome new internet home page was just launched yesterday called Blastoff. It's a fully customizable homepage, similar to MSN, Yahoo and Google, but the biggest difference is that it has a shopping portal tied in that pays you cash back for your purchases! Over 400 major online retailers have already linked up with Blastoff to offer their customers cash back for there purchases. Here are just a few of the big ones:

Best Buy
Target
ITunes
Expedia
Travelocity
Southwest Airlines
Barnes & Noble
Sears

That's just to name a few of the more than 400 that are available. Blastoff is completely free to sign up. You don't buy from them at marked up prices or anything like that. You buy directly from the retailers themselves. In fact, I've already bought from Best Buy and was able to accumulate my Best Buy Reward Zone points in addition to getting cash back for my purchase.

But I haven't gotten to the best part yet. The best part is that with Blastoff you build a network. Anyone you refer to sign up to your Blastoff page becomes part of your network. And when they buy something online, not only do they get cash back for their purchase but you get a commission too! That's right, you get paid when they shop. And anyone that they refer who signs up becomes part of their network AND part of your network, so you all get paid. Up to 10 levels of separation. That is a serious opportunity to generate extra income.

I can't tell you how excited I am about this. It's completely free to join. You don't have to change your shopping habits to take advantage of this. Anyone who shops on the internet should join Blastoff. If you want to learn more just follow the links. You can see videos explaining Blastoff and sign up.

Once you sign up start telling everyone you know your own Blastoff page and get them to be part of your network.

Real estate investing in declining markets

2009-09-04T09:44:00.002-04:00

Okay, here's the thing. You live in a real estate market that you know is declining right now. You've done your real estate timing research and you've seen that the market indicators are telling you that now is not the time to buy in your market. You won't be seeing appreciation for a while yet.

Does that mean you can't invest in real estate?

Should you just wait the market out?

No. There are still opportunities in declining markets. You just need to modify your real estate investing strategy. When a market is in decline probably the single most important thing to do in real estate investing is not to own property. If you own it, you are going to be stuck watching the value go down. But just because you don't want to own doesn't mean you can't be in the game.

Here are four great choices for real estate investing in declining markets.

1. Wholesaling - flip the deals without ever closing on them. Get a great deal under contract and then flip it to an end buyer. The best way to do this is to assign the contract and take an assignment fee. Your other option is a simultaneous closing. This way you are making a profit without having to hold the property. Very safe.

2. Short Sales - let's face it, the foreclosure rate is higher right now than it has ever been in history. It's higher now than it even was last year or the year before. There are tons of short sale opportunities out there. But to do this safely you'll be best off finding an end buyer BEFORE you have to close on the deal. If you are closing and hoping to make a big profit by reselling you'll end up with a much higher level of risk because you are holding in a declining market.

3. Lease Options - Wendy Patton, the nation's leading trainer on lease options, talks all the time about "control without ownership." That's what lease options are. By doing a sandwich lease option you place yourself in the middle of the deal without having to own the property. If you are in a declining market you need to take into account some depreciation as you set up your deals. If the market declines too much you can always try to renegotiate with the seller. But no matter what because it's an option you aren't obligated to purchase, you aren't obligated to close on the deal.

4. Real Estate Timing - If your market is declining then find another market to invest in that is about to go up. The above 3 options are great ways to invest in declining markets, but they can be a whole lot of work! And you really don't need to invest in your own backyard. Spread your wings and find markets that aren't declining. Buy property in markets that are going up so you don't have to do all of that hard work for each and every deal. This national approach to real estate investing allows you to get out of the highly competitive grind of hustling to find deals in your own market and then hustling to find buyers.

See this post at it's original source at http://remarketstats.com/blog/real-estate-investing-in-declining-markets/

New Market Analysis Charts coming

2009-09-01T09:52:00.001-04:00

The end of the month/beginning of the month is always a busy time here at REMarketStats as we compile the latest market data and get ready for the next month's charts.

It's also an exciting time though because we get to see those new real estate market analysis charts.

The important thing with real estate timing is to watch the markets you are interested in and seeing what is happening in the market. Is it time to buy? Is it time to sell? Is it time to watch and wait or hold your existing purchase and watch the value go up?

One of the things I really like about the real estate timing market analysis charts is that it really helps me to know what is actually going on in any particular market and filter through all of the media hype and nonsense about what they claim is going on in real estate. After all, if you can see one news article saying the housing crisis is over and another article saying that the foreclosure rate is higher than ever on the exact same day, how can you possibly trust the media?

Instead I can rely on the actual data and the market momentum calculations to tell me when to buy, when to sell and when to hold. This is much better than guesswork in real estate investing.

See this post at it's original source at http://remarketstats.com/blog/new-market-analysis-charts-coming/

Real Estate Investing in Down Markets

2009-08-28T09:17:00.000-04:00

Real estate timing doesn't just have to be used to invest in emerging markets. You can also use real estate timing as a way to know how to invest in your own market, based on what that market is currently doing. After all there are limits to how much we can invest in emerging markets based on our available credit and financial resources. You can make a lot of money with emerging market investing but what about investing in your own market at the same time?

You can use real estate timing to determine what is going on in your own market as well so you can determine your real estate investing strategy. For example, if your market is in decline you are going to have a different investing strategy than if your market is going up. Different real estate investing strategies have different levels of success based on the conditions of the market. For example, it's a lot harder to buy and flip rehab properties in a declining market. So let's say that you look at the real estate timing market indicator charts and determine that your market is in decline. What is a good real estate investing strategy for that kind of market?

How about lease options?

Lease options are an excellent choice for declining real estate markets because you are not obligated to complete the purchase if the market changes too much, or you can always renegotiate the terms to still close on the deal. The other thing that is great about lease options is that you don't need money out of your own pocket. They can be truly no money down investing deals.

: Investing in Real Estate with Lease Options and Subject To Deals

If you are interested in learning about lease options, I recommend Wendy Patton's book, "Investing in Real Estate with Lease Options and Subject To Deals." It is a detailed hands-on guide to learning how to do lease option investing. Wendy Patton takes you through the whole process, giving examples as she goes. Wendy is one of those who teaches by doing, as she has done over 650 lease options in her real estate investing career. I actually know this book very well because I held my real estate license with Wendy Patton's real estate brokerage for many years before I relocated. If you are interested in learning about lease option investing this book is definitely where you want to get started. Take a look at "Investing in Real Estate with Lease Options and Subject To Deals."

See this post at it's original source at http://remarketstats.com/blog/real-estate-investing-in-down-markets/

real estate investing and historical homes

2009-08-26T12:03:00.003-04:00

The first rehab property I ever bought as a real estate investment was a historical home. The home was built in 1929 and the entire neighborhood was deemed a historic district.

This means you have certain criteria you have to meet when making changes to the home. The historical society wants to preserve the character and nature of the home. As a novice real estate investor what this meant to me was that I didn't really know what I was getting myself into. Here is a before shot of the living room. Man, that wall paper makes my eyes hurt :)

The reason I bought the home was because I saw all of the potential it had. I knew it could be restored to glory. And just as importantly I knew it wasn't going to take a lot of investment in materials to do it, just tons and tons of elbow grease. This was good because I was doing this real estate investment rehab on a shoe-string budget.

This was back in the day when I do doing the work myself. It was my first project and the time table wasn't nearly as important as keeping the costs down.

The first mistake I made was to live in the home at the same time I was renovating it. As I said I needed to keep costs down and that helped. The problem with this was that it required living in a home that was in a constant state of renovation. For example, it's a real pain in the butt trying to use a kitchen when you are rebuilding the cabinets and dust and construction debris keeps getting all over your food.

The big thing about these historical homes is all of the great original woodwork and construction elements. 7 1/2 inch baseboards and window trim. Fantastic hardwood floors. All kinds of construction details that really makes these homes great and have a level of character you don't see in most homes today. The problem is that since the home was built in 1929, all of those great elements weren't always in style through the years. So the fantastic woodworking elements were painted over. The hardwood floors were carpeted over (and in some cases linoleum was glued directly to them). To restore these elements to their original glory means stripping off all of the layers to get back down to the original and then refinishing it. Let me tell you, this is really hard, time consuming work. If you are looking for rehab projects to buy, fix and flip and have contractors do the work, I definitely don't recommend historical homes. The restoration work takes a long time and the labor costs would eat you alive.

I removed every single baseboard from the house, labeled them, and used a very nasty chemical to strip 7 layers of paint, all different colors, off each one. I want to know who the heck thought olive green was a good color for baseboards??? I did the same thing with all of the window trim pieces, including every little piece of moulding. I tore out all of the carpets and sanded the floors down. Then I refinished everything. Here is the after shot of all of these historical elements restored.

I was very proud of all my hard work. I thought it looked great. And by the way, I even made a little bit of money off this house. Of course, it wasn't because I bought right. In this case, I actually paid too much money for the house when I bought it. It wasn't because I knew about real estate timing and bought knowing that the market was going up. It wasn't that I kept the rehab costs down so I left myself some equity spread, in fact the rehab costs were much higher than I anticipated even though I did all of the work myself. This was my very first rehab and I really didn't know what I was doing. So the reason I made a little money off this one was because I got lucky!

In this case the real estate timing was right. I bought while the market was going up and the rehab took me so long that the home appreciated in value enough to cover all my costs and even make a little bit.

Certainly this is not how I recommend doing your real estate investing. Relying on luck is no way to try and make a living as a real estate investor.

See this post at it's original source at http://remarketstats.com/blog/real-estate-investing-and-historical-homes/

Is Now the Time to Buy?

2009-08-24T12:48:00.001-04:00

I've seen a lot of news coverage lately claiming that the recession is over and that we are on the verge of recovery. Home sales are back up in some areas and home prices have even risen in some areas. Surely this appears to be a good thing, right?

At the same time I have to admit that I'm a bit puzzled at how economists can claim that the housing crisis is over. Because at the same time that I'm seeing all of this news claiming that things have turned around I'm also seeing news like this:

"Mortgage Delinquencies break another record" -According to MarketWatch, the percentage of residential mortgages in foreclosure or at least one payment delinquent has hit an all time high of 13.16% in the second quarter of 2009. This is the HIGHEST EVER rate recorded by the Mortgage Bankers Association. (Source MarketWatch, Amy Hoak, 8/20/09)

Either I'm missing something that all of these top economists understand but I don't or we are clearly not done with the housing crisis yet. If the foreclosure rate is higher than it has ever been that means that there are going to be more bank owned homes coming onto the market than we already have.

Is this happening everywhere in the US? No. Some areas are seeing some signs of recovery. But just as clearly some areas are not done going down yet. If you are a real estate investor I would think that you would want to know which. Because if you buy in one place you may be making a safe real estate investment. But if you buy in another you may still see home prices drop in that area.

There is a lot of opportunity out there right now for real estate investors, but you've got to know where you should be buying. You want to be buying at the right time in the right markets so you can actually make money with your real estate investments - not see them drop in value shortly after you buy. This is where real estate timing comes in. You need to know When to Buy and When to Sell. With the proper resources, like the real estate market analysis charts at REMarketStats, you can do just that.

Before you start thinking it's safe to just jump back into the market just because some economists claimed the housing crisis is over I strongly encourage you to find out more about the markets you are interested in. If the foreclosure rate is higher than it has ever been it means there are some markets out there that are not out of deep water yet.

We are in a time right now where there are some fantastic buying opportunities for real estate investors. Prices have dropped massively in some areas allowing rentals to cash flow that haven't been able to for some years now. But you need to know that those prices aren't going to drop a whole lot more. Do your research, find out about real estate timing.

See this post at it's original source at http://remarketstats.com/blog/is-now-the-time-to-buy/

Buying cheaper than rent - act in the right places

2009-08-21T16:19:00.002-04:00

BusinessWeek in conjunction with the research firm Reis, just released a report that indicates that owning is now cheaper than renting in many metropolitan areas.

The top 10 cities according to this report where buying is a bargain are as follows:

Detroit
Pittsburgh
Rochester, NY
Memphis
Tampa
Cleveland, TN
Dayton, OH
Columbia, SC
Orlando
Dallas-Fort Worth

(source BusinessWeek, Prashant Gopal 8-20-09)

In real estate investing the best time to buy is when the market is flooded with bargains and you can pick up cash flow rentals. However, we also want to see our purchases increase in value and not decrease in value, which is where real estate timing comes in. While this list may be great as far as properties that will cash flow, some of these markets are still seeing property values decline. If you are looking to buy a cash flow rental property doesn't it make sense to do it in a market that is going to go up instead?

The best way to choose your real estate investments is by picking markets where the market indicators are pointing towards buying, this means the property values are more likely to go up. While you can make money from a cash flow rental property you are going to make a whole lot more money from a cash flow rental in an appreciating market.

The best way to choose these markets is by using the real estate timing market momentum charts, like the ones available at REMarketStats.

See this post at it's original source at http://remarketstats.com/blog/buying-cheaper-than-rent-act-in-the-right-places/

Real Estate Investing - Make it Big

2009-08-19T20:05:00.000-04:00

When it comes to real estate investing most of us want to make enough money to change our lives. No matter what investing techniques we use our goal is to have some measure of success.

Sometimes though we have trouble getting started, or we have trouble keeping going if we've already started. Sometimes we hit roadblocks or difficult points where we question whether we want to keep going with real estate investing, as pretty much with anything else in life.

We all have different ways to get motivated or if we don't, we make excuses to not take action.

If you are looking for a way to get past a roadblock, or get started or keep going I have a great one for you. It's a book by Frank McKinney called, Make it Big! Frank McKinney is a real estate investor who builds ultra luxury homes on spec (meaning he doesn't have an end buyer lined up while he is building the home). He sells these ultra luxury homes to the ultra wealthy. And he is enormously successful doing it.

But what really makes me admire Mr. McKinney is that he doesn't just pocket all of the profits for himself. He takes the profits and uses them to build homes for the needy in 3rd world countries. It's called the "Caring House Project." Frank McKinney is the Robin Hood of the modern age.

: Frank McKinney - Make it Big!

Yes, I greatly admire him. But back to Make it Big! and how that can help you. This book is about how to develop success principals. If you want to get some ideas about how to push yourself beyond what you are currently doing in your real estate investing or how to get past those stumbling blocks, or even how to get yourself started this book is a great way to take that step.

One of the hardest things most of us have trouble with is dealing with things that are outside of our comfort zone. Whether it's getting started or taking a new step that we haven't tried before. Moving out of our comfort zone is usually what holds us back. I know it certainly impacts me from time to time. Make it Big! offers very useful and practical advice for a way to help you do just that, without having to take huge steps to achieve success.

Most of us aren't comfortable taking huge steps towards action or huge steps out of our comfort zone. If this is you, this book can help.

View this post at it's original source at http://remarketstats.com/blog/real-estate-investing-make-it-big/

Why You Need Real Estate Timing

2009-08-17T15:53:00.003-04:00

In other videos I've explained that you can do real estate timing and how you can do it, as well as how real estate timing makes you money in real estate. In this video I'm going to explain to you WHY you need real estate timing.

To do that I'm going to tell you a story about this house. It's a pretty nice house, right? Brick colonial. It was built in 1997, with 4 bedrooms and 3 1/2 baths. A finished full basement and has well over 3,000 square feet, plus the 2 car attached garage.

It's in a great neighborhood, with excellent local schools. Close to amenities, shopping, restaurants, entertainment. Everything you are looking for.

In 1997 when this home was built it sold as new construction for $176,000. I know, for some of you that's really cheap. This house is in the Midwest, not on one of the coasts.

In 2006, 9 years later this home sold for $280,000. That's $104,000 increase in value over 9 years, which isn't bad for just one home. This would certainly be pretty nice if you were the one buying this home in 1997 and selling it in 2006 and making the $104,000 profit.

Here's the kicker though. And this is why you really, really need to know about real estate timing.

In 2009 this home sold again for $154,000! That's $22,000 less than what it sold for 9 years ago! I don't know about you, but I sure as heck don't want to be the one buying it for $280,000 and then selling it for $154,000. That's like going to the bank with your paycheck and handing it over to them and saying, "Keep it. I'm not depositing it, just keep it."

So my question to you is, what changed?

The location of the home didn't change. It's still in a great neighborhood, with excellent schools and tons of great amenities. It's still the same home.

The only thing that changed was the timing. The real estate timing. Someone was in a position to make $104,000 in appreciation on this home and someone was in a position to lose $126,000. It all happened because of the real estate timing. I don't know about you but I couldn't afford to lose $126,000 on my real estate investments very often before it completely wiped me out.

And this is why real estate timing is so important. You need to know WHEN to BUY and WHEN to SELL. Because clearly if you get the timing right, you can make a whole lot of money. And just as clearly, if you get the timing wrong, you can lose a whole lot of money.

If you want to learn more about real estate timing and how you can do it, visit us as REMarketStats. Check out the video training to see more about how real estate timing works.

view this post at it's original source at http://remarketstats.com/blog/why-you-need-real-estate-timing/

Real Estate Investing - Planning for Your Future

2009-08-14T10:13:00.001-04:00

I'm a pretty conservative real estate investor now. It didn't start out that way, back in the boom years I bought into the whole, fully leveraged-buy as much as you can concept. And because I didn't know anything about real estate investing timing back then I got burned. As a good friend of mine said to me, "You didn't just get burned, you were crispy!"

It's sad but true. I've since learned my lesson, learned about real estate timing and have become much more conservative. Instead of trying to pick up as many deals as I possibly can, I'm taking a much more planned approach towards real estate investing for my future. In fact, this approach has changed my whole life.

Let's face it, in America we are a debtor society. We buy things now and leave the paying for it part until later. It isn't that way everywhere though. The Chinese, for example, are great savers. They save money vigorously and are not big on having debts. Even during the absolute peak of their real estate frenzy in China, home buyers were still putting significantly large amounts of money down on their home purchases. Completely the opposite of the 100% financing craze we had here in America. The result is that China's real estate market is recovering much more quickly. You don't see tons and tons of homeowners upside-down there because they put large amounts down on their property.

There is an absolutely fantastic book that talks about how to save for your future and then build your wealth. It isn't really a real estate investing book, per say, but you can easily use the principals the book talks about an implement them as a real estate investor. The book is called, The Richest Man in Babylon by George S. Clason.

: The Richest Man in Bablyon

This book was given to me by Robyn Thompson when I was a student of hers. I'm extremely grateful for that gift because it was the first book that started changing my thinking about how to plan for my future with financially sound principals.

The great thing about this book is that its an extremely easy and quick read. You can read it in about 2 hours. The story will capture you and it's a great way to present a very powerful, but simple concept of how to plan for your future.

The Richest Man in Babylon is also very cheap. Do yourself a favor and pick this book up. It really is worth it.

See this post at it's original source at http://remarketstats.com/blog/real-estate-investing-planning-for-your-future/

Real Estate Timing - Orlando Florida Example

2009-08-12T12:30:00.004-04:00

Let's take a look at an example real estate market and see how real estate timing works. The proof is in the pudding, as they say, and this will show you how the real estate timing charts will help you determine when to buy and when to sell. This is how you make money in real estate.

Here are part of the charts for the Orlando Florida real estate market going through 2007. The first is the real estate timing market momentum chart for Existing Home Sales. The second is the real estate timing market momentum chart for New Home Building Permits.

The simplest way to interpret these charts is to understand that the line that runs horizontally across the chart is the zero line. When the momentum reading goes above that zero line it's an indicator pointing towards buy. When the line goes below the zero line it's an indicator pointing towards selling.

It's important to keep in mind that it takes more than one indicator crossing the zero line to prod us into action. In this case the first time we cross the zero line going up is late 1996 and early 1997. When the second indicator crosses the zero line going up it shows us it's time to buy in the Orlando real estate market. As you can see the Orlando real estate market stays healthy for quite some time.

If you look at the New Home Building Permits market momentum chart for real estate timing you'll see that around early 2000 to mid 2001 we kind of hover around the zero line. However, because the Existing Home Sales Market Momentum chart is still well above the zero line we aren't getting an action signal. Again in mid 2005 the market momentum for New Home Building Permits starts to hover around the zero line again. It isn't until 2006, however, that the Existing Home Sales crosses the zero line. Now we have these two indicators pointing towards selling so it's time to take action. And you can see after that both charts go well below the zero line all the way through the end of 2007.

Let's take a look at the Median Home Sales Price for the Orlando Florida real estate market for this same time period to see how the market indicators are reflected in the home prices.

As you can see before we get the first buy signal the Orlando real estate market is pretty flat as shown by the red line. After we get the buy signal from the market momentum charts home prices start going up and up and up. Finally after a very healthy amount of appreciation the market momentum charts point to selling. You can see that after this home prices still go up for a little bit but then about 1 year after that they start to drop after peaking. This is good because it gives us time to get out of the market before we reach the peak.

The market momentum charts have shown us clearly when to buy and when to sell! We can see how the real estate timing charts are reflected in the home sales prices.

None of this risky speculation that cost so many people so much money.

The charts told us it was time to buy in early 1997 and the prices went up. Then they told us it was time to sell in 2006 and after that the prices went down.

As you can see these charts only go through the end of 2007. If you want to find out what is going on in the Orlando real estate market or any other of about 230 real estate markets tracked by REMarketStats across the country visit our website to see more about real estate timing in the markets you are interested in.

Also if you want to learn more about how to analyze the real estate timing market momentum charts or want to see more examples of other markets go to the free video training on our website, REMarketStats video training.

See this post at it's original source (with larger images too) at http://remarketstats.com/blog/real-estate-timing-orlando-florida-example/

Understanding Real Estate Timing - MSA Names

2009-08-10T11:24:00.003-04:00

If you've looked at our REMarketStats website to see if the real estate markets you are interested in are available for real estate timing you may have been a little confused by the MSA names listed under each state. This video helps to explain how the MSA names work when you are looking for real estate markets.

Keep in mind, the MSA name is just a name. If an area you are interested in is close to that MSA then you can use the MSA to look at the real estate timing charts and see what is happening with that real estate market.

Contrary to popular belief it is possible to time the real estate market and know when to buy and when to sell. You can make a whole lot of money in real estate if you know the proper timing.

See this post at it's original source at http://remarketstats.com/blog/understanding-real-estate-timing-msa-names/

Real Estate Investing - Use Property Management

2009-08-07T09:11:00.001-04:00

When it comes to real estate investing most investors make mistakes as they work to build up their portfolio. Hopefully we learn from those mistakes as we move from one deal to another so that we can become better and our deals (hopefully) get easier. As a real estate investor I am certainly no exception to this. Last month I shared a post on real estate investing and rehabs and a costly mistake I made with my general contractor.

Today I'd like to share a mistake that I've made more than once when it comes to rentals and why I'm a big advocate of property management now. I'm a huge fan of rentals that cash flow. They can (and should) be the least work of any type of real estate investing. When you couple real estate timing with holding properties as rentals it is certainly the best way to make money in real estate.

The biggest drawback with rentals is that you actually have to have tenants in the properties ;-) Now don't get me wrong, there are a lot of good tenants out there. But there are also some professional bad tenants out there who have radar for "suckers for a good story," like myself. These professional tenants just seem to know what rentals to apply for where the owner is gullible enough to buy their lame excuses about why they can't pay the rent.

I had one such tenant in a fairly upper end home that managed to come up with story after story after story. Mostly because I seemed inclined to listen to them! I didn't finally evict them until they owed me 6 months of past due rent! They bounced 2 checks during that time, made numerous promises and delivered on none of them and finally trashed the house. Then to top it all off, this tenant was arrested for assaulting his wife and he had the unbelievable gall to have his attorney subpoena me to testify on his behalf as a character witness!!! Needless to say when the attorney heard what I had to say about the character of his client he released me from the summons without testifying.

You know what the worst part of this whole story is? These were not the first tenants I had to evict. I'd heard the sob stories before from other tenants. My wife tells me I'm too softhearted, which is certainly true. But I think more importantly I'm too gullible to be a property manager.

But real estate investing is about learning lessons. I'll tell you this, I still love rentals! I love real estate timing and cash flowing rentals as my favorite investing strategy. So what did I learn from all of this? That I can't manage tenants! Oh sure, if I kept doing it over and over and over again I would eventually get better but the simple fact of the matter is that I don't like dealing with tenants. It's too much work, too much headache and simply not worth it. I will never self-manage a rental property again. I will always use property management to handle rentals for me.

See this post at its original source at http://remarketstats.com/blog/real-estate-investing-use-property-management/

Real Estate Investing - Be sure of your exit strategy

2009-08-04T14:56:00.000-04:00

Lately I've been seeing some real estate markets where investor speculation has really been taking off again. Investors are buying up every property they can lay their hands on because they seem like such good deals. A good example of this is the Ft. Myers-Cape Coral area in Florida. This real estate market was very popular during the boom years for investors who had dreams of massive appreciation. As a result home sales went through the roof and tons of new properties were built. The problem was the market tanked before most of these investors could flip their properties.

Now investors have surged back into that market because the home prices have dropped so far and would you believe that the rate of existing home sales is even HIGHER now than it was in the boom years in the Ft. Myers-Cape Coral market? It's almost all investor speculation again.

Now the purpose of this post is not to slam on the Ft. Myers-Cape Coral real estate market. I'm not telling you to buy there any more than I am telling you not to buy there. That is for you to decide for yourself as a real estate investor. I would hope that you would make use of the real estate timing charts at REMarketStats so you can analyze any market before you buy or sell. It's a whole lot safer than just buying because that's what everyone else is doing.

The main reason I'm bringing up this surge in investor speculation in different areas is that I want to encourage you to plan for your exit strategy. What is the purpose of buying your real estate investment? Are you buying planning on future appreciation? Are you buying for cash flow?

In real estate investing it's crucial to have your exit strategy in mind before you buy. How will you get paid and make money on the deal? If you are buying planning on appreciation I strongly urge you to have a look at some real estate timing charts before you buy. If you are just thinking about buying because everyone else is or you heard it's a good deal, I hate to break it to you but you might be in for a long, long wait before your investment starts to climb in value.

Are you buying for cash flow? This is a little safer because if a property cash flows you can pretty much hold it forever, whether the market appreciates or not. I would still recommend looking at real estate market timing charts before you buy. I would do this because, in my opinion, if you had to choose between two properties, both cash flow, but one is in a market that is going to start going up and the other is in a market that is still going down I would definitely want to chose the market that is about to go up. You'll make a lot more money that way. The other thing about cash flow that you need to take into consideration is how is the rental market in that real estate market? No matter how good a deal sounds, if you can't find tenants for it, or are afraid to collect the rent because the neighborhood is so bad, it really isn't a deal worth getting into. Talk to some property managers before you buy. They should be able to give you some information about the rental market in that area.

The other thing that I strongly encourage you to do in addition of planning for your exit strategy is to have a BACKUP PLAN. Unfortunately sometimes things don't go as planned. Your first exit strategy may not always work out the way you wanted. If you have a backup plan in mind you'll be a whole lot better off. It will be much easier for you to deal with whatever problem comes up. For example, if you are buying in a market that is getting ready to go up and you are buying planning for appreciation, that's your first exit strategy. As a backup exit strategy I think it would be good to make sure that the property at least breaks even on cash flow, but preferably cash flows. That way if it takes longer than you anticipated for the values to go up you can at least hold the property and still have it be a sound investment.

This is one of the reasons I don't like negative cash flow investments. It makes it harder to have a strong backup plan when you are bleeding money every month.

Remember, I'm not saying whether you should or should not buy in any particular market you are interested in. That's up to you. I'm urging you to exercise caution. Don't just buy because everyone else is buying or it seems like such a good deal. That's not smart investing. Do some research first and then have your exit strategies in place.

How to quickly analyze real estate market timing charts

2009-08-03T16:54:00.000-04:00

I received a very good question today regarding the real estate market timing charts at REMarketStats.

JP asked:

"There's no doubt in my mind that timing emerging real estate markets can be super profitable, and your indicators are great. The problem I have is this...

To determine the next emerging markets, I would have to study hundreds of charts every month. Is there some easier way to do this?"

JP asked an excellent question and I wanted to share my answer with everyone.

In fact, there is an easier way to make use of the real estate market timing charts. Certainly the first couple of months will take a bit longer no matter how many charts you look at because it takes a bit of time to become comfortable with analyzing them. The training videos on the REMarketStats site certainly will help you to learn how to analyze the real estate markets. In fact, I can read through the 230 or so charts in about 3 hours now because I’m used to looking at them. So definitely over time it will get quicker.

But more importantly, it really isn’t necessary to look at every single chart. It will depend some on your investment criteria but what you’ll probably want to do is to keep a “watch list” of markets you are interested in. That way each month you can just look at the charts that meet your criteria. It will go much, much quicker that way.

For example, a market like Flint, Michigan or Dayton, Ohio probably wouldn’t be on your watch list unless you live in that area or you are buying purely for cash flow and not appreciation, because even when the indicator data is up in those markets the appreciation rate isn’t nearly as strong as in other areas.

Also, some markets may have entry price points that are just too high for you to want to invest in, even if the home prices appreciate quite well when the indicators are up. Markets such as San Francisco or Washington DC are going to be much too expensive to cash flow or even have a low negative. If having positive cash flow or at least break even cash flow is high on your priority list you can also take those types of markets off your watch list.

Other criteria to consider are markets that are in population decline. For the most part you probably won’t see these markets having significant appreciation rates any time soon.

Once you establish your criteria and then put together a watch list you can probably review those markets each month in about 1 hour, which really isn’t that much time at all. If you can spend only 1 hour per month to determine the best real estate markets for you to invest in, isn't that time well spent? Especially since it can make you tens of thousands of dollars more in profits per deal.

Real Estate Timing – NEVER pay taxes

2009-07-30T10:45:00.000-04:00

In my last post I talked about doing 1031 exchanges with real estate timing as a way to pay ZERO capital gains taxes when you sell a piece of property.

This is a great strategy to really build your wealth because you can grow it so much faster if you aren’t having to pay a huge chunk of money to the government each time you sell. However, I also pointed out that 1031 exchanges are tax deferred, meaning that eventually the government wants their money. They’ll get it as soon as you sell a property and actually keep money from the sale.

So is there a legal way to avoid this? You bet there is. You’ve got several options.

Let’s look at the first choice. Let’s say you use the real estate timing market momentum charts to buy a real estate investment and then down the road when the momentum charts say its time to sell you want to sell and move only part of your profit into another property. You want to keep some of that income for yourself. Any portion of the income you keep would be subject to capital gains tax. Wouldn’t it be nice to not have to pay any tax on that?

Here’s a good way to do this. When you sell the first property and move your profits via 1031 exchange into the next real estate investments, hopefully more than 1 now so you can really grow your wealth, move ALL of the profits into the next investments. Stay with me here, I’m going to explain how you’ll get to keep some of it. After you meet any seasoning requirements necessary do a cash out refinance on one of the investments. This way you can get that money without it being a taxable event!

Let’s say you’ve been doing 1031 exchanges for a while now, you’ve really made some money in real estate investing but you are ready to retire. Now if you were to just sell your real estate investments the tax man would come calling wanting Uncle Sam’s cut. So what do you do? There are a couple of options here and I like the idea of using a blend of them.

First, let’s say you want to get a big chunk of money out. Here is a creative way to handle it. Do one more 1031 exchange. You’re going to sell off some of the investment properties and use that money to purchase another home via 1031 exchange. Let’s say for example you sell off 2 properties for $200,000 each and then move the money via 1031 exchange into a much nicer, beach front, single family home for $400,000. You need to turn that home into a rental for at least one year. Then after the rental period you can turn it into your principal residence. If you choose, you can sell your existing principal residence and take advantage of the principal residence tax deduction (the first $250,000 is tax free if you are single, $500,000 if you are married). You may also want to keep the family home, that’s completely up to you. The point is that this second home needs to become your principal residence for at least 2 years, then you can sell it and use that principal residence tax deduction to take your 1031 exchange profits out – TAX FREE!

Do you see how that works? You did a 1031 exchange into a single home. You have to rent it for a period to meet the 1031 requirements and then by you living in it for 2 years it becomes your principal residence and qualifies for the principal residence deduction so when you sell it those profits are now tax free.

Obviously you’ll need to meet the 1031 requirements and the principal residence deduction requirements to do this. I’m certainly no tax advisor so I recommend you talk with one as well as a 1031 specialist to do this right.

Myself, I also really like the idea of having rental income when I retire. Real estate is how you build wealth, it’s also how I think wealth should be kept. That way when you retire you have that rental income coming in no matter what you do. A common expression the wealthy use is “never touch the principal.” In other words live off the income the principal generates without depleting the principal that way you’ll always stay wealthy. That’s exactly how rentals work. You keep the principal in place, the real estate investment, and live off the rental income when you retire.

So when you are ready to retire you can do 1031 exchanges and move your many real estate investments into a couple or few apartment buildings. Remember, the tax man only gets paid from the tax deferred exchange if you keep the money from the sale. If you sell those properties and do a 1031 exchange into apartment buildings that you are going to keep for the rest of your life you don’t have to pay the tax. Then you can live out your days with rental income coming in each month no matter what you do.

I know this is a long post, but I’ve got one more idea to throw out as well. Normally when you hold a rental property you take a depreciation deduction to help reduce the amount of tax you have to pay off the rental income. This depreciation deduction would be subject to recapture when you sell the property. But NOT if you do a 1031 exchange!

Just remember to please talk with a tax advisor who understands 1031 exchanges so you can really make this work for you. Also talk to a 1031 exchange specialist so you do that properly.

Real Estate Timing and Paying ZERO Taxes

2009-07-28T11:16:00.001-04:00

Yesterday I did a post on real estate timing and avoiding taxes and I promised to follow it up today with a way to pay ZERO capital gains taxes on your real estate investing.

The point of real estate timing is to buy low when a market is down and then sell high once the market has climbed back up again. We know which markets to do this in from the real estate timing market momentum charts at REMarketStats. Once you have purchased in a particular market you want to watch the charts to know when to sell. At the same time you want to be watching the market momentum charts in other real estate markets to identify the next markets you want to invest in. Once you sell your property from the current market you move to the next market where you can buy low and then sell high again.

The only catch with this is that normally you would have to pay capital gains tax each time you sell. It would be long term capital gains but it's still a big chunk of your profits getting eaten up by taxes. That's less profits you have available to put into the next deals. We want to grow our wealth in real estate and we do this buy increasing the number of deals we can do. If we are paying taxes on these deals each time we sell it means we have less money available to buy more deals.

Our goal isn't to just buy one property at a time. It's to use the profits generated from the last deal to buy more than one deal the next time. What I mean by this is, let's say you use the real estate timing charts to pick your first market to buy and you purchase 1 real estate investment. Once it comes time to sell you are ready to move onto another market. You can use the profits from that sale to buy 2 investment properties in the next market. Once those properties are ready to sell and you move on to the next market after that you can take the profits from those 2 properties and buy 4. See how this grows exponentially? Just starting with one real estate investment is enough to grow your wealth into many, many properties. Sure it takes time but the payoff is well worth it.

The only problem here is that if you are paying capital gains tax each time you sell it's that much less money you have available to put into the next properties. So how do you avoid captial gains? 1031 exchanges! This is a perfect legal tax deferred exchange that allows you to take the profits derived from one real estate transaction and move them into another without paying any tax at all! Think about it, let's say you make a $75,000 profit off your first real estate investment where you used real estate timing. If you had to pay taxes on that it would be a big chunk of your profits, like tens of thousands of dollars. The taxes alone would be almost enough for a down payment on another property!

If you do a 1031 tax deferred exchange you don't have to pay any of that tax and can move it into the next properties. Sounds too good to be true? It's not. This is a legal device set up by the US Government and recognized by the IRS.

There is one small caveat though, 1031 exchanges are tax deferred exchanges meaning that eventually the IRS would want their money. Except there are two great solutions even for this so that you NEVER have to pay them back. I'll talk about these tomorrow.

Real Estate Timing and Avoiding Taxes

2009-07-27T09:01:00.001-04:00

Real Estate Timing is all about growing your wealth in real estate. As we all know though when we sell real estate investment property it's subject to capital gains tax. Income taxes are a quick way to substantially reduce the amount of money we can make in real estate. They chew up a big part of our profits. This is especially the case with quick flip properties.

Properties that you hold for less than 1 year are subject to your regular tax rate. This can easily chew up about 1/3 of your profits. Quick flip real estate deals are things like wholesaling, rehabbing, short sales,and probate. Don't get me wrong. I'm not knocking any of these real estate investing techniques. They can be great ways to make money in real estate.

Longer term properties that are held for more than 1 year are subject to long term capital gains instead of short term. This can substantially reduce the amount of income tax you are paying on your real estate investment. Lease options, land contracts, emerging market investing, and rentals would fall under this category.

Real estate timing can fall under either category, depending on how you are using it. If you are using it to decide what investment strategy you should use in your own real estate market then it will be either one or the other tax category. For example if you use real estate timing and determine that you are in a declining market, you aren't going to want to hold properties very long because they'll lose value. This is a good market for short sales and wholesaling, both are subject to short term capital gains. However, if you use real estate timing and determine that you are in a market that is about to go up then you'll want to hold for a while and capture appreciation. You might want to buy a cash flowing rental property and hold it until the real estate timing market indicators tell you it's time to sell. In this case you would be subject to long term capital gains.

The other approach is the national investing approach where you use the real estate timing charts to select the best markets in the country for investing. When you do that you are going to be holding longer term. This strategy will make you more money on your deals because you are investing in the best markets instead of just in your own back yard. Plus it gives you the advantage of paying less in taxes because your investments will be subject to long term capital gains. So you get to keep more of that money too.

Obviously the less we have to pay in taxes the better. We love our Uncle Sam but we work hard for our money, so we'd like to keep as much of it as possible in our pockets. Tomorrow I'm going to talk about a strategy that allows us to pay NO TAXES at all so be sure to check back.

Where should you buy in real estate investing?

2009-07-23T11:54:00.001-04:00

Identifying the right markets to buy in using real estate timing is the first step of buying.

Once you have identified a market however, you need to select where you want to buy your real estate investment. All real estate markets have different neighborhoods, some more desirable than others.

There are two good ways to select the right neighborhoods to invest in once you’ve identified the right real estate market using real estate timing. These aren’t the only ways, but they are good methods for smartly selecting where to do your real estate investing.

The first way is to buy where there are good schools. Most MSAs have different school districts, especially the larger ones. But even the MSA where I grew up, Ann Arbor, which isn’t huge still has multiple school districts: Ann Arbor, Ypsilanti, Saline, Dexter, Chelsea, Willow Run and so on. Some of those schools are very good and some aren’t so good. School districts can be very reflective of desirability. If you buy close to good schools you are going to have more people wanting to rent your real estate investment during your hold period and you are going to have more people wanting to buy when it comes time to sell. There is a trade off however, in that the areas with the best schools are also likely to have higher prices. So you’ll need to find a balance between schools and affordability. You certainly don’t want to be carrying a large negative cash flow during your hold period. I hate negative cash flow!

The second way to buy is to look for up and coming neighborhoods. If they have good schools that’s always a bonus, but in the up and coming neighborhoods you are more likely to see a younger crowd who is more interested in the quality and quantity of amenities, because most of them don’t have children yet. Neighborhoods that are starting to see revitalization are great for this. These buyers tend to prefer smaller, starter homes or even condos but they want lots to do around them. Coffee shops, nightclubs, theater, arts, music and so on. This is a kind of emerging market investing. When the real estate timing is right and this type of neighborhood is up and coming you’ll see a rapid upswing in desirability.

Once you’ve identified the market you want to invest in you need to start doing the research to select the right area within that market. The internet is a great asset to get you started. I also recommend talking to some real estate agents. Ask them about neighborhoods and resources to find out where the good schools are, where people want to live and so on.

There’s nothing wrong with conservative real estate investing

2009-07-22T09:32:00.002-04:00

I know a lot of the real estate gurus talk about having lots of deals in the pipeline to grow your wealth much faster. They talk about how you should always be looking for more deals and not stop looking while you have ones you are trying to cash out on.

Yes, it’s true that if you constantly have deals in your pipeline that you’ll grow your wealth faster – as long as nothing goes wrong. The only problem with this is that I’ve found when it comes to real estate investing something always goes wrong. Sometimes it’s just a little thing, but other times it’s a much bigger problem. The thing about constantly having deals in your pipeline is that you are substantially increasing your risk.

Especially if you are a beginning investor I strongly recommend that you take a more conservative approach to your real estate investing. Start at a slower pace. But most importantly make sure you have plenty of reserves! The easiest way to fix a problem in your real estate investing is to make sure you have the money available to pay holding costs, repairs or whatever else comes up. If you have sufficient cash reserves then you can weather almost any problem that comes up.

I know a lot of investors don’t have a lot of liquid cash on hand. This is why I recommend being conservative. When you get cashed out of your first deals set money aside for reserves for future deals. If you have 6 months of holding costs set aside for each property you have in inventory you’ll be in good shape no matter what might come up. I know that might seem like an awful lot to have just sit idle but it’s worth it.

Once you start building up your reserves then you can start increasing the rate you acquire deals. You’ll have learned a lot more and will be a lot more comfortable so the challenges that come up as part of real estate investing will be easier to deal with.

Another important aspect of conservative real estate investing is to have a backup plan. What is your alternate strategy if your first option doesn’t work out? For example, if you are rehabbing a property to sell what do you do if you can’t find a buyer? You might want to try a lease option or even hold the property as a rental. It’s a good idea to think about the numbers on your backup plan BEFORE you buy. Will it cash flow as a rental if you have to hold it? What’s the rental market like in that neighborhood? Do you have end financing available if you need it?

I’m all for real estate investing to build your wealth. I really believe it’s the way to financial freedom for average folks like you and me. But don’t try to bite off more than you can chew. Build up your reserves, have backups plans. These are the things that will make your real estate investing career so much more enjoyable, less stressful and ultimately more profitable.

Real Estate Investing - Selling Homes

2009-07-21T10:42:00.001-04:00

Yesterday I did a post on the importance of real estate timing and knowing when to sell. Today I'm going to give you a few tips on selling investment properties.

In many cases when we sell investment properties they are empty. No matter how gorgeous the home might be it puts us at a disadvantage with most buyers because they can't visualize their belongings in an empty home. I had this happen a number of times where I was selling a freshly rehabbed property or even a great lease option property that was empty. The home was in great shape, in many cases it was one of the best in the neighborhood without being overpriced, and yet because it was empty buyers couldn't picture living in it.

Here are a few tips I've come up with to help overcome this:

1. Stage the home - This isn't always an affordable option but when you can it's worth it. Hire a home stager to furnish the home (even just key rooms in the home). Time and time again home stagers have proven that when they make a home gorgeous you'll get offers more quickly and for closer to your asking price.

2. Turn on the lights - I know we like to keep our costs down so we don't eat up our profits but home buyers aren't going to be interested in the home if they can't see if and everything looks dark. Put in some lamp timers for rooms that get plenty of natural light during the day. But any space that isn't well lit during the day should have the lights on all day. Don't make the buyers turn on the lights!

3. Flowers and plants - Buyers love to see fresh flowers and green plants. Don't buy artificial ones! They are massive dust catchers. Put in the real deal and make sure they are taken care of.

4. Chocolate - Put a bowl of wrapped chocolates in the front entry right next to a stack of flyers about the home. After all who doesn't love chocolate? It's cheap and it's a nice little trick to get the buyers attention to take a flyer with them.

5. Fresh scent - get some Glade plugins or something similar and have a couple of them in the house. A pleasant smell appeals to buyers, but an overwhelming smell doesn't so don't overdo it. Make sure you replace them if they run out.

With the exception of home staging most of these home selling tips are extremely affordable. Even if you use real estate timing to time your sale, so you'll be selling when everyone else is buying it's still a good idea to make your home as desirable as possible for your buyers. The faster it sells the sooner you'll get paid and can then move on to the next market where the real estate timing charts say it's time to buy.

Real Estate Timing - Knowing When to Sell

2009-07-20T09:07:00.002-04:00

I’ve talked a lot about real estate timing and knowing when to buy, whether you are in real estate investing or are a real estate agent. It’s a topic that’s been on everyone’s minds lately - when is it safe to buy again. But real estate timing and knowing when to sell your home is just as important.

If you currently own a property you are thinking about selling or if you are planning on using real estate timing to buy and then sell after the property has appreciated you need to know when to sell your home. If you are thinking about selling now you are probably wondering is your market in decline and how much more is it going to go down. Your goal would be to minimize your losses and sell before property values decline further in your area. Not every place in the country is in decline right now! Despite what the news media is broadcasting you need to remember that real estate markets are local. Some are going down, but some are also going up. Keep this in mind when you do your real estate analysis.

Before you just put your home up for sale you should find out which your market is. After all if your market is going up that means it isn’t time to sell yet.

If you are planning on using real estate timing to buy and then sell later you need to watch the market you bought in. If you used timing to buy you need timing to sell too. The market momentum charts at REMarketStats can show you when to sell so you get out before the market turns. Remember, we never want to sell at the peak of the market. While that may seem like a great way to maximize on all of the appreciation, the peak of the market is really the beginning of the decline. If your property doesn’t sell quickly you’ll find yourself at the beginning of a long downward trend.

Real Estate Timing for Realtors

2009-07-16T09:52:00.001-04:00

Are buyers in your market sitting on the fence?

A lot of real estate agents I know are hurting these days - some have even dropped out of the market entirely. Let's face it, in the current financial climate there are just fewer buyers out there. Some would be buyers are having trouble getting mortgages and some would be buyers are just waiting to see what happens with the market.

Both of those situations are making it very difficult for Realtors. It makes it hard to sell listings and it makes it hard to find buyers. Fortunately there are solutions for both of those problems.

How do you convince buyers sitting on the fence that it's time to act? Real estate timing. The problem is that the news is too much gloom and doom, and even when they talk about signs of recovery no buyers want to be the first ones to take action. They want to wait until it's clear that the market has recovered and it's safe to act. The reality though is that if they wait until everyone else is buying then they'll have missed out on one of the best buying opportunities of our lifetime. Buyers really should be buying when prices are down not wait until they've already gone back up again.

What most buyers don't realize is that the news and media don't know when people should buy real estate and when they should sell real estate. Certainly there are some markets out there where it may be better to wait, because price declines haven't finished going down yet. But there are a lot of markets out there where prices have flattened or started climbing already. In those markets NOW is the time to act! But you need facts. You need hard data to show your buyers and sellers what is going on in the real estate market.

The real estate timing charts we offer are the perfect solution for real estate agents trying to get buyers off the fence. By calculating a real estate market's momentum we can determine whether a market is going up or down, which means they show us whether it's time to buy or not. Imagine being able to show these charts to your potential buyers. Show them what's really happening in YOUR real estate market. Not just the attention getting headlines that the media loves to publish. And the best part is, these charts are VERY affordable - only $19.95 per month!

If you want to learn more about real estate timing take a look at the video titled, "How Market Indicators Work"

I also mentioned some buyers out there who are ready to act but can't qualify for a mortgage right now. Those buyers are painful to turn away these days because you know they are buyers, they are ready. What do you do if they can't qualify for a mortgage? There are alternatives. Lease options are a great choice. It gives the buyer the opportunity to get into a home now before they can qualify for a mortgage. Then they can improve their credit while they are in the home and buy it at the end of the rental period. The best part for you as an agent is that you'll get your full commission instead of just placing a renter - and the buyers and sellers will thank you for it!

There are a lot of sellers out there looking for creative options these days because their home just isn't selling with conventional methods. All of those sellers out there who are telling their Realtor that if they can't sell their home they'll have to rent it out are PERFECT candidates for rent to own. They've already accepted the idea of tenants in their home plus they still really do want to sell - what could be better for them than doing a lease option?

Real Estate Investing - A tip on rehabs

2009-07-14T10:48:00.003-04:00

I did a post yesterday on real estate investing - rehabbing and a couple of mistakes I made. Today I wanted to share a tip on something I did right with the same property. I'll also show you another before and after set of pictures - this time of the bathroom.

I have to say if you are a real estate investor and you are into ugly houses, you can't be faint of heart. I mean look at this bathroom!

It's usually a good idea to make sure you are wearing protective footwear before going into a house like this. After all who knows what you might end up stepping on. By the way, this home was not in a bad neighborhood. In fact, it was in one of the better neighborhoods in the city it's located in.

Back to the point though, one of the things that I really recommend to real estate investors that are buying properties that need work is to MAKE SURE YOU PULL THE APPROPRIATE PERMITS. In this case my contractors pulled all of the right permits and we had the work inspected by the city. After it was all approved the inspectors signed off and cleared the permits.

This is actually good for two reasons. The first is that, I'm a real estate investor, not a carpenter, plumber, HVAC specialist, electrician, etc. Sometimes I do a bit of non-permit related work in houses if I feel like getting my hands dirty, or really dirty in this case. But that doesn't make me a specialist. My job is to find the real estate investment and have an exit strategy, not rewire an electrical panel. This means that I don't actually know how to properly wire an electrical panel. I have to trust the electrician on that. But while I have to trust him it doesn't mean I shouldn't verify (you know what they say, "trust but verify"). That's why having a permit pulled is important, the city inspectors check the contractors work to make sure it meets the appropriate codes.

By the way, on this house the city inspector found that the contractors didn't install enough roof venting so they had to add some in before the inspector would approve it. Since all work has to be done to code, this means I didn't have to pay anything extra to have the contractor come back and do it right.

Here is the after shot of the bathroom. Yes, it really is the same bathroom! Hard to believe isn't it? We actually gutted that bathroom all the way down to the studs and started fresh with it.

The second reason it's so important to pull the appropriate permits is for your end buyers. I'm a licensed real estate agent, so sometimes I list properties myself, which I did in this case. I actually showed it to the family that ended up buying the property. One thing I like to do is to tell them about all of the improvements that have been made - new kitchen, new bath, new roof, etc. This way they know they are getting a totally renovated home. I also told them that we pulled all of the appropriate permits with the city and had it inspected. And you know what? They checked to see if I was telling the truth! They wanted to know that the work had been done right.

Sometimes investors like to cut corners to save on costs when it comes to real estate investing. Pulling permits can be a pain in the butt sometimes because it slows down work while they have to wait for an inspection approval. But it's worth it. If I hadn't made sure the contractors pulled permits for this house I would have lost those buyers.

By the way, I could have made a lot more money on this investment if I had used real estate timing as part of my investing strategy. But I didn't know about it yet. Oh, if I'd only known then what I know now!

Real Estate Investing - Rehabbing

2009-07-13T11:39:00.003-04:00

One type of real estate investing I have always enjoyed is rehabbing. I think what I love about it so much is taking an ugly old house and turning it into something beautiful. Something that buyers want.

When it comes to real estate investing rehabbing is not actually the most profitable niche and it carries some risk. There are other types of investing, such as emerging market investing using real estate timing, that can be far more profitable. Back before I knew about real estate timing though I did a lot of rehab investing. I bought ugly houses fixed them up and resold them. Here is a picture of the kitchen for one of the ugliest homes I ever bought.

This house had been vacant for 7 years! The widow moved out shortly after her husband had died and just left the house waiting to do something about it. The move was so spontaneous that she left food in the fridge and dirty dishes in the sink!

I made the mistake of opening the fridge after I bought the house and the smell almost knocked me to the floor. We had to clear out of the house and let it air out for more than an hour before we could go back in and resume work. In the end we ended up driving screws through the fridge door to secure it shut and took it to the dump without ever emptying it. It was pretty funny, but that fridge was scary!

As you can see this kitchen is all kinds of ugly. Everything was outdated. It stank, it was a mess, it was full of old stuff and we cleared the whole thing out and started over.

I learned some hard lessons about contractors in this house. I had been using a fairly reliable contractor as my general contractor for most of my rehabs but by the time we got to this house he was starting to get burned out. One of the biggest mistakes I made was NOT signing a written contract with him. I thought we had established a high enough level of trust that the contract wasn't necessary, we just used his written estimate and any time I needed change orders he would provide me with a new estimate for those.

This was a big mistake for two reasons. The first was by far the most important - without a contract I didn't have a time clause. As I said the contractor started getting burned out by the time we got to this rehab. The result of which is his work slowed down. Some days he never even showed up (if anyone has ever done rehabs before they know how frustrating it can be dealing with contractors who don't like to show up for work). In the end we finished this rehab about 4 months late. 4 months is a lot of time in rehabs. When you add up my monthly holding costs for that 4 months it ends up being about $8,500 in costs. That was about 1/3 of my profit margin gone because of a slow contractor finishing late.

If I had a time clause he would have been penalized for every day he was late finishing his work. Believe me he would have been a whole lot more motivated to get things done then.

By the way, here is another shot of this kitchen after we finished. Looks a lot better here, doesn't it? Anyway, the other mistake I made by not having a written contract was that I didn't have a warranty for this contractor's work. When you are doing this much work on a house it's pretty much inevitable that something is going to need to be corrected later on. In this case it was the new eavestroughs that we had a problem with. They leaked in one place - right over the front step! That's not a very good place to have a leak, especially when the weather turned cold and then the front step got covered in a sheet of ice from the leaking eaves! Needless to say my burned out contractor refused to warranty his work so I had to hire someone else to come in and fix it.

By the way, I still like rehabs in real estate investing, but my exit strategy has changed some. Instead of fixing them up to resell, my rehab strategy is now buy them using real estate timing, so I know the right time to buy, fix them up and then hold them as rentals until the real estate timing market analysis charts tell me it's time to sell. This GREATLY increases the profit margin on this type of property. By buying at the right time I'm getting the best deals so it makes it great for having the property cash flow as a rental during the hold period.

Real Estate Trends - Use them to your advantage

2009-07-09T11:21:00.001-04:00

It usually takes a big crash in real estate for most of us to realize that real estate goes through cycles. It easy to forget this when your market is climbing through the sky and it seems like it will go on forever. It’s all you hear about then is how great the market is and how everyone expects it will keep going. But when that real estate trend comes to an end and the market shifts we get a rude reminder that what goes up must come down.

Most people wait to jump on the real estate bandwagon until the market is going gangbusters again. The truth is though, you don’t want to be like most people. Even if you learned your lesson about buying at the top from the last shift in the real estate cycle, you don’t want to wait to buy until everyone else is buying. You’ll miss out on all the profit. If you want to use real estate trends to your advantage you have to do what no one else is doing (well, some of us are, just the vast majority isn’t). You want to buy when no one else is buying. That’s a simple way to put it, but you want to do it with the proper real estate timing. If you look at a real estate cycle when do you think the best time to buy is?

We already know it isn’t at the peak of the market, when everyone and their brother Sam becomes real estate investors. We don’t even want to be buying when a market is starting to get hot because we’ve already missed out on a lot of appreciation and it’s a lot harder to find deals then because we are already in a seller’s market. At the same time we don’t really want to be buying when a market is going down. After all, who knows how far prices will drop and how long the market will stay down before it climbs back up.

So where does that leave us? The bottom of the market. This is when no one is buying. Prices are down and the market looks dismal. It’s counter-intuitive, I know. But remember we want to buy when no one else is buying. Why does that work? There are a couple of reasons:

1. No competition - if no one else is buying that means you get to cherry pick your deals. Take only the best ones and leave the others behind

2. Appreciation - the opposite of what goes up must come down is true too. What goes down will go up again! If you buy when the market is down you are set to capture lots and lots of appreciation.

This is how you use real estate trends to your advantage. You essentially act counter to the real estate activity of everyone else. But there is one important caveat. You don’t want to just buy at the bottom of the real estate cycle. I know, I just said to do that but let me clarify. You actually want to buy just past the bottom when the real estate trend is just starting to shift again. The reason for this is that the bottom of the real estate cycle can last a long time. Sometimes years. If you buy at the bottom, who knows how long it will take before you start gaining some appreciation? That doesn’t sound all that appealing does it? If you buy, instead, just as the real estate trend shifts past the bottom, just as the market is poised to go back up then you are properly timing your real estate investment. That’s how you can use real estate trends to your advantage. Want to learn more about real estate cycles? Take a look at this video on real estate market cycles (you’ll need to scroll down to it)

Emerging Market Real Estate Investing - Part 3

2009-07-08T12:46:00.000-04:00

In our first two articles on emerging market real estate investing we focused on the buying and holding parts of the transaction. Here we are going to look at selling our emerging market real estate investment. This is absolutely just as important as the buying and holding. You need to know when to sell, just like you needed to know when to buy.

If you sell too late the market will have already shifted on you from a seller’s market back to a buyer’s market. When this happens home values start to decline. As a seller this is not when we want to sell. We either have to put in a big price drop right away to find a buyer or we end up chasing the market down and holding for a long time with continuous smaller price drops. This results in lost profits and is not how we want to do emerging market real estate investing. The proper way to do it is with real estate timing, just like how we bought. The same market analysis that told us when to buy can also tell us when to sell. We can see this in the real estate timing charts at REMarketStats.

The best time to sell our emerging market real estate investment is BEFORE the market shifts. In fact we want to sell before the market even reaches it’s peak. If you try to milk every last bit of appreciation out of the property you are walking very close to that line of getting caught in a declining market, because the peak and the start of the decline are really very close together. Instead, if we use our real estate analysis and sell when the real estate timing charts tell us to sell we’ll be getting out after having captured a very large chunk of appreciation but not at the top of the market. This is a great way to make money and get out while there is still a buying frenzy going on.

When it comes time to sell, we do the opposite of what everyone else is doing. We are selling when everyone else is buying. It makes life a whole lot easier when you are trying to find a buyer for your emerging market investment. You have very little competition, in fact the buyers may be competing against each other to buy your property. That makes selling so much easier. When we sell we want to get the best value for our real estate investment. That means no deferred maintenance during the hold period. Make sure the home has some curb appeal. It also means you’ll want to use a real estate professional to help you sell. If you bought in an emerging market then it probably wasn’t in your own backyard, it was in a market that was actually going to make you some money. That means you won’t be trying to sell the house on your own, after all you can’t do showings in another city. Besides, it’s much easier this way. Let the professional do their job, that way you don’t have to put in all of the time and effort yourself of trying to get the home sold. Our goal is to make money with our emerging market real estate investment, not have a lot of time consuming headaches just to save a few bucks. If you bought with the proper real estate timing you will have easily made enough money on the property to avoid having to deal with all of those headaches yourself.

Emerging Market Real Estate Investing - Part 2

2009-07-07T12:58:00.001-04:00

In the first article of emerging market real estate investing we focused on identifying our markets and buying the property. Now we are going to look at our hold strategy. Most people think that in emerging market investing we have to buy properties in rapidly appreciating markets with massive negative cash flows. This is not emerging market investing. That is emergED market investing - you are chasing the market. I definitely don’t recommend this. It’s much better to buy when a market is down, when everyone else is selling but the market is about to turn. It makes it a whole lot easier to manage your cash flow.

I like properties that cash flow. It makes life a whole lot easier in real estate. If a property doesn’t cash flow you have to cover the difference. Every month. God forbid you get a vacancy because then you are covering a whole lot of money and get desperate to find tenants. I’ve found that’s when real estate investors start making mistakes. In their rush to get tenants they take the first person to come along simply to cover that massive payment. Usually they end up evicting later because desperate investors draw in deadbeat tenants. It’s like deadbeat tenants have “desperate investor” radar.

If you really do emerging market real estate investing you are buying when prices are low and getting a deal. Now in some markets you still won’t cash flow even at 20% down. Those expensive markets are for investors who like more risk than I do. If the market really is an emerging market the investor will still probably make a lot of money. Myself, I would much rather pick a market that is about to emerge but also cash flows. These days most real estate investments require 20% down if you are buying outright with a mortgage. If you don’t have that much money for a down payment there are always some creative strategies like lease options, land contracts and subject tos that are good for little or no money down investing. By the way, those creative techniques are GREAT for emerging markets, your profits on those deals will be much, MUCH higher than if you do them in declining markets, emerged markets or any other kind of market. Not only that but the deals are much easier to find too.

Most emerging real estate markets are not in our own back yard. That means as an investor we want to take a national approach to our investing, look for the emerging markets with the best opportunities (remember to find them we want to use a real estate timing service, such as REMarketStats) across the country. By being a national investor it means that we will definitely need a good property manager to handle our real estate investment. If you find the property manager BEFORE you buy then they can help give you an idea of what the market rents will be so you can plan for your cash flow situation. Not only that but you’ll want to budget for paying the property manager out of the rental income as well. Some people balk at paying for property management but I’ve found that it is so much easier, so much less headache and so much less stress than dealing with tenants yourself. A good property manager is well worth their fee. I’m not going to go into cash flow calculation here, but I will say that it is very important that you do the calculation before you buy. Also make sure you budget for repairs and maintenance as part of your calculations (10% of the gross rent is a good amount to use) - nobody likes buying properties with deferred maintenance except other investors looking for a deal.

Cash flow isn’t our primary source of income for this real estate investment, appreciation is. But it’s always nice to get a property that cash flows or at least breaks even. Remember, if a property cash flows you can hold it forever and still make a profit no matter what the market does.

In part 1 I also mentioned buying properties that need improvements as part or an emerging market real estate investing strategy. The timing of these improvements does make a difference. You need to ask yourself if you need to make the improvements before you find tenants or when you are about to sell the property. If you are making improvements before you find tenants they should be improvements that are necessary to place good tenants. Improvements like remodeling the kitchen or bathrooms are better done close to when it’s time to sell. That way the improvements are practically new and will appeal much more to your end buyer. Our end buyer is how we make our real profit in emerging market real estate investing so we want a home that will appeal to them and sell quickly for the best profit. And who knows if you make the right improvements your end buyer might end up being your tenant. Then you won’t even have to pay a real estate commission.

technorati claim

2009-07-07T10:44:00.001-04:00

g2k3mfsncq

Emerging Market Real Estate Investing

2009-07-06T11:48:00.001-04:00

The easiest way to make money in real estate is with emerging market real estate investing. With this type of investing you buy in a market that is about to start appreciating and you hold the property until it comes time to sell. It’s very simple, you make your money off the appreciation of the home (and hopefully some cash flow as well).

Let me go into a little more detail. To begin with you need to identify the proper market for emerging market real estate investing. You do this with real estate timing. You analyze real estate markets to see which ones are going up and which ones are going down. That’s no easy trick. The best way to do that is with a service that provides you the tools you need to do it, like REMarketStats. You want to analyze different markets and choose the ones that have the criteria you are looking for. Good criteria are things like solid population growth, strong employment or a desirable location. Maybe a new industry is coming to the area that is going to fuel a population boom. Maybe it’s a “newly found” resort destination.

Once you identify the general area, with the proper real estate timing, you need to find where in the location you want to buy your real estate investments. Every city, town, large metropolis, etc. has more desirable locations and less desirable locations. Obviously the more desirable locations will cost more to buy than the less desirable locations. If you buy in the best area you are going to pay the highest price and will have a whole lot harder time making it cash flow. If you buy in the less desirable areas it’s easier to cash flow but the homes won’t appreciate as well when the market takes off.

I’ve found it’s better to invest in the up and coming neighborhoods, they aren’t as expensive yet but are starting to become more desirable. Up and coming neighborhoods have good amenities but may not be as well established as the most desirable areas. What types of amenities are we talking about? It depends on who is going to live in the area. If it’s young professionals you’ll want close promiximity to restaurants, nightclubs and other entertainment. These people like to get out and do stuff. If it’s a family-oriented area you want good schools, playgrounds, parks and low crime.

Let’s review the steps so far:
1. We want to choose our emerging market for our real estate investing - we do this with real estate timing
2. Through real estate market analysis we choose the real estate market we want to invest in
3. We decide where in the market we want to invest - it’s best to focus on up and coming neighborhoods

The next step is to select a property to buy. Most people think that emerging market real estate investing means you have to pay full price for a property in a rapidly appreciating market and carry massive negative cash flow. NOT TRUE! True emerging market investing means you buy BEFORE the market takes off. You are buying when most people are selling and the market is down but about to turn. This means that there are LOTS of deals out there. You don’t want to pay full price - you want a deal. Make multiple offers on multiple properties and negotiate strongly. It’s a buyer’s market. Not only that but you also want to look for value options. Value options are things like the only home in the neighborhood without a garage, but you can build one. The kitchen and baths haven’t been updated in 30 years - so it’s time to remodel. The house is ugly and has no curb appeal - nothing that a landscaper can’t fix. In a down market most people won’t put money in home improvements because the return isn’t there. But if you buy at the end of a down market and put money in improvements you are going to see a return when the market shifts. Remember in emerging market real estate investing you want to focus on buying deals.

Emerging Market Real Estate

2009-07-03T10:57:00.002-04:00

Emerging Market Investing is a type of real estate investing where you identify real estate markets that are about to take off, in other words home prices are about to start climbing. The idea is you buy early in that type of market and watch the investment grow. If you are interested in emerging market real estate you will find that the real estate timing charts at REMarketStats are perfect for this type of real estate investing.

You can use the real estate timing charts to identify potential emerging markets. This is how you find the markets you want to invest in. Once you have bought in your emerging markets and are watching the home prices go up you hold until it’s time to sell. You’ll definitely want to use the real estate timing charts to watch the market so you know when to sell as well. You don’t want to get greedy and hold too long to milk every last bit of appreciation out of the deal. If you do you may find yourself staring down a long cliff and get desperate trying to sell. It’s much easier if you watch the market timing charts. Knowing when to Sell is just as important as knowing When to Buy.

If you are interested in emerging market real estate you definitely want to take a look at the real estate timing charts at REMarketStats, they’ll give you just the kind of information you are looking for to start identifying your emerging markets.

Real Estate Timing - Not Prediction

2009-06-30T10:45:00.000-04:00

It’s important to be clear that when I talk about using real estate timing to analyze market cycles to time your real estate investing I am NOT talking about predicting the real estate market. A prediction is nothing more than an educated guess, or sometimes not even educated. Remember Jim Cramer? “Bear Stearns is Fine! Don’t move your money from Bear. That’s just being silly!”

Jim Cramer talks about the stock market but it really isn’t that different from real estate. As soon as you try to make a prediction you are moving into the field of speculation and guess work. That may work for some people in real estate investing, but not for me.

The market momentum charts at REMarketStats tell us a market’s current actual situation. What is going on right now in that market. What makes this useful is that this information precedes public knowledge and behavior typically anywhere from 6 to 12 months. Particularly during the peak and bottom of the cycle when we want to take action. So we aren’t precicting with real estate timing, we are making use of market analysis data that tells us what is actually going on before most people know about it. This allows us to buy and sell at optimum times, the times that are going to make us the most money. Want to learn more about how real estate timing and market momentum works? Take a look at the real estate timing videos on our website. We show you actual examples of markets as well as how to interpret the market momentum charts.

Making Money with Real Estate Timing

2009-06-29T13:40:00.000-04:00

In my last post, I showed an example of how you can make money with real estate timing, in fact I showed actual numbers of how much more you can make by using real estate investing timing than if you just followed the mass media. If you haven’t seen the video yet, it’s worth watching. Unless, that is, you aren’t interested in making 3 times as much money per deal.

Today I’m going to show you another example, in Austin Texas. We look at the real estate timing market momentum charts and then compare them to home prices so you can see how the market momentum charts show you When to Buy and When to Sell. Then we compare how much you would make if you bought based on the mass media and how much you would make if you bought based on the real estate analysis charts. How does an extra $50,000 sound?

But I also add an interesting and lucrative twist in this example that can make an extra $75,000! This clip is worth watching just for this twist.

Make Money with Real Estate Timing

2009-06-26T11:46:00.000-04:00

I’ve talked a lot about real estate timing and market indicators in other posts. I’ve explained how real estate timing works.

But I want to show you today how you can use real estate timing in real estate investing. And how that will make you money. You want to make money don’t you?

In fact, it’s quite easy if you know the one key element you need - timing. It shows you When to Buy and When to Sell. Knowing when to buy and sell makes you money, because you can buy low and sell high. Not only that but the real estate timing charts PRECEDE public and mass media awareness. That way you can buy before you miss out on the home appreciation and sell before everyone else is selling so you don’t have to sell when prices are dropping.

Would you believe that you could make 3 times as much with real estate timing using real estate indicators than if you bought based on the mass media?

It’s hard to believe but if you watch this video you’ll see a clear example of how you can make money in real estate with real estate investing timing AND it shows how much MORE you can make.

Real Estate Timing and Market Indicators - Price

2009-06-25T13:39:00.000-04:00

I’ve been talking about assorted market indicators these last few posts and how they affect real estate timing. Timing is critical in real estate investing, it can make the difference between making a profit or taking a loss. It can also make the difference between making a profit and making a really big profit.

When you take all of the market indicators we’ve been talking about and look at the real estate analysis charts at REMarketStats you can see when the right time to buy and the right time to sell is for any given real estate market.

The reason we know this works is because of today’s topic - PRICE.

When you look at the real estate market indicators, the market momentum charts show us the best times to buy and the best times to sell. These charts show historical data as well. When we look at these market momentum charts as we practice real estate timing we can then compare those charts to the average or median price for that real estate market. As we’ve said before, the real estate timing charts precede public and mass media awareness. So these indicators tell us when to act and then shortly after we can see the action reflected in the average or median price! In other words, if the indicators tell us to buy then shortly after we see home prices go up. If the indicators tell us to sell shortly after we see home prices level out or go down. We get in before missing out on all the appreciation and we get out before a market turns down!

The proof is in the numbers and the average or median home price charts give us those numbers. This is how you make money in real estate! Buy when it’s time to buy and sell when it’s time to sell. It’s so simple and yet the historical data shows us that it works. The key element you need to do this is real estate timing. Want to see an example of how it works? This video clip shows you market momentum charts and also shows you the average home price and you can see that if you follow the market momentum charts and buy when they say buy and sell when they say sell you are going to make money in real estate.

Real Estate Trends - Employment Market Indicators

2009-06-24T12:26:00.000-04:00

Yesterday we talked about Unemployment as a real estate market indicator when it comes to real estate timing. Today we are going to focus on employment. But wait, don’t they amount to the same thing?

Not necessarily. We look at both unemployment and employment for real estate trends because they can differ.

Employment is the actual number of jobs in a particular real estate market. Unemployment is the percentage of the workforce that is unemployed.

Here is how they can differ. If a particular real estate market is experiencing a large influx of population, in other words many people are moving to the area either because it offers the promise of jobs, or it’s a retirement hotspot or something like that, you might see the unemployment rate go up for a while. Why? Because people moved there but don’t have jobs yet, or retirees don’t plan on getting jobs. The result is that the unemployment rate doesn’t look as good. Conversely, what if an area is in population decline because the job market really stinks? People are moving away from this market to other markets to look for jobs. The market in population decline would actually see the unemployment rate go down because people are moving away.

But when we look at the employment numbers we can complete the picture. Since employment shows the actual number of jobs we can see that an area that is in population decline that might see an improvement to unemployment would still be showing us a drop in the actual employment. The same goes for a market with an influx of people that showed unemployment going up. When we look at the employment numbers we can see the number of jobs growing.

Both employment and unemployment are longer term market indicators when it comes to real estate investing timing. They show us the overall health of a real estate market over a longer term period. If employment and unemployment market data is solid in a market then we can expect that market to recover quicker in downturns and perform better in upswings than a similar market with poor employment and unemployment market indicators.

Real Estate Trends - Market Indicators - Unemployment

2009-06-23T10:41:00.000-04:00

Today we are going to look at the unemployment market indicator in our series on market indicators when it comes to real estate timing.

Unemployment as a real estate indicator is taken from the unemployment rate. This is expressed as a percentage. This is quite common in the news media, we’ll see the national unemployment rate or the unemployment rate for a particular area. For example, the unemployment rate for the state of Michigan in May was 14.1%, in other words, 14.1% of the available workforce was jobless in May.

Clearly when it comes to demand for real estate the lower the unemployment rate the better. After all if a market is shedding a lot of jobs, not too many people are going to be looking to take on the commitment of a mortgage. With real estate timing and real estate trends, unemployment is a longer term indicator. This means that in the short term trends may temporarily act contrary to unemployment data. You might see this happen in the case where a previous surge in employment resulted in an overbuild of housing which caused a temporary surplus.

It’s important that we look at the actually unemployment data for a particular MSA not just state level or regional or even national. Real estate markets are local so when it comes to real estate investing we need to focus on the local real estate trends.

Real Estate Timing - Market Indicators - New Home Permits

2009-06-22T11:38:00.000-04:00

In continuing with the series on looking at market indicators and how they affect real estate timing I want to look at new home building permits today.

New home building permits are the number of permits pulled in an MSA each month for the construction of new single family homes. This is how we gauge demand for new construction housing in real estate markets. As orders for new homes go up real estate markets respond and builders start building more homes. The addition of new construction housing stock in a real estate market reflects the overall performance of the market. If the demand for housing stock is growing we would see it reflected in the real estate timing market momentum charts for that MSA and the momentum calculation would be above the zero line. If the demand for new construction housing is shrinking we would see the real estate timing chart’s market momentum calculation drop.

When you look at the market momentum charts for multiple market indicators you can see the direct correlation between the market momentum and the values of homes in the MSA. Take a look at this video on real estate market indicators, titled Real Estate Investing - How Market Indicators Work, to see examples of how we look at real estate trends in market momentum and how the real estate timing charts tell us When to Buy and When to Sell

Real Estate Market Indicators - Existing Home Sales

2009-06-19T12:13:00.000-04:00

In my last post I talked about the importance of the real estate indicator population growth when it comes to real estate timing. Today I want to look at the market indicator existing home sales.

This is a very important indicator when we are trying to gauge the overall health of a real estate market. Existing home sales shows us the demand for housing in a real estate market. Existing home sales is the actual number of existing homes (in other words, not new construction) that have sold in a particular market. It isn’t homes pending or homes available for sale, it’s the actual number of homes that sold.

When you perform market analysis in real estate investing you need to measure the current demand against the past performance to see how a market measures up. When we calculate market momentum we do just that. The market momentum of existing home sales shows us the current level of buyer demand as a measure against the past. If the momentum is up it means that buyer demand is stronger than it was, if the momentum is down it means demand is weaker.

We have to keep in mind that it takes more than one indicator to prod us into action. We want to see multiple indicators pointing towards similar action before we jump in and buy or put our real estate investment on the market to sell. But, gauging this level of buyer demand by using existing home sales is a very important indicator to watch as part of your real estate market analysis.

What are Real Estate Market Indicators

2009-06-17T16:32:00.000-04:00

At REMarketStats when we talk about real estate timing we talk about using market indicators to analyze real estate markets and calculate a market's momentum. What exactly are these market indicators we are talking about?

Market indicators are key data elements that allow us to gauge the health of a real estate market. We look at population growth, existing home sales, new home building permits, average or median price, unemployment and employment, the average price of new construction and also, when available, time on market or month's supply. We take all of these indicators together to gauge the health of a real estate market.

I'm going to run a series of blog posts talking about each of these different indicators and how they affect real estate markets and real estate timing. This is critical for real estate investing, it allows you to know When to Buy and When to Sell.

Today let's take a look at Population Growth. Population Growth gives us a great overall long term outlook for a market. If an area is seeing continuous population growth this will lead to a demand for housing over the long term. Areas with flat population growth or that are in population decline are less likely to see large increases in the value of real estate. Population is not a short term indicator, an area may still see shifts in the housing market even if the population is swelling. For example, if an area gets overbuilt too quickly to meet future demand, it may take time for the population growth to catch up, resulting in a temporary buyers market.

Why Real Estate Timing

2009-06-15T15:48:00.000-04:00

If you’ve been reading the REMarketStats Blog, you know that I’ve been saying that real estate timing is more important than real estate location. This is contrary to what you’ve probably always heard. After all the golden rule of real estate has always been location, location, location.

So why would I say that real estate timing is more important? Let’s take a look at it. If you buy a house at the bottom of the market and then sell it to someone else near the top of the market, are you both making the same amount of money? Of course not. You will be the person who makes the money, but the person who bought it might actually lose money when the market shifts. Did the location of the house change?

No. The house is still located in the exact same place.

The location had nothing whatsoever to do with the amount of money you and the future buyer made. The real estate timing is what changed. After all you both bought the exact same house, just at different times.

That is why I say real estate timing is so much more important than real estate location. If you time your real estate investing to buy at the bottom of a market that is about to go back up you are going to make a whole lot more money in real estate than if you buy a property just because it seems like it’s in a good neighborhood.

Real Estate Timing – Knowing When to Buy and When to Sell

2009-06-11T14:25:00.000-04:00

At its heart, real estate investing is quite simple, you want to buy when prices are cheap and hold until prices are high and then cash out. You can make a whole lot of money with this very simple premise. The trick of course is in knowing when to buy and when to sell. That is what real estate timing is all about.

There are a lot of people say that there is no way to know when a market is near its bottom and poised to go back up and there is no way to know when a market is near its peak and ready to go down. Most people just listen to the mass media and if they see that everyone else is buying they buy too and if everyone else is selling then they sell. The problem with this approach is that the mass media and everyone else doesn’t know when you should be buying and selling! You see most people follow the herd mentality, they act once they see everyone else acting. The mass media really does nothing more than report on everyone’s actions. If everyone is buying than the mass media talks about how great the market is and says you should be buying. Then when a market is crashing and everyone is selling the mass media says you better sell before prices go down more. But is this approach going to make you any money? NO! If you buy when everyone else is buying then you’ve missed all the appreciation. And if you sell when everyone else is selling then you’ll be watching prices drop as you are trying to unload your investment.

That approach just doesn’t work. As real estate investors we need a better solution to real estate timing. We need to know when to buy, just as a market is about to go up so we can capture the most appreciation. We need to know when to sell, before a market reaches its peak, so we can take our profit and get out before the market turns down. There is a way to do just that, it’s called market indicators. If we look at certain real estate market indicators and calculate a market’s momentum we can actually see whether it’s time to buy or sell in any real estate market. Market momentum is an extremely powerful tool in real estate timing.

And it works!

REMarketStats has analyzed over 200 real estate markets and used historical data going back as far as 15 years and when the market momentum says buy we see home values going up shortly after. When the market momentum says sell home values level out or go down. The numbers don’t lie! This is the kind of invaluable tool a real estate investor needs, it tells us when to buy and when to sell and it has been proven based on years of historical data to make money. You can literally make tens of thousands of dollars more per property just by knowing the right time to buy and the right time to sell.

It took years of research to bring this real estate timing data together but it’s available now to real estate investors at an unbelievably affordable price. To learn more about how market indicators and market momentum works watch this real estate timing video.

Real Estate Investing - Real Estate Timing

2009-06-10T15:20:00.000-04:00

In yesterday’s post we took a look at how to do a real estate market analysis. Today we are going to look at a second one but a little quicker. This time you’ll be able to see how easy it is to do real estate timing on a real estate market.
No matter what your investing strategy, be it rentals, rehabs, lease options, land contracts, foreclosures, wholesaling or pre-construction you’ll see how real estate market analysis can help you determine the best strategy for a particular market based on real estate timing. Have you ever wondered why certain investing techniques, say rehabs for example, work better under certain market conditions than others? There is a whole lot more competition for fewer deals under the wrong conditions but the deals are much easier to do under the right conditions. Real estate timing can show you the best real estate investing technique to use based on your market’s current conditions. That way you don’t have to struggle to find the deals and then struggle to do your exit strategy. You’ll make a whole lot more money if you use real estate timing to choose the right strategy.

Real Estate Investing - Market Timing

2009-06-09T16:39:00.000-04:00

For real estate investors to successfully practice real estate timing, they must be able to analyze the market indicators for the real estate markets they are interested in. This clip shows an example of how a real estate investor can analyze the market momentum charts available at REMarketStats to practice real estate timing.

The key to real estate investing, to make money in real estate is timing. Real estate investors need to know when to buy and when to sell. Market indicators help provide the “when” of real estate investing. Real estate market analysis using the proper market indicators can provide real estate investors with information that precedes public knowledge and mass media awareness. that is what makes real estate timing so valuable.

Real Estate Analysis - only useful Market Statistics need apply

2009-06-08T13:12:00.001-04:00

When it comes to real estate timing you need to do it with real estate market statistics that are actually useful. Unfortunately most market statistics published by the media have pretty much no value at all in regards to real estate timing. The result is that the average real estate investor has no way to time their real estate investing.

At REMarketStats we use a moving average to calculate our market statistics to account for seasonal and other types of variations that can crop up in real estate statistics. Then from that moving average we calculate the market momentum. This is what actually allows you to look at the real estate trends and practice real estate timing.

Let me give you a comparison. If you were to just look at some published statistics for a real estate market you are interested in, for example - existing home sales, all you would be able to do is a direct comparison from one month to another. This month versus last month, would be one way to compare. You can see whether sales are up or down from this month over last month. But what good is that really? Pretty much none. That information doesn't give you any indication of real estate trends or whether home prices are likely to be going up or down. You need market statistics that are actually useful so you can do real estate timing and actually make money in real estate.

Here is an article that talks about the moving average calculation and why most real estate market statistics are useless.

Real Estate Timing

2009-06-05T11:23:00.000-04:00

Happy Friday! We are at the end of the first week now of our official launch. We went live on Monday and we've been getting some pretty positive feedback so far. Our goal at REMarketStats is to help as many people as we can with real estate timing. It's very important, we learned that lesson the hard way. To help people we've got to get the word out about real estate timing and how it can help real estate investors.

I think we've gotten off to a pretty good start so far. If you search YouTube for real estate timing, you'll see that we now have 5 videos on the front page. And we have 2 videos on the front page of Google videos for real estate timing. It's a great start and we look forward to continuing our growth and getting the word out. I encourage all real estate investors to share the link to our blog and our website and let other's know about real estate timing. Sign up for our newsletter on the REMarketStats homepage.

Thanks for a great first week!

Bob

p.s. By the way you can now follow us on Twitter too - our Twitter name is REMarketStats

Real Estate Investing - Real Estate Cycles

2009-06-04T14:05:00.000-04:00

Real estate cycles are a critical component to real estate timing, something that anyone in real estate investing should know. Understanding and timing market cycles successfully can help make you a lot of money in real estate investing. By understanding the market cycles you can practice real estate timing - where you buy when prices are down and sell when prices are high.

The key to this is you have to be counter cyclical in real estate investing. The average buyer buys near the peak of a real estate market cycle and sells near the bottom of a real estate cycle because they follow the herd mentality. but that's not how you make money. In real estate investing you have to break from the herd mentality with real estate timing by using the real estate cycles. This is how the wealthy make their money. They buy when everyone else is selling and sell when everyone else is buying.

Real Estate Investing - When is it Safe to Buy

2009-06-03T13:23:00.000-04:00

The question on most everyone's mind these days is when is it safe to buy again? It affects regular home buyers as well as those in real estate investing. Most of us want to try to do real estate timing because we don't want to lose money right away. Of course the answer to that question varies depending on where you live and what you plan on doing with the property once you buy. I'll talk about exit strategy in another post.

Real estate markets are local. No matter what you see in terms of national stats they really don't mean anything for your local real estate market. Local markets are affected by things like local home sales, local new construction and local employment. One area in the country can be going up, while another area can be going down. In fact, that is exactly what is happening right now. There are a lot of areas going down right now, but some are either flat or going up. That means that in some places it is already safe to buy. Of course, we all hear about in the news how every place is going down. Or they'll try to run some headline about how the recession is over, but if you live in one of the areas that's going down I imagine you find those pretty hard to believe. That's certainly the case where I live - where home prices have dropped another $15,000 in the last few months.

So the answer of when it's safe to buy again depends on your local real estate market. The only way to really know is based on what the market indicators look like in your market. Is the market momentum showing a recovery or is it still saying to wait. Obviously you don't want to buy if your market is still going to drop by tens of thousands of dollars more in home prices. You'll wind up massively upside down within a couple of months. I think it is definitely worth asking the question of when it's safe to buy. After all, really knowing when to buy and when to sell is the essence of succesful real estate investing. This is one of the great things about the real estate market analysis charts at REMarketStats. You can ask the question of when is it safe to buy again and look at the charts for your area or other areas you want to do real estate investing in and find the answer in the real estate timing charts.

Real Estate Analysis

2009-06-02T14:15:00.000-04:00

The key to real estate investing, to make money in real estate is timing. To do that we have to perform real estate analysis. Real estate investors need to know when to buy and when to sell. Market indicators help provide the "when" of when to buy and when to sell in real estate investing. Not just any market indicators can provide this "when", however.

Real estate market analysis using the proper market indicators can provide real estate investors with information that precedes public knowledge and mass media awareness. That is what makes real estate market timing so valuable. REMarketStats.com is dedicated to helping provide you with the tools you need to properly time your real estate investing purchases and sales. Real estate market analysis is an invaluable tool for all real estate investors. You can make tens of thousands of dollars MORE per property just by timing your real estate investing. This video demonstrates exactly how market indicators correlate to real estate appreciation.

Real Estate Investing Timing

2009-06-01T15:16:00.001-04:00

Most people say that the key to successful real estate investing is location, location, location. But the truth is that location doesn't matter nearly as much as timing, timing, timing. If you buy at the right time and sell at the right time you are going to make a whole lot more money than if you just buy based on location.

Knowing the proper timing, however, isn't so easy. The mass media doesn't know. If you look at the headlines in the past they preach to buy when a real estate market is going crazy - usually just before it's about to go down and long after all of the gains have been made. Then after it crashes they say you should have sold 12 months ago.

The average real estate agent doesn't know. They tell you to focus on location, location, location and that there isn't anything you can do about timing.

So how can you properly time your real estate investing? With Market Indicators. By properly analyzing the right indicators and looking at a Market's Momentum you can buy when a real estate market is down and sell when it's high. That's how you make money in real estate.

Welcome to the REMarketStats Blog

2009-06-01T15:04:00.000-04:00

Hi, this is Bob with REMarketStats. I want to personally welcome you to our blog.

Our main focus here is, of course real estate market timing, but we will also look at some other real estate investing topics as well.

As a real estate investor I have done rentals, rehabs, wholesales, lease options, bought bank owned REOs, put together short sale packages and done pre-construction deals. I have also made just about every mistake imaginable doing all of those different techniques. ;-) I am also a licensed real estate agent as well and have done conventional listings and sales.

My favorite real estate investing technique is without question rental properties, when purchased with the proper real estate market analysis. I like these so much because you can double up on your profit centers with both monthly cash flow as well as appreciation. This is the key to long term financial wealth, how you reall make money in real estate.

I welcome you to look around the REMarketStats.com website, there are free articles and video training clips. We will regularly be posting more as well so be sure to check back.

-Bob
www.remarketstats.com
Your Source for Real Estate Market Timing