Minnesota Real Estate Investors Association, Inc.

Minnesota Real Estate Investors Association, Inc.

Existing-Home Sales Surge


Sales increased 9.4% from August 2009. Increases ranged from 4.4% to 13% around the country. This is a good sign, but prices are still declining at 8.5% decline from the same time last year. However, this is the smallest decline in the past 13 months. (Information provided by the National Association of Realtors® )

We still have a long way to go, but as Lawrence Yun states “As long as home values continue to decline, I do not see how the economy can recover on a firm foundation”, the decline in housing prices is a clear indication that Americans are cutting back on spending and trying to budget for the future. So for many homeowners, they will either continue to owe more than their properties are worth, will have to do a mortgage modification or even lose their house to foreclosure.

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Will the $8,000 First Time Homebuyers Tax Credit be Extended?


First Time Home Buyers Tax Credit

The tax credit has helped a lot of first time home buyers get into a new house with little or nothing down. This has spurred a lot sales that would not have otherwise occurred if there was no first time homebuyers tax credit. This has also helped the economy and the housing market stabilize.

So why wouldn’t congress extend the $8,000 First Time Homebuyers Tax Credit? There are many reasons for and against it. I don’t really care which way they go, I just need to know, so that I know how to plan ahead. And today they just announced that

Is FHA the Next in Line for a Bailout?


Why not? Every other financial institution has received one, isn’t it about time the feds bailed out themselves. After all, it’s not their money, its ours.

Here is a report I found on Mortgage News Daily

The only reason I think that FHA is even talking about a bailout, is because their counterparts Fannie Mae and Freddie Mac got a bailout. Now granted, there are a lot of FHA borrows who are also going through foreclosure, but I haven’t seen the same kind of number

How to Get Your REO Offers Accepted


As an investor who has been making a lot of offers on REO’s I know the challenges that everyone is facing today getting their offers accepted. The next hurdle has become getting to the closing table. I have heard and tried a lot of different techniques lately and here are a few of my observations.

First of all, there is a lack of inventory right now in many places. For example, here in Minnesota we have a 6 month redemption period. So all those properties that didn’t get foreclosed on back in November 2008 thru March 2009 are not on the market yet. Expect a flood of REO properties hitting the market late this year or early next year.

Tip for Realtors:

While doing some research, I came across this article title “ Top 20 tips for making offers on Freddie Mac /Home Steps REO properties” and thought it was worth linking to.

Secondly, the $8,000 tax credit is due to expire on November 30, 2009. This has caused a lot of buyers who qualify for the first time home buyers tax credit to buy now.

Third thing I have noticed is that the lenders have loosened up their financing guidelines somewhat as of late, which has allowed a lot of investors who can qualify for mortgages to pick up these REO’s for long term rentals. Which is a good strategy right now if you can get the financing. Even non-owner occupied interest rates are relatively low right now which has allowed for good cash flows from rental properties that were picked up as REO’s.

What are your thoughts about this Real Estate Market?


I was just talking with a close friend Robyn Thompson (The Queen of Rehabs) on a conference call last night with a bunch of students. And we got to talking about what kind of properties not to buy in today’s market and something she said made a lot of sense. She said she will not buy a small house right now.

While that makes sense, I had not put a lot of thought into it until last night. I have noticed a few things from buyers that told me that I should only be dealing with larger homes, but I hadn’t spent much time thinking about it. So I probed Robyn a little more about her philosophy towards buying larger homes and here is what we talked about.

First of all, because a lot of people are losing their jobs, they are starting small business and they are usually converting one of their bedrooms into a home office. And then I mention one other trend that I have been noticing. A lot of younger people that are losing their smaller homes to foreclosure and are being forced to move in with their parents or other relatives. And it doesn’t look like this is going to be a short term trend. I have talked to a lot of buyers recently that said that they are looking for a larger home because their sons, daughters and their spouses are moving in with them.

Also with the cost of elderly care and nursing homes, more and more people want to have their elderly parents live with them. There is yet another trend that Robyn Mentioned that I also agreed w

Do You Feel That You Are Behind In Your Online Real Estate Marketing?


This question is like quicksand to many investors who feel like this new wave of technology has passed them by, and for that matter who can blame them?

But in business it isn’t about blame, it’s about identifying opportunity and seizing it… Figuring out what’s broken and fixing it… Growing, adapting, and recognizing… To those who are up to their knees in sand there is a very simple solution to getting out:

Grab the stick and slowly pull yourself out. In this case I am referring to getting a website and slowly building traffic through education, trial and error, and common sense. Fact of the matter is that you don’t need a full blown website with all sorts of doodads on it. Why? Because all those doodads distract from the main purpose of having a site, if you have all sorts of reports, weather plug-ins, news streams, and pages galore you’re sinking again.

What you want your website to do (fortunately) is very simple.

  1. Convince your visitor to take action
  2. Get Their Contact Information (to form a lead, either motivated seller or buyer)
  3. Advertise your properties/deals

Informing them of the latest Mortgage News Daily updates does not do anything for you except take your visitor to another page, one that isn’t yours! And you’ve lost them. After years and years of testing bells and whistles we’ve come to the conclusion that a lean mean lead generating machine is the way to go.

The key word being LEAN!

Think of things from the motivated seller’s point of view:

Are you using a Professional Website for your Real Estate Business?


I often joke with people when they ask me why most people get into real estate. I usually answer them with this statement “Most people get into real estate because they are afraid of technology”. I usually get a lot of laughs when I make that statement, but the real truth is that statement is closer to the truth for most people than you would think.

Free Real Estate Websites A lot of people get into real estate because they lost their job or are afraid of losing their job because of a younger more technology friendly work force. The younger investors getting into real estate have no problem embracing technology and have the ability to create and host and maintain their own websites. However, the younger generation makes up a small percentage of real estate investors in today’s market.

While I am not one of the younger generation, I am computer savvy and I have been building, hosting and maintaining my own websites since the mid 90’s. However, most investors don’t know how to create a website, let alone how to host it or even maintain it on a regular basis. I have even talked to a lot of investors who have websites; some of them have even pa

Where is the next investment opportunity?


Real estate is changing at an ever increasing pace.  A few years ago, you were hard pressed to find an abundant supply of Bank REO’s on the market.  Short sales were the rave and houses were still selling so most potential foreclosures were either going through a short sale or were sold before the banks got possession through foreclosure.

Then last year the banks all but stopped accepting short sales and the number of new foreclosure filings started to increase at record paces.  This caused a flood of foreclosures reaching the banks REO department and our focus shifted to finding good, no great deals by searching the MLS for bank REO’s.  We were able to acquire great deals on foreclosures and rehab them for resale.

Then last fall there were so many foreclosures that we were no longer able to resell the properties retail so the new focus became acquiring these bank REO’s for rentals.  This was a good strategy for many because we could buy the properties cheap and rents remained high.  This gave investors good cash flow.  And that is something we haven’t seen in many years.

Recently though we have been experiencing something quite different.  With all the foreclosures on the market, everyone wants in on the good deals.  That includes first time home buyers who have a huge advantage over investors.  Their 1st advantage is that they can get an FHA loan which only requires a 3% down payment compared to the 30% investors must put down. Their 2nd advantage is that they get an $8,000 tax credit just for buying.  Their 3rd advantage is that they qualify for the numerous first time home buyer rehab loans available through most cities and charitable organizations.

Home Sales are Up!


In the news lately the headlines are all about the higher than expected home sales. June saw an 11% increase in the number of homes sold compared to this time last year. However, if you listen to the reports or read the articles, buried somewhere in the story will be the caveat that while the number of home sales is up and that prices in some areas are stabilizing or in some places actually decreasing, is that the available homes for sale is at the lowest levels in a decade.

So why have home sales increased? There are a few reasons to explain the home sales increase as of late and the increase in sales prices as well.

  • The $8,000 first time home buyers tax credit expires on December 1, 2009. So anyone who can take advantage of this has to do so now, because no one knows for sure whether or not congress will extend the tax credit.
  • Because of all the foreclosures, many investors are buying up REO’s as quickly as they can.
  • Fannie Mae and Freddie Mac had a moratorium on foreclosures from November thru March. They started filing foreclosures again in April, so those properties will not start hitting the market until later this year.
  • A lot of homeowners who normally would be selling simply can’t sell their houses right now because they owe more than the properties would sell for, so they are staying put for now.
  • Some homeowners, who could actually sell right now, know that they couldn’t qualify for a new mortgage.