Currently foreclosures are skyrocketing in Michigan due to the drop in real estate values. People who borrowed in order to buy their house are now owing more on their homes due to the total worth of their home declining.
For those who have received low-interest-rate mortgages (ARM) in the past are now having there ARM increasing interest rates which in return increases the monthly payments. The monthly payments are getting too high for some to handle. The current situation is a real estate investor’s dream. Real estate investors are now about to get homes very reasonably, but in order to do this the investor needs to have fast money.
The answer to this problem are “hard money” loans. They do not require income or credit checks. The loan is given on LTV which is Loan-To-Value ratio of the property. These hard money lenders usually lend up to 75% LTV. If you are planning to purchase these houses in order to “flip” them, lenders will let you buy the property and will give you extra cash for renovations. For a Michigan investment property, these hard money loans only go up to 50% LTV due to the economic times of the state.
Many bargain properties will be found at auctions which requires the purchaser to pay a deposit of a percentage of the house when the action is won. After it is won and the non-refundable deposit is made you will have about a month- 30 to 45 days to pay for the property; most likely by getting a mortgage loan. Conventional mortgages normally take longer than the 30-45 day range and this causes the bidder to lose their deposit made at the auction.The great thing about hard loans is that you can usually get them within a week or two. Thus, hard money loans are what most investors do unless they are wealthy.
Hard money loans are not made by banks. They are made by private investors so it’s important to have a mortgage broker. They will be able to work between you and the lenders so that they have good working relationships. At the end of the deal the mortgage broker charges a percent amount of the loan obtained. The only price that you personally will need to pay is for the property appraisal.
If you are looking to “flip” a house use “hard money” loans and make sure to have a great Mortgage broker to help you along the way.
Micro loan investing is not just a way for rich philanthropists to help the needy and make themselves feel good about themselves, while still making a buck or two out of the poor.
The micro loan industry is no longer reserved to the very poor in developing countries in Africa, South America or Asia. Recently such programs have come into existence which operate within the developed nations such as the US and the UK. They have come about to service the needs of those trying to set up or establish their own business who for one reason or another are unable to obtain credit via the normal routes.
Typically the loans available small and range from a few hundred dollars up to a few thousand dollars and the terms of loans are often relatively short, usually around 5 years.
There are a number of charities and non-profit organisations that offer micro loan programs. In addition there is a small number of more traditional investment funds now offering these loans and advertising them as a form of ethical investment for potential investors.
Micro loans are typically available to only those that cannot obtain credit through the usual means. Perhaps the person is homeless, recently come out of prison or for one reason or another has a very poor credit history. In such circumstance the loan originator will perform a credit check on the applicant however much of the appraisal will be based on interviews with the applicant and assessment of their business plan.
As well as providing the money to start or help a small business many originators also offer a mentoring service that will provide advice and support to the loan holder, giving their business a greater chance of success and increasing the potential returns for any micro loan investors.
For the longest time now Real Estate Agents have come into the industry and tried to eke out a living by chasing every opportunity that presents itself. They are willing to drive long distances and work crazy hours just for a chance to earn a commission.
They will try to make themselves available to anyone and everyone. Which in turn spreads them quite thin.
What if there was a way to have people come to you? To close the door on all types of Real Estate and concentrate on one particular type. To have them call you because you are considered an authority in one type of Real Estate? To create a Niche Market!
Well this is what some savvy Real Estate Pro’s have done and their real estate careers have taken off.
But Marty, wouldn’t that Pigeon Hole me to one particular aspect of Real Estate Sales? Well let’s look at an example in the real world of this happening.
If we look at the Hollywood Actor Danny Trejo, he is likely the most Pigeon holed actor I can think of in movies. He consistently shows up as the bad guy. He has a rough and tough look about him and usually plays the villain in a lot of movies.
He is not often considered for a leading man role in Hollywood but rather he is relegated to villain roles. Oh and by the way, he starred in 27 television and movies in 2010! Not bad for someone who is Pigeon Holed.
Not to mention his net worth is now more than 8 million dollars!
You see, he created a Niche Market for himself.
Anytime a producer needs someone for a villain role, he gets the call. Wouldn’t it be great if every time someone needed to buy or sell a particular type of Real Estate, we got the call?
What I’m talking about is becoming a Real Estate Specialist in a particular sector of Real Estate. Creating a Niche market.
By becoming the “go to” person, you set yourself up as one of very few who are able to provide outstanding service and information that another REALTOR would not be able to provide.
Some examples of Realtors becoming authorities in their fields would be:
- First time Buyer Specialist
- A local Heritage home Agent
- A Real Estate Pro who works only with Investment Properties
- The Condo King!
- A Relocation Specialist
You get the picture.
By setting yourself up as a specialist in one aspect of Real Estate, you are no longer competing with the masses. You are telling the public that this is what I do and I do it better than anyone else!
But Marty, why would I want to Pigeon Hole myself into one box? Why would I want to shy away from other sales? Wouldn’t that work against me?
A great point for sure. But think about it this way.
Let’s say you have to get an operation, worse still let’s say you need brain surgery. Would you let your family doctor perform the surgery or would you look for a specialist like a Neural Surgeon?
I think you can see the value in seeking out the Neural Surgeon. They are going to know how to do one thing, and that’s brain surgery. They do it day in and day out. That’s what they do. They are seen as the experts.
They make a great living at what they do by providing outstanding service that could not be provided by most doctors.
The same could be said about car mechanics. If you have an European car like a Mercedes, will you be taking it to a local garage or would you seek out a Mercedes specialist that works on their cars night and day?
I think you see where I’m going with this. If it’s feasible in your area, then consider becoming a specialist in one type of real estate. Create a Niche market for yourself and excel at that Niche.
Now remember in order to be a specialist or to be perceived as the expert, you will need to back it up. Just telling people you are the expert doesn’t make you one. You will need to provide outstanding service and information about your chosen niche of choice.
If we use the Condo King example above, you will need to set yourself apart from other Real Estate Agents by learning everything you can about your local Condo market. Things like pricing and sales are obvious. But what about learning all the condo fees for each building? What and when a new special assessment may be levied against the condo owners. You would need to learn which building are designated for seniors, which buildings allow pets, and so on.
You would need to figure out which buildings have better and more parking or which buildings have local transit to their doorsteps. Which buildings have the better amenities and which buildings have better views.
Any information you can provide to your clients above and beyond what other real estate agents are providing will set you apart. Over time, you will find that people will be seeking you out to represent them in Buying or Selling.
You will also notice other real estate agents will be referring you to their clients knowing that you know more than they do. They should know that you provide outstanding service and more importantly, will keep their clients happy and make them look good as well.
This is a strategy that you may want to think about as an option for your Real Estate Career.
Please do me a favor, if you are already doing this in your Real Estate Career then let us know in the comments below so we can share this with other Real Estate Agents who may be thinking about trying this strategy in their market place.
All the best and good luck!
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A latest study conducted by the Asian Real Estate Association (AREA) shows that investors are keeping on hold short-term allocation of money in non-listed properties investment funds in Asia but are committing more money for longer terms. Another survey Investment Intentions Asia reveals that nearly 50% of the investors plan to enhance allocations to non-listed properties investment funds in Asia for medium-term periods of 3 to 5 years, compared to about 24% who intend to invest for short-term periods of 1 to 2 years. This is due to the expectation of fund managers and individual investors that the even the Asian economies that are not doing well right now would recover strongly in 2010, while the marginal decrease in the growth rate of countries like China and India would be reversed to higher growth again.
Strong Recovery of Asian Properties Markets
The housing market bubble bursting in the middle of 2008 in the United States initially affected the Asian properties markets also. However, latest data suggest that these markets recovered much faster than other regions. The first quarter of 2009 witnessed lowest investment levels in Asian real estate markets. However, the investments started improving thereafter in a gradual manner. The main reasons for such a strong recovery was the continuation of the low real estate investment financing costs, a stabilizing price trend across the major segments of the Asian real estate markets, and a recovery in the Asian equity markets.
Higher Investment in Asian Real Estate
A report from Asia Investment Market View provides data that the direct investment in Asian properties market surged 56% in the second half of 2009 from the same period in 2008. The total investments in Asian property markets had been estimated at $25 billion. The real estate markets of China, Taiwan, and Hong Kong led the recovery, accounting for about 57% of the total volume of investment in Asia during the above period. In Greater China alone, the volume of transactions was $15 billion, a jump of 169% from the second half of 2008. The real estate markets of Japan, Singapore, and Korea accounted for an increase of 17%, 9%, and 8% of the total investment in Asia. Office properties continued to enjoy the preference of investors with more than $10 billion invested in the second half of 2009. This was about 41% of the total investment volume. Residential properties attracted around 20% of the total volume, while 16% went to the investments in retail sector. Industrial property investments also witnessed a growth of 155% in the second half of 2009, compared to the first half, for a total investment volume of $1.8 billion.
Future Prospects in Asian Properties Market Investments
Majority of global fund managers expect the Asian governments to adjust their monetary policy measures to tighten the lending to property investments to avoid the creation of new bubble asset situations. It is perceived that the prices and volumes of investment across most of the sectors are on the increase, particularly in the office and residential markets. Still, majority of residential markets are in the early stages of recovery. The fiscal tightening measures by the Asian governments are anticipated to cool the possible overheating in the Asian real estate markets across various sectors due to the higher demand and greater investment inflows into the Asian markets from other regions.
An example of Asian real estate market growth
Recent reports show that the tallest residential tower in the world would be built in Mumbai, India. The Lodha Group would be constructing a 117-storey apartment skyscraper on an old cotton mill site of 17 acres in Mumbai in a central area of the city. The building is expected to be 442 meters high. The tallest residential building at present is in Australia and its height is 323 meters. The new building would have 276 luxury apartments. The Lodha Group had appointed Pei Cobb Freed and Partners of New York as the architects for this new towering building. The construction is expected to be completed in 2014. The Group is also expected to undertake another similar project in a nearby area in the same city.
Reasons for Asian real estate investments overshadowing others
The strong economic growth in most of the Asian economies such as China and India combined with the prices of real estate properties in sluggish economies like Japan and Korea hitting rock bottom are the major drivers of growth in Asian properties investments. The prospects of acquiring properties in developing areas and regions at lower rates that would appreciate significantly in the next few years are sending strong signals to international investors that the future properties investment growth are in Asian markets. The fund managers are anticipated to divert significant portions of their funds portfolio to Asian properties markets, compared to investments in Europe, the Americas, and Africa. Even the Australian and New Zealand markets are expected to grow substantially in the next few years.
From the above data and estimations, it is clear that investors and fund managers are most optimistic about prospects in Asian properties markets overshadowing other markets. Their intention of taking long-term investment decisions in various sectors of Asian real estate markets shows that these markets are going to be prime investment destinations. Are you ready to reap the benefits from the emerging growth scenario of Asian real estate markets? It is time you took an early decision before it is too late and prices appreciate considerably, resulting in lower returns on investments. Maximize your investment returns by entering the lucrative Asian real estate markets and investing judiciously, by conducting due diligence on the most lucrative investment avenues.