InvestorLoft Real Estate Investing Blog

While the vast majority of what we hear these days about real estate in the news is “doom and gloom,” there’s definitely an upside that few are talking about. We’ve entered an era where America is on sale – we haven’t seen such a favorable buyer’s market in years. Property prices in many areas are below market rate, rents in those areas are above market rate, and non-traditional financing is become more and more prevalent and the options for investors to access quality rental/investment property are abundant. So tell me – why isn’t the majority of the media talking about the sunny side to the foreclosure across the street?

Fear.

Fear sells. Fear motivates. Fear is what we thrive on.

The most powerful thing we can do is tap into that fear that everyone’s trying to instill in us and glean powerful information from it.

If a city is experiencing a higher than normal foreclosure rate and population statistics are remaining constant – wouldn’t that mean that there’s a steady demand for rental property from displaced homeowners?

If inventory is plentiful and driving prices down yet vacancy rates in the area remain low and constant - wouldn’t that indicate an opportunity to access prime rental property at reasonable prices with a steady flow of at-market rent rates and tenant supply?

If credit is tight and traditional loans are harder to come by – wouldn’t that lend a look at less traditional financing methods like self-directed IRAs? The power to become a cash buyer is within your reach if you know where to look.

There’s a silver lining to every gloomy cloud in the sky and the real estate market is no different. Our CEO, Wally Charnoff, was recently interviewed by Jonathan Burton at MarketWatch about this exact subject. Have a look at the video and see what Jonathan and Wally found to chat about.

U.S. News and World Report just named Fort Collins, Colorado in its story “Top Ten Housing Markets for the Next 10 Years.”

As a Colorado-based company, we have tons to say about this great state and definitely applaud Fort Collins’ inclusion on the list. Cities in Washington State, another recent addition to the InvestorLoft site, also made the list!

It seems timely to note that we just launched our state and city-specific search and information pages as well. Visit InvestorLoft’s Investment Property Portal and begin searching for real estate by state or in a specific city of your choosing. We have listings now in 18 states and 1,679 cities with new destinations being added each month!

Click here to review InvestorLoft’s available investment properties in Fort Collins, CO

Click here to review InvestorLoft’s available investment properties in Washington State (WA)

Your Virtual Key to Real Estate Investment

We find so much powerful information across the web on a weekly basis that we wanted to take a moment and fill our readers in on the “coolest of the cool” in this week’s real estate and investment markets.

Back on April 3rd, we posted Real Estate: the Self-Directed Perspective and have found that this subject is really heating-up across the web. Here are two complimentary posts on the subject of “retiring with real estate” that our readers might also find useful:

Real Estate: Market Slowdown Offers Deals for Real Estate Investors – DailyPress.com. Real Estate is on sale and the market’s current slowdown is offering great deals for real estate investors in the Norfolk, VA region. InvestorLoft members can search Virginia for investment property!

Using IRAs to Buy Real Estate: Six Reasons to Tap Retirement Funds Now to Buy Rental Property - (Chris Pummer) MarketWatch.com. There’s a lively discussion going on over at MarketWatch on Chris Pummer’s series of articles on investing in real estate with your retirement funds. This let us know that we’re doing the right thing at InvestorLoft by helping educate our members and site visitors on the details of using their IRAs to purchase real estate. Have you seen our 7-part series on the Basics of Real Estate and Self-Directed IRAs?

Where are the good real estate investment deals these days?

There’s definitely no shortage of hot investment property floating around out there these days…but where do you go to minimize the “digging” for good deals?

How do you know what markets are hot, lukewarm, tepid and just plain ‘ol cold?

There are a ton of resources floating around out there on the web that are ready and waiting to provide you with timely, market-relevant information to aid in an investor buyer’s decision. This week’s blog post is a compilation of these resources, and we hope that if you have your own tools, you’ll share them with us in the Comments section below:

• Interactive Maps from NAR: Check out the interactive maps for Median Home Price and Existing Home Sales by State
   
• FinancialDynamix from InvestorLoft: Sure, we’re pimping our own ride here a bit, but every property on the site has a built-in calculator attached to it. Once you conduct your search by cash flow, cap rate, cash on cash return , downpayment and more, click on the “View Financials” tab of any property on our site an run the numbers real-time. Find out if it’s just a good price or also a great investment.
   
• Keep Tabs on Forbes.com: They regulary publish great stories like Where US Home Sales Are Rising , America’s 25 Strongest Housing Markets , and America’s 25 Weakest Housing Markets.
   
• Data Sets from Cyberhomes.com: When you log into their home page, they’ve done some preliminary sorting for you. View Home Values, Going Fast Listings (high page views) and more and explore their Real Estate Markets section for timely news and insights. 
   
• Do Some Simple Math: There’s no shortage of doom and gloom in the daily news about the real estate markets and which have been hardest hit. Florida, Nevada, Arizona, Colorado, California – they’re in the blogs, online and traditional news reports and on the tips of every professional in the industry. Here’s a tip: start with THOSE cities for finding great investment properties. Foreclosure rates are high, inventory is plentiful, and with a little elbow grease and math, you just might find your next cash flowing gem!

Improve your Rental Property on a Dime

Sometimes we have to face the reality that it’s time to spruce things up a little bit at our rental properties. However, improvements often mean down time between tenants – so how do we make decisions that will:

Improve aesthetics

Up our asking rent

Result in as little downtime as possible between tenants?

Here’s a list of five simple improvements that you can do to your rental property in less than two days that won’t only NOT break the bank, but result in virtually no downtime between tenants!

• A Fresh Coat of Paint: If you stick with a neutral color in a high-hiding variety that will go on in one coat, you’re done in a day! True Value has a handy paint calculator that will help you figure out just what you need. Don’t go for designer varieties – stick with staple colors from major paint manufacturers so you can get more when you need to touch up or paint again.
• New Baseboards: With the advent of the “no-mitre” variety, you can now just install all of your corner and radius pieces and make straight cuts. This decreases install time significantly. Check out Home Depot and Lowes as they generally have baseboards in contractor packs in sizes up to 3.5 inches. Get a contemporary look with low wallet impact. Hint: use a satin or kitchen & bath finish paint in Swiss Coffee instead of traditional white – shows less wear and can be wiped clean! Most condos and homes can be demo’d in a half day and re-installed in one. Paint your baseboard strips the same day as the demo to speed-up the process.
• Get Rid of that Grass! Xerascaping (also known as desert landscaping) is not only eco-friendly but easy to do as well. If you live in water-sensitive areas like AZ or NV, often the government has a program to PAY YOU to remove your grass and replace it with low-maintenance landscaping. Having a yard that a tenant does not have to keep maintained not only increases the desirability of your property to prospective tenants but lowers water bills, increases curb appeal and will make your property inherently “pet friendly” too!
• Plumbing Fixture Update: It’s a breeze to install new faucets and showerheads, so hop on it! They’ll spruce-up a lackluster sink or shower and lower your maintenance costs in the long run. Keep them fresh and even if you’re not the “handy” type, your property manager will have a handyman who can go in and replace everything for you in one day.
• Lighting Fixture Update: There are so many attractive, low-cost lighting options available that it’s time to put those “Hollywood lighting” bath bars to rest (permanently). Look for options where the sconces are upward-facing so you can use compact flourescent bulbs to save energy (especially important if you’re including utilities in the rent). For closets and hallways, flush-mount flourescent fixtures like these are not only cost-effective but easy to install as well!

Real estate saw one of the most turbulent markets in 2008 that we’ve seen in years. Now, as we prep for 2009, we’ve compiled this list of top move-forward trends to keep an eye on in real estate during 2009:

1. Realtor and Mortgage Industry Attrition – Those who got into real estate to ride the wave of yesterday’s boom are faced with dwindling client lists and tremendous regulatory changes. Realtors and yesterday’s mortgage brokers will have to a different type of business to have real “staying power” in the current economy. Those who persevere will find that nothing replaces superior customer service partnered with an unsurpassed level of expertise.
2. Growing Levels of Specialization in Residential Real Estate Sector – The recent crisis has demanded a certain level of specialization for real estate professionals. Those that know their way around short sales, alternative financing, foreclosures, seller carry-backs and investment property have pulled ahead of the masses and will likely continue to do so thorughout 2009.
3. Mortgage Metamorphasis – We’re on the lookout for more realistic lending standards. A-paper buyers can’t qualify and the sub-prime borrowers can’t pay, so what’s left? Look for banks to get creative, for the 20% downpayment of our parents’ era return as the norm and for lenders to consolidate and form national lending platforms that are more appealing to Joe American (and likely LESS friendly to Mr. Investor).
4. Hard Money Won’t be So Hard – Purchases still have to close and with the equity markets having been so turbulent, folks are looking for alternative investments in an asset class they know and trust like real estate. Look for a resurgence in private money lending as the real estate industry gets creative.
5. 1031 Exchanges: Hot, Hot, Hot – With 2008 having been so turbulent, we’re expecting more and more investors to look into the benefits of 1031 tax exchanges. Their value for a real estate investor’s portfolio is undeniable so we’ll be bolstering our educational content in this arena for our members.
6. Self-Directed IRA and Real Estate IRA Investing Will Surge – We’re predicting an all-time high level of assets rolled over into truly self-directed IRAs. Investors are seeking alpha outside the stock market and self-directed IRA custodians are wasting no time putting marketing dollars to work to educate investors about this valuable option. Take a look at InvestorLoft’s Self-Directed and Real Estate IRA Learning Center for our 7-part series on the basics of Real Estate IRA investing.
7. A Marketing Paradigm Shift for Real Estate – When lenders and other professionals realize that liquidity lies in the real estate investor’s realm, we expect to see a significant shift in marketing and advertising tactics. Why not advertise and market where your products will be seen by those with the need, desire and liquidity to purchase? Crazy stuff, we know!
8. Home Price Stablization – We can’t speculate as to where the bottom of the market is, but we expect to see home prices stabilize in Q1 of 2009 and remain static until about Q4. It’s a new Presidency and once tax time passes, we’ll see some available dollars head back into the real estate arena as folks see that prices have held for a few months.
9. Refined Refinancing – With so many mortgages set to adjust in the first half of 2009, we’re predicting a new scene on the refinancing front. Sure, rates are low, but if you can’t qualify – what’s the point? Lenders will snap-to and get savvy, tapping into the refinance market to pick-up great borrowers for their books and send high rates packing for those who can qualify. It won’t be so much about the rates this time, but the service and ability of lenders to work with a borrower’s personal situation as the mortgage industry continues to right itself from the 2008 capsizing.

The Treasury Secretary wants to drop mortgage rates to 4.5% in hopes of stimulating more buyers to come back into the market. Certain regions have had moratoriums placed on foreclosure proceedings for those who qualify.

Is it all truly necessary, however?

Is it the government’s responsibility to ensure that every home buyer can continue to pay their mortgage note or should we revert to a more Darwinistic approach and call it a weeding-out of natural selection proportions? 

Some say that if we don’t take strides to end the slide in housing prices then banks will never be able to stabilize and lending will remain out of whack. And on top of it all, unemployment numbers are surging and it’s likely we’ll see the foreclosure trend continue as the economy presents its inevitable challenges.

What say you, the real estate investor? Should the Fed step in to stabilize or should we adopt the “laissez-faire” mentality and let the natural selection process take its toll on the banks, mortgage lenders and homeowners as a whole?

Investment Property Search at InvestorLoft.com

When we designed our PropScout investment property search engine, it truly was with the investor in mind. There’s nothing more frustrating for an investor than to have to sift through listing after listing to find a suitable property for your investment goals. We deceided that enough was enough and developed a smarter way to search.

This week, we’ll answer a few questions that we’ve received via email regarding the PropScout Search Engine. We’re always looking for ways to improve our service offerings and much thanks to the members below for asking. We’re happy to answer!

How do I know the properties that come up in my PropScout search are legit? – Mark M. (Illinois)

Only licensed real estate agents are eligible to list their properties on InvestorLoft. This means you’re not going to run across fly-by-night deals listed by unscrupulous individuals just looking to grab your earnest money check and run. While there’s no substitute for a thorough due diligence process when acquiring any investment, including real estate, we started from the most logical place to protect our members: the licensed real estate agent.

I have a very specific cash flow requirement for any property I add to my portfolio. Can I search by cash flow on InvestorLoft? – Jennifer A. (Arizona)

On the PropScout search page, just scroll to the line marked “Search by YOUR desired minimum annual Cash Flow” and select from the drop down menu. Hit search, and your results will be on-target and easy to review.

Not only can you search exclusively by cash flow, but cap rate, equity, property type and more. The PropScout Search Engine was designed specifically cater to the needs of the real estate investor. 

How is PropScout any different from searches I perform on other online real estate sites? – Carolyn W. (Colorado)

We’re glad you asked! See, most real estate investors aren’t so concerned with number of bedrooms, granite counter tops and upgraded flooring. They want to know that a property makes financial sense for their portfolio. That being said, you won’t find the typical “residential” search criteria on InvestorLoft’s PropScout. What you WILL find, however, is a solid list of qualifying financial criteria to build a search that suits YOUR needs. Swimming pool? Take it or leave it. Cash flow? Now that’s something we want to hear about!

If you have additional questions about our PropScout Search Engine, ask them here! The InvestorLoft Team will get you answers. Thanks for stopping by!

Personal Real Estate Investor Magazine has awarded InvestorLoft their “Best New Real Estate Investor Tool 2008″ award!

We’re delighted to be recognized by Andrew Waite, publisher of the magazine, and his staff as the year’s top tool for the real estate investment community. In building InvestorLoft, we specifically sought to interface with the needs of the real estate investor. PREI’s award is, without a doubt, assurance that we are moving in the right direction with our platform.

“InvestorLoft is changing the game by offering smart solutions,” states the article on our real estate investment software in PREI Magazine. The article goes on to discuss in-depth our PropScout search engine and how it truly serves the needs of the real estate investor and also discusses how we truly embrance an empower the professional real estate community.

We send our heartfelt thanks to PREI Magazine for appeciating what we’ve built thus far for the real estate investment community and we look forward to all of the improvements we’ll be bringing online during 2009!