Jeff Adams Foreclosures - Real Estate Investors Paradise for 2016

If you have taken a look at the tabloids lately, you probably know that 2016 is a promising year for real estate investors. The market is slowly recovering from the slump in previous years and investors are confident about the road that lies ahead. Home prices will remain lower as compared to last year, therefore the investment opportunities are attractive. Interest rates continue to remain highly inviting in 2016.

But how should you go about with foreclosure investing this year? Read on to find out…

Foreclosure Investing Strategy – 2016
This year will be extremely promising for investing in foreclosures. By devising an effective strategy and making quick, well-informed decisions, you are bound to achieve success in the foreclosures investing arena.

Get A Broker

It is a known fact that home buying rules are common in most situations. However, this does not mean complacency in making buying decisions. There is nothing wrong with seeking a broker’s help to scan for houses. Where you will start house searching from scratch, brokers will already have a database of January 2016 foreclosure homes. Avail of their services and save precious time.

Know The Market

Knowing the houses is not enough. You must also carefully examine the localities that you are looking at. Remember, it is the area that creates the market. Features such as school systems, complexes, other attractions and key features of the area add a whole lot of value to the property. Veteran, real estate investor, Jeff Adams recommends learning about the complete ins and outs of the market.

Understand the Scenario

Making buying decisions is a challenging task only for investors who choose to play smart. Understand the property scenario in 2016. It is predicted that home prices will continue increasing steadily this year. But do not take this for granted. The 2006 estate market slump reminds us that we must always be prepared for market fluctuations. Start your recee early and carry it throughout to keep track of price trends.

Cost-Benefit Analysis
Do not take over ambitious decisions just because they seem promising from a distance. 2016 will prove to be highly lucrative for the foreclosure investor, but do not let the price trends bedazzle you. Simply because you get a $250,000 loan approved at low interest, does not mean that you have to avail it. Look for the most financially viable option. Remember, the aim is to invest in foreclosed homes, not to undergo foreclosure yourself.

Overhead Evaluation
You are bound to encounter foreclosed houses that are no short of being the ‘perfect deal’. But keep in mind that appearances can be deceptive. Home repair costs are an extremely important factor that sellers will try to avoid. Make sure that you budget the cost of these repairs and adds them to the total property cost in order to get the complete picture.

There is nothing better than getting a clear cut view of what lies ahead in the property market. Jeff Adams real estate provides you with the most common real estate trends that will help you ace the foreclosures investing game in 2016.

Tenant Demand 2016

Single-family homes for rent will be in high demand in 2016. The extent of demand is predicted to be so high that it will overshoot the availability within the first quarter. The markets that were strongly hit with foreclosures will see a rise.in demand greater than 25% as compared to 2015.

This may be a great sector for the foreclosure investors seeking to re-sell foreclosed homes within short periods. Another interesting trend is the increase in leases continuing since consecutive years, particularly in markets such as Tucson, Port St. Lucie, Riverside, and others.

Short Sales & Supplies 2016
The tenant demands in 2016 will be stronger than ever, at its peak since 2010. That is a definite area of interest for foreclosure buyers. Coupled with this is the over 8 cap rates all across the country. They will be noticeably stable since year 2011. Given these conditions, how will supply position itself?

Fewer foreclosures were sealed and completed in 2012 as compared to 2011, as contrary to mass expectation. There was a straight drop of 80,000 completed foreclosures. The 2012 figures closed at 860,000 as compared to a 780,000 in 2011.

Short sales have risen in popularity with lenders. This implies a decrease in completed foreclosures as the year 2012 witnessed. There were many first-time buyers who missed the price slump last year. Realizing this, numerous new buyers will enter the foreclosures market owing to discounted prices of properties. This trend is expected to continue till the latter half of the second quarter.

Hence, it is safe to conclude that the year 2016 will be highly lucrative for investing in foreclosures. Jeff Adams hopes that you can make the best of these opportunities using the above strategies and predictions.

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Foreclosures – An opportunity in distress

Foreclosure is a specific legal process through which a lender attempts to recover the balance amount of a defaulted loan by forcing the sale of the asset used as collateral against the loan. Large scale foreclosures signal an economy in distress and have significant implications to the real estate market.

Usually the lender is not into the real estate business and does not want to go on accumulating he foreclosed property.  The lender does not have the resources to manage real estate property. Moreover, accumulating bad debts does not reflect well on the lending institution. Therefore, the lender is eager to sell off the property at a discounted price so as to close the account by booking partial loss.

The Economic Recession
The occasional foreclosures are individual failures. These can occur because of a variety of reasons affecting a particular individual, such as divorce, relocation, arrest or plain inability of the borrower to repay the interest and the balance of the principal amount of the loan. Such incidents become the subject of common gossip.

However, when foreclosures occur on a wider scale, it signals an alarming recessionary trend in the economy.  It indicates slowing down of business and industry, a rise in unemployment and an economy in distress. During the recessionary period no one dares to borrow money and make new investments.  There are few t takers of loans and. consequently, the interest rates fall.

An Opportunity to Invest
Large scale foreclosures offer a great opportunity to buy properties at heavily discounted prices. Everyone shuns away from buying property at such times. Few have the daring to take risk. However, according to Jeff Adams, a seasoned advisor for investing in real estate, it is the right time to take a plunge.

Of course, an opportunity to make quick and huge profits attracts big sharks to the dark waters. The hedge funds, with their full access to technology and information, have already sniffed their meaty nourishment in the troubled waters and waste no time in getting there. They elbow out all small investors and, with their huge capital resources, leave no room to small players.

Hedge Funds
Hedge funds constitute a group of high net worth investors. Collectively, they have huge funds at their disposal. This gives them the great power to manipulate the markets to their advantage.  The hedge fund managers have a free hand in making investment decisions unlike other publicly accountable funds, such as mutual funds, pension funds etc.

The only concern of the hedge funds is not to keep the funds locked in idle investments for too long. Therefore, they have to reap quick profits and to move out well before the scenario changes.

The small investors, however, can exercise speed and daring to buy good properties in the adjoining area.  They can hold the property a little longer till the demand picks up.

Interest Rates
The interest rates play an important role in property investment decisions.  Apart from the ability to borrow money, they also indicate the demand for property.  The central monetary agency uses the leverage of interest rates to nurse the sick economy back to health. They use this leverage to regulate the flow of gross savings into developmental investments and also into real estate or the housing sector.

Foreclosure Terms and Explanations

·         Foreclosure: The buyers make fixed payments to the lender every year towards eventual ownership of the mortgaged property. In the event of defaults, the lenders exercise their right to take possession of the mortgaged property, which is technically known as foreclosure.

·         Pre-Foreclosure:  This stage precedes foreclosure, where the lending bank sends a notice to the owner giving a stipulated time to pay up the amount in default.  The failure to comply will follow foreclosure. The owner, however, has the right to sell the property during the notice period and pay the dues preventing foreclosure.

·         REO’s: Here the lending institution repossesses the foreclosed property put up for auction in case there are no bidders. Hence it is known as REO or the Real Estate Owned .

The foreclosures are of following two types:

·         Judiciary:  These are legal property transfer records which permit the owner to reclaim the property after paying the amount due within the stipulated period of time.

·          Non-Judiciary:  Here the auction process is handled by an independent third party. There are no redemption periods in such cases unless agreed upon by the owner and/or buyer.

Conclusion:

 It is highly profitable to buy foreclosed property at auctions. Large scale foreclosures often throw up a gem of opportunities to buy properties at highly discounted prices.

A low interest rates regime has been prevailing in the market for quite some time. Borrowing money now at fixed rates of interest is very much advisable, as the current rates are unlikely to go further down.

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Investing In Real Estate: The Advantages and Disadvantages

It is true that because of the significance that real estate holds in the present scenario, an investment in real estate hardly ever goes wrong. However, I am not stating that it never goes wrong. Real Estate cannot be considered as the safest form of investment, neither is it the most risky. It stands on neutral ground.

The risk that you might be undertaking is stepping into real estate investment turf without the aid and advice of an experienced realtor or know-how of the field. It is imperative for you to know the advantages and disadvantages of real estate so that you are aware of where you could go wrong and therefore, avoid such situations.

3 Tips for Successful Real Estate Investing by Jeff Adams

3. Depend on Expert Advice
No matter how much you have read up about real estate, if you are new to the waters, you shouldn’t trust the depth too easily. Always solicit the advice of an expert realtor with every decision, especially when you are in doubt because experienced realtors know the different trends prevailing in the field of real estate, that tend to change from time to time.

2. Set a Budget
Always set a minimum and maximum realistic value that you can spend on your investment. Besides your budget, it is also good to be prepared at the outset as to the square footage, number of rooms and proximity of the property to prime geographical locations that you are looking for.

1. Do not base Investments on Assumptions
Real Estate Investment works on a thorough study of the property, trends in the market as well as research. You cannot operate real estate investment on assumptions, that is, you cannot assume that there will be no change in tax laws, or the price of a property will appreciate or will depreciate.

The most important thing that you should bear in mind is keeping your real estate investments profitable. You should begin with an investment where you are certain that you will either break even or make a profit. Do not opt for dilapidated properties at the outset of investing because you do not know the expenditures you will incur in making the property worthy of re-selling or renting. Also, do not opt for properties involved in legal battles; this is leaving aside foreclosed properties.

Real Estate comes with its advantages and disadvantages and if you know each factor well, you will be able to successfully conquer the real estate game and soon come to be a real estate investor that others entering the field will trust for advice.

The Advantages of Real Estate Investing

1. You can make a significant profit
Real Estate Investing is such a field where profits can touch the skies. If you manage to invest in a property when the market rates are low, you have struck yourself a good deal right there. Once the market value of the property appreciates, you can make sell it off, thus, raking in the big bucks as profits.

Putting the property up for rent is also a good option to make a profit because instead of acquiring your amount once and for all through sale of the property, you receive your money in timely, stable installments.

You can find property at a low price when it is a foreclosed property, the owner is desperate to sell the property because he is moving or for other personal reasons, the property needs a little repair or there is no one to claim ownership of the property.

2. Real Estate Investing Acts as Additional Income
Besides the money that you gain from your job and profession, you can use the money that you gain from your putting up your real estate investment on rent as a second income. Thus, you are one step closer to all your dreams because of this increase in income.

3. Getting a Loan is Easier
When you want to apply for a loan to make any purchase, you are asked to provide your income statement to a financial institution. On seeing your high income, that is a joint sum of your salary and investment gains, the process of loan sanctioning occurs faster because you are finally sound.

4. It Benefit the Generations after You
A real estate investment is not only beneficial to you, but also for your generations to come. If you sell the property, you can fund your children’s plans with that amount. If you rent the property, you can leave that property to your children who can then enjoy the rent amount after you.

The Disadvantages of Real Estate Investing

1. First Time Investor
Usually when you are a first time investor and your income is not too fancy; banks hesitate on giving you a loan. This may delay the process of acquiring a loan.

2. Debt from Loans
A new investor may not have enough resources to make his entire payment while buying property. Thus, he may have to depend on a loan, which causes debt for him and debts are never pleasant.

3. Legal Hassles
Real Estate Investment comes with legal procedures and formalities which require a lot of running about, time consumption and expenditures.

4. Rental Property Upkeep
When you rent your real estate property, the maintenance of the home depends on you. Hence, you have to incur the expenditure on the repair and maintenance of the home to ensure that your home is pleasant enough to attract prospective customers.

Considering both the advantages and disadvantages of real estate, you come to realize that you cannot really take a stand, but the biggest advantage that benefits an investor is the demand of real estate in today’s times considering the number of people who want to have their own home.

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Didn’t Someone Tell You We Are in a Recession?

We are all aware that the economy has taken a nosedive over the past couple of years. Businesses are closing their doors, employees are being downsized, and the current market value of houses has been consistently dropping. Although, the recession is damaging the current market, it does offer a plus side to the real estate investor.

Buying real estate during a recession allows buyers to thrive during a recession. They have the opportunity to make substantial financial growth. Falling prices and less activity in the current market can benefit the buyer in many ways. A recession typically lasts for about two years so investors should think about not just how low the prices will go, but also how much they can invest until it is over.

Upon deciding to invest, you should consider a variety of factors. Realize if each house in question is functional to your particular needs. Buying because you fear the recession will end is not wise. The current market should not sway your judgment in this way. But since prices are typically down by three to five percent, buying does offer many advantages.

Buyers stand to pay less for homes, usually five percent of more, during time of distress. In addition, sellers are often more anxious and motivated to sell just for the shear fact that they do not want their houses on the market for too long.

Before investing in a down market, it is critical that you research the comparable housing prices in the area, remodeling records for the home, and any financial situations attached to the home. Websites such as zillow.com or trulia.com are excellent resources for gather such information. The general location and overall condition of the house should also be taken into account.

Timing is everything if you plan to capitalize on the falling prices of houses and property. If you are a seller and you wish to move to a more expensive home, now is the time to buy. The longer you wait, the lower the value of your currently owned home will go. Savings to you on a new house are also available as it is being sold for less. Interest rates are also much lower and are gradually increasing, which is another reason to buy now.

Borrowing cheap is another benefit. Interest rates are very low, and even though banks may not be lending to risky buyers, investors with good credit are welcomed. Foreclosures, Short Sales, and Real Estate Owned (REOs) properties are an excellent way to potentially profit from an investment during a distressed economy.

When a notice of default has been filed in public records because the owner has stopped making payments on the mortgage, and a lender has given notice that the house will be sold at public auction if the payments are not made current, the house becomes foreclosed upon. If payments are not made and the house goes to public auction, a buyer can usually purchase the house for the amount of money remaining on the loan.

There is substantial profit to be made by only paying the amount owed on the mortgage and the owner’s equity can be picked up for free. One thing to consider though, when going the foreclosure route is that a house being sold at auction is not just a steal. Due diligence and thorough inspection of the house should be done prior to any bidding on any home.

Short Sales or Pre-foreclosures are also an option. These are homes that are in foreclosure but before the property goes to public auction. The lender must agree to accept an offer less than the amount owed on the property. Since the lender agrees to take less money in order to avoid foreclosure, the transaction is better for the investor. REOs are similar to Short Sales, but the lender already owns the house due to foreclosure proceedings. The house has been auctioned publically and did not receive a bid. This offers a benefit to the investor because the lender will usually sell for less than what is owed on the mortgage.

This is the best way to buy because the seller is no longer involved in the transaction. The deal is made between the lender, the seller, and the agents that represent them. At times the agents are not even necessary.

Overpriced homes are another investment opportunity to consider. An inflated price is the number one reason a house does not sell. A home that has been previously overlooked because is has been overpriced, has been on the market for a long period of time, and has not sold because of its price, should be revisited. A motivated seller could lower the price in a hot seller’s market where there are many buyers and less inventory.

Offering the seller a sizable earnest money deposit or “Good Faith Deposit,” which is a portion of the down payment attached to the purchase agreement, and a list of prices for other homes is the area could also encourage a price reduction. Offering a “Good Faith Deposit” can also offer less risk to the seller because most contain provisions that give this initial deposit to the seller if the buyer backs out of the deal without cause. The money is usually held in a trust until of the necessary negotiations have been made and contracts have been signed.

Finding real estate to invest in can be easier said than done. Don’t wait for these homes to show up in traditional real estate listing services. Look for information on bank websites and county loan offices that know of foreclosures. You can also ask local real estate agents that are familiar with the area. Realtors can also offer insight on overpriced homes.

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