Monthly Archives: October 2017

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Exactly what to do when you purchase real estate with occupants

Exactly what to do when you purchase real estate with occupants. Acquiring homes with existing occupants could be really valuable. Whether you’re taking a look at a wholesale bargain or long term buy and hold, acquired renters can provide immediate capital income and reduced vacancy danger. They could also make the residential property extra appealing for various other financiers, investors. The last point you desire is to stroll right into a poor scenario that will certainly cost you much more compared to what you anticipated. So, what exactly what should you be considering when reviewing residential properties with existing occupants?

Purchase real estate with occupants: Are they good tenants paying a market rate?

As a component of your inspections, you might intend to perform some diligence to examine the properties vendors and also the present renters. Do the application and background checks show any glaring criminal concerns or grievances? Do not simply consider regional rental asking rates or leases on the building. You have to recognize whether the tenants are in fact paying, as well as whether you could anticipate them to pay promptly. Are any kind of the lessees in default or the expulsion procedure? Chatting straight with the renters to obtain estoppel is a wise decision, as well.

Purchase real estate with occupants: Get good property inspections.

You could not directly have time to go through every system, yet a person from your group has to or the inspector you have hired. They have to record the existing problems completely. You wish to know if there are any kind of huge pending repair services or hazardous circumstances that should be corrected prior to or as quickly as you take control. You would also like to know if some occupants are ruining the asset. All these repair work expenses have to be factored right into your underwriting of the asset– since that will be money disappearing from of your pocket once you close on it. If you are aware of a few of the repair needs or differed maintenance, you could utilize this when bargaining.

Purchase real estate with occupants: The Numbers.

In circumstances when a renter remains in your asset, running your numbers cautiously is very helpful. There are many things to factor in. What is a good vacancy factor within the market to use? How much will the insurance be? How much will the property taxes be? How about trash removal? All members that join the SWFL REIA get spreadsheets emailed to them to help with this.

One of the premier sources for real estate investing networking and education is the SWFL REIA. In the real estate world the SWFL REIA is different in that they do not do information product sales. Their meetings are focusing on the best ways of investing in real estate by collaborating with other property investors who are sharing their experiences.

We look forward to meeting you at a meeting soon!
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A brief guide to property investment.

Here is a brief guide to property investment: Buying an investment property is among the favorite ways to invest. This is because an investment property can help achieving your financial goals by securing your financial future and increasing your wealth. However, a property investing is not always delivering positive returns. You need to be aware that your investment will be profitable only if you effectively manage it and in order to manage it effectively you need to have a certain knowledge and expertise in the real estate field.

Here are a few points to use for a guide to property investment.

  • Pay the right price for the right property
  • Delegate the tasks to a good property manager
  • Check your cash flow
  • Choose the type of mortgage that better suits you
  • Understand the dynamics and the market where you are buying
  • Use another property’s equity
  • Renovate the property and make it attractive to renters
  • Check the condition and age of the facilities and property

Better manage your risks by taking a long term view It is critical to buy property at the right price, since real estate investing is about capital growth. You have to choose a property more likely to increase its value over time. Property investment can bring you long-term wealth, but you have to make sure that you can afford over the long term to make your mortgage repayments. You also have to take into consideration the properties available in the immediate area and consult professionals you can trust. Information on property values, average rents, suburb reports, and demographics can prove very useful. It is recommended to always be open to learn more about property investment and real estate.

Interested in A brief guide to property investment? One of the premier sources for real estate investing networking and education is the SWFL REIA. In the real estate world the SWFL REIA is different in that they do not do information product sales. Their meetings are focusing on the best ways of investing in real estate by collaborating with other property investors who are sharing their experiences.

We look forward to meeting you at a meeting soon!
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How to find private lenders

Private lenders are non-institutional person’s (individual or a company) that lend money, secured by a deed of trust or note, used to fund a real estate project. A project can be a renovation, construction of a new property or re-purposing an existing property. Such investors rely on relationships as a basis to lend money. They will typically not lend to a person they do not know in person, or who has no one in the lender’s circles who can vouch for the borrower.

Finding private private lenders is not the toughest part. Proving that you are worthy of their investment is. As much as private lending relies a lot on relationships, relationships will only get you to the door. From then on, the investors will evaluate your credibility and make a decision on whether your investment is a risk they are willing to take. Typically, they do not do blank checks. Most private lenders will lean heavily on prior performance. Also, many private lenders are success real estate investors. They make great partners for first time investors. The best way I know to find private lenders is to search recorded mortgages via this link  and/or attend a SWFL REIA meeting.

Many private lenders lend the self directed IRA. We have a corporate sponsor that acts as a custodian Click here for more information.

As a general rule, the riskier the investment, the more interest private real estate investors will demand. Interest is a form of security for the investors. It shields their money in a trade-off design: the riskier the borrower (risk here being in terms of the duration of the loan or the credit status of the borrower) the more interest they will charge.

Should things not work out with an investor for whatever reason, bridges should not be burned. Word goes around really quick in the private money lending world. Credibility is key. Should word float around that a borrower cannot be trusted or cannot sustain a good working relationship with a lender, the same will work out against the borrower in future transactions. It is imperative that the borrower maintains a good line of communication, especially for future endeavors.

Quality private money lenders can open doors for a borrower not just because of the money they can throw at a business but because of the networks, they have access to. Should be treated with uttermost decorum and they will, in turn, return the favor tenfold.

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Investment In Property.

Investment in Property is different than searching for a place that you call home. Many individuals are presently putting financial resources into property investment. While real estate is putting forth opportunities for capital gains, the purchasing and owning of real property is much more complicated than stock and bond type investments. Meaning, it is more of an intensive investment.

During tough economic times, people search for extra income sources and/or safe havens for their principal. Property investing can be one of those investments. It also can give you several reliable income sources, as well as tax benefits.  Investment In Property is also called “real estate investment,” investing in property can give you a lot of benefits. One of these is that you can have the property rented while building equity.

Investment In Property: Rental Property

An investment property can be anything from an apartment building, vacant land, single family home or a duplex.  You can even live in a part of your property then lease out part of it. Not only you can save your rent, but you will also yield cash flow. But, of course, like with other investments, there are also risks involved such as hearing complaints from renters and unanticipated capital investment for building maintenance.

Before investing in property, review your current financial situation to make plans for the future. Think about just how long you would want to keep your investment property. In other words, do your homework and due diligence, that way you will know the expenses involved and the earning potential of a specific property. For instance, if you wish to keep a property for five or ten years then you have to prepare yourself for the larger (Roof, HVAC, Septic tanks) repairs and other expenses.

Investment In Property: Selling Property

There are a lot of agents who can help you sell your property. They can even help you choose others for investment. Most who are investing in property are continually improving the value of land or home and then they sell it at a price that is more than what they have invested in it. You have to devote time and have a plan to increase a property’s value. Keep in mind the other properties around the property you’re looking at, as they will affect the value (the exit price) of your investment.

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SWFL Real Estate after Irma

The case study SWFL Real estate after Irma was presented by Jeff Tumbarello, Broker Steelbridge Realty LLC/ Director SWFL REIA at the SWFL REIA luncheon in October.

Disclosure:

  • This presentation is meant to provide some guidance from a statistical point of view.
  • This is my work done for my use and shared with you.
  • All data exported from MLS and trended with Microsoft excel.
  • Data was exported on 10/4/2017

SWFL Real estate after Irma: First thing.

  • Hurricanes have long had an influence on the Florida Real Estate market.
  • The Florida Land Boom in the 20’s was finished off by the 1926 and 1928 hurricanes.

 

SWFL Real estate after Irma: Where is the market today?
Volume Jan thru Sept YTD
Lee County Residential

2016 2017 DIFF
Volume  $  4,084,576,398 $4,360,981,530 6.77%
Counts 14,934 15,024 0.60%

 

SWFL Real estate after Irma: Pricing
Jan thru September YTD
Lee County Residential

2016 2017 DIFF
Average  $273,509 $290,268 6.13%
Median  $205,000 $220,000 7.32%

 

SWFL Real Estate after Irma: Cash Sales Percentage.
Jan thru September YTD
Lee County Residential

2016 2017 DIFF
cash 6,308 6,171 -2.17%
Cash % 42.24% 41.07% -2.76%

 

SWFL Real Estate after Irma: September versus September Volume

2016 2017 DIFF
Volume  $385,989,908 $278,857,948 -27.76%
Counts 1,499 989 -34.02%

SWFL Real Estate after Irma: September versus September Pricing

2016 2017 DIFF
Average  $257,498 $281,960 9.50%
Median  $209,000 $225,000 7.66%

 

Here is what the year looks like.

Real Estate after Irma

Hurricane Charley:

  • Hurricane Charley made landfall in SWFL on 8/13/2004 near the island of Cayo Costa, Florida as a 150 mph (240 km/h) Category 4 hurricane
  • The real estate market was in a boom that was beginning to turn into a mania. Charley brought a lot of attention to the market, brought an influx of insurance money and reduced some inventory.

Real estate after Irma

 

Real estate after Irma

 

Hurricane Wilma:

  • Hurricane Wilma made landfall in Cape Romano, Florida on Monday, October 24, 2005.
  • Statistically, I can prove the SWFL Real Estate market had started divergence to the downside in August of 2005. Wilma caused people up north to pause. Rapidly rising prices compounded this.
  • Wilma really ended the manias demand. Leverage is what carried any momentum from there.

Real estate after Irma

SWFL Real estate after Irma: Some numbers of note.

  • August 2004 (Charley Landfall) sales were down -23.92% from the previous month.
  • October of 2005 (Wilma Landfall) sales were down -27.07% from the previous month.
  • September of 2017 (Irma’s landfall) sales were down -41.24% from the previous month.

Notes:

  • I am putting more weight on the trends from Charlie than Wilma due to the current trajectory of the market.
  • There are 1610 properties pending in Lee County from the last 60 days.
  • In the last 10 days 453 properties have went pending. (10/4/2017)

Where is the market today?
Collier County Residential Volume.

2016 2017 DIFF
Volume  $4,244,646,006 $4,683,933,70 10.35%
Counts 7,553 7,880 4.33%

 

Where is the market today?
Collier County Residential Pricing.

2016 2017 DIFF
Average  $561,981 $594,408 5.77%
Median  $326,150 $340,000 4.25%

Where is the market today?
Collier County Residential Cash Sales Percentage.

2016 2017 DIFF
Cash 3,813 4,083 7.08%
Cash % 50.48% 51.81% 2.64%

Where is the market today?
Collier County Residential Volume.
September Only.

2016 2017 DIFF
Volume  $      344,532,804 $231,008,708 -32.95%
Counts 700 422 -39.71%

Where is the market today?
Collier County Residential Pricing.
September Only

2016 2017 DIFF
Average  $              492,190 $547,414 11.22%
Median  $              320,000 $330,000 3.13%

 

Where is the market today?
Collier County Residential Cash Sales Percentage.
September Only

2016 2017 DIFF
Cash 332 211 -36.45%
Cash % 47.43% 50.00% 5.42%

 

Hurricane Charley Sales Counts Patterns for Collier.

Real estate after Irma

Real estate after Irma

 

SWFL Real Estate After Irma: Some Thoughts.

  • Irma will be a more significant event for Collier and Bonita.
  • Kudos to the new building codes. The new construction industry should benefit.
  • Older resale’s may have issues with sentiment going forward. Especially older waterfront resale’s.
  • Watching the pending thru February will be on my radar. As will the foreclosure filings.
  • There will be opportunities in the non-bank distressed market.
  • Insurance companies appear to have gotten better at mass events in relation to loss prevention. I have spoke with several people where the insurance company has “approved vendors”. This will have an affect on local contractors.

SWFL Real Estate After Irma: Foreclosures.

  • I have seen interviews with public and private individuals referring to a bump in the foreclosures.
  • You have to understand the timeline to understand the possible trends.
  • The earliest a foreclosure will be filed is roughly 90 days from today. Then you have generally a 6 month process.
  • Due to our high percentage of cash sales since 2009. It is unlikely to trigger a mass event like the end of the last cycle.

~ Stay tuned (subscribe and follow) for updates going forward. Reposted from

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Is Real Estate A Good Investment For You?

Perhaps you have heard about some people who earn extravagantly from real estate, and your interest is piqued on investing in property assets too. Just like any business venture that you decide to undertake, you first need to assess whether your decision on real estate investment is good or not. This is very important in determining whether your efforts, time and money will at least not go to waste.

It would help in coming up with a good decision to first know what pros and cons such investment can offer.

Is real estate a good investment for you? Find out if it is by knowing the advantages and disadvantages this venture can offer.

Advantages of Real Estate Investment

Is Real Estate A Good Investment: High-Profit Potential

You may be purchasing a property at a price higher than the usual prices of commodities. However, in property trading, you can sell a property at a higher price, so your profits will also be higher.

Is Real Estate A Good Investment: Investing In Leverage.

This investment lets you borrow money according to the property’s value. Compared with other products that you can invest on, you will realize that it is fairly easier to obtain funding for it. In real estate, you will only need to pay a fraction (5-20% of the price as down payment), for example. So, even if the property is costly, you can still find it easier to acquire compared to a big machinery with the same price.

Is Real Estate A Good Investment: Local Advantage.

The topic about local advantages of land assets is hardly discussed in the market. Thus, if you know your locality, city neighborhood or town very well, you have a lot more knowledge on properties there that any other experts around the world.

Is Real Estate A Good Investment: Bird Dogging Beginning.

One great way to start on real estate investment is by first becoming a bird dog. A bird dog is one who searches and finds great deals on properties for other experienced and expert investors. This way, you can already acquire the knowledge necessary for eyeing if a piece of property is profitable or not. You can spend your time mastering the ins and outs of real estate investment while getting paid for doing so.

Disadvantages Of Real Estate Investment

Is Real Estate A Good Investment: Non-liquid Investment.

This type of venture is one where money does not constantly flow. Your money could stay dormant if you are not able to sell or rent out the property. Furthermore, there are also tax and maintenance expenses to be paid. To sustain your investment, you need to have another investment or liquid asset where money can constantly be earned. So even while money sleeps in the property, you still have a reliable source of living.

Is Real Estate A Good Investment: Possible Miscalculations.

Many investors commit the mistake of purchasing properties during a boom; but without including in the computations, other costs involved such as repair and maintenance. Thus, they may be able to buy a great investment, but eventually, result in a loss because of failure to finance other necessities to make the property more sellable.

With any investment, it is important to consider the potential risk that everything goes to hell in a hand basket. Obviously, this can be a big problem with stocks. A high flying stock today can be a loser in a big way tomorrow. Just ask the folks that owned Enron, Adelphia and so on. The real estate market, on the other hand, tends to be less volatile. Valuations will change from time to time, but drastic moves are rare.

The decision to invest in real estate is one that only you can make. As with most assumptions, real estate may or may not be a good investment strategy.

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September 2017 Lee County Foreclosure Trend Report

Here is the September 2017 Lee County Foreclosure Trend Report!

Where does the September 2017 Lee County Foreclosure Trend Report come from?

We download from public records and trend with microsoft excel.

Why do we generate reports like the September 2017 Lee County Foreclosure Trend Report?

The SWFL REIA is known and respected as a source of current, actionable and useful information about the housing market in the area that we meet. This report is a leading indicator of a rise to the distressed market. Therefore, watching these numbers each month gives you a unique advantage of being able to adapt quickly in the event of a market turn.

Compiled and analyzed by: Jeff Tumbarello, Director

Without further ado, here is the September 2017 Lee County Foreclosure Trend Report:


Lis Pendens:

  • September 2017: 60 Mortgage related Lis Pendens.
  • August 2017: 89 Mortgage related Lis Pendens.
  • September 2016: 98 Mortgage related Lis Pendens.

Certificates of Title:

  • September 2017: 30 Certificates of Title were conveyed.
  • August 2017: 87 Certificates of Title were conveyed.
  • September 2016: 81 Certificates of Title were conveyed.

Foreclosure Trend Report

Foreclosure Trend Report

Foreclosure Trend Report

 

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The SWFL REIA is the premier source for Real Estate Investing education and networking.

The SWFL REIA is different in the Real Estate Investing world in that we do not do information product sales. Our content rich meetings focus on Real Estate Investing via collaboration with like-minded Real Estate Investors sharing their own experiences.

The SWFL REIA is on the cutting edge of data gathering and analysis of the housing market and foreclosures. Our Analysis and Trend reporting has made the SWFL REIA an expert source for the media and set standards by which the housing market is analyzed and trended within the industry.

Our members are Real Estate Investors, Real Estate Agents, Title Agents, Insurance Agents, Landlords, Property Managers, Wholesalers, Rehabbers, Note Buyers, Hedge Fund Managers, Bulk Asset Purchasers, Foreclosure and Probate Investors. Come and network!

Our Motto: Knowledge withheld is Knowledge wasted.

The number one key to being successful in real estate investing is?

To understand what you are there to do!

From our experience, this is the most critical phase. If you have a clear plan it is easier to deploy capital while still operating within a margin of safety.

The SWFL REIA is the premier place to understand what you are here to do, in relation to real estate investing! We look forward to meeting you at a meeting soon!

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