Real Estate Investing Links for March 3, 2010

“Obama Looks to Stop All Foreclosures Without Government Review”

financialThe Real Estate Bloggers report on the Obama Home Affordable Modification Program’s efforts to examine all potential foreclosures. The bloggers maintain that government intervention is “not the answer” and that the markets must self correct before consumer confidence can be restored. The proposal, which has not been approved, would halt all foreclosures until it has been officially determined that “reasonable contact efforts have failed.”

“Trying to Figure out a Home’s Value? Don’t Use the Tax Info”

Crissie Cudd of Crissie’s Comments explains why real estate investors cannot rely solely on a property’s tax information to determine its value, stating “at best, tax records reflect the past, not the present.” Due to the volatility of today’s market, investors can’t expect a home’s tax records to accurately reflect its value. For a more exact appraisal, the article suggests looking at the prices of similar properties for sale.

“More than One in Four Homes Appreciated in 2009”

depreciationThe Real Estate Economy Watch reports on a study by Zillow claiming that even with many Americans owing “more on their homes than their mortgages were worth,” slightly more than 25% of homes appreciated in 2009, while 65% depreciated, and 7% saw no change. Zillow claims that homeowners are now increasingly optimistic following “news about the stabilization of home values.”

“Expect Tight Credit Conditions To Persist As Commercial Mortgage Defaults Rise”

The National Real Estate Investor predicts that “tight credit conditions” will persist this year and that the national default rate will not reach its height until 2011 (at 5.3%.) The article attributes the climb of this rate (from as low as 2.25% in 2009) to vacancies due to job losses, and the resulting sharp decrease in NOI of commercial real estate investors. Writer Matt Valley explains the need for community banks (who “have about 10 times more exposure to commercial real estate than large global banks”) to acknowledge and address non-performing loans.

“Why Real Estate Investing Scores Over Stock Investment Alternatives for Safer Deals”

middleThe Real Trader makes the case for investing in real estate instead of the stock market. In addition to appreciation, real estate investing is generally a “simpler” form of investing. Rather than trusting brokers to make profits for them, real estate investors take a more “hands on approach,” and can leverage other people’s money in a way that minimizes personal risk. There’s also the tax advantage of depreciation- while tax laws are written to assume depreciation of a house, they ignore the appreciation of the land underneath.

“Different Types of Real Estate Investing”

Mentor Brian Lee wrote this article for the blog White Trash Millionaire listing several ways to invest in real estate. Multifamily investment, while admittedly more expensive to get into, is “more passive” and profitable- especially when you begin to consider economies of scale. The second option he discusses is “investing in real estate secured notices,” meaning lending money to trusted investors for interest (or equity in the property if it faces foreclosure and you “take over.”) Another option is to invest with hard money that requires you to spend little personal money.

Peak Personal Finance hosted a blog carnival mentioning Brian Lee’s “How 15 Rent Houses can Retire You Faster than a $1 Million 401k” as one of this month’s top real estate articles. See what other articles were selected!

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