Cash Flow Real Estate For Sale – Passive Investing

Being a real estate investor and wholesaler of investment property over the years, the conventional approach is to find and buy a property at a deeply discounted price, rehab to a rental or flip standard and either flip the property to a home owner or rent and hold the property for immediate net rental income and long term property appreciation.

I still follow this conventional way to invest in real estate for myself and my investor clients.
But there is an alternative method of real estate investing that has removed the fear and anxiety of searching for the right property, going through the rehab process and dealing with contractors and either you or your property manager finding proper tenants. This whole process can take 3 to 6 months.

There is an alternative way of investing in rental properties and helps you, the investor, reach your cash flow goal quicker, with the same or even better results. That is investing in turnkey cash flowing properties. How would you like to have the entire process of finding investment real estate down to about 30 days?

This is the investment model followed by Mason Hill. Mason Hill negotiates with banks to purchase 15 to 30 foreclosure properties at a time. This “bulk buying” gives Mason Hill the edge in negotiating power that a single investor or a group of investors does not have. Prices are discounted to almost have instant appreciation.

The properties are reconditioned both inside and out. All title problems and any issues with taxes and liens are resolved. After the refurbishing process is complete, the properties are rented to reliable tenants and property managed thereafter.
In fact, Mason Hill will not sell any of their single family or duplex investment properties until it is already cash flowing.

You, the investor, acquire the property after the entire property search, rehabbing it and the tenant placement process is complete. Truly turnkey! And since it’s property managed by Mason Hill, it’s truly passive income.

This turnkey model is what attracted me to become a Mason Hill representative and provide an alternative investment property model for my clients. See how the Mason Hill model works.

Temple University’s 1.2 Billion Expansion – Good For Property Investors

Student housing has been a hot real estate investment subject. Philadelphia, with several major universities and hospital universities in the city and surrounding area, has become a great source for positive cash flowing properties.

In particular, the Temple University area has been hot for investment real estate. We have posted several blogs about Temple University student housing investments over the years, and we’re always being asked by would be investors what is Temple’s future like.

I am a Temple alumnus, and receive the “Temple Review” magazine. Also having toured the campus a few months ago for my daughter’s own college search, I must say it’s impressive. Temple University has come a long way since my 1980 graduation.

Over the last few years, property investing in the Temple area has become competitive. Investors and contractors have been rehabbing and building student housing properties along with Temple own housing expansion and Philadelphia’s revitalization plan for the area.
Temple has been involved with community outreach projects and will increase the partnerships with the community in the region and across Pennsylvania.

As stated in the recent Temple Review, “Temple also will create new facilities for learning, living and recreation. Temple 20/20, the framework through which the university will become a true destination, will rejuvenate Broad Street and make it a vibrant corridor that thrives around the clock as a lively urban environment.”

In the Philadelphia Business Journal article of April 22, 2010, Temple has initiated selling $150 million in bonds for its $1.2 billion in development plan. “The school is hopeful the projects will continue to reinvigorate North Broad and re-establish the artery as the gateway to the campus. Once completed, the plan will create more green area and academic space, develop additional campus housing and link the core of the main campus to North Broad.

Read more: Temple’s $1.2 billion project – Philadelphia Business Journal

With the growth already experienced and seen and with what Temple is planning, the housing and rental market should continue to be an attractive area for real estate investments.

Check out the Temple Univ. area investment properties available at this time at SellPhillyProperty.com

Global Upheaval Equals Low Mortgage Rates

The upheaval of the global financial market has produced one positive side effect: historically low mortgage interest rates. For the past year or so we have been hearing about historically low interest rates, repeatedly being told that the rates are the lowest that they have been in 30 years, since the tracking of interest rates began. This week the headlines have been blaring the same news again, with interest rates even lower than they were the last time that they were at 30 year lows just a few months ago.

Currently a 30 year fixed rate mortgage can be locked in for a 4.87% interest rate. Even jumbo loans have fallen, with an interest rate of 4.5%. While there is much hype about the tightening of the financial market and the hoops a borrower has to jump through to secure a loan, there couldn’t be a better time to refinance or purchase a new home.

It’s a great time to either own a home or buy a home. Low interest rates can shave a great deal of money off of the cost of a home over the lifetime of a loan. If you have good credit, a steady source of income and have been thinking about purchasing real estate then you owe it to yourself to get out there and start looking, unless of course you can afford to wait another 30 years or so.
On the real estate investment side, we have seen fast changing and more liberal criteria for both debt and equity (including some for development) in the last 30 days. The focus for capital continues to be on both ends of a “barbell” i.e. top tier product, sponsor, and location which justifies reasonable pricing and terms OR very discounted distressed assets which make sense to capitalize at a high cost of funds.

If you would like a source of various lending products and sources, go to our wholesale real estate investment website and click on the “Refinance” or “Hard Money” pages.

Thinking About Using Tax Credit Toward Buying Real Estate? Act Fast!

If you are thinking about using the extended and expanded home buyer tax credit to purchase a home this year you better act fast. The tax credit can be used on homes purchased by July 1, 2010, but the homes must be under contract by April 30, 2010. What does this mean?

You have a little more than a month to locate your new home. The tax credit is for two types of buyers, first time home buyers (home buyers who have not owned a home in the past 3 years) or home owners who have lived in their home for 5 of the past 8 years and want to purchase a new primary residence.

Important aspects of the tax credit include:
- Homes must be closed by July 1, 2010, under contract by April 30, 2010.
- Homes must have a value of $800,000 or less and must be the buyer’s primary residence.
- There are income restrictions, $125,000 for singles, $225,000 for couples.

The credit is also affected by being single or married. Married couples who file together are entitled for up to $8,000 for a first home buyer, up to $6,500 for current homeowners. Single people are entitled for up to $4,000 for a first time home buyer and $3,250 for a current homeowner.

The credit will need to be repaid if you sell your home within a time period of 36 months.
Remember, time is running out. Contact a real estate professional today to start looking for your new home if you intend on using the tax credit.

Astute real estate investors have invested funds into purchasing and rehabbing homes throughout the country. In Philadelphia, homes for new buyers are on the market in various parts of the city and at various price ranges. Lists of available homes are either posted on the Multiple Listing Service (MLS) or listed some by For Sale By Owners (FSBO) on sources such as Craig’s List and can easily be toured set up by a realtor or the owner of the home.

Understanding After Repair Value (ARV) in Real Estate Investing

In today’s real estate market, property investors look at specific ARV as the end-goal that their investment property must reach. However, in the last few years, it seems that this “ARV goal post” was in constant movement. How do you reach a goal when they keep moving the goal posts?

2008 and 2009 were frustrating years. As market values started to slide, the ARV that you’ve determined today would not hold by the time you acquire your property and had it rehabbed. That $120,000 ARV that you’ve correctly determined in December, was no longer valid according to the bank by the following March. In a matter of 2 to 3 months, when it was time to refinance or sell your property, the bank has determined that your ARV was actually now around $108,000 – a nice 10% drop! A constant frustration.

What is ARV? Well, it’s exactly what After Repair Value means, the value of your property after it’s been rehabbed and ready to be flipped or rented. That’s the number that will determine your return on investment – of course assuming that your other costs have been accurate.
On our website’s list of available properties, in the information area for each property we wholesale to investors, we use the lowest priced comparable sale (comp) out of at least three sold properties. We might even go a few thousand dollars under that, just to be on the safe side and to show a conservative monthly cash flow or net profit.

Often we receive questions from investors that they have looked on various online real estate websites, such as Trulia, Homegain, or Zillow and the value of the home we have is either too high or too low. Why they ask.

Well, it doesn’t matter what ARV Trulia states, or Homegain or Zillow or willow or schmillow. What matters is WHAT DOES THE BANK SAY THE ARV IS. And what the bank’s appraisers use to arrive at that number are comparable sales from the Multiple Listing Service (MLS), that can be provided by any licensed real estate agent. True, online websites can get you close, but the bank’s ARV comes from comps.

The comp parameters for Philadelphia investment property is at least three (3) sales of similar property as the subject home (bedrooms, sq. ft., etc) within the past 6 months, within .3 of a mile of the subject property. If they can’t find 3 sales, then the parameters are expanded incrementally. For the Philadelphia suburbs, a greater distance parameter can be used.

Investor’s best bet is do your due diligence and look at your investment property as the bank would.

Flipping An Investment Property? An Inspection Can Make or Break Your Deal

Be prepared for what a home inspection might reveal when selling your home

Since the start of the $ 8,000 tax credit and its extension to the end of April 201o, the flipping market has quite popular in the Philadelphia area. Some realtors and other investors that I’ve talked to over the past few weeks, have expressed that first time home buyers that are qualified for the tax credit, are finding it difficult to find desirable properties.

It’s that home price range between $ 80,000 and $ 200,000 where buyers are seeking homes that they would like to move into without doing any work to the homes at all. Homes for sale in “move-in condition” seem to be just a bit difficult to find.

Also, advice to the investor that is flipping the home, do a home inspection when your property hits the market. Home inspections can often make or break a deal. If possible sellers should have one done ahead of time so any additional repairs can be made and a home can be in its best possible condition. However, often a seller does not do a home inspection first and is caught off guard by a list of repairs presented in the due diligence portion of the contract process.

Also, make sure that your home inspector is a member of ASHI (American Society of Home Inspectors).

The most common home ailments that show up in the home inspection process are:
-Faulty electrical wiring
-Roof damage
-Plumbing issues
-Poor drainage

Yes, these problems can occur in recently rehabbed homes. If you and your contractor have done a thorough rehab, then your flip investment property should come through with flying colors. These are issues that can add up to a potential home buyer walking away if a seller is unable to step up and make the repairs or commit the money to make the repairs.

Examine these aspects of your home yourself, if you and your contractor know everything is in good condition and the work that has been done to your home has been completed by your contractor then you can rest easy, otherwise be prepared to make additional repairs in order to sell your home.

To view an article on home inspections by Realtor Magazine, click here.

Real Estate, Where are We? Investment Property - Buyer’s Market

When it comes to real estate the general sentiment appears to be that of putting 2009 in the past and looking forward to a brighter 2010. Looking at where we are and where we are headed as far as real estate goes will take us from the present into the future. Currently home values are affordable, because prices are low and interest rates are low. Both of these low levels add up to the fact that it is a great time to be a buyer when it comes to real estate.

Currently home values are affordable, because prices are low and interest rates are low. Both of these low levels add up to the fact that it is a great time to be a buyer when it comes to real estate.

Plus, the extension of the $ 8,000 tax credit for first time home buyers and the new $ 6,500 for existing home buyers has created a surge in home flipping for investors. Several flip and buy & hold investment properties exist for real estate investors.

Interest rates have been hovering at 5% or lower for the better part of the past year, a trend that cannot be expected to continue. As the market stabilizes more and the economy gets better, interest rates will rise. While home prices still may drop in many areas of the country, they will not drop much more. Areas that are less affected by foreclosures, short sales and REO properties are likely to level out faster than other areas due to the lack of distressed sales in their inventories. A rise in interest rates may bring real estate prices down to sell but the days of 20% and 30% decreases appear to be unlikely.

In a nutshell now is a great time to buy investement real estate, especially in the Philadelphia area, if you have been waiting for the right time to plunge into the market. Take advantage of low interest rates while they are here. It is a buyer’s market now, it won’t be forever.

For an interesting analysis of the real estate conditions and a forecast of 2010, by CNN Money, click here. I, along with other active investors that I know, believe the Philadelphia flip market is strong and will do well for this upcoming spring market.