Archive for September, 2013

It’s a Great Time to be in Real Estate Sales

September 30, 2013

join_real_estateUntil recently, all you heard about the real estate market was bad news. Prices dropping, over supply of inventory, excess bank foreclosures, short sales, etc. Income fell by 35 percent for real estate agents on average. Times were tough. Since the peak of the market in July 2007, thousands of real estate agents left the business and the interest in getting into real estate died.

That trend is reversing. It’s actually a great time to be in real estate sales. Home prices have increased month over month for the last 8 months, interest rates are still at historic lows, buyer demand is strong, bank foreclosures and short sales are down dramatically (35% of overall sales compared to 65% just 2 years ago) and new home inventory is on the rise. (more…)

What is a Capitalization (Cap) Rate?

September 23, 2013

cap_rateIf you’ve ever thought about purchasing an income producing property, you probably heard someone talk about the CAP rate. The cap rate is defined as the rate of return on a real estate investment property based on the expected income that the property will generate. Capitalization rate is used to estimate the investor’s potential return on his/her investment.

The most commonly used formula for determining a cap rate is simply net operating income divided by value. Let’s suppose that you are looking at a commercial building that has five tenants. The asking price is $800,000 and the net operating income is $75,000. By dividing the value of $800,000 by the net operating income of $75,000, you determine that the cap rate is 9.4%.

If you identify an income producing property for sale with a cap rate of 13%, your first thought might be that it looks like a great investment. A 13% return sounds great.

Before you pop the cork on the champagne bottle and begin the celebration, take a closer look. As the cap rate goes up, the price goes down however, risk follows the cap rate. So, the higher the cap rate, the higher the risk. (more…)

A Guide to #Hashtags

September 16, 2013

hashtagsWhat’s a hashtag? Well, on Twitter – and increasingly everywhere else – a hashtag is a word or phrase (with no spaces or punctuation) preceded by the hash symbol (#), which gives users an easy way to communicate around a single theme.

Example: #RealEstate.

The use of hashtags in social media originated back in August 2007, when designer Chris Messina asked his Twitter followers how they felt about using the pound sign (#) to group conversations on the micro-blogging platform, and became the first person to use the hashtag in its modern capacity.

While hashtags began on Twitter, they have now spread to Instagram, Google+, Pinterest, LinkedIn, Vine, and Facebook.

The beauty of hashtags is that it makes your post, message or photo searchable by any user on that social network, not just those that follow you.

So how can you use hashtags to your advantage? (more…)

Credit Disputes Can Delay Your Mortgage Application Even if they are Legitimate!

September 9, 2013

credit_fixersAll lenders are requiring any disputed account on a borrower’s credit report to be resolved or the dispute removed before the loan can be approved. The reason for this is that unscrupulous “credit repair” or “credit fixer” companies have told consumers how to use (abuse) the Fair Credit Reporting Act to falsely inflate the consumer’s credit scores.

The Fair Credit Reporting Act allows for any consumer to dispute any credit account or payment history rating they believe to be incorrect. The Act requires that any account that is under “dispute” be omitted or neutralized and not considered in determining the consumer’s credit score. This Law is in place to protect innocent consumers from erroneous credit reporting. (more…)

What Your Home Insurance Covers… And What It Doesn’t

September 3, 2013

insurance_coverageWhenever you purchase a new home with financing, the mortgage company will absolutely require that you also purchase home insurance. Many homeowners view their home insurance as a “necessary evil”, and simply purchase their policy without knowing exactly what it covers.

Lenders want to know you’re protecting their investment from harm, such as damage caused by fire, water, a tree falling through the roof, and even vandalism. Don’t wait until something happens and you need to USE your policy to find out.

Unless you’ve added some extra coverage – or “upgrades” – to your policy, here’s a good rule of thumb on what a typical home insurance policy covers: (more…)