35 Best “Bad” Neighborhoods to Buy a Home

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Many down-and-out neighborhood housing markets across the country are on the rebound thanks to a confluence of market forces working in their favor. Tight inventory of homes for sale combined with a dearth of new homebuilding is convincing buyers and investors to reconsider buying in what they once might have considered “bad” neighborhoods.

RealtyTrac analyzed housing market and neighborhood quality data in 3,561 U.S. zip codes with a combined population of 124 million to select the 35 best “bad” neighborhoods to buy a home.

Dashboard 2(http://www.realtytrac.com/news/real-estate-investing/best-bad-neighborhoods-to-buy-a-home/)

 

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Private Lender Slides (For Flip Nerds Only!)

Thanks for listening Flip Nerds! Below are the slides from the Podcast. Enjoy! 🙂

 

CLICK HERE TO VIEW THE PRIVATE LENDER SLIDES  <–

 

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Real Estate Investor, and friend to the Real Estate Freedom community, Rob Swanson just released a training video that goes through a probate investing scenario, step-by-step.

In this video you’ll learn:

Learn how to get probate leads that no one knows about by getting the houses released from the probate early — the families will love you. SEE THE FULL TRAINING VIDEO HERE!

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Why do 97.4% of Real Estate Investors FAIL?

This new video by Matt Andrews reveals why most Investors are dead before they complete their first flip and how you can insure that you are one of the 2.6% who profit on EVERY DEAL. The Secret is… SEE THE VIDEO HERE

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REAL ESTATE FREEDOM is a member of Community Buying Group, which entitles you to free benefits, such as their Lowe’s program. You save 5%+20% every day at Lowe’s, Sherwin Williams, and many others. The average user saves more than $1,600 a year.

CLAIM YOUR FREE MEMBERSHIP!

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Flood of Cash Buyers Could Crash Some Markets (See if yours is on the list)

Cash Buyers Pay 23% Less on Average. While it’s typical for buyers to score a discount on a home if they pay in cash, in approximately 9% of markets nationwide, cash buyers actually paid a premium, raising questions about the health of those specific markets, according to RealtyTrac’s Q1 2016 Cash Buyers & Institutional Investors Report.

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(http://www.housingwire.com/articles/36903-cash-homebuyers-threaten-to-overheat-some-markets)

 

While it’s typical for buyers to score a discount on a home if they pay in cash, in approximately 9% of markets nationwide, cash buyers actually paid a premium, raising questions about the health of those specific markets, according to RealtyTrac’s Q1 2016 Cash Buyers & Institutional Investors Report.

“Markets where we see the opposite, with cash buyers actually paying a premium price per square foot, could be in danger of overheating,” RealtyTrac Senior Vice President Daren Blomquist said. “In most markets, cash buyers act as an anchor for home values, but in these exceptions to the rule, cash buyers are acting as an oversized sail, catching more wind and pushing home price appreciation to a potentially precarious pace.

shutterstock_71006383”Nationwide all-cash buyers purchased single-family homes and condos for a median $91 a square foot in the first quarter of 2016, a discount of 23% below the median $118 per square foot for all home purchases, the report found.

“While large institutional investors and other cash buyers continue to shrink as a share of U.S. home sales, these buyers still typically beat out traditional buyers using financing, in some cases even when they submit a lower offer for a home,” Blomquist said.

“Additionally, cash buyers are often willing to take on properties in poor condition that may not readily qualify for standard financing, another reason why cash purchases normally sell at a lower price per square foot,” Blomquist said.

Q1-2016-Cash-Buyers

Among 99 metropolitan areas with at least 1,000 single-family home and condo sales in the first quarter of 2016, these were the top ones that paid a premium:

  • Honolulu: 6.6% premium
  • Seattle: 5.2% premium
  • San Francisco: 4.8% premium
  • Naples, Florida: 3.9% premium
  • San Diego: 2.5% premium

 

On the other hand, out of those same 99 metropolitan areas, these were the ones with the largest discounts for cash buyers:

 

  • Baltimore: 58.2% discount
  • Akron, Ohio: 50.2% discount
  • Harrisburg, Pennsylvania: 52% discount
  • Birmingham, Alabama: 49.3% discount
  • Columbia, South Carolina: 48.3% discount
(http://www.housingwire.com/articles/36903-cash-homebuyers-threaten-to-overheat-some-markets)

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HOW TO FLIP REO’S FOR MAXIMUM PROFIT: Part 5 – {Elite Investor Series}

Bank Owned Properties still represent one of the greatest opportunities for saavy Real Estate Investors in the market today. See how it works from the inside out. This 5 part series is an entire REO Investing Course in disguise, so take advantage of these implementable strategies! 

After you absorb this blog post you will be able to:

  • Explain the difference between conventional, private, and hard money lending
  • Match the funding to the deal

For a dedicated wholesaler, the goal is always to flip the properties as quickly as possible using as little of their own capital as possible. However, sometimes you will find yourself in a position where you need some real capital to get a deal done.

Maybe you want to buy and hold some properties. Maybe you know you can sell a property, but just need a couple more weeks to get it done. Whatever the reason, short term capital secured by real estate can be a confusing concept to the new real estate investor. Let me break it down for you.

shutterstock_187760795Here are your funding options:

1) Conventional Loans:

These loans are your typical bank mortgage loans. They are not very helpful today for two reasons: First, they are hard to qualify for. Second, the best REO deals are bought with cash and need a cash proof of funds when submitting the offer. However, some investors in certain parts of the country are still using conventional loans for investment purposes. Don’t waste a lot of time here, though. You will need a credit score of at least 700 (and very likely more) to even be considered for a second home loan or investor loan. You will be asked to put down 20-30%.

Take my word for it. The banks don’t want to loan on an investment property right now. They will look for every reason not to do the deal. Though you could technically do multiple loans, the bank will find a way not to do them. In my local Florida market, they won’t finance anything less than a $50k purchase. That excludes the best properties in my market. So, conventional is not for me.

2) Hard Money Loans:

A hard money loan is basically a private loan for a short term, usually 6-12 months. Hard money loans are generally used to fund real estate deals when the objective is a quick exit. They are high interest, high penalty loans and should only be used after good research and careful consideration. In my area of Florida, a typical hard money loan may be 70-90% financing for 6 months, paying 2-3 points and 15% interest or more. If you don’t know what you are doing and have a weak exit strategy, the payments will eat you alive. Don’t ask me how I know that! Although the terms are steep, these loans can be great assets to investors looking to flip properties quickly or investors that have a well-formed retail strategy. Sometimes these loans are also referred to as “short-term funding” or “bridge loans”.

3) Private Investors/Partners:

This source is determined by your own ability to network. I have done nu- merous deals with numerous partners over a variety of structures. You are only limited by your vision and commitment. If you prove that you know how to make money in real estate successfully, you will have people beating down your door wanting to partner with you. So get creative. Offer equity in the property to a partner with capital. You supply the plan, while they supply the money. Offer a friend or family member the opportunity to lend you money at 7% while the bank will only give them 2% in a cD or money market account. There are no boundaries here. The worst anyone can say is no.

4) Hitting the Lottery Jackpot:

This includes winning the lottery, inheritance from long lost rich great uncle, becoming a major sports star. If you find yourself in any of these categories—call me!

 

1_123125_123073_2207907_2226910_090922_exp_fmj.jpg.CROP.original-originalYour Assignment:

As an investor who will be selling to other investors, you will find it helpful to know what is available in terms of loans in your area. It will be more value that you can bring to your loyal buyers.

CONVENTIONAL: contact at least 3 lenders who work with investors. In my opinion, it’s always best to get referrals from other investors, but you can search the web if need be. Ask them what investors are doing with them. Type of property, area, price range, interest rates. Get specifics and take notes.

HARD MONEY LOANS: contact at least 3 hard money lenders (if possible). Find out what types of properties they generally lend on. This will be a great way for you to see what other investors are doing in your area. Find out the type of property, area, price range, etc. Get specifics and take notes.

 

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Real Estate Investor, and friend to the Real Estate Freedom community, Rob Swanson just released a training video that goes through a probate investing scenario, step-by-step.

In this video you’ll learn:

Learn how to get probate leads that no one knows about by getting the houses released from the probate early — the families will love you. SEE THE FULL TRAINING VIDEO HERE!

**********************************************************************************

Why do 97.4% of Real Estate Investors FAIL?

This new video by Matt Andrews reveals why most Investors are dead before they complete their first flip and how you can insure that you are one of the 2.6% who profit on EVERY DEAL. The Secret is… SEE THE VIDEO HERE

**********************************************************************************

REAL ESTATE FREEDOM is a member of Community Buying Group, which entitles you to free benefits, such as their Lowe’s program. You save 5%+20% every day at Lowe’s, Sherwin Williams, and many others. The average user saves more than $1,600 a year.

CLAIM YOUR FREE MEMBERSHIP!

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