Christine Loschiavo, www.RealAZ.com

Part II in Investing Series of Blogs

Ok, you so you want to be a Real Estate Rockstar! You see yourself telling your friends, oh yeah, I have properties in AZ. Don’t you? Like that idea? Well let’s see how can you get from here to there? The first couple of steps are important. Don’t skip them.

First stop: Find a reliable Realtor. One that has experience in real estate investments. Not a newbie. (I always recommend RealAZ Team at RealAZ.com) Ask friends and neighbors for Realtor’s names, then interview them. Interview a few. Ask questions like:

How long have you been working with investors?

Do you personally own investment properties?

What are the most important things for an investor to be looking for in a property?

Experience counts. If the Realtor has their own properties, they know first hand what to look for. You can’t underestimate the value of their personal experience. Pick one that you have confidence in and that you like. You will be working closely with this person.

Next, I advise my clients to read up on the investment process and recommend my favorite trade books. You need basic knowledge of how the real estate investment world works. A little bit of knowledge can save you thousands in the long run. Your Realtor can guide you but you need to know what you are doing, so don’t skip this part. Books I like include: Real Estate Investing For Dummies, 2nd Edition by Eric Tyson and Robert S. Griswold, Rich Dad's Advisors®: The ABC's of Real Estate Investing: The Secrets of Finding Hidden Profits Most Investors Miss by Ken McElroy, and The Beginner's Guide to Real Estate Investing by Gary W. Eldred will all help build your knowledge base.

With these two steps taken care of, you are ready to start looking.

Oh, but how to chose? That is the tricky part. You will need to look at properties with an eye to their income potential not their appreciation in value. As the market has shown us, investors cannot count on properties appreciating. The money will be made in monthly cash flow. And if down the line the house does appreciate a great deal, all the better. Your Realtor will help you look at profit and loss of a rental property, and since you now have a rudimentary understanding of what this means, you can make an informed decision on whether a to purchase or to pass on any give property.

In my next blog post we will look at how to determine a rental property’s performance so that you can make smart decisions. RealAZ.com

If you are thinking about becoming an investor in residential properties, now is the time. Residential properties that have been foreclosed upon and now are owned by banks (commonly referred to as: Real Estate Owned or REOs) are the best bargains for you. Banks want these properties off their books. Banks do not want to own homes they want to own mortgages. To unload these homes, the banks price them below market value. This creates a win-win situation for you as an investor and for the banks. You pick up properties at bargain basement prices and the banks quickly reduce their loss. The old saying, Buy Low, Sell High was never truer than it is in Arizona’s Real Estate market. This is the low point. The lowest point in recent memory.

But wait it gets better. More REOs are coming on the market than ever before. Lenders have been holding back on their inventories to prevent the market from becoming bogged down with these properties and toppling the market. To you, this means, you will have a great variety of investment opportunities from which to choose. Real Estate investing, here I come.

Notice, I said investing. Not flipping. For a new investor, flipping is stressful and difficult. Forget what you have seen on HGTV about flipping. They have editors who cut out the worst parts, shorten the time frame and only include shots of happy, smiling faces. Real life flipping does not come with film editors. The reality is, you can spend a lot more money than you bargained for, run into mind numbing problems and be unable to sell at a profit.

As a Real Estate investor, you will need to be able to hold on to the property until the time is right to sell high. How long will that be? Predictions run the gamut from two to ten years. Yes, this is a Long Term investment. If you are in it for the long haul, you are ready to start on the investment road.

How do I get started? In my next post, I will explain what you need to do to get started on your real estate investment path. RealAz.com

Have you been daydreaming about a bigger kitchen? nicer pool? home office? an extra bath? The market conditions have converged to make this summer the absolute best time to buy your next home. And if you are renting now, you are overpaying. You can own your own home for less than you are paying in rent.

Chandler has a mind boggling amount of resale homes on the market. Homeowners need to sell for a variety of reasons, with job loss and transfers requiring fast sales. Other owners who bought at the height of the market and paid a premium price for their homes, now owe more on their mortgage than the home is worth. These owners are short saling their properties. Still other properties have reverted ownership back to the banks and are being sold at discount prices. In order to compete with short sale and bank owned prices, resale prices have dropped substantially. Prices are beginning to inch up and many in the industry feel that the bottom was reached this spring.

Chandler Real Estate

New home builders with spec homes and new builds to move are offering amazing incentives. Some will pay for all of your closing costs,others will give thousands in upgrades, rock bottom financing or cheap premium lots.

Long term interest rates continue to improve and have now surpassed their best levels of the year:

4.5% rate on 30 year fixed rate!
4/125% on a 15 year fixed rate!
FHA loans at 4/75%!

Truly incredible rates which translate into low monthly payments. Really low. Low home prices, low interest rates. Perfect for the buyer. But, no one knows how long this perfect scenario will last. With our economy, the situation can change quickly. Another national disaster, continued bad news about the war, government scandals could negatively effect the mortgage market.
So, if you are daydreaming, thinking about or even just wishing for a new home or more comfortable digs, now is the time. And, Chandler has the right home for you. Right now. Sweet!

www.RealAZ.com Making Real Estate Easy!

This inviting, 4 bed/3 bath, 2300 square foot home in a well kept neighborhood, is directly across from a large city park. And as an added bonus: there is no HOA! When you enter this home you will marvel at the 20 foot ceilings. The living and family great room leads to a spacious, open kitchen with an island and designer paint. Upgraded tile is found throughout the first floor. A gas fireplace creates a focal point for your gatherings in the family room. A full bath and bedroom is located on the first floor. The bath has outside access for those using the pool to enter without dripping through the house. Upstairs is the master suite with vaulted ceilings. A walk-in closet and separate shower are found in the master bath. Two secondary bedrooms and another full bath are also on the second floor. The backyard boasts a pebble-tec play pool with a removable screen fence. From the covered patio you can look out on the children’s to play area and mature rose garden. This home is a corporate relocation. Offered at $259,000, this property is neither a short sale nor bank owned. Located in the Sanborn Elementary district at 465 N. Superstition Blvd. in Chandler, AZ 85225.

Luckily for Home Buyers (and Sellers), mortgage rates have hovered around 5% for the past year and a half. But now rates are starting to inch upwards. If you have have been waiting, waiting, waiting to buy a property, now is the time, before rates move up further. But, the future is unpredictable in the mortgage world.

According to Michael McDermott, Mortgage Planner at Prime Lending, eighteen months ago, the Fed's set aside $1.25 Trillion dollars to purchase mortgage backed securities over a period of time (MBS Program). The program was designed to artificially lower interest rates to assist in a housing recovery. As the Fed's poured an average of $17 Billion dollars a week into mortgage backed securities, rates did exactly what we knew they would...lower. This is largely the reason rates have been right around 5.000% on a 30 year fixed mortgage for the past year and a half.

At the last Fed Meeting on March 16^th, the Fed's said they still intended to end the MBS Program but they also said, "The Committee will employ its policy tools as necessary to promote economic recovery and price stability." While this statement gave the Fed's a little more time to consider extending the program in some capacity, it is now clear that the MBS Program will in fact end on March 31^st. On March 25th Fed Chairman, Ben Bernanke, simply stated that the Fed's will end the MBS Program as scheduled and will actually become a seller of mortgage backed securities but did not state exactly when. As we have seen, as mortgage backed securities are purchased, rates fall. However, the opposite is also true; as mortgage backed securities are sold, rates will rise.

Last week , rates moved about .250% higher. In the big picture, this isn't much but it is certainly a sign that the Fed's are taking the "training wheels" off of the market when it comes to long term interest rates. So what does all of this mean for us? It means the "trend" for lower rates is changing and even though we may not like it, this week marks the beginning of a "new normal" for longer term interest rates.

With so many factors influencing interest rates right now, we are certain to see more volatility in the coming weeks. If you are thinking about buying a home, take advantage of the low rates available today. They rates you've been eyeing may not be there tomorrow.