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Lori Lincoln- Taunton to Attleboro MA Rehoboth, Dighton, Swansea, Attleboro

Taking Money from the Stock Market and Transfer to Real Estate.

Wow! I couldn't' believe my eyes...

As I scoured through the MLS yesterday, I noticed approximately 25 multi-family properties priced between $39,000 and $120,000 in New Bedford. There were 12 multi-family properties in Fall River that were priced below $120k. I know that the properties in this price range need repair and the properties are not for the faint of heart.. Some of the homes need $25,000 in repairs, some are tear downs, some require $100,000 in repair.

Nevertheless, bargains are out there. Everything is on sale!

The investors are having a field day! The deals out there even after fix up are sure to generate positive cash flow.

As I see the plethora of properties on the market, I think of those that have funds in the bank, good equity in their homes, or money in the stock market that could be used for good real estate investments.

The real estate deals in the Massachusetts market can be potentially better for your retirement than the stock market.

Every property is different. Some require extensive work, some do not.

Let's take a look at one example:

You could invest $100,000 in a Bank Owned 4 family. Most bank owned properties need rehab. You would first btain necessary permits, hire contractors, or do it yourself, making the home livable for an additional $70,000. So now you're in the property for $170,000. ( This is just an example, other variables could factor in) You can mortgage this property after all the work is done. OR, you could obtain financing for a rehab loan. I do caution you that most bank owned properties in the low price range require cash to purchase.

Next, you would rent out the units. The average rent in Taunton for example, on a 2 bedroom unit would be approximately $800 per unit.

So Now you would have $3200 per month x 12 months = $38,600..

Assuming your tenant pay their own utilities

So now we subtract homeowners insurance of $3000 per year

Taxes of $4000 per year

Maintenence and Miscellaneus expenses of $5000. per year

Net Profit: $26,000 per year

Now.. if you decided to mortgage the property, this would bring your cash flow lower depending on your interest rate. You would also have extra cash on hand to do this again!

You cannot do 100% loan to value, but you can do 65-80% ( check with your mortgage broker)

Lets take a look at this:

Mortgage amount $145,000 (65-70% loan to value)

x 8% interest ( non-owner occupied rates are higher)= approx. $1200 per month.

1200 x 12 months=$14,400

Profit before mortgage: $26,000

- 14,400

= $ 11,600 cash flow..

If you decide to hire a property manager, of cours the cash flow would be lower. Property managers charge $300-500 per building per month.

If you don't have the full amount needed to invest, there are other options:

1. Partner with somebody

2. Look into rehab loans, private money etc.. your mortgage broker could tell you more.

You could also pay a higher price for a property that doesn't require as much work and acquire a mortgage.. the prices are higher, but a great alternative for someone who doesn't want to a rehab property

I didn't mention tax benefits.. stay tuned. this is another blog.

If you need further clarification regarding how to buy multi-family properties, or other investment properties, please call Lori Lincoln, Keller Williams Realty at 508-878-0917

Lori Lincoln is a Realtor with Keller Williams Realty focusing on Investment property sales for new and experienced real estate investors and others in Massachusetts selling homes in Assonet, Berkley, Taunton and South of Boston

email: lorilincoln@kw.com


The above example is for illustration purposes only.

The Media, The Bailout, Your Mindset.. My Rant

This one is more of a rant than a blog, an unorganized composition of how the media influences our thoughts and what we can do about it.

The saying goes "Garbage In, Garbage Out". With the news media ranting and raving about the bail out failure, it is perfectly natural to get caught up in the fear. It can be almost paralyzing to some..

The talk around water coolers just adds to stinkin' thinkin'

Lets put it in perspective:

First, it is a fact the financial debacle that our banks will cause a trickle down effect. This is a fact.

Now, I am not a Pollyanna, but lets look at the bigger picture:

Nobody has a guarantee that there will EVEN be a tomorrow..this is also a fact. We aren't guaranteed our next breath for crying out loud!

The media profits millions of dollars from large advertising campaigns. They want you to believe that you cannot live without them. I remember when I sold television advertising; Princess Dianna passed away and all the account executives were encourage to call every client and sell out all the avails on the news channels

( because of the projected ratings)

It is a subconcious ratings game.. on us!..and a money game for the media. They dramatize most stories making it worse than what it really is..again, not downplaying the seriousness of our country's situation.

but come on.. hours and hours last weekend to wait for both political parties to speak.. with no other news to report?? pulleeaasse!

We know the reality of all that is happening in our country. We need to accept it and move forward with our lives, enjoy our lives to fullest, making each moment count. We have no control over the events of the world.. we can't do anything about most of them. Finances are a challenge for most people. Everyone is in the same "boat".

Why not make the best of today, hug your kids, family, spouse. Go for a nice walk, enjoy the fall foliage, chat with someone interesting. Make the best of your todays.. the future, yes, is important, but not as much as what you give, who you help.

Someone once said "It's not what really is going on.. it's how ya take it".

Yes we all have to face the reality of the economy, real estate market, stock market etc. but gee.. is that all there is??

You will almost never hear positive news on any of the major news channels. Ratings are virtually non-existent. Every one likes to hear bad news. Yes, this is a true fact. Just ask the Nielson company for a copy of their ratings for the news channels over the last month. I guarantee that they will be much higher over the last couple of weeks.

Didn't you ever notice that when a problem is solved, you don't see near the coverage as when it was "really bad?".

Stay in a positive mindset. Read A Great Uplifting Book.. A Chapter a day.

A Few of my favorites are

The Bible

The Seven Habits of Highly Effective People- Stephen Covey

Today Matters- John Maxwell

Think For A Change- John Maxwell

You Can't Afford The Luxury Of A Negative Thought - John Roger And Peter Mcwilliams

Stop your negative thoughts in their tracks. What you focus on increases.. good or bad

Walk.. I mean.. RUN away from negative people

Be Grateful Every Day for what you have.. focus on what you have vs. what you have not.

Stay grounded so you can help others that aren't

Lori Lincoln is a Realtor with Keller Williams Realty and sells homes in Southcoast Massachusetts in Rehoboth, Seekonk, Taunton, Swansea, Fall River, Somerset, Raynham, Easton, Dighton, Assonet, Freetown, and other areas of Massachusetts.

Lori helps first time home buyers, pre-foreclosure sellers, motivated sellers, and investors with their real estate goals.

You can find bank-owned, foreclosure listings at http://www.LoriLincolnTeam.com

Lori Lincoln

Keller Williams Realty

508-878-0917

email lorilincoln@kw.com




Real Estate Investors- This is Your "Candy Store" Market!

I recently joined the Boston Real Estate Investors Association and recently attended their last investors meeting in Waltham.

All I can say is "WOW!" All of the negativity about the market just disappeared!

There were over 100 Real Estate Investors, experienced and newbies alike. They were all "pumped"!

They know that this is their market.

If you are an experienced investor or a new investor, this is truly your market. Many bank owned properties can be bought at bargain basement prices.

Historically, Real Estate always increases in value over the long term. However, there are investors buying wholesale, fixing and rehabbing, then re-selling at retail. These investors reap in thousands of dollars.

The entry level education for venturing into rehab properties is minimal, but you do have to be smart about the property, its location, condition, style and the work required.

Examples:

Foreclosed Homes in Taunton start at $68,000. Foreclosed homes in Rehoboth $215,000

Multi-Family Homes in Taunton start at $120,000.

The way to buy bank owned is to hire a buyer agent to help you interpret the upsides and downsides of the particular property you are interested in. Costly mistakes can be made if you don't look before you leap. You must know exactly what each property needs. You should have a Realtor, an attorney, a financial source, a home inspector, and a contractor on your team.

Most of the bank-owned properties require substantial work.

Also Banks like to see cash deals because closing takes less time. You could partner with other investors if you are short on cash.

Investing in Real Estate is not an easy business. Everything worth pursuing in life is hard work. In my opinion, the long term rewards outweight the work.

What an opportunity!

Lori Lincoln helps real estate investors and others with their real estate goals.

Lori is with Keller Williams Realty

For more information call her at 508-878-0917 or email lorilincoln@kw.com

website: LincolnTeamRealEstate.com

The Great Bailout

Maybe its just me, maybe not..

After visiting several websites and television news stations, I am struggling to figure out the basics of this bailout. What I know so far is that the government will not be aimlessly giving 700 billion dollars to bail out troubled financial institutions and buy out their assets.

The plan as I see it so far..

The government will not allow US citizens to be taxed as a direct result of the bail out

The financial institutions will be accountable

The government will aide in financial and mortgage backed securities insurance.

They will buy out troubled assets from banks.. I wonder if this means cars too?. mm..

I am sure we will all have our questions answered soon.

Here are a few questions I have:

Will pre-foreclosure loans be affected by the bail-out. I read briefly about loans made prior to March 2008.

Will banks hold onto to their foreclosed homes, waiting for government intervention?

What about homes listed as short sales? Where do the homeowners stand now?

Many consumers think the real estate selling prices will increase. This may or may not be the case. I believe we have a long way to go? Banks are still more and more conservative in loaning money.

I do realize that my questions are preliminary but maybe someone out there can interpret better.. any ideas?

Lori Lincoln

508-878-0917

my website: http://LoriLincolnTeam.com

email: lorilincoln@kw.com

Keller Williams Realty

Misconceptions on Federal Funds Rate/Fannie and Freddie..Courtesy of Bill Gassett- Remax MetroWest Real Estate

One of the biggest misconceptions in the mortgage and Real Estate industries is the fact that the when the Federal Funds Rate is dropped that it also means there will be a corresponding rate drop in 30 year fixed rate mortgages. People wake up - It does NOT! In fact many times the exact opposite occurs.

I can't even tell you the number of times I have been hearing lately people making the comment "Hey the Fed is thinking of dropping the rates again...Mortgage rates should be heading down". What can be even more shocking is when Realtors don't realize how things work either! A good Real Estate agent should have at least a basic understanding of how the mortgage market works - Many do not!

The underlying belief is that lower 30 year fixed rates stimulate sales. This of course is true but there is a disconnect between this happening when the government cuts the Federal Funds Rate.

Since January the Federal Funds Rate has been cut a number of times. In January, 30 year fixed rate mortgages stood at around 5.5%. In March they been moving around between 6.25% and 6.5%. So since January when the Federal Funds Rate was cut longer term interest rates have moved up between 3/4% to 1%. This is the perfect illustration of why there is no connection.

The Federal Funds Rate helps determine what banks charge each other for over night loans. Long term rates (30 year fixed) are mostly tied to the ten year treasury yield which is determined by bond traders. Inflation drives long term mortgage rates. When bond traders demand higher long term rates it drives up long term mortgage rates too.

There is a much bigger correlation between The Federal Funds Rate and short term mortgage vehicles know as adjustable rate mortgages (ARMS).

These rates tend to move closer in step to the Federal Funds Rate. The adjustable rate mortgage market is influenced by a number of measures including the one year treasury yield and the International Libor.

So the next time you hear "The Fed is dropping rates" Do not assume that 30 year fixed rates will also drop!

___________________________________________________________________________________________________________

Bill, I didn't realize this was the case. All of the hype is that rates will drop. Thank you for letting me repost your blog.

Lori Lincoln

508-878-0917

lorilincoln@kw.com

Keller Williams Realty

You can search the mls for luxury homes in Rehoboth Ma on my website at http://LoriLincolnTeam.com

Lori Lincoln and her team sell Real Estate in Taunton Ma, Somerset Ma, Swansea, Seekonk, Rehoboth and surrounding areas.

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