Real Estate on the Irvine Ranch 

Real Estate on the Irvine Ranch in this quaint Orange County region is one of the greatest investments in the history of the world . . . yes, the history of the world.  The Irvine Ranch stretches from the soft sandy beaches of Laguna Beach, Newport Beach and Corona del Mar across the cities of Irvine, Costa Mesa, Tustin and Orange.  The Real estate on the Irvine Ranch ranges from 1 bedroom mobile homes, town-homes and cottages to custom homes with subterranean garages and home theatres.

If you bought a $300,000 home on the Irvine Ranch 10 years ago, chances are 90%, your home is worth $1M today.  A 2 bedroom condominium 10 years ago cost $130,000 and today is worth around $425,000.  Ten years is not a very long time.  If you bought your daughter a house when she was 8, 10 years later you would have almost $300,000 to pay for her schooling.  Had you bought 3 homes, you would have almost $1M in cash . . . in TEN YEARS!  Anywhere else but he Irvine Ranch, chances are better than 60%, the same house only increased half the value of the Real Estate on the Irvine Ranch.

Real Estate on the Irvine Ranch is not all about real estate.  Four miles off the Irvine Ranch coast, you can pet dolphins as they swim back and forth between the mainland and Catalina island.  On a winters day, you can ride your bike along the Balboa peninsula and spot the snow covered mountains less than 2 hours away.  Real Estate on the Irvine Ranch is about our planet.  it is about the weather patterns.  It is about the people that are drawn here from all over the world.  Real Estate on the Irvine Ranch was, is and will continue to be THE tremendous investment.  Not just monetarily, but the children who will rise from this great land that James Irvine invested in, shall pass it on.

The next time you are wondering about buying Real Estate on the Irvine Ranch, wonder about what would happen if you do not buy it.  When in doubt, buy it . . . better yet, buy two!

Happy Investing and see you on the Ranch!

Mike

Posted: January 31st, 2008 under Hot Tips, Real Estate News.
Comments: none

Foreclosure Real Estate 

Foreclosure Real Estate has become very popular in the past 6 months and in some cases, can be a good deal.  In my experience, I have found foreclosures, for the individual investor, to not be the best investment.  Let’s look at the facts:  In California, to purchase a foreclosure, you must pay the bid amount in full.  In other words, if the winning bid is $500,000, you must hand a cashiers check for $500,000 to take the deed to the house.  Now if the property you are bidding on has a value of $1M, you have made a good deal.  But you have used up your cash.  What if you could get the same property for the same price , but only use $50,000?  In Foreclosure Real Estate, this will not happen.  In today’s market where many borrowers owe more than the property is worth, many Foreclosure Real Estate properties go back to the bank where they are appraised and often sell for as much as 10% below the appraised value. 

Keep in mind, the appraised value of post Foreclosure bank owned Real Estate, is very conservative.  Also when you purchase bank owned real estate, you do not need to pay the full amount in cash. 

Also, in some instances, an area may have a large amount of Foreclosure Real Estate because a large group of investors bought in the same area.   In the case of Foreclosure Real Estate, I recommend you check the foreclosures you like and wait until they go back to the bank.  Set a goal of only paying specific price at foreclosure, if you get it, then buy it.  if not, wait to see if it goes back to the bank.  Always set a price that you feel is right and stay with it.  Foreclosure Real Estatecan be lucrative, but remember, it is better to leverage you money.  A prime example of this is a property at 5 Roseleaf in Irvine, California.  A group on investors purchased the property for $1,149,000 in July 2007.  The investor group sold it for $1,210,000 in November 2007.    After paying a commission of almost $30,000, fixing up the property and some closing costs, their net profit was approximately $20,000.  For 4 months they had their money tied up.  Had they had $1,149,000 in a CD making 5%, they would have made $20,000  in that same 4 month period.

The key is leverage.  On a bank owned property, you can possibly get a lower price and use the lenders money to purchase 5 or 6 properties with the same amount of funds you would otherwise use on a single property buy purchasing through Foreclosure Real Estate.

Happy investing.

Mike

Posted: January 29th, 2008 under Hot Tips, Real Estate News.
Comments: none

Do not wait to buy real estate, buy real estate and wait!

That age old axiom, Do not wait to buy real estate, buy real estate and wait, still rings true in a softening real estate market.  If we examine the history of the Southern california real estate market for the past 40 years, you will note an average (this bears repeating) an average gain of 10%.  This compares favorably to the average gain of the Stcok Market since the early 1900s.

On the surface, you may think, “Do not wait to buy real estate, buy real estate and wait? Why not buy stocks and see an equal gain?” Let’s take an example of buying stocks versus real estate:  In 1996 I purchased 1 share of Walmart stock for $30.  Today, that same share has grown to be worth almost $4,000, counting stock splits and divided re-invetsments.  In 1996, a brand new 4 bed, 3 bath, 3,000 square feet home in the Silverado neighborhood of Northwood Pointe sold for $350,000.  At the peak of the real estate market, that home reached a value of approximately $1.2M.  Today, the value is arguably, in the $1M to $1.1M range depedning on the location and upgrades.  Now, if the buyer put down 10% or $35,000 and leveraged the rest, $315,000, the monthly paymet is approximately $1,500 per month.  At the time, a house of this size rented for almost $2,500 per month.  So in effect, had you rented this property, you would have a positive cash flow of a few hundred dollars per month.  This same size house rents for $4,000 per month today.  imagine this, you pay the house off and get $4,000 per month or $48,000 per year.  To get the same kind of return in the stock market, you will have to put in much more of your own money.  The beauty of real estate is that it pays for itself.

Do not wait to buy real estate, buy real estate and wait, is worth repeating . . . Do not wait to buy real estate, buy real estate and wait.  Words to not only live by but more importantly, words t prosper by.  As long as you live within your means, you will flourish.  Perhaps you cannot afford a $500,000 house, so buy a $250,000 house.  The most important thing is to go ahead a buy and wait.  Wait through the down cycle by renting it out.  usually during sown cycles, the rents go up

Posted: January 29th, 2008 under Hot Tips, Real Estate News.
Comments: none

Real Estate Market Conditions - Northwood Pointe 

Real Estate Market Conditionsin Northwood Pointe are still very favorable.  While the general real estate market has softened, certain areas with good maintenance and schools, are still appreciating. 

Northwood Pointe in Irvine’s eastern corner, has a solid reputation for it’s award winning schools and generous community amenities.  The Real Estate Market Conditions in Northwood Pointe have been affected by several over zealous investors who bit off more than they could chew.  As a result, there are some good investment deals with Bank owned properties. 

The single family attached community of Carlyle by Brookfield Homes features a Plan 2 at 1,857 square feet for $659,000.  This plan has 3 bedrooms plus an office and 2.5 baths with a two car tandem garage.  The peak sales price for this model was $815,000 in June of 2006.  This property has had two offers for $600,000, but the bank is holding out for more.  The great feature of this current price, is that with rents for this plan being around $3,000 per month, with 20% down, you may be close to a positive cash flow.  This current Real Estate Market Conditions is excellent for a long term investor.

Another excellent opportunity for a Bank Owned property is in the guard gated community of Bainbridge.   A Plan One, with 2,640 square feet,  is available in the $900,000 range.  This  model has 5 bedrooms, 3 baths with two separate loft or office areas.  What is unique about this property is the former owner wishes to remain in the property and rent through the school year.  Real Estate Market Conditions here put the rent at around $4,000 per month.  The last two sales have been $968,000 and $990,000 for approximately 200 square feet more.

Another great investment opportunity of the current Real Estate Market Conditions, is in Arden Square.  This neighborhood features detached house up to 2,300 square feet.  The bank owned opportunity has 3 bedrooms, 2.5 bathrooms in almost 1,800 square feet and is listed for $725,000 with a rental market of approximately $3,000 per month.

The Real Estate Market Conditions are ripe for some great investments in a Northwood Pointe area which will always remain popular for generations to come.

 Happy Investing.

Mike

Posted: January 29th, 2008 under Hot Tips, Real Estate News.
Comments: none

Real Estate Foreclosures, Short Sales and Bank Owned Properties 

Real  Estate Foreclosures, Short Sales and Bank Owned Properties, are becoming more prevalent in today’s market.  However, more prevalent does not necessarily mean they are a good deal.  First, let me explain the process for you.

In Real  Estate Foreclosures, Short Sales and Bank Owned Properties, when a home owner has a mortgage, they make a monthly payment to the lender.  if they stop making their mortgage payment on time, the lender files a notice of default.  Sometimes the lender will renegotiate either the payment or the loan amount with the borrower.  Other times, the owner will try to sell the property instead of making payments and negotiate a reduction in the amount owed if that amount is larger than what the property is worth.  This is called a short sale.

In Real  Estate Foreclosures, Short Sales and Bank Owned Properties, if the owner fails to make a payment for 6 months, the lender will file a notice of foreclosure and the property will go to auction at the courthouse steps.  If the property does not sell at the auction, the bank will take the property and sell it themselves.  This is called an REO or Bank owned property.

In the arena of Real  Estate Foreclosures, Short Sales and Bank Owned Properties, Bank owned properties are a very enticing deal.  Here is why:  At a foreclosure sale, the buyer must pay the entire bid amount in cash.  As an example, if the property bid is $500,000, the buyer must give a cashiers check for $500,000.  Now if the property’s value is $1M, then this is a good deal.   But if the property’s value is $600,000, you are using a lot of cash for little equity.  If we use the same example for a Bank owned property, then the buyer can purchase the property for possibly 10% under the appraised value and put 10% down instead of paying cash.

Real  Estate Foreclosures, Short Sales and Bank Owned Properties offer some good deals but the key to real estate is leveraging your money.  The secret is to be able to get positive cash flow wit the least amount of cash.  This protects you against down markets.  Let’s say you purchase a bank owned property for $500,000 cash and your tenant is paying you $3,000 per month is rent.  If the market goes down in value by 20%, your home value is $400,000 and if you need cash, banks allow you only 80% loan to value.  You only have access to $320,000.  But if you purchase the property for $500,000 and put 20% down, you have $100,000 in the property and $400,000 is cash reserves AND if you need to, you can still borrow up to $320,000.  This means you have $720,000 available for other purchases.

If you have any questions on Real  Esate Foreclosures, Short Sales and Bank Owned Properties or my investments, call me at 949-533-5187 or send an e-mail to Mike@MichaelDunn.com or Mike@ThePelicanEstates.com.

Happy Investing,

Mike

Posted: January 25th, 2008 under Hot Tips, Real Estate News.
Comments: none

Real Estate Investments and Politics 

Real Estate Investment and Politics have an incredible synergy.  As a Real Estate Investment strategist, I have 3 rental properties in Texas.  Texas was affected by Hurricane Rita and Katrina.  One of the greatest positives to come out of such a tragic occurrence was President Bush’s legislation to infuse and increase investment in the affected regions.  As a result, the GO Zone Opportunity was created. 

In a nut shell, the go Zone allows for investors to purchase properties in specific counties declared under federal guidelines as economic Real Estate Investment areas.  Here is what I did:  I purchase a home in a suburb of Houston for $143,000 and it brings in $1,350 per month.  This by itself is fantastic!  However, as part of the GO Zone, an investor is allowed to depreciate 50% of the value of the property, the year he or she bought it. 

Now if we take $143,000 and deduct the value of the land, $30,000, this leaves $113,000 times 50% = $56,500.   This $56,500 can be deducted from my taxes.  Do you see that not only is the cash flow Real Estate Investment fantastic, but the tax deduction that goes with is amazing.

I know what you are thinking.  Area affected by a hurricane?  This property was not damaged by the hurricane.  In fact, it was not even built when the hurricane hit.  This Real Estate Investment, is a brand new home in a guard gated community with pools, parks, recreation centers and all the state of the art amenities that the swankest areas of California have.

This brings me to the Political aspect of Real Estate Investment.  Guess which state President Bush is from?  Yes, Texas.  Do you think President Bush will want to help his home state?  Does he have Real Estate Investment friends in Texas?  Is he building his own home in Texas?  Yes, yes, and yes!  Whomever becomes the next President, will likely help support legislation to help his or her home state. 

Just a little something to make you say “Hmmmmm”.

Happy Investing.

Mike

Posted: January 24th, 2008 under Hot Tips, Real Estate News.
Comments: none

Real Estate Market Update - Northwood Pointe, Irvine 

Real Estate Market Update for Northwood Pointe Irvine which is located near the Cleveland National Forest on the eastern end of the Irvine Ranch.

This area, built from 1996 to 2001, boasts approximately 2,000 properties and is home to two nationally recognized elementary and high schools.  Canyon View Elementary and Northwood High Schools are National Blue Ribbon Award winners.  Northwood Pointe has seen an amazing appreciation since its completion and the Real Estate Market there has been and will continue to hold its value. 

You may go to www.NorthwoodPointeIrvine.com to view all the floor plans and the area topography.  Prices range from $400,000 1 bedroom condos to $2M plus 5,500 square feet homes.  The unique parts of this neighborhood are as follows:

1. Most are gated communities, 2. All within 1 mile of both the elementary and high schools, 3. A central park sits in the middle of the community, 4. An extremely involved community with PTA and private donations, 5. Easy access to freeways, 6. The beach is less than 15 minutes away.

Recent Real Estate Market Updates include some excellent opportunities for REO or Bank Owned properties.  Northwood Pointe is a very popular destination for families with children and this has kept the rental market very strong.   I recommend this area as a strong buy and hold, due to lack of new construction in the next 2 years.  I believe the Real Estate Market in this area will hold more value than other areas.

Stay tuned for my detailed Real Estate Market analysis on some REO properties in www.NorthwoodPointeIrvine.com.

Happy investing.

Mike

Posted: January 23rd, 2008 under Hot Tips, Real Estate News.
Comments: none

Real Estate Interest Rate Market

Real Estate Interest Rate Market saw a huge drop today when the Fed reduced the interest rate by .75%. 

The first thing I did after hearing this, was check all my investment property rates to see if it makes sense to take advantage of the Real Estate Interest Rate Market and re-finance my properties.  On my Austin, Texas duplex, it made I will save around $300 per month in payment and increase my cash flow from $750 per month to $1,050. 

This may not seem like a large amount, but what if you owned 10 properties like this?  Yes, you are now earning another $3,000 per month or sending an extra $3,000 toward paying off your loan balance.  The Real Estate Interest Market is an amazing tool, if used wisely and without greed. 

What impact does this have on the overall Real Estate Interest Rate Market and the general Real Estate Market?  For the shot term, it will save some homes from going to foreclosure and back to he bank.  Will it stimulate the economy by making people consume more?  Hard to say, but based on my experience, it seems that the general public is becoming more conservative and “staying in their cave”.  What are the smart investors doing?  They are looking for deals because there is a double positive impact for investors.  1.  The price to borrow money is becoming cheaper.  2. And this is the most important, the perception of volatility is driving some sellers and lenders (bank owned properties), to drop their prices.  So, with lower interest rates and lowering prices, an investor can now expect more positive cash flow. 

In Orange County California, we are almost at the point where one can put down 20% and get positive cash flow.  3 years ago, one would have to put down almost 40% to get positive cash flow.  Leveraging your money is the key and when you can put less than 20% down and get positive cash flow, you are leveraging your money.  Stay tuned for some specific example that I have done.

Happy investing!

Mike

Posted: January 23rd, 2008 under Hot Tips, Real Estate News.
Comments: none

Real Estate Market Update - Welcome to Mike Dunn’s Blog

Real Estate Market Update is a way for you to keep informed with trends in the Real Estate Market.

Welcome to Mike Dunn’s Blog.  I hope you will enjoy and learn from my insight into a time tested, wealth building investment.  I am starting this blog for two main reasons:

1. To keep my mind sharp and record Real Estate Market trends

2. To educate and help you to not only see the benefits of Real Estate Investing, but to DO and ACT, when it comes to Real Estate Market Investing.

Real Estate has been an amazing investment and yielded many happy returns to those of us who have the courage to jump in.  I purchased my first property in 2002 for $150,000 and sold it 2 years later for $308,000.  That is like having a job paying $75,000 per year on top of your current job. 

Currently, I have 7 properties, 6 of which are investment properties which yield a positive cash flow.  Positive Real Estate cash flow means that after my expenses (mortgage, taxes, insurance and expenses) I make money every month.  My goal is to keep them at least for 10 years and then re-evaluate. 

I look at Real Estate as a long term hold and only sell when I see an opportunity to move up.  In the next year, I will share with you all my experiences selling, flipping, buying, renting and renovating Real Estate.  My hope is that you will see my success and decide to use my knowledge and experience to build a stable financial future for yourself through Real Estate Investing.

Feel free to send me an e-mail Mike@MichaelDunn.com or call me at 949-262-3612.   See you around the ‘hood!

Mike

Posted: January 22nd, 2008 under Hot Tips, Real Estate News.
Comments: none

Real Estate Market Update 

Real Estate Market Update in Orange County is holding steady while others are floundering. Specific areas such as Newport Coast, Newport Beach, Corona del Mar, Crystal Cove are still seeing record appreciation in part due to the exclusivity and lack of build able land. The last new home development, Costa Azul in Newport coast, is releasing their models on January 26th. They will range in pricing from $3.5M to just under $5M.

The custom homes Real Estate Market in areas of Newport Coast, which include the real estate mecca of Pelican Hill, Pelican Crest and Pelican Point, are still seeing records sales. Note the following sales in the last 3 months:

21 Island Vista 11/30/2007, 5, 5.50, 7,420 sq feet, 15,000 lot, sold for $6,999,000
1 Avalon Vista 12/31/2007, 6, 9.00, 9,500 sq feet, 38,000 lot, sold for $10,000,000
6 Fair Harbor 10/5/2008, 5, 6.50, 8,200 sq feet, 19,337 lot, sold for $9,387,500
9 Rim Ridge 9/1/2007, 5, 9.00, 7,830 sq feet ,22,000 lot, sold for $11,000,000

Go to www.ThePelicanEstates.com and ask for the spreadsheet.

The views from Newport Coast are spectacular and from the top of the hill, one can see all the Inland Orange County region and on a clear day all the way to the Palos Verdes Peninsula. Real estate in the Orange County/Newport Coast/Irvine region, is and always will be, extremely valuable. The Irvine Company, which owns the land, supports the area through its school foundation program and its land grants to the local cities and state. If you are seriously looking for a long term investment which will always appreciate faster than any other part of the country, call Mike Dunn at 949-533-2581. If you cannot afford the pricing values in the Orange County real Estate market, then call Mike Dunn about investing in other states that have magnificent cash flow. www.MichaelDunn.com and www.ThePelicanEstates.com

Posted: January 21st, 2008 under Hot Tips, Real Estate News.
Comments: 1