Real Estate and Father/Son Ice Cream!

Today I was sitting at a table waiting for an appointment and noticed a father and son getting ice cream.  It reminded me of my dad and I when we meet for breakfast once a week.  I listened to my dad tell his stories and his jokes.

Today was one of those moments I just was observing the activity around me.  I watched 4 kids race against each-other over and over again.  I noticed a lady with a Dachsund sitting at a table cuddling her pet.  People were passing by getting their breakfast and coffees.

While this was going on, some body somewhere was buying real estate.  Yes, this is what entered my mind.  As I was wondering this, I also wondered what kind of deal this real estate investor was getting.  Did he do his research?  Did he, or she, have a true read on the rental market or a true accounting of the comparable sales?  Was the property in a good area?

Later in the day, I had an open house at 14 Arborwood in the Somerton neighborhood of Northwood Pointe.  You know, every time I drive to Northwood Pointe, I really enjoy it.  The scenic drive up Culver with a view of the rolling hills which offer protection to the area from winds and rain.   The day was hot and I was amazed at how many people came through; 16 separate groups.

I met several neighbors and potential buyers and all loved the upkeep of the house.  After gathering contact information from several potential buyers, I closed up the house and went to the gym.

This may seem like a rather boring day, but it is the repetition of the basic fundamental skills which will help to sell this house and which will also help to lead other potential investors to making a fortune in real estate.

This blog was more of a diary of my day today and less of a blog on real estate, however, send me an e-mail to Mike@MichaelDunn.com or call me at 949-533-2581.

Happy investing.

Mike

Posted: June 29th, 2008 under Hot Tips, Real Estate News.
Comments: 3

Real Estate Home-buyer Analysis!

Hopefully, you are keeping up with my blog and you have read the previous entry about the real estate market forecast.  I think that forecast is one of the most comprehensive I have ever seen and I say this with all humility.

Now let’s analyze it in layman’s terms.  When you first look at the analysis, you may think I am suggesting you wait until 2009 to buy.  Keep in mind there are two forms of buyers:

1. The person who is buying to live in the home for a long period (over 7 years) and is buying the home to raise their family.

2. The person looking for a rental property who wants as much cash flow as possible

The criteria for buyer number one are similar to buyer two, except for the fact that if a house comes on the market that fits their needs, they should buy it.  For example, buyer one has a family of 5 with 3 children under age 7, and needs a house on a cul-de-sac within walking distance of schools.  There are a finite and very limited amount of properties that sit at or near the end of a cul-de-sac.  So as long as the price is within your affordability and the property suits your needs, buy it.

If you are an investor planning to lease a property and you think you can save 10% on the price by waiting, your should wait.  The whole key to investing is making sure you cover your mortgage and have extra cash flow to either pay down your mortgage or have extra every month to buy another property.

I bought my current house at the peak of the market but there were only 6 homes that had the location (backing to a hiking trail with a view).  The property was within my affordability and it had the location I wanted and I am a long-term resident.

Remember, the old axiom of location, location, location.  The extra 10% you pay to purchase the right location will offset the risk you take by waiting for a 10% drop and you possibly not finding another home with as good a location.  You must think of re-sale before you buy!  Let me repeat this . . . you must think about re-sale BEFORE you buy!

I know it sounds strange, but it could translate to many hundreds of thousand of dollars in the years to come.

For more information on some tremendous deals, send me an e-mail Mike@MichaelDunn.com or call me 949-533-2581.

Happy investing.

Mike

Posted: June 29th, 2008 under Hot Tips, Real Estate News.
Comments: 1

 Real Estate Market Prediction and Forecast!

I have a friend who does the analysis for the home building industry before the builder decides to purchase land.  He is the most thorough analyzer I have ever seen.  I have been doing my own analysis on a daily basis based on the following:

1.  The number of Notices of Default I received from my title company. A Notice of default is when a borrower misses a mortgage payment and the lender begins the foreclosure process.

2. The number of Notices of Trustee Sales I receive from my title company.  This is when the property in question is given a date for the foreclosure sale.

3. The number of REO or Bank Owned properties that come on the market.  This is when a property fails to sell at foreclosure and the bank takes it back and sells it.

When the market was rising, the number of the aforementioned three criteria was very low.  Since the credit crunch of June last year, I have noticed several waves of NODs and NOTs.  The end of 2007 saw a substantial rise in these.  I judge the amount by the size of the files I receive. 

During the peak market, the files were always less than 1 MB.  For Los Angeles and Riverside Counties the number was always under 1MB.  The past 4 months have seen several files as large as 8MB.  In Orange County, my areas of selling, the files were always under 200KB.  The past 5 months, the files have been around 500 KB.  Now, NODs, NOTs and REOs add to the already large amount of inventory.  As such, it takes approximately 138 days for a NOD to become an NOT.  If the property does not sell at the Foreclosure sale, it goes back to the bank.  This process may take an additional 60 or 90 days before it goes on the market.  So there is an approximate 6 month “clearing” period where either the NODs are cured or the properties sell at REO. 

Now, if we get another wave of these properties, it will be another 6 months before the inventory clears.  This brings me to my prediction:

On a national level, I see the bottom of the real estate market coming in the winter of 2009.  I am basing this on the aforementioned.  Remember,  the last ARM mortgages are coming due soon and there will be a rush of NODs, NOTs and REOs from this as well.  Also, the Foreclosure and REO market is booming and it will take time for that market and it’s inventory to clear. 

On the regional level, in Southern California, we may see a leveling off sooner.  Again, it depends on how quickly the REO inventory subsides.  With two micro real etate  markets (REOs and the normal market) competing against each-other, it delays the rise of the overall market.

If you want a detailed chart of this and the past cycles that real estate has gone though, send me an e-mail Mike@MichaelDunn.com or call me at 949-533-2581.

Happy investing.

Mike

Posted: June 27th, 2008 under Hot Tips, Real Estate News.
Comments: none

Ethanol, Foreclosures and Real Estate!

Ethanol has been getting a lot of press lately and I decided to do some research on it.  Here is a chart of the results from a recent test:

Based on these results, Ethanol does increase gas mileage and total distance travelled over regular unleaded gasoline.  If you look at the results, you will notice a difference but not a great difference.  This brings up a point regarding real estate.

When you are looking for real estate and especially foreclosures, do niot be so set on saving every single penny on a deal that you miss out on an opportunity.  Sometimes, it is best to get the house then take a chance on losing it.

The current market is like ethanol already.  Prices are down and more affordable, so things will take care of themselves.  There will be plenty of opportunities to come in the next 6 to 12 months.  While ethanol is looked upon as an end all savior in the transportation industry,  foreclosures in the real estate industry are NOT necessarily the end all of bargains.  You see in today’s market, most foreclosures are not great bargains because the amount owed exceeds the market value in many cases.

The best deals are the homes that go thru the foreclosure process and become bank owned properties.  Bank owned or REO properties are great because banks do not want to own the properties and as a result price them to sell quickly and often 10% UNDER THE APPRAISED VALUE!

For more details send me an e-mail to Mike@MichaelDunn.com or call me at 949-533-2581.

Happy investing.

Mike

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

George Carlin and Real Estate!

I learned George Carlin’s passing this morning and was very saddened.  Although George was very controversial at times and seemed cynical, but was actually “disappointingly optimistic”, he made me laugh.

I remember listening to him when I was in high school and just laughing so loud.  It amazed me that someone could know so many vocabulary words and still make such great jokes.  He really had a flair for making the most simple issues into an international incident.  I have read two of his books and they are also quite funny and educational.

He served his country, in the Air Force and so I believe he earned the right to complain and rail as he saw fit.  I am smiling just writing this because I remember some of his jokes.  I remember one college tour he did at USC and he just let go . . . LOL!  What a wonderful comedian; I will miss him.

This brings me to real estate.  Guess what makes me laugh in real estate?  Not just the positive cash flow or the appreciation, but the wonderful knowledge I gather and the people I meet.  George Carlin had a unique ability to make us laugh and my goal is to make you laugh when you either sell your home or see the amazing return on your rental investment.

I have experienced the “rush” of seeing a property appreciate and gain the benefits.  I have also seen the sometimes challenges of tenants, but through it all, the decision to take the plunge and invest in real estate has been just as exhilarating as attending a George Carlin concert.

Remember this, George Carlin made a decision about 50 years ago to go on stage and make people laugh.  That decision brought laughter to millions of people live and even more millions through books and television.  I made a decision 10 years ago to become a student of real estate and so far it has been an amazing ride with benefits that I would not have seen had I not taken the plunge.

I encourage you to take that leap of faith and take action and make the commitment.  You will be rewarded beyond what you expect.

Send me an e-mail Mike@MichaelDunn.com or just call me 949-533-2581.

Happy investing.

Mike

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

Real Estate, Real Estate and Real Estate!

Let us hope that you are typing in the keyword: Real Estate!  Sometimes when I blog, I try to get get the most exposure on Google as possible.  However, today I am just telling you the way it is . . . and the way it should be.

Yes, real estate is the way to go, only and only if you want to build wealth.

I invite you to send me an e-mail and prove me wrong.

Here are a few examples:

1. Bought a one bedroom condo for $150,000 in 2002 and sold it in 2004 for $308,000.

2. The percent increase in a rising market is based on the value of the property NOT the amount of money you put down.  This is the key

3.  If the market goes down, you can always rent it and cover your mortgage.

This probably sounds like a broken record, but it is the truth and the truth must always take priority.  So go to www.MichaelDunn.comand do some surfing and you will find a deal that will be perfect for you.

Happy investing.

Mike

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

Tiger Woods and Real Estate!

If you are a sports fan, or even just a human interest fan, the way Tiger Woods battled and won the USGA Open tournament in San Diego at Torrey Pines.

Did you watch the tournament or at least part of it?  Did you see the long putt Tiger made and how he celebrated?

The way he celebrated showes us how much passion he has for the game but he also realized there is an element of humbleness and gratitude that goes along with the game.

In real estate, you must have the passion and also remain humble.  On the selling side, I realize I cannot sell a house all by myself.  I need other agents top help me.  Knowing this keeps me humble and treating my fellow agents with respect.

On the investing side, you need the same passion and humbleness.  Do your research and stick to your bottom line and be disciplined.  Tiger Woods has tremendous discipline and practices as much as possible to make sure he stays on top of his game.  As a real estate investor, you need to stay on top of your game.  Here are some mandatory habits you need to maintain to stay at the top of you game:

1. Keep up to date with the comparable sales of your target market.

2. Keep a close watch to the stock market.

3. Keep up with the latest lender programs.

4. Keep up with your exercise regimen.

Out of the four items above, which one do you think is the most important?  If you guessed number 4, you are correct and you have just won a special prize from Special Agent Dunn.  Send an e-mail to Mike@MichaelDunn.com for redemption.

Tiger Woods is a great example of what dedication and doing the extra work, can do for you and your success.  The great thing about real estate is that anyone can do it.  There are no special talents, or super human strength needed to succeed.  Only a genuine desire to be a student of the “game”.  Yes, real estate is a “game” like Monopoly.  But you have to learn the rules and then take the action of playing the game in order to reap the rewards.

So start playing by calling me at 949-533-2581.

Happy investing.

Mike

Posted: June 19th, 2008 under Hot Tips, Real Estate News.
Comments: 2

Defense wins championships and  . . . real estate fortunes!

As a sports fan, I watched the NBA championship series this year and noticed how the Boston Celtics used their defensive prowess to win the Championship.

The great thing about real estate is that it has both great offensive and defensive ability.  When the market goes up, your equity surges.  How do you protect that appreciation when the market takes a down turn?

One way, is to have a tenant pay your mortgage for you.  In most cases (if you buy within your means), the rental payment will cover your mortgage payment.  This is a great benefit because you can leverage the tenants rent to increase your equity and pay down your mortgage. 

Yours truly has been doing this the past year and have increased the cash flow of the rental properties. 

Historically speaking, it has taken around 5 to 7 years to go past the previous peak of the height of the market.  5 years goes by very quickly and while many people panic and sell their properties, consider having a tenant pay your way through the down times, so that you can reap the rewards when the market bounces back.

I spoke with a custom home and multi-family home builder and we spoke about the early 1990s recession.  When I asked him about that specific market, he said he wished he had rented the properties out during the down turn because when the market came back, it came back over 500%.

If you own properties, keep them.  If you do not own a property, now is the time to make your fortune or at least increase your fortune.

For more information, send a e-mail to Mike@MichaelDunn.com

Happy investing.

Mike

Posted: June 17th, 2008 under Hot Tips, Real Estate News.
Comments: none

Foreclosures, Bank Owned Properties and Regular Real Estate!

In today’s economy and real estate market, buyers have several excellent opportunities to purchase real estate.  I will take a moment to describe them and then analyze which ones I recommend.

When a borrower defaults on their loan, the lender issues a notice of default and after approximately 138 days (California law), if the borrower does not cure the default amount, the property goes to a Notice of Trustee sale.

The Notice of Trustee sale is when the date for the foreclosure sale at the courthouse is announced.  The date is set unless the borrower cures all or part of the default amount or the property is in escrow and therefore be delayed.

If no one buyers the property at the foreclosure sale, the lender takes the property and attempts to sell it.  This is known as a Bank Owned property or REO.

This, in a nutshell, is a layman’s description of the process. 

The Bank Owned listing is the best because the bank is highly motivated to sell and usually prices the property at or slightly below the appraised value.  The trade off is, you must buy the property in “as is” condition.  This means you will be responsible for any repairs.

If you are interested in getting a list of bank owned properties, send me an e-mail to Mike@MichaelDunn.com or go to www.MichaelDunn.com

Happy investing.

Mike

Posted: June 17th, 2008 under Hot Tips, Real Estate News.
Comments: 3

First time home-buyers and Real Estate!

The current real estate market has become a prime time for first time home-buyers to take advantage.  Why?  Well for starters, the general real estate market is down 20% from the peak. 

Secondly, the condominium market is down 30% in some areas and this market is what is most affordable for first time home-buyers.

This market is what I dove into in 2002 when I bought my first home.  It was a large one bedroom condo for $150,000.  In 2 years it appreciated to $308,000 and I took the proceeds and bought a $700,000 house and that house has now gone up to $950,000.  But here is the kicker, one year ago, my house peaked at $1,050,000.  So if you are a first time home-buyer, you are guaranteed to make at least 15% when the market comes back.

You see if you hold onto real estate long enough, historically speaking, the market will always exceed the last peak.  Now you may have to wait a while for it to come back, but while you wait you need a roof over your head and you will be able to have some significant tax deductions.

One other big reason to buy now is  . . . me!  Yes, and can you guess why a real estate agent like me would be a great reason for you to buy?

Let me list a few reasons . . . and keep in mind, the best reason is coming at the end:

1. I have over ten years of PRODUCTIVE experience.   This is an important distinction.

2. I have a burning desire to excel and gain the best deals for me and my clients.  I first look for the best deal for me and this forces me to put myself ion my clients shoes.

3. I have chosen real estate as my career and as such have committed myself to stay thru thick and thin.  Thru a down market as easily as an up market.

4. I am a student of my career.  As a student, I am constantly searching for new and innovative ways to gain an edge both in selling real estate and investing in it.

5.  This is the one, so read carefully . . . as a student I have now applied and been accepted to sell REO (Bank Owned) properties for several lenders.  This edge gives me first look at some tremendously great deals.

If you are serious about starting to build wealth for you and your family and need sound advice, call me at 949-533-2581 or send an e-mail to Mike@MichaelDunn.com.

Happy investing.

Mike

Posted: June 15th, 2008 under Hot Tips, Real Estate News.
Comments: none