7 Tips for real estate investing

7 Real Estate Investment Tips Beginners Should Know

We believe beginner real estate investors need all the help they can get.  We came across these tips courtesy of ImmoAfrica.net, a South African company.  They apply in the USA, too.

No matter how savvy you are when it comes to investing, the real estate business is like no other. Since your real estate investments likely measure in the hundreds of thousands, it is wise to educate yourself about investing in real estate before you transfer that next amount.

 In fact, there are at least 8 tips beginners should know before making their first investment in real estate. And, if you play your cards right, there might be a huge profit margin waiting for you.

 Let’s have a closer look at the real estate investment tips for beginners:

 #1 – Taking care of our own debt

Before you are ready to look into investment opportunities, your finances need a clean bill of health.

Namely, you should make sure there are no debts that are weighing down your purchasing power.

Everything from student loans (of which there is a crisis in the United States) to unpaid medical bills should be taken care of before your first investment.

After all, it wouldn’t be wise to purchase a property if you have a mortgage on your own home, for example.

#2 – Do the repairs on your own

If you are buying a piece of property for you and your family to live in, then it’s perfectly natural that you’re the one who’ll spruce it up.

However, when it comes to property investment, beginners get carried away and hire other people to refurbish the houses and apartments they have invested in.

Although this move seems logical, it is actually quite expensive in the long run. For this reason, try to find properties that don’t require a lot of subsequent investing and make sure you can do these repairs on your own.

Furthermore, if you have renting in mind, then be sure are up the role of the landlord that borders the job of a handyman.

#3 – The snare of high-interest rates

If you browse through the credit line of any financial institution, you might get the impression that borrowing money is cheap nowadays. However, as we have stated above, interest rates can be higher on an investment property than mortgages on residential housing.

For this reason, wise property investment includes researching the financial market in the search of low interest rates. After all, it is your profit margin that’s at stake since high-interest rates can eat it up entirely!

#4 – Calculating profit margins

Speaking of margins, if you wish to make a profit, you first need to list all your expenses.

For instance, the cost of maintenance should be around 1% (of the value of the property) or even less if you do the work yourself.

 Then there is home insurance, homeowners’ association fees, national, regional, and local property taxes. The list of expenses will never be truly populated, so always plan up to 20% extra funds. If you do everything correctly, the profit margin should linger around 10%

#5 – Start with a low-cost home

Since you are a novice in the real estate business, we recommend that you start off lightly and purchase a low-cost property.

Not only will you pay less to start with but all of the accompanying costs will be lower as well, providing you with more room to manoeuvre.

#6 – Location sells

The price of the property shouldn’t influence the location that needs to be ideal.

In fact, location takes precedence over the value the property is being sold for.

A location is much more than the physical location of a house or an apartment block. It includes the distance to the nearest school, access to medical care, the neighborhood crime rate, access to labor, etc.

You should try to get as many of these factors as possible to go in your favor.

#7 – Be fully aware of all the risks

You’re entering the real estate market to make money but be aware that this is a risky undertaking. If you invest in rental property, there is a risk of running into dodgy tenants that might be late with monthly rent. Furthermore, be prepared for the rental income to undershoot the total mortgage payment.

Also, keep in mind that property is nothing like stocks, which you might have traded with earlier. You cannot simply sell real estate when you feel like it so, don’t hope for quick returns; rather pray for them. It will take a large sum to enter the real estate market and an equally hefty sum to exit the trade.

All-in-all, there are many more pieces of advice for beginners than the ones we have listed above. Hopefully, they will be enough to keep you afloat in the first couple of months after purchasing your first property.

Once you learn the ropes of property investment, you can expect your profit margin to gradually increase. 

 From the editor - So, there you have it!  Wishing you real estate investing success!! 

We are the New Jersey title insurance agent that does it all for you. For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us, Vested Land Services LLC. We can help!

For your real estate purchase or mortgage refinance or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow@vested.com

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Weekly mortgage applications tank

Weekly mortgage applications tank even more, as rising rates make homes less affordable

• The numbers are getting uglier for potential homebuyers and homeowners looking to save some money.
• Mortgage interest rates jumped again last week, causing mortgage application volume to fall 6.6 percent from the previous week.
• Volume was just 3.5 percent higher than the same week one year ago, according to the Mortgage Bankers Association.

See the full report at CNBC

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Rise in interest rates slow the refinance market

 From where I sit looking at new files being opened, it was clear that the increase in interest rates had a dampening effect on the NJ mortgage market.  So reports the New York Times.

With mortgage rates hitting their highest level in two years, the rush to refinance has slowed to more of a stroll.

As of the end of June, refinancing activity represented 64 percent of all mortgage applications, the lowest volume since May 2011, according to the Mortgage Bankers Association.

 The rise in rates by “better than a point” since early May has effectively killed off a lot of the refinancing business, in what amounts to a “purely an interest-rate-driven decision,” said Keith T. Gumbinger, the vice president of HSH.com, a financial publisher. But getting into a new mortgage still makes sense for some categories of homeowners.

 Who might benefit from the rate increase?

The most obvious candidates are borrowers whose rates are 5.5 percent or higher.

 Another group of potential borrowers are those who found their homes under water value-wise but who've built up equity because of the rise in prices.

Read the full article, Refinancing, Despite a Rate Rise.

For your next commercial real estate transaction, house purchase, mortgage refinance, reverse mortgage, or home equity loan, contact us. We can help. Located in Fairfield, NJ, we are the title insurance agent that does it all for you.

* * * * *

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Low mortgage interest rates driving the market

I believe this article from Realty Times is on point with the volume of business we are seeing now.  But the question no one is asking - is the market going to run out of qualified borrowers?

Lenders have tightened their criteria and loans are harder to get.  Low rates help, but they're not the only answer as home prices tend to rise in a low rate market.  It's a Catch-22.

What do you think?

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Land Services LLC

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 973-227-0645

E-mail sflatow AT vested.com

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Little known fee to raise interest rates

Loan fees are about to rise, and you won't even know it.  The fee in question is a guarantee fee collected by Fannie Mae and Freddie Mac that is part of the interest rate you pay.  It's not set forth on the settlement statement because it does not have to be disclosed.

According to the New York Times,

INSIDE the interest rate quoted on your home lies a small hidden fee that has been charged by government-sponsored entities like Fannie Mae and Freddie Mac for more than three decades. It’s an add-on rate known as the guarantee fee.

Everyone has to make a living, including Fannie Mae and Freddie Mac, don't you think?  But just think of the fees collected over the years that seem to have been squandered in the so-called "sub-prime crisis."  In any event, it means a small rise in interest rates is coming in the days ahead.

Read the full story here.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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Is that the best mortgage you can get?

The New York Times suggests vetting the lender when you buy a home.

“BEFORE buying a house, borrowers will undoubtedly do a thorough check of the property, examining its structural soundness and the surrounding neighborhood, among other things; they will research the best type of loan, comparing interest rates, terms and fees. But not all borrowers do due diligence on their lenders.”

“Ferreting out good information is not that easy. For one thing, different kinds of lenders are held to different rules, licenses and disclosure requirements. Some states, like New York and New Jersey, require mortgage brokers to complete criminal background checks through the state police.”

 So what to do? According to industry experts they

“suggest that borrowers focus more on the individual who would be their mortgage broker, loan officer or loan originator. Among the questions borrowers should be asking them: How long have they been in the field? How well or promptly do they answer questions? Do they want to know the borrower’s financial goals? A look at their work experience and background on their LinkedIn profile may also be helpful.”

What should you look for?

• are good listeners, and helpful with personal-finance questions.
• size might be one factor. whether a blemish on a firm’s record, say a large number of foreclosures or a class-action lawsuit settled three years ago, will dissuade you from cultivating a helpful relationship.
• governmental and quasi-governmental sites may be helpful.

A minefield? Maybe. Read the full article to learn more

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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Mortgage Rates May Have Hit Bottom - NYTimes.com

Have mortgage rates hit bottom? The New York Times' Lynnley Browning writes that "a recent and sustained increase may indicate that consumers can expect to pay more in the new year to buy or refinance a home."

"Mortgage rates typically track those of 10-year and 30-year Treasury and other government bonds. Yields, or interest rates, on those notes have been "rising amid lender concerns that the White House’s deal with Congress on Dec. 7. to extend the Bush-era tax cuts and the Federal Reserve’s move in early November to buy back $600 billion in debt to stimulate economic growth will combine to fuel inflation and swell the budget deficit."

Read the complete post, Mortgage Rates May Have Hit Bottom.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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Refinance costs - how often can they be deducted?

Here's an interesting question from a Kiplinger's reader:

Although I refinanced my mortgage less than two years ago, interest rates are so low that I plan to refinance again. What costs can I deduct when I refinance for a second time?

Folks who refinance and refinance, again, are called serial refinancers. We saw the phenomenon grow during the days of sub-prime lending. But with interest rates now so low, it may make sense to refinance sooner rather than later.

To answer the question,

Serial refinancers get an additional tax break on top of the usual mortgage-interest and property-tax deduction. You can deduct the points you pay to get a mortgage in the year you buy a home -- even if the seller paid the points for you (a point is equal to 1% of the loan). You can also deduct points paid to refinance a mortgage, but normally that deduction must be spread out over the life of the loan. So if you paid two points ($5,000 in this example) on a $250,000, 30-year mortgage, you can deduct just $166.67 per year for 30 years.

The income tax consequences for making a mistake are not light. So caution is in order.

Read the full article, Get a Tax Break for Refinancing Again

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow, Esq.

Vested Title Inc.

165 Passaic Avenue, Suite 101

Fairfield, NJ 07004

Tel 973-808-6130 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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Calling all credit card users- New credit card rules begin

By the time you are reading this, rules for credit cards will have changed. “Newly purchased gift cards won't expire as quickly, and late fees on credit card payments won't be as punishing."

“The final stage of consumer protections signed into law this year go into effect Sunday. Yet they only curb select practices; other fees and charges still abound.”

Here are some of the new safeguards, but remember, you can still get burned.

Penalty fees:

New protection:

Fees for late payments and other transgressions will be capped to the amount of the violation, up to $25. And, a single violation can no longer result in more than one fee.

Gaps to watch: Technically, there isn't an outright ban on penalty fees higher than $25.

“There aren't any caps on other charges. And not surprisingly, many issuers hiked fees for balance transfers, foreign transactions and cash advances in the past year.”

Rate hikes:
New protection:

“Banks must review a rate hike every six months to decide whether the increase is still warranted. If the factors that prompted the hike are no longer applicable, the rate must be lowered.”

This rule applies to hikes dating to Jan. 1 of last year, when banks began raising rates in anticipation of the new regulations.

Gaps to watch: 

“Even if a bank finds that a rate should be lowered, the reduction doesn't have to restore the previous interest rate.”

Gift cards:

Expiration dates

New protection:

“Gift cards issued after Aug. 22 must have expiration dates that are at least five years from their date of purchase.”

Gap to watch:

“The rule doesn't apply to certain gift cards, such as those issued as part of a rewards or loyalty program.”

Inactivity and service fees:

New protection:

“Such fees can only be charged if the card hasn't been used for at least one year. After that, only one fee can be charged each month.”

Gaps to watch:

“There's no cap on inactivity or service fees. So even though you can only be assessed one monthly fee, it could quickly eat away at a card's value if it's not used.”

It's a first step, some one say a small one, others a big one, in giving consumers more protection.  Let's see what Congress does next.

Read the Associated Press article.

For your next title order or 

if you have questions about what you see here, contact 

Stephen M. Flatow 

Vested Title Inc. 

648 Newark Avenue, P.O. Box 6453, 

Jersey City, NJ 07306 

Tel 201-656-9220 - Fax 201-656-4506 

E-mail vti@vested.com - www.vested.com

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JUMBO Mortgage Rates Don't Shrink

Bloomberg News reports-

Jumbo mortgage shoppers in the most expensive U.S. housing markets such as New York and San Francisco aren't getting much relief from lower borrowing costs. The average 30-year fixed-rate for home loans of more than $729,750 remains almost 2 percentage points above conforming rates and the spread between them may set a record this month, according to financial data firm BanxQuote.

Why?

Banks remain reluctant to lend. “The collapse of the private mortgage securities
market means lenders find there's little demand for jumbo loans they want to
sell.”

Good News

“If low conventional rates entice enough homeowners to refinance, jumbo home loans may become more affordable as loan payoffs add liquidity to the
banking system.”

“The average 30-year fixed jumbo loan rate was 7.32 percent on Dec. 22, compared with 5.38 percent for a conforming loan, according to BanxQuote of White Plains, New York. The difference between the two averaged 2.13 percentage points in December, 10 times the spread from 2000 to 2006 and above last month's 1.95 percentage points that was the highest on record. If current rates reflected the historical difference of 0.2 percentage points, jumbo borrowers with an $800,000 mortgage would save $913 a month.”

More Good News?

Buyers in markets that rely on jumbo loans, such as New York, San Francisco and Boston, may see rates fall in 2009 because of Federal Reserve chairman Ben Bernanke's plan to buy at least $500 billion of securities issued by Fannie Mae and Freddie Mac.

Here's the report from Bloomberg News

Vested Title Inc., 648 Newark Avenue, P.O. Box 6453, Jersey City, NJ 07306.
Tel 201-656-9220. Fax 201-656-4506.
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Mortgage rates down, but can you get one? - Inman News Report

Inman News reports a rise in mortgage applications as interest rates have fallen "since the Federal Reserve said it would spend $600 billion to buy mortgage-backed securities and debt issued by Fannie Mae, Freddie Mac and Ginnie Mae, but tightened underwriting standards mean many people won't be able to take advantage of them."

"The Mortgage Bankers Association said applications for refinance loans shot up 203 percent on an adjusted basis for the holiday-shortened week ending Nov.28. Applications for purchase loans were up a more modest 38 percent."

"But," warns the report, "tightened underwriting standards will disqualify many with less-than-stellar credit scores, and an estimated 12 million homeowners who owe more than their homes are worth may also find it difficult to purchase or refinance a home."

Well, here's to anything that gets this market going. It's worth a wait and see attitude.

Reprinted with permission of Inman News.

Stephen M. Flatow

Vested Title Inc.,648 Newark Ave., P.O. Box 6453, Jersey City, NJ 07306
Tel. 201-656-9220. Fax 201-656-4506.

E-mail vti@vested.com. Web www.vested.com

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