Real Estate Investing for Real

Before we can talk about the good news of a recession, lets define exactly what a recession is: 

 ”In macroeconomics, a recession is generally associated with a decline in a country’s real gross domestic product (GDP), or negative real economic growth.  According to widespread definition, a recession occurs when real growth is negative for two or more successive quarters of a year.” - Wikipedia

The biggest problem with current economy is that there great debate on whether we are in a recession or when it might of started.  So lets forget about the guessing game of a recession and take a look at few facts.

Since the 1940’s there have been 11 recessions.  On average ...

I am one of the cheapest people you will ever meet. I drive a 1999 Toyota Corolla with 126,000 miles on it (a car is a depreciating asset, why would I spend a lot of money on one?). A few weeks ago when I was at Disney World I carried around the same bottle of water all week and I brought food into the park to eat for lunch everyday (there was no way I was paying $4.00 for a bottle of water and $7.00 for a hot dog).

When I go on dates, which is very rare since I am a workaholic, a “nice” restaurant to me is Ruby Tuesday’s (yes…now you know one of the many reasons I am single.) I mean, if I take a girl to the Cheesecake Factory or the Melting Pot, we better be engaged!

That being said, I believe that one of the only reasons to spend my hard earned money is to make more money. This includes my education and power team. I will never understand ...

Here are some mighty strong words: “The subprime lending debacle has caused the greatest loss of wealth to people of color in modern U.S. history.” That is the conclusion of the lead author of a new report by United for a Fair Economy, Amaad Rivera, as quoted in an excellent article in the Christian Science Monitor.

The report, says the paper, also concludes that “Black/African-American borrowers will lose between $71 billion and $92 billion in the current foreclosure crisis…” Add another loss for Latino borrowers of another $75 billion to $98 billion, says the paper.

Why?

The paper reports that a little more than half of African-Americans and 4 in 10 Hispanics ...

Buy an Apartment Building Today?

In today’s turbulent financial markets many investors are looking for ways to grow their money that will offer a steady flow of predictable income and limited market risk. More and more people are buying apartment buildings to help diffuse the effects of inflation on their portfolios. Apartment buildings offer many exceptional advantages over traditional investments such as stocks, bonds and mutual funds. This is especially true in a recessionary market environment. In fact there are many attractive attributes of an apartment building investment that many investors who are new to commercial real estate may not even know about. There are some interesting facts about buy multi-family ...

The Associated Press is reporting today that Wachovia Bank, the nation’s fourth largest bank in terms of assets, will be shutting down it’s mortgage lending division.

“Wachovia Corp. lost $8.86 billion in the second quarter, and said Tuesday it was slashing its dividend and cutting 6,350 jobs after losses tied to mortgages soared.” In addition, “late Monday, Wachovia announced plans to leave the wholesale mortgage lending business. And beginning Friday, the company will no longer offer mortgages through brokers, joining other lenders making similar moves to exit the troubled sector.”

Any guesses on who is next?

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This Post is from the BiggerPockets ...

In his landmark book, The 7 Habits of Highly Effective People, Stephen R. Covey calls the second habit: Begin With The End In Mind. Nowhere is that more true than in today’s real estate market. When investing in real estate, the End in Mind is your exit strategy. Unless you just like to wander aimlessly down a highway, you know where your exit is before you get on the interstate. When entering into a real estate investment you also need to know how you plan to exit.

Novice and veteran investors alike tend to get caught up in the excitement of finding a great deal. However a veteran will be more likely to think a deal through. Finding a property with a ton of equity is only good if you have a way to realize that gain.

Possible Exits

There are a number of different ways to dispose of a real estate ...

Hedging is the practice of risk mitigation for Wall Street investors and we in the real estate investment world could learn a thing or two from the boys in the power ties.

A good working definition of “hedging” to get started:

“An investment made in order to reduce the risk of adverse price movements in a security, by taking an offsetting position in a related security, such as an option or a short sale.”

As real estate investors we could “cover” the “adverse price movements”…loss of 30% of real estate prices…by taking an “offsetting position in a related security”…but how do we do that?

It’s easier than it sounds.

For example, August 2006, I knew (and so did you as a real estate investor paying attention to the market) we had hit the top for real estate values. I also knew in many markets the top was really a bubble top…the builders over ...