The Collected Works of Author and Blogger Larry Roberts

Archive for February, 2016

Land installment contracts provide a viable path to homeownership, but they are fraught with abuse. In yesterday's post, Three calculations every real estate investor must know, I discussed my personal criteria for buying rental investment properties. Everyone who actively invests has their own criteria, but nearly everyone has some criteria they use to filter out properties with problems they don't want to deal with. Have you ever wondered what happens to those properties that fail to meet anyone's criteria? What is the fate of those properties that are so far gone that it doesn't pay to renovate them and bring them up to a salable standard? Many might think these homes are demolished, and in places like Detroit, this does…[READ MORE]

The three main measures of financial performance for rental real estate are capitalization rate, cash-on-cash return, and internal rate of return. When people buy a personal residence, they often solace themselves that the high prices is warranted because the property is a "good investment". Novices generally assume that anything they sell for more than they paid is a good investment without any understanding of what a good investment really is. It’s not enough to merely make a profit, the amount of profit relative to the amount of money spent matters. If someone brags that they made $100,000 on a resale home investment, it's much more impressive if their initial investment was $100,000 than it is if they invested $1,000,000. It's…[READ MORE]

IRVINE, Calif., February 2, 2016 – OC Housing News Riverside County Housing Market Report: February 2016 Historically, properties in this market sell at a 18.5% discount. Today's discount is 23.5%. This market is 5.0% undervalued. Median home price is $305,500 with a rental parity value of $403,100. This market's discount is $97,600. Monthly payment affordability has been worsening over the last 1 month(s). Momentum suggests unchanging affordability. Resale prices on a $/SF basis increased from $174/SF to $175/SF. Resale prices have been rising for 3 month(s). Over the last 12 months, resale prices rose 5.9% indicating a longer term upward price trend. Median rental rates declined $2 last month from $1,785 to $1,783. The current capitalization rate (rent/price) is 5.6%.…[READ MORE]

Analysts working for homebuilders see a flat market with weak sales as the likely future for OC Homebuilders. At first low MLS inventory was a boon to homebuilders, but housing market manipulations give homebuilders false signals, so Orange County homebuilders oversupplied the market, and as it turned out, reflating the housing bubble hurts homebuilders, rather than helps them. It wasn’t until early 2013 that homebuilding bounced off its five-year long malaise at 60-year lows. Homebuilding is still 40% below the average of the last 60 years, and with high prices and weak job growth, some are wondering when the industry will ever recover. Homebuilder's demand comes from financially stable households with sufficient savings, good credit, and a desire to own…[READ MORE]

Most borrowers don't realize the hidden benefits of using FHA financing they can use to game the system to their advantage. Most first-time homebuyers use FHA financing because they lack better alternatives. FHA insured loans carry weak qualification standards (they accept FICO scores down to 580), they don't limit debt-to-income ratios, and they only require the borrower to put 3.5% down. Most would-be homeowners know the FHA loans are easy to qualify for and require little savings, so the primary reasons for using FHA loans are not a secret. These loans also carry significant costs and fees that make them less attractive to buyers with sufficient resources to put 20% down; however, there are five secret reasons everyone should consider…[READ MORE]

Page 2 of 6123456