Miami real estate investing is not very hard to learn, even though that there are many facets that are essential to understand before attempting to start investing. While many books and seminars are offered on investing only a few deliver the desired results. Investing is not taught in any university and it is more of an art than an exact science. It requires a lot of perseverance and determination. Many investors learn by trial and error although a mistake could be very expensive and usually devastating. Numerous millionaires made their money through real estate investments. Information, education and research are major considerations for an investor to be successful.

Real estate investing in Miami, Florida is a full time business where investors are constantly trying to maximize their profits and minimize their risks in other to generate wealth over time. Investing is a verified long term wealth creator. It is a numbers game and many of the transactions will not work but it is all worth it when one deal goes through and all your hard work is rewarded. It takes a lot of time and effort to effectively dominate the art of real estate investing. It is a risky business but it is the best way to create lasting financial security. Investing in Miami real estate is an excellent way to make a positive monthly income and built long term wealth and obtain financial independence.

Investors in Miami real estate have recently taken a beating and many have seen their investment properties lose value. An investor should not panic and sell in this market to avoid huge loses. Since it is a long term business an investor should realize that the time is now to rent the property and hold until the market turns around. If an investor requires a predictable and safe return on investment then investing in Miami real estate is not the answer. The business of real estate investing is very risky, and unpredictable but well worth the effort. An investor should consider buying foreclosures and bank owned properties. The Miami real estate market has hit bottom and it should be bouncing back very soon.

Miami real estate investing is different than various types of investing. An investor must overcome many roadblocks and obstacles. Usually finding financing is the single most overwhelming challenge an investor will face when trying to purchase Miami real estate. Using leverage in the business is common so arranging financing is very important. Do not purchase investment property with no money down. Little or no money down has caused many properties to go into foreclosure recently. Investing is not as perplexing, time consuming and financially draining as one might imagine.

Bank owned properties or Reo’s and Short Sales are a good way to start to look for a good deal in Miami real estate to purchase. The list of bank real estate owned (Reo) properties is huge. Not all banks want to discount properties so finding a good property to buy takes a lot of work and patience. Short Sales are the new trend in speculating in Miami real estate. Banks are not very eager to short sale their inventory and it takes usually about two months for the bank to accept or reject the offer. Government foreclosures are another to avenue to search. These properties include HUD, Housing and Urban Development, VA, Veteran Administration, FNMA and Freddie Mac. HUD homes are very popular and usually they will sell to the higher bidder in a weekly online auction. Investors are allowed to bid when the property does not sell to owner occupants. These HUD-FHA foreclosures properties are offer an excellent value. Foreclosures remain the best way for investors to start in the Miami real estate investing business since most of them have instant equity.

The best way to start investing in Miami real estate is buying foreclosures. The tremendous amount of foreclosures now in the Miami real estate market overwhelmingly gives the investor a lot of inventory to choose from in order to purchase the right property at a discounted price. This opportunity will more than likely never be available again and investors should take full advantage. An experienced Miami real estate agent who specializes in foreclosures is essential in order to guide the investor. The agent must have access to current bank owned REOs, foreclosures, short sale properties, pre-foreclosures government foreclosures and other distress listings. Investing in Miami real estate is a very exciting and rewarding business.

Builders in February probably broke ground on the fewest U.S. homes since October, partly because of record snowfall in areas of the country, economists said before a government report today.

Mounting foreclosures are making it harder to clear inventories, keeping pressure on prices and discouraging new construction. The economy has yet to create the sustained job growth that could invigorate housing demand and is one reason Federal Reserve policy makers will keep interest rates near zero after their meeting today.

“There are still a lot of headwinds for builders,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., a New York forecasting firm. “There’s enormous competition from distressed homes that’s weighing on demand for new housing. It’s going to be a very, very grudging recovery.”

The Commerce Department will report starts at 8:30 a.m. in Washington. Estimates in the survey ranged from 510,000 to 610,000, after a 591,000 pace in January.

At the same time, the Labor Department will release the import price gauge. Estimates ranged from a decline of 1 percent to a gain of 0.7 percent, following an increase of 1.4 percent in January, according to the Bloomberg survey median. Compared with a year earlier, the index probably rose.

Building Permits

The housing report may also show building permits, a sign of future construction, dropped for a second consecutive month, a sign the extension and expansion in November of a homebuyer tax credit is doing little to stoke demand. Permits fell 3.4 percent to a 601,000 annual pace, a three-month low, according to the survey.

A report yesterday showed builder confidence unexpectedly declined in March as prospective-buyer traffic fell to a one- year low. The National Association of Home Builders/Wells Fargo’s index of builder confidence dropped for the third time in four months.

The Standard & Poor’s supercomposite index of 12 builders, including D.R. Horton Inc. and Pulte Homes Inc., fell 0.9 percent yesterday. The broader S&P 500 rose less than 0.1 percent to 1,150.51.

Fed Meeting

Fed policy makers will leave the benchmark lending rate unchanged at zero to 0.25 percent, where it’s been since December 2008, according to the median forecast in a Bloomberg survey. They’re also likely to stick to their timetable of completing their plan to purchase $1.25 trillion in mortgage- backed securities at the end of this month that was part of an effort to drive down borrowing costs and revive the housing market.

President Barack Obama in November extended a tax credit of as much as $8,000 for first-time homebuyers, and expanded it to some current owners. The extension covers closings through June as long as contracts are signed by the end of April.

Bigger gains in housing sales ultimately require a pickup in job creation. Unemployment may end the year at 9.5 percent, according to a Bloomberg monthly survey.

Executives at Hovnanian Enterprises Inc., New Jersey’s largest homebuilder, are among those watching if demand will hold up after the incentive fades. The Red Bank, New Jersey- based company this month reported its first quarterly profit since 2006.

“With the tax credit for first time and repeat buyers expiring at the end of the second quarter, we too are interested to see if the positive momentum that we established can be sustained,” Chief Executive Officer Ara Hovnanian said on a conference call with investors on March 3. “We’re keeping a close eye on this as we head into the summer months.”

Lower prices have spurred home sales, but looming foreclosures and high unemployment are clouding the outlook

The U.S. housing market has been in a slump for the past four years. When will it ever end?

In recent years, real estate has proven as jittery and unreliable as any other market. The average U.S. home price nearly doubled between January 2000 and April 2006, according to the First American LoanPerformance index. Since then, the average has fallen about 30%. The drop has been 53% in the Las Vegas metropolitan area and 39% in Miami, where about a quarter of all households with mortgages are behind on their payments or in foreclosure. The value of your home might be determined more by whether the neighbors keep their jobs than whether the house has ample light and closet space.

Here is a guide to navigating a fractured and volatile market:

1. Is the housing market getting better?
It has shown some signs of healing this year, but the much-touted recovery is tentative and fragile.

Home sales have increased from the severely depressed levels of 2008. The inventory of unsold homes listed for sale also is down. Bidding wars are breaking out for foreclosed homes in the sorts of neighborhoods (near jobs and decent schools) that attract both first-time buyers and investors seeking rental properties.

But more than 6.7 million U.S. households with mortgages, or about 13%, are behind on their payments or are in the foreclosure process, according to the Mortgage Bankers Association. Eventually, many of them will lose those homes, sending more supply onto the market. Unemployment has continued to rise, and the housing market is unlikely to show a sustained recovery until job growth resumes.

While the supply of middle-class homes on the market has declined somewhat, it remains ample in most places. And there is a huge glut of high-end houses for sale in many areas. That means prices of high-end homes might still have a long way to fall.

2. When will housing bottom out?
There probably won’t be any clear turning point. Monthly indicators, such as home sales and prices, tend to bounce erratically from month to month, making it hard to discern the underlying trend. And the housing bust will end at different times in different places. House prices already might have bottomed out in the coveted Virginia suburbs with short commutes into Washington, D.C., for instance. But it probably will be years before all of the unsold condos find buyers in parts of Florida.

Generalizations about states or metropolitan areas don’t say much about what is happening in your neighborhood. In Summit, N.J., known for good schools and an easy, 45-minute train commute to Manhattan, the median home price in September was up 1.2% from a year earlier, according to Otteau Valuation Group, an appraisal company. In Atlantic City, N.J., which suffers from too much speculative building of condominiums and weak demand for vacation homes, the median price is down about 12% from a year ago.

3. What signals should I watch to determine whether my local market is improving?
One way to get a sense of supply is to ask a good local real estate agent for stats on how many homes are listed for sale in your town and how many months it would take at the current sales rate to absorb that supply. Anything over about six months generally is considered high, meaning that sellers might have to cut prices. Another way to get a sense of a neighborhood’s health is to count the number of for-sale signs and vacant houses. If there are more than a couple vacant homes in a block, that might be a bad sign, particularly if no one is taking care of them.

The supply of homes listed for sale has fallen very sharply in some areas. But the supply is likely to balloon again in many areas with a renewed surge in foreclosures. Many local newspapers provide information on foreclosure filings.

Demand depends heavily on the job market. The U.S. Bureau of Labor Statistics provides unemployment rates by metropolitan area. In September, they ranged from 2.9% in Bismarck, N.D., to 30% in El Centro, Calif. State and local agencies provide job-market data, too. Celia Chen, a housing economist at Moody’s Economy.com, says help-wanted signs can be a useful local indicator; if you start seeing more of them around your neighborhood, that is a sign that business in your area could be starting to recover.

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There are two words that give pause to the most motivated foreclosure buyer: due diligence.

Those words mean researching all the risks involved in a property purchase, which in the past meant extensive legwork and expense. But that’s no longer the case, thanks to exponential advances in information technology and the establishment of Web-based property data aggregators like RealtyTrac.

Don’t be fooled – buying a foreclosure property doesn’t equate to easy money by any means. A savvy player in this market is willing to do a bit of homework. But the tools and resources needed to do that homework are much more accessible now than ever before.

“While buying a foreclosure property is certainly not without risk, the right examination and due diligence on the part of buyers can significantly improve their ability to make a strong investment,” explains James J. Saccacio, chief executive officer at RealtyTrac, the leading online foreclosure marketplace.

Web-based services like RealtyTrac can help investors and homebuyers tap into the previously hidden foreclosure market by providing access to property data formerly available only to professional real estate brokers and investors. Today, homebuyers can use these services to identify and research potential home purchases, as well as to find the tools and professional resources they need to help them close the deal.

It makes sense to give any foreclosure property under consideration a thorough examination – possibly even more thorough than for a traditional real estate property. There are three stages of foreclosure that require different research strategies: pre-foreclosure, auction and bank owned.

Before buying a pre-foreclosure property directly from the owner, run a preliminary title check for all debts secured by the property. You can research the title online using RealtyTrac’s Legal and Vesting Report or Transaction History Report. Subtract the total amount owed from the estimated market value to determine the potential bargain. After making contact with the owner, arrange a walk-through of the property to evaluate its condition. Factor estimated repair costs into your purchase offer. Before you close the deal, hire a professional home inspector to inspect the property and enlist a title company to run a final title check.

In most states, you don’t have a chance to inspect a property before buying at a public auction, which makes this type of purchase more risky. But if you’ve researched the title and determined the amount owed is far less than the market value, you’ll have some margin to cover unexpected repair costs. Before you go to the auction, set a maximum bid based on your research and stick to that bid at the auction.

Although you’ll be able to inspect the property if it’s bank owned, the bank typically knows little about the property and will sell it in as is condition. This means the bank will disclose all the needed repairs it knows about, but is not held responsible after the sale for any repairs it did not know about. Factor the known repairs into your purchase offer and have a professional inspection conducted before closing the deal. You should also have a title company run a final title check before closing, although most banks will make sure the title is clear before selling.

Here are eight steps for doing a professional-level property examination for all stages of foreclosure:

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Anyone who’s been paying attention to Wall Street investment strategists’ forecasts for 2010 knows that a potential avalanche of commercial real estate foreclosures could hit the market and the smartest thing to do is get out of the way. This would include steering clear of most of the real estate investment trusts, or REITs, in the commercial sector. These trusts hold a lot of the retail, office, and industrial properties that have fallen sharply in value and may find it hard to refinance the underlying loans that are set to mature in the next few years.

Add in the fact that shares of the publicly traded REITs that own roughly 15% to 20% of all commercial properties in the U.S. have appreciated nearly 100% since March and it’s hard to find a compelling reason to buy any of these stocks right now. The MSCI U.S. REIT Index jumped 96.6% from Mar. 9 to Nov. 17.

Investors need to know, however, that the prospects for the public REITs are dramatically better than those of their privately held counterparts. That’s because the public companies financed acquisitions at lower grades of leverage during the commercial real estate boom a few years ago, while private developers took out mortgages on properties at up to 90% loan-to-value ratios. The more highly leveraged players have been left with underwater investments following property value declines of 30% to 40%.

The question of survival for most of the 99 publicly traded REITs that BMO Capital Markets covers is largely off the table because these companies have proved that they can access the capital markets, says Paul Adornato, BMO’s senior REIT analyst.
DDR’s mortgage-backed securities win
This year, publicly traded REITs have raised over $20 billion through equity offerings and an additional $7 billion through unsecured debt offerings, according to John Wenker, co-manager of the First American Real Estate Securities Fund (FARCX).

In addition to better capital market conditions, the long-dormant commercial mortgage-backed securities (CMBS) market has begun to show new signs of life. On Nov. 16, Developers Diversified Realty (DDR) successfully sold $400 million in bonds guaranteed by 28 shopping malls in 19 states. Aided by the federal government’s asset-backed securities loan facility (TALF), which lets investors borrow from the Federal Reserve to buy new CMBS, the offering was oversubscribed and priced at a lower premium than expected over comparable Treasury bonds.

The prospect of additional CMBS offerings under the TALF could help put a floor under commercial property values, reducing the flow of foreclosures to come.

“If the securitization market for commercial real estate starts to open up in return, it will be a dramatically positive catalyst for not only public real estate companies, but the [entire] commercial real estate sector,” including privately held properties, says Wenker. Just how distressed the market gets remains to be seen over the next year or two and will depend largely on the state of the economy and the capital markets, he adds.

Adornato at BMO doubts the DDR deal will unleash a flood of CMBS deals, although two other trusts are exploring offerings of their own.
a big drop in maturing unsecured debt
Three weeks before DDR’s breakthrough, Credit Sights predicted that the majority of REITs it covers will have enough cash and credit capacity to meet all unsecured debt obligations, at least through 2012.

Credit Sights noted that many REITs have used proceeds from equity offerings over the past three quarters to pay down maturing unsecured debt. “We are giving our companies credit that they can refinance their secured debt without having to kick in a significant amount of additional equity,” or that they can mortgage unencumbered assets to raise cash to pay down secured debt that’s maturing in the short term, certified financial advisor Craig Guttenplan wrote in an Oct. 25 report.

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Let’s face it, with the economic recession many people have lost their homes due to foreclosure. While there have been a number of items which have been attributed to the economic collapse, the number one item is the bursting of the home bubble. Homes all across the United States began to loose value and people began to loose them to foreclosures. This led to a loss in jobs and ultimately a drop in spending. As all of this came forward, the world’s economy began to get hurt until there was almost no country in the world that was not affected.

A foreclosure is a serious deal. Sure the value of the home is half of what it was when you took out the mortgage, but if you lost it, your credit record would be affected and of course you would have to look for a new place to stay. While the value of the home may have dropped, that does not mean it will not rise once again and likewise no one wants to deal with the credit record issues which would prevent you from purchasing a new home.

If you do not want to loose your home to foreclosure, you do not have to. A number of specially designed lending programs have been available to prevent any further foreclosures. You just need to realize that these programs are meant to help you to keep your home. Once you have decided to put forth the effort to find out more about these specially designed foreclosure programs, you will realize their importance.

They will help you to reduce your monthly payments and lower your overall interest rates. Not to mention the most important part which is to help make sure that you are able to keep your home and handle all of the payments. This will and does help many people every single day. Stop your foreclosure and stay in your home simply by choosing to take advantage of these specialized lending programs which have only been made available to help stimulate the economy and prevent further collapse of lending institutions around the nation and prevent further foreclosures from happening.

In the end though, the choice will be up to you. Of course you will have to qualify for these special programs that will help prevent your foreclosure and allow you to stay in your home. If you are still making the same income as you were before the recession and have not been affected as much as many others, then the chances of you qualifying for loan restructuring will be slim to none; but if you are like the countless families all over the nation who have felt the effects of the economic recession, been laid off, lost your job completely or worse, then you may actually qualify for it and be able to keep your home.

Now, the spotlight has shifted to the Manhattan Beach broker, who took over as the 2010 president of the California Association of Realtors earlier this month.

Goddard, manager of RE/MAX Marquee Partners in Manhattan Beach, began selling real estate 35 years ago, specializing in residential properties, residential income properties and commercial buildings. Goddard also is a developer and a licensed general contractor. During the past 28 years, he has consistently ranked among the top 10 agents in his company’s group of more than 400 agents.

Over the past 17 years, he has chaired or served on myriad committees and forums at the local, state, and national association level. As president of CAR, one of Goddard’s goals is to shed light on housing-related issues, including the rights of private-property owners, and housing affordability.

Us: What are the biggest challenges facing you in your year as C.A.R. president?
The issues that the real estate industry currently is facing – Home Valuation Code of Conduct (HVCC), the economy, the amount of foreclosures, bank-owned properties, and short sales on the market-will continue to be a challenge throughout next year.

It’s going to be important that the Federal Reserve keeps loan rates where they are and that Fannie Mae and Freddie Mac remain intact and viable. The purpose of Fannie and Freddie is to provide capital to lenders so they can issue home loans to qualified buyers in any market. We also need to work with the jumbo lenders to make it easier for high-end buyers to obtain financing.

Although the creators of HVCC were well intentioned, the code is negatively affecting real estate sales transactions. The cost of appraisals has risen; valuations have differenced dramatically from perceived market values; a rising number of alleged factual errors have been reported in appraisals; the completion of appraisals are being delayed by several days or even weeks; and appraisers from as far away as 40 miles are being assigned to conduct valuations in unfamiliar neighborhoods.

Us: What’s the outlook for the housing market in Southern California and Orange County as you see it?
I think that the markets in Orange County and Southern California in general will be pretty much what we’ve seen over the past few months-sales should maintain their current levels through most of next year and first-time buyers and investors will continue to drive the market.

Specially in Orange County, I think home prices hit bottom in early 2009, like so many other parts of the state, but that we may see an off-season dip before seeing modest appreciation in 2010. Any price increases will be determined by low inventories, low mortgage rates, and tax credits. Distressed sales will likely make up a smaller part of total supply and more discretionary sellers will enter the market.

Us: Has the market hit bottom?
When you look at the data from C.A.R., you’ll see that the median price has risen eight straight months and that prices bottomed out in February of this year. First-time buyers and investors are driving the market, and sales continue to be up year over year. Once perceptions shift and the public realizes that the market has indeed hit and passed bottom, the market can move in tandem and activity will respond accordingly.

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