Archive for the ‘Marketplace’ Category

Forbes.com recently posted an article listing Seattle as the #1 real estate market in the country most likely to rebound.  An excerpt from the story says “Seattle has a reputation for nurturing brainy industries like aerospace and software. That should help it weather the coming financial storm. Seattle also stays strong because of its vibrant, livable downtown where rents are going up and tenants are likely to stick around.”

It’s nice to know that the people at Forbes and the 700+ real estate professionals they surveyed for this piece echo the same sentiments that we at Real Estate Investment Firm have been saying for several months now.  When you look at the fundamentals of the Seattle area real estate market and the local economy, there is no better place to be to position yourself to make large gains when the turn around occurs.

You can read the entire article here.

Occording the Matt Steel, the owner of Real Estate Investment Firm, “this is the opportunity of a lifetime.”

As reported in a Seattle Weekly article on November 12, 2008, Steel talks about the current foreclosure market and how his company plays a part in it.  Helping thier investors find the “Hot” properties at auction each Friday or helping clients who are behind on their monthly mortgage payments find a buyer, through a short sale, to avoid foreclosure all together.

To see the full article in its entirety, go to http://www.seattleweekly.com/2008-11-12/news/foreclosure-vultures/

GOAL: The primary goal of Toys for Tots is to deliver, through a shiny new toy at Christmas, a message of hope to needy youngsters that will motivate them to grow into responsible, productive, patriotic citizens and community leaders.

OBJECTIVES: The objectives of Toys for Tots are to help needy children throughout the United States experience the joy of Christmas; to play an active role in the development of one of our nation’s most valuable natural resources – our children; to unite all members of local communities in a common cause for two-three months during the annual toy collection and distribution campaign; and to contribute to better communities in the future.

We treat people with kindness and respect, and we give without regard to race, creed, sex, lifestyle, residence, or other discriminatory consideration.

          Real Estate Investment Firm Cares   

                       GENTLY USED COAT DRIVE

Did you know that 90% of homeless adults need a new, warm coat each winter because they have no place to keep one over the summer months? But it’s not just homeless people who need our help; thousands of families are forced to make a choice between buying a winter coat and putting food on the table, or meeting other basic survival needs.

This year REIF Cares want to collect gently used winter coats and distribute them to thousands of men, women, and children who would otherwise go without.

Happy Holidays & a Joyous New Year

REALESTATEINVESTMENTFIRM

16300 Redmond Way, Suite 202, Redmond WA 98052

Please contact LoAn at 425-214-6744 with any questions or for drop-off information & locations. 

The month of October has proven to be a memorable one when it comes to buying foreclosure properties at the King County and Snohomish County Foreclosure Auction.  The deals that are available today at the trustee foreclosure sale are the best I have ever seen.

The roller coaster swings of the stock market, the federal bailout package, the collapse of WAMU, Fannie Mae and Freddie Mac and much, much more have created what I can only call the perfect storm of opportunity to buy these properties at discounts of 30-45%.

With such a small amount of liquidity available these days, the investors of a year or two ago can no longer play in this arena.  Since there are no more stated income loans, little or no down loans, etc. many real estate investors are forced to sit on the sideline and a new breed of investor has emerged to capitalize on this unprescendented opportunity. 

Today’s investor is likely to work at companies like Microsoft, Google, and Boeing, etc.  They do not see real estate investing as the path to overnight riches and a lavish lifestyle.  Rather they see real estate investing for what it should be.  What they do see though is opportunity. 

With the banks taking the radical ^{(Yes that is sarcasm)} position that for a person to qualify for a home loan they need to be able the document the following items:

1.  A steady and verifiable source of income (ie. they need to have a job)

2. Verifiable liquid assets (money in the bank)

3. A history of paying back loans (good credit)

many would be buyers and investors have been frozen out of the market.  This seemed to reach its peak during the beginning of October when you had the Dow Jones dropping like a lead balloon and Congress unable to come together at first regarding the bailout package.  This caused uncertainty and resulted in a 90% drop off of properties that get purchased by 3rd parties at the foreclosure auctions.  When 3rd parties don’t buy, the banks in turn end up with even more REO properties and they quickly realize that unless they act dramatically they will end up taking back even more of the foreclosure properties that go to auction.  When this happens the only real remedy the banks have is to stimulate 3rd party interest in the properties again.  The only way they can do that is to dramatically drop their opening bids down to levels that will assure that the foreclosures end up getting bid on at the auction instead of reverting back to the beneficiary.  THIS IS EXACTLY WHAT THEY HAVE DONE!  Lenders have begun to discount their opening bids by as much as 50%.  This equates to several hundred thousand dollars in some cases.

One example is a West Seattle property one of our clients purchased at the foreclosure auction on October 24th 2008.  The foreclosing lienholder was a first mortgage with a balance owed of $636,000.  Late Thursday the lender posted an opening bid of $311,000.  Our client was able to purchase the property at the King County foreclosure auction for $326,000.  The current market value of this custom built 2003 home is $500-550K.  That represents over $200,000 in instant equity for the buyer. 

This is just one example of many in the month of October.  November is traditionally a very busy month at the foreclosure auctions.  Don’t let this opportunity slip away. 

You can register to attend our free workshop, “Never Pay Retail” held every Tuesday at 5:30 in our Redmond office.  There you will learn how you can participate and profit from buying foreclosures at the foreclosure auction.  Sign up today!

“Be Fearful When Others are Greedy, and Greedy When Others are Fearful”  ~ Warren Buffet 2004

The above quote was written by Warren Buffet in his 2004 letter to shareholders of Berkshire Hathaway.  At the time Mr. Buffet penned the remark he was commenting on investors who try to “time the market” and was saying that if they insist on doing so, then they should keep in mind to “be fearful when others are greedy, and greedy when others are fearful.”

There is another famous quote regarding “greed” from Oliver Stone’s 1987 movie, Wall Street where the character Gordon Gekko, portrayed by Michael Douglas proclaims that “greed is good”.  The question then becomes, when should you be greedy!

In my opinion, that time is NOW!  Never before has an opportunity to purchase distressed and other below market real estate existed like the one before us now exists.  It is also likely to never occur to this degree again. 

Two or three years ago when the money flowed like wine from banks and other lending institutions and the masses were eager to run out and leverage not only all that they had but often they also leveraged what they didn’t, it was wise to be cautious.  It seems that any time their is a bull market in real estate most people develop amnesia and forget that real estate also follows a cycle.  You have periods of market appreciation and periods of market depreciation.  Tracked over any extended period of time and that line graph will always end up higher than when it started, but in-between there are always periods of ups and downs.

How many people who bought real estate in 2006, when just about everyone fancied themselves a real estate investor just because they watched a handful of “flip this house” episodes now are upside down on their “investment” or have already lost their house to foreclosure.  A perfect example of “being fearful when others are greedy”.

On the other hand, NOW is a perfect example of when to “be greedy when others are fearful”.  The savvy real estate investor knows that every crisis or correction in the market is only an opportunity to buy at a great discount.  Several factors have combined today to create a perfect storm of opportunity for those willing to educate themselves on the realities of the market.  While so many are afraid and sitting on the sidelines, those that pull the trigger today will reap the rewards of that decision tomorrow.

To learn how you can take advantage of the opportunities in this unprecedented market and buy investment or primary real estate please visit Real Estate Investment Firm and take the first step in creating long term and lasting wealth for you and your family.

The following is a very insightful video-blog from Zach Anderson at Cobalt Financial Services about the current market conditions and the opportunity that is available during this turbulent time.  Zach is a Certified Mortgage Planner and Strategic Wealth Advisor with CFS. 

The following article is a very helpfull explanation about “mark to market” otherwise known as FASB 157, a Federal Regulation requiring banks to report or “mark” their assets to the marketplace each day. 

Thank you Dean Ono from The Legacy Group for the valuable information and allowing me to repost it here for all of you.

The Chinese have a proverb: “May you live in interesting times.” And we are living through interesting times indeed.

Whatever the political posturing regarding the rescue plan, a plan needed to be passed. Credit markets are frozen and banks are going bust every day. This is not totally because of “toxic” mortgages. This has a lot to do with FASB 157, also known as “mark to market”.

Each day, lenders must mark their assets to the marketplace. It’s like you having to appraise your home everyday and, if your neighbor was under duress because she got very ill, divorced, lost her job and was forced to sell her home quickly, she may have sold it super cheap. Now, does that mean your house is worth that super cheap price, too? Clearly not. Why? Because you are not under duress. You have the time to sell your home and get a more normal price, which more accurately reflects true market conditions. But “mark to market” does not allow for this, which creates a vicious cycle.

Why is this so bad? Because, as lenders mark down their assets the amount that they have previously loaned becomes much riskier in relation to their assets. For example, say a bank has $1 million in assets and say they have $15 million in loans outstanding. Their ratio is an acceptable 15 to 1. But should they take a paper write down of $500 thousand due to “mark to market” requirements, their ratio suddenly changes to 30 to 1. This is because their assets are now only $500 thousand after taking the paper loss, while their loans outstanding are still $15 million. And at 30 to 1 this bank is viewed as a risky investment. So the stock price starts to get hit, it becomes harder to borrow, and most importantly harder to make money. The bank is then forced to sell some of its loans to reduce its ratio…at cheap prices. And this makes the vicious cycle continue.

And a quick look at the holdings of these loans show that 95% are problem free. Additionally, the Credit Default Swaps (CDS) that are used with the pools of mortgages are relatively safe. But this requires a bit of understanding. You see, when a pool of mortgage loans is put together it isn’t just A paper or B paper etc. it’s everything. It’s got some A paper, B paper, C paper…and even what looks like toilet paper. An “A” investor buys the whole pool but because they are an “A” investor their safety is greater because they can avoid the first 20% (an example) of defaults. So they own the whole pool but are sheltered from the first batch of defaults, and for this they get the lowest rate of return. As you can figure from here the more risk investors want to take, the higher the return. So the investments are relatively safe, but the accounting rules currently place undue pressure on the banking institutions.

Now add to all this, the opportunistic “shorting” done on the financial stocks, much of it illegal because those shorts did not legitimately borrow shares (called naked shorting), and you exacerbate this whole problem. Thank goodness for the recent temporary ban on shorting in the financial sector. As for the plan, the government is the only one who can step in to do this. And they have to do this. And they will do this. The nauseating political posturing from both sides is just part of the process.

This is not easy to understand for the general public. In fact most politicians don’t get this either. That’s why it is a difficult yet critical bill for them to vote on.

Once this is done, it will take some time but the markets will stabilize. As for the real estate and mortgage industries, it will take a bit of time but we will make it through this. Rates will remain attractive and the influx of credit availability will help the housing market gradually improve. This ultimately will be the medicine needed to improve the situation overall.

Dean Ono
The Legacy Group

As the turmoil in the financial markets continue it creates an amazing opportunity for investors and others to be able to purchase property at significant discounts to market value.  At Real Estate Investment Firm we help our clients create long term and lasting wealth through the acquisition of distressed property at 20-40% under market value.

The difference between savers and investors

There is an important difference between people who save their money and people who invest their money. It’s leverage-the ability to do more with less. 

Old beliefs and financial habits are deeply ingrained and hard to change. Yet educated investors know how to use leverage and other people’s money to create their wealth. Savers also invest, but they invest from a saver’s point of view-mutual funds, 401(k)s, stocks and bonds. A well-informed and disciplined investor can gain much higher returns with much less risk and less money, but doing so requires financial leverage.  Most savers don’t use financial leverage. They’re more passive about borrowing. They don’t use debt to their advantage, and they don’t use it to get richer. Investors, however, use smart borrowing techniques to make their money grow faster.

What are the benefits of OPM and OPT?

Most people have the ability to apply the strategies of wealthy people by using OPM-other people’s money. Using OPM is a solid path to creating long-term wealth. As an example, banks are eager to lend money for smart real estate investments. It’s a win-win situation: banks earn money by lending money, and you earn it by purchasing properties below market value and having your real estate appreciate. 

In contrast, most bankers will not lend money to buy mutual funds. Why? Apparently bankers think that mutual funds are too risky and that real estate is a safer investment. 

It’s also wise to use OPT-other people’s time. This is a very important factor in effectively using leverage. Engaging professional assistance can help you gain more knowledge about leverage and become more astute about how you invest your money. It also enables you to save your valuable time and enjoy it with family and friends. 

Retirement is easier for investors than it is for savers 

With so much opportunity to become financially secure, why do so many people continue to do nothing?  Simply put, it is because of fear. Fear that mortgage interest is a bad investment, fear that equity pulled from a home will be lost in risky investments, fear that a home could be lost, even fear that we lack self-control and would waste available money on unnecessary luxury items.

The irony of this is that continuing to maintain large equity positions in our homes can be extremely risky. The risk of losses from unexpected life changes, housing market drops, even natural disasters, are increased when too much of our cash is buried in a single asset-our home.

For more information on leverage and how you can use it to your advantage contact us.

Zach Anderson

Cobalt Financial Services

425-828-2651

zacha@cobaltfs.com

Thanks for coming back the final segment of Scott Linson’s wonderful real estate investment advice at Real Estate Investment Firm‘s recent educational meeting for our investors about property valuation.  Let’s talk about how property appraisals work–your own version, as well as those by professional appraisers. 

When it comes to your property’s appraisal, it’s important to understand the components used by professional appraisers to arrive at their numbers.  As Scott commented, “Comps don’t lie”, which means that comparing other houses in your property’s area of similar size, market value, etc., is a useful tool to finding out what your home is worth.  There are several approaches that can be used for property appraisals.

• Cost Approach–this is what the property would cost if it were totally destroyed, which means an itemized list and cost rundown of what it would cost (with today’s construction prices) to rebuild the structure exactly as it was prior to the hypothetical catastrophic event.  This technique is used primarily for insurance purposes.  Just remember that the insurance is not basing your home’s full appraisal value on its potential or its special features–the home’s value is based on zoning.  Some real estate agents will try to sell you on a property’s potential, so just keep your eyes open.
• Income Approach–the income potential of the property in today’s rental market, multiplied by the Gross Rent Multiplier for that area (Seattle’s rent is higher than Lynnwood’s, so its Gross Rent Multipliers are not the same).  The problem is that it’s difficult to find rental info, because currently, there’s no database of house rents available.
• Sales Comparison Approach–mostly used by real estate agents, this evaluation has the most weight in determining the property’s value when the bank is reviewing your loan.  This is also referred to as the “Sales-Paired Comparison” (or “comp”), where they compare three homes that sold with a certain feature and three homes that sold without that feature.

When your property is being appraised, keep in mind that the appraiser’s scope of work (or job) is to validate the sale price for whoever hired him or her.  If the appraiser is working for the bank, he or she will make it a priority to submit an appraisal that validates the price that the bank wants to see.  However, if the appraiser is working for you and you’re trying to sell a property, your appraiser’s scope of work is to prepare an appraisal that gives you the highest sale price.  Scope of work is influenced by several factors.

• Refinancing–Full Market Value
• Purchases–Purchase Price
• Building Specifications (for future value)
• Fair Market Value (FMV vs. ARV–Full Market Value vs. After-Repair Value)
• Unique Properties (water frontage, land, workshops, barns, etc.)

When doing the comps (again, remember that just means “comparable properties”), a minimum of three different ones are needed, but ideally, you should have 5-7 comparables, in case of possible bank disputes.  Any home worth over $400,000 gets sent to the bank’s own review appraiser, and his/her job is to state that the initial appraisal was incorrect.  However, a good appraiser can appeal the bank’s review appraiser’s decision, which is why those 5-7 comps come in handy.  Criteria for the comps are as follows:

• Radius (distance from subject–another term for your property; radius will depend on the home density in the area)
  • The search can be expanded outside your area to nearby areas as long as properties of lower value are used as comps
• Land Use (must be the same)
• Transfer Date (the date a property was last sold–should be six months to a year)
• Square Footage (needs to be within 20% of the subject property’s square footage)
• Style of Construction (must be comparable)
  • One Story with Basement, Split Entry, and Tri-Level (Tri-Level is worth the most of these 3 because it has more square feet above ground)
  • Ramblers
  • 1.5 to 2 Stories
• Year Built
  • Must be within 10 years and its effective age is half the physical age or the last remodel date, because it’s assumed that you took care of the property during the time you owned it
• Sales-Paired Comparisons (view properties, unique attributes)
• Exceptions (some of the appraisal rules go out the window on these)
  • Homes worth $500,000 or more
  • Sparsely populated areas (the further out you go in location from the subject property, the closer of a match the comp properties should be to the subject property, for other details like Year Built, etc.)

Part of determining the value of your property is based on its additional features and upgrades, as well as extenuating circumstances.  Additionally, another aspect used for evaluating your property involves two types of assessment–potential assessment vs. risk assessment.  Potential assessment refers to the property’s potential to make you money.  Risk assessment means what would happen if you couldn’t sell the property for the amount you were hoping for, or if your repairs ended up costing you too much money.  This is important to keep in mind, because while repairs and remodel are a good thing and can increase your property’s value, just remember that you’ll never get your property counted as if it were a new construction, although you can really impress your appraiser, since appraisals do have a subjective element.  Also, when you have repair and remodel expenses, remember that you can get better deals on your service costs based on the volume of business that you offer the service provider–for example, if you need 10 roofs done, you can get a better deal than if you just needed one done. 

In order for your property to be counted as remodeled, your appraiser needs to see updated tubs, sinks, cabinets, knobs, hinges, and even floors, unless the floors are wood and have been refinished.  You don’t need to change out all the plumbing and electrical, because it’s a subjective call–it’s about visuals for when the appraiser takes pictures.  Most of the focus of your remodel should go to the kitchen and bathroom.  You can even tell your appraiser, “I’m trying to remodel it back to its original glory”, which doesn’t always work, but if you don’t like your appraisal, you can always hire a different appraiser.  It might cost you $400 more, but it can be worth it, and in case you’re wondering, the appraiser doesn’t get paid until the home loan closes.  The final document you receive from the appraiser is about 10-12 pages long, and it will tell you what their numbers were based on.

It can sometimes help to show your own comps or your own before-and-after pictures of improvements you’ve made to your property to the appraiser, but keep in mind that banks will keep an eye out if you’ve made 10% or more on your sale, beyond what you bought the property for, because they call this “equity skimming”.  You can also give your loan officer your own comps and your own pictures, and he/she can use that with the bank to try and get you the appraisal you want.

When you do your comps, you need to factor in adjustments, as well.  If you have a 3 bedroom/1 bathroom home, for example, you can compare it with 2 bedroom/1 bathroom homes, but you can’t compare it with a home with more bedrooms or more bathrooms.  Each bedroom affects the home’s value by $1,000, each bathroom by $2,000, and the square footage price can vary based on neighborhood (also, different professional appraisers will use different prices per square foot).  Square footage prices can be from $20-40 per finished square foot, $10 per finished basement square foot, and $7 per unfinished basement square foot.  Year built/effective age is $1,000 per year, acreage is $20,000 per acre, garage is $2,500 per car, and carport is $1,500 per car.  All of your comps must be adjusted equally.

All CMAs (Competitive Market Analyses) and appraisals are based on the past.  CMAs can be a bit more current than appraisals, because they can compare sales from 3-6 months in the past, but again, that’s still looking at past sales activity. 

There are a few things to keep in mind.  There are two types of CMAs, and both have their drawbacks.  Real estate agent-generated CMAs have some caveats, and so do automated CMAs.  Be careful who you work with, because some realtors are using comps for their CMAs that aren’t actually valid–they use different styles of construction, for example, which is not correct.  The only time that this would be acceptable is if there weren’t enough comparable properties of a similar construction style, but even then, they would need to add on lower value properties instead of higher value properties to the list of comps.  Real estate agents are not typically trained to do CMAs properly, and they will also sometimes mix size (square footage).  Real estate agent-generated CMAs generally use comps up to 5 miles away from the subject property. 

Also, area takes precedence before other property details, but be careful, because automated CMAs like Zillow.com have a few drawbacks–they don’t know which areas are considered more desirable than others, they only base property values on above-ground square footage, and they don’t assess proximity to bodies of water (which matters here in the Pacific Northwest).  Automated tools do work well for places like Arizona, but this is not to say that they don’t have their uses here in the Northwest–just don’t base your property’s market value only on information from Zillow.  As a result, remember that both types of CMA are not the best source of a true evaluation of what your property’s worth, but they are helpful. 

Your goal as a real estate investor is to buy the worst property in the neighborhood, make it the best property, and then sell it.  Remember that when you buy a property, you can do a deferred deposit of interest, where you make sure that the check doesn’t get cashed until after the inspection, and here at Real Estate Investment Firm, we can negotiate with the seller if the property has any problems.  You can get out of the offer at any time–you might lose $400 for the appraisal, but it’s worth it if you would have ended up losing thousands, but REIF works with you to make sure that this won’t happen most of the time.  Don’t be afraid to write offers, because contracts are based on contingencies, so you can get out after making your offer.  The two contingencies on offers are inspection contingencies and financing contingencies. 

A final note on investing–there’s fast, and there’s good, but not both, so you either take your time, or you just run and hope for the best.  We don’t want to do just one deal with you and then you’re gone–we want to do 10 deals a year with you.  We get paid when we provide for you, and while we do charge 3%, we charge less when we provide other services for you. 

We’ll be happy to sit down with you and analyze what you can and can’t afford, and we’ll also tell you what kinds of property you can buy–basically, what’s best for you in your situation, whether it’s foreclosed properties at auction, pre-foreclosure foreclosures, or even MLS properties.  You can always check out or website first, by going to http://realestateinvestmentfirm.com; just sign up and you can look at auction properties available in King, Snohomish, Pierce, and Kitsap counties here in Washington state. 

When you show up for the auctions, if you have cash, bring it, but if not, we have loans you can get, and we always encourage you to research the properties before you buy them (and we’re happy to help with that, too).

Be sure to come back next time, when we’ll talk in detail about how to invest in real estate using your IRA.

This is the continuation of sage real estate investment advice from Scott Linson at Real Estate Investment Firm’s latest educational meeting for our investors.  This time, let’s talk about how to evaluate investment properties.  It’s important to find the right value of the property you’re interested in.  Several factors should be included in this.

• Determine Your Project Budget–remember, do not overbuild the area, because if you have a property that you want to improve in order to increase its market value, you must be careful not to spend too much on upgrades, or else you’ll end up losing money. 
• Know the Immediate Market (what prices does the property’s immediate market support?)
• Foreclosure Auctions

When you start getting emotional, you have a higher chance of losing money.  After all, as an investor, your job is not to make the house perfect, but to just bring it up to a higher level of quality, and get out. 

As far as your project budget, be mindful of two things.

1. What increases your property’s market value.
2. What increases your property’s market appeal.

Obviously, you’d like to increase the home’s value if you’re interested in flipping it.  Once the repairs are complete, the home’s worth is now called “ARV”, which is “After-Repair Value”.  The whole point of flipping is to buy at the fair market value (FMV), and sell at the ARV, because it’s the difference between the two that makes you money.  However, you still must have a balance between your property’s market value (what it’s worth) and its market appeal (how much it appeals to people)–although it’s true that improving the home’s “wow” factor won’t increase its market value, it can actually make the property sell faster.  Just keep in mind the old maxim, “Buy low and sell high”, which still applies today. 

The market will eventually pay you whatever the home is worth.  Up to the first two weeks that the home is listed, you’ll have the most attention from agents and potential home buyers.  Of course, you want to make money, but if your list price is too high, nobody will come–if your list price is lower and you wait a bit longer, you might eventually end up with a bidding war later on.  Keep in mind that you don’t have to sell your property just because it’s listed–it’s only a marketing agreement.  Don’t chase the market, because when you lower the list price of your home, people will wonder what’s wrong with the property.  As far as buying a property, remind yourself that $20K in the bank is still worth more than $30K that you might be able to get from the property you’re buying. 

It’s important for investors to understand the factors that tell us the home’s value.  They are as follows…

• Tax Assessments (from the government)
• Appraisals (from professional appraisers)
• Competitive Market Analyses (“CMA’s”, from real estate agents)

Tax assessments are created by the government.  They are usually about 20% below market value for the suburbs, and 40% for cities like Seattle.  To arrive at the tax assessment, the assessors evaluate the home based on mass appraisal technique (2 years’ of sales data for that area), areas (over 65 areas in King County alone), frequency, weaknesses, and disputes.  There’s actually a 50% “win” rate on property owners’ disputes, but it’s a 6-12 month process.  However, when you buy below the tax-assessed value, you just need to show proof of this to the government, and they will immediately change the tax-assessed value to what you actually paid.  Of course, if you’re able to buy a home for the tax-assessed value or even below (which would be lower than the market value), that’s going to make you some money–the only caveat is that as a result of the market’s “softening” (translation–the market’s still going down), the difference between the asking price and the tax-assessed value is getting closer, which means you might end up making less.  Allegedly, the market will improve in 2010, so there may be some properties in your portfolio, or that you’re considering buying, that you may want to hold until then, just so that they can appreciate in value.  However, don’t bank only on potential appreciation of a property–that’s speculation, and it’s not actually investing. 

In general, Scott recommends October/November/December as the best time to buy property, because you can fix it up and then sell it in March.  Keep your eye out for snowflakes–buy those auction properties when it’s snowing, because that’s when nobody else is bidding on them.  Also, you can call the bank that owns the foreclosed property on December 1st, make them an offer, and you have a very good chance of successfully buying form them.  Scott doesn’t recommend buying property in the summer if you want a quick flip, because you may end up holding it for a longer period of time, from 9-10 months.   

Remember that now is an incredible opportunity to buy, if you know what you’re doing.  You have to know what you want to do, and how you’re going to do it, so you need to educate yourself.  With that in mind, go sign up on our website at http://www.reif-wa.com, where you can view foreclosure properties to be sold at auction, short sale properties, MLS properties, etc.  Using our website, you can view the tax value vs. the list price, and you can also set filters so that you’ll only see details of properties that match your interests.  More importantly, you can analyze the deal for yourself, without any other investors seeing your details.  If you feel like you need some assistance, click “Contact Rep”, and just let us know what type of analysis you’d like for the property you’re interested in.

Here at REIF, we love what we do, and that’s helping you invest in real estate!  Stay tuned for our next blog entry, where we’ll discuss how appraisals work.