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24

Jun

2008

Three Great Tips On Buying A Foreclosed Home

Posted by bpaul as Real Estate

Meet the latest desperate home seller…The Bank. According to RealtyTrac, lenders repossessed 197,800 homes in the first four months of 2008 vs. 90,800 in that period last year.

Banks don’t want to be in the real estate business, so sometimes they’ll accept much less than you might think to get the darn things off their books - especially in markets having lots of trouble. But buying such properties has drawbacks.

Here’s what you need to know.

1. Use the Web

Websites can help you find foreclosed homes. On Redfin.com, you can do a free search for so-called real estate owned (REO) properties - those for which the bank holds the deed - in Baltimore, Boston, Los Angeles, San Diego, San Francisco, Seattle and Washington, D.C. (and soon, Chicago).

Or you can locate them nationwide on Foreclosures.com or RealtyTrac.com for a subscription fee of $49.95 a month.

2. Use a broker

Forget buying directly from the bank (lenders typically deal only with pros) or at auction (you may wind up bidding more than you should).Work with brokers; banks use them to sell most homes. Once you’ve identified which properties are REO, you’ll know those are the ones for which a low-ball offer is more likely to be accepted.

3. Watch out for repair costs.

Look for houses that have been on the market for more than 90 days and offer. Bank-owned houses typically need a lot of work: People facing foreclosure often neglect maintenance and may have swiped fixtures and appliances on their way out.

Never buy an REO property without an inspection, and be sure to factor repair and remodeling work into your offering price. According to a recent survey by Remodeling Online, replacing a bathroom alone costs nearly $16,000, on average.

To view entire article go to CNN/Money

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22

Jun

2008

7 Fool Proof Rules For New Investors

Posted by bpaul as Investments

This post is for all my new investors or any personal investors who needs to take a step back before they lose their shirt with investing in stocks. Over the next few days I will provide you with 7 rules of investing that will keep you out of harms way. Keep these 7 rules within close reach and you will most likely avoid many of the common mistakes all newbie in investing trip themselves up on.

Rule 7- Embrace Diversity: Take a lesson from the recent Bear Sterns crash. A tragically large number of Bear Sterns employees, who were guilty of nothing, other than trust had sunk away the entire or most of their portfolio with the company. Many times this strategy works, and many employees in the past went on to take on an early retirement.

However, companies do fall and crash at times. Can anyone say Enron!! Before their 2001 crash, they claimed they were the “greatest company in the world”. A few months a later major accounting irregularities are reported about the company and all hell breaks loose. The stock plummets, everyone at the top bails, and the only one left stranded were the 1000 or so employees who invested their entire life savings into this so called great company.

I say this to say regardless of how confident or knowledgeable you are in one particular stock, you should always have protection. You protect yourself by diversifying your money throughout different investment vehicles(stocks, mutual funds, real estate, bonds, cash).

Many newbie investors think diversifying only guarantees little returns. They look at diversification as comprosing, and more of a defensive stance. That maybe true but stocks rise and fall at different times, all the time. So it is better to have your investments spread out between two of three solid companies instead of one. Also diversifying your portfolio within two or three financial sectors is also a good thing.

One thing is for sure and that is change is a constant thing in life, especially in the financial industry. There will always be forces or changes that are beyond your control. So prepare yourself and start diversifying.

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