Kyle Uchitel: Unemployment Claims, Market Not Disasters

kyle uchitel

Though investors are still waiting on a couple more pieces of the puzzle (namely the new home sales stats for August, which comes from the Census Bureau), enough of February’s real estate data has been posted over the last couple of weeks to make a meaningful assessment of the real estate market’s – housing mostly – overall health. The following is a guest post from Avky Inc co-founder and Phoenix native Kyle Uchitel.

While far from ‘great’, the gloom-and-doom chatter and worries that the “real crash is yet to come” appear to be off-base as it stands right now.

A chart of all the critical data speaks for itself…. almost. A couple of details need to be highlighted.

Kyle Uchitel Presents Unemployment Highlights

One, starts (single-family as well as multi-unit structures) are technically trending higher now. These facts are made even more amazing in that this is the time of year when starts have already tapered off.

Two, there has yet to be any heavy inflow of ‘shadow inventory’. Part of that may be simply because so-many would-be sellers still know it’s going to be very difficult to sell a house. These people are simply sitting on the sidelines. Some if the lack of inflow of inventory may stem from the fact that the phantom inventory isn’t there.

While that’s the minority opinion to be sure, these same forecasters are rightfully reminding investors they are judging facts known to be true, rather than judging facts that are only assumed to be true. In other words, there’s no real evidence that the shadow inventory is looming out there, but there is evidence that the home market is off of life support (though that’s about it).

On the flipside – and this may well be the cause of the thus-far missing phantom inventory – home prices are still dropping. This indicates a lack of demand and/or a desire to scale down home sizes. New home sales are also still trending lower, which doesn’t necessarily bode poorly for the real estate market as a whole, but does bode poorly for the construction industry. And yes, it’s in conflict with the recent upturn in building starts.

News In The Economy

The only other significant news on the economic front wasn’t even all that significant – new unemployment claims pushed higher again. The reading of 465K was above expectations, though it was not an unusual reading for the last several months. Right in the middle of the range, in fact.

Continuing claims actually sank a bit, to 4.489M. Bear in mind that the continuing claims data was from the week before initial claims numbers above are considered.

As has been the case for quite some time, this is neither bullish not bearish for stocks. This is despite much of the media’s insistence that even the slightest misstep means Armageddon is around the corner. Weak? Yes. Disastrous? No.

Kyle Uchitel is a chemical engineer and co-founder of Avky Inc. He can be reached best on Twitter at @kyleuchitel.

Minnesota Real Estate – The Quick Sale

Minnesota Real Estate – The Quick Sale

A quick sale in the state of Minnesota can get fairly involved; the seller’s bank also wants a say in things, and the buyer can treat the transaction pretty much like a typical home buying opportunity, using a realtor and receiving a loan for the property. A quick sale, however, is not all flowers and butterflies. This way of trading realty can carry some risks and should be well researched, as it is a gamble.

Minnesota: The Risks of a Quick Sale for the Buyer

The Minnesota-based buyer must put down earnest money which increasingly is not returned, even if the property is not awarded to them. Typically the only ways that earnest money can be salvaged is if the appraiser finds that the home is not worth as much as the seller claimed, or if the title to the home cannot be found. Otherwise, the money is gone forever; thus the gamble.

Another side of the gamble is whether the tenant has left the property or not. Often people facing foreclosure tend to take it out on the house when they leave. The buyer may find that appliances, wiring, etc are torn out of the building, requiring much more work up front. The upside to that situation is that if the buyer has an agent and is getting a loan such as an FHA loan, certain rights are afforded to them.

Rights of the Buyer under FHA and Other Loans

To be able to sell the home to someone with an FHA loan in the state of Minnesota, for example, the seller has to ensure that the home is livable, and the basic appliances are left for the new owner. Railings and fire exits also need to be in good condition. The FHA will send out an inspector who looks for different things than a private inspector, and often the loan is not approved until those things are fixed.

The gamble here is that the seller’s bank has no interest in meeting this code and the seller has no incentive to improve the home and likely is not in a position to do so. The buyer may need to figure out a way with the realtor to make the home meet the requirements of the loan. On the upside, many realtors will assist and help with this when the house is vacated, and some sellers are responsible enough to work on the home a bit to avoid the foreclosure by the bank.

The Waiting Game

Once the buyer puts in an offer, the gamble becomes a waiting game. The bank can accept the offer in 2 days, or up to 5 months from the offer, so the buyer cannot continue to shop for homes until the bank has returned an answer. Typically, a quick sale is held in what is called a “redemption period,” where the bank has notified the tenant of foreclosure and they have 6 months to redeem themselves. Typically the only way to do this is to sell the property, thus the quick sale has become a term in realty.

The bank may accept the offer, but typically will not pay for closing costs, like in a typical transaction. They may cover up to 3% of the sale price to go toward closing, which almost invariably means the buyer needs to come up with more money.

The Closing and Buyer’s Responsibilities

The closing is typical of any real estate closing; the buyer has had an inspection at their expense, the buyer has proof of the first year’s insurance paid, the buyer signs all the paperwork and gets the keys to the property. It is then they go to the property and find out if their gamble paid off; there really shouldn’t be any surprises, because if the tenant has destroyed things, the loan wouldn’t go through in the first place, if the buyer used an FHA loan.

The stakes get higher when other loans or cash are used for the sale. If the buyer has cash, it may be better to wait until the home goes into foreclosure and buy it for an even smaller amount. However, that carries a set of risks with it as well, especially in the state of Minnesota.

A quick sale can be a good gamble; when the risks are worth the investment, it could be a great thing. There are many variables that could increase the risks, and any first time home buyer should really use the services of an agent to advocate for them, preferably one from a different company than the seller’s agent, to avoid a conflict of interest on the agent’s part.

A good realtor will be an advocate for the buyer and also ensure that the buyer is well informed of the risks. A realtor who works for the company selling the home will be an advocate for buyer and seller, with loyalty to the seller.

Making A Profitable Real Estate Investment

Making A Profitable Real Estate Investment

Investment in real estate appears lucrative, but it needs an in-depth understanding of the realty market. A realtor will always encourage prospective investors to buy the properties that are readily available. But it is important to enter the market at the most opportune time, and buy the right location at the right price. Property investments are large-sized, illiquid in nature, and not easily reversible. Therefore, a judicious decision can payoff hugely, while a wrong decision can set back the investor badly.

Clear Goals for Investment

Before the investment exercise may commence, it is critical to have clear investment goals. It is not the kind of investment where just because there are plenty of homes for sale at low prices, so a home should be bought. A person who does not own a house of his own should ideally aim for a residential property. That serves a dual purpose of investment as well as self-use. Where as, a person who is keen on creating a regular income from real estate, should look at a commercial investment. Commercial properties tend to fetch a high return on investment in terms of rental income. Residential properties tend to appreciate more in capital value terms.

Evaluate the Realty Market Prices

It is important to assess the general economic trends, and study the forecasts of analysts regarding the real estate market prices. This is most important particularly when the property is to be purchased purely for investment purposes. When the property prices at their peak, it may not be the best time to buy for a shrewd investor. Real listings and price patterns should be analyzed to make a decision regarding the best time to enter the market.

Location, location, location

The age-old mantra of “location, location, location” still holds true as ever. Realestate is a fixed investment, in the sense that the location cannot be moved once it is made. The basic infrastructure and facilities, quality of neighborhood, availability of public transport and ease of connectivity are external factors that are not in the control of the property owner. This is equally true for commercial and residential investments. In case of built-up properties, the condition of the property should also be a key consideration while deciding on the investment.

Property Management and Maintenance Costs

Whether it is a commercial or residential property, the quality of the property management and the professionalism of the managing agency must be considered. Another crucial factor that tends to get ignored sometimes is the monthly or annual maintenance charges attached to the property. The charges must be reasonable and this point should be carefully evaluated before signing the deal.

Costs of Financing

Just getting attracted by a house for sale opportunity is not enough reason to make the investment. If the investor is going to raise finance from the market to fund the investment, the costs of financing and the terms and conditions must be evaluated judiciously. Even a good investment that will pay off in the long run may cause a loss. This is especially true if the financing is very expensive. It is also true if the investor is forced to sell the investment prematurely due to financial miscalculation.

Scrutiny of the Property Title

In case of a real commercial, residential or land investment, the property title and ownership must be scrutinized carefully. Preferably, the property documents should be reviewed by an experienced real estate attorney. The title should be absolutely clear, and if any liens are attached to it, everything should be transparent and understood before signing on the dotted line.

Property In Turkey – Understand The Basics

Property In Turkey – Understand The Basics

Turkey: Investing in Property

Turkey is quickly becoming a hot spot for quality real estate deals. With other currencies rising above the Turkish Lira, the region is seeing a lot of investments in property, especially from international clients. While there are definitely various properties in Turkey worth investing in, the challenge is finding the right property that offers complete value for the cost. If you want to ensure quality returns on your investment, you need to understand some basics before proceeding.

Lay Proper Groundwork

Before purchasing property in Turkey, it is important to do thorough research to discover information about the developers, and whether or not they are credible and trustworthy. Also look for the most lucrative regions of the country in terms of real estate. It is not wise to be hasty, as you risk losing your hard-earned cash reserves. Time spent researching critical details can save you a lot of heartache in the long run.

Consider Various Factors

Look out for places in Turkey that are showing steady growth in infrastructure and have easy accessibility. These are two important factors that contribute to increase in property prices in the long run. Investing in property in such areas will quickly prove to be worthwhile. Purchase property in a region that has easy access to all amenities and essential services. Proximity to airports and primary railroad terminals are an added bonus.

Types of Property

You should ensure that you realize the reason you are choosing to buy property in Turkey. This will help you choose the right investment option. If you are looking for property that you intend to rent out to tourists and visitors, then look for the properties that come equipped with pools, and are located in the vicinity of major tourist attractions.

Beach resorts are good investment options if you intend to come to Turkey during summers for a little bit of sun. If you want to either rent out the property or leave it locked until your next visit, a good apartment in the city is a wise choice. For people who are looking for property that they can renovate and resell, investing in some traditional homes in Turkey will reap rich rewards. You can opt for large villas that come equipped with all amenities if you intend to set base in this country.

The Search Begins

With the groundwork in place, it is now time to embark on searching for the right property. It is not possible for everybody to go to Turkey and look for proper investment options. This is where Turkey’s online real estate marketplaces come into play. There are plenty of websites that have extensive lists of various properties on sale in Turkey. Take a look at the options and decide on the one you would like.

Pay A Visit to Turkey

Once you have chosen the property you would like to invest in, the next time to pay a visit. Do not pay any money upfront before you see the property! While most websites are credible, there are a few out to make a few quick bucks and disappear into the oblivion. Inform your online agent about your interest in their property and your impending visit.

Engage Legal Representation

By this point, you have reached Turkey and have taken a look at your property. You are happy that you made the right choice. Now what? From this point, the process gets slightly complex. You will need to engage the services of a good property lawyer who can assist you with the process of buying property in line with legal requirements. While some people prefer to go with the lawyer recommended by their agent, it is always better to opt for an independent legal representative. The lawyer will take a look at the legal paperwork for the property and stay with you until you get the title transferred to your name.

Irrespective of if you want to purchase villas in Turkey or any other type of property in Turkey, ensure you follow all these steps to safeguard your investment and make it worthwhile.

Texas Foreclosure Resources and Information

Texas Foreclosure Resources and Information

Staying on top of the latest Texas foreclosure news and market conditions can be a daunting task. Here are some ideas of some quality resources that will provide you with up to the minute news on Texas foreclosures.

Visit State-Sponsored Websites

There are several state sponsored websites that detail the latest news associated with foreclosures within the state of Texas. These websites provide people the latest information on legislative changes and other policies that effect the foreclosure process within the state.

The Texas Department of Housing and Community Affairs offers information on their foreclosure task force. This foreclosure task force releases news and other information for homeowners trying to stave off foreclosure and stay in their home. The Texas Attorney General is another quality resource for finding out news and information.

Read Local Newspapers

Another great resource when looking for Texas foreclosure news is to read newspapers found throughout the state. There are several newspapers that are popular including The Dallas Morning News and Houston Chronicle. Be sure to check out the “Business” or “Local” section of these newspapers. You can also check out the “Real Estate Section.”

Read Websites Dedicated to Texas News

In a world that is completely connected, another great resource for gaining info on the latest Texas foreclosure news, are websites that cover the news around the state. MyDallas is a quality resource, as is the website TexasOnline. Also, both of these websites cover the housing market in detail within the state of Texas.

Locate Realty Websites on Texas Foreclosure News

When it comes to investing in real estate, it is helpful to use real estate websites as a resource. Many real estate websites provide in depth information about the latest market trends in a given area. Both of the websites Trulia and Realty Trac are quality resources that provide, charts, graphs and hard figures about the latest foreclosure trends within the state of Texas.

Find Federal Resources that Cover News about Texas Foreclosures

The United States Department of Housing and Urban Development is a fantastic resource for Texas foreclosure news. They detail a section on their website that provides local news. The site also contains information on local Housing and Urban Development offices, common questions and much more. Also, take the time to read the United States Department of Housing and Urban Development website to stay up to date on the latest federal statutes and changes that affect the local foreclosure market within the state of Texas.