Tag Archives: South Salem NY

Real Estate Q&A: Lessons Learned | South Salem Realtor

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Each month, San Diego State University lecturer and Zillow Blog contributor Leonard Baron will answer two questions from readers regarding buying, selling and investing. Have a question? Send it to Leonard@ProfessorBaron.com

Real estate lessons learned

Hi Professor — I enjoy reading the guidance you give in your Zillow blog and writings. I’m just getting started in learning about real estate investing, and I wanted to know more specifics about some of those “hard lessons” you’ve learned. Andrea R., Des Moines, IA

Hi Andrea — Oh there have been so many! Real estate is truly a business that we learn as we go. Where do I start? None of these will I ever do again:

  • Fixer-uppers: It seems like it will be fun and profitable to buy a fixer-upper and fix it up! It’s not. There are too many buyers chasing these, so the prices get pushed above what they are worth. Plus it always costs a lot more to renovate and takes a lot longer than you anticipate. Plus you have to pay for all the cost overruns right out of your own pocket. Some people can make these work, but I suggest leaving the fixers to the contractors who are skilled and in the business of renovating properties.
  • Prize, negative cash flow properties: I own a really nice beach property that I bought 10 years ago. I didn’t know that rents in prize areas are way too low for the prices the properties command. I’m just breaking even — almost — on the rent, less expenses, after a decade. Moderately priced properties can be cash-flow positive from year one. Buy those!
  • Vacation rentals: These are the worst. You’ll hear people say the monthly income pays the entire year’s mortgage, which may be true. The problem is there are all kinds of other expenses, and those expenses as a portion of rental income can approach 80 percent, just like a hotel. A normal rental property is typically 35-40 percent.
  • Land investment: Land is 100 percent speculative. Buy assets that pay rental income, dividends or interest, and skip assets where you don’t get some cash return back along the way.

Ask me again in a few months, and I’ll throw more mistakes onto the above list!

Selling one property to buy another

Hi Leonard — I am thinking about selling an investment property I have to buy another. The current one is a good property, pays me nice cash flow, has plenty of equity and has done well for me. But I want to sell and buy something bigger. Can I do a 1031 exchange. Bob M., Los Angeles.

Yes Bob, you can. But I’m wondering why you would. If you have a great property, that you know well, and it’s doing well, keep it! If you sell, even if you do a 1031 tax-deferred exchange, you’ll spend about 10 percent of the property value in transaction costs, so that equity is wiped out. Keep it! If you want to buy more real estate, find out about a cash-out refinancing on the existing one so you can add another property to your portfolio while keeping the great one you have.

Also, 1031 exchanges are complicated, and you have to be on tight timing. I’ve seen many people sell one property and rush to buy another one — even though it’s a really bad property — because that is the only one they can purchase in the IRS-allowed time frame, and their only goal is to avoid paying taxes. So they sell a good property to buy a real dog.

To summarize, if you have a good property, keep it!

via zillow.com

South Salem 2012 sales rise 23.5% – Prices down 2.6% | RobReportBlog

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South Salem 2012 sales rise 23.5% – Prices down 2.6%  | RobReportBlog

South Salem NY Sales
2012 2011
63Sales5123.50%UP
$575,000.00Median Price$590,822.002.60%DOWN
$185,000.00Low Price$191,000.00
$1,557,000.00High Price$2,000,000.00
2842Ave. Size2583
$232.00Ave. Price/foot$234.00
235Ave. DOM198
93.66%Ave. Sold/Ask94.45%
$652,715.00Ave. Sold Price$590,821.00
via trulia.com

Mortgage-Bond Yields Soar to Highest in Four Months on QE Doubt | South Salem NY Real Estate

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Yields on mortgage securities that guide U.S. home-loan rates jumped to the highest in almost four months as the minutes of a Federal Reserve meeting signaled the central bank’s bond buying may end this year.

A Bloomberg index of yields on Fannie Mae-guaranteed mortgage bonds trading closest to face value rose 0.07 percentage point to 2.34 percent as of 3 p.m. in New York, the highest since Sept. 12. That was the day before the central bank announced plans to add $40 billion more of government-backed home-loan securities to its balance sheet each month.

Fed policy makers said they will probably end their purchases of the debt and $45 billion of Treasuries each month sometime in 2013, with Federal Open Market Committee members divided between a mid- or end-of-year finish, according to the record of its Dec. 11-12 gathering released today in Washington. That assessment of its so-called quantitative easing, or QE, program was a “big surprise” to the bond market, according to Jim Vogel, a debt analyst at FTN Financial in Memphis, Tennessee

Higher bond yields “point to the Fed’s very real QE dilemma,” Vogel said in a note to clients. “When it signals an end to QE, higher rates could endanger the very recovery that is improving the labor market conditions. Look no further than how many bullish economic forecasts for 2013 lead with a better housing market.”

Yields on the Fannie Mae bonds widened about 0.03 percentage point relative to an average of five- and 10-year Treasury rates, to 0.99 percentage point, according to data compiled by Bloomberg. That’s 0.01 percentage point less than the average during the past three months, and up from a record low of 0.55 percentage point on Sept. 25.

The Fed minutes were “somewhat bearish” for spreads and an end to its buying in the third quarter may mean they “find a floor at current levels,” Nomura Securities International analysts led by Ohmsatya Ravi wrote in a note. “Most” traders and investors had been “expecting the Fed’s purchase program to continue at least until the end of 2013,” they said.

via bloomberg.com

Pragmatism may kill massive foreclosure review process | South Salem Real Estate

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It seems regulators and policymakers who want banks to pay for the foreclosure crisis just can’t make up their minds as to how they plan to do so.

Now we know that federal regulators are possibly scrapping plans to review thousands of foreclosure cases for errors and instead focusing on another $10 billion settlement with the big banks that will in turn create funds for hurt homeowners. (News of the pending settlement, the second involving so-called ‘robo-signing’ abuses, originally broke in The New York Times over the weekend.)

So what is the reason for this game-changing plan?

As the Wall Street Journal uncomfortably points out, the foreclosure review process is “too expensive” and “not delivering enough assistance.” And, apparently, both financial firms and their regulators reached this conclusion after sifting through an initial set of reviews.

As to why there may have been a push for a new settlement instead of more reviews, Edward Kramer, EVP of regulatory affairs at Wolters Kluwer, suggested it may simply be a lean towards what’s more pragmatic.

“As far as the review, the review is supposed to cost so much per loan,” he said. “You look at how many loans you have to do, how long it is going to take, and the OCC and other regulators are not happy with the results of the reviews.”

From a financial standpoint, Kramer says it’s likely the parties eventually concluded it would be better to obtain another $10 billion in settlement funds to assist homeowners rather than “paying all of these people to review the loans.”

He added, “Maybe the decision was made that [a settlement] is a more equitable way to accomplish this.”

Either way, the quick-changing regulatory landscape is enough to give a person whiplash.

via housingwire.com

South Salem NY Homes | Qualified mortgage rule may come in early January

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Mortgage lenders and servicers are preparing for an “unprecedented” period in January when they will be forced to analyze some of the Consumer Financial Protection Bureau’s final lending, servicing and appraisal rules scheduled for release next month.

The rules do not take effect immediately, but will set in motion a yearlong frenzy as servicers and lenders analyze the guidelines, revamp their tech and regulatory strategies and, in some cases, change their product offerings to stave off litigation risks.

Richard Andreano Jr., a partner at Ballard Spahr, says the most watched of those rules – the qualified mortgage rule that defines guidelines for determining a borrower’s ability-to-repay a mortgage – could come as early as Jan. 9.

The Jan. 9th date emerged as a possible drop-date for the final QM rule since the CFPB scheduled public hearings to collect feedback on Jan. 10 and Jan. 17, according to Andreano. Nothing has been officially confirmed by the CFPB, but the scheduling of those hearings is a suggestion the rules will be released right before the feedback sessions.

The month of January will bring final CFPB rules on ability-to-repay (qualified mortgage), loan originator compensation, servicing practices, appraisals, high-cost mortgages and escrow issues, Andreano said.

But the ability-to-repay rule is getting the most attention with it having the potential to change the product offerings of some lenders, especially smaller players in the market, Andreano told HousingWire. The effects of the rule hinge on how broadly or narrowly a qualified mortgage is defined.

“Overall, I don’t think there has ever been a period of time where an industry has had to implement so many wide-reaching changes,” Andreano said. “The interesting thing is going to be what is the mortgage marketplace going to look like after this in terms of who is still in the marketplace making mortgage loans.”

Andreano added, “Because of the amount of increased complexities, a lot of small banks were rethinking whether they want to be in the mortgage business.” He says after the final rules are released, the effects on small banks will be watched closely.

Andreano believes the rules may be released as “interim final rules,” leaving the CFPB open to make additional changes. And while the rules will be released in January, the CFPB can allow for lengthy implementation periods, Andreano said.

“In talking with some of the supervisory folks over there (CFPB), they were well aware of the fact that it’s going to be typically burdensome on the industry, and they are not going to flip the switch and implement everything.”

via housingwire.com

3 Key Google Analytics for a Successful Blog in 2013 | South Salem NY Homes

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When I set business goals, I always try and make them data-based. I believe I have pretty good instincts, but I trust data. Numbers give me direct feedback on the effectiveness of my tactics.  So, when it comes to my blog, one of the places I look for feedback is Google Analytics.  There is a wealth of information there, so I am looking for specific analytics that match my goals. Here are three key stats I am following.

1. Traffic Source: Referral Trafpic of 2013fic

Bloggers want to be read, want to be seen, and want to drive people to their website. For those of us whose websites showcase our blogs, getting more people to the website is key. Even though guest posting and syndication are great exposure, they don’t necessarily get people to my website.  Succinct calls to actions in a guest blog post (link to another related article on your website) can help, but nothing beats direct traffic.

Where is my traffic coming from? For me, it’s Twitter first at 42 percent, and then it drops off drastically to a number of sources under ten percent with LinkedIn high on the list and Google lower. So, I continue to strengthen my Twitter presence. One way is leaving my Twitter footprint on the web wherever I go, like commenting on other blog pieces using my Twitter login. Also, I will be using LinkedIn and Google+ more this year to promote my blog. But that low Google referral number is troubling to me, which leads to my second stat.

2. Keywords

I admit that I have neglected keywords in the past—mostly due to a misunderstanding of how they are used. Last summer I hired a web developer to redesign my website and part of the redesign was an in-depth lesson in SEO. Now, I have five checkpoints for every blog piece that help insure that I am taking full advantage of good search practices. The developer installed a handy application on my WordPress dashboard called Yoast that helps me “check off” SEO priorities before I post. The biggest change: blog titles. I paid absolutely zero attention the SEO value of blog titles in the past—now I know better.

3. Page Goals

This is my project for early 2013. My blog doubles as my website. In order to get people past the initial blog entry to my business pages, I am devising strategies to get more visitors to click through to a business page.  One way to help measure their effectiveness and then tweak the strategies is to set up custom page goals.  Also, page goals will help me measure landing page effectiveness like free download offers, referral traffic from LinkedIn offers, and newsletter sign-ups.  This is new terrain for me, but I need to be more strategic in measuring returns on my efforts.

What analytics do you use to measure success on your blog or website? I’m interested in getting your ideas and input in the comments.

via socialmediatoday.com