When should I buy Real Estate?

Consider this, when you finally read in the New York Times Real Estate section that the decline in housing prices has come to an end, you missed your opportunity to capitalize on the currently depressed Real Estate market. Waiting to read about the bottom of the real estate market just won't work. Wealth in America is created by taking risk, now may just be that time in the real estate market, The time to capitalize on a depressed real estate market its know. Consider the Foreclosure ippoertiunities presenting themselves today.

Writing in the current (Febr. 25th) issue of TIME Magazine writer and financial analyst Dan Kadlec makes the case for buying now in this apparently declining real estate market. And this isn't just a recap. of the "contrarian" strategy of buying when everyone else is selling. Kadlec runs the numbers to make his case.

His example of why to buy in a declining market makes his view even more interesting for us in the Chicago area market. In essence, he 'runs the numbers' - You put 20% down on a $218K house now, borrowing at 5 1/2% will cost $994 per month; or wait for a price drop 12 months from now and pay only $197K... So, you 'saved money'?

Well, that's not how it works in a market recovering from a housing recession. Inflation becomes a worry and interest rates go up. You might have a lower mortgage, because of the reduced purchase price, but you won't be borrowing at 5 1/2%. That 80% mortgage at, say, just 6% (still a great rate!) will cost you - guess what? - $995 per month.

And, waiting for that "opportunity" to buy at the bottom of the market may have cost another year of paying rent to your landlord. No tax benefit there.

What's more interesting for us, here in Chicago, is the fact we are not dealing with a declining market here as are many of those reading TIME Magazine across the country. Statistically Chicago, and northeastern Illinois for that matter, is not experiencing the value declines experienced elsewhere; we're holding steady.

Investors who are studying the market are buying. Particularly those who are buying to hold as investments. Call it a Window of Opportunity- A chance to not only "buy right" but also borrow at historically rock bottom rates. Doesn't get much better than that...

To read Dan Kadlec's article... (click here)

TIP for Real Estate Salespeople... Think about making this case with your customers who are 'wavering' about whether to buy now or wait for for that better deal...

An article published on the New York Real Property Law Journal by Joshua Stein gives a rundown on a New York real estate law wish list. While most of the words used to describe is mind boggling for the average Joe or Betty, here is an attempt to simplify his top 5 for the understanding and comprehension of the general public. That means you, Joe and Betty!

Yellowstone Injunctions, while this gave me an instant mental image of Yogi Bear and Ranger Smith this in reality deals with high intensity lease disputes of the commercial kind. This is a process in which tenants will use the injunction to prevent the landlord from booting them out due to a default either monetary or non monetary. It also states that this process often is on an emergency basis. While Gotham has the Bat signal New York has the Yellowstone Injunction.

Single Purpose Entities according to securitization and rating agencies are BAD, BAD, BAD, well they used the term unreliable actually. So these single entities met their downfall while Delaware entities rose to the top. Mr. Stein explains that whatever problem these rating and securitization entities have deemed has problems can actually be solved by the New York legislation without having these entities be sucked into Delaware nether regions. Meaning, there’s hope yet.

Mortgage Consolidation, various documents such as assignments, consolidations, spreaders, etc are available for the purpose of mitigating and recording consolidation taxes and such. What a waste of paper really, it makes sense how Mr. Stein suggests that one single affidavit is enough to cover all these other paperwork’s.

Revolving loans is believed to be just one of the problems the Legislature can solve. The imposition of mortgage recording that prohibits New York real property from securing such loans is something the author believes should be easily solved by the Legislature.

Lien Law is not a Chinese dish I’m sorry to say. It is the law that governs construction loans and mechanics’ liens which are believed to be too complex and unnecessary. Hopefully this short tryst has introduced a simpler concept.

Hope this helped to simplify some of these concepts of New York Real Estate Law. Please Stop by Chicago Illinois Foreclosure Urban Rehabber Program