Archive for March, 2013

Investment Property Opportunities For 2013

Sunday, March 31st, 2013

For a great number of property professionals, 2012 wasn’t a great year. We had arrived still on a going downhill towards the end of the real estate market. This wasn’t exciting news for all the investors seeking to make profitable deals . Speculate we move deeper into 2013, it’s becoming abundantly clear how the tide is turning. In past years, buyers were adjusting to having the initiative. The market was like a poker game together with the buyer being in possession of every one of the chips. Sellers are actually able to reclaim not simply the chips, nevertheless the pot also. We have been stepping into a seller’s market in which the seller, not the customer may have the unfair advantage. Opportunity is knocking and it’s been quite a long time since investors had the ability to capitalize on current and future market conditions.

In other words, demand and supply are creating conditions that will end up very profitable for investors. Pressure is building on the market like it could be doing inside a volcano that’s gonna erupt. This is an excellent eruption though for professionals. If the bubble finally burst in 2008, it caused unimaginable havoc within the property market. For investors, it’s like a bad nightmare which has been permanently engraved to your memory. This has been several years since “profit and real estate ” went together for your seller. But that is what exactly is happening right now. Rates have already been at a few of the lowest levels we’ve ever seen. And while they’re still minimal, it has an upward trend that’s becoming apparent. Unemployment rates have been dreadful, however they too have been improving. Whenever you take both these factors into mind, it is easy to see why interest in housing is increasing.

Homebuyers (very first time and seasoned), and also real estate investors alike consider notice in the positive signals. The economy in general can also be showing definitive indications of improvement. This can be starting a great force that can carry on and push housing prices higher. The majority of the markets nationwide are already seeing prices start to climb. This trend is only going to continue and it’ll become greater as time passes. In most sporadic markets that are inland and away from the coast, the number of homebuyers making their monthly payments to investors who may have a big stake in the property is greater. With an increase of payments arriving, there’s greater cashflow available which may quicken the speed from which you generate income and improve your business. But like every nutrients, this chance comes with a clock that’s ticking down. Once the clock runs out, of the question in making some sweet deals are going to close. Demand will eventually exceed the speed at which mortgages are increasing. This makes enterprise cashflow.

Real Estate Roller Coaster

For those looking in on the surface, the property market can seem to be crazy and unpredictable. Real estate professionals conversely realize that the market undergoes regular cycles. A few of these cycles are painful, while some can be quite rewarding, as well as lucrative. The housing industry bottomed out thrice in recent memory. It occurred in 1975, and once again seven years later in 1982. Go forward another thirteen years, and you’ll see it happen again in 1995. Whenever though, the housing sector managed to recover. Although housing industry struggled in 1975, it recovered and was a student in its peak in 1979. There is a downturn again in 1982, but we hit another high point in 1989. Just seven years ago in the year 2006, the housing marketplace climbed into a peak yet again. Fluctuations can be a regular element of the higher market.

These statistics should drive home the reality that nothing lasts forever. There are good, even great times within the housing sector. There’s also rough patches we must tread through to be able to reach greener pastures. For 2013, the situation is looking up and the economy should continue to improve. Growth will remain steady and consistent. In 2014, we might be entering another temporary recession. But in comparison with that which you just went through, it is certainly nothing to concern yourself with and small potatoes in comparison. Growth ought to get in 2015, 2016, and 2017. Whilst the opportunities are wonderful right now, they’re going to only get better during these 36 months. From then on, the economy will in all probability enter another amount of pain in 2018 and 2019. Each of these predictions relies upon the cycles that continue to exist in the housing sector.

There are occassions when every one of the news coming from the housing sector appears to be not so good news. It is a false assumption being induced by the media to get higher ratings. In fact, on the next many years, you will see great chance for real-estate pros who are action takers. People who lay on the sideline and also be undecided will pass up. But for those who play full out, the profit will be significant or substantial. Time is money and it all comes down to recognizing each of the real estate property cycles. It’s also important to realize that every seller’s market gets replaced by any market. This may cause a great deal of sense when you think about it. In the event the buyer believes the seller has the lead constantly, they don’t be motivated to get – at least not until the market shifts of their favor again. So we need to keep things in perspective. That said ,, by purchasing when prices are low, you will stand to make a nice profit as things improve and much more homebuyers enter in the market.

The Outcome of Low Interest Rates

Homebuyers are always in search of the best offer in different market. This is the rule as opposed to the exception. When interest rates are high, new or existing homebuyers will tend to stay there. Consumers who are renting will even tend to continue renting as an alternative to obtaining a home loan on the home. Once rates of interest fall however, homebuyers have a tendency to jump into the market in order to secure those lower rates. Uncertainty is probably the few concerns that may keep people from getting into a stylish housing industry. Regardless of whether rates of interest are low, if unemployment is high, along with the overall confidence in the economy is low, you’ll not see much movement. Itrrrs this that we were treated to occur in 2012. But as we still progress into 2013, the unemployment rates are falling and rates are nevertheless really low. That is assisting to decrease the uncertainty which is motivating lots of people to obtain into the housing sector. Inflation is another the answer to consider. This may all push housing prices and rates of interest higher since the economy is constantly on the improve.

The Tremendous Opportunity – Greater Cash Flow for Investors

Property would not be complete without graphs and charts to visualise your situation. The graph below from really captures the essence of what we’re telling. It shows us that in 2005, in the event the economy was chugging along very well, mortgage payments were also climbing due to housing prices having a big jump. Compared to 2007, 2008, 2009, 2010, 2011, and 2012, the housing bubble was on the point of burst and finally succeeded. This caused house values to fall in addition to home loan payments. These payments actually dipped below rent payments with an extended stretch of time. But despite all the negative conditions available in the market, investors took notice of the great possiblity to seize some of the cash flow.

Housing prices will continue to climb as the economy and housing industry both still improve. As this happens, home loan payments also need to rise in a pretty fast clip. It’s expected that they may surpass rent payments once again. This can be fantastic news for homebuyers trying to score a whole lot. For investors however, this implies earnings will begin to decline. The time is now the real deal estate professionals to get involved with the marketplace. Greater cash flow plus a housing market which will only appreciate in value are two of the biggest factors behind putting some skin amongst gamers. By investing now rather than later, your chances less difficult greater to make some very lucrative deals. One of the big influences in the foreseeable future housing market will be the middle-agers. These are the basic individuals who have money on your bottom line and are near retirement. Housing is predicted to be a attractive investment because of this particular demographic.

Home is only going to always Increase

CoreLogic released a fascinating directory February 5th. This report makes it clear that house values are already rising, not falling in the last 10 months. Because economy is constantly on the improve, there is absolutely no reason to imagine how the trend won’t continue. In case you are wondering when there is a precedent just for this, it’s the biggest increase from year to year that has occurred because the last housing peak in 2006. Home prices should continue to improve and appreciate by an additional 3% in 2013, with a 2.7% increase in 2014. The trend is our friend right now and as the bigger economy continues to grow, the local economies across the country will as well. This will bring many homeowners back into the real estate market. One of the big concerns that has been keeping people from entering is job security. Even individuals with high paying jobs in growing fields have been concerned about getting laid off. This concern will continue to dwindle as the economy gets better. Enough time has also passed for many former homeowners to have the negative information on their credit report fall off. Foreclosures and bankruptcy had a major impact on a lot of people. With time, these black marks have fallen off and their credit scores have jumped. This makes them more attractive to banks for a mortgage on a new home.

Consistent Job Growth Beyond the Recession

Looking back at the recessions throughout the course of history, one thing is for certain; after each recession, there is always an upside with the overall economy improving. Companies begin hiring again, the unemployed become employed, and the unemployment rate always falls. This is like a scene from a movie that we’ve seen many times before. Even if we do re-enter a recession, or even worse a depression, the variables that contributed to it will be much different than they are right now. With each passing year, brand new variables are being entered into the equation. If history happens to repeat itself, which it often does, the result will be different due to the new inputs being plugged into the equation.

Renting to Become Popular Again

When the economy was really struggling, both the housing and rental markets took it on the chin. The recession forced many individuals to put off their plans for the future. Marriage and having children are two big decisions that got put on the back burner for a number of people. Renting a property goes hand in hand with these two big decisions in life. Instead of finally moving out after completing college, many graduates have found themselves moving back home and living with their parents. The recession has either prevented them from starting a career in their chosen field, or is keeping them from getting a job all together. Things are improving though and as we move beyond the recession, these individuals who have been forced to live with their parents will soon find employment. This will boost the demand for rental properties over the next several years. Life should steadily get back on track for millions of people who have been struggling. This is great news for them and their parents, but even better news for real estate investors and the overall


How Real Estate Investors Can Work Smart

This is looking to be a very special year for investing in real estate. Our economy is still in recovery mode and we are nowhere near the peak of the market. This is a good thing because it means that investors have plenty of time to enjoy the market while it improves. Once it hits the anticipated peak for this cycle in several years, things will get worse and then get better once again. In the meantime, investors have a tremendous opportunity staring them in the face. Rental payments are still much lower than mortgage payments at this point in time. This is largely due to housing prices that still remain below true market value. But as the economy continues to get better, this will greatly change. That is why this is the ideal time for getting into the market. Cash flow is great and housing prices will only continue to increase. Many people are also getting ready to retire which will drive up the demand for new properties in 2013 and beyond.

Marco Santarelli is an investor, author and founder of Norada Real Estate Investments — a nationwide real estate investment firm providing in growth markets around the United States. “” was originally published on the Real Estate Investing Blog.

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A Note from our President, Aaron Vermut, as Prosper Looks to the Future

Saturday, March 30th, 2013

It’s been a little over two months since CEO, Steve Vermut and Head of Global Institutional Sales, Ron Suber, joined Prosper’s management team, and this week, I am excited to be joining them full time as President. I wanted to let our community know that we intend to use this blog as a method of communication to continuously inform both our borrowers and lenders of what we are working on here at Prosper, and of what new and exciting things are coming in the near future. It’s important to all of us

that our customers understand we are striving to make Prosper a leader in customer service and technology. With valuable feedback from our customers, we are able to deliver products and solutions that will enhance the user experience across the platform.

I want to give everyone an idea of all the exciting things the Prosper team has been working on since bringing on the new management team. In February, we focused on building and launching tools and improvements vital to the platform’s performance. Our gives lenders the tools they need to customize their Prosper experience in ways never before possible, and provides increased security and protection for our lenders. We also extended our customer service hours to provide more one-on-one support for more hours of the day.

As we come to the end March, we’re excited to report $15.1 million in loan originations, a 60% growth over February and our best month since October. We also project $25 million in new loan listings on the platform this month. In fact, at the time of this post, there are 200 new loans now available to lenders.

We have also been looking at various ways to improve our service and product offerings for our retail and institutional lenders, as well as for our borrowers. Here are some of the priority items that we’re focusing on over the next few months (in no particular order):

•   New Prosper Logo/Identity: Along with the technology enhancements to our product, on April 2nd we are launching a rebranded web experience including a new logo and identity. We have been working on this for a while and are excited about the changes. Let us know what you think.

•   Improved collectionsOver the past several months, we have focused on improving collections by increasing call intensity, and working with our delinquent borrowers to be the payment of choice during tax refund season. As a result of these changes, we have had 3 consecutive record months of collections. Moving forward, we will be adding a new collections agency and will send delinquent accounts to collections at 16 days past due rather than 31 days past due. This will enable us to expand our call coverage and skip tracing capabilities, which will provide better results for our lenders.

•   Washington State (and more)We are currently engaged in communication with the Security Division of Washington’s Department of Finance and hope to reopen the platform to Washington lenders very soon. We apologize for the inconvenience to our Washington customers – the blackout is a result of the implementation of . With this implementation, we have also added West Virginia and Michigan, and plan to have several additional states join the platform in the near future.

•   Whole LoansIn April we are launching a whole loan product in beta for our institutional lenders, which will be separate from our traditional pool of fractional loans. The beta version of this product is in test mode and we will communicate more details as they develop.

•   Additional ImprovementsSome of the many other things we are working on are a new IRA trading option on Foliofn, an increase in the loan cap on the platform to $35,000, enhancements to our Automated Quick Invest tool (AQI), and expansion to both our customer support and technology teams.

Steve, Ron and I are committed to creating a transparent relationship with our borrower and lender communities. This asset class and market place are changing rapidly. We will continue to make ourselves available to answer any questions. Please check back here regularly as I publish new posts with updates as well as gather questions and feedback from our community at large. We welcome any comments and/or questions below.

Thank you,

Aaron Vermut

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