We are pleased to announce that starting in the last few months of 2008, we will be launching one of the most sophisticated and innovative real estate clubs in New Jersey.  Based out of Hoboken, the heart of the Gold Coast, we will focus on local real estate news, developments, market conditions, etc.  We will also be focusing on local and out of state investment opportunity for the novice or seasoned investor.

Our monthly meetings will be held at different locations, announced a month in advance.  We will have one keynote speaker who will provide information and tips on how to handle different aspects in the real estate industry.  Whether it be credit repair, Hoboken real estate, financing techniques, or anything else, you are promised to learn something new at every meeting we hold.

Our goal is to raise the bar in real estate education and promote good business practices to help every member continue their path to financial freedom.  Real Estate is the catalyst to wealth.  As a group, we can share our experiences and learn from your to create the strongest minds in the business. 

Leverage is key.  With your attendance and as a member of our group, we can expose and uncover deals that not one single individual can do on their own. 

Our first meeting will likely take place in November, 2008 at a location TBD.  You don’t want to miss out!

 CLICK HERE for our official website

A chart showing Freddie Mac stock values.

We all know that Fannie Mae and Freddie Mac are in some big trouble.  A loss in stock value by over 45% in less than a year is quite a sign that things are not that good for the mortgage giants, let alone this is the lowest they have been in 17 years.  To let those of you who don’t know who these entities are, Fannie and Freddie own or back over $5 trillion of mortgage loans.  Since only last summer, Fannie/Freddie lost a combined $12 billion.

Fannie Mae and Freddie Mac are virtually the only source for banks and home lenders to make their loans through.  Their ability to do so is critical to our housing market and for the sake of the U.S economy.  Some analysts say that if Fannie/Freddie took after Bear Stearns and crumbled, we would witness a housing crisis far worse than what we are seeing today.

I, however, am an optimist and I think no matter how bad it gets, Fannie and Freddie will be able to raise enough capital to stay afloat and the boost from the Fed will greatly help.  Unfortunately, it was Fannie/Freddie that is indirectly responsible for the subprime mess.  Allowing lenders to write their own guidelines, package and sell should have been thought out a little more.

CLICK HERE for our official website 

Many of you probably don’t realize that “The Golden Coast” is in…..New Jersey??  The Golden Coast consists of primarily 2 counties.  Hudson and Union County.  Most of the area borders the Hudson River and if Mickey Mantle were alive today I would say it is close enough to midtown Manhattan for him to throw a baseball at.  You can travel by PATH, NJ Transit, Bus, cab, and ferry to New York City.  Hoboken for instance is our primary market.  Many real estate professionals go into buyer acquisitions with a blind eye.  This is no walk in the park rural subdivision.  We’re talking New Jersey people.  Most of the new development that is reshaping the landscape in the area is built by purchasing real estate, destroying what is on it and building new.  You cannot get a sense of the market in condos by looking at what is next door.  You have to dig in the planning and zoning department.

On the southside of Hoboken, which is my favorite, you will find some of the country’s most unique area.  Bars, clubs, cafe’s, salons, and whatever else you could possibly need is right at your fingertips with pristine views of the Manhattan skyline, the most popular skyline in the world.  I love to look at new development out there but you have to be careful.  There is a lot to look at.  Particularly there is a condo building about a mile northwest of River St.  It offers beautiful views and phenomenal natural light.  I recently visited the building and casually spoke to residents.  I asked them if they were aware of the 19 story building that is breaking ground in the next couple of months. 

The location where this 19 story building is going will block all of the nice views on the eastern part of the building and block a lot of the natural sunlight. 

So when you are shopping in Hoboken, be sure you are with an agent that understands the market and knows the area.  Also it is important that they know what the future development options are. 

CLICK HERE for our official website 

Charlotte, North Carolina offers a variety of positive economic factors which make it one of our favorable real estate investment market.  Some recent statistics and accolades are as follows.

• Cost of living is 3% below the National Average.

• Median household income is 11.8% above the National Average.

• Real estate in Charlotte is 8.6% undervalued compared to national average.

• Ranked second in the nation for Economic Strength.

• Charlotte was ranked fifth in the nation as one of the Best Housing Markets.

• Ranked first in the nation for having the Most Educated Workforce.

  More than 80,000 people moved to the Charlotte area in 2006 alone.

• In May 2008, ranked as #1 place to live by Market-Watch.

I think I proved a point.  In Charlotte, the average sales price of a newer home is $119 per square foot.  Currently, we are able to achieve preconstruction pricing for approximately $100 per square foot which includes land acquisition. 

With Kannapolis only 15 miles away and with its plans for the state of the art $700 million BioTech Campus completed, there will plenty of opportunity for relocaters to find their new niche in today’s society.  While Mecklenburg County is one of the strongest in the Carolina’s, we anticipate strong growth for forseeable future.  Contact us for more info.

CLICK HERE for our official website 

Many speculators believe that the bottom is here and are convinced that prices are at the lowest level that they will decline to.  I have heard numerous media advertisements stating that the bottom is here and only a fool wouldn’t buy at this time.  They use the cliche, “Good investors make money in bad markets.”

Although we have seen a huge drop in values, I am wondering if, in fact, we are at the bottom.  One of my leading concerns is Fannie Mae and Freddie Mac.  Shares of the 2 mortgage giants plunged 60% just this year, according to CNN Money.  As long as Fannie and Freddie continue to raise capital, we should be ok, but the cost of raising money is getting expensive.  So I bring you some good news and bad news, with the bad news first.  The bad news is that if Fannie/Freddie cannot insure or purchase mortgages any longer, this will without question much further cripple the credit industry, far worse than what we have already seen.  The good news is that currently they are raising capital at a decent level and a government bailout is nowhere in sight, YET. 

With that said, let’s assume the worse.. Fannie/Freddie go out of business or at least come close.  This would constrict the credit markets and loans would be tougher to get than they are today, which would have an adverse affect on the housing market.  Values would slide even further than they have and what we have seen in the recent year will seem like a small hiccup in the industry.  On the flip side, as long as the two stay in business and can maintain their level of business, the housing crisis should have some hope of a sooner rather than later rebound.

CLICK HERE for our official website 

After a long awaited 7 months of “red tape” issues, the MDA is finally winding down on the first round. 

Gary Swoope of the MDA has been quoted as saying that he believes the programs following phases will come together much more rapidly.

The Mississippi Small Rental Assistance Program is a unique incentive, funded by $262 million to allow landlords of affordable rental property a massive rental subsidy on property that has a very fair “Average Market Rent” requirement that HUD has designated.

We have assisted over 30 applicants in the first round of this program and are happy to announce that those who have waited for the second round patiently shouldn’t be waiting much longer.

For a free consultation on the logistics of the program, please feel free to contact us direct. Although we have always made it a point in saying that the SRAP is NOT the only advantage in Mississippi rental property, we are finally pleased that it is in fact progressing.  Read the official media coverage here

As the Florida real estate market is just about as sellable as a deadly disease, seasoned investors are taking advantage of the massive amount of foreclosures, also known as REO’s that are so abundant.  While banks are desperate to get some capital and cash flow moving again, they are deeply discounting the notes owned by homeowners to about 30% of the purchase prices, some even better!  Some may think that you can pick up these REO’s and wholesale them or flip them for a quick profit……..Not so fast.  Unless you purchase a portfolio and achieve an even larger discount which is typically a bulk purchase bonus, your chances of wholesaling are slim at this point.  As more and more people move to FL, realtors will continue to steer them to the foreclosures offered by approved brokers on the MLS.  You may think that realtors will go for the higher dollar.  Sometimes yes, but as of today, realtors are starving, literally.  Even they are the victims of the market and are experiencing their own financial pain.  So, by offering a lower price, they can assure themselves that even if the potential buyer shops around, the selected realtor knows that they are within market with the demand from the buyer, hoping to get the buyer to contract. 

Investors with holding power are going to be the ones to succeed.  In fact, you don’t even need a whole lot of money.  Just good credit, a small down payment, and the patience to see the market turn around.  One thing I am convinced by is that SW Florida will be the first to rebound, moreso than Ocala, Miami, Ft. Lauderdale, etc….Whether you realize it or not, we are in a bad enough economy to justify the word “recession.”  Unemployment rates are climbing and employers know that they can pay less for people out of a job with the same experience.  My opinion is that income will remain historically lower than the recent years.  Home prices will need to remain affordable for years to come and the term “affordable housing” has never been so necessary.  SW Florida has waterfront property, beaches, islands, entertainment and everything else that Miami has without its glamour.  People relocating to Florida, including the baby boomers will continue to take advantage of what SW Florida has to offer, and its affordability which is back in full action where it needs to be.  That said, our economy will become stronger due to lower prices, lower rental rates, and cheaper seasonal values, this bringing in additional surges of tourists. 

As far as missing the boat, we have yet another adjustable rate boom coming up later this year and into early 2009.  You think you are missing the boat due to foreclosures being bought by numerous investors?  I don’t think so.  The opportunity will be here for the next year or so for you to start investing in the market.  We are in a sagging economy largely due to oil prices and the housing market.  Again, patience is needed, and if you can give yourself that, your are destined to succeed.

To sum it up, I have recently purchased a brand new never lived in home in Cape Coral, FL for $115,000.  It’s a 4 bed 2 bath home and over 2000 sq. ft. of living space.  I haven’t even closed on it and a property manager has a lease in place already for me at $1,000 per month.  I put 10% down which on this price is not bad, I pay all of my operating expenses and I am breaking even.  If I can do that for 5 years, I will be in good shape.  Imagine if I buy 10 of them and the market turns around by that time?  Golden opportunities are among us.  With insurance rates coming down this year, I expect next year to take in a positive cash flow on this property, and with the market seeing more and more purchases every day, I think the turnaround will be quicker than most.  The chance is here, the choice is yours.  We have a portfolio of REO’s from a well known bank, and we are also notified of their upcoming REO’s and status of foreclosure.  We can assist in working with you on expanding your portfolio with these doom and gloom, yet lucrative times. 

CLICK HERE for our official website 

I have been an advocate of the SRAP for a while.  See our website about SRAP by clicking here.  Although I never presented this as the best part of the investment, I understand certain people’s philosophies.  If you don’t qualify for Go Zone, your only other benefit would be investing for cash flow or applying AND approval for the Small Rental Assistance Program.  In addition to being a builder, I am also an investor.  I consider the SRAP as a bonus to my properties.  Will I cry if I don’t get it?  Probably not.  Would be nice to have, but I have tax liability on passive and active income that I can use the go zone for.  I would like to be completely against a SRAP contingency on my contracts, but as most builders are, I will be the one to accept this risk.I will make a deal with investors looking to buy into the SRAP program ONLY. 

If you are completely 100%, entirely, wholly, only interested if the SRAP comes thru, I will make your construction contract contingent upon approval.  You will not be held binded to the construction contract that you must use in your application unless you are approved by the MDA for the SRAP.  The one thing you will have to do is purchase your land via cash.  Can’t have a lein on it with a loan, thus, no financing allowed.  Duplex lots are only $16,000 so its not that big a deal; single family home lots are only $8,000.  The $16,000 will also be applied toward your 10% down on the construction once you are approved, if you are approved.  You can purchase the lots with your equity line on your own house or other investment property, take out of your 401k…..I don’t care how, just no subordinate lein can show like a B of A, Wachovia, etc……The MDA won’t allow financed lots.If you are rejected for any reason on the SRAP, we can put your lots in our inventory to sell to our customers building just for the Go Zone purposes which is consistent business.  The purchase price will be for what you paid for them, and no higher.  If lot value increase, then we can put on the MLS and we can look for a buyer that route so you can make a few bucks.  Worse case, if you do not get approved for the SRAP, I now have a land bank I can use for my future customers.  It is a win-win situation. 

The new rental rates allow for a much more lucrative SRAP.  For those of you familiar with the 80% and 120% AMI, the new rates are now over $1,000 for both of them.  This is a HUGE difference from the 80% or $836 max that was required only last week.  Last Thursday June 5, they made the change. The SRAP is a good incentive.  Better than the Go Zone?  I’d say not, just because the SRAP technically has not worked yet and it is a complex situation between the state, local EPA, and just a lot of red tape.  BUT…if you are only intersted in the SRAP, that is the best option for you as you will not be allowed to have the builder carry the lots for you…You will find out that you have a much better shot applying with a Warranty Deed with your name on it for the land to be built on.  That shows you are mostly committed to see this thru.  Without it, chances are, it will be difficult for you to be accepted into the SRAP. For investors looking for information, please contact us.  Please ask for Scott directly.  My associates and partners are familiar with SRAP but not as familiar with it as I am.  Look forward to your calls and e-mails.Our duplexes are $235,000 and our single family homes are $139,000 and are very large over 1400 sq. ft.  Includes land price.  100% Turn Key.  All homes meet the “suggested” flood elevations, however currently we are not in a flood zone.

CLICK HERE for our official website 

It is my opinion that the Advisory Base Flood Elevation issued by FEMA is going to be adopted by the end of this year.  My opinion is supported by the link below.  I have gone back and forth with someone regarding the urgency of ABFE and the non-issue part in regards to the insurance effects.  It is also my opinion that there is a direct reason why the Mississippi Development Authority requires strict compliance with the ABFE for any state or government sponsored assistance programs.  See SRAP.  That reason is still unknown, however, it leads me to believe that due to the fact nothing is in writing in regards to homes under the ABFE being grandfathered into the flood policies, the MDA is simply being proactive in requiring this IN THE EVENT that this may or may not happen. 

Sure there are marketers out there pitching the Small Rental Assistance Program, and yes, some were misled by their builders that their homes were good for the program.  Here we are today and there are a lot of investors upset because they are now learning that their homes may not or will likely not qualify for the SRAP due to its slab elevation above sea level not to the standards of the ABFE. 

Say what you want about the likely adoption, insurance issues or non-issues, but my model and concept will never change until something or someone proves me wrong.  I am not doing rocket science here, nor do I think I am the only builder to have this belief.  This is my concept and we will stick to it.  Our new slab built homes will be landfilled with dozens of loads of dirt and with our 95% plus on the compaction rating, we will be to the minimal height of the ABFE.  We will also be meeting the full Wind-Resistive rating offering a substantial savings on your insurance.

It is not unusual for builders with reasons to disagree with me and back their own concepts in terms of sea level elevation…..Yeah…I can accept that. 

http://www.sunherald.com/business/story/575402.html

So I am going to veer away from the real estate talk a little and vent about a problem I have in the petroleum industry.  I know and you know that this is the dagger in the heart to go in conjunction with the dragging economy.  I have been listening to a lot of conspiracy theorists and I am positive that I THINK I know what is going to happen.  We clearly have oil in the Gulf of Mexico, off the coast of Alaska, and other places.  If we could tap into that, you will see oil drop by probably $30 per barrel overnight.  Here’s my take.  Our own resources are “protected.”  We are going to see oil increase so drastically and to the point to where the activists give up and say enough is enough.  Until the activists let down their guard some, oil prices will likely not get better for a long long time, especially with Saudi Arabia just announcing that they will not increase their supply. 

Take this for what its worth but it definately makes sense.