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NARPM® (National Association of Residential Property Managers) is holding a Broker/Owner Conference.
Thank you for reviewing this important message from our sponsor.
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NARPM® (National Association of Residential Property Managers) is holding a Broker/Owner Conference.
NARPM® is the professional, educational, and ethical leader for the residential property management industry. We are an association designed for real estate professionals who know first-hand the unique challenges of managing single-family and small residential properties.
NARPM® offers an effective, professional learning environment for owners of property management companies and their employees.
The NARPM® Broker/Owner Conference is one of our many upcoming events. It is intended for Owners and/or Managing Brokers of Property Management Companies. Sensitive topics will be discussed including employment issues, technology innovations, and company structure.
Dates: February 19-20, 2013
Location: Monte Carlo Resort & Casino, Las Vegas, NV
You do not have to be a NARPM® member to attend.
Visit http://www.narpm.org/conferences/brokerowner/
to sign up for this conference.
For more information about NARPM® events and membership, please visit: http://www.narpm.org
The Real Estate Indicator Is Screaming “Buy”
I just locked down a 2.875% interest rate, fixed for the 15-year term of the mortgage. No points. With rates like these, I find myself rethinking the idea that I want to pay off my mortgage.
I can do a lot better than 2.875% investing the money. If I just sock it away in gold, I bet I’ll come out way ahead. Finding investments that clear such a low hurdle is not that difficult.
Right now is a great time to do this, if looked at from a historical perspective. The 10-year Treasury rate is 1.64% as I write. That is what investors are willing to accept to lend money to the US Treasury for a 10-year term. It seems absolutely crazy. But the Treasury rate we see is something of a forced smile.
The US Federal Reserve, as you know, pledges to keep rates low. So interest rates — probably the most important prices in the whole constellation of prices — are essentially the victim of price fixing. This will have sickening consequences down the road for the US economy, the stock market, the US dollar and more. But for now, it is a license to print money by borrowing cheaply and investing in rental property.
To see why, you have to understand that Treasury rates are the platforms on which borrowing rates stand. I was a banker before I started writing newsletters. I remember following the “Treasury curve” (all the Treasury rates for different terms) with great interest because we priced our loans off Treasury rates. So if I were in banking today, I might quote a rate of 250 basis points over the 10-year Treasury rate. That would be 1.64% plus 2.50%, for a rate of 4.14%. The rate would change as the Treasury rate changed, or until locked in.
So that’s why Treasury rates are so important. Now let’s look at cap rates.
A cap rate is a real estate term you should know. It’s easy and intuitive to understand. It is basically the return you earn as an owner in the property. So if you buy a property for a million bucks and it generates $100,000 in profits for you after expenses, then the property has a 10% cap rate. (The $100,000 divided by your $1 million purchase price.)
The cap rates available in real estate are attractive when viewed against the 10-year Treasury yield. A wider spread between the two means you can earn a wider profit margin. As you can see in the chart below, the post-2008 spread is the widest it’s been since the great 2002 bottom.
So this idea — as with almost all investment ideas — has a limited window of opportunity. When the low interest rate party starts to get into the wee hours and the barmen look ready to make a last call, we’ll have to diligently step for the exit to beat the rush. That won’t happen until at least 2014.
Another caveat to my bullish real estate call is that you have to be a little picky. Not everything is cheap. Already, some of the best properties in the biggest cities are at full price. You get much better value if you look at secondary cities.
As I’ve noted before, the opportunity in real estate is especially attractive because there is still a lot of debt coming due. Including 2012, and through 2016, there is $1.7 trillion in commercial real estate debt coming due. (In Europe, there is nearly a trillion dollars of debt maturing in just the next three years.) Borrowers will have to refinance that pile. They will likely have to put cash in the deal — or sell. The latter creates great opportunities for real estate investors.
My own 2.875% mortgage reminded me of the advantages afforded those with good credit and their ability to borrow at super-attractive rates. The same is true in the corporate world. Now is the best time to use these advantages in real estate investing since 2002.
This article post was provided courtesy of Marco Santarelli with Norada Real Estate Investments (www.NoradaRealEstate.com)
Norada Real Estate Investments helps take the guesswork out of real estate investing. By researching top real estate growth markets and structuring complete turn-key real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Streamline Your Real Estate Transactions.
Are you still printing out, manually signing, and scanning/faxing documents back and forth for your real estate transactions? Or are you using a combination of Docusign, Dropbox, Evernote, and email to manage your deals? If so, you’re wasting valuable time and money that could be spent on new business development and managing existing client relationships.
Reesio is a brand new, beautifully designed transaction management system that combines every step of the real estate transaction process into one beautiful flow for you and your clients. Electronically sign and share real estate documents, as well as easily manage property showings, offers, messages, and document storage all in one place.
As a Realty411 follower, we’re offering you Reesio’s awesome cloud-based product for only $29/month for the first year — that’s 40% off the regular monthly price of $49/month. And your first transaction is FREE so that you can try before you buy.
To get this special offer, create your second transaction by December 18th and use the promotion code 411DEC12 (remember, your first transaction is free and no promocode is required for that).
Solo 401k Use of Debt Financing for Real Estate Purchase
Written by guest blogger: Jeff Boyle, from Concord, California
When a Self-Directed Solo 401k uses debt financing for the purchase of real estate, whether rentals, fixer-uppers, commercial or foreign real estate, it is commonly referred to as non-recourse loan Solo 401k.
Why consider Non-Recourse Loan for Solo 401k real estate purchase?
The Solo 401k regulations do not allow for the use of Solo 401k funds as security for a personal loan nor can the Solo 401k owner loan his or her personal funds to Solo 401k. However, the Solo 401k can obtain non-recourse loan from third party such as a hard money lender or bank, e.g., North American Savings Bank. When Solo 401k obtains a non-recourse loan, the Solo 401k increases amount available for purchasing real estate. Further, since the loan is to the Solo 401k, in the event of default, the lender can only come after the real estate securing the non-recourse loan, not the other Solo 401k investments or the Solo 401k owner’s personal assets.
Because the non-recourse loan is to the Solo 401k plan instead of the Solo 401k owner, the loan qualification requirements through a bank are not the same in that the non recourse lender will NOT perform the following.
- Will not check to see if you are employed
- Will not check your income
- Will not look at your W-2’s
- Will not look at your tax returns
- Will only look at solo 401k assets not your personal assets
Lastly, not all Solo 401k plans allow for the purchase of real estate; therefore, before proceeding to open solo 401k for investing in real estate and entertain the possibility of using a non-recourse loan, make sure the Solo 401k providers plan documents allow for investing in real estate.
Long-Term Realty411 Advertiser named as "100 Most Intriguing Entrepreneurs" by Goldman Sachs
Real Wealth Network CEO recognized as one of 2012’s “100 Most Intriguing Entrepreneurs” by Goldman Sachs
Los Angeles County, CA- September 26, 2012 — Kathy Fettke, Founder and CEO of Real Wealth Network was honored as one of America’s “100 Most Intriguing Entrepreneurs” by Goldman Sachs at the 1st annual Builders and Innovator’s Summit this week at the Pelican Hill Resort in Laguna Beach.
Fettke was accompanied by world leaders such as President Bill Clinton, AOL founder Steve Case, Oracle Founder Larry Ellison, DreamWorks CEO Jeffrey Katzenberg, Ryan Seacrest, Netflix founder Reed Hastings and Goldman Sachs CEO LLoyd Blankfein.
Goldman Sachs hosted the event in an effort to help spur economic growth, jobs, and opportunities in the U.S. by encouraging innovation. Former Secretary of State Condoleezza Rice stated in her presentation that “…improving the economy is a matter of national security.”
Fettke was chosen as one of 100 honorees for her work in finding solutions to the foreclosure crisis through Real Wealth Network, an organization that educates and encourages its members to buy up and renovate distressed properties, and then offer option-to-buy leases to families who lost their homes in foreclosure.
“I saw a win/win opportunity. I could show people who lost their money in the stock market how to build it back by buying distressed assets,” Fettke stated. “Together we could clean up neighborhoods and provide much-needed rental properties to those who lost their homes, while earning more than 10% annual net returns from the monthly rental income. It just made sense.”
In order to simplify the process for the busy investor, Real Wealth Network identifies the strongest rental markets in the country and then gathers the best teams in those markets to find, renovate and manage properties as a “turn-key solution.”
Fettke is frequently featured on CNBC, CNN, ABC, CBS Market Watch, and NPR to share her knowledge and predictions of real estate and economics. She is an active real estate investor, licensed realtor, and former mortgage broker. She is also host of the Real Wealth Show on KSFO in San Francisco, which is then podcast in 27 countries.
Real Wealth Network provides on-going investor education through the podcast, radio show, webinars, events and blogs. Membership is free. www.RealWealthNetwork.com.
Media Contact: Maggie PIke, 925-280-2830, [email protected]
