There are several important things to note here.
I know the vid is over a year old, but rehabbers are still doing these deals, and will continue to do these types of rehabs even in "bad real estate markets".
Why?
Because a good rehab is based on sound business. Speer takes you through in the vid and points out important details on how he did the house and why certain things are important such as the kitchen and an additional bathroom. But that's not the main thrust here.

What's important is that Speer paid close attention to real estate investing Rule #1. Buy the worst house in the best neighborhood.

I can testify that Sylvan Park was an excellent place to invest because about half of our properties are located there, near Speer's rehab, in fact.

It's excellent because of- LOCATION.
That's because it's near Vanderbilt University, one of the best schools in the country, which brings in lots of new buyers and tenants. Vanderbilt is one of the biggest employers in the state and is close to a lot of the action going into downtown. 

And it passes the Starbuck's test, which means you probably need to move on now to greener pastures because the area is getting too good.  Once the coffee houses start to appear, the neighborhood is getting sophisticated enough to bring in high prices for selling-not buying.

Before I give my ten-cent’s worth of advice on selling your home in this market, let me begin by saying “I don’t recommend selling in this market unless it is a must.” This is the most honest and best advice I can give you. Unfortunately, some people are forced to sell and there is nothing to do other than sell. If this is your situation, keep reading.

As simple as this tip sounds, it is the hardest pill to swallow. The best thing to do when selling your home in a down market is pricing it competitively! Pricing, pricing, pricing! Of all the Homes for Sale in Pasadena, your home needs to stick out and be priced better than everyone else’s. What happens if you don’t price well is that you sit on the market for a long time and the prices of homes continues to drop. Eventually you are caught chasing the market and trying to get the price you didn’t want in the first place.

As a licensed Realtor in Pasadena California I study the trends that make the housing market go up and down. When foreclosures are on the rise they make the market contract. Banks put Houses for Sale below market value and they often times sell. These cheap homes are bringing down the average market prices on homes across the city. Sure you can price your home and what you think it is worth, but even if someone writes an offer they will have a hard time getting a loan for a house that is sold for more than it is actually worth.

We are seeing similar instances with Commercial Real Estate. So, if you are looking to sell either residential or commercial real estate, make sure you price below the market! Get it sold before you sit on it too long!

Orlando Spends $6.7 Million to Save Neighborhoods Blighted by Foreclosure

Why not throw money at it?  After all, that's what the taxpayer does.  He or she helps redistribute the wealth, right?

Do city officals really want to become landlords?  Why not let the real estate investors take the risks- at a reduced price of course?  Or would that just be too easy?

Denver Unveils Foreclosure Plan

$6.1 million here. 

I especially like the quote  " The draft looks at things such as area of greatest need, use and distribution of funds, and acquisition and relocation…"

Hmmm.  According to who, I mean  to whom?

San Diego Aid Dwarfted by Foreclosure Trouble

This is the biggest pot at $9.4 million going to help distressed homeowners. 

But do I see more trouble brewing here…

"Due to largely to the plan's limited scope, some bankers, community, government officials and real estate professionals question its effectiveness"…

My question is how long will they be able to throw money at foreclosures?   

In order to make money in modular homes investing, you have to be prepared to make sometimes ridiculous offers on these homes. If your first offer isn't low enough to embarrass you, it is probably too high. This is an important thing to remember and will make you thousands of dollars.

Never buy a home that the owner doesn't have the title to. Mobile homes are generally like cars, and have titles instead of deeds. Always ask about the title and if the owner doesn't have one for the home, move on to the next prospect.

Always make sure the home can stay in the park it is currently located in. Moving mobile homes is generally too costly and time consuming in most cases. The best way to find out if the home can stay in the park is to ask the park manager.

The mobile home park manager can be a powerful ally to the mobile homes investor. If you really want to know the story behind a home, ask the park manager. Make friends with the manager by taking her out to lunch or dinner, and discussing your investing plans in the park. Without the manager's approval, doing business in the park will be nearly impossible.

Do not buy homes that have bad roofs. Mobile home roofs are often very difficult and costly to have repaired. The return on investment on a mobile home with a bad roof will be diminished greatly. Walk away from a deal like this unless the price is right.

Free homes are not always the best choice. Often a park manager will offer to give an investor a few homes in the park for free. It is in the best interest for the park to have nice homes to collect lot rent on. Be cautious because these "free" homes usually need extensive repairs that are often too costly and time consuming. Remember high repair costs diminish the return on your investment.

Try to partner up with a person that will do the mobile home repairs for you in exchange for a percentage of the profits. Usually the investor will buy the home and the materials to repair it, and the handy person will do the work and sell the home. People really like to buy homes that have been recently remodeled and repaired.

Investing in mobile homes can be very profitable when done properly. You can buy homes starting from a few hundred dollars and resell for thousands more. Many investors finance their homes for the new buyers. By doing this at even a modest interest rate you can receive income from the sale of the mobile home for many years.

According to Randall Forsyth, editor of The Baron's Online,  the real culprit for the current real estate mortgage mess are actually such prime loans as Option ARMS.

What are option ARM's?

You could kind of choose what you wanted to pay on your mortgage every month.

If you didn't want to pay on your principal or your interests, you could  simply add all of those expenses onto the end of your mortgage.

"The day of reckoning has finally arrived," Forsyth says.

Baron's projections are 29 billion in 2009 and 67 billion in 2010. 

But all this reminds me of a documentary I saw last night about The Stock Market Crash of 1929.  I was amazed at how similar it was to what we've just been through in the last few weeks.  Real estate, especially  real estate in Florida was booming, and then it went bust almost at once. 

There are plenty of lessons for us to learn.  The best place to go right now is history.  The Donald does that and if it's good enough for him, I think it will work for us. 

One thing to keep in mind.  Some people managed to make a lot of money then, and that will happen now- but you have to on top of the game.   

You can also probably think of a million other uses for this tool (I sure could have used this before vacationing in London a few years ago). Thanks to Google real estate investing just got a whole lot easier.

"The fear," she quickly told me.  "Everyone is fearful."

That's interesting because the Housing Bubble is quoting Economist Edward Leamer, director of the UCLA Anderson Forecast, who is saying pretty much the same thing.

"The news is all fear, fear, fear," he says.

I agree that everyone is scared, but I'm not  totally fearful.  I know of one man who made $4 million in the stock market legally in a few weeks recently.  I know real estate fortunes will be made in the next few years. 

(more…)

You know our modern white elephants?

Are they actually selling?

Should you buy one, even if you get the real estate bargain of the century?

"Yes, No, Maybe," as the little girl said when asked if she had taken candy out of the candy dish…

But here's the thing to really consider. If you buy a McMansion at a very good price would it be to your best interest to live in it, and then sell out later?

That's a good question because anything can change.  Perhaps the neighborhoods around the McMansion will eventually grow up to it.

And if you really want in a certain neighborhood, such as the Green Hills section of Nashville, you'd probably be wise to go ahead and buy in…

That's a tough real estate investing decision that you need to weigh your options around.

Read the Wall Street Journal's  The Stampede of White Elephants

The deal is cooking that will give about 3 million of these owners who face house foreclosures easy mortgages for about 5 years.

Translated that means about $50 billion of the $500 billion bailout will modify mortgages at 3% for the next 5 years for these folks who are in danger of losing their homes.  Forget the fact that many of them probably shouldn't have received the loans in the first place and maybe can't hold on after the 5 years are up. But maybe I'm just not senstive enough…

Of course, all of this could go down the tubes. It's not a done deal yet.

But it kind of concerns those of us who are conservative real estate investors and didn't fall for a lot of the hype during the last boom market.

That's because we understand ARM's.

We know that a "balloon payment" will happen at some point.

Apparently a lot of these distressed owners didn't know that.

So I propose that the No child Left Behind Program should teach every high school student something about mortgages and especially ARM's. Maybe we'll be able to avoid all this boiling cauldron full of distressed properties  trouble in the future. 

Read Sources: Government Prepares Loan Modification Plan

The property was the ugliest in the neighborhood.  Steve bought it for $200,000, rehabbed it and then turned it around to sell it to a law firm for $375,000.

But that's not all.

Steve did some creative deal making and got the buyer to let him buy back the vacant back portion of the property for $1. That's not a misprint.  He was able to buy the vacant back yard of the property that is zoned commercial and now he can either sell it for around $40,000 or keep it and go through the subdivision process and later sell out for possibly around $100,000.

So who says you can do good real estate deals during these times?  Real estate investors are out there making these deals happen and so can you. 

Here's today's take away advice from Steve about negotiating and I have always heard this same advice from my Dad, a 51-year real estate investor veteran:  When "they" ask for something, you ask for something back." 

In Steve's case, it was the vacant lot for $1.

It's really that simple.