Buying opportunities, for those looking for bargain deals, are still good and should extend well into 2010 and 2011. Housing starts according to the Commerce Dept. have come in lower than expected for 2009.

One would naturally think, as home builders attempt to reduce inventory, that home prices would stabilize. To a certain extent they have stabilized albeit temporary.

First time home buyers who have been sitting on fences, automobiles and motorbikes are now out in force trying to take advantage of the $8,000 tax credit set forth by the U.S. government. Ironically, the tax credit is due to expire on November 30'th. This small flood of home buyers has temporarily created a high demand in low to middle income housing which in turn has created more competition among investors seeking cheap deals on foreclosures and HUD homes.

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Investing in fixed secured real estate notes can yield fruitful returns often higher than mutual funds while providing security of investment only found with bonds and CD's. Conservative investors looking for stable long-term investments such as bonds, CD's or money-markets currently only receive APR rates between 2% and 4%. The inflationary period looming due to government spending, budget deficits and money printing will continue to drive these investments into the ground. A high price to pay for security of investment.

What Is A Fixed Secured Note Backed By Real Estate?

A first position high yield collateralized note much like a lean held by a mortgage lender on a piece of real estate that can be called due if the terms of the agreement are not met between lender and borrower. In this case, the note holder (i.e. private lender) would simply take control of the real estate if the terms of the loan are not met. The borrower (i.e. real estate investor) will buy a piece of real estate with the money provided by the note holder. The two parties agree on a set of terms of the note. The property is purchased and the term starts. A fixed secured note can also provide investors such as retirees tax free income by using a self-directed IRA for the source of the note. For more information on self-directed IRA's visit: http://www.trustetc.com

Terms

The terms of a fixed secured note are generally 3 to 5 years, 6% to 10% APR interest only with monthly payments. There is typically a balloon payment of the original principle payed to the note holder at the end of the term just like a CD.

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Over the past 12 months my partners and I have been buying single family home foreclosures. Homes are selling for deep discounts and providing high cash-flow rates once rented. Our strategy is not to buy and flip, but to buy, rehab then rent to provide cash-flow and capital appreciation. On the surface this may seem as easy as drinking coffee because of the high number of foreclosures available. But don't be fooled with high quantity and low prices. Buying foreclosure properties is not as easy as it may seem. Buying houses for cash has been our strategy which is one way to up your chances of success. Refer to my previous article "Buying Real Estate With All-Cash" In todays article I'll outline another strategy that when paired with all-cash works for us.

Buying homes at deep discounts for cash relieves vacancy pressure as there is no unerlying mortgage. You may still have a lean on the property held by a private lender but hopefully you have worked out the terms so that you have 60-90 days until your first interest payment. Racing out to find a tenant before your first payment is no longer a pressing issue. You can be more choosy when screening tenants. You can hold closer to your asking rent price and not decrease it just to get the property occupied. You can save money by performing more of the rehab yourself. These are just a few of the benefits.

As easy as it might seem to buy real estate at low prices, a problem has arrisen that must be addressed if we are to successfully close deals with banks. I have found, as with many of my collegues that seller real estate agents have all the control when it comes to you submitting your offer, deciphering which offers to submit, how much information they tell you ahead of time, and lets face it some blatently do nothing. As a buyer in the past I have typically used a buying real estate agent to help me track down candidate properties, perform showings and leg work. As a result I did not close many deals dispite offering near or above asking price. The reason...

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There are many risks when it comes to property investment as a business. I think sometimes people, especially investors forget the steps involved when obtaining a loan and how this process may open them up for risk. There are many concepts to understand mostly because the bottom-line is determined by capitalization (CAP) rates, return on investments (ROIs), and other net operating incomes.

It makes sense that people overlook the smallest detail when financing a property. It doesn't really matter "why" the loan is needed, if you are seeking a conventional loan from your neighborhood bank or turning to private lenders or hard money; it is still very important that you pay careful attention to the loan you are being offered. I understand you are concerned with flipping the property as quickly as possible; but in doing so you are not as attentive to the type of loan. And thus you find yourself in high-risk situation. Often times brokers may steer you into high-risk deals since they may have pegged you to be a risk-taker.

This opens you up to a different class of loan and areas of predatory lending practices which may incur high fees and other terms or conditions that are not always explained up front. Sometimes loans that allow you to flip properties are called rehab loans as they use hard money via private lenders. This not only means steeper interest rates but an area of lending that is not strictly regulated by the federal or local governments. These hard money loans only work to your benefit when they can get you out of a deal quickly. In other words, these loans only serve the lender because of the amount of leverage that increases the return.

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You are probably asking yourself, how is that going to work? And why would the local Health Department take an interest in deadbeat tenants? Why would they want to help me? But also do they have the right to intervene?

The simple answer begins with utilities. Many communities, cities and counties across the nation have rules and regulations, simply put, laws for health codes and regulations. One of which is that it is illegal for residents to live without light, water, sewer or septic turned on and working. This also may become an issue of minor endangerment if children are in the home. The local Health Department has the power to remove people from properties violating this regulation.

Ironically enough, I never really stopped to think about this option as a landlord and how this might work to my advantage when it comes to delinquent tenants. In my time, I have seen it all, heard every excuse and as a result, I feel I can put these experiences to good use and share my advice.

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When it comes to investment properties there are loopholes which create many options. For instance, Section 1031 of the IRS tax code permits real estate investors to sell their investment properties and in return allow a trade for comparable or similar matched investments in order to defer the tax as the capital gains amass. It seems that real estate is truly the most popular transaction permitted by this code. Something called the Triple Net or NNN otherwise known, as Leased Real Estate is considered appropriate as alternate property during such a transaction. What this really entails is a Net lease where a tenant foots the bill for all or most of the properties' active expenses over and above the rent. It is important that before we discuss the particulars of Net lease that we have an understanding of other kinds of leases as each serves a different purpose.

First there is the bond lease that makes the tenant completely accountable for active expenses encompassing the property's operating costs, which include regular maintenance, repairs and substitute costs for replacing materials etc. Second there is the Triple Net or NNN lease, which incurs actual restrictions on capital expenses. The tenant must pay for property expenses including tax, insurance and maintenance, as under this kind of lease, these are the tenants responsibility. Third taking from the NNN lease is the Net Net or NN lease. This is somewhat the same as NNN lease but returns the responsibility of the physical up keep of the structure to the landlord. They must make sure major items such as the roof are in good working order. Lastly the Modified Net lease infurs that the tenant pays for everything including utilities, maintenance, repairs and insurance. They do not pay property taxes.

For the NNN situation first the situation may allow less property management issues to be a problem for the investor. This is especially true for investors dealing with multi-family units, complexes considered commercial because they want the profit and income without the hard work or heartache. They also want to postpone their tax accountabilities without having to play the role of landlord 100% of the time. Savvy investors use NNN leases because they insure income but still allow for ownership to stay in their name and portfolio while maintaining a good level of capital. Another aspect of the NNN is that it also makes the transfer of real estate to beneficiaries easier.

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Lately it seems Blogging and becoming a Blogger is all the rage.  They seem to have a power all their own as blogs have been key to the downfalls of major political and media members like Senate Majority Leader Trent Lott and CBS news anchor Dan Rather for instance.  At first it seemed an entertainment outlet for teenagers instead of gaming all night, they would Blog as a means of staying in the "know" and making sure their friends knew everything about them. 

Celebrities and other high-profile people seem to use them also to captivate an audience and announce different trends in their lives, mostly personal.  Still Blogs are not just for teenagers, celebrity brats, they're for the average business person, mainly right now it seems Realtors are utilizing the media to market themselves.  And this begs the question do Blogs and the action of Blogging really help businesses?  Are they good marketing tools or just a waste of time?  Can this medium help or hinder your real estate business?  The answer remains in how they are used and to what degree.  It is really all about knowledge.

 Still what is Blog really?  For those of us that remain technically challenged and couldn't be a Web Master if we tried, a Blog is as user friendly as web content comes but it is a way of managing content or a CMS, content management system.  The software involved really does all the work for the Blogger and this allows just about anyone to create and maintain a Blog.  This action of maintaining or updating the Blog is known as the verb form of Blogging as well as someone who Blog is a Blogger.  The individual Blogs are also known as posts and they are usually organized in reverse chronological order.  The most up to date material will be viewed first.  Still with all the Blogs in the Super Information Universe, what makes a Blog unique, eye catching?  What makes it a different media from just a web site or a forum, email or other e-based media?  How is this method unique in format and material?  Can this be found in the way it balances technology with individual expression?

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 Although Wall Street seems to have rebounded in recent days in response to the Congressional approval of the $700 billion financial-system bailout last week, there seems to be continued concerns found amongst financial professionals, who are concerned with the continued pall of recession over the American economy. The main concern remains focused on government ownership of the American banking system.  Will this end the market's paralysis or is it just another bad idea from a failed administration?

Let's face it the average American person does not concern himself or herself with the goings on of Wall Street.  Until recently this just did not impact their lives unless they were savvy investors.  The average American mainly concerns themselves with the bankers that lend the money out.  We are a credit minded country.  So now what to do when the credit market folds?  Banks have had no choice but to limit the amount of credit that can open for people but also the guidelines for credit lending have tightened incredibly so.  The subprime market, once open for business is no longer available.  What else has happened for the banks is the widening spread, or surcharge, that banks must impose on short-term loans to other banks. This has increased over the last year from 0.65% above the cost of funds to an exorbitant 4%.

While the symptoms of the economic crisis and virtual breakdown have been evident for quite some time, since the market became deregulated in 1999 and allowed less government regulation, the current prognosis remains unseen even by the country's foremost financial experts.  Many can play the blame game like a pro and point the finger at bipartisan investments in the mortgage industry, specifically the borderline predatory lending practices found in the subprime market.  This was all very hush-hush, as this knowledge was not readily shared with the common everyday investor. 

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During this time of financial uncertainty as giant powerful cornerstones of the American banking community fail, you have to wonder, is my money safe? What happens if my bank is no longer doing business? Should I take my money out? What about small, regional banks and even credit unions? Are they immune or will they suffer the same fate? Should I worry about my long-term investments? Is it finally time to get organized and figure out my finances?

For months now, the American financial backbone has been a sinking ship, headed toward a crisis beyond anyone's experience and description because not even the Great Depression can compare. Many say we have been in a recession but there have been signs of a Depression for a while. Even such financial leaders like Bear Stearns, IndyMac bank start to fail and powerhouses like Fannie Mae and Freddie Mac need federal assistance; there is something rotten here. This is not to mention the Lehman Brother's bankruptcy and the proposed bailout of $700 billion bailout, which was initiated by American Insurance Group or AIG. No wonder our heads are spinning; we don't know if we are coming or going. Everyday on the news it is something new. People are taking to Internet financial pages like MSN Money and sending emails to financial experts across the country for advice.

Oprah has Suze Orman on her show as a way to elevate the worry but still there are very few answers and still more questions. We can take a moment to answers the questions but you also must keep in mind, the answers are changing for from minute to minute.

How can I tell if my bank will fail? Well you really can't. There's no easy way to know and I'm certain the bank will try to ease your worries. You should look at indications within the market because there is no a hot list of banks going bad. The Federal Deposit Insurance Corp does not publish one. Furthermore, according to the American Bankers Association many banks rebound and recover so quickly that it's next to impossible for them to produce a list.

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 It happens all the time when you engage in acquiring a new property through contract, there is not much information about the property known at that stage.  All you may know is the details of the financial statement and rent payroll or you've visually inspected the place by driving around the block.  This is more than enough details to make a solid educated offer on the place but it does not by any mean represent the actual value.  There's a lot more information you'll need to know to determine the real value.

Really this is the job of the Due Diligence process.  What is the purpose of this process?  Due Diligence is an analysis by which your risk is assessed.  Much like discovery in a court case, you will have at least 30 days to figure out what exactly the property entails and what owning the property requires you to be responsible for.  Finally, also what kind of benefit you will receive as a result of purchasing the property.  What will be your cost benefit and profit?

There are four ways risk can ruin this success and by you knowing the potential risk involved, you can steer clear of these situations.  The following potential risks for these transactions are: Market, Financial, Tenant, and Physical. 

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