Mid-Day Market News & Commentary by Chris McLaughlin, December 31, 2008
http://www.shortsalesriches.com/welcome.html
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You really can make a huge six figure income … even a 7 figure income … with no money out of your pocket in the deepest recession our country has ever faced. How? Well, you asked and we listened … some of you said that 9 PM ET webinars were just too darn late for you! So we’re holding one this Saturday … at 4 PM EST:
https://www2.gotomeeting.com/register/703821628
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Happy New Year’s Eve!
Good news for those looking to lock in rates! Mortgage rates continued to drop this week, as Freddie Mac reported that rates continued to drop consecutively for nine weeks in a row. Rates for a 30 year fixed mortgage dropped to 5.10% , down from 5.14% for the previous week. “Interest rates for 30-year fixed-rate mortgages fell for the ninth straight week and represented a third consecutive all-time record low since Freddie Mac’s survey began in April 1971,” Frank Nothaft, Freddie Mac’s chief economist stated.
And the good rate news has lenders busier than they’ve been in a year. The Mortgage Banker’s Association index of mortgage application activity held steady this week at 1,257.7, which is its highest level since July 2003.
Now on to our real estate investing education section…
Hidden Environmental Incentives
While most short sale buyers or investors are well aware of potential pitfalls when working with environmentally sensitive properties, it is also a good idea to become familiar with hidden profit sources when purchasing properties. Here are the top methods for making more money simply due to environmental management trends:
Open Spaces. When possible, search for properties adjacent to open spaces. Conservation areas, buffer zones and even properly maintained or landscaped drainage areas sell for nearly 13 percent more than similar properties not adjacent to an open space. Open spaces represent more land, less congestion, less noise and other irritants for buyers without the higher property taxes making it an appealing resale potential.
Acreage. Search for properties located near or adjacent to acreage to realize almost 17 percent greater return on your investment compared to similar sized/area parcels. The prime size is typically 2 to 3 acres of land; anything larger is likely to be considered farming and actually subject to decreased values rather than increases.
Wetlands. Contrary to popular wisdom, properties located or classified as wetlands averaged a .3 percent increase compared to non-wetland designations. While the buyer should always be aware of potential restrictions or other environmental limits upon use, wetlands also represent “mandated” quiet zones for many buyers searching for peace and quiet.
Combinations. By combining open spaces, small acreage plots and even a wetland area it is possible to increase property values by 1/3 or more. Short sale investors presented with an opportunity to purchase on a neighborhood or community that utilized this type of planning versus another neighborhood of high density track homes will disproportionately benefit in the long term by purchasing in the environmentally sensitive community.
What to Avoid. While open spaces, acreage and wetlands represent prime purchasing opportunities, there are environmental pitfalls to be avoided if possible.
Farmland. While farm land represents a tremendous buying opportunity for other reasons, for the purpose of residential real estate it is well known to reduce property values of adjacent parcels by over 13 percent. It only makes sense; few people desire the exposure to unpleasant odors, pesticides, diesel trucks and other common pitfalls associated with farming.
Major Roads. Another common profit buster is a property located within 20 meters of a major Interstate or other highway. While the path of progress can transform an undesirable property into a future mall location or commercial milestone, the long term developmental and others costs can be out of the reach of the ordinary owner creating an inverse incentive for years.
Not in My Backyard. Despite the convenience and easy commute, there are many major construction projects deemed less desirable for residential properties. Common examples include nuclear power plants, prisons and manufacturing plants.
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See you at the top!
Chris McLaughlin
http://www.shortsalesriches.com/blog
P.S.:
Are you ready to get 2009 rolling? Then it is time to come to our LIVE “Recession Proof Real Estate Investing” webinar this coming Saturday at 4 PM EST, 1 PM PST:
https://www2.gotomeeting.com/register/703821628
P.S.S.:
Have you seen the hilarious “Short Sale Kid Gets a Holiday Haircut.” Don’t miss this challenge issued by Nathan Jurewicz:
http://www.youtube.com/shortsalesriches
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