Where Did Everyone Buy in March?

From the mountains to Aurora, and Fort Lupton to Lone Tree, guess which area sold the most homes in March? Have you guessed yet? Don't look until you do! It was neck to neck, but Denver Southeast beat out Aurora South by 7 homes and 10 condos. 217 houses were sold in March in Denver Southeast, along with 115 condos, whoppingly good numbers. Aurora South sold 210 homes, and 105 condos.

Just to put this in perspective, this means that 17% of all homes sold in March in this huge grid were sold in southeast Denver and south Aurora, and 32% of all condos sold in March were sold in these two areas as well. Seems like buyers know where to go these days.

So why are these 2 area selling so hot even in a not-so-hot market?  

Everyone knows Denver southeast is a great location: it includes the hotspots like Wash Park, Cherry Creek, DU, Bonnie Brae, old Pearl Street, and great access to just about any city around Denver. What's so surprising is the average sold price in Denver southeast in March was $438,553!  

South Aurora is a hotspot for a lot of investors looking to get cheaper homes in pretty good neighborhoods with high rents.  A lot of first-time home buyers also like the cheaper prices in South Aurora, and usually buy the remodeled houses that investors are trying to flip!

Who says the market is down and no one is buying???

See all areas MLS sold stats for March

Why Most Lotto Winners Go Bankrupt

SmartMoney did a report last month which found that more than 1,900 lotto winners went bankrupt within 5 years of winning their earnings. According to Sports Illustrated Magazine, within two years of retirement, 78% of former NFL players are bankrupt or under serious financial distress. And within five years of retirement, an estimated 60% of former NBA players are bankrupt. What is going on here?!

Most people are not in any way educated when it comes to money. Did you know that if you gave most people in America $1,000,000, the majority would easily go into debt, and some would even go into bankruptcy? But why? Because we all think that money buys toys...and we forget that most of our toys (houses, cars, boats, planes) still have expenses even after they're paid off. You still have to pay taxes and utilities on your mansion. You still have to pay insurance and gas on your Mercedes. Boats don't make money for you. And when you run out of your money...it's gone.

How We're Like Lotto Players and Athletes Who Go Bankrupt

Well Jonathan, most of us don't have a million dollars to worry about! Yes, but our mentality is the same! Most of us work hard to earn money (just like athletes and lotto players). And for what? To enjoy it. Once we get it, we pay the bills, the mortgage or rent, our monthly pass to 24 Hour Fitness we never use, and then spend what we have left on fun - like dinner outings, vacations, and new clothes. So, in sum, we work for money. The secret of thinking like a true millionaire is to ask yourself: how to make your money work for you, or how to make your money MULTIPLY. In a word, investing. 

How to Make My Money Multiply?

How could you make your money multiply?? The most popular ways people actually make their money multiply today is either the stock market or real estate. Think about it. With stocks, you put $2,000 in and hope the market goes up. You could end up with $3,000. You could also end up with $1,000. Or you could let it sit for a few decades and hope it goes up. Stocks are a much higher risk investment, since we have no control in what our stocks and companies do. As we've seen, the stock market can be great one day, and crash the next.

Can Real Estate Ever Be a Safe Investment?

Real estate can be the same way, but it doesn't have to be. With real estate, you control your investment. Most of the people who experienced a crash along with their real estate investments were those who either bought in hopes that their home(s) would appreciate, or who refinanced their mortgages so much that they were upside down - their payments were higher than the value of their homes. But smart investors made sure their investments worked by buying something that worked - cheaper properties with strong area rents. As the real estate markets crashed, rents only went higher (since many people were foreclosing but still needed a place to live), and these investors were safe. And if the market had gone up, great. They have a strategy for every market.

What are You Doing With Your Money?

What are you doing with your money? How is your money working for you? Do you have it locked into a 3% CD? Or 1% savings account? The are homes around the Denver area making 20% - 30% return on investment right now. If you'd like to know more, give me a call or shoot me an email. If you don't like real estate or getting your hands dirty, you can still get your part in the mix by lending your money for a fixed rate of return.

Want to Learn More About Real Estate Investing?  7 Types of Real Estate Investing

Jonathan@theDenverHouseGuy.com

Sleazy Salesmen, Agents, and the REALTOR: What's the Difference?

If you've ever met a sleazy salesman (see the guy above), you quickly learn that you want to stay as far away from them as possible. Unfortunately, there are many "sleazy" salesmen in real estate. Well, I'm proud to say that I am a an official REALTOR®.  Not all real estate agents or practitioners are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. Here are five reasons why it pays to work with a REALTOR® (who is also free to work with!):

1. You’ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.

2. Get objective information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

3. Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.

4. Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.

6. Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.

7. REALTORS® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.

8. Buying and selling is emotional. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.

9. Ethical treatment. Every member of the NATIONAL ASSOCIATION of REALTORS® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a REALTOR®, you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for REALTORS® to take the Code of Ethics orientation and they are also required to complete a refresher course every four years.

Don't get stuck with "Sleazy Steve" as your real estate agent. 

Flipping Foreclosures Becomes a New Game

More investors are finding a sweet spot in flipping foreclosures, but it’s not the same type of house flipping seen during the real estate boom. 

During the housing boom, investors would take advantage of skyrocketing real estate prices and loose lending regulations by buying a property, remodeling, and then selling it for profit. 

Today’s flippers are buying at ultra-low prices — mostly in cash deals — and are doing mostly only minor repairs, such as repainting, replacing appliances, and sprucing up the landscaping. Their profits aren’t as large when they sell, but they may sell more properties in a year, says Penny Boling, the broker-in-charge of Century 21 Boling and Associates in Myrtle Beach.

The 'Street Sweepers'
Keith Gamble has made foreclosure flipping a full-time job. He purchases properties at a monthly foreclosure sale and usually has about four properties at any given time. 

“Some people’s bad fortune is other people’s opportunity,” Gamble says. “I know that sounds callous — I know people doing what I’m doing at the courthouse each month are there to take advantage of that opportunity, but I also feel we provide a backstop to the market.”

The flippers are often taking the neighborhood’s blight and helping to fix up the homes that had been badly trashed from the previous owner. Boling says the investors’ abilities to also pay cash will help the market get through the abundant foreclosures that are plaguing sales. 

“They’re kind of like the street sweepers,” Boling says of the property flippers. “They’re part of the cleanup committee of this marketplace.”

Source: “Foreclosures Offer New Twist on Old Game: Flipping Houses," RISMedia (April 4, 2011)

5 Reasons for a Mortgage Refinance Other Than Lowering Your Payment

Naturally, if you’re paying 6% for your mortgage and you can refinance at 5%, you’re gonna do it. Although cutting your monthly payment remains an important motive, there are at least five other reasons to consider a mortgage refinance, for long-term savings and convenience.

1. Change your mortgage term

If you decrease the term of your mortgage in a refinance by going from a 30-year to a 15-year, you’ll pay a lower interest rate and shorten your total interest costs. You’ll build home equity more quickly, and pay off your loan sooner, even though your monthly payments go up.

2. Move from an adjustable rate to a fixed rate

ARMs offer low introductory rates, but they also offer long periods of uncertainty that make it hard to budget. It makes sense in a mortgage refinance to go from an ARM to a fixed-rate loan during a low-interest rate environment. You’ll get emotional security and your rate won’t fluctuate with changing economic conditions.

3. Take out cash

With a cash-out mortgage refinance, you can turn an intangible asset—accumulated home equity—into a tangible one—cash. It makes sense for a project that will generate long-term benefits, like a home improvement or funding a child’s college education. However, don’t do it for frivolous reasons. Unless you’re extremely disciplined, you could find yourself in even deeper debt.

4. Consolidate two mortgages

When interest rates are low, a mortgage refinance lets you consolidate your main mortgage and an outstanding home equity loan to realize a lower overall monthly payment. Plus, you’ll have only one mortgage payment to make each month.

5. Recover from divorce

If your home is jointly owned with your soon-to-be ex-spouse, a mortgage refinance will turn a joint obligation into the responsibility of the person keeping the home. Nothing is more frustrating than tracking down a former spouse who doesn’t keep up with his or her end of the mortgage payment.

Lay the groundwork

If one of these reasons resonates with you, contact your current lender to see if it’ll offer you preferred rates or reduced closing costs on a mortgage refinance. But don’t assume the current lender is best: Leave no stone unturned by searching for lenders online and calling community banks and local credit unions.

No matter which lender you choose, a mortgage refinance for the right reasons can save you lots of money—and that’s the best reason of all.

Barbara Eisner Bayer has written about mortgages and personal finance for the past 16 years for the Motley Fool, Mortgages.com, and Nursevillage.com, and has been the Managing Editor of MortgageLoan.com, CompleteGrowth.com, and Credit-land.com.