Posted by Annalisa Burgos | June 24, 2011
Vanilla Ice offers real estate investing tips on DIY Network's The Vanilla Ice Project.
Bet you didn’t know that rapper Vanilla Ice is also a real estate investor and home improvement enthusiast.
The artist best known for his ’90s hit “Ice Ice Baby” and his crew renovate foreclosures and discounted properties in Florida and sell them for profit. Catch all the action on DIY Network’s The Vanilla Ice Project!
Vanilla Ice, aka Rob Van Winkle, sat down with HGTV’s FrontDoor.com to talk about the first home he bought, how he got into real estate investing and what home life means to him. Watch Vanilla Ice’s video interview.
Want Vanilla Ice to “ice” your house? Enter DIYNetwork.com’s “Ice My House” sweepstakes and you can win a room makeover from the rapper-turned-flipper. But hurry! Contest ends Monday, June 27.
Tour Vanilla Ice’s former pad on Star Island in Miami Beach, which is for sale for just under $15 million >>
Tour more celebrity homes for sale at FrontDoor.com/celebrity >>
Posted by Annalisa Burgos | October 30, 2009
For those of you who’ll be house hunting as well as trick-or-treating this Halloween weekend, your friends at FrontDoor.com have come up with some tips for foreclosure buyers. We call them:
And check out these other Halloween-themed homebuying and selling tips on FrontDoor.com:
Posted by Annalisa Burgos | September 24, 2009
The economist behind one of the most widely watched measures of the residential housing market is not sure where home prices are headed.
I caught up with Robert Shiller (of the Standard & Poor’s/Case-Shiller Home Price Indices) at the “Distressed Real Estate Summit” in New York City, where he shared his insight with more than 700 real estate developers, investors and other professionals. Hear what he has to say:
Shiller told attendees that current government efforts seem “like a big bailout,” and rather, we should focus on setting up “the framework for new economic systems” and “create a liquid market for real estate.”
Shiller is founder and chief economist of investment management firm MacroMarkets and co-developed the methodology behind the S&P/Case-Shiller Home Price Indices, which track changes in home prices in 20 metropolitan regions across the United States. Each month, investors look to the data for insight into the housing market.
Posted by Annalisa Burgos | September 8, 2009
FrontDoor insider Rick Sharga, SVP of foreclosure data provider RealtyTrac, offers valuable advice in this guest blog post:
“Foreclosure properties have always been an area of keen interest to real estate investors. Over the years, homes in foreclosure and those already repossessed by the banks have been hidden gems, most often the purview of seasoned investors with “insider” contacts who have given them early notice of upcoming deals.
And the deals have been significant; it’s not unusual to hear of foreclosure and bank-owned homes selling for discounts of 50 percent or more compared to prior sales.
With the advent of the Internet, companies like RealtyTrac have made finding foreclosure properties much easier. Today, virtually anyone with an Internet connection and a valid credit card can start searching for, analyzing and ultimately buying properties in all stages of foreclosure.
The value proposition is compelling: home prices have fallen between 20 and 30 percent in most markets; foreclosure homes tend to sell at even lower prices; and mortgage rates continue to bump along near historic lows. Finding a home that represents a great deal isn’t nearly as difficult as it once was.
Turning that deal into an investment with a high rate of return, however, is as challenging as ever.
In the early part of the decade, foreclosure investors tended to be “flippers.” Neither dolphins nor pizza makers, these flippers would buy homes at a discount and resell them at a profit within a very short period of time.
Foreclosures were prime properties for this pastime. Often, flippers would work directly with the distressed homeowner and lender, leveraging the equity in the home to negotiate a purchase price that covered the bank debt while still allowing the investor to buy the property at a discount. Other times, the investor would work with the bank to purchase, rehab and resell bank-owned properties. This activity gained such momentum that it spawned several TV series, and, fueled by continually appreciating home prices, drew more and more inexperienced investors into the mix, often with disastrous results.
Today’s investor is much more likely to be a landlord than a flipper. While we probably won’t see this turn into a craze punctuated by a new hit show (“Rent this house!”), we are likely to see a more stable, more realistic and ultimately more successful approach to real estate investing.
Apartment occupancy rates often drop during foreclosure cycles, as homes become available to rent at equivalent (or better) prices. There’s a market for rental homes as well, since over 1.5 million property owners have lost their homes to foreclosure since the beginning of 2006. Rental units provide ongoing cash flow to investors. And while there’s usually a long-term appreciation in the value of the properties, which many owners will profit from in subsequent sales, the cash flow helps the investors ride out any short-term price depreciation.
Buying a foreclosure property at a deep discount, doing some repairs, finding a good tenant and holding the property as a long-term investment is a lot of work, isn’t as sexy as flipping a property, and certainly isn’t a “get rich quick” formula. But for investors who are smart enough and willing to work hard enough, buying to rent can be a much safer, less volatile approach to successful real estate profits.”
Check out FrontDoor.com for more real estate tips and advice:
Posted by Annalisa Burgos | June 24, 2009
Real estate auction company REDC (Real Estate Disposition Corp.) works with lenders to sell thousands of foreclosure properties at auctions throughout the country. And in this market, lenders need all the help they can get to unload this excess inventory, quickly and efficiently. Note: REDC auctions are for bank-owned homes or REOs, and are not the same as the public auction, which takes place at the local courthouse.
On June 7, more than 1,200 bargain hunters attended an REDC auction in New York City, where 113 bank-owned houses in the tri-state area were sold for a total of $10 million in sales.
Watch the video to see what it’s like to buy a bank-owned home at an auction.
AUCTION TIPS:
1) Research. Before you buy at a foreclosure auction, do your research. Print out the auction brochure (if there is one), note the open house dates for the properties you’re interested in and see them in person. You more than likely will have to buy “as-is” and you won’t be able to get a home inspection done. When you visit the homes, look out for these 10 red flags for homebuyers.
2) Crunch the numbers. Estimate how much you expect to spend on home improvements on top of the purchase price, which includes a premium the auction company charges each buyer. If you’re an investor, subtract those expenses from the income you expect to generate from the home (rent) and decide if it’s a smart investment.
3) Register and be prepared. Each auction has different requirements, but all of them require you to register and bring a cashier’s check or cash for the required earnest money deposit. Many transactions are cash-only, but some auctions will allow you to finance the purchase through a lender, so get pre-approved beforehand so you know what your maximum bid will be.
For more tips on how to buy a foreclosure, go to www.frontdoor.com/foreclosures.
Posted by Annalisa Burgos | June 2, 2009
Every now and then, we’ll invite one of our Insiders, FrontDoor’s team of savvy real estate experts, to write a guest blog. Today, Rick Sharga, SVP of foreclosure data provider RealtyTrac, shares his tips for buying a foreclosure property and how to minimize the risk:
“Interest in buying foreclosure properties has never been higher. In a Harris Research study conducted for RealtyTrac and Trulia, over 55 percent of homebuyers expressed an interest in buying a foreclosed home or bank-owned property. A number of foreclosure-related Web sites, including www.realtytrac.com, are among the most frequently visited real estate Web sites.
And it’s no wonder: according to RealtyTrac research, a homebuyer will see an average discount of over 30 percent on a foreclosure property or bank-owned home across the country. In some of the harder hit areas, discounts are considerably higher, with homes selling for 70 percent or 80 percent less than what they sold for just a few years ago. Those lower prices, combined with historically low mortgage rates and an $8,000 tax credit for first time homebuyers make this an ideal time to be on the market.
Even with all of the interest in purchasing foreclosure homes, and the financial incentives to do so, many people have concerns about possible hazards. According to the Harris study, 71 percent of those surveyed were concerned about “hidden costs” and 46 percent were afraid that the process was “risky.”
In fact, the most common mistakes people make when buying a foreclosure property are overvaluing the property itself and underestimating the amount of money it will take to repair and refurbish the home. But there are simple steps that homebuyers can take to minimize risks and ensure a more successful purchase.
Avoiding “hidden costs”: Buying a bank-owned property is the safest bet. The bank will typically have cleared the title, meaning there are no outstanding liens against the property. If the bank is servicing a loan for Freddie Mac or Fannie Mae, they will generally have to bring the property up to a minimum level of repair as well. Smart homebuyers will engage the services of a professional contractor before purchasing the home, to get a formal estimate of how much work needs to be done, and what it will cost. Many contractors will prepare an estimate for free in the hopes of securing the job. Both Fannie Mae and the FHA also have loan products that allow a homebuyer to build the cost of some repairs into the actual mortgage, further minimizing out-of-pocket costs.
Taking the “risk” out of the process: Anyone concerned about the process being risky should avoid foreclosure auctions. Purchases are made without the opportunity to inspect the property and on an as-is basis. Auction purchases are almost always cash only, and there is no recourse if the property turns out to be a lemon. Buying a bank-owned property or a foreclosure home via a short sale conducted by a professional real estate agent minimizes risks considerably.
As with any other investment, there are trade-offs between risk and reward. But given the state of today’s market, and the enormous discounts available on foreclosure and bank-owned properties, the rewards are great and the potential risks can be managed. It’s a buyer’s market that may only come along once in a generation — time to get busy!”
Thanks for the tips, Rick. For more great advice, check out FrontDoor’s step-by-step guide to buying a foreclosure home, whether it’s in pre-foreclosure, at auction or bank-owned at http://www.frontdoor.com/foreclosures.
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