I just received the 2008 tax valuation from my county treasurer. It’s clear that my local housing industry is feeling the effects of the national housing “crisis”, as the appraised value of my house increased less than 1% this year. Compare this to last year where the increase was 4.9%, and the year before when the valuation increased 6%.

Truthfully I’m not terribly disappointed about this, nor am I shocked. Other areas around the country are seeing the value of homes actually decrease, so I’m counting my blessings that my area isn’t yet …

One aspect of investing in real estate is trying to take advantage of a short sale. Being unfamiliar with what a short sale is, I thought I’d do some research.

A short sale involves buying a house for less than the amount the seller owes the lender, pure and simple. A more sophisticated way of making real estate purchases, short sales probably require more tact and patience than buying a foreclosure, as it involves knowing more about a persons situation than you might let on.

A short sale usually occurs when a seller can’t make his loan payments because of …

After my visit to the termite palace yesterday, the real estate agent told me she’d keep an eye open for more property in the area. The question then became: What is your criteria?

My first rental property ended up setting the bar very high. I bought it from a bank, put less than $10,000 into it for rehab and renovation, and rent it to students. Overall, my net cash flow is $345 per month. So I guess those traits could start the list.

1. The property must be within 3 blocks North of the local University.

Talk about narrowing the field! This is probably …

This afternoon I went over an looked at the property I’ve been watching for a few months. From the outside looking in, it appeared to be a rehab project that simply ran out of money. It’s typically opportunities like this that widen the margin on a deal, as most of the expensive stuff has already been taken care of by someone else.

Walking in through the front door, it was evident that the place had been lived in since the renovations took place. The carpet was dirty and stained, and there were remnants of belongings (crayons, broken pencils, etc) left in the kitchen drawers.

The walls in the …

I called my banker yesterday after I started thinking about how I was going to finance another rental property. When I call this guy my banker, he IS the bank, as in, he OWNS the bank. A good guy to know, indeed!
One of the benefits to doing business with a small town bank is that you know the bank and they know you. There is no pre-approval as long as your logic is sound and the margin is wide. If you have the cash flow to support the investment, they’ll lend you the money.
So the …

I’ve been casually looking for another rental property next to the one I already own. For a long time, the people in the area have been very proud of their houses, asking nearly 5 times what they’re actually worth. Needless to say, those houses are still on the market, many for as long as 15 months and counting.
But there is one property just a block or two away from my first one that has been on the market for 4 months, and its price has been dropping like a rock. The reason? The bank wants out!
I remember …

It seems our good old government is setting a course to bail out those who weren’t responsible enough to take care of their own financial house.

Treasury Secretary Henry Paulson said today that the Department is “aggressively pursuing a comprehensive plan” to aid as many homeowners as possible. He went on to offer fresh details about a nearly complete government and private-sector effort to stem a huge number of foreclosures next year.

“We are leading the industry to develop a systemic means of efficiently moving able borrowers into sustainable mortgages,” Mr. Paulson said today in a speech to the Office of Thrift Supervision’s housing forum.

OK, so in not so many …

I don’t usually lounge around on weekends and watch TV, but the four-day weekend has me unusually lazy. Or maybe it’s the left over tryptophan from Thanksgiving…

Anyway, one topic of discussion this morning on Fox’s Bulls and Bears show was finding the bottom of the housing market. A few of the talking heads were quick to point out that home builder stocks had dropped as much as 90% over the last year to 18 months, and that qualified them as a good buy, regardless of whether we’re at the bottom or not.

I disagree.

The stock market has the advantage of being …

Now that I have things on cruise control with my rental house, it’s time to start putting some money into it.

Last week I contracted out a tree service to have the tree removed on the property line. I generally hate to remove good trees, but this one is right on the property line growing up through a chain link fence, and even worse, it was growing up through the electrical service lines to the house. That spells disaster when the limbs freeze up and take out the power to the house.

While they were at it, they ground out a second stump in the middle of the back yard.

All …

I finally got my act together and converted my COSI Home Loan to a fixed rate, 30 year mortgage. For those not familiar with a COSI loan, the interest rate is based on the prime rate, less a fixed percentage. Therefore, if the prime rate goes up (as it has), so goes my loans interest rate.

It’s a bit like an adjustable rate mortgage (ARM) with a few caveats. An ARM is traditionally “fixed” for a short period of time. After that period of time, the rate resets to whatever the current rate is. In my COSI loan, the rate is constant for a year, but …