Florida Housing Market

Florida Housing Market

Staying on top of the bond market and mortgage interest rates is one of my highest priorities for my clients. This finds me not only following charts, but also reading what the big bond traders and gurus have to say.

I thought I would share with you a warning that Mohamed El-Erian, the CEO of PIMCO, the worlds largest bond fund has for Americans.

He states that the U.S. debt overhang like those of other advanced economies who's projected rates of economic growth are not sufficient to avoid mounting debt and deficit obligations will put us on the same tracks as Greece.

El-Erian states that Americans face a combination of higher inflation, austerity and financial repression.

Ok I had to look up "austerity" n. : severity of manner or life; harsh discipline; rigorous simplicity.

Hmmm.. then what the hell is Financial Repression? El-Erian defines financial repression as "seeking to impose negative real rates of return on savers."

Here's the real kick in the teeth: He believes the policy makers will undermine the real return contract offered to savers, instead of any bold moves to address the real problems of structure and imbalances.

Sounds to me like a continuation of what we savers have been getting for the past 4 or 5 years.

This brings me back to real estate. Why not take some of your non performing money and buy some investment property? What are you scared?

Of course you are, that's why it is a great time to put your money to work in real estate.

Here's an example:
 I have found a 2/2 house here in East Boynton for my buddy up in NC who's money is in savings, making next to nothing. Now for a foreclosure this is a nice house, almost a turnkey rental. The purchase price is $40,000, it's 1385 sq ft., that's less than $30 a sq ft.!!

Using worst case scenario numbers, he will be making 12% on his money. The plan is to rent the property for a couple of years (long term capital gains) and either sell it outright or become the bank.

Become the bank by selling the house at a premium, to someone who wants to buy but can't because they have no credit and recently walked away from their last house. The good part is they have $10k plus to put down, because they were able to save since they haven't made a mortgage payment in the past two years.

Now by taking a large down payment offsetting his original investment of $40k, he then will take a first loan position on the remaining $60K to $70K at 8% interest for 30 years.

With a couple of these in his portfolio, he'll be saying, "What financial repression?"

On a side note: I have a few people that want to get in on today's housing market but do not have enough money to pay cash for a foreclosed property and do any rehab. If you are in the same boat please contact me so that I can hook you up so that you can pool your monies.

            My Son starts college at FSU next week!             

This is a real Captcha that I got.

 ====================================

Barometer Soup

I have found another housing barometer to put in the "barometer soup" as Jimmy Buffet says on one of his albums.

 I am starting to watch the number of Fannie Mae HomePath properties (these are foreclosed homes that Fannie Mae owns).

Here is as far back as I had saved in my email working forward to today. These are the number of Fannie Mae foreclosures in Palm Beach County. 

I'll keep the totals comeing so we can figure it out together:)

Hey have you checked out the Daily Rate Lock Advisory that is posted on my website? Save this link as it is updated every day! Daily Rate Lock Advisory

 =============================

Florida Couple Forecloses on Bank of America

Did you see the article about a Florida Couple that foreclosed on a Bank of America branch for not paying a court ordered settlement. This is sweet: http://www.kfiam640.com/pages/TimConwayJr.html?article=8670012

============================

Check out these pictures

These are pictures, courtesy of Google maps, of the number of homes that received foreclosure filings in 2010.