Kimberley Mathisen of the Daily Southtown writes about another investing success story.

Five years ago, Jacqueline Jackson was a divorced mother raising a young child.
Although she had a good job, the Palos Heights resident said her credit rating was less than stellar.

Since that time, Jackson became a successful investor in real estate and a licensed real estate agent. She now acts as a mentor to women seeking to replicate her steps to financial freedom.

“In 2000, a friend of mine advised me to use the equity in my home to purchase investment property,” she said.

“But I was hesitant to begin investing in real estate. My first reaction was ‘I can’t be a landlord. I can’t fix anything.’ ”

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Grant Buckler writes for the Globe and Mail is commercial investing for everyone?

If you’re taking a year-end look at your portfolio and considering a plunge into commercial real estate, you’re probably not alone.

“There’s been a huge interest,” says Mark Thiessen, a commercial realtor with Re/Max Winnipeg and chairman of the Canadian Real Estate Association’s National Commercial Council. The current wave of interest from small investors across Canada began with the stock market bust of 2001, and has been sustained by historically low interest rates. “As other investments aren’t performing to people’s satisfaction, they look back to real estate,” Mr. Thiessen says

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Article by FreeMarketNews.com

A number of astute financial observers have remarked on the prevalence of investors to assume that a trend in motion will continue, and most likely, will do so indefinitely. Such a belief is almost omnipresent in today’s real estate market. For true believers, which apparently includes almost all holders, real estate always goes up, and always will. As Tim Iacono, writing on financialsense.com says, “And why not? Nothing in the last 10 years would lead anyone to believe that home prices do anything but go up.”

Iacono then proceeds to draw parallels to 2001’s energy trading market, exemplified most strikingly by Enron. Like Enron, the public must ask themselves, “is the business model (of real estate) valid?” Even if it isn’t flawed, are parabolic price rises really sustainable into perpetuity?

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Market thoughts from Alfonso L. Vigliotti,

There are many similarities and many differences in the markets of Japan of 1980 and the US in 2005. So what is one to take from these examples? As for the US real estate markets, if you are a speculator or a condo flipper, these concerns should be on your mind. We will continue to offer timely market information for those real estate investors and REIT income investors. If you are the average home owner, this is simply a case of static noise.

Earlier last week we referenced a piece “The Iragi Stock Exchange Fights On.” This article is still available on our active archives. It reminds me of the quote by one of my financial heroes, the famed international investor, Sir John Templeton. He has said to look for blood on the streets when finding buying opportunities. Now where can that be said more, than in Iraq today?

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From Kaija Wilkinson of Birmingham Business Journal we learn that,

During the BBJ’s annual CCIM real estate roundtable in October, Bill Dobbins of Arlington Properties noted that when it comes to condo and mixed-use projects, it will be “survival of the fittest.” Look around, and it’s clear that some projects such as Bristol Southside and The Capri in Highland Park, are moving along quickly, while others, such as 2600 Highland, appear to be stalled.

The Capri is a project of European investor Euro American Advisors and local developer Tom Hinton, who also announced plans this fall for a $50 million condo project that will transform a stretch of Clairmont Avenue between Highland Park and Forest Park.

On the condo side, downtown was a big winner in 2005, says Tom Carruthers III, president of Carruthers Real Estate Co.

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Dawn Gilbertson The Arizona Republic writes,

Robert Kiyosaki hadn’t uttered a bit of financial advice, wasn’t even on the air yet, when the phones starting ringing in the studio of public television station KQED.

The phones didn’t stop the entire hour the Phoenix personal-finance author and motivational speaker was live for a prime-time pledge drive, or during programming breaks featuring his long-running Rich Dad Poor Dad show

Caller after caller pledged $175 for station membership and a pair of tickets to a two-day investment expo next spring at which Kiyosaki will share the spotlight with the likes of Donald Trump and Oprah disciple Dr. Phil. One Bay Area resident called to ask if she could increase her $75 pledge from the night before to qualify for the half-price expo tickets.

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Evan Pondel Staff Writer of Whittier Daily News writes,

With real estate prices leveling across the nation, the stock market’s direction uncertain and oil prices unpredictable, there are no safe bets on a tidy return on investment these days.

Still, the bigger returns will go to those who are able to be a bit creative and take some healthy financial risks, experts say.

“It doesn’t require a true risk-taker in the sense of jumping in. It’s the person who takes a calculated risk who usually wins,” said Carl Martellino, who teaches a financial course at Pomona College. “And a lot of times, that depends on the person’s skill set.”

So what if you’re middle aged and wary of the stock market but have some cash you want to put to work?

First, you’ll want to determine your net worth your total assets minus your liabilities.

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By Jim Woodard, Copley News Service

The process of appraising the current market value of homes is becoming faster and less costly. That’s due to the increasing use of automated collateral management systems by lenders and others who need valuation reports.
The systems involve the use of computers, databases, and sophisticated software programs, replacing much of the work formerly performed by professional appraisers. Selling these systems is a rapidly growing niche in the real estate market. Those annual sales will likely reach $193 million by 2008, predicts the TowerGroup, a research and advisory firm.
The automated systems are not only growing in number, but also in variety. Today, some systems use pools of information from several models. Some programs offer evaluations that come with an insurance policy. Others provide appraiser-assisted models where a real-live appraiser evaluates the figures and decides if it’s accurate enough as is, or if it requires at least a drive-by inspection.
“When automated systems started to be on the radar, people generally preferred traditional systems. The automated data was dated,” said a spokesman for MortgageFlex. “However, you’re now seeing a blend of insured and cascading models arising to make the systems more reliable.

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By Robert J. Bruss, Inman News

The year 2005 has been very good for most property owners and realty sales agents. Home sales prices appreciated handsomely in most communities and the sales volume of new and resale homes were near-record.
But 2006 promises to be more “normal” as mortgage interest rates slowly rise, resulting in a modest new home construction volume decline with a corresponding residence market value appreciation and sales volume slowing.
Having been through many real estate market ups and downs over almost four decades, both as an investor, sales broker, and realty writer, I’ve learned that success in a slowing real estate market requires paying greater attention to negotiation skills.

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By Andrea Coombes of Marketwatch,

It’s time to be jolly and apparently also the season to improve the home, according to a recent survey from Deloitte & Touche LLP, a consulting firm.

U.S. consumers plan to spend an average of $628 on improving their house this holiday season, up 84 percent from the $341 they said they would spend in 2003 at this time.

That means, of the total $2,348 consumers say they’ll spend this holiday, the biggest portion will go to the home, with 27 percent going to home improvement, 26 percent to gifts, 17 percent to socializing, 12 percent to charity, 9 percent to entertaining at home, 7 percent to nongift clothing, and 2 percent to holiday-specific furnishings, according to the 20th annual Deloitte survey of 17,440 consumers, taken in October.

The survey didn’t define home improvement, so consumers could be counting everything from buying new furniture to remodeling.

While a big portion of holiday dollars are going to home improvement, that simply reflects pricier items, said Richard Giss, a Los Angeles partner in Deloitte’s consumer business practice.

“If I buy a china hutch or a dining-room table, the outlay in dollars is enormous relative to other gifts I might give,” he said.

It’s likely that consumers’ drive to beautify their homes is connected to rising house values in recent years, he said. “There’s a belief that ‘I can spend on my home and get the money back,’ ” Giss said.

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By Kay Bell, Bankrate.com

If you’re looking to turn a quick buck on a real estate transaction, accountant Bill Rucci has some words of warning: “It may be quick, but it also may not be as lucrative as you first thought.”
With housing prices in many parts of the United States skyrocketing, flipping — buying a property and then quickly reselling it at a higher price — has become the hottest investment trend.
But if you’re not careful with your real estate flips, your investment strategy could produce a sizeable payoff for an unintended partner: the Internal Revenue Service.

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By Kay Bell, Bankrate.com

If you’re looking to turn a quick buck on a real estate transaction, accountant Bill Rucci has some words of warning: “It may be quick, but it also may not be as lucrative as you first thought.”
With housing prices in many parts of the United States skyrocketing, flipping — buying a property and then quickly reselling it at a higher price — has become the hottest investment trend.
But if you’re not careful with your real estate flips, your investment strategy could produce a sizeable payoff for an unintended partner: the Internal Revenue Service.

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Bradley J. Crandall for Yahoo finance writes,

Real estate remains a top choice among investors for continued growth in the New Year.
According to BetterInvesting’s Voice of the American Shareholder (VOAS) poll, the real estate industry is surpassed only by energy as a leading investment opportunity. More than 1,000 investors participated in the most recent VOAS poll. It is the second consecutive year that real estate has commanded a spot as one of the top investment choices in the survey, having debuted last year as number one.

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Jeremy Siegel, Ph.D comments on future of investors,

It’s no secret that housing prices have soared in recent years. The main reason: The remarkable drop in interest rates.

Particularly important for the housing market is the real rate. This is the interest rate minus the rate of inflation. The real rate is important for the housing market because the two move in opposite directions.

The yield on Treasury Inflation-Protected Securities (TIPS) provides a measure of real rates. It’s currently just 2 percent — about half its 2000 level. This drop in real rates over the past five years means that the after-inflation cost of long-term borrowing has plunged by about 50 percent.

These declining rates can justify big increases in home prices. In fact, the average price of U.S. single-family homes has jumped from $160,000 in 1999 to $265,000 today, a whopping 66 percent increase.

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Article brought to you by Memphis Business Journal,

October foreclosures were at the highest level in 2005, but fell to levels seen in early fall and summer in November, said James Saccacio, CEO of RealtyTrac Inc., in a statement.

“While fewer foreclosures in most of the Gulf states contributed to this, it also continues the trend of seeing the national foreclosure rate drop the month after a significant spike,” Saccacio said in the statement.

Gulf state foreclosures decreased in November, which contributed to the national rate’s decrease. Florida was the only state in the Gulf Coast with increasing foreclosures in November.

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COLLEEN BURKE from GM Today informs us of home improvement tax breaks for upcoming year.

With the new energy bill (the Energy Policy Act of 2005), you’re smart to hold off on some home improvements,” said Jill Senso, an enrolled agent and tax research specialist for the National Association of Tax Professionals. “Units paid for and installed after January 2006 that meet energy efficiency standards are eligible for a tax credit.”

That credit, which is in effect until Dec. 31, 2007, has a lifetime maximum of $500, with individual limits for each item. These items can include insulation, replacement windows and high-efficiency furnaces, boilers, central air units, heating/cooling system fans and water heaters.

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Allan Ripp/Tripp Whetsell of PR Newswire report,

1. The Price of Security — The most notable aspect of the asset
allocation index is how much Tiger 21 members are holding in cash —
11% of the average member’s portfolio was in this most liquid of
investments. “A more traditional rule of thumb is for investors to
maintain 3-5% of total assets in cash reserves. This is based on our
members living, on average, on 3-5% of their portfolio value per year.
Traditionally, this would mean holding approx 1 year of living
expenses in cash” explained Tiger 21 Founder Michael Sonnenfeldt.
“The 11% figure tells us that our members, who represent some of the
most sophisticated self-directed investors in the country, are in a
conservative, security-conscious frame of mind right now. That six to
eight per cent additional allocation to cash takes away considerable
earning potential, but it appears to be the current price for peace of
mind among a number of wealthy Americans.”

2. The Lure of the Land — A sizable portion of members’
holdings — nearly 22% – is in real estate, including 14% direct
investments and another 8% in real estate partnerships. Even with
mortgage costs potentially on the rise and the froth leaving the
market in certain markets, Mr. Sonnenfeldt said he thought affluent
investors are likely to maintain large stakes in real estate. Often,
those percentages reflect multiple homes and land holdings, which the
wealthy tend to hold onto. “Even those who’ve enjoyed considerable
upside on real estate assets are likely to retain them as long-term,
multi-generational investments,” said Mr. Sonnenfeldt, who was himself
a successful commercial real estate developer. He noted that 10% of
member assets are in their own personal real estate holdings. “Even
when the stock markets seem to be under pressure, luxury properties
tend to hold their value because many owners are under less pressure
to sell. Today, with the volatility in the stock markets and the
number of high profile scandals where investors equity has been
destroyed, investors may be attracted to owning physical assets such
as real estate, and therefore willing to pay a premium. When you
realize that America is still the greatest melting pot in the world,
and people from almost everywhere are welcomed like in no other
country, many American real estate markets have become globally
attractive, and this has added to the durability of these markets and
the properties in them.

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Sara Clemence reports from Forbes.com

In the wake of Hurricane Katrina’s devastation, some Americans–particularly Gulf Coast residents–may be wondering whether there are places in the U.S. that are safe from such natural disasters.

The short answer? No. The Midwest may not be vulnerable to hurricanes, but twisters drop in regularly. Major earthquakes don’t tend to strike New England, but strong winds can peel the roof off a northeastern house and snowstorms can shut down cities.

“Every location in the country is exposed to one disaster or another,” says Wendy Rose, spokeswoman for the Institute for Business & Home Safety, a Tampa, Fla.-based nonprofit insurance industry group that aims to reduce losses from natural catastrophes.

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By Les Christie, CNNMoney.com staff writer reports,

Home prices in many American metro areas have soared, and many of their residents are either pulling up stakes and moving to lower priced regions — many more are thinking about it.

Sometimes, these migrants are simply desperate to break into the housing market — they’re moving so they can stop renting and buy an affordable home of their own.

For those who own already, high-prices enable them to tap windfall profits — they can trade in expensive houses for comparable spaces at a much lower prices and pocket the difference.

In either case, “Affordability is a factor driving mobility,” says Mark Zandi, chief economist for Economy.com.

The trend is most pronounced in California, New York City and environs, the Boston metro area and northern Virginia

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John Adams offers advice on knowing what you can afford,

As you think about applying for a home loan, you need to consider your personal finances. How much you earn versus how much you owe will likely determine how much a lender will allow you to borrow.

First, determine your gross monthly income. This will include any regular and recurring income that you can document. Unfortunately, if you can’t document the income or it doesn’t show up on your tax return, then you can’t use it to qualify for a loan. However, you can use unearned sources of income such as alimony or lottery payoffs. And if you own income-producing assets such as real estate or stocks, the income from those can be estimated and used in this calculation. If you have questions about your specific situation, any good loan officer can review the rules.

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