Recent Statistics of Interest in Foreclosed Properties

According to a recent Harris poll, less buyers are interested in purchasing foreclosure or short sale properties.  And when they are interested, a whopping 36% have unrealistic expectations that bank owned properties will sell for a discount of 50% or more off the price of a non-foreclosure property.  For more details, here is the link to the article.

Walking Away

In the article, new statistics are also provided concerning what percent of the population would consider walking away from an underwater mortgage.  This topic seems to keep showing up in the press.  The good news is 59% of respondents would not walk away from their homes.  One percent would make walking away their first option.  In other posts on this blog, we’ve learned that those whose loan to value ratio exceeds 125% are the most likely to walk away.  This one percent may already be there and see no other option out of their situation.

Today I went to a 2 hour class provided by RE/MAX Properties, Inc and it opened my eyes to possibilities.  I have been aware of the ability to invest in real estate in self directed IRAs for 10 years, but today’s class with Jenn Dizmang was more sophisticated and evolved than the classes I’ve attended before.  Previous classes were sales pitches for black boxes given by people who would make money from participants.  Today’s class explained what is possible and how it is possible.  And I know we only touched the surface.  The book Jenn recommended to learn more is by Hubert Bromma and is entitled How to Invest in Real Estate With Your IRA and 401K & Pay Little or No Taxes.  I’ll include it in my Recommended Books Page but I have not read it yet - just taking Jenn’s word for it.  For real estate investors who want to take advantage of the current market and put hard assets in their retirement account it is something to consider and learn more about.  Bricks and mortar.  Real estate.  Yes it is possible but it has to be done correctly.  That means understanding real estate investing before using retirement assets to do more.  You can’t take capital losses in a tax deferred account.  Everyone who has taken a hit in the stock market knows that.

Let me emphasize that I don’t give tax, financial, or legal advice.   I don’t have those credentials.  You need to talk to the professionals you know to get that type of advice.  What I want to give you through this blog is a general knowledge of all the opportunities available to people who want to manage their money and investments well.   When I was a financial advisor (no longer licensed), I always referred to real estate as the commodity portion of most investor’s portfolios.  For most people that is the home they live in.  That’s why I found myself getting my real estate license over 6 years ago - to diversify my own portfolio with real estate investments.  The current stock market shows why diversification is important.  The 4 major asset categories are cash, bonds, equities, and commodities.  A lot of people have flocked to gold (a commodity) in the past few years and the price has been driven up.  Classic supply and demand.  The real opportunities lie in real estate and other depressed assets.  Building a foundation at a time like now is the key to great wealth.  I’m looking forward to the next up cycle in the economy because I am positioning myself now to take advantage of the opportunities.

As always, I suggest reading everything you can get your hands on, either on the web or in books, to learn how people who are successful investors have done it.  You don’t have to learn everything the hard way.  By gathering ideas that make sense to you and taking calculated risks, you will be amazed at what can happen.  I grew up poor but I vowed to never be poor again.  I hated risk at first but I’ve learned to be excited about taking educated risks with things I understand.  You have to educate yourself first and then take your first steps.  You don’t want to be foolish and driven by fear or greed.  It’s an exciting time filled with potential.  I wish you much success.