1 in 5

About one in five subprime mortgages made in the last two years are likely to go into foreclosure, according to a report released yesterday, ending the dream of homeownership for millions of Americans.


At that rate, about 1.1 million homeowners who took out subprime loans in the last two years will lose their houses in the next few years, the report said. The foreclosures will cost those homeowners an estimated $74.6 billion, primarily in equity.
The report, written by the Center for Responsible Lending, a research group in Durham, N.C., was based on data supplied by Moody’s Economy.com. Researchers examined more than six million mortgages made from 1998 until the third quarter of 2006; the report is the first nationwide study on the performance of subprime mortgages. It includes projected foreclosure data for all major metropolitan statistical areas. The highest default rates are expected to be in cities in California, Nevada, Michigan and New Jersey as well as Washington, D.C.
The report offers a somber assessment of loans that had helped millions of Americans with blemished credit attain homeownership. About 2.2 million borrowers who took subprime loans from 1998 to 2006 are likely to lose their homes.

Rates

NATIONAL OVERNIGHT AVERAGES
TODAY
+/-
LAST WEEK
30 yr fixed mtg

5.73%
5.74%
15 yr fixed mtg

5.22%
5.09%
5/1 ARM

5.79%
5.65%
30 yr fixed jumbo mtg

7.26%
7.02%
5/1 jumbo ARM

6.54%
6.13%

Can I Flip Properties?

The million dollar question that everyone asks me is "can I still flip real estate". The answer I give really depends on who is asking. For the novice investor I would simply say no, the market conditions are not suited for this exit strategy. For a seasoned investor I would ask a few questions. What did you buy the property for? What are your comparable sales? How much do you plan on improving the property? How long are you able to carry the property before you "must" sell. These questions are key to whether it makes sense to use a flip as the exit strategy. If you are able to over improve the property based on the neighborhood and still be at or under market value and are able to carry the property for 2 to 4 months then it would be possible to still flip the subject property. In all other cases I would recommend a buy and hold strategy. I will discuss these in later posts.

Investing 101

The reason I am starting this blog is because I am tired of all of the "pie in the sky" ideas out there about real estate investing. We will share "real world" investing relating to today's market. This blog will be about networking and trying to make some real money for both new and seasoned investors. I will share deals that my company has done as well as potential deals currently available. I hope this will be a place to come to get answers and information that is relevant and not just "theory".