Atlanta Real Estate Investors Alliance Blog

More and more I am hearing positive predictions for the housing market for the second half of 2011, as well as certainly for 2012 and beyond. I had the pleasure of hearing local economist Roger Tutterow recently, and he echoed some of the positive positions I have read and heard elsewhere. He noted that economic expansion truly resumed in the 4th quarter of 2010, and noted that consumer confidence always lags economic upturns. He noted that the risk of a double dip recession was a low 15%, and that with inflation coming back into the picture rates will be increasing by late this year or certainly next year. Of particular interest to us, he noted that homes in Atlanta are now fairly valued, the bottom has already occurred, and we will see a return to normal in 2013 or 2014. This matches the Case-Shiller forecasts for a return to a sellers market in that timeframe, and a likely housing shortage by 2015. Read More→

Recently, I spoke to a group of real estate investors and was asked this question: “What is the best way to make money in real estate?”  Easy answer: Internal Revenue Code (IRC) 121.

Since most of us aren’t CPAs, let’s look at this incredible way to structure a deal and get tax-free money.  Here are the basics of Section 121: If you are married, have lived in your house for two of the past five years, and then sell your house, you get to keep up to $500,000 ($250,000 if you are single) of the profit from the sale – TAX FREE!  Better still, the IRS says you can do this every two years! Read More→

Although the drop in default rates shows promise, the amount of shadow inventory still creates a dark loom over the future of housing prices, according to latest results from Standard & Poor’s U.S. Residential Performance Index. The shadow inventory of unresolved distressed properties is currently at an estimated $405 billion, representing a four-year housing inventory and one-third of the outstanding U.S. non-agency residential mortgage debt. The report states that full recovery will only occur once the supply of distressed properties shrinks to less than a quarter of the current volume. Additionally, the monthly liquidation and cure rates are at about 2.5%. This is due to an overall resolution rate of 5%, where these rates have lingered in the past nine months. The slowing first default rates allows borrowers to resolve loans and clear out the inventory instead of defaulting and adding additional units to the current inventory. Read More→

Lonnie Deals are among our favorite – and most profitable – creative real estate investing deal structures.  What’s a Lonnie Deal?  It’s when you buy a mobile home in a mobile home park for cash and then resell it with owner financing.   Lonnie Scruggs invented this technique, and that’s how it got its name. 

Lonnie got into real estate investing in 1971 at age 41.  He mainly bought single-family homes and rented them out.  In 1986, because he was tired of being a landlord, Lonnie decided to get into the note business.  Problem was, it was hard finding good notes to buy. Read More→