Real Estate Investment: New Cash Flow Calculator Tool

One of the most important things I teach in my real estate investment classes is to do your due diligence. This point can't be stressed enough. I teach all of my students how to do a cash flow analysis and give them the tools to do it as they research investment properties. All too often I have a student who approaches me after class asking for help with an investment property they did not do their due diligence on and now need help.

A new online tool is now available as a resource for investors who seek greater transparency in real estate investing. The tool allows investors to select an initial investment amount which then visually displays their potential returns over the lifetime of the investment. 

To see how the tool can work for you, visit Acquire Real Estate's website. If you have questions on due diligence and would like to speak with someone at Investment Resource, we invite you to contact us by email or phone. We enjoy empowering the real estate investor and are here to help!

Source: https://cre.tech/real-estate-crowd-investi...

Local Orange County Real Estate News

 Ritz Carlton Laguna Niguel Hotel Sold

2015: Orange County Hotel Sales Dollars Doubled:

Fewer hotels sold for more money last year in Orange County.

Twenty-seven hotels sold in 2015—down by three properties from 2014—but they traded hands for $1.75 billion—up 115% from the previous year’s $816 million, according to numbers from Irvine-based Atlas Hospitality Group.

Atlas said 2016 sales volume will fall about 25% from 2015 numbers as larger buyers pull back from the market and more hotels are available for purchase.

The consultant and broker said financing would increase by up to 1 percentage point and it expects the median price per room to decline by up to 10%.

The median price per room in Orange County last year was $135,000, an increase of about 12%.

The average price per room was $271,000, up 64%.

The $426 million deal for the Ritz‐Carlton, Laguna Niguel in Dana Point was the priciest local hotel buy in 2015.

Orange County’s total dollar volume in 2015 was 18% of California’s $9.5 billion in hotel sales.

“By any measure … it was a record‐breaking year,” Atlas said.

Good News for Single-Family Investors

New Wave of Foreclosures May Be a Good Sign for Investors

According to a recent article by NREI (National Real Estate Investor), there may be a spike in new foreclosures as banks take action on backlogs of bad home loans. 

"Legislative and legal dams have held back some foeclosure activity for years," says Daren Blomquist, vice president at RealtyTrac, a data firm that tracks foreclosure trends. "In states such as New Jersey, Massachusetts, and New York, a flood of deferred distress from the last housing crisis is finally spilling over." 

Many of these properties have been in default for a long time, and may even be vacant. They may eventually sell at low prices that drag down overall home prices in their markets. These thousands of home may also provide an opportunity for investors. 

To read the full article, visit: NREI

Source: http://nreionline.com/news

Top New Financial Terms You Need to Know

 real estate financial terms

As a broker with investor clients, it is important to keep up with the current financial trends and terminology. To give sound real estate investment advice, brokers need to be aware of the newest terminology circling the investment world.

 

Investopedia recently made a top ten list (A shout-out to Letterman?) of the most trending financial terms. Read through the list and note which you already knew and which are new to you. You may be surprised.

 

10. Backdoor Roth IRA

Coming in at number 10, Backdoor Roth IRA may offer anecdotal evidence that older savers are looking to build a bigger nest egg. A “backdoor” Roth IRA allows wealthy individuals who have reached their contribution limit for a regular Roth IRA to contribute more to retirement. As more than 10,000 boomers retire every day and the threat of a retirement crisis looms, investors are looking for new ways to save for retirement.

9. Fintech

Fintech has been a buzzword for a few years now and has taken center stage as robo-advisors and mobile apps for trading stocks threaten to bring down “legacy” financial companies. The rise of fintech will continue as Millennials, tethered to their mobile devices, look for new ways to “hack” the investing world.

8. Gamma Hedging

Gamma Hedging is an active trading strategy meant to hedge risk on options trades. Gamma hedging, tactical trading and intraday momentum used to be for hedge fund managers exclusively, but as technology disrupts many professions that had high bars of entry, more retail investors are becoming sophisticated active traders.

7. Tactical Trading

Tactical trading describes the strategy of active traders, particularly hedge fund traders. As technology disrupts investing – as it has done in so many seemingly permanent domains of life – many investors are becoming more actively involved with alternative investing strategies.

6. Intraday Momentum Index

The Intraday Momentum Index is a technical indicator used by day traders to signal when a stock is trending up or down. High volatility is good for day traders, and many traders were looking for ways to capitalize on markets’ high volatility this year, in particular over the summer when stock market gyrations gave many investors whiplash.

5. Unicorn

The high-profile success of tech startups like Snapchat and Uber, with their valuations at over one-billion dollars and negative cash flows, prompted skeptical investors to label them “unicorns”: mythical creatures that can’t be real.

4. Exchange-Traded Mutual Fund

As fees increase and returns languish for traditional mutual funds, investors are researching new products, like ETMFs, that combine the advantages of investment strategies of an actively managed mutual fund and the performance and tax efficiencies of an ETF.

3. Negative Interest Rate Policy

The European Central Bank experimented with unconventional monetary policy in 2015 to fight off deflation and pull Europe’s economy out of the doldrums. Negative interest rates penalize savers by making them pay to save. For example, in a regular savings account that offers 5% interest, when you deposit $100, the bank pays you $5 at the end of the year. With a negative interest rate of 5%, if you deposit $100, at the end of the year your bank account only has $95 in it.

2. Grexit / Brexit

In 2015, the global economy was shaken by the possibility of a Greek default on sovereign debt and the failure of the Eurozone as a common currency union. The discussion of Great Britain and Greece exiting the EU prompted us to create these terms.

1. Smart Beta

Smart Beta is a new, popular financial product that attempts to beat indexed funds, but many investors are still not familiar with it. The popularity of smart beta in the industry this year led it to being Investopedia's top term of the year. Because the term is so new and asset management firms don’t always mean the same thing when they use it, investors looked for a second opinion on Investopedia.

Source: http://investopedia.com