The Tale of the Foolish Real Estate Investor

We live in an information age where there are always "experts" wanting to sell you a new course on how to get rich in:

1. Real Estate
2. Your Own Business
3. The Internet
4. You Name It!

Wisdom comes as we get more mature and realize that there are really no "quick" solutions to anything and that includes creating wealth. A few years ago here in Williamson County, we saw loads of investors who swarmed into the area and purchased real estate by the bunches. The lenders were handing out 100% finance deals like the money would never end. Many of these "investors" went directly to local builders and bought 2-10 properties in specific subdivisions all at one time and all at 100% financed. I like to refer to this as "the era of irrational exuberance". Many of those of us who work this business full time knew that this was a recipe for disaster and the disaster is here now. We are seeing most of these properties now going to foreclosure right and left and although our foreclosure numbers here are dwarfed by many other areas of the country, they are still greater than we have seen in a long time.

So herein is the purpose of this article. There is a distinct difference between an investor and a "speculator". What we saw here in the past were many speculators, but not true investors. Investors recognize value and invest for the long haul. They recognize that business cycles will ALWAYS repeat themselves and trying to cheat a good investment with NO MONEY DOWN and expecting that there will never be lean times are unrealistic approaches to investing in real estate as a business. We are working with many investors from all over the country and have always attracted the SMART investors: those that recognize that money investments on the front end are required to be a wise real estate investor. There will be some great opportunities in coming months in Central Texas to invest in a growing market. And if you do so in a smart manner, over a period of years you will see a substantial return on your investment.

If you are looking for a REALTOR in this area that can provide sound real estate investment advice, counsel and services, please contact us. We groom new investors as well through our training programs and BLOGS such as this one. We'd love the opportunity to service your real estate investment and management needs!

This message is provided as a public service by The HBH Group, the premiere real estate group in Round Rock and Georgetown Texas. Contact us through our websites at: http://www.TheHBHGroup.com/ and http://www.TheHBHGroup.biz/ or call our offices at (512) 439-3772 or toll-free (877) 268-1877.

FHA/VA - The New Sub-Prime?

Well you would have to be a hermit not to have heard all the fallout the last 12 months from the destruction of the sub prime lending industry. Last Spring, during one week I heard there were 6 different lenders that went bankrupt within that seven day period! Unfortunately, the sub prime debacle had some bad effects on our market overall, extending a period of price aggressiveness beyond all comprehension, putting many real estate markets around the country out of the affordability reach of most buyers. This has in many ways exacerbated the slow down in the real estate industry by now severely limiting the number of qualified buyers in most markets around the country.

Hooray for the feds! They have once again come to the aid of the common man by relaxing some of the stringent requirements around FHA and VA loans in order to stimulate the real estate buyers to stay in the market and the strategy IS working. Last week, they also increased the FHA funding limits within the Round Rock area to $288,750 which will pave the way to more expensive housing now being funded by FHA, so the move up that you have been desiring may now be possible! FICO credit scores all the way down to 580 are eligible for the best FHA rates. FICO scores as low as 550 will be considered for a slightly higher rate. This also makes it possible for a lot more homeowners to refi into a great FHA rate.

There's every reason to believe 2008 will be a great year for Real Estate in Central Texas. There is a pent-up demand for housing in Central Texas that has to break loose soon. The local economy is booming, and people are moving here in ever increasing numbers. The overwhelming majority of borrowers can get financing when it's time to buy a home. And we all know what a wonderful place this is to live. So my advice is make that move NOW.