By Rick Tobin

Since the official start of the ongoing Credit Crisis (www.thecreditcrisis.net) back in the Summer of 2007, real estate values have experienced wide ranging price swings. With real estate investments, the primary cause of a “boom or bust” cycle for property values is typically related to the available supply of money to get us in and out of the deals as quickly and efficiently as possible.

When money is tight due to higher rates and more challenging bank underwriting guidelines, then property values tend to fall. If money is easier when interest rates are lower and underwriting guidelines are more flexible, then home prices tend to rise in value.

After 2001, the Federal Reserve allegedly attempted to try to stimulate the U.S. economy, housing market, and stock market by taking short term interest rates down to 1% over the next few years.  As a result of the low short term rates, adjustable rates and sub-prime credit mortgage loans amortized up to forty (40) years became quite popular between 2001 and 2007.

As a result of the combination of interest rates near historical lows in 2002 through early 2007, home values increased significantly in most parts of the USA. In fact, many home values actually doubled in price during the period of just a few years.  Many investor “flippers” were buying, fixing, and flipping homes to other home buyers or investors while pocketing tens to hundreds of thousands of dollars of profit for just a few months of work.

Derivatives: When Trillions Later Equal Zero or Negative

Regardless of the alleged reasons for the start of the Credit Crisis, defaulted sub-prime mortgages represented less than 1% of all non-performing loans worldwide. The bulk of the non-performing debt was related to derivatives such as Credit Default Swaps (CDS).  A CDS is really just a “glorified bet” in that the seller of the CDS will compensate the buyer in the event of a loan default or “trigger event.”  As such, a CDS is a kind of a hybrid of an insurance and financial instrument.

At their supposed market peak, derivatives like CDS, Interest Rate Options Derivatives, and other complex financial instruments which “derive” (hence the “derivatives” name origin) their perceived value from underlying investments or financial bets such as the future directions of interest rates, reached a potential market value of over $1,500 trillion. This alleged $1,500 trillion value of primarily unregulated derivatives dwarfs all other assets worldwide combined by a multitude of times.

When the value of the derivatives began to implode after less and less buyers of these complex and risky investments wanted to take the risk to buy them, then the Credit Crisis began to worsen shortly after August of 2007. In fact, multiple large banks, investment banks, and insurance companies either completely imploded or were on the verge of collapsing prior to any government or Central Bank bailouts partly because their investments in non-performing derivatives exceeded the combined value of all of their other investments at the time. Additionally, many banks only had a tiny fraction of cash assets on hand as compared to their derivatives investments exposure.

As the financial markets began to “freeze up” due to the imploding and seemingly worthless trillions of dollars of derivatives, then lenders began to figuratively “slam their brakes” on making loans to consumers and small to medium sized businesses. This lessened supply of available capital coupled with the near insolvency of many of the largest U.S. financial institutions, led to much tighter underwriting guidelines and higher interest rates.

Just a few years prior to the official start of the Credit Crisis in 2007, the Federal Reserve had raised short term interest rates a total of seventeen (17) separate times in just a matter of a few years trying to possibly artificially suppress the rampant appreciation of home prices. This rapid escalation of home prices was related to the incredibly low interest rates and much more flexible and easy loan qualification guidelines back then with loan products such as “No Doc”, “EZ Doc”, “Stated Income”,  “Stated 5/1 Fixed”, “Option Pay ARMS” (adjustable rate mortgages with upwards of four (4) + monthly payment options), and credit lines or 2nds up to very high combined loan to value ranges (CLTVs) without any proof of income in many cases.

Tragically, many U.S. homeowners who chose adjustable rate mortgages for their first or second mortgage loans, their monthly payments may have later recast or doubled in payment amounts after their underlying adjustable index rates increased significantly in the final few years prior to the 2007 start of the “Credit Crisis” which only worsened in the Fall of 2008. In fact, the near financial implosion of the world’s financial markets during the week of September 29^th, 2008, as even stated by Fed Chairman Ben Bernanke in front of Congress in the Spring of 2009, was perhaps the most critical and notorious week in the history of world financial markets.

As mortgage payments began to increase or double in payments, foreclosure filings then increased significantly across America. More foreclosures, in turn, led to declining property values in neighborhoods nationwide, and the deflationary asset spiral worsened in 2008, 2009, and 2010 as median priced home values declined by 30%, 40%, and 50%+ in both prime and not so prime areas, unfortunately.

Japan vs. the USA: “Pop” goes the Asset Values

In the 1980s, Japanese real estate values skyrocketed partly due to a booming export industry related to lots of high tech gadgets. As the insanity of the market peak reached the upper limits in the 1980s before the Japanese real estate bubble went “pop”, the Imperial Palace (the Emperor of Japan’s main residence situated on over 1.3 square miles) was once valued by some financial analysts as being worth more than ALL real estate combined in the state of California during the same time period.

This comparison of all combined California real estate values as compared with only a 1.3 square mile Imperial Palace region in Tokyo is quite shocking when one considers all of the prime and expensive coastal real estate between San Diego and San Francisco which includes affluent regions such as Malibu, Pacific Palisades, Huntington Beach, Newport Beach, La Jolla, Santa Barbara, Big Sur, Carmel, and other expensive regions along the not so cheap California coast.

During the “Japanese Asset Price Bubble” time period between 1986 and 1991, stock values on the Nikkei index rose tremendously too. The asset bust which followed the “Asset Price Bubble” lasted for more than a full decade as both stocks and real estate values plummeted during this “Lost Decade.” Just like here in the USA, Japan’s financial leaders tried to take their interest rates as close to zero as possible in order to try to stimulate the stocks, bond, and real estate markets once again.

The Nikkei 225 stock index for the Tokyo Stock Exchange, which is Japan’s version of the U.S. Dow Jones index, hit an absurdly high level of almost 39,000 on December 29, 1989 during the peak of the Japanese Asset Bubble Boom. On March 10^th, 2009, the Nikkei index fell to a low near just 7,000 which is almost 82% below the market peak almost twenty years earlier in 1989. In early May 2013, the Nikkei index is closer to 14,000.

As a comparison to the boom and bust cycles of the U.S. stock market in recent years, today’s Dow Jones index levels are in the 15,000 range. It was just a few years ago back on March 9, 2009 that the Dow reached a Credit Crisis low of 6,443. How in the world did the Dow Jones more than double in value with a weak job market? The answer is called “Quantitative Easing.”

Japanese home prices increased approximately 160% over the period of just six (6) years shortly before their housing bubble burst in the early 1990s. By comparison, the median priced home in the United States appreciated almost 130% over a similar six (6) year time period between 2000 and 2006. It was the combination of cheap and easy money which helped fuel both housing booms.

Our ongoing six (6) year long Credit Crisis (2007 – 2013) has potentially been even more severe of a market downturn than even The Great Depression (1929 – 1939). As it pertains to real estate values back near their market peaks in 1929, after years of “The Roaring 20s” economic boom which boosted both stocks and real estate prices, home values only fell about 26% during the depths of the economic depression in the 1930s.

A major reason why home values did not drop as much as the 30% to 50%+ market drops from their peaks in recent years is that homeowners in the 1920s typically had to invest 50% down payments in order to qualify for a 5-year mortgage which ballooned or came all due and payable in 60 months. In the earlier years of this 21^st Century, 100% loans were very popular so the banks usually had more financial exposure and risks associated with residential properties.

If the property values appreciated significantly shortly after the acquisition of the home, apartment building, or industrial storage building, then the property owner kept all of the future equity as profits. On the other hand, if the values dropped so significantly at a later date and the mortgage debt exceeded the current property values, then many property owners just “walked away.” The rampant escalation of foreclosures nationwide, in turn, then led to massive price declines for homes, raw land, hotels and motels, office and medical buildings, and other types of properties.

Here Comes Inflation to the Rescue

The past several years, many economists have whispered or shouted “We don’t want the USA to go into a deflationary spiral like Japan back in the 1990’s.” Japan’s peak boom real estate prices and subsequent bust was equivalent to about a 64%+ price decline. In turn, American peak real estate prices fell 30 – 50% + for many homes, and upwards of 1,000%+ price declines for many land deals during the ongoing Credit Crisis.

What is the antidote to a deflationary asset spiral? The answer is INFLATION. How does America, and other nations worldwide, help create more inflation for asset prices like stocks and real estate when wages are either stagnant or continuing to decline right along with seemingly higher unemployment figures? One of the main answers is related to taking interest rates down toward near ZERO levels like they also have tried in Japan.

When 30 year mortgage rates hover in the 3% and 4% rate ranges right along with 5 to 10 year fixed commercial property mortgages (i.e., apartments, industrial, office, retail) for prime properties, then borrowers may better qualify for much higher loan amounts. Increased loan amounts then, in turn, leads to increased sales prices.

The numerous financial bailouts and strategies implemented by the Federal Reserve, and other Central Banks worldwide, along with various governments have tried to create even more money “out of thin air” in order to both try to drive interest rates downward even more as well as try to increase asset prices. Programs such as “Quantitative Easing” (or “create money out of thin air to buy up stocks, bonds, and real estate mortgages”) have succeeded in driving up the U.S. Dow Jones stock index above 15,000, gasoline prices up to $4 to $5 + partly since oil is traded in “Petrodollars” (“Oil for Dollars”), and increased inflation for consumer goods like groceries, clothing, and other items right along with home prices.

Buy Discounted Assets with Cheap Money, & Let Inflation Improve their Values

Between 2012 and 2013, home prices have increased between 6% and 30%+ in various regions of the USA due to the near record low mortgage rates, declining supply of available homes for sale partly due to many 3^rd party investors purchasing the foreclosed properties before they become available for sale to the general public on the MLS (Multiple Listing Service), and more motivated individual and institutional investors in search of finding yields greater than their negative net returns offered by their banks’ savings account rates now.

Inflation and deflation are both “double edged swords” depending upon which side one may be on today. For example, a U.S. Dollar created one hundred years ago in 1913 was worth a true Dollar. That same U.S. Dollar, after factoring in 100 years of inflation, may now be worth just 3 to 4 cents, sadly.

On the other hand, the median priced home in the U.S. back in the early 1950s was worth approximately $17,000. Depending upon the location of that same home today, it may now be worth $200,000 (inland) to $1 million + (coastal). While inflation may be the enemy of a currency, it may also be a great ally and friend to investments like real estate.

After the Great Depression ended in 1939, those savvy investors who had either cash or access to cash were able to find some exceptional real estate investment deals for a fraction of their market values just a few years later. Many families were able to create the bulk of their families’ generations of wealth by buying their discounted investments either during the depressed economic time periods or shortly thereafter.

Let’s hope that the financial markets continue to improve so that more real estate investors will soon benefit as well just like so many investors have in the U.S. stock market in recent years as the Dow Jones has more than doubled in value since early 2008 in spite of a questionable economy. Historically, commercial real estate cycle booms tend to follow the recovery of residential real estate by 12 to 18 months so hopefully commercial real estate recovers much sooner as well which may then help improve our job market.

Author: Rick Tobin

Rick has an experienced and diversified background in both the Real Estate and Securities fields for the past 25+ years.  He has had hundreds of articles published nationally in magazines, newspapers, internet sites, newsletters, and other sources, and has also appeared as a guest on various television shows as well as in seminars about real estate and financial information.

Rick has an extensive background in the financing of residential and commercial properties around the U.S. His funding sources have included banks, life insurance companies, REITs (Real Estate Investment Trusts), Hedge Funds, and foreign money sources.

He has purchased numerous investment properties in multiple states, including government and tax foreclosures, All Inclusive Deeds of Trust (AITDs), Land Contracts, Lease Options, and he has purchased significant amounts of mortgage investments.  He has worked in the development of hundreds of residential properties, including single family homes, townhomes, condominiums, and apartments.

Contact Information: Rick Tobin – 12424 Wilshire Blvd., #630 Los Angeles, CA 90025   Email: rtobin22@gmail.com  Phone: (310) 571 – 3600 ext. #203   CA DRE #01144023

Ricks’ website: www.thecreditcrisis.net

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Reesio, along with some of the most valuable partners in the real estate industry, invites you to attend RealTech SF 2013. Taking place on April 30^th at the Fairmont Hotel in exhilarating San Francisco, this event is a must-attend- affair if you want to be in the know about the new and savvy real estate technology trends and products. With an amazing line up of guest speakers, to include Paul Levine, the CEO of Trulia, Kathleen Philips, General Counsel at Zillow and Steve Pacinelli, the Vice President of Real Estate Events at Realtor.com, as well as many more, this event is the equivalent to any of the humongous tech exhibitions held around the world, but is specifically for those in the real estate industry: real estate agents and brokers, real estate investors, real estate appraisers, mortgage companies, real estate inspectors…anyone involved in any of the real estate transactions you may conduct on a day-to-day basis.

Reesio was designed BY real estate agents FOR real estate agents, which is just one reason why you would be doing yourself and your clients a great disservice if you do not take the time to find out what Reesio can do to save you time and money. What happens when you save time and money? You make more—plain and simple. And that is what Reesio will do for you.

Reesio has developed a comprehensive solution to the mounds of paperwork and time-consuming tasks that bog down everyone involved in any type of real estate transaction. Investors, agents, home buyers and sellers, and everyone else involved in the process, from appraisers to inspectors to lenders will benefit from what Reesio has to offer.

Reesio Team: Jonathan Mui, Uyen Tran, Mark Thomas and John Irving Dulay

Founded by Mark Thomas, Uyen Tran, and Jonathan Mui, these entrepreneurs have put together a development team with skills particularly relevant to the real estate industry.  They saw the need, recognized the antiquated and cumbersome system currently in place and developed the technology that will change the way the real estate industry does business; the way you do business.

The Reesio dashboard enables you to do away with your Dropbox, Evernote, E-Signature and excess Email accounts. From the Reesio dashboard you can send messages, store and share an unlimited number of documents and even set up tasks for yourself and others to complete. Gone will be the never-ending telephone calls to ensure everything is getting done in a timely manner. Everything is centralized and in one place with the paperwork automatically tagged for a specific transaction and with you in total control as to who has access to what and when. To put it really simply: Reesio is like having a really efficient office assistant…one that is ALWAYS at work, ALWAYS on time and ALWAYS on top of what needs to be done.

In fact, how many times have you said to yourself “There are not enough hours in the day.” or “I’d give my right arm to have a clone.”? Consider Reesio your “mini-me”. Reesio saves, on average, 19 hours on every single real estate transaction you complete. What could YOU do with 19 extra hours today, tomorrow and every day thereafter? Most of Reesio’s clients use this extra time to generate more income, while others choose to take life a little bit easier by making time for the family, getting a weekly massage or pursuing a hobby that makes them happy. Whatever you do with the time and money Reesio saves you—is up to you. The point is this: Reesio frees up time that you would not otherwise have; time for whatever you choose to use it for!

Reesio is, simply put, an automated solution for all parties involved with buying or selling a property and is ridiculously affordable!  You can even try it for free! After your test drive, you then have the option to pay monthly; canceling your subscription at any time, or you can save even more by paying annually. And there is absolutely no limit to the number of documents you can create, upload, share and e-sign, or to the number of people you can include in the process.

Get started for free here https://www.reesio.com/, or sign up to attend @ https://www.reesio.com/realtech.

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Introduction

Imagine discovering one day that your neighbor, a complete stranger, or even the public at large has acquired the right to use part of your property without paying you a dime. Through what is known as a prescriptive easement, over a period of time others could gain the right to access, cross, or otherwise use a portion of your land without your consent. The rationale behind prescriptive easements is that long-time users of property can acquire a legal interest at the expense of property owners who have slept on their rights.[1]

Elements of a Prescriptive Easement

In California, a user of land may establish a prescriptive easement by proving that his or her use of another’s land was: (1) continuous and uninterrupted for five years; (2) open and notorious; and (3) hostile.[2]

The first two requirements are relatively straightforward. “Continuous” use means that the use occurred over a five-year period on occasions necessary for the convenience of the user. In some circumstances, even occasional or seasonal use is sufficient.[3] For example, one court granted a prescriptive easement over a road that was used to access hunting grounds only during hunting season.[4]

Use of property is “open and notorious” when it provides actual or constructive notice to the owner.[5] This means only that the use of the land is sufficiently visible that anyone who bothered to view it would be able to discover it. Generally, the use will be considered “open and notorious” so long as it is not hidden or concealed from the property owner.

In most cases involving prescriptive easements, the most difficult element to prove is hostility. A use of land qualifies as “hostile” if it is done without the permission of the owner. Whether the use of land qualifies as permissive can be a fact-intensive inquiry. Some older cases also focus on whether the use was made under a “claim of right,” which was sometimes interpreted as requiring proof of subjective intent on the part of the trespasser. However, the modern view rejects this additional “state of mind” requirement and looks simply to whether the owner has consented to the use of the property.[6]

Ways to Prevent Prescriptive Use

Perhaps the most important thing for a property owner to understand about prescriptive rights is how to prevent them from being acquired in the first place. There are several ways to ensure that a trespasser’s use of land does not mature into a prescriptive easement.

Somewhat counter-intuitively, often the best way to keep someone from gaining an adverse interest in your property is to give them permission to use it. The traditional method in California is to post a sign on the property that reads as follows: “Right to pass by permission, and subject to control, of owner: Section 1008, Civil Code.”[7] The signs may be posted either at each entrance of the property or at intervals of 200 feet or less along its boundaries.[8] If the signs are removed by trespassers or otherwise, they must be replaced at least once per year.[9] While this approach prevents acquisition of prescriptive rights, the drawback is that the property owner is publishing permission to pass, and therefore might actually encourage rather than prevent third parties from using it.

To prevent the general public from acquiring an easement, owners of coastal properties (land that lies within 1,000 yards of certain coastal waters) have the additional option of recording a notice of consent pursuant to California Civil Code, section 813. Significantly, however, recording such a notice will not prevent an individual trespasser’s prescriptive rights from ripening unless the notice is also served on a specific individual by registered mail.[10] Here again, the drawback is that the coastal property owner must allow the public to access the land in question. Owners of non-coastal properties do not need to record a notice of consent to prevent the general public from acquiring an easement in their land because there is already statutory protection under California Civil Code section 1009 preventing public easements/implied dedications over non-coastal land.

A third option is simply to provide express permission to the individual(s) using the land. Here, however, the property owner can later run into problems proving the use was permissive rather than hostile. To minimize risks, property owners should obtain and record a written agreement from each person using the property (including successors to the original user(s)) stating that: (1) any use of the owner’s property is by permission of the owner only; and (2) such permission is subject to revocation by the owner at any time in the owner’s sole and absolute discretion.

A fourth option is to physically prevent or interrupt any adverse use of the property by constructing a gate, wall or other barrier, or continuously monitoring adverse use. The downside to this approach is that interruption of the five-year period requires that the prescriptive use actually terminate. In other words, simply constructing a fence, changing a lock, or erecting a wall will not prevent the acquisition of a prescriptive easement if the adverse user picks the lock, climbs the wall, or hops the fence. Additionally, the construction of the physical obstacle could conceivably be used as evidence by the trespasser against the owner of the property that the use was, in fact, not permissive.

An Emerging Pitfall: Equitable Easements

Even if a property owner successfully prevents a trespasser from gaining prescriptive rights in his or her property, in some cases the trespasser may nevertheless be entitled to an equitable easement. An equitable easement may exist where (1) use of the property qualifies as “innocent,” and (2) the court balances the relative hardships of the parties and finds that the burden associated with loss of use by the trespasser is substantially greater than the hardship to the owner caused by the continuance of the easement.[11] “Innocent” merely means that the party is acting with a good faith belief that they have a right to maintain the easement. That belief can be based on reasonable reliance on the property owner’s acts or inaction, or even a justified belief in an existing prescriptive right![12] Thus, a user of land who “just misses” perfecting easement rights via prescription (by, for example, failing to establish the element of hostility) might still acquire an equitable easement in the very same property.[13]

Scope

Finally, understanding the potential scope of a prescriptive (or equitable) easement further underscores why its prevention is important. Once an easement is established, courts may allow an increase in the degree of the use of the easement.[14] Permissible increases in degree of use might include the number of people using the easement, provided the increase in use was a reasonably foreseeable development.[15] In contrast, courts rarely allow changes in the manner or type of use of the easement.[16] Thus, for example, most courts would probably not allow pedestrian use to increase in scope to vehicular use.

Conclusion

Prescriptive easements can arise in a wide variety of circumstances, and the law views every piece of real property as unique.[17] Thus, property owners should diligently monitor their property and carefully consider all available options for protecting and enforcing their real property rights.[18]

About the Authors

Lou Segreti, Troutman Sanders, San Diego, has extensive experience representing both plaintiffs and defendants in complex litigation matters, including real property disputes, in federal and state courts. He recently served as lead trial counsel and obtained a judgment in his client’s favor in a novel easement dispute involving several issues of first impression under California law.

Mike Whitton, the Managing Partner of Troutman Sanders’ San Diego office, advises and counsels public and private companies, real estate investment trusts, and lending and financial institutions on a variety of sophisticated real estate and business transactions. His transactional practice focuses on large-scale joint ventures, portfolio acquisitions, real estate development, and debt and equity financing and restructuring.

Andy Puls, Troutman Sanders, San Diego, represents local and national clients in a variety of commercial contexts, including breach of contract claims, business torts, real property disputes, and insurance coverage. He also served as trial counsel in a dispute regarding a prescriptive easement. Andy was named a ‘Top Young Attorney’ by the San Diego Daily Transcript in 2012.

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Selling a home is not a simple task. As a seller, you can spend months inviting dozens of people to your home for an open house and you may still not get the offer you’d like to hear. This article will help those wanting to sell their home, make it more attractive to buyers.

The key to making your home preferred for a buyer is to think like a buyer. Most people are very attached to their homes. So, without knowing it, they are sending negative signals out to any suitors looking to purchase the home. In case you are feeling even a shadow of doubt on whether or not to sell your home, you will need to push these thoughts out of your head and remove any emotional attachment to the home.  Tell yourself that this is not your home, it is a product you are selling.

Remove all clutter. Throw away or donate items that you no longer need. A messy home will distract from the great features of your home.  It also leaves the impression that maybe you’ve been neglecting other things connected with the home. So go from room to room and remove everything that says “messy”. For example books on the floor and clothes on the chairs do not send the right message. All dishes should be clean and properly stored.  Replace old and worn bedspreads.

Consider storing items in a storage unit.  Make each room appear as large as possible.  Over the years, people tend to accumulate a lot of “stuff” that might clutter a room. This might include mismatched furniture or items that now block hallways. Consider storing excess stuff in a storage unit.

Be careful not to just pile all your junk or dirty clothes into the closets. Remember, a potential buyer will most likely look in the closets to assess the size and whether it can handle what they might want to store in it.

Make your house as sparkling clean as possible. Vacuum all rooms. Dust all counters and furniture. Clean all bathrooms.  Re-caulk the tubs, showers and sinks. Clean all windows and mirrors. Get rid of cobwebs hanging from the ceilings. Hang up new towels.  Replace old and worn rugs. Add air fresheners to the bathrooms. Clean stove tops, ovens, refrigerators, microwaves and refrigerators.

Make minor repairs. Fix holes in the walls, broken drawers and leaky faucets. Fix doors that don’t close properly. If possible, paint the home in a neutral color. Replace burned-out light bulbs.

Don’t forget to clean outside. Curb appeal is very important and is the buyer’s first impression. Cut the grass, rake the leaves, trim the bushes and pull the weeds. Plant flowers to add color. Sweep the driveway, porch, patio and sidewalks around the home.  Make sure your address can be clearly read.

You’ve performed the above steps to prepare your home for sale. Now, just sit back and wait for the homebuyers to come running with their offers.

Heather Roberts is a content writer from London, UK. She is searching for new challenges and hence often moves to different places. Heather writes about moving and storage services in Battersea .

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Whether you intend to sell a property or rent it, whether you invest in commercial or residential real estate, understanding the potential value added by energy efficient upgrades can help you to get the most out of any remodel or renovation. By reducing the amount of energy your building uses, you can both reduce the cost of utilities every month for the life of the property, and increase the value to any potential buyer.

The ‘thermal envelope’ is an important aspect of any building’s energy management. This refers to the barriers owners and builders put up to prevent hot or cold air from escaping and pushing up the cost of climate control such as insulation and weather stripping. In order to improve the thermal envelope, ensure that the building is well insulated, especially the roof and/or attic space.

Replace any single pane windows with double and any external wooden doors with steel. Most modern windows will come with a low-emissivity coating to let in the light but not the heat of the sun. They’ll also have non-conductive gasses injected between the panes to keep thermal transfer through the glass down to a minimum. Newer steel doors will be equipped with a magnetic strip, which will create an effective seal with the jamb, requiring little to no other weather stripping. Just the window replacement could add up to $9300 in resale value and save up to $456 each year on utility bills.

Manicured lawns are one of the most inefficient features of any home or commercial building, but they are almost non-negotiable from a seller’s perspective. Still, there are some landscaping changes that can help you on your way to a greener building. Strategically planted trees that shade your windows will help to reduce summer cooling costs significantly. You can also impact heating costs in the winter by planting to create a windbreak.

The upfront cost of energy efficient appliances may be more than you want to pay, but the savings in utility bills will allow you to recoup those expenses fairly quickly and continue to save for the life of the building. Improvements in kitchen appliances are saving consumers millions of dollars already, and innovations like tankless water heaters and mini-split ductless air conditioners are taking efficiency even further.

Making more extensive retrofits to incorporate a solar power system into your building can actually leave you making money for part of the year, depending on where you live. Installing solar panels and a grid-interactive inverter will allow your building to generate its own power, and any excess will be sold back to the utility company. During the winter and other times when the sun isn’t shining, you will still be connected to the standard grid for your power supply.

These systems will require a steep initial investment, but with the constantly rising costs of power, the savings will increase exponentially. How much money you save will depend on how much sun exposure you get, how much power you use, and the cost of power in your area, but in general it can amount to over $1000 per year. At this time there is also a 30% federal tax credit for qualifying residential or commercial solar power systems.

Author Info:

Frank Newhouse is a freelance writer with experience in property management and personal finance. He currently writes for AC Florida, which connects customers in the Miami area with the air conditioning services and supplies they need.

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By Martin Orefice

The goal with buying real estate, specifically with investment real estate, is to make money on the purchase. Timing is crucial with any realty transaction and as we enter 2013, it’s time to look at some housing gold mines. There are a number of cities in America that are ripe for investment picking, and I have outlined the Fab Four spots.

1. Albuquerque, NM
New Mexico is a state that often goes unnoticed, especially when it comes to investment potential. With the listed housing median down 9.6% over the last year, but up 0.5% in the last month to USD $169,900, this place could be a unique realty move to make. With high appreciation rates in recent history and indication that the market is moving upward this city would be ideal to purchase a house. One unique note to take down for this location is that it could be a perfect place to purchase real estate for retirement. In 2011 it was listed by Forbes as one of the best places in the U.S. to retire. Cities that have a progressive and growing university, such as this location does with the University of New Mexico, usually have investment promise. The students and their futures are going to be in the area for a long time, and this makes it a stable environment.

2. Miami, FL
Luxury can be found in Miami, Florida. With the weather and culture combined with somewhat affordable real estate, investment opportunities are plentiful. In November 2012, the Miami and Fort Lauderdale metro areas had a median listing price of USD $212,000. Over the last year housing has been down 6.2%, but just in the last month it has jumped 3.5%. This is a good sign because the median list price is lower than it normally would be and the Miami area will not depreciate. It’s also a positive sign to see property on the upswing as we head into 2013, and this could be a perfect time to slide in and take advantage of the market. It is very important when looking in Miami for housing to take account of the neighborhood and other surrounding areas. There are parts of the city that are a little bit rough and there is a reason that median is slightly lower. If you choose to invest in a nice area, expect to be looking at listings slightly higher than 212,000 for a fairly modest house. Miami is known to beexpensive, but it becomes an affordable investment when looked at long term. The lifestyle and property of Miami isn’t going anywhere for a reason and the appreciation rates make it worthwhile. Another investment opportunity in the panhandle would be to look at Florida rent-to-own homes. These can be prime if you want to bide time while taking over a house.

3. Cedar Rapids, IA
It doesn’t have sandy beaches but if you are looking for a money making investment paired with a great quality of life, Cedar Rapids might be worth a glance. With a median listing price of USD $113,000 and assistance from the city on a down payment for purchasing in the redeveloped flood zone, the invest opportunity is glaring. This would be a place to make money, but not huge money. It would also be a nice place to settle with a family for a while, as the crime rate is incredibly low when compared with the national average and the school system is stellar. Buying real estate in Cedar Rapids is a smart and affordable investment that doesn’t have the glamour of other options. If you are interested in buying or living in a very pleasant city with the potential to make money, this place could be viable.

4. Boise, ID
Idaho is a state that flies under the radar in terms of investment potential. The quality of life is unreal as activities like skiing and mountain biking are on the door mat. Aside from the quality of life, Boise is moderately priced and centrally located in the northwest of the country. The sales price of housing has gone up over 32% from last year, with the median right around USD $152,000. Boise is an investment hotspot that is going up rapidly enough to act somewhat quickly if considering a purchase, but don’t panic. With the prices generally low, any increase in housing cost over the next year will most likely still be in your budget if it is now. The investment potential in Boise, somewhat similar to Cedar Rapids, is safe with money making potential. It isn’t the most glamorous of choices, but provides the opportunity for steady financial gains. Boise is growing and would be an ideal place to settle down for a period of time if your career allowed. Forbes lists Boise has the 40th best place to live for business and career opportunities.This city is another affordable destination with luxury-type activities and lifestyle just outside the door.

These four cities are prime real estate options that often go unnoticed. Miami is a well-known place, but people don’t usually look there for an affordable investment. The other three cities are places of great appeal that bring moderate money making potential with them. Investing is something to be careful with, and these are all safe bets for you heading into 2013.

Author: Martin Orefice

Martin is a husband, father, and entrepreneur with an interest in personal finance and real estate. He established USLeaseOption.com, the premier site for finding Florida rent-to-own homes.

Link for USLeaseOption.com: http://www.usleaseoption.com/rent-to-own/florida

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Issue #4 of Real Estate Investing Wealth Magazine is now live!

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Dawn Rickabaugh is featured on the Cover. Dawn is the broker/owner of Note Queen Capital Funding, where she buys seller-financed notes across the country, and helping others do the same.

http://itunes.apple.com/us/app/rei-wealth-mag/id552053319?ls=1&mt=8

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To thank you for your continuous support to the Real Estate Investing Wealth Magazine, we’re giving away gifts to start the year 2013! Click the image below to get your gifts. Happy New Year!

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This infographic provides a general guide on what home buyers are looking for in a home. As an investor, you’ll need to be much more specific. You’ll want to only invest in homes that are in demand in the area that you invest. For example, if you fix and flip homes, and buyers in the area you invest are looking for 3 BR, 2 BA homes, don’t buy a 2 BR, 1 BA home. You’ll end up with a property that nobody wants to buy. Or, you’ll end up selling for price much less than you planned for.

Got Infographic from: http://pinterest.com/pin/69946600433331631/

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At a time when the real estate market is still fairly slow, is it possible to make money in real estate and make it quickly? Yes! Several strategies can work even in a slow market whenmillions of homeowners are seeking to get rid of their homes at almost any price.

On the other side of the coin, many people still want to pursue the American Dream and own a home, but they do not have a lot of money saved for a down payment and/or they are trying to rebuild their low credit scores.These people are primed to sign a lease option agreement, an approach to renting/owningwith very little to no money down, and a strategy that is making money for many real estate professionals and newbies.

Whether you own properties, or are willing to act as a middlemanfor an owner seeking to unload his/her home to a buyer, a lease option agreement can make you money. A lease option is, in essence, two contracts offered when someone moves into a home. The first contract is a standard lease, while the other is a purchase option agreement.

Here are the essentials of a lease option:

• The lease can run for as many years as you’d like, though usually go from one to three years.Consider how long it will take the buyer to qualify for a mortgage, as you establish the number of years for the contract. Most pros recommend a maximum three-year lease. Take a security deposit to establish the landlord/tenant relationship rather than a buyer/seller partnership.
• Seek assistance from a mortgage specialist to determine if the tenant/buyer can qualify for a mortgage later.   Only work with tenant/buyers that have the ability to purchase the home later.
• A lease option contract differs from a standard lease in that the burden for repairs and maintenance often shifts from the owner to the renter. This can save the owner thousands of dollars, of course. Many owners do establish a ceiling for repairs, similar to a deductible on an insurance policy. Some real estate professionals recommend a $5,000 ceiling for repair costs in one year in lease option agreements.
• Be sure to pay all taxes and insurance so that the tenant does not act too much as a buyer.
• The lease option purchase agreement differs from a standard purchase agreement in that it specifies the length of the option purchase time period and the cost of the purchase option to the buyer. These terms are flexible. The renter is expected to buy the home before the end of the lease purchase agreement, the second contract in this arrangement.
• Obviously, a major sticking point will be how much of the lease option payment and monthly rental payments will apply to the down payment on the home. You will need to negotiate these details.
• If you are the middleman (investor) on a lease option agreement between the seller and the tenant/buyer, this is called a sandwich lease option.  Say a seller lease options his home to you (the investor) for $100,000 at $700 a month for three years. You then lease option the home to a tenant/buyer for $125,000 and $900 a month, giving the tenant/buyer only one year to purchase the home. You would then make $200 a month cash flow and $25,000 in profit.
• Lease options provide a creative vehicle for real estate investors to negotiate “terms” that can increase their profits.
• Make sure the lease option deal is a win-win solution for all parties involved (the tenant/buyer, the seller and the investor). If it isn’t, look for a deal that is.
• Make sure that all of your lease option agreements are reviewed by a real estate attorney. You should have your option signed before a notary, escrow the deed in case anything happens to the seller, and record the mortgage to decrease the chances of the seller backing out. You also want to use words such as “landlord” and “tenant” rather than “seller” and “buyer” to short-circuit claims that the renter has equity in the property for which s/he might sue.

Lease options can be a great way to profit in today’s market, even as you inject very little of your own cash. What do you think?  Are Lease Options a part of your real estate investing strategy?  Please leave me a comment below and let’s talk about it!

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