Self storage is not particularly glamorous. In fact, it is so mundane that for years it was “shunned by the real estate investing elite” according to its own REIT, Public Storage (PSA). Now, however, the tune is changing. While the housing market and the commercial market struggle and stagnate, self storage is more attractive than ever before. In fact, PSA hit a new share high earlier this week of $104.27, leading the Wall Street Journal to speculate that “the self storage sector – along with a few other unglamorous niches – could provide relatively decent returns amid the current market environment”[1].

While you may not be interested in investing in PSA stock, this trend is indicative of a movement by real estate investors toward investing in public storage properties. While most arenas in the real estate market are having trouble, a number of REITs are doing quite well thanks to judicious investing in previously neglected niches like this one. Many investors follow REIT investments and then use them to design their own investing strategies, which could mean that self storage is in for a “bull run” according to some experts.

Do you use REIT investing to guide your real estate investing decisions?

Thank you for reading! Your comments and questions are welcomed below.

In Illinois, a timeshare scam has elicited “dozens of complaints” since January, thanks to the implementation of a tried-and-true scam method: the illicit money wire[1]. Individuals pretending to be timeshare resellers contact the owners of the timeshares. Not surprisingly, many of these owners are currently struggling to make the payments on these vacation “deals” and may be a little too eager to make a sale. The “reseller” informs the timeshare owner that they have found a buyer or a renter for the timeshare, then another con artist contacts the owner posing as the buyer and urges the sellers to go through with the sale so that they can take ownership of the “property.”

Of course, this transaction requires a service fee or a security deposit that can, not surprisingly, be sent via a money wire or charged to a credit card. About the time that this transaction clears, the con artists clean out and close the bank account that received the money and then take off, leaving the original timeshare owners still the owners and out a couple hundred to a couple thousand dollars. Some victims have wired as much as $5,000 to these con artists.

Illinois attorney general Lisa Madigan is not only cautioning timeshare owners against this specific scam, but also encouraging them to remember that they should “never assume they will recoup the purchase price of their timeshare, especially if they have owned it for less than five years and the location is not well-known.”

Claiming that their network is the “wave of the future for real estate,” five Canadian real estate companies are working together in a commission-free sales network to challenge their national MLS system[1]. So far, the network has sold more than 85,000 properties and believes it has saved its customers more than $1 billion in commissions. Currently, 12,000 homes are listed through the network, but the vast majority of Canadian homes for sale are still listed on MLS.

Like the United States’ non-commission sales groups, the network charges a flat fee for the service of selling a house. However, while these groups simply compete with more conventional realtors in the United States, in Canada the Canadian “Competition Bureau” believes that the new system could be eliminating competition – at least among member agents – and that this could be detrimental to the network itself as well as to homeowners attempting to sell their houses through the system. Additional complaints include that the flat fee compels sellers to pay for services that they may not want or need.

In the United States, these types of systems are flourishing, particularly in today’s economy when many sellers want to keep as much of the money for their sales as they can. Do you think that these types of home sales programs are good for the real estate market and those people trying to sell their homes, or do you agree with the Canadian Competition Bureau that they place too many regulations on participating agents?

Thank you for reading! Your comments and questions are welcomed below.

In its most recent market forecast, Veros Real Estate Solutions predicted that the Houston and Dallas metro areas in Texas would show the strongest home price appreciation in the next year[1]. In fact, Texas cities as a whole are expected to lead the nation in appreciation, taking four of the predicted “top ten markets” in the study.

Predictions for strength also apply to some California markets, which are not as “robust” as hoped but are holding steady, along with Illinois, Iowa and Alaska. Florida, which, thanks to the growth in Miami had been expected to come out of its real estate slump in the relatively near future, struggled, with four metro areas taking spots in the projected weakest markets for the coming year. However, Florida and Nevada, both “hardest hit” states, do appear to be depreciating at a reduced rate, which could be good news in the long run since this is, according to the study, “tangible indication that things are getting better as time moves on.”

Other states with good forecasts are Louisiana, Missouri, Arkansas, Oklahoma, Nebraska and South Dakota.

Do you think that these positive forecasts will hold?

Thank you for reading! Your comments and questions are welcomed below.

Nearly 80 percent of homeowners believe that their real estate agents are selling too low, according to a recent HomeGain survey, and the disparity between market reality and seller expectation is throwing a serious monkey wrench in market movement[1]. While real estate investors and conventional home buyers are in the process of taking their pick from the massive, discounted inventories at their disposal, homeowner optimism about the value of their homes has climbed 3 percent since last quarter and 18 percent of sellers are sure that prices are going to rise in the next six months. The same survey indicates some pretty serious buyer discontent, as 70 percent believe that the homes they are viewing are overpriced for the times and the value.

This might be a good thing when it comes to getting a handle on inventory; if sellers will stay in their homes and “wait out” the current low prices, maybe some of the foreclosure and REO inventories will be depleted. Do you think this standoff is good or bad for the market?

Thank you for reading! Your comments and questions are welcomed below.

A St. Louis real estate investment firm facing serious legal troubles could lead to a number of lease-purchase clients being left out in the cold – literally – if the company goes under[1]. Eighteen Investments, which markets its properties as Bellington Realty, appeared to have everything under control just two weeks ago as it bought up foreclosures in the area “by the bushel.” However, now five banks in St. Louis are now bringing suit against the company for more than $7.5 million in addition to foreclosing on properties.

Since 1983 the company has been buying and renovating distressed properties, but recently had moved into renting properties and lease-purchase transactions. However, these transactions may have been more desperate measure than careful business decision, since several of the homes are now being foreclosed on.

The company has stressed that to its knowledge, its rent-to-own buyers are not being displaced by foreclosures. A number of tenants are suing, however, claiming otherwise.

Do you think that lease-purchase agreements are viable in this market?

Thank you for reading! Your comments and questions are welcomed below.

In today’s real estate market, it is as important to be able to make people aware of good investing opportunities as it is to be able to spot those opportunities yourself. For real estate investors who do not want to go back to long-term investing strategies but want to continue to invest largely in residential real estate to generate short-term income, the game is more about marketing than ever. The ability to navigate the web effectively and “touch” buyers and sellers in multiple ways via multiple media has changed the way real estate investors network.

Do you think that this new emphasis on marketing in real estate investing is a positive or a negative development?

Thank you for reading! Your comments and questions are welcomed below.

Earlier this month, the Federal Reserve released its Beige Book, a market analysis report that helps the Federal Reserve Bank and the Federal Open Market Committee (FOMC) decide how to handle interest rates. Thanks to the most recent report, you can expect to see interest rates hang tight at record lows while housing markets in most of the country continue to stagnate thanks to the artificial – and now defunct – stimulation from the federal tax credit[1].

Most districts in the country did not report that prices had fallen significantly, but vacancy rates remain elevated and sales themselves are down. Furthermore, only three areas in the entire country – Cleveland, St. Louis and Minneapolis – reported residential construction increases. Everywhere else declined.

Overall, only Cleveland and St. Louis showed real signs of real estate recovery in July and August, according to the Beige Book. And until the job market joins in the recovery, expect more of the same.

Do you consider this good news for real estate investors or bad news?

Thank you for reading! Your comments and questions are welcomed below.

In a market where everyone is looking for – and finding – real estate bargains, the term “TLC,” tender loving care” has become nearly ubiquitous in the real estate market. Historically, agents have used the term to describe properties that are going to need some renovation before they are in ideal condition. The phrase “in need of a little TLC” tended to indicate that a good deal was in the mix, as long as you didn’t mind a little paint and plaster.

In the past few years in New York City, however, the term TLC has been stretched to the limit. In fact, some brokers are using the phrase to indicate the need for a gut renovation and complete overhaul[1]. Buyers are confused, as it is nearly impossible to predict what an apartment that needs a little TLC is actually in need of any more. In this market, it is more important than ever when you do deals that you or someone you trust check out the property in person before you buy. What is your personal definition of “TLC?”

Thank you for reading! Your comments and questions are welcomed below.

If the current administration wants to keep power in Congress this fall, then they may have to forego more housing “repair” efforts in the immediate future, says one financial services policy think tank in a recent report[1]. The Cambridge Winter Center believes that President Obama is caught in a trap of his own making as he tries to stem foreclosures without helping either mortgage bond investors or homeowners who bought homes they could not afford – two “parties that [voters] don’t want to help.”

While the administration has $50 billion in the fund to fight foreclosures, only $200 million of that has been disbursed due to a desire to appear, at least on the surface, to only help responsible borrowers. With elections coming up, a more aggressive program is politically unwise and most people predict that the administration will have to take broader action on the overall economy due simply to the “very few options left to address housing directly.”

It seems to me that this issue should not be politically motivated, and I’m concerned that we are so accustomed to having politicians “buy” our vote that this is simply another part of the analysis. Personally, I think that the government is hindering the recovery rather than helping, and I wish they would actually allow the market to stabilize and let us get through this thing and move on with our lives. Do you think that the housing market can recover on its own, or do we need more aggressive action on the part of the federal government?

Thank you for reading! Your comments and questions are welcomed below.