Whew!....Glad 2008 is over...on to 2009

While Raleigh has seen some market segments soften, the entry (first time home buyer) and multifamily market is holding it's own and seems to be just chugging along. These are the 2 areas that I and my clients have targeted here in the Greater Triangle Area.

Rents are still on the slight increase and vacancies haven't made a meaningful change from their very low percentages today. We have found great opportunities in managed new construction(perfect for the remote investor), even finding some short sale and good REO purchases. Raleigh is seen as one of the brightest areas that will ride the recovery first. Jobs are strong, there are new companies coming into the area as well as companies that are consolidating and moving employees here.

Over the last 15 years I have concentrated on building a portfolio of cash flow positive properties in solid areas here in the greater Raleigh area. I am taking advantage of the current strong rental market and paying down my properties. We are finding good deals everywhere.  Call us for more detail!

I read an interesting article and thought I'd pass this on:

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‘09 for Optimists - 4 Ways You Can Make 2009 a Great Year for Your Financial Future


RISMEDIA, January 12, 2009-If you’re like most folks, you’re entering 2009 clutching your wallet, keeping an anxious eye on your stock portfolio, and bracing yourself for the next dose of economic bad news that’s surely coming down the pike. Yes, if you believe everything you hear and read, we’re heading straight for financial apocalypse. But what if you decided to opt out of the doom & gloom club? What if, instead, you decided to look for treasure hidden amid the ruins? Choose the latter approach in 2009, says financial expert Eric Tyson, and you’ll open yourself up to some great investment opportunities.

“Unfortunately, most often, you can find only the worst case scenario in the nightly news,” says Tyson, author of Investing For Dummies®, 5th Edition (Wiley, 2008, ISBN: 978-0-470-28965-5, $21.99) and coauthor along with Robert Griswold of the upcoming Real Estate Investing For Dummies®, 2nd Edition (Wiley, March 2009, ISBN: 978-0-470-28966-2, $21.99). “That’s because bad news sells. What you aren’t hearing or seeing is that 2009 will bring some great investment opportunities in two areas you might not expect-real estate and the stock market. You simply need to change your perspective a bit.”

In other words, by taking an optimistic investing approach during the upcoming year, you can actually profit from the sluggish economy.

Tyson explains how:

1. Take advantage of low prices… Instead of looking at deflated housing and stock values as a bad thing, look at them as opportunity makers. Because prices have fallen, these investments are more affordable and you can buy now and watch current values increase over time. Take real estate, for example. Recent data out from the National Association of Realtors (NAR) shows that their home affordability index (HAI) is at the best level in more than three decades. The current HAI value of 141.8 means that a family earning the national median family income has 141.8% of the income necessary to qualify for a conventional loan covering 80% of a median-priced existing single-family home. So if you have good credit and can put down at least 10-20% of the price, investing in real estate is actually more viable an investment than it has been in years.

“The same is true of stock prices,” says Tyson. “Because of the downturn, many strong companies have stocks that are undervalued. If you buy these stocks now, as the market stabilizes and things improve, values will increase and your portfolio will be the benefactor.”

2. …But look before you leap. In other words, do your due diligence before you plunk down the cash, says Tyson. Some companies’ stocks are low for a reason. Before choosing which companies you would like to invest in, you have to do the research and make sure that they are fundamentally strong. Where real estate is concerned, there are still areas where properties are overvalued-parts of the Pacific Northwest, for example-so you’ll have to do the research to make sure you buy in an area where prices have already fallen in line with market fundamentals.

“These caveats are just reminders that you shouldn’t go into any investment without doing your homework first,” says Tyson. “Making irresponsible investment decisions is what created the problems we are having. By researching your options, you will be able to make sounder, more profitable decisions.”

3. Be careful where you get your advice. Misinformation abounds. There are a lot of pundits and so-called financial experts out there who are giving questionable advice and are making terrible predictions, says Tyson. What’s more, their past track records indicate that we should take their words with a substantial grain of salt.

“Financial pundits are a dime a dozen right now,” says Tyson. “Be very careful about whose advice you follow and whose economic predictions you buy into. For what it’s worth, two experts I do respect are professors Burton Malkiel, author of the classic A Random Walk Down Wall Street, and Jeremy Siegel, author of the excellent Stocks for the Long Run. Their work and books have stood the test of time-decades, not months or years-and I know I’ve profited handsomely from things I’ve learned from them.”

4. Keep thinking long-term. If you make investments thinking you are going to see quick returns, you will be disappointed. Where real estate is concerned, the days of buy it, flip it, and sell it quickly for a huge profit are over. What you can do is buy property now-particularly in areas where it’s now properly valued and even undervalued-and watch its value accrue over time as the market stabilizes and improves. You should take the same approach to any stock investments you make.

“It might be tempting to want to time the markets, but just because you get one market turn right doesn’t mean you’ll see the next one coming,” notes Tyson. “Even the best investors make mistakes, some of them huge ones, regarding future timing moves. When it comes to stock investments, slow and steady wins the race.”

“It’s true that 2008 was a sobering year,” admits Tyson. “And now we hear from many pundits and experts that the upcoming one could be as bad or even worse. But if you invest calmly and rationally, rather than reacting emotionally, 2009 can be remembered as the year you made some smart, long-term financial decisions. I think if you take advantage of what’s going on in the real estate and stock markets right now, you could be setting yourself up for a very profitable future.”

Eric Tyson, MBA, is one of the nation’s best-selling personal finance book authors and has penned five national bestsellers (he is also the only author to have four of his books simultaneously on BusinessWeek’s business book bestseller list).

Raleigh has proven to be enormously stable. The simple reason is that prices never ran in front of the income they generated. Cap Rates never dropped below 5% and were often found in the 7-9% range. We are Raleigh Investment Real Estate and Multifamily Specialists in arguably the BEST area of the country.

Here is a new construction duplex(1+ year old) in a managed community, vacancies are low, rents are high located in beautiful Wake Forest, NC. There is no other opportunity in this highly sought after Wake Forest neighborhood. The duplex is offered at $219K and is surrounded by $300K-$400K single family homes. It is fully rented with almost $1700/month in income. HOA fees are $100/year (that's right per YEAR). Extremely low operating expenses.

The owner would be open to a 2 property sale (he owns one across the street). Call me!

http://trianglemls.mlxtempo.com/Pub/EmailView.asp?r=464950315&s=TRA&t=TRA
 
Should you have any questions concerning the attached properties or even want a detailed analysis above, feel free to give me a call!
 
Best Regards,
 
 
Scott Snyder
Owner / Broker
Raleigh Investment Real Estate
 
O 919.794.4104 x1
M 919.271.0284
www.raleighinvestment.com ... Your Investment and Multifamily Specialists

Dear Investors,
 
It seems as though 1 month goes by and the whole world changes. What we are witnessing is profound to say the least. On October 1st we were seeing yet another downdraft in the stock market which was followed by several more. Clearly we have seen no lack of volatility. While this was occuring I wondered to myself how things have fared over the last 10 years. As I asked and began to answer the question I became even more curious about the various investment vehicles available and how they have fared. The listing examples used below are real. They are very good examples of excellent investment opportunities now available in the Raleigh, Chapel Hill, Durham & Eastern North Carolina area. While these are multifamily examples we are actively working numberous short sale and REO (bank owned) opportunities too!
 
To make things relatively simple I went to Yahoo and downloaded the last 10 years of Dow Jones Industrial Average (DJIA) closings, 10/1/1998 - 10/1/2008. Today, 12/1/2008 it sits just a tad lower. I then wondered what would have happened if I had put $33,000 in a duplex (because I was looking at a $165K duplex) and also the same amount in the DJIA, using the DJIA as a pricing point.
 
What I learned was shocking to say the least. To arrive at the value for the duplex investment I made a few VERY conservative assumptions. First, 20% down payment, 7% interest rate, 3% long term appreciation(Raleigh has seen more). Additionally, I assumed only a 3% cash return from the duplex.
 
The original $33K if placed in the DJIA would be worth $32.9K today, yes, LESS than the original investment. But the same $33K investment in a duplex with the above assumptions would be worth $119.2K+ or $86.3K MORE than the same $33K invested in the stock market. I realize the real estate market in some areas has seen a tremendous drop over the last couple years, so I am not suggesting that the duplex option is like a money market account. However, even in the areas that have experienced a tremendous drop keep in mind that they also saw insane and unsustainable gains that place their average return at well over 3% appreciation.
 
Here is a graph of the results.

We are continuing to see a very steady market in the Greater Raleigh, Chapel Hill and Durham areas. Research Triangle Park is a hot spot in the nation for job and net population growth. Over the last year we even saw an average of 3-5% increase in prices, according various sources. Case-Schiller, Triangle MLS, etc.
 
As always we are looking for great deals and have included 2 immediately available opportunities which I have attached here. These duplexes are in managed communities with lower than average vacancy rates and higher than average rents. Not to mention that they are low maintenance newer construction. Gresham Hills(Raleigh) is 6 years old and Ripley Woods(Wake Forest) is 1 year old. Financing IS still available.
 
MUL - Buyer Full Report
 
(or copy http://trianglemls.mlxtempo.com/Pub/EmailView.asp?r=464950315&s=TRA&t=TRA)
 
Should you have any questions concerning the attached properties or even the analysis above, feel free to give me a call!
 
Best Regards,
 
 
Scott Snyder
Owner / Broker
Raleigh Investment Real Estate
 
O 919.794.4104 x1
M 919.271.0284
www.raleighinvestment.com ... Your Investment and Multifamily Specialists