Zen of Real Estate

Home Stay: Fannie Mae to the Subprime Rescue

Dear Everyone,

Good news! In the aftermath of the subprime lending woes, Fannie Mae has initiated a program to assist subprime borrowers. Home Stay is designed to refinance high-interest subprime loans. With lower monthly mortgage payments, borrowers are less likely to default and go into foreclosure.

It will be interesting to learn more about the requirements for the Home Stay program and how Fannie Mae is going to market it. Stay tuned.

Elaine

How to Be A Real Estate Investor When You Don't Feel Like It

Dear Everyone,

At the risk of sounding as if I am whining, I really don't feel well today. I spent last week being the only daughter of aging parents. That is a fulltime job with no vacations or holidays. I also traveled through tornadoes last weekend. They delayed and canceled flights made me think I had entered the airport version of Gillian's Island (the original sitcom, not the "reality" show). So this Baby Boomer is quite tired and slightly ill. The last thing I want to be today is a thinking human being, much less a real estate investor.

I'm sure everyone, self-employed or not, has these days. The important thing to remember is that it is just a day. There are many, many more days left in which to work. And if today is the last day, for some tragic reason like those at Virginia Tech have experienced, then I am still happy. I spent the day resting, talking to friends and getting ready to be a real estate investor again. Tomorrow.

Elaine

Where the Wind Come Sweeping Down the Plain: A Quick Assessment of Real Estate in SW Oklahoma

Dear Everyone,

I'm still traveling and posting from the airport in Oklahoma City. It's going to be a long day of travel, so I'll have plenty of time to reflect on being the only daughter of aging parents. For those of you who have aging parents who do not live nearby, you might consider integrating them and their needs into your business plans.

With that said, the real estate portion of my brain had the opportunity to wander from time to time while in Oklahoma. While I drove through towns in the southwestern part of the state, I did a quick market analysis and looked for telltale signs of economic health or decline.

What I saw was a part of the country that is struggling to reassert itself. It's a part of the country that once relied heavily on agribusiness, but is now seeking out other industries for economic survival. I saw expanding medical complexes, several new gambling casinos and several new upscale housing developments--all signs, to me, of an economy in transition.

Market opportunities I observed rested with building or rehabbing mid-range homes. New upscale developments have been constructed only blocks away from aging, neglected neighborhoods. Those aging neighborhoods are a mix of rentals and owner-occupied homes, leaving plenty of room at the table for would-be rehabbers and landlords.

Elaine

Real Estate Development Okie Style

Dear Everyone,

I am posting from Oklahoma City. I am here being the only daughter of aging parents. The only mother of the only daughter is talking to me as I type.

Downtown Oklahoma City is an interesting real estate case study. If you had been with me in downtown OKC before I had gray hairs and aging parents, you would have seen a sea of urban parking lots. There wasn't much else. Now there's new development everywhere, from the huge Cox Convention Center to Bricktown, a downtown entertainment area. For you Toby Keith fans, his I Love This Bar and Grill is located in Bricktown.

With all the commercial development, there's also several condo developments in progress. A newspaper reporter queried today why all the new condos were priced at $250,000 and above. The reporter acknowledged that the higher prices brought greater profits, but most modest prices would bring faster sales.

I've heard newbie investors make similar kinds of statements. While I applaud the reporter's concern for those who want to live downtown at an affordable price, his statement shows a lack of understanding. Higher prices in real estate do not always yield greater profit. Since there are several development projects going on at the same time, the competition is on. Buyers will be looking at the location as well as features and amenities. Developers may be forced to grant concessions to buyers to make sure their condos sell. The more concessions, the longer the condos stay on the market, the less profit.

But the reporter offered a gift to potential developers by pointing out a market need for affordable downtown condos. Any takers?

Elaine