Santa Clarita Real Estate Update
August, 2009 - Issue #58
You can Still Create Wealth through Real Estate
by Joshua Suess

Creating wealth and financial freedom through real estate can be somewhat easy if you know where to go and how to get there.

In the past years of the hot sellers' market, one of the investment strategies was the "flip method" in which you purchased a home and held on to it short term while the prices quickly increased upward. Once you had satisfactory equity, you sold the home for a profit. This method was used by many investors, both amateurs and seasoned pros alike, in the real estate investment game.

Now that we are seeing a different market, what investment strategy makes sense? Now, the "buy and hold" strategy is the logical choice. This strategy is simple. You purchase a home and rent it out to a tenant while you wait for the prices to correct themselves and eventually start to increase again. During this time, you may be able to receive all of the tax write-offs and benefits (we recommend you check with your CPA or accountant), and once you have built enough equity in the property, you sell it for a profit.

This way, you may actually benefit three-fold with all of the potential tax benefits, the equity appreciation, and if you choose the correct property, you may even have positive cash flow in which you actually receive over and above your costs on a monthly basis and turn a profit.
Joshua Suess is with the Suess Home Selling Team at Re/Max 702-4640

SCV Real Estate Update
Current average sale price: $378,865
The average sales price is down approximately 19 percent from the same time last year.

Current average days on market: 62
Homes that have sold, on average, have been on the market 17 days less, or are selling 22 percent faster than this time last year.

Note: The SCV real estate market is showing the end of price declines in most price ranges. There are 13 percent more sales in 2009 than at this time last year and homes are selling faster.

90-Day Foreclosure Moratorium
by Jennifer Thompson

On June 15, California was the first state to implement a new foreclosure moratorium that adds 90 days onto the time period between when a homeowner defaults on a loan and when their home can be repossessed in foreclosure.

What does this mean to homeowners who are facing foreclosure? The California Foreclosure Prevention Act passed by lawmakers in February and signed by Governor Arnold Schwarzenegger makes lenders try harder to keep homeowners in their homes with loan modifications such as lowering interest rates, rewriting loans to 40-year terms and reducing principal by tacking missed payments onto the back of the loan. The law urges lenders to follow the Federal Administration's plan - Making Home Affordable Program - that began in March.
For lenders to avoid the 90-day moratorium they have to submit an application to the state outlining their loan modification program, and, once approved, the bank is permanently exempt from the 90-day delay on foreclosures. If a lender's application is rejected by the state due to an inadequate program, a lender has 30 days to upgrade it to be reconsidered.
Jennifer Thompson is a Realtor® and owner of Regal Realty of California 295-8715
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