Real Estate Investing

Craigslist, a legitimate online classifieds site, can be a great place to find landlords, tenants, pre-foreclosure deals, investment property, roommates, vacation rentals or simply a really great home. This blog has recommended the site many a time. However, there are vultures lurking, ready to pounce on the innocent and trusting, and vigilance is required.

In 2005, Craigslist CEO Jim Buckmaster told MSNBC that fraudulent postings made up only one-tenth of one percent of the site’s overall listings. The site has a very well-established method for users to “flag” posts for removal if they are posted in the wrong area or posted too often, etc. (signs of fraudulent activity). Furthermore, Buckmaster said the company was considering charging landlords to post property rental ads on the New York message boards, in the hopes of discouraging fraudulent real estate postings in the area where such activity apparently posed the biggest problem in 2005.

Not sure if they actually implemented such a policy, but it sounds like a reasonable one to implement nationwide because three years later, the problem persists. KGET 17, a Bakersfield, California news station, reported yesterday that a local woman was prey for an online real estate scam artist. As it turns out, the property photos and description that were so appealing to Tiffany Llamas were actually ripped verbatim from a listing handled by a legitimate realtor — the same one who happened to be working to help find Llamas a home. According to the KGET web site:

“The return email read: ‘I and my wife came over to the U.K. for missionary work, so I hope you will promise us that you will take care of our house.’ Llamas said, ‘That’s great but I still want to see the house first, and when he told me send $2,400 via Western Union and then he would, you know, send the keys to me.’”

Llamas didn’t fall for it, but such predators persist on a variety of Internet networking sites hoping that someone will fall for it. Apparently, tenants aren’t the only ones being preyed upon either. This is undoubtedly occurring in the property resale market as well. The Real Real Estate in Connecticut blog points out what can happen to landlords and (in the comments section) what can happen to those seeking roommates on Craigslist.

The blog points out some red flags to beware of with Internet dealings. It may sound biased, but the following qualities are true in the vast majority of cases:
-Poor English, i.e. broken sentences, misspellings and bad grammar.
-Asking questions about details you already gave in the advertisement.
-No direct contact information.
-The writer is overseas. Many of the scams are from people claiming to be in other countries.
-Very often, these people represent themselves as high-income individuals, like doctors, lawyers or professors.

Again, Craigslist itself is not bad, but the way it works has the potential to introduce a lot of people to a lot of scam artists. Never, ever give anybody cash, check, bank account information, etc. without having first met with them and thoroughly checking out the situation. Follow your gut instinct, and above all else, the old rule applies — if it sounds too good to be true, it probably is!

“And the rich keep getting richer,” so the old saying goes. It seems now is one of those times when the saying is true. About 77% of the wealthiest people in America think the current state of the real estate market presents a “real opportunity,” and 40% plan to capitalize by purchasing real estate within the year. The group surveyed in American Express Publishing Corp.’s Annual Survey of Affluence in America is defined as households with discretionary income in excess of $500,000 per year.

Other groups included in the survey ranged from “upper middle class,” with incomes between $100,000 and $149,000, and “super affluent,” with incomes between $250,000 and $499,000. The vast majority of all income brackets agreed that now is the time to seize the day in the real estate world. Still, only 17% to 26% were committed to buying real estate within the year in those income brackets, nowhere close to the 40% in the wealthiest category.

This should come as good news to the 14% of homeowners who expressed concern they might miss payments in the next six months, according to the AP-AOL poll released Monday. As for average citizens, 60% stated they would definitely not buy a home in the next two years and only 11% expressed certainty that they would do so. Maybe we average citizens could delve into the real estate market if we go rob a bank play the stock market buy lottery tickets.

Real estate investing is a hot topic right now. Interest rates are low, prices are low — what’s not to love, right? If you’re looking to seize the day, keep one thing in mind. Go west, young man … or east, depending on where you sit as you read this. The Lonestar State is the place to be and other western states like Utah, Colorado and New Mexico are also getting some nods. It’s a veritable gold rush for the 21st Century.

Of course, the list of where to invest in real estate varies depending on which you look at. We looked at the Top 10 list compiled by real estate valuation company Fiserv Lending Solutions, the Top 10 list compiled by investment company HomeVestors, and the Top 7 compiled by HousingPredictor.com. One thing all three of these lists have in common is that Texas cities appear in the top three listings. Some say El Paso and McAllen, while others say Dallas, Houston or Austin. Regardless, it’s clear that Texas is the place to be. San Antonio and Ft. Worth are even mentioned in lower spots on some of the lists.

Actually, plenty of developers, second home buyers, snowbirds and vacationers truly are turning their sights from Florida to Texas. This has been a known fact for a while, but home prices are rising fast so capitalize before it’s too late.

Interestingly, Syracuse and Rochester in New York state made one list, with an expected 3.60% and 4.20% price appreciation this year. Asheville, North Carolina made another list because it has seen steadily increasing prices with no signs of slowing down and pro golfer Tiger Woods recently announced his plans to build a golf course megalopolis there. I am an avid golfer, but given the choice, I’d still have to head southwest, where the prices are lower and appreciation forecasts are greater. Grab your gun, boots and spurs — Lonestar State, here we come.