Type:  Traditional

Age:   Built in 1895

Location:   Muncie, near the Ball State Campus

Square footage:  2352 square feet

Rooms:   This home is separated into two units and has a one-car detached garage.  Unit A has four bedrooms and two baths on two levels.  Unit B has one bedroom and a full kitchen. 

Details:  This house is a Ball State University investment property typically rented to BSU students.  The owner can rent both units out for a total gross income of $1725 per month with an investment under $75,000.  It is located on Riverside which is a main road through Ball State University.  Due to the close proximity to the university, this home could add some stability to your investment portfolio.

Price:  $75,000

Type:  Ranch  

Age:   Built in 1976

Location:   Lebanon, IN

Neighborhood:   None

Square footage:  3048 with an additional 966 square feet in the unfinished upstairs loft

Rooms:   This four-bedroom home offers three-and-a-half baths, kitchen with breakfast room, office, sizable laundry room, family room, and formal dining and living rooms. 

Strengths:  This home sits on a two-acre wooded lot and has a three-car garage.  It is a great value for the square footage.  The upstairs loft can be finished and used as a fifth bedroom or studio.  It is a 30 minute drive to Lafayette and a 30 minute drive to downtown Indianapolis. 

Challenges:  Built in 1976, cosmetic updates would help to better position this home on the market.

WHAT’S IT WORTH?    255,000

Type:  Lake Front

Age:   Built in 1971

Location:   Lamb Lake in Trafalgar, Indiana, a 45 minute drive to downtown Indianapolis

Neighborhood:   Lamb Lake is a 500 acre private lake with access limited to 300 homeowners

Square footage:  4805 including 1435 in the finished basement

 Rooms:  This four-bedroom home has three full baths, views of the lake from nearly every room, two full kitchens with appliances, vaulted great room with a wood-burning fireplace and wall of windows, sun room with gas fireplace, master suite with sitting area open to the back patio, master bath with marble shower and private laundry, oversized 2^nd and 3^rd bedrooms with sitting area and shared Jack-n-Jill bath, walk-out lower level with 4^th bedroom and family room, and over 800 square feet of covered porches. 

Strengths:  Aside from the impressive lake views, this home offers 350 feet of shoreline, 1.42 acres of woods and waterfront, parking to accommodate up to 18 vehicles, an oversized 3-car garage, 200 feet of dock, two covered slips and power lifts, tie offs for 10 boats and swimming picnic and camping areas.  It is secluded from the road and is located in a cove with a “no wake” zone. 

Challenges:  This is a high price point for Trafalgar and buyers interested in purchasing second homes are a bit tougher to find in the recent market. 

WHAT’S IT WORTH?    $1,200,000

Yes, the $700B is the talk of the nation, but recently there was a more important event that will affect real estate throughout the country.  If major lenders and the government would follow their lead, there was a precedent set significant enough that will affect supply of homes on the market and will resultantly stabilize values for property owners. 

The creative solution was in the details of the agreement where Bank of America buys Countrywide.  Bank of America purchased Countrywide at a value where they were willing to allocate over $8 Billion dollars to right the wrong of aggressive and improper mortgage loans.  These aggressive loans helped lead up to 400,000 properties toward foreclosure in a decreasing value market.  This company will identify and modify loan rates to make them affordable with the goal of keeping the home owners in the properties that if left alone would end up as distressed sales in the housing market.  The quantity of homes is so significant that if this model were duplicated by other lending institutions, it would have an impact on home inventory supply throughout the country. 

Again, the goal is to provide an option to the homeowner and to make it affordable enough to stay in the home.  With fewer homes selling at an aggressive discount due to vacancy and quick sale pressure from resultant bank holding cost, supply of distressed homes for sale would be lowered and as a result pricing would stabilize.  Many homeowners who are saddled by unmanageable monthly payments are unable to make that payment and they head towards foreclosure. 

Whether or not you feel that it is only fair that you make your payment and others should be responsible for making theirs, keeping owners in their homes is good for the real estate market.  Like it or not, if there are foreclosures in the neighborhood that offer incredible value compared to standard resale properties, the buyers will focus on where they can get the best price especially in an uncertain financial market. 

Mortgage lenders and the US Government should take note of this precedent and follow the lead of Bank of America.  A stable inventory level of homes with the current demand will stabilize price for people who need to sell.  The result of following this model is a better climate to sell homes where your competition isn’t owned by the bank. 

Age:  Built in 2000

Location:  Fort Myers, Florida

Neighborhood:  Reflection Lakes is a modern gated community in south Fort Myers that offers tennis courts, a workout room, a community pool, clubhouse, and lake views.

Square footage: 2400 square feet

Rooms:  This 3 bedroom, 2 bath home has an open living area, tall ceilings, a lake view, pool, over-sized lanai, kitchen with granite counter tops, and paver driveway. 

Description:  This is an upscale south Fort Myers gated community with an abundance of amenities.  This house would have sold for $675,000-700,000 just a couple of years ago and is now listed at a bargain price.  Fort Myers is growing south and this home is in a prime location and only a 15-20 minute drive from the beach. 

Price:  $415,000

Type:   French Country  

 Age:  Built in 2002 

Location:  Near the intersection of Keystone and Main Street 

Neighborhood:  A quaint wooded community with 39 custom homes. 

Square footage: 3050 square feet with an additional 1845 square feet in the partially finished basement. 

Rooms:  This four-bedroom home has a main floor master suite with a view of the woods and creek and includes one of three fireplaces.  Two of the upstairs bedrooms share a Jack and Jill bath while the third is used as an office with French doors.  The partially finished basement walks out to the wooded lot.   

Description:  This bank-owned home, currently listed at $359,900, is a great deal for the buyer that is willing to deal with a repossession situation.  This home was modeled after an award winning design from the west coast and is conveniently located just down the street from Carmel High School and the new Arts and Design District with quick access to Keystone.  A wooded lot adjacent to a creek is a rare find, especially with a four-year-old property.  Similar lots without houses in Carmel have sold for over $150,000. 

Remember, with a bank-owned property, the bank will do little or no repairs to the house.  The reduction in price reflects the risk of purchasing the property.  Since there is more risk associated with the home itself, the purchase price for a bank-owned property should be lower than the purchase price of a privately owned home. 

Conventional mortgage money has tightened up recently as a result of the increasing amount of foreclosures. Basically, rates are linked to credit ratings and the bar is set much higher now than in the past.  For example, someone with a 720 credit score, typically considered great buyer, has no issues with interest rates on conventional financing and 5% down-payment.  However, as you move to the mid-600 credit scores (considered reasonable in the past) expect the interest rate to jump up 1.5- 2% higher than the previous norm while the down-payment may be 20%. 

Most lenders are favoring FHA loans (government backed) for these cases where rates are not tied as tightly to credit ratings.

The difference between success and failure in sports may be a fraction of a second.  The difference in business success and failure doesn’t seem to be as close at first glance, but it is.  Making it, and not making it, can be due to the smallest of margins.  The slightest edge can propel you from the back of the pack to the front.  The edge is having written goals.  It is easy to go into the office or the shop and put out fires.  To keep busy doing aimless activities that seem important at the time.  I heard recently from Brian Buffini, professional business coach, ”Many of us aim for nothing and hit it with amazing accuracy!”  Where is your focus without a target?  We rely on the gut feeling to direct our lives.  Wouldn’t you prefer to have the control of making decisions based upon what you really want instead of a knee-jerk reaction when the pressure is on?  Write on your calendar a block of time that is dedicated to breaking down what you want, why you want it, and what steps you will do to get there. 

Business is only one of five interlinked categories that you should evaluate to make your life more effective and fulfilling.  Reflect on your Spiritual Goals, Family Goals, Business Goals, Financial Goals, and Personal Goals.

Spiritual Goals— I wouldn’t leave this blank unless you feel that you may be the first human to live forever.

Family Goals—Visualize the big picture and then weekly activities and block time for them.

Business Goals- These should be specific and measurable.  For example, my real estate business is largely by referral and my goal is to receive 200 referrals for home sellers and buyers this year.  I am committed to these referred clients and ensure that they are the highest priority, treated like royalty, and the person who referred them is acknowledged as the key to my business success.

Financial goals—In addition to revenue from business, consider other sources of investment income, reflect on what motivates you, and take action to get the funds.

Personal goals—Think about what makes you happy.  Do you want to get fit?  Get more educated about a subject?  Have more time off?  Feel the desire to help others in need?  Start with the end in mind and work backward to establish daily tasks.

When written goals in these five areas of your life are your priorities, you can’t help but be more effective and fulfilled.  It is time for you to use “The Edge”.

Good news arrived recently for home buyers as the US Treasury Department stepped in and agreed to take over control of stumbling Freddie Mac and Fannie Mae.  According to The Federal Housing Finance Agency, nearly 80% of all residential purchases have a connection to these companies in a secondary market.  In a nutshell, the capability of selling mortgage loans in the secondary market allows banks and lenders to provide buyers access to necessary funds to purchase a property.  Rates for 30 year fixed loans have improved and the outlook is more optimistic for availability of money for home purchases.  Now that you know that money will be available to purchase, does it make sense to buy a home now?

Make no mistake, this is a great time to buy, especially in the 500K+ price range where there is plenty of inventory and current buyer demand has slightly increased compared to the same time period last year.  As you would expect, moving higher in price reduces the quantity of buyers where luxury home inventory levels are out of balance in favor of the buyer, even more so as you approach the million dollar mark and beyond.  Informed buyers should research the incredible values of resale homes or completed new construction homes before meeting with an architect to start from scratch.  What they will find is they may move into a home that has more amenities than what they can build or they will save a substantial amount of money.   

In my opinion, new construction home inventory levels will drop through 2009 in Carmel and Fishers due to the lack of new construction starts for builder speculative homes.  Many homes, especially those up the price scale, require 8 months to 1 year to complete.  We monitor current housing starts and predict that there will be less new construction supply over this time period.  What this means in the future for the buyer is a more balanced position between seller and buyer, thus, the leverage that the buyer has now will be reduced due to a drop in inventory.  Basically, there will be more pricing stability for builders through next year.  Take a good look at what is available on the market and don’t lose your opportunity.  It is a great time to buy.