The housing market is cyclic in nature. They will always be periods where markets are increasing in value and decreasing in value. The housing market crash in the US created great opportunities that many of us are still capitalizing on today.
Currently, many of the country's hottest housing markets are still 30% or more below the cost to build and up to 70% below the previous all time highs.
Based upon historical housing cycles, we still haven't entered a new boom yet, during which U.S. home prices will correct back to the cost to build and then eventually appreciate in value.
One of the ways Auxo Homes and their partners are capitalizing on this opportunity is to buy cash flowing real estate that returns 10-12% Annually while we wait for the market to correct. The positive cash flow from day 1, eliminates risk as the home will pay for itself in 10 years while it appreciates in value.
To learn more fill out our survey at http://form.auxohomes.com
$450 million and 2400 jobs in the next 5 years!
"The expansion of Engineered Floors is uplifting news for Northwest Georgians, who have persevered through the recent years of economic hardship. Many families will be relieved to hear about the thousands of new job opportunities, and we're all proud to see Dalton and the surrounding area remain the Carpet Capitol of the World. I thank Governor Deal, the General Assembly and the local community for working together on pro-growth policies that keep Georgia business-friendly and allow us to compete nationally and globally," says Graves.
A large number of new businesses are following the lead of fifteen of the country's Fortune 500 companies, and are making Georgia their home state. One of the reasons why is that the government is actively pursuing them by providing incentives for these startups to be in the area.
One example of this is the removal of sales tax on energy usage. This leads to more profitable manufacturing in the state at a time when energy usage is normally penalized.
As a result there have now been twenty consecutive months in which the unemployment rates have dropped across Georgia!
At Auxo Homes, we pride ourselves on having extensive market knowledge. It is a competitive advantage we carry across our industry. Our team is constantly researching markets across the continent to determine where your investment will provide you with the safest, most consistent returns. If you are looking to preserve your wealth while building capital, give us a call. Now is the time to buy, and real estate is an excellent vehicle to help grow your money!
Give us a call at 1 888 535 2869
or CLICK HERE to fill out the partner questionnaire
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Warren Buffett appeared live on CNBC's Squawk Box this week. During the interview, he was asked about the current real estate market and whether he felt now was the time to buy. His response was rather emphatic and has been used as a headline in hundreds of articles since the interview:
"If I had a way of buying a couple hundred thousand single-family homes I would load up on them."
However, throughout the interview, he addressed the market from a few angles. Here is what he said:
"It's a way, in effect, to short the dollar because you can take a 30-year mortgage and if it turns out your interest rate's too high, next week you refinance lower. And if it turns out it's too low, the other guy's stuck with it for 30 years. So it's a very attractive asset class now."
Is buying your own home better than investing in stocks right now?
"If I knew where I was going to want to live the next five or 10 years I would buy a home and I'd finance it with a 30-year mortgage... It's a terrific deal."
Should we buy multiple houses?
"If I was an investor that was a handy type and I could buy a couple of them at distressed prices and find renters, I think it's a leveraged way of owning a very cheap asset now and I think that's probably as an attractive an investment as you can make now."
Over the last couple of months, there have been more and more financial analysts coming to the same conclusion: It's time to buy real estate.
Auxo Homes is currently buying properties on sale across the county, we only work with a small group of individuals serious about creating long term sustainable wealth through real estate, if you are interested in more information click below to get more information.
Not a week goes by that I don’t get several emails or phone calls from wholesalers who want to know what types of deals I look for, where I like to buy, what kinds of houses I buy, etc. While most of that information can probably be gleaned from reading through this blog, I wanted to take the time to put together a more detailed list of the types of deals I look for, so I can just direct the wholesaler questions here…
If you’re a wholesaler, here is the information you’ll probably need:
Am I Looking For Deals?: Yes! I’m always looking for deals. And even if I weren’t looking for deals, I work with lots of other investors who are always looking for deals. If you have a deal, send it along and if it’s good, either I — or someone I know — will buy it.
Contact Info: If I’ve never worked with you, please don’t call me with deals. It’s not that I don’t want to talk to you, but now that I run 3 seperate companies and travel often, it’s not easy to find a lot of phone time. Once we’ve done a deal or two, you’ll be on my list to answer your calls. Until then, send me emails (including any potential deals) to email@example.com. I read every email I ever get, and will respond (though if it’s not a time sensitive deal, it may take me a bit).
Location: I mostly buy in Fulton , Gwinnet, Dekalb , and Cobb County, Georgia, with most of my properties in neighbourhoods with good schools. I will consider deals outside this area, but the further away from this general vicinity, the better the deal has to be. Please don’t send me any marginal deals that are more than an hour away!
House Characteristics: While I’m sometimes willing to deviate from this list of characteristics (especially for a great deal), these are the types of houses I tend to buy:
Level of Rehab: It doesn’t matter! I’m always happy to do a quick paint-and-carpet job and I also don’t mind houses that have been (or need to be) torn down to the studs. I’m happy to deal with mold, water-proofing issues and/or foundation issues — though keep in mind that my purchase price will certainly take into account the cost of fixing these types of problems.
Price Range: While I’m happy to buy a deal in any price range if I’m confident it will sell and I can make a decent profit, ARV of 120-175k.
Purchase Formula: You don’t have to guess if a deal meets my financial requirements or not. The formula I use to evaluate deals is pretty simple, we buy at 60% LTV.
The video below has the 4 benefits of owning rental properties.
I added a 5th benefit which I feel is just as important.
1) Appreciation - Over history real estate on average appreciates 6.8% per year. Even at a 5% average over a 10 year period your return on investment is 50% on appreciation alone.
2) Mortgage Reduction - Rental properties should at least cover your: principal, interest, property taxes, and insurance. The tenants build equity in your property.
3) Taxes - Depending on the type of property, and exit strategy, taxes can be deducted or deferred from your profits. You can also deduct expenses such as depreciation, cell phone, travel, dining, entertainment, home office, pda's , appliances, laptops, company car, mortgage interest, cleaning supplies etc. This can save you hundreds of thousands of dollars over the years.
4) Cash-flow - When you buy the right properties, After expenses are paid you get passive cash deposited into your bank account month after month. You can spend the profits on what ever you want or re-invest them to build wealth.
5) Leverage - When financing is available, this allows you to control the property for only a fraction of the price. Down-payments range between 10-30% down. (I.E. Paying 20k down to finance and control a $100k triplex, that cash-flow you $1k/month) The best thing about leverage is that the down payment does not have to be your money, it can be the from a bank, business partner, credit card, personal loan, friend etc.
Real Estate Attorney & CPA, Mark Kohler, explains the 4 benefits of rental property:
Appreciation, Mortgage Reduction, Taxes & Cash Flow.
Lake Nona’s Medical City is Central Florida’s newest medical development that is focused on the health industry. The medical city is emerging not only as Orlando’s fastest-growing, most innovative master-planned community encompassing 7,000 acres, but also as a “Project of Promise” featuring Nemours Children’s Hospital, M.D. Anderson Orlando’s Cancer Research Institute, Orlando VA Medical Center, University of Central Florida’s new College of Medicine and Health Sciences campus, Burnham Institute for Medical Research’s east coast campus, and a University of Florida research facility dotting the Lake Nona Gateway Interchange in the 600-acre Science & Technology Park.
*This emerging Medical City in Orlando Medical City's employment is expected to jump 10-fold, to 5,000 jobs.
* University of Central Florida (UCF) College of Medicine
Part of the nation’s 2nd largest university,
Total construction investment: $98 million
*Burnett School of Biomedical Sciences
Total construction investment: $68 million
*Sanford-Burnham Medical Research Institute at Lake Nona
Total construction investment: $85 million
*MD Anderson Orlando Cancer Research Institute (CRI)
Total construction investment: $2.5 million
*Nemours Children’s Hospital
Total construction investment: $380 million
*Orlando VA Medical Center
This brand new, 1.2 million square foot, state-of-the-art facility will increase accessibility to healthcare for approximately 400,000 Central Florida veterans and will be the first VA hospital built in the United States since 1995.
Total construction investment: $665 million
*University of Florida Research Center
This 100,000 square foot research facility will be shared with the Burnham Institute, enabling the state’s largest university to have direct collaboration opportunities with Burnham’s top scientists
Total construction investment: $61 million
This is a great oppotrunity for lease options, with doctors bringing their staff, not everyone will qualify for a mortgage immediately however they will be looking to buy in 2-3 years.
Click here for video tour
Orlando, Fla., misstated the city’s ranking as a destination for medical meetings. It was the No. 1 destination averaged over the past 13 years, not 13 years in a row, according to the Healthcare Convention and Exhibitors Association.
When investing in U.S. real estate, knowing when to get in and when to get out of a market is crucial to success. I make a lot of different investments in U.S. real estate and I always look at emerging and “sexy” markets. When you can find a market that is emerging and “sexy,” that’s when the best opportunities happen.
But before we talk about buying, let’s make the distinction between these markets. An emerging market is a region or state that previously experienced a downturn in the economy, but is starting to see signs of economic growth.
4 Key indicators of an emerging market in U.S. Real Estate
“Sexy” markets are those enviable locations with hot climates and thriving metropolitan areas that everyone would like to live in. When you can get a market that is both sexy and emerging, that’s when you get the best investment. Florida and Phoenix fit both categories. Florida was hit hard by the housing crisis in 2008, but it was destined to turn around with innumerable beaches and beautiful locations available. Phoenix was also hit hard by the crisis, but it never reached the demand that Florida was known for. Now there are plenty of high tech and communications companies pouring into Phoenix, causing a surge in jobs and an uptick in the rest of the Phoenix economy.
Buyer and Seller U.S. Real Estate Markets
Supply and demand controls the U.S. real estate market, so I like to see markets as either a seller or buyer market. Seller markets mean inventory of houses is low and buyers are willing to pay more. Buyer markets mean that there is too much supply and sellers have to mark the home price down to make a sale. When days-on-market starts to increase, that means its a buyer market and you should probably find an exit strategy.
Most important to remember is that the real estate market is cyclical, so peaks and valleys will occur everywhere. A typical U.S. real estate cycle is approximately 20 years from peak to peak, so have patience when waiting to flip a property. When you decide to leave a market or need a new monetization strategy, you need to select the proper exit strategy.
U.S. Real Estate Exit Strategies
1. Flip: This means buying a property, doing some renovations and putting it back on the market. It can result in a more immediate return on investment, but can defy the point of investing in U.S. real estate, which is to get passive income.
2. Hold: This means renting out the property. It provides passive income, but you can be at the mercy of the rental market.
3. Refinancing: I love this option because there are so many options available, and you could refinance more than once.
Other options include making it a joint venture with another investor or turning your renters into owners. For updates on our programs, U.S. real estate news or advice from me, follow me on Twitter or “Like” my Facebook page.
AUXO HOMES | May 2012 Newsletter
Spring Is In The Air... and the real estate market is waking up from its winter slumber! Spring has always been a great season to start making deals. Not only is the market primed, but people are feeling better. Homes simply show better this season and we're ready to show you how to profit off of them.
Did You Know? - in Orlando
Foreign Money Spends Well In Florida A recent study by DataQuick and Inman News shows that SW Florida is the spot international home buyers like the most. We've been over why this market is hot before, but it seems like the rest of the world now knows about it as well. This is great news as new money in the market means a bigger piece for all of us.
Top 10 markets for international home buyers according to the study:
International buyers are aware that Florida is one of the world's premier vacation destinations, and it's on sale. When the French Riviera goes for cheap we'll all buy there, but until such time, Florida is the place.
Prices are up 30% and builders are finally starting to bring new inventory to the market, which is good news for us all. It will take time for the international interest in Florida to wane, so with higher prices and more new inventory it's the perfect opportunity for us all to make great sales to international buyers.
It's a great chance for savvy buyers, like our partners in across Canada, to take advantage of favorable international tax regulations to buy and sell profitable Florida properties. We're entering another one of those perfect windows of opportunity: prices are rising, interest rates are low, new international buyers are bringing new money to the market, and we are getting new inventory from builders again.
We plan to take full advantage of the situation to build wealth. We hope you are going to do the same and will let us help you!
Sources: Inman News, Dataquick, RE/MAX
To Financial Freedom!
President and Founder of Auxo Homes
Real Estate Internet Resources
The Perfect Storm
Most Canadians wrongly believe that it’s too difficult and risky to buy U.S. real estate. Most think that even if they did own U.S. foreclosures they wouldn’t be able to profit from them. This article will blow these myths out of the water like two Canadian geese heading south for the winter…
Emotion stops many from seeing the facts. No matter what you fear about U.S. real estate… three things that should be obvious:
1. YOU CAN buy perfectly good homes for 50% to 70% off.
2. YOU CAN buy foreclosures directly from the banks with clean title.
3. YOU CAN cash-flow from day one, covering your expenses, mortgage and putting money in your pocket
The entire U.S. market has not crashed. It’s economically impossible for an entire nation to experience a real estate crash. Real estate cycles are unique to each neighbourhood in each city. If you learn how to identify the signs of an emerging market you can buy foreclosed properties at a 50% discount of today’s market value and consistently resell them for a minimum of $30,000 profit. But much like the 1989-1992 real estate crash where smart investors made millions… this opportunity won’t last much longer.
Arizona, Florida, Georgia, California, Nevada etc. are sometimes considered as “Sun Belt” continues to be a red-hot market to invest in based on three main factors: baby boomer statistics, job growth and population growth. There are 78 million U.S. baby boomers, 9.6 million Canadian baby boomers and one billion worldwide (30 per cent of the population)
When surveyed, 51 per cent of North American baby boomers would like to move to a better climate. Of those 44,675,000, 41 per cent (18,763,500) want to move to the south Atlantic region, and 32 per cent (14,296,000) want to move to the western part of the U.S. (Arizona, Nevada and California). And all told, 58 per cent of the boomers want to move to a one level, smaller home (50,808,000).
Conclusion: Close to 5,000,000 people are looking to move into a bungalow/condo in Arizona over the next 10 years, and 18 million people looking to move to Florida over the next 10 years.
Florida, Arizona and the entire U.S. are going through a housing shortage. Lawrence Yun, chief economist of the National Association of Realtors said "Home builders must add 1.6 million to 1.7 million housing units each year to accommodate typical U.S. population increases and replace demolished homes. According to the USA census data in 2009 and 2010 were just over 650 thousand new housing units completed in the USA.
Florida is one of the states with the largest number of foreclosures in the country. As a result of the “sub-prime mortgage meltdown” banks are becoming more stringent with lending practices making it more difficult, even for people with good credit to get a home loan. More people with foreclosures on their record means, even less people qualifying for loans, which results in more people looking for homes to rent. The rental occupancy rate in Tampa Bay is averaged at around 92% Combine these factors together and we have ourselves a “Perfect Storm” for investing in cash flow rental properties.
We know the full recovery will take some time "Economists predict 2014. But this is irrelevant. What is important is to buy right. You must determine your exit strategy, whether it's quick flip or a long-term rental hold, it's important to leave equity in the deal at today's market value, not subprime market value.
Investors to in today’s markets have the room to leave 65 per cent equity after all costs (including rehab) and acquisition costs. It is quite possible to buy a $100,000 home, and ensure be all in for no more than $65,000. This enables investors to rent, cash flow, and take a huge appreciation ride when the markets recover.
It's the perfect storm
1. Loonies’ Up and Interest rates are down:
As I write this, one Canadian dollar will get you 96 cents American. The Canadian dollar has increased 69% in value since 2002. Interest rates are at an all-time low making the cost of borrowing the most affordable we have ever seen.
2. Real estate is 50% to 70% Off:
Right now U.S. banks are selling tens of thousands of foreclosed properties per day. You can buy a $66,000 home and sell it for $220,000 after rehab.
3. Only in the U.S.:
Only in the States can you buy repossessed homes in good condition at a discount. (Our Canadian courts prevent banks from selling foreclosures at a discount.)
4. Rents continue to stay high:
Rents have not been affected by this downturn. The average rent in the USA is $1350 per month for a 3 bedroom single family home.
The U.S. favors the investor. Canada regulations serve the consumer. Practices which are perfectly acceptable in the U.S. become borderline illegal in Canada. Properties under $100,000 are cash cows during the time we sit and wait for the market to go back up, and cash in on hundreds of thousands of profit per property in 10 to 20 years from now.
When it comes to U.S. Real Estate, Florida has various "Winter Getaways, at affordable prices for any Canadian wishing to invest
As a Canadian, you can cash in on the properties available in Florida due to the previous economic recession. The housing market in Florida is still recuperating, which is why Canadians will find great investment opportunities for the perfect winter getaway.
Florida developers and banks are offering great pricing for U.S. real estate and with the stronger than ever Canadian dollar, there are beautiful properties available for discount pricing.
Canadians are now, more than ever taking advantage of what Florida has to offer!
The economic recession has affected the Florida real estate market. Banks and builders are offering tremendous opportunities for Canadians who seek to purchase winter getaways or to relocate to a state that is always sunny while avoiding the harsh inclement weather of Canada.
Canadians have weathered the recession like the true Canucks we are, which is why we take advantage of the recession in the form of investing in U.S. real estate. The opportunities are endless, and there is information that Canadians should understand before indulging into U.S. real estate investment opportunities in Florida.
Owning U.S. Real Estate in Florida is different in comparison to owning real estate in Canada.
There are numerous factors that must be considered; such as taxes, legalities, immigration laws and most importantly, seeking out the financing for property investments.
Florida’s tax laws can appear confusing for anyone. Canadians should always calculate the property tax before jumping into real estate investments in Florida, however note that the property taxes in Florida are not allowed to increase more than ten percent in one fiscal year.
If you invest into Florida real estate, the US government will bill you annually for property taxes on January 1 of that particular year. These US property taxes can prove confusing, but keep in mind you should remain flexible. Sometimes rates change due to political legislation and sometimes, homeowners and business owners benefit, or suffer, due to this action.
As confusing as property taxes can be for Canadians, Florida real estate is worth every dollar for investment. Florida has beautiful weather all year round with numerous retirement communities advertising with discount pricing. With the Canadian dollar performing so strong against the American dollar, the best it’s been thus far, investing into Florida properties makes perfect sense for Canadians. Another key point to note is that property taxes and insurance are high in Florida and where this may be so, most of the costs associated with taxes and savings on the purchase price of your investment can offset your insurance.
Keep in mind that if you rent out your real estate investment, it can be arranged so that your expenses, including interest, are deducted from your income, which is a benefit not offered in Canada. Remember that lower, net income is not taxed by Florida, but by the U.S. real estate, which still proves lower than in Canada.
Sam Kakembo - U.S. Real Estate
Auxo Homes is an asset management of the company portfolio of emerging markets. The majority of his investments are made in single family rental properties.
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