Buying a Home Through an Online Auction – Are You Ready for This?



There isn’t much that you can’t buy online right now and that includes houses. Smaller online purchases are pretty routine and they don’t make most shoppers nervous. At least not if they require small transactions. New shoppers worry more about the protection of their personal information. But, when it comes to a high ticket item like a house are you really ready for this?

Who Sells Their House Through an Online Auction?

This is not just a rare occurrence. There are several sites that have now been developed for buying and selling houses. The types of homes that can typically be seen up for auction online are;

  • Foreclosed homes
  • Bank owned property
  • Investor owned homes
  • Flipped homes

Depending on the circumstances of the sale quite often the homes are in need of repair and are sold “as is”.

Is it Safe to Buy Homes Online?

The answer to this is it all depends. There are reputable sites where making the financial transactions is secure. But, buying a house online can come with a lot of risks that also influences safety factors.

Do Your Homework

If you are going to venture into a buying a home online adventure you have a lot of work to do. Yes, it is convenient that you can sit at your desk or use your mobile to do this, but there is still work to be done.

  1. Research the auction site

You need to determine that the auction platform is trustworthy and established.

  1. Learn how the platform works

It will require some research as to how to navigate around the site and the process for placing bids. Most importantly you will need to read the terms and conditions carefully.

  1. Research about the property of interest

When you find a house that you are interested in bidding on there will be a certain amount of information about it on the site. Read all of the documentation about it very carefully. If possible try to find out more about the house from other sources. It may have been listed elsewhere.

  1. Have your financing in place

You will be expected to submit a specified amount of money with your bid. Then if you win the bid you are going to have to have your financing in place when the bid closes.

Think About Using a Professional

Although people do buy and sell houses without the use of professionals like real estate agents it can be nerve wracking and a lot of things can go wrong. One really needs to be experienced at these types of transactions. If an individual really finds a house at an online letting agent auction they are interested in they may want to use a realtor to assist them with then the bidding and closing.

A Better Alternative

If selling and buying a house through an online auction were all that simple and successful there would be a whole lot of success stories on the internet. But, much of the information is outdated when it comes to the “stories” and there is nothing notable about the successes for the average house buyer.

Most people are looking at house auctions online because they are looking for a good deal. There are much safer ways of doing this. Looking at areal estate portal that specializes in real estate of all types and all prices, which covers the entire US gives much better and much safer choices. Here are a few examples:

How About a Single Family Home? Under $25,000?

Where in the world could one possibly buy a single family home that is in decent condition and livable? The answer is right in Chicago. It may need some tender loving care, but at the price one can afford it.

A Three Bedroom Home Under $5,000? No Way!

For less than what one normally puts out as a down payment could actually make one a homeowner that would be mortgage free. There is such an opportunity in Dayton, Ohio. The market value on this 3 bedroom is much higher than the asking price.

These are just two examples of many of how those that are in the market for cheap houses have other options. Ones with much less risk than buying at an online auction may create.

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Would Free Land Spur Your Interest in Homesteading?



by Pat Rogers
Founder and CEO of AgFuse LLC

It is hard to believe that there would be such a thing as free land. The first thought is there must be a catch to it. The good news is that there isn’t. But, you have to be prepared for a homesteading commitment.

What is Homesteading?

The basic definition of homesteading is adapting to a life style that is based on being self-sufficient. A better way of putting it is giving up on some of the common conveniences that many of us have become so accustomed to.  In exchange for something even better.

A Fair Trade Off

Owning any type of property means having something of great value. Most individuals have to make some type of concession in order to be able to afford this. To obtain free homestead property it just means giving up some things that may not have to do with traditional property ownership. Yet as a result of what you will be giving up you are also going to find it self rewarding.

You will probably be giving up the time that you spend doing things that don’t provide you with much enjoyment in life. Such as sitting on the couch flipping through channels. Or, trying to decide what to do next for entertainment that is affordable. Instead you will be replacing these with participation in growing your own veggies. Or maybe raising your own livestock. In other words you are returning to the necessities in life and giving up all that which is costing you the majority of your hard earned money anyway.

By entering into homesteading you are beginning a new way of life. By taking the opportunity of the offering of free land to start this journey you are off to a great start. What is even better is that there are several states that are providing this free land opportunity.

Location’s To Begin Your Homesteading Journey

Kansas is just one of several states that have some free land open for homesteading. It is Marquette Kansas. It is a small town with plenty of wonderful reasons for taking up residence here. One of these is their amazing school systems. Those that are interested in taking up homesteading on free land here need to fill out an application. If you have a yearning to move to Kansas but are not into homesteading there are some wonderful opportunities to buy land here at some very reasonable prices.

There are a few small towns in Nebraska where there is free homesteading property available. One of these is Curtis. Which is being touted as a great place for retirement. Other options are Elwood or Loup City. These are some good choices for those who would like to enjoy what Nebraska has to offer.  For those who are thinking of downsizing outside of the homestead adventure they may want to check out some of the homes for sale here.

Throughout several of the states there are many pieces of government owned property. Many are situated in or near towns that need a boost in their population. There is no better way to do this then by offering some incentives to encourage people to move to these regions. The government uses these small parcels of lands for that purpose. It is a triple win situation. The government gets rid of land they have no real purpose for. The town gets to enjoy growth. The new homesteader is getting a great start with free property.

Blackstone Planning IPO Based on its Holdings of Residential Rental Properties



by Jeanne Roberts

The Blackstone Group L.P., (NYSE:BX), a publicly-owned hedge fund and financial advisory firm headquartered in New York City, is planning to offer an IPO based on its holdings of rental properties under the name Invitation Homes, based in Dallas, Texas.

Investors and financial analysts are asking the same question. How do rental properties translate into effective investor venues?

The answer is less than certain. Blackstone, currently the nation’s largest home rental resource, hit its real-estate stride during and after the Great Recession when the housing bubble erased more than $6 trillion in household wealth.

The result – homeowners with mortgages that exceeded their home’s value (dubbed “underwater” mortgages) sought financial relief, turned to the government, and – in extreme cases – simply walked away from their investment.

Blackstone, in the right financial place at the right time, bought up $10 billion worth of these foreclosed properties. Today, these properties comprise roughly 50,000 homes in 14 major cities, mostly on the West Coast and in Florida.

Invitation L.P. is Blackstone’s brand designed to handle the massive amount of paperwork and footwork needed to keep the properties occupied and paying for themselves. Invitation is also the largest player in the field, leading even American Homes 4 Rent, which got its start in 2012 and now owns about 48,000 rental houses in 22 states.

In third place is Colony Capital, another REIT (real estate investment trust) whose January 2016 merger with Starwood formed a $7.7 billion single-family rental company under the name Colony Starwood Homes.

“Show me the money” seems to be the rallying call of potential investors, who wonder – quite rightly – how mega-scale home rentals will be able to show a profit, especially now that rental markets are beginning to sag after years of inflation.

This downturn, which cuts across the grain in America’s major cities, is typified by San Francisco, where rent for a modest one-bedroom has fallen almost seven percent since last year – and a full 10 percent from its October 2015 peak. This year-over-year decline, notes one expert, exactly reflects the situation in April 2010, at the bottom of the bubble. This time, however, it’s a blip and not a bubble.

Another expert, noting that the single-family home rental market is typically small in scale – one owner per one to three properties – sees the offering as a test of Wall Street’s unremitting attempt to “financialize” almost everything.

However one views the IPO (a financial instrument or the reason for retirement insecurity), Blackstone has its work cut out for it. It has to offer rental rates that will maintain occupancy and show a profit. Too pricey, and renters will opt to take that leap of faith to become owners. Too cheap, and the properties will attract precisely the wrong kinds of renters. It’s hard to strike a balance. In Phoenix, where Blackstone bought its first house in 2012, home prices are up almost 60 percent since 2012. In Las Vegas, prices are up even more.

It also has to continue to expand its stable of rentals, buying from a pool of homes that have become exponentially more expensive now that prices have returned to normal. (Is there a “normal” anymore in home prices?)

But the biggest obstacle in the REIT rental market – and the stumbling block for shareholder imaginations – will be the cost of keeping many different properties in disparate locations going. Economies of scale seem almost unapproachable. How does one collect the rent, routinely inspect the properties, make repairs, and negotiate new leases without spending a bundle?

This is a problem that management companies only enhance, since the cost of management generally runs as much as 12 percent per unit. Own up to 10 rental units in the same area, and said management company may only charge seven percent, but even that is a narrow margin once the rent is virtually shaved to the bone to keep the property occupied.

Of course, Blackstone is managing itself, but it has also spent about $25,000 upgrading each rental home, so the profit margin is already narrow enough to slip a credit card through. The only advantage Blackstone has is a playing field of prime locations – an advantage the company has capitalized on by choosing homes in very good areas (i.e., the top school districts and upwardly mobile, attractive communities with good roads, “green” spaces and family-type entertainment and dining options).

Turn that equation upside down by noting that the homeownership market in the U.S. has now hit the lowest level since the mid ‘60s, and the potential of rising interest rates now makes the opportunity even less likely for an emerging marketplace comprised of Millennials.

Blackstone’s move is a surprise, given existing circumstances and the fact that American Homes (NYSE: AMH) – which had its IPO in August of 2013 – has shown a net loss every year and an almost consistent negative PE ratio. In spite of which, its December 12 stock price opened at $20.73.

Colony hasn’t done any better, though its stock also rose to an all-time high of $30.35 on Dec. 9.

And a final bit of advice: given the likely rise in interest rates, says one pundit, anyone investing in REITs would do well to avoid houses and take a plunge in warehouses. After all, why not?

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