Why go for the Top When There's the B-List?!

Whether you are looking to buy your first investment property or your 10th, the market conditions and future changes are always a concern, especially since 2007 wasn't all that long ago. Of course, from my experience those that have a lot of experience purchasing investment properties are much more relaxed about future market conditions and more open to opportunities to purchase a great money maker. Those investors seem to run on a fundamental understanding of long term real estate values. T. Harv Eker stated it best when he said "Don't wait to buy real estate, buy real estate and wait." No matter what happens to the market on a short term scale, the long term numbers always go up, and you'll get more out than you put in.

Now it's time to understand the B-List. An A-list is defined as "a real or imaginary list of the most celebrated or sought-after individuals, especially in show business." If we used that to talk about real estate, it would be talking about the top, most desired and most expensive locations to own a home. I refer to B-List locations as places which are fairly decent but less desirable and more affordable.

When it comes to real estate, obviously location is important. As an investor, you want to maximize the amount of money you invest without having to tie up your money for too long. In the stock market, you could buy top stock, but it will cost a lot and grow very slowly. The same principle can be applied to land. B-list locations are the best areas to buy land and sell within relatively few years to get the most money.

How do you identify the B-List locations? I could write a small book about this, but for now I'll oversimplify and list some factors that help to drive home values up.

- Healthy job market, plenty jobs and higher paying jobs becoming available

- New commercial retail development, new coffee shops, upscale restaurants and grocery stores, improved areas and more options to shop.

- Construction: New homes, especially single family or upscale town homes.

Consider any new developments or positive changes in a community. These contribute to increasing the area's desirability and attract more affluent residents. Ask yourself, which areas are up-and-coming?

Within the Bay Area, right now parts of Hayward are B-List locations and have been seeing increased demand, new developments and home values have climbed quite considerably. Fremont is also seeing explosive growth, but many areas are at A-List status already. Parts of Fremont and Newark have great potential though. I have also seen some great B-List areas in San Jose as well as other cities. For more information, contact me. Happy investing!

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Building your Credit Score

In today's market, unless you have tons of cash, having an excellent credit score is paramount to securing a good loan for your next home purchase. This blog will discuss how to track and build your credit to help you achieve your future homeownership goals.

To start with, in order to build your credit you need a credit history. If you have no credit cards or loans then you can't build credit. The place to start is opening up a basic credit card, using it for purchases, paying most all of the balance but leaving a little to roll into the next statement period so there is something positive to report. I recommend starting with Capitol One, they have options for everyone and many excellent features.

Knowing what impacts your credit score and by what degree helps you to keep on track with how you use your credit. Consider the following impact graph:

Make the following your personal goals in order to build credit.

• Never spend more than you have. If you can't buy it with cash, don't use credit. You want to keep your balance low, because a high balance tears your credit score down very quickly!
• Do not open too many accounts. You will receive tons of credit card offers. Ignore them, and even opt out so you are not tempted. Don't have more than one or two credit cards.
• Never miss a payment. Always make your payments on time because this has a high impact on your credit score. If you can't make a payment, borrow from family or find a way to post payment on time.
• If you get a car loan, be sure you are stable in your job and make more than enough to cover all monthly expenses and be able to save each month as well. Some people have not been able to get home loans because of car loans, so keep this in mind and prioritize your finances for what really matters.
• Track your credit score regularly and look for any new accounts or unusual activity that you did not authorize. Always protect your login, password and credit information. Theft and fraud can do a lot of damage to your credit. Many credit companies will have automatic alerts for any new activity, Capitol One is great with this.

Here is a basic breakdown of how the scoring system works...

Be sure to keep things simple. Basically, don't have too many credit accounts, track your spending and keep all balances low, and your credit will grow! For more advice and information comment or send me a message and I will be happy to get you going down the right path.

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