Archive for the ‘Home Buying’ Category

• Apr 24

  Short Sales Speed Up

  Home buyers, sellers in foreclosure and real estate investors have long complained about the ridiculously long amount of time it has taken for banks and mortgage loan servicers to process short sales. Finally it seems everyone might be getting their wish, whether they end up really enjoying what they asked for or not.

  Short sales are speeding up!

  Bank of America recently announced that its new online platform for processing short sales will cut decision times down to just 20 days from 45 days or much longer previously. However, it also means real estate agents will only have 5 days to submit new offers if a deal falls apart.

  Following on the is lead Fannie Mae and Freddie Mac have also come out announcing that they are also expecting their loan servicers to dramatically cut down their processing time for short sales in an effort to speed up the movement on delinquent loans and foreclosures. The new requirements will demand decisions to be made on short sales within 30 days, though in some cases this may be stretched out to 60 days.

  Freddie Mac alone processed 45,623 short sales last year and we may see even more this year. Faster short sales are good and bad for real estate investors. Despite complaints about the amount of time it has been taking to close deals and make profits, the truth is this allowed investors to get the best deals and do a lot of maneuvering during wait times.

  Short sales remain great for sellers for whom it may be the last chance to get some cash out of their homes to walk away with and avoid the worst consequences of a real foreclosure. However, sellers also need to be ready to move and looking for new digs extremely quickly.

  Tags: buying a home, selling a home, short sale
  Posted in Home Buying, Home Selling | No Comments »

• Apr 23

  4 Real Estate Investors Mistakes to Avoid

  Investing in real estate can be incredibly profitable but it can also be frustrating for real estate investors who rush in to wing it without getting the right real estate education and not knowing where the pitfalls lay.

  Watch out for these 4 common killer mistakes real estate investors make…

  1. Underestimating Property Management

  Becoming a landlord may be way better than any job you have had before and owning rental properties may pay a lot more. However, this doesn’t mean being a landlord is stress free or fun. At some point you are going to want to hire a property manager. Plan ahead and factor this into your cash flow so it doesn’t bankrupt you later.

  2. Not Addressing Maintenance Issues Promptly

  Dealing with repairs can be a pain and it is often tempting for real estate investors to skimp where they can to maximize cash flow today. Unfortunately, this often comes back to bite you. The problems can quickly expand and become far more costly than if dealt with right away and constant patching versus replacing just means wasting more money in most cases. Don’t let deferred maintenance drag you down.

  3. Not Carrying Proper Insurances

  No one loves having insurance and we all know that it rarely pays out as much as you want, when you want it to. However, this is not something for real estate investors to skimp on. Even if you don’t take out a mortgage and aren’t required to have it, it could save you big time later. This applies to both title and hazard insurance. Remember, protecting your capital and equity must be your first concern.

  4. Not Accounting for All Closing Costs

  As with all things in life, closing costs are generally always more than you hoped or expected and your net paycheck is less. A few dollars or even a few thousand dollars may not sting most of the time but being careless with your math can quickly put you in the hole and lumber you with dead weight properties you can’t get rid of.

  Tags: investing, property insurance, real estate investing
  Posted in Home Buying | No Comments »

• Apr 20

  Buying a Home with Structural Problems

  Is buying a home with structural problems something you should run from or an opportunity to get a huge discount?

  Home buyers, especially first timers often find buying their ‘dream home’ becomes a scary proposition after receiving their home inspection report. Long checklists of repair items can add up into lots of dollars quickly, some of which can be very expensive and even prevent the buying of a home due to lenders unwilling to finance.

  It is important for home buyers to remember that the inspector is just doing a thorough job and normally doing their best to prepare you or give you the ammunition to negotiate a better deal. Take your time to go over the home inspection with your inspector in person. Often you will find that many of the items are extremely common and may not be a concern at all. At least not during the time period you plan to own the property. Others may be nice to fix cosmetic items that do not affect your value or enjoyment of living in the home at all.

  Then there are structural problems which threaten the home’s security and which lenders will sometimes demand fixed before financing. Structural issues come in all shapes and sizes and varying degrees of severity.

  Termites are a great example. If you are buying a home in Florida the chances are the home has had termites at some point or other, just expect it. Unless the place is falling apart buyers shouldn’t be scared off. Often a little spray spot treatment will do the job for a few bucks. In extreme cases the home may need to be tented and fumigated but the seller will take care of this most of the time and it costs just a few hundred dollars.

  In other parts of the country like Texas, foundation issues are common and often relatively easily fixed with a few piers, though this may not necessarily be cheap.

  Then you have major foundation issues, flood damage and roofs caving in. This can be a completely different story. If you need a new roof right away, it can cost tens of thousands of dollars. Flood damage could mean stripping the home down to the frame. These properties may offer huge discounts, you may have little competition for them and you may be able ot make a profit flipping them but make sure you have plenty of cash, know exactly what you are getting into and expect it to cost a lot more than you anticipate. You may want to leave buying a home like this to only the serious pros.

  Tags: buying a home, rehab, structure problems
  Posted in Home Buying | No Comments »

• Apr 17

  Real Estate Investing and Avoiding Nightmare Tenants

  Buy and hold real estate investing has become incredibly popular recently but your ability to succeed and enjoy a positive income is directly tied to your ability to avoid nightmare tenants.

  There are good tenants, average tenants and absolutely horrific tenants who seem to have been put on this earth specifically to plague landlords. You need to avoid the latter at all costs.

  Bad tenants don’t just jeopardize your ability to pull in a steady income, cause property damage which needs to be prepared before being able to lease it again or blow up your phone at all hours of the night and weekend. They can put a halt to your income and put you in a negative cash flow situation for months, talk badly about you whether you deserve it or not and fire off a barrage of lawsuits which threaten your financial security.

  Avoiding taking on these tenants is the first step to protecting your real estate investments. The key here is great screening. Unfortunately even the most intelligent and experienced at real estate investing sometimes slip up here. Don’t become too over confident. Create a solid system and checklist for meticulously screening every tenant. Remember, if you are investing for the long term this tenant could be with you for the next 20 years. Isn’t it worth spending 15 minutes to do a background check and call references? Listen to your gut too.

  Unfortunately, no matter how extensive your efforts to weed out bad tenants at some point you are going to get a deadbeat. It’s just part of real estate investing. Which is why it is much smarter to spread your investments, rather than putting everything into one basket.

  When you realize you have a dud you need to be proactive about replacing them as soon as possible. Being late on the rent once because of a real, dire family emergency is one thing. Withholding rent for bogus reasons and calling the local news station to report you as a bad landlord is something else.

  The question some may ask is if you can even evict someone today. In some extreme cases in the current market, sheriffs have failed to actually follow through and that is when they finally get around to it between foreclosure evictions. So what can you do? You should certainly follow through with eviction steps on time. However, you may also want to consider other options such as helping them to find other housing, even paying them to get out and above all be nice, it will go a lot further, though having a great attorney is often a necessity too.

  Tags: investing, renting, tenants
  Posted in Home Buying | No Comments »

• Apr 16

  73% of Americans Say Now is Time for Buying a Home

  Fannie Mae’s March Housing Survey reveals that 73% of Americans believe now is a good time for buying a home.

  Americans are just attracted to the current market and feeling more confident about the outlook for home values in the near future they know these conditions won’t last forever.

  More statistics revealed:

  • 44% expect their finances to get better this year
  • 48% are afraid rents will keep on increasing
  • More consumers expect mortgage rates to rise soon
  • 33% expect prices of homes to increase soon

  While it is likely that these assumptions are correct, what is more important that the consensus is positive and that together they mean buyers in the market are highly motivated to move quickly.

  This is great news for sellers and real estate investors but perhaps not so much so for others interested in buying a home. Why? Because it means more competition, more buyers in the market and more eagerness to pay full asking prices or above. Unfortunately, it probably also means many overconfident sellers, demanding unrealistic asking prices. This will only be compounded as more people buy and the real stats continue to improve.

  Now is a great time for buying a home but clearly waiting will almost certainly mean paying more in both purchase price and worse, higher interest rates. This doesn’t mean that those who have to wait 6 months shouldn’t consider buying a home. It just means those who can get in now have more to gain. The additional appreciation and long term savings from lower interest potentially means hundreds of thousands of dollars difference over the next 30 years. Add to this the compounded effects of this money invested over time and it is far more than most ever imagine.

  Whether you are just contemplating buying your first home or are trying to rebuild your finances and assets, there is a door of opportunity open right now.

  Tags: buy a home, Home Buying
  Posted in Home Buying | No Comments »

• Apr 5

  Rehabbing Properties: Common Traps to Avoid

  Rehabbing properties can be rewarding and a lot of fun but it can also be full of pitfalls.

  It should go without saying but you always have to anticipate that the costs will come in higher than expected and work will take longer than expected when it comes to rehabbing properties. As long as you are prepared for this you’ll be fine.

  Know that there is a big difference between rehabbing properties for profit and redecorating a home to live in. While many projects might may make a home look more appealing and help to attract buyers they may not add anything to the value of your home in real dollars and sense. This is a common misconception too many homeowners still fall into, even with all the TV shows on the topic. Just because you import marble direct from Italy for floors and counter tops, get a great deal on imported furniture from South America or hang expensive art, plant $10,000 trees and put in top of the line appliances you won’t see any difference in your appraised value.

  Another important factor to remember when rehabbing properties today is to try not to increase maintenance demands. Most buyers are being more cautious about their spending than ever before and they are also more educated about the additional costs of homeownership than before. This applies to landscaping and planting exotic trees or flowers, putting in swimming pools and more.

  Those who are specifically rehabbing properties for profit also often still let their creative design ideas interfere. It can be so tempting to want to try out all types of cool designs and new materials but remember you aren’t going to be living there. You should do a quality job of rehabbing a property but the more personalized or ‘niche’ you make it the more potential buyers you could be alienating.

  Tags: Flipping houses, mistakes, rehabbing
  Posted in Home Buying, Home Improvement | No Comments »

• Apr 3

  Are We Already Blowing a New Housing Bubble?

  A new Wall Street Journal report and data from the National Association of Realtors shows a large percentage of the new housing surge is coming from real estate investors. Does this mean we are already headed for another bubble and what will this do to the stability of the real estate market?

  New statistics show a jump in sales to real estate investors of 64.5% last year and 7% rise in vacation home buying. Many real estate investors are buying more than one property and some parts of the country are seeing a big surge in both prices and transaction volume.  However, this activity is a lot different to what we saw in the early 2000s.

  For a start, there is far more regulation than ever before and appraisals and lending are clearly tougher. Plus, a large percentage of these buyers are paying cash or at least taking advantage of extremely inexpensive financing. Real estate investors are also turning over many of these properties incredibly quickly, so they will not be a risk later on. Those acquiring rentals are doing so at record cash flow levels and spreads which they will be able to maintain regardless of future value fluctuations providing they don’t milk all of the equity from them when they go up. Plus, the large percentage of foreign real estate investors in the market provides additional security and diversity as even if our economy struggles not everywhere in the world is likely to be in a crunch at the same time.

  In contrast to the speculative boom running up to 2005 the current surge is seeing huge chunks of the country are being turned into long term rentals. This will mean lower inventory for years, likely decades helping the market to absorb new construction and propping up home prices.

  Tags: housing bubble, investing
  Posted in Home Buying | No Comments »

• Apr 2

  Tips for Foreign Nationals Buying San Diego Real Estate

  San Diego, California remains one of the world’s most popular destinations not just attracting tourists but those who want to make it their new home but what should you know before you buy into San Diego real estate?

  While mortgage interest rates are low and discounts are incredibly attractive it is important to understand how the process can be different from what you are used to and get to know some of the terms you will come across.

  You will certainly find many agents and sellers lining up to sell you their San Diego real estate but instead of running off the plane with a check in your hand it may be smart to rent for a month or two while you get to know the different parts of San Diego and how they differ.

  Consider what is most important to you in the long run. SeaWorld is cool but being just a few minutes away probably isn’t necessary unless you will really be going every weekend. Check out schools, offices if you’ll need one and check the difference in pace of life and what you’ll get for your money in different zip codes.

  Foreclosures may still be hitting the San Diego real estate market but you should give serious thought to whether you really want to be dealing with the complexities of home renovations from abroad while your home is being fixed up or if you are better off cutting out the stress and buying a property which has already been renovated.

  Don’t automatically rule out financing either. It is true that there are bidding wars going on and cash may be required to get the home you love the most but it you require something a little bigger than your cash on hand will allow there are sources for obtaining low loan-to-value mortgages for buying San Diego real estate.

  Tags: buying a home, san diego rela estate
  Posted in Home Buying | No Comments »

• Mar 30

  Tips for Buying an Investment Home in Connecticut

  Interested in buying a home in Connecticut as a rental property? The conditions may have never been better for buy and hold investors but that doesn’t mean you should rush in without doing your homework.

  If you have your heart set on buying a rental home in Connecticut instead versus flipping houses start by deciding whether you are willing to entertain taking on a handyman special which will require you to do your own repairs and remodeling or if it is better to take the safer and lower stress path of acquiring properties which are already in rentable condition.

  Remember that unfortunately there are still many desperate sellers out there who may be willing to do and say anything to sell their homes in the current market. This not only means making sure you conduct a thorough home inspection but also verify rental rates, leases and deposits amounts with the actual tenants themselves.

  If there is no long term lease or tenant in place make sure that you double check the rental demand in the area before buying any investment home in Connecticut. Of course right now the odds are good that demand is high and rents are rising quickly but don’t get caught out.

  If this is your first time buying a home in Connecticut then be extra careful to make sure that you are fully aware of all the expenses involved which could affect your returns and cash flow. This includes association dues, shopping around for the best insurance rates and of course property management services so that you aren’t tied down to your new investment.

  Lastly, ask around or do your due diligence online to determine if the neighborhood headed up or down. Not just in terms of values but crime rates, demand and the quality of schools in the area.

  Tags: buying a home, buying a home in connecticut, connecticut, investing
  Posted in Home Buying | No Comments »

• Mar 29

  Tips for Buying a Home in San Diego

  Thinking about buying a home in San Diego?

  You can save a lot of time when shopping for buying a home in San Diego by taking a few minutes to define exactly what is most important. How big should it be, how many bedrooms do you need, which are do you want to live in and what price range can you afford?

  If you are planning to live here for a while then think about your needs in the future too so that you aren’t forced into selling and moving at a bad time. You could end up having children or more of them or will your parents end up moving in so that you can take care of them? Perhaps you can offset the cost of a slightly larger home than you need now by renting out a room, if not on regular basis perhaps for higher rates to tourists or business travelers through Airbnb.

  However, the first step in buying a home in San Diego unless you are determined to pay cash should be getting pre-qualified for a mortgage. Banks are lending but there are definitely more hoops to jump through today. Make sure you won’t have any issues and find out exactly how much you qualify for early.

  You can also limit the number of homes you will have to go see by deciding upfront whether you are fine with buying a fixer upper home in San Diego and renovating it yourself or whether it is smarter to and safer to finance a home that has recently been remodeled and will require less cash out of pocket.

  Take a look around and get a feel for home prices in the current market so you don’t get taken advantage of. However, good properties are moving quickly and you need to be ready to make a decision and move quickly when you find something you like.

  Finally, make sure you are aware of what kind of timeline you should anticipate when buying a home in San Diego, CA. Know that short sales can still take months to close but waiting too long could see prices rising, especially with the peak summer season coming.

  Tags: buying a home, Buying a home in San Diego
  Posted in Home Buying | No Comments »