The loan underwriting process may get more difficult for originators and consumers before it gets easier, a Citibank director has said.
At an industry conference last week, Ray Romano, director of Originations Risk Management for Citibank said that mortgage bankers are having a difficult time joining common sense underwriting and the QRM and ability to repay rules, according to a Houston Chronicle report.
He and other industry professionals were speaking at a Houston Relocation Professionals (HRP) event entitled: "Current State of the Mortgage and Appraisal Industry," at the Houston Country Club.
Rising interest rates will affect applications and loan approvals, too, said Thomas J. James, president of Premia Relocation Mortgage, the report said.
READ THE ENTIRE ARTICLE HERE: http://www.mpamag.com/mortgage-originator/underwriting-could-get-worse-before-it-gets-better-15433.aspx
It is quit clear from this post and others you have posted today that you are not an actual homeowner in need of advice but rather a shill for Robert Noggle, Noggle Law PLLC. If Robert has useful advice maybe he should post it on here and if people find him knowledgeable they can contact him for his services. But posting like you are a homeowner in need of help then answering your own questions with phony ads for Robert Noggle, Noggle Law PLLC is not going to get you business. In fact it is insulting that you think people are too stupid to not see through the scammish ads you are posting. You make yourself and Robert Noggle, Noggle Law PLLC look bad and unethical.
If anyone really wants to know if they should use an attorney to do a short sale maybe you should read around and do a little research. I have seen several threads about people complaining how attorneys have over charged them for "short sale negotiations" and never got the deal done. A GOOD REAL ESTATE AGENT CAN GET A SHORT SALE DONE FOR THE CLIENT WITHOUT COSTING THE CLIENT A PENNY. I can not tell you how many deals I have seen fall apart due to attorneys' over worded contracts that scare off buyers, or that fell out because an attorney did not know how to negotiate with the lien holder properly.
Anyone interested in short selling their home with no out of pocket costs to the homeowner should contact me directly or fill out our seller's form here:
Hello, Jillian Already Sent You A Contact Request; Please Call Me Tue. Between 11:00 and Noon or After 2:00 Email Pics. Discuss Financing. Thanks.
Very interested, however as a result of a long GI illness, we have a beer pocket book, and champagne taste!. Hard to find a decent home at a reasonable price; until now! Only current real concern is: the neighborhood. Need safe, tranquil clean area, with decent neighbors. ALSO, we live on the Central Coast (gorgeous area but VERY pricey) AND... spontaneous travel is not possible due to my husband's condition. Therefore, we have to make sure our trip will be productive and sign a( great) deal before we leave L.V. Your cooperation and expertise will be most appreciated. Thanks/Merci Beaucoup. Marie-Sol(ange)
Rate volatility could continue this week with major economic announcements set to shake up the market, an analyst has said.
MBS Authority senior bond analyst Bryan McNee has said originators should keep the ears to the ground for economic data due out this week which could see the run of MBS sell-offs continue. In today's Weekly MBS Wrap on MPA TV, McNee looks back at the previous week on the MBS market, and what originators can expect from the week ahead.
Positive economic news last week saw a massive sell-off of MBS, McNee said, which led to skyrocketing mortgage rates.
"Mortgage backed securities sold off a whopping 246bps. In fact, we had the highest rates of 2013 on Friday afternoon," McNee said.
This week could see further volatility on the market, McNee said, with the release of other important economic indicators.
"We don't get a real dose of data until Tuesday ... but the key is going to be the [Federal Open Market Committee] minutes on Wednesday," McNee said.
READ THE ENTIRE ARTICLE HERE: http://www.mpamag.com/mortgage-interest-rates/how-to-prepare-for-this-weeks-mortgage-rate-madness-15442.aspx
I Am Looking to Purchase An Apartment Complex In Las Vegas Up to $2million. Can Anyone Please Tell Me Which Area Has Better Returns? Thanks.
I have a client that owns a few apartment complexes that are not currently listed for sale but if you are interested I can see if he is interested in selling them now. I know he was planning to hold them for a while longer but if the numbers work he may want to off them now. Please email me if this is something you may be interested in.
U.S. home prices may not rise as fast as they had been, but take it as a sign of normal.
FORTUNE – For many months now, U.S. home prices have risen to new highs as the housing market recovers from one of the worst crashes in recent history. The rebound comes as more Americans find jobs and as homebuyers work their way through the remaining housing inventory following years of lackluster construction.
Just before mortgage rates began their swift march upward, prices in 20 U.S. cities climbed 12% in April from a year earlier -- the biggest gain since early 2006 when home values began to level off before the market collapsed, according to Standard & Poor's Case-Shiller home price index released Tuesday. Some of the hardest-hit markets during the recession saw the biggest one-year jump, with prices in Atlanta, Detroit, and Las Vegas each rising about 20%. In Los Angeles, prices rose 19%, while prices in Boston, Chicago, and Denver increased almost 10%.
While we can breathe a sigh of relief at the double-digit increases, it likely won't last. The rise in home prices is expected to slow later this year or next.
Don't fret, though! This doesn't signal the recovery has stalled; it's actually a positive sign that the market is returning to normal.
In the recovery's next phase, home prices nationwide will rise slower by 8% in 2013 and even slower by 4% in 2014, according to Paul Diggle, property economist at Capital Economics. The firm's outlook for next year is lower than the consensus of 5.5%.
The slowdown is a positive sign because if prices were to continue rising the way they have at 12% annually, homes would be overvalued relative to rents within the next few months and relative to incomes by early 2015, Diggle writes to clients.
Part of what was driving prices higher was demand from large investors, who bought foreclosed properties in bulk at deep discounts. Those properties have dwindled, however. And as prices continue to go up, investors aren't seeing as many bargains as before.
As investors fade from the recovery, sellers are making a comeback.
It's an important development, as many homeowners with mortgages worth more than the value of their homes resisted selling at a loss during the downturn. That has been changing, however. During the first three months this year, 850,000 homes returned to positive equity, according to CoreLogic. That means 19.7%, or 9.7 million, of all residential properties with mortgages were still underwater, down from 21.7%, or 10.5 million, the previous quarter.
With home prices rising and fewer borrowers underwater, many more homeowners think it's a good time to finally put up that "For Sale" sign, according to a May survey by mortgage finance company Fannie Mae. The share of respondents who say now is a good time to sell a home reached a record high of 40%, compared with 30% in April and 16% a year earlier.
The inventory of homes for sale bottomed in January and rose by 128,0000 homes, or 6.1%, since then, Diggle notes.
So if over the next several months prices aren't rising as rapidly, know that the recovery is still strong; it has just entered another chapter.
READ THE ENTIRE ARTICLE HERE: http://finance.fortune.cnn.com/2013/06/28/housing-recovery-prices-2/?source=linkedin
If you’ve been active in the real estate market over the last several years, you’ve watched with the rest of us as mortgage interest rates fell … and then fell some more …. and then just when they were about to rise … they fell even more. Who would have imagined mortgages as low as 3% just a few years ago?
It’s been phenomenal for buy and hold real estate investors who have been able to achieve fantastic cash on cash returns with such favorable financing. Wouldn’t it be great if we could all just sit back and plan on low purchase prices and low interest rates for years and years to come? It certainly would, but I definitely wouldn’t bet on it. In fact, in just one year, we’ve seen real estate values make major strides towards pre-recession prices. And what I would argue is equally notable, interest rates look to be on the rise as well. In fact, the chief executive at JP Morgan Chase was recently quoted as saying “I think you all should be ready, because rates are going to go up.”
What’s the Impact
Many investors are watching rising real estate values with a sense of urgency to purchase while the deals are still good. However, I would argue that while increasing prices are definitely a motivating factor, rising interest rates are just as, if not more important to watch. Interest rates are definitely less predictable than rising values and can move in either direction much quicker as well. As we all witnessed just this last month, any minor shifts in policy or market demand can have a tremendous affect on mortgage interest rates and can affect future returns on an investment on a moments notice.
For example, let’s say you are getting a loan on an investment property for $100,000 at 4% interest (assuming 20% down on a purchase price of $125,000). Your principle and interest payment is going to be $477 and for the sake of this example, let’s say you anticipate monthly cash flow of around $300/mo.
Now what if you wait a few months to buy this property and interest rates jump a full point to 5%. Your principle and interest payment goes up to $536 a month – an increase of almost $60/mo. Your monthly cash flow now decreases to $240/mo. Do you realize that your monthly cash flow decreased by 20% as a result of your interest rate going up by a single percentage point?!
Strictly analyzing this from a cash flow perspective, that 1% increase in interest rate is actually the equivalent of that property increasing in value by $15,625 dollars! That’s right, if the property were to increase in price to $140,625 and you were able to get a loan for $112,500 at 4% (again, assuming 20% down on a purchase price of $140,625), your principle and interest payment would actually be the same as the $100,000 loan at 5% interest.
Bottom line – in terms of cash flow, that 1% increase in interest rate represents a difference in value of $15,625 dollars in this example! It also represents a 20% decrease in monthly returns.
I don’t know about you, but I’ve never been more motivated to finance properties before this incredible ride comes to an end. We all know that our economy can’t sustain these low interest rates for much longer. It wasn’t that long ago that investors were getting loans in the 6 and 7% range … and my guess is that’s where we will find ourselves in the not too distant future. I think investors would be well advised to take advantage of financing in the sub 5% range while we still have an opportunity.
READ THE ENTIRE ARTICLE HERE: http://www.biggerpockets.com/renewsblog/2013/07/03/the-impact-of-rising-interest-rates/
I am a local listing broker for HUD and I figured I would write about what I know best for my first BiggerPockets BlogPost – buying a HUD home! I see many posts on the BiggerPockets forum about buying HUD homes – and I see a lot of great information from the BP community and and some not so great information as well. I hope to provide the BP community with some great tips on submitting bids on HUD homes and what to watch out for if you get a bid accepted. I know many of you know a lot about HUD, but hopefully you can learn something new that will help your business when buying a HUD home. This article will focus on an investor looking for a HUD home, if you are buying as an owner occupant most of the rules for HUD are very different.
HUD Asset Management Companies
HUD uses different asset management companies in each state and across the country to sell their homes. Home Telos, Matt Martin, Pemco, BLB, Ofori, Best Assets are some of the asset management companies that sell HUD homes. Each asset management company has slightly different policies regarding HUD home sales, but the budding policies are basically the same for each company.
Choosing a Realtor
To submit an offer on a HUD home, a buyer must use a Real Estate agent who is registered with HUD. If you are working with a Real Estate agent, ask them if they are registered on Hudhomestore.com. If your agent is not registered with Hudhomestore it means they have not submitted a bid on a HUD home in the last three years. The next question to ask if your agent is not registered with Hudhomestore.com, is if their broker has an NAID number. If their broker does not have an NAID number, it can take six weeks for them to obtain one from HUD. If you are choosing a new agent, these are some great questions to ask to see how savvy the agent is with HUD.
If you find an agent who is registered with HUD I would also ask how many HUD deals they have done in the last year. Buying a HUD home is very different than most transactions and I see many experienced agents have problems with their first HUD deal. I am not saying you should ditch an agent you have been working with for years if they are not a HUD expert, but if you are searching for a new agent it is a great way to see how experienced they are.
Extra Costs Associated with Buying a HUD Home
There are more fees and costs than a normal sale with HUD, especially for an investor.
1. HUD considers investors to be savvy and experienced when buying a home. That means they will keep an investors earnest if the investor backs out. HUD allows an inspection to be done, but if an investor backs out due to inspection issues, HUD will keep the earnest money. There are some circumstances where HUD will refund an investors earnest money. If An investor has their loan denied they can get half of their earnest money back. If the home is damaged or vandalized after a contract is accepted, HUD will allow the buyer to back out and return the buyer’s earnest money. For the most part, as an investor do not depend on getting your earnest money back of you back out of a contract.
2. HUD does not pay for title insurance. Sellers typically pay for title insurance in many states, but HUD does not. You may use HUDs title company or your own, but you will have to pay for title insurance and closing fees.
3. HUD does not turn on utilities for inspections. It is the buyer and their agents responsibility to request permission to turn on the utilities and then turn them on. Any costs associated with turning on the utilities including deposit, transfer fees and usage must be paid by the buyer. During the winter months, HUD will also charge $150 to winterize the home after a buyers inspection if the buyer turns on the water. HUD will pay for past owed balances and liens against a HUD property.
4. If an extension is needed for closing, the buyer must pay HUD for an extension. The cost for the extension is as follows: purchase price is equal to or less than $25,000 you have to pay a $150 extension fee ($10 per day) for 15 days. $25,000.01 to $50,000 is a $225 fee ($15 per day) for 15 days. $50,000.01 and over is a $375 fee ($25 per day) for 15 days. The extension fee is pro-rated so if the full 15 days are my used, HUD will refund money for the unused days.
When Can Investors Bid on HUD Houses?
HUD changed their entire system three years ago and changed the bid periods for owner occupied and investor buyers. A very important thing for investors to realize is there are different bid periods for FHA insured HUD homes versus FHA uninsured HUD homes. FHA insured homes allow owner occupants to get an FHA loan on a HUD property. Basically if the HUD appraiser thinks a home has less than $5,000 in repairs to go FHA it will be listed as FHA insured. If the HUD appraiser thinks a home needs more than $5,000 in repairs to go FHA, then the home will be listed as FHA uninsurable.
FHA insurable homes have a 30 day owner occupied bid period. Investors cannot bid on a HUD home until the 31st day the has been actively on the market. There is no way around this rule as an investor, unless you are willing to risk committing a felony punishable by up to five years in prison and a $250,000 fine. One thing to remember is HUD stops the bid period once a bid is accepted. If a home has a bid accepted on the 11th day, and that contract falls apart, then the property comes back on the market as if it has been for sale for 11 days. If you see a HUD home that has been listed in MLS for 45 days, it may not be eligible for investors yet, if it was under contract for 30 days and then came back on the market.
FHA uninsurable homes have a completely different bid period. With FHA uninsured homes there is a 7 day lottery period for government and non-profit agencies to bid. Depending on the asset management company HUD homes may or may not be listed in MLS during the lottery period. After the 7 day lottery period there is a 5 day owner occupant bid period. FHA uninsured homes provide a great opportunity for investors, since they can bid on the 6th day after the owner occupant bid period starts.
How to Tell What Bid Period a HUD Home is In
The number one question I get from buyers and agents is “can investors bid on this HUD home?”
It is actually very easy for any investor or Real Estate agent to see who can bid, if they know where to look. Hudhomestore.com lists every HUD home that is actively for sale. Once HUD accepts a bid they take the home off of Hudhomestore.com. It is very easy to search for HUD homes on their website, just type in an address, street number, county or case number and the property will pull up. Once you get on the property page HUD will list a lot of information and dates. There are two very important items to look at to determine who can bid on a HUD home.
- Eligible bidders tells you who can bid on the home. If the home is in the owner occupant period it will say “owner occupants, non-profits and government agencies only”. If the home is in the investor bid period, it will say “all bidders”.
- Period deadline tells you how much time is left in the current bid period. This date is the last day of the owner occupant bid period if the home is currently only available t0 owner occupant bidders. The day after this date, is the first day investors can bid on the home.
When Buying a HUD Home -Bid as Soon as Possible as an Investor!
In most areas of the country prices are rising and it is tougher for investors to find a great deal. HUD usually has very good pricing on their homes and can provide a great source for investors. Because of the great pricing we see on many HUD homes, there is a lot of competition when a HUD home makes it to the investor period. There are a couple tricks investors can use to gain an advantage over other investors.
The first trick investors can use, involves bidding on FHA uninsured HUD homes. HUD’s asset management companies will review all bids they receive on an FHA uninsured home on the next business day after the owner occupant bid period expires. The HUD asset management companies review the bids from very early in the morning to early afternoon. HUD allows buyers to submit a bid if the property is still listed on the website and properties are listed on the website until a bid is accepted. There is a short period of time that investors can submit a bid on these homes early in the morning after the owner occupant bid period expires, but before a bid may be accepted by HUD. I see the asset management companies accepting bids as early 6 am in my area. HUD closes the bidding at 12 pm central time, it may be wise for an investor to submit their bid right after 12 pm on that 6th day.
The HUD system saves all bids that are submitted by investors or owner occupants when the bids are marked “hold as backup”. Your Real Estate agent will have the option of marking “hold as backup” when they submit a bid. I always suggest buyers mark this option on every bid, as HUD does not consider a property under contract until they receive a signed contract. HUD will not make buyers stick to a bid they mark “hold as backup” if HUD accepts a bid and the buyers no longer want to proceed. If a property comes back on the market, HUD will review backup bids before they put the property back on the market.
Assuming an investor is able to submit a bid on a HUD home before HUD accepts an owner occupant bid, HUD will review that investor bid if the original bid cancels and no other owner occupant bids were submitted or deemed acceptable to HUD. This will give that investor a chance to have his bid accepted by HUD, before HUD puts the home back on hudhomestore for investors to bid on.
This may seem like an unlikely occurrence to have the owner occupants cancel their contract and no other owner occupant bids deemed acceptable. However, it happens quite often on HUD homes that are FHA uninsurable.
1. There is a very high cancellation rate for owner occupants on uninsurable HUD homes. Owner occupants cannot go FHA, without doing a 203k rehab loan and many conventional loans have requirements just as strict as FHA. Many owner occupants feel they can somehow work out financing on these properties, but end up cancelling because HUD won’t do repairs and the buyers can’t do repairs.
2. When an owner occupant goes through the process of trying to get financing on uninsured HUD homes, they usually take at least a few weeks if not much longer to realize they can’t make it work. Even if there were other owner occupant bids submitted on the home, by the time the first bid cancels many of the buyers who submitted bids have moved on and found different houses. Chances are very good that most of the owner occupant bids will not follow through and will cancel leaving the investor with a chance to buy the property.
How Much Less Will HUD Accept
HUD gives guidelines for the asset management companies to go by when accepting bids. In my experience HUD allows asset management companies to accept bids with a net price to HUD of about 11% less than asking price. The “net” price is a buyers bid minus commissions to agents and any closing costs paid by HUD. If a buyer bids $100,000 with 3% closing costs paid by HUD then the net price to HUD would be $91,000. $100,000 -$3,000(listing agent commission) -$3,000(selling agent commission) -$3,000(seller paid closing costs).
If you are wondering if the agent commissions are negotiable, the selling agent commission is negotiable, but the listing agent’s is not. If an investor is not asking for closing costs then the asset managers can accept a bid of about 5% less than asking price assuming a full 3% commission for the selling agent.
HUD will accept lower bids in some cases where homes have been on the market for an extended period of time. If a home has been on the market for 60 days or more an asset manager may ask HUD for special approval on a bid. I am not seeing may HUD homes last over 60 days on the market in my area, but it does happen occasionally. In my experience HUD will not accept “lowball” offers that are 50% of the asking price, but they may go as low as 20% below asking price on certain properties.
Submit All Bids on HUD Homes
Even if you think your bid is too low for HUD to accept, submit it anyway and have your agent mark “hold as backup”. HUD will keep the bid in the system and if the price is lowered, HUD will review previous bids in their system before they look at new bids. If the home becomes an aged asset and HUD has not received other offers. The asset management company may submit your bid for special approval. If HUD accepts a bid you made months ago and you no longer want the property, have your agent tell HUD you are no longer interested and HUD will cancel the bid.
Buying a HUD Home as a Wholesaler
I see many questions on the BiggerPockets forum from wholesalers who want to deal with HUD. Here are a few things for wholesalers to think about.
- HUD does not allow assignments, a wholesaler will have to buy the home before selling it.
- HUD will require a proof of funds letter on cash offers.
- You must send in certified funds with your initial contract for earnest money.
Inspections on HUD Homes
HUD allows investors to inspection HUD homes, but investor will not be able to get their earnest money back because of repairs discovered from the inspection. HUD does an inspection on each home before they list it, but they are not the most in depth inspections. Usually the utilities are not turned on and only a visual inspection is done on the furnace, hot water heater and other systems. HUD does do a pressure test on the plumbing system. HUD will disclose the inspection results in a document called PCR on Hudhomestore under addendums. If the plumbing system does not hold pressure, HUD will not allow the buyer to turn on the water. If an investor is getting conventional financing and the property cannot have the water turned on, make sure you check with your lender to see if that is acceptable.
Do Not Try to Cheat The System
HUD is run by the government and they take their rules and procedures very seriously. Pretending to be an owner occupant when you are really an investor is illegal and a felony. HUD can fine someone up to $250,000 and send someone to federal prison for violating the owner occupant rule. At the very least HUD will immediately cancel a buyers bid and take their earnest money if they find out a buyer is posing as an owner occupant. If you don’t think you will get caught, there are many investor who would love to bid on HUD homes in the owner occupant period who pay attention to who is buying them and would love to turn in cheaters.
HUD does not allow buyers to make any alterations to HUD homes before closing. That includes making any repairs, rekeys, storing personal items, or putting a sign in the yard. HUD also considers it a felony to alter a HUD home before closing. If HUD finds out any repairs have been made they will immediately cancel the contract and take the buyers earnest money.
Not only will HUD go after the buyers for violating rules on HUD homes they can take action against the Real Estate agent as well. If HUD thinks an agent is encouraging or allowing a buyer to violate HUD rules, HUD can take away the NAID number from the agents broker. That means no one from that office can sell HUD homes anymore.
Conclusion on HUD Homes
HUD has a very unique and in depth system that can be very intimidating to buyers and agents who are not familiar with it. However, HUD homes can provide great opportunities for owner occupied and investor buyers. I hope this article has provided a few tips to try out with HUD homes. I have not covered many areas of the HUD process like contracts and closings, but your agent should be able to walk you through those procedures. Please feel free to leave any comments or questions!
READ THE ENTIRE ARTICLE HERE: http://www.biggerpockets.com/renewsblog/2013/07/07/buying-a-hud-home/
Please visit our website : http://www.LVrealestateHELP.com
Our Real Estate Team of professionals can help guide you through the process of selling your home at NO COST to you the seller. Come in for a FREE consultation and let us discuss your specific scenario and then explain your options. Know your options before you just walk away. If you choose to short sell your home with us that's awesome, but even if you don't list your home with us atleast you have the tools to make the best educated desicion for your financial future. We are here to help. Visit our website to learn more about short sales and see short sale listings.
READ THE ENTIRE ARTICLE HERE: http://lasvegas.craigslist.org/rts/3901359635.html
Has anyone ran into this where Fannie is countering the buyer's offers on short sales waaay above what they will actually appraise at? Slightly above the appraisal value I can under stand due to the low inventory and high demand right now. But the price they want is unrealistic.
We have one right now and we are trying to get them to come down on the purchase price because what they are asking is ridiculously too high.
From what I have experienced and what I have been reading they would rather stick to the high price and foreclose on the property. The relisted it as a homepath (with Fannie financing) and NOT require an appraisal.
If you want to sign the petition to get the government to examine this and change it then sign the petition here: https://petitions.whitehouse.gov/petition/force-fannie-mae-behave-responsibly-or-shut-them-down/vtY71bhk?utm_source=wh.gov&utm_medium=shorturl&utm_campaign=shorturl
For more information on all of this visit our forum: http://lvrealestatehelp.weebly.com/#/20130130/fannie-bpos-coming-in-way-high-anyone-else-ex-2346239/
READ THE ENTIRE ARTICLE HERE: http://lasvegas.craigslist.org/reb/3897287520.html
I Live in Summerlin Now, However, My Child Will Be Attending West Tech Career Academy in the Fall and I Need to Rent a Single Family Home Very Close.
Plug in the details about what type of home you need in that area and we can send you a list of homes that match your needs. You can find the FREE rental search form here: http://lvrealestatehelp.weebly.com/property-management--rent…
I look forward to hearing from you.
If you are looking for rental properties close to the airport you can plug in your info into this free renttal search and it will send you the properties that match: http://lvrealestatehelp.weebly.com/property-management--rent…
I look forward to hearing from you.
This house is listed for sale on the MLS but not for rent. Are you looking for a rental or to buyer? Either way we can assist you.
Start your FREE rental search here: http://lvrealestatehelp.weebly.com/property-management--rent…
Start your FREE no obligation buying search here: http://lvrealestatehelp.weebly.com/buying-real-estate.html
Or feel free to contact me directly at the contact info below. I look forward to hearing from you.
Fill out this free rental search form on my website and we will help you find a place that matches your scenario.
It sold on 6-11-2013.
There are currently no homes available for sale in this neighborhood. The 4 properties that are for sale currently are already in escrow.
If you want to fill out our buyer's form at the link below I can set you up on an auto search to received listings for this neighborhood the second they become available. This way you do not waste your time looking at listings that are not available. this will also help you get your offer in to the seller as soon as it hits the market vs waiting until it shows up on sites such as this one.
Or feel free to contact me directly anytime.
I look forward to hearing from you.
READ THE ENTIRE ARTICLE HERE: http://www.trulia.com/voices/Property_QandA/Is_this_home_still_for_sale_-544741-p_1-recent?answerId=1908188#left_content
Traditional Sale, Can Close Quickly, Send All Offers, Seller in Process of Cleaning Up and Doing Touch Up Work
It is now cheaper to buy a home than to rent in 98 of the 100 largest U.S. metropolitan areas. Years of post-bubble price declines, alongside stable or rising rents, have pushed down price-to-rent ratios across the country, according to Trulia’s Winter 2012 Rent vs Buy Index. The index tracks whether it is more affordable to rent or to buy a home by looking at asking prices on Trulia.com for rentals and for-sale homes with similar attributes in similar neighborhoods.
Deciding whether to buy or rent depends on personal factors, of course – like whether you have saved up enough for a down payment, can qualify for a mortgage and whether you plan to stay in your next home for at least five years. But the ratio of home prices to annualized rent (after adjusting for property attributes and neighborhood characteristics) shows the relative affordability of home-ownership. After factoring in mortgage rates, taxes, insurance, maintenance and others costs, here’s the rule-of-thumb: buying is cheaper when the price-to-rent ratio is less than 15, and renting is cheaper when the ratio is above 20; between 15 and 20, renting or buying could win out depending on how long you’ll stay put and which tax bracket you’re in for the mortgage interest deduction. Only Honolulu and San Francisco are in the “it-depends” range of 15-20, while all other metros are in the “buying is cheaper” range of 15 or less.
Even though buying beats renting in almost all metros, the price-to-rent ratios for each ranges all the way from 17 in San Francisco to less than 4 in Detroit – that’s a huge difference in the relative cost of buying across local markets. Variations in the price-to-rent ratios among metro areas follows clear patterns and reveal a lot about local housing markets.
Take at look at the national price-to-rent map. In the darkest green areas, mostly in the Midwest and South, buying is more affordable relative to renting; in lighter green areas, mostly in the Northeast, California, Florida and the Southwest, buying is still more affordable, but not as strongly. And in yellow areas – San Francisco and Honolulu -- buying and renting are comparable. Remember that we’re looking at buying relative to renting: this means that in addition to being expensive, period, home prices in the Northeast and California are expensive even relative to local rents, which are high in those markets to begin with.
What factors contribute to higher price-to-rent ratios in some metros? Surprise! It’s not the effect of the housing bubble. Metros where prices fell more during the bust don’t have either lower or higher price-to-rent ratios, on average, than other metros that weathered the bust better. Cleveland and New York, for example, saw similar price declines during the bust, but the price-to-rent ratios are high in New York and very low in Cleveland. In fact, of the metros where prices fell most from the height of the bubble – Las Vegas, Phoenix and many Florida metros - none make our top 10 list of metros with the lowest ratios.
Long-term fundamentals, not short-term changes in prices, determine which metros have high price-to-rent ratios. Although there’s no correlation between the price-to-rent ratio and price declines during the bust, the correlation between the price-to-rent ratio and price changes over the past 10 or 20 years are very high (.6 and .55, respectively). Similarly, the price-to-rent ratio is correlated with employment growth over the past five or 10 years, but not over the past year. Two other long-term factors that change slowly are also related to a higher price-to-rent ratio: high housing density and low vacancy rates.
What do these factors that explain the price-to-rent ratio all have in common? They all shape expectations about how local home prices will change in the future. Metros with long-term price growth (not just bubble-time growth) and long-term job growth will probably see continued housing demand growth. On the supply side, metros with low vacancy rates have less slack in the market, and those with high density have less room to build new housing – both of which mean tighter housing supply. Growing demand plus tight supply equals rising prices in the future. Future rising prices should affect the price-to-rent ratio because rising prices benefit homeowners but not renters. In markets where people expect prices to rise, home prices should be higher than other markets. All else being equal, people will pay more to buy (but not to rent) a home if they expect prices to rise in the future, which means the price-to-rent ratio should be higher.
The price-to-rent ratio therefore reflects people’s expectations about future price increases. But here’s what’s scary. There’s a positive correlation (.35) between the price-to-rent ratio and home-price volatility over the past 25 years. Even after controlling in a regression for those other factors that affect the price-to-rent ratio (long-term price growth, long-term job growth, vacancy rate and density), past price volatility has a positive, significant effect on the price-to-rent ratio. That’s a surprise: people should pay less for a risky investment for a given expected return. (Simple example: economists expect most people would prefer to get $10 guaranteed rather than having a 50/50 chance to get $20 or nothing.) Not when it comes to housing, apparently. People are willing to pay more to buy relative to renting in markets that have more risk (higher past volatility in home prices), even after adjusting for the expected return (the long-term average rate of home-price growth). If people are still willing to pay more for homes in risky housing markets, is the next bubble inevitable?
READ THE ENTIRE ARTICLE HERE: http://www.theatlanticcities.com/housing/2012/03/where-buy-and-where-rent-now/1545/
Although home price gains rival those of the last decade’s bubble, home prices today look undervalued by 7%. Prices are overvalued only in a few California and Texas metros.
Home prices today are rising nearly as fast as they did during the peak bubble years of 2005-2006. Since that bubble helped push us into the Great Recession, we should all be on high alert for the next housing bubble. To track whether home prices are in or nearing bubble territory, today we introduce Trulia’s Bubble Watch, which is based on the most recent price data from the Trulia Price Monitor and other data sources.
So are we in bubble territory? No. Bubble-phobes can rest easy. Even with recent sharp home price increases, prices are still low relative to fundamentals and are far below bubble levels.
Back to Basics: How to Spot a Bubble
To answer that question, we assess whether home prices are overvalued or undervalued relative to their fundamental value by comparing prices today with historical prices, incomes, and rents. Incomes determine how much people can pay for housing, and price increases aren’t sustainable if they push prices too high relative to incomes. Rents reflect how much people value housing even if they won’t benefit from price appreciation (as renters don’t, but owners do); the price-to-rent ratio is like the price-earnings (P/E) ratio for stocks. Using data from multiple sources (see footnote), we create several measures of fundamental value and combine them in order to calculate how overvalued or undervalued home prices are relative to fundamentals.
Home Prices are Undervalued 7% Nationally and Regionally in 91 of the 100 Largest Metros
At the metro level, prices are below their fundamental value in 91 of the 100 largest metros. Prices are overvalued in the California metros of Orange County (+9%), Los Angeles (+5%), San Jose (+3%), and San Francisco (+2%), and the Texas metros of Austin (7%), San Antonio (5%), and Houston (2%), as well as in Portland (plus Honolulu, which at 0.01% is ever so slightly overvalued). The California metros are far less overvalued than at the height of the bubble – Orange County prices were 71% overvalued in 2006 Q1! Even the Texas metros, which largely avoided last decade’s housing bubble, are less overvalued today than at their peaks during the last bubble.
Prices are most undervalued today in Las Vegas and Detroit, even after their price gains in the past year. Several Florida and Ohio metros are also among the most undervalued. All of these metros were overvalued at the height of the bubble, some less so (Dayton, Akron) than others (Las Vegas, Palm Bay-Melbourne-Titusville).
Other indicators aside from home prices, like mortgage lending and construction activity, confirm that the housing market isn’t forming a new bubble. Mortgage credit remains very tight, especially for people with lower credit scores, and the new “qualified mortgage” rules under Dodd-Frank intend to prevent the recurrence of toxic mortgages that artificially inflated housing demand in the last bubble. Also, construction activity, though rebounding, is still well below normal levels, and the vacancy rate is falling, so there’s no evidence of overbuilding today like we had during the last decade.
Is the Next Bubble Coming Soon?
1. Inventory should expand. Tight inventory is boosting prices today as buyers bid up prices on scarce homes; however, as prices continue to rise, more people will sell as they get back above water or decide to cash out, and more new construction will add to inventory.
2. Mortgage rates should rise. Low mortgage rates today increase buying power because borrowers can afford a more expensive house for the same monthly payment. Rates are likely to rise as a result of the strengthening economy, either through market forces or Fed actions, which – along with more inventory – should slow down price gains.
3. Investor interest should fade. Undervalued prices have attracted investors, who have helped push up home prices as they have bought and rented out homes. But as prices rise, investor interest will fade.
Will expanding inventory, rising mortgage rates, and declining investor activity cause home prices to plunge? Slow down, yes, but probably not plunge. Just as these factors should cause home prices to slow down, job growth and increased household formation should support a continued recovery in housing demand.
Is Another Bubble Coming Ever?
Notes: To get our estimate of over- or undervalued prices, we averaged together several measures of prices relative to fundamentals, including the price-to-income ratio, the price-to-rent ratio (national only), and the deviation of price growth from trend. We compared current values of these measures to the long-term average, excluding the most extreme quarters from the long-term average. We used the Trulia Price Monitor for current price trends as well as the Case-Shiller national index, the Federal Housing Finance Agency (FHFA) national expanded-data index, the FHFA all-transactions price indexes for metros, national and metro per-capita income from the U.S. Bureau of Economic Analysis, and national owner-equivalent rents from the U.S. Bureau of Labor Statistics. Our historical time series goes as far back as the early 1980s, depending on the data source. We tested our approach by seeing how well our over-/under-valuation measure would have predicted metro-level price drops in the housing crash. The correlation between metro-level price over- or-undervaluation in 2006 Q1 and the subsequent metro-level peak-to-trough price decline was -0.83.
READ THE ENTIRE ARTICLE HERE: http://trends.truliablog.com/2013/05/trulia-bubble-watch/
You want to be a for real, no joke investor. Like Kiyosaki, or Trump, or Gates, or who knows who. You don’t want to just be set for retirement. You want to make the most money in passive income you can so you are financially free and can do whatever you want.
What do you need in order to make that happen?
Requirements of Any Big-Time Investor
1. Don’t Be Location-Specific. I’m sorry, but no one can tell me that the big boys all only buy investment properties locally and landlord their own properties. They just don’t do it. Where do they buy? Wherever the best deals are! Where the best deals are is always changing, and will always be changing. Some markets may be pretty consistent in always having good deals, and some markets may be pretty consistent in always having bad deals, but there is no market that will always have the best deals. Plus, an amazing deal may pop up totally under the radar in some random area at any given time for little rhyme or reason. Maybe even in an area that typically always has bad deals. The big-time investor jumps on whatever the best deals are, no matter where those might be. No big-time investor only buys locally. They also don’t work on their own properties.
2. Outsource All Work. Did I mention big-time investors don’t work on their own properties? No way. They only oversee the teams who do all the work. Big-time investors live off passive income. There is nothing passive about lifting a hammer during a rehab or taking repair calls from tenants. Those things are work. Work = not passive = not what big-time investors do. As Robert Kiyosaki says, “I don’t work for my money.” Meaning, he is not hands-on. His job as the big-time investor is to ensure proper teams are in place who will handle all the work associated with a property and then he just has to ‘manage the manager’ after that. And at his level, I’d imagine his job is to ‘manage the manager who manages the managers’. Then his other major task is to figure out how to creatively finance the deals so that it puts the highest returns possible back in his and his investors’ pockets.
3. Leverage as Much as Possible. Another famous debate. Do you pay all cash for a property or do you leverage? Well, what do the big boys do? I’ll give you a hint- they don’t pay all cash for anything! They leverage as much as possible. They know that using other people’s money is the smartest way to maximize returns on any investment deal. They are also smart enough to know that investing all cash into something is insanely risky because they could potentially lose all of that money. So they look for money from other sources than their own pocketbooks.
4. Know How to Find Money. I had an investor one time tell me that his full-time job, as a flipper, was finding money. It wasn’t flipping the houses, it was finding money. Every single deal required him to find more money. Why? Because he was slick enough not to use his own money for both risk and return reasons. At the point you consider time, effort, risk, and returns it is very obvious that you should always be using someone else’s money. Once you master how to find other people’s money, you can master real estate investing (assuming you know what to do with the money once you find it). If you can’t master finding other people’s money, or you insist on not leveraging for fear of, well not sure what the fear with leveraging even is, you will never become a big-time investor.
What kind of investor are you? One who insists on only buying locally so you can do all the work yourself and manage the headaches, all while risking every penny of your own money? Or one who knows the real definition of passive income?
READ THE ENTIRE ARTICLE HERE: http://www.biggerpockets.com/renewsblog/2013/06/01/big-time-investor/
When I first became a licensed Realtor many years ago, I began to work towards what I thought was the next big step – getting my Real Estate broker’s license. As many of you may know, doing so entailed that I take many Real Estate investing and appraisal courses. It was at one of these courses where I first heard the phrase ”the highest and best use of property,” and I didn’t fully quite understand the topic, that was until I found myself a few years later in a situation where I was looking to increase the value of one my rental properties. So instead of just sitting idle, I decided to get creative and revamp the house to generate more income then ever before. This creativity has even carried onto not only my residential ventures, but also with some of my commercial deals as well.
Residential Real Estate
When looking to get creative with any residential property, there are always multiple factors you have to look at, like: is there any extra space indoors? Could one bedroom be split into two without an incredible amount of rewiring or rerouting plumbing? Could one room be switched for another to create more space? Could you do both? I know I did at one of my rental properties, where I had a 3-bedroom house with a dining room, kitchen and 2 bathrooms. As far as kitchens go, the room it was in was small, so I decided to turn the dining room into a larger kitchen and make the original kitchen into an additional bedroom. The costs for doing so were minimal since the house needed a kitchen anyway and I was able to get an additional $200/month for rent for the additional bedroom! Now you don’t always have to shift around rooms either, I’ve cut bedrooms in half and turned attics into lofts in more properties than I can count.
There is also another great way to add revenue to your residential rental, and that’s if you have enough extra outdoor space. In fact, my best rental properties aren’t even houses at all, they don’t have most utilities, and the tenants don’t live there. They’re actually garages! I built four commercial size garages behind the first duplex I ever bought. I had some extra ground that wasn’t really being used for much, so I decided to place some pre-fab garages. Not only did I almost double the value of the property and cash flow like crazy, I had fewer tenant headaches.
Commercial Real Estate
I once bought a three story, six unit, commercial apartment building with three efficiencies and three two-bedroom units. It was a total nightmare. The efficiencies had high turnover, the building only had one heater, and the tenants were constantly fighting. The turnover and maintenance were killing me. The Township wanted a trash dumpster put in (because it was considered a commercial building) and they were charging exorbitant inspection fees per unit. And let’s not forget the commercial mortgage with a five-year balloon on the property, along with the required commercial insurance, was getting ridiculously expensive as well. So, I weighed my options and got the bright idea to combine the units and separate the utilities. I changed it into three-unit apartment, each with four-bedroom two baths, with their own laundries. Then I refinanced to a regular residential loan on a triplex. I didn’t need the dumpster or commercial insurance anymore and I only had to deal with three tenants instead of six. My turnover decreased since I had stable families move in (instead of the transient people that tended to cause more problems with neighbors) and maintenance went down drastically (with only 3 kitchens instead of 6).
But you don’t always have to rearrange properties to maximize profits; many people I know get creative from the get-go. A good friend of mine 1031 exchanged his residential units for a large commercial building just outside of Philadelphia. Instead of renting out the whole building to one tenant, he turned it into a shared commercial space and made a little business out of it. He would charge $450/month per office room so smaller scale businesses could now have office space right outside of Philadelphia for much cheaper than if they had to rent a larger unit. Tenants could choose to operate onsite with multiple rooms or be offsite, with either option they share a lobby, conference rooms, and they even share my friend’s two employees: a receptionist and a clerk who sorts mail, faxes, etc. These employees will handle calls and mail just like your own receptionist would at a large-scale company. He even leases televisions in the lobbies where other companies in the building could advertise – which is especially beneficial because most of the companies in the building were related to a similar industry. And since it’s right outside of Philadelphia’s city limits, it eliminates the city wage tax for both my friend and his tenants!
So no matter what the deal, there is usually an interesting way to make income if not more income by doing something besides traditionally renting it out. It’s like when people ask me if I’m afraid of competition in my note business, and the answer is and will probably always will be “no, because I’ll just be more creative.” I’m a firm believer in studying the great developers who have gone before us to gain great ideas and inspiration. A hero of mine, William Zeckendorf, wasn’t afraid to take risks and get creative. Zeckendorf, who was known for working with architects I. M. Pei and Le Corbusier, developed the land in which the United Nations building now sits in New York City, as well as Century City in Los Angeles. The United Nations building area was a slum before Zeckendorf, and he took huge risks developing the property (even going bankrupt in the process!) but that didn’t stop him. He went against the grain, and if you want to get the highest and best use of your property you may have to do that too.
So be bold, get creative!
And if you have already, tell me, what’s the highest and best use of your Real Estate?
READ THE ENTIRE ARTICLE HERE: http://www.biggerpockets.com/renewsblog/2013/06/05/highest-and-best-use-property/
If you send me info regarding the type of home you are looking for I would be happy to assist you with find a home to purchase. The easiest way to get this info to me is to fill out our "Buyer's Form on our website here:
If you have specific address you are interested in you can read below to check recent crimes and school ratings in that area.
Please see the following links to check crimes that have occurred recently around addresses that you plug in.
The Las Vegas Metropolitan Police website covering Clark County and the City of Las Vegas, has a page where you can search crime statistics. We've included the link below.
For areas covered by N. Las Vegas police:
For the City of Henderson:
This is the link to the Clark County School District. Again, you can enter in the address you are interested in and it will pull up the schools zoned for that specific house. There are reports and ratings on each school, this will give you a better idea of how well that each school is performing. Once you enter the address, you can click on the school name, then click on the school website and on their front page look for the "Accountability Report". This will give you very detailed information on each school and how they are performing.
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