4 Common Pitfalls To Purchasing A Foreclosure Property

Due to the mortgage crisis that our country faced over the last several years, there are continually more and more foreclosure properties that are being put up for sale everywhere you turn. Of course, this can be very tempting for homebuyers as people can sometimes get properties for 30% or even less on the dollar.
However, if you are considering a foreclosure property for your next purchase, then there are some common pitfalls that you will need to avoid along the way to protect yourself and your future asset. Let’s review some areas to be aware of before making any serious offers.
1. Avoid Making Emotional Offers: When you are planning on putting a bid down on a property, you need to be extremely confident with the home’s current condition, its true market value, and what will be needed to fully restore the property.
Too many buyers will think that they found a slamming deal and fear that they will lose the home to another bidder. So instead of taking the time to truly do their homework and complete the proper inspections and analysis, they can end up locking up a property for more than it’s actually worth.
2. Estimate Neighborhood Values: Consider what other comparable properties are selling for and talk to a real estate agent who has a working knowledge of the area. In fact, it’s a wise decision to thoroughly review these questions and any other recommendations your Realtor may make:

  • Is this neighborhood a desirable location and how are crime rates?
  • What schools would be available for my kids or future buyers?
  • Were there any other foreclosures or investor sales that could negatively affect the future value of my home?
  • How long do I plan on living there and how could that affect things?
  • What type of appreciation should I expect?

3. Get Preapproved: Before you even start looking at homes, you must get preapproved on a mortgage in order to know exactly what you can afford. Sadly, many buyers can miss out on some phenomenal deals or spend hours of wasted time because they avoid this step. Show banks that you are a serious buyer and have your financing in place!

4. Get Professional Help: Not only should you seek the expertise and of an experienced Realtor, but you may also need guidance from a real estate attorney or financial consultant as well. Each professional can ensure that you are making the right choices throughout the process and can protect you from any issues you may come across along the way.

Remember that there is a lot more than meets the eye when you are trying to buy a foreclosure property. Negotiating with the banks, filling out paperwork properly, and undergoing all the necessary inspections can be a very detailed and tedious procedure.
Therefore, we encourage you to give us a call today to get started. Our agents have years of experience assisting other clients with buying foreclosures for their next home or investment property. Discover how we can help you to make a smart and profitable investment as well!

3 Sources of Financing for Real Estate Investors

One of the most important aspects to investing in real estate is how you finance your property. Although all other factors may look favorable, having no or little access to good terms could be a deal breaker. Therefore, before doing anything else, it is important that you begin to line up some potential sources and explore what options are available to you.
There are various ways to start investing in homes, and each source has its own set of strengths and weaknesses. Your exit strategy, the condition of the property and various other factors will play a part in how you may be able to finance each specific investment. So let’s explore 3 of these top sources:

Traditional Financing

If one of your strategies is to buy, hold and rent, then using banks may be a safe bet for some of your investment properties. This is a source that can be considered up front when a property is in considerably good condition. Most banks will not support the financing of a fixer upper until repairs are completed, due to the amount of risk involved.
Therefore, you may need to spend a little extra time searching for those diamonds in the rough. Traditional financing is extremely favorable, because you can usually get some of the best interest rates, terms and closing costs when approved. The process certainly will take longer than using cash buyers or hard money lending for example, but it can be worth the wait.

Hard Money Lenders

For those who will either be flipping a property or would need to conduct significant repairs in order to refinance may want to consider building a relationship with a hard money lender. It is advisable to shop around to at least 2 or 3 in your area when possible to see which terms you find to be most favorable.
These loans will come with much higher interest rates (typically 12% or more), points and some type of balloon payment near the end of the agreement. Hard money may be offered for 6 months to a year while the repairs are made, until the home is ready to be sold or refinanced for better rates.
It is important that investors are prepared to either rent out or lease-to-own their property if perhaps the home is unable to sell on the market quickly enough. Also, newbie investors beware! Flipping houses can be more difficult that it may seem, and you must have a solid plan in place so that you are not forced into a tight financial situation.

Private Lending

Before ever considering this option, it is strongly encouraged that you talk with a local attorney that specializes in SEC policies. Laws can vary on a state by state basis, so it is important that you have a good understand of those guidelines before building any relationships with private lenders.
However, when done correctly this can be a powerful resource available to you, that doesn’t require credit checks or adhering to all the strict guidelines enforced on mortgage companies. Private lenders can be nearly anyone who has access to the necessary funds for your purchase (i.e. your doctor, friends, family, or investor club).
Typically private lenders can receive anywhere from around 9% and up for their investment, which is secured by the property and can be a great investment for them based on today’s rates. Loans can be negotiated on a property by property basis so that each investor only funds the deals that they are comfortable with.
With these 3 examples alone, you may have all that is needed to start funding real estate deals. Therefore, take action now and begin building the relationships and networks of lenders that you will need in order to start investing.
Are you in need of referrals? Contact us today to access a list of preferred lenders that we will recommend for your investment business.

Get The Best Price On Your Next Home Purchase!

One of the most important aspects to buying a home is to ensure that you purchase for a fair price. Since there are certain key steps that you must follow in order to make a sound decision, it pays to have a knowledgeable Realtor on your side who will be able to help obtain the best and most realistic asking price for a property.

Determining Market Comparables

For example, one of the first ways that your agent will discover the price of a home is by researching local market comparables. In most cases, they will be able to bring up a list of properties sold over the last 6 months within a 1 mile radius. Properties should also not be bigger than 20% of the subject size.
Additional features to consider would be the neighborhood each home resides in, structural differences, bedrooms and bathrooms, overall condition and other amenities such as a pool, a/c, or garage. Other factors, such as if a particular home sold for much lower due to foreclosure is something your agent can uncover as well.

Houses That Have Not Sold

Next, many homes could be on the MLS for 6 months or longer without ever selling. Others that are comparable could have been taken off the market after not getting enough offers or being listed for too high. This is valuable information, because you may be able to get a particular property for a substantial discount or it may not even be worth pursuing.

Neighborhood Reputation & Appreciation

When it comes to buying a house, this is one of the most important reasons to work with a Realtor. Since your agent will have a familiarity with various local market trends and statistics, you will be able to learn what makes a particular neighborhood desirable and also which areas to avoid.
A lot of things can affect a home’s value such as the school district, crime levels, or even other properties located nearby (such as those burnt in a fire or properties that were a bank sale). In fact, sometimes these factors can even differ from block to block!
Your agent will also help you to assess the appreciation rates for various neighborhoods and future development plans that could affect home prices, so that you can get a decent indication of what to expect down the road. This can be extremely valuable information dependent on how long you plan to live at the said property and the length of time the home may need to sit on the market.

Appraisals & Inspections

After you place an offer on a property, you will have the opportunity to get an appraisal and home inspection as further due diligence. Even with an agent, there are sometimes issues that may arise with a property that could affect the home’s value that you were not even aware of.
Some of these problems could include structural issues, plumbing or electrical, termites or insects, mold or even water damage to name a few. Obviously many of these things could impact the price significantly and would either have to be fixed by the seller or renegotiated to get a fair price.
In conclusion, there are a lot of areas to consider when choosing a home and getting a fair price on a property. Since this is one of the biggest purchases you will ever make, it is crucial that you protect your interests and ensure that you are getting the best deal possible.
In order to get started researching homes in our local area, contact us right away using the information located above. We look forward to serving you as you search for your next future home!

Buying A Home? Take This Free Video Credit Course

Below is a series of videos that will teach you what you need to know about getting your credit in shape for a future home purchase.
Please feel free to share these videos with a friend who currently owns or is looking to buy a home.
Staying out of credit trouble can have a big impact on your financials for years to come!

Credit Course Video 1

Credit Course Video 2

Credit Course Video 3

Credit Course Video 4

Credit Course Video 5

Credit Course Video 6

Credit Course Video 7

When The Kids Have Moved Away It’s Time To Play

Empty Nest Rejoice

“We’re not getting any younger honey!” Have you heard this one before? You may be getting to that age now where the kids are either close to finishing college, finding full time jobs and picking up a sweet rental, or finally tying the knot. There may still be one 20 something year old lingering around for longer than expected, and you haven’t fully achieved “empty nest” syndrome yet, but the time is coming soon.
So what do you intend on doing with all this new found time, space and energy? Chances are you don’t plan on just staring at each other longer than you have in decades, so there must be another solution. It’s time to get back to living on the edge and taking a few calculated risks. Maybe what you need is a little adventure!
Is there something that you have been aiming to do forever, but with the kids, mortgage and other heaping responsibilities, these goals turned more into faded dreams than a reality? Perhaps we can help offer some insight and direction. Believe us, we have worked with many clients in the past who have faced the same choices that you may be dealing with now.
Whether that involves taking a 3 month long European vacation, visiting family across the country, buying that boat and spending your time out at sea, or investing your time serving orphans in Africa, one thing that may be crossing your mind is what you plan to do with your oversized house for two.
For most reading this, we would presume that you either have a majority of your mortgage paid off or at least some retirement savings stashed up that will provide you the flexibility to sell and downsize into a more modest living space. With that extra income, you will now be able to finally experience those long anticipated dreams.
Maybe this looks like taking a leap and moving into a high-rise condominium in the big city. Or perhaps you would rather pick up something a little more tranquil out in the country. Others may be interested in building up a small rental portfolio and not being tied down to any one location. And there are plenty of luxurious 50+ retirement communities that offer mindboggling amenities.
The options could seem overwhelming, so we’re here to serve you along the way. We understand the hesitation and concerns that can arise when making such a big decision, after living in a residence for 20+ years. These feelings are normal.
Whether you would like to schedule an appointment to discuss possible options with your current home or need assistance in planning for your future move, we encourage you to contact us using the information provided above. Consider us to be your trusted advisors as you begin mapping out your next steps. We look forward to helping you achieve your dreams!

Bill Engvall – Empty Nest (Funny)

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Bill Engvall – Empty Nest
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Bill Engvall Comedians Stand-Up

Multifamily Units for First Time Home Buyers

Multiunit Homes in Tampa

If you’re getting ready to purchase your first home, you may
want to consider the advantages of leveraging your money through the use of a
multifamily property.  This can be
especially appealing to young families just getting started out or busy
couples/singles on the go.  So let’s
review some of the top benefits of multifamily investing:

First, by purchasing a 3 or 4+ unit within a desirable area,
you will immediately start reaping the benefits of home ownership and
collecting strong investment income.  By
finding reliable tenants, you will be able to cover up to a half or more of
your mortgage payments.

And you will be consistently paying down principle and
building up great equity.  When the time
comes to upgrade to a different property, the consistent income from you
multi-unit home will help to cover a portion of your new mortgage, plus you
will already be on the path to building your investment portfolio.

Additionally, instead of driving across town to keep up with
maintenance and tenant issues, you will essentially be your own on property
manager.  This makes it infinitely easier
when trying to collect rent or conduct showings, and you don’t need to pay
another party to keep up with your home.

Next, in today’s market, cash flow is of the utmost
importance.  Nothing is worse for a new
investor then when the property goes vacant for months.  With a multifamily unit, you can alleviate
the fear of being stuck with the full amount of mortgage payments, because
typically your home should be at least 50% occupied.

Finally, you will be learning the ins and outs to one of the
most effective investment strategies available.
Purchasing your first multi unit will teach you all about how to buy,
repair homes, market your property to tenants, collect rent, and how to invest
your income into future properties.

Therefore, it is worth considering a multifamily home for
your first purchase.  Before choosing an area
to live in and searching for a property that fits your needs, it will be to
your advantage to consult an experienced Realtor within you local area that can
give you professional guidance.

Contact us today @ 813-863-5917 to start learning more about
the opportunities available to you and to discover where you can make a wise
investment for your financial future!

What To Be Aware Of When Shopping For A Mortgage

 Shopping for a mortgage is one of the most important steps involved in purchasing your next home. Since the terms and conditions that you agree to will impact your financial future for years to come, it is vital that you take the necessary time to research and compare the best packages available to you.
Many buyers tend to primarily focus on obtaining the best interest rates; and though this is an extremely important piece, there are a host of other factors to consider. Therefore, let’s discuss some of the other criteria that should be reviewed before signing on the dotted line.
First of all, please be wary of only searching for rates and quotes online. Although there are very reputable companies that can be found using an internet based search, it is wise to also spend time working with local companies and banks that are familiar with the current market. This is a very detailed process, so you should not base your decision on simply one or two sources.
As you have seen from the recent mortgage industry scare, it is typically best to invest in a fixed rate loan. With adjustable rate mortgages, you could be stuck paying higher amounts of interest and maybe even eventually owe more on the loan than the house is worth. Be sure to review this with your mortgage professional before making any final decisions.
Next, along with attractive interest rates may also come additional fees and terms. Be careful that you fully understand what you are signing up for before choosing your mortgage. Although the rates may look somewhat favorable, here is a list of some things to be aware of:

  • Processing Fees—Items such as processing and underwriting fees could be added to the cost of the loan as well. Although you typically will have to pay a few hundred dollars for the application fee, there are other extras that may be attached as an added expense.
  • Private Mortgage Insurance (PMI)—In order for lenders to protect their own interests, buyers will be required to pay for PMI on a loan until they have built up 20% equity in the home. These fees are calculated based on a person’s credit score.
  • Appraisals—It is becoming more common for lenders to charge this fee upfront before an appraisal is conducted. Unfortunately, you will end up paying for this regardless of whether or not it gives you the evaluation necessary to obtain the loan.
  • Points—Each point equals 1% of the actual loan amount. Many buyers can elect to choose a plan that charges points so that they can acquire a lower interest rate. Lenders will typically charge anywhere from 1-3 points (or even more), and these will be charged as a fee at closing. Whether or not you should choose a plan with points will be dependent on your available cash and how long you plan on staying in the home.

This is just a sampling of what may be included with your mortgage. It is best to find out up front exactly what you will be responsible for with all additional fees included. As long as you are working with a reputable company, you should get a good feel of what will be expected at closing.

Be sure to avoid working with any parties that seem to make unfulfilled promises, suddenly change the terms at closing, ask for more information than is necessary to process the loan, or overall make this an uncomfortable process for you.

There are more than enough resources available to you to obtain a loan that will suit your needs. Additionally, we would be happy to provide any additional referrals and feedback so that you can get set out on the right foot. Please contact us right away for more information on how to get started!

How Soon After a Foreclosure Can You Buy Another Home?

A very common question I get is “How soon after my foreclosure can I buy another home?” There are a couple of answers to this question and they depend on how soon and how badly you need a home.

The first option to getting a new home is to simply pick one and buy it with conventional financing. The lender who will be looking at your credit will be very reluctant to finance another home for you. However, with a large enough down payment (20% minimum) and your willingness to pay a higher interest rate, you could have a new home in 45 days. [Read more...]

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