Choosing a Lender

Choosing the right Lender can save you time, money, and could prevent (Big, Big) problems during your purchase.  Interview several Lenders. Take the time to ask questions and do your research.   Contact your current Bank first.  Let him/her know that you will be shopping around.  They are more apt to provide you with the best rate and lowest closing costs if they know they have competition.  Compare the different loan programs considering interest rates, closing costs, and down payment requirements.  Choose a fixed loan with no pre-payment penalties.  Even if you have a friend in the business or a friend that knows a friend, do not feel obligated.  Shop around and choose the right Lender and loan package for you and your family.  It will literally save you thousands!

And check out those reviews!!!

Here are some of our recommended lenders!

Tried and True…Just for You!

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Ways to Invest Real in Estate

Ways to Invest in Real Estate

Real Estate can be a wonderful Investment.  I know many people that have made a career out of it. Here are a few ways many people have profited from Real Estate Ownership.

Rental Properties – Your Real Estate Agent or an Appraiser should be able to help you set your lease amount.  If you price it too high your tenants will be moving out frequently.  A fair rent could land you a long time tenant.

Nothing is better than a good Tenant. Be diligent and  check past rental  references, the Sex Offender Site and conduct a criminal back ground check before you sign the lease.

Spend time finding a lease that protects you and know the State Laws and your obligation as a Landlord.  Believe me, the Tenant will know theirs.

Resale – Buying a property at the right price, some properties require repairs or/and remodeling, then reselling the property for a profit. Of Course, these Investments can also turn into a not so good Investment.  It is  important that you take your time when purchasing a property.  Hire a Professional Home Inspection before you purchase a Property.  Buying AS IS is nice for the Seller but can be a nightmare for the Buyer.  Do the math and make sure you allow for hidden defects. If the numbers don’t add up its best to move to the next venture.

Contract Sale – Some Sellers like to be the bank for the Buyer. This is great for the Buyer if they are unable to obtain a loan right away.  Profitable for the Seller because of the Rate of Return on their money is favorable.  Qualify your Buyer like a Bank Underwriter would before they close the loan.  Be thorough.  Pull their credit report, check credit  references, check the Sex Offender Site and conduct a criminal back ground check.  You might still wish to proceed but know your Buyer before you become the Bank.   Allow the Buyer time to conduct a Home Inspection.  Know that they can afford the house. An Attorney is a must and should prepare all the legal documents accordingly.

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Before you Buy an Investment Property…

Before you Buy an Investment Property…!

Investing in Real Estate is a great way to create income.  Of course, you can make plenty of money but you can also loose money if you are not very careful.   When considering a purchase, consider all the costs associated with that purchase and owning that property.   And always add a buffer.  Guess low on profit and high on costs.

  1. Cost of the property
  2. Cost of financing
  3. Reoccurring expenses  (Mortgage, Utilities, Insurance, Association Fees, Assessments and Property Taxes)
  4. Repairs, Maintenance and Remodeling expense (Interior and Exterior).
  5. Advertising for Tenants
  6. Accounting (Capital Gains, Bookkeeping)
  7. Expenses to resale if that is what you plan to do.

Financial Planning is the key to a successful Investment.

Opinion of Value. Have an  experienced Agent or Appraiser provide you with an Opinion of Value or Appraisal.  Be pro-active!  Review any information that they provide you and do get  a second or third opinion.   Don’t worry about hurting anyones feelings.  This is your investment only if you do this right.

Complete a Home Inspection.  Know what you are Buying Inside and Out.  A thorough home inspection should be completed.  Obtain a total cost to make any and all repairs and improvements.

Accounting.  Create a spreadsheet with all of your estimated costs.  Create a duplicate to include your actual costs so your can compare.  The first investment is usually not a profitable one for most.  Most chalk it up as a good learning experience.

It pays to have an Experienced Real Estate Agent as a part of your team.  He/She can help you find the right properties to purchase and can provide you with a wealth of information being a very valuable part of your transactions.  I have helped many people become Investors and I would love to assist you also.

Be a smart investor and follow the rules.  Do not Buy based on emotion.  If the numbers do not work.  Don’t walk away….RUN!

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Become a Real Estate Investor

Investing in real estate can be very rewarding. Every piece of real estate including your home is a part of your portfolio.

If you think you would like to become an investor you need to start interviewing.  Yes, that is right!  You need to have a team of professionals that can help you make decisions.  The right decisions.   A good Team Member will be a great asset and will save you a lot of time and money.  The wrong Team Member will not be on your Team but will still have cost you.   I think you got the picture.   Be careful in the selection of your team.  Choose Members based on Knowledge, Experience and Proven Results (Honest Reviews).  Referrals are Nice.

Who do you need on your team you ask?

Let’s start with choosing a Lender.  Unless you have cash to purchase and remodel you will need to borrow.  Even if you have cash, sometimes it is cheaper to spend someone else money.  Do the math before you make your decision.    A good Lender  will explain financial options and should have recommendations to assist you.  Ask lots of questions.  Remember when you are budgeting a project to include financing costs.   Interview several Lenders before you choose.

You will need a Real Estate Agent also.  If you find a good Agent… this could be your Golden Nugget.  An eager Agent will work aggressively to find you properties to purchase.  They can also assist you in valuing real estate providing you with a current value and a remodeled value to assist you in your decision on whether a property is a wise purchase or not.   Your Agent should be able to offer valuable recommendations, be verse in real estate offer and document preparation and  have excellent negotiation and closing skills.  A good Agent can save you thousands and open doors of investment opportunities.

A Title Company / Attorney will complete the title work and assist with the closing of your transactions.  If you stick with one company then they typically provide you with a discount.  Building relationships is very important.  Call around and talk with several asking them about title and closing costs.  You will need all of these fees when you Budget your project anyway.  If you are using a Lender then they will have a list of Title Companies they use and the fees are a part of your closing costs.  Again, building relationships can save money.

Remodeling can take a lot of different professionals to make it all come together.  So start making a list of Electricians, plumbers, roofers…and more.  Your list will start to grow and always be on the look out for another team member.

I hope this gets you started in the right direction.  I am always available to answer questions so don’t hesitate to reach out to me or one of my team members.  We would love to be your Agent.

Remember,  Buy Low…Sell High.

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The Home Inspection Process

Home Inspections

A home inspection is a professional, third-party inspection of a property that you intend to buy. Its goal is to evaluate the home from a structural and safety standpoint, as well as to ensure you’re buying a hazard-free, up-to-code property that’s a good investment of your dollars.

Home inspections aren’t required, but there are few cases where you’d want to forgo one. Use this home inspection checklist to learn more about the process — as well as what to do afterward.

Step 1: Include A Home Inspection Contingency In Your Contract

Your first step is to make sure there’s a home inspection contingency — also referred to as a “due diligence” contingency — in your sales contract. This gives you a specified time period in which to have a professional inspection performed on the property.

Step 2: Understand How Your Home Inspection Contingency Works

In most cases, the inspection period is anywhere from one to two weeks from the date your sales contract is signed, though it depends on your specific agreement. The contingency period is supposed to give you enough time to:

• Find a good inspector.

• Set up your appointment (and, ideally, attend it).

• Receive your inspection report.

• Get any follow-up or additional inspections (more on that later).

• Decide how you’d like to move forward.

Step 3: Hire A Good Home Inspector

Hiring a thorough, experienced home inspector is incredibly important. They should be current on all certifications (NACHI, ASHI, etc.) and up to date on all training and educational coursework. They also need a full insurance policy (this protects you if they’re injured on your property) and should have deep experience in the area you’re buying in. This ensures they’re aware of any current problems with soil, pest and even home builders in your region.

Step 4: Make Sure Your Inspector Follows This Home Inspection Checklist

Every inspector does things a little differently, but there is a basic, standardized home inspection checklist they’re supposed to follow. Certain inspectors may go above and beyond this, or they may report their findings in a different way.

Step 5: Read Your Home Inspection Report

Once the home inspector is done on your property, they’ll put together a full report of their findings. The report should have a section for each room or area of the house, as well as a note about anything that needs repairs, is damaged or isn’t functional.

Generally, you’ll see the following terms for any issues they spot:

• Material defect: An issue that might pose a potential safety hazard or have a significant impact on the home’s value.

• Major defect: A system or component that is not working, not functional and needs replacement or repair.

• Minor defect: A small issue that can usually be fixed by a contractor or the homeowner themselves.

• Cosmetic defect: A superficial flaw or blemish that doesn’t impact safety or functionality.

Step 6: Get Additional Inspections

You should also use your report to gauge what other inspections might be necessary. If the inspector sees potential termite damage, you’ll want to get a termite inspection. If he notes mold on the report, you’ll want to have a mold inspector evaluate the property.

Just a few of the additional inspections you may want to consider include:

• Asbestos inspections.

• Pest inspections.

• Radon inspections.

• Termite or wood-destroying insect (WDI) inspections.

• Mold/mildew inspections.

• Lead inspections.

• Sewer or drainage inspections.

• Structural inspections.

• Chimney inspections.

• Geological inspections.

Step 7: Decide What’s Important — And What’s Not

Once you have the results of all your inspections, it’s time to decide what to do with those findings.

You’ll want to consider:

• Which issues pose a hazard to you and your loved ones?

• Which ones would cost a lot to repair?

• Which ones would prevent you from moving in on time?

• Which repairs can you handle on your own?

Step 8: Make Your Decision

After you’ve reviewed your inspection reports and determined which issues are big and which aren’t so important, you’ll need to make a decision. Do you go through with the deal, renegotiate it or go back to the drawing board?

As long as you’re within your contingency period, you’ll have these options:

• Continue as planned, with the same sales price and terms as you initially agreed to.

• Renegotiate the price with the seller or ask for credits toward your closing costs to cover the damages/repairs.

• Ask the seller the make certain repairs.

• Cancel your purchase contract outright and back out of the deal.

Step 9: Confirm Any And All Repairs Have Been Completed

If you choose to have the seller make repairs to the home, you’ll need to make sure these are completed to your liking. Have your agent schedule a walk-through of the home once the repairs are made, so you can check in on the work and keep your closing on track.

In the event you had the seller make major repairs to the foundation, roof or other important features in the house, you might want to have your inspector come back out for what’s called a “reinspection.” These allow the original inspector to come back out and verify that issues have been properly resolved. They do come with a cost (though usually a small fraction of the original inspection price), but considering that they can prevent safety issues and future repairs down the road, they’re usually worth the nominal investment.

Step 10: Close On Your Home

Finally, after you’ve renegotiated and confirmed that the appropriate repairs were made (and made properly), you can move toward closing. As long as things go well with your lender, you should be able to sign your paperwork and get those keys, come closing day.

Written by Kevin Miller
FORBES REAL ESTATE

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Preparing to get pre-qualified to purchase.

Preparing to get Pre-qualified!

It is likely that your real estate purchase will amount to one of the largest single purchases you will ever make.   So it is important that you remember that  Real Estate even if your purchase is your your home, it is also your INVESTMENT!  How exciting is that!  So you are an Investor!  This may be the first item in your portfolio.

Analyzing your Finances is the first step in making any purchase.  Remember the saying, “Don’t try to keep up with the Jones’”.   They look like they have it all.  They may be up to their eyeballs in debt too.  Financial peace is a better goal.   If you want that too,  then gain and keep control of your finances.  Know how much you can comfortably afford.    There are numerous computer programs, applications, spreadsheets, and even financial booklets that can help you keep track of your Income and Spending habits.  Find what works best for you.  You will need all your financial records that pertain to your current income and expenses to proceed.  

Have you created a Budget?

If you have an accounting program already in use that includes all of your financial income and expenses, and it is up to date, then you are ahead of the game.  If not, then you will need to gather your income, banking account, credit card accounts, and any other financial information.  This will take time and some effort but it will be worth it.   Create a list of all income and expenses for the previous (full) year.  Take your time analyzing your expenses.   Where is your money going?  Calculate totals for the different categories. Then create an active budget listing all your household income and expenses based on the past 12 months.  If you use an accounting program then make sure it is current and up to date and print out copies to review.  Where is your money going?

We have provided a sample budget link below.  Don’t worry, this link keeps you on this website.  It is just another page.  Budget Sample 

Here are some Questions to Consider…

Income – How much do you have coming in? Tip: I do not recommend calculating Overtime into your income when determining how much of a house payment you can afford.

Expenses – Where does your money go?  Tip: Use this time to decide where you may be spending frivolously.  Don’t pick on your spouse.

Net –  How much is left at the end of the month?  Tip:  Don’t pick on your spouse.

How much do you have in your savings?

Is there a loan you are about to pay off within 6 months or a year? Tip: Lenders typically do not include payment amounts with fewer than 6 months left in your debt ratio.

How much credit card debt do you have?  Tip: Do not pick on your spouse.

What is your Debt-to-Income Ratio?    This is calculated by your lender.  It is  Expenses divided by Gross Income (before taxes).   Note: Expenses like groceries, clothes, utilities, gas, and your income taxes are generally not included in calculating your Expenses for this equation.  The lower your ratio, the less “risky” you are to the Lenders.  So where does your ratio need to be?  Read below…

FHA Manual Guidelines require no more than a 43% ratio.  The housing (expenses) ratio cannot exceed 31%. Those expenses include principle on the loan, interest, property taxes, insurance, and any association dues.

Once you feel comfortable and know what you can truly afford to move forward, then you can start interviewing lenders.

Please take the time to interview several Lenders and review my Things to consider when choosing a Lender.

Find our recommended Lenders below.

Please check out our recommended Lenders.  

Tried and True.   Just for you.

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