bonnie: Bonnie Brae RE Trends: Sewer Scopes
- 12/27/08 01:54 PM
Topic: Investor Series: Why sewer scopes are important A LOT of agents don't advise their clients to get sewer scopes when they purchase a property. This is a major mistake. A broken sewer can cost between $3,000 - $10,000 dollars to repair and it only costs $99 ($99Rooter - others are more expensive) to have a tech put a camera down the sewer pipe and videotape the sewer all the way to the mainline. This will tell you and the-buyer what the condition of the sewer is. So let's see, we pay to have the furnace inspected but a new furnace will … (0 comments)
A lot of clients ask me how to figure out what market rents are in a neighborhood. This is a critical input into the calculations an investor needs to make in order to determine what their return on investment will be on a rental property. So you don't want to screw this up! Unfortunately, this is one of the many figures new investors get wrong.
One place people go to get rents is Rent-o-Meter. Rent-o-Meter is billed as an online resource to get accurate market rents. In my experience it is anything but! However, … (0 comments)
bonnie: Bonnie Brae RE Trends: Roofs
- 12/27/08 01:53 PM
Topic: Investor Series: Things to look for when you look at roofs Have you ever driven through Aurora North looking for a rental property and taken a close look at the roofs? Here's what you'll see: a bunch of 1950's ranches in varying states of repair or disrepair, lawns that are often grassless, old handcrank windows and roofs in almost perfect condition! This surprised me at first and perplexed me for a long time. Why, in a neighborhood devastated by foreclosures with properties with massive deferred maintenance are the roofs in such condition? Really! Stand in the middle of a typical street … (0 comments)
As investors we face a number of very real and very scary challenges. Making sense of this market is no mean feat and one has to be very careful with his or her investment. However, we usually think about danger as financial. Unfortunately, on rare occasion it can be even worse than that. The majority of the homes investors are buying these days are vacant and once in a while people break in and live in these properties illegally. The last thing you want to do is … (0 comments)
bonnie: Bonnie Brae RE Trends: Egress Windows
- 12/27/08 01:50 PM
Topic name: Investor Series: Understanding Egress Windows A lot of investors ask what an egress window is and when one is needed. Technically, it's a window for a room below grade that a municipality has deemed large enough to be safe for exit in case of emergency. While there are some variations, the window needs to be large enough that a firefighter with an oxygen bottle on their back could get in, then carry out an injured person in a fire. Most often, it's associated with a basement bedroom window, making it a legal bedroom. Basement bedrooms without egress windows are … (0 comments)
You walk into a property you're looking to buy and rent and you walk down into the basement and voila! you find a full second kitchen. Great! You start calculating how much rent you could get if you could rent the downstairs separate from the upstairs and the cashflow is out of this world! But wait, there are a number of very real problems with this scenario.
First of all, it's illegal unless the property is zoned for more than one tenant and the property has been converted to non-residential use. But there are … (0 comments)
bonnie: Bonnie Brae RE Trends: Q1 Home Price Recap
- 12/27/08 01:49 PM
Recap of First Quarter 2008 Home Price Performance The average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006, from $309,000 to $317,000. Comparing 2006 to 2007, the average home price across the metro dropped 2%, to $311,000. The first quarter of 2008 was $278,000 vs. the first quarter of 2007 was $296,000: a 6% decrease. Note that prices in the first quarter are usually a bit less than the rest of the year. This is because families that tend to purchase larger, more expensive homes tend to move in the summer months … (0 comments)
bonnie: Bonnie Brae RE Trends: Signs of Market Improvement
- 12/27/08 01:48 PM
Take a look at the first page, for AUN (Aurora North). Note these positive market trends this year:- number of active listings steadily declining- average list price pretty stable (finally!)- U/C up dramatically- Number of sales / month up (partially seasonality)- DOM dropping- Stability in average sold prices and sold price as % of list- Sold price as % original price UP a lot - banks are getting better at pricing- Number of expired listings down Every indicator is improving this year in AUN. You will see the same trends in DSW (southwest Denver County), but not as marked an improvement as … (0 comments)
bonnie: Bonnie Brae RE Trends: Mortgage Broker Licensing Laws...
- 12/27/08 01:47 PM
Colorado Mortgage Broker Licensing In response to the troubled national real estate market and Colorado's high volume of home foreclosures, efforts have increased to make higher caliber professionals involved in real estate. Licensing, rules and regulations have become more stringent for agents, appraisers, title companies and mortgage brokers. In regards to mortgage brokers, the below items are mandatory. No longer can someone open up the Yellow Pages, claim to be a mortgage broker and then be compensated for placing a loan --- what a novel concept. Before committing to a mortgage broker, please make sure that they are licensed in … (0 comments)
bonnie: Bonnie Brae RE Trends: Investor Loans
- 12/27/08 01:45 PM
Topic: Special considerations for Investor loans The talk around the water cooler these days is all about LOANS. Who can get them? At what price? What if I already have a few loans, do I still qualify? A year or two ago the question was at what price do I get a loan (those were the days!). Today it is "am I still in the game?"
Here's the deal: if you have an owner occupied loan and 3 investor loans you cannot buy any more properties and get Fannie Mae / Freddie Mac financing, meaning you can't get a conventional 30-year fixed … (0 comments)
As far as investment loans, little or no money down loans are impossible. However, lenders do permit the use of Home Equity Lines of Credit or second mortgages from other properties owned by the borrower as a source of down payment. Or, self-employed borrowers are using funds from business lines of credit to fund down payments or renovations (please note: there are asset seasoning guidelines for doing so and the debt incurred by accessing other credit lines must be accounted for against the borrower's debt-to-income ratio). Thus, we have clients leveraging themselves … (0 comments)
Securing conventional financing on a fix & flip or short-term loan is not recommended. Most conventional lenders sell off their mortgages to investors on the secondary market. If the loan is paid off early (before six payments are made), the investor has not recovered their initial investment. The investor will attempt to recover their loss from the lender, who will ultimately come after the loan originator. The loan originator would then be obligated to pay back any premium paid out by the lender. If such activity becomes habitual with the … (0 comments)
For the Greater Metro Denver area, any loan amount greater than $417,000 is considered a jumbo loan. Fannie Mae and Freddie Mac assign different thresholds for various regions across the country. For instance, $417,000 is not considered a jumbo loan in a high cost city like San Francisco, yet there will still be higher rates for going above $417K.
Due to the size of jumbo loans, they are considered greater risk for lenders, resulting in higher rates. Rates have fluctuated greatly over the past few years on jumbos. As of today, a 30 year … (0 comments)
With all the doom and gloom publications that are mostly exaggerated, many potential borrowers believe that home mortgage lending options have dried up. While underwriters and investors are scrutinizing files more closely, attractive rates and terms still exist for owner occupied purchasers seeking a conforming loan limit (under $417,000). FHA and VA can still lend up to 100% LTV and conventional permits up to 97% LTV. There are certain guidelines to meet when going to these high LTVs, but they are not impossible to surmount.
In an effort to boost the sagging real estate market and overall economy, first-time home buyers are being offered a limited time tax credit when purchasing a primary residence. The highlights of the tax credit are: · The tax credit is available for first-time home buyers only. · The maximum credit amount is $7,500. · The credit is available for homes purchased on or after April 9, 2008 and beforeJuly 1, 2009. · Single taxpayers with incomes up to $75,000 and married couples with incomes up to $150,000 qualify for the full tax credit. · … (0 comments)
Lending guidelines are changing on a daily basis for every type of loan: conventional, FHA, VA & commercial. Nevertheless, there are still very attractive first-time home buyer options available. If you are or will be a first-time buyer, it is critical to speak with a loan officer before looking at homes. It is a crushing feeling to view a home, picture making it your own and then find out that you cannot qualify to purchase it. A loan officer will pull credit, analyze debt-to-income ratios, review assets and income and determine what you … (0 comments)
bonnie: Bonnie Brae Real Estate Trends: Improve Your credit
- 12/07/08 09:42 AM
How can you improve your FICO score? To improve one's credit score, it's critical to understand the factors influencing a credit score. The factors that contribute to a FICO score and the weighted percentages for each are as follows: 35% - timeliness of payments 30% - the ratio of used debt to allowable debt for consumer credit 15% - length of credit history (the more credit history and showing proof of consistent timely payment, the better the score) 10% - types of credit used 10% - recent credit inquiries and recent new credit The greatest driver behind a score is making … (0 comments)
Low credit scores are deemed greater risk for lenders since the likelihood for defaulting on the loan increases. As such, lower FICO scores translate into higher interest rates. Mortgage lenders will group credit scores in a range, usually in 20 or 40 point increments, with interest rates progressively getting better for each higher interval. For example, a borrower with a middle credit score between 660 - 680 will have a higher interest rate (presuming all other variables being equal) compared to one with a 680 - 700 score. … (0 comments)
bonnie: Bonnie Brae RE Trends: Credit Remediation
- 12/07/08 09:41 AM
What is a FICO score? FICO stands for Fair Isaac Corporation, a company that created the most used credit scoring model in the United States. An individual's credit score is calculated through a statistical algorithm and is used as a factor in determining the likelihood of a borrower defaulting on a loan. FICO scores are generally used for obtaining mortgages, car loans or consumer credit. The scores are provided from the three major credit reporting agencies: Equifax, Experian and Transunion. Typically, there is a variance amongst the scores since each agency has a slightly different scoring formula. FICO scores range from … (0 comments)
bonnie: Denver, CO (Including Bonnie Brae) Fourth Quarter 2007 Home Price Performance
- 10/20/08 08:26 AM
Recap of Denver Fourth Quarter 2007 Home Price PerformanceThe average home price in Metro Denver increased +2% in the full year 2005 to the full year 2006, from $309,000 to $317,000.Comparing 2006 to 2007, the average home price across the metro dropped 2%, from $311,000. The average price of a foreclosure or short sale dropped in that time period -3% to $188,000. The average price of a non-distress sale increased 5% to $370,000. Sales volume over the last twelve months is off -4% for DSF/ASF. Foreclosure and short sale volume is up +31%; non-distress seller volume is off 20%. If you … (0 comments)
Topic: Investor Series: Why sewer scopes are important;)
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