jefferson park fix and flip: Jefferson Park RE Trends: Investing - 12/11/08 01:57 PM
Loan Considerations for Buy and Hold Investors
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 with other … (0 comments)

jefferson park fix and flip: Jefferson Park RE Trends: Fix and Flip Loans - 12/11/08 01:56 PM
Loan Considerations for Fix & Flip / Short-Term Investors
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 loan officer, … (1 comments)

jefferson park fix and flip: Jefferson Park Jumbo Loans - 12/11/08 01:55 PM
Loan Considerations for Jumbo Mortgages
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 fixed could … (0 comments)

jefferson park fix and flip: Jefferson Park Real Estate Loan Considerations - 12/11/08 01:54 PM
Loan Considerations for Loan Amounts Between $200K - $417K 
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. 
Every home buyer should first ask themselves … (0 comments)

jefferson park fix and flip: Jefferson Park RE Trends: FHA Tax Credit - 12/11/08 01:52 PM
FHA First-Time Buyer Tax Credit
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.
·   The … (0 comments)

jefferson park fix and flip: Jefferson Park Real Estate Trends: Buyers' Considerations - 12/11/08 01:51 PM
Loan considerations for a first time buyer
  
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)

jefferson park fix and flip: Jefferson Park Real Estate: Improve Your Interest Rates... - 12/11/08 01:50 PM
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)

jefferson park fix and flip: Jefferson Park RE Trends: Interest Rates and Credit - 12/11/08 01:48 PM
How does your FICO score impact your interest rate on your loan?
  
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)

jefferson park fix and flip: Jefferson Park RE Trends: Credit Info - 12/11/08 01:47 PM
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)

jefferson park fix and flip: Jefferson Park RE Trends: Denver Market Update - 12/11/08 01:47 PM
There are some signs of strengthening in our Denver market.  The metro area's inventory of available resale housing decreased 20% to 23,120 units in October from October 2007.  Some of this reduced inventory is attributed to homeowners taking their properties off the market in frustration because their property is not selling, but lower inventory implies a strengthening market.  Remember, the Denver area had housing inventory of 31,989 units in July 2006. Home sales rose 14% to 4,265 in September compared to the same month last year.  This is due almost entirely to the lower-end of the market (under $180K) selling like … (0 comments)

jefferson park fix and flip: Investing in Jefferson Park Real Estate 4 - Small (2-4 units) Apartment Building - 11/25/08 05:11 AM
This blog will discuss a type of real estate investment, small apartment buildings, in the Jefferson Park area in Denver.
 
What this investment is:  Purchase of duplex, triplex or quadplex to be rented to tenants, usually for 6-12 month terms.  Usually what the rental home / condo landlords graduate to.  In most markets they cost a little more than a rental home, but are much more likely to cash flow on the average month.  Less cash flow risk; if one unit is empty you have other tenants that still help you with the mortgage payment so it doesn't all come … (0 comments)

jefferson park fix and flip: Investing in Jefferson Park, Colorado Real Estate 3 - Rental Condo or Rental Home - 11/25/08 05:10 AM
This blog will discuss a type of real estate investment, rental condos or rental homes, in the Jefferson Park area in Denver.
 
What this investment is:  Purchase of a residential property to be rented out to tenants, usually on a 6-12 month lease term.  This is how most new landlords get started.  You can hire out all of the property management functions, but in many cases you will do many of them on your own.  There are smaller down payment requirements than for larger rental buildings.  The purchase process and financing process is very similar to what you experienced buying … (1 comments)

jefferson park fix and flip: Investing in Jefferson Park, Colorado Real Estate 2 - Assignments - 11/25/08 05:09 AM
This blog will discuss a type of real estate investment, assignments, in the Jefferson Park area in Denver.
 
What this investment is:  An investor who is interested in Assignments gets a property under contract for an attractive price then assigns the contract to another buyer, usually another investor.  The first investor will be paid a fee for the work.  If you don't have much equity to work with, and/or if your credit power is limited, assignments can be a way to get started in real estate investing.  You will need to have a strong "sales" personality to succeed at it, … (0 comments)

jefferson park fix and flip: Special considerations for Investor loans (Jefferson Park, Colorado) - 11/25/08 05:07 AM
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 loan. Now, my hope … (1 comments)

jefferson park fix and flip: Investor Series (Jefferson Park, Colorado): Why sewer scopes are important - 11/25/08 05:04 AM
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 only be about $2,000. We pay to … (0 comments)

jefferson park fix and flip: Investor Series (Jefferson Park, Colorado): Estimating Rents - 11/25/08 05:02 AM
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, I have a fairly simple solution. Multiply … (1 comments)

jefferson park fix and flip: Investor Series (Jefferson Park, Colorado): Things to look for when you look at roofs - 11/25/08 04:59 AM
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 and looking at 10 roofs simultaneously, you'll be amazed. Well, it turns … (0 comments)

jefferson park fix and flip: Investor Series (Jefferson Park, Colorado): Things to keep in mind when seeing a foreclosed home - 11/25/08 04:57 AM
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 walk in on someone camped out in a house, perhaps conducting illegal an activity.   
 
This … (0 comments)

jefferson park fix and flip: Investor Series (Jefferson Park, Colorado): Understanding Egress Windows - 11/25/08 04:56 AM
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 illegal.  Installing an egress window makes them … (0 comments)

jefferson park fix and flip: Topics for Investors (Jefferson Park, Colorado): Basement Kitchens - 11/25/08 04:54 AM
 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 even more practical reasons why having … (0 comments)

 

Ed Coulter

Highlands Ranch, CO

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