Investors

Lessons on How Not to Annoy your Real Estate Agent

AnnoyedAgentHaving a good relationship with your real estate agent can make things easier and it’s important to remember that treating them kindly can go a long way and will encourage them to go the extra mile for you.  Here are a few things NOT to do to your real estate agent:

  1. Don’t cheat on your agent.  Find one agent to work with that you like and stick with them.  They work hard for you in hopes of getting paid.
  2. Don’t haggle over price.  If you are selling your home and your agent thinks you have received a great offer, don’t hold out for a better one.  If you are buying, don’t significantly low-ball the asking price.
  3. Don’t skip out on showings.  If you set up an appointment with your agent to see a home, don’t be a no-show.  This is inconsiderate to your agent.
  4. Don’t waste your agent’s time.  If you aren’t serious about making an offer on a particular property, do not request multiple showings pretending that you are interested.
  5. Don’t stick around for an open house.  If your agent is trying to sell your home, it’s proper etiquette to leave the premises until the event is over.  This allows potential buyers to feel more comfortable to explore your home.

Student Housing is Heating Up

Attractive girl writing notes at home smilingThere is a sector of real estate that has quietly been heating up and investors want in; it’s student housing.  Forget the image you have in your head of the dorms you lived in while attending college years ago.  This isn’t your stereotypical student housing of nondescript rooms with dirty carpet, linoleum floors, and equipped with only the bare necessities.  Today’s student housing is all about the comforts of home.

A large group of today’s college students have grown up living with luxury amenities at home and want the same comforts while attending school.  Some private investors and REITs (real estate investment trust) have identified this opportunity to build new housing both on and off campus.  Universities are welcoming the on campus private investment since budgets have been tightening.

These new student housing buildings could easily be mistaken for a luxury hotel or apartment building and feature flat screen TVs, state of the art fitness centers, and full kitchens and baths.  Bill Bayless, CEO of American Campus Communities, the largest student housing REIT in the U.S. commented, “Student housing isn’t just real estate. It’s really creating physical assets that are conducive to academic achievement.”  It is estimated that the student housing sector is a $4-5 billion business and still growing.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

Housing Bubbles Abroad?

With the run up in home prices in the U.S. some people are concerned about a possible housing bubble again.  But several economists have popped a hole in this belief based on market fundamentals.  Lending standards having gotten tighter and the size of down payments have increased from the pre-housing bubble burst.   However, the story aboard seems to be different.  The Deputy Managing Director of the International Monetary Fund (IMF), Martin Zhu, noted in a recent speech that housing prices were climbing in several countries.

house prices around the world_rev2 copyCanada is experiencing strong home and apartment construction and has high price-to-rent and price-to-income ratios making affordability tighter.  It is also experiencing a lot of foreign investing from China.  Real home price appreciation has almost hit 20 percent.

The country of Norway has reported around a 30 percent jump in home prices since the worst of the Global Recession which is partly due to surging population and incomes as a result of immigration. A large portion of the consumer’s wealth is sitting in illiquid real estate and household debt is high, so a housing downturn could hurt the country.

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Since the beginning of 2009, Switzerland’s home prices have increased more than 20 percent and mortgage debt has jumped to 140 percent  of GDP, which for some analysts is a warning sign.  There have been efforts to tighten lending standards, as we have seen here in the U.S. after the housing collapse, and increased bank reserves.  For these countries and several others real estate is still booming but are there bubbles looming?

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

Castle Peak Homes Gives New Life to Older Properties

Last year the housing market was mostly dominated by cash investors, many planning to flip properties or lease them out.  So far during 2014 investors still play a large role in the market although to a lesser degree since interest rates and prices have continued to rise.  Today we are taking a break from the housing market’s latest news and economic data reports to focus on a part of our business that brings new life to properties in need of a facelift.

Castle Peak Homes takes pride in improving the neighborhoods where we purchase properties by completing renovations that bring back the original glory of structures while including modern updates.  Each neighborhood has its own charm and style and keeping this intact is important in preserving these areas.  Castle Peak Homes embraces the original architectural style of each property and enhances them with modern day elements such as hardwood floors, granite counter tops and updated bathrooms.

One property Castle Peak Homes recently purchased and renovated was in Ft. Worth, Texas.  From the outside this duplex looked worn down and tired.  A fresh exterior coat of paint and bright new shutters helped transition this house to a home.  The existing hardwood floors were refinished, new interior paint throughout added, and a privacy fence in the backyard was installed along with some beautiful landscaping.  One of the kitchens was tiled to give it an undated feel as well.  The ‘before’ pictures first and and the ‘after’ pictures are next.

2713 exterior before 2713 exterior after

2713 rear after 2713 new after rear

Another purchased property, also situated in Ft. Worth, received a facelift.  This house had worn carpet and out-dated dark wood paneled walls.   A complete interior paint job, removal of the carpet and refinishing of the hardwood floors helped bring this house back to life.  A highlighted area of transformation was in one of the homes bedrooms which featured a fireplace.

Fire Place Before  Fire Place After

Castle Peak Homes is proud to add value to neighborhoods through the renovation of purchased properties and, at the same time, maintaining the character of each home as well as the charm and style of the neighborhood.

Please visit Castle Peak Homes for more information on our properties.  For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

Bridging the Down Payment Cash Gap | 10 Evolving Resources

While most Americans see homeownership as a good financial choice, many find that buying is easier said than done.  Recent surveys indicate that 31% of Boomers and 31% of Gen Y respondents consider 20% down payments a major obstacle.

Improving-Real-Estate-Markets

Improving Real Estate Markets

Creative down payment options are emerging and so is the debate about whether low down payments lead to default. The benefits of a sizeable down payment are well documented. As home price appreciation outpaces wage growth however, prospective buyers worry that while waiting to save a 20% down payment; home price appreciation and rising interest rates will price them out of the market.

One thing is certain; buyers at both ends of the price spectrum are now exploring ways to conserve cash while pursuing the home of their dreams.  Today’s segment spotlights four of ten financing options qualified buyers are exploring to help bridge the down payment cash gap.

Shared Appreciation Mortgages—In the luxury home market, shared appreciation mortgages are emerging as a way to own without exhausting cash reserves for hefty down payments.  Bloomberg BusinessWeek showcased buyer Jeff Uter, a business consultant purchasing a $780,000 property in Orange County, CA. Instead of investing the $156,000 down payment from personal assets, Uter funded half the down payment and accepted the remaining $78,000 from San Francisco –based investor FirstRex. The investor agreed to a 40 percent share of proceeds from the future sale of the property. This approach is limited to high-dollar properties primarily in California, Washington, Oregon, Massachusetts and Connecticut. A number of luxury home lenders now allow such participation.

Navy Federal—Located in Vienna, VA, Navy Federal is reportedly the nation’s largest credit union. Members include the military, plus many but not all civilian employees of the military and Defense Department members and family.  Loans do not require private mortgage insurance (PMI). Spokesperson Dana DeSarno reported that their “Homebuyer’s Choice Program” provides 100% financing, for members not eligible for VA loans. Many of their borrowers are first-time homebuyers.

FHA Loans— FHA’s $100 Down Payment Program is still available in designated states. (Alabama, Florida, Georgia, Kentucky, Illinois, Indiana, Mississippi, North Carolina, South Carolina, Tennessee, Puerto Rico, and Virgin Islands). The program is available to qualified owner-occupant buyers, only on HUD properties which meet condition requirements for FHA financing.

In other states, qualified buyers can purchase HUD homes for 3.5% down with an FHA loan.  Mortgage insurance is required.

In the next segment we will review six additional funding options plus an online resource containing more than 1,500 down payment programs from over 1,000 providers.

For information on effective ways to manage institutional and individual real estate portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter.

Equity Crowdfunding | Finally Small Investors May Get a Piece of the Action

“Crowdfunding is rapidly changing the real-estate investment market, offering developers new ways to finance projects, small investors a way in, and the socially conscious an avenue to support their local communities.” – Forbes

Housing-MovementOn Wednesday, October 23rd a unanimous vote of the five-member Securities and Exchange Commission (SEC) made headline news. The vote advanced a proposal which could re-define who gets to invest in “ground-floor” business opportunities. It could radically change how start-ups raise capital. The proposal has the potential to unlock billions of investment capital allowing investors to consolidate revenue to fund real estate portfolios or new products and ideas.

The proposed rules were introduced to support the implementation of Title III of the Jumpstart Our Business Startup (JOBS) Act. The intent of the legislation and proposed structure is to allow smaller companies to gather capital from a broader spectrum of investors, avoiding the need for high cost Initial Public Offerings (IPOs), or the pursuit of millionaire private investors.

Imagine a virtual Shark Tank, but with a lot more sharks. Instead of being limited to small panels of mega-millionaires, entrepreneurs could appeal to a virtual audience of mainstream backers, each investing blocks of capital in exchange for equity.

For the first time since the 1933 Securities Act, the proposal (if finalized) would open equity investment opportunities allowing  small investors to purchase a stake in promising start-ups. Currently such equity shares are reserved for “accredited investors” with a verifiable net worth of $1 million or earnings of $200,000/year for the most recent three years.

The SEC proposal created a structure (funding portals) for the new brand of financing and established limits for crowdfunding investors. Funding portals, will act as intermediaries linking business owners with investors online.

A company would be allowed raise a maximum of $1 million via crowdfunding per year.  Within a 12 month period investors would be bound by the following limits:

  • If annual income is less than $100,000 the limit is the greater of $2000 or 5% of annual income or net worth.
  • If annual income equals or exceeds $100,000 the limit is the greater of 10% of income or net worth. Securities purchased via crowdfunding would be capped at $100,000/year.

A major SEC concern is the potential for fraud. Many are worried that non-accredited investors may be less sophisticated and more vulnerable to deceptive offerings by scam artists.

The SEC has implemented a 90 day comment period to field questions and feedback on the proposed structure. Afterward, the Commission will review input and make a decision regarding implementation. Click here to register a comment with the SEC.

For information on effective ways to manage institutional and individual real estate portfolios nationwide, or to shop for real estate visit First Preston HT. Like us on Facebook. Follow us on Twitter .

Mortgage Rates and the Purchasing Power of a Dollar

Recent testimony by Fed Chairman, Ben Bernanke, has indicated a desire to begin tapering quantitative easing (QE) over the next few months but has stressed that interest rates will remain unchanged until certain economic indicators reflect an improving job market.  Interest rates have been held at record lows while the economy tries to get moving at full speed again.  Bernanke has stressed that he will continue to keep interest rates close to zero percent at least until 2015.

But mortgage rates have already started to climb as the housing sector grows legs.  The 30-year fixed-rate mortgage for this week is 4.56% and the 15-year fixed-rate mortgage is 3.62%.  While historically this is still low, these rates have increased by about 1% over the last 3 months.  Mortgage rates haven’t moved this much at such a quick pace since 2009.  So what does this mean if you are looking to purchase a home in the near future and why should you care about mortgage rates and monetary policy decisions by the Fed?

When mortgage rates rise, the purchasing power of the dollar diminishes in regards to home buying.  The degree to which it diminishes depends on how much mortgage rates fluctuate (inflation has a strong effect on purchasing power too, but that’s another conversation).  A home buyer is more concerned with the monthly cost and affordability of the house rather than just the sticker price of the house.  This is where mortgage rates can dictate how much home is actually affordable.

puchasing-power-mortgage-rates

As Mortgage Rates Rise, Purchasing Power Falls

A 1% increase in mortgage rates will reduce purchasing power by 10.75%.  Likewise, if rates decrease by 1%, a homebuyer will gain a 10.75% increase in your buying power.  What does this look like?  A homebuyer originally decided they could afford to purchase a $600,000 house when rates were at 4.5% (assuming a 30 year loan).  If rates jumped to 5.5% they would now only be able to only afford a $535,000 house.

Even though mortgage rates are starting to creep up, they are still historically at all-time lows which translate into historically high purchasing power.  Comparing rates from early 2011 to late 2012, purchasing power grew more than 22% and has continued to grow as mortgage rates have continued to fall.

The longevity of this current mortgage rate environment will be affected in part by Bernanke’s actions to begin tapering QE and raising the Federal Funds Rate, which could lead to further gains in mortgage rates.  It will be interesting to see if the increase in mortgage rates recently have a negative effect on July’s Pending Home Sales from June’s Pending Home Sales number.

For information on effective ways to manage institutional and individual portfolios nationwide, or to shop for real estate visit First Preston HT.  Like us on Facebook. Follow us on Twitter.

Sources:

http://www.bankrate.com/finance/mortgages/mortgage-analysis.aspx  http://themortgagereports.com/6354/mortgage-rates-purchasing-power

 

Will Anti-Flipping Waiver Impact Sales of Rehabbed Homes?

Heard the Great News for Rehabbed Homes & REO Sales?

The Federal Housing Administration has announced the extension of the “Anti-Flipping” waiver thru December 2011.

The Agency has discovered that the process of rehabilitating and re-selling distressed properties can be successfully completed in less than 90 days. There were also concerns that the waiting period made homes more vulnerable to vandalism. The former mandatory 90-day waiting period caused concern among neighborhood homeowners about the length of time that properties were sitting empty.  The extension is expected to accelerate the sale of rehabbed homes. This is exciting news for investors, homebuyers, and ultimately the REO industry.

Get the Word Out. Spreading the word to investors could mean that they can sell existing rehab inventory faster and take on additional properties. It could also mean

that a frustrated buyer may now be willing to move forward with the purchase of a home which they had ruled out because they did not want to wait the 90 days required by “anti-flipping” regulations.

Know the Facts. Properties must still meet certain criteria in order to benefit from the waiver.  Click here to get the details.

The snow has melted and it smells like Spring

The snow has melted, the birds are chirping, flowers are blooming, the grass is growing and it smells like Spring. With all these wonderful transitions from the past months comes Spring indoor and outdoor chores. Here are a few reminders to assist:

  • Take a walk around your home and inspect the walls for any irregularities that might need repair
  • There might be a need for brick and mortar repair or paint touchup
  • Caulk around windows
  • Mulch flowerbeds
  • Fertilize yard
  • Prune shrubs
  • Clean gutters
  • Check attic for ventilation and remove any critter nests
  • Have A/C serviced
  • Drain and flush hot water heater
  • Perform maintenance or service garage door and opener

Be proactive and maintain your property in the best possible condition.

BidSelect targets local buyers with featured properties

With so many buyers starting their home search online, its critical for listing agents to market properties with a solutions provider that can serve up relevant information to the buying community.  With this in mind, BidSelect has implemented technology so that featured properties displayed on the home page are more relevant to the end user.  In addition, they have expand the number of featured properties providing greater opportunity for sellers to increase traffic to their listings.

Visit www.bidselect.com to see the new home page changes.