Good news for San Gabriel Valley homebuyers: Prior to the Thanksgiving holiday, President Obama reinstated higher FHA loan limits through 2013. FHA loan limits can go up to 125 percent of local area median home prices. This means you can obtain a mortgage for a purchase or refinance in Claremont, San Dimas, LaVerne or Glendora for up to $729,750!
Currently there are over 33 homes for sale in Claremont, CA and 42 homes in Glendora, CA listed at $700k and above.
These high FHA loan limits combined with low downpayment options present a great opportunity for a qualified home buyer to purchase a high-end home in Claremont or Glendora, California while holding on to more of your own cash.
We are in a real estate market that continues getting worse and house prices that continue going down. More and more people need to sell their houses or lose them to an already saturated market.
This trend is likely to continue in the foreseeable future, meaning the prices of most houses will be less tomorrow that they are today.
So how can you make sure you are safe as a real estate investor so that the house you buy today makes you a profit tomorrow?
Most home owners looking to sell their houses now understand that the value of their house is quite unstable.
They do realize that prices continue to go down, and that their house may not be worth what it was just two months ago.
They also understand that everyone now buys houses below market value.
There are so many houses sitting out there that you are almost guaranteed to successfully negotiate your price down, even if the asking price is already well below market value.
Motivated sellers therefore know that even though they think they are giving you a discount, you must also give a discount when you sell the property.
for instance, you could end up holding a property for six months if you buy, fix and sell.
How much value will the house lose in this time? If you do not answer this question before you buy, you are likely to end up paying too much for your properties.
If your business model is to wholesale houses, you still need to answer this question. How much will your buyer need to discount the property when they sell? After all, if you do not leave enough money in the deal for your wholesale buyer to make money, you cannot sell a property as a wholesale deal.
It used to be that buying properties at seventy cents on the dollar minus repairs was good enough. I believe some real estate investors are still using these numbers. 60% minus repairs is barely enough to get you by in the current market.
If you fix them and hold them as rentals, these numbers could work perfectly for you.
If you fix properties to sell them on retail, then your numbers must cater for long holding costs and associated price drop. Do not forget you will have to give a discount when you sell.
When you sell, giving a discount of 15% to 20% is not uncommon. Will that be enough to leave a profit for you?
Motivated sellers do understand these things. Of course, the discounted dollar figures they give you might look big. As a real estate investor, you need to work with percentages, not dollar figures.
I explain the numbers as percentages and it easy for them to see that margin is really quite small. Once they realize you are not taking advantage of them, they will sell their house to you at a price that makes you a profit.
I’ve lived in my current apartment for 2 1/2 years. I have paid my rent late several times but not 30 days late, more like 14 days or less late. i know this is poor renting but i didn’t think this could possibly cost me not getting qualified for a home. Is it true that paying your rent this late can get you disqualified for a home?
As a smart investor we can not deny the importance of investment in real estate. There are many ways to invest in real estate. But we should not forget that investment in real estate is not so easy as it seems. Real estate as an investment plays a very important role and it may also give us huge appreciation over a period of the which is very important to create a wealth in any individual portfolio. We at Just About Properties helps you to invest in different ways as follows
1. Appreciation of the Market Value of Properties
This is the most widely known way of profiting in real estate. A property is purchased and held. Over time, the value of the property appreciates, sometimes even faster than the overall market. Certain areas of the country have experienced significant appreciation in home values over the last ten years.
2. Real Estate Stocks and Mortgage Instruments
The passive investor would likely want to place investment funds into the stock market in the form of equities of major national homebuilders. Or they might invest in a Real Estate Investment Trust (REIT). This is a fund set up and managed to invest in stocks, bonds and mortgage instruments in the real estate area.
Discounted notes are another investment strategy. Sellers many times accept a mortgage from a buyer, and after payments have been made for a while, they want to convert to cash. They sell the note to an investor at a discount and the investor then gets payments from the buyer.
3. Regular price inflation in the economy.
Even if home values aren’t appreciating in a given area due to demand, their value can still increase significantly over time just due to economic inflation. If the cost of labor and materials to build a home are rising, then the construction of an identical property would be more costly. Thus the property’s value is higher just because of recreation costs.
4. Buying below market value.
For a variety of reasons, there are always property sellers that have an immediate need to get their equity out of the property. This need can be pressing enough that they’ll let the property go at a price significantly below its true market value. Some properties are in foreclosure and the lenders will take less than the market value in order to avoid further marketing expense and clear their books. When you can purchase one of these properties, you immediately enter an equity position that is your profit in the transaction.
5. Cash flows and Mortgage Payoff
Purchasing rental properties and keeping tenants in them results in cash flow in the form of rent payments. This can generally provide better returns than bank interest or stock appreciation.
Even if your rents on a property are only making the mortgage payments and no more, you are increasing your equity along the way. At some point the rents will totally satisfy the mortgage balance, and you’ll own the property free and clear.
6. You can increase value in the site and/or the property.
An example of both of site and property value increases might be a home in an area with great mountain views. However, this home is older and has small windows facing the views. In addition, some large trees are directly in the views, and there’s no outdoor enjoyment areas on that side of the home. You purchase the property and do three things:
a. Site Value – You remove one tree and trim the others to open up the view.
b. Site Value/Property Value – You add a patio and deck on the side of the home facing the views.
c. Property Value – You add larger windows in the home facing the view.
7. You can convert the use of the property.
A classic example of this would be the purchase of apartments with low rent yields, remodeling the structure and converting the apartments to condominiums for sale.
8. Create new value in the neighborhood.
Getting into an area early when it’s beginning to gentrify can be quite profitable. All around the country, urban neighborhoods are experiencing renewal. Older properties are being refurbished and values jump significantly.
Just About Properties wish this information will help you invest in real estate in more effective manner and help you to create wealth through real estate.
my credit average is 590 between the three bureaus. my credit to debt ratio is roughly 60% avail.
I got preapproved for a FHA but I am wondering what I should get for an interest rate. Plus is 3% down is better to do or a DAP program. I am looking at a 75K house.
a hefty down payment such as 5%.(for conventional loan) i can do a 3% which is what a FHA requires. i believe to qualify you have to have a good credit record for the previous 2 yrs. which is not a prob. for me
I am currently a freshman in college and I am an undecided major. But, I am really interested in working in real estate. I have a 4 year full-ride scholarship for college, so I plan on earning a bachelors degree. After that, I plan to get my real estate license. But, I am not sure what I should major in that would go hand-in-hand with real estate and could potentially help me move up to other jobs. Does anyone have any suggestions? Thank You!
I know there are a lot of real estate schools out there but I am looking for one that will teach me the most information they can on commercial real estate in specific. It has to be a school I can do online or through correspondence. Thanks!
A friend is refinancing. He was approved for an FHA loan @ 5.75%. He is paying 2.75% points. They are including 2,500 up front PMI fees to be financed in the mortgage. In addition, he is being asked to pay $60.00/PMI. His house is worth at least 266,000. He is obtaining a 152,000 loan. Is this a good deal. The credit was less than perfect.