FHA Loan

The temperatures are heating up and so is the renovation lending market in Texas.  The 203k loan is just one of the great loan programs out there that people can’t stop talking about.  It seems that only six months ago people hardly knew what this was and now we can’t seem to write them fast enough.  These loans give the ability to purchase and include the costs of the remodel.  Move in ready homes are going fast so now is the time to partner the purchase contract with a renovation loan which will allow a buyer to purchase “as is,” renovate the home to their specific taste and voila everyone is happy.

Stop and just consider for a minute how much time you could spend driving your clients all over town to find the perfect home but they want to make a low ball offer and the house has multiple offers. The media has not caught on to how busy the market is right now and consumers still think low ball offers are ok…but we know that is not the case right now. The solution is to introduce your client to a renovation loan and allow a little more upfront access into the property for inspection and contractor bids! That’s it and not only will this be a sale but you can now move on to the next client! Your time spent will probably add up to about the same. Now is the time to take advantage of the FHA 203k, HomeStyle or HomePath Renovation Loan – take that not so perfect home and let your buyer make it perfect for themselves. So whether the seller is distressed and doesn’t have money for repairs…or a potential buyer just doesn’t happen to think cobalt blue makes a great dining room color and lime green is an inviting entry way, these loans can help.

These loans are not just for foreclosures or distressed properties! They are also great for properties that just need a cosmetic overhaul. With the HomeStyle Renovation loan it even allows for a swimming pool, outdoor living space as well as cosmetic and or structural work as well.

Don’t let the old chatter of “203k’s never close” scare you! I am here to tell you they close all month long. The only thing I will caution you is work with an expert in renovation loans, not just a loan officer trying it out for the first time. What can I promise you: Me and my team of Specialists will get this closed and we will take care of your client after the sale with in-house Servicing to ensure the renovations are completed.

Repairs don’t scare me and they shouldn’t scare you either! Call me today and let me dispel the renovation myth. Let’s make it a great 2012.

Just how primed is the 2012 real estate market? In my opinion this market presents one of the best opportunities of our lifetime. Let me rephrase,  one of the best opportunities of our lifetime IF approached correctly.

Real Estate investors have a market in place that can provide generational wealth.

So what is the proper approach? Why do I think real estate is such a good investment? Should you even listen to me or am I just another industry sunshine pumper? Before we answer those pressing questions, lets talk numbers.

Where Should I Put My Money – Real Estate, Stocks, Gold, Baseball Cards, Under My Mattress?

A recent Gallup poll suggested the majority of American think GOLD is the best place for their money. I don’t find that surprising since the majority of the populous are not so bright.

They are bandwagoners. By the time they get on the bandwagon their investment is near its peak, returns / appreciation has mostly already taken place and they are arriving just in time to see the bubble burst.

I’m not saying that Gold is a bad investment, there still may be some appreciation there and it is certainly a safe hedge against any economic collapses.

Some people are just buying gold because they heard it on the news. Others truly believe that we are heading for disaster and that gold is the only place to keep your money.

To the first group, you’re a lost cause. I can insult you because the chances you made it this far into the post are slim to none. How about a little illustration? Pay close attention to education levels in the chart below.

Looks like the educated folks have a clear choice. Lets check out another VERY telling chart on gold prices. Like I said before, the majority of people are bandwagoners, the sheep flock to the investment too late and make minimal gains or take substantial losses.

What do you see in this chart? I see a bubble. We all know what happens to bubbles right? The burst of course. If you were a real estate investor in 2005 then you know all too well about that.

Why Real Estate Investment Is a HUGE Opportunity

Before I start with the stats let me provide a disclaimer, I do have a horse in this game. I am a mortgage lender afterall. With that said it doesn’t matter if the market is booming or busting, I will still make my living. My best two years ever were in 2009 and 2010.

So, you have reviewed the charts on gold. You may or may not have come to the same terms as me on it’s potential. Before you make up you mind though stay with me for a moment. I have some more data I’d like to present.

We all know what happen to housing in 2006. Lead for years with lending guidelines that were too slack, the over extension of credit nearly brought it all down.

The bubble burst, carnage ensued. Fear followed. Warren Buffet provided the following investment advice on fear in the market and how to let it guide your investments.

“Be fearful when others are greedy and to be greedy only when others are fearful.”

There’s still fear in the real estate market. There shouldn’t be, as evidenced by the uptick in the chart, but it’s still there. The fear makes the market the perfect opportunity for savvy investors.

Let’s take one city and look at some data. In this example we going to use the Twin Cities

It doesn’t get clear than that. People can’t get a loan, they need to rent. The market rent is increasing and the vacancy rate is decreasing. People need rental units. Real estate investors NEED to provide them.

In addition to the appreciation investors will get, the demand insures that their investment properties will stay occupied.

Let’s look at one more very telling chart. This one is national, it illustrates cost of buying an investment against the rents demanded.

When you factor in historically low interest rates, deeply discounted foreclosures and huge demand for single family rentals it isn’t hard to understand why I am so bullish on the real estate investment market.

Convinced? Not yet? Make no mind, let’s discuss investment yields and how to make the most of your real estate venture.

Let’s also look at some of the absolute best US markets to buy rentals.

The South is leading the way due to affordable housing, job growth and overall quality of life.

• Durham, NC (Winston Salem, NC) – Three universities, an abundance of jobs, great climate and affordable housing make the Research Triangle a top pick.
• Huntsville, AL – Low unemployment and incredibly affordable housing make N. Alabama a prime location to invest in real estate.
• Indianapolis, IN – plenty of jobs, low cost of living and an inventory perfectly suited for real estate investors make Indiana a solid investment choice
• Knoxville, TN – A university town with a constant need for rental units. Knoxville is prime.
• Greenville, SC – Another university town makes the list. Constant demand along with a BMW car plant make this South Carolina town an awesome choice for an investor.
• Orlando, FL – Despite what the map says this is one of my favorite rental markets. Demand is high, supply is low and there’s money to be made. Choose your team wisely here.

Real Estate Investing Gameplan

I’m assuming by now that you see the value that this real estate market presents. Channeling Buffet one more time, he says;

 ”If i had a way of buying a couple hundred thousand single family homes and had a way of managing them — the management is really the problem because they’re one by one, not like apartment houses, but i would load up on them ” Warren Buffet March 2012

They key to success in real estate is understanding you don’t know everything. You need a team of professionals surrounding you to guide and advise.

Unless you are a cash buyer, which makes ZERO sense with historically lower interest rates and tax benefits available, you’ll need a seasoned and experienced mortgage lender first and foremost.

You need to understand the financing options and the underwriting restrictions placed on investors. From straight purchase loans toinvestor renovation loans to Homepath loans, options are available.

Once you determine your buying power you need a skilled real estate agent to guide you through the negotiations and help you hunt the best properties available.

If you’re going to renovate then use your lender and agent to gather the right contractor connections.

If you plan on managing multiple properties then you will probably want a awesome property management company to help you.

With potential returns exceeding 10%, real estate is the best bet available.

The US market has no where to go but up. Will you get in now or will you wait until it is too late?

No matter what market you are in, our network of connected and educated mortgage professionals can guide you to the right real estate agent, the right property and the right loan product.

Need more investor advice?

Jonathan Blackwell