So I stole this article from an email I received. With all the TV shows on Flipping, you'd think it was SO easy! In all honesty, I still have clients who are flipping but this trend has come and gone (Caveat--the 'simple' picks have come and gone by now; what's left are rough properties and many are in rough areas). In essence, the tone of the article (in my opinion) is 'be careful'. The pros are doing it still and having mixed success. Do you want to risk your entire nest egg as a 'newbie'? Perhaps not... Read on!
SEE BELOW FOR HEADINGS/TEXT OF EMAIL RECEIVED...
What's the Deal with Flipped Homes?
Americans love their home improvement and design shows. With entire channels dedicated to DIY, home decor and design, and everything related to U.S. real estate, we love the possibilities that lie within the real estate market in America. One popular aspect of many shows and publications is home or house flipping. We hear a lot about flipping homes, but what does that really mean? Is it feasible for everyone? Are there risks? Should you buy a flipped home, and what questions should you ask if your property search lands on a potentially flipped property?
What is Flipping?
Flipping is a predominately U.S. term used to describe purchasing a property with the intent of quickly reselling it for profit. Most of the time, properties that are purchased with the intent to flip are those that are distressed, abandoned, or otherwise in need of repairs that make the property less desirable to other potential buyers. Flipping has become increasingly popular throughout the U.S. in the last decade, and many people have become successful real estate flippers with the vast and varied real estate markets throughout the United States.
Can Anyone Flip a Property?
Many programs on television make house flipping look easily attainable to anyone and everyone. The fact remains that flipping a property is risky business that requires a large amount of work, experience, funding (preferably cash), excellent credit and a good understanding and almost intuitive knowledge of the real estate market. If you're interested in flipping properties, the best way to get started is by talking to someone who has experience and has had success in flipping real estate. There are many things to know about flipping real estate that should be addressed before the idea is even entertained.
What are the Risks of Flipping a Home?
There are risks with any kind of real estate investment, but inexperienced flippers can make a number of mistakes. There are a number of costs that come with flipping a property, and new flippers can make the mistake of not having enough money to cover the entire project – from the acquisition of the property, to the renovations, taxes, utilities and more. Another risk of flipping properties is time, or lack of time. Finding the right property can take months, and once you own the property there is a time commitment to renovations, commuting, inspections, and ultimately the marketing and selling of the property.
Other risks that new flippers run into are not having enough knowledge about the real estate market and failing to purchase the right property for a flip; a lack of skills when it comes to working on the property and putting in the sweat equity (hard work) required to get it up to market standards; and ultimately lacking patience when it comes to the entire project as a whole.
Should I Buy a Flipped Home?
Often, flipped homes have mostly cosmetic changes done in order to attract buyers and ultimately get the property sold. You might fall in love with fresh paint and brand new appliances, and generally speaking, most flipped homes attract many buyers because they have a smaller initial to-do list than other properties on the market. If you're looking at a property that could be a flip, be sure to ask these questions: What is the home's sale history? If the home recently sold for much less than its current asking price, it's possible it is a flip. Does the outside of the home match what's inside? If the exterior of the home is older, and the interior looks brand new, it's very possible someone is trying to flip the property. Information is your best friend when it comes to a flipped home, so getting the most information up front will help guide you toward pursuing the property or not.
If you believe you're looking at a flipped home, consider asking the seller what changes have been made to the property, and check to see if any permits were issued for the work. Also, some buyers might be blinded by all the new interior cosmetic updates that they forget about the bones and foundation of the home. Regardless of whether a home is old or new, always hire an experienced and licensed inspector to check over the home to make sure you're getting the most for your money when it comes to buying a property.
Showing posts with label economy. Show all posts
Showing posts with label economy. Show all posts
Thursday, February 11, 2016
Thursday, January 22, 2015
When to shop for a cheaper closing...
This article some great points but a few things to point out--title insurance rates are set by the title insurance company here in GA; we use Old Republic Title as they offer solid service/reliability and great common-sense underwriting (and fair fees too!). For the record, most title companies in GA do not offer re-issue rates so ignore that part of the story.
One other comment that needs to be 'tweaked' is about closing on the last day of the month. YES you'd save the most in interest if you close the last day of the month or close to it (call me and I will explain). BUT how much is your time worth? Or better yet-how much is your STRESS level worth? I can guarantee that MOST closing issues are due to rushed deals such as on month-end or for FRIDAY closings. If it were me (after 20 years doing closings) I'd prefer to close the week of the 25th or so on a Wednesday. Why Wednesday? People think they have to close on Friday so they can move the next day. If there is a problem with your closing (perhaps your wire didn't come in time) then you won't fund. If you have no money, you're not getting keys! Back when I closed for a National builder, if you don't have money, you don't get keys (actually the best policy). Did they care about that $150/hour moving company idling in the cul-de-sac? NO. If you close on Wednesday, you STILL move on Friday and you also have 2 bonus days to 'fix' problems like missing wires, walk-through issues, etc.
Finally, DO check into the firm where you're 'told' to close. Are they customer-service driven like us? If not, why are you closing there??? Give us a call today and schedule YOUR closing with US!
One other comment that needs to be 'tweaked' is about closing on the last day of the month. YES you'd save the most in interest if you close the last day of the month or close to it (call me and I will explain). BUT how much is your time worth? Or better yet-how much is your STRESS level worth? I can guarantee that MOST closing issues are due to rushed deals such as on month-end or for FRIDAY closings. If it were me (after 20 years doing closings) I'd prefer to close the week of the 25th or so on a Wednesday. Why Wednesday? People think they have to close on Friday so they can move the next day. If there is a problem with your closing (perhaps your wire didn't come in time) then you won't fund. If you have no money, you're not getting keys! Back when I closed for a National builder, if you don't have money, you don't get keys (actually the best policy). Did they care about that $150/hour moving company idling in the cul-de-sac? NO. If you close on Wednesday, you STILL move on Friday and you also have 2 bonus days to 'fix' problems like missing wires, walk-through issues, etc.
Finally, DO check into the firm where you're 'told' to close. Are they customer-service driven like us? If not, why are you closing there??? Give us a call today and schedule YOUR closing with US!
Friday, January 10, 2014
Mortgage Changes for 2014
I received the following info from a realtor friend's email newsletter; thought I'd share... Happy 2014! Bo
Mortgage Changes to Know in 2014
The New Year is almost here, and with it comes a bevy of legal and regulatory changes, especially for the mortgage industry. To help potential homebuyers understand how the changes will affect their mortgage processes, Don Frommeyer, CRMS, President of NAMB (The Association of Mortgage Professionals), outlines some of the regulations set to start in January 2014.
“Since 2009, the housing market has been working to create standards and regulations that minimize the risk of another mortgage industry fiasco,” says Frommeyer. “The ability-to-repay mandate is a perfect example of this and it exemplifies how mortgage professionals are taking extra caution with every customer.”
Upcoming mortgage industry changes include:
- Ability-to-Repay Mandate: The CFPB designed this regulation to set a gold-standard for lending to ensure each and every borrower is a qualified borrower. Lenders will follow a set of guidelines to establish a consumer’s income, assets and obligations before deeming them eligible. The CFPB rules establish a standard for what the government considers a “qualified mortgage.”
- Decrease in FHA Loan Limit: The Federal Housing Administration (FHA) announced that beginning January 1, 2014, mortgages will be limited to $625,000, down from $729,750. Homebuyers looking to obtain a larger loan will have to apply for a jumbo loan, which will most likely come with a higher down payment. “For many areas of the country this change won’t be a huge issue as average home prices fall below the established limit. However, borrowers in metropolitan areas with higher average housing prices may face challenges when applying for mortgages as the 20 percent down payment associated with jumbo loans will be an enormous increase from a traditional loan’s 3.5 percent down payment,” notes Frommeyer.
- Caps on Loan Origination Fees: January 10, 2014 brings a rule for the Qualified Mortgage that points and fees on mortgages cannot exceed 3%.
- Tighter Regulations for Self-Employed: As the rules to create a QM (qualified-mortgage) take effect, people without a W-2 will face difficulty when they apply for loans. It’s more of a task for individuals to prove their debt-to-income ratio without the proper documentation, even if they have a high net-worth and perfect credit. The income is calculated bringing into play the customer write offs to reduce taxable income.
For more information, visit www.namb.org
Mortgage Changes to Know in 2014
The New Year is almost here, and with it comes a bevy of legal and regulatory changes, especially for the mortgage industry. To help potential homebuyers understand how the changes will affect their mortgage processes, Don Frommeyer, CRMS, President of NAMB (The Association of Mortgage Professionals), outlines some of the regulations set to start in January 2014.
“Since 2009, the housing market has been working to create standards and regulations that minimize the risk of another mortgage industry fiasco,” says Frommeyer. “The ability-to-repay mandate is a perfect example of this and it exemplifies how mortgage professionals are taking extra caution with every customer.”
Upcoming mortgage industry changes include:
- Ability-to-Repay Mandate: The CFPB designed this regulation to set a gold-standard for lending to ensure each and every borrower is a qualified borrower. Lenders will follow a set of guidelines to establish a consumer’s income, assets and obligations before deeming them eligible. The CFPB rules establish a standard for what the government considers a “qualified mortgage.”
- Decrease in FHA Loan Limit: The Federal Housing Administration (FHA) announced that beginning January 1, 2014, mortgages will be limited to $625,000, down from $729,750. Homebuyers looking to obtain a larger loan will have to apply for a jumbo loan, which will most likely come with a higher down payment. “For many areas of the country this change won’t be a huge issue as average home prices fall below the established limit. However, borrowers in metropolitan areas with higher average housing prices may face challenges when applying for mortgages as the 20 percent down payment associated with jumbo loans will be an enormous increase from a traditional loan’s 3.5 percent down payment,” notes Frommeyer.
- Caps on Loan Origination Fees: January 10, 2014 brings a rule for the Qualified Mortgage that points and fees on mortgages cannot exceed 3%.
- Tighter Regulations for Self-Employed: As the rules to create a QM (qualified-mortgage) take effect, people without a W-2 will face difficulty when they apply for loans. It’s more of a task for individuals to prove their debt-to-income ratio without the proper documentation, even if they have a high net-worth and perfect credit. The income is calculated bringing into play the customer write offs to reduce taxable income.
For more information, visit www.namb.org
Monday, August 1, 2011
A quick thought on our Debt Crisis!
I had to put the exclamation mark in the title to imitate the media and their hysterics--not to say that a debt default wouldn't put the US into a tailspin: It would. It's just my swipe at the lamestream media and their crazy thoughts. Whatever, here's my rant:
Saw a Harry Reid quote: "People on the right are upset, people on the left are upset, people in the middle are upset," he said. "It was a compromise." Ah, so that's what compromise is? Let's get both sides together and see who we can make blink first...
My response is this: the people who are upset are "We the People". Not only that, We the People (WTP) are the ones who are getting hosed. WTP will PAY for the needless spending. WTP will be taxed if they cannot make up their minds. WTP will pay regardless of who 'wins' and WTP are the ones injured by government largess. When will D.C. figure out that WTP are why they (politicians) are there? Let's have more thinking of WTP instead of making us say WTF!
WE THE PEOPLE put you in office; shame on us for allowing you to remain there... All of you are a disappointment; all of you are to blame. Be it back in the "W" days (of course it's all his fault, right?) or in the current "Big Government is Good Government" Administration (just say NO)--you (read: Congress and our Government) have spent MY MONEY and wasted MY MONEY and you are harming the country. SHAME ON ALL OF YOU! Now quit bickering and fix this mess!
Saw a Harry Reid quote: "People on the right are upset, people on the left are upset, people in the middle are upset," he said. "It was a compromise." Ah, so that's what compromise is? Let's get both sides together and see who we can make blink first...
My response is this: the people who are upset are "We the People". Not only that, We the People (WTP) are the ones who are getting hosed. WTP will PAY for the needless spending. WTP will be taxed if they cannot make up their minds. WTP will pay regardless of who 'wins' and WTP are the ones injured by government largess. When will D.C. figure out that WTP are why they (politicians) are there? Let's have more thinking of WTP instead of making us say WTF!
WE THE PEOPLE put you in office; shame on us for allowing you to remain there... All of you are a disappointment; all of you are to blame. Be it back in the "W" days (of course it's all his fault, right?) or in the current "Big Government is Good Government" Administration (just say NO)--you (read: Congress and our Government) have spent MY MONEY and wasted MY MONEY and you are harming the country. SHAME ON ALL OF YOU! Now quit bickering and fix this mess!
Tuesday, August 10, 2010
What is a Libertarian?
My Mom faxed this article from today's USA Today from Rand Paul, who is running for the US Senate in Kentucky. I know nothing about him other than this article and I heard/read somewhere that he recently said some silly things that seemed bigoted. Not judging on that 'stuff' or even commenting on it, but really read that article and tell me where you can find much fault?
Personally, I think that the Government is causing a lot of our issues right now. Most of my economic commentary is found on my Economics blog, but this one is a bit more Political. Yes, the Economy is kind of 'stuck' right now. But think of this-would YOU want to hire anyone right now? There are so many governmental regulations coming down the road, such as the health care legislation. There are rumblings about raising the minimum wage (actually, indexing the minimum wage with inflation, which will serve to raise the wage). The "George Bush Tax Cuts" are set to expire and that may have some effect on hiring (I have read articles on both sides of this; some 'Pro-expiration' and some 'Anti-expiration' and both sides actually have merit).
With the Government takeover of Wall Street companies as well as at GM we have unprecedented meddling into private enterprise (ditto for the new 'banking bill'). Oh, and evil BP had to cough up $20B (that's the big B for Billion) 'up front' for the disaster in the Gulf--while it may be warranted ($3B has been paid out I believe) it's bizarre to see a Government go after a Company in this manner. What I'm trying to say is that there is too much Government interference in our lives. Even the most Liberal among us can admit that SOMETHING in their life has been affected by Governmental regulations--to their detriment. How about LESS Government?
You can blame 'de-regulation' for many economic woes; you can blame too little oversight for the mortgage meltdown--if you dig a little deeper it's not just Wall Street that's to blame--try our Government and the 'goal' of putting more people in houses dating back to the late 1990's. That's a self-serving goal for me as well (as a real estate attorney and as the son of a builder) but some of these buyers weren't ready for home ownership (or had loans that were higher than they should have had, etc.). I guess look at it this way--if you made $3000 per month, would you try to take on a mortgage that would be $2800 per month? If you wanted to walk everywhere, have no money for furnishings or entertainment and eat Ramen noodles daily, maybe you would go for that deal. I would think that would be setting up a failure!
Try taking this quiz--you may find out you are a Libertarian as well! (I was!) Does that mean that we all want to legalize marijuana (one of the Libertarian Party's stated platform items)? Not really, but "Less Government" is the main focus for me--is the Libertarian Party or Tea Party "THE" answer? Not so much. But I am certainly NOT a Democrat and I don't feel the Republicans have truly represented me at all in the last several years, so where to go? THAT's the main Q I have. Sigh...
Personally, I think that the Government is causing a lot of our issues right now. Most of my economic commentary is found on my Economics blog, but this one is a bit more Political. Yes, the Economy is kind of 'stuck' right now. But think of this-would YOU want to hire anyone right now? There are so many governmental regulations coming down the road, such as the health care legislation. There are rumblings about raising the minimum wage (actually, indexing the minimum wage with inflation, which will serve to raise the wage). The "George Bush Tax Cuts" are set to expire and that may have some effect on hiring (I have read articles on both sides of this; some 'Pro-expiration' and some 'Anti-expiration' and both sides actually have merit).
With the Government takeover of Wall Street companies as well as at GM we have unprecedented meddling into private enterprise (ditto for the new 'banking bill'). Oh, and evil BP had to cough up $20B (that's the big B for Billion) 'up front' for the disaster in the Gulf--while it may be warranted ($3B has been paid out I believe) it's bizarre to see a Government go after a Company in this manner. What I'm trying to say is that there is too much Government interference in our lives. Even the most Liberal among us can admit that SOMETHING in their life has been affected by Governmental regulations--to their detriment. How about LESS Government?
You can blame 'de-regulation' for many economic woes; you can blame too little oversight for the mortgage meltdown--if you dig a little deeper it's not just Wall Street that's to blame--try our Government and the 'goal' of putting more people in houses dating back to the late 1990's. That's a self-serving goal for me as well (as a real estate attorney and as the son of a builder) but some of these buyers weren't ready for home ownership (or had loans that were higher than they should have had, etc.). I guess look at it this way--if you made $3000 per month, would you try to take on a mortgage that would be $2800 per month? If you wanted to walk everywhere, have no money for furnishings or entertainment and eat Ramen noodles daily, maybe you would go for that deal. I would think that would be setting up a failure!
Try taking this quiz--you may find out you are a Libertarian as well! (I was!) Does that mean that we all want to legalize marijuana (one of the Libertarian Party's stated platform items)? Not really, but "Less Government" is the main focus for me--is the Libertarian Party or Tea Party "THE" answer? Not so much. But I am certainly NOT a Democrat and I don't feel the Republicans have truly represented me at all in the last several years, so where to go? THAT's the main Q I have. Sigh...
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